006 - Things Are Always Shifting

2 Wealth Show S3 Ep6 - Things Are Always Shifting

On Episode 6, Justin and Elizabeth talk about how things are always shifting and current times.

Key Takeaways:  

1. Branding
2. Loss Mitigation
3. Stimulus Check - Invest it! Or, Spend Wisely

 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 

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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: 0:05

[inaudible] 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 co-host 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 co-host 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 bright path notes and Elizabeth Maora. You can find out more information by visiting our websites at brightpathnotes.com and elizabethmaora.com. Hey, welcome everybody. I'm Justin Bogard, bright path notes, and this is the 2 wealth show when you are watching and listening to episode number six, super E, what's going on my friend.

Elizabeth Maora: 1:18

Hello, I'm Elizabeth with Elizabeth. Maora AKA super E doing well. Spring has sprung here in Indianapolis. So we're very happy about that.

Justin Bogard: 1:31

Now it sounds like, kind of like a double negative or something spring has sprung. It seems like there's too many, too many iterations of spring in there that that saying, I don't know. It just always messes with me, I guess

Elizabeth Maora: 1:42

That's a good point. Yeah. And they just, you know, for those of you that are watching also on one of our YouTube channels, um, I just have to point out that Justin, you do look very nice in your, um, it's not been autographed, but in your apparel that is, has Brightpath notes on it.

Justin Bogard: 2:02

Well, thank you very much. Yeah. I just, I realized after a few years I was like, you know what? I don't really have anything to brand myself when I go out in public. So people would be like, what's bright. What the heck is? Brightpath Notes. What do you do? You know? And I just, I realized I was like, I just need to do this. So I got a couple pieces of apparel and put our logo on it and we'll see what happens. Actually have some masks on order to, for, with our logo on it. So I was curious to see how those are going to look so you may see some more stuff in the future.

Elizabeth Maora: 2:32

Excellent. Congratulations. And thanks. Yeah, that is just speaking of that. Actually one of our past guests, um, Patrick Grayson of StolCo designs, who's um, the general contractor on the large rehab that we're doing in downtown indy, he, all of his guys, he is very branded. So, um, this has actually, especially seeing you branded now is prompting me to get this done.

Justin Bogard: 3:00

I thought you did have some branding apparel.

Elizabeth Maora: 3:03

I did, but that was whenever I first started and I have a new logo. We updated the logo last year, so it, my team needs it.

Justin Bogard: 3:12

Yeah. You know, it makes a difference, I guess it can be good and bad because if somebody does something that's, you know, not up to par or does somebody wrong and, you know, however it happens, I guess it could be a negative because of they're wearing your apparel, that it's obviously a bad reflection against you in your company, but we like to think and assume that everything's going to be all good and clean transaction for all.

Elizabeth Maora: 3:35

That's right. Yeah. That's exactly right. But it does definitely make a big difference for just name that name recognition in general. Cause you never know, you never know who you're going to meet or potential client or guest.

Justin Bogard: 3:49

Yeah. If, if anybody is going to live events or conferences, or even sitting on an airplane with somebody, if whatever, you're wearing a hat, a logo shirt, or, you know, have something out that has your business on it, people tend to ask like, Hey, what's that I've never heard of that before. What do you do? And that's a great way to start a conversation, especially being in real estate as a real estate investor. It's a great way to either potentially get an investor or potentially partner with somebody on something in the future. Right.

Elizabeth Maora: 4:18

That's correct. Absolutely.

Justin Bogard: 4:21

All right, Elizabeth, so we're recording this episode in the middle of March of 2021 and some of the bigger news across the country right now is Joe Biden has signed a$1.9 trillion stimulus package. Okay. Not sure if you've dived into exactly what all that is going to be lined out. As I've seen some people on Facebook, of course, that have chimed in and have written some information about it and what, what they saw in the bill or what they may have heard on TV or heard from somebody else or from people three people removed from a, from a news media outlet. Um, but I get some of my news from a company called well, a website called D S news. And they often give information about what the current foreclosure mortgage looks like. What does loss mitigation? So it's kind of on the mortgage side of things, but they did a good job of spilling out just a few highlights of what the stimulus package is. So Elizabeth, if you bear with me for a second, I'm going to have to read through some of the highlights of what the stimulus package was going to be released and who's going to benefit from this. Okay. So we have about$1,400 in stimulus checks going out to, um, the Americans, right. Uh, our country. So those bills are going to those, the money is going to be broken up into, in a different stuff. So after the$1,400 checks are out, we've got other monies that are allocated to different things, right? So one of it is specifically for emergency rental aid. So there's 27 and a half billion almost said million billion dollars going towards the rental aid. Okay. This bill does include$9.9 billion allocated to the homeowner's assistance fund to help homeowners in need to pay overdue mortgages, to pay taxes, insurance and HOA dues. Okay. These funds will be distributed through state housing financing agency. So that's where you'll get for information from if you're not from Indiana it's whatever your state housing finance agency is. So unlike the past relief packages, this one provides direct homeowner relief. Prior bills have created some protections for homeowners, but no direct aid, according to CNN, okay. There's a quote here. These funds are designed to help homeowners avoid foreclosure and catch up on mortgage utility, property tax and insurance payments. According to David M I hope I don't butcher his name up working president and CEO of the national housing conference told CNN, furthermore, a hundred million dollars will be allocated to rural housing and 750 million to housing needs in native American communities. Four Americans suffer who suffered a job loss. The bill also includes$300 weekly of federal unemployment checks through September 6th of 2021. Let me repeat that for those Americans who have lost a job, this bill also includes$300 weekly federal unemployment checks through September six of 2021. So I believe this was similar to the last time a stimulus package went through. If I remember correctly, Elizabeth, it was$1,200 to those individuals that qualify. And then I believe it was, um, a couple of hundred dollars as well, weekly for this federal unemployment checks to those that have lost a job due to the COVID 19 circumstance. What's your take on that?

Elizabeth Maora: 7:59

Um, well I think they're spending money. That's not there, so we're going to have inflation. That's just going to be through the roof. Um, so I agree

Justin Bogard: 8:11

There is definitely going to be inflation. Um, they're probably caught in the cross hairs of like, we have to do something or we don't do nothing and whatever we do, something of, we have to make it how they see it work. So I'm sure there was some thought going into it. I know people look at the government and they just kind of laugh or they shrug their shoulders and they say, you know, Oh, or, you know, some thought went into this, right. So if we didn't do anything, Elizabeth, you know, how, what would, how would it look differently? I mean, obviously we don't have a crystal ball. We can't tell, but you know, I, I believe I'm glad they are doing some relief, but I am confused. And maybe I need to read more into this exactly what the first relief went to versus this relief and from what I did read there and what you to, it does seem like some of it's going to be kind of forced down the path of right. You need to catch up the stuff they need to catch up on like mortgage payments, rental, back rent, you know, insurance stuff, things that are going to protect the collateral and protect the home and just, you know, help keep our real estate a flow and to help really the small time landlord Elizabeth, I think really got affected the most by COVID-19. Would, would you agree with that?

Elizabeth Maora: 9:18

I would. And I think one of, at least my experience has been, and you know, most people, I think agree is that the government's the last place that you go to fix something and, yeah, so, I mean, we have one of our members of CIREIA, one of my clients as well, um, and his traditionals, which we don't manage his traditionals, but he has a tenant that owes him over$15,000. And he's, so the actual landlord has gone to the agency here in Indiana to say, Hey, you know, this is what's happened and he can't get any money. Um, you know, so it's so convoluted. Um, and, um, I'm a big time capitalist. So I say, let the chips fall where they fall and people will, you know, people pull up their bootstraps and do what needs to be done. There's still jobs out there. Um, I mean, I'm looking for people, I need three people. Um, actually I need three more teammates, you know, and I know that that's not the case for everybody, for sure. You know, and, you know, we want to keep the economy going, especially here in real estate, but anytime there's a downside, there's also an upside, you know, there's always that, that two sides of the coin, um, you know, more, what I'm concerned about is what's going to happen. What's the five year what's the 10 year what's even the 15 year, um, you know, after effects of this. Cause we're, we're not gonna see it right now, but there will be tremendous effects of this.

Justin Bogard: 10:48

Yeah, I believe so. I mean, this is the second year in a row. We will be receiving a pretty significant stimulus package. Um, I believe back in the Obama, the first, um, uh, I want to say series the first term that he went through. I believe there was a package that went out at some time around the financial crisis. Uh, if I remember correctly, maybe I'm not Elizabeth, you're looking at me like maybe I'm not remembering that. Right. But, uh, I thought there was, but this in my lifetime, this is, I guess the third time that I'm remembering seeing a stimulus package go out and two of them back in the to back years, seems like it's going to potentially be a big problem. I think everybody sees the writing on the wall. You and I both agree. Inflation is definitely going to go up. What does that look like for the future and what have other countries done in the past when inflation has gone up like that? What does that look like? So it's hard to tell if we're going to, if we're going to shift course or not, if we're going to change direction or if we're slowly going to deal down a path, which we can't catch up from, if we're going to get further and further away from the light, so to speak. So it's tough to say what's what's going on, but I do agree that the inflation is, is to be a problem. Um, I think interest rates are probably going to go up more and this real estate appreciation that we have. I think we're probably to the point, Elizabeth, maybe you might not agree with me or maybe you do. We're kind of overinflated.

Elizabeth Maora: 12:07

Absolutely. You know, I'm sorry, go ahead. I was kind of finished. Well, we have, uh, um, one of our residents, they ended up moving to North Carolina. So this is in our traditional one of our traditional rentals. They moved to North Carolina because actually, um, my female resident, she couldn't find a job here cause she does commercial interior design and they're actually looking to buy it. She got a job in North Carolina where she's from she or her, they are looking for a property there to buy. And he was telling Tyler was telling me that actually at least in the Charlotte area, there will be 24 offers on one house. And most of the people have never even seen the property. You're so it's kind of interesting Justin, because we do have this, we have this housing shortage. Right. Um, and so we, and we have all this demand and we have properties in Indy. My mom wanted to look at a property here and it was already gone. Um, so in one day, so at some point, you know, it, it can't, it can't keep on going like this, but obviously the big question is, well, how long can you wait? Right? Or when is that going to happen? You know? And that's one of, you know, one of the things that's always important to keep in mind is that you want to be growing your assets, right? So where's the least amount of risk for if that's, you know, depending on your situation. Some people like a lot of risks, um, you know, but you have to weigh all of that and you, you really need to take into account, okay, what does this huge$1.4 trillion stimulus package do to me if I'm going to keep properties for a longer time.

Justin Bogard: 13:51

Right. Right. So I think, um, well let me talk about the jobs thing. Cause you brought that up coats. I was, I didn't really respond to it, but um, the, the job market, I, I agree with you, there's still opportunities to get jobs. So I heard a radio, um, message or radio interview recently, and they were talking about, or maybe it was a podcast, it doesn't matter. Right. So I was hurt. I heard them talking about jobs and how we'll say AI or automation has eliminated jobs. And, and someone brought up a good point is like, yeah, you can look at it as it has as, you know, trim jobs down that are taken away from people. But at the same time, it's actually forced people to go into jobs that are more skilled and it's better suited for them. And it's actually a pay raise for them. So it's like you have these, these computer tools that we, that we have programs with and do functions that are pretty simple mundane tasks. Right. And then it may, it may be perceived as it looks like it's taken away from somebody. But what actually it does is allows someone else to become more skilled so they can do something. That's really not going to be taken over by a computer if you will, in a future, so to speak. So, um, I agree. I think there are plenty of jobs out there we're, we're looking to hire, right? We're looking for someone to help us out. It's a skilled job. Cause like I'm sure the jobs that you are looking to fill for your company, it's, it's a job that requires a special skill and it's not for everybody, but if you want to get a job, you just have to find a skill that you want to do, and then there's going to be employment for it. You just got to go find it. It's like housing, housing is sparse right now, but there's still some inventory out there and you get, sometimes you get to be creative on how you get it, you know, or you just sit and wait, like you just mentioned, you know, you just sit and wait, it's maybe not ideal, but it's better than overpaying by 10 or 20% on a house that may come back down to realistic values in the next year or two

Elizabeth Maora: 15:56

That's. Right. And you know, one of the things too, is that things are always shifting, right? So for example, one of my clients sold, they own controlling interest in a very large property in downtown Indianapolis. So they just sold the controlling interest. So it was about a month ago, six weeks ago. So they've transferred that money. They're giving a 10 31 exchange to a little city, just North of us called Carmel. So for those of you outside of it, the Indy area, um, and the reason that they're doing that is because there are still a lot of issues in the downtown, in the area. So they said, Hey, you know what, the businesses that are moving out of Indy, they're moving to Carmel and they're moving to fishers. So they bought three commercial properties in Carmel area in the Carmel area, excuse me. And the one they're repurposing and they're basically, they're going to be doing flex, um, flex workspace. Right? So people that, you know, people want more space whenever they're going into the office. And so that's what they're converting this it's, it's a cool building, um, into, you know, so that's just, you know, it's kind of interesting because last year I was like, man, there's no way, cause I'm looking for a commercial building. And I was like, no, I am not. I'm not putting any money in that. But then, you know, everything's always changing.

Justin Bogard: 17:15

Yeah. Yeah. It seems like the market is drawing up with inventory and for real estate investors, it may seem like it's challenging now for what we'll call our traditional wholesalers, that we have our fix and flippers and really our landlords that we have going on it, it would appear that as challenging to get inventory. But, um, this is what I love about real estate Elizabeth, because you can always switch your, your mindset or your dynamic, or you can pivot as I think that's the popular word of 2020 pivot and you could go a different direction. And the same thing happens in the space that I'm in the note investing space where, you know, there was a time where non-performing loans is like, you better be a non-performing loans because that's where you can make a good amount of money. And most importantly, you can help a borrower out. And there's a time to where it's not a good time to do it. Like for the past couple of years, it's not, it's not as plentiful as it was. Right. Um, and that could change in the future when foreclosure start to happen more regularly. And a lot of these forbearances are not going to be able to be repaid and you know, that will switch into foreclosure. Um, so we always have to be shifting our dynamics. So we focused a lot on performing loans for the past couple of years. And now we're starting to transition more into seller financing, like creating our seller finance notes and helping other investors create. So our finance notes, and then they're seeing Elizabeth, how they can really create wealth through doing their own deal structures a little bit different, a cash transaction sounds great in that large sum of money in that short amount of time. Sounds great. But when they realize the tax ramifications on that with short term gains and they realize that they have to pay real estate commissions on it, that lump sum of money, does it look as big as it did before? Right? But when they see that cashflow stream across a longer period of time and they see how much wealth they can have, and the tax ramifications are a little bit different and they're going to be less, we'll call them penalties less penalties across a longer period of time. They understand that, okay, I don't have to do that transaction every single time. That, that one way that one lump sum transaction, I can do two or three like that. And then maybe I do one or two, the longer-term play. And then so they figure out how they can really become a deal architect and they really figure out how to grow wealth based on that. So these times are good for everybody in real estate to really sharpen their pencil and to come up with tips, you know, different ways to make money.

Elizabeth Maora: 19:46

Yeah. It's interesting. One of my friends in California, it's so funny because she just called me the other day and she's like, E I'm going to build a fourplex. Cause she's in the process of building a restaurant right now also. And then she's like buying a lot behind me. I'm going to build a fourplex and I need to know what are some creative strategies. So I don't have to use my own money, you know, so, and she's in California doing this. So it's, you know, when you know your numbers and you know, what you need and um, you know, it makes, it makes a big difference. Absolutely. So there's always that opportunity.

Justin Bogard: 20:19

Yeah. I think every real estate investor, I would encourage them to take some sort of financial class to learn how to really run numbers, at least the financials of concerning real estate. Um, because after you learn how to use a financial calculator and you look at deals and you analyze things, you, you understand from a different perspective that if you take a little bit of a hit up front, it may pay a lot bigger dividends for you in the future. And I could go into more explanation. Not that we have a lot of time for that, but I just encourage people to take some financial courses and understand how to use a financial calculator.

Elizabeth Maora: 20:53

Absolutely. Um, and just also, since we're on the subject of finance, I know we've said it before, but make sure that you have a really amazing CPA. Um, I, you, Sarah whole trip from profitable insights, she has been absolutely phenomenal. She's licensed and it's actually, my friend in California is using her now to do her bookkeeping. Um, she's very savvy and you definitely want somebody that is savvy because there's a difference between being smart and being savvy and she's smart and savvy. So, um, I just, I highly, highly, highly recommend her because you, you need somebody that's on top of all of this stimulus, um, you know, things and what's going on for businesses and what's going to be better for you. And so it can make you a lot of money, not just save you a lot of money.

Justin Bogard: 21:42

Yeah. It is a big relief when you have somebody in your corner that can handle the tax and the bookkeeping and stuff like that. Cause you don't have to keep up with all the changes as much and you don't have to dive into bills, understand, okay, maybe I need to do this. I mean, you need to do that. You know, a lot of these people, they study those legislative bills that come out and they really know exactly what to do. And it's like that you're paying them for their advice anyways. And you're just like, okay, thanks for doing all that hard work. It saves me a lot, many hours of trying to figure out what that means.

Elizabeth Maora: 22:11

That's right.

Justin Bogard: 22:16

All right, Elizabeth. Um, I didn't have anything else to add. I wanted to hit that stimulus package to, for our main topic today. Is there anything you wanted to close with on today's episode?

Elizabeth Maora: 22:26

I would say that if you qualify for a stimulus check, just make sure that you invest it or, and, or spend it wisely. Yes,

Justin Bogard: 22:35

Yes. I could not have said it better though.

Elizabeth Maora: 22:39

So, well, everybody thank you for tuning in today. And um, you know, we welcome you to share this with friends and family that are interested in investing and growing their wealth.

Justin Bogard: 22:50

That's right. Don't forget to check us out on the bright path notes, YouTube channel and Elizabeth Maora's YouTube channel as well for the video feed. For those of you listening and watching I'm Justin Bogard with BrightPath notes

Elizabeth Maora: 23:01

And I'm Elizabeth with Elizabeth Maora right. See you guys next time. Thank you.

Justin Bogard: 23:09

Well, the 2 wealth show was produced by Justin Bogard and super E sponsored by Brightpath notes and Elizabeth Maora. Thanks for listening and watching for our show.