Ricky Carruth, a seasoned real estate luminary and savvy investor, boasts an illustrious 21-year career marked by unparalleled success, with a remarkable sales portfolio exceeding $500 million. In 2017, he authored two influential books and made history as the world’s inaugural completely free real estate coach. Harnessing the power of social media, Ricky cultivated a colossal personal brand, enabling him to traverse the globe with his family, imparting invaluable wisdom to diverse audiences. A true entrepreneur at heart, he not only shares his wealth of expertise but also strategically builds thriving businesses along the way, solidifying his status as a trailblazer in the real estate industry.
Here’s some of the topics we covered:
- The Different Markets Ricky Operates In
- Flipping Houses & Old School Work Ethic
- The Different Sectors Of A Market
- The Coming Market Crash & What You Should Do
- The Initial Fear of Switching From Single To Multifamily
- The 2005 Crash and How Ricky Lost His Assets
- The Opportunity & Great Deals Coming after The Crash
- What To Do If You’ve Never Experienced A Market Crash
To find out more about partnering or investing in a multifamily deal: Text Partner to 72345 or email Partner@RodKhleif.com
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Full Transcript Below
00:00:00:01 – 00:00:21:09
Rod
Welcome to another edition of Life Time Cash Flow Through Real Estate Investing. I’m Radcliffe and I’m thrilled you’re here. And I know you’re going to get tremendous value from the gentleman I’m interviewing today is my friend Ricky Carruth. And if you don’t know who Ricky is, he is a top shelf real estate agent. He’s done a half a billion in sales, but he teaches other agents how to kill it, you know, in the real estate space.
00:00:21:09 – 00:00:35:28
Rod
And you’re wondering, well, what are we going to talk about? We going to talk about a lot because he’s building multifamily. He’s great at sales, he’s great at marketing. He’s got a kick ass Instagram account. And so there’s a lot of things we can talk about that will add value to you regardless of if you’re doing single family or not.
00:00:35:28 – 00:00:37:15
Rod
So welcome to the show, brother.
00:00:37:15 – 00:00:38:21
Ricky
Thanks for having me, bro. Yeah, of.
00:00:38:21 – 00:00:48:03
Rod
Course, man. So, you know, why don’t you why don’t we start, you know, like, like most people start and just kind of give us a little background on who you are and expand on, you know, what I just said?
00:00:48:05 – 00:00:59:21
Ricky
Yeah, absolutely. So I live in Gulf Shores, Alabama. Right? Right on the beach. Nice. So you’ve seen pictures of it right at the you you saw my talk at at Wealth Con, right?
00:00:59:21 – 00:01:02:00
Rod
No, I know. I was I wasn’t in the room for gotcha.
00:01:02:00 – 00:01:23:11
Ricky
So, yeah, I showed a picture of Gulf Shores. So it’s basically it looks like Sarasota, rather the beach. Nice. The difference is like on the beach, it looks about the same right then right off the beach. It doesn’t look like Sarasota. Sarasota has a downtown area and other tall buildings and stuff. And we don’t really have that. We just have the tall buildings basically right on the beach.
00:01:23:13 – 00:01:29:13
Rod
Um, what’s what’s, what’s inland. I know you’ve got some, some refineries and things like that up there, don’t you?
00:01:29:15 – 00:01:42:29
Ricky
It’s, um. There’s not a whole lot on. Okay. You know, there’s, it’s. It’s grown big time. Um, there’s some really incredible schools. We have an outlet mall. There’s a huge amusement park they just built.
00:01:43:02 – 00:01:43:10
Rod
Oh, no.
00:01:43:10 – 00:02:00:14
Ricky
Kidding. Okay, there’s a lot of stuff. Stuff coming, but it’s. It’s it’s like we’ll see every every little beach town, You know, there’s Gulf Shores, there’s Orange Beach. Those are both in Alabama. Then the next town is pretty low key in Florida. Oh, no, it’s just right on the Florida, Alabama line.
00:02:00:17 – 00:02:01:17
Rod
Gotcha.
00:02:01:19 – 00:02:02:29
Ricky
Then you’ve got Pensacola Beach.
00:02:03:02 – 00:02:04:28
Rod
Just the poor man’s Riviera, right?
00:02:05:01 – 00:02:05:28
Ricky
I don’t know if it’s that.
00:02:06:00 – 00:02:23:06
Rod
That’s what they called it. That’s what I heard. It called in on the on the panhandle. You know, I’ve been I’ve been to Panama City and. Oh, God, what’s that town that they did? The the. Oh, was that movie where they had the little town and they, they videoed Oh.
00:02:23:08 – 00:02:25:10
Ricky
There’s Mexico City, there’s.
00:02:25:13 – 00:02:26:02
Rod
A beach.
00:02:26:02 – 00:02:28:15
Ricky
There’s, there’s, there’s Navarre.
00:02:28:15 – 00:02:44:18
Rod
There’s there was a more what was a movie where they filmed this kid growing up through the movie and he was in this enclosure. And I was just trying to think who the actor was. Anyway, never mind. Never mind. But it was up there in one of those towns. Yeah. Those beaches are gorgeous. At least in the panhandle.
00:02:44:18 – 00:02:45:17
Rod
I mean, wide.
00:02:45:17 – 00:02:50:21
Ricky
They’re white. Yeah, just. It’s white powder sand. Yeah. So people don’t realize Alabama has beaches.
00:02:50:21 – 00:02:53:22
Rod
Yeah. And you got beaches like that over there, too? Yeah. Like they have nothing else.
00:02:53:24 – 00:02:55:27
Ricky
Oh, yeah. Oh, yeah. It’s. It’s all the same beach.
00:02:55:27 – 00:02:56:08
Rod
Nice.
00:02:56:08 – 00:03:18:25
Ricky
So the Florida beaches run, run into Alabama. Got 40 miles, so we’ve got about 40 miles of those white sandy beaches. And it’s always been a really small town. So it’s still about between both towns, Gulf Shores and Orange Beach. It’s still about 25,000 population. Wow. But we’ve got 8 million visitors every year that come.
00:03:18:25 – 00:03:20:05
Rod
Through a lot of Airbnb.
00:03:20:05 – 00:03:20:28
Ricky
And so.
00:03:20:28 – 00:03:21:28
Rod
Forth there. Uh.
00:03:22:00 – 00:03:42:29
Ricky
Yeah. So, so it’s an interesting market because it’s small town on the beach. It’s nice, it’s cool to live there and there’s this massive market of, you know, vacation slash investors that come down. And from all over the country that buy these Gulf Front condos and houses and stuff. And so that’s the market I got into. Got it.
00:03:43:03 – 00:03:45:04
Ricky
So grew up roofing houses with my dad.
00:03:45:07 – 00:03:46:11
Rod
Oh, no kidding.
00:03:46:13 – 00:03:48:12
Ricky
Yeah, he owned a roofing business for 30 years.
00:03:48:12 – 00:03:59:06
Rod
My brother owns one and my boy was just here and he works for them. And he they had hail up in Denver and he’s like, made 100 grand a month for the last two months. So because, you know, insurance pays for the roofs.
00:03:59:06 – 00:04:12:28
Ricky
Yeah, but yeah, we chase storms and stuff. Yeah. For a little while here and there. But I grew up doing that. And then that’s real work That has a lot to do with where I’m at now. Yeah. You know, I think, yeah, I.
00:04:12:28 – 00:04:20:09
Rod
Mean, I sit, you know, I just got this brand new roof on my compound here that you probably didn’t notice because they just cleaned everything out but brand new roof It.
00:04:20:15 – 00:04:22:04
Ricky
It’s a it’s a tile roof. Tile.
00:04:22:04 – 00:04:27:23
Rod
Yeah. Yeah. They just finished it literally a few days ago. Wow. And they have to come in and I didn’t notice it.
00:04:27:23 – 00:04:30:22
Ricky
Yeah, I didn’t notice. It looked pretty. Pretty good. Yeah, it’s brand new.
00:04:30:22 – 00:04:40:23
Rod
Brand new? Yeah, it’s. It’s good as it’s ever going to look. But yeah, Hurricane Ian was good to me. You know, I. Yeah, I got the roof, I get painting. I mean the all new pavers going to look like a brand new place, but.
00:04:40:25 – 00:04:46:01
Ricky
So this is how far is how far are you from Fort Myers.
00:04:46:03 – 00:04:48:24
Rod
About 45 minutes. Okay. Yeah, that’s where hard. Yeah, that’s right.
00:04:48:24 – 00:04:52:17
Ricky
And then. And then you’re and then between here and there is is Venice.
00:04:52:22 – 00:05:03:15
Rod
Now there’s Venice and then there’s Port Charlotte. Okay. Now I used to be the largest single family homeowner in Port Charlotte. I had about 360 houses there when Charlie hit Talk about a frickin night.
00:05:03:15 – 00:05:04:13
Ricky
What year was that?
00:05:04:15 – 00:05:06:09
Rod
Oh, God, I’m bad with dates.
00:05:06:11 – 00:05:08:16
Ricky
But it was. It was in the eighties and nineties.
00:05:08:18 – 00:05:09:04
Rod
It would have been.
00:05:09:04 – 00:05:10:26
Ricky
In the 2000 nineties.
00:05:10:28 – 00:05:29:05
Rod
Yeah. But yeah, it was uh that would talk about a shit show. I mean it was the most complex logistical thing I ever had to deal with. I bet you know, 300 they were all damaged every single. Yeah. But you know what was interesting and I don’t want to get back to your story. I don’t want to steal your thunder here.
00:05:29:05 – 00:05:48:08
Rod
But what was interesting is, you know, the the building codes and standards really make a freaking difference because I would have houses that were built in the sixties that would have the whole garage blow away. The whole roof blew away. Literally. I had one guy that was in his living room and everything from the ceiling line blew away.
00:05:48:12 – 00:06:08:00
Rod
So it was just daylight everywhere. And he was hiding under his couch. And but, but that would be next to an eighties build house that had a few shingles missing. I mean, it was astounding to see what a difference building codes make for hurricanes. But yeah, I, I had a huge almost $1,000,000 settlement here on my compound, so I’m getting redone.
00:06:08:00 – 00:06:11:17
Rod
But of course, you know, insurance has gone through the frickin roof.
00:06:11:17 – 00:06:12:04
Ricky
Oh, yeah.
00:06:12:04 – 00:06:13:22
Rod
Coastal towns. Well, because of this.
00:06:13:24 – 00:06:31:22
Ricky
Yeah, I, uh, I had. I don’t know when Hurricane Sally hit us last, maybe a couple of years ago. Had about at that time, I was at about 20 something properties. All of them got hit. Yeah, I had to put roofs on half of them, and I had to pay for all of it.
00:06:31:24 – 00:06:32:12
Rod
Oh, you did.
00:06:32:12 – 00:06:57:07
Ricky
Yeah. Y yeah. Because the insurance adjusters go in there and they’ll say, okay, you know, it’s this much damage, right? Okay. The whole roof’s totaled. All right? It calls 12,000 or reroof This house. All right, You’re deductibles 3500. Your roof was X amount old. So the depreciate we we’re going to depreciate that the 10,000 or whatever. So we’re going.
00:06:57:07 – 00:06:59:07
Rod
To get a public adjuster to help you.
00:06:59:10 – 00:07:00:10
Ricky
A public adjuster?
00:07:00:10 – 00:07:24:03
Rod
Yeah. Public adjuster. You would have those. Are you listening? If you ever have an insurance claim of any consequence, hire a public adjuster. Because what a public adjuster does is they fight the insurance companies and they do their own estimations, and. And they always make you money, right? I had a public adjuster down in Port Charlotte, and they and we actually had to sue the insurance company.
00:07:24:03 – 00:07:45:10
Rod
But here in this compound, I hired a public adjuster, paid him too much. I paid him 10%. But but he absolutely made me money. Like we just had a fire in my Nashville asset, 20 units, and I’ve got a kick ass public adjuster there that is absolutely getting our our estimate up from the insurance company. They almost always pay for themselves and then some.
00:07:45:11 – 00:08:08:26
Rod
Yeah but but anyway yeah so it’s no fun dealing with insurance companies and if you ever have big claims, get help. But shop the public adjusters because some of them aren’t any good and some of them are. We had a tornado destroy 101 units up in Beavercreek, Ohio, a complex I have up there. And we had an awesome public adjusting company up there as well that rebuilt all 101 units literally.
00:08:08:28 – 00:08:12:13
Rod
But but anyway, so keep going with your story, man.
00:08:12:13 – 00:08:27:13
Ricky
Yeah, that’s good information. You know, um, but anyway, I got in real estate. I actually. I got a scholarship. Football scholarship to Missouri Valley College. I went there for a semester too far away. It’s like 20 hour drive.
00:08:27:14 – 00:08:27:27
Rod
Oh, wow.
00:08:28:02 – 00:08:41:06
Ricky
So I. I was, like, 18. So I was like, I’m. I don’t want, you know, I went there for a semester, enjoyed it, came back home, went to Alabama for a semester, felt a history class, and I was like, I’m out of here. Really?
00:08:41:08 – 00:08:41:17
Rod
That was.
00:08:41:17 – 00:09:03:17
Ricky
An oncologist. Wasn’t my thing. Mm. I made all A’s and B’s in high school sleeping. I mean, I was the guy in class with my head down on the desk. It was just easy for me because I could absorb the information and the tests were easy. But in college, especially a history class, you know, they’re just up there lecturing and I’m just like, What is this guy talking about?
00:09:03:19 – 00:09:06:15
Rod
And what and what’s it going to do for me in any way.
00:09:06:15 – 00:09:26:16
Ricky
Shape, unless you just love history right now? Tell that to a guy last night at dinner and he’s like, Well, I’m a history major and I’m thinking, good gosh, this guy is very interested in history, which it’s good to be interested in. History just wasn’t my interest. I was more focused at the time, just like now I’m just more focused on trying to be productive.
00:09:26:19 – 00:09:40:05
Ricky
And I felt like that was more of a, you know, curiosity, entertainment. You know, if I want to know this kind of thing, it’s almost like watching a Netflix movie to kind of learn history.
00:09:40:07 – 00:10:02:09
Rod
You know, 67% of the people that go to college never use their degree for anything. I think it might even be more than that. And then and then, of course, there’s that statistic that that you know, what is it, 80, 90% of the people out there have have less than 10,000 in savings. And the people that go to college have huge student loan debt and, you know, college isn’t isn’t really helping a lot of people.
00:10:02:09 – 00:10:07:28
Rod
I mean, if you’re doing a role like an engineer, dentist, doctor or something like that, colleges grading the college.
00:10:08:00 – 00:10:27:09
Ricky
Well, you got to go to college to be a doctor, right? Oh, your etc.. Right. But it’s nowadays, you know, I mean it used to be had to write to have a career worth anything, you know, now you know, you can pretty much do just about anything you want to do learning off of we.
00:10:27:09 – 00:10:41:20
Rod
Have thought leaders like you and I. I mean I have a picture that I show where I’ve got my arm straight out and I’ve got lanyards, hundreds of lanyards around my neck and all my arms from boot camps and masterminds and events that I’ve gone to over the years. And that’s my college. And you saw my library downstairs.
00:10:41:20 – 00:10:53:14
Rod
I’ve got thousands of books. I’m very well read. You know, college wasn’t the right thing for me, is it? Just like it wasn’t for you. But we’re both super successful because we have work ethic. We knew what we wanted and we just went after it, right?
00:10:53:16 – 00:11:01:09
Ricky
I still continue to to read or read, you know, or read or write. Um, you know, I’m always trying to learn and everything.
00:11:01:09 – 00:11:03:01
Rod
But you wrote a couple of books, right?
00:11:03:03 – 00:11:25:15
Ricky
Yeah, I wrote two books in 17. Yeah. You know, I’ll get to that. I, uh. I got it in. Oh. To sell in real estate. I dropped out of college, and I was like, I’m going to be a real estate mogul. So I got my license. I quit roofing. I was like, See, your dad got on, got in the office full time for 30 days, sold zero, you know, said Hey, dad and back went back to roofing.
00:11:25:15 – 00:11:53:17
Ricky
Oh, yeah. Doing that at the same time. So it took me eight months to get to my first deal. Then I started to click into a month, left the roof, went full time, made a lot of money because the market exploded. I When was this? 203 or four market? Just it did a lot. It was real similar to what just happened in 21 and oh sure, you know, 20 and 21, but 2021 was to me a lot more violent than the market was a little more violent than uh 020.
00:11:53:17 – 00:12:02:20
Rod
Three Buffett’s famous quote, Be fearful when others are greedy. A lot of greed last couple of years and now the fears come and be greedy when others are fearful.
00:12:02:24 – 00:12:03:10
Ricky
Yeah, I.
00:12:03:10 – 00:12:05:04
Rod
Think he’s coming. Right.
00:12:05:04 – 00:12:13:03
Ricky
But absolutely, absolutely. Um, but I started flipping houses, you know, there were guys 30, 40, 50.
00:12:13:03 – 00:12:14:18
Rod
What were you doing this in the same place?
00:12:14:21 – 00:12:39:02
Ricky
Yeah. Gulf Shores. Yeah, I was. I was, uh. I was in my. It was in my early twenties, and there were guys 40, 50, 60, you know, flipping houses. And I was like, okay, here’s some money. So I would start flipping houses and I made millions and I had about 2 million worth of debt. You know, that I got caught with no way.
00:12:39:05 – 00:12:52:15
Ricky
No, it was actually. 0505 is when the market actually started coming down. People think oh eight it’s actually oh five is when prices leveled out, started coming down slowly. And you know, if you watched the movie, The Big Short.
00:12:52:17 – 00:12:54:18
Rod
Great movie. Um, very accurate too.
00:12:54:18 – 00:13:17:22
Ricky
Yeah, it was, um. You know, I lived it. Yeah, me too. But the guys that were calling it, you know, they were betting on they were shorting the market and, uh, you know, these, the, you know, the bonds that they were shorting against on the, on the mortgages that they knew were bad, they were still doing well, you know, even after things turned right.
00:13:17:22 – 00:13:44:11
Ricky
So in oh five is actually when the market started turning and uh, you know, the guys were like, why aren’t why aren’t we making money? The markets go and the prices are going down. We’re starting to see defaults. Why are you know, why aren’t why aren’t our why isn’t our bet paying off here. And it took it was because Wall Street was was padding it they were they were doing everything they could to try to act like this wasn’t happening.
00:13:44:14 – 00:13:51:14
Ricky
Yeah, they were. They were, um, you know, doing what they could do to manipulate, to keep everything to where it looked. I knew.
00:13:51:14 – 00:13:51:26
Rod
That was.
00:13:51:26 – 00:13:52:07
Ricky
Okay.
00:13:52:13 – 00:14:12:03
Rod
Yeah, I’ll be honest. I didn’t. I didn’t. This is news to me. I lost $50 million in 2008 nine. I got crushed at 800 houses and got crushed. But, you know, of course, I wasn’t paying much attention. And I was recently single and I was in South Beach like an escaped convict with a condo in the Lamborghini. It was it was a shit show.
00:14:12:03 – 00:14:18:16
Rod
But but so I didn’t have my eye on the ball at all. Yeah, but. But when I happened, it was like to me, it was like a light switch.
00:14:18:16 – 00:14:19:02
Ricky
Yeah.
00:14:19:03 – 00:14:23:07
Rod
I mean, yeah, I couldn’t sell my whole portfolio for $0.30 on the dollar. Got away.
00:14:23:07 – 00:14:47:19
Ricky
Yeah, well, that’s when everything kind of came. Came out, right? Yeah, that’s when it was like a publicly known main, like real estate collapsed. Coming down four years before that, but nothing really happened with the stock market and or anything because Wall Street manipulated that situation as long as they could until they just couldn’t anymore. And then because of that, had it crashed even harder.
00:14:47:22 – 00:14:48:11
Rod
Interesting.
00:14:48:11 – 00:15:07:05
Ricky
I. Right. Yeah. Okay. Yeah. If you look if you go back and look at a graph of just home prices, you know, it started oh five and then it went down all the way to 2012. So I sold my last condo January oh five, and of course I had all that debt from all the houses I was in the middle of flipping, so I got caught there.
00:15:07:11 – 00:15:16:17
Ricky
I bleed it out, my savings, just trying to hang on to everything, thinking, well, everybody was saying this isn’t going to, you know, give it a couple of months, give it six months, a year, whatever.
00:15:16:17 – 00:15:19:21
Rod
So you weren’t able to flip. In other words, you had houses, you had inventory you couldn’t.
00:15:19:21 – 00:15:25:04
Ricky
Sell, right? I was I was flipping and I would buy two more by four more and I kept flipping.
00:15:25:07 – 00:15:27:00
Rod
And she had a little implosion.
00:15:27:00 – 00:15:36:01
Ricky
When everything when everything turned, um, I could, I could basically sell I sold off most of what I had just for what I owed.
00:15:36:03 – 00:15:37:17
Rod
Oh, good. Well, I got out of it.
00:15:37:17 – 00:15:46:19
Ricky
Yeah. And there were a couple that I did have to let go back to the bank foreclosed on. But then I was like, Hey, Dad, Back, back.
00:15:46:21 – 00:15:47:15
Rod
Give me a hammer.
00:15:47:21 – 00:15:51:12
Ricky
Go back to the roof. That was oh five.
00:15:51:14 – 00:15:52:25
Rod
And that’s humbling, isn’t it?
00:15:53:00 – 00:15:53:26
Ricky
It was.
00:15:53:26 – 00:16:17:12
Rod
It’s really humbling. I would tell you. I tell the story at my boot camps where, you know, I, I was flipping houses, making a lot of money. I lived in what would be about a $2 million house. Now, I had a Rolls Royce had a Pantera, which is a Ford, exotic, gorgeous cars. You know, I had a Corvette and and I lost everything and and I had to go paint houses to have enough money to eat.
00:16:17:15 – 00:16:30:26
Rod
And I remember my mom bringing me a bag of groceries because she was worried about me. So I went from Rolls Royce to mom bringing me frickin groceries. I remember having a meltdown. It was like, Fuck this, I’m going to get kicked, might get back on my feet and make it happen.
00:16:30:26 – 00:16:42:09
Ricky
But yeah, I went back to roofing and I was like, okay, what am I going to do? Right? Um, I went up, file bankruptcy. I had some things I had to kind of get out from under me and then, um.
00:16:42:10 – 00:16:44:12
Rod
I should have, by the way, I didn’t and I should have.
00:16:44:12 – 00:16:58:06
Ricky
When I let everything go, I had nothing. There’s only two things that continue to pay for my cell phone because I wanted to keep my number and my real estate license. I kept my MLS fees. That’s the only two things I didn’t pay. Car insurance payments, rent, utilities, nothing.
00:16:58:08 – 00:17:02:29
Rod
So how long did you suck it up in the roofing before you like screw this, I need to go back or do something else.
00:17:02:29 – 00:17:18:06
Ricky
Well, actually, that was oh five and oh six, and then in oh seven, the entire year from basically January to January. But late, um, I got a job on an oil rig. No kidding. Yeah, in Mississippi, I was. I was driving there from Alabama.
00:17:18:12 – 00:17:19:11
Rod
Out there on a rig.
00:17:19:15 – 00:17:34:03
Ricky
On a rig. Wow. Yeah. So I was living and it was cool cause, like, I was actually sleeping on friend’s couches and sleeping in my car. Wow. So when I got the job on the oil rig, it was cool because it was like, kind of like I had a not only this job is going to pay me five G’s a month, right?
00:17:34:05 – 00:17:50:02
Ricky
At working every other week, so a week off. So I’m really working half the time making five G’s. Um, I also had a place to live for a week, and on my weeks off I figured, well, this is, this is a way for me to get back in real estate because I have I got a whole week in between.
00:17:50:02 – 00:17:50:17
Rod
Sure, you got.
00:17:50:23 – 00:18:00:18
Ricky
My workweeks to kind of, like, start really trying to figure out how to get back into the market. It didn’t quite work out like that because.
00:18:00:20 – 00:18:02:23
Rod
Well, we work on timing wasn’t good.
00:18:02:23 – 00:18:24:10
Ricky
Well, when you work on the oil rig and actually it was good, really. When you work on an oil rig, though, when you come back home, you’re completely shot for like it takes you three or four days to recover because you’re working 12 hour days and every other of the every other weeks you’re working either 6 to 6 at night for the whole week or 6 to 6, you know, all day.
00:18:24:10 – 00:18:25:22
Rod
So they’re 24 hours.
00:18:25:22 – 00:18:36:01
Ricky
It’s not 24 is 12, but you’re either working from 6 to 6 during the day, six in the morning till six at night or and then you go home for a week and then the next week you come back, you work from six a night till six in the morning.
00:18:36:01 – 00:18:36:24
Rod
Oh, God, no.
00:18:36:24 – 00:18:42:14
Ricky
So you’re messing up your sleep schedule, right? So you’re just all discombobulated.
00:18:42:14 – 00:18:42:29
Rod
Oh, I get it.
00:18:42:29 – 00:18:43:28
Ricky
Every time.
00:18:44:02 – 00:18:54:10
Rod
I just got off that boot camp, and I’m still I’m. I’m at about 70% now. And where it is today’s Friday and ended on Sunday. So I feel you. So you weren’t able to work the real stuff?
00:18:54:10 – 00:19:13:06
Ricky
I wasn’t like I thought I would. I did mess around with it and stuff. What I realized in oh seven when I was on the rig was there was this guy that mentored me in the beginning in oh two, and I realized in MLS he was he sold 30 properties in oh six. I was six was a really bad year, you know, for us, Right.
00:19:13:10 – 00:19:21:11
Ricky
You know, beachfront condos. It’s a luxury. You know, it’s it’s the first thing that people let go of when they see something.
00:19:21:11 – 00:19:22:11
Rod
You want, not something you need.
00:19:22:11 – 00:19:41:15
Ricky
Right. It’s the first thing. It’s not primary home. It’s not a necessity. It’s they let it go. It’s a first thing to let it go. And it’s the first thing. It’s the last thing they buy is as things get good, Right? Interesting. Yeah. So, you know, we’re we’re kind of the first you know, our market is second home market vacation market’s really going to be the first to really feel.
00:19:41:15 – 00:19:58:06
Rod
You’re like the canary in the coal mine kind of a thing then, right? Which is see, because I didn’t feel it at all, you know, because rent status stayed stable, I had stopped buying because I thought it was too high at that time. It’s not now compared to what I get, what you pay now, it’s not even the same planet.
00:19:58:06 – 00:20:04:29
Rod
But interesting. So you yeah, you were kind of you actually saw it probably before other people did because. Yes. Because of where you.
00:20:04:29 – 00:20:23:16
Ricky
Yeah, yeah, yeah, yeah. I think absolutely. That makes sense. So it kind of it kind of hit us a little differently, um, you know, a little earlier. But even when you look at national home prices, they still topped out in the beginning. Well, five and taper down. It was just such a slow, gradual decline. It’s like now home prices go up and down every year.
00:20:23:18 – 00:20:38:17
Ricky
If you look at national home prices, they go they do this every year, you know, summer they’re up, fall to come down. It’s a stair step there. You know, the net, the next low is higher than the last low. The next high is higher than the last high. But they still fluctuate through the year. Right.
00:20:38:18 – 00:20:48:14
Rod
I’ve seen some of your posts on social and you’re still bullish that. Well, tell me what you think’s going on with home prices right now. Sorry to derail your They’re pretty.
00:20:48:18 – 00:20:51:06
Ricky
They’re they’re pretty leveled right now.
00:20:51:06 – 00:20:51:29
Rod
They’re flat lined.
00:20:51:29 – 00:21:18:09
Ricky
They’re yeah, pretty much I think I mean, they’re you know, they’re higher. I mean, you know, there’s data. There’s I mean, just about every, you know, real estate, you know, data company has is up on a year over year, you know, like August or last August or whatever were up like 2% or whatever the case may be. But when you’re looking at median home prices and you’re looking at average home prices, you know, it’s just like and, you know, that’s averaging all the markets.
00:21:18:12 – 00:21:18:28
Ricky
And then, you.
00:21:18:28 – 00:21:21:19
Rod
Know, there’s some markets that are different than normal, obviously.
00:21:21:21 – 00:21:33:00
Ricky
Of course. And then you’ve got different sectors in the market high in luxury and low end stuff. And there’s just so much stuff. So it’s kind of hard to say, okay, this is where it is.
00:21:33:02 – 00:21:44:15
Rod
Um, you know, Elon Musk got a quote where he said commercial real estate is what’s going to cause this recession, but residential will follow after that. So that’s that’s his opinion. That’s a direct quote.
00:21:44:19 – 00:21:48:12
Ricky
From a guy that doesn’t own a house. Yeah. Or is that or is that a.
00:21:48:12 – 00:21:50:00
Rod
Pretty smart guy or.
00:21:50:01 – 00:22:04:04
Ricky
Is that in the real estate industry? But yeah, he’s a really smart guy. Yeah. Um, well, we’ll see. We’ll see. It’s kind of like one of those things, you know, throw it out there if it comes true. You’re a genius. Yeah, well, you know, if it doesn’t, then. So you heard that quote. Who cares?
00:22:04:04 – 00:22:05:22
Rod
You were ready for it. You heard that one?
00:22:05:22 – 00:22:19:06
Ricky
Yeah, I heard it. Um, I, uh. I mean, you don’t agree. Well, it is two different sectors. Yeah, I mean, agreed. Agreed as two different sectors with completely different financing. Terms.
00:22:19:09 – 00:22:19:26
Rod
Agreed.
00:22:19:27 – 00:22:25:09
Ricky
You know, I mean, commercial is more of a floating, you know, five year.
00:22:25:10 – 00:22:26:04
Rod
We have some of it’s.
00:22:26:04 – 00:22:27:06
Ricky
Floating some, some are.
00:22:27:06 – 00:22:28:24
Rod
Very do conforming debt that’s.
00:22:28:26 – 00:22:31:09
Ricky
More of it then then residential.
00:22:31:09 – 00:22:37:20
Rod
Is the crash is the floating. Oh yeah that’s the bridge debt is going to cause cause a problem for for for operators in the commercial world.
00:22:37:20 – 00:22:42:22
Ricky
And then in the commercial. Right. You’ve got the huge office you know that’s.
00:22:42:22 – 00:22:43:16
Rod
That’s a train wreck.
00:22:43:18 – 00:22:51:25
Ricky
Yeah. Right. You got the warehouse, you got the small office, you know, like I buy a 2000 square foot office buildings. Well, those are great. They’re amazing.
00:22:51:25 – 00:22:52:18
Rod
Oh, those are fantastic.
00:22:52:18 – 00:22:53:05
Ricky
I mean, they.
00:22:53:05 – 00:22:56:18
Rod
Talk like where you’ve got a little office in the front. You’ve got a warehouse in the back. Yeah. Yeah.
00:22:56:24 – 00:23:16:04
Ricky
Those or you know, I’ve got a couple that are that are commercial duplexes. Just a thousand square foot on each side. Nice. You know, I’ve got one that has like a really small warehouse, almost like a little storage unit and then about, I don’t know, 1700 square foot heated and cool offices and stuff. Um, they call.
00:23:16:04 – 00:23:18:17
Rod
It flex space, right? So what they call that?
00:23:18:17 – 00:23:21:11
Ricky
Well, I rent it out to one one company. Yeah.
00:23:21:11 – 00:23:27:08
Rod
No, but where it’s flexible, where you can, you can expand the office or put in more warehouse. Yeah. Stuff like that.
00:23:27:13 – 00:23:36:24
Ricky
It was actually a warehouse. The whole back of it. Half of it was a warehouse. I finished it out as offices got you to add more heated and cooled square footage. And then I left. Like.
00:23:36:27 – 00:23:51:20
Rod
I’ve never done any of that, but I really like it. I know it does Really? Well. Yeah, I mean, forget office right now. Jeez, I think the office occupancy in the country is like 70%. Yeah, I mean, we’re going to see massive defaults. And here’s the problem. A third of that debt is with small and regional banks solvency.
00:23:51:20 – 00:24:10:18
Rod
More bank failures, too, for sure. And then you’ve got bridge debt, which is collapsing right now. Man, I’ve seen some huge world class operators that are in deep shit right now. I mean, they’re having real problems. I just saw an article in RealPage on somebody I really had a lot of respect for. I’m not going to throw it out here publicly, but man, I knew that he was in trouble.
00:24:10:18 – 00:24:22:01
Rod
I saw him at Wealth Con at Grant Cardone saying he came up to me. He’s like, Yeah, I’ve got 13 assets that are in trouble right now. And he was freaking out and he just had one go back to foreclosure. I just saw that in RealPage a couple of days ago.
00:24:22:03 – 00:24:30:16
Ricky
So yeah, but back to Elon’s quote, right? My point is, is that that that space, commercial space is completely different animal they agree.
00:24:30:16 – 00:24:38:03
Rod
But if it starts a bank collapse and it starts it starts a stock market collapse, it to me it’s it could very well be a domino thing.
00:24:38:03 – 00:24:40:08
Ricky
That could bleed into.
00:24:40:11 – 00:24:41:11
Rod
Unemployment.
00:24:41:11 – 00:24:52:12
Ricky
And it could bleed into into the housing market. Right. Yeah, but the housing market the housing market itself is is fundamentally strong. Incredible.
00:24:52:12 – 00:24:56:06
Rod
Yeah. And there’s a huge pent up demand, too, especially if the rates come back down.
00:24:56:06 – 00:25:06:07
Ricky
Well, I mean, here’s the thing. Okay. Um, there’s so many people who own a house who want to badly.
00:25:06:07 – 00:25:07:01
Rod
Move, right?
00:25:07:01 – 00:25:07:23
Ricky
But they can’t.
00:25:07:24 – 00:25:08:04
Rod
Right.
00:25:08:11 – 00:25:16:22
Ricky
What do you call that? Pent up demand. Right. And that that group is growing every day and out of that group every day. They their desires plain.
00:25:16:23 – 00:25:18:12
Rod
Why they can’t just do well.
00:25:18:12 – 00:25:37:01
Ricky
Well, they’re sitting on three or 4% mortgage right now. Right. If they go buy a new home they’re going to it’s going to be six and a half to seven and a half. They’re going to literally double their mortgage rate. Right. Just to move. And they just yeah, it might not even be that. They can’t. Okay. They don’t want to.
00:25:37:01 – 00:26:00:29
Ricky
Right. You know, most of them can financially. But why would you want to go from a three to A to a seven. Yeah. Um, and so this group of people who own houses, it’s have these what they call, you know, golden handcuffs right there, They’re, it’s, it’s a mat. Like, we don’t even realize it. And the next thing is first time homebuyers.
00:26:01:02 – 00:26:27:27
Ricky
We have no earthly clue. We’re clueless when it comes to understanding the amount of first time homebuyers that are just sitting there that haven’t even said anything because of interest rates. We in 1990, there was such a spike in birth rates. If you look at a 50 year birth rate, you know, chart, there’s a spike that’s massive in 1990 that stays at that level for a good decade and a half, all the way to oh six or so.
00:26:27:29 – 00:26:48:08
Ricky
You know, if they’re born in 90, that means they’re 33, Right? The average age of a first time homebuyers, 33 to 36. Okay. So so we’re looking at this massive group of 33 year olds right this year. And these people want to own homes. You see these headlines saying, you know, Gen Z and millennials.
00:26:48:11 – 00:26:49:06
Rod
They want to rent and.
00:26:49:06 – 00:27:09:15
Ricky
Stuff. Yeah, they don’t want to buy Homes are just and then you read the article and you look at the data and it’s literally got like 12, 13%, you know, and they’ll have it with the different it’ll be like this, you know, 13% Gen Z, you know, like, you know, 13% millennials and whatever don’t want to own a house.
00:27:09:17 – 00:27:17:20
Ricky
And I’m thinking, well, okay, that’s 12% of the don’t. What about the 88%? What about the other 88%? Do they want to? Yes, they do. See, the the.
00:27:17:20 – 00:27:28:21
Rod
Problem is, you know, you could get a 3% loan 18 months ago and now the mortgage is double. Yeah. The prices haven’t gone down to to justify that doubling in mortgage.
00:27:28:21 – 00:27:51:07
Ricky
But the longer the rate stay up that the more demand that retracts the transactions and restricts the market, the more demand is going to be, the more the more demand is building. And it’s going to just be that bigger of an explosion when it goes the other way. Yeah. You know, so tha first time home buyers and sellers is shit we don’t even like.
00:27:51:07 – 00:28:12:21
Ricky
It’s, it’s nothing. We’ve never even seen anything like this. And what’s going to happen is that the trade up seller, they’ll list their home which adds to inventory and the new listing, but they’re also going to take a home off the market as they upgrade, right? They’re going to buy. They’re going to sell. They’re going to buy, which is going to be a net even for active listings.
00:28:12:22 – 00:28:34:18
Ricky
Right. And then the first time home buyers are going to come in and take one off, which would be a net negative for active listings. So what is that scenario going to do to the market? We’re going to have an uptick in new listings. We’re going to have an uptick in transactions because of all the stuff happening. But active listings are going to go down, are going to go from bad to worse when this happens.
00:28:34:21 – 00:28:40:25
Rod
And that’s the new construction right now. I’m sure you track that as well. I don’t pay attention to new home construction. Has that dropped or is it still.
00:28:40:25 – 00:29:05:28
Ricky
Is still the same? They they it seems like. So there was this a report they just did a report where there were less home starts than we’ve seen since 2020. Um, but permits are up, you know, over a year ago but still, you know, down. Um, I think, I think I’m kind of conflicted with that data because what I feel like is two things.
00:29:05:28 – 00:29:28:13
Ricky
One, yes, mortgage rates being high and the homebuilders are probably sitting here thinking, let’s not get too crazy here right home. The the percentage of new homes being bought is like in the third, a third of those the interest rate, which is higher than it has probably ever been. Right. And what they’re doing, the big homebuilders, they’re buying down the rate.
00:29:28:13 – 00:29:38:15
Ricky
So I just bought five D.R. Horton homes. Did you really? About about five. I closed on three. Yeah, I bought three. It’s closed on three. I’ve got two more that I’m closing in the next couple of weeks.
00:29:38:18 – 00:29:40:08
Rod
They buy down your interest rate. Yeah.
00:29:40:11 – 00:29:43:01
Ricky
So I got a 5.9 on investment.
00:29:43:03 – 00:29:44:23
Rod
For, for what period of time.
00:29:44:25 – 00:29:45:22
Ricky
The 30 year.
00:29:45:28 – 00:29:47:01
Rod
They bought it down for 30.
00:29:47:01 – 00:29:47:27
Ricky
Years all the way.
00:29:47:29 – 00:29:48:26
Rod
Wow.
00:29:48:29 – 00:30:19:04
Ricky
So, so I’ve got, I’ve got 5.9 on, on a on a 30 year fixed or it’s on Gulf Shores. Oh no kidding. For an investment property where you know, like I’m buying these for like 3 to 350, they’re for bedroom two or on a lake. Nice three or like right across the street from this new amazing new school they’re fixing to build for Gulf Shores Public School.
00:30:19:07 – 00:30:27:27
Ricky
And, um, my payments are like 1600 and I’m rent them out for 24 or 2500 a month. I might give me as many as I can buy.
00:30:27:29 – 00:30:30:26
Rod
You know, what kind of financing you get on those. Just curious.
00:30:31:03 – 00:30:32:13
Ricky
I did 20%.
00:30:32:14 – 00:30:36:07
Rod
Fannie Mae, Fannie Mae or Yeah also the Fannie Mae. So you have a limit of like 11 or 12.
00:30:36:07 – 00:30:37:14
Ricky
I think I can only do ten.
00:30:37:14 – 00:30:38:12
Rod
Ten. Okay.
00:30:38:15 – 00:30:39:00
Ricky
Ten. Yeah.
00:30:39:01 – 00:30:39:16
Rod
It’s been so.
00:30:39:16 – 00:30:52:08
Ricky
Long since I think I still see I buy can I buy a lot of stuff? Cash. Um, and uh, so I’ve still got like one or two of loans of, like, like conventional loans that I can get.
00:30:52:12 – 00:30:54:11
Rod
You go to banks, though. I mean, yeah, we just do it.
00:30:54:11 – 00:31:00:08
Ricky
There’s so many different things you can do on top of that interest. You get the best rates and stuff whenever you know, Well.
00:31:00:10 – 00:31:07:21
Rod
I told you we could debate single versus multi, but you know, those sound like good deals. You know, I’m kind of doing the thing for me. And the thing.
00:31:07:21 – 00:31:14:00
Ricky
For me on that debate is, is this I don’t really know where multifamily is right this second.
00:31:14:00 – 00:31:14:24
Rod
Yeah.
00:31:14:26 – 00:31:28:02
Ricky
So when I when I decided I wanted to kind of start to think about syndication, how to syndicate, learn that game, since I have such a big following, I was like, okay, I could raise some money for my brother.
00:31:28:06 – 00:31:29:01
Rod
Yeah, that’s what I.
00:31:29:02 – 00:31:38:23
Ricky
Should have been there. So, you know, I could raise some money easily. Um, right. And so this was, this is two years ago or so.
00:31:38:23 – 00:31:40:08
Rod
I just started thinking about it.
00:31:40:11 – 00:31:59:22
Ricky
That I really started researching and trying to understand the game. And I didn’t want to just jump in. I wanted to really understand everything. And then interest rates start to come up, you know, last March. And then I said, okay, like when I need to be even more patient. So I’ve just been kind of right now this.
00:31:59:22 – 00:32:00:25
Rod
Little opportunity is coming.
00:32:00:25 – 00:32:12:20
Ricky
Brother. Yeah, I’ve just play around and ride out this little this little, this little wave, knowing that there’s a lot of a lot of these multifamily loans coming due over the next, you know, year two point.
00:32:12:20 – 00:32:31:02
Rod
6 trillion in commercial debt coming due by the end of next year. Yeah, that 1.6 trillion I mean that’s a staggering amount. Yeah. Yeah. And a good half a trillion is multifamily, right. And so, you know, and those those people, those people that have loans come in do have two options. They can either sell or they can refinance.
00:32:31:09 – 00:32:46:24
Rod
Sales are down 80% now year over year. So they’re not selling very well. And refinancing is a nightmare because they have to buy the loans down to have to even have a lender sniff out them because the debt service coverage ratio is not there. Yeah. And then and then forget about rate caps. Rate caps are insane.
00:32:46:25 – 00:32:47:06
Ricky
Yeah.
00:32:47:10 – 00:33:11:16
Rod
You know, I tell a story about $100 million recap and 2020 was 23,003 year 3% rate cap. Now it’s 2.3 million for one year. I mean so these you know, they’re, they’re falling like flies. So there’s, there’s opportunities with distressed assets. I just started a a distressed asset fund. You know if you’re interested in it, text the word partner to seven two, three, four, five to talk to our team.
00:33:11:16 – 00:33:31:15
Rod
But but I start an opportunity fund and what’s cool about it is the money is going into a interest bearing account is going to be like 4% interest and we spread it out. It spreads out over multiple banks so it stays under the 250,000 FDIC limit. So the money’s safe. If the bank fails. So it’s so, you know, as a return on the money.
00:33:31:15 – 00:33:39:08
Rod
But but we’re I’m starting to stockpile cash. I mean, I’m in a lot of cash personally, but I’m you know, I’m I want to take advantage of what I believe is coming.
00:33:39:08 – 00:33:39:24
Ricky
Yeah. Yeah.
00:33:39:24 – 00:33:40:29
Rod
It’s good that you waited, too.
00:33:40:29 – 00:34:02:11
Ricky
I think I’m just being patient. So these new these new construction homes is almost like you got bored kind of waiting right now. I saw these opportunities. I’m like, Oh, I’ll just put some money here. Anything? Yeah, I mean, let me let me put some money here. Um, but, um, yeah, I’m, I mean, as multifamily deals come across my desk, I mean, they do constantly the other way and I have underwriters and.
00:34:02:12 – 00:34:20:12
Ricky
Oh good, Yeah, we’re looking at stuff every day. Oh, good. So we, you know, I’ve got a, I’ve got a group and you know, we work together and nice, we’re looking at deals all the time. So, you know, we’re just being super patient and we’re just waiting on like those really amazing deals to come through, right? Because, you know, what’s the point?
00:34:20:12 – 00:34:27:04
Ricky
And just, you know, jump in in the first deal that I do or I take someone’s money to do a deal, I want it to be.
00:34:27:04 – 00:34:30:25
Rod
You know, a home run, home run. And you want to be completely up to.
00:34:30:25 – 00:34:35:15
Ricky
Speed with these deal. A lot of these deals we see right now are just kind of weird. You know, a.
00:34:35:15 – 00:34:36:03
Rod
Lot of them don’t make.
00:34:36:03 – 00:34:50:11
Ricky
Sense. Yeah, they’re just too strange. You know? It’s just like how how in the world can you even. But anyway, um, yeah. So long story short, to finish my story off. Right, Um, I, I, I got laid off from the oil rig.
00:34:50:14 – 00:34:51:09
Rod
Oh.
00:34:51:11 – 00:35:12:21
Ricky
When Obama came in and they cut off a lot of the, you know, money to the gas companies to drill stuff like that, you know, And the market was crashing. So, you know, gas prices were coming down and, you know, gas prices went through the roof as the market escalated and all these gas companies were drilling, you know, like, let’s take advantage of this rush.
00:35:12:23 – 00:35:40:14
Ricky
And then everything started to come down. They drilled less. They were shutting rigs down, laying people off. So I eventually got laid off and, um, I was the last guy out of 52, there were 52 guys, my position out there on different rigs, and I was the last one of the 52 that they let go. They held on to me as long as they could, cause I was just out like a squirrel back then, you know, I was like in the best shape of my life.
00:35:40:14 – 00:35:59:11
Ricky
I mean, I was just slinging sledgehammers and then, um, that got it actually got to where the drillers, which is kind of like the, the, you know, he’s kind of like the the team leader, if you will, of the of the crew. Right. That’s out there. It got to where it was only drillers. Drillers were actually taking my position here.
00:35:59:12 – 00:36:11:05
Ricky
They were just getting downward just drillers on rigs. Anyway, I got laid off and luckily I went and talked to this mentor that had sold all those properties in oh six. He told me kind of what he was doing. It was just a change.
00:36:11:09 – 00:36:12:28
Rod
Was this.
00:36:13:01 – 00:36:23:15
Ricky
In 0808 got you January, February of zero eight interest or might have even been April or March something when.
00:36:23:18 – 00:36:25:14
Rod
Things were starting to come unglued.
00:36:25:16 – 00:36:59:13
Ricky
When I actually got laid off. And and luckily enough, I had I had already been dabbling back in the real estate. And I remember and I had two closings lined up. It was two buyers. And the the week before the closed, they closed on the same day. And that’s kind of crazy, too. And this is the first time I actually realized this, that my first closing ever was my grandmother’s condo, and I closed on another condo I had listed and I closed on my grandmother’s condo and that condo on the same day, my first deal.
00:36:59:15 – 00:37:14:04
Ricky
And then when I came back, I still closed on these two deals on the same day so that I never even thought about that when I came back in the business, when I started. And when I came back, I closed on two deals on the same day to get get going. But the week before that I had to borrow 500 bucks from my dad.
00:37:14:04 – 00:37:16:27
Ricky
You were saying you had to borrow some money from somebody?
00:37:16:29 – 00:37:18:06
Rod
My mom brought me groceries.
00:37:18:07 – 00:37:32:29
Ricky
Your mom brought you groceries about me? Yeah. I had to borrow 500 bucks from my dad the week before. Just to kind of make it through with gas and food and stuff like that. But anyway, um, 2008. So when I got back in and it was, it was the easiest thing ever.
00:37:33:01 – 00:37:36:02
Rod
Um, what were you doing, short sales and stuff or what were you doing?
00:37:36:07 – 00:37:38:16
Ricky
I was representing buyers on foreclosures.
00:37:38:16 – 00:37:38:29
Rod
Gotcha.
00:37:39:03 – 00:37:48:18
Ricky
So I was just putting it out there. Hey, look at the beach in that beautiful. And guess what? It’s 50% the price. It used to be right to have a place here, 50% off.
00:37:48:18 – 00:37:49:05
Rod
Right.
00:37:49:08 – 00:37:53:22
Ricky
You know, And so people were coming out the woodwork. Okay. These things, I mean, there was 50% off.
00:37:53:22 – 00:37:54:13
Rod
Wow.
00:37:54:16 – 00:37:55:15
Ricky
Um, so no.
00:37:55:15 – 00:37:58:03
Rod
Financing was challenging back then. Was that a hurdle for you or.
00:37:58:03 – 00:37:59:24
Ricky
These were all these are all wealthy people.
00:37:59:24 – 00:38:00:13
Rod
Paying cash, right?
00:38:00:14 – 00:38:21:02
Ricky
Gosh, I don’t know that someone might have been paying cash, but financing wasn’t a problem for these people, you know? Gotcha. But this was so easy, man. It was. It was incredible. So I made like, a hundred grand that year. You know, I was making like 45 on the rig, and I double it sitting in an office.
00:38:21:04 – 00:38:21:19
Rod
You know, and I.
00:38:21:22 – 00:38:47:04
Ricky
This is okay. Yeah. 2008, I made like a hundred GS, and that was my comeback year. And I was like, you know, I was out here risking my life on a rig. I watched people get hurt bad you to, to sit in an office like where you are now making it, making twice as much money, you know, for me, I have a different perspective, you know, because I’ve been through the roofing and the oil rig and serve tables and all this stuff.
00:38:47:06 – 00:39:07:06
Ricky
Well, then it was just off to the races, man. And my thought was, let me go represent buyers on these foreclosures. In three years, when the foreclosures go away, prices will go up. They’ll sell that and upgrade to another. There’s two more deals. There were four or five people to me who will also upgrade in three years and refer more people to me and so on and so forth.
00:39:07:09 – 00:39:12:02
Ricky
So I kind of understood the game the second time around. The first time around I was just Cause.
00:39:12:02 – 00:39:12:21
Rod
That will happen.
00:39:12:28 – 00:39:20:27
Ricky
Yes. What happened the first time around, I just was doing a deal with someone and then I’d never talk to them again. They didn’t want to talk. They made 200 grand.
00:39:21:01 – 00:39:22:14
Rod
So you learn how to build a business.
00:39:22:15 – 00:39:33:19
Ricky
I learned how to build a business. It was. It was a force. The first time around, I was kind of like in this world where you didn’t have to build relationships, you can make a million bucks and, well, that’s how.
00:39:33:19 – 00:39:36:27
Rod
You grow, man. You learn as you grow. Yeah, yeah, yeah.
00:39:36:29 – 00:39:55:09
Ricky
So then I built it the right way. These lifelong relationships with with clients. And by 2014, I was selling 100 properties a year. I was a number one Remax agent, Alabama. I was with Remax for ten years and then I was the number one agent for a long time as number one agent. My whole market for eight years in a row.
00:39:55:09 – 00:40:11:04
Ricky
I did 100 deals a year for eight years in a row, just me and an assistant. I was the buyer agent. I was the listing agent. You know, I didn’t have a team or anything. And then in 2017, the first year made a mil. That’s when I wrote the two books. I was like, Wow, this is a great story.
00:40:11:04 – 00:40:15:15
Ricky
Let me just get all this on paper and get this out, you know?
00:40:15:15 – 00:40:17:19
Rod
So people, did your life story in the books.
00:40:17:22 – 00:40:28:07
Ricky
Kind of Not really. It was more like the business story, not the life story. Gotcha. And the first one was kind of like the basics, more of like the storyline. The second one.
00:40:28:07 – 00:40:29:01
Rod
Teaching what you.
00:40:29:01 – 00:40:51:20
Ricky
Learned. Yeah. The first one was the basics. Kind of what? Like my story more. So the second one was what I learned through the crash. Like the fundamentals of what I learned actually from the crash that got me to where I could actually build the business correctly to get to the hundred deals. So I did the two books, they took off and then I started coaching, writing and creating content and everything else for realtors.
00:40:51:20 – 00:41:13:06
Ricky
Yeah, for realtors. And then I just through that, I became the world’s first completely free coach and my services are still free. The mission is to reduce the failure rate in the real estate industry one agent at a time, which we’ve done massively. I mean, yesterday in Sarasota I was like, How many people are here already? Follow me, which I only expected a couple because of the type of group it is.
00:41:13:06 – 00:41:28:19
Ricky
You know, it’s it’s through the board. It’s not a Rick Some of these events I go to a rookie events where I show up and there’s 400 agents. They all follow me, but follow me for a long time. And it’s it’s a different vibe, right? These of this event, I figure there would be a whole lot about half the room and half the room wasn’t.
00:41:28:19 – 00:41:47:02
Ricky
So it was a mixed crowd in the middle of my speech. Um, you know, I said, This is my mission and everything. How many of you here who follow me feel like you wouldn’t even be in the business anymore if it wasn’t for my content, my coaching, stuff like that. And there were six people that stood up and I was like, Wow, you know, feels good.
00:41:47:02 – 00:42:10:08
Ricky
Yeah. So we’re I’ve massively helped people stay in the business and understand, you know, the things I learned through the crash or just that closing is happening every day. Regardless, um, business is unlimited and you got to kind of put relationships over transactions. You know, I don’t when I call a prospect, I’m not calling to try to sell that house or do that deal.
00:42:10:08 – 00:42:17:27
Ricky
I’m can’t use that property’s an excuse to see if I can connect with this person and see what it is they want to do. And if I can help them do it.
00:42:17:29 – 00:42:42:23
Rod
Well, this, by the way, guys, I know you’re like, what does this have to do with multifamily? Well, these these strategies are the same strategies you’d use to connect with a seller, same strategies you’d use to connect with a potential investor for your deals. So, you know, this is this is good content for, you know, what we do and and I know you’re using your money to to to invest in other real estate asset classes.
00:42:42:23 – 00:42:49:21
Rod
You said you’re in some industrial or warehouse stuff. You’re some land to maybe build a number of multifamily.
00:42:49:21 – 00:43:09:27
Ricky
Yeah, I’m really excited about that, honestly. So there’s I’ve been looking for property. I’ve put about four different under contract with due diligence to see if I could build apartments and how many I could do and stuff. And I’ve struck out on on all of them until now. We’ve got this three acres. It’s actually like two miles from my house and it’s on this beautiful corner.
00:43:10:00 – 00:43:17:12
Ricky
And you know, this is right really down the road from where they’re building that new school and everything. But and it’s like 10 minutes from the beach.
00:43:17:12 – 00:43:22:01
Rod
And it’s got the right zoning or. Yeah, the reason why you think you put 38 units on.
00:43:22:01 – 00:43:45:08
Ricky
48 is what we’re shooting for. It’s actually zoned for, but we’re regulated by how many parking spots we can sit on the property. Right. Um, the city was like, I think we think you can get about 30 there, but, you know, an engineer really kind of lays it out and tells you, but the engineer drew it out and it looks like two buildings, 24 units per building with a pavilion in the middle and a dog walking area, and then all the parking out front.
00:43:45:11 – 00:43:54:06
Ricky
Um, but man, I’m excited about it because go, you know, it’s right down the road from my house. It’ll be a new building that I’ll own. Nice.
00:43:54:06 – 00:43:56:07
Rod
And I’m far from the beach.
00:43:56:10 – 00:44:09:03
Ricky
It’s like ten, 10 minutes from the beach. Yeah, that’s, yeah. So that’s what’s cool. It’s is in the Gulf Shores School district, close to the beaches, but it’s still kind of off the beach a little, you know, So it’s a little bit protected from the storms building.
00:44:09:03 – 00:44:09:23
Rod
Or is this B new?
00:44:09:28 – 00:44:17:25
Ricky
I’ve built houses. Yeah. Yeah, I’ve done some. Some some. Yeah, too. I’ve done some houses, but I’ve never built multifamily. So are you.
00:44:17:25 – 00:44:19:00
Rod
Going to hire a builder.
00:44:19:00 – 00:44:19:27
Ricky
Or are you actually.
00:44:19:27 – 00:44:20:09
Rod
Going to hire.
00:44:20:09 – 00:44:23:11
Ricky
One? Yeah, yeah, yeah. I’ll bring somebody in too.
00:44:23:13 – 00:44:26:13
Rod
So these will be like two storey buildings then. Three, three storey.
00:44:26:17 – 00:44:28:14
Ricky
Okay, Interesting. Yeah.
00:44:28:16 – 00:45:01:05
Rod
Well, I it’s something I’m very interested in doing here in Florida as well and I just hired somebody to join my, my CRE capital team. CRE Capital. CRE Equity Capital is the name of the, my acquisitions company and I just hired this really rock star kid that’s joined the team to really work Florida hard. You know? And the way I look at Florida right now is if we can find a deal that we can break even on or make a little bit of money on with the insurance the way it is, at some point it’s going to settle down and I think it will stay like that.
00:45:01:05 – 00:45:31:02
Ricky
I don’t think that’s kind of how I think about really any investment right now in these these high interest rate. And, you know, like just take a single family for, you know, or multifamily or whatever you know, if you if you buy it in this high interest rate environment and it’s cash flowing. Right. So like for example, um, I’ve got one that’s at it’s a duplex and it’s at like seven and a half percent on an investment, but it cash flows 600 a month or so.
00:45:31:02 – 00:45:52:27
Ricky
When you think, oh okay, 600 a month, you know, why are you doing that. We’re not getting rich. Well, the thing is, is that over? If it’s cash flow in in this market over time, rent’s going to go up. It may settle out, it may go down a little, but it’ll settle out. It always goes up. It’ll it’ll settle out and increase, you know, two or 3%, whatever it’s going to increase.
00:45:52:29 – 00:46:16:05
Ricky
So that’s going to increase your cash flow. But then your monthly payments are going to go down as you refinance in four years, right at one and a half percent low or whatever you do. But and so your cash flow from this point is going to do nothing but increase in your your expenses are going to increase. And that gap between your monthly payment and your your rent is just going to get bigger and bigger and bigger over time.
00:46:16:05 – 00:46:23:11
Ricky
So it’s deals are a little harder to find now because of interest rates, but they are out there now.
00:46:23:11 – 00:46:24:09
Rod
They’re there if you hunt.
00:46:24:09 – 00:46:27:26
Ricky
And if you find something, the cash flows today, right? Wow.
00:46:28:03 – 00:46:30:28
Rod
It’s all about flow. Guys. Don’t buy anything that doesn’t cash flow.
00:46:31:02 – 00:46:31:21
Ricky
Absolutely.
00:46:31:22 – 00:46:33:26
Rod
So, number one, that’s that’s why there was.
00:46:33:26 – 00:46:53:16
Ricky
A commercial deal that I wanted and it was a five or six cap and it was like 1.2 mil. It’s a commercial duplex, really nice brand new buildings and Smoothie King and a coffee shop. And I loved it. Um, but I was going to have to put about half a million down just to break even every month on it.
00:46:53:19 – 00:47:01:07
Ricky
So I’m thinking I get a 0% cash on cash return for a half a million box. I’m like, I’m not doing that deal yet.
00:47:01:07 – 00:47:11:19
Rod
So yeah, I my, my bare minimum on cash. On cash used to be ten. Yeah. I’ve dropped some. I’m down about eight now. But yeah. You know anything.
00:47:11:19 – 00:47:15:03
Ricky
Anything over eight on a cash. On cash to me is beautiful.
00:47:15:03 – 00:47:29:00
Rod
Right, right, right. And by the way, if you don’t know what cash on cash return means, it’s the amount of money you make every year and the amount of money out of pocket. So if you put 100 grand in a deal and you get ten grand a year, that’s a 10% cash on cash return. And that’s one metric.
00:47:29:00 – 00:47:48:28
Rod
The other metric is called an internal rate of return, and that’s the total return you get like over a five year period or whatever period you decide to perform it on. And that’ll include principal reduction on your debt and include the cash flow. And it’ll include, of course, you know what you sell it for the appreciation, you sell it for, but that’s the internal rate of return, the IRR.
00:47:49:00 – 00:47:58:11
Rod
But uh, so, so where do you think we’re headed economically? I mean, do you think it’s going to be a shit show or do you think it’s, it’s going to be bad or, you know, I.
00:47:58:11 – 00:48:02:13
Ricky
Don’t know, man. They keep they keep putting a Band-Aid on it. Yeah. You know, I.
00:48:02:13 – 00:48:07:12
Rod
Mean, I feel like you’re kind of bullish. I just feel that when I see your posts and stuff, you’re kind of.
00:48:07:12 – 00:48:08:26
Ricky
I’m bullish on the housing market.
00:48:08:26 – 00:48:14:28
Rod
Okay. Right. Bearish. I think the I think the proverbial shit’s about to hit the fan. Yeah, Do. So we’ll see.
00:48:15:03 – 00:48:21:04
Ricky
Yeah, we’ll see. And the cool thing is, is what I learn is I mean, like, it just doesn’t matter to me.
00:48:21:06 – 00:48:22:29
Rod
You can make money in any sense. Yeah.
00:48:23:01 – 00:48:42:07
Ricky
I mean, if, you know, investors buy in no matter what, right? Um, the good ones. And if prices go down. I was on the, the agents yesterday in Sarasota, you know, I mean, can you imagine how easy it’s going to be to sell real estate if prices go down 20, 30, 40%.
00:48:42:07 – 00:48:46:03
Rod
Especially in Florida? I mean, it’s going to be people will people away from Florida.
00:48:46:03 – 00:49:04:22
Ricky
It’s going to be ridiculously easy to sell. And if we do see a shit show, that means mortgage rates are going to come down. Yeah, I mean, they’re going to they’re going to have to cut rates if we see now. So So now you’re going to have cheaper prices with cheaper mortgage rates. I mean, it’s just going to be a gosh, it’s I.
00:49:04:22 – 00:49:07:05
Rod
Mean, it could be opportunity for your demographic for.
00:49:07:05 – 00:49:08:09
Ricky
So, so, so urgent.
00:49:08:11 – 00:49:17:08
Rod
Listening. Obviously, you need to follow Ricky. He’s he he has an incredible ton of free stuff that he does and and and.
00:49:17:13 – 00:49:18:29
Ricky
Do trainings every week, you know.
00:49:19:01 – 00:49:24:29
Rod
Prospecting and go to his Instagram, by the way, that’s that’s where he’s he’s huge. You’ve got a huge family like 300,000 or something like that.
00:49:24:29 – 00:49:29:24
Ricky
I just I had to for 245,000 like two days ago, I was like, Damn, I’m still growing.
00:49:29:28 – 00:49:33:26
Rod
I’m still at 106. I’m pathetic. But. But yeah, 240. That’s awesome.
00:49:33:28 – 00:49:38:00
Ricky
Yeah, yeah, yeah. And I’m about to hit 100,000 on YouTube.
00:49:38:04 – 00:49:40:05
Rod
Oh, okay. And, um, good for you.
00:49:40:05 – 00:49:44:09
Ricky
And may I was telling you, like, the freaks were like, I really, I.
00:49:44:11 – 00:49:56:20
Rod
We were talking before we started recording about haters and, you know, we talk, you know, because we get haters and, you know, you’re a slumlord or you’re just taking people’s money. Nobody should own more than one house. I’m like, Oh, for God, they.
00:49:56:20 – 00:50:02:20
Ricky
Really hate me because I’m out here saying, prices are going to keep going up. You better buy now right here on houses, you know?
00:50:02:27 – 00:50:04:11
Rod
So that’s the that’s the hit you get.
00:50:04:11 – 00:50:11:15
Ricky
Oh, they really hate me cause they’re like, I can’t I can’t afford, you know, like, I can’t even buy milk, you know, And you’re talking about buying a house.
00:50:11:15 – 00:50:29:25
Rod
But we you know, we talked about it sometimes I get sucked into it and I’ll try to kick somebody in the butt if they if they hate you. And when they hate it on TV is when I really got upset. But now I just block them and delete them. It’s like, good Lord. You know, it’s just it’s it’s and, you know, the thing about haters is they never have more than you do.
00:50:29:28 – 00:50:32:29
Rod
You know, They just they’re just entitled and or feel terrible.
00:50:32:29 – 00:50:38:11
Ricky
Yeah. Most people that talk normally talk about people that’s way ahead of them, right? Life.
00:50:38:13 – 00:50:48:14
Rod
You know. Yeah. So yeah. And you know, Tiffany would tell me just ignore them and sometimes I’d get sucked in and hate on them back for a minute and then delete and block them. But usually I.
00:50:48:14 – 00:50:56:26
Ricky
Just, I try to, I try to focus all my, my responding time on the positive comments, trying to show them while I’m.
00:50:57:01 – 00:50:57:22
Rod
Not makes a whole lot.
00:50:57:22 – 00:51:02:07
Ricky
Of you know Yeah but like you see those negative ones you’re like man.
00:51:02:09 – 00:51:07:18
Rod
Yeah yeah. You know Cardone says he loves it. He said they’ve made him wealthy because he gets all that hate.
00:51:07:18 – 00:51:10:12
Ricky
He probably has the most of anyone I’ve ever seen.
00:51:10:12 – 00:51:12:14
Rod
Right, Right. You know, And I think he just ignores it.
00:51:12:17 – 00:51:14:15
Ricky
Even the people that like him, I think, hey, you know.
00:51:14:22 – 00:51:15:26
Rod
Yeah, yeah, yeah, yeah, yeah.
00:51:15:26 – 00:51:16:22
Ricky
Like it just.
00:51:16:22 – 00:51:19:13
Rod
Yeah, No, it’s it’s. It’s heavy.
00:51:19:13 – 00:51:21:18
Ricky
Have you had him on twice? Yeah.
00:51:21:20 – 00:51:41:29
Rod
Yeah, yeah, yeah. He’s a funny guy and, you know, I don’t. I don’t, you know, I think he does. He does. He doesn’t do value add. He buys really high profile, very expensive assets and banks on rent growth. And I saw one of his performance and he had 10% a year for five years rent growth. I’m like, yeah, I don’t think so.
00:51:41:29 – 00:51:45:23
Ricky
And so it’s hard to predict that. I mean, you got to be more conservative.
00:51:45:25 – 00:52:03:07
Rod
In our year. Come on. You know, but, but, you know, uh, we’ll see. I mean, he’s smarter than I am. He’s got a jet and a helicopter, so. But, uh, yeah, um, I get a kick out of him, and I, like I said, I went to his growth, and I paid 20 grand to sit in the front row just because I like to be in the front row.
00:52:03:07 – 00:52:25:02
Rod
And it was a lot of fun. And, you know, it was fun to practically high five Brady Tom Brady when he walked by and so on and so forth. But um, but anyway, you know, he’s a he’s a, he’s a funny guy. I really enjoy talking to him. I pissed him off the last time we interviewed though, cause we got a call from a, a vet because I took questions from, from listeners.
00:52:25:05 – 00:52:35:21
Rod
And the vets say, like, should I use my VA to buy a four plex? And I’m like, Hell, yeah, because it’s no money down. And he’s like, No, buy a 16 unit because you know, he’s ten X everything my.
00:52:35:21 – 00:52:38:13
Ricky
Guinea by 16, you know with the VA. No, no.
00:52:38:13 – 00:52:50:04
Rod
You mean like no no but that was just him, you know, he’s like, go big or go big or go home. But, but I’m like, Grant, dude, it’s no money down. If that gets him started, do it. It pissed him off a little. I could see it on his face, but.
00:52:50:04 – 00:52:52:24
Ricky
I mean, you can’t even buy a 16. You can only buy. No, no, no.
00:52:52:24 – 00:52:58:28
Rod
But. But in his head, it’s like, you know, just don’t even bother with the four unit unit. Anyways, we got to start somewhere.
00:52:58:28 – 00:53:00:02
Ricky
Thank you. I mean, that’s the thing.
00:53:00:02 – 00:53:10:19
Rod
I see it in my students all the time. It’s like the law of the first deal. It’s the scariest. It takes the longest, it’s the most stressful, and they get one. Next thing I know, they have three. I’m like, What the hell just happened? Yeah, And, and so, you know.
00:53:10:20 – 00:53:23:07
Ricky
It’s like, like in today’s world, you know, the, you know, the syndication thing, you know, it’s become a trending topic. And so you got all these really inexperienced.
00:53:23:10 – 00:53:24:28
Rod
People and they’re in and a lot of them are.
00:53:24:28 – 00:53:32:17
Ricky
In trouble. And they’ve done these deals at two caps and stuff. And now interest rates. And, you know, it’s not not a pretty sight.
00:53:32:17 – 00:54:01:17
Rod
And uh, even like I said, even very sophisticated world class operators that I was super impressed with, like the one I met at the growth con, really impressive guy. And like I said, it was just in RealPage had to give one back to foreclosure and, and in you know sad to see because you know but a lot of and I’ve got a couple of bridge loans right now with my ex partner and we’re having we’re having weekly meetings because he’s going to have to suck it up and and deal with it.
00:54:01:17 – 00:54:24:08
Rod
Um, but, uh, you know, it’s, it’s, it’s, it’s, it’s very painful on these assets especially. See assets that are struggling. Yeah. You know, and I’ll tell you I, I won’t buy a asset right now or C minus for sure. Maybe, maybe a C, C plus. I would consider but because that demographics getting killed, I mean, I went to the grocery store, I’m like, are you freaking?
00:54:24:14 – 00:54:40:12
Rod
Because I I’m recently kind of single. We shifted our relationship to a friendship, and so I’m buying my own groceries and I’m like, Holy crap, I had no idea how expensive stuff is now and gas insane, you know? I don’t know how people afford it, You know, people that just go paycheck to paycheck.
00:54:40:13 – 00:54:41:05
Ricky
Yeah. So.
00:54:41:08 – 00:55:00:19
Rod
You know, I’m thinking that I’m not thinking. I’m certain that the D for sure and the C minus stuff, those those people are in trouble. I mean, yeah, I, I saw an article about six, eight months ago that 20 million families are behind in their utility bills. Um, you know, and, and, and a lot of people are paying everyday expenses with credit cards.
00:55:00:26 – 00:55:03:22
Rod
What’s wrong with that picture? Right. Yeah. So I don’t know.
00:55:03:28 – 00:55:17:05
Ricky
Well, I think it’s the band aid I was talking about. They keep putting on the economy right now. This is this is a result of that. It’s just kicking the can down the road. How long can you kick the can down the road? You know? Right. I think we’re kind of in a we’ve been in an artificial bull market.
00:55:17:05 – 00:55:34:29
Rod
Well, that’s that’s why in a while I’m worried about a major reckoning. Yeah, because of that. We’ll see. You know, they may go to a digital currency. May they do. Who knows what they’ll do to try to manipulate things if it gets really ugly. But but yeah, it’s it’s crazy times we’re in right now between that and the politics and everything else.
00:55:34:29 – 00:55:50:24
Ricky
And I think I think for people listening, you know, that might hear that and be like, Oh God, this is scary. Scary to think about and stuff like that. If you’ve never been through a massive shift or a massive, like economic, you know, downturn and everything, it can be scary.
00:55:50:26 – 00:55:53:05
Rod
No, it’s going to be scary. But the opportunity.
00:55:53:05 – 00:56:09:19
Ricky
That’s what I’m saying. If if it’s your first go around, then just sit back and enjoy the show. Right. And kind of just keep your head above water and kind of learn from from what happens if you were if you were if you went through eight. Right. Then you’re you’re ready to roll.
00:56:09:20 – 00:56:24:02
Rod
Oh, yeah. I’m sorry. I got crushed by that wave. I’m surfing. Yeah, baby. Yeah, me too. Yeah. You know, and I, you know, I told people in my boot camp, I’m like, if there were ever a time to get up to speed, it’s right frickin now because it’s coming, You know they’re coming. The deals are coming and there’s a lot of money.
00:56:24:02 – 00:56:35:16
Rod
Sit in the sidelines waiting. But, you know, the the the sweet spot probably for newbies is going to be under 50 units that the money in the sidelines probably has no interest in. So but those there’s a lot of deals in that price.
00:56:35:21 – 00:56:47:12
Ricky
In the housing market. You know back in the forties there was about a five year double digit appreciation really run and everybody said it’s going to crash. Prices are up too high on affordability, the whole nine yards.
00:56:47:13 – 00:56:50:28
Rod
This is after the baby boomers bought all those houses back after World War Two.
00:56:50:28 – 00:57:16:06
Ricky
Yeah, exactly. Exactly. It’s a four year, four or five year double digit, five years of double digit, ten or more percent increase in national home prices. And guess what? Home prices didn’t go down any time after that. We fast forward to the late seventies when mortgage rates went up to 19%. Um, you know, we had there were there were six, uh, big years, four were double digit, right?
00:57:16:06 – 00:57:31:24
Ricky
Two were almost double digit six. It was a run of six years that next year after that last double digit year, 7%, then five, then four, then ten again and eight. I mean even if you bought at the peak.
00:57:31:26 – 00:57:35:15
Rod
There were dips though, but every year added up.
00:57:35:18 – 00:57:56:13
Ricky
That’s what I’m telling you every single year. See, this is what people don’t realize until until these headlines start happening and people start really looking at it with a magnifying glass is that every year the prices go down. Sure. If you look at national home prices, look at a chart right. Look in your market. Look anywhere, local, national, whatever you see, it goes.
00:57:56:18 – 00:57:59:26
Ricky
Prices go up and down every single year.
00:57:59:26 – 00:58:00:16
Rod
They trend up.
00:58:00:22 – 00:58:01:15
Ricky
They trend up.
00:58:01:19 – 00:58:10:16
Rod
Let me give you an example of kind of a cool example of a you know, I had 500 houses in Denver at one time that I rented long term. Boy, I wish I had those now, man. They’d be free and cool.
00:58:10:16 – 00:58:11:25
Ricky
They’d be worth a lot.
00:58:11:25 – 00:58:32:20
Rod
I would be, bottom line, netting a million a month right now. But anyway, woulda, coulda should’ve. But, but, but there was a house on 30th and federal in Denver that I bought for 56,000 through a garage up and sold it for 76,000. Okay, I flipped it then. Then the market crashed. Okay. I bought that same house back for 18,000.
00:58:32:22 – 00:58:49:23
Rod
Okay, Same house, 76 to 18. I kept it for a few years and I sold it for 160. Okay. Mm. The area gentrified. It’s worth a million now, right? I mean that’s just, that’s, that’s, that’s just one house that I was aware of. There are a few of them that I bought back like that I sold one for 56, bought it back for 12.
00:58:49:26 – 00:58:54:20
Rod
But, but they still continually trend up. I mean that’s those are anomalies.
00:58:54:20 – 00:59:15:13
Ricky
But my point is, is that that even if you you bought something at the peak of one of the even in oh eight back in 2004 and five if you bought at the peak of oh five, prices peaked out big in about five. You’re still up right now. Yeah. There it go down that that was that was the that was the worst real estate crash ever.
00:59:15:13 – 00:59:20:13
Ricky
Prices down 50% but you’re still up right now if you took up whatever you had long term.
00:59:20:15 – 00:59:22:14
Rod
Um yeah no a great agree.
00:59:22:14 – 00:59:43:27
Ricky
Completely now this this housing crash this is a crash we’re going to have about the same amount of transactions this year. We had no a really Yeah we’re in 4.3 million is what we’re looking at. Existing home sales and we had 4.12 million in oh eight. Right. It’s identical. Right? It’s pretty much the same. This a crash I’ll say crash on social and people like what?
00:59:43:27 – 01:00:09:19
Ricky
Crash. And then they’re talking smack because they’re thinking prices. I’m not talking about prices. Transactions but this crash because that’s what this is is not it’s more comparable to the late seventies an interesting not 0808 was a mortgage meltdown subprime lending. Right. You know, this is solid lending. 45% of houses are owned free and clear. Really? Okay. Yeah.
01:00:09:22 – 01:00:32:04
Ricky
And, you know, 30% of all sales now are cash interest, right? Which is. Oh, I didn’t know. Yeah. I mean, well, think about it. I mean, would you want to pay 8% or you pay cash? Right, Let’s pay cash. Um, we’re just in a very super healthy market. So back in the seventies, you know, inflation went up. You know, when inflation went up to 9% last year, they said it’s the highest in 40 years.
01:00:32:06 – 01:00:58:23
Ricky
When was that? Yeah. Seventies. Right. That everything because compared the delinquencies right now for four homes is the lowest it’s been since 79 which is exactly when all this is happening. The back then people didn’t want to, you know, upgrade to something else or whatever because they didn’t want to double their mortgage rate. Same as now. It’s all just eerily similar to back then.
01:00:58:25 – 01:00:59:23
Ricky
Yeah, we had a.
01:00:59:23 – 01:01:25:12
Rod
Crash back then. And, you know, when I bought all those houses in Denver and I mean, I was buying houses in Denver from, Oh, this is crazy. Back then, FHA, FHA loans were going south and an investor could buy a FHA foreclosure for $500 down. Wow. And they financed it. And and VA was doing 5% down. And I was a broker and I got a 6% commission.
01:01:25:15 – 01:01:39:11
Rod
So I’m like, hey, buy this frickin house. I’ll throw the commission in. And I bought tons of houses that way too, with partners 5050. Know, it was incredible back then. I mean, of course, you know, be fun if that ever happened again, but not likely.
01:01:39:11 – 01:01:59:26
Ricky
But but yeah well my point with this is, is back then people said, oh, it’s going to crash and stuff like that. As far as prices go. Yeah. But they never did. Right. They, they slowed down appreciation. Right. But they still were clicking along at a good four or 5% a year and never had a negative year until the early nineties.
01:01:59:29 – 01:02:22:18
Ricky
There was a slight little dip then. Um, but when I’m comparing Now’s housing market to the seventies. So you know, my question is even if we do see this you know Armageddon of the of the economy right. Um what does that going to do to home prices? Will it actually affect home prices because well.
01:02:22:20 – 01:02:23:24
Rod
Temporarily it will.
01:02:23:24 – 01:02:24:19
Ricky
Will back the.
01:02:24:19 – 01:02:25:09
Rod
Long term.
01:02:25:09 – 01:02:43:10
Ricky
Back Well, every year they temporarily get affected. Right? Right. Okay. Um, back back then, I mean, I had a I had some I had a good one. Threw me off there for a second. I’m sorry, but, uh. Oh, man.
01:02:43:12 – 01:02:51:20
Rod
Well, here’s the thing, though. Yes, they they go back every year, but if we have an Armageddon, they’re going to go way down like they didn’t know a nine, but they’ll come back well after a few years.
01:02:51:20 – 01:02:57:18
Ricky
Well, when you got. Well, okay, but here’s the difference. Back then there were 2 to 3 million listings at any given time.
01:02:57:18 – 01:02:58:14
Rod
Okay.
01:02:58:16 – 01:03:00:01
Ricky
You got a half a million right now?
01:03:00:02 – 01:03:00:21
Rod
No shit.
01:03:00:22 – 01:03:01:14
Ricky
Half a million.
01:03:01:21 – 01:03:02:04
Rod
Wow.
01:03:02:11 – 01:03:14:14
Ricky
In the eighties. Wow. In the eighties, when there were way less population and way less houses that even existed. Okay, There were two to 2 to 3 million active listings at any given time.
01:03:14:17 – 01:03:15:28
Rod
No. Good. Okay.
01:03:16:01 – 01:03:18:02
Ricky
It never got below 2 million. And right in the.
01:03:18:03 – 01:03:20:09
Rod
In the 8 million in the eighties.
01:03:20:12 – 01:03:42:18
Ricky
Okay. And right now we’re at between five and 600,000 in the whole country for sale. Okay. So so with interest rates going up to seven and a half percent, where we are at the place where only people that have to buy and sell are doing deals. Right. You’re not buying you’re not doing this because you want to. Even the people that want to aren’t doing it.
01:03:42:18 – 01:04:07:22
Ricky
It’s only if you have to. Okay. And investors. Right. Right. So if the market dips if if if Armageddon, the economic Armageddon happens, then our people that have to buy and sell, I’m not going to know they’re still going to because they have to write. And so with with the with the lack of inventory and the inventory is going to go from bad to worse.
01:04:07:22 – 01:04:11:20
Ricky
And you might think, well, then we’re going to see foreclosures and then we’re going to see.
01:04:11:23 – 01:04:16:20
Rod
Uh, I think so if, if the market really gets ugly, I mean, just economically in general.
01:04:16:22 – 01:04:35:24
Ricky
108 we had 4 million listings, you know, it was 2 to 3 in the eighties. But then in oh eight, when the crash happened, you know, we had 4 million. So it would have to be some really wild situation to get us from a half 1000000 to 4 million. Yeah. To create this scenario. Right.
01:04:35:26 – 01:04:56:24
Rod
I did hear though, Ricky is you know, I had a litigation support company and so we helped people in foreclosure. I built law firms in five states. We’d stop the foreclosure with litigation, and then we’d help them modify their loans, help thousands of families save their homes. But I sold that business a few years ago, and I guess there’s a pretty big backlog of foreclosures right now.
01:04:56:26 – 01:05:15:07
Rod
And so, you know, who knows, you know, how big that. And and, you know, chances are those houses will be able to be sold because they still have equity in them, because their prices have gone up so much. But there’s a bunch of foreclosures still coming down the pike because they had more that moratorium. And it takes mortgage companies a long time to get their paperwork in order and get these more.
01:05:15:10 – 01:05:16:01
Rod
We need them.
01:05:16:06 – 01:05:38:12
Ricky
Yeah, we got we got more 33 year olds than we’ve ever than we’ve seen in two decades. Fair enough. We’ve got home owners who are dying to upgrade because they need an extra bedroom. I mean, one guy that that a banker, he bought something in 2020 their dream home. But since then they had they had twins. They already had two kids, but they they had twins since then, unexpected.
01:05:38:15 – 01:05:59:19
Ricky
And now they’re bigger house. They need one more room and they’re like, we want to really bad. I mean, there’s so many stories like this right now. How many how many more millionaires do you think there are now than there was an. Okay. Sure. Right. And how many of those learned from oh eight and are setting themselves up to take advantage of the next any downturn?
01:05:59:21 – 01:06:21:14
Ricky
Right. There’s so many more people that are prepared for if Armageddon happens to take advantage of of whatever happens in the housing market. There’s nowhere near the inventory that we were back then or any war. I mean, if we had an influx of inventory, there’s that. If if the inventory did affect prices, people would come out the woodworks.
01:06:21:15 – 01:06:24:01
Rod
Yeah, you know, I think you could be right. Yeah, I think it.
01:06:24:01 – 01:06:38:22
Ricky
Could be so. So I think even if we see Armageddon, I don’t see it affecting home prices too much, that we will see a little ebb and flow. Like last year, we saw a slight correction during the same time of year. We’re not covered when interest rates went.
01:06:38:27 – 01:06:39:13
Rod
Oh, gotcha.
01:06:39:14 – 01:06:56:07
Ricky
Which during the normal time of year in the fall when prices go down anyway. Okay, it went down a little more than normal. Oh, okay. Little more than normal. But it bounced right back and went back to all time highs. I mean, we’re down to the bottom of the barrel the way I see it.
01:06:56:10 – 01:07:00:00
Rod
For demand based on the inventory. I think you’re absolutely right. There’s that that’s well.
01:07:00:00 – 01:07:11:22
Ricky
Listen, back in oh eight, there were 4 million transactions and now we’re 4 million. That was. How much worse do you think it can get? Okay. You think it worse than oh eight as far as demand? Yeah. The number of people that are buying homes.
01:07:11:22 – 01:07:12:17
Rod
I doubt it.
01:07:12:19 – 01:07:37:12
Ricky
There’s no way that when it gets down to the people that need to, there’s there’s nowhere else to go. You can’t go any lower. Could it go down a 3.9 million, maybe 3.8 maybe. But we’re down somewhere close to where we’re going to have that many transactions. Right. So when you’re down as low as demand can go and you have no inventory, even if inventory, you know, spikes up a little bit, we’re you know, we’re.
01:07:37:15 – 01:07:50:25
Rod
I don’t think the inventory is going to spike because I’ll tell you, I know there’s some statistics out there and I can’t I don’t want to speak out of turn, but I think we’re like in the next couple of years, we’re 2 million short in housing units in general, not just not just housing.
01:07:50:25 – 01:07:51:09
Ricky
Wise.
01:07:51:09 – 01:07:52:13
Rod
Places to live.
01:07:52:16 – 01:07:55:06
Ricky
In. Why is that? Where are the 2 million people coming from? I think it’s.
01:07:55:06 – 01:07:57:06
Rod
Population, I don’t know, 33.
01:07:57:06 – 01:07:57:20
Ricky
Year olds.
01:07:57:27 – 01:07:58:05
Rod
Oh, you.
01:07:58:05 – 01:08:18:12
Ricky
Think 34 year olds. All right. 35 year olds. 36 year olds, right. It’s family formations. It’s people that are moving out of their mom’s house or their they’ve got a roommate and they’re tired of living with somebody. Right. Or maybe they’re renting and they are tired of rent going up every year and they want a fixed payment and they want to build equity.
01:08:18:12 – 01:08:19:07
Ricky
Yeah, right.
01:08:19:09 – 01:08:38:11
Rod
So, you know, I enjoy talking to agents and brokers as well. And my whole push with them is, you know, if you’re just going to sell other people’s property, you’re only as good as your last sale. Okay? And but if you want to build cash flow, you invest in real estate. You don’t just sell real estate. I know you’re doing that.
01:08:38:11 – 01:08:51:06
Rod
You’re obviously I mean, you’ve you’ve bought a bunch of real estate and you’re developing and you’re buying. Do you agree that framework where, you know, you make the money selling the real estate, but then you use that money to go buy assets, the cash flow? Yes.
01:08:51:09 – 01:08:54:11
Ricky
Yeah. So most agents don’t own real estate, Right?
01:08:54:16 – 01:08:57:10
Rod
Right. Which is crazy. And they’re in the perfect position to find the best.
01:08:57:10 – 01:09:19:13
Ricky
Yeah. Yeah. Well, they’re so focused on, you know, most of them come from a job or. And they’re just trying be successful. They’re just trying to make money. Um, and, and it’s kind of a catch 22 because most agents Horizon is on to be the best in the in the area or to make a million bucks a year or something or I think past that you know that’s kind of all they’re focused on.
01:09:19:15 – 01:09:28:24
Ricky
Yeah. But they really kind of need to think past that. And what am I going to do to get out of this? Because this is a rat.
01:09:28:29 – 01:09:29:25
Rod
It’s a job. It’s a.
01:09:29:27 – 01:09:49:20
Ricky
It is. It is. But that could also be a distraction to you becoming the best in the market, what you need to be or make it a million bucks a year because you need to make that so that you can invest in real estate. So it’s it’s a very fine line, really. I was I was in the same boat where I was just trying to make a million bucks a year as an agent.
01:09:49:22 – 01:10:01:20
Ricky
I mean, I bought a few properties just because I thought, let me buy a few properties. But I wasn’t like all in and I wasn’t thinking, Oh, where’s my next real estate deal? Where am I going to buy my next thing? I was focused on how do I get another listing?
01:10:01:21 – 01:10:10:15
Rod
Yeah, well, I will tell you, I think I think, you know, I tell people grind for a few years, like most people. Won’t you live the rest of your life like most people can’t, Right. Well well.
01:10:10:18 – 01:10:14:21
Ricky
Most agents say I love sales. Somebody sells forever. I said it to.
01:10:14:24 – 01:10:15:04
Rod
Until.
01:10:15:04 – 01:10:33:23
Ricky
The day that you don’t. When your clients call on you and you’re cringing right on the caller I.D.. Oh, there’s this million dollar house. And when you go look at it, when you don’t want to go see $1,000,000 house a list, you know, that’s when you know that you should have put something in place. Right. So I watched two agents literally die making calls.
01:10:33:24 – 01:10:58:27
Ricky
No kidding. Yeah, they they they they died from old age and they were legends. Just incredible people. And they, you know, they they knew they were dying, right? They got the call. We got the call. And the next day, there they are in the office making calls and like, what’s going on? Well, there. And they’re calling for sale by owners and expires trying to make as much as they can leave their spouse as much as they can before they pass away.
01:10:58:27 – 01:11:18:11
Ricky
They make calls till three days before they die where they can’t get out of bed and pass away. Making calls calling for sale by owners and expired. Good. And that and that was such an eye opening experience. Me Yeah. You know, I that’s when I was like, I’m not going to live like this. And that’s when I started the coaching stuff, right?
01:11:18:11 – 01:11:37:26
Ricky
I was like, I got to have another let me try to build this other business. Um, sure. And then, you know, here recently, you know, I’ve, I’ve thought about a hundred houses with two other partners and I’m like, jeez, if we to cap the best 30 of those. Oh my gosh, wait a minute. So now when we flip I’m doing one right now that we that we bought together.
01:11:37:26 – 01:11:55:26
Ricky
Yeah. And you know we go in thirds and we fix it up and flip on Well I’m I’m buying the other two guys and actually one of the other guys So are you going to keep it. Yeah, yeah, yeah. Because it fits my buy box. Perfect. For what? For what I’m for what I’m buying stuff. But to your point, right, um, every age it needs to needs to.
01:11:55:27 – 01:11:58:27
Rod
Start being an annuity. You got to be thinking right?
01:11:59:00 – 01:12:18:19
Ricky
I need to buy passive income because you just have a job, a really high paying job, but it’s still a job that you have to go to every day. And you literally have the opportunity right there in the palm of your hand to build passive income where later on you can still do sales, but not because you have to.
01:12:18:21 – 01:12:23:20
Ricky
And then eventually you won’t want to and you’ll be in a position where you can just walk away.
01:12:23:21 – 01:12:50:14
Rod
Well, even those of you listening that don’t do real estate, that have a job, you know, and maybe even a high income job, you have a golden handcuffs. You’ve got a great big high paying W-2 job. You need to be investing in real estate, either passively, you know, text the word partner. 272, three, four, five. You want to invest passively with me or actively, you know, get your butt to one of my bootcamps and learn how to do this actively because, you know, otherwise every year you’re just going to go back to work January 1st.
01:12:50:14 – 01:12:51:18
Ricky
You don’t have to do this.
01:12:51:18 – 01:12:52:06
Rod
Yeah, yeah.
01:12:52:08 – 01:12:55:00
Ricky
I this like this podcast. Oh I don’t. I do this because I love it.
01:12:55:00 – 01:13:09:19
Rod
Yeah I my first episodes, you know, I just want to tell people about what happened to me in 2008 nine and you know how I really I’m a proponent for multifamily single family just because of the way what happened to me and.
01:13:09:22 – 01:13:10:20
Ricky
What did happen.
01:13:10:27 – 01:13:28:18
Rod
So I had 800 houses along the Gulf Coast of Florida here from Newport Richey, all the way down to Bonita Springs. But I was spread out over 2 hours in each direction. So logistically, it wasn’t the greatest move. But I also had some apartment complexes and I was only at a 30% loan to value my whole portfolio and I still crashed and burned.
01:13:28:18 – 01:13:44:27
Rod
And here’s why. You know, if I had to send a maintenance guy to one of my apartment complexes, we stockpile all the parts. They were in and out in an hour. If I had to send you a house that’s an hour and a half away. Every house is different. They got to go see what’s wrong. Go find a Home Depot, Lowe’s, where we have an account and it’s called day.
01:13:44:29 – 01:14:06:18
Rod
And these were C class houses older, a tougher demographic, tons of maintenance. So I never really cash flowed even a 30% loan to value and never cash flow. Right. You know and of course has no state income tax higher property taxes. Okay. I had properties in wind and flood zones, higher insurance, all which impacts cash flow. Yeah. And you know, and then when it all imploded.
01:14:06:18 – 01:14:22:10
Rod
Oh, and the last thing was I didn’t pay attention to tenant demographics back then. They had a lot of contractors, plumbers, electricians, drywall, painters, roofers that had good credit, paid a deposit. I assumed everything was great. Well, they had no work. So. So in oh eight and nine, they they couldn’t pay the rent. And so it just crashed and burned.
01:14:22:10 – 01:14:43:11
Rod
I went to some crazy my portfolio went upside down. It actually dropped 70, 70, a little over 70%. That’s how much it crashed here. But but that’s why I crashed and burned. But my multifamily through all that pulled back. About 11% could have easily survived like value. No, no, no, no gross income and could have easily survived if I hadn’t crossed collateralized.
01:14:43:15 – 01:15:01:17
Rod
Yeah, I was brilliant with packages houses. Right. So I lost it all. But, you know, I started my podcast, what, seven, eight years ago just to say, hey, if you’re going to buy and hold, for God’s sakes, you know, look at multifamily, don’t yeah, don’t just do single family. And you know, I used to say my early, early episodes of my podcast, I’ll never sell you anything because I never plan to.
01:15:01:17 – 01:15:18:21
Rod
I just want to add value and I’m a liar because I sell everything. But, you know, I wrote that I wrote this book, you know, how to create lifetime cash flow through multifamily properties. And I just I still give it away. I give away tens of thousands of copies, of it. And, you know, and then now I now I do coaching and courses.
01:15:18:21 – 01:15:35:01
Rod
But yeah, I mean, I frickin love it and I don’t you know it’s it’s not about the money for me I love it. I’m the lowest price by far out of anybody that does this and half price and in most cases for my coaching and my bootcamp was $200 for three days without a big sales pitch.
01:15:35:01 – 01:15:35:16
Ricky
Yeah.
01:15:35:19 – 01:15:52:12
Rod
Brainer, right? I mean, if you go to my social media and you see what people said about it, you know, they’re raving about, they’re like, they couldn’t believe they got all that value. Yeah, but you know, like you, you do your stuff for free. I, I do my stuff for practically free and, and you know, power.
01:15:52:18 – 01:16:09:05
Ricky
I did a boot camp, I did a workshop. I charge 700 bucks for it last year, you know, had 100 people. Yeah. Um, and people came in from Gulf Shores from all over, you know? I mean, I had to charge because the venue. Oh, sure. Texas town. And, you know, it’s expensive, man.
01:16:09:07 – 01:16:18:17
Rod
But I had 1000 people, you know, so I broke even on the venue and stuff. Yeah, but, and we did some VIP where they had dinner and they paid more, and so I broke even.
01:16:18:20 – 01:16:32:22
Ricky
So before we go, because we’re. We’ll get limited time. Right. You, you saw, you made the mistake with the single family back then. Now after all of that, knowing what you know now, do you feel like you could build the single family portfolio back a different way? That’s more.
01:16:32:25 – 01:16:51:01
Rod
Yeah, maybe. Maybe like you’re doing if you’ve got them in a subdivision, they’re brand new. And but I would the big thing that I wouldn’t do it again. No, because I like multifamily. I’d rather one transaction to get 50 units and buy 50 houses one by one scale. It’s easier and every house has its own insurance, has its own taxes.
01:16:51:08 – 01:16:56:28
Rod
So from a cash flow standpoint, I like multifamily better, A whole lot of reasons. I like it better, but but we don’t have to debate that.
01:16:56:28 – 01:16:59:14
Ricky
Well, that’s why I’m building the 30. Well, that’s right, 48.
01:16:59:14 – 01:17:02:05
Rod
You said you’re thinking about shifting to syndication.
01:17:02:07 – 01:17:09:11
Ricky
My whole thing is I multifamily like that’s where I’m going. I’m buying these single families for a lot of one. Yeah, it’s fine.
01:17:09:15 – 01:17:10:21
Rod
I would do it for fun.
01:17:10:22 – 01:17:22:05
Ricky
Yeah, I would do it for. I’m doing it because I’m bored and I got cash sitting there and I need to do so I I’m just doing it just to get some cash flow until these motherlode come through. Right. You know.
01:17:22:05 – 01:17:38:14
Rod
And I think they’re coming. Yeah, Well, well, listen, brother, I appreciate you coming down here. It’s great to meet you. I mean, I know we both spoke at the Wealth Con Ryan Panetta’s event and kind of crossed paths there. And, you know, it’s kind of a small world we’re in. You know, a lot of lot of speakers that that bounce around.
01:17:38:14 – 01:17:51:11
Rod
Bradley was there and some people I really enjoy. But but Andy Elliott just real rock stars in their respective spaces and it was a lot of fun but it’s a great to finally meet you and and and I appreciate you coming down.
01:17:51:11 – 01:17:52:07
Ricky
That’s for having me, man.
01:17:52:08 – 01:17:53:20
Rod
Enjoyed it. Thank you.
