Time Value Of Money With Jason Franciosa

Time Value Of Money With Jason Franciosa

Jason starts the show with a Meet the Masters’ speaker, Mani Vaya. Vaya is the host of 2,000 Book Podcast. They talk about how you can read or listen to a book quickly while retaining information you’re seeing or hearing. On the second segment of the show Jason brings on guest Jason Franciosa, CEO & co-founder of Element 26. They discuss money as it is valued as time. They go into concerns about about the time value of money. Later they discuss leverage as a strategy against inflation and how to utilize your home loans to house hack.

Investor 0:00
I first started reading the rich dad books. And that led me to looking at different motivational speakers. And I’ve stumbled on Jason’s podcasts about seven years ago. And then from then I was hooked. And after listening to him, and I really got a sold on his philosophy on how he looks at the market and real estate in general. And I wanted to jump in seven years ago, but I decided to open up a few businesses that they went pretty well. But you know, I live in New York. So there’s a lot of expenses over there. So those were not as according to plan so now I I saved my money up again, and I’m here.

Announcer 0:35
Welcome to the creating wealth show with Jason Hartman. You’re about to learn a new slant on investing some exciting techniques and fresh new approaches to the world’s most historically proven asset class that will enable you to create more wealth and freedom than you ever thought possible. Jason is a genuine self made multi millionaire who’s actually been there and done it. He’s a successful investor. lender, developer and entrepreneur who’s owned properties in 11 states had hundreds of tenants and been involved in thousands of real estate transactions. This program will help you follow in Jason’s footsteps on the road to your financial independence day. You really can do it. And now here’s your host, Jason Hartman with the complete solution for real estate investors.

Jason Hartman 1:25
Welcome to Episode 1148 1148. This is Jason Hartman, thank you so much for joining me today. We have a guest coming up. But first, we’ve got my friend Manny Vega. He is the host of the 2000 books, podcast and YouTube channel. He is a voracious reader, as am I nowadays I’m I think I’m more of a listener than a reader but I used to be a better reader. You know what they say all the readers are leaders. And what I say all the earners are learners. So lifelong education is where it’s at. Manny, welcome How you doing.

Mani Vaya 2:00
Good, man. Thanks for having me. I love books. I used to be an engineer and gave that all up to get into this side

Jason Hartman 2:06
of life to be a bookworm. Well, I gotta tell our listeners a very funny story of how we met. Okay, so you can chime in on this, but I’ll tee it up. So last year, we were both at a conference in San Diego and you live in San Diego. We were at Andrew Warner’s he was holding a little small private whiskey party. I think it was in his hotel suite there in San Diego at I believe the Marriott or the Hyatt. We were both at the party and we were just talking grabbing, you know, some orders and said, you know, what do you do and, and he said, Oh, I host a podcast and and I pulled out my phone. And I was literally listening to your podcast on the way to that little party. He showed you that your podcast was right on my screen of my phone. So that was very,

Mani Vaya 2:58
very That’s right. But there wasn’t Jason, actually what happened was, initially when I asked you, and you said, Oh, I have this real estate show, and I’m like, which real estate show and you’re like, at that point, I didn’t really know your full name. So I only know your name, Jason. And you told me Oh, is the Jason Hartman real estate? I’m like, no way. I Dude, I used to literally, I remember getting started on your podcast, as in getting started on thinking about investing in real estate from your podcast. And I was like, What? No way. That’s you. And I like I couldn’t make the connection between the podcast pictures I knew at the time. But as soon as you said that, I’m like, dude, I’m such a fan of you. And then you started asking me Oh, okay, so what do you do? And then when you start asking, and we found out that I have the book summary podcast, you’re like, What’s your name? It’s 2000 books. You’re like, No way, man. I’m listening to this. So it was like, they were like, mutual mutual fans.

Jason Hartman 3:55
Here was it was like, What a coincidence. The biggest coincidence was that our was literally listening to your podcast on the way to that party. And now Andrew Warner is a host of the mixergy podcast. And so he had a little little party and and so that was great. That was just so yeah, what are the chances? Right What about just taking

Mani Vaya 4:15
a picture of it you listening or your podcast on the phone? So we still I still have that picture.

Jason Hartman 4:20
You gotta send that to me. That’s just such a funny picture. Yeah, that’s great. I love learning. I love reading. I used to own about 4000 books. I actually, I didn’t count them exactly. But I, I sort of counted what’s on one shelf and multiplied you know, and I started getting rid of them over the years and I used to say, you know, if you’re not going to give me an electronic book format, or if your book isn’t available in electronic format, I’m not going to buy it and I’ll never read it because I just can’t handle moving any more books. You know, and packing them and unpacking them again. But books are incredible. Obviously they change lives. Your podcast is really handy because it allows People to compress time and do more. So when we were talking, I asked you if you would come and speak at our upcoming meet the Masters event and you said yes, yeah. And so you will be speaking at our upcoming meet the masters and I’m really looking forward to it. Now you kind of curated some of your your book summaries for our attendees. Right?

Mani Vaya 5:24
Yeah. So, as you know, like I’ve been, I’ve been reading a ton. I mean, I’ve read a ton. You’ve read a ton Jason. So it’s so much fun, we’re gonna get the opportunity to talk about some of the best some of the greatest books ever written on becoming successful in life. And a lot of people who are ambitious people who are driven, they always gravitate towards books like that, but in my reading of over 1300 books at this time, and you’ve read over 4000 books, or even more than I didn’t say, actually read the 4000 books. I said, I own them. Okay,

Mani Vaya 5:58
well, you probably read them.

Jason Hartman 6:00
Just owning them. Doesn’t that make you smarter? No, it doesn’t actually. does. But I have read a lot. Definitely.

Mani Vaya 6:07
Yeah, you have. So what we’re going to do on that talk is curate, like, talk to the listeners maybe of our top five greatest books of all time when it comes to how to become more successful in life, how to take your success to the next level. It’s really for the ambitious people can’t wait

Jason Hartman 6:23
for this presentation. I’m super excited about it. Because we’re going to curate, well, you really, but I’ll help you some of the classic books, but also a couple of modern books kind of compare and contrast their philosophies and, you know, maybe talk about where these philosophies overlap. I know you picked two classics to talk to our listeners about and I read both of these when I was 17 years old, and they changed my life. They just totally changed my life. Can’t wait to dive in and talk about that. But many you’re also going to talk about how to read books more effectively. Right? Yeah. Tell us about that.

Mani Vaya 7:00
So the two questions I get all the time. So remember, I used to be an engineer, I actually live left my engineering career to start this business or three and a half years ago. And every time I talk to people about what I do, which is I’m a professional book reader, I’d read, I learned from books, and I summarize those books for the audience. The two questions I get are, what are the greatest books that I should read? And the second question is, how do you read so much because I read seven books a week. So I literally like either I’m reading that or listening to the art or I’m consuming it in some format, either physical, Kindle or audible. So people always ask me, how do you actually condense all that knowledge in your brain? And how do you learn fast from these books? Because it’s one thing to speed read. It’s another thing to actually learn from that. And that’s something I’m really excited to share with your audience as to how to read a book for maximum learning.

Jason Hartman 7:51
I cannot wait to hear that part of your presentation because you know, I’ve taken speed reading classes and it just never took I just can’t. I don’t know Maybe I’m just not I just don’t have the knack for it or something. But that is a great skill in the information age when we’ve got so much coming at us in everybody. I’m sure everybody listening just feels like they’re drowning. Right? You know, you just can’t keep up. You want to keep up you want to learn everything. I don’t know, at least for me, it’s I think it’s kind of a compulsion. It’s like an OCD, almost, I just want to learn everything. I’m so curious.

Mani Vaya 8:24
And you and I are the same. We’re kindred spirits here.

Jason Hartman 8:28
But But that’s not all good. Right? You know, you can always feel you at least I’ll speak for myself. You know, I always feel like I’m behind like, I’m overwhelmed. I, I sort of beat myself up about it. So it’s not all good. It’s good to be curious for sure. But maybe it goes overboard. Maybe there’s a book for that.

Mani Vaya 8:45
Right? Well, yeah, I mean, there’s the difference between like reading a lot but then also reading but learning from them and that’s that’s the distinction we’re going to try to address their as in how to learn the most from the book, How to absorb The most around the world, even with the same amount of time that you put into it like, yeah, even if you put in the same amount of hours, how can you get the most out of it,

Jason Hartman 9:08
give us a couple hints about that. I know, you know, we don’t have the time here, because we’ve got to get to our guests. But just give us a few tips if you would.

Mani Vaya 9:15
So a couple of hints. First of all, like I can help someone compress a book in half the time just by using the power of audio. So if you’re listening to audio, there are hacks there to literally do it much faster, and normally do it much faster, almost. When you do it faster, you force your brain to focus, which actually allows you to learn better and faster. So that’s a really simple hack. We’re going to talk about

Jason Hartman 9:38
good so so really forcing yourself to do it more quickly. Right.

Mani Vaya 9:43
Yeah, that allows your brain to focus. I mean, we have too much brain capacity. And if we’re doing things slowly, the brains gets scattered. But if things are coming at it fast, and the brain is forced to focus, and that’s the that’s the fun part. That’s when you can double, triple quadruple your rate of learning.

Jason Hartman 10:02
Do you listen to audio books and podcast at higher speeds? Yep. And what what level of speed? Do you listen because I can’t really go above about 1.5 to 1.75. It is too fast. It’s so unpleasant to listen to have a friend who claims to listener three times speed and that’s just crazy that I don’t know. I mean, I don’t know how

Mani Vaya 10:30
you do that. Is that effective? Yeah, I go all the way anywhere from two to three x. I remember complaining to an audio app back in the day because they only limited to two x and I was like, Come on, guys. Really Let me listen to three x. That’s so funny.

Jason Hartman 10:43
Because you seem you seem so calm and mellow in person. And I like to think I’m calm and mellow. But when it comes to the book, like so, well, the things people ask me is, Hey, is it cheating? If I’m listening to a book, And to me, that’s a very weird question. Because every book I listened to or read or read physically or read in a digital format, every book I’m consuming with the intent of learning from it. So when it’s an audio book, even if it’s going at three X, as soon as I find something interesting, as soon as I find something that’s really useful, I’m going to pause, I’m going to take notes, or I’m going to bookmark it so that my employee can now go and pick up all those bookmarks and collect all those notes again for me, so I’m not the one who says, okay, just listen to three acts and forget about it. No, no, it’s all about what you do while you’re listening at three acts. How do you process that? That’s also really crucial. I think you you know, listening with intent. In other words, as you’re listening, have your mind trying to say, Well, you know, what does that mean? How are they what are they going to say next about that? You know, what does that lead to sort of active listening if you will, and also combining it in a multimedia format. So, taking notes referring to the visual product, whether it be an electron version or printed version, combining those mediums and you seem like you’ve done that very well, because I love your book summaries. Here’s an example, folks, this is an audio book I’m listening to right now about stories and how to write them and so forth, because that’s something I want to improve on. And here’s a three x speed. This is Manny.

Mani Vaya 12:19
Thanks for your time. So let’s just

Jason Hartman 12:23
see, that just stresses me out.

Mani Vaya 12:28
But the good thing is the stress is a good stress. It’s us stress. No, really, okay.

Jason Hartman 12:32
Yeah, I know about you stress versus regular stress.

Mani Vaya 12:38
Focus, and that changes everything because the more you force your brain to focus and don’t let it dwindle away, or don’t let it wander away. The more it forces you to create those connections and kind of encapsulate these ideas, property and think of them, but I think it’s a gradual process. I don’t recommend people go from one x two, three x overnight. You go from one to 1.25. Yeah, to 2.5. But over time, it becomes really normal. And what happens is your brain starts anticipating what’s coming. And even at three X, it doesn’t feel that awkward anymore, because you already can see the bigger picture. It’s almost like you’re forced to see the bigger picture when it’s coming at three X, because the sentence by itself if I just turned it on, if I’ve had this happen before, where my car would automatically start playing the audio, as soon as I jump in the car and start the car, and someone who’s just who just sat with me in the car, they’re like, what are you listening to? I don’t even understand a single word of the reason.

Jason Hartman 13:39
Like everything is understood in my mind, because I have the bigger picture perspective now of what is being talked about. Very interesting. That’s what the speed reading instructors will tell you. They’ll say, Stop reading words, start reading ideas, you know, so so good stuff. Well, Manny, I’m really looking forward to your presentation that will be at our upcoming meet the Masters event. We are less than two weeks. away. So we’ll look forward to seeing you there. And we have got to get to our guest if you want to get a last minute ticket, we have not sold out yet. We got a few more tickets left. Jason Hartman comm slash masters, and Manny, I’ll see you in less than two weeks.

Mani Vaya 14:15
Awesome. And looking forward to seeing you and everyone else there. Join us

Jason Hartman 14:19
March 23, and 24th for the 2019 meet the masters of income property. Let’s break this down and look at some of the strengths of income property. As an asset class,

Jason Hartman 14:30
I found that this event is really helpful because I’m totally a newbie to real estate investment. And so I picked up so much information. One of

Jason Hartman 14:38
the great things about it is it’s so fragmented, right? embrace the fragmentation. actually been learning a lot about the tax benefits to real estate and a lot of I’ve been investing actually well over 10 years now,

Jason Hartman 14:55
and I learned a lot of new things today. The other advantage of this weekend Is networking, meeting new property managers meeting new area specialists and seeing the product they have to offer that changes here by you.

Jason Hartman 15:09
Register now with Jason hartman.com slash masters. It’s my pleasure to welcome Jason francy. Also to the show, I had the pleasure of having dinner with him and some other friends a few weeks ago at the capitalism conference in Dallas, Texas. I was a speaker at that conference. After Jason saw my talk, he was bringing up some of the issues of monetary policy, inflation and things like that. I just love this topic. It is my absolute passion. He is a former military officer. His business partners are all veterans as as as he and he’s very passionate about helping veterans achieve financial independence. He has an Amazon business where they sell CrossFit gear as well. It’s just a pleasure to have him on the show. Jason, welcome. How are you doing? Well, thanks, Jason, for having me on the show. I hope people can keep track because we have to Jason’s here.

Jason Franciosa 16:01
Yeah, exactly.

Jason Hartman 16:03
It’s almost as confusing as the way the Treasury government and the Federal Reserve operate.

Jason Franciosa 16:10
Yeah, exactly. Yeah.

Jason Hartman 16:13
Absolutely. So we hope you can follow along. What got you interested in the things behind monetary policy and how it affects investments. And the time value of money, to be honest, is just fascinating. I mean, it is amazing how everything correlates with each other. And how most people don’t even understand the fundamentals know, they think, Oh, I just had a bunch of cash in my bank account, I’d be wealthy. Well, yeah, maybe today you’ll be wealthy. But, you know, in the very near future, that money could be literally worth next to nothing. So just seeing how everything correlates, and then how the government actually works and you know, how they can kind of essentially tax you without ever actually increasing taxes. Right, right. It’s the insidious hidden tax, the inflation tax. Absolutely. Very good point. So inflation is the insidious, hidden tax. And it is kind of crazy that our government taxes us twice. Well, you know, fundamentally, they tax us twice, but in reality, they tax us way more than twice. But that’s kind of another discussion. The discussion here just about the inflation tax is very interesting. Inflation is thought of mostly as a monetary phenomenon. And Milton Friedman was one of the big people that promulgated that idea that, you know, when you create more money, obviously, you know, the value of anything is pretty much based on its rarity. So something that isn’t rare has less value than something that is rare. If you print more, and I shouldn’t even say money, I should say currency, because that’s really what it is. If you print more currency, then the value of all currency in existence goes down because it is simply less rare, right? We all know that dying Guns are much more rare than sand on the beach. There’s lots of sand. It’s very cheap diamonds, there’s not that many of them. So they’re very expensive. And the same applies to currency. Why wouldn’t it? Right? It’s the same supply and demand laws that apply to everything. So, Jason, what is your view of the future? Do you think the future will be inflationary or,

Jason Franciosa 18:26
or not? Absolutely, I see almost impossible, where it’s not inflationary, simply because the massive amount of debt the government is continuing to amass. And they really have two options. One is raised taxes, which even if you’re on the left or the right, it’s typically not very well looked upon right with voters so that D incentivizes voters to give you a vote, and very few politicians actually incentivize to increase taxes cydnus substantially, especially on the middle class in the working class, where the majority of votes are coming from right. So the can’t raise taxes, they have to print money. And the only way to pay off the debt is to print money. So you get inflation. Now I really don’t see any other solution out of this in the future.

Jason Hartman 19:10
Yeah, yeah, no, I agree with you really, there are a few more options than just raising taxes or inflating away. The government’s obligation is but what I really like about my own investing strategy, frankly, I’ll just say I like my own strategy. The best is that it aligns the investors interest with these very powerful forces. I mean, look, we can complain about it as much as we want, but we’re not going to change it. Right. So absolutely. So this is the business plan for governments and central banks. Every country does it. Every country has done it. For aeons. It’s just going to continue it is very likely that it will happen because it’s a great deal. You know, they can just inflate their way out of the debt, but the six weeks I came up with, you know how the government could solve their problems, right? We all know the government is essentially insolvent. So it can either default on its obligations and stop paying them, you know, not pay Social Security, not pay Medicare, not pay for all the entitlement programs, not pay its debt that it owes to foreign countries. This is totally unpalatable, right, it’s never going to happen. Because there would be, you know, riots in the streets. It could raise taxes, like you talked about, but really, you know, I’ve seen the math on this. And, Jason, it’s mind boggling. The problem is so large at this point, that you literally couldn’t raise taxes enough to pay for it. And, of course, you know, it’s been proven over and over that doing taxes simply decreases economic activity. So you ultimately you’ll kill the golden goose, right? So raising taxes is definitely not a solution. I mean, the folks on the left would say It is but there’s just not enough taxes to get to solve the problem. So that’s not going to happen. We could sell off assets, right? The country has assets it could sell, you know, we could sell the ports to Dubai, like that came up in the news years ago. Right. And we all remember the debate, you know, sell military equipment to foreign countries, and so forth. We could steal, right, we could use our military to take property from other countries. So those are all pretty negative, don’t you think?

Jason Franciosa 21:30
Absolutely. Yeah.

Jason Hartman 21:31
Yeah. We still

Jason Franciosa 21:32
reserved to those things. We have a serious problem.

Jason Hartman 21:34
Yeah, right. Absolutely. On the on the positive side, there is one very positive thing that could happen is just technological innovation, that would grow the economy that would grow us out of the mass, right. You know, I guess that’s possible. It’s kind of hard to fathom that innovation that would cause that growth would have to be America centric. It would have to happen here for you know, for just talking you viewing it from a US perspective, and it would have to be pretty incredible, right? It would have to be some major discovery, because the problem is so big that no, it would have to be some major discovery that would get export to the rest of the world. And, you know, which is sort of solve everybody’s problems. But the most likely thing is you say is just inflate our way out. And so that begs the question of the discussion of the time value of money.

Jason Franciosa 22:29
So talk to us a little bit about the time value of money. Absolutely. So the time value of money works in basically two sides. One is, the money you have today is gonna be worth less than the future because of inflation. And the second side is if you have money now and you invest it above the rate of inflation, then that money invested today can be worth more in the future, in terms of actual dollar amount. So when you look at those two sides of it, it really makes real estate an incredible opportunity.

Jason Hartman 22:57
Yeah, you’ve got to beat inflation. You must Speed, inflation and taxes, frankly, you got to beat them both, you got to beat both types of taxes. So the easy examples to just look at a bank account. And if the bank account pays, you know, say you’ve got a long term CD, right, that pays you a whopping 2%. If inflation is 2%, and the CD is paying 2%, you’re even with inflation, but the problem is now you got taxes. And so taxes will probably take away about 40% of that. So now you’re just over 1% you’re losing money. You know, you’re just getting beat up by saving money. So that’s not very fair. Is it? Right, we’re losing value?

Jason Franciosa 23:39
Yeah. What you have today, you cannot trade with the same amount of goods as you could have in the past. Right? Yeah.

Jason Hartman 23:45
Okay. So how do you see I mean, look at you’ve listened to like one episode of my podcast, right. So so you know, you’re not indoctrinated with my thinking. It’s great because you know, you’re not prejudiced. You haven’t been influenced by my thinking at all? How do you see this playing out? And why do you like income property to solve this problem?

Jason Franciosa 24:07
Well, as we already discussed, we see inflation came out. So you can use it in your into your advantage with real estate and of course, other types of leveraged assets, not just real estate, but I do know your show is more focused on the real estate side, right. So first, by having cash flow, I think that’s the most critical aspect of this equation. If you don’t own an asset that cash flows, you’re playing the speculation game, and that’s a very hard game to win.

Jason Hartman 24:31
Yeah, folks, you know, he he intuitively is referring right there to commandment number five, Thou shalt not gamble. So good. I love it.

Jason Franciosa 24:42
Absolutely, I mean, that’s true across all types of assets, whether it’s real estate or business investing or, or even equities. If you don’t have cash flow, you’re speculating. The really nice part about real estate though, is because there’s so many incentives in government backing for the banks to give you these incredible loans. I mean, very low interest rates. They’ve actually recently started to creep back down again. And large sum of money As long as you can show the the debt to income ratios up front. So this allows you to take the money invest it into a asset that’s cash flowing and above the interest rate and the inflation rate to your net positive. And the value of the loan that you take is going to be worth less by time you actually paid off. Plus those monthly payments are gonna be worth less but time you actually paid off as well.

Jason Hartman 25:25
Yeah. When and where did you learn this? Where did you come up with this idea? It wasn’t from me.

Jason Franciosa 25:33
No, it was not. I’ve been interested in investing for a very long time. I start investing back when I was in high school many years ago. And then our mutual friend Ryan, Daniel Moran, right, right. Well, not

Jason Hartman 25:43
that many years ago. I mean, you’re a young guy. I don’t know.

Jason Franciosa 25:48
15 years ago, still.

Jason Hartman 25:50
Yeah, right. And then Ryan Moran or a mutual friend. Yeah.

Jason Franciosa 25:53
Yeah. I mean, Ryan talks a lot about this stuff. And then just being involved in seeing the effects of not understand Thanks. So I first got into investing, I used to play the speculation game, you know, I used to think, oh, if you just buy Apple today or whatever stock today, and hopefully go up and you know, sometimes worked out great, and then sometimes I lost quite a bit of money. And it’s like, Okay, well, I’m losing money. And I can’t hold throughout this because there’s no cash flow. And then I’m also realizing that with inflation, the value of my asset is going down. Not only do I lose money, because I speculated incorrectly, the value of money that a loss is also down as well. So it just like a double hit, and all of a sudden, light bulbs go off, it’s like, Okay, well, I need an asset that is going to cash flow. So I can hold hold through any dips in the asset value, and I need something that I can leverage inflation to my favor. So by borrowing against or using leverage, whether it’s in business I do so my business as well. We take loans to fund essentially investments in purchasing inventory is a investment for my company, because I know that I’m gonna go sell it and get a higher return on that investment. In a business, you’re talking to 300% That verse, more passive incomes, but still understand the power that leverage in allowing you to allocate resources, someone else’s resources for your personal benefit. Sure, sure.

Jason Hartman 27:10
See, the thing about leverage is that you’ve got to have a way to maintain leverage. And leverage is great, but not by itself, right? leverage will kill you, if it’s not offset with income to service, the debt of that leverage. And that’s the beauty of income property, you know, you can basically outsource the obligation for that debt to someone called a tenant. We’re in outsourcing over here. Outsourcing is a wonderful thing, especially when you can outsource debt. That’s a great deal. It makes it all sustainable. I call it sustainable investing because it allows you to stay in the game. You know, we recommend investing in these linear markets that are nice and smooth markets. You know, they have Minor ups and downs, not significant ones, you can really stay in the game nicely with those markets because they have very good cash flow. But even if you don’t listen to my advice, and if you invest in the cyclical markets with bad cash flow with big, ugly, you know, big glorious highs and big and terrible, ugly lows in the market cycle, and in terms of price, if you can manage to stay in the game, real estate is a game of staying power, you’re going to win. The problem is in those markets with those big cycles, the cyclical markets that I don’t recommend, most people can’t afford to stay in the game. It’s just too difficult because you’ll be forced out the cash flow is so bad, it’ll just force you out of the market. That’s really one of the key elements isn’t it is just staying power, right the ability to stay in the game. Absolutely.

Jason Franciosa 28:54
When you average it out over time, almost all assets typically go up over time any major asset class The other thing, of course that you started hitting on as well is is risk versus reward. So some people are more risk advantageous, in others, you know, are are less risk.

Jason Hartman 29:11
Yeah, they might be risk averse or willing to take big risk. And usually that’s dictated by age and, you know, the level of wealth that someone has. So yeah. So what about that? What were you gonna say about it, though?

Jason Franciosa 29:23
So I think that comes into play with real estate as well, because real estate is going to be predictable. And it’s going to be much lower risk, as long as you are investing in those more stable markets. If you’re investing in the in the high risk markets, and of course, you take on a higher risk, are you looking for those higher reward numbers, but the beauty real estate is it’s limited quantity with us can’t? Well, actually, technically, we could take over new countries but within the current confines of our current country, there’s only a certain amount of land and a certain amount of areas and certain amount of real estate available to either purchase rent or or build on. And because of that, you’re reducing your risk with all these other things. Plus the cash flow plus, using the banks for your leverage. So it’s really incredible.

Jason Hartman 30:04
Absolutely. Very good. Very good. Okay, so here’s something I want to wrap up with is this concept. And it actually has a name. Now I was doing it many years ago when I was 20. I started I guess I started doing it when I was 21 or 22 years old, I bought my first rental property at 20. I did not do this technique, then that was a traditional rental property purchase. Okay. But the term it actually has a term nowadays, it’s called house hacking, house hacking. And if you haven’t heard that term, let me just explain to our listeners what it means. Because I know you’ve got some plans with that, Jason. So we’ll share your ideas with our listeners. Here’s what house hacking is. It’s really a concept designed for someone who lives in a good solid linear real estate market already. And who’s just getting started, who doesn’t have much money to invest with, right? This can be the perfect fit for that person. And basically what it is, is it just means you use an owner occupied loan to get into the house, and you live in it for a year or two. And you know, that’s okay. Because as long as you intend to live there, and you really do move in here, okay, and the owner occupied loans are much more desirable. And so what you do is you basically do a plan over several years, and this gets you started, you get a very low down payment loan. If you’re a veteran, Jason like you are, you get a VA loan, and this can be a very attractive opportunity. And you can also get this on a Plex, right? It could be a duplex, a triplex or four Plex anything up to four units, and you live in one of the units and you’ve still got that very, very desirable loan. Talk to us about that, if you would. Absolutely. It’s an incredible opportunity, especially for veterans or active duty military. one stipulation that I don’t think it’s talked about off as well, is if you’re on active duty orders and you get ordered somewhere else, you don’t have to maintain that full year in the home to keep the VA about right. Same with leases. And that I’ll give you just go on a little tangent. We love military tenants, there’s only one downside to them is that if they get orders to deploy, they can break their lease. So same idea. Yeah. Okay, good. Yeah. So so you can move. So what what does that mean, though? Like, what would that mean to an active duty person. So the real advantage is not having to put that down payment down, right? So that’s more cash that you can invest in other areas, and a larger leverage. Now the risk here is if you do a market dip, and you do have to sell for some reason, you don’t have any equity going into the home initially. So that is the increased risk on this type of strategy. But if you’re playing for the long term, like you should be in your purchasing in order to either rent it out immediately or eventually When I say immediately I’m talking about a duplex triplex or quad Plex, because you could rent two to three of those other units and live in one of them, then this becomes extremely advantageous because you have no initial personal investment, you’re basically getting a free cash flowing real estate asset. I mean, it’s an incredible deal for people to take advantage of it. It is an incredible deal. Just make sure folks, you must move in to the property and you must live there. Okay, you must actually do that. Okay. So this is really a good strategy for a person getting started. You’re doing it with the mind of an investor, but you got to actually move in and, you know, follow the rules that are required by owner occupied loans. You can get that advantageous loan, live there for a couple of years, and then buy another property and live there for a couple years and house hack again, you probably won’t need to, because by then you’ll probably have some money. But it’s a great tool for someone just starting out. Isn’t this awesome?

Jason Franciosa 33:54
Yeah. And I think you can always be used because you have to live somewhere, no matter what. Maybe Continue to buy another income property, but your next house that you’re going to live in, you can now use the VA loan again. Or you can refinance the previous loan that you had that to a traditional loan, since you already have equity built in now, do a new VA loan, so you’re not putting any of your own money up front, on the house you actually want to live in. And then instead of having that money wasted on the home you want to live in, you can use that to purchase another income property for your 20% or 10% down payment. So it’s advantageous not even if it’s not just your first home purchase.

Jason Hartman 34:24
Good, good stuff. That’s really good. Okay, great. Well, Jason, thank you for joining us today. It’s just nice to get fresh insights from someone who you know, is thinking on the same track like we are myself and my listeners. It’s just really refreshing to hear this stuff. So glad you’re on the right track, and I just want to wish you a great future and happy investing. Thank you, Jason. Yep. Hey, one more thing. Do you want to give out a website for your business or anything like that you’re welcome to

Jason Franciosa 34:53
sure if you want to check out if you’re into fitness at all. So quite a few different types of fitness gear, or websites element 2016 CEO

Jason Hartman 35:00
element 26 dot CEO and you can get the products on Amazon as well. Right?

Jason Franciosa 35:05
Yeah, exactly. Fantastic. Thanks for joining us. Thanks, Jason. Appreciate.

Jason Hartman 35:11
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Jason Franciosa 35:15
miss any episodes.

Jason Hartman 35:16
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