Not Your Average Investor Show
Not Your Average Investor Show
423 | Q4 2024 Jacksonville Real Estate Market Update
Join us for JWB's Q4 2024 Jacksonville Real Estate Market Update. We'll be joined by Gregg Cohen, Co-Founder of JWB Real Estate Capital.
Here's what we'll discuss:
- Do presidential elections influence real estate pricing and sales volume?
- Do major hurricanes really cause real estate markets to crumble?
- Current Jacksonville real estate market pricing, rents, and months of inventory (MOI)
You won't want to miss this opportunity to spend some time with one of JWB's owners and learn more about how you can take advantage of the Jacksonville real estate market. Hope to see you there!
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Welcome. Welcome. Welcome everyone to the Jacksonville real estate market update Q4, 2024. We made it GC. We have. We have. I cannot believe this. This year is almost over. I don't know what to say. Yeah. I don't know what to say, but this is our biggest show that we do. It is also the one time in the quarter when we invite clients, we invite, other investors. We invite the whole ecosystem to be here. So we welcome you. If you don't normally join us here on Tuesdays at 1230, we do a weekly show called the not your average investor show where old GC here does his usual. Data perspective, and we tie it into current events. We talk about the things that are important to investors these days, and we always kick it off in a particular way. And that is, I'm your host, Pablo Gonzalez. And with me as always is the man that I affectionately like to call GC because he's a great co host because he's a. She's got genius concepts. He knows how to generate cashflow. And his name is Greg Cohen. Say hello, Greg. Hello, everybody. Great to be with you. And right after that, we kick into another little tradition that we have around here. Do you see, what do you think that is called? That's called the roll call. The roll call, baby. We've got, Oh, the mystery man checking in from Kuwait. First day, number one, right there for your service, sir. We have our lead off hitter banding second today, John Henning. We got Christopher Lee from Fernandina beach checking in. We got our community manager, Joanna, making sure that anything that you need, you can just chat with her right there in the chat. We got Le Monsieur de
Gregg Cohen:l'Empire.
Pablo Gonzalez:Just say his name, just say his name.
Gregg Cohen:Régé
Pablo Gonzalez:Foncet. Oh,
Gregg Cohen:Régé Foncet from
Pablo Gonzalez:l'Empire. Good to have you, Régé. We got the MVP, everybody's heard of him.
Gregg Cohen:Mr.
Pablo Gonzalez:Lee. Mr. Lee Bishop. We got. The legend of Charlottesville, Virginia, the man with a hockey arena named after him. The number one referral source for JWB. Roger Voisinet. Roger Voisinet. We got Susan Parker in the house. Good to have you, Susan. We got Tee Caster back from Tennessee. Tennessee Tee. Tennessee Tee. Tennessee Tee. All right. All right. I've got that sweet tea in Tennessee. There we go. Good to have you, Tee Caster. We got Fritz Brown in the house, my portfolio manager. There we go. JWB represent. Fritz, good to have you. We got the Shaw Man from the West Coast. Nadeem Shaw. With his good morning, good afternoon from the Pacific Northwest. We got the rock star from Rockland, California.
Gregg Cohen:You switched it up on me. I was, I was going to get excited about my fellow Steeler fan. Here we go. Here we go. All right. Here we go. The rock star, Marie Rockoff, of course.
Pablo Gonzalez:Oh, Marie Rockoff is the rock star. I thought so. What? I was just, I was just going for Lewis. Lewis. Good to have you, buddy. Big win. Big win. Big win this week. Andrew Barnhill. We got Charity Graham back in the house. Good to have you, Charity. Another teammate, Christian Mendoza in the house. Good to have you, Christian. Anya Sanchez. Another teammate. Good to have you, Anya. We got the world famous musical score composer from Long Island, New York. John Williams. John Williams. Good to have you here as well. We got the patriarch and matriarch of the first family of the Naturopathy Fest show. Ken and Carolyn Maleen. We salute you. Who else we got here? We got the maven from the mountains of Denver. Ms. Leslie Wilson. Ms. Leslie Wilson. We got Layla Powell in the house, teammate. Alright. I look great. I said your name and I meant it. Hello. Yeah, we missed him. Right? The mountain man's been gone for a minute. Hello from the isolated remote mountains of Colorado, where the big question here is who won the election? Oh, not going there. Ooh, hot potato. All right. Michelle, John from Jacksonville, Florida. Good to have you, Michelle. We got our Sean from Destin, Florida. All right, Sean. Beautiful little piece of the country. Sean, welcome, welcome. Jason Oman from Minnesota in the house. New name. New names. We've got a bunch of new names. Amazing. We do this every week. Make yourself comfortable. Meet somebody in the chat. We'll Everybody here wants to be your friend. We got the speaking of everybody who wants to be your friend, the fairy godmother of the night, your average TRO community, miss Jen fil sewing, those real estate investing dreams everywhere she goes. She's hosting a meeting in Lovely Monterey, California, November 17th at McGrail Vineyards. Her information's in the chat. Check her out. We got ride along Raj in the house. All right. Raj Bantu. Scott Skelton from A two. All right, Scott Ann Arbor. Mission Good to like two A. Two. A two. Scott Skelton and Arbor, right? Like to the S two. We're gonna call'em S two. I love it. I like it. It's fantastic. Scott, good to have you, my friend. Who else is here? Melissa Chin in the house from Jacksonville. Good to have you, Melissa. DeJavier Speller.
Gregg Cohen:DeJavier, one of my best buddies. My best buddies. He and I studied abroad in Spain together. 20 something years ago. That's right.
Pablo Gonzalez:He's a current client and a
Gregg Cohen:good friend.
Pablo Gonzalez:I love that man. They have, I studied at Brown and Sevilla too, just a year before you guys. Don't try to be
Gregg Cohen:cool like me and
Pablo Gonzalez:Dion. I made it cool. I made it cool. John Evans is in the house. Good to have you, John Evans. Brian Dayhart is in the house. That's a new name as well. Ed Ortelli, first time as well. Ed, are you comfortable? Alan Wolf. Allen and Hui in Cincinnati. Fantastic. A couple of new names, a
Gregg Cohen:bunch
Pablo Gonzalez:of
Gregg Cohen:new folks. Thank you all for being so bold and courageous and saying hello in the chat. I know you're going to make a ton of friends here.
Pablo Gonzalez:Mi hermano cubano, Rene de Hombre.
Gregg Cohen:Oh,
Pablo Gonzalez:wonderful. Yeah, fantastic. Good to have you here, my friend. What else do we have in here? Okay, cool. This is a a really good. Yeah, we might go on for days. Jill and Vega. Shake them dice and roll'em. Let's go I love it. I love it. David McKinnis from Cobble St. Lucas. I'm not jealous at all. Our regulars. Gary and Rosalyn Riley from Marietta, California. We regard you. We got my lady Jack Chatta. We got Eddie Harris from Hot Atlanta. Who else? I'm just gonna, I'm just gonna stream of, oh, we got Amigo. Bill Shields. Bill Shields. Good to have you. Alright, cool. We're gonna be here forever. Patrick McCree. I just a lot of don't tell his boss that he's here with Jeff Maron cow from Maryland. Jeff. Good to have you back as well. Jeff last week. Yeah. Yeah. Robert Herman. Marie Rockoff, the rock star. Now we got it. All right, cool. Kate Sutherland. Always gotta, always gotta welcome you in here. Okay. That was seven minutes of roll call. This is obviously a heavily attended show. It is also a heavily thought about show. GC, you, you carry this show with you on your shoulders from quarter to quarter. And I'm just kind of like, what are you thinking as we go into this one, man? What, what, what, what's on your mind?
Gregg Cohen:You know, I think one of the best opportunities for, you know, this show is an incredible opportunity for me. And one of the best thing that comes along with this opportunity is to sit back and, and, and, Think about where your headspace is as an investor. And then think about what my team is doing and working towards on an everyday basis. And the first thought for me is always just in sense, this insane sense of gratitude. And I was just sitting in TMM today and we have, you know, a hundred, 130 folks sitting in our team meeting. And I was sitting there and I was looking around the room and I was just like, you know what, it's such a gift to be surrounded by people who believe what you believe. You know, to be connected by a common mission, to be a part of something that's greater than ourselves. And I think that same thing is a part of our Not Your Average Investor community and our client base. And I remember being an entrepreneur, starting out and just thinking to myself, Man, you know what? I feel like I can do some something good in the world here. I feel like I can really do some good out here. I just hope one person believes that I can. And one person was able to take that leap of faith and to follow the model and the mission that we have here. And so my first thought as I was preparing for this is just gratitude. Thank you to all of you for being here. Thank you to my team. Thank you all for helping, you know, the four of us who own the company here. It was just a dream in the beginning to start to do something that can make an impact. And so to sit here and think that we have hundreds of folks that are taking an hour out of their day all over the world to tune in, to listen to us and to our thoughts is, is a special gift and, it's never lost on me. So thank you guys from the bottom of my heart.
Pablo Gonzalez:I love it, buddy. I can't wait to hear your thoughts about it. Before we get into that, you know, GC has put up a bunch of stats here and a bunch of great info. And if you want a copy, you got questions you know, text Tiara. She is just waiting for you to text her today. She's happy to send you this presentation so you can follow along now. Or later, or whatever you want to dive back into it. But she would love to answer any questions that you might have about getting started. Any, any kind of like, you know, FAQs or something that like, you know, like use her as a resource to like get some questions answered. If anything isn't really, really clear, text her at 904 293 0341. It's Tiara. This is not a bot.
Gregg Cohen:No,
Pablo Gonzalez:you
Gregg Cohen:know, so be kind. And Tiara speaks with thousands of investors every single year.
Pablo Gonzalez:Yeah.
Gregg Cohen:And so if you want to be able to lean on somebody who has been through this and has helped thousands of investors take that step that many of you are thinking about taking, reach out to her, start that conversation and you'll enjoy talking to her. She's wonderful.
Pablo Gonzalez:904 293 0341. GC, you know, what's on my mind? What's that? I feel like we are about to enter one of the more precarious nights of the year. It's a joyful day. It is filled with food, family and football. Yes. But as, as we are in this like very difficult time of our country, right? Like I, like our country, there's some intense stuff going on. There's wars overseas. There's a, an election that everybody's talking about. And Us as real estate investors, when we get around the table for Thanksgiving, I'm sure we're going to have our, our conversations with our family, with whatever differing viewpoints, whatever is happening, but as a real estate investor, I feel like every single time that I'm telling somebody I'm about to invest more in real estate or that I own five properties. It comes with a barrage of questions. And those questions are not always like, Oh, that's so cool. How can I do it? It's like, Oh, are you crazy in this economy with war on the loom? You know, like all these kinds of different things, right? Like we will, we will be not just challenged on our, on our beliefs and stuff like that, but we will definitely be challenged in our financial decisions as not your average investors. So I feel like this is the perfect Opportunity to have this quarterly market update, call this one, the Thanksgiving prep, the, the, the, the amuse bouche of Thanksgiving and, and thought leadership around real estate. What do you think GC?
Gregg Cohen:Well, I think so. I mean, you know, I would say normal Thanksgivings. We're all prepared for all of the wonderful things that come along with it, but there's always some questions that come along that, You know, might be a little bit more on the, hey, like, what are you doing side? In real estate, I think that it lends itself to that more than other maybe investments because it is a not your average approach, especially when you're building for a better retirement. This year, there's a whole lot of differing opinions. So I think there's not a better time for us to come together and understand the state of the investment world, the state of the real estate market here in Jacksonville, how it relates to the greater economy. And I think it's going to empower you. Should you decide to get in some of those conversations, you're going to have some perspectives and some data and some analysis here. That the average investor might not have, and it might serve you well if you want to get into a debate.
Pablo Gonzalez:Amen, brother. And, as we get into that, I know there's a lot of new folks on this call. There's something that happens when people first joined in, they want to get in the chat, but the chat is defaulted to only talk to hosts and panelists. If you want to share with other people, you got to change that little top button to everyone so everybody can see it. So Michelle, you wrote something really, really nice in the chat here saying big thank you to the JWB team. Thank you. Sam Raven Fritz. So far, my husband and I just closed on our first six investment homes and everyone made it so seamless and easy to do so, including all the partners from lending to closing. That's a wonderful sentiment. Yeah. Really nice thing for you to share. I wish I could give you a high five. I read it out loud because you only let that, let that to me. But as we continue, I'm not going to be able to read every message, right? So if you want other people to see what you're writing, go ahead. Make it everyone. GC, talk to me, man. What are people thinking about? What do we need to prepare folks for?
Gregg Cohen:Yeah, well, you know, let's do a little bit of kind of recap from the last quarterly market update. We talked about how we were in this state of fear, right? You know, many times you're either in a fear position or it's a greed position. It doesn't always go to that spectrum, but as a marketplace, as investors, we're largely either in one of those two camps and there's ways to act to your best benefit when the mindset in the investor space is more fear laden or if it's more greed, right? If everybody's trying to make, you know, a buck here. And last, last quarter, we looked at some headlines that were really fearful. And we talked a lot about the impact that those headlines and the talking heads and the noise had to create fear. Well, guess what guys, when I'm thinking about the headlines for today, we're right back here in this fear market. I think you all would agree. We're gonna, we're going to lead into some of these headlines that I think are causing the most fear in the minds of our investors out there. Our clients are not your average investors. I think you're all looking for. Some answers in some places. And so I tried to dive into the, we'll call it the medias topics. And you know, so of course the election is still on the minds of many folks. Geez, one or two quarters. Now we've been talking about how elections were going to perform. Well, I'm going to, I'm going to show you a housing prices that performed in this election cycle. And of course, continue it on from here. We're going to talk about this. The, excuse me, the, uh, the hurricane, man, these hurricanes,
Pablo Gonzalez:yeah, everybody, everywhere I go. I've been traveling a lot. Everywhere I go. The first thing people are like, how do you deal with these hurricanes? Is it going to like destroy Florida? Like what's going on for
Gregg Cohen:sure. Yeah. And it's, it's, we've heard it on the phones with our, with our folks on the sales side. I mean, there are, that is a common question and there are even some clients that are making decisions based on what they think they know about hurricanes and how has it affected them. How does it affect the market? I mean, look at headlines like this from the New York Post. Florida housing market crumbles. Homeowners struggle to sell amid rising insurance costs and storm fears. I mean, how could you not be scared if you don't have access to this type of information? So we're going to dive right into that. I think you're going to be surprised at some of the data there. And then lastly, we've been hearing about rents plummeting. Jacksonville has made some headlines for rents declining and rents plummeting. I'm going to separate the noise from the truth there for you. And we're going to talk about how to act in the market, which we have right now, as far as how rents are going.
Pablo Gonzalez:Sounds good, man. So what is the, what is the foundational reason why you want to get into like these, like fearful hairlines? You call it a fear. We're like in a fear market,
Gregg Cohen:right? Well, and here's what I try to do. I think we all feel the fear, but I don't think people make the connection between what is the biggest problem with
Pablo Gonzalez:And
Gregg Cohen:the most natural reaction when people are fearful is to do nothing. And people feel like doing nothing is an okay thing to do. But what I am trying to help all of our clients, all of our Not Your Average Investors understand is that if you buy into the fear and you do nothing, there is a huge opportunity cost. It may be uncomfortable to take action when there's a lot of noise and fear out there. But if you look at some of the best investors that our world has ever had, they have talked about how it is important to take action. And the reason is because if you just sit there and you do nothing, you miss out. But if you just take action, let's say you don't get it right. Let's say you make a mistake. That's still a better movement because you can then take another corrective action. Because doing nothing leads to inactivity for long periods of time. And ultimately that opportunity cost is really, really great. So I looked up and last, last quarter, for those who were, who joined us last quarter, we talked about Warren Buffett, because I think this is just a shiny example of how to act as a leader. Just a world renowned investor. How does he think in moments where there is fear and noise in the system? Warren Buffett, he of 136 billion in net worth, the Oracle of Omaha, somebody who is incredibly generous, by the way. And the quote that he's probably most known for is that He says, you want to be greedy when others are fearful. You want to be fearful when others are greedy. It's that simple. And I thought it was interesting. You know, he still lives in the same house that he bought back in 1958. He is famously frugal, man. Famously frugal, but also very giving. He's pledged to give away 99 percent of his wealth. So when I, when I hear that quote to me, listen, I don't know him to be a greedy man, but I think he's helping to prove a point here. When he's talking about you want to be greedy when others are fearful, he's talking about you want to be ready to take action. And so we talked about his example last time and I said, well, let me give you a few other examples of people that I think are just wonderful leaders, wonderful success stories. And so then I went to Oprah Winfrey. I think she is just incredible. She's the first black female billionaire. Estimated net worth of about three billion dollars. She's
Pablo Gonzalez:done pretty good.
Gregg Cohen:I mean, she has changed so many lives. And here's what she thinks about the idea of doing nothing, right? And how to manage risk. She says, she believes that one of life's greatest risks is never daring to risk. She's saying the opportunity cost of doing nothing is the greatest risk. It's the greatest cost. and I wanted to share more stories, too. So I think of Warren Buffett. I think of Oprah Winfrey. They're kind of like on my Mount Rushmore of just wonderful leaders, investors, people who have overcome great odds. And so I started to think about my third, who would be on the Mount Rushmore here. And it went straight to Ashton Kutcher. Ashton Kutcher. Wrong. Of the movie, Dude, Where's My Car? Yeah. Okay. Ashton Kutcher says the only thing that matters is that you take action. The reason I chose Ashton Kutcher here is to, to bring a little comedic relief here because he, obviously his movies are. Our classics, by the way. But what Ashton, maybe you don't know this, but Ashton Kutcher's actually a very successful investor. He was a very early stage investor in Uber and Airbnb. Mm-Hmm. And he's worth 200 to$300 million and the majority of his wealth actually comes from his investments. And so if you start to think being that type of an early stage investor and investor, there's a whole lot of people that tell you you're crazy.
Pablo Gonzalez:Hmm.
Gregg Cohen:There's a whole lot of fear that you have to navigate. Hmm. And so I think it's interesting worth noting that. He specifically talks about how you need to take action in moments where there is fear. So we can learn from Warren Buffett, Oprah, and don't forget about Ashton Kutcher. Don't
Pablo Gonzalez:forget about Ashton Kutcher. He's not living off that 70s show money, he's living off that Uber money. That is true. Let's go, yeah.
Gregg Cohen:And then I'd also like to point out, how much does this inactivity cost? Last quarter, I broke down an analysis of how much it might cost in one realm. Well, I wanted to give you a different perspective. I said, listen, it's from 2019 till 2024. Obviously, real estate has done quite well, but there have been a whole lot of articles that thought that the real estate crash was coming. And so I said, well, let me just type in real estate crash from 2019 to 2024. And how many articles popped up? And about 52 million articles popped up from 2019 to 2024. In
Pablo Gonzalez:20, in point 20
Gregg Cohen:seconds. Yeah. Yeah. And point two seconds, right? And the first one here is very similar to all 52 million, which is the housing market is a bubble full of fraud. And it's going to pop. If you were here the last quarter, I went through Yeah. Cool. every single year and talked about how the talking heads and the pundits out there were saying that real estate was going to crash. And I put analysis together. Well, let's just be real simple. If you listen to any of these articles in 2019 and decided to pass up on buying just one property rental property in Jacksonville, it would have cost you over 137, 000, just one. And many clients, many, not your average investors were able to work through that fear, channel their in and out, interest in Kutcher. And You know, and take action and they bought many, many properties and created major, major amounts of wealth for them to accomplish their overall goals. So that's why this is such an important call. I feel like you all need more data and perspective at a moment where there is a fear market, even then when times are good. And that's what I want to lean into as we go through this today. It's a different way of doing it. It's not buying into the headlines. It's seeing the headline, thinking about it, then going to the data and then adding in the perspective of managing over a billion dollars of real estate now for about 18 years.
Pablo Gonzalez:I hear you, man. I, you know, I love this term fear market, right? Because it's. While in other, in other markets, we talk about bull and bear, right? Like it feels like in real estate, it's just like, when is the crash coming? And when is the right time? Like, like I I've never heard anybody call a real estate market, a bull market. I've never heard it. I've never heard it. It's crazy. Ever, ever in my life. It's always been like, no, not right now, because this is going to happen. Or at least post. Post great recession, right? Right. So it's like this idea of labeling it a fear market, right? Like I, I think in the five years that we've been together, there's been maybe two or three quarters where the media in general was like, yeah, rental properties, that's, that's what's up. And I don't think that that happens very, very often. Right. So like labeling something as like, you're getting marketed fear, you're getting, you know, like we're in this stage of the economy. I think it, it makes a lot of sense. And again, I have sat here at this You know, not this throne, but like this, this chair here as the Lord of the Now Your Average Investor Show community. And I'm seeing you kind of like talk through not just facts, not just stories, but like data plus perspective of somebody that's been doing this for 19 years. Somebody that's been around since before the great recession that has way more gray hair today than he had when I first met him. And let's put this great, let's put this gray hairs to work, bro.
Gregg Cohen:Let's do it. Let's do it. All right. So let's dive into the first fear here. The first headline that's getting a lot of run right now and it's against the backdrop of the election. Do elections have an effect on real estate pricing and sales volume? So this is going to be a little bit of an update because we did talk about this last quarter, but we're going to talk about where this is going from here as well. To bring all of you up to speed, last quarter we debunked the myth that real estate crashed during election cycles. And I shared some of the same data with you that home prices went up in seven of the last eight presidential elections. The only one that it didn't go up was the Great Recession, because real estate caused that recession. Every other recession has been different. And so the, the, the punchline was basically, whatever your real estate market was doing prior to the election, It's going to continue during the election, and it's going to continue after the election. And so I wanted to give you an update here on pricing in Jacksonville, and guess what? That's exactly what's happened. Year to date pricing in Jacksonville is up 2. 6%, that's through October data. And that's not noteworthy because this happens in almost every election cycle in Jacksonville. Real estate prices, of course, in Jacksonville have appreciated every election cycle since 1982, the only exception being 2008. So you can see in 2020, we were up 6%. In 2016, we were up almost 11%. In 2012, we were up, We were up 2 percent even coming off of the Great Recession. I guarantee you there were a lot of articles and talking heads talking about how real estate was going to crash in every single one of those election cycles. So we got to take that information and then go to the data. And this is what the data says. It says that real estate cycles, real estate it pricing is not affected by election cycles.
Pablo Gonzalez:Got it. What about sales volume? So this
Gregg Cohen:is an interesting one. This is the, this is the little sprinkle on top here. So I've been hearing a lot of noise about how sales volume has fallen off a cliff. And so I wanted to lean into that fact here and I pulled the data here. So from July of this year to October of this year, sales volume has declined about 19%. That is real. But what I want to share with all of you is that that also is not noteworthy because this happens almost every single year from July to October. I just pulled some other noteworthy years. So in 2022 from October to December. Excuse me, from July to October, sales volume went down 4%. But look at what happened with home price appreciation for that year. Yeah. Right? Home prices appreciated about 10 percent in 2022. Well in 2020, home price, excuse me, sales volume from July to October went down 11%. But what did home prices do? They went up about 11%. Hmm. Sales volume declined more than this year. It went down 20 percent from July to October. And in 2004, it actually went down 26 percent from July to October. But you know what happened, especially during those times of great appreciation. over double digit appreciation in those years. So I want to lean into the fact that sales volume has declined, but guys, guess what? That happens almost every single year.
Pablo Gonzalez:I remember when you first started talking about this stuff, like, you know, it took you about a year or two in the show before you got comfortable starting to make like real predictions. And this was the first one that I remember you saying is like, Hey, Pablo, I think I've got a prediction for you. Media cycle for the next three months is going to say this. And now every year you get to hit it. Yeah. It's good to see that
Gregg Cohen:it's continuing. Never changes.
Pablo Gonzalez:Yeah, never
Gregg Cohen:changes. So is it because of the election? Well, you guys can kind of see where we're going here. It's not because of the election. But again, don't just take my word for it. Let's go to the data here. So I went to Jacksonville, Florida's data, and I pulled all of the years that are election years versus non election years. And I pulled the sales volume from July to October to see if there was a noticeable difference in the decline from Election years and non election years. And guess what guys, there's no real difference. The difference is like 1%. You know, election years it goes down 14 percent on average, and in non election years it went down 12 percent on average. And really, even if there was a correlation, Look at what happens with home price appreciation, right? Home price appreciation goes up in both election years and non election years. It goes up when sales volume declines from July to October. Ninety, let's see, I put the numbers together here. Oh, what was it? Ninety six percent of the years. Yeah, yeah, yeah. Ninety 2001, sales volume has gone down from July to October. 96 percent of the years. The only year was 2012. I have no idea why it didn't go down in 2012. But 97 percent of the year since 1982, home prices in Jacksonville have gone up.
Pablo Gonzalez:Seems to be a
Gregg Cohen:pretty standard thing. Yeah. Why is this getting so much run? Why is this making so many headlines? This is what I wanted to equip you all with should you get some questions about why you're buying rental properties right now.
Pablo Gonzalez:There you go. So big takeaway is. Pricing goes down since July, that's normal, right? So like you'll see a headline, you can discard that. What about this, GC? What's the status?
Gregg Cohen:Yeah, well, so here's just talking about what what does happen every single year as far as pricing. So now I'm switching from the volume perspective to the pricing perspective. As I go through this data with you, I should point out that what I'm talking about is the macro Jacksonville market. You should think of what retail homeowners are paying for properties. Very different than what turnkey rental properties buy and sell for, right? The turnkey rental property market is very different than the retail space. So what I'm sharing with you is the retail market. But guess what? Home prices go down from July. And they start to go down in the fall and in December and in the winter and then seasonality actually plays to where home values go down. The problem is that many people, and especially the talking heads, don't understand the seasonality component. So, if you're trying to write headlines right now and you see sales volume going down, and you see pricing going down from July to October, the convenient headline to write is, you Real estate crash, right? And throw in an election there where you don't have the data. And you land on real estate crash. But I wanted to show you that this pricing month to month in fall and into winter, again, is not noteworthy. It goes down from July to January of the following year. And I put the data behind it. So in 2019, in July, our median home sales price in Jacksonville was about 250, 000. Come October, it was 235, 000. But then come next July, it's up to about 265, 000. Same thing happened in 2023 and in 2024 going into 2025, the same thing is going to happen. And it's not noteworthy. This is normal. In fact, from 29, 2019, home prices declined in Jacksonville, 23 times. on a month to month basis. Yet the median home price appreciated about 90, 000 during that time. 59 percent home price appreciation. And so the problem here is a lack of understanding by those who are writing articles like this. The generally accepted way to measure real estate is year over year and that you have to do it that way because you'll draw incorrect conclusions due to seasonality. Yeah. It will lead to whatever convenient conclusion you wanted if you measure month to month. And that's a big flaw in what's going on in the, in the, in the talking head. Sounds like
Pablo Gonzalez:an error that's happened 58 million times based on your search.
Gregg Cohen:Yeah. Yeah, exactly. Exactly. So, so it's not noteworthy what's going to happen. First of all, elections have very little, if any effect on pricing and sales volume. Seasonality has led to both sales volume declines and pricing declines since July. And that will continue through roughly January of next year. And then guess what's going to happen? What's going to happen? The same thing I talked about last year that was going to happen in the year before is that from January of 2025 to July of 2025. Home prices and sales volume is going to go up. And it's because it's when people are outside trying to buy houses. the punchline here is that the market is normalizing and should continue to perform at the roughly historical rate of home price appreciation. Which is just a shade under 5 percent home price appreciation per year.
Pablo Gonzalez:You mentioned this about how this is the overall retail market and this isn't just the investor market you see. This is, I mean, like I think to the uneducated ear, you might hear this and be like, all right, cool. Then why don't I wait to invest in a rental property in February? What do you say about that?
Gregg Cohen:Well, it's just, it comes down to supply and demand and it comes down to motivating factors to sell on the retail space. You've got a homeowner who probably has Left their house and maybe moved to another house. So their house is vacant. So they probably have two mortgage payments at that time. And it's also a time when there's not as much demand out there for buyers. So they're probably more willing to drop their price in order to get. They have much more motivating factors. Now, a turnkey company on the other side does not have those motivating factors, right? We have a client base that continues to buy and buy and buy and buy. But more than that, these assets are rented even before you guys buy them. So, even beyond JWB, a really effective turnkey company will sell you the assets and they'll already be rented. So they don't have that motivation to be able to, you know, fire sale properties because they have built in demand if they've been around for a while. And then the payments being made every single month, you know, sure. We'd like to sell it, but if it takes a month longer and we're able to still sell a market value, we're absolutely going to do that from the turnkey investor perspective.
Pablo Gonzalez:So as a, as a, as a passive rental property investor, there are no deals to be had in seasonality. Right? Like it is just, you buy the property, you start locking in that longterm home price appreciation. It's not going to change for you year over year because we're holding on for a long time. Full market cycle at the end of the day, you just want to get in the game. You want to get your tax breaks in before the end of the year, right? That's way more valuable than like, you know, a bunch of other things, but like these prices are not going to go down for the passive side. If you're somebody that's like looking to move and live somewhere, you might be able to find a desperate homeowner that'll sell it to you, but it's not going to be somebody that has a stabilized asset ready to go for you where it's completely passive on that side. You'd be looking to like put work into it if, if you're going to have to do something like that.
Gregg Cohen:Yeah, I think if you're looking at this from like retail home or homeowner perspective, this is great information for you to know that you're going to get your best deals. if you buy houses in, you know, October, November, December. So you should be able to get a discount off a market value simply because of seasonality working in your favor there. Very different with the investor mindset and the turnkey operator mindset. You can mention, you can make an argument there's more demand from the investor headspace at that point. You mentioned tax savings and other things that are going to allow people to take more advantage. buying before the end of the year. People just,
Pablo Gonzalez:people do tend to buy a lot during the end of the year, right? To lock that stuff in. All right, cool. All right, GC. Thank you. So that's the data per perspective. Update elections still do not affect rental property investing when you're thinking about it from a full market cycle. Now, the next one that you're going to hit on GC is actually, it's actually a conversation that I feel like I've been getting in on, right? Like I've been traveling the country, going to a bunch of different like trade shows and stuff like that. And people are like, man, two big hurricanes in Florida. You're a real estate, I'm going to property management companies, right? Like, like conferences, right? People are like, how can you even deal bro? You know, like, is that going to crash the market? What happens when the big one comes? All these kinds of things. So I'm pumped to see what you got on hurricanes, man.
Gregg Cohen:Yeah, absolutely. Well, I just think I mean, it's been noteworthy living through those two big hurricane hits here in Florida. I mean, you and I have lived in Florida almost our entire lives. And so we're very, you know, we're very used to major storms and hurricanes coming. It's unique to have two big storms that hit right back, back to back and the pain and the heartache and the loss of life and the property damage has been a lot for us all. To, to take in. And it's just so emotional when you see images like this. I, I pulled images of some of the biggest storms that our country has endured. You know, our hearts go out to, to those who have lost loved ones and who have been through a rebuild. I've never, I've never been affected that way and I can't imagine what, what that is. You know, so, but there, there's just, I feel like I have a, an opportunity to help people, you know, lean into the emotion of that and be there for our, for our brothers and sisters out there, but also understand how you can make wise investment decisions. Because if you let that emotion guide you, you might otherwise make a poor investment decision that might set you and your family back years, maybe decades from where you might have otherwise been if you didn't let that emotional component seep into your investment decision. And so my first thought as I started to kind of like lean into this, I was like, you know, most people think and And before I got to the data, I probably would have thought that real estate markets that had been really severely hit by some of the biggest storms might have taken a long time to recover, if ever. And so I said, well, let me go to the data. Let me, let me see there. And so I started to pull the data of the biggest storms to hit our country. And then I went and I said, okay, well, one year later, What did the market look like? And then I said, well, 10 years later, what did the market look like? And so I'm going to share that data with you to understand do major hurricane landfalls really crater and crumble a real estate market?
Pablo Gonzalez:Interesting, man. And, you know, like we have the images here of the four hurricanes that you looked into, you know, I think everybody has this image of Katrina, right? Like that, that feels like a market that probably got devastated. I remember hurricane Hugo. It's like the first kind of, I had, I had just moved here from Spain and it was like the first one that was like, Threatening Miami and nobody worried about. And then I really remember Hurricane Andrew because I was a 12 year old kid in Miami and just completely like throwing us for a loop for many years, right? Like it felt like Miami didn't recover for many years from a residential standpoint, probably about five years. We've talked about before and after the hurricane, which I'm sure they talk about in Katrina. And then recently, right? This hurricane in Punta Gorda. a couple years ago that just went in there and ravaged Fort Myers and like that, that, that Casanova, Captiva area, most
Gregg Cohen:expensive storm in our history,
Pablo Gonzalez:most expensive storm in our history, man. So,
Gregg Cohen:I'm curious to know what you found. Well, the data really surprised me. I mean, sometimes I put the data together and I, and I surprised myself. And so I wanted to share it with all of you. So here's the list of the, the biggest storms that I could. That I could find in recent history and even in some not so recent history either cat fours or cat fives. I included Katrina here because it was actually a cat three at landfall, but we, we know how devastating Katrina was. Yeah. And I,
Pablo Gonzalez:yeah, people don't know that Katrina messed up Miami real good before it got to New Orleans. I was there, right? Like it hit, it went through the South Florida and then it went and hit New Orleans. Right. And like it definitely messed up Miami pretty good. Yeah. Yeah,
Gregg Cohen:absolutely. So I, I saw the year of the fall, the city that, or the real estate market that was hit. And what happened to home prices the following year? And this blew my mind. Right. I'm going to point out a couple of, of couple of them here. Katrina, Katrina made landfall in 2006. Did you know that home prices actually went up over 5 percent in new Orleans? That blows my mind.
Pablo Gonzalez:Blew my mind. That blows my mind. Like out of all of these, if there's one that I'm like, no chance at recovered in a year or whatever, it would, I would have put all of my money on
Gregg Cohen:like my, my bet would have been on. There was a lengthy recovery. Yeah, like, but like five years, New
Pablo Gonzalez:Orleans is crushing it now, right? But like not next year.
Gregg Cohen:I was surprised. Yeah, I was surprised and then you you see of the following ten years Is it performing along what otherwise would have been the trend for that market and it is for Hurricane Katrina You know in 2005 obviously 2005 happened to ten years after that was an up and down road So the following ten years you had eight and a half percent home price appreciation. You don't see depreciation there at all
Pablo Gonzalez:I mean, it's eight and a half percent, ten years, with the middle of those ten years being the Great Recession after a ravaged hurricane. Like,
Gregg Cohen:Go back to 1992. Yeah. Hurricane Andrew. Yeah. Can you believe that the year after, the year of the hit, and looking one year later, eight percent home price appreciation in Miami Dade? That's shocking to me.
Pablo Gonzalez:Shocking. That's shocking to me. And over the next year I did not get the sense that people were moving there. I did not get the sense that there was any economic activity out there. Right. Outside of recovering from this thing for a full year.
Gregg Cohen:You know? And that's Yeah. So this is an example of emotion, of what makes sense to us emotionally versus what actually happens in a real estate market. And that's why this data and perspective is important because we can equip you to make great decisions or at least take a reason to not invest off the table.
Pablo Gonzalez:I
Gregg Cohen:think that's the goal here. I mean, even Hurricane Hugo, which as a country, we're certainly unprepared for how to handle that one. Home prices went up 4 percent the following year and 40 percent over the following 10 years. So nowhere here in our biggest hurricane landfalls did we see any type of decline, and certainly not crumbling, cratering devastation from a real estate pricing perspective. Interesting data. Now, why is that? Why is that happening? I don't know, man. Well, I didn't think about this until I started to do some more research, but if you think about what actually happens when markets get devastated, it comes back to, again, supply and demand.
Pablo Gonzalez:So
Gregg Cohen:a lot of supply of housing is unfortunately no longer there. So the supply is lower. The people that were living in those homes now want to live in the same communities. And so now they are going to find another home largely in that same community. So demand actually increases. And supply decreases. And supply
Pablo Gonzalez:decreases. Yeah, okay. This
Gregg Cohen:was a major unlock for me as I've been going through this over
Pablo Gonzalez:the last
Gregg Cohen:few weeks. So I think what we can do is put to rest this idea that if we would happen to get Hit by a major hurricane in Jacksonville that it would somehow crater the market and it would be a place that would lose money from a real estate pricing perspective. It just doesn't isn't shown in the data.
Pablo Gonzalez:So that that makes sense. Supply and demand. We're seeing that. Right. I would say the other thing that people are asking me a lot that have been asking me a lot, as a Florida investor, when I walk around is about insurance. And now that these hurricanes have hit, the next question is not even like, Oh my God, our price is going to crash. We're like, well, what are you going to do about insurance? So what do you, what do you say about that?
Gregg Cohen:Well, again, there's a motion there too, especially since 2020 to 2022 as investors, we saw our insurance costs go up and now we're like, Oh man, the emotion of this, devastation coming from two hurricanes hitting in a short period of time on the backdrop of insurance costs going up for those years, we must be in for a rough road. But when I asked questions like that to the people I trust the most in the insurance space, I got a very different answer. And so I wanted to share this with you. this is an email that, uh, and a text that I got from, from our good friend, Whitney Ritchie, who is dear friend of the show. The original
Pablo Gonzalez:flow from
Gregg Cohen:progressive, the original flow from progressive
Pablo Gonzalez:person that introduced the two of us. There you go. There you go.
Gregg Cohen:And a wonderful teammate And provider of insurance for a ton of jwb clients you in the chat Many of you are saying that you know whitney very well. She's always here to give and so I said wait I said what's What's going on with insurance? Should we be worried about where insurance rates are going to go going forward? And she's, and so this is how her and I talk over email. I said, Hey, wait, I'm just gonna put your exact email on the, on the screen. She's like, well, it's not going to be very professional, but I thought it'd be good for you all to see. Get in the cliff notes, GC. What did she say? Well, so basically what she said is, listen, her Insurance providers are prepared for big catastrophic events. This is their business, right? They know that hurricanes come to Florida, just like natural disasters come to other places in the country. So there is a part of their pricing model that is built into expecting this. And she also helped me understand the reinsurance market, which is basically just insurance for insurance companies. And so when a major storm comes what's really on the hook there is the reinsurance market. The insurance company is largely limited to for lack of a better word, a deductible
Pablo Gonzalez:there.
Gregg Cohen:So, she said what we were not prepared as an insurance market was the rash of lawsuits that happened from 2020 to 2022, which were legal loopholes that were used To be able to get a lot of free roofs for a lot of people out there and put a lot of pressure on the insurance market that they were not prepared for those types of events and the glut of it. And the fact that we had like 10 times the number of claims in Florida than any other state for free roofs was not something that's covered under reinsurance. So it's the real risk of insurance premiums going up according to Whitney. And according to her, All of the people that she networks with, those who are in the know, in the insurance market here in Florida and abroad she says that we're feeling really good about what rates are going to look like next year. Interesting. Even though we just had these two major hurricanes.
Pablo Gonzalez:Okay.
Gregg Cohen:I was like, wait, can you give me some data? If I say that to the people on the show, they're going to say, eh, I don't know. Can you, can you give me an example of why you feel this way? Mm
Pablo Gonzalez:hmm.
Gregg Cohen:And she said, well, look at what happened for Hurricane Ian. Hurricane Ian hit in 2022. Mm hmm.
Pablo Gonzalez:Yeah.
Gregg Cohen:It was the most expensive storm on record. Of course, the storms now are probably going to surpass that, but that is the most expensive storm on record. Insurance rates were largely flat and have actually seen some decreases from 2022 to 2024. Hurricane Ian hit in 2022. That's right. So, And what actually happened is we had 2020 to 2022 is when hurricane, excuse me, insurance rates went way up. That was actually a period of generally less hurricane activity. So, it comes down to what are these insurance companies prepared for?
Pablo Gonzalez:Yeah.
Gregg Cohen:They're prepared for hurricanes.
Pablo Gonzalez:Yeah.
Gregg Cohen:Right? They have the reinsurance market to continue to prepare them to make sure that they're solvent through that.
Pablo Gonzalez:Yeah.
Gregg Cohen:What they're not prepared for was the legal loopholes. Yeah. We have secured that. Whitney, I wanted to share this because Whitney's just a wonderful resource. Whitney, in addition to winning a lot of awards here, like Best Insurance Agency in Northeast Florida and Fastest 50 and Gator 100 award winner, she also was voted the Legislative Supporter of the Year for her industry. She was up there in Tallahassee closing these loopholes for all of us as property investors. And so, she's feeling really good about rates. Going into next year, she is thinking kind of like normalizing. Yep. Right? Mm-Hmm. Um, and she does not have the fear that these two hurricanes are going to create large increases in insurance premiums. So, man, that strategic,
Pablo Gonzalez:yeah, that summarizes my favorite. Things about this show. Data, perspective, and a little bit of insider secrets. There you go. Right? Especially. Like, go figure, go figure that these, like, actuary and math nerds know how to price risk for things that they know are coming and have hundred year tables on, but they don't know how to price the black swans of, like, lawyers rushing in to find a loophole, right? Like, so, yeah, it makes perfect sense that that is the big risk, and it makes perfect sense that insurance companies, Are insured. Yeah. So, you know, so take us away with the, with the big, uh, data plus perspective. Take away. Yeah.
Gregg Cohen:Study of the most devastating hurricanes to hit the U S showing their home prices actually increased in the year following storms landfall. And this is due to that increased demand and lack of supply because of the storm. Those real estate markets continue to appreciate significantly over the next 10 years. Hurricanes, of course, cause a temporary disruption but they do not alter the short run or long run pricing models for that real estate market. And here's the bottom line. Hurricanes should not be a deciding factor in which real estate market you choose.
Pablo Gonzalez:Yep. Yep. Love it, man. I can definitely put that one to rest at my next conference. Can't wait for that, especially Thanksgiving dinner because my sister lives in Bermuda now. So she gets way more hurricanes. Yeah. That being said, Now, the big, the next topic that's like, it feels like it's starting to bubble up, right? Like this idea that rents are starting to maybe like go down or like there's kind of more days on market. I know that we made an announcement a couple weeks ago in the, in the chat that we're gonna talk about it, man. I can't wait for you to address this one.
Gregg Cohen:Absolutely. We're gonna, we're gonna address this head on. So you're, you're hearing some noise, some questions. Our, Rents in Jacksonville are declining. So let me give you the real data, and we'll mix in a little bit of perspective here. So single family rents in Jacksonville, Florida are up, but they are only up one and a half percent. That is actually lower than the historical average, which is 3. 6%. rent price appreciation per year, but multifamily rents in Jacksonville and in many other parts of the country are declining. And a lot of these headlines that you're reading, I know there was one headline that named Jacksonville, the market, which has the biggest rent declines, but they're not. explaining there is they're talking about multifamily rent declines. So single family rents are up. That's largely who we are serving here. We do serve some, some smaller apartment complexes on the multifamily side, but the vast majority of our clientele that we're speaking with here, you're all single family. Owners of rental properties. So let's give this kind of like a label of where we are in the rental market. And against the backdrop of many years of historic rent price growth, right now, Jacksonville's rental market is considered soft. Soft would be, call it somewhere from no growth to maybe 2 percent
Pablo Gonzalez:growth.
Gregg Cohen:Year over year and that's where we are this year. And that's also where we were in 2023, 2022 and 2021. It was a lot more as 10 percent and upwards from there, as far as rent price growth,
Pablo Gonzalez:and I would assume that, you know, this is, this is, As a, if you're a multifamily investor, right? Like, and everybody likes to talk about how multifamily is more diversified or whatever, but as a, as a multifamily investor, I'd be very concerned once you like segment this data out and see that these rents are dropping, at least in the short term. As a single family investor, it's, my head first goes like, Oh, okay, cool. No problem for me. But I would assume that there's some spillover. I'm sure that there's some crossover of family that is looking at a two bedroom, one bathroom house that now sees a two bedroom, one bathroom apartment and goes, man, you know, with these rents dropping, I can definitely like forsake the yard for the next two years for my kids or vice versa, or like three bedroom, two bathroom or whatever. Right. So it feels like it, it, that can. Even though it's not specific to the single family home, it can still affect it, right?
Gregg Cohen:It is. It can. And I wanted to put some data to that too because I wanted to just talk about how did we get here? You all have been hearing about how I've been talking about how we are drastically undersupplied in housing. That's largely because I'm speaking about single family housing here because that is our turnkey single family investor model. All of you clients out there own single family rental properties as a part of JWB here. So, but I wanted to, to, we've got to understand there's a difference between supply in the single family space and the multifamily space. So after years of under building, both single family and multifamily housing permits are now above historical averages. And I put the chart here so we could kind of see this and kind of buckets of activity, right? From 2007 to 2017. Let's just start on the single family side. We were we had about 6, 000 permits. That's below the historical average. Historical average is about 8, 200. From 2018 to 2020, that's when we started to rebuild ourselves. Let's talk about, like, money coming into the space, and let's talk about people understanding Builders were just so excited to build because home prices were going up, especially in markets where population was growing. So in Jacksonville, we were building 12, 000 homes a year. It's 12, 000 permits, but just call it close enough to that. Now, the fact that we were at 12, 000, but the historical average was only 8, 000 does not mean that we were overbuilding. What we have to start with is the fact that we are 7 million units. It's undersupplied across the entire country. We started out way undersupplied, 2018 to 2020 was the first time we actually got above the number of homes that we needed, which was wonderful. Think about if we hadn't, how much would home prices have gone up at that point? Yeah. Right. Yeah. Yeah. 2021 to 2023, you know, people are still building, builders are still building, money is still rushing in to build. And in 2024, we're still building 12, 400 homes a year on the single family side. It's above the historical average. Now multifamily is different, okay? So on multifamily, you have about 3, 300 permits that that get approved every year. 27, we were below that. 2018 to 2020, we were above that. 2021 to 2023, we were below that. Over double that and now in 2024, you're seeing a real scale back. The difference here is just how quickly you can over build in single family versus multifamily. Because what's not shown here is the number of units. When you have 7, 600 permits that are approved, those might be 100 unit apartment complexes. Right? So you create this glut of multifamily activity and housing, which can really flip the dynamics of undersupply, oversupply very quickly just by economies of scale. You don't have that in single family. So while it shows that we are above our historical average, we are still undersupplied in the single family space. So what's happening overall here is the glut of multifamily properties hitting the market in 2023 and 2024 is causing price declines in multifamilies and it's also causing a softness in the single family market. And the reason is because of what you described. For the renter population, there's a certain section of renters that will only rent a single family house. There's a certain section that will only rent an apartment.
Pablo Gonzalez:Yeah.
Gregg Cohen:And there is a section that's in between. Yeah. It's like a Venn
Pablo Gonzalez:diagram, right?
Gregg Cohen:Like
Pablo Gonzalez:they overlap some. Yes. That makes sense. And then that's enough not to drop. per se rents, but to maybe elongate the amount of, you know, like maybe, maybe flatten them out. Maybe not, definitely not as much of rental increases and maybe like spend a couple extra days on market because they're like really debating this. Yeah.
Gregg Cohen:It's certainly not declining. The single family market is not declining. It's not a bad rental market right now, but it's a soft one. And you can kind of see how this starts to come to play. Again, of course, against the backdrop of home price affordability and rent price affordability being a major topic for our country and something that we all want to improve. You can see kind of how we land in this, in this softness, but let's call it what it is. It's a soft rental market. It's not a declining rental market on the single family side.
Pablo Gonzalez:All right. So let's look into the JWB data flywheel of like what that looks like as far as like the data that you guys do and in your historical performance.
Gregg Cohen:Yeah. I wanted to do that. And I wanted to see, take a little bit bigger, like, Yeah. This is a different rental market that we're in right now than we were in 2022 or 2021 and vice versa. So how do I equip you all to make great decisions along with our team advising you in a soft rental market? And so, and then really, how do you, how do you hold a property management company accountable in a soft rental market too? So we'll start there. How to make soft rental market moves. There you go. Soft rental market moves.
Pablo Gonzalez:You are
Gregg Cohen:so good. So here's the things that you should be holding your property management company accountable to. Vacancy rate. Rent collection, lease renewals, and you also want to have an eye on market to move in days and average days on market. And so I put JWB's current performance, our historical average, and then to the best of my abilities, what the Jacksonville market is performing at or has performed at historically. And so we feel really good about our performance in a soft rental market here because of these stats. Our current vacancy rate is 4%. Our historical average is between 4 But when I see 4 percent there, I'm feeling pretty good about it. So
Pablo Gonzalez:96 percent of houses of your 6, 000 units at any point in time are occupied.
Gregg Cohen:Yes. All right. Yes, absolutely. And beaten, beaten the Jacksonville market and regular property management you know, out of the water there. Yeah. Yeah. Rent collection continues to be really strong. I, I reported on this last show, but our last three months average is 98. 4%. Our historical average is 98%. And I said somewhere between 90 to 95 percent is what a typical property manager in the Jacksonville market would get.
Pablo Gonzalez:Cool.
Gregg Cohen:Lease
Pablo Gonzalez:renewals.
Gregg Cohen:So people in their
Pablo Gonzalez:homes are paying their rent. It's not affecting that. And they're
Gregg Cohen:choosing to stay because this is a greater value and a greater relationship they have with our property management team. Lease renewals are another sign of people wanting to stay. People like the services and the value. Over 75 percent of our leases have chosen to renew. Sometimes many have chosen at significant rent increases as well. Our
Pablo Gonzalez:historical
Gregg Cohen:average is 65 to 70%. And the overall market in Jacksonville is probably somewhere like 30 to maybe 50%. I think I'm being generous there.
Pablo Gonzalez:Got it. So people are renewing their leases, staying in place. They're not like if they're there and they're being taken care of, they stay happy. Yeah,
Gregg Cohen:absolutely. Cool. And that's really important, especially in the soft rental market. You can imagine if we didn't have 75%, if we were like most other property management companies and only have 30 or 40 percent people renewing, that would be way more houses on the market that would lead to lower vacancy rate lower rent collection. You can see how it all kind of works together. So we feel really good about that, but our eye is on this marketplace right now. We are putting more resources into the marketing and leasing and property management services than we probably ever had. And so I wanted to bring you behind the curtain here to look at some of the services. metrics here that are on our minds. And, you know, certainly are on your minds. I also wanted to lean into the fact that, you know, I pulled a report for the number of clients that have a long day on market home in Jackson it would JWB. And, I don't know what you call us now, medium sized company. We're, we're a lot larger than we used to be because in the beginning it was just my business partners and I, and so our numbers have We now have roughly 6, 000 homes that are under management. Sometimes the percentages don't actually shine a light on the individual who might be going through a tough time. And so I wanted to recognize this. And we saw this in the notch, in the, in the, what, the, what's that chat? Yeah. We have 54 clients right now that have a home that's been on the market for longer than 60 days. 54 clients. And those are individuals that we care deeply about. This is a moment when your home is on the market for longer than 60 days is the worst part of the investment. We prepare every client that this happens. And if you hold on to these assets for years and years and years like I do and you do, and you've been through it too, it's a part of it, but it doesn't make it fun. And we try to lean in with compassion when clients are going through a tough time. And there's 54 of you that have had a property on the market longer than 60 days. And for some of you, it's a really, really tough time. You know, it's 54 clients. That's 3 percent of our total client population. Um, so it does make me feel good that 97 percent of clients are not going through that. But I can tell you that it's absolutely on our minds and at the forefront to make sure that this doesn't become something that could ever get to a place where it could be. a systemic client issue. And some of the things that we look at here, and we're not even close to that, but some of the things that we look at here are market to move in days and average days on market. So I just wanted to share those, those data points with you. It is absolutely on our radar and we are navigating this the best that We can and we want to empower you on how to make great decisions alongside with us when we make a recommendation because it is a soft rental market. Here's, here's why we're doing this to make sure that we can maximize your return on investment. In a time that it's not as easy to rent properties as it was two years ago.
Pablo Gonzalez:Yeah. And I could, I would imagine that for that 3 percent of investors that that's going through it, right? Like to me, I think of 52 days to 63 days The life of the investor, what you're going through is like, Hey, am I, you know, from the moment that this gets market, am I making two mortgage payments without rent coming in or three mortgage payments without rent? You know, like, like maybe before you were thinking, am I making one or two? Now you might be thinking, am I making two or three? And you know, the third one, that's real money, right? So like, that's, that's a mortgage payment. So that, that threshold of 52 to 63 is particularly painful. So why don't we, why don't we talk about what is what are the right things to do for, for the soft rental rental market, right? Like what, like what are the soft rental market moves here?
Gregg Cohen:Yeah, absolutely. Well, we're going to focus on prioritizing occupancy over rental increases. I think everyone can understand how that is a smart and prudent move in a soft rental market also because we're coming off the backdrop of year over year increases the previous year and major year over year increases for years before that. So. For many of us, those rental increases are a lot more than we expected. If you had asked ourselves three years ago versus what we have today. So, prioritizing occupancy, being comfortable with flat or even rent decreases on a per property basis as recommended by your JWB portfolio manager. And I'll even highlight rent decreases. When we talk about overall macro rents going up 1. 5%, That doesn't mean that every single property has gone up 1. 5%. Some properties, some of you experience rents that have gone up 5 percent or even 10%. There might be a situation where we might go to you and say, listen, based on our knowledge right here, right now, this is a good time for us to go a little bit below what you had before. And guys, that's okay. Like nothing here is ever going to be completely guaranteed that it's always going to go up, right? Doesn't mean that your rents are always, always, always going to go up. And our job here is to make sure that we're maximizing your return. And so if we look at the market right now, and there's a 25 decrease for rent, and that's the right thing for us to recommend for you, we're going to do that, because the thought of saving one additional month of vacancy, and that 1, 000 or 1, 500 that we put in your pocket, versus the 25 times, Yeah. You know, 12s, 300. Like, I want that 1, 500 trade for you. And I think you want a partner who is willing to say that to you. Yeah. Because that's what you need as boots on the ground. So we've been having these conversations with clients. I wanted to prepare you that that might be the right move for you even with a market that is going up in value on the macro side. I think what every client can do is make sure that they have a rainy day fund. We talk about this when we bring new clients on, all of these things that we've talked about, how rent it can take 60 days or 90 days to fill a home. This is all described on the front end for all of our clients. And we also talk about rainy day funds. So what I would recommend is setting aside three to six months of expenses for each property that you own.
Pablo Gonzalez:And that
Gregg Cohen:might come out to 3, 000, 6, 000 per property that you own. So that when one of these moments happens, which we have told you is going to happen, Mm hmm. You're not going to like it, but at least the money is there for you to go ahead and take that, pay for that, make sure that you can handle those mortgage payments and not create stress at home, which otherwise it can. And lastly, this is a great time when, when things are, I guess, you know, I don't want to make it seem like this is a dire rental market, right? This is a, things are still going up, but. This is the first time we collectively have kind of dealt with this in a very, very long time.
Pablo Gonzalez:Yeah.
Gregg Cohen:Anytime that that happens, a little bit tougher to navigate, get on the phone with us.
Pablo Gonzalez:Yeah.
Gregg Cohen:Right. When you have questions, you're not sure why things are happening. Yeah. This is a time to lean into your relationship with your JWB portfolio manager.
Pablo Gonzalez:Makes sense to me, Greg. As you know, I have two properties that had a potential turn here in like November, December. I know that one got secured another long term lease, Katina. That one's doing great. My other one, I'm doing this exact thing, right? I'm prioritizing occupancy over increases. I'm letting them extend their lease for one more year without an increase. And I'm doing it exactly because of this advice, right? Like this idea that I'd rather just hold them, you know, have them there for the next year. You know, the idea of like going on a year and a half or two years extra I decided to just go one year to then have the option to then in a year, be able to like raise it if I really, really wanted to also build up some more coffers, you know, like, and, and, and do that kind of thing. So, you know, we're setting that plan forward, building the rainy day fund, doing that. The other thing that I think of when I look at this. This list of prioritizing occupancy over rentals, being comfortable with a flat rent and like building up the rainy day fund. If I was to be buying right now, I wouldn't be thinking that I'm thinking that as somebody that already owns, but like adding a property to my portfolio, I wouldn't have to worry about that. Right?
Gregg Cohen:No, absolutely not. Right. And guys, let's just put this in perspective. Jada B clients have. Way overperformed. Yeah. When you're talking about all of your profit centers, just even on net rental income, we have way overperformed over and over and over again, because rents have gone up way more than we ever expected. Right. And the vast majority of clients are still experiencing rent increases. So if you happen to be one of those clients where you have a momentary rent decline from what it was, Guys, it's okay. Our focus here is delivering and meeting and exceeding your overall return on investment. And I know we're going to share some of the fun data that we have on that. So overall clients should be feeling really good. But I did, I did just want to make sure that people understand kind of the rental market that we are navigating right now. And to your question about buying today versus in a soft rental market, guys, it doesn't take a whole lot of time for a soft rental market to change. This is a blip on the radar. And, you know, this investment is built for the long haul. And even we've talked about the, out of the most important profit centers, net rental income is, you know, is the least important profit center.
Pablo Gonzalez:Yeah.
Gregg Cohen:Right. So you can still be cashflow positive, even if you take a little bit of a discount. And that'll be the case for a small, small number of you out there.
Pablo Gonzalez:Got it. I mean, that's exactly why I'm only renewing for a year. Cause I expect this thing to rebound and keep going up. Right. So. Data plus perspective takeaway on the soft rental market you see.
Gregg Cohen:Yeah, I'd say keep a focus on the big picture. Rents have grown roughly 30 percent since 2020. Home prices appreciated roughly 50 percent since that time. That is way more than you ever had on your evaluations when you bought into this asset class. As a JWB client, it's likely that you've earned double digit return on investment. each and every year, and you've built up your wealth by tens or even hundreds of thousands of dollars. And the short run in the long run fundamentals for rent price and overall home price in Jacksonville are very, very strong.
Pablo Gonzalez:Yeah. Like you said, it's a soft rental market, but the actual market is not soft, right? Let's talk about what the actual market looks like right now.
Gregg Cohen:Yeah. So here is this, the traditional Jacksonville real estate market snapshot that many of you have been able to see a quarter over quarter here. I show a pricing graph here of prices since 2001, and I help people see how, what a normal real estate market looks like in terms of home price appreciation. Those blue jagged lines are all the actual median home sales prices, and that red smooth line is what the normal market would Uh, have as far as home price appreciation in Jacksonville, that's a line at 4. 9 percent per year. And the reason it's chosen as 4. 9 percent is because that's what Jacksonville has done since 1982. And the theory is real estate is cyclical, which means home price appreciation levels are cyclical. You just have to hold on for long enough. And so over, uh, 10 to 20 year, Hold periods, you're going to find that your real estate appreciation is largely very similar to what the historical model is since 1982. And we're starting to see this out play out over and over and over again. You know, in 2021, people were concerned that the market was going to. Crash and I said, Well, no, it's going up. And then in 2022, people were really concerned that it was going to crash. And I said, Well, you know, what I see is normalization in 2023. I said the same thing. And I'm saying the same thing in 2024. Normalization really means it's going to go up and down around that red line. And so what's going on here is it's And it's kind of staying there. This is what a normal market does. And all of that noise about all the extremes that were going to happen. We're just that they were just noise. here's what October 2024 looks like in Jacksonville. The median home sales price is 352, 000. As I mentioned, home price appreciation year to date is 2. 6%. We have 41 days on market for a median days on market. That's the number of days it takes for a retail house to sell. That's really low. That's pretty low by historical standards.
Pablo Gonzalez:That's a quick exit for house.
Gregg Cohen:Yeah. I mean, it's really low. So, these, all these market articles talking about how the market's crashing and whatever, it's, We gotta, we gotta look at the data. I can only be kind for so long in regards to that. 51, 59 million times and you get upset
Pablo Gonzalez:about
Gregg Cohen:it. Yeah. Our months of inventory is 5. 3 months of inventory. That is elevated from where it was a year ago. Yep. We said it was going to be elevated between six to seven is a normal market, which means 4. 9 percent appreciation. Exactly. So this actually indicates higher than 4. 9 percent home price appreciation. And we would expect this number to go up the next time I do a market update with you. The
Pablo Gonzalez:next month of inventory.
Gregg Cohen:The next, well, it's hard to analyze it month to month, but, but definitely the next quarter when I do this, I would expect it to be higher than 5.
Pablo Gonzalez:3. Okay.
Gregg Cohen:Um, so don't be surprised and that's a normal market. And then foreclosures barely happen here.
Pablo Gonzalez:2.
Gregg Cohen:7%, well below the historical number, which is 10%.
Pablo Gonzalez:So these are all a bunch of great numbers in a vacuum, but I think a lot of people are coming to this call thinking about, does it make sense to buy in this market, right? So why don't you talk us through that?
Gregg Cohen:It absolutely does. You know, Jacksonville rents are expected to normalize from 2025 to 2027. And even more than that, some of the leading indicators you should be paying attention to in a market that you want to invest in are median incomes and population, and those are expected to grow substantially. So I put the data here. You can see. In 2025, we're expected to have 2. 5 percent rent growth. 2026 and 2027, about 3. 5 percent rent growth. The median household income in Jacksonville is expected to grow substantially. By 2027, we're expected to have our median household income at 94, 000. Whew. Okay. Yeah, absolutely.
Pablo Gonzalez:Yeah.
Gregg Cohen:And the reason is because so many people are moving here and so many jobs are moving here.
Pablo Gonzalez:Yeah.
Gregg Cohen:So the population growth for Jacksonville is one of the, one of the highest in the country. And it's expected to continue over two and a half percent from now through 2027. And just to put it in perspective, the historical average for the U. S. is less than one percent per year. So this is a place where people are moving to. This is a great thing for your rents and your home prices. And then if you're thinking about buying, just recognize right now you're buying assets that already have a renter in place. Yeah. That's what we were talking about before. Momentary blip of it being a soft rental market. You're not even going to notice it because your renter is already in place with a two or a three year lease. So this really is the same decision that it was. is the same decision you should have as far as buying a rental property. And, you know, I've talked a lot about this, but you know where my heart is here. Is it a good time to invest now? Or does it make sense to wait? You guys know, we talked a lot about the opportunity cost of waiting. We've talked a lot about what the market dynamics show today. We've debunked a lot of myths about the election. We've debunked a lot of myths about sales declines and hurricanes. You know, the reality is that there is a large opportunity cost for waiting. We estimated between 30, 000 to 40, 000 is what it will cost you if you waited one year from today to buy that same Jacksonville rental property. You're going to have lower purchase prices today. You also would be missing out on all five profit centers of that equity buildup that you would have earned if you held onto the asset. And that's why it'll cost you 30, 000 to 40, 000 by waiting. All of these properties are already rented and positively cash flowing. And we do have two incentives now, which equate to thousands of dollars for our clients that are making these decisions here. We have a maintenance incentive, which we've had for some time now. It comes out to roughly 4, 000 per property. And what it does is it's a payment that's made to you in your first statement that takes your first 4, 000 to 6, 000 of maintenance costs off the table. You literally get a 000 check and there's no limit to the number of properties. We're doing that because interest rates are higher than we want right now. And so this will not be around when interest rates start to make that steady, steady decline. We also have a three pack incentive. And so if you purchase at least three properties at one time or more you are going to receive 4, 000 to 6, 000 per property that goes straight towards your closing costs. It's equal to 2 percent of the sales price. And again, no limit there. I had a friend that I helped build his portfolio. He bought seven at one time. And so there was, you know, roughly 35, 000. that he had taken off of the closing cost that he otherwise would have had to pay for.
Pablo Gonzalez:Not too bad. Not too bad. Laura McIlroy is asking, any Tupac incentives? She's a big West Coast hip hop fan. Any Tupac incentives? Oh man,
Gregg Cohen:I'll bring it to the marketing team. I'm a big Tupac fan too.
Pablo Gonzalez:Yeah, me too, me too. Only Biggie incentives over here, right? They're just big ones. Um, So no, no Tupac incentives. All right, GC. So let's look at actual inventory, man. Talk us through what it looks like right now.
Gregg Cohen:Yeah, I want to connect the dots. This is the opportunity to invest in one of these properties right now. As you can imagine, there's more that we have, but they all fall just in line with this same type of pricing. What you see here is the model that we have built out that all of our clients invest in. So if this asset works for you, just think that there's probably 10, 15, 20, just like it. You can see rates of return somewhere around nine to 10 percent is what the market is bearing purchase prices somewhere around two 38 on this one. So somewhere around 200 to about two 80 is what your purchase prices will be. That means that you'll bring somewhere around 50 to maybe 75, 000. to closing for your purchase prices and for your first investment. That would be per property. Three beds, two baths, 1230 square feet, already rented at closing. That is huge. It's why you do not have to worry about a little softness in the rental market right now. And if this is something that you're interested in, this would be a great time to text. Tierra and JWB 904 293 0341 start the conversation. If you're a new client, we're going to make sure that we get a good understanding of your goals, your resources, have a really resourceful conversation here. If you're our current client and want to add this to your plan that you already built out with us, really super easy and simple. So I forgot to
Pablo Gonzalez:tease this. GC, but we have a brand new section of the real estate market update that we're unveiling for the first time right after this, right? So you are, you are texting Tiara right now. If you want these, this presentation, you want to review this stuff. 904 293 0341. But Greg has actually been working really, really hard to update us quarter over quarter. How this community has performed, right? Like not just the JWB market update, not just the headlines and whatnot, but the not your average investor show community report. GC,
Gregg Cohen:you ready to share this? Man, we, spent about a year improving our reporting so that we had more insight, not just into the returns that we were displaying for our clients, but more insight into how those returns were generated and who is earning those returns. And it, it is the baseline for all this all this greatness I'm about to share. Let's talk about it. Let's talk about it. Yeah, to me, it's about making an impact and tracking the Not Your Average Investor. Word of the year at JWB. It is the word of the year. Absolutely. So here are our client performance metrics. We have about 1, 100 turnkey clients that have purchased a little bit over 3, 000 properties. Here's interesting. Here's what's interesting. Their expected rate of return when they made the decision to buy those assets, largely between 9 percent to 12%. I don't think we've ever offered a property that's maybe more than 12 percent anywhere around there. Right. But when you look at the actual rate of return for all of those JWB clients, they're earning 21 percent on average. Very cool. So
Pablo Gonzalez:yeah,
Gregg Cohen:we talk a lot about how a under promise and over delivers one of our core values. That's under promising and over delivering and that's the type of relationship we think creates trust and continuity and lasting relationships that we want to have with all of our clients.
Pablo Gonzalez:These are the folks on this chat that show up every Tuesday, that hang out with us, that ask great questions, that stay informed, that get the data plus perspective. 1, 103 clients. 3, 022 turnkey properties sold, sold a 9 to 12 percent ROI, but averaging a 21 percent ROI. Now let's talk about what that means in straight cash, homie, do you see?
Gregg Cohen:Yeah. So this is the fun part. We're going to keep this. This tally going, this tracking going of how many clients are reaching these thresholds. So we are so proud to have three clients that have earned over 2 million with their JWB rental property portfolios. I know them by name and I know, I know many, I know, I know that I see one, right now. and I'm sure the other two, there are big parts of our community. So it's not surprising that those who are achieving, The most are the ones who are most engaged in this community. And we are super close to our fourth. client reaching the 2 million threshold.
Pablo Gonzalez:That's exciting. We should have a party for that.
Gregg Cohen:We should. We have had 38 clients have earned over a million dollars with their JWB rental property portfolio. We are up two clients and this is since Q1 is the last time that I ran this, this information.
Pablo Gonzalez:Yeah.
Gregg Cohen:We have had, we have 162 clients that have earned over 500, 000. That's up four clients since then. And we have 767 clients that have earned over a hundred thousand dollars We're up four new clients that have reached that plateau as well. Total profits delivered for all JWB clients. All of you out there is over 305 million that is going to the most beautiful people I know that are going, it's going out there for beautiful reasons to improve your family, your community, the world. And we're so happy to be a part of it. And I also wanted to, again, this urgency, this, this opportunity cost of doing nothing. I wanted to put a spotlight on that too, is because since Q1, those have been able to take action, bought those JWB rental properties, have earned over 3. 7 million just since Q1. And guess what? That isn't even tracking their home price appreciation. We update values on an annual basis and we do that largely in Q1 or Q2 of the year. So that's 3. 7 million, not including any growth. And we know that the market has appreciated it for our clients. So guys. So excited to be able to share this with you. I hope you all feel the success. It, it comes down to that impact. And it's the impact that you all get to have by having over 300 million to go and improve your lives and those around you.
Pablo Gonzalez:So good, man. 3 million, 3. 7 million since Q1 of 2024 in just cashflow. By this community. I'm so pumped to have my own a couple, a couple of shekels in there as, as part of that. Super, super exciting. It just shows, you know, the value in this community, right? Like you are getting 3 million advice in this chat when you join us on Tuesdays, right? Like these are the folks that hang out again, if you want a copy of the slides, nine Oh four. 2930341 so that you can look this over come back to the show with questions. Look over these slides. Come back to the show with questions. We do this every single Tuesday, right? You get to come here. You get to ask about the folks that are, you know, like have made 3 million this year and in cashflow that come here every single Tuesday. We do this every single Tuesday. Ask them about their experience, ask them about their different strategies, right? Every strategy is unique. So having that context is super huge. That's why this community is great. If you just want the info, you can find the podcast, Not Your Average Investor Show on any podcast platform. You can find it on YouTube. It's live on YouTube right now. If you want Check it out. But more than anything, we just I just can't get over the idea that when you are doing this, this is a team sport, right? Like you really, you know, like you might be the quarterback of your finances, but this community is your offensive line that keeps you protected, right? Like this data plus perspective is the offensive coordinator calling in the shots, right? Like, that's a good thing. I'm going, I'm going to keep, I'm going to keep the footballs here. This, this Thanksgiving dinner is going to be your Superbowl when you prove it to your friends and family. Nah, I'm just kidding. It's really special to be part of this community as we wrap up like our last quarterly update of the year, head into Thanksgiving and all that stuff. Just really, really grateful to have been part of this GC. I'm grateful to just watch you as a thought leader, continue to develop your message, came up with some. new kind of like insights of like the fear market that we're in right now. I think that that's going to be words that will stay because there's 59 million articles that are suggesting that it's a fear market out there. And I think we're going to continue talking about that. I know that we went venue hunting for the natural average summit yesterday. So be looking forward to a an announcement about that at some point in the next days. And it's going to be really fun. I'm really pumped about that venue, man. I'm pumped to see all these folks here in, uh, of next year.
Gregg Cohen:Hey, thank you guys for being here. I mean, at one point we probably had 150 folks that are tuning in. That's a new record for us. I also did want to. Let you all know that we're doing another show tonight. It's our encore. So if this wasn't enough for when you want to hang out, I know many of you did last time, you can sign up and register for the encore. Joanna, if you have a minute and you can post that in the chat you just go right there, tell your friends and your family, if you think that this was helpful for you and that they could benefit, we would love to have all of you and all of your friends and your family be there tonight. It's at nine o'clock.
Pablo Gonzalez:Text here for the slides, come up with some questions, bring them to the encore. We get a little bit spicer on the encore, right? Cause you're going to have like three or four beers before I'm just kidding. I'm just kidding. But we're going to, we're going to be there with a full belly. It's going to be after dinner. It's going to be for our West coast friends and for our friends that can't join us in the middle of the day, you are officially registered for the show now, because you've been here. If this is your first time, you're going to get text updates. If you want those to stop, let us know, but we're going to remind you. Cause we show up here 1230 on Tuesdays. We've got a bunch of great shows coming up to wrap up the year. And we got a little bit of advice for me with, for you from now until then. What do you think? Do you see? Don't be average. See you