411 | 3 Concepts Most Rental Property Investors Don't Understand (That Makes Great Investors Wealthy)

Our latest data shows this community has earned over $100M worth of profit through real estate, including 17 investors generating  $1M+ in profit, but most investors still struggle understanding how this is happening.

That's why we distilled the 3 most important concepts passive rental property investors need to understand to build the type of wealth that our community members have built.

Join Gregg Cohen, co-founder of JWB Real Estate Capital, and Not Your Average Investor Show host, Pablo Gonzalez, for a show where you'll walk away knowing:

- Why most rental properties investors are going about their research the wrong way
- How to understand returns on rental properties correctly
- What makes the biggest impact on the wealth you'll create through rental property investing
- and more!

In just one hour, you will gain enough understanding to, not just feel comfortable in any investing conversation, but have an edge when it comes to real estate investing.

Join our real estate investor community LIVE: 
https://jwbrealestatecapital.com/nyai/

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Transcript

Pablo Gonzalez: 0:00

today. we're in the middle of like a really important moment. We know that rates are about to go down. We've been screaming from the Hilltops about how this is the moment to buy. There's an Epic JWB offer on the table for folks to get tomorrow's rates today. So we think that the most opportune topic is help you truly fundamentally understand the value of rental properties, but not just the average way, be not your average way, the way that investors that have created real wealth in this community understand it today to help you make that decision. Hey, welcome, welcome, welcome, Welcome everybody to the weekly edition of the not your average investor show I'm your host Pablo Gonzalez. One of me as always today on zoom because I am traveling. I'm in Austin, Texas, but in the studio is the face that we all love to see. He is the man that we affectionately call GC because he's got the genius concepts because he knows how to generate cashflow because he's a great co host. And because his name is Greg Cohen. Say hello, Greg. Hello,

Gregg Cohen: 2:07

everybody. Great to be with you today.

Pablo Gonzalez: 2:10

GC, how is Jacksonville, Florida today? I'm in like 104 degree, super dry Austin weather. It's a little bit different than you for, isn't it?

Gregg Cohen: 2:17

I mean, have you seen what the high temperatures are in Jacksonville for like the next 10 days?

Pablo Gonzalez: 2:22

I haven't because I'm stuck in 104 degree Texas weather.

Gregg Cohen: 2:24

Yeah. Well, it doesn't start with a hundred. It doesn't start with a niner. We're in the eighties, baby. We got highs in the eighties. Jacksonville. Eighties. Eighties. One of the

Pablo Gonzalez: 2:34

all time great eras.

Gregg Cohen: 2:35

I know. It's like when you there you go, It's like when you go from the hundreds to the nineties, you're like, oh my gosh, this is amazing. Yeah. When you go from the nineties to the eighties, you're like, this is the best thing ever. Yeah. And then when we get to the seventies, that's, that's when we're really cooking with gas.

Pablo Gonzalez: 2:50

Yeah. It's kind of like when Toronto people in like the spring, it's like 60 and they're like showing up in short or like 50s. It's like, they're like in shorts and a t shirt for us dropping into the eighties. It starts to get nice. But yeah, man, I agree. I don't know if it's a storm that rolled through or whatever it is, but like everything has like, everything's starting to cool down in that area. But right now I'm in a sauna, but it doesn't matter about me GC because it's time for our traditional welcoming of our not your average official community, which is called what my friend. The roll call, baby. The roll call, baby. We got Joanna kicking us off in the chat. She's our community manager. Reach out to her for anything you need. But number one up is Christopher Lee from Fernandina Beach with a hello all. We got our leadoff hitter batting second today, Mr. John Henning. We got our regulars, Gary and Rosalyn Riley, wishing everybody a good morning from Marietta, California. We regard

Gregg Cohen: 3:39

you.

Pablo Gonzalez: 3:39

We got the Shah man in the house. Nadeem Shah with his trademark. Good morning. Good afternoon from the West coast. We've got a ring master in the house. I drew Barnhill. We got that early bird checking in from Columbus, Ohio, Dean Curry. We got the fairy godmother of the natural average investor show community, greeting us from Monterey. Jen Wilson. Who else we got in here? We got all right. Yeah. Phone. Say I live from say in London empire. Of California. We got Mark Sauer checking in from Cincinnati, Ohio. We got my lady Jag Chata checking in today. Good to see. I think, I think Jag is in San Diego if I'm not wrong. Ed Lowry is back from Jacksonville, a local. We got the MVP. Everybody knows him. Lee Bishop checking in for everybody. Mr. Helpfulness in the chat as always. Jag, am I buying in Austin? No, I'm not. I'm not that rich. We got the. First family of the natural average investor show the patriarch and the matriarch, Ken and Carolyn Malin, David Blattner, Dave B checking in from Massachusetts. Welcome back, Dave. Gerald Schwartz, Gerald from Harold. We Harold, we Harold you. Welcome. Good to have you. We got Misty and Troy Johnson, legends of the show. out of Denver, California, the ninth most attended shows last year. They hold that record squeezing into that top tad the Johnson's. Oh, now we got, now we got like a weather roll call here. Dean Curry's got a 67 degrees in Columbus, David Blanner, 66 in Massachusetts. Not too shabby. Charity Graham checking in saying hello everybody. Good to have you back charity. Transcribed by https: otter. ai Eve's Richard Dole from Maryland. Good to have you back in here. My friend Eve's we got a, not your average guest. If you check in from the text reminders, I don't know your name. So you got to give me some context in there. But we're happy to have you GC, what do you think of this topic that I've, that I've proposed? Are you excited to hear from the mind of Pablo? Everything that I have learned in the five years of what makes us special. Is this something that you're looking forward to?

Gregg Cohen: 5:31

I mean, you think we can fit all that into an hour show, Pablo? I mean, we can't take everything that you've learned in your mind. Your mind is ever growing and expansive.

Pablo Gonzalez: 5:39

You know how they say, I would have written you a longer letter, but I didn't have the time. Well, I've taken my time to compress everything into three and like a quarter topics. Oh, Celia Carmo from Virginia checking in. That's a new name. New name. Welcome to the show. All right. Welcome to the party. Hope you hope you make it here. So Celia, Now that we, now that we are getting into this topic first, you see, we got some breaking news. Do you see what's going on? I heard some eye popping numbers. You want to share with people?

Gregg Cohen: 6:08

We do. We do. We have some really fun stuff to share today. So I'm gonna hit you guys with a couple of just quick stats that you may not know and may put a smile on your face. First of all, for all of you, JWB clients, you know, that number, that amount of views, rent that we pay out rent collect that we pay out every single month continues to grow and grow and grow. And for July, we paid out 5, 365, 513. 66 in rental income. Think of this as almost like dividends for all of you as rental property. Owners that is going to your financial goals, that is going to make send your kids to college, that is going to contribute to charity, that is going to build a better retirement account so something we can all really get excited about. That's for 1, 784 clients in July. We're able to take part in that. So I got that quick stat.

Pablo Gonzalez: 7:06

Okay. I just got to pause you on that set 5, 365, 513 dollars and 66 cents. The precision is staggering, but the number is crazy, right? This is not, this is not a, a yearly income number for JWB. This is a monthly. Distribution to rental property owners. This is like you said, a dividend. You are giving out 5 million plus a month in cashflow. This is why they call you GC because you generate cashflow, buddy.

Gregg Cohen: 7:41

Here we go. Well, it's a, it's a credit to all of those investors who made decisions that many times people look from the outside. They don't think that they're we'll call it, we'll call them not your average decisions. We'll call them decisions that might differ from what the status quo is. And guess what? Building a retirement account based on rental property investing is different. So I applaud all of those investors who, Many of you are on the show right now. Maybe many of you started investing by listening to this show. So I applaud all of you for being here, investing in your education. And then thank you for your trust. You know, we get to serve over 1, 700 clients now that come to us from 49 states, 13 countries. And, you know, we don't get to meet all of you face to face. Sometimes we do. Many times we don't. And so thank you for the trust that you put in to this relationship and us. Uh, having the opportunity to serve you all.

Pablo Gonzalez: 8:30

Love it, man. Love it. You know, just to, just to help a brother out there's another eye popping stat that you populated on, on my radar, which is about home press appreciation in Jacksonville. Did you say you want to share that one?

Gregg Cohen: 8:42

Yeah, absolutely. You know, when I was in the lab prior to last week's show, which was the quarterly real estate market update, I'm finding, I'm finding stats, I'm finding things and I'm putting the presentation together. Not all of them make it. Yeah. You know, past the cutting room floor there. So this is a stat that I did not share in the real estate market update, but it's really impactful. You know, many times when I would share that I started to invest in 2006 and 2007, and my business partners and I bought about 40 rental properties at that time, many people looked at me and still look at me and say, wow, That was terrible. I can't believe that you started at such, such a bad time. And while it was certainly interesting to invest in that time and see market values go down, what I quickly point out to people is, listen, it's hard to lose in rental property investing if you buy and hold. And so I wanted to share a stat with you that just substantiates this perspective. Historically, On average in Jacksonville, we see 4. 9 percent home price appreciation each and every year. That's an average since 1982. So an average appreciation year in Jacksonville is 4. 9%. But if you go back from 2001, which was before the great recession until the end of 2023, which included the Great Recession, as well as times of large appreciation in Jacksonville, your average home price appreciation is higher for that 22 year span than the typical average is for Jacksonville. So, from 2001 to 2023, on average, home prices in Jacksonville appreciated 5. 8%. per year. So it just substantiates this fact that buying and holding over a full market cycle tends to work out. You don't have to know exactly what's going to happen with appreciation this year. You don't have to know exactly what's going to happen with it next year. You have to buy and hold and build a better retirement account based on this. And if you do this, you're going to be rewarded because that's the way supply and demand works. And real estate represents a critical need. So if anybody looks at you and you bought in 2006 or 2007 or 2008, you can look, especially in Jacksonville. And it's this way in many parts of the country. You can look at them and say, yeah, it was one of the best decisions I ever made. You might get some eyeballs rolling. They might not understand it, but at least you'll know the stat. Now, home price appreciation is actually better for that 20 year, two year span in Jacksonville than it was on average of the last 40 years.

Pablo Gonzalez: 11:20

The beauty of a full market cycle in a high growth market showing its face. Man, 5. 8%, that's a lot to think that that is what it's grown over the last 20 years. And that includes the historic. Great recession where everything went down and we thought that the world was ending to not just beat the historical average that we'd like to talk about all the time, but like beat it pretty handily. Pretty, pretty good GC, but now, you know, I think there's a trifecta of statistics that we want to put out there. We showed you a operational capacity business size statistic that I think is interesting in this like rent that you're doling out to folks. We talked about a market statistic about how great it is to invest in Jacksonville. there's like a, a softer, lesser known statistic that I know that you are much, much, you're, you're very proud of these days. GC, tell us about the last one on the breaking news.

Gregg Cohen: 12:16

Yeah, absolutely. You know, the, the basic thesis of the business model and for JWB is that client experience matters. And rental properties represent a better alternative for investing. And, but what's been lacking is that the client experience for buying rental properties has suffered. And when JWB saw this opportunity, we said, let's do this differently. Let's put this on the backs of an asset that already performs very, very well when you give it time. But let's just focus on this client experience. Let's be better than everybody else and make this an experience that people are excited about investing and referring their friends and family to invest in single family rental properties. And so that's what we started out doing some 18 years ago. And, you know, 18 years ago, there wasn't data to support what is world class client experience in this space. But, you know, there's data now to support this. And the way that to get this data is by doing what's called an NPS survey or an NPS score. And your leading businesses across the country do this as a way to measure their client experience. NPS stands for net promoter score. And so what, what happens is, and JWB clients, you get this question. It happens about once every six months or so you get an email from us. And it says, how likely are you to refer somebody to do business with JWB? And it's one question takes 10 seconds of your life. And zero to 10 is what your choices are. 10 would be, yes, I'm doing that all the time. I love it. Zero would be like, no way, I don't want to work with JWB. And so you can measure this, you can measure this over time. And you can compare this measurement against other other folks in your industry to see where you compare, like in the real estate industry or in the insurance industry or in restaurants or whatever it may be. So JWB has been measuring our net promoter score since 2015. And we recently have seen where we stack up against the other industry average in real estate, as well as What does world class look like? And so the real estate industry average is a net promoter score of 30. And the way you get there is you take your number of promoters and you subtract the detractors. So the people who are really likely to promote your nines and tens, you subtract that from the number of detractors that you have. And so on average in real estate, it's 30 is the score. JWB's historical average is 71. And according to, yeah, 71. According to customer gauge, world class starts at 70. So when we talk about JWB's client experience being world class, it's not just a claim. It's not just me talking. There's actual data to support this. We have achieved world class Client experience at JWB. And that has been our thesis overall. So I'm very proud to share that with all of you. I'm very proud of the 130 teammates here at JWB that make this possible. And I look at this as, as a, a shared success for all of us, as we try to open up access to everyday investors to be able to invest in rental properties. It's that client experience that matters. And so, This has been going on for a while, but the clarity of how we stack up against our competitors is the new, the new moment. And it's something that I want to start sharing from the rooftops.

Pablo Gonzalez: 15:45

I love it, man. I feel like I've been calling JWB world class. It's, it's impossible to not like be in the guts of that business and not see it. Right. Like Jag is saying, there's a business school case study right there. Agreed. For me, from the moment that I experienced the Tuesday morning meeting with you guys, I was like, I don't know. This is a business school, school case study. This is, you know, the more I get to know you guys, the more it's a, a world class operation for your sake. I'm glad that you got some data to quantify it. Cause I feel very comfortable just like screaming it from the rooftops already. So I'm glad that you can start feeling a little bit more emboldened and be able to point to that, to that data and and really show it because A discrepancy between like an industry average of 30 to a number of 78 is pretty freaking significant, you know, like, and, and on top of that, the quantification of like, you know, above 70 world class. So like being able to just like have an overall benchmark across industries. And then on top of that, like how good it looks when it's in comparison to like people's options out there, I think it's a real deal, man. That's awesome.

Gregg Cohen: 16:47

That's what it's all about. And Drew Barnhill, the ring, the ring, the ring master is right. I forgot. Just, just to clarify, you actually take that number of promoters, you subtract the detractors, and then you divide it by the number of surveys, surveys Calculated there as a way to, to make sure, that you're too nerdy,

Pablo Gonzalez: 17:03

too nerdy for both of you guys. You guys, you guys are a couple of bean counters over there. I'm just pumped up. You know, what's got me pumped up. I want to, I want to get into the content today, GC, but the fact that Zach Correa is in the house and Marilyn Cotterman from homosexual Florida home of the manatees are in the house, two names that we haven't said in a while. I am super excited about this and I'm ready to see, see what they think about my lessons learned. Right? All right. So if. Again, back to back to setting the table here, right? Unique opportunity for real estate investors investors today, because we are going from this like historic shift of like having been at very, very high interest rates for a very long time. The Fed has all but told us, I mean, the Fed has told us they have telegraphed us that they're coming down. We know what's happening. We've seen the data over time and we know that when interest rates go down rate shoot up and therefore it's great to buy now. And, and lock in that equity that's about to happen and not just that, but JWB has gone above and beyond and offered this incentive to lock in tomorrow's rate today, you can lock in tomorrow's rate. So you don't have to find refinance tomorrow you get the best of both worlds you get the equity, plus you get a whole bunch of like, I think it's like five to 7, 000 maintenance credit. Is that accurate? I don't want to misspeak on that number.

Gregg Cohen: 18:17

It's between four to 6, 000 depending on the property.

Pablo Gonzalez: 18:20

All right. Pablo curve. Four to 6, 000 on the Pablo curve. So if that's what you're interested, go to chat with JWB. com, shoot an email to info at JWBcompanies. com. Because that opportunity is on the table. I really want to kind of just give a peek into the journey of a person who went from not understanding exactly how this is how this works, how it has made, you know, multiple 2 million profit earners in this community. Many more, 1 million plus, you know, many, many more, 500, 000 plus, and like plenty of 000 plus people that have made this, these profits on real estate. And the first thing that I want to start with, there's three core lessons that really became obvious to me. But before we even got there, it was the mindset piece. There was three mindset moments that really, really influenced me. Number one was. Growing up in Miami, I thought that I had to invest in my backyard. I did not know that there was a reliable way to invest in a market that I, to rephrase it. I thought that the market that I lived in, I had to accept those qualities, whether I thought it was overpriced, whether I saw myself living there or not. I thought that if I wasn't buying You know, like real estate in the place that I was, then there was just was no option. And I had many, many issues why I didn't want it. I didn't realize that I could just pick my own market of qualities that I really, really liked. That did not become apparent to me until hosting this show. And that is something that is an assumption that one has to get to then. Became the idea of the gravity around real estate investing. There's so many folks that when you tell them you're going to invest in real estate They will give you a million reasons why not to joining this community for me hosting this show really was the living out of the Five people that you hang around with the most is who you are. Lee said it earlier in the chat I had to read rich that poor dad and I didn't get to read reach that poor dad until 35 people shamed me about it on a weekly basis And I really really got to understand it and I saw that there's regular folks that aren't full time real estate investors That are out there like looking for properties, nonstop plunging toilets and looking for residents. And that had to become very, very real to me to understand that not only do I not, can I pick a market, but I can, because I can be completely passive in this. And once I realized that I can be completely passive in this, I stopped thinking about it so much as a identity or an activity that I had to do it. And I started thinking of it as an asset class. I started thinking of it. In that, in that part of my brain that I ask myself, where do I want to put my safest pile of money with the most upside possible? And that's when I started being able to like take chips off the tape instead of just thinking about like, do I have a bunch of cash laying around to put into it? I started thinking about like, What table do I want to take chips off of to put in this asset class and those three mindset shifts. So if you can really pick your market, you can do this completely passively. And once you have that, now you can really think of this from an asset perspective and like what mix of this and that do I want in to build my portfolio around that had to become real for me. What do you think of that GC? Do you think that's pretty standard?

Gregg Cohen: 21:52

You know, well it's interesting you asked, I think that's pretty standard and I was thinking about how you would not be somebody that would have been, I would say, inclined to go through that journey. You were not in a position that it was easy to do. You're an entrepreneur, right? You were building, you have been building your business largely over the last five years. You've been investing your time, your money into your business, which is what entrepreneurs do. Especially in their first five years. So it was a very big challenge for you. You also don't come from a background of real estate professionals. I don't had, did you, did you own a house before a JWB property?

Pablo Gonzalez: 22:33

Not, I mean, I owned like a condo for like nine months in like 2005 in Riverside over by Fonse.

Gregg Cohen: 22:40

Yeah, yeah, there you go. So it's, it's not like real estate was a language that you spoke. There is, it is an intimidating asset class to get into and you had to have the courage to be able to do that. Now the community thing, I think you're somebody who naturally attracts community because of who you are. So maybe you had a leg up on others there, but I think it's important to point out that this was not like, you know, easy pickings for you. Right? There are a lot of folks out there that say that they want to build a better retirement account. You know, that's something they're passionate about. But when it comes to doing the things that you did, you took certain steps and leaps that were dependent on your attitude, your effort, your education, really, and who you surround yourselves with. And the exciting thing is that that's available to everybody as well. It's out there. This community is out there. Right? Many people have funds invested in other asset classes that they're just not thinking about that could be used to put into this type of an investment. But many people don't. So I just wanted to kind of bring that up. I think that is really worth noting. And something you should be really proud of.

Pablo Gonzalez: 23:49

Thanks, buddy. I feel very fortunate to think so. You know, my I've had in the last five days or so I've had another aha moment around this and it's and we're gonna get into like the three main principles, right? but like the other the big aha moment that I'm feeling now that I think can really help people is I I saw this chart from John Burns about like the cost of renting versus owning right now. And kind of how, like, I remember like 2004, 2005, 2006, the reason why I owned like this apartment for six months was just because everybody was just like, dude, if you're renting, you're throwing money away. You're an idiot if you're not renting. So like I felt compelled to have to buy. And then for a while there, it was like the clear decision. Then Then after the financial crisis, it actually became cheaper to buy than to rent. And now in the last three to four years, it has become astronomically much more expensive. To buy than to rent, right? And the reason why I bring this up is because in the not your average decisions that I took was to buy a rental property while I was still renting a home. And I didn't buy my primary residence. And what I think about as the big lesson right now is I bought that. Remember what I told you? I told you that I'm buying this because I, I think that. Buying this is going to help me buy my actual future home here in Jacksonville. And, and I really, really believe that I felt this like impending case sense of doom that I've, I didn't start owning real estate right now. I was never going to get to own it. So I think about all these folks that are maybe late twenties, maybe early thirties, and maybe they're living in Miami or they're living in New York or they're living in the Bay area or LA. And they're thinking, Man, I don't know if I'm in my forever place. I know that this like buying here is going to completely over leverage me, but if I don't get into real estate now, when am I going to do it? I just don't know if this is my house for me. I don't know if this is where I want to live forever. This idea of. Really taking to heart that you can pick your market like a Jacksonville where you can buy a home for 250, 000 or less with very, very high upside and start owning real estate while you are still figuring out your like rent situation, where you're going to live forever and whatnot. Is something that I think we need to get really, really loud on for, for this whole generation of like younger millennials and old Gen Zers that are, that are starting to make some money and feeling like they're already way behind on the real estate asset class.

Gregg Cohen: 26:19

A hundred percent. Most people think it's a either or scenario. Either I buy my first home to live in or I, or I don't. Many people say, well, that is the, that is the first house I'm ever going to buy. It might be the only house I'm ever going to buy, but our community has proven that that's not the case. In fact, I'm curious if others have followed a similar path. I know I think of Jen Filson. It was a client of ours who has spoken about the same things that you're espousing here, right? Making a wise decision to invest regardless if owning a home or not is right for you and, and you can do both. I'm curious if anybody else in the, in the community here has done the same thing. Have you bought rental properties before buying your primary? That would be something I'd love to get more insight into in the chat. But you know, you think about the decision that you made and as this decision you made starting three years ago to buy your JWB portfolio. And I look at you've earned over 100, 000 in equity buildup. This idea of a stepping stone becomes very visual now, right? You're 100, 000 closer to that next decision. And that next decision might be your primary. For you, you made another really great decision when buying the duplex, you know, but the rental properties are an asset that you can think of to set you set yourselves up for that next step. It might be primary home ownership. That next step for you might be sending your kids to college. It might be building a better retirement. It might be a little farther out, but thinking of us as a stepping stone, it's not something the average investor thinks about.

Pablo Gonzalez: 28:01

Yeah. Totally, man. So anyways, want to throw that out there. Those are the mindset shifts I have to take. And I think are useful to folks, particularly today. I'm getting louder with young people of just like, dude, I get it. You're in Miami and you're like 29, 30 years old. You don't want to put all your chips into Miami because you don't know if it's for you. Pick yourself up something in Jacksonville, like is, is, is really a conversation that I'm having these days. So that being said, now let's talk about the actual fundamental concepts that I believe that this community truly, truly understands. It's the source of all the wealth that's being created. which I believe is, is what you need to get right now in order to like move forward and jump on this opportunity of interest rates are going to go down. Appreciation is going to go up. You can buy luck in tomorrow's rates today, go to chat with JWB. com to make that happen. But the first thing is that the average investor. Throughout my career in thinking about how do I invest my money either thought, thought about it very binary throughout the giant cone appreciation rise of 2001 to 2006, everybody was just thinking appreciation. Everybody was thinking, how do I flip this thing? How do I buy this thing? And then get like a, like a home equity line of credit because it's going up so fast and blah, blah, blah, blah, blah, blah, blah. And like parlay these different things, right? Like. People were super focused on appreciation. Then 2008 happened. People started really questioning appreciation and then it really, really became about cashflow. All I ever heard from there on out was cashflow. How much cash are you getting from this thing? At the end of the year, when your tenant moves out and you pay taxes and you got to like, and do something, did you really get the cashflow? Did it really matter? Right? Like, are you, are you exceeding that? Is it a 1 percent rule? And, and the first thing that I think we got really, really vocal about was this idea that rental properties pay you five ways. There are five profit centers in rental property investing. And GC, if you'll allow me, I'd like to just kind of like do a breakdown of them one by one, right? So it's cashflow, home price appreciation. We talked about it. There is tax savings. There's principal pay down, and then there's inflation hedging the way that we. Now understand this is that they all work together to bake a beautiful pie and you want to understand each one of the ingredients for what it does for you, right? Like, I was about to go super deep into the pie metaphor and start talking about texture and sweetness and savory. I'm not going to do that, right? You want to, you want to understand the five rental property Profit centers. Let's talk about cashflow, right? Like you have completely helped me redefine what cashflow means when it comes to a rental property cashflow, meaning monthly revenue minus monthly expenses. How much you generally take home every single month to think of it as risk mitigation. The idea that You want to be breaking even or, or, or a little bit more as quickly as possible in a, in a, in a rental property is real to me because if I am having to pay out too much out of my pocket every single time, I'm going to have a really hard time buying five in, in four years, like I've done, right. And build a portfolio quickly, which we really want to get to, right? Like you want to be at like at break even slash. Slash maybe a little bit positive by the end of year one and Because of that, you know, like to keep you in the game. The other thing to understand is that cashflow is like a fine wine. It goes up, right? Rent goes up over time. You're, if it's revenue minus expenses, your biggest expense is your mortgage that is locked in for 30 years and revenue is rent rent. Always goes up. JWB signs three year leases, two year leases with rent escalation clauses in it. And whenever you turn a resident, you're always you know, whether you are renewing them or you're turning them, rent continues to go up. So cashflow continues to go up over time. And really when I'm thinking about it from an asset perspective, I'm thinking about cashflow tomorrow. Cashflow the day that I really, really need it is what's going to move the needle for me. And therefore I want to think about when I'm going to want this cashflow. If it's beyond 30 years, guess what's going to happen. My mortgage is going to go away for sure at some point and cashflow is going to take a giant leap up. And that's what I want to think about. But under that amount of time, there's ways to rapidly pay down the mortgage. There's ways to do other things to increase that cashflow as it happens, but it goes up. Right. So understanding that you want to not just maximize cash flow, and that's the only thing that matters, but that that is the entrance to the dance, right? Like this, like risk mitigation piece was a big part of it. You want to say anything there?

Gregg Cohen: 32:51

Yeah. I think you're nailing it, buddy. I'm like, I'm like a proud father over here, letting, watching this unfold. I love it, man. Keep going.

Pablo Gonzalez: 32:58

I'm loving it. So that's profit center, one profit center, two that we had already spoken about home price appreciation. We spoke about this, like trauma that happened after the great recession of everybody all of a sudden believing that home price appreciation is something you can't count on. We have now. With the statistic that we just talked about disproven that over a full market cycle, home price appreciation is something that you can count on. We just talked about it. You went through the great recession from 2001 through today in the last 20 years, home price appreciation in Jacksonville has been. Above the average home price appreciation that it was before, because we've been on such a good run, it means that you can count on it. As long as you're looking at it in a 10 to 20 year window, and that is what we are doing as rental property investors, right? So that is number one, you can count on it. Number two, home price appreciation, When you combine it with smart debt creates the most fascinating concept that I, that I learned, which is leverage that I started to learn once we started doing the properties of the week and the idea that if you are buying a hundred thousand dollar asset and it goes up 5 percent at the end of the year, It's worth 105, 000. That's a 5 percent increase over the whole price of it. But if you are buying that with 25, 000 down and financing the rest of it, You are still getting that 5 percent increase. And, but if you only put down 25, 000, now that that five, that, that 5, 000 makes up 20 percent of appreciation on that asset. So this idea that you can finance properties. And allow them to appreciate over time and make interest on other people's money that goes beyond the interest that you are paying. The concept of leverage became very, very real to me. And that's when I really started believing that I have a chance to be rich, even though I started in my forties, right? Like, like that idea of like the parlay and that effect of that was when I really, really started believing in this thing. And I was like, Oh, I get it. This is why it makes sense to do this over other like Fixed loan things that you can do to make money. Right. And then beyond that, the idea that equity provides a whole bevy of options, right? The fact that once your home rises in price, you are able to do some really, really interesting things in, in your real estate. 1031 exchanges. When you buy, when you sell a property from a market like LA and because it's appreciated over time, you bought it at 200, 000. Now it's worth 800, 000. You sell that thing. You take that 600, 000 in appreciation and you can invest it in other things before paying taxes. You can buy more properties. You can come over here and buy 20 Jacksonville homes. Pablo, Pablo appreciation tax or whatnot, right? Without getting charged taxes. The other thing, the fact that you can take that 600, 000 in appreciation, refinance a home, take that money out, cash free and go invest it in something else that's doing it. The idea that Irving made obvious to me, the fact that these investments, when done with leverage, when you're using appreciation these homes, they're Or, or, or even not done with leverage, right? Like even bought in cash, these properties have a way to have their own little baby properties that with no extra cash out of your own pocket, out of your own bank account, you're able to buy more. Those options became very clear to me and it became so much more than just equity and so much more than appreciation leverage and options became very, very real to me. So that's, that's number two. How are we doing? Are you still proud of me?

Gregg Cohen: 36:43

So good. So good. I got something to add there though. I, you know, the, the passion that you have for little baby properties is just, it's just awesome. Right? Whenever there's like a twinkle in your eye, when you think about your, your properties having little baby properties, right? And so I've, I've taken that and you know, I think creating more clarity on what that journey actually looks like is, is helpful. You know, when we have shown some of our clients who have earned. a million dollars in profits or two million dollars in profits. Many times the questions from the chat are, did they, how much did they have to invest in order to have a portfolio of, you know, 10 properties or 15 properties or whatever the number may be. And my answer many times is a lot less than you think. Because what happened is those original properties had little baby properties, meaning that as the equity grew and all five profit centers worked in their, in their favor, that at some point became enough for them to reinvest in a little baby property, right? So I actually started to model this thing out. We're going to put some, some nice materials behind it to make it a little bit more clear, but just using the standard appreciation and standard expectations for what cash flow and you know, appreciation and, and all five profit centers would do for a normal portfolio, you can go from buying one property and just using the profits. You can roll those into future properties and by, by year 13, without investing an additional cent. You are already at five properties. So it takes you five years to get to your second one, just normal, usually normal home price appreciation. And then I think it takes you three years to get to your third and then it takes you two years to get to your fourth and it really starts to snowball and cascade and, and your, your baby, your little baby, you start to have a little half a football team here. Or you have an O line at least you know, by, by year 13. And so. This is something that's super exciting. It's like an aha moment. It clicks for people. And once you, once you see that and feel that you're like, wow, now I can have a more reliable retirement account, you know, for you, it's the first time you felt like that was going to be possible for you. So I think a little more clarity there is something I want to do for, for all of our community.

Pablo Gonzalez: 40:05

I love that, man, because it really, what it does, what it does for me is It takes away this burden of coming up with more money to keep feeding this beast, right? Like I, I thought to myself, all right, man, I want to hustle and get to like three to five properties and pull forward demand for myself because I know that real estate gets better over time and all this stuff happens. And I wanted to get there and I wanted to sprint like that, but I didn't want to sprint forever. The idea that I am now Four years in, I have, you said 100, 000, but I think I have closer to like 180, 000 in, in, in equity across, across the things that I have, or maybe two, I don't know, I don't know how much it is, but I know that I looked at it and being three years in on the journey right now, three, four years in, I see myself. within three to four more years of doubling my portfolio without having to have saved extra in my budgeting while, you know, like from my like active income. And that to me is super, super powerful. And I believe that that's going to happen again. Eight years after that, right? So like the fact that it just keeps mushrooming out is, is huge because it removes that burden of like, am I going to be, you know, these like fire people, financial independence, retire early. Like they're just like hustling, hustling, hustling, grinding, grinding, grinding, and not spending any money. I didn't want to do that forever. I want to, I want to save long term, but I also want to enjoy my life. And I don't mind sprinting for like a period of two to three years, but I didn't want to do it forever. And this idea that These properties create baby properties takes that away. If you can delay gratification for a short amount of time, while you're building this thing up, you're setting yourself up to succeed a big time.

Gregg Cohen: 41:49

Love it, baby.

Pablo Gonzalez: 41:50

Cool. All right. So then the other profit centers, a little bit, a little bit less complicated. I'm going to go through these a little bit quicker, right? But one is debt pay down. I loved it when Tim Hicks came on the show and talked about this idea. That the worst thing that's going to happen is you're not the worst thing, but like the floor of this thing is that the rent, the resident that's in that house is going to pay off this like loan that you got, and you're going to make that money. It's like the same as if somebody told me. Oh, I graduated. And all of a sudden, Oh, you know what? I'm going to just put somebody here. That's going to pay off your college debt over the next 30 years. Don't worry about that. Right? Like the rich uncle syndrome. So the idea that you're actually profiting from somebody paying down your loan that you took out to create the leverage that creates the baby properties, is super, super attractive. After that is tax savings. I've always thought that tax savings was write offs where it's like, yeah, cool, whatever. If I spend money, then I get to like subtract it from another thing. What I didn't realize is that in rental properties, there is a non cash outlay tax benefit of Depreciation, which means that you get to subtract the value of the goods in the home over 27 years, yearly from the income that you make from your passive income. So that question from my friends about like, do you really get to keep the gas flow that you're making? The answer is yes, because the tax depreciation makes up for it and allows you to keep that cash flow that you are producing. Right? So like understanding that piece was huge. And then finally, inflation, hedging, inflation, profiting, the idea that everything else that you invest in doesn't really, doesn't really have a direct correlation to like how much inflation is happening in the world while investing in hard goods like homes keeps up with it because as the price of replacement goes up around you so does the value of your home. So it's like this hedge around it and. The fact that I can pay for tomorrow's goods with two days dollars, right? Like if I could go back and a burger could still cost me a nickel while for everybody else, it costs 10 is real. When you take out a 30 year loan for something that you're going to own. for 30 years at the, the, at the original profit. So this idea that these five core ingredients bake the pie and really understanding them was really key for me. I believe it's really key for the rest of the Natural Average Investor Show community. And that is lesson number one that rookie investors don't really understand.

Gregg Cohen: 44:25

Well done, brother. Well done. And I think the combination of those and the pain point that each one of those solves is different and meaningful in its own right. And like you said, it's that the baking of the pie comes together to create this beautiful asset class. That's why I love it so much. We just have to take that extra step to educate ourselves because some of this stuff is complicated and that's why we're here.

Pablo Gonzalez: 44:50

Got it. So if the ingredients take away the pain points, let's talk about the pie baby, right? We started, we started putting these ingredients into the pie and showing that and what became incredibly obvious is the next concept that I want to teach, which is what you see the Pac Man principle. The Pac Man principle. Yes, the backman principle. We are looking at returns per profit center. And what we're seeing here is a pie and every, every profit center is broken out. Right. And this is a typical property where. Rental income might be 20 percent of it. Tax saving might be 3. 3 percent of it. Principal pay down 14 percent of it. And here, home price appreciation is 62. 5 percent of it. And when you color code it, that 62. 5 percent looks like the majority of the pie. It looks like a Pac Man with its mouth wide open. And we had the benefit of starting to do this. Over different portfolios, time over time, over time, over time from her V to Zach to Leslie, to, you know, like all the folks in our community that are showing their growth. And it continued to prove that home price appreciation would hold somewhere between 60, 000. And 75 percent of the overall pie, the overall wealth that was being grown was coming from it. So this idea of the Pac Man and feeding the Pac Man, feeding that home price appreciation, if what you want to do is maximize your wealth, became very, very real to us. And what that means Is that for everybody that is so obsessed on what the monthly cash flow is, if they are not having a strategy for, am I in a growth market? How many of my homes are in a growth market than what they're really doing? It's just like growing the teeth of the Pac Man instead of growing the Pac Man itself, growing the pie itself, creating that wealth that is going to give you that security. That's going to continue to give you those options later on in life. And later on down the cycle, you're missing out on that by trying to just like maximize the amount of chips on the table that you can take off every single time as opposed to growing it. And that to me completely changed my perspective of what I wanted.

Gregg Cohen: 47:11

100 percent and I think, you know, not, not only is it illuminating to see how your money is going to work, but I think comparing that to how many, how average investors make decisions is also illuminating. You would think if the biggest part of the pie is going to be home price appreciation after a buy and hold strategy that you would spend your time. doing your due diligence and research on those components. And when I think about home price appreciation, I think of the team and I think of the market. Why do I think of the team? Number one, because in order to experience this type of home price appreciation, you're going to need to be investing for a full market cycle. And the team is the only way you're going to get there in one piece. The only way you're going to have a smile on your face year after year after year. You have to have a world class client experience in order to get to a full market cycle. And then you need to choose that right market. And that team is going to choose help you choose that right market, you know, based on these five profit centers. But most investors see that piece of the pie.

Pablo Gonzalez: 48:15

You're taking, you're taking my third lesson away from me, taking my third lesson. I agree. I love to hear you rant about this, but I also feel like this is my turn, bro. You've been the expert this whole time. So, so correct. You're correct. It brings us back to these NPS scores, right? To the, how do you provide a client experience? This idea that if we are maximizing the piece of the pie, then what we really want to maximize is longevity. And in order to maximize longevity, you know, we, The what became very obvious to me as, as I started going through this and started hearing everybody's stories is that client after client talked about, you know, what? There's been moments where it sucks, you know, there's, there's been moments where I'm sitting across a dinner table from my husband or my wife and I'm, and we had to have the conversation of, okay right now it's a time where we actually do need to put a little bit more money back in. Right. And, and. You know, what, what keeps us here and all of them, it seemed like their, their answer was, we decided to do it because we knew that this was a blip. We knew that we feel super supported. We knew that even though. All, you know, even though we're having to make one tough decision, what's going on behind the scenes is like 30 things in motion that we don't even have to worry about. And we knew that the people that are taking care of this property are in it with our best interest in mind, to have our goals in mind, they know are wise and they are incentivized in a way to drive performance for us. Right? So this idea of what you're saying, the importance of the team became very real to me. And that's when. The third concept really became obvious to me, which is the order of operations fallacy. And we are so used to having, you know, thinking, all right, are we going to invest in rental properties? Cool. Let's go look for a property. Let's look for a deal. Let's go find this thing, that we're going to buy and what it looks like and where it is and all these different things. we go. I'm so obsessed with it that we spend 90 to like 98 percent of our effort. Looking for a rental property. Often we're looking for a rental property under these other fallacies of just like, I can't pick whatever market I want. I'm going with like, wherever I have an advantage of finding a property, not like what I want the market to look like to maximize for home price appreciation, to like, keep in mind my goals. And then we spend five minutes maybe like Google the five best property managers in the location. We make a spreadsheet, we find out their price, and we go with whichever one gives us the best feel. But if what we are trying to do is take into account all these five profit centers, grow the pie as big as possible. Know that we're going to have some tough times at certain moments when people live in your homes And want to feel supported want to have a world class experience Then the order of operations should be reversed. You should spend all your time thinking about hey Where do teams exist? That when the chips are down i'm going to feel good about where do teams exist that have a You certain critical mass that I know that they're not fly by night companies that in year 12 of owning this property, they're not going to go out of business. Where do teams exist that have the data and perspective and, and technology that allows me to see how things are doing. So when it. Feels like the world is crashing because, Hey, I got to, maybe I got to get a new roof or something that I can look and be like, Oh, wait a minute. I have 300, 000 in this property and this is how it's performed. And I've actually weighed way more than whatever this is going to cost. And it's only starting right now and it's only getting better. And this is the prognostication. And this is what my plan looks like. And I can stay in it, right? Like we spend that much time figuring out where those teams exist. Then we can say, okay. That team exists in Jacksonville and in this place and in this place and in this place, we can then look at those markets and think, okay, now what are my goals? When do my, when am I looking to like count on this cashflow in this market? I believe that at that day, I'm going to have You know, this much wealth and this much cashflow and this market, I'm going to have this much cashflow and this much wealth. And in this market, I'm going to have this much cashflow and this much wealth. And that's when you make that decision of, you know, that the team exists there, you know, that the market exists there, and then you go into the property and now you're really setting yourself up to succeed. That combination of things, understanding. The five profit centers, understanding the number one profit center that creates millionaires and understanding the mechanism behind being able to take advantage of that profit center are the three lessons that I have seen over and over again in this community. And it's the reason why we've produced outstanding results. And I myself have been able to go from like, I'm renting and I don't know of real estate for me. And I think it's might leave me behind to, I now own five properties. I now have. a net worth North of a million bucks, thanks to all, like, like all of this stuff. And it happened during the times of my career when I was making the least amount of money, because what I did was just pull forward demand into this asset class and do it the right way.

Gregg Cohen: 53:34

Brother, you have come so far in such a short period of time, man. I remember when we're running in the morning and you're asking me really great questions and I just go back to that time. It's rare in, in the real world. It's rare for people to surround themselves, put the necessary time and effort into education and then to do something with it. And, I would say it's not as rare in our community because we're blessed to be around the people that we are and we start to feel like this is normal. But what you have done, Pablo, and what our clients have done is not normal. And we should be really proud of that because guess what? Normal isn't working for most folks. when it comes to building a better retirement account. So I'm really, really proud. I have been with you every step of the way. And by no means in the beginning, were you inclined to reach this landing point? But to sit here and watch you teach and preach here for the last 45 minutes has been a real joy. And I'm just happy to be there with you, brother.

Pablo Gonzalez: 54:29

I appreciate it, man. You literally have been there every step of the way, because many of these conversations happened on a morning run. So, you know, at a gazelle's pace, might I say. but what you bring up is kind of like the final realization that I've had, which isn't what you need to really understand to make a smart decision in real estate. But it is the fact that I, I just, I look at the statistics in retirement and they look appalling, right? And it's easy to then think, Oh, you know what, but that's only happening because the people that I know are, are, they're able to save more and, and, and whatnot. But the thing that really hit home is the idea that it feels like our current strategy for retirement makes us most vulnerable at our most vulnerable, meaning this. Overall thinking that once you get to a number, you can live off of that number creates two, two problems in my mind. One is we're living longer, right? So is that number even viable these days based on rising healthcare costs, based on inflation, based on length of time, you're going to need to live off of this thing. And two, the fact that because we're living longer, because I know that, stock market really does go in these like up and down cycles. I've now lived through multiple recessions in my life, and I have seen multiple moments where it feels like we're in recession in our life. And I've seen the effect of the psychology of someone that's living off of a fixed income, off of like a pile of cash, when, when all this fear is happening in the ecosystem, it makes you delay gratification further in a time where you've done all the delaying of gratification that you needed to do. Right. I just don't find it fair that someone in their seventies, when last week, you know, the market takes a, takes like a 12 percent haircut are thinking, Oh my God, should I not buy this cruise that I was about to take with my grandkids? Like that doesn't seem fair. And the idea. That rental properties creates a scenario like you have told me from day one of an army of cash flowing assets, not just an army of cash flowing assets, but an army of cash flowing assets where that army, you know, that cashflow is only going to decrease very little every once in a while when like, when there's a turn, but more than anything, you have more options at that point, because all of those equity options we talked about not happy with that market where it is at that point, 10 31 into somewhere else that you can like, right? Maximize cashflow off of that stuff. don't have enough actual cash in your things, refinance and put some of that stuff in your pocket and go do the things that you want to do. I like the idea of having my most options when I'm most vulnerable and having, you know, like, and having the most stability when I'm not, when I'm most vulnerable, not, not really having stability and having a lack of options when I turned 70.

Gregg Cohen: 57:20

Yeah, it takes on this tone for me, which you know, I've seen my, my parents are getting older and, you know, I've seen my grandparents, you know, become older and, you know, all I want for my parents is to enjoy, you know, retirement and to enjoy those years and they, you know, you start to feel like, you know, I know my parents have deserved it. And I think we all feel that for our parents as well. And you know, we'll be our parents one day and I think we'll feel like we deserve it. And it feels like the chips are stacked against us right now. I think even in the last maybe five, 10 years for me, it's, it's become not just something that's a great opportunity for folks, but it's something that like, Man, I'm so passionate about sharing with the people that are closest to me and our Not Your Average Investor community because it's like the problem's only getting worse and there aren't a whole lot of really, really good solutions out there. This is one of them. and it can be, it can be an opportunity that can truly change your life. Maybe not today, but it can change your life in 10 years, in 15 years, in 20 years. And for those people who are closest to us.

Pablo Gonzalez: 58:30

Or in four years, like me, a hundred percent, man, a hundred percent, a hundred percent. So, you know, I got, I'm getting a lot of love from the community. I do have to say, being a part of this community has completely changed my life, completely changed my outlook, being your friend has completely changed my life, completely changed my outlook in order to like really understand all this good stuff. And again, it all started by having the trust to get on the phone with JWB and like, say, all right, man, let's, let's, Let's pick one up. Let's, let's start this journey, right? So like Joanna's putting it, I think, I honestly think based on the four years of you always kind of like sandbagging how good the opportunity is to like seeing you grow and grow and loudness of like how right now is a major opportunity of like getting in before prices rise after interest rates drop. Putting your money where your mouth is to not just create this incentive, but extend the incentive and buy another 20 packages of, of like, you know, like of rate buy down so people can get. The opportunity of tomorrow's rates today really makes me want to come here and share this stuff and tell people to go to chat with JWB. com, tell people to send an email to info at JWB companies. com and get this thing rolling. Cause for me, it's, it's really. The knowledge and the belief in it has, has grown in me faster than I imagined. And also the amount of like wealth and opportunity and, you know, life changing, you know, behavior changing things have happened for me faster than I imagined by doing it.

Gregg Cohen: 1:00:01

It's been a beautiful journey. It's been a beautiful journey. And for, for those who are thinking about taking advantage of that incentive, You know, we, we set aside 20 additional contracts that we would be able to buy the rate down for clients and the number. So the number is a lot less than that. I don't have the number in front of me. I know last week we put eight new properties under contract, so it's definitely less than 20 and it won't be extended. And so this really is a very special opportunity to take advantage of interest rates that are a lot lower than anywhere else that you can get. Because JWB is buying them down for you. recent clients have closed at a five and a quarter percent interest rate. So, it's some less, some number less than 20. I'll, I'll get a better number for you soon, but it's, you know, it's not going to be extended beyond that. So I certainly hope if you are thinking about making your first investment with us, or you're thinking about adding your portfolio, pull that demand forward, like Pablo talked about in his own portfolio and take advantage of this today. You get a great rate, get those incentives we talked about, and then as interest rates go down, you're going to feel really good about your decision because you're going to see home prices go up and you're going to lock in that equity that you otherwise would not have had. So, I certainly hope you take advantage of it.

Pablo Gonzalez: 1:01:15

Love it. Just see, we got a couple of QA's here for the, for, we still got like 80 plus people here. This is a, this is, I'm not going to lie. This is a bigger attendance and way more participation than I expected based on the show description. It must be that people are really considering this decision and are looking for wisdom. So got a couple of good questions here in this, in this chat. First one is from Eve's Richard Dole, friend of ours. We met him at the, at the, at the summit. He's asking once appreciation occurs, how long until you get appraisal and any advice on that? What do you think, GC?

Gregg Cohen: 1:01:44

Well, he's so better solution for you appraisals you can get whenever you want, but they're expensive. So generally. You would get an appraisal when you are ready to refinance or you're ready to sell you know, your property. But as a JWB client, you don't have to spend the money on doing that. We're industry experts. We know everything about Jacksonville properties because we buy them every single day. We rent them every single day. We sell them every single day. So you can just reach out to your JWB portfolio manager and all of all of our JWB clients. See the appreciation that they have earned on their portfolio as a part of our reporting. And that's available at any time. You can just log into your, your ROI tool, which is a part of your standard experience here as a JWB client. So that's how Pablo knows that he has earned over a hundred thousand dollars in equity and his portfolio. And he's already thinking about creating baby properties. It's because we, we actually do an internal appraisal for you at no charge. You do that every year on thousands of properties for clients that you can be prepared to make great decisions. So just reach out to your JWB portfolio manager and that's easy. And if you're not a client yet, You'll have this done for you when you become one.

Pablo Gonzalez: 1:03:03

You see somebody that is checked in from the tech, so it just is populated as not your average guest. They're asking, who do I call? And they're watching while at work. What's the phone number so that, so that our friend can do it or just let us know who you are, who, who put that in the chat, but what's the phone number that you can write down?

Gregg Cohen: 1:03:19

9 0 4 6 7 7. 9 0 six, seven, seven, seven.

Pablo Gonzalez: 1:03:24

Okay. And then Frank in the chat also put that you can also email him directly. Frank at JWB companies. com. So let us know in the chat who, who, who just. Put that in as not your average guest. Who do I call? I'm watching, please, because I'm at work, need to talk to somebody. Would love to talk to you. And then our old friend, Tyler Depot has another, comment here in the question and answer. If the market will eventually settle out and rent stabilize is banking on cashflow or appreciation for that matter. As viable as it has been in the last 10 to 20 years. I can't even imagine a time where median home prices will be in five, will be in the five or six hundred thousands.

Gregg Cohen: 1:04:03

I'm so glad that you, you mentioned this. I think a lot of people feel the same way. You start to run these numbers out and you say, Well, 5 percent appreciation on 300, 000 purchase price right now in five years, what's this worth? Or in 10 years, what's this worth? And it's mind blowing. But guess what? When I started to invest 18 years ago, it was mind blowing to think that our median home sales price in Jacksonville would be 366, 000. or that the median home sales price across the country would be over 400, 000, right? But this has proven to be the real, the reality, not just one year, not just over a five year span, as long as we have gone back on record and measured home prices and rent prices. This is the way it is. And the reason at the core of it is because this asset Is a critical need. There is only a limited amount of land out there that can be turned into housing and there are more and more human beings that want to be in our country to live here. And there's only so much of a, you've got supply and demand working in your favor. And so over time, those invisible hands work together. And what we've seen is on average in a growth market like Jacksonville, home prices do appreciate. So, yes, you can count on it. Yes. Those numbers, if you start to roll them out, 5 percent appreciation over 10 years, 20 years, your start, you're going to be surprised at what your home values are worth. And all I can share with you is that those folks that were investing with us 10 years ago, they're Are looking at home prices today and they're like, wow, I never would have imagined that.

Pablo Gonzalez: 1:05:40

Yeah, yeah.

Gregg Cohen: 1:05:40

You know, you want to be on the side of owning the asset and then looking at that rather than on the other side you know, of looking at home prices going up, which they are going to over time and saying, I wish I had those in my portfolio. So yes, you can count on it.

Pablo Gonzalez: 1:05:56

So true, man. And Ty is saying, my parents definitely didn't think 300k houses could be possible when they bought over 30 years ago. Amen, right? Like I, it's coming from somebody where a market has just continued to skyrocket in Miami, right? Like I, you know, it's, it's so easy to, to like look back at it, but man, I think when I moved to Orange County, California In, in like the early two thousands, the, the, the gentleman that I rented from was an adorable old man that I kind of like had this like grandfather relationship with, and he was telling me, he's like, man, you used to, you used to get a plot of land in Orange County with a national geographic subscription, right? It's just like insane kind of stuff. And, and just like how much, how much it's all, how much it's all gone up. But the reality of the matter is. You know, they're not making any more land. There is, there is a, an undersupply of housing that we just cannot catch up to. So the, the short term of it is, you know, like it's going to continue to go up, right? Like the supply and demand dynamics mean that it's going to continue to go up. On top of that, there is, there, there is. Just the, the general feeling that we continue to like go through inflation and go through all these different things, right? Like I, I have a hard time just like I have a hard time thinking that the median housing price of a place is going to be like 750, 000. I also can't see a future where we figure out how to stop printing money to bail ourselves out of things. Like we're, you know, like that trend. That's not going anywhere. We have major problems to solve in, in like social security going away. And like all these different things that are going to continue to force us to do this stuff. And then I just look at Jacksonville and think it is the one super low priced market in a, it's like the oasis of low price surrounded by like super expensive cities. So. Man, like, yeah, there's, there's just no chance that people aren't going to seek that oasis,

Gregg Cohen: 1:07:57

you know, as someone who's done it. Right. You know, absolutely. So I think, I think if you ask somebody on the streets and you say, Hey, Do you think there's going to be inflation over the next 10 years or 20 years? Most people would be like, well, yeah, there's going to be inflation. And for those who know, they might say inflation might be like three, four percent a year. So people, people have believed based on their data and their history and their perspective that inflation is going to be here. But just to ask those same folks about Real estate appreciation. And they might say, well, you can't count on that, but the data for real estate is almost as convincing as inflation over the last 40 years. In fact, I haven't run the numbers on it. It might even, that's probably a good thing for me to look at, which has gone up more years, inflation or home prices in Jackson, I'm gonna, I'm gonna write that down because it's, it's pretty, it's, it's very similar. So if you believe in inflation, you'd be inclined to believe in home price appreciation once you know the data, and then it's just a math equation. If you think there's going to be an average inflation in home prices. 5 percent a year, then it's just a math equation. 300, you know, 250, 000 today times. 10 years at 5 percent appreciation. So kind of walk your steps, walk yourself step by step through that and see if it feels right. Certainly feels right for me because I've lived it.

Pablo Gonzalez: 1:09:12

Awesome. Awesome. We got a Phil Caparuso. Phil, that's a new name, buddy. Good to have you here. Says I'll be doing a 1031 exchange in the next two months. JWB already manages a few of my rentals. I'm considering other areas, Orlando and other cities outside of Florida. What is the case? that Jacksonville would be better than other cities, demographics, et cetera. Greg, can I answer this question?

Gregg Cohen: 1:09:34

Go for it, brother. You remember,

Pablo Gonzalez: 1:09:36

do you remember it? I'm about to pull up this flyer that I just made because I've been telling Greg that we need to go real hard at this thing. I just made this flyer for an event that I'm going to. I want you to look on this right side of the equation over here, right? Like we talked about the need to be like, be able to hold on for long. So full market cycle, that's the left side of the equation, right? Like there's a hundred percent passive vertical integration, but on the right, Jacksonville is The only city that can claim below us median prices above average rent appreciation, above average home price appreciation, and a population growth above two percent. They are 13 percent the U. S. Median. the, they have the fastest growing median income, which means that that rent appreciation is going to continue to go up and prices will continue to go up. they have a 5 percent above. know, like 5 percent rent appreciation, which GC already said that in the last 20 years has actually been 5. 8. This is them under promising and over delivering. It's the fastest growing city in Florida. Take that Orlando. and it's been, you know, like it's grown five times over the it's five X over the last five years. So what you're looking at is a low price, you know, With high upside, I encourage you to look at the cities that you are thinking about. for example, Orlando, they do not have these statistics. Their prices are way higher. They, they are, you know, so like you're getting in already. Like you don't have this like built in upside that you already have at this like buying below average and risk mitigation, the growing population is all good. And the other thing that I would say is the balanced economy of Jacksonville is one of the things that has me most, most like risk mitigated, loving Jacksonville, right? Like every other city and I've lived in, I've lived in Florida for a long time, right? Like Miami has these like ups and downs when it comes to like the financial markets and tourism and construction. Orlando has major ups and downs because they are so hospitality driven of, you know, like That's discretionary income for people, right? Like that's one of the first things that go away. Like then, and then I like Tampa, the other big city has completely shut up insanely lately and their home prices are well above the median, right? So it's like, it has this beautiful mix of like fortune 500 companies, a bunch of upside, still low price. So you can buy more assets for less cost. And then finally, Phyllis saying, thank you. Sounds good. Since jobs are key to rental ROI, any businesses coming into Jacksonville, GC, why don't you answer that?

Gregg Cohen: 1:12:11

Yes, absolutely. We actually were ranked the number one MSA in the country for net corporate relocations from 2022 to 2023. That means the most companies came in to Jacksonville minus the ones that left, that net number is the highest in Jacksonville compared to any major MSA in the entire country. Little known fact. So we have a number of companies continuing to relocate here in Jacksonville. We have three fortune 500 companies that are headquartered. Actually a fourth fortune 500 company. Oh man, I forgot about the last one. We made our fourth fortune 500 company. you know, some big names that you'll definitely know. Dun Bradstreet recently relocated their corporate headquarters here. We have FIS, which is a Fortune 500 company, their headquarter. They just built a 165 million corporate headquarters in downtown Jacksonville. A lot of great. Economic corporate relocation and just overall economic health from the job sector. So

Pablo Gonzalez: 1:13:15

what was the ranking from the wall street journal on like hottest job market? Was it first or second? I

Gregg Cohen: 1:13:20

think it was number two. There's a number

Pablo Gonzalez: 1:13:22

two hottest job market. If you look at that list, everywhere else is super high price. And Let's not forget the queen's jewels here. GC, why don't you tell Phil about downtown and what's happening in downtown Jacksonville?

Gregg Cohen: 1:13:33

Yeah. So Phil just You know, and I, and I want to encourage you, Phil, to reach out to the team because I know you won't be able to get all of your questions here. I think this is the beginning of the journey for you. Reach out to the team. We're able to have a really great conversation with you about where Jacksonville stacks up with Orlando or Miami and provide data all the data that we have to substantiate these really cool things that we bring up, but we know the same things about Orlando and Miami and Tampa as well. So we can help you there. So reach out to the team and jump on the phone. But downtown Jacksonville is a thing in itself. We haven't spent time today talking about it, but it is such an opportunity in our minds. We've been getting really loud about this over the last couple of years, because here's the facts. If you look at revitalized downtowns in the U. S. and you look at what home prices have done for cities that have revitalized downtowns, they have gone up in those cities with revitalized downtowns by a large margin compared to the rest of the U. S. The number is actually 27%. So if you live in a city that's been revitalized, a downtown like Denver, Austin, Tampa Nashville are four to come in mind, 27 percent more home price appreciation than the national average over the last 10 years. So downtown Jacksonville is undergoing a revitalization right now. And those who are in the know, know what's happening. You can't exactly see it when you're driving downtown just yet. But just know that there's four billion dollars of active construction going on downtown in Jacksonville. And that does not include the recent stadium renovation deal that was just signed. Well, it's not signed yet. That was just approved by City Council, which is a 1. 4 billion renovation and economic driver for our downtown. All of this activity is leading to more people living downtown, more people eating, working, playing, more amenities downtown. That becomes a talent attractor and employers, more employers want to be downtown. Of which JWB is one of those employers as we are moving our corporate headquarters to downtown and what this will do for all of our JWB clients who buy in our neighborhoods, which surround downtown Jacksonville, you're going to see additional home price and rent price appreciation. And the best thing is everybody wins here because median incomes go up. Our residents win along with this because we get a better quality of life, more amenities, and median incomes go up for our community. And you as an investor get to benefit from that as well. So, I hope you join us for our continued future shows. We're going to go more and more in depth into the downtown conversation. And hopefully you even come and visit us. We do a summit every year. We'll do the next one. Q1 next year is where you can come down and see it for yourself.

Pablo Gonzalez: 1:16:19

You see, you know what you didn't say that our community said immediately. And we just sat here talking for 10 minutes, like idiots without saying the number one reason. What's that? The team, we just talked about, you know, like we just talked about the order being, being team, right? Like, so again, Phil encourage you to test that out, right? Like look for. Who are the best property management companies in these cities? do they pass the three tests that we talked about two weeks ago, right? Like. There's two shows ago we did. We talked about the tests of like how to figure out if you're working with a professional property manager. There's a phone call test. There's a technology test. There's a metrics test that I think you're really, really going to want to put them through. I'm running out of time here to be able to like answer that live right now. But yeah, the team is the number one answer. Everybody that does business with JW understands to answer that even before we do, cause we're obviously not going to be like, because we're awesome. but yeah, just highly, highly do that. All right, GC went way over, man. We had a lot of really good questions today. This was really cool, man. I really, I really appreciate you kind of just giving me the mic and letting me play expert this time around. Just based on the lived experience. But I just really, really more than anything can't, can't underestimate what this community means to me, the amount of people that, you know, the 90 people that were here today, right now supporting this are a lot of the Spent there that first year of helping me understand this stuff and helping me like really really like get to know this and The fact that you take an hour and 20 minutes out of your the middle of your like work day to still be here 60 plus really means the world to us and Speaking of our community next week, we are bringing on a legend. If you have ever heard anybody tell you that it is too late to get started in real estate investing, that is because of one thing. What is a GC? Because they haven't met. Ken Malin who started in his eighties has completely changed his retirement as a fact because of his financial engineering in real estate. Late in life, you need to hear this story. If you think that it is too late for you because Ken's story is one that we. Talk about often. We honestly don't, we should have him on like once, once, once every half, twice a year, I would say. But he's coming back. He's having his five year anniversary with JWB and he wants to spill the goods and tell his story for everybody. It's going to be amazing, GC. So make sure that you go to that show up next week. Any final words for you, buddy?

Gregg Cohen: 1:18:43

Special, special communities. Ken and his family are so special to us. I hope everybody joins us to hear his story. Pablo, you're special too, man. You're really special to me and to this community, man. It's been awesome to see your journey. So thank you, everybody. And Pablo, if there's one thing to remember for everybody here, it is Don't be average. I'll see you on Tuesday. See you.