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market right now prices are frozen and buyers aren't buying and sellers aren't lowering yes it's definitely Frozen as we all know question is how good is it going to be next year or how bad well there's going to be challenges that are going to affect the market next year and that's kind of what we want to talk about and how it is a weird housing market and depending on these factors will determine kind of what happens next right so let's jump right into unemployment because that's the big one that you kind of identified over the

last couple of weeks we've been digging into this a little bit as we all know the Optics are 4.2% we hit a 50e low a year ago but it's actually trending up yeah and you know we were talking I think last week about underemployment too so you don't just have an unemployment issue but you also have an underemployment issue so basically you know as we start to see the unemployment numbers we also have to look at people that are taking jobs that are making less money than they previously were earning because along with inflation that's

going to really start to affect what people can afford right and there's a few things going on right uh we're going to tackle this but the one thing is inflation's hitting employment and so on one hand people are saying that they're trying to reduce their costs one of the biggest costs is Labor uh Labor's gone up but also we got AI automation you got work from home which last year was like 32% they're saying it actually um is going to go up to 50% so that could be very very interesting as well that's that's more

like a part-time yeah yeah well and what's interesting is you know people are looking at um the unemployment issue in an interesting way because obviously unemployment and job uncertainty is going to lower the demand to buy houses but it's also going to affect the supply as well because you know you're not going to have people wanting to upgrade into bigger houses and sell their 3% mortgage home because they're not sure you know what their job looks like this you can't blame them it's the lockin effect they call it right so if you have a bunch

of equity and a really low rate there's no motivation for you to make a move right and and some people would argue with you and they would say you know if they're sitting on a bunch of equity they could sell the house and take that money but the problem with that argument I think is cuz that's what happened in like 2007 but the problem with that argument is they're sitting in such a low mortgage that they would be upping their monthly payment to be in a rental buy so much money that I don't know if

most people even if they get $100,000 from it are really going to think it's worth it well they call that the 3DS right so if you really look at why why would somebody move out of a low mortgage or a low rate because that that is an asset right now they call it the 3DS a death divorce or debt so that would those would be the three reasons so most people aren't going to move make a lateral move um and have a much higher payment right absolutely and so like why would they you know want

to move in order to get that higher payment so they're not yeah now there's all kinds of reasons that people do obviously job relocation or maybe they're retiring or maybe they just need a change whatever it is so there are certainly things that are that are going to happen and you certainly can move from from a higher price point to a lower price point and all those kinds of things but one thing's for sure if you have a I think we looked it was there was 80 over 80% of the people had under a 6%

mortgage and mortgages are over six right now oh yeah they're almost seven yeah I think well I looked at they're somewhere between six and seven depending but the 10 years going up right the long the the long rate so um that's very very very interesting yeah one thing we could see if the if we start to see a change in housing prices is investors dumping some of their rental properties you know due to increased cost and due to you know wanting to scoop that Equity so you could and you're kind of already seeing that with

Airbnb listings are kind of up so you could see some additional Supply if unemployment continues to go up for people you know wanting to get out before prices go down it's possible Jerry could you pull that chart up real quick um there's a chart that we were looking at go down to the Chart so this this whole thing is about um the underemployment let's stop right there real quick and I want to show you guys on the left side are actual people right so these are us workers unemployed at least 27 weeks this is really

interesting now you got to kind of take the middle out because that's kind of the pandemic it's not kind of the pandemic it is the pandemic I guess um but let's take a look at what it hit a low point which we all know was in uh let's let's just say it was in 2023 um if you go straight up you'll see it's a million people so from there to now it's gone up uh in the over 600,000 people now that's a significant number of people um if you go all the way over to 2018

you're going to also see that we've actually never really had it this bad from 2018 at least 2018 it was a 20 is a 1.5 so uh uh if you take out the pandemic piece so this is an interesting thing here because you know they're still tackling inflation and as we how does this all relate to real estate it relates to real estate because as that number goes up then that that's more people that are in kind of flux now obviously we don't know their financial situations but 600,000 people is a meaningful number and um

you know that's just in a couple year period so those are um and the interesting thing is a lot of these jobs are health care they're Tech they're they're things even though some of those some of those uh Industries are growing but we are seeing a fair amount of AI and automation actually kind of replacing um a lot of this stuff even Transportation I think Jerry go down to there you go right there so uh these are the numbers actually by industry um transportation believe it or not is not that bad these are these are

all worse but if you take a look at um the financial activities you think about how everything's kind of moving um uh this this really is um a white collar problem primarily and and so uh as I dug more into this topic we start to see that this is really people are are valuing skills over degrees and I think that's what we're starting to see is skills over degrees and and you guys really uh I'm obviously being in the construction and real estate business one of the biggest issues we have are trades we're talking about

electricians and plumbers and air conditioning and all the things you know people that we all need um so desperately there's not a lot of people pouring into that they've been going into into college and and getting degrees and into into more white collar roles now there's nothing wrong with that but I'm just saying that that there's a big gap based on you know where things are headed so those are going to be Darlings of um the I mean people are going to make a lot of money in those section yeah absolutely and it's it's just

interesting um you know how this is going to affect colleges and how it's going to affect the market and even even the housing market well it definitely is and the the the second thing after unemployment is is the low inventory and we we've talked about this a long time some of that is because of the lockin effect right now the homes I think they 3.7 um on months on the MLS so that's a national now what they say is the average depending on the market is somewhere between four and six we've heard as high as

six so what that means is that means that homes are sitting on the market longer and that inventor is starting to stack up and kind of back to den Neil's point I we're starting to see people move out of which is always the first thing that goes the call it the the the second home the Airbnb the you know the people they might have some Equity even in those but they're not cash flowing they're feeding them and um those are those are a little bit different yeah and people are locked into those low rates but

something I thought was interesting is Jerry if you want to pull up clip one um it's discussing the Boomers here and it says only 15% of boomers are looking to sell this year and among Boomers who own homes 54% they never plan to sell the house they live in and um you know they they own 38% of the real estate right now yeah so that that's a that's a big percentage you know um the truth is I think that Boomers they always used to downsize like I even look at my parents for example you know

you would downsize a house and you would scoop the equity out but now they're sitting at such low mortgages and a small house would be so expensive if they have them at all that let's let's not forget the boomers are older right so a lot of those um like my my mom your parents that some some of these folks don't even have mortgages there's a fairly big percentage of people that actually have paid off their mortgages right and I think that these small houses are just so expensive for them to wrap their head around because

these starter homes that they used to kind of downgrade to um have gotten so expensive right so like my parents actually a couple years ago were looking to maybe sell their home but when they looked at what they could get for the price they could get it for they just decided to stay where they were at and I I think another part of this is that um you know a lot of these people have big capital gains taxes right that they're you know if they do sell their home now I I know some of you

are going to tell me well they get x amount of money because they're married but yeah but some of these people bought their homes for like $100,000 they might be worth like 7 800,000 now there is an exemption for personal but but there's a limit on the am there is a limit that's true yeah yeah and uh you're right and I also think you know we're right in the middle of this transition of one new Administration coming in and an old one going out and I think there's a lot of people just kind of seeing

what's going to happen there um there's a little bit of chatter around what they're what some some people are calling the Trump bump actually which is the tax policy and the some of the economic growth you know we still have yet to be seen there um but rates do not appear to be coming down into the fives and fours like everybody thought that they were going to be you know that that's a big deal so so if you guys were on my webinar you you you saw that redin Zillow realtor National Association of Realtors all

these different groups all believe that home prices are going to continue to go up modestly like somewhere between 3 and four% um and that rates aren't going to change all that much and and so this is going to be kind of a little bit about what we've already seen but there's not going to be really any drama but we're still going to have a real affordability problem still yeah it it is interesting you know when it comes to the Boomers I think a lot of them too are really kind of upset that their kids can't

buy houses like I think that's a thing or their kids did buy a house but it's like a starter house right like my parents talk about all the time like if anything happens to us you know your brother could move in here with his kids like I think there's a lot of that too where like the parents think like okay once I pass I want my kids to actually have this home because they can't afford this home I mean even your brother and his wife were talking about that when we were in Seattle last weekend

yeah yeah yeah it's a thing because you know as you guys know I have two kids they're both in their 20s and they're saving they're saving saving saving saving um and um at the same time the home prices are going up yeah you know and and they're just seeing their kids not having the same housing opportunities when I think if you look at the generation before they had a big nice house their kids had a big nice house they decided to get to a smaller easier house and just sell that house but it wasn't like

they had this inclination where they needed to do something for their kids it's a little bit of a balanced Market I one let's don't forget we all just got out of a really really really kind of easy time like interest rates really low and um hopefully you guys capitalize on that period of time uh I don't think we're going it's going back anytime soon the Genie's out of the bottle there yeah so um you know the one thing that's going to make house prices go down is more houses you know and new construction permits are

up and you know that's a big piece of the inventory you you're going to see that so that's actually really really good for the industry um the industry needs it is severely under supplied but I'll tell you one of the things that I saw was the unsold inventory that we're talking about unsold inventory from 2023 went up by 27% that's a lot that's unsold inventory so now it's still not even close to what the average has been the year-over-year averages so which they say is four to six months of uh inventory on the MLS so

I would guess that 2025 is going to be one of these times where there's going to be more inventory added home prices are going to continue to creep up but once inventory goes up more then you will start to see housing prices level out because the one thing the uh Supply more supply of anything doesn't matter what it is will will actually when the consumer has more choices um and the seller has less options then you're going to start to see things normalize but right now it's still it's still pretty active and people people I

don't think people believe that home prices are going to go down anytime soon no I mean some people on here are saying that they are expecting them to crash or go down but it's just hard because people are sitting in such low interest rates that most people that own homes especially people that own homes 2020 and before which is most people aren't struggling with their payment yeah and and you guys um might know one of the things that we do when we're looking at where where to invest where to buy is we look at where

people are going uh migration population migration and so where are people going they're even for 2025 they're still projected to be the top three or Texas Florida and actually Virginia made the list of all of all places Texas Florida and Virginia are still no that's with the number of people now you can reach into Texas like in Austin um where I'm at you reach into Florida and you can you can make a case that things are going down and they are in some some a lot of those markets I'm talking about just pure people moving

um and then you've got Colorado Arizona Georgia North Carolina uh kind of the top off the list th those are those states that people are moving to now where they move what's going on in those markets entirely different issue but you want to be you don't you want to you don't want to be a Pioneer you want to go invest where people are going whether it's um in single family Airbnb Rental Commercial office retail Self Storage it doesn't really matter but without people there's no rent and um there's nobody buying things so so you do

have to pay attention to that one thing and then from there you got to dig down and see where right and um you're going to have pockets that are going to be overbuilt you're going to have areas that are going to be retracting you you know all that kind of stuff but one thing is for sure I don't see I don't think think you're going to have a big relief with interest rates and I don't think you're going to have a huge relief on pricing and if you do see some temporary pricing adjustments which we

are seeing in some markets in Florida it might be an opportunity to take advantage of that little dip uh but I do think it's a it's a short-term window yeah and Florida's its kind of own thing just because of all the insurance issues they're having here California and parts of Texas are having the same issue um but the third thing is interest rates so this is the third thing that everyone's kind of waiting I I have to laugh because you know I follow a lot of Realtors uh on um Instagram and stuff and they're always

talking about dating the rate and marrying the home and all and all these things right what does that even mean well it means if you love The home your payment can go down once interest rates go down right okay so but but the the issue I have with that is you know people thought interest rates were going to go down pretty quickly like I have one of my clients um in Aesthetics is a doctor and and she tells me like our housing payments like killing us like I need rates to go down CU we're like

maxed out and I thought rates would be down by now and so a lot of people took that advice and kind of dated the rate but the problem is the rates are not going down yeah so well like like any date you got to make sure you can afford it yeah so so whatever rate you get when you're on a date I guess um you you just have to make sure that you're fine at that point and and then anything else from there is a gift in in other words your strategy shouldn't be for it

to go down it should be to be comfortable with wherever you are hopefully rates do go down if everybody wins but let's don't forget what would happen if rates go down to five a bunch of refinances not a bad thing right certainly that's good but what would also happen is um there would be another run on on people using that low rate to to to invest again and potentially could create another bubble which is exactly what we are uh coming out of so um low rates cheap money uh creates runs and um and nothing wrong

with that but um trust me I'm in the in the game low rates help me um but I I don't think your strategy should be um rates are going to be a full point or more less next year because I also think at the same time especially if you're in a single family you're not going to see tremendous amount of relief now on the investment side on the commercial side which is primarily where I play we've already seen those adjustments so Office Buildings are getting clobbered Self Storage has been flat uh a multi family has

been is down 30 to 40% um you know and and now medical office is actually doing pretty well um there's there there are sectors that are actually doing pretty well last mile distribution's doing really well uh um the the um uh any anything that has to do with Cloud you know the the the servers and those kinds of things those are doing extremely well um you so there's a lot of sectors that are doing extremely well oddly enough you know what's really doing well is the food business yeah I U yeah like anchored really good

anchored grocery is doing extremely well and and so um you know probably food costs are way up and as food costs go up so do profit yeah absolutely and I think that if rates were to drop pling Devil's Advocate this year I don't think they will either but if they do most likely you would see an increase in prices the only way that you wouldn't is if the economy really tanks and people just don't have jobs and you got to see why why is it let's let's run that out like um if rates go down

you know some of you who who are sitting on a on a on a car let's say that's two or three years old you'll go potentially go get a new car because you're you're you're trying to replace out that monthly payment so that's not necessarily bad same thing with houses so what that does is it it um if rates go down U arguably your rate on your mortgage payment would also go down um and that means that you would be able to afford more house or maybe just a house and so that just creates more

competition it creates more Demand on the existing Supply supp which is already low so that's kind of the point in 2008 there was so much Supply from The Fallout that it took years for that to unravel and so one of the things that helped unravel that were low rates because people not only were buying at 50 cents on the dollar for the actual whole um real estate but they were also financing it at you know basically free money so you know that cleaned up that kind of that period of time and that that lasted quite

a while so if if the rates do stay high do you think that that makes the market stay frozen because it's kind of interesting so I bought a home last year as a rental and my payment they it was for sales at two bed two bath and Scottdale $600,000 my payment is like right around like 2,800 but the one across the street from me just listed for $750,000 and I was looking at the payment is almost $5,000 a month it's like 4700 or something so two grand more per month yeah and for a very similar

home for a similar home and but my question is is like how are people affording that because most people can't afford I mean that doesn't include the HOA that property tax insurance I mean that's just the payment there was one thing for sure is there's no investor buying that correct that that's for sure there there's a there's there's the rents uh the in potential for that particular Market is not even close to that cuz you got four grand plus plus plus four grand almost five grand plus yeah five grand plus property taxes Plus Insurance Plus

operating cost plus cap backs plus HOA all that stuff when it runs for about 2,800 a month that's the point right so it' be a it'd be negative so the only person that can buy that is a is a um probably like like it used to be a person that would move in well but also it's an expensive housing payment though for a twoed two bath house $5,000 a month I mean you know after taxes and insurance probably 5500 it's more than that for sure it's expensive you know and I I I guess what I'm

wondering you know this the reason the Market's Frozen is because people can't afford the prices of the new houses but it's like you know if these people decide to unlist it because they probably bought it forever ago for a much lower price would be my guess then they can make money wrenching it but they just can't make any money you know they just can't sell it for that much is my Depends yeah like but but again like let's say they did buy it a long time ago and they got three or 400 $500,000 of equity

right uh to a lot of people's Point here that's something right yeah and I don't know if it's a primary residence or not but let's just assume it is and you know then they have a tax over over that exemption piece but uh it's real cash you know there's nothing wrong with having several hundred, doar of walking around money the problem is then what you know how do you re-enter right the market right um and um and that's actually the big issue and that's basically what they're talking about with the Frozen right yeah is it's

a frozen Market but if the rates don't go down like let's just say that they stay high like we think that they're going to does it stay frozen or does it start to go down or what really happens don't know uh obviously I I I think that uh you know inflation's not quite under control uh like the FED wants now we're talking about the FED funds rate of course but the um so I do think we could see a little bit of relief but you guys know how it's going to come it's going to come

in quarter point maybe half point if we're lucky at a time and it's not going to be that significant in other words it could take a $4,800 payment and bring it down to 4500 or 40 you know what 4,400 let's say it's it's still significant that's kind of the point because the house is still expensive so um if if home prices go up I think uh Zillow said 3.7 no realtor.com said 3.7 there's a bunch of bunch of them that all said somewhere between 3 and 4% let's just say three and a half% and there

the average pric is in the low fours you know that's that's a lot of money that's $112,000 right so 12 grand um in is is is uh is a fair amount a lot and and so now you start to calculate that based on another you know a quarter Port adjustment you got to look at the whole picture the the the other thing that I think that is now going to be a big big big topic moving forward is what I would consider the Third Leg of the stool so you got the house price you got

the interest rate but now you have the operational cost of that actual house um and whatever it is and so there's a really good study that bank rate did just go online and Google it bank rate housing affordability study you'll find it but it essentially says that to own a home is about 18,000 bucks a year just to own it not including mortgage right just to own it okay so what could that be that's all kinds of things that's Insurance that's property tax that's utilities that's cap act so that might be things that you have

to do the yard or the paint or the roof or whatever um and so so you now have this other fairly significant issue that I think has crept up that most people didn't really like consider entirely before um although um I'm generalizing but $1,500 a month to own a home not including mortgage is a lot and so that's that third leg of the stool that I think is actually going to be one of the bigger issues that's going to be discussed in 2025 is the affordability piece because that is very very very high um precisely

kind of back to Florida there are homes in there are insurance companies where well first of all there are lenders that require insurance and there are are are insurance companies that will not even insure in Florida now they do have a state program just like California has so I do know that there's options but they're expensive and so you start to look at even if you even if you don't have a mortgage how much does it cost to live somewhere right and in a lot of cases, 1500 is more than rent well yeah I mean

that's average so then that can kind of creep it up a little bit but yeah it is expensive to own a home right now and one of the things they talk about is homeowners know that they need to be able to make their mortgage payment and they save up for that down payment as well but what they don't think about are these monthly costs that are rising around you know Insurance maintenance is a big one I mean I know our maintenance costs have went up significantly I actually brought this up on a forum I'm on

uh recently on Facebook is I'm like you know this preventative maintenance has gotten so expensive because the hourly on maintenance workers has gotten so expensive that what really makes sense to do preventative maintenance on versus just it dying early and replacing it well we we have uh like like a lot of you guys we we have people that help us fix stuff right like and um we're paying our handyman over $70 an hour yeah like 75 an hour an hour and then I just had to have my place cleaned and the cleaners were $80 an

hour and so you know these things are I mean I actually had to look at that in my lease agreement because my lease agreements that I have cleaning was 150 bucks cleaning this time was $300 so now on renewal I'm going to have to go back and adjust the cleaning deposit yeah and and so what people might or may or may not realize is what denal is going to do is pass that on to her tenant like so these costs these these things they do get passed on not not in the case of of of

having our handyman come over and fix stuff but when it comes to turn over where it's Airbnb or rentals or maintenance of of whatever it is you know um these guys are getting squeezed too right like um uh you know some I remember getting a conversation just about supplies and fuel for their trucks and um you know the their costs are up right yeah even the costs for them to go take a lunch break are up yeah I mean every the cost of everything is up and people are commenting I need to find new cleaners

I shop for those cleaners that was the best price that I could find in the area you know every area is a little different but for cleaners you know by the way danil's nickname is T-Rex like you can't reach in her pocket I bu everything so she is does not like to spend money I'm telling you guys when she told me that I didn't even question her because I know she'll she'll get 10 quotes well well what's crazy though is it's like okay so you know a water heater is $1,500 right so it's like yeah

I want my water heater to last however if the maintenance guy coming over to check the water heater it takes them a couple hours that's $150 so how much of that eats away into like replacing the water heater yeah that's a fair point I mean you know so that's just you know that was kind of my question I propose because I don't you know I'm no maintenance person so I don't fully understand we all know not $1,500 that's why but I know that you know it's expensive yeah but it's not, 1500 that's a ripoff that's

a high quote go get a second quote well I got ripped off theno that's a lot although have you bought a water heater in the last few years because those have probably went up in price correct okay all right so anyways it's just interesting you know but but you know the average home buyer needs to make $5 Grand even to buy a home right now which most people don't make 115 Grand which is why most people need that dual income to even qualify to buy a home well that's why we kind of moved to that

fourth piece which is homes are becoming more unaffordable period right M like in those three ways right it does not appear that home prices are going down it does not appear that the cost to own homes are going down and who knows about interest rates like whatever I say is a complete guess um I do believe that you're going to start to see especially with Trump in office because he did this in the uh four years AG he was there beating on the FED to try to get the cost of of capital down right that

he's a real State guys so I would expect that but might not happen um but either way it should cash flow at today's rates and if it doesn't then pass so Eric said you're talking to a plumbing contractor here water heaters are, 1600 she got a deal and I'm the cheap guy okay all right Eric I stand corrected she's right she called me out I have and then Nemo just said electric water heater replacement I just did it it was 1,800 so things are getting very expensive to replace you know so well just you know

it's an interesting point right because um you're like this is how much stuff's going up that you know you don't even realize that if you haven't you know done it in a while yeah it's fair point I haven't I haven't done that in a long time so I stand corrected yeah so uh before we go anywhere Let's uh jump into our Ask Ken questions this is our premium if you want to sign up go to Ken macro.com jooin dnow we always take your questions um Abigail is asking why do most renters and landlords seem to

prefer vinyl to carpet even in the bedrooms good question we can hose it down no like uh it's a really excellent question so here's the thing Abigail vinl typically is a little bit more now when we say vinyl um it really needs to look more like wood so the it does cost quite a bit more but um the question is how long are you going to own it so my experience has been if you allow dogs you allow kids let's say because you can't discriminate against kids at least um you know there's going to be

things like there's going to be paint and red wine and and and uh you know cats and dogs and spraying and and damage and and those kind so so our experience has been that we very rarely have a carpet make it past the second renter I mean it can happen for sure but you got to think about um what a carpet's going to look like in 3 or 4 years and whether you have to replace it so you have to kind of calculate that in so when you can buy this really nice wood vinyl um

you can um the tenant now has a lot more options they can get a a throw rug or whatever they still put rugs down but from a maintenance standpoint and a long-term standpoint you kind of make that investment in the beginning but then if you're holding it 3 four five 6 seven eight years you're probably not going to replace out um for for a long long time and so so in a 10-year period maybe you get three carpets if you're lucky um and you might only have to do vinyl once so that it's really a

long-term solution yeah absolutely and those listening on YouTube feel free to ask some questions because I'm going to try to pull a couple of them Nemo on YouTube it wasn't really a question but he said something I think we should touch on he said I'm struggling with tenants that don't know how to live in a house never change filters clogging toilets and dishwashers washing machines Etc danil denil this has been her frustration it is my frustration it's actually one of my New Year's resolutions uh is to get better about this but I think that you

need to set expectations right when somebody moves into your rental you need to um explain to them what's their responsibility and what's your responsibility in the lease in the lease right and so things that are their responsibility are things they break like if they clog a toilet like they clogged it that's not your responsibility um but when it comes to like filters and everything you actually have to show them how to change a filter you need to go over it with them most people haven't done that before but what you can do but what you

can do is when you send a handyman in for a different issue you can have him check the filters and if the filters are dirty you can charge them to have them replace them that's what we do yeah yeah so first of all these rentals are not locking leaves okay so there are times where you should be able to go in or or there are things and take advantage of that opportunity to go in and do maybe more than just one thing so if you have a relationship with your maintenance person um danil's right you

want them to bring the the filters with them as an example maybe also look at other things that could be issues in there the uh I think the question kind of revolved around what I would call uh an abuse of the landlord um you you kind of went through this in the beginning where you were getting calls all the time so we have ten have tenants that that call every once in a while um as needed and they're civil then you have others that call all the time right and so you I think you've done

a good job of handling that with with right yeah you know I think that you need to have obviously boundaries as a landlord too and you need to make sure they're emailing you and not calling you they should never be calling you the only time they should be calling you is if they have a true emergency other than that it should just be through email and you just need to be clear on what you're going to cover and what you're not going to cover and it should just be black and white really clear really easy

and you need to explain this to them and have it in writing you know when they move in so that way you know you're setting your your standards and that there are landl tenant laws in every state um and these are super clear too so we used to call them fire flood or blood right those are emergencies fire flood or blood as an example everything else there's a kind of prescribed time frame that's with within your rights right um in Arizona if air conditioning goes out and it's a 105 out then obviously becomes more of

a an issue you need to make sure you have your team like denil has like she can call somebody in an afternoon and that person will be over immediately right for those kinds of things everything else is not an emergency well tenants think everything is an emergency corre so and if you and if and I made the mistake when I was a new landlord of feeding into that energy like this has to be fixed right now I can't you know can't go without the AC for a night D but like you can't feed into that

you have to be non-emotional and it's just you have 10 days as a landlord it's really hard for her by the way it is hard for me and you have 10 days as a landlord of course you're probably not going to take 10 days but you might take a couple days I mean you know because you know what'll happen is you rush in to get these contractors in to get it fixed and then they overcharge you they lie to you you know I had a AC go out and like my AC guy is like I

can't come for two days well my tenants freak out I get someone the next day because I'm like you know what I don't want to deal with this and don't forget your tenant actually a lot of them want to be there too so that just complicates it you're trying to trying to figure out like when a tenant's home and when the contractor can come yeah exactly so they come the next day which the tenants already mad because they thought that the contractor should have came that night okay so the comes the next Daye tells me

that I need to replace my whole AC unit and I'm like okay well you know maybe I do it's kind of older so you're like call him and let him explain why so he explains why you're like that makes no sense get your normal guy out well I'm like okay so the normal guy could come out the next day so now I have the one guy out he's telling me I need to replace the AC unit I have the tenant mad because which is by the way it's like six or seven Grand or something yeah

and I have the tenant there and she's like well it needs replaced cuz that you know you got to get it fixed whatever so then the the next day I have my normal guy come out he fixed it in five minutes so and then I called the other company back and they didn't even Bill me because they knew they were full of it and were trying to screw me over so the point is is as a landlord you're going to pay so much more money to feed into these quote unquote emergencies that aren't real emergencies

and you're going to spend way more money you're going to get screwed over you have to use your core team people you just might have to wait a day or two I mean the tenant just might have to wait because then guess what the AC went out at our house last summer and we didn't have air for 5 days and it was miserable but like that's our house like you know like because our guy wasn't available so like you have to and then they had to order you know the parts and everything so you know

you can't feed into tenant energy I should do a whole thing on that tenant energy by the way obviously we are customer focus we want to be customer driven but like anything there has to be boundaries it all has to be in writing um has to be legal and um but like like a lot of things PE there are there are people that make small things into big things and um you just have to have a system for that yeah you just can't feed into that you just have to have your standard processes and procedures

and whatever those are that's just what you have to follow yeah um so Bob is talking about the new real estate laws so he is saying that he you know was trying to get some information on a house and he couldn't even without signing the the selling the listing agent wanted him to sign an agreement to tell him any information about the house this yeah this is more in your world well he wanted to know your opinion because I kind of gave him but he's like I want to know what K sure yep well first

of all I I be careful what you're signing right I think right now the there's there's a lot of things that are happening um where people are signing things and they wish they wouldn't have right I don't have a problem at all if somebody if you're if you're literally signing something uh for a showing on one house and it ends the minute you walk out so you walk in you walk out if you buy something right there and you walk and you're unrepresented let's say um I have no problem with that but um other than

that I I don't I think that this is the a lot of what we're hearing is it's been a little bit of an abuse of the of the customers that are actually looking at these homes yeah and and the and they're actually trying to get them to sign and and get clients this way right so they're listing these homes and then that when the people come in um they're um getting them signed up as well so uh I I it all boils down to um what exactly you're signing um I I still like the old

system personally I think it's going to go back there's going to be some kind of a hybrid that's my guess because it's it's a bit of a mess um I I the system has years and years and years and years of working through the Kinks and then they changed it um and so um getting a traditional buyer representative I think is a good thing for um because it it U and then having a little bit of tension between a listing agent and a buyer's agent is good so whenever you have two opposing views in other

words if the L when you walk into a listing agent um they're representing the seller of the home you got to understand that right and so if you're signing that up even though um they're supposed to be representing both they're in a pickle because one they're trying to sell a home for a client and they have a listing and two they're trying to find a buyer and so I personally believe it's always good to have two I I I I really believe that because what you're going to have is you're going to have kind of

this pushpull which is typically good you're not getting taken advantage of you're being represented um and so um just be careful um I I I I just think you should get yourself somebody to represent you and be careful if you if you walk in on your own be careful what you sign in certain States I was talking to somebody else about this recently certain states require an attorney so it requires an uh the if if you're unrepresented that you have an attorney and so I think something like that I mean attorney is be more expensive

than a realtor but I think you know you got to have somebody you can't you cannot represent yourself and just wing it h yeah unless you're an attorney but just again it goes back to what you're signing be careful of what you're signing that's all make sure you read it lot most people what they do is they they take a boilerplate contract they walk in they sign something they look around and then they realize that they got locked into something so that is actually starting to flush itself out now there there's a lot of issues

around that a practice I should say right um and so um I I upet enough about that yeah um so camir sorry if I'm butchering your name says I'm a fan of yours I have a question for you how do you deal with debt to income as this is an important factor in Europe I can't get more than 50% which makes it difficult to make it infinite debt to income I guess I'm not completely maybe with lending like they maybe need well I guess I guess debt to income is the same here actually it's probably

for Lending so like your debt to income can only be 50% sure I think it's about the same in the states isn't it yeah I think um so couple things one um I I what you want is you want um A lender that's going to lend against the cash flow of whatever you're buying so whether it's a business or whether it's a commercial office building or whether it's a residential building and you're going to rent it let's say so that's um you know a a debt service coverage ratio um kind of a loan and so

what you're going to want is you're going to want that loan to be based on the income from whatever it is you're buying if there is any if there isn't any of course it's going to be more of a problem then you got to sell them on um so let me give you an example if you're going to build a high-rise uh condominium project in Miami um let's say because this is how this is how they do it they go out and they get a bunch of sales contracts and they pre-sell all these condos and

then they bring that into the lender and the lender's lending against the potential of those closing and people buying condos so that's how you kind of pre-fund development pre fund construction um so so when you're you know what you're describing is that they're actually looking at you as the individual um and um and so you got to look at uh maybe other types of lenders that actually look at the asset itself so um that would be a scenario where actually buying a a home yourself right what do you make and what's your payment um I

get that but beyond that there's another layer when you're buying investment businesses or Investment Properties or things like that where the collateral or the whatever is you're buying is actually going to pay off that debt yeah and and your income like for each rental property that I have the income is going to offset the debt right because I'm getting income so as long as you're claiming it on your taxes then each rental you have should be claimed as income which then helps your debt to income in order to qualify right so um the um Richard

made a good comment on YouTube he said the FED usually lowers rates due to financial stress in the equity debt Market people need to be careful what they wish for yep yeah that's a good point he's right um and then let's go back so uh Dustin is asking can you explain a little bit about dscr loans and how they impact a rental Port service coverage yeah so so the way I so think of uh a debt service coverage of 1.25 so what does that mean what that means is that there's 25% more income coming in

above the mortgage payment so that's what's a debt service coverage ratio so one: one means there's just enough income to cover debt 1.25 means that there's a 0.25% or 25% buffer um that actually um you've got and so the lender um there again going back to what the pro the property income or whatever the whatever monies are coming in from whatever it is you're buying they look at the debt service coverage and um you're going to uh we already saw those what's happening right now is as rates go up so you just take your net

operating income noi which is income minus expenses divided by your total mortgage payments that's it and that's your debt service coverage so that's income divided by mortgage payments and um the an average debt cover debt service coverage ratio is about 1.25 awesome well so 2025 is going to be an interesting year uh hopefully you guys uh follow us uh we also have a podcast that you should check out it's called the Ken mroy show and we kind of go into more detail uh there on you know our personal lives and different ways that what MC

companies is doing and so it's a great show you should check it out yep sorry it's late guys I had a three-hour drive before this and and there was actually a forest fire oh yeah shut down the highway soize we'll see you guys next week see you guys