Navigating Economic Uncertainty: Mastering AI, Market Predictions, and the Future of Real Estate | The Kings Table

[00:00:00] Ashish Nathu: Good afternoon. Good evening, everybody. Welcome back to the King's table podcast. We are back with episode number 15. I am here joined with my friends, Matt Aitchison and Aaron Amuchastegui. Good morning. I think we are missing Matt, Mike today. But we're going to have a really great conversation.

[00:00:20] Ashish Nathu: We're committed to continuing to have this conversation regardless if one of us is missing. So lots of different topics today, guys. Maybe we start out with. Sort of general market CPI numbers came out last week showing that inflation is actually cooling a little bit. We're seeing the stock market just thrive in the last week.

[00:00:42] Ashish Nathu: It's just been hitting records. I think like the market has been adjusting by five or 10 percent in the last week in the positive direction. Just today, Bitcoin is up 5%. WHat's the price of Bitcoin today. Around 37, 000 for Bitcoin, even Ethereum is up about 4%. [00:01:00] So things are moving.

[00:01:02] Ashish Nathu: Jerome Powell announced yesterday that actually what's interesting is he thinks that maybe we haven't done enough and that inflation should still be controlled and we may even have to increase rates again. So could that could also affect real estate prices, the markets and real estate. So get some of that perspective.

[00:01:21] Ashish Nathu: But yeah, I think generally, what are you guys seeing out there? What are you working on? How is this affecting your day to day business decisions? Let's start with that. Besides the fact that your stock portfolios and 401ks have had a nice week or two. Yeah, they have Maddie. You go

[00:01:37] Matty A.: first.

[00:01:38] Matty A.: Yeah. Just talking about having a nice week. If you're invested in the market, this is why I always I'm a believer. You got to just stay invested through the good, the bad, the ugly, stay invested. If anything now is a good time. I think Tom thrown a little bit more money into the market cause I think when they do cut rates that's going to bode really well for the market and everybody [00:02:00] that kind of stayed in a dollar cost average their way through what.

[00:02:03] Matty A.: Felt like a challenging market to lean into. But as of yesterday, we covered this on another show $740 billion in wealth pumped into the market in 1 24 hour span. So it just shows you how quick things can can turn a little bit. But obviously bad news is good news sometimes for the market and good news is bad news, but this case good news on the CPI print.

[00:02:30] Matty A.: And I think PPI came in as well today, which the markets are responding good to. I was, I know, Aaron, you'd mentioned maybe not thinking that the fed was, done raising rates. I'm trying to read between the lines there of, I think. Powell is trying to keep things a little bit steady, and not ramp up and heat up a little bit too quickly again.

[00:02:54] Matty A.: But I think that they're done raising rates, to be honest. I think we'll see another pause. [00:03:00] I think things are going to continue to trend with, unemployment, maybe taking up a little bit, rates, hopefully we'll start to cool down a tiny bit. And I think that, we're going to At least based on futures percentage wise as of this was end of yesterday was that on March, there's a 32.

[00:03:24] Matty A.: 7 percent chance of a cut now and over a 50 percent chance of a cut in May. I think Morgan was the first big shot Morgan Stanley to throw their hat in the ring of they will be cutting rates by June, but I guess That still could mean there could be a cut or I'm sorry, a raise in the interim before they get back to cutting.

[00:03:46] Matty A.: But I'm of the camp that they're going to hold steady here for a little bit and see how things pan out through the, at least end of the year and into Q1.

[00:03:56] Aaron Amuchastegui: It's, I think the most important news is one of our amazing [00:04:00] producers, AJ said how amazing I look on camera today with my jacket. So thank you. Thank you, AJ. Thank you. I had to do it. That's what I'm going to lead with for sure. I'm, words of affirmation. That's my thing, man. Tell me I look good and I'll, and I will bring the heat out here.

[00:04:17] Aaron Amuchastegui: Yeah, the, it's 30 year rate is down a little bit, right? So 30 year mortgage, FHA today says 7.62. mId-October, it was as high as 8.3. 30 year fixed, con, fixed. Conventional, though is still 8.3 today. Down from 8. 7. So down a little bit mortgage wise, but I think what we said on the pod a couple of weeks ago when I was driving maybe a little bit last time is one of the reasons I think the fed is going to not help with rates.

[00:04:48] Aaron Amuchastegui: And why I think they're going to raise them still is if anything, the CPI numbers have showed them they don't need real estate for the economy to go good. And when realists, unfortunately, and I love real [00:05:00] estate, I'm 99 percent in on invested in real estate. That's what I do. That's what my software is.

[00:05:04] Aaron Amuchastegui: That's my investment. So it's not the, so I'm giving the truth, not what the truth that I like, right? What I want to believe is different than what I believe. And what I believe is they're saying we don't need real estate for the economy to be good. And actually when we use real estate as the driver of the economy, there's a lot more chance for things to go wrong.

[00:05:24] Aaron Amuchastegui: When affordability for where people live goes up, they don't like that. That's not good when people are making millions on trading multifamily by raising rents, and things like that. I love that business plan, but people don't like it. And so I think one of the things that the number shows us is essentially just that the idea of.

[00:05:41] Aaron Amuchastegui: Hey, real estate's been getting crushed. Economy's still pretty good. Why would they bail out real estate when the rest of the economy is okay? Because the longer they can have a steady life and inflation is if real estate actually stays down and slow and people aren't, and mortgage brokers aren't making four million bucks a year.[00:06:00]

[00:06:00] Aaron Amuchastegui: aren't making 4 million bucks a year with a high school education. Like it's a, they know that's a problem when it comes to inflation and stuff like that. So that's a part of that. Maybe I'll pull up part of the article. We're, everybody knows we're big fans of the all in pod podcast. And three weeks ago, Chamath said, Hey, I think we're at the bottom.

[00:06:18] Aaron Amuchastegui: When it comes to stocks and things like that, he said, it's time to jump in. And if you had jumped in that day on stocks and Bitcoin, right, you'd be way at Bitcoin up 5 percent today and the, so even just from, so why should you guys listen to podcasts because we actually give our real expectation and we give our real predictions and we don't have a dog and the horse really, we're not actually like selling something.

[00:06:41] Aaron Amuchastegui: So it's really cool to see like when people make calls like that. ScHmoth, and if you would have followed it you'd go, you'd be, you would have done pretty well over that last little while. And the article that I'll pull up really quick of the other side of the fed thing. So that Powell said is as this was after the report came out to Powell says, fed is not confident it [00:07:00] has done enough to bring inflation down.

[00:07:02] Aaron Amuchastegui: So the federal German chairman Jerome Powell said Thursday, he and his fellow policymakers are encouraged by the slowing pace of inflation, but are unsure whether they've done enough to keep the momentum going. The federal open market committee is committed to achieving a stance of monetary policy that is sufficiently restrictive to bring inflation down to 2 percent over time.

[00:07:19] Aaron Amuchastegui: We're not confident we've done that yet. sO that tells me they're going to do it again until they hit two. And, but I also think it backs them where the fact that, the economy is doing pretty darn good, even though real estate is getting freaking crushed. So they're like, who cares about real estate?

[00:07:35] Aaron Amuchastegui: It's a very different monetary policy. I'm a little bit afraid that our next 10 years is going to look like that because I'm gonna have to make some big pivots and stuff. But anyway that's my opener.

[00:07:43] Matty A.: My question is in what way do you think real estate's getting crushed right now?

[00:07:48] Aaron Amuchastegui: We talked about last week, the the commercial and office level of the 50 million building that sold for 30 a square foot, right? When the replacement cost is 500, 000 and no one bought it, [00:08:00] right? No one wants it. The, and there was a hotel that this is the same thing happened. And there was a bidder there that showed up with proof of funds.

[00:08:06] Aaron Amuchastegui: He owns a bunch of hotels and the, and it was cut from 30 million to 14 and a half. And he's no not a good enough deal. And he showed up to buy that hotel. He knew about it. He knew all the stuff owns other hotels and a 50 percent off wasn't good enough to buy. And so I think that's the part of real estate that gets crushed.

[00:08:25] Aaron Amuchastegui: And then housing prices are fine. They're stable. Like they're going to go down a little, they're going to go up a little, but the more part that gets crushed is the service providers, the mortgage brokers, the agents. The software companies, like so many places have helped drive real estate to be big and just with less volume you have so that the consumer is fine.

[00:08:46] Aaron Amuchastegui: And again, I think this is where the fed says it's okay. Yeah. Consumers fine right now. Houses

[00:08:50] Matty A.: aren't affordable. THey are about the economics behind the machine. But I think that with the industry and they're going, [00:09:00] Oh, there's attrition in this area, in that area, in this area, in that area, that's consolidating.

[00:09:03] Matty A.: This is consolidating and our values in our backstop, which is ultimately the values of the asset, right? The other things are all ancillary cogs in the wheel of the machine of real estate. So to me, it says that attrition in their book is not really an intrinsic. Stressor that they're worried about in the overall economics of at least the single family machine.

[00:09:29] Matty A.: And I think obviously commercial is where we're going to see some turbulence and some turmoil and how big of a, a shoe falls on that side is still TBD. But I'm very interested cause we got what an estimated 2. 78 trillion worth of commercial real estate loans will mature by 2027. So that is an insane amount, right?

[00:09:54] Matty A.: And if there's not demand or liquidity, or, [00:10:00] just real I think business activity and those particular verticals of commercial real estate, that's where I think the big TBD is on how much of a ripple effect that has in other areas of the economy. Cause 2. 7 trillion dollars in commercial real estate.

[00:10:17] Matty A.: Having to transact or, retrade or, having to refinance or whatever it may be that's the big, I think, interesting piece to me that will create some great opportunity, but also could create some additional hardship down the road. I'm not worried about single family at all.

[00:10:35] Aaron Amuchastegui: I'd really quick on that.

[00:10:36] Aaron Amuchastegui: And I'd like to see what Ash thinks about all of our stuff. But the yeah, so they're like, okay, so people can't buy new houses. But they can rent them and rents are coming down. So they're actually getting more affordable. So who cares? People have places to live. We had it. We had what some people would say is a two and a half million housing shortage.

[00:10:56] Aaron Amuchastegui: riGht now there's 1. 6 million units under construction of single family, [00:11:00] and there's 2 million units of multifamily under construction. So 12 months, we'll have three and a half million new units on the market. So we'll no longer have a supply shortage in the U S of housing. And yeah, and so I think they see that it's it is like Mike's idea of who cares, why would they change something when they're like, now the other industry, it affects, I think a lot is the car industry.

[00:11:23] Aaron Amuchastegui: The PR, the car purchases cause loans are much higher for cars right now. And the people that it hurts the most are actually people with low credit. I read an article this week about these people in like buying cars with 23 percent interest rates. And the company said they're absolutely crushing it.

[00:11:43] Aaron Amuchastegui: And 35 percent of people get their car repoed that are in the program. But they're like, who cares? They could sell them cars for more than they're worth. They can finance them at 20 something percent. They can repo the car and sell it again. It's just like the old seller financing, selling a [00:12:00] crappy house to somebody that doesn't have any credit.

[00:12:02] Aaron Amuchastegui: And it's happening in the car industry. So I think the other industry that these higher rates might take a little while to hurt is the car industry, but who it really affects is the people buying in the used car industry. I got great credit and I bought my 16 year old a car. Yeah, I have a high interest rate on it.

[00:12:19] Aaron Amuchastegui: The, what I was, but I was like, it was exactly what I was expecting. But it was like, whoa, I don't have, that's my highest rate loan of anything I've ever had. So yeah. Anyway, so Ash, how's that? What do you think about. Cars, houses, or things like that. I

[00:12:33] Ashish Nathu: want to talk about a few things first.

[00:12:35] Ashish Nathu: So I really want, I love how we talked about the 10 year vision. So I'd love to get your guys's perspective about the world of real estate, given what's going on. In 10 years, but let me start out with like industrial businesses, because I want to share what's going on my side. I just came back from New York from a trade show meeting hotel owners and designers [00:13:00] and real estate guys and all in the hotel space travel, entertainment, et cetera.

[00:13:05] Ashish Nathu: The market is so hot right now. It's unbelievable. And. We're doing better than we've ever done. People are not shy of spending money. Definitely prices are higher than they've ever been. So things are moving. And in my Vistage group also, things are pretty much every single business in my Vistage group, all industrial companies in different segments, non real estate.

[00:13:28] Ashish Nathu: Doing better year over year. Most of them are doing better than they were pre COVID. So things are just solid. I was just looking up this this is Amazon's Q3 fiscal 2023. And you can see pretty much every single revenue line item is up at Amazon. So I don't know if you can see that properly.

[00:13:49] Ashish Nathu: Maybe zoom in a little bit, their online store up 7 percent physical stores up 6 percent third party, which means everyone who's selling product online, [00:14:00] making through commissions or fulfillment, shipping products up 20%. The subscriptions for Amazon prime up 14%. So people still have money.

[00:14:10] Ashish Nathu: People are still spending their money. Yes, maybe they're not buying their houses, but they're still day to day spending their money. They're still traveling. They're still ticket prices are higher than they've ever been. They're staying there. It's 1, 500 to fly across country. Yeah. CrEdit.

[00:14:28] Ashish Nathu: And we mentioned, yes, credit cards and all that kind of stuff, but the businesses themselves are doing better and businesses are doing better. That money trickles down jobs. Stay high. I was just sharing before we started recording it, we've been interviewing a ton of people and you're not interviewing.

[00:14:43] Ashish Nathu: Unemployed people that like we had to do during COVID or you're, the quality of talent out there that's looking to make moves at good companies is incredible. People are out looking for good opportunities for the next wave. Maybe they had to leave a company that kind of struggled through COVID or didn't make it.

[00:14:59] Ashish Nathu: [00:15:00] And that's really interesting to me. I've also been following, after we talked about it here, Mooch. About the auctions. I've just been watching some 10 X auctions in the last few days and like their ideals selling, with current bids expiring in like an hour, two hours, three hours, 30 bucks a foot, 40 bucks a foot, 50 bucks a foot, huge high rise buildings all across the country, pennies on the dollar, right?

[00:15:26] Ashish Nathu: And. It's just scary and I think that a lot of people are going, and this is where I want to pivot to you guys and ask you is a lot of people are betting and I wonder if you're betting on the same thing is, okay, I'm betting on getting into a deal that maybe pencils now at 8%, assuming that in three years I can refinance.

[00:15:50] Ashish Nathu: But what happens if that's not right? And what happens if, we said this a few weeks ago, it's what happens if this just continues and we keep printing money, [00:16:00] government, no, nothing really changes. We keep printing money. Inflation goes even higher. Interest rates go even higher. What if they go another three or 4 percent higher than they are right now?

[00:16:10] Ashish Nathu: We can't be that naive to think that we're at the top. In the eighties, interest rates hit 15%. So who's to say that it can't go higher. Who's to say, so in seven, eight years, I think the, there's a, in the business community, there's a big economics team called the Bolio brothers. And they are projecting that in 2029, 2030, there's going to be this like big recession and they got all their statistics and data and all the things.

[00:16:38] Ashish Nathu: They're indicators that are communicating to them that that in 2029, 2023, 2030, there's going to be a big recession or depression. And I just want to really understand what that means to the real estate world. So if something, we bring in this bias in our opinion, that interest rates can't go higher.

[00:16:58] Ashish Nathu: And if they do maybe half a point, [00:17:00] but who's to say it can't go up 3 percent more, 4 percent more. And just wipe people out and you're right. If the fed doesn't care about commercial real estate, it will wipe people out. Full reset for the entire system.

[00:17:20] Aaron Amuchastegui: The, what is the fight club where they wanted a full reset of the entire system. So what I think people should do, if I could find my, check that out, like Ash isn't wrong, right? So we look at the last 50 years of interest rates. The now that's also ridiculous. I hate it when people say that look forever because the last 20 years have been different.

[00:17:47] Aaron Amuchastegui: Yes, but prior to that, like between, night between 1990 and 2000, it was a certain way. And then all of a sudden it changed. September 11th happened and it changed, and then it started going or like from [00:18:00] 1960 to 1980. It was one way, then something changed. So stuff changes. So even though it's been away for the past 20 years and people say it can never happen.

[00:18:09] Aaron Amuchastegui: And what I'm showing on this screen guys is just historical mortgage rates, but right now they're higher than they've been since October 6th, 2000, which was right before September 11th. So now we're back to where we were before the Fed used the interest rates and housing as a weapon for the economy.

[00:18:28] Aaron Amuchastegui: And if they decided to just hang out here and it was like between 1990 and there, We should see rates for the Fed fund rates between Nine and three quarter percent and 8. 23 where we are right now. And who knows if that's really what's going to happen. So how do you make money today is sheesh and Maddie, you plan as if rates are not going down.

[00:18:53] Aaron Amuchastegui: Yes. You plan as if rates are going up. That's how we're doing all of our refinances right [00:19:00] now. That's how we're doing all of our things. Cause anybody last year said Hey I'll wait 12 months. It's going to get. Better. I remember having a chance to even like when some banks didn't refinance me at early 2022 and like a week later, they're like, sorry, you probably don't even want these.

[00:19:15] Aaron Amuchastegui: I can get you DSCR for five and three quarters. And we laughed. We're like, Oh shit, I'm not doing five and three quarters. I'll wait for it to come back down. And now it's Oh my gosh, five and three quarters. What an amazing thing that would be. So we need to plan as if they aren't, no, you're not going to be, don't buy something thinking you're going to refine two years, three years, five years, 10 years.

[00:19:36] Aaron Amuchastegui: Which means it's going to be harder to buy something, but that's why some commercial stuff is getting sold for 75 cents off. So you don't buy something that way, but Hey, that could be a bonus. It's like accelerated depreciation being a bonus on a good investment, or if rates do come down or there is a change, then there's upside, but don't make bets planning on it because the people that made bets planning out are the ones that are losing everything right now.[00:20:00]

[00:20:00] Aaron Amuchastegui: We did an interesting thing yesterday. And so so real estate agents are like, all right, we're gonna go kill ourselves. What do we do? Here's something you can do. We did a search on the MLS yesterday and we plugged in financing type and we plugged in assumable and there wasn't a ton of them, but there was 20 houses on the market in this little town.

[00:20:19] Aaron Amuchastegui: And one of them said with 10 percent down, you can take over our 3 percent loan. And so you could buy a house. It was a 220, 000 house. So that you could buy it, you could put 22, 000 down and your mortgage is 3%. So the payment on that was going to be 700 a month and it would rent for 1500. So there's a deal to be bought right now on MLS or for an end user buyer.

[00:20:44] Aaron Amuchastegui: So agents should be like finding that go marketing that to their buyer, because that that same house, even if they got 20, 000 off by buying the neighbor's house for 200, their monthly payment is going to be 14, 15, 1600. There is [00:21:00] opportunity out there, but yes, I think I, I do not think that you make bets, assuming rates are going to come down and you can refine right now.

[00:21:07] Aaron Amuchastegui: Agreed.

[00:21:07] Matty A.: I just don't think that

[00:21:10] Ashish Nathu: it's like a foolish it's foolish, right? People are underwriting deals, assuming that they can get that done. Maddie Aaron

[00:21:16] Matty A.: said it perfectly, right? Cause just rewind 18, 24 months and everybody that was saying they've got the best, syndication opportunity.

[00:21:27] Matty A.: Ultimately the value add was based on, pumping the IRR and the cash on cash return was based on refinancing these deals, getting investors their money back. They had to be in somewhat of a, low leverage position. And if they weren't now with not only interest rates being where they're at.

[00:21:47] Matty A.: And most of those assets trading on cap rates, which inflated over that time value gets sucked out of those assets. Now you've got a double, whammy on your property. So you can't do that in this type [00:22:00] of climate, right? You have to mitigate that risk going in and saying, does this deal work with these conservative assumptions baked into my pro forma?

[00:22:09] Matty A.: And if it does, I can do the deal. And if. I have the opportunity to refinance at a lower rate later on. That's just icing on the cake and I'm going to look like a hero to my investors. But I gotta mitigate every possible risk, variable in this equation, because if you do right in this next season, I think there is going to be massive upside and opportunity for people that were conservative, smart, but still stayed in the game and didn't completely sit on the sidelines.

[00:22:42] Matty A.: But I think we'll still see multifamily be a relatively stable and competitive asset class. It's why obviously the market and investors agree with that. It's the lowest trading cap rate asset class in today's commercial landscape. And then I also think that there's going to be some great opportunities for [00:23:00] Those traditional seven and eight cap type of properties that people are still trying to sell them as seven and eight cap type of properties when really you should be getting them at an, 12 cap property.

[00:23:11] Matty A.: And if the market stabilizes you can squeeze those back down a little bit and still generate some healthy cashflow along the way. My, and I love what Aaron just talked about on the single family side, you can do the same thing on the commercial side. Yes. We've got tons of searches set up on assumables.

[00:23:28] Matty A.: Keyword searches on seller financing or carry back keyword searches, JV searches, right? Sellers are getting more and more open and creative to ideas around seller financing partnership. Hey, just give me a little bit of money and some skin in the game to help me get some breathing room. I'll stay in this with you.

[00:23:48] Matty A.: I'll get creative in this deal with you. And those are key opportunities that people can take advantage of right now. But again, it's all about underwriting and building a moat around some of these [00:24:00] opportunities to where you can use them as stepping stones in a worst case scenario to get across the choppy waters.

[00:24:07] Matty A.: But could also be massive launching pads if things pan out and go in a good way. So I think people that are still in the game and leaning in right now are going to get rewarded very handsomely in this next season. And I just find it as one of those times where, there's going to be a lot of chaos and a lot of noise around risk.

[00:24:30] Matty A.: But I always think of Morgan Housel and the speech that he gave Aaron when we were I think where we were at Steamboat or we were somewhere at an Abundance event. And he said, volatility is the price you pay to getting wealthy. So when you think about people that if you want to make money and this is in chaotic and challenging times the most lucratively based opportunistic based times to make money, you're going to have to get comfortable with some [00:25:00] model.

[00:25:00] Matty A.: So figuring out what your model is, what your strategy is, not trying to make money in a ton of different ways, but maybe one or two key strategies that you think work. Feel comfortable. You can build real skills in it. You can build real relationships, team systems around some of those things. There's opportunity in this market.

[00:25:19] Matty A.: You just gotta be that much more strategic and aggressive of how you go about finding those deals.

[00:25:26] Aaron Amuchastegui: The gotta get Morgan on here. We gotta message, we gotta get Morgan and have him come on right now. 'cause he, I've had him on my podcast and he had him on yours, the, yep. He is a he's a brilliant guy and I'd love to hear his.

[00:25:38] Aaron Amuchastegui: Take on this stuff. So note to self, one of us needs to reach out to that dude. Yeah,

[00:25:44] Matty A.: I'm going to do and maybe we can talk about it on another podcast episode, or I'll create some content around it, but I think. One of my big bet models right now going into this season. And I think it's actually a little bit opposite [00:26:00] of what you saw there on that.

[00:26:01] Matty A.: I think some of the big companies like the Amazons, they're seeing, percentage increases, sales are up, business is good. But I really think if you talk to, and I know I talked to a lot of business owners in my community and just around the country, and a lot of people are getting pinched right now, the cost of doing business right now, the cost of goods, the cost of services, the cost of rent, inflation, businesses are feeling that and not all of that can get passed on to the customer.

[00:26:28] Matty A.: And so profits. Are actually shrinking for a lot of businesses and stress and time and energy requirements to go in to make that amount of pinch profit now is really wearing down a lot of businesses. So I think Main Street could be. A great place where one, there's some opportunity to come in and buy some of those businesses, pull a Cody Sanchez and go and buy some boring businesses.

[00:26:54] Matty A.: But I also think, that's going to hit commercial real estate too. And they're one of my models [00:27:00] is looking for certain key, strong franchises. that have national footprints and are actively looking to grow and understanding what their criteria are. I am doing this essentially on this deal out in Nashville.

[00:27:15] Matty A.: We got a good buddy, Aaron and I do, David Laver, who's been doing this with Crunch Gyms. If you can find those tenants in tow, there's a lot. I'm seeing more and more of them. Dark, ghost, vacant commercial buildings that could be in great locations, but the owners don't understand how to go out and find that next tenant and secure that income stream in.

[00:27:38] Matty A.: So they're going to sell those assets at a pretty heavy discount just to get them off their books and not have to worry about re tenanting those spaces, redeveloping those spaces. But if you've got a couple of key quality. Tenants that you know what their criteria is and you can find those assets in the locations.

[00:27:53] Matty A.: They want that fit their operating business model You can secure those income streams before you [00:28:00] actually even take the risk and close on those assets Force the value into it and that's a really good model that I think can make Some pretty significant returns for people in this kind of market if you've got those types of relationships

[00:28:14] Ashish Nathu: Yeah, I just want to double click on that because I agree with Almost everything you said there.

[00:28:18] Ashish Nathu: I think that on the real estate side, there are deals that cut that sellers know that they have to lose money in order to offload them. They're not willing to maybe put that in the price, but once you start getting on the phone, they know they're going to have to cut into the bone to get this thing.

[00:28:35] Ashish Nathu: Offloaded. I was just working on a project where one of them, it was clear that he had to sell it below his note. And once you're talking to the broker, but he's there's actually another deal that he's also selling. So maybe there's a creative way to collateralize the other one in order to make this one happen.

[00:28:56] Ashish Nathu: And so there are definitely conversations going on because [00:29:00] people are going to have to cut in the, but I think that's where the opportunity is. But I just be careful because I also think that just cause you have. The deal cash flowing now, right, Maddie, where it's tented it up. There are people in the office building or retail center.

[00:29:15] Ashish Nathu: Let's say an office for a second. There's still businesses that are going to still downsize. So just cause it's leased up today doesn't mean in 48 months or 24 months, it's going to still be leased up. Yeah. So there's still a lot of pain, I think, but that's where the opportunity is for the listeners, is stay in the market. I think the lesson for me today is. Just be overly conservative with your assumptions. Yeah. Don't be a fool's Aaron. Try to convince yourself of things you cannot control and don't know, don't hurt your investors. I think what's key in this market, at least for me, it would be is don't screw up your own personal reputation.

[00:29:50] Ashish Nathu: By overzealous non conservative assumptions, right? In the first few deals in the next few years, if you're screwing up those [00:30:00] assumptions and you're wrong, the next decade of opportunities are gone for you. So get right those assumptions, make sure you're overly conservative. And then on the business side, same thing, right?

[00:30:09] Ashish Nathu: Just be thoughtful of those assumptions.

[00:30:11] Matty A.: Aaron and I know a handful of people that in the last few years were not conservative with their assumptions. We're right in the, this party is never going to end train and their reputations and their deals and their investors have all gotten hurt in this process.

[00:30:28] Aaron Amuchastegui: They're done. Yeah, they're done. The people. The people that messed up deals in the last two years done, you won't be able to raise money again. Do we think

[00:30:39] Ashish Nathu: we're at the bottom in any of these sectors?

[00:30:43] Matty A.: You talking about in commercial real estate specifically?

[00:30:45] Ashish Nathu: Commercial, residential, anything. Do you, can you trend set any bottom you think?

[00:30:53] Matty A.: I mean on the single family side, right? Redfin, Zillow, NAR, a lot of them have [00:31:00] already started to bake in the fact that they're probably going to cut at some point next year with supply where it's at and demand probably going to tick up. Once those things start to happen, home values are going to continue to steadily appreciate.

[00:31:14] Matty A.: I don't think it's going to be drastic. I think N. A. R. said 2. 1 to 3. 1 percent in appreciation. I think it might be in the 5, 6 percent range, maybe even higher. But that being said, I think commercial is where. The real opportunity is at, I think single or multifamily has definitely started to expand out a little bit more.

[00:31:37] Matty A.: Rents are starting to soften a tiny bit, but I still think that's the most stable asset class. So I'm not sure if, bottomed out, I think. Maybe depending on, where we start, but I think office, no, there's still so much carnage to come in that particular space. That [00:32:00] I really think that's got a ways to go to find the bottom.

[00:32:03] Matty A.: And then on, all the other different asset classes, it's I'm curious on your take on this, Aaron, but it's hard to say what's hit the bottom on retail, because I think there's a couple of different variables of whether it's big box, anchored retail, family retail strip, right?

[00:32:21] Matty A.: There's a couple of different categories and classifications there that I think those, some are more stable than others. And then you've got, mobile home parks, RV parks, hotels, a lot of those asset classes where I think hotels have actually weathered the storm pretty well.

[00:32:38] Matty A.: And I think based on how the overall leisure economy does over the course of the next year or so, that's going to trickle into hotels. So I think hotels might, still have a ways to go to find maybe some settling in values there.

[00:32:54] Aaron Amuchastegui: I think so I'm going to. Vegas tomorrow for F1 when this thing airs, I'll be there [00:33:00] watching sitting next to the sphere as cars go racing by a year ago when tickets came out.

[00:33:08] Aaron Amuchastegui: The wind had a million dollar package that you could buy. They had a 500, 000 package, a 250, 000 package and their base price for a room for three nights and tickets to F1 their cheapest one was like 30, 000 and I'm a huge Vegas fan and I'm a huge F1 fan. I'm a huge fan of the win and I was heartbroken because I'm like, okay, I want to go waste money and go do this, but I'm not going to do a 50, 000 package at the win.

[00:33:37] Aaron Amuchastegui: So let me stay at a casino next door. That's not as good that I'll feel like I won't say the wrong words here. I'll go to one next door that I don't like as much that I can get a package. That's let's say 15 or 20 K instead. And I was remember being like in a panic, like I need to book this now, cause this thing is going to sell out and this week.

[00:33:58] Aaron Amuchastegui: Hotel prices [00:34:00] are dropping like crazy. I just saw it. Prices are dropping like crazy and you can buy the same package I bought for 7, 000 bucks. I'M coming. I'm

[00:34:08] Ashish Nathu: coming. I'll see

[00:34:09] Aaron Amuchastegui: you tomorrow. So the book of flight get there tomorrow. This might be the only time Vegas does it. And yes, for anybody else that's hearing us, it's too late.

[00:34:17] Aaron Amuchastegui: But for Maddie and Ashish, it's not too late to go meet me in Vegas. That's going to be a once in a lifetime thing, probably. My point of that long ass story is that is. The people going and spending money in Vegas for F1 are people that have extra spending money that like leisure, that like travel.

[00:34:38] Aaron Amuchastegui: And so there's a type of hotel that I think will do fine or okay, but there's another type that isn't necessarily because Austin F1 was packed, but it wasn't quite as expensive. And traditionally the people that go to F1 are the ultra wealthy because it's a ridiculously expensive event to see the gazillion dollar cars.

[00:34:56] Aaron Amuchastegui: Anyway, my point with that is the uber wealthy are being tighter with [00:35:00] their money, much tighter than Vegas projected predicted and Vegas is really good at predicting. So yeah, so they got it wrong. They got that one wrong and they don't get stuff wrong very often. So that tells me there's less money out there.

[00:35:13] Aaron Amuchastegui: It tells me that hotels are going to hurt a little bit more because we're going to see it first on that level. When I saw the guy not buy the hotel to last week at auction, when he was ready, he showed up wanting to buy the hotel and it was heavily discounted. And then he didn't, um, that was like, Whoa, that was like, he actually had done his homework.

[00:35:28] Aaron Amuchastegui: He was ready, but he wanted to buy that thing for 40 percent off your bigger question of, are we at the bottom? I think that this is a really interesting take that you guys might like median prices, the average houses. And the reason we're seeing like prices are still going up and prices are fine. The average deal, we're not at the bottom yet.

[00:35:51] Aaron Amuchastegui: Because there's still a lot, there's a lot of stuff listed that isn't closing, that isn't selling. And when it does eventually sell, it's going to sell for a lot less. [00:36:00] But I think you do have the opportunity today, right now, to buy a deal that will be the best possible deal you could get for the next 10 years.

[00:36:10] Aaron Amuchastegui: I do think that you could buy a house today at the bottom, even though we're not at the bottom. So what does that mean? That means if a property is, if the median price for that specific house right now, if all of them are selling for a hundred thousand dollars right now, right? The median prices are probably going to get down to 90, 80, 70 in a worst case scenario, right?

[00:36:32] Aaron Amuchastegui: Worst case scenario. So I say probably in a worst case. So take out the probably. So if the median price is a hundred, If we're saying we're not at bottom yet, maybe potentially it can get down to 70, 000, which is another 30 percent discount, which would be significant, right? So that's about as far as we could go if I said, yes, like how much further could the bottom be for single family, another 30%.

[00:36:55] Aaron Amuchastegui: I don't think we're 30 percent away, but I'm saying that would be like a max. I would be absolutely shocked, [00:37:00] but I think you could buy a property today for 30 percent off 30 percent off of today's 100, 000 list price. I think you could buy a house for 70, 000 when median when it should be worth 100.

[00:37:11] Aaron Amuchastegui: And even if the other prices continue to go down, they're only going to get down to 80 So so we're not at the bottom for an average property. We're not at the bottom. If you're like, okay, I'm going to go buy any sort of thing on MLS, but there are deals to be made right now. And there are once in a lifetime deals.

[00:37:25] Aaron Amuchastegui: It's the same thing as that one house where it's like, Hey, take over my 3 percent payment. Yeah. Take over my 3 percent payment with 10 percent down because I think he could probably go give the guy 3, 000 and take over his payment at 3 percent down instead of giving him 25. And then that is going to be the deal of the century, right?

[00:37:41] Aaron Amuchastegui: Because you're getting to take it over. And in the other industries, when I'm trying to compare industry to industry if you look up articles, you're going to see as many that tell you storage is unstoppable. Sorry, guys. In recessions as compared to say it's hurting right now. And so if you [00:38:00] go out and read the news, every asset class is in such a mixed bag of saying, Hey, couldn't get any worse.

[00:38:07] Aaron Amuchastegui: Hey, it's not, it's not going to get any worse. Hey, we're on our way up or, Hey, we're unstoppable with that. And I think back to like maybe a month ago. We can all agree I don't think multifamily is at its bottom, period. I think there's going to be way too much foreclosure stuff that happens.

[00:38:21] Aaron Amuchastegui: Makes me sad. I have some big multifamily that I had a lot of my network tied into, so it makes me sad. But I don't think multifamily is done correcting because of the cap rate thing and because of how much stuff is refinancing. And the commercial office we know is a time bomb. And when you have those two big time bombs and people lose all of their money that they raise, it's going to affect other asset classes.

[00:38:41] Aaron Amuchastegui: So that's why I think it'll affect other stuff. It won't affect single family as much because single family buyers will just become renters. And because we have two and a half million or three and a half million units under construction, there is not going to be a supply shortage anytime soon. And when demand.

[00:38:54] Aaron Amuchastegui: Like they would actually have to look, rates would actually have to lower like 4 percent now to get demand back up to be [00:39:00] enough when they actually build that infrastructure. I think the last point of what Maddie made that I think is interesting. Don't make them like it's better to not do deals than do a bad deal.

[00:39:12] Aaron Amuchastegui: A hundred percent is better to not do deals than do a bad deal. Because if you do a bad deal right now, or you guess wrong. Like I remember being so upset in 2019 and 2020 when amateurs were making a post on social media and raising five or 10 million like it was nothing. And I was like, when I raised my first 5 million, like it was hard work because essentially it's illegal to post it.

[00:39:34] Aaron Amuchastegui: There's so many laws that are broken, right? And I remember just being angry about it and going, how is this guy doing that? And how is this guy doing that? And the proof came out in the pudding. The proof finally came out over the last year where now these people are getting crushed.

[00:39:47] Aaron Amuchastegui: They're losing a hundred percent of investor equity and no one will ever lend them money again. No one will ever invest in them again. No one should, but much there's still

[00:39:56] Ashish Nathu: the amount of liquidity out there. It's still an absorbent amount [00:40:00] of liquidity, right? But nobody's, but it's just all the bad actors got wiped out.

[00:40:05] Ashish Nathu: Yes. Amateurs that, yeah. And

[00:40:07] Aaron Amuchastegui: a lot of, and some amateurs did fine. They did re they did refinance in time. I shared the deal with you guys where I barely pulled off a refinance in time and it made me look brilliant. So I also know that the guys that screwed it up, it happens to I'm not, I actually, I'm not judging when I'm saying it because I've had so many close calls myself.

[00:40:27] Ashish Nathu: I just think you just got to be careful on the assumptions. That's it, right? This could equally turn higher and if it gets worse, are you prepared? And then also do you have the ability to generate cash if you're just investing real estate on as a syndicate? And everything turns on you where you need an additional 20 30k of a month in cash.

[00:40:48] Ashish Nathu: Can you solve that problem? So having this equation of having businesses generate cash and then also investing real estate is critical component in this. One of the things [00:41:00] I feel like, and maybe we'll get a little more philosophical. Do you want to say something?

[00:41:04] Aaron Amuchastegui: Just I have a business, like another business idea I want to throw to you guys, but let's get philosophical first.

[00:41:09] Ashish Nathu: I just think let me just say this and then I'll turn it to you. Cause I don't want to go off tangent is one of the things I learned in this last cycle through COVID. Was that what makes people, what makes most people successful is not that they're smarter than everybody else. It's that they can just survive for a longer period of time.

[00:41:32] Ashish Nathu: Like for me last year, it was probably the bottom of the bottom and then the top of the top in one year, six months apart. And I, you think, you know what you're doing. You think when things are great, you're like, I'm so genius. And then when things are falling apart, you're like, Oh, it's all the environment, the circumstances, the interest rates, money supply, it's the government.

[00:41:54] Ashish Nathu: You're blaming everyone else outside of you, all these circumstances, right? So it's such an interesting contrast. [00:42:00] When you're doing great, you take all the credit. When things are going bad, you blame everybody else. But in reality, you're not in control of most things anyways. And so what I love about the conversations we're having here is it's mostly about, you can't control what's going to happen in the market, you need to know when to jump on the waves, when to jump off the wave, when to get on the surfboard, when to jump off the surfboard.

[00:42:28] Ashish Nathu: And I'm not advising timing anything. I'm just saying being smart about that, knowing that it is coming in waves. And then how you approach it and how you design your life with money in money out investing all those kinds of things to be able to weather the storm as long as you possibly can.

[00:42:48] Ashish Nathu: I think some of the people that are closest to me made all of their wealth. They look rich and they've looked rich for 30, 40 years. But they made all of their wealth in the last six, [00:43:00] right? And what made them successful wasn't the last six. It was that they just survived for 35 years to experience the last six.

[00:43:10] Ashish Nathu: So that, that's all I wanted to share. Cause we really are not smart enough to know where the hell this is going. And you can't sit here and predict what's going to happen in 10 years. But I just think that the reason why I was asking those questions and even for the audience is some of us are young here.

[00:43:24] Ashish Nathu: We got a long life to live. We got long business careers to happen. So for making bets today, you don't want to make bets, assuming that the world's going to fall apart and things are going to go absolutely haywire in 10 years. You're just getting yourself into trouble. But that's the only reason why I was asking, but it really is about building the infrastructures that you can survive these.

[00:43:43] Ashish Nathu: These storms. And I think what I'm really observing in myself as I'm navigating this journey is man, how foolish are my assumptions? How foolish am I to think that interest rates can't go higher? How foolish am I when a broker calls me and says, these are [00:44:00] the facts. It's Oh my God, so many assumptions because we have this natural willing, wanting, like we want this, we have this desire to make it work as an entrepreneur.

[00:44:11] Ashish Nathu: And that instinct, that positive, I think it's a gift in some ways of trying to find a way to make it work, being optimistic can also kick your ass. So just interesting to anyways, that's what I wanted to share.

[00:44:30] Matty A.: It's a great point though. I think what it reaffirms for me what COVID did at least and how many crazy things go on in the world, what feels every year now is I'm just at a place and I think it's taken multiple failures, multiple, face plants getting, pushed up against the wall and just experience in life, right?

[00:44:50] Matty A.: Because I heard somebody say this the other day and I thought it was really good. It was that you have three seasons in life. You have a season where you're building [00:45:00] and becoming a warrior. You're growing your business. You're growing your family. You're fighting. You're calling. You're scratching.

[00:45:06] Matty A.: You're proving yourself. You're growing into this warrior that can trust in itself to withstand the rollercoaster of life and business. And the second season is. You persist and you withstand and you fight enough battles. Eventually, you're going to win some war. And you're going to become the king of your domain.

[00:45:24] Matty A.: And you'll have security, you'll have freedom, you make up your own rules, right? And you are in charge. You're in the driver's seat of your own destiny. And you know you're outside of the matrix. And then the last one was more around this sage. And, getting to a place where you're giving back you're being a mentor, you're sharing your wisdom and experiences, you're more focused on impact.

[00:45:46] Matty A.: And as I was thinking about that, I also was reading the Stephen Schwartzman book the founder of BlackRock. And. [00:46:00] One line that he said in there that I think applies to all of those seasons, and I consistently keep replaying this in my head to maybe reshare this with many of you who are looking at this season, this chaos as opportunity through, optimism.

[00:46:15] Matty A.: And it said doing a really big thing and a really small thing. Require the same amount of effort, if not less. So you might as well go after something so big, so extravagant that in, inspires you and challenges you in ways that something small wouldn't. That this is the mentality that got him to the level that he got to was just thinking so irrationally big that by doing so in every area of his life and that's something that I think we can all apply at every season, every stage in life is going, whatever I'm thinking, how could I challenge myself to think 10 times or a hundred [00:47:00] times bigger?

[00:47:01] Matty A.: And the paths of getting to that outcome becomes so much more narrow and narrow. And for people like us, we're good executors, right? It's just when we don't have clarity in what path we should be walking down and how we need to walk down that path, that we get spread thin, we mistake movement for achievement, we get really busy.

[00:47:21] Matty A.: And so for me I'm, my, where I'm trying to challenge myself philosophically right now is going where... Can I continue to think even bigger? And I'll give you an example. One of my goals for achieving 500, 000 a year in passive income was over the next 10 years, and I started this when I was 30, is I just need to buy one asset a year that.

[00:47:43] Matty A.: Nets me 50, 000 a year. And then I got clear on what that criteria was and what asset classes could allow me to do that. In this market, what I'm buying right now in Kansas near another call, another medical Plaza that I have. I'm getting a, almost an 11 cap [00:48:00] on it. It's a hundred percent occupied.

[00:48:02] Matty A.: I'm using some of my 1031 funds from another sale, but the seller is carrying back paper for three and a half years at very favorable interest in terms. And that property is going to net me 175, 000 a year. And so just, and for me, it was like, why keep trying to do 50, 000 a year deals when now there's a potential season.

[00:48:29] Matty A.: I'm in a potential space in my life, in my business and my skills and my relationships that I might be able to get. A 300, 000 a year building or 150, 000 a year building. So I also think it's a good reminder for anybody right now. That's looking at what this season ahead presents is going, whatever your initial goal or desired outcome was in this season, what could it look like if you tripled it?

[00:48:55] Matty A.: Or 10x it and that was actually a reality [00:49:00] and it was just retooling the target a little bit and how you aim at that target that actually allows you to cover some ground and achieve something beyond what Most people are looking to achieve in this season. And that's where I think those are the people in five years, you're going, man, that guy he was smart.

[00:49:18] Matty A.: He did something different than everybody else. And it was probably just, it just started with a little bit of a shift, a degree different of thinking.

[00:49:27] Ashish Nathu: Yeah. Mooch bring us home and then Yeah.

[00:49:30] Aaron Amuchastegui: I'll try to, I'll try to bring the no, we, I don't, we won't do my business ID today. I'll remember it for next time.

[00:49:36] Aaron Amuchastegui: Cause I think that the, I think we've done a good chat here. I really liked that Steven Schwartzman quote where it says the effort for a big thing is the same amount of effort for a small thing. The devil's advocate to that is the risk versus reward scenario. If you've got a chance to make a couple million, you've got a chance to lose a couple million.

[00:49:54] Aaron Amuchastegui: And if you go small, you got a chance of making 20 grand or losing 20 grand. So you are betting on yourself in every version. [00:50:00] There will be a time in the next few years to, I think, go really big. I don't know if it's right now, unless you are getting one of those deals of a century, if you're getting something for 70 percent off, even today's value, which means 65, 75 percent off of the value from two years ago then maybe you're.

[00:50:19] Aaron Amuchastegui: In the right ballpark for stuff. Seven years ago I was worth 0, right? When you're talking about all your friends that made all their wealth, it's sheesh, like I'm one of them because seven years ago I had a 0. Really by the time 2019 hit, I had a whole bunch of houses that were cash flowing, but there wasn't any equity in them and they weren't cash flowing all that much.

[00:50:40] Aaron Amuchastegui: So I would say 90 percent of my wealth was in the last four right now that I did a lot of work from 2015 to 2019 to make it happen. But had the, had COVID not happened in 2020, like I'd still just be plugging along, getting these houses and I'd be, by now I'd have average cashflow and rents in them, but I wouldn't have nearly the worth and the [00:51:00] other stuff.

[00:51:00] Aaron Amuchastegui: So it is. Short periods of time that these bets happen. I'd also encourage people to try to find the bets that are, and maybe buying a hundred houses was doing something big, instead of doing something small, cause there was some scale, but yes, if I had gone after multifamily back then the same way instead and had 10, 000 units when that hit, maybe it's a little bit.

[00:51:20] Aaron Amuchastegui: diFferent. But I think, if you said like the question to finalize the question of if we're at the bottom or not, or where, if you said, how much would you bet that houses will be worth more six years from now than less? I would bet that houses will be worth more six years from now. If you told me to do the same bet with multifamily, I'd be maybe 50, 50.

[00:51:48] Aaron Amuchastegui: I would want some three to one odds. If I was going to bet on that. And if you said is office going to be worth more in five years than it is today, I would [00:52:00] say no, right? Like really like the, so if again, so if you're going to buy office, you need to be getting giant discounts. So that way you still beat that part out.

[00:52:12] Aaron Amuchastegui: So those are my predictions. I've been wrong a couple of times to the Blackstone sent me their playbook, they said, come work for me, let's go buy a bunch of rentals. And I wasn't able to actually see what that was going to mean. So I got that one wrong. I've gotten a few wrong, but that's my, that's, those are my predictions.

[00:52:26] Aaron Amuchastegui: I think. Fun,

[00:52:27] Matty A.: if we, where do you think there's opportunity with office? Just real quick to wrap that up. I was thinking of all the different plays with office, and we've talked, I've talked with a handful of different people that are looking at what can we do with office developers?

[00:52:40] Matty A.: People looking to, at that being a, an opportunistic play going forward. Have you heard anything in conversation?

[00:52:48] Aaron Amuchastegui: We talked about it a little bit last time. They're doing these, they're trying to do this tax incentive and stuff like that to convert office to multifamily, but it is a different beast, like single story office, maybe, but if you've got a 50 story [00:53:00] office building, converting that to multifamily is hard.

[00:53:03] Aaron Amuchastegui: It's extremely expensive. And I think the opportunity is just location and discount wise. If you're buying an office, again, I can't believe no one bought that 14 million one, because in that case, you could have it be 20 percent occupied and 8 percent loan. And cashflow. So I think it's probably changing the analysis in the way that people look at these.

[00:53:23] Aaron Amuchastegui: So if you're doing the analysis and you're like what if I have 50 percent occupancy? The building I'm in today does not have 50 percent occupancy. The building I'm in today is like 20 percent occupied and it's been 20 percent occupied for the last nine months. And it's a nice building. It was a Wells Fargo building.

[00:53:36] Aaron Amuchastegui: Wells Fargo used to be the whole bottom floor and second floor. There's no longer a bank downstairs. Like thinking about this, this building is 20 percent occupied and they show our units all the time and nobody's renting over here. So what's the best case for this thing in next five years, 50 percent maybe because they built a bunch of nice offices downtown that I would much rather have that view.

[00:53:55] Aaron Amuchastegui: And if those stay vacant, they're going to let me rent those for the same price I have this one. And so [00:54:00] I think the opportunity with office is super, super discounted stuff. And then probably turning those bottom floor office stuff into more retail. There could be a restaurant downstairs. There could be some other stuff, but you're still only.

[00:54:13] Aaron Amuchastegui: there's probably some bigger opportunities in there. I think the opportunities to be made are super significant discounts and whatever asset class you're buying in. And if you're not getting a super significant discount, then you are falling in love with the deal and you shouldn't be buying. And and that's the advice I'm following.

[00:54:27] Aaron Amuchastegui: The best part wealth is made in these times. The again, like a couple of weeks ago said, Hey, stock market's at the bottom. And if you had a bit, if you'd have invested in Bitcoin stock market, when he said that you'd have made a lot of money. So there's opportunity to be made right now. Next week, I'll talk about my new business plan idea.

[00:54:44] Aaron Amuchastegui: Maybe somebody else is going to jump on it too, because I get some of those now and then. Let me ask you. Yeah,

[00:54:52] Ashish Nathu: I know. Let me ask you guys a quick final question and we'll go around and then we can wrap up. What are you [00:55:00] specifically learning right now? What are the skill sets you're doubling down on in this season to help you?

[00:55:07] Ashish Nathu: Or what did, what skill sets should, would you advise the listener to double down on given the conversation we're having? So let me go first actually, because number one, I think for me. I'm spending a lot of time on marketing, a ton of time on sales funneling, understanding how to write scripts, how to write, how to find off market deals, Maddie, you were talking about that.

[00:55:31] Ashish Nathu: How to use certain softwares to, to prospect. And to increase the, um, the probability of close and sit, all this kind of stuff for me. Also, this was part of that skillset is getting on the phone, understanding what's going on in the world, right? Having these conversations in real time, making predictions.

[00:55:56] Ashish Nathu: That was a skillset I wanted to have an opinion, be able to defend that opinion.[00:56:00] thAt skillset can be used in many places. So what skillsets are you guys learning right now and doubling down on? We're

[00:56:09] Matty A.: really heavily focused right now on AI. Yeah. There's, I have really, and I'll just use a simple and easy example is.

[00:56:19] Matty A.: My, my person that was doing show notes the person that I had doing sound engineering and a lot of editing stuff, I just didn't need them anymore because we've got, our full stack marketing team and kind of tech team that is really leveraging AI and a lot of different other areas of the business going, Hey, I can actually eliminate a ton of human error and overhead.

[00:56:43] Matty A.: With these basic tools and going, man if that's a, just a quick, simple, easy one, right? There's so many other areas of our business or of industries that are clunky, that have human error that are problematic and that costs a lot more [00:57:00] money, honestly, and I'm not a big proponent of getting rid of people's jobs, right?

[00:57:05] Matty A.: I'm, I wanna continue to advocate, but it also. Is part of how we innovate and create new industries and new opportunities and create better value in certain industries and markets. And we're really digging in on chat GPT and a lot of the different AI tools and platforms and tech stacks that you can leverage and create links and chains and, a synergy with.

[00:57:29] Matty A.: So that's a big one. And the easy one, my easiest answer and where I still think has the highest ROI. For the least amount of effort with most people is just networking and relationship building right now, the people who are being active in their relationships and leaning in and learning and going to events and are networking.

[00:57:53] Matty A.: I'm really doubling down on that because those are the people that I want to be connected with that are in the game, [00:58:00] in the hunt, in the battle. What are they seeing on the front lines? Who are they talking to? And ultimately by having those key relationships and you being top of mind and adding value I really think that's where you're going to find the most opportunities in these seasons.

[00:58:15] Matty A.: You need help with something, you know somebody who can help you with. You're looking for something, somebody's going to be looking for it and how they can bring it right to your feet without you having to go and do all the heavy lifting for it. So relationships is a big area that I'm really doubling down on right now and that I think is going to pay dividend in the next, three to five years.

[00:58:32] Matty A.: I'm a farmer, right? So I'm planting seeds. I know that the day I plant that seed and take that action, it's not going to bear fruit for me. I need to Water those seeds. I need to go back and nurture and tend to my crop. And I know that at some point in time, it's going to yield something beneficial. And I'm just it's a marathon that I'm more than happy to run and be patient with.

[00:58:54] Matty A.: But right now. If you're not planting seeds, I would encourage people to get back to that [00:59:00] basic one on one discipline. Yep.

[00:59:03] Aaron Amuchastegui: We used ChatGPT a bunch yesterday. We're using that a bunch right now. Like the great skill, the great thing out there if you do marketing, if you do advertising, if you do anything like that, it's totally changed the amount of productivity we were able to get in a short period of time.

[00:59:16] Aaron Amuchastegui: So that stuff's amazing. Yep. I think I'm going all in on online branding. We have some friends with these giant online followings. We've got Brandon. We've got Cody. We've got these people that have such a big following that if they lost everything tomorrow and they found a new product they liked, and they just went online and said, Hey guys, here's a new product I like.

[00:59:44] Aaron Amuchastegui: You guys should go buy it. I get a 10 percent cut when you do. They can make a million dollars in a day. Like it's just their online brands have built up. It's just the, I had a real last week that got played for five or [01:00:00] 600 hours and still going. And I think about the amount of effort it would have taken for me to it would have taken five or 600 hours.

[01:00:08] Aaron Amuchastegui: And the amount of it to talk to people which, how many weeks is that? So you're like, so 10 weeks. So I did nothing else. I could have had that many conversations. And so the reach that we have with social, so I'm going all in on that building an online brand. I'm going to get to a million followers.

[01:00:22] Aaron Amuchastegui: I'm gonna get to 5 million. I'm going to do 5 million followers. I'm gonna get to a place where I have reach and influence based on the stories that I want to tell. Because that is the best way that you can defend yourself. If you ever go to zero and you have a million followers that like what you do and you're providing value for them and they're aligned with you.

[01:00:39] Aaron Amuchastegui: And you can find a product you're aligned with and sell it. The other thing I'm going all in on is just this, we're using AI a lot on this technology. We're really excited about our software technology that we're doing. The essentially the software that I built to buy houses that now we sell and we're using, so texting is like one of the outreach pieces and one of the cool things we can do with AI.

[01:00:57] Aaron Amuchastegui: Is every day we're getting a report [01:01:00] of what got marked as spam and then like when text got sent out and so then we're able to see which text using AI analysis we can say which text had the highest quick response rate which text had the highest spam rate and why was it because we sent it from a phone number with a different area code was it because we use a different name was it because so whatever so we can start to find out that and then for the ones that turn into hot leads and deals We can start to figure out like, what was the text chain that kept it going?

[01:01:26] Aaron Amuchastegui: And when your first text was like, Hey Matt, do you own the house on main street? And he says, yes, we can start to figure out which one of the next texts is the most successful. So like when I think a year from now of what we're going to be able to do after we have sent millions of text messages and had hundreds of thousands of conversations.

[01:01:42] Aaron Amuchastegui: The technology is going to be able to tell us this is exactly what you say here. Instead of it being where we're like, we're using our batch thing. Like in a year, we're going to be able to say, Hey, go. And our bot will be able to customize every single message to go, Oh, because this house is worth under 200, 000, they get this sort of a text message [01:02:00] when the ones that are worth over 300, they want this sort of a text message and that's the stuff that you and I can't see enough.

[01:02:04] Aaron Amuchastegui: Like I can look at some of the reports and go, Oh, it was spam because. Here's the trend that I see, but AI, I'll see real trends. So I'm super pumped about that as I feel like I'm coming late into an industry because I've done a lot of other stuff, but like this part of the technology part, but AI is gonna help me catch up.

[01:02:21] Aaron Amuchastegui: Love

[01:02:21] Ashish Nathu: it. Love it. Love it. Love it. There's another amazing episode guys. I missed Mikey today, but thank you so much for listening. Any other final thoughts as I wrap up or can I wrap it up? Wrap it up. Thanks so much for listening, everybody. Again, we just are so grateful for you guys to listen.

[01:02:40] Ashish Nathu: If you guys have any questions or comments, please send us a DM. Please go to all of our podcasts. Mattie's podcast is the Millionaire Mindcast. Mucha's podcast is the Real Estate Rockstars. And Mike's podcast is Investing for Freedom. And of course Shish, my podcast is Rich Equations. So please follow [01:03:00] all our podcasts.

[01:03:01] Ashish Nathu: Leave us a five star review, leave us comments, follow us on Instagram, leave us a DM and send us messages. What are you thinking about the podcast? Do you have any questions you want us to discuss any topics? Please let us know, but thanks so much for listening. Another great episode of the King's Table.

[01:03:18] Ashish Nathu: Peace.