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Client Case Study, Adam Jackson

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Jason Hartman hosts client, Adam Jackson,  to discuss how he turned 5 years of investing into 14 properties with infinite returns. Adam shares his journey on becoming a real estate investor then gives discusses his background as a USMC vet and his work in the aerospace industry. Later they talk about a global currency and then the baby-boomer wealth transfer to millennials.

Announcer 0:04
Welcome to the heroic investing show. As first responders we risk our lives every day our financial security is under attack. Our pensions are in a state of emergency. A single on duty incident can alter or erase our earning potential instantly and forever. We are the heroes of society. We are self reliant and we need to take care of our own financial future. The heroic investing show is our toolkit of business and investing tactics on our mission to financial freedom.

Jason Hartman 0:40
Hey, it’s my pleasure to welcome one of our clients back to the show for a third time and that is Adam Jackson. He was on about three years ago. He’s in the aerospace industry. He’s a USMC, combat veteran. Thank you for your service, Adam. By the way, he spent a two tours in Fallujah. So probably got some amazing stories there. He’s celebrating his fifth year as a real estate investor. And he’s about to close on his 14th property. And he, he voted with his feet and moved his wife and four kids out of the Socialist Republic of Connecticut, right? That’s right. Can not California to Orlando, Florida, so he’s, he’s my neighbor not too far away. Adam, welcome back. Thank you for coming back on the show and sharing your client case study story. These are the best shows. And by the way, anybody out there listening who wants to come on share their story, we would love to have you because listeners just love hearing about real people doing real great things. So congratulations. Now you’re basically dollar cost averaging. You’re not timing the market, which I think is fantastic. And you talk about how you’re getting infinite returns on almost half of your portfolio. Now what does that mean?

Adam Jackson 1:57
Yeah, so basically what that means is I purchase A lot of the properties over four years ago now, and since that time, they have not only had the loan paid down, based on what what I was collecting and rent and how that gets paid down by the tenant, but also the properties have experienced a decent amount of appreciation actually more than I thought they were going to experience. So in what’s kind of funny is that at the time when I was purchasing these, everybody was saying, oh, interest rates are great, they’re probably not going to go any lower, they probably won’t be like this ever again. So you better do it now. But what

Jason Hartman 2:32
and there was good reason to think that by the way,

Adam Jackson 2:35
there was I don’t call anyone and I fully believed in myself.

Adam Jackson 2:40
But Fast Forward four years, and now the interest rates are even lower. So you combine that with the loan pay down in the appreciation, I’ve been able to basically pull out at least as much cash as I’ve put in sometimes more in some cases, as what the original downpayment and closing costs. We’re and my payment has only gone up by a very minimal amount, sometimes 20 bucks in some cases, that is amazing. So, so congratulations on that.

Jason Hartman 3:11
So before we dive in too deep, Adam, give us a little bit of your backstory, if you will, of course, would love to hear about your career in aerospace. And, you know, what’s going on there. And I think you have, you know, some thoughts about how that’s a signal as to what’s going on with the economy as well. But you know, maybe start by when you probably discovered my podcast years ago, what When was that? What year was?

Adam Jackson 3:34
So I would say would have been 2015. Okay, at this point. Yeah. So it’s been about five years now that I’ve been listening to you.

Jason Hartman 3:41
And I remember you attended our meet the Masters event about three years ago, I think the 2017 event. Did you attend other events as well?

Adam Jackson 3:49
Yeah. Well, I’m not sure if that was with Ron Paul.

Jason Hartman 3:52
or so. No, that was 2008 20. Oh, okay.

Adam Jackson 3:55
So I went to that I’ve been to prophets in paradise. Actually the most recent one in Orlando. Oh, into a Memphis property tour. And then the most recent virtual meet the masters.

Jason Hartman 4:05
Excellent, excellent, good stuff. So 2015 and why did you get the bug? What what interested in you in real estate or you know, income property?

Adam Jackson 4:15
Yeah, well, I was always somebody who religiously contributed to a 401k, a Roth IRA, saving for retirement, living below my means, and that sort of thing. And in the back of my mind, there, there was always this feeling of, well, how am I really going to save enough? I mean, I mean, realistically, it was, it just didn’t make sense to me.

Jason Hartman 4:37
Nobody ever got rich saving money.

Adam Jackson 4:39
Exactly. And so I started to embark on this personal development phase and really kind of into this program and I listened to all the classic personal development mentors and things like that, but I ended up listening to a book called seven, seven years to seven figures. I can’t remember who wrote but basically It started talking about real estate. And then I thought it was really interesting, got really into that started to read and read and read. And then I searched for podcasts. And you were really the first one that came up and once I started listening to it, I just never stopped.

Jason Hartman 5:14
Yeah, by the way that that book you mentioned, that’s Michael Masterson. He’s been on the show. That’s a pinna. So that’s not his real name Michael Masterson. It’s Mark Ford. I that’s a great book. I also read that book. I’ll tell you, his book that I like even better is called and I think you practice this in the military, by the way, the concept and it sounds weird. Have ready fire aim. That is a great book of Michael Masterson.

Adam Jackson 5:42
Actually, I have read that one. That’s a great one. Yeah,

Jason Hartman 5:45
I like it. But I mean, obviously, you went through boot camp and all of that stuff. You know, when shooting I hear that, some of the the training, you know that like the marine training is, is this concept of ready fire aim, because I understand that if you actually Think about it. If you overthink the shot, you’re less accurate than if you just fire. It sounds counterintuitive, but and I don’t know if you remember that from any of your training a long time ago, but I just thought I’d mentioned that because another another military that told me about that.

Adam Jackson 6:17
No. I mean, that’s absolutely true. Now Now, when you’re when you’re sharpshooting or when you’re on the target range, yes, like you will make small adjustments, you will take a shot, you’ll see where it landed, you might adjust your windage or elevation. But I mean, I can definitely relate this more to what my job was in the military, which was on the one tank, and those are all using cruiser, fully automatic weapons. So typically, what we do there is you start firing and in with all the information that you have, you take your best first shot or burst. And then from there, you walk it to that target if it’s if it’s off at all right, right. And the concept does

Jason Hartman 6:55
hold. That’s a great metaphor for real estate investing and you know, I think you know what I’m going to say, Adam, because a lot of people, you know, I mean, we have investors who are advanced investors, wealthy that are, you know, buying up portfolios of properties, but we also have brand new people that are thinking about doing it. And you know, some of them get in this trap where they want all the information before they do it. And you can never, ever have all the information. So your example of operating the Abrams tank, is you’ve got to fire, get the information from where that shot lands, and then adjust. And that’s how life is right. It’s that all of life and investing and whatever is that whole process of doing something, getting information from it, using that information to do it better than next time. Right?

Adam Jackson 7:47
I would definitely agree. And also, once you finally engage, okay, you engage that target. A lot of times what happens is you end up finding information out there might have been certain conditions with that scenario that you were Adam Jackson. Whereas that first meet, maybe had heard about them maybe had trained for them. For instance, the fact that I bought properties going back to real estate, and four years ago, I mean, I didn’t know if the interest rates were going to go lower. I could have never imagined that I didn’t know if the appreciation was going to happen the way it did. I mean, I invest for you. So there’s all these other factors that you can eventually take advantage of with the information that you learn after you get started.

Jason Hartman 8:26
Yeah, nobody can know all the information or how it’s going to work out in advance. You’ve just got to jump in and do it and adjust, adjust, adjust along the way. That’s the only way anything in life works. I mean, that’s the way surgery works when a surgeon goes in and does surgery, right. It’s the way everything works. You just cannot know everything in advance. You’ve got to give up that need for certainty and just go do things and and you know, I like to say cultivate what I call rational recklessness. You got to be a little bit reckless, you know? Yeah. Anyway, go back to what you were saying. So, you were talking a little bit about timeline and things like that. And I interrupted you.

Adam Jackson 9:09
So Oh, yeah, I guess this would this would just kind of go back to what I was doing with the properties as far as the approach of just consistently buying and not actually timing the market, not actually, you know, waiting for any significant kind of downturn, ebb and flow. Just Just continue to do this, getting control of the asset as soon as you can. And let it go to work for you the BMV the trajectory is incredible.

Jason Hartman 9:39
Absolutely. So get in control of the of the real estate as soon as you can, and then let it work for you and then make those course corrections. Right.

Adam Jackson 9:47
And it doesn’t take very long. I mean, again, only four years, I had more of a seven to 10 year plan, which I thought would have been realistic, maybe for some sort of an exit plan or some sort of harvesting equity, but it happened even Sooner than I thought

Jason Hartman 10:01
good stuff. Yeah, that’s awesome. So which markets are you in? What metro areas?

Adam Jackson 10:05
Yep. So I’m currently in Memphis, Jackson, Mississippi, also Jacksonville and Ocala. Hmm.

Jason Hartman 10:12
So Florida to now.

Adam Jackson 10:14
Yes. So they’re nice and local. I can drive to those within an hour. I know not everybody has that luxury, but but that was definitely a selling point for me. And also Talladega, Alabama,

Jason Hartman 10:25
okay, good. Good stuff. And you live in Orlando? That’s correct. Fantastic. So how did it start? I mean, you listen to the podcast, and then where was your first property?

Adam Jackson 10:36
So the first actually, what I did was I bought three properties right off the bat in Memphis. Okay. And those have actually proven to be some of my my best stories. Some of my best winners. Yeah, I mean, ever since then. I’ve really enjoyed the Memphis market. I can tell you though, what I did was I was going through the pro formas from a Memphis property tour. Not It was really like three years ago at this point. I could not believe the deals the way that the the way the pro formas looked, you know, they’re just the amount of cash flow and the rent to value ratio. But I was told that even years prior to that they looked even better. Yep, I can tell you that it’s it’s never too late to start and the deal I’m still finding deals that look great today. So yeah,

Jason Hartman 11:24
absolutely. I agree with you and you use property tracker to to track your portfolio. And are you also using it to evaluate new deals. So you know, it certainly makes you hone in and you’re very familiar with the way that first year projection looks on the performer. You know, you’ve learned how that works. And, and by the way, anybody watching or listening, if you go to Jason hartman.com if you do one thing and one thing only, go watch that free 27 minute video on the front page of our website, it’s totally free. It will teach you how to read and understand every single number That Performa, and it’ll really teach you how to evaluate a real estate deal. And it’s probably the shortest best course on real estate investing ever. And it’s free. So 27 minutes. There you go. But yeah, so at the time when you were buying those properties, Adam, did they feel expensive to you?

Adam Jackson 12:18
Well, being from the Socialist Republic of Connecticut, they called cheap right? There, they were barely in the six figure range. So they did seem fairly inexpensive to me. However, I would still have to make a 20 to $25,000 investment. So I think that maybe just kind of getting over that, especially with a Roth IRA at the time, I think the contribution was 5000 or 5500. And, you know, probably something similar to that with what I was doing with the 401k. So, you know, obviously, it’s a bigger investment, but the thing is, is that the money starts working, the the currency starts working for you immediately, and you don’t have to put it off. So Yeah, I would say it was inexpensive, but still a good chunk of change to me at the time. Mm hmm.

Jason Hartman 13:07
Okay. And you know, what were some of the good and the bad things that have happened to you over the years, you’ve been investing for five years, you’re up to 14 properties in all the markets you mentioned. So congratulations on all of that. You know, you said you were surprised, pleasantly surprised at how some of them have performed and that the appreciation you’ve gotten. So that’s awesome. But there have been some lessons along the way. I’m sure some things you have probably some regrets. I’m guessing. Any thoughts? The real world picture is what we want to paint here. Yeah, sounds

Adam Jackson 13:39
good. Well, I mean, I can tell you right off the bat, I have zero regrets. Only because anything that happened that might have been to the negative was actually offset by the lesson, you know. So I definitely learned an important lesson through those negatives. I can tell you that at the time that when I was going through and harvesting all this equity to dump back into the other three properties that I’m firing just in the last few months, I can tell you that those properties performed very, very well in general. And I think a lot of that might have had to do with with where I bought and what I bought. But I can tell you that the cash flow has been pretty solid, for the most part. And now I have had some some issues. I think it’s very important to stay on top of your management. I think that if you have some sort of a charge that you need more detail on or maybe you just want to question for certain reasons, I think it’s very important to stay on top of the management. Demand those answers, you know, demand the answers demand pictures or receipts,

Jason Hartman 14:43
absolutely. Something like

Adam Jackson 14:45
that. I can’t hammer that home enough. Yeah. And don’t be afraid to. I mean, if you have to, I mean, have a healthy amount of tension. If you have to do that and let them know that you’re not you’re not afraid to take your service or your Business elsewhere. I

Jason Hartman 15:00
absolutely couldn’t agree more now to that, and, and, you know, we’ve, as you know, have been really pushing and teaching people how to do self management, long distance self management, which, you know, like I’ve said many times, if you asked me if that was possible 1314 years ago, I would have said No way. But it’s totally possible. And, you know, we have all these great tools to do it nowadays. And, you know, we just launched the empowered investor, inner circle, and all of that stuff, too. You know, our goal is to help, you know, thousands and thousands of investors really take control of their properties by doing self management. And the amazing thing I find is that sometimes because you get that third party, that intermediary that middleman out of the way, it’s actually easier. It actually takes less time. Now it sounds like you’re not doing any self management yet, but you’ve probably thought about it. I don’t know. Are you self managing? I think

Adam Jackson 15:56
I’ve thought about it a lot. And actually, I was very Very close to firing property manager at one point to do that, and then we ended up improving the situation. So I didn’t actually do that. It has been on on my radar. And that’s partly why I bought in Florida, although I’ve had no issues there, of course, so but that’s definitely something I would I’d be willing to entertain, I think it’s a it’s a great thing to do.

Jason Hartman 16:20
Yeah, just the fact, Adam, that you, you know, hopefully we’ve conveyed to you that you have the confidence to do that. It puts you in a different negotiating position. When you’re asking for justification for an expense from your property manager. You know, now you can do it, hopefully with some more confidence with some more guts to say, look, if I need to pull the plug and get another manager or just self manage, you know, I know there are options, right, and it’s gonna just make you a more powerful confident investor. Right.

Adam Jackson 16:53
Absolutely. And I think it’s kind of funny because I’m seeing parallels between my read my initial reluctance to actually To purchase a property, and now fast forward four years, or maybe even a little bit more, and now I’m sort of at that same Crossroads with. Okay, well, now do I take these matters into my own hands? Do I take the plunge into self management? Mm hmm. So that’s one of the one of the things I’m definitely thinking about. Yeah. But But you know, like, going back into the portfolio, some of the good some of the bad. Again, most of those properties have performed very, very well. I’m at infinite returns on on many of them. I can tell you though, actually, this is a good story, my worst performing property. I finally I purchased it three years ago, and it was at the lower end, so probably closer to like two, maybe a C property. And I finally had my first month of cash flow in about two years. So think about that. I mean, that I finally got it stabilized, I think but what’s funny is that when I look in my property tracker, and I will Looking at the overall return, I’m still looking at a double digit. It’s a 15% return. Right. So, you know, it’s funny because you you have alluded to or talked about in detail in the past, you know, if the deal only goes half as well, is it as it’s projected? Yeah. You still get these double digit returns. Yeah. All right. And that’s what I’m seeing here, you know, between appreciation tax benefits, but but the lessons I think that’s that’s priceless. So, absolutely. One bad egg, though. I think Yeah, one may get one at some point.

Jason Hartman 18:32
So your worst deal is 15% annual return on investment. Love it. Yeah, that’s the worst deal, folks. It only gets better

Adam Jackson 18:42
if you believed it. Yeah, I wouldn’t have believed that myself.

Jason Hartman 18:47
And that’s, that’s a lower, that’s a lower end property in terms of what we sell and what’s in your portfolio, right.

Adam Jackson 18:53
Yeah, it’s a lower end property, but I can tell you that I have another lower end property. I only have two in the portfolio. And that has been been outstanding. I have a I have a section eight tenant in there and the rent comes in like clockwork. There’s hardly ever a repair, the tenants are all leasing up. But that’s another thing. I’ve received so many renewals on leases this year. It’s just incredible. So, you know, I can tell you that all the properties that I have There are currently leased. And I collected every rent last month including back rent from a property that was missed from the previous month.

Jason Hartman 19:29
Okay, so that’s a good question. So at the time of recording now, you know, we’re sort of in the midst of the the lockdowns are spotty as some areas some not, but you know, everything world’s a mess right now. Right. And, and there’s been a lot of talk about rent strikes and eviction moratoriums and stuff like that. Has everybody been paying your rent all the way through this or is that just last month that you were referring to or tell us about the experience on rent collection?

Adam Jackson 19:57
Okay, so that would be specific to last month. I can tell you Though, that everything has been very, very consistent, I mean, there might be one property that I don’t collect rent on for a given month. Or maybe it’s going through a turnover. But that’s generally the average I would say one property out of the the double digit properties that I own. My I might miss the rent for some reason or another. But, you know, I just thought it was a testament to a lot of a lot of the fear that has been out there. And I remember months ago, we were we were wondering, I mean, okay, let’s build up the reserves. This could be bad, but you’ve been you better hang on to your hats. And I think this is just a testament to the fact that every property that I have is currently leased, the the leases are being renewed. And last month in particular, I collected every rent.

Jason Hartman 20:49
Yeah, that’s fantastic. So the asset is just much more resilient than most people think. Adam, I want to go back to that comment you made because I’m not sure everybody He really understands it on your worst performing property, and how, you know, some people in the income property investing game and the real estate game, they think they’re losing when they’re actually winning. And the reason they think that is they don’t know how to do the math, they just don’t know how to calculate it. They don’t understand that like an iceberg. You know, most of it is below the surface of the water. And there are all these things giving you return on investment, because it’s a multi dimensional asset class. And they don’t see it, you don’t see it right away. Sometimes you don’t see it until the end of the year when you keep the books on it, or when you do your taxes and you get a big tax deduction, or whatever, right, but speak to that a little bit more and maybe help our listeners understand that a little bit. Yeah, well,

Adam Jackson 21:48
I’m actually glad that you brought that up just because recently, I spoken with another investor who purchased a property they tried doing it for only one year and had a major repair. If this was just somebody outside of the network, and they did it on their own, and it basically wiped out whenever their projected cash flow for the year would have been, and I think it was at that point. I mean, I basically told them some version of what you just said, how there’s just a lot happening underneath the surface, right. And I took it upon myself to go in and really do a deep dive on my returns and the calculations there. Now, at the time of the I guess it would have been 12 properties I had, I was looking at roughly $3,000 a month in cash flow, which I think is pretty good. I think those numbers are pretty solid. But what I did was I took into account the appreciation, I took into account, the loan pay down, and then projected tax benefits. This is not include inflation paying down the value of the debt or anything like that. And that $3,000 turned into between 15 and $17,000. per month for the total return. So it’s actually pretty amazing when you look past the cash flow. What’s really going on, especially if you leverage these properties at a five to one or four to one, you’re really looking at some incredible returns.

Jason Hartman 23:15
Yeah, yeah, you are, you are. And because you get, you know, like people, most people just look at the cash flow. And they think, I mean, I remember there was a comment on one of my YouTube videos the other day, I didn’t have time to respond to this skeptic, you know, I’m not going to convince him I just give up on some of these people. They just don’t get it, you know, you’re either gonna get it or you’re not gonna get it right. But this one guy watched the video, I guess. And, you know, he commented, how is this possibly worth it? I’m gonna buy a property and get $200 a month. So what? And it’s like, oh my gosh, if you just took the time to understand. I mean, what, you know, that guy, like I want to say, Okay, look, I’m not going to try and explain anything to you, or teach you how it works or how to calculate return or anything. Just ask yourself this simple question. How is it that you know, and I know because everybody knows them, right? So many people who created a lot of wealth through income property, yet you probably don’t know anybody who did that in the stock market or buying gold or I don’t know, maybe Bitcoin if they timed it right. But you know, I don’t think that’s a sustainable investment. How do they think it works? You know, because they certainly have looked around. And they know lots of people have become very wealthy through income property, yet, they still don’t take the time to understand it.

Adam Jackson 24:35
I think a lot of this has to do with the infrastructure around what we look at when it comes to Wall Street and the conventional wisdom as to what investing actually is. Yeah, I mean, I know that we’ve all talked about this, but income properties are outside of that system. So there’s no one that’s going to be pushing that. But But again, like you say the wealthiest people are the ones who either have made their fortunes in real estate who put their money in real estate? And there’s good reason for that.

Jason Hartman 25:03
Yep. Abby, you’re absolutely right. You’re absolutely right. Do you want to talk about you know, any thoughts being in your industry being an aerospace and the economy and what’s going on? You said that you’ve been doing very well through all this. Your properties are obviously doing very well. So congratulations on that. But just, you know, we all want to know what’s coming next, what’s the real read on things that are going on in the world. And this is very uneven, this whole economic situation, and it’s, it’s very sad, a lot of people are struggling, but a lot of people are just doing great at the same time. You know, it’s it’s really mixed, mostly in a recession, you know, it’s like 80% of the people will be suffering, but this time, it’s, you know, it’s like 5050, or maybe even better than that, in terms of most people are doing pretty well, you know, 64 or something. But what are your thoughts?

Adam Jackson 25:57
Yeah, I mean, it’s, it’s actually very interesting. To me, you know as somebody who works in the aerospace industry you know, there’s there’s a lot of technology and up and coming you know programs I guess that are expanding upon these and in different militaries are working with one another. So I mean, militaries are definitely going to continue to to increase especially with with the, with the the political landscape is today. But yeah, if you’re a professional and you have the ability to work from home, you are definitely in much better shape, especially if you’re within an industry that is getting some sort of government funding in particular, or, you know, has some sort of market need where, whether it’s some sort of a digital transformation or technological, you know, I guess innovation is needed. So, I definitely think that’s, that’s a factor and but Jason, I would also like to ask you, I mean, how do you feel about this as far as the fact that you have Have a stock market that does some sort of a flash crash, it seems like comes right back up. You may be going back down. At the same time we have these interest rates that are that are incredibly low and we have a housing boom. I think there’s a lot of sectors in the economy that are just

Jason Hartman 27:18
detached. Yeah, they are. You’re absolutely right. The stock market is just fake. I mean, it’s a it’s smoke and mirrors. It’s just a totally fake thing. So they’ve obviously propped it up with all the money creation. I think we’re up to about $5 trillion. Now, this is absolutely unrecognizable in history, what’s going on? There’s just no comparison. But like I’ve said, and you’ve heard me say, I don’t think the chickens are coming home to roost anytime soon, in terms of the ability for the US to create fiat money. This is a thing. It’s like interesting because I was listening to Peter Schiff yesterday on Georgia. gammon show and Peter’s been on my show before I got to get him back on. But he’s so interesting to listen to, but he’s so wrong. He’s just always wrong in the sense. I mean, I don’t know, it’s kind of like divided. He’s not always wrong completely. But he’s talking about, again, that I’ve heard him talk about for the last 15 years about how the dollar is over the dollar is going to crash, the US is going to lose reserve currency status. And I’m thinking to him, I want to say, Well, you know, obviously, compared to what, you know, these people love to like, say the US is in such bad shape, but compared to what I mean, who’s gonna take over the reserve currency status, if not the US, like who is in better shape than we are? In that there’s just there’s nobody. I mean, it’s definitely not China. China is a disaster in a half, and it’s going to only get worse. I mean, guess they’ve had a miracle for a few decades. And if Trump is reelected and the continuation, you know, we have the continuation of moving jobs back on shore. I mean, China is going to suffer from that. No question about it. And China is, you know, running a fake economy in a huge way. They’re manipulating their currency like crazy. They’ve got 10 more years until they have a giant demographic cliff. As Harry dent talks about, that’s actually the title of one of his books and China is not the thing and now after after Coronavirus, nobody trusts China, their trust level on the world stage has just been massively diminished. You know, I was there last year and it was really enlightening. I loved it, you know, I would totally love to go back but and then with what they’ve done in Hong Kong, clamping down on on, you know, the protesters and so forth. China’s not going to be the same. It’s and it’s certainly not going to be let’s go down to number three, Japan. Are you kidding me? I mean, that giant demographic Cliff also country literally will not existence 70 to 100 years, there won’t be any people. You can’t have a country without people. They’re not having any children they have no immigration to speak of. So you know that the country will just evaporate, it’ll just go away. And so it’s not going to be China. It’s not going to be Japan with 230% debt to GDP ratio in Japan. Is it going to be the eurozone? Europe is a disaster. What is it going to be Germany? I mean, is it going to be the UK? No way, not that there’s nobody to take the place of the US. It’s just it’s absurd. The

Adam Jackson 30:37
good reason to be bullish on the US and even more bullish on us real estate. I just think it’s, it has a great runway and especially with all this money printing, I think that we’re gonna benefit as real estate investors. You’re certainly right and then

Jason Hartman 30:54
and by the way, I just want to make the disclaimer I am by no means suggesting that the US is perfect. faked or anything, it’s a disaster. It’s just comparatively, you know, compared to what is the big question. And comparatively, it’s in much better shape than any other major country. Okay, that’s just there’s just no comparison. So that’s that. But, you know, what do you think about the demographics of the market in terms of home buyers out there pushing prices of the properties you own, and I own up because there’s a lot of buyers, but also renters. Now, we don’t have to just talk about millennials anymore. We can talk about Generation Z, they’re starting to come up into their own. And these are huge demographic cohorts. I mean, the regulation is giant. As you know, I remember one time it was gross when I was maybe in junior high school. In one of our classes, maybe it was like biology class, they had a snake, a big snake, you know, and they fed it a mouse. And I you know, I watched the whole thing. And what’s interesting is you watch That long snake, and then that big lump of the mouse going through the snake’s body, just gross. I’m sure people have seen this, if not look up a video and you can see it happening. But that’s how the demographics are in the US. We’ve got the giant lumps of demographics, 80 million millennials, okay. And they’re moving into their spending years, and they’re going to move into a giant wealth transfer era where that wealth is going to be transferred from their parents as they pass away. So,

Adam Jackson 32:35
wow, it makes me wonder, Well, is there really any stop to this? I mean, is are the prices in certain areas? Of course, gonna keep improving? Because based on everything you just said, there’s a good likelihood that that happens. Now, I think it’s also important to make a distinction between which of those markets are going to benefit most and I think we know what most of those are. Yeah, but I mean, I can tell you an example. I have a brother who lives in Brooklyn. And he was just recently looking for a new lease. So he moved. And what’s incredible is the downward pressure. Oh, yeah, we’re all seeing on rents in that area.

Jason Hartman 33:14
All of our clients who live in New York City or the surrounding areas like Brooklyn, they say that there are just moving trucks everywhere. You’re just just people are just fleeing the city. And if not, like your brother’s stayed in and he probably got a huge upgrade for a lower price. Like literally people are moving from one bedroom units in New York to three bedroom units for the same price. It’s amazing what’s happened, how these cities and I don’t want to just say New York, but San Francisco, LA. They are all in collapse mode right now. Yeah, go ahead with what you’re saying.

Adam Jackson 33:51
Oh, yeah. Well, I think in his case, he ended up getting another bedroom and I think that the overall rent dropped by about 10%. So you’re just kind of Give you an idea there. But yeah, it’s it’s pretty interesting though what’s happening also in the tri state area. So when talking about New York, Connecticut in New Jersey, I’ve actually seen a good amount of price appreciation in areas of Connecticut and things like that, but that’s because people are leaving, right? So, relatively speaking, that’s an improvement for them. You’ve

Jason Hartman 34:23
got the money people in New York City who have left and hit they’ve gone to, you know, Westchester County, Connecticut, the Hamptons, and they’re definitely pushing prices up there as their money floods out of the the high density areas. But again, those properties wouldn’t make sense as investment anyway, because they’re just too expensive to ever get a decent rent to value ratio. So what we’re looking for is the middle and lower middle class tenant that is going that is, you know, just there’s a flood of money going into these cities and these type of properties. They Make good sense as rental properties. And our investors like you like me, and hopefully everybody watching and listening are really profiting from that, aren’t I?

Adam Jackson 35:10
Oh, yeah, I would say so. And again, none of us, I feel like we wouldn’t have been able to predict this. We were sort of in a mode just in recent months where it was, okay, well, let’s hunker down, let’s get our reserves in place. And let’s see what happens. But yeah, I mean, really what’s happening here, especially going to the cities in which we invest, where there’s job prospects and where there’s business friendly areas and jurisdictions. Yeah, I mean, again, we’re all going to be set up very, very well, if we continue to purchase their dollar cost average there.

Jason Hartman 35:43
I completely agree with you. I know you use property tracker, and that’s great that you’re using the software. Are there any other apps or tools or, you know, resources you’re using that you want to share with investors?

Adam Jackson 35:55
You know, I mean, at this point, really, I pretty much issues the The property tracker. It’s really all I need. I mean, I use things like Zillow and Trulia and things like that just to kind of get an idea. But for the most part, that’s really kind of what I’m using shadow stats is something that I’ve really been starting to look at more, and which I think is great. We have the founder, john Williams on the show before. Okay, very cool. And so I pretty much I think when something is when something works, I like to double down on it. So in for instance, I don’t even think I’ve talked about this yet. But one of the things that I do at this point, since I’ve reached my maximum loan slot amount for Fannie Freddie is I take a certain grouping of properties I refinance out into a non qm mortgage product or loan, which means qualified mortgage. And then what I do is I free up those Fannie Freddie spots, and I put down 15% on the next properties that I buy, and that’s all I’ve been doing at this point. So it You know, I like to use property tracker just because we look at these initial canned, pro formas. But when you’re putting it down a different amount, I really kind of want to see what the projection is going to be on that especially 15%. That’s a bit different from the 25% down, especially cuz you’re going to have, I mean, you’re going to just accelerate your total ROI. So that’s fantastic. So you mentioned and I didn’t even ask you enough about this. So sorry about that. We got to talk about other things, but the infinite returns on almost half of your portfolio, you say you’re getting infinite returns. What does that mean? I mean, I know what you mean. But I don’t know if people listening you know what you mean. So tell us more. Yeah, of course. So, infinite return basically means that the money that I put down to initially acquire the property. I have gotten that back in returns, but I still hold on to the asset so so for example, I have one property actually was in Memphis and this really was the first property I ever bought. But I put down $25,000 initially to purchase it, it was originally 100 k when I bought it, and that included the closing cost as well. So I put 20% down. Well, fast forward four years, it’s been an excellently performing property it, I get cash flow every month, it’s been the same tenant, by the way, every time. And I just did a cash out refinance pulled out 24 K, and my payment went up only by $20 a month because the interest rate went lower. So for $20 a month, I get $24,000 back out, I still hold on to the asset, and it still cash flows $300 a month, every time. I

Jason Hartman 38:43
love income property, it is the best thing ever. You know, what you’re talking about is phenomenal. I mean, you get all your money back, and you still own the asset. Where else can you do that, folks? Yeah, I mean, not only

Adam Jackson 38:57
that, but I mean, let’s keep in mind that when I Did the refinance out, I initially put down 20% I refinanced out and now have a 75% loan to value. So I still have all of that equity that sits in that property in addition to the cash flow every month and the loan paid out. And so there’s no telling what that property is going to actually return in the future.

Jason Hartman 39:20
Excellent. Good stuff. Well, Adam, first off, thank you for your service. And thank you so much for sharing your story to and service I mean, military service, of course. And just anything else you want to share with listeners or viewers that I a question. I didn’t ask you or anything or maybe your plans for the future, whatever. It’s all yours.

Adam Jackson 39:42
Yeah, well, I mean, plans for the future. I’m just going to continue to buy and then once I find something that works and works well, there’s no reason to try and reinvent the wheel. So I’m going to definitely continue to increase the portfolio hopefully at an accelerating rate. And then if I could add anything else, it would just be get in control. Have the asset. That’s the most important thing. You can always renegotiate the deal after you have it. Right. But But the most important thing is to get that money to start working as quickly as you possibly can, because that’s when all of these other opportunities and options begin to show themselves and become available to you.

Jason Hartman 40:20
Yeah, good stuff. Good stuff. Well, Adam, thank you so much we really appreciate having in the show. That was a great client case study and glad to have you back on the show. Thank you. Hey, my pleasure. Thanks for having me. Thank you so much for listening. Please be sure to subscribe so that you don’t miss any episodes. Be sure to check out the show’s specific website and our general website heart and Mediacom for appropriate disclaimers and Terms of Service. Remember that guest opinions are their own. And if you require specific legal or tax advice or advice and any other specialized areas Please consult an appropriate professional. And we also very much appreciate you reviewing the show. Please go to iTunes or Stitcher Radio or whatever platform you’re using and write a review for the show we would very much appreciate that. And be sure to make it official and subscribe so you do not miss any episodes. We look forward to seeing you on the next episode.