Not Your Average Investor Show
Not Your Average Investor Show
415 | Rental Property Horror Stories: Examples Of Bad Deal Sheets You Want To Avoid
It is so easy to fall in love with the numbers when you look at rental properties. That's why we love them.
But numbers can also be used to fool you.
That's why we're breaking down deal sheets with bad numbers, so you never get fooled again!
Join us for this week's Not Your Average Investor Show where Gregg Cohen, co-founder of JWB Real Estate Capital, and show host, Pablo Gonzalez, dive into actual marketed turnkey rental investment deal sheets and break down:
- what numbers turnkey providers love to fudge (or leave off altogether!)
- how true-ing up the numbers would affect the returns (aka- KILL returns)
- why JWB rather underpromise than make a deal look better than it is
- and more!
This one is a requirement for anyone not looking to be fooled in real estate!
Listen in as we put these deal sheets to the test!
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https://jwbrealestatecapital.com/nyai/
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https://jwbrealestatecapital.com/turnkey/
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Today, we're doing something we've wanted to do for a long time. Feel like we've been asking the community to send us other deal sheets, right? Like send us sheets that you're looking for, investments you're thinking about making. So we can take a real earnest look at it, right? Like use us, right? Like utilize the network that you have, the expertise inside of our community. To take a real honest look at these other deal sheets by other providers, and we finally got some. So we're hoping that this is the first of many rental property deal sheet takedowns. We're live for your weekly edition of the Not Your Average Investor Show. I'm your host, Pablo Gonzalez. With me as always, the man that I affectionately like to call GC because of his genius concepts, because he knows how to generate cash flow, because he's a great co host, and because his name is Greg Cohen. Say hello, Greg.
Gregg Cohen:Hello, everybody. Fantastic to be with you today.
Pablo Gonzalez:You like a little extra theatricality. I mean,
Gregg Cohen:when, when your eyes are like bugging out like they are today, people got to know you are super excited to be here. It's a
Pablo Gonzalez:little
Gregg Cohen:coffee. I,
Pablo Gonzalez:uh, I got, I'm in Utah. GC, I flew in last night. My flight got delayed twice and diverted to Dallas. So I got in at 3 a. m. Utah time. And, I'm just all hopped up. I'm out. New baby. You ready to go? There we go, baby. Can't
Gregg Cohen:hold you down.
Pablo Gonzalez:Cause you know, you know what we need energy for man. It's for that little, little tradition we like to start with. You know what I'm talking about? Hmm. The roll call, baby. The roll call, baby! We got the MVP Lee kicking us off today saying hello, everybody. Glad to be here. We got a ringmaster in the house, Drew Barnhill. We got the the Our leadoff hitter, batting third today, John Henning, saying good afternoon. Joanna, greeting everybody in the chat. She is our community manager. If you need anything, reach out. We got the Maven from the mountains of Denver, Leslie Wilson checking in. We got the patron Santorius of Northern Virginia, Michael Santorios. We've got the fairy godmother of the Monterey of the natural average of community checking in from the beautiful Monterey Peninsula. We got Laura Colby from Washington state. one of our favorite regulars. Bill Green
Gregg Cohen:checking in from the I gotta stop you. You went so into that that I think nobody even got to hear like the decibels, by the way, it muted you because you were so loud with the Billy Green introduction.
Pablo Gonzalez:Sometimes when I listen to the podcast, I feel like I get censored when I'm for everybody. So translation, the mountain man from the press, justly, perspicaciously propertists. Mountains of Colorado. All right. Thanks for nothing. Billy green. I really appreciate that. Just kidding. We got our regulars, Gary and Rosalind Riley from Marietta, California. And we regard to, we got, Venny Valsimakis saying hello, community first live webinar. New name, Venito Venny. You are welcome, Benny. I hope you, I hope you make a, I hope you make a tradition outta coming, hanging out with us. We got Becky from the Inland Empire. Our couple of our favorite French regulars, ed Lowy. Greetings from Jacksonville finally stopped raining. It's raining like heck out here in Utah. Say that right now. We got the s Shaman of the Mount of the, of the Pacific Northwest. Nadeem Shaw, the early bird. Coming in a little late today, checking in. Dean Curry, Chris trailer, I think that's a new name too. Good morning. JWB teammate
Gregg Cohen:right there. Say hello.
Pablo Gonzalez:There you go. We got big Papa in the house. I love it. When he calls her big Papa.
Gregg Cohen:Papa's making his appearance, man. I got to hang out with pops. We were in Denver this past weekend, man. Lots of quality time with my dad. Cause what were we doing? Pablo? Here we go. Stealers. Here we go. So took pops to go to the Steeler game and go play the Denver Broncos. And we, you know what guys we're undefeated and we're just going to take that right
Pablo Gonzalez:now. To a no, to a no, unlike my teams. Anyways, we don't have to talk about that. We've got the First Family of the Night Traveller Show. The Patriarch and Matriarch, Ken and Carolyn Malin. We salute you. We salute
Gregg Cohen:you.
Pablo Gonzalez:Christopher Lee from Fernandina Beach is in the house. We get, he's back. Charity Graham is back. Saying hello, everybody. Good to have you, Charity. Who else we got in here? We got Archibald Narti from Canada. Narti, Archibald. That's for sure. Welcome. Welcome. Definitely name like Archibald. I love that. That's a good one. Good to have you, buddy. We've got my lady, Jack Chata in the house. Good to have you, Jack. Matt Tushel as well.
Gregg Cohen:First time. You know who Matt Tushel is? Tushel. Matt, so Pablo, you and I were at JacksRia this past week and we had the opportunity to share our real estate market update as we did on the show. So we got to do it live for the investment group here locally and Matt Teuchel came up to me after the show and he said, Hey, You probably don't remember me. And of course I did. Matt was one of our very first interns at JWB some 15, 18 years ago. And so we reconnected. So Matt, so nice to see you here, buddy.
Pablo Gonzalez:Probably don't remember him. He clearly doesn't know you very well, buddy. All right. Eddie Harris from hot land of checking in Matt. Good to have you, by the way. I don't mean to. Make light of that. Aaron O'Neill, our favorite name to pronounce into the light. Aaron, good to have you back. Not feel like, feel like we haven't gotten to say your name very often lately. The legend, the man with a hockey arena named after him, the number one referral source of customer based referral source from JWB. Roger voicing it from Charlottesville, Virginia. Good to have you, Roger. Always nice to have a legend in the house. Jeff Pettijohn from Missouri checking in here. Pedro Nacianceno from Jersey. Pedro, we've been, uh, we've been seeing your name, man. You got your first property. We're thinking about inviting you on the show to see if you want to be a guest investor. Let me know in the chat if you want it, Pedro. I want to have you on, buddy. okay, cool. Let's get into it, GC. before we get in, I've heard that we've got some breaking news, buddy.
Gregg Cohen:We do, we do. We have been riding this train. You know what train we've been riding lately, Pablo? The interest train? The interest train that is lowering the interest rates. That train, baby. Choo choo, baby. We have been having some really good news coming from the interest rate world. I've been sharing it with you even before this train started getting on the tracks. here in the Not Your Average Investor Show community, we talked about how rates were likely to come down and just what a positive thing that is for us as rental property investors. Well, guess what, guys? More good news continues to come, in the form of lower interest rates. I wanted to share with all of you that JWB clients now are closing at an interest rate in the four percents. Again, in the four percents, 4. 95 percent is what JWB clients are closing at recently. So Absolutely great news for us, but it's not just great news because your cash flows are higher. The urgency behind this is making the connection between buying properties before rates start coming down all the way. Because if you can buy properties before the rates come down, not only do you get lower Interest rates right now, 4. 95 percent is what most clients are recently closing at. But you also get built in equity gains because when interest rates go down, asset values go up. So super excited. What this also allows us to do as rental property investors is to get that positive cash flow and to put less money down. So now we are back into those days where you can put 25 percent down and get positive cash flow. It has been some time since we had been able to do that. So all in all, out of pocket now for those same JWB properties might be 50 to 75, 000, whereas before it was 75 to 100, 000. So if this is your first property that you might be on the doorstep of, guys, it just got a lot easier to get into that first property. Or maybe this is the difference between buying three or four with that same pile of money, whichever way you shake it. It's great news and super excited to share it with you all. It's a
Pablo Gonzalez:good way to shake it, buddy. That's, that's good, man. 25 percent down for positive cashflow. I just want to take a moment and welcome that back. Welcome to the party. Welcome back. 25 percent positive cashflow, lowing some barriers of entry for not your average investors trying to get into the asset class. Still feels like there's a window where you can do that and still lock in that. You know that appreciation because the, the fed hasn't actually lowered the rate yet, right? That's kind of moral of the story here. So stuff's coming down. Fed has, it hasn't actually lowered the rate. We've been over it in other shows. It's not just when the fed drops it. It's when the market believes it'll happen. So that's starting to happen. Thanks to supply and demand 4. 9 seems, seems, seems lower than I thought it would go. Lee is asking. He's the MVP, Greg. You might have heard of him. You know, he knows a thing or two about, about rental property investing. He's asking, is the 4. 9 percent rate coming from the partnership JWB has established with their preferred lenders?
Gregg Cohen:Yes, Mr. MVP, it is. As we will see today as we go into some of the financials of other turnkey property pro formas JWB's rates are a lot lower than what you'll typically find out there. That's because of our partnerships with the lending institutions that we have been doing this for 18 years. I've sold thousands of properties. When you do that, you're able to get better, lower interest rates for your clients. And as always, JWB does not make any referral fee when we refer you to one of our lending partners, because we want you to get the lowest rate possible. So yeah, an absolute reflect reflection of vertical integration right there.
Pablo Gonzalez:Speaking of rates and all this movement in the environment, we have a special webinar coming up in a couple of days, right? We're doing, we're doing one of our bringing back Thursdays with a, with a new buddy of yours, GC, you want to tell us about your new friend Aaron?
Gregg Cohen:Yeah, absolutely. Well, you talk about, one of our lending partners and Aaron Chapman is one of our lending partners. He is somebody that our clients have just had an absolute great time working with and I got on the phone with him a couple of weeks ago. And, you know, it's very rare that you talk with another person in the world that thinks like we do here in the Not Your Average Investor community, who truly gets all five profit centers, who is talking to me about inflation hedging and inflation profiting and you know, how cashflow is important, but it's not. That's not the only thing we need to get more excited about the other profit centers. And he was, he was like a member of this community. And you don't normally see that. And you don't normally see that with lenders as well. But Aaron is one of our lenders. And we wanted the opportunity to introduce you to land to Aaron. Aaron's going to bring all of his folks and all the folks you know, in his community as well to come and. Come and rub elbows with us in the Not Your Average Investor community. So we're going to host a joint event on Thursday and wanted to invite you all. I think you all will get a tremendous amount of value and it'd be great for you to meet somebody behind the, behind the curtain here as many of our lenders are, so you get to know kind of who is serving on the, on the financing side.
Pablo Gonzalez:Do things on that. Joanna just put it in the chat. All you got to do is click in. I saw that the MVP Lee already registered. So if you want to join us again, we know that we used to do Tuesdays and Thursdays. We know that some of you want to hang out again on a Thursday. We would love to have you right when we're introducing other audiences to kind of our show, the best representation possible is to have you in the chat doing what you normally do, adding value, being smart, Being funny, all the things that we are, that we're kind of known for and I just got to say, you know, Lee's the MVP and I can't believe he just asked that question and it set up a perfect reason to like, I almost forgot that we had to talk about that webinar, but because Lee asked that question, I was able to, I was able to bring it up. So MVP Lee. Living up to your name, buddy. I appreciate
Gregg Cohen:it. Well, let's do that. And let's also send some heartfelt wishes. I hope everybody in the community just send, Lee a big, a big virtual hug, uh, some prayers, some thoughts. He's going to be going through something here, uh, medically. And, Lee has been here from day one in this community. It means so much to us. gives his time freely to help everyone in the Not Your Investor, Not Your Average Investor community. So let's give them all a big hug, big high five. We're thinking of you, Lee. And we know you're going to do great.
Pablo Gonzalez:Only the biggest hugs for Lee. Cause that's what he knows. All right. You see, let's get into our topic. That is the topic of the day, you know, you are not one who likes to throw shade at other people. I know that you get very uncomfortable when you are essentially like exposing other other operators, other folks in the space. But this is something that we've been wanting to do for a very long time. Cause from my, from my perspective, I feel like, I feel like I was like a born rich kid, right? Like I've only been born into real estate investing through knowing what JWB does. And I have very little concept of. You know how others operate and that's why when other people are telling me Yeah, what I mean, but so like 11 12 i'm getting this like thing. That's like an 18 That's a 23 Why would I go with jwb? I always fall short of being able to answer that only believing that you know Jwb under promises and over delivers because it's one of your core values, but never really having the tools to speak to it is that kind of why you wanted to have this show gc? You
Gregg Cohen:you know, after doing this for so long, I get sad for investors out there when they make a decision that they think is a right one. but just ultimately they fall victim to some of these, Budging of the numbers and they fall victim to advertising really, really high returns on investment and cash flows. And I just see it over and over and over again. And I get sad when you have somebody who has worked up enough courage to get into this space, to make that first investment. Many times they're not investing in their own backyard. They've they've learned that they can do this in other markets. They work all that courage up and make their first investment. And you know, ultimately it's a flop. And it's a flop because the numbers that they were put in front of them were never real. And I've just seen it so many times. I get sad for that investor out there, because many times when an investor makes that decision, they have a poor experience. They never come back and they miss out on this asset class that can really change their lives and change the lives of everyone around this investment as well. You think about what our, what our country needs and more affordable housing and raising up our communities and more supply of housing, right? If people could see how, how much good is done in this asset class. As well as the investor doing well, I think it can really change the world. And so I get really sad now when I see it, I've been doing it for 18 years. I largely was quiet about it for a long time. I think as I built up my own confidence in the space over three years, five years, 10 years, I started to get. a little more aware of it, but at 18 years now, I can't be, I can't be quiet anymore. And there's a way to do this where I'm not going to throw shade at anybody because that's not who I am. But I am going to point out in other real evaluations of what things just aren't. Just aren't fundamentally sound. Just don't make sense that you can use this as a learning opportunity so that if you are on the doorstep and you're deciding this property in this market, what should you be looking for? So that either it's a great deal and you're set up for success or it's not. And you move to find greener pasture somewhere, but I don't want you to be that person that comes in for your first deal under false pretenses and set yourself up for a flop because I want you in this asset class and I think you can do great things for you.
Pablo Gonzalez:Yeah, the whole it's why we have to be not your average investors because most the average person out there has had a bad experience And therefore if we don't have this like community of us That know that there is a good way to do this and a right way to do this and it leads to a good experience You know, like we need that to help everybody out. So they're not just like punting on at the moment They got some bad news You know reminds me of You My lady, Jag Chata, who, who put here in the chat, right? Like her first investment, 3x misrepresentation on property tax and the PNL and a turnkey property that was not rehabbed, right? Like there's folks here that remember that show. Drew Barnhill was talking about the amount of fraud in the syndication space in the last couple of years and stuff like that. and then Patriot Santorio says. The challenge is many people hear about the fraud, but not many share the wins, right? Like people love to share the bad news, but then they'll, they'll keep it to themselves, which I think, you know, a little bit about that too, right? Being a, being a humble guy. So GC does what GC do, which is he put this like very, very valuable presentation here for, for all of us. And, I'm just like everybody else in the community. I'm, I'm going to be a student throughout this as he teaches it. It's this idea of rental property, horror stories, examples of bad sheets of bad deal sheets. You want to avoid a couple of little housekeeping rules, right? Do you see, you want to give a ye olde
Gregg Cohen:disclaimer? Ye olde disclaimer. Yes. I love that. You know, we're going to be sharing. Some return expectations, some of them I'm going to point out are unrealistic. But we also going to be, are going to be talking about numbers here. Anytime you are thinking about making an investment, please do your own due diligence. I'm so glad you're here, but consider this a starting point of your own due diligence. Because returns on investment are estimates. They are not guaranteed. If anybody tells you they're guaranteed, you should probably run for the hills. And I am not a financial advisor. We are not financial advisors. So please surround yourself with those that can help you make a good decision.
Pablo Gonzalez:And as usually happens when GC has puts together a great presentation we like to share the slides. Y'all like to ask for the slides. We've started doing it, reducing friction by offering to text it and we'll send it. But we, we haven't tell what we haven't told people is that you're actually getting tieras. Phone number. Tierra is the one texting with you. I think when we do this, folks think like it's just going into some like computer black hole AI automated spam, something or another. and the conversations are kind of funny when you look at it, but this is, this is Tierra everybody. So you can ask real questions. You can get real legitimate responses. You can actually make a friend. It's not, it's not a robot. course be nice because it's, cause it's Sierra and anything
Gregg Cohen:else there at GC. And then if you could be so kind as to just ask her and just let her know which slides you'd like. We do have a number of these presentations, do it over and over again. And she's, you know, got relationships with a lot of folks that are texting her. So just say, yeah, I'd like the slides for the bad deal sheets presentation that would help.
Pablo Gonzalez:Gimme the slide, gimme the slides for the bad deal sheets, please. All right. So, alright, gc, you have this is the Fudge there, you, you've, you've got a list of, and I'm gonna go on and off of slides'cause I don't want just a bunch of texts on here. But gc you gotta, you got a list here. You can always get it right. I like, I like the disclaimer. Nobody looks at screenshots. Y'all have, you're taken a screenshot. You're never gonna go into just text Tiara at the end of this and you'll get it. But, um, yeah, we should
Gregg Cohen:put the number out there for Tiara. What? It's, uh, nine Oh for our friends on podcast land. So nine four. Oh, that's 9
Pablo Gonzalez:0 4. 2930341. Again, Tiara, 904 2930341. Let her know what presentation you'd like. And of course, give you, give her your first and last name and your email address.
Gregg Cohen:A hundred percent. So, all right. As I was sitting on the plane yesterday, putting this together, I'm thinking, okay, Let me first identify what are the most common ways that the numbers are fudged that I see in the turnkey space. And then let's go and look at one of these evaluations and then I'll kind of fact check each one of these. So I'm going to go through, what do I have here? One, two, three, four, five, six, seven of the most common ways that the numbers get fudged. And you should think of this as a checklist. If you're buying properties with any other provider. If you're buying'em with JWB, I think it would be a great check checklist. Either way, we check all the boxes, but use this checklist and go through it. So, number one, one of the most common ways is that they do not represent or they under represent maintenance costs, good old maintenance costs. I gotta tell you, if you hold onto rental properties for any length of time you are going to have some maintenance costs. So I won't, I'm never surprised when I see, zero maintenance costs recommended or reflected in a, in a bad deal sheet. I see it quite often. Part of that equation quickly lends itself to vacancy costs as well. They underrepresent or they do not represent any vacancy costs. Vacancy costs also happen. It is a part of rental property investing. So it is a big warning sign if you're going into owning a rental property and the person who's selling you that rental property says that there will be zero dollars of vacancy cost. It's just not going to happen. GC,
Pablo Gonzalez:these two numbers remind me of the kind of like show that we did a little while ago, right? This idea that maintenance costs, there's maintenance costs, there's vacancy costs. Often people leave it off the sheet, but then when it's on the sheet, you also kind of want to know where it comes from, right? Like, is this coming from a book? Or ChadGBT, is this coming from like bot data or are you giving me actual performance figures of like how your properties have performed over the last over the last 10 years or whatever, right? These are performance numbers that people should have proprietary data on.
Gregg Cohen:Should. You should require that. I think about if just minimum standard here of like. entrance to potentially thinking about doing business with somebody, you better see a number there for maintenance and vacancy costs. And it better make sense. And we'll kind of go through what that means in the presentation here today. But that's step one. Step two is asking what Pablo just asked. Okay. Now I see a number for maintenance and vacancy costs. How'd you get that number? And that answer to that question should be, you've been doing this long enough That you tracked and measured your own proprietary internal data to give you that answer. Anything less than that is throwing something against the wall. Got it. Give me the other six, man. We've got, underrepresenting interest rates, down payments, and closing costs. There's usually an interest rate on there. Many times it's way lower than what is actually being closed on by their clients. Because this is an easy way to bump up cash flows and to bump up return on investment and to get people excited. And many times people don't find out that that rate was never real until. They're too late in the process. They've already put down their binder deposit. They've already gone through the loan process. They've given all their financials and they come out and they find that the interest rate was maybe a point higher than what they were told and it throws the whole deal off. So, don't fall victim to that. The next one is that they do not include or they underrepresent property management fees. You see this a lot in companies that sell these properties that are not vertically integrated. Somehow in their mind, they say just because they're not earning the property management fee, that you as the investor are not going to pay it, which makes no sense to me. But that is a common way. I mean, if you want to juice your returns, just don't include You know, property management fees don't include tenant placement fees, don't include lease renewal fees. It's an easy thing to juice the returns. Next, we've got one of the biggest things that really sways the numbers is that they over inflate home price appreciation and or rent price appreciation. And most of the time it's home price appreciation. Because if you just put a number out there that maybe we got in the last Three years on average, or a number that you heard from some article about some other market across the country. And it's way higher than what reality has been for the average of the last 40 years. You can juice your returns. You can double depending on how high you go. And, you know, you gotta know that turnkey property companies know this and they seem to believe the higher the return, the easier it is for them to sell, which it might be. But I can tell you that, ultimately if you are managing money and you're responsible for actually reporting on your returns the, you know, the music's gonna stop there unless you report and project. actual, realistic home price appreciation, rent price appreciation based on data over full market cycles. And most don't have access to this information.
Pablo Gonzalez:Yeah. These, those first two bullet points, you see these performance numbers to me feel like it's almost like you can, you can, if you don't include them, you're obviously doing it on purpose. Right. But then you can put a number in there and you can think that it's real, but it, but it may or may not be right. Whereas like these last three underrepresenting interest rates, down payments and closing costs, not including property management fees and projecting higher home price appreciation or rent depreciation by like exaggerating it over like recent data instead of like a 40 year average or whatever. These almost feel like intentionally malicious, right? Like to like leave this off, to like fudge this. These are all numbers that you really should know going into the deal. And if you're not presenting it to somebody like, like everybody should know these numbers, right?
Gregg Cohen:Help me understand, because I want to see how strong of a stance I take on this. So help me understand, are you talking about like rent price and home price appreciation numbers that would lead you to believe that it'd be malicious, that they don't? Don't get it right. Yeah,
Pablo Gonzalez:man. I just think if, I think if you're bringing someone a deal and you're not already really having their interest rates and their down payments and closing costs, and you're not clear on that, you're either stupid or malicious. Um, if you're, if you're, sorry, go ahead. You can. Yeah, no,
Gregg Cohen:I, man, I, I'd walk that back a little bit. I really would. Because I think you guys can be the judge of what's malicious and what is just not, you know, not aware I'll tell you I have I've seen a lot of deal sheets seen a lot of property evaluations I have never seen another property evaluation that had data that was based on the type of data that we see. We pay consultants to get that type of data here at JWB. And I have it for every other market in the country. And I've never seen one of our competitors actually use the data that is industry knowledge. That is, that is high level industry knowledge in their, in their deal sheets. I've never, I've never seen it. I mean, I would be, I would be shocked if I ever see it because, you know, home price appreciation and rent price appreciation is something to me where you got to want that data. You got to pay for that. You got to really want it because there's so much information out there that can kind of feed whatever narrative you want to create. If you want to create a narrative where home prices are going up 8 percent a year, you can go find an article on a major media outlet that I'm sure reports that. You know, so I would walk that back. I don't think that that is malicious, but I do think there are some things on these evaluations that are, and I'll let you all be the judge.
Pablo Gonzalez:Yeah. I mean, Leslie, Chris and charity are all talking about how they've all been sold properties that did not have property management fees included in it. And it being like a giant shock. I have a hard time. I have a hard time not attributing malicious to that. It's like, how do you not expect anyways? Maybe I'm just being too harsh. Maybe, maybe I'm spoiled because I've only been in the JWB ecosystem, right? Like they're, I'm sure this is a harder business to run than you guys make it look.
Gregg Cohen:There, there'll be some, as I share these with the group and with you, there'll be some you'll, you'll jump on even more than just being a few points off for, for some of these. Then I'm going to,
Pablo Gonzalez:then I'm going to cool it down. All right. Finish off with the last two points and let's get into some real advantages. Absolutely.
Gregg Cohen:So last two, they inflate the return on investment calculations by not including selling costs. Selling costs would be. Realtor commissions, holding costs, closing costs, when you actually sell the property. If you're, if you are creating a return on investment for somebody, you not only talk about the good things, the income, right, the returns, the profit, but when there are costs associated with selling it, you have to include that as well. If you are being, a responsible projector of estimated returns, and you just, you just don't see it very often. And then lastly, and this is the biggest one, I see this almost everywhere now. I didn't see it 18 years ago. I didn't see it 10 years ago. I see it almost everywhere now. And I want everybody to perk up here because this is a very common thing to do. Turnkey companies inflate their year one return on investment numbers. They inflate their year one investment. numbers, return on investment numbers, by including the longer term hold profit centers. And the longer term hold profit centers only happen when you sell or refinance the property later on. Right? They only happen later on. But what they do is they count the income from these longer term hold profit centers in the first year. And they inflate returns by doing that. The longer term hold profit centers would be your principal pay down and your home price appreciation. Because when you calculate returns responsibly, it's all about when the money hits your bank account, right? Net income hits your bank account. Tax savings can hit your bank account in that year. But principal pay down does not. It pays down your loan for you and you don't get the benefit of that in year one. And home price appreciation typically does not as well. And of course, these are sold as long term holds. So to count the home price appreciation in year one and to not count the costs and also to count principal pay down in year one is juicing your returns. This is the biggest thing that turnkey companies do. And I'm going to break down just how much that juices your returns as we go through the presentation today.
Pablo Gonzalez:Yeah. I know that that's a pretty abstract thing, but there's definitely a full slide on that one. So, let's get right into the example. What do you think, GC? This is a rental property that you found, being sold as a turnkey in St. Louis, Missouri. Again, if you're on the podcast or you just want to go ahead and text Tiara right now to get the slides and you can follow along, text 904 293 0341. Let her know that you want the rental property horror stories thing and your first, last name GC, what are we looking at here?
Gregg Cohen:Yeah, so we should all be going into making this type of decision following the three step process. And the order of the steps is really important. Your first step should be doing your due diligence on the provider. It is the team behind the investment that is going to make this successful for you. or make sure that it's a horror story for you. So, I know of this team, but I don't know them in and out. So I just went and did a quick search of their website. And the first warning sign that I saw is it's right there on the homepage is that they are promoting that they are third party property management, and they talk about how they're going to refer you to a third party property management company that they have a good relationship with. Pablo, why is that a big warning sign?
Pablo Gonzalez:It's now in year two when something goes wrong, it's not that person's fault anymore, right? Like they can like pass the buck and, and the property management company can also say, yeah, but they sold it to you this way. It's not something we could have done, right? Like it just, it becomes that Spider Man meme where it's like Spider Man pointing at Spider Man, pointing at Spider Man, right? Like in a,
Gregg Cohen:in a circle. It's the blame game, right? There's a million examples of that, but it all comes down to no vertical integration. The biggest warning sign of not being vertically integrated is that there's a third party property management because guys, this investment is all about the management. It's all about the management. And you want to make sure that when you are paying your money, when you're buying a property, the person who sold you the property. is also that same company that's responsible for collecting the rent because then you avoid the blame game. So first warning sign, no vertical integration. I also thought it was important to note that they talk about day one cash flow, which is great. We all love day one cash flow, but they talk about how their lease terms are one year lease terms. This is very normal in property management. And this is a great sign that it is a third party property management company that is not vertically integrated. I'll tell you that many providers don't make it this clear that it's a third party property management company because they know that this is a question that most investors ask when they're buying turnkey property. So they don't make it as clear as this company. But ask that question, is that third party property management? When you ask that question, ask what's high, what, what length of lease they sign. You want it to be two or three years because this will lead to lower maintenance and vacancy costs for you and overall better client experience.
Pablo Gonzalez:Yeah, again, we talk about it all the time, this idea of as an investor, kind of like your, your least favorite moments are when your property are not occupied. So you definitely want to have a partner that is like thinking about how can I reduce, The amount of like incidence of vacancy and it feels like the way that you reduce that on the front end, the way that you evangelize it is, you know, making sure that you're signing a two, three year lease right off the rip. and that just means that your property manager has to work a little bit harder to find right fit residents that are made for investors and not just made for somebody that's just trying to like turn and burn through that thing. Right. And once their house back in a year or whatever, right.
Gregg Cohen:Yep. And let me show you how all these are related too, because I don't know another property management company that signs two and three year leases that is not vertically integrated. And the, the financials for a property management company simply just don't work because you work way hard as a property management company. And if you only sign leases, two or three year leases, you are reducing your tenant placement income by doing that. And the financials just simply don't work as a property management company. That's why you have to find a vertically integrated company. Like JWB, we make the majority of our money by home sales. And we are willing to give up tenant placement fees that we could otherwise earn because if we do a good job on our property management, you're going to come back and fulfill your buying plan with us and buy more homes and tell others about it. But if you're just a standalone property management company, you don't have that. And you can't give up 25 to 55, 50 percent of the financials, which is what you would be giving up if you only signed two to three year leases.
Pablo Gonzalez:There you go. All right. So let's move on to the next one, which is the other thing we talk about, right? Team and then market. Talk me, talk me through this one, GC.
Gregg Cohen:Yeah, absolutely. So I did some, some high level research on the St. Louis market. Again, this is, you know, not only do I know about Jacksonville's market, I have data on every market out there, the top hundred MSAs in the country. So it really helps. us understand how, you know, our investments perform in Jacksonville. But I also know more about St. Louis than the providers know that they're selling properties in St. Louis. And I'll show you an example of that. So, as I just did some high level research here, The second warning sign here is that St. Louis is not a growth market. And here's some numbers to show you what a growth market really looks like. I put together the numbers for home price appreciation, rent price appreciation, population growth over the last five years, and income growth over the last five years in St. Louis, in Jacksonville, and then across the U S and what you'll find in St. Louis is that homes appreciated at a rate of 3. 7 percent per year. Rents appreciated at a rate of 3 percent per year. Population is flat over the last five years. And income has grown 15 percent over the last five years. So if you don't have access to this data, number one, you don't know that. And then you don't know how that relates to a real growth market. And you don't know how that relates to the U. S. overall. But I made it really easy for everybody, right? Again, you have to want this data, right? If you're in St. Louis, do you really want this data? By the way, it's not making you look good. So are you going to pay for it? Probably not. Right. But in Jacksonville, I wanted to show you what a real growth market looks like. So in Jacksonville, over the last 40 years, home prices have appreciated a rate of 4. 9%. Some of you may say, Oh, 7. That's not all that much. Let me tell you, that translates into hundreds of thousands of dollars when you own properties over a full market cycle. And then rents have gone up 3. 6 percent per year. So Jacksonville is the only market in the country where. Home prices have gone up more than the national average. Rents have actually gone up more than the national average. Our prices are below the national average. And our population growth is over 2 percent in the last five years. And you can start to see it here. Population growth in Jacksonville over the last five years, 2. 2%. So let's just stop there for a second. St. Louis is net neutral over the last five years. Jacksonville has grown 2. 2%. What does that, why does that matter to you as an investor, Pablo?
Pablo Gonzalez:Man, it's risk mitigation. It's supply and demand. It's the idea that I know that if my population is growing, that like, Workforce housing asset class is always going to be strong. It's always going to have, you know, really good fundamentals to it. I, I mean, I, it's funny because the first time that you told me that we're like the only, you know, we're the only market with growth, growth above 2%, I just wasn't that impressed by the number of 2 percent growth until you look at St. Louis at zero. And the fact that the average that us has 0. 4%, right? Like we are growing at a rate. what is it? Four, five and a half times faster than the rest of the United States. That to me is super significant.
Gregg Cohen:I'm so glad you brought that up because when I looked at the growth over the last five years, I looked at 2. 2 percent Jacksonville. I was like, Oh, I don't know how great that is either. You got to have this data. The person you're investing your money with, your retirement account with, building your retirement account with has to have this perspective. Right. But when you see, listen, a lot of people have been moving over the last five years. Where are they moving to? They're moving to places like Jacksonville. You know, people are actually net neutral in St. Louis, right?
Pablo Gonzalez:Totally.
Gregg Cohen:And then income growth is a factor of that. Our income has grown over 24 percent in the last five years in Jacksonville. It's the fastest median income growth in the state of Florida of any major city in the state of Florida. And over double, well, I guess, right around double over what it has for the country overall. So these four signs are what you look for to see if you're in a growth market. And if you want to hold assets in a market where there's a risk mitigation and high upside, these are the things you need to look for, numbers that look like Jacksonville's.
Pablo Gonzalez:Yeah, and this doesn't even like, I guess, home price appreciation and rent price appreciation, you know, home price appreciation will show up on a deal sheet. Rent price appreciation might not be there as a number, but you see it kind of like as you look at what their assumptions are for, for rent appreciation. But this idea of like population growth and income growth That to me feels like the number that you're not going to get on a deal sheet that will tell you if somebody is likely under promising, over delivering, or over promising and under delivering, right? Like, I see these numbers of income growth twice as fast as, you know, twice as much as the United States. Population growth, More than five times more than the United States. And I got to think that while my home price appreciation is 4. 9 and rent price appreciation 3. 6, it's 6 and growing while like I look at 3. 7 and three for home price and rent price for St. Louis. And I think it's, that's, that's as good as it's going to get. It just is what it is. Or maybe it goes down, right? Like.
Gregg Cohen:I don't know. There's a lot that goes into into home price appreciation and rent price appreciation. Like, for example if I did this same presentation in 2020, we would still have concluded that St. Louis is not a growth market. But listen, home price and rent price appreciation, I'm sure went up from 2020 till now in St. Louis. Just simply because we all know what happened to real estate since 2020. So I wouldn't say like it's 100 percent not going to happen in St. Louis. And I also want to give the other side of the story here. I'm not saying that St. Louis is the worst market to invest in. You know, I just think if you are planning on buying and holding for a full market cycle, your best bet is to be in a market that has. growth potential. And if, if you are buying an asset that you are planning to sell and call it three years from now, and all you want is income, And you have a great provider in St. Louis. Well, you know what? You're going to get more income. You're going to get more cash flow in St. Louis than you would for the same property in Jacksonville. The reason why I'm such an advocate for growth markets is because the wealth pie at the end of 10 years is going to be so much greater in a growth market like Jacksonville. Even though you're going to receive slightly less cash flow in the beginning. So I did want to point that out. It's not to say that St. Louis is a terrible market, but overall if you're in it for buy and hold and you want to have the biggest wealth pie later on you want to focus on a growth market, not just an income market.
Pablo Gonzalez:Love it. Leslie Wilson, the Maven from the mountains of Denver asks, where could a novice investor find out whether or not an area is a growth market? Can you only get population numbers every 10 years?
Gregg Cohen:Leslie, you know, we would be happy to help you or anyone. You don't even have to be a JWV client. If you have specific questions about a market you're thinking about investing in, we're here to help you. We have this data and we can share it with you on a one on one basis. So if anybody would like to ask questions about a specific market or property, just fire them over to Tierra that the, the number again, 904 293 0341. You can just ask questions to Tierra and somebody on our team is going to be able to provide that information for you.
Pablo Gonzalez:I love that. That sounds cool. Shout out to the mountain man who says he just received notice from JWB about a new two year renewal starting 2025 must be in the water, man. I feel like we've been sharing these like renewal notices, in the WhatsApp chat. I feel like I'm getting more and more of these. It feels like, it feels like there's a strong rental market in Jacksonville. Must be right.
Gregg Cohen:I love it, man. I love it. And thank you all for sharing your success. I mean, there's just nothing like seeing those things fly and just, you know, everybody just enjoying being a part of this community and the success, man. So thank you so much for sharing that guys.
Pablo Gonzalez:All right, GC. Now we're diving further into this property eval. We've got We just got the picture of this house here. We've got a purchase price of 160, 000, three bedroom, two bathroom, single family, 1, 256 square foot, rent amount of 1, 500, estimated property, annual property taxes of 1, 800, estimated home, annual homeowners insurance of 943, 000, estimated annual water and sewer. Lawn water sewer of zero estimated vacancy, annual vacancy expense of 900 bucks. Estimated annual maintenance expense of 900, and an estimated annual management fee of 1026. What a, what is wrong with this picture?
Gregg Cohen:You know, on the surface here, I didn't see much that was wrong. I don't know enough to know exactly what the property taxes are there. I know property taxes are quite low in St. Louis compared to the rest of the country. I actually looked up what the property tax rate was so nothing to me jumps off the page as being you know, out of the ordinary. But I do want you to make special note what you see at the bottom there that they do have an expense of 900 for vacancy and 900 for maintenance. So just keep that in mind a little, a little precursor to what's coming down the pike here.
Pablo Gonzalez:All right. So, and then we go further down the sheet and, and let's go back for a second actually.
Gregg Cohen:Because I just saw somebody who put something in the chat and talked about the 1 percent rule. So when people are talking about the 1 percent rule, what I often help them, um, you I try to help them realize is, you know, we got to look beyond cash flows. We got to look beyond the 1 percent rule, but I just look here. 1 percent means that the monthly rent is about 1 percent of the purchase price. And so you can see here, purchase price of 160, 000, rent amount of 1500. This is not the 1 percent rule, probably about as close as you may get, but I'm going to show you how that 1 percent rule really unravels here in just a second.
Pablo Gonzalez:Okay, good stuff. That was the MVP. All right, so now we got estimated cash purchase, gross monthly income, 1186 estimated cash purchase, gross return ROI cap rate, 9 percent estimated monthly cashflow finance purchase, 313 estimated annual return finance purchase ROI, 34 percent a percentage withheld for vacancy, 5 percent percentage withheld for maintenance, 5 percent maintenance fee of rents collected 6%. These numbers look crazy to me. It's crazy. They
Gregg Cohen:only look crazy to you because you're a member of this community. This is what normal people see when they're thinking about investing in rental properties. They see these ridiculously high estimated returns on investment. 34%. They see really high cash flow numbers. 313 on a 160, 000 purchase. And they, They don't know how to look deeper. So we're going to look deeper again. Look at that, that fact that they withheld 5 percent for maintenance and vacancy costs. We're going to, we're going to look a little deeper into that. And then management fees, 6 percent management fees. Let me tell you guys I don't know a property management company that is in business and earns a 6 percent management fee and does not I don't know very many like that. I do know some. But they always charge other fees on top of that. Always. The model just simply doesn't really work at 6 percent unless you're charging fees elsewhere. Some of those fees would be tenant placement fees, lease renewal fees, things of that nature. And now I'm starting to see 6 percent here. And now I'm saying, hmm, number one, I, I know there's probably going to be other fees elsewhere. So now I'm, I'm thinking, okay, where else are there other fees? I need to make sure I see that in the eval. But as a baseline too, I want everybody to realize that at 6 percent management, you probably get what you pay for. You're probably getting a low cost provider. Generally, property management fees are somewhere between 8 to 10 percent per month. 8%, 8 to 10 percent of gross rents that are collected. So your 10 percent are JWB, premium service provider, much more than a standard property management company. When I see 6%, it should be a warning sign for you that you're probably getting a very low cost, low service provider and certainly not a premium experience.
Pablo Gonzalez:Is this percentage withheld for vacancy and withheld for maintenance, is that another way of saying maintenance expense and vacancy expense?
Gregg Cohen:You would think so, right?
Pablo Gonzalez:Like, why, why, why say it like that? I don't know. You tell me.
Gregg Cohen:Let's go to the next slide.
Pablo Gonzalez:Okay.
Gregg Cohen:So, I went through all of those seven things that are common ways to fudge the numbers or warning signs, and I'm going to go through each one of them and just fact check. So, the first one is maintenance and vacancy costs, and this is where it's really tricky. This is why you got that puzzle book for me, Bobs. So, it's very tricky here, okay? So, these numbers are not actually included in the 34 percent return on investment that is projected. These numbers are not included. I'm going to show you that in just a second here. So they estimate them at 5%, but they do not account for them when they put the numbers in front of you. How does that make you feel, Pablo?
Pablo Gonzalez:It feels like a shell game, man. Feels like I'm getting tricked.
Gregg Cohen:Yeah. Doesn't make me feel good.
Pablo Gonzalez:Yeah. I
Gregg Cohen:see it a lot. So this is their estimate of cash flow. This is how they get to their 313. And you've got rents coming in, but their only expenses that they're accounting for are your principal, interest, taxes, and insurance, and their 6 percent management fee. Where's the maintenance costs? Where are the vacancy costs? Not there. And that's how they get to 313 of cashflow.
Pablo Gonzalez:Okay. All right. That's huge. Now I get it. So then it's, they put it on. That's why it's withheld just saying this is withheld, but not actually like accounted for in your like monthly accounting, I guess. Yeah, that's weird.
Gregg Cohen:Hard for me to, as somebody who manages money, I manage 1. 3 billion in real estate assets. I have to report on this. That's it? That's all you got,
Pablo Gonzalez:bro?
Gregg Cohen:Yeah, I have a responsibility that when people entrust me with their money, I need to give it back to them just like I told them I was going to. I have to know the costs that come along with it. And when I know them, I'm not going to be able to sleep well at night unless I reflect those in the investments that they take me up on. So it's It's hard for me to understand how those costs should not be in there. I'll leave it at that.
Pablo Gonzalez:What else do you see? Talk to me about like, loan terms and, uh, property management and appreciation. Is all that
Gregg Cohen:good? so loan terms, I thought they were okay here. They actually reflected a 7. 3 percent interest rate with about 4, 000 in closing costs at 20 percent down on 130, 000 loan. All seems very, very normal. I would imagine that, I mean, I just got this, this deal sheet not too long ago. So interest rates at 7. 3 percent seem higher than what they are right now. And I would imagine it's just a timing thing, but at least they're not going artificially low which I see very often. So I thought they were, they were pretty good on loan terms. Property management fees, like we've, like I've hinted at, I don't think that they're representing them well. I think they're underrepresented because nowhere did I see any lease. renewal fees. Nowhere did I see any tenant placement fees and their property management fees are at 6%. I just, I don't see how the business model works at 6%. I've never seen it. And I bought five property management companies as well. So I have a pretty good data point there. It's, it's much more likely they're under, underrepresenting those.
Pablo Gonzalez:Got it. And I'm just kind of showing this slide, this, all this stuff is written out. If you text here, you get all this, but like, want to just show you that it's, it's, it's worth sending it all in, but run it, run us through the rest of these insights, juicy.
Gregg Cohen:Absolutely. So appreciation projections. This is really interesting. So, you know, I'm, I'm trying to see all sides of the story here. They likely underrepresented their home price appreciation and their rent price appreciation, which is really interesting. They only estimated 3 percent for home price growth and only 1 percent for income growth or rent price appreciation. As if you remember on the earlier slide, it was actually 3. 7 percent for home price appreciation over the last 40 years in St. Louis, and it was actually 3 percent for rent price growth. Over the last 40 years. But while they underrepresented this, I think their numbers could actually be a little bit higher in a vacuum just on that one line. But it's not surprising to me. I see this often. I, you know, surprising that many people don't know their own market. And more on more often than that, they don't know how home price and rent price appreciation works, that it is cyclical. And so I'm, I'm not overly surprised that they got the numbers wrong, but here I would say that they actually underrepresented, which is a positive for the investor coming in then, then over inflating them.
Pablo Gonzalez:Makes sense. One of those things that sounds like it's good, you know, I, My first, one of my first jobs, I worked at a smoothie shop and I remember I used to always like overfill the smoothie so that when you put the lid on it, it would like pop out from the straw. And I thought that that was like a good thing because I'm giving people extra smoothie, but the owner's like, no man, that just leads to a mess. People don't really like it. Like think about the experience. I see this as like, all right, you're underrepresenting this. And it might be, I might be able to justify that this is a good thing for me psychologically. But really what you're telling me is that you're not sophisticated enough to know the numbers.
Gregg Cohen:Well, yes, if you know what we know now, that's what you would do. But I just don't think they know. And I don't think they want to pay the money to go and figure it out. I don't think they want it. You know, I, you know, ignorance is a little bit of bliss and they can be ignorant and a whole lot of other things on this evaluation. So if that comes along with it. you know, going a little light on their home price appreciation and their rent price appreciation, I think they make that trade and that's probably what happened.
Pablo Gonzalez:Okay. Talk to me about this ROI and selling costs. And
Gregg Cohen:yeah, now we're going to get to the big ones that really wag, wag the dog here. So did they inflate ROI by not including selling costs? Absolutely. Yes. They should reflect cost of 10 percent of the sales price to reflect realtor commissions, holding costs, closing costs guys that comes out to between 000 of missing costs over a one to 10 year hold. So you start including Costs in this thing, ain't no way you're getting to a 34 percent return on investment in year one. And then to add on to that, did they inflate year one return on investment by including the long term hold profit centers? Absolutely. Yes, they did. The evaluation assumes you'll receive over 9, 000 of income in your bank account at the end of year one from home price appreciation, rent, excuse me, from principal pay down. Guys, that's not how this works. You only get home price appreciation and principal paydown when you sell the asset or you refinance. And there was no projections of selling in the first year. That's not even how this thing is built. If they did sell in year one, they should include those costs, which they did not. And refinancing doesn't make sense as well because you would have to see such high home price appreciation in one year for this to work to where you would see principal pay down actually hit your bank account and refinance in year one. It just, It, it doesn't, it doesn't make sense at all. And these two things on this slide sway the returns dozens of percentage points, which we're going to see here in just a second.
Pablo Gonzalez:That kind of thinking, that idea of like putting into long term stuff in the short term stuff feels like the kind of thinking that people were doing on the run up to the bubble, right? Like it feels like that's where we're like. You know, Hey, I was buying something recklessly because I think in a year I can sell it and everything is going to work out perfectly because all these things are happening and I'm going to make all this money. And all of a sudden you're like stuck thinking short term in a long term scenario,
Gregg Cohen:maybe I see where you're going. Basically people had a really short term mindset and they were counting on a lot of profits in a short period of time. I think what most people were doing were they never looked at it this way, but if they did, they would have adjusted it to like 10 percent home price appreciation per year or 20 percent home price appreciation per year, you know, because what we're talking about here is just fundamental understanding of how money moves. and how returns are actually reported on. This is, this is the IRR mentality, which is the, the generally accepted way of making decisions and analyzing financials when your cash flows are variable and they come in at different times. And that's what a rental property is. So there's, if you only look at it in year one numbers, you're just, you're kind of creating a return on investment to serve a narrative. Um, some people just aren't educated enough to know the difference, which I, I understand. And I'm okay with that. Some people know the difference and choose not to, because if they do, what they'll do is they'll take their returns from 30, 34 percent down to like 10 percent or less. And they just are not confident that people will want to buy their asset at 10%. And so they, they make a systematic decision not to
Pablo Gonzalez:make sense.
Gregg Cohen:All right. Give us a final verdict here. What'd you see? Yeah. So what should the real numbers be for this property evaluation? So I put their numbers, well, I see their numbers. They estimated 34%. I use their numbers and I put it into our estimate. So I would, I looked at their property using the actual real ways to analyze an investment like this. And you know what it cranked out 11 and a half percent.
Pablo Gonzalez:So from 34 percent down to 11 and a half percent.
Gregg Cohen:Almost every single time I go through one of these examples and may if you guys like this Please let us know in the chat because this is gonna inform us if we want to do this more on future shows But almost every time I do this it drops those numbers down from 34 percent to call it 10 percent or even less or sometimes even more but there is a huge swing Well, eleven point five percent sounds pretty familiar. So it rang a bell for me. I was like, huh? I know that Right. JWB is expected returns somewhere around 10, 11, 11 and a half percent. So I just wanted to put this out there, right? We have a currently available JWB property at 11 and a half percent returns, which is the same thing that those numbers actually got whittled down to. Purchase price is actually pretty similar as well. The other property is 160. This one's on the lower end. It's 185 is the purchase price. But what do you get even beyond the numbers here? You can see how the growth is going to happen, right? We're going to be able to earn hundreds of thousands of dollars for this investor over a 10 year hold. And you see how the wealth pie. But at this point, what should even mean even more to you is that you get to work with a provider where those numbers didn't change, where those numbers are real and accurate, they've been in business for 18 years, they've generated over 300 million of clients. They don't have to fudge them. You just know they're an 11 and a half right off the bat because guys, those 20 30 percent returns out there, they were never real. They were never real. But, you know, you have the opportunity not just to earn a wonderful return at 11 and a half, but to build a relationship based on trust.
Pablo Gonzalez:It's like Matt says here in the chat. It's like, what's frustrating is that 11. 5 percent is an awesome return. And you don't have to hype up the numbers and mislead people to get crazy ROIs in order to sell this concept. It's only hurting the overall ecosystem and the ability for people to like do this and build better retirement plans. Right. A hundred percent, man. A hundred percent. Yeah. I mean, I love it. I love the idea of wanting to work with somebody that's thinking long term already, as opposed to wanting with someone that you feel like you need to double check.
Gregg Cohen:Yes, indeed. Yes, indeed. So this you know, with the changes with the interest rates going down, just wanted to let everybody know about what it looks like to invest with JWB now 50 to 75 K is you're out of pocket here, which is wonderful. It used to be 75 to a hundred K when you had to put 35 percent down to get positive cashflow. Now you get positive cashflow, a lot less out of pocket. Your rates of return somewhere around 10 to 11%. And Matt, thank you for sharing that. That's awesome, man. It's, It is not real to turn your money over every three years. That's what a 30 percent return is. It's, that's just not real. That's not normal. Can it happen? Sure. But it's just not real. Turning your money over every nine to 10 years is awesome. You are going to wind up in a great spot for your retirement or whatever financial goal you have earning 10 to 11 percent return. And we do have multiple incentive packages available. We still are taking care of four to 6, 000 of maintenance costs. For those who invest with JWB. And we do have our multi purchase discounts, which means that when you buy three properties or more at one time, we drop the purchase price by five grand on each of those purchases. I had a friend I set up not too long ago, bought seven properties. Save 35, 000 right off the bat. Yeah. And that's available for everybody. So, so yeah, guys, I saw some of the chats coming in that you guys enjoyed this. I super enjoyed this. I think it like helps me get stuff off of my chest here in this space in a way that you know, I feel comfortable doing it because I am not going to take shots at anybody else by name. That's not how we roll over here, but this is education and knowledge that needs to be shared. And so if you guys are good with it, we'll. We'll keep doing this every so often because I think it's, I think, I just think it serves, I think it serves our space. I think it serves our industry. It can make our industry better.
Pablo Gonzalez:I think it's been unanimously well received, my friend. So, what I would love to see is folks. Sending Tiara in that text, different deal sheets that they've gotten, you know, like I saw Jag say, I would love to see one for Cleveland and Baltimore Jag, like hop on, hop on with a provider over there and she'd be like, Hey, what do y'all got? And then send it to us. We'd love to do it. I think that'd be great. A little, a little different for for us to like jump on the phone with them to get a deal sheet. So, so we can't do it. You need to be our little spies, I guess you could say. Patrons and Torres, Michael Santoris is saying, Greg, some of these other turnkey operators also outsourced their property management to a third party because they operate in multiple markets across the U S. That kind of ties into a, something that he was saying in the chat earlier that like reason why he went with JWB is because you only focus in Jacksonville.
Gregg Cohen:How cool is that, right? To, in the beginning, I wanted people to see that focusing on one market was so much better for you as the investor and so much better for the community that you operate in. But for probably my first 10 years in business, I kept hearing the other question, Oh, when are you going to go outside? When are you going to go somewhere else? And all we did at JWB was plant our flag harder in Jacksonville, because I know this is better for clients. And I know this is better for the community and it's better for our team. And so I love, you know, Michael, thank you so much for sharing that. I hear it every so often now and, and it's in the form of thank you for being in one market. I'm feel better. I feel, you know, better served in one market and there's more good that we can do. And so I love that we're turning the corner on that narrative here. Guys, you know, it's pretty special. And I, and I want all of you to come down and check it out. We haven't set a date for the summit yet. You know, the Not Your Average Investor Summit, our annual meetup, but it's going to come in Q1 of next year. And you guys are going to see the good that you can do by investing in one market with one vertically integrated provider is going to be there for the long haul.
Pablo Gonzalez:I love it. You see, I thought you did a really good job of representing this man. I know we've been looking forward to this for a long time. I definitely learned something right. Like I got some good learning in You know, between you and I, I think I can start using this in some of the classes that I'm teaching for the other groups as well. I think it really illustrates a story. Really, really well. Next week. We got an interesting show. the Robert Kiyosaki we all subscribe to his theories, but that book was written 20 years ago, 25 years ago. he just recently released some thoughts on what makes a good investment and it's two particular qualities. That we're going to dive into, I think it's going to be a really, really interesting conversation of analyzing his new updated strategy and a spoiler alert. workforce housing in a growth market, really fits that criteria nicely, but you won't have to hear it from us. You can hear it from Robert Kiyosaki themselves. I want to thank the community for joining us. Never, never goes unnoticed. So you take an hour of your day to come here, get educated. Be friendly with us, ask some great questions, add value, make a friend, all the good stuff. And, gc, I dunno man, anything, uh, from here till either Thursday or next Tuesday, do you have any little bit of advice for the folks I do that are with us?
Gregg Cohen:Don't be average. See you.