Jason Hartman starts today’s episode discussing the recent World Economic Forum with economist Thomas Young. Specifically, they look a bit at the Happiness Index that they were discussing at the forum and whether that should hold any muster for us. Then Jason has a client case study with Eric Payne. Eric started investing in single-family housing around 2010 and has steadily added to his collection. Today he has 18 units and is looking to substantially add more when he finishes the sale of his current business. Jason and Eric go over Eric’s journey, why he chose to use real estate to achieve the financial freedom he desired and the beauty of the 30-year fixed-rate mortgage.
Investor 0:00
Working with the local market specialist went really well. I feel like I was able to get the type of property that I wanted and happy with with the price and the rehab job and the
Investor 0:13
tenants have gone well.
Announcer 0:17
Welcome to the creating wealth show with Jason Hartman. You’re about to learn a new slant on investing some exciting techniques and fresh new approaches to the world’s most historically proven asset class that will enable you to create more wealth and freedom than you ever thought possible. Jason is a genuine self made multi millionaire who’s actually been there and done it. He’s a successful investor, lender, developer and entrepreneur who’s owned properties in 11 states had hundreds of tenants and been involved in thousands of real estate transactions. This program will help you follow in Jason’s footsteps on the road to your financial independence day. You really can do it and now here’s your host, Jason Hartman with the complete solution for real estate investors.
Jason Hartman 1:07
Welcome to Episode 1117 1117. This is Jason Hartman, your host and thank you so much for joining me today. I have our in house economist Thomas young with us today. He was a economics professor. And now he has his own company econometrics and we are discussing Davos. Yes. Davos, the World Economic Forum. I have to confess to you listeners, this is one of my bucket list items. How nerdy is that? That my bucket list item is to go to the World Economic Forum in Davos, Switzerland, and hang out with the elitist the globalist economist that’s on my bucket list. Yes, I know it’s a little bit nerdy. It’s a little bit odd. But I want to go to Davos so if any of you can help me do that, I would pay very good. dearly to check that item off my bucket list. I’ve checked quite a few off already 81 countries and counting, I will get to 100 here eventually. So there’s a bucket list item for you. Okay, we’ve got meet the masters of income property coming up in March, be sure to register for that at Jason hartman.com slash masters. It is going to be an awesome event. We’ve got a couple of guest speakers, we’re going to be announcing soon. But this time, we are trying to include a little bit more of our own content. We get great evaluations on our events, people love our events, hardly ever Is there a negative evaluation, and if there is, it’s always because of a political difference, because we do have a few people that come that just don’t know what’s going on. Anyway, one of the suggestions we had from a few people from last year our last big event where we had ron paul as a keynote speaker and we had many other big name speakers, as many of you know who attended his thing. Want a little more Jason time? So hey, we’re going to give it to you a little more, Jason time coming up. Not Not as many speakers, but we will have some great, very well known guest speakers that we will be announcing very shortly. We’re just waiting for some contracts back. And then we can make them official. Hey, Thomas, let’s talk about Davos, Switzerland. What happened at the World Economic Forum this time, besides all of these wealthy hypocrites, flying more private jets than ever, and then talking about the dangers of global warming and high carbon footprints. I guess that doesn’t apply to them, right?
Thomas Young 3:37
Yeah, apparently not. Let’s say the the big three that made Davos a big hit last year were missing. Trump who and Gee,
Jason Hartman 3:47
that’s kind of amazing that those three big big names didn’t show up. I mean, wow. Speaking of Trump is Trump kind of just dissing the global establishment to some extent, I mean, this person It is so different, you know, he doesn’t go to like, press What does that annual Press Club event they have the White House Press Club dinner, you know, he doesn’t go to that he doesn’t eat. He really is an outsider, isn’t he?
Thomas Young 4:11
He’s definitely not a globalist. Or, you know, it doesn’t appear in it that way. No, not at all.
Jason Hartman 4:16
Not at all. And he just the Koch brothers to these the republican Koch brothers that you know, have the billions of dollars to support the party. He just said a, their brand of republicanism is out of style.
Thomas Young 4:28
It’s kind of amazing. I didn’t hear that one.
Jason Hartman 4:31
Yeah, yeah. That was a few months ago in the news. But anyway, Davos, the government’s back open for business again, I don’t know if that’s good or bad, but I guess it’s good. What about Davos?
Thomas Young 4:41
Yes. So they went over some relevant topics. And the one that I found most interesting was the basically a happiness quotient for GDP. We had a report more frequently, what happiness is the night? I don’t find it that much useful, but
Jason Hartman 4:56
I’ve always found those indexes interesting. Happy quotient, you know, and they’ve tried to measure the happiest places, the happiest countries on earth and so forth. And I think that is a really, really tough one. But what did they say at Davos about it?
Thomas Young 5:13
So on the happiness quotient related to quarterly GDP figures, and the thought came to me GDP is coming out this week for the fourth quarter. And you know, the third quarter was quite good at 4.2%. And the second quarter was above 3%. The general consensus is that GDP will come in a little softer, the stock market perform poorly in the fourth quarter and business investment might have been weak, but retail spending was real strong. So there’s a chance that could still come in fairly strong.
Jason Hartman 5:48
Yeah, well, we’ll see. But back to specifically Davos, so that’s the US GDP. The happiness index does not connect GDP to happiness. Right, is that the basic premise? You know, you can be a wealthy country, you can have great productivity. But that doesn’t make you happier, right? That doesn’t make the population happier. Is that kind of the point of the happiness index?
Thomas Young 6:13
Yeah, that’s the point. So for I guess, when I try to apply it to say, the United States versus say Kenya, you know, Kenyans may say they’re happy. And then maybe Americans may say they’re not as happy. Although Americans typically report higher happiness. It is generally connected with GDP growth. So when GDP growth or GDP per capita is higher, countries typically report higher happiness.
Jason Hartman 6:42
Yeah, interesting. And you know, these Scandinavian countries always seem to perform pretty well in this happiness index. You know, this is a long topic. Maybe I’ll do a 10th episode show on it. And I believe two things and they sound contradictory about this. But Dennis Prager on his show. He would do something called the happiness hour when you know, on his radio show, at least in the old days, I don’t know if he still does it. His premise is that happy people make the world a better place. And I agree with that. But the contradictory concept is that I don’t think happiness is the meaning of life. I think that happiness is a byproduct of being a productive member who is serving society serving mankind, and it has a mission, the sort of the New Age mentality of, Oh, you know, don’t do it unless it brings you joy. And this gotta be happy, happy, happy. That just to me, just reeks of selfishness. Just don’t like it. You know, like these people that will, you know, will avoid a confrontation because they don’t want to get upset and ruffle their feathers. I mean, imagine if Gandhi was like that. Imagine if my Martin Luther King was like that. Imagine if Winston Churchill was like that, imagine how the world would be if just those three figures, you know, I could list 100 more, of course, had that attitude, you know, if they were selfishly looking out for their own happiness, you know, history would have been terrible, it would have been completely different. So I don’t know this happiness and backside and I don’t know how much stock to put in that you think I’m crazy argue with me?
Thomas Young 8:30
It looks to me when I look at the happiness next numbers that are out there now that the easiest way to improve happiness would be to make the world colder,
Jason Hartman 8:37
colder. Tell us about that.
Thomas Young 8:40
So the the countries that are colder, like you said, the Scandinavian countries or Canada, they’re cold, they require higher happiness. So you know, there’s this idea that the key to happiness is just to have low expectations. Well, I guess two things to make the world happier, make the world colder and have low expectations.
Jason Hartman 8:59
Okay, well This is a causation. That’s, you know, obviously I know you’re I know you’re joking, okay? Because I mean in cold climates that tend to be these cold, dark climates, they have high suicide rates, they have high depression rates. Sad, which is an acronym for seasonal affective disorder, talks about how people in these gray dark, dreary climates become depressive, which, you know, I think that’s a legitimate thing. You know, sunshine places, are kind of a happier environment, but let me make a different connection for you. And that’s the evolutionary connection. And this is an old theory, it’s not my theory. I’m simply the messenger here. So I don’t need to get a bunch of hate mail on this. Okay. If you disagree, it’s not my idea. I’m just repeating an idea, okay, is that the equatorial type countries that are the sunniest and the warmest, you know, it’s sort of easy to survive in those places. So, throughout history, you didn’t have to be as productive if you will, in terms of hunting, he didn’t have to work with members of a community to survive as much and and so there’s an argument and I’ve heard it, you know before that, that’s why you see the colder countries or the colder regions on earth being more productive. Another theory that I sort of add on to about that I remember when I was in ninth grade, I was shipped from Los Angeles where I was in junior high school to go live with my grandparents in upstate New York on a dirt road for three months. And Thomas, I could not believe how much more difficult it was academically to keep up with those kids in New York. Okay, now, this was not New York City. Okay, a bastion of intellectual realism. Okay, this was upstate New York, in the middle of nowhere, it Letchworth Central School. Okay, look it up, folks. You know, where one of the big majors people had was agriculture and was in school with a bunch of farmers. But my theory there is that in warm climates, you know, people are outside, they’re enjoying life a little more they’re on the beach in cold climates, you know, you tend to be more inward thinking, and you might sit inside and read a book, right? Get a little smarter. So I don’t know, is that is that theory legit? What do you think
Thomas Young 11:23
that makes sense to me? There’s, I don’t know this, this debate about what causes happiness and what do you make of it?
Jason Hartman 11:31
Well, money plays a part in it. Okay. And there are some, I think, very good studies about that. Showing that, you know, money does make us happier to a point it definitely it has a bearing on happiness. And in the US, and of course, you have to adjust this for where you live and for inflation. Now, this was, gosh, I want to say 20 years ago, I remember reading this article. That was a very big study with lots of people. about money and happiness. And at the time, you know, you’d have to adjust it for location where you live, because the real estate prices and the price of everything varies so much. So you have to adjust the net worth for that and for inflation, but at the time, they said, People get, they definitely get happier, up until their net worth 20 years ago and adjusted for location was about 1,000,005 over 1,000,005. no correlation between, you know, if you had 100 million dollars, you weren’t necessarily happier than if you had 1,000,005. Right? But 1,000,005 now adjust that for inflation from 20 years ago. And adjusted for where you live. If you live in a low cost place. 1,000,005 will be up to you fairly well adjusted for inflation. But if you live in New York City, you got to have way more than 1,000,005 adjusted for inflation, okay. So if you live in Los Angeles or Seattle or San Francisco or any of these hyper San Diego any of those, you got to have way more money than that adjusted for inflation but I think there is a point to that right? What do you what do you think?
Thomas Young 13:08
Yeah, I think this is the exact debate will have in during the 2020 presidential campaign. Cortez the New Jersey representative
Jason Hartman 13:17
that you mean that’s the communist Yes.
Thomas Young 13:19
Yeah, that is the executor point a wealth tax and she says it doesn’t make them happy doesn’t make wealthy individuals happier. So let’s tax it.
Jason Hartman 13:28
Yeah, well, that’s gonna make them unhappier. I can tell you that much. The money may not make them happier, but the tax will make them unhappier. That is no question about it. She’s out of her mind. boy, boy. Well, Thomas, um, we’re gonna do another episode this week on Davos and talk about it in more detail. What else are we going to cover when we talk about that?
Thomas Young 13:52
Oh, yeah. So artificial intelligence and the impact on jobs, climate change. There are good amount of discussions on What some advocates think need to be done on climate change? You know, the geopolitical situation is? I don’t know. Are we entering a new Cold War? That’s
Jason Hartman 14:12
yeah, that’s pretty that’s pretty scary. You know, I want to think that we have a peaceful Russia and a peaceful China due to Russia’s change, obviously back in 1989 1990. But, you know, with China, I mean, trading partners, even if there is reduced trade through trade war and tariffs and such, I mean, trading partners, you know, they can’t be in a Cold War together. Can they? Is that even possible? Yeah, there’s the
Thomas Young 14:43
hell am I drawing a blank it’s a flat world a flat world
Jason Hartman 14:46
though it Thomas Friedman argued. Yeah.
Thomas Young 14:48
Thomas Friedman. countries tend to get along real well, when they when they both have McDonald’s in
Jason Hartman 14:54
Yep, yep. there there’s a metric Yeah, Thomas Friedman has some definitely good points in the World is Flat. But he’s also way off on some things, hey, I did the inflation adjustment while we were talking. And I took 1,000,005 in 1995 is basically 2.5 million today, or 2017. So if your net worth is $2.5 million, and you live in a reasonably low cost, linear or hybrid real estate market, not the expensive markets in the northeast South Florida, or along the west coast of the US, then you should be very happy if your net worth is 2.5 million or higher. Okay, if you live in one of those expensive markets, you gotta adjust up and have more money than that to be, quote unquote happy according to this article, and that big study that I read many years about 20 years ago, so there you go. Interesting stuff, China, we’re going to talk about their slow down their terrible 5% growth. We’re going to talk about, you know, current expansion corporate defaults. and few other things here coming up on the next episode, right, Thomas? Yeah. All right. Hey, thanks for joining me for the central portion. Today we got to get to a case study here that I think you’ll find interesting guy who’s doing a great job with his real estate portfolio. And here you go. Join us March 23, and 2014 for the 2019 meet the masters of income property. Let’s break this down and look at some of the strengths of income property. As an asset class, I found that this event is really helpful because I am totally
Eric Payne 16:31
a newbie to real estate investment. And so I picked up so much information. One of
Jason Hartman 16:36
the great things about it is that it’s so fragmented, right? embrace the fragmentation. actually been learning a lot about the tax benefits to real estate and a lot of I’ve been investing actually well over 10 years now, and I learned a lot of new things today.
Eric Payne 16:56
The other advantage of this weekend is networking. meeting new friends. property managers meeting new
Eric Payne 17:01
area specialists and seeing
Eric Payne 17:03
the product they have to offer that changes here by you. Register now with Jason hartman.com slash masters.
Jason Hartman 17:10
Hey, I wanted to talk to you quickly about another case study. And this is a good one. I met Eric pain just a few days ago here at the capitalism conference, and we started talking about his interest in real estate and we were having a little breakfast. Eric, how are you? doing? Good. How are you? Jason? Good. Good. Where do you live? I live in Lexington, Kentucky. Fantastic. And what got you interested in real estate and what’s your background? Do you have an e commerce business? right? Correct. Yeah, you sell Office products, I believe.
Eric Payne 17:38
Yes, that’s right. Okay, fantastic. And so what got you interested in real estate and when did that all start? Honestly, I always wanted to be one of these guys that flips houses like you see on TV and it was really sexy back then. Right. And so once I started doing my research, once I got out of college, got the job and engineering and had a little money were actually could start doing that I started researching it and realized that there’s this huge taxes to pay with capital gains when you flip, right? And so, flipping is overrated. Right. And so I started listening to some content at the time and realizing that rental real estate is really the way to go. Fortunately, the timing worked out very well for me because I started working full time as an engineer at the beginning of oh eight. And then what kind of engineer civil engineer. Fantastic.
Jason Hartman 18:31
And by the way, listeners, I want to mention we are at a conference here we’re at the capitalism conference cap con, as it’s known in Dallas, Texas. So sorry about the background noise, but it’s a little noisy here, but go ahead.
Eric Payne 18:41
Yeah, so the timing was just really in my favor, because the first one that I bought was in 2010. And I bought what would probably be a $95,000 house if it wasn’t for the crash for $58,000. And I was able to get a second mortgage on top of you know, These foreclosures that I was buying cheap, and kind of domino effect the next properties that I got and collect them fairly quickly.
Jason Hartman 19:08
You know, I was amazed we were selling so many foreclosure properties during the Great Recession, and one amazed me maybe more than any other. I remember this property very specifically. And I am still totally disappointed. I didn’t buy it myself. It wasn’t like that big a deal or anything, but it just was sort of emblematic of what was going on during that time. It was in Charlotte, North Carolina. This house was never lived in. It was essentially a brand new house, but it had gone into foreclosure. Right after the person purchased it. And I guess they never rented it or did anything or never moved in or whatever. They just lost it. And it was for sale. And it was like I don’t know, you know, you’re talking about buying under market. I think this was like $35 a square foot. It was a brand new house. Yeah. But it was a year old but it was never lived in right. So yeah, it was just amazing. And, and, you know, we sold that property to a client. I’m not Perfect client is listening right now. But I wish I bought that house. Right? You got Yeah.
Eric Payne 20:04
Yeah, I mean it, it was an amazing time and right now, so since I Live in Lexington, Kentucky, there still a few deals to be had. But you have to really find them or be networked with the wholesalers and
Jason Hartman 20:19
right and it’s not like before, you know, right. But you know, the thing is look at everybody uses that as a reason to invest, right? We all do this as humans, you know, we all want to buy at the bottom of course, and you can never really time it. I mean, during the time you were buying, well, when did you find my podcast? And when did you learn about my work?
Eric Payne 20:39
Sure. I found that not long after my engineering job, it started and I was just, you know, really enamored with the whole real estate and and being able to create a passive income for myself, right. And so I just found you by searching you know, rental properties, real estate, whatnot, and you You are, you know, an early adapter there. I was early in the podcasting world, right. So there wasn’t a ton of people. So of course, you showed up pretty quick and I just started listening and, and you’ve always put out a ton of content. So it was just more fuel to the fire back then, you know, good, good stuff. But back to
Jason Hartman 21:18
that other thing we were talking about, you know, back then when you were starting to buy, you know, you’re recently out of college, you started young, that’s fantastic, by the way really, really impressed with that. You know, you had your job as a civil engineer, and you thought, I don’t want to be a slave probably anymore. I’m guessing that’s what you thought, right?
Eric Payne 21:36
Yeah. What’s funny is you hear a lot of people talk about like hating their job climbing the corporate ladder. They’re not passionate about politics, you know, people backstabbing. Yeah, so for me, I actually liked my job. I enjoyed it. I liked the people that I work for. I just, I realized pretty quickly that $1 an hour raise is not going to get you very far. You know? Yeah, I just realized that if I’m going to create wealth for me, then it’s up to me, not my employer. Yeah,
Jason Hartman 22:06
very good attitude. Very good attitude. So when you started investing, and this is the fundamental thing, because people I think, really sabotage themselves by trying to time the market. Okay. So when you did it, we were in a huge recession, the Great Recession, right? The second worst economic time in the US in the past hundred years, right, you know, maybe more than 100 years, really. So we had the great depression that started in 1929. Then we had the great recession that started, I say, in 2007, most people say 2008 Were you scared? Like, were you worried that hey, you know, you’re gonna buy this property and it’s gonna go down in value even more. How do you know
Eric Payne 22:47
that you’re at the bottom?
Eric Payne 22:49
I wasn’t worried about that at all. I realized how good of a deal that these houses were. And I wasn’t comparing is this house that I’m buying for 60,000 dollars going to go to 30. I didn’t care because I knew I could rent it for $700 a month and it cost 350. So I mean, I thought that it would go up, but if it went down, it didn’t matter. And that’s probably the biggest reason that I’m such a fan of real estate. My brother, he’s done very well for himself. Also, he’s a, he sold a startup, he’s a multimillionaire, all his money is in the stock market. And I was texting him a couple weeks ago, you know that dow had the big downturn, and I was like, are all of your stocks down proportionately, and he sent back to mad face? And so stock market, right, and I said, you know, my real estate’s been the exact same dividends it did last month.
Jason Hartman 23:44
Right, right. So I love your philosophy about it. And I don’t know if you got that from my podcast or not. I want to take credit for it if I can, you know, yeah, you didn’t care about the value of the property going up or down, right. It did. matter, but somehow you had this thought that cash flow or rental income was pretty reliable. And you were renting those houses you were starting to buy for just over a 1%. rent to value ratio. Yeah.
Eric Payne 24:12
Why didn’t you think, though that the rent might
Eric Payne 24:14
go down? I’ll tell you this when, when I was closing on my first property, it was a scariest thing ever, because I had never, you know, I’m just into my career. I’ve just got a little bit of money after paying my student loans off, and I’m willing to throw this in on this first property. And I was like, you know, what, if I’m wrong, what if it doesn’t rent for 700? What if it only rents for like, 500? You know, and my thought was, well, your bills are 350. And you might have made a bad investment. You might be breakeven for a few years, but there’s no way it rent for less than 500. So there was really a factor of safety there. I tell people that I invest in opportunities have minimal risk and a huge upset. And that was right in line with that. And it turned out great. That was my first house. And it was the worst house I bought, just because there were issues that I didn’t really know to look for. And it cost money over time. But I ended up selling that house and came out on top by a few thousand bucks on the worst investment that I had ever made.
Jason Hartman 25:24
That’s the worst. That’s fantastic. And I love that philosophy about, you know, look at every investment has risk, everything. And when I was on stage on Monday, you know, I was saying to the audience here that look at you know, if you have your money in the bank, you are for sure losing money through taxes and inflation.
Eric Payne 25:42
Yeah. And I have to also comment and back then there wasn’t a lot of people talking about it. Like there’s tons of podcasts. There’s tons of youtubers today but and I didn’t have a mentor. I didn’t have anyone to kind of like guide me. So I was questioning myself. Am I doing the right thing with this and I was so Scared on that first property, but now, I know exactly what market ran is I know exactly how easy it is to rent things out and my geography right. And I barely have to look at a deal. Yeah,
Jason Hartman 26:12
yeah. You just know now, right? And and you know, that’s another good lesson, Eric, you learn it by doing it right. You know, you can go to all the seminars you want, you can listen to all the podcasts you want. But ultimately, you’re never going to really know until you just dive in and do it and take a little bit of risk. Right.
Eric Payne 26:29
Right. And you know, it’s great. I’ve referred several several people to your website, because like, I was just talking to one yesterday, because I have an Amazon business and many people here do, and they’ve been very successful. And people are always wanting to put whether they’re sailing or just have large amounts of cash flow. They’re wanting to invest that right. And, you know, the guy that I was talking to yesterday lives in California, and it’s hard, in some cases to get
Jason Hartman 26:58
lots of cash flow right? It’s impossible in California, right.
Eric Payne 27:01
And there’s there’s tons of geographies around the US where that’s also the case. It just isn’t great cash flow. But what you’ve done is allowed people in California to invest in markets where you can reach the 1% rule. Right? Yeah. And 7% rent to value ratio. Yeah. So since you’ve got these rental property set up in local markets and establish relationships with property management, etc. I mean, that makes it possible for for guys or gals that live in California or New York to right to invest in in or Japan or, you know, wherever, yeah, sure, Europe or whatever. Yeah. And I can understand for a new investor, that that’s scary to invest elsewhere. But it does also take away any excuse you have that I can’t do real estate, look where I live, you know,
Jason Hartman 27:51
right, right, exactly. That’s a great point. How many units are you up to now
Eric Payne 27:55
currently have 18 units I just closed on one and these are all just Single Family duplex type property. Good, good. So you’re up to 18 units now, but you are on the verge of selling your business, your office products business. Right, right. And you’re going to be are you going all in on real estate or pretty much? For the most part, there are some other things that I would like to I’ll have some play money, call it just to dip my toe in the water with other businesses. But as far as an investment said, I’ll probably put at least 70 to 80% in real estate.
Jason Hartman 28:34
Yeah, so you’re gonna have a big check from your business and put about 70 to 80% of added back into more income properties that you’re buying. So if you’re at what do you say 18 units now?
Eric Payne 28:43
Right. And I mean, it just depends on what kind of deals come up. I would love to find a 24 unit apartment complex. That made sense. If I can’t find that I’ll be looking for me multifamily duplexes for plexes that I can get Yeah,
Jason Hartman 28:58
Good stuff, good stuff. So What would you say to, you know, investors who maybe have a couple of units and want to grow their portfolio bigger, they got, you know, three or five units or whatever or, you know, I think we kind of address the person who’s just starting out is afraid to take the first step. But what would you say to the the others who’ve, you know, they got their foot in the water, and they’re, they’re moving along, but, you know, maybe they’re not up to 18 units yet.
Eric Payne 29:20
The first thing that I’ll say is, and you preach this all the time, is that the best product that I’ve ever seen is a 30 year fixed government back loan at the smallest interest rate we’ve ever seen. I mean, if there’s any even now the rates have gone up, it’s still cheap. It’s still a great deal. We’re just so spoiled. We think it’s old. The rates are too high now, but they’re really quite good, right? Historically, I noticed this concept A long time ago, because my parents, they’re older, they’re 78 now, and it was about 15 years ago that they paid off their house because it was the end of their 30 year mortgage. I had just bought my first house not long after that starter home is about 650 a month right? Ask them how much so wait a sec, I just want to make a distinction.
Jason Hartman 30:11
You just bought your first house and you were buying investment properties long before that
Eric Payne 30:15
isn’t what you’re saying. No, my the first house I purchase was my own.
Jason Hartman 30:19
And oh, back then when they paid off their mortgage. Got it?
Eric Payne 30:21
Yeah. And so I asked them what was your mortgage payment? Because I know y’all got this a long time ago. The answer with tax and insurance was $118 a month.
Jason Hartman 30:31
Oh my God, that’s gonna be crazy to have $118 a month mortgage payment they must have been shaking in their boots. right but
Eric Payne 30:39
but it what that did for me is it made me realize Fast Forward 30 years with inflation and what you call an inflation induced debt destruction. Your 30 year mortgage now, if you didn’t pay it off early, fast forward 30 years to the end of it. It’s like a dinner. It’s gonna feel like pennies. Yes.
Jason Hartman 30:58
It’s not even a good dinner right?
Eric Payne 31:01
Right. So that kind of really caught my attention for what happens over time. That’s the leverage you have on inflation because rent goes up, but your payments don’t. Yeah,
Jason Hartman 31:10
right. Right. Isn’t that great, you know, the payments go down in value with inflation over time, but also the mortgage balance, overall balance on that loan goes down in value and
Eric Payne 31:20
those rents keep going up. Right, I got on a tangent about that. But your original question asking, what I would tell people is, since you have that vehicle available, I would absolutely take advantage of it. You get, if you’re interested in this, you should overtime, get at minimum, your 1030 year fixed mortgages. And then, you know, there’s other options for lending after that, which beyond the 10 Yes, yeah. And
Jason Hartman 31:46
if you’re married, you can get 20 you know, if you got a working spouse, right,
Eric Payne 31:49
right. And so, to me, of course, I’ve been in this I understand all the ins and outs. It’s a no brainer, right? So that’s, that’s what I would definitely advise on one Advice. That’s very good advice.
Jason Hartman 32:01
So Eric Payne, thank you so much for sharing your story. It’s very inspirational. And, man, I think you’re gonna have a big real estate Empire after you hit the sale of your business through raesha hit it.
Eric Payne 32:11
Yeah. And you are How old are you now? Yeah, I’m 37 now. And it was nine years ago that I know it was 2010. Yeah, it was nine years ago that I bought the first unit actually collected seven last year. Even though there weren’t great deals, I found a package deal of three duplexes, and I bought another single unit. So I went from 11 to 18 units just in this past year.
Jason Hartman 32:38
Fantastic. Good for you. That’s awesome. I mean, listen, this is not like an incredible story. Like you bought 100 units now. But I mean, you got 18 units, you’re 37 years old. And you know, when the sale of your business goes through, you’re going to have
Eric Payne 32:52
you know, a couple dozen more. Right, right and probably the cash flow, you know, say in a year once I get some more money in invested, the cash flow will be somewhere between 120 and 150 K a year. That’s an excellent retirement income for the cost of living in Kentucky. But I don’t want to touch that. I’ll just use that for more investments. And I’ve got my time free to do fun things, business things that I want to do to with my time during the day, and obviously that’ll create an income. So I think I can create a pretty, pretty good snowball here.
Jason Hartman 33:28
I think you can do well listen, congratulations do, folks. That’s Eric pain and what a great story. Happy investing. We appreciate you sharing your story on the show. Thanks, Jason. Thank you so much for listening. Please be sure to subscribe so that you don’t miss any episodes. Be sure to check out the show’s specific website and our general website heart and Mediacom for appropriate disclaimers and Terms of Service. Remember that guest opinions are their own and if you require specific legal or tax advice or advice and any other specialized area, please consult an appropriate professional. And we also very much appreciate you reviewing the show. Please go to iTunes or Stitcher Radio or whatever platform you’re using and write a review for the show we would very much appreciate that. And be sure to make it official and subscribe so you do not miss any episodes. We look forward to seeing you on the next episode.
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