Video Closed Captioning:
Good morning good afternoon, good evening.
folks, Michael uber one rental at a
time back with the man myth, the legend
and somebody who’s helping one rental at
a time fans everyday matt the mortgage
guy, how you are doing, buddy I’m doing great
yeah, we might as well plug it upfront
greatmortgagebroker.com if you want good
advice let us know where you’re at how
we can help and uh another quick plug
for a look at that studio behind you, man
just coming together nicely fancy
I’m having fun I’m like what do I put on
the shelf now like what like yeah
yeah, let’s think about it. It’s fun; it’s
cool, yeah, it looks good. Thank you, buddy
I appreciate it. Hey, one of the things we
were talking about off-camera is good
old boy meets Kevin
the man with 20 million dollars in cash
now is jumped on the crash videos
and i think he put out a video just the
other day i have not watched it you have
seen it where basically he’s parroting
the standard rule of rates go up one
percent real estate will crash 10
percent nonsense yeah and and and in
fairness he said a lot of stuff that was
one of the things I disagreed with a lot
of the stuff I did agree with you know
because 20 000 or besides 20 million
cash the guys got 20 million in real
estate so they get so the guy is a big
fan of real estate that’s where he
started yeah is you know real estate
agent slash investor um so
um
i i think he’s
on the spectrum of of fear-mongering not
that far towards you know a fud type of
person who says markets are all crashing
but one thing i pulled out of it that i
just i
it makes me crazy when people say it is
interest rates go up one percent housing
goes down 10
like it’s just not true um for a number
of reasons the first one being
there’s multiple things
that go into
real estate prices right and you and
it’s not just like interest rate is this
prices do this no there’s supply and
demand there’s buyer sentiment there’s
all kinds of things that we have to
factor in not just the rate well here’s
the deal Kevin wasn’t even born in the
70s the 1970s show how just
irrational this assumption is rates went
up in the 70s 600 basis points 6
which again given this logic means
prices should have fallen 60 percent
it’s
and it didn’t happen property actually
went up because what people aren’t
talking about today and kevin’s not old
enough to remember this or has read
about it yet is wage inflation why is
inflation raging right now is because of
wages why can people buy more housing
because wages are up we live in a
payment based society
rates went up 600 basis points
properties doubled in a decade
that’s not supposed to happen because
wages went up 88 or 91 or something
it is far more complex than this what i
want to tell people all the time when i
hear this nonsense about go up one
percent and it falls 10
is if that is true
when ice cream sales go up
murders go up
there’s this thing called correlation in
causation
think about that
when does ice cream go up in the summer
when do murders go up in the sit in the
cities in the summer
just how it seems to work right more
people are out more people are getting
into trouble it are murders caused by
ice cream sales
no they just police officers should
stand in front of leather bees and just
do not let folks in yeah just close all
ice cream stores
that’s it’s
yeah it’s my blog and then a lot of
people point to cue Kevin specifically
points to q4 2018
he talks about his market of la being
down 12
it didn’t happen
that’s nowhere in the charts there’s not
a chart that you can show me that shows
la county going down 12 in a quarter
it’s it’s maybe bad memory but if you
could show me a chart I’d love to see it
because i know he says it but just
because someone says it doesn’t make it
true right yeah and i mean i think for
me for a simple-minded me who wants to
you know even for people that haven’t
been around for decades
if you want a simple example i literally
had a comment in in my youtube channel
that said quick plug matt the mortgage
guy on youtube go check it out um
when rates go to five percent it’s game
over for real estate and I was like um
incorrect you know the
previous
2018 is not that far ago prove that that
was false you can look at the end of 17
to the end of 18 and rates for all
intensive purposes went from four
percent to five percent they did um
they’ve already gone up one percent and
we can’t say that doesn’t have an effect
on real estate because i think that it
hasn’t played out yet right yeah of
course but
if we look back at that one percent
increase where rates went all the way to
five percent
the effect it had on real estate for for
my p brain just looking at a chart
median sales price of houses
it made
real estate kind of flatten outright
and you know I don’t know what the final
numbers were for 18 and 19 but you know
5 7 home price appreciation you know
a lot calmer than we’ve seen today
because then you see 2020 when rates go
down and it’s just off to the races for
real estate prices right but to think
that rates going to 5 is going to end
it’s going to cause a crash it’s it’s
going to have this dramatic effect on
real estate is just we don’t have to
look back that far to say that’s not
what happened that’s not what happened
will it slow things down i’m sure it
will will it cause you know
things to go from 15 17 home price
appreciation down to 5
a truthful like healthy level
i hope so and probably right but a
thirty percent crash because rates go to
five percent is just not in the cards
and one thing to think about for
everybody is
there’s there’s more than one or two
variables here yes right it’s not like
rates this real estate prices this
there’s supply and demand and all the
other things that go into it um
that we got to look at so um you know i
try to keep things simple and on my
channel that’s all i do is like if my
simple brain can understand it i hope
you can too let’s look back at the last
time rates went to five percent
did real estate crash and crumble no no
yeah so I’ve been doing this for 20 some
odd years i’ve i was buying deals with
six seven percent i’ve actually i’ve
actually bought property with 12 hard
money loans so I’ve been doing this
quite a while
and
what happens when rates go up fast is
transactions slow
they do
right and again when transit when the
mortgage rate got all the way up to i
think it was 16 and a half percent in 83
did real estate crash nope
real estate transactions crashed they
fell 50
that’s a crash
values didn’t change because of wages
wages were up
folks we are in a wage inflation cycle
if wages were flat
or negative
yeah we’d have a problem but that’s just
not the world we’re in today everybody
everything i’m looking at wages are at
five six seven eight nine percent
maybe they’re not for you but again
mortgages are built on um
you know the
community of buyers so wages are up it’s
just right yeah and i mean everybody’s
got something to point to where they
think that this whole
imbalance of supply versus demand gets
fixed overnight you know some people say
foreclosures some people say there’s
more building than than ever and you
know they’ve got multitude of things to
point to
i think
that
one we’ve already seen people coming out
of forbearance are not foreclosing the
data is as clear not there if you want a
fear monger say oh look at foreclosure
numbers they’re up thirty percent
oh yeah they’re up they’re up from a
period where you couldn’t foreclose yeah
they’re also 80 87
right right yeah you look at it versus
the same time period in 2020 January or
2020 of 19 we’re actually down like 50
plus percent on foreclosures um and so
that’s not going to help the the
building
although it’s happening more than it has
in the past it’s still not enough right
and it’s not coming online builders just
came out yesterday homebuilders survey
talking about garage doors windows
and cabinets they’re having months of
dead days so yeah an in-process home is
not make it livable right and then the
funny part is two people like all this
building that’s going on this stuff’s
gonna hit the market it’s gonna flood
the market inventory if you don’t know
how it works I’ll give you a quick sneak
peek i already sold three six nine 12
months before they’re built they’re sold
yeah this is not completely sold out
it’s not empty inventory right yeah they
don’t wait until it’s like okay we’re
done who wants one and then 400 houses
come on the market right like everyone
has been spoken for
180 days before the thing is livable
yeah it’s funny i do find it really
interesting that meet Kevin he has i’ve
actually seen him go from Kathy wood to
peter Schiff
Kathy wood right where he was buying all
these crazy stocks with high valuations
and no earnings
sold out of that now he’s got peter
Schiff he’s buying gold and stuff it’s
it’s it’s really interesting so he’s
he’s he is uh he’s gone from one extreme
to the other for sure yeah i haven’t
watched much of this stuff lately i’ve
always enjoyed him uh seems like uh you
know
great dude but i feels like uh you know
with all this turbulence in the market
he might be spinning out a little bit
right now that’s what I thought i told
him i told him i think i did a video on
it i was like Kevin dude you need to
take a week off and get away from this
because you’re on tilt and if you ever
played poker going on tilt’s not a good
thing right right yeah crazy stuff well
let’s let’s plug
greatmortgagebroker.com again because
again you’re helping people in my
community every day which i appreciate
and if you’re even working with someone
else and you want a second opinion reach
out to his team how do you want them to
do that go to greatmortgagebroker.com
yeah and like mike said just let us know
where you’re at how we can help if
you’re working with somebody else
sometimes it’s just us saying yep it
looks good yeah or other times it’s
saying well that doesn’t seem right you
know i talked to more people and I think
i surprised people i talked to someone
this weekend and i and I said you know
they had been working with a mortgage
broker that helped them with five deals
last year i said i think you’re set
they’ve got all your stuff ask this
question that question and let me know
on Monday or Tuesday if you want to
circle back with us but they should be
able to take care of you got all the
same stuff i’ve got here’s the two
questions you want to ask there you go
very cool thanks buddy for all you thank
you for being a part of the channel take
care thanks mike