Epic Real Estate Investing - The Coronavirus and Your Real Estate Investing | 959

Episode Date: March 16, 2020

The Coronavirus is here, it is real, and it impacts the economy pretty quickly! Therefore, Matt explains what it means for real estate and suggests what you should do about it. Tune in and find out more! Learn more about your ad choices. Visit megaphone.fm/adchoices

All righty, so I'm going to have to confess. I am guilty of this, but I can't any longer mock the coronavirus. Haven't done it here on the show, but I certainly have in my own personal life because that thing, it's real, it's here, and it's impacting the economy really quickly. And I'll tell you today what it means for real estate and what there is for you to do about it. This is Terrio Media. Success in real estate has nothing to do with shiny, objects. It has everything to do with mastering the basics. The three pillars of real estate investing.

Attract, convert, exit. Matt Terrio has been helping real estate investors do just that for more than a decade now. If you want to make money in real estate, keep listening. If you want it faster, visit r-e-I-Ase.com. Here's Matt. Hey, Epic Investor. It's Matt Terrio from Epic Real Estate, where we show people how to invest in real estate with an emphasis on retiring early. This is the epic real estate investing show. Really glad that you found us. If this is your first time, I'm glad that you found us. If you like what you hear, make sure you hit the subscribe button before you go.

And if this is not your first time here, welcome back. And thank you for sharing this with your friends and family because that's how we survive. And I really appreciate that about you. And I'm really grateful. So thank you. All righty. So the coronavirus. What does it mean for real estate?

And what is there for you to do about it? And I've really kind of been going back and forth on whether or not I should do this episode because everyone seems to have their own version of it. I mean, every company in my inbox is just filled with emails and every company represented in my inbox has their own version and their take on the coronavirus and their state of their business and all that. So I wasn't going to because he probably read and heard a whole bunch and probably had enough for a little while maybe.

I don't know. But it just seems like the thing to do because it is certainly at the top of mind for everybody but you know that the I was starting to think that the news is changing so rapidly what I have to might what I might have to say right now might end up being totally irrelevant by the time you hear this and besides I'm not an authority of any sort on any of this so what do I know right I'm just gonna go with it okay so what to do and I guess I can share it in a way of what I'm doing so it doesn't come across is me giving you any sort of quote unquote expert advice because I mean not an expert on the subject and I don't want it to be perceived that way so I'll just kind of share with you what I'm doing or what I'm

thinking about and what's going through my mind. First of all, don't panic, right? I'd recommend really limiting the amount of news that you watch, get your update, and then just turn it off. If you just sit there and watch and watch and watch and dwell and dwell, you're going to, your mind will start to change. I've already noticed it for myself a little bit and I had to pull back because the news, it's just adding fuel to the fire. They're throwing gasoline on this thing, every single chance that they get. And I understand the responsibility, keep the public informed of a health public health crisis, but it's really irresponsible for them to run nonstop stories of the worst case scenario.

That's what they're focused on. There's always the worst case scenario. I understand we've got to be prepared for it. But that's all they're talking about and they're scaring the crap out of people. That's exactly what they're doing. And you can hear it in their language as they report. Like, how do we talk about the worst case scenario as often as we can, but not actually put ourselves on the hook for it?

So it's in their language. A lot of if this happens, if that happens, this could happen. Maybe this, maybe that. And if all that happens, then we are in for a world of hurt and I don't know if we'll ever come out of this. I mean, it's just so bad. And so just listen to the nuances in their communication. Everything has a modifier in it. If could, maybe might.

Nothing is absolute. But the context of the stories, the interviews, and the imagery that they're using, it's really driven the public into an absolute frenzy. And I think if there's anything to be panicked about, it's to be panicked about how many people are panic. right? Because it's causing people just to do things that they probably normally wouldn't do. So yeah, the news, I don't know, no news there, right? They're not reporting the news. They're making the news like they always do. So I just turned the TV off as they, and a few last few things I saw. They had the public health officer on and he's answering the questions to a reporter.

But the reporter, like, he wasn't getting a negative enough answer. And he kept refraising. and keep asking trying to get the health guy. I just forgot his name. He's like the health officer of the United States. And he's just trying to get him to bite and admit how terrible this thing is. And the guy was like, yeah, well, it could be, sure, but that's probably not likely what's going to happen. And the reporter says, yes, but you don't know. It's got to be something like, and he was just like not having it.

The reporter needed his negative answer. Then immediately after the same reporter interviewing, I don't know, I guess the equivalent to that health guy, but with regard to finance or the economy. I don't remember what his title was either. I probably should have wrote all this down before I started recording. But same thing. The reporter trying to draw a bunch of comparisons to all the different stock market crashes and the recessions and the depressions of the past.

And the finance guy is trying to explain how this isn't the same thing. This is a health thing. It's a temporary situation. It's certainly going to have an impact on the economy that might look like something we've seen in the past. But this isn't caused by anything financial. or anything economical.

And the reporter just wasn't having it. The reporter was like, and then when the guy started to answer the question, the reporter has really lost it because the guy had said, you know, we're experiencing this little dip, but everything in the business world

is really strong right now. It was strong before this happened. It's still strong. Just everyone's kind of changed their behavior a little bit, so it's impacted the numbers. But we're likely to see a really huge bounce back later in the year. And the reporter's like,

no, no, no. There's nothing positive. could possibly come out of this is what. But my point being is just get your updates and turn it off, turn off the news and don't sit there and dwell on it. Do something productive, okay? Protect your mind. If you go to the CDC Center for Disease Control, the website with all the facts, without an agenda other than just reporting the facts to the public, you know what? If you go there and you read all about the coronavirus like I have done, you will find very little there to actually be alarmed about.

Now, I'm not pretending to be a doctor by any means. I think you probably already know that. I know nothing about the virus other than what I've read and heard from TV, radio, internet friends and stuff, all the same places that you're probably getting this information. And I understand it's an issue where actions, serious actions, need to be taken to contain this thing. But there isn't a need for panic. I haven't read anything that suggests that. Really, it's to be more to be panicked about how much people are panicking.

You know, and here's what I mean. For example, a couple weeks ago, the mortality rate in the United States was reported at three and a half percent. for this. And in one week with the newly reported cases, it has already dropped to 2.5%. That was like two days ago. And if you look at the numbers right now, and this is how you do it, you just take the deaths and then divide it by the number of cases, and that's going to give

you your percentage. Okay? And it's already down to 2%. So it's dropped 1.5% at a 3.5% so it's almost been cut in half here in a week. And I saw a report about the other week ago. Dr. Drew was on the TV before this was really getting crazy.

And he was asking the media to just calm down, stop scaring people. And he went on to kind of explain in the way that he does that once all this plays out, the mortality rate is likely to settle right around the same as the normal seasonal influenza that we all get every year, like just under 1%. I know the health guy, the health officer, he actually contradicted that a little bit today. So who knows, but the point being is, just watch the numbers. The reported cases, as I'm recording this, it continues to rise and the cases are reporting pretty rapidly because now they're doing all the testing, so now we're getting a lot more cases.

But the deaths aren't keeping up with the new cases that are being reported. And so even though the deaths might be increasing, they're not increasing nearly as fast as the reported cases. So what that does is as long as that little deficit or that spread, that gap there continues to grow that brings the mortality rate down and down and down. It's just a math equation, right? Yeah, the virus isn't nearly as harmful as the panic that's being caused by the media. And I have this small platform here to share with you.

I don't anticipate my message in reversing the panic. But because I do have this platform, I want to try and just kind of balance out the gloom and doom news a little bit with a little bit of a reality check and some optimism. Because just as the news is focused on the worst case scenario, we could focus on the best case scenarios too, right? We get to choose what we're going to focus on. So as you may or may not know, I'm a fan of the Adam Carolla podcast. Love him or hate him. I find him pretty funny and entertaining. I've taken a break from him for about last year or so.

But I was traveling when I'm not listening to a podcast for self-education purposes. I tune into Adam for my moments of escape. And I just got done back traveling from St. Louis. I was training the people there on crafting creative offers at the R.E.I. Blackbook event. and I wanted to play a short clip from this show on Friday, the Adam Crolla show, with his guest, Dr. Drew, coincidentally. Now, Drew is a doctor and has a very different take on the virus than anybody you've likely heard on CNN, Fox, or MSNBC in this last week.

I just thought it was refreshing to hear a doctor's perspective, a real doctor's perspective, without any sort of political slant to it. So I'll play it for you. Let's see, Dr. Drew is going to call in and weigh in because he's on line six. He's on line six. All right. So I should let you guys all know that in my neighborhood and at my kid's school and amongst my children,

the word coronavirus has not come up. It's literally not been discussed. It has not been discussed. The ultimate white privilege. Thank you. I have no idea what they're doing. I don't know what they're telling them at school. I imagine nothing because neither one of my children.

has brought up my son was devastated over the thought of the final four or the March madness being canceled or bumped back and the NBA. That is so far the only reference

to the coronavirus. My daughter's brought up zero and my son is lamented about the basketball season. Well, and as much as you and do are kind on the same page, like stop freaking people out people being like kids and stuff. Like, yeah, you probably don't need to like

tell. kids like every day like, oh, school's going to close, school's going to close, school's going to close. Well, that'd be the best day they're alive. That's true. That doesn't really affect kids. Why would you? Drew? Yeah, nobody needs to freak out, Brian.

That's the problem. The freak out is worse than the actual virus itself. I concur. It's also, I don't know. First things first. If you do get it, unless you're compromised or elderly or both, it's as if you got the flu for the most part so then

with that in mind it's not a I mean what I mean is it is if you get it it's a flesh wound but it's not a bullet to the head for most I think for the vast majority I think that from just what I'm seeing on social media and just talking to friends

like few people are worried about the virus like few people are actually worried about getting it people are worried about the fallout from you know financial to you know to you know the NCAA The AA Final 4 being canceled. That's the real tragedy. That's the panic.

But that's the panic. The CDC has not told us to do all these things. This is what's bothering me. The CDC has been really clear. Anthony Founcy was out again saying most Americans never going to be affected by this. People that are elderly, people that are immunocompromise, need to take careful measures. And if you have the flu or you want to these people who need to be quarantined, do so diligently. And we'll get the thing under control.

Instead, we are shutting down everything. I know we had our guests canceled today. Is that why? And a young gal, comedian. And also... Does that why? Did she cite that as a reason? She cited that as a reason.

Oh, dear. And also, the Peterson automotive event just got canceled as well. Oh, my God. I know. Do you think that the media would have had less opportunity to get hysterical,

about the, or blow out a portion, or just get hysterical or whatever about this, had the administration been not inept or on top of things or transparent or up front? You know what I mean? I didn't see one misstep. It's all sort of his rhetoric they were focused on. The CDC has done what they always do,

and they did it beautifully. Think about it this way. There was a little chopping in the rollout of the diagnostic test. This is not a screening test. It's a diagnostic test. So it took a little longer to diagnose people who clearly had the disease.

Those were the people we were instructed to test. Just those that clearly had the disease, they were already in isolation, they were already in treatment, and not having a confirmatory test does not affect their treatment. It doesn't at all. They're already in isolation.

They're already in treatment. And so the idea that the diagnostic test was choppy meant anything is ridiculous. But the point is, if you watch the news, you come away with the perception that it was botched. Right. Right.

And look, I'm sure some of it is always going to be botched because who couldn't botch it. Who can perfect them. Yeah. But the question is... It's the fog of war. They're fighting a big battle on many fronts. And they...

I get it. I keep saying what should happen here is the CDC and the equivalent organizations in countries around the world where they contained it. I want to take a big bow. South Korea is good for you. China, well done. Well, what's so?

I want to get predictions. You were prepared for it. Here's kind of the way I'll put it, and then I want predictions from you, Drew. I would say that if one of these things hits an administration, whatever the administration, there's X amount of bumbling. There's X amount of didn't react fast enough, didn't quarantine fast enough, didn't get this out, didn't get that out. Yeah.

Made a mistake here or there that wish they hadn't done. And let's just say that number is 10%. and it can vary a little bit. Now, the media can boost it up to 60% or they can tamp it down to 4%. It kind of matters on what they want to do with what they have. So I think they're jacking it up, which is freaking people out even more,

which is even if it's true, is sort of unnecessary because I think it's the one-two punch, which we didn't have with the swine flu, which is we had swine flu bad, administration good on top of it, which makes you go, who, okay, now we have this corona bad administration bumbling. Now I'm freaking out. And I think there's an element of that. And this is consistent for you because this is another case of don't tell people there's a target on their back.

Don't tell people there's a viral target on their back. I guess. Sorry, Brian's got a comment. And then, Drew, I want to get your sort of crystal ball thoughts on where this is going. I'm going to give a talk. What are your doing? Do you come in. Let me get your... I'm going to give a talk where people have the congregate in South Carolina.

Let me... All right, then give us final thoughts, like timeline, predictions. You know, I was with Dr. Oz last night, and both of us started... We were talking about postponing things, and we both instinctively said, yeah, postpone things until June, and they were, and the anchor went, do you think this will be over by June? We're both like, yeah, for sure, for sure. There'll be treatments by June. There will be vaccines by next fall, and the epidemic, you always get...

It's improved as the weather heats up. And you can already see it starting to flatten out. And with all these extraordinary actions we're taking, this is the one thing that's not being factored into anybody's model. We are changing our behavior so profoundly. I think this thing could end fast. You said next fall. Do you mean this fall for vaccines? 2020.

The vaccine by the fall, sure. Oh, this fall. This fall. All right. And yes, it warms up. Then it's less hospitable to this. That's what I keep hearing. When I say that people actually get angry, like they're upset that we're going to get through this.

Okay. I think we will. How dare you? Well, again, thanks, sir. I appreciate it. Thank you, Drew. Okay. So, there you go.

I mean, here's a doctor that thinks this might all blow over fast, right? And mainstream media is trying to prepare us for months and months and months. And the truth is neither one of them actually know. They're all really just guessing. So all that to say, just be careful what information you're consuming and how much faith you're putting into it. The facts are per combined sources of the CDC and then who. I don't know if you're supposed to say who or the WHO, and I don't even know what it stands

for. World Health Organization. There you go. And the Lancet. So those three sources combined, they had a, they were sharing some facts on what diseases kill people on a daily basis globally. And tuberculosis kills 3,000 people per day globally. I'll just put this in perspective.

3,000 people every single day, die of tuberculosis. Hepatitis, 2,400 people a day. AIDS, still a big killer, 2,100 people, 2,110 people per day are dying of AIDS. The seasonal flu, of which each and every one of us have had, more than once, kills 1,000 people globally per day. The coronavirus, 56. Not 5,600, not 56,000. and 56 globally a day.

And these stats were updated March 9th. And per these stats, whooping cough kills more people per day. Typhoid kills more people per day. Colera kills more people per day. Measles, yellow fever. All of each individually kill more people per day than the coronavirus. Rabies, of all things, kills three times as many people per day than the coronavirus is. So those are the facts.

Straight from the source that tracks this type of stuff. And it is indeed a fact that the reported cases of coronavirus are rising at the moment. I always like to separate factual from actual. So that is factual. The cases are rising and they're rising quickly. But what's actual? There are 16 other diseases that kill more people each day than the coronavirus. and not just a little bit, a lot a bit.

So all that to say, put it in perspective. Be careful which information you focus on and how much faith you put in that and your actions that you take based on that information. Let's follow our leaders. We'll do exactly what they tell us to do so we can contain this and get past it. But don't panic. Take action as you see fit. I'm not telling you what to do. Just wanted to shed a little bit of reality on the subject because everything I just shared is also real.

in addition to everything that you're hearing from your other sources. So what does it have to do with real estate market? Let's get to the real estate part. How long would that take? I was like, what? That was like almost 12 minutes. That was not intended. But I got to rambling a little bit.

But let's focus on real estate. What does it mean with the real estate market? And what is there for you to do about that? All righty. So here's for an example. Like just this morning, I was sitting at the closing table on a Sunday. They had a mobile notary come out to my house on a Sunday morning. and closed another deal this morning.

So there's a clue as to what I'm doing. I think the worst thing you can do is curl up in the corner and fear and just wait and see. It might not seem like it to you now, but this two will pass. Absolutely. And the question you want to ask yourself is, where do you want to be once it does? So here's the deal. This panic crisis that we're in right now may or may not push the economy into a recession. but something will eventually,

we've got the word due for it already anyway, whether it was this virus or not. And whenever we do get there, there's an entirely new opportunity for us real estate investors that we haven't had in years. Okay, so right now with the impact, the huge financial stimulus that's just put into play today. It's going to include printing more money

and it's going to flood the system with currency. And what that's going to do, it's going to increase the inflation rate. We've been riding about a 2% inflation rate for the last 7, 8 years or so. And that's about to go up. So when it comes to inflation, there's no better hedge against inflation than real estate. I mean, cash is a really bad currency to be holding right now if you're holding a lot. Stocks are even worse, obviously, right now. but if you have some discretionary cash, stocks are kind of on sale.

So who knows? Gold, a little better, but real estate, it's the best because it's not simply adapting to inflation like gold, but rising with demand and value the appreciation. All righty. So we've been in historical lows as far as housing inventory goes for quite a while. It's eased up a little bit in the last six months or so. But still, historically speaking, pretty low. Now, the market, it might shift here pretty soon if people hold on to their money and just kind of sit around and wait.

And they were citing that's what really happened to the stock market is people just took it out. Just wanted to be liquid just in case. But it wasn't, yeah. Anyway, moving on. Whether this health crisis causes a downturn of the market or if we get pushed into a recession or something else causes it soon, now is the time to get prepared for new opportunities and new strategies, right? we all got to hang out at home for a little while anyway. Let's take advantage of that time.

If we're going to have to sequester ourselves for a couple weeks, maybe, then make the best use of that time. Let's sharpen the saw so when this situation passes, you're going to be really ready for whatever the market looks like on the other side of this. What a great time to take advantage of at-home learning, right? Virtual learning. So what I'm going to be doing is going to be holding some free trainings, and they will really be free.

They will be whole and complete. There'll be no shenanigans going on. And what I'm going to really focus on is all the different ways of creating or, yeah, crafting creative offers. And how to put that, like the seller carrybacks and the wraps and the subject twos and all the seller financing stuff. And I'm doing this because, one, I care about you. We've been hanging out for a long time over a decade now. So how could you hang out with somebody for so long and not care about that person? So I care about you.

Two, we could all use a break from the negativity of the news. Three, there aren't any sports to watch. So there's an idea. And then number four, locking yourself indoors and watching Netflix is probably the same as curling up in that fearful ball in the corner. And number five, this is just really a grand opportunity to sharpen the saw and just be ready to hit the ground running when we pull out of this because we will. And I'll let you know in the next day or two of when and where. to go. But I just wanted to give you a heads up that over the next two weeks, and we'll start as early as this week, just doing some trainings and just show up. And I'll show you how to do this

kind of stuff and what you want to be looking out for and how you want to be adapting your approach when you're talking to sellers and how your offers look. So you just continue to make all the money that we've made in the last decade of this really good real estate market. And my opinion is when the market shifts to a direction that's not as good as it's been, I think our opportunities are greater. I think it's actually going to be a better time. I think it's really kind of a miracle with such limited inventory and it being such a seller's market for so long

that people have been able to make the money that they've made. So I think there's, I don't think I know because that's how the type of market I really got started in this was a depressed market. And that's how I made it all thrive. That's what built this. I mean, that's the foundation. of the epic real estate.

I don't know. Can I use the word empire? Not quite an empire. That's way too big. But it's what built the company over here. And so I'm going to show you all those things that I did when I got started and how I built such a large rental portfolio without ever getting a bank loan. All righty?

So those opportunities are coming. And like I said, whether it's the virus that kicks us into that little recession or something else, it's going to come and you want to be prepared when it does. All righty. So if you found this episode valuable, if you were able to withstand my rant, in my babbling. There's a good chance that you know someone else

who would appreciate it as well. So if it makes sense, share it with them and ask them to click the subscribe button when they get here and I'm going to take great care of them.

All righty, that's it for today. God loves you and so do I. Peace, blessings and success to you. I'm Matt Terrio. Living the dream.

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