Latest / Real Investor Radio Podcast / Ep. 111 | Aeron Alberti on Market Cycles, Relationships, and Strategy | Pt. 2

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Ep. 111 | Aeron Alberti on Market Cycles, Relationships, and Strategy | Pt. 2 · Real Investor Radio Podcast

• Jack BeVier (00:00) Alright, so switching gears, what's your what's your perspective on the market? I you're seeing a ton of deals, not only for your own personal deal flow, but for a lot of other investors. So you're getting, you know, inside scoops and perspective on on more than anybody else in Maryland, for sure, right? Like nobody sees the inside of more deals than you do in Maryland. So what's your what's your take on the last 12 months? What's your, you know, perspective, perspective on the next 12 months? Love to love to hear your thoughts. Aeron Alberti (00:27) Yeah, right. know, the last 12 months has been a declining retail market. OK, like, you know, we sell these, you know, in the flip world where we have to sell this property to someone who's actually going to use this house instead of an investment vehicle, but use it to do their laundry and cook their food. That price has come down. OK, like there's there's no question about it. It's been coming down. Certain areas are worse than others. I don't think there's a single area. that is not down at least 10%. I think there are certain areas of Baltimore that Jack BeVier (00:55) It's funny because you don't you don't see that in any of the headlines you don't see that in like the case Schiller index reports You know, they're all they're just like all the markets been flat this year year over year prices are you know, or they're down 1.4 % I think that was the met the case Schiller US data a week or two ago was the US is down 1.4 % and I wouldn't and Maryland's not sitting in there as one of the outliers like like Cape Coral West Coast of Florida Austin, Texas that are like really down like 20 plus percent But your perspective is that even a boring market like Maryland's down 10 % and there's something funny with those numbers. There's something they're just not right because you're like, well. Aeron Alberti (01:34) Fake news with their numbers, yeah. Real news, down at least 10%, every area. I don't care. Glen Burnie, which everybody loves. And I think if you get in certain parts of PG County and the real urban areas of Baltimore City, it's way worse than 10%. To where I don't even know what it is, but it's not, you can't take a comp at its height, at its peak, and you're not gonna sell it for that number. Jack BeVier (01:36) Yeah. Aeron Alberti (01:57) And look, I could be wrong, but I don't think so. And so I'm not buying one. ⁓ Jack BeVier (02:01) So what's the right time frame to be picking comps from? If I see a comp nine months ago, any weight, six months ago, any weight, three months ago, when do we start believing that the numbers are indicative of the market, when this thing is gonna go sell? Aeron Alberti (02:14) I don't know if it's stopped declining. Okay, so, you know, I haven't noticed an uptick, I can tell you that. So I'm not sitting here saying, last week, we just sold something 5 % higher than the month before. So I don't know if we're still declining or if we're flat. And I think, I'm hoping we're flat. Jack BeVier (02:20) Mm. Mm-hmm. Aeron Alberti (02:38) Because in a lot of work, all you want is stability. All you want is to able to predict something. And if it's going up, great. You do nothing, it's slow, you get paid. With that said, the wholesale market, which is where we buy stuff, has not come down. So what do you call that? Squeeze? I don't know the technical, but I Jack BeVier (02:44) Great. Mm-hmm. Aeron Alberti (02:58) I, our spreads are not good right now because the wholesalers and the distressed sellers who are now all of a sudden who are turning you down, hey, I don't even sell it. I think we ought to sell now. They're starting to become motivated. Don't quite realize that their house doesn't work what it was a year ago. Because, know, nowadays everybody has access to cops. Jack BeVier (03:12) ⁓ Aeron Alberti (03:19) Google on the phone or whatever. even people you think might not be sophisticated are very sophisticated compared to the way they were 15, 20 years ago. And so they're saying, well, look, this whole six months ago, we should get that. And we're definitely down. in reality, haven't ever seen a decline in real estate pricing since what, 2010 or something? So nobody's even, we've gotten so used to it going up. Jack BeVier (03:21) you Thank you. ⁓ ⁓ Yeah. Aeron Alberti (03:46) that is the way of life. And so it's like the reality just hasn't hit. It's going down. I mean, we thought it would never go down because why would we think that? It's been going up for what, 15 years, you know? So it's, there's also some weird stuff though, like that I think puts a lot more pressure on this particular area. I mean, let's face it, the administration comes in and he starts running the government like a business. So a lot of dead weight. Jack BeVier (03:47) Thank you. on the problem. Aeron Alberti (04:13) and we were selling houses to lose their jobs, right? We are having big immigrant population. Okay. He's made it clear he don't want them here, right? So whether he's sending them back or not, they're on the run. And so we have a, so that marketplace has been shook up. have a of jokers from New York that figured out that Baltimore would be perfect place to get an appraisal that's 50 % higher than what you could actually sell it for. Jack BeVier (04:17) Disrupted it. ⁓ Aeron Alberti (04:39) And so we have the Baltimore scam, right? That which, you know, also everything starts in Baltimore in the big city. then it kind of, it, it, you, you feel ripple effects in the counties from that, right? Like it's next thing you know, you know, well, I'm not going to buy in Baltimore, but I'll buy in Baltimore County. I don't know Baltimore County has the same name. And so let's do Hartford County. And so it's, you, have all of these, uh, so maybe the news is right with their one. Jack BeVier (04:40) You know. Yeah. ⁓ Aeron Alberti (05:09) in Kansas. I don't know about Kansas, but I know that here in Baltimore we've had a lot of challenges that have, and of course you have higher interest rates than people expected. We've had all the reasons to send pricing on the retail side down. Now I'm fine with that, if wholesale market comes down. I just care about Jack BeVier (05:25) Yeah, so why is the wholesale market still there, right? Like there's still somebody giving them a bid, right? Otherwise. there just wouldn't be a market there. there's still, we just still sopping up the money and like there's just still enough of it that they're still there. But you think, and then my question is, and you think that they're gonna disappear this year because they're wrong and they're screwing up and now they're gonna go do another non-profitable or losing money flip and then they'll change their behavior and the as is pricing comes down. Aeron Alberti (05:54) You have people that talk to me and you that are here every day that are telling you how it really is. And those people are buying based on that information. And then you have people that are, you know, unfortunately are buying based on the news and those wholesalers are still selling those people. There's people buying bad deals because they're misinformed, you know? And so, so why would the wholesalers drop their price when they can still sell it to a guy? Now, me personally, I want to continue Jack BeVier (06:19) and then get it off. Aeron Alberti (06:22) my lifestyle. So I need to make. it's a I'm past the educational period. I'm not going to just buy it because I'm looking forward and I don't want to tax write off. What I want is something to pay taxes on. And so there is I may be in a different boat, but I can't. Maybe I'm a little bit more conservative than the guy that's just coming out of the gate, one of the education and and and so there are people that these whole stores can still sell to, but they're going to thin out. And I've noticed it already thinning out a little bit. Like a lot of these wholesalers have obviously cut back on their marketing budgets and they're out of money. But the wholesale market has always lagged behind. Even in the good times, it lags behind. When it's going way up the retail side, you can still catch that wholesaler that thinks it's in. Jack BeVier (07:05) Yeah, thinks it's yeah thinks it's a 200 even though you know, gonna get off a T20 valuable Aeron Alberti (07:10) very optimistic about our industry in the near future. Jack BeVier (07:13) What do mean by that? Say more there. Aeron Alberti (07:15) I'm just optimistic. One, believe that the, well, I think our industry is thinning out. So the less competition that's, it makes it easier to do business when you have less people trying to take your business, right? So I think, and I also believe that the wholesale market will catch up and we'll just get to some stability. I when you have volatile stuff, like way up and way down. It's great when it's going up, but it really sucks when it goes down. That's how volatility works. But if you really are in it for a long haul, you just want stability. So if I know that that house is going to sell this weekend at 250, I just know I need to buy it at this number. Stick to my number. Does that mean I lose the deal? Maybe right now, but at some point that guy that pays what we were paying, let's say he's paying 180 for that, he's going to be stuck on that property. it's going to eliminate some competition and eventually the market will even out to where the people that are doing this for real are going to be fine. Who cares if it's worth $250 today and it was worth $350 ⁓ six months ago, you just need to buy it at the lower number now. That's the only difference. You just have to adjust your buying. Jack BeVier (08:24) So you you do you expect to do do you expect to do fewer deals this year than the last couple with that perspective? Aeron Alberti (08:30) I do, I do. Like if you look at, you know, February at this time over last year, I I bought like 20 houses in January of last year. I've got a much smaller pipeline than that. So I'm trending it lower, but look, I'm as ambitious as I've ever been. If I find a good deal on buying it, but I do expect to do less deals. And like my focus right now, because there has been a correction. I don't think this is a big depression or recession. I think it's a correction is the best word for it. I'm kind of correcting some of my own mistakes and instead of, when things are good, let me jump around. When things are good, you want to focus on volume. Cause everything's good. Just buy as much crap as you can, put as many systems in place, get as much paint on the wall as you can. Cause it's going up, you can't lose, right? It's just when things are like this, whether they're either declining or even stable, you want to, I'm looking at, okay, what did I do right? Jack BeVier (09:12) I'm not really saying this, but Aeron Alberti (09:18) And let's hold on to that. And then the stuff I'm doing wrong and some of the, I'm not taking the same risks because I, I do very well. I made, how do I say it? Let's just say I make $50,000 a month and I flipped four houses, making 50,000, 50,000, 50,000 on three of those. And Jack BeVier (09:25) I... Aeron Alberti (09:40) then the one I lose, those aren't very good numbers. Now you're at 10, 12,000. Jack BeVier (09:41) Mm-hmm. Mm-hmm. Mm-hmm. Aeron Alberti (09:47) for the fourth, right? How can you eliminate that hundred? Because if you eliminate that now, you went from four to three, okay? But if I can eliminate that $100,000 loss, that's a really good month, Those three. So what did I do right on those three? And what did I do wrong on this one? Well, I took a higher chance on that one. Well, stop taking that chance. know, wait around for the three. So quality, I mean, I don't really know. Jack BeVier (10:04) Yes, it is down. ⁓ Aeron Alberti (10:13) you know, the metaphors to use, I'm, I'm, you're in times like this. I'm really looking for quality as opposed to quantity. And so, yes, I think I'll do less just because of that mindset, right? But there may be a time, let's just think, let's just say some wild stuff happens and we see some, uh, appreciation going wild and we can kind of predict some appreciation. I'll jump back in in two seconds. You know what I mean? And start buying it up, you know, as fast as I can. So. Jack BeVier (10:27) Okay. Thank Yeah. Yeah Aeron Alberti (10:39) So I wouldn't, I'm not ready to say I'm gonna do less yet, but I have done less this year. Jack BeVier (10:45) So there's something about your business that I'm also kind of obsessed with very, you know, that I'm jealous of, frankly, the that you've used. You've used the contracting business as a as a lead as a lead flow system as a funnel for deals to to a degree that I think is literally unparalleled. Like, I don't think I have I don't think I have a comp in the country for the way that you've used contracting to be your acquisitions funnel, right? And you've done it in a way which I also feels like very strategic. Like you get a lot of, one of the reasons you don't have contractors that do volume in the investing business is that the contractor's like, well, I'm here to make money, And like, I'm, I, know, so like I need to charge you 25, 30 % margins because that's like the only way that the only reason that I should be in this business is if I'm making 25, 30 % margins. And so the investors are then, you know, Pennywise and sometimes pound foolish and don't hire that contractor and say, Hey, you know what? I'm a sub the thing myself and I'll be my own general contractor. See dominion, right? Like I'm also that's, that is also me. That was exactly the mentality that I used when we decided to go. build construction management in-house was that I need to be competitive on pricing and so I need to control the means of production and I can't get charged a markup on it. And I also wanted the control. So we go and we build that functionality in-house. You've worked with investors that are doing volumes much higher than me and they're completely outsourced to you from this perspective. And the only way that works is if you're not charging those kind of margins, but instead, and I'm like, well, then what the he doing this for? Well, he's running 200 guys. Like, how can he be making any money? And then you buy, and then you do 120 flips and add 50 rental properties and like, hate idiot. And then I'm like, my God, like dude, the machine, just the machine of activity, like, you know, like to use a cliched term, like the ecosystem around Aaron Alberti. of deal flow and then and he's like, yeah, you like my low margin contracting business. I want I you know, I want referrals. I need I need a flip for myself. You want you know you and you've become such a core part of some very talented acquisitions guys businesses that you they have now become your strategic partners on the you know, they're you're you're like, hey, you want a strategic partner on the contracting side? I need a strategic partners on the acquisition side and you can now have a bench. of the Maryland studs from an acquisitions perspective that bleeds into your business. And I just think that that approach is unique. I haven't seen it very much and I think it's genius and clearly it's working. Aeron Alberti (13:26) Yeah, I mean, look, they shake, they probably have conversations with their wives. Like, man, I really don't want to invite these guys to my kids' fifth-year-old birthday party, but they have to, because I might not do their work at cost if they don't, you know? And so it's like, and it really, I mean, we joke around about who has the power in relationships, but they're also writing checks and they're good people to deal with. They're very smart people. I'm selective on who I pool with because it has to benefit me. I also have to benefit them. you know, a lot of those, those names we know about there, they come to the realization that they're better off with acquisitions and they're not trying to, I, and look, I'm terrible with acquisitions. Like you don't want me as your acquisition, Scott, if you think I'm going to sit in there with Brian across the table with, with grandma and listen to how she renovated that kitchen 20 years ago, I can't do it. I'm horrible. Right. So. Jack BeVier (14:07) Mm-hmm. ⁓ Aeron Alberti (14:18) I have no patience for any of that stuff at all. there's people that are just good. Now am good at managing Spanish crews for some reason. I'm good at it. They like me, I like them. I don't know why that is. So all I've done is say, okay, well, it seems like managing Spanish crews is more of a scarce, luckily a scarce skill set as opposed to buying systems off the internet to go get grandma to call you. Jack BeVier (14:20) Thank you. Okay. ⁓ Okay. Aeron Alberti (14:45) And, but, but those guys that we're talking about, they're very good at that too. Very good. Brian, they're good. Right. I'm terrible. So we kind of, the whole idea is to like, okay, how can we both benefit from this relationship? You know, I'll do your work at cost and you're basically a placeholder. So when you send me one of break me off on this deal. So if you're getting eight or nine deals, you know, give me one of them that I can make 50,000 on. And then, you know, make sure you pay for the cost of my guys. Jack BeVier (15:00) No one's got a business. Yeah, no one's got the full package yet. Yeah ⁓ Aeron Alberti (15:13) And we're all like, because without one or the other, we're right. And luckily, there's not a ton of people that enjoy working with this Spanish guy. So, you know, there's more guys that would rather sit with grandma. So that's lucky for me. you know, and that you have to have something wrong with your screen list. And I think a lot of those guys would agree that there's something wrong with me, right? And that's more God given, but. As far as that is right, I figured out the scarce to me. I'm doing something that's scarce and I didn't even know it at the time. I was just trying to work, you know? And then you hook up with a guy like Brian has or somebody like that who might be spending $50,000 a month in marketing to get a handful of deals. Hey, can you give me one of those? You know, and he does it without, let's put it this way, instead of wholesaling it to the guy down the street that brings him no value whatsoever, it's me, you know, like, I mean, You know, I'm not trying to take money out of your pocket. I'm not trying to extort him for a deal. I'm just saying instead of giving it to that guy, give it to me. And now you have a relationship and you know, I preach relationships and people always ask like, how do you get these relationships? Well, here's the secret guys. Do something for somebody that creates some value. I don't want to have lunch with you. I don't care, man. I like eating lunch by myself. Bring me some value, man. like, somebody says, well, how can I bring you value? Jack BeVier (16:23) Yeah, add value. Yeah, yeah. you Aeron Alberti (16:34) Do know how much crap I have to do? Just do it for me for a day. Do my laundry man. Come on up and do my laundry. And while you're doing my laundry, I'll tell you how I built my business up over the past 20 years. But do my laundry for me. You know, like how simple is it? No, no, no. We want to take you to lunch. Let's go to the baseball game. I'm gonna sit there in the baseball game with you for a few hours. I got kids that you know, like I don't sit with them. I'll sit with you. But if you come and mow my grass, without me having to do it. Jack BeVier (16:53) Yeah. Aeron Alberti (17:00) I run my mouth all day long and now get what we have a relationship. How hard and that's all that is with with those guys and we can build off that relationship, you know, and when I'm hurting and you know, I need somebody to talk to it 11 o'clock at night because I'm feeling a little down on myself, know, hey, ⁓ it's by the way, man, like I have I just said on this thing, I put my listen guys, if you're listening, my pipeline is a little low. Jack BeVier (17:18) Yeah. ⁓ Aeron Alberti (17:27) getting cranky, know, up with that too, you know, and so, but that's relationship based over 20 years. takes the right type of person that wants to do to play that game, you know, and to be able to see the value of that. And, and it's, it's, it's everything. And it goes not just with my customers, but also employees. mean, you know, I, it's all of it. It's all relationship based. It's. Jack BeVier (17:28) You India. Aeron Alberti (17:53) You have to bring value somehow. And I see a lot of people, get calls all the time, I'd to take you to lunch and pick your brain. That sounds great. know, well, I'll buy. Now I'm good. I'm good on $30 lunch. I tell you what I really need though, is I've got this pile of trash that I can't figure out how to get picked up. And I'm about to close and pick up a check for $70,000. Why don't you go put that in the back of your Mercedes and get that for me. And I tell you what, we'll talk shop after that. Jack BeVier (18:12) Thank you. Yeah, yeah, yeah. I got 30 for that. Aeron Alberti (18:22) So, and what's crazy is the Bretons of the world and guys like that that have really good relationships with, they, on some level do that. They do it. And it's, and I do it for them. so when they call me and say, can you stop what you're doing and run down to PG County and flip this breaker because the well's off or whatever, I'm ready to do it because they're kind of ready to do that for me. And we have very different personalities. Jack BeVier (18:47) Mm-hmm. Aeron Alberti (18:47) I'm good at what I do, they're good at what they do and it works. And I'm looking for more of it. mean, I, you know, this isn't, you know, there's room for relationships, you know, and they've been able to do businesses they like, you know, he got that, that, that Merrill investor network into a, a profit center because he had the ability to do that while I'm doing this. And I have the ability to, you know, I can do what I want to do. can maybe hang out with my kids or buy more baseball cards, whatever I like to do. Because he's doing that and I don't have to pay for marketing. They're paying for marketing. So my acquisition cost is a lot lower than those guys, even though you could argue that because I'm doing work for free, but if I didn't do the work for free, they wouldn't be able to afford marketing. So it's like a big circle of caring resources. Jack BeVier (19:17) Yeah. Yeah. Yeah. Aeron Alberti (19:36) And the idea that you're going to do this on your own or by yourself is there's nobody in this business at scale. You have partners that we don't share profits, but we're partners. We're a business. Jack BeVier (19:40) it yet. Yeah, you do though, right? It ends up working that like you're able to make deals work because everyone's willing to like take it on the back end, right? Like no one's got their hand out for the whole wholesale fee upfront or the whole general contracting fee upfront, but I'm gonna do what I'm good at and you're gonna do what you're good at. We're all gonna make money flipping houses and everyone sees more money because you de-risked the whole environment by not everybody taking the money off the table on the front, you know, before the flip even happens. Aeron Alberti (20:06) And look. Jack BeVier (20:16) And it's a much more stable business. You're making more money and at less risk because of this approach. Aeron Alberti (20:18) Yeah. That's right. And I think, you know, if you, the worst thing you can do to get me to not show up as a contractor to do your work that you told me to do, because you have the check and I have the tools is to make me feel that way. You know, and if it, you know, it's like, that is, I don't need any more of those relationships. I can, if I advertise on, on Breton's website tomorrow, Hey, I'm ready to do some contracts. I'll get a hundred. I've tried this. Jack BeVier (20:40) Yeah, yeah, Aeron Alberti (20:51) Hundreds of calls what I'm looking for is somebody that says look. This is where I can add value not just By writing you a check and you doing service, but like How can I really make you money? You know all these dead leads over here you want them You know what I mean you get your acquisition guy. I don't time to call I was gonna give me this guy down street, but I'll give it to you, you know I don't know Jack BeVier (21:04) Mm-hmm. Mm-hmm. Mm-hmm. Aeron Alberti (21:17) you know, maybe you're ⁓ somebody I can talk to, I mean, about the market that knows something that's huge value to me. you know, there's lots of ways that value, and I've had even some bigger operations, and the reason I don't like dealing with the two big operations, they do kind of view you as a, like, you're electrician, know, go do this and we'll give you 500 bucks or whatever the case may be. I'm kind of, if I operated that way, I would be poor and most contracts are poor. I don't care even if you market 20 or 30 percent, that intellectual check writer is going to get the better end of that deal at some point, whether it's with me or the guy to pick up truck with this guy. He's going to get the better he's smart. Bottom line, okay? You guys are the last one on that, right? So you're going to get the better end of that deal. So the only way for me to really make money with you is for you to view me as a peer. Jack BeVier (21:42) No. Thank you. Thank you. ⁓ you Mm-hmm. Yeah, yeah. Aeron Alberti (22:09) I'm going to here take this house there and I was going to sell it here but why don't I give it to you and you run with it. If you make money great if you don't you don't and but if but if if you're like hey I just need these 80 sheets of sheetrock on it doesn't matter what I charge you at some point you're beating it because I'm hanging sheetrock I'm not smart enough it's it's just and so I watch all these contractors they'll get out of the investor world they'll say we're gonna do home under stuff. I can get $40,000 for a kitchen, you're only gonna get $10,000 for a kitchen, right? They're going to beat you. I'm sorry, but like, you can't win as a contractor. You can't. It's not, you can get an education, you can do a placeholder. You, to all my contractor friends out there, or living in the trailer park, you need to figure out how to invest in real estate, okay? Because they're gonna beat you, man. Jack Bevere's a lot smarter than you are. Jack BeVier (22:58) Well, also, I just think that that's where the hard work is. I'm just like, dude, if you can do if you can renovate houses like the others, this other this other I take the opposite perspective. I think you're doing the hard work. I think this is much easier to learn than how to go between then then get then talking to a plumber and getting him to show up on time and do good work. And like that hard, man. Like Like it's a skill. I like doing it, but it's also a skill. Aeron Alberti (23:23) But I think what you do is hard. mean, the fact that you can sit there and build a model on Excel, I'd rather cut off my wrist, man. I don't know. don't even know. Like I said, technology's gotten a lot easier. Thank God. I mean, it used to be a lot harder, man. You used to really have to know some stuff. I now you just kind of type some misspelled words and you'll spit it out for me. I love it. Jack BeVier (23:31) Yeah. Yeah. Aeron Alberti (23:43) It used to be nightmarish for me, I'm the type that keeps a phone for five, six, seven years. People are like, what is that? It's like, don't want to try to learn anything. It's so hard. I don't think, and there is a gap between the intellectual investor and the guy swinging a hammer. There's a huge gap and they don't get along. And so I guess we're... Jack BeVier (23:53) It ain't broke. It ain't broke. It's overrated. It ain't broke, you know. Aeron Alberti (24:07) My business is about bridging that gap to some extent. You know, I can, I can talk street level if I need to. know, and time in, just been doing it, man. I just been doing it. you, you know, sometimes I get a little jealous over the guys that are behind the computer that are just kind of making 50 and I am running around with the HR and trying to keep all these Spanish guys happy and all that stuff and get stolen from. the calls you get in the middle of the night and everything. But then I really put it in perspective and I was like, I would hate that. Like, I would hate that. Like as soon as I leave here, as soon as we're done this, I go, you know, I'm out there, man. I'm gonna do something, I don't even know what I'm gonna do, but I'm gonna do something. I can't, I'm not going to... Jack BeVier (24:44) Yeah. Yeah, just sit in there. also, I think that there's like a, I think it's like also just from a, if you're willing to work, which a lot of people are just allergic to work or didn't get into real estate to work, they got into it because someone sold them this like some freedom story. But, ⁓ like you're adding value though, right? Like it's, it's also like, I think those, those ivory tower investors are, they don't sleep very well because they're like, Hey, yeah, I'm making money pushing paper and that's fun because my hands are aren't calloused and like, you know, and that's nice and I didn't have to, you know, get my shoes dirty. But they're also terrified because they know that they're not actually adding any real value, right? Like, and so they're they're they're subject to the market in a way that you're not in my opinion, like I'm like, you're the last guy who will be losing money in the flipping business. Like literally everybody else will go down first. So hey, if the market takes out everybody, well then we're all But you know, I like the risk profile of the business that you've built because I'm like, you'll be the last guy to go down, you know. Aeron Alberti (25:53) Yeah, and I'm hoping we do get to a point soon, and I don't think we're there yet, where, is selfishly speaking, that you're really getting the value from improving the house and getting paid for it. And not just, how can we get grandma to agree to $30,000 less? How can we sell to the stupid money that just came into the market, the 1031 guy that just came into the market that needs to spend this Let's sell it to him as high as we possibly can. And honestly, that's kind of what our business has become. Jack BeVier (26:03) Yeah. Yeah. Yeah. Yeah. Aeron Alberti (26:20) And it's all. Jack BeVier (26:21) I call that all those business models. call those anything, any business model that's based off of asymmetries of information where I know something you don't or vice versa. I know what your house is really worth. I know what this house is that I'm selling you. I know what this house that I'm buying from you is really worth, or I know what this house that I'm selling you is really worth and you're paying a different, and each of you are taking a different number. Those are, that's not, that's not sustainable. Like no, and no one likes it either. Aeron Alberti (26:45) What about like fixing this house up because there's a shortage of contractors that do the right thing and you know The buyer doesn't have to worry about fixing anything up. It's all fixed up and they're basically paying you to do it You know the houses up now, and you know you would hope that the government appreciates it You get a bunch of tax transfer taxes in short period of time. You don't have the eyesore the neighborhood is better It's it's you know we don't get it go down this rabbit hole either, you you would think you get more appreciation for what you do because you are providing a service not only to maybe the person behind the house, but also to society. I like, you know, there are towns where I live that, you know, I'm not trying to look a lot better to me. You know, that's how I sleep at night. I don't know if that's accurate, but that's kind of what I tell myself. You know, I'm like, I remember when this is a bunch of crap here and we fixed this up to where you can walk your kid there. Jack BeVier (27:20) society. Yeah. Aeron Alberti (27:38) You know and not worry about somebody jumping out of that abandoned house actually it's not abandoned anymore and you know and you have all kinds of arguments with that but either way the the If we could get back to it used to be when I first started this business in this business I would go on the internet for what it was worth or an auction site when I had money and I would find a distressed house and I would buy it in the area I wanted to buy it and I would Use the skill set of these guys I have or whatever we'd fix it up and we'd sell it at a Jack BeVier (28:05) Thanks a lot. Aeron Alberti (28:06) that we don't even look at anything. It's all man. It's all like, how low can we get it? How, there's not even real wholesale market. It's, you know, it's how good a smooth talker are you? You know, and I hope that in this down term, maybe we get back to some of that. Like just kind of, we used to live off the banks. The banks would take these houses back. They would put them on the market and that's we would buy. We'd buy them. Jack BeVier (28:07) Business. Yeah. Yay. It was, yeah, that was just the raw materials. Like I took those raw materials and then I went to Home Depot, I bought some other raw materials and then I created a finished product and value was created. Nice and boring, you know, business. Aeron Alberti (28:40) Right. So I believe we're in a correction with all of that. That's my little speculation of real life speculation that I think we might be getting back to that if we get some more inventory out here and that people like me who have figured out how to install a brand new toilet or where an old toilet was will get paid for that. Not just for putting the toilet in, but for the overall picture of investing. Jack BeVier (28:47) Mm-hmm. Mm-hmm. Aeron Alberti (29:05) you know, at the end of the day, people need a place to live. It's a commodity and why we forget that there's a, there's a housing shortage. There's housing shortage. There's, there's less houses than there's people who want housing. It's just, have a, right now there's just a gap on house pricing and affordability. And that will work itself out. Hopefully it'll work itself out sooner rather than later, but it will eventually at some point. Jack BeVier (29:27) Mm-hmm. Aeron Alberti (29:30) this house is gonna get too much for you to handle. It's gonna start caving in on you. You're gonna have to find another place to live that's fixed up. And that house will be ready for someone to fix it up and the process will start. I've been doing it for a while. It doesn't happen often, but probably five times in my career, I've fixed it up a couple, more than once for more members. Like that one again? You know? So I... Jack BeVier (29:32) you Yeah. Mm-hmm. No. Aeron Alberti (29:54) I always think it's interesting when we do that and I try to send like the same guys there if I can. You know, don't be like, look how these people live. Like we just fixed this up five years ago. So that had, was a foreclosure. just, it just foreclosed. We actually did that house in 2020 and I just did it again for a different buyer. So, you know, so I, ⁓ it's same color paint. Yeah. We just touched it up because, you know, we know the color of the paint. Jack BeVier (29:58) Yeah. You see this here. Circle of life. Aeron Alberti (30:20) And so yeah, so that's kind of your little fun things, but yeah, the market itself has been super challenging. I don't think anybody in my world is really set in world on fire. I do think if you're smart right now though, you're putting things in place to the world on fire at the very best. But if you're, there's been a lot of adjustments in lifestyle, a lot of adjustments and let be quite honest, I'm working hard. Jack BeVier (30:36) Mm-hmm. Aeron Alberti (30:45) I don't know, there's been some good times in there where, you know, you're down in Miami and everybody's just kind of working and you're making all this money. know, maybe this hurricane, I don't like the hurricane. Let me get back to Maryland. I gotta get back to Maryland. So I've been working harder and trying to work smarter, making adjustments, being super conservative. Jack BeVier (30:45) Mm-hmm. Aeron Alberti (31:08) deserve of that I've been. And I'm here to stay. want to stay. Like we started this off. I love it. So, you let's, you got to make adjustments. It's, and now's the time not to your relationships up. I think now's the time to strengthen them and do the right thing. You know, I know things are hard, but make sure your creditors are happy. The last thing you want. Jack BeVier (31:10) Yeah. Peace out. Yeah. ⁓ Aeron Alberti (31:33) is an opportunity to come up three months from now, six months from now, and you don't have the resources because the strike got to you and you decide to call your best relationship an asshole or you decide to pay somebody because it was the easier thing to do and you saw a loophole, so I'm not going to pay that guy because what's he going to do about it? I mean, you hear this stuff out here. I'm just not going to pay him. I'm an asset protection genius. Okay. Well, what happens when six months from now when you want to take advantage of my opportunity? Jack BeVier (31:44) Yeah, yeah. Mm-hmm. Aeron Alberti (32:01) because the market's been weeded out. And you go to call that, you think that guy's gonna help you out after you screwed him over. And that guy's telling his friends and I've seen that happen. And there's some of that going on right now in our marketplace where I think there's people who are giving up that don't need to give up. You know, like I think it's a personality. Jack BeVier (32:18) Mm. Aeron Alberti (32:21) Like I think they could, they could wind the storm or minimize the storm and they're not. Jack BeVier (32:28) That's interesting. Yeah, when push comes to shove who just works seven days a week until you get through it, right? Like, who's willing to actually like, do whatever it takes and just suck it up and eat ramen to get through and who's just like, I'm not willing to work for no money. Here's the keys. Aeron Alberti (32:44) That's right. And, and, know, I think we're going to see more of that. and I, I'm like, even in my business, I mean, you're, you're the lending business. You really have to be careful of that. Like you have data on that. I really don't like, so if I go out, you know, I do a lot of things on credit. I, you know, there's people, Hey, they're, they're struggling or whatever. I'll get, let me, I'll do it. Pay me later. That's credit. Right. I can't, You know, I have to be careful. I'm a big personality guy, What happens if this deal goes wrong? Am I holding the bag? Are you holding the bag? That guy holding the bag? And somebody's holding it. And I'm very careful about that stuff. I pride myself on it. I'm going to give it my all. And I see other people not giving it their all. They could have worked, done something. Jack BeVier (33:13) Right. Thank Aeron Alberti (33:29) that would have at least minimized damage. I don't like that. Those are important things that you don't, it's real life stuff that you don't. Jack BeVier (33:32) Right. Right. Yeah, it's super interesting. It's impossible to assess until you hit a down market and it's the first time in 15 years. We haven't seen the stress in 15 years. We haven't seen what people behave like in those conditions because we haven't had these conditions in 15 years. Aeron Alberti (33:47) It's harder. Yeah, so data analysis right now to me is secondary for how I'm operating my business. mean, look, you know, everybody, we're all numbers guys at the end of the day, we like to crank a number out, right? But I've gotten spiritual recently, you know, like kind of, you know, like, and it's been real. Jack BeVier (34:15) Uh, who do I want to just, who do I want to surround myself with? Aeron Alberti (34:19) Right. you know, yes. And is that guy, if things get worse, that guy have my back, you know? And do I have his? from a business perspective, you from a numbers perspective, not, you know. And that stuff's important, though. Do I want to... That kind of stuff has become more important to me than necessarily... Jack BeVier (34:25) Mm-hmm. Thank you. Aeron Alberti (34:39) All right, I've got two guys here. This guy's going to pay me $80,000 to do the same renovation. Jack's going to pay me $70,000 to do this renovation. So many words. Like, do I do the work for? Do I do it for that extra 10 over there? And by the way, man, I really need that extra 10. You know, it's a tough decision. Yeah, I like that. You know, but here's the thing. And I'm sure that guy right now is fine. He'll pay. Everything's good. Well, in a month from now. Jack BeVier (34:50) Yes, yes. Because things aren't easy. So that kind of sounds nice. Aeron Alberti (35:06) things get bad, do I get stuck losing 50 or is Jack sending me another job at 10, another job at 70, another job at 70. So do I want to make that 5,000 nano, 5,000, that predictable 5,000 or do I want to really take a risk and maybe I can make 20 out of that? I don't know about that. that stuff has been more, you know, I've been debating that more than I ever have, you know, like. Jack BeVier (35:18) Yeah. Aeron Alberti (35:31) It's tough sometimes when that that carrot gets dangled, but I just believe that as I've gotten older that relationships and personality morals and ethical character that that I agree with I'm not the judge But I agree with are more important than necessarily that extra five thousand bucks or that And and it's a tough one, man. I'm not saying it's easy, but it's a tough ⁓ Jack BeVier (35:33) Yeah. ⁓ Well, Aaron, really appreciate your time today, And I always enjoyed the conversation. This time is going to fly by and it's already been an hour and a half. So dude, yeah. So hey, thank you so much for letting me steal an hour and a half of your productive day and I'll let you get back out there and keep adding value. Aeron Alberti (36:04) ⁓ good. I'm quite honored. And let me tell you guys, you're not going to meet better people, I've met, you know, deal with Fred here recently and just if anybody, if you can get Jack on the phone for 20 minutes, it's worth it. So go to his lawn or something, you you go play cards or something. That's why I let him win. And so that he'll, you know, he'll talk to me. Jack BeVier (36:30) You Aeron Alberti (36:33) But it's, ⁓ yeah, get involved with people that are smarter than you. And I think that you'll benefit. But to me, it's an honor being on something like this. I look forward to it. I canceled on me three weeks ago. I was so impressed. Jack BeVier (36:46) ⁓ I love it, man. I love it. enjoy this podcast every week because like the opportunity to have kind of like little bit longer form discussions with people whose businesses that I think are exceptional and we get to see a lot of deals and a lot of investors but like the businesses that I think are really exceptional. I've been very, feel very lucky to have been able to. you know, start hanging out with you now count you as a friend and, ⁓ and, frankly, just learn and study, you know, how you've done business and what you've created. think it's incredibly impressive. So thanks. thanks a ton for your time, sir. Aeron Alberti (37:18) Thanks you guys. Jack BeVier (37:19) All right. Thanks, everybody. That's another episode of Real Investor Radio. Have a great week.