Settling the Rent Vs Buy Debate and 3 Rules of Investing in Real Estate with Paul Mark Morris

Summary

Money Rehab with Nicole Lapin

Episode: Settling the Rent Vs Buy Debate and 3 Rules of Investing in Real Estate with Paul Mark Morris
Release Date: October 7, 2025
Guest: Paul Mark Morris (Real Estate Investor, Host of Radical Wealth Plan Podcast)

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Episode Overview

This episode tackles the classic debate: Is it better to rent or buy a home? Nicole Lapin brings in expert real estate investor Paul Mark Morris to get his take, drawing on his decades of experience and $7B annual volume brokerage. Paul shares his “Three Rules of Real Estate Investing,” defends homeownership, but also agrees there’s no one-size-fits-all answer. The conversation is candid, loaded with pragmatic advice, and even includes a masterclass in closing a sale—with a pen as the product.

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Key Discussion Points & Insights

Is Now a Good Time to Buy Real Estate? (03:40)

• Paul’s View: Market timing is overrated; every market has great deals and bad buys.
  • “How good the deal is is almost wholly independent of the market.” (Paul, 03:47)
  • Anecdote: A hot yoga locker room chat where a CPA advised a blanket “don’t buy now”—Paul disagrees, saying the deal specifics, not the market cycle, matter most.

Paul’s Three Rules of Real Estate Investing (07:34)

Rule 1: Buy Where You Know (12:12)

• Leverage your local expertise or insights—don’t just chase cheap homes in faraway cities.
• “If you don’t own a home, the best place to start building wealth is in your own home. There are loan products for owner-occupants that don’t exist for investors.” (Paul, 13:30)
• Local knowledge helps both for personal residence and investments.

Rule 2: Buy Value-Add (14:23)

• Focus on properties where you can add value—cosmetic or structural improvements.
• Buy the “worst house in the best neighborhood”—or in an area showing signs of “cool” (coffee shops, vintage stores, renovations).
• “You are following the cool kids.” (Co-host, 15:58; Paul, 16:00)

Rule 3: Ensure Cash Flow (16:04)

• For investments, positive cash flow is essential. For primary homes, make sure you can comfortably afford the payments versus rent.
• “If you can afford the payment, that’s the same as it cash flowing.” (Paul, 16:10)

1031 Exchange Explained (16:38)

• Tax deferral strategy for investors selling and buying properties—lets you compound investments.
• “If you 1031 exchange it, you can delay taxes and then you invest the whole $2 million into a new property, so you have more to invest.” (Paul, 17:06)

The Rent Vs. Buy Debate (19:25)

• Paul's Stance: Buying typically creates wealth, especially through equity and tax advantages.
  • “You’re making the landlord wealthy. You’re not making yourself wealthy.” (Paul, 19:42)
• Nicole’s View: Renting isn’t “throwing money away”—it buys flexibility, reduced risk, and optionality.
  • “Nobody says I’m throwing away money because I’m buying groceries or health care.” (Co-host, 19:58)
  • Not all ownership costs are recouped (closing, taxes, repairs, insurance).

Financial Math & Opportunity Costs (22:04)

• The majority of early mortgage payments are interest, not principal—a “break-even” is typically 5-7 years.

• Investment Comparison:

  • Historically, S&P 500 outpaces real estate (10% vs 4.5% annually over decades).
  • In many markets, rent is 30-40% lower than a mortgage, allowing renters to invest the difference.
  • “If you took the $100,000 down payment and the $2,000 that you’re saving every month by renting and not buying, then you would make almost six times as much money as you would have spent buying.” (Co-host, 24:13)

• Paul’s Counterpoint: Each property is its own “micro-market.” Value comes from buying right and adding improvements.

  • “Every single property is its own stock market. The market exists inside of that.” (Paul, 25:23)
  • Real estate allows for hands-on control, versus being a “passenger” in the stock market.

When Renting is Wiser

• Consensus: If you may move within 3-5 years, renting is likely better due to transaction costs and slow equity build-up.
  • “If you’re not sure you’re staying… it doesn’t make sense because you’re spending so much in interest, especially in the beginning.” (Co-host, 21:46)
  • “I can’t guarantee you… that we could even get the money that you put into it if you needed to sell.” (Paul, 29:41)

Real-World Variables

• Homeowners face rising insurance costs, unpredictable repairs, and property taxes.
• Renters are insulated from these risks, though these are baked into rent.
  • “Somebody’s paying that though, the landlord is paying that. And that is going to be reflected in your rent.” (Paul, 28:52)

Notable Quotes & Memorable Moments

• On the Power of Local Knowledge:
  “You can know more about a house with $600 from a home inspector than anyone can know about a stock.” (Paul, 26:11)

• On “Selling the Pen” & Sales Mastery (30:33)

  • Paul demonstrates consultative selling, uncovering buyer motivations versus pitching features.
  • “Selling creates opposition, and convincing creates opposition. So to sell effectively, you want to give somebody what they actually want. And there’s no way to figure that out without asking the questions.” (Paul, 33:30)

• On Financial Advice:
  “It’s just really important to not take anything for gospel. I don’t think it’s one size fits all for anybody… buying a home is not for everybody.” (Co-host, 29:10)

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Important Segment Timestamps

• [03:40] – Should you buy now? Macro factors vs. deal specifics
• [07:34] – Paul’s Three Rules of Real Estate Investing
• [12:12] – Rule #1: Buy Where You Know
• [14:31] – Rule #2: Buy Value Add
• [16:04] – Rule #3: Ensure Cash Flow
• [16:38] – Brief explainer on 1031 exchanges
• [19:25] – Beginning of rent vs buy debate
• [22:04] – Math of homeownership vs. investing in the market
• [24:13] – Rent/mortgage payment comparison in LA and investment outcomes
• [30:33] – “Sell me this pen” sales lesson
• [33:30] – Consultative selling explained

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Tone & Language

Nicole and Paul keep the conversation upbeat, direct, and relatable, combining financial rigor with everyday analogies and anecdotes. The tone is practical—with a respectful debate—focused on helping listeners make smart, personal financial decisions.

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Takeaways

• There’s no “right time” to buy; finding the right deal matters more.
• Start local, add value, and ensure personal affordability.
• Real estate and stocks each have advantages—understand your risk tolerance, investment horizon, and lifestyle needs.
• Renting can be financially and strategically smart—don’t let myths drive major decisions.
• Great sales (and purchases) start with listening and asking questions.

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For listeners: Whether you’re itching to buy a home, thinking about investment properties, or happily renting and investing in other ways, this episode offers the frameworks—and calculators—you need to clarify your strategy.

Transcript

[Nicole Lapin]

Foreign I'm Nicole Lapin, the only financial expert. You don't need a dictionary to understand it's time for some money rehab. Is renting really throwing away money? That is just one of the real estate topics that I get into today with Paul Mark Morris, real estate investor and host of the podcast Radical Wealth Plan. And I know that everyone these days with an Instagram account thinks that they are a real estate investor, but Paul is the real deal deal. His real estate firm oversees 2,000 realtors who have closed more than $7 billion in deals annually. So as a real estate guy through and through, he is the perfect person to have the rent versus Buy debate with. As you know, I have a little bit more love for renting than most financial experts. Paul also gives a full on master class in the art and science of closing a sale. Paul does what every finance bro has threatened to do since the Wolf of Wall Street. He sells me a pen. But actually he crushes it. And as a side note, after the interview, Paul kindly mailed both me and our producer pens, which I just think is the greatest relationship building move. 10 out of 10 highly recommend the interview after this.

[Co-host or Interviewer]

I am so excited to head up.

[Nicole Lapin]

To Big Sur with my husband this fall. We are celebrating our anniversary and while I will miss the little mush so.

[Co-host or Interviewer]

Much, we are also really excited to have a little parents tie.

[Nicole Lapin]

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[Paul Mark Morris]

Yes.

[Nicole Lapin]

Welcome to Money Rehab.

[Paul Mark Morris]

Thank you for, for having me. I'm really looking forward to it.

[Co-host or Interviewer]

Made me feel like I'm a disc jock.

[Paul Mark Morris]

Yes. Let's go.

[Co-host or Interviewer]

So everyone asks you, I'm sure, is now a good time to buy? Is that the number one question that.

[Paul Mark Morris]

Everybody asks is to be honest. And I've answered it so many times that I'm happy to answer it again. Real estate is so deal dependent that there are great buys made in every market and there are terrible buys made in every market. So how good the deal is is almost wholly independent of the market. Now I might change the way I look at a deal knowing that, you know, like, we really, like the market's been so hot for so long, you know, we're really closer to the top than the bottom. I might adjust the things that I look at and be a bit more conservative. And I'm gonna give you one anecdote, and that is I go to hot yoga and I'm in the locker room and men are nice to each other in the locker room at hot yoga. Because, yes, I'm sure it's because, like, we've just been through hell, you know, and now we're where it's much nicer. And the guy said to me, hey, you know, I know you're in real estate. And I was looking at this deal and I thought it was a really great deal. And, and my CPA told me not to buy it. I was like, oh, that's interesting. And he's like, well, what do you think is now a good time to buy? And I asked him, like, where the deal was. And interestingly, his Realtor happened to work for me, which is not as crazy coincidental as it might seem, because there are 2000 realtors in LA working for me. And I knew the person, and I know that she's a great realtor, and she was suggesting a buy, and then his CPA said, don't buy, now's not a good time to buy. And I, and I asked him, did your CPA go out and look at the property or did he at least see the deal? And he said, no, he was just saying it's a, it's, you know, it's not a good time to buy. And I told him, I absolutely promise you that that is terrible advice. And the reason why I know it's terrible advice, I'm not saying buy it or don't buy it, but the reason why I know it's terrible advice is because if you don't look at the deal, how in the world would you know whether you should buy it or not? And there certainly is a price at which any real estate deal makes sense in any market for you.

[Co-host or Interviewer]

I think the better question, and we can't get into it now, is, is it a good time to buy? For me and my family, if you.

[Paul Mark Morris]

Have a need to, to buy real estate, meaning, like, you're renting, let's just say you're renting and you come to me and say, is now a good time to buy real estate? I would say now's a, a great time to look for deals. And every single market is slightly different. Like the Fed just dropped their, their rates and they're anticipating that the Fed, the Fed's going to drop their rates again maybe once this year, as many as two or three times next year. There are people waiting till those rates drop. And that. I'll tell you why that doesn't make sense. Because when the, when rates are low and the market's hot, then I have clients. Yeah, I have clients and people, they've now missed their seventh home. You know, they got outbid and they're waiting for a time when their offer would be looked at. So if you can afford to buy your own home, then every market is a great market. That doesn't mean that every deal is a great deal. You can make a bad buy in every market, and you can make a phenomenal buy in every market.

[Co-host or Interviewer]

Okay, I want to debate with you, please, renting versus buying. Should we do it now or should we get to Your three rules.

[Paul Mark Morris]

Whatever you want to do.

[Nicole Lapin]

Let's go through your three rules, okay?

[Co-host or Interviewer]

And then let's get into it. So rule number one, if you're investing in real estate, which is different. Investing in real estate is different than buying your primary house.

[Paul Mark Morris]

It is and it isn't. I use an investor mindset when I buy my own house. I had a podcast on how I made a million dollars a day I closed on my own house.

[Co-host or Interviewer]

So how did you make a million dollars the day you closed?

[Paul Mark Morris]

Well, so one of the myths is that in order to, you know, get a steal or a great deal, it's got to be off market. You know, you've got to steal it from somebody. You've got to. Whatever.

[Co-host or Interviewer]

Those deals are always more expensive, though.

[Paul Mark Morris]

People are always looking for them. You know, they're like, oh, you know, if it's on the market. So. So I'll just give you the example of. Of my house. My house is at. It is at a luxury price point, and it was a poorly done flip. Okay. What it meant in. In real terms for this house, and I'll just go ahead and tell you the numbers. The house was listed at 4.75 million. It was at the top of the market. This is when anything that was, like, halfway decent was in multiple offers. 4.75 million is all. Was already low for this. That's why they priced it that way. And it just sat there. I looked at it, and there were enduring qualities. The enduring qualities are magical views. 5,000 square feet, all on one level. It had a beautiful infinity pool that was, like, carved into the edge of the mountainside. I'm painting a very nice picture, right?

[Co-host or Interviewer]

Gorgeous.

[Paul Mark Morris]

Wow.

[Co-host or Interviewer]

Coming over. Sounds stunning.

[Paul Mark Morris]

And you go in, and there are. I. I think it's not an exaggeration. 100 overhead LED lights of the cheapest brand possible. And there's not a dimmer in the whole house. So you go in and you turn on the lights, and it's like. You're like. You're like in a surgical theater. You know, it's interrogation rooms. It's like, that's bad. And then there just. There was just so much wrong with the house. Visible flaws and things that chase people away, that if you do a little bit of work or a little bit of due diligence that you can. You can work around. And the bottom line is I ended up paying 4.65 million for it. And just do the math. It's 5,000 square feet. And I brought a whole team in to inspect everything. And Then had a contractor who I trusted and said, you know, how much is it going to cost to fix all this stuff? And the answer came back, you know, well, under $200,000. So let's redo that math. 4.65 million in with everything screwed up and $200,000 to fix it. Now we're at 4.8.

[Co-host or Interviewer]

It's never what they suggest, you know, is over. Time over.

[Paul Mark Morris]

You know what? I did it in a way that I was like, tell me if you think it costs 20 grand to fix it, tell me 40. I don't want to undershoot it, just overshoot it. And the number came at 200 grand. And the easy math is 4.65 plus 200. Now you're at 4.85 with all the stuff fixed. And then I went to a great realtor, Even though I'm in that business, I went to a great realtor who specializes in the area. And he knew the house, he knew the view, and he just said, there's. There's nothing. You cannot touch anything with that kind of a view for under $1200 a square foot. So that math is $6 million. So for 4.85, I'm getting $6 million worth of house. And that, by the way, was in one of the hottest markets. That's when it was buy, buy, buy. And I was still able to get essentially that steal. It wasn't a steal because guess what? It was already. It had been on the market, which means it. Every end user, every investor had already seen this place and passed on it. And being able to see through that with the help of experts to. Because I'm not an H Vac guy, you don't need to be any of this stuff. You know, just get the right people, get the right information, make an informed decision. And that's how I gained a million dollars equity at the close of escrow.

[Co-host or Interviewer]

Okay, well, we're definitely having a party at your house. But for somebody who isn't looking for a $5 million deal.

[Paul Mark Morris]

Correct.

[Co-host or Interviewer]

Come back to earth and say, you know, we're out there, we're looking for a place. The number one rule you have is by where you know, by what you know. So explain that. Let's say you are, though, in a really expensive market like L A or New York. And you know that, but you can't afford that, right?

[Paul Mark Morris]

Buying buy where, you know, make sure it's value add and make sure it cash flows. So, and the other thing, just like you said, come back to earth on the five Million dollar house. I just want to say that that math works exactly for a $500,000 house. So you buy the $465,000 house that has $30,000 worth of bad stuff. You can do a lot for 30 grand. And now you're at, now you're at 500 grand and it's worth 600. So the math works at $500,000. I'm originally from Pittsburgh and that's where I found that math. So one of the things that people find, you know, interesting or, or surprising is that I've been, I've been investing in real estate for 30 years and I've never lost money in a single deal. And I've done that by following the three rules that you're referring to. And the first one is buy where you know. And to answer your other great question of okay, well, you know, geez, I live in la, which is where I know. So like, shouldn't I be buying in Detroit where I heard it's cheap, or where you know, whatever. And my answer is, first of all, if you don't own a home, and this is where we're getting back to investing versus your personal residence, the best place to start building wealth by far is in your own home. And the reason why is there are loans and products, loan products available to you for your own home that do not exist for investors. So you have to check the box that says, yes, I'm owner occupy. And then there are programs that like, kick the door wide open.

[Co-host or Interviewer]

You mean lower interest rates for first.

[Paul Mark Morris]

Time home buyers and much, much, much lower down payment for starters.

[Co-host or Interviewer]

I'm not sure if that's the best move for everybody, but we can debate it in a moment. Let's put a pin in it. Let's go back to number two. So make sure it's value add.

[Paul Mark Morris]

So buy the worst house in the best neighborhood is a great North Star. And the only reason why I deviate from that is because of where we live. Like, okay, so you're gonna buy the worst house in Beverly Hills. Like, sorry, I can't afford that. That's not going to work. It's still a great idea. It just doesn't work in a very high priced area. So instead of buying the worst house in the best neighborhood, what I'm buying is, you know, close to the worst house in an area that I know is up and coming. And I know it's up and coming when you know, about 25% of the houses are, are done. There are other signals I use as a signal you know, are there cool coffee shops coming in? Are there vintage shops? Or just like, the cool stuff is coming in? And then you just know that it's starting. You know that it's starting to turn. Because if you buy too early, which I've done that too, like, I know this neighborhood is going to change, and you want to catch it early, and you buy too early. You just never know. Like, it could take forever. So you have to, like, miss the best buys and wait till it's already starting to turn. And then everybody in the neighborhood is like, did you see that place? Like, that is crazy what that sold for. But when it's only like 20 to 25% redone, you're already paying more than the people that first got in. But you know that that train is moving, which is important.

[Co-host or Interviewer]

You're following the cool kids.

[Paul Mark Morris]

You. You are following the cool kids. Couldn't have said it better.

[Co-host or Interviewer]

So the third one is look for cash flows. That still applies for your primary house.

[Paul Mark Morris]

Yeah. So when you're doing it for your own home, it's buy where you know, buy the value add and then know that you can afford the payment. And so if you can afford the payment, that's the same exact thing as it cash flowing. So if I'm paying, you know, sixteen hundred dollars in rent and, you know, I look at the mortgage payment, I'm like, yeah, but the mortgage payment's going to be two grand. That's more. But I can't afford it.

[Co-host or Interviewer]

And a 1031 exchange, very sexy on Tik Tok right now. Yeah, I do hear a lot of people talk about it with their primary house, but it's intended for investment properties.

[Paul Mark Morris]

Sure.

[Co-host or Interviewer]

Can you explain?

[Paul Mark Morris]

So, you know, 1031 is really about pay taxes now or pay taxes later. And. And if you can delay taxes, that's always a good thing because, you know, again, I'd use very, very simple math. And let's say we got into an investment property and it was $700,000, and we put $300,000 in to make it great. And, you know, the rents went up and we waited a while, and now it's worth $2 million. Okay. So if we sold it, we would have to pay taxes on that $1 million gain. And that would come out right now. And then we would have, let's say, you know, whatever depends on what state you're in and that sort of thing. But let's just say now we have one and a half million to invest instead of two million to invest. If you 1031, exchange it. You can delay the taxes and then you invest the whole $2 million into a new property so you have more to invest. And if you do that, over time, your your money will just grow much faster.

[Nicole Lapin]

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[Nicole Lapin]

And now for some more money rehab.

[Co-host or Interviewer]

Okay, let's get into it.

[Paul Mark Morris]

Yes, you say, argue with me that.

[Co-host or Interviewer]

Buying is almost always better than renting. A big pro for that is that people say renting is throwing away money.

[Paul Mark Morris]

Sure.

[Co-host or Interviewer]

And buying is not. I'm sure that's one of your arguments.

[Paul Mark Morris]

Of course. And you're making the. You're making the landlord wealthy. You're not making yourself wealthy. Also, there are tax benefits. I didn't create the tax laws, but there are massive tax benefits to owning property.

[Co-host or Interviewer]

I think the idea that renting is throwing away money is just incorrect. It buys you flexibility. It buys you safety. It buys you optionality buys shelter. I mean, nobody says I'm throwing away money because I'm buying groceries or health care. I think There is a cost, cost of living, period. There's a lot that you don't get back from homeownership either. You don't get back closing costs, you don't get property taxes, you don't get back the insurance premiums that you paid. And yes, you might get a tax write off, but that's making the biggest financial decision of your life based on a write off. It's like the tax tail wagging the dog.

[Paul Mark Morris]

Somebody's paying insurance. And so if the landlord's paying insurance, they cannot pay their insurance unless they're charging you for their insurance. Somebody is paying that property tax or.

[Co-host or Interviewer]

Homeowners association fees, if that makes sense. Or repairs. These are things that you never ever get back.

[Paul Mark Morris]

It goes into the value of the, of the property. The reason why apartment building owners are, are the secret millionaires or multimillionaires is because it, it's, it's worked for them and has always worked for them. I see people lose money in real estate and the people that lose money in real estate are people that get over leveraged like you said. I agree with you. Accept that if you can afford to pay, if you can afford to pay the mortgage just like you have, if you can't pay your rent, you're eventually going to get thrown out. And so if you can afford to pay your mortgage, then you're good to go. And over time the, the payment that you're making is almost all interest in the beginning. And then it starts to change. You're paying down principal over time, you're building your own war chest.

[Co-host or Interviewer]

But we can agree that in the short term it doesn't make sense because there's a five to seven year break even period. Right. So if you're not sure you're staying there as your primary home, it doesn't make sense because you're spending so much in interest, especially in the beginning. We can do some easy math if you would like.

[Paul Mark Morris]

Sure.

[Co-host or Interviewer]

Let's say you buy a five hundred thousand dollar starter home, okay. And you think you're gonna get a bigger, better place in five to seven years, you put 20 down, okay? So you put 100k down and after five years you've spent 133,000 just on interest and only 26k on principal.

[Paul Mark Morris]

Okay.

[Co-host or Interviewer]

If you took that hundred grand and you put it in the market Instead, you'd have 160 grand. So the real cost is an opportunity cost, especially in the short term.

[Paul Mark Morris]

I would want to ask you where is the value of the house during that, during that period of time and that you might say is market dependent. And I would say to you that if you bought it the way I talked about buying it, it's not, it's more dependent on the value you add than the market.

[Co-host or Interviewer]

But I love over time, looking at big data sets. Yeah, over time. I mean, that's the only way to make this comparison. Right. So over time, real estate has yielded on average, I know it's very market specific and your properties are special, but 4.5% a year. Over time, the S&P 500 has yielded 10%.

[Nicole Lapin]

So if you're looking at an apples.

[Co-host or Interviewer]

To apples comparison, you're going to make more if you take that money and you invest in the stock market. So if you invest that 100k and never put another dollar in your investment account over that 30 year mortgage, you'd have $1.7 million on a $500,000 house. With the interest, you're spending close to $1 million for that house. So it has to grow a lot and oftentimes it doesn't.

[Paul Mark Morris]

And so you want me to answer that? Is that a statement or is that.

[Co-host or Interviewer]

A question I'd love for you to answer?

[Paul Mark Morris]

It's like, you know, a national, a national weather forecast. Let's say we're going to plan your, we're going to plan your wedding, we're going to plan your, you know, big celebration and you're going to like look at a national weather forecast. It doesn't, it doesn't make any sense. You got to look at the micro market.

[Co-host or Interviewer]

So let's talk about a specific area. We pulled the numbers for LA and a lot of metro areas for comparable homes, rent is 30 to 40% lower than a mortgage payment. So in LA right now the median rent $3,000 versus a mortgage, $5,000. So we talked about the opportunity cost. If you invested just the down payment and never put in another dollar, you would still beat the return on an average home. But let's say you added that delta of what you're saving on your rent versus a mortgage and all of those costs that you never get back. So $2,000 a month with no down payment. You would have $4 million at the end of 30 years if you signed up for a 30 year mortgage. If you did both, you'd have $5.7 million. If you took the $100,000 down payment and the $2,000 that you're saving every month by renting and not buying, then you would make almost six times as much money as you would have spent buying.

[Nicole Lapin]

What do we say to that?

[Paul Mark Morris]

Well, again, every single property is its own stock market. The market exists inside of that. I don't know what stock you could possibly. You would have to have a crystal ball to pick a stock where by the way, and I did take a loan out on the $4.65 million house. And the amount of money that I put down was $400,000. And when I closed escrow, I was plus a million in a market that was difficult to buy into. And so you're at 250% gain if.

[Co-host or Interviewer]

Somebody will spend that. I mean ultimately a property is of.

[Paul Mark Morris]

Course valuable as somebody of course spend on it. I, I got a call while I was in escrow and someone said I'll pay you a million dollars more for the, for the house. And I had already like sold the Santa Monica house. You know, a million dollars sounds great. And then I had already sold the Santa Monica house and then it's a short term gain. I'd have to pay like 52% tax. So. Okay, so I'm going to walk with $480,000 cash. That still sounds great. And where am I going to go? You know, in, in one of the hottest markets, I would have to like move out of town in order to do that. So I hear what you're saying and I, I respect people that have, you know, this phenomenal stock market knowledge. The thing that I love about real estate investing is it's when you invest in the S and P, you're a passenger in somebody else's car. Okay, I wouldn't even say that you're, you're riding, you know, in the backseat of the bus of somebody else's bus. And there's drivers and there's, you've got no control of what's going on. And when you buy a piece of real estate, you can find out, I believe, more about that piece of real estate, especially if you have local knowledge like, hey, I live here. I know what you know, what the area is doing, what it's not doing. Now you throw in $600 for a home inspector that's going to like go through every single thing. You're going to know more about that house, that one single purchase than you know, I believe, than anyone could possibly know about, about a stock. How are you going to know?

[Co-host or Interviewer]

I definitely don't have a crystal ball for sure. But over time, the s and P500 so the overall index has yielded 7 to 10% over time. I'm definitely not in the driver's seat there. But historically it allows me to diversify. So renting I don't believe is throwing away money. It's buying you the option to invest elsewhere where you can also have potentially higher returns and your risk is spread out. I thought I was in the driver's seat of my house until it burned down.

[Paul Mark Morris]

Tragic. And hopefully you had, you know, insurance too.

[Co-host or Interviewer]

But insurance premiums are through the roof too. And it's really hard to even get an insurance policy.

[Paul Mark Morris]

That's correct. Every one of these things creates opportunity.

[Co-host or Interviewer]

Well, I think it's just important to remember that homeowners don't just pay a mortgage. They pay.

[Paul Mark Morris]

Sure.

[Co-host or Interviewer]

Insurance if they can get it in some areas, property tax, repairs, you know, and renters skip a lot of that.

[Paul Mark Morris]

So somebody's paying that though, the landlord is paying that. And that is going to be reflected.

[Co-host or Interviewer]

In your rent and make sure that it's worth whatever you're missing out on. 10%, potentially compounding in the market.

[Paul Mark Morris]

We're going to still be friends after this. Are we going to friends after this?

[Nicole Lapin]

Absolutely.

[Co-host or Interviewer]

I think it's just really important to not take anything for gospel. I don't think it's one size fits all for anybody when it comes to financial moves, whether in real estate, in the market, in anything. So this idea that buying a home is for everybody is not true because not everything is for everybody. And flexibility, especially if you're moving around, is really, really important.

[Paul Mark Morris]

Sure.

[Co-host or Interviewer]

Sometimes is not emphasized that five to seven years of break even, period. Yeah, you're, you're not going to even make the money back in that if you sell before that time.

[Paul Mark Morris]

And I, I have a client that was interested in a certain area. I saw this house that was great. And I'm like, let's take a look at this house. And he's like, oh, you know exactly what I like. This is amazing. And the guy has lots and lots of money. This would be a small buy for him, small risk. And he was very close to, to buying. And I said, let me ask you this, do you know, are you going to still be in L. A in the next three to five years? And he said, you know what, I really don't know. I put it like a 50% chance. And I looked at him and said, you know what? I can't guarantee you that if you came back to me to sell this house in three or four years that we could even get the money that you put into it. And that caused him not to buy. So I'm in agreement with you. Chug it out. I found a place to agree. This is good.

[Co-host or Interviewer]

Before we go, can you sell me this pen?

[Paul Mark Morris]

Yes. Let's go. So let me ask you, what. What are you going to use the pen for?

[Co-host or Interviewer]

Signing books.

[Paul Mark Morris]

I love it. Would a gel pen be great then, for signing books?

[Co-host or Interviewer]

Like a smooth pen to make it easier handwriting look better than it is.

[Paul Mark Morris]

Okay. And also when you're signing a bunch of books, the other thing that happens, like that smudge thing.

[Co-host or Interviewer]

I hate the smudge thing.

[Paul Mark Morris]

Right.

[Nicole Lapin]

I. I do.

[Co-host or Interviewer]

Like a Sharpie.

[Paul Mark Morris]

Okay.

[Co-host or Interviewer]

I am a Sharpie lady.

[Paul Mark Morris]

Okay.

[Co-host or Interviewer]

Books.

[Paul Mark Morris]

And it's not too. It's not too fat.

[Co-host or Interviewer]

It's a little fat. I can't write as many things as.

[Paul Mark Morris]

Okay, so if we find you a pen that's going to be permanent. So it doesn't. So it doesn't smudge because then at the end of the thing, you're like, you got the ink all over your hand and blah, blah, blah, it's like all spread out. Okay, so. So gel pen works a non smudge. And is there anything else about the pen? Like, how about like, you know, nice weight to it or whatever? It's like balanced weight.

[Co-host or Interviewer]

Yeah, balanced rate, not too heavy, but something that I could sign a lot of books with.

[Paul Mark Morris]

Right.

[Co-host or Interviewer]

But that feels like I'm excited to use it or.

[Paul Mark Morris]

Great.

[Co-host or Interviewer]

People would notice.

[Paul Mark Morris]

Great. Okay. So why not? Yeah. And so you don't. You don't want like the average Bic pen because you're like, what's that? This is a special moment for me. I'm getting. I'm getting my little amount of time with Nicole and this book, and this is really special to me. And she's got like the Bic pen out. We don't want that. Right. Okay. And then do you want like the super fancy over the top? Like.

[Co-host or Interviewer]

No, because what if I lose it?

[Paul Mark Morris]

Okay. Yeah, right. I know. And I lose the pen. I've had Mont Blanc pens. Like, I'm like, I lost the pen. I hate myself. So that's why you shouldn't have the pen. Right. There's the answer. Right, Exactly. Okay, so actually, so let me ask you if I were able to deliver to you a pen that is. That's gel, permanent, won't smudge all over your hands, has sort of a luxury feel to it. Has. That creates that special moment. But yet you know you're not going to shoot yourself if you lose it. Is that. Would you say yes to that?

[Co-host or Interviewer]

Yes.

[Paul Mark Morris]

Okay, then it looks like we have a deal, because this is. You've described Exactly. This pen, I think it's. It might be $100, like $80. So it's not like. I don't know. I don't even know what a Mont Blanc cost, but like a couple hundred dollars. And then they're fountain pens and they run all over the place. But this is. Yeah, this is a good. And then when you put the top on it. Well, here, I'll let you hold it and see what you think about the weight. Oh, right. Now maybe you want to take a test drive. See, I think you like that pen.

[Co-host or Interviewer]

I like the pen. And I'll tell you why. Because you asked me what I was looking for instead of just actually selling a pen.

[Paul Mark Morris]

Selling creates opposition, and convincing creates opposition. So to sell effectively, to sell very effectively, you want to give somebody what they actually want. And there's no way to figure that out without asking the questions. So, you know, when I'm asking the questions, like, what about the pen is important to you? And then you said, that's just. You said, non smudge. Or. I said, does that make a difference? Because I know something about book signing. You're like, yeah, oh, yeah, the smudge is terrible. So I would write down not. Not an interpretation of what you said, but I would write down the exact words that you used and repeat it back and repeat it back. And it's not. It's not just like sales, you know, manipulation or whatever it is that the person's going to feel heard. And then when you're in a position of selling something, someone is going to believe a small fraction of what you say. However, people tend to believe everything they say. So. And I'll give you an example in. In my business, which is the brokerage business. And so if I were meeting with your friend John and he were. I know he moved, but I think he was at. What. It doesn't matter. He's at Firm X. Okay. I know that Firm X does nothing to help him with his business. And if I go, oh, John, you're such a great realtor, you do such a great job, and you're with Firm X, they just don't do anything for you. I know that it creates this opposition. And then he wants to tell me all the things that they do for him, even though they don't actually do it. So instead I say, wow, you're a great realtor, which is true. And you're a great businessman. That's also true of John. And I'm just curious, what do they do to help you grow your business at Firm X? And every single time he's like, they do absolutely nothing. So them saying you allow them to say it. So as I'm writing all these things down, I'm getting your requirements. And let's say there's requirements. 1, 2, 3, 4, 5. And I've written down exactly what you said. I said like, okay, so to be clear, what you want in a pen is you want it to be non smudge. You want it to be. Have to be special. You also would like it to be not overly expensive so you don't have to worry about losing it. You want it to have some weight, so, so it writes nicely, and you want it to be special enough to create the moment. I'm not sure that I can get you a pen that meets all of those needs, but I. But I want to know if I am able to meet all of those needs. Are you going to buy the pen? And you could answer a myriad of things including like, well, no, you know, I'm still going to have to think about it. And then I'll just say, okay, well, then we, you know, we're not really having a business conversation. That's fine. We don't have to have a business conversation. But I'm trying to find the things that, that you need in order to make this deal. And then I'm going to go run around and try and make it happen. But I know that you respect my time. I respect your time. I'm not going to run. I don't want to run around and try and make all this stuff happen unless I know that we have a deal. If I'm able to provide these things to you. And that's the conditional close. And when I didn't do it, there was one specific instance where, you know, it was a very important recruit for me. And she asked me for like six things, and I could only give her five of them. And I said, look, if I were able to do these five with that, da da, da, da da. And then when we got to the meeting, I was with a business partner who, you know, it wasn't his fault because I, I should have briefed him first. And he just threw the offer letter out on the table to her. And she looked at the offer letter and said, oh, okay, well, I'll have to like, take this home and think about it. And, and it. It never happened. And I feel certain that if I had said, hey, should I, should I love this woman too? I should. I'm gonna name drop her. Okay, It's Sharona. Who the. The song My Sharona is written after. And she and I are.

[Co-host or Interviewer]

That's a real woman.

[Paul Mark Morris]

Yeah, it's a real woman. I love her. She's. I hope she loves me as much as I love her. She's funny, she's sarcastic. You know, she brought her dad to the meeting. This was the closing meeting. And I know that if I would have said, hey, Sharona, you asked me for six things and I need to know that if I'm able to deliver these five. Are you a yes? That she would have said, well, yeah, if you can do this and that and the other thing. Well, and yeah, yeah, I am a yes if you can deliver that and be like, okay, great, so that's. Let's go, let's shake on it. And I think she would have, she would have joined my firm.

[Co-host or Interviewer]

So make it about the person and not the product.

[Paul Mark Morris]

It has to be. Yeah, yeah. Well, if there's a product involved, then you want to relate, you want to relate the product to that person's needs and how does this product serve that person's needs. And also there may be aspects of the product that do not serve the person's needs. And then you want to know, like, okay, so I'm not going to change the product. Is that, do we have enough of your needs in order to satisfy it? And if you really take that open minded approach, it's not like, I mean, I had to. There was one sales guy on Instagram that I actually blocked him because it was like ruining my mojo because he was like screaming at people and all this stuff. I'm just like, oh, you know, it. That works. Because doing something with a lot of energy as opposed to doing nothing is always going to do, is always going to work. But that, but ultimately I don't want anybody to buy anything that they don't want that's not going to serve them. And I think at the end of the day, you do better as a salesperson by, by meeting people's needs.

[Nicole Lapin]

Money Rehab is a production of Money News Network. I'm your host, Nicole Lapin. Money Rehab's executive producer is Morgan Lavoy. Our researcher is Emily Holmes. Do you need some Money Rehab? And let's be honest, we all do. So email us your money questions moneyrehaboneynewsnetwork.com to potentially have your questions answered on the show or even have a one on one intervention with me. And follow us on Instagramoneynews and TikTok, MoneyNewsNetwork for exclusive video content. And lastly, thank you.

[Co-host or Interviewer]

No, seriously, thank you.

[Nicole Lapin]

Thank you for listening and for investing in yourself, which is the most important investment you can make.