No Broke Months For Salespeople - The 30-Year Fixed Loan Secret: Adiel Gorel on How to Retire Rich with Real Estate

Starting point is 00:00:00 The only American that understood this before I talked about it is Warren Buffett. He and I were in touch in 2012. He wanted to buy 70,000 homes for Berkshire, but he said, I got to put 20% down payment on each home and get a 30-year fixed rate loan. In fact, he's the only American I ever met that from the get-go talks about it. Welcome to the No Broke Months for Salespeople podcast, the ultimate destination for salespeople, business people, and entrepreneurs. As you immerse yourself in this show, you'll discover the secrets to unlocking consistent and predictable income.

Starting point is 00:00:43 We reveal the new way to persuade human behavior by mastering the art of the teach to sell method. Get ready to transform your approach and achieve unparalleled success. And he's the author of the Remote Control Retirement Riches. He's been doing this for a long, long time, 40 plus years. And he's just a dynamic speaker. He's lectured globally. He has a TEDx talk with over a million views. And now that you've listened to this,

Starting point is 00:01:09 it's going to be 2 million because of the 2 million listeners that we have today. Adiel, welcome. How are you, sir? Hi, Dan. It's a pleasure to be here. All right. So single family homes.

Starting point is 00:01:19 I know we were, you know, behind the scene. We were just having a conversation and I was asking Adiel about what, you know, we were prepping for the conversation. And you have so much freaking passion for what you do i'm like calm that passion down let's keep that for the show adiel before we talk about you know why single family homes are the ultimate wealth building tool here's a little background about yourself where were you born where were you raised let's go way way back tell us Where were you born? Where were you raised? Let's go way, way back. Tell us, where were you born? Where were you raised? Give us a little background.

Starting point is 00:01:53 Yeah, and my background leads to this, so it kind of dovetails very well. I was born, you know, in Tel Aviv, Israel, actually to a family of real estate developers. But as a little boy, I didn't care what my family did. I just wanted to play. But still, you can't not absorb what the family talks about around the dinner table. And there are two messages that stuck. Both of them were accompanied with the following hand motion. One was, why didn't we buy these homes 10 years ago? They were so cheap. And the second one is, why did we sell these homes 10 years ago? They were so cheap. And the second one is, why did we sell these homes 10 years ago? We should have. Okay. So I kind of left my childhood figuring, okay,

Starting point is 00:02:32 you need to buy and you need to hold. I came to the US to finish up my graduate studies in Silicon Valley. I was at the university. I taught at the university. And then I got my first job in Silicon Valley. What time period? What year are we talking? I finished my grad school in 1983. That's 41 years ago. And I was an old student because you go to the military and I traveled the world for a few years. Anyway, so here I am a young man. I get my first job in Silicon Valley. Now back then there was no Google, no Amazon, no Meta. So where did you really want to work if you could? Hewlett Packard Labs in Palo Alto. That was the it place. It was right near the Stanford campus. So I got a job there, luckily for me, and I could bike literally to work and to the campus where I'm still doing a lot of research

Starting point is 00:03:25 just bike so two things happened when I got that first job number one they paid me so much more than Stanford did when I was teaching there so much more it's like today when a young guy or girl gets a job at Google you know they say whoa look at my salary yeah same thing exactly so that was one thing the other thing was even though i was young in my group there were some researchers that were in their 50s and 60s and i thought to myself they must be really wealthy if they've been here for 30 35 years this kind of salary and then when i got to know them they weren't wealthy they owned their own home and a 401k. That was it. I said, there's no way I'm going to work here for 30 years and look like this

Starting point is 00:04:10 financially. So I said, okay, I remember my background. I will start buying real estate to build an empire for me. And then I discovered something that completely blew my mind. I discovered that there's one country, you know, as far as I know, at least, in the world, that country's name is the United States of America, where they give you the biggest financial gift that exists. And it completely blew my mind. And the name of the gift is very well known. But surprisingly to me, nobody was recognizing that it was an amazing gift. The name of the gift is the 30-year fixed rate loan. So to illustrate why it's an amazing gift, these days I sometimes speak in Europe.

Starting point is 00:04:56 So when I speak in Europe, I tell them, my Americans can get a loan called 30 years fixed. They say, what does that mean? I said, well, like the name implies. The monthly payment, principal and interest is it never changes with anything inflation the cost of nothing and the loan balance which keeps going down with the payments also doesn't keep the europeans say you are wrong you don't know what you're talking about i can't believe that i drove 100 kilometers to hear you speak. That's complete nonsense. Impossible.

Starting point is 00:05:27 And we'll prove it to you with logic, they say. So you have inflation in the US, right? Sometimes low, sometimes low, sometimes high. Yeah. Yes. So 40 years ago, when you bought a postage stamp in the United States, it was 4 cents. Now it's 72 cents. Normal inflation, right?

Starting point is 00:05:44 40 years ago, you went to the movies in San Francisco for 2 bucks. Now it's 72 cents normal inflation right uh 40 years ago you went to the movies in san francisco for two bucks now it's 15 bucks normal inflation if you go to whole foods today and you buy a beautiful organic avocado it's going to be two dollars and a quarter you know we know everybody knows in 10 years very likely it's going cost $4, right? Very normal inflation. You want to tell us that in this kind of an environment, somebody is going to be moronic, stupid, idiotic enough to give you a loan that it will essentially be the only thing in the US economy never to change with inflation while everything else does. If that were true, that would mean inflation.

Starting point is 00:06:25 With the price of the real estate, right? Including everything. Yeah. The avocado, the tomatoes, the rent, the houses, the shoes, the glasses, every single thing except the mortgage. If that were true, they say, inflation would become your very best friend. People are afraid of inflation. In this case, not only is

Starting point is 00:06:46 real estate is an inflation hedge. No, you have a loan that inflation is rendering smaller and smaller in real dollars every year. It's a miracle. It would be too much of a gift, too good to be true. The lenders would have to be crazy. Ergo, you don't know what you're talking about. That's what they say. So then I say, okay, how about you do a little search? They do it. What? You really have that insanity?

Starting point is 00:07:14 The next question is always the same. How come the Americans don't drop everything and run to get as many of those gifts as they can because it'll make them rich my answer is no idea but i sure did so the reason i'm not retired because i've been doing it for 40 years and i could have been retired for probably maybe 25 of them is I have a message. The only American that understood this before I talked about it is Warren Buffett. He and I were in touch in 2012. He wanted to buy 70,000 homes for Berkshire, but he said, I got to put 20% down payment on each home and get a 30-year fixed rate loan in fact he's the only American I ever met that from the get-go talks about it in

Starting point is 00:08:11 an entrepreneur magazine they wrote an article about my interaction with him and to this day you see if you search once in a while he praises the miracle called the 30-year fixed rate law so then I discovered this when I was young at HP I said oh my god I gotta buy as many of these homes as I can so back in the 1980s which when I was doing it there was a saying that became an unwritten rule only buy real estate within 30 minutes drive of where you live. Nevermore, only 30... And everyone was doing it. Hey, salesperson. Are you struggling to close deals?

Starting point is 00:08:53 Or struggling to gain trust? Or are you struggling to create consistent and predictable income? I'm Dan Rochon. And I've seen it all. Salespeople stuck in uncertainty. Guessing their way through the business. And that's why I created the Consistent Predictable Income CPI Inner Circle to give you the tools to master, teach to sell, and finally eliminate the struggle. Learn how to influence,

Starting point is 00:09:18 close, and turn doubt into trust on repeat. No more trial and error, just results. Ready to take control? Visit www.nobrokemonths.com. That's nobrokemonths.com. Click login and get started today. So I did it too. I was a good zombie just like everyone else. I was living in Palo Alto, California. I was buying in Silicon Valley. I bought in Sunnyvale, in San Jose. Very quickly, I realized I couldn't build an empire in Silicon Valley. Because even in the 1980s, although the numbers were much lower than they are now, the bad ratio between rent and price was still there. The rents were too low. So I said, my God, in order to really keep doing it, I need to break the 30-minute rule. Luckily, well, of course, back then, I didn't have the web.

Starting point is 00:10:11 It didn't exist. And Sergey Brin and Larry Page were in kindergarten. No search for me. But luckily, I had my lab at Stanford where they had the ARPA net, the precursor to the internet. And with a little search, I found out that if I flew about an hour and a half from San Francisco, I would land in a smaller city by the name Las Vegas. That was the name. It still is the name, actually. And then I saw that I could buy homes in Vegas that cost about one quarter of the Silicon Valley price. But very surprising to me was the rent was closer to one half of the Silicon Valley rent. Whoa. So you double in that case, right? I started to travel every weekend. I always

Starting point is 00:10:59 looked younger than my age. Back then I looked like a boy boy the people in Vegas had never seen anyone buy far from home so they were sure I was just going to waste their time so I spent the first couple of months looking for a property management firm because obviously if I were to live in Palo Alto California and buy homes in Las Vegas Nevada I would need local managers to handle my homes. So after a couple of months, I found a management firm that I liked. I still was very nervous because I didn't have a chance to test them in the field yet. And then finally, a realtor took pity on the crazy boy and said, okay, I'll find you homes. And I started buying. Now, to be fair, back in the 1980s, things were a little bit simpler than now. For example, Fannie Mae didn't have a limit of only 10 loans per person.

Starting point is 00:11:51 They had no limit. Number two, you could have bought a home by taking, if it had a VA loan or an FHA loan, you literally signed a one-page document and took over the existing loan. Subject to, it was called. That stopped in the early 90s, but I used it quite a bit. So I was always pretty aggressive. I bought 22 homes in my first year. Now, before people get impressed, I want to be fair.

Starting point is 00:12:27 The average home I bought in Vegas cost $39,000 for the whole house. This was like 83, you say? This is 80. I started buying in Silicon Valley in 83. Okay. Vegas in about 85. 85. So what would 39,000 be equivalent to today? Well, I can tell you that out of the 22 homes that I bought in my first year, I still own seven. And they're worth an average just under $300,000 right now. So I mean, it wasn't hard to buy 22 homes because if they cost $39,000, back then I could put only 10% down with PMI or private mortgage insurance. And sometimes I would assume an existing VA or FHA loan with literally a thousand dollars I mean so it wasn't hard financially to do but I never met anybody who bought 22 homes so I was like whoa my friends in Silicon Valley made unbelievable fun of me this whole year what are you doing what

Starting point is 00:13:19 about the 30 minutes rule why are you crazy you're leaving the state no it's not gonna work after a year when they saw me with my 20 plus homes the logic of the engineers from silicon valley worked and they said you know what we like what you do we want to do it too i said you should go do it it'll change your future they said listen you know how busy we are you work here too you already have your homes and your manager how about you lead us okay I'll lead you so I led a group of maybe 20 engineers and over something like three and a half years we bought about 250 homes not as a group she bought six homes for herself he bought four for himself I bought a couple more but I made a very trivial discovery that even the very cautious engineer

Starting point is 00:14:05 who bought just one little home as a little test enjoyed the clout the power that comes from 250 homes because the service providers notably the managers knew if he wasn't happy he would complain to me and I'm not happy and every other manager in Vegas says come to me I'm cheaper I'm nicer I'm taller I'm prettier who doesn't want to manage 250 homes plus the many more we may buy in the future so now I liked it so much it was so much more fun than my tech life and then I started getting invited to speak about it because it was so radical back then so in one of the lectures in San Francisco was a large investment group. I'm speaking and unbeknownst to me, there is a reporter for the San Francisco paper in the room. Sunday paper, huge article. Then I get invited to speak on the NBC network, the morning

Starting point is 00:14:59 news. I said, you know what? I like this so much more. I quit my high-tech life formed ICG and then if we jump to the present I've been doing it for 40 years essentially my investors bought more than 10,000 homes in about 30 markets but the principle remains the same just today we have markets where we bought a thousand homes or two thousand homes so even an investor who comes in and buys one little home enjoys the clout of a thousand homes. It's the same thing. Now, why homes? Why single family homes? Because I began our conversation by stating that the biggest financial gift that I know is a 30-year fixed rate loan. The 30-year fixed rate loan is only given on one to four residential units. That's mostly single-family homes.

Starting point is 00:15:50 Because if you want to buy in good areas, Dan, let's say you and me are driving in a car. We're talking, having a great time. We are driving through a leafy suburb. What are we seeing all over? Single-family homes. We want to see duplexes fourplexes oh we need to go to another part of town and it looks like it hundreds of them maybe uh so you know

Starting point is 00:16:11 it's usually single-family homes but good area duplexes could also work but the reason i don't go to five units and above is because you don't get the 30-year fixed rate loan the biggest gift in the universe so i, I mean, what does this gift look like? So here is a typical story. I have a good friend who was, you know, a doctor, you know, an MD, well-paid. He started buying homes with us. He bought just one to see that the manager really did all, you know, the work because he was a busy doctor. It worked. Yeah. So he bought another one, another one. He got the message about the 30-year fixed rate loan so he put the minimum down payments to get the biggest loans also to stretch his money so he ended up buying something like 21 homes i think it was 21 homes he bought them in

Starting point is 00:16:56 his early 40s he calls me up when he was 55 and he says okay I looked at my 19 homes even though I started out with a big loan because I put a minimum down payment after 13 years in this case my loans are all just about a quarter of the value of the homes that's what inflation does to a fixed rate loan that never changes while inflation keeps raging little or much all the time. I spent a lifetime in business and in sales. You know what I've seen far too often? Struggling. Struggling to close deals. Struggling to gain trust.

Starting point is 00:17:36 Struggling to create consistent and predictable income. That's a problem I'm here to help you solve. Because success, it starts with a simple truth. It's not about you. It's about them. That's why I created the Consistent Predictable Income Inner Circle. A system designed to give you the tools to thrive, master teach to sell, and finally eliminate uncertainty in your business.

Starting point is 00:18:03 Inside you'll learn how to overcome doubt and build trust that leads to sales how to spot hidden opportunities influence meetings and get hired fast how to master hiring and find top tier talent without the guesswork how to inspire lead and gain influence so people follow you with confidence just think about that listen there's a formula to success and i'm handing it to you. No more trial and error. No more struggling. It's time to create a business that thrives. Visit www.nobrokemonths.com. That's nobrokemonths.com. Click login at the top right and get started today. I'm Dan Rochon, host of the No Broke Months podcast, the show that helps salespeople create

Starting point is 00:18:46 consistent and predictable income so you never have another broke month ever again. Let's get to work. So we said, first of all, I was super happy because on 21 homes, I had millions of dollars in equity. That was amazing. And then I took five of my 21 homes and I sold them. I didn't do anything fancy, no 1031 exchanges, nothing. Sold, paid my tax and I used the proceeds from the sale to pay off the small

Starting point is 00:19:19 remaining 16 loans. And with 16 free and clear homes, I retired from being a doctor at 55. Thank you. Thank you. And then he said the one sentence everyone always says in the future, I should have bought more. I say it and I bought a lot. I was wondering why you still only have seven of the 19 in Vegas. I mean, I bought 400 homes for me over the four years and I still own maybe around 150 of them. So some of the Vegas homes, I learned over the first few years of doing it that I only want to buy brand new homes. Many reasons. I have an article I wrote for an investment magazine. If somebody wants to get it, I can send it to your readers. And so the first few homes in Vegas I bought were not like that.

Starting point is 00:20:12 They were old. So, you know, I only kept seven of them, but I certainly have much more than seven. Yeah, I mean, seven of the 19, but what areas in the country are your 150 or warrior 400? So, you know, every bit of stuff that we're talking about here, I cover in an article that I wrote for an investment magazine, which I'll be happy to share, but where to buy to me, I've been a student of the demographics in

Starting point is 00:20:38 this country for decades. And to me, the demographic flow, the growth goes to what I call the Sunbelt states. The Sunbelt for me is Nevada and Arizona, Texas, Oklahoma, Louisiana, Alabama, Georgia, Mississippi, Florida, like that. I don't buy in the Midwest or in the North. So that's number one. Number two, I like to buy in large metropolitan areas. Why for the Sunbelt before you move on, please? Because even from the census alone, you can see the demographic flow is the strongest to the Sunbelt states. Not to mention many of those states, unlike New York and California, are very pro-business,

Starting point is 00:21:19 pro-the nice to the landlord, you know some other thing so san bel states large metropolitan areas for economic diversity job diversity i like to buy in the suburbs families with kids that go to school each kid is like a root that's being put in the ground and brand new homes so now we bought all the more than 10 000 homes in las vegas in in Phoenix, in Dallas, you know, in Austin, Houston, San Antonio, Huntsville, Nashville, Denver, Salt Lake, Atlanta, Tampa, Miami, Jacksonville, Orlando, all of those places. But today, most of these markets don't work. Why don't they work? Our biggest market market we bought more than 3 000 homes over 21 years is the phoenix metro today the phoenix metro is too high in price relative to the

Starting point is 00:22:12 rents it doesn't work so i mean today those markets do not work vegas what markets do work the ones that do are the oklahoma city market if you at the map, it's not far from Dallas on the U.S. scale. It's cheaper than Dallas. The rents are close to Dallas. The property taxes are 250% less than in Dallas. So the Oklahoma City market, we've bought more than 2,000 homes there over the past 20 years. The Tulsa, Oklahoma market works. Mobile, Alabama. The most expensive market we're still in is Raleigh-Durham, the Research Triangle. That's not very far from you. And in Florida, the Orlando market is too high. But north, east, and south of Orlando still works. So central Florida. And we are always constantly monitoring which market is coming back.

Starting point is 00:23:06 Because sometimes when the rents go up or the prices go up. So our next candidate which may join us yet again is Dallas. What makes you predict that for Dallas? I constantly talk to all my teams in all of those markets. So looking at where the rents are going looking at where in the state of texas a very huge negative is the enormous property tax very high but sometimes the rents make up for it so it works so i mean those are the markets actually it's of secondary importance where you buy because the primary thing is to get that magic 30-year fixed rate loan and then do

Starting point is 00:23:46 the hardest action for a human being to do nothing you wait you let inflation do its job yeah and um as you speak i think you know i'm with your i'm with that conversation with your parents in my life man i wish i didn't sell all those properties. I still have a few, not 150. But man, I wish I hadn't sold the ones that I've sold. My family used to walk around with dents in their forehead. I appreciate you sharing your wisdom with us, Adio. Besides what you shared with us, what else would you want our listeners to hear today? Well, I mean, I like to make it count. I didn't retire

Starting point is 00:24:26 because I want people to hear this message. And so in order to utilize it, you need to have property managers that are tested, local brokers. So we have an infrastructure in many markets where if you, let's say Dan or one of your viewers wants to come and you want to buy your first home, we will hold your hand, we will help you. You can buy that home. Of course, you can fly and look at it, which I like when you do. And then we will support you. And once a quarter for nearly the entire 40 years, we have a big event, which starting with COVID, we went to Zoom. So you can all join us. We shortened it, you know, to four hours. And I bring the market teams to talk about their market. They show us what's going on in the market.

Starting point is 00:25:11 They show us properties. I bring lawyers and CPAs. I take lots of questions. Great events. I don't charge for them. I want you guys to know. And you're all welcome to join. So to register, it's our website, ICGRE,

Starting point is 00:25:26 under the Events tab. And our last event was December 7th, I believe. And the next one is on March 1st. And 25. So that's the ICG conference. And somebody can go to www.icgre.com. Is that correct? RE stands for Real Estate. Thank you. And then go to the

Starting point is 00:25:46 events tab. Events tab. Adiel, I really appreciate you sharing your wisdom with me today. I'm going to take this podcast and I'm going to share it personally with tens of thousands of people in my real estate sales business who I interact with there to remind all of those people that I know throughout the 20 years that I've been selling real estate that the 30-year fixed mortgage is a freaking brilliant thing and they should buy now. And if you're listening to this, I recommend that you do the same, particularly if you're a real estate agent, you want to share at value, you want to share an asset, something to help your clients with this is the show to share audio thank you again god bless you viewers and listeners go to WWI cgr e.com go to the events tab register for

Starting point is 00:26:37 his upcoming free event have the best of your life be grateful make good choices go help somebody and And God bless everybody. Goodbye. Thank you, Dan. Bye-bye. You're welcome. Take care. Hey there, No Broke Months listener.

Starting point is 00:26:53 I've got some exciting news. We just passed 375,000 downloads for the No Broke Months podcast. And I could not have done it without you. I am beyond grateful for every single listener who tunes in daily, takes action, and shares this journey with me. Now, with you and I, let's take it a step further. If this podcast has helped you, imagine what it could do for another salesperson who might be struggling. Share the show with them. Let them know there's a way to create consistent and predictable income because no salesperson should ever have another broke month again. And hey, while you're at it, don't forget to like, subscribe, and leave us a favorable review. Your support helps us reach even more salespeople who need this. Until the next episode, have the best day of your life. Be grateful,

Starting point is 00:27:50 make good choices, go help someone, and share the show with a friend. God bless you.

No Broke Months For Salespeople - The 30-Year Fixed Loan Secret: Adiel Gorel on How to Retire Rich with Real Estate

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