The Pomp Podcast - #790 Build An Insane Real Estate Portfolio TODAY w/ Richard Fertig

Starting point is 00:00:00 What's up, everyone? This is Anthony Pompliano. Most of you know me as Pomp. You're listening to the Pomp Podcast, simply the best podcast out there. Now, let's kick this thing off. Richard Fertig is the founder of Stomp Capital and the creator of Short-Term Rental University. In this conversation, we discuss short-term rentals, the real estate market, and how you at home can get started in this brand new asset class. I really enjoyed this conversation with Richard, and I hope you do as well. Before we get started, though, I want to first talk about our sponsors. Today's episode is brought to you by Mode. Mode allows you to buy, earn, and grow Bitcoin all in one app. Not only is it a secure app to buy and hold Bitcoin, Mode allows you to

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Starting point is 00:03:20 today. And for a limited time, you'll get $10 when you place your first investment. Again, that's fundrise.com slash Pomp. Go check it out. And when you make your first investment, they'll give you $10 on top of it. Fundrise.com slash Pomp. Anthony Pompliano runs Pomp Investments. All views of him and the guests on his podcast are solely their opinions and do not reflect the opinions of Pomp Investments. You should not treat any opinion expressed by Pomp or his guests as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his personal opinion. This podcast is for informational purposes only. Richard, how are you? I'm great,

Starting point is 00:03:59 my friend. How are you? I'm doing fantastic. I'm super excited to talk. Let's start first with a little bit of a background on your real estate investing. I think that people sitting at home like, man, real estate sounds awesome. I want to start getting involved in this. But maybe kind of explaining your perspective would be a good place to start. So how did you get into real estate investing? And what are you doing now? Absolutely. So the first thing I would say about real estate investing is it's accessible to everybody. We often see people that have large portfolios of multifamily and large buildings, and it seems inaccessible to a lot of people. But the way that I actually invest and teach people at short-term rental university how

Starting point is 00:04:39 to do it, is accessible to many. And you can actually buy your dream vacation home and have it paid by somebody else using Airbnb or Vrbo, and eventually get into more intelligent strategies where you're getting bookings directly. But the point being, you can start really small. It doesn't require a large budget or even a great vision. The proof of concept is already there. What I'm currently doing is creating an institutional quality portfolio, buying up assets, zoning, locations, unique properties that are at the heart of what short-term rental guests really want. Today, people want experiences far more than luxury. And this is a new disruptive mini asset class, if you will, or a sub-asset class in real estate. And I encourage everybody to learn more

Starting point is 00:05:27 because we're in the very early stages here. And like everything that you teach in crypto and Bitcoin specifically. Right now, mom and pop, individual hosts are ahead of the institutions. It's rare. Usually institutions are the smart money. They get all the upside. But right now, the vast majority of the five or six million hosts that are on Airbnb and Vrbo and taking advantage of this and buying vacation homes, having other people pay for it, scaling by multiple locations and so on, tend to be mom and pop operators that have the first mover advantage. And if desired, I think there's a very strong likelihood that institutional investors will move into this space in the future and will start to buy from these mom and pop. So it's a great time to get started.

Starting point is 00:06:11 So when you think about a deal in kind of short-term rentals, walk me through like the execution of this. Are these homes usually, are they more like apartments? Like how does this work? So if I'm, let's just say, an average person living in the United States, I go to work, I'm an accountant, I'm a mid-level manager. whatever position I have, whatever occupation I have, I got a little bit of extra money and I'm like, hey, this sounds interesting to me. How does this work from like a sequence of events or an execution to actually get set up to start running this? Yeah, absolutely. So the first thing I would say is historically, it's been very challenging to get started in short-term rentals

Starting point is 00:06:49 if your W-2 income didn't support having a second home or a vacation home. As the asset class has matured a little bit, there's now early entrants in the financing, lenders, that will actually lend against the asset like in every other real estate class. So when you go buy a multifamily building, it's unlikely that your W-2 income allows you to buy this $70 million building. What they underwrite is the rent, the earnings from that building. We're now at the very early stages in the short-term rental market where there's some forward-thinking lenders that say, you know what? This asset generates net operating income. I can take, Richard, say 20% down and then underwrite the asset for the balance and make sure that it cash flows.

Starting point is 00:07:35 So to answer your question specifically, Pomp, I don't really recommend doing things that are generic. You talked about condos or apartments. That's not really the sweet spot for where I see the future of short-term rentals. The future of short-term rentals and what people are actually seeking are more unique things. So maybe it's a vacation place. Maybe it's some land and you put some yurts on it. It doesn't have to be big or fancy. It just has to be experience-based and unique and attract a tribe that's similar to you. And the way that you would literally do it is find the location. I recommend that you look where it's not crowded. There's a lot of really popular vacation spots. I started talking about the Smokies four years ago to people in my live

Starting point is 00:08:14 audience and in my classes, and that market's gone straight up. But there's still a lot of undiscovered places where there's not a lot of people chasing these opportunities where you can for not a lot of money get started put 20 down work with some of these lenders and somebody can you know direct tweet me at i'm richard fertig and i'll be happy to share leads and suggestions and so on but with 20 to 25 down you can get started you can buy that location you list it on Airbnb. The thumbnail is critically important. The copy is critically important. But almost immediately, you will start to monetize this asset. The days of like, will this work are long behind us. Like the fact of the matter is, it does in fact work. And most of the people that are

Starting point is 00:09:00 in short-term rental university, whether they're in our Facebook group or our YouTube channel or whatever, are not only profitable, but they're scaling. It's worked so well with the first one that many have taken a second one, a third one, a fifth one. Many people are actually leaving W-2 jobs and starting to do this professionally and full-time. And not only that, it's a lot of fun. You get to go travel. You get to use the place when you're doing repairs and meeting with maintenance people. So there's a tremendous amount of upside, and it's literally the sweet spot of where hospitality is going and what people are seeking, and it's very early. So when you think about this, let's say that I go and I buy, whether it's a standalone, like a home, or I get an

Starting point is 00:09:39 apartment or whatever kind of the asset itself ends up being. Uh, and I make the purchase. I'm able to secure the financing and go ahead and do that. Uh, it's gotta be furnished, right? So I've got to make sure that there's furniture, et cetera, in there. And I go and I do that. Uh, and then I put it up on Airbnb. I nailed down the thumbnail, the title, the description, the pricing, everything. We're ready to rock and roll. Okay. Somebody comes and stays there. Once they leave, what's the work that goes into, they left and you got to get it ready for the next one. Or most of these owners actually cleaning it themselves? Are they hiring cleaning folks? Are they doing certain other services or are they just renting it? Like, how do you think about the experience of the

Starting point is 00:10:19 guest and then the order of operations before the next guest shows up, how people can kind of scale this? Cause it sounds like they're not actually, you know, just managing it themselves that they're kind of using external services as well. Yeah. So typically most people get started with one and oftentimes they'll do most of the guest interaction and the communication and get it set up, learn the ropes, kind of like you would any business, right? Like you want to see all aspects of it. I don't necessarily think you have to clean yourself, but you should hire, start to build a small team. And it's really just a cleaning person, a handyman, have a relationship with an HVAC provider in the area or a plumber, just standard operating things. And you do it in

Starting point is 00:10:56 advance, right? You don't wait until you have a plumbing issue to try and call around because at that point you're not going to get any help. Once you've determined sort of what your process looks like and what you like to do. I recommend that everybody start to scale and automate all of this stuff so that you take the individual homeowner outside of being the operator and turn it into being a business owner. And that's what's really required to scale. Furthermore, I recommend that people get started with what's known as remote hosting. Too often, we see people getting started in their backyard, and that is like a crutch. Like, oh, there's a plumbing problem. Hey, Pomp, I got to get off this show right now. I have a plumbing issue. I'm going to run over

Starting point is 00:11:34 there myself. But if your property is located six hours away or six hour flight away, you can't rely on that. So consequently, you don't have that crutch. And so you solve for it. And in order to scale, you need to do all of that. And that's one of the reasons that people say that this isn't really an asset class, that it won't really scale and institutional capital can't come into it. And that's baloney. The fact of the matter is the rate of return is so high, the yield, the thirst for yield is so great in these institutional providers. They know and they're circling and they're investigating all of this, the amount of capital that's at stake here, they will figure out the operations. And it's really pretty straightforward. And this is what

Starting point is 00:12:11 I do. And this is what I teach others to do. You create a middle and back office that handles just about everything. And then you create small micro teams in each location. And then you automate everything. And that's what allows me to have properties in Costa Rica, Palm Springs, California, Palm Beach, Florida. I'm here in Jackson Hole. We have a property here. So you start to do all of this and create an international diversified portfolio with different risk characteristics and different return profiles. And at the portfolio level, it's an incredibly attractive cash flow proposition. Got it. And so when you think about how much money somebody can make from this, like what are the returns that people are actually generating? And not from like,

Starting point is 00:12:49 there's none of this is financial advice, but just is this something where people are targeting like five to 10% returns on an annual basis? Is it more like 15 to 20%? How do you think about that? So it depends on the user. So for you, Pomp, for instance, if you and your wife wanted a vacation home, you might be happy breaking even. But you're like, hey, I've got this incredible vacation home. I go use it twice a year for a week or two. And like somebody else is paying for it. And that would clear your investment hurdle. For a true investor, though, what we're seeing is cash flow and returns that are two and three times higher what you see if you're a landlord in a traditional multifamily 12-month lease scenario. So if they're generating,

Starting point is 00:13:29 let's call it, it's a 3% to 6% cap rate, we're seeing 2% to 3% X that by taking what's known as vacancy risk. The reason that short-term rentals command a premium is because we don't have a 12-month lease. We don't have the certainty that Pomp is going to write a check every single month. We've got this vacancy unknown. However, where we are today, and the reason we know we're so early in this space is the premium, the vacancy risk is mispriced and we're being overly compensated for that. We have certain people in our group and on our YouTube channel that are making 30, 40% cash on cash type returns. I think that that's abnormal. I'm not here to suggest that you can just go out and make those kinds of returns, but there are people that are

Starting point is 00:14:11 doing that. And no matter what, when it's done properly and you're using dynamic pricing and you make this thing more of a business as opposed to a hobby and you're using it less yourself, that's the biggest, you know, detractor. What is it from the Scarface? Like don't get high on your own supply. Like you have this incredible place. If you keep going and using it, you're going to make less money. But if you, and I'm often, you know, I've got properties all over the place. I'm often homeless because they're all booked. But so once you get outside of that and you turn it more into a business, you should see two to three X what you see on a long-term rental rate. So said differently, if you can rent a one bedroom house for $1,000 a month, the amount of revenue that we're seeing in the short term rental space is 2 to 3x that. Now there are more expenses, but nowhere near offsetting the amount of revenue. And that's why this is such an attractive asset class, not only for me and my followers, but soon institutional capital as well.

Starting point is 00:15:08 Explain dynamic pricing. How does that work in terms of for short-term rentals? Is it just understanding seasonality, other events in the local area, kind of when high demand is, you raise the price and you just drop it when there's lower demand, or how does that work? Yeah. So what's actually happening now, and you see this, you know, Pomp, you've been attracted to asset classes early. This is the maturation of the asset class, right? Like first it's hard to get funding, then it's a little easier, then it becomes common. First it's hard to get insurance, then it's a little easier, then it's common. Dynamic pricing and all of these different services exist around the short-term rental market and more and more are popping up every

Starting point is 00:15:44 single day. So initially, it's exactly what you described. Entrepreneurs like myself would say, hey, weekends get surge pricing and it's 4th of July, that gets surge pricing and we would do it manually. Since then, there's several different dynamic pricing services. SAS companies have venture. There's a whole ecosystem that's going around this. And dynamic pricing is basically people that do the exact same thing for hotels, for car rentals, for airplane seats. They look at this, just the data, big data, and say, there's a lot of demand in this particular street. And it's down to that level, right? It's like literally that granular. There's a lot of demand on this street, on this date, and there's not a lot of supply. And so consequently, we're going to

Starting point is 00:16:25 increased pricing. And so if you were to book one of my places for a seven-day period, every single one of those days has a different price associated with it. And that dynamic pricing literally should result in 30% to 40% bump in your revenue versus doing it yourself. No matter how good you are, skilled, you know your place, you know the holidays, all that stuff, you know the festivals, the dynamic pricing has big data and it's advantageous. And everybody who's doing this should be using dynamic pricing services. I happen to use one called Price Labs. There's others out there like Wheelhouse and Beyond Pricing. They all have slightly different algorithms and characteristics. But my point is, there's now more and more SaaS companies coming

Starting point is 00:17:08 into this space, which is also helping me understand that this will be an institutional asset. Got it. And so when you think about work from home or other dynamics that are kind of changing here. Is that having a positive or negative impact or is it agnostic to a lot of these short-term rentals? Like, do you see kind of a tailwind of now that more people can work from home, they can kind of move around, there's dynamic pricing, et cetera. Like, how is that all interwoven or kind of related? Yeah, that's hugely positive for what it is that we're doing, right? And that's one of the reasons I don't think COVID caused this. I think COVID accelerated it, right? So like, we basically in a one year period accelerated by 10 years, a lot of the trends that

Starting point is 00:17:48 we've been thinking about and forecasting, and COVID has really brought it to the fore. So there's studies now that talk about the second most important thing in employment beyond compensation is flexibility. It's really hard to get people that are out of the office back into the office. And more importantly, if you just take a look at historically, you know, a couple hundred years ago, we were an agrarian society. Everybody lived near the farms. A hundred years after that, we became industrial. People moved near the factories. More recently, we became a service-based economy. And so people lived near the banks and in urban areas and the legal system and so on. And now we're becoming a creator economy, right? It's all about creation and

Starting point is 00:18:28 things that artificial intelligence can't really replicate. So comedy, writing, YouTube channels, all of this stuff is the future of where value add employment is. And most people that I know that enjoy this sort of creativity, like being in inspired places. And I sent a tweet around not too long ago, which is like, if you yourself are not inspired, how are you going to inspire others. And so this concept of people working remotely and working in different locations and environments is here to stay. I personally chase the seasons, right? So like in the summer, I'm on a barrier island in the Outer Banks. In winter, I'm here in Jackson Hole, Wyoming. In the fall and the spring, I'm in Nosara. I've also created opportunities in businesses in those different

Starting point is 00:19:10 locations. And while I might be unique today, my bet is in a decade or two or further, it'll be the norm. People will move around for creativity, for inspiration, for travel, for different culture, smells, tastes, et cetera. So we're at the very early stage of what I think will be a major trend and short-term rentals is the only way to actually capitalize on that from a real estate perspective. Because I don't know who invented the law that a 12-month lease is like the norm or that you have to buy a home. What we're seeing right now is some of the most successful and creative people literally move around every six weeks, every six months. It doesn't matter, but they want to move. So you basically said, hey, here's where I want to live during certain

Starting point is 00:19:51 parts of the year. Let me go there. Let me get property. When I get the property, I'll rent it out when I'm not there. And then when I want to be there, I'll just block that out. I'll live there. And then what that allows for you to do is probably either cover your costs or come close to covering your costs, maybe make a little bit of a profit on the short-term rentals. And then when you want to use the property, you can, but you're not actually paying for it out of pocket to have, you know, three, four, five different houses across the world. That's correct. I also do it from a fund level. So we have a profit motive. So I don't stay in those properties, but your concept is correct. One could do that. And I do that personally. And then separate and apart from

Starting point is 00:20:27 that in the stomp capital portfolio, we're there for profit and I don't stay in those locations. But you raise an interesting point. I try and highlight all of the benefits of short-term rental investing and compare them to other types of real estate investing. What you just described there is optionality. So anybody who comes from the financial markets knows that options have value. The fact that I can block my calendar, use it, rent it for a week, rent it for a month, rent it for 12 months, that optionality, that flexibility is not priced into the short-term rental market yet. Eventually, it will, right? And the fact that zoning allows for the short-term rentals means that that zoning is more valuable than zoning that does not allow it. And regulatory

Starting point is 00:21:08 risk is one of the biggest risks we investors face, but there's ways to accomplish that. You go into places where it's already legal. You go into places where they charge a lodging tax, an overnight tax, a hotel tax. They call it different things. And the reason that gives me more comfort is because then those communities are dependent on that revenue to fix their roads, to expand their middle school, and so on and so forth. And it's very hard for politicians to say, you know what, we don't really care about the middle school anymore. We don't really care about fixing the road. What we care about is not having short-term rentals. And consequently, we're going to figure out taxes some other way. But that flexibility and that zoning right and

Starting point is 00:21:44 that optionality, completely not priced into the short-term rental asset class. And while you're buying at these levels, I think you have a bright future ahead. Joe, John, what questions you guys got? Hey, Richard, thanks for coming on. This is fascinating stuff. My question would just be around kind of how you pick locations. What are the specific, maybe you have some idea or can give us some specific locations that you're looking at or you think are good, but ultimately, like what are the attributes you look for in a location before you start investing in specific areas? Absolutely. Great question. The way that I teach people to actually do this is really to be introspective and see what you like most. So for instance, if you're not a skier, even if the

Starting point is 00:22:23 numbers look really good on a place that's, you know, around ski country, you'll likely burn out or you'll have a problem with your heater and your furnace in the middle of time. And you're just like, oh, this doesn't make any sense. But if it connects to something deeper on a personal level then likely you'll be able to weather this for the long term and you know i see pomp constantly reminding us think long term think for the future right like um it's the same thing with this you have to be able to hold the asset long enough the easiest way to hold the asset long enough is if it resonates with you personally and then the only other bet that you're making joe is that there's other like-minded people so if you really love skiing let's look at ski country then

Starting point is 00:23:02 then we can run the numbers. There's a service out there called AirDNA, which allows you literally to put in a zip code, sorry, the street address, 123 Main Street, Jackson, Wyoming, and it'll tell you based on the number of bedrooms and bathrooms and so on, what a projected revenue income stream would look like. So the first thing I say is connect to your why. There's no right place for all of us. The more that it's closely related to something that you like to do, the longer you'll hold it. And the more likely that you'll attract people that are like you. And the challenges in short-term rentals is getting the wrong guests in there and screening them out. So the more this is related to you and you can promote that through thumbnails and your experiences and what it is

Starting point is 00:23:46 that you do, the more likely the similar type person is going to book your place and take good care of it and maintain it. And you'll be quite successful. John, what do you got for us? Yeah, Richard, thank you for joining us. This is awesome. Can you talk about how to determine the price of a different property and kind of the revenue streams from that? So you talked about a service like AirDNA, but on a mountain, for example, in Jackson Hole, it probably rents a lot more during the winter than the summer. Can you just talk about the differences there? Yeah, absolutely. And what's kind of interesting is you would think it depends where you're located at, say in Jackson Hole. You would think, and I did, that the winter would be more popular than

Starting point is 00:24:22 the summer. It turns out summer is peak season, right? So a few things. I always recommend that you have at least two seasons. Don't just go to a place that has like one season because God forbid something happens in that one season. You got to carry this thing for a whole 12 months. But if you have summer seasonality and winter seasonality or spring and fall or whatever, you have greater likelihood of being able to weather any storm that comes our way. As far as pricing, the single biggest mistake I see people making is underpricing. Most people say, you know what, like, this is a two bedroom ski condo, it's not ski in ski out. And so I would pay 240 bucks a night for it or whatever. But when you move to dynamic pricing, what you'll quickly find is it's like

Starting point is 00:25:06 an auction, it doesn't matter what you would pay, it matters what the buyer, the end user would pay. And the end user is a logical person. So they're looking at comps, they're looking at other availability, they're looking at other pricing, and if they buy your place for that week instead of at $240, but at $440, that's all additional profit, and nobody's doing something that's not in their best interest. So even though you may not think your place is worth $440 a night, if somebody hits that bid, that's the market clearing price, and you shouldn't feel bad about it. The higher the price though, the more value you want to add in terms of guest services and communication and hospitality, but that doesn't mean that you have to be like hands-on and

Starting point is 00:25:46 living there. It just means they have to be responsive and professional and give them advice and answer their questions. It's really not challenging. Yeah, Richard. And then one more question. How do you think about outsourcing, renting the actual property? If someone doesn't have the time or something, is it better to use a third party service to do that or just go on Airbnb yourself? So a lot of people use a third party service, whether it's a property manager or a company like Vacasa or Evolve. And I don't have any experience with those larger company names some of my personal lifestyle assets where again i'm not actually like monetizing it as much as i just want like a incredible place to live and paid for by with somebody else's money i will use

Starting point is 00:26:25 local property managers and pay them you know between 10 and say 20 and again profit isn't the motive but if you're doing this for profit if this is an investment for you and we're seeing more and more people circling doing this as an investment it's really incumbent on you to learn how to do the property management yourself and list it on airbnb and on verbo you always want to list on at least two platforms in case you get you know d platform on one of them for whatever reason and then eventually you want to start moving towards direct bookings once you start to have your guests and your tribe and people like it and you've got good reviews it's really easy for people to say hey i want to book this next year the next few years and you start to develop your

Starting point is 00:27:03 own book of business it takes a little while but that's the end goal because then at the end of the the day, just like with Amazon, you don't control the email list or the clients, but on Shopify, you have direct access. You know who your clients are. You can email them and say, I've got a special, I've got a new product. Once you have direct access to your clientele, now you've got your own book of business and that's even more valuable than say Airbnb or any other platform. Richard, how can people learn more about this? I know that you do a bunch of work in terms of educating folks and kind of showing them what you're doing. Where can we send folks to learn more from you and the team you've assembled? Yeah, absolutely. Thank you,

Starting point is 00:27:39 Pomp. So the first thing is, I don't know how to do this. It's backwards or something here. Short-term rental university. We have a YouTube channel, 61,000 subs or thereabouts. We have a Facebook group also, short-term rental university with about 50,000 hosts from all over the world. And it's a great resource. If you have a question, Hey, this happened. How would you guys handle it? We have 50,000 active hosts all over the world that are there to help and assist and so on. So it's a wonderful resource. So I would start at those two places, short-term rental university, YouTube channel. We have over 500 videos that are free. If you want to co-invest with me, you're putting up the stomp capital there.

Starting point is 00:28:20 That's the fund that we've launched and raised. Really excited about the prospects in the future. And our goal there is to actually create an institutional quality portfolio that some private equity real estate firm or a hospitality company says, wow, I love the assets and the locations and the zoning that you've locked up. So if anybody wants to be a passive investor, and this sounds really interesting, but you don't have the time or energy or bandwidth to do it, we now have, I think we're the first, if not the first, one of very few short-term rental-focused private equity real estate funds.

Starting point is 00:28:50 Today, you have to be an accredited investor to participate. I know you go off and off, and I agree with you about accreditation not being necessarily the right metric, but we play by the rules. So that's where we are today. How long would this take for us to execute? Let's say that my brothers and I said, all right, we're going to do one of these. How long would it take for us to get this done? Is it like a 30-day process, 90-day process, two years? So here's what I would say, Pomp. In the future, I genuinely believe that everybody's going to have something like this, right? Like we're moving into this sharing economy and so on. So there's

Starting point is 00:29:21 no reason that you should have to be super wealthy to have a vacation house, whether it's at the beach or the lake or the mountain. So I think in the future, everybody will have assets like this that pay for themselves or monetize. And it's really straightforward. The biggest challenge in how long this takes is for you to actually acquire the property. So if you guys could go out like today and say, hey, we've always had our eye on this location in California, and you could buy the property and close on it today, less than 30 days. I highly recommend, though, that you take it very, very seriously from a design and decoration perspective, because the bar is improving. It used to be, you just slap anything on Airbnb and it would rent

Starting point is 00:29:58 because there wasn't a ton of supply. Through dialogue like this and our YouTube channel, literally tens of thousands of hosts are onboarding on the platform every single day. The single most important thing you can do is differentiate yourself. So don't do a generic copycat, me too, apartment, condo. There's a lot of institutional money that's doing that in rental arbitrage. They're going out and they're scaling. They're viewing it as a technology play. In my personal opinion, they're doing it all wrong. The opportunity in the short-term rental market is to be unique and differentiated. So go get that insane place on a cliff with an incredible view and just throw up a yurt. Get anything that's unique, whether it's design, architecture,

Starting point is 00:30:38 location, access, but something that's like one of one, right? Like one of one is going to sell on the short-term rental space forever. Once you find that, spend the money to improve it if needed or design it and decorate it and make it really hospitable. Make it for yourself. And you're going to find other people that are like, hey, I love pomp style. That's fantastic. Let's go do that. And that'll give you the really long runway. But if you just enter and do it generically and save a little bit of money and go to Ikea and do all that, like, yeah, that'll work, but it might only work for 12 to 18 months. We want to do something that's going to work for 12 to 18 years. I think that that's like a really interesting part of this too is it's not just the, it's a

Starting point is 00:31:17 Short-term rental for a long-term vision, right? Which I think is- Short-term rental for long-term wealth. Yeah, which is a really good way to kind of think about what you're doing here. This is fascinating to me. I feel like, I agree with you, that this is gonna become much more popular over time.

Starting point is 00:31:32 So I think you're well ahead of the curve. It is becoming incredibly popular and it's incredibly advantageous on a variety of levels. Not only is the cashflow greater than any other real estate, you have equal, if not greater, price appreciation. There's a lot more room for price appreciation because right now all of these homes are trading on comps.

Starting point is 00:31:50 So like the house across the street for the Jones, where like the Jones family literally lives, that's how much I'm buying this business, this small business for. There's no NOI component. So there will be cap rate compression, which will drive price appreciation. And at the same time,

Starting point is 00:32:05 we get all of the benefits of depreciation in real estate. So it's taxed advantage. I mean, literally I've searched my entire life. I used to be a hedge fund manager, ran a large $4 billion portfolio. our mission was to generate as much return with as little risk. And the best way to do that is to find mispriced assets and get to the asset class early because you're risking a little to make a lot. Most people do it the opposite, right? They want safety, security. The asset's

Starting point is 00:32:30 already been discovered. Now you're risking a lot to make a little. Good luck on that strategy. Sound like the pension funds. All right, man. Listen, Richard, thank you so much for taking the time to do this. I've learned a ton. I hope that a lot of people who are watching this learned as well. If you do not follow Richard on Twitter, please go do that or go subscribe to their YouTube channel. It's packed with tons and tons of great information. I've learned a lot from it. So I appreciate taking the time to come on. And hopefully there's a couple people who watch this who end up going and doing it themselves. And if you guys do end up doing it, let us know so that we can we can promote whatever whatever you end up accomplishing. I love it. Thank you

Starting point is 00:33:07 so much, gentlemen. Pomp, contact me. Let's get you a vacation house. You and your wife need to do this. Oh, don't listen. I don't need to be spending any more money. You're not spending money. You sound like her. You sound like her. Awesome, man. I'll see you later. All right. Be well. Thank you, gentlemen. Have a great day. Bye guys.

The Pomp Podcast - #790 Build An Insane Real Estate Portfolio TODAY w/ Richard Fertig

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