Housing Affordability vs. Investment: The Economic Paradox

[00:00:01]housing is supposed to be the best investment we can make yet it is also supposed to be affordable you can't have something that's a good investment that means that it goes faster than the normal wage but yet affordable meaning the average worker can afford it I know we're in a conundrum right the conundrum is exactly that like uh you guys want a Val you got you want value you want it affordable but then you also want it to be a good investment so uh I what do they call that may I don't know maybe that's wrong you guys will attack me if it is that's for sure well it's interesting you know we're going to get into how much rides on this but I mean from a general standpoint you know people once you own a home you want it to go up and before you buy a home you want it to go down right I know I know it's funny but you you know there's one thing is for sure I I mean just by looking at price I get this I completely get this but the longterm like like you know paying rent versus paying a mortgage paying it down like if you look at America today at least um most of PE most people like including our family members most of their wealth is in their home right I think most people would agree um unless you got really really lucky in the stock market or you know some something um that's where most people that's where the normal person's wealth is is is in the home over a long period of time right absolutely and you know and and this really is the housing trap right we want affordable housing that's a good investment that goes up yeah here's the real here's the real question and I'm I'm GNA throw this at you now we we haven't talked about this yet oh okay is today's price let's say in the low force is that next decade's affordability I don't know what you mean by that well what I mean is in 10 years is 420 a deal oh probably well of course because you know everyone wants a good investment so the people that are buying at 420 want it to go up but if you're buying right now you might think oh my gosh it was uh you know the 300s like not long ago right so that's the thing like it's all perspective I mean if you take a look at obviously we're going to look at these in a minute some of these graphs and stuff that show housing prices and affordability actually Jerry why don't you pull that one up the the the one with the U house price in the red and the and the inflation in the black so this is an interesting one right now you guys may know that the red is of course home prices uh the killer home price index the black is inflation so those are the numbers so take a look at that that's interesting yep right so what you can see the other thing that I I want you to I want you to focus on if as I was looking at this chart let's just go back to let's say 20054 um maybe 2000ish and you see where it starts to go up those are interest rates that's what happened remember I went through this remember and then it popped about 2008 then that was what they called the great financial crisis I guess the GFC right um then it kind of bumped around yeah even though we all thought oh my God our hair's on fire you know during that period of time it doesn't really look that bad when when you look at this this chart but I having somebody that went through it like myself um it was it was bad a lot of people lost their homes I think at in 07 there were something like 4 million homes on the market like like right now there's like one and a half or I might be off a little bit but I'm talking about MLS so um so that's significantly different um and the reason I bring up 07 is because in 2007 guess what the FED did lowered rates by half a point um that's what they did now um it obviously uh it kept kept rolling down uh which is I I I I know that we're different but then of course it started to go up again and guess what happened there low interest rates so low interest rates and then it pushed it up as you can see significantly and so now we're at this 420 is range I guess it's different in every Market but I think the average we looked it up um over this weekend and including this morning it was 49 420 or something yeah so essentially when we're looking at this you know um housing prices exceeded inflation you know but obviously the conundrum we're in is housing is unaffordable because it's a good investment correct so if it remains affordable then it's not really a good investment anymore because it's just pacing with wages and um and it's it's not just the United States that's having this issue and Jerry can you uh pull up clip B yeah this is an interesting one too so essentially you know Canada's home prices are crazy they're like double of what the US is right now you look at the US you look at Germany you look at France all of our uh the UK all of that is going up we need to go to Japan and and Italy I think probably where we need to go and we had talked about you know Japan doesn't have you know immigration so there's not as much Demand on their houses so the prices kind of stay the same you're going to go there you're going to go there well we already went there it's true we did a whole thing on uh Canada I think a while back was it alive yeah it was alive and and um I I I remember you know the average price of a home up there is gosh in the almost close to 800 yeah the 9 now um and a lot of the cities like Toronto Vancouver which by the way I've been all over Canada I grew up just below Vancouver uh in Seattle area we used to drive there as a kid and uh I've watch these prices they had a um an immigration policy back then when they were trying to grow their population where you could actually invest um you had I think back then it was like a million bucks and um and so they've always had a pretty Rob robust immigration policy and this has pushed prices up because what it does is it just again guys more people requiring the same amount of Housing and it just hasn't caught up it hasn't C that's exactly what we're seeing here now but I I think that this is is interesting too and I don't know what Italy's immigration is like I know they don't have many jobs you know their economy is not great um so I don't know if that's impacting their housing but you know the immigration as we talked about on our show is what pushes housing prices up one of the things one of the things um because we don't have a supply that we need and we're going to talk today why it's not so simple as just building more housing but also you know there's a lot tied to houses housing prices uh going up so yeah that's the other thing I I you know one of the things that I think we all got to be cognizant of is is all the little components of building a house are are more like tile and appliances and and drywall and Roofing and and Framing and labor and all that stuff whatever it costs you know to produce one home is a lot more today and so that is inflationary now all in all these little pieces but once you put it all together uh if you're going to build a house house it's going to be more today than it was you know several years ago yeah and so for most people that own a home so think about it you know think about it from the government's perspective right if people own a home then that is a lot of what their retirement is based on a lot of people do reverse mortgages to kind of get by in retirement a lot of people that go into retirement homes or nursing homes they put up their house as the collateral to pay for going into this home and not having to be on Medicaid or anything like that that so so that's really important for the government you know that people own this home right um but it's not just the homeowner so obviously a homeowner wants prices to go up a home buyer wants prices to go down but there's so much more to it than that so Pension funds insurance companies universities Banks Etc are all invested in real estate through rits yeah so depends on what kind of reate you know cuz each re is different right you have reats for malls reats for office reats for multif family reats for downtown core multi family value ad re so there are different kinds of reats but you you have a really good point and well and so so you know your pension your 40 andk might be invested in these rats and the government and and the people everybody doesn't want real estate to go down because you don't want your pension to go under you don't want your 401k to go everything has to go up just like the stock market and real estate through a Reit is tied into the stock market and let's Reit is a real estate investment trust it's a vehicle that you can invest in like a share um you know um and and there's public and private reats and there's different kinds of reats but the point is is uh danil's right like you know everything is based on everything going up like that's a fact like right like everybody wants everything to go up even your car like who wants to buy a car that and and lose money right like but but even people I think what's important to note though is even people that don't own real estate people that are living in apartments people that are Runners most of them still have 401k a pension Etc and that and our whole society needs real estate and the stock market both to continue to go up that's a good point I and I I think the you know is this really pushing the gap between the you know the the middle class like is is the middle class going away as a result of this because we always talk about you want to be in in assets that move with the economy right whether it's real estate or not you know you want to be in hard assets you know and that's why I love the Chris Martinson thing you know he talks about that could be water it could be Timber it could be oil it could be gold it could be silver it could be you know real estate or the components of real estate let's say that you know you know whatever you know what he calls primary wealth natural resources those are all going up so whatever whatever whatever happens with those next um is is more expensive so you made an interesting point you know you made an interesting point about the gap between the rich and poor the rich and poor the middle class but not just the rich and poor the middle class and the people that have Investments right and the people that have Investments tend to be wealthier but not necessarily because the middle class has 401ks and pensions and all of that but I'm going to throw out kind of a little you know conspiracy theory here um so did the FED make rate cuts to because the economy is so bad or did is the Fed going to make more aggressive rate cuts to save the banks to save the pensions to save the 401ks that are all invested in a lot of these commercial real estate deals we did talk about this over the weekend like it's a good point probably the answer is yes I would say I I mean it it solves a lot of things right like it it it well helps solve a lot of things but you I I keep saying rates went up so fast that a half a point is um helpful but it's not the end all Beall right it's going to sell more cars it's going to you know you're going to get more refinances what I thought was interesting is the rate was kind of baked in before the FED met like uh like rates went down like we're in the low sixes now which is fantastic right um you know and I know some people might even get in the high FIV and you know some people are in the mid sixes or high sixes or whatever but the point is is that you know they're hovering in the let's just say in the low sixes on the average um that's significantly down from what it was um even even 6 months ago eight months ago and during all that the FED fund rate F fed funds rate just went down to half a point right and they're continue I mean they're talking about cutting another half a point before the end of the year they're talking about cutting another Point next year and you know we'll see what they end up doing but the economy and we we talk about in the channel the econom is not good but when you cut rates you jack up inflation which is not good for the middle class so where you know where is their loyalties lying right is it really because you know as we talk on here inflation's going to go up because rates are cut that's going to hurt the middle class cutting rates really helps those of us that correct own things you know what I mean and so um if you look at it even deeper though like say the banks because the banks are sitting on all this toxic debt that's coming due this and next year for the most part and it already is it already maturing right now and those people have a lot of pool but if the banks start to go under I mean when uh Silicon Valley Bank went under that was an interest rate issue that right it was an interest rate issue but think about what it did for our currency like people around the world countries around the world were concerned we were having bank failures so that actually impacts our currency and the stability of our currency so what are these rate cuts for because the banks are definitely holding this toxic debt and the rate Cuts definitely help the bank because then people that own commercial real estate can you know lock in rates that are low lower if the interest rate goes down keeping the bank propped up so yeah so let's let's talk about that let's let's break it down um if if um if a bank gave you guys a mortgage I've heard people in the twos let's just say or let's just say three let's say 3% let's say you're holding on to a 3% mortgage you are not refinancing you are not selling you are you're gonna do whatever you can because that that mortgage is now an asset to you however if you put the bank's hat on um it's not an asset to them because you know you now you now have hedged inflation as a consumer you've hedged inflation and so so you start to look at Banks exposure their borrowing rate is higher than that so they're they're wanting you to to Neil's point they're wanting you to trade in the trade that stuff in because they're losing they're losing money on it and they can make money on higher cost because it it's a it's a margin and a spread game so right Jerry is that basically how that works yeah right so so it's in that because the bank's paying the new federal funds rate on your mortgage that you're paying you know whatever uh 3% on but as as they cut these interest rates it's going to save the banks it's going to save commercial real estate which rats and pensions and everything are invested in and it it's going to burn the middle class that doesn't own anything corre and the lower class that doesn't own anything because it's going to jack up inflation I'll be interested to see if credit card debt goes Rate rates on credit card debt goes down I'll bet it doesn't yeah that will be interesting to that'll be an interesting car loans too car loans I think you know as you guys probably know when rates were low you could barely get a car right remember that the scarcity now there's all kinds of other reasons to supply chain and all that stuff but at the end of the day right now there's an abundance you you want to see cars car prices are dropping home prices are dropping in a lot of areas too um so that's that's what we call lag that's a lag effect and there's always lag so the other thing to understand uh we I think we talked about this last week when when the FED does something like this there's there you know there there's belief that it could take 6 months to 18 months for it actually to work work its way into the economy um so there's there's a little bit of a lag here and I I think the pce is coming out this week the pumer uh uh uhum consumption is it pce yeah anyway whatever pce means but I know it's the index for inflation I think they're saying it's it it potentially could go down um another U 0.02% so that that's good and and it's heading the right way and we all know the FED said 2% 2% 2% the whole time that should not be a surprise to anybody it'll be interesting to see let's don't forget what we got just one month from now right the election yeah that's a bigy plus the FED meets one more time so let's kind of dive into how the government keeps home prices High because the government is involved in home prices continuing to go up right obviously supply and demand we talk about that on the show but it's actually a bigger issue than that so one way that the government makes home prices go up is through lending correct that that's the price of money guys period and and that when when when interest rates are lower you can stretch for that uh you know for that higher priced home that's or for anything you know um last night we were sitting at dinner with my son and he was C trying to calculate cuz he's looking for a new car trying to calculate you know based on today's rates what he could what what his month L payment you start with this monthly payment and work backwards um and the monthly payment is determined by the interest rate so it's the same thing with housing you know how much can you afford um and um and then work backwards and uh that's why it's important I told him to wait a month go wait a month come down again I think uh before the election and um if you want to buy you're going to want to buy in that little sweet spot that window let's say uh after the FED meets and before the election right and so this is interesting so as Centric said how does it keep going up if people don't have money to pay for homes lowering rates is not going to increase affordability so we want to keep going on what the government's doing so you heard a lot of talk about Camala Harris wanting it to make it easier for certain people to get mortgages to do 25,000 down payment assistance um allowing more people to qualify for mortgages makes home prices go up yeah more people over lied Supply we have a supply problem guys that's it a lot of people wanting uh not very many of something makes the price go up right and then you you you float them 25 Grand it's just going to make you go up again and you allow more people to get it you know they're they're talking about in California allowing illegals even to not have to qualify for a mortgage like they can just qualify without any kind of down payment or anything else all that stuff makes home prices go up so you almost Wonder are they really trying to help people buy homes or are they trying to make home prices go up I don't know you know I don't know look at you with the conspiracy series I'm just saying and then another thing that they're doing is they're creating longer loan terms they who's they the government well the The Fanny and Freddy work with the government they work with the government they ensure all of these loans so even though it's Fanny and Freddy they're still working with the government to secure all this debt so now you know m was telling us last year there's now a 40-year loan product here's the thing yes I agree with that and 40-year Loans are going to make housing prices go up 40 it's the same thing guys when I was a kid which is seems like a long time ago for a lot of you uh there were uh there was a 24 and 36 month there might have been a 48 month home or car loan maybe at the most like I remember when it went from 48 to 60 I was like what like all and then now it's I think 72 and I think it's even at 84 okay so now if you just watch the way uh Auto automobile manufacturers or dealers have kept your your monthly payment the same all they've done is they've doubled the length of your loan uh and kept your payment the same now what she's talking about is they could do the same thing from a 30y year to 40e exactly that what it does again solving back to that monthly payment um it could prop that up and so this is precisely guys why we're different in ' 07 and a lot of people are trying to make the comparison you know 2007 in 2007 we dropped the rate by half a point that's the last time it happened so that was gosh what is it 17 years ago and of course we know what happened after that 08 9 10 11 12 I went through it it was horrible all right very different though we we we don't have delinquents we don't have the big mortgage defaults we don't have 4 million homes in inventory um and a and uh So currently as opposed to then we had a supply uh we had an over Supply now we have an unders Supply very different so so what you're going to see with lower rates is you're going to see another housing boom so Dan said they need to do a 60-year mortgage so housing prices shoot up and I can retire but uh anti-ron is with me he said they're also creating increased tax revenue is that's a hell of a point I see that could On My Level he's On My Level boom Bingo you know it's interesting because um that's exactly what happens if you guys remember well you probably know your property taxes are based on a percentage whatever the percentage is and if as your home price goes up there's more money coming in and and real estate is low hanging fruit for cities states Etc so I want to uh discuss zoning so we talk about Supply a lot you know and the big thing is like okay you know all of this could be cured with Supply and that really is true if we government we could build more homes the prices would come down it would be taken care of right but you have to think does the government really want that since so much is writing on real estate so if you look at the zoning laws and this is why zoning is always a big deal 70 to 90% of cities are single family zoned right which means MC companies or any other company can't build correct Apartments most of those spots mhm now they they do change zoning it takes a long time and and by the way uh I know I don't want to throw a blanket over the zoning issue because here's why there are some very very proactive cities and towns right now tackling this zoning issue and they're saying we need we need to relax zoning we need more housing so so for all of you out there that are actually being Progressive thank you um but there are also like you said the ones that are holding tight and um those are the markets that are going continue to um to soar so from a real estate investor um you know there's opportunities on both sides of the fence right so but but you know you also have to ask yourself is do they want to change the zoning because they could do things to change the zoning you know that they don't do and if they did and there was more Supply then housing values would go down and housing values could also go down if you put a you know a affable housing next to an expensive area as well and people don't want that well that's why even though a lot of you guys I'm sure hate Trump that are on here but the one one of the things that he really did was he uh rolled out that opportunity Zone stuff you guys that opportunity Zone stuff is great because all that does is attracts money into Redevelopment areas and now some of those areas are probably not areas that you would want to go visit so you know those are probably going to get redeveloped but maybe they are uh they could be industrial they could be whatever but um you're you're already seeing there's a lot of people that are doing a really really good job on the opportunity Zone um stuff um and that's again it's not um it's but again the whole point of it opportunity Zone um they're they're they're relaxing the zoning in those areas that have been sitting you know I guess dilapitated or or potentially in bad areas the interesting thing is that there's some really really good areas of opportunities if you take a look that really is a great way to kind of mitigate a lot of these issues um but um you're also seeing relaxed zoning you're seeing it more in like I think even La came out with something recently if I read I'm going off a memory now where they um so here's how it works if there's one home that could be built on one acre let's say which is a lot of places now you can do two homes on one acre so if that one acre is 250 Grand now it's you can build two homes and the price of your land is 125 and 125 as opposed to one home on 250 so what it does is it it takes the one and a quarter puts it and and spreads it um through two homes instead of one and therefore it lowers the cost of that home because the cost of the home let's so is land plus the structure plus some profit for whoever's going to do it that's those are the three things so if you can if you can spread that land cost over a couple or even four or eight then now all of a sudden you're starting because the the whatever cost to build is what it cost to build period so I always I always laugh because you guys know we're in Oklahoma we're in Nevada we're in uh Texas all over the place we're in we're in Arizona you know the cost of build apartments are very similar in Vegas or Dallas or Phoenix you know what's different the land and the impact fees that's what's different and of course the rent and the property taxes and utilities and those kinds of things but that those are operational expenses but when you start to look at what it costs what a framer charges for a 200 unit building let's say to buy or to build something in Phoenix it's not that much different in Vegas it's not that much different in Dallas and so the cost to actually construct something is not that much different because a lot of them are drawing the same the wages are kind of settling it out so what are the big variables it's almost always always the land plus impact fees which means when you're plugging in like you're getting the sewer the water and all the utilities and all that stuff as a big project um those are costs so um and then of course interest rates of course is something else but then there's a margin so uh when you when you spread the cost of that land um you actually lower the cost of the project and and that's kind of the point of this zoning discussion so it just is an interesting you know way to think of it you know we want housing affordable yet we want it to be a good investment and uh we as a country need it to be a good investment and so it it is an interesting we wanted to bring it up because it's an interesting way to think about it if you try to think about it through the lens of the government and the pensions they're look1 government's looking at it I mean blue red doesn't matter they're both focused on homelessness and affordability so that's good so um now I know there's different views on different ones and how it'll all roll out but the fact is if you go on the even the White House's website today you'll see there's Pro there's programs on there for affordability but do they really I don't really believe they want affordable housing that's the whole thing here the whole purpose of the video discussion we're going to play a little ping pong here yeah I I don't really think they want affordable housing cuz if they wanted affordable housing then everything would go down and they don't want that theil's triggered they don't I'm telling you guys they don't they say they do but they don't you could be right so no you could be right but politically it's on their webs yeah it sounds good yeah um anyways um let's get into some questions normally you would ask us questions on premium and we would read them for you but today I didn't pull any so we are going with the YouTube question so what is your what is your question we were happy that she was here M Dearing asked you know rates are going down unemployment is going up do you see this as trouble for class B and C single Home Market yes absolutely positively guys like the FED has come out over the years and said that um unemployment's too low so what does that mean what that means is they're going to force unemployment higher and when when rates or when wages are low it's inflationary I'm sorry that was wrong when when when uh when it's uh when unemployment's low there's pressure on wages and wages tend to go up but we just saw this so wages can be inflationary even though I believe that you guys all need it like I mean that in my heart I mean you you know with inflation I I we were looking at this weekend I sent you that email like take a look at stuff people really buy like it's in the 10 20 30% higher range okay that you know they offset it with all these other things to make inflation look low but at the end of the day the the the the the person that's um they're paying way more than they are in making whatever they're making but the FED is is is increasing unemployment when these small percentages and they're small we're talking about millions of jobs Millions plus they're reclassifying how they you know um how they're how they're um CL you know how they're actually U reporting them but the point is um yes it's going to hurt that it's definitely going to hurt that we we've already um we've already done a couple shows around this around affordability some the the the a you know the pay later Apple pay later and um you know these kinds of programs like Flex where people can Finance their rent uh we're seeing it at the at the renter level already and um so yes I think you're you're definitely going to see a squeeze there for sure unfortunately that's why it's really really important um um management and screening is going to be the most important because people need housing um and uh you got to really really be you got to be consistent and and the same for each person but uh deciding who actually moves into your apartment or rental or house or whatever it is is going to really be tested in the next few years mhhm yeah I almost think you know with a lot of people right now uh I see it on the boards that I'm on for real estate you know rents are softening a little and even going down in some markets it's good for the renter and it's good for the renter but what people are now dealing with is it seems that they're moving in uh they're not going with their normal standards of how they're screening tenants because they're making exceptions because it's harder to find a renter and I found I exact opposite of what we cre a tagline What is it it's better to lower your rents than your standards yes no that's true you know correct guys like like work with these people um the market is going down there's like 500,000 units now that of course these are all over the map right but there's five housing housing units hitting the us right now in all you know in a in a town near you like you know all over the place right just take a look you'll see that extra Supply is good that's exactly what we're talking about extra Supply reduces pricing so if you're a landlord that means your rents are going to be less and you know you're starting to see home prices come down in some areas as you're starting to see these things all good um but that's coming to an end as well you know maybe a year year and a half Runway that's it yeah and and I I do I I believe that you know you're better to lower your rent a little bit and get the tenant that you would normally move in that because if you start lowering your standards you're going to have more problems it's going to cost you more money than if you lower your rent guys let tell you something like I I I I was I uh I years ago I listed my home it sold fast I was like uh oh shoot and so I had to go buy another one like while I was building another one like I had like a year Gap because it take like two years to build this house so I went and bought a house and um in a brand new home in a you know smaller and and really nice little area and my next door neighbor was a renter and he he uh I'm like hey Bruce I'm going to be here like you know less than a year as I move as I kind of monitor this new house well he he rented from me and um he was there nine years like and I'm telling you it was the best thing ever right now the housing market was all over the place and interest rates were all over the place and Bruce just paid his rent him and his wife just paid their rent on time for 9 years and I I slowly just kept it going but it was well below Market you know like two 300 below could I have made more money of course but but not having to turn the unit Market the unit do the carpets do the you know all the stuff um you know uh uh you know because in nine years that thing could could have turned four or five times so there's a cost in that so so having somebody longterm that can pay just a little little bit under Market is a good long-term strategy and and and just by writing that out and having him pay down my mortgage uh was a huge huge thing but also just peace of mind like knowing you know I built relationships with them I'd go over and have beers with them we you know all kinds of well we always recommend you don't do that with your tenants I do though I I like my tenants don't do that yes um telling you it's better longterm relationship minor Minor Threat I asked Professor Steve hanky who believes it matters uh what matters is the money supply versus the federal funds rate in the economy he said that inflation will not continue to rise based on a quantitative tightening a year ago what do you think about that okay what matters is the money supply versus the FED fund rate the problem is we don't know what the money supply is that is a fact uh it's changed and the euro dollar which is outside of the US which is US Dollars nobody knows at all it's not being tracked can you put back up for um um and I I you guys probably know there's more money outside the US than inside um and um just go watch some of George gamon's videos um he said inflation will not continue to rise based on quantitative easing a year ago um quantity en tightening oh got it got it got it it's possible I suppose but um you know I look at our entitlement programs I look at at all the money that we owe um I look at our debt and I look at um you know what interest rates do so um when interest rates go down there's more consumption so I look at those kinds of things so I suppose it's possible but on a on a macro level when you look at it that way sometimes the economists you know have a good point but I can assure you um if you look at it at um a boots on the ground level we are severely Supply uh deficient with housing and as the population grows you're going to have prices go up period and right now we're in a temporary Funk but those those deals all started two three years ago um you know when I started a construction project um you know I I got one right now that's stabilizing uh we started three over three years ago so um you know rates were very different costs were very different at that time and we went throughout pandemic we would through all that stuff during that period um but um so there's lag on all this stuff so I don't know uh I guess it's certainly possible I'd love to see I'd love to see um gas go down I'd love to see food go down I'd love to see rent go down I'd love to see housing prices go down you know I'd love to see car prices go down I'd love to see that but we believe that with the cuts you're going to see a lot of inflation um Robert is asking Ken what do you think about real estate in blue States like California New York EX Etc do you think these housing prices will continue to rise or have a steep correction it's a complicated question but it's a good one um the the I'm from a blue state Washington state where I grew up uh you know I family that's blue our family it's red even in Washington so it makes Thanksgiving fun but um I will tell you um there's pros and cons like you know from a Prime standpoint you got to be careful obviously and in Portland Seattle that's what we've got uh being a native from there but on the other side of it if they make housing harder to do housing harder to if people are leaving and or developers are saying screwed I can't you I can't build affordably here uh you're going to have Rising prices so if you're investing in a blue State and and and they don't want any more housing you're you're your prices are going to go up um you know it's not good if you're a tenant but um it's good if you own houses you know you look at the price around Seattle like look at look at the prices I've gone up you know and all the suburbs around um I know that area because that's where I grew up and I go there a lot but um you know so it just depends you know if uh kind of back to the original discussion that denil and I were having earlier little little little spat or little disagreement um it it it's going going to depend on what they do with the housing policies in that particular market and they could be different from City to city state to state but um generally I don't like blue States is because of what they do with the landord tenna law believe it or not that's actually the bigger one for me and that means that if they can say hey we're going to raise your taxes on your properties and we're going to raise your utilities and we're going to make you do union labor and all these other things and we're also going to cap your rent we're going to we're going to do a rent cap or rent control those kinds of things so they're they're minimizing your your potential revenue and they're jacking your expenses to cover all their expenses that's really the bigger issue for me so those are the things I look for um when I'm um you know in Myspace which is um in investment real estate where tenants are basically paying down my mortgage but um there are Pros to investing in blue States depending on where M Dearing said if you want to get rich vote red if you want to stay Rich vote blue that's a good way to say it I like it um anyways but uh well thanks for joining us and we will see you guys next week thanks