The Iced Coffee Hour - Ben Mallah On The 2024 Housing Bubble, Getting Rich, & Going Broke

Episode Date: November 28, 2023

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You may not have a half a billion dollars worth of real estate to worry about like how I do. But everybody needs to be in real estate in some aspect of their life. Everybody. Times are not good in real estate. That's just a fact. Once it starts bleeding, that's when it starts gushing. You know, my life's going to be over. I already used up at least 75% of my life.

You know what the real scary part is? A lot of your friends start getting seriously ill. and they saw passing away and that scares you because you're going to be one of them have you noticed any benefits of cigarette smoking

like nicotine being in your system because there are some studies that show nicotine increases mental acuity it increases energy levels, focus, etc? Or is it just negative? It's highly addictive that's number one you know that that's just a known fact

listen I've been smoking for I'm embarrassed to say 45 years. My lungs are clear. I haven't been checked. I know people that don't smoke your lung cancer. I figure that out.

It's crazy. I got a poor manager and she's dying right now throat cancer and she didn't smoke. Do they know what caused throat cancer? Cancer is a weird thing, you know. But I can tell you this. I enjoy it somehow,

call it like an addiction. Maybe it's the addiction. It makes me think I'm enjoying it. But in the morning, I can't get rocking and rolling without coffee and a cigarette or two. It's just something that I'm not ready to give up. You know, I don't know. Maybe it's just the addictive being addicted to nicotine. I don't know.

But it has a lot of bad things. I know, you know, that it does to you. Like, you know, maybe shortness of breath, things like that. But I think, you know, overweight does too. But the point is it's part of my life. style. It may not work for you. And that's fine. You know, but, you know, I don't know.

What does it feel like, though, to smoke a cigarette? It gives you some sort of high, but not like a weird high, like the drugs you do. You know, it gives you some kind of, I don't know. If you can live without it, it's probably a lot better for you to live without it. But I grew up on it. Yeah. It seems like you're cutting back, though. Like, I've noticed you're losing weight and you're smoking less.

Right. Definitely cutting back. Go on getting old. You know, you start thinking about, oh, you know, my life's going to be over. I already used up at least 75% of my life. I'm, you know, so I'm not going to be here. There's going to be a lot of years that you're going to be here, and I'm not. You know, you start thinking about that.

When you start approaching, I'm 58, I just turned 58. You start approaching that 60 mark. You start thinking, you know, the real scary part is, a lot of your friends start getting seriously ill, and they start passing away. And that scares the shit out of you. because, you know, you're going to be one of them. Yeah. Have you had an instance, have you had an instance that really changed your mindset?

Like I said, you know, I've been seeing a lot of friends having health issues. And it's really got me thinking, you know, none of us are going to be here forever. We all know that. I mean, you know, best case in area, you're going to drop dead between 70 and 100. Okay. So can I prolong that? And then who wants to be old and all broken down and, you know, what a bunch of stuff would be?

what kind of quality of life is that. So, you know, when you start becoming, hitting that 60 mark, you really start thinking about the quality of your life and the longevity of your life. I mean, it's just, it's life. You know, we're only going to be here for a little while, you know, and then after you're gone, let's face it, you're gone. I mean, even the most famous people in the world,

they're gone, all right, you know, you have some memories of you and things like that and depending on how famous you were, Michael Jackson, people will remember him forever, Elvis Presley, things like that, but you're dead. All right, it's over. This might sound morbid. Are you afraid of death? Yes, everyone's afraid of death.

I don't care who you are. So how does that affect your decisions today? I mean, I've been thinking about what's going to happen to my family, you know, and people close to me if I'm not around. All right. So I'm really thinking to others. I mean, yeah, I mean, I think about myself, of course, on a daily basis while I'm here, but I'm thinking, holy shit, you know, all right, yeah, my wife's probably going to find some young guy and have a great life, but

with all the money she's getting in there. But, I mean, I start thinking about, you know, protecting everyone when I'm not here, you know, kids, wives, friends, everybody like that. So it's part of life. It's part of being human, you know. We're only on this planet for, you know, a certain amount of time. So do everything you can while you're here and enjoy it and try to protect the people that going to be here after you. So for those watching who are not familiar with you and your story, could you give us a high level overview of who you are, why people should listen to you, what you

do, something for a few minutes. You know, my story is started from nothing, less than nothing. I mean, you know, and had no opportunity, no chance. I was in the Army, you know, I went in the Army because I had to because, you know, growing up in New York City is very tough. And the Army was my exit. out in New York and away from surrounded by a criminal atmosphere, which was really bad back in the 19, late 70s and 80s. And I went in the Army, you know, that got me out of New York. It got me in a, you know, an organized control atmosphere, gave me discipline, gave me organizational skills. It showed me, you know, the real, you know, how the world works, okay, working with people, getting things done, accomplishing your missions,

and it really helped me and saved my life, because if I didn't go in the Army, I guarantee I'd be dead. Maybe if I was lucky rotting away in some jail, because that was just the place I was born into. You're a product of your environment. I mean, it's very hard to fight your environment when you're surrounded by it.

I spent about five years in the Army, and then while I was in my last year of the Army, I started, I lived in a pond, building where pretty much everybody was in the military you know they lived there and you know off the base so I got an opportunity to help the manager out it was an old lady and I picked up garbage every single morning I'd get up just like we did in the army and police the area you know what that means police the area he's look for papers garbage whatever's not natural get rid of it so anyway I policed the whole building clean the place up

and I'd get $50 a month off my rent. My rent was $500 a month. I only had to pay $450. To me, believe it or not, $50 back in, we're talking, $1986, 87, it meant something. Okay, basically that's how I got, you got my start. I did a little real estate in leasing while I was in Germany. I was stationed in Germany, and there was not enough housing for all the soldiers. So the soldiers had to go out in what they called the economy,

where the Germans lived and secure a place to live for them or the families. And then the Army would pay you X amount of dollars towards a housing allowance. So what I did was I hooked up with a guy that I used to find a place off base. And I hooked up with the guy and then I would bring him soldiers that needed a place to rent. So he'd have the German apartments. I had the soldiers. and every time I brought him a soldier, back then I think he gave me like $150,

which was a lot of money back then, especially in Germany, the German mark was like four to one or something like that. So anyway, I've been a hustle of my whole life. Growing up in New York, you'd learn how to hustle. Because, I mean, that's all you can do. You know, and I did it at a very young age. So I was already into hustling.

I did some hustling in Germany. Then I got to the States, and like I said, I started picking up garbage around the building. And I started really understanding real estate. You know, it's not very difficult. And I try to explain that to people. Real estate is very simple.

All right, you're providing either a person, a place to live, a business to operate in, and they pay your rent. Okay. It's a very simple arrangement that you have. So basically, I liked it. You know, people will move out. I'd help them get departments ready. We get things fixed when they break. you're basically maintaining the property

and then they pay your rent and you're constantly got to keep the place full so you can get the most money coming in. One thing I learned about real estate, always focus on getting as much money coming in and there's little money going out. Okay, because it's all about the bottom line. And I try to just tell people and help people, listen,

everybody needs to be in real estate in some aspect of their life. Everybody. Okay, because it's a necessity. Everybody needs a place to live. Everybody needs a place to work. Okay. Real estate is part of life. Okay.

We all can't live in a tent like you used to before you make a gram, you know. And everybody should definitely try to establish something. You may not become a big shot. You may not have a half a billion dollars worth of real estate to worry about like I do. But it needs to play some sort of role in your life. And the more you put into it, the more you will make. But before we go into that, you probably can't go anywhere without hearing the term AI, and that's because it's probably the most important computer technology ever.

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When did you go from being like casually interested in real estate and it kind of just being like a hobby slash passion to, oh my gosh, I could end up having like half a billion dollars in real estate? Because there has to be a switch there. We're like, okay, this is something I can make money in versus this is something I am competitively extremely good at and I can actually build a fortune. What did it to me was when I met the owner of the building that was, you know, I was living and getting 50 bucks both off my rent. I met the owner. The owner was a great guy, smart guy, but he wasn't willing to work that hard. I mean, I'm sorry. He was a great guy.

We ended up becoming partners. The point was that I saw how he was living. He was living good. And I liked real estate because I just felt like it's something that I felt, you know, you like stuff or you don't really care for it. You know, my father always told me, just become a garbage man. Okay? You'll be outdoors all day.

You get good benefits. You get a pension. You know, and that was the extent of, you know, my father, you know, expectations for me were. That was his advice. Anyway, the point was,

I saw this guy driving Ferraris. I saw this guy drive Mercedes. I saw this guy living in fancy houses. I saw this guy traveling around the world. And what happened was, I started making him more money because I looked at real estate and thought of ways to make him more money.

And when you start and when you can find someone, like I tell people, when you're starting out, find somebody that's making money, all right? And be their support. Because if you start helping to make more money, you become irreplaceable. And I became irreplaceable to him. Okay?

Actually, the Army wanted me to reenlist for another four years and they were going to give me some bonus. and this and that. And I told him, hey, I got to go. I'm going to career. He said, no, no, no. You're not going to go anywhere. I'm going to pay you more than the Army.

And we're going to do stuff together. We're going to grow and you're going to be a multimillionaire. And a lot of that, of course, came true. You know, but I did a lot of it on my own besides what I did with him. Yeah. But how did he get a Ferrari and get the travel and all of that stuff if he wasn't a hard worker? Did he, like, inherit all of the real estate? Some people work hard.

Some people work smart. He was a smart worker. He knew a lot about banking. And I think he also, you know, his family, you know, gave him some money to work with. And let's face it, real estate is not brain science. Okay. I never went one day to high school. I mean, real estate is a very simple business.

Okay. It can get complex as you go down the road and you grow. But the basics of real estate is simple. Okay. And everything is based on. everything's based on what is what is the value of it all right and is there a demand for your supply everything in the world supply and demand i don't care what you want to sell in life or what you have for offer somebody a service it's all about supply and demand all right you want to have a

supply of what's in demand okay and in real estate you got to make sure you never buy something you don't want to have a supply what's not in demand like look at office-based right now. Office bait's getting crushed. Why? Because we've evolved or into technology. COVID taught us a lot about, you know, you could work remotely. Big companies are shrinking down what space they had or they're just totally giving it up. I mean, you know, the office sector, luckily I'm not in, is taking a major beating right now. Okay. So you want to always focus on supply and demand. Guys tell me all the time, oh, I can build a storage place and storage business is a great business but you don't want to buy it where people don't need it you'll be sitting around a bunch of

empty storage yeah you know what is your portfolio look like today today we're sitting on a very large portfolio of what i like to call necessity real estate or essential real estate i like retail but i like retail that the internet can't hurt amazon can't hurt i like you know food i like you know necessity services like hair nails food you know you know you know Good store restaurants, dentists, medical, things that people can't go online and accomplish. Okay, that's the type of retail I like. I try to stay away from the big retailers like department stores. I've had opportunities to buy shopping walls and I didn't do it because I was afraid of them.

But I like this stuff like, you know who's doing really well, believe it, who's waiting through all the storms, is the discount type of department stores. Okay, we own Ross. We own T.J. Max. We own Burlington's. We own those types. Because the discount stuff, it's not like you can't go online and really get a lot of discount. You can go online and buy whatever you want. But if you're looking for the discount and stuff, you got to go to the store and do it. Because you never know what they're getting in. And people like to try stuff on. So, you know, we stick to the necessity type retail. Yeah. We're also on the hotel business. Okay. Hotels are all based on location. We just sold a hotel in Fort Lauderdale.

I think we ended up selling for only $28 million. I thought it was going to be worth $35. But what happened? The hotel was a corporate hotel. It was literally in a corporate park, you know, with office buildings surrounding it. Those office buildings are empty now. Okay.

And you can't just imagine, you know, easily create business in a situation like that. You know, so I felt that, you know, the place still needed a lot more money put into it to accomplish what the franchise wanted us to do. There was probably still at least three to four million dollars that needed to be pumped into the place to bring it up to the franchise of standards.

It just didn't, and it was too far from my home. My kids were out there running it. I just said, you know what, we got to sell this asset. I don't see the light of the end of the tunnel. How much was it making? It was doing okay, but it wasn't doing what it could have done or should have done when I bought it.

When I bought it, the offices were full. Okay, and then COVID came and destroyed everything. So, you know, but there was other local investors that felt that they could do some marketing and they can improve the business there. And I wish them the best of luck. And I'm sure they'll be, you know, they'll be successful. I mean, they bought it at a good price. And it was a great hotel.

But, you know, you got to choose which assets you really want to put your heart, soul, and money into. Okay. And when you think this hotel is not going to take you to the end of the pot of gold at the end, that quickly at least. you got to move on and find a deal at will. So we kind of got out of Fort Lauderdale. Now we're still sitting with about a half a dozen hotels in my area

where I'm close to and I can, you know, we also have Ben's Hotels.com. If you're coming to the Tampa Bay Area, we have a place for you to stay, okay, on all different types of levels. Ben's hotels, so it's all the hotels you own. If you go to Benzhotels.com, it'll show you every hotel I have. It'll show you the ones by the Tampa Airport. It'll show you the ones that are along the Gulf of Mexico by the beach. It'll show you the ones in the high traffic tourist areas.

Whatever our portfolio hotels is, there are Ben's Hotels.com. And I try to always buy in the affordable, you know, I try to have affordable hotels. Okay, I'm not doing four or five-star hotels, all right, because it's just not our forte. Yeah. Okay. And it's great for the people that are doing it. But we like to, we're across the street in the beach. So you go where I live, you've been in my town, you can go on the sand, and you can spend

$500 a night for a room. Or you could go across the street, right across the street, and stay in my hotel for less than half, maybe only 200. You know, we give people an affordable product, you know, so there's a need for all different types of, you know, clients. And we try to fill the need of the people that, you know, looking for a break. You know, they don't have that kind of. big money to go out and spend on a vacation, especially a family, you know.

Yeah. So that's our little thing. What are you finding with Airbnb? There's a lot of controversy with Airbnb, whether that be taking off the market, driving up the housing, but you're competing almost with hotels. So you're a competitor to Airbnb. What are your thoughts on that? There's a certain market of people that like Airbnb's.

Unfortunately, I do a lot of consulting, and a lot of people have been calling me lately, unfortunately saying, hey, they bought Airbnb's, and their rights to rent them were taken away by the local municipalities. I mean, they're ruined. They overpaid for the property. It's not worth to say. So they're buying these properties.

I thought a lot of the Airbnbs are just sub-leasing. They lease from the landlord and then put it on Airbnb and profit the difference. But to buy an Airbnb is stupid. A lot of people bought them. A lot of people who have condos, a lot of people in houses. And now, listen, you're running an Airbnb,

you're running a little mini hotel you know and it all depends you know are you running it is there a host running it you know there's still a lot of work to be done the money you're making our Airbnb are earning if you're the one renting them out and coordinating with the guests and getting the cleaning done and getting the repairs done you know if it's not there's a cost to paying somebody listen everything can work if you buy something right you got to buy it the right price you buy things at the right price and you should always be successful so you know but Airbnb I think it had its big boom. It's still going to always be around.

And it took a lot of money out of the hotel business. That's a fact. Okay. But I think it's gone down. And you've got to be very careful in investing in them. So what do you tell people if they bought a property for Airbnb? They're losing a ton of money. They can't rent it out anymore.

And they can't cash flow it by renting it on a normal lease. What do you tell them? What's your advice? I mean, everybody's got a different situation. The first thing I would say, listen, can you get out of it at a break-even? can you sell that property? Maybe there's been some appreciation in that particular housing market in that area.

What's the property worth if you put it on the market tomorrow? How much did you pay for it? Okay. And if you are going to take a loss, what is that loss compared to the loss you're going to have sitting on it for another year and not making any money? You know, you've got to look at every factor of the whole equation

and then maybe you have some gains somewhere else where you can offset some losses. Listen, I just sold a whole bunch of stock and I was very unhappy about it because it's the end of the year. And my accountant said, listen, in 2023, even though things were bad, you made some money. Okay, you sold some properties. You got some major gains here. You need to take some losses.

So I had to sit down and I just said, okay, well, the only place I can get any losses at is sell off some of the stock that's been beaten down 20 and 30 percent. I could always buy it back after 31 days, you know that. You know that you could sell something. Like, let's say I sold a, you. whatever, mutual fund the other day. I sold it, I think it was about 20% down, which I think is a great time to buy now,

but I'm already in it. I sold it, I took the loss, so now I get all the loss I had. All right, let's say it was a million bucks. If I saw, if it was a million dollars when I bought it and I got a $200,000 loss on it now, I could sell it. I take the $200,000 loss to offset $200,000 worth of gains.

And then if I really think it's, It's going to come back and I can buy it back 31 days later. And here I am in the same boat with the $200,000 loss that I took. And $200,000 on a capital gained is pretty much $40,000 in taxes that I would have to pay to government. I mean, these are the things you've got to think about. Everybody's got their own investments, their own situation. You've got to do it's logical. Everything's based on logic in my brain.

But before we go into that, guys, these cameras, they were like, like $4,000 a piece. The lenses were like $2,000. These cables, the audio recording devices, the microphones, everything adds up. And this whole setup is incredibly expensive, and it makes my pockets and my brain hurt so badly. But the thing is, you don't have to start like that.

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wealthy people avoid paying taxes is like in stocks they just continually invest in that and then you can borrow against the stock portfolio so then you just end up paying whatever interest fees that you borrow you bargain is anything you bargain any asset you have that has some sort of value to it i mean typically what i did what created my wealth was pretty much based on the 1031 you know deferred tax exchange that the IRS laws have. Okay. Every time I had a property, I improved it, and I went and I increased the value in it,

I would refinance it. I would either refinance it because that's a non-taxable event, okay, pull my money out of it and still cash flow. The ultimate goal, to me, it's always been in real estate, is you buy something, you improve it, okay, now it's worth more money,

then you get, your money back. So now I have nothing invested in property, but I still cash flow. What kind of return is that? Infinite. So now here I am. I'm sitting with all these properties that I refinanced. I got all my money back so I can deploy it in other deals or whatever, spend it. And I'm still cash flowing. And that's great. I own businesses, real estate, without any money invested. Or if you sell it, because you have to look at it, is it the right thing to do? And once you're refinance and you pull your money out, all right, you're sitting here with this property, and it's giving me a good cash flow. But everything is timing. When the market goes up,

there might be even more value in it. And then again, also, when you refinance the property, the most you're going to get is 80% of the value. There's still 20% of the value is still sitting there. So now I might decide, all right, I want to raise cash. I want to do some bigger deals. I might sell it. But if I sell it, I've always 1031 into the next deal. For over 30 years, I've been doing that. I never touched the money from a sale. The money gets reinvested into the next deal. And that kind of forced me to grow.

But then don't you have some like crazy tax burdens of like, let's say, 30 years? Or something like that where down the line it could get sold. What happens is your basis gets decreased every time. The taxes you defer are counted against your basis. See, yes. If I sell that posy, you were talking about $20-something million tomorrow, my basis is probably only about eight. So then if I don't 1031, I will have to recapture $12 million worth of gain,

which would be $5 million. $2.5 million tax bill. And at my age, I might be prepared to do that. Luckily, I haven't done it yet. I haven't paid that tax bill because luckily I have sons that work with me. So I keep exchanging with their help into other deals. Now, of course, it's like the mafia. You don't get out to you die.

When you die, your wife gets stepped up bases. There are some trust that I believe that also can get that benefit, but I'm working on looking into that right now. But the limit to that isn't that like $24 million? On the step up and basis through inheritance? Yeah. Yeah, I don't think it's anywhere close to half a billion. Or is it different if you give a property to your wife at Pan?

Does everything get stepped up or is it up to the 25 limit? I believe your wife and only your wife can inherit everything you have with stepped up basis. But we need to verify that. If that's the case, everyone should make sure they marry younger. Everyone and then you just don't pay that. That's genius. I mean, I'm working on it gets complicated. When you're starting to plan your death, it gets very complicated.

You need really good advice from really good trust attorneys. I feel like that wouldn't be the case because then if you want to give a property to someone else, You just marry that person before dying. Yeah, give it to them and have a trust. Have everything stepped up and then they could sell without paying tax and then distribute the money. That seems like too easy. They can only distribute the money to a point too. I think right now you can you're allowed to, I believe it's still like 11.

something million that you can gift. Yes. Lifetime gift is 11.000 something million. Okay, so me and my wife can gift together right now, 24 million if we wanted to. but you know like I said I'm not an expert in trust and things like that I'm actually looking for people to consult with on that but I mean

let me tell you the worst case in the world is this all right if I look at my whole portfolio if I got a half a billion bucks in real estate let's say owe to bank half of that I owe them 250 million and let's say the rest of the other 250 million I got to give basically 20% of that

that's 50 million I'm still up for $2,000. 200 million. I think I'll be doing okay. Why don't you just do that and just spend the rest of your life just chilling? I'm definitely thinking about that now, you know, but then I'm also having to consider, you know, what's best for not only me, but what's best for all the kids I got and the people that are important in my life. Yeah, but 200 goes a long way. 200 million right now will get you, if you're sticking in tax-free muni bonds, it's going to get you roughly about 10 plus million a year. Tax-free. Tax-free, that's really almost like, you know, my bracket, 37%, you know.

We're talking about if you in California is almost double, you know, so I mean, you know, everybody's got their own life and you have to plan. You have to plan your life and you have to make, you know, certain moves that are logical and make the most sense for your life. So right now, I'm trying to figure it out. That's why I'm here today. Jack's going to tell me exactly what to do. Is that, and then I'm going to do the opposite. Is, is, is, is that, is, is, where you're at like about $500 million in assets $250 million in liabilities I believe so it's right about there yeah but then last time we had you on the podcast we discussed that you did a lot of deals with variable rates when rates really low because like you said this is your words not mine

that you're being a little bit greedy trying to get like the best possible discounted rate so to save a little bit of money but it ended up when rates went up you had that float rate or variable rate and you basically when I used to owe about a couple hundred million I could have paid an extra point and fixed my rate. That extra point would cost me $2 million a year. Right? Oh, okay. Yeah.

Instead, now I'm paying an extra three points, at least. So now I'm paying an extra $6 million a year when I could have got away with paying $2 million back then. Now, how long did I get away without paying that $2 million? Probably a couple of years. So I don't know. I don't have to look at it a few years. I mean, listen, no one in their right mind in the 30 years I've been in real estate would ever dream that rates would go up so high, so quick,

never as ever been seen before. Okay, but right now we're sitting back what rates were at in 2007, I believe, right before the crash. And what does that mean? We may not have a major crash, but we're definitely going to have a major correction. And there's going to be opportunity. All right, yes, I'm well-partum. tech to capitalized where I can handle, you know, the stress that we're paying out all this

extra money and interest payments. Luckily, we're strong capitalized and we can handle it. Plus, we're doing all kinds of different things to adjust. But a lot of people can't. And a lot of the people that can't, a lot of the people that pooled together because nobody wants to make capital calls. Nobody wants to come out of their pocket to start buying down debt and throwing more money into a deal.

that's why it gets tricky when you're involved in a group. So, you know, there's going to be some very, very bad things, I believe, happening with bankruptcies, with foreclosures, in the next year coming in a matter of a couple of months. I think we're going to start hearing about it. I don't think the banks really want you to know right now all the loans that aren't performing. I thought a lot of these loans have escalation clauses, essentially, so it can't just go from 3% to 8. it'll go from three to let's say four and a half. And then after that, it'll go five and a half, but over a long period of time.

It depends on the loan documents. But typically, in my experience, we're not talking residential. The guy goes out, he fixed his rate at two or three percent for his house. He's great. He's good. He's golden for 30 years, 20 years, whatever his loan is. But in the commercial world, commercial loans don't go out that far. You can do some government stuff and some agency loans that may go out.

10, 15 years. Typically, people in the most people in a commercial business, banks loan money on commercial assets for 3, 5, 7, and 10. Okay. So the guy who went out three years ago and got a loan, basically an adjustable loan like I did, it was doing great. Even if he fixed his rate, three years are up, he's open to the current market. Okay, he's subjected to current market. And when he goes out to have that property appraised now because of today's interest rate, he's not going to appraise for the same value, okay?

Because the numbers aren't going to make sense with the interest rate being double and triple. So the value of the properties have come down. Listen, we were just talking about it. You used to have to pay four, used to get a four cap on a Starbucks. Okay, I'm seeing it for six, six and a half now. Okay. Everything adjust accordingly. Cap rates are going up.

It's just, it's logical, you know. if you only collect an X amount of dollars a month, you can only, you know, and you got to pay the bank X amount of dollars, you're only left with this much return. So the property's only value based on a return. So who's buying right now? 1031 buyers. Unless, you know, I only see, the only deals I really see going on right now

is people that sold their properties took the gain, you know, because they had a lot of equity in their property and a lot of upside, and they want to get out or they want to, you know, trade out. I mean, let's face it. you know, real estate's not forever, you know. I mean, yeah, it can be generational, you know, but typically people buy properties, they own them for a while and eventually they sell them.

I mean, you know, so sooner or later, somebody's going to want to sell and you're going to want to get their hands in the cash, you don't want to retire. A lot of people pass away. It's part of life. You know, a lot of partnerships dissolve. A lot of them have a specific amount of time

that the partnership has to sell. You know, so there's always going to be deals to be made always and the deals are coming so I'm telling everybody to stash your cash for because when the deal start coming you want to be up there in line first in line with your money ready to go line up your financing and listen interest rates are double so what does that mean to really make the numbers work you're going to have to put up more money you got to borrow less money for the bank if I go out right now and buy down half my debt if I go to the bank tomorrow and say okay here's a hundred million bucks and buying down all these properties by half my cash flow will go back to what it used to be

because I'm only barring you know half the money at a double rate but then again I got to come up with that cash which is probably sitting earning 5% right now so you know like I said everybody's got their own portfolio you got to sit down and you got to look at every single scenario there is and figure out what makes the most sense because if it makes sense it makes money. presents Jeff versus Taco Truck Salsa Whether it's Verde Roja or the

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habanier, yes. Save the everyday with Amazon. Unities across Canada. hourly Amazon employees earn an average of over $24.50 an hour. Employees also have the opportunity to grow their skills and their paycheck by enrolling in free skills training programs for in-demand fields like software development and information technology. Learn more at aboutamazon.ca. But when is this going to happen? Because I honestly thought this was going to happen way sooner.

And we're not seeing anything. At least here in Vegas, cap rates are going up. so property values are coming down slightly, but it's barely anything, and it's to the point where I'm questioning myself thinking, am I wrong? Is this ever going to happen? It's going to happen.

It has to happen. It's logic that has to happen. The problem is that the sellers, including myself, don't want to swallow the fact that their property is not worth what they thought it was. And it's simple math. The lows that I own, you know, lozes, right? It's like a Home Depot.

I don't Home Depot, too. Those properties, I can't get what I paid for them. Because I bought a matter of a little cap rate. It's just not going to happen. Now, am I willing to take a loss? No, I'm not willing to take a loss. So everybody's like in a limbo right now. Everybody that owns commercial property is,

you got to wait for the bleeding to start. And it takes a little while for the bleeding to start. Okay. But once it starts bleeding, That's when it starts gushing. Let's just say what happens in a scenario where you think there's going to be blood in the streets, but let's just assume by June of 2024, the Fed says we're lowering interest rates. We're taking them down, you know, 50 basis points, 75 basis points, whatever it is.

Interest rates start coming down. Then by 2025, all of a sudden we're at three and a half percent. Isn't that going to save the markets? Maybe there's a chance that nothing much is going to happen. only the really distressed sellers are going to sell, but they're going to be outliers. You know, none of us have a crystal ball. But from my experience, real estate's always been a cycle.

Okay, it's always been a cycle. And you just have to know when the time is right, because you'll see it, okay, if you go on 10x right now, a year ago there was nothing on 10X, nothing, barely nothing. Crap, now you're starting to see serious assets It's all over the country. 10x is booming with auctions.

Hotels, they're dying. Why? Because people don't have the money anymore to spend. Okay, hotels are getting crushed right now. If you're not in a hot spot where you can keep those rooms filled, I can buy hotels really cheap right now. But there's a reason why,

because they're not bringing in the money. And the cost of employment has gone up. And, you know, so, you know, you're going to start seeing some blood. I believe, and I'm not, you know, I'm not out of a crystal ball. I think we got to wait to see this year end. I think when 24 comes,

and then we also got a lot, politics have a lot to do with it. Okay, I think with the current administration, we're just really not going in the right direction. And we're not going to go in the right direction and get lower interest rates until we see a change in government. What do you think the current president is doing about a lot of this that's bad for the real estate market?

I'm not an economic expert, but all I can say, say is before he was president, I think the economy and the world was in a lot better place. I mean, I'm just telling you from my life experience, interest rates were low, there was some sort of peace in the world, I think we're in a lot better shape. Okay.

And that's basically my life experience. I think that the Democrats just don't understand, or they don't like taking any, They're trying to, they're not risk takers. Okay. And I don't know the level of risk we were approaching when we had low interest rates. I'm sure there's some sort of story behind it that it could hurt us down the road. But basically all I could tell is I was living good and now I'm five million bucks a year and all.

Now, how much of that, though, is Trump lowered taxes, gave businesses a whole bunch of deductions. And he really pressured the Fed to lower interest rates. So how much of the economy was really just, there's more money flowing into the economy, business owners were making a lot more money, and taxes were lower. So do you think maybe that's more like a short-term sort of deal where if we lower taxes 10% now, I think we'd have a similar benefit? I don't know how we were getting hurt. Were you raising the deficit?

Is that the problem? Is that what, you know, all the good times we're bringing, we're raising the deficit? I mean, I heard on the news the other day that we only close. collect, I think, $2 trillion a year in taxes. But it takes how much to run the country? I think it was $5 or $6. No, I think it was like $5 or $6, but they collect four. I think there was a $2 to $3 trillion a year deficit.

And that's just being added to the national debt. With rates as high as they are now, I think now the national debt is costing more than defense. So now I think it's a game of chicken of how long could that continue before? Eventually, they got to lower rates or they got to come out of pocket a ton. of money well I know one thing it's a known fact that mortgages that are an all-time low right people aren't buying homes right now and I think that's that that's like the foundation of people's lives being able to work and and buy a home for your family and have some quality

of life I think is very very important and it's almost really much impossible for an average middle class person now to go out and buy a property to live in so you know i don't know i don't think it's good and then the banks aren't making any money let's face it the banks aren't making any money right now the banks are paying you five and a half percent in a money market account right they got to pay out a lot of money and then nobody's getting loans at seven so the bank is just sitting there basically it's going to hurt the banks if they don't lower the interest rates and people don't stop borrowing money we saw what happened in silicon valley not too long ago okay it's going to get ugly i think that you know i kind of tracked the foreclosures and uh i also track uh non-performing loans and um it's growing it's growing

dramatically right now and the banks don't want nobody to know because if word gets out they're not collecting on the loans they had, then the bank's not, the bank's only worth what the loans are. The bank's value is the amount of loans that they have. That's their assets. And if they're not making money on those assets, those assets fall

down in value. So the bank ain't worth as much as the bank used to be worth and the stock goes down. And then we saw what happened in Silicon Valley. They went belly up. We saw a lot of banks go, I don't know, you're too young to remember. But imagine how many banks went belly up

the crash. What about don't only banks? Look at all the, look what happened to all the big stockbrokers that went belly up. Lehman Brothers. They were around for a hundred years. And, you know, and they were upside down. Mainly it's because of leverage. So if you think it's going to get worse, why not preemptively start selling more aggressively now? I have to determine if it makes sense to take the losses. I have to start looking at my gains and looking at what the benefit is to take losses. Or, or, you know, Or is it more beneficial to me to just buy down my debt? You know, it's an equation.

Everything's an equation. You said that you're going to do this huge internal audit with this like, quote unquote, really smart guy that's in New York right now, analyzing all of your holdings, seeing which ones are going to be good, which ones aren't going to be good. Are you literally just doing exactly what you just mentioned to Graham, where it's like you are assessing how much it costs on a month-a-month basis, how much are you making on a month-month-bathes?

And then what is the opportunity cost of holding it versus selling it? And you're doing that with every single property. You have? Every single one. How many are there? 25. Okay. They're all different levels.

You know, we have some deals as small as, you know, maybe a couple of million. We have deals that, you know, maybe it's worth 40 million. You know, it depends on the asset. And then, you know, certain assets, like the hotels are tricky. Because with the hotel income, you have to look at hotels annually. Because hotel income is like a roller coaster. You got your seasons. So now, here we are.

We're right now in a slow season. Right before the holidays, there's always the slowest season in Florida. We probably have hotels that are barely breaking even. But when the good times come, they're going to make a lot of money. So you have to look at it on an annual basis. Some properties I could just strictly look at on a monthly basis.

Like if it's a triple net, triple nets are easy to look at. You get the same money coming in. you have very little of anything coming out because it's triple net or if it's a double net you have very little going out those are pretty simple to determine you know but you know everybody's got their own situation so for the average listener right now it's 18 35 year 18 to 35 year old man uh let's just say they're working like a standard w2 job what would your piece of advice be for them if they're just trying to save up and buy a house right now you need to number of

one, get yourself on a budget. Okay, now is the time to be smart and not waste any money. If you don't need it, don't buy it, don't use it, and save your money. Now is the time to stash your cash because that's going to get you some strength. You also, you know, if you're, I mean, I always promote young people that don't have a lot of money. If it fits their life, they should seriously think about getting their real estate license. Because if you get your real estate license, even if you don't use it, okay, or maybe you use it once in a while.

I mean, real estate's great. You know, you can have a real estate license. You have a real estate license. Not anymore. Well, they took it away. I gave it away. Yeah. Gave it up in California.

I mean, but when you were young, you had a real estate license. Yeah. If you wanted to buy a property for yourself, you automatically, and you're representing yourself, 3% is your commission. Well, now there's that big class action lawsuit, though. You see that? Yeah. It won.

I know a bit of a side tangent here, but a group of people got together and said that it was price fixing. Price fixing. Why can't I say it? Price fixing. The National Association of Realtors. That the seller was now obligated to pay a fixed commission to a buyer's agent to be able to list on the MLS. And they won. And it was a billion, multi-billion dollar lawsuit. suit. I don't understand. I mean, you have a listing agreement. You agree to pay X amount of percent when you list your property. And of course, it can be negotiated by the time you do the deal. But if the agent sells a property for less money, it gets less commission. If you sell some more

money, it gets more commission. I mean, I don't understand where the conflict is. The seller has to pay the buyer's commission. And for the, for agents to remain competitive and and show the house. They're looking at the commission, and they're saying, well, this property pays me 3%. And this property over here, they're paying 1%.

I'm not going to show that property. I'm going to show the 3%. That's what going on forever. There are agents out there that they'll go after the ones that are selling it. They won't take a discount commission, except these days, the agents are starving, starving.

I got brokers that are willing to just throw in the whole commission practically, except a small fee just to get to, deal done. Okay. Typically, he used to pay a broker and commercial, maybe two or three percent. I've closed deals recently for a quarter of a point. I have half a point. What price point, 10 million? Yeah. So he's happy to get something to come into his team just to keep the money flowing. Plus, he knew if he didn't reduce his commission, I couldn't do the deal. When I do a deal, the first thing I tell the agent, when we get somebody that makes us an offer, I want to see my net sheet.

always ask you don't be afraid to tell the Asians show me my net show me the purchase the sales price show me the commissions show me the closing costs the title insurance the doc stamps show me what my net's gonna be okay and then if you can't get to the number you want that's where you start negotiating you start saying well I'll tell you what in order for me to do this deal and this is what I do on a daily basis in order for me to do this deal you go back to this to the buyer and you say listen You need to pick up the docs transfer tax. They call them doc stamps, transfer tax,

or you need to pick up the title costs, or maybe we'll split it, or you need to, you know, lower your commission down. But I tell them right off the bat, this is the net number I have to get to. Now, it's your job as an agent to figure out how to get me to that net. Otherwise, I'm not a seller.

So people are working a lot harder now because something's better than nothing, you know? Yeah. But I understand the whole lawsuit you're talking about, but typically, you know, it pays to be a real estate agent if you're starting out because you still can get a commission as the buyer. Okay, typically houses are listed with a 5% to 6% commission. The buyer gets half, the seller gets half.

So if you qualify for an FHA mortgage, it's 3.5% down. If you're a real estate agent and you're 3% commission, you're like to put a half percent down, am I right? Yeah. There you go. That's how you get in the door. without putting a lot of money down. We were talking before about mortality

and how you said, like, you know, once you eclipse, you know, when you're nearing 60 years older, when you eclipse it. It's natural. How you just naturally start thinking about things. I want to know, maybe, why continue pushing for wealth? Why continue pushing for all of these things when there are other things in life maybe that you could be missing out on, such as physical health?

Which you said you have been losing weight, you know, and going out and traveling, and experiencing life in other ways rather than just continually building a business that's already extremely successful. Why keep pushing? I mean, you know, because you got to keep moving on a different chapter in the book of life.

You know, right now I've got to determine, listen, I don't, I'm not, I'm not the type person that wants to work, you know, until the day I drop dead. It's not me. I want to see what it's like to retire or maybe enjoy my life. I got a nice big boat sitting in the water waiting for me.

You know, but I also have to think about and protect. Listen, I wouldn't be here today with all this wealth if it wasn't for all my kids and people that have helped me. Okay, so I have to come up with a plan that's going to enable me to live out the rest of my life comfortably and also protect the people that help me get where I'm out today, mainly my children, and make sure they have enough wealth to they can keep growing if they choose or be protected. You got to protect the people that took care of you. That's a fact of life. But that is a lot of protection. I think for a lot of people, even giving a million dollars to their kids would be like, hey, they're set.

You know? Most of my kids are already multimillionaires, but, you know, they're hungry and they're, you know, I mean, I look at, I think back, you know, my oldest son is 38, I believe. He's 20 years, or 39. He's like 19 years younger than me. I think back, and I remember when I was his age, you know, I pretty much had what he has now. Okay. And he has an extreme hunger and desire to go to the level that I'm at.

And he has every right to him. Okay. And so does all my kids. You know, they all have the right. They've earned the right to grow their wealth in their life as much as they want, just like I did. They learned for me. So, you know, I have to just make sure that they're set up to be able to do that.

And if they have a problem, call me. I'll be on my boat. So what's your plan with that? To be able to set them up in positions where they can take their advantages that they have and pursue the lives that they want, how will you adjust your own life to be able to set them up for that? I mean, the ideal situation for me, I think, is take the best assets I got, which they are partners in some assets. Take the best assets I got that are really long-term assets.

assets that you should probably think about keeping for the long term and incorporating them as partners. So if I'm gone, nothing changes. Basically, they're partners, and that's the end of that. They keep getting the same income they've been getting, and then my share will be distributed accordingly, you know, between wives and my wife. It's just something you're telling us about.

She's in the viewing room, right? Only one wife, believe me. Okay, yeah. And, you know, it'll all work out. I'm seeking out the best legal advice I can get and trying to get the plan going because, you know, I am afraid I'm getting older now and I need to have a plan in place. If I could walk out this door right now and drop dinner on your doorstep, you've got insurance? I do.

We renewed our policy. We have what they call a master policy that covers all our properties. Insurance is doubled in Florida. You know, they're making us pay for the hurricanes. You know what's crazy. So you know it's crazy. You know what's crazy is that I was shopping around for insurances lately because I really want to consolidate everything. Right now I have like five different policies with different carriers.

It was a nightmare to coordinate. So I'm bundling everything together. And three insurance companies said they would no longer insure California properties. They're done. They say, nope, we hit our quota. We're not thinking on anymore. And these are companies that like four years ago, no problem. They're not insuring California.

They basically said you have to stick with what you have because you're not getting anything else. And I called then my existing insurance carrier and say, no, you're grandfathered in, but we're not taking on any new policies. Why do they know it on California? They say it's unprofitable and it's too expensive to insure. They're losing money on California property. How are they losing money on California property damage, crime, houses are costing so much money to rebuild, construction costs are through the roof, permitting, zoning. It's the most of the world. Yes.

There's so much risk for insurance companies. specifically California. Florida, I believe, is just a lot of natural disasters. California is just like political reasons, zoning. There's so much trouble with that. They want a policy. It's wild. And lawsuits are getting ridiculous now. It's crazy. How do you think we can reform that? Or do you think it won't? The problem is, is that the insurance companies settle too quick. You know, legal fees go through the roof. It's a mess, you know. And a lot of it is, fraud has a lot to do with it, you know, but the courts are just too generous, you know.

I mean, listen, if somebody has a legitimate claim, I believe they should be paid, okay? But it's gone nuts. It's gone totally crazy now. I think we just settled a claim for a slip and fall for half a million dollars. And I honestly, because the concrete, when I bought it, was already painted in a walkway area,

and we didn't know, there was nothing wrong with that. And somebody was raining in a person slipping to fall. and they got a half a million dollars the insurance company just didn't want to fight it and it wasn't even how much damage to the person I mean it's just totally crazy where the legal system's gone from their perspective it's pay half a million now limit the loss

or spend half a million fighting the thing over years and then let's just say they win and you're right then it's can I collect half a million dollars from the person who slipped and fell no so what am I going to do just pay it now versus spend years of this insurance companies make more money to anybody I mean, all the hurricanes that we had, the damage we had in Florida,

yeah, they're paying down on a lot of that. So what do they do? You just went and doubled all our rates. So now they're going to recapture all the money that they spent in the hurricane. Insurance is a good business. You should think we're going on an insurance business. I mean, it's tough. Right now, it's very hard to be in real estate.

With the cost of insurance and the rates being where they're at, it's not a good time to just say, I want to be in real estate. You've got to find a deal. and when you find that deal, you got a low ball of shit out of it. I mean, now's the time to look, all right? Do your homework. Look for a deal, but low ball it, okay? Because times are not good in real estate.

That's just a fact. It's a fact. And rents are staying steady right now, but they're way expensive. Rents are way out of whack right now. But because nobody's buying homes, that creates a lot more. renters and keeps a lot more renters in the market. So multifamily is staying strong,

except if you're an adjustable rate. But as far as your income goes, multifamily is very strong because people aren't buying houses. Listen, I have no, Cristobo, like I said, I cannot understand why the home builders, that's when you know, it should hit the fan. Keep watching the news. We keep watching the home builder stocks. I can, can't imagine how these guys, because all these homes that they go on and they develop a thousand unit, you know, development. They're doing that down the street. Okay. When they started, they started years ago with the planning on that. Their budget, everything was years ago when times were great. Now, the same person, they thought, how much in the house is going for down here,

the new developments? In the new one that they're building, I think they start at one seven. One seven. And that's, yeah. One seven. Now, if somebody goes out, Let's say they do have the 20% down because that's like a jumbo loan, right? Yeah. All right. So $1.7 is $340,000 down. These people still got to borrow about $1,0.4. When they first plan on selling these homes to people, you know,

when they got to carry a loan for $1,000, $3. Okay? What's that about $40,000 a year? Now it's double that. People don't qualify. They don't qualify. They're not going to be able to sell the homes. Well, here's what I'm finding.

In terms of the rental market for housing, it seems like a lot of sellers who don't want to sell because they locked in that 3% mortgage, they're putting their home up on the market for rent. And because their cost is so low and because they've got a such a low basis, they don't need to rent it for that much. So I'm finding rents at least here in Vegas are really coming down. Same with Los Angeles. A lot of rents.

The only protection is either keep the house and wait for better times to come and rent it out, pay my mortgage, pay my taxes, pay my insurance. That's how a lot of people got through 2008. All the successful people I saw said, I'm not going to sell in this down market. I'm just going to rent it out or ride this out. And those people came out so far ahead. They didn't have to sell.

They didn't sell. Who's buying your properties now? Is it true that Black Rock is going through these big institutional investors are buying up all the houses? What's your experience on that? I believe it's the opposite. From what I'm seeing is all the big shots, like Black Rock to put up all those homes,

they're now selling them. They're getting out because they don't can't. cash flow. I mean, to my knowledge, all the big shots are selling right now. I just tied up two deals. Well, hopefully tomorrow, I'll be on a conference call and I'll get the deal finalized. I just bought two apartment buildings from a very, very large company, you know, and I believe I'm buying them really right. I'm buying them for probably, I believe 30% of less than what they would have received six months or a year ago. So how much he paying for them?

I can't tell you to still people out there. I didn't sign a contract yet, but I believe I'm buying it for 30% less than what the market would have paid. The reason why I'm getting them in a discount because there is no market for what I'm buying. And I always had the advantage. I can compete with Wall Street.

When I say Wall Street, I mean the Reets and the big shot Black Stones and Black Rocks and all these big shots. I can compete with them because of terms. I don't have anybody to answer to. I can come in with the strongest terms you ever seen. I can sign a contract and say, okay, give me three days for due diligence where everybody else has boards to answer to

and all these layers of approval they have to go through and all this. I got the money, okay? And I can tell my son's, listen, go out there and inspect that property. They'll walk every single apartment. They'll go through every income and expense item. and in three days we can knock it out, and I can go hard with a million bucks. That's the edge I have by being, you know, no one to answer to and having my own company.

So I'm starting to see the deals coming. Trust me. All the deals, there was all these beautiful complexes around my neighborhood in Tampa Bay Area that were up for sale. All right. And they were all, you know, they're like 180 a door, 200 a unit. The rents are only like 1,600 a month, 1,700 a month. The numbers didn't make sense.

none of them sold none of them there was like 10 of them all these big fancy complexes with 10 to 200 200 units in them they're not getting they couldn't sell now the seller's got to go back and rethink well we missed the market just like I missed the market on that house now what do we do do we keep the property or do we discounted lower the pricing get the hell out you know it depends it depends on the ownership structure of the property are their partners is their debt come and do soon uh you know loans come due, the loan payments come due. You know, it all depends on what kind of loan you have. But now with the new insurances rates going through the roof,

people are taking loss. They're bailing. And then, you know, also the taxes are actually, what I'm finding, I'm learning more about taxes, property taxes, is like right now, the new tax bills came out, right? They call trim notices. They come out and they tell you what your taxes are probably going to be, and they're due in January.

You do get a discount if you pay them in November or December, you know, and then January, and then you get charged late fees if you pay them in February or March. They own under due by March. They go up in January or March. Anyway, long story short, the counties are basing the values on last year. That's dangerous. Last year, because you pay taxes in the rears, okay? When I pay my tax bill, my tax bills are millions of dollars.

okay when I pay my tax bill that I get a discount paying in fact this month I have to the end of the month but those tax bills have all been jacked up based on what they their praise value they did back in January so now here I am I'm not making that kind of property isn't worth that but my tax bills are going up a lot so I got taxes against me I got insurance against me I got high interest rates against me it's all the pieces that fall into the puzzle of disaster Do you like, it seems like you kind of like the stress about it, though. There's an aspect where you see it as a bit of a challenge because that for me would screw with me and I just be done with it.

But, you know, I don't know if like, all I know is I can't sit back and cry about it. And I have to think about what can I do that's logical that makes sense to improve the position I'm in now or deal with the stuff that's happening to me. You know, wherever there's a problem, you have to come up with a solution in life. I don't care what it is. you know whether it's uh any problem you got in life you gotta come up in a solution it's just like you know if you can't get along with somebody you know what the solution is get the hell away from him simple i've been trying is right here you won't go away

change a lot change your number i like i like that theme that's a theme that we've been seeing like over and over again i feel like on the podcast which is like it doesn't matter whose fault it is but it's only your responsibility to improve the situation that you're in it's it's it You know, it's like all these countries aren't getting along. Leave each other alone. You stay in your space and stay in my space, then fine, you can't get along and just leave us alone. I do it all the time with people.

You know, if I can't get along with somebody or I feel like they're detrimental to my life, I just don't deal with them. How often does that happen? Do you cut somebody off? I cut people off whenever it's necessary. And it could be family members. It could be anybody.

Life is too short to have any kind of, what we call in the hood is drama. saved a drama but yeah mama she's the only one that's going to put up with it but what sort of thing would make you cut someone off like that I mean if they're doing something that's going to hurt me or anybody in my

world you know I got to leave you alone listen you know honestly I don't even have any hard feelings but I've noticed in my life my life stays peaceful because I don't associate or deal with anybody who disturbs

the peace okay That's the way I live. But how do you set the emotions and the ego aside and base all of your decision making strictly off of what is practical and logical? How do you do that? Because a lot of people are ran by their emotions, right? And like by other people saying, no, you should stick with this person.

You should keep this person in your life. This is what society is saying. I give people chances, you know, people screw up. I've screwed up. Okay, we all screw up. All right. But then you have to look at the severity of the screw up. I mean, if somebody keeps screwing up, you know, listen,

I got no time to go backwards. I got to move up. Okay, this elevator only goes up. I'm not going down. So you got to, you know, you got to stay away from negative people in your life. You got to stay away from people that don't have the same interest and desires that you have, you know, and, you know, listen,

I don't care how rich somebody is. I'm very, very, my closest friends in the world don't have nowhere near the money I got. Okay, it doesn't matter. Money, when it comes to interacting with other humans, You either get along with somebody and you live in peace together or you don't. And if you come across people who are negative or, you know, could cause you issues because, you know, association, you get a lot of trouble just by being associated with the wrong people.

You know, I mean, it's a fact. You want to keep, you got to look at your whole world and keep all the bad stuff out of your world. Focus on the positive and focus on getting ahead. Focus on your family, you know. You think you learned some of that with your experiences in the mob? which was what you alluded to earlier. I wasn't really into mom. They fired me, you know, that today did me a favor, you know.

They fired you? I was young, and they wanted me to go out and do collections. Oh, right. The whole story about it, they wanted me to collect from a guy who was a dead beat, and then they wanted me to hurt the guy. I'm not a violent person. I mean, yeah, I'll defend myself, but, you know, I can't just go out there and, you know,

and be that type of person to hurt people, you know, because they, you know, they borrowed his money, and then you didn't pay him, well, I was hurting him gonna help. He sure in hell I could be able to pay you hurt him. But is that, I feel like, is that sending a message though? They wanted me to send a message. That's all it is. It's not like to get the money back. I feel like, oh, yeah, you got hurt. But isn't firing something too nice

for the mob? Isn't firing too nice for the mob? I feel like if the mob had a problem with... Well, they didn't really let me in. It was like a test. Oh, it was a test. You're not right for this typeboard. I ended up getting the money. I got the money. You keep it? No, I would be here. kept the money. I don't know.

I was like 16 and 17. Okay. I mean, no. I mean, I got him in the money that he wanted me to collect, but I did it in such a crazy, logical, sensible way that they couldn't relate to that. Because all they knew was, you owe me money, you don't pay me,

I'm going to hurt you. Well, maybe there's another way of getting the money. Maybe we can look into the whole picture. I don't know, you remember the story. I took the guy's car and I fixed it up, and I sold it and I got the money, and we all should live happily ever after. And it was a logical, intelligent thing to do.

But they didn't think that way. You know, they like, they thrive off of the intimidation and the fear. And I don't want to be part of that. That's how they keep their power, though, isn't it? It's a bit of that intimidation and fear. But it's a very dark world, and I don't want to be part of it. How active are they today? I don't know.

I don't know. I don't think they're nowhere near as active as they were when back in the day. The government is really, you know, I think it takes a really close look at it, especially with technology these days. You can't really hide anything. You can't hide money. You can't even hide your conversations anymore if they really want to hear you. So, you know, I think it's gone down, but, you know, they're still around, but they're not out there like they used to be.

You don't see them hanging out and killing each other in the streets like they used to be, you know, and they're all trying to keep a cover. Because they see when you expose yourself, you're exposing yourself to the criminal justice system. They're going to come after you. So why would you expose yourself? You know, like Doddy and all that, you know, bragging. And then when you're in a bragging. Listen, you never want to mess with the government. They have unlimited resources

to come after you. Unlimited. And they take it personal, too. You know, it's just a career. So I don't want no part of anything that's criminal. I try and have to, if I even think somebody's criminal. The ride that steals the spotlight every time it hits the road, that's the Volkswagen TIG-1.

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please contact Connix Ontario at 1866-531-2,600 to speak to an advisor free of charge. BetMGM operates pursuant to an operating agreement with Eye Gaming Ontario. With the exception of Jack, it's a real little different level. It's more like petty crime. I don't want none to do anything that's any kind of criminal activity. I don't want no problems. I just want to do what I'm doing. leave me alone and you know you think some of that mob mentality that you were like a product of when

you were younger is still bleeding through to who you are today i know how to deal with it but i'm not like a bully but i'm sure you learn some life lessons and stuff like i learned how to try to get along with everybody whether you're a bum on the street or you're a big shot everybody's a human being okay and i try to relate to everybody on their level okay you know so we have that You know, if you walk around like I'm better than everybody, then, you know, what the hell? How's that going to be productive? You know, I mean, you know, not in a big picture.

I rather people like to deal with me. And if I have a problem with somebody, I'm going to sit down and try to work out their problem. Because, you know, there's two sides to every story. Sometimes you're going to put yourself in the other person's shoes. I've had people, you know, say things to me that they felt were unfair or they were treated by me unfairly. Well, I'll tell you what.

You got your side, I got my side. All you got to do in life with another human being is find a common ground where you're both satisfied. And typically money solves that problem. You know, the only problem we have in this world today is, you know, religion. How does money solve the problem? How, when have you used money?

Because money is what makes everybody, money is what your life is all controlled by money. I mean, honestly, you need money to survive. You need money to do everything in life. You can't live without money. Okay, you need money to eat. You need money to live. You need money control.

But how can you use money to solve a personal matter, like argument between two people? What are you talking about? You ever heard of divorce? Two people, couples do it all the time. Yeah, but it doesn't solve the relationship. Money doesn't. There's no more relationship. The money, you give somebody some money, and you separate the relationship,

and you move on and live your own life the way you want. Right, okay. It makes it feel better. It feels like you got something out of the deal. You need to get kicked in the curb. You know, if I say to you, listen, I don't want to deal with you. what you know more. Okay?

But we have had some history together or you do have some sort of, you feel you have some sort of rights or something like that. All right, here's some money. Have a nice life. You go your way, I go mine. We all have happily ever after.

Like imagine someone cuts you off in traffic and there's like, oh, there's a hundred bucks. Wouldn't that be like, oh, wow, yeah, he just made a hundred dollars? It's kind of solved the problem. It's not, though. No, it's true. I think it's very true.

You could solve anything like that. I mean, you know, if somebody cuts you off and there was no damage done. you're doing it on purpose, you know, and the person apologizes, that's being human. Yeah. You know, but if he hit your car and you didn't want the insurance claim

because your rate's going to go up and you know damn well that that damage isn't really that much, it's only you can have a fix for $100, and the guy gives you, say, $150 for your trouble, whatever, it's a good way or just, you know, people just need to come together, find a meeting point, meeting ground, and make things happen to where it's peace.

I don't believe in violence. I don't, I can't. believe in this day and age with all the technology we got with all the space travel we're doing and all the electric cars and teslas we're still hurting each other you would think violence wouldn't even play a role in the human society anymore it's not logical how is destroying a country helping anyone how is it helping i don't think many people are as logical as you look at life it seems like a motion really runs the majority of people out there. What is, what is, oh, let's get down to it.

What's Russia going to have if they totally destroy Ukraine? They're going to have a country that's totally worthless garbage. I hate to see destruction of real estate. When you're in real estate, all right, listen, if the building's got to go and it's falling apart and you're going to knock it down, like you do the casinos here, that's understandable. It's logical you're going to build something new. But to go in and destroy families and people. people's lives and things that have been existing in many, many years.

Where is the reason in it? Where's the reason? That's not solving the problem. You know, crushing somebody is not the way to do it. You know, it's better, you know, you find a common ground. Find a solution that works for everybody. Violence, it's not human-lead. It should be a part of a society anymore.

I'm sorry. I mean, I don't sound nuts. I'm saying that. But I don't feel that anybody should have any reason. and, you know, I mean, yes, the person that if you're defending yourself, while that person that you're defending yourself from shouldn't be violent to begin with, so you wouldn't have to defend yourself. I mean, you know, we got a lot of issues in society.

We need to focus on, you know, taking all the violent people that we do have and trying to either correct them or do something with them, but we need a non-violent society. I think, you know, I've been to other countries, and it's scary. I mean, the governments are very, some of the governments of these countries are very dangerous. I mean, you know, you go to China. You say the wrong thing in China. You're in trouble.

Come on. I think the difference is that you, and I feel like Graham and I are probably pretty similar. It's just too logical. I know what I mean? You can't relate to the average person. It's like, I mean, we are animals. We are driven by our animalistic instincts and our emotions and our desires. I control them.

And stuff like that. A brain should take control over our emotions. It should. 100% Okay, we have brains that have created all this stuff you know how

the world has progressed in the past 50 years alone I mean it has gotten better right we still have in many ways I think for a lot of people

all it takes one trigger and people lose their temper and they could do one thing that they throw their lives away I think unfortunately I'm sorry to say

people may not like me saying it I think religion when it's when it's taken to the extreme number one I don't care what anybody believes in

You can sit in a corner and stand on your head. As long as you're not bothering nobody, if you think that that's your life and you enjoy it, it makes your life peaceful or content, and be my guess, I don't care. But when you feel like you have to force your beliefs on someone else, okay, and you're willing to go to violence to do it, you know, I mean, a lot of these religions,

they're practicing traditions that went on thousands of years ago. We're a lot different human beings than we've, were a thousand years ago okay let's get real now you know i mean you know it's fine you want to believe in something see i'm also with me you got to prove to me you got i'm the type of person i need to be proven okay you can tell me this person exists or this exists and that exists prove it i want to see it what do you believe in when it comes to that i just believe that we're all here for this little amount of time on this earth all right we're intelligent and we need to keep progressing to be, you know, get along.

Everybody should get along. All right, we're all not going to be filthy rich. All right, yes, the world does need people to be landscapers. The world does need people to do all sites and jobs, and that's the world we live in. But everybody should be treated of respect, okay? If everybody just respected each other and everybody got their own space and respect, the world would be a perfect place. I don't know why we can't accomplish that, you know.

It just doesn't make sense. We got AI now. AI. That's all I hear about is AI, AI, AI, AI. At the convention I'm at AI, AI, AI, let me talk to AI. You know what? It's funny pretty soon. I think actually are we doing the sponsor where they're able to take your face and then make that into a video. And they take your voice and face and look just like you.

So you could be speaking right here as AI. We could do the whole thing. You train the model and we can just have a conversation with you. And you can control what I'm saying. There's a podcast out there. going to say which podcast, but the audio got messed up. We've already posted it. It did very well for us. And we ran the entire audio track through AI. And then an AI voice regurgitated in more clarity, the entire transcript of the podcast matching each person's voice. So if you guys

want to try to figure out which one that is. I don't even know which one it is. Could you, could you say it and we'll bleep it out? Sure. It was Justin Waller. No. The entire podcast was AI. Are you serious? We use AI on the iced coffee hour. No, I had no idea. Yep, it's all AI. It's not actually. That's one podcast, not going to say which one it is. Yeah.

Last night told me he can do a book on my, a book. He said, I can write a book totally with AI. Yep. I mean, that's why the, I had no idea. The entire thing's AI. Why? How bad was it? We had buzzing.

So like you could remove sounds that are input actually and record it into the track. So like a lot of the times, I don't know if you guys won't care about this, but it's kind of interesting. When you record in the iced coffee hour, a lot of the times, there would just be random interference. So for example, if we have a battery pack that's sitting on one of the cables, these are analog cables that we record all the audio into.

If you have something like a power cord that's resting on top of it, it for some reason just makes buzzing start to appear. So you can have like, as we're talking, and you can remove that as long as you have a transcript of the words and a general idea of the way that someone's voice sounds. You just read it with AI

and then spit it out with AI again, and it can work. The question is, are you real or are you AI? That's a good question. Are any of us real or AI? If anyone's AI here, I would say it's probably you. You're AI. I know we do this with... No, he's just A, artificial.

I know we do this with some of our TikToks. So what we'll do with AI, and this is incredible, is Josh, who runs our TikToks, sometimes wants a good hook in the beginning, because you've got to get people in the first, like, second. And he'll say, Graham, could you just repeat into the mic, say this one phrase, and I'll say it. And then what he could do is he could take my face and make it look as though I'm saying exactly that on the TikTok as a hook, even though I've never said that on camera before.

I don't even realize when I'm doing it or when I'm not. Sometimes I could slightly point it out if I know the specific one you could kind of tell. But if you don't pay attention, I would have no idea. It's scary. It's insane. We've used it for titles of videos. We've used it for guest research.

Before we shoot with someone, we just ask AI, like what are some interesting topics we can talk to? So and so about. Some of them are good. We used to keep this long introduction. And he's using of online dating now. Yeah. I'm dating in AI now.

So that's, dating in AI. His AI is going to somebody else's AI and now they're going to have AI together. Oh, wow. I want to know. This could get me in a lot of trouble, but I'm just going to say it. We're talking about being logical, rational.

That's how you go through all of life's problems. Now, you know, I have had a girlfriend before. And when she comes at me, when she came at me, with, you know, certain issues. A lot of times I would try to solve them. I would be like, here, this is the rational and logical way of solving this issue. And that would not yield the best benefit. Usually that would really upset her. So how do you navigate relationships?

Let's say. Listen, I'm going to get in a lot of trouble for this. But it doesn't work with women. It only works with business and numbers and deals. If it has to do with a relationship with a woman, you can throw a logic out to God him window. Okay. This is anecdotal, guys. This is not, you know, general broad sweep.

You know, it's, you know, I just tell my, you know, when you're in a relationship, basically, I'm going to be married 20 years next month. When you're in a relationship, you finally figure out basically, the simplest way to deal with your wife is just agree with her. Agree with her. But what if it's something you really disagree with? You just don't want that, whatever it might be. Do you still agree?

Or like, when do you decide when to push me? I don't know. I typically agree. Unless it means it costs me a lot of money. I'll cry poverty, but... But you're fine bending your principles of like... It had to be something really serious. I mean, you know, listen, you know, every relationship is different, you know. I mean, me and my wife are a hundred percent opposite.

There is not one thing in common between me and my wife. How did it work out in the first place? You know, because maybe being opposites really works. You know, I don't know. You know, my wife's a lot younger to me, so she likes to, you know, do everything a younger person like to do. She likes to party. She likes to, you know, have a good time, which I used to do,

but I'm older now. She likes to go running. She likes to work out. She plays tennis. You know, she worries about things that I could care less about what we're eating or, you know, we're opposite in every possible way you can imagine. Okay. And somehow it works.

What bonded you two together then? Was it physical attraction and then everything else called in suit? Well, for me it was physical. I don't know. I think it was physical for me. She saw opportunity with me, you know, but, you know, I mean, I don't know. Well, I know is that, you know, we've been accepting each other and putting up with each other for almost 20 years. and, you know, her world is totally different to mind.

Totally different. We don't work together. I don't get involved with her world, with the house of the kids or the daily day, day stuff. You know, and I focus on making money, and we enjoy a lot of time together. What do you guys do together? Oh, I mean, we go out on the boat. We'll take the boat all over to Bahamas. We'll take trips.

You know, we do whatever, you know, go out to dinner. We go to parties. whatever. I mean, we have a social life and, but total opposites, you know. You see me playing tennis, come on. So, so you

just agree with the wife in the situation. But she also agrees with me. It's like she's got her department and I got my department. Okay, she's not going to come in and say, okay, listen, you need to sell that hotel. It's not going to happen. She's not going to, you know, she's not going to cross into a world.

Has she ever tried? No, I don't recall her ever Like a house She sees something stressing you out for a while She just bought her sister a house Yeah Okay, because we sold the hotel in Fort Lauderdale A sister's moving back home

She's taking over all my beach property hotels And we need to find a sister a house So, you know, to me I told my wife to handle it Well, of course that didn't work so good But you know Her sister wanted one thing she wants another It's not good enough of my sister Anyway, long story's true,

what I told my wife you know listen do it whatever you feel best as far as a house is I go along with you know so why not rent the house this is the one for 1.2 yeah um renting a house is just you know I don't know it just if I would have rented the house it's probably a house that got in that neighborhood probably would have cost me at least um six seven grand a month probably it's a lot Yeah, it's a big house. I mean, the house is like 45% square feet. You've got four children. You know, and we're pretty much on the level where, you know,

and it's just as like one of my, it's just as my daughter, basically. I race like my daughter. So, you know, when it comes to your kids, it does get emotional with real estate because you want your kids to live somewhere nice. All my kids live in big, beautiful homes, which they're entitled to. They deserve it.

You know, so, you know, she should have her own home. And, you know, rent her house would be very, this is more of a permanent thing, too. Yeah, got it. It's not like a temporary situation. Typically, I would always rent. You know, if she's living here for a year or there for two years, yeah, rent their house.

But in this situation, we're trying to get her stable and, you know, more permanent. So we bought the house. And I got a good deal on it. I'm happy with the price we paid. It was on the market for a million five. We paid a million two. And it came fully furnished and everything, really quality. And everybody lived happily ever after.

And I agreed with my wife on the house that she thought we should buy. So we're all happy. Seems like you really don't like having lasting issues or things that you're not content. with. Like you just like to, all right, let's figure it out. Let's move on. Fine. That's good. Every day, I got different things, fires to put out. I'm constantly waking up every morning putting fires out. Okay, figuring out what are the problems right now that we're facing? What do I got to do to solve them? You know, and that's what I do for a living, manage in a portfolio. How did you meet your wife?

Family was the caretakers in probably the most dangerous building in Oakland, California at the time that nobody wanted to buy. I used to buy all the rough stuff that nobody else wanted because that's the only place I can get in you know um no competition cheaper price you know so she lived a very very tough building and I bought it it was a foreclosure and it was 14 apartments it stretched a whole street city block and um a family like the caretakers there you know which nobody else lived in the building but them at the point when I bought it there was nobody else living there but them you know and I could have told them to leave but You know, I met her grandfather and a family, and, you know,

she was very young. We weren't dating, you know, when she was very young. But I met her family, and the family started helping me to fix up the building. A grandfather was a roofer. Oh, well, let's fix the roof. But he couldn't fix the roof while he was there because there was no money to fix the roof. Well, I came in, I bought the building. I got some money for materials and to pay him some labor.

He started to help me fix the roof. You know, when you marry a Mexican, you inherit 15 family members. It's just the way it is. And they all work for me, and he all help me, you know, accomplish a lot of things. So, you know, next thing you know, we're fixing up all the apartments. We're painting them. We're cleaning them. The women are cleaning. The guys are painting. We're fixing this.

We're doing that. We're renting them out in Section 8. And we got that building turned around. I paid $250,000 for that building. 14 units. You do the math. What's that? 20 grand a door? Yeah. Less than that. I probably put like five back then, not even a few grand a door into them. I sold a place for a million bucks eventually. But it was very dangerous place.

But we cleaned up the area, too. and we use our management skills to make it a garbage to gold. And, you know, and then as she got older, you know, we, you know. You just stayed close with her and her family and stuff like that. I mean, family became very close to me because we worked with me. We worked together every day, you know, and then she matured into a young woman. And, you know, we had the attraction and we got married. But, like, when did you ask her on a first date?

Like, how did that even? come up in a conversation where you said, hey. She actually pursued me. She did. Yeah. She'll deny it, but she pursued me. I remember, I kind of remember when I had seen a twinkle in her eye. We finally got the building all rented.

And my partner, I had a partner then too. He didn't want to buy the building. He was afraid to, but I told him, listen, I can handle it. And then I had him come back and take a second look after we got rid of all the criminal activity around there and stuff. Anyway, we got the building rented. The building had. had a laundry room.

And my partner, even though he had all these millions of dollars, he got some kind of personal thrill of me and him going around, right, in his big fancy Mercedes, whatever he was driving that day, and taking the money out of the damn laundry machines. Yes. Bags are quarters. He loved it. And I loved it too because I didn't have much money,

and half the money was mine. So it was like a tradition. We go around all our buildings. We had, you know, some were his, someone. wines and we're ponds whatever anyway we go around one day every other week and we collect all these bags of money and then we take them to the bank and put them in the machine they'd count them up and you know we'd have some cash you know whatever deposit whatever anyway the long story short i remember i seen a twinkle in her eye because let's face it i was very poor back then and she was very

poor um when she saw me carry those bags of money that's what did it i think so One day I dropped the bag And the quarters were everywhere And all these kids And the rough neighbor were And that's what sparked She saw that She came down and protected me

Was she picking up quarters too? Yeah but she was giving them to me And listen We both came from a very very tough place And very very poor place And we struggled together for a while But it was great You know we made it

That's cool that you've Acquired all of this wealth with her You know what I mean? I feel like you don't see that a lot It's more of a rare thing Where you got this like I acquire it and she spends it. But the age difference, you know, with the wealth and everything.

You know, everybody's different. It worked for us, you know. It doesn't work for everybody, but it works for us. And, you know, she's helped me raise, you know, children from previous. I helped raise her daughter. I mean, her sister. You know, it's been a weird situation, but, you know, we both always work together and try to do the right thing for everybody.

Is there anything you guys disagree about? or for the most part do you just agree with whatever she wants? No, I mean, you know, we disagree. You know, everybody's at disagreements, but nothing that serious, you know. You know, she might want to buy a $6 million yacht, and I'd rather find a bargain.

It's worth, I can buy for two, that's worth maybe three or four. And yeah, we have a little disagreements, but we always work it out. We always find a middle ground. We always find a meeting place. You know, she's always going to complain about what I'm eating, but, you know, it's good for me.

Do you feel like you need to eat a little bit healthier for her? Or is it all just... Well, I need to do... I need to take care of myself so I could, you know, do it for everybody else, you know. And then, you know, she's a drinker and I'm not. Robes sits, I don't drink. She drinks. Why do you not drink?

It puts me to sleep. That's what hits one of this to me, though. Vodka Red Bull. She starts drinking tequila and she's drinking margaritas and all. She's ready to party, baby. You know, me, I'm... You know, I mean, this is what it is. Andrew Huberman did a whole podcast on the effects of alcohol,

and he noted that in people's brains, you either have the type where they drink and they get really energetic or the people who drink and it puts them to sleep. And there's something in your brain that you just process alcohol. Sleep. Me too. I go right to sleep. It's terrible.

It's really bad. I go straight to sleep. It makes me not want to drink. But if you continue to drink then. If you continue to drink, like past the point of being tired and like everyone's all excited, then I can get the energy. Yeah. But my default is just like I slump and I just go on a couch.

If there's a couch near by and I fall in. It might be 20 minutes where I have a bit of energy, more talkative, but then immediately after it's sleep, unless I just keep drinking. But yeah, if you keep drinking, then you can get the energy. But like three, four drinks. I got to go. All right.

Yes. Okay. Is there anything else that there's, dude? Anything else you want to cover? Okay. The real deal is this. Yes. Get ready.

Because what's the worst thing to happen? Does you get ready? Get ready. Seriously. Deals are coming. They have to. trust me i'm watching cap rates going up now's the time to start looking and watching and lowballing all right there's no emotion in doing a real estate deal if the guy wants a million bucks offer him 750 that's the world we live in right now and that's what you should be trying to do because you may not take it now but you'd be surprised a month from now you might get a phone call or he might take eight or eight 50 and you might say oh that's still a good deal

So be prepared because we have to. It has to happen. When the bad shit happens, that's what opportunity is knocking at the door. Don't make sure you answer the door. Don't just look at them on the ring. Yeah. Amazing. Thank you so much.

Thank you so much. Every time I see it, it puts a big old smile on my face. We can do this easily another two hours. I know. Three hours is chat. And unfortunately, I would stay as long as you want, but I got people I'm obligated to you. Well, thanks, Ben. Really appreciate it.

Thank you guys for tuning. Thanks for watching. Until next time. Adios, amigos. And don't forget, go to Ben Miller on YouTube. And Ben's hotels. And BenMell.com. You want to consult with Ben.

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