2 Wealth Show S2 Ep7 – Real Estate Resilience
Super E and Justin Bogard "debate" in the 7th episode of season 2.
Key Takeaways:
Resources and links discussed
Sponsored By: Integrated Health Solutions
We are passionate about your health and wellness and we know you want to enjoy a vibrant, pain-free, active lifestyle, but when you are in pain this seems almost impossible.
In order to be pain-free, move fluidly, and enjoy an optimal level of functionality, you need a personalized yet integrated, research based and clinically proven approach and that’s what we do.
To learn more visit us at
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:
2 Wealth Show S2 Ep7 – Real Estate Resilience
Super E and Justin Bogard "debate" in the 7th episode of season 2.
Key Takeaways:
Resources and links discussed
Sponsored By: Integrated Health Solutions
We are passionate about your health and wellness and we know you want to enjoy a vibrant, pain-free, active lifestyle, but when you are in pain this seems almost impossible.
In order to be pain-free, move fluidly, and enjoy an optimal level of functionality, you need a personalized yet integrated, research based and clinically proven approach and that’s what we do.
To learn more visit us at
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:
Welcome to the 2 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 for 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 is sponsored by BrightPath notes and Elizabeth Maora. You can find out more information by visiting our website at brightpathnotes.com and Elizabeth Maora.com Hey everybody, this is Justin Bogard from BrightPath notes co-host on the 2 wealth show and
Elizabeth Maora:I'm Elizabeth Maora Sickles with Elizabeth Maora.
Justin Bogard:Hi Elizabeth, how are you?
Elizabeth Maora:I am great. How are you today?
Justin Bogard:Doing pretty well. I did get a stimulus check today. Yeah, that was, I wasn't expecting that. It just kind of showed up in the bank account. Hopefully it wasn't fraudulent.
Elizabeth Maora:I didn't know they were going to get so get out so quickly.
Justin Bogard:I didn't know either. I was, I wasn't anticipating it going straight to my bank account, but that was a nice surprise. So, Hey, I'll take it.
Elizabeth Maora:Excellent. Yeah, so everybody make sure you check to see if you've gotten your stimulus checks.
Justin Bogard:That's right. So Elizabeth, this is episode seven of our second season. And um, I know you and I know this, but maybe if some of our viewers don't know this, but we've already had over 100 downloads on our podcast. Thanks everybody for listening. We appreciate it. And that doesn't include our video casts that we have on our YouTube channels that just, just about our podcasts, um, podcasts, you know, whatever you call it, the podcast directories, I get them confused. I'm still new at this too, but we appreciate everybody listening and sharing and liking. So thank you very much. Absolutely. It's, it's quite an honor to have people actually make comments and listen to you. It'd be like, okay, well maybe what I have to say resonated with somebody and that's good. That's all we can ask for, right?
Elizabeth Maora:That's right.
Justin Bogard:Alright, so Elizabeth, what do we have for episode seven today? What do you want to get into?
Elizabeth Maora:So this is the middle of April, just so you guys know when we're recording this and we're going to talk about what we feel are going to be the opportunities coming forward whenever we get out of this quarantine. And so, and what's interesting is that Justin and I are on, we think what's going to happen is very different. So it'll be a lively discussion. I'm not no yelling or anything like that because we respect each other, but we're going to be really interested to see what you all think about this as well. So it should be a very good topic.
Justin Bogard:Well, let's, let's get right into it. And, um, so just for background clarity for those that you, that may not have listened to all of our episodes in the first season or the second season, um, meet Justin Bogard. Here. I am a real estate note investor. So I invest in the debt on real estate. So things like mortgages, uh, trust deeds. And so our finance paper, like land contracts and agreement for deeds, those, that's the type of paper that we invest in. We also help create it and we sell it as well. And Elizabeth, give us a little bit of background on you.
Elizabeth Maora:Sure. So we do all things from rentals. So we do all the designing, construction consults, furnishing and then um, coaching, teaching and um, all the hosting of property management.
Justin Bogard:Right on. Okay. So Elizabeth from your world, we're both in real estate and I think, um, we both can agree and I'll let you, you talk to this point as well, is that there is a problem right now. There is a, I don't know if I would call it a crisis, but there's definitely a problem. Now there are people that have lost jobs. There are people that have lost income because maybe their business doesn't receive of income because they may be non-essential. And so that causes a problem for the business's employees as well. And so I believe that when we come out of this quarantine that there are going to be some opportunities. Mmm. And those opportunities I believe are going to be in the, in the, I don't know how to word this. I guess I would say in the lending there would be a lot of opportunities. And what I see happening is that a lot of people, the working class in the middle class are gonna need some help with, uh, either purchasing a home, maybe refinancing their home or figuring out how to get in a different home because maybe with their job situation or their income situation, things have decreased for their household income. And so they may have to figure out a new solution. So I'm being proactive and I'm preparing for the fact that we're going to be ready to help, uh, borrower's out. And we're going to be starting to lend, uh, on homes to be the private bank on their property, meaning these bigger banks. And I've kind of seen it with chase was sending out a few, excuse me, as fuse messages through social media and stuff, is that they're getting tighter with their limiting criteria. They're going to be requiring more down payment and they're going to be a little bit more stringent because they realize that the days of, you know, the smaller down payments of maybe like 1% or a few thousand dollars down, it's probably not going to be a viable solution for them. And so I see this as potentially a borrowers are gonna need to have more cash to put down on, uh, properties so to speak. So that's kind of my quick take on it. Elizabeth, I'll kind of let you jump in and give me your take on it.
Elizabeth Maora:Sure. I think that we're going to see levels of foreclosures that are way past what we saw in eight, nine, 10 and 11 because not only is this, I mean there are businesses that are shut down and they're not going to be opening back up. And if you think about to the car companies, I was talking to one of my buddies in Nashville, so Nissan there has 8,000 employees. And at first they said, well, you know, we're going to be able to bring everybody back. But just two weeks ago they said, well, we think we can bring 2000 people back, 6,000 great paying jobs with benefits that are gone. And two, we have all these elective surgery. So we have doctors that are used to making excellent money, anesthesiologists, nurses, all of that, that they're not, they're not working at all. So, and just what I've seen, I mean it really started hitting here in Indianapolis, March 11th was whenever they said, Hey, we're going to cancel the NCAA. So that's when our cancellations started coming through. Um, I don't, I don't even think we've, we've begun to see what's going to happen. So where, so there's always opportunity. So I want to make sure people understand opportunity. You just gotta be ahead of it and be prepared for it. So I agree with you, Justin, that there is going to be a ton of opportunity in the private lending because one of the other things that happened that has happened with FHA loans, that these numbers are not right. So don't quote me on these, but what it was pre 19 was you had to have a credit score of either five 20 or five 40 and as of the beginning of last week, they had already raised that to either six 20 or six 40 that's huge. That's for FHA. FHA. Yeah.
Justin Bogard:I think it might've been six 20 to six 40 was the, was the bar and that might've raised a seven 27 40 or do you think it really was five 20 to six 20
Elizabeth Maora:yeah, it was. It was a lot lower. So if my numbers are right, so I apologize. I don't, I should have looked it up. I didn't think about it. But at any rate, there's a big jump in what they're going to have qualified for
Justin Bogard:and that's that a hundred points on the credit is a big jump.
Elizabeth Maora:That's huge.
Justin Bogard:Yeah. So, so Elizabeth you mentioned something that, that I probably disagree with more than anything you said. Um, and I do agree with both on the same page about opportunity and real estate and lending and the foreclosures I believe will go up. Uh, I don't believe it'll go up to the magnitude of the 2009 2008 financial crisis where in 2010, 11, 12, there was just a big influx of housing foreclosures. Um, the way I see it, the way I saw it, uh, with, with stuff that I've studied and talked about is that that was truly a financial crisis. Meaning housing was overinflated as in 2006 to where houses were just worth a tremendous amount worth than they were a few years before that. And the lending criteria was so, Mmm, what I want to say light. I mean the, the saying, um, used to be Elizabeth was if you could fog a mirror, you could get alone. So somebody made$50,000. I'm just throwing that out there. They could get like a half million dollar home or maybe two of them. I mean, it was, it was that ridiculous to where people were completely over leveraged and they were, they over the banks, overlend, to borrowers. So I definitely saw that financial crisis as being a huge foreclosure opportunity because it made that made sense to me. You brought up some really good points about the elective surgery, um, folks in the, in the health industry and the people in the, in the car market that you mentioned, um, that that is going to be a problem. That's going to be the reason why some foreclosures tick up. The national average for foreclosure before March 1st was about 3.2800000000000002%. Okay. At the peak of the 2009, 2010, you know, crisis with foreclosures, I think it was around 2010 and February, the default rate was 11 and a half percent as a national average. So that means, you know, 88 87% of the homes across America, we're not in foreclosure. Okay. Sounds much better. Right? But when you're living through a default, it doesn't sound that good. So this crisis, we'll call it a crisis. We have going on right now is a, um, a pandemic. It's a virus or health-related and I do see foreclosures going up, but I don't see foreclosures going up to that magnitude or even worse. I have read a lot of things where people think that we're going to go into a depression as if we've never seen a recession, as if we've never seen before, like the great depression in 1929. Mmm. I'm not an expert, uh, an economy major. I can't see the future, but with the data that I have in front of me and what I'm seeing today, I don't really see that happening. Um, I'm grateful that the government is able to, you know, help bail out, uh, small businesses and help keep things moving in the wheels greased for, for the payroll stuff. I don't know if you've done the payroll protection loan or anything like that. Uh, we, we applied for it as well, uh, just to get things going and it does help kind of move the needle a little bit past April, may just to see if things calm down. But for, from my perspective, Elizabeth, I don't see foreclosures being as large as it was. I think worry typically stay between four and five and a half percent as a national default rate for foreclosures. And I think we may get up to five or 6% in the short term at the kind of the tail end of 2020 but we'll see. I've been wrong before. Um, but that's kinda my stance on it. So I definitely seek, think there is going to be, foreclosures are going to go up, but I don't think it's going to be that magnitude. And that was kind of the reasons why.
Elizabeth Maora:Well, I think too, so I went on Monday and so for our houses that are vacant right now, um, I'm going and checking them every week to 10 days, just, you know, making sure everything's okay and so interesting because there's still construction people at working because that's an essential business compared to the last time I made my rounds to on Monday, there were less houses being worked on. You know, we just had Disney that announced two days ago that they're furloughing 43,000 people. So the cations of that, I mean just think about all the suppliers. Not only do you have food, but you also have the vendors that make the costumes and the laundry detergent so consumable. So this isn't just a, Oh well people aren't going to be going to Disney world right now. Everything that the supply chain is unbelievable for those. Um, so I, I think, and I do think that our real estate, it's kind of a suit case I've listened to a lot of different opinions too, but I think that our real estate and what, you know, cause you've seen the prices in fountain square. I mean God's just since I've been here, how much they changed and how much they kept going up and up and up. So I personally think that we're going to have a huge correction on the pricing of properties as well. So I would say that if you do have properties that you want to get sold, it's probably the sooner the better to get them on the market and make sure that you're getting your private financing in place now because, um, I don't, I don't think that just personally, I don't think that we've begun to see the fallout of all of this.
Justin Bogard:Yeah. And then you bring up some good points, Elizabeth, and there's some things that I haven't looked into and this is why the conversation is so good. The debate, we'll call it a debate between us because there are things that you see that I don't see and there's things that probably I see or have seen that you haven't seen as great to have this conversation because you are changing a little bit of my tone about, you know, how serious the ramifications can be. And I just keep going back to what, but what is the U S population today? What do you think it is?
Elizabeth Maora:Oh, I don't know. I just know, um, a hundred million or um, or not a hundred. I don't know. Yeah, it'd be, I wish I had some data points to that as well, but I guess what I'm getting at is there is a, there are markets and we both can probably point them out with on one hand the, the markets that are super overinflated across the country and those markets, I believe the overinflated ones, like on the West coast in San Francisco, point that out because it's the most obvious one. Um, that one's definitely going to get hit with a correction and I firmly believe that, but I don't believe every market will get hit like that. I just consider it in pockets. There's a lot of rural areas across the country that won't be affected that much by this because they haven't appraised in value dramatically. Like some of the other cities have. Like, you know, Denver and you hear about Phoenix, those are really hot markets in Seattle where super hot markets and those I think we'll get, we'll get a firm slap in the face if you will.
Justin Bogard:And I think those markets will get corrected. And that could be the bulk of our foreclosures that come through. Um, if, uh, people don't have, you know, solid equity in them and are over leveraged at that point. But, you know, it's, um, it'll be interesting like, uh, I've talked to a couple of people and I've looked at our portfolio for our notes and I've looked at a couple of other people's portfolio with their notes and I have some, some solid data to go off of and I haven't seen the borrower's be affected yet if they will be in March and or even April as of today, we still have payments rolling in. It seems like our portfolio is nearly what it was in February, January and the months before that, which is a really good sign to me, but maybe it's too early to tell, but for right now it still looks pretty strong. Um, I was talking to some other folks and they're more doom and gloom about the mortgage and the note business, uh, for their own reasons. And maybe it's because they're seeing it from their perspective and their portfolio is maybe hit a little harder. And I've heard some people that have a rental portfolio that they've only had 30 or 40% of their rents go in. And then I've heard another person say, well, I've had 85% of my rents come in and I've kind of come to the conclusion that how you vetted and how you screened your borrower and or tenant before February or before March of 2020. It probably plays a significant role of how your cashflow is coming in. Um, you know, during covid19 and post covid19. Um, that's kinda what I'm, what I'm seeing with, with the two months of data that I have in front of me and talking to different, different investors. So I think, um, the people that will come out ahead of this, not varying escape very much, probably had very good strong practices with their business model and how they, um, that it, you know, tenants and screen tenants and borrowers and created, uh, their cashflow stream that way off of that. So we were very, um, I don't want to say conservative with the loans that we picked out for even our portfolio, especially our investors. And so I think that bode well so far, you know, make it be a totally different story. Well, give me some wood to knock on real quick, you know. Um, but that's, you know, so from my perspective, I'm not seeing things hit very hard just yet and I think there will be, there'll be some tougher times. Um, but I don't, I don't see it to be in that magnitude just yet because it seems to me, and this is just from my perspective and look in the little town that I live in and lapel Indiana, is that there's a lot of folks still out there working and there's a lot of trades people still working in service providers still working. And it seems to be the real estate that we invest in, um, for this side of the business is more of like working class homes and working class folks in working class areas. And they seem to have money's still coming in and which is, which is a good sign, which I see it as the bulk of, um, our real estate. Um, as valued property is valued at a probably 120, 150,000 and lower. There's a lot more of those and there are above$150,000 if you took the whole gambit of the United States. So as long as the working class and the working class homes are not severely effected, I think will come out of this. Not too bad. If that's, I can say that. Um, so that's kind of my little spin on that Elizabeth.
Elizabeth Maora:Well I hope I'm wrong and it's funny cause I was, I was talking to somebody about what I, what I think is going to happen and they're like, Oh well you're just all doom and gloom and I still know all of reality. And the more, I think it's really important to listen to things on all different perspectives because you can digest and make your own decision and then you can plan accordingly. And so that's what I told my friend. I said, no, this is just, this is just what I think. And I am planning for that too, to be there to be an opportunity and to help people that need the help whenever we come out of this. So, um, even though you know, some of it is, you know, and some of it is sounds like doom and gloom, but it's also reality. I mean it hit my business immediately and super hard. So, and I mean I'm just glad that we also have traditional rentals because that money is still coming in. And I checked with my tenants last month and said, you know, Hey, just wanted to see where, where you guys are. Are you guys okay with your jobs? And so, and all my tenants so, so far are good. So, yeah. Yeah. So hope, hope that, hope that continues. But I just really want to plant that there is always opportunity. There are always things that you can do. Um, I mean, I have a buddy in California who's very wealthy, very, very wealthy, and he's doing DoorDash right now because he likes to stay busy and he's making, and he's college educated. He has his own businesses and he's making a ton of money because people are like, Oh gosh, thanks so much for delivering. So he's getting extra tips. And so yeah, there's, there is always a way, there are always things that you can be doing and you know, if you will. And they're also know people that are afraid of this. You know, you can wear the mask, you can change out your gloves all the time delivering the people or just leave it on their doorsteps, you know? But Mmm. So I just definitely want to make sure our listeners know that.
Justin Bogard:Absolutely. You bring up some good points there. That's, that's pretty neat about the door dash situation. I didn't really think about that, but that makes total sense. You're right, because it's a necessity for people to get stuff delivered to them, especially if they run on a groceries or they just, you know, over over here in the Bogard household, we have, you know, six people over here plus a dog. So it's like if, if we get pretty exhausted, you know, cooking and cleaning up for, you know, three, sometimes four meals a day, depending on which kid is the hungriest, you know, so ordering out is something that is very enticing, you know, to have that luxury. Mmm. But I tell you what, Elizabeth, I kind of want to end this on, on some positive and during this quarantine, Elizabeth, it's been the silver lining for me is having the family time, getting to spend time with Vicki, being around her all day, being around the kids all day as much as they can. They can drive you nuts sometimes. Uh, I wouldn't ask for a better situation because I realize now how much family time I didn't get when it was before March of 20, 20. And so those are the things that, you know, I definitely look forward to, to cherishing during this time of being together. So I'm PR that's the silver line that I have during, during all this. The business is what it is. You know, we, we aren't really having like the best months that we've had before just because people were very timid about selling and buying at the moment, which is perfectly understandable and which is why they, we're having the conversation today. But um, at a minimum getting to spend time with the family is just, has been unbelievable, so
Elizabeth Maora:that's awesome.
Justin Bogard:Yeah. So I'll have my birthday during this quarantine as well.
Elizabeth Maora:When's your birthday?
Justin Bogard:April 26th
Elizabeth Maora:okay. Happy early birthday. Thank you very much. I don't even know how old I am. I have to add it up.
Justin Bogard:I know I'm over 40, but Elizabeth, I know we're getting close on time, so I'm going to have my closing thoughts and I'll let you jump in on yours. I would say having some cash available now is probably a good idea. Four. Any of these opportunities that show up in real estate? I know with a thousand percent integrity that real estate is resilient. Any of these down or up markets. And the worst I've ever seen, it was the 2008, 2009 crash because of all the mortgage defaults, but the reasons that I explained before. So I do see, uh, opportunities with either purchasing real estate at a pretty good discount and also purchasing notes at a pretty good discount. But more or less helping a borrower out, there's better joy in the world being able to lend somebody some money on a property to have him live there and have them, no, they have that peace of mind saying, Hey, this is my home and I got it and they're happy to pay you every month. And those are the situations that we love the most, uh, in our business and we look forward to helping even more people help in the future. So that's what we're aiming towards, Elizabeth, and I hope everyone has enjoyed this episode. And Elizabeth, give me your closing thoughts, my friend.
Elizabeth Maora:Absolutely. So I think number one in the vacation industry that we're going to see a huge uptake in the professionally managed properties. Um, so I'm excited about that aspect of the job and what I'm doing, taking this time is to really evaluate the business and what are the aspects that I really love and then what are things that I need to get off my table. So whether you have your own business or if you're working for somebody, I would really, um, really encourage you to take this time to do some soul searching. So I'm, I'm making some very big changes. I'm also going to be making some big changes once we're able to, um, start traveling again, um, and just setting up my life for really how I want to live at moving forward. So, um, there's a quote that I love and that's have goals so big that you're, um, you don't like telling small minded people. So yeah. So take this time to really look at things and just enjoy the times that you can't take available art. Take advantage of the opportunities that are coming.
Justin Bogard:Absolutely. Elizabeth, that was awesome. That was a great debate today. I love hearing both sides of things. You've changed my opinion on a few things, so thanks for bringing stuff to light. And so I'm Justin Bogard with bright path notes and uh, thanks for listening to episode seven. Don't forget to check out the video cast on bright path notes, YouTube channel or ElizabethMaora or our YouTube channel.
Elizabeth Maora:Absolutely. Thanks everybody.
Justin Bogard:Alright, take care 2 wealth show is produced by Justin Bogard and super E concert sponsored by BrightPath notes and Elizabeth Maora. Thanks for listening and watching our show.