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Study Hall: THE BEST PLACES TO BUY REAL ESTATE IN 2023 · Earn Your Leisure

• 0:00
  Speaker 1: Hi.
• 0:00
  Speaker 2: I'm Kristen Bell. And if you know my husband Ax,
• 0:02
  Speaker 2: then you also know he loves shopping for a car.
• 0:05
  Speaker 2: Selling a car not so much. We're really doing this, huh.
• 0:08
  Speaker 2: Thankfully Carvana makes it easy. Answer a few questions, put
• 0:11
  Speaker 2: in your vin or license and done. We sold ours
• 0:14
  Speaker 2: in minutes this morning, and they'll come pick it up
• 0:16
  Speaker 2: and pay us this afternoon.
• 0:19
  Speaker 3: Good Bye trucky.
• 0:20
  Speaker 2: Of course we kept the favorite.
• 0:24
  Speaker 1: Hello other trucky.
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  Speaker 2: Sell your car with Carvana today, terms and conditions applying.
• 0:30
  Speaker 4: If I were looking to make money today, I'd be
• 0:32
  Speaker 4: looking to go into markets where there was a demand,
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  Speaker 4: an unmet demand for apartments for example, rental housing or
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  Speaker 4: single family housing and buying some houses and renting them out.
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  Speaker 4: I'd be going to places like Fort Worth, Texas, Dallas, Texas, Nattisdale, Nashville,
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  Speaker 4: you know, I think, you know, I think Jacksonville, Tampa,
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  Speaker 4: you know, Tucson, Arizona. I mean places where it's tax friendly,
• 0:59
  Speaker 4: high quality life, and more businesses have moved there. One
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  Speaker 4: of the things that's going to happen and is happening now,
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  Speaker 4: especially with remote working, is the businesses are relocating out
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  Speaker 4: of places like Chicago, out of New York City out
• 1:13
  Speaker 4: of DC, for example, as well, because and out of
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  Speaker 4: LA because taxes are so high. Yes, and so they
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  Speaker 4: can save a significant amount of taxes. If you're in
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  Speaker 4: an environment where a tax rate thirteen percent, you go
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  Speaker 4: down to Miami, you get better weather, and it's zero
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  Speaker 4: local income tax, a state income tax.
• 1:30
  Speaker 1: Let me ask you this. As far as you know,
• 1:32
  Speaker 1: we talk about real estate a lot on our platform,
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  Speaker 1: how to invest in real estate, but we don't only
• 1:37
  Speaker 1: talk about real estate development too much. And there's nobody
• 1:40
  Speaker 1: talk about that better than you. So somebody's interested in
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  Speaker 1: becoming a real estate developer, what steps should they take? Like,
• 1:47
  Speaker 1: what advice could you give to somebody that's interested on
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  Speaker 1: the development zone.
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  Speaker 4: I mean one of them, I would say, become a
• 1:53
  Speaker 4: student of the business. Learn the business, learn the fundamentals.
• 1:56
  Speaker 4: What I learned about where I got started was I
• 1:58
  Speaker 4: started as a sales agent, so I understood how to market.
• 2:01
  Speaker 4: I learned how to market, and then I became an appraiser,
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  Speaker 4: so I learned how to estimate value. So if I
• 2:07
  Speaker 4: figured if I could estimate value, I could go out
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  Speaker 4: and create value. And so those are the things that
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  Speaker 4: you know. You get started by learning the fundamentals of
• 2:17
  Speaker 4: the business. You don't have to be an you can
• 2:19
  Speaker 4: be a contractor too, but you don't have to be
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  Speaker 4: an engineer. You don't have to be a finance major.
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  Speaker 4: You can understand the basic fundamentals of real estate, which
• 2:28
  Speaker 4: is marketing and understanding value. And you make your money
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  Speaker 4: in real estate going in when you buy real estate,
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  Speaker 4: you make the money then and you realize your profit
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  Speaker 4: which you bother that, yeah, exactly, and then you can
• 2:40
  Speaker 4: go in and create value. So with development is all you.
• 2:42
  Speaker 1: Talk about that as far as making your money on the.
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  Speaker 4: Front, absolutely, So you want to buy if you think
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  Speaker 4: about this, imagine real estate is a twelve hour clock.
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  Speaker 4: The ultimate time to sell is twelve o'clock. So from
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  Speaker 4: about one o'clock until four or so, you want to
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  Speaker 4: be kicked back in a spectator then around four, so
• 3:03
  Speaker 4: you start looking for the opportunities and then you start buying,
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  Speaker 4: and you buy all the way up to about nine
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  Speaker 4: o'clock and then at that point you start looking to sell.
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  Speaker 4: So if you buy and you want to buy when
• 3:15
  Speaker 4: fewer people are buying and it's.
• 3:16
  Speaker 1: Hard to buy, what time are we at right now? Oh?
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  Speaker 4: I think that we're probably at about three o'clock at
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  Speaker 4: three o'clock three, And look, I think that the thing
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  Speaker 4: is is that there's opportunities everywhere. So I remember back
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  Speaker 4: in nineteen ninety one ninety two, during the junk buying crises,
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  Speaker 4: you know, banks were failing, they were closing. In nineteen
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  Speaker 4: eighty nine, there were three hundred and some odd banks
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  Speaker 4: closed in one year, and then in nineteen ninety another
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  Speaker 4: three hundred banks closed. So they were liquidating all kinds
• 3:54
  Speaker 4: of assets. So I started buying assets in downtown DC,
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  Speaker 4: and I was buying stuff twenty cents on the dollar
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  Speaker 4: or so. And my view was, I didn't need all
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  Speaker 4: kinds of you know, scientific charts. I didn't need any
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  Speaker 4: kind of real calculation. I felt that the nation's capital,
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  Speaker 4: of the most powerful nation in the world would come
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  Speaker 4: back at some point or the money wouldn't be worth
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  Speaker 4: anything anyway. So I loaded up and bought everything I could,
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  Speaker 4: and that twenty cents on the dollar. When I started
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  Speaker 4: selling at eighty cents on the dollar, nine cents on
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  Speaker 4: the dollar, I was making four or five times what
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  Speaker 4: I paid. And if you leverage it, then you're making
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  Speaker 4: you know, six hundred times what she made.
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• 7:26
  Speaker 6: Pleas flapping out for that. I have a two parter
• 7:29
  Speaker 6: for you. I'm sure the audience wants to know. Number one,
• 7:33
  Speaker 6: what are the five cities in case they missing? Because
• 7:35
  Speaker 6: I'm sure if somebody was on Instagram sending a DM
• 7:38
  Speaker 6: chant that this should be here, right. So what are
• 7:40
  Speaker 6: the five cities you would have us invest in? And
• 7:42
  Speaker 6: let's say hypothetically I had like five thousand amazing friends,
• 7:45
  Speaker 6: double investors. How can we put our money together to
• 7:49
  Speaker 6: get in some of these commercial deals so we can
• 7:51
  Speaker 6: build wealth together.
• 7:52
  Speaker 4: Well, I think the first thing is where I would
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  Speaker 4: be investing. Is I like Florida because it's got strong fundamentals,
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  Speaker 4: no state income taxing economy and a good quality of
• 8:03
  Speaker 4: life overall. So Miami's very stimulated. So you got to
• 8:08
  Speaker 4: look beyond that. So what are the emerging cities in
• 8:10
  Speaker 4: Florida and that's Jacksonville and Tampa. Those are the two
• 8:13
  Speaker 4: strongest markets in that PA.
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  Speaker 6: Write those down.
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  Speaker 4: Then if I were going to go Texas, great fundamentals,
• 8:19
  Speaker 4: no state income tax, decent, pretty good weather overall, and
• 8:23
  Speaker 4: very business friendly. But Austin has been on fire. So
• 8:28
  Speaker 4: where do you go. You go to Dallas and you
• 8:29
  Speaker 4: go to Fort Worth. Those markets are still you know, growing,
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  Speaker 4: and they're underserved.
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  Speaker 2: Uh.
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  Speaker 4: And then Arizona, Scottsdale, Phoenix has always done very well,
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  Speaker 4: Tucson sleeper. I'd go there, and then Nashville and Memphis.
• 8:44
  Speaker 4: No state income tax in Tennessee quite as it's kept
• 8:47
  Speaker 4: and uh. And then you know, look, I'll tell you
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  Speaker 4: how strong state in no state income taxes are. When
• 8:53
  Speaker 4: Jeff Bezos started Amazon, he did it in Seattle, Washington.
• 8:58
  Speaker 4: Bill Gates always stayed of residency Seattle, washingtcause Washington State
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  Speaker 4: has no state income tax. But those would be the
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  Speaker 4: markets that I would focus on. And I would look
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  Speaker 4: real hard at LA because I think that LA bounces back.
• 9:08
  Speaker 4: It's a resilient market. It's you know, it's a it's
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  Speaker 4: got an industry that is going to run in perpetuity.
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  Speaker 4: The entertainment industry and it's got technology, and then New York.
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  Speaker 4: But I would say New York is real early right now,
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  Speaker 4: so I'd be waiting on New York. And look, I
• 9:24
  Speaker 4: think that you know, one of the things that we
• 9:26
  Speaker 4: have been looking at is how do we empower people,
• 9:31
  Speaker 4: especially people of color, to be able to reap the
• 9:35
  Speaker 4: benefits of economic growth through real estate on a larger scale.
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  Speaker 4: And just to give you a sense, this analogy I
• 9:44
  Speaker 4: gave where I put up the twenty million and a
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  Speaker 4: Goldman's access someone put up one hundred and eighty to
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  Speaker 4: do a five hundred million dollar building. Well, our buildings
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  Speaker 4: generally are going to make somewhere of about forty to
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  Speaker 4: fifty percent return on cost. So say that it made
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  Speaker 4: fifty percent return on cost after we developed it and stabilized,
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  Speaker 4: that's two hundred and fifty million profit. Well, the way
• 10:07
  Speaker 4: that would work is that we'd get about half that,
• 10:09
  Speaker 4: So we would get one hundred and twenty five million
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  Speaker 4: on that twenty million dollar investment. And so you can
• 10:15
  Speaker 4: do the math on that. It's over a six hundred
• 10:18
  Speaker 4: percent return on our money. So that's all about leverage.
• 10:22
  Speaker 6: So no clapping up for that because six hundred percent
• 10:26
  Speaker 6: return is incredible. I know most people think there are
• 10:28
  Speaker 6: not a lot of big gangs in real estate, but
• 10:30
  Speaker 6: thank you for mentioning that.
• 10:31
  Speaker 4: Yeah, so so it used to be back in the
• 10:35
  Speaker 4: nineteen eighties, real estate. Commercial real estate was powered, especially
• 10:40
  Speaker 4: office buildings and hotels, were powered by real estate syndicators.
• 10:45
  Speaker 4: So real estate syndicators would go out and buy an
• 10:46
  Speaker 4: office building, chop it up into one thousand pieces, and
• 10:50
  Speaker 4: sell it off in pieces, and the investors would get
• 10:53
  Speaker 4: the tax benefits from it, and then they would get
• 10:55
  Speaker 4: the rent income and the appreciation. When the banks all
• 10:59
  Speaker 4: failed in the late eight early nineties and the tax
• 11:03
  Speaker 4: law was changed in nineteen eighty six to take away
• 11:06
  Speaker 4: those depreciation rights and so forth, the syndicators went out
• 11:10
  Speaker 4: of business essentially overnight.
• 11:13
  Speaker 6: My graduates from my school being forced bad drop bag
• 11:18
  Speaker 6: drop my drop bad drop drop.
• 11:32
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