May 2020 – Real Estate Braddahs Ep 27

May 2020 – Real Estate Braddahs Ep 27

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We just do local guys with so much to say

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Hey, hi, everyone. Thank you for tuning in to Episode 27. Me 2020 of the real estate brothers, featuring myself, Dean Witter, and my co host Lane Kawaoka. So just some things we’re going to talk about today, we’re going to go into a wahoo statistics we haven’t done that in a while, but I figured let’s touch base again on on some of them, as well as talking about some COVID-19 issues, hardest hitting speeds and then loading articles. That was provided by one of our listeners, and also a homeowner hack that I wanted to talk about since people are home and have time. So that’s me. Do you know what I’m a full time realtor, been an accountant and CP for 19 years and now I’m doing real estate investing and sales.

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So let’s jump right in into April statistics for wahoo.

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It’s pretty interesting. You’ll see that for median single family prices we have a 5.5% increase to 809,000 as well as an increase on the candle prices at 450,000 increase of 7.4%. Close sales we see not surprisingly a decrease of 22% for single family homes at 248. Sales in April. 243 clothes sells in for condos and that’s a 28% decrease. Median sale, median days on market, we see actually shorten so we can rent 19 days for single family, which is a 24% speed up I guess you could say a four days for us. So 60 is faster. And for condo prices, we have median days on market at 27 days, which is a 67% drop, or two days faster. The biggest news or one of the biggest news it’s in that small print down below is the large decrease in new listings. So for single family we have 290 new listings in April which is a decrease of 46%. And for condos, we have 440 new listings down about 40% which is interesting. And now we’ll discuss that on a future slide coming up. But before we jump into that, I just wanted to mention, oh, wait a minute, let’s wait for me. And the reason why I say that is because the stay at home work from home mandate for wahoo started on March 22. So if we were to add three days or 30 days to that, which is the estimating as the real estate transaction from acceptance to recording, that will take us out till April 22, which is only nine days of April included for, I guess, we can say is extracted from this mandate. But there are other statistics that we can look at and that’s why I wanted to look at the the data and also when may comes up, then we’ll be able to hit the ground running on those. So one point I wanted to bring up was months of inventory and trend. So we’re looking here again on a wahoo. We’ll see if you look at the arrows kind of put the arrows in red just to show the trend. But months of inventory to keep in mind is, if there are no more homes coming on market, this is how long it would take for the current invert inventory to be sold off. And the general rule of thumb is that anything less than six months of inventory is a seller’s market. So one thing good if you look at the condos, we are at 3.6 months, days, months of inventory and single family we have 2.5 months left in months of inventory. And if you can see the trend is going down for single family and sitting staying consistent for combos. And so one other statistic that we wanted to look at on the next day was new listings. And as you talked about in the that first slide. Yeah, this is a big job and you So this is one of the statistics that we can look at that, that doesn’t, doesn’t really matter that there’s only nine days that were affected theoretically, from the mandate. But like as you as they made that sound, we see a major trend and decline in the last four months, pretty much for condos and single family. So basically, this is definitely stat that we want to watch out for in the next few months. Because, you know, sellers are holding off on these listings, and it’s proportionate to the slowing of sales. And we actually, we might not see much change in the months of inventory number, which could mean a good sign in terms of price stability for us. Yeah. So that’s why that’s one. The stats is something that we want to look up on and when may comes rolling around, we’re going to definitely hone in on those and it’s something that I’m going to be watching and hopefully can provide to you folks.

5:58
Everybody got freaked out what may 5 March 15, was kind of the day right when the Yeah,

6:02
right, right, that’s when the those cases started popping up kind of big.

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So what do you think the psychology of, alright, if you had a client and they had a listing that was maybe a month in or maybe a few days? And would you pull the listing or

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personally if the, if they can hold off, I would say just just keep it there and I wouldn’t do it. Of course, this is all based on situation. But if the seller can hold off and doesn’t need to sell immediately, and can hold off, I would say we just keep it as is and I wouldn’t adjust the price because right now, the market is is very much in turmoil. So we have you know, buyers that are we have some buyers that are still willing to buy, but probably the majority is is kind of pulling off or maybe even not able to buy. So but with that said we you know There are still buyers out there and the cool thing not that cool thing, but we’re still having showings, you know, we’re following the the safety standards, but we’re still having private showings and Now with that said, when you do have showings coming through there are more serious buyers and not so much tire kickers because, you know, we’ve sent them the video, we sent them the 360 virtual tour we did, we did a live zoom, virtual showing and now they want to see the place you know, the last step is to see the place for themselves. So with that said, you know that if they’re coming in and they’re taking the time, if you will to go and see the property, you know, that they’re, they’re serious buyers, so that that that’s a good thing.

7:48
Same thing on the rental side, right? Most people are if their lease is expiring, they’re just going to go month to month and the landlords are cool because landlords are kind of desperate Yep. Yup, smoke coming checking out your rental. You know, they’re serious.

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Yeah. Yeah. So so you bring that up on the rental side? Yeah, that brings up a very interesting challenge for for landlords too. Right. So. So, and again, we talk about another stat, that statistic that’s related active listings. And the trend here. So for condos, we have just over just below 2200 in available listings for condos and single family, just below 1200 for those but you can see the trend for the arrows. It’s it’s a downward trend. So that is a

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good Sam from the standpoint of

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economics, I guess you could say supply and demand. Because if demand in theory is going down, and supply staying low, then hopefully the equilibriums are still there and there won’t be much of a drop in terms of prices. Yeah, with the bat. Good news. You do so we had a mix it up right. So here’s a wallet hub report. That came out. Keep in mind this is that April 13 report and it was showing states per their analysis most affected in terms of small businesses due to the COVID-19. And as you can see, Hawaii is ranked number one for being affected or having small businesses affected. And Nevada is number two. So I have the inkling that it’s usually related to our dependence on the tourism industry. Oh, I don’t know. can say the same for three, four or five. But, I mean, that’s just just a gut.

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Yeah. Yeah. Number one and two is hospitality and travel.

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Yeah. So just to give some perspective, yeah, and that’s the the link below if you want it to follow it. Transitioning over to another COVID related topic is this is a landlord otter cool that was sent to us by one of our longtime viewers, thank you Didi for sending this in and this was she was seeing some information from for landlords who are self managing or property managers for that matter, so this was found you find on bigger pockets and is regarding a someone who is using self managing and they have one unit one week 10 applications and how to fill vacant units while practicing social distancing. So the six step process they had talked about online marketing automated showing blocks, online apps, the signing online payment and moving in it I thought it was interesting article but I had a few words of cautions or points to bring up and the first one was regarding step two the automated showing box so apparently there’s there are third party companies that you can hire and you know, they’ll put the the, the lockbox on the rental and they will vet out And help you vet out these potential renter renters and give them access so that they can see the unit themselves. So for me personally, I’m, I’m not there yet and I wouldn’t feel comfortable allowing these third party services to to do that. So I would and so maybe, maybe that’s me and that you know, this person obviously is had a case that that worked out perfectly fine but for me that that’s something that I am not comfortable yet with. not comfortable with yet. So second thing I want to bring up was, you know, beware of scams, because for a while now, we’ve heard about scammers taking listings for sale listings, they will take the pictures, they’ll take the videos, and they’ll throw it up on on a website and say, oh, check this place out. It’s it’s for rent. And you know, send in your application and your fee and your deposit Here, and we’ll we’ll get you in. And there’s been, you know, renters that have been scammed this way. So please be careful of those kind of things. Then the fact that, you know, buyers and renters sorry, with a misspelling, they still want to physically go in and see these places at the end of the majority of them, especially for the owner occupants. So for the on the buyer side, of course, you have buyers, investors who are willing to buy sight unseen. But then again, for those people, especially me, as an investor, I’ll have at least someone else physically go in there, whether it be my realtor and my property manager, as you know, before we put in an offer. And then so my fourth point was for self managing landlords, you know, if, if you’re trying to do these kind of things, in practice, social distancing, and one thing you can do is include marketing video include a virtual tour and offer a virtual walkthrough is via Facebook Live zoom WebEx or what not. And that, you know, that will help people or potential rental renters to see the property showed up coming into and physically seeing it. And my last point is an old lady, we always talk about this, you know, leave it to the experts. A lot of times, there’s a lot of heartache for us. Self managers, myself included, I was I was self managing my properties early on, but, you know, a lot of times, you know, it’s worth the money, just leverage it out, pay the property manager to do what they do best.

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So, can you even

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manage your property if you don’t have a real estate license?

13:49
Yes, yes. Yes. In fact, if if you have your license in Hawaii, you then are supposed to have it rented out or This it’s a little bit gray. And I’ve heard different points but in general, what I’ve been hearing is that if you own your own rental property and you have license needed to market it and rent it out through a licensed property manager, so someone who Yeah, so if but if you own on your own and you’re not licensed and that you can do rent it out on you

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know, on the mainland most times you need a license to be a PA.

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Oh, really, you can just self manage. Yeah.

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But different states.

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Yeah, every one thing I wanted to talk about since people have time and being at home now is a homeowner hack. And it’s regarding the exterior of your home and the exterior of the paint. I spoke to a few vendors including professional painters, and general contractors and they all told me the same thing it’s you know, to preserve the lifetime of the outside you can shoot down the exterior of your home with a garden hose you know if you have power washer or you have big brushes to scrub it even better, you know to knock off the big debris but this is to take off all the surface dirt and the debris. And this may extend the exterior paint for you know, upwards of three four years and the reason why is you’re you’re taking off the the surface dirt and debris that potentially is making the oxidization and making the paint breakdown quicker so doing this every six months once a year could save a lot of money in terms of you know, having to go and paint outside. So just remember you know, close all your windows and your openings cover up electrical lights and and outlets and wait 24 hours at least before you start flicking on the lights in and out. It’s outside again. But no, I know that Have may have time nowadays and are home for a while. So before they lift the stay at home work at home mandate then now might be a very good time to do this to to potentially defer some some maintenance costs in the future.

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Yeah, don’t go overboard, right don’t go around on the sidewalk. Every

16:25
well and I’ve seen people with rent the power washers and actually, you know, it’s like a laser of water. So you know, be careful because that will tell us you can make a pretty good slash in your, in your skin.

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People geek out over that stuff like bubble wrap, right? Yeah. So yeah, if you guys haven’t checked out my podcasts, we talk a lot about the vacations and turnkey rentals. We’re in the passive investing side, no house flipping, wholesaling, nothing like that. And join our Community ra aloha calm but I’m going to kind of take folks through a little collection of articles starting chronologically at the beginning of the month. Kind of showing this recap and the story that was this COVID-19 was it? April 2020. So we kind of started the month with gap Macy’s, Kohl’s and furloughing a lot of employees, which is same story Under Armour for load 6600 workers. This is pretty much going around all over the country. Unemployment sort of spiked. I think we all kind of saw these headlines coming. first week of April, Warren Buffett dumped his airline stocks. He sold about 18% of the stake in Delta Airlines and 4% of his holding in southwest. I don’t have any stocks and you know, I wouldn’t be buying more. If Warren Buffett’s dumping hands but I don’t know you buy some more.

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I am

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messing around with with some day trading and things but I’m still not jumping into the market. I’m still in the short mindset.

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You should go buy one of those pressure washers. That’s probably at home maybe safer right?

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This is in lieu of going to Vegas since I can go to Vegas but yeah, I’m definitely not jumping back into merch and but it’s it’s funny that you bring that up because I believe what more unemployment stats came out today that were kind of saddening, yet the market went up. So it’s kind of

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fun, like the stock market. It’s all fake news anyway. I mean, they have to write an article to substantiate what happened today. And sometimes the articles if you watch it every day, you’re like, oh, that really that’s actually a bad news headline, but the markets are not.

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The only thing I can think of is that those those are that news is baked into the current prices that Is this the only thing and so everyone is banking on the future? And the fact that the various governments are pouring in all these funds to save the markets. And that’s, that’s, I mean, that’s my rationalization for why the markets doing what they’re doing. But, you know, how long can they do it for and how long is it gonna work for? I mean, who knows, maybe it’s upward from here in the stock market, which would be great, but it’s just hard for me to understand. So I’m still not jumping into the markets yet. I’m still staying on the side.

19:39
I don’t invest in anything I don’t understand.

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So GDP fell 4.8% annual rate the first quarterly drops in 2014 or squarely dropped since 2008. which just makes sense, right. If nobody could go to work or Well, the economy, basically shut down. Consumer spending pledge 7.6% mostly Since 1980, and incomes for 70% of the GDP next quarter, economists are projecting at least a 30% annual declines, but a lot of this is you know, duh, we kind of knew this was gonna happen. Yeah. This report came from out of CB re a commercial real estate company in the first in the beginning of the month. So, meeting some of the highlights here, the past, we appear to be past the peak of infections, but the US GDP is expected to contracts severely in quarter two before giving way to stronger run stronger growth, starting in quarter three, supported by the government stimulus and pent up demand. Dallas Fort Worth Houston, Atlanta are hopeful markets to watch as their economies begin to reopen in phases. It seems like everybody pokes fun at Georgia. Right? But, you know, the brave ones going to try and reopen first. Yeah, good for that.

20:55
Well, I think today Trump came up with some guidance too in terms of The states being allowed to open up and they were hard fast, is just purely guidance. So I think he said if there was a 14 days of steady decline in cases in the respective states, then that would be a, you know, okay for them to open. And when you looked at that there I think 19 other states didn’t pass that. That rule, I guess, for his guidance, but

21:26
are still planning to open up. So, I mean, we’ll see, right?

21:29
Yeah, we’ll see. So here’s an example of a bad news article. In my opinion. The Wall Street Journal came on and said nearly a third of us apartment renters didn’t pay per Rep. I don’t know where the heck they got their data, probably from California and those type of areas. But I mean, it’s not what the industry media is saying here. Multi housing news is in the beginning of the month, they came out and said, report that found nearly 70% of rental houses schools across the nation paid the red. And that crept up as you move throughout the month later it hit 89% in the Scott also confirmed by another source, which said rent payment rate at 93% of prior month. And, yeah, I mean across our portfolio 3500 units. collections are typically in like the 90 97% range. Normally, you’re always you know, out of 100 units, you’re always going to have three deadbeats, paying. That’s, that’s baseline. So APR, maybe there was like a few percent points 5% points less. So low 90s. Which isn’t that bad. You know, and, and most of them we got to work with and they caught up by the end of the month. Yeah, thus far. We’re in the first week of May. And little little anxious on how collections were happening. But um, you know, I got my property management reports from almost half of my guys. And thus far things are looking pretty good. You know, maybe a little bit less than April but I think overall I’m pretty, pretty relieved. No, yes. You’re seeing that from your individual You see,

23:15
same here same here. I just checked in with my property managers this week. And yeah, I was pleasantly surprised surprised with the results of of mine and actually, the think I think I mentioned it last

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episode is that my issues are with

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a few tenants that were pretty good existing. So

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I’m, I’m happy with what results for me were so far.

23:44
See what happens when you have low expectations you’re happy

23:49
to some of the people who got hurt here like student housing is seems to be impacted. I guess what’s happening here is like, you know, their schools don’t really know when they’re going to go back to session and a lot of the parents are the ones flipping the bill for these kids, no housing. At least that’s how it was when I was going to school. If so, everybody is going to be a pent up demand and pre leasing will be backloaded until parents feel comfortable. I don’t like investing in senior housing. Office leasing is getting killed. tenants and landlords are still trying to work together on the sending the respect needs of one another whereas you know, office people, they just can’t go to work right now. So that’s going down. I think the biggest loser is a short term rental. Yes, and I’ve been a big blockers have the right word of it. I just don’t like this stuff. This is this is the this is the exact reason why air DNI air DNA which is a great source for short term rental information says that dropped 880 percent compared to previous Last week in the week beginning March 9 and another 10%. On top of that in the week of March 16. In the middle of March bookings in New York, San Fran Seattle already dropped more than 50% compared to the week beginning of January 5 with drops of 35%. Washington DC. Have you seen any desperate short term rental guys unload their properties in the market yet or any lot of the fundamentals here, right?

25:25
Yes. Well, it’s we’ve had

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the after effects of the the changes in the law so I personally haven’t

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seen any

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people running with fluid fire sales for regarding you know, short term rentals or not locally,

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or early. Another chart here basically outlining the PU. That’s our high tech. Get a

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tech guy to make to make that into

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Yeah, post production, right. Yes.

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Hopefully puts like some kind of fun like

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rocket or something which we’ll put on the YouTube channel where we kind of clean this version up and send it out to you guys. So this this was Green Street advisors and other commercial real estate firm that they put this chart out and they outlined all the different asset classes. So the some of the highest risks of pandemic are like travel, lodging, senior housing, student housing, sniffs it was just kind of like season housing. Gaming. So we’ve mentioned like Las Vegas earlier, I think I’ll talk about that more. But I think the multi housing news says the best value in the downturn, maybe the old good old workforce housing Hey, so so this is a pretty actually pretty good article. So what they did was they they define this term vulnerable industries and hospitality and and restaurant to guy you know restaurants got hit hard because it can even open really unnecessary takeout. And then hospitality which is travel and like hotels casinos exactly what Las Vegas and Hawaii is. So they took all those people living in or with those type of jobs, about 18% of them lived in apartments, which is a minority compared to most of them. 52% will live in houses that they own, and 28% will live in single family home rentals. So it took me a while to kind of digest this article. But basically what they’re saying is like, those kinds of hospitality and food workers, the vast majority 88 probably 80% of them live in single family homes, whether they own it or rent it. Not that not the apartments, some other care highlights, increased multifamily vacancy, declining rents over the next two months. Is what they predicting multifamily market will bottom out in quarter three but beginning recovery and two in quarter four, fully recover in 2021. And here’s another thing that we should you know people who are always looking at what the interest rates are the Federal Reserve pledge to keep interest rates near zero until full employment returns and inflation exceeds 2%. So don’t quote me quote them. He said it right there. Also in terms of lending, now Chase is starting to tighten up a lot of their credit score requirements. So they are needing at least a 700 and require or 20% down payment. And this is just one firm but you know, chases a big player so people will probably just copy what they do and move the market.

28:51
I heard the jumbo loans are being hard to get into now that it’s kind of drying up.

28:58
Yeah, no jump alone. And here’s what my, my guess is you’re going to have more people renting houses to live because they can’t afford it and more apartment renters and potentially lower condo prices because you follow me on this one Dean like so if these guys on the fringe of like this credit score or going to get dreams of owning a house is going to get kibosh by these little tight tighter restrictions. Those are the guys going after the condos right the condos are like your, your fringe type of buyers, right. You know, they don’t have the financial backing of people buying the you know, bigger houses, you know, houses. So, I think you’re going to start to see that condo prices start to dip but I don’t know and boy it’s a little skewed right because the condo condos are like luxury stuff, right? None of the locals are buying that.

29:52
So typically, the first time homeowners or you got to start off at a condo with the prices being so price points being so high rate

30:00
Yeah, so I think the condo prices overall gonna go down just because of this. On the bigger stuff the Fannie Mae Freddie Mac on our apartments indications they’re requiring 618 months of PII. And this should also filter down to individual mom and Paul investors where they’re going to require more months of cash reserves. I don’t know what you think of this theme, but like, here’s a list of the 15 fastest growing mega cities, the biggest one that America has is New York City at 15 million. But this article was kind of talking about, like, you know, with the pandemic and people close in proximity, maybe people are going to want to move out to more less densely populated areas.

30:45
Anyone related to Japan kind of threw me off because I thought they had an issue with population growing, but I guess maybe this is immigrating to those areas. Is that what it is?

30:56
Yeah, or fraction

30:58
or like you know, like into For example people moving outside to the smaller cities and towns outside of it as opposed to clumping in p one mega city

31:09
well these are moving I’m sorry this is moving out.

31:12
Well, it’s just standing there just kind of saying that right? I mean, it was going to the media is always going to spend some kind of story time makes sense. Right yeah. So here is similar to though your wallet hub article, you know, which are the markets with the top, leisure and hospitality that’s Las Vegas, Orlando, Florida. Hoy wasn’t on this on my guest. His voice is too small to crack the top. Kind of like the you know, top free throws take percentage, right, you got to shoot at least 500 free throws or so.

31:48
Maybe we have enough military to balance it out or something. Yeah,

31:53
actually. Well, this is just have leisure and hospitality. Well, I’m sorry. Yeah.

31:58
Oh God, I gotta go.

32:00
A lot of data and Orlando, Florida are the ones they’re in the biggest red zone. Some of the winner the winner in terms of asset classes are grocery retailers, and everybody else last big in terms of commercial retail.

32:18
Costco still crazy.

32:20
People spent more this month on groceries and less on traveling and shopping since the New York Times, Captain Obvious written by Catherine Agus and people are spending more money on gaming and video games, less on movie theaters, events and trips, attractions, toys.

32:43
Do you buy anything on this past month stuck at home?

32:46
I’ve been I’ve been on Amazon a lot and I’ve been looking for stuff for fun from my home office trying to decorate it up on a spreadsheet out you know back here it’s a little white in plain so For the zoom meetings and for these these episodes I want to have a bit nicer background

33:09
some nesting activities going on

33:12
so I spent some money on some

33:16
of that staging for sale on staging props and even I just recently bought a web with another webcam just for the zoom meetings or whatnot.

33:27
I bought a webcam but a 4k one but there was there’s just too many people who bought it just like my exercise bike never came because there’s so much demand.

33:36
Yeah, majority of the webcams are sold out, went to

33:39
Best Buy was sold on Amazon had very few so I just picked a cheap one established. Let’s just try one. because that tends my my children are on the laptops doing their work during the day and so you’re zooming or they’re doing work. So that takes my laptop out of place. And I said okay, I gotta get one from my desktop now. There you go.

34:02
Buy the right tools for the job. Yeah. So some people are really sad last month because they heard that the cheesecake factory was going out of business but they got bought out by rohnert Capital $200 million. They came in and they’re gonna keep Cheesecake Factory in the game. Yay. Yay. cm so we were talking about Okay, what what’s, what’s going on? What’s the fallout of this right who are the distressed people that are going to get foreclosed on? So the the big losers here are hotel and retail. Normally, they’re hovering around one or 2% of delinquencies, you know, which is 30 days late. Now, they are hotels that 20% of their folks or other cmbs are late and retails at 10% So I put together a COVID-19 economic survival guide, you guys can go to reach at simple passive, casual calm slash COVID-19. Right? Every time I see something new, I add it to that living guide. But we all should have got our stimulus checks. Unless you are, you’re going to get a paper one which they start to go out make for. A lot of people, at least in my investor group are trying to take advantage of that. under the care of Zach, you’re able to take $100,000 out of your retirement account. Penalty free normally you’re assessed at 10% withdrawal penalty, but now because of what’s going on, if you’re impacted by the COVID-19, not infected, it’s impacted. You can take that money out penalty free and What’s also nice is you have three years to pay the taxes back. So a lot of moving around. I got this rollover chart here. If you guys are looking to take money out or just simply just move something from a Roth to SAP or vice versa, I found this. I thought this would be a good teaching moment for folks like, you know, we usually talk about how the interest rates, the fed fund rates is sort of like dry powder. They get us going. But the America we dropped the rates, like a full percent point in beginning of March, and I thought that was pretty unprecedented. But luckily, a couple was a week or two later, the $2 trillion stimulus plan came through and saved all of us. And just to recap that the COVID-19 cares act enacted in March 227. A lot of five year carry back net operating losses. I just watched a webinar on this deal and I still don’t really know what it is. I’m just going to give it to my CPA and hope they can give a little bit more some other options. Unless you know specific states that are going to get impacted Florida has a lot of tourism. New York has a lot of density and and also tourism to Illinois. They just were in a mess. They’re just a hot mess in terms of high corporate taxes, high property taxes and then migration evening. Yeah. They’re not gonna fare very well. California has high gas taxes unfunded pensions, break 48 of all US states and overall economic freedom. And then Nevada. We kind of beat them up today with the reliance of tourism. And then the air airport hubs are something to look out like Dallas, Atlanta, Chicago, New York, Denver, Orlando, Washington, DC, Los Angeles, Seattle, Charlotte, Houston, Seattle are among the top airports for passenger travel and it’s they’re saying it’s going to get 18 to 24 months to get back to normal and in terms of travel And another thing Don’t forget, this is as much as the oil crisis than anything so that impacts Houston. other sectors that are going to get impacted by this lodging apartment communities, retail centers, gaming facilities, healthcare office buildings, conference facilities, entertainment centers. But don’t forget, you know, that’s why you invest in real estate where we’re in a low interest rate environment. Americans need a place to live also, which live in apartments or Class B or C housing. They’re going to shop. So we’re still going to need grocery anchored retail in grocery stores did actually pretty well for us. And we’re going to need to produce and distribute goods so Dean can order from Amazon so we’re still getting those warehouse distribution distribution facilities.

38:55
Now you bring up a good point I was actually going to put out on one of my last slide I was gonna put up Maslow’s hierarchy of needs pyramid, because sheltering is on the bottom of that. Right. So to point that out to, especially for us investors, yeah.

39:13
But the question is, is for an average renter out there is are they going to save their money to go to the rent, right? If they get a 1200 dollar SteamOS check. You know, hopefully they don’t pay their Netflix subscription or their iPhone bill before they pay a rent. Right?

39:31
Right. Well,

39:32
another thing too, is he hopefully they start thinking long term too, because if you if they are thinking that way, and they’re gonna cover up Netflix subscription or whatnot, you need to consider in the long term like right now, they might be saying, Well, my landlord can’t do anything to me right now because he’s suspended evictions but what’s gonna happen two or three, four months down the road when they can and and You know, at that point, you know, the landlord may have will have the discretion to, to put them on or whatnot. So I mean, that’s something to very much consider for the for the tenants to consider because I think I mentioned in our last episode, we had the request from my co few of my tenants to potentially amend the lease agreement. We were trying to, I was trying to renew the lease agreement, keep it the same rent, and they had asked in light of the current situation if they go Lord. And so I went back to the property manager and asked him, What’s the situation? You know, are they unable to pay, they lose their jobs? So both of them were essential workers and the response was, please for please forget, we ask that. We check that request and they sign the long term the renewal. So again, people have to have that right mindset to think long term and not be caught up in all this craziness, which it is, I mean, it’s craziness, right? So

41:05
yeah, never happened before. But you know, collections are still strong, and, you know, residential real estate people and your place to live. And I think maybe the institutions will start to get a little gun shy with, you know, funding new hotel projects or, you know, assisted living, that kind of stuff and just go back right back to the basics. And remember, you know, I got this graph here, volatility is very real estate’s very similar to bonds, or stocks have almost double the amount of volatility and returns are double bonds very similar to stocks. So, I mean, to me, a blend between risk adjusted return I don’t think you can beat real estate. This article is is a little old. But I mean, things are changing every day, right? Which states are opening and and I think we’re in a time of feel like The Times are changing. Right? Like we’re kind of coming out of this may not feel like that in Hawaii but you know, I talk I’m on the phone with people in Texas all day long in California and that’s that’s the sentiment. I hear from those guys.

42:16
What’s gonna be the new normal? Yeah,

42:17
yeah. I mean, people were out celebrating on cinco demayo. You know, they were spacing out, social distancing, but they’re enjoying the Margarita and celebrating and trying to get this country back going. So you know, is hope on the way. This is a great article from stat news calm where they Chronicle all the little vaccines and shipments that are coming down the pipeline. There’s all kinds of news out there, right? Some of these guys say it’s gonna be ready in three months. Some of them it’s three years. I don’t know. They’re working on it. And then just a reminder, some of the past pandemics we’ve had SARS MERS Ebola, the stock market, you know, bounced back In six months, here’s a little graphic that I put together. People are asking like, Oh my God, is the real estate market gonna crash? Well, maybe the residential real estate but at least commercial real estate. It’s going to take a lot of steps to get there. I think we kind of got up to tenants can pay rent and market vacancy go up? I don’t think we got past that stage. Yeah.

43:26
Yeah. To your point. lien. It’s, there’s a difference in your leg. Yeah.

43:29
In real estate market compared to the stock market whenever

43:33
it happens.

43:35
Yeah. I mean, I remember in, you know, again, March 15. was when things kind of took a turn for the worse in terms of the stock market, or even before that, right. Yeah. Yeah. And you were like, Ah, yeah, the sky is falling. And then people are like, how’s the real estate doing? Um, I kind of felt irresponsible because it was like, nothing happens. So like, I don’t know, you know, it’s like Another day.

44:02
Eileen, you’re bragging about it?

44:06
Oh, you know, and remember the Fed announced $2.3 trillion in stimulus and most people are upset about, like, you know, going into more debt. But the way I look at it investors are sort of cheering in their homes. Because when you own real estate, you own fixed commodities or packaged commodities. And when the country to try and inflate our way out of this debt, you’re going to be a beneficiary of those things.

44:37
And she should have hedges.

44:40
So we’ll end this with some positives coming out of this experience. And I got some here and if you have any game, but you know, appreciation for stay at home spouses. We appreciate you, Dean. We all realize how much work you’re doing Eric.

44:58
I appreciate you Lee.

45:01
Virtual Learning being accepted less meetings, people getting outside walking around. I mean, it looks like Halloween out there every night. Hmm.

45:12
Without the costumes

45:16
I think and I think I’ve seen a lot of people questioning the news and media on social media which I think is healthy appreciation for teachers to watch your kids time spent with our smaller family units, virtual zoom cocktail parties, any any revelations and your sight out of this whole thing

45:38
tied into the those comments, the the act of gratitude, right to keep be happy with what you have and the situation that you’re in. So always keeping that mindset is always great and also to think differently, right? Because sometimes this things can get you down. So you know, you want to Have all those things that you mentioned I agreed to give us that positive mindset because things are going to be changed and they’re changing already and there’s going to be a new normal so you know those who are adapting now are the ones are going to be ahead after this is all said and done me.

46:14
All right, some people are eating a lot. I’m not doing anything in their business, not using this time the you know, fill their minds with new things. Other people are doing the opposite. Right. All right. Well, if there’s no questions, we will see you guys next month. See ya.

46:39
Three real estate investing. Check out

46:42
our ei aloha.com.

46:54
Just two local guys with so much to say. So listen to the real estate brothers today.

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