COVID-19

2 Wealth Show: COVID-19 

Super E and Justin chat with Mark Dolfini about COVID-19 and how it affects real estate.  

Key Takeaways:  

1. Lunacy Going On = Marketing in Different Ways
2. Real Estate is a People Business
3. Alternative Investments

 Resources and links discussed  

• Videocast on BrightPath Notes YouTube Channel 
• Videocast on Elizabeth Maora YouTube Channel 
• BrightPath Notes Website - https://brightpathnotes.com 
• Elizabeth Maora LLC Website - https://elizabethmaorallc.com
• LandLord Coach Website - https://landlordcoach.com/members

 Sponsored By: Integrated Health Solutions 

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To learn more visit us at  

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About the Hosts 

Justin Bogard – Note Investor specializing in performing Residential Real Estate Debt. He finds deals and acquires them for his own portfolio as well as educates investors while walking them through the process of owning a Real Estate Note!  

Super E – Real Estate Investor specializing in short-term rentals and the management of them. She connects investors with short-term tenants and manages everything in-between.    

Connect with the Hosts: 

• @2wealthshow – Facebook/Instagram
• @wealth_show - Twitter

Transcript

Justin Bogard: 0:04

Welcome to the two wealth show, a show that shares how you can create real wealth for you and your family. I'm one of your hosts, Justin Bogard and my cohost is Elizabeth Sickles, AKA super E. I am a real estate note investor specializing in performing residential real estate debt. I find the deals acquire them from my own portfolio as well as educate investors while walking them through the process of owning a real estate note, my cohost, super E, a real estate investor specializing in short term rentals and the management of them. She connects investors with short term tenants and manages everything in between. Our show was sponsored by BrightPath notes and Elizabeth Maora. You can find out more information by visiting our websites at BrightPathnotes.com and Elizabeth Maora.com all right. Hey everybody, this is Justin Bogard from the two wealth show and my cohost

Elizabeth Maora: 1:10

Elizabeth Maora-Sickles. Hello.

Justin Bogard: 1:12

I had to get that right over there and then Whoa, here we've got mr Mark Dolfini who's our special guest today. Thanks Mark for coming on today. I'm glad to be here. Thanks for having me. You're welcome. So we've got some things going on around the world right now, right Elizabeth?

Elizabeth Maora: 1:32

We do.

Justin Bogard: 1:33

So this uh, this covid-19 virus is obviously affecting everyone everywhere and every market and everything we do. And so we want to release this episode just basically talk about this and how it affects our different areas. So I haven't heard about it. What is this thing? Oh you haven't heard about it or virus going around. You may, you may have gotten it from mine. I think my phone is infected. Your phone may be infected. You may need to disinfect your phone and your computer Mark.

Elizabeth Maora: 2:02

Good luck finding the wipes on that one.

Justin Bogard: 2:04

Yeah. Yeah. There's no such thing. There's no, they don't make white strong enough for that. Well I'm glad we can joke about this stuff cause this is a very serious subject and it does affect a lot of people and it's scary and you hear a lot of stuff and social media, you hear a lot of stuff on the news. Yeah. You know, controversial things and different sides of this and good and bad and horrible and it's just minor. And I don't know, Elizabeth from your side of things, why don't you kind of start with this and just kind of tell us what you found out?

Elizabeth Maora: 2:36

Sure. So for us, everything was really pretty calm until last Wednesday night whenever or whenever they canceled the big 10, the NCAA. So we're here in Indy. March is the start of our busy season. Huh. So we were on track to have a really phenomenal month, um, as of right now. So, um, we've had just over$30,000 in cancellations. Wow. Yeah. It's pretty severe with my business. Um, what we're doing is we're remarketing in a different way. So we're marketing towards healthcare professionals that are still working. We're also marketing towards the people that are now cooked up with their family that are not used to spending that much family time together. So we're, we're pivoting as much as we can to meet what the current needs are. We also, we have a phenomenal relationship with our cleaning team. My cleaning is third party, but just as much as part of my team as my immediate staff. Mmm. They're doing additional precautions as to what they already did. Um, so we're cleaning has always been a top priority for us, but we're just, again, just adapting to be, um, to make sure that our houses are kind of percent sanitary. Um, but overall it's kind of interesting because what I think is going to happen with the short term rental market is I think that eventually when all of this passes, it's going to be actually stronger than ever. And the reason is because you have so many less people going out of an individual house or an apartment then what you do now. So what I've told my team is we are business as usual. Of course taking the precautions with the CDC. Yeah. And with what the who is recommending. But from the beginning, I was in this for the long haul, um, from what, even when I started the business. So my team is still, we are 100% focused on our clients where the property owners and to our guests. I'm for this, but it's very devastating, is probably the best word to use right now. Um, but we are, we're still glass half full, as Mark said, as we were doing some free show things. But that's kind of where, where I see it going. Okay. Mark, you are in a slightly different market then, but still in real estate. And so talk a little bit about how this has affected you.

Justin Bogard: 5:01

Was last Wednesday you said? Yes.[inaudible] from your perspective, what was the turning point?

Mark Dolfini: 5:10

Well, I, I don't, I don't know that we've experienced a turning point yet for us just because, um, you know, we're on a, we're on a, you know, our, our pay cycles a little different, right? So, um, you know, we were in the middle of the month, um, and the, Mmm, you know, that the pay cycle hasn't been interrupted yet because April's rents haven't come due. But, you know, we were already, I mean, we were, well, I'm going along pretty good, but what I'm seeing is obviously the velocity of money has basically come to a screeching halt for a lot of people. Mmm. So where I'm seeing the biggest, um, the biggest impact is on our maintenance side because we get a fair amount of revenues that generate from our revenue or from our maintenance side of things. And, um, there's people that just won't let our maintenance guys in. So even if they're just doing regular inspections, um, you know, to come and I get it. I mean, I want to keep my maintenance guys safe as much as I want to make sure that the properties are maintained. But, um, you know, people were like, you know, whatever, whatever maintenance thing, you know, we will live without a washing machine for awhile, you know, if that means that we don't have to, you know, turn something in. So, um, you know, or have somebody in the house, it's going to potentially be infectious.

Justin Bogard: 6:23

Yeah.

Mark Dolfini: 6:25

You know, so that's what we're seeing right now.

Justin Bogard: 6:27

Okay. So for those of you that don't, I'm sorry, a little bit, I was going to probably just rang Mark who he is away does a little bit first. Um, so Mark you are, uh, I see in the background, you have the green screen up that says landlord coach up there room beautifully written. And so Mark kind of explained like basically the, what you do in real estate. So they, everyone kind of knows, everyone knows what super e does and kind of framework quickly what, what you do.

Mark Dolfini: 6:54

Yes. Well really I don't do a whole lot if I'm doing this right. I don't have to do it, you know. Um, but the, the, the concept for me is I have a property management business. Um, it means a lot of my own properties that I have, but, um, uh, but I also do some management for others. So, Mmm. W we that and that, you know, from that side of things. Um, you know, where I used to work about 20 hours a day trying to keep it, keep afloat. Now I work in my real estate business about two hours a week. So the, the whole, um, you know, the whole concept of, one of the things I teach is about people who get into this business when the real estate business is the context of being time wealthy. So they're not spending all their time on income generation and going out and living their actual actual life that they actually want.

Justin Bogard: 7:40

Right. Thanks for, for sharing that. Sure. Elizabeth, I cut you off. I'm sorry, go ahead. You were going to chime in about something.

Elizabeth Maora: 7:48

Oh, I just wanted to ask Mark, have you had any of your residents or tenants asked about a decrease yet in their payments for April with reduced hours?

Mark Dolfini: 7:58

Now we're going to do that. We're, we're putting together a protocol for something like that. I mean, I've been watching, you know, I'm a part of a lot of different feeds in terms of what people are doing. You know, what their plan is and it's, you know, some of it ranges from sublime to ridiculous, but Mmm. You know, I don't, I, I think what people need to remember, regardless of what business that you're in, in the real estate side of things, real estate is a people business end of story. And if you just remember the human side of this business, you know, you can, you can take a hard line stance. I think that's going to yield you not the results that you want. I mean, at the end of the day, you know, I think if you're, you know, yes, we've all got bills to pay, we've all got, you know, stuff to do. But at the end of the day, you know, yeah. We could easily go back and say, well, you should have had health insurance while you should have had disability insurance while you should have had. Well, the reality is most people don't. So, you know, and, and many in the, in the, and I don't say this in a mean way, many of those who are renting are renting because there, you know, either not in a position to buy or they just, they don't want to buy. Mmm. When some people are in, they're financially stable. But other people are not. And as a result, you know, you're looking at least anywhere from 30 to 60% of the people who, you know, it wouldn't have a, they have no other option but to rent, you know, depending on the market that they're in. Um, so I'm, I think at the end of the day, you need to remember, you know, that this is a people business. So what we're going to see what the protocols that we're going to put in place as we're going to, we're going to look at every situation on a case by case basis. Um, and it's not about, you know, being variable. We're going to underwrite their situation. If someone is in the healthcare field and you know, they don't need, Mmm. They don't need to be, you know, they're going to pay the rent, you know, as normal. Okay, fine. Yeah. If you're in a, in an unusual situation where you're not going to be able to make money, okay. Then just all we're asking is just, you know, come to the table with something, come to the table. That was some, you know, proof of loss, just like an insurance company would, you know, I don't go to my insurance company and sit and walk into the office and say, Oh, I wrecked my car. And they go, Oh well let me write you a check. No there's, there's, there's protocols for that, there's proof of loss. Let's, let's walk through this together as a transaction and we'll just figure out the best and most, reasonable way to approach that.

Justin Bogard: 10:27

And I think that's the best way to go about it. Yeah, I 100% agree. I've been, I've been reading a few things online and researching some stuff and it looks like no, either state level or federal agencies are wanting to encourage, uh, banks and encourage landlords and property management companies too. Not really forgive rent per se, but kind of push, push rent back maybe and then catch up when they can. And so I like your idea, just taking a case by case and then this happened. A tenant or the, the person there that is the, you know, paying the mortgage parent about their situation and say, Hey look, cause I haven't really been affected yet by, I can see, you know, and April that was really going to happen. But for right now, everyone paid their margin. They're in a Middlemarch payments ever wants you to take up in that. But of course, you know, we're, we're focusing on our assets are lower or lower and value. So payments coming in to being 300 to$600 a month. Not large payments, uh, per se. But yeah, I mean it's just, you know, being the bank, we have the ability to kind of create the rules or change the rules as we want to go so we can, you know, forgive some debt if we want, we can for bear payments if we want to, defer payments to the end, excuse me, of the amateurization schedule. Keeping on the interest is always accruing, but it's, you know, it's going to be nominal compared to paying a school full month's mortgage. So there are options for us and it's only going to benefit them and the ones that deserve it, they deserve it. Right. The ones that don't really pay or they skip paying, well they have a habitual Late history there, you know, that's just what they normally do and they're looking for,

Mark Dolfini: 12:15

right.

Justin Bogard: 12:15

We will. And so I like taking things by case by case basis. So I fully agree with what, how you're approaching,

Mark Dolfini: 12:22

which is exactly the point. Like, you know, um, you know, if they've been, if they're late anyway, you know, and they've been for last, yeah. Every month for the last six months. I mean, yeah, I will grant them some grace, but not as, I mean, it's, again, it's just going to be different because you know, they're, they're, you know, they're just have bad money management versus an actual real hiccup. I mean, again, they're probably, you're going to be impacted much, much harder because of their situation because they don't manage money well. And all this other stuff. But, you know, I, I think that we just need to look at this as the trial that it is and you know, and, and walk through this. Yeah. And we will, we'll come out on the other side. I mean, you know, there's got to remember there's going to be some people who are going to lose loved ones over this, you know, and the reality is that, you know, most of us are going to get this end of story that most of us are, the only thing that does quarantining is doing is slowing it down. Yeah. So that way we're not getting this huge run up of sick people, you know, that are gonna um, overwhelm the healthcare system. We just want to spread it out and I get it. Um, what has me concerned is how long this will last. Because I think the fact of the matter is, you know, if, if we can get it, I'm a, I mean, I was kind of thinking today, and I know this is more of it as this might sound, I'm, I kinda thinking like, I kinda just want to get it so I can get it over with. Right. You know, like, yeah, like I, I just, I don't want to be wondering if every time I get a fever, you know, like, am I hot or is it a fever? You know, like, I don't want to freak out about this anymore. I just kind of want to be done with it. But, you know, but the, the fact of the matter is the three of us that sit here are in an age group that we don't really have to worry about getting it. 98% of the people that get it. I mean, it's going to suck. It's the flu, you know, I mean, who likes symptoms, but it's better than cancer, you know? I mean, we're, you know, we're, it's better than Alzheimer's. Which has a 100% mortality rate, not a 99, 98% survival rate. I mean, look at it that way. So I think from when you're looking at it from, from that aspect, you just really have to see this as we got through it. I mean, it's going to be a blip by, you know, by June or July. Hopefully by the end of next week things are going to start to take back up and we're going to, um, you know, we're just a, there'll be a blip on the radar, but I do believe this is going to be, I think the effects of this going to be felt

Justin Bogard: 14:52

for quite a few months. Um, I, I can't say it's gonna be a blip on the radar financially, but I do think it's going to be, we'll get past it and then when we just need to figure out how to they get dig out of it. Yeah. I see. I'm trying to be optimistic about it and I'm trying to position our company to where, um, we can be at the right place at the right time and was having some phone calls and some conversations with some of my mentors. It seems like the path that we're choosing to go down is this, the position ourselves for the fact that the market, it's just gone down so much that the volatility of it turns people more and more on to an alternative investment like real estate or like no's or short term rentals or having property management or rentals and just makes it more attractive. So I think the money out there is gonna move, um, very fluidly to a place like this. Well when the dust settles and so we feel like capturing private money is going to be, uh, huge. They need to go after it and be able to make both parties happy so to speak. So investors are going to be looking for opportunities to deploy their capital. They were already doing it didn't work out so well for them in 2008, 2009 era. And then now the last couple of months, I would say things have taken a dip. Anxious money. Yeah. I think the difference here though, there are some fundamental differences between now and 2008 and 2009. Number one, liquidity is very, very high still. There's, there's a lot of money in the market now. There's going to be less money in the market, less liquidity in the market, but there's also not an oversupply of housing, right?

Mark Dolfini: 16:37

Oversupply of housing was what really crushed the, uh, the markets last time. So you didn't see, you don't see that now. I mean, there's a, there's a very, very strong demand for housing[inaudible] because it's, it's, it's based on an actual demand. It's not based on, Hey, we're just building more and more housing. So I think that's a fundamental difference is that there's lots of liquidity in the market. Now, again, a lot of it's dried up because you're looking at it 30% decline in the, you know, in the stock market where a lot of liquidity was. But I still think that there's going to be a lot of, I mean, money's still going to be fairly loose. You've got very cheap money out there right now. If anything, I'm going to be a little bit more concerned about a deflationary environment given where the interest rates are and that that's a whole other conversation. Not to make this an economics discussion, but I have a little bit more concerned with that. So I would be really, really concerned about, you know, lowering prices too quickly, they know to, to accommodate renters and stuff like that. I would just[inaudible] um, that's, that's gotten me a little bit more concerned about a deflation cause deflation will crush this economy way faster. And then the hyperinflation, hyperinflation, MRT, I mean there's a Goldilocks zone, right? Some inflation is good. No deflation is good. That's like, that's, that's just not going to be good for anybody. So that's probably got me a little bit more concerned, but know, I don't think we're there yet. I think even if we look at this[inaudible] attracted, you know, where we've got two or three months of this. Yeah. Then you're going to be looking at horrible impacts across the, across the globe. But I don't know that we're quite there yet. Um, but you know, I, I think there's a tremendous number, amount of opportunity for people that are paying attention and, um, and, and we're, you know, you can really help some people. And I don't mean to sound as predatory. I mean it's truly that you can help people in ways of, you know, helping them get out of properties and get into other properties and just make, make it a win, win for everybody. Right.

Elizabeth Maora: 18:31

I also think on the opportunity side, Mark you're having, obviously we all lived through 2007, 2008 and nine and I was in Detroit, um, at that time whenever we had that, that really was not good for my, for my city or anything like that. But now, just having lived in that, and it's so funny because I remember having a conversation with my neighbor and I said, Oh, I would never invest in real estate. And now that we're in this, which is, you can't compare it, right? Cause it's so much different. But some of the underlying fundamentals are the same. When, when at that point, you know, told me years ago I was like, Oh no, I'm not investing in my money and now like I've already made some plays in the stock market on things that, I mean now's the time to go shopping, right? And now it's also the time to figure out, okay, if you are a real estate investor or if you're thinking about getting into real estate Israeli, okay, where can I position myself the best? Because when we do come out of it, just like we always have in the past, it's all the history of the U S and of the world is that things are going to get better. Is it going to take a little bit more time? Maybe it's going to take a lot more time, we don't know. But at least be smart about what you're looking at and about the future and where things are going to go.

Mark Dolfini: 19:46

Yeah, absolutely. I think the fundamentals of the economy are still good. I mean, we're not, I mean, you know, we always talk about that when, but things are bad. But you know, there's money that's going to rotate in and out. I mean, there's a lot of Chinese money. I mean, that was, that was being invested here. Um, which is obviously part of why the interest rates have been driven down so much. But Mmm. You know, I, I don't, I don't know that, um, you know, cause they were buying up our debt, you know, that's kind of how that was working. But I don't really know that. Mmm. You know, again, there's just too many variables right now because we just don't know when things are to, are going to loosen back up. Um, you know, from what we understand, and I was reading, I was going on a, this is through the CDC website. Um, there was a video that was published three days ago. Not granted information is changing all the time, but this was from a surgeon that was basically talking about, you know, the reason why this is weekend, we got a flat in the South, so we're not in this wartime crisis of, you know, you know, who's more likely out of the two of you, who's more likely to live. Okay. You get the ventilator and you doubt, right. Um, that's a wartime scenario that Italy is going through right now. And that sucks. Um, and I, and I pray for those people because just, I mean, just the healthcare providers to have to make such a decision. That's what we're trying to avoid here. And yeah, the demographics, you have to consider too, that the demographics of China are very different than the demographics of the United States. And, you know, we're not a really particularly healthy people, um, you know, in our forties and 50s.[inaudible] you know, it's just, we're different. We got hypertension and all these, are there other things that are going on these diseases because of our lifestyle. And um, you know, it's, it's just gonna be interesting to see when things start to loosen up. Cause when you start hearing about orders being sealed off and people not being allowed to travel and things like that, um, that's got me very, very concerned. But we're not there yet. But again, you have to kind of see like, where is this? Where's this all going? Um, I, I, I can say, you know, it's funny, I can say that there's a lot of people who are jumping up and down about the, you know, the lunacy that's going on. Mmm. I think the lunacy that's going on, it's just like people just freaking out, going out and buying a pallet of toilet paper. Right. You know, I swear to God, I'm gonna make my next next real estate deal to include the toilet paper in the, in the property. You know, Elizabeth, does she charges per square?

Elizabeth Maora: 22:18

Have a guest on Sunday that stole the toilet paper I had ou

Justin Bogard: 22:22

That makes sense. You should have it just be the real deal paper. You know, the paper ones that are just spent like at school and stuff. They do take it. I see you shifting Elizabeth. I think that's, I think that's where you go from super E to Charmin. I like that. That's good. Well we, uh, we had a real good discussion here today and thanks for coming on. And real quickly, let's, let's talk about how this is affected personally. So sitting here today, all three of us are at a different location. Uh, I met in my home office. It looks like Super E is at her home office, you're at your home office. They've all obviously had to make adaptations to our everyday business in life. So for me it's been kind of fun learning how much I appreciate teachers now with the e-learning going on and we have four kids here and uh, it's, it was a learning experience for me doing this e-learning stuff. So it's been fun though. I've actually enjoyed being around the family. Yes, look over and I could see, you know, what's going on and kind of hang out with somebody for a few minutes. And I've also learned that the drive time has condensed to basically nothing. So I don't have to travel to an office, I don't have to travel to meetings. So I've gotten my windshield time, so to speak back. I'm actually able to get just as much done in a day as I was being in the office, even with the distractions of being at home. And so for me, I think that the adapting of it has been kind of interesting, but I've also learn that, you know, communication and doing this stuff is making myself just as efficient as it was working out of the other office. Super E. What are your thoughts on that?

Elizabeth Maora: 24:21

It's going to be very challenging for me because I'm such a social person, so, and I don't have anybody in the house, right. I don't have kids yet, so, Mmm. I'm still still working a lot, you know? Right. Um, but I am looking forward to reading some books that I've been wanting to read and just like take a breath, really stop and do some strategy also for it. A lot different strategy than what I thought I was going to be doing. So I'm just kind of looking at it as, as a plus as well to make the best of it. And I'm actually cooking, like I actually took my dinner. So I think it's all what we make of it. Right. So I'm going to enjoy it.

Mark Dolfini: 25:07

Mark, what do you think? I think I saw a bead of sweat at or forehead when she is like, I'm actually cooking like, you know, it's funny I, and I'm not a real biblical person, but it's funny, I found myself opening the book to the book of James today, which is actually about all about trials. You know? And it's funny cause I am, I'm probably the worst Bible scholar ever in the history of ever. Um, but it was kind of like, I was like, wow, this again, I don't believe in any coincidence when it comes to that. I was just like, huh. Interesting. Right. So is this an interesting trial period that we're all in right now? But you know, for me, I, I've, um, again, because I'm just such a, you know, a disgusting optimist, you know, and, and I, my natural tendency is to make light of things. Mmm. But it is serious. It is serious for people out there and, but, um, but it doesn't mean that we can't always try to look at the positive side of things. Um, you know, I had a conversation of very, uh, you know, from a personal side, and I, and I, even though this is business, some people could argue it's business, but I did have a conversation with my staff today individually and I said, you know, to all of them, you know, we are going to need big sacrifices. We are going to need to make to do some things differently. I don't know what that means.[inaudible] don't, you know, we are going to need to trim back on hours a little bit. No one's being laid off. I mean, as far as I can prevent. But you know, just know that I need you to come to me before something turns into a crisis. And I think just having that conversation, you know, like a conversation with vendors, you know, we need to, normally we are, we're on a seven day pay with all our vendors. And I've had the conversation with some of my, some of my vendors that were my smaller vendors, we might need to push that out a few weeks, you know, just because the velocity of money has slowed down. Um, you know, and I want to treat my vendors well and these are people that, I mean they look at us like, like a paycheck, you know, they, they don't, they don't have to wait 30 and 45 days, like, like with other, what other vendors or with other suppliers like, uh, other property management companies and other, and other people who are landlords, eight, they're on a 30, 45 60 day pay schedule. They look at us like a paycheck. So they're very, very loyal to us. But we've had to have that conversation. This says, just say, look, it's not that we don't want your work, but we just, we're not getting the money in. And there's no reason to hold onto it. But we just, we may have to kick it out a little bit. No, I appreciate the conversations, but these are people that I want them to know that we care about them, we care about their families. And um, so that's where we'd have that conversation and um, and I think having the conversations is better to have than not have and just to just people know and just so they know what's going on. Absolutely. Mark, thank you again for being on this special episode with us today. We're all kind of quarantine this worked out great to have this communication tool to where we can still talk and do, do what we do every day and be able to provide some information, different aspects of real estate and how it affects us. I thought it was a great conversation today. I hope everyone stays safe and healthy out there and you know, until next time I'm Justin Bogard Elizabeth and, and Mark Dolfini landlord coach. All right guys. There you have it. Thanks for tuning in and don't forget to go to our[inaudible] video channels. Bright path notes. YouTube and Elizabeth Maora YouTube channel

Justin Bogard: 28:32

Two wealth show is produced by Justin Bogard and super E sponsored by BrightPath notes and Elizabeth Maora. Thanks for listening and watching for our show.