George Kamel - Graham Stephan’s 2024 Real Estate Predictions | Millionaires In Cars Getting Coffee

Episode Date: December 29, 2023

My friend Graham Stephan, real estate mogul and host of the Iced Coffee Hour podcast, is back on the show to talk about how he made millions in real estate, as well as his predictions for the housing market in 2024. Links: Check out Iced Coffee Hour Order George Kamel’s new book, Breaking Free From Broke, and get more than $100 in FREE bonus items.  EveryDollar budget deal: I love a good deal, and when you sign up using this link, I’ll hook you up with a 14-day free trial and $15 off your first year of the premium version of EveryDollar. Learn more about your ad choices. Visit megaphone.fm/adchoices

What's up guys? Today is a downright treat because we are having my friend Graham Stefan back on the channel A few months back in between making you know millions in real estate and crushing the YouTube game and getting myself a fiancee Graham made the time to take a spin in the old Tesla with me and talk shop Not to mention make a young chick-fil-A employees' dreams come true Yeah Yeah right there right there, right there But I gotta be honest back then Graham and I were still in the you know the getting to know each other phase I had to be careful and play cool so I wouldn't scare him off

like I have everyone else in my life. Hello darkness, my old friend. But since then, we've become BFFFF, F. Best Financial Friends Forever. So today, we're going to do BFF stuff and get to the truth behind how Graham made his millions in real estate, any advice he has for aspiring real estate investors.

But before we put this video into drive, help me rev things up by clicking that like and subscribe button. And make sure to share this with your buddy who's convinced he is the next big real estate mogul of the American Midwest. He'll love it. We're going to pop up. We're about to get some coffee. Graham, welcome back to Millionaires and Cars getting coffee. Thank you so much.

You are currently the only repeat customer. How does it feel? Wait a second. I was also your first. You were the first. The first ever and the first to come back on again. If you ain't first, you're last. Have you made any big financial mistakes since we last hung out? Gosh.

Not really. Everything's really been on autopilot recently. But the only thing I'm going to say, I threw some money in and so far I'm down a little bit. This is Fear in Las Vegas. So I bought a little bit of Sphere stock. It was the only individual stock that I had purchased in the last like a year and a half, two years, something like that. Guess what? That's down.

The one stock I buy so far as that. That's actually shocking. Because all I see on my Instagram and TikTok is my friend's going to Vegas to the sphere to see you two. It is fantastic. So I would think in my head, wow, they're doing very well. Yeah, it's baked into the price. So I bought it in 42 something. I think it's worth like 38 to 4.

But, you know, it is what I do. I'm just going to hold it. And that's a good reminder to not do that again. Hey, stop it! Dave reviewed your portfolio when you were with us last time. Did you take any of his advice? Yes. He gave me some great advice to stick with what I know, which is real estate.

So I've been keeping that in the back of my mind, but I've been looking at real estate. I can't see any deals. I don't see anything that's worth buying, and that's the hard part for me. I don't want to rush into something. Anytime I purchased real estate, I have such a... gut feeling that this is a great purchase. It's really good. And I have such confidence that I'm not going to lose money on it, that it's going to make a sick return. I don't have that now. It's not worth

the risk to you on top of how expensive it is because it's not a deal. There's not enough of a profit margin. I'm just personally not seeing the advantage. So you still have five rental properties? I do. Okay. How are those going? Everything's fine. No issues. Yeah, I had a few repairs come up recently, which it's just like they all bundled together at the same time. It all happens at once. Are these repairs? Are they like $1,000 repairs when they happen? Multiple thousands. Multiple thousands. So one of them was a heater and I spent three grand on this wall heater.

And it broke. I broke it. I burned my hand so I punched it. The past guy who worked on it gave me the runaround has stopped responding back to me. And when I confronted him about it, showing him from the gas cover, here's what you did wrong, just pshh, and I'm not going to go after the guy. So now I got another quote for, I think it was like, three grand, another three grand,

replace the thing that I, that was already new. And then I spent another two grand on a brand new washer dryer that needed to be replaced. $1,000 on outdoor landscape lights. But on the plus side, one of them has gone without any repairs or any major issues in like three years. That's nice.

Everything else needed was under repair. Do you increase rent every year? I should. What's your, do you have a philosophy around that? The places where I get market rent, when a place goes vacant, I will reset the rent at market, and then I get it. So there's one place that I was renting, I think it was like $2,700 bucks.

I put it up at $32. I instantly got it. Wow. And so that was great. So you kind of like when it vacates, because... Yeah. The other one, the people have been there for like three years, four years. Fantastic tenants.

I really like them a lot. Yeah, sure, I could optimize them. They're probably undermarket five, six hundred bucks a month, but they occupy two of the units, always pay on time. I really like them a lot. You know, it benefits me too. Like, if they leave, my life is going to be more difficult. Sure, I could re-rent it.

But then how much am I spending to bring it back up to re-rent? What is that worth over two, three years? Oh, that makes sense. Even if it's a break-even, it makes more sense. I'd rather just keep the people that I know. Yeah. Well, I'm taking you to a little local coffee shop here called Honest Coffee Roasters. Last time we got Chick-fil-A and you got recognized,

by Joel. If you remember that nice fellow. I do. That's Joel. But now we can't get recognized because there's no drive-through. I think the team is going to bring it to us because they're servant-hearted.

Look at that. Okay. Graham, tell the people what you got. Thank you so much. Absolutely. So I got a muscle mender. What is that even mean? This was $10.

I expect for $10 you get like a huge one. That's kind of small. Listen, this is bougie, a Franklin Tennessee coffee shop. Cheers. What did you get? I got something called the Yami, which has, they say it's like a PSL.

I did it with oatmeal and it's got like little burnt marshmallows in there. Wow. Mine's good. Thanks, Dave. How often are you splurging on like a $6 drink? Never. Never?

No. If friends want to meet me for lunch, I go to this place and instead of getting a $15 lunch, there's like an $8 smoothie. It's just spilling it really good. It becomes your meal. Yeah, and that's my place. So it's like a replacement almost. I prefer it.

I'm curious when you look at a property, let's say I'm buying my first property, you're coaching me for an investment. What am I looking for as far as my return? Like if I buy it at this price, you got to be renting at this price. So first of all, I'm going to see how much you're spending every month. Right now with interest rates, the amount that you have to get in the rent, just to break even is going to be really hot. Well, you know me, I'm a cash guy. So I'm saving up, I'm paying cash for a spot. Much to your chagrin. Yeah. Controvers. commercial take, I know. Let's say I buy it at 400,000 cash. What do I have to rent it for to make it make sense? Well, you got to think right now that you could get, let's just say, 5%

on a treasury. Let's just say that's risk-free. Like, my high-old savings account is at 5.4. Yeah, it's 20 grand here. Let's just say 25, right. So what's the premium on that that'll be worth it in terms of vacancy, property taxes, insurance? On 400, I mean, you probably have to making gross in rent, I don't know, 40 grand a year, give or take on that property, about 10%. Then you divide that by 12 and get your... Right, and that's about how much. It's like it feels like now is not a great time to be getting into real estate investing. I don't see opportunity.

And I'm the opportunity guy. The thing is that in 95 of the largest 100 metros, renting is cheaper than owning. And so if your ownership costs are going to exceed that from which you could rent. It doesn't... It doesn't make math. The math is not there. What's your last, let's say, purchase that was a bigger purchase,

over 100 bucks that you were like, this was life-changing. I'd do this 100 times over again. We migrated newsletters over, and that was a few grand. That's exciting to migrate newsletters? Man. Newsletter migration. No, no. Okay, the only thing is I would want

the 1990, Zenith, Rolex, Daytona, stainless steel. How hard are those to get? You could buy them. I mean, they're for sale. How much? 40 grand. But I think they're overpriced.

So on principle, you're like, you're like, you want a deal? Or at least like you want to pay market. I'll only buy something if I feel like there's upside on it, even if I want it. But I believe the true market value of that watch probably 25. So if someone comes to me and says, hey, I got this watch 25 with a box and papers, you can do it.

Ready to go. Mint can do it. Absolutely, because then I know, okay, I'm buying it at market value. I think it'll be worth more in the future. Great. So all purchases to you, there's got to be some sort of ROI. Oh, 100%. If I need to sell it, can I break even?

Oh, can I make money? Yeah. If I feel like I'm overpaying for something, absolutely not. No matter what it is, I just don't want to do. Has there been a purchase you made and regretted it later? Because, dang, I spent so much money on that and I just had to eat it. Probably that here that we're talking about. There you go.

Yeah. For some reason, this. This one's not recording. We lost yours. We lost. Yeah. You think it died? All right, Graham, we're back after some technical difficulties.

You were too hot for the camera. I guess so. Can I say? You did an interview with my colleague, Ramsey personality, Ken Coleman, on his show. And you guys were talking about burnout. Sometimes I feel more burnt out than I have been at any other point, less excited. I feel like there's something new and exciting that you'll have to come up with soon. I don't think you'll stay where you are.

Correct. What does the future look like for you as a content creator? Right now. Now it seems to be the podcast. It's taking a priority right now. Working from a number standpoint, financial standpoint, and from an enjoyability standpoint. From a financial standpoint, it's a step back.

I get much higher ROI from just making more main channel videos. This one, though, I'm less stressed out. I'm happier. I enjoy it more. I get to meet cool people. So I think there's so many other advantages that, yeah, I'm making less. But, you know, the other best.

benefits out there, I think outweigh it. It would be cool if the main, if the podcast surpasses the main channel. Is there a day when you're like, I don't do YouTube anymore, I have full time, I'm an angel investor and real estate investor. At some point, probably,

but I had no clue. Anything can happen. Like, I don't know, five years ago today, I would have no idea to be here today. That's true. So another five years from out where I had no clue.

I didn't know how this Thursday was going to go. Me tonight. Graham, this has been. fun. Let's cheers. Appreciate it. To friendship and to growing in our personal finances. Sounds good. That's we're all here to do. Love it. Huge thanks to Graham for hanging out with us today.

And make sure to let me know in the comments who else you'd like to see in this Millionaires and Cars Getting Coffee series. If we get enough request for Guy Fietti, I'm going to make a real case for it to PR. And if you're a hopeful homeowner out there, let me tell you, I walk you through this in my new book, Breaking Free from Broke in the Mortgages chapter. I walk you through all the traps and how to avoid making some big mistakes. And by the way, I want to say thank you to Graham for the very nice blurb he gave me for this book, endorsing it. Here's what he had to say.

George dives into the financial topics that should be required learning for absolutely everyone, whether you're just starting or on your path of financial freedom. This book has every tidbit to help optimize every dollar. Thank you for that, Graham. Appreciate that. If you want to check out the book, I will drop a link in the description below. It's now on presale with some sweet bonuses. Thank you guys for watching.

I'll see you next time.