Jason Hartman begins today’s episode from the city of Shanghai, one of the largest (and densest) cities in the world. Since he’s been in town he’s started thinking about the importance of population density on real estate. It impacts everything from the quality of life to the desirability of businesses to the pricing of every unit.
Then Jason talks with client Greg Scott about his journey from accidental landlord to an owner of multifamily properties. Greg and Jason examine why people don’t know whether they’re winning or losing, how Greg was able to continue investing through the Great Recession, and what sort of demographics are making being a landlord look better and better.

Investor 0:00
Well, the first one is scary. But then after that, our second one was down in Atlanta, which we actually never saw that property. We owned it for a number of years and then sold it at a pretty nice profit and Phoenix and then we bought another one in St. Louis through and then and then the last one we bought a new network was also back in Indianapolis. And interestingly the very first property we bought the one I need Annapolis we still own it. And it actually has the very same tenant in it with the same tenant since 2008.

Announcer 0:27
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 1:17
Welcome listeners from 165 countries worldwide. This is Jason Hartman with Episode 1100 and 84 1184. Thank you for joining me today, as I am talking to you from Jin mouse tower at the Grand Hyatt, Shanghai, China. And Wow, what an amazing view. Actually, the view would probably be a lot more amazing if it weren’t clear. Now, the thing in China I have noticed in my travels here over the past week and a half is that you can’t really tell what’s in the air. Is that fog, is it pollution. I don’t know yet. We haven’t been outside yet today because we Woke up and enjoyed this incredible spa they have here with hot dips and cold dips and steam rooms and saunas and working out and what have you from the gym and the spa here amazing only to be exceeded by the View from our room on the 77th floor. This is an 85 I think it’s an 85 storey building at the top, there’s an observation deck want to get up there today. Looking out on the Shanghai It is really incredible. This is an amazing city last night, the light show was just unbelievable. And interestingly, the buildings with all of their different light shows on all these buildings. You know, of course this stuff would never have been possible without the advent of LED lighting First of all, but also, of course, the computer processing power needed to coordinate these light shows that are as tall as a skyscraper and coordinated between Many different buildings, at least seemingly is just nothing short of amazing. It is truly an amazing time to be alive. And Shanghai. I don’t know yet because we haven’t been out because, well, hey, I’m going to hear some flak about this, but my girlfriend’s a little slow on getting out into the city today. So hopefully, no, I see someone about to throw a computer at me. So hopefully we’ll get out and I’ll actually get to see this city.

Jason Hartman 3:27
She’s been here a few times, so nothing new for her. But new for me for sure. In this city is it’s unbelievable. I mean, just looking out at it. The views from here are absolutely spectacular. I kind of look at some of the most amazing man made environments on Earth. Of course, we took the venture Alliance mastermind to Dubai a few years ago on one of our mastermind trips, and that is an amazing man made environment Dubai you know, just an incredible structures, incredible buildings. Shanghai is amazing in a different way. You know, just the architecture and all of these places in Hong Kong where we were yesterday. totally amazing. Shanghai may well be the largest population city on Earth at about 24 million people. These cities are just big and I can’t believe the density of these places. And so I looked that up and I did some research, because when we talk about real estate investing, one of the things we always want to kind of keep in mind is population density, population density. It’s an important factor. We haven’t talked about it much, because it doesn’t matter that much in terms of the markets in which we invest. But it does matter overall, just in your understanding of real estate investing. And I’ll give you an example. Many, many years ago, when I started my traditional real estate career in the remember going south, having grown up in Los Angeles and Long Beach County fornia those two places, what about 30 miles apart maybe. And then going even further south, into Orange County, California where I spent my the vast majority of my adult life, built a really big real estate career there in the traditional real estate world had a real estate company there that was later purchased by Coldwell Banker back in 2005. And everybody credited me with incredible timing. Because that deal closed. Get this You ready? November 11 2005? Yeah. Pretty good timing, I’d say. But that wasn’t the point here was it? Here’s What amazed me about population density is coming from Los Angeles where I thought the quality of life was actually much lower, much lesser, not nearly as nice as living in beautiful Orange County, California, which I consider to be a nicer place. The population density was lower in Orange County, higher in LA Angeles, the prices in Orange County were lower. I know most people think, well, Orange County is really expensive. But back then, you know, it was sort of considered the suburbs of La really, you know, the ads for the Irvine company used to say, just 40 minutes to Los Angeles. So don’t try that today. Because the traffic and the density has increased quite a bit. But that’s when I realized at a very young age, that one of the huge drivers of real estate prices, they weren’t really related to quality of life, it was related to population density. And population density was either a function of or a result of I you know, it’s kind of a chicken and egg question, right? In terms of job creation and employment growth and high paying jobs and so forth, for example, and I know many of you listening live in places I talked about, and I don’t mean to cast aspersions on any particular places, but just for me personally, I’d love to live in New York City. For maybe three months, just at one point in my life, but I certainly wouldn’t want to live there permanently. I don’t think places with high population density really offer very good quality of life. I think better quality of life is found in lower population densities. And I know there are some other advantages. I remember talking with my friend, Sam Jeet, who lives in New York City. And he, we were having coffee one day and in Scottsdale, Arizona, when he came out for a visit. You know, we were comparing the two and comparing the real estate prices and comparing the employment and so forth. And he says, Jason, the thing I love about New York City, is that you just meet so many very, very smart people. And you know, I agree with him, you know that that’s, that’s true. And in higher priced markets, higher population density markets, mostly This doesn’t track Exactly. I’d say that the popular Because it’s just Darwinism, right? Darwin said, survival of the fittest. The Darwin belief system would say that people largely get sorted by prices, right? So it’s really expensive to live in New York City. It’s pretty darn expensive to live in Los Angeles. And it’s pretty darn expensive to live in Orange County, California, and many, many other places around the country and around the world. So the more expensive, the real estate market and virtually everything in life is driven out of real estate prices. Whether or not you can get a table and a chair at the local coffee shop is driven by the price of real estate. For example, in Laguna Beach. I remember going to beach as a area in Orange County, California. It’s really beautiful. It’s really expensive. And when I lived in Newport Beach, we would commonly go to Laguna Beach and Have dinner or lunch or brunch or whatever that’s, you know, common place to go to. It’s a really beautiful place. I remember talking to one of the restaurant owners, and asking him, you know, why don’t you have more tables and more chairs, and he said, Every chair and health, I’m certain that this has changed over the years. So don’t quote me on this. It’s not a contemporary statement I’m about to make. But he says, Every time we put a table in, you have to pay the city $6,000 it’s 6000 bucks for an extra table. So he says, that’s why I didn’t have more tables.

Jason Hartman 9:30
So anyway, that was many years ago, he told me that so I don’t know what the deal is now, but but you get the idea that everything is driven. It’s a function of the price of real estate. So arguably, in a really expensive real estate market, where it’s hard to quote unquote, survive, if you will, and I don’t mean survival, but I mean, economic survival. The population just gets smarter because it weeds people out right you got to be more ambitious. You got to be smarter to live in a place like New York. City or any really expensive real estate market. But personally, you know, nowadays your associations can be with people all over the world with our great telecommunications and of course, we all travel now more than ever. So you’re not really as married to any certain geography anymore. As I’ve said many times, life has become much more portable in the recent decades. And so you still have access to all those really smart people in those high Darwinism affected type of real estate markets. But you don’t have to live there and pay the price yourself to associate with them. And so just kind of an interesting thing. So as I’m, as I’m looking at Shanghai here, that thought kind of came to mind probably a little bit of a tangent here, so forgive that if you would. But we’ve got a quaint case study today. This is a pretty amazing story. Now. I’ve talked to you many times over the years about how really Being a single family home investor, the vast majority of my life, I always wanted to kind of graduate, if you will, to bigger deals. And I did do that I did, I think successfully graduate to bigger deals. I’ve got about 280 units, give or take. Now, I own some of those in partnership with clients of mine. And, you know, I’m not convinced that bigger deals are better deals by any means. But I am convinced that if you want to do really, really big things, ultimately you’ve got to figure out how to scale anything in life, right? It’s all about leverage and scale. So I graduated years ago, where I got into apartments, mobile home parks, and I still believe that the single family home is really the best thing going overall. Now, what’s interesting is that recently coming Out of the Great Recession. So over the past decade or so, the single family home investment has been scaled more than it ever has in history by these big investors, and big hedge funds, and big private equity groups who have scaled single family homes, to the tune of thousands and thousands and thousands of single family homes. And the economics of the single family home, I believe really are the best in so many ways. But for those of you who are interested in apartments, or bigger deals of any sort, I think this will be an interesting interview because it is a story of a graduation interview, if you will, from starting with eight single family homes purchase through our network years ago, on up to a larger apartment complex. So let’s jump in and listen to that case study. And I think you will enjoy it and we will talk to you on tomorrow’s episode. Here’s the case study.

Jason Hartman 13:06
It’s my pleasure to welcome a returning guest back to the show he was on many years ago and that is an investor. His name is Greg Scott. He started his investment career with us back in 2008, and graduated into doing some big stuff in the apartment world.

Greg Scott 13:22
Greg, welcome back. How you doing? Hey, I’m doing well. Thank you. It’s good to talk with you.

Jason Hartman 13:26
Yeah, it’s good to have you. And it’s funny, you know, we just reconnected through a real estate forum. It was interesting. I didn’t remember and then you said, Hey, you know, I’ve been on your show before I was a client many years ago. And, and then you told me what you were doing now. And you started with single family and, you know, just kept buying and buying and investing and investing. And now you’re up to? You’re a big multifamily investor, right?

Greg Scott 13:51
Yeah, we just closed on a 272 unit apartment in Indianapolis.

Jason Hartman 13:55
Well, congratulations and your first single family home invasion. property was through our network in Indianapolis as well

Greg Scott 14:03
back in 2008. Right. Yeah, there’s a little bit of a story about that. But I can tell but that was our first purposeful investment into the real estate. Awesome.

Jason Hartman 14:12
That’s great. That’s great. Good stuff. You started with single family homes. You got up to I think, like you said, 14 single families. Was that about right? Yep. You got it? Yeah. Okay. And how many over how many years? Did you accumulate the single families and then what was the transition to apartments,

Greg Scott 14:28
what didn’t have any with us as my own. My wife and I both worked for automotive companies in Detroit, which is where we’re from, and we were looking for passive income outside of the ups and down to the automotive space. And through a bad flip, we actually turned into accidental landlords in Detroit. And that’s when we realized that being a landlord wasn’t hard. And then we decided what we need to buy more property but we didn’t want to buy it in Detroit because it was subject to the ups and downs of automotive and that’s where we discovered your network. And and 2008 we bought our first property in Indianapolis. And after a year, we realized why wasn’t as hard as scary as we thought. And we subsequently went on to buy six more properties to your network and eventually through other places and get up to 14 single family homes.

Jason Hartman 15:15
Now that’s awesome. Good to hear. When you lived while you still live, he lived in the Detroit Metro area and that property in Indianapolis, you know, that was out of town for you, right. So, you know, we have investors doing it from much further than that, but after it’s out of driving range, it’s not as well be as far as it needs to be right. So that was that was a scary thing to buy that first property far away. Hmm.

Greg Scott 15:39
Oh, the first one is scary. But then after that, our second one was down in Atlanta, which we actually never saw that property. We owned it for a number of years and then sold it at a pretty nice profit and then Phoenix and then we bought another one in St. Louis through you. And then the last one we bought in your network was also back in Indianapolis. And interestingly, the very first property we bought the one I needed Annapolis, we still own it. And it actually has a very same tenant and it was the same tenant since 2008. Wow. Isn’t that amazing?

Jason Hartman 16:06
So have you increased the rents on that property in the last 11 years?

Greg Scott 16:11
Yeah, we have in a little bit every year. That area hasn’t appreciated hugely in rent, but it’s done very well. And so do you think

Jason Hartman 16:20
you just kind of got lucky getting a tenant that stays for 11 years? Or was it something you did or any, anything you want to share? Because this is what people don’t realize a lot of times, you know, some of these tenants stay for a long time. And you know, you probably heard it on the show. My mother still has that same tenant that we profiled on the podcast years ago. That’s been in one of her properties since get this 1989 the guy could have paid it off. Yeah.

Greg Scott 16:54
But he’s still rent. I don’t think we’ve done anything. Anything really special just every now and When you get a property where tenant stays a long time, we’ve had plenty of properties where we’ve had, you know, tenant change out seems like every year and sometimes you’ll get a tendencies for two or three or five. You just never really know. But it is kind of odd to have somebody in there for over 10 years, right? Yeah,

Jason Hartman 17:16
that’s something else. Share with the listeners. You know why you like real estate, if you would, and you know, kind of what your outlook is on it in the future and whatever you want to share like that.

Greg Scott 17:26
You’re talking about Angie Smith, the returns are really, really strong because there’s so many ways you can make money in real estate. But it’s also just incredibly tax favored. Just a anecdotal story, but I still work and was talking to my friends about their taxes this year, and almost all of the folks who just have a W two job ended up paying much higher taxes because they weren’t getting as much taken out last year after the Trump tax changes. We ended up selling to single family properties last year, and we had one apartment that we’ve invested in it sold. So we had a huge amount of capital gains, and we actually didn’t have to pay anything other than our withholding. So we already had, even though we had about $200,000 in capital gains, because of all of the deferred depreciation that we had had in prior years. So I just give you a sense for the power of inefficiency of the tax with real estate. So we just love it.

Jason Hartman 18:16
Yeah, that’s fantastic. You know, it’s such a great asset, and what would you say to people, it kind of relates to what you’re talking about, about the tax benefits, but see a lot of people, Greg, they think they’re just treading water, or they even think they’re losing in the real estate game when they’re really winning, because they don’t really look at the multi dimensional stuff, the tax benefits, etc. You know, I will say a lot of people think they’re losing, but they’re really winning, but they just don’t know how to keep score properly, because they don’t know how to analyze the numbers, right?

Greg Scott 18:50
What would you say to that? I completely agree with you. People forget that their mortgages slowly being paid down. If you pay attention to it. It’s usually about you know, in a typical single Family, maybe $1,000 a year that you’re getting, but nobody really pays attention to that. You’re generally getting some appreciation and because of your leverage, you look at the return on your total cash invested, it’s usually pretty strong. And then you’re getting the cash flow. And then you add on top of that the tax benefits and it’s pretty amazing what you can the returns you can get from single family real estate and multi family real estate for that matter. Yeah, right. Right.

Jason Hartman 19:21
Yeah, really is any best practices you want to share on being a landlord, you said it was easier than you thought. And I love hearing that, you know, some, some people have a hard time and some of that is just luck of the draw, you know, some of it is not paying attention properly, you know, so it depends for different reasons that it goes poorly and badly. Sometimes you get lucky and it’s just good luck, sometimes bad luck, you know, but any best practices you can share with our listeners,

Greg Scott 19:48
I would say the one thing that we’ve become pretty good at is very simple concept is trust but verify.

Jason Hartman 19:59
That’s good. I love it.

Greg Scott 20:01
We’re works. We trust our property managers, but we read the reports and we stay on top of them. If we hire somebody to you know, I’ve had some roofs go bad with hail storms, and I’ve got hired a roofer. And then, you know, make sure they take lots of pictures and have the property manager come by and just check that it’s done right and check with the tenant that there’s no leaks. And just doing that, constantly trying to just check up and make sure everything’s working right has done very well by us. We haven’t had to have any, you know, major changes in our life other than just keep doing that.

Jason Hartman 20:33
That’s great trust, but verify. Did you ever Well, you probably have by now, I’m guessing. But maybe in the beginning days, did you ever self manage any of your properties? Or did you always have managers?

Greg Scott 20:44
We did not none of the ones through your network. We have a 24 unit apartment. Only about 20 minutes from our house and there were a few months we self managed that not necessarily by choice ends up having to get rid of the property management company that was running it because they stopped collecting the rent one month. And man is that ourselves about three months until we could find somebody else to come in and take it over. So we have experienced that it was a good experience learned a lot of things just having done that in apartments course you getting a little bit lower level of tenant than you do in a single family house. So you get a lot of excuses and interesting stories and reasons why the rent isn’t paid, but

Greg Scott 21:23
you can make it work

Jason Hartman 21:24
right. Okay. So on that note, do you like like in the single family home world, I mean, applies in the multifamily world to of course, but do you prefer the Class A B or C type properties? I mean, you talked about those interesting excuses he had from the especially the lower end tenants, do you have a preference like each investor has sort of that what they like better and worse, you know, some some like section eight some hate it, you know, it just depends, right? temperaments vary.

Greg Scott 21:52
I like working class housing. And different people have different definitions of A, B and C. So I would say have trouble when you Different definition, we may be talking about different things. But working class housing is something that people get. I like it because it’s hard to make new working class housing. Usually they’re older properties, which means you have a negative supply, they tear them down, they don’t build new ones, okay, but the amount of people that need that it’s growing. And so when we, you know, eventually we’re going to hit a recession here and the higher priced properties. So, you know, in the apartment space, the places to get 2000 $3,000 a month, rent on a two bedroom, those are going to be the ones that get hit the hardest because those people are going to want to downsize to maybe a 1500 or $1,000 month, but if you’re playing in eight or $900 a month space, there’s always people that will rent that.

Jason Hartman 22:42
So if it’s a single family home eight or 900 a month, or for multifamily,

Greg Scott 22:47
I’m talking more multi on like a two bedroom but if I was in the in the single family properties, we rent probably 1000 to 13 1600 somewhere in that range. Okay,

Jason Hartman 22:57
so still bread and butter his family were

Greg Scott 23:00
Very, very much so. But

Jason Hartman 23:01
that can be definitely be B class housing that will rent for 1300 a month ease and you know, even lower end of a range depending on the market.

Greg Scott 23:09
They’re very solid neighborhoods, or neighborhoods that you might. They’re certainly not war zones. They’re certainly that there’s certainly areas you feel comfortable walking down the street at night, but they’re not million dollar houses.

Jason Hartman 23:21
All right. Any other best practices you want to share with people or any technology that you’ve used or, you know, anything that’s helped you just kind of be a better investor, any side of the business?

Greg Scott 23:34
This is a best practice. But one thing I will talk to a lot of my friends who seem very interested in the returns were getting, but they never get going. I think the most important thing is getting going, Oh, started getting out there doing something. I love it that you said that that

Jason Hartman 23:47
is so darn true. You know, you just the journey of 1000 miles begins with a single step as the saying goes and yeah, just do something. You know, there’s so many people that and maybe these are like your friends, right? They want to Learn more about it. They agonize about it. They want to figure it all out in advance. And you just never can you don’t know what’s going to happen once you do it, you know, you’ve got to just figure it out while you do it. Right. It’s the iterative process you you learn on the on the job training as an investor, right?

Greg Scott 24:17
Yeah, I can’t tell you how many times I’ve had friends tell me all the ways that it won’t work. But it does. And I can refute every single one of their arguments, but they always want to try to find more, I guess why they shouldn’t do it. Absolutely.

Jason Hartman 24:30
Well, the proof that it does work is you know, your success in building a little real estate empire for yourself and your wife and you just retired your wife, didn’t you?

Greg Scott 24:42
Yeah, we did. Last Friday was her last day. We’re very excited about that. She’s gonna dedicate her time, full time to turn it around this project that we just bought, and we’re very excited about that. That’s fantastic. Yeah,

Jason Hartman 24:55
good for you is the project you bought really like a a rehab. Are you retaining that property? Or what are you doing with it?

Greg Scott 25:03
Well, it is actually because high occupancy right now we bought it at 92% occupancy looking forward to Bay, we’re actually going to be up in the 98%. So it’s we’re in a good shape from that perspective. But that said, we’re bringing about $3 million to rehab it an upgraded, it’s got a lot of deferred maintenance. So we’ve got roofs that need replacing water heaters, h HVAC systems. So there’s a lot going on there. But then we’re also going to start completely redoing the interiors. And as we redo the interiors, as the tenants just naturally turn over, we’re expecting to course bump up the prices to reflect the brand new interiors. And we will ensure over time, change the profile of the tenants a little bit. But we like the area to solidary just like the kinds of I mentioned before, and we just think there’s a ton of opportunity here. Yeah,

Jason Hartman 25:50
yeah, that’s awesome. What is your outlook on the renter market? You know, back in? When did you start listening to our podcasts like I know you bought your first property through a network back in 2008. So that was 11 years ago. But when did you start listening? Were you We must have been before that, obviously. But how long before

Greg Scott 26:06
I started listening to your podcast when you were on? I think Episode 35, something like that. Wow.

Jason Hartman 26:14
I don’t know when that was exactly, but I’m gonna guess that was about 2006 or seven.

Greg Scott 26:19
Right? It was around that time. Yeah.

Jason Hartman 26:21
Yeah. And then 2008. I mean, you bought that first property, right at the beginning of the Great Recession. How did that go?

Greg Scott 26:29
Well, the first one has been an Indianapolis was you talked about linear markets. So it’s about linear, you can get Indianapolis this really hasn’t changed. But what was fascinating to me and really helped me understand the benefits of geographic diversification is around the same time we bought a property in through your network in Atlanta and one in Phoenix, and Atlanta was a judicial foreclosure state. So the foreclosures took a lot longer to drag out. Phoenix was non judicial foreclosure and they cleared a really fast. And so the price of that Phoenix property quickly doubled. It was amazing. I like just got lucky and bought at the right time. And we ended up selling that property after a couple years so we could buy more. And then the one in Atlanta Actually, its value went to about half of what we bought it at, but it didn’t matter because the cash flowed cash flow. Great. So we just hung on to that one for another three or four years and then the prices came back up once all the

Jason Hartman 27:25
manor property. I’m surprised that sounds pretty substantial. I mean,

Greg Scott 27:31
it would have been about to the late 2008, early 2009. Somewhere in

Jason Hartman 27:35
there. Everything in the news was like doom and gloom, the end of the world. Lehman Brothers failed you know, the whole global financial system Iceland files for bankruptcy more Are you worried?

Greg Scott 27:49
I think back in the days before I started investing in real estate, I would have been terrified because your 401k goes up and down. I know my 401k turned into the to do one day Yeah. Once we started investing in real estate, and the cash flow doesn’t change on your property because Lehman Brothers goes out of business, right? And because the value goes down, it doesn’t really change either. Hmm. And that’s why you want a cash flowing property because you can hang on to it through the ups and downs. Yeah. And you know, they’re in real estate. There’s more ups and our downs for sure. But just that one Atlanta properties example, we didn’t have to sell it because the cash flowed the cash flow covered any pairs that we had, that came up throughout the years, but we just held it for years longer than the Phoenix property. And when we sold it, we made a nice profit. So it was great. No problem. Yeah, that’s amazing.

Jason Hartman 28:37
So you were talking about the Atlanta property? I kind of interrupted you there. Sorry. You were talking about the Atlanta property? And you know, even in the time with depressed values,

Greg Scott 28:46
it was fine, right? Yes. The main reason the values were depressed is because there were more properties that were coming through the foreclosure process. So there was a flood of inventory on the market. So yeah, if I had to sell it, which I did, the property value was depressed. But my plan was just to keep it the cash flowed. And so we just waited until that wave of foreclosures went through and it was fine.

Jason Hartman 29:08
Now, isn’t that interesting? See, that’s the thing. I think people that watch the values get themselves into trouble, psychologically. Well, you need to watch the cash flow.

Greg Scott 29:18
Yeah. Operations and the cash flow. Yeah, very,

Jason Hartman 29:22
very good. Very good. How have you found your managers to be on the larger multifamily properties? It’s obviously just my experience, but I was under the, I think, mistaken belief that when I started really getting into the bigger leagues, and dealing with larger multifamily properties, as I’ve done, I’ve had two big complexes now. I’ve still got one of them. And I sold the other one. 10th did a 1031. You know, I thought the quality of the managers would be just a lot better. And I haven’t really found that to be true. Sadly,

Greg Scott 29:59
what do you think? The multifamily space is real division between small and large properties, small being under 100 units, basically. And on the smaller properties, it is harder to find property management, because usually you’re having to have people share time between properties. And so you’ll pay a lot for transportation. And we don’t know where Bob the main this guy is. So he’s gotta be put on somebody’s payroll. So charged to the property. Yeah, yeah.

Jason Hartman 30:25
And you know, technology is going to get pretty good at solving that problem. Pretty soon, it’s on the way. And you know what I’m talking about like that. The apps that the contractors are starting to use, the tracks are geolocation, it tags, the photos with geolocation. You can’t cheat this stuff that I don’t want to say it’s impossible, but it’s pretty hard. Clock some in and out based on location and, you know, like, really, that’s getting better, which is beautiful,

Greg Scott 30:50
beautiful. Yeah, with our large property management company on a bigger property. We’ve been quite pleased. Once you get over 100 units you can usually afford both a leasing agent And amoenus person. So in our property, we actually have six staff. And we hired a very professional property management firm. And they we actually did a lot of due diligence on property management before we selected them. But they really have the processes and procedures ironed out. They’ve done a really nice job taking over the property and getting it stabilized, although we still follow trusted, verify. So they tell us what they’re going to do. And then we just verify that they’re doing it and staying on top of it.

Jason Hartman 31:26
Yeah. What’s your outlook for the future? I kind of alluded to that earlier. But I just wanted to get that as we wrap up. I think that would be a good thing to talk about. Oh, because what I was going to say is, you know, back in 2008, when you started with us, I was talking shortly after that, about the demographics coming at the rental market over the next decade being phenomenal. And I keep kind of pushing that back. I still think we got another really good decade of demographics in terms of high rental demand. What do you think?

Greg Scott 31:56
Well, I keep waiting for this recession that’s supposed to be coming. It hasn’t happened. But individually it’s going to happen. But I still think if you’re buying good workforce housing and ranges that people can afford, and you got cash flow, you got nothing to worry about. Because Yeah, there you’ll have a recession. And you have when you come out and you have a period of growth, so as long as you’re not putting yourself at risk by taking on speculative investments, or negative cash flow investments, you should be fine through this little bit of a downturn. But if you’re looking at the kind of macro trends, we still have this eco boom generation, or Gen Xers that are huge population, many of them are delayed in buying into their first single family houses actually delayed in buying cars, a lot of to which we pay attention to. So I expect that’ll be a huge round pool for a long period of time. And like I said, they’re not, there’s not too many places out there that are building affordable, brand new housing, particularly in the apartment space, but even in single family. And most of the new stuff that’s getting built as you know, I’ve heard on your show tends to be higher end stuff. Yeah. So that means your your supplies constraint in that area. So you got more people coming in and the constraints apply. it bodes well for those of us who are Oh,

Jason Hartman 33:07
yeah, it definitely does. It definitely does. Do you like my talks about packaged commodities investing? Because you’re really a commodities investor, you know, you own all those raw materials. And it’s a lot more expensive to buy the new and assemble that property again today, isn’t it?

Greg Scott 33:27
Yeah, absolutely. And that’s certainly part of it. I know that from what I’ve read, I may get this figure wrong. But there was a study done that said that verses 20 or 30 years ago, about $20,000 of a new house goes to cover regulatory costs. And so there’s another reason why it’s hard to book entry level housing, and a great reason to own it. Yeah,

Jason Hartman 33:50
all those barriers to entry are really bode well for the people that already own the property. So congratulations, investors. I know most of you listening are taking advantage of what Greg and I have taken advantage of. And if you haven’t, you know, like Greg said, Get Started. Okay? Don’t be the coulda, shoulda woulda person. It’s an amazing asset class. And it’s really not that scary. You know, it’s been done for thousands of years, this concept, you know, we’re here to help you do it. In Greg, I just really appreciate you coming on the show again and sharing your story. It’s always great to hear these case studies. our listeners love them. So

Greg Scott 34:28
thank you again. Well, Jason, thank you for having me on. It was good talking to you again. And again. Yeah, I don’t think we would have taken that first step if it wasn’t for your network. So thank you for getting us into it. And for all the education you have been provided throughout the years on your podcast, because that’s what gave us the courage to take that first step.

Jason Hartman 34:46
Well, the pleasure is all mine. These are the stories I live for. I love to hear them. It’s great that your wife has retired and it’s just awesome. So keep up the good work, Greg. Thanks again for sharing your story and happy investing. 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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