« The Cardone Zone

080: How Detroit Went Bankrupt

2013-07-19 | 🔗
This is an unofficial transcript meant for reference. Accuracy is not guaranteed.
Hey there, this grand car down you're in the car down some welcome and I'm here tonight to talk to you about your business. Your finance is your money and folks, if you don't pay, tension or what I'm telling you you will pay a price as severe is the price Detroit is paying going bankrupt this weekend, Detroit Great City, one of the greatest cities, in the United States, just the United States, but in the world sixty years ago, Detroit was known worldwide but from all over the world came to visit the great city of Detroit, and today this week, Detroit filed for bankruptcy and here's, the bad news, same thing- can and will happen to you. If you don't pay attention to what is happening to Detroit, what did they do? What mistakes do they make? How long if they known this would happen folks. This is happening in Greece right now. It's happening in Spain. I say that is happening in California. Due to debt
aft overspending, tremendous amount of denial- and I know a lot about denial I'll about that. A second people owing to others and people lying to themselves. People living within their means and people Americans, people in Detroit, California, Spain and Greece, people unwilling to take the tough actions that actually broke the back of deep right. That's what I want to talk to you about tonight. How do you avoid that? I don't really want all about how to fix Detroit. I want to talk about what you have to know what I have to do in order that this does not happen to me and you, and I could see about you right now, because I see many of you right now falling into somebody same things, thinking, actions and denials that is taking place in Detroit, So let us look at what happened in Detroit Great City, one of the world's greatest cities, all the motive was there for years. Products
came there? We built man factual around it. Today, Detroit is broke and what broken right, because what they're saying what you read in the media is many say the Detroit is just dealing with forces beyond its control now I remember when I was only three years old and I had this unbelievably terrible drug addiction. There was going to kill me. I actually started saying I was dealing with force. Beyond my control, and I started surrounding myself with people in treatment centres and an enablers that also supported this idea that I was dealing with forces beyond my control. That's what they're saying about Detroit tonight folks to Detroit is not dealing with forces beyond his control. When an individual accounting, a city, a country, a family of a business, goes bankrupt, it was deal
with forces that it refused to control and then later says a we were dealing with forces beyond our control, because that's what everybody says when it's too late, that's what everybody! says when the spinal cord is finally broken here. Here's what broke Detroit inheres will break you, your city, your town of your company, if you know the sands, you can avoid them. If you know what to look for you'll, know the potholes to mix miss, and that's one talk about Detroit today. is grant car in the car down. So we fix your money, your finances. I want to show you the up the road post, what to avoid here's. What broke Detroit politicians unwilling to do tough thinks. Look if live in a city, a county, a state or a country where the politicians are unwilling to make the tough calls understood. And the sooner or later you will pay a price just like the people in Detroit or paying today
and just like each American will play going down the line. If we don't stand up and do something different, unlike what Detroit did, they did nothing except complain. also number two refusing to cure sacred cows. Now this is a big big point. Look if you're not want to get rid of the sacred cow, the sacred cow. those things you can't get rid of. You know you don't want to give up that thing. Detour I didn't want to give up some of their sacred cows, like unions and pension funds. They were unwilling to give up the sacred the sacred cow like Ozma, be we can give Oldsmobile, did Ozma Bill was out of favor twenty years ago, took him forever to finally kill the sacred cow. The third thing. When you continue to spend- and you don't have the revenue you're gonna die and that happening again in America. You're doing it all.
Americans are starting to spend more than they make again. Number four depended upon one source of income: the city Detroit became, depended upon automotive. Only here in Orlando, we have many multiple right revenues or sources streams of income. That's what makes Orlando so strong is not just one thing or the other. When you look at, beg us, you see a city that needs to redo itself, because so dependent upon gambling only. Or housing, and then, when housing crumbles, the casinos shut down. You get my point: you dont want depend upon one source of income in this. This relates to you not me making changes quickly enough when you're not but to make changes and shift quickly enough. You will suffer and then not facing reality. Detroit didn't face reality. What happened? Adroit Sanborn Bernardino in California, Stockton, California? These are also cities and counties did it filed for bankruptcy and more will follow
see. One year ago I saw the Detroit issue here. Being in LOS Angeles, where I lived, I'm just about ten or twelve years early. maybe only seven years early. We see when I saw it. This is what I did. I made it list of sacred cows. I made a list things that are sacred to me, that, unlike I can't get rid of that, that is too important to me: The reason I wanna make a list of the sacred cows is because the sacred cows, as they are called, or always tied to a most since and is emotions that were most often bankrupt you and your family friends. my home, where I lived Ella Delano riches House on a heel overlooking all of Hollywood all the way from downtown to the ocean.
emotionally connected to this place? I loved it. My identity was wrapped up in this house. I was married there we had babies there, we had our family there, we had friends there. Look we didn't just party there, everybody all our friends knew hey. The cartoons house was a place to party. My dignity was hooked up into this house, the weather in California. I've been addicted to the weather in California. For twenty years? Love and thinking I couldn't go some other place. I was comfortable, which is also a sacred cow that people hold onto these three sacred. House. For me home this is my house, the weather and maybe a comfortable or acts. The things that were getting me stuck. emotionally connected, not rationally connected. Look it's you get emotional in business in finance, is that you get sunk. cities, counties, unions, manufacturers, the big three
Entire industries countries can go under because people get a mostly connected to their social or to their sacred cows. Ok, motions costs money, they seek family cities and counties. Okay. So what are your sacred cows. What are your sacred cows? What are you scared to give up because, if you are not willing to give up the things Detroit gave up, if your city, your county, your state, if your country is unwilling to make the hard calls that the tough calls you you two we'll go broke, so everyone news. Ninety six five here now. Lando and me work on your finance? Is your business give you, the information you need, so that what is happening to mass numbers of people in the middle class does not happen. You. Let me give you my dear sir, what I think most people have a sacred cows. I hear this
People constantly that I work with grand weak move. I know we need to move rambled. We can't move because the kids they, if they're going to school here, and you know I can't separate Billy from his France. Listen listen to the insanity of this house, The wife I know would make sense. I know it seems to make sense emotionally. Okay, separate my little girl Sabrina from her other little three year old friends or her thirteen year old friends or her twenty year old friends books. If you go bankrupt, you're going to separate your kids from their friend, ok, I can't leave the house is another excuse. People use I know don't seem like an excuse when you're using it I've lived in this house. My whole life is that rational or emotional see what I'm saying those active.
You want to look at the parents, my parents leaf live here. We can't leave the parents. These are the things that key people fixated number four. We ve lived here, our whole life. All my friends are here. I went to school here my lunch year on having a birthday party in three months. A number five I can't imagine starting over I can't imagine starting out over okay, now folks consider this in nineteen. Seventy three because Bankrupt Detroit didn't go bankrupt this weekend, the oil embargo in nineteen. Seventy three hit the United States of America. If you want to laugh, then you don't remember oil gasoline pops doubled, we were rash and you
stood in land to get gasoline for your car. This country was built, was literary producing and Allah. Detroit was producing gas guzzling machines. This Detroit was not willing to make the changes at that time. That was forty years ago. Was not willing to make the changes quick enough fast enough to build different products? Why? Because they were committed to sacred cows. In this case it was big machines. Eight cylinder, heavy, four thousand five thousand pounds machines it burnt too much gas and oil. Then then, over the last twenty years the big three remove inanity trite and what did the people that they wanted to do now? Oh they'll come back they're, not gonna, move the big three quietly and slowly moved out, but in the big three have survived the people and
try have not survived. You feel bad about Detroit. You feel like oh, my gosh Nathan, boot boundaries on the phone with me and the business editor at Detroit Free Press not think Nathan's. Gonna tell me that Detroit saw this common a long time ago. Nathan talk to me yeah, you know it's great it beyond the show grant in you're right at the city has seen the financial monsoon coming for many years, and certainly you can make the case that the city has been functionally bankrupt per probably up to a decade. That is what the Detroit emergency manager Kevin, or has said that the city cannot pay its bills and has not been able to pay its bills for years. However, the city pulled a lot of unusual borrowing techniques over the last decade. To essentially kick the can down the road, they basically
borrow to pay the credit card. You know in that doesn't work, and that's if I finally, this is the moment of truth in the city- is finally stepping forward and dealing with its financial circumstances, primarily because the governor Rick Snyder appointed an emergency manager, Kevyn ORR, who is responsible for the city's future now, and he is says that bankruptcy is the way out of this mess so Nathan. Let me answer because I really don't Seattle feel sorry for details I don't know. If you do, I know you live there and I know it's already local. Do that I M glad. I think that people, you know
I think that a lot of people do feel bad for Detroit. I think they see. This is a sad day, but I dont think that the people of the Troika are that you know flustered by this. I think that we are used to a blemish were used to you no scars, and so this is yet another one of those, but I think he will do viewed as an opportunity for a fresh start and in fact there is an opportunity to position the city for success not the guinea. One believes that the city's financial that you know be fiction overnight, but I do think that people believe that this could position the city to finally on the right track, your enemy ass- you do do you agree with some of these ideas is not giving up on some of these sacred cows, as is their called, is part of the demise of the city. I think you're right the figure couch be let be litigated
Obviously, in this bankruptcy too, so I heard what you are talking about. There are many in our sacred cows. I think you're there is. Are the pension payments Nathan till I got? I gotta gonna cut. I gotta you. Can you stay with me? I want neighbouring like the brake, cutting a once at this great Cardono Cardoso NEWS, ninety six by we're talking about their bankruptcy in Detroit and what you have to do to avoid doing that to yourself Frank, Cardon, Cardona Zone NEWS. Ninety six five or talk about Detroit, the bankruptcy this week in one of the greatest cities on this planet. It's now official it will fail, it will be restructured under bankruptcy. I'm telling you folks, if you do not pay attention to what is happening to cities, governments, countries around the world, this key, and an will happen to you. Make a list of the sacred cows make a list of the excuses you have and don't do
Nathan just told me on the phone there, just using new debt to handle old old debt name what what are some other mistakes. They made that american households can learn from why I think that they did not pay attention to their legacy costs in the pension costs in the healthcare costs that really racked up over the last several decades and, like you said earlier, no one really dealt with the issue until it was too late, and so now there's going to be very difficult. Decisions made in bankruptcy and people who have been relying on pension payments will probably have some of those payments reduced in some of the retired healthcare could go away. So you know this is difficult, and but now the decisions are being made, and I think that's the Good NEWS that someone finally going to deal with these issues and the issues that have not been dealt with for years Nathan. Thank you so much business editor Detroit Free Press is telling you folks look. You got a deal with the hard stuff. Detroit did not do that. It wasn't popular talk about unions and pension funds,
and overpaying here's a city this been over spending for years and I am concerned and you're starting to do the same thing again, I'm concerned that you're, starting to use dad again that you gave up on in two thousand We found out it was the wrong thing to do. Look we go the way of France and Spain and Portugal and Cyprus weak go there and you're going to look back and say? Oh my gosh man, the warning, but that the signs were on the wall. They were all over the place they're everywhere. People don't want to give up their goodies there by cars again they're buying houses. I don't want to give up my credit card, there's a line and Starbucks today.
There's a line: that's going to be twenty five people in this line, buying four dollars coffee and I'm like half these people. I know half these people can't afford it. The lady in front of me ask for money that was put on her card yesterday back on another credit card, because cuz she's not paying attention- and this happened to me- it's happened to me in my life- no broke her. I end up with a drug problem. I end up with the wrong people cause I'm denying the obvious here's what I want you to do, and make a list of your sacred cows. What things so sacred to you, you are not willing to get rid of them, though things that you emotionally connected to. Maybe it's your house, the school system or or a brother that that is causing you problems, but there's emotional connection But you can't I want you to make a list of those things you can imagine getting rid of number two, make a list of all the excuses you have for spending for not taking money. Anything did
binding. You excuses, you use, costly. I don't have time. I can't work this hard, the kids whatever and the third thing. I want you to make a list of actions that you know that you know you must make right now for your financial survival. Look if you can't do those three or not what better? Yet once you do. Those three call me and I'll coach you through it on what actions you need to take to get unstuck. Joy, Booker's, joy, Booker, Thornton, entrepreneur, Indy Troy is Belize in Detroit is hanging in there with each right now. I think I'm going to like some of the things she's going to say about that joy. Are you with me? Don't have to tell you, don't have a choice? Okay, so there are some opportunities, I believe in Detroit. In fact, I'm going to be looking at multifamily real estate here in the next quarter in Detroit, because I believe, first of all, the cities not going to go away, even though it's bankrupt there will be opportunities for there, because people are.
Next people do not like to leave two million people used to live in the city, Detroit we're down to seven hundred thousand people there, you're, probably down to the people there are like I'm not leaving. Now I've been through the worst years. ain't going any place now, and those people will continue to be hamburgers and need a place to live. There's opportunity still there for people that are nimble for people they can think and for people that aren't stock. How do you get unstuck? Make a list of your sacred cows, the things you're scared to get rid of your credit card, maybe at visa card or that American Express Carter or the Mastercard. You love the Macy's card. Number two make a list of excuses. You use three. What action do you need to take for your financial services? Grant car down near the car down so stay with me news? Ninety six, five. hang in there with me, because I wanna talk to you about buying a house right now why you should not buy a house and how it is one of your sacred cows. It is,
your excuses, and it will drown you in debt. hey, Grandcourt down here in the car down zone every week news. Ninety six bob we talk to you about your finance. Is your business, your money, the Detroit is going bust, did busted broke? Can you go broke? Yes, you can you know I went to college a gun and accounting agree. There was not one course on how to go bust at how to go broke and they also have that school because of you, what the sands or, if you know what cities and counties and states and governments in countries due to go broke, then you would we know what to avoid doing and one of the things that did use in businesses. I look at other people in my space or sector that may be haven't done well, there were on top of their game at one time Some mentors not actually that that into going broken, am I gonna want to do that, and you know what those people did had some things in common, the Detroit has in common Detroit Overspent didn't take care of a sacred cows. It was
too slow to move. It was fixed in one place, Used to bring in more money than its spirit and it refused to change when it needed to, and I've seen some mentors do, that they didn't have enough flows, him income, they didn't, have multiple flows of income. I know this genius brilliant business man that I grew up with a twenty nine years old. He was a great mentor. Man refused to mention his name, because the outcomes not good, he didn't have multiple flows of income. He didn't grow a business. It was not dependent upon him any Overspent. What he made any else at a gambler problem, so hey Joy book,
in the boat, with joy, bitter thorns in Detroit, and she believes in Detroit she's, not previously in their tell me about the opportunities for an auto promoted for joy, while the opportunities for these trade are not really that high, I'm not because of time in other areas are keen for that, for issues is. Why was the mind that the resources are there but their hidden? I think everything that deals with a treaty is really mind over matter in my own personal Andrews experiences, because I have had the opportunity to experience both sides, the corporate Amerika side and the urban demographics. I sell anything just going. Forty, in my opinion regarding this is speak from my own experience, and things are better because you know when it comes to the demise of the city of destroyed their children types of perspective there
market, of course, which are much familiar with, and then there is that the non are urban part which I am not familiar with just by experience lies, but just by more about your vacation. So what is your business joint amendments as a feature? Productions is dead for creating the way out and we specializes liberty booking anything concept. Development. An angle in purpose is to help lack combat businesses through celebrity events, so
not just in doing the moment. I think a lot of people may not have the resources to in upper get advertisements are things that source, so what we do is create opportunities for them to write the wave along with the celebrities, and my marketing strategy is to generate between sixty and a hundred thousand dollars per head till then something I'm three years into it is getting going, but that really I'm the ground would have been able to cover. Has this been than our true blessing sow zooms movement? Who do will so? Would you would you the problem for the city, in particular the people? Twenty is sitting on a plain and simple. Its selfishness in a lot of people are really concerned about their styles and so therefore, everything after round them around them. To get out of that, when you
you know, I can't drop means with health. Incriminated fell but if you know a lot of the landmarks in the city retorted I'm at the Box Theatre America park- in other words people at these Angelo Arena Court in other end by a group of people down. Will you keep everything just kind of segregated in this perspective in his own way. Of course, you know your bid is unable to take care of your own family fires, which is understandable, but when you have a massive group of people that are supporting your business, I think is only fair that you give back to the entire sector or be productive entire factor, though I think, even with the city council, you know to be true: the sedately tradesmen run by black for quite a long time. I want to confirm our urban market because her cylinder
Of course. We know the whole back and it will be ruined. Joint is being run run down once again, it is empowering you know when you get up and look at them and how the in order to understand the action, but he had so many black people may have man never had our or any type of leverage, in early school, put on a new suit, and now they are able to speak the language and yeah. That's a black thing, though, because I see I see people. its people think he's gonna do with higher, because people in Greece are doing to people in Spain. I know California is gonna go bust. I know for sure that people in California will bus at stake, because they, this to me, is not about even education or race any that it's about people denying the obvious signs which is I can say no to my unions because they vote for me. I can say no to pensions because good for me, but the pigeon is heard
The pension is no good for anybody if they can't pay the pension out, you're, you're, totally correct and, like I said because it affects the refinancing of the race card, is because it affects us differently. The action. Ok, where you know, if you have one occasion instead, does that you nothing still find a way to find out from the US to become a float. If it happens in the african american community, that was your one. I'm your one shot. You do not come from that Europe that get help, so it has while hardship in the black humanity than a dozen different. I love her community meeting. Because we are doing on ten bankruptcies bankruptcy and it doesn't have a call, it's all painful for why, because I know a lot of people that have gone through that, and it tells you up for years it's can be very painful for Detroit. Finally, their valley maybe come into some reality. The situation there still hanging onto their millions of dollars with art, and I want to give that a joint. Thank you. So much
for joining the show preceded. I wish you a great entrepreneurship and success with with your business, I think I can listen to what joyous and listen to what I'm saying. Ok, cause I'm a tat something when it comes to finances when it comes to run and out of money when it comes to spending more money than yeah the color yours and your religion will not matter. Ok, you're a small matter, your weight won't matter. Look when you can't pay your bills. Okay, you will get cry. when you live beyond your means, you will get crushed right. You're being encouraged only four years, five years since the great recession you're being encouraged every day. The media, tremendous amounts of input for you to go by house Federal Reserve chairman been Bernanke, is testimony to Congress on Wednesday. He says the FED really really really really what's the hurry,
seeing rousing rather housing rally to continue. Of course, he wants to continue. If housing rallies, it will pull the account Let me up with it and it will seek you in the process. Looked, The economy has done, which has tripled. We ve tripled the amount of currency. The did America produces with tripling the amount of services that we deliver during Bernay keys, testimony most financial services Bernanke. He mentioned the fund, Charles conditions have tightened recently. Really what would change brought nothing changes three weeks, my man, I don't, be a genius. I don't have to be part of Congress or Senate to know that nothing changed the FED funds rate close to zero. Ok, that that means
Basically, the banks basically borrow money at zero and rent it out, and they don't want to rent that money out of a can, you imagine having a car and you rent a car out, you have no cost in the car or you have a bedroom at your house and you rent it out, but you have no cost. That's pure money, pure profit. Why are they doing that? Because the economy is bad, but you're not telling you that they're telling you go, buy a house go, buy, a car go, buy, furniture, everything's going to be fine? This is exactly what got us into trouble. This is exactly what sank Detroit last. week. Thirty year mortgages sword from three point: three, five to four point: five: one because the FED is easing and because it feds easing they might quit. Printing all this money, supposedly so rates winner And it's terrifying Americans about refinancing the increase in rates when a rate goes up from three point: three: five to four point: five, one on two hundred thousand that cause you that's what
going to tell you that's what the banks are going to tell you that's what the mortgage companies until you know, the rates are going to go up. One hundred and thirty dollars You need to refinance now you need to buy a house now the pit to get a house is all in man, they're, spin and billions to talk you in TAT House from men. This amount of pressure go by. A house and your wife is gonna, go for it. She's gonna, tell you low interest rates, the lowest ever in their moving up price. You're goin up these headlands you're here your hearing, things like this there's new housing demand. I saw it yesterday in USA, today, new housing demand when rates are low. More pity, show buyers the market creating a demand for new housing. That's not will create. Demand for new housing. And for new housing, as I need a house we're out of houses, a new car dismissing the Joneses come to town and there's no houses there? That's new demand low rates. Not new demand.
So you're being spun off your being sold. This is bs new bars. In the market and then you have a need just because right go down or because investors come in a good start by properties up, does not create your need. I don't own home. I tell you every week here not by house a house is like, Most people for ninety percent of the people, except for the very rich, ass is just is not dream it's a nightmare. It's something around your neck forever. You don't ever even get to own the house. Even a paid off house. You don't own because you have to pay property taxes on that house. See while housing is great for the economy housing, is one of the sacred cows I talked about for Detroit, it's a sacred cow, They have all we gotta have a place to live, Mommy tells Papa,
We gotta have a place to live. We must have a place to live windows on come with me, she's a real turkey's gonna, probably tell me, I'm an idiot what you think: Wendy Iron or elsewhere. Everybody to buy a home. If you can afford a home on a blind, I was a real or, I would say the same exacting and I would have a presentation that is so killer. That would there would a bow, you an opportunity, but would agree with me that the most people don't actually need to bow. I want declares that could have been our markets in the late Norman Market, which is nor to Charlotte. We have low opportunity for rental, so if you're talking ranking version buying, you in my opinion are better off to buy and we do have a demand. A couple months or a couple years ago we had about forty five months of inventory, enforce absorption rate here at, like Norman
We are down if you buy an hundred three thousand and where down to about form but windy, most of that most of almost ten percent of all the home, so less in the first quarter, were bought by investors at this year I own Rennell Property and Charlotte North Carolina. Three hundred sixty units Erica And what you're saying right now is: what do you know? I was just tell everybody: ok, nobody gets rich in a house. Nobody gets rich Rittenhouse every that I know this collected. Rennell property has gotten rich a lot of people that own homes they don't get rich. I don't know anybody that that has collected rental, real estate, multi family apartment elements that has not gone so for my listeners. Just so. You know that the people there, listen to this show are entrepreneurs, business people and they want to get rich, and I'm just telling you folks, you ain't you're not going to get rich in a house, even though you know
place to live and Wendy said: hey, there's a big demand for rental. Is that right, Wendy in your market barriers? Yes, actually, I'm probably apparent at my fires- are here: were investors brand the seats so so sheet? Windows? Tellin, you look. Maybe what Wendy's Tolmaeus, though the real opportunity here is to buy something Dubai House, sit up and run. It will have Kennedy in our market. For that. So let me ass. If I was going to do one thing, I can't do both casino have the money. Would you tell me by house and live in it or by house and read it to someone else live in one area, one we can read too. I can I can. I want to read it out and I could go rent an apartment somewhere and free my money up to work. It. I get for making money. You know a definite make sense about one and ran out
because I make money like in our market. Beseech you have, you know how they went over the and taken up in a lot of people are still suffering with get their credit airport. There having to rent really yet now, would you say it's easier to get alone on something I'm on a vine ran out whereby live in no easier to get along. I think on one you're gonna live in what most of my investors have been cash buyers, because I suppose cash, whether or not making any money, while it from the bank for their taken, an outline that you now they're gonna run a mile and then, as the market comes back those cells, Wendy? Well, you're you're information is. What would you tell me about Charlotte? Is is absolutely akard about the resident, country. Look this housing supposed housing recovery there were having is being supported by investors and Hype while while when these are real odor, she wants this continue. Folks, I'm Tellin ya. Windy needs to bank all her cash right now,
cause the housing recovery will not continue when we come from brake break my two exactly exactly what to do with your money and how to benefit from the housing recovery and where we're at what to do with flippers agree. car down here your no card down so news. Ninety six, five, Orlando Florida, I'm talking to you about how to avoid a bankruptcy, how to avoid going broke, how to make money! That's where we talk about here every week and I'm Tellin, you folks The real estate community will hate me for saying this. Look if you're gonna buy house, don't do to live in it by house and read it out. I'm telling you every week I come here until you look, keep your money, keep your money free to work I moved I made a move moved out of this unbelievable home and I read why: why do I read because I
Oh, the housing recovery cannot recover itself, it cannot sustain itself, it will not. Last you have a third, a third of America. You probably have half of America a hundred and fifty million people between new millenniums and baby boomers that have no interest in our. A kid fifteen, sixteen seventeen twenty five years, all that whole thirty years. Oh ok, has no interest in the middle class house is a dream. Housing starts Bell: nine percent engine, refinancing drop forty six percent from a year ago. What am I telling you? Look it won't last I'm telling you it's being supported by investors. The lady from Charlotte Joy said to me: I'm sorry, not joy It was a windy. Wendy said to me a third of my buyers: a cash buyers. What do you think that is windy? Those are cash Byron they're not by an homes, do thereby rentals you get it house
the producer racing in the markets right now, they're moving in their buying the first half of this year, nine percent of all single family homes in this country Resold within six months, they were resold. Did this What I suggested to the Obama administration for years ago take the housing stock, there was a problem, bring it to the market, sell it investors only but make sure they have to hold that property for at least three years or they would get a tax penalty said that they would flip all this product back into the marketplace. Only thing has happened now people are buying houses and flipping them back into the market. Here in Florida, Palm Coast Florida, for instance, led the way thirty seven percent the single family home sales were flipped in the first half of this year in Omaha it was thirty two percent more flipped in six months in Daytona Beach, sixteen percent were flipped. In six months
first half of this year, five thousand single family homes in New York were flipped in six months in Jacksonville, two hundred and sixty sent jump in prices, Orlando, seventy five percent Bob. Why upper hers social he's gonna ask me grants. Should I buy house, or should I rent sherry? What your question, I think that's what she can ask me. She is very there how our yeah sorry, we have little we're load technical difficulty there for a second which requested you now. I'm crying decay a lot of talk about rates are getting better? You know, maybe it's time to buy. I've been renting a condo and you know we're paying a pretty fair raid and I'm thinking you know what it if I've got a if I've got a bite of thing, I think it's going to higher amount of UK, and nor is it worth it. How much is your right now, I'm at that point in my life or maybe I need I need to think about buying something on the subject.
But what why why? Why do you need to buy something? You need to buy something here about drawing your money away, you now Ok will throwing your money away, so I mean that's what few, but how is that an investment? Well, I guess he sort of new hope that at the end of that time, you're only at that you're going to have some kind of of profit Yeah, you know- and this is say this is surely one of the sacred cows- that the middle class has been built on its it's one of these ideas that the way to get It should way to create wealth or freedom is by buying a home investing in a for one case. And the truth is what you're doing this, but in both cases you just give your control up. So You pay rent right now. Seventeen seventy five right now one seventy five, and how much is the place that they that they want to sell to you, one cell, three, thirty, five, thirty, so
Here's the deal just simple math! You have to put sixty thousand dollars down to buy it. Maybe thirty thousand you have to put thirty thousand dollars down to buy and your payments on that house. Can it be that thousand a year are about fifteen hundred a month, so it's gonna look Why is it a conduit or house or condo property taxes? Then you're gonna have HIV fees, they can continue to go up and you're gonna be basically the same payment. the same payment that you're at right now but you're out of thirty thousand, and if your employer leaves he moves, he decides to go to another place, you're not going to build to go with him. Your money is tied up in this thing: don't do it if you're going to take the thirty thousand dollars and buy a condo go by somebody else's condo and rent it out into the marketplace. I hope you take my advice. Hope you take my advice here. I'll save you from going bankrupt the way Detroit did this grant Cardone you're in the car now and sound have a great week.
Transcript generated on 2020-12-17.