Trillion Dollar Real Estate Consolidation

Mike: This is the FlipNerd.com Expert Real Estate Investing Show, the show for real estate investors, whether you’re an investor or brand new. I’m your host, Mike Hambright and each week I bring you a new expert guest that will share their knowledge and lessons with you. If you’re excited about real estate investing, believe in personal responsibility, and taking control of your life and financial destiny, you’re in the right place.
This is Episode Number 382 and my guest today is Greg Rand. Greg has his ear to the ground of what’s happening in the real estate investing industry and how it will impact individuals like you and me, mainstream investors, more than anyone I know. Now, if we know anything about this industry that we call home, it’s constantly changing. In today’s episode, Greg shares details on how the industry is continuing to consolidate and how the big institutional guys are going to continue investing heavily into the single-family market. Now, given that most investors that are listening to the show are primarily wholesalers, fix and flippers, and rehabbers, this creates a great opportunity for you to sell your houses into. It’s a new customer base that you can sell to.
So Greg also shares some exciting things happening with Fannie Mae and Freddy Mac to provide long-term fixed-rate loans for you as a real estate investor beyond the four or 10 that historically they have been willing to provide as the government is becoming more and more investor friendly. Imagine that. As we approach the new year, this is a great episode to get your annual dose of what we have to look forward to in the year ahead. Please help me welcome Greg Rand to the show. Hey Greg, welcome to the show.
Greg: Thanks, Mike. How are you?
Mike: Good, good. Good to see you. I was just telling you . . . For our listeners out there, Greg’s been on the show before. This is Episode Number 382. Last time Greg was on was Episode Number 80, so I guess 302 episodes . . .
Greg: You found 302 other people to talk to before coming back to me?
Mike: Yeah. It’s interesting. When I have people on the show and they’ve been on before, it’s always interesting to see. It never feels like it’s been . . . because that’s probably been . . . our first year we were doing three show a week, so that was probably three or three and a half years ago that you were on, so it’s hard to believe.
Greg: Time flies.
Mike: It’s kind of like when you have kids. They’re your benchmark for like years and age and so for me, it’s not only my son but it’s also the show, like, “Oh, that was three years ago.” Anyway, good to see you, man.
Greg: Good to see you too.
Mike: So what I’m excited to talk about is you’re one of the few guys that I know that really have their ear to the ground of what’s going on at a little more of an institutional level, which trickles down to all of us individual, kind of mom and pop, main street type investors, so I think it’s good for people that are listening right now, if you’ve been an investor for a while or even if you’re brand new, truthfully, you need to understand what’s going on at the institutional level and how that’s going to impact you. The good thing is it’s creating a lot more opportunity for individual investors and Greg is going to share some of that with us today. Greg, before we jump in, why don’t you just take a couple minutes and tell us about you and how you got into real estate?
Greg: I was born into it. My mother was a real estate agent and broker up in New York, in the suburbs of New York and I kind of grew up in the business. They call us the SOB’s, right? Son of Broker. So I worked in the offices and then she eventually started and had her own company. And all along the way, it always struck me that the industry didn’t treat homes as anything but homes. It didn’t treat them as investments. The industry wasn’t really great at doing anything except for owning a home was a great idea and that’s it. They didn’t really talk investment for the most part and so I was kind of up to my ears in the residential real estate business and I was mystified at how they were underplaying their hand.
You know, I had uncles and relatives and neighbors who were accumulating real estate as small investors and they were bullet proof after doing that for 15 or 20 years and yet the industry that sells houses wasn’t stepping up and really learning it. So, along the years during my career, I made my way into real estate technology with a bent towards the investment quality, the asset quality of single family homes for people that are going to live in them or are going to rent them out.
And then eventually I made it all the way full time into when I started on America back in 2010, it was all about, “Well darn it, if the industry that sells houses is not going to wake up no matter how many ear horns I blow in their ear and cymbals that I try to crash together to get them to pay attention, we’re just going to go over here and do it without them.” Some of them were participants in this but for the most part, that industry as a home-ownership industry and the SFR, Single Family Rental industry that we’re hip deep in now is one of these things that has been in my head for 25 years and then finally, there was a housing crisis, everybody’s freaking out but there’s going to be an investment boom on the other side of this thing and I know it, so let’s build a company around helping people.
From our perspective, it wasn’t so much focused on buying distressed property as it was buying property in the path of all this new rental demand that was coming, all these houses that were being vacated, and families who already adopted dogs and already went to the schools and wanted to stay in a home but couldn’t live in one they owned. And so we got involved in servicing the institutions that were accumulating houses all across the country and then flipped the switch to being an online platform for occupied rental portfolios.
Mike: Yeah. That’s awesome, man. I think the traditional brokerage model has evolved a lot more over the last few years. It’s probably been what you saw over the couple decades before that, right? I mean, investment properties are a little more of a proven asset class now. So, if you were to ask any broker in the country right now, “Do you work with investors?” there would be 100% that say yes. Now, we know that that means varying things, right?
Greg: Yes. If the next question was . . .
Mike: [inaudible 00:06:14] asset class.
Greg: If the next question was, “What is a yield?” they’d say it’s a triangular sign that says somebody else has the right of way. So they can open a lockbox. I’m not trying to pick on them. I love the industry and I’ve been around it my whole life but what really has changed is the acceptance of single-family homes as a commercial asset class.
It’s residential real estate but so is apartment buildings, right? It’s residential real estate but now it’s been put under the microscope of Wall Street and a lot’s been done to professionalize and develop technology, get better data, kind of standardize things, and it’s going to make it easier for investors at every level to do the job they want to do. But the thing I love about who I would imagine to be your profile listener/viewer is that they have a consistent goal of being bulletproof. We ask them when they register on our website, “Why are you doing all this?” and it’s just a free-form question. We always get things like, independence. They want independence. They believe it’s something tangible that they can control. It’s a small business. They have customers that rent the properties from them . . . a lot of different ways of doing it but at the end of the day it’s, “I can’t depend on my boss, I can’t depend on Wall Street, I can’t depend on many people but I can depend on housing in America,” and so they do.
Mike: Yep. I mean, that’s definitely what we teach. We’re trying to help small businesses become financially free through real estate. I mean, it’s been great for me and I know a lot of people that it’s been great for and it’s a great vehicle. You’ve got to know what you’re doing but it’s definitely a way to break free of those kinds of corporate chains, for sure.
Greg: Right, exactly.
Mike: So talk a little bit about what’s been going on in the industry. I know you want to talk about a lot of consolidation that’s happening right now and a lot of my listeners probably don’t have their ear to the ground as much as you do, so this will be good stuff for them to hear.
Greg: I sure hope so. So the image that I want to conjure up is something that everybody’s seen somewhere, which is a little fish being eaten by a bigger fish, being eaten by a bigger fish and so on and so forth and just a really, really big one on the end. That is how I envision what’s happening right now in the industry and it’s not just Invitation Homes owned by Blackstone buying or merging with Colony at the top level. I’m talking about all the way through all levels in the space.
I saw a really interesting stat recently that Amherst put out that showed that if you add up the asset value of all the multi-family in America and stack it up next to all the single-family rental, so not the home-ownership side, the single-family rental next to apartment rental, they’re both just a little bit north of $3 trillion worth of asset value.
They’re both substantially bigger than office-building asset class. They’re both bigger than shopping-center. They’re bigger than hospitality, right? So, of all the real estate food groups on the large scale, single-family is right up there with multi-family, just a tiny bit smaller but bigger than everything else.
Mike: Yeah, that’s awesome.
Greg: Fifty-five percent of multi-family is institutional to 1% of single-family rental is institutional and the institutions are behaving the same way today that the institutions behaved back in the ’90s when multi-family consolidation was going crazy. So I don’t know if we’re going to get to 55% of all the single-family rental being owned by institutional capital but if we get to 30 or 35%, we’re talking about a trillion dollars’ worth of real estate being consolidated.
And that’s where those little fish being eaten by the bigger fish on that continuum come in because if you’re an investor or if you’re a small-business operator whose product is acquiring property at good prices, turning it into rentals that you hold or flipping it to somebody else that’s going to hold—there’s a lot of ways of going about this—but there’s now a very big fish. There’s a current, a gravitational pull that these large players are providing, where we’re finding a lot of people are getting re-energized. They got excited and energized during the housing downturn because it was clearly a big opportunity but now the market recovered.
So does that mean it’s no fun anymore? No, it’s still fun. It’s just different because you can morph your approach to whatever fish you want to be. You can be the guy that buys five houses, fixes them, rents them, puts a bow on it and sells all five to the next guy who’ busy buying 25 and putting a bow on that and serving it to the next guy, who’s busy putting together a package of 250 and serving it up. And that market is a place to present those things, then a lot of people can make a lot of money. You know, people laugh when I say you get eaten by the other fish. In this model, it’s a good thing.
Mike: It’s a good thing to get eaten.
Greg: It is. This is more like it should be but it is a good thing because you can recycle your capital, go back knowing that you can set up a ready buyer to take everything off your hands that you assemble and then go and do it again and again and again . . .
Announcer: PassiveRental.com is your source for turnkey done-for-you rental properties. If you’d like to be an investor and not a landlord, please visit PassiveRental.com to learn how to purchase cash-flowing, professionally managed rental properties in the hottest rental markets across the country. We can also help connect you with financing for your next property. Invest the easy way today and get started by visiting PassiveRental.com.
Greg:. . . knowing that you can set up a ready buyer to take everything off your hands that you assemble and then go and do it again and again and again.
Mike: Right. And the good thing I think—you would agree with this—for individual investors, is the big institutions can’t go sit at the kitchen table with Granddaughter that’s about to put Grandma into assisted living and help them solve that problem. So, when you go downstream all the way to the main street level, we’re the guys that are buying houses at the deepest prices and the people in the back, they know that they don’t have to play that role and all, so they’re always willing to pay more because they have to.
Greg: That’s it. That’s the point. Our buyers . . . we sell portfolios of rental homes and our typical price point is about 93% of market value, which you would never even go near. Ninety-three percent is not what you’re in this for.
But the people that we’re dealing with, that is what they’re in this for. They are dealing with large caches of capital that have a modest expectation. They’re not trying to shoot the moon here. They’re pension funds that just want to grow the asset base. They don’t want to be able to move a lot of money. And institutions, they don’t like taking the checkbook out unless they’re going to write $100 million check and there’s a lot of people showing up now that we never knew before that literally, in 2017, are brand new investment funds in the single-family rental space.
They could be described as three guys in an office suite in Manhattan who do not want to leave Manhattan. So they don’t want to build the infrastructure, they just want to get their hands on a big pile of capital here and then move it as easily as they can over here because they get paid on the size of the pile, right? So they’re not looking for breakneck deals. They don’t want to learn how to find those, they want to be able to basically invest $10 million at a clip. And they know you’re not going to get a good portfolio unless you pay a pretty good price for it and they will.
Mike: Sure. And that’s why single-family is much more fragmented than apartment complexes and things like that because it’s harder to apply big sums of money to such small pieces. I mean, it has been historically right. That’s what the opportunity is.
Greg: That’s what the opportunity is, yeah, is that it was always considered by me and everybody else I knew . . . Okay, I’ve been in the real estate business 28 years and so it was always a house. It was never a collection of houses. You don’t buy a portfolio. What are you talking about?
But then one day I’m at one of these conferences back in 2014. I see up on the screen that there are 16 million single-family rentals that already exist in America, 16 million of them, right? And about 3.5 million of them are held in portfolios greater than five units, so there’s several hundred thousand owners that have at least five houses, millions of properties they hold in these things and here’s what’s crazy. Here’s why we changed the company to be a platform for stabilized rental portfolios. We started meeting these owners that had 40-50 homes and they’d say, “We heard that you could help us sell this intact.” And we’d say, “Yeah, this is what we do,” even though we hadn’t done it yet. So this is what we were going to do and you’ll be the first.
So we actually had a guy who had 135 houses in Palm Beach County. I’m in Charlotte, right? Twenty minutes on the phone and he says, “Okay, let’s do it.” I said, “Really? Okay, I’ll send you the agreement.” He signed it. I said, “Listen, this is great and you can cancel if you want to but I have to ask you, why are you coming to me? I’m 1,000 miles away. We’ve never met. Everything I know about listing property for sale, there’s got to be a handshake in there somewhere. I don’t do anything in Florida yet. There’s no reason in the world but why did you give us a commitment contract for us to sell this portfolio for you?” He said, “I went to everybody local. They all said the only way to sell it is to break them up and sell them vacant.”
So the guy’s got 135 houses. That’s 135 families that probably two-thirds of them don’t want to leave at the end of their lease, so they get the boot. That’s 135 houses that he has to vacate, i.e. start losing money on and then probably spend money to fix up, so he’s losing money, he’s spending money . . .

Mike: Enough to make them ready.
Greg:. . . to make them ready to sell to home buyers and we were the first people he ever talked to that said, “If you owned an office building that was fully occupied or a shopping center or an apartment building, you would never let anybody tell you to vacate it. That would be [inaudible 00:15:50].
Mike: Right. “Empty the building and I’ll buy it.”
Greg: Yeah, right.
Mike: “Make sure that it’s not generating any cash flow for us and then we’ll be interested.”
Greg: Exactly. “And we’re going to give you a really lousy price for it.” That would be the answer. So that was the big epiphany for us. It was that okay, there is a base that exists out there that are so terribly served. They’re being told to take their business that is stable and performing and dismantle it, break it up for parts, right? And by the way, the buyers like buying occupied too, so it’s financially better for the buyer, financially better for the seller, and it just blew our minds that here, hiding in plain sight, is an asset class that big from the industry that should have figured this out and was never paying attention to it because it wasn’t home buyers.
Mike: Yeah. And talk a little bit, Greg, about how . . . Listeners of this show tend to be more people like me. They’re investors that a lot of them are just getting started. Some of them have been in business for a while but we’re still buying them one at a time and typically, we’re keeping them as a rental ourselves, wholesaling them off to another investor or rehabbing them and selling to probably another occupant. Sometimes we’re doing some turnkey stuff, get them ready, put a renter in it and sell it off to somebody else. But talk about the opportunity that you see kind of coming from what you’ve been talking about here over the past few minutes to do more deals and make more money ultimately.
Greg: Great. I’m glad you asked because we have met a lot of great operators of small real estate businesses that found themselves in a bit of a quandary a couple years ago when the market recovered. We all prayed for recovery and then we got one and said, “Oh-oh. What am I going to do? I can’t get the volume that I used to get in term of good deals because there’s not as much distressed out there.” The concept that we began to see people embrace and then they started to pass it along to other people is the idea that if you can buy more properties at a smaller profit, where you’re used to making 20% when you buy a property and fix it and after all your costs, you get a 20% kick in equity . . . If you can only make 5%, that wouldn’t be of interest to you but what if you could do it four times as often?
So now you’re even on the money. It’s less risky because you’re buying houses that are not in as bad of condition. Basically, you’re making a much smaller spread but you’re doing it on volume. The thing that attracted people was many of those folks were building a property management company as part of their legacy business. The shareholder value in the company they were building was in the portfolio they owned but also in the portfolio they managed for other people.
And if you can crank the door count four times faster every month instead of doing one house at a 20% profit, you could do five houses at 5% profit and you’re making 25% instead, so you’re actually doing better but now you’ve got five more customers paying you a property management fee.
So it was just a shift in perspective that if the inventory that you used to flourish in has gone down to normal levels in terms of distressed property and REOs and everything, what can you do to repurpose your skill set of finding opportunities that are off market or renovating houses as needed? What can you do to just pivot in a recovery market? We’ve got a recovery market. What does that mean? Are you going to stop?
So things like that are all part of that continuum of that consolidation because somebody who just does what I’ve described but doesn’t have a property management company and just wants to make the 5% on five times as many houses can put that bow on top and then serve it up to an institutional investor or a larger investor who has different expectations in terms of returns and they’ll be waiting right there ready to catch it when it’s done. So you can just take these things, roll them up and you’re not selling them to home buyers one at a time, you’re actually bundling up five or 10 or 25 houses and then selling it to the guy or gal who wants to bundle up 500 and sell it to a REIT.
Mike: Right. And I think there’s still some opportunity to buy some houses really deep. If you get those cherry deals and you want to keep them for yourself, hey, that’s great. I mean, truthfully the reason that most real estate investors like me are classically trained to try to get houses at very, very deep prices is that we pass on a bunch of stuff that might fit the model that you just explained.
Because I haven’t historically had an embedded buyer that says I’ll take everything you can get at, like you said, 90 to 93%, right? I mean, heck, even if I retail a house, I’m not netting 93%. You know, I’ve got probably 10% in there in just closing costs and holding and just taking that risk on, right? Yeah, that’s interesting. It might open up opportunities for people to have an exit strategy that they didn’t have historically with selling it to an investor that’s willing to pay more.
Greg: Yeah. You said it perfectly. You said it better than I did. It’s kind of like there are guys out there and gals that are mining for gold but you find a lot of silver, right? So don’t throw the silver away. Take the silver back in town with you also, right? So, if you’re finding deals that you can only get for 10% or 11% off of market value that’s not in your sweet spot but you’ve got another plan for those kinds of things, that’s what I’m trying to say, that there are big bags of money coming into the real estate space that are looking to buy a yield and that’s it. They don’t even need any embedded equity at all. They’re just trying to take $100 million and move it over so they can get another $100 million.
Don’t forget, the way these funds are compensated, it’s the old classic . . . I can’t say that it’s wrong of them but it’s a classic hedge-fund kind of business model, where they get 2% of the fund size as an annual fee. So, if you have a $100 million fund, you’re getting two million bucks to run the fund. If you’ve got a billion-dollar fund, you’re getting 20 million bucks to run the fund. Now we’re talking, right? And you get 20% of the upside. So, if you can manage to raise and deploy a billion dollars, you’re getting $20 million of revenue when your company is maybe 15 or 20 people and then it appreciates 3 or 4% a year for four years straight and now you’re getting 20% of that upside. So, they win big when they’re able to deploy the capital. They just need to get it deployed from Point B and then repeat.
Mike: One of the other cool things that’s happening off of what you just said is, for guys like me that have a rental portfolio . . . I have about 40 rentals, so not huge but it’s a good portfolio and we don’t have plans to sell it because for us that is our retirement account. But I know people that have built portfolios that are that size or larger and their whole model is, “I’m just going to keep 1031 exchanging it up into something bigger and bigger and bigger.” Historically, with rental properties like this, I’d have to sell them off one at a time or I’ll try to sell or finance one or I’m just going to sell them to the smaller guys. If I could package that and sell it in one fell swoop and just keep upgrading . . . there’s a lot of people that have wanted to do that for a long time that couldn’t before.
Greg: Right. Well, you’re right. Yeah, now it’s one transaction. It’s not 40 transactions. I wouldn’t sell them, by the way. I think you’re right. I think having 40 houses and eventually 50 houses just means that you’re not [listening 00:22:42] to anybody. I mean, you’re a married man.
Mike: I’m still married, yeah.
Greg: You’ve got a wife. You’ve got one very important boss, but that’s it.
Mike: Yeah, there’s no doubt there. The rentals can be a pain in the butt, for sure but when you look back now it’s like, “Wow.” I mean, we’ve had some significant appreciation here in Dallas. I never counted on appreciation, but it’s been massive, right?
Greg:Been great. Yeah, you live and you own . . .
Mike:[inaudible 00:23:08]
Greg: We call the company Own America because when you invest in real estate, that’s what you’re doing. You’re accumulating more America for yourself and you can’t do better than Dallas, right? You could do as well in Atlanta arguably just as good, Charlotte, arguably just as good but nothing’s better. You know, with the population and job growth you can just hear feet trampling away from Illinois and New York coming down to these cities where the jobs are booming and no sign of it slowing down.
Mike: No, there’s not. It’s bittersweet. On one hand, you’re like, “There’s more traffic, all my taxes are going up,” and all that stuff. But on the other hand, it’s like “Hey, that’s good for my rental portfolio.”
Greg: I’m a New Yorker who came to Charlotte, and I feel bad like we’re ruining it and we’re turning it into New York. I sit in traffic in a place where four years ago there was none, so I’m trying to lose the accent, but I just can’t seem to do it. Everyone can see me coming from a mile away.
Mike: You’re probably not going to be able to shake that.
Greg:Yeah.
Mike:So talk about some of the changes at Fannie and Freddie. There’s some interesting stuff going on. So, historically, when I came in as a brand-new investor, I started keeping rental properties. And as a new investor or self-employed, I needed to have two years of tax returns, which I didn’t. By the time two years had gone by and I had two years of tax returns, I already had more than 10 rental properties.
So I never could get the government money that’s obviously subsidized by the government and 30-year fixed-rate loans but everybody now that I teach or that I mentor and coach, if they’re still working at a job, I’m like, “Unless you hate your job or you just can’t wait to quit it, take advantage of the opportunity to get some government-backed loans for building up your rental portfolio.” But there’s always been this limit of 4, 6, 10 . . . Nobody ever knows exactly what it is until you talk to a few different people. Talk about how that’s evolving a little bit and maybe where that might be going.
Greg: Yeah, it’s evolving rapidly where Fannie, Freddie and I think eventually, FHA are becoming investor friendly. They’re beginning to recognize that if their charter . . . It isn’t just about home ownership, right? It’s about affordable housing. They’re trying to create affordable housing. There’s a recognition in those agencies now that the housing crisis really was healed by investors.
Back in 2011, that was the year the market finally bottomed out and started turning upward again. In the stats back then, home ownership buyers were down 16%. Investor buyers were up 65. So there’s no question who was creating that bottom, who was showing confidence in recovery when others were not really believing it yet and it was the investors.
So there’s a pilot program going on right now that if you do a search for Freddie Mac single-family rental loans, you’ll see that they’re cryptically, but they’re putting the word out in the financial press that they are experimenting in a pilot program to see how much demand there is out there for these 5% mortgages, 30 year fixed-rate mortgages. This is the first time they’re making loans presuming a tenant’s already in place. That’s why it’s great for us, right? That’s what we do, is tenants in place because they’re going to count the income. They’re not making you qualify on your personal income. They’re allowing you to qualify on your rental income.
Now, Fannie Mae made the first move in this space back in early 2017 when they did the billion-dollar backing of Invitation Home’s deal. And they got a lot of flak for that because there’s no fatter cat, right? So, what are you doing? It would be making a fat cat fatter. That was the attitude from some people. They were smart. They were saying, “We can back this play and we can be invested in or insuring . . . ” whatever the deal was. “We can be involved in assessing the risk of thousands of single-family homes across 15 or 18 different cities.” And they’re analytic. They need to understand the risk of what they’re doing. So, in one big transaction, they were able to get a crash course on SFR.
Freddie said, “We’re not going to catch that blowback and look like we’re trying to make the rich richer” but they’re still doing it with investors and I think it’s going to make its way down to where you’re going to be able to get a 4.75% or 5% single-property loan. You’ll be able to get a multi-million-dollar loan where you’re not going to qualify on your personal income, you’re going to qualify on the business itself.
And you know what? They’re right about the fact that it is going to impact affordable housing because you know if you could take your portfolio and you can get an increase in your yield without increasing your rents, you’re less likely to increase your rents. And if your monthly payments go down and so therefore, you’re making a larger cash-on-cash return, it does wind up accruing to the benefit of the tenants because small to midsize landlords are less anxious to push rents anyway. “Eh, people are there. They’re happy. I like them. They pay on time. I don’t want to push it,” right? So they don’t push it.
Mike: “I don’t want to turn it over,” yeah.
Greg: “I don’t want to turn it over. I don’t want to say it out loud. Ah, I’ve got to raise your rent 50 bucks a month.” So they’re more likely to leave people in place but isn’t it nice for them to get a raise while not taking an increase in rent from the tenant?
Mike: Right.
Greg: So I think you’re going to see the pilot program succeed. You’re going to see Fannie Mae doing more than what they did before and I think you’re going to see the FHA take their multi-family product, which is really popular with multi-family investors.
Mike: Yeah, they’ve been doing this with multi-family for a long time, right?
Greg: Forever. They actually took away the usage of the single-family FHA loan in 1989 or 1990. They took that away because it was just that classic “We’re not going benefit these investors.” Landlords . . . they think we all have top hats and mustaches. We’re all [inaudible 00:28:43] guys, right? So they were a very easy target. They took it away for just a political will to not help the rich get any richer but they’re coming around. And the attitude in government today is public and private partnership is a good thing, and so it was predictable that they would get into this. I didn’t think it would happen this quickly but I believe in 2018 you’re going to start to see people in your position being offered 5% fixed rates.
Mike: Yeah, that’s incredible. I mean, the thing is a fixed rate, like, there are pretty rates out there right now but not long-term, fixed rates. They’re usually three-to-five-year terms or balloons or whatever, so yeah, that’ll be powerful.
Greg: And it’s scary. You know people, I know you do because I definitely do, that took a three-to-five-year balloon and there was nobody there to refinance to when they were done. It was too topsy-turvy, so they risked losing what they had built. And you said yourself, you’re going to hang on to your 40 forever.
Mike: Yeah.
Greg: You have a son you said, right?
Mike: Yeah.
Greg: Yeah, then he’s going to have those houses, so a 30 or fixed-rate is perfect. Just let it ride.
Mike: Yep. Awesome. Well, Greg, maybe you could take a minute. We’re kind of coming up on the end of the show here. Maybe just take a couple minutes and I want to try to make this action-oriented for people that are listening right now that have heard all this. It sounds cool, there’s some stuff that’s kind of trickling downhill but not quite sure yet how that could impact them. What could they do later today if they’re listening to the show right now or just as a kind of forward-thinking here going into the new year, how could this benefit them and where should they be looking to kind of learn how to benefit from this?
Greg: That’s a great question. I mean, there are a couple of websites out there. We’re one of them. OwnAmerica.com. RUSTOCKS is another one where you can see a steady supply of rental property for sale. They’re not breaking records in terms of the deals that are being offered on these sites but the analytics are great and that’s one of the things that we didn’t have before. We were all working on spreadsheets, and calculators, and pencils and paper for all those years and now I can go to either one of those two websites and you can move dials around and make adjustments and watch the projections. I know on OwnAmerican.com we give you an interactive calculator with 30-year projections on cash flow, cash-on-cash return and equity.
And you can monkey around with your assumptions and watch the way applying leverage . . . Let’s go take a look and learn what happens when you put a 5%, 30-year fixed loan on a million-dollar portfolio that yields 6%. You see your chart elevate because your cost of capital is below the yield. And so, using the tools, developing a plan, it’s definitely one of these things where it goes back to the old standby . . . accumulate. Accumulate pieces of this country, right?
If you’re the kind of person that can find great deals, well then find great deals. I mean, I pay retail for everything. I go into a car dealership and they see me coming a mile away. I’m like, “Can I get it this afternoon?” I’m not a good enough negotiator to be able to do what you do. My skills are elsewhere but they have to do . . . whatever kind of person you are, whatever kind of person you are, the business of accumulating your own portfolio, owning more of America whether you make a lot of profit on each one or a little and accumulate more. There’s so much more creativity and strategic thinking possible now than there used to be because of the tools that are out there and the ability to test assumptions and create fantasy portfolios and see how they perform and have a long-term vision and build your 50-house portfolio.
Mike: So maybe we should get together and create a fantasy league for real estate. Is that what you’re saying?
Greg: That’s a good idea.
Mike: I just heard that and I was like, “Huh, how would that work? That would be interesting.” Awesome.
Greg: I picked up some Charleston in my fantasy portfolio. [Inaudible 00:32:36] expanding their plants and so [inaudible 00:32:37] should be fun.
Mike: So, Greg, if folks want to learn more about you, they can go to OwnAmerica.com. Is there anywhere else they should go connected to you or to check you out? OwnAmerica.com.
Greg: Yeah. Email me at [email protected] or just check out the site or whatever or Facebook.
Mike: Yeah. So, if you’re looking to buy portfolios or even sell your portfolio, Greg is the only guy I know that’s doing that, so that’s a really cool thing.
Greg: Well, thanks for saying that.
Mike: Yeah. Awesome, Greg. Thanks for joining us on the show today.
Greg: It was great to be here. Thank you.
Mike: Good to see you, man. Everybody, this is Episode Number 382 with Greg Rand. If you haven’t gone out to iTunes yet and given us a positive rating or review or to Stitcher Radio, Google Play, YouTube or any of those places, we’d love it if you do. Just go out and subscribe. I’m not going to ask you to give us five stars. Yeah, I will. Give us five stars.
Greg: Ah, give him five stars. At least this episode.
Mike: Yeah, yeah. But hey, this is what keeps us going . . . 382 episodes and counting. Your subscriptions and your positive reviews are the fuel that keep us going here. Everybody, thanks so much. Have a great day. Greg, thanks again. Great to see you, buddy.
Greg: Thank you, Mike. Same here.
Mike: Everybody have a great day. Bye-bye.
Thanks for joining us for this episode of the FlipNerd.com Investing Show. If you’re not yet an elite member of FlipNerd, you’re missing out. We have tons of great training including a new, detailed master class, published each month and live training webinars with experts, twice a month. Plus, you’ll get access to all of our archives where we already have a growing library of master classes and other training videos. Elite members also get membership in our incredible online mastermind group, where many of the top real estate investors from across the country, including many of the hundreds of guests I’ve had on the show in the past, are already members. Whether you’re brand new, looking to get started or a veteran, you simply must join today. I promise you won’t be disappointed.
To learn more or join today, please visit FlipNerd.com/lab. See you on the next show.