Dear investor,

I had my head down in a couple of deals and especially during the HUI3 weekend (mastermind in Hawaii) which turned out to be amazing!!!

When I realized it the month of February was over and we were in the midst of the quickest 10% downward correction in the stock market ever. Supposedly due to the Coronavirus. I say supposedly because you can never really tell what is the reason for movements in stocks but this time it seems like it has really gotten people up in arms.

Links to the PDF slide-deck.

Video format of this Month’s investor letter:

1. What is the Next Step in Asset Protection After LLCs
2. Top Things Ignorant Investors Do
3. Top Markets to Invest in 2020
4. Stop Listening to Real Estate Gurus
5. Mental Mistakes of Investors w Marco Santarelli
6. How the Rich Use Land Conservation Easements for Tax Deductions
7. What Interest Rate to Expect from Investing in Private Money Lending
8. Don’t Invest in Short Term Rentals Until You Understand This
9. Best Marketing Platform for Short Term Rentals
10. How to Position Your Short-Term Rental
11. How Much Money You Should Have to Do Private Money Lending
12. How Politics and Rent Control Affect Where You Should Invest
13. Big Changes to Your Retirement Account in 2020
14. How the Secure Act Screwed over millions?
15. Do I Need Asset Protection on my Retirement Accounts?
16. Is it Safe to Transfer Money to Overseas Trusts?

1. It took stocks only six days to fall into correction, the fastest drop in history – CNBC – “The S&P 500′s swift drop marked the quickest 10% decline from an all-time high in the index’s history. The speed of the decline over the past week even beats the Black Monday plunge in October 1987“
2.  Why the Coronavirus inverted the Yield Curve – Pensford – My initial thought was that the market is overreacting to the coronavirus news.  “Classic flight-to-safety-knee-jerk-overreaction, rates will rebound if we can get a grip on containment.But the traders I spoke with were legitimately concerned about the long-lasting effect.  Sure, the 35bps drop in the last few weeks was re-positioning to avoid getting steamrolled in the event the news got much worse.But longer term, the virus has the potential to pull the global economy into a recession.”  
3. Specialty Grocer Earth Fare to Close All Stores and Liquidate Inventory, Files for Chapter 11 Bankruptcy – REBusiness – “Most of Earth Fare’s locations are near a Whole Foods, Trader Joe’s, Sprouts and/or a Fresh Market,” says Beitz, whose firm operates an online platform called Planned Grocery. The app maps the real estate locations of all grocery stores in the planning, development and operating phases.
4. Industrial Outlook for 2020-2021 Remains Strong – CPE – “Dallas is in growth mode due to many factors, such as strong population growth, a friendly business environment, low operating cost compared to other gateway markets and limited regional competitors,” local industrial broker Nathan Orbin, Cushman & Wakefield executive managing director. Net Lease
5. Investors Still Value Dollar Stores – CPE – “Dollar General has announced 1,000 new stores in 2020, while Dollar Tree continues to focus on renovating hundreds of Family Dollar stores and growing in strategic markets.Currently, the average cap rate for dollar stores with 10 or more years of lease term remaining, that have been on the market 90 days or less is 6.16 percent. Logically, many of these current offerings are newly built stores, as they offer the majority of longer lease terms.”
6. Mortgage Rates Near 3-Year Low – Forbes – decrease was largely due to investor uncertainty surrounding the coronavirus, as well as trade-related and geopolitical concerns. 
7. Cleveland Multifamily Report – Winter 2020 – Boosted by the ongoing revival of the city core, the metro’s rental market wrapped up 2019 on a positive note. – CPE – “Most of the new development targets downtown Cleveland; the area ranks as the largest jobs hub in Ohio and is expected to see a population”
8. Sherwin-Williams to Develop World Headquarters, R&D Center in Metro Cleveland for $600M – RE Business – The transition to the new facilities won’t occur until 2023 at the earliest, the company says. Sherwin-Williams previously launched a nationwide search for its new headquarters location before deciding to stay in Ohio, where it has been based since it was founded in 1866.
9. MBA Forecasts U.S. Economy to Slow in 2020 as Job Market Weakens – RE Business – His forecast calls for U.S. GDP growth of 1.2 percent in 2020, down from 2.2 percent in 2019, and for job growth to dip from a monthly average of 175,000 last year to 150,000 this year. The unemployment rate, which currently stands at 3.6 percent and is near a 50-year low, is expected to reach 3.9 percent by year’s end.
10. Newmark Knight Frank MFH Capital Market Report 4Q19 – 
11. Arbor – Q4 2019 Small Multifamily Investment Trends Report 
12. Trump’s 2021 budget proposal – Cut $5.6 billion from Department of Education funding—that’s a 7.8% decrease with changes to the ways we take out and pay back loans for higher education expenses. Positives:Eliminating subsidized Stafford Loans, which don’t accrue interest while you’re enrolled, Eliminating the Supplemental Educational Opportunity Grant, which typically goes to independent students or those whose families make less than $30,000 per year, Cutting $630 million of funding to the Federal Work Study Program, Reducing income-driven loan repayment programs to one option. Instead of paying 10% of your income, you’d pay 12.5%. Payment plans would last 15 years instead of 20, with the remainder forgiven, but graduate students would have to make payments for 30 years under income-driven repayment, Eliminating the Public Service Loan Forgiveness program. Positives:  Reinstating federal Pell Grant eligibility for short-term education programs and for some currently incarcerated students who are being released within five years, Increasing career and technical education funding by $900 million, Putting caps on graduate and parent loans with annual and lifetime limits. Parent PLUS loans for undergrads would be limited to $26,500. Graduate students would be capped at $50,000 annually and $100,000 total.
13. The U.S. is experiencing its longest economic expansion on record, besting the period from 1991 to 2001. (CNBC
    
14. The decade-long U.S. economic expansion has generated 20 million jobs. (New York Times
    
15. 3.4% year-over-year wage growth is the strongest in more than a decade. (MarketWatch
    
16. January 2020 had record job growth in the private sector: 291,000 new jobs, the largest monthly gain since March 2015. (Yahoo Finance
    
17. The U.S. hit the lowest unemployment rate in 50 years in 2019. (Whitehouse.gov
    
18. 2020’s Property Taxes by State – WalletHub – 
19. Personal savings: A look at how Americans are saving – Deloitte – While the personal savings rate has been trending upward, average savings—calculated using the Consumer Expenditure Survey—has been on a broad declining trend since 2010–2012 for consumers across income levels and for key working-age groups.

Starting with a coach to keep me accountable and compress “lying to myself time”

Don’t have any bigger plans for 2020? Any ideas?

After leaving the day job I am realizing that there is (was always) just me as the barrier. We all get the same amount of hours a say to create something more meaningful. Its unfortunate at most people have to spend at least 40 hours a week feeding the time clock.

No exceptions

Complete #LaneHack list

Passive Investor Accelerator & Mastermind

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Transcript:

0:00
Hello everybody is March 2020 and this is the monthly market update that I try and do every month for you guys a compiled ation of different news articles that I’ve come across this past month you guys can get all the show notes to this at simple passive cash flow calm slash green 11 podcast listeners can get access to the recording on the YouTube channel or go to simple passive cash flow comm slash investor letter if you’re checking this out later and you want to get all the past monthly updates there you haven’t heard of me before My name is Lane Kawaoka x engineer I have the simple passive cash flow podcasts on YouTube Spotify, iTunes I Heart Radio. This is a story about a dude named Lane he moved to the mainland and bought one place to stay and then one day he went try to rent them out. And then he became one really but still may.

0:59
So first headline here. And I think a lot of us have been on this roller coaster ride the past. That’s the past week I took this article a few days ago, it took stocks only six days to fall into correction, the fastest drop in history, though this was back on February 27. And it was the quickest 10% decline all time. And I believe it’s gone up a couple times and down once I mean, today, it went up 1000 points, just craziness. If you ask me, it’s all fake money, I don’t have any stocks. My stuff is all in things that I feel like I can control and cash flow, whether the stock goes up 5% or down percent, or 6% or 2%. The value is what it cash flows every month, but it’s been pretty cool watching this, the Fed dropped the rate by half a percent point you could probably say that’s partially due to the corona virus that’s out. I don’t really buy into the whole media thing. It’s not as debilitating as the flu is I believe that mortality rates on it’s like 2%, but I’m not a medical person, nor do I know what’s really happening out there, but as they know anything, the media typically throws it out of proportion. A little bit of hindsight on coronavirus. I have a couple charts in here showing what the SARS did a while ago. That was way back when in 2003. So pence furred said that the coronavirus inverted the yield curve and again my initial thought was that the market was overreacting to the corona virus news classic fight to safety knee jerk reaction quote here the traders I spoke to were legitimately concerned about the long lasting effect. Sure the 35 bps drop in the last few weeks was repositioning to avoid getting steamrolled in the event that news got much worse. And of course, this was only about a week or two weeks ago, but in the long term, the virus has the potential to pull the global economy into recession, just like any other black swan event that we’ve been talking about for the past few years China trade war Iran you name it the euro. So there’s a couple of charts here showing the decline of when SARS came into the picture with these charts are showing is that the SARS actually made an uptick after that it was short lived charts of SARS impact on the stock market was material but short lift so if history will repeat itself perhaps we’re going to look for a little bit of a bull market on the heels of this coronavirus endemic supposedly moving on specialty grocer Earth fair to close all stores and liquidate inventory files for chapter 11 bankruptcy. This is a health food store out on the east side of the country. This one’s showing one in North Carolina the most of their locations are near Whole Foods Trader Joe’s sprouts are fresh marks. So they’re kind of just getting gobbled up by their competition, but it’s showing how a lot of these other competition is pretty fierce out there even with something that’s traditionally been thought of as an emerging market which is healthy supermarkets. CPE says industry outlook for 2020 to 2021 remains strong Dallas is in growth mode due to many factors such as a strong population growth, a friendly business environment, low operating costs compared to other gateway markets and limited regional competitors. And I think if you’ve been listening and hearing to the market, you know, this is sort of Captain Obvious news. Dallas is obviously one of the frontrunners in terms of growth, but you dig a little bit deeper and if you’re actually trying to find deals there, it’s probably banging your head against the wall or pulling your hair out whatever you do to cope with things you know, everybody knows about it, right? So as an investor, you want to go where the action is at yet you want to stay away from where all the frenzy is, too. So the interest rates have been coming down. As we all know, Forbes is saying the mortgage rates near three year low decrease was largely due to investor uncertainty surrounding the coronavirus as well as trade related and geopolitical concerns. As I said earlier, the Fed dropped The interest rate half a percent, which is pretty big movement, normally they’d like to move it in terms of quarter points. And I think when everybody hears the bad news, they automatically think that they should probably look at refinancing their mortgage. But that’s not always necessarily true. The feds rate it sort of is correlated with the Treasury, but it’s not always but this time when they did drop it half a point, it did drop a treasury, so that impacts the mortgage rates and I locked in a big deal today with him closing so I think we got kind of lucky there. We got like a 3.5% on a commercial loan to pretty awesome, but I think people get a little bit too excited. I mean, 3.5% 3.754% I mean, who really cares? I mean, it’s it really doesn’t make too much of a difference when you run the numbers and you run out of deal five, six years, but it sure helps. Nice. We get lucky.

5:53
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6:21
Check out my article about passive

6:22
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7:23
Well, that’s a like a report from CPE talking about cleaving here cleaving multifamily report boosted the ongoing revival of the city core. So this is an example of like, you have to look at it from a submarket viewpoint, I think a lot of people will look at places like Birmingham or Cleveland. And you know, one of the first things you should look at is the population growth or where’s the population going? And that’s one way of doing it, but you really got to look at it a little bit deeper, and you got to look at on a sub market. So in Cleveland, what’s happening is that the downtown area is getting most of the new development whereas the suburbs are kind I’m struggling a little bit. So CPE says here most of the new development targets downtown Cleveland, the area ranks as the largest job hubs in Ohio and is expected to see a population growth. And I followed that up with another Sherwin Williams to develop world headquarters in Cleveland. The transition to the new facilities won’t occur until 2023 at the earliest, and they previously launched a nationwide search for their new headquarters before deciding to stay right at home in Ohio, where it’s been based since 1866 news from Las Vegas we have several articles about some of the older hotels when I mean older Oh, what was it like Carnival one, the ones that are maybe a decade or two old but they’re finally going to make a what I would call Class A hotel. And the reason why I look at this stuff is you know, just I’m not interested in hotel investing, but it’s interesting to see another asset class how they cycle through assets and how and when I say it gets older, some other things Group buys it maybe it does a little bit value add and then they take it down and then these new properties come up so dream Hotel Group is opening a 450 room luxury hotel on the Las Vegas Strip This is dubbed dream Las Vegas the project is looking to open in 2023 course are gonna have a rooftop pool deck bar lounge, two restaurants, two additional bars, gaming floor, everything that you would probably want in a level hotel. You guys are probably asking where is it? It’s going to be located across the street from the Mandalay Bay Resort and will be one of the first hotels seen from the iconic Las Vegas site property will be situated two blocks away from the new Allegiant stadium the future home of the Las Vegas Raiders, maybe Tom Brady will go there. Who knows. So already business reports that NBA forecast the US economy to slow in 2020 as job market weakens, and I always just put these articles in here, you know, these are all commentary, and you’re just making wild guesses in the sky. And I like to try and put both good articles and bad articles. But they have a point sometimes. And sometimes these predictions never happen. But again, the media is trying to sell news articles. So for those of you guys who are looking on the screen, we are showing the trend from 2018 1920 and prediction 2021 2022 of GDP growth, which is dipping this year in 2020, which should come right back up in 2021 and 2022. Inflation is holding pretty steady at 1.8 to 2.2 2.4%. Across the five years unemployment again pretty steady at just under 4% Feds funds rate it’s expected to dip down this year but come back up to where it was in 2018. And the 10 year Treasury and the 30 year mortgage rates are sort of fix. They kind of follow the Fed funds rate they’re calling the 30 year mortgage to be 3.7% this year. And go up to 3.8% next year and then up to 4.1% 2022. And this is pretty consistent with what I’m thinking I think 2020 will be a little bit of a weakness or take a breath year pretty sure Trump is going to win whether you like it or not, I don’t care personally, and then we might be in for another few years of a nice Bull Run after this is kind of my prediction took this excerpt from the Newmark Knight Frank multi family housing capital report from their 2019 fourth quarter report. Usually these things are just a bunch of words and blah, blah, blah, blah. So I’ll go over the highlights here are the sales volume, they reported that investors gravitated towards markets with a strong combination of yield and growth prospects. Yes, not too insightful. There’s kind of like obvious right in terms of cap rates, national multifamily cap rates compressed eight basis points year over year, which is nothing although cap rates increased six basis points year over year in major markets a surge of investment activity in non major markets cause yields to fall 12 basis points the rest I’m not going to read because it’s not doesn’t seem like too much of a news you guys can check this out on the YouTube channel if you guys are so inclined to read into it Arbor who is a direct lender and we use arberg for our deals, you can go through any broker, but those brokers typically don’t add any value and it just makes more sense to go straight to the source which is our bro who deals the Fannie Mae and Freddie Mac large commercial paper. So in their 2019 fourth quarter small multifamily investment trends report which are smaller multifamily apartments, I probably say and like the 20 to 100 unit ban. They’re saying that according to The Wall Street Journal’s October economic forecasting survey, only about 14% of economists expect the US to enter into recession in 2020. Compare that to when they tested in October 2019 when the share was roughly 48% sense. So what they’re saying here is the economists are sort of backpedaling, and the 48% of them call the 2019 recession. And when it didn’t happen, no, only 14% of them are calling it for 2020. And they put this on a graph what the survey was in 2019 and 2020, which, again, is horrible data, right? It’s just a survey Who the heck knows, right? But it gets these people are a little bit more insightful, I guess. But it’s still just opinion. But I think what you’re just seeing is everybody wants to look like the smartest guy and cause a recession. But when it doesn’t happen in the year just backs up to the next year. Now it’s in the next year. Oh, it’s in the next year. So I think that’s what you’re seeing in this article. Again, not too much news. But sometimes I’ll put some of these bad news articles in here just to pointed out again from arbour in that same report, they are graphing the spread between small multifamily cap rates and the 10 year Treasury yields through fourth quarter 2019. And this is why we do it folks. This is why we invest and use leverage because as investors, you’re making the difference between the spread between the cap rate and the your interest rate, which is basically the 10 year Treasury. So if you look back from 2009 to now it’s there’s always been about 300 to 500 points spread, it’s gone up a little bit, it’s gone down, but it stays pretty consistent. And I think this is one of those absolute truths in the world where this is the way the world works. And this is why I’m not too concerned where interest rates go, because if interest rates go up likely so well, the cap rates again, as an investor, I make my money off of a spread, which is typically a consistent 500 to 300 points spread, and then I apply leverage on that, too. If you’re thinking four to one, you multiply this by four. So I’m sure all of you have been keeping up with the proposed budgets from Mr. Trump, but if not, I took a little excerpt on the proposed budget which you can get online at OMB I don’t know why you would would unless you don’t have a day job and you don’t have anything better to do. But he is proposing a 5.6 billion cut from the department of education funding. What does that mean? That’s a 7.8% decrease. So I’ll go over the negatives and some of the positives here the negatives are eliminating subsidized Stafford loans. And those are the ones that don’t accrue interest while you’re enrolled. They’re going to eliminate this supplemental Education Opportunity Grant, which typically goes to independent students or families who make less than 30 grand a year, they’re cutting the 630 million of funding to the federal work study program, reducing income driven loan repayment programs to one option instead of paying 10% of your income you’d pay 12.5% payment plans would last 15 years instead of 20 with the remainder forgiven, but grad students would have to make payments for 30 years under income driven repayment and they’re eliminating the public service loan forgiveness program. Some of the positives are there reinstating the Federal Pell Grant eligibility for short term education programs. And for some currently incarcerated students who are being released within five years increasing career and technical education funding by 900 million in putting caps and graduate and parent loans with annual and lifetime limits Parent PLUS loans for undergrads will be limited to 26,500. graduate students would be capped at $50,000 annually and $100,000 total who knows how this legit plan will go and be changed. But that is the way that Trump’s kind of got his education budget lined up, should he get reelected wallet hub. These guys are really good at making these cool color graphs comparing state to state but this is actually very misleading. So what they did here is they took the 2020s properties taxes by state and I guess it’s kind of good because they have it a sort of an interactive table where you can click on the effective tax. Real estate tax rate here and number one lowest is Hawaii at 0.27%. Number two is Alabama at point four 2% effective tax rate on the real estate you know, you gotta use your brain here because obviously Hawaii’s average medium price is probably about three or four times that of Alabama. So you have to really look at what is the annual taxes on a median home that next column over the annual taxes on a $200,000 home. To me that column is meaningless because that’s a mansion in Alabama. And you frankly can’t find a 300 square foot house in Hawaii for that much state median home value, as you can see there $130,000 in Alabama to $587,000 in Hawaii, but for those of you in Hawaii, that’s the price of Paradise live where you want invest where the numbers make sense. I actually like the fourth column here annual taxes on home price at state medium value. I think that’s where you’re starting to see where the true month numbers are being shown because a lot of times like our Facebook group for example, someone will chime in and say well you know, Alabama has low taxes right and here the effective tax rate is the number two lowest in the country but you got to go on the based on the value so like another one is a famous one is like Chicago, Chicago has really high taxes and sort of high values so that can really skew your numbers. Again, I would just recommend if you’re looking at rental properties, just put into the analyzer and see how the numbers turn out and compare that number at the bottom of the spreadsheet which is anticipated cash flow on your Performa we kind of had a lot of bad news. I wanted to put in the side with some good news. And these are all five headlines of Hey, look on the brighter side guys, it’s not all doom and gloom. First one here by CNBC. The US is experiencing the longest economic expansion on record best seen the period from 1991 to 2001. Some guys probably like Whoa, what’s gonna end soon? Well, you should enjoy the good times right now. New York Times says the decade long us expansion has generated At 20 million jobs market watch says 3.4%. year over year, wage growth is the strongest in more than a decade. Yahoo Finance says January 2020 had a record job growth in the private sector largest monthly gains since March 2015. And the Whitehouse. gov was always trying to toot their horn does the US hit the lowest unemployment rate in 50 years in 2009. Of course, there’s a lot of questions whether how do you take the unemployment rate? Is it legit, but right now things are pretty good. I mean, people are working and I haven’t really seen any indicators saying that larger companies are laying people off decreasing their orders. And in my mastermind, I’m in somebody predicted the 2008 meltdown in there and that person was like a big time builder. And they were saying that they knew it was coming down when the foot traffic that we’re checking out those new bills just weren’t there. The demand just dried up and that was when they knew was the end and that’s why it’s been 25 thousand dollars to go to groups like that because they are closer to the action. And hopefully I can react better than the average bear out there by having that information. And I don’t want to just sit on the sidelines. I know I say this so many times, but it’s because I talked to so many new investors, you know, they’ll book every intro call with me, we’ll chat and a lot of investors will have this mindset of like, well, it’s the top of the market, I’m just gonna hold back. And I think that’s a huge mistake, especially if your net worth is under half a million dollars, you need to go out there and swing the bat and go into equity deals and grow your network. You might be hearing guys that are four or 510 million dollars and above sitting on their high horse saying they’re not doing anything right now. Well, guess what, they can do nothing. They can live off one 2% off that large portfolio and not do anything and I ultimately think is just newer investors just kind of shooting themselves in the foot. So Deloitte did a report on the personal savings rate of Americans. And they said while the personal savings rate has been trending upward average savings calculated using the consumer actions expenditure survey has been on a broad decline since 2010 2012. for consumers across income levels and for key working age groups. So we got a little graph here showing how different groups are saving their money, which ultimately, I think that’s the most important statistic to keep, you know, whenever I have a console with an investor, yeah, like to know how much you make and how much you spend, but I ultimately want to know how much you net at the end of the year again, most investors in our group, they’re able to save maybe about $30,000 a year and other ones that are a little better making able to see $50,000 a year that means they might be able to buy two rental properties a year not saying they would, right, but you’ll probably go crazy after you get five or 10 of those turnkey rentals, but they’re exponentially growing their portfolio. So this graph is kind of showing. One thing I pick up on is from 2008. You know, everybody got shell shocked and the recession brought people back to frugal ness. And I think there was a hashtag trend out there where he was cool to be frugal. Right, I read another book and they coined this term called the Great forgetting. And they say, people will normally forget how things were in like eight to 12 years. And I think that’s what’s going on here. Maybe people got really frugal 2008 to 2009 1011 12. But you’re seeing that the clients start to happen in 2013, especially in the top 20% of folks. And the other takeaway I have from this graph is it’s just a little bad that the top 20% have so much disposable income, and that’s why they you know, they go into the all these deals, and that’s great, right, but the people who are in the 8060 to 80 percentile 40 to 60 percentile 20 to 40%. percentile, like they just are not able to create any net at the end of the year. In fact that people that are below 40%, they are negative, they’re they’re like going into debt every single year. So some new podcasts that I have created this past month are up here we did some discussions with asset protection. If you guys think lol C’s are the end all be all well that’s just where it starts and then people that are 1,000,002 million dollar net worth and above should probably be looking into irrevocable trusts and potentially even international trusts. We had Marco Santorelli of nerado who talked about Top Things ignorant investors do and again one of those gonna shoot themselves in the foot not doing anything so in the top markets to invest in 2020 in all these are short YouTube clips that have created in the YouTube channel so if you guys want to go there and share it with friends, I’d appreciate it part of the Richie’s land conservation easements what interest rate to expect from private money lending don’t invest in short term rentals until you understand this, where’s the best marketing platform for short term rentals. Another big one is how is the politics and rent control affect where you should invest? I just stick to the red states simple passive cash flow right big changes to your retirement accounts. And if you didn’t hear what they did with the secure act better, go and check out that article on how the secure x screwed millions out of people’s retirements and do I need asset protection on my retirement accounts was answered in that short form but do you guys have any more questions go to simple passive cash flow calm slash question and type it in there if you leave your email we’ll try and get an answer back to you for a little bit of what I’ve been up to. And again, these all come from the Tony Robbins six needs versus growth so I started to employ a coach to keep me accountable and compress time for me and basically eliminate the time that I lie to myself continually I’ve been doing this for about a month and already it’s just been totally worth its money. I think consider a accountability partner for your selfish you can’t afford it. But yeah, I mean, at the price I pay for this thing pays for itself like four or five times over there, like the emotions that you have the thoughts you having is a sign it’s your job to turn that sign into action. And most times in the past I would just like ignore it right. But as I tell somebody coach who has skin in the game in me being successful, they kind of tease that out and they don’t let me just be okay with contribution. So I actually had a call, I’m trying to work out something where we can contribute to some kind of a charity. I think if the URL is like simple passive cash flow, calm slash charity, you can see the couple projects we’ve done in the past. But my problem is, like, I don’t have the time to find good causes to give to and I don’t want it to just go into oblivion, like a Red Cross thing. I’m not saying it’s a bad cause, but I’d rather be a little bit more. I mean, I’m totally acting like a spoiled rich person, but I want to have control over it. I want to designate where it goes. And one cool site that I found was donors choose so I had a consult with them today figuring out what we can do as a group to pull our money together and something where I can go in there maybe an hour a month and select individual projects. And what’s cool in there is like my wife’s a teacher. So we did this with her class. Last year, and quite frankly, she can’t spend all the money. I mean, there’s just there’s a lot of need on this other site, other teachers but it’s really cool because the teachers they give you feedback, the kids write you letters and they give you like a monthly report on what’s happening so you really feel like you’re making a difference but I want to go in there and pen select projects that are aligned with financial literacy education. Somebody wants to buy a seesaw or some kind of I think it was like a canoe or something. I’m like yeah, we’re not gonna do that and that’s where I’m going to get involved try and pick some of those projects but if you guys have something else or somebody else in our who wants to take the lead on being the point person for selecting these type of charities, let me know number three here significance again, I working with that coach and something that I’m realizing working with them is I need to try and find a way to make a bigger impact whether it’s for ego or what I feel that I need to help spread the word of financial freedom and investing the right way too many people are just misled By the wrong things like paying off debt, I mean, if you pay off debt, you’ll never buy assets that grow your net worth. That’s exactly what they want you to do if there wasn’t dead people would never own their houses not saying that buying a house to live in is a good idea. Number four, how did I create uncertainty in my life? Because sometimes you need to get out of your comfort zone. I don’t have any bigger plans for this year. So if you guys come up with ideas that will stuff for our group to do I don’t know I’m maybe I’m just a little tired. Since we had the QE three in Hawaii a few weeks ago. How did I create some certainty? The QE three was really cool. And I’ll put some pictures on it here. That was us. And that was how I fulfilled that last love and connection because people is what makes all the difference. But people came over for probably about four days, five days actually, if you count the first night, and it was a lot of fun. And it’s something I think that I’m just speaking for myself. Something I’ll probably remember forever. It’s not often you get a group of 30 to 55 year olds in a room are out hiking out on the beach for a sunrise. out to a luau out playing some pickleball and escape rooms where you can do something fun with first total strangers but really start to bond over some of the like mindedness of the financial freedom aspect. And you know, what do you do to build a legacy? So that was something that I want to do it more in the future. And I am thinking this slight mastermind thing might be a annual event ran more like a family reunion than a dozen other real estate events. So maybe Martin Luther King weekend might be a good time to do it. This time was a little weird with Valentine’s Day involved on the first day, I had to go to 90 degrees. So that kind of took a lot of energy. Yeah, maybe mark your calendar might be a little premature of Martin Luther King 2021. Let me see you guys in Hawaii, some of the resistance and barriers after leaving my day job. I’m realizing that it’s just me is the barrier and it always was and people always say well, you must have a lot of this extra time to do what you want. And I honestly say that I probably get almost the same amount done. The day as I did when I was working a full day job I might get like 10 20% more done without the day job but I think it’s there’s a lot less stress a lot better quality of life and it just brings perspective that people especially for the people who don’t like their day jobs most people have to spend at least 40 hours a week beating the time clock in for what right yeah, you make some good friends at work but if you didn’t have to go to the job would you still hang out with those people? Maybe Maybe not. So if there’s any way I can help anybody get out of financial freedom you know, that’s what I’m trying to wrap my head around how do I kind of help the most people get out of this a quick technology tip wrote a quick article on how do you create an instant note without opening up the lock feature on your iPhone every single time I just get so many ideas and I’m sure a lot of you guys get so many ideas and just trying to capture it is one of the most important things especially if you’ve read the whole GTD getting things done methods I finished up this willpower doesn’t work which actually thought was wasn’t a bad book. I thought like it was just had a lot of different strategies. there and I think you’ve just listened to it not at two x speed or three x speed, you just listen at one x speed that might incite some habit changes or new processes you can put into your daily life. So I just wrapped that up and I’m starting to read the go giver. Now, I think the premise is helping others get to where they want to be, and the rest should fall into place. And I’m starting the book club. So what we’re going to do here is every other month I’ll be the last Saturday of the month, every other month, we are going to do a webinar or a meeting and whoever wants to join on you know, you don’t have to be in the passive investor accelerator mastermind and just jump on and hopefully you read the book, but the goal here is to read five or six books a year and you guys can join there at simple passive cash flow calm slash lien hat and click the button register with zoom and you can join us on all the BI monthly calls we have on the books so if you guys go there, sign up and or you go you got two months, I think the next one, I’ll have it is April 25, which is Saturday where we’ll be going over the good giver. So you guys got two months to read it though, but it gets started now. And if you haven’t checked out the passive investor excetera mastermind, we are pretty much done with the first year of it in existence, some investors are phasing out of it. And that was my goal, right? Get them in, get you guys up to a point where you guys can analyze deals and be able to create your network and build some friendships. And if you guys want to get out, right, it’s not one of those things that you need to be in forever. Maybe you need to take a break. Maybe you can come back later. But yeah, we got some openings there. So if you guys want to check that out, go to simple passive cash flow, comm slash journey. So somebody asks, How do you find or choose your coach? So I just went through the Tony Robbins, folks, I can connect you with my guy, but yeah, I mean, supposedly you do the disc exam and this personality test and they fit you with somebody. I don’t know if that’s really how it is, but I Like as a speaking as an entrepreneur, everybody’s an entrepreneur these days, right? You don’t know who’s legit, who’s just faking it. So I just want to go to some brand that was sort of okay. And I’m sure Tony Robbins brand and or directory of coaches is sort of, okay, maybe even pretty good. Who knows, but I just didn’t have the bandwidth to go find a coach. And some people recommended one rule. If you want to really go and roll up your sleeves and go find your own coach, a recommendation that was given to me is you always go off for a referral. It’s just like, Oh, right, like that’s what we do with property managers, brokers, everybody, right, syndicators, it’s always offer all and then they said, well try it out. You can do a few sessions with somebody another session with somebody else and just try it out. See how it works, because that coach may not jive with you, or you may really resonate with them. And another question I had was, well, does this person need to run a podcast and be in real estate and do this stuff I do. And the conclusion that I came up with that you may or may not agree with is that No, they don’t. need to know anything about what you do, they don’t even need to know what a rental property is, or they don’t. Their role is to apply a framework of getting results with you and keeping you accountable and calling you out on your BS. And if they can do that, they probably do 80 to 90% of what you’re looking to do. So a thing that’s just my opinion is they don’t really be doing what you’re doing. I think if you’re looking for that type of person, you’re looking more for a specific business coach. Thank you for listening, and we’ll see you guys next month and be sure to tell your friends about the podcasts and have a good evening everybody like

33:41
this website offers very general information concerning real estate for investment purposes every investor situation is unique. Always seek the services of licensed third party appraisers inspectors to verify the value and condition of any property you intend to purchase. Use the services of professional title and escrow companies and licensed tax investment and or legal advisor before relying on any information contained here and information is not guaranteed as an every investment there is risk. The content found here is just my opinion and things change and I reserve the right to change my mind. Above all else, do your own analysis and think for yourself because in the end, you’re the only person who is going to look out for your best interests.

Transcribed by https://otter.ai

Dear investor,

I hope you are not sick with the Corona-Virus unless you have a lime in it… Ok bad joke just trying to be funny cause everyone seems so sensitive about it. And I’m a little sad about Kobe dying too 🙁

So what would any other investor do who wears Kobe shoes to play basketball but buy into an oil deal. 🎥 Video

After watching the latest Richard Duncan recordings I am paying attention to the corporate debt story. But I don’t buy his line, “if China wins the AI race, as it has won the 5G race, then China will rule the world.”

Talking with other high level family offices it’s funny how they say crowdfunding websites is the place to dump deals you can’t get funded by fools on the internet.

Earlier this month there was some de-escalation between the U.S. and Iran but later the Coronavirus scare brought more volatility to the markets. Why I mention this I don’t know because I don’t really care cause I focus more on cashflow investing but you guys seems to be interested.

Links to past PDF slidedecks.

1. Financial Freedom for Dentists – https://simplepassivecashflow.com/dentist/
2. Private Money Lending Top Mistakes – https://simplepassivecashflow.com/lendmistakes/
3. When is it time to Retire? Accredited Investor Live Coaching Call – https://simplepassivecashflow.com/when-is-it-time-to-retire-accredited-investor-live-coaching-call/
4. Dec 2019 – Borrowing Standards – Rental Income – https://simplepassivecashflow.com/dec2019lending/
5. Habits – https://simplepassivecashflow.com/habit/ 
6. Wealth Management Tips from Centimillionaire Family Office Advisor Richard Wilson (184) – https://simplepassivecashflow.com/familyoffice/

1. Top Multifamily Markets in 2020: Small Metros, Suburbs – “As a result of slower economic growth, apartment demand is projected at 240,000 units in 2020, approximately 20 percent less than 2019’s estimated 300,000 units,” CBRE’s market outlook for 2020 shows.“
2. SECURE Act Summary
   • Expands the ability to run multiple employer plans for plan years beginning after December 31, 2020
   • Safe Harbor Rules Simplified for plan years beginning after December 31, 2019
   • Long Term Part-time Workers permitted to participate in 401(k) plans, which applies generally to plan years beginning after December 31, 2020 
   • 3 consecutive 12-month periods the employee has at least 500 hours of service
   • Repeal Maximum Age for Making IRA Contributions which applies to contributions made for taxable years beginning after December 31, 2019 
   • Increase Age for Required Minimum Distributions to 72
   • Applies to distributions required to be made after December 31, 2019, with respect to individuals who attain age 7012 after such date

   RMDs after Death under the Secure Act

   • H.R. 1865 – Sec. 401 Modification of Required Minimum Distribution Rules for Designated Beneficiaries
   • Basically, requires all IRAs and Qualified Plans to be distributed within 10 years of death
   • The Senate version had a 5 year limit

   RMDs after Death under the Secure Act

   Exception to 10-year rule for certain beneficiaries:

   • Surviving Spouse
   • Children under the age of majority (but only until reach age of majority, then 10-year rule)
   • Disabled
   • Chronically ill
   • Another individual who is not more than 10-years younger
3. Tacked onto last law to keep the government toNo more stretch IRA (including rotes) – only have 10 years. So much money disappear from average Americans.Going after inheritance tax next? Back to Clinton days where it was 600k and over. Maybe do a roth conversion? Or get rid of all retirement funds like how I have been advocating for for a couple years now – SimplePassiveCashflow.com/qrpYou can contribute to qrp for last year until you file for next yearYou can now have annuities in retirement plans – #Lobbistroth conversions –Charitable retainer trust – asset income goes to kids then goes to charityNaming a charity as a beneficiaryLife insurance

   A few others

   Note: I personally don’t do retirement accounts because I want to take advantage if bonus depreciation

4. U-Haul Migration Trends: Top Growth Cities of 2019
   1. Raleigh-Durham, N.C.
   2. Kissimmee, Fla. 
   3. Ocala, Fla.
   4. Round Rock-Pflugerville, Texas
   5. West Palm Beach, Fla.
   6. Port Saint Lucie, Fla. 
   7. Bradenton-Sarasota, Fla. 
   8. Coeur D’Alene, Idaho
   9. Manhattan, N.Y. 
   10. Harrisburg, Pa. 
   11. New Braunfels, Texas
   12. Auburn-Opelika, Ala.

   13.Huntsville, Ala.

   14. Spring-The Woodlands, Texas 
   15. Boca Raton, Fla.
   16. Henderson, Nev.
   17. McKinney, Texas 
   18. Temecula, Calif. 
   19. Fort Lauderdale, Fla. 
   20. St. George, Utah
5. Rent Control Makes a Comeback as Housing Crisis Grows – Three states passed new laws in 2019 limiting rent increases, others are considering their own measures and housing is set to be on the agenda in the 2020 presidential election. – [Why are you buying in Blue states]
6. Markets with largest rent growth 😁Markets with largest rent decrease 🙁
7. Amazon’s 1.4 MSF Florida Project – The e-commerce giant tapped Seefried Industrial Properties to construct a new fulfillment center, which marks the first major development at the new Portland Industrial Park in Deltona near Orlando. The company will create more than 500 new full-time positions at its new Deltona fulfillment center.
8. 
9. Howard Hughes Spends $565M in Houston – The portfolio includes the former headquarters of Anadarko Petroleum and ConocoPhillips, plus a warehouse and developable land.
10. Seattle Office Report – Fall 2019 – Strong market dynamics continue to support the metro’s rapid expansion, with a saturated tech sector extending and shaping the current real estate landscape.
11.  
12. Largest Employer by State
13. Chinese Investment in U.S. Commercial Real Estate Is Plunging – Chinese investors put 76 percent less money into U.S. CRE year-to-date through September than in 2018.
14. US Monthly Volume and Pricing Trends by Sector – Ramping up activity in the U.S. apartment and industrial sectors over the last five years while moving away from the retail sector.
15. The Impact of the Next Recession on the Multifamily Market 
16. 
17. Macy’s Store Closings – Nearly 30 of the retailer’s 641 locations will shutter following a moderate decline in comparable sales through the holiday season. 
18. 75 Million Ponzi Scheme – The Income Store
19. Retail Property Taxes Likely To Rise – Pier 1 announced it would close up to 450 of its stores.
20. Electronics Stores Join Brick-and-Mortar Exodus – Audio equipment giant Bose will close its remaining 119 retail stores in four markets including the U.S.
21. Despite Missed Sales Projections, Discount Retailer Five Below Will Open 180 New Stores This Year
22. The median age of homebuyers is now 47 
23. Co-Showering & Multi-generational Houses?!?
24. Hilton Launches New Lifestyle Brand – The hotel firm has already secured 30 commitments for its latest offering, Tempo by Hilton, which is designed to appeal to the ambitious modern traveler.
25. Four Strategies for 2020 Success in Class B Multifamily Space – New markets, Tech, Employees, Regulations
26. Housing market falling short by nearly 4 million homes as demand growsThe 5.9 million single family homes built between 2012 and 2019 do not offset the 9.8 million new households formed during that time, according to an analysis by realtor.comEven with an above average pace of construction, it would take builders between four and five years to get back to a balanced market.“Simply put, new home starts are not keeping pace with demand. Homebuilders have a mountain of opportunity, but a big hill to climb,” said Javier Vivas, director of economic research at realtor.com
27. Millennials’ share of the U.S. housing market: Small and shrinking 

Getting to know my investors better. Tours and Hawaii mastermind – SimplePassiveCashflow.com/hui3

Doing the first multi day event in Hawaii.

Wow January is OVER

No exceptions

Complete #LaneHack list

Passive Investor Accelerator & Mastermind

-Mostly Accredited high paid professionals to connect with personally and build your own network (currently 45 members)
-27 modules of content in a closed membership site
-Bi-weekly Zoom Video calls (25+ on-demand recordings a year plus all library of past calls)
-Now with a membership coordinator check-in’s to help facilitate what you are doing and connect you with the right people in the group (if you are shy)

Learn more and apply – SimplePassiveCashflow.com/Journey

If can do me a favor… If you get a chance people review leave a review for the podcast on iTunes (https://podcasts.apple.com/us/podcast/simple-passive-cashflow/id1118795347) and email simplepassivecashflow.com to a friend.

Transcript:

0:04
When I got smart and so my primary residence to start investing investments that actually made sense who I needed a place to diversify quickly as opposed some money market or some high reward checking account Let’s face it, turnkey rentals are cool and syndications are great but they don’t come around often I stumbled upon the American homeowner preservation fund the owner George new marry once apartments indicator to is now sponsoring the podcast is fun cuts the middleman out to crowd fund the solution to the mortgage crisis in America they empower you to fund the purchase of distressed mortgages and earn returns at smoke any other passive fun if you find something else better out there, let me know oh yeah, they work with families to keep them in their home after buying an underwater note at a huge discount. It’s an opportunity to make an impact on families and communities while earning returns. start investing with a zoals hundred bucks in invest in hp. com if you want the free burn zone book please send me an email at Lane at simple passive cash flow calm

1:03
This week we are going to be doing the 2020 February edition of the green sheet investor letter you guys can check out all these letters and past videos at simple passive cash flow calm slash investor letter. And make sure you check this out on the YouTube channel to make a bunch of slides. And if you’re listening to this on the podcast version, probably going to want to check out a lot of the graphs that are put in there to kind of brings another dimension to this. But however you guys want to consume this podcasts YouTube channel, it’s all fine with me. And those of you who are high net worth passive investors

1:36
still using a 401k or self

1:39
directed IRA, you’re doing it all wrong, man. I don’t have any retirement accounts because I would rather pay taxes on it today when my income is less than in the future. Just very counterintuitive. People will say that you’re going to make a lot less in the future, which as you know, we do things a little bit differently at simple passive cash flow, why I’d like to not use a timing plan or what we call requalified money is that I want to avoid the unify and you bit tax now the one way you can do this VA retirement con is called a QR p or qualified retirement plan you guys can check this out at simple passive cash flow calm slash qR P and also fill out the form there and you can get a free book sent your way to learn more about it and here is the show is

2:20
a story about a dude named Lane he moved to the mainland and bought one place to stay and then one day he went try to rent them out

2:28
and then he became one real investor.

2:33
It is February 2020. This is the monthly market update or I collect a bunch of news articles that I’ve sifted through. You guys can find the show notes on the sun at simple passive cash flow calm slash green 10 that’s with a one zero green one zero. And I do this every month recapping what I’ve been up to at the end and some of the biggest news headlines that I’ve been seeing that I think in pack macro and some Micro markets out there. Again, all these will be posted on the YouTube channels if you guys are missing out on the audio or the video version, guys just checking on this on the audio version, you guys can check out more there too. So if you guys don’t know who I am Lane Kawaoka, I still have my PE and you guys probably found me through the simple passive cash flow podcast. But if you guys haven’t already joined our Facebook community online, probably find it by going through simple passive cash flow. We is what we call ourselves. So biggest news that happened this month case you didn’t know it, but they signed the secure act which basically Rob millions of millions of dollars and millions of Americans without you guys even knowing. So let’s break this down. What is the secure act here? So you remember when the government was kind of going bankrupt and they needed to come up with some new laws to not have that happen while this is the byproduct of it. And what it is, is a way of generating income for the government, which is typically not very good for us. Americans is In a better way, kind of the deal for us got worse. So here’s a few bullet points it expanded the ability to run multiple employer plans for plan years beginning after December 31 2020. Had safe harbor rules apply for plan years beginning after December 31 2019. Long term part time workers permitted to participate in 401k plans which applies generally to plan years beginning after December 31 2023 consecutive 12 period the employer has at least 500 hours of service a repeal the maximum age from making IRA contributions which appeals to contributions made for taxable years beginning after December 31 2019. Increase the age for a minimum required minimum distributions which we call it rmds to 72 and applies to distributions required to be made after December 31 2019. With respect to individuals who attained age 70 and a half after such You guys are probably sleeping, you guys are probably just like any other Americans probably didn’t pick up anything, nothing really popped up there. But here is there were some good things in there. Frankly, I don’t really care because I don’t have any retirement plans myself, I rather invest my money and take all the depreciation today and live off that today. So they changed the rule with rmds after death. So before they got rid of stretch IRAs, you guys can go all that you want. But basically what you were able to do is say your parents died and they had an IRA, they could give it to you and they would keep going stretch, but now they have this little nasty rule a year that basically requires all IRAs and qualified plans to be distributed within 10 years of death. So you got a limit. So if your parents die and you have this money, you got to spend it in 10 years, so the red flag should be going up. Everybody got screwed out there. The Senate version had a five year limit by the way, but it turned out to be a 10 year time horizon. There is a next Up to the 10 year rule for surviving spouse. So if your wife or your husband dies, they have the IRA that 10 year rule doesn’t apply. Also exemptions children under the age of minority. So basically, if you’re a kid and once you become an adult, I believe that 10 year old clients at that point, it doesn’t apply if you’re disabled chronically ill, and another individual who is not more than 10 years younger. So look at it from this direction the government wants to wants to harvest returns from us, the citizen, they want us to pay taxes they want. They want to get the money out of these silly retirement accounts that they promised everybody that they would have tax free, but at some point, they’re going to tax these things. And the government’s just sliding all this revenue up quicker. That’s essentially what’s happening here. So it’s a big, big deal. This is just a good example of how these tax laws can change. Back in the clinton days they inherited tax with way less, it was like 600,000 today their inheritance taxes. Super, super high. You know, that’s why you have kind of read government at this point. But if somebody else gets in there, these rules might change. And one of the biggest things in here is under the RM DS. The biggest exemption is a surviving spouse, they may just choose to get rid of that whole surviving spouse exemption, which means if your spouse passes away other than all that the heartache and the sorrow you’re gonna have to pay taxes on their estate, which I think is unfair, but hey, that’s like a one of the coolest byproducts of this is if you guys are doing the QR PS you guys can contribute up to when you file your taxes. So if you’re like me and all the cool kids filing your taxes in September and October, you can contribute to your to your P for the previous year, all the way up to that point, just like how you’re able to do for your Roth IRAs or IRAs, same kind of rules apply. So the secure act kind of open that up and then now you can have annuities and your retirement plans. So that kind of opens up a whole new door for those of you You guys, you know playing around with life insurance, Internet Banking concepts there. If anybody has any questions on this, feel free to type it into the chat, but I’m going to move on to kind of more rapid fire headline title is top multifamily markets in 2020, or the small metals and the suburbs. And they’re seeing as a result of the slower economic growth apartment demand is projected at 240,000 units in 2020, which is approximately 20% less than that of 2019 estimated 300,000 units CBRE are he comments. rent control is sort of making a comeback. There was real laws passed in late 2019. Limiting and rent increases. If you read into it. It doesn’t seem as bad I guess depending which side of the table you’re standing on right politically, but sometimes they’ll put in restriction where it needs to be based on some higher number that they’re really never get, I think is sort of fair. But regardless, I mean, if you’re investing in California, I don’t know why you arguing that or even any other blue state for that matter probably not getting the rental value of the 1% rental value ratios for anything that’s not a war zone property or C class property or worse. So I don’t know why you would be doing that the U haul release their top 20 growth cities for 2019. And this is something I tracked closely This is the U haul is which used to move around with when you are broke and you didn’t have any money. So it’s it’s a good indicator for what the blue collar workforce housing folks are doing when they have to move. A lot of the influx of people are in the Florida State Raleigh Durham, North Carolina is number one, Ron Rock, Texas is number for a lot of Florida ones in here, Cortland, Idaho Manhattan, Harrisburg, Pennsylvania. Actually, I don’t know if this chart is incredibly useful. I mean, its top growth cities I’d rather see in the more regions and states that’d be how I would use the U haul Report.

9:58
I’m super excited about new program. I’m rolling That’s going to reinvent scammy Real Estate education programs. So excited like Marie Kondo cleaning stuff up excited. Announcing my new mastermind program which consists of a closed members site with 27 packed weeks of content, plus bi weekly group video conference calls to us whatever half of the calls will be centered around granular investing tactics, and the other half will be holistic wealth building strategies that I have learned from the wealthy.

10:25
That’s 25 plus hours of group coaching and masterminding and a secret Facebook group too. I know what you’re thinking none another flippin Facebook group. Well, this one’s going to be different, more intimate, exclusive, and no cheapskates or shady vendors in it. I’ve been coaching individual clients over the past couple years and I figured out what you guys need in a way to provide it in a cost effective way. learn more, go to simple passive cash flow.com backslash journey and join for the first cohort fills up, an introductory pricing goes away.

10:59
Update online conservation easements This is more for the accredited folks who make over two to $300,000 adjusted gross income per year but for everybody’s entertainment what our land conservation easements so land conservation easements are a tricky way of getting a tax write off by designating a piece of land a land conservation easement, it no development can go there in the future by doing this, it becomes sort of a taxable donation. So just like how you take a bag of old clothes out to the Salvation Army, and you arbitrarily call that $500 but what you’re doing here is you’re taking a piece of land that has some nice environmental value to it like they usually put it around like chump will do this around his golf courses, and they’ll designated a land conservation easement. But the tricky thing is that they’ll like they have the value of land but then they’ll mark up some kind of like fictitious development plan to be basically get an appraised value of when you are five to 10 times higher than what the land is actually worth. So what guys will do is though and invest or basically donate 50 grand and it goes on a taxable donation, but they get like a five to one pop on this stuff. So for every 50 grand they donate, they get 20 $50,000 of deductions, not credits, deductions, but for a guy and, you know, making more than $350,000 a year, that’s a lot of money at 50 cents of every dollar of tax savings. The news is recently a lot of this has been getting a lot of unpopular attention, and it is kind of fishy. So investors are kind of in a holding pattern, how they’re doing this. If they really need to get the tax deduction. What they’re probably doing is just chancing it and doing it but they’re not being overly aggressive and they’re sticking to a boost ratio of five to one or less. So it’s kind of one of those things where you don’t want to be greedy, was it pigs get slaughtered hogs get fat so he basically buying charitable donations at 16 cents on $1 couple of charts markets with the largest rent growth year over year from November to November 2008 22,019 and the with the markets with the largest rent decrease I have these charts flip flop but the list you don’t want to be on these are the losers number one Midland Odessa number two Honolulu number three bathroom rage before Scranton and number five, Lafayette Louisiana and the winners a top five markets are number one Pensacola which went up 8.3% Phoenix Arizona went up 7.9% number three Huntsville Alabama went up 7.1% for is Las Vegas 6.4% and number five, Portland, Maine which we went up 6.3% I’m aware of all these markets of Pensacola was kind of a weird one. I got surprised by that one someone told me it had to do with I guess there was like a hurricane there a while back ago and now this is part of the bounce back. Most markets will just kind of get keep pace with inflation, maybe two to 3% a year more of the hot markets will be five to 8%. So these are hot markets here. Amazon’s 1.4 million square foot Florida project near Orlando is taken off. But don’t be misled by another Amazon fulfillment center. This one’s only going to have 500 new full time positions. And when you’re looking at a tertiary market, for example, Huntsville, 500 jobs, it’s nice right but not that much. Usually a bigger announcement from a major employer might be more like on the 1000 magnitude or higher one the few thousand jobs that’s a big news but I think you see a lot of these new sources for real estate they’ll say a search an employer, but at the end of the day, you really have to see what kind of what’s the numbers how many people are going there. And also what is the multiplier effect for like a Boeing or like a car manufacturing on you have a lot of the ancillary other providers like bait build other pieces of the car the airplane. I don’t know how it is with these Amazon fulfillment centers maybe if somebody sells snacks at the 711 or something like that but I don’t think you have a big multiplier on on that but I could be wrong realtor.com came out with their 2020 housing forecast and they are take it for what it’s worth right a bunch of realtors then again they do like to spend money on a lot of things like probably a lot of number crunchers and data peoples but they’re saying mortgage rates by the end of the year will be going up a little bit to 3.8% average median home price will go up almost 1% existing home sales will go down 1.8% and I believe that talking more about volume than pricing and then homeownership rate 64.6% and single family home starts which are new builds will be going up to 6%. And another site but I found from our friends@realtor.com are is that millennials make up over 46% of the mortgage rates. donations up from 43% last year according to realtor.com. So maybe the millennials are finally moving out of mom and dad’s basement and getting into the game. It’s about time we have some more news on that later. Another news headline says us monthly volume and pricing trends by sector. This is post setup at simple passive cash flow calm slash investor letter, and then you can drill into the February report. From there Howard Hughes spends bottom half a billion dollars in Houston and his portfolio includes the former headquarters of a narco petroleum and chemical Philips plus a warehouse and developable land. A Seattle office report says that in Seattle, there’s strong market dynamics continue to support the metros rapid expansion with a saturated tech sector extending and shaping the current real estate landscape. So yeah, Seattle has a lot of tech jobs, the big white collar workforce apparently they Working in offices, right? Go figure that there’s a little chart there showing the growth of that more of that office space employment. So here was that us monthly volume and pricing trends by sector. So you have the office, industrial retail and apartment space shown. A lot of you guys are into technical analysis. I don’t know if you guys are any good at it. I was never but you have the price growth, which is the line but then you have the volume bars underneath it. And usually when you have a lot of volume and you have movement, then that’s a positive signal that you can really look at as a trend. And when you have movement on low volume, that’s typically a maybe a false positive trend, a little map here of the largest employer in every state. Some of the more popular ones where our community is mostly based out of Washington is bowling. Oregon is Providence health. California is the University of California. That’s a little weird, Nevada. MGM resorts, we don’t care too much about those other states. Hawaii is altered industrial and never heard of them. But pretty much everywhere south east of Texas, Oklahoma, Kansas, Iowa, Illinois, Indiana, Ohio, Kentucky, North Carolina. I think that’s Virginia. Everything south of there is Walmart or the biggest employer in the state. So a little bit of trivia there. So I was reading some articles on newer trends in apartments and some of this was more on the E Class side. Coffee calls the A plus side I mean, these these are like the 1500 dollar to 20 $500 one bedroom apartments. So they’re saying like, what are the new amenities that are going in and all of this has nothing to do with stuff I buy, which is the more workforce housing It is interesting to see what is going in there. So they’re saying like the peloton bikes, the ones that had the little computer screen that apparently people are going crazy over recently, they have gyms in the apartments they want the tenants to feel special. I don’t know what that means but more like white glove service. I know a lot of people have kind of been taking my advice and selling your primary residence because it doesn’t make you any money invest the money instead and a lot of people are really liking the apartment life. You got the pool, you got kids, you don’t have to worry about cleaning anything. They like the pool, you got a gym, there’s a pool, and it’s a lot cheaper to don’t believe that nonsense of renting is just throwing money down the drain. I mean, whoever said that’s probably stuck at the day job. You don’t want to listen to that guy. impact of the next recession on the multifamily market is the next on topic. This came from the US Census Bureau data. So in the green line, it’s showing that the vacancy rate, which typically is between six and 11%, obviously after the recession kind of spiked a little bit but over 10% but slowly but surely the past 10 years it’s been coming down to almost all time lows for About 7% or so. And homeowner vacancy is usually about 1% to 3%. I pulled a chart of the stock market here. I honestly don’t really follow the stock market stresses me out. But from time to time I like to know what’s happened just so I can kind of poke fun at people who like trade stocks and options and think they know what they’re doing. Yeah, I mean, pretty much at all time highs where we were in year 2000. Here market US market cap divided by GDP is what I’m looking at. So I don’t know if you guys have bosses that shop at Macy’s but they might be really sad because nearly 30 of the retailers 641 locations wash clothes following a decline in comparable sales through the holiday season. And we’ve been following this trend the last few months ago and listen to pass investor letters to get was forever 21. I can’t think of the other ones but a lot of these storefronts We’re kind of going out of business. It’s the whole click vs brick battle get it click on your Amazon versus anyway another article that I put up is the retail property taxes is likely to rise and Sapir one announced that it will close up to 450 stores the electronic store Bose A lot of you guys like to wear and be anti social as you go out in public will close the remaining 119 retail stores but it’s not all doom and gloom because if you shop at the discount retailer Five Below they will be opening 180 stores actually bought that place was like a frozen yogurt place at one time and then I went in there and I found that otherwise so Ponzi scheme alert $700 million from the income store. Now we did a podcast maybe about a couple months ago about buying websites sort of like how you buy a distressed house you buy distressed website that is suitable for me you make it a little bit better. So the income store I understand that This this model, right is is sort of like a trading you could you could buy and sell websites on there. I don’t know exactly what they were doing. But apparently they took everybody’s money and this kind of story came out, which is kind of a shame. You know, I’m all for getting these marketplaces open so entrepreneurs can get involved, but it’s times like this where like, it makes everybody gun shy where you get one back after that kind of spoil it for everyone. We were talking a little bit about the millennials possibly moving on and finally buying homes. So there was a study that came out by the Deutsche Bank research that the median age of homebuyers is now 47 years old. And that went up from 31 to 47. And there’s a little graph there. That shows, you know, way back when in 1980, the median home buyer age was 30 years old, and it’s just been going up year after year after year. A lot more since the financial crisis. I mean, I guess people are having kids lot later. Another graph millennial share of the US housing market small and shrinking. So this graph is showing the millennial home ownership, slum share of American real estate home by each generation by medium cohort age. So showing how the baby boomers are they love that homeownership stuff. And then the Generation X folks, they’re kind of hitting their Apex it looks like right now and then the millennials are kind of behind some new trends in apartments or in housing in general are bigger showers so you can cold shower, I don’t know maybe have two people in there. I don’t know what that’s all about. But it was interesting. Like we have a more of a nicer apartment more of a B plus asset. And what we’re having to do there is removed a lot of the bathtubs because people just don’t use it. They’d rather have a more fancy or tiled shower than have a bathtub. They’ll pay more for that. So I don’t know if they’re gonna fit two or more people in there but the showers a little bit more popular more modern these days maybe that has to do with people just being too busy. They just got to go in and out. They can’t put rose petals around their bathtub and drink wine around that time. I was just joking there. Some of you guys need to laugh a little bit later in the day here. And then multi generational housing is becoming more popular and Hilton’s launching this new brand called temple. So it’s supposed to cater towards ambitious modern traveler, whatever that means you’ll have iPhones or something like that for strategies for 2020 success in class, the multifamily space I’ve kind of moved on from classy properties, they’re really difficult they never pay I think it’s just better to be more in a B class type of asset unless you have a really really severely under market and you’re going to do heavy value add like more than five six grand per unit rehab per unit. But this article that there’s four strategies that they cited, first one was new markets. So looking markets that people aren’t looking in number two was employing tech. And I really understand this whole tech angle. They’re saying like, Oh, you have to use Alexa and all you know the little things, all that Amazon stuff, you don’t put that in class B and C properties that’ll grow legs and you’ll you won’t find it anymore. But maybe they’re talking more about the smart thermostats. It didn’t say 10 employees because in these type of areas, your employees are very important the leasing agent you pay them on salary in apartments and then regulations because like all the new rental control laws has been upon all that stuff. Very important recently went to a mastermind and a family office gentleman came in talk to us about a few trends that are happening said that in the year 2025, there’ll be more people turning 65 then babies born so that means there’s going to be a lot more older people soon but don’t go to simple passive cash flow calm slash elf and start to learn how to make your own assisted living facility like A lot of you guys will do that is a huge, huge undertaking and something I tried to do and I just backpedaled and plus the silver wave isn’t there yet, like a lot of the baby boomers are finally retiring, it’s going to be another decade or two until they really start to use that assisted living facilities. Another big trend that they cited was the race for 5g and I don’t know how to pronounce right, like who way but there’s this big, big thing versus them, the United States where they don’t want to use their technology because they think they’re going to steal from us. I don’t know if that’s true if they really gonna steal from us. But you know, being from America probably isn’t good if they win that race. And it’s sort of the modern day race to the moon. It’s riddled with backdoors. Lane two, don’t trust it. Don’t trust it. All right. Good thing. We’re still getting the G here in Hawaii. So it’ll be a while. Another thing that I found interesting from the presentation was, I think in the year 2026, there’s going to be more electric cars than gas cars. That’s sort of the inflection point. You know, a lot of these guys are family office money. And if you’ve never heard of these terms private equity family office and venture capital private equity is kind of the syndications people who are a million dollar to $5 million network. We’re family offices are more on the scale of 50 to 100 plus million dollars, big money housing market falling short by nearly 4 million homes as demand grows. So this is just more of a general article. That’s just reiterating. Look, guys, the country needs housing, and especially housing for folks who don’t make $100,000 or more. And we’re continuing to build new product, but the pace of population growth is increasing, and it’s not keeping up with the pace with demand. And that’s why I think why a lot of us fall back to real estate because it’s sort of a commodity and you’ll always need it. New podcasts and articles that I put together in the month of January 1 was the financial freedom for dentist so I have a lot of dentists in the mastermind program like almost seven or nine of them I realized so I got a bunch of their thoughts together and I remove the identities and zip codes and social security numbers and I put some of the the thoughts there and might be more of a dentist thing but it might also apply if you’re a doctor or any other high paid professional to another article I wrote was the private money lending top mistakes I put it at simple passive cash flow calm slash lend mistakes you can also check out the dentist article at simple passive cash flow calm slash dentists we had an accredited investor Come on the podcast and do a coaching call with me appreciate when you guys do that i a lot of you guys really like to watch vicariously you know for high paid professionals is really many different scenarios that I have a lot of these coaching calls in the YouTube channel. I have them in index and a section if you guys want to check out some of the past ones. Yeah, check those out. And see if they help you but just know that not all situations are like and the biggest part of this at the end of the day is deal flow What are you going to do right like you read that Rich Dad Poor Dad book and you’re like All right, we’re going to take over the world but what are you going to do? You don’t know right? He doesn’t say anything because that kind of changes all the time. Who do you work with December 2019 they changed some borrowing standards. Some of you guys are still buying those rental properties or turnkey rentals there was some changes and how they calculate think that to income you guys can check out there all these links are again on simple passive cash flow calm slash investor letter number five here habits you guys miss the goals webinar. I believe the webinar was simple passive cash flow, calm 2020 dash launch. Do you guys want to go and watch that webinar again, but I made a little sub article on habits and I had Richard Wilson on podcast 184. He is a family office guy who manages and millionaire families. You guys can check that Went out at simple passive cash flow calm slash family office catching up on that chat box here one person mentioned or they’re asking my opinion on the previous retail malls at least metropolitan areas possibly converting to food halls areas for experience halls I’m looking into like commercial commercial centers, these are the more ones with your haircut, place your food place grocery store, because I think you’re always going to have to go to those and that’s why Amazon had the insight to buy whole foods of brick and mortar at the end of the day. I mean, still the minority of transactions are done online. I think the problem is the more mulish you know, your cube malls not the big boxes like the Best Buy and those type of areas but going to the mall, that experiences going away. And yeah, I think you point out a good thing here like food halls, eateries and experience observe definitely coming online, right? We’re like the old 90s retail mall that’s obviously kept dying. But now people want more experiences or something family friendly or just a variety of food options. It’s kind of like a one stop place. I guess it just kind of reinvents the idea of what going to the mall is. I mean, I saw I was just wasting all the time couple weeks ago during the holidays watching this like these guys went into an abandoned mall and YouTube probably find them on Dandan mall videos but yeah, I mean people want more funding hop golf will have that stuff the whole Have you ever been to Vegas guys like to do that? Well, I know you guys are thinking something else at this point. But like the construction equipment, like you have construction equipment, you just, you know move dirt around that kind of stuff or like escape rooms I like escape

31:38
from things like drive a tank or

31:40
you know, various experiences coming unique. The can’t get a lot of places, right? I know that they call them D boxing to where they take a big space and they’ll chop it up into these little food halls too. That’s another term. I’m more of a spectator with this stuff. I kind of see it. I kind of watch it but I think as an investor, I try and stick to Certain things that I know, but eventually I think at some point multifamily apartments will just get so saturated by people who think that they can do it. Because I guess it’s kind of true, you can kind of just pick a property manager and you can get lucky. And it’s easy. And that’s why a lot of people do it. And that’s why a lot of the dumb money goes there. So eventually things will correct. And apartments won’t be as good cap rates as other things. But I’m going to move into more of what I’ve been doing other than spelling things wrong, like I normally do. But these are the six needs that Tony Robbins always talks about. So this is how I always break it up. We’re meeting growth, trying to get to know my investors better. I probably had about three four calls with investors every day for the past month. I think everybody wants to get on their 2020 goals and book a call, but we haven’t had a chance to connect trying to connect with everybody at least once. So go ahead and do that. And then I’m also planning the tour’s been high gain and do a luau in Hawaii and you guys can check that out symbol passes. Cash Flow calm slash week three, that’s February 714. To 17 way I’m trying to contribute back to others, you know, and those calls, I always try and make it a point to give some kind of referral or critical feedback to anybody because I didn’t really have that when I was building my portfolio. And I think a lot of people don’t realize like, I’m gonna bought my first rental in 2009. And I bought my next one in 2011, I think or 12. But for like about five years, it was like watching grass grow. And I wish somebody would have told me don’t buy 11 rental properties. They’re a pain in the butt. I wish somebody would have told me that number three significance. So I’ve kind of been turned on to this whole family office concept where you kind of work with a smaller number of clients. So I’ve been kind of focusing on maybe turning into a family office where I work with people who are one to $10 million net worth folks where I’m sort of the consultant I’m in the middle of the wheel, doing the wealth planning, estate planning, wealth management, tax planning, trust and Corporate Services, family, governments. And then you know, what is the meaning behind your existence like a charity philanthropy, you can’t just get a tax guy right on your team because the tax guy doesn’t talk to the deal guy who doesn’t talk to the wealth management guy, right? It’s good that you get specialists on your team and you should, but there’s a reason why there are specialists, they don’t have the big picture away. I’m getting uncertainty. And the reason why I put this there and I read all I’m really like certainty, and I know all we all do, we all like to stay in our comfort zone. But I’m going to try do the first multi day event in Hawaii. I’ve been trying to plan it this past week, which is getting to be pretty close up to the wire. That’s just how I do things, but it’s gonna be cool. It’s gonna be awesome. It’s gonna a lot of fun. I think we got probably about over 30 people coming. So it should be good. How am I getting certainty in my life? So we had a gentleman Microsoft come to our mastermind group to kind of talk about how do you grade different investments and he kind of says great idea of budget 1234 of investment grade versus speculative grade investments, and assuming that the performers are using good assumptions and not just bogus yeah you can kind of break it down what kind of investment philosophy do you have? Are you just want to go balls to the wall and just do a high growth or you just want to do cash flow stuff and should you do that if your net worth is under half a million dollars so you got to take on some risk right if your goals are bigger number six love and connection so I been consciously trying to book four trips a year now they don’t have a day job it’s hard because I go traveling all the time to check out deals and but I encourage everybody to plan vacations. I know that sounds really silly but most people don’t do it because if not you can just be Kobe Bryant and just disappear off the face of the ER was all for nothing. And what some of the resistance or distractions that I’ve been facing that I’m sure everybody else’s the heck it’s February right guys, you’re one fourth way through the year and you had all these goals, you probably forgot the damn things, you know. Just remember you’re gonna be like Janet is March going to be like January other than that no exceptions living a good life things are good some junk is buying your bought this like doorstop it’s kind of heavy it’s a Boolean to you guys can get the links on the website and I’ve been like trying to buy a lot of things that are automated. So I have these crazy automation with Alexa and trying to automate everything but I found these super simple you just press the button based on how long you want it to turn on. So the coffee pot I’ll just turn it on for an hour so doesn’t go on. And I’ve been reading this book willpower doesn’t work by Benjamin Hardy, so heavier ears if you like to read books, but here it is in one minute. As human beings we are terrible at executing we need to give ourselves every single chance that we can get to hit success and a lot of that is building systems around making us successful. So what time you’re waking up What do you how do you set the table for your day The next day, I just like reading the book and I would listen to subconsciously and they would mention certain examples and it would like trigger different things for me to change or new systems and put in place I can’t really think of any right now. I would recommend it it’s a pretty quick read no easter egg for you guys they know happy things. Here’s the legal disclaimer And that brings us to the end of the February report. That’s it. We’ll talk to you guys next time.

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This website offers very general information concerning real estate for investment purposes every investor situation is unique always seek the services of licensed third party appraisers inspectors to verify the value and condition of any property you intend to purchase. Use the services of professional title and escrow companies and licensed tax investment and or legal advisor before relying on any information contained herein information is not guarantee as in every investment there is risk. The content found here is just my opinion and things change and I reserve the right to change my mind. Above all else, do your own analysis and think for yourself because in the end You’re the only person who is going to look out for your best interests.

Dear investor,

It was a restful holiday season yet busy time as we transitioned ownership into the last few deal we closed in Q4 of 2019.

Links to past PDF slidedecks.

1. Transitioning to Syndications & LP Tips Webinar
2. Infinite Banking with Whole Life Insurance for 2020
3. New investor portal with 3 free modules and past deal webinars
4. 2020 Goals Launch

1. Florida’s 1st LGBTQ Senior Housing Project Breaks Ground – MHN 19.10.25 – [Simply pointing out a trend in ALF]
2. NAS Acquires 27,465 SF Flex Building in Springdale, Arkansas Leased to BNSF Logistics – REBusiness 19.12.02
3. Redstone Arsenal growing to 50,000 workers by 2025 – Huntsville Real-Time News 19.12.04 -“Huntsville’s Redstone Arsenal will grow from 44,000 employees now to “over 50,000 by 2025,” its senior commander said today, and it plans $2 billion in infrastructure investments in the next five years to keep growing.”  Plus new $175M Plant
4. Top markets for MF Rent Growth – MHN 19.11.29 – 
5. Freddie Mac: Here’s what to expect from the housing market in 2020 and beyond – Housing Wire 19.11.27 -The GSE also expects home price growth to slow over the next few years, with annual growth rates of 3.2%, 2.9% and 2.1% in 2019, 2020 and 2021, respectively.
6. An end to Fannie, Freddie conservatorship by 2022? – Housing Wire 19.11.14 – “If all goes well, 2021, 2022 we will see very large public offerings from these companies. Fannie and Freddie could be looking at exiting government control by 2022 or 2023, according to Calabria.”
7. On a year-over-year basis, the September starts of buildings with five or more units were 5.8 percent below September 2018. – MHN 19.11.18 –
8. 
9. U.S. Job Gains Surprisingly Solid in October – Realpage 19.11.06
10. Phoenix Multifamily Report – Fall 2019
    The metro’s sustained economic performance and demographic expansion continue to be reflected in its multifamily market. – CPE 19.11.22 – [Its a hot market but it also fell a lot in the recession]
11. 19.12.28 Matrix Multifamily National Report-November 2019
12. 
13. 
14. 
15. Airbnb is banning all “open-invite parties and events” – Newsweek 19.12.06 – “Hosts who attempt to circumvent this ban and allow guests to throw large parties will be subject to consequences”
16. 5 Markets With the Greatest Rent Loss – MHN 19.12.12 
17. 
18. Average New Apartment Size Shrinks in East and West Coast Cities – National RE Investor 19.12.19 -In buildings developed since 2010, apartments average roughly 940 sq. ft. in size, according to RealPage. That’s down from an average size of roughly 1,000 sq. ft. in buildings created before 2010. “Prior to 2010, properties were more likely to feature a more prominent mix of two- and three-bedroom floorplans as opposed to studios and one-bedrooms”
19. Other trends: Boomers downsizing, pop up stores, rumors on accredited status

Plan for 2020.

First Multi-day Mastermind – SimplePassiveCashflow.com/hui3

Trying out some new mastermind groups. Traveling to new places.

Holidays… I just seemed to not get much done until the evening.

I am paying 50%/10% marketing commissions on my eCourse and Mastermind. More info here – https://simplepassivecashflow.com/referral

Product pages:
https://simplepassivecashflow.com/ecourse/
https://simplepassivecashflow.com/journey/

Bought cold press juice subscription

David Goggins – Can’t Hurt Me (All book recommendations)

Complete #LaneHack list

Passive Investor Accelerator & Mastermind

-Mostly Accredited high paid professionals to connect with personally and build your own network (currently 45 members)
-27 modules of content in a closed membership site
-Bi-weekly Zoom Video calls (25+ on-demand recordings a year plus all library of past calls)
-Now with a membership coordinator check-in’s to help facilitate what you are doing and connect you with the right people in the group (if you are shy)

Learn more and apply before out max head count is reached and 2020 pricing takes effect – SimplePassiveCashflow.com/Journey

If can do me a favor… If you get a chance people review leave a review for the podcast on iTunes (https://podcasts.apple.com/us/podcast/simple-passive-cashflow/id1118795347) and email simplepassivecashflow.com to a friend.

Transcript:

0:03
What’s up simple passive cash flow listeners wanted to announce the first multi day we mastermind in Hawaii will be holding it on my island of Oahu, Honolulu is on President’s Day 2020. And that’s February 14 to the 17th. And a reminder, Valentine’s Day is the 14th. But we’ll keep that evening for you. families and couples want to come on down for that we’re actually encouraging spouses and families have come down, because that’s part of the whole experience. Getting to know other families and getting to know other community members is gonna be a big part of this. So what to expect structured networking and masterminding with existing CWI investors and other affluent investors. We’re going to create the time in the environment to build real relationships that you can take For forever and for you, a students out there will do even be doing a full day of networking and mastermind and education. So once again, bring your families we’re going to have optional excursions such as a luau, happy hours dinners and some other activities to be able to have fun in the sun. And, you know, space is extremely limited because my vision is to kind of create this as a more intimate environment where we’re all one big little ohana here. So come in and combined business and pleasure in a little tax write off hopefully you can get that right off in before the 2019 ends. Those signing up now we’ll be able to get a free one on one strategy session that if you want to stick around till Tuesday, we can knock that out or if you’re leaving early, we can try and get that done throughout the weekend. But Hope to see you out in Hawaii go to simple passive cash flow. dot com slash week three. And we’ll see you guys here.

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Okay is January 2020. And this is the monthly market update. If you guys have not heard of me before, I have simple passive cash flow podcasts where it’s all about passive investing in real estate and potentially other non real estate items as we get deeper and deeper into the market cycle. So the first is a collection of different news articles that I’ve got it but I do this every year, those who aren’t familiar with what’s shown here. This is the Google keywords. You can look at keywords in Google and look up different trends and you can see how the world is what they’re searching for, throughout the different times. So I’ll go in here and I’ll screw around, I’ll put in the word recession, and obviously in the year 2008, everybody was searching for it. And it’s been nothing so far, except there was some kind of blurb here recently. I don’t know what that’s all about. But then, you know, you compare it to other words, like I put in in blue here, retirement investing and recession seems like people are starting to get back on the investing bandwagon after 2010. So, you know, a lot of you guys are looking for turnkey rentals or even single family homes in general, man, it’s just so competitive out there. retirements kind of been steady. I was in San Diego the other month and a guy from john burns gave a speech on market conditions. They’re like good slides in here. I just took this one to add in the presentation. Where do we expect the growth to be the strongest will it’s all the southern states and this is what I mentioned before. Peter likes little smiley face in United States. I think the further I had properties was Pennsylvania and Indianapolis. But I since sold those properties. Now my most northern property is up in the mines. And yeah, it’s a pain in the butt. You got all this pipes breaking and you know the trends are all everybody’s moving to the south. Maybe it has something to do with people getting older and they want to retire. But I believe it starts at markets. You’re looking at job growth in the southern states for a lot of blue collar jobs. And I think that’s what’s driving a lot of the Southern growth to certain markets. So a commercial headline here, Florida’s first LGBTQ senior housing breaks ground, kind of interesting, and I don’t want to get political or or get people upset or anything like here but so like you Like senior housing it is what it is. They say like seniors like to live in clusters with their own racial similarity people. So it’s just it’s interesting how these things develop like this, some Huntsville news here and some Arkansas news here, a couple secondary tertiary markets that are really starting to get on the radar. And I think Gone are the days where you can just wait for deals coming from Memphis, Kansas City, Indianapolis, you know all the perennial turnkey markets that have been pushed for almost a decade now. You’ve got to go you’ve got to go and uncover some higher hanging fruit these days. So Redstone Arsenal is in Huntsville are going to 50,000 workers by 2025 new plants new a class development there and spring for Arkansas. They just leased to BNSF logistics company that I’m very familiar with. The railroad company railroads are known to be leading indicators for the economy at least that’s how it was for when you were coming out of the recession in 2010 2012. They’re the ones who are are hauling a lot of the raw materials the lumber the chemicals to to industries to them process and make the final product top markets for multifamily rent growth from multi housing news look at that Huntsville Alabama and I’m a little upset because I don’t want anybody to know about little Huntsville This is probably the first month I’ve ever seen it on crack this list Las Vegas has been there but we all know kind of stay away from Las Vegas because it’s a very cyclical market. Pensacola was number one Phoenix was number two Huntsville was number three Las Vegas number number four and five was Portland, Maine, and that is 4% change year over year growth. The some news that we’ve been falling on the Fannie Mae Freddie Mac saga in past news, Fannie Mae, Freddie Mac, it becomes sort of public entities after the Great Recession of 2018 Kind of collapsed government stepped in and there’s there’s talks about them going back to private organizations, some articles here and we’ll have all this in if you guys go to simple passive cash flow calm slash investor letter, all these articles and links are found there if you would like to share that with other people, maybe you have a person who is not completely on board with investing. So Freddie Mac says here that they expect the housing market in 2020 and beyond the GSE also expects home prices growth to slow over the next few years with annual growth rates of 3.2% 2.9 and 2.1 respectively, from 2019 to 2021, respectively,

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still growth but I think that

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everybody’s integrins that things are kind of slowing down but still moving forward. But definitely that Gone are the days of the four to 7% increases another article at the end offending me Freddie conservation ship by 2022 They’re saying that if all goes well 2021 2022 will see a very large public offering of these companies. What does that mean? Well, I think most investors will get freaked out because oh my god, I can’t find a Fannie Mae, Freddie Mac loan for my properties anymore. I wouldn’t worry about it. There’s always going to be some other way. And then this is the government. I’d be surprised if anything you mean happens by 2023. This is also happen. I think, earlier this year for our deals. We were talking to our direct Fanny lender, and they said this is in the summertime that they had hit their annual quarter or quota for 2019. And they weren’t gonna be lending anymore, but they had a meeting of the minds and then a couple weeks later, they get it all figured out and then they just move some things around and they they opened up the floodgates again, next article here on a year over year basis. The September starts of buildings with five or more units were 5.8% below September 2018. These two charts are showing the rents been pretty stable. Between a 2% to 4.3% rent increase and in relation to the CPI and then on the right side here is a chart of the multifamily starts and what that is, is new inventory coming online. Typically Class A builds are being built up ranging in 300,000 to 450,000. This last calendar year. Have you ever listened to a podcast or been in a seminar and too afraid to ask a slightly personal question, our mastermind will have an intimate feel where people are going through the program together and at their own pace if needed, in order to foster friendships. When I was learning and paying thousands of dollars for masterminds and mentorships the network however, hokey pokey as it sounds was a big part of it. What happens in the mastermind stays in the mastermind will use the BI weekly webinar sessions to the set concepts with real life examples here how someone else might implement something like infinite banking concept on a hotseat session. Our group will attract thought leaders to meet just with our exclusive group. We can get FaceTime and ask individual questions. Why? Because our group will be people who put their money where their mouth is and go out and make things happen as opposed to your local Rei Club, which is traditionally just a bunch of tire kickers and some sharks simple passive cash flow calm backslash journey to learn more.

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Us job gains surprisingly solid in October says real page and this comes from the Bureau of Labor Statistics. So unemployment has gone down from almost 10% to now little under 4%. So almost like a straight line steadily going down. I mean, everybody’s working out there seems like monthly change in employment if they fluctuate, but I think the orange line shows the story right there all time. lows in unemployment now one of all time but been the lowest since about a decade, another Interesting market that I’ve been kind of looking at lately is Phoenix, Arizona. This article here Phoenix multifamily report is showing the metro sustain economic performance and demographic expansion continues to be reflected in the multifamily market. I’m watching it it’s a hot market and it typically is if you look back at the last correction and growth cycle it’s growing a lot now but i don’t know i mean, me personally, it’s very intriguing but yet it also fell a lot in the recession too, but I think I think it would work if you bought like a smaller multifamily in a higher price area like Arcadia submarket is super solid a class but if you push like a C class up to be of course that sounds good in theory, what sounds good in theory isn’t really found the ball out there. It’s very rare, but I think that would be a cool way to ride this wave. So the yardie matrix report is a pretty good news source for real estate and commercial real estate. Some of their takeaways is that the US economy is a glass half full glass half the The situation where the GDP growth in quarter three was okay at 1.9%. And we expect q4 to be a little lower us oil production is keeping inflation low below 2%. The yield curve, which has inverted been inverted for five months now, or we’re talking about is that people talk about the yield curve when the 10 year curve inverted and that was supposed to be marking the end of humanity and the markets as we know it, but we’re all still here saying it’s flattened following the September 18 and October 30. rate cuts the European and Chinese economies are still in poor shape. The US service sector labor market is extremely tight in wages continue to rise, manufacturing and farm sectors are struggling. There is a highly elevated risk of recession mid 2021, which that’s their opinion. I’m reading other news sources that are not free that don’t say that but I again, I think it’s good to go into deals with cash flow in mind. Just don’t get caught with your past. Down is kind of the same yardie continues to say here demographic and lifestyle changes are fueling strong demand for multifamily due to aging population increasing divorce rates and more younger people living at home contribute to smart demand. And overall housing production is unlikely to catch up with household formation. And this is what keeps putting upward pressure on rents and occupancy. And I think this is why you’re seeing pressure for rent control a lot of the California type of markets and it continues to talk about some more political risk more from yardie. They came out and it’s just another graph here of GDP growth. It’s been pretty much positive for a decade Consumer Confidence Index. I don’t know how they measure that, but right now it’s at all time highs for the last two decades and the Atlanta fed GDP q4 2019. forecast is 1.1. So they also brought up this interesting thought about inflation. Why is there no inflation and they’re saying the US oil is flooding the market now I only recently started to check oil I did an oil and gas deal by myself and the last year

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so now I’m actually know what the what the price of oil was before I didn’t really care. But now I’m kind of starting to pay attention to it. And that’s I think that’s indicative of like learning, right? Like if you wanted to learn Bitcoin go put in 500 bucks and you’ll start to pay attention to it. So I think what what they’re saying here is why isn’t inflation going up? Well, the US oil supply is kind of coming into the market and I think that’s what’s kind of I don’t know if I’m saying it right, but maybe it’s a cheaper support soil. For those of you guys doing Airbnb and short term rentals. I do have a simple passive casual Facebook group just for that but I’m not a big fan of doing the short term rental stuff and other bad news headline here Airbnb is banning all open invite parties and events says Newsweek hosts who attempt to circumvent this ban, and allow guests to throw large parties will be subject to consequences. Now I thought this was a great idea about 510 years ago right? If you’re pretty frugal and you want to downsize or have a small apartment you want to have friends over what do you do you get a cool big air b&b and you you trashed a place there or you have everybody come over there but apparently Airbnb dawns upon that five markets with the greatest rent loss so you don’t want to be on this list number one Midland Odessa they had a percent change of negative 4% number 200. Hawaii Gee, I wonder where that is. It’s it’s kind of funny because we don’t really have boy doesn’t really have seasons out here. Number three, Baton Rouge number four Scranton, number five Lafayette like Charles I’m in some fields and like Charles downs kind of alarming to me. So a lot of you guys sent me this article and I thought I’d put it in here because since you guys were interested in me, I didn’t really care. Number one, it still has to go through a lot of voting. But so the SEC is proposing to update accredited investor definition to increase access for investments to a minority portation what they’re doing is they’re adding this term sophisticated are accredited for accredited investors, you can sort of test your way into being accredited by doing like a series six or seven. They haven’t figured it out yet, nor have they approve this. But for those investors who are sophisticated, and maybe like half a million dollars net worth, you’re able to test to be a credit status. But again, I don’t know why this even matters because 97 to 90% of deals out there, if you go to the SEC website, you, you look, we actually spend the time and go look, the Egor database, 90 to 97% of those deals out there are 456 beat deals, which include non accredited investors, sophisticated investors, I don’t know why people always fight to get into five or six seed deals. In my opinion, the reason why they’re doing is they can’t raise the money from their list. That way, they have to go to some crowdfunding website and they have to kind of throw a hail mary for investors, but that’s just the way I look at it. crowdfunding websites just cost too much too. Obviously not for the investors but for the audience. Operator it just costs too much money to have money raised that way. I don’t know why any good operator would use that as a means of raising capital unless they’re desperate average new apartment size shrinks in the East and West Coast City says the national Ari investor in buildings developed since 2010. Apartments average roof size was 940 square feet that’s down from an average size of a roughly 1000 square feet in buildings created or before 2010 same prior to 2010 properties were more likely to feature a more prominent mix of two and three bedroom floor plans as opposed to studios in one bedrooms in this kind of goes hand in hand with like like in Hawaii, they there’s a lot of multi family households, a lot of people living under one roof. So if you guys have been keeping up with simple passive cash flow, calm content, I say that jokingly because it’s almost impossible to do it but these are the new articles that I created this month and the first one is transitioning to syndications and help Tips webinar that was a recent podcast and it’s also an a webinar video forum. So if you guys haven’t checked out this and passive cash flow YouTube channel, go ahead and search for that if you’re listening to this on the podcast just all be on video form for you to look at the cool pictures I spent all my time searching for you guys make it worthwhile for me check it on the YouTube channel. And so the next article here that I worked on was infinite banking with whole life insurance for 2020 when I have Chris miles as a guest, and he actually went through and showed a comparison of two policies, something that I know it’s never been done before, but I keep telling these guys like my podcast listeners, and my folks are super smart. Like you just can’t keep bringing the same old lame stuff. It’s boring. Number three here, new investor portal with three modules and the past deal webinars. So I launched the simple passive cash flow members portal, it is free, but you only get the first three modules of the course and you guys can do that by signing up for the newsletter. The investor club at simple passive cash flow calm slash club I also created this other 2020 goals lunch which after this meeting, we are going to stick around and we are going to go through this goals lunch exercise together and it looks like we have a good amount of people. So we can definitely do a lot of utilize these virtual breakout rooms to hair off and get some interaction within our tribe. So I’m kind of transitioning to my personal activities this past month, it gives my investors insight into my life and maybe gives you some ideas and some things you guys to work on. I break them up into six categories. And the first one is growth. So I spent a lot of December planning for 2020 I one of these ideas I had in my head was to finally do a multi day mastermind in Hawaii. And we’ve done one in Sonoma before and then last year we did one in would have been Phil Washington near Seattle but never in Hawaii because I had this living belief that nobody would fly out to Hawaii to see me but apparently a lot of people will these days or maybe it’s just Hawaii but you guys can check that out simple passive cash flow calm slash Hawaii three h UI three for details on that if you’d like to join us but personally I’ve implemented this new idea of profit first by Mike mccalla Wits he gave a keynote speech at our last mastermind and initially it’s kind of sounds kind of obvious almost elementary like yeah, obviously dummy like you pay yourself first right you put money aside first he brought this matrix here and I’m showing on the screen but it shows where you are in terms of how much money you bring in says real revenue range but that’s more of like

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instead of real revenue concert more profit. So let’s just say you’re bringing in zero to two quarter million dollars your profit you should put aside as pure profit is 5%. So you should put like, you know, out of 100 grand five grand into the bank or make Different bank account like me personally, I’m going to put that in my wife’s account and consider that gone. Hopefully that builds a little goodwill for me. So I can keep investing. The next category is owners pay. So this is where you pay yourself a salary for what you’re doing. And it’s different. It’s a little different from profit, but very similar. So they’re recommend in here 50% to set aside so your salary and these kind of go back to overview of this, like this is more for entrepreneurs, but I feel like all us real estate investors are sort of like entrepreneurs, where the trouble is like, when do you take profits off the table and actually start living instead of putting your nose to the grindstone and keep saving and putting more money into the next few in the next few in the next in the next year. This gave me a little bit more framework. The next category is taxes. So it’s 15% whether you make zero dollars or bazillion dollars, of course some investors making over $300,000 a year might say like what the heck, that’s 15% but I see it all the time. You know, that’s why you got to be investing. You got to get the deductions and then the bonus depreciation, that’s how you get down to that 15% number 2018, I paid 14%. And this past year, I paid 4% of taxes and all following the rules. So the IRS wants to automate, they can come and get it, you know, maybe they’ll learn a thing or two, when I figure or at least tell me how to do it the right way, operating expenses. Now, this is something that I took away like, and this is what I see as an investor as the, you know, putting back into your business or buying more properties. So they’re saying, the less you make, the less you should be putting back into your business or investing but for me, it was I was doing so many things by myself in terms of running the investment side and running the education company and then going to the gym every day and stuff like that, I realized that my overhead was super low. And I was working like 12 hour days. I mean, last night, I was up to like three o’clock in the morning doing some of this stuff, and that shouldn’t be the case and that’s going to probably going to lead to burnout. So going through this profit first exercise, I really lies that I need to allocate at least 30% to spending on things like I bought this drink this drink is like a fortune it’s like five or six bucks but as opposed to going to the store and buying all the vegetables a cold press it I just buy

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it at some point time is more valuable than money. But if your net worth is under a quarter million dollars, I’m not talking to you, sir. You need to keep working and being a cheapskate In my opinion, second category or contribution I’m going to lead this goals seminar right after this. That’s kind of like give back to the community I do every year made it a lot better this year than last year. So there are some new things if you guys have done it in the past. So people like like to go through this exercise. It’s kind of a live experience. And we’ll be doing this also in Hawaii, but I’ve got a few other tricks up my sleeve to add to the content. But those of you guys who be sticking around the whole thing is playful out and I think you’ll get a lot out of it. third category is significance. So close couple of deals late last year, the hundred four unit and how Phil and then the 212 unit in reflections that I went and visited last time I was in Dallas last month and I played around with the golf cart. You guys saw me on social media playing around with that. Yeah, that’s that’s why I do what I do. Because I can play around with the quote unquote, other property is that what that is called approach on higher level guests and others and authors on the podcast. So what I’m looking to do, there’s find things that you guys are interested in. So if like, I’m having a more mindset person coming in, but not one of those fooful people, and I’m going to steer them in the right direction. But this is all simple passive cash flow. It shouldn’t take very long to do all this stuff. And I keep telling a lot of people in the mastermind, if you’re spending more than like, five, six hours a month, being a passive investor, you’re doing it the wrong way. You need to figure out how to do a lot more efficiently because you’re doing it wrong. And I get it like if it’s your first few months, you’re going to be consuming podcasts left and right, but there’s an easy way of doing it and then there’s a hard way of doing it. So if there’s any content out there that you want Want me to use the simple passive capital podcast to get certain guests to ask our questions and let me know. I’m always looking for feedback for the podcast to add more value out to you guys. category four is uncertainty. I’m trying to take some new mastermind groups and stop going to the normal real estate groupie ones out there which just usually has a bunch of newbies at it. And what’s been frustrating is I can’t tell who are like legit people because everybody is wearing their nicest suit and everywhere you go, it looks like the NBA Draft. So I’ve been trying some different mastermind groups outside of real estate and just traveling to new places meeting different people. I will be out to Huntsville earlier this month. If you guys want to come in, walk some properties with me out there, put that out to the mastermind group. I usually release my travel schedule a number five certainty to here because you always want to have certainty in your life. You can’t be all like get all your comfort zone nonsense all the time. So I went to Japan last week I was in Japan and just ate a bunch of food. It’s very comfortable. There. That’s, that’s what I did. My Christmas number six year love and connection schedule more meetings to this. I mean yesterday I talked to like eight people throughout the day but before the year gets moving and if we haven’t talked before let’s get on the phone and let’s connect simple passive cash flow calm slash talk before the year gets busy and I don’t have time for that anymore get signed up for that some resistance distraction barriers or noise that I’ve been dealing with, you know, with all the holidays, and I can’t seem to get anything done. Everybody just wants to have dinner things like the holidays are over. Also, you guys have any friends who are interested in simple passive cash flow getting that lifestyle and you’re tired of talking to them blue in the face, and they don’t listen to podcasts and things silly things like that recommend the e commerce and connect us via email and then I’ll pay out a referral fee. Let me do the hard work and educating and you can just have lunch with them 510 years from now when you’re both retired.

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other random things I bought I bought this cold pressed juice subscription. I guess that’s I don’t I guess that’s considered something where it’s super easy and maybe I should probably find something harder to do but that’s what I bought this month and it really buying myself any Christmas presents, unfortunately this year, but I’ve been reading this book, David Goggins a lot of people talk about this guy. So my good buddies, they listen to this podcast, he’s kind of crazy. He does ultra marathons and he went to buds like three times if you listen to like the first chapter, it’s all about his childhood how he’s abused and it’s actually kind of graphic and I listened to it on my audio book I don’t read it’s definitely shakes you up for sure. Here’s a link out to that and I’ve got all my other recommended books if you click this link in the show notes, which is at simple passive cash flow calm slash investor letter, and then the the easter egg here is that the passive investor axillary and mastermind is in your 2020 and if you guys are interested in that, please go to simple passive cash flow calm slash journey and if you just Interested in the E course, go to simple passive cash flow calm slash e course. But maybe we have time for a couple of questions. If you are any comments about some of the news we kind of went through earlier, we can do that now. Or we can go right into the goals seminar about the recession at the beginning, what could happen with a recession and the return on the syndication, say that the recession of three years and what will change in the expected return? Well, I mean, I don’t know specifically what deal you’re talking about. But every deal is different, right? And that’s why you can be investing in all types of things. For me, I go into investments that are producing cash flow today, so that there’s a little bit of buffer there, right. And I think a lot of people, they’ll have this mindset of I’m not going to invest because everybody’s saying it’s the top of the market cycle, right? But we don’t know it could go for another four years, Trump’s likely going to get reelected and this week could be on this part drunken party for another four years. You’re gonna miss out you’re missing out because you listen to somebody Random headline or some there’s a lot of fear base articles and new and new subscriptions out there and I wouldn’t get cash flow investing confused with fix and flipping real estate is all for it’s all considered real estate and I think that’s to me that’s hot that’s the difference that I see if it cash flows. That’s that’s a big indicator that I look for this website offers very general information concerning real estate for investment purposes every investor situation is unique. Always seek the services of licensed third party appraisers and inspectors to verify the value and condition of any property you intend to purchase. Use the services of professional title and escrow companies and licensed tax investment and or legal advisor before relying on any information contained herein information is not guaranteed as an everyday investment there is risk the content found here is just my opinion and things change and I reserve the right to change my mind. Above all else, do your own analysis and think for yourself because in the end, you’re the only person who is going to look out for your best interests.

Transcribed by https://otter.ai