Jason Hartman starts this episode by sharing that 35% of all US dollars have been created in the last ten months. He asks if this money-creation causes inflation and what will be the effect on the investors. Afterward, he interviews Adam, where they talk about the real estate and how the naysayers are still waiting for it to crash. They also discuss the foreclosure wave, forbearance, potential shutdown, and the stimulus.

Announcer 0:02
Welcome to the creating wealth show with Jason Hartman. You’re about to learn a new slant on investing some exciting techniques and fresh new approaches to the world’s most historically proven asset class that will enable you to create more wealth and freedom than you ever thought possible. Jason is a genuine self made multimillionaire who’s actually been there and done it. He’s a successful investor, lender, developer and entrepreneur who’s owned properties in 11 states had hundreds of tenants and been involved in 1000s of real estate transactions, this program will help you follow in Jason’s footsteps on the road to your financial independence day, you really can do it on Now, here’s your host, Jason Hartman with the complete solution for real estate investors.

Jason Hartman 0:54
Welcome to Episode 1617. Hey, that’s sequential, isn’t it? So today, I wasted half of my day, four hours today, dealing with a government website and calling that government agency to try and get some help. And wow, these are the folks that want to run the healthcare system. Great. I got absolutely nothing accomplished. Massively frustrating. And can you imagine if I was going online to the government health care website trying to get my MRI scheduled, or my doctor checkup, or whatever it was? I mean, it’s just unbelievable. Which by the way, the private companies running the health care system, they ain’t much better. Because whenever I call the doctor and try and get anywhere there, that’s a monumental hassle, too. But I will say it’s a shade better than the government. Oh, my gosh, these are the people that want to run the health care system. These are the people that want to take over the economy. Aye, aye. So did you know here’s a piece of trivia on another matter? I’ll get off my Thank you for letting me then. By the way, dear listeners, I appreciate you sometimes being my psychologist. Much appreciated. Okay. So did you know that 35% that is the number 35%? Yes, that’s just less than 40%. And over 30% 35% is the number of all the US dollars in existence? Yes. Now, that means electronic dollars, and physical dollars. I believe. I could be wrong on that. But I don’t think I’m wrong on that. So all of the dollars 35% of all dollars have been created in the last 10 months. In the last 10 months. over a third of all dollars were created. Does that blow your mind or what? Wow. was a while you talk about stimulus Maximus. That’s what we’re gonna call this. Due to covid 1984. We had, here’s how the history books will read. Right. Something along this line. We had the Wu Han virus covid 1984. It was more severe than the typical flu that happens every year. But it wasn’t nearly as big a deal as everybody made it out to be. They shut down the economy. They did stimulus Maximus, a new investor entered the market called the Federal Reserve. They that’s the US Central Bank. Of course. The Federal Reserve became the biggest investor in world history. Yes, they were buying up assets like crazy and 35% of all dollars in existence or printed in a 10 month period. Now printed created you know, they say printed they like to say you know money printer Gober? Right? That’s just a metaphor. Not that many of them are printed. They’re created. They’re created electronically. Now remember that show I did many years ago, maybe 12 years ago, I want to say, and I was talking about Alan Greenspan, or I don’t know who was talking about maybe it’s talking about Bernanke at the time actually. I think it might have been Greenspan, it was more than 12 years ago, it’s been a while we’ve been doing this, folks, it’s been a while. And I jokingly said, you know, after the FOMC committee meets the, you know, the open markets committee, right at the Federal Reserve, they have their big meeting, they publish their Beige Book, that’s their sort of famous book that, you know, talks all about what they’re doing for us, or what they’re doing for themselves, I should say. They’re definitely doing stuff for themselves, not for us little people. But you know, we get a little bit of benefit out of it. But we don’t get the kantian effect. Because we are not that close to the money. But, but but but as real estate investors, we put the common man, or the common woman just to be politically correct. Or the common person who’s 511 like yours truly, I think we need our own equal rights group for that. 511 people, don’t you? Don’t you agree? How many of you out there are 511? We need our own special interest group 511 lives matter. That is powerful. That’s powerful. Let’s do it. Okay, anyway. So what were we talking about? I gotta be a little bit punchy, cuz I’m so frustrated. If I wasn’t laughing about this whole fiasco today. I’d be so frustrated. I am so frustrated. it’ll send in later, I think I’ll go turn on Netflix or something amazon prime and watch a movie. All right. So all this money was created, where were we folks? rewind the tape, boom, boom, rewind. Anyway, all the money was created, we got this whole system, everybody made a much bigger deal out of it than it is so that they could create more money for themselves and their buddies, because they benefit from the cantillon effect, much more than any buddy else. Now we as real estate investors can sort of as a proxy, position ourselves closer to the money, because it definitely sort of takes the typical, everyday, middle class person or upper middle class person who isn’t that close to the money. They’re not an insider. They’re not Goldman Sachs. They’re not Ameriprise, they’re not, you know, Chase or Wells Fargo, the crooks that all these banks, they’re not any of those people. But owning the income property, because of its special multi dimensional characteristics, namely, inflation and do step destruction, Hartman’s trademark term. So inflation induced debt destruction with these special characteristics. It puts us closer to the money. It makes us kind of a virtual can tilian remember, Richard can tell us that economist I told you about my second favorite economist. You know, I gave a speech on this about two months ago. And someone after I walked down from the stage, yes, it was a live event, I was actually given a speech on a real stage. I know. That’s so weird. Nowadays. I walked down from the stage. And I was walking toward the back of the room. This was about two months ago. And in Tampa, Florida. And someone comes up to me and says, Jason, you said quintillion was your second favorite economist, who’s your favorite? You might be thinking the same thing. If you’ve been listening for a while, you probably know who it is. Now, favorite is not judged necessarily by how much I agree or disagree with their philosophy. You know, you could judge them on a lot of different categories by how impactful they were. I mean, I believe the most impactful economist ever in world history. But I am really sad that his ideas took off is Karl Marx. I mean, Marxism became a huge deal. I mean, like half the world was living under Marxist ideology at one point or another. And you could argue that, to some extent, we are living under that today in the United States of America. We’re also living under Orwellian. And, you know, Aldous Huxley’s Brave New World, Ian, I don’t know how shall I say that animal for me in all kinds of things. We’re living in an iron randian Well, not iron randian. But Atlas Shrugged in john Galt Ian. No, not john bolton. That’s the main character from atlas shrugged. Who is john Galt some of you know what I mean by that. We’re living in under this crazy world of all this nuttiness. But anyway, Joseph Schumpeter, I think he was really, really onto something with his creative destruction concept, Joseph Schumpeter, and I’d kind of have to say he’s my favorite. There you go. But then there’s hyack. And unfortunately, we don’t you know, I’m not saying we, we get all this, I’m just saying, you know, which ideas were really powerful. Now, Malthus, he would be my least favorite. I think he was so wrong, even though Marx was so wrong too. But you know, Marx, you can see why it caught on, because Marxism sounds good in theory, in an ivory tower, where you don’t actually interface much with the real world. You know, Marx, you read Das Kapital and you think, you know, this could work, but then you try to put it in practice. And it’s like 150 million people die. Okay, when Stalin, you know, starves them and when Mao starves them, and, you know, there’s political prisoners and the Nazis and you know, this is all Marxist ideology, right? to one degree, you know, there’s all different flavors of it, but it’s marks at the end of the day. Remember, the Nazis war? The National Socialist? Yeah, just remember, Socialist Party. Right. Don’t forget that, because they’re often confused with Republicans. You know, that’s what the liberals like to say. And the liberals are so clueless, it is absolutely mind boggling. Anyway, back to the money printer Gober. So the chart is off the charts, I’m looking at a chart from the Fed of this hockey stick money creation. Remember, 35% of all US dollars in existence, or created in the last 10 months? That is absolutely shocking, folks. And guess what? There’s more coming. But wait, there’s more as the same goes on the late night infomercial. But wait, there’s more. There’s more coming. Now. Do you think this will cause in for motion? inflation inflation? And do you think that you as real estate investors will be enriched by it? Of course, you will, of course you will. So congratulations, because you have taken advantage of the cantillon effect. In fact, if you’re not already, with your income properties, if you purchase the right ones and followed my plan, you will be a can trillionaire There you go. So enjoy that success.

Okay, today, we need to talk about the foreclosure wave forbearance, and all this stuff. And we’ve got Adam to talk about that today. And so let’s go ahead and dive into that. Again, just a quick mention, many of you continue to express interest and ask about our webinars. So I’ll tell you two of them. Of course, the estate planning, asset protection, this great thing to do at the end of the year, get all set up for the new year. Really a good time to focus on this stuff. Remember, you got to do this in advance this one area of life where advanced planning is critical. Go to Jason hartman.com, slash protect and learn about this stuff, and take advantage of this great offer super cheap offer from our excellent attorney. So Jason hartman.com, slash protect. And then the Alabama webinar, new construction in Alabama. And we’ve got a couple of different good sources there. That’s Jason hartman.com slash sweet home. And some of you asked about Charlotte. And we do have just a little bit of inventory in Charlotte as well. But not that much. That’s why I’m not telling you to go to Jason hartman.com. Slash Charlotte. Huh. Was that a subliminal message? It might have been a subliminal message. But anyway, you want to go there more because now you’ll be curious. I just know I know how you think I know how you think. Okay, let’s go to Adam. And he joins me to talk about foreclosure wave and you know, all of that other stuff I mentioned.

Welcome, everybody. It’s great to see you all again. And we’ve got Adam here with us today to talk about the foreclosure wave. Do you think the foreclosure wave is coming? Is the crash coming is the world World ending. I gotta tell you, I and by the way, please comment and say where you’re located. We always love to know where people are watching from. But I gotta tell you yesterday, I did a video with my buddy George gammon, and it was released last night, and maybe some of you saw it even, you know, people are always making these comments like, well, all these real estate guys are always saying, everything’s gonna be great. And the crash will never come. And they’re always positive rah, rah rah, right? Not true. Number one, at least not

Adam 15:37
we thought that two weeks ago.

Jason Hartman 15:39
Yeah, exactly. So Adam, I’ll let you get to that a minute. Hold that thought. But here’s the thing, folks, and this is what you got to realize. Don’t be one of these people. That becomes this angry naysayer, that is just, you know, trying to put the kibosh on everything because they missed out. Okay, that’s what happens. And it’s absolutely amazing to me how these people are just, they’re just like sour grapes. So here’s what I’ll say this is something to take to the bank. He ready take it to the bank. It has been an awesome decade for real estate investors. Oh, wait, it’s actually been an awesome 20 years? No, it’s been an awesome 30 years. It’s been awesome for three decades. Oh, no, wait a second. It’s been awesome for 40 years. What am I talking about? We will say investors have been making fortunes for 50 years. And the naysayers keep waiting for the big crash to come. And they keep up with their bitterness. That is just because they missed out. They missed the last boom, they missed the boom, before that. They missed the boom before that. And yes, folks, there are cycles done, no one will deny that I get it. Okay. That’s why you buy and hold I dimensional asset class. And with a multi dimensional asset, all you need to do is adjust your strategy when the cycle changes. You’re either in a cash flow market with increasing rents, or you’re in a capital appreciation market with increasing prices, you know, and if it’s always one of those two, and if it’s not for even a short time, then you’re getting great tax benefits, and you’re getting inflation induced debt destruction. So let us know your thoughts in the comment below. But for certain, let us know where you’re watching from or where you’re listening from.

Adam 17:44
Well, I gotta love Peter over here. Peter from Colorado, Rocky Mountains, a great interview with George gammon. Hey, buddy, we need the sour grapes people to stay where they are to pay us rent.

Jason Hartman 17:56
That is a good point. You make a very good point. Peter, you nailed it. Yes. We if we didn’t have those sour grapes, people, we wouldn’t have any tenants. Adam, what do you got for us today, I’m excited about your talk today. And it’s mostly going to be a presentation. So this is going to be more monologue II than usual. But I’m looking forward to it. These these visuals you’ve got first look fantastic.

Adam 18:20
So we talked about when we talked in the past about people right now are very worried about the big potential foreclosure wave. And it is something that a lot of people are worried about, it’s a pretty valid concern. Because we don’t really know what’s going to happen in the next one to two years, six months, whatever you’re looking at. So I thought, you know, I would just delve into what’s happening now, what the timeline would be for a potential foreclosure wave. And then also look at some issues with forbearance and appreciation in the markets that we’re in right now.

Jason Hartman 18:51
Good stuff, good stuff. So foreclosure wave, it will happen at some point, there’s just really no question about that. But the question is, can you time the market? And, you know, it’s easy to like in this stock market, it really is. Because all of the people that try to time the stock market, I mean, the statistics have just proven over and over again, those people lose, it does not work. And you know, if you think about it, just compare, buying an s&p index fund to all of these highfalutin overpaid fund managers, the people that are the geniuses, you know, I want to remind everyone of a company from what about 20 years ago, or maybe a little more long term capital management, okay. If you don’t know about long term capital management, folks, I want you to type those words in and go and look at some of the videos look at some of the articles about long term capital management, LLC. tm, they thought they had figured it out. And for a while they write it until they were wrong.

Adam 20:07
It only when they’re wrong.

Jason Hartman 20:09
Yeah. Good stuff. Well, Adam, it’s all yours. Take it away.

Adam 20:13
Yeah. So the first thing I wanted to go do is go back to pre COVID. I don’t know if people remember this, but we were doing pretty well. COVID. If you look at late 2019, early 2018 or early 2020, we had foreclosures starts decreasing 11% year over year. Now this is data from the Adam data solutions. They’ve been on the show before we’ve talked to they presented at some of our events. And lenders were starting the foreclosure process on 81,000 us properties in the first quarter of 2021, up 1% from the previous quarter, but down 11% from a year ago, the 19th consecutive quarter with a year over year decrease in foreclosure starts. So almost five years in a row. We’re seeing foreclosures drop, so the economy and the real estate market was good. And if you remember, back in the beginning of the year, even before COVID hit, what didn’t we have Jason, we as a network didn’t have a ton of inventory. Because inventory has been tight for a long time. COVID is made it a little worse. Adam

Jason Hartman 21:19
inventory has been our complaint. For a good seven years. Yes. Okay. Certainly, from 2013 onward, we have been whining, whining, whining, complaining here, what’s the right sound effect for that? I don’t know what it’s gonna be. But here we go.

Adam 21:39
Hey, that was perfect. The dog likes that one, too. We’ve been whining about lack of inventory for a good seven years. Now. We were whining about it before that in another side of the cycle. But seven years of weak inventory, we always had this imbalance of where if we had more good inventory, we could sell more properties. Okay, but it is really tight now. And so then you go back to the actual repossessions lenders are repossessing, you know, under 30,000 us properties in the first quarter down 28% from the previous quarter, down 16% from a year before the fourth straight year with a year over year decrease. I mean, so you look at this and foreclosures were down everywhere, all over the country. In at the beginning of the year before we had the COVID shut down. Again, the same thing from Adam data. Just open your heirs to the lowest number of total foreclosure filings recorded since they began tracking in April 2005. So the foreclosure it was becoming less and less of an inventory thing to begin with. They were harder to find. And you know, so this is what was happening pre COVID. So then COVID hits and march 25 2020, Congress passed the cares act that we all know about. We’ve heard about ad nauseum. But if you look here, there’s a video from the cares act mortgage forbearance, this is from the league, this one’s from the ephah FHFA website. And it says update since this video was released, and it was released back when the Act was passed, federal regulators have made it clear that if you receive a forbearance under the cares act, your mortgage servicer cannot require you to repay your skipped payments in a lump sum once the forbearance period ends,

Jason Hartman 23:35
originally, so at the end of forbearance, it’s not a lump sum, which would cause financial hardship that could lead to future foreclosures.

Adam 23:47
And that was a big concern. When it was passed. When it was passed. They were allowed to do that. And everybody was like, Well, how am I going to do that? How am I going to pay four months of my mortgage whenever I can’t even afford one right now?

Jason Hartman 23:57
Right? No, that’s that’s the gist of what you’re saying, though, is that the forbearance issue that’s happening over these last several months does not lead to future hardship. In fact, I would argue the complete opposite. It leads to, you know, more money in the system, because a lot of people went into forbearance, and they could easily afford to have a mortgage.

Adam 24:18
We’re gonna we’re gonna get into that. We’re definitely getting into that. So this is what you know, Congress changed the rules after they started it, which you know, is good for us. So now, mortgage delinquencies are decreasing. Now, right now, the latest data shows the delinquency rate decreased in the third quarter of 2020. And the delinquency rate for mortgage loans on one to four unit residential properties. Now, this is all mortgage loans, not just Fannie and Freddie loans decreased to a seasonally adjusted rate of 7.65%. Now, at the peak in 2010 2010, the delinquency rate peaked at 9.3% as an asset Example in 2018, which was the latest that I could find on statistica.com was the latest they had that was for free. It was 4.4%. If you remember, as we talked about inventory wise 2018, there still wasn’t a ton of inventory out a 4.4% delinquency rate. 7.65%, as you’ll see here is about what it was in 2012 and 2013. But Important to note, they count every single mortgage in forbearance as one of the delinquent loans. And that 7.65%

Jason Hartman 25:35
Oh, interesting. That’s, that’s how basically how they’re counting COVID deaths? No, I don’t mean to make that obviously. That’s kind of an odd laugh. But um, you know, they’re, they’re over counting is what you’re saying?

Adam 25:48
Yeah, absolutely. So I mean, because technically they are, technically they’re in delinquency. But if you look, so approximately 2.4 of the 7.65. So about 5.2% are actually delinquent right now, in a way that they that something could happen if the eviction moratorium is lifted, and all of that. So the forbearance loans are included in the delinquency that you’re seeing, saying, Oh, my gosh, it’s so high. Well, it’s higher than it was. But times were really good. If we go back to the 2012 2013 status of inventory in the market, things weren’t terrible in 2012 and 2013. No things were new the economy wasn’t. I mean, it wasn’t fantastic, but it wasn’t terrible. So now let’s look at the timeline of the glut. That is to come. The cares Act was passed in March 25 2020. It allows for a potential of 12 months of forbearance. So if we say, every single mortgage that’s in forbearance now happen on April 1 of 2020. And one year later, they all come out of forbearance, and they’re all terrible. So one year, so into April 1 2021, all 3.4 million loans that are currently in forbearance go and you know, they hit the hit the market in the foreclosure process starts on all of them. The US average foreclosure period, the whole from start to finish. It’s 841 days.

Jason Hartman 27:18
Adam, that actually amazes me that now I know that it’s it’s insanely long like that in Florida and New York, and and some of these states where it requires them to actually go to court. And you know, do this, basically, it’s a lawsuit. That’s all it is. Yeah. And they have to litigate a lawsuit to get the right to foreclose. But It surprises me that nationwide, the average is that high? Well, you know, what would be interesting to know about that, is when the clock starts ticking, does it start ticking at what’s called the N od or the notice of default? Or does it start at the first missed payment? I wonder how they’re doing those stats?

Adam 28:04
I’m not 100% sure, I couldn’t, I didn’t Delve that much into it. But just, I’m just running with 841 days from when they’re from April 1. That timeline is July 23 2023. So the inventory might hit in July of 2023. If every single thing goes wrong between now and then. Now let’s talk about what you’re banking on in that situation. You are banking on all of the mortgages going bad, every single one that’s currently in forbearance? Yeah, you’re banking on the economy not turning around, and these people not being able to come out of the foreclosure process and you know, pay their way out, as times get better. And then you’re still talking about going to inventory levels of 2012 and 2013. Which, as we discussed before, weren’t great. You know, yes, they there will be more, but it’s just the level that we can get up to. Isn’t that high? And people need to remember right now, you know, today is December 2, the last stimulus happened, what, seven months ago? No, yeah, many months ago now.

Jason Hartman 29:17
And there’s another, I mean, that

Adam 29:18
right, but right now, there’s 3.4 and forbearance 3.4 million in forbearance. Last I’ve seen, there hasn’t been a stimulus in eight months. The extended unemployment ended at the end of July. So it’s been four months for people to not have the extended unemployment. It’s been eight months since their 12 $100 check. I kind of feel if there’s not a massive shutdown again, across the United States, which, who knows if there will be or not, but unless there’s another massive shutdown. This is probably as bad as it’s gonna get. Because, you know, jobs are coming back. Our unemployment rate is around 7%. I think I saw Last, which isn’t great compared to where it was the beginning of 2020. But a 7% unemployment rate historically isn’t tragic. You know, it’s terrible for the 7% of people who don’t have jobs. But I mean, historically, they thought the natural rate of full employment was around 4%. Change whenever below 4%, is that, you know, when the unemployment rate is hovering around 4%, that’s considered full employment, because everybody wants a job has a job. There’s always some unemployment in the system, because some people just don’t want to work. You know, they’re,

Jason Hartman 30:35
they call those people Democrats. At the throw that in Adam, just a bug, you

Adam 30:45
know, you’ve got, you know, the 7% unemployment, people haven’t had a check come in the mail for a long time, they haven’t had the extra unemployment for a long time. So really, if you look around, unless there’s a massive economic shutdown, where’s the more bad news going to come from? So now you look if you were in forbearance right now, my question to you, Jason is, what is the incentive to come out of forbearance If you are concerned about a potential shutdown? What’s your it’s, it’s,

Jason Hartman 31:14
it’s it’s a good? It’s a good question. Wow, we’re getting a bunch of comments here. I’m looking at all these things coming in. So this is interesting, Stevie, appreciate those comments. And, yeah, there, there’s not an incentive, Adam, being in forbearance is a great deal. The only downside of it, there’s literally only one downside, and that is that if you’re trying to buy more properties, and you’re an investor, you’re not gonna get any new financing when you’re in a forbearance program. But it doesn’t matter if you’re not an investor and your typical homeowner, you know, I mean, painting laters, a better deal than paying now.

Adam 31:55
Exactly, you’re not getting dinged on your credit, it’s just gonna be you can talk to him and work it out and get it tacked on to the end of your loan. There’s really no downside. And if you’re at all concerned about your future ability to pay, there is zero reason to come out because then you have to go back in and try to get back in later, which who knows if you will or not. So these people are very incentivized to stay in forbearance, until it ends. So of those 3.4 million, who knows how many right now it could come out and be absolutely fine. I’ve talked to clients myself, who, you know, have tons of money sitting on the sidelines, but their income did decrease initially with COVID. So they went into forbearance and took advantage of it. And now they’re basically just sitting around waiting to see when the best time to come out of forbearances. So you’ve got people like that, who are sitting on the sidelines, ready to go, you know, when they find the right investment, and they’re ready tax wise to jump in? Then they’re gonna come out of forbearance and buy properties, right?

Jason Hartman 32:52
Yeah. So they’re, they’re, they’re managing it strategically, yeah, any rational person.

Adam 32:59
So I looked at multi rent collection. Right now, since we talked about how, you know, people haven’t been getting stimulus haven’t been getting the extended unemployment. And the best number, as we’ve talked about, it’s really hard to find single family rental rent collections. But I looked at the multifamily rent collection from the National multifamily housing Council. And if you look here at the numbers, this is at the end of the month, is the total number here, the 96.6, back in May of 2019, it’s plunged all the way to 94.8% of rents are being paid in full, by the end of the month,

Jason Hartman 33:35
right. And in the thing we’ve cited on the podcast, a lot of these statistics about rent payments. And the funny thing is, when this was really bad news, Adam, and you remember it several months ago, when, you know, everybody was concerned that, you know, why should tenants pay rent now they don’t have to pay can’t be evicted, you know, blah, blah, blah. And everyone thought the world was ending, and we just didn’t see any significant problem whatsoever amongst our own clients or our own portfolios. Okay. And so we thought, what is the disconnect here? And what we realized is that this was mostly in a problem for large institutional landlords owning apartment complexes. And, you know, we theorized about this thought about it. And one of the reasons that, you know, again, this is a theory, but I’m pretty sure it’s what happens is that when you have an apartment complex, and you have people together, that are very close together as neighbors, and they’re talking to each other, and they’re sharing their thoughts and their emotions, and what’s going on in their lives, and they all have the same single landlord, they tend to gang up on them. And this is why in apartments, you know, over the years, you’ve had this problem of rent strikes. And so this isn’t the same as a rent strike. Say, but, you know, tenants will just start talking to each other and say, you know, hey, you paying your rent, you know, no, I’m not paying it, or I’m only paying half or, or whatever. And then they’ll just all, you know, move in lockstep, but you know, why wouldn’t they? It’s natural human tendency. And with the single family homes, we just haven’t seen this kind of problem. And I want everybody to remember something, that whenever you see statistics like this, they are for large institutional landlords, because that’s who gets surveyed, all of you who own single family homes like Adam does, like I do, like our clients do. And our other investment counselors, they don’t get a survey from anybody. Nobody surveys them and says, hey, did your tenant pay your rent last month? You know, nope, nobody does this, because it’s so fragmented. But there are tons of companies that keep stats on, you know, large institutional apartment complexes, and they survey these landlords, and they say, Hey, you know, can you tell us what’s going on? And, and so that’s, that’s another reason that these statistics, you really have to peel back the layers of the onion. And, you know, read between the lines, as the saying goes, I hate to be so cliche. But it’s true. Yeah, I’ve

Adam 36:14
never received a phone call or an email asking me if my tenants have paid rent, I have received hundreds of phone calls, trying to buy my properties and

Jason Hartman 36:23
lots of text messages to lots of yellow postcards.

Adam 36:27
Yeah, definitely, definitely get those in the mail all the time. So yeah, so rents are being paid, even without the stimulus even without the extra unemployment, which just leads me to believe that things are on the upswing, as we’re able to open especially as the vaccine comes around, no matter what you think of it as more people start taking it. And we’re able to open up more, you know, across the country, things are going to get better. You know, I don’t like I said, Unless there’s a massive shutdown, I have trouble envisioning it being worse than it is now. So now,

Jason Hartman 37:02
are you jump for a minute, I want to take one one of these comments, because that’s interesting. Well, all of them are interesting, but we don’t have time for all of them. By the way, folks, I know a whole bunch of you are watching on all of our different Facebook pages and on YouTube. And you’re not telling us where you’re located. So chime in and leave a note and just tell us where you’re watching from. We know you’re watching folks, we can see the numbers. And our numbers are aggregated for all of the different places where this is being distributed to. So you know, you’re out there, tell us where you’re located. We always want to hear from you and make any comments or questions. But this is interesting. eccentric spelled, oddly, is that it says, sooner or later, the monthly mortgages will be so expensive, the low interest rates will not be affordable. Seems like a massive bubble. How is this sustainable? Well, here’s the thing. And I said this yesterday, when I when I did that video interview, I think what’s going to happen, Adam, and maybe you haven’t heard me talk about this before, but I think it’s like a rent controlled apartment in New York City or San Francisco. And this is going to be an interesting dynamic that’s going to play out, say five years from now, for example. Okay. Rates are artificially low. When rates normalize. Okay, there, you know, people are getting paid to borrow money right now. Okay, it’s neg, we have negative interest rates on mortgages. They’re so so cheap. It’s totally artificial. It’s a game of smoke and mirrors. And we should all take advantage of it. And you should all take advantage of it. Adam is absolutely right. Absolutely. Right. But here’s what happens. You know, as soon as rates start to normalize and go up as they as they need to, and they should, then all the people sitting there with these three decade long, ultra low negative interest rate, fixed rate mortgages, they’re just going to sit on them, because they’re such a good deal. They’re not going to give them up. It’s like that rent controlled apartment in New York or San Francisco, which I hate rent control. But, you know, it distorts markets. And these low mortgage rates that are three decades long will also distort the market. And here’s what will happen in this my prediction, okay. These people will sit on these great mortgages, they will not be incentivized to move because they can’t get such a good mortgage later, the Home Improvement business will boom because people will be doing remodels and additions and staying in their home. And if they’ve got investment properties, they’re just going to keep them okay. So what this will lead to is more constraint on supply. Okay, so, you know, without those people moving with those people being incentivized to sit on these fantastic 30 year mortgages that they’ve got, maybe they got 28 or 25 Yours left, or 20 years left, they’re not going to do anything, they’re just going to sit there. And that’s going to cause a bigger supply shortage, which means what it means upward pressure on rents, upward pressure on prices.

Adam 40:14
And even in that, I mean, it’s that will happen. But even if the interest rates goes up, realistically what we’re going to see as a stall, we’re probably not going to see a bubble burst and start plummeting down, we’re probably we might see a stall, but we don’t invest for the appreciation, appreciation is fantastic. And if we see a stall, then rents will come up and normalize with the prices. And then we’ll just sit there and collect the hundreds of dollars a month of cash flow that we’re getting. So it’s kind of it’s a win win in that situation. And then, as the I think, Jason, in the episode you had just a day or two ago, you’re talking about how we’re in running a deficit of a couple 100,000 homes a year in terms of construction or new home starts. And it’s been that way for 10 years. So I mean, the demand is there. And if the properties aren’t if you’re not being incentivized to turn the properties, then yeah, you’re gonna run into issues with with supply and that’s gonna at least best case. Worst case scenario, stall out.

Jason Hartman 41:15
Yeah, no question about it.

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