Ep 29: 2022 Annual Investment Goals and Predictions (Part 2)

2022 annual real estate investing goals and predictions, that's the topic as we wind down the year.

When you are an entrepreneur, when you're an investor, one of the things that you have to really focus on, and be confident about, is making predictions.

Seeing into the future.

If you're not able or willing to look into the future and do the research that it takes to have an opinion of what's going to happen, being a real estate investor being an entrepreneur is going to be very difficult for you.

In order to reduce your risk, you have to be able to do the research. And that research has to lead you to a conclusion. Then you have to be strong enough and confident enough to follow your insight, to follow your gut, to follow your research.

And that's what this episode is all about. Our annual goals and predictions for 2022 in real estate. Enjoy!

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Full Transcript

0:00

2022 annual goals and predictions, that's what the topic is today. And our last podcast, I thought was going to be really valuable. And I think this podcast is going to be a great compliment and just as valuable. When you are an entrepreneur, when you're an investor, I think one of the things that you have to really focus on and be confident about is making predictions. seeing into the future, if you're not able or willing to look into the future and do the homework and the research that it takes to have an opinion of what's going to happen. Being a real estate investor being an entrepreneur is going to be very difficult from for you. Because in order to reduce your risk, you have to be able to do the research. And then that research has to lead you to a conclusion. And then you have to be strong enough and confident enough to follow your insight to follow your gut to follow your research. And that's what this is all about the 2022 annual goals predictions is all about, well, what are you going to do next year? What's going to happen? And then running after your goals? So Grandal? What are your thoughts on just making predictions and setting goals? Every single year? Do you? Is it something that you always do? Is it something that you're like, it's not that important? What are your thoughts on it?

1:29

I mean, it's something we always do now, because we're on a path that we want to achieve, you know, so, and it's very hard to achieve great things in life without having a plan and a path and goals to get there. I mean, we started with like, where do we want our business to be in 10 years? Okay, what about where's it need to now be in five years, whereas it needs to be in three years, whereas it need to be a one year where's it need to be each quarter, and each month. And so that's like, that type of planning really puts you on track to really accomplish great things. And without it, it's just really, really hard. You're just kind of like a boat in the ocean without a rudder.

2:05

100% agree with you. And I think that when you're, it's crazy, because I'm going to go all the way back to the beginning of the podcast, when I told my story about me sitting in my parents basement broke is a joke, just staring at the wall going mad. What am I going to do here and I knew real estate was the thing. And, man, I would say within a year or two, you know, I just had to get my bearings of like being an entrepreneur and just getting in the habit of being an entrepreneur and just, you know, nobody's gonna tell you to wake up, nobody's gonna tell you to go to work, nobody's gonna pay you like, you just got to figure it out. Right? I was the best thing. But it was also the hardest thing to get used to, is to get into this. This pattern this routine, right? Well, then once I got into the routine, then I was fully committed to real estate. I was like, Okay, what am I gonna build here. And I've always been a builder, I always love to build things. And that's when I scratch on a piece of paper. And that's why, you know, obviously, in the beginning of these podcasts, design, your life is so important, I cannot tell you how important that is, because you need to have a visual of where you're going. And my visual was, I thought it was short term, when I first wrote down on a piece of paper, the different entities and the different things I was going to build and how they were going to interact with each other, and why I needed them, and how they were going to give me leverage and all these different things I was thinking about, it was one piece of paper, and it was a bunch of boxes, and each box represented basically a system or a business entity or whatever it was. Well, now 17 years later, I'm still working to achieve those little boxes. And it was so simple. But at the end of the day, you know, you're a young person out there, and you're like, Oh, I'm gonna make this happen in a year in two years and three years, well, 17 years later, I'm still going, Oh, I'm gonna make this happen. You know what I mean? And that's, and that's, but that's what you have to do is design that out. And you have to make those predictions. And you have to set those goals way out there. But then, like Robert just said, you take the sheet, and then you have to break it down. And it's amazing how deep you can go to get to the next month, the next quarter, the next year, what you're really trying to achieve seems like oh my gosh, this isn't really that big of a deal. Or why are you only focused on such a small thing? Because if you're gonna do small things really well, they take time and those small 1% incremental growth. That is what leads you to the big jump, and then you look back, and that's the biggest that's the coolest thing ever is that 17 years later, I look back and I'm like, I've already past goals that I set for myself, and I'm going I gotta come up with new goals. You know, and you don't even realize it because you're always setting a new standard. You're always trying to grow. You're always trying to push yourself become your best self. But you look back and you're like, oh my god, I can't believe how fast and how far I've come but yet that's still that big vision I had is still out there. And I, I feel like that's what it's all about. That's what this is about. That's what designing your life is all about. And that's what we're going to talk about today. So the first thing I want to start off with is his goals. Grando. And I kind of broke this down, and we want to, we want to there's three big buckets, goals, the market, and deals like what deals, you know, are you going to focus on what goals and goals is really entrepreneurial, or it's like it's painting that vision, it's, it's, it's going after that vision, and then market, it's really the market, like all these variables that are around you that influence your ability to reach your goals. That's what the markets all about. So I want to start off on goals. So those are the three big buckets. Now, the sub buckets underneath goals is going to be entrepreneurial goals, residential sales goals. And these are specific to I think both Robert and myself and the businesses that we're trying to build, you might be doing other things, because again, this is the value investor podcast, you might be doing a tech business or whatever, who knows we're focused on real estate right now. But it doesn't matter. I feel like you got to do the same go through the same process. So entrepreneurial goals, residential sales goals, residential investing goals, and commercial investment goals. Those are the sub buckets that we're going to talk about underneath goals. Now, the first one I want to talk about is entrepreneurial goals.

6:19

There's three different things. And I truly believe that Robert and I, we that's the best thing about talking to Robert and having doing this podcast and just being good friends is that I feel like him and I are on such the same wavelength as far as what we want to do in life and where we're going and how we want to get there. And when it comes to entrepreneurial goals, there's three things underneath that bucket that I want to really focus on. And that's focusing on helping people maximize their equity. The other one is focusing on helping people make a frictionless transaction, or transition more of a transition, not transaction, a frictionless frictionless transition. And you know, I can go deeper into that. And then the other one is focused on helping people build dreams. Now, I'm going to talk about what this means to me. And then Roberts gonna come in and talk about what it means to him or change it up or whatever he wants to do. So the number one thing is that focused on helping people maximize equity. What that means is that in our value driven investor way that Robert and I want to grow our businesses, it's a two pronged approach. It's number one, as a real estate agent, or a real estate brokerage, or a real estate team, right, that helps people transact or transition from one house to the next house, or from an apartment to their first home. And then it's also it's going to be about investing, we have seen that if you are an investor and a real estate agent, and you meld the two together, that is what we can call a Hybrid Hybrid business model, we can call it a hybrid real estate agent, we can call it a hybrid real estate investor. What I really look at it say is it's the value driven investor way. And it's the value driven investor way, because the first and most important thing that Robert and I both agreed to agree on is that you take care of the people like that's just what we do. We're protectors, we're going to always take care of the people, when we're trying to maximize their equity. At the end of the day, I'm trying to come into contact with more people, and try to do give them more opportunities to make that transition in their life. And that transition is into real estate, because that's what Robert and I are both experts at. When I'm focused on building dreams, I'm focused on helping people who want to build something, which is what I do on a infill development perspective, or in a new construction perspective, is that these people, they know that it might not be the cheapest, but they have a dream, and they have something that they're going after. And they they have the means to do it. And that's what they want to do. And honestly, I love that I love that because the people that I get to work with that want to build new construction, or that I'm building stuff for in these infill developments, these people are doing it because they want what they want. And they've earned it and they work their ass off. And this is their trophy. Now they're not stupid about it. They look at it as investments or whatever. But those are my entrepreneurial goals. And now how am I going to go about achieving that? And that's going to be about an integrated, like integrating my business model through EHR. And this is the big thing I wanted to share with you Grando EHR, which is Chris and our building company, ground up development, which is my development company that I own. Chris, my business partner and builder in general contractor owns EHR, they are separate entities and then metropolitan home team, which is the real estate entity, this coming year and 2022. Chris and I have decided that you know what, it really came down to this it came down to I decided I need to I was looking at Bob grant and what he was putting together and I realized that yeah, I can sit and try to create a business model out of three separate entities, but it's It's not efficient. Um, it's easier, I think, but it's not efficient. And so I feel like to really scale something, I'm believing in what Bob grant is doing. And I'm saying, You know what, Chris, I think we got to bring this together. And, and you know what we got to unite, because we have some really awesome pieces to the puzzle. But they're all sitting out there on islands, where Grando what I think you have going on, and it's, it could be harder. And we, I don't know, and I mean, it's not simple, this is not easy. And that's why I haven't done it. But I feel like what you're doing has a huge ability to scale into something, and become a really true strong business model, where what I have is a great money making machine, but it isn't a scalable business model. So those are my entrepreneurial predictions are one of the goals that I'm going after grant, oh, give us your philosophy on those things.

10:59

First of all, it's great that you're working on that, and doing that, because that's exactly the exact issues we're running into we. So we have like other companies, you know, and, and when we finally realized it all just has to fall under this one company, you know, it's just, it just makes a lot of sense. You know, for us, you know, like our big entrepreneurial goals are just to continue down the path that we've already set, you know, our company grand real estate investments, you know, we are big goals are to keep focusing on the brokerage side, keep, keep focusing on the investment side, and, you know, keep fostering and building this great relationship, you know, or this great product that we're doing with our construction side. It's all one business all one brand, we got rid of everything used to be grand Realty, got rid of that finally transitioned, you know, to Grand real estate investments on all of our signage. Now, you know, when you see, you know, one of our homes out there under construction, you'll see purchase by Grand real estate investments. And, and so for us, like, the big thing on the entrepreneurial thing this year, is just getting our branding consistent across the board, and really building out the systems and processes on our construction side. And, you know, yesterday, we had our first meeting with the six people who work with us, you know, full time, and we had that talk about, here's the new line of the standard, here's the standards that we have, because we've never sat down standards, people were just coming to work doing whatever, you know, we had a team, but it just wasn't as refined, like, you know, in real estate operations, you just have a path, right? It's like a home only gets sold one way, you know, it goes through escrow and closes out. But in construction, there's a million different moving parts, and then you got to think about other things like, you know, you can't be intoxicated at work, you know, like, you know, I want you to lock your arm off or something like that. So for us, like, the big thing this year to focus on, is just bringing all of these systems together, and bringing it and continue to bring it all under one umbrella and get rid of everything. And two great things conversations I've had, you know, with other great people or different tradespeople is I've had the conversation with my electrician, say, hey, you know, if I ever have the opportunity someday to be, you know, have you with our company, that'd be awesome. He's like, Yeah, he's like, he said, right away, he's interested now in the conversation, because we pretty much control his weekly schedule in this area. The same thing with the plumber that we work with all the time, I said the same thing to him, I go, Hey, I really like you. Were trying to build a bigger company, you know, I think someday, if we ever have the opportunity to work with you, he said, Hey, you know what he goes, I think that could happen, you know, in the near future. So we just keep putting that out there. And like, if I can, I'll get every single major trade underneath my company. So I can be a force to be reckoned with. That way. I know, I can build anything, right, I can control all of those aspects control the labor costs, profit share with the key players that have to be profit shared with, you know, but that's kind of my big strategy for this year. And what I'm kind of thinking big picture where we might want to go. But it might not happen with those people this year, it might happen the following year, I just it's

13:57

a big goal. It's a big goal. It's a big goal.

14:01

So you know, our big first step is getting to our new building here, we're going to renovate that get there, so we have a bigger house to be able to house out of. And then from there, I think we can just kind of decide how we're going to expand but it comes down to those three components, you know, investing, brokerage, sales and construction, those are the three main hubs of our business. And each one of them truly is a separate business underneath that big business. And we just keep kind of growing that way. So that's, you know, my big entrepreneurial plan.

14:28

And like I said, I you know, that's the beauty of having a community of having, you know, a great network of having you kind of running one model and me running another model. And my model is fantastic when it comes to making money. But when it comes to building a business and a brand, it's shit, because the reason that shit is that for years people are like, well, I don't understand. So are you MHT Ruhr. Are you ground up like What the hell's going on here? Who am I working with? And so the first And I haven't gotten the brand, I have gotten brand recognition, but not like, and that was my whole point to Chris. But not like we could have, like we could own that the our area, and we can continue to expand and own other areas. But if we say divided, like, it's only going to be we're just making we have a cash machine. That's it, we don't have a business and I'm like, I'm ready to build up a real business like, and that and that's the big thing that you brought forth to me was Oh, man. And and the other thing that I have to say, though, grand, I think you have an advantage, because you have it well, it's can be a risk and reward advantage. You have family that is back to you. And that you're you're fighting, you're in the fight with family. That's super powerful. But if it doesn't go right, it's super tragic. So like, it's kind of a risk reward thing, right? Where me I don't have like, No, I do have my wife that's involved in my stuff. But it's very, you know, hands off, like she just runs books and does things like office stuff. She doesn't want anything to do with like, really, really building the business. Yeah, I don't have that. And that's probably been the biggest thing. I think I've talked about this in the podcast, I don't have that trust factor. Now I do with Chris, because we've been doing this for 1012 years. So I kind of told him, I said, Hey, man, I don't want to do this with anybody else. But if you don't want to do it, then I you know, I have to go out there. And that was the scariest part to me, is like, who am I going to trust like, I trust this guy? So, but I finally said, You know what, I couldn't pass it up because I saw what you were doing. And I'm like, You know what, you can't be scared, man, you got to just make the jump. And I think it's the right business model. I think you're on the right path, buddy. And and that's just awesome. So let's, let's work into the residential sales. So cool. That's the big goal. Right? So the entrepreneurial journey is the big goal that both Robert and I are after. But then the next thing, the sub goals to that are the residential sales, the residential investing, and then the commercial investment. So when it comes to this, like part of the big goal, and part of this business model is how do you bring this together, and make it seamless. And that's part of the reason why I'm like, I have to bring this to one brand, it has to be one brand, because like ran real estate investments, people won't get confused, they'll just know that underneath this one brand called Amazon, I can buy anything under the sun, no matter where it's coming from, I just know I can go to Amazon, and it has an answer for me. And no matter if I'm selling a house, or buying a house, or investing in real estate or wanting to wholesale my property or have a problem, I can just go to Grand real estate investments. And you know what I know they're gonna take care of me. And that's so powerful. That is the value of an investor way people. That's what the value of an investor is all about. That's what grant and I have been working towards for years and years and years. And I truly believe and we've said this before, in past podcasts, I believe it's the strongest business model, a real estate agent, or a contractor can have, period, like it is I think so the one of the best business models you can possibly have. So that's what we're focusing on is in residential residential sales. How can I get more homeowners to communicate with me? How can I get more homebuyers to realize that man, you have some really great assets? You're doing some really great projects? Can you do a project for me? And how can I scale that brand to attract more people to us that are wanting to buy yourself? Right? And then when it comes to real residential investing, it's like, how do I grow my portfolio? You know, Greg and I, that's all we've been talking about on this podcast is how can I grow my portfolio? How can I find more infill development projects, more rehab projects, more Airbnb projects, more short term rentals, more whatever it is, when it comes to residential investing? How can I scale that? Well, the best part about that is you can scale them together. Because if you're scaling one brand, you can scale the brand together because a brand can do multiple things. But when you have a jacket business plan, like I have, and you have multiple brands, and people get confused, they don't know who to talk to, or what the hell's going on. And that's where I screwed up. And I think like, that's how you can scale the residential and the residential sales and the residential investing Grando throw your two cents in there.

19:23

Yeah, you know, I my ultimate thing. You know, a couple years ago, I was thinking about dumping the brokerage side, if you remember that, like Yeah, you know, like cut off an income. I was like, you know, you're right. Cutting off an income stream would be ridiculous. And my brother and I went and found an agent to start working that side of business and now she's going to transition to be the principal broker and remove myself from the principal broker position. So we step back one layer further and we build agents underneath her right. But you know, ultimately, I think it comes down to this, like, if somebody knows they can go to you for multiple things, like who in they already know like and trust you, are they going to come to you? And the answer is yes. Like so if people know Eventually, like, you know, maybe in two or three years, all of a sudden I launch, you know, a plumbing division. And then people know when they have some sort of a plumbing issue, all they have to do is call this company. And we're like, yep, put your three or let's get you on the schedule and get out. Got electrical problem, no problem, you need H fac, no problem. Oh, you want to do a home remodel? No problem. You know, right now we're focusing like Amazon back in the day, we're just selling books, right? We're on the investment side of things. We're self funding our investment deals, we're build stability, and we're working on our bare bones processes to refine it, you know, someday we'll touch the outside world again, and say, we will do work for you, you know, on the retail basis, I don't know when it's going to be but it's just kind of like that thought process, you know, like, how many opportunities can you touch the same client. And that's what bothered me about real estate was like, I can touch them once about every seven years, maybe five years, if I'm lucky, you know, though, and I hope that's exactly it. And now it's like, if I could touch them 15 More times inside of that seven years, not just with some cheesy ass newsletter with Mrs. Yeah, values like, hey, like, and that's one of the things we can tell people is like, hey, we can give you a plan for the next three to four years. Or it could be a five year plan or a two year plan to fix your home up. And you can have checklists on there that you can do. And you can just call us back and say, Hey, I'd like to get this done on my house. Now I got some cash saved up, boom. But what does that also do, when somebody goes to sell it down in the end, now we have this perfect product to sell. And so I'm just like, if I can make all that work, it's a huge ask goal. But if I can make all that work, and we can make all that work, we build our own customer base, we don't really have to go market too far out to the retail world. But when we do, we can just bring those people in, and what are they gonna do, they're gonna stay like, I keep going back to Amazon, you know, it's like, I go there. Now I buy everything on it. Because it's easy, you know, it's easy. So it's just like, that concept is really good. And I think like on a local level, so many people try to expand to like other areas, you'll see these real estate teams and construction companies jump to this city, that city, this city, this city, you know, and they try to expand outside the region and have good systems for it when they could have just focus locally and said, How can I build that right here to maximize this area first, and then one day move it to somewhere else? And I want to? So that's kind of percent man.

22:10

I totally agree with you in that. And that's the thing Grando like you and I, when we talk, it's literally like we're reading each other's minds, because we just get like, how do we serve the customer in the best possible way? And then what other outside business models? Can we bring in like Amazon, and their philosophy? And how do we create a platform that grand real estate investments that can then serve the customer in the best possible way, and I think that people get caught up and don't realize, like, that's what it's all about. It's getting harder, and it's differentiation, right. And that's what we're creating is differentiation. But inside differentiation is, is where you scale because now people are like, they're gonna look around and try to find another grand real estate investments. And they're gonna say, There's nobody like you. Exactly. That's exactly the kind of business plan you want to have. And so I don't want to keep this too long. But let's go into Commercial Investments. Now, my theory on investments is it's a little bit of a like, outlier from the overall business model. So like, the entrepreneurial business model, mixed with the residential sales in the residential investing is kind of one great business model, right. But then I'm gonna put on the side this commercial investment thing. And I don't know, I probably driving it this this goal more than Bob, or Robert striving, this goal, because it's something that I've kind of phased into. And it's really about cash flow, it's about actually having a legacy, right. And part of the four quadrants of the value of an investor is legacy, and commercial real estate you cannot have if you're going to be a real estate investor, there's no better legacy you can have as far as asset accumulation than commercial real estate. And number one, why is that part of my goal, because cash flow is part of my goal at the age of 40. When you're in your 40s, like me, I truly believe this is part of my overall encompassing business model. When I was sitting in that desk in my parents, basement broke is a joke, it was like, make cash mirth. But when you hit about 40, you need to focus on cash flow, because then what that means is that when I'm 55, or 60, and I'll still be running labs, and I'll still be going crazy and Grando. And I will still act like we're 18 years old, and our bodies might not like us because of that, but we'll still be doing it. But when we're 65 and we look back and it's like, if we're still doing this, which we will still be doing this podcast together when we're 65 you know what you're gonna see both of us I'm doing a lot more trips and a lot more really personal grille stuff, because money isn't gonna matter at all at that point, because we're going to be set up with cash flow through commercial real estate investing, and all the other things that we're going to be doing. That's why I'm focused on that is one of the major hubs in my goals, and whatever I want in 2020, I want to find an opportunity where I can be a general partner and a commercial investment opportunity. I want to keep building the cash flow because I have been doing a great job on that, from a passive investment perspective, and it's paid amazing dividends within the last three years that I've been focusing on it. It's been fantastic. And then the how is how are you going to do that? How are you doing this? Relationships and opportunities, I am going out and making relationships with as many people as I can that I think are quality people like my good friend, Robert grant, and saying, Hey, man, I got something to bring. Let me bring it and I know you have something to offer. And then it's opportunities. What am I going after? Which when we get into the market section, what are we going after opportunities? What opportunities am I paying attention to? And what opportunities are out there? So grant, oh, give us your two cents on commercial investment as part of your obviously your goals and your business plan? Yeah, it's

25:58

something that we're pushing towards, you know, it's like, we know, it's going to be part of the whole package for us, you know, down the road, we you know, right now we're focused on smaller stuff, like, you know, the first easy commercial buyer own building, right, that's a huge deal for us, our apartment complex, that's a huge deal for us, one of our properties downtown, we're going to get four more units on the back of that, you know, so we're in multifamily, commercial, you know, but the big thing pushed for us is to start adding bigger units for us to diversify, you know, our risk, as well as increase our cash flow. I mean, that's the goal. And the big push for us really, is looking for opportunities out of state, taking our cash that we can generate here, and then making good buys out of state that we can, you know, have good strategic goals there that we can just exactly we said, build a legacy and replace our income over time with, you know, passive income. I mean, that is the our overarching goal. And I want I want to

26:53

keep this short and sweet, but why out of state?

26:57

Well, so a few reasons why out of state, you know, in states fine to for most of our stuff here, we would only buy multifamily to keep in state, but we feel like we can get a better cost per unit out of state and other location. This is residential right now. Commercial, yeah, residential multifamily, like so I mean, four and above really is commercial, you know, so. So apartments, stuff like that the cost per unit a lot less than the cost per unit here, the rents higher here, but I like I like the idea of of lower cost per units, because I feel like it's more affordable for us to get into the game, and still get a very decent return on that. So that that's kind of my big thing. But ultimately, you know, down the road, yes, we want to our overarching goal is to be building, you know, commercial space with residential above it. I mean, that is our big picture thing that I want to be able to accomplish. You know, that's awesome in the next few years. So let's

27:52

so yeah, well, Grant Oh, you always have big goals. That's why I love being around you, man. We put our heads together and it can be dangerous. Yeah. Okay. Build an island. Coast. Hawaii, right.

28:08

We need sand.

28:10

Okay, let's move into the market. So the market, what do we think the market and we're gonna touch on some, you know, big fundamentals. But what do we think the markets gonna offer us in 2022? From an inventory perspective, I really think that there's definitely going to be low supply, and there's definitely going to be high demand, I think it's gonna be a similar market to 2021. I think though, it's gonna be a market that, you know, if you're in the game of real estate, especially if you're in the residential game of real estate, I think the the markets going to be what it was back in 18, and 19, and what you expected in 18, and 19. And what does that mean, that means to me that in February of 2022, all sudden, you're gonna just start seeing the gates open up. And I think you're going to start seeing more multiple offers. And you're going to start hearing more news and media about oh, my gosh, there's not enough supply. Oh, my gosh, look at all this demand. And I think it's going to be back to where it was in 2021. Spring market coming into the summer. And it's going to be repeat, wash, rinse, and repeat granite. What do you think on inventory?

29:12

Yeah, I'm with you on that. I mean, I was just looking the other day inventories for this whole last year has been under a month basically, in our in our market. And it I mean, when you're going into this, you know, November, December, with that low of inventory, you're not coming out with any higher, you know, because people aren't listing their homes as much during the cold months. And so it's just gonna exactly repeat last year. I mean, and you know, there's always that looming, what if financial thing like are we at the peak of a stock market? Are we the are the is the China bond issue going to affect the real estate in the United States, you know, the default that they got going there? There's always those things but you know, I don't think it'll be a real estate that if something does happen, it will be real estate that caused it. But I think that we're going to continue just to have another crazy year appreciation is going to be high again and people Again, we're gonna be like homes are unaffordable, but they're still gonna keep buying them. You know, this just right and crazy, you

30:06

know, let's, let's put this out there. Grant, are you gonna still buy residential real estate properties as investments and rehab them and sell them and or keep them and rent them?

30:17

Yep, I'm gonna try to do 25 Next year versus this 15 that we're closing down on this year.

30:22

Yeah. And it's so funny because I hear people say, Oh, don't buy don't buy, don't buy oh my gosh, Robert Kiyosaki on his podcast. Oh my god, you're an idiot. If you flip You're so dumb, like, you gotta be the stupidest person ever. Well, Robert, you know what unfortunate thing is, you don't know what the hell you're doing. So like, if you know what you're doing? Yeah, I'm actually not an idiot. And I can show you for 17 years, I haven't been an idiot. So you know what, maybe you need to figure it out. And maybe then you can make a judgement because he doesn't even know how to do rehabs. Right? So the only thing that he thinks you should do is buy cash flow properties. Now he's not wrong. But it's all perspective. So I totally agree with you. I'm gonna be buying all next year. It's just you got to buy the right deals at the right price. It's all about what you buy that and what you sell it out. And you have to do your research and not buy something and overpay. Like if you overpay, you're an idiot, then you already you don't just have to make money.

31:13

Yeah, it's rare that we find a house in MLS that we can go and like, buy and be like, Oh, we got ourselves a good deal. Now we're gonna go and turn this and flip it. And that's what a lot of flippers and people do out there. It's like all of our deals come from off markets, like like, I always say, it's like going through a coal field looking for a diamond. If you're not willing to go through a coal field to try to find a diamond, you're probably not going to beat me in the real estate investment game, and especially my brother who's out there every day.

31:37

Exactly. Alright, let's go to interest rates, interest rates. Um, you know what my prediction is? Interest rates are going to be under 4%. All year. They just bumped up, they bumped up here, I think it was last month to just above three. And now I just checked him. Now they're below three, like, what? How are they going up and down? What's even happening? At the end of the day? I can I can tell you what's happening is there's too much debt out there. And if that rate goes too high, you the United States of America will have a hard time paying their debt. So what are the odds of that rate going up to a point where the United States of America will not be able to hold up to their debt obligations? to none? So I think that you're looking at a 4% rate, or lower for all of 2022. What

32:22

do you think? I know? Yeah, I'm with you on that. It's they can't climb it up too fast and stall at the economy. No, no presidency wants to stall out in the economy and be the person that is holding that bag. So I think it'll it'll stay low, you know, throughout this whole year. I mean, if the talk about tapering is there, you know, they want to taper and stuff like that, which I think effectively could drive up race. But I just don't think I think you're right, like it can't go up that high. Because it they can't kill things off. And they are just default on their own. They put themselves in a bad spot.

32:55

Yeah, exactly. Um, construction costs. And Labor's I think that construction cost and labor will continue to increase, because the demand and the supply chain will not get much better. I mean, at the end of the day, there's going to be a ton of demand because of the inventory shortage on building stuff. New construction, primarily, obviously, residential. And that's just going to drive labor prices, no matter what plus, the other thing that's gonna drive labor prices is when people when kids graduate high school or kids graduate college, the first thing they think about, oh, I want to be electrician. Oh, I want to be a plumber. Oh, I want to be a carpenter. Oh, I want to be a framer. Oh, I want to rough houses. I want to install Windows. No, no, they do not think that not one kid is gonna say that. That's what they dream to be. What's gonna happen is these kids aren't stupid. At some point. There's the kids out there like my cousin, who's like, you know what, I don't want to sit behind a computer. I don't want to be stuck in a house. I want to do something with my hands. I love using my hands. You know what, I think I'm gonna be electrician and he became electrician. And he is making bank bank. And I think that kids like 28 years old, and he's making more money than a lot of his friends. And he's like, there's nothing wrong with being electrician.

34:13

Trades, dude, trades are definitely not going away with building construction. And with everything that you know, the way that America is growing, it's just going to keep growing and we're going to be more of a demand and sad thing in schools is they don't push trades, you know, as well as they should at least in our area. They don't but no, no, I agree. I'm with you, man. Like supply chain is just going to be rough over this whole next year. I think they said I'll probably be another year you know, or a little bit over that before things start to kind of level out with that. I was just not like a few weeks ago, I saw there was like some 60 shipping freighters off the coast of California just sitting out there for weeks in the ocean trying to come ashore but they can't, you know, in our local area like an Oregon. We've got a little town called Coos Bay. They're trying to build a shipping port down there so they can bring ships in because they're like man if this is going to be an issue in there He's going to be this much come to the West Coast, why don't we build our own, you know, supply place that's going to take years to get done, you know. So it's, it's one of those things that like until more places have access, you know, for people for boats to land, you know, it's just going to continue to be an issue,

35:15

you feel like this supply chain is starting to get a little fishy and almost feels artificially manipulated as if they know that, oh, if we keep the supply down, we can keep driving price, let's just come up with a bottleneck. And you know what, this is going to be great for us as the manufacturers, or whatever it is. I mean, I feel like there's something that's a little fishy here, because, yeah, the supply chain was a well oiled machine. And now you're telling me like boats are stuck out, and like, they can't bring the boats in and they can't, the docks, or this or that, or whatever excuse they're coming up. Like those bullets were coming in on a regular click, and they were pulling that stuff off those boats and getting it out. Like it was nobody's business. But now all sudden, they forgot how to do it.

36:02

Yeah, it is weird. So they'll claim a worker shortage next after that. So when you when you ask that question, how did you get on before now they say, We don't have enough workers now. It's like, you didn't lay off? Every I mean, that was an essential job, you know, so it's like, and then they're like, well, we can't find people to work, you know, you can't find people to be paid $100,000 to be a dock worker, like, especially in California, like, there's probably a lot of people that want to be dock workers for $100,000. So I questioned that, too. You know, like, it's very interesting to me. And to me, I always think with any of these things, you know, in a capitalist society, there's always opportunistic, squeezes, right. Like if you see an opportunity, and these people aren't dumb, you know, they, they're amazing at what they do, and getting things from point A to point B and, and products and everything else like that. They see the opportunity where they can essentially double their product price, and still same, sell the same amount.

36:54

Like and they have a hell of a good excuse.

36:57

Yeah, I'm with you on that. I questioned that to myself, and I kind of I, I wonder, you know, I think yeah, I think the lumber, I think the lumber was a total squeeze on the market to for profit for the greedy. I mean, I totally think that so

37:10

100% agree. And okay, so let's walk into deals here. So deals deals is the next big thing that we focus on commercial opportunities. I really think if you are looking into commercial real estate, there's so many different avenues. So you know, you're gonna have to take this for a grain of salt, I'm probably just commenting on the things that I'm focusing on. I'm not really trying to say I did a whole bunch of research and, you know, you should I should be your Oracle, and this is what you should do. No, this is basically, you know, Tim Murphy has been doing his homework. This is what Tim Murphy thinks, when it comes to commercial opportunities, I really, truly believe that. If you think office is dead, then you're missing out. Like I think if you can find a way to be that creative investor, like Grando, and iron residential, and you can find a way to take an office building that struggling and repurpose that office building, because what's gonna happen is you're gonna buy that office building for 10 cents, 15 cents, 20 cents on the dollar. And then all sudden, if you're the genius that can figure out a way to fill that office building and maximize its cash flow. I mean, you're talking millions and millions of dollars that can be made. But how many people are gonna want to put forth that effort because most investors, most people out there, they don't want to try to figure out something that complicated. But if you are willing to figure it out, I promise you, you will make bank number two is retail. Everybody thinks retail is dying. I have a very good, very smart, very sophisticated buddy. That's in retail. He is a part of a company that has 1.8 million square feet of retail, I invest with him. He I said, How's retail doing? He said, everybody said retail is gonna die. He goes, retail is not dead. I promise you. It's doing just fine. Now, are we having to transition on how what retail wasn't? What retail will be? Hell? Yeah, we got to figure that out. And so I think retail, I think investors are trying to stay away from it. And that's they're really sophisticated. But I think there's opportunity especially in the smaller stuff that the big guys don't want to touch because it's too small. So now the commercial no brainer to me, which is like oh, well, you know, like, what's just the, the no brainer thing that you can invest your money when it comes to commercial is multifamily and industrial. But here's the kicker, you better be like Grando and I that are finding off market deals that are so connected that people call you and are like I'm calling you first before I even touched the market. Here's a deal. Here's an opportunity. And nobody knows about these deals. Like nobody knows about the deals that Grandpa and I do in our markets because we're that connected and they're and we're putting in that much work to find them. If you can find someone like that in multifamily and industrial then you know what, you put your money with those guys, because that is a no brainer. Those markets are going to continue to go up and you are going to make cash and fortunately, that's when I talk about opportunities when I talk about relationships. Fortunately in the multifamily space, I have found someone like that and I am thankful for that. And I love those guys. And and they're just pounding the pavement finding deals that nobody else is gonna find. And same thing on the retail side. So if you can find those deals in commercial, those no brainer deals, or find people that are working those deals, then you know what invest in them? Because in the long run, those things are cash cows. Greg, what are your thoughts on commercial opportunity?

40:21

It's, you hit it right on? I mean, it's kind of funny how spot on you're at that with my thinking? Yeah, you know, I actually was thinking, you know, residential is flooded, you know, and we're working hard to find deals, we're still doing great. But commercial, especially in the retail space, everybody's like running from it. And I was like, Man, when everybody's leaving, that's, that's the play. Right? So I actually wrote down when we're going through there, I wrote commercial as the opportunity. That's where I actually think the opportunities lie. And I think it's going to require work and a lot of growth on my part, you know, just to kind of figure it out. But, you know, I was thinking more like on the terms of just like you said, which is crazy, smaller spaces, that ones that the big guys are not even looking at, you know, like my office, for example, that we're buying, it's only at 1800 square feet, it's a perfect one that we're going to go in and outfit it with office spaces, you know, do all that. But eventually, one day, maybe we'll move to another space, and then we'll just, you know, rent it out as an office space. But it's an asset, you know, that we can do that with and kind of have it. But I was thinking like, the interesting thing that I saw recently, and like, when we're in Austin, Texas is, you know, like, clothing brand stores that don't really touch there on the internet. They don't really touch the ground very often. But I've started to see some of those brands like Amazon, where they have little store pop up things and stuff like that, like one of them was like bonobos, like when I was in Austin, there's a bonobos store just a really small one, this and that. Lululemon is another great example of that they have little smaller stores everywhere. And I think that like the micro spaces, you know, and I would call them micro because I didn't really know so much about commercial like, you know, like a, you know, like an Emporium or something like, that's really huge. Like 10

41:52

Micro in the retail world is about 5000 square feet like a subway. So yeah, yeah, yeah, exactly. So stuff like that. I

41:57

think the smaller spaces, as well as flexible office spaces, I think are really, really smart moves. Because a lot of people might be a little concerned, but they want an office to meet people do that. So kind of that that whole kind of we work situation, I think it's probably a really smart on a smaller level, not across a level. So

42:14

let's move into residential opportunities. Like when it comes to residential opportunities, it's pretty much focused on what I've been focusing on. I think Randy's gonna agree with that. But new development, I've been really thinking about new development. And if you're gonna go into new development, and this is what I'm telling myself, Murph, you're gonna go into new development, you better make sure that the trend is strong, that supply truly is constrained because it could take you know, and when I think new development for myself is something like 20 Lots, like, I want to find a piece of land and crack open 20 Lots, nothing more than that, because it's too risky, unless I brought in somebody that's way more sophisticated from the development perspective than me. But I do think, because of the supply constraints, because of the the supply chain being so slow, I just don't see how we're going to be able to absorb all of the demand. So I think that Nuke, new development is definitely a play out there. But it's obviously for a very sophisticated developer or investor, distressed properties. You know what, when, when people like Robert Kiyosaki say, Oh, you're stupid, it's top of the market, don't buy a house, or buy, don't flip houses. He doesn't understand like how to find distressed assets. If you find distressed assets and you buy at a discount, then you it doesn't matter if the market goes down and you buy it at a big enough discount, the market isn't gonna go to zero. I promise you that. Yeah, it didn't go to zero in 2008. And so you got to buy distressed assets, you got to buy them at the right price. I'm always gonna be looking for distressed actually drafted distressed assets. The next one is luxury. Okay, I work in the luxury world. And I promise you this guy's so luxury world, these people are not worrying about money, okay? They are like, especially if they're in the Baby, Baby Boomer generation, which is some of the people that I'm working with more regularly right now is that they're transitioning, they've worked their ass off, they've been super successful, they have a plan, and they want to live their life in a certain way. And that's what I'm providing to them as a certain way of living. These I couple bills coming up that I'm really excited about. And it's great the conversations we have because in the luxury space, they're not they don't worry about the market. They don't worry about the market crashing. They don't they're set up and they worry about like I want to enjoy the rest of my life because I worried all the way up to this point. I'm gonna be fine. Now let's, let's enjoy it. Luxury. If you can find your way into luxury, I promise you it's a different world people think differently. And then the next one is I think short term rentals. Grando I can definitely attest to this to Grando and this is again, the value of this community, the value of the people that you surround yourself with short term rentals is nothing that's really been on my radar. But more and more that I hear Robert talk about short term rentals and his philosophy on short term rentals, and why he's doing short term rentals. And then I think about, okay, like the barrier of entry for younger newer investors. Because really, here's my thoughts. How do you make a $400,000 residential property really cashflow? If you only put 20% down, it's really going to be hard, if not impossible, unless you create some type of short term rental philosophy, where you can jack up the amount of cash you can bring in on that asset. That's pretty damn expensive. So short term rentals is why that's why I'm thinking about short term rentals because I can find deals, I can find deals at a discount. But still, it's sometimes hard to find a way to make those cash flow as a long term rental, your traditional rental property, but as a short term rental. Wow, that could be possible.

46:03

Yeah, for sure, man. Yeah, I had that on the top of my list, short term rentals. I think that's I mean, that's obviously something I'm pushing hard into this year, my brother and I are pushing hard into that and trying to figure out more plays in that. And that's that it's allowing us to make those buys and keep properties and keep assets in our city that we probably would have just sold. And we would have just moved to another market where we could, you know, guess you know, lower passivate or you know, lower cash flow, but more stability from that not such a big purchase price on them. But you know, the one thing I know that you you didn't touch on, but you already do it is infill this area here in my area, infill is going to be the name of the game probably for the next 10 years, they just removed the single family zoning from all the residential lots, it's no longer called like, you know, not allowed to call it single family and make it just a single family house now. And they're not quite sure what that looks like. But your you know, what you can fit on the property should be able to fit on the property, right. So if you could fit three units on the property, then boom, you should be able to have three, that

47:05

same thing in Minneapolis, they have that word, you can put three units on any piece of residential property, but then it's like, this is their philosophy, but they don't know how they're going to execute it. So it's gonna be about like deciphering over the next 10 years. Well, what exactly do they mean, and they're gonna make those decisions by ESU? Go to permit? Yeah, we'll let you do it. And that that sets the precedent.

47:27

Yeah, interesting. Yeah, that'll be it'll be an interesting playground for us with that, because the state of Oregon was the one that just removed that by legislative authority. And then they removed they also put in effect that's right before that, that every property can have a single family. In adu. So I think infill is going to be really the name of the game, because we actually don't have a lot of development that goes on there's, we are so far behind and land development, which is another huge opportunity if you can find it. And if you can, just like you said, if you've got the skill and be able to knock it out, me, I would probably never be the 100 200 lot person. But you know, the five to 20, for sure, I could see myself doing a lot of stuff if we found the right piece of property, and we could get that, you know, put into the city the right way and then build out all those houses. That is definitely an opportunity area that we were looking at. And, you know, things that we'd like to do when we did find some land south of us that we could potentially do that. But the the owners just a little bit too crazy on our price right now. But I really truly think like infill for us is the name of the game in our in our location. So that's going to be the big push. And when I mean infill, you know, it might not be necessarily knocking down that whole house up front, it might be just adding a house to the back of the property where you can now add a house to the back of the property, you know, and be you right? Yeah, well, actually, I mean, I think the ad use will be a thing of the past with the with the single family zoning coming away, because if it can have a house, why wouldn't you build 1000 square feet, I don't think they can limit it now. And come this July. So yeah, it could be an adu. If that's what you want to do, it could just be another structure, you know, or you could knock the whole thing down and do a new highest and best use for it, you know, so I think that's there's huge opportunity, which it gets me excited, because, you know, like, currently, you know, if I have to pay three to $400,000 for knock down house, it makes it pretty tight. You know, I got to make sure I'm getting you know, building an eight or $900,000 home, which makes it really tight. But if you can get a second unit and you build a cluster of homes in there or something I think that could be that could be the multiplier that'll kick people into buying those homes to do that.

49:27

Grandal you know what, let's leave it at that. Because I think that what you just talked about is your philosophy on infill in your market will be a great topic to come back to when we do their annual review in 2022 and say, hey Grando What are your thoughts on that now after had a whole year to kind of think through it and obviously, you know, get go into the meat grinder and see if you can actually figure it out. But that's what this is all about. That's what this podcast episode is all about is that you know what we're kind of putting our neck out out on the line. We're sharing our business models, we're sharing our philosophies. So you guys can really get a better understanding of Robert and myself, and what we're trying to do and what we are doing. But we're also making some assumptions. We're also putting some guesses out there, because we want you guys to see that when we come back next year, you know what, we're gonna get some right. And we're gonna get some wrong. But at the end of the day, we're always trying to grow, and we're always trying to move forward. And that's all you can ask of yourself as an entrepreneur, and as a value to an investor. So again, you know what, thank you, everyone. We're coming towards the end of the year, and we got some cool Podcast coming up. I'm excited to share with you guys. But hopefully, you're out there, you're designing your life, and you are planning your next 2022. You year. And you are planning your next 2022 year, Grant. Oh, do you have anything to say before we sign off?

50:47

Yeah, you know, I think that probably going back to the beginning, you know, thinking the one thing you know, I made a note, you know, that I've always told myself little rocks support a foundation, you know, and so it's all those little tiny rocks underneath the foundation that cause it to support and there's millions of them. And that's how you have to think about your business, your life and everything is compiling all those rocks, compacting it down, so you have a good solid foundation, you know, underneath the foundation that you're building. So

51:11

again, that's an awesome visual because I think of those little rocks is as the right people. And if you find the right people, which are those little rocks, man, anything's possible, bro.

51:23

It's amazing. For sure. Cool.