In this episode, Jason Hartman is joined by local market specialist Carrie to talk about the Cincinnati real estate market. She shares that the Cincinnati real estate market passed all 13 fundamentals of what is required to make a market viable as a rental market. Jason also explains the LTI ratio (Land to Improvement) ratio and plays an audio track of Closing the Gap – How to create a more inclusive global economy video.
This show is produced by the Hartman media company. For more information and links to all our great podcasts, visit Hartman media.com.
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 on now. here’s your host, Jason Hartman with the complete solution for real estate investors.
Jason Hartman 1:04
Hey, welcome listeners from around the world. And as I say around the world, we are traveling actually I’m here with Carrie and we are in the airport. Yes, we are in at CVG airport. And that is because we are just leaving our Cincinnati market tour our property tour and creating wealth seminar this weekend. And Carrie and I wrote back together Of course, Coco was over there looking so beautiful. And she was the star of the weekend. But we had some great properties do did we carry?
We did we had some excellent properties for our investors this weekend.
Jason Hartman 1:38
Yeah, it was a great weekend. You know, we had I don’t know, I think we have about 32 people or so. And we looked at properties and I think we easily had people purchase over a dozen properties. Probably this weekend. We did the creative world seminar. And what I liked about this property tour is the way we did it, of course over two days as usual, and we started the creative world seminar Saturday morning. Then went to lunch and then toured properties. And then of course, we have this grand dinner together. Was that awesome?
Oh right. That was amazing. It was just an outstanding dinner by our, our provider and everyone raved about it.
Jason Hartman 2:13
Our local market specialists, we went to their home, their 5300 square foot mansion. And it was just beautiful. Like we said, when we walked in, it was like being at a wedding reception. It was just gorgeous.
Oh, the layout, there was about four or five dining room tables. Yeah, that was awesome. bartender was great.
Jason Hartman 2:32
That was a lot of fun. I think everybody really enjoyed meeting each other networking together and just having a good time together. So that was great. And then this morning, we did we finished the creating wealth seminar. And then we did another bus tour again, two days of the bus. And so there were a lot of good properties to look at. We looked at new properties, brand new properties, we looked at historic property. I just I couldn’t believe how beautiful some of those properties were and how nice some of those neighborhoods By the way, I want to give a shout out to just I mean, we, I hate to do this because every client I didn’t mention things well why didn’t you mention me? But I don’t have a list in front of me we’re standing at the airport ticket counter literally right now. Maybe we’ll take a picture of a stewardess and, and and we just grow also carry how many states? Do we just drive through?
Yes, we actually we went through three different states on the road to the airport,
Jason Hartman 3:28
but that’s not as big a deal as it sounds. Because it’s only about an hour drive from this beautiful hotel. We stayed at the AC Marriott Hotel. And this is a part of the Marriott chain that they’re bringing over from Europe and it is gorgeous. In fact, the right word for that hotel is what is it carry sweating. Yeah, very sweaty. Yeah. What do you like about that hotel.
I mean, everything from the decor. The staff was phenomenal.
Jason Hartman 3:56
It was brand new, brand new, modern, contemporary. It was just beautiful. Yeah, it was. So driving through the three states. Yeah, we drove through Ohio, Indiana and Kentucky today just to get to the airport. Right, right. It’s not that big a deal. That was about 45 minutes an hour, no big deal. Hey, so talk to us about some of the properties. Let the clients know about some of them. These properties will probably be sold by the time you hear this podcast episode, but you know, there’s some good stuff and we can find more inventory for you. And just give an example of a couple of them maybe,
yeah, yeah, definitely. Um, we went through about three different cities, four or five different cities, Hamilton, and
Jason Hartman 4:39
roll the Liberty town and we saw some good before, during and after construction, some two bedroom, one bath, three bedroom, one and a half baths. We thought all ABC classes which really gave a good perspective to new ambassadors and seeing what kind of construction goes through each property. You know, they See the before they all, you know, Oh, it smells in here, look at the floors, but then they saw the after. Right. And they were just surprised. It was just amazing the transformation they can do. And yeah, and we had a lot of interest in the properties. So we also we hit up Middletown, I mean, we went to two or three more cities today. So it was a good I like the layout because, you know, like Jason said, you got to do the seminar in the morning, two in the afternoon, if you had to leave, you could leave, right, you know, you got to pick and choose which one you wanted to go to.
Jason Hartman 5:34
Right. Right. That was that was a fantastic arrangement. But it really our local market specialists here really up to the bar for our next property tour, unfortunately. So if you came to this one, and then you come to the next one, boy, we’re gonna have a tough time competing with that. That was it was very well done. Very well done. One of the things I wanted to refresh your memory on is what I call the lucky 13 and the lucky 13 are these fundamentals. That helps you pick a market. And I’ll just go through them real quick because we went through them, of course this weekend in the seminar, but they are number one cost of living cost of living, transportation, employment and job growth, education, the regulatory climate, the growth in the community, the rent control concept, the taxation, the regulatory climate, is it landlord friendly, you know, we want to invest in markets that are friendly to our causes landlords, even if it made any sense, and it doesn’t, it doesn’t even come close to making sense. But we wouldn’t do business in places where the there’s an anti landlord sentiment, that’s certainly not this market. So that’s great. Weather, crime, culture and arts, health and health care, funding, recreation, population density, and overall real estate market trends. And I tell you There are some great employers here. Some established stuff really nice. Yeah. Any any comments on that, Carrie?
Yeah, we drove through quite a few communities that I mean, they have the Westchester hospital. p&g, GE, IKEA. I mean, they have some great, great employment opportunities for for renters here.
Jason Hartman 7:21
The other thing I noticed about this market is that this is a you know, it’s a conservative, stable market, where people they grew up here, they stay here, because their family is here. I just I just heard that and notice that over and over. And I always make it a point to always have a lot of conversations with the service people. If I’m in an Uber car or a Lyft car, I’m going to talk to them. You know, where are you from? Are you from here? I mean, the people don’t tell I have many people that question people at restaurants, and they all say oh yeah, I grew up here, and I’m staying here and my family’s here and and that’s that’s The kind of market this is, again, these are there are three basic types of real estate markets around the world, the linear cyclical and the hybrid. That is the hybrid of the two. And this is definitely a very linear market does not make the news, nothing too exciting. And people stay because of family. In fact, it even goes further than that in terms of the family dynamic, which is interesting, some of the homes or historical homes here, and they’re not your sort of typical rental. I mean, if you talk to any investor, right, Carrie, they’ll say what do they want? How many bedrooms and baths?
Yeah, they want the three bedroom, two bath, you’re not gonna get it here.
Jason Hartman 8:37
Well, you won’t get it here. But it’s not. You can go out of the box here too, in the sense that a two bedroom one bath actually works pretty well as a record here. And why is that it’s because grandma used to live in that house, and they want to move into that house and have some affiliation or connection to that. So the roots go pretty deep in that that’s that’s amazing. To me,
yeah, a lot of the neighborhoods we go through if we saw a two bedroom, one bath, you know, the house next to them has the same two bedroom, one bath. So it’s it’s based off of the the neighborhoods you’re in, in which districts you’re at to get the A, B and C, of course in class properties.
Jason Hartman 9:17
Yeah, definitely. One of the other things I just want to share is talk a little bit about the fantastic graph. In one of the rich dad books. Robert Kiyosaki is one of his books called who took my money. And this graph I showed it again, and it’s just startling to see it. It shows $10,000 invested in a typical single family home, versus $10,000 invested in the s&p 500 index over 10 years. The $10,000 in the s&p is worth just over $17,000. And that single family home that humble single family home, I say the most historically proven asset class in the entire world. It was worth $159,000. Now granted, you bought it with leverage. So there’s a loan to pay off. And 10 years later that loan balance might be I don’t know $83,000. But all things considered if it was just an interest only loan, so the loan balance stayed the same. The real estate, the single the humble single family home outperform the sophisticated glamorous s&p 500 index by 793%. Wow. 793%. Can you believe that now? Yeah, it’s amazing. It’s just amazing. And that’s because the real estate really income property, especially the special type of real estate and call income property is a multi dimensional asset class. So you get your return from a lot of places versus the stocks, either one dimension, just capital appreciation only. Or maybe It’s a dividend paying stock and you get it from dividends too.
Yeah. And I like the the example you brought up about your house in California, you know, showing the difference between the land
Jason Hartman 11:11
right, the risk evaluate.
They, I think a lot of investors, you know, really opened up their eyes. And I mean, it was just amazing the returns you can get just from, is it the land? Or is it the construction? Right,
Jason Hartman 11:23
right, like the improvement or the land that house sitting on the land or the land itself. And I talked before about this on the podcast, if you want to dive, take a deeper dive into this, just go to Jason Hartman, calm and type in Hartman, risk evaluator, and you can get a whole episode on this, but I’ll just touch on it now for a moment since Kerry mentioned it. And basically, what it talks about is is a phrase I coined called the LT ratio. Most real estate investors or even non investors that just buy their own home, have heard of the LTV ratio, the loan to value ratio. This one is the land to improvement ratio. And it is a very, very telling ratio, because it really helps us determine the amount of risk built into any investment. And when land value the L and the LTI on land is a big expensive part of the component. That investment becomes far more risky. When you have the land being low costs, I mean carry here, this land we looked at over the weekend as a component, you got to remember you’re buying two things. You’re not buying one thing when you say oh, I bought a property that you know people say that but what they really usually mean is they bought two things. They bought a house and then they bought a piece of land, and they bought them together is one thing, but it’s really two component parts. So the land here super cheap, right? Oh yes. And we love these kind of markets because the land is either free it’s literally free because you if you had to rebuild That house, you know that it would cost you more than you paid to buy that to just to build the house, not even including the land, but the land is so cheap, even if you buy the lot, it’s maybe only $15,000. So the equation, and the house sitting on the land might be 85,000. So that’d be $100,000. All in deal. And 85% would be improvement value, meaning commodities, right? What’s a house made? It’s made of lumber, and copper wire and petroleum products and all that kind of stuff. So it’s, it’s really you’re a commodities investor in a way. But you’re investing in commodities with three decade long fixed rate financing, and that financing you get, you don’t even have to pay the debt yourself. You get the tenants to pay for it. great deal. Hmm.
Yeah, that was that was key point to that. Yeah, that’s really good.
Jason Hartman 13:52
So that house in California that Gary mentioned, that one had a very high land costs. 81% It’s literally the equation is flipped on its head at 1% land and 19% improvement on that $815,000 house I bought there so far, far more risky. Yeah, absolutely. Yeah, just a bit. Yeah, yeah. And if you want more details on that, we could discuss that for like 45 minutes, just go and find the podcast episode on that. There are a couple of them out there. Just go to Jason Hartman, calm and type Hartman, risk evaluator or LTI ratio or any of those terms and you’ll find it and it’ll be great. What are their highlights from the weekend? Do you want to share with listeners and then I want to get to a little video that I want to play for them that I think they all enjoy? Yeah, actually, I’m not gonna play the video, I’m gonna play the audio track of the video. So just to be clear, you’re not watching us right now. It’s audio only. But yeah,
Well, what I liked about this tour is and all the other tours, you know, investors come together and they get to hear each other’s stories, too. Yeah. So I mean, during the lunch and breaks, you know, they’re they’re feeding off of each other and they’re experiences and they get the real live you know, picture of what goes on in the gods the bad and the ugly. Yep. So that’s always a bonus to come to these events and see that and meet people and network with them and know you’re not alone.
Jason Hartman 15:13
Right? know you’re not alone and know that we are for real. Right? Okay, that’s the other thing. I mean, there are so many people out there who are you know, they’re doing a podcast, they’re doing internet marketing or online and you hear their stuff and you know, they’ve got educational products or whatever, but you never really meet them. And you never really meet their clients to see that they actually have real clients of course, they’ve always got a few fake testimonials, their, their brother, their sister, actor, whatever, you know, they there are websites, you can buy these fake testimonials on I’ve seen them out there and fake reviews and stuff like that. But you can you can meet our clients in the flesh. We have several events per year. Come to the next one, make it a point to come to a live event. Everybody who comes The evaluations we get are extremely positive. The only time I get a negative evaluation Carrie, can you guess what that might be? Talking about politics. That’s when occasionally I’ll get that leftist communist in the audience. Who, who says, you know, you should just stick to real estate harp and shut up about this stuff. But, you know, sometimes I just get off on a tangent, you know, well,
I don’t think Coco is too happy with you calling her a democrat either.
Jason Hartman 16:35
Coco is a total Democrat. You’re getting that she sleeps all day. She doesn’t have a job. She gets free health care. She gets free food. I mean, free travel, actually, you know, she’s going on the plane with us now. Coco gets everything free. She is a total Bernie Sanders supporter completely. I mean, that’s, that’s who she wants to be president. She doesn’t like Hillary too much because she knows Hillary is a crock but You know, Sanders, well meaning guy. At least I can say that for him, even though he lives in fantasy land. Oh, gosh, I don’t know. Okay, well, maybe we should put more ahead on this stuff because now I’m getting some bad reviews right now. Oh gosh,
Jason Hartman 17:14
well, hey, listen, um, I want to play a video for you that I think you’ll find very interesting as it relates to the future and what it means to real estate investors and the economy overall. time permitting me I’ll even plug two of them in here. There’s a funny one from the weekend. I want to play from you for you too. So let’s do that. Carrie, go to Jason Hartman comm check out some of the video of our events and come to our next event. We haven’t announced it yet. But any thoughts or ideas on where you think our next tour might be? We got to survey all our investment counselors and our clients a little bit and do that, huh? Yeah. Do you have a you have a preference, Carrie?
You know, we have a few new markets that would be interesting for us to tour and you know, the Quad Cities Yeah, Port Richey. Yeah, we can do that there’s a few options.
Jason Hartman 18:04
We’ve been asked if we would bring in tour to Port Richey. So we already got that. We’ve been hit up for that one. So we might do it. Who knows? We’ll see. And stay tuned for more information on that. Just keep checking on the podcast. And we’ll tell you about that. We got aboard the plane soon. Yeah, so let’s get over to our gate. 818 I think right here in the airport. Yeah, they’re coming to meet us. Yeah, we’ll be there. And let’s just listen to an interesting audio track from a video I want to share with you. Here it is.
Excerpt from audio track 18:34
Club billionaire Jeff Green has been sounding the alarm for years about the destruction of the American middle class today. He put his money where his mouth is having some of the greatest minds in from academia, the economics world come here to Palm Beach to his conference closing the gap, how to create a more inclusive global economy. Jeff, thanks for joining us. Hello, Robert. This is kind of a new model for a conference where you’re basically spending your own money to address As a single issue, why is it so important?
Excerpt from audio track 19:03
Well, the biggest issue for me for years now has been that the exponential growth of technology and the global legalization of wages has destroyed millions and millions of jobs. And what I have learned preparing for this conference, is that what globalization did to the blue collar worker in manufacturing over a 30 or 40 years, artificial intelligence, machine learning big data, robotics, I believe will do to the white collar workforce in the next five to 10 years. So this is a national emergency, and I’m going to address it myself if no one else will.
Excerpt from audio track 19:33
You’ve often told the story you actually worked as a busboy at the breakers down the street. Now you live in 100 million dollar mansion. This is your hotel, somebody would ask, you have been so successful. Why do you think that system is broken in America? You’re proof that it can work?
Excerpt from audio track 19:48
Well, that’s exactly it. I mean, I have proof that I can work but the system we have today isn’t the system in which I grew up. I grew up in western Massachusetts in the 1960s Robert, it was a working class community. You know, I went to the same public schools or the bricklayers kids and the pediatricians, kids in the doctor in the you know in the Laureus kids. And we all got good solid education’s. There were opportunities for people when they get out to get jobs in factories, good paying jobs, and all my my friends whose parents were bricklayers, and were factory workers, they lived in homes that those families out today, people get out of high school. I have friends whose kids graduate top law schools and can’t get a job for a year or two. So you know, we have to do something about it because the job picture is getting worse and worse.
Excerpt from audio track 20:31
Jeff, let me do Billy if I may. And thanks for joining us here. I just want you to listen to something that Ken moelis told us the other day about the changes he sees in technology that while disruptive or necessarily threatening to our society, take a quick lesson.
Excerpt from audio track 20:46
In our world right now, you have so much technology driving price, transparency, pricing, power, efficiency. These are great things I mean, what Amazon is doing if you’re a retailer, you better take your profit down. Give the consumer an awfully good deal or Amazon’s going to is going to replace you.
Excerpt from audio track 21:05
So in other words, Jeff, a lot of the changes that we’re seeing, even if they create, you know, people in law school who aren’t getting the dream job that they wanted are fundamentally for the for the for the good. He would argue what would you say?
Excerpt from audio track 21:18
Now, it’s a disaster, I mean, commodity, the way prices going to work, we’re going to all have such perfect information. Think about when you buy an airline ticket today, you can go on one of the websites like kayak or Expedia, you’ll know in less than 60 seconds what the very best fairest, that’s going to be how you’re going to buy everything, margins are going to get squeezed, retailers are going to go out of business, we’re going to be you’re going to be able to buy every product not only from here, from everywhere in the country, you know, with with translation, talk content, technology, it’s not going to be long before you’ll be able to print a price every product from every country in the world. Yeah, what’s that gonna do to American profitability?
Excerpt from audio track 21:50
Listen, I hear your point. But Amazon’s worth a pretty penny. Let me just bring out the red pill on here as well. She has a question.
Excerpt from audio track 21:57
Jeff, thanks for joining us. So you have right The question of robots stealing our jobs, of course, which is a concern that has been around for centuries, arguably millennia. I mean, I think Socrates said that one day, some sort of automated system would replace the the weaver. You know, we had Luddites, who were destroying threshers, destroying looms and every time this concern has been raised, mankind has been able to adapt. It was painful initially, but there there wasn’t ability to adapt, we transition from an agrarian society to an industrial society, and so on. Why is today any different? I mean, why why the doomsaying today, given what we’ve seen historically?
Excerpt from audio track 22:40
Well, I mean, look, I mean, you could talk about Amazon. You know, look, I mean, if you want to talk about jobs, just look at the look at the Amazon distribution center. The robots are stocking the shelves. Go take a view to take a look at the video of a Tesla factory. The welders are robots. This is really happening. This is not the Jetsons anymore. It’s not some futuristic story. This is happening today. Let me tell you the other problem is globalization.
Excerpt from audio track 23:03
But it’s, well, you know what the problem now is adapted, you know?
Excerpt from audio track 23:07
Well, it was different. First of all, if we had a relatively closed economy and I was a kid, you know, basically, the economy got good. Everyone bought a whirlpool bad washing machine and then a whirlpool workers went back to work. Now, if you want to watch me saying, you know what that was going to be made somewhere else, because what happens as soon as late wages get high today, they their labor gets replaced, either with a technology solution or labor from from a cheaper country job,
Excerpt from audio track 23:30
I want to ask you about solutions. We all know that this is a problem. The degree of the problem can be debated. But what is one hard concrete solution that has either come from this conference or will come from this conference that you hope can be implemented?
Excerpt from audio track 23:44
Well, that’s a good question. I mean, I have been here all day with some brilliant minds, Robert, and I can say that, you know, I mean, Bob, right. She was the former labor secretary talks about some kind of guaranteed minimum income. I think that a lot of the talk about lifelong education people, right. we’re educating our kids, not In a vocation, which is just anecdotally being talked about as a welder shortage or whatever, but teaching our kids that they have may have 20 jobs in their lifetimes, and they have to learn how to adapt themselves. So we get to get our education system geared. We have retraining programs, we can’t just say that some people, you know, they work in a job, it’s not their fault that that industry gets automated and they lose the job. We have to have a safety net to hold them over until the end, then we have to retrain them and get those that want to work a chance to have another job again.
Excerpt from audio track 24:29
Right. Well, Jeff, thanks for this conference. Bring it together everyone, by the way, from Tony Blair to Mike Tyson talking about the economy. So some interesting ideas to bounce around here. Whether we solve it or not, is the open question Kelly back over to you.
I’ve never really thought of Jason as subversive, but I just found out that’s what Wall Street considers him to be. Really now How is that possible at all? Simple. Wall Street believes that real estate investors are dangerous to their schemes. Because the dirty truth about income property is that it actually works in real life. I know. I mean, how many people do you know not including insiders who created wealth with stocks, bonds and mutual funds? those options are for people who only want to pretend they’re getting ahead. Stocks and other non direct traded assets are a losing game for most people. The typical scenario is you make a little you lose a little and spin your wheels for decades.
That’s because the corporate crooks running the stock and bond investing game will always see to it that they win. This means unless you’re one of them, you will not win. And unluckily for wall street. Jason has a unique ability to make the everyday person understand investing the way it should be. He shows them a world where anything less than a 26% annual return is disappointing. Yep. And that’s why Jason offers a one book set on creating wealth that comes with 20 digital download audios he shows us We can be excited about these scary times and exploit the incredible opportunities this present economy has afforded us. We can pick local markets, untouched by the economic downturn, exploited packaged commodities investing, and achieve exceptional returns safely and securely. I like how he teaches you how to protect the equity in your home before it disappears and how to outsource your debt obligations to the government. And this set of advanced strategies for wealth creation is being offered for only $197. To get your creating wealth encyclopedia book one complete with over 20 hours of audio, go to Jason hartman.com forward slash store. If you want to be able to sit back and collect checks every month, just like a banker. Jason’s creating wealth encyclopedia series is for you.
This show is produced by the Hartman media company All rights reserved For distribution or publication rights and media interviews, please visit www dot Hartman media.com or email media at Hartman media.com. Nothing on this show should be considered specific personal or professional advice. Please consult an appropriate tax legal real estate or business professional for individualized advice. opinions of guests are their own and the host is acting on behalf of Platinum properties, investor network, Inc. exclusively.