Hello my friends and welcome to another episode of Passive Real Estate Investing. I’m your host Marco Santarelli and I’m glad you’re joining me today. If you are new to the show or have not subscribed remember to do so. It only takes you a few seconds to subscribe to the show and you’ll never miss another episode. Well I have an interesting guest today and kind of an interesting topic for at least for a lot of people but it’s often misunderstood and it’s a topic about not just personal freedom and financial freedom but what freedoms are at risk. Our freedoms perhaps have been, I hate to the word stolen because it’s such a strong word and we live in such a quote unquote free country. But the reality is, that a little at a time, some freedoms are being eroded, slowly evaporated, and many of it is almost unrecognizable. And when you start to learn more about that, you’ll start to see that things are constantly changing. And it’s not that we are necessarily getting more and more freedoms, but they are being controlled or constrained.
And my guest today is one of those people that talk about this in a very clear way and in an interesting way is really what it is. So today, know, my guest, Tony, had a conversation with me, a great interview about how we are losing some of our personal and financial freedoms. And in his book, he talks about this chapter by chapter, just a little bit about how that is happening and also how it’s affecting us. But the good news is, is you can do things. You can do things to stop that erosion or that decay and take control of the things that you can control. So the bottom line is it’s never too late or even too early to plan and take control of what you can control. In other words, your personal freedoms and your financial freedoms. So today we’re gonna chat about things like, the education system and education in general, the cultural and societal issues revolving around, you know, personal financial freedoms, the politics of it, not political, but the politics that impact you, the economics and the monetary system. So it’s really a show about personal finance and the freedoms that are there for us to build our future, both financial and personal, I think you’ll find it an interesting conversation. It was, I wouldn’t say a long interview, it was about an hour, but it’s one of those topics that could go on for hours and hours and hours. So anyway, it’s about 40, 45, maybe 50 minutes of great content. I hope you enjoy it and would love to know your thoughts. And as always, if you have any comments or questions, you can email those to me at passiverealestateinvesting.com. There’s always a link there to either ask questions or submit comments, and I appreciate you doing that. All right, well, enjoy today’s show.
It is my pleasure to welcome Tony Lopes to the show. He is a first generation American, a real estate professional. He’s a bestselling author, he’s a coach, and he’s a speaker. He’s an amazing person. You’re gonna love him. I’m really looking forward to this interview today. His investments in understanding of the markets and economics allowed him to retire at the young age of 44. Think about that. How would you like to retire at the age of 44, or have retired at the age of 44? That’s an incredible feat. What drives Tony is sharing his knowledge and experience that he loves to share and enjoy doing the things he loves to do, which is create financial freedom, teach people about financial freedom, write about it. That’s why he’s a speaker, an author, a coach. It’s really what my understanding, is drives him. So, with that, Tony, welcome to the show.
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Marco. Thank you so much for having me on. This is gonna be a lot of fun.
Well, I had a lot of information in my mind about you and in front of me, and I’m trying to like, just kind of summarize it, you know, to create a bio, if you will, as I’m introducing you. So hopefully I didn’t butcher it, and hopefully I didn’t miss too much.
No, you, you did a beautiful job. Hopefully I live up to all that goodness there, <laugh>.
Yeah. Well, I know you have, you know, and what I know about you, so this is gonna be great. I want to ask you a question about yourself to just so the audience has a better feel for who you are and where you came from. But then we will talk a little bit about your book that you released last year called Freedom at Risk. I think it’s a brilliant title, and the content in the book’s really, really good. So I’m excited to finish reading it and I’m gonna encourage my listeners and viewers to purchase a copy or download it somewhere. But before we get into that, tell us how you became interested in this whole topic, which you wrote about, of personal and financial freedom. And then, you know, you even talk about macroeconomics, which I geek out on. So give us a little bit about your background.
Yeah, so I’m gonna take you way back to, you know, really it started with my parents. My parents migrated to this country from Europe. They came here poor. I did not grow up with money. So folks out there who think I got started in real estate with a whole bunch of money, I did not. Right? So I offered that up as encouragement for those folks that are, you know, like me. Back then, I was scrambling to kind of pull together a nest egg to be able to go and start investing in real estate to get more freedom, you know, but it really started with my parents. They came here with little in their pockets and way of money. And so they, you know, shared with me and my sisters really a mantra of, go to school, get a great education, you’ll get a great job, and you’ll be taken care of forever.
That was their thought process. That was their mantra to say, okay, follow this and you’ll be set, you’ll be good for life. And so, me as a kid, as a young man, that that’s what I did. I went to school, right? I had got two great degrees. I got a bachelor’s in mechanical engineering, which is a great degree. You can do so much with that. And then I also went on to get my MBA degree, right? I had those two degrees. So, okay, check that block right there. And then I got a great job and, you know, worked there for some period of time, transitioned to another company. And after two years, I ended up getting laid off and I was like, wait a minute. This was never part of the mantra that my parents handed down to me. Nowhere in, you know go to school, get a great education, get a job, get laid off, right?
It was part of the mantra. It wasn’t in there. And so that was really, as a young man, you know, I was like 24 years old, Marco, and I was just like really shooken by that. And, you know, said, wait a minute. There has to be a better way. There has to be a different way. And so maybe some of your audience, some of your listeners out there can resonate with this. Whether they have immigrant parents, maybe they’re first or second generation, you know, just like me. Maybe they they got laid off just like me, right? So maybe some of this resonates with them, but it was certainly, certainly an inflection point in my life where I said, wait a minute, for me to have, and freedom has always been very strong. Like, like in me, I want the most freedom I can get.
And so that really jeopardized my freedom. And I said, I have to do something different. I can’t just let my freedom, let my financial independence be based on one income stream. I just couldn’t do that going forward. So that’s why I ended up, I I did have to get another job, which, which was okay. I wasn’t financially independent at the time. I did get another job to be able to pay the bills and whatnot, but then very quickly I transitioned to, you know, finding how to get capital together to be able to purchase my first building. And, you know, I didn’t start by buying apartment complexes where buying apartment complexes now, which is great. We’re serving our investors because, you know, like, like you had said, I, I like to serve, I like to serve my investors, my community, my students, whatever it is.
I want to be able to add a lot of value to their lives. But I just started out small. Again, I want to encourage folks, you know, you don’t have to go big If it’s a duplex, if it’s a condo that’s gonna be able to cash flow, if it’s a single family home that you can purchase as a rental or an Airbnb, that’s gonna cash flow for you. You know, take a look at doing that to be able to start cash flowing a little bit and then maybe buy another one. Or buy, if you bought a single family, maybe next buy a duplex or triplex or something like that, right? You know, you don’t have to go like super mega big right off the bat. And so that’s what I did. I ended up buying a quad, a four unit building, and then I springboard from there.
I, I did some other multi-families. Again, small duplex, triplex, five unit building. I did some new construction for a while there around 2007, 2008. That was an interesting time, wasn’t it? Yeah, very. So I did some new construction, right? So I have a lot of experience, you know, with good markets and bad markets. And so, yeah, so that’s really where I come from in terms of my background, how I cut my teeth, got started in real estate, got started with some financial freedom, is by realizing after getting laid off, you know, this single trick pony of a just one, you know, income stream wasn’t gonna cut it for me. ’cause It could go at any possible time.
Yeah. Yeah. Well, sorry to hear about the job thing, but sometimes that’s a blessing in disguise. ’cause It puts you on a different path, but it’s a better path and you don’t know it at the time. And now all of a sudden you have more interest in learning about financial freedom. And now you start, you know, learning from other people, successful people reading books. And you figure out, oh, you know, I, I need to invest. What do I invest in? Well, real estate’s a great asset class, so let’s look at that. And you get your first single family home or your, you know, first quadplex in your case, and you build from there. And you call it small. I, you know, I want the listeners to know that’s a big deal. It’s not small. I mean, maybe it’s small in terms of the, you know, assets size relative to a commercial building or an apartment building or whatever.
But look, you know, you and I both know there’s a lot of people who are financially free and successful with a portfolio of single family homes. You know, it could be whatever you want, whatever resonates. It could be an apartment building, it could be just a portfolio of, of singles and doubles. The important thing is to learn what you can and take action and just do it. And then, you know, build the team around you to help you achieve those goals. So you mentioned financial freedom multiple times, probably a dozen times. And you know, you probably learned a lot, many lessons over the years, as you know, as I have as well. So maybe talk about some of the key strategies or even the lessons that you’ve learned that helped you achieve that financial freedom.
Yeah, sure. So, you know, there’s a lot of different ways, and I do talk about this in my book. My book almost reads that, you know, there’s part one that describes power. Freedoms are at risk. And there’s a lot of different ways, political, the education system that doesn’t fully teach us what we truly need to know coming out of it. Their society. Society, we ourselves steal our own freedoms. We leave it up to others, you know, mainly the politicians to fix things. Well, no, it’s us. It’s within our community. It’s me and my neighbor, right? We need to fix things. We can’t just always be turning to the government for that handout, so to speak, or for that helping hand. So there’s a lot of different ways our freedoms are at risk. So I explain that in part one, just to kind of get folks in the mindset of really understanding that piece.
And then in part two of the book, I talk a lot and it’s really reads as an all la car package because, you know, granted, I talk to a lot of different people. Not everybody is all about real estate. Some people just don’t want to do real estate, and that’s okay. I talk about using a business, right? I have a business, you have a business. I talk about having a business to be able to get additional financial freedom, right? Create some cash flow for yourself. I talk about asymmetric plays, right? And, and a good example of that has been Bitcoin, right? You could have bought Bitcoin many, many years ago. You know, a thousand dollars in Bitcoin years ago would be probably millions of dollars today, <laugh> in Bitcoin, that’s an asymmetric play. Whereas if you invested a thousand dollars and you lost it, it’s a thousand dollars.
It’s probably not gonna make you broke. But if in which it did went much, much higher, now a thousand dollars turns into multimillion dollar account, right? So there’s an asymmetric play for you. And so, as I talk about a lot of these different things, I also talk about value, value in ourselves. Like, and this is especially important for young people to, I think, understand the more value you bring to the table, the more financial freedom you’re gonna have at the end of the day, right? If you’re just a one trick pony and all you know how to do is change the oil in the car, and that’s a very valuable service if you need your oil change. But if that’s the only thing you know how to do, chances are you’re not gonna get paid much more than probably $25 an hour, right? Right.
But if you know how to do many, many more things, you know how to change the oil into car. But you also use that because, you know, cars, you like cars, you start a YouTube channel, you start, you know, creating content, and now you have a YouTube channel with, you know, a hundred thousand subscribers. Now you’re creating an income stream from YouTube because now you know, you have a ad-based social media. Now you get an income stream from, from YouTube because you’re educating people on cars because you know cars right now, maybe you go off and you set up some either education or, you know, write your own book or your own pamphlet or something, right? You leverage that one thing to be able to create multiple sources of income, because now you’re that much more valuable to somebody, right? I go out there and I say, and the only reason why, you know, some people say, Tony, how’d you get started in syndication?
Did you create your own team? You know, do you raise your own capital and da da da? I mean, my claim to fame with syndication, so to speak, is I bring a very necessary important component to syndication. I can do the underwriting, but it’s not necessarily the thing I love to do, but I can do it. You know, I don’t like to raise capital. I can do it, but it’s not necessarily the thing I really enjoy doing. I enjoy property management. I love going out to properties. I love getting my boots dirty, walking around a property to see what it looks like, see the condensers for the AC units, walk on the roof, see what that looks like, look at the tenant base, look at the condition of the units. That’s my extreme value that I bring to a syndicator because there’s other people on my team who they don’t like doing that, nor do they have the knowledge base to look at a roof and know whether it can be repaired or it needs to be replaced, right?
The same thing with, you know, the mechanicals in a building. They don’t, they don’t know, which is, okay, that’s where I come in. That’s the value that I provide. So when I look across like what I do, yes, I do coaching, I do, you know, syndications because I bring the value from a property management perspective. You know, I’ve written books, so I have value there. I get on stage, I talk to, you know, hundreds of people because there’s value there to be able to share with those folks, right? I come on YouTube channels like this great one here to be able to share some value, hopefully some value that people will walk away with, with real tangible, let me go do this. To be able to profit from it in some way. So, you know, I really hope folks take a moment to really think deep down in terms of the value they bring to the world each and every day. And if all you can do is write one or two things on the paper, maybe you gotta think about what else you can do to grow that list. Because the more value you bring to the world, the more financial freedom you will ultimately have.
Yeah. That is so very, very true. I want to drill down at that a little bit. You know, you wrote this really good book. One of the things that you touch on, and you’re talking about it now, is, you know, you, we’ve, we’ve got personal freedoms and financial freedoms and you know, I, I see them as interconnected because one enables the other, if you will, in your opinion, how connected or interconnected are those two? Do you have to prioritize them if you’re just getting started or if you’re just building your investment portfolio?
So they are somewhat interconnected, as interconnected as an individual wants them to be. Like, for example, I have a neighbor who they would be very happy living in the middle of the woods, so to speak, living off the land and having tons of freedom as they define it, right? We all define freedom differently. That would be their freedom, living off the land, serenity in a very scenic place, nobody around them. They would define that as freedom, and that would be okay. And they probably don’t need a lot of money, cash flow to live that way. And they would be perfectly happy with that freedom that they’ve created. Me. On the other hand, I like to travel. I like to go overseas. I like to go different states. I like to do different things, have different experiences. That requires me to have a certain cash flow each and every month to go buy airline tickets and reserve hotels and all that shenanigans that comes along with it, right?
There’s a cost associated with that. But for me, that’s a freedom that I enjoy. The freedom of traveling where I want to go, when I want to go at certain levels of travel, right? That’s how I define freedom, right? So it’s really a case by case basis. And so in the book, in part two, I do distinguish between personal freedoms and financial freedoms. You can bring those together, but not everybody is cut from the cloth of, they really study the financial freedom aspect of it. I share like for personal freedoms, just starting a garden in your backyard, <laugh>, right? Right. To be able to plant a garden and know where your fresh fruits and vegetables are coming from, to be able to go out on an afternoon, pick some lettuce, some tomatoes, some some cucumber, and be able to create a salad for dinner and know where those vegetables came from.
There’s a certain amount of, you know, peace and serenity that comes along with that. Not to mention when you’re in the garden, weeding, watering, you’re away from the shenanigans of social media. Yeah. You’re away from, you know, Fox News and CNN and you know, yeah. You know, the different things you’re playing in your garden. You have serenity, you have a quiet place to think, think things through. There’s so many things that are beckoning our attention. We all know it. It’s insane. So being able to have a garden, I just said two things there that brings such immense freedom to us just by having a simple garden in our backyard.
Yeah. I, I agree. And that’s something I’m guilty of. I don’t take enough time for me, you know, I’m always addressing other people’s questions, concerns, needs. I’m everywhere all the time, but it’s not for me. So I, you know, I’m horrible at that <laugh>, I gotta get better.
Oh, I, I’m the same way. I, no, I get it. I like to serve, I like to help people. You’re the same way. You’re cut from the same cloth. I do derive a lot of energy from that, and I know you do too. But yeah, there’s a certain time when we should allow ourselves some amount of time to kind of shut down and take care of our own mental health and physical health that’s important for us. Yeah. ’cause Otherwise, if, if we’re no good we’re not gonna be able to serve Yeah. At the the best capacity.
So I’m, I’m just curious real quick, what inspired you to write the book Freedom at Risk? I mean, was there a driving motivation or you just wanted to get your thoughts and stuff on paper? <Laugh>
You know, that’s, that’s a great question. And that really, the behind the scenes to it is simply this. So I, I don’t have any kids, right? But I have a niece and I have some nephews, and I know they’re not getting the education out of the school system that they should, nor do they have the experience of time. I’m 50 years old, so I have the experience of time being on this planet for 50 years. I’ve seen a lot. I’ve seen the, a trend of things. They don’t have that, right. And that’s okay. ’cause They’re still young. I’m not, I’m not saying they’re, they’re bad kids. They just don’t have that experience, that exposure yet. So, what I wanted to do, my goal was really to write 20 or 30 pages of this is how our freedoms are at risk, and these are some things you can do.
And that’s why I broke it up. Really personal freedoms and financial freedoms. ’cause Not all my niece and nephews are geared towards the financial piece, right? Not everybody is cut that way. So I wanted to give them some good, you know, things they could read through and really take action on. So really, Marco, that’s really how it started. Me sitting at a coffee shop with my laptop, where I thought I was gonna write 20 or 30 pages for my family, <laugh> like six months later I was at like 35,000 words. And I, I was like, this isn’t a, you know, a 30 page thing anymore. This is a book. Yeah. And I really had to switch gears at that point. That was really at a, you know, you would think, gee, Tony, after like, you know, a hundred pages, you would think it’s a book. Right?
You know, I was just going so fast and furious with, I wasn’t really thinking, I was just creating that content that I thought would be valuable for them. Yeah. So I had to switch gears. I had to get an editor, I had to get a publisher, I had to get graphic designers. Right. ’cause none of this was like, I don’t know how to do that. So I had to put a team together to do that. Yeah. Which was fun as far as an experience. But really this book started in that way, writing it for my family. So, as I say, it comes up from a place of, you know, a place of love really is how it all started. Yeah. I
Love it. Well, so before we started recording this interview, we, so just briefly about, you know, the concept of Renter nation air quotes. But it’s a term that’s been used for quite a while now. I wanna say years. Because, you know, I talk about it on the show often and how we have a housing deficit. Interest rates have been going up, affordability is down. People can’t afford to get their own place or move out their bunking up. And, you know, we’re just kind of being driven or have been driven to a nation, if you will, where we have more and more renters and fewer and fewer homeowners. And there’s nothing to say that that’s good or bad, right or wrong. It is what it is. It’s just a factor that ties into economics and maybe some politics and whatever else, you know, depending on where you live. Yeah. So, long story short, talk to us a little bit about why we should be interested in the concept of this renter nation topic. Yeah. And further, maybe if you could drill down into some detail, like, what are the implications for us and our investments?
Yeah. And so you know, I don’t, you know, I don’t necessarily share, you know, this whole thing of renter nation for, to drive people to become landlords or investors. I mean, there’s so many tangents that this can go into. If you wanna start a business around property management, right? You don’t wanna own any buildings or you, you don’t have the capital to, to really buy buildings. You wanna be a property manager. This is a great time to start that business because there’s gonna be many, many more renters who are gonna need that service. Right? And so, when you kind of walk through the whole theory of renter nation, there’s a lot of tangential businesses that come off of that. Mm-Hmm. <affirmative>. So, as I think about Renter Nation, there’s a lot of different factors that push us in that direction. And maybe somebody can dispute one or two, but as I go through my laundry list, it’s like there’s no disputing that this is actually a trend and it’s gonna continue to keep happening.
Right? So, you know, one of the things I point to is this huge federal deficit that we’re in right now. So much interest is being paid daily on our debt. That interest is coming from somewhere. It’s coming from our tax dollars, you know, and it’s coming from, you know, really the American people. And at the federal level, when that interest is paid, that creates a void of funding that can now flow down, that can’t flow down to the states, right? When we didn’t have these huge ballooned interest payments, there was federal funds that could flow down to the states for healthcare, for education services, for welfare programs, that funding could flow down to the states. We’re actually starting to see that, ’cause I work with some, some different programs. We’re actually starting to see some of that dry up. And so you look at those programs and they’re not gonna go away.
The funding’s gonna come from somewhere. And I think a lot of us as investors, we’ve already seen where some of that funding is gonna come from, and that’s gonna come from increased property tax. We, as property owners are gonna continue to see property taxes go up. I know in the last year, some of my properties have gone up 25% in property tax. Wow. It’s insane. Right? So I’m definitely paying my fair share <laugh>. So when you look at that, and through the lens of affordability, even if interest rates come down, which would be great, even if the price of a home came down, some, which I don’t think it will, this thing of property taxes is always gonna be hanging over your head, and you don’t really have control over it. When you buy your home, you may think my property tax is gonna be $10,000 every year, but then you get that assessment in the mail, and then it says, well, your property tax just went up to 12,000.
And then, you know, a couple of years later, it’s now 15,000. Right? This is not something that you have control over. And so you may own your home. At the end of the day, you, you can own your home outright free and clear of any mortgage. But I look at some of my, my own homes that I own, and I’m like, even if I own it outright, I still need to come up with a thousand dollars a month for property tax in perpetuity. Yeah. And that’s the lowest it’s probably ever gonna be. It’s only going higher than that. So in terms of affordability, people being able to buy a home property taxes is gonna be a problem going forward. And that will drive towards people being renters for longer. And an actually interesting statistic I just saw, if I, I wish I recalled where it came from, but the average age of a first time home buyer, 37 years old.
Wow. First time home buyer. Yeah. Higher than I the number I was thinking. But that’s crazy. So what does that mean? It means they’re renters for longer, right? If their first time home buyer is at 37, they’ve been renting for longer than previous home buyers. So that’s just a trend we’re gonna continue to see happen. You know? And so that’s part of the financial piece that I talk about around Renter Nation. But there’s also a societal piece. And I find this pretty interesting. When I look at the macro space, I look at it and I say, there’s things that exist like Instacart, where people don’t have to go and buy their groceries, they just order it up online. Right? And I’m not saying this is good and bad, just like you said, Marco, this isn’t good or bad. This is just what is, and that’s the world of investing that I like to operate in.
Not, you know, the world to make believe how Tony Lopes thinks the world should operate. Right? No, it’s what is. And so there’s this Instacart thing that exists. And so there’s been a growing trend of people who don’t want to go to the grocery store to buy their groceries, which is okay. Furthermore, there’s these things that exist called Uber Eats and Grub Hub and Door Dash, where people order up food already prepared. Not only do they not want to go to the grocery store to buy the food, they don’t wanna make it at home. And again, that’s fine. But when I look at this through the lens of Renter Nation, that group of folks who are using these, these resources to order up food or groceries, what do you think their inclination is? They’re slant towards spending the weekend painting the trim on the house, cleaning the gutters, mowing the lawn, or cleaning the flowerbed.
Chances are, if they don’t wanna go to the grocery store and buy food, which is a necessary <laugh>, you know thing, chances are they’re not gonna want to do those homeowner things of cleaning the gutters, painting the trim and mowing the lawn. Right? That falls further, further down onto priority list, which drives them more towards falling into the renter category. And I’m not saying that’s good or bad, it’s just what is. So when I look at it through a financial standpoint, property taxes are going higher. There’s a lot of things driving financially us towards more renters, and then societal reasons driving us towards more renters. Right? And there’s a lot of other things. There’s energy. Energy is getting more expensive. Mm-Hmm. <Affirmative>, we’ve already passed peak fossil fuel production. I love talking about this stuff. I get so excited. I’m sorry, I’ll, I’ll end it with this one.
But we’re already passed peak fossil fuel production. We, we passed that a a couple of years ago. So every barrel of oil that we pull out a ground cost us more each and every year. So what does that mean to a homeowner? You know, if you have to pave your driveway, or if you have to seal coat your driveway, that’s all oil based. If you have to replace your shingle roof, that’s oil based, the fibers in your carpet, you know, your appliances, all that stuff, the fundamental building block is oil. Right? So all those things get more expensive. So home ownership just gets more expensive. And again, it’s just another reason. Energy being a reason to push people more towards that renter pool. Yeah. Versus an owner.
I would take some of what you said, even a step further. You know, the fact that people are not choosing to mow their lawn or go to the grocery store, or do you know, all these other things that maybe you and I considered more, quote unquote normal, you know, a lot of people, because things are more expensive because of inflation, because we’re in rent nation because affordability is low. They’re being driven into this gig economy. So a lot of these people have second jobs, third jobs, you know, they, they might have a full-time, nine to five job, but, you know, in the evenings and weekends they might be doing Uber Eats delivering, or, you know, doing ride share or something, right? So when you look at it that way, it’s like the problem is there, but the problem is worse than you just described it. Because these people who can’t afford to do the things or do the things that you and I think are, you know, normal, they’re out doing second jobs, third jobs to pay the bills or to even save money to be able to afford a home or whatever.
Yeah, I absolutely agree. Short story. So I review some of the applications that come across my desk for some of my rental units. I still review ’em, I review ’em, because I think that’s great data for me personally to see what’s out there, what the application pool is. And so one of the things I draw from that is just what you’re saying, folks who have, you know, second jobs gig, gig jobs, or they depend more on assistance today than I’ve traditionally seen. So I totally resonate and agree with what you just said, Marco. Absolutely. I have a client who just purchased a duplex, and I think the best way to understand whether the economy is healthy or not is partially to become an investor in, in real estate. Because he is getting such an education right now by looking at applications to fill his duplex.
He’s seeing these applications and he’s coming back to me and he’s like, Tony, these people barely make what they need to be able to rent. And I’m like, yeah. So when the politicians say, we have a great economy, we have a very healthy economy, in reality, there’s a lot of people who are just getting by. And when a recession hits, because we’ve been in this boom for the last 15 plus years, we’ve been in a great economy for 15 plus years. When that goes the other direction and we enter into a recession, I think we’re gonna see a lot of people experience some pain. And I think the poverty rate is gonna go up. And I, I think the the news stories are gonna really start to change. ’cause There’s so many folks who are so close to poverty, it’s being under reported, which is quite sad. Okay.
So as investors, you’re an investor. I’m an investor. Everybody listening to this show, watching us listening are investors, how do we prepare for what we just talked about? How do we address this issue as an investor? How do we prepare to deal with it going forward? Everybody’s in a different place. Some, you know, some people are very sophisticated, they’re financially successful, others are newbies. Just getting started, wanna get started. Many people are in between. And then even if you are an investor, active investor right now, it’s good to pay attention to trends and, you know, the economy and the world stage. So we can adapt, you know, like maybe we have to make a shift in what we’re investing in or how aggressively we are investing in things. So how do we prepare and adapt as investors?
Yeah, great question. So, I mean, I’m in the rental space. I know there’s a lot of folks out there who have, you know, seen the prices go higher and higher, and it’s tough to cash flow on some of these properties. But we are still buyers. We fail so strongly in the rental market that it’s gonna continue to thrive. That it’s just, we’re we’re buyers. We just purchased down in outside Miami, a 153 unit apartment complex back in may where we’re looking to grow, we may hit some bumps in the road. So, you know, there may be a period of time where six months, nine months, 12 months, there may be some some softness in the, in the market, right? In the rental market. But we’re not looking, we, we look at that, but we’re really looking at, you know, where are we gonna be in five years, 10 years?
Where’s the, the property value gonna be in that amount of time? So we like these assets. The other reason why we like these assets is when we do hit this recession, which we will, it’s just business cycles. We will encounter it. The politicians are gonna come to the table with money. They are gonna create money like you’ve never seen before for these welfare programs to be able to support their voter base, really, because they’re buying those votes, right? So they’re gonna support their voters with refund checks with welfare programs, and that money is gonna be created out of thin air, right? And so what that does is that does create inflation. When you have more dollars and, you know, circulating that is gonna create inflation, which will push up the value of these properties. We, we saw it just happen over the last, you know, three, four years during the post covid spending spree by the federal government.
That’s what we saw. We’ll see it happen again in the next go round. And it’s the best way to protect yourself, protect your purchasing power as an individual, as your freedom. You wanna protect, you want to protect that purchasing power. So even if things get more expensive, say a new car costs a hundred thousand dollars in the future, well, the building that you purchased, or the single family that you purchased for 300 K is now worth seven or 800 K, right? So your purchasing power has been protected through this inflationary period such that, you know, you can now go ahead and afford that new car, should you need to buy it, right? So I love these assets that will protect us from inflation, but also, I’m a just a huge believer that renter nation is just gonna get stronger. Rents are gonna continue to go up, right?
I mean, you look at, you know, I, I have some properties down in Florida, and I look at those properties and I say, okay, you know, one is a single family home, 1600 square feet. If somebody had to buy that home and pay the property tax and the insurance, all that sort of stuff, a normal person would be looking at probably $4,000 a month to be able to afford that space. Okay? Now, I rented out for $2,700, right? 2,700. So there’s still a lot of room to grow that rent from 2,700 a month to $4,000, right? So I think those rents are gonna continue to go up. There’s plenty of room before, you know, the renters say, no, I, I’d rather buy right now. It’s more affordable for them to rent than it is to buy. Mm-Hmm. <affirmative>. And so until those price, those rental prices get closer to $4,000 in today’s dollars, I think the rental market’s gonna continue to be strong in the long term here. So that’s, that’s why we’re, we’re still very bullish on, on rentals.
I think a lot of listeners are curious if they even know about it, hear about it, the whole concept of rent controls. You know, like there’s mixed feelings about that depending on what side of the fence you sit on. I mean, if you’re you know, if you’re renting or you’re a tenant, sounds good. And you know, it’s a political football, and I, I don’t want to get, you know, deep into politics or anything like that, you know, it’s, it’s an unbiased show, but you can say whatever you want. You know, you’re, you’re my guest. What are your thoughts about rent controls? Good, bad? I mean, is is it helping? Is it hurting? You know, you can almost read anything you want about it, supporting it or against it, but what are your thoughts about rent control, good, bad, you know, is it a, a trend that’s gonna continue?
So I do think it is a trend that’s gonna continue. More and more cities, towns, states are putting some form in place. So I think if you’re an investor, I think you need to spend some time researching the topic, understanding where your city, town, state stands in terms of rent control, maybe what some sister towns and cities are doing, right? Because it gets legs once it’s in one city, it can jump to another. So I think as an investor, you have to have a certain amount of some research time into that for your own sake, because I think it is gonna continue, people are gonna continue to have this need for, for housing, right? And the politicians are gonna step forward. A couple of things that we’re doing to protect ourselves is, one, we’re staying away from GSA loans government sponsored agencies, right?
Freddie Mac, Fannie Mae, things like that. Because what we’re concerned about is if you have a GSA loan, because you have one of those, they may be able to enforce a certain type of rent control on you if you have that type of loan. ’cause At the end of the day, they own the mortgage, they own the note, they own the, the home, right? So we’re staying away from that. We’re just dealing with other types of lenders or investor money. So that’s one thing we’re doing. Another thing we’re doing is, you know, which is unfortunate, is we are staying away from like the section eight programs, because that’s another way where they can enforce rent control is, you know, hey, a two bedroom, we can get 1800 for a two bedroom today. But if they say, oh, when you flip that unit, the most you can get is, you know, 1825.
Yet, if I remodel it, I know I can probably get 2000. And they’re saying, no, no, for section eight, the best you’re gonna get is 1825. And so they’re really cut me off at, at the kneecaps here, in terms of being able to increase my rent if I stay with section eight. You know, so it’s maybe not necessarily happening today, but if you have a tenant in one of your units that is section eight. And historically we used to be able to go to Section eight and say, Hey, we want to increase the rent XML in the future. They may not be so kind to those increases. So that’s why we’re unfortunately starting to stay away from section eight. And so you ask, is it a good thing, is it a bad thing? I mean, this is my business. I see it as a bad thing.
We who are invested in real estate, we’re capitalists, right? We want to improve the property to be able to increase our rents. And if they don’t allow us to increase our rents, what’s gonna be our, our motivation to renovate a property to, you know to beautify either the surroundings, right, to help the neighborhood, right? We, we’ve done some great things to some properties that the neighbors come out and they’re like, this is great. You really helped my property value go up because you’ve really beautified the neighborhood by taking care of the exterior. Yeah, we do that, but if we have rent control, I’m gonna be less apt to do those sort of things with rent control. The whole experience as a renter is just gonna get worse. Everything from just the quality of the property to the quality of management of the property will probably come down.
So I don’t think rent control is the answer. I think going back to these, you know, cities and towns allowed them to have more flexibility. They need to take it upon themselves to have more flexibility to change zoning requirements. I have properties with acres of land that they won’t let me build any more housing on because they already say I exceed density requirements. I’m like, well then change the law. I want to be, even if you say, okay, Tony, you can build places, but it needs to be for low income housing, or it needs to be workforce housing, or however they want to define it, okay, let’s have some, some negotiation here. Right now. There’s none. There’s no, you can’t do it. And I think that’s really where it needs to change is at the city and town level with the planning boards to have more flexibility with land use codes, density requirements, things like that. Right.
So maybe a couple more questions as we wrap up. Let’s kind of like talk about some actionable type stuff that investors can take away and, and utilize. You know, a lot of your book talks about the freedoms that are at risk, or the freedoms that are being taken away. And constraints can even call ’em obstacles and roadblocks. And as investors, I think it’s important that we identify and overcome those whatever’s thrown our way. I mean, that’s what we do as investors, and that’s especially what we do as entrepreneurs. You know, we’re constantly being thrown, challenges, obstacles, roadblocks, and it’s like a problem that needs to be solved every day or every week or every month. So as investors, we need to be able to identify that and, you know, ’cause it can impact our personal financial freedoms. What would you, I mean, this is a whole topic. It could be an entire podcast episode, but what kind of steps, actionable steps would you provide, advise, share, if you will, for us to be able to identify and overcome that stuff?
Yeah, so a again, I think it comes down to how an individual defines freedom. I’ll take a tangent here and we’ll maybe talk a little bit about the Airbnb market for maybe some viewers who are interested in that, right? You know, I look at Europe, I enjoy going to Portugal, I enjoy going to Spain. I enjoy, you know, the food and the architecture and all of that. But when I look at those places, I see also what they’re doing with their, let’s call it Airbnb market or short term rental market out there. They are no longer approving licenses for short, short-term rentals because they have such an affordability issue out there. And so, you know, I just extrapolate that, and I look at this country here, and I say it’s gonna continue to get worse in terms of affordability.
So if you are a first time investor, or maybe looking to have some more freedom in your life to be able to say, Hey, I want to go to Florida, you know, a month out of the year wouldn’t it be great if I had an Airbnb down there so I could go down there and enjoy it for a month and just have a better quality of life as an individual, more freedom to spend my time in one month in, in Florida, and maybe go back home to Ohio or wherever somebody may live, right? I look at these trends, you know, worldwide, Portugal, Spain, where they’re going with their short-term rentals. And I look at it in here and I say, we have such an opportunity still here in this country to go off and buy properties that are, we gotta make sure that they cash flow, right?
That’s priority number one. But if you can buy an Airbnb today, be able to get that license and be able to cash flow, don’t wait. Do it today before the rules, before the things change that don’t allow you to do it. Right? You know, there’s been things like, we also talk about the 10 31 exchange. Every time that comes up for a discussion, I don’t think it’s gonna get approved in terms of taking away that 10 31 exchange folks that aren’t familiar with that process. When you sell a property, you can then take those proceeds and purchase another property without paying taxes on the profit that you made, right? On the, on the original property, right? So there’s an exchange that you can do that eliminates the need for you to pay taxes on that capital gain, which is great. That’s called a 10 31 exchange. And so every time that comes up in front of Congress, it’s kind of like, if that goes away, that’s gonna be a, an inflection point where we look back and we say, wow, those were the good old days where we could actually exchange properties, not pay taxes, and be able to get into a better property, right?
So if you have a property today, and you’re looking to get into either a better class of property or a bigger property or a commercial property, you know, leverage the 10 31 exchange, I don’t think it’s gonna go away, but you never know. Or it may change, it may change where you do end up paying some capital gains on those on that profit, right? Right. Look at these things that may change and say, we have such an opportunity today. You know, whether it be with Airbnb licenses, you can pretty much get those, if it’s owned properly, you, you can get those, you know, pull the trigger on something like that. If, if that’s the type of investor you, you are. And that’s the type of freedom you want to create for yourself or for the future of mobility, vacationing, golfing, whatever you like to do, right?
And then the 10 31 exchange is, is another thing I share with folks. You know, don’t get stuck. Don’t get, you know, married to your properties and never exchanged them for a better property or a bigger property, a better cash flowing property. I took one property, this is amazing. I took one property that was cash flowing, just a thousand dollars a month, and I exchanged it for a property that was cash flowing, $7,000 a month. It was amazing. I tell that story and it’s like, you know, I really want to encourage folks not to forget about those things that exist. Now, if you are a person who, you know, again, there’s so many different opportunities. You can have a rural property in Central America and put up a cell tower in your backyard Yeah. And be able to rent that tower space to T-Mobile to Verizon, to different companies, right?
You can generate anywhere from 1200 to $4,000 worth of cashflow from having a tower in your backyard, right? Just a tower, right? <Laugh> you know, I’m looking at RVs right now, and you’ll say, Tony, what the heck? You’re, you’re looking at RVs, this is crazy. But, you know, the RV industry during COVID, everybody was hopped up on something to go buy an rv. You know what? Now hotels are back opened up, the flights are now available. People aren’t using their RVs as much. The RV market has crashed <laugh>. So you can pick up like over a hundred thousand dollars RV for like 36 k. Wow. That’s like money all day long. So I’m thinking about like, maybe I’ll start an RV park, right? I’ll just go buy these RVs for like 30 cents on the dollar and start an RV park for, for folks, right? So you have to get creative these days.
But those are some things I’m looking at. If you’re, if you’re more of a, like a sophisticated investor with spoken about, you know, I know you deal with folks, I deal with folks who have like millions of dollars they want to invest. You know what, you know, you really have to be in integrated at that level with folks who study the market, who understand the macro space, who understand demographics, who understand migration patterns, right? I mean, we’re down in Florida because yeah, 1200 people a day are moving into Florida, right? They need a place to live. There’s not enough homes. They’re not gonna go live under a bridge <laugh>, chances are they’re gonna be renters. Yeah. So 1200 a day, that’s why we’re in Florida. And so we’re, we’re gonna continue to buy there. But yeah, if you’re more of that sophisticated investor you want to team up with, with others who are really looking at data to be able to help you invest in the proper places.
Okay. So just let’s wrap up with this question here. How you talk about different ways to essentially supercharge your path to freedom in your book, you know, goes from, you know, discipline to leverage human synergy, is what you refer to it as scalability, rig risk assessment, and then, you know, just strategies and probabilities. What would you say is right now here today, the best way for an investor to supercharge their path to freedom? You don’t need to talk about all of it, but if you were to focus on one specifically today to start with, where should you put your time, energy, and mental capacity?
Without a doubt, it’s discipline. Okay. Without a doubt. If you don’t have the discipline to say, Hey, I’m gonna go buy a book and go do it. Yeah. Right? It’s so easy to do that these days with, with a cell phone and Amazon and Right. So easy to do it, right? If you don’t have that discipline, chances are things just fall apart. If you don’t have that discipline to say, I’m gonna call three investors a day. Right? You just don’t have the momentum, right? If you don’t have that discipline to say, I’m gonna go to one event a month to be able to network with people, right? To be able to grow my network, grow my education, grow my sphere of influence, just if you don’t have that discipline, things kind of fall apart. So that’s the big thing for me, is staying disciplined in a lot of different ways.
For me, it’s, it’s exercise. I need to, you know, continually motivate myself to be disciplined, to say, okay, every day I’m gonna get out there. I’m gonna exercise, I’m gonna do something to have better health. ’cause I can have all this freedom, but if my health is poor, then that impacts my freedom. So I, I need to take care of my health. And with that comes discipline. So I need folks to really think about that and say, if they want to do better, if they want to do different, where have they been less disciplined than they should have been and make some changes there.
Yeah. I guess that sounds like common sense <laugh>.
It, it does. But <laugh>, I’ll be honest, I mean, I do have trouble sometimes with that discipline, but what I do is I take a look and say, why am I not disciplined on some of those things? Like, for example, I say, I’m not really a capital raiser. I don’t like to raise money. It’s just kind of like not what I, I do. I like talking about the asset and doing all that stuff. So if I’m not disciplined to raise capital in my business, then I need to go find somebody who is right. So I can’t procrastinate on that. And if I am procrastinating, I need to ask why. Yeah. Am I procrastinating and go fix that problem? If I’m procrastinating because I don’t want to go do my workout, I need to fix that, maybe I gotta get a personal trainer to kick me in the butt to say, okay, or maybe now I’m paying for it, right? Maybe I’m now paying, you know, a hundred dollars a month to be able to have a personal trainer. Now I feel obligated because I’m actually writing a check to have a personal trainer. I feel obligated that I need to use this service. I need to get out of bed. I need to exercise. Yeah. If you’re not being disciplined, you really need to assess why. And if it’s because of procrastination for, because of some, some reason, you gotta look at why you procrastinating. Yeah. And go get hope there.
Yeah. It’s a good question. A question I think everybody needs to ask themselves at some point in time. No one’s perfect. We all procrastinate and we lack discipline at some things. Some, some of the time, maybe all the time. Tony, this has been great. Before you give out, you know, your information as far as how people can find you or follow you, just gonna ask you, you know, is there a final comment or takeaway you wanna leave us with?
My big thing is I always want folks to take action. So hopefully we’ve, we’ve provided your listeners here. Yeah, tons of value. That’s our goal, is value. They don’t come here to listen to my weird Boston accent. I don’t think they do. So hopefully they get a ton of action, a ton of value out of this, and then take some action, right? Please, Marco and I, we don’t derive an income from doing these podcasts. We do ’em for you. We really want to help people. We both serve our communities. We want to help. And so please, you know, if there’s some good nuggets in here, go find some action to take on those and create more freedom. Create more income for yourself, more wealth, more goodness for you and your family. More abundance of everything. That’s what we want for the audience. Cool.
Tony, I appreciate you coming on. This has been great. Tell our listeners how they can follow you and get more information.
Well, the best thing they can do is go to my website, dirtybootscapital.com. They can see all that I do there, dirtybootscapital.com. If they have a question for me or they just want to touch base or, or learn more about something or other, there’s a place there where they can get a a free session with me, a free meeting. Just schedule it there if they want. Send me an email with a question or a comment, feel free. My email address is Tony Lopes with an S-L-O-P-E-S, tonylopes@dirtybootscapital.com.
Cool. That’s awesome. Tony, I appreciate you taking the time today. This has been great. Thank you. Great book. I am looking forward to finishing it. I started and I haven’t finished it yet, but it’s it’s been good. So thanks for coming on.
Thank you, Marco. This was a pleasure. Appreciate it.
That is it for today. Thank you for listening. Download our free report, The Ultimate Guide to Passive Real Estate Investing available on our website at noradarealestate.com. If you’re interested in real estate investing and expanding your portfolio, we’re in about 25 different markets. Just contact an investment counselor here. There’s no cost. Just get a free strategy session and we’ll help you out. And if you have a question for me about real estate investing or finance, just let me know. Shoot me an email or just go to the website at passiverealestateinvesting.com. Click Ask Marco and I can help you out with that. And if you haven’t done so already, remember to subscribe. Takes you three seconds. Click that button and that way you never miss an episode. That is it for today. Thank you for listening, and we will see you all on our next episode.
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