Latest / The Wealth Vibe Show / Episode #117 Lessons Learned After Losing Everything in the 2008 Recession!

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Episode #117 Lessons Learned After Losing Everything in the 2008 Recession! · The Wealth Vibe Show

• 0:00
  Stewart Heath: you know those were those were go go days. Yeah, appreciation was going. So I would hold them about a year year and a half. I think I refinanced that second group of duplexes, and and pulled out a couple of 100,000, and then use that as equity by something else and something else, and something else A. And and get doing that. So that's how the no money down things now want to go on the right. I don't recommend that it it is a I don't recommend it without reserves. I mean whether you're an investor or not. You should have reserves, you know, if for contingencies, because you never know what's going to happen. But yeah, I was
• 1:28
  Vinki Loomba: This is the real statewide show, and I'mia, who's Vinky? Lomba, a commercial estate in mustard, and today I have a very special guest. What he's with me. Welcome to the real estate wife shows through it.
• 1:40
  Stewart Heath: Thank you for having me, Vicky. It's quite an honor to be here.
• 1:44
  Vinki Loomba: Stewart is a founder, and CEO of Howard, Greece, capital, a private equity, real state investment firm that helps people build wealth faster through hands of real estate, investing that generates passive income, reduce risk and maximize tax efficiencies.
• 2:01
  Vinki Loomba: Stuart is a certified public accountant a Cpa and has over 35 years of experience in real estate sector his expertise at encompasses, Malta family and commercial property, development, construction management, and investing in 2,008. He lost everything during the financial crisis, but learned a lot from the experience about the best practices for holding and managing real estate, and that's what we're going to be talking about today. So today's topic is rebuilding through business intelligence lessons learned after losing everything in 2,008 recession.
• 2:39
  Vinki Loomba: So before we get started, I would like to ask you if you can briefly share.
• 2:45
  Vinki Loomba: How did you get here, or what made you who you are today?
• 2:50
  Stewart Heath: That's a that's a tough one or a big question. Rather.
• 2:55
  Stewart Heath: Yeah, I'm. Here, through all of my life experiences, I had great parents. I'm. A person of faith. And so my faith that makes makes me a lot of who I am. My wife makes me a better man, and in my children you know my love for my children makes me want to be a better person for them.
• 3:20
  Stewart Heath: So I am who I am because of.
• 3:23
  Stewart Heath: You know the culmination of all of the life experiences that I've had, including the one you just reference to losing everything in in 2,008. So
• 3:34
  Vinki Loomba: Oh, I love that! I know that's what it is. You know our life is all about experiences, and how you learn and how you progress, and how you learn to live better life right every time.
• 3:45
  Vinki Loomba: So i'm gonna ask you, Can you again share your personal experience of losing everything in 2,008 to the session.
• 3:54
  Stewart Heath: How did that impact?
• 3:56
  Vinki Loomba: You know your overall personality?
• 4:00
  Stewart Heath: Oh, that's that's a good. It's an interesting question. So I I talk about this a lot. I've never been asked how it impacts my personality, but it's but it definitely is. Oh, no, no doubt. No doubt. So as as you mentioned, I'm. A Cpa. I had my own practice coming out of the 19 nineties A. And I had watched for years Various clients.
• 4:28
  Stewart Heath: you know, not get rich quick, but but get rich.
• 4:34
  Stewart Heath: Make a generate, a lot of wealth, flipping houses, owning investment properties, cash, flow in and in in in a lot of what? In a lot of ways that I've would sort of turn my nose up at. Well. I don't want to rent. I don't want to manage some crummy rental house, I mean, yeah, that's just, you know. Just almost felt like it was beneath me. So, in other words, I was rather arrogant in. But at some point in the year 2,000. I was in the middle of my tax season.
• 5:11
  Stewart Heath: and I was exhausted. I was working, you know, 1520 h a day, and in realizing that one of them billing a lot of money that month.
• 5:22
  Stewart Heath: you know I was still making a nice income, but I wasn't building any wealth.
• 5:29
  Stewart Heath: So you you began to focus in on these clients that I had observed. and so I decided to start investing in real estate.
• 5:42
  Stewart Heath: you theoretically, passively, but it it became anything but and so I bought my first duplex in what was the hood of of our town.
• 5:53
  Stewart Heath: Franklin, Tennessee, and it was a duplex. It had 2 tenants. I found that I liked talking to the tenants. I liked doing little odd jobs when they had needs.
• 6:07
  Stewart Heath: and and so I kept looking for more properties. In about 8 or 9 months later found a a portfolio of 9 duplexes, all next to each other up north of Nashville, Tennessee.
• 6:21
  Stewart Heath: and and acquired those A. And I kept going like that. So that was, that would have been 2,001 by the time I acquired those A in, and just kept buying and kept buying. All of this I'm. Being done. I I I was doing it with essentially no equity, no cash down.
• 6:41
  Stewart Heath: You know. I had acquired one of those TV information infomercial forces on how to buy real estate. Nobody didn't have. Well guess what folks that stuff works You'd be surprised what a seller's response might be when you ask them a question.
• 6:57
  Stewart Heath: you know don't predetermine their answer. Don't buy their answer, you know, but with without asking them so, and I kept building, and along the way I've partnered up with a guy and started building some houses, and then I bought a portfolio of condos, and ultimately acquired every unit in that condo complex, and we began to rehab those.
• 7:22
  Stewart Heath: because condos and town homes were massively popular in during during that time, and I saw great big companies who were selling 50 60 units in a weekend as well.
• 7:35
  Stewart Heath: so i'll flip this place and generate cash, and then just pay off my other properties, and and then just move forward on a cash basis from there.
• 7:46
  Stewart Heath: So I was doing what's called equity stepping or equity flipping. I buy one property, hold it for about a year refinance it. Take cash out by something else. Do that do that to the point where you know 2,007 comes in in. There were warning signs in 2,007, 2,008 gets here. It's an election year A. And the the market had definitely slowed down. I was in the middle of trying to sell all of these condos that we had rehab. So i'd take i'd taken a cash flowing property.
• 8:24
  Stewart Heath: taking them off line to rehab them. and then couldn't rent them. It's so 2,008 you is when the real crash happened. A.
• 8:35
  Stewart Heath: So June thirtieth of 2,000, and 8 I produced a personal financial statement for the bank.
• 8:45
  Stewart Heath: and all based on appraisals. No funny business, anything like that had 25 million dollars in gross assets and net worth of 15 million dollars and almost no cash.
• 8:59
  Stewart Heath: Certainly not cash that that you should have when you're dealing with those kind of numbers. So 90 days later, You know, this was after countrywide mortgage had failed. There was an official financial crisis in in in the Mix election year. John Mccain has suggested to Barack Obama that they should go back to Washington and help fix the crisis.
• 9:24
  Stewart Heath: So 90 days later, you know, I like to say that I I was probably went from 15 million net worth to to 5 million dollars underwater. Yeah, a 20 million dollars swing in 90 days. and that's because nobody was lending any money at that point, and in real estate is not worth a whole lot.
• 9:47
  Stewart Heath: If nobody's gonna you know. The reason it's so powerful is because it's a leverigible asset, and and if nobody is lending, then then then your holdings aren't worth a whole lot.
• 10:01
  Stewart Heath: And there I was. You know the the world had stopped in in. I had no reserves whatsoever. A later calculated that if I had had reserves of as little as 300,000, or even as much as 500,000. I could have survived that that period for 9 months to a year, which, which, when the world started loosening up again, but I have nothing.
• 10:32
  Stewart Heath: A. And it spent the next year giving most of those properties back to Banks, and and ultimately filed bankruptcy about a year later.
• 10:44
  Stewart Heath: So So that's that's my that's my story. Had a lot of fun building that portfolio wasn't so much fun going through the the unwinding of it in the you know money comes and money goes, you know it's the personal costs that go with that. You know it that impacted everybody around me so that wasn't all that funny. So you asked me, how did my personality change?
• 11:14
  Stewart Heath: I got a lot. I got a lot less arrogant.
• 11:18
  Vinki Loomba: Yeah, I I don't. I'm gonna ask you that question later. But this story has so many golden, I guess, in them. You're asking so many questions. Here you started with one duplex in 2,001. And how many did you have by 2,008 early 2,000, and 8 or late, 2,007 Yeah, I I don't. I'm gonna ask you that question later. But this story has so many golden, I guess, in them. You're asking so many questions. Here you started with one duplex in 2,001. And how many did you have by 2,008 early 2,000, and 8 or late, 2,007 if I had. I had over 200
• 11:41
  Stewart Heath: residential rental units, so that included houses, duplexes, and stuff along the way. I had acquired a property management company just so I could hire Staff to manage my own stuff in a and as well as office condos and homes under construction. It is so.
• 12:03
  Stewart Heath: Yeah, it was kind of a mess so.
• 12:05
  Vinki Loomba: but that was what I mean. Great journey right like in 6 years building that big portfolio. And then I think that was pretty awesome. You said 2025,000,000 or 50 million right.
• 12:18
  Vinki Loomba: 25 million dollar portfolio in 6 years. Oh, my God! That was, I think. Why, that achievement if you look at it. And the other thing that you mentioned, why, you said you are getting all this no cash down. So if you can share some light on that.
• 12:33
  Vinki Loomba: How did you do that? Because it it that is applicable in today's day, too? People can still do that.
• 12:38
  Stewart Heath: Yeah, I a. And I say this with a caveat. Now. yeah.
• 12:45
  Stewart Heath: back in the day there there was this guy who used to have infomercials on TV, and like Carlton sheets, and he had a program called No Money down. I still have it.
• 12:55
  Vinki Loomba: It was about 12 tapes and a bunch of, you know, in a 5 inch notebook, and
• 13:02
  Stewart Heath: and there's been a lot of people, you know, along the way. But this guy was.
• 13:08
  Stewart Heath: I just have to. It was pretty good stuff. I mean I was, Cpa. I I know a thing or 2 about business, but this was pretty good common sense stuff.
• 13:17
  Stewart Heath: and so I followed a lot of his steps. And so, as in most things in business, you're gonna you're gonna turn over a lot of rocks or like I like to say, kiss a lot of frogs before you find one that becomes a deal. You can ask a lot of sellers. Would you be willing to finance this for me, and 9 out of 10 of them are going to say no. But you know gee whiz! If you can do a deal on every tenth property that you come across. You're going to end up a lot of stuff.
• 13:50
  Stewart Heath: So but so I got started doing that. The first duplex I got was seller financing. I put down 5 K. And he financed 50. So I bought it for 55,000, and and I had to refinance him out in like 3 years or something like that. I I I forget that second group of duplexes.
• 14:11
  Stewart Heath: I I was able to get bank financing for 70, and I got the seller basically to take back the rest. And and I put very little money in that. I had to cover some Co. Some closing costs and and whatnot.
• 14:27
  Stewart Heath: And so that kind of got me started with the Equity stepping thing, so that that that second deal was about a 1 million dollars, 14 new places. So you know those were those were go go days. Yeah, appreciation was going. So I would hold them about a year year and a half. I think I refinanced that second group of duplexes, and and pulled out a couple of 100,000, and then use that as equity by something else and something else, and something else A. And and get doing that. So that's how the no money down things now want to go on the right. I don't recommend that it it is a I don't recommend it without reserves. I mean whether you're an investor or not. You should have reserves, you know, if for contingencies, because you never know what's going to happen. But yeah, I was without reserves. I mean whether you're an investor or not. You should have reserves, you know, if for contingencies, because you never know what's going to happen. But yeah, I was pretty well convinced. You know this, this merry-go-round was never going to end. And so a and I had a plan to dash up those condos and pay off all the debt on all my properties, and then just you know manage a portfolio debt-free.
• 15:41
  Stewart Heath: But you know the the ride ended before we could sell all those condoms.
• 15:47
  Vinki Loomba: Yeah, I know I, you said if you had 3 to $500,000 you could have survived another 6 to 9 months, and that could have save you going into bankruptcy, you know. And and the thing is, you mentioned that you're taking the equity out, putting in down another deal. Then taking that equity or putting another that's gonna a little bit over leverage, I would say, not a little bit a whole lot. It was completely over, leveraged so like way too much over leverage, you know, without having your own pockets like a little bit deeper, you know, in case something happened because you were on this upward trend. So, looking at you know that journey or that particular experience, because I know a bunch of my friends. They did the same thing, too.
• 16:32
  Vinki Loomba: They were just award leverage, and then everything was gone in 2,008 push. Everything was like a clean slate, starting all the working, and I've seen that happening to multiple people. But before that the mindset was always like that, You know. I'm on that trajectory of growth, you know i'm the Almighty. Now, what's gonna happen? Because I can foresee the future.
• 16:53
  Vinki Loomba: So i'm pretty sure that have changed you a lot. But looking through all those experiences.
• 17:01
  Vinki Loomba: can you share W. You know what is your going for? What strategies now?
• 17:07
  Stewart Heath: Oh, so yeah, I I. I went back. Got a job. For several years I've been a Cfo for multiple companies and a and sort of return to my consulting roots in in.
• 17:22
  Stewart Heath: but but the love of real estate never really left me. It it's. I like to say that, you know Wall Street likes to call it an alternative investment, and I I call it Well, actually, it's the original investment, and and you know it. It's just I I I want to call it simple, but it's just so investable. It's just so investable, unlike, you know. Which. Yeah, i'm not against stocks. I I own some stocks, but I mean, that's to me most of that's far riskier than than owning a hard asset. So so what I've learned is.
• 18:07
  Stewart Heath: yeah, learn some discipline. I've learned the the critical importance of recurring cash flow.
• 18:16
  Stewart Heath: And so that's kind of what I I counsel people and and I and I say, I hope that their financial planners are telling them. The same thing is that recurring cash flow via a dividend paying stock, portfolio or rental properties, but but recurring cash flow that is not very much impacted by the ups and downs of the market is the foundation to everyone's investment portfolio.
• 18:44
  Stewart Heath: And once you have that. then sure go by some bitcoin or or go by some.
• 18:54
  Stewart Heath: some, some Ipo stocks, or go try and or real estate development, or something like that, and go try something, you know. Add a little bit of risk in there, because you know, more risk generally brings more reward. But sometimes it just brings more risk a in. and so get that build that foundation of recurring cash flow which you can get pretty easily from real estate in any. I'm not a proponent, that real estate only investment, but you know, recurring cash flow. I that's what real estate is all about, essentially, you know. And so ask yourself 90% of the family offices, and I get this from the Family Office Club, you know, have a foundation of real estate at the core of their investment portfolio. A lot of them are active in other type of venture funds. But but they're doing that from a platform of Hey, the overheads covered, you know, because because, no matter what they do, the cash will keep coming in from that core investment.
• 20:05
  Stewart Heath: So so that that's what I've sort of become the evangelist of, as well as very conservative underwriting and building reserves into every transaction that we do.
• 20:16
  Vinki Loomba: That's true. That's a that's a good trip right here well having the reserves all the time, and do not over leverage. But beside that, what other lessons will learn from this whole experience.
• 20:26
  Stewart Heath: you know mainly the business lessons.
• 20:29
  Stewart Heath: you know mainly the business lessons.
• 20:29
  Stewart Heath: you know not over leveraging a, and I've got.
• 20:33
  Stewart Heath: I I mean, we're gonna close a deal later this month, and I've got the banker trying to push me up from 60% Ltv. To 75, and it it feels a little bit like like oh, 8 all over again, where the bankers were so willing to to loan money, and so it's so. I I've got discipline, and i'm saying no to that. I I mean gee whiz, I could.
• 20:58
  Stewart Heath: I could have a lot less equity in the deal if I did that. That so personal discipline a lot more patience.
• 21:06
  Stewart Heath: I I don't feel the need to do every deal that I come across, even though I can. You know we've walked away from 2 deals this year already. They'll probably be more a and so yeah, you know, discipline and patience, I would say, would be the main personalities.
• 21:28
  Vinki Loomba: Okay, so let me ask you this question. So this experience of losing everything. How did it shape your risks.
• 21:36
  Vinki Loomba: you know, because your your risk appetite might have been changed because it's it's it's like I don't know it's like a totally paradigm ship for you, losing everything all of a sudden, you know you're like sitting up there, and all of a sudden you feel like oh, my God! The thing is there! There is nothing to look for in future kind of a it changes you. I I think it alters your mental status, too.
• 22:00
  Stewart Heath: so it it's made me only want to look at stabilized deals.
• 22:04
  Stewart Heath: so it it's made me only want to look at stabilized deals.
• 22:04
  Stewart Heath: Now that said you, you know we we have one that we're looking at, an expansion on.
• 22:12
  Stewart Heath: We don't have to do it. But we likely will, because we're a 100% occupied, you know. And so, when you start looking at value, adds or or expansion, those are technically development. The deals but you, but they come with a a different risk profile than ground up development.
• 22:31
  Stewart Heath: But W. What? When I go to market looking for the next thing i'm looking for stabilized cash flow deals what I like to call boring boring stuff.
• 22:43
  Stewart Heath: You know. These are like the the dividend paying stocks that you never hear about on TV, on Cnbc. Or anything like that. So but they're just They're just mature. Now, there's money to be made there because a lot of times you find these things in their cash flowing.
• 23:02
  Stewart Heath: but they haven't been managed. Well, a a and so you can make money through the management of an asset that that doesn't that doesn't necessarily have to be very risky like you might risk, or you might choose to push out one tenant who won't accept a rent increase, you know, If if they're 10 bucks below market, I mean, why would they? But but you know that? But you're confident about your asset, and that it will ultimately bring a tenant at at the market price. So and and that's management. So you know, from a business perspective. I've gotten a lot more confident in looking how you maximize the value of an asset through management not saying we won't do development deals.
• 23:56
  Stewart Heath: Yeah, in the future. Obviously those are great opportunities.
• 24:00
  Stewart Heath: But the current time we're we're preaching to all of our investors. Recurring cash, flow, recurring and increasing cash flow
• 24:09
  Vinki Loomba: Great interest, you know.
• 24:10
  Vinki Loomba: Okay. So you're just like more careful now. So you said you're more disciplined. You're more confident because you are looking at the numbers differently. You wanted to make sure. 100% of the numbers are making sense and the underwriting before getting on to any deal. And then you're saying you don't want it to take too much risky that you want it to get more into cash flowing properties, Video: making cash day one because I I, you would just say that your risk
• 24:38
  Stewart Heath: tolerance has changed. It's like I shrunk a little bit to take risk, and and here's something else I've done. I I keep a team of people around me who who who check you know they check my work.
• 24:58
  Stewart Heath: I I mean back before I was doing all of this by myself, and in truth be told, I was probably lying to myself in my own spreadsheets, and just because I wanted to do another deal, and and and so I have.
• 25:12
  Stewart Heath: I have people who keep me yeah accountable and and make me. They make me better. Better businessman by saying, Here, I don't think you're gonna get 24 bucks a foot there. I think it's more like 22, and you that's within reason but 2 bucks a foot can make the difference in a purchase price. And so so I I have a have people around me that that challenge and push me, and and and vice versa.
• 25:44
  Stewart Heath: so that you know hopefully. The risks are just going out and doing a stupid deal for the sake of doing a stupid deal Are are are going so.
• 25:55
  Vinki Loomba: Oh, I like that so? The all the deals that you did 200 plus You know that you had before, during the 2,008 time frame you did it by yourself, or did you do syndication?
• 26:06
  Stewart Heath: No, I didn't do any syndication.
• 26:23
  Vinki Loomba: You want to make the numbers look good because you like something right. You like that deal. You want it to make the numbers good, and you can polish numbers as much as you want in the spreadsheet, and you can just make it look good. But you have to be true to yourself like you said, you know, so that that's a really good thing. So I other thing that you mentioned very early on was that there was some warning signs in 2,007, so I wanted to understand that what was those warning signs.
• 26:54
  Stewart Heath: I I believe it was either Layman brothers, or bear. Stearns. Yeah. Went under in early in Q. One of 2,007, I want to say, and i'm relating that because I talked about the condos that that I had acquired.
• 27:13
  Stewart Heath: and that we renovated, and when we put them out on the market, because in January of 2,007, and this was sort of a confirmation to my strategy.
• 27:21
  Stewart Heath: I had acquired 72 condos about the whole unit. It took me 3 years to do that. and then we started with the first building and and renovated the whole thing. And and so in January, 2,007. We had sort of a grand opening.
• 27:38
  Stewart Heath: and I had 26 done ready to go. and I sold 28, so everything I had and 2 pre sales in 2,007.
• 27:50
  Stewart Heath: About a month after that I think it was Bear Stearns that started going south. And then you started hearing people.
• 27:57
  Stewart Heath: Yeah, more about layoffs and things of that nature. And what was it fascinating to me? I'm just like, Yes, this plan is working. you know. See how smart I am! I didn't sell another unit for a year.
• 28:13
  Stewart Heath: and so one more. I I thought I was going to be 12 months ahead of plan
• 28:18
  Vinki Loomba: sold them all
• 28:20
  Stewart Heath: by may. you know a and didn't sell another one. We did close on those 28, and but but only 2 more. You. But before I ended up having to give it back to the bank, and and so warnings.
• 28:40
  Stewart Heath: interest rates were going up. If I recall correctly, Bear Stearns crashed, and nobody came to the rescue.
• 28:50
  Stewart Heath: Layoffs. We're starting to come home Builders for were home sales were slowing down.
• 28:58
  Stewart Heath: And so those those are the warning signs that I recall.
• 29:02
  Vinki Loomba: Okay. So i'm going to ask you another question here. So if we take that scenario, what happened in 2,007, those were the early warning signs that you know all you said. Country wide mortgage was down right, and then our interest is what up there was. Lay off Job market. Was not that great? So let's compare that scenario with today's market. So we are seeing banks failing into this market as well. Interest rates are up, and people are predicting the session. Some people are saying they are already in a session. A lot is going on. So you you've been there done that.
• 29:36
  Vinki Loomba: So how would you compare the 2 market conditions?
• 29:40
  Vinki Loomba: And what would you do in today's market? I know it's a long question. It's a 2 phases that we can share that.
• 29:47
  Stewart Heath: Yeah. The short answer is, I see No.
• 29:53
  Stewart Heath: nothing comparative about them. And now, up until the last few months now. the the bank failures are definitely concerning. But there to be there to be expected they should have. You got to raise interest rates? 500 basis points. And yeah, it's not like it's not like a Silicon Valley bank was doing.
• 30:19
  Stewart Heath: you know. high-risk mortgages or anything like that they were holding treasuries.
• 30:23
  Stewart Heath: So I I know they were doing venture loans and stuff like that. But these other banks they've not been doing risky lending. They helped treasuries, and and I guess they were unwilling to take the hit publicly for the mark to market in until it was just too late.
• 30:44
  Stewart Heath: What's different between then and now is the ability to move several 1 billiondollars out of deposits of a bank in the matter of hours.
• 30:56
  Stewart Heath: That technology did not exist, you know, 12 years ago. We're you're haver along it it was.
• 31:06
  Stewart Heath: There were a lot more job losses back then than there are now in, you know.
• 31:15
  Stewart Heath: Yeah, you hear about a few.
• 31:18
  Stewart Heath: but the employment market is very strong right now.
• 31:22
  Vinki Loomba: I haven't quite figured out how we're going to have a recession when everybody who wants a job has a job to slow down economic activity
• 31:31
  Stewart Heath: when everybody's employed and can consume at will. Now they've definitely had an impact of slowing it down. They in the fed. You're going to slow down housing with higher interest rates in in we'll. I think we'll see that come back pretty quickly as people adjust to that market as builders just, and they build a different product.
• 31:59
  Stewart Heath: It is so.
• 32:01
  Stewart Heath: But in in my opinion there's there's not a lot there's not a lot comparative now. I thought we had been in a recession when we had to quarters of negative gtp growth, you know, last summer, I think. But I guess i'm old school that used to be the definition in you.
• 32:22
  Stewart Heath: and apparently I'm. I'm uneducated, and and I don't know what the definition of a recession is. I think, of the definition of a recession is once they know we're out of it. Then they tell us we were in one.
• 32:35
  Stewart Heath: and and then oh, well, we had one so last fall to me felt like a recession. but it turns out it it wasn't. We definitely had a slow down. but what we're doing to get to that. What we are doing is we're meeting with our investors. We're laying the foundations to raise a fund. I do believe more pain is coming. I do believe more bank failures are coming.
• 33:07
  Stewart Heath: which perhaps for the first time in my life, will be in a position to take advantage of.
• 33:12
  Stewart Heath: So there's going to be great assets hitting the market that people can't afford to refinance for whatever reason. And so we we'll either buy them from a bank, or we'll buy them from, You know somebody at a fire sale. So I think that's coming. I think it's gonna begin in Q. 3 of this year, and last for a year or 18 months. So we're trying to gather dry powder to be aggressively acquisitive.
• 33:39
  Stewart Heath: although there'll be stabilized cash flow properties. I know. Excuse me, I know. I agree on that. You know, competing that 2 2,008. And now there's quite a bit difference there. Doesn't exactly same situation, because stabilized cash flow properties. I know. Excuse me, I know. I agree on that. You know, competing that 2 2,008. And now there's quite a bit difference there. Doesn't exactly same situation, because
• 33:53
  Vinki Loomba: every time we go through some kind of downfall, or even, you know any kind of experience. We improve on that because we have learned some lessons there and then we, when the next time it happens, we're not doing the same things. I know banks are still failing. Things are happening, but the banks are being barred by other banks. So I just feel like you know it's kind of a law of nature to, you know. We expand and we shrink, we expand. So that's the kind of things are happening. So banks are just like collaborating, I would say. Even they're acquiring the smaller banks at this point. So things might look different. And then you're still buying. You said you're pretty aggressive. You're saying there's gonna be so many deals in the market so many good deals that you're gonna get hands on that we already. You are very optimistic about that and me, too, because we are very optimistic about that. There's gonna be a lot of opportunity in this challenge, you know. Not begin to see. So in your crystal ball, what do you see for the next 2 years? What's gonna happen in the market.
• 34:52
  Stewart Heath: I think that the people who are saying interest rates are going to start coming down later this year are wrong.
• 35:00
  Stewart Heath: I think they will start coming down. Q. 2 of next year.
• 35:09
  Stewart Heath: I personally think the fed is done raising interest rates, although for whatever reasons they can't bring themselves to say that.
• 35:19
  Stewart Heath: I I I think I think the fed is is uncertain, because they're not quite certain how to evaluate the the gig economy. And in fact, the chairman said that not too long ago that they're just now beginning to realize that there's so many more people self employed since the pandemic like.
• 35:38
  Stewart Heath: Yeah, I I mean, that's been a parent since the fall 2020, but so going forward.
• 35:50
  Stewart Heath: Yeah, and i'm and I'm. I i'm i'm hedging because i'm not so sure how, in my chosen market of of of Huntsville, and and how many opportunities there are going to be, because it's such a strong market, but I do believe there'll be several properties come available for us to try to take advantage of. I think there'll be a lot of competition for that.
• 36:18
  Stewart Heath: Anyway, we will get our share, and you know it is our hope that we will be able to move fastly. We've quickly with dry powder. Grab these properties quickly, and then wait for the opportune moment in the debt markets to to then put financing on them, replenishing our capital and go out and get some more, so that that that's what we're intending on doing but a and then I I think that's the next 2 years following interest rates and increased economic activity.
• 36:54
  Vinki Loomba: Things gonna change that up, I to shift a little bit. That's awesome. So we are out of time. I know we over time. So it it was a good conversation. So can you share quickly one golden target with my audience.
• 37:07
  Stewart Heath: Always have reserves. You don't know what's going to happen.
• 37:11
  Vinki Loomba: I like that that's so true. So this brings us to our why rapidly around. So i'm going to ask you 5 questions. You're going to answer in one word, one sentence only.
• 37:23
  Vinki Loomba: So are you ready? Yeah.
• 37:26
  Vinki Loomba: Okay. So i'm going to ask you the first question: what is one of the most important thing that you have learning in your life.
• 37:28
  Vinki Loomba: Okay. So i'm going to ask you the first question: what is one of the most important thing that you have learning in your life.
• 37:33
  Vinki Loomba: Okay. So i'm going to ask you the first question: And how did your life change after learning it?
• 37:38
  Stewart Heath: The importance of family?
• 37:40
  Stewart Heath: A. And how important it is to preserve that. and my life is much richer at once. I accepted that real truth.
• 37:52
  Vinki Loomba: Share one good book that you have read and recommend to my audience Share one good book that you have read and recommend to my audience
• 37:58
  Stewart Heath: probably been said before, but Rich Dad poured in
• 38:01
  Vinki Loomba: beside that, Everybody says that
• 38:07
  Stewart Heath: traction that's a good one to yeah, very common one as well in one. What does life mean to you traction that's a good one to yeah, very common one as well in one. What does life mean to you