Why You Should Heed Jason's Commandment #3 of Investing

Existing Home Sales and Pent-Up Demand [0:58]

• Existing home sales have dropped to approximately 4 million annually, a significant decrease from the historical norm of around 5.5 million.
• The peak sales volume reached nearly 7 million, fueled by monetary easing, but has since plummeted due to the fastest interest rate increases in history.
• This market slowdown has created a deficit of potential homebuyers, with an estimated 6 million individuals unable to or choosing not to buy due to high rates and market uncertainty.
• As mortgage rates begin to decline, these potential buyers are expected to re-enter the market, driving increased activity.
• The current inventory of homes for sale is just over 800,000.

"So we have now this deficit of wouldbe home buyers that have been waiting and waiting and waiting."

Inflation-Induced Debt Destruction [6:09]

• The speaker introduces and explains his trademark strategy, "inflation-induced debt destruction."
• This concept illustrates how the real value of fixed payments on debt, such as mortgages, diminishes over time due to inflation.
• Historically, income-producing property is presented as an asset class that benefits significantly from this phenomenon, offering better inflation-induced debt destruction than other asset classes.
• A chart shows annual nominal versus inflation-adjusted real payments, demonstrating how a $1,250 annual payment in 1975, adjusted for inflation, effectively becomes about $250 by the year 2000.
• This process allows property owners to gradually reduce their real debt burden, making it a historically proven and tax-favored investment.

"The word nominal just means in name only. It's the name of something. A dollar is called a dollar. It was called a dollar back in 1975. It's still called a dollar today, but the value of it is very, very different."

Investment Strategy and International Investing [10:14]

• The speaker discusses how inflation impacts investments and contrasts cryptocurrency with income property.
• While acknowledging the potential of Bitcoin, he emphasizes that income property has a much longer and proven track record.
• He suggests limiting speculative investments, such as cryptocurrency or startups, to about 10% of one's investment portfolio, with the majority allocated to historically proven assets.
• Regarding international investing, the speaker states that while they can facilitate deals globally, the U.S. real estate market is particularly attractive due to government-subsidized mortgages.
• A unique loan program for foreign nationals interested in U.S. property is mentioned, offering favorable mortgage terms.

"But I would limit my investment portfolio to about 10% for those speculative things. That's just my opinion. Of course, everybody has a different opinion and I'm not, you know, like a traditional Wall Street financial adviser. I'm a real estate guy, right?"

Risks of Indirect Investing and the Marco Santarelli Case [14:46]

• The transcript details the case of Marco Santarelli, who pleaded guilty to defrauding investors of over $62 million (estimated up to $90 million) through his company Natada Equity.
• This case serves as a stark warning against indirect investing and highlights the importance of maintaining control as a direct investor.
• The speaker cautions that many syndicators and fund managers may be siphoning investor funds through legal means, such as overcharging for management fees or using investor funds to pay their own service companies.
• He refers to this as "money laundering" in a business context, where money is channeled through related entities to benefit the managers while providing investors with meager returns or, in egregious cases, outright theft.
• The speaker encourages listeners to investigate cases on Pacer, the federal court system's online portal.

"And I guarantee this. Of course, what I'm about to say, there are many, many syndicators and fund managers out there right now, people you and I both know who are stealing your money."

Maintaining Control and Building a Portfolio [19:17]

• The core message reiterated is the importance of being a direct investor to avoid the pitfalls of fraud, incompetence, or excessive fees associated with indirect investments.
• The speaker advises simplicity, suggesting buying individual houses and maintaining control over one's financial future, aligning with "commandment number three: Thou shalt maintain control."
• The company offers services to help individuals build nationwide real estate portfolios, regardless of their current experience level or the number of properties they aim to acquire.
• Resources include property sourcing, notes, co-living options, and software tools.

"Be a direct investor. Just buy some houses. Keep it simple. Be in control of your financial future. Do not violate commandment number three."