Not Your Average Investor Show
Not Your Average Investor Show
Investing As Rates Drop: Opportunities, Opportunity Costs, & Contrarian Moves To Make w/ Aaron Chapman
We’ve been asking for Jerome Powell to say the magic words: “It’s time to drop interest rates,” and he finally did!
But just because he’s doing his part doesn’t mean investors know what they’re supposed to do with it.
That’s why we’re hosting a special webinar to get you prepared for this next phase of the economic cycle!
Join us for a conversation between a finance expert and a real estate expert to talk about:
- How the real estate market reacts to interest rate drops (the opportunity)
- Why inflation is the biggest reason not to drop interest rates (opportunity cost)
- What sharp investors do to take advantage of one while hedging the other (not your average strategy)
Our finance expert is Aaron Chapman, a veteran of 25+ years in the finance industry, where he’s worked with investors to finance 300k+ deals.
Our real estate expert is Gregg Cohen, co-founder of JWB Real Estate Capital, who manages 6,000 properties, is developing 20 city blocks of downtown Jacksonville, and has a team of over 120 people working with 1,700 investors.
Listen to know what’s next with two guys who have seen and done it all in real estate through multiple cycles.
Join our real estate investor community LIVE:
https://jwbrealestatecapital.com/nyai/
Schedule a Turnkey strategy call:
https://jwbrealestatecapital.com/turnkey/
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Welcome everybody to a very special edition, a Thursday breaking news edition of the not your average investor show. The fed finally did it. They dropped rates. further than we expected originally. And everybody is, all hullabaloo around it, but around here, we got a couple of guys have been talking about the effects of this, what's going to happen. And there is no surprise happening. So stay tuned for a great episode. Chime in, in the chat, let us know you're here. My name is Pablo Gonzalez. I'm the host of the Not Your Average Investor Show. With me as always, the guy that I affectionately like to call GC because he's got the 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. Great to be with you today.
Pablo Gonzalez:And a kindred spirit in our quest here to show the benefits of real estate, a man who has done thousands of these real estate deals, finance expert, somebody that marches to the beat of their own drum. Definitely not your average, finance guy out there, which is why so welcome on our platform. Aaron Chapman, welcome to the show, my friend.
Aaron Chapman:Thank you. I appreciate you guys letting me on and allowing me to speak to the audience. And drag some of my own because you know, like you said there's some contrarians on here with us
Pablo Gonzalez:Yeah, we are. We are two communities that do not like to take the average stance and just make it our own unless it makes sense. So, welcome to all of you that are coming from Aaron's community. We got a little tradition in our community when we kick these things off. GC, what's that tradition called?
Gregg Cohen:Oh, the roll call, baby.
Pablo Gonzalez:We got the Lee Bishop, the MVP, Lee Bishop, kicking us off. You're saying hello, everybody. We've got the mystery man, Denny Davis with a woo pig suey, Denny, I'm not going to put my heart into that one. Joanne, our community managers in the chat, if you need anything, let her know me, lady. Jack Chatham checking in. Good to have you. We've got the fairy godmother of the Nutraverage Investor Show community, Jen Filson from Monterey, California. Good to have you, Jen. The early bird of our community, Dean Curry, checking in from Texas. Columbus, Ohio. We've got big Papa in the house. We love it. When he calls him big Papa, Jay Cohen, the co founder of the co founder of JWB, Greg's dad, Jay, good to have you. My friend. Christian Mercer live from Costa Rica. Buddha. We that Christian Mercer. Good to have you. We got from the Atlanta empire, Reggie. Good to have you with us today. Brianna stamps. I think that's one of your fans with a woo Aaron. Brianna. Good to have you here. Hope you, uh, join our community, make a friend here in the chat. Would love to like, make it a. Make it a tradition. We do this live every Tuesday at this same exact time, 1230 Eastern, 930 Pacific. I know that y'all got both sides of the equation here. And I know that you live in mountain time and West Coast time, and you've got a heavy West Coast contingency, but here at the Not Your Average Investor Show, we got fans from all over the world as well, Costa Rica to Spain. and people take us with us. So happy to have you here. And I'm just going to kick it off. That's what we call the topic of the day around here. Timely, timely announcement from the Fed yesterday. They've been teasing this rate drop for multiple Fed meetings. We thought originally it was going to be a quarter percent drop. They ended up dropping it 0. 5, right? So Aaron, I know that this is something near and dear to your heart. why don't you let us know what you're thinking about this announcement and how it's affecting the way that you, that you're going to proceed.
Aaron Chapman:Oh, of course, this is the one thing people keep talking about. Been talking about the massive topic of discussion since the beginning of the year. Fed's going to drop it five times. I'm looking at it's like, guys, the way inflation is looking for my perspective, I didn't see it. I finally conceded in the last couple of months between myself and a guy named Patrick. I come onto YouTube a lot with, I said, I'm going to see it. We're going to see it one time in September. So we saw it one time so far. He's claiming two or three times. We'll see how it ends up in the year. ultimately, it didn't really have this big market movement. Everybody anticipated that I'm getting all these phone calls that I just dropped the rate. Can I re lock my lung? Can I cancel my lock and get another lock? So guys, it actually didn't affect the market whatsoever comes to Maurice back securities. It actually kind of made a little bit worse. Now, why is that the case? So it doesn't make any sense. The Fed just dropped the interest rates. Well, what is the Fed? The Fed is the bank of banks. All they did is say, Hey, when you borrow money from us, Bank of America, Wells Fargo, Chase, any other banks, you're going to pay less money to us than what you were before. Now that's going to trickle down eventually into the market. But what does that also do? When money becomes cheap, people start spending money, right? Well, then you, it can be a slightly inflationary thing. We've had. Inflation continuing to push the dollar dollar down in value have an effect on our economy They've kept it tight towards finally started to recede The fed's been talking a lot about what's going to drive what what's going to make them make a move It's going to be jobs where now we're seeing jobs taking massive hits and just in the last month We had the, the information come out from the Bureau of Labor Statistics saying, Hey, we miscalculated by 818, 000 jobs. We were off by nearly a million jobs and those million jobs that really didn't happen. And then you factor in the jobs that did happen, 50, 000 per month were, were, were government jobs. What's really happening to our economy. And I, I personally believe this is just Aaron Chapman. This is not coming from any other place that Powell finally had somebody headlocked. Powell said, you do this. Now they wanted more than one and three quarters. He did a half. He's always been the contrarian that's happened, but let's just show you guys the effect of this. I'm going to show you the mortgage backed security. I don't know if you guys are familiar with this Pablo. Have you seen him before? Greg, have you seen it? Maybe what do you got? Okay, so i'm going to show you guys the the actual mortgage backed securities that that that show that Basically dictate our interest rates. This is going to be what's called the 5. 5 coupon. This is what I follow So this right here References the value of this security as it trades minute by minute Since back in uh, what is it? Uh back? I think it was may of 2008 We're going all the way back there So this is that full security this right here is trading before quantitative easing the fed actually injecting capital in the market to bring rates down in 2009 And everything above this line right here references the value of the security when the federal reserve is punching money into it So the federal reserve started putting money in right here. This represents 8. 9 trillion dollars invested by the fed Until right here, which is the end of October 2021. And then the bottom falls out of it. Interest rates spike. So the reason I bring that into this point, to understand for people to see, is this is where you go to see what's happening with the rates, minute by minute. So I spend my time starting. So this is right now. This is showing you today, this morning. This is the value of that particular security. I'm going to zoom in a little bit more for everybody to see it. This is two days ago. This is where the value was. The higher this goes, the lower the rates go. Why does that do that? This means money's flowing into this pool of funds for us to lend out as it gets as it gets borrowed and taken out. It has to be resupplied with more investment capital. So more investment capital going in than what's going out. Will mean the rates will keep going down supply and demand as this drops the rates will go up So there's greater demand less supply. The cost goes up. The rate goes up. Well, this was two days ago. This is yesterday This is when the fed announced. Finally, we're going to drop the rate the market anticipated a drop Market hope for three quarters. It got a half. But what we have is a decline. The market actually dropped down and it came back off of its lowest levels to be a positive day, but not a positive day as in the rates going down from the previous day. And this is today. Today we opened at a point higher than where we closed yesterday, but we hit this particular line and bounced off it. Now I drew these lines in. This line is one I drew. This is another line that I drew and this I shaded in here for a specific reason. I'll get into that in a moment. And these right here are your, what they call their, um, your trend lines. You've got, uh, was it a 14 day moving average, a 21 day moving average, a 35 day moving average, a 100 day moving average and then a 200 day moving average. These are the averages of the security over any, any, Period of time and traders will use that as a way to determine where they're going to invest. What's the trends going to be? Should they put money in there? Should they take it out? Where do they think other investors are going to go? So this is important for us to look at this now this shade here This is an interesting thing to understand We have a a support line here that I draw which actually was a ceiling for a very long time And then another ceiling line that I draw here and I shaded it in for a specific reason If you go back over the last few years, this takes us all the way back So when we bridge through this line in March of 2023, we went through this reason we broke down and we kept having this decline in the market, meaning interest rates going up as these go down, rates go up. The reason we had this continued decline was the reporting of the jobs. So if you think back into 2023, we had our current administration talking about what they were doing for the American economy. They're creating jobs, millions of jobs for people. Look at all that we're doing for the, for the economy. Then you get all the way to October of 2023 and it turns around. Why does it turn around? If you go back, that is when the Bureau of Labor Statistics starts coming out and you have AWP, uh, ADP, which is your payroll company, all coming out saying, wait a minute, this is not adding up. And then they started actually reporting, there's a lot less jobs than what we thought. Sometimes these jobs are people having two and three jobs in one household and they're part time. Once that started coming out, the market started rocketing up saying, wait a minute, maybe it's not as inflationary as we believe. When it's not as inflationary, we're seeing a softening of the market. More money goes into bonds than it does into stocks. And we saw this rocket up. And what's interesting is it rocketed up to where? Does that line that I drew and it bounced off, it bounced off, it bounced off it. And I was guessing way back here. I was guessing this is going to be a ceiling. It's gonna be hard to get through. And why is that? Why is that the case? Well, I'm gonna advance us back to 2000 and eight. So after the crash of 2000 and eight, Everybody's life went to hell if you will and then you have the market Not wanting to invest into mortgage backed securities. There are some going on. There's not a lot of people drawing on it That's why it was even as high as it was in value up here Because not a lot of people borrowing if you remember during that crash so and not a lot of money going into it either But there was enough to sustain a specific value or enough volume within that within the pool. But then you have the Federal Reserve come out and say, we're gonna start quantitative easing. So you got Ben Bernanke and Hank Paulson got together. Hank Paulson was the secretary of the Treasury. Ben Bernanke was a chairman of the Fed, and they announced it to the world. So Pablo, Greg, let's just say we're at breakfast one day. Really, really nice restaurant. Three guys come in in suits sitting next to us and we hear them talking. We heard they're going to take their firm is going to drop a hundred million dollars into a specific stock. What is it you and I are going to do the second we leave that restaurant? We're pulling our swab guy by this, this stock right now. So everything else go right here. They're dropping a hundred million into it. That's what the fed did when they announced this, said, we're going to take billions of dollars, if not trillions and invest in the mortgage backed securities. The day they announced it, the market started here. It rocketed up as high as this level here, but receded back here. This was one full days of trading that the entire market decided to jump into this security. Because of what the fed said they were planning to do. Then you move forward to January of 2009. This is the point where the fed actually started investing money in from the, from public capital. And then you get to the point of what we have here, which is the entire security there. So drawing your attention back to this full day's worth of trading. I drew the line at the bottom, the line at the top, and I shaded it all in. Fast forward to where we are today. And what do we have? Uh, That full day's worth of trading is what's going on right here. This is our, these are our ceilings and our floors. I think we're going to be trading sideways for a while. Why would I say we're going to trade sideways in this for a little while? Some people say, Hey, rates are going to go down. We think they're gonna go down to go back to 3 percent or 2 percent like they were because the money, the market moves in cycles. And my lender says it moves in five five year cycles Most lenders in my space that do what I do. I'm a mortgage guy I get people loans for 30 or fixed on a house or duplex triplex fourplex Even bigger units than that. We do it for your dscr loans your conventional loans a lot of people buying houses as investors They're talking to guys who've been doing it for the last five to ten years This all that I just showed you has been happening for the last 15 years So they've been in it for 5 or 10 years. They've never really seen a cycle. I got this in 1997 you you guys know what the conforming loan limit is, correct? Yeah before a jumbo loan Yeah, that's the max you can get as a as a conforming lender You know what the conforming loan limit was when I got in the business. It's about 212 000. What's it today? It's over 800 grand You 800, 000 look at that big difference that's happened. So we're talking about cycles. I was I was present I watched the guys from schwab in my same building running up and down the hallways with their shirts off because the market The dow broke 10, 000 We broke 40, 000 this year. There's so much difference when it's going on the market So when people tell me my mortgage guy says it's going to do this. They've never seen a cycle There's a lot of guys not in the industry that understands this anymore So I think it's really imperative to help people really get to know what's happening in the market what's driving this So to get right back here to show you the chart real quick, and we'll we'll spitball some things together So again, I believe we're going sideways in this channel. That means interest rates are going to stay that direction Now does it mean i'm right? No, it can change We're living in a world right now where for our federal government does stupid crap all the time And they're going to do something that's going to drive things to make people think that they are doing something to help them And we're going to vote for them We have this other ceiling. We can go to this ceiling here. I drew as the next level where I believe that we would have a massive hard stop, which is the day the Fed actually invested money into the into the bond pools. So we have that window time. I think it's gonna be hard to get there. I think we're gonna need to have a significant market crash. That's what happened here on August 2nd over 1000 points of movement to the negative in the stocks. Where did that money go to? It went to bonds. Mhm. And we saw it rocket up there right to that level and then right back down So that's what I want people to really get a good grasp on is what really drives interest rates. It's not the fed It's not them dropping the rates. It's not all these other things that people think it's not the 10 year It has to do with with the mortgage backed securities. Now i'm seeing lee bishop asked here What is that was the 102. 61 amount to that's the price of the security All right. So I look at these values. There's par and there's part. There's a par value of 100, which is what we just broke past that one or 2 61 just says that that particular value that security will probably move to a different bond pool. If we go to that point, it gets there. We're gonna move to a 5 percent coupon or so we will see rates go lower. To be able to define that takes a lot of time. And Pablo gave me windows. So to get into the definitions of that stuff, it really doesn't matter a lot for what we're going on here. And I know that Pablo says, nope, we have to keep it here to 2020 and 20.
Pablo Gonzalez:You're not supposed to show people the magic behind the curtain, Aaron. Sorry, man. Listen, what I love about everything that you just shared that we talk a lot about on the show is that data alone is not enough. It's data plus perspective. This idea of talking to folks like you that have been in this for multiple cycles, Greg, you're a guy that, Got into this multiple cycles ago to doing it. 18 years ago, have built a company that manages over a billion dollars in assets, 6, 000 properties fully vertically integrated, been on the front page of the Wall Street Journal a couple of times. I'm not as smart as you with everything Aaron told me. Like, I think I intuitively get it, but I kind of need you to translate for me. You know, like what am I, as, as a real estate investor, what am I, what am I looking at here?
Gregg Cohen:Well, first of all, what a cool insight that most of us have never actually seen. Most of us fail to understand that on the other side of a mortgage that we're paying interest to, there's an investor on the other side who's actually putting their money and requiring a return on investment. Many people don't realize that. And that's, I mean, that is a major takeaway from what Aaron is sharing here. He's also giving some really detailed technical analysis here. Which is super helpful for a lender to actually know this stuff. I've talked to a lot of lenders in my day, Aaron. I got to tell you, I don't think any of them, any of them are looking at the same stuff you're looking at. So I think it's a really wonderful kind of peek behind the curtain. And I really love how you said most lenders have never been in a cycle. Most lenders have never been in an interest rate environment like we are in today. And most investors have never been through a cycle. And most investors have never been in an interest rate environment like we have today. So I'm going to take the approach of, okay, now that we have, we have an understanding of how interest rates actually work a little bit more, and we have some clear markers that interest rates are going to go down in the near term and over the long term. What does that mean for us as investors? And I'll just keep it really simple. Okay. What we know is that when interest rates go down, asset values go up. When interest rates go down, asset values go up. And the reason is because the costs of borrowing go down, so your cost of owning that asset go down. So inherently, somebody can pay more for that asset and still get the same return on investment. And so if you think about that and think about where you're placing your dollars today can really help you take advantage because right now is such a special time. Just like Aaron was talking about, most people haven't been in this interest rate environment. Well, if I start to think about rental properties now, which is, which is my love, which is what we've built our business off of. In rental properties, when interest rates go down, home values go up. When interest rates go down, home values go up. So if you understand this relationship, you can start to make well educated decisions and buy those assets before the home values go up. And you're going to find that a lot of people are stacking a lot of equity gains. that other people are not because of just simply understanding this relationship. And it's the only time where we have had interest rates this high and the Fed has signaled this strong that they're about to go down. We don't know exactly how much and how far and all that good stuff, but when you have that indication, this is an opportunity for us as not your average investors to do something about it and to take serious steps forward for your financial gains.
Aaron Chapman:It's really good. You point out the relationship between interest rates and and costs of things that people don't quite quite understand your average human being. That's not spending time in their morning to be on a show like this or talk to people like ourselves and dig deep into the understanding of things. They're sitting on the sidelines waiting For the interest rate to drop to be the perfect time and what we've noticed what we do know for a fact if for Every one percent we drop in interest rates, you're going to see a 10 to 12 increase in the asset So the rate drop in reality guys is not an improvement to your overall outcome It's actually a way to drive value up to the people who already have it. So the people who if you're thinking about this like a football game And if you're going to conserve your energy and you're going to sit on the sidelines you're going to wait To that perfect moment to jump on the on the field to get on the highlight reel Guess what? You're going to miss that opportunity because the people who are on the highlight reel are already on the field If you're in the top of the stands, you're never going to make it to the field. You're going to get trampled You're going to get you're going to not only lose out you're probably get yourself stomped The other thing that people don't quite understand Is that when you're when you're waiting in these things and wanting something else to do it for you that you truly don't even Understand real estate investment. You're not an investor. So we're going to break some stuff down We're going to you know myself pablo You're going to do some math brother Hopefully you're ready to do this because i'm going to show people how interest rates really do not matter What it does do is it again drives up the value of your asset think back in when interest rates are two to two and a Half percent your average realtor was saying You Be prepared to offer 30 to 50, 000 over list just to be considered. And then it's possible to pay 100, 000 over list just to get the house. Did a 2. 5 percent rate help you when you pay 100, 000 out of your pocket to get that asset? No, you pre paid for the rate. Either way, you're still paying for it. So Pablo. Ready to go here. We're going to do something. We're going to do something. I love
Pablo Gonzalez:public math, brother. And I love what you're talking about. We've been talking about this idea of you get in before the rate goes down. That's when you lock in that appreciation and you refinance later as you do this. So I can't wait for you to illustrate it, man.
Aaron Chapman:Well, I'm going to show you how refinancing When you refinance, I my old I advocate only to pull cash out and reinvest, not for the interest rates. And I will show you guys why. So Pablo is going to do math. Greg's going to test him and make sure he's doing it right. And the rest are going to make sure these guys are doing it right. So everybody get your your phones out and get your calculators out. Now we're going to talk about about an average property. You might see coming through a J. W. B. Pipeline, if you will. So we're gonna say we're gonna set some baselines,$200,000 purchase price, and we're gonna actually kind of beat it up a little bit. We're gonna talk about a 20% down, less down, because that's gonna give you a higher interest rate. And we're gonna talk about a 30 year fixed loan. We're gonna talk about a a$1,800 a month rent with only a hundred dollars a month in cash flow. Does that sounds so sexy to anybody. It does to our community for sure, bro. YouTube. Yes. There's people that I share that with. I'm like, Nope, I won't walk. I'll walk away from that a hundred dollars a month cashflow on a$200,000 asset. No way. Yeah. Well, I'm gonna show you why this is extremely sexy. Now, a lot of people, especially in this community, 25% down is, in fact, we'll even do it with that. Let's just do it with that 25% down. We'll do the math together. So we're talk about a$200,000 asset, 25% down. What is 25% of 200,000? 50 grand. 50, 000. So with that 50, 000, what do you get in the form of a loan amount?
Pablo Gonzalez:150,
Aaron Chapman:000 loan. So you have one job basically. And we're saying, let's say there's about 10, 000 in, in, in lender, in total fees, lender, title, appraisal, taxes, insurance. So you're investing 60, 000 for 150, 000 The sole job you have a real estate investor is to find a A home you can keep reasonably rented the entire time you own it. You have the ability to raise rents and it can appreciate. That's your job. If you did that, who pays off the 150, 000 loan? The residents. The residents. So it'd be a group of tenants over 30 years. So let's take that 150, 000 divided by 30. What number do you get?
Pablo Gonzalez:150,
Aaron Chapman:000 divided by 35. You get 5, 000. That's 5, 000 per year. And how much did you invest in the house? 50 plus costs at
Pablo Gonzalez:58 60, I don't know, 60, 60, 000. So when I do it, I feel like I'm doing pretty good out here. I don't have a calculator in front of me.
Aaron Chapman:I warned you. So what is 5, 000 is what percentage of 60, 000? as 8. 3%. so that means every year you have somebody else in there paying on the house, they're gonna pay, give you basically 5, 000 because of paying off your mortgage. That means your investment of 60, 000 is growing by 5000 per year just by paying off the loan. That's it. That's an 8. 3 percent increase year over year. What's the S. M. P. Doing? 7 to 10, 7 to 10, somewhere in there. So you're right in there. You're keeping up with the S& P and you have an asset in hand just by somebody else paying off the mortgage, right? So we also live in an inflationary environment. We've talked a little bit about it. You know, the Fed's going to say we're somewhere right around closer to 4%. We're about 12. Let's just be honest. People's cost of living is going up quite higher than that. We'll talk about that here in a second. So, because of that, our homes are appreciating. What are homes appreciating at right now nationally? What's Case Shielder, CoreLogic, Black Knight, what are they saying? 4%? They said about 6. 7. So this is my job to study that crap. Your job is to look sexy. So, so far, we're both doing it. So we've got, so we've got 46. 7%. We're going to beat the hell out of this and say it's 2. 5%. What's 2. 5 percent if you can consistently do 2. 5 percent appreciation on a house? Pretty reasonable. Right, Greg? Yeah. Oh, yeah. So what's two and a half percent of 200, 000 Pablo?
Pablo Gonzalez:Two and a half percent of 200, 000 is 5, 000. 5,
Aaron Chapman:000. So that's what percentage of 60, 000? We had that number before? 8. 8. 3%. That's 16. 6 percent is what you're making on your investment of 60 grand just by having somebody else pay off your mortgage and by an appreciation of two and a half percent. Both things are easily achievable if you get the right team, the right asset and in the right area. Very achievable, 16.6% and that's not even cash flow yet. So let's get into the cash flow piece of it. So we're talking about cash flow. We said there's a hundred dollars a month, you're renting it for$1,800 a month, making a hundred dollars a month cash flow. Let's say, you know, again, black Knight Case Shiller about six to six point half percent pre, uh, is what's rent going up by across the, across the country? Let's cut it in half. Let's say it's 3%. What's 3% of 1800 bucks?
Pablo Gonzalez:53%. I don't know, man. You gotta help me out. You're doing really good. It's 54 bucks. It's 54 bucks. That's what I was gonna say. I was just too busy chatting
Aaron Chapman:and, uh, you were, well, you were, you were starting to doubt yourself. You are actually, the closest without going over is prices, right? Rules. I heard you say 53. So 54 bucks. Not sexy. Does anybody excited about 54 bucks. No, that's not a great increase. What's the best part of who doesn't get excited is the tenant. Your tenant is not going to walk out because you're ready to raise their rent by 54 bucks the next year. They're going to go to dinner with their brother in law and pound their chest and say, I'm in a three bedroom, two bath. My rent went up by 50 bucks. You're in a two bedroom apartment and yours went up by 120. Who's the badass and they're gonna pound their chest and put it right in his face. They're not gonna leave They're in fact, they're probably gonna take care of every care of your house But what percentage did your did your cash flow go up by you had a hundred dollars a month cash flow year one Now it's 154. What percentage did go up by? 54 percent 54 percent the easiest math of the entire day. It's actually Yeah, that's one of the trick question for most folks so 54 percent increase you're getting double digit increases in your rent just by raising it a single digit now You're seeing huge growth, but this is where it gets Unbelievably awesome now, let's talk about inflation for a second here I'm holding in my hand right here guys is a 20 gold piece from 1888 20 bucks is what this was meant for you. Maybe you can see it on there's 20 bucks. You could walk into a department store from that from 1920s 1800s 1920s and buy a hat, a suit, a tie, a shirt, a belt, a pair of socks, and a pair of shoes for that 20 gold piece. Now today, what can I buy with 20 bucks? Let me share with you. The socks. No, you can't even do that. These are the socks i'm wearing right now. They cost me 65 bucks for three pairs The reason I buy and I spend that kind of money on socks I'm wearing the same i've had the same 10 pairs for four years. I don't have to have that problem, right? But here's what's crazy I can't buy the buy the damn socks But what I could do is buy every single one of those things I said with an ounce of gold The gold did not become more valuable. The clothes did not become more expensive. The dollar became worth less. Significantly less because we're printing too damn many, too damn much of it. Here's another illustration. Go all the way back to 1994. I don't know where you guys were in 94. I was, I was 18, 19 years old. I could walk into a, I walked into my first Taco Bell in Moses Lake, Washington. They had a value menu. I ordered two crunchy tacos, two tacos. Two bean burritos and a drink for a 1. 99. Now fast forward to 2023. I'm driving through a Taco Bell drive thru in November of 2023 with my 17 year old. She ordered those exact same things. How much do you think I paid? Seven bucks. Teen. Teen. I paid 15 freaking dollars. That's a 750 percent increase in the cost of burrito construction. That's what has happened now. Is it because burritos are more expensive because they're using better meat because they're having this hybrid? What? No, it's because that's inflation. The dollars lost that much value. So why is this a big thing for us to talk about? Pablo, you downloaded an app earlier called the Q. J. O. Investment tool. I need you to get that thing out. I know you don't wanna get your calculator out, but you gotta get it out this time. And we're going to do some quick math. Have anybody, any of you guys heard of what's called the the inflation Induced debt destruction has been coined by one guy or the 30 year fix is a hedge against inflation You guys ever heard that
Pablo Gonzalez:we talk about hedging against inflation and inflation profiting all the time never Well,
Aaron Chapman:we're going to get deeper into details here. I was theorizing on a podcast years ago. It's like, what does a person really pay when you're paying a 30 year fixed mortgage? Cause I know the dollars work less every year, but what do you really pay over 30 years? And as I was theorizing about this, we never came to a conclusion cause you know, I cheated my ass off to get that C in math. I got really good at picking walks. I did not do math really well in school, but I had. My and I'm sorry, Lee, there is no app for it. There is an app for Android. There's just a problem with it right now. We're trying to get it fixed. But as I was theorizing about this, I got a call from the professor of accounting at Kennesaw State University. The university invited me to come speak to the students and from there, they create a tool where I could actually do the math. And then I had it created to into an app for you. So if you download that calculator and you click on the third one called the mortgage amortization schedule, let's put in there 25 percent down payment. We'll do a purchase price of 200, 000 and we're going to actually beat it up. And we're going to say 7. 5 rate, which is much higher than what we're doing these days. We're doing just to show you exactly how powerful inflation is when it works for you, not against you. So Pablo, have you done that?
Pablo Gonzalez:I, I don't have my phone on me, so I wasn't able to download.
Aaron Chapman:Okay, so I'm going to use being the guy who's being the good guy about this whole thing. I'm going to set my phone down and I'm going to be engaged here and chat me. You give me the guy on Instagram. I got to be able to keep up with you, man. It's not easy. So what we have here, anybody who's downloaded this, you can go to that third calculator called the, the amortization tool. You're going to click on that and you're going to be able to type in 25 for your percentage down 200 for your purchase price, 7. 5 for interest rate. Again, Being higher than what the actual rates are. We're gonna talk about later. You're gonna find that your payment you're gonna make is 1, 048. 82 per month now over 30 years because you go to the upper right hand corner is a calendar icon. You'll click on that. You'll swipe hard to the right to 2, 053 and you're going to save and close and you're gonna find you're gonna pay 377, 575. 83. That's what you're going to see on there, but the inflation adjusted payment when you recalculate the dollar every time it leaves your hands over the next 30 years It's losing a little bit of its value a little bit of its value a little bit of its value You're gonna find that you only paid a hundred and forty two thousand nine hundred and thirty seven dollars You paid less than what you borrowed of your tenants money So I'm going to encourage you those who listen to Dave Ramsey brilliant, man Don't listen to me says pay off your mortgage Pay off everything else though. Don't carry debt on anything else. This is the greatest asset in your in your arsenal is the loan. Now when you're talking about you know, paying extra on your mortgage, don't do that. Put it somewhere else. Prep it up to reinvest. Call JWB for another house. Don't pay down your mortgages. Why? Because the longer you take to pay, the less you actually pay and the more you get to keep while it's worth more. Have you ever noticed how often the average person refinances their primary residence? Every 7 to 10 years, maybe? Every 4 to 6. Do you know why that's a thing? Because the interest rates went down, right? People think it's because the rates went down. Well, maybe it's a good thing. My banker always told me that the rates are better. You know, do it when the rates drop. My dad always said to do this. What does the amortization table look like on a mortgage for the first 5 years? Not great in your favor. It's almost all interest so if you've got a community of people that believe the interest rates are the most valuable thing in your deal and that you Need to focus on the issue in your mortgage you end up getting them to continue to to force These people keep refinancing while you're paying most the interest so I have a a case study I had with a client of mine where we had a hundred and twenty thousand dollar mortgage He came to us to a certain point says I need to refinance and I encourage them don't do it just for eight less I mean, let's say you have an eight percent and it's now two percent Well tell do it so you can put I got two percent on my headstone. You'd want it for just a pound your chest That's about the only reason so but in his situation is about a point and a half He goes that's the level I was always taught by my dad or my banker and my banker's retired So this is what we do and he pretty much forced us Now he'd been paying on it for 47 months By the time he was getting ready to close he had paid this 48th payment and he had paid almost 38 000 in payments over 48 months. His balance was 120. It had dropped by 6200 approximately The loan between the lender fees, auto fees, and the appraisal and the taxes insurance. He had an additional six grand in fees. He tacked onto his loan. His new loan was 119,880 some odd dollars. He was$106 away from his original balance. And he restarted his payment if he kept doing this he paid out 38, 000 by time it was all said then plus more costs in payments plus the new costs So he's at 40. What was that? 44, 000 in expenses He's essentially the exact same exact same mortgage if he stayed at that specific pattern for 20 years He would have paid almost two hundred thousand dollars on his loan And never affected the balance. That's why interest rates so important to you because you're conditioned to think it's important to you. My job is to help you use that to benefit you as a real estate investor, to become more of a person who understands for real estate value is, and it's in the leverage because you can leverage the growth of multiple assets and never pay cash for a mortgage for a house that you're not going to mortgage and pull money back out. Cause you're only making the cashflow percentage, not all the other things. So let's open this up for any sort of thought process questions. Things are bouncing around your guys heads.
Pablo Gonzalez:Do you see, I'll kick it to you, man. This is, um, you know, we talk a lot about the five profit centers of rental property investment being cashflow. Home price appreciation, tax savings, debt pay down, and inflation hedging. And this was like the long, the most, the most focused we've ever had on it. You as somebody that owns 300 properties, manages 6, 000 properties for almost 2, 000 investors, man, what it, what, what dawned on you in this, in this explanation?
Gregg Cohen:I'm just, you know, Pablo, in the course of doing the show with you over the last five years there, we continue to have these milestones where I just sit back, you just see the smile on my face as, you know, something is being said. And sometimes it's somebody in our community who is talking about a lesson that we have taught. Maybe a complex, complicated lesson over time, we've continued to beat the drum and then it takes its form in the form of one of our community members. And today it takes the form in Aaron's thoughts, right? One of our lenders, one of the teammates here at JWB that put this entire investment together. I hope you guys can see how it's not just Greg and Pablo who think different here. Right. It's not just Greg and Pablo who are not your average investors. It's everybody in the JWB network thinks a little bit differently than what you might read on, you know, CNN, Fox news, CNBC, whatever it is. Right. And the beautiful thing is that this whole time we are understanding just how powerful the other profit centers are in addition to cash flow. And cash flow is great. Nobody's going to say we don't want cash flow. But what, what I'm sitting here just smiling and reflecting on is how beautiful it is to hear somebody eloquently talk and share real numbers with everybody. about how impactful and powerful the other profit centers are. I mean basically everybody comes up with this reason that maybe cash flow isn't enough, maybe that's the reason to sit on the sidelines, maybe interest rates are the reason to sit on the sidelines. And what Aaron is showing you here is that none of that stuff matters. What matters is getting the asset in your portfolio, letting it grow, and then using debt, using leverage as a tool. That truly is how the wealthy become wealthy. That's how self made folks become wealthy. It's the easiest tool. to pull and to master. So I am just stoked that it's not me sharing this right now. It's Aaron. And I see the folks in the chat. And everybody's like, yeah, I get that. No, I know that. I heard I was watching somebody who just chatted and said, well, I'm excited about 54 because I know what 54 is going to grow to over time. This is such a well educated audience, and Aaron, I think you did a great job sharing it. I
Aaron Chapman:think one of the things that all this does, I gave you, excuse me, data upon data upon data upon data, just to put a bigger smile on his face and say, I already do all this. Now I know I'm doing it right. I don't have to have a specific magic whatever thing to accomplish it. It's a long, trudged out process, but you guys are doing it right. What's, what, the risks that you have is when you have somebody who wants to lead you down the path away from these, these principles, these ideas. Most of the time when somebody is leading, it's for two reasons. One, it's either ignorance or it could be malicious, some malicious thought that they need to like and generate revenue from yourselves. Unfortunately, we have a lot of that in the market. I swim in a, an ocean of predators in the lending space. It's one of these scenarios where they need to close another deal. They got to get paid and they're going to be taught all these different ways to sell things so they can get paid. and I get that and I understand that, but the bottom line we have for us is we need to make sure you as a real estate investor are successful. I focus on deal number 12. It's great to get you closed on number one, two, and five and nine. But if I get you to 12, Your life changes at 12. J. W. B. Changes at 12. I change at 12. Everybody changes at 12. Anybody can get you one, two or three. But can we get you to 12? That's where I believe that we need to have all our focus for every single person. And if we hose you over on deal 135 or six, you're not getting to 12. You're walking away and you move to somewhere else. I need you to be successful. I need to get to 12. If you start to fail, we will all start to fail. And I violently oppose failure. No. So one of the things about our industry right now, the average person Person is doing one to two transactions a month. That's, you know, that you could be, if you're working with them 50 to a hundred percent of their income that month. And if you run into a scenario on the house, I'm like, I'm not sure about this. Should I really be doing this? I don't know if I want to do this deal. And I just had this, this, this conversation with Aaron and Greg and Pablo, and maybe I shouldn't refinance my house for the interest rate right now. But you call him. What's he gonna tell you? You're a 50 percent to 100 percent of his income that month. He's probably not gonna give you the straight skinny on what you should be thinking myself. You may be 1 60th of my income that month, and I'm not trying to say that you're not important. But I am trying to say is I'm not concerned about that one deal. We'll talk in real time about that deal, whether or not it makes sense. I concern about the deal 11 down the road. And I gotta be sure you're successful at once so we can make sure that you're successful for number 12. That's the main thing here. So applying all the principles that we talked about here, putting all that to work, everybody should be really, really happy with what you've done so far in your existence. Now there's different levels of this and I don't know how deep we, how much time we have here to get deeper in this. There's other things that we like to do. I've been investing in real estate since 2001. I lost all my real estate in 2008. I got in a motorcycle accident August 8th, 2008. I went in that I, I left my house that morning. 190, a marathoner, a rock climber, jumping onto Carly. I had a net worth about three and a half million. I found myself in a hospital that night. Memory was wiped. I end up leaving there at 154 with a negative net worth of 1. 5 million. I started over in industry as obliterated to the next real estate investor, walked into into Arizona in 2000, late 2009 and rebuilt my business to where I sit today. Now, we're ranked in the top 20 in the United States and what we do and the whole goal is just to focus on the real estate investor. So, ultimately, we've taken it from that to now investing in 6 states. I've got a family trust. I've got each 1 member of my family that's married. I have 3 married kids, 2 grandchildren. My youngest just became an adult in the last 4 days, 3 days. And they live in houses bought by the family trust at least back from the trust, at least from the trust. My cars are in my trust. I lease for my cars from myself. There's ways that people can do this to make sure that they are all 100 percent protected and built and structure structure for themselves and for their future. That's where we focus our time and energy.
Pablo Gonzalez:Let's go, Aaron. I love it, man. listen. I love the perspective. I love that. There's levels to this game. I think the enduring thing here is number one thinking long term right in your relationships and your actions and the way that you're planning for Retirement and the secure financial future and then the other piece is Is the idea of that fits really nicely with building an army of income producing rental properties that over time growing cashflow beat inflation appreciate. We love all the five profit centers. We love the idea that when you leverage the home price appreciation is the thing that brings you the most wealth and the most options. And I find that most real estate investors get to that point, right? They might be at that one, two, three, four, and they look for a partner they look for. Somewhere that they can get to that 12th. Right. And that is where Greg's team at JWB really, really shines. And we want to share with your audience after you've shared all your wisdom, kind of the way that our community goes about it, right? Because we've Greg and his team have pioneered this way of making this super, super passive, Being a mile deep and an inch wide and one of the most attractive markets in America. And just be able to do this for everybody. So GC, are you ready to just kind of share the, the beauty of Jacksonville and like all the good stuff that it's not just one of the hottest markets, but it's still one of the most underpriced markets and how to get into it.
Gregg Cohen:You know, I am
Pablo Gonzalez:baby. Let's go big boy.
Gregg Cohen:So, for everybody who would like to, you know, take this home with them, the slides, we always make that available for everybody on our show. if you guys would like these slides as we go through them, you can just text our team. This is Miss Tiara on our team. You can text her at 904 293 0341. it's a real text. It's a real person. So you can just ask her questions. She's right here in the office and she is a wonderful resource. or if you have any other questions or you want to jump on the phone with JWB, please reach out to Tiara with a, with the number right there. So, you know, I have had the opportunity to invest in real estate for 18 years and I've traveled the country and I've spoken in every, pretty much every state out there. I've spoken with thousands upon thousands upon thousands of investors and I have access to the data to know how each of these markets is performing. And so I've been really able to zone in and understand why investing in Jacksonville is such a smart move, not just for One profit center, not just for two of them, but for all five profit centers, because as a real estate investor, what you want to do is you want to take this information that Aaron's sharing and that we're talking about here today and put it into action and know you're in a market where you get all the benefit from all five profit centers. You want to make sure that it's growing from a cashflow perspective, tax savings, principal pay down, but also it's growing because the market is what it is and people are moving there. And so I did want to share with all of you, obviously I'm biased. I've invested all of my rental properties, which I own over 400 rental properties. They're all here in Jacksonville. My business is in Jacksonville. So you probably expect that I'm going to be biased, but I'm going to give you some numbers here that might surprise you. Jacksonville, Florida is the only real estate market in the country with prices that are below the U. S. median, rent price growth above the U. S. average, home price growth above the U. S. average, and population growth above 2 percent in the last five years. It is the only market in the country. Aaron, did you know that? I did not know that one. Most people
Aaron Chapman:don't. I'm a generalization guy. You guys getting that targeted, like you said, an inch wide and a mile a beat.
Gregg Cohen:So when, and again, only, all of all the markets in the country, this is the only one that can claim that. So what you get with these four things are low prices. You get rents that are growing, get home prices that are growing, you get people moving there. That is a recipe for above average return on investment and risk mitigation, risk mitigation, because people are moving there. In fact, that's demand for housing, both in the form of rent price appreciation and Home price appreciation. So our prices are 13 percent below the median. We have the fastest growing median income of any major city in Florida. We have the fastest growing population of any major city in Florida. And our population here has grown over five times faster than the U. S. over the past five years. Pablo, how fired up were you when, when I put these stats together? Have you stopped smiling? No, man. I love these
Pablo Gonzalez:stats. I think it's such a beautiful snapshot of upside that is still there waiting for me. And this idea of like, I'm also getting a deal. Right. So like, I, I, I love that part. I like to compare this to like, if somebody gave me the tip on investing on Apple, you know, like after the iPad is very different than if they gave me that tip, like right when the iPod came out and the iPhone was still to come and the iPad was still to come. Cause there's just all these like great signals that this is going to keep doing what it's doing.
Gregg Cohen:Yeah. It's kind of like what Aaron said early on. You know, if you knew that somebody was about to move a bunch of money into a certain asset or stock and you picked up a big tip there, then you might go and you might buy that stock. Well think about it in terms of what drives home prices and rent prices to go up in real estate is people moving there. So if you're, if you were like sitting down at a table and you saw. Five times the amount of people that move anywhere else, all of a sudden just start moving to Jacksonville, you'd be like, well, where are they going to live? That's probably going to increase home prices and rent prices. I probably want to own something there because that is a thriving economy and people want to go there. So now we're, we understand big picture why rental property investing is, is so critical. We understand. How those profit centers, maybe even the ones you didn't really understand, how they work now. Now it's about taking action and putting in the right spot. And that's where Jacksonville comes in. But I'm not the only one who loves Jacksonville, right? There are other well respected publications. And Pablo, I think you fell in love with this report from the Urban Land Institute, didn't you?
Pablo Gonzalez:I did man as a young professional growing up in the construction game and married to a landscape architect this ULI urban land institute is kind of like The association that tells you like what cities are working and what is doing really really well and seeing that ULI put jacksonville in this like list of supernova cities with Austin, Nashville, Raleigh, Durham, Boise, and Jacksonville. It's just like one of these things of, man, I don't think anybody else in America had Jacksonville in the same kind of like frame as all these like super sexy cities that everybody wishes that they would have been investing in for a long time.
Gregg Cohen:Yeah. It's almost like which, which one of those doesn't feel like it belongs, it's probably Jacksonville, right? Austin, Nashville, Raleigh, Boise, all have very thriving downtowns, have very strong tech hubs, or education hubs, or manufacturing hubs, right? And they've been on the front page of the most successful cities really for the last at least five years. But Jacksonville has really been under the radar. So when the ULI named Jacksonville one of the five supernova real estate markets, it really matters. A lot of folks and businesses that are thinking about making investments look at this report. And then just think about it for a second as well. If you're thinking about where you want your money to grow, look at how they named kind of the big brackets here, right? The supernova cities are part of a bigger bracket called magnets. That means that's attracting where people are going, right? If I'm going to think about where I want to put my money, Putting my money in a place that's called a magnet or a supernova just feels really good, right? They didn't, they didn't miss with the nomenclature of what they were calling these places. And then you look at some of the other places that they've named here. It's the establishment or the backbone, right? Does that really sound like that's where your growth is going to, your biggest wealth pie is going to be created in the backbone? No. And you look at some of those cities there, which I love some of those cities, but you know, probably not. thinking of the next big thing when you think about some of those cities on the list.
Pablo Gonzalez:Makes sense, GC. So this is already ULI calling it a supernova city. All these other cities that we're put in there have had this like explosive growth. So has Jacksonville. But I know that we're here to kind of give out this, like behind the scenes, a mile, a mile deep, an inch wide thing. Right. So like, give us the insider information that tells us that Jacksonville has a long way to go as far as continuing to be a supernova.
Gregg Cohen:Yeah, absolutely. So I was super pumped when Jacksonville made that list, but then my next question is, okay, What's different about Jacksonville than those other supernova cities? Why not invest in those five supernova cities or those other four? What makes Jacksonville different? And there's one that is just completely, easily understood right off the bat. I listed here the median home sales prices of those five supernova cities along with median income and population growth. But let's focus on median home prices first. Aaron, what's the biggest thing that jumps out to you about median home prices in those five supernova cities?
Aaron Chapman:You're
Gregg Cohen:seeing nearly
Aaron Chapman:a 100, 000 swing, if not more, to any other city out there. Exactly. That's significant. That is a significant difference.
Gregg Cohen:Yep. Jacksonville's home prices, the median home sales prices, are under 367, 000. These other home prices in these other markets, they've already blown up. They've already been on the front page of all of these wonderful publications here. Boise's at 491, 000, Austin's at 457, 000, Raleigh Durham's at 501, 000, Nashville's at 489, 000. So you have an opportunity to be the most supernova ish of the supernova cities by investing in Jacksonville, which still hasn't caught up with home prices with the rest of the country and especially those supernova cities. And I also wanted to point out, even it's
Aaron Chapman:even below the national average, which is also significant. National average is 432,000. Look at that. You have a supernova city that is that much lower. Was that 70 some odd thousand dollars lower? Actually, you know, probably 70,000 lower than the average in the United States. That's a significant thing to consider, and if people aren't looking at that really closely, you're probably not paying attention.
Gregg Cohen:And that goes back to the, the. The facts that I shared earlier on why Jacksonville truly is the only market with those four characteristics. It's hard to be above and rent price growth and population growth and home price growth and be below the national median for home price. It's just really hard to do. And Aaron, you brought up a great point. Not only are we the lowest of the supernova cities, we're lower than the average city in America.
Aaron Chapman:Huge. Absolutely huge. And one of the other things to point out to folks, and maybe we're going to get into it, maybe we're not, is like, I know you guys are talking about, you know, these other factors in the cities, but know who else we're trying to get ahead of. We're trying to get ahead of the major corporations, the hedge funds. They bought 44 percent of the single family houses last year, 2023. They're on track to do the same. They're on track to control 60 percent of the single family housing by 2030. If you're sitting on the sidelines waiting for something later, you're giving them an opportunity to take the opportunity from you. Don't sit there and wait.
Gregg Cohen:Well, we could do a whole show on the institutional activity there. I think, you know, our time is probably coming, probably coming shorter than we want. So I'll let that, that comment just marinate out there. But I think the point is here, we understand that it's not about the it's really not about the, we have great interest rate news right now. So I love it. And I like riding that train because it helps people. It gets easier for them to jump in the party and own rental real estate. But the reality is I've been saying this for a long time. We've sold hundreds and hundreds of hundreds of homes to our community members here while interest rates were 6%, 7 percent higher. And it's because our community, Aaron's community, we understand that it's not really even just about the interest rate. It's about buying an income producing asset that grows over time, having a wonderful team to manage it for you and holding on for a full market cycle. And how many people do you know that have owned real estate for 10 plus years tell you, Hey, listen, yeah, that was a real dud. It really didn't work out well. Have you, have you, have you ever heard that?
Aaron Chapman:Not from people that have held it that long or people that have stayed active in it people that may have bought one on A whim and didn't do anything. It didn't do the right things I might hear them say i've made the bad move but staying active continue to move build your portfolio understand what you're buying There's not a single soul that I have talked to that had that have has been in a bad spot with real estate They've actually done nothing but thank the lord. They made that move
Gregg Cohen:100%. We've had the pleasure of serving over 1, 700 clients that invest in Jacksonville with us. Many never come to Jacksonville. Many never, unfortunately, I never get to shake their hand because we've built this to be passive and they don't have to come here. And we generated over 300 million in profits just following this process. It's, it's the boring, get rich, slow process of single family rental properties. Everybody needs to think that you need to find something brand new, shiny, the newest, latest thing. It's all around you. It's single family rental properties. It's treating your residents really, really well and holding onto this asset over time. And that's how you can become independently wealthy.
Pablo Gonzalez:I fully agree with this idea of boring rental properties and going in and I'm all in on them, but GC, I am somebody that likes shiny things. So I want to tell people a little bit about kind of like what we're super pumped about this whole thing that I teased the, the Apple iPod, right? Like this is not fully cooked yet. It's this idea that Out of all those cities that we mentioned have these revitalized downtowns, and you found this great statistic around how revitalized downtown cities appreciate 23 percent more than the U S over 2020. So what I want to do is tease this for, I want. Those of you that haven't seen this report to text 293 0341 because Greg has done this comparison of those other supernova cities, how it went when the revitalized downtown happens, and then here's the key metric that you want to know about before you understand just how easy it is to invest in Jacksonville is the idea that when downtown's hit 10, 000 residents inside that density of like the urban center, Developer incentives now go away and the flywheel has begun. It becomes a lot easier to make it a thriving place to work, live, and play because great downtowns have mixed use developments in them. A great mixed use development needs an anchor tenant, like a Whole Foods or something like that. And these great anchor tenants look for that number of 10, 000. So as soon as that tips, now these things keep going. The downtown becomes this like hot place to live and The city appreciates 23 percent more than it had been appreciating prior to that happening. Jacksonville as for a very, very long time floated around 3000 residents. And very recently in the last 10 years, they've gotten very, very deliberate about this push for downtown and you see it in these statistics, right? It's gone from 4, 800 to 5, 200 to 6, 100 to 6, 800 to now in 2023 and 2024 it's already projected. To cross that 10, 000 metric. You see it again, more great stats from, from GC, but you also see it in the numbers being poured in. So this is right now happening. This is the behind the scene stuff that unless you're a mile deep and know this and oh, by the way, JWB is one of the companies that has purchased 20 city blocks in downtown is doing one of the major developments in there and they're doing it with this long term mindset of knowing that if downtown really happens the way that it's supposed to and you place make, not just build for rich people, that the, all the surrounding homes around it go up accordingly. So this is the thing that to me, Is the shiny thing that doesn't have to do with interest rates. Is this like once in a generation inflection point that happens in a city that everybody looks back and says, Oh man, I saw that coming. And I just didn't have the stones to like put my chips in the table, which I think is what's really, really interesting here in downtown Jacksonville. Anything you want to add to that? Aaron, have you heard of any of those stats of like downtown renaissances and like how that's happening in Jacksonville?
Aaron Chapman:A little, I get to know on those low, those, those really, really focused levels and they work so much in the national space. I've been working with investors all over the country and we'll do, you know, sometimes 1500 transactions a year for real estate investors for shows where, you know, this is where the person should be. That's exciting stuff to understand because I've seen what happens in these downtowns. And that you guys are getting it's almost like you said in here almost like insider trading to know these things As it's starting to happen and you're already in the space You're already talking to the people will be able to give you the opportunity in there It's like it's like knowing about the market back in 2008
Pablo Gonzalez:Having the answers to the test ahead of it. You want to tell people a little bit about how you help them benefit from all this?
Gregg Cohen:Yeah, absolutely. So, you know, we started out building this business 18 years ago, and the whole premise was this, that people know that you can make money in real estate. been pretty documented that there's more wealthy Americans through real estate than any other asset class. It's available to everybody. You don't have to have a certain job or certain you know, degree or a certain amount of money to get into real estate. So that was pretty well known. But what was preventing most Americans from getting into real estate and rental property investing is worrying about the experience. Being a landlord. So we built this business to make it easy for everyday Americans to invest in this beautiful asset class, which is single family rental properties. And so that's what my team is able to do. I would love to welcome Aaron's community here to of course, be a part of the not your average investor community. We have loved you guys being here. You guys can continue to be a part of our show and our community. It's a, just a. Incredibly warm and inviting place. So we would certainly welcome you here and we'd welcome you to learn more about JWB as well. You can text Tiara is a great way just to kind of get involved. There's her number again, 904 293 0341. And learn about investing with us because we work with clients in almost every state. We have clients in 13 countries and you know, we manage 1. 3 billion in real estate assets. For everyday investors, or non institutions, everyday investors, just like the three of us. And we'd love to serve you as well. So a common question we get is, should I invest now or wait? As you can tell, guys, home prices are expected to go up, contrary to what you may read. In the, in the media, in the news, if you understand the, the relationship between interest rates going down and asset values going up, you'll understand that home prices are likely going to go up and the cost of sitting on the sideline and waiting is substantial. I'd estimate 30 to 40, 000 of opportunity costs just simply by waiting a year to invest in Jacksonville properties. So if you're curious about it, get on the phone with us, but I did want to leave everybody with just what it looks like to invest in a currently available JWB property. We obviously have more to share with you about this if you reach out to us. But just at a high level, your purchase price is somewhere around 225. It's very normal. I would say about 180 on the low end, about 280 on the high end. Which I didn't, I wasn't tripping over my words there, right? Median home sales price in the U S somewhere around four 30, you're able to buy assets here in Jacksonville, somewhere around 225, 000. A brand new construction is something we specialize in. We build hundreds and hundreds of homes each year, and we have them as rental properties. And we work with great residents, renters or tenants, you may call them. And they rent the homes with us. We put this all together and then we sell this to you as the investor. Almost put it on a silver platter for you and it's completely passive. And the beautiful thing is that we do all the management for you. We're a vertically integrated company. So the same company that's selling you the asset is the same company that's collecting the rent. And over time, we're able to create incredible profits for clients. And we hope you can join us here. Some portfolio highlights and minimum investment per property is going to be somewhere around 50 to maybe 75, 000. Which is really wonderful with the interest rates coming down as they have. That has lowered the down payment requirement in order to be positive cash flow. And in where, as it was about 75, to buy an asset. Now it's about 50, 000 to 75, 000. So a big win there. Your estimated rates of return are going to be somewhere between 11 percent on average. And we've had recent clients closing their interest rates at just under 5 percent interest rates, which is. Super wonderful. We love that. It's not the only reason to invest, but we certainly love that. And if you're interested in investing with JWB, we do have multiple incentive packages that are currently available. Like for example, we're going to cover your first four to 6, 000 of your maintenance costs per property that you acquire right now. We've continued to extend that incentive as interest rates have been higher than we all wanted, and we're still keeping it right now. I don't know how long we're going to keep it. But that is certainly something that's available. And Pobs, why don't you talk about the community and invite everybody? What do you think about, do you think they should join?
Pablo Gonzalez:Ah, man, you know, it's like GC said, it's a very welcoming place. We do this every Tuesday. We hang out each other at events around the country. It's completely changed my life to be surrounded by a whole bunch of real estate investors. Right. Cause it's so, I think charity just joined our, like WhatsApp, like chat thread. And it's like, You know, when you start getting really pumped up about real estate, it's easy to get pumped up, right? It is the thing that builds wealth for americans It is the spine of the american dream and yet the moment you talk to somebody that hasn't had You know the foresight the understanding that you got to do things a little bit differently to do it for yourself You're going to get all this gravity around you pulling you down, right? Like people it's like, oh, are you sure because I don't know because i've never listened to aaron chatman speak, right? So this idea of being surrounded by a community full of like generous people, that get together every tuesday You Share phone numbers, share insights, you know, like, and, and have become true friends as has really been probably the proudest thing that I've been a part of professionally for sure. So invite you all to come on Tuesdays and join us live or check out the podcast, right? If you just search, not your average investor show on YouTube or on any of your podcast platforms, you're going to hear me start off with a goofy intro and we'll go from there. You'll be invited in. So guys, we're a little, a little bit over time. Aaron, what, what'd you think of you know, like you said, you're a national guy. You've probably got assets around different places, man. What are you thinking of like these, these insights around downtown and like future growth and, and generally the completely done for you vertically integrated turnkey model, man. Is that, is that something that you've been a part of before?
Aaron Chapman:A bit for a very, very long time and multiple different markets, but 1 of the things I could speak to in our partnership with J. W. B. since we've been able to form that partnership in the last last little while is the, the mirroring that I would say within your guys's organization to my own. We are very, very big into process procedures and how to build like. Going to Chipotle to get a burrito, right? You have a different person at different stages of it. Now, some people get frustrated not dealing with one person all the time, but there's more efficiencies and accuracy and deal with a different person to construct that burrito out. And we do that in the lending side to make sure that things are accurate. They're efficient. They're quick. JWB does that on the real estate side and mirroring those two systems together to me and my team was one of the greatest, greatest merges we've ever had in the industry. So we appreciate your team. We appreciate what is being done over there. We definitely love the real estate. We've had less issues when it comes to the finalization of the deal. When you're getting in the data on the property, because we're going to do that prequel well in advance. And anybody doing a prequel with us and you go to my website and you go to Aaron Chapman. com and you click on that apply now and you start moving through that, we're going to take you through a little bit deeper dive. We're not going to be. Hey, let's look at a paste up in a query report and send you a letter. No, you're talking to an underwriter on the front end. They're looking at you. They're going to run a cash flow analysis on your business. If you're self employed, we're going to really figure out what you can qualify for and how many we're going to interact with your team at JWB, which is again your team. And as a result of that, you will have that experience that I don't see investors having very often an experience of true professionals that know what they're doing. They have a great asset with a great outcome and a managed business. You literally, anybody sitting here as an investor, the CEO of an investment firm. You've got a lending arm. You've got an asset arm. You have a complete business strategy. That's all turnkey done for you. All I do is sit your ass in the seat and do the application. That's it. That's all you got to do. And then follow instruction until the end.
Pablo Gonzalez:There you go. Sit your ass in the seat, do the application, follow instructions, build wealth, repeat. That's what we've been saying, man. What do you think, GC?
Gregg Cohen:I love it, man. It's just so simple when he says it. I just, I just want to listen to you all day, every day.
Pablo Gonzalez:Yeah, I love it. I'm pumped up. Listen, we're a little bit over. We never take it for granted that you took an hour out of the middle of a workday to hang out with us. Come get educated. Come get connected. For those of you in Aaron's community that are part of this for the first time, we'd love to invite you to Tuesday's show. That's We're talking about Robert Kiyosaki, a little guy you may have heard of has a new update on what he sees as attractive in the real estate market. So we're going to beat that up and talk about that on Tuesday. Hope that you come by you know, text Tiara to what's the phone number? Do you see, you know, by heart? Yeah.
Gregg Cohen:It starts with the area code nine zero four two nine three zero three four one.
Pablo Gonzalez:Yeah. Download that report. Super interesting. get Aaron's, what is it? J O C. What, what's the, what's the acronym Aaron for your app? QJO investment tool. Q
Aaron Chapman:J O investment tool.
Pablo Gonzalez:QJO investment tool. I'm going to be downloading that and, uh, QJO ing myself. It's going to be a lot of fun. Look at, look at my numbers and, You know, hope that, hope that you, uh, you get comfortable here with us in our community, Aaron. I'm sure that we're going to have you back, man, because, uh, it, it just makes way too much sense. It's way too much fun. And from now till next Tuesday, GC, we'd like to leave our shows with one little bit of advice for everybody. You ready? Don't be average. All right. See y'all later. Thanks, Aaron. Appreciate you,
Aaron Chapman:man. Appreciate you. Thanks everybody for listening. Pay attention.
Pablo Gonzalez:See