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Real Estate Investing with Keith Weinhold
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  • Get Rich Education

    613: Mortgage Rates in 2030

    06/07/2026 | 38 mins.
    Keith breaks down five major mortgage myths, including the belief that today's mortgage rates are unusually high, that the Fed directly sets them, and that rising rates automatically push home prices down. 
    Drawing on historical patterns, he explains why mortgage rates and home prices often move together, and why waiting on the sidelines for "better" rates can quietly erode your long-term wealth. 
    Keith also explains how inflation can benefit borrowers by shrinking the real burden of fixed-rate debt and shows how leveraged real estate can outperform traditional stock investing. 
    He ties these insights into today's K-shaped economy and the growing role of AI, and explains how strategic action and the right guidance can help position investors on the winning side of these trends.
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    Complete episode transcript:
     
    Keith Weinhold  0:01  
    Welcome to GRE. I'm your host, Keith Weinhold. There are myriad misunderstandings about mortgages. I dispel the myths and discuss the expected mortgage rate level in 2030 You will know more about mortgages than 99% of people today on Get Rich education, you know, Mid South Home Buyers, that top Memphis turnkey provider. I learned that a secret weapon behind their explosive growth is more than just you buying their properties, it's an executive coach. For nine years now, their CEO, Terry Kerr, and his COO, Pat Nix, have worked privately with a coach who I've now learned from too, and he doesn't market himself online anywhere. After 12 years behind the scenes, that coach is now making himself available exclusively for GRE listeners. His name is Daniel Thomas Hind. If you're a hard-charging business owner or investor who wants to get in the best shape of your life, physically, mentally, and professionally. You can fill out an application for a free consult. This is private one on one coaching for those willing to go to uncommon lengths to achieve uncommon results. Thanks to Daniel, we've all become better leaders, better operators, and better men. It started by showing up for ourselves. Now it's your turn. Go to danielthomashind.com H I N D, that's Daniel Thomas hind.com and sign up before Spotsville. What if you got your mortgage loans the same place I get mine? You sure can at Ridge Lending Group, NMLS 42056 they provided GRE listeners with more loans than anyone, because Ridge specializes in investment property. They'll help you build a long-term plan for growing your real estate empire with leverage. Start your pre-qual, and even chat directly with President Caeli Ridge, while it's on your mind, start at ridgelendinggroup.com that's ridgelendinggroup.com
     
    Keith Weinhold  2:07  
    Flock Homes helps multifamily owners exit the operator grind, whether it's your six plex or a 50 unit apartment, through a 721 exchange. This defers your capital gains tax. It's a strategy long used by institutions. Now you can swap tenants and toilets for passive income and zero management. Request your initial valuations. See if your property qualifies at flockhomes.com/gre That's F L O C K homes.com/G R E.
     
    Speaker 1  2:40  
    You're listening to the show that has created more financial freedom than nearly any show in the world. This is Get Rich Education.
     
    Keith Weinhold  2:56  
    Welcome to GRE, from Keene, New Hampshire, to Kenai, Alaska, and across 188 nations worldwide, I'm Keith Weinholding. You're listening to Get Rich Education. Everybody knows that a mortgage rate is the interest rate that a borrower pays on a property loan. Okay, sure, that part is easy. And then, oh boy, the misunderstandings begin about eight seconds later, where will mortgage rates be in 2030 I want to tell you about this and more, because mortgage rates are one of the most talked about parts of real estate, and people discuss them with this confidence and bravado of a guy at a semi quincentennial barbecue that's explaining crypto and nutrition between bites of potato salad, yet he's probably got a lot of things wrong. In the next few minutes, though, you're gonna know more about mortgages than 99% of Americans. Let me tell you about five Goliath mortgage myths that throw a lot of people off, and this includes what mortgage rates are going to be, both next year and in 2030 The first myth is that mortgage rates are high today. I almost can't believe the number of people that say this in the world that I'm in. I hear it almost every day. The reality is that mortgage rates have normalized. The 30 year rate is currently normal to low. Now, I shared with you before that the long term average is 7.7% per Freddie Mac. They have the best, most respected stat set on historic mortgage rates, and theirs go back to 1971 Well, today's rate is between six and 7% They just don't feel low after the freakishly low era about five years ago. Now, after I tell you about mortgage rates in 2030 I'll tell you also about whether we're ever going to go back to the. 3% mortgage times. Understand, it's not just mortgages, but most other interest rate types are also on the low side today. A lot of rate types are based on the effective federal funds rate. What's based off of that are rates for credit cards, HELOCs, some business loans and personal loans, they are all based on the prime rate, which is based off of the federal funds rate. Well, the federal funds rate's long-term average is 4.6% Do you know where they're at today? 3.6% So, the fed rate is fully 1% below the long run average. The second myth, gosh, and this is such a pervasive one too, is that when mortgage rates rise, home prices fall. This is such a myth, and because I've talked about this premise before, let me bring some fresh angles to it for you today, with some historical accounts too, because the reality is that when mortgage rates rise, home prices usually rise right along with them, but sharply rising rates can slow appreciation, and before we move on, one of the most famous, I suppose, American real estate investors ever. He spoke about mortgage rates recently. Let's see what he says. This is under a minute in length. Oh, and he also happens to be the current White House occupant.
     
    Donald Trump  6:34  
    I made billions of dollars with housing. I know housing better than anybody, maybe anywhere. It's all about the interest rate. Lower the interest rates. You can have all the housing you want, but you have to understand, I don't want to have - I don't want to hurt people that own houses, too. These people, for the first time in their lives, they have valuable houses, they become rich. I don't want to hurt them either. What you want to do is what's good for everyone? Get the interest rates down. We have this num skull that was the head of the Fed before, and he's a stupid person, and we call him too late because he was too late with the interest rates all the time. We need low interest rates. Low interest rates will solve everything, will solve that.
     
    Keith Weinhold  7:18  
    Well, lower interest rates don't solve the main problem, though. We need to build more housing no other than the fact that low rates could make it a little easier for builders to finance their operations. Lower mortgage rates do nothing to increase the housing supply, and, contrary to what most people think, rates have exceedingly little to do with home prices. When mortgage rates blew past 18% in 1981 they were between 18 and a half and 19% Then, what do you think that home prices did? Well, they kept on rising right through it since 1994 Mortgage rates rose 1% or more six different times, and home prices went up all six times. Even when mortgage rates tripled three years ago, home prices still climbed on a nominal basis. How do they do that? Well, the short version here is that we've got to think about what's happening in the larger economy when rates rise. What does that mean? What does that signal? What is that a symptom of rates rise to keep a hot economy from overheating, and when the economy is hot like this, that usually means people are employed and they're confident and they're financially flush, so then what do they want to do? They want to buy a home, and therefore there are more bidders. That's why higher rates usually lead to higher home prices, and they're talking about raising rates again, because employment has been resilient, and inflation is more than double the Fed target. All right, well, if higher rates usually correlate with higher home prices, then do lower rates mean lower home prices, no, because nominally home prices rarely fall at all. Now, what then did rates do when real estate prices had a rare national fall in those years around the 2008 global financial crisis? Do you know? Do you know what mortgage rates did then? Do you think that mortgage rates were up or down during the global financial crisis? And this is a definitive answer. There's no gray area. They were clearly either boldly up or boldly down. What do you think during the global financial crisis? Mortgage rates plummet. Did more than 2% so the only time since the Great Depression that national home prices fell substantially, mortgage rates also fell substantially. 
     
    Keith Weinhold  8:05  
    The problem in that era, around 2008 is that you often could not get a loan, banks were barely lending, man. People overlook this. You can't just assume that you can get a loan whenever you want it, even if you qualify. But yeah, it's just amazing how many people believe this. I guess second myth. I mean, it is one of real estate's most persistent fairy tales that when mortgage rates rise, home prices fall, that just doesn't happen. And gosh, it feels like I explain this to somebody every week, that when mortgage rates rise, home prices usually do too. If you explain this phenomenon to somebody, I think what you can tell them is that history shows, and as I like to say, take history over hunches. History shows that mortgage rates don't have much to do with home prices. The, I guess, third mortgage myth out of five is that the Fed sets mortgage rates. The reality is that they don't, and you probably already knew about this one, because you're unusually sharp, and you're listening to this. Mortgage rates are more closely tied to the 10 year treasury yield, and inflation expectations, and bond market demand, and lender spreads, and the appetite from investors for mortgage-backed securities, and even your credit score, that's what mortgage rates are tied to. The fourth one here is that you should wait for mortgage rates to fall before buying, and the reality is that maybe you should, but usually not. And again, we can look at history here almost every time you look back at when you purchase property and how much property you owned when you added it into your portfolio, there you know. Do you ever think, oh gosh, I sure would have been better off had I waited two years. Now, if you do wait two years, what happens? Prices will almost certainly be higher, and you don't know where mortgage rates are going to be. Run the numbers, and you'll probably see that waiting is not the free lunch that some people think it is.
     
    Keith Weinhold  9:13  
    The main problem with waiting is that it delays how the real wealth gets created from the five ways real estate pays, and to my earlier point, if you do wait, you're probably still going to be able to get a loan, but mortgage markets can seize up in times of distress, and you might not be able to get a loan at all. A lot of people just assume that credit is always going to be available. We don't know that for sure. Now, let's take a look at my most ill-timed real estate purchase ever, since we're talking about timing, and this is when I bought a green fourplex building in May of 2007 right on the precipice, just as we were about to tilt in to the global financial crisis. I paid $530,000 for this property. It was pretty nice, like not a beautiful building, but just a good setup where every tenant had their own attached one car garage in that building. Okay, so I did not wait, and by the way, this was a big purchase for me at the time. I mean, 530k perhaps that's about a million dollar purchase in today's inflation-adjusted terms. Back at that time, that was my biggest property yet, until I got into larger apartment buildings and other single-family homes and things like that. But what happened just after I bought this in 2007 Well, that green fourplexes value temporarily went down, and during this time I was paid the other four ways that real estate pays. Rates fell during the global financial crisis, so I had a refinance opportunity, and then that green fourplexes value had fully recovered by about 2012 or 2013 and it paid me positive cash flow every single month that entire time, and that's it. That was actually my worst timed purchase ever. That scenario, the worst mortgage conditions in anyone's lifetime, and it still wasn't so bad. Well, here's what else happens with the strategy of waiting for rates to fall. When rates fall, more buyers tend to rush in, and because you've got more buyers that qualify for a. Mortgage that didn't qualify previously, that means more competition. There are fewer seller concessions, if any, and there are higher prices. It might even create bidding wars, somewhat like we had in 2021. 
     
    Keith Weinhold  9:13  
    The last of the mortgage myths is that mortgage rates can be predicted, so you had better pay close attention to forecasts. Oh no, the reality is that trying to predict mortgage rates is about as predictable as to whether your contractor is actually coming on Tuesday. Let me tell you, all right, what the prominent analysts and agencies have to say about the future of mortgage rates, amalgamating forecasts from Fannie Mae, Wells Fargo, the Mortgage Bankers Association, a Reuters poll of economists, and more. By the end of next year, okay, so about 18 months away, they all cluster in a range of 6.2 to 6.5% This is for the 30 year fixed rate mortgage by the end of next year, and for 2030 it is about 5.8% That's what we're looking at for crystal balls of all these agencies, if you average them together, and you know what I have to say about these numbers, don't count on these at all. These people do not know, nobody does, they'll probably even tell you that they don't know. Okay, they are your forecasts right there. And what about us here? GRE does not make mortgage rate forecasts. We only make a home price appreciation forecast annually, and we are not about to make mortgage rate forecasts here. That is because they're just really hard to predict, and therefore that would not serve you. It's really just a form of entertainment that's a poor use of your time. It doesn't serve you. Making a bold mortgage rate prediction is exactly how economists audition for humiliation.
     
    Keith Weinhold  17:14  
    Mortgage rates, future direction, that's based on so many factors, like inflation, jobs, treasury yields, deficits, geopolitics, oil prices, and wars, and the future direction of mortgage rates has to do with investor sentiment, which often changes and often doesn't make sense, and whatever new fresh economic surprise is going to wander in tomorrow, and you know, I'll tell you, when I was a pretty new real estate investor, and I had a property under contract, I remember sometimes asking my mortgage loan officer over the phone, now, do you think that mortgage rates are going to be lower next week, because maybe then I should wait and lock in. I mean, that's a question I asked a number of times. I mean, sheesh, it would have been just as useful if they answered by reading me their horoscope. Now, that is not a knock on mortgage loan officers in any way. They're smart people, but they just know the borrowers do want some insight, but it's just so hard to forecast now that you know that most forecasts base around 5% mortgage rates in 2030 which is useless information. Will rates ever be 3% again like they were about five years ago? There is no forecast by any of these agencies that predicts a 3% mortgage rate at all in the next five years, but you know, really, you have to ask, Who saw that there would be such low home loan rates on the horizon back in 2007 and things like the Great Recession and a global pandemic, you know, those sort of black swan events, they're just rarely, if ever, on the radar, and see drastic events like that are what it takes to move mortgage rates down into the seller, but a couple things are for sure, 3% mortgage rates anytime soon are extremely unlikely, and if that does happen, it probably means that there has been a real world calamity. Okay, that's what I can tell you. 
     
    Keith Weinhold  19:31  
    I've got more to tell you here, but to summarize what you've learned so far today, in this era, rates of all types are historically a little low, contrary to popular belief, mortgage rates have little to do with home prices. Waiting for rates to fall rarely works, and mortgage rates are nearly impossible to predict. And my favorite way to make it easy for you to remember how interest rates move in an account. Economy is that they are like walls. A high interest rate is like a high wall. It's an impediment to the movement of money, because people are less likely to borrow and more likely to save, since savings accounts yield more. And then a low interest rate is like a low wall that you can easily just step over it facilitates the movement of money, making you more likely to borrow and less likely to save. And if you want to understand more about how interest rates move economies and affect real estate, and you like analogies like that, I discuss more about how interest rates are like money walls in the latter portion of GRE episode 573 I've got so much more for you today. Straight ahead, I'm Keith Weinhold. You're listening to Get Rich Education. 
     
    Keith Weinhold  20:53  
    Flock Homes helps you retire from real estate and land learning, whether it's one problem property or your whole portfolio through a 721 exchange, deferring your capital gains tax and depreciation recapture. It's a strategy long used by the ultra wealthy. Now, mom and pop landlords can 721 through residential real estate. Request your initial valuation, see if your properties qualify at flockhomes.com/gre that's F L O C K homes.com/G R E. Let me ask you something. If you've worked hard to build wealth, is your money positioned to actually support your goals? A lot of accredited investors leave capital sitting in cash because it feels safe, but inflation and missed income opportunities can quietly erode its value. Freedom Family Investments offers freedom notes for investors seeking structured income backed by real estate. It's a straightforward approach built on real assets, not speculation. In full disclosure, I'm an investor myself. What I like is that their team walks you through how it all works, so you can decide if it aligns with your portfolio and income goals. Every investment carries risk, and nothing is guaranteed, but with a track record of consistent on-time investor payouts, they built real credibility.
     
    Keith Weinhold  22:14  
    Go to Freedom Family investments.com to book a clarity call, or text family to 668 66 That's that's family 266866 This is Rich Dad Advisor Tong Wheelwright. Listen to Get Rich Education with Keith Weinhold, and don't quit your daydream. Keith, welcome back to Get Rich Education. I'm your host, Keith Weinhold, and let me help you with a couple questions that some of you have had, and when listeners or followers like you engage with us, whether that's through our general inbox or our investment coaching, or even my face-to-face interactions with people. Sometimes I hear something like, "Hey, well, I am waiting for the crash until I build my real estate portfolio. Now, I don't know how to take this always. Sometimes I think people are joking. Other times I actually think that they are serious, and see what happens is that an awful lot of media creators, they will produce a video or a blog or a podcast, and they like to talk about how a housing crash is imminent because that type of material really gets attention, words like crash and collapse, they're hype words, and these hype words like crash and collapse, they really play on people's very real primordial survival instincts that are produced in your brain's amygdala, that's why people keep consuming them, and it's also why fear-producing media gets lots of attention. I mean, it's the if it bleeds it leads phenomenon, you know. In fact, I have one real estate pro friend, and he's told me that if instead of talking about real estate logically and with an education bent in the way that I do here at GRE, well, instead if I flip that and I talk about doom and all the improbably bad things that could happen that could make my material so interesting that it would create a following so big that would transcend real estate circles, and I'd be a regular on whatever CNBC and The Joe Rogan Show. This friend somewhat jokingly suggested that with the way I use the pre. Frontal cortex to discuss real estate. I should speak from the amygdala instead. I could become a doomer, a crashaholic, an appreciation denier. And by the way, the prefrontal cortex is the sort of executive brain. It helps you think things through, compare options, solve problems, make plans. Ask yourself the question, is this actually a good idea? Logically, it's the logical part of the brain. 
     
    Keith Weinhold  25:33  
    Oppositely, the amygdala, that's what tells you something feels dangerous, I better react now. And your prefrontal cortex tells you, hold on, let's think this through. It's what's logical, and you know, though, this is what we've always done here, the logical, because scaring you is not serving you, it's only entertaining you. In fact, lately, there are even some people that were calling for a home price decline that no longer are doing so, and the NAR just revised their home price appreciation forecast this year up to 4% and then the other piece is that I've received more feedback recently from listeners about something that you're trying to grasp, and that is the concept of inflation profiting on your debt, which I've always presented as the fifth of five ways that you're simultaneously paid through real estate, and really the feedback it goes something like this: I don't see where I'm profiting at all if I borrow 100k on a mortgage, and then 10 years later I still owe 100k because I still owe 100k So, how is this getting me ahead, even if the tenant pays all the interest? Really, that's the question. And before I answer that, you can always reach out to us at our general inbox at Get Rich education.com/contact How do you contact us? Get rich education.com/contact where we have a real human being here at GRE monitoring the inbox for you, and oftentimes we also get comments on our videos at the Get Rich Education YouTube channel, so that's a less formal feedback mechanism, but if you're trying to grasp inflation profiting, think of it through the opposite lens. What if you put 100k in cash under the mattress, you slid it under there, and you left it there for 10 years, and then you unearthed it. Well, you probably wouldn't want to do that. Why not?
     
    Keith Weinhold  27:49  
    It's still 100k We all know full well that, because at 3% inflation over 10 years, it will get worn down to about 74k of purchasing power since prices and rents and everything else is now higher. Well, in a similar way, 100k in debt after 10 years is still 100k same name, but it will only have 74k in real value. That is the way to think of it. The saver lost purchasing power, the borrower gained repayment power. Hopefully, those two persistent questions about a housing crash and about inflation profiting gave you some satisfying answers. And you know any more, so much of what we've discussed with you here every week since 2014 it is now in view, or actually it's not even in view as much as you are living inside it, that hollowing out of the middle class represented by the K-shaped economy, we are living in it, and when I told you about it, perhaps a decade ago, I was not using that term, K-shaped economy. However, that term was born in 2020 and it was popularized on Twitter back then. When we had our big wave of inflation five years ago, the asset owners recovered, if they ever suffered at all, they're the ones on the upper branch of the K, and the middle class and lower class that do not own assets. They were not able to recover, and inflation makes their standard of living sink lower. Where we're at today is that the top 10% of US earners now account for fully half of all US spending. Well, how much time do you have if you haven't yet? How much time do you have left to build your portfolio to make sure your trajectory has you on the upper branch of the K, not the lower branch? Rich, five years, you only have five years left to get rich, all right. Now that's not my answer, but that's what Andre G says, and I like some of his material, and I don't know if I'm saying Andre's name correctly, but according to him, the reason that you only have five years left to move economic lines trajectories to move from the K's lower branch to the upper branch is because of AI. You've got five years to learn a skill, start a business, or invest in real estate. The reason why is that upward mobility comes from finding efficiencies where you can make things better, but artificial intelligence makes things so much faster and more efficient, so that gap between the way things are right now and the way they will be in the future is going to close. 
     
    Keith Weinhold  30:56  
    AI compresses that gap to almost zero, because when everyone can use AI to build websites, write code, analyze markets, automate workflows, whatever it is, is because it becomes really easy for anyone to do anything, and it becomes a lot harder to move from the bottom of the K to the top, so for those at the bottom, there are fewer inefficiencies to solve and get ahead, and this is why the saying "the rich get richer and the poor get poorer" has the propensity to speed up. So, what can you do? I've described elsewhere about how stocks are not a wealth building tool, they're a wealth preservation tool. If you already have wealth, stock price to earnings ratios are bloated. It's good to select an asset or business that's hard to be replaced by AI, and then get good at that thing, like HVAC, plumbing, pest control, electrical, roofing, masonry, or investing in real estate be in a niche that AI is going to have a hard time replacing. Just buy some rental houses, and here at GRE, we talk about optimizing the five ways that you're paid all the time. Buyers who are waiting for 5% mortgage rates, you know, they're a little like people who refuse to buy gas at $4 because they remember $2. Okay, those days are not coming back. The market rewards action, not nostalgia. Actually, you can get 5% mortgage rates today through our GRE investment coaches, because we know the builders that are buying them down to that level for you.
     
    Keith Weinhold  32:54  
    Now, do you realize that even with zero appreciation and zero cash flow on a property, you're probably still going to win bigger than stocks in their average returns of 10% That's right, even if you get zero appreciation and zero cash flow on a property, because with a historic average from your ROA, from your tax benefits, and inflation profiting alone, that's a 14% total return, just using today's mortgage and inflation rates. A 14% return, even with zero appreciation or cash flow, you're probably going to have more than zero from those. This is why we do what we do here, and you're owning your own deal, your own rental property, and you don't have to be the manager. I'm talking about your own and emphasizing that because a lot of investors got burnt recently because they said, "Oh, I'm going to invest in this influencer's deal, he's pooling all this money together for a deal. Instead of that, you can invest in and control your own deal without having to be the day-to-day manager. Those that bought property through our GRE marketplace with our coaching a few years ago, they are rich today. We had a number of those listeners come right here on the show last year, and joined me for an episode, and you heard some of them say, "Here is what my life is like now. They got on the upper branch of the K, they turned get rich education into got rich education, and it's not just for beginners, you know, we also have listeners that booked a free coaching session with us, and they gave real estate another shot after their first attempt at real estate investing failed, and that's because here they got a coherent strategy from a GRE investment coach, and then they got the outcome. It's actually pretty straightforward. Here's how it works. Our coaching actually understands this business because they work with investors like you every single day, and we are investors ourselves. What they do is they sit down with you, probably virtually, understand your situation, your goals, your timeline, where you're at financially, what your preferences are, what your concerns are, and they ask you the right questions. They listen, and then they show you what's actually possible, given your specific situation. A big difference between what we do and what a lot of others in the business do is that we are focused on your big picture strategy. 
     
    Keith Weinhold  35:44  
    See, we're not attached to any one market. Take local agents and local operators. Now, those people can be helpful, but they're clearly incentivized to have you buy whatever their product in their geographic market is well, RGRE investment coaching doesn't have that conflict of interest, and that's why, for free, our followers have such a good success rate in making sure they occupy the upper branch of that K. To find what's best for you, we'll walk you through different markets, different property types, and different strategies, depending on what makes sense for your situation. And it's truly free. There's no weird pleading to have you do something else. We don't try to sell you some paid coaching program or anything else like that. In fact, if you want to buy something from GRE, you simply cannot do it, because we don't even have anything for sale in almost any other industry. You would have to pay to talk to someone this knowledgeable, but you'll know more when you hang up than when you called. So, if you're ready to add real income-producing property to your portfolio, that's exactly where we can help, but it's more than that. If you want, come away with a plan to retire in five to 10 years, because it's about a total strategy. You are cordially invited. You can book a free coaching call at GRE Investment coach.com Until next week. I'm your host, Keith Weinhold. Don't quit True Daydream.
     
    Speaker 1  37:28  
    Nothing on this show should be considered specific personal or professional advice. Please consult an appropriate tax, legal, real estate, financial, or business professional for individualized advice. Opinions of guests are their own. Information is not guaranteed. All investment strategies have the potential for profit or loss. The host is operating on behalf of Get Rich Education LLC exclusively.
     
    Keith Weinhold  37:56  
    The preceding program was brought to you by Your Home for Wealth Building Get Rich education.com.
  • Get Rich Education

    612: Here's When the Average U.S. Home Will Hit $1 Million

    29/06/2026 | 43 mins.
    Keith explores when the U.S. median home price could realistically hit $1 million and what long-term drivers like inflation, construction costs, and housing scarcity mean for investors. 
    He reveals the hidden issue of America's aging housing stock, explaining how outdated and inadequate homes quietly distort inventory data and reshape opportunities for renovation and build-to-rent strategies. 
    Keith also draws lessons from former Fed Chair Alan Greenspan and unpacks why some of the "worst" high-crime cities can still offer strong rental fundamentals, helping listeners think more clearly about risk, market selection, and long-term wealth building through real estate.
    Episode Page:
    GetRichEducation.com/612
    For access to properties or free help with a
    GRE Investment Coach, start here:
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    or e-mail: info@RidgeLendingGroup.com
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    For predictable 10-12% quarterly returns, visit FreedomFamilyInvestments.com/GRE or text  FAMILY to 66866 
    Unlock truly passive real estate income—visit flockhomes.com/GRE today to see if your properties qualify for a 721 exchange with Flock Homes.
    To get in the best physical, mental, and professional shape of your life, go to DanielThomasHind.com and apply for Daniel's intensive 1-on-1 coaching for burnt-out entrepreneurs and executives.
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    Complete episode transcript:
     
    Keith Weinhold  0:01  
    Welcome to GRE. I'm your host, Keith Weinhold. When will the median US home value hit the $1 million mark? I have the best answer for the exact year that it will happen, and it's probably sooner than you think. Also, there's a big hidden problem in America's housing market today, and no one is talking about it. It's not prices, mortgage rates, affordability, nor is it inventory. I'll tell you about it and more today on Get Rich Education.
     
    Speaker 1  0:30  
    Since 2014 the powerful Get Rich Education podcast has created more passive income for people than nearly any other show in the world. This show teaches you how to earn strong returns from passive real estate investing in the best markets without losing your time being a flipper or landlord, show host Keith Weinhold writes for both Forbes and Rich Dad Advisors, and delivers a new show every week. Since 2014 there's been millions of listener downloads of 188 world nations. He has a list show guests and key top-selling personal finance author Robert Kiyosaki. Get rich education can be heard on every podcast platform, plus it has its own dedicated Apple and Android listener phone apps. Build wealth on the go with the Get Rich Education podcast. Sign up now for the Get Rich Education podcast, or visit getricheducation.com
     
    Keith Weinhold  1:14  
    You know, Mid South Home Buyers, that top Memphis turnkey provider, I learned that a secret weapon behind their explosive growth is more than just you buying their properties. It's an executive coach for nine years now. Their CEO, Terry Kerr, and his COO, Pat Nix, have worked privately with a coach who I've now learned from too, and he doesn't market himself online anywhere. After 12 years behind the scenes, that coach is now making himself available exclusively for GRE listeners, his name is Daniel Thomas Hind. If you're a hard-charging business owner or investor who wants to get in the best shape of your life, physically, mentally, and professionally, you can fill out an application for a free consult. This is private one on one coaching for those willing to go to uncommon lengths to achieve uncommon results. Thanks to Daniel, we've all become better leaders, better operators, and better men. It started by showing up for ourselves. Now it's your turn. Go to danielthomashind.com h i n d, that's danielthomashind.com and sign up before Spotsville Flock Homes helps multifamily owners exit the operator grind, whether it's your sixplex or a 50 unit apartment through a 721 exchange. This defers your capital gains tax. It's a strategy long used by institutions. Now you can swap tenants and toilets for passive income and zero management. Request your initial valuations. See if your property qualifies at flockhomes.com/gre that's F L O C K homes . com / G R E.
     
    Speaker 2  3:00  
    You're listening to the show that has created more financial freedom than nearly any show in the world. This is Get Rich Education.
     
    Keith Weinhold  3:16  
    You're listening to One America's longest running and most listened to shows on real estate investing, not flipping, not speculating, not whatever the latest hot thing is, but prudent long-term real estate investing. This is Get Rich Education. I'm your host, Keith Weinhold. You've got to believe that you were not put on this earth to live a mediocre life and waddle in the safety of mediocrity. Your investing should be a reflection of that. You've got to believe that you can obtain financial freedom when you're young enough to enjoy it. What would be the point of deferring financial freedom until you're old, like, what would that point even be? I mean, just imagine a rich elderly version of you. It cannot buy youth. Youth cannot be bought. Look, right now, if someone offered you $20 million to be age 85 tomorrow, the probability that you would take it is pretty much zero. So then build sustainable, durable wealth now today, and with a sense of urgency. That's what we're doing here. A $1 million national median home price. When do we get there? Well, back in 1990 the median national home price was about 120k and you know, funny as it sounds, you can read about how back in 1990 people thought that homes were highly priced, even overpriced, and that maybe they'd need to start. Going down, why was that? Well, just three years earlier, in 1987 they crossed over 100k for the first time. So psychologically, six figures for a home price, that was still a fairly new phenomenon. In 1990 mortgage rates were 10% then for a 30 year fixed rate loan, and by the way, 10% mortgage rates didn't feel too bad to homeowners and real estate investors in 1990 because as recently as 1984 they were 14 and a half percent. Roll it back a little earlier to 1981 and mortgage rates were over 18% then, and of course, mortgage rates are a friendlier six to 7% today, but remember we're talking about home prices here, and when it comes to the trajectory of home prices, rates are really just trivia, because as I've discussed here on the show for years, to many people surprised, mortgage rates have almost nothing to do with home prices, contrary to popular belief, but to those people in 1990 that were still somewhat freshly getting used to six figure prices that were now 120k at that time today's median home price of 429,000 to $300 would have sounded as absurd as paying $18 for airport trail mix and $24 for airport beef jerky, yet here we are. 
     
    Keith Weinhold  6:36  
    All of those prices are true. That's where we are today, all right. Well, from 1990 till today, home prices have nearly four exed. So, with that backdrop from recent history, what about a million dollars? When do we get to that point? Well, home prices only need to go up about 2.3x from here. Yogi Berra said it's tough to make predictions, especially about the future, and I want to credit Dr. Lawrence Yuen, any our chief economist, for doing this analysis and sort of getting this conversation started, because when we look at the national median home price hitting million dollars, this forecast assumes zero price growth for this year, although home prices are now up 1.8% year over year. Here we go at 3% price growth from today, we get to a million in 2056 at 4% it's 2049 at 5% price growth, it's 2045 and it's 6% home price growth, it's 2042 and that's just 15 and a half years away. One part that I really want to credit Dr. Yoon for is that if you take the actual price trend from the last 25 years with all of its ups and downs, which also gives you an average annual gain of four and a half percent, by the way, and you project this into the future, that path reaches $1 million in 2048 just over two decades away, so taking the past quarter century, then, and extrapolating it into the future means we hit a million dollars in just a little over 20 years. So, therefore, perhaps the most prudent and sensible projection gets us there in 2048 But look, it's easy to make the case that growth is going to be on the higher side of these estimates, I mean, just look at what's going on now.
     
    Keith Weinhold  8:45  
    Already, inflation is over 4% and there are all kinds of forces that are poised to push that inflation rate higher. I've talked about those in recent episodes. Today, 42 out of 50 states show annual home price gains. Near-term sparks to more home price growth are energy and material price volatility from tariffs and wars, which are poised to push up the replacement cost of homes. And you know, when your property's replacement cost rises, all capital values tend to rise as well. There's also pent-up demand and still paltry supply in most US regions. I'll get to that, but regulatory costs alone are now $132,000 for a new single-family home. You heard that right? Yes, the cost of zoning and other regs is now 132k and that figure is sticky. That does not tend to come down, and then you've got these longer term bonfires, not just the short term sparks that I mentioned, but the longer term bonfires that could make million dollar median home. Dollars occur before 2048 This construction of data centers and all the resources that it takes, and chips, and copper, and electricity, that's all inflationary for our society. When we're building that infrastructure, our currency will keep getting diluted to deal with huge debts like defense and social security payment commitments and interest payments themselves, I mean that part is plain as day new household formation that's expected to push up demand until at least the late 2040s and after that demographically things could turn, but the base case remains 2048 here for the million dollar median home, so this million dollar mark, you know, it's not some sci-fi housing fantasy where your realtor shows up in a flying car, okay, values are already approaching a half million, and this figure of a million that is just 1000 1000, it's not some incomprehensibly gigantic number that's shooting for the moon and the stars, so really the bottom line here is that a million dollar median national home price is an almost inevitable destination and is being pushed up by appreciation, inflation, replacement costs, and scarcity. 
     
    Keith Weinhold  11:25  
    The real question is not whether this happens, but it's when it happens. That's why I gave you the year of 2048 as the base case. I want to talk more about housing scarcity shortly, but first, for some historic perspective, do you want to know how much my parents paid for their home in 1974 I thought I knew the figure, but I wanted to check with Dad, and he let me know, and it was what I thought. All right, first, I think I've shared with you before that my parents still live in the same Countersport, Pennsylvania home, the old smallish Victorian style home built in 1917 They've lived in that continuously since Richard Nixon was our president. And you know, when I go visit my parents, I get to sleep in the same bedroom that I have since I was an infant, just amazing. Also, do you know that that home where I grew up, and they still live in.. Do you know that home is location? Do you know where that location is? On what I'll call the urban to rural spectrum, it's interesting. The home is not in a city, it's not in the suburbs, it's not in the exurbs, it's not in the country, and it's not in a planned community either. What's left? Do you know where it might be? Maybe you're thinking too hard. It is in a small town, that's the answer. A small town with a gridded street pattern and Main Street, that's called Main Street, and old brick businesses. It is a standalone community with its own identity and a really slow pace of life. Its population was about 2600 at the turn of the century, and it's down to about 2100 residents today. And Cowder Sport, Pennsylvania, is a remote place, it's over two hours to the nearest international airport in Buffalo, New York, and there really aren't that many flight routes out of Buffalo either. So, for that detached single-family home that does have a big yard, my parents bought it in 1974 for $20,000 exactly 20k and they quickly got that home paid off back in the day, about 58 years ago.
     
    Keith Weinhold  13:48  
    The only financing they had, it wasn't a mortgage in the traditional sense, rather my mom's parents gave them a small loan to put toward that 20k and it was an interest-free loan, and the seller kind of gave them my parents there this adjacent grassy lot, practically free. The person that sold it said they didn't feel like mowing it. That wouldn't happen today. Real estate is just more coveted and calculated, I think. It'll just go throw in a lot, and you can guess who had to mow that adjacent grassy lot more than a few times? Yours truly. And hey, I might even mow it again this year when I visit my parents, and my dad listens to this show, and he sure hopes so. It's not a bad looking home today. I definitely did not grow up dirt poor, but just modestly, there was only one bathroom for our family of four that we all shared, and yes, what this meant was patience, timing, and the ancient art of knocking on the bathroom door with urgency sometimes, and we all took baths only until I was age eighteen, there was just simply no shower until then. We all shared one car, a Subaru station wagon, definitely not deprived in a great childhood, just living modestly. Well, today's median home price is now 22 times the 20k that my parents paid for their home in 1974. Homes in countersport are a lot cheaper, so maybe it's just 12x there. But see, the point is that the home doesn't have more utility because it doesn't have any more than the same three bedrooms today. It's got about the same amount of usefulness they did add a second bathroom. What happened is that our currency has just debased enough to be worth about 1/12 as much as it was in 1974 That's why the price is up 12x Before I get to national housing scarcity factor, maybe you've always wondered where I get my abundance mindset from, since I grew up in a small simple remote place, I'm not sure it's just an internal confidence gain from somewhere. Sometimes I wonder if where I grew up actually contributed to growing my means rather than living below my means, because at some point subconsciously I might have thought before that, you know what, if I fail big in life, then I could always move back to old counter sport and own a decent home for just 200k in a town where I know people, maybe it worked that way, and I moved away from that home for good at age 23.
     
    Keith Weinhold  16:44  
    By the way, that's when I left the nest. As you know, I like to say the most important thing here is that I won the parent lottery - decent, stable married parents. That means considerably more than inflation or economic factors ever could two grade A parents now getting back to housing's scarcity factor. Did you know about what's happening with the available inventory of homes now after four years of rising supply? The inventory trend has flipped. There are now fewer homes for sale nationally than there were a year ago, and this has really thrown off some forecasters that thought inventory would climb about 10% this year. Instead, we have fewer one to four unit properties on the market today than we did last year. This matters because it could signal the next phase of the housing market, it's important to identify these inflection points right here, if it truly is one, because shrinking inventory, that means fewer options for buyers, more competition, and eventually upward price pressure, if the trend holds, but that's not here yet, we haven't seen home prices really take off. A decade ago, there are about one and a half million available homes. The pandemic low in 2022 is where we hit a jaw-droppingly low, 350,000 available homes. I mean, really scraping the bottom, those were the days when there were 40 people in line to see one open house, that was nuts.
     
    Keith Weinhold  18:28  
    Okay, from those scarce, scarce days that has rebounded to 1.1 million available homes the past year or two, and this year it stepped back a little to about 1 million available homes for sale in this nation, so bigger picture today we have 30 to 35% fewer homes available now than we had a decade ago, and remember we've also got to account for the fact that we've had population growth since that time as well, that's why demand continues to exceed supply, so really the housing shortage is a little worse whenever you factor in population growth. So this really speaks to the scarcity, and so does something else here. And there's a big hidden problem in America's housing market today, and nobody, like no one is talking about this, it's not prices, it's not mortgage rates, affordability, nor is it inventory, it's the fact that America's housing is aging with the median now 45 years old, that's older than America's homes have ever been, and 45 is also about the median age of a TikTok user's parents, I think. Now, an 80s built home isn't exactly ancient, but this really factors in here. Now, in Buffalo, Pittsburgh, and Cleveland, the typical home predates 1960 in Austin and Raleigh, it. Is post 2000 so it feels like the Northeast is replacing avocado green appliances, and the Southeast is just replacing Ring camera batteries, because, as you'd expect, fast growth areas have a young housing stock like Florida and Texas and Tennessee to a lesser extent, and at the beginning of the month, I sent our newsletter subscribers this terrific national map that shows the median age of homes by city, a rare map that's pretty fascinating, and in fact, the oldest homes in the nation are in Elmira, New York. They are about 70 years old, not far from where my parents live in Countersport, Pennsylvania, and this is such an under-discussed part of the housing shortage. See, a market it can technically have what seems like available inventory, but still not actually have habitable, financeable, insurable, affordable housing, and older housing stock that creates friction with repairs and appraisals and insurance and affordability. 
     
    Keith Weinhold  21:10  
    Harvard's Joint Center for Housing studies found that 3.6 million renter households, that's 8% live in inadequate housing with problems in multiple structural deficiencies like water leaks or serious problems with electrical HVAC or other systems, and this is a real threat to NOAA housing. Are you familiar with this term, NOAH? NOAA stands for Naturally Occurring Affordable housing, and it means properties that are affordable purely due to free market conditions, not public funding. What's interesting is that America isn't just not building enough. See, we're also retaining a lot of older homes longer than generations past did in the mid 20th century, what cities routinely did is that they demolished obsolete housing, and they rebuilt aggressively. Today, that just doesn't work in most places. Replacement happens slowly, because of higher construction costs. In this not in my backyard bickering, and zoning restrictions, and labor shortages and environmental rules. I mean, it just doesn't work that way anymore. Now, here at GRE, we introduce you to providers across the nation that do deep, extensive quality rehabs, but much of America, they just kind of keep patching their homes like it's a 1998 Honda Accord with 280,000 miles in three glowing dashboard warning lights, that's what they're doing, that's why the average age of the home keeps going up. All right, so what are some of the big takeaways for real estate investors with America's homes being older than ever? Number one, it's supply. America still needs more housing, even in cities with stable populations. A lot of them are going to see more units become obsolete than will get built. That's why when you see a headline like inventory is up, all right, that can be true, but it can also be misleading if it's a 1952 duplex with knob and tube wiring, and a furnace that's held together with hope and duct tape. All right, a surprising amount of America's housing stock is basically running on CPR and Lowe's rewards points. The second takeaway with this aging housing stock is that obviously more renovations are required again, that is, if you're not buying new or turnkey, so therefore states like New York, Pennsylvania, Ohio, Massachusetts, they all have busy Home Depots.
     
    Keith Weinhold  23:56  
    When obsolete properties get renovated, okay, well, then rents have to increase to support those costs, and then you know what happens a lot of times. Cynics call that process right there gentrification. Aging homes are going to be a major policy topic over the next decade. There is this tension between keeping buildings affordable and keeping them standing, you can't preserve what's falling apart, but see, then fixing it prices some people out, and then the third investor takeaway with this aging housing is yet again the arrow points here one more time, build to rent housing, yeah, new build rental homes, they're often the way to go. Usually the trade off for you is that you pay more upfront, and then you have fewer maintenance and repair costs. It usually works out for you, and today this is really tilted to your advantage, because home builders are still doing. Generously buying down your mortgage rate to perhaps 5% it depends on the builder, but this is a rare setup for you in this cycle of the market. New property, low maintenance, and mortgage rates that feel like they came from a different decade, you're getting them now. Not only is our housing aging, hey, so are we. The median age of all Americans is 39 Back in 1980 it was just 30, so this is a massive demographic shift in a short period of time. I mean, you and I are both older than we ever have been, of course, and we're both about 20 minutes older than when you and I started talking today. That is why I endeavored to make this show well worth your time. The bottom line with the aging homes is that by most measures, US housing stock is older than it's ever been. New construction has not kept up with population growth, and this is going to shape housing affordability and construction trends and investment opportunities across America, perhaps for the rest of your investor life. I need to tell you about America's worst cities for crime shortly, because it includes a lot of cities popular with investors, including cities that we frequently talk about here. So, what is going on? This is something that I've wanted to tell you about for a long time. Hey, if you like learning from me, you are in luck. This week and next week, it will be monolog episodes, just you and I together. I'm Keith Weinhold. More for you straight ahead here on episode 612 of Get Rich Education. 
     
    Keith Weinhold  26:41  
    What if you got your mortgage loans the same place I get mine? You sure can at Ridge Lending Group, NMLS 42056 They provided GRE listeners with more loans than anyone, because Ridge specializes in investment property. They'll help you build a long-term plan for growing your real estate empire with leverage. Start your prequal, and even chat directly with President Chaley Ridge. While it's on your mind, start at ridgelendinggroup.com That's ridgelendinggroup.com 
     
    Keith Weinhold  27:12  
    Let me ask you something. If you've worked hard to build wealth, is your money positioned to actually support your goals? A lot of accredited investors leave capital sitting in cash because it feels safe, but inflation and missed income opportunities can quietly erode its value. Freedom Family Investments offers freedom notes for investors seeking structured income backed by real estate. It's a straightforward approach built on real assets, not speculation. In full disclosure, I'm an investor myself. What I like is that their team walks you through how it all works, so you can decide if it aligns with your portfolio and income goals. Every investment carries risk, and nothing is guaranteed, but with a track record of consistent on-time investor payouts, they built real credibility. Go to freedomfamilyinvestments.com to book a clarity call, or text family to 66866 that's Family 266866.
     
    Speaker 3  28:14  
    This is Hal Elrod, author of The Miracle Morning, and listen to Get Rich Education with Keith Weinhold and don't quit your daydream.
     
    Keith Weinhold  28:28  
    Welcome back to Get Rich Education. I'm your host, Keith Weinhold. America turns 250 years old this coming weekend. That's our semiquincentennial, which is a word that sort of sounds like it should come with a Latin tutor and a necktie. If you live in the US, like I do, happy birthday to us. Enjoy it, celebrate it, be grateful for it. We're living through a milestone that only comes around once every two and a half centuries. Remember that, despite our differences, we still get to live in one of the most remarkable nations ever built. Warren Buffett said, No one has ever been a success betting against America since 1776 and they're not going to be a success in the future doing it either. End quote. Before I discuss the worst investor cities for crime, Alan Greenspan died last week. Let's learn from history with this long-tenured Fed chair. He served for 19 years, from 1987 to 2006 And then I'll talk about what it means to you. And I actually met Greenspan in person, just briefly, at the New Orleans Investment Conference several years ago, he led the Federal Reserve under four presidents from both parties, and really he was regarded as somewhat of a celebrity economist. He shaped economic policy during this period of massive wealth creation, again 1987 to. 2006 almost two decades, Greenspan was held for his well-timed interest rate moves to fight inflation, all while promoting economic growth, but you know, a lot of prominent economists, they also blamed his big financial deregulation for causing the 2008 global financial crisis. Greenspan and Nomics were really about entering government during the Ford administration after he co-founded a successful economic forecasting firm, and then Greenspan really became known for basing his decisions on this sort of meticulous data analysis, not textbook economics, and he ultimately gained this guru status for really capable monetary policy, including during one of the longest economic booms in the country's history, between 1991 and 2001 all years in which he reigned, and he helped engineer a swift recovery from a massive financial crash during the late Reagan administration, and he did that by slashing interest rates, and then pouring tons of money into the economy, and you know, yeah, everyone is popular when they slash interest rates and print tons of money in the short term, because that makes everybody feel really prosperous, but I think you know what that leads to. Say it with me, inflation in the mid 90s. He presided over rate increases to stem that price growth without causing a recession, and that is a tough balancing act that's known as a soft landing. Jerome Powell basically did that too, despite his faults. But anyway, later Greenspan didn't pay attention to people that wanted him to keep jacking up rates, but he got it right to hold off from doing that. 
     
    Keith Weinhold  31:50  
    There was an economic upswing because Greenspan correctly predicted that we'd have all these productivity gains from personal computers that would help tame inflation. He got that part right, and Greenspan, he was like famous for using these hard to decipher pieces of jargon known as Fed speak. I mean, it was unforgettable in 1996 when he dropped the term irrational exuberant, so that really just means these unduly escalated asset values, and he also pioneered these interest rate change announcements as a way to help guide the markets, instead of surprising everybody. But, on the other hand, you know, anyone that shapes the economy is gonna get some criticism. A lot of people said that Greenspan would just always rescue the stock market, and investors sort of knew that he would come rescue it, and that made investors make these riskier and riskier bets. He was an acolyte of libertarian Ayn Rand, and so Greenspan lobbied for this sort of light touch financial regulation during the Clinton years, and that combined with his refusal to raise interest rates and rein in subprime mortgage lenders to stamp out the housing bubble in the 2000s that's really what caused people to say that he was partially responsible for the global financial crisis. His influence definitely remains today. Alan Greenspan lived from 1926 to 2026. Now we've all seen those lists, like America's worst cities or the highest crime metros in the US, floating around on social media, in articles like Newsweeks published for decades, and everywhere in between, right.
     
    Keith Weinhold  33:42  
    It's like the 10 places where your wallet, your hubcaps, and your will to live disappear, something like that, in some form. When you consider real estate markets that you want to invest in, the quality of the area absolutely matters. A bad neighborhood. Oh, that's going to contribute to stagnant rents, flat or declining values, higher vacancy, and you'll probably attract a tenant who treats your property like it's a borrowed jet ski. All right, not where you want to be, but a faulty modus operandi is that a reader? They often see a list like this, and then they extrapolate an area's crime or their public safety issues and blankets them across an entire city. Now, one of these lists came across my desk recently, the 50 worst cities to live in in the United States, and the cities are ranked, and here's what struck me as wild, paradoxical. At least seven of the top eight cities have areas with strong investment fundamentals. Actually, so the eight worst, in order, are Detroit, Memphis, Jackson, Mississippi. St. Louis, Baltimore, Cleveland, Shreveport, Louisiana, and then eighth worst is Birmingham, Alabama. Most all of these have good investment pockets in them. Now, I've never visited Shreveport, so that's one that I can't speak to. All right. Well, what is going on here? Why am I calling them good investor cities if they all make this list, and by the way, I was born in the 34th worst on this list, Redding, Pennsylvania. One of my degrees is in geography, and I get out and see the world, and what's weird, and you'll see this over and over and over again in society throughout your life, and that is when people talk about their own city that they live in. Oh, they understand the nuance. Okay, you know your own city has posh areas and rough places and working class areas, and that city that you live in has improving neighborhoods, and it also has don't stop there for gas after midnight areas, but see, when there's another city that people aren't familiar with, or they haven't visited, well, then suddenly the entire area gets slapped with one label, like, oh, that's nice, or that place is a dump, or the world would be better if that entire city slid into the ocean. Well, that's lazy thinking. Almost every city has sections that they're proud of. And then, well, the garbage collector has to live somewhere. Take Memphis, for example. 
     
    Keith Weinhold  36:38  
    It has long been one of America's most real estate investor advantaged cities, and it is a favorable place for income property owners, because it's got landlord friendly laws, a deep base of blue collar distribution jobs, a high ratio of rent income to purchase price, and Memphis also has such an embedded renter culture that tenants appliances actually move around with them, but yet Memphis, like I said, is a dreadful number two on this worst cities list due to high crime. Okay, that's the problem with citywide statistics. Bad neighborhoods can skew stats for an entire city, in fact, since we just mentioned them here on the show last week, take a reputable Memphis-based income property provider like Mid South Homebuyers, they renovate and provide investors with property in neighborhoods like Fraser and White Haven, but wait a moment, you can easily read about crime and blight and disinvestment into these same exact two Memphis neighborhoods, Fraser and Whitehaven. That's real, and that is accurate. And simultaneously, Fraser is anchored economically by nearby world-class hospitals, a massive Amazon presence. You've got Nike's largest distribution center in the world. I mean, that's not exactly a tumbleweed economy. Drive down Fraser's Pamela Drive, and you're going to see an established leafy middle-class neighborhood, mostly built in the 60s, with these modest, well-kept properties, and you can see that if you pull up Pamela Drive, Memphis on Google Street View, and they're often three bed, one bath ranch homes, about 1000 square feet in size, with two tenths of an acre lots. I mean, everything I just described there is ideal for cash flowing rentals, driveways, lawns, normal life - it's not posh, but pride of ownership is apparent here. People mold their lawns, trash stays picked up, you see orderly cars, maybe a jogger or a baby stroller, or a neighbor watering flowers.
     
    Keith Weinhold  38:58  
    You do not see dumped furniture, no cars on blocks, no front yards that look like a failed episode of storage wars. Community stalwarts live here, like our police officers, nurses, public school teachers. So, see, there's substantial variation in investability, even within Fraser in Whitehaven, it's almost a block by block phenomenon, even within one neighborhood. So, to mentally stigmatize every neighborhood in Greater Memphis as bad due to their high crime areas is a really gross aberration. So, when one isn't familiar with an area, there's often an inclination to broad brush stroke at all. I mean, gosh, I wonder if people in Kazakhstan think that you are an abject degenerate simply for sending your child to school because they read that America has lots of school shootings. See, it's. The same principle here, and just like any provider the GRE tells you about, Mid South Homebuyers wants you to visit their neighborhoods in person. In fact, they frequently arrange investor tours and even welcome your visit so much that you'll get a $500 credit on your first property for attending the tour, they will pay you to come see Memphis effectively, and the bigger picture, national crime rates of all kinds just keep plummeting, because everybody is on their phone. Frankly, a lot of places on worst cities lists, like Memphis, they can be dangerous to invest in without a free consultation from our GRE investment coaching or a resource like Mid South Home Buyers. 
     
    Keith Weinhold  40:51  
    So, the bottom line is that investors, they don't buy a city, you're going to buy one specific house on one specific street with one specific tenant profile in one specific property management system. Micro locations are what determine your ROI, and by the way, Mid South Home Buyers has good income properties, some of them for about 200k or under 200k and right now they're offering investors their triple five program. This means they buy down your mortgage rate to 5.5% or maybe a little lower, and have a property management fee of just 5% for the first five years on every new turnkey property purchase. That is currently one of the best deals in the nation for income property. You can learn more at Mid South homebuyers.com If that sounds interesting, hopefully you've learned about real estate today and have helped clear up some misconceptions. Million dollar median homes are not some far-fetched fantasy. 2048 is my best guess as to when we reach that point. Housing is more scarce than you think, especially when you consider that America's homes are older than they've ever been, and when we look at one city's crime or demographic statistics, that broad brush strokes quite a wide area. Hey, if you enjoyed today's episode, there's a way to get more out of it for you and others, that is by telling two friends about the show, I love it when you do that, and I'm grateful for it. Text them this episode right now. Until next week, I'm your host, Keith Weinhold. Don't quit your daydream.
     
    Speaker 1  42:37  
    Nothing on this show should be considered specific personal or professional advice. Please consult an appropriate tax, legal, real estate, financial, or business professional for individualized advice. Opinions of guests are their own. Information is not guaranteed. All investment strategies have the potential for profit or loss. The host is operating on behalf of Get Rich Education LLC exclusively. 
     
    Speaker 1  43:05  
    The preceding program was brought to you by Your Home for Wealth Building, getricheducation.com
  • Get Rich Education

    611: The Success Trap: When Winning Starts Costing You

    22/06/2026 | 47 mins.
    Keith Weinhold explores why your greatest investment might actually be in yourself. 
    He's joined by Daniel Thomas Hind, an elite executive coach and former COO who works privately with seven- and eight-figure entrepreneurs and real estate investors to rebuild their health, sharpen their thinking, and strengthen their leadership. 
    He shares success stories, including Terry Kerr's transformation, and encourages listeners to apply for his private coaching to achieve uncommon results.
    Together they unpack how high achievers slip into burnout, sacrifice their well-being and relationships, and unintentionally create company cultures shaped by their own unresolved habits.
    Episode Page:
    GetRichEducation.com/611
    For access to properties or free help with a
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    Complete episode transcript:
     
    Keith Weinhold  0:01  
    Welcome to GRE. I'm your host, Keith Weinhold. On this investing show, it's been a long time since we've discussed investing in yourself. We do that today with an amazing guest on Get Rich Education.
     
    Keith Weinhold  0:15  
    Since 2014 the powerful Get Rich Education podcast has created more passive income for people than nearly any other show in the world. This show teaches you how to earn strong returns from passive real estate investing in the best markets without losing your time being the flipper or landlord. Show host Keith Weinhold writes for both Forbes and Rich Dad Advisors and delivers a new show every week. Since 2014 there's been millions of listener downloads in 188 world nations. He has a list show guests and key top selling personal finance author Robert Kiyosaki. Get rich education can be heard on every podcast platform, plus it has its own dedicated Apple and Android listener phone apps. Build wealth on the go with the Get Rich Education podcast. Sign up now for the Get Rich Education Podcast, or visit getricheducation.com 
     
    Keith Weinhold  1:04  
    You know, Mid South Home Buyers, that top Memphis turnkey provider. I learned that a secret weapon behind their explosive growth is more than just you buying their properties, it's an executive coach. For nine years now, their CEO, Terry Kerr, and his COO, Pat Nix have worked privately with a coach who I've now learned from too, and he doesn't market himself online anywhere. After 12 years behind the scenes, that coach is now making himself available exclusively for GRE listeners. His name is Daniel Thomas Hind. If you're a hard-charging business owner or investor who wants to get in the best shape of your life, physically, mentally, and professionally. You can fill out an application for a free consult. This is private one on one coaching for those willing to go to uncommon lengths to achieve uncommon results. Thanks to Daniel, we've all become better leaders, better operators and better men. It started by showing up for ourselves. Now it's your turn. Go to Daniel Thomas hind.com H I N D, that's Daniel Thomas hind.com and sign up before Spotsville Flock Homes helps multifamily owners exit the operator grind, whether it's your six plex or a 50 unit apartment, through a 721 exchange. This defers your capital gains tax. It's a strategy long used by institutions. Now you can swap tenants and toilets for passive income and zero management. Request your initial valuations. See if your property qualifies at flcokhomes.com/gre that's F L O C K homes.com/G R E.
     
    Speaker 1  2:50  
    You're listening to the show that has created more financial freedom than nearly any show in the world. This is Get Rich Education.
     
    Keith Weinhold  3:06  
    Welcome to GRE from Rome, New York to Rome, Oregon, and across 188 nations worldwide. I'm Keith Weinholder. You're listening to Get Rich Education. Your hardest opponent out there is rarely the market, the economy, your boss, or even your schedule, your opponent is the part of you that knows what to do and still hesitates to do it. You are your own biggest obstacle, and deep down you know it. I know this about myself too. We all keep sort of choosing familiar frustration over unfamiliar progress, a personal stay in the same bad routine, same underperforming relationship, same cluttered inbox, same poor money habit, or same low energy pattern, not because you love it, but because it's predictable and it's safe. Growth, though, requires a new identity. Staying stuck only requires repetition, and we all know how to do that already. You delay asking for the sale, or you delay asking the attractive woman out, and you justify that by telling yourself, oh, you're still refining the strategy, but deep down you know that the real issue is discomfort. We're talking about the skills that build yourself today, perhaps somewhat like we did in two episodes with Chris Voss. When you learned how to be a good negotiator, one thing I've learned from today's guest is about culture. Culture is governed by what you tolerate at your company. Do you have a policy? Where you've got to reply to an email within 24 hours. Well, if you start tolerating 48 hour replies, you've tolerated less, and that becomes the new culture. And it also shows that you're going to let other policies slide too. If you let this one slide, do you expect your property manager to physically inspect your unit every six to 12 months, that's something I kind of like. Well, then don't tolerate anything less than that. And parenting is all about tolerance. I'm going to ask our guest about that. I'm also going to ask, how would you even know when you're burnt out at work? What are the hard signs to look for. How would you even know? Another thing that I want to ask about is how he discusses that you are the way that you are because of the shape that you took when you were under pressure. But I want to start by talking about health, and then transitioning. Today's guest talks in a way where you know, at least once today, I'm pretty sure you're going to say to yourself, gosh, it sounds like he's talking about me. It's been the most interesting thing. 
     
    Keith Weinhold  6:16  
    Earlier this year, I learned that a lot of top business owners, including some that you've heard here on the show, have had their life transformed, including pretty explosive growth in their business from working with an executive coach. And then I learned from them all, oh, it's the same guy, it's the same coach. I discovered that he's helping a lot of hard-charging business owners and investors basically get in the best shape of their life, physically, mentally, professionally. He's been especially good with types that burn out. He's also the founder of something called The Apprenticeship, where he helps corporate professionals become pro coaches. In a former life, he was a COO who helped grow a fast-scaling company tenfold, and today he's a marathon runner. He's also a literary novelist working on his second book, and since I met him in person in California recently, I've learned from him too. So I'm pleased to announce that we have this sort of secret weapon behind so many people on the show today. Welcome to GRE, Daniel Thomas Hind,
     
    David Thomas Hind  7:22  
    Keith. Thank you. That's one heck of an introduction. Hi, I'm gonna have to save that and bring it with me. That's very kind of you to say, and it's a pleasure to be here.
     
    Keith Weinhold  7:31  
    Oh, you're like, gosh, I can't possibly live up to that now. For those in the audio, only Hind is spelled H I N D, you know, Daniel, I'm happy to have you, because I know, and I've learned that you just really don't market yourself much, frankly, because you don't have to. You just sort of get these organic referrals from people that you already coach, but you do have a website, and it's just uncanny how, when I visited your site, people are doing video testimonials, and I'm like, oh, I know that person, and I know that person, but these people hadn't told me about you for so long, and Daniel, I think when it comes to making the best version of ourselves, or at least moving that way, we talk about wealth building on this show an awful lot, but that has quite an intersection with health.
     
    David Thomas Hind  8:19  
    Yeah, it does, so my philosophy is first and foremost that health is wealth, right? It's a cliche, but so often hard-charging executive types, whether those are business owners or members of a leadership team, founders, or investors, so often these types of folks, because they're so passionate, they're so driven by the thing that they're working on, that they're building, that they'll often let other things in their life go, and sometimes it's just a season, but often, more often than not, at least with the people that I work with, and see that season turns into many seasons, turns into years, turns into a pattern, right? And it becomes this pattern, this ingrained way of being that, unless gone unchecked, can really cause problems in the long run, and so a lot of people don't exactly know what executive coaching is, and it can mean many different things for many different people. For me, it really is the intersection of your physical well-being, which, of course, includes your diet, your fitness, your nervous system, the health of your nervous system, your sleep quality, it has to do with the way that you organize and structure your days, right? So many of us just enter into a default way of doing life, and we don't. Creatures of habit,
     
    Keith Weinhold  9:55  
    Yeah
     
    David Thomas Hind  9:56  
    We're creatures of habit, and for successful people, those habits have helped us succeed and get to where we are, but because of that, we often don't stop and think, well, is this actually serving me anymore, or has some of these habits that used to be healthy and good for me, have they kind of metastasized into something not so healthy, maybe even dangerous or destructive, and then for these sort of people who I'm working with, right, many of them are at the top of organizations, and so these habits, these ingrained ways of being, might seep out and filter out into the company culture, into how we interact with people below us, right, and so my work is an intersection of personal health, personal development, business health, business development company culture, and so we're looking at the leader, the founder, how he shows up for himself in life, how he shows up for others, and how that defines the world around him, that he is usually, or she doesn't have to be, he, he, or she is usually at the center of, right, and so it's quite profound, because I get to be as intimately involved with people I really respect, people who have accomplished so much and who hold themselves to such high standards, and still want more, still know that there's better, still know that there's so much of themselves that they can improve upon, right? So I get a really meaty, holistic, complete inside look of these people's lives and their businesses, and so I get to work in like many businesses at once with incredible people. I'm very blessed and very lucky.
     
    Keith Weinhold  11:37  
    Well, when it comes to one not having their health, I know a lot of times you told me about how you have a quote successful person, but they're successful in business, not their health. I think a lot of it comes down to one's mental conditioning, even from when they were substantially younger, shaping our worldview. I think a lot of people are programmed with this, I'm supposed to be X, I'm supposed to get this degree within 10 years. I'm supposed to be executive level with a corner office, and I'm supposed to have an eight figure net worth by that age. You know, not that all of these are bad things individually. In fact, it could be a reflection that you're contributing to society, but you know, it's sort of, are you overweighted toward professional accomplishments? Is this program supposed to stuff that you got from somewhere, the stuff that's making you unbalanced and ultimately unfulfilled. So, really, it's the success in one area comes at the expense of what? That's how I think about it. And I know you have a number of stories of helping people with just this,
     
    David Thomas Hind  12:40  
    I do. And so, let me first comment on the pattern that you're describing, and then I'll, yeah, that I think the best way to really talk about is to show what that looks like in an actual example, so it's it's this shape you took under pressure concept is is a concept that I talk about with all of my clients, so every successful entrepreneur that I know has developed a specific psychological structure that they've adopted to help them survive in the early years, right, when it was just them, or maybe them and their partner, and they were going for it, they were relentless, they were acting with an insane sense of urgency, an inability to sit still. Everything felt at risk, and they really had to sacrifice basically everything else to make this thing happen. It's not the case of everybody, but most people that I know who have accomplished a lot, that they share a similar origin story, and it was like go all in for five years, forget everything else, kind of thing. 
     
    Keith Weinhold  13:39  
    Exactly.
     
    David Thomas Hind  13:40  
    It looks like some version of that, and so for the ones who succeed and make it through that phase, that's incredible, but you know the cliche is what got you here won't get you there. It's like when by operating that way you have adopted specific ways of being, psychological patterns, ways of relating to other people, beliefs about yourself, and beliefs about, like, how unreliable other people can be, and it can really turn into a dangerous operating system when you have to start building a team and training that team and relying on that team, and then creating a shared team culture, right, a company culture, it's not just like silly exercises that you put like on the wall, like these are our values, doing like trust falls backwards, like a culture is the behaviors that you take on, and like the uniform that you put on that everybody on the team has bought into, right, and so unfortunately, most cultures are shaped by the leadership team's worst qualities, because those qualities are the things that, like, we don't hold together, right? Like, if it's this person who lashes out because somebody doesn't get it, a media. The perfect example of somebody who really has embodied all parts of the coaching, from health to your inner psychology and mindset, and how that impacts your business health and your team and the corporate culture, is my client Terry Kerr. He is the founder of Mid South Home Buyers, and I know that Terry's been a guest on this show a number of times. What an incredible person. I've had the pleasure of working with Terry for close to 10 years now, and I've been working with his COO for close to eight years as well. So, I've gotten a real inside look at that team, and Terry, when he came to me, had let go of parts of himself that he had always held sacred, which was his health and his wellness. Long story short, we started working together. I helped him redesign the way that his life was constructed, pretty much no surprise, everything about his day was oriented towards business, from the second that he woke up to the second that he went to bed. So we really re-architected, we put a lot of intentionality into re-architecting the flow of his day, so that he can make sure that he's prioritizing other parts of himself and his family, his personal health, etc. 
     
    David Thomas Hind  13:40  
    Over time, he lost, I think, that first year he lost something like 60 pounds. He took on meditation as a practice. He started exercising daily, and Terry was a skateboarder growing up, so he was always, yeah, he was big into fitness and in his own ways, and just had let it go for the sake of the company, because for years it was just him building this thing, and most people would say, "Wow, I've done it, like I'm successful, I overcame these things that were weighing me down, and we're done here, but Terry was so opened up by the experience that he wanted to keep going, and he didn't even know what that meant, but over time he's invited me into the way that he operates. Period. As a leader, making decisions for his business, how does he interact with his employees, with his leadership team, so I've effectively become like the inside man, basically become like an AI, but a person who you can run decision making through, right? So, as to check those parts, those impulses, those impulsive parts of ourselves that just like want to do something, I've become like a check for him, so we're communicating on a daily basis. What are the most important things that we need to accomplish today? Are we making sure that you're spending time with your family? Are we making sure that you're getting your exercise in? Is your assistant organizing your food and dinners and everything else for you? Where are you going out to restaurants?
     
    David Thomas Hind  17:59  
    Right, it's that level of intentionality of being part of almost every decision that over time, like at first we have to put a lot of attention into, because we're building new habits and we're breaking old ones, but over time these become ingrained and then we can start to take on new projects, new habits and routines and ways of being that we want to basically program, and so over these past 10 years, the company has absolutely exploded, and I'm not going to say that it's because of me, but I am going to say it's because Terry has taken on personal growth and growth in general as a vocation, and not allowing his own stops and blocks get in the way of the company going where it needs to go, and so over that time they've really changed the leadership structure. They've let a lot of people who weren't cultural fits go. They have assembled an entire leadership team now below the owners who have a lot more responsibility, whereas everything used to just go right up to the owners, and, and they were pretty much deciding on everything. So we really created a structure, a culture. We've let people go who no longer fit. We brought new people in who do, and you know, I will say that it's a direct result of that level of intentionality and specificity that Terry brings to his day every day, and Terry has given me his blessing to talk about him, or else I would never reveal so much of a person's inner life and inner work like that. But it's just his story is such an inspiring one for me, and that is so cool to get to share with others.
     
    Keith Weinhold  19:38  
    I'm glad that you checked with Terry, because as you're talking about this I'm thinking I better talk to Terry after this and ask him if this is okay, but it's been said that culture, including company culture, is not what you say or what you do, it's what you tolerate.
     
    David Thomas Hind  19:54  
    Yeah, well, that's what we said before, is that most found. Treat culture as like an HR exercise, right. Meanwhile, the actual culture of the company is it's shaped by the leader's worst qualities, and so a lot of investors listening to this show probably have teams, whether it's property managers or assistants, contractors, partners, and your team's culture is a mirror of the parts of yourself that you haven't dealt with yet, right. And so it's really your responsibility to fix that. That is the job of the leader. You are at the top, everybody's looking at you. It's not a job for everybody. Most people would prefer not to have that level of attention, and even if you think that you want that level of attention, your true self, the part that wants to just like leave me alone and let me do my work, that part of you, to call it the child, call it the baser self, whatever you want to call it, doesn't want that attention, because it requires constant reinvention, constant opening yourself up to take this on, so yeah, your team's culture is a mirror of the parts of yourself that you haven't dealt with yet. If you fix the leader, you're going to fix the culture, and Mid South Home Buyers is a perfect example of that.
     
    Keith Weinhold  21:18  
    Yes, this concept about the shape that you take under pressure,
     
    David Thomas Hind  21:23  
    you don't know how to give yourself relief. So, here's another case in point. Like, this seems like such a simple fix, but you'd be surprised, because this is representative of a number of people that I work with. Like, Terry hadn't given himself an actual vacation in decades, so
     
    Keith Weinhold  21:41  
    gosh,
     
    David Thomas Hind  21:42  
    just taking a week or taking two weeks to go to Europe, which he and his wife do every year now.
     
    Keith Weinhold  21:49  
    Yeah, I know they went to France not long ago.
     
    David Thomas Hind  21:51  
    Yeah, that's representative of a maturation of the person who can trust that the team can take care of things, who can trust that the business isn't going to fall apart because he's not there at the center of it. You know, we form addictions with just being involved, having to read every email, making sure that we're involved in every conversation. Again, that's a sort of ingrained habit that you learn from the beginning, because it was just you. You did have to be involved in every conversation, if you weren't there, would be no thing to exist. There would be no business, right? But some people might not have a problem with this. I don't know those people. Most people I do know have a real problem with letting go, with changing, with maturing with the company as it demands, so that you're not just bleeding yourself dry day in and day out, right. So, physical burnout, cognitive decline, relationship decline, or let's call it numbing, leadership erosion, right? If you don't check these parts of yourself, all this stuff that you've worked so hard to build, this incredible life that you have assembled, and your accomplishments, they start to whittle away, so that level of identity crisis is on the table if you don't check these parts of yourself, and so I don't want to sound like doom and gloom, but I am describing the costs of success. These are actually typical for people who get to the very top, and the thing is that there aren't a lot of people at the very top, so you don't really want to talk about it. It sounds ungrateful, or term I like to call champagne problems, right? Like, oh, look at the multimillionaire be upset because he has to work so much, right? It's like nobody really is going to have sympathy for that, so you're not going to parade that around, but you know these people are people too, and everybody needs outlets, and everybody needs to express themselves, and everybody can change the way that life is, so again, that's where I come in.
     
    Keith Weinhold  23:49  
    Yes, at some point a leader has got to back off and tell themselves if it gets done 95% of the way that I would have gotten it done, but it doesn't take any of my time, that could very well be a win, and then they're probably not going to be deemed as wearing the micromanagement hat all the time either. We're talking with Executive Coach Daniel Thomas Hind about the gap that we all have between who we are and who we could be. More when we come back, I'm your host Keith Weinhold. 
     
    Keith Weinhold  23:49  
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    Naresh Vissa  23:49  
    This is GRE Real Estate Investment Coach Narresh Disa. Don't live below your means, grow your needs. Listen to Get Rich Education with Keith Weinhold. 
     
    Keith Weinhold  23:56  
    Welcome back to Get Rich Education. I'm your host, Keith Weinhold. We have a different kind of show today. I learned about an executive coach that's behind the success for a number of guests that we've had here on the show. It's just been uncanny at how he's transformed others' lives. And since meeting him in person earlier this year, I've now learned from him too. And you know, Daniel, one of the things I learned about that I didn't know before is some people can get burnt out so bad that not only is it messing with their physical health and it's derailing their relationships, but burnout can actually create cognitive decline and more problems. So, first of all, How can one identify when they've reached the burnout point? How will they know? Yeah,
     
    David Thomas Hind  27:00  
    that's a great question. Obviously, it doesn't come in a one size fits all, but it usually follows this sort of pattern, right? Let's say you've got the portfolio, you've got the cash flow, you've got things are working on paper, you should be happy, right? On paper, you are living some version of the dream that you told yourself 510 15 years ago. However, it doesn't feel that way. You feel worse than you did ever before, or at least within the past recent memory.
     
    Keith Weinhold  27:35  
    Yeah, that's amazing.
     
    David Thomas Hind  27:36  
    So that's the place to start looking. Look, everybody has seasons of just, you gotta go through it, something happens, you need to work really hard, you need to bust it, and that's fine. I'm not talking about direct tiredness or exhaustion. What I'm talking about is more of like an existential.. what's like, why is this not feeling the way I hoped it would? Right, I sacrificed everything for this, for xyz, whatever xyz is, and I have xyz, but it feels so empty, or I just, I can't appreciate it, or I'm always on to the next thing. Yeah, and all of this I'm going to call is some version of burnout, because what that means is that you're not able to actually appreciate your life that you've worked so hard for, and so for some it's like this never-ending fascination with the next, the future constant needing to build, and there's nothing wrong with that, but it comes from almost more of like an addictive place, like you're addicted to making things happen, you can never slow down, and underneath it all, there's actually no real joy or satisfaction. It's pure adrenaline, it's pure cortisol, and we like the cortisol bump when it's like, you know, we're feeling it, we're just going for it, we're getting it, but there is going to be a day where that flips upside down, and the exhaustion is almost impossible, because you don't know how to achieve satisfaction other than through sheer output. It's like a marathon runner who can never stop running, like literally never, right? You're just, you're running 20 hours a day, you can't get the high, unless you're crushing yourself, and so that's one form of burnout. Another form of burnout is just I don't have the juice anymore. It's actually experiencing the other side of your nervous system shutting down. It's your body can't produce the raw materials to have you primed and ready to go anymore, so whether that's a hormonal issue, whether that's a cortisol issue, whether you have heart problems, the body keeps the score. So a lot of people that I work with, we're going to have to do a lot of health optimization, working on their diet, their sleep patterns. Patterns, exercise, getting their hormones dialed in, micronutrients, maybe peptides. There's a lot of things that we need to do to rehabilitate the system, because they're just wrecked. When your nervous system is that mainlined for years, it wrecks you in a way that leaves you just totally empty, and it's not like, oh, you know, going on a vacation and getting extra sleep is going to fix this. No, this is like, you need months and months of targeted repair. It doesn't mean that you're completely useless, you can't be working, but what I am saying is you're going to need to reprioritize. Priority means number one, right? So, what are your priorities? As we've been discussing today, it's clear that the sort of person that I work with, and if this is at all resonating with you, the listener, the sort of person that you are, is somebody who is so focused on your mission, you do feel the sense of mission, you are so goal-oriented, and that's the best part of life, is you wake up every day and you know what you want and you're going for it, and I would never want to change that about anybody who has that, because I think we're all looking for that at the end of the day. That is the sweet spot of life. When you have found that thing and you're going for it, my job is never to make that wrong. My job is to actually support the human being who is operating on that level to make sure that they can stay on that level, right, so without doing that, the problem is that you actually lose the thing that you love the most, you lose the joy, you lose the energy for it. I mean, I've worked with people who are on the cusp of selling their business simply because the weight of having to wake up every day and go in and work with others and like, lead the ship.
     
    David Thomas Hind  31:42  
    It just felt so overbearing, because no surprise, this person had gone 20 years without actually taking care of themselves. They were 60 pounds overweight, they were not sleeping, they were getting maybe five hours of sleep a night. You know, the culture has changed online over the past few years, which is a good thing, but a lot of people used to wear, you know, I don't sleep at all as like a badge of honor, right? Again, this person's marriage was on the ropes. They weren't spending time with their children. They'd become a shell of a person who were just who was miming their normal life. They was just, they were kind of pantomiming normal life. They were going through it, but they weren't really there. And the weights, think about it like this. When you're tired, when you get a bad night of sleep, like a really bad night of sleep, or maybe, God forbid, two nights of bad sleep in a row, every little thing that next day is grating, right? Yeah, the person who cuts you off, it just.. it's that much more annoying, right? That meeting that was supposed to happen, the person has to cancel, and it's like, oh my god, I just.. my whole day was centered around this. How, how selfish of them, right? Everything becomes that much more grating. So, imagine that times 10 years, 15 years, 20 years, right? The weight of everything feels so impossible that they can't hold it together anymore, and so I know a lot of people who have fantasized about selling their business, the thing that they, you know, which is like so paradoxical, because it's not, it's not that they need to sell it, it's not that that was actually even a goal, it's just that they can't imagine themselves having to do this any longer, and they, for whatever reason, they have blinded themselves from seeing that there's another way, it doesn't have to be this way, but it does take work, and that's a problem, because upstream of this, you ask me, what is a sign of burnout? A sign of burnout is saying, oh my god, I can't do anything about this, it's as hopeless, right? This is like a hopeless feeling, so it's not hopeless, and especially for somebody like that, for the sort of person that we're talking about, you're actually more resourced than most people on the planet to take this on,
     
    Keith Weinhold  33:46  
    like they say, when you have health, you can want everything, when you don't have health, you only want one thing, and yeah, how people can be prevented from getting into that condition by avoiding burnout, some people have such an identity crisis that you know they don't know who they are outside the business, and they would kind of be terrified to find out, maybe that's another sign that you're burned out and you need some help, but you know finding life balances is sort of a tricky word, there are sort of supporters and detractors of the whole life balance school of thought too, but you know, Daniel, one thing I found interesting is, I asked you, how you ever got into coaching, and how you do this, and, like, you know, how you have the aptitude to even help a person go become a coach, and I know you told me that it sort of happened organically, you started helping out friends, and then it really grew into something where you help people professionally.
     
    David Thomas Hind  34:43  
    Yeah, so health is clearly my primary focus. It has been for years, and I started as a health and wellness coach 1213 years ago. It wasn't something that I designed, I didn't say this is going to be the thing that I. Do with my life, it just sort of happened. I had always been very health conscious. Well, I have been since my 20s, I should say. I actually grew up a fat kid, so I have that ingrained in me, and I think that that shaped a lot of the person that I became later on, which is probably a story for another time. But since my early 20s, I've been very health focused, health conscious, and people took notice of that, and became part of my identity. And after graduating from college, a few years out, a lot of my friends went into Wall Street. They were working 18 hour days, literally sleeping at the office, and started reaching out for help. So I started making guides for them, and then I realized no, they actually need more personal attention, because there's an accountability factor. A lot of people know intellectually what to do, but it's the behavioral, it's the following through with it. It's yeah, but it's 10pm and I'm exhausted, and I have three more hours to go to get this project done, and all I want to do is like shove junk food in my mouth, right? It's those moments where your intellect completely goes away, and that primal overdrive takes over. So I started shaping myself into somebody who became extremely available for my clients, where I really thought of myself as a partner in their daily experience, and part of my role is to give them the information, but most of the time these people are actually the experts of their own lives, so like I couldn't tell a surgeon how to do his work or her work, right? And that's not my role, but my role can be to be a partner in their life experience, to make sure that they're following through with their intentions. 
     
    David Thomas Hind  36:38  
    These people hold themselves to very high standards. Are you following through with that? How are we making your goals achievable on a daily basis? So, let's think about the long term, the medium term, the week term, and then the daily term, right? What are the rocks that we're moving this month, this week, today, actually being able to share all these things? Right, talking about the hard things, this thing happened at work when it came to food and health coaching, like, you know, I just want to go and blow off steam and go to the club tonight, or go drinking with my friends, or whatever, and you know, having somebody to actually talk that through with, to make sure that, yeah, but how is that going to impact tomorrow, and this other thing that you said you wanted to accomplish, right? So, as a young man I had no training going into any of this other than my own fascination with health, my own health transformation and journey in my early 20s, but this call it menage of personal growth, routine building, habit building, psychological construct of why do we know better but do the opposite, why do we do things that are wrong for us, right? And then, how do we check that part of us and build new patterns? So, as I grew in my entrepreneurial journey, and as an operator, I started to incorporate what I was learning in the work with my clients, and I started to choose clients who were growth-oriented and who tended to be entrepreneurs and people who were building things or what then turned into members of leadership teams, etc. etc. etc. And yeah, it's been this symbiotic journey of my personal growth informs the work that I do with my clients and vice versa. And then, of course, over time I got more formal training and have never stopped trying to become better, so that I can really service my clients as well as possible.
     
    David Thomas Hind  38:26  
    I mean, they put a lot of trust in this relationship, and from my side, I try to show up as the most powerful service provider they've ever experienced. I really think of myself as a partner, less of a coach, more of like a partner. I think of myself as like the COO of their life, I am extremely present for them. We're communicating throughout the day, through text, through voice memo. We do weekly calls.
     
    David Thomas Hind  38:50  
    Yes, it was kind of funny, Daniel. I remember when I first asked, what your coaching style was like? Like, ask if you do a weekly email or a Zoom call with those people. Yeah, I quickly learned, oh no, it's not like that at all. 
     
    David Thomas Hind  39:02  
    No, we're in the trenches together. Anybody on the outside of your life wouldn't necessarily know that I'm there on your team, I'm on the phone behind the screen, but it's because I want this to be as private of an experience as possible. So, full confidentiality, this is very private. I become somebody that you can share the like scariest, worst, most vulnerable parts of yourself, not judge you and help you turn those into strengths. I feel like I said, we're game planning just about every day together, and really, I give as much energy as you're gonna give, so somebody who is resistant to this sort of work, you're not going to get a lot out of it. I can't force anything, because it's not like I'm in the room with you, right? We are communicating digitally, but I do try to make myself as present in your life as possible, because a lot of people at the top don't have a lot of people. That they trust, you know, they're always providing for other people, they don't provide for themselves as much, they let themselves go. So to have somebody who's giving that back to them can be very, very, very, very, very life affirming and life giving. And yeah, I feel like I have the best job in the world that really nobody knows about, that I couldn't have possibly constructed or imagined for myself either. And it's like a very unique thing in the world, and I'm just so, so grateful that I, that I can do it.
     
    Keith Weinhold  40:25  
    It is, it gets so personal. Yes, you're frequently texting and messaging people, and yeah, I mean, you must know a lot of information before that client's spouse even does in a lot of cases. Yeah, what an unusual and interesting thing to be doing. Well, Daniel, I hope it's not an imposition, but if you're still open to it, I know you mentioned before that you know that we haven't known each other all that long, but just based on our mutual friends that you would potentially offer private one on one coaching to GRE listeners, so if you're still open to that, tell us about it and what it takes to apply to work with you.
     
    David Thomas Hind  41:00  
    Yeah, I appreciate that, and I do have spots available, so if anybody, thank you, listening today thought, wow, the way that he's speaking about his clients is how I feel about myself, right? Anything that I said, then I'd say you're a good candidate. So the best way to get in touch with me is just to go to my website, it's my full name, Daniel Thomas Hind, h i n d.com and you can fill out an application, and if you're a good fit, we'll get on a call, it's a free consultation, and on that call we talk about you, we talk about you, and I'm going to find out what it is that you actually want, what it is that's getting in the way, and how I might be able to serve, and that's the only way that we can work together. There's one offering, it's private one on one coaching, and it is an uncommon way to get extraordinary results. So I'm looking for people who believe that there's more, and if you lead with that, then you're gonna, you're gonna get what you want. So, yeah. For anybody who that resonates with, I would love to talk to you.
     
    Keith Weinhold  42:10  
    Well, Daniel, this has been terrific. I think you said at least one thing that resonates with a lot of people, where they thought, oh my gosh, I can see myself with what he is describing right now, because we all have this gap between who we are and who we could be, the gap in the gain. If this is potentially of interest to you, yes. Thanks, Daniel. You can visit danielthomashind.com That's been great having you here on the show.
     
    David Thomas Hind  42:36  
    Thanks, Keith. It's been a real pleasure, and it's been a pleasure getting to know you as well. So, more to come. 
     
    Keith Weinhold  42:47  
    The ideal person that Daniel helps is someone named Pierre. Pierre is between the ages of 38 and 50. He's either a tech founder, agency owner, online business owner, real estate investor, or some other flavor of entrepreneur who has built a business doing 500k to 5 million plus a year and is taking home around 350k or more than that, and by every measure that other people use to judge a life, Pierre has won, and he knows it, that's part of what makes this so confusing for him, because Pierre's pain points are physical burnout, which Daniel and I talked about, cognitive decline from the burnout, and before I met Daniel, I didn't even know that burnout could cause cognitive decline, leadership erosion, a marriage on autopilot, where a marriage becomes just another thing that you're managing rather than living. Pierre's also got an identity crisis, and he's got success as the trap, because by every measure that other people use to judge a life, Pierre has won, and that's what makes a situation like this, so confusing, because see, he can't complain to anyone, since from the outside everything looks perfect. But here's what makes someone like Pierre coachable: he's a winner. He's always expected more of himself than anyone around him would dare to ask. He's someone who has never been satisfied with good enough, and he's always been willing to get uncomfortable to unlock the next level. He didn't build a multi million dollar business by accident. You build that by being relentless, being honest with yourself, and refusing to coast. And that same instinct is the reason that Pierre knows he needs coaching. He's not looking for someone to make him feel better about where he is. He's looking for someone to grab him by the shoulders and hoist him into the best version of himself that he knows is still in there. He wants a revamp, health, business, marriage, identity, creativity, purpose. The whole thing, he wants to feel like himself again, and he's willing to do whatever it takes to get there. Pierre's dream outcome is that 12 months from now, he is the healthiest, most creatively alive, highest agency version of himself that he's ever been. He runs the business on his terms, he has built or launched the thing that he's been sitting on for years. Maybe it's the new product, or maybe it's the book that he's always wanted to write. He's taking vacations with his family. He has a phone off policy from dinner time on, so that he's present and he knows who he is when he's not performing. In fact, there's very little performing because he's in flow and the magic is back, so Pierre really describes the journey. Big thanks to Daniel Thomas Hein.
     
    Keith Weinhold  45:54  
     Today, so great to host him, considering that he rarely does public appearances like this. Next week, it'll be back to our core real estate content. Hey, and a thanks too to the amazing Terry Kerr, the founder of Mid South Homebuyers. He's such a giving guy that it's really no surprise that he would let his story be told for your benefit. So we got to talk about the part that you don't see here. What's behind a person as successful as a property provider to all these hundreds or 1000s of investors across the nation. If you think that performance coaching can help you, you can apply, but since it is highly personalized one on one coaching, he can only take a select few, but it's a rare opportunity. You can do so at Daniel Thomas hind.com and from there you can go on and talk about your favorite subject, which is talking about yourself with him. Until next week, I'm your host, Keith Weinold. Don't quit your daydream.
     
    Speaker 1  46:58  
    Nothing. Nothing on this show should be considered specific personal or professional advice. Please consult an appropriate tax, legal, real estate, financial, or business professional for individualized advice. Opinions of guests are their own. Information is not guaranteed. All investment strategies have the potential for profit or loss. The host is operating on behalf of Get Rich Education LLC exclusively. 
     
    Keith Weinhold  47:24  
    The preceding program was brought to you by Your Home for Wealth Building, getricheducation.com
  • Get Rich Education

    610: Don't Buy Your Next Rental Until You Ask These 12 Questions

    15/06/2026 | 42 mins.
    Keith shares his "dirty dozen" due diligence questions every investor should ask before buying property, from gauging build-to-rent saturation and local job growth to testing cash flow and exit strategies. 
    He explains why even new-builds still need inspections and how to think about rents that may stay flat while expenses rise. 
    Aundrea Newbern, an experienced investor, broker, and property manager active in Southeast Georgia and Michigan, offers a real-world look at today's long-term and short-term rental markets, including shifting tenant behavior and local restrictions. 
    She also details how she's using AI to streamline property management, improve screening, optimize pricing, and cut maintenance costs, giving listeners practical ideas to apply in their own portfolios.
    Episode Page:
    GetRichEducation.com/610
    For access to properties or free help with a
    GRE Investment Coach, start here:
    GREmarketplace.com
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    Get mortgage loans for investment property:
    RidgeLendingGroup.com or call 855-74-RIDGE 
    or e-mail: info@RidgeLendingGroup.com
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    For predictable 10-12% quarterly returns, visit FreedomFamilyInvestments.com/GRE or text  FAMILY to 66866 
    Unlock truly passive real estate income—visit flockhomes.com/GRE today to see if your properties qualify for a 721 exchange with Flock Homes.
    To get in the best physical, mental, and professional shape of your life, go to DanielThomasHind.com and apply for Daniel's intensive 1-on-1 coaching for burnt-out entrepreneurs and executives.
    Will you please leave a review for the show? I'd be grateful. Search "how to leave an Apple Podcasts review" 
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    Complete episode transcript:
     
    Keith Weinhold  0:01  
    Keith, welcome to GRE. I'm your host, Keith Weinhold, talking about vital due diligence questions that you have to know the answers to before you buy your next property. Even advanced investors don't know to ask some of these. Then a terrific guest tells us how she is practically applying AI to increase rental occupancy, save on maintenance expenses and drive rental income today on Get Rich Education.
     
    Speaker 1  0:28  
    Since 2014 the powerful Get Rich Education podcast has created more passive income for people than nearly any other show in the world. This show teaches you how to earn strong returns from passive real estate investing in the best markets without losing your time being a flipper or landlord show host Keith Weinhold writes for both Forbes and Rich Dad advisors, and delivers a new show every week. Since 2014 there's been millions of listener downloads in 188 world nations. He has a list show guests and key top-selling personal finance author Robert Kiyosaki. Get rich education can be heard on every podcast platform, plus it has its own dedicated Apple and Android listener phone apps. Build wealth on the go with the Get Rich Education podcast. Sign up now for the Get Rich Education podcast, or visit getricheducation.com
     
    Keith Weinhold  1:11  
    You know, Mid South Home Buyers, that top Memphis turnkey provider, I learned that a secret weapon behind their explosive growth is more than just you buying their properties, it's an executive coach for nine years now. Their CEO, Terry Kerr, and his COO, Pat Nix, have worked privately with a coach who I've now learned from too, and he doesn't market himself online anywhere. After 12 years behind the scenes, that coach is now making himself available exclusively for GRE listeners, his name is Daniel Thomas Hind. If you're a hard-charging business owner or investor who wants to get in the best shape of your life physically, mentally, and professionally, you can fill out an application for a free consult. This is private one on one coaching for those willing to go to uncommon lengths to achieve uncommon results. Thanks to Daniel, we've all become better leaders, better operators, and better men. It started by showing up for ourselves. Now it's your turn. Go to danielthomashind.com H I N D, that's Daniel Thomas hind.com and sign up before Spotsville Flock Homes helps multifamily owners exit the operator grind, whether it's your sixplex or a 50 unit apartment through a 721 exchange. This defers your capital gains tax. It's a strategy long used by institutions. Now you can swap tenants and toilets for passive income and zero management. Request your initial valuations. See if your property qualifies at flockhomes.com/gre that's F L O C K homes.com / G R E.
     
    Speaker 2  2:57  
    You're listening to the show that has created more financial freedom than nearly any show in the world. This is Get Rich Education.
     
    Keith Weinhold  3:13  
    Welcome to GRE. I'm your host, Keith Weinhold. The world's biggest problems are also the world's biggest businesses. That's not a coincidence, and it squarely includes the problem of having enough quality housing. We talk about how to do that profitably and diligently, and on the topic of diligence, I've got a dirty dozen due diligence questions, call it I suppose these are smart questions to ask before you get under contract to buy your next property, and some of these could just as well apply to your existing rental property. Build to rent properties have become so popular, but ask the question, are these build to rent properties becoming overbuilt in this neighborhood? That's the first due diligence question, and a lot of investors overlook this, so you got to be mindful that build to rent often means lots of new construction in one smaller defined area. What you should do is ensure that new supply is being absorbed by renters. Some red flags to look out for are if multiple nearby communities are offering heavy concessions or free rent enticements, that is a sign that they're having difficulty luring in new renters to the area, and now taking a couple months to rent a brand new build isn't that unusual, but does the whole thing kind of feel like a mattress liquidation sale? Renters shouldn't have more signing bonuses than NFL free agents. The next due diligence question: Does this market still have population? And job growth, or am I late to the party? New workplace construction is a bullish market sign. Workplace construction, I'm talking about like a new office building, especially a new medical clinic, a new data center, a new factory. These signs are super bullish for an area, because not only does that attract the jobs and support the housing, as you can imagine, but see, that also means that whomever built the new workplace, oh, they probably did some research, and they're bullish about that area for a reason, they're going to look into that and do their due diligence that you can leverage before they spend perhaps 10s of millions of dollars or more in building a new workplace. 
     
    Keith Weinhold  5:45  
    The population should be stable or rising. Red flags are if growth already peaked and layoffs are increasing, don't arrive late to the party after the DJ has already packed up. The next question, when you're looking into a property, is is this unit likely to cash flow on day one? You know, you need to wonder, is the unit occupied or vacant. Some investors don't even think to ask that question until they get down the road a ways. When it's occupied, does the rent meet or exceed expenses with a buffer for maintenance and vacancy, now, if it's negatively cash flowing and you're solely enjoying the other four ways real estate pays, that might be okay, but you need to be comfortable with adopting a monthly bill that may or may not work. And do you know what I call a negatively cash flowing property? I call it a 401k property, because you have to keep feeding it every month like it's a 401k. A negatively cash flowing property effectively reduces your salary like a 401k does, and anyone that is serious about building real wealth when they're young enough to enjoy it would not invest in a 401k outside of the employer match portion. 
     
    Keith Weinhold  7:07  
    I'm your host Keith Weinhold. Here on Get Rich Education, episode 610 I've answered three out of twelve dirty dozen due diligence questions, and with abundantly minded grow your means answers that you're just not going to find on ChatGPT. Before I get to the fourth one, do you know what the word diligence means? Anyway, you probably have some idea. The definition of diligence is the quality of working carefully and persistently, demonstrating steady effort and thorough attention to a task. It implies a strong work ethic, meticulousness, and a commitment to completing duties well. All right, that is the definition. Diligence is the opposite of negligence. The next one, does my new build property need an inspection first? And this is a question, actually, that came in from Jake in Manhattan. Yes, it always does, whether it's resale or new build. It is always a good idea to get an inspection. One of the biggest misconceptions, really, is that new build means problem free.
     
    Keith Weinhold  8:16  
    People just equate new build with problem free. No, that is not the case. New build can have problems. There could still be foundation cracks that are beyond normal settling, perhaps improperly installed roof flashing that could cause leaks, maybe windows or doors that are installed out of square, and a bunch more stuff that could be wrong, even in new build a presale inspection after you get the property under contract that only costs 350-650 dollars for single family rentals and 500-900 dollars for a duplex. This is cheap insurance. It's also good peace of mind, get it done. Sometimes investors want to skip the inspection when they need a quick close. Buyer, beware of the risk. The fifth due diligence question: What happens to my numbers if rents flatten for two years? And this is a more germane question than usual today, because rent growth is slow here in this cycle. Single-family rents are up just 1.3% year over year per totality, and expenses tend to rise with inflation. All right, so if your rents flatten for two years, project that ahead like your other expenses are rising, and see that the property would still remain financially stable. We cannot build a business plan on motivational quotes. Next, am I buying near major employers or near hopes and dreams with work from home trends, which can probably better be called. Called work from anywhere, trends buying near major employers is actually less important today, but it still matters. It is good to have diversified employers and stable payrolls somewhat nearby. Promises about future development might never happen. Sheesh, some areas have been up and coming since cassette tapes, the seventh due diligence question, what's the property tax trajectory here? That's the question. Taxes are often stable and increases predictable, but is there a local budget shortfall? And see, this is the type of due diligence that few people do keep in mind, and I'm bringing up new build a lot, because there are so many new build income properties today on new builds. Also, look out, year one taxes can look deceptively low until improved property is assessed in year two, and any reputable provider, and when you contact our GRE investment coaching here, we're going to point that out to you. 
     
    Keith Weinhold  11:05  
    This is how you can, though, sometimes get unusually low property taxes in year one if they have not assessed the improvement yet. Question eight, and this comes from Violet in Peoria, Arizona, is the builder offering real incentives, or are they just hiding the true price? Okay, well, incentives - they should genuinely improve your deal without inflating the pricing. Here, look out for sunglasses and a fake mustache for financing. It's mandatory that you have an appraisal. This protects you against overpaying in an appraisal, even though it's done for bank collateral purposes, checking the quality of their collateral, which is the property, you know, it is also a good independent third-party valuation check. This is a good tool to keep you from overpaying. Back around the 2008 days, the global financial crisis, you know, often then the lender and the appraiser could collude to give you favorable appraisals, somewhat inflated values, and as it turned out, I was an investor then and ended up being the beneficiary of some of those favorable appraisals, but since then the CFPB, the Consumer Financial Protection Bureau, stepped in. They were formed to step in, so that those parties are no longer in cahoots with each other, and yes, incentives are explicitly disclosed to the lender and appraiser. For example, if you have a seller that offers to pay half of your closing costs if you pay their full sale price. Okay, the appraisers do know that they have that information before they provide you with the appraised value. Ninth, what's the vacancy rate in this area right now? This is a good due diligence question to ask. A balanced market has about five to 6% vacancy, eight to 10% or more. That can often be the sign of a weak market, but this might be all right in build to rent communities, and that's due to longer initial lease up periods that you have there. Due diligence question 10. Would I still want this property if appreciation slowed dramatically? You want to ask yourself this question because you cannot predict appreciation. The answer to this question is most likely yes.
     
    Keith Weinhold  13:35  
    You would still want the property even if appreciation slowed dramatically, because as a listener here, you understand that with a 20% down payment, just 2% price appreciation creates a 10% return on your equity, and you're also benefiting from the other four ways real estate pays, but if you're absolutely counting on appreciation to do all of the heavy lifting over the long term, that's less investing, and that is more hoping with spreadsheets. What's more predictable is something like inflation profiting on your loan, which is a force on its own. Next, ask this question: How old are the big ticket items like the roof, HVAC, plumbing, sewer, and electrical? I mean, if you get a number of expensive items that are near the end of their life, you could soon become emotionally attached to ibuprofen. At GRE Marketplace, we work with either extensively renovated properties or new build properties, so this is rarely a concern. These big capex items, capital expenditures, and that is really the way to go. Extensively renovated or new build property, because see that way the cost of having all this done for you both. Before you buy the property, that means that what you're essentially doing is financing the cost of all this into the loan, you're financing into the new roof, HVAC, plumbing, sewer, electrical, if any of that applies, and if you're buying a fixer upper, well, then a lot of times you need to pay cash for these items, and you lose repair time where the property could have been rented during that renovation time. Work with our investment coaching here, and you're going to be all set. Those big ticket items are rarely a concern. And then what happens is, if you have a break even or a positively cash flowing property. The tenant covers all of your operating expenses with the rent payment, and you never have to pay any money at all for these big ticket items. They pay for your mortgage and everything else, and you never lose the time because these things were done before you bought. 
     
    Keith Weinhold  16:01  
    And the last one question 12. What you want to ask is, what's the exit strategy if I ever want to sell? That's the last question. Begin with the end in mind. The fewer doors the property has, the easier it is to sell. Single family homes win big here. I mean, your eventual buyer down the road, they could be a gleeful owner occupant, even if the rental math were poor. That buyer wouldn't even know that the rental math is poor, because they're not renting it out, they're going to live there themselves. Sometimes your single family rental tenant even becomes your eventual buyer. This can work with duplexes too. Sometimes you can get an owner occupant, or your tenant stays there and continues to reside there as they're the owner, and they rent out the other side as well. But if you're trying to sell at 30 duplex, well, now you're exposed to cap rates and investor sentiment and market cycles, it's sort of like trying to offload a small corporation. That doesn't mean that apartments are bad, but they are substantially less liquid than single family rentals. That's your exit strategy that we're looking at. They are the dirty dozen due diligence questions every investor feels bumps, I have you will too, but these questions and answers are really going to go a long way toward helping you own right, and when you stick with it, real estate is a forgiving and lucrative asset class because you're paid in so many ways. Hey, coming up shortly, a guest that you haven't heard from in a while, and I know that some of you have missed hearing her voice. We'll talk a bit about the state of the real estate market here in a period where prices are remarkably stable, housing transactions are only about 80% what they usually are, and then we'll discuss how she's using AI in her real estate investing today. It's how she's increasing her occupancy and optimizing the amount of rent being collected. She splits her time in a couple ways between real estate markets in both Michigan and Georgia, and then in both the short term and long-term rental markets. That's next. I'm Keith Weinhold. You're listening to Get Rich Education. What if you got your mortgage loans the same place I get mine?
     
    Keith Weinhold  18:31  
    You sure can at Ridge Lending Group, NMLS 42056 They provided GRE listeners with more loans than anyone, because Ridge specializes in investment property, they'll help you build a long-term plan for growing your real estate empire with leverage. Start your prequal, and even chat directly with President Chayley Ridge. While it's on your mind, start at ridgelendinggroup.com that's ridgelendinggroup.com Let me ask you something, if you've worked hard to build wealth, is your money positioned to actually support your goals? A lot of accredited investors leave capital sitting in cash because it feels safe, but inflation and missed income opportunities can quietly erode its value. Freedom Family Investments offers freedom notes for investors seeking structured income backed by real estate, it's a straightforward approach built on real assets, not speculation. In full disclosure, I'm an investor myself. What I like is that their team walks you through how it all works, so you can decide if it aligns with your portfolio and income goals. Every investment carries risk, and nothing is guaranteed, but with a track record of consistent on-time investor payouts, they've built real credibility. Go to Freedom Family investments.com to book a clarity call, or text Family 266-866 that's Family 266-866, 
     
    Speaker 3  20:02  
    Hi, this is Russell Gray, co-host of the Real Estate Guys Radio Show, and you're listening to Get Rich Education with Keith Weinhold. Don't quit your daydream. We've got a special treat for you today is for the first time in a few years we hear from someone that's served since 2020 in house here in both operations and as an investment coach. Today she serves GRE in a different capacity internally, but a lot of you still ask about her. That's why she's here. She's got both the formal education with her MBA, and is about as robust in being a real estate investor as you can be at the same time. Oh, it's a warm welcome back to the talented Andrea Newburn.
     
    Aundrea Newbern  20:51  
    Hey, Keith, it's so great to be back. It's been a long time.
     
    Keith Weinhold  20:54  
    Well, you've continued to grow not just in your business but in your family size since you were last here. Congrats there. I'd like your thoughts, just generally, about the American residential real estate investment market today, where we've got these sort of rising prices in low supply areas, we have slightly falling prices in oversupplied areas, we've got mortgage rates that have normalized, we've got tough affordability for renters that want to be first time home buyers, so just tell us about what you see, big picture. Andrea,
     
    Aundrea Newbern  21:28  
    Yeah, absolutely, and so I invest and operate predominantly in the Southeast, so this will probably be a little bit more of a lens from the Southeast market, but as you know, I still actively invest in real estate myself. I help, you know people buy rental properties, also. But then the main thing that I'm doing now is I have a property management company down in Southeast Georgia, and so I'm seeing things more from the lens of what investors are doing, where they're investing, where rents are going, and if people are even buying properties. So it's been a little bit interesting. I mean, what I'm seeing is that, as you all know, it slowed down. We're not seeing as many investors buy properties, but people still are doing it, and they're still finding good cash flowing properties. Where the challenges come in is you're not making as much money on these properties as you did four or five years ago, so you know your margins are going to be a little bit less, your cash flow is going to be a little bit less. And then we're seeing, you know, rents kind of stabilize depending on the type of asset class that it is, so you know things are not doing wonderfully, but they're stable from what I'm seeing in the southeast market,
     
    Keith Weinhold  22:31  
    and now you do a good bit of investing in sort of Brunswick and out toward the Georgia coast, including places like Jekyll Island, where G. Edward Griffin wrote his book about the formation of the Fed, and all that in general. How has that area been from a residential supply standpoint? For example, we know in neighboring Florida they've had a lot of oversupplied pockets. How are we looking there? I think you have a lot of occupancy right now from talking to you earlier.
     
    Aundrea Newbern  22:59  
    We do, so I manage two different types of investments, right? I manage the long-term rental properties. There's less of those like on Jekyll Island, there's more of those in the mainland and Brunswick. And then we do the vacation rentals, which is very, very heavy on Jekyll Island and St. Simons Island. What we're seeing this year, if we talk about maybe those vacation rentals first, and then I'll talk about the long-term vacation rentals, we're still seeing a lot of demand, a lot of people are still coming. We're not really down from this time last year, but the one big thing we're seeing is people are booking their vacations last minute, they're not booking them months in advance at this point. So that's definitely had a little bit of an impact and had us on edge, because we're like, okay, where are these vacations? And then, sure enough, they're booking a couple weeks out now, so that's going really well. The investors that have purchased homes on Jekyll and St. Simons, especially Jekyll, are doing really good. They're still making a lot of money. They have high occupancy. Where are we seeing a little bit more of the challenge is with the long-term rentals. So rents are kind of staying flat from where they were last year in some of those B and C markets. We may even see a slight decrease, just a couple percentage points, and then it's taking longer to fill the property. So last year we could typically get a qualified runner in in three to four weeks. Now we're seeing anywhere from five to eight weeks. Right now,
     
    Keith Weinhold  24:11  
    as far as on the short term side, have restrictions affected you at all, like banning Airbnbs, for example, and how have you seen that play out in other areas? Because you certainly network with other people that do short-term rentals. Can you tell us about that?
     
    Aundrea Newbern  24:26  
    Yeah, absolutely. So I can talk about the Southeast market, for one, where in Jekyll, St. Simons, Brunswick, we're seeing no rental restrictions whatsoever. We do have to have a process to register the rental with a county, but it's so easy. It's literally a form. We do an inspection once a year, and that is it. I don't know that this is a fact, but a lot of the commissioners and politicians in the area also have rental properties. I think that probably has a little bit of an impact on that up here in Michigan, which, you know, I have another home, and I live in Michigan part of the time as well. There's a lot of restrictions, in fact, my. House right now is in Sterling Heights, Michigan, and they already have a rental ban where you can't do less than 30 days, so you're already having to go into that midterm market, and now they have some proposals up with the local municipality to even eliminate some of that, so we're seeing that in this area.
     
    Keith Weinhold  25:17  
    Generally, do you tend to see it in nicer, ritzier areas where they want to make the short-term rental restrictions.
     
    Aundrea Newbern  25:24  
    Yes, I do. Absolutely. Up here in Sterling Heights, where I live, the average home of my neighborhood is around five to six hundred thousand dollards and they absolutely do not want those here. But if you go a few neighborhoods over, where you're looking more of like the two hundreed to three hundred thousand dollars range, they don't seem to have as much of an issue with those. There
     
    Keith Weinhold  25:40  
    We've been talking about short term rentals in both Southeast Georgia and then in Metro Detroit, where you currently spend quite a bit of your time. Talk to us about the long term rental market with affordability for buying being down, that really hurts the prospective first time home buyer, so they need to be more likely to rent, which would make some people wonder. Oh, well, then how could vacancy possibly go up in an area? Well, you know, migration - we've touched on it - is one reason why that might happen. Another reason why it might happen is you might see more doubling up.
     
    Aundrea Newbern  26:15  
    Yeah, we do. We see a lot more families coming in. In fact, last week we just rented a property out to somebody where the parents were renting with their children, their grown adult children that also had kids, they're getting bigger houses, right? So they're actually feeling that need to fill up some of our larger homes, but it's multi-generational now. We are seeing a lot more roommates come in, too, instead of two roommates, you'll see three people come in and get a house together. The other thing we've noticed that's been really drastic, maybe the last three or four months, is the debt load that we're seeing. So, when we run people's background checks and look, they've got a lot of credit card debt now. We didn't see that as much years prior.
     
    Keith Weinhold  26:50  
    All right, so you're seeing that at the street level, that's a statistic that we can read about, that American savings rates are down and the proportion of debt is often up. You're seeing it in real time, there. Do you see potentially, Andrea, this propensity for people to want to sort of bend things and have someone that's not on the lease live there with them in order to cut costs? So, you know, is there really anything in this environment that we really need to be careful about when we're screening tenants with them having such a debt load, and having to struggle with inflation and rising prices.
     
    Aundrea Newbern  27:23  
    Yeah, absolutely. The debt load, number one, you know, we'll see them increasing, and that's something we want to keep an eye on. So, we're having to kind of retool our policies to look more critically at that debt load. They may not be delinquent on anything now, but if we've seen it gone up significantly in the last few months, I bet you it's coming. So, we're trying to retool our policies to be able to deal with that, you mentioned people having unauthorized tenants in the home that has persistently been an issue for us, maybe the past year. We find this often that that's happening, and usually it's because that person wouldn't qualify on the application, but they still bring in money and can help with the rent. The third thing, and this is with the advent of AI, right, how big AI has come is, we're seeing a lot of documents that are clearly fraudulent, but they look really, really good, because AI has created them. So that's another issue.
     
    Keith Weinhold  28:09  
    Gosh, that's interesting. Well, I want to ask you more about AI, and you know, Aundrea, America is in such a weird time with AI today. You probably saw it at these college graduations across the nation, where a luminary is up front at the lectern making a commencement speech, and they get booed by students for talking about embracing AI, and that's probably because the student feels threatened about AI taking the job that they might not get, and you know what's funny, I suspect there's some of those same students, they loved it when AI helped them write an essay in order to get to graduation and wear that cap and gown, so..
     
    Aundrea Newbern  28:51  
    Absolutely.
     
    Keith Weinhold  28:52  
    Yeah, that's what I knew when I say that we're in a weird time with AI, but I know that you've really embraced AI as a property manager and investor almost from the get-go to make your property operations more efficient, so that you don't have to raise prices on owners, and you can keep those owner expenses down and increase resident retention at the same time. So, tell us more about how you're using it.
     
    Aundrea Newbern  29:16  
    Yeah, so my team, I think, hates me for this right now, but in the last six months we have literally changed our operations front to back in a few different ways. Number one, we've changed the systems that we use, so you know, for vacation rentals as well as long-term rentals, you have your property management system that kind of streamlines everything, and that you do everything in. We've started going to platforms that are a little bit more AI friendly, so they have AI agents built in and they have AI functionality already in them, so that we're not having to purchase additional tools to come in and add them as a layer on top of our systems. So that's kind of the basic thing that we're doing, but the other fun things that I've been able to do, and I'm still, you know, working on this, and we're refining it daily, is using AI actually as kind of like a virtual assistant, essentially. So we do have virtual assistants with a company, and they're great, and we love them, and they do a wonderful job. However, they're human, so they're not perfect, but these AI agents, once you've trained them to do a lot of the back office tasks that your virtual assistants can do, after a certain number of iterations and training, they don't really make mistakes. So knowing that we have that, and we can continue building on that. We don't have to add FTE to our team, which increase our labor costs. That's allowing us to not raise our prices on our clients, and which I'm sure they're all happy about, because other property management companies are doing that right now,
     
    Keith Weinhold  30:33  
    Right, so property management companies are going to have to do this to stay competitive and keep up, whether they want to or not, and when I think about using AI in real estate, you know, one of the first things I think of, just say that tenant journey from attracting the tenant to placing them. When I think of the cutting edge, I think of help with marketing and writing advertisements, which I think is kind of a simple thing to do, sort of an easy way to implement AI, and also when I think about that early part of the journey, really I think about using AI as a leasing assistant, and sort of how you see that more, the 24/7 front desk, if you will. I mean, if you have an AI leasing assistant that can answer questions for your prospective new tenant and follow up with leads that can be a big deal. I mean, a lead that sits unanswered for six hours, they just kind of turn into a cold French fry, and instead AI can answer those questions and schedule that tour. If a prospective tenant asks the same question four times, you know the AI doesn't get frustrated and leave out some sigh. So, can you tell us more about kind of that front end, the marketing, and then the leasing end? Are you using AI as a leasing assistant essentially?
     
    Aundrea Newbern  31:47  
    We are. So, if we talk about maybe the marketing piece of things before we get into the leasing, we're not using as much AI with marketing at the moment. I have had it write some copy for me for some marketing, and I'm not usually crazy about it. I still think it looks like AI right now, so we're having to do a lot of changes with that, but what it has done a really good job at helping us out in the last few weeks is have it go analyze your website, have it analyze how you come up in search functions, right? So, if somebody's going to Google or if they're going to Gemini or they're going to Chat GPT, what's happening with your website and your company when people are looking for property managers, for example, it does a very thorough check on that. It's also really good at reviewing your website and telling you where you have gaps in terms of maybe you need to, you know, change something here or there, or you have certain links that are not helping in your search functionality. So, I think it's really good as far as analyzing stuff. That's kind of about all we've done as far as marketing, as far as a leasing assistant goes, this has essentially been like the biggest lift I think we've had from AI, period, in the last couple years. So, maybe a year ago, we implemented a software, and I'm going to leave the name out, because I'm sure you know I'd rather not do that, but it's a software, and there's a bunch of different options that you can use for this, but essentially it collects all of our leads for us, so we set it up, you know, we set criteria for the type of tenant and our policies for, you know, what type of tenant would qualify, and they call in or message or email this number or this email address, and the AI essentially goes through and asks them a series of questions, lets them know if they would potentially qualify or not. If they would not, then it will not allow them to schedule showings for any of our properties, if they would, with no exceptions. Then we can go ahead and get them scheduled, and the AI actually goes through and gets them scheduled as well. So it is a huge help for us.
     
    Keith Weinhold  33:30  
    That is really nice. Okay, helping out with tenant screening, there can it arrange tours, put them on the calendar, then if they're qualified.
     
    Aundrea Newbern  33:40  
    Yes, it actually gives them an option and shows them all of the dates we have available, so the person can go ahead and schedule their showing. It can provide updates if we need it, so if we change our policy, it can send that out to the tenants for us as well. So that process I would say is about 90% automated right now. It doesn't really take much human intervention, except for us to review things and make sure there's nothing kind of wonky with the schedule or anything like that.
     
    Keith Weinhold  34:00  
    Okay, so if they're qualified and interested, the prospective tenant can fill out an application, and then is AI assisting on the screening, and are you still meeting with them in person before they get the keys and sign the contract?
     
    Aundrea Newbern  34:14  
    Yes, and no. So we still do meet with them in person to be able to do like that walkthrough of the property and make sure we're documenting issues, and all of that, which, by the way, I think in the next year that'll probably be automated as well, but we're not quite there yet. They do not have to come in in person, in terms of signing the lease or anything like that. That's all done remotely. If they want to, they can, but we really don't have to meet with them until it's time for move in at this point.
     
    Keith Weinhold  34:36  
    All right, we're seeing the evolution of AI since it was really Chat GPT that was pioneering and rolling out in November of 2022 so we're coming up on four years of really this activity being integrated into our lives, and I think we both know that it's only going to get better from here, so when we have a tenant that. It's actually placed, of course. I often like to say they call the discipline property management, but it could probably very well be called tenant management. And I think, about, you know, is everything okay after the tenants there? As far as AI having a maintenance triage function, if there's a maintenance request, of course, you're going to want to prioritize something differently if it's a big plumbing leak that's damaging the subfloor versus just having a slow drain, you know. You probably want to be sure either one of those things are taken care of, but one is going to get priority over the other. So, can you tell us more about after that tenants place the maintenance triage and using AI there?
     
    Aundrea Newbern  35:38  
    Yeah, so we've pretty much automated the maintenance process in the last year, other than, you know, actually making sure the vendor went out and did what they were supposed to do. So, right now, with us, a tenant has to go in, unless they have a disability and can't do it, of course, but they have to go in and put in any work orders through our system, and essentially what happens is we've created kind of a workflow, so here's the issues of the types of things that would not be considered an emergency unless they answer, you know, certain questions a certain way. Here are the things that are emergencies and requires to go out pretty much no matter what, right? For the things that are non-emergency, or they're not clear in what the actual issue is, which is probably the number one problem we have, is they say, 'My lights aren't working, that's it, we don't know anything else about it, and then come to find out it was just a light bulb, or come to find out it was just their breakers tripping. The AI actually goes in and analyzes what they put in as the issue and selected, and then asks them a series of questions, and then, based on their responses, it actually tells them what to go do to troubleshoot it. We're seeing right now with data, it's eliminating maybe about 40% of the things that we would send somebody out for, yeah, it is huge, and the tenants are doing it, and they're not really pushing back or having issues with it most of the time, but then there are certain things that AI can't quite figure out, we're still training it on, so we do have to send somebody out or call, but it's having a huge reduction in us having to send folks out for this.
     
    Keith Weinhold  36:56  
    Okay, yeah, we're not talking about completely eliminating humans, but that's huge, if they can have AI give them the answer to maybe some routine maintenance thing, probably that they could have gone and found out on their own, but yeah, that saves 40% of maintenance visits, that's a big deal. All right, so not too much backlash from tenants, not saying, like, oh, hey, I don't want to be talking with your robot, come on, not so much of that.
     
    Aundrea Newbern  37:20  
    No, not yet. Now we are looking right now at implementing an actual AI agent that would answer the phone to handle these types of just maintenance issues, nothing else but maintenance for right now. And we've tested out a lot of different softwares that do this. Some are better than others, but none of them are perfect yet. And I could call and definitely tell I'm talking to AI, maybe some people couldn't. I feel we're probably going to have a little bit more blowback when that starts getting implemented and rolled out.
     
    Keith Weinhold  37:44  
    Yeah, I imagine people are just going to get more and more used to this, you know. I wonder, how much AI is helping you with rent pricing, what amount to set the rent for. I mean, for example, isn't it interesting if AI knows that, hey, a bunch of units in the neighborhood all around you, they already have high occupancy. It's really tight in this sub market, where maybe it would advise you to bump up your rent. So, tell us about how AI is helping you with rent pricing.
     
    Aundrea Newbern  38:12  
    Yeah, so you know, as a broker, I obviously have access to the MLS, which we use for a lot of data, but then sometimes there's rentals that are not on the MLS, so you know an owner went and listed it themselves, and I actually have an agent that their task is to go in every couple of days, and they'll analyze any of our existing listed properties that we have that are not occupied. We're still waiting on somebody to apply, and it'll go and tell me, "Hey, is anything else been listed? Has anything that was out there when we did our review two days ago? Has anything closed? Can we figure out, you know, what price it rented for? Sometimes it can, sometimes it can't, but it'll provide me a report every two days, automated, in my inbox for me to be able to look at on that. So it's really nice.
     
    Keith Weinhold  38:51  
    Wow, this could be hugely useful. Yeah, or imagine on the flip side of that, if AI detects that there are a lot of vacancies in your area that, hey, you probably don't want to get so aggressive with rent increases. In that case, was there any last way that you're using AI in real estate? Maybe something I didn't think about asking you, Aundrea.
     
    Aundrea Newbern  39:10  
    If we talk about long-term rentals, not as much. I think you kind of hit on the main things that we're using it for right now, but if we look at vacation rentals, it is doing a lot more there, I think, at the moment than it is long term. So, for example, pricing - we have dynamic pricing that we use for all of our vacation rentals, and the dynamic pricing isn't perfect, so somebody still has to physically go in and make sure no tweaks need to be made, that there's nothing weird going on in the software. I now have an AI agent that, that is their number one job. They go in once a day, they review all of our pricing. They let me know whether we need to adjust it up, down, change our minimum days, maximum days, and we make the adjustments. We're training it now to actually do those for us, but we haven't let it do it yet, so we're still waiting there. It's still waiting on its approval for me to do that, but things such as pricing, things such as going through and analyzing guest feedback, or guest. First tone, even in messages, it's providing me reports on that daily, so I can help identify problems that are maybe small problems before they become big.
     
    Keith Weinhold  40:07  
    It makes sense that it would be more applicable in short-term rentals with all the turnover that you have there. Well, Andrea, let us know if there's a way for our followers to keep up with you and what you're doing, because people still ask about you here. You're so well liked. Let us know.
     
    Aundrea Newbern  40:26  
    Yeah, so there's a couple of ways. If you're wanting to kind of see what we're doing with property management or our company, you can go to goldenaislesretreats.com There's also for a way for you to get in touch with me there. You can also check me out on LinkedIn or on Facebook, so I'm there as well, and I'd be happy to connect with anybody. I miss our listeners.
     
    Keith Weinhold  40:43  
    Oh, Andrea, it's been valuable. It's been great having you back.
     
    Aundrea Newbern  40:46  
    Thank you, Keith.
     
    Keith Weinhold  40:53  
    Yeah, great to hear from Aundrea again on the show. It has been a few years. If you use professional management like I do, they will most likely be applying AI in a lot of the ways that we discussed. Coming up on the show soon, a life coach that's had a profound effect on a number of guests that we've hosted here on the show over the years. He has agreed to join us. He doesn't do a lot of appearances like this, so it'll be great. We'll hear directly from Daniel Thomas Hind, and how he transforms the lives of so many business people and investors professionally, physically, and mentally. I'm confident that it's going to help you get more out of life too. Until next week, I'm your host, Keith Weinhold. Don't quit your daydream.
     
    Speaker 1  41:45  
    Nothing on this show should be considered specific personal or professional advice. Please consult an appropriate tax, legal, real estate, financial, or business professional for individualized advice. Opinions of guests are their own. Information is not guaranteed. All investment strategies have the potential for profit or loss, the host is operating on behalf of Get Rich Education LLC exclusively. 
     
    Keith Weinhold  42:13  
    The preceding program was brought to you by Your Home for Wealth Building, getricheducation.com.
  • Get Rich Education

    609: Is the Worst Over for Multifamily Housing? | Featuring Neal Bawa

    08/06/2026 | 51 mins.
    Keith talks with data-driven investor Neal Bawa, the "mad scientist of multifamily," about why apartment values have dropped 20%–30% while single-family prices have stayed resilient. 
    They break down how interest rate shocks, the homeowner lock-in effect, and a wave of new multifamily supply are reshaping returns for today's investors. 
    Keith and Neal also dissect the build-to-rent model—who it really serves, how apartment oversupply is pressuring its rents, and why pending legislation could upend the space. 
    Neal closes with a specific, data-backed timeline for when multifamily rents and values may finally turn the corner, giving listeners a concrete roadmap instead of vague market guesses.
    Resources:
    Grocapitus Website - https://www.grocapitus.com
    Multifamily U's Free eBook: Location Magic - https://multifamilyu.com/lp/location-magic-ebook/
    Multifamily U's Investor Club – https://multifamilyu.com/club
    Episode Page:
    GetRichEducation.com/609
    For access to properties or free help with a
    GRE Investment Coach, start here:
    GREmarketplace.com
    GRE Free Investment Coaching: GREinvestmentcoach.com
    Get mortgage loans for investment property:
    RidgeLendingGroup.com or call 855-74-RIDGE 
    or e-mail: info@RidgeLendingGroup.com
    Invest with Freedom Family Investments. 
    For predictable 10-12% quarterly returns, visit FreedomFamilyInvestments.com/GRE or text  FAMILY to 66866 
    Unlock truly passive real estate income—visit flockhomes.com/GRE today to see if your properties qualify for a 721 exchange with Flock Homes.
    To get in the best physical, mental, and professional shape of your life, go to DanielThomasHind.com and apply for Daniel's intensive 1-on-1 coaching for burnt-out entrepreneurs and executives.
    Will you please leave a review for the show? I'd be grateful. Search "how to leave an Apple Podcasts review" 
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    Complete episode transcript:
     
    Keith Weinhold  0:00  
    Keith, welcome to GRE. I'm your host, Keith Weinhold. The single-family real estate market is steady, but with apartment building values down 20 to 30% since 2022 when will the multifamily Armageddon end? We ask our qualified guest, and how will slowing birth rates in immigration affect real estate? And more today on Get Rich Education. You know, Mid South Home Buyers, that top Memphis turnkey provider. I learned that a secret weapon behind their explosive growth is more than just you buying their properties, it's an executive coach for nine years now, their CEO, Terry Kerr, and his COO, Pat Nix, have worked privately with a coach who I've now learned from too, and he doesn't market himself online anywhere. After 12 years behind the scenes, that coach is now making himself available exclusively for GRE listeners. His name is Daniel Thomas Hind. If you're a hard-charging business owner or investor who wants to get in the best shape of your life, physically, mentally, and professionally, you can fill out an application for a free consult. This is private one on one coaching for those willing to go to uncommon lengths to achieve uncommon results. Thanks to Daniel, we've all become better leaders, better operators, and better men. It started by showing up for ourselves. Now it's your turn. Go to Daniel Thomas hind.com H I N D, that's Daniel Thomas hind.com and sign up before Spotsville Flock homes helps multifamily owners exit the operator grind, whether it's your six plex or a 50 unit apartment, through a 721 exchange. This defers your capital gains tax. It's a strategy long used by institutions. Now you can swap tenants and toilets for passive income and zero management. Request your initial valuations. See if your property qualifies at flockhomes.com/gre That's F L O C K homes dot com slash G R E.
     
    Neal Bawa  2:13  
    You're listening to the show that has created more financial freedom than nearly any show in the world. This is Get Rich Education.
     
    Keith Weinhold  2:29  
    Welcome to GRE from Valencia, Spain to Valencia, California, and across 188 nations worldwide. America's favorite shaved mammal on a microphone is back with you for another wealth building week. I'm Keith Weinhold, and you're listening to Get Rich Education. The world's biggest problems are the world's biggest businesses. That's not a coincidence, and that's why we discuss housing here. And there's been a chronic shortage of affordable housing last month at a commencement speech, Harrison Ford, yes, the guy that played both Han Solo and Indiana Jones, talked about how a fulfilling life has both passion and purpose. Passion is what gets you out of bed in the morning, purpose is what helps you sleep at night, you and I. We can bring this mindset to our lifestyle, to the business we do, and to our investing. Treating tenants well is what helps real estate investors sleep well at night. While we're doing well, we can be doing good too. Multifamily syndicators keep failing, going out of business, and losing all of their investors' money due to mortgage rate resets. It just keeps happening. What this really means, that these groups that pooled together investor money to buy apartment buildings, largely that were set up in 2022 and earlier keep blowing up almost fully due to the fact that interest rates reset higher. Some of them had a fixed rate for five years. Well, rates spiked four years ago, and that's why a lot of them have yet to blow up, and these apartments have lost so much value that no one will refinance them, you know. Even if that apartment operator increased the net operating income over the years, even if rents went up, it doesn't matter. So, you still haven't heard the last of it. Do you remember a couple years ago, when a lot of people in the apartment space, they were saying just stay alive till 25 and that nonsense, like if you keep your head above water until 2025 oh well, then rates are certainly going to fall, and everyone's going to be okay. Well, 2025 is long gone. 
     
    Keith Weinhold  5:01  
    Mortgage rates haven't fallen in any significant way, so that survive until 25 thing or whatever mantra derivative people used that was a farce, like I've said on the show here for years. You cannot predict interest rates, so I didn't make the call that they were going to go up or down at all, because you can't predict them, but so many people said, oh, rates will fall substantially by now, no way, you just can't make that assumption, you've got to take history over hunches, and all of that, a lot of those multifamily deals 100% depended. depended on refinancing at favorable rates, and that's exactly why they failed. A surefire way to look foolish is to predict interest rates. We'll talk more about the multifamily Armageddon with today's guest. I also want to get into what's called the 21st century road to housing act, because that became one of the most hotly debated housing policy provisions this year. And what this is, is a Senate bill, and it would require certain large institutional investors that develop these bills to rent single family communities. It would force them to sell those homes to individual buyers within seven years. So, in other words, what a big firm could do is build a neighborhood of rental homes, lease them for up to seven years, but they couldn't hold on to them any longer than that. They couldn't hold them indefinitely as rentals, this bill is not aimed at you, the individual investor. It is aimed at big institutions, and what I mean by that is that's generally defined as owning 350 or more homes. That's what we're talking about here. Small landlords and mom and pop investors are not the target, it targets corporate portfolios, and this means groups whose names you've probably heard of, like Blackstone, First Key Homes, Progress Residential, and Invitation Homes. They are some of the heavyweights that the government is looking to clamp down on, so whenever you hear someone talk about big Wall Street landlords, that is who they're talking about. Now, some groups are pretty worried about the 21st Century Road to Housing Act, like the NHB, that's the National Association of Home Builders, and a lot of multifamily groups are concerned, and why is that? Well, the effect is it could dramatically reduce new housing production.
     
    Keith Weinhold  7:44  
    See, a big institution like First Key Homes or Blackstone, they wouldn't want to even get into this business anymore. They wouldn't want to build big build to rent communities anymore if they have to sell them all within seven years. See, they want to buy and hold for the long term, kind of like what you and I are doing, because you and I know that owning a group of selective buy and hold single family rentals is a really profitable place to be, but so if they don't want to build, then that creates a reduction in supply, which could make prices go up, and then obviously hurt those trying to afford their own home. Well, that would defeat the purpose of this whole thing. I mean, my gosh, this always seems to happen when government gets involved. So, the 21st Century Road to Housing Act could limit supply, which is the exact opposite of its intent to get first-time home buyers into their first home, and if this passes, it does have bipartisan support. This lower supply, then yes, indeed puts upward pressure on prices. Just amazing. So then it could actually go on to help the everyday mom and pop investor, like you and I, that already owns property, the individual at last check, though they're looking to pass a version that still restricts some of these giant institutions from getting into build to rents, but yet it does not have that seven year sale requirement. What's really important to remember here is that Washington, they're looking to stifle big Wall Street players from the rental market, which could reduce supply. They're not targeting individual investors. The context that's important is that these groups, they own 10s of 1000s of homes, they don't own hundreds of 1000s, and they don't own a million, so it's a really small percentage of the housing market, whatever direction policy breaks, then the headlines that it creates are just greater in magnitude than the effect on the market is. It's an important frame of reference here. Let's meet this week's guest. This week we're welcoming back a guest that we haven't heard from in a year or two in real estate circles. He is popularly known as the mad scientist of multifamily. He's quite an in-demand speaker. He has a $500 million multifamily portfolio that he essentially shares with over 1300 investors. He's sharp, a good educator, and a straight shooter. That's why he's here. It's a warm welcome back to Neal Bawa.
     
    Neal Bawa  10:32  
    Thanks for having me on the show again. It's delightful to be here, and so many interesting things to talk about in the world these days.
     
    Keith Weinhold  10:38  
    There really are.. I don't know if we can get it all in, Bawa is spelled B A W A. Neal, I want to get to your future housing market outlook later. How you think the future looks, including when multi families quasi Armageddon might end. But first, you're known as a data driven real estate guy. Tell us about that, and how being data driven makes you profitable.
     
    Neal Bawa  11:03  
    I see concern, and I'll tell you why. The single family and multifamily market have been atrociously incredibly divergent since the first quarter of 2022 They have not tracked yet each other at all, even though if you look at the last 50 years, they tend to track each other. So you know, 2008 was a Armageddon for single family, Armageddon for multifamily, and they both sort of came up in 2012 2013 and then they had a really good time until Covid.
     
    Keith Weinhold  11:30  
    Yeah,
     
    Neal Bawa  11:31  
    but the second quarter of 2022 is when Fed started raising rates, and since then we've sort of slid - multifamily has gone down in terms of pricing between 20 and 30% depending upon the metro, you know, and depending upon whether it's new construction, new construction assets have gone down more than 30% and existing assets that are filled up have gone down by 20 to 30% depending upon the metro. So, metros that have a large amount of supply, closer to 30% decline in value, the metros that have less supply probably closer to 20% decline in value, right.
     
    Keith Weinhold  12:03  
    Demand demand has been pretty resilient. It's more of a supply story.
     
    Neal Bawa  12:06  
    It's a huge supply story, right. So, if you look at, you know, occupancy, essentially what's happened is there was so much supply that came in that really people started on those projects in 2022 maybe they didn't start a construction until 2023 they didn't finish construction until 2025 so they started leasing up in 2025 They had to give offer concessions two months, sometimes three months free, and so that pushed down the rents in 2025. And they're not done, because you typically can't rent an apartment in six months. If it's brand new, it's going to take you about 18 months to rent it, and sometimes 24 months, and so it's affected our rents in 2025 it's affecting our rents in 2026. Now it's unlikely to affect it in 2027 but we'll go there, you know, at a later stage. But at the moment, we, what we've seen is negative rent growth in the United States for multifamily for the last 12 to 15 months, and what I think is going to be negative rent growth in Q of this year and Q2 of this year, so Q1 was negative, Q2, which we are in now, is likely to be negative or flat now. Single family, on the other hand, has gone in a different direction, which has been very difficult to understand, and I believe it's taken me a while to really understand this, but I think I've finally figured it out. Single family prices are not down since 2022 which makes no sense at all, because the average mortgage in the United States today is almost double, almost double, not quite double, but almost double of what it was in at the beginning of 2022 when interest rates were about 3.3 3.4% Right now we're sitting around, you know, six and a half percent interest rates, so not quite doubled interest rates, but they've obviously gone up a fair bit, and as a result, your average, you know, mortgage has almost doubled, but home prices haven't dropped, which makes no sense if you really think about it, because home prices are a factor of demand, and they're also a factor of people's ability to pay, so if all of a sudden within four years you're paying, the mortgage is doubled, then less people are going to be able to buy, but it stayed up, the market has stayed up, and the biggest reason it stayed up is because of what is known as the lock-in effect. So, the US market typically has a million new homes every year, and there's more than a million existing homes that are transacted, right? So, it's an open market, it's a perfect competition market, but it hasn't been perfect competition for the last four years, because so many people locked in ridiculously low interest rates. 
     
    Neal Bawa  14:28  
    Perfect example, in 2021 and 2022 I have a 15 year mortgage at 1.75% If I sell my house back to myself, my mortgage quadruples, quadruples, right, because it goes from 1.75% to six and a half percent, so I can't even imagine even think about leaving my home, right, because it's just such a perfect loan. Most people don't have anywhere near 1.75% but there's lots of people with more mortgages in the 3% three and a half percent, and 4% range that basically can't go anywhere, and because those homes are not coming into the market. The last three years the market has had this unusual not enough supply factor, and that's been keeping prices up. That is ending. That is ending, because what we've been tracking is the percentage of homes in the United States that have low mortgages. Low is simply defined as anything under four and a half percent, and that percentage is going down each quarter, because you know divorces happen, deaths happen, you know people move for jobs, and so every time that happens, that locked in rate goes away, because you sell your home and move on, and so for a while that lock in effect was predominant, it was controlling everything, but as time has gone on, interest rates were higher in 2324 2526 For also almost four years have passed since the rate started going up. So each quarter the percentage of homes in the US that have these low interest rates has slowly moved down, and we're almost back to a normal timeframe.
     
    Neal Bawa  15:53  
    And this is causing the single family market to not have a conniption, but we're starting to see a balancing of the market, where it's not just a buyer's market anymore, in some places it's actually seller's market, some places it's a buyer's market. So we're now starting to see home prices drop in number of markets in the United States. I can't say that they've dropped in super majors, but we're seeing a flattening out effect of home prices in most metros in the US, and there should be a flattening effect. Just to be blunt, I mean, obviously I own a bunch of single-family homes, so I just wanted them to keep going up for selfish reasons. But if you think about it, we had huge home price growth in like 30 plus percent in number of years, 2021 22 and even 23 and during those years, salaries only went up by two to 3% a year. In one year, they went up by 4% and rents also went up like crazy. There was a 2021 was 15% rent growth year. So, at some point, there had to be an adjustment, and we are in that period of adjustment where single family prices are basically flat on a national basis. Yes, going up in the San Francisco Bay Area because of AI, and going up in a couple other technology-heavy metros because of AI, but otherwise fairly flat, and I don't expect that to change for the next year. So, my forecast is next 12 to 18 months, home prices in the US are going to be flat on a nominal basis, they're going to be down on an inflation-adjusted basis, but you know, because of the Iran, more inflation's three and a half percent, so home prices should go up three and a half percent. So, if they stay where they are, well, they're really dropping three and a half percent.
     
    Keith Weinhold  17:29  
    Yeah, before this year began, I released our forecast, it was for 2% nominal home price appreciation in the one to four unit space for the US this year, and I still like how that looks. There's so much to unpack with what you just talked about. In my view, there's nothing unusual at all that when mortgage rates rose sharply a few years ago, that home prices rose as well. Why? Because actually, that's what usually happens, which is counterintuitive to most people. In all of our lifetimes, residential real estate prices have only fallen significantly one time, that was around 2008 due to a number of unusual circumstances. The only thing that's a bit different this time is, of course, how fast rates increased in 2022 and 2023 and people wondering if residential real estate prices could still keep up, and they certainly have, but yeah, you brought up this dichotomy, this bifurcation about how the apartment market and the one to four unit space kind of separated from each other in 2022 or 2023 That's what's so interesting.
     
    Neal Bawa  18:36  
    I do want to point out a couple things, though, and I don't want to be a Pollyanna here and talk about negative stuff, but I think that there's big difference between 2008 and that timeframe and where we are today, and that difference is, and it has multiple parts. Not all of your audience is aware of this. Until about 2012 the United States had very reasonable birth rates. You know, we were one of those countries that had avoided the debacle that Japan, Korea, China, and a number of other countries are seeing South Korea being the absolute worst, where basically they were producing one baby per generation, where you need about 2.2 babies just to kind of keep your population where it is, right, and the US was unusually high in that, and that we were still above that threshold, which meant that our population would continue to grow and not fall. Now, there was two reasons our population was growing: One, we had more than 2.2 babies per household, and second, we had a very significant amount of legal and a very significant amount of illegal or undocumented immigration. Right, so we had both of those pipelines today. All three of those have flipped, so the United States now basically looks like Korea or China or Japan in that every household is producing about one and a half babies, which means that our population growth, which hasn't stopped yet, because it takes a while for these things to catch. Up is likely to stop, like it's, and at some point decline again. Luckily, we're not there yet. The US is a fairly young population, unlike Japan, which is one of the oldest populations in the world. So, it'll, we'll still continue to see population growth, but there is no doubt. And you can ask Chat GPT, right? How has population growth in the United States slowed over the last 20 years. 
     
    Neal Bawa  19:22  
    Make me a graph, and it will make you a very nice graph, and you'll very clearly see there's a slowdown in population growth. The second part is both documented and undocumented immigration. It's my estimate that since this administration took over, somewhere between half 1,000,001 million people have left the United States. Now it's very difficult to get an actual number, as you can imagine. A number of these people were undocumented, so we didn't really know how many there were to begin with. And a number of them, when they left, they also left by an undocumented rate, that you know, path. So we've lost a bunch of those people, and also the people that have stayed in the country, we've lost a number of them in the workforce. Here's a perfect anecdote, Keith. About 33% of the construction workforce in the United States was undocumented, one in three. In Texas, as much as 40%
     
    Keith Weinhold  19:45  
    Yeah, that's huge.
     
    Neal Bawa  19:45  
    It's very significant. Number of those people don't show up for work anymore. I don't think they've left the US, at least I don't think so. But they don't show up for work anymore, because that's how they get caught, right. So, what we've seen is that the construction workforce in the United States has become been decimated over the last 12 months, and the impact is much greater in the second half of 2025 than the first half. Why? Because even though they wanted to do ICE enforcement, they just simply didn't have enough agents, enough facilities, enough judges. When the second half of last year, they sort of started catching up on that, hiring more agents, getting more facilities, getting more judges, and so we started to see a real challenge there. I have properties in 10 markets in the US, and what I can say is about seven of those markets, mostly Southern markets, I am beginning to see dropping occupancy related to this phenomenon. I'm seeing a reduction, and so markets like Georgia and Texas, Florida are more hit than my northern markets like Idaho. I haven't seen any impact at all, but these southern markets, multiple properties, multiple metros, I'm seeing this - people, mostly of Spanish, Mexican origin, not renewing leases. I don't know what they're doing. I don't know if they're sleeping in their cars. I don't know if they're basically just, you know, staying with mom or staying with, you know, some other family. But I'm seeing a very, very big pullback in my leases tied to this, and occupancy is dropping in those markets that are heavily Hispanic. And so I'm seeing the impact of that on landlords, but I also know that there's an impact on the US at all, and overall demand on rentals, whether it's single family or multifamily. This is a significant impact, because I don't think that the Republicans are going to make a U-turn on this. I don't want to get political, but you know, stating the obvious.
     
    Keith Weinhold  19:45  
    Yes, United States had its biggest birth year in 2007 when there were more than 4 million babies born. The average age of the first time homebuyer today is 40 years old. If that holds true, that peak would take place in 2047 And then, yes, to your point about changes in immigration, yes, it sounds like a potentially a reduction in demand with what you're talking about, with some vacancies, and also maybe a reduction in supply when you have fewer construction workers to build these places as well, we're talking about building properties. Neal, I want to talk to you about the build to rent space. Somewhat is build to rent better than traditional real estate? I think that's what we really want to know. And for those that don't know, build to rent means when you construct a property where from day one that construction project is built for a tenant, not an owner occupant. I see a lot of pros and cons there. Can you talk to us about the trade-offs between build to rent and traditional real estate?
     
    Neal Bawa  19:52  
    Yeah, if you think about it, it's a really terrible word, built to rent, because if you think about the word built to rent should be apartments, right, but actually doesn't mean apartments, right? So, built to rent actually means single family or town homes that were built to rent out, right? And then you're like, why don't they just said built to rent apartments and town homes? Well, you know, was too long an acronym, and we suck at acronyms anyway. But BTR, or built to rent, is essentially building single family or town homes, but specifically building them to rent, and it doesn't include any apartments at all, right? And the reason why the BTR market was growing in the last five or six years is that roughly 18 million American families can no longer afford to buy starter single family homes, you know, and by starter I mean, small old single-family homes. That's how Americans usually started, you know, in their 20s and 30s. They would buy these homes, some of them, but they would fix up, and then they over time, in their 30s, late 30s and 40s and 50s, they would upgrade, and then at starting the 50s, it would flatten out, and then the 60s, they would start to downgrade, right? That's been a typical thing that's happened in America for 56 5070, years. Well, that is, cannot happen anymore. And it broke in 2022 until 2022 It was a normal cycle beyond 2022 because interest rates almost doubled, and the mortgages almost doubled, but the incomes only increased by 10 to 20% There became this orphaned generation of Americans, roughly 18 million families, that simply cannot afford to buy that starter home, and they are now forever renters. They don't know it. They think that they're going to catch up at some point, but five minutes with an Excel spreadsheet, I could prove it to them that they're not going to catch up. 
     
    Neal Bawa  25:35  
    Maybe one in 100 families would see a very large increase in income, and that would result in them catching up, but for the most part, as a group, these 18 million families, they're forever enters as a group that didn't exist before 2021 right. It's entirely because of this outrageous increase in mortgages, while not seeing a drop in home prices, that led to this, and so those orphan families, they actually earn pretty well, so these are families that make 70, 80, $90,000 in mid markets. They make over $100,000 if they're living on the coasts or in expensive markets, and they still can't buy that, you know, starter home. And so they don't want to live in apartments. I have lots of apartments, old ones, new ones, and I want these people to live there, but they don't want to live there, and so they've been looking for an option, and that option has been developers like me building communities of 200 300 townhomes or single family homes with a small little yard, and then basically from day one, instead of selling them, renting them out, and then once you're done renting out the whole community with 200 tenants, then you sell that to an apartment company. You know, there's lots of apartment companies in the US that have 100,000 units. Well, they want to buy these because the turnover is lower. So, what happens is most of these town homes and single-family homes for rent. Families come in, and they typically rent for three to five years before they move, whereas in on my apartments I lose 40% of my tenants each year. So, if I have 200 tenants, I lose 80 of them every year, and I have to basically go back, clean up those units, deal with the vacancy. But when I have townhome communities like my Idaho Falls townhome community. I lose a tenant at roughly every four years, and so, as you can imagine, profitability goes up when turnover goes down, right?
     
    Neal Bawa  27:31  
    Because you don't have that cost of turnover and vacancy, and so eventually those large landlords that are holding 100,000 units figured out, I like this, what Neal Bawa is doing, he's building these 200 townhomes, I want to buy these from him when they're rented. I don't want to build them, I don't want to lease them up, I just want to buy them when they're stabilized. And so BTR became that name for that marketplace where developers would build townhomes and single families, rent them out, and then sell them to institutional, and it was some—
     
    Keith Weinhold  27:56  
    People think of fabulous institutionalization of the starter home.
     
    Neal Bawa  28:00  
    And in many ways it is, because what happened is, for a while, these institutional players, like Blackstone and BlackRock, they were like, we are just going to go out and buy 50,000 single-family homes, and that's going to be the institutionalized. Well, that worked really well if you bought in 2008 2009 2010 2011 because you got them bought them at a discount, but when they started buying them in 2015, 16, 17, 18 at ever higher prices, they didn't make any money. So the vast majority of these public funds that were created to buy large amounts of single family have failed if they've purchased anything in the last seven or eight years. If they bought before that, they made huge amounts of money. Family homes are so expensive that basically buying them for rental did not make sense, so these companies have now pivoted to saying we'll only buy communities that have 100 or 200 or 300 of these homes, because then we get the benefits of having centralized leasing, centralized property management, centralized maintenance, and I don't have homes spread all over the metro, they're all in one place, and I can make more profit from that. In theory, that's been good, and you might think that I'm bullish on BTR, but I'm actually today bearish on BTR for one single reason. About seven months ago, Republicans started talking about a bill - I don't know what the name of the bill is, but what this bill does is it forces builds to rent developers like me within seven years of building the property to sell all of the homes in that property to single family tenants, not to Blackstone, not to Blackrock, but to single family tenants. Hasn't passed yet, but it passed the Senate with an 8910 vote, which means that both Democrats and Republicans wanted to vote for this. If it passes the House, and because Donald Trump himself is very heavily opposed to it, he's made it very clear he doesn't like this. He's a developer, obviously. It hasn't passed the House yet, but if it passes the house, that will destroy the build to rent market. No one will ever build build to rent, because the worst possible thing is I build this, and within seven years I have to actually sell it to individual buyers. If I do that, my banks are going to hate me and not give me loans to build BTR anymore. Obviously, there's going to be some grandfathering to the communities that I'm building now, or maybe even build the ones that I'm building in 2027 maybe grandfathered. It usually is, because you know, Congress never does anything retroactively, and they give you a year or two, but if it passes, it's doomsday for BTR. I hope it doesn't happen, but that's the way it's looking, because it's bipartisan. Bipartisan bills are more likely to pass
     
    Keith Weinhold  30:40  
    Now for the mom and pop investor, the individual investor build to rents have obvious appeal due to your point about the lower turnover, lower maintenance costs on a new build, lower insurance costs often on a new build, and then there's the tenant appeal to a new build as well, but of course there is that investor downside. I think a lot of investors are aware of their thin initial cash flow that they're going to have on build to rent, but you know, Neal, another downside with build to rent, I think a lot of investors don't look at is, hey, just how many of these things are they building? Are they building 500 of them? Do I have some overbuild risk if I buy into this community that could suppress occupancy and rents for a while.
     
    Neal Bawa  31:21  
    What we've seen is that when Built to Rent started out in 2017-2018 it was its own asset class. It wasn't competing with apartments, it wasn't competing with single family rentals, it was just its own thing. However, in the last two or three years, as more and more apartments flooded the marketplace, we had a glut. It moved away from that. It basically started getting affected, and the rent started falling, just like any other portion of the market. You know, think of it as three portions of market. There's the built to rent, which I described, you know, brand new single family homes, town homes per rent. There's the apartments, both brand new and existing, and there's the single family rentals, right, which there are millions of. What we are seeing now is it's become one market, right? All of them are affecting each other, and the apartments, which have a huge amount of glut, there's a massive amount of new apartments that have come in in the last two years, are really pushing the rents down for single family, they're pushing that rents down for BTR. So, at this point, what I would say to people that have this concern, Keith, is simply look at incoming apartment supply, because if you're in a marketplace, and I'll give you examples of really good markets that are crushed right now. If you're in a market that has a lot of incoming supply, whether you buy a single family rental, a quadplex, a 50 plex that's an apartment, or 100 unit BTR, you're going to suffer for rent growth if you have a lot of incoming supply in 2026 and that is across the board in every market in the US. Huntsville, Alabama is, in my opinion, one of the most interesting markets in the US for 5 year, 10 year growth, right? 
     
    Neal Bawa  32:54  
    If I had to say you don't need a loan, it's just your own cash, no investors, where would you put money in? It would be at the top of my list, not at the very top. Idaho Falls is definitely the number one market in the US in my list, but Huntsville is up there. But right now, do you know what rent growth in Huntsville is? Minus 2% negative 2% Why? Because there's 6000 units coming into a market that's, you know, 1/5 or 1/10 the size of Phoenix, right. It's 1/10 the size of Dallas, but it has half the units of Dallas or Phoenix coming in, and so rent growth is negative there. So, what I would say is today absolutely everyone that is an investor should understand that we live in the magic world of AI, and you should be talking with Chat GPT about incoming supply for any market that you're interested in, and using that to make your decisions, because all of these markets merged, BTR, new apartments, old apartments, single family, everything has emerged in the last 24 months, where they're all affecting each other, and if there's too much supply of any one kind, it's affecting all of the other markets, and that's the message that I have. And none of this is like you have to go buy a $25,000 software like Costar today. Chat GPT is your costar.
     
    Keith Weinhold  34:11  
    You're listening to Get Rich Education. We're talking with the mad scientist of multifamily, Neal Bawa, where we come back, including what he thinks about recovery for the beleaguered multifamily market. I'm your host, Keith Weinhold. What if you got your mortgage loans the same place I get mine? You sure can at Ridge Lending Group, NMLS 42056 They provided GRE listeners with more loans than anyone, because Ridge specializes in investment property. They'll help you build a long-term plan for growing your real estate empire with leverage. Start your prequal, and even chat directly with President Caeli Ridge. While it's on your mind, start at ridgelendinggroup.com that's ridgelendinggroup.com 
     
    Keith Weinhold  34:56  
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    Speaker 1  36:00  
    This is the star of the A E Show, The Real Estate Commission. Todd Rollette. Listen to Get Rich Education with my friend Keith Weinhold, and don't quit your daydream.
     
    Keith Weinhold  36:20  
    Welcome back to Get Rised Education. We're talking with Neal Bawa, a really sharp multifamily syndicator who's also highly data driven. And Neal, tell us more about the beleaguered multifamily market that had those aforementioned problems really cropping up in 2022 and we had a lot of supply and spiking rates. What does it look like for the path to recovery for the US multifamily market?
     
    Neal Bawa  36:45  
    Luckily, demand is strong, and even though occupancies have dropped, typically the multifamily market, the large multifamily market in the US, tends to be between 95 and 96% occupied. Okay, and right now we're on 93% so that all that incoming supply means that about 7% of our apartments in the US are empty at the moment, we're trying to fill them, and we are seeing that occupancy drop, not across just new apartments that are leasing up, but also drop in class B and class C. We've also seen a huge increase in concessions, so I studied this quite obsessively, and I can tell you that 2026 in some markets is the recovery year, but not across the board in the United States, and the reason for that is sentiment. Once renters get used to huge amounts of concessions, it's like a drug, it takes a little while before you wean those renters off of those drugs, and so there's that hit right now. Every renter program,
     
    Keith Weinhold  37:44  
    Everyone wants their freebie for good. 
     
    Neal Bawa  37:46  
    Yeah, exactly. It's like, hey, what, you're not giving me two months free? Hey, what, you're not even offering me one month free? It takes a while for that expectation to happen, because there's such a huge amount of concessions in the US. So, to me, there are a few markets, usually the smaller markets or very fast growing markets, where there's a recovery in 2026 but otherwise 2027 The first half of 2027 is recovery. The second half of 2027 is fast rent growth in a lot of markets. Why? Because remember, interest rates have been high since 2023 A lot of projects were started in 2022 went into construction in 23 came to market in 25 and 26 Lease ups are happening in 25 and 26 By early mid 27 these are all leased up, right? The second half of 2027 there isn't a lot of delivery in any of these big markets, because to deliver in the second half of 27 you would have started construction in that second half of 2025 and I counted those permits market by market. There's just not a lot, because by that time everyone knew that projects were not getting funded, everyone knew that interest rates were high, so there wasn't a lot of supply of new starts in the apartment market in the second half of 25 so there's not going to be a lot of delivery in the second half of 27 and all of the existing stuff would have been leased by then. So 2026 is one of those years where we could still see more concessions in the second half of 2026 I still see rent growth for apartments to be flat. You mentioned single family might be a little bit higher. It tends to be a little bit higher than apartments in terms of rent growth, but I think flat rent growth for 2026 is what I'm projecting. I'm projecting small rent growth in the first half of 2027 for most markets, and then I'm projecting robust rent growth, call it 3% or greater on an annualized basis, in the second half of 2027 and I'm projecting that most markets in the US that are not seeing a population drop, so count out places like Detroit are going to see a very aggressive rent growth, four or 5% rent growth, that's aggressive in our world, in 2028 28 and 29 are shaping up to be. Supply deficit years, years where supply is well under demand.
     
    Keith Weinhold  40:05  
    It's pretty easy to project completions when you just go ahead and look at starts, and really, what you're counting is the story of absorption.
     
    Neal Bawa  40:14  
    Yep, and what's nice about apartments is you can actually build a single family home in about nine months, right, but you can't build apartments in less than 24 months. There's just so much permitting issues, there's so many delivery issues, fire code issues, and so we have a crystal ball on the multifamily side that we are now getting better at using. I don't think the industry was very good at this in 2022 but now we're really all obsessed with how many permits does my metro have, and how many permits does my state, and how many permits does the US have? And everyone that I know in the industry that's data driven knows that there's a massive glut now, maybe a little bit of a glutton that remaining portion of 2026 equilibrium in 27 and a huge, huge supply deficit in 28 and 29 So everything that I'm doing is based on this, and this crystal ball actually works because of that two year gap between shovels in the ground and delivery,
     
    Keith Weinhold  41:10  
    and it sounds like you've recommended Chat GPT as a go-to source for investors to look into these things, that happens to be my favorite one as well, and you are well, maybe it's a bit too much to say, but it almost feels like to me pioneering with the way that you use AI. In fact, I know before our show today you were running some other things in the background that made me wonder, hey, am I talking to the real Neil or the clone Neil? I know I've got the real Neil here, but why don't you tell us about how you're using AI to make data-driven decisions in real estate?
     
    Neal Bawa  41:40  
    Sure, so the first thing is that we've completed our journey with the low hanging fruit of AI. Every single person in our company is fully trained on how to use Chat GPT. Most of our research-related processes are automated. For example, 100% of our investor updates are now written by Chat GPT. What we do is we go into our property manager meetings on Mondays or Tuesdays sit down with them, beat them up, and the transcript is then taken by our team in the Philippines. They take that transcript and put it into a pre-trained Chat GPT string, it's called a custom GPT, and the string took a while to train, but now that it's trained, all it needs is a transcript. We just copy paste it in, we don't give it any instructions, and it outputs a really wonderful investor update, right. And so our updates for our investors are 99% written by AI. Of course, we'll go in and add our comments at the end of the process. So we've automated investor updates, rent comps, so you know if we are underwriting a new property today, what we do is we simply go into a Google file and copy paste the address and hit enter roughly once a minute. A software, which is written by AI - we're not coders, but the software knows how to write code - it checks the file, if it sees a new address, it goes in there, grabs the address, and then it basically goes to apartments.com rent.com realtor.com and all of these places, and checks the rents for this particular property in two mile radius. It eliminates all the ones that don't match, like you don't want to match the rents of a 1970 or 80s built property with a brand new 25 built property. Those are not comps, it's not comparable. So it basically is very careful, it keeps a radius range of two miles, and also basically is a property of the same kind, you know, like it never matches up a three story property with a 10 story property. Those don't match, one of them obviously is more of a central business district or downtown sort of thing, and so it basically grabs all of those rent comps and then puts them into a file and posts in a Slack channel. Usually it takes it about 1213 minutes to do that, and so whoever put that address in about 12 minutes later goes into the Slack channel and says, "Hmm, these are all my rent comps, right? And boom, now you're basically, you have all these ready rent comps. So, what we've done is, we've automated a significant portion of what we are doing with both our property managers and inside the company with acquisitions and things like that, we're also scraping massive amounts of data from the Bureau of Labor Statistics website, which we just couldn't deal with that data before, and building very beautiful, very interactive dashboards. We don't use Chat GPT for that. We find for dashboarding a tool called Claude, which is by a company called Anthropic, is much better, so we have currently over 150 interactive dashboards that Claude has created that update in real time and give us access to data. If anything, I find that we are in this incredible time where decision making has become much easier, as long as you spend time with these tools. So, in our company we have an absolute mandate that no one has broken for the last year. One year per day, people must program, and by programming we mean issuing common language instructions to tools and build dashboards and build software that automates our work. Have we laid off anyone because of this? I mean that. Be the next obvious question. The answer is no, because it's made it easier for us to serve a much larger audience, so it's easier to grow your company. We just are not hiring anyone, and we haven't hired anybody for the last 18 months, so we have a hiring freeze, but at the same time all of our people are employed because they're they're now much more valuable. So everyone in our company is now a programmer, and even though that sounds weird, it's completely true.
     
    Neal Bawa  45:24  
    Every single person in our company writes code, and they write code by talking with Cloud Code or talking with Chat GPT, and then Chat GPT, of course, does the actual code writing, but people have become very, very good at answering questions and saying, "I want a dashboard like this, turn these radio buttons into drop boxes, and give me the last month, and last three months, and last 12 months, and do this, and do that, and connect this, and I also want to host this on a server, but I want to make sure that only I can see it. I need a password added. Imagine 1000 of these conversations happening in our company every day. Yeah, that's interesting. And what you just described
     
    Keith Weinhold  46:00  
    there at Gro Capitas is somewhat of a microcosm for what's happening in the broader economy, where we've been in this low high or low fire environment for quite a while. Well, Neal, as we're winding down here, we recently had a new Fed chair come in. It seems incomprehensible to me that there could possibly be any rate cuts. I don't know how we could responsibly make a rate cut with all these inflationary layers. We had the pandemic, and then terrorists, and then the Iran war, and the energy shocks, and all these bottled up supply chains. What are your thoughts with regard to the Fed?
     
    Neal Bawa  46:29  
    I still think that we'll get one rate cut, and that rate cut will be based on political pressure. So, for the first time ever, I have seen the Fed break into factions, so if you look at the latest Fed meeting, which happened, you know, there was dissent, there were two clear factions, so the Fed is becoming less data driven and more faction driven, and I think that one of the factions, which obviously wants rate cuts to go down, is going to triumph at some point later in the year, but until we get past the incredible increase in inflation because of the Iran war, I don't think that faction is going to win. Right, there's three or four people in that faction, that's not enough votes to get past the others. So I'm predicting no rate cuts until Q4 of this year. If the Fed was entirely logical, there should still not be a rate card in Q4, but I think it'll happen because there's political pressure.
     
    Keith Weinhold  47:25  
    The preservation of independence is key. Neil Bhawa, this has been great, and a lot of people learn from you. You're a brilliant educator, as well as what you're doing in the multifamily space, and a lot of other places. So, if someone wants to connect with you, learn more about what you do. What's the best way for them to do that?
     
    Neal Bawa  47:43  
    So we built a website called Multi Family University. It's completely free. There is no subscription. There's no upsell. We do not have an educational product, but what we do is each year we have 8-12 webinars that we create with their extraordinarily good looking thanks to the use of AI. Yay, and we share them with an audience, and usually between 5000 and 1000 people attend our webinars each year, of which roughly 1% become investors with us. The rest, the remaining 99% just continue to get free access to data, and we cover every imaginable real estate topic: Single family, multifamily, industrial hotels, self storage, Airbnb, and even controversial topics outside of real estate, like climate change or impact of climate change and impact of AI. So you know, multifamily university is the best place you can go to, multifamily you.com/club It's a free club, and it's free forever.
     
    Keith Weinhold  48:42  
    Neal, it's been valuable to our audience. Thanks so much for coming back out of the show.
     
    Neal Bawa  48:46  
    Thanks for having me.
     
    Keith Weinhold  48:53  
    Oh, a terrific, wide-ranging chat with Neal. There, yes, this interesting 2022 divergence between single family and multifamily, the slowing birth rate, and how that won't really catch up with real estate in a big way for perhaps 20 plus more years. How single family rentals beat multifamily on the basis of tenant retention, and a lot more that we covered there, and he's got a good data driven timeline for apartments being back in favor by 2027 and 2028 After the interview, Neil and I chatted some more off Mike, and he would like to come back on the show next year. We're probably going to have him, because we have a lot more to talk about at that time. We can see if the multifamily market is really healing. Also, did you pick up on this? I wonder why, for his own home he would get a 15 year mortgage at 1.75% interest, so I'll have to ask him about that. That's surely a fantastic interest rate, but a 15 year loan rather than a 30 year that maybe he could have gotten at two and a half percent at the time. Well, 15 year probably. Is not the best use of capital, because it increases your equity position rapidly. When instead, those dollars could have been out in the market earning an actual return somewhere else. But he's a smart guy, he must have an answer. We can talk about that at that time. We've got a lot of terrific shows coming up here on the GRE podcast, specific learning episodes, where it's just me teaching you, as well as new guests and returning guests too. Until next week, I'm your host, Keith Weinhold. Don't quit your daydream.
     
    Speaker 2  50:35  
    Nothing on this show should be considered specific personal or professional advice. Please consult an appropriate tax, legal, real estate, financial, or business professional for individualized advice. Opinions of guests are their own. Information is not guaranteed. All investment strategies have the potential for profit or loss. The host is operating on behalf of Get Rich Education LLC exclusively. 
     
    Speaker 2  51:03  
    The preceding program was brought to you by Your Home for Wealth Building, getricheducation.com.
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About Get Rich Education
This show has created more financial freedom for busy people like you than nearly any show in the world. Wealthy people's money either starts out or ends up in real estate. But you can't lose your time. Without being a landlord or flipper, you learn about strategic passive real estate investing to create wealth for yourself. I'm show host Keith Weinhold. I also serve on the Forbes Real Estate Council and write for Forbes. I serve you ACTIONABLE content for cash flow on a platter. Our bottom line in real estate investing together is: "What's your Return On Time?" Where traditional personal finance merely helps you avoid losing, you learn how to WIN. Why live below your means when you can grow your means? Since 2002, international real estate investor Keith Weinhold owns multifamily apartment buildings to single family homes to agricultural real estate. New episodes are delivered every Monday.
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