What’s up folks? Now on today’s video podcast, wherever you’re watching this a little bit of a confession. So I guess the story starts off, was talking to one of my buddies and we’re talking about another guy who, we always talk about some of the people that are the next level above us that kind of keep things in perspective and learn what the strategies and the path to follow.
As we’re all on this, road of, leading a private equity front and bringing passive investors along with us like you guys, and. , the story that came up was like, this guy that we’re talking about who was high up there and they just wholesale it commercial property for a $3 million profit and there was no feeling there. When, no feeling there, the guy didn’t really care and he made that confession to my buddy. And we both joked and laughed man, that’s a lot of money, right? To just just show up here in your bank account. And number one, how cool it would be to be there and how messed up it is. But then really started to think to myself and this is what I’m talking about now, which is, at some point, we’re not so far off from that maybe I shouldn’t be putting out this on the internet or out there in the world.
The other day I was investing and the deal cashed out and I got a couple hundred thousand dollars just dropped into my account and I’m like where did this come from? I knew I’m not super oblivious, but it’s hard when you have 80 to a hundred, K one s and different things I’m in and I’m I can remember not too long ago when.
Getting, $20,000, $15,000 from that one deal. I did, meant a lot. And it was, we would celebrate and, it was a big thing. I would actually. Just you’re taking a vacation, you anticipate the buildup prior to that and it’s and then you see it drop in your account.
In this case, I don’t even remember the damn thing was coming and I just came and went and I actually forgot about until, again, me and my buddy were talking about the story and I started to self reflect And I can even think a little bit before that, right? I think a lot of investors, are in these shoes right now where you’re going to your work every day.
And I’m wearing like my, my prisoner wine shirt, , outta respect, because I was there one time too, right? I would save my money and, every month they would go up maybe a few thousand, $5,000 a month, and at the end of the year, I would have enough money for, I, when I first started a turnkey rental, which I don’t know why any credit investor would own those things.
That’s eventually was became, $50,000 minimum to go into a deal and then eventually, was the seed money as earnest money into my larger commercial assets as a general partner. Like that money would build up slowly over time. And this is why today I, I don’t.
Feel that taking lightly, taking money from investors. Cuz I know 50, a hundred thousand dollars for most people, even for a lot of our accredit investors, that’s the lifeblood of one year. That’s the heart, sweat, and tear of 360 something days out of the year where you’re saving money and yeah, you’re buying things here, there creating experiences, but You know that, that money that kind of builds up and, within our family office group, I can reflect having these discussions where, now we’re writing these checks of a hundred, 150,000 into this deal. That deal, it, it seems a little bit like monopoly play money a little bit. And we always talk about how is it.
We knew the value of the dollar, but it’s hard for the kids to pick up on the real value of it. But, I guess that’s another topic to be discussed in the future. But I guess what I’m saying is money when you start to extend on that hockey stick, you start to become really desensitized to it.
And, it makes me a little sad in a bit like, the happiest times for me was when, that deal panned out and we, I got this big lump sum of money and I would, open up a hundred dollars bottle of wine. Maybe today I’ve got a couple of $250 bottles of wine. Like I got the Caymus special re reserve and I’ve got.
Stag sleep Cast 23, which I haven’t drunken those yet. I don’t think I’ve drank more than $300 bottle of wine yet. I have ’em, but at this point, when a deal goes full cycle, that’s what, I just do a hundred dollars bottle. You, it’s my limit. But like I can see I guess wine is a great example of something that.
It builds and builds something that yeah, you pay for value, but at some point you have that diminishing returns concept coming up and it keeps going and going and it is just from a dollar’s perspective, the price of these extravagant things or lifestyle, it keeps going up and up and maybe that’s a great way to run a business of high net worth people buying these high end things.
But like from the user’s perspective, like I don’t get that, like that jolt. I don’t get. Excitement. The buildup, like I said, with this money dropping in my account haphazardly of course I’m gonna take that money and go put it into my infinite banking, and which you’ll see later on this year, our credit investor banking a little bit different.
Life insured mechanism for cash reserves for myself to, backstop the opportunities that I am going through and dealing with these days. The takeaway. Take your money and hide it from yourself so you don’t spend the damn thing. Because even myself, like a person who has good money, values and systems, I gotta hide it from myself too, no different than anybody else or somebody in the beginning levels of personal finance.
That’s another segue there, but I think it’s the point that I’m trying to make here you’re building up this money and the zeros just keep adding and adding. So I totally understood when, in the story where this guy makes this huge windfall and he doesn’t feel it, and how a sad thing it is, and I don’t have an answer yet.
I just wanted to share this kind of predicament or. Speaking first world problem, of course, but this is, I think where the solution is in the future is, finding things that you know, bring you joy. The smaller things that may or may not cost money. . I think you guys maybe get the gist of what I’m talking about, or, appreciate the small things, appreciate the small wins that are on the way, or at least enjoy this journey despite how many zeros or lack of zeros you have, whether it’s your first deal or I think what I’m speaking to are the people who are in multiple deals, and you’re on the rails in terms of this quicker path to financial freedom.
Better deals in alternative assets that don’t go up and down in the economy. The tax benefits, the infinite banking, when you come, all these three strategies together, you’re on this rail, this railroad that tracks that gets you a lot faster. And at that point I tell a lot of people just relax and enjoy the ride.
You’re on cruise control. You’re on the moving escalator. Yeah, you can go a little bit faster, you’re gonna get there in heck, a lot of less time than you. So otherwise, would you previously thought or much more exceeded your expectations?
There was a comment that kind of, this all came about this morning to me and I wanted to just capture this for you guys. Comment came through on investors said pretty high net worth investor said that you. . People think that when you become wealthy, all your problems just go away.
And I do think that’s true in, as we reflect on what I’ve this kind of what transpired, however, let me look at my response here. Yeah. As p Diddy, puff Daddy, however you call it, mace, Harlem World said More money, more problems. Yes. Different problems. And I guess what I’m talking about essentially here is
desensitization, I dunno if I’m saying that word right, but of desensitization of wins and celebrations along with the way, and if that’s the kind of their point system in life, then what a sad thing that Azure net worth grows that you don’t. The jolt or the joy from these types of events along the timeline.
However, if you are still trying to get on this moving escalator, don’t just think more money, more problems as a poo thing. You guys gotta get more money because one thing I know is. Creates more opportunities and allows you to have the freedom again bold, that word freedom to do what you want, with whom you want, et cetera, et cetera.
And ultimately to free you up to maybe you’re doing this, gonna just do the same damn thing you’re doing now, whether it’s playing doctor or maybe as an engineer in a great part of a team, working for great people, doing some cool stuff that allows you to. without having to worry of, being fired or, having to just go somewhere else and take a cut and pay.
Do it not for the money. . And it also buys not $20 crappy wine. And oh, by the way, we are unrolling out the the new private label. So for those you guys who refer friends and family, that’s gonna be a little perk of that it’s actually like a hundred, $140 bottle that we have for those folks.
So it’s not just a piece of garbage wine. I wouldn’t put that out there and put, wouldn’t put the simple passive cash flow name on it, and it’s gonna be branded under the off market.
We’re talking about more money, more problems still buys you freedom, better options to do what you want, with whom you want, et cetera, et cetera. I think that, something I said before is, money isn’t everything.
but it sure makes a life a lot easier, in certain respect. But there is definitely a diminishing return side, and I definitely see that. There’s articles written about the $75,000 a year rule. Who knows what that is? With inflation, it’s probably like $120,000 right now, but, What I see it as more like I see most of the investors out there, it’s like somewhere around 20 to $40,000 of passive income every month is enough.
Which is why I always say if you backwards engineer it, At that point, four to 5 million net worth is that sweet spot number, which we try and guide, get, guide you guys towards. And if you guys need, have any help with that, that’s what our inner circle community, the fum is all about There.
But anyway, that’s the confession today. Now I might get some hate mail here. If you have any strong opinions on this drop us an email or put a comment into the YouTube channel box. I’ll try to answer it. And if you don’t and you think I’m an a-hole and you know this pompous person with W first world problems, then that’s fine too, but I guess the reason why I wanted to bring this up is, like I help a lot of people who where was I was, buying rental properties, getting, your non-accredited investor status, getting to accredited investor status, and of course our big wheelhouse is get, moving you past that.
and, for the people who are still in the trenches, cuz they still talk to some of you guys from time to time, you guys do join the club. We can’t really work with you. I share like the remote rental e-course and resources that I would do at the time and a lot of this is just.
Staying the course and living time. This is not an altcoin kind of thing. This is not like investing in Tesla that goes up and down. And man, what a life to live if you’re doing that, I think there’s more important things to be stressing about over that ticker or playing the Osage, sticking your head in the ground with that.
But that’s another video of course. Like that. What I see from people, they, a lot of you guys out there, you guys are good, hardworking folks out there and you’re on this path. And especially when you implement all these strategies is like, what I see is relax, chill out.
And I get it where the stress comes from. Until you’re there, you’re still running. and it’s totally a admirable, makes total sense, right? Don’t let the turtle behind you catch up to you the, with the turtles and the hair analogy. But if you’re going to, if they’re not racing the turtle, and it’s just a race with yourself and you’re going to get there and be the winner and beat your alternative self.
Who is investing in stocks, bonds, mutual funds, random cryptos that pop up here or. . And you’re gonna get there in a third of the time, then enjoy the things that are happening today. Maybe you have younger kids. I try to be more and more present. I catch myself too, right? Like I, I’m always working and stuff like that.
But, those are, I think those are the things that, the things that really bring you joy where the, the big windfalls. Yeah. We’ll celebrate it. But I’m telling you, you’ll get desensitized to that and you’re just gonna write another check to invest more and it’s just gonna keep going.
That if you take my experience it’s just a kind of a game of diminishing returns. And there’s something else. I haven’t really figured it out yet. I have a feeling what it is. , there, there has to be something out there that kind of just brings you joy and that you are finally allowed to really focus on.
And I think this is where, you have like monks and like people who are very low net worth that are very happy they figured it out. But again, there has to be a nice little sweet spot in here, right? You can be a millionaire and be very conscious and appreciative of the small things. , but having your net worth keep growing.
And I think that’s the why, the reason you guys listen to this channel and at least that’s my goal and that’s what I’m trying to help you guys. Not only grow your financial wellbeing, but also the other softer side of this is, it’s taking more of a holistic approach. But anyway, if you guys like this type of, UY selfie stuff or you have any other comments, let us. And we will see you guys on the next video.
What’s up folks. We’re gonna be talking to my friend, Allison who runs a business that helps folks like yourself, trying to find care options for our elderly parents. It’s gonna offer some other options. I didn’t know that was available. Other than sticking your parents in the care home that costs a fortune.
This allows them to age in place, which I think a lot of folks do like because they like their home. And I think it sounds like a great option, at least for myself. Now, if you guys are new to our group please sign up at simple passive, casual flow.com/club.
You get access to a lot of free e-courses, including the infinite banking, eCourse, and a lot of other syndication LP material that will help you in your investment journey.
Now, just a little bit of an update, I’m sure you guys are all aware that the interest rates are going up. We’ve tapered off our acquisitions being a little bit more picky and choosy as of the last couple of quarters. I’m starting to see a lot of the bridge financing, the smaller banks restrict a lot of their lending and this is, Prior to that.
A lot of the big Fannie Mae Freddie Mac lenders started to do the same. So the trend is, bank financing or what we call the capital markets is constricting, which is making it harder for a lot of commercial operators to make these deals work artificially put the price down.
And we could probably say that there’s a little bit of price discovery. Happening at the moment. Good news. Rent’s still going up. It’s a good time to be buying real estate, especially if you’re looking to get money from other asset classes like your stock market or your debt equity in your house into stuff that works and makes sense.
And it’s backed by real estate. And this is why we started the pre-equity plus fund. If you guys want more information about that, you. Join our investor club at simple passive cash flow.com/club. It really allows means to hedge the economy and get more on the debt side as opposed to the equity side.
Equity is great for realizing higher returns, but debt is a little bit more of a defensive strategy, which we’re getting more attuned to. And we’re seeing it as a bigger opportunity for us. Especially as, like I said, the capital markets freezes up and people are really looking for that.
First person on the capital stack, which we can hopefully provide for people or ourselves in the future. So again check out that opportunity. We’ve got that first deal in Manhattan, right across that hard rock hotel in Times square. You guys can jump on board that and own a piece of history with us. Go to simple passive cash flow.com/club. Join us there. I wanna get to know you guys, just hop on the phone for an intro call and enjoy the show.
All right. Hey folks lane here with my good friend, Alison Lee, we are in an entrepreneur group together and we’ve gotten to know each other pretty well. So as you listen to podcasts and people normally say my friend dot, that’s just codename for, I just met the person a little while ago, but here I’ve known Allison for probably over a year now.
And. We know each other pretty well, and she just happens to own a bright star care franchise. So I tricked her into jumping on the call today and giving us the insider’s perspective on what are you gonna do with your elderly parents? Because all you guys out there are the ones who are good with your money.
It’s not your other brothers and sisters who are trying to keep up, but it’s ultimately gonna fall on your hands and what the heck is gonna happen with mom and dad. But yeah. Welcome Allison. Thank you so much for having Elaine. Yeah Allison works out of Honolulu, Hawaii, and she caters towards folks on the island of wahoo for the most part.
Correct for now? Yes. We’re hoping to expand to new islands. Maybe just give us a little idea, just some context of what you guys do for folks. And then we’ll, we’ve got like a list of questions that most of you guys will probably think of out there, as you’re trying to plan the end of care options for your parents.
But yeah. Why don’t you give an insight? What the heck is a Bright Star Care Okay. So like you said, we’re part of a national franchise, but each franchise actually has the flexibility to focus on a variety of areas. So some locations are more into staffing. Others do a lot of skilled nursing.
We happen to do a lot of private duty home care and skilled nursing, which basically means it’s out of pocket care. So it’s not covered by Medicare or Medicaid. It’s private pay or long term care will cover it. That’s the majority of what we do. So what we offer is a full spectrum from just companion level care.
Which is like, Hey, keep mom company, make sure she turns off the stove, that kind of thing. To hands on, help my mom take a bath, get ready in the morning, help make sure she eats, make sure she takes her meds, that kind of thing. And then all the way to we each we do have some skilled nursing care.
So we do a lot of wound care and things like that. And this is the problem for somebody like us, trying to figure out what our parents are gonna do. Like they may be okay now, but that’s the big unknown is like, how are they gonna be in five years, 10 years, 20 years? That’s what makes planning so hard for our parents. And then of course, even for ourselves, I think then the more I’ve done this business, the more I’m aware of okay, we really have to make a plan for this.
Maybe outline the traditional options for folks. My understanding is it’s, you’ve got the care home and maybe there’s a couple different levels and in-home care, but what maybe like the array of options. So I think depending on socioeconomics, there’s a vast array, but I think for your audience it’s probably gonna be more on the higher end. And so there’s where it’s not, you’re not depending on Medicaid coverage, that sort of thing. Although there are those options and some people.
Do financial strategies so that they qualify for that as well. But mostly the people that we are dealing with they’re looking at either aging in place at home or going to an independent living facility which really is more of a senior community lifestyle thing where they’re still quite independent.
Other people are more against it, they need a little more care. So they’ll go to an assisted living facility. And then there are what they call CRCs which is a continuing care retirement community. And that is where you have the whole spectrum. Again, you go from independent to assisted to skilled nursing.
Those are options. And like you said, there are care homes and other things like that. And then what we do of course is the age in place. So you really have a caregiver in the home. Some people do it with their own family members or friends or volunteers from churches or other people will, take the risk and do a private caregiver that they pay out of pocket.
Before we go into that agent place option, I think most people, myself included, thought like the major option was you go into a facility, you pay an arm and a leg. You, if your net worth is one to $2 million, you have to do a reverse mortgage to get in.
And you hopefully they give you a bottle of loop for how much, if you pay for that place and you, hopefully you maybe get a portion of that back . But if not, That’s what it is, right? Like it’s a big financial transaction. Yeah, so I think like the ones that you’re probably talking about are like here in Hawaii, we have Kaha Newi, which is considered the premier high end place.
An Arcadia. I know your listeners are from all over. So those probably won’t resonate, but yeah. Or like a Plaza is a national chain too. But that’s a little bit more mid tier, I think. So it’s, so the Plaza is assisted living, so you I think and independent. Yeah, so it’s more mid-tier and I don’t believe they have skilled nursing.
So if your needs were to exceed personal care, it would essentially kick you out. You’d have to find you’d have to go somewhere else. Whereas the CCC seeds, you can stay in place there. That’s the selling point, right? You have to, you’ve bought in, you’ve paid an arm and a leg, maybe two legs and you’re in there and now you don’t, it’s a set it and forget it in, in your mind and in theirs, yeah. Yeah. And here, there tends for the very good ones, like Kaha Newey that I mentioned, there’s a three year wait list. So who knows if you even ever get to that point? It’s our it’s like investment deals. No, you can’t get in, or like a really good club dance club I’m talking about, right?
Yeah. Make you want it more yeah. And pay more, yeah. As a. Good shopper. And I think a lot of our good consumers out there, we don’t like that. And we inherently makes the hair in the back of our neck stick up but then when you and I were talking, I was like, what did, tell me more about this agent place?
Because personally, what I’ve seen out of my family is, like the, usually the guys live a really long time and they’re usually pretty grumpy and they don’t wanna go interact with people. They’re not the most social of people. And myself included. I think when I get old, I might wanna just hang out with myself with my fancy things around me and my big house and nice view and that’s where this Asian place option comes, where you guys come in, right?
Yeah. So obviously I’m biased. But I think it’s really, for people who can afford it’s to me by far the best option in terms of. Outcomes mentally and health wise to be in a surrounding that’s familiar, especially, a lot of seniors start to have some form of dementia or Alzheimer’s, and those familiar surroundings become really important.
And it’s just a completely, you’re on your own schedule. The care we provided. I’m sure other providers also provide is very customized, very personalized. It’s very much about we’re here to serve you in your home, the way that you want to be served. You wanna eat breakfast when you wanna eat breakfast.
That’s when you’re gonna have breakfast. So you know, it’s a different it’s also, an arm in a leg, cuz we’re providing one on one care. You get a caregiver all to yourself. We have backup caregivers cuz you know, we do have to follow employment law, but the good thing is that means if your caregiver’s out sick, we still have other people available usually to come and provide the support.
But we’ve seen both. We’ve seen people who have transitioned to a facility or we’ve seen people come out of a facility and generally speaking, most people wanna stay at home if they can. A lot of these facilities are beautiful. They look like hotels. They’re very impressive from, our perspective, but there’s no place like home.
Some people have their really extra comfy chair and they have all the things that they like at home and their facilit just can’t replicate that. Yeah. And I’ll say from like a money perspective to most people, they, have a million dollar plus house they’ve probably more than exceeded the $250,500,000 home exemption on the sale of the house.
So if they sell the house now to harvest the money, If they don’t do a reverse mortgage to get into set facility, then they’re gonna be paying a boatload in taxes where it sounds really morbid. If you’ve, if mom and dad bought a house for 300 grand and now they’re sitting on $1.2 million, the $500,000, if they’re married, couple will only take you up to what I say, like 800 grand, and they’re gonna have to pay taxes on the rest.
So you have to pay taxes on 500 grand. You probably lost a hundred, couple hundred thousand bucks right there in taxes. So it makes sense from that perspective, if you’re on the fringe to just stay in place and die in the house so that you can get the step up basis. But nobody likes when I talk about money at death and stuff like that, but maybe let’s go over like the pros and cons of the care home, the way I see it, the care home you get, like the social aspect. Of it and it looks cool. It’s like a country club feel, but that in house, it, correct me if I’m wrong, but don’t you get like a dedicated person, where they’re still playing. So defense on you in the facility, aren’t they.
Yeah, for the most part we have we sometimes, if the care needs are not super high we’ve had couples care where they’re, our caregivers providing care for both husband and wife. I also have thought would be an interesting concept for people to do golden girls style where, if your parents have a really nice home with a lot of space, let’s.
Moms passed away or dad’s passed away and you need a caregiver, mom or dad wanna stay at home. Why not get a roommate who needs care and then they can split the cost of the caregiver. So there, there are ways to be creative about it. Get some rental income. Of course, if you’re a grumpy old guy who doesn’t wanna talk to people, maybe you don’t want someone in your space, so
Yeah. But if you don’t got money, you don’t got choices, right? Yeah. Yeah. So there are creative ways to stay in place. Yeah. And I guess your guys’ services might actually make sense too, for a sparring assisted living investment operator who has a house. Can’t work. The the caregiver angle just find a group like yourselves to outsource that part out.
But what as far as like Costco just generally speaking, what would like top tier care home costs on the high end and maybe low end. And then what would be that this option of the in-home caretaker costs high end, low end, so it’s in terms of the facilities.
So there are care homes, and then there are like the plazas where there are like large facilities. So care homes tend to be smaller. I don’t have the exact pricing on those, but in terms of like the Plaza or something like that it ranges the last I checked from 6,008,000 a month. And that’s for like I said, like a mid-tier versus the CRCs, the continuing care retirement communities.
Those are the ones that you were talking about, where you put down this massive chunk of money up front. And then on top of that, you’re paying the monthly fees. So for us, for PRI for home care, private duty home care, At any given point in time, it is what it is, but I can tell you that it’s been going up and up very quickly.
Yeah. That’s why people need a best, cause it’s probably gonna go up 10% every year. That’s gonna do it with yesterday. It’s like college tuition. It just, yeah. Worst. I guess college is the worst, right? Exceeds the market exceeds inflation, no matter what. So right now for us, it’s very like each company sets their pricing their own way for us.
Ours is very customized. So if it’s a range from 34 90, an hour to 44 90 an hour, generally speaking it can get more expensive, but most of our people are falling around 38, 90 an hour. But is that per month about, or, cause they’re not doing it full time. Some are. Yeah, we have some that are around the clock care.
So I haven’t done the monthly S see I’m is 2000, I think, our business owners will know that right off the top of their head. I should know this, but so 6,500 a week
What is that 20? I don’t know if I’m doing my math right here. Yeah, like 28,000 a month. So yeah, it’s it gets up there. If you’re now that’s again, that’s 24 7. So one of the beauty. The beauty of in-home care is most people aren’t starting off with 24 7. A lot of people will say, Hey, I just need six hours a day.
And then most companies will have a minimum of at least four hours or six hours. We don’t have a minimum, but we have a flat rate if it’s less than four hours, just because to get caregivers. Drive where they’re going spend the time providing the care and things like that. They need to be compensated.
So we have a flat rate for yeah. Anything less than four hours, but just comparing like the high end, right? Like you’re you need the max care 20 grand a month. That’s on par with the top, what the top facilities are charging. But then you also have to put in the fact that you put.
An arm and a leg and two legs, or like a million dollars essentially. And a million dollars. The way we teach it to folks here, it’s like there’s opportunity costs with that money. You could be growing at 10, 15%. That’s 150 grand a year, $15,000 a year. So it’s really 20 plus 15 a month. So like 35 GS a month.
When you take into account that. Most people suck at investing, so they don’t hardly make anything off of it. So I guess it’s 20, $20,000. So then it’s equivalent, but it’s all the usage of your equity I think is well, yeah, I think so. And actually, so it’s more like 28,000 a month, just wanna be honest.
And I always tell people it’s definitely a premium option. It’s a high end option that, not everyone can afford it and that’s okay. There are good options for people. Yeah, but there is also, we don’t, like you said, we don’t have the upfront investment. And then what if you go into one of those facilities and then they die a month later there is a big loss I don’t know all the, like when you can get your money back, et cetera.
But I know that there’s a kind of, they’re promising, they’re never gonna abandon you. And, but it’s like insurance. So you essentially is a pseudo life insurance place that they’re doing. And I’m sure they outsourced the third party insurance companies for that. But they don’t like, to break down like the levels of care, you don’t need to go to that high end 20 something grand a month.
There are other. Maybe talk a little bit about some of the mid tier and like the low tier place options or arrangements that you’ve seen people do in certain situations. Yeah. Like I said most people aren’t starting with 24 7 care and a lot of people don’t ever get to 24 7 care. So some people are eight hours a day, five days a week.
So someone’s there watching. There’s also, we didn’t talk about adult daycare is an option for people too. So if you’re going to work and you want mom to have a place where she’s looked after, and there’s a little bit of stimulation there, day cook daycare centers, just like you have for your little kids.
And often they’re connected. There’ll be like a preschool, right by an adult daycare center. . And so that is generally a much more affordable option. But you guys don’t set people up with that. That’s just another option. No, yeah that’s a different option, but just in terms of, so we’ve had people though who will go to adult daycare and then come home and then we provide care in the home at night.
So you can, find combinations of support or. If you only need us on the weekends or, certain days of the week, so really mixing and matching it’s much more flexible and customizable. I don’t know if you can think of some like typical client profiles, but like when would somebody do like a 5,000 a month?
How that get ’em and then maybe that mid-year I guess cause people come to you and you hear their situations, and then you’re oh, you don’t need that high end or that much time or hours, or you don’t need that. You don’t need the skilled nurse. You can just have a general caretaker, which is a lower, hourly rate.
I wanna be clear. So the skilled nursing is much more expensive, so I haven’t even given skilled nursing rates. The rate that I share is caregiver level. But we do, we have nurse oversight. We have a director of nursing and we’re joint commission accredited, which is like the accreditation that the high end hospitals get to assure that you’re following certain standards and protocols.
We are. Probably on the price, your end of the options in our industry. The hard part is that if it gets to be too little of care, then a lot of companies won’t do it because there’s such a demand for care. Not enough caregivers.
So we’re really trying to utilize the caregivers first of all, it makes sense for us, but also with the clients who really need it. And all like all businesses now are just struggling to find halfway decent people. Cause S are so high and. Nobody wants to do this type of hard work
Yeah so amazingly we have incredible people who like, they’re just phenomenal human beings and this is what they wanna do, but of course they have to make a living. We wanna make sure that we are one of the best employers they can find. And so in order to do that, we have to pay them competitively on the higher end and provide really great benefit.
Which means the clients are gonna pay for it. But that said there’s still tremendous demand. So I would say the sweet spot where most companies are looking at is at least six hours. Let’s say at least 30 hours a week, I would guess is probably. What most companies would be willing to look at right now.
Which is makes sense for a lot of people listing I guess I can go over and help mom and dad one or two days a week. , after I’ve done my job, right? No, it’s hard balancing all the things. So I think a lot of people if it’s, basic level they’re looking for, Wake up time, bedtime or lunchtime are the hot button needs, right? Hey, can you come help get mom dressed and ready for the day? Make sure she takes a shower or, eat something. Cause sometimes elderly people are, will forget to eat. Remind her to take her medications that sort of thing, or get ready for bed.
So yeah, those are definitely the high demand times those transition times and I imagine like people come to you and they may not, this is, it was a new idea for me. I imagine mostly for coming into this and a new person in our home. It’s something new for mom and dad, and then they get more comfortable with it over the time I.
Yeah, definitely. It’s your turf. I think, especially with, excuse me, Asian families, we have this built in hospitality. If you’re in my home, I have to take care of you. And so we experience this even with my own. Mother-in-law when my father-in-law passed. He had lung cancer and we got to experience this from the client perspective. And he, she was really struggling and we’re like, Hey, we have this company, we own and we’ll, provide it for free. she didn’t want it. She was like, what am I gonna feed them for lunch? And I said, you don’t have to do anything for them.
They’re here really to support you. It was really hard convincing her, like eventually we did, but she really should have accepted our help much sooner. And there are tips and tricks that we give to other families, but she’s particularly Persistent in . Yeah. In want that wouldn’t happen with us.
It’s don’t forget to pick out the takeout on your way yet. Yeah. Definitely some generational things and cultural things. But it can be really hard to just. Admit your vulnerability and that you’re at that place. Or, there’s a whole, all the psychology around it, like guilt.
Like I should be the one doing it, that, that sort of thing. And this isn’t really in your, guys’ like part of your guys’ job description, but you must see people go through this quite a bit. What is some of your general pieces advice for. Maybe somebody who is letting mom and dad do their own thing, but now you have to step in right.
And get more involved. Yeah. And we actually see a real uptick in request for care after the holidays. Cuz a lot of in Hawaii, a lot of the adult children will go to the mainland and have their career and they’ll come home and visit and then they’ll. How much things have deteriorated with their parents.
And so that’s a time where they’re really observing new needs and danger issues. Maybe moms forgetting to turn off this stove, or there may be some incontinence where they’re, having accidents and that kind of thing. So I think some things to those are things to look for.
And just be when you’re with them, just be observant, be aware. I would say when you’re in the home, really I think I shared with you earlier offline, how high of a risk falls are for elderly people. When you’re young falling is no big deal. You fall, you get up, no harm, no foul, but for a senior citizen, it can really take someone who seems really vibrant and healthy and independent and put them in a really catastrophic place.
Even, a lot of people die after a fall, once they’re over 65. So fall prevention I think is really critical, even if you’re not at the point. Needing care. Just really observing the home look for, are there trip, hazards, rugs that, or if there’s a lot of clutter, a lot of elderly people start to hoard and put boxes in the way, and you really wanna make sure that those kind of things are put away as much as possible.
Grab bars, make sure there’s good lighting. That kind of thing. So I guess another side business we can get involved in is like getting a set of contractors to like rehab these houses with the right showers or the right. And yeah, I think that’s huge. And actually to do it even before it’s even a concern it’s that’s the trend, it’s the tsunami, right?
The silver tsunami. As what they’re calling the boomers who are aging. So I think those can definitely add value to a home. Other like resources for folks that, if they’re going through this we’ll probably refer people to this episode in the future. Because I’ll probably forget about this in six months about myself.
Yeah, I think, a R P. Which I always crack up cuz I’m now I’m a member they have some good resources and then, I think Hawaii has the elderly affairs. Division, which I know sounds like the elderly dating site, but it’s not, sounds like a dating site to me. we can make that our other side business.
Yeah. But we have a lot of side businesses, entrepreneurs . And yeah, there are a lot of, I think just a lot of resources That are available to people, even if they’re not at this level where they need actual in-home care, there’s, meals, all wheels and family and friends and volunteers through other through church or other programs.
So there are a lot of resources out there. The great thing is we’re in the age of Google and can just do a quick search. And I would say that’s where, that’s where our group is pretty valuable. There are a lot of resources, but which one, what, depending on where you are in the net worth spectrum, it’s different advice for different folks.
Yeah, right? Yeah. Allison’s kind of a high roller like myself. So we like fancy restaurants and. We also like these types of elderly healthcare options, but , maybe to close things out, like if you had to plan something for yourself or your, instructions for your kids, what would you just personally like to see for yourself?
And what are their reasons, based on what you, where you’re at. Obviously you’re a little bias, but like at what point would you phase it in and, based on what you. What would you eat from your menu? What I’m hoping to do is die relatively quickly.
oh, other than that, I think we all thought to happen, like I’ll take it up to 60, 65 at peak health and then just. Just go, yeah, like maybe work. If you had to live for an extended period of time after that peak of health, what would you do if I had to live? And I, if I had the resources, I would a hundred percent use my own services because I love my house
I’ve built it in a way that feels comfortable for me. I’m relatively social, but I definitely things on my own terms. So for me, a facility dictating when I eat or people just coming in I don’t know, it just doesn’t appeal to me at all. I would absolutely, if I can afford it, use my own services.
I don’t drive public transportation, so but what do you do if you wanna go somewhere, can the caregiver take you to somewhere, take you to Safeway or Costco or you want, is that part of the we have one client who our caregiver would take her golfing. Even though her skills have diminished greatly, like that was a big part of her life and her identity.
And so she would take her golfing and And now I think they’ve moved past that, but they go in Hawaii we say Hola holo, which means just go cruise, drive all over. So her shifts are basically they drive in the client’s car. She drives all over the island. They’ll go check out the beach, pick up a lunch.
Hang out. And like I said, the care is very much personalized, customized. It’s not that you, we say age in place and home. It doesn’t mean you have to sit at home all day. You can definitely, go walk the mall or go to church if that’s what they wanna do. And then other people who don’t wanna go anywhere, we also can we help coordinate our team will help coordinate Safeway deliveries or that kind of thing.
You also get a friend too for free. Yeah. Not a free friend, but not a free friend. Nothing is free in this life. The caregivers they learn from each other. It’s really a beautiful thing. We have very interesting clients. So the caregivers can learn a lot from them and the clients love having someone interested to talk to.
Any other for people going through this, gonna shut out a whole bunch of money for, any other like last words or wisdoms from your point of view, other than good luck, you’re the bottle loop?
I’ve wrote down my lessons learned since we’ve been doing this business things I’ve observed. I’m sure your listeners followers already hear this a lot, but be grateful. Every day for every day have people in your life that you love and who love you and make sure you communicate to that to them, because we do have some very rich people who don’t have anyone.
And it’s really sad. So they’re receiving top quality care, but are the kids of those kind of people involved? Did they have just find you guys on their own or? Some of them never had kids. They had like one of ’em found us on his own. And his wife was here when that happened, but she passed.
And so he’s now alone and and not super like happy. Not close to family and the other thing is when you’re super wealthy, you don’t know who’s your true friend, right? Yeah. Cause a lot of people are coming, knocking on the door, trying to be your friend. Know who your friends are.
Be nice to them. Show them love. Be respectful to your caregivers if you ever have, ’em tell your parents, if you do get, if they get caregivers to be respectful to them. And of course not, if they’re, if the caregivers neglectful are abusive, then you would wanna report it. But we definitely have clients that are harder for us to staff because the caregivers keep refusing to go.
And really you don’t want caregivers who don’t wanna be there. Like what kind of, it’s really hard to provide care for you if you’re nasty and so as long as it’s in your control be mindful of that. Don’t be one of those rich jerks who treat people. I wonder if there’s a difference between the Medicare, Medicaid, the option, like the, some people do the, they drain their finances.
and they wanna be broke. So the government pays for their end of day care. It can be a happy place in there. Like I’m sure the caregivers are just strung out. I don’t know. I can’t speak to that. I probably should learn more. It’s not my area of expertise, but I think there are caregivers who are genuinely, whether regardless of the paved source, there are caregivers.
I think anyone who goes into being a caregiver for the most part, you don’t go into it for money. So they’re genuinely fueled by caring for others. But also they tend to have a need for validation and acknowledgement and gratitude. So when you’re caring for someone day after day, who’s just nasty and ungrateful.
Yeah. It can be really hard. Whereas there are some like really phenomenal caregivers who thrive on see that as a challenge. Let me see if I can turn this person around. Like really they’re very empathetic and can really. Really be patient and have that thick skin and build that relationship to where it’s a beautiful thing.
And that is something special but not all of ’em. Aren’t gonna be going holo, holo and driving each other around in the car. No, no lunch together. no, there’s a lot of, and some, and everything’s customized. So there are some people who really want that chatterbox caregiver to talk to.
And other people are like, don’t talk to me, I wanna pretend you’re not here. Leave me alone. I’m gonna live my life and then you come help me when I need you. And that’s okay too. And that’s where you guys come into, you start matching up personalities and a little bit of that. Yeah. So when somebody’s interested and we have care, potential caregivers available, then we’ll go out.
We call it a living room visit. So we have our client experience manager and our. Go into the home to observe the environment and look for those fall hazards that I shared earlier and really get to know the patient and the family and see where the pain points are and how we can help ease, burdens, and make, bring a little joy back into life.
Make things better. And that’s where we come up together with the family. We came up with a customized care plan. What is your budget? What, where are we gonna maximize what we’re doing for you? And then the personality matchup is the second round then yeah. So honestly right now with the shortage of caregivers, it’s do we even have anyone in the first place, but we definitely, and this is the sales thing.
yeah, no, I’m just joking. No, I wanna be fully transparent. That’s sad. Like we do guarantee compatibility. So if it’s not a good fit our client experience manager’s job and we also. An employee experience manager. So they’re checking in with the employee and the client. Hey, how did things go on your shift?
What can we do better? What changes do we need? And so we will keep looking if we need to find someone who’s a good personality match. Yeah, no it’s definitely in demand. That’s for sure. So you think about it as, this is a pretty good business you got going on here.
But yeah, yeah, thanks for jumping on the podcast. I think it applies to our Hawaii clans as well as on the mainland. I’m sure there’s options similar to this, not just going to the local high end care home, and hopefully they have lube for you again, but there’s other options out there.
Allison, you wanna get your contact information out there? If people have any questions? They can reach out. That’d be great. So if anyone has questions, the best thing to do is call our main line (808) 447-7448. Or shoot an email to Honolulu@brightstarcare.com.
All right thanks Allison for jumping on. If you guys have any questions about this we’ll probably make an info page about this type. Information at some point, nothing is coming to me, probably simplepassivecashflow.com/ elder. Something like that. I don’t know, email the team. If you guys are listening to this in the future, we’ll point you in the right direction, but definitely one of those topics that not a lot of people talk about, but it is a huge source of expenses in the future and something to plan.
If you guys heard it, it can cost upwards of 20 grand a month. And it ain’t going, getting cheaper. It’s getting 10% every single year, apparently. So something to think about folks but hopefully we didn’t make everybody be depressed by this today. we’ll see you guys next time. Bye. Thanks Lane.
What’s up folks, we’re gonna be talking a little bit about house hacking. Now house hacking might be for the younger guys, in my opinion. Great way to get started when you’re low on capital. Most of you guys out there have spouses. That’ll probably kill you if you even consider having somebody else live in the house with you guys.
Maybe not the best idea for people who want to stay married or above the age of 30. But, maybe if you guys have kids, this might be a great option to reach out to them. Or, maybe if you’ve got kids in college, maybe your kids can house hack it. And this is a great way to collect rent and see how money really is made as opposed to trading time at your W2 day job.
But before we get going, somebody asks a question there, people send me emails all the time and they say, “ Hey, I found this investment making 13%, 15% a year. And I just glanced at it and not all investments are made the same. And the first question that most sophisticated investors ask, including myself is like, what’s this investment backed off of, of course. Beyond performers can mean anything, but this is more like, all right, say an investment performer is. It’s not just some kind of crazy Bitcoin mining machine based on the price of Bitcoin. Where if Bitcoin tanks, so does your investment because it’s based on that, but let’s just say it’s like a legit investment that, there’s a sound P and L and supposedly you’re gonna get 14, 15% off.
The next thing is what do you collateralize? By what are you backed by as what we talk about? When sophisticated investors talk and, sometimes, you’ll see these investments and, there’s kind of one making that reigns through the internet.
Is that you’re investing in these businesses or providing startup capital, but, again, answering that. Butterfly money collateralized by there’s not by much. And which is why it’s a risky investment. And which is why it’s a higher rate of return, or it commands that because it’s more risky.
And this is, I think, where a lot of newer investors chase the higher returns. Ooh, 15%, Ooh, 18%. And they just gravitate towards that, but they just don’t stop to think and ask this question and they realize if things go bad, if shit hits the fan what are they gonna go and collect?
On the right. The nice thing about real estate is the real estate is there and it typically doesn’t go up and down in value. And if it does go down in value, just hold and wait till the better time for the sale, an operational business, like the one I’m referring to here that has like this higher rate of return.
In bad times or, if you ever needed to recollect on the asset’s not worth very much some of these businesses, there’s no real physical inventory. And even if you, there was some inventory in some warehouse somewhere, good luck. Even collecting pennies on the dollar on that.
That’s just another view to look at these types of investments and at least spotting out the bad ones. Another thing that I see going around a lot, especially in the house flipper world, is that there are pretty a lot of good house flippers. Once they do it for several years, they realize house flipping really doesn’t make that much money and it’s super risky.
So what do they like to do? They like to become a marketer, use their social media influence, and that’s why you see all these silly house flippers on social media, all the. Creating this brand. And what they’re essentially doing is they’re taking the unsuspecting passive investors and putting them in a newer house slippers deal and making money on the spread.
So what this kind of more experienced house slipper is doing is they’re pawning off. Somebody else’s deal as they’re up. Some newer flipper who’s really inexperienced, a huge risk. They, their fair market rent for private money might be in the 20% range. Sounds crazy, but it’s also very crazy to be investing in a newer flipper.
It’s, very bad paper. If you wanna use that industry. So what this kind of this middle man will do is they’ll pay, they’ll charge 20% to that newer flipper. And then they’ll give the passive investor 12 to 15% and obviously pocket the spread in the middle. And yeah, I think this is there’s some bid of a cloaking of this a lot of times, and a lot of times just the past investor really doesn’t have the experience to ask the question who the heck is the operator?
And this obviously happens in the syndication world, too, right? Where you have these kind of Daisy chain deals put together. And there’s everybody in their mother raising capital, which, in my opinion, is illegal. because, you need to be a licensed broker dealer to be able to do that.
You need to be an operator and not just a capital razor for that deal, but, I think that’s where there’s all sorts of things out there going on and, potentially nefarious activity and it’s hard for passive investors. And that’s why we always tell you guys, build a network, get going building your inner circle.
And that’s what we provide in the family office. Oana mastermind. There’s well over 90 members in that group right now. We asked you guys to test drive our organization, see if it’s the right fit for you. I really don’t think that there’s anything else better out there with this much sophisticated, accredited passive investors, right?
We’re not some real estate groupy group trying to teach you how to fake it to you, make it and make it rich. Cuz quite honestly, a lot of those groups. The failure rate is like 95, 90 7%. It’s and that’s why I never wanted to create a group like that. I wanted to create a group for folks like myself who are still working their jobs, still running busy entrepreneur businesses.
And how do you be the best pass investor on the side? And my whole formula was for that is relationships and really banding together with a bunch of other purely passive investors and trading the best trade secrets, where to invest who to stay away from, and then ultimately building those relationships with the people. If you guys are interested in that, check out simplepassivecashflow.com/journey for more details and enjoy the show.
Hey, simple passive casual listeners. Today. We are gonna talk about house hacking and how you can implement that or do that alongside of your normal investing or do that as a primary form of investing our guest today is Andrew Kerr from fi by rei.com. So Let’s get into your story, cuz you’re pretty accomplished real estate investor been doing it a while. How maybe give us a little rundown of how you got to this point. I had actually was working in the mortgage banking industry. I skipped college, started right away at 19 working and by 20 I was doing well enough where I could buy my own home.
So at 20 I bought my own place and I did this sort of house hacking style room rental, where I bought a place running out the other rooms. So my roommates, my friends were essentially covering my cost of my mortgage and along the way I had built up. Decent size real estate portfolio. I ended 2016 with about 40 doors, 40 rental units spread out across a couple different states, but most of my investments were there in North Carolina where I grew up.
And then I had this progression in life where I wanted to change my lifestyle. And started selling off all my properties that I actively own and actively managed and started investing in passive income. So I started investing in larger syndications where all I had to do was manage the sponsor or the individual or the team that was running the, this syndication.
And that’s let me free up a lot of time to focus on passion projects, like working for nonprofits and travel. And I think a lot of people listen and they hear about your story and how you’re investing in bigger syndications. And obviously my story is sort very similar. I started in 2009 and our paths it looks like a mirror a little bit.
Yeah. And they’re like I’m gonna invest in syndications, it took a long time. For me, it took since 2009 and then 2015, getting up to 11 rentals. And when did you start again? Just to give some people, how long it. It’s it grows at a snail space, right?
Yeah. I really started going heavy in real estate there in 2010, 2011. I had, while I had bought my first house at 20 and I had owned that property for quite a while. I didn’t go heavy there until 2010. And that was partly because I went from. The mortgage industry, where I had a six figure income to working in the nonprofit industry, where I started as a volunteer with an $800 a month stipend to then $2,000 a month.
So I did it built up a real estate portfolio on a very minimum budget, very minimum salary. And. It takes you about six to 10 years to really change your life around with real estate, which in the grand scheme of things, when you look at it, if you’re gonna be 70, 80, 90, a hundred years old, focusing really hard for six to eight years, isn’t that long of a period of a time.
I know a bunch of investors they’ll do the short term rentals or the house hacking very similar variety, but at some point you had a turning point where you’re like, screw this is too much work. Was there any kind of particular thing you can remember back to, or was it a sort of a gradual thing of slowly transitioning into syndications?
Yeah, it was a bit of a gradual thing, I’m 37 now. So when I started going really into it, it. Late twenties. And at that time I had more time on my hands. I did not nonprofit work. I did hanging cabinets. I did floors. I did painting. I didn’t have capital. So I did a lot of the work myself and the two niches I focused on were.
College housing and affordable housing. And then as life progressed, you start to get into your thirties. You start to get serious relationships, you get engaged, you get married. And I just wanted to be more hands off. My college housing portfolio was always managed by someone else, my affordable housing I did until I just ended up selling it, but just life as transitioned, you wanna spend time on different things.
It is just this progression where I didn’t want to be involved on the day to day anymore. And that’s where I started as I sold off my portfolio, reinvesting it passively into syndications. If you could define house hacking for us and we’ll get into your little twist on house sacking, cuz I, I think when people hear it, it’s it can mean a lot of things, Yeah. So I really look at house hacking as just making a slightly different choice for your housing. All the way back to a lot of folks have read that rich dad, poor dad book that basically says your house is a liability, not an asset. So the idea is just to do the slight change on how you pick your housing, especially if you’re in a high cost of living area.
So you can reduce. That 30 to 40% of your budget. That’s on housing and cut that in half or completely reduce it. And then the idea with house hacking is I define it as these six styles of house hacking. There’s the room rental style house hacking where you buy a big house, you rent out the rooms.
That’s great when you’re just getting outta college and then. There’s the sort of live and flip where you’ll live in the house for a year or two while you’re renovated, and then you sell it. That’s a lot of work. It’s not great for a family. Then those couple other styles are this sort of income suite where you convert a basement or you have a mother-in-law suite.
You have an accessory dwelling unit, like a pool house that you can rent out or a garage apartment, you have this sort of small multifamily and then you have a work provided housing. And then the idea is with all those different styles, you can run out to long term tenants. You can run out to short term tenants like Airbnb, V R B O, or you can do midterm.
Sort of rentals where you rent to corporate housing or traveling nurses. And the idea is you pick the model that’s best for you and pick the type of tenant base that you want. And it lets you reduce your housing costs. My first two house hacks were that room rental style. My third and fourth house hack were this sort of more luxury house hack where we bought this small multi-family property and really created these high end apartments for it.
And I’m happy to dig in more to that style of house hacking if you want. Yeah. When you went, when you did that style the more higher end one was that a short term or long term, the way you did. Yeah, we did a little bit of both. So when we moved to new Orleans, about four years ago, we run in an apartment right away because we wanted to start for looking for real estate and to do a house hack.
And what we found was this old 1920s corner store property that was in really bad shape, had broken sewer lines, it needed new roof. It had knob and tube wiring. And what we did is we gutted it to the studs and we converted it to three high end apartments. And then out back was this barn building that we turned into a one car garage and a sort of carriage house guest house.
And what we do with that carriage house is we rent it out on Airbnb, V R B O. So like during Mardi Graw we get 200 bucks a night for this $500 square foot place. Then the main building. We live in the upstairs, which is a two bedroom, one bathroom apartment. And a lot of folks when they think of house hacking is you really gotta sacrifice on CRE creature comforts.
You can really do it really nice where, we’ve got the farmhouse sink, the stone countertop, the higher end kitchen cabinets with the crown molding. We have a jacuzzi tub in the bathroom, $20 square foot, marble floor in the bathroom, hardwood floors. And then downstairs, we have long term tenants, we got a one bedroom and then a two bedroom.
And the really basic idea of it is those downtown stairs tenants cover our mortgage and a little bit of the taxes and the insurance for the property. And then that short term rental Outback covers all our additional costs. And we usually make, five to 10 grand on the property as well. So not only do we have a really comfortable, nice, higher end place to live, but we also have zero housing costs and then usually are able to pocket some money off of it.
And that gives us a lot of freedom to do a lot of other things that we want in. And you’re taking advantage of it’s your primary home. So in terms of financing and were you doing like a FHA, like 3% down or, yeah, for this one, we actually used hard money because it needed so much work. We bought it for two 70 and it needed to be gut to the studs and we put in about 250,000 into renovating it.
So we used hard money. We got all the renovations done after about 11 months we moved in and then we refinanced out with the conventional loan and then we’re able to pull back out most of the cash we put into it with our equity line that we added on the property. We’re actually working on a new property, which is just a due duplex, which is gonna be a higher end house hack as well.
But like with that, we ended up doing a FHA loan cause we’re sitting on a bunch of cash, but we wanted to. Have that cash on hand to do the renovations and do the value, add expansion on this next property that we’re looking at. So there’s a lot of opportunities out there, but most people, if they’re short on cash will use that FHA loan to do a house hack, cuz you only have to put that three and a half percent down.
And the, you get a little bit better interest rate when you’re the when you actually live in that property, as opposed to a non-owner occupied property, I would say probably what a quarter point or a half a point better. Yeah. Usually about a half a point dependent on the bank. So it ends up being work, working out pretty well.
I know a lot of listeners they live in like California, where a lot of these higher price markets are, they’re priced out. They don’t hit the 1% rent value ratio. And for those people I’ll say, Hey, go outta state rent. Get above that 1% rent value ratio, but some people.
They have limitations and it is what it is. I say something is better than nothing. At least you get outta the stock market and all of those type of investments and house hacking is another option. Or maybe you can go over some strategies for folks who have been investing, but it more, it’s more of a lifestyle change too.
And part of it is with the house hack house. Doesn’t have to meet the conventional 1% role. If you wanna buy the property and have it be a long term rental, you should definitely have it meet those traditional real estate investing roles. But, we’ve worked with some folks that have done house hacks where, maybe you’re in that high cost of living area like California or Seattle or New York and your housing costs are.
Three grand a month. If you can do a house hack and just reduce your cost to 1500 a month, that can be life changing for a lot of folks. Maybe the property will never become a long term rental, but if you need a place to live for that next 5, 7, 10 years, and if you were cut and cut those housing costs in half, most people for $1,500 a month, that gets ’em a new car, that lets ’em travel.
If they want to travel that lets ’em pay down debt, for $1,500 a month in savings. You can max out a 401k at work. So even if you never want to be a big real estate investor, or you’re just trying to, or you wanna save money to invest in real estate, do a house hack in, in that higher cost of living area and reduce your housing costs that will frees up the cash that you can then put in other places.
So now maybe you’ll feel more comfortable investing that estate. Any other nuances about house hacking that after being doing it for a few years, You know the listener out there might, clean some insight over just anything random. Yeah. The biggest thing is that most people had this default of, if I’m doing a house hack I gotta become a giant real estate investor and that’s not true.
And then the other is most folks feel like, oh, house hacking is something you can only do in your twenties. And it’s where you’re gonna have all these giant roommates. And you can really. Quite the opposite of that, where while my wife and I have tenants living below us, we didn’t have to sacrifice on any creature comforts.
Where we live in new Orleans, we have the street car two and a half blocks from us. We have bars, restaurants, grocery store Walgreens, within four or five blocks walking distance, we’ve got original hardwood floors in the place, 11 and a half 12 foot ceilings. That’s this misconception a lot of folks have with house hacking is it has to be giving up and making a lot of sacrifices on location or space.
If you plan for it, you can really get everything you want. And that’s the obvious cons, right? You’re living near your tenants. Me personally, I’m an introvert and I that’s a big one for me. , that’s why I don’t do it. I actually house hacked my primary residence in Seattle for I put it on Airbnb and that was just tiring to have people come in and out.
I just rented like the bottom floor. So I’ve done it, but I know a lot of people there, they might be a little bit more outgoing and they might like to chat up people who are out of town. If that’s you this could be something that you wanna create your life around and.
I guess a captive audience for all your stories, if whatever you will, but maybe give people like insight in your life today. Like how are you using house hacking cuz you’re you’re definitely more on the fi side of things and just given an idea or another viewpoint of things you don’t hear talked about in the workplace cubic.
So back in 2016, I had from building up with those portfolios and selling off money and reinvesting, I got to where in that sort of P community folks call lean fire. So I achieved that towards the end of 2016, and now I’m working towards fad fire, but what house hacking lets us do is, You essentially have five big expenses.
You’ve got taxes, you’ve got healthcare, you’ve got your housing. You’ve got automobile and food and real estate through the depreciation and doing things like cost segmentation. I’ve essentially offset almost all of my income. I have a very minimal taxes. And then by eliminating my housing costs through house hacking, I freed up 50% of my income.
Just by reducing my taxes, my tax liability, and by eliminating my housing costs and that lets me work for a nonprofit. Traditionally, in nonprofit world, you don’t get paid a lot of money. You also don’t have lucrative benefits, stock options, retirement accounts, those type of things, where I know my retirement set from a real estate portfolio and through house hacking, we also, my wife and I have a huge passion for traveling.
I’ve been to 34 35 countries and she’s been to 40, every year we seem to take off for several weeks and travel. By knowing that we have zero housing costs, it’s really easy to say, let’s go to the middle east for three weeks and we don’t have to worry about covering a cost of rent or mortgage back home.
So it just gives you a lot of flexibility in life. So you’ve left the 40 hour a week type of job in an office. Both of you guys are no longer doing. That you can travel. O oddly enough, I ended up sometimes with the nonprofit work. I ended up spending 50, 60 hours a week, partly just because I love it.
But yeah, I work from home managing my real estate portfolio and then doing some nonprofit work. And then travel. So in 2019 we visited guitar, Egypt, Jordan. We went to Jamaica, we went to Mexico and then we visited family and friends throughout the us. So it’s just given us a lot of flexibility, but yeah, we definitely don’t travel full time.
That’s a little too much for us, now in our thirties, we like to have a home base that we can come back to in a regular bed we can sleep in. And we like to just go out and travel, for a long weekend, a week or several weeks at a time. Yeah. I hear you. We’re about the same age and it’s nice to have a garage so you can put stuff in it, right?
Yeah. A bunch of bigger toys. Maybe if you could go over like the high level of your portfolio, right now people are thinking you’re not the Airbnb guy, but the house hacking guy, but how does it look and what’s the percentages of, is it like half syndications, half active, more active income like this?
We’re currently living on our third house hack, which is essentially four units. And we’re currently renovating our fourth house hack, which is a duplex. That’s all we actively manage. When we move out of our third house hack, I’ll actually turn it over to a property manager.
and then I will, when we’re living in the duplex, I just use cozy to collect rent, manage maintenance request from that person living on the other side. That’s all that we own now. And then probably about 80% of my net worth is in syndications. And then the other 20% is in, IRA, 401k, Vanguard, brokerage account, where I take that, jail call and simple path to wealth.
Idea of investing where you’re in a index fund and passively invest that way. Outside of those, I guess it’s six units that I actively manage. Everything else is in syndications. And I think at this point, I’m, I don’t know, maybe in 10 syndications now, I think. And you made me chuckle a little bit.
You actually said you were gonna go visit one of these deals before you go invest in it. I always put it out to my investors. I’m gonna be in Huntsville later on this week. If anybody wants to come join along with me and out of the thousand or people, or so, only a handful of people come cuz everybody’s busy.
Like it’s a little hard except a guy like Andrew shows up cuz he’s got, nothing better to do no offense. That’s the kind of life you want. Exactly. Another thing, I think some folks get too lazy with passive investments where they’re like, oh, it’s passive.
I don’t have to manage it. And my approach has always been, yes, you’re investing in a syndication, but you should still check up on your syndicate or. And then also check up on the property. So I’ve used a service called we go look where if I’m not traveling to the area, you can hire, we go look and they’ll send out a Looker who will then take pictures of the property and you spend a hundred, hundred 50 bucks, I’ll do that where.
The syndicator will send back a report for us. I’ll actually send out. They like, oh, the report says they just renovated the roof. They did all new siding, did all new windows and did landscaping. He sent pictures, but let me spend 150 bucks to send someone out to verify that works actually done. And it wasn’t just something they pulled off the internet.
So I’m always big on while it’s passive. You still need to mind your investments and check up on them from time to. . Yeah. And when I have people come out, we check out units. But if you’re going out by yourself, you’re typically not gonna be able to do that, nor do we encourage ops to even talk with the property management.
A lot of these deals, there’s 50, a hundred guys that’s impractical and not very good LP etiquette, but. What I do recommend LPs do is go ahead and check out the property and walk it and get the feel for it. Is this really a, B, or is it more of a B class neighborhood?
Absolutely. Any insights there that things you key in on, like I know personally, I look for bars on the windows, in the, is it in a primary residence kind of areas and renters area? What kind of cars people are driving? Anything that you can. Kind of things you’ve picked out or things you look at when you do this.
It’s a brief and how long is the trip? Oh a lot of times it’s really short and I love the fact that you mentioned that sort of etiquette is. So when I go in, I don’t go bother the property management. I don’t disturb the tenants. It’s very much, I’m gonna go drive through the apartment community or walk through the apartment community.
Or I might go in not announcing that I’m an owner where if they’ve got, Open house, or if they’ve got the onsite office where I’ll go in and just ask about what apartments are renting for and get the materials. You definitely want to have some etiquette and don’t go in trying to act like you own the place.
Definitely have good etiquette. But yeah, what I like is I love to see where the closest Starbucks is. What’s the closest grocery store and then any other single family neighborhoods that are around, do they have window units? Do they have the AC units in the windows? Do they, like you said, the bars on the window, are there check cashing places close by?
Usually if there’s a check cashing close by you’re definitely a C or. Area unit, if there’s a Starbucks close by, you’re pretty much a B or an a, a class unit. So I try to look at those things. And then I also look at the schools and then what are the ratings of the schools that are close by?
And that can tell you a lot about an area as well. But yeah, most of the time I’ll try to visit friends in the area or go to do some nonprofit work. And then I might spend an hour or two where I’ll drive through the community and drive through their surrounding neighborhood. Just to get a sense.
What are the window? What are you looking for? The window units there? So a as an example, if you’re looking at a single family neighborhood and it looks like it’s an older neighborhood and there’s the window air conditioning units that tells me it’s no central air, no central heat. So it’s an older unit and.
Renovations haven’t gotten into that area yet. So if you drive down a street and you see half the houses have window AC units, it’s definitely more affordable housing, affordable rent area where you can go buy a window AC unit for a hundred bucks at lowes or home Depot, where to put in a central air AC and heat, you could spend eight, 10 grand or more.
It’s something that I always look for to tell what the neighborhood’s and that gives me indication if it is a, B or a C class area. Yeah. I look for the, if it is sort of sensor air which a lot of properties like in Alabama are, for example, If there’s a cage on it. When I had my single family, I always put cages on it.
If it was B minus or worse, I, oh yeah. I probably had two or three of those things grow legs and run away. Yep. I’ve been there. But it’s weird in some, in other markets like Texas, your class C stuff, they don’t have, it’s not normal to have cages on ’em so it’s all a regional thing. Texas, everyone carries guns in Texas yeah.
Yeah. And that was, you. Come up with these stories of reasoning. That was my reasoning too. It’s so hot there. It’s man, you just don’t do that. So Andrew runs fi by REI a A website, a lot about a lot of articles about house hacking.
You’ve got the podcast, you just check that out. But yeah, appreciate you coming on and yeah, you getting to know you a little better here. Thanks lane. And we’ll have to get you on our show to talk about your early house hacking experience and where you’ve been going with your real estate investing.
All right. Everybody out there. Thanks for listening. Join the investment club, simplepassivecashflow .com/club. And let’s get on the phone and let’s see what we can do to move you guys forward to financial freedom. It might not be an apartment deal, might not be a turnkey rental, sometimes it might just be a little a referral to the right CPA or some kind of tweak. Something’s better than doing the whole 401k thing, all right, guys, we’ll talk to you guys later. Bye
Hey folks, this is the 53rd episode of the real estate brothers. Welcome folks. In this episode, we’re gonna be talking all about rising interest rates, J Powell and rumors of the fed. And Dean’s gonna start us off with some June statistics, but before we do that, why don’t you guys take some time and take some questions and comments and we’ll, I’ll try and formulate it in our head.
We’ll try, incorporate it into this month’s episode. Okay, so that is that me? That’s you. Okay. Welcome everybody. Thank you for tuning in as always. What is this number? 53 episode number. That’s pretty cool. I think it shows our dedication to our craft. We’re not doing anything else other than doing this freaking thing every month. We should be in person soon.
Is that right? So as you guys know, I’m a real estate investor and realtor in Hawaii can catch me on my YouTube website real estate of Hawaii, or my website, real estate of Hawaii dot. But yeah. Before we jumped into the statistics, I wanted to share a couple things, summer activities here in Hawaii.
So one event that I tried, our venue was beyond Monet. That’s over in the convention center. I, the reason why I posted, I wanna talk about this one is that I wasn’t very cool. I guess you could say, but I wasn’t impressed very much and maybe I’m not an impressionist appreciator or an art appreciator, but it just was, the lack of, what I was able to see there, basically there was like two large rooms.
One room had a lot of. Words that you could read about Monique’s history, which that part was interesting, but keep in mind, I brought my 10 and my eight year old child and they went, we went on a playdate. So that was one room that after you read all the history, then you step into another room that had, it was like a big, I know it is just an empty hall that had four sides of Screens and the projectors just shot on all four sides.
Like just moving art, which is interesting too, but that was pretty much the end of it. And I think we paid, along the lines of maybe $30. So it went by really quickly. So just underneath that, I have this search for Snoopy the peanuts adventure at the experience. We didn’t do this, but the funny thing is after the beyond, Monnet.
event. We went over to AWA shopping center and to have the kids play on this playground right next to the target. And we saw this search for Snoopy, a popup adventure. So I, we didn’t go to, we didn’t have time, but I then went online, came to find out it’s the, it’s pretty much the same price as the BI money event.
And again, I haven’t gone through it yet, but it touted like eight different things. Areas to go and do, tour and adventure. So it depends like I’m sure if you’re a Mon fan or appreciated the beyond money must would probably be awesome. But, I didn’t find it very. Good bang for your buck.
And the one interesting thing too, was that someone was working, there was a basketball tournament down below at the convention center. So I was talking to the lady working that event. And she has mentioned to me that she was gonna go to beyond Mon and said, oh, And I asked her, there was a beyond van go event that happened probably six months ago.
So I had asked her, oh, what she thought about that one? She said she hadn’t been to that one. She missed it. But the interesting comment she made was that the beyond van go event had a lot, a really good turnout. And from my understanding, it was very similar with the two different areas.
And she said, surprisingly, she finds that this beyond Monet venue, isn’t getting as nearly as much attraction or pool as the beyond van goal came. So that made me think that people like that. Paid the money for the Vango event. Weren’t impressed enough to come back to the beyond money when they found out it was a very similar concept instead. Anyway, did you go to the one in Japan where there’s like
the immersive experience near you? Yes. So that one there’s two of those in Tokyo and we did go to that and oh yeah, maybe I’m comparing it to that, but. When blue this one’s out of water, because this one, I’m just looking at a picture, but it looks like they just like. Fired up four or four projectors and they just changed the USB file.
It’s not, I, there are transitions a little bit. It’s a little bit more fancy than that to your point. But yeah, in a nutshell versus the one in Japan, which is, comparing apples in oranges, but the technology that they had in the one in is, the kids, they would get a picture.
They would. Draw a sea creature, and then they would scan that sea creature in the computer, and then that would pop up and be animated. And. Going all over the walls in the virtual ocean and it would be moving. And that’s just one right there. There’s and maybe we were expecting that, but anyway, we are typical Hawaii, man.
If anybody can help me find a CPA that knows about passive losses and land conservation essence, please help me because apparently we are 20 years behind everybody on the mainland. And in terms of 3d, immersive art, we. A hundred years behind Japan. Anyway, getting off topic, let’s jump into the statistics for June.
And I’ve been tracking this as well as some other statistics because everyone is talking about the doom and glue and how there’s the correction and interest rates are making everything. Tank. And that may be the case on the stock market side, but glad to announce that it’s not quite happening in Hawaii. We are seeing a little bit of, I dunno, if you wanna call it softness, but as you can see, it’s not really evident in some of these numbers I’ll point out to you where it might be, but starting off with the single family meeting, single family home prices, we’re actually at 1 million we’re actually up 12% from the same time last year.
On the townhouse condo side, we actually. Broken all time, new record at five 30, 4,000. And that’s up 16% from last year where we do see maybe a potential. I dunno if you wanna call it softening, but it is on the Kohl sales, 357 for single family. That’s a 21% decrease from last year and 626 Kohl sales for townhouse condos.
That’s a 14% decrease. Last year, if you wanna say, that’s, if that’s a sign, the market, we’re still at 10 and 11% market, which is still a strong seller’s market by definition. So what I would like to do is like how we always do is dig a little bit further to see how things are going.
So closed sales. We see again, we’re just looking at the trend lines that, over the last. In 10 years, this is the closed sale trend. And if you look at it still looks relatively healthy, it’s not like it’s like a big drop, for new listings. This is where I think on the mainland.
Certain parts of the mainland they’re saying is softening up because sales are going down, listings are coming up. And then, inventory overall is on the rise, which is causing the prices then to soften. But as you can see here, new listings, we have, we, it’s not really going up. It’s actually going down.
And so what that does. Month supply of inventory. It’s not bumping that up as much as it is in certain parts of the United States. So if we look at, for June, we still have a single family, 1.6 months of inventory and condos, one not much different at 1.7, if you look at this historical chart, we were still really busy all time low still.
Until the inventory starts bumping up, I think that’s. We will actually get to see more softening of the prices I think. And, one thing different we have is our new construction rates. Aren’t nearly as high as they are at the mainland, being on the island as we are. So looking at days on market too, as a lagging indicator for a buyers or sellers market.
And we have, as you can see. As you mentioned earlier, it’s well under two weeks, so we’re still by definition in a seller’s market. And again, all of these statistics are lagging indicators, but these are six days old, right? As of June, interest rates again we talked about in the past.
I pulled this number yesterday, but the 30 year fixed is at 5.65. And I know I hear a lot of people freaking out and right, because everyone’s been spoiled for the last 10, 12 years. And what it does is yeah. When you, everyone is used to that 3% interest rate, it’s going. Almost double and now your buying power goes down.
So everyone has to adjust to that. Yeah. Okay. So now going onto some interesting news on the west side of wahoo, this is regarding the Makaha valley area. Once in a while, I get these calls . A lot of people like new construction and they’re looking for new construction popping up.
We always talk about Kaka ACO. We talk about Co Ridge having a whole ley, but there’s one small subdivision out in Makaha valley by cottage, by Stanford, Cara cottages at Mount Olu. It’s a gated community. The single family homes up to about 1.2 million and it is just out there in the middle of that valley and just stands out compared to everything else.
And part of the reason why is because we had this, a Canadian company that had bought the land in Makaha valley many years ago. And they were supposed to develop residential vacation homes, vacation rentals and golf courses. A few golf courses, I think two golf courses popped up over there.
Only one has survived, but besides that, there’s not much out there. In fact, one of the golf courses was supposed to be a tiger woods golf course. And so without that development coming through fruition that cottages of mono oil just stood out there. Oddly placed, but that developer actually went bankrupt in 2021, the one in Canada.
And so they, the bankruptcy courts have sold the property to K group, which is a Korean company. And hopefully they’re gonna start development in terms of getting that Makaha valley, developed in, having. Some neighbors and something to match the development of the cottages at MLU.
So that’s it depends how you look at some, some people think that’s great news. Other people are like, keep the, keep Hawaii, but is that a safe place out there? Is it. I just ask the question, everybody’s thinking. Yeah, no, and that’s a great question. And as a realtor, by, by definition, they, we have to watch out for what we say because of fair housing laws.
So when oh, selling properties, that kind of thing, but no, to your point, you go down the street. And you head towards the ocean and there’s a homeless camp off to the right, right on the beach. That’s not looking too good. And overall, you think of the, once you get outta Makaha valley, you look at the.
The condition in the neighborhood, the houses are really old. And so there is something to say it was gated, right? This thing, this, the cottage at mano is gated. Yeah. And there’s a guard. Like I said, it does, it is unique in terms of once you get out of the valley how the rest of the inventory and those new neighborhoods.
This is good for the mainland guys who don’t know anything about the island. And then they just, they don’t care being on the west side. Funny that you bring that up because that’s who’s the ones that are spotting this one and asking me about it. So yeah, that’s exactly the ones. And then, so then there’s a little bit of education too, and saying, okay come down and let’s go drive through the neighborhood. Let’s take a drive out. and let me know what you think. And so it is to your point that I am getting those inquiries about cottages. That’s why, when I see these articles like, oh, good to talk about because it’s all part of educating our friends, our clients, about our neighborhoods, where are the gated communities?
You get this one there’s. There’s actually a if you could see this picture out. Oh, lower Ridge. Oh, just in general. Yeah. There’s not many gay communities. Yeah. There, oh, there’s a townhouse in Milani Maka. There’s condo complexes that are easier to gate, right?
Yeah. But no houses. Yeah. You know what I mean? Yeah. Oh, there, there are ones I. Shoot. I think in Windward side, there are too. And in the Kahala side, there are a few, I think they’re small though. Yeah. But yeah. That’s why I like to talk about these kind of, articles too. Yeah. As always, I like to talk about the scam the month.
So now we’re talking about celebrity cryptocurrency scams and. Basically what these scammers are doing is they’re building the scam initially. Then the criminals will boost the scam with fake endorsements. So they will get, I guess they’ll impersonate public figures who previously promoted cryptocurrency to make the endorsements seem legitimate.
And then the endorsements are meant to influence you to invest in the scam. And if you fall further you’ll not see any return on your investment, obviously. So keep being aware of those. Always do you know, never trust a get rich quick scheme, if it sounds too good to be true, it probably is.
They’re the crypto currency scams are usually caught, and shut down quickly, but you never know. And remember that celebrities do get paid to endorse the. Cryptocurrency. You do your research and your due diligence in mighty people, although we are social creatures and we just follow, like lemmings one person that’s popular, right.
Happens since high. So that’s basically what this is. Yeah. So in this scenario, that celebrity isn’t truly promoting this scam, it’s just try to mimic that. Yeah. So the way this works is there’s like these discord channels. And then they’re usually put on by some kind of influencer, like a YouTuber or somebody like a podcaster that doesn’t know what they’re talking about.
But sometimes the influencer is like some actual tech founder that actually went full cycle with a company that’s where you gotta do due diligence, but most times it’s think, what’s that Jake Paul dude, or I don’t know who these guys are, that the one the brothers, the box. The pro boxer.
I don’t know. He, I don’t know. He’s got beach chairs like that, but he’s, there’s a lot of these like influencers, right? And so they get paid, not they’re dumb. They, I would, if I was the influencer, I would want equity, but they just get paid like a, just a quick sum of cash to shout out.
Just like all the Instagram influences out there. If you guys go to social blade.com, you can. Find all the local influencers and just pay people in certain categories where you want. It’s all paid for. It’s just a sham these days.
Like social media, waste of time. I dunno. I’ve been grumpy today. Cool, cool. No, that’s a good, very good point in terms of, you get. You very much do research, cuz there’s so many people and you think that it’s legit, they try to legitimize things. Anyway, moving on. So I have a client who is, this has happened a few times actually, where. . But right now I have a client who’s planning to sell their property.
They live 3000 miles away. They haven’t seen their property for quite a few years now it was tenanted. And again so yeah, they’re in the mainland and One thing and sorry they want me to sell their property. So one thing I asked them to consider you don’t need to, is to get what’s called a pre-marketing home inspection.
Typically in the buying process, the buyer is recommended on their own dollar to get a home inspection. And they use that as leverage, possibly to negotiate repairs. And our credits. So in the scenario that we’re in this for my clients, I had given them the option to get a pre-marketing home inspection.
And so one reason why this might be something for sellers to consider is it, it minimizes prices for the buyers as well. For the sellers in that manner, because they haven’t set it for net property for so many years. They don’t know what’s going on. A lot of times the property manager doesn’t let them know what happened.
The best thing they can do is go back to their accounting and see, oh, they had, they got billed for this. Okay. Okay. The toilet was repaired cuz or replaced. Cuz we see that in the bill, sometimes there’s a bill and there’s no detail. So the inspection helps. minimize those kinds of oopsies or like things they didn’t know about you.
And in theory it can reduce the buyer’s reason to cancel from the one inspection. So if providing, then with the buyers, with the information, if you want to at least be able to disclose things that popped up in this pre-marketing home inspection. It gives the buyers in theory, less outs because of, in things that they didn’t know, because they discovered it during their inspection, because we were able to let them know prior to getting into, to contract by right.
The buyer can opt out of the. contract based on for no reason for that matter in terms of if they’re still within that inspection period, but this just in theory mitigates the risk of them canceling on a, for a legitimate reason. It’s also in a pre-marketing home inspection is also a great marketing tool from the standpoint of being able to say to the buyers and the buyer’s agent in.
In good conscience that the seller is being upfront, honest and operating. Good in good fails in good faith without anything to hide. And it totally depends on the sellers because the sellers could take it two ways. They could go on the one side of the spectrum and be fully transparent to the point.
Oh here’s the pre-marketing home inspection report in. Take a look at it and you can see, or you could be on the opposite side of that spectrum and say, you know what, I haven’t set foot on this property. I’m gonna sell it as there are no credits, repairs, anything. So buyers now that you know, that you build in that, to your taking that to consideration in your offer, right?
So that’s theoretically you could be leaving meat on the bone though. So that’s why when you have that two ends of the spectrum, In theory, when you’re being more upfront and open you can hopefully get more for your property and pocket more. So it depends how you look at it again. Sometimes I have clients who are like, no, just as I take it.
I don’t wanna know anything. Just let them know. I don’t know anything. And that’s fine also. And again, situations where the owners haven’t seen their property in a long time is often when I. through that as a consideration for my sellers. So something for sellers to think about.
Yeah. See. So last I wanted to end with an update on the Kakaako neighborhood. So I went by today to take some clients over to the ward village. Area in the IBM building. And so I heard a few presentations. So quick update the Ali condo condominium that’s been completed already, but they still have some available studios that start at 660,000.
And there’s actually resale condos for Ali because it’s been done. I think some people are turning around and trying to sell them. Of course those are probably more. units that are, they were picked already. So the ones that are still sitting are not gonna be as, in good I guess part of the building, also co Ola is another complex similar to Ali, a little bit close, closer to the ocean and those studios start at seven 30.
They also have one bedroom at, in the nine hundreds and the two bedrooms at 1.2. So this one’s not gonna be actually done till I think. The fall quarter Q3 of this year. So those are for sale. A few units left. If you have, if you add to know anything, then P me, I have the pricing and the available units, but maybe for next month I’m gonna talk about the next building, that word villages or Howard Hughes is putting up and that complex is called Kalay.
And I’ll report next month. But lane, we talked about not Uru being on the ocean and having nothing to no views. So Kalia is one of those buildings that’s gonna be built right across from Aliana Boulevard. And it’s gonna have a view of the ocean in theory. They’re not building them similar to Naru where everyone has.
Ocean view, they’re doing it a little bit differently where I believe it’s, you’re either looking ever or diamond head. And then you have not a pick a peek, a Butte blue view, but you don’t get a straight shot view of the ocean so that everyone has some kind of view, but not the most gorgeous view, more information on KA coming soon. Those, when bedrooms start at 1.2. Just to let you focus on the downs, that could be for a while, but I’ll probably have a better, more comprehensive report with pictures and pricings. For next month, what’s the three bedroom, three bath costs. Because all these other ones are under like 1200 square feet.
Yeah. So, I think there’s gonna be like, I think that the highest would be like 5.3 fi in the 5 million. Oh, that’s probably this one, this three it’s at the corner unit three bedroom, three bath, 1457 square feet. So yeah, so Kale’s gonna be 330 units. 165 of those units are gonna be unrestricted, meaning, you can be an investor.
You don’t have to be living here. The remainder you have to be. It has to be owner occupied. Yeah. So what’s. oh, okay. So this Alii is not as good as Lua then. Yeah. Ali’s further towards the mountain. The unit sizes are a little bit smaller, the unit sizes. And then yeah, this interesting thing is Alii.
I have heard from a few buyers who stepped into the unit after cuz you’re buying off blueprints back then. And they’re like, oh my gosh, like this. This is so small. I can’t even believe how the engineers even, or the architectures they should be fired for coming. And man, you knew you should have known it’s gonna be tiny.
And, the thing is there weren’t any models to look at. Yeah. And I did see one of the Ali studios and it wasn’t that it seemed actually really big because of the way they made everything efficient and they had a Murphy bed and, but it reminded me of Murphy bed. You gotta live in the studios.
Yeah. Yes. If you’re, it reminded me of some of the Airbnbs, I stayed in Tokyo. If you are moving from, say Milani Maka from the four bedroom, three bath single family home, 2000 square feet, and you’re trying to. Squeeze yourself into a 350 square foot studio. Yeah. You’re gonna, you’re gonna be in a big bunch of shock.
Yeah. That’s the downgrade living with mom and dad. You get your living room and all the common air between the laundry room and you know that you get smaller quarters. You could, yeah, seriously. So I don’t know. It just depends how you look at it. Cuz the theory is that, you go back to your, so these micro apartment theories in these urban areas is you go up and you go to sleep there, but you’re gonna go down to the amenities that they have as well as the public amenities in terms of the restaurants and the shopping and the parks.
And know the interesting thing about transitioning back to Kalia is they’re gonna have these bungalows, it’s almost giant. I dunno like kitchens and the area. And one of the bongos has a pool where you can rent out. This area fits maybe 50 people and you have to pay a fee, but it’s almost like a miniature version of middle lane town association where you can rent out the big party room for your 300.
party, graduation, that kind of thing. It’ll be interesting, but yeah, Kala’s gonna be right on the, on Boulevard. So that should be an interesting one. I can, I’ll talk about that one and we can do even comparisons with the older inventory that has the video. Yeah. So that’s all I have for my section.
We’ll. If you guys wanna learn more about investing on the mainland, you guys can check out my podcast and we’ll pass it, cash flow, and the website simple pass it, cash flow.com, but let’s get to it here as this is a little chart that I put together where everybody’s complaining about the interest rates going up, but Hey, the interest rates go up, they cool off inflation and that’s just what the fed does.
And that’s, it’s kinda like your parents who told you couldn’t do something you wanted to do. That’s what the Fed is doing to make sure that we don’t go to hyper inflation and some con historical context of how long these times of cranking rates up, what did it go up? 70 per basis points last time.
It will probably go up half percent three quarter percent again next time, but you’re the last time it’s, it’s gone. 1.4 years, one and a half years. She lived 0.2 years from 2005 to 2008. The most recent one, 2017 to 2020, just before the pandemic was 2.6 years. So I would say, people say the interest rates are gonna go back down. I don’t think so, man. I think we’re looking at least another year of interest rates cranking up,
Best and worst places to raise a family. People like these for some strange injuries and, but Honolulu and Pearl city were like number one there. Oh, wow. Yeah.
Sanel is like a real estate guru staying away from Bitcoin. And if you guys are interested, I did a video called Crypto winter, which is upon us. I think it was live. Tomorrow on my YouTube channel, you guys can just Google it. Rich uncle is the YouTube channel. We try to keep things fun and light up there, but I’m not a huge fan of investing for sustainable returns, that type of stuff.
I do think it’s long term, so don’t get me wrong, but I just don’t. I took all my money, all that blocked by and all that type of stuff. Cuz there’s all this did. All the brokerages. I don’t know if that’s the right word to use, but of all the people on the exchanges there’s some turmoil happening on the staking side , but John Burns real estate consulting reports that demand is shifting from owning to renting with prices still pretty high.
There’s a bit of a. Home appreciation nationwide hit 20% in March of 2022. Making the largest jump in three decades. Mortgage payments went up about $600 with the latest increase in rents. If you live in Hawaii, that’s probably four times. Probably like two grand mortgage payments, right? Like most people used to pay three grand now it’s five GS right. Every month. Yep. Yep. Yep. In terms of new, the comparable new loan, right at the new lease, right?
Yeah, exactly. Should have done it yesterday. Yeah. Cause we all say, but I saw a picture the other day of some guy signing a noon loan. And I was like, really now’s the time to do it, but I guess, the rates are gonna go up more than likely in the next year. So I guess better now than later, but it’s a little too late to the party in a way.
Oh, I told you too. And that other slide that I showed, at, five, 6%, we’re still relatively low in the grand scheme of historical interest rates. You. Yeah. So exactly. So we’ve just been spoiled, when it, and it’s just shocking to us emotionally, as well as financially, when you look at how far down our buying part went, compared to when I was at 3% or below 3%, it’s very unnerving and it’s scary. It’s scary. . Yeah, but are you ready? That’s why I like your condos. Like your condos are, so I don’t wanna be offensive again. I always get that disclaimer, like one ha or 600 grand to 1.5 million, that’s all kind of semi middle class household house is like, to me, the people coming from the mainland are not middle class.
They’re all buying much larger or they can afford all charter, larger houses. Or more expensive houses. That’s 600 square feet here in Hawaii, apparently, but, yeah, like I, it’s binary. I think it’s like the low end folks, which is, most people in Hawaii are struggling and it’s the high end that can afford it.
And they are doing pretty well, all things pretty much it’s the elimination of the middle class, right? Yeah. The cation of the haves and the haves nots. Yeah. What do you wanna be? Dean? Do you wanna be, you can’t be middle class. You can’t stay in the middle and you have to go to one side, I wanna be on, I wanna be happy and I want my kids to be happy.
Yeah. Yeah. They’re not gonna be happy unless you pay $30 to see Snoopy and well, and not even bed an eye on it point us to the apartment market, nothing sign of slowing down rents. Road. Here are some apartment markets that are doing pretty well: Miami, New York, Fort LDO, Florida, Tempe, Orlando, San Diego, west Palm Nashville, Seattle, New York. Top smallest increases generally came in the Midwest and Northeast.
All the growth is in the Sunbelt. We keep talking about it again and again, and multi-housing news echoes that the rust belt and. Northeast, more people were leaving California, the rust belt and the Northeast heading to the Sunbelt and the Rocky mountain regions. This article they’re talking about out-of-state rental applications.
So people are moving out of their state. I know people are always moving out of Hawaii and the more affluent people are always moving back. Where are people relocating? Where are the magnets? Texas, Florida, Arizona, Georgia, and Tennessee. And this is what we’re talking about. The nation’s best renter retention rates for conventional apartments are occurring in the class B and the C units because of class B and C folks.
The middle class are not economically mobile and they cannot afford to buy houses, especially today. And this trend will fully continue on. Oh, here’s some places where they’re moving Class C are the apartments that aren’t raising rents as much as the high end, because the high end aren’t there, they have more money to spend, especially these days coming outta the pandemic.
Which is a little perplexing too, because you would think that maybe the people who are on the fringe or the bees move down to the seas, but right. So you just don’t have the ability to pay much more. Seems this one has some pertinent to Hawaii folks. But this is all the way in New York. This is a sort of anti rent control bill that got passed. Just one in a line of many I’m sure there’ll be more rent control, but I always look to you, you’re drawing us out with the paper. Oh my bet. All right. We’re always Looking at states like California and New York, where you are seeing this kind of precedent centering type of laws being passed because Hawaii is very progressive in terms of laws and equality.
In terms of financial equality, changes in my opinion, One time, Hawaii that comes up for discussion. Once in a while at the legislature rent control, it’s very scary. We don’t have rent control here. We do not, but it comes, it comes up every once in a while, every session. I dunno if it’s every session, but it becomes a topic of discussion because of the high cost of living there.
Affordability problem. Did you hear that Hawaii’s minimum wages can get raised, I don’t know, 10 years from now that was that a big thing or I just saw that article. Yeah. It’s see, I don’t even initially right on the fed side I think Obama was going, he was successful.
And I don’t know. I feel that I understand what they’re trying to do, but. I have a feeling it’s gonna backfire from the standpoint of, when we hear big, like on the federal side with that, I feel like now we saw McDonald’s a lot of those kiosks popping up in the cashiers.
Yeah. At the Safeways, we see the self checkout lines, more popping up, even Costco. So I feel like it might have a backward effect. you’re gonna actually displace the human resource. Yeah. I’ve never seen so many parking attendants. The guys who take your ticket.
There’s none of that. On the main night, everything is Automated, you don’t have some random person just staying in that little booth all day, making X dollars an hour. You don’t have any of that. I think El Elon Musk was watching an interview with him and he was saying that, with all of this technology, AI and everything, it’s gonna make a lot of this menial labor.
Positions that were handled in previously by, from, by humans, handled by technology and AI to the point where you know, people that don’t ha these, I, I guess for lack of better unskilled labor type positions are, might go away and who need to have, like a socialistic society where. Some people, the homeless, won’t be homeless, the jobless population will grow because there won’t be any jobs for a certain type of demographic or amount of education.
There, there won’t be any jobs for a big portion of the population. So the governments are gonna have to just pretty much just give them money and because they, there’s no way they’re gonna find a job. Go on Reddit and read the anti work thread. It’s funny. It’s made to be funny, but it is super sad because like people, you have to get into so much student debt to get a halfway decent job to make 50 cheese a year.
It’s ridiculous. And then one of there’s funny things and it’s okay, Make me do this bullshit application for a job that takes me like an hour. And then I have to upload all my job experience every single time. And then you’re not gonna tell me what the stupid pay is. That’s absurd, but that’s just how it is.
I don’t know. It just, yeah, like it, it is getting so separated. This is why I just wanna go to my gated community where when everybody gets so pissed off and everybody just fights in the streets, I will be away. And maybe, I know you’re not allowed to have guns, but maybe I’ll get a cannon or like a lightsaber and protect myself.
But yeah, like it just, yeah, it feels, feel sorry for a lot of folks out there. It’s just the system. Yeah. But yeah, I agree like the, raising the minimum wage is gonna get just passed down to the lower guys somehow. Yeah. Yeah. But let’s just keep focus on keeping the status quo for now.
But yeah, CNBC business, their opinion. It’s time to prepare for a recession. I’m not, I don’t really see this happening too much. We’re already, we’ve already had a negative 1.5% GDP. Last quarter and our recession is officially two quarters of that in a row. But like when the previous quarters passed were like 20% plus gains then you’re due for one of these once in a while.
You’re still net positive. yeah. You’re still net positive on one year moving average, these articles they need to sell, they need to sell doom and gloom. But I do think that the war in Ukraine is going longer, or the lockdowns in China, cuz that’s gonna make even more supply chain shocks. those are just two of them.
What they call the black Swan events that could potentially happen. That probably won’t, that is there’s always black swans events that could happen, but I don’t know. I don’t know. It’s why you buy stuff that makes sense in cash flows, as opposed to gambling on things. And don’t.
Any commentary there, Dean, I just was gonna say with that said, how, what, how are you getting ready for this? Or how are you? I think in a discussion I had with you, you folks, in, in a different setting, it was like, part of me, is getting caught up with all of this, these Domain gloom stories and taking my foot off of the gas in terms of.
My investing because I’m at where I’m at now. I’m still in the acquisition phase. So in theory, all things being the same, I should be pedaling to the metal and buying cash, flowing properties, but seeing this kind of thing in the media, in terms of the recession coming up and it’s maybe I’ll keep that cash for a little while.
And although I’m losing. Up, 8% keeping it in cash. If, and when there’s a big correction, then, I can put, be buying whatever real estate stocks. Yeah. Crypto at a discount and at the bottom waiting for everything to go up. So it’s what are you, how are you taking the, all of these kinds of articles since you’re reading them, just buy stuff that cash flows now.
But that whole thing that you said makes a lot of sense, but in practice it’s impossible. Do you remember 2008, right? That was your big moment. could you have picked the bottom and picked the right point? No, you probably are. So you could even do it in 2011, 12, 13, 14, 50.
Like you, you are not able to pick the bottom, just like again, 20, 20. The bottom fell out. But did you have the coho to go back in and summer of 20, 20 or 2021? No it’s impossible to catch, go in is, which is part of the practicality of that type of strategy. And I don’t claim that I’m that smart or have the clogs that do it either when it drops.
So I’m just gonna dollar cost average, and just, yeah, I was about to say the exact same term. So look what happened in 2020, like the bottom things dropped, right? I don’t have any of that type of stuff. That’s why I do real estate. But if you are already in you and you held onto real estate, you got that tremendous climb up.
There was no way you could have jumped into it. Hit that wave. If you are sitting on the sidelines or on shore, you have to be in the water in there holding onto the asset. Yeah. And by the time it’s all happening. You’re like oh no. Oh no. yeah. If you have enough man, like by all power to you, you can do what you want.
But most of the people saying this do Gloo and they’re gonna hold onto cash. Are. Guys are under half a million million dollars net worth. And to me, you can’t sit there with that. That’s just not enough on my own, for me. Yeah. But if you wanna do something, that’s what life, that’s what the cashier life insurance is.
It’s a way of pun. If that’s a really conservative way you wanna play it. That’s a good point too, in terms of getting like it’s you’re not going to. Kill it with the returns, but you’re, you have something better than sitting in, in cash in the bank, and then you have so many options in terms of, accessing the cash for, yeah.
For what investments in, and not applying that. Yeah. I’ll say on a recorded line, I will guarantee that people cannot time the bottle. Oh, I got a chopstick-like wrapper and I put it in front of my daughter. And trying to test her like reflexes just to troll her.
She cannot catch that thing. Just like how people cannot catch. They cannot, like, whenever this bottom comes in, you cannot catch it. It’s just not. You scared me when you said that, I’ll say this on, on, on the record. I was like, oh, what? Oh, should I have to press the pause or what? Okay. So why am I saying outlandish things?
My second thing that I will bet on is I don’t think rents ever go down for longer than one to three years. I’m willing to take that bet. Why? With that said too, saying the stock market in the long run always goes up real estate. Oh, I don’t know. I don’t know. In Japan, that’s not the case.
And people say we could be like that, but rents never go down. I don’t know. And gravity works but. Anyway, We had some of these other things. We hit our time limit here. And we are looking to change the show and how, where do you guys wanna talk about? So if you guys have any feedback, please reach out to myself or Dean and we’ll see you guys next time.
