I Survived Real Estate 2020 Residential Panel Pt 4

 

The Norris Group proudly presents it’s 13th annual, award-winning black-tie event, “I Survived Real Estate”. Industry experts join Bruce and Aaron Norris to discuss perplexing industry trends, head-scratching legislation, and opportunities emerging for real estate professionals headed into 2021. All proceeds from the event benefit Make-A-Wish and St. Jude Children’s Research Hospital.

Platinum Partners:

 

  • Norada Real Estate Investments
  • San Diego Creative Investors Association
  • The Outspoken Investor, Tony Alvarez
  • Think Realty Magazine
  • Wilson Investment Properties
  • Realty 411

Gold Sponsors:

 

  • 7 Figure Flipping
  • Inland Valley Association of Realtors
  • Keller Williams Corona Keystone CPA, Inc.
  • Las Brisas Escrow
  • Leivas Tax Wealth Management
  • NorCal REIA NSDREI
  • Pasadena FIBI
  • Real Wealth Network
  • In A Day Development
  • Spinnaker Loans
  • uDirect IRA

See below for full video and resources.

Episode Notes:

 

Narrator  Welcome to The Norris Group’s 13th annual I Survived Real Estate Gala. The Norris Group would like to thank the following Platinum Partners: Norada Real Estate Investments, San Diego Creative Investors Association, The Outspoken Investor, Tony Alvarez, Wilson Investment Properties, Think Realty Magazine, and Realty 411. We’d also like to thank our Gold Sponsors:  Seven Figure Flipping, Inland Valleys Association of Realtors, Keller Williams Corona, Keystone CPA, Inc. Las Brisas Escrow, Leivas Tax Wealth Management, In a Day Development, NorCal REIA, NSDREI, Pasadena FIBI, Real Wealth Network, SoCal Cash Flow, Spinnaker Loans, and uDirect IRA.

Aaron Norris  David, you are up next. And then we’ll get into questions. So, people, please start putting in your questions. We’ll make sure to get to those. We want to get that Northern California perspective. It’s really interesting hearing every area walking through and some challenges and some opportunities. Christina, while David’s getting ready, your thoughts on, are you seeing and Pasadena because you’re on the outskirts? Did you sense that a lot of people are exiting the downtown core? Maybe Culver City they’re trying to get out of the urban environment and moving more towards you?

Christina Suter  Um, I’m not seeing it directly and people buying units here. I’m seeing people are moving. But yes, the answer is yes, I do see that trend, but I’m not sure their destination is Pasadena. I think their destination is a little further out. If were going, if we’re going to bother to move because we’re too dense. We’re going to go further out where we can actually get acreage or get a much larger yard or be up against something that’s pretty. It’s not, i’m not saying it push on Pasadena specifically.

 

Aaron Norris  Yeah. All right, David, NorCal REIA, are our sole Northern California representative this evening. Welcome. And thank you for your long term support. And extra shout out to David, I believe every year, you have had a table, and have come down to Southern California to be at the Nixon Library. And I just always appreciate that extra effort. And I’m just really glad you’re here tonight.

David Granzella  Thank you so much, Aaron, really appreciate it. Let me get set up here. I gonna go back. Technical difficulties. uh-oh.

Aaron Norris  Are you frozen?

David Granzella  Yeah.

Aaron Norris  You know what?

David Granzella  Okay, I think I. I see. I think we’re coming.

Aaron Norris  You’re coming?

David Granzella  There we go.

Aaron Norris  Able to share your screen?

David Granzella  Voila, make it?

Aaron Norris  Yep, you’re good.

David Granzella  Great. Thank you very much. Hi, everybody. I’m, David David Granzella, founder of NoCal REIA investment club. And as Aaron was saying, I’ve had the privilege of being part of Bruce and Aaron and The Norris Group for the last 13, it’s been 13 years, we’ve made it through rain, through snow through the great highway being close and everything else. And I truly appreciate what you guys do. I’ve been with Make-a-wish since 2002. So, definitely holds a place in my heart. So, thank you very much. We couldn’t have been able to do all the things we do without you guys. And all the relationships we build in this business from Southern California, all and throughout California. And there’s a camaraderie there’s a synergy that you guys are part of the core. So, thank you. Let me, by the way, great presentations, everybody, actually, well, you guys are talking, rearrange my presentations and not duplicate some of these things. So, thank you very much. I want to give you perspective and not duplicate the information sort of uncovered. So, as I said, we’re celebrating our 16th year, it’s a different format. I also want to thank all the men and women who have served our country to provide us the freedom we have today to invest as we do, at the club, our investment, our our mission is to educate every level investor to make calculated decisions and to create investment opportunities, whether it be wholesale, retail flips, or just being first class landlords, and especially in this market. NorCal REIA is your platform to network with other real estate professionals. And it’s been that way for the past 16 years. I’m gonna run through some stats and if you haven’t been on his blog, his Sacramento Appraisal blog, good friend of mine, Ryan Lundquist, tons of information puts out a weekly blog and very detail especially in Northern California Sacramento. As we heard both things are on fire in California, like you’ve touch that one, houses are selling crazy in California. 20 days of housing supply in our region, 20 days, 41% or getting multiple offers is September, unbelievable. Monthly inventory is lower than it’s been in 15 years. 53% fewer listings in the region right now, 3.3% of those homes and made above the million dollar mark in 2020. And I’ll touch on that in a moment. Nine fewer days to sell this September as opposed to 2019. I’ve listened to everybody, most you guys are in Southern California, million dollar mark is kind of an entry level down there. But in Sacramento, that’s a lot of money. So, I’m going to go back to just 10 years ago. So, in 2010, there are $4 million sales, there’s 83 of them. In 2020, there is $648 million properties. I know, as Aaron said, he’s got a lot of cows, a lot of capacitors out there. We actually do have some nice houses and we do have nice quality of life up here. But for us to hit the million, million dollar mark truthfully, that’s higher, that’s a higher, high end. But at the same time just shows you where people are moving from the Bay Area. They’re trying to get out of there and also the value of the property throughout California is flowing in Sacramento. I’m going to go with the Sacramento region. Monthly data’s September 29. We had a month, September 2019. Our monthly supply was two point, almost for 2.2 months, we’re less than less than a month but three quarters of a month, which is down 65% as we were talking about everyplace else throughout all of our other speakers, everything in the inventory. There is nothing if you have something on market, you’re thinking about selling now’s a good time, especially. I’ve been thinking now this this this atmosphere we’re talking about I’ve talked to other investors this atmosphere looks like it did before in the mid 2000s. Is, as I heard the word frothy, and it makes you wonder what’s going on. And we’ll, we’ll touch on that in a minute. Sacramento County we’re going to talk about the median price in Sacramento region median prices 420 in 20, September of 2019 in September of 2020, it’s almost $480,000, which is a 14% increase. Not bad for California. We’re also going to touch on the median prices as you see where it’s gone and the 2018 it’s gone 385 I believe all the way up to 475. Real Estate forecast. Well my crystal ball is absolutely inoperable. Can this go on forever? Absolutely not. I was people ask is real estate so still cyclical? I’m pretty sure it is. And we’ll touch on that with Bruce. Is California still have ups and downs? Yes, their roller coaster ride Santa Cruz boardwalk. Yeah, there still is. My point, my point there is California goes up and down. It just has has, if everything is going to go on forever, Pete thinks this is the new normal. I’m not a gambling man. But I wouldn’t count on it. As I was preparing for this presentation, I started thinking, whether it be walking, running, riding my bike, racing cars, you never look straight down, you’re always looking for as far ahead as possible. And that’s one of the things I’ve learned in this business from a lot of mentors. And where we’re gonna go, and I’ve heard it before is when everybody’s heading north, see who goes south and see if they left. There’s going to be transactions going on. In fact, one of the things I was looking at my PropertyRadar account to kind of figure out, okay, where are the opportunities, and I think with all the chaos being a landlord, I think there’s gonna be a lot of chaos in the apartment industry. Without a doubt, not everybody runs a tight ship takes care of their tenants, and has the ability to have had most of their tenants pay. That being said people can’t go on having multiple units and not having people pay for year. It’s just not feasible to run a business like that. So, some of the opportunities I see in the real estate is commercial. My question in a lot of my friends in the business, are you going to go back to you’re working at your office? Not quite sure. I always have to laugh at our busines,s is there a possibility of death divorce or don’t get a job? How many people we’ve heard today, there’s lack of jobs in all aspects. There are a lot of people we know in the restaurant industry, service industry, the place where we have the events. We’ve been at past 16 years. The general managers down to 20 hours a week working and all the staff from the sales and catering, the bar, the restaurant, everybody’s gone. And that’s also other jobs at a different scale. People sell their properties or solve problems. And it’s not always about money. And that was what I learned coming into this business. And I still believe is true to this day. So, what I suggest that people out there learn to be become the best problem solver you can be, because that’s what’s gonna happen. And money’s involved, there’s not always, always a motive. Being prepared in real estate for 2020, 2021 actually going forward, landlording one of the things I’ve heard from many people is trading up your less desirable properties, opportunities with tired landlords, plenty of those unpaid rent for up to 12 months. California, no evictions. Think of all the deferred maintenance if you’re not bringing an income. Some of my friends laugh I regularly do maintenance on my, on my properties. Matter of fact, I did paint one of my, one of my buildings, half of it this year. But I would have done that no matter what. This goes along the way of just not deferring maintenance. As California as I understand it, throughout California, you can always, in Sacramento, you can only raise your rent 6%, it was 8.75. Now it’s down to 6%. And that’s going to take a while to catch up. If you don’t have your rate your rents already up there. There may be no rent increase and move outs, we’ll have to see what happens in, next Tuesday. One of the things I heard earlier, some of the speakers as it makes sense for some people to carry the paper, passive income, some of these people have had these properties. And all these things that I mentioned here just wears people out and landlords and I’ve been blessed to have some great mentors, and I’ve learned how to take care of my tenants.  Problem is a lot of landlords hadn’t, and they deferred maintenance. And I think this is going to be a great place for people that are looking to exit that are tired of all the toilets, tenants and trashes, Aaron, always puts it and having to deal with this. And it’d be a great place for them to say, hey, let’s just say you collected half your rents last year, how about if we paid this for, here’s what we can afford, or actually, here’s what the building can afford to pay. So, I think going forward, that’s going to be a great place to be. If you need any of the slides and go to our club, NorCalREIA.com, under free resources, all these slides are there. And one of the things I found in my business, I may not make a dent in the homeless problem, but it will make a difference in someone’s life. Because I have i a lot of us here have the privileges. When we come home, our garage door goes up. I deal with one and two bedroom apartments. So, from my perspective, when they get home, they opened their door, that’s their home. And I think that’s what makes the difference in our lives is being able to provide an opportunity for people that have a different perspective. So, at that, that’s my presentation. We have any questions we can go from there.

 

Aaron Norris  Fantastic. I do have some questions. And this will also involve Derek and Lenska. First, I’m going to start with you David, San Francisco. Have you noticed a huge uptick in people coming your way and moving long term?

David Granzella  Absolutely. Matter of fact, there’s been a lot of people. We were talking about the million dollar houses. And we’ve heard for decades that everybody from barriers come up here with money. Well, that it stopped for a number of years now people realize they don’t have to have an office and they are moving up here and they’re moving up to Sacramento Granite Bay, Roseville Rocklin area, they’re also moving up to Truckee. If you thought you had a piece of property, maybe like San Diego, but in Truckee boy, if you come up with a number that is only a little bit crazy. People buy it in two days. Unbelievable. Man, if I quiet Truckee, as I understand it is not as quiet and peaceful. I wanted a second home up there. And I’m not quite sure I do anymore.

Aaron Norris  Sean, Sean made a funny comment on a show that we were he predicted very early on that the second home markets would do very well. And he’s like, yeah, people actually want to live there. It’s just like, oh, he says that people are door knocking offering $3 million in cash for some of the homes in Truckee, which I find interesting. Now, San Diego I hear a rumor also because some of the tech companies have said that they’re no longer bound to stay in San Francisco that working remote is going to be a forever thing and that they are looking in specific markets like San Diego and Palm Springs because it is close to airports great quality of life at a lower price. Are you seeing that as well?

Lenska Bracknell  I would recommend let them all move to Palm Springs before May, okay, and then it might sell again and move to San Diego. I really think San Diego is a little bit of a Zoom town because and somebody made the reference to it is safer and it is this and that and obviously quality of life. I mean, you know who doesn’t want to surf and and have all the amenities San Diego have but, otherwise we have you know people coming down from San Francisco for food for sure. And we do we have some form LA, coming down to San Diego as well. So, but in terms of any, anything goes any properties,  I mean, and Derek had it, it is actually if it’s not sold over the weekend, then something is wrong with your property under the power lines.

Aaron Norris  Dad, let’s get you back involved. Maybe you’ve been writing some questions during all this. And please, panelists, this is the, I mean, the attendees, this is the first time we’ve ever been able to take questions. So, make sure you leave it in the Q&A box for me. The chat I’ve just been posting embarrassing things, so.

Bruce Norris  Did you want me to ask my question?

Aaron Norris  Yes, please.

Bruce Norris  What’s everybody’s opinion as to why this did not occur in 2019. When we had 4%, unemployment, 32%, affordability, no foreclosures to compete against, we basically had a flat price market with the best set of charts I’ve ever seen. And now we have uncertainty. And, I agree with the take that the unemployment number could be very different than what’s being stated in a short period of time. I’m just, I’m surprised. First of all, I was surprised it didn’t happen in 2019. Because every other time with those statistics, and the lack of competitive QA, lack of foreclosure inventory, we were off to the races at 15%. We even said that. But since that didn’t occur, something else was going on. So what about the pandemic kicked in a boom?

Aaron Norris  Christina, I will go with you first and you’re on mute.

Christina Suter  I intentionally raised my hand so that others could, you know, jump in as well. Other than that, I’ll go first. Um, I think I I’m going to say there are two factors. And I’m going to go in reverse First, I would say in my opinion, the pandemic created this compression of, I don’t like my house, I may or may not like my husband and my wife or my children being right on top of me. Right? And I’m just I’m just being you know, like, because to me, it was it was surprising. I’m like, why are people moving like Lilly, I was floored because we’re not moving. We’re avoiding everybody we can, there’s no way I would imagine walking into a home to buy it. But I noticed it over and over and over again, this compression is itchiness is uncomfortable. So the demand was created by the pandemic. And the supply was constrained by people going, I don’t want people walking through my home while I’m living there. So I’m not going to put it on the market until I’m ready for it to be empty. And I’m seeing I was just doing a condo research project for somebody on the west side, every condo, almost every quarter I looked at was empty, and had been staged, and you could tell had been staged and had been painted. And to me that was unusual in that it wasn’t like there was three quarters of the condos were somehow existing people or you know, existing existing inventory that had some deferred maintenance to it or different levels of completion. It was like 50% of them were finished, and empty, and staged. And I think that’s an effect of COVID. So, that’s one. Two, I think that we did the blending standards. I don’t know for sure. I’m guessing but Bruce, you probably actually know better than I do. I would say the lending standards was keeping a more of a cap on the market than it has in the past during those compressed numbers, but also Bruce, I think you know better than I do, I’m just giving you my opinion.

Bruce Norris  Okay. I love, I’d love anybody else’s opinion. I mean, I’m asking because I’m not sure. I have a really good answer for it. Um, I was baffled.

Lenska Bracknell  Do you want a one word or two? I think it’s two words or two-minute answer, Bruce.

Bruce Norris  You’re not, come on. We know you can’t do a two-word answer. Come on.

Lenska Bracknell  Yes, I can.

Bruce Norris  Okay.

Lenska Bracknell  Toilet paper?

Bruce Norris  Toilet paper?

Lenska Bracknell  Right? That is the answer. It is a nap. I mean, this is a human need, food and shelter. If you compare it to other hurricane, in markets right where the prices shoot up because everybody needs a house over, the roof, and a roof over their head. So, that is very clear to me. And you should be proud of those millennials that when we thought, they’re just on for experiences around that they’ve finally actually discovered the value and the need for home ownership. So, right now these demographics going the millennials, they’re becoming robinwood day traders, they, they follow exactly in our baby boomer footsteps to this program. And the baby boomers are moving, they’re sitting on 3%. Actually, if they do have a college, I have a lot of friends that they’re college kids or moved back home. You look at those statistics. So, I’m a little bit worried about the future and if we not have the demand all drawn forward.

Bruce Norris  Right.

Lenska Bracknell  In the in the in the future.

Bruce Norris  Okay.

Aaron Norris  I did have a really great question, Paul, this one would be a little bit aimed at you. Proposition 19. If it passes, will it be grandfathered in for existing inherited properties? Will will those be grandfathered in? Or will those immediately be reassessed?

Paul Herrera  No, it doesn’t affect anything that was that transferred prior to January 1, 2021. By the way, I liberated the silk shirt from the closet, I decided to, you know.

Christina Suter  If I may ride on that train Paul for a minute, somebody did notice and text me so my daughter, I told her I was going to a black tie event. And so, she insisted on beading up my eyes here, just so you know. That’s my daughter’s contribution to the I Survived Real Estate black tie event. Wanted to get officially dressed for this. So, there you go. So, thank you, Paul, for getting the shirt out.

Paul Herrera  Yeah, once silk here. I’m told that this is from 20 years ago, but I still like it. Oh, yeah. 19 is not retroactive. So, anything that’s changed hands before January 1, stations are the same, the same rules.

Aaron Norris  David, I know you have multifamily. Have you had any feedback from tenants in close quarters multifamily as in not apartment buildings but multifamily? I think you have four. Any vacancies? Any concerns? Have you heard?

David Granzella  Um, I haven’t heard, my tendencies has been 100% occupied hundred percent paid. I’ve been really fortunate to keep my finger on the pulse and have a relationship with most of my tenants personally, and some of some of my, some of my buildings. You know, it’s a relationship, but people know that, they’re not sending a check to just some Corporation, they know that. Whether it be my landscaper, my landscapers there, hey, I’m still every three months when the blower guy just to be down there to make noise to show up, I still, I’m still a working entity and another person. So, I think that relationship has carried over into mutual respect. And that being said, but I also know that there’s quite a few people matter of fact, I have some, one of my favorite properties. I know that neighbor next door, so I just happen to be sending letters to in a regular basis over the years, I will be going down and bringing the neighbor’s coffee just make see if they’ve been paying the rent or not. And, you laugh, earlier before I was texting one of the tenants that I was at work, I evicted. And he moved next door, but I’m still friends with them. And I will be finding out I was like, you know, hey, you know a lot of people don’t have to pay rent, would you be that person? And if so, I find out who’s paying rent who’s not. And if that building is not creating an income at this point, those people I’ve seen for the past decade in that particular building between deferred maintenance for a decade, and not getting paid. And I think the ways it’s managed is going to be a deal breaker for those landlords. But also they’re, the Tennessee’s the tenants in there aren’t getting the quality that they want. And but it’s one of those things when you haven’t had the rat race or not. It’s not that high, people are going to keep quiet. So, don’t get the rat race. The problem is, if you have a leak on the faucet, you have water damage and things like that they don’t want to call in and it affects the property in the long term. So, I think there’s a lot of opportunities going forward, for landlords, as I mentioned before, I was pointing out what opportunities do we see coming up? I think apartments is going to be one of them, as Paul was talking about earlier. And then what’s going to be happening with is they’re going after the small guys in these arena for taxation.

Aaron Norris  Paul, I’m thinking about when the eviction moratorium in California gets listed, lifted. And all of us landlords at that moment in time were looking around the room like are you taking that tenant? How does this work out when the eviction moratoriums get listed and all of us mom and pop landlords were like, why are you moving? Where are you coming from?

Paul Herrera  Yeah, I don’t know what the answer to that is. I don’t think anybody does public policy right now is just scrambling to try to figure out next week. So, we haven’t, you know, I mean, we’ve tried to think that far ahead, and we’ve tried to project to policymakers, you know, where the dominoes fall, because you can see it coming. It’s not that much of a mystery, if you follow the steps and where the decision points come for both landlords and tenants, but they’re just trying to get through the next session, the next election the next month. And, you know, we’ll figure out next year when next year comes, you know, I do have a question for you guys that are in the space. How do you value a piece of rental property that a tenant isn’t paying on and isn’t going anywhere for six months, a year or longer? How is that going to work?

Lenska Bracknell  I have done my other photography job. I got a call from a commercial real estate broker. And I said to them, You know, I was curious why you didn’t call me earlier, I thought commercial real estate is all going down, including they do apartments. It’s Cushman and Wakefield, right? And I said, so, how come you didn’t call me? So I thought commercial real estate will be on sale and you need, you know, drone footage? And she said, yeah, we, we can’t sell them right now. And I said, What do you mean, you can’t sell them? Yeah, because none of the tenants are paying. So, the owners are holding on to it hoping that they can ride out this year and show better cash flow?

David Granzella  To answer your question, Paul, basically, we’re gonna base our offers on going for as we always do, is how much income does it generate. And if it brought on in, that’s those are the numbers. I also have a friend of mine that is he has a large portfolio of commercial, and somebody in a commercial building, non-residential, commercial, commercial, made him an offer. And it was a lowball offer. And he said during our conversation, you know what, that’s exactly the number I would have came up with on my offer. And he’s going to go back and counteroffer. But out of all the offers, including some marijuana dispensaries, and things like that, that are going to have a long term weight, and they offer to him, he says, I’m thinking there’s going to be done. So, I’m realizing that just like we’ve talked about in this business, if, if it’s fair, it’s fair. And if you’re going to try to get out, I don’t see it get any better. And by the time you evict somebody next year, by time, you’re not going to collect the money, you’re gonna get 25% about that. And in the short term, and long term, you got till 2022, there’s really not a solution there. And also, you haven’t, if you’re not collecting rents, you’re not going to be able to do maintenance, or any of that stuff. So, I think it just wears people out. And a lot of people haven’t didn’t keep up on the rental along the way, as rents are rising, especially in Sacramento, people were kind of, I’m going to get to that next week and two years go by, and then now and then in the last year was rent control, they haven’t been able to raise them as much, and to bring them up to actually both parties. And so, now you only bring up 6%. So, it’s gonna take a while. So, between not having any rent for a prolonged period of time, and only being able to bring the rents up at 6% for now, and also the possibility of not being able to turn around. And when you have a turn, raise rent, there’s gonna be a lot of things in play. And that’s where you come in. And to find out, hey, hopefully, we get rid of those certain laws that don’t protect anybody. Because if you’re not bringing in as a landlord, you’re not bringing any money, and you’re not going to be able to continuously put money into the property like a regular quarterly basis, I have a budget and I do something on the property. I painted half the apartment building and three months ago and ultimate paint the other half soon, if I might if I didn’t have any money coming in. I couldn’t couldn’t do that.

Aaron Norris  Coming from the note side. Are you nervous about that? I mean, you’re in second position, you’re probably getting people who, I mean, Sean made an interesting observation. He bought his commercial building from somebody a few election cycles ago, who was so freaked out, he got a 40% discount on his commercial building. I was like, I’ve never heard of driving for political signs. So, depending on who becomes president, you’re going to the opposite, saying, hey, you want to sell? But is there a sense that the political outcome is going to change your business? How you, How are you evaluating notes, you said it had come back, but it it’s not bothering you at all?

Kathleen Kramer  Well, I think you have to qualify where you’re buying notes, and what kind of notes and at what price? So, you know, if you look at some hard money loans, and you say, Well, are you worried about your collateral and on these loans, and you say, Well, how did I underwrite that loan to begin with? Well, I had a 65% loan to value on a property that if I took it back, I could rent it out and I could cover my my basically my payment and And I know that I have so much equity that I could turn around and sell that thing. So it’s all a matter of if you bought the note. Right. And it’s funny because I saw the question in the QA about the homestead exemption in California, right? Well, the first thing is that I would say to that is we don’t buy in California. So, and we haven’t. The reason is, is that when contract rights when property rights and contract law, no matter no longer matter, then I’m out. Because if I don’t have a rule of law, and I don’t have a contract that I could count on, then how can I possibly make that choice to invest? So? So, that’s number one. So, I’m not nervous about California, because I’m not in California. Now that that doesn’t really answer the guy’s question, though, right. So, to be fair, I would say that, yes, if I was sitting in second position behind a first and my second was non-performing, and with the new exemption, dollar amount I could get stripped, then yeah, I would be nervous. So, I would say you’d have to take that into account in your calculation when you’re looking to buy a note. So, that’s going to make the price of notes in California, at least the non performing notes for people that actually are paying attention. You know, there’s a lot of dumb buyers out there, but the smart buyers are not going to pay as much for those non-performing. So, I think that the key here to remember is, is that if you bought it right, you can weather a lot of storms. And so, an is we only buy non performing seconds at a certain combined loan to value on only the paid principal balance. So, all the mortgage, all the arrears of interest that’s not on the cake. If you just look at unpaid principal balance, we always have a an equity spread that we have, that’s an equity protection whenever we buy, and that informs our buying decision and the price that we’re willing to pay for something. Now the market kind of froze up a little bit when COVID first came in, and, and the industry like the buyer not buying and seller stop selling for about a month or maybe 45 days, just to reevaluate. But what my point was, is that the market is back and it’s it’s functioning. There’s buyer’s or seller’s people agreeing on prices. In a single family market, there’s price discovery on the valuations. So, you know, for the most part, that part of the market is functioning. Is there some trepidation still? Sure, of course, we have those, you know, we have 6 million loans in forbearance on first trust deeds. So, a little bit of trepidation out there still.

Aaron Norris  Pops? You, you actually had somebody said, expressed a similar sentiment when it came to contract law, which is definitely an issue. I would hate to be a servicer in California when they tied the pandemic and allowed the state allowed the pandemic to be controlled at the local level. So, the local, the local municipalities could dictate, it was still a state of emergency. So, things like evictions and whatnot could happen. How can you be a loan servicer at the national level and get down to the county level of city level of every state? I mean, that’s insane. So, you had, I forget who you’re talking to, was talking about that the when.

Bruce Norris  The interview that we did?

Aaron Norris  Yeah, I don’t know if it was an interview or a phone call. Were you? Yes, maybe it was what? Who was it? And what did they say?

Bruce Norris  I don’t remember the gentleman’s name but it had to do with, to where somebody could call you up two days after funding and basically say, you know, my, my business has been affected by the coronavirus, and so I can’t make you a payment. And that that would be the end of the discussion, there would be a one year moratorium on the payment, and the loan would be extended. And this was legislation that didn’t get passed. But it was it was suggested. You know, you asked, you answered a pretty pointed question early on, and I want to answer it better. You asked me why I left California. And I said because Sandy, Sandy was concerned about our safety. And in California, and so honoring her. I didn’t disagree with that. But the for, for business. It’s really important. And Kathleen just said that if I don’t know the rules of engagement, on how the rules are made, it makes me very uncomfortable. And so that was one of the main reasons that I thought, you know, business wise, I would like to I feel a lot comfortable, more comfortable and how Florida is, is run that way. And and you know, I’m a big fan of migration. And I think because of all of this, Florida is going to be getting migration of money from California, and New York and New Jersey, money and people. So I, that’s why I’m here because of those two very important things.

Aaron Norris  Yeah, when you when they have a Bruce Norris show up, you’re not needing a job, you just immediately become a consumer. So, that is a very different perspective than California. You end every I Survived Real Estate with a question. And I would like to give, asked that question and have each panelist answer that.

Bruce Norris  Well, we didn’t go over that. But I would like to ask I think, I think this is why I asked it before. Is there anything that you are, very concerned about? Or very excited about? Or anything that you would like to see? Change? Is that close enough,  Aaron?

Aaron Norris  Let’s start from the northern part of the state. And we’ll work our way down, David, you’re up.

David Granzella  Well, being in California and not going too far too fast, I do have concerns the way they’re reaching out. Instead of sticking within their the budget, they’re reaching out to create money, taxation, and seems every time, I don’t know, because I’m in a position where every time it seems they’re reaching into the back pocket of the small landlords, rather than trying to figure something out. And they’re, you know, like, most of us, I heard this, this evening, or a lot of us are trying to create ADUs, trying to create homes. Problem is we’ve all worked with the city, the counties, they’re just saying, we’d love that we’d love to do that for you. We just can’t, we’re not. And especially when they’re always looking for we were going to add another fee, I’m getting fees for, I have as a I get these letters, I have the privilege of doing an annual self inspection on my properties. And I get to send them a letter, I also get to send them a check, for that. So, I’m doing all the work and I’m sending them a check. And if they’re reaching our pocket, how how long can we continue to pay for some deficit they’re creating and still not create homes. So, I’m getting more, It was great to hear Paul and Ben might get more involved because I do have concerns and they don’t solve the problem. And I realized when I came up with that tagline this year, because I have seen a lot of people that are trying to stay in their homes or trying to get loans. And there’s a lot of as we see throughout, I heard earlier throughout California, there’s a lot of homeless and there’s a lot of people that just are working are the working homeless, and trying to avoid that. What can we do? So, that’s my curiosity.

Aaron Norris  Okay, Christina, you’re up.

Christina Suter  My concern really, because my background is first in rentals, and then in value ads. My concern is I don’t, you know, as a landlord, I don’t own any rental units in California anymore. I don’t want to continue to deal with the legislation and the rent control and the moratoriums on evictions. And, you know, the, I don’t want the, David said did it really well, if you’re not going to get paid well enough to be able to maintain your own unit, then it’s a problem to continue to maintain valuable units. I don’t, I don’t want that I don’t want to fight with my tenants. And I don’t want that kind of control. And rent control has been getting, you know, the state statewide rent control, not necessarily that unreasonable for us as landlords, but does mean that we have to be again, more diligent and more aggressive. And, you know, we can only evict under certain circumstances. And, you know, I’ve owned enough units, you know, in California where, you know, I, I had this lady with two large German Shepherds in a building that I allowed animals in and her German Shepherds ripped up the carpet and the health department got called she called health department. And I had to replace it because it was a health hazard. I was responsible for because I was the landlord. And it had nothing to do with that she’d created damage in the unit from her animals. It’s just, it’s not, it’s just an example. That’s just an example of the amount of rights that landlords have versus tenants have in California. And that’s my uncomfortable point. So, I don’t have any rental units in California.

Bruce Norris  Okay.

Aaron Norris  Kathleen. You’re on mute, by the way, sorry.

Kathleen Kramer  Sorry. I know, I said you’re gonna be sorry that you asked or you might be. So, I think you have to take into perspective that I come from an family of immigrants who escaped communism and came to this country with nothing, and built a life here. And so, I was raised with a certain perspective. And I am very concerned for the direction of our country. I think that if California is any kind of an example. And this could go both directions, if we have one party rule, things can get seriously out of hand. And so, the pendulum swings too far one direction or the other. I know that California is being held out as, as an example of one of those directions of pendulum swing. And I really fear for, for the rule of law, I feel fear for contract law, I fear for my own family’s safety. So there’s a lot to be concerned about. I think, right now, there’s a lot at stake right now. With that being said, I believe in our country, and I think that we are very strong, and I think that will overcome whatever difficulties that we may end up having to go through. But I’m not looking forward to that process. So, that’s it, I’m concerned. And so I’ll be considered continue to be vigilant and watch the numbers and do the best I can to help other people navigate and to help my family navigate. And that’s it. Thank you for having me.

Bruce Norris  Thank you,

Aaron Norris  Derek. Hopefully, you still have clothes on you went dark, I can’t tell.

Lenska Bracknell  He’s pouring another glass of wine.

Aaron Norris  When he’s on mute. Let’s go next.

Lenska Bracknell  Okay. Um, for me, I’m pretty positive about or to own a piece of land or real estate. First of all, Germany’s home ownership rate is 33%. And we have been kind of a socialistic country for a while. So, this is a precursor to what maybe America could go down to where we have 70% renters know all the Germans happy people? Yes. But obviously, it’s not the American dream, why we came over? And I’m with Kathleen. Yeah, you know, 30 years ago, I came over from Germany, I did have $10,000. I brought that with me. So, and also build a, build a real estate portfolio. I am no super concerned, I’m actually more concerned about how this whole debt will be paid back. Not even gold is moving right now. So, the entire fundamentals of any economy right now is in question and how the central banks and the Fed, I thought we have three arms of the United States. But it looks like we have a fourth one. And that is the Fed. So, the Fed is making policy. So, for me, I see it in a bigger picture to where we’re going a little bit long term. Now that we have no job growth at all, we had job growth, but we only added service workers, so we didn’t invest in AI and all those really high paying jobs. And now, you know, if you’re a panda hugger, you know, we really need to watch out for what China, so in China already has digital currency. So, privacy and big tech, there’s a lot of stuff I’m concerned about, but about the general well being and the wealth of the average American.

Aaron Norris  Okay. Got it. Paul, you’re next.

Paul Herrera  So, I’m going to go on the hopeful side here. And what I’m hoping for is after this election for the next couple of months, that people find politics boring again, and not the other centerpiece of you know, of their entertainment diet, and stop paying attention to it on a daily basis, and that we come off of that, so that, we’re able to have boring, pragmatic conversations that lead to some kind of problem solving. Because the alternative is what we’ve been suffering through, which is public policy debates, as a performance art, in which the sides are using the topics not for problem solving, but for building a personal brand or building a next career that is more entertainment based. And that is, you know, the real hardwork of building a better society that makes more sense. You know, that the question you have to answer in California, about housing. People don’t like the answers to them. And because the answers are, it’s going to take 10, 15 years to fix the problems that we spent a generation creating. Because we have to build the house and we have to open up the, you know, the lane of supply. And I’m sorry, but we messed up this generation, the young workers, you know who you making a decent income and having trouble understanding how to ever afford a house, we’re just not going to fix it for them. But we hope we can fix it for the folks that come 10, 15 years down the line, if we do things, right. But without that patience, that willingness to, to put that effort forward, and understand that it’s not going to be pretty for a little while, because a lot tougher. So, when you politics be much more boring. And for people to be a little more patience, and I think we can get a lot done.

Aaron Norris  Okay, I’m going to say I believe we are going to innovate out of our way out of this pandemic. And I think we’re going to learn some really interesting things. I think that we could see a return of kindness and decency in the next 12 months. I really hope so. I’m really interested in our industry getting more savvy. I think Wall Street entering in at all levels of our industry is going to force us Main Street real estate investors to get more savvy. It’s going to be about being data driven, getting more sophisticated with automation. And it’s possible. It’s one of the reasons I jumped onto PropertyRadar. And that’s what I get to work with the media. I get to advocate for industry nationwide, helping small businesses disrupt disruptors, it’s possible. I’m here for it. I’m excited. Pop’s?

David Granzella  Aaron?

 

Aaron Norris  Yo, David go ahead.

David Granzella  Um, I think what you just said is really important. Matter of fact, not being that technical I was, I was, was with Sean up in Truckee having lunch the other day before you guys weren’t doing a presentation for the club. And I see the value of getting out of my comfort zone and getting better at comprehending data and find out what it does. I think when I’ve tried to do in the past, it overwhelms me, and I’ve been able to start to learn if I can just pick a few pieces out and use it to my best, best interest, best knowledge. As we were talking about earlier, it’s having the numbers having the knowledge and so being facilitating and using the data using the tools matter of fact, one of the things I should have done years ago, I took a great calculator class with Bill Tan not long ago,  and I should take it 20 years ago. And one of the things with Paul is asking how do we, how do we evaluate the properties going forward next year, and I need to now have more tools if I keep practicing how to offer and actually more importantly, I want to make fair offers. I’m not trying to lowball offers. But I also need to realize that if you’ve only brought in 40% of the rents last year, this is what the property can pay. And they know that as I would know that if I was in that position. So, rather than say this is where I think it’s worth, I can be able to calculate this is, this is what it’s worth and why and try to explain to them in a fair, fair manner, and what it was worth before the pandemic.

Aaron Norris  One of the things that Sean says is, Main Street needs to focus on things that don’t scale. Wall Street does not invest in your soccer teams, they don’t live in your neighborhood. It’s a very different feeling. I just really believe in Main Street, and it’s up to us, especially all of us on this call that are leaders in this space to do better. And to help our network rise above it. There’s a place for them. I don’t think iBuyers are going away. We’re we’re going to have that across the board as they fully integrate and magically lose millions of dollars in the process. But I think we learned during COVID how sustainable they really are. They picked up and left whether it was the Wall Street hard money, or the iBuyers, they packed up and left and were susceptible that Main Street was here to stay. So, I’m excited about what we do. I’m passionate about what we do. So, I’m excited for next year. I think there’s gonna be some interesting opportunity and some innovation that’s going to be coming out. So, I’m excited. So, Pop’s, we’re past time.

Bruce Norris  Yep. I’ve been very brief. First of all, thank you, Aaron for dreaming this event up. And I’m so proud of you. And I’m actually very happy that you have the position you have with Sean and that you have such a national scope in mind and backing Main Street, I think you’re going to do some amazing things. My theme or my ending is the same because it’s really, sincerely baffled me. Why, why we don’t land here. But my God, it’s time. You know, every elected official.Stop acting like a Democrat or a Republican and please act like an American and do what’s best for our country. That changes everything. And I know it’s possible. You know, it’s interesting you said about the coronavirus. You thought that might be a 911 event. I saw that after 911 I was in an angel game and the national anthem you know, usually it’s always paid before the game. starts. And usually it’s a people stand. But right after 911, 40,000 people stood in sang, and it was a very emotional thing, because you looked around and you went, Wow, we we are not different today. We are just Americans. And boy, I hope we can spark that amongst ourselves.

Aaron Norris  All right. Well, that is that is tonight. And that’s where we’ll end it. So, some behind the scenes stuff. The link that you use today to log in will be good for next week. We’re expecting probably a lot more people. I have a feeling that we are going to be able to announce that we have crossed the million dollar mark. If you have people that want to log in. It’s not too late. They can go to I Survived Real Estate, work with Joey, we hope to see you half dressed next week. We’ll have a drinking game every time you say ‘real estate’, you take a shot. I don’t know. But thank you for hanging out. I mean, we had a great audience the entire time. Thank you speakers for covering so much great stuff today. This was amazing.

Bruce Norris  It was great.

Aaron Norris  Yup.

Lenska Bracknell  Half dressed and in full spirits.

Aaron Norris  Have such a great weekend, everybody. Thank you so much for your time.

Kathleen Kramer  Thank you.

Christina Suter  Thank you. Thanks Aaron. Thank you, Bruce. Good night, everybody.

David Granzella  Night.

Christina Suter  Have a lovely evening.

Joey Romero  Thank you for tuning in to I Survived Real Estate 2020. To watch the full video in its entirety, or to learn more about speakers and sponsors. Please go to Isurvivedrealestate.com and be sure to tune in next week. For more I Survived Real Estate 2020 Thank you

 

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