Speaker 3: Well for real state.
Speaker 1: It is because the biggest component of the consumer Price
index is housing, because for most families, housing is their
biggest household expenditure by far. So historically, rents and home
prices track along with inflation. They do lag a little bit,
but you know over time they will always catch up.
Speaker 2: You are listening to Carrie Letz's Financial Survival Network, where
you get valuable information you just can't find anywhere else
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Speaker 3: And welcome. You are listening to and watching the Financial
Survival Network. I'm your host, Carrie Let's back from a
month of play in Europe and in Asia, but not
really play. I got to admit I worked way more
than I thought I was going to, probably way more
than if I was at home, but still managed to
have a great time, eat great food, see amazing sites.
And if you haven't traveled, I suggest you do. You know,
if you use my techniques, you won't even pay very much.
Free business class flights to Spain, free business class flights
to Thaie Land and you know, basically hotels. Oftentimes I
was paying what you pay for breakfast at one. So hey,
we got a checklist for that. If you want it,
write me an email. Just put to travel for free
in the subject and it's kl at carrie lets dot com.
Soln Welsh is with us now, Lan real estate been
in it for quite some time, You've got your take
on it. We talked to a lot of real estate
people here, and the interesting thing is, as different as
your approach might be, all of you are kind of
on the same wavelength, the same path. I don't know
if that's because it takes a certain kind of personality
to do real estate, or if after you've been in
in a while you kind of wind up doing the
same things. What's your thoughts, Slot.
Speaker 1: I think it's a little bit of both. To work
in commercial real estate, you need to have a good
financial orientation and a real love just for the product.
So I think that kind of takes the audience in
the windows it down. And then with a small group
that are in it, you know, they end up talking
to each other quite a bit, so probably reinforces a
lot of the patterns.
Speaker 3: Right, So Okay, real estate investing. There's no other area
of investing that I've found where there's as many winners
as there are in real estate. Whereas you go into crypto, yeah,
like you could be a major winner, but there are
a lot of losers there. You go into the market,
and the market's the market. You know, it's all timing,
which nobody knows how to do. But real estate doesn't
work that way, does no.
Speaker 1: I think most people approach real estate with a multiple
year horizon with their investment idea versus crypto and stock.
Sometimes people have a very short term focus, and the
shorter of the time horizon, the more important your timing becomes.
If you're in real estate for a long time, it's
really hard to lose money.
Speaker 3: Yeah, if you can stick out the down periods, which
are infrequent but crash every seventeen years, right, yeah, something
like that. So so, like you know, I seen the
There was a guy who wrote a book called The
Real Estate Investing Cycle. Okay, but I can't remember his name,
but I did get the book. It was very difficult
to get it because it was out of print. But
it's written like forty years ago, and it's always the
same like I'm here in Florida. We got international money,
then we have a crash, everyone runs for the doors,
and then it's the local guys, you know, the local
speculators that start to perceive value, and then it gets
built up and you start getting institutional and then when
the party's almost over, guess what you get the international
crowd in again. Yep? Is that your experience?
Speaker 1: Yeah, that's definitely I think what the cycle looks like
if you're an internationally driven market. So I live in Colorado,
so some of our ski resort towns are attractive to
international buyers, and it's a very similar to what you described.
Speaker 3: So what's the worst deal you ever made in real
estate law? Oh?
Speaker 1: Gosh, we bought an office building in Houston about six
months before COVID.
Speaker 3: That we were going to renovate and we are timing there.
What's a total disaster.
Speaker 1: So now that was actually my first fund that I
did with a lot of other limited partners. So we
had one really great investment in that fund and one
really terrible one they averaged out fortunately.
Speaker 3: Yeah. Well, the average of life and death is being
a zombie, right right? All right? So now where this
cycle is getting old because look two thousand and eight,
seventeen years ago. Is this time really different or are
we going to have a crash.
Speaker 1: At some point, you know, on the real estate side.
I don't anticipate we'll have a crash on the residential side.
And the reason is that home prices have gone up
so much, so fast, that there is a lot of equity,
a record.
Speaker 3: Amount of equity.
Speaker 1: If you take a look at two thousand and seven,
In two thousand and eight, incomposite, the value of all
the mortgages in America work greater than the value of
all the real estate home all the homes in America,
So coluctively, we're all under water by a little bit.
This time it's the other way around, with a huge
amount of equity. Interestingly enough, about thirty eight percent of
the homes in America don't even have a mortgage at all.
Speaker 3: That is interesting, and so a lot of cash buyers.
Is inflation dead? Is doge going to kill? Inflation? Is?
Obviously any asset holder's greatest friend within reason is inflation.
Speaker 1: Right Well, for real state it is because the biggest
component of the consumer price index is housing. Because for
most families, housing is their biggest household expenditure by far.
So historically rents and home prices track along with inflation.
They do lag a little bit, but you know, over
time they will always catch up.
Speaker 3: Okay, so let's let's talk about inflation. Will Rogers once said,
invest in inflation. It's the only thing going up. And
certainly in the past seventeen years, the real economy has
been lagging, but real estate i e. Inflation has been
going up.
Speaker 1: It has, So what will happen next to the inflation
is probably really contingent on how fast we can wrap
up the tariff negotiations.
Speaker 3: We're going through right now.
Speaker 1: So hopefully that'll come to a favorable conclusion with a
lot of the countries and we'll see things died out
a little.
Speaker 3: That you know what. I am glad you raised that
point because I have actually written a little scream about it,
and I just have to find it here if you'll
be patient with me. Sure, let's see. Uh yeah, I
didn't post it yet in the sub stack, unfortunately, but
let me see if I can find it. I know
it's here. Well, I'll just tell you the premise of
it here. It's like all these countries want to make
trade deals with the United States. Right. Interesting thing is
that it's not like it used to be. Basically, trade
deals would take you know, forever, because they were a
giant grift because you had all these diplomats. They get
to they get to stay in five star resorts. They're
having you know, chateau truth with all their meals, they're
having it with breakfast. I mean, it's a grift on
the taxpayer's dime. And they get the incentive is not
to make a deal when you got all these grifters.
And that's not just the United States, this is the
whole world here a lot, you know. But now with AI.
And believe me, if there's one thing the current admind
knows how to do is use AI probably better than anyone.
You just feed in a trade deal, you tell it
to find and you feed it into a model that
specializes in international law, shipping, logistics and tariffs and everything else.
You feed the current agreement in there and say show
me every way we're getting ripped off now, and then
five minutes later it tells you every where you're getting
ripped off, and then another five minutes later, it's got
your completed agreement here for your signature. You know, prime
Minister u Arnie or whomever right and take it or
leave it. And so it's not going to take months
or even years to do these things. This is the
mindset of the media, the legacy media, and really it's
a narrative that just isn't true.
Speaker 1: Yeah, I'll be interesting to see if we can get
through this a lot more rapidly because of the tools
like you mentioned, should really enable these people to think
through the process a lot faster, I certainly hope. So
the uncerturinity is not helping out the markets a whole
lot at the moment.
Speaker 3: Yeah, it trust me on this. It's going to happen,
you know. The uh it's just nobody quite gets it.
But but we get it right, We definitely get it here.
So all right, so the tariff thing, once that goes away,
what's going to happen.
Speaker 1: Well, we had seen a pretty consistent trend with the
consumer price index declining on a very gentle slope over
the last twelve eighteen months.
Speaker 3: I'm not an.
Speaker 1: Inflation next for by any means, but just from what
I read in the Wall Street Journal every day, So
hopefully this will be a blip and we'll get back
on track with the things declining. One of the components
of the CPI Consumer Price Index that have been propping
it up was home prices. But we're seeing that the
rate of home price appreciation is slowing down. Rent growth
has slowing down over last year, so that'll certainly be
an assist to the inflation rate coming down as well.
Speaker 3: All right, So you a buyer a seller? Oh, we're
a buyer.
Speaker 1: There's a lot of really great opportunities out there in
the market right now.
Speaker 3: All right. I like it and I tend to agree
with you, believe it or not. And all right, how
do we find you? How do we connect with you? One?
Speaker 1: You can go to Irtoncapital dot com. I R O
N t o N Capital dot com And actually we've
got a book on passive investing we can make free
for your audience. So yeah, Iretoncapital dot com forward slash
Financial Survival I believe.
Speaker 3: Yeah.
Speaker 1: So that should be really easy to remember.
Speaker 3: All right, and that link will definitely be in the
show notes this interview on Financeial Survival Network dot com.
So make sure you click that link so Lon knows
we're sending people to them and get the book. And
if you have any questions for lon myself, shoot me
an email klatcarrielts dot com. Well you're at at sign
up for our free newsletter. We got eighty thousand subscribers
now more on the way. Really appreciate you coming on
with us a lot. And hey, I guess we're going
to find out who's right and who's wrong over the
next three to six months.
Speaker 1: Right, I think we'll know a lot more in three months.
Speaker 2: Thanks for listening to Carrie Lets's Financial Survival Network, your
solution to today's trying times. For the latest, go to
Financial Survivalnetwork dot com. Financial Survival Network now more than
ever