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The AI Boom Is A Housing Tract, And You Are Phase 3 · Connor with Honor: AI, Real Estate and Real Life

• 0:02
  SPEAKER_00: The AI boom is kind of like a brand new housing tract.
• 0:05
  SPEAKER_00: And most of us are about to be sold a house in phase three.
• 0:09
  SPEAKER_00: Now let's think about how a new tract actually sells residential real estate.
• 0:13
  SPEAKER_00: Phase one, the builder sells to those early buyers, those kind of investor people that might be thinking of renting and holding it, right?
• 0:20
  SPEAKER_00: And that's going to be a lower price.
• 0:22
  SPEAKER_00: Nothing's actually built yet, but it's just a promise.
• 0:25
  SPEAKER_00: Now, phase two, that model goes up, the streets get names, and the price actually goes up as well.
• 0:31
  SPEAKER_00: Certain percentages per phase, of course, and even interphase changes as well.
• 0:36
  SPEAKER_00: Now, phase three, the pool's done, the park is done, the rec room, all that stuff, and everybody's talking about it.
• 0:42
  SPEAKER_00: And the price is now the highest it's ever been.
• 0:44
  SPEAKER_00: Now, picture the market turns.
• 0:47
  SPEAKER_00: Who gets hurt?
• 0:49
  SPEAKER_00: Not phase one.
• 0:50
  SPEAKER_00: A lot of them already sold to phase three, right at the top.
• 0:54
  SPEAKER_00: Phase three is holding a house worth less than they actually paid.
• 0:58
  SPEAKER_00: That's the AI money right now.
• 1:00
  SPEAKER_00: The founders, the venture funds, and the insiders bought phase one.
• 1:04
  SPEAKER_00: Phase three is the regular people, the retirement accounts, pension funds, index funds.
• 1:10
  SPEAKER_00: Nobody has to break a law for this to happen.
• 1:12
  SPEAKER_00: It's just the order the money moves in, and it's been repeating for the last 150 years.
• 1:19
  SPEAKER_00: Every new track buyer learns the next part the hard way.
• 1:22
  SPEAKER_00: When the builder is still selling, the HOA dues are kept low.
• 1:26
  SPEAKER_00: Low dues sell houses.
• 1:28
  SPEAKER_00: Then that last house sells.
• 1:30
  SPEAKER_00: The builder hands the association over to the homeowners and drives away.
• 1:35
  SPEAKER_00: The new board opens the books and finds the reserves come up short.
• 1:39
  SPEAKER_00: The dues go up, sometimes 20 to 40 percent.
• 1:42
  SPEAKER_00: Sometimes there's a special assessment slapped on top of it.
• 1:45
  SPEAKER_00: The builder is gone.
• 1:47
  SPEAKER_00: The bill does stay.
• 1:48
  SPEAKER_00: That's the gap again.
• 1:50
  SPEAKER_00: When the early money leaves, the bills land on whoever is still living there.
• 1:55
  SPEAKER_00: Hold on to one word for me, and that's lease.
• 1:58
  SPEAKER_00: Now I'm going to come back to it.
• 2:00
  SPEAKER_00: It's kind of like a house flip.
• 2:02
  SPEAKER_00: The flipper buys it cheap, paints it, stages it, sells it at the top.
• 2:06
  SPEAKER_00: Then the new owner finds out about the roof and the first rain.
• 2:10
  SPEAKER_00: And in 2002, one of the big fiber companies, Global Crossing, went bankrupt.
• 2:16
  SPEAKER_00: In the four years before that, its founder sold$734 million worth of stock.
• 2:23
  SPEAKER_00: He put in about$20 million.
• 2:24
  SPEAKER_00: And that's the flip.
• 2:26
  SPEAKER_00: The people who bought the stock got the roof.
• 2:28
  SPEAKER_00: And it's kind of like hearing about a hot stock at a Thanksgiving dinner.
• 2:33
  SPEAKER_00: By the time the trip makes it down the table to your uncle, the people who started the story, they're already selling.
• 2:40
  SPEAKER_00: When you hear about something on the news every single night, you're not early.
• 2:45
  SPEAKER_00: You're just at the end of the table.
• 2:46
  SPEAKER_00: Now, the part they call a little rough, well, it's kind of like the doctor holding a three-inch needle and telling you you're going to feel a little bit of pressure.
• 2:54
  SPEAKER_00: The doctor isn't lying.
• 2:56
  SPEAKER_00: The doctor just isn't the one getting the shot.
• 2:58
  SPEAKER_00: Or it's kind of like the city building a new freeway.
• 3:01
  SPEAKER_00: When it's done, everybody gets where they're going faster.
• 3:05
  SPEAKER_00: But for three years, the detour runs right past your shop.
• 3:08
  SPEAKER_00: The parking's gone, your customers stop coming, and the freeway works.
• 3:12
  SPEAKER_00: Your shop might not make it to opening day.
• 3:14
  SPEAKER_00: And that's the gap.
• 3:16
  SPEAKER_00: The years between the breakthrough and the payoff, I call them the gap years.
• 3:20
  SPEAKER_00: And we're living in them right now.
• 3:22
  SPEAKER_00: The last time machines changed everything, it was kind of like a restaurant that got 40%, 46% busier while the waiters' pay went up only 12%, and it stayed that way for almost 50 years.
• 3:34
  SPEAKER_00: That was Brinton, 1780 to 1840.
• 3:38
  SPEAKER_00: Economists call it Ingalls pause.
• 3:42
  SPEAKER_00: The machine worked.
• 3:44
  SPEAKER_00: The owners did great.
• 3:45
  SPEAKER_00: The workers' grandkids ended up getting the payoff.
• 3:48
  SPEAKER_00: So where do I stand?
• 3:50
  SPEAKER_00: Well, AI is kind of like a hammer.
• 3:52
  SPEAKER_00: A hammer works for whoever's holding it, and I use it every day in my businesses.
• 3:56
  SPEAKER_00: But what they're selling at the top is kind of like the ring in that movie.
• 4:02
  SPEAKER_00: It promises you everything and slowly starts running you.
• 4:06
  SPEAKER_00: And the biggest companies get the nail gun a year before the rest of us get the hammer.
• 4:11
  SPEAKER_00: Now back to that word, lease.
• 4:14
  SPEAKER_00: When an apartment building sells, the tenants with the lease don't get thrown out the next morning.
• 4:19
  SPEAKER_00: The lease goes with the building.
• 4:21
  SPEAKER_00: The new owner bought it knowing that people inside come with it.
• 4:25
  SPEAKER_00: And that's the idea behind the transition moonshot.
• 4:28
  SPEAKER_00: When a company brings an AI to do a job, a person in that job comes with a deal for a while, paid through the transition until they land somewhere new.
• 4:38
  SPEAKER_00: It's kind of like a lease that goes with the job.
• 4:40
  SPEAKER_00: And the company, they can afford it.
• 4:42
  SPEAKER_00: Say AI is only as good as the job as a person, not better.
• 4:47
  SPEAKER_00: Just as good.
• 4:48
  SPEAKER_00: A person works about 1,880 hours a year once you take out holidays, vacation, and sick days.
• 4:54
  SPEAKER_00: AI works three shifts, 365 days a year.
• 4:58
  SPEAKER_00: That's 8,760 hours.
• 5:01
  SPEAKER_00: It's kind of like buying a house and finding out it rents like four and a half houses.
• 5:06
  SPEAKER_00: Well, that extra rent can carry the old tenants across.
• 5:09
  SPEAKER_00: That's not a charity, that's just sharing the upside.
• 5:12
  SPEAKER_00: Nobody on the ground floor is asking for a handout.
• 5:15
  SPEAKER_00: We're just asking for the lease.
• 5:17
  SPEAKER_00: Let us keep our jobs while we cross this gap.
• 5:21
  SPEAKER_00: The future's coming either way.
• 5:22
  SPEAKER_00: The only question is whether the people on the ground floor are going to get a lease or an eviction notice.
• 5:28
  SPEAKER_00: Tell me in the comments which one hit home.
• 5:30
  SPEAKER_00: The track, the HOA bill, or the flip or the needle.
• 5:33
  SPEAKER_00: I'm building this plan right here on the show, one piece at a time.
• 5:37
  SPEAKER_00: Come build it with me.
• 5:38
  SPEAKER_00: I'm Connor with honor.
• 5:40
  SPEAKER_00: We'll see you in the next one.