This ALWAYS Happens Before A Housing Market Crash… | Michael Zuber

MagBak: Get 15% off of ANY product using code ICED15 at https://creators.magbak.com/theicedcoffeehour9tn Airbnb: Find a co-host at https://airbnb.com/host AMP: Check it out at https://amp.ai and use code ICED for 10% OFF Your order Upwork: Post your job free at http://upwork.com/COFFEE and connect with top talent to grow your business. Shopify: Sign up for a $1 per month trial period at https://shopify.com/ich Real Estate Spreadsheet: https://docs.google.com/spreadsheets/d/14s9RLZKXQdz5UkkdzVDMnVoEjyREkND7/edit?usp=sharing&ouid=115177699567463889514&rtpof=true&sd=true Follow @OneRentalataTime Here! Sign up for the waitlist at: http://www.extradollar.com/ *𝗖𝗢𝗡𝗡𝗘𝗖𝗧 𝗪𝗜𝗧𝗛 𝗨𝗦* 𝗜𝗚: https://www.instagram.com/icedcoffeehour 𝗝𝗔𝗖𝗞: https://www.instagram.com/jlsselby 𝗚𝗥𝗔𝗛𝗔𝗠: https://www.instagram.com/gpstephan 00:00:00 - Intro 00:01:20 - The 52-Year Spreadsheet & What It Revealed 00:03:38 - Why Prices Don't Fall: Transactions Crash Instead 00:06:24 - The 18-Year Cycle Myth & The Slow Recovery Timeline 00:09:35 - Advice for the Average Buyer in 2026 00:10:53 - Prediction: Home Prices Flat Until 2030 00:12:35 - Why This Isn't 2008: The Adjustable Rate Mortgage Difference 00:15:03 - The Demographics Argument & Boomer Inventory Concerns 00:16:33 - How Zuber Could Be Wrong & Policy Fixes for Entry-Level Housing 00:19:20 - Ben Shapiro's "Just Move" Take & When to Buy vs Rent 00:20:38 - The Discipline of a Buy Box (How to Find 15% Off Deals) 00:24:02 - Why Real Estate Is Inefficient & Where the Opportunity Lives 00:26:39 - Creative Financing: What It Is and Where People Mess Up 00:28:32 - The Three-Step Process to Build Wealth 00:30:20 - Living on $12K While Making $50K: How Michael Stays Content 00:32:46 - The Crying-in-the-Car Moment After 12 Years of Sacrifice 00:34:53 - Inflation History & The Stock Market Reversion to the Mean 00:38:43 - What Happens If Rates Drop to 4%? (Kevin Warsh & Trimmed Averages) 00:41:00 - Who Should and Shouldn't Be a Real Estate Investor 00:42:46 - The Duplex Story: A Sober Living Buyer Overpays 50% 00:46:16 - Lies About Real Estate Investing (Brandon Turner & the No-Money-Down Myth) 00:47:31 - Why Debt Always Blows Up & The Power of 30-Year Fixed Rates 00:49:32 - Hardest Part of Being a Landlord 00:50:24 - How Michael Spends His Margin (Travel, Not Stuff) 00:52:02 - The Need vs Want Audit That Changed Everything 00:54:26 - The Caleb Hammer Insight: Health and Wealth Are Linked 00:57:20 - Dave Ramsey's 40-Year Consistency & The Billion-Dollar Loan Question 00:59:35 - The Guy Who Lost $10M Over a $50K Credit 01:00:03 - Should Graham & Jack Invest More in Real Estate? 01:03:45 - Multifamily, Commercial & Where the Wealth Transfer Is Coming 01:05:08 - Will AI Make Houses Cheaper? The K-Shaped Housing Future 01:06:21 - Michael's Returns: Infinite ROI After Cash-Out Refis 01:07:11 - Rent Control & Why It Destroys Cities 01:09:11 - Markets to Avoid & Markets Worth Hunting 01:10:41 - The Anti-Landlord Movement & The Loss of Hope 01:14:04 - Confronting Graham: Why Won't You Spend More? 01:15:49 - The Bill Perkins Argument & Shifting From Saving to Spending 01:17:46 - Graham's 2% Rule (And Why He Still Won't Spend It) 01:20:52 - The Cruise Ship Lesson: Billionaires Who Worked Too Long 01:22:18 - The Business Class Debate That Won't End 01:29:42 - Feedback for Jack & Graham on the Podcast 01:32:51 - Where Iced Coffee Hour Is Headed Next 01:37:31 - ExtraDollar Launch & Wrap-Up 𝗖𝗹𝗶𝗽𝘀 𝗖𝗵𝗮𝗻𝗻𝗲𝗹: https://www.youtube.com/c/TheIcedCoffeeHourClips 𝗫.𝗰𝗼𝗺: https://x.com/TheICHpodcast 𝗧𝗶𝗸𝗧𝗼𝗸: https://www.tiktok.com/@theicedcoffeehour 𝗦𝗽𝗼𝘁𝗶𝗳𝘆: https://open.spotify.com/show/5c2uoXBQkOjIiCOf60jJj7 𝗔𝗽𝗽𝗹𝗲: https://podcasts.apple.com/us/podcast/the-iced-coffee-hour/id1515070058 For sponsorships or business inquiries reach out to: [email protected] Apply for The Index Membership: https://entertheindex.com/ For Podcast Inquiries, please DM @icedcoffeehour on Instagram! *Some of the links and other products that appear on this video are from companies which Graham Stephan & Jack Selby will earn an affiliate commission or referral bonus. Graham Stephan & Jack Selby are part of an affiliate network and receives compensation for sending traffic to partner sites. The content in this video is accurate as of the posting date. Some of the offers mentioned may no longer be available. Learn more about your ad choices. Visit podcastchoices.com/adchoices

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

• 0:01Speaker 00

  This episode is brought to you by Google Chrome. You think you know a browser, but Gemini and Chrome? That's new. It can help you with practically anything on the web, like restoring a vintage motorcycle from a 50-page restoration blog, or finally break down that long article you've had open for weeks. Gemini and Chrome is here for it. Ready to make anything online make sense? There's no place like Chrome. Check responses set up required. Compatibility and availability varies 18 plus.

• 0:26Speaker 01

  2026 is a horrible year for most people in real estate. Buyers, sellers. In fact, I think the only person that wins in 2026 are investors.

• 0:34Speaker 02

  Real estate is so much harder than stocks.

• 0:38Speaker 01

  The stock market every second of the day. You know what it's worth. Real estate is inefficient. You can, if you work long enough and you make enough offers, you could make hundreds of thousands of dollars the day you close. Most people won't do that.

• 0:51Jack Selby?

  What is your prediction then for home prices over the next five to 10 years?

• 0:55Speaker 04

  President Donald Trump posted the American dream is increasingly out of reach for far too many people.

• 1:01Speaker 01

  My guess is it will take between eight and 10 years to get back to normal.

• 1:06Jack Selby?

  Do you think people are better off buying a house today than renting?

• 1:09Speaker 01

  Hey, everybody, you don't have to buy a home. You don't have to. It's not written down anywhere in law. But if you want to get wealthy, you have to own assets. And the best way to do that is to find a seller who is motivated.

• 1:22Jack Selby?

  So what's the secret to financial independence then?

• 1:24Speaker 01

  You know what the three-step process to get wealthy is? It's been 100 years this has been true. You want it?

• 1:33Jack Selby?

  Thank you so much for coming on the Ice Coffee Hour.

• 1:35Speaker 01

  I appreciate the opportunity. You guys are great.

• 1:37Jack Selby?

  So how much in real estate do you have?

• 1:39Speaker 01

  We have about 167 units because we just sold a duplex last week and about 25 million in total value.

• 1:45Jack Selby?

  And how much debt do you have?

• 1:46Speaker 01

  Just over 9 million.

• 1:47Jack Selby?

  And how much do you get in cash flow each month?

• 1:50Speaker 01

  The worst month we had last year was $40,000. Our average is about 52, and the best month was 60. But the key is I live on 12.

• 1:57Jack Selby?

  And this is all your money, correct?

• 1:59Speaker 01

  All my money, no partnerships. I shouldn't say all my money. My wife's money as well. Let's be very clear. Olivia is a big part of this journey. But yeah, we don't take outside capital, never have. We've taken on some debt partners, but just like banks. But I don't want to, I don't want that stress, frankly.

• 2:13Jack Selby?

  And why should people listen to you specifically?

• 2:16Speaker 01

  Well, I'm not here trying to sell anything, right? I'm a guy that's been looking at real estate for 30 years. I'm an economist and my goal in life is to simply build something that outlives me by 50 years. That's what's going to be success for me. I'm not here trying to be a billionaire. I'm not even here trying to grow my portfolio anymore. I live on 12 and make 50. I'm good. We just did three weeks in Australia, came back for a week, did a week in Canada. My life is good. I'm not trying to be this big guru. I'm just trying to look at the news. I've been doing it every day since college and I'm trying to help people. That's all I'm trying to do.

• 2:52Jack Selby?

  Yeah, I have to say, when we were planning for this podcast, you sent me your research, this incredible spreadsheet. I'm going to put it up on the screen here for everyone to see. The level of detail that you put into that, to me, is incredible. So what is that telling you about the housing market?

• 3:07Speaker 01

  Well, I think it's important to understand why I created it and why I give it away. I created it because on August 26, 2022, Jerome Powell at Jackson Hole threw away his prepared speech, which is not normal for a high-ranking Fed member. And he basically went on a six-minute and 12-second rant that pain is coming. And as somebody who had suffered a huge loss of 80% of his wealth, I didn't want to do that again. I'm 50 freaking years old. I don't want to start over. So I asked myself, what's going to happen to real estate if interest rates go up? What's going to happen to the stock market? What's going to happen to commercial real estate? What's going to happen to new builders?

• 3:46Speaker 01

  These were all the questions I had because I was, A, trying to avoid pain, but B, I'm a greedy son of a gun. If there's an easy way to make money, I want that answer. So I built that spreadsheet. At the time, it was called the 52-year spreadsheet because I went back to 1970 and I collected, I don't know what it is, 34 different metrics. All of it is sourced, so you have the spreadsheet. There's a tab that says sources, Fed, Fed this, Fed that. So it's all sourced, so you could build the spreadsheet. But I wanted to ask myself questions. What happens when rates go up? What happens when rates go up a lot? Have we ever done that before? If we had, what broke? Because something's going to break. So that's why I did that spreadsheet and it helped me out.

• 4:26Jack Selby?

  What were your findings in this research?

• 4:28Speaker 01

  There were so many shocking findings. And again, I didn't have the answer. So the first thing I found was we have actually seen interest rates go up 700 basis points in a four-year period. That shocked me. I did not realize that. We went from 1978, we were at 9.6, we went to 16.6 by 1982. That's 700 basis points. The first thing to remember is everybody said that every 1% increase in interest rate, prices were supposed to fall 10%. And that frightened me, right? I'm a guy with a whole, you know, probably $20 million in real estate at the time. And if you're telling me my real estate's going to fall 20, 30, 40%, I don't want to be there. I saw the GFC.

• 5:12Speaker 01

  I didn't want that to happen again. So, you know, I had to go figure out what actually happened the last time we did that.

• 5:18Jack Selby?

  So what happened? And how does this apply to like the average viewer? Because the average viewer doesn't have $20 million in real estate. Maybe they want to get started in real estate. Maybe they just have a couple of units. What does this mean for them? And what did you find out exactly?

• 5:29Speaker 01

  Yeah, so what I found out, this is exactly why I did, and this is why I give it away. I don't charge for it or anything like that because I'm just trying to help people. That's all I'm trying to do. So the first thing I found out was all of these experts, and I'll use quotes because they were wrong, prices did not fall 70% from 1978 to 82. Interest rates went up 7% and they were supposed to fall. Now, you could argue, hey, okay, they didn't fall 70%. Maybe they fell 20 or 30. They didn't fall at all, guys. They went up. Real estate went up. Real estate went up even in 1981, which is the worst affordability ever. What did happen in what allowed me to make a great call back in 2022 was transactions

• 6:14Speaker 01

  crashed 50%. Transaction crashed for new homes, for existing homes. That is a problem. And that's the affordability problem. Why are we not selling more homes today? Why does 72% of people say it's not a good time to buy? It's affordability. But again, the lack of affordability does not mean prices fall. It means transactions fall.

• 6:34Jack Selby?

  Why do you think prices don't fall when affordability goes down?

• 6:37Speaker 01

  Because you don't have a motivated seller and you need waves of motivated seller. Think about today. You guys own some real estate. You know lots of people that own real estate. Most of them, I'm guessing, have interest rates below four and probably even below 3%. Do you know what that means? That means they took their second largest expense, X taxes, second largest expense, X taxes, and fixed it for 30 years. They are now living a better life? Because their fixed shelter expense is below rent and below all these other. So they have more money to deploy on Teslas and Rolex watches and Gucci bags. That's just reality is they have more money to spend because their shelter is fixed. So they're not motivated to sell.

• 7:17Jack Selby?

  So who's getting screwed right now? Because what about the people who bought the last two to three years where they're at 5%, 5 and a half, 6%?

• 7:25Speaker 01

  So there are certainly some markets, Austin, Texas being one, Port Louis and Florida being another, that certainly got over their skis and have fallen 20%. But these are not national phenomenons. The key to real estate is you've got to hold it for a decade, right? If you're coming into the game with a one or two-year hold period, just rent. Transaction cost alone is going to eat you alive. So again, if you came into this because you thought you were going to be a quick flipper or something of that, you're misguided, right? Real estate in ownership, you have to think in decades, in my opinion.

• 7:56Jack Selby?

  What do you think of the 18-year cycle that I've seen in real estate? I see a lot of these Twitter posts that go into like every 18 years, there's a cycle. And the 18 years for the next 18 years started like a year or two ago.

• 8:09Speaker 01

  So again, this spreadsheet that you've shared on the screen goes back to 1970. So I don't know what that is, three 18-year cycles? It's not there, right? We had one GFC where prices fell 4%. We had one year in the 80s where it fell below 1%, but that's it. That's, it's just not there. It's just somebody telling a story.

• 8:28Jack Selby?

  So if prices are not going to be falling, is this just the new normal? That housing is going to be unaffordable for most people?

• 8:36Speaker 01

  I don't think so, right? So when I put that spreadsheet together, it said prices don't fall, but transactions do. But it also told you, if you look at it, it told you a timeline to recover. It's just not fast. In 1978, we did 4 million, 3.9 something. By 1982, we did sub 2 million. That's a 50% crash, guys. We did not get back to 3.9 million until 1996. I'll say that again. From 1978 to 1996, it took to recover to do the same level of transactions. We must have had 15 million more people in the country. We must have had 5 million more housing units. But it's just not a quick recovery. Why? Because wages. This is all about wages. Wages grow 4%, 4.5% a year.

• 9:21Speaker 01

  It's going to take 8 to 10 years for that to bring back some normalcy.

• 9:26Jack Selby?

  Why do transactions matter, though? Why is it not just what the price is?

• 9:30Speaker 01

  Transactions matter because we are an economy. Real estate, the collective unit, is about 12% to 13% of the economy. Painting, Lowe's, Home Depot, just all the things that go into real estate. If you are at 50% of production, you have 12% of the economy being pulled back. That's why we need to see this get incrementally better going forward. And I think 26 was going to be incrementally better by 8% to 10%. Then we have this Iran war and rates are going up, so maybe not. But having real estate at 50% of normal capacity is horrible for the US economy.

• 10:07Jack Selby?

  So in terms of the average viewer watching this then, like I said, maybe they have a couple rental units. Maybe they don't have any real estate at all, but they want to start owning real estate. Maybe they shouldn't own real estate. What would you do if you were 20 years old, making the average income, living in the average place? What is your advice to these people?

• 10:26Speaker 01

  So 2026 is a horrible year for most people in real estate. Buyers, sellers. In fact, I think the only person that wins in 2026 are investors. Why? Because investors can be patient, write disrespectful offers, try creative financing. They got to find that one seller, right? Home buyers generally don't do that, right? So again, unless you're willing to write 100 offers, which I have done in past years, you're willing to follow up 3 or 4 times to get that one seller who has to sell. Because in the game of real estate, you make your money when you buy. You make your money when you buy. You don't pay market rent. You don't pay market prices. You have to keep swinging that hammer. Eventually, the numbers will work out for you. You'll buy something 15, 20, 30% below.

• 11:11Speaker 01

  So if you want to sacrifice and keep renting and keep stacking paper and just keep a buy box and keep trying and trying, awesome. You don't have, hey, everybody, you don't have to buy a home. You don't have to. It's not written down anywhere in law. But if you want to get wealthy, you have to own assets. And the best way to do that is to find a seller who is motivated.

• 11:33Speaker 01

  It just takes time.

• 11:34Jack Selby?

  What is your prediction then for home prices over the next five to 10 years?

• 11:38Speaker 01

  So I'll give you five years because I called in 22, 22 would be eight years. It's flat. It's just flat. It's, you know, flats plus or minus 1%. These are national median home prices, so you can hold me accountable. Right? So this is probably through 29 or 30. And that's basically where we've been for four years. And that's just where we're going to be because it takes time. It takes month after month after month after month for wages to grow. And then, you know, if we get the tailwind of lower interest rates, great, but it's just, it's gonna, it's gonna take eight years.

• 12:05Jack Selby?

  How do you know that prices will be flat until 2030? That just seems like a crazy prediction. What is the research behind this? What evidence do you have to suggest it will be flat? It's funny, JP Morgan also just said that their prediction was real estate was going to be zero, which actually means adjusted for inflation, you are negative.

• 12:23Speaker 01

  Correct.

• 12:24Jack Selby?

  Allegedly 3%.

• 12:26Speaker 01

  Anybody believe that?

• 12:27Jack Selby?

  Inflation could be significantly higher than that. I believe inflation's probably more like 5 to 6%, which means in real terms, real estate is going down a few percent every single year.

• 12:37Speaker 01

  Yeah, again, all these numbers I'm referring to, you're absolutely right, are nominal. It's not, not adjusted for inflation. So that's a very good point. Again, I can only refer back to that spreadsheet because I'm, I'm, I don't have a crystal ball. But I know what happened last time. When rates went up 700 basis points, it took 14 or 16 years for it to come back. This time, what did we do different? Well, we raised them over an 18-month period. So my guess, it is a guess, you can call it a prediction if you want, educated guess, maybe, is it will take between eight and 10 years to get back to normal. And that just means prices stay flat.

• 13:12Jack Selby?

  So you're comparing today's environment, though, to an environment a long time ago. Obviously, we all know, things are different now. Like, you can't just say because it happened in the past, it's going to happen in the exact same way today with all of the other factors that are playing in. How does that affect your prediction?

• 13:27Speaker 01

  Well, first and foremost, you're absolutely right. We're going back 70 years or whatever it is. So again, you know, it's, it's, it is a long time ago. Well, let's go to something a lot more relevant. The GFC, the global financial crisis, the housing crash where people have PTSD and just think it's going to happen again. Again, I invested through that environment. I actually sold all my houses in '06. So I didn't have any houses in '08. I had a part, I had 80 apartment buildings. So again, I've been doing this a long time and made a lot of great calls. So why did I do that? Well, in 2006, 51% of mortgage originations were adjustable rate mortgages. Most of them had these toxic two-year balloons.

• 14:09Speaker 01

  So what happened in that cycle is in 2008, mortgage payments tripled. Tripled. So they became forced sellers. And oh, by the way, if you want to talk economics, their shelter cost was 1,000 for two years. Then it was 3,000 for the next 28. But rent was 1,700. So for the first two years, they were net positive. After year two, and the rate shot up, because this is a teaser rate, they were upside down. And that's why everybody stopped paying. They had jingle mail and people just started sending them in. So motivated sellers. But now ask yourself, what was it like in '24, '22? We had over 95% of loans fixed. That is magic.

• 14:54Speaker 01

  People don't understand why this K-shaped economy is happening. We have 60-some-odd percent of people with shelter cost that is artificially low. Artificially. They lucked out with 2% mortgages and 3% mortgages. Now guess what? They have extra money to buy Teslas, extra money to buy Rolexes, extra money to do Gucci bags, whatever it is. Because their shelter cost, their second-largest expense, is fixed at an artificially low level. Why? They're not selling. They would be a fool to sell. They're, you know, make it up, right? Their payment's 1,300, rent for the same house is 21. Right? Today, it doesn't make sense, right? If you're gonna buy today, it's $2,800 mortgage, $21. But we have 60-some-odd percent of people who own homes

• 15:38Speaker 01

  that have artificially low shelter costs. They're in the catbird seat.

• 15:42Jack Selby?

  Hey, now, really quick, I just wanna say as a reminder that Father's Day is coming up, and I know what most of you guys do. You probably wait until the very last minute. You search Amazon for the best Father's Day gifts. You pick one of those, and then by July, it's sitting in a drawer, unused. But this year, you could actually make a huge impact with the Magback Elite Phone Case, who's sponsoring the video. One rule I set for myself is if he's not going to use it every single day, it's not worth buying, and that's exactly why this is the perfect gift. There's a built-in finger loop for grip, side rails so it doesn't slip, a kickstand that folds right in, and magnets strong enough to snap onto any surface, desk, car, wherever. They really thought through every detail of this case. And you could pair it with the Magback Smart Wallet, which snaps right onto the back, holds his cards, and has a built-in tracker, so you could ping it if it goes missing.

• 16:26Jack Selby?

  This is something I genuinely use, by the way, all the time, because I tend to misplace my wallet. I just set it down somewhere, and I think, "I'm gonna remember where I put that." And then I forget it, and I'm always in a rush. But with the tracker involved with this, I could just see exactly where I left it. It makes a little beeping sound. I go right to it, and this has saved me so much time, you have no idea. There are a few things in life that I'm actually very picky on, and now I have a new one, and it's phone cases. If you have not had a nice phone case, like a actually handy phone case, you gotta try it out, and you will never go back. It's phenomenal. And if you wanna go further, they have multi-chargers, car mounts, Tesla chargers, key tags. There's something for every kind of dad. So get a gift your dad will actually use this year with Magback. The link is down below in the description, and be sure to use our code for 15% off.

• 17:10Jack Selby?

  The code is right here, and also down below in the description. Thank you so much to Magback for sponsoring this episode. Now, what do you say to this? Because this post on Twitter claims that the entire housing boom was built on peak boomer spending, peak household formation, peak...

• 17:25Graham Stephan?

  Peak leverage, peak asset inflation. And their justification is that when boomers get older, they're going to be flooding the market with inventory that no millennials could afford. And because people are starting families later in life, they're not having as many kids. There's not as much of a need for all of these houses anymore.

• 17:46Speaker 01

  So I would add one wrinkle to that. It's not only houses, but it's the wrong configuration, right? Baby boomers bought big McMansions. So let's add that to the kind of question. So I studied this a lot and the demographics look questionable by 2040, in my opinion. So again, some people are trying to rush this like all baby boomers die on the same day. That's not how it works. First and foremost, people are living longer all the time. Medicine is better all the time. In fact, a lot of people are aging out in their homes. Right? So they're not going to assisted living or whatnot. So I think a lot of people are on to something. But again, I think we have 12 to 15 years to figure it out. And maybe we'll have another baby boom when millennials, you know, start having kids, who knows?

• 18:32Speaker 01

  But I do, I do agree that demographics are concerning. But it's 10, 15, 20 years from now. I know, by the way, we're the greatest country in the world and all we got to do is turn on migration again and that problem goes away. So.

• 18:46Graham Stephan?

  How could you be wrong about your prediction?

• 18:48Speaker 01

  So I ask myself that question all the time. There's macro and micro. A macro wrong. I fundamentally believe that Donald Trump, President Trump, wants to win the midterm elections. That's something I fundamentally believe. And in order to do that, he has to get the Strait of Hormuz open. And he has to have inflation start coming down. Also, he just put up Kevin Warsh. And my, again, prediction, guess, whatever, is he's going to cut interest rates somehow, some way, probably by blaming AI for deflation.

• 19:20Speaker 01

  If those don't happen, stuff blows up. Right? That's something I could get wrong. Micro level. Again, I've been studying my market of the Central Valley for 25 years.

• 19:32Speaker 01

  Fresno, where most of my units are, is a very red county in a blue state. If that flipped, that could be a problem. So there's all kinds of things that could go wrong. But again, I ask myself these questions every day and I pivot all the time. I've made some very big calls and I'm not afraid to make them again, but.

• 19:50Graham Stephan?

  Now millennials and Gen Z have been called a renter generation. What do you think is a policy change that would actually get them into a house by 2030?

• 19:59Speaker 01

  We have to make it profitable to build entry level housing. I don't think we understand what entry level housing is in this country. The average home in 2024 was 2,300 square feet. The average home in the 1950s was sub 1,000. We need that extra bathroom, that extra bedroom, this extra this, this extra that. That's not entry level housing. That's, that's like the next jump or the jump after that. But again, the millennials, Gen Z, you don't have options. Condos are your best thing, but then you have to deal with HOAs. So we have to find a way to make building smaller homes profitable.

• 20:35Graham Stephan?

  How would it be? Because my understanding is that back then in the 1950s and 60s, land was really abundant. You didn't have all these regulations. You didn't have these standards. And because they have to follow so many things and pay a premium for the land with way more risk with labor, they have to build that just to like make any amount of money. If they built any less than what they currently do, they would be losing and they just wouldn't build to begin with.

• 21:01Speaker 01

  I completely agree. If we can't, as I said, if they can't do it profitably, they won't do it. And that's why we're not building them. So I don't have a silver bullet or an answer. You could find government land to give them away, but most of that land's in places people don't want to be. You could try to lower regulations. There's all kinds of things you just, you have to have a focused effort. To say, hey, you know, again, I'm just thinking off the top of my head. If you build a home that's less than 1,000 square feet, you know, we'll waive X, Y, and Z conditions. That could work, right? You have to create a stick and a carrot. And right now, there's neither.

• 21:39Graham Stephan?

  Now, in terms of affordability, Ben Shapiro says that if you can't afford an area, you should just go and move to somewhere else that you could afford. You got a lot of backlash for this. What is your take on that?

• 21:53Speaker 01

  I say you live where you want and invest where the numbers make sense. Again, there are folks that want to always be around their family. The family unit's important and that's awesome. That should be celebrated. That's why I think a lot of folks are getting into these multi-generational living. You're actually seeing builders here in Vegas that have multi-gen, you know, properties being built for that. I think that's going to become something. So I would not be so, I don't know, I'll say arrogant to say something like that. I, dude, we live in a free country. And if you want to live where you want, great. You just have to realize that you have to make other choices.

• 22:27Graham Stephan?

  When do you think it's worth it to buy a house versus rent right now?

• 22:30Speaker 01

  In 2026? The only answer is if you get a smoking deal. Right? If you get something that's 15, 20% or percent below real value, which can happen, but it takes work.

• 22:43Jack Selby?

  So how would you minimize the work and maximize the reward? Like, if someone wants to go out there and find a place 15% off, what would they do?

• 22:51Graham Stephan?

  Yeah. And how do you know it's 15% off? Because I see some of these deals where it looks like 15% off. But then I'm like, well, no, it's just not worth 100%. It's worth 85% of what they're asking.

• 23:02Speaker 01

  So let's talk about what I did. So I tried to buy rental property where I lived at the time in Silicon Valley, which I lived in Mountain View. And I spent a year, every Sunday, looking for this magic cash flow. It didn't exist in 2001 and it certainly doesn't exist today. So I had to make a choice. Where could I go find cash flow? Because I was not going to bet on appreciation. I'd already lost my ass in the stock market. So I wanted cash flow. So ultimately, we found Fresno, California, which was two and a half hours away by car. Five-hour round trip. But what did we find? We found Norris Drive, 1818 Norris Drive East 93703. Look it up on Zillow. We bought it for 107. It rented for 1095. It beat the 1% rule. That's all I knew back then.

• 23:47Speaker 01

  So that's what we got. And that's where we started. So invest where the numbers make sense, but live where you want.

• 23:51Graham Stephan?

  What about, though, for buying a primary residence?

• 23:54Speaker 01

  So I'll tell you what I did. So 2023, I made a decision to leave California and move to Vegas. And we were looking all over the place. This is again where interest rates were going up. I think at the time, interest rates were 7.5%. And we put a budget of $1 million. That's just what our budget was, 950 to $1 million. And all the existing home sales, just existing homes, didn't meet our needs. But again, back to the problem with the 52-year spreadsheet identified is builders had a problem. They built the wrong inventory, right? They built for the wave and then they were letting properties out at the wrong time. We now live in a part of Henderson that's up in the hills.

• 24:38Speaker 01

  We got something that was 15% off. It had zero lot premium with a view. So you guys know that that's money. Somebody else backed out, so we got all the upgrades for free. And they gave us a 4.99% fixed 30-year mortgage. So again, I always look for the deal. So.

• 24:56Graham Stephan?

  When does renting and just saving the difference of buying actually make a significant difference?

• 25:02Speaker 01

  Well, I think today it's probably true for most people because I don't think most people want to do the work. So let me go back and answer that question, how to do it. The only way I know how to do it is get remarkably disciplined. I have this idea called a buy box. I'll give you my buy box from 2001. Again, remember, I didn't live there. I didn't know anybody. I had no experience in this county.

• 25:23Speaker 00

  This episode is brought to you by Google Chrome. You think you know a browser, but Gemini and Chrome, that's new. It can help you with practically anything on the web, like restoring a vintage motorcycle from a 50-page restoration blog, or finally break down that long article you've had open for weeks. Gemini and Chrome is here for it. Ready to make anything online make sense? There's no place like Chrome. Check responses set up required. Compatibility and availability varies. 18 plus.

• 25:48Speaker 01

  So I picked 93703. It's called the Mayfair District. I picked single-family homes, so not duplexes, not condos, nothing else. I picked three or four bedrooms, two-car garage, two bathrooms, one story. Why is that important? Because I looked at that criteria and that criteria only every day for three years. So 99% of the market was, might as well not have existed. But by looking at that market, that criteria every single day and tracking the changes, A, you know what it's worth, and B, you know when you can get a deal. That's where most people get wrong. Most people say, hey, I want to buy something, and they're over here, and then they're over here, and then they're over here.

• 26:33Speaker 01

  You get no economies of scale. You don't know if anything's a good value. You're just guessing, you're trusting Zillow of all things. It's, you know, just people today don't want to be disciplined and do the work.

• 26:43Graham Stephan?

  Do you think people are better off buying a house today than renting? We had someone on recently who was making the argument that the average person is never going to invest the difference. And buying a home for the average person out there is a good financial decision, even today, even at 6.5% interest rates, because the alternative is that they would just spend the extra money.

• 27:05Speaker 01

  There's certainly a lot of truth in that. If you, if you watch consumer behavior, we do not save money, right? You get a STEMI check, you spend it. We actually just had record tax returns. You guys know the tax returns were up 12%. Guess what happened? They spent the money in Q1. Look at all the retailers, Ralph Lauren, all these other, it's just, we never save money. So there's a lot of truth in that, given consumer behavior. But back to the crux of your question, I don't care if you buy a home or not. If you want to, I suggest doing the work and getting a deal. You make your money when you buy. This is the difference between real estate and the stock market. The stock market, every second of the day, even Bitcoin or crypto, you know what it's worth every single second of the time. Real estate is inefficient.

• 27:47Speaker 01

  You can, if you work long enough, and you make enough offers, and you follow up enough, and you learn the different creative mechanisms, and you find the right seller. This is about finding the right seller. You can make hundreds of thousands of dollars the day you close. Most people won't do that.

• 28:04Jack Selby?

  Is success in real estate more complicated or difficult?

• 28:08Speaker 01

  Ooh, complicated or difficult? I've never been asked that. I don't think it's complicated. I think it's remarkably simple, but it just takes more work than most people want.

• 28:18Jack Selby?

  And the simple answer to that would just be create a buy box, have your boxes you need to check, it needs to have this many rooms, this many bathrooms, in this location with a pool, no pool, yada, yada, yada.

• 28:29Speaker 01

  And then look at it every day for 20 minutes a day, because it doesn't take a lot of time, right? I think it's just Leitz or somebody talks about 18 minutes to be in the top 5% of any skill. That's all I'm asking for is 20 minutes a day.

• 28:41Jack Selby?

  So you would say if a random viewer out there listened to that advice, that would maximize their likelihood of success in real estate? Like that is-

• 28:49Speaker 01

  I'll even go one step further. If they do that every day for the next three years, like I did, they will A, learn their buy box, they'll know what value is, they won't have to question it. And B, they're going to have an excellent opportunity to find a discount, because it's just a law of large numbers. I've written 100 offers and gotten nothing, right? I've done that before.

• 29:11Jack Selby?

  Another thing that people say is extremely relevant in today's climate with high interest rates, low affordability, would be creative financing.

• 29:18Speaker 01

  Sure.

• 29:18Jack Selby?

  I'm curious, what's your experience with that? And do you think that that's a viable solution for someone that wants to get involved in real estate, but they don't quite have the means to do it?

• 29:27Speaker 01

  Yeah, creative financing is one of those tools that everybody should learn. But let's define creative financing first. So let's call traditional financing 5% down owner occupied or 25% down investor. Let's just define that as standard. So creative financing is anything other than that, typically involving the seller giving you some of the loan, right? Whether it's a first, a second, or something of that nature. So yeah, creative financing is very powerful. I've used it half a dozen times, maybe 10 times, but it's always finding the right seller. It's funny, one of the things that I've looked at the last year is what owners of people in my buy box have greater than 50% equity. So what am I doing with that?

• 30:12Speaker 01

  What I'm doing is I'm giving them two offers. I'm giving them a low cash offer. But I'm also giving them a higher number, assuming they could take some equity back as a second loan. So yeah, creative financing is a tool. It is a very valuable tool. It doesn't work all the time. But yeah, it's certainly a valuable tool.

• 30:31Jack Selby?

  Where do most people go wrong when it comes to creative financing?

• 30:35Speaker 01

  First off, I think too many people sell it as the magic beans or the magic sauce, and they don't know all the required paperwork. It does take a lot of paperwork to protect you and to protect the seller, which should be paramount in this situation. So you've got to work with title, escrow, lawyers, depending on where you are in the country. But I think the paperwork is the biggest thing people get wrong. They think they can just take a napkin and, you know, Joe Schmo signed it. And that's not how this should work. There should be penalties for mispayments. There should be ability to foreclose. All those things. I think people treat paperwork like an afterthought, and it should not be.

• 31:07Jack Selby?

  How could you become a professional in real estate? Meaning, you're an investor, you're making money, you're just doing real estate for a living when you have no money?

• 31:16Speaker 01

  Again, that's not who I am, right? You guys know lots of really famous people like Pace Morbi and all these other folks. They're real estate people. I was an employee, guys. I had a tech job. I was an accountant. I was a sales guy. I was a W2 employee. I'm not a full-time real estate investor. I now do real estate on my taxes because I get 16, spend 12. So I don't need any more money. But yeah, I'm not that person. I tell you to live below your means. That's the key. You know what the three-step process to get wealthy is? It's been 100 years this has been true. You want it?

• 31:49Jack Selby?

  Yep.

• 31:50Speaker 01

  Live below your means. So create discretionary income. That's step one. You have to have money that you could plant, whether it's stocks, crypto, classic cars, whatever your thing is. I don't care what it is. I got a buddy of mine who has a seven-figure portfolio in ice hockey cards. But that's his thing. That's his jam. So be it. So again, have disposable income. Step one. Either make more money or spend less. Olivia and I, at 30 years old, so this is 23 years ago, we spent every penny that came in.

• 32:19Speaker 01

  Over the course of 18 months, we spent half. So we had 50% of our income that we could sock away to real estate and deal with the problems, right? Broken water heaters and evictions and all that other stuff. Step two is you got to become elite at something. Find your thing. Is it crypto? Is it stocks? Is it, is it being a YouTube podcaster? What, whatever your thing is, commit to that, become elite. And this is the one everybody hates. You got to do it for a decade. You need time to compound. You need time for proof of concept. It's just, we all want things easy today. We want instant. It's not how wealth works. Wealth is slow and consistent and sacrifice.

• 32:59Jack Selby?

  One thing I find really interesting is how you constantly say, okay, well, like, we'll make 50 to 60 a month, but we'll spend 12. You're like one of the maybe two people we've ever had on this podcast that are like, I'm content with where I'm at. Like, I don't need more real estate. I don't need to keep growing. I have enough margin. I'm curious, what makes you different than most people who continue to push off the goalpost? And, and how are you able to do, is it a better way of life?

• 33:23Speaker 01

  Well, I'm certainly not in a position to, to answer that last question. I, I will tell you that I'm happy. I'm, I'm not, I'm more than content. I can do anything I want, when I want, with whom I want. And that's pretty amazing.

• 33:35Jack Selby?

  How are you able to do that with 12? Most people would argue, I mean, Graham would argue, okay, well, if you have a family of four and if you have this, then you probably need 30, $50,000 a month.

• 33:43Graham Stephan?

  I would argue 50,000.

• 33:44Jack Selby?

  Yeah, he would argue you need $50,000 a month.

• 33:47Speaker 01

  Well, our daughter is 35, so she's already out of the house. So that's part of it. It's just Olivia and I. And we only have one, I'll call it advice, because it's probably more than most people spend, and that's eating out. We love to eat out and get good food. We don't look at prices. But other than that, we stay home. We're kind of boring.

• 34:04Graham Stephan?

  And what would you tell someone who feels like they've done everything right? That they follow your advice, they save money, they avoid debt, and they still can't afford to buy a house?

• 34:13Speaker 01

  What I would tell you to do is keep grinding. You're all, it, this is a, this is, this is, it's not easy, but simple. Back to the earlier point, you just gotta keep going. It's only three step guys. If you don't have enough down payment today, get more of a down payment. Right? Live below your means. Here's a, here's a true story. So, um, I just want to get as close to accurate as I can. So it's probably 2015. We've been buying real estate for 14 years. We probably have over a hundred units. I go to a, a housewarming of somebody who reports to me. So like, in, you know, like you got people to report to you. So I'm a director and this manager reports to me. His house is better. We live in a condo. We never upgraded our condo.

• 34:56Speaker 01

  We had a 1300 square foot condo, never upgraded. We had cars that were 10 years old. Right? We just never, we took all our money and socked it in real estate. So he had a better house. He had a backyard. We don't have a backyard. He had new cars. He had a third car. We don't have a third car. His kids went to a better school district. So after this, and again, he reports to me, which is really what screwed with my head. I'm trying to drive home and it's only five miles, probably maybe six. And I get about halfway home. I have to pull over because I'm bawling. I'm crying.

• 35:32Speaker 01

  Because for 12 years, I've asked my family to sacrifice, live below our means. And I don't know it's working. 12 years. And, you know, this, you know, direct reports of living better than me, or at least I thought so. So first thing happens is Olivia drives us home because I literally couldn't see the road. And then she pulls up the spreadsheet and shows us where we are. Cause it, I, I had a, I had a job that took me all over the world. I worked 60 to 70 hours a week. I had no idea where we were. I was always next deal, next deal, next deal. And then she pulled up the spreadsheet and showed me it was working.

• 36:09Jack Selby?

  What does working mean?

• 36:10Speaker 01

  Cash flow was coming in. We were, you know, we could live on that, that number at the time. So it just, it, it, it dawned on me, but again, I had that moment after 12 years in building a hundred unit portfolio that I didn't know if it was working because I'm an employee. I'm not a guru. I'm not running around doing on stages and all that stuff. It's not my thing. I'm just a simple guy who loves to, you know, um, I interviewed Graham one time and he talked about his fish tank. For me, the economy is my fish tank. I have done the same thing for 35 years. I wake up at 6:00 AM. For the next 90 to 120 minutes, I'm reading financial news because it's a big puzzle to me. It's fun. It's fun for me to watch all these things work together.

• 36:52Speaker 01

  That's entertaining for me. And now because of YouTube, I just do a daily show at 7:30 and live and let the world know. I haven't, dude, I, it's like 300 people watch it, but I love it. So again, I don't have these big desires. I don't want to be a billionaire. I, you know, I, one of the nicest things that Pace Morby ever told to me, because I, I talked to him occasionally, was Zubor, you gotta know thyself. And that was, that's like a big weight fell off my back because I suffer the same comparison that I'm sure most guys do. Like, why can't I do that? Why can't I do that? This, that, the other. But, you know, at some point I got, I got, I have more than, more than what I need. So.

• 37:34Speaker 00

  This episode is brought to you by Google Chrome. You think you know a browser, but Gemini and Chrome? That's new. It can help you with practically anything on the web, like restoring a vintage motorcycle from a 50-page restoration block, or finally break down that long article you've had open for weeks. Gemini and Chrome is here for it. Ready to make anything online make sense? There's no place like Chrome. Check responses setup required. Compatibility and availability varies. 18 plus.

• 37:59Jack Selby?

  59, 60, 60. Oh, hey, I didn't see you there. I was just getting a quick little bicep workout in. And technically I didn't even need to be counting my reps. This thing counts for me. Six, seven reps in, it won't forget. Great timing though, because AMP is actually sponsoring today's episode and they sent one over for our new warehouse gym. This is AMP, the smartest home gym on the market. Think of the cable setup you'd find at a commercial gym, but in your house. It counts your reps, remembers your weights, and when you walk up and hit start, it's already loaded from your last session. All the guesswork is gone. You can run it in fixed mode for a standard cable feel, or flip it to eccentric mode for extra resistance on the way down. Every fitness expert that we've had on the podcast says that time under tension is key, and this gives you exactly that.

• 38:42Jack Selby?

  It comes with a full set of attachments that lets you do over 500 movements. It's basically like having an entire gym, but in the corner of your room. And if you don't know where to start, it picks a trainer, builds your And tracks everything automatically and you're not paying $100 an hour for a personal trainer. And on top of all of this, a white glove crew installs it. Ours was up and running in 30 minutes and there's a 90 day free returns policy. AMP handles the whole pickup, but less than 1% of people send it back. So that should tell you something. The link is down below in the description, guys. I could not recommend this equipment more. Check it out at AMP.ai or also link down below in the description. Use code IcedCoffee for 10% off. It truly gets a great workout in. Thank you so much to AMP for sponsoring this episode and back to the podcast.

• 39:26Jack Selby?

  This episode is in partnership with Airbnb. Graham and I are literally always traveling for the podcast. And in fact, these past few weeks have been very brutal. We have worked so much, but there is light at the end of the tunnel. I'm actually going to both Thailand and Japan for the next three weeks with a couple of close friends. I cannot tell you how excited I am for that. The beaches in Thailand, to die for. The food in Thailand, amazing. And I'm telling you, it's going to be a blast.

• 39:49Graham Stephan?

  If you travel a bunch, you probably don't think twice about your home city empty. But when you're away, you could actually list your place on Airbnb instead of leaving it unused.

• 39:56Jack Selby?

  And if you've ever considered hosting, but weren't sure how you'd manage everything, the co-host network can help make it feel a lot more manageable.

• 40:03Graham Stephan?

  With this, you could partner with a local co-host who has hosting experience. It can help manage things like creating a listing, managing reservations, messaging guests, and helping make sure everything runs smoothly during their stay.

• 40:13Jack Selby?

  Honestly, it just feels like a practical way to make better use of a space, while also bringing in a little extra cash while you're away. At one point, I hosted my place on Airbnb. I kid you not, the guy that checked in was a fan of the channel. I've never said this before. It was a crazy experience, but the entire setup was very straightforward. Everything ran smoothly and it turned into a genuinely great experience overall. If you're interested in hosting and you want a little help getting started, find a co-host at Airbnb.com/host. So on this very impressive 50 year spreadsheet that you made, what were some of the, the most interesting findings? The most relevant findings that the viewer could use right now to educate themselves, to put themselves in a great spot?

• 40:51Speaker 01

  Well, let me answer that with the one thing that was shocked me the most, and that's about inflation. Right? We've, we've heard, you know, we had 9.1% currently. If you believe CPI lie, 3.8, whatever it is, they're all talking about 2%, 2%, 2%. So the one question I asked myself after building it was, have we ever had a period of time, an extended period of time, where inflation was over 2% and it was CPI? And the answer surprisingly was 1987 to 1997.

• 41:20Speaker 01

  CPI inflation was over 2% that entire decade. So we're talking about the Fed getting below 2% and it's been above 2% for four years. But guys, we've been there before. It was over 2% for an entire decade. So what we're going through today is maybe not unusual or unheard of as sometimes the media makes it out to be.

• 41:41Graham Stephan?

  For someone who studies the market so much, have you noticed any correlation between the stock market and the housing market? Because it seems as though the high end market is really tied to stocks. And if stocks are doing well, housing does well.

• 41:55Speaker 01

  There is no question that there's a correlation in certain cities, Seattle, Austin, San Francisco, San Jose, markets like that where there's absolutely a correlation in the stock market. And again, you could see that in transactions because I talk to agents almost every week around the country. And when the stock market takes a big dip, which has done a couple of times in the last years, showing stop, all this other stuff, because again, it's their asset wealth there. But I actually want to ask you a different question. Back to the 52 year spreadsheet because I knew I was coming here today. We've obviously had three years and I think we're going to have a fourth year of double digit S and P 500 growth. Do you guys know if that's ever happened before?

• 42:33Graham Stephan?

  Yes.

• 42:34Speaker 01

  Do you guys know what happened the next 11 years?

• 42:37Graham Stephan?

  It was suboptimal growth.

• 42:39Speaker 01

  It was flat. It went, I have the numbers here on the spreadsheet, right? It went from like 1280 to, you know, 1302 or something after 12 years. So I thought that was interesting. Now, why would that happen? Well, it's called reversion to the mean, guys. You've had four years of 20% growth and you've probably heard Warren Buffett and everybody else say stocks return 8%, right? You guys have heard that? Well, you just had four years of 20. In order to get back to the historical run of eight, you're going to have some. Rough years.

• 43:14Graham Stephan?

  So I've heard the argument, though, that we can't look back 50-plus years in the market because our economy has fundamentally changed since the internet. And when you look, starting the year 2000, the price-to-earnings ratio has skyrocketed.

• 43:29Speaker 01

  Sure.

• 43:30Graham Stephan?

  And now, that could be the new normal. And even though we are high on the scale of the new normal, we're not at the peak. And with AI and with our global economy, everyone kind of rising, at the same time, they say that these elevated returns might continue longer than you would expect.

• 43:49Speaker 01

  Well, again, nobody has a crystal ball, and that is absolutely possible. History says it's not going to end well.

• 43:58Speaker 01

  Right? Again, if you want to talk about AI, again, stock market, all of that, I look at it all the time. I think there's a lot of circular revenue in there. I do think that, again, studying economics, if you go back and look at where we've had crises before, you could look at railroads, you can look at utilities, you can look at the internet, DCL lines, all of that, there's a time where money comes flying in. Right? It just keeps investing. Every idea is funded. And then, it's not. And, you know, I don't know why AI would be any different.

• 44:31Graham Stephan?

  Now, if mortgage rates drop to 4% tomorrow, what would happen to the housing market? Would it be that prices explode? Or would it be that supply finally begins to catch up?

• 44:42Speaker 01

  Well, I love that you asked that question because my brain always goes to why it collapsed to 4% because that's a different answer. For example, one of the reasons it could collapse to 4% is we are now in a depression. Unemployment's 11%. It could be something nasty like that. Or, it could be the other side. Kevin Warsh says we've got some new whiz-bang inflation measure, and it's 1.8%, and we're this, that, and the other. And then he could cut. So there's really two answers to that.

• 45:11Graham Stephan?

  Let's see the second answer, because he wants to do what's called trimmed averages.

• 45:14Speaker 01

  Correct.

• 45:14Graham Stephan?

  Which would basically take out the extremes of any inflation report. So in this case, he would take out the extreme of rising oil.

• 45:22Speaker 01

  Correct.

• 45:23Graham Stephan?

  All of a sudden now inflation goes from four down to 1.8.

• 45:27Speaker 01

  Yeah.

• 45:27Graham Stephan?

  Within target and then they could cut rates.

• 45:29Speaker 01

  Absolutely.

• 45:30Graham Stephan?

  So if that were to happen, because that seems plausible.

• 45:32Speaker 01

  Oh, absolutely is plausible. And one of the, I think Kevin Warsh is going to do three things. One is change the definition of inflation, go from CPI to this median trimmed or whatever it's called. He's also going to stop the Fed presidents from communicating so much. And then he's going to use technology to, to get better economic metrics. This whole telephone survey nonsense is going to be flushed down the toilet. So those are the three things you could expect Kevin Warsh to do inside 90 days. So let's, what you're describing is a rosy and fun picture. It's really interesting. I actually think prices would go down. Because I think we've had four years of restricted selling.

• 46:11Speaker 01

  And if you take rates to 4%, enough people who have been just kind of getting by, like we talked about earlier, I think a lot of them would list immediately. And anytime you get more supply in a very short window, prices will fall. So I actually think that median home prices fall maybe for four to six months. If interest rates go sub 4%, which is probably a, probably most people would disagree with. But I, I think that's pretty certain.

• 46:40Graham Stephan?

  So do you think anyone can be a real estate investor?

• 46:44Speaker 01

  Can, yes. Should, no.

• 46:47Graham Stephan?

  Who should and shouldn't?

• 46:49Speaker 01

  It's, it's folks that can understand this is a journey. It's a 10-year journey to building wealth. There will be lots of twists and turns and some very bad days. People will steal from you, stuff will break. Permits will be a problem, right? So not everybody can handle the ups and downs of real estate. So can everybody? Sure. Should everybody? No. I don't think everybody's wired to sacrifice for a decade, deal with the BS that happens, and you know, still smile at the end of the day. Because there are some very hard days.

• 47:20Graham Stephan?

  Is it still worth it to invest in real estate though?

• 47:24Speaker 01

  I don't know why it wouldn't be again, if you can find the right deal, if you can get the right debt structure and you can hold for more than a decade. History says you're going to be okay, right? You got to own assets, dude. We live in a fiat based economy. This is what drives me crazy. You guys think that we're going to go back to the gold standard or something crazy like that? No, we're going to grow our way out of this. They're either going to default or we're going to grow. Dude, inflation's a feature, not a bug.

• 47:49Graham Stephan?

  So why wouldn't you just invest in the stock market instead?

• 47:53Speaker 01

  Well, again, I think everybody should do their thing. I have a very dark history with the stock market. I turned from seven to two to go to 40. I chose to become a real estate expert. If you want to take the time to study the stock market, if you want to take the time to do that, then you should do your thing, right? I'm not here to tell you that real estate is the right answer for everybody. In fact, it's probably not the right answer for most people. Most people should buy index funds. Most people should buy mutual funds. They should save for their 401k. But if you want to grind and you want to have a buy box and you want to be a freak of nature and look at it every day for three years like I did, then I welcome you to the party. You can get wealthy that way. Real estate is inefficient, guys. The stock market's not inefficient. The price of Intel or the

• 48:37Speaker 01

  price of Nvidia is known by everybody on the planet at every second. That's not how real estate works. I just sold a duplex. I told you that in the opening. I valued this duplex on my financial statement at 400 grand. I would not have bought it for anything more than 250 today. I had somebody offer, somebody reached out to me. They wanted to run a sober living facility there because it's two four bedroom, two bath houses on one lot. So big houses like 1800 square feet or something. It's perfect for what they want. So I didn't want to sell this house or this duplex. You know, I have a list of properties that I'm going to give my daughter Teresa. And this was on that list because

• 49:18Speaker 01

  it just prints money, right? It's easy. It's yards. It's got a fence down the line. So it just operates like two houses. It's not connected. I wasn't going to sell. So he kept pushing, kept pushing, kept pushing. And I finally said 599. Again, I valued it at 400. Right? I'm like, hey, dude, if you want to pay 50% over, I'll sell. So I say 599, he ghosts me, or at least I think he ghosts me. Turns out he's got grant money from the state of California. And he comes back to me at five and a quarter. Again, I value it at 400. So I come back at 5:50. We settle at 5:37.

• 49:59Speaker 01

  I also take the commission from 5% to 1%, as is nothing else.

• 50:05Graham Stephan?

  How is that responsible from the state of California to throw money at a property significantly above what it's worth?

• 50:12Speaker 01

  They have a need, and that is the only house in that's or the only setup. They identified five properties and mine was the unicorn that fit their need. And the only way to get it from me was to overpay. So I'm not, I'm not here, I'm telling you right now, they overpaid.

• 50:29Graham Stephan?

  See, I'm gonna say this, like, I'm not saying it's illegitimate, but I've like Nick Shirley's video on the hospice situation.

• 50:35Speaker 01

  I've seen it, yep.

• 50:36Graham Stephan?

  It just makes me think that when I was doing real estate in Los Angeles, the sober living people who would reach out were always seen as a bit of a joke because they would come in and offer like double the price for anything. And they were always the most like unscrupulous people who would just like come in and they would be wearing chains and this and that. And they drive up in a brand new Benz. And they just didn't seem like a sophisticated investor or business. But somehow they had 30 grand a month to spend. You know what, it just, it made the wheels turn that like something's off.

• 51:14Speaker 01

  Something's off, yeah. So I, I have no idea if that's what this person, I only did, did everything over the phone and email because I had a team down there. But yeah, it could have been, but again, we sold it, we raised more capital. And, you know, we're probably putting it in apartment buildings.

• 51:28Jack Selby?

  What are some of the biggest lies about investing in real estate that you're seeing spread online? Because I'm sure that you see a lot of crazy content, especially from some famous and potentially like, people see these people as expert real estate investors.

• 51:44Speaker 01

  I think a lot of people do two things that annoy me about real estate investing. A, they try to make it sound easier than it is. And B, they try to sell the lie of you don't need any money. I think both of those things are, they're going after the wrong crowd. They're going after the crowd that doesn't have a, doesn't have the money to scrape together to, you know, really get into this. And that's why they should just make more money or spend less and keep saving. But I think there's a lot of unscrupulous people that are selling the idea of easy and also a version of no money down.

• 52:15Graham Stephan?

  So what's your thought then about just buying real estate right now outright in cash as an investment?

• 52:21Speaker 01

  So back to the answer of debt. And this is, this is why what we're going through today in multifamily is exactly what happened with residential and the GFC. It's the debt that blew up and it's the payment that blew up. You could add on top of this, you know, insurance taxes also in some parts of the country. But guys, it's always the debt. Resolution RTC, debt. Savings and loan crisis, debt. It's always the debt that blows up. So again, what I tell most people, and you'll hear me fight against this all the time, is just get 30-year fixed rate debt. Don't get ARMs. I don't care if your plan is delivered there five years. Don't get a seven-year ARM. 30-year fixed rate debt, because you guys don't realize, you guys probably do, but the audience doesn't. We are so uniquely gifted with the 30-year fixed rate mortgage.

• 53:06Speaker 01

  It is a one-way bet. If rates go up, do nothing. Rates go down, you can refi. Canada, five years. Australia, 10, whatever it is, right? It's the debt that blows up. That's why Canada's real estate market's in trouble is because the debt's blowing up.

• 53:19Graham Stephan?

  So is it worth it then to buy in cash? If you have the cash, is that a good bet?

• 53:24Speaker 01

  Again, if you're going to, so the answer to that question, Graham, is where are you in your journey? If it's your first property, most of you will never get there doing the Dave Ramsey, save, save, save, save, save. Because the price will just get away from you. You can't save fast enough. I believe when you get to the point you can have 50% equity, that is great, right? I think I said the numbers earlier. We're at 25 and 9, so that's even below 50%. But that's, that's where we're comfortable, is at the, right around the 50% number. But again, we were not there for a decade. We, I took every penny out of real estate the first 10 years. I did cash out refis, 1031 exchanges, all that stuff. Because again, I was about growing the base. So you just have to decide what kind of investor you want to be.

• 54:08Speaker 01

  Are you growing the base and just keep rolling the equity up? Or at some point, do you want to get more conservative? So where are you in your journey is the answer.

• 54:16Graham Stephan?

  What's the most difficult part about being a landlord?

• 54:18Speaker 01

  I'll answer that in two different ways because being a landlord for a single family home is very different than apartment buildings. So we'll split that up. So being for a single family home, it's probably dealing with late payments because again, that's because again, in a single family home, the tenant does all the maintenance or at least most of the maintenance, you know, they're supposed to do the yard and water and all of that. So again, it's dealing with tenants who are telling stories or lies. So collecting rent. And then multifamily, it's so, it's so, I was not ready for this. It's like you're a counselor. He's parked in my spot. His music's too loud. The radio's this, the baby's crying, the dog did this, blah, blah, blah. So you're, you know, you're a social worker.

• 55:02Jack Selby?

  How do you invest your margin outside of real estate? Because if you're able to save an additional 40 or so thousand dollars a month, what do you do with it? Do you buy stocks, crypto, real estate, save it?

• 55:14Speaker 01

  No, we actually enjoy life at this point. I told you guys earlier, we did three weeks in Australia. That was from the gravy. We just did a week in Banff. That was from the gravy. We're doing a cruise in a month. That's from the gravy. So we're enjoying life.

• 55:25Jack Selby?

  So you're just spending it?

• 55:26Speaker 01

  Yeah, we're enjoying life. Because again, I think most people just keep changing the goalposts. And I've been very good about not doing that.

• 55:34Jack Selby?

  How did you not do that?

• 55:38Speaker 01

  It's, I don't know if it's, I can only speak for guys. It is tough for a man who's a, you know, AAA personality to kind of check out. And the nearest thing I could tell you is, you know, we've climbed this financial mountain now 25 years. It's been 25 years. And what Olivia and I have agreed to is we're, we're going to sit down and we're going to enjoy the view. I am not saying I won't stand up and climb higher later. That's, that's how I, that's how I get around this. I think at 53, I still have a good 10 or 20 years to really get in it if I want to. But I also know that at 53, I could sit here for 20

• 56:19Speaker 01

  more years. So I do, how I get around it is I give myself permission to stand up and grow if we want to. And that is enough for me to not have this voice in the back of my head calling me a loser. Because even where I'm at, the people that we interact with, most of them will call me a loser, probably. Because, you know, I'm not striving to be a nine-figure person, or this thing, or that thing. I'm like, dude. I got a pretty good life.

• 56:45Graham Stephan?

  And so at what point do you think most people could live a life like that?

• 56:48Speaker 01

  That is the, that is the most important question. I believe most people don't know what their life costs. They don't know what their life costs. They don't know where the money's going. So I suggest most people do a 30 or 90 day audit and track every freaking penny. Because you gotta know what your life costs. That's what we did. Then what we did is we did a need versus want analysis. Do we need this? Or do we want this? And we were ruthless. We did this together. But we took our expenses from 100% to 50% by being ruthless.

• 57:29Graham Stephan?

  So from $24,000 a month to 12?

• 57:32Speaker 01

  Well, again, so again, I was 30 years old at the time. So it was probably eight to four. Something like that.

• 57:38Graham Stephan?

  Did you notice a lifestyle difference from eight to four? Or was it like all these things that you just weren't paying attention to?

• 57:45Speaker 01

  Our friends did not know what was going on. That's the most thing. That's, that's what it is, right? Again, I was in Silicon Valley and a sales guy and people would drop crazy money on belts and shoes and new cars and lease payments and keeping up with the Joneses. We were just not participating. We were, we were made fun of, I'm sure. Right? Because again, we had, you know, at the time, eight or nine year old cars. We, I know we were made fun of at our silly little 1300 square foot condo. Right? Because we could have easily upgraded three or four times. So yeah, it was our, it was, we had to change our network because we just refused to participate in the culture of consumerism.

• 58:21Graham Stephan?

  I'm always curious how much other people are making. When I see them living this like crazy lifestyle, I'm always wondering, is that like a paycheck to paycheck thing? Or is that like they're making way more or like?

• 58:34Speaker 01

  I, I know, I know hundreds, if not thousands of people in the Silicon Valley. And I mean, a salary at Facebook is 386 grand.

• 58:44Speaker 01

  386 grams, the average salary at Facebook. And most of them are living paycheck to paycheck because they do dumb shit with money. It's crazy. It's wild. Now, some of that's because it's expensive to live there. And then, and then they, and again, both parents work, so their kid's in daycare, right? So there's some of that real life stuff. But no, the, I'm sure you both have seen articles about people making 200 or 300 grand living paycheck to paycheck. It is all over the Silicon Valley.

• 59:09Graham Stephan?

  And most entrepreneurs don't realize how much time and money they're burning in traditional hiring. We're talking job postings, interviews, onboarding, sometimes months before someone's actually doing the work.

• 59:19Jack Selby?

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• 59:32Graham Stephan?

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• 59:40Jack Selby?

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• 59:54Graham Stephan?

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• 1:00:05Jack Selby?

  That is U.P.W.O.R.K. dot com slash coffee. Upwork dot com slash coffee.

• 1:00:10Graham Stephan?

  Now, really quick, I gotta say that when Jack and I first started the Ice Coffee Hour, we had to figure out everything ourselves, from like the best cameras to use, the best editing equipment, how to get guests, how to run a podcast to begin with. Every single day was a brand-new challenge, which is why if you're starting or growing your own business, you know how valuable today's sponsor is, and that would be Shopify.

• 1:00:27Jack Selby?

  Shopify is exactly like having an all-in-one business partner. They support millions of businesses worldwide, from major brands like Allbirds and Jimm Shark to people who are just getting started. And here's a fun fact: if you've shopped online in the US, there's a really good chance it was through Shopify, because I kid you not, they handle about 10% of all American e-commerce.

• 1:00:44Graham Stephan?

  What's really great about Shopify is that they give you access to a complete design studio with hundreds of ready-to-use templates to build a beautiful online store that perfectly matches your brand. Even better, there's no coding needed. And their AI tools even help you write product descriptions and enhance your product photos.

• 1:01:00Jack Selby?

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• 1:01:13Graham Stephan?

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• 1:01:34Jack Selby?

  So what's the secret to financial independence, then?

• 1:01:37Speaker 01

  Well, that's actually really interesting. You guys did an interview with Caleb Hammer. You asked him something like, have you seen people be successful at this? Right? Taking his advice and getting on this track for financial freedom. And his answer was very spot on, in my opinion. It's people who have gotten fit or done, overcome something hard. Why was that? I mean, that was the most valuable part of that conversation for me. Because it is so true. Getting financially fit is a 10-year journey, and most humans cannot do that for 10 years. But you know what? A health journey? Six months. You could change your body in six months. Right? So again, I think he's right. If the people that are going to figure out how to get wealthy have done something hard

• 1:02:22Speaker 01

  and seen the benefits. Because if you can't make those connections, why are you going to sacrifice? So again, I think they, I think if you want to get wealthy, get healthy.

• 1:02:31Graham Stephan?

  You know what's something crazy is I read that there are more people in the United States that have a million dollars or more than have a six-pack.

• 1:02:41Speaker 01

  I've read that too, and it's not even close. It's pretty crazy.

• 1:02:44Graham Stephan?

  That's crazy. And when you really think about it, a six-pack is simply eating less calories.

• 1:02:50Jack Selby?

  Grim.

• 1:02:50Graham Stephan?

  Than you what?

• 1:02:51Jack Selby?

  Let's be honest, neither of us three have a six-pack.

• 1:02:55Graham Stephan?

  I'm just saying.

• 1:02:56Jack Selby?

  Neither of us three have a six-pack.

• 1:02:58Graham Stephan?

  Not yet.

• 1:02:58Jack Selby?

  Okay. Like, how many people do you even know that have a six pack? Jake, you do. Mike Parker will claim he does, but he knows he doesn't. And if you're watching this, Mike, you do not, you maybe have a two pack.

• 1:03:10Graham Stephan?

  Jake does.

• 1:03:11Jack Selby?

  Jake has a six pack.

• 1:03:12Graham Stephan?

  Jake does.

• 1:03:12Jack Selby?

  He probably got etching. No, he didn't.

• 1:03:15Jack Selby?

  I don't know. I, I, very few people have six packs.

• 1:03:18Graham Stephan?

  Liver King is.

• 1:03:19Jack Selby?

  Liver King etching, you know?

• 1:03:21Graham Stephan?

  Gosh.

• 1:03:22Speaker 01

  Yeah, but no, I, I really do think if you accomplish something hard, and it could be anything, it could be learning a second language or whatever. It's just something that takes shorter duration, you're much more likely to get wealthy because you make the connection.

• 1:03:36Jack Selby?

  It just reminds me of the same thing. It's the Dave Rand. I feel like every single time someone just absolutely drops a bomb on the podcast. I'm like, that just sounds exactly like something Dave Ramsey said. What you just said is it, it's the same thing that he said where it's like, how do you actually motivate someone to change, which is effectively what we're asking here? And he just says, take it from the eyes of a farmer. Will a farmer plant the crops? Will he water them on, on a schedule? Will he do all the things, tend to his plants to make sure that they grow? If he thinks they won't actually grow into a nice yield of, of corn. No, he won't. But if he knows that he does, if he does all the things correctly, then he will have a yield, then he'll do it.

• 1:04:16Jack Selby?

  And so it's just like the faith, in his opinion, the faith that if you put good in, you'll get good out, which is effectively what you're saying. Have you been through something hard, worked hard at it?

• 1:04:24Speaker 01

  Seen the outcome?

• 1:04:25Jack Selby?

  Yeah.

• 1:04:25Speaker 01

  Yeah, seen the outcome and then you're willing to do it again. I want to give a shout out to Dave Ramsey. So I've seen a lot of presentations in my life. I, I, I was, I was a sales guy, so I saw lots of these. He gave the most meaningful presentation I saw. It was at a Think Media event with Sean Kano. And Dave Ramsey basically was on stage saying, I've been saying the same thing for 40 years. He hasn't deviated. And that was such a great thing for me to hear because again, I think getting wealthy is remarkably simple. And I'm going to keep saying the same thing. You guys heard me talk a buy box. I've been saying the same thing. So the fact that Dave Ramsey, after 40 some odd years, is saying the same thing and still impacting lives? I love that. I love that. That was the most impactful speech I'd ever seen.

• 1:05:08Jack Selby?

  What do you think about the fact that Dave Ramsey would not borrow a billion dollars at 0% interest?

• 1:05:14Speaker 01

  Again, you can never judge a man. To each his own. I would certainly take that money, throw it in a T-bill, and enjoy the money and then pay it off. It's brain-dead simple to me. But again, if you're anti-debt, and you don't want it, that's, you know, I get it.

• 1:05:27Jack Selby?

  I will say that his, based on the context of his life, context aside, I don't think it makes sense, but in the context of his life, it actually kind of does make sense. If you've already won the game, what do you have to gain from 3% in a T-bill?

• 1:05:40Speaker 01

  No, yeah, if that's the question, yeah.

• 1:05:42Jack Selby?

  But if, you know, you take a broke person, he would tell them, "Oh, you shouldn't do that." I'm like, "Okay, well, in that case, it will actually change their life if they do that." But for him, it's not going to change his life. He gets 3% on a billion.

• 1:05:52Speaker 01

  I completely agree with that. Again, it's really funny. I've seen a lot of people quote-unquote, "win the game," and they make one more play and it blows up. I knew a guy back in the GFC who was worth 10 million bucks, and he didn't take one 50K loss on a custom home, and his entire empire broke.

• 1:06:10Jack Selby?

  What do you mean by that?

• 1:06:11Speaker 01

  So he's trying to sell a house. He was selling big at the time, 2 and 3 million dollar homes in the Bay Area. Now they're probably 7 or 8 million. But he was into this house, and the buyer wanted to get a 50K credit for something. I don't remember what it was. And he said no. So he had to put the property back on the market. And then it sat, and sat, and the interest kept eating him alive. And then that caused another one, and another one, and another one, and then he was wiped out.

• 1:06:40Jack Selby?

  How common is that?

• 1:06:42Speaker 01

  Well, is when, this is, I'm glad this goes back to that spreadsheet. This is why I had to build that spreadsheet, because it's more common than you're not, than not. People, you know, they don't realize the cycle changes. They always think the cycle's going to go up, and cycles, that's not how cycles work. Cycles go up and they go down, and they go up and go down. So, back to building the spreadsheet. I just wanted to know if I was going to get hurt again. So yeah, cycles happen.

• 1:07:05Jack Selby?

  Do you think I'm missing out by not investing in real estate more aggressively?

• 1:07:10Speaker 01

  Again, you guys have, you are the top 0.1% of what you guys do. You should be full on that. Real estate would distract from your gift. It's hard. Now, if someday you get married, for example, and she is interested in real estate, you could get her to be a real estate professional and things of that nature. But I think you are so, dude, lean into what you're really good at.

• 1:07:39Jack Selby?

  Like selling covered calls. Do you think that I could just then like save up as aggressively as I possibly can, buy a place cash, and then just rinse and repeat that process? Like, would that be smarter then? Because then I could probably eventually apply for real estate professional status.

• 1:07:54Speaker 01

  No, you're never gonna, no, you're never gonna, no.

• 1:07:56Jack Selby?

  I don't, I don't work too much, let's just, you know, call it for what it is. In the event I do end up filing as a real estate professional, I don't work too much on the iced coffee hour.

• 1:08:03Speaker 01

  You're, the income differential would not make that.

• 1:08:06Jack Selby?

  Okay.

• 1:08:06Speaker 01

  It's not gonna happen, sorry. I've thought about it too, but it's not gonna happen. But your wife could. That could happen.

• 1:08:12Jack Selby?

  You guys heard it here, so.

• 1:08:14Speaker 01

  He's getting married.

• 1:08:15Jack Selby?

  Yeah, if you're a real estate professional.

• 1:08:16Speaker 01

  Or husband.

• 1:08:18Jack Selby?

  If you're a real estate professional and you're a woman.

• 1:08:21Speaker 01

  If you want to date.

• 1:08:22Jack Selby?

  Yeah, let me know, let me know. So, yeah, okay, noted, I will not.

• 1:08:27Speaker 01

  But so, so, so let me add to the, so again, if you are committed to real estate because you just believe it, again, I always go back to know thyself. I would not own properties free and clear. I would get 50% loans, that's what I would do if I was in your situation.

• 1:08:39Jack Selby?

  I have this house right now, I might move out of it at some point.

• 1:08:42Speaker 01

  Sure.

• 1:08:42Jack Selby?

  I have $400,000 in debt on it, it's probably worth $700,000. I, I live in it now, so I have the exclusion from the capital gains tax.

• 1:08:51Speaker 01

  Correct.

• 1:08:51Jack Selby?

  Should I then sell it when I move out, or should I just rent it out?

• 1:08:55Speaker 01

  Again, I don't.

• 1:08:55Jack Selby?

  It's 2.875%.

• 1:08:56Speaker 01

  I don't know all the numbers, but assuming it would cash flow, I guess, assuming there's, it's not, I call it an alligator, when you have to feed it every month. Again, at 2.87 or whatever it is, I'd assume it would cash flow.

• 1:09:07Jack Selby?

  Yeah, just keep it. And again, if you just keep it. Here's my argument, though.

• 1:09:12Speaker 01

  Well, hold on one sec, so again. You could keep it and try it because again, that five-year exclusion, you could try to be a landlord for three years.

• 1:09:19Jack Selby?

  Yeah, that's what I was thinking, yeah.

• 1:09:20Speaker 01

  And if you don't like it.

• 1:09:21Jack Selby?

  Then sell it.

• 1:09:21Speaker 01

  Then bounce, but sorry.

• 1:09:23Graham Stephan?

  The problem with Jack's house is that any amount of vacancy or one repair or one major thing would eat up a significant chunk of the profit. And if one thing comes up in the year, the amount that he's netting on this, even with his mortgage, is so insignificant that it's not even worth his brain power. Like, just doing one episode.

• 1:09:43Speaker 01

  I got a lot of brain power, okay.

• 1:09:44Graham Stephan?

  One episode a year of the Ice Coffee Hour.

• 1:09:48Speaker 01

  I'm sure.

• 1:09:48Graham Stephan?

  Would surpass the rental income.

• 1:09:51Speaker 01

  So, again, I want to lean into my two earlier answers. Again, you are, you guys are very, very good at what you do. And you should lean into a new income streams and partnership. You guys are at the first inning of what should be a multi-inning game. So, keep going. And you're right, anytime, you know this, real estate consumes brain. It's like brain damage. And that could set off a bad day and it can cause you to do this or do that, or you get antsy. But that said, I do believe that real estate for guys like you could just be a forced savings account. So, I mean, there's, you've got to know thyself.

• 1:10:29Jack Selby?

  That's the way I see it. At the very least, I have diversification of investments. So, like, I would have, all of my money is in stocks. Do I want more money in stocks? Or could I at least have $700,000 invested in Las Vegas real estate? I don't think that's like the worst thing in the world.

• 1:10:43Speaker 01

  So, again, I think, I think with that five-year exclusion, you try it out for a couple of years and you see if it impacts your job. The second it impacts Ice Coffee Hour, sell the damn thing.

• 1:10:51Jack Selby?

  Yeah.

• 1:10:52Graham Stephan?

  But then there's going to be that cliff of like year three, where maybe it's like, well, maybe this is good enough. But year four comes around, you've got to replace that roof. All of a sudden, the AC goes down.

• 1:11:03Speaker 01

  You should be.

• 1:11:04Graham Stephan?

  Tenant moves out and then it's like, well, then you lose the 250 cap.

• 1:11:08Speaker 01

  Well, you should, well, yeah. That's why the three years is that you've got to be really on that. Because if you're going to get past three, you're in it for 10.

• 1:11:16Jack Selby?

  What do you think about investing in commercial real estate?

• 1:11:19Speaker 01

  So define commercial.

• 1:11:20Jack Selby?

  So anything that's like multifamily, multi apartment complex? I'm not talking, I'm talking like living.

• 1:11:25Speaker 01

  So multifamily, just so we're clear. Multifamily is an investment that I am looking at personally. Why? Because in the spreadsheet, it showed me that after interest rates went up with Paul Volcker, the RTC occurred eight to 10 years later and properties were sold at significant discounts. So earlier in this episode, I told you about selling a duplex, the fact that we've raised seven figures. I am looking to buy multifamily apartments at 60 to 70% of debt. That's what I am looking to do. Now, in my market of California, that's probably still a year away. That's already occurring in Texas. I've seen some things in other parts of the country, but this bomb, it's going to be a great transfer of wealth and I look to be a part of it.

• 1:12:09Speaker 01

  So I think multi, like if you have the stroke, it's multifamily for me.

• 1:12:14Jack Selby?

  Brandon Turner said something that I thought was very interesting. He said, the value of real estate is effectively the cost of the real estate. Like if you can build cheap. Exactly. If you can build cheaper, then the value of real estate will go down. And he thinks that AI will cause things to become so deflationary that you'll have humanoid robots that are able to build a house. This could be 15 years, but they can build a house in a 10th of the time and a 10th of the cost. And if that's the case, then you'd have, you'd have perfect houses propping up everywhere, which would increase the supply and then values would go down. What do you think about something like that? How, how will AI just affect real estate in general?

• 1:12:50Speaker 01

  So first I'll say that I do believe AI is going to be hugely deflationary. It's going to be deflationary in areas other than housing sooner. I don't see the world the same way because again, it's not only the construction of a home, but it's also the land.

• 1:13:08Speaker 01

  A lot of the great pieces of land are already done. They're already taken. Right? So I think what happens is the land like in the hills around here with views, that gets more valuable because now you're just building little shacks next to each other.

• 1:13:24Speaker 01

  So I think you're going to see K-shaped housing. You're going to see the before and the after.

• 1:13:28Graham Stephan?

  What return do you get on your portfolio?

• 1:13:31Speaker 01

  Well, that's, I mean, dude, you're talking to a 25-year vet. Do you want return on equity? Do you want a return on capital invest?

• 1:13:36Graham Stephan?

  Let's do return on assets first.

• 1:13:40Speaker 01

  Return on assets. Uh, so what would that be roughly? 12? 11 and a half, 12%?

• 1:13:47Graham Stephan?

  And then return on equity.

• 1:13:48Speaker 01

  Well, here's the truth, guys. I have no money in any of my deals today. I refied everything out.

• 1:13:53Graham Stephan?

  Where is your money?

• 1:13:55Speaker 01

  So the money that I put in is a down payment across our portfolio has already been refied out. So I have none of my own capital. And I already gave you the numbers, 25 and 9. I have none of my original capital in that, in that number.

• 1:14:08Graham Stephan?

  So it's infinite returns?

• 1:14:10Speaker 01

  It's a very nice number.

• 1:14:11Graham Stephan?

  Do you think today's prices are more about land scarcity or just bad government policy?

• 1:14:19Speaker 01

  Government policy. I think what Nick Shirley and others have done, but he's the most recent, have shown fraud, waste and abuse is everywhere. NGOs are everywhere.

• 1:14:31Speaker 01

  I think, you know, my personal guess is we're, we're losing 30% of our money to waste fraud and abuse.

• 1:14:37Graham Stephan?

  What do you think is a public policy that people think is compassionate but actually backfired?

• 1:14:42Speaker 01

  Rent control. Right? Rent control has never worked. In fact, there was a, I think he was a German economist, once said, "The fastest way to destroy a city other than bombing it is rent control."

• 1:14:55Graham Stephan?

  Why is that?

• 1:14:56Speaker 01

  Because you stop investments. You have no, no movement. You have a family move into a three-bedroom. The kids move out. They don't leave. Then you have people coming up that can't get housing. Look at New York City. New York City is estimated, has the largest rent control by quantity. And like 20% of their units never get repaired because it's not, it's not economical to do it. So it just deteriorates.

• 1:15:19Graham Stephan?

  Yeah, it's one of the policies. That was the reason why I kept

• 1:15:23Graham Stephan?

  one of my properties completely empty because I knew once I rented it out, I wouldn't be able to ever sell it. With a tenant in there.

• 1:15:31Speaker 01

  Yeah, if you're in the wrong part of town.

• 1:15:34Graham Stephan?

  Yeah, there's even a triplex that I have and I've kept it, I've kept one of the units empty for seven months, another unit empty for five months, just because it doesn't make sense to rent it out. And if I didn't have the rent control and I just had the freedom to say, hey, listen, you could live in here for a year, I'll give you a great price because otherwise it would be empty, but after a year I want to sell it.

• 1:15:58Speaker 01

  Yep.

• 1:15:58Graham Stephan?

  So I'll give you a 60 days notice. You can live there for a year. You can't do that, which is so crazy that you lose control over your own property the second they move in. They have more rights than you do.

• 1:16:12Speaker 01

  LA County is probably one of the only counties in the country. If you gave me a house, I would sell it immediately. There's no way. It's communism.

• 1:16:21Jack Selby?

  So what places do you think investors should absolutely avoid? And where should people be looking for ease of being a real estate investor and success?

• 1:16:32Speaker 01

  Again, LA County is the most obvious one you should avoid with the 10-foot pole. I think you should avoid most high-priced cities, and I'll give you a list. San Francisco, Austin, Seattle, New York City. Because if you go to those, most of those markets, you're betting on appreciation. And that's not who I am. And that's not what I want you to be. I want you guys to have cash flow. So again, you're going to be in tertiary markets. You might be in the Midwest. Yeah, that's what I would do.

• 1:16:58Graham Stephan?

  Is there any version of rent control that actually works?

• 1:17:01Speaker 01

  I have not seen one. I've not seen one that works. And I've read lots of studies.

• 1:17:07Graham Stephan?

  Are there any policies that you think would just be a good idea to implement? And it could be both for the landlord or the tenant.

• 1:17:15Speaker 01

  One thing that intrigued me that I read last year, and I don't know where it went, was trying to encourage ownership, almost like rent to own. I think it was Blackstone or somebody was doing that in one of their communities. I think finding a way to get tenants on the property ladder. It's got to be ethical. It can't be, you know, 5X or whatever. But if there's a way we can help people that are paying rent on time ultimately become owners of said property in eight years.

• 1:17:47Speaker 01

  I think that would be wonderful.

• 1:17:49Graham Stephan?

  What do you think of the anti landlord movement?

• 1:17:52Speaker 01

  I think it's an anti wealth movement.

• 1:17:54Graham Stephan?

  You know what's crazy? I saw this post on Twitter and it keeps coming up over and over and over again. There's a landlord that had not gotten paid for like six months. And he pulled up in front of the property and took a photo.

• 1:18:06Speaker 01

  Yes.

• 1:18:07Graham Stephan?

  And the tenant just got a new E-Class Mercedes.

• 1:18:09Speaker 01

  Yep.

• 1:18:10Graham Stephan?

  And the landlord said, I can't believe it. This tenant owes me $20,000, but just bought this new Mercedes. They've not been paying their rent. What's going on? And all the comments were like, good for the tenant.

• 1:18:21Speaker 01

  Yeah, anti wealth.

• 1:18:24Speaker 00

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• 1:19:19Speaker 01

  This is where we are.

• 1:19:20Graham Stephan?

  Why? Why do you think this is occurring to such a degree? Because Adam Carolla made a really good point. He was saying, you know, back when, at least when I was growing up, you'd see a guy driving down the road in a Ferrari. And you would just think, oh, man, if I work really hard one day and I save my money and I do something great, I could get that Ferrari.

• 1:19:40Speaker 01

  Yeah.

• 1:19:40Graham Stephan?

  But now it's like, oh, look at that douchebag in a Ferrari. I can't believe that person. Let's throw a rock at the Ferrari.

• 1:19:47Speaker 01

  I think of all the good things that social media has done, I think there's plenty of bad things. And probably the worst thing is they've created echo chambers where you just continually get fed the same nonsense. Because again, I sold machine learning, I sold AI products for a decade. And they're non-thinking really, they're just giving you what you asked for. So if you're watching that content, you're gonna watch more of that content. And it just becomes this toxic soup of negativity. I think, I think one thing that too many people have lost is hope. If you don't have hope, none of this matters.

• 1:20:25Jack Selby?

  Dave Ramsey, and you know what's so funny is that it's that exact philosophy that is keeping people just broke. Like if you don't think that you can do the right things and then the right things will come back to you, you're not gonna do the things. You're just gonna say, oh yeah, look at this person, they're a landlord, they probably were passed down wealth. It's like, hey guys, the studies show that that's not how most people become wealthy. Is because, oh, it's passed down generation to generation, all of a sudden you just live a nepo life. That's just not the reality of the situation. And if you think that that is, you're gonna think, oh, well, success is just out of my control. It's just the fact that I was born in the family I was born into, I live in the areas I live in, I went to the school that I went to, none of this is possible for me.

• 1:21:08Jack Selby?

  So instead, I'm just gonna leave hate comments and think that rich people are rich because of something they can't control.

• 1:21:14Speaker 01

  Yeah, I can't help you. If you have no hope, like you're not even gonna be in the game.

• 1:21:18Jack Selby?

  Yeah, you think that you're poor and like you think rich people are rich because of something they can't control and you're poor because of something you can't control. It's like, hey, if that's the case, you're gonna stay that way.

• 1:21:29Speaker 01

  Yeah, if you don't have hope, you can't go anywhere. It's you can't play go, you're not gonna be in the game. I actually use this analogy with some of my friends, right? You guys go to, or you guys have been to sporting events, right? There are some people who live in the parking lot, all they wanna do is drink beer and scream at the TV. They're not actually in the stands. And then there's people that are actually on the field. Too many people today are comfortable being in the parking lot, drinking and saying dumb shit. I wanna be in the stands or even on the field. And you know, I think most people are comfortable just saying, hey, it's Friday. Let's get drunk.

• 1:22:05Graham Stephan?

  How important do you think it is though, to really push yourself? Like, it seems like you're at a very comfortable point, but do you think that it might be a benefit to kind of put yourself against the wall a little bit more and force yourself to keep going?

• 1:22:19Speaker 01

  So let's talk about that. So again, I lived that life for 30 years. I had a sales quota. Every 90 days I could be fired. I was obviously raising a family, trying to keep marriage happy, traveling 100,000 miles a year. So I lived that in more ways than not. And I just don't have to do that anymore. Right? But I do reserve the right to start again. But again, dude, if you make 40 and you spend 14 and you're already spending the others on crazy trips,

• 1:22:53Speaker 01

  why?

• 1:22:54Graham Stephan?

  But that's, that's the difference is that you're able to finally draw that line.

• 1:22:59Speaker 01

  Correct.

• 1:23:00Graham Stephan?

  Like, what is the difference in the thing that you're saying and the difference in the way that Graham feels?

• 1:23:05Speaker 01

  So you two are a lot closer. I know Graham casually. My guess is he's going to always change the goalposts. Part of that's because you guys are around billionaires, right? You guys are interviewing Mr. Wonderful and all the... So you're around, you know, people that I can only dream of. So you're seeing these things. I'm not seeing them, right? They're on TV for me.

• 1:23:26Speaker 01

  But yeah, I mean, and again, dude, I was just saying, he's only, you're 30? 31?

• 1:23:30Graham Stephan?

  36.

• 1:23:31Speaker 01

  36, oh damn.

• 1:23:32Graham Stephan?

  Yeah, I know.

• 1:23:33Speaker 01

  So again, I didn't come to this until I was 51. Right? So again, age has something like, when you get to be 50, more than half your life's gone. I was a grinder, just like him, different numbers, but same thing. I'm not going to judge anybody, but I do think, you know, I think he'll just move the number. He'll go from 50 to 100.

• 1:23:51Graham Stephan?

  Well, I was, I was thinking, because I do a lot of research on the value of a dollar today and what it's worth.

• 1:23:58Speaker 01

  Sure.

• 1:23:59Graham Stephan?

  And I did this whole analysis with Grok.

• 1:24:03Speaker 01

  Sure.

• 1:24:03Graham Stephan?

  That said that the ages between 42 to 45, the optimal ages to start shifting from saving to spending, given your life expectancy.

• 1:24:15Speaker 01

  Bill Perkins, yeah.

• 1:24:16Graham Stephan?

  Yeah, given your life expectancy and overall health.

• 1:24:20Speaker 01

  Yeah.

• 1:24:20Graham Stephan?

  And then, starting in the mid 70s, your health significantly declines.

• 1:24:24Speaker 01

  I've seen that, yeah.

• 1:24:25Graham Stephan?

  So, i- i- it's said that, you know, with compound interest, age 42 to 45, that's when you should shift from saving to spending.

• 1:24:32Speaker 01

  I would love to see you, because I- I don't know if this is true, and it may have been taken out of context. I heard you spend 2% of your income.

• 1:24:39Graham Stephan?

  No, he doesn't.

• 1:24:40Speaker 01

  I heard that, on a toke.

• 1:24:41Graham Stephan?

  It's only 0.5%. Okay, well, no, no, 2% is what I base what I could spend.

• 1:24:47Speaker 01

  On your in- we're not-

• 1:24:48Jack Selby?

  No, on his assets.

• 1:24:50Graham Stephan?

  Oh, yeah, I talk, I don't look at income. Income means-

• 1:24:51Jack Selby?

  Okay, income, he doesn't spend any of, and he spends maybe 0.5% of his assets.

• 1:24:55Graham Stephan?

  I don't spend any, no income. So, my philosophy is this, if I make $100,000.

• 1:25:00Speaker 01

  Okay.

• 1:25:00Graham Stephan?

  It's not 100 grand. All that is, 2 grand a year, in perpetuity, forever. Maybe 2,500 if we call, you know, 2.5% of that. So, the way I see it, every 100,000 I make, 2,500 bucks a year. And that's what I mentally live off of.

• 1:25:17Speaker 01

  But he doesn't actually, because it's still too much.

• 1:25:20Jack Selby?

  Like, actually, how much, like, you spend-

• 1:25:22Graham Stephan?

  Well, I just, I don't need to yet.

• 1:25:24Jack Selby?

  You spend maybe 0.5%.

• 1:25:26Graham Stephan?

  I don't, I don't like to spend the money now, because I don't need to spend the money now. But I like the option to be able to.

• 1:25:32Jack Selby?

  You'll never need to spend that money. Like, realistically, it's whether you want to now, or you want to later. It's going to be a matter of-

• 1:25:40Graham Stephan?

  But the issue, but, but according to Grok, it's better for me to wait until 42 to 45, to start drawing down.

• 1:25:48Jack Selby?

  But that's for most people that don't have the nest egg that you have. That's like, telling the average, like, are you really gonna compare your financial situation to the average financial situation?

• 1:25:56Graham Stephan?

  But, but it's, it's invested, and it could drop 50%. And so, I also calculate the 50% drawdown.

• 1:26:03Jack Selby?

  Yeah, but there are studies that show 2.75% has never failed, even if you did it at the beginning of the Great Depression.

• 1:26:09Graham Stephan?

  Mentally, it would be stressful for me, if it drops 50%. Because then I'd base it on, you know, the 50% value.

• 1:26:16Jack Selby?

  The way that I see it, is this- Basically, if you were to encapsulate everything you just said, mentally, if you can't handle it, then that suggests to me you are mentally very fragile. And I think if you're gonna try to solve-

• 1:26:28Graham Stephan?

  No, it was very strong, mentally very strong. Because I had the fortitude not to be influenced by others' opinions.

• 1:26:34Jack Selby?

  Yeah, there you go. I actually disagree with that. I think that makes you mentally weak to not be willing to be challenged with a potentially stronger opinion, right?

• 1:26:43Graham Stephan?

  I could be challenged, doesn't mean I'm gonna, you know, fall to the, to someone else's opinion.

• 1:26:49Jack Selby?

  Well, you're, you can't choose whether or not you're being challenged. You're being challenged right now, whether you like it or not. So, but you can choose how you respond to better logic.

• 1:26:56Graham Stephan?

  No, I'm open, I'm open.

• 1:26:57Speaker 01

  So, as a complete outsider to this fun, entertaining conversation, I've already seen, again, I'm an outsider, so maybe it's wrong, but I've seen Graham already start to loosen up. He's taken more trips than I remember him doing before.

• 1:27:10Graham Stephan?

  Premium economy, too.

• 1:27:12Speaker 01

  Dude, well, he's tiny, so he could fit in coach, so.

• 1:27:15Graham Stephan?

  Seems easy for me.

• 1:27:16Speaker 01

  Tiny.

• 1:27:19Speaker 01

  But I think he's already evolving. Now, some of these numbers are just like, you know, he's kinda like Warren Buffett. Warren Buffett didn't need all that, but it was the game, he's playing the game.

• 1:27:28Jack Selby?

  Don't say that, man. Why would you compare him to Warren Buffett? That's like the worst thing that you could have possibly said. Compare him to Scrooge or whatever. Scrooge, yeah, like not Warren Buffett. Like you have, Mr. Burns, you have so many other comparisons, and you pick Warren Buffett. The reason why he does this is because people, they say stuff like that. You have to say, hey, Graham, you know, like, the reality is, everyone's gonna say, Jack, why are you telling Graham how to live his life? At the end of the day, I'm not doing that, and if you heard our private conversations, they don't necessarily go like that. I'm always very encouraging and saying like, Graham, I really wish that you would spend your money a little bit more on, on things that literally just improve the quality of your life.

• 1:28:11Jack Selby?

  Like, if you wanna go see a hockey game because your dad's in town, like, go to the hockey game. Take your dad to the hockey-

• 1:28:16Graham Stephan?

  So, we had this challenge, and the challenge was to spend a certain amount of money in a month. And so I created this budget where I had to spend it in 30 days. And I'm actually falling short of that. But I was able to take out family when they were in town. We saw a hockey game. We went out to a few really nice dinners. And I gotta say, it was, uh, it was great. And just allocating that to the side of having to spend it gets rid of the, uh, I don't wanna call it like the hesitation of like, oh, I don't really need that. Or we don't have to go there. We could get takeout instead.

• 1:28:54Speaker 01

  Yeah. And it helps. You need to realize that you have done some amazing things and you have lots of rewards that are already raining down on you and more will come. But you also got to enjoy life. And if that's taking your family to a hockey game or spontaneously taking your wife to New York, or you've, you've, you've gotta, you've gotta have more experiences. It can't all be work. And it's not all about savings as well. So I've done some crazy trips. I did a six-star cruise. It was 50 grand or whatever it was. And when you're on a cruise like that, it was less than 100 people. So it's, it's, it's a, it's a high-end thing. You're around people that are worth 50 to 100 million, easy.

• 1:29:38Speaker 01

  But almost all of them admitted that they worked too long. Think about that. You're worth nine figures. You're 80 years old. Your wife died. I remember a conversation with, I think his name was Mike or Mark. He's like, I've told my wife we'd travel, but I just kept, kept, I just kept going for the next number. She gets cancer. She's out in six months. Then he quits and now he's traveling and he cries all the time because he's not with his wife. You just don't know what's coming. You've, this, this, this number here, you should, you know, you should set some of that aside and just help people or go explore. Rain, you know, goodness on other people in your family. It will make you a happier person, I promise you.

• 1:30:22Graham Stephan?

  What are the best things to spend money on?

• 1:30:24Speaker 01

  Experiences, not stuff. It's not that rug that drives you crazy in your house. It's experiences. And I would challenge you, the next time you go to Japan, fly business. There's nothing like lying flat.

• 1:30:38Jack Selby?

  Well, he's flown business before.

• 1:30:40Graham Stephan?

  Yeah, we've done.

• 1:30:40Jack Selby?

  On someone else.

• 1:30:41Speaker 01

  Okay.

• 1:30:41Jack Selby?

  Yeah, I don't know if you've bought your own business flights before.

• 1:30:45Graham Stephan?

  Yeah.

• 1:30:45Jack Selby?

  Oh, really?

• 1:30:46Graham Stephan?

  Zip Air.

• 1:30:46Jack Selby?

  Oh, okay.

• 1:30:47Graham Stephan?

  Well, that counts.

• 1:30:48Speaker 01

  Okay.

• 1:30:49Graham Stephan?

  It counts.

• 1:30:49Jack Selby?

  As long as you can lie flat.

• 1:30:50Graham Stephan?

  Yeah, with a lie flat.

• 1:30:51Jack Selby?

  But like, here out Graham's perspective, he's like, yeah. So, explain how your justification goes into not wanting to fly business in the future.

• 1:31:01Graham Stephan?

  Depends on the flight. I said if, I can't sleep on the airplane.

• 1:31:06Speaker 01

  Neither can I.

• 1:31:06Jack Selby?

  Nope.

• 1:31:07Graham Stephan?

  And when you're flying out in the morning, let's say 9:00 a.m.

• 1:31:10Speaker 01

  Sure.

• 1:31:11Graham Stephan?

  I'm not going to get any sleep on the plane anyway. So, I think it's a waste to have a lie-flat seat. When I'm not going to be able to sleep, I'm just going to sit there and toss and turn. So, I may as well save a few thousand dollars when I'm not going to be able to sleep. Now, on the other hand, I think if it's an overnight, like a red-eye flight, and you could get sleep on the airplane and wake up the next morning, then I think, okay, I could look at the value of the next day and just say, okay, then that's a good expense.

• 1:31:41Speaker 01

  I would challenge you to change that. I would say any flight less than three hours, economy plus whatever you want to be is fine. But anything over three hours, it's just a better seat, even if you're not lying flat. It's just you're not crammed, you're not getting bumped into, you're not getting...

• 1:31:56Graham Stephan?

  Economy, premium economy is nice. Like, those seats recline like almost all the time.

• 1:32:02Speaker 01

  I've traveled on every airplane.

• 1:32:03Graham Stephan?

  International premium economy, I thought is... I thought international premium economy is...

• 1:32:09Speaker 01

  If you don't fly business class on every six-hour flight, you're doing life wrong.

• 1:32:14Jack Selby?

  Where are you flying? How long is a flight and what are you flying?

• 1:32:17Graham Stephan?

  Uh, it's 13 hours, but it's broken up between two flights, five hours, and then seven.

• 1:32:24Speaker 01

  With anybody or just...

• 1:32:25Graham Stephan?

  Denmark. Me and Macy. Let's go to Denmark.

• 1:32:28Speaker 01

  If you ever fly anything less than business with your wife, I'm going to slap you.

• 1:32:33Jack Selby?

  You might need to slap him.

• 1:32:36Graham Stephan?

  Well, we already bought the flight, but maybe come back.

• 1:32:38Speaker 01

  Maybe, I'm just saying, going forward.

• 1:32:41Graham Stephan?

  Oh yeah, this one, this one doesn't count.

• 1:32:43Speaker 01

  Yeah, this one doesn't count. But again, you have, you have the ability to sprinkle little pieces of goodness on the people that you care about the most. That's what you should be thinking about. You should be surprising Macy with business class. Right? Don't even tell her, because she's probably thinking you're going to be in economy.

• 1:33:00Graham Stephan?

  But then, here's the thing, and then all of a sudden, now that becomes the new, like, the minimal.

• 1:33:05Speaker 01

  So what? So what?

• 1:33:07Graham Stephan?

  Sometimes, it's just a, it just feels like, ah, it's, it's, it's not a, it just feels like you're wasting money. And then it just feels as though that's an irresponsible amount of money to spend.

• 1:33:19Speaker 01

  How many flights do you take a year, personal, not business, not all that?

• 1:33:22Graham Stephan?

  Not that many. Maybe three.

• 1:33:26Speaker 01

  If you are taking three, any flight over six hours, in those three, that's not business class? You're not being a good husband.

• 1:33:38Graham Stephan?

  Why do you say that?

• 1:33:39Speaker 01

  I'm trying to find an angle that will open them up to doing that.

• 1:33:44Jack Selby?

  I don't think that's the angle.

• 1:33:45Speaker 01

  That's not the, I took a shot.

• 1:33:46Jack Selby?

  The point being, I want to see it as your friend, I think the quality of your life will be improved.

• 1:33:52Speaker 01

  I agree.

• 1:33:52Jack Selby?

  Genuinely, and I've said this for years, and every single person that we bring on this podcast, whether they're an AI expert, whether they're an entrepreneur, whether it's Kevin O'Leary, whether it's Michael Zuber, whether it's Pace Morby, whether it's Alex Hormozi, whether it's literally any single person here, Dave Ramsey, we all say the exact same thing. So tell me, what is it within your logical, driven brain? Tell me what it is that makes you think that you could be right, and every single other person that's ever been on this podcast, not a single person has said, "Your level of frugality is productive."

• 1:34:24Graham Stephan?

  Because I'm happy.

• 1:34:26Speaker 01

  Is your wife, is your wife happy?

• 1:34:28Graham Stephan?

  Yeah.

• 1:34:29Speaker 01

  Okay.

• 1:34:30Jack Selby?

  If that's the case, then I can't, I have nothing to say against that. If that is the case, then I fully.

• 1:34:35Speaker 01

  Yeah, but again, as somebody who's two decades older than you, almost two decades older than you, I will tell you, um, life gets short. And the things that you're gonna miss is not the stuff, it's the experiences. And if you're taking three business class flights a year with your wife, and again, you guys are gonna eventually have kids. And then that's gonna, you know, dent the travel. Just make it more meaningful and more enjoyable. A six hour flight in business class is better than economy plus. You can't argue that. It's better. Yes, it's more expensive, but that, that's, that doesn't matter to you.

• 1:35:09Graham Stephan?

  It does.

• 1:35:10Speaker 01

  No, it doesn't.

• 1:35:10Graham Stephan?

  It does, it does.

• 1:35:12Speaker 01

  No, it doesn't matter to you. It doesn't matter to me, $8,000. So it certainly doesn't matter to you.

• 1:35:18Jack Selby?

  If Graham is happy, then I have nothing to say.

• 1:35:22Speaker 01

  No, agreed.

• 1:35:22Jack Selby?

  If, if that is truly the case, I just question whether or not that is the case. But if you say it, and in your heart of hearts, that is the case. I, as your friend will, I will believe you. I'm just looking out for you and as your friend.

• 1:35:34Graham Stephan?

  I would be happier with eight grand and flying premium economy. Like, that would make me happier.

• 1:35:41Graham Stephan?

  Like, I just don't get that much more enjoyment.

• 1:35:43Speaker 01

  Okay.

• 1:35:43Graham Stephan?

  From the bigger seat.

• 1:35:45Speaker 01

  Fair enough. If you're happy, Graham, that's all we want for you.

• 1:35:48Jack Selby?

  That's the most important thing.

• 1:35:50Speaker 01

  Yes.

• 1:35:50Jack Selby?

  Now that we have excoriated you, what can we be improving on?

• 1:35:55Graham Stephan?

  Both of you?

• 1:35:56Jack Selby?

  Yeah.

• 1:35:57Graham Stephan?

  I don't think you could improve on it. Your speaking skills are great. I mean, maybe improve some title thumbnails in your channel. Like, instead of going live, uh, just post videos without the live aspect as it cuts down on viewership. Um, gosh, Jack.

• 1:36:14Jack Selby?

  Where to start?

• 1:36:15Graham Stephan?

  Oh, man, there's just.

• 1:36:16Speaker 01

  So much. How old are you again?

• 1:36:17Jack Selby?

  Twenty seven.

• 1:36:18Speaker 01

  Wow, my daughter's thirty five. Wow. Thirty four. Okay, alright.

• 1:36:23Graham Stephan?

  For a while, I would say Jack would jump from thing to thing to thing to thing to thing. It's a little scattered, like the real estate investing thing, or like the options thing, and it's all these different things when like just the time would be better spent on the podcast.

• 1:36:36Speaker 01

  Yeah, yeah, you guys, yeah, I would, I mean, I don't know what you were doing, but you guys have your, that was my answer for real estate, is if it's gonna take my share away from this. You guys are the first inning of a ten inning game.

• 1:36:47Jack Selby?

  Mm hmm.

• 1:36:48Graham Stephan?

  Yeah.

• 1:36:48Speaker 01

  Go, go nuts.

• 1:36:49Graham Stephan?

  I guess sometime my only, my only thought is that I wish we would go heavier on the podcast, like I'm always like.

• 1:36:56Speaker 01

  What do you mean? What's, what is the word heavier?

• 1:36:58Graham Stephan?

  Like, drop everything, like the podcast is always like the number one. And for Jack, I don't think he's happy with, with that being like the number, like above all else.

• 1:37:07Speaker 01

  How many do you do a week?

• 1:37:09Jack Selby?

  We do five a month.

• 1:37:09Graham Stephan?

  Five a month.

• 1:37:10Speaker 01

  You, so this counts as one?

• 1:37:12Jack Selby?

  Yeah.

• 1:37:12Speaker 01

  You do five a month, okay.

• 1:37:14Graham Stephan?

  Yeah.

• 1:37:15Speaker 01

  Okay.

• 1:37:15Graham Stephan?

  But I would like to see, let's, let's keep growing, expanding, let's, uh, let's, let's travel anywhere at the drop of a hat if we need to. I think Jack is a little more balanced. Now, maybe that's a healthier approach.

• 1:37:26Jack Selby?

  I actually don't disagree with everything that he's saying, like I would say that my actions actually do go in accordance with drop everything in order to travel somewhere. We've had one experience over the past, however, and I was just really sick, which is the reason I was like, okay, well, like, I, podcasting is like, yes, it's a means to an end, but it's also an enjoyable journey and I wanna make sure I'm enjoying the journey.

• 1:37:50Speaker 01

  Where is this thing in a year? You guys have any idea?

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• 1:38:49Speaker 01

  Where do you want it to be?

• 1:38:50Graham Stephan?

  My gosh, I would really like, I was a little worried about the five episodes a month and keeping the cadence on that without sacrificing quality. So far, we've done a good job at that. Love to continue that, but I think there's so much more. Like in terms of Iced Coffee Hour membership content, I really feel like that's a huge expansion for us.

• 1:39:06Speaker 01

  Do you have that today?

• 1:39:07Graham Stephan?

  We do. So we set up a membership where they get early access to every episode, but a week early. It's the full uncut, because sometimes for the main episodes, we'll rearrange segments or we'll cut out something that we feel like is hurting retention.

• 1:39:21Speaker 01

  And how many folks are a part of that now?

• 1:39:23Graham Stephan?

  We have 1,400 people.

• 1:39:25Speaker 01

  Nice, okay.

• 1:39:26Graham Stephan?

  But I think that we could expand that. I want to do.

• 1:39:29Speaker 01

  Do you have tiers?

• 1:39:30Graham Stephan?

  Yeah, so we have two tiers, but I want to be able to also like, we could do maybe a Q and A with you.

• 1:39:37Speaker 01

  Yeah.

• 1:39:37Graham Stephan?

  Or a dedicated members episode, separate from this. Just like a Q and A or like a Jack and I episode a week. Like, I feel like there's so much more that we could expand on.

• 1:39:46Speaker 01

  I would definitely suggest, I mean, maybe you do it at your highest tier, whatever, but yeah, like doing one of these and then doing a Q and A.

• 1:39:51Graham Stephan?

  Yeah.

• 1:39:52Speaker 01

  If you want to try that with me, I'm game. Post this.

• 1:39:54Graham Stephan?

  What I would really like to do is a live Q and A.

• 1:39:59Speaker 01

  Yeah, of course.

• 1:39:59Graham Stephan?

  So like, let's just say this episode posts on a Sunday. And we could say, hey, guys, Wednesday, for channel members, we're going live.

• 1:40:06Speaker 01

  Yep.

• 1:40:06Graham Stephan?

  You watch this episode, any questions you have, this is it.

• 1:40:10Speaker 01

  If you want to test it, I'm in.

• 1:40:11Graham Stephan?

  Yeah.

• 1:40:12Speaker 01

  Just give me a week of this.

• 1:40:14Jack Selby?

  The problem is like, those ideas hinge upon a ton of other things.

• 1:40:19Speaker 01

  I didn't know that.

• 1:40:20Jack Selby?

  That like, that would complicate things, whereas I would rather focus on just like overall exposure and growth. So like, what that would look like is like better distribution of the podcast.

• 1:40:29Speaker 01

  Clips.

• 1:40:30Jack Selby?

  More clips, more, yeah, it's just stuff like that.

• 1:40:32Speaker 01

  How many posts are you guys doing a day?

• 1:40:34Jack Selby?

  So many.

• 1:40:35Graham Stephan?

  Quite a lot.

• 1:40:35Jack Selby?

  It's, I don't even know.

• 1:40:36Speaker 01

  Dozens?

• 1:40:37Graham Stephan?

  Dozens.

• 1:40:37Speaker 01

  Dozens?

• 1:40:37Jack Selby?

  Yeah. I mean, Twitter alone could be a dozen.

• 1:40:40Speaker 01

  Okay.

• 1:40:40Graham Stephan?

  Yeah.

• 1:40:41Speaker 01

  All right.

• 1:40:41Graham Stephan?

  It's a lot. So.

• 1:40:43Speaker 01

  Okay.

• 1:40:43Graham Stephan?

  Stuff like this, and then it's a conversation of, you know, what ends up happening is that we end up focusing really just on the core product, which is the podcast. But then I look back six months ago, I'm like, oh, if we had started this thing six months ago, we would have done this and this and this. So it's something that I think over the next two months, we're gonna start to see, as soon as we could get ahead.

• 1:41:03Speaker 01

  Yeah.

• 1:41:03Graham Stephan?

  As soon as we have three episodes already done, edited, uploaded with intro, like, everything, then I think we have the breathing room to start saying, okay, here's how we could grow. So that's our next goal.

• 1:41:15Speaker 01

  I like the fact that both of you are, from where I'm sitting, have different ideas, but you guys are still moving forward together. That's cool. That's fun for me to watch.

• 1:41:22Jack Selby?

  Yeah, fortunately, it's been one of, I mean, well, it's the only partnership I've ever had, and it's the easiest partnership I've ever had. Who knows? Maybe I'll get another one, it'd be the most difficult one I've ever had.

• 1:41:30Speaker 01

  God. I bet it'll be worse.

• 1:41:31Jack Selby?

  We've, we've been really lucky, because I think at the end of the day, what makes it easy is that both Graham and I, surprisingly, are pretty easy individuals. It's, it's kind of weird. It's, at this point, we've known each other for so long. Yesterday was a six-year anniversary of the Ice Coffee Hour. And we had been working together for quite some time before that as well. So obviously, we're very familiar with each other. I've lived with the guy, unfortunately. I've, I've had the.

• 1:41:53Graham Stephan?

  He would flush the toilet.

• 1:41:54Jack Selby?

  Displeasure. Yeah, I would flush after I peed, and he would get upset and ask me if I could pay for each flush. And that is not a joke.

• 1:42:01Graham Stephan?

  I asked.

• 1:42:01Jack Selby?

  I kid you not.

• 1:42:02Graham Stephan?

  I asked for a penny flush.

• 1:42:04Jack Selby?

  He'll say it's a joke. He's not joking. He looked up the cost per flush in Santa Monica when we were living there.

• 1:42:10Speaker 01

  I left a hundred bucks on the table and said, go for it.

• 1:42:11Jack Selby?

  It's, it's insane. But fortunately, above all else, it's become more of like a sibling-like relationship, which I think is what's displayed on camera. People say, oh, Jack and Grant, they're just constantly bickering and bantering. Yeah, and we do it off-camera. Maybe even worse. But we also travel together, and we hang out, and we do all of these things like brothers would, so.

• 1:42:32Speaker 01

  Yeah, I don't think anybody thinks you guys hang out.

• 1:42:33Jack Selby?

  Oh, you'd be, yeah.

• 1:42:35Speaker 01

  Really?

• 1:42:35Jack Selby?

  Oh, yeah, yeah, yeah, yeah, yeah.

• 1:42:36Graham Stephan?

  Wow. Also, we started this new business idea. So it's in the works right now. It's called extradollar.com.

• 1:42:45Graham Stephan?

  And it's to optimize credit card rewards.

• 1:42:48Speaker 01

  Ah.

• 1:42:48Graham Stephan?

  To give you reminders of things that expire. Like for instance, the Amex Platinum Dell Credit, Uber Credits, DoorDash Credits, Travel Credits. Like all these things that people forget about. It's gonna be a good way to send out reminders. And then as a premium version, you're able to link your cards and track different awards.

• 1:43:09Speaker 01

  That's.

• 1:43:10Graham Stephan?

  So that's the goal. We're working on it. And it's it's open right now for people that wanna sign up and just will will keep you posted when it launches. And then those people that sign up will be the first ones to be able to try it out.

• 1:43:21Speaker 01

  Sure.

• 1:43:22Graham Stephan?

  Make sure it's working properly and then we'll roll that out over a bigger audience.

• 1:43:27Speaker 01

  That's fun.

• 1:43:27Graham Stephan?

  So. Cause we realize, I think, you know, we wanna do something outside of the Ice Coffee Hour. Because it's so difficult with with this business is that if we travel for three weeks, everything's basically grinds to a standstill.

• 1:43:40Speaker 01

  Yeah.

• 1:43:40Graham Stephan?

  And so it's either we have to like run to get ahead and then we could just like coast.

• 1:43:45Speaker 01

  And then you have to run to catch up, yeah.

• 1:43:47Graham Stephan?

  Like with Chris Camillo, we have to film with him and then post within a few days. Otherwise, like what he says might be outdated.

• 1:43:52Speaker 01

  Yeah.

• 1:43:53Graham Stephan?

  And so it's it worries me even then. It's like filming three weeks in advance, like so much could change in three weeks. That even what we said today might be like, oh, maybe that's not as up to date. So we gotta do something outside of the podcast for longevity.

• 1:44:11Speaker 01

  Well, I have no doubt that you two guys will figure something out. You've proven time and time again to to continually think, iterate. And you're not afraid afraid to flush bad ideas, right? You give them a shot somewhere bad.

• 1:44:23Graham Stephan?

  Afraid to flush a little bit.

• 1:44:24Speaker 01

  Yeah, apparently a penny. Yeah, penny. I'll I'll give you 20 bucks on the way out, so it's got him covered. But yeah, it's, you know, I think you guys are on to something. Keep keep innovating, keep getting creative, keep just, you know, getting around the right people. Part of it, part of getting. In life is being in proximity. You guys have the ability to be around some amazing people. So hopefully that rubs off and gives you even bigger, bigger possibilities.

• 1:44:48Jack Selby?

  Yeah. Michael, thank you so much for coming on the podcast. Guys, thank you so much for watching. If you want any more information, you want to learn more about real estate, I highly recommend you tune into the lives. All of that information will be linked down below in the description, where you can also find Extra Dollar, where you can also find the Index, Graham's group, where you can also find probably other things as well. Everything is down below in the description. Yeah. Subscribe, like. Thank you so much for watching. Thank you. Thank you for coming on the podcast. Thank you. Until next time. See ya.

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