"Don't Buy A Home!" Ben Mallah's Final Warning For The 2026 Real Estate Market

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Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Speaker 00

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• 0:15Speaker 01

  Not everybody's cut out to be rich. That's a fact. You gotta have that burning desire inside of you. We paid $43 billion for this place. I'm not just talking out of my ass like a lot of people. I'm out there doing it. Class is back in session. If you're in real estate, the most important person in your life is your banker.

• 0:35Jack Selby?

  Why is banking the most important thing if you're trying to build wealth then?

• 0:38Speaker 01

  You got enough money to buy a piece of real estate? No, average person don't. Your bank comes before your wife. My wife gets the money, what? Don't ever buy a house for cash flow. It's stupid. We've identified this property. We're thinking about buying it.

• 0:53Jack Selby?

  Why'd you buy a Tesla dealership?

• 0:55Speaker 01

  Would you trust Elon Musk to pay you rent? But you know what a hundred grand a month to him is? It's like you going to the store and buying a soda.

• 1:01Jack Selby?

  Do you think it's easier than ever right now to get rich?

• 1:04Speaker 01

  Well, don't worry, you know, the world needs dishwashers. It's true.

• 1:12Jack Selby?

  Ben Mallett, you have to spend $70 million in the next few months. How difficult is it to spend 70 million?

• 1:19Speaker 01

  It depends. Whether you want to buy smart or you want to buy eh. I mean, it depends. You gotta, I'm out looking for deals every day, you know? We just closed on a Tesla dealership. We just closed on a private university. We're in going to contract on a brand new gym. My son's working on an apartment building, you know, that's a major rehab. My other son's working on other rehab. I mean, you gotta, you gotta look, you gotta find deals that make sense.

• 1:49Jack Selby?

  So explain why you're in this position. What did you sell to have this $70 million you now need to spend?

• 1:56Speaker 01

  I mean, yeah, we sold quite a bit of real estate. Maybe I shouldn't have. Maybe I shouldn't have sold.

• 2:02Jack Selby?

  What makes you say that?

• 2:03Speaker 01

  I thought that the market was gonna turn and the banks are keeping it from turning. That's what's going on.

• 2:15Jack Selby?

  What are they doing?

• 2:17Speaker 01

  I mean, listen, I'm, I'm out there on the street. I'm dealing with brokers. I'm at properties. I know, I really know. I'm not just talking out of my, like, a lot of people. I'm out there doing it. And all the big shots and all the people that thought they were so brilliant that overpaid during COVID in 2021, 22, 23, they're getting screwed down because they didn't know what they were doing. Okay? Typically, you know, these types of properties don't have long-term financing on them. So they all locked in at their little 3% rate. They locked it in for five years and now the rates doubled. They gotta refinance, they gotta pay their bank back. They're not gonna cash flow.

• 3:01Speaker 01

  What does that mean? That means that the loans that the bank made are no longer at the same value they were when they made the loan. Why? Because the property can't cash flow at double interest rate. It's simple. And all, listen, I deal with sellers every day that are just ready to throw the keys and walk away from millions of dollars in equity investment that they had. And a lot of them pool people together, okay, with your syndicates and raising money and all that. So, you know, a lot of people are gonna lose their shirt. But the banks loan too much money. Not only the buyer, the, the own people that bought property are gonna lose, the banks have to lose. Why?

• 3:46Speaker 01

  Because the property ain't worth it. And a lot of these places, these people shouldn't have bought real estate to begin with. Because when I go out there, because they were bleeding, they're not operating properly. So therefore, the property deteriorates. It's not being managed properly because they don't have the experience. So they hired a management company and the management company don't care. They have no skin in the game. So there's a lot of distress out there right now. I've looked at thousands of apartments and multifamily and there's a ton of distress out there.

• 4:17Jack Selby?

  So what are the banks doing right now to prevent the collapse from happening then?

• 4:21Speaker 01

  They're on the fence. They need to get off the fence and realize this loan is not worth what we loaned on it. But they don't want to do that. They don't want to admit it. They don't want to realize it. They've all been praying and delaying, praying rates are gonna come down. Okay, keep delaying, but now it's at the point where the sellers or the owners have let the properties go because they don't really know what they're doing.

• 4:47Jack Selby?

  So you, they're just letting it go to the bank?

• 4:49Speaker 01

  Interest rates have now, uh, what happens is when your time runs out on a loan, you have a fixed rate for so many years. All right, well, when the fixed rate period is up, it goes to today's rate. They can't handle that. Okay, so the banks are just trying to work with them, but there's nothing to work with.

• 5:09Jack Selby?

  Couldn't they just delay a little bit?

• 5:11Speaker 01

  Delay, they've been delaying, they've been delaying for years now.

• 5:13Jack Selby?

  But it sounds like they're still delaying. It sounds like they're just delaying another six months, another year.

• 5:17Speaker 01

  A lot of sellers aren't even paying now. They just, they just threw their hands up. Because a lot of them, they bought these properties, they realized that they're not equipped to, to rehab it, they don't do a proper budget, they don't know what they're doing. Too many people have gotten into real estate now that don't know what they're doing. And then what they're doing is they're pooling a bunch of money together, okay? Which is even worse because now you got, you know, all these investors and 10 different owners and it's a mess. So there's a lot of real estate in the market right now that's distressed. And the sellers are ready to just walk away. Hopefully, you know, a lot of them are personally guaranteed. That's not good. The ones that are not personally guaranteed, they just walk away.

• 6:01Speaker 01

  But the banks have to get it in their head, get this off our books. But they don't want to do that. You know why? Because if it gets out, then the value of the stock will go down in that bank. Why? Because the bank is only worth the value of the loan.

• 6:16Jack Selby?

  So you're saying a lot of these properties are completely underwater? It's not like they just wiped out the equity. They owe more.

• 6:22Speaker 01

  They're all over the board. I've looked at properties that are barely keeping their head above water. I've looked at properties underwater. I've looked at properties that are drowned. I looked at 200 apartments the other day, empty. The guy just called me on the phone, you witnessed it. He just told me, oh, I got the 144 unit building for you. It's 20% occupied. Oh, and then in Florida, a lot of people got hit by the last storm. Flood coverage is not much if they had flood coverage. So now they're sitting here, I've, I've looked at a 16-story building the other day, shut down, right here, 10 minutes, 20 minutes from here. I looked at hotels on the beach, shut down. Why?

• 7:05Speaker 01

  Because the flood kicked their ass and now they need all this money pumped back into it. Some of them have been shut down by the city. They got red tags on them. And somebody needs to come in with major capital and put the place back in shape. But in order to do that, you have to buy it right. And the banks have to realize, listen, we screwed up. Things happen in life, okay? The flood came, interest rates are up. These are all things that cause major distress. They gotta realize it, they gotta just cut their losses and move on. And then we're just waiting for them to finally do it. We're starting to see a little, but not a lot.

• 7:43Jack Selby?

  So are you getting good deals now?

• 7:45Speaker 01

  I'm getting a lot of deals where the sellers are cooperating. They're a little walk, but now we have to go to the bank. We gotta go to the bank and say, listen, you gotta do a short sale. You gotta do a short sale or, you know, you gotta, you gotta take a loss. If you don't take a loss, you're gonna be sitting here with a property that's gonna keep deteriorating and there's no future, except going down the toilet.

• 8:11Jack Selby?

  So what are your predictions then? How will this sort itself out?

• 8:14Speaker 01

  I mean, sooner or later, the only solution is the banks have to say, okay, these are our troubled assets. Let's get them off our books and move on.

• 8:26Jack Selby?

  How could you be wrong? Like, what would need to happen?

• 8:28Speaker 01

  It's happened many times in, in, in this.

• 8:30Jack Selby?

  So there's no way that there's any other alternative solution?

• 8:33Speaker 01

  I can't think of any other possible way, except it's all about cost basis. Okay? You gotta have a good cost basis when you go into a deal and then prepare for all the rehab that needed. And you gotta bring up the operating, okay? Especially if the place is heavily vacated. I mean, you know, the number's gotta work for an investor. Why would an investor go in and, and overpay for something and not make any money? It makes no sense.

• 9:00Jack Selby?

  So the reason that you have this $70 million right now that you have to spend is because the 1031?

• 9:04Speaker 01

  I don't have 70 million to spend, only got.

• 9:06Jack Selby?

  Well, I guess now because, yeah, you bought the Tesla dealership, the private school.

• 9:10Speaker 01

  I just sold a Harley Davidson dealership yesterday, 47, 57, 60, right? Close.

• 9:16Jack Selby?

  So you have 60 million-ish to spend?

• 9:17Speaker 01

  That's correct.

• 9:18Jack Selby?

  And the reason you have this is because you sold a bunch of portfolio?

• 9:21Speaker 01

  I sold some major assets that I didn't see. I felt like I got to the point where I could, I did, you know, it was the best that I could do with these properties. And I thought, which I was wrong, that the banks would be more in, in, in, encouraged to play ball right now and they haven't.

• 9:39Jack Selby?

  So do you think that it was a mistake then to sell the properties?

• 9:42Speaker 01

  Um, some of them, yeah, some of them I should have held. But I was also kind of worried about the future of some of those properties. Okay? Why'd I sell Harley Davidson dealership yesterday? Why?

• 9:54Jack Selby?

  Sales are down, right?

• 9:56Speaker 01

  I believe so. And also, I felt like this, I try to use common sense.

• 10:02Speaker 01

  In my growing up, Harleys were really a big thing with guys that are now today, fifties, sixties, you know, after sixty, you ain't even wearing no bike much anymore. And I felt like all the new generation, the new money wants the

• 10:19Jack Selby?

  Tesla.

• 10:20Speaker 01

  Rice rockets, you know, they want a different type of, of, of bike. I think the old Harley style, except the police still use them, I think. Um, I think it was just, you know, it's, it's, it's going away. I mean, that's what I felt like, but it was a beautiful property. It was a great operator. Um, I just felt like, you know what? Why take the risk? You know, I sold a Home Depot, I sold the BJ's. Why? Cause I felt like the area was declining. The shopping mall right near it was doing pretty, pretty bad. So I felt like, you know what? I've been with these assets, they've been good. Let's move on while I still got some term on the lease. Let the next guy, maybe he sees a different future than I do.

• 11:01Jack Selby?

  Why'd you buy a Tesla dealership?

• 11:04Speaker 01

  Would you trust, uh, Elon Musk to pay you rent?

• 11:07Jack Selby?

  Absolutely.

• 11:08Speaker 01

  Well, there you go.

• 11:09Jack Selby?

  What's the cap rate on that?

• 11:11Speaker 01

  Close to six. Yeah, we're a hair on the six, so I was pretty happy with that. And it was brand new and it was a very good thriving area. And, um, I felt good about it. When I got there, I looked around, I checked it out. Then you got all this stuff going on with SpaceX and all this, uh, autonomous stuff. And listen, you know, I mean, it's definitely the future. We all know that it's not just the electric car. It's, it's, you know, it's, it's the cutting edge of technology, you know, with him and that company.

• 11:41Jack Selby?

  So Elon Musk rents your real estate. How much does he pay you?

• 11:44Speaker 01

  I don't know, about a million, three a year or something. So a hundred grand a month, roughly.

• 11:49Jack Selby?

  And what's the?

• 11:49Speaker 01

  You know what a hundred grand a month to him is?

• 11:52Jack Selby?

  Nothing.

• 11:52Speaker 01

  It's like you go in the store and buy a soda, probably.

• 11:55Jack Selby?

  It's actually probably even less.

• 11:57Speaker 01

  The place is making money, you know, I'm sure.

• 11:59Jack Selby?

  He probably makes that.

• 12:01Speaker 01

  Before, listen, before Tesla decided to commit to leasing that place from a developer,

• 12:09Speaker 01

  I'm sure they did their homework. The next Tesla is an hour away in Orlando. Okay. And I'm sure they did a lot of thought process and, and into that location and, and, you know, having a plan for it. So, you know, I'm sure they're not just opening up dealerships, just a hell of it. They're doing it strategically.

• 12:28Jack Selby?

  So how much does it cost you then per month on the debt service on that property? Like, how much are you netting of this hundred grand a month?

• 12:35Speaker 01

  Okay, I don't, but let's say I leveraged it all. Maybe I did a hundred percent. I could do that. I could do it between a, uh, a line of credit and a conventional loan. I could do whatever I want, but you know, if they're paying me six and my debts costing me five, I make a point on, I don't remember what I paid for it. What did I pay for it?

• 12:56Jack Selby?

  Twenty-two million.

• 12:57Speaker 01

  How much?

• 12:58Jack Selby?

  Twenty-two, I believe.

• 12:59Speaker 01

  Twenty-two. I mean, the point is this, the reason why I bought it was because if I go out and buy something for twenty-two million while I'm in a ten thirty-one, I have a choice. I could buy that, get a return, or I could write Uncle Sam a check for probably in the neighborhood of

• 13:19Speaker 01

  close to four million dollars.

• 13:20Jack Selby?

  Instead of buying a Tesla dealership. So you got basically four million dollars discount.

• 13:24Speaker 01

  Buy the Tesla dealership for twenty something million bucks or write Uncle Sam a check for four million.

• 13:29Jack Selby?

  So you have the sixty million dollars in gains that you kind of do need to spend.

• 13:35Jack Selby?

  I'm curious, does it ever make sense just to pay the tax?

• 13:38Graham Stephan?

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• 13:53Jack Selby?

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• 14:04Jack Selby?

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• 14:12Graham Stephan?

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• 14:18Jack Selby?

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• 14:25Graham Stephan?

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• 14:30Jack Selby?

  Thank you to Northwest Registered Agent for sponsoring this episode and back to the podcast. So you have the sixty million dollars in gains that you kind of do need to spend.

• 14:41Jack Selby?

  I'm curious, does it ever make sense just to pay the tax?

• 14:44Speaker 01

  You know, it could, you know, depends on the market. If there's nothing that I'm thrilled about buying, or if I want to start, you know, scaling down a portfolio and think about retirement and maybe it's not the right assets to leave my kids. Yeah, I could see paying, I paid the tax on a couple of items. That was the problem. Last April, I said, you know what? I'm retiring. I'm going to start living life. I'm going to travel, I'm going to enjoy my life. And these assets, they're really not for my kids. They like multifamily. I'm going to sell some and I'm not even going to replace them. And when it came time to write that check in April, that number was so big for my CPA. I did it, but I don't think I could do it again. At least I'm going to try not to do it again.

• 15:25Jack Selby?

  How much is the check?

• 15:27Speaker 01

  Um, big, big, under ten.

• 15:31Jack Selby?

  Okay.

• 15:31Speaker 01

  Million.

• 15:32Jack Selby?

  Would that feel like to pay ten million dollars to the IRS?

• 15:35Speaker 01

  I mean, you know, you gotta look at it every different way, you know? Listen, I've had thirty plus years of success and, you know, uh, deferring tax. I mean, you know, it's either, listen, you got a choice, either pay the tax or, you know, I die and then, you know, I'll have to pay the tax. Well, if I die, I'm not going to really enjoy not paying the tax, so.

• 15:55Jack Selby?

  Yeah.

• 15:55Speaker 01

  I mean, you know, listen, that's life. You can't have everything perfect and you know, it's, it's, um, you know, it's a balance. It's a, you know, sometimes you pay the tax, sometimes you won't. But I'm not going to buy a deal just based on the tax savings. It has to be a good deal, a solid deal.

• 16:14Jack Selby?

  Well, at least the taxes.

• 16:15Speaker 01

  Easily lose the amount of tax that I would have to pay in that deal if it's a bad deal.

• 16:21Jack Selby?

  At least the taxes, though, go to a good cause.

• 16:24Speaker 01

  Absolutely. We're building a new wing on a White House. I mean, listen, it's life, you know, what are you going to do? I'm only one schmuck, doing the best I can, managing a big portfolio, you know, and trying to prepare my kids for their future now. That's basically my main concern.

• 16:39Jack Selby?

  So are you becoming more conservative as an investor to be able to buy a Tesla like that at a six cap? Because before it seems like you'd always be buying eight to tens.

• 16:47Speaker 01

  Yeah, but I'm only borrowing the five because I got big power of borrowing money. So, you know, you do the numbers. If I take a loan on that thing for eighty percent, twenty-two million, um, let's see, uh, what's that, a twenty million dollar loan or something like that? Or eighteen million dollar loan? So I'll get the spread of the four million, making a point off the bank. Plus I got my four million that's getting me to six percent. It works out to be a good return.

• 17:18Jack Selby?

  How do you borrow at five percent?

• 17:20Speaker 01

  Because I have relationships and I have, I'm no risk. Why don't you show the bank you're no risk? Okay. You're doing them a favor. I'm doing them a favor by borrowing their money because I'm no risk. So of course they gotta give me the best rate, the best terms.

• 17:36Jack Selby?

  How much do you have to put down?

• 17:38Speaker 01

  I mean, typically I can easily do loans at eighty percent. But you know, that's because it's me. Plus the bank, you know, sees my assets, they might have my assets within their bank, within their brokerage arms. There's, there's, there's a lot of, you know, strings attached to that, you know? But it's about relationship and proving to the bank that they can, there's no, there's, there's no question of, of any risk in giving me a loan.

• 18:03Jack Selby?

  You know, it's funny, you were actually on a phone call right before this episode. You're walking down and you get a call, you take it. This guy tells you this whole situation, this guy's a distressed seller. And you're just like, tell them I'll give them ten million bucks. And then he was like, all right, yeah, I don't know. Like you didn't even see it, you, you just, you knew the area. He said, hey, it's this property. You're like, is it the north or the south side of the street? He's all the south and you went, and you're like, oh, man. Oh, God, all right, yeah, just tell them I'll give them ten million bucks. I know the property.

• 18:31Speaker 01

  I mean, I've been there twenty years. I know the property, I know where it's at, you know? And I can think about all the things I could possibly have to do to fix the property up. Uh, you know, so I offered him ten million, the bank already loaned thirty, which was stupid.

• 18:43Jack Selby?

  See, wow. It's just crazy that, that you have that level of expertise to not look at a picture, to not look at like any of the details.

• 18:52Graham Stephan?

  Well, he's going to do inspections.

• 18:53Jack Selby?

  Obviously, it was a bit of like a.

• 18:54Speaker 01

  It's only, it's only opening the door.

• 18:57Jack Selby?

  Yeah.

• 18:57Speaker 01

  You know, I'm still going to go out there, I'm still going to put my boots on the ground. I'm still going to inspect the place, I'm still going to factor in everything, you know? But I make a low offer that I know I can do. Okay. Well, I, because the land alone is probably worth thirty a door.

• 19:11Jack Selby?

  Do you think that you're sharper in real estate knowledge now and expertise now than you were, say fifteen, twenty years ago, ten years ago even?

• 19:19Speaker 01

  I mean, I'm sharper now or smarter now because of the experience. But I'm older, so I don't have the drive I used to have. And I don't have the passion I used to have.

• 19:30Jack Selby?

  So you think that you'd be more bullish on Ben Mala?

• 19:33Speaker 01

  I don't get a thrill out of it anymore. I've done it for over thirty-five years. Okay, or more. And I don't have the passion like I used to because it's age, it's normal, it's a human evolution. But my kids do and, um, you know, so I support them and I'm always looking for a deal. Well, you know, I go in, I find a deal, I close the deal and I just say, here, take care of this deal.

• 19:55Jack Selby?

  What's the best deal you've gotten in the last year?

• 19:59Speaker 01

  I've had a lot of deals.

• 19:59Jack Selby?

  In the last year, in the last year, what's the best deal you've gotten?

• 20:06Speaker 01

  I mean, I've had some really good small ones. You know, I got one for sale right now out in a senior affordable housing deal. I'll probably double my money on. It's about 70 something apartments. Um, you know, lately, I mean, I don't know. I've sold some deals that I've had for many years. But as far as, um, I mean, let's see, bada bing bada boom bada bing. I don't know. It's all over the board. I got hotels, I got retail, I got apartments. I mean, every one's a good deal, but you know, I don't have any big home runs to stick out since I've done some, I mean, you know, I've, I've flipped some properties recently that, you know, there was 10 million upside, you know, stuff like that.

• 20:47Graham Stephan?

  One thing I want to talk about is a lot of people that are getting started. They feel like they need to build their knowledge and their expertise before they move. How do they know they have enough expertise or knowledge in the field before getting into their first deal? Because now, I mean, you are like one of the leading experts. I feel like that we know.

• 21:04Speaker 01

  They should go to benmallah.com, consult with Ben for pennies on the dollar.

• 21:09Graham Stephan?

  Why is it so cheap? And I'm not trying, I'm not trying.

• 21:12Speaker 01

  Because I'm not doing it for the money. All right. He's got to make money, the guy that runs the channel, the bookings, the time, you know, people's time is valuable, but I, I truly enjoy helping people. Okay. That just gives me a very big personal satisfaction. Okay. And I'm not knocking, you know, other people. Um, you know, listen, I do consulting with guys from nothing all the way up. Yesterday I actually had a call with a guy. He just sold his company. He's probably worth a half a billion and doesn't know what to do, but he wants to be in real estate. Okay. I don't care, you know, but I really like helping the small guy. I like to help the people that are just get their first deal done. Okay.

• 21:55Speaker 01

  Whatever they can afford, whatever they qualify for, finding a good deal. Cause that, once you get in the door, then it leads to a lot of other doors.

• 22:04Graham Stephan?

  I actually booked you for an hour Zoom call for the group I run, the index, link in the description. So it's a group of entrepreneurs we booked you for an hour.

• 22:12Speaker 01

  He had to be nice to you that day.

• 22:14Graham Stephan?

  You do.

• 22:15Speaker 01

  Not him.

• 22:16Graham Stephan?

  Not Jack.

• 22:16Jack Selby?

  But it's only what, like $350 for 15 minutes?

• 22:19Speaker 01

  Yeah, I mean, you know, but you'd be surprised you could cover 15 minutes. I can, I can know somebody's whole life story in 15 minutes. And all I do is I tell them, I put myself in issues and I tell them, what would I do if I was in issues? They're married, they got a kid, they live here, they make this, uh, their credit is this, uh, they never bought a house before, they applied for FHA financing, we go through the whole thing. I mean, you know, and, and, and I've had so many people call me back and say, listen, I took your advice, it worked out, we're doing great. I mean, listen, helping people is, is a great thing, you know, really helping them, affecting their life. You know, all these, listen, I don't knock actors and sports guys and all these people

• 23:04Speaker 01

  entertain people, which is fine. We need entertainment in life. It's a human thing. Okay. But I like actually helping people improve their life.

• 23:17Graham Stephan?

  A big point of our last discussion was that you're trying to lean into retirement, but by retirement, you mostly mean being done with real estate. It's, it's.

• 23:25Speaker 01

  Not done. I'm always going to be around till the day I die, as long as my brain's working. My kids are going to get on the phone with me, they're going to ask me questions, we're going to make decisions. You don't really ever retire when you have a real estate portfolio, uh, and you plan on turning it over to your family. You don't retire, but I could be on my boat anywhere or I could be in any country on the phone and I can consult from anywhere. I enjoy doing consulting. Consulting is going to be a big part of my retirement, helping people.

• 23:52Graham Stephan?

  Are you trying to lean away from value add, like distressed assets with high operational carry? Or are you, and lean more into like triple net safer, like the Tesla?

• 24:02Speaker 01

  It's, it's, it's a combination of both. And, and, and my position, and this is not for everybody, in my position, you have to be diversified. You can't just focus in on one type of assets. You know, you gotta be diversified so that gives you stability. Okay. Something you need to learn about, stability. You're very unstable mentally, maybe not physically, but financially, how many house hacks, how many people you got living in your frigging house? You wake up in the morning and you got people, strangers in your goddamn house.

• 24:37Jack Selby?

  I got four people, I got four people living in my house.

• 24:39Graham Stephan?

  Five, cause one of my nice girlfriend. One's moving out though, so.

• 24:42Jack Selby?

  I am, I'm also going to be moving out and maybe selling my property too. So if you want to sub two, a sub 3% deal in Las Vegas, let me know.

• 24:50Graham Stephan?

  It's not worth his time to be sub twoing a deal.

• 24:53Speaker 01

  The only sub I want is a turkey sub. What did you buy me for lunch today?

• 24:58Graham Stephan?

  I'll buy you a turkey sub.

• 24:59Speaker 01

  Turkey sub.

• 25:00Graham Stephan?

  Yeah.

• 25:00Speaker 01

  So basically, listen, I like diversification. I feel like I'm stable. I've got money in triple nets, like the Tesla dealership. We just closed a $43 million apartment building where my son's a partner.

• 25:14Speaker 04

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• 25:43Speaker 01

  All right. He's rehabbing it, he's getting it all going. He's actually physically there, being the manager. He hasn't done that in years. He normally has a property manager, he supervises them, but this project, he's moved into the apartment building. My son lives in a million dollar home, he's a multimillionaire. He packs his family up and he moves into the building.

• 26:03Graham Stephan?

  Does that make you proud?

• 26:04Speaker 01

  He's processing maintenance requests, he's collecting rents, he's doing marketing, he's got a construction project going on. I mean, listen, when your kids act like that, you know, you gotta keep backing them and you gotta keep supporting them. And then the other son is in Tallahassee on a project he's a partner in, rehabbing it right next to the university.

• 26:23Jack Selby?

  I saw that video, video that Ben Jr. did. I, I was really impressed by it.

• 26:27Graham Stephan?

  Yeah, yeah.

• 26:27Speaker 01

  And it's real.

• 26:28Graham Stephan?

  Yeah.

• 26:29Speaker 01

  And I was out there the other day with him. It's real, it's not.

• 26:32Graham Stephan?

  So he's living in the apartment complex?

• 26:33Speaker 01

  He's living in a apartment, why? Cause he's got his hands on it. He, he's got control, he's going to get that place running right, stabilized. Of course, eventually he'll bring a manager in, but he's going to make sure that it's in the right, uh, stage to bring a manager. Plus he's got major construction to do there. He's got about 50 apartments he's got to build from a shell.

• 26:53Graham Stephan?

  You think that always makes sense if you're getting started in, not that he's getting started, but for those that aren't experts in the field, if you want to get into your first deal, especially if it's multifamily, it makes sense to actually live in the property.

• 27:03Speaker 01

  You know, you don't necessarily have to live in it, it depends on the size of it. It was such a big project, he said, I'm not traveling, I'm just going to stay here. Otherwise he had to drive two hours each way.

• 27:13Graham Stephan?

  So you don't think that you'll ever fully like be mostly done, like you're always going to be working? Cause it seems like.

• 27:20Speaker 01

  I am contemplating and thinking about hiring a sharp kid that I met, um, trained in New York, um, on a corporate level to help me manage the portfolio. Because he has a lot of the skills that, see, my kids have been in, in, in the trenches. And, um, we need to add a little more corporate type, uh.

• 27:45Graham Stephan?

  Structure?

• 27:45Speaker 01

  Structure to the, uh, management of portfolio.

• 27:48Graham Stephan?

  What would that do for you?

• 27:49Speaker 01

  I got a kid that, you know, I call him a kid, he's no kid, he's probably, I don't know, well, he's not even 30 yet. Anyway, you know, so I'm trying to get him aboard, cause he, I like what he can do. What he, what, what I've seen of, I have him come down here sometimes, what he can do in a matter of a couple of hours on a computer and spreadsheets and all this stuff and formulating things takes me days.

• 28:10Graham Stephan?

  Well, he's just using Claude most likely. He's using Claude most likely, and he's just typing in a few numbers.

• 28:16Speaker 01

  But you see, I can have a conversation with him about basis, taxes, returns, leverage. I can have a conversation and we can have a serious discussion.

• 28:28Graham Stephan?

  Claude could do the same thing. You just talk to Claude, it's gonna.

• 28:30Speaker 01

  Claude Schmod. It's, it's not the same. It's not reality. It's, it's, it's, it's, um, artificial.

• 28:37Jack Selby?

  Would you say that doing one individual big deal requires a completely different skillset than managing a bunch of different portfolios and relationships with the bank and this and that? Like what is the main differentiating factor between half a billion dollar portfolio?

• 28:51Graham Stephan?

  Really quick, I just got to say, I've not had a piece of technology blow my mind in a long time, but these glasses that I'm wearing right now are actually insane. For those unaware, we partnered with Even Realities. They sent Jack and I each a pair of the Even G2 glasses and it genuinely feels like the next evolution of technology and AI.

• 29:10Jack Selby?

  Even G2 is a real time co-pilot for the conversations that matter. It keeps deal context, live prompts and real time translation right in your view so you can stay present, prepared and effective from the first call to the close. And unlike most smart glasses, they look and feel like premium eyewear. They're comfortable enough to wear all day and they really just feel like a pair of prescription glasses. I'm actually reading the script right off my glasses right now, looking straight at you with nothing in my hands.

• 29:33Graham Stephan?

  There's also not a camera in these, so no one's ever filming anybody. You could wear them anywhere, even walking into a restroom and it's never a concern.

• 29:41Jack Selby?

  And the videos playing are actually how it looks and works in real life. I messed around with the translation for about an hour the other day. I put on a Japanese podcast and I kid you not, I understood every single thing that they were saying and I kept up the whole time. I'm genuinely so excited. Next time I go out of the country, I'm going to bring a second pair of these glasses and hand it to a local and then we can have a full on conversation while speaking completely different languages.

• 30:03Graham Stephan?

  To me, this really just feels like when flip phones changed over to smartphones. It's one of those things, you just know you're early to it. So if you want to get yourself a pair, just head to evenrealitiesbio/icedcoffee and use the code IcedCoffee for 10% off even R1 and/or even clip when you add them to your even G2 order.

• 30:21Jack Selby?

  Once again, that is evenrealitiesbio/icedcoffee or scan the QR code on the screen right here, or also click the link down below in the description and make sure to use promo code IcedCoffee. Last October, I was flying to Japan with a couple of friends and after a delay, I was positive that we were going to miss our connection. But the flight attendants moved us up to the front of the plane when we were deboarding to get off quickly. They called the other gate to let them know that we were coming and they even gave us a pep talk because we had to sprint, I kid you not, across the entire airport. We made it.

• 30:50Graham Stephan?

  It may not seem like much, but when someone goes the extra step, it makes a positive impression. And if you're hiring, great candidates could also go the extra step and tell you why they're interested in your. Your job on ZipRecruiter is a way to stand out from the others.

• 31:03Jack Selby?

  And right now you can try it for free at ziprecruiter.com/ICH.

• 31:07Graham Stephan?

  ZipRecruiter's powerful matching technology does the searching for you. It pulls in the people who actually fit the job. And ZipRecruiter has a new feature that shows you the most interested qualified candidates first. So you meet the right people faster.

• 31:21Jack Selby?

  It's no wonder why ZipRecruiter is the number one rated hiring site based on G2.

• 31:25Graham Stephan?

  Try ZipRecruiter and meet great candidates who will go the extra step for you. Four out of five employers who post on ZipRecruiter get a quality candidate within the first day.

• 31:33Jack Selby?

  Try it for free today at ziprecruiter.com/ICH. That is ziprecruiter.com/ICH. ZipRecruiter, meet your match on ZipRecruiter.

• 31:42Graham Stephan?

  Would you say that doing one individual big deal requires a completely different skillset than managing a bunch of different portfolios and relationships with the bank and this and that? Like, what is the main differentiating factor between half a billion dollar portfolio and doing it?

• 31:57Speaker 01

  It's all about money in, money out.

• 31:59Graham Stephan?

  So it's the same skills, same?

• 32:00Speaker 01

  It's all the same, whether you, you know, you just gotta add zeros and add more, you know, there's more things to add on a bigger property. You have more expenses, you have more income streams, you got different things that come up, you know, with the property. But basically, if you want to buy real estate, you want to own real estate, I highly recommend you run it yourself. Get your hands dirty. That's the best experience you will ever get. If you wanted to go out tomorrow and stop being a house hacker with all these strangers walking around in their underwear every morning in your house, go out, buy yourself a fourplex. I don't believe in less than a fourplex. You have four tenants paying your rent, okay? And you should cash flow fairly well if you buy it right.

• 32:44Speaker 01

  And it's not a lot of management, but manage it yourself. You collect the rents. If there's a problem, send the handyman over to fix it. There's not much else to it and pay the bills and there aren't really bills on a fourplex. Your tax bill, your insurance bill, your mortgage bill, and then you got some maintenance. That's about it.

• 33:01Graham Stephan?

  I got so tired of doing that, though. It was just exhausting. It just, it's.

• 33:06Speaker 01

  You don't want to work. I could look at a guy like you in a minute and say, this guy ain't gonna work.

• 33:10Graham Stephan?

  I like to wake up and not have a single care other than just, here's a task I gotta do and that's it.

• 33:16Speaker 01

  You're from California. You want everything easy.

• 33:21Graham Stephan?

  I gotta say, I just sold two of my multifamily in Los Angeles. And every day I wake up that I think, I don't own that anymore. Oh.

• 33:30Speaker 01

  Well, that's because you've experienced it. But we're talking about somebody starting out. You've experienced it. You looked at the situation. You said, you know what? These things are a pain in the neck. I live far away in another state. I've already, if I sell it now, the numbers probably made a lot of sense, even with the tax ramifications. And you do, you made a decision. You managed your portfolio. That's what I do all the time. I look at a property, I say, okay, is this property a pain in the ass? Well, whether, whether it is or not, it's not gonna be a pain in the ass to me, you know, too much. Cause, you know, I got people to run it. But do the numbers make sense? Is it best to keep it? Is it best to refinance it? Is it best to sell it? You gotta make decisions when you're managing a portfolio.

• 34:12Speaker 01

  But if you're just getting into real estate, you gotta get your hands dirty and run your own stuff. You have to. That's the way you'll know whether you want to grow in real estate or you don't. A lot of people don't.

• 34:24Graham Stephan?

  Well, one thing that's pretty clear is that you have a beautiful home here. 20,000 square feet that you're selling.

• 34:30Speaker 01

  It's for sale.

• 34:30Graham Stephan?

  What's the asking price?

• 34:32Speaker 01

  It was asking $35 million. Why? Cause if you go anywhere on this, we're in a special little city here on a private beach. If you go anywhere in our area on this beach, people are paying eight to 10 million dollars for a lot, a single lot and knocking down a house. This house, the land alone is a value of 20 to 24 million. Okay, it's, it's just, I can prove it. To build this house with the qualities that this house has, I have, you have the contractors bills that built it. Okay, you're gonna spend minimum 25 million.

• 35:13Speaker 01

  You have to, with the bowling alleys and the lazy rivers and, and the quality of all this stuff. Okay, so here you are. You're somewhere in the neighborhood of 45 plus million. So I put it on the market for 35 and you have to wait four to five years to build it. So here we go. You could turn key, walk into this house, less than what the replacement cost is. Okay, right now we lowered the price to 31.

• 35:38Graham Stephan?

  Have you had any offers?

• 35:39Speaker 01

  I've had about a half a dozen showings. But honestly, nobody has made me a realistic legitimate offer that I would even consider.

• 35:48Graham Stephan?

  Why?

• 35:49Speaker 01

  Cause people want you to carry or, you know, people want to do some creative stuff. They all had the money to buy the house because we pre-qualified before we let them look at the house. But listen, it takes time. The market is so small for, in this price range and in this area. Now, if this area was in South Florida, I mean, if this house is in South Florida, forget about it. It'd be worth a hundred million in certain areas, like the area you were talking about earlier. Okay. I mean, but it is what it is. It's a great house. It's gonna be, you just gotta find the right buyer for it.

• 36:22Graham Stephan?

  What happens if you can't sell it?

• 36:25Speaker 01

  I just keep it. You know, what am I gonna do? I can't sell it, you know, I keep it.

• 36:29Graham Stephan?

  Would you sell or finance it?

• 36:32Speaker 01

  No, I'm not like, I don't like, listen, why would I have to sell or finance? I always say to myself, when people offer seller financing, beware, there's a reason why. Maybe it's helping them tax wise, maybe. But typically, we'll let them go to a bank. Why do I need to be the bank? Why can't they just take the money, the down payment and go to a bank? If the bank, maybe the bank won't qualify them. Well, if the bank won't qualify, why the hell would I qualify?

• 36:56Graham Stephan?

  What's your interest rate on this property?

• 36:59Speaker 01

  Well, I locked in a good rate on this thing.

• 37:01Graham Stephan?

  2% interest only, right?

• 37:04Speaker 01

  Two and a half.

• 37:05Graham Stephan?

  So you could sell it, seller financed it at 3 and a half?

• 37:07Speaker 01

  For 15 years.

• 37:08Graham Stephan?

  That's incredible, though.

• 37:09Speaker 01

  Seven years have gone by for 15 years now.

• 37:12Graham Stephan?

  So you get seven years at 2 and a half percent?

• 37:14Speaker 01

  I got about nine years left at a fixed rate loan, interest only on this house.

• 37:18Graham Stephan?

  But you could make a percent or a percent and a half if you seller financed it at 4% or 3 and a half? For seven years, yeah.

• 37:23Speaker 01

  Yeah, but I wouldn't do it. I, I, listen, I don't want to be the bank. I don't like loaning people money. That's not what I do.

• 37:29Graham Stephan?

  Yeah, but you're loaning the bank's money. It's not really your money.

• 37:33Speaker 01

  Then what?

• 37:34Graham Stephan?

  Then you take back.

• 37:35Speaker 01

  I got four clothes on him.

• 37:35Graham Stephan?

  Then you take back the property.

• 37:37Speaker 01

  I don't like doing that. I don't want to go after people. I don't want to be in a bad situation. I don't like to be.

• 37:41Graham Stephan?

  You want people going after you?

• 37:43Speaker 01

  You want people going after me?

• 37:45Graham Stephan?

  Yeah.

• 37:46Speaker 01

  What do you mean, people going after me? I pay all my bills, so nobody goes after me.

• 37:50Graham Stephan?

  Right, you'll, you'll take on debt, but you will not release the debt.

• 37:53Speaker 01

  I'll take on debt all day long because that makes sense for me. I make money on the bank's money. Plus, I'm able to spread my money out, you know, much more by using the bank's money.

• 38:05Graham Stephan?

  How much money do you have to have to buy a $30 million mansion?

• 38:08Speaker 01

  I mean, typically, you're gonna have to qualify, but if you're gonna buy a $30 million mansion, you probably have to go and get a jumbo loan. A jumbo loan is probably gonna be at least 25%. Okay, 25% of 30 million, 10% is three, three, six, seven, eight million down. And you have to qualify for the loan. You gotta prove, how am I gonna pay the loan? And then you got taxes and then you got insurance. You gotta make a substantial income to be able to buy a house like this. Or a lot of people that own houses that will buy a house like this typically, you know, have that kind of cash that they want to just buy it or put a lot down, have very little mortgage.

• 38:45Graham Stephan?

  So you're selling a $30 million mansion. You've had a handful of showings on average. The people that come see the property and want to buy it, how much money do they have?

• 38:53Speaker 01

  I mean, typically, I would think that the rule of thumb in banking is if you buy a, if you, if your mortgage, let's figure it out. If your mortgage is gonna be, let's say, 20 million, right? 20 million, today's rate's probably about 6%. Okay, so that's gonna put you at a million two a year, correct? Is that right?

• 39:13Graham Stephan?

  Yeah.

• 39:14Speaker 01

  20 million is a million two a year, a hundred grand a month.

• 39:16Graham Stephan?

  Multiply by three.

• 39:17Speaker 01

  If you're making, if you, if you gotta pay a mortgage of a million two a year, you probably gotta be making over three million a year to qualify.

• 39:23Graham Stephan?

  But even so, I heard that if you're buying like anything over 15 million, you don't really fit the 33% rule because those people kind of spread their money out a little bit more.

• 39:31Speaker 01

  They're on their assets.

• 39:32Graham Stephan?

  So realistically, like, wouldn't they, like, you have to have like a hundred million bucks like to, to justify a 30 million?

• 39:38Speaker 01

  No, you wouldn't need a hundred million. Listen, if you have a, if you have a, if you can prove you have stable income coming in or a few million a year, the bank will loan you, you know.

• 39:47Graham Stephan?

  I don't think someone who's worth $20 million is buying a $30 million house, even if they have the income to do that.

• 39:53Speaker 01

  I don't know. I mean, but no, listen, yeah, you gotta be somebody that it's not gonna hurt you. And, and, you know, to buy this house, it's gotta be somebody worth probably, like you said, 60, 70, 80, 100 million.

• 40:04Graham Stephan?

  What about buying a $10 million house? How much do you have to be worth?

• 40:08Speaker 01

  I mean, a $10 million house, I mean, I would think you had to be worth max, minimum 20 million.

• 40:15Graham Stephan?

  You think that's responsible if you're worth $20 million to spend 10 on a house?

• 40:18Speaker 01

  Depends on what your income is too. It's not just a question of your worth. Okay, you can be worth a lot of money, but, you know, what's your income? What's your returns? What's your investments? You know, the bank looks at the whole picture.

• 40:32Graham Stephan?

  Also, I'll caution you again to the, this hitting the. Hit Jack instead.

• 40:36Jack Selby?

  Because I know our, our editor is gonna be like, yo, just like.

• 40:41Graham Stephan?

  Just hit Jack instead.

• 40:42Speaker 01

  My head's down here.

• 40:43Graham Stephan?

  So.

• 40:44Speaker 01

  How much time do you guys have? I need a cigarette. I didn't even smoke.

• 40:47Graham Stephan?

  If you, yeah, if he needs to take a break, we'll just.

• 40:49Jack Selby?

  Yeah.

• 40:49Speaker 01

  Here, here, here, I'm gonna go have a cigarette, man.

• 40:53Speaker 01

  In Scotland, I just came back from Scotland. You know what they call cigarettes there?

• 41:06Jack Selby?

  So in owning a $30 million, 20,000 square foot house, how much does this cost you per year for random things?

• 41:15Speaker 01

  I mean, you know, number one, a house like this,

• 41:20Speaker 01

  pretty much requires two full-time housekeepers.

• 41:23Jack Selby?

  So you have two full-time staff members here that-

• 41:25Speaker 01

  I always had two full-time housekeepers for 20 something years, but yeah, this house definitely, it needed, you know, because you gotta maintain everything.

• 41:32Jack Selby?

  What's the cost of that?

• 41:33Speaker 01

  The house is not that much.

• 41:34Jack Selby?

  What does a housekeeper do?

• 41:35Speaker 01

  I mean, you know, what do you mean every day they got to walk the floors, they got to clean the bathrooms, they gotta make beds, laundry. I mean, you know, everything, go through the whole house, make sure everything's neat, clean and, and kept up, you know?

• 41:48Jack Selby?

  So that's gotta be a hundred thousand a year just in cleaning the house?

• 41:51Speaker 01

  I mean, it could be, you know, yeah, I mean, I don't know how much they make, but it's a significant expense. Then you're always gonna be on top of all the maintenance and stuff. You gotta have money for maintenance. Now, I did rip out all the lawns, put fake lawns in, so I cut the landscape into down to zero. You know, and I'm lucky, my guys could pop over here and trim whatever I need. Once a year, you go to the trees, that's gonna cost you no more than a few grand. It's not tremendous, you know, but the tax bill is significant, it's over a quarter million a year. And in insurance, you have insurance, you know, and-

• 42:26Jack Selby?

  How much is the insurance?

• 42:28Speaker 01

  Insurance, I don't think is much, you know, it's probably about 25 grand a year. Cause I don't have much insurance. Typically, somebody would probably spend more than that. Probably 40 or something like that.

• 42:38Jack Selby?

  And what about pricing the neighborhood? Like different contractors, when they give you a quote to replace a door as opposed to someone else? If they're walking into a 20,000 square foot massive estate, like they could jack up the prices a lot. Have you noticed any of this?

• 42:52Speaker 01

  Yeah, of course, you always gotta know what, what the industry cost is for anything you're fixing in life. You know, no matter what, you gotta know what's the industry and what AI today will even tell you. But you know, you gotta be careful not to get taken advantage of, of people that wanna overinflate your bill because you live in a big fancy place.

• 43:10Jack Selby?

  What's the craziest quote you've ever gotten for a repair?

• 43:13Speaker 01

  From small to big, I've had companies that, you know, we have what they call a Kryston system here. All the houses are run by computers. You know, they wanna charge a hundred dollars an hour just to talk to you on the phone.

• 43:29Speaker 01

  So, you know, that seemed a little ridiculous to me. I got a simple question for you, you gonna bill me for a hundred bucks, a hundred dollar minimum, you know, to talk to you? Anyway, I mean, you know,

• 43:40Speaker 01

  listen, everything you do, you gotta look at your options, what your options are. Basically, whenever I hire anybody in any aspect, I think about time, how long it takes to do the job, materials, overhead and profit. Okay, and I come up with a realistic price that should be fair for everybody. Okay, if it's a two-hour job and the guy's making whatever, he bills the guy out at, you know, 50 bucks an hour, I don't know, these days with plumbers, electricians, I don't know. All right, so you got a couple of hours with a plumber, you know, that could be 100, 200 bucks. Then you got the materials, is a toilet, all right, what toilet do I want? Toilet could be another 200 bucks.

• 44:25Speaker 01

  Then you got overhead and profit, even though he's already making money, over billing out the guy for what he's paying him. So you come up with some sort of, you know, realistic number that makes sense.

• 44:37Jack Selby?

  People are kinda scared to ask the contractor, like, how much did this cost you? How much upcharge are you having, like to see how much-

• 44:45Graham Stephan?

  Can you even trust them?

• 44:46Jack Selby?

  Yeah, can you even trust with their-

• 44:47Speaker 01

  The problem is, number one, you can do a lot of homework on your own. All right, with today's technology, you can figure out what it takes to fix almost anything. And then basically, listen, if a contractor is not willing to be transparent with you, knowing times that it is, he's ripping you off.

• 45:02Jack Selby?

  So you should ask-

• 45:03Speaker 01

  And you should be able to figure it out for yourself. The other day, on top of our LA Fitness down the road here, we have this giant metal crown thing that's like a, you know, like a design, it just sits on the roof. You know, some special design they came up with, all the LA Fitnesses have them. It needed a paint job.

• 45:23Speaker 01

  All right, the guy throws me some crazy number out there. I said, listen, is because it's on top of an LA Fitness? You know, anyway, the long story short is, we sat on the phone and I said, okay. He says, well, I need a lift. I said, okay, how much is the lift gonna cost you? All right, I need a lift for two days to do that job. Fine, how much is the lift gonna cost you for two days? I can call up and find out myself. All right, we figured out what that was. It was like, I don't know, be delivered and picked up, thousand bucks. Then,

• 45:52Speaker 01

  what's the paint cost? All right, we do need special paint, so it doesn't rust again like it did. And it might be some prep work. It's probably a two-day job for about a couple of guys. All right, couple of guys, couple of painters, maybe they're worth 300 bucks a day. That's three, six, nine, 12, make it 1500 in labor. What the hell, I'm always a little, we got 1500 labor, we got a thousand bucks for the lift, it's 2500. The paint is probably only a couple of hundred, few hundred bucks, or up to two grand. He's gotta make, you know, 20%, another 500 bucks. The job's cost 2500 dollars.

• 46:32Jack Selby?

  And what'd he quote you?

• 46:32Speaker 01

  Five thousand. We settled at three.

• 46:37Jack Selby?

  So you fully went on, hey, itemized expenses, tell me how much everything-

• 46:40Speaker 01

  You know, everything is accessible these days. You know how much stuff costs, you simply go online and figure it out. Even a part for my boat, I will look up the part number and see what it would cost me to buy that part. Okay, and in boats, you gotta be really careful, boats, planes, I can't do much about it. You can't argue with the plane guys. Cars, I do, I do. My son, my, my partner that raised me in real estate, left my son, when he passed away, his Rolls Royce, Vincent, the black one.

• 47:12Jack Selby?

  Wow.

• 47:13Speaker 01

  He loved the car. But the car was starting to get old and, you know, fixing an old Rolls Royce can be very expensive. He went to the dealership because he needed some kind of turbo injectors and this and that. Forty thousand dollars. That's what the dealership wanted.

• 47:31Speaker 01

  Luckily, I got a friend down in Orlando who is in the car business. And he knows a mechanic that used to run a dealership, but started his own company, his own auto repair, right? We took, we had the car put on a truck, we shipped it down to Orlando. And the guy looks at it, he says, you know what, I could rebuild these. We spent 4,000 dollars instead of 40.

• 47:58Speaker 01

  And then we sold the car. There's more is gonna keep him-

• 48:01Jack Selby?

  Yeah, of course.

• 48:03Speaker 01

  And then I gave him my Bentley. I said, I'll tell you what, sell your Rolls Royce, I'll give you my Bentley, there you go, done.

• 48:09Speaker 01

  So that, that just goes to show you, 40,000 compared to 4,000.

• 48:16Speaker 01

  That's the way it goes with everything, you gotta, money, you gotta, you gotta spend your money wisely. You can't spend money, you know, on anything significant unless you do your homework. Everything is ho-

• 48:29Jack Selby?

  Just hit Jack instead.

• 48:31Speaker 01

  All right, you gotta do your homework. All right, anything you spend your money on, before you part with a penny, do your homework, make sure you're not getting ripped off. You know, in our company, we have a rule, we have to get three bids on everything. I got a million dollars worth of AC work I gotta get done on a university I bought. Well, I had contacted three different AC companies and see, and make sure they're all bidding on, like when my son builds a building, I was impressed. He had seven contractors bid on exactly what he needed done. And then he compared each bid. Now, they played their little games where they, they hire on one thing and loan another, but in the end, you gotta pick the guy that you know he's not sticking it to you, at least not too much.

• 49:16Jack Selby?

  How do you know that they're not gonna quote you really low and then go in and say, well, actually, when they're halfway through the job?

• 49:23Speaker 01

  Well, those are considered change orders. I mean, once you got a contract, you got a contract. When you're building, you got a contract. Okay, this guy has to build it for this price. Now, if you start making changes, that's a different story. But he's gotta bid it based on whatever the prices are, the materials at the time, he's gotta bid it on the labor. I mean, you got a contract in writing, he can't go up in the price.

• 49:48Speaker 01

  Always get things in writing, always.

• 49:50Graham Stephan?

  So what are you noticing then throughout the entire real estate market right now? How has it changed in the last six months?

• 49:57Speaker 01

  Weird zone right now. Okay. We're in a weird zone. But if you want to make money in real estate, it's all about 99.9% of it is finding a deal. Find a deal and make sure you bought it for the lowest possible price the seller would sell it for. You have to come in and lowball.

• 50:19Speaker 04

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• 50:49Speaker 01

  Not saying you're going to end at that price and get at that price, but you got to play the game. You got to get in low. So you're down here, he's up here, and then you got to set your maximum price you're willing to pay. You have to buy it right. If you don't buy it right, you get screwed.

• 51:06Graham Stephan?

  What type of real estate has the best deals right now? Is it apartments, hotels?

• 51:11Speaker 01

  All right, number one, you don't, you want to run away from office space because nobody's leasing it. All right, it's a bloodbath in offices. Okay, unless you have some magic wand that you can rent the space out, you're die. And you can't convert them to anything else. Everybody's tried apartments. I thought maybe storage, but listen, it's far fetched. Stay away from office. Multi-family is always a great sector of real estate. Okay, because it's not very difficult to run. People pay your rent, you fix something if it's broke, you maintain it, you pay your bills, you're done. And the banks love to loan on them. But you have to buy them right. Okay, you can't go on strictly projections. A lot of people buy because they say, oh, yeah, rents are going up.

• 51:56Speaker 01

  Rents aren't always going up. Right now in Fort Myers, we just bought, rents are going down. My competition is giving away two months free.

• 52:04Graham Stephan?

  So how do you compete with that?

• 52:05Speaker 01

  We try to, you know, go beyond the normal marketing leasing. Well, number one, the product we bought was builders condos. That's why I felt good about the property. There is not one apartment building that you can rent in Fort Myers. That's going to give you the square footage and the amenities that we have because it was built as condos. You're basically renting something somebody typically would buy to own. With garages, with private elevators, with big square footage, you know, things like that. Um, so I felt like we can market that property above everybody else's regular apartments. Plus, we're going to think out the box. We're going to go right to the big employers.

• 52:49Speaker 01

  We're going to do stuff management companies won't do because we're the owner. A management company, and don't get me wrong, there are good management companies out there. But they're still, even the best management companies are not going to cross the line and go beyond the call of duty. They don't care. They're going to charge you a fee based on the gross rents that they collect. And they're going to do an average job of industry, industry standards. But we as the owners, we're going to go beyond that. You know, uh, yeah, there's a guy named Paul that works for me, right? I gave him a building out in that senior building I, I, I have. And then it was a problem filling the vacancies there. Why? Because it was in a very rural area. What does he do?

• 53:33Speaker 01

  He buys those cheap banded signs. He drives around all maybe a 20 mile radius or 15 mile radius. He's sticking signs out in the high traffic areas, grocery stores. He's contacted senior centers and programs. We do stuff that nobody else is going to do because we're the owners. All right. Average people, employees won't even do it, you know? I mean, we, we, as owners will instruct employees to do it and they have to do it. But a management company, they're not going to, they're not going to lose sleep. We lose sleep when we lose money. So, you know, multi-family is always the best, smartest thing. If you're small, try to get into a fourplex. Why? Because up to four units is still considered residential.

• 54:17Speaker 01

  It's very easy to get a loan for. You can get FHA, you can get VA if you're a veteran. Four units is a great place to start. Retail, the only way you're going to make money in retail, I'm telling you right now. You have to buy with vacancy. I mean, otherwise you're buying for a good cap rate. You buy at a cap rate, that's the end of it. You get your little increases over time and that's it. Retail is strictly about buying it with vacant space that you could fill. That's your upside.

• 54:44Graham Stephan?

  How much does bad management ruin a deal?

• 54:47Speaker 01

  Management is everything in real estate. Management is everything, you know? Maintaining a property, keeping it rented, making sure you're at market rents, taking care of your tenants. I mean, management is, is, is after you buy it, 99% of real estate is finding a deal. Then 99% of it, once you, after you buy it, is managing it. And if you're doing rehab, you really got to make sure you got a good plan.

• 55:16Speaker 01

  And then you talk about hotels and storage facilities, those are more a business.

• 55:19Graham Stephan?

  Yeah.

• 55:20Speaker 01

  That's all based on supply and demand. You have to buy real estate like that where you know there's a demand. Okay, because I've seen plenty of places, hotels and storage places do well in a high demand area. And I've seen them go belly up because there was no demand.

• 55:36Graham Stephan?

  What's the worst situation you've seen an owner be in?

• 55:40Speaker 01

  I mean, typically they overpay. That's the biggest problem you're going to see in real estate. You overpaid and now something came up and you're going to be underwater. Okay, you didn't do your homework, you didn't check the roof, you didn't prepare for, you know, everything has a life expectancy. Okay, that's why the, on your tax return, everything is depreciated. Residential is 27.5 years. They depreciate your rental income. Why? Because they feel like these things are losing. And so eventually they're going to have to be replaced or money's got to be pumped into them. On commercials, 40 years. So basically, you know, everything has a life cycle. You got to be prepared for the end of that life cycle.

• 56:22Speaker 01

  If I walk into a 200 unit building and we look at all the ACs and the ACs are all 20 years old, ding, ding, ding. I may have to be replacing a lot of ACs soon, same appliances. You got to check the roof. You got to make sure, you know, you got to do your homework, plumbing, electrical, equipment. You got to take all these things into consideration when you buy a piece of property. You got to look at the future. You got to protect your, for what could and will eventually happen. We all know nothing lasts forever.

• 56:50Graham Stephan?

  How quickly could you tell if a seller is motivated? Are there any signs to look for?

• 56:55Jack Selby?

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• 58:20Graham Stephan?

  How quickly could you tell if a seller is motivated? Are there any signs to look for?

• 58:24Speaker 01

  If it's on the market, okay, I don't believe in all that off market. Off market, off market, please, I ain't got time for off market. I want something on the market, the seller's ready to sell. Okay, I mean, you got every, every deal has a different story. The first question I ask a broker, well, I don't even ask the question, they tell me right off the bat. What's the story here? What's the story? There's a story behind every real estate deal. You know, is the partnership splitting up? Did the guy pass away and the family don't want it? Does the place need work? He doesn't want to fix it up? Does he have a problem managing it? There could be a million different reasons why it's selling. You got to find out the story behind why he's selling. And then you have to act accordingly.

• 59:09Speaker 01

  And then you got to come in and lowball this shit out of it and make sure you're buying it at the lowest price possible.

• 59:16Graham Stephan?

  Do you ever walk away from a deal just so that they'll chase you?

• 59:19Speaker 01

  I walked away from plenty of deals and they chased me back down.

• 59:22Graham Stephan?

  Does that work? Is that a good strategy?

• 59:24Speaker 01

  It happens because, you know, I know this guy is not getting 150,000 a unit when his rents are only 12 or 1300 a month. He's dreaming. Okay, he thinks he, he created his own lottery. It don't work that way. It's all numbers, it's all underwriting. So I'm going to say, listen, I can't pay him more than 100 a door. Simple as that. You won't hear from him, we'll go through his marketing process, the broker will come up with no offers. And he'll either move on to another broker, which is a waste of time, or he'll have to come down to reality. Okay, and a lot of times they'll come back to reality, the broker will call me up and say, all right, he won't take you 100, but he'll take 110 if you will move quick and show them some hard money.

• 1:00:09Speaker 01

  I get my deals because I don't, I move quick. I get in there, I get all my inspections done right away. All right, I, I have bridge loan that I can do myself with a line of credit. So I don't need to wait on no banks. Okay, and I can move quick and quick money normally gets you the best deal.

• 1:00:26Graham Stephan?

  What's the most insulting offer you've made that's been accepted?

• 1:00:30Speaker 01

  I mean, I don't, I don't think there's anything. I mean, a lot of people say that, oh, he was insulted by your offer. This is business. This is numbers. This is not a personal.

• 1:00:39Graham Stephan?

  But do you ever just throw out a number?

• 1:00:41Speaker 01

  I lowballed the shit out of stuff. I've lowballed the shit out of stuff and I've lost them. Why? Because I didn't want to pay more. I've gone to my max. I always determined this is the maximum I can pay for a property to keep me in a, in a safety zone that I feel safe in. Okay? I just offered four and a half million dollars on a 16 story empty building over here. Not far from here. It was ruined by the flood. The broker said, listen, yeah, you're going to give them quick cash money, but I got other guys who are real players offering six and eight and all that. I said, well, it's not for me. Place needs a $10 million rehab. I knew for a fact, I recalculated. My son had to walk up 16 flights in a roof

• 1:01:26Speaker 01

  because the power is totally shut down in the building because of the flood. And we figured it out. We need 10 million bucks. We need all new power. We need all new plumbing. We need, you know, the, the hot water heater systems. We needed new elevators. We needed everything. We didn't even fix up all the units, you know, blah, blah, blah, blah, blah. We figured 10 million bucks with parking lids, parking lots, landscaping, all that. And I said, if I pay more than 14, 4.5, and I gotta throw 10 million into it, I'm into for 14, five. Well, it's only like 180 units and they're small units. So it don't make sense. You gotta set your comfortable price and not exceed it.

• 1:02:03Graham Stephan?

  Do you ever buy anything you don't want just because it's a good price?

• 1:02:06Speaker 01

  I mean, if it was a good price, then I should always have the option of flipping it. If I got it for a good price, I could always flip it. But I mean, listen, I bought deals and it wasn't, maybe I shouldn't have bought it. I didn't, maybe because of the tax reasons, but I don't know. I mean, you really never should never buy a deal that you're unhappy with. If you're not happy the day of closing and you feel like you made a smart decision, you shouldn't be closing that deal.

• 1:02:31Jack Selby?

  What's the quickest you've ever flipped a property?

• 1:02:34Speaker 01

  I've flipped properties. I've sold them before I even bought them.

• 1:02:38Graham Stephan?

  So you like wholesale, sold it, wholesaled it?

• 1:02:40Speaker 01

  I bought a package of properties. And somebody wanted to buy one piece out of a five package deal. So when it came to closing, I bought it at a certain price. But then I let the other guy take over that piece at a higher price.

• 1:02:56Graham Stephan?

  How much did you make on that deal?

• 1:02:58Speaker 01

  Probably about 30 grand a door. It was about 20 doors. I made about 600 grand. I've also bought, flipped deals at the, uh, I used, when I was young, I would do foreclosures on the courthouse steps. That's the way they used to do them. We'd all stand on the courthouse steps and the property's going up for auction. And the guy comes out from the county and he's taking bids and all that. And we're all bidding against each other. And I would win properties in California. And as soon as the auction's over, the guy comes up to me and says, uh, you know, I should have overbidded you. I really wanted that place. I was willing to pay X amount of dollars more. Here, give me the money. I wouldn't even take title to it.

• 1:03:37Graham Stephan?

  Wow.

• 1:03:38Speaker 01

  Give me the money. I tell the guy, put it in his name. I mean, there's always opportunities there, you know, if you find the right deal.

• 1:03:46Jack Selby?

  So purchase price is the most important thing?

• 1:03:48Speaker 01

  Most important thing. How much are you paying for that property? That's all that matters.

• 1:03:54Graham Stephan?

  What do you think about using AI to evaluate?

• 1:03:56Speaker 01

  AI, AI.

• 1:03:57Graham Stephan?

  What do you think?

• 1:03:58Speaker 01

  That would be I, Ben's intelligence. And you go to benmail.com and get me on the phone and you can get some of Ben's AI.

• 1:04:06Jack Selby?

  That would actually be interesting.

• 1:04:08Speaker 01

  AI, Ben's intelligence.

• 1:04:09Graham Stephan?

  I like that.

• 1:04:09Jack Selby?

  That, that's a good idea. So people are making, you know, your chat GPT, they have other GPTs where you could put in all of your information, like how you analyze a deal, everything and record for three hours straight, five hours, however much it is.

• 1:04:22Graham Stephan?

  Just upload all of your videos, by the way.

• 1:04:23Jack Selby?

  Upload everything and then chat GPT can make a BI. And people can ask it questions and it's like you're getting an answer from Ben.

• 1:04:31Speaker 01

  We use AI a lot, especially with my son now when it comes to contracts and leases and things like that. It's actually killing lawyers right now.

• 1:04:37Graham Stephan?

  Really?

• 1:04:37Speaker 01

  It's cutting down lawyers' hours and their bills.

• 1:04:40Graham Stephan?

  What about for evaluating cash flow? It's like, what's a good price to pay for this? Is it accurate and comping?

• 1:04:46Speaker 01

  I don't know. When it comes to cash and money, I don't, I don't trust anybody but my own self and a calculator and a pen. I'll sit there, old school, and I'll write down, how much money is this place going to bring in a month realistically? What are my costs going to be? Okay? I'm going to tell you, you can do all the underwriting in the world and I'm always right. And my son just doesn't, he likes to do all the, put in the numbers and do all the calculations and spreadsheets and all the stuff. And it's great. He gets it in a penny almost. Me? The no fail sure way of being safe. If you're dealing with 100 plus unit buildings, okay, this really doesn't work as well.

• 1:05:30Speaker 01

  It's too safe for less than a hundred units because less than a hundred units typically don't have the same expenses. Okay. But for a hundred plus units, it's real simple. You figure out what your gross rents are. Let's say the place is making a million dollars a year gross rents, right? Okay, that's reasonable. Million dollars a year. You cut it in half. Half your money is going to your, all your expenses, include your property taxes and insurance. Half the money is gone to operate. That's the way it typically works. Then you have to calculate your debt. So you got a million bucks coming in, a half a million dollars to run the place.

• 1:06:11Speaker 01

  Then you gotta figure out how much debt you're taking on and what the interest payment's going to be to come off that half a million. Then that's your going to be your return. It's always going to be so close, it's going to blow you away.

• 1:06:24Jack Selby?

  They say for single family homes, it's usually about 15%.

• 1:06:28Speaker 01

  15 is a lot. Yeah. 15, single family homes, smaller buildings, it don't work. You get a much, you have less expenses. You don't use the 50% rule.

• 1:06:35Graham Stephan?

  Is that what you use?

• 1:06:36Speaker 01

  You only use the 50% rule because now.

• 1:06:38Graham Stephan?

  I don't know what it is.

• 1:06:38Speaker 01

  You understand 50% rule works for 100 plus units because you have managers, you have maintenance, you know, you got a payroll. You got grounds. You got all these expenses that you won't have with a single family house. Single family house is really nothing. You collect the rent and if something fixes, you send somebody over to stop a toilet. Typically you can make the tenant take care of their own grounds if it's a single family house. You don't pay no utilities. It's all on the tenant. There are no expenses, but single family houses don't cash flow. They're the worst investment you could ever buy for cash flow. You flip single family houses. You buy them, you fix them. Sorry, you flip them. Don't ever buy a house for cash flow. It's stupid. It makes no sense.

• 1:07:23Speaker 01

  I've never seen it make sense. And then, then some people end up with a ton of them. Now you're sitting with all these single family homes. You're not going to be able to package them together and sell them. Very rare. Okay? Very, very rare. You have to sell them individually and they're not going to cash flow, especially if you got debt on them. And if they don't cash, and if they don't have debt on them, you're going to get a shit return.

• 1:07:44Graham Stephan?

  Now, a lot of people say in terms of single family, that we are in a housing crisis. But there does seem to be a lot of inventory right now on the market for single family homes.

• 1:07:52Speaker 01

  There's a ton of inventory because nobody's buying houses right now. Why? Because they don't, they, they don't, it doesn't fit. Their budget is six and a half percent interest rate for the house they want. They gotta pay six and a half percent interest rate. They gotta pay principal. They gotta pay insurance. They gotta pay taxes. It now's the time to rent. So now is definitely the time to rent.

• 1:08:12Graham Stephan?

  So what are you telling people when they say, should I buy a house right now?

• 1:08:15Speaker 01

  I mean, if your budget can handle it and your lifestyle requires it, you know, or it's a necessity would, you know, and you can handle it, then yeah, you always buy a house if you can afford it because it's a personal thing. You know, it's not really an investment. Houses are not investments. Typically, yeah, you buy a house and you live in it for five years. It typically appreciates. You make some money. After two years, you don't have to pay no capital gains tax up to 250 or 500,000 if you're married. It works. It works. But it's not an investment really. Houses are personal, uh, purchase. And never buy them for investment unless you're flipping it. I mean, typically the best, smartest thing to do is you buy a house and you improve it. Cause the house is that, there's a reason why a house is not selling too.

• 1:09:01Speaker 01

  Okay. Because there's something wrong with that house. Maybe it doesn't have enough bathrooms. Maybe it's too small square footage. You come in and add value to the house. Maybe it needs to be fixed up. Whatever the story is, is there a solution to the fix?

• 1:09:16Speaker 01

  You've come up with a solution. Do the numbers make sense based on what you're buying, based on what you're spending or proving? And what the market will pay for it? And you want to be below the market so you know you can sell it quick.

• 1:09:26Graham Stephan?

  This is the first time though, that I've ever seen it where people are getting less than the price that they spent fixing it up. Because it seems like the prices right now for materials and labor, people are overspending. So they might put, I've seen $500,000 into a property, but they might only get back 375, 400. So they're taking a lot, fixing it up.

• 1:09:44Speaker 01

  Things change. Nobody knew that the price of gas was going to go to $5 a gallon. Okay? That affects every aspect of our human life. Everything you need is tied to oil. You know, because the cost of making stuff, the cost of shipping stuff. So now because the price of that went up, the price of everything goes up. You have, you know, nobody has a crystal ball.

• 1:10:08Graham Stephan?

  This is what I thought that would really help the housing market. I wish they do this. Imagine if they said for people that build a house in the next 10 years. If you build, your profits could be tax free. Imagine how many people would build a house everywhere they could. It seems like that would completely solve the housing shortage.

• 1:10:27Speaker 01

  You're talking about profits for who? Somebody buying them just to sell it?

• 1:10:30Graham Stephan?

  Yes, a builder, building, adding a new housing unit onto the market. If you're able to add, if you take the risk, the time, the capital.

• 1:10:38Speaker 01

  How's that going to help anybody except make the builders more money?

• 1:10:41Graham Stephan?

  Because it adds more supply onto the market and more supply should lower the prices.

• 1:10:44Speaker 01

  Well, it's not so much, I mean, listen, the cost of building is not cheap. There are so many developments right now. I bet you if we looked at it, you go to Lenars or you go to all these places. I'm sure they got plenty of developments where they can't sell those houses and they already built them. Or they had plans to build them. Stop kicking me.

• 1:11:06Graham Stephan?

  Jack.

• 1:11:07Jack Selby?

  I didn't know that was your foot. Yeah.

• 1:11:08Speaker 01

  You want to have a bite to eat?

• 1:11:09Jack Selby?

  Yeah.

• 1:11:10Speaker 01

  All right, let's have a bite to eat.

• 1:11:11Graham Stephan?

  Right now?

• 1:11:12Jack Selby?

  Sure. If you're hungry. Yeah, we could take it.

• 1:11:14Speaker 01

  I mean, we'll eat quick and then we'll knock it out. What time you guys got to get out of here?

• 1:11:18Graham Stephan?

  We don't, today's, today's your day.

• 1:11:31Speaker 01

  What do you want to talk about? Banking?

• 1:11:34Jack Selby?

  Why is banking the most important thing if you're trying to build wealth then? Like, what, this seems like the-

• 1:11:37Speaker 01

  Because you need their money. You got enough money to buy a piece of real estate? No, average person don't. You got it, the bank is your best friend in the world. Your bank becomes, your bank comes before your wife.

• 1:11:52Graham Stephan?

  Really? So if your banker calls at the same time as your wife, which one do you pick up?

• 1:11:59Speaker 01

  The banker. My wife knows, well, banker calls? Done. Nobody's more important than your banker.

• 1:12:07Graham Stephan?

  Okay, what about your wife and your banker? Both want to go out on a Saturday night, 9:00 PM? Who has priority?

• 1:12:15Speaker 01

  Typically, bankers, you know, want to take out on dates.

• 1:12:18Graham Stephan?

  It's not a date, it's just a business meeting. They just say, hey, Ben, I want to-

• 1:12:22Speaker 01

  You don't do banking after hours. We do lunch meetings, stuff like that. But the point I understand trying to make is, if you're in real estate, banking is the most important person in your life is your banker.

• 1:12:36Jack Selby?

  So if you're trying to develop a relationship with a bank, do you pick a specific bank? Or do you try to have relationships with multiple banks? Do you get to a point where you don't shop the rate they provide you anymore?

• 1:12:45Speaker 01

  You'll get to a point where you don't need to shop around. But at first, you gotta kind of see who's giving you the best deals. And whoever gives you the best deals, the best rates, the most LTV, you know what LTV is? Loan to value. The people that are gonna make your life easiest with the best terms, the best rates, then you'll end up throwing more stuff their way, of course, common sense. But, you know, I used to work with 10 different banks. Now I only work with one.

• 1:13:13Graham Stephan?

  Who's the best bank?

• 1:13:15Speaker 01

  In my world?

• 1:13:16Graham Stephan?

  Yeah.

• 1:13:16Speaker 01

  B of A.

• 1:13:17Jack Selby?

  Bank of America?

• 1:13:18Speaker 01

  Biggest bank in the country, in the world, I think.

• 1:13:21Graham Stephan?

  Why not Chase or Wells Fargo or-

• 1:13:24Speaker 01

  I've dealt with Wells Fargo. I've dealt with Chase. I dealt with them all. The problem is, when you get to my level, you need to have a brokerage relationship and a banking relationship. So you need two companies, or basically, B of A is the parent company. B of A owns Merrill Lynch, right? So Merrill Lynch knows the brokerage. B of A knows the banking. Right? So basically, my broker technically works for B of A. Because he works for Merrill Lynch.

• 1:14:09Speaker 01

  Merrill Lynch is under B of A. They tell Merrill Lynch what to do and control everything. It's a relationship. The broker goes to bat for me to get my loans. Why? Because I'm his client. And the more money I make, the more money goes in his brokerage. The bigger he is. It's all ties together. But I've actually believe I made it to the top level. I've been with every big shot bank there is. Okay? And I'm gonna tell you, they've been the best and easiest to me. Not only that, once you have, when you have that kind of money, to be in a brokerage, wealth management side, you're basically getting a lot of help. Because these people care about you. They care. They have to care.

• 1:14:53Speaker 01

  Because your well-being is their well-being. Okay? If you make more money, more money goes into the brokerage. And they get credit for all the loans they throw B of A through the brokerage. Everybody's making money.

• 1:15:07Jack Selby?

  That sounds very similar to my second loan that I got. The first loan I got, I shopped it around with like 10 different places, got a really good loan at 2.875 during COVID. And then, now, I bought last year. And the problem was, I shopped it around, first of all, couldn't get qualified because like YouTube or income is very hard to show. But I shopped it around a bunch of different places. I was getting 6.5%, 6.34%. And the best rate I got was actually through my brokerage. So I used Schwab-

• 1:15:33Speaker 01

  Did you tie your assets up to get the loan?

• 1:15:37Jack Selby?

  I actually don't think that I did. I think I was able to leverage my relationship with-

• 1:15:41Graham Stephan?

  He got a discount. He got a discount because of the assets with Schwab.

• 1:15:45Jack Selby?

  But I didn't, I don't have to keep my assets there.

• 1:15:47Graham Stephan?

  No.

• 1:15:48Jack Selby?

  It just showed, because I was also having trouble qualifying, but having assets in Schwab, I was able to use-

• 1:15:52Speaker 01

  You don't do tax returns?

• 1:15:53Jack Selby?

  What?

• 1:15:53Speaker 01

  You don't do tax returns?

• 1:15:55Jack Selby?

  Tax-

• 1:15:55Speaker 01

  Do you file tax returns?

• 1:15:57Jack Selby?

  Oh, yeah, yeah, yeah. The problem, but as an entrepreneur, you have like weird money flows and routing and stuff like that. And this was confusing them and it wasn't like getting their seal of approval. And so I had to shop it with Schwab. And Schwab has Rocket Mortgage. They're, you know, that's like their Rocket Mortgage's parent company is Schwab. And so I was able to get the best deal by miles, actually using the brokerage.

• 1:16:19Speaker 01

  There you go. It's all about relationships.

• 1:16:21Graham Stephan?

  So if someone's just starting, where do they begin? Do they go to Bank of America?

• 1:16:26Jack Selby?

  Credit unions, like-

• 1:16:27Speaker 01

  Listen, when you first start, it's a whole different picture.

• 1:16:29Jack Selby?

  Yeah.

• 1:16:29Speaker 01

  You go wherever you can get in. Okay? You know, because if you just start now, you're not gonna walk into a bank like a big shot and want to get a loan. It's not gonna happen. Okay? Like I said, it goes back to risk. You know, if you're still a high-risk person, then, you know, you're gonna have to shop around. You should definitely be your first time buyer. You should be doing FHA with low money down and the government backing a percentage of that loan. Okay? Typically, most people start with FHA when they want to buy one to four units. That's what I think. You know, but when you first start now, you just gotta shop around, get the best rate, like we all did. I used to borrow from hard money guys when I was in my twenties. Why? There's no bank would loan to me.

• 1:17:12Speaker 01

  And then, once I got established and I made a few bucks, then I went to the D paper. Then I moved up to the C paper. As I move up the ladder, the interest rate comes down. And the terms get better. You know? And then I eventually went to B, and now I'm at A. B of A.

• 1:17:30Graham Stephan?

  So why is it that you want to do so much consulting? I'm curious why you enjoy it so much.

• 1:17:36Speaker 01

  To help other people, you have to do it to understand it. Okay? When I get off the phone with somebody knowing that I made an impact to their life and I helped them, I get a certain human feeling that money can't buy it. You can't buy a kind of feeling. You know, it's just like I felt that I really did something in life. I accomplished something to help other people while I was on this planet. Okay? I just, I know it's the right thing to do. Okay? It's like religion. Some people believe, you know, and the religion's part of it. They get some kind of special religious feeling. I get a great feeling by knowing that I helped people while I was here. I did it and I showed them how to do it.

• 1:18:20Speaker 01

  And helping people improve their lives. If the whole world acted like that, it would be a beautiful, peaceful world. I mean, honestly, you know, helping people that generally just want to improve the quality of life. I came from nothing, from the most dangerous neighborhoods in the world. I should have been dead or locked away in jail, growing up in New York back in the 70s and 80s. And luckily, the army saved my life. And I just know that helping other people is the right way of living. That's the way humans should live. Always try to, I'm not saying give away shit. I'm not saying, you know, some, I mean, helping people help themselves. That's the greatest thing in the world. Because then they don't need you.

• 1:19:05Graham Stephan?

  It's interesting to me because when we're taking breaks between the podcast, the one thing you get so excited about, if you just want to talk about is a consultant.

• 1:19:13Speaker 01

  I like it.

• 1:19:13Graham Stephan?

  Even when we're just hanging out, if you want to talk about a consultant.

• 1:19:16Speaker 01

  About their problems and helping them resolve their problems or putting together a plan that they're gonna be successful. It's, I'm passionate about that, okay? And not a lot of people, like I said, I've had some sports guys, you know, come and tell me, you know, you're really lucky. You know, yeah, we go out there, we entertain and we score and people clap and applaud. But you're actually helping people. I mean, what greater gift is that in life to that, to help the next person come up and enjoy their life and live a better life? It just makes everybody happy when everybody's doing well, doesn't it?

• 1:19:53Graham Stephan?

  Why don't you write a book?

• 1:19:55Speaker 01

  I don't know how, I never went to high school.

• 1:19:58Graham Stephan?

  You don't have to write it, though. You could have someone else write your book.

• 1:20:00Speaker 01

  Ghostwriter. I need a ghostwriter.

• 1:20:02Graham Stephan?

  Yeah, you could have someone who just follows you around for a year.

• 1:20:05Speaker 01

  But I have to find the right person and sit there and go through my life story, whatever, and it's fine. I mean, there's a lot of things I could do, but, you know, I need the right people to help me.

• 1:20:13Graham Stephan?

  I think you could-

• 1:20:13Speaker 01

  You can't do everything in life yourself.

• 1:20:15Graham Stephan?

  You could make, I think, one of the best real estate money, wealth- South box in existence.

• 1:20:19Speaker 01

  I mean, you know, listen, eh, to me, it's such just something that I really enjoy. You know, if I could stop even being in real estate tomorrow and just help other people, I would definitely love doing that. Plus, I could do it, excuse me, from anywhere. You know, so it's just, it's a great thing, you know, imagine if the whole world just had that. You know, if all the successful people in the world helped other people, it's like the old saying, you know, the oldest saying in the world. Give a man a fish, he eats for a day. Give the man a fishing pole, he eats for life. You ever heard that before?

• 1:20:55Graham Stephan?

  Yeah.

• 1:20:55Speaker 01

  All right, so there you go. It's a perfect sense. Teach people how to help themselves. Get them a push to where they can help themselves and they can grow as big as they want. That's what you should do in life. Now, it's up to them how big they want to grow. But if you help them, at least they can't say nobody ever tried to help them.

• 1:21:17Graham Stephan?

  How do you know who is worth helping and who is not?

• 1:21:19Speaker 01

  You could tell by, you know, they explain their situation, you know, people, the average guy calls me up. He tells me, you know, he's married, he's not married, he's got kids, he owns a house, he doesn't own a house, he's got this much in the bank. This is what his annual salary is. What do I do?

• 1:21:36Speaker 01

  And we sit down and we go over your options. I don't tell him what to do. I just tell him what his options are, what he could do if he applied himself. And what I would do if I was in his shoes, like all these young guys in college. I got, I got a big, uh, audience of college kids. That's what my, all my audience is. I've even talked to colleges. And I tell every one of these young guys in college or girls. Get your real estate license while you're in college. Okay, you're already going to school. What's one more course online gonna hurt? Take the course online, take the four hour test. Right? And it's a license to make money.

• 1:22:19Speaker 01

  But not only is it a license to make money, it's gonna put you in a circle of people that are in real estate. You got that license, you can walk into a busy brokerage that's doing deals, you could hang your license there. You latch on to a team or other people who are seasoned in real estate, you learn from the ground up. And, and you're in it, you're in the mix. That's how we say in the street, you gotta get in the mix. You know, it puts you around what's happening if you're serious about being in real estate. And once you learn to sell for other people, then you end up buying your own. Or, in my case, I went the management route. I didn't go the sales route. Uh, I went the management route. I started managing other people's properties.

• 1:23:04Speaker 01

  And then, if you can manage other people's properties, you, Joe could manage yourself, your own. As long as you, you know, you had the money to buy the property. So my entrance to real estate was management. People would pay me to manage their properties and I did very well. Then I just moved on to ownership. I mean, you know, it's up to the person to just take that ride and drive that car in a direction they want to go. But pushing people, giving them some gas to do it, that's what is, is a great thing to do. Cause once they get the gas in the car and they start the car and they start driving. And they start traveling and, and accumulating real estate assets and making money.

• 1:23:45Speaker 01

  I mean, that's, they're on their way to a great life. Listen, we all know, or maybe he doesn't know, I know you know. Listen, going through life without money sucks. Let's face it. I feel sorry for all the people that have to go to bed at night, wondering how the hell are you gonna pay their bills? Do you know what the hell? I pay, I'm not kidding you, I pay five, six, seven, eight kids. I pay for eight kids to go to private school.

• 1:24:13Graham Stephan?

  How much?

• 1:24:13Speaker 01

  Each kid is over thirty grand a year.

• 1:24:15Graham Stephan?

  Oof.

• 1:24:16Speaker 01

  The ones in college, oh my God, that's gonna jack me up with room and board to fifty or sixty.

• 1:24:23Speaker 01

  Okay, I mean, you wanna, making money, it's definitely, it's part of our life. It's our system. It's part of being human and, you know, in, in, in, in our world. Okay, we don't live out in the woods, we're not hunters, we're not killing for our food, you know, having money does make your life easier. Knowing that you got enough money to pay your bills, get your kids a good education, live in a decent house. Not worry about your car breaking down, you can't fix it. Insurance, you know how much expensive it is to live these days? It's crazy. I don't know how my employees do it. Okay, they got rent, they got utilities, they got cars, they got clothes, they got food. It costs a fortune to live these days. So anything I can do to help people.

• 1:25:09Speaker 01

  Make their lives easier and better by making money is a great thing. And like I said, it just, it would be so great if everybody thought that way. And everybody tried to help other people get ahead. People that want to get ahead, they gotta have the want. You can't waste your time with somebody that just doesn't want it or have the drive.

• 1:25:28Graham Stephan?

  What do you say to people though that want to tax you more?

• 1:25:31Speaker 01

  Listen, running a country is running a business. We need leaders in charge that are more like accountants. That's what we need. We need accountants to be politicians. Cause it's all about money. You know, like DeSantis is talking about, you know, giving a bunch of property tax relief. Well, if the counties can handle it and not collect as much as they're collecting, cause they have a surplus. Like, you know, I see them doing a lot of stuff that I don't think, I don't know, I don't, the problem is people in politics are not business people. That's the biggest problem we got with politics. Okay, and then we do get a business person, we get some of the, I'm gonna say it, cuckoos.

• 1:26:15Speaker 01

  You know, cause you know why we, we can't find good leaders in politics?

• 1:26:18Graham Stephan?

  Why?

• 1:26:19Speaker 01

  Cause nobody wants the job, because of all the bureaucratic bullshit and all the people in politics that don't know about business. And they all got their wacko ideas on how things should be. They don't just look at, what is, makes sense. Okay, what, what, what is the makes sense that we need to do here? That is just normal and, and pretty much is fair to everybody. Okay, taxes? Listen, I gotta pay thirty seven percent of, of all the money I make and earn, okay? I think that's a bit high, but the first thing we need to do is, let's look and have a real budget. Okay, where are we spending money at? Where are we wasting money at? But nobody wants the job because it's too much bullshit that goes on. All the CEOs of companies, successful companies.

• 1:27:04Speaker 01

  They wouldn't touch politics with a ten foot pole. Because you got all the people that don't belong in politics in politics. Because they just want to have a ride to system job and they want to, you know, push their ideas on you. And it's how they think things should go, you know, eh, listen, and I'm sorry to say. People who are not successful do not belong in politics. If you never ran a business and you never created anything. And you never had any experience running anything, you know, with employees, and then you shouldn't be in politics.

• 1:27:35Graham Stephan?

  I would vote for you. Would you ever run?

• 1:27:37Speaker 01

  Never. Of course, too many cuckoos. I tried to get a, I, I, downtown Clearwater, right? It's occupied by a Scientologist. It's a fact. I'm not talking bad about him. It's a fact. They blew up all the real estate. And everybody's crying, oh, they own everything, oh, they own everything. Well, you let them. Now, we don't know tourism and downtown is dead. Okay, well, they're always crying about that, everybody's about, well, do something about it. Okay? I went to the mayor and I said, you know, we need on, it's the crossing the beach. The beaches here, we get tourism. But on the downtown side and the base side, we get no tourism. And we had this beautiful waterfront.

• 1:28:18Speaker 01

  I said, let me, I burned in the designs and everything. Let me put a Ferris wheel right here on the waterfront. The kind that's air conditioned, good all year round. It'll be a great draw. And the people will come to Ferris wheel, just like in Orlando, they'll come to restaurants, they'll come to the, all the, the stores and shops around there. And we'll create a buzz. Okay? Tom, number one, the mayor straight out told me, he doesn't have the power to approve it. Great idea, but he doesn't, I was gonna pay for it. All they do is give me a little piece of land to lease. I would have put the there, bought it there. I would even done shared profiting with them, profit sharing with them. He says, well, uh, this city has a no power mayor.

• 1:29:01Speaker 01

  The mayor can't even make a decision. Has to go in front of like seven or eight board members. And these people, these people aren't qualified to run an ice cream store. I've seen them. They've never done nothing their whole life, but maybe a government job. And, and, and they had no clue about business. They had no vision of the future. All they want to do is bitch and complain about everything. We have the wrong people in politics. That's the problem. We don't have educated business people.

• 1:29:31Graham Stephan?

  Ever gonna change.

• 1:29:32Speaker 01

  Unfortunately, the way our society is, we got half the country that are doers and half the country that are just wanna ride the

• 1:29:43Graham Stephan?

  Takers. We had doers and takers.

• 1:29:45Speaker 01

  You got Democrats, you got Republicans, and then you have your cuckoo, whatever. What do you call the other people? Anyway, the point is this, you know, everybody needs to come together and just do what makes sense and be fair to everybody. Of course, we need services. We need police. We need fire. We need the roads. We need everything. Schools. Takes a lot of money to run a place. Yes, you need taxes. Absolutely, positively, we have to have taxes, but do it reasonable. You know, do it, do it where you get what you need. All this waste that goes on, you know, we got people, how many come people in this country? Have jobs that we probably don't even need in politics or in bureaucrats, you know?

• 1:30:28Speaker 01

  I mean, I'm just saying it is just with technology, you know, these people should be more in private sector. Private sector is what makes this country run. Without private sector, you got nothing. You wouldn't have government without private sector, right? Private sector employs the people and then gives the money to the government and then the government employs people because they're getting the money from private sector. But, you know, it starts with the public, you know, and we just gotta get rid of all these people running for office that just don't belong there.

• 1:31:00Jack Selby?

  Do you think it's easier than ever right now to get rich?

• 1:31:03Graham Stephan?

  Hey, by the way, really quick, if you want extra content just like this, as well as early access and a bonus post show posted every single week, feel free to join as a channel member to get immediate access to all of that as well as early access to everything else that we post, along with priority responses to all of your comments. So if that sounds cool, feel free to join. Would love to have you on board. Thanks so much. We'll get back to the podcast now.

• 1:31:27Jack Selby?

  Do you think it's easier than ever right now to get rich?

• 1:31:29Speaker 01

  I think it's always easy to get rich if you find what you really have a passion for doing and have a good plan. I think, you know, listen, I get consult calls from kids. They're in their twenties. They're making millions. E-commerce, e-commerce, they don't even touch the product.

• 1:31:53Speaker 01

  I don't know much about e-commerce, but they making millions of dollars online with technology. I think it's even easier today. I mean, you know, but if you have a passion for something, you're real serious about it, you know, and it has the potential to make you rich. You know, I mean, the world needs everything.

• 1:32:09Jack Selby?

  So what do you think then is the main thing that's stopping people if it's easier than ever to get rich right now from becoming rich?

• 1:32:15Speaker 01

  There's a lot of people getting rich and then there's a lot of people that just wanna sit on it and don't have the drive and that's fine. I don't knock these people. Listen, you know, I was told a long time ago, you know, I think the guy, he told me, you know, when I failed at whatever shitty job I had. He says, well, don't worry, you know, the world needs dishwashers. It's true, you know, but you have to stay and dishwash your whole life? No. Maybe you make it up to sous chef. Maybe you make it up to chef. I don't know. Depends on the individual. Not everybody's cut out to be rich. That's a fact. You gotta have that burning desire inside of you, just like, you know, I don't know about you, but he has it, where he knows he wants to get up every morning.

• 1:32:56Speaker 01

  And he wants to create and he wants to grow and he want, you know, he wants to be wealthier. That's the reward. Getting rich is the reward for hard work. You work hard, you get rewarded.

• 1:33:10Jack Selby?

  So you think the main obstacle in becoming rich then is mostly just a motivation and like a want? How badly do you want?

• 1:33:16Speaker 01

  It's a frame of mind. Okay. It's a frame of mind. If you have your frame of mind and you don't waste your time with nonsense. If you have a logical, you know, frame of mind, it says, okay, if I do this, this and this, it's gonna get me to this point here. You know, it's just like if I get off my ass, like I tell everybody calls me, get off your ass and get an agent to help you look for the deals that you can afford. Okay. Why not? Why? Sitting around talking about buying something or looking on your own. Why? Get a professional to help you. Find a tool that's gonna help you.

• 1:33:53Speaker 01

  Find an agent and then if you don't like the agent, find another one that's dedicated and motivated to finding you the type of real estate that you wanna buy and you can afford. Okay. It understands what you're looking for, what you're trying to accomplish. Okay. It's like when I sit down with lawyers, accountants, wealth managers, bankers, I gotta really feel that when I'm talking to you and we're discussing my situation, that you understand what I'm trying to accomplish and you're gonna be instrumental and help me accomplish that. Okay. You gotta get with people that are on the same page and then you gotta just keep moving forward. Get your ass out there, get a list from your realtor, look at all the deals in your area, draw a circle on a map.

• 1:34:36Speaker 01

  All right. In your price range, understand the market and look for opportunity.

• 1:34:42Jack Selby?

  Is real estate still one of the easiest ways to build wealth?

• 1:34:46Speaker 01

  I mean, it's all I know. I don't know how to make money doing anything else. Anything else I ever tried or really barely tried in life. You know, I never put forth the effort. Real estate's worked for me. That's why I like to talk to people and help them with real estate. Because I know from real life experience that it's helped me and I am more than happy to share that knowledge and share my experiences with other people so it can help them. Right here. I created that. Oh, I banged. I created this. It was a thought. I said, you know what? I looked at a Mustang one day. I said, it's a boxy car. You know, that would make a cool pool table. We just whack off the roof, right?

• 1:35:30Speaker 01

  And we did it. I put together the right people that had the right skills. This one's a Camaro, by the way. And it was just something I wanted to have for myself. What happened? It came out so great that we started making them and selling them. I shipped these all over the world. I shipped these to Dubai. I shipped them all over. You know, and it has real parts from cars. This is real. This is real. Emblems are real. Lights are real. This is, we make this. We use a good table. You know, we make it and we, it comes in pieces and we have it put together and somebody, Tommy Hilfiger bought one from us. Okay.

• 1:36:06Graham Stephan?

  How much was it?

• 1:36:07Speaker 01

  How much?

• 1:36:08Graham Stephan?

  How much?

• 1:36:09Speaker 01

  I mean, they started the bottom, I think fifteen grand, which is not a lot for, this is a real, this is a real item. And this is quality, the paint, the table, the fiberglass, the parts. We have a license from GM and Ford to produce these. I didn't have the, the, the, the, the time to put one in a trailer, go to all the classic car shows. Like, you know, MECOM.

• 1:36:33Graham Stephan?

  Barrett-Jackson.

• 1:36:34Speaker 01

  Barrett-Jackson's, you know, traveling around the country. I didn't hire a salesman. I didn't market it. So, you know, we sell quite a few, but not nowhere near the level it could have been if I would have put my heart and soul into it. But I couldn't because real estate is where I need to put my heart and soul in because real estate is big numbers. Big numbers. It's very, very possible. I could go out tomorrow. I could buy a deal for 10 million bucks and I could turn it into 15 million bucks. In real estate, that's not hard to do if you apply yourself. So I focused on that.

• 1:37:13Speaker 01

  But my dream in life was to sell car pool tables. Step right up, step right up. Hitting a ball at the big show, people flocking around. Look at that. It's a car and a pool table. The ultimate man cave toy to have.

• 1:37:29Graham Stephan?

  Are you good at pool?

• 1:37:30Speaker 01

  I used to be in the army. Yeah. In the army, I was good. Now I haven't played for a while. So practice, you gotta practice, practice, practice.

• 1:37:38Graham Stephan?

  So what do you do all day with your time these days?

• 1:37:41Speaker 01

  I wake up in the morning, my phone starts ringing at eight o'clock in the morning. Brokers are calling me. I got all kinds of brokers calling me. What's the latest deal? What are we working on? What are we writing an offer on? I'm talking to bankers. I got different, three, four different refinances going on right now. I'm talking to, uh, you know, management. I gotta go through all my assets in my head, make sure I'm on top of everything that needs to be done. The school we bought, when I bought that school, the university, part of the deal was I have to put on a new roof on that place. The seller gave me a credit for it, but I have to get on the phone. I gotta get biz on the roof. I gotta get a roof aligned up to get that done. We need a million dollars worth of AC work that was promised that it tended to be done. I gotta get biz on that and get that job cooking.

• 1:38:22Speaker 01

  I gotta go through my whole portfolio. I'm managing, uh, you know, a whole bunch of assets and I gotta be on top of everything those properties need. And whether it's financing, whether it's, uh, improvements, rehab, whatever it is, you gotta be on top of everything, you know, and, um, and then I try to, you know, take time out and he books consulting calls, which I probably do better off in the evening time when the day is kinda slowed down. I'm on the phone with my lawyer every day. I'm on the phone doing, dealing my 1031s. I'm dealing with all kinds of stuff.

• 1:38:54Jack Selby?

  Do you enjoy that?

• 1:38:55Speaker 01

  I mean, it's my life. It's my career. I mean, yeah, I enjoy it. I enjoy it when I'm productive. I like at the end of the day to think back and say, okay, what did I get done today? That's where I really need to have that feeling. I hate to, the day to go by and I didn't really get done. To me, that's depressing. I like to, you know, time management is very important. You know, me and Aaron drove around all the properties. We took pictures of everything that we need to be done. He wrote up a big fancy report. We emailed it out to all the people that were, you know, pertaining to, we need this done. We need that done. We want that fixed. We want that painting. You know, we need hotel rooms built over here. What's going on with the permit? Uh, do we have all the subs lined up to build, do to build out?

• 1:39:38Speaker 01

  I mean, it's managing a portfolio. That's what I do. Run a portfolio and make sure every asset gets the proper attention to maintain that asset and make it grow, you know, or maintain it.

• 1:39:50Jack Selby?

  What is the greatest success in your life?

• 1:39:53Speaker 01

  The greatest success in my life was being able to sit here with Jack and do a podcast. I mean.

• 1:40:00Jack Selby?

  Well, I'm glad to give you that success. Mine too. You're welcome.

• 1:40:03Speaker 01

  It is, if I dropped in tomorrow, I could say I sat at the table in my house, my table with Jack and did a podcast.

• 1:40:13Jack Selby?

  Well, I'm honored. Thank you.

• 1:40:14Graham Stephan?

  How do you like the new boat?

• 1:40:16Speaker 01

  It's a great boat. I love it, you know, but you know, that requires management too.

• 1:40:23Speaker 01

  I got a captain and then we need a somebody to help him a lot of times, a mate. We got repairs that have to be done all the time. We got to maintain it. It needs all kinds of stuff done and I pretty much have to manage it. He helps me and does it, but I got to oversee and make sure everything's being taken care of. We're not overspending. You know, we go on a trip, we got to hire stew, we got to stock the boat. We got to plan where we're going to go. We got to get dockage here. We got to get fuel delivered. I mean, you know, I have the captain that helps me do all that, but I still got to be involved. He has something that needs to be repaired. Is this the best, cheapest way of repairing it?

• 1:40:56Graham Stephan?

  Sounds stressful. How much, how much is it?

• 1:40:59Speaker 01

  Everything in life is stressful. If you want to really take it to that level. Could I hire somebody to handle all that? Yes, but I like to be involved. This way I know people do make mistakes, but it's not their money. I don't, I always, I'm not saying I don't trust people with money, but I like to, you know, monitor it. You know, and make sure that everything is right. Just like I told you about the Rolls Royce story. You know, if I would have told somebody that worked for me, an assistant, hey, get that Rolls fixed. They would have took the deal, it would have cost 40 grand and there you go. But no, I thought about other ways and other alternatives and options and it cost me four grand. Saving money is making money.

• 1:41:43Graham Stephan?

  Is the bigger yacht worth it?

• 1:41:45Speaker 01

  I mean, the yacht that I have now is, it has different features than the yacht you were on. Like this one has bow seating, real bow seating with tables and in the very front. This one has the on deck master. So I don't have to hurt my knees going down the stairs. This one's got a big open top deck. I mean, you know, it's, it's a step up. I mean, yeah, I don't need a 20 or 30 million dollar yacht because then you need a big crew. And then you have a tremendous amount of maintenance and expenses. That's not my lifestyle. My lifestyle is basically what I got now, 92, maybe push it to 100 one day. And that's good enough for me, you know, but everybody has their own comfort zone. My comfort zone is the boat I got now. I did buy it right. Maybe I'll sell it.

• 1:42:30Speaker 01

  Maybe I'll get something, you know, a little faster, a little newer. If there's something out there, I don't know. But I mean, I like to be in my comfort zone.

• 1:42:37Graham Stephan?

  What's something that I could improve on?

• 1:42:41Speaker 01

  High platform shoes. I think the extra few inches will make a big difference in your life.

• 1:42:47Jack Selby?

  Okay. What's something I can improve on?

• 1:42:50Speaker 01

  I don't think there's much hope for you.

• 1:42:52Jack Selby?

  So I'm already perfect.

• 1:42:55Graham Stephan?

  The thing is you can't go any lower.

• 1:42:58Speaker 01

  No, I don't want to pick on you too much. I mean, listen, everybody really knows what they need to improve in their life. I know I'm overweight. I know I smoke. Okay. I mean, but am I doing anything about it? Am I changing? Everybody knows what part of their life they need to improve. It's just a matter of doing it.

• 1:43:19Jack Selby?

  You think those are the two main things for you?

• 1:43:21Speaker 01

  Me, health and smoking? Those are two things that are going to kill me quicker.

• 1:43:25Jack Selby?

  What do you think if you were to really, like you said?

• 1:43:27Speaker 01

  We're only here for a short period of time.

• 1:43:29Jack Selby?

  Your favorite phrase, gun to your head.

• 1:43:31Graham Stephan?

  Gun to your head.

• 1:43:32Jack Selby?

  Obviously mute the G word.

• 1:43:33Graham Stephan?

  Yeah.

• 1:43:33Jack Selby?

  What do you think is the first thing that comes up that you need to improve on?

• 1:43:36Graham Stephan?

  Uh, probably getting over spending anxiety. That's what it is. I get a lot of anxiety spending money.

• 1:43:44Jack Selby?

  What is the last thing you got anxious spending money on?

• 1:43:47Graham Stephan?

  I didn't buy, it sounds so bad. It sounds awful when I say this, but there was a SpongeBob animation cell that I really wanted to buy and I set a price for myself where if it goes beyond that, I'm not going to bid on it. I really wanted the thing and I, I lost it over like 150 bucks. This is dumb, but like

• 1:44:05Jack Selby?

  Why do you regret it?

• 1:44:06Graham Stephan?

  Cause it was a great piece of SpongeBob art. It's from the first season. It's a master key cell of SpongeBob himself.

• 1:44:15Jack Selby?

  Would you pay $300 right now to have it?

• 1:44:19Graham Stephan?

  Well, it's three extra.

• 1:44:20Jack Selby?

  Yeah, extra.

• 1:44:21Graham Stephan?

  Yeah, I would.

• 1:44:22Speaker 01

  Listen, you know, I used to have a lot of problems spending money too. I always had to buy stuff for cheapest, cheap, cheap, cheap, you know, everything. And now, once you get to a level that you know you've never been at before, uh, now you have to enjoy your life too. You do, within moderation. It's like, you know, me and my wife and a kid were sitting in a car last night. And I said, you know what? We've traveled a lot, but I've never been to Monaco. And let me tell you something. If I open up my wealth management account on any given day, it could be up or down by millions of dollars. Not a lot of millions, but a few, depending on the market. Bonds fluctuate, values fluctuate.

• 1:45:07Speaker 01

  I do have stocks that I let them manage. Okay? So if my account can fluctuate by millions of dollars a day and it doesn't really change my life, whether it does or not, is it really going to matter if I blow 50 grand to go to Monaco? It's not going to change my life. It's not going to affect me not one single penny. If I saw $50,000 less in my account tomorrow, it has no impact on my life. Is it going to make me and my wife and my kid and family a lifetime rememberable experience? Yes. So you got to spend money when it comes to quality of life.

• 1:45:52Speaker 01

  And if it's not going to hurt you. You also went out and bought a Ford GT. How much you pay for that?

• 1:45:57Graham Stephan?

  306 and it's worth $500,000 now.

• 1:46:00Speaker 01

  How much you pay for it?

• 1:46:01Graham Stephan?

  306,000.

• 1:46:02Speaker 01

  Sell it.

• 1:46:03Graham Stephan?

  No. Have you seen the prices of these things lately?

• 1:46:06Speaker 01

  I think you're at a height.

• 1:46:07Graham Stephan?

  No, no, no, no. They're only going higher. They're, no.

• 1:46:11Speaker 01

  When you bought it, you didn't buy it as an investment, did you? You didn't buy it as an investment.

• 1:46:15Graham Stephan?

  I did buy it.

• 1:46:16Speaker 01

  I know. I walked into the dealership and I could have bought the same car.

• 1:46:21Graham Stephan?

  Why did?

• 1:46:21Speaker 01

  I couldn't spend it. I was too fat.

• 1:46:24Graham Stephan?

  Ben, were you invested?

• 1:46:26Speaker 01

  Okay. Let me explain to you what I did. I used to be a day trader. During the, I got my ass handed to me in a crash when you guys were still

• 1:46:39Speaker 01

  selling in a boy scout.

• 1:46:40Graham Stephan?

  Was that the, was that the 1920s crash?

• 1:46:43Speaker 01

  No.

• 1:46:46Speaker 01

  Anyway, the point is this, you can't do everything in life. All right? You got to pick something and do it the best you can. You can dib and dab a little, but you know what I did was, goes back to relationships. Okay. I let the experts do it. So basically my relationship with Merrill Lynch is yes, I'm mostly in tax free muni bonds. That's where I like to be at because it's safe and I can bar against it and it's tax free. All the interest on that 5% tax free is really like 89% to me, but I give them a piece. You know, I don't know, whatever it is, you know, 30, 20, 30 million, whatever it is. And they have their models where they have a team that discusses what's going on in the market.

• 1:47:30Speaker 01

  Where they think that they should be investing in, what's good, what should they sell? They got like a dozen people that sit around a table and discuss this like pretty often. And then they manage their customers' money, which they get a very, you know, a reasonable fee for. Maybe, I don't know. It's not much.

• 1:47:48Graham Stephan?

  It's probably like, yeah, but don't you think you could achieve the same thing as buying an index fund?

• 1:47:53Speaker 01

  I mean, yes, you can do that, but I ain't got time to worry about any of that. Because the reason why I'm successful in real estate is because I'm focused on what I know I can do. Okay. Stock market investing, leave it to the experts, but you got to be with the right experts. And they're going to have their ups and downs, but I believe they, in the past couple of years, they've doubled my money. I mean, I know it for a fact. I didn't give them 20 or 30. Okay. I think I gave them half of that.

• 1:48:21Graham Stephan?

  You think you gave them 15 million and they made gate, got you 30? I think the market's up a lot though.

• 1:48:26Speaker 01

  I think it was like really, honestly, to be honest, we're going from 10 to 25. Couple of years, everybody's done well in the market recently, especially with tech. So, you know, listen, everybody's got their own lifestyle, their own time management. You know, my son likes stocks. I let him play with my little edge account. They have it. They call it edge account where I can trade myself. I let him play around with that because he showed an interest, but you know, it does, does he have an interest or is he just like gambling? That's the question when it comes to stocks. Are you going to do your homework? Are you going to look at the news? Listen, I was offered SpaceX by Merrill Lynch at its IPO 135. And I should have bought it, but I was busy that day with real estate, so I didn't buy it.

• 1:49:09Speaker 01

  Then I saw the thing go right up to like 200. And I said, oh, I should have done something, but yeah, I didn't. IPOs are very rare lately. And then it came back down. I don't know where it's at now.

• 1:49:20Graham Stephan?

  155.

• 1:49:20Speaker 01

  150. Okay. So whatever. It goes up and down. Listen, I got no time to be on a roller coaster. The only way I could trade stocks is if I sat in that office and watched CNBC all day long and kept doing research.

• 1:49:34Graham Stephan?

  Oh my God. Look at the price yesterday. I looked at the price and see.

• 1:49:37Jack Selby?

  The price yesterday was 137.

• 1:49:39Graham Stephan?

  No, it wasn't. No, no. Go back more than a day. Go back more than it was 155.

• 1:49:43Jack Selby?

  Yesterday it was 137.

• 1:49:44Graham Stephan?

  Keep going, keep going back.

• 1:49:45Jack Selby?

  That was several days ago.

• 1:49:46Graham Stephan?

  No, it wasn't. Right there. That's when I was looking. What day is that?

• 1:49:49Jack Selby?

  July 9th and today is July 15th. That was a week ago.

• 1:49:53Graham Stephan?

  There's no way.

• 1:49:53Speaker 01

  What is it now?

• 1:49:54Graham Stephan?

  That was 135.

• 1:49:56Speaker 01

  Okay. So it's back to the IPO price.

• 1:49:57Graham Stephan?

  Holy crap.

• 1:49:58Jack Selby?

  I'm just saying, how do you just write off what I say without having any idea what you're talking about?

• 1:50:02Graham Stephan?

  It's the last thing I looked at.

• 1:50:04Jack Selby?

  Apparently you need to look at things a little more often.

• 1:50:06Graham Stephan?

  It trades during the day.

• 1:50:07Jack Selby?

  Last thing you looked at was a week ago.

• 1:50:08Speaker 01

  Tell me if you agree or disagree.

• 1:50:10Jack Selby?

  It did not trade during the day.

• 1:50:11Speaker 01

  Okay. The people, the people that are in the stock market, serious players, serious stock brokers, they're doing all this trading. Okay. Don't you think?

• 1:50:23Speaker 01

  It's like a game you're playing when you're one of them. Okay, things go up, things go down, they dry. I always have this, I always think I have, I always had this conspiracy theory about the stock market. I could be wrong, but I think they all kind of know what they're doing. When something comes out, they buy the shit out of it, dry the price up. And then they, when it goes up to the price they want, they sell it, take money off the table and they have their own system of making money. Okay, I really believe that and I don't think they even communicate with each other. They don't have to. They just all know that yes, IPO comes out, everybody's emotional.

• 1:51:05Speaker 01

  Oh, it's SpaceX, it's he's a trillionaire now, blah, blah, blah. That thing goes through the roof to 220 and it's all hype. There's nothing, the problem I have with the stock market is it's not logic based. If you look at their income, there are companies that the stocks go through the roof based on speculation of the future. Okay, I don't, there's so many companies that don't make a dime and their stock keeps going up. Am I right or wrong?

• 1:51:32Graham Stephan?

  Right.

• 1:51:33Speaker 01

  I don't believe in that. I mean, yes, it's just a whole nother world that I can't be in. If I was in that world, I have to be in that office every day while the stock market's open, trading like I've done.

• 1:51:46Graham Stephan?

  You don't have to.

• 1:51:47Speaker 01

  And then when the stock market's not open, I gotta be doing research.

• 1:51:49Graham Stephan?

  You just buy an index fund and you average six to eight percent a year, 20 years.

• 1:51:55Speaker 01

  Well, not necessarily. Index funds go down.

• 1:51:57Graham Stephan?

  They do.

• 1:51:57Speaker 01

  What about airlines? Airlines are getting crushed right now.

• 1:52:01Graham Stephan?

  Yeah, but they're, but if you.

• 1:52:01Speaker 01

  The price of fuel, they're going out of business.

• 1:52:03Graham Stephan?

  But if you look at the global stock market, like a big fund that covers the global stock market, even if airlines go down, something else will take its place.

• 1:52:11Speaker 01

  Tell us a fund to invest in.

• 1:52:12Graham Stephan?

  VT, VTI, VOO, the Vanguard index funds.

• 1:52:17Speaker 01

  All right. You're happy with it? You recommend it? I believe it. You know, because, but yeah, they got tons of people behind that making the decisions. They're experts.

• 1:52:28Graham Stephan?

  They might have them invested more aggressively in a lot of tech. The mag seven, I'm just saying an index, like I wouldn't even be doing that.

• 1:52:34Speaker 01

  I've lost money on BlackRock or Blackstone, one or two.

• 1:52:38Graham Stephan?

  Probably BlackRock.

• 1:52:40Speaker 01

  You know, because they had some fund that, you know, was speculative, too speculative on startups and.

• 1:52:46Graham Stephan?

  Yeah, but if you owned BlackRock itself, the company itself has done incredibly well.

• 1:52:51Speaker 01

  It's true. If you, you know, everybody should do their homework and get their comfort zone and invest where they want. But there's no way that I could sit here and start buying individual stocks on a daily basis. It would drive me nuts. Cause I have to totally focus on that. My real estate portfolio will go down.

• 1:53:07Graham Stephan?

  Your muni bond, because we're invested in the same one.

• 1:53:09Speaker 01

  Nothing, that's, that's a piece of.

• 1:53:11Graham Stephan?

  But.

• 1:53:11Speaker 01

  It's a walk in the park.

• 1:53:13Graham Stephan?

  But I'm saying the reason it's a walk in the park is because that muni bond that you bought is a collection of bonds.

• 1:53:19Speaker 01

  The fund.

• 1:53:19Graham Stephan?

  The fund is, so the index fund would be the same thing of stocks.

• 1:53:24Speaker 01

  Yeah, but the muni bonds fund is only muni bonds.

• 1:53:28Graham Stephan?

  Correct.

• 1:53:29Speaker 01

  Muni bonds, and I know somebody's gonna say I'm wrong, because there've been very, very, very minuscule occasions don't fail, unless you go to Puerto Rico.

• 1:53:41Speaker 01

  Muni bonds don't fail. They may go down, it's tied to interest rates, but at the end you're gonna get paid back. Okay. So I like muni bonds because I believe in the government. I believe in the municipality is not gonna, you know, fault on a debt. And 5% tax free to me, like I said, it wasn't always 5%. When interest rates are really low, you're only getting 3%. Okay, so I'm upside down in some of those muni bonds, but who cares? At the end of the day, I get my money back and it's tax free income. But right now, if I buy a muni bond for 5%, in fact, I bought a million dollar one yesterday, I know I'm getting 50 grand a year, tax free.

• 1:54:23Speaker 01

  And I could borrow up to $900,000 at like 3% if I want to borrow against it, or three and a half.

• 1:54:32Speaker 01

  It works for me, may not work for everybody else, but everybody's got to figure out what works for them. You know, that's it. But you know, stock trading is, is something you gotta be totally into if you're gonna do it with real money. I used to go to bed at night and sometimes wake up in the morning and lose millions and it would crush me. It would drive me nuts. I can't do it. I don't have, I don't have the tolerance for that.

• 1:54:57Graham Stephan?

  That's why I stick with index funds. You're not gonna lose millions. You might be down the worst in a, in a day, the worst might be like a few percent, 5%.

• 1:55:05Speaker 01

  If you look at the bond funds, the combination of all kinds of bonds managed by a bond manager, that's all he does. A muni bonds, different grade levels, different classes, but they're never gonna fluctuate more than 5%. You know, and then they go up and down, up and down, but no more than 5%. You're never gonna lose.

• 1:55:23Graham Stephan?

  Do you have any real life advice for either Graham or I?

• 1:55:27Speaker 01

  I mean, you know, listen, if you have money that you don't, you want to put away like what I call a war chest, you gotta have a war chest. In case the bottom falls out or in case some super great deal comes your way, you gotta be able to tap into something so you don't lose the opportunity. See, the biggest problem in life is that a lot of people get opportunities, but they can't execute it. That's the worst thing in the world. I've been in that position. A greatest deal in the world came up when I was younger, but I didn't have the money to do it. I didn't have the wherewithal to do it. You gotta stash that money so you have the muscle, the strength, and it's always there to protect you.

• 1:56:11Speaker 01

  Covid comes, your hotel's empty, what do you do?

• 1:56:14Graham Stephan?

  Here's a question for you. What percentage should you have as a war chest? And doesn't matter, let's just say if you have margin.

• 1:56:20Speaker 01

  I think you should basically, you should definitely stash as much cash as you can. All right, you, you always gotta have enough money to pay your bills and live. But besides that, I mean, and it could be in investments like you like, like your index funds, whatever it is, you've gotta have something liquid that you can access like that. You never know when you're gonna need the money, whether it's for emergency, whether it's an opportunity, you never know. You gotta, you gotta stash your cash.

• 1:56:50Graham Stephan?

  10%, 20%, 25, 30?

• 1:56:53Speaker 01

  As much as you can. As much as you can. Now me, I spend my money on real estate, a lot of it. So it's a different story. You know, I may have, you know, whatever, a couple hundred million in real estate, a couple hundred million here, you know, a couple hundred million, whatever. I mean, you know, I'm more diversified because real estate's my profession, but everybody needs to have something put away for that rainy day.

• 1:57:19Graham Stephan?

  Graham is saying how much in cash for someone like Graham who has a diversified portfolio and index funds and stuff like that.

• 1:57:25Speaker 01

  Nothing should be sitting in just cash.

• 1:57:27Graham Stephan?

  No, but like.

• 1:57:27Jack Selby?

  Cash equivalents, muni bonds.

• 1:57:28Graham Stephan?

  Tax your muni bonds.

• 1:57:29Speaker 01

  If it's invested in something that you are comfortable with and you're happy with the return, that's good enough.

• 1:57:36Graham Stephan?

  So I'm 25%, 20, 25% tax your muni bonds. The rest is real estate and most of the stocks.

• 1:57:43Speaker 01

  Everybody's different risk tolerance. I don't need to have a risk tolerance. I don't want risk. That's why I lean towards muni bonds. I mean, you know, I don't need to worry about really growing. I've made enough money to last me a lifetime. Now I gotta figure out how I'm gonna pass it down to my, my family and generations, you know? So, you know, it's whatever you're comfortable with, where your money's at. Me, I just happen to be a big believer in muni bond funds and muni, um, muni bonds, because I like the comfort of the safety and knowing when I go to bed tomorrow, even if you look them up in the worst crash possible, they're not gonna go down more than 10%. And it wasn't a total disaster fan. Okay.

• 1:58:28Speaker 01

  Even when interest rates go way down, which ain't gonna happen again, they're still not gonna crash. It's still valuable because the government's gonna pay back that loan or the state or the county or the city or the hospital or whatever. Everybody's got their own, you know, taste. Me, my taste is being safe. I have a little risky, you know, I let Merrill Lynch play with, but it turned out good. Main thing is my focus is real estate. The point is make as much money as you can and stash it away in things that aren't risky or too risky. You know, but if a real estate deal does come your way, you wanna be able to run that cash and snatch that real estate up. If you know you're gonna make money on the real estate, that's what I do.

• 1:59:14Graham Stephan?

  Is there anything else that you want to mention, like consulting or?

• 1:59:16Speaker 01

  We, we, we try really hard to put out good content, you know, that's entertaining and helps educate people and show them what the real life is. Listen, I'm not, I'm not knocking anybody, but how many real estate guys go out there? I mean, yeah, you got your house people, you know, but I don't really consider them in my world. You know, they're doing houses, which is great for the people that wanna do houses. I don't do houses, you know, but I would, I would like to, you know, educate more people in the world. So, you know, we, we focus on our videos. We go out there and show you what we're doing, how we're buying, what we're looking for, and analyzing deals, underwriting deals. We try to explain that and teach people that, cause you know why?

• 2:00:01Speaker 01

  They don't teach it in school. They don't even teach you in school how to run a bank account. Do you believe that? Kids are graduating high school, 18 years old, never walked into a bank and made a deposit. I had to teach my kid how to make a deposit or, you know, now it's online or even online. I mean, you know, listen, educating people so the world could all be, grow together is what I'm looking for. And that's it, you know, we try to put out good content, you know, share our video. Uh, and, um, the consulting, I love helping people and I'm looking for the next deal. It's all about finding a deal, baby, finding a deal.

• 2:00:41Graham Stephan?

  We highly recommend the consulting. I, I've been saying this for a while. I think you're undercharging. So for anyone interested, what's the website?

• 2:00:49Speaker 01

  benmallah.com. Consult with Ben.

• 2:00:53Jack Selby?

  Link down below in the description.

• 2:00:54Graham Stephan?

  Yeah, we'll just link it down below in the description.

• 2:00:55Jack Selby?

  All of Ben's stuff is linked down below in the description, guys. Thank you so much for listening to this podcast. We would not be here without you. So endlessly grateful for you guys watching, especially if you made it to the end.

• 2:01:06Graham Stephan?

  Oh, and also for the members, there's a lot of content in here that we did not include in the main episode. So if you want to see it uncensored.

• 2:01:15Speaker 01

  Uncensored forever.

• 2:01:15Graham Stephan?

  By the way, join the membership. You're gonna get extra content, early access, uncensored, and I personally respond to all the comments. I think that's pretty good. That's a good deal too.

• 2:01:25Speaker 01

  If you wanna know the latest styles and haircuts, here you go right here.

• 2:01:31Jack Selby?

  Thank you guys for watching.

• 2:01:32Graham Stephan?

  Till next time.