Joe: Hey, guys, welcome. This is the Real Estate Investing Mastery podcast. You're in for a special treat today because one of my really, really good friends, Rob Swanson, is gonna be on this podcast with us today. And we're gonna be talking about guess what, you guessed it, this crazy market right now and 2020. What is going on? Where is the opportunity? How can we profit? How can we make money in this crazy economy that we have going on? And I don't know many people smarter than Rob, and that's why I wanted him on the show. He's been through several different cycles in the market. A super smart guy. I'm not kidding. One of the smartest investors I know. And we've become friends over the years. I've learned a ton from him. So we're going to be doing a podcast with Rob Swanson here talking about the market conditions in 2020. What can we do to survive and thrive in this market? I got a few things I want to announce, though, first of all. Number one, I am doing this podcast live right now on YouTube and the Facebooks. I think YouTube's work and it was telling me there are some errors and problems are if you're watching us live right now, please type in the comments and say hello. Tell us where you're from. Say hello as we go through here. You know, if you've got any questions for us, type them in there.

Joe: Okay. The other thing is we're going to be releasing this as an audio podcast. So hello, podcast listeners right now. I love you guys. I appreciate you all very much. And so if you are a listener of this podcast and if you haven't already, please subscribe to the show. Just go to Apple podcast or Google Play or Stitcher or tune in radio or I Heart radio. We're on all of them and subscribe to the channel. Let us know that you're out there. And then every week as we release new episodes, fact over the next few weeks I'm gonna be releasing episodes a lot more regularly. I have been doing three episodes a week, but I'm going to be doing probably five a week. I want to be doing more interviews like this with Rob. I'm also gonna be doing short little 15 minute podcasts, teaching some really cool stuff that I think are going to be important for you to understand and be aware of as we go into this market, as the market is changing, OK? So be sure to subscribe to the podcast. I have a lot of things on my podcast that I don't even release in my courses. I don't talk about in my emails. You may see a podcast that doesn't become a YouTube video. It's not on Facebook. So the podcast is the place, the main place. I go to release my my stuff. Okay. And so go check it out.

Joe: The second thing I want to tell you is my book. This book has become more important today than ever. It's called wholesaling lease options. You can get it for free. Just pay shipping and handling a WLOBook.com, WLOBook.com. You can read in a couple hours. It's all killer, no filler and it's just really good jam-packed content. I was so discouraged because I spent months writing it. I got it back from the publisher and it was only a quarter of an inch thick. But this book walks through how to do a lease option deal from beginning to end and not a long term sandwich lease option deal, but a quick flip wholesaling lease option deal so you can learn how to flip lease options.

Joe: It's one of the easiest and fastest ways to make money in real estate today that I have found. And this is what I did in 2008 when the market collapsed. I quit my job in 2009. A year later, everyone thought I was crazy, but I was doing this. I was flipping lease options and I show you how to do this for free in the book. Just pay a little bit of shipping and handling. I'll send it out to you. Go to WLOBook.com, WLOBook.com. A lot of people are talking about this. This is really important. We're gonna be talking about lease options as well. A little bit on this podcast. All right. So shall we bring over Rob? What do you guys think? Should we bring over Rob? I think we should. Rob Swanson. How are you, my man?

Rob: I'm good. What's going on?

Joe: Man, I'm so glad you're here. It's an honor to have you on my podcast. I remember when I was getting started in real estate, watching you, reading all of your sales letters, watching all your webinars. We've done a lot of business over the years where I really needed that least leads in an hour course. Totally. Remember, there was also a lot of people. I'm still getting positive feedback from that. In that course, we taught you how to get leads for free in under an hour. And we have had so many students that took that course and just gave it to their VAs and said, go do this. Right now they get tons of leads. So that's, of course, Rob and I created together. When did we do that, Rob?

Rob: It was we launched it in October 2013. Wow. October 2013. Isn't that crazy?

Joe: We need to dust the cobwebs off of that. I think maybe, for sure. So Rob is now the owner is not the creator, but he's the owner of Freedom Soft and he's pretty much re-created it.

Rob: Well, we yeah. I mean, we ripped it apart. You know that you know this story. But I'll just share it real quick. The story is I didn't buy the business because it was a great product. I bought it because it was a great business. And I knew that we could take that great business and reinvest in and create a great product. So five years, about 90 percent rebuilt. Here we are today, probably 95 percent, 98 percent. Maybe it's a different product for sure.

Joe:So a lot of you guys know me. I was the podio Joe guy, right? Like I was the guy who was a big fan of podio. I pretty much introduced podio to real estate investors way back in the day. I remember one of my coaching clients introduced it to me. I was at a mastermind a week later with SeanTerry. I sat down with Sean Terry and I showed it to him and he freaked out. And all of a sudden a bunch of gurus in the industry started talking about podio. And pretty soon everybody was using it. It was better than what we had maybe back then. But the problem with podio and this is why I don't use it much and why don't use it at all for a real estate deals anymore. We still use it for administrative things. Right. But like there are so many third party plug ins you have to plug in to to do it with. Right. So I started using Freedom Soft a couple of years ago, fell in love with that. I said, Rob, I want to customize freedom soft for lease options. Can I white label it? And we said Yeah, sure. So I've been using I created a product called REI Simple, which is powered by freedom soft. And it's just I've customized it for lease options and added in my Web sites and my contracts, my workflow, automations and things like that. Guys, let me tell you something. There is nothing else out there in the market today that does as much as freedom soft REI Simple does. It's absolutely amazing. It's a game changer. He completely rebuilt it. It's funny to you tell a story because I used to use it way back in the day and it was painfully slow. And you did something where you just had a developer go in and like, what, you change something? And it instantly…

Rob: Yeah, it was the thing. What ultimately ended up happening is the thing that was slow right before I bought it was a single line of code that was creating a code loop and it was just spinning the servers and that got fixed the week before I closed.

Joe:So it's because he's done some amazing improvements in it. My students get it for free when they sign up for my course for three months. And it's just it's a game changer. People are using it, loving it. It does. All of this isn't a pitch for freedom software or REI Simple, but there you go. It's right there. Go check it out anyway, because it will change your business. It makes everything so much easier. To create REISimple.com or just go to FreedomSoft.com. And if you want a deal, if you want directly with what Rob has. But Ari, as simple as what I've used and customized, it's a game changer. There's so many things that it does now under one platform that I used didn't have to have four or five different platforms that I was paying two to three times as much to get it to do less than what freedom soft does. So thank you, Rob, for doing that. Seriously. Absolutely.

Joe: OK. So I want to give a shout out. Oh, good. YouTube is working. Listen to this. Victor. Victor from Maryland tuning in. Purchased freedom soft three weeks ago. Awesome, Victor. Cool. That's awesome. Well, we've got Nathan. Hey, Joe. I think Nathan's in Tennessee. Nashville, I want to say. How you doing, man? Nathan from Nashville watching on the YouTube. Dan has a question here about. So he's got two properties under contract and wondering if I should back out and let the earnest money go. Oh, that's a good question. We will answer this later with Rob. Yeah, because we're really talking about the market. Michael Stansberry, what's up for Memphis? You doing, man? Ty Jones, how are you doing? David from Orlando, Florida. Glad you guys are here. Paul from Michigan. What's going on? What software am I using to get the words on the screen? Lot of people ask me that. It's called stream yard and I'm using stream yard in connection with restream. So good, Nathan. Freedom soft is awesome. I love being able to change contracts on the fly.

Joe: Oh, this is this is one of the main reasons I jumped over to freedom soft. Because there's no other CRM out there that lets you create the contracts like just a click or create a contract and get in there and edit it, modify it from inside the platform. So literally, guys, you can take any contract, you can take a Realtor's contracts. That's obnoxiously long and has tons of stupid stuff in it. But you could use a Realtor's contract, put it into REI Simple freedom soft and then just do a click of a button and it creates the contract, fills it out for you, click another button and you send it to the seller or you can send it to click to mail to print it and mail it in the physical mail to sellers. This absolutely was a game changer. And some people take this for granted when they've been using freedom soft for so long that like what's a big deal? But like the big deal is there's no other CRM that does that. So it's amazing. Right. All right. So there's a bunch of people here. So I'm. Thank you, Rob, for taking the time out of your busy day here in Denver, Colorado. I was just in your neck of the woods last week. I got a fever blister right here because I was out in this in the sun so much in the mountains near Winter Park to this ranch, this huge eighty five-hundred-acre ranch. Absolutely epic. It was so beautiful. I was disconnected. Loved the mountains. I'm jealous.

Rob: Well, this is like the third time now that you've taken your family out of vacation through Denver and you haven't stopped at my house. I know we're going to make that happen one of these days when you're coming through. I got I got plenty of room for you and your. I know you got a big family, but I got plenty of room for your whole family here. And I know I'm a good cook.

Joe: You are? I am. I'm a good cook. All right. Well, take you up on that. So, Rob, what's going on there? A lot's been happening the last couple, three weeks. People are kind of getting scared. People are more. There's I think I think I see kind of people having two different reactions. Maybe they're overly optimistic. They're like just this is gonna blow over. Not a big deal. And other people are like, it's the end of the world. The sky is falling. Yeah, I know. So where are you at?

Rob: Yeah, I'm in the I'm in the middle of that. And, you know, oftentimes there's you know, there's the extremes. Right. And those extremes are what you just talked about. And somewhere in the middle, there's truth. And the reason I'm in the middle and the reason I'm not panicking and I'm not being ignorant or just too optimistic is because I've been through all of this stuff. Joe, that is being talked about in the media today or like that, the hype and the fear that is in the media today, the headlines and the sky is falling. It's not that different from a fear sales pitch that we had in 2007 and 2008. I mean, it was the same conversations I was having back then with people that were. The world is falling apart or it's just gonna blow over. And again, there was truth in the middle. And so one of the things that often asked people is who remembers? Monday, August 13th, 2007. And we can ask the audience this listening to this right now. Monday, August 13th, 2007, is the day that I realized Wall Street stopped buying the debt. And a buddy of mine called me about those Monday morning. I was getting up and I was just gonna, you know, run the day like normal. And he calls me and he says, Hey, man, it's over. And I said, what's over? And he said, My business, it's gone. And he was. He ran a big mortgage shop. And they were they had a big line that they were recycling three to five hundred million dollars that they were recycling every few days. And Wall Street was buying all of the debt off the back and giving them their money back. They were making new loans, reselling them. And that whole thing. And he said Wall Street stopped buying our debt. We got a day and a half left. And that was Monday, August 13th, 2007. In the ensuing months now.

Rob: And we'll fast forward kind of where we take some of this conversation. But August of 2007 is also the same day or month that the Fed announced that they didn't believe that banks had the liquidity to survive. And so in the ensuing months, 2008, you had the AIG and the Bear Stearns and Lehman Brothers and the bailouts and all of that stuff that came post that August event. And it wasn't until a year later, December of 2008 that the Fed dropped interest rates to near zero. So, Joe, what happened last week from the time we're recording this, they dropped it to zero. They dropped it to zero. Right. And so that hasn't happened since December of 2008. But it took them over a year to get to dropping it to near zero in the last crash. This time it happened in the first week of everybody kind of having this fear, panic. And so there's some similarities to what we can talk about navigating through the last crash. There's also some differences that we can talk about. But either way, my objective and my goal here is to give us some insights and lay out a path forward for people, things to be thinking about.

Joe: And Rob, you've been you've been talking about this for at least six to twelve months already. You have a book. You haven't released it yet?

Rob: No, I'm about to release it. Yeah, I've kept holding it back because there's been a variety of reasons of why I've held it back. But I started talking about this in 2015. So five years ago and I have recorded trainings of me talking about the things that lead to the crash and the things that we as real estate investors can be doing to, number one, prepare in advance number to identify. You know, I don't have a crystal ball, but I can look at history and I can draw some parallels and connections and see patterns that line up. You know, those patterns allow you to sort of connect the dots. And that's what I've spent a lot of time over the last number of years trying to do.

Joe:Yeah. And what was the name of the book?

Rob: The book is called Cash In: What to Do Before, During and After the Next Housing Market Crash. And you know, on this show, Joe, we can talk a lot about what is covered in the book. And I take it, you know, kind of the next level of depth in the book itself. But we can lay out a lot of the game plan right here.

Joe: Well I'd love to do that. But I want to just a lot of people are nervous right now. Right. Yeah. And I want to know from you. Where are the opportunities? I mean, that's the first thing I want to ask you and I want the second thing I want to ask you maybe at the end of this podcast is every everything was gone. You lost everything, you had zero dollars in your name and you had 30 days to make five, ten grand. What would you do? So first of all, let's talk about the opportunity. Where do you see the opportunity in 2020, 2021 going forward for the next one to two years.

Rob: Yeah. So there is I think three questions there. So the first one is your first question was what do I see the opportunity is and where is the opportunity, where's the opportunity? I think the opportunity is in a couple of things, recognize that there's fear in the marketplace. But if you if you go back to Warren Buffett's famous quote, right, when everybody's greedy, be fearful and when everybody's fearful, be greedy. Let me break that down for a minute. Over the last five to eight to 10 years, everybody's been greedy and everybody's been, the market's good. The market's going up, the market's going up, the market's going up. And so the fundamentals of real estate investing have been set aside and markets have made a lot of people look like they're smart real estate investors, they're not. The market was just on their side. Let's be frank. People got lucky. Now I'll take luck. I don't mind. I don't mind participating in luck. That's OK. But there's a lot of people that got lucky because the market gave to them.

Rob: And I think the opportunity is, is to now recognize that you've got to go back to fundamentals. You've got to go back to understanding what makes a deal, a deal and why is it a deal? There's a question that I ask. And I had a COO in my business, Brad, for a number of years. And he he would always say this. He goes, don't talk to me about the deal unless you can answer one question. How do I make money with it? Right. So you have to be able to answer. How do I make money on any real estate investment deal? I think the next opportunity is fear creates motivation. And so when everybody's fearful, it's funny because real estate investors. Joe, how many times the people come to you and say, Joe, I can't find any motivated sellers? Joe, where are the motivated sellers, Rob? There's no motivated sellers. The market is too good. Nobody is motivated. All of a sudden, fear enters the market. People become motivated. And then everybody panics and says, I'm out. Right. And so fear creates the motivation that everybody's been looking for. And so if you understand the fundamentals of investing, if you understand that fear creates motivation, you know, you do you make more offers, you make more offers, you adjust your price, you make a lower offer or with better terms and you keep making offers. Price cures everything, right? Price can cure everything. And so that's kind of how I like to start thinking about it is make more offers. And then I think learning some, two things. You're going to make offers and you've got to do two things.

Rob: I did this in 2007 and 2008. You've got to get really good at those creative offers, the creative deals. So you've got to learn creative real estate investing. And you also have to learn how to get access to capital because cash is king. And whether you have cash today, whether you've been stockpiling it, whether you, or whether you don't have cash today, it really doesn't matter. You can go get the capital for your business and take advantage of the fear that's in the market today. And people, I got called out because I keep telling people like fear creates the motivation. There's patterns that we can see. So make more offers. And it's funny, you know, if you guys call me out on Facebook or whatever and say, you know, that that's just bad advice to say continue to buy today. Well, guess what? In 2007, August, when Wall Street stopped buying the debt, my buddy's business collapsed and the Fed announced that the banks didn't have liquidity. I said, I wonder what Warren Buffett's quote means. Let me go put a big fund together. So I got a capital partner out of Stanford, Connecticut. One hundred and seventy five-million-dollar fund at the time. They are almost a billion-dollar fund today. They car off and they gave me ten million dollars in the second quarter of 2008 amid Bear Stearns collapsing and Lehman and AIG and everybody else. I'm buying real estate and everybody back then except the old school. Hard money note guys in town were telling me I was crazy. Why are you going all in now? Right. The markets are crashing. And I said, now's the time.

Joe: That's also I totally I couldn't agree more with making more offers. We're starting to see a ton of our old leads bubbling back up because we're following up, which is so easy to do in freedom soft. You know, it's like they're bubbling back up. They're calling us from letters they've been holding on to for the last six to twelve months. And so a lot of. And so if you make an offer to every single lead that you get, it becomes so much easier to follow up with them. You don't have to keep that offer that you made with them six months ago. But when you do the follow up, you can say, hey, I'm calling you follow up on that offer I sent you. Gives you an excuse to call him. Gives you an excuse to follow up. And you made the post one time. This was before this this scare like a 3, 4 weeks ago, somebody was complaining about not finding sellers. Right. And you made a post about the answer is simple: make more offers. And you have to remember that you listed 10 things and every one of them was make more offers, and then follow up and make more offers. Exactly. And make creative terms offers. That's right. Yeah. Good. All right. So, Rob. Talk about the opportunity now. You're still buying offers. In fact, you're doubling down. Right. Are you doing more marketing? Are you doubling down on your lead generation?

Rob: Yeah, absolutely. I mean, I told my guys. So. So there's a couple of things, right? If you're smart about what you do and if you're smart about how you build your CRM and the tools to organize your leads. Joe, you know this. I've been saying this to you for years. I'm a big believer in organized before you automate. Because otherwise all people end up doing is automating chaos. And so I'm a huge believer in simple organization before automation, because what that allows you to do at this moment in time, if you're well organized and your lead management, you can go in to REI simple and you can go into Freedom Store and you can just select the segments of your list that are by status and do marketing to them. That's free, right? And so what I've been telling my guys is, is do that guys make more offers. If you thought you were making enough offers a month ago, maybe more offers. Just the one constant in real estate is that things are constantly changing. Right. So make a little bit lower off or make a little bit better terms of offer. Understand that the market fear adjusts what we have to do a little bit, but don't stop what we do because of that fear. Just adjust.

Joe: Excellent. Talk about are you guys doing any more by your marketing? Or are you going out and calling your existing buyers and just getting the temperature of where they're at, where you were? What are you guys doing there?

Rob: Yeah. So in 2007, I you know, again, middle of all of this fear, in 2007, I started what was called the Colorado Property Investors Association. It was November of 2007 was our first meeting. I ran it for five years. And the reason I did that is to is to bring some voice to the conversation, to say, number one, we don't have to fully be fearful, like, let's not be stupid. Let's understand that we have to have a plan B and maybe a plan C going forward. But yeah, we are doing direct fire marketing, but we're doing it in kind of an authoritative way. We're bringing conversation and voice to this to the story and what's happening in the market today so that people who are looking for a leader can get someone to follow. Right. Because I've been through it. I mean, I wasn't. There's a lot of guys that I'm seeing a lot of conversations out there. It's too easy to share your story these days. Right. And so a lot of guys that either started after the crash and have written it up or are sharing their opinions, or guys that went into the last crash got completely crushed and then rode out and have had success sharing their opinions. I had a little bit of a unique perspective in that we navigated into the last crash. We navigated that turmoil, successfully navigated through the crash, and then we've navigated out through the back end and up the ride. And so, yeah, we're doubling down, if you want to call it double down. We're not stopping anything. We're just moving forward and saying, let's make the adjustments.

Joe: Are you doing more wholesaling deals or are you looking for more buy and holds? What's your strategy? You're doing any rehabs going forward.

Rob: Yeah. So I haven't been doing any flips fix and flips for a number of years. I think it's a great strategy. I fix and flip hundreds, maybe thousands of houses. And so I I've done it well. I've done it a lot. I haven't been doing that lately. I continue to buy and hold and I continue to wholesale. And so we're buying. One of the things that I think people need to understand at this market time is that there are historical ebbs and flows of the market. Going back to the crash in 73, 74. You know, back when the dollar was taken off the gold standard and the fiat currency and debt was introduced into the market into the '90-91 crash with the savings and loans and then into the 2007-2008 crash of last time. There are similarities through all of those. And so as you start to look at those at those three similarities, one thing was one thing was consistent at the end of each one of those crashes, and that is that rents on single family homes, post-crash went up. And so what I try to look at is I want people to understand there are two different types of markets.

Rob: There are what you call the boom and bust markets. And those are the markets that scream out. Crash stream up and crash and scream up and crash and there are what I call Christ stable markets. And so since two thousand fifteen or so, I've been buying predominantly in what I call price stable markets. And a price stable market is something that if you look historically over the last 30 years, give or take, the price hasn't gone up or down much, much more than 10, 15, maybe 20 percent through the ebbs and flows. And contrast that with markets that are boom-bust where you see hundred percent swings in price fluctuation, ups and downs. And so I've been buying in price stable markets, understanding that if I buy conservatively on cash flow today and the market crashes, I'm not losing a lot of significant value because it's fake money anyway. It's equity, right? It's not real and I can't spend it. I can't eat equity. And so if I lose that equity, I'm not really worried about it because I'm buying for the consistency of cash flow. Now, one of the things that I've done as well and I've started talking about this a little bit, I've been telling people to do this for a number of years, but people sometimes don't listen to me. And that is I've been buying in C to C minus the deepest neighborhoods. And a lot of my rental portfolios is on Section 8. It's government subsidized housing.

Rob: Now, Joe, you've got to laugh at this because you know, Rob, the capitalist who's a capitalist, but I just, you know, not at the expense of people, has most of his investment portfolio in a government subsidized program right now. There is a reason I did that in 2008, when everything crashed and blew up, I was fixing and flipping houses when everybody said you couldn't fix and flip houses. But the only money that was in the market or the majority of the money that was in the market was government subsidized FHA. First time homebuyer loans. So I was selling everything to government backed financing. Well, when as I started to see the market go up and up and up and up and I know how that ends, right. It goes down. I said the only people that are going to have money if I have a rental portfolio, I don't want Johnny to lose his job and not be able to pay my rent. So I put most of my portfolio in Section 8 housing. The government pays the rent. And so there's things that you can think about as an investor and do even today that help you navigate forward.

Rob: That's really good. Section 8, though, people are gonna be thinking Class C, class D, don't you have bad tenants? You know, aren't there problems that you have with getting good tenants? You know, I mean, how have you been able to manage that?

Joe: I haven't had a problem with it. Yeah, some bad tenants. Sure. You have some bad tenants. You know, a year ago, I had to wait an extra 17 days to get my rent check when the government shut down. Right. Because they weren't processing the checks. And so, is everything rosy all the time. No, I'm not here to say everything is rosy. If everything was rosy, real estate all the time, everybody would be a real estate investor successfully. Things happen. Things go wrong. Things are bad. At the end of the day. It's how you respond and navigate through them. That makes the difference. And so I don't know, do I sometimes have a bad tenant? Sure do. I sometimes have to evict a tenant that stops paying because they don't pay their section of the rent. Yeah. But at the end of the day, if you treat people well like even you know, there's a there's a triangle at the top of the triangle if you're a landlord. You're in the cash flow real estate income game. The top of that triangle is your tenant. Like that's who you have to serve. And so provide him with a good, safe, clean housing at an affordable, fair price. And I don't have much problem.

Joe: Good. So let's go through some of these questions we have here, Rob, because people are typing in questions, these are really good. This is from Dan. I have two properties under contract and I'm wondering if I should back out and let the earnest money deposit go on. Probably depends on the deal. What would you say to somebody like Dan here, Rob?

Rob: Well, I don't know anything about the deal. I mean, if the properties are worth a hundred and he has them under contract for a hundred and twenty-five, then back out if he's got if they're worth one hundred and he's got them under contract for 50, don't back out. Right. So I don't know enough information to really give a good answer. But what I'll say is this: price cures everything. Right. And so if Dan has navigated the fundamentals of this and purchased or made an offer and got under contract at a fundamentally good price, whether Dan decides to bring capital in and close on himself, or he decides to flip the contract and sell it to somebody else. It doesn't matter.

Joe: Do you see, Rob, a average wholesaling fees going down maybe over the next couple years? We've gotten we've gotten fat. Happy over the last few years where we're making ten, fifteen, twenty thousand dollars profits.

Rob: No, I don't see that that's going to happen. And I'll tell you why. When we put our fund together in 2008, our average wholesale fees that we were that that were in all of the deals that we bought for our fund were fourteen thousand and sixty-eight dollars on average. That means some of them were higher. Some of them were lower. But on average, the front-end profit money that came out of those deals was fourteen thousand sixty-eight dollars. That's those are good numbers. All through 2008, 2009, 2010. Those are good numbers.

Joe:So what were you. What is your average wholesale profit been higher the last few years, though?

Rob: No, I think it's probably been a little bit lower than that over the last few years. So I would say that as the market got heated up, actually margins compress as the fear enters the market and as people get more fearful of that and the march and you know, you make lower offers, the margins increase and you're going to make more money.

Joe: Would you say there's a lot of money sitting on the side waiting to come back into the market? What are you going to get excited about? Prices are coming back down now. Absolutely.

Rob: I think not only is there money sitting on the side, but I think there's money that's going to be pulled to the side that is going to look for a place to go. And, you know, money doesn't disappear out of the markets for the most part. Right. You've got the equities stock market. You've got the bonds, debt market. You've got real estate or kind of the three biggie places where money moves around. And, you know, we can see what's happening in the stock market today. We can see what's happening in the bonds market today. You know, you get the commodities markets, you've got some different markets. But real estate is where that money usually ends up going towards when everything gets beat up.

Joe:So you I heard you say this before, this is really good. Wealth doesn't disappear. It just transfers. That's right. Right. That's right. So where, let me ask you, though, related to that, the money that was already in the real estate market, whereas that transfers that money transferring to?

Rob: Yeah, it depends. It depends. You know, let's say that somebody has, let's say there's a house that they bought. It was worth a hundred. They pay seventy five. And now it's worth, it went up and it became worth one hundred and twenty five. So worth one hundred, values one hundred. They bought it for seventy five. It's now worth one twenty five. And now the market crashes and it goes down and now it's only worth seventy five. Well maybe they paid off their debt. Maybe they only owe sixty five left. Right or six seventy or something like that. But the market has crashed. Well somebody is going to come in if they can no longer afford to own that real estate. Somebody is going to come in and buy that real estate from them. If they can't service the debt, they're going to either lose it and the bank is going to take it back it or they're going to sell it and somebody else is going to step in and take it from there. So that that wealth that they had didn't disappear. It transferred to the new buyer. Right. And so in order for that transfer to happen, in order for that wealth transfer to happen, there's typically a change of ownership. So the change of ownership is when the transition and the transfer of wealth occurs. If ownership remains, the perception of wealth may go down. But if the transfer doesn't happen. No, no wealth changed hands. Does that make sense? Yeah. You know, that's kind of how I think about it.

Joe: It's a good way to put it. I've heard a lot of people talking about, well, now we just gotta go make lower offers. Right. And that makes sense. Yeah. But a big part of that is still knowing what your buyers want. Right. Knowing what the buyers are willing to pay. What are you finding is some of the good ways that people can start marketing for more buyers. What do you recommend? How do you find the buyers today?

Rob: Yes. I'll tell you what I did back then. I'll tell you what I'm getting today. In 2007, I launched their Colorado Property Investors Association, became an authority starting to talk about this stuff. If I'm the wholesaler and I'm in the game signing deals. And I can answer that one question. How do I make money with this deal? I want to get all of the potential buyers in the area to be coming to me. We're doing the same thing today. We've created content and educational authority, Web sites and different things to be the go-to source to say what's going on? Where do I find my next deal? How do I need to think about this deal? Do I need to analyze it differently? Do I need to fund it differently. Is my agent strategy the same? We've become an authority to help talk about that. Now, what I like to do is that I like to go into a market and say, okay, where are where are the deals? Right. So there's a big problem. A lot of times a new wholesaler will go in and, you know, they've got a city and they go to the west side of the city and they're and they're looking for all their deals and they go get a deal that they think is a deal and then they put it out there and nobody wants it. Well, that's because all of the investors are buying on the east side of town. Right. And so the first thing that I always do is, is I look. And I ask the question. The guys that are already making money, where are they making money and how are they making money? Right. I don't have to be the, I don't have to recreate the wheel or figure it out. I just need to go find out what the successful investors are already doing and figure out how to participate in that in that pool. And so we use the tools that, you know, you should teach your audience all the time to figure out where that happens.

Joe: And again, let's put a plug in to freedom soft and REIsimple because you can get your cash buyers right there, right? Certain cash buyers by county or by zip code. And you download the list, you can see what zip codes they're buying in the prices that they're paying. You get the contact information of those buyers. You can send them a letter. You can skip trace them. By the way, have you ever. Because you know how hard it is sometimes to skip trace LLCs. Go to fiverr. I know you already know this. If you go to fiverr and do a search for Skip Trace LLCs, you'll find dozens and dozens, maybe hundreds of visa is that will do skip tracing for you for LLCs.

Rob: Yes. And Joe, you don't even know this. You don't even know this yet. But we are a couple of weeks from releasing LLC skip tracing and corporate skip tracing right inside freedom soft.

Joe: There you go. Oh, I love it. Yeah. And this is again, why I love freedom stuff so much as your constantly updating. Pretty soon, guys, you're gonna be able to skip trace LLCs inside of freedomsoft and REISimple. Yeah. Love it. OK. So we got some good questions here. A lot of people are saying hello, Latricia from Kelly Destin. I think is that Florida. Randi Simpson. Good morning, Joe and Rob, hope everyone is well. Rob says hello. Matt Smith says Hello, PJ. Great content, guys. Thank you. I'm glad you appreciate it. I think we kind of answered this, Marc is saying, should you assign everything now or buy and hold anything? Let me just ask one more time. What makes for you, Rob, a deal that you're going to hold or assign?

Rob: Yeah. So in 2007-2008, everybody told me that I was crazy to be buying like I was buying because the bottom didn't hit. I was I was buying a lot of that in Denver. I had invested across the country when the whole thing crashed. I came back to Denver, which is a a piece of the strategy that I talk about in my in my book. And that is because I wanted to get back into the boom and bust market as the things had adjusted down or and work towards the bottom or the bottom didn't quit until about 2012. So two thousand eight, nine, ten, eleven, twelve. Things are still going down. Right. And so I talk about the rubber band effect. And here's everybody said I was crazy to be buying. How do you know how low it's going to go? Well, here's how I figured out how to know how low it's going to go. I call it the rubber band effect.

Rob: And if and if I can go in today and I can take a piece of real estate that's, say, worth a hundred or rents for a thousand, and I can buy it in such a way that my either my equity or my cash flow, and just for simplicity. Let's just talk about cash flow, because when we're at the peak, I think we should be buying for cash flow. Let's say that it rents for a thousand and I can buy it and I can get my net cash flow after debt service after TIMMV, taxes, insurance, maintenance management vacancy. I can get my net cash flow to be three hundred dollars a month. Per door. OK, then prices keep going down and then I can buy it and I can get four hundred and then I can get five hundred and then I can get six hundred because the fear keeps going. The prices keep going down. But there's more demand in the rental market. There's a shrinking supply because they haven't been rehabbed enough. So rents are going up. Prices are going down. And now I'm at what I was comfortable with at to 250, 300 dollars a door. Now I'm buying for five hundred dollars a door. Net cash flow. Then all of a sudden six hundred and then seven hundred. And then somebody comes in and says, you know what? I don't need seven hundred dollars a door I'm okay with five hundred. So they outbid me and they pay a little bit more. And then they say there and say, you know what? I'll buy for five hundred. And now that becomes the new norm. And then somebody comes in and says, you know what, I don't need five hundred dollars or I'm okay with four hundred. And they outbid. And the prices come back up a little bit. And pretty soon we're back to this point where it's 250 to 300 dollars a door.

Rob: And so as you look at a market and you and you kind of calculate the rubber band effect, you ask yourself how low is low enough? At what point does an investor come in and say, I don't need seven hundred dollars a month cash flow on this? You know, a thousand dollar rent. I'm okay with six hundred or five hundred. That's the bottom. So you can figure out where the bottom is and you can adjust your pricing accordingly. And you know, I've just built a spreadsheet guy. I like spreadsheets. So I've built spreadsheets and models, that kind of model. All that stuff out and so I could go look at any market and I can kind of project where I think the bottom is based on that single question that I talked about, how do I make money with this? And because somebody is going to interject, I don't need that much money, I'm willing to pay a little bit more. You could figure out the bottom.

Joe: OK, so when would you you're looking at a deal right now. When are you going to decide to wholesale it, make 10 grand or hold it for a cash flow?

Rob: Yeah, I want to hold. I want to hold as much as I can. I'm a big believer in holding as much as I can unless as long as. So I've I have really strong buying criteria for my personal portfolio. I like to buy three bedroom, one bath, brick or stick houses a thousand square feet in C to D plus neighborhoods that rent for eight hundred dollars or more because I like to buy Section 8, but that rent for eight hundred dollars or more and have less than fifteen to twenty thousand dollars in repairs needed. If I can do those things, and then I'm looking for a minimum net three hundred dollars cash flow and I want to put six thousand dollars in my pocket today by throwing money through refinancing cash out either through a long term debt cash out refinancing or through private money. I buy a cheap enough that I can borrow enough to cover my acquisitions, costs, my rehab costs and my operating cost to run that business. So that's my buying criteria. If I can fit that buying criteria, that box, I buy. Anything that doesn't fit my box I wholesale because there are guys that have different criteria than me. So it's about knowing what you want to buy and being dead set that you're going to either get it or your wholesale it.

Joe: This is good. This I hope you guys are being encouraged by this, right. Because nothing is right now, Rob, telling you I'm getting out of the market. You're not. No, no, no.

Rob: In fact, I'm going more in the market. It doesn't. It doesn't mean what I did three months ago is going to be exactly the same that I do tomorrow. But but now is not the time to get out of real estate. Now is the time to get into real estate. Holy smokes. I don't know how many times I have to say that to people. But you know, again, that Warren Buffett, quote, be fearful when everybody's greedy and greedy when everybody is fearful. Everybody is fearful. So you need to be greedy now. And the problem is most people just follow the fear and bounce.

Joe: Very good. This is a good question from Mr. Thinker. All right. This is a different type of fear. Guys, many homeowners are not going to feel comfortable with terms now that they can't evict you for an unknown amount of time. What are you saying to sellers to release it? Let's talk about why would a seller accept a terms offer right now in this market?

Rob: Well, OK. So I'm not, let me read Mr. Thinker's question here. This is a different type of fear. Guys, many homeowners are not going to feel comfortable with terms now that they know they can't evict you for an unknown. Oh, so what they're saying is that if what Mr. Thinker is saying is that if you become the tenant in a lease option purchase yet. That the homeowner can't evict you if you stop paying. Well, if that that's. I think that what he's saying. I think so. Yeah. So that homeowner has two choices, right? That homeowner can leave it vacant and just pay for the house or that homeowner can put somebody else in there that they can't evict for an unknown period of time. So the question is, how much confidence can you give the seller to know that you're the right guy or the right gal that can step into that role because the seller has to make a decision at some point, either keep paying for it themselves and leave a vacant house that they're just going to cover the costs on, or put somebody else that they can't do the exact same thing that they can't do with you into the property. So I don't see how it matters.

Joe:So you still make the offer and you follow up because sometimes sellers just need time to cook and don't overthink it, Mr. Thinker. That's right. Don't overthink this, because if a seller says no, there will be other sellers that say yes. And I know I've been doing this a lot lately. I've just been telling the sellers you should listed with a Realtor. I pull away, I take my offer away and it's amazing. When you do that, instead of me chasing them, they start chasing me. No. And this psychologically does it's amazing. It's like a miracle drug where you pull your offer away. You say you should go out listing with the realtor then. Right. We thought about that. So anyway, good question here from Mario, real quick. Are you still going to be investing in small towns? We've been wholesaling a lot of deals lately, Rob, in small towns. What are you thinking of small towns?

Rob: I love it. I think small towns are great. I have seen your course in your stuff that you put out there and the contents around small towns, I think it's super smart because it takes the competition away, puts you in a King of the Hill position a lot of times and a buddy of mine, in fact, just here in Colorado, he invests in small towns and he just ended up picking up a duplex from a lady who is owner financing it to him. And he's the only investor that has reached out to her. She owns twelve others or twelve total. So he's going to end up with twelve owner finance duplexes because she's 76 and just wants to be done with it.

Joe: There is so much money, there's a lot of mattress money in small towns, but there's also a lot of motivated sellers. Very little competition and there's still a demand for houses in small towns. Inventory is still low, right, by the way. Inventory is still low, right? That's right. There's not been a ton of new properties coming on the market recently. All right. Quick question from Matt. Do you think markets like Vegas will stop significantly? What do you think is going to be happening to those hot markets that are going up and down right now?

Rob: Yeah, I guess I don't have a crystal ball. But let's look at history again. There's two types of markets. You've got your boom and bust markets. Historically, markets that stream up and crash, stream up and crash. Vegas is one of those. Right. And you have your price stable markets, those markets that over the long haul have been relatively price stable. They don't go up and down. So just look at history. You can go to the FHA's website and you can look at their historical price appreciation graphs and you can see whether a city is a boom bust market or a price stable market.

Joe: Yeah, that's very good. Good question. Do you mind me asking you a few more questions? You. Now, this is great. I'm looking at the questions myself. Well, you can see them as well. Yeah. Yeah. This is from Victor. Is it better to buy via lease option because there are no closing costs. Are buyers more likely to accept these options rather than subject to. So when you make your terms offers Rob, how do you do your terms offers?

Rob: It depends on the situation of the seller. It depends on the situation of the financing and it depends on the situation of the market itself. So I don't know that one is better than the other. I think that you just have to look at the scenario and make the best decision you can.

Joe: I think it's really important just to say what we've been saying here, to not be a one trick pony. That's right. It was a lot of the one trick pony is are only have a cash offer, are going to have a harder time going forward with this. You need to understand, learn creative strategies. I love lease options. There may be a place for subject 2's owner financing. David, how do you select the properties you decide to put Section 8 tenants in or do you target Section 8 for all your buy and hold properties.

Rob: I buy in neighborhoods. So I go into a city and I grid out a city. ABCD, War Zone, right? And I don't buy in war zones and I generally don't buy in A and B neighborhoods. I buy in C and D neighborhoods. And let me define those just real quick for people. So I see neighborhoods generally 50 percent owner occupied, 50 percent tenant occupied, a D neighborhood is generally 80 percent tenant occupied and a 20 percent owner occupied. The war zones that are ninety five, ninety five tenant, 5 percent owner or even probably less. But I look at those 50, 50 and 80, 20 owner occupied, tenants-occupied neighborhoods, good working class blue collar neighborhoods. And then I go in and I pick markets based on price to rent ratios. And that's how I do it.

Joe: Excellent. Tyrone's from Nashville. What's up, Grant from Kansas City? It's just in there driving through there the other day. What's up, Joe? What's up? Rob Swanson, my analytical brother. That's right. I think one of things I like about you, Rob, is that some people get really stuck in analysis paralysis. But you use analysis, deep thinking, intelligent analysis to make decisions quickly. Right. Big, big difference. Mark, thank you. You're welcome. Yurli? Yurli, thank you for the feedback, Jim. Thank you. All right. Question from Randy Do we want to create an LLC for each buy and hold and or JAVY deals to cover possible lawsuits for unforeseen legal issues? What's your, just real quick. Your philosophy on LLC is one or many or what?

Rob: Yeah, I don't think you need one per property, but that's a personal risk decision that you have to that you have to make. I tend to break my portfolio up into not one to one, but I definitely break it up into small groups. There's a threshold that I generally I'm comfortable with. And then I buy with LLCs and trusts and I do a trust for every property.

Joe: OK. Lots of questions here. But I do want to wrap this up because we've been taken up too much of Rob's time. Bill's asking here. One more quick question. How do we keep track of the homeowner to make sure they're paying the mortgage on a terms deal? How do you make sure, Rob? They're paying the mortgage.

Rob: Yeah. With an authorization to release form and or you can go depending on the structure of the deal, you can go as far as a limited power of attorney. And so and then tracking right where you make the mortgage for them, or you know the best yet you make the mortgage payment for them, but always have that paperwork that allows you to verify with the lender for sure.

Joe: Somebody else was asking how do you stop them from refinancing? Well, you cloud the title, you file a memorandum of option or an affidavit of interest or something that clouds the title that will prevent them from refinancing it later. Oh, good question here, because I wanted to ask you about this from Dwinell. Do you still use pin point, pro locator pro how did you call it? Pinpointer pro. Do you still use that and do you? You're going to be merging it with freedom soft?

Rob: Yes. The answer is yes, in fact. And we were just having a conversation before I jumped on here, Joe, with you, with my team. And we are looking at integrating it directly into freedom soft. We you know, the I launched that product in 2014. We are going through a development update on it right now. I've got my development team working on it and we are about to bring it back to bring it back to the market and tie it in with freedom soft. So we're pretty excited about it. So thanks for asking that question.

Joe: Yeah, I'm excited about that too. Especially, I think as the markets are shifting here. This is my prediction. It's more important than ever to know where the buyers are buying and what they are buying and focus not just spray and pray marketing, but hyper focused, laser focused marketing to what the buyers are buying because it's it's going to be shifting and changing. All right. One final two final questions. Rob, if you were brand new, you lost everything. You lost your shorts. And, you know, you're out on the streets almost homeless. And you've got to make 10 grand in the next 30 days. What would you start doing?

Rob: I'd make offers. So I'd build a list and I would build a list using freedom soft or whatever tool you have to build the list. REI simple I would target single family houses in what I would call a C to D neighborhood where investors are already buying. And I would probably target vacant properties with out-of-state owners first. I would skip trace those owners. I would pick up the phone and I would start calling them inside of freedom soft. You can do all of that inside of freedom soft, REI Simple. Absolutely. Can you serious? You can. You can do it in under five minutes. Joe, do a webinar. Just demoing that. Yeah. You open to that. I totally would. In fact, this afternoon I'm going to do a Facebook live. And one of the things that I'm going to do, Joe, is I'm going to use our freedom software REISimple duplicate lead finder. And I'm going to show people if your if you're using freedom, soft REI simple, today, you have a big leads list, right? Lead management or if you're off on another system or no system at all. If you upload your lists into Freedom Soft,and use freedom soft duplicate lead finder. I'm going to do a little training to to show people in these days of turmoil. And I want to call my marketing back. What could you do for free using the tools that are right at your fingertips right now to go find some of the motivated sellers that are just sitting there waiting for you to solve their problem?

Joe: Oh, man, that's so important because there are so many of you guys right now that have you're sitting on a goldmine of old leads. Yes. And all you need to do if you have freedom soft or REI simple, bring them in and you can you're sitting on a goldmine. And you could start contacting them super easily through different channels, different ways, all inside of a platform. It's really cool. All right. So you talked about your book a little bit, Rob. Is that available now? Can people get that or how can they get a hold of you to get it when it becomes available?

Rob: Yes. So they can go to RobSwanson.com/2020. RobSwanson.com/2020. And that should I think that'll redirect people right to the book. If it doesn't you can just go to RobSwanson.com and and you can see the book link right there and get on our release link.

Joe: RobSwanson.com/2020. Go there right now you're going to be doing a Facebook live real soon here. People can look you up. Do they look up Rob Swanson or they look at freedom soft on Facebook to find that live that you're gonna go do?

Rob: Yeah, you'll find me Rob Swanson on Facebook. And that's where I'll be doing it. What I do a lot, Joe, as you know, is I do trainings inside of our private freedom soft community. But this is something that I'll do to the public.

Joe: All right. So just go to go to Facebook, do a search for Rob Swanson, and you'll find that Facebook live, even if you're listening to the recording of this. You'll be able to go back and look at his. Videos. That's right. Find this live Facebook live there. Rob, I really appreciate you taking the time to talk to us. I feel encouraged, man. You know, this is one of the cool things I love about this technology that we have today to interview and see and get educated on podcasts and videos and like that is, it's not all doom and gloom. And this is where you guys need to be plugged in. Turn the news off. Stop going to Drudge Report. You know, stop going to Fox News and NPR and ABC and MSNBC and all of them. They're just going to bring you down. They're going to they're going to discourage you. You're going to get scared. They have a, that's how they sell. They're in the business of scaring people. Right. That's right. What do you need to be above that? You need to stay positive. You need to be encouraged. There is a ton of opportunity out there and you need to pay attention and look for it. And stay with guys like Rob on their Facebook pages and these YouTube videos and Facebook posts and podcasts and stay encouraged. Simple. And that's books coming out. What's the name of the book again, Rob?

Rob:It's called Cash in: What to Do Before, During and After the Next Housing Market Crash.

Joe:Good. All right, guys. Thank you very much. Rob, appreciate it. We'll see you all later. Go to Rob Swanson.com/2020 to get Rob's book or go check him out on Facebook. We'll see you guys. Take care. Thanks.