Buying Real Estate Was My Worst Financial Mistake

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• 0:00Speaker 00

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• 1:48Speaker 04

  Put in chat, but Ish, we gotta have a conversation. Me and you gotta have a conversation. And Ian, I want your, I want your take on this too. The, the time has come. Because let's have this, let's have, talk about having uncomfortable conversations. Stocks is a better wealth building generational tool than real estate, and it is by a long shot. Real estate has, has drained a lot of people financially. And real estate so far has been my biggest mistake as far as this dumb ass home that I'm building.

• 2:17Speaker 05

  You gonna quit saying that too? I'm not, no, no, no, no, no, no, no. I should have made a call in July after, I'm, no.

• 2:24Speaker 04

  No, listen.

• 2:25Speaker 05

  Rashad, Troy, Troy.

• 2:28Speaker 04

  I'm podding, I'm podding.

• 2:30Speaker 05

  No, no, no. Not when they get to clipping.

• 2:34Speaker 06

  Yeah, let me, let me ask you.

• 2:35Speaker 05

  Hell you're not.

• 2:36Speaker 06

  Let me ask you two things. I'm gonna ask you two things.

• 2:41Speaker 06

  When we say stocks is a better financial vehicle than real estate? Are we talking about for the common man?

• 2:49Speaker 05

  Yes, yes. And I don't wanna have this conversation. I've avoided this conversation with you for three years. Yes, in terms of return on cost basis, short term, long term.

• 3:00Speaker 04

  It's not true. How?

• 3:02Speaker 06

  I'm, I'm about to tell you why.

• 3:03Speaker 05

  How?

• 3:04Speaker 06

  I'm about to tell you why.

• 3:05Speaker 05

  I'm podding.

• 3:06Speaker 06

  When you start talking about the common man doing it on their own.

• 3:10Speaker 05

  They don't gotta do it on their own. They got me. If I made you money, please put yes in chat. I don't even wanna do this.

• 3:15Speaker 06

  And that right there is not the common man. And that's my point.

• 3:18Speaker 05

  How?

• 3:18Speaker 06

  I'm talking about somebody, look, somebody doing this on their own. Not somebody that has a financial advisor or somebody that's telling them, that reads charts like it's fucking ABCs, directing them where to put their money.

• 3:30Speaker 05

  Index funds.

• 3:31Speaker 06

  That's not the common man.

• 3:32Speaker 05

  The average person can invest in an index fund or ETF.

• 3:36Speaker 04

  10, 10 years ago, 15 years ago, I would say you're a hundred percent right.

• 3:39Speaker 06

  Oh, and I was about to say that too. No, you, you took, you took the words out of my mouth. Lately, lately, these markets have been some.

• 3:48Speaker 05

  Some of the highest.

• 3:49Speaker 06

  Yes.

• 3:50Speaker 05

  Alpha generating markets of all time.

• 3:52Speaker 06

  So, so now that conversation has shifted. But historically, you can't tell me that the stock market was giving you nine zillion percent returns on your money.

• 4:03Speaker 04

  Historically, historically.

• 4:05Speaker 05

  Even at 15%.

• 4:06Speaker 04

  Historically, the stock market has outperformed real estate.

• 4:09Speaker 06

  If, if a real estate investor made 15% on their money, they jump off a bridge. Let's be clear.

• 4:13Speaker 05

  Then you should come over the indexes.

• 4:15Speaker 06

  Let's be clear. If a real estate investor made 15% on their investment, they would jump off a bridge.

• 4:20Speaker 04

  So how much, how much, how much is a real estate investor making on their investment?

• 4:24Speaker 06

  It depends on your region. Number one, it's regional.

• 4:26Speaker 04

  Okay.

• 4:26Speaker 06

  So I don't wanna, I don't wanna, New Jersey?

• 4:29Speaker 04

  Yeah, New Jersey. New Jersey.

• 4:31Speaker 06

  Couple hundred percent.

• 4:33Speaker 04

  A couple hundred percent.

• 4:34Speaker 05

  Over what timeframe?

• 4:35Speaker 04

  What's the timeframe?

• 4:36Speaker 06

  A year? Give me a flip.

• 4:39Speaker 04

  Okay.

• 4:39Speaker 05

  Okay. What about Midwest? Let's take Cleveland, Chicago.

• 4:43Speaker 06

  Their numbers, we gonna say Cleveland. I'm, I'm a little familiar with Cleveland. I can't say Chicago. I can't say these other areas. Today, 2026, you could go buy a two-family house in Cleveland for 15 grand. That's your buy-in.

• 4:55Speaker 04

  Okay.

• 4:57Speaker 06

  You could sell said house for $90,000 unless they.

• 5:00Speaker 04

  All the, all the. Now, let's, let's, let's, let's.

• 5:03Speaker 06

  And you could put 15 in it.

• 5:05Speaker 04

  Let's break this down. Cuz you said something, you said something like there's a barrier of entry that's difficult for people to get into the stocks. I would argue that it's way more difficult to get into real estate. Let me finish. All you gotta do is, you don't even gotta watch Market Mondays. You just gotta have a half a brain. And you can easily open up a Robinhood account or E-Trade or any brokerage account. And you can invest in QQQ, which gives you all the technology companies. You can invest in the S and P 500 and you can put $500, $1,000 and whatever you could put in.

• 5:40Speaker 04

  Easy, easy.

• 5:41Speaker 06

  You could. I'm not disagreeing with you.

• 5:42Speaker 04

  Buying a home is like, man.

• 5:45Speaker 05

  Even wholesale.

• 5:47Speaker 06

  Your home.

• 5:48Speaker 05

  No, that's your home. I'm gonna be real, even, okay, let's say you wanted to wholesale. No, no, for real. If you wanted to wholesale or even buy a rental.

• 5:57Speaker 05

  Or even if you want the auction route. So don't, my dad's been in real estate my whole life. A lot of my investment principles come from that.

• 6:03Speaker 06

  Just waiting to listen to you, my brother. All good.

• 6:05Speaker 05

  I can't easily access any property anywhere in the United States of America for 500 or $1,000 a month. It's impossible. Even if you wholesale.

• 6:15Speaker 06

  You're wrong. As a wholesaler, you don't have to pull a dime out of your pocket as a wholesaler.

• 6:19Speaker 05

  You don't have immediate entry or immediate liquidity into that. You still, you're gonna have to wait. The people, the people who, who make wholesale and silk.

• 6:29Speaker 06

  You're wrong.

• 6:30Speaker 05

  No, no, I'm not.

• 6:31Speaker 06

  No, look, we're homes.

• 6:32Speaker 05

  You know how many wholesalers I've had switch to stocks as they couldn't get no fucking deals done? At least 100.

• 6:39Speaker 06

  Yeah, they not hustling. Wholesaling is a different type of monster.

• 6:42Speaker 05

  Yeah.

• 6:43Speaker 06

  Look, look, wholesaling is a system where you don't have to pull $1 out of your pocket to make money.

• 6:48Speaker 05

  How do you get the deal flow?

• 6:51Speaker 06

  Your mouth.

• 6:52Speaker 04

  You gotta cold call, you gotta knock on doors.

• 6:54Speaker 06

  Not necessarily, yo, you had to have a network.

• 6:56Speaker 05

  You gotta email, but what if you don't have a network?

• 6:58Speaker 06

  What I'm telling you is you don't have to have a dollar. We start talking about money for point of entry. In wholesaling, you don't have to pull a dollar out of your pocket.

• 7:09Speaker 05

  Okay.

• 7:09Speaker 06

  And you can make money in wholesaling. So let's just say you whole, you wholesale seven houses in one year. Right? Let's say you made 30 a pop.

• 7:17Speaker 05

  That, that's a stretch to do seven in a year.

• 7:20Speaker 06

  It depends on what your region is. That's not true.

• 7:22Speaker 05

  Okay, but I wanna put, I'm podding.

• 7:24Speaker 06

  Say five.

• 7:25Speaker 05

  Well, for the average person to push back, if they want to buy Robinhood stock today, Cisco, I'm gonna just go to the ones I'm not. Palantir today, um, Nike today.

• 7:35Speaker 06

  How much is Palantir's share?

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• 10:27Speaker 01

  They don't realize smart people use smartphones, huh? Seeing through BS they thought was gonna slide. Download TextNow cuz it cuts out clownery. You can literally activate it from your couch. Nationwide 5G with the same towers the other companies use. Pay what you want or not at all. You're in control. Show these ridiculous carriers we ain't paying for stupid. Because we're way too smart to pay dumb.

• 10:51Speaker 02

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• 10:57Speaker 03

  Earners, what's up? Look, building wealth isn't just about making money. It's about knowing where your money is working for you. That's why we partner with Empower. Empower is all about helping you invest well so you can go out and live a little. Their free Empower Personal Dashboard gives you a complete view of your financial life in one place. Track your net worth, monitor your budget, analyze your investments, set retirement goals, and more. You've worked hard for your money. Now make sure it's working hard for you. Download the Empower Personal Dashboard or visit empower.com. Not an Empower client paid or sponsored.

• 11:36Speaker 05

  Let me pull it up. And I'm not pro Palantir for those of you who are gonna click this up.

• 11:40Speaker 06

  Listen to this. While you look it up, let me, let me speak, right?

• 11:43Speaker 05

  187.

• 11:45Speaker 06

  For one share Palantir. So a wholesaler can find a deal, put the deal on the contract.

• 11:51Speaker 05

  They're gonna be on the phone for 22 hours.

• 11:53Speaker 06

  It don't matter. It doesn't matter. Yo, you gotta put in some type. You gotta have money equity or you gotta have sweat equity. So stay on the phone for 20 hours. Let's say they spend 100 hours, right? The duration of the deal. I spent 100 hours on the phone, piling emails, texts, faxes, whatever the case may be. And at the end of that 100 hours, I made $30,000. Tell me what job you can go work at for two weeks and put 100 hours in and make 30 grand. I'll wait.

• 12:22Speaker 04

  How many wholesalers are making $30,000 a week?

• 12:25Speaker 05

  Not a lot.

• 12:26Speaker 06

  An hour region? Oh, not a week. No, I'm just saying 100 hours. We talking about hours. So what I'm saying, if you do four wholesale deals a year.

• 12:35Speaker 04

  How many wholesale? How many wholesalers do you know that are successful?

• 12:38Speaker 06

  A bunch.

• 12:39Speaker 04

  How many wholesalers do you know that are millionaires?

• 12:41Speaker 06

  A bunch.

• 12:42Speaker 04

  You don't know a bunch.

• 12:44Speaker 05

  How many?

• 12:44Speaker 04

  You don't know a bunch. You don't know a bunch of wholesale? You don't even know, this is not even a bunch of wholesalers.

• 12:49Speaker 06

  You're wrong, Rashad.

• 12:52Speaker 05

  Okay, how many do you know?

• 12:53Speaker 04

  Where are they? Where are they? Where are they?

• 12:55Speaker 06

  Yo, dog, I live in northern New Jersey. These niggas, wholesalers kinda fucked up our market cuz they were so greedy, to be honest with you. Wholesalers were taking houses. Wholesalers were taking deals that they were finding for 250 and putting 80 on them. Putting 100 on them. They used to only put 20 and make money from volume. This real estate resurgence that we've had in the last five years, wholesalers are so fucking greedy that they're putting 60 and 70 and $80,000 on top of these houses. These wholesalers are making money out here.

• 13:24Speaker 05

  But some of them were told to do that cuz it's a premium market.

• 13:28Speaker 06

  I'm not disagreeing. I'm just answering the first question of how many of them are making money? A lot of them are making money.

• 13:34Speaker 05

  Can we give a range of numbers? Like, I can say this year I made, I made 85 millionaires this year. Gonna clap it up?

• 13:43Speaker 05

  For me. For me. Yes in chat. It's a bunch of motherfuckers who talking, but when I ask who made the millionaire question, should be Silencio, my boy.

• 13:52Speaker 06

  Cool. So let me say, if, if somebody had a wholesale platform where all they did was teach wholesaling, they could make, maybe not 85 millionaires in one year cuz again, it's regional.

• 14:03Speaker 05

  They've been out there.

• 14:04Speaker 06

  House, and they are making, it's a bunch of, it's more wholesale tutors than you.

• 14:11Speaker 04

  So, so, all right, let's, let's, let's go to this buy and hold conversation, right? Buy and hold starts first, buy and hold real estate, right? Let's say you buy a house, right?

• 14:22Speaker 04

  The taxes keep going up every single year. That doesn't stop.

• 14:26Speaker 06

  Most times.

• 14:28Speaker 04

  90%.

• 14:29Speaker 06

  90%. I'm with you. I'm not trying to be antagonistic. I'm with you.

• 14:32Speaker 04

  Taxes keep going up. There's always, there's always upkeep for the house, right? Something is going to happen, 100%, right? Then you, you have ongoing things that you're not even counting on. Like even the cable or electric or, what I'm saying is when you own stocks, you just own the stock. There's no other fee. If I buy $100,000 worth of Apple, I have $100,000 worth of Apple. As it goes up, that 100,000 is just compounding. There's no annual tax fee that I have to pay. There's no annual maintenance fee. There's no annual electric fee that I have to pay. The compound interest is just really compounding.

• 15:17Speaker 04

  Where the compound interest on, on real estate has to actually be deducted by the cost that it cost to actually even maintain the real estate. And depending on that, it could actually be a wash.

• 15:30Speaker 06

  You ready?

• 15:32Speaker 06

  If you bought $100,000 worth of Nike, what would you be saying right now?

• 15:36Speaker 04

  Of course, stocks can go down.

• 15:38Speaker 06

  I would like, I would love for you to answer my question.

• 15:40Speaker 05

  I'm the one who bought the Nike thing over there.

• 15:42Speaker 06

  No, no, no. I'm asking, I'm asking Mr. Rashad a question. If you bought $100,000 worth of Nike, where's your compound theory at now, nigga?

• 15:54Speaker 04

  Real estate can't go, can, can you not lose your house? Can you not foreclose on your house?

• 15:58Speaker 06

  Not on a buy and hold.

• 16:01Speaker 04

  Well.

• 16:01Speaker 06

  So, so in our region.

• 16:03Speaker 05

  People run out of money.

• 16:04Speaker 06

  I'm gonna fix it. I'm gonna fix it. In my region, multifamilies are buy and hold. So even in the crash of 2007, which I endured, I'm not speaking from theory, I'm speaking from experience. I was a real estate investor in '03 up until now. When the house prices fell, rents did not fall. So if you bought a house for $400,000 in 2005 and your rent roll covered your mortgage in 2005, when the markets fell, yeah, your house might not have been worth 400 grand or more. It might have been worth 200, but guess what happened? Those rents didn't fall. And so you still were able to maintain that said property.

• 16:43Speaker 04

  That's not true because.

• 16:45Speaker 06

  Rashad, I lived it.

• 16:45Speaker 04

  Listen, listen, you, you said Nike. So what you're doing is taking the stocks.

• 16:51Speaker 06

  Worst case scenario.

• 16:52Speaker 04

  You're saying that every stock is not the same. Every real estate market is not the same. There's a bunch of people that are upside down on their mortgages in Florida and other places where they brought at the top. Real estate doesn't always appreciate either.

• 17:05Speaker 06

  You said.

• 17:06Speaker 04

  They brought it to the top.

• 17:07Speaker 06

  And hold is what the example was that you gave. I'm not talking about personal homeowners. We're talking about investors. So as a homeowner, you could have bought your home for 400 grand and your shit could be worth 280 right now. That's not the scenario you gave. The scenario you gave was as an investor, you're buying and holding, which means your rent covers your expenses in a buy and hold scenario.

• 17:27Speaker 04

  Okay, well, there's other facts that go, do rents typically go down over the course of time? Probably not. But do problems happen all the time? Do, do people stop paying their rent? And if you live in New York and New Jersey, you can't evict somebody for a year and a half, up to two years? That happens all the time. Do apartments stay vacant for five months at the time and you, and you gotta come out of your pocket as a landlord? Don't just play the landlord is all good game.

• 17:55Speaker 06

  I didn't say that at all.

• 17:57Speaker 04

  There's other ways to lose money in a landlord situation just because your rent prices don't go down drastically. People could stop paying the rent.

• 18:05Speaker 03

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• 18:41Speaker 03

  Earners, what's up? Look, building wealth isn't just about making money. It's about knowing where your money is working for you. That's why we partner with Empower. Empower is all about helping you invest well so you can go out and live a little. Their free Empower Personal Dashboard gives you a complete view of your financial life in one place. Track your net worth, monitor your budget, analyze your investments, set retirement goals, and more. You've worked hard for your money. Now make sure it's working hard for you. Download the Empower Personal Dashboard or visit empower.com. Not an Empower client paid or sponsored.

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  This is an iHeart Podcast. Guaranteed human.