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Housing Expert: Do Not Buy A Home Until You’ve Watched This! | Jason Oppenheim
01:54:56
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- [00:00]
Jason Oppenheim
So my family's been in real estate for five generations. I started the Oppenheim Group real estate brokerage. Done about four to five billion dollars in transaction volume. So I feel like my experience helps me to see what comes next.
- [00:12]
Graham Stephan
People are arguing now that we're in a real estate bubble.
- [00:15]
Jason Oppenheim
We've had arguably the worst three years ever in real estate. Interest rates keep climbing. Volume is at a historic low. When I say historic low, I mean 50, 60 years.
- [00:25]
Graham Stephan
Do you think buying a home is worth it at today's prices?
- [00:28]
Jason Oppenheim
All these areas that blew up, Miami, Austin, Las Vegas, Nashville. I wouldn't get near those places.
- [00:35]
Jack
Do you think California is doomed?
- [00:36]
Jason Oppenheim
When any one party gets too much control, they veer off track. California's veered off track because it's been dominated too long by people that don't have any pushback. And there's really no debate. We spent $24 billion over the last eight years, and the problem's gotten about 40 to 50% worse.
- [00:54]
Jack
So what's your investing philosophy for 2025 and 2026? What are you doing?
- [00:59]
Jason Oppenheim
People overanalyze. It's pretty common sense right now in.
- [01:07]
Graham Stephan
Terms of the real estate market. People are arguing now that we're in a real estate bubble. What are your thoughts on this?
- [01:12]
Jason Oppenheim
Hmm. I vociferously disagree. Who the hell says that?
- [01:18]
Graham Stephan
Everyone on Twitter.
- [01:19]
Jason Oppenheim
That's so dumb. There's a lot of dumb on Twitter.
- [01:23]
Jack
So you're saying that sales and everything, they're still continuing to try.
- [01:26]
Jason Oppenheim
We're at. You mean a real estate bubble? Like, like. Like it's high, it's going to crash?
- [01:30]
Graham Stephan
Yes.
- [01:31]
Jason Oppenheim
I mean, that's the opposite. We've been. We've been coming down. Prices have been coming down, and volume's been coming down for. Since 20. Late 2021, early 2022. We've had some of the three years in real estate. I'm at. I've had some tough years. I mean, it's all relative. But no, the last three years have been really tough because interest rates have been high, volume is at a historic low. When I say historic low, I mean 50, 60 years since volume's been this low. So very, very historic. In terms of the decrease in volume, prices have come down. I mean, I don't want to speak. I'm not an expert nationally, but nationally, prices are not in a bubble. Big cities post Covid have had a difficult time, L.A. new York, you know, some cities in the. In, like Miami and Austin and Las Vegas and Scottsdale and, you know, the big kind Of. I mean, it's not a political thing, but the big cities in the Democratic states have done terribly and kind of the more, you know, red cities, so to speak, like Miami that, you know, they have. That's in a red state, they have a pretty moderate governance, have done a lot better because they're low taxation, tough on crime. And a lot of people left the big cities during COVID and went to pla, like, went to those kind of tertiary areas, like in Texas, Miami.
- [02:53]
Jack
Do you think that.
- [02:53]
Jason Oppenheim
And here, too.
- [02:54]
Jack
Do you think that's due to policy, or do you think that's just due to the nature of a big city being already dense housing?
- [02:59]
Jason Oppenheim
No, it's due to policy. It's due to policy.
- [03:02]
Jack
So what big cities?
- [03:03]
Jason Oppenheim
So the big. The big cities that had the most draconian COVID policies. I'll use Los Angeles an example, because I live there. They had arguably the most kind of, you know, draconian and tough policies in the country. They were. The last place in the lausd, was the last school district in the United States to open back up. We restricted our economy so significantly and we let out so many people from jails that a lot of people left. That started it. That started the frustration. Then homelessness kind of blew up. Covid caused tremendous homelessness in Los Angeles. And there's no restrictions on that. It's not really enforced. So it was just. It was a pretty difficult couple of years in la. We've turned the corner. We're getting a little bit better. But it definitely is Paul policies. I'm not generally political. I consider myself pretty centrist, but I feel like I call a spade a spade. You know, I've been a Democrat most of my life. I'm really independent now. But the truth is, Democratic policies have been extremely difficult for large cities. The mansion tax is another one. I mean, the mansion tax.
- [04:08]
Graham Stephan
Explain that for people unfamiliar with that.
- [04:10]
Jason Oppenheim
So Los Angeles put a T. And by the way, I can totally see how that tax passed. It's a mansion tax on wealthy people, you know, charging 6% on any sale over 10 million or 5% on any sale over 5 million. You know, it sounds good. I would. A few years ago, I would have voted for it. Right. Because I didn't. You know, ostensibly it's like, oh, taxing the rich, you know, helping the homeless. Great. I mean, who's not going to vote for that? The problem is, is that it creates so much friction. Now we have sales down about 70% above 5 million. So it just, It's. It's Decimated the sales volume, which restricts property taxes. UCLA just came out with a study basically coming out. And by the way, UCLA public policy is one of the most liberal. They actually argued for the mansion tax and then they had to come out and say, listen, we, we were wrong. Essentially the mansion tax has been terrible.
- [05:02]
Jack
Explain the mansion tax. What exactly is that?
- [05:04]
Jason Oppenheim
Sorry. So anytime a property sales, let's say you own a property, you buy it. Let's say you buy a property for five million dollars and you sell it for five and a half million dollars. You know, a few years later you have to pay 5% of that to the city. So that's, you know, 200, whatever, $75,000.
- [05:24]
Graham Stephan
Or something like that on the entire amount, regardless of whether or not you make a profit. So you could buy it 5 million, hold it a few years, sell it for 5 million. Well, no, sell it for 5 million and still have to pay the tax.
- [05:35]
Jason Oppenheim
What's actually happening is, yeah, people are, people are bought a house for, let's say, six and a half million dollars three, four years ago, it's worth six today. Perfect example. I had a client buy a house for 7.2 million, sold it for 6, 5. He lost $700,000, then had to pay the city 300 and then commission. So he lost like a mil too. He'll never buy. He doesn't want to buy an LA again, he wants to move out. So the mansion tax was very difficult. Another study, I don't want to get into too much into studies about the mansion tax, but it's costing the city and the state in terms of taxation from the economic loss from property tax values, not resetting about 2 to $3 for every dollar that it raises. It also has only raised 20% as much as it promised. It's been absolute, an absolute failure.
- [06:21]
Jack
So why do they not just reverse it then?
- [06:23]
Jason Oppenheim
Well, it may or may not be on the ballot. There have been a lot of lawsuits. The courts rejected it. It was on the ballot last year. The Supreme Court kicked it off the ballot. It's also really hard to put a ballot initiative on saying let's repeal a mansion tax. When's the last time a liberal city voted to remove a tax? I don't know if it's ever happened in any city. It's not going to happen in la. Once the tax is in place, it's really, really, really hard to remove.
- [06:48]
Jack
What gives you the credentials to be able to talk about all of these stuff if you were to list off your accolades?
- [06:55]
Jason Oppenheim
Honestly, this one's common sense. Anyone with common sense can see it's true. I mean, you can read the studies. I mean, the LA Times has run a very liberal publication, has come out, you know, with numerous articles the last few months just saying that it's been an abject failure. It's the mansion, taxes, common sense. I don't think anyone could argue that it did what it was supposed to do.
- [07:16]
Graham Stephan
Now, what about for real estate overall, though?
- [07:18]
Jason Oppenheim
So my family's been in real estate for five generations in Los Angeles since the late 1800s. I have a background as an attorney. I went to Berkeley for undergrad in law school and then was an attorney in Los Angeles for many years. Started the Oppenheim Group, real estate brokerage. I have a hundred agents now. Three different offices, San Diego, Newport beach and Los Angeles and Cabo. So four different offices done about 4 to 5 billion dollars in transaction volume, probably 5 or 600 sales. And I'm, you know, consider myself someone who has critical thinking skills and common sense. So I like to apply that to, to what I talk about.
- [07:52]
Graham Stephan
And what do you say to people who say you have a bias, pro real estate because of what you do and your income is tied to real estate doing well or high transaction volume?
- [08:01]
Jason Oppenheim
Yeah, I mean, I think that's fair. I obviously want there to be high transaction volume. I'm pro economic growth. I mean, who isn't? So I want real estate to succeed. I don't know who doesn't, uh, but it. But I'm also not a fluff guy. Anyone who's ever listened to me talk, you guys certainly probably know. I just don't. I just tell it like it is. I don't have. I just like to be honest and direct. So when real estate's not going well, I wouldn't even buy. I mean, perfect example, I'm not even sure I would buy a luxury property in Los Angeles right now. And that's against my financial interest to say that. But yeah, until Los Angeles cleans up its policies, fixes its homeless problem, fixes its crime problem, fixes its taxation problem, you know, until I start seeing some positive signs, I wouldn't be investing in Los Angeles.
- [08:51]
Graham Stephan
Why is the homeless problem getting so bad specifically for Los Angeles?
- [08:55]
Jason Oppenheim
So the, the homeless problem has gotten a little bit better the last couple of years. I mean, it probably was at its worst in 2022, 2023. It's gotten a little bit better. Not because of it, I don't think because of any policies, because I think our policies are terrible, but just because it got so bad, just like crime and homelessness got so bad after post Covid that of course it's going to be, it's going to, you know, revert. What does it regress to the mean? Revert to the mean. And it has, but it's still significantly worse than it was in 2018, 2019. We're about 40, I think 40% more homeless now. We spent $24 billion trying to fix the problem over the last, I think eight years and the problem's gotten about 40 to 50% worse.
- [09:36]
Jack
So how much value in homes have you sold in the city of Los Angeles?
- [09:41]
Jason Oppenheim
3 billion. Maybe 3 billion. 5 billion total and maybe 3 billion in LA.
- [09:45]
Jack
And how long have you lived in LA?
- [09:46]
Jason Oppenheim
20 years.
- [09:48]
Jack
Do you think LA is still a good place to live?
- [09:50]
Jason Oppenheim
LA is still my favorite city in the world. I mean, and I've been to a lot of different cities. I think hands down LA is the best city, mostly because of the weather. But the frustration I have with LA is that it has so much more potential. It was, LA was a better city five years ago. Significantly better city. Nightlife was exceptional, restaurants were exceptional, businesses were coming in. There was a vibrance in the city. The movie industry was doing really well. The homeless problem was under control. Crime was not rampant. There was a sense of optimism in Los Angeles five years ago. Now a lot of that's gone. It's still my favorite city, although I do honestly spend a lot more time Newport beach than I, than I used to and traveling. So I'm not as just optimistic on Los Angeles as I once was. But it, it still remains my favorite city.
- [10:38]
Jack
So what would you say are the main three things that caused Los Angeles to go from, you know, the great city that it once was five years ago to, in your opinion, still the best city, but much worse now?
- [10:47]
Jason Oppenheim
Yeah, good question. I pretty simple answer. A lack of crime enforcement and that's through a myriad of different things. Like they got rid of cash, bail, they let criminals. I mean, I had my house broken into, I had my, my car broken into. Those guys get out like a day later. I mean there's just. Now we have a new district attorney that is changing things, but let's see how that goes. We also have our lowest number of cops that I think we've had in decades. Per capita, we have our lowest number.
- [11:19]
Jack
Is that due to the defund, the police initiative, or is it due to.
- [11:22]
Jason Oppenheim
Just like, and just a general difficulty in recruitment because there's been such a negative, you know, a negative connotation towards police officers that I think they have a very difficult time. So they have a lot of retirement and they're not replacing them. And we have a huge budget crisis so we don't have the money to be paying new officers. So yeah, we've been mismanaged. I mean financially mismanaged. I mean we have a billion dollar deficit, which for a city is massive.
- [11:44]
Jack
How does the city of Los Angeles have a billion dollar deficit when you guys have like the, the highest taxes across the entire country?
- [11:50]
Jason Oppenheim
Well, it's because most wealthy people, a lot of wealthy people have left. And so LA's answer unfortunately to every problem is an additional tax like the mansion tax. Instead of learning how to solve problems, they just tax more. And the problem is that used to work for a hundred years that worked. California was able to tax, Louisiana was able to tax and continue to increase taxes because people did not vote with their feet. They couldn't really leave. We were not as mobile as we are now. After Covid, everything changed. Now people are, I can't, I mean so many people are leaving. I've got, so I've got more clients that have left Los Angeles over just taxes alone in the last five years than in my entire, probably five times as many in the last five years than my entire career before that combined. And it's a big problem. So you don't get tax revenue up. Mansion tax is a perfect example. They thought it was going to raise a billion dollars a year. It raised about $300 million a year. So not even a third of what they expected because they assume that nothing's going to change and people every, except for the tax getting paid. That's not what happens. What happens is people leave. Developers are not building in Los Angeles. You don't see any multifamily construction which kind of is counterintuitive to solving the homeless problem. You don't see any investment. You don't see. So you don't see people hiring plumbers and electricians and you don't see properties trading. So that creates a, you know, economic disincentive and less revenue for the city and the state. So until they can figure out how to solve their problems without just trying to additionally tax. And I'm not philosophically against taxing the wealthy at all, but you can't tax someone a dollar and lose A$50 in economic activity. That just doesn't make sense.
- [13:37]
Jack
What I find interesting is they have this initiative to try to make it really easy to get expedited permits to add an adu to a property in Los Angeles. And so guess who sees that. And they calculate I'm going to get a great ROI if I go through this new thing that they just created because they're finally doing a right thing. To solve the homeless crisis, to solve the affordable housing crisis, is none other than the man sitting to the left of me, Graham.
- [14:00]
Jason Oppenheim
Fuck. Yeah. You did an ADU?
- [14:02]
Graham Stephan
Yeah.
- [14:03]
Jason Oppenheim
Not a lot of people have done ADUs.
- [14:05]
Graham Stephan
My gosh, it has been a nightmare.
- [14:07]
Jason Oppenheim
You working with the city, you mean?
- [14:08]
Graham Stephan
Yes, it has been an absolute night. So when I looked at this, I thought the cash on cash ROI was incredible. And it is. Going through the city of Los Angeles has been an absolute nightmare. Getting the city inspector, they don't want to inspect it goes straight to voicemail for days. And then on Fridays, when a tenant's supposed to move it on the Monday, they say, oh, actually, you know, I'm running late, we're going to cancel this. They don't want to work on the. On the Fridays anymore. And so then they reschedule it, and then they swap inspectors. They get a new inspector who is actually.
- [14:41]
Jason Oppenheim
He finds other new products.
- [14:42]
Graham Stephan
Yeah, we need sewer line cctv and you have to schedule it with one of our approved vendors. And the wait on that is one to two weeks. We already did the work. Here's a ct. No, no, we need from one of our inspectors. Oh, we did this months ago. Oh, you need a new one now.
- [14:58]
Jason Oppenheim
I did an ADU in one of my houses and I was getting past final. They sent a new inspector for the same reason. And he measured the tread difference in my spiral staircase, and he measured like six and a half, maybe seven inches. And it was supposed to be like a max of six and a half. And he told me I have to redo, like, my $10,000 spiral staircase. And it delayed everything, like a month. And then now I've got another client north of Los Angeles. He wants to do a movie. Get a movie theater permitted. And they're saying that any. Because he's doing work, he's too far away from a fire hydrant, so he has to bring in a fire hydrant. $120,000 to bring in this fire hydrant to do a movie theater. Like, no one's gonna do that. Like, there's no discretion, there's no common sense. It's too bureaucratic. When you build a new house now, they are requiring, like, this drainage system where you collect this water because, you know, I don't know, we need water conservation or something. Even though it's just a bucket basically. And it costs like $35,000 to install this. And so you know, you're trying to build something and an additional 35 grand. And then there's several of these requirements. People are like, why I don't want to build in LA anymore.
- [16:02]
Graham Stephan
Now, before we go into that, you got to ask yourself, what does the future hold for business? Because if you ask nine different experts, you, you're going to get 10 different answers from a bull market, a bear market, things are great, things are doomed forever. Be very helpful at this point to have a crystal ball.
- [16:17]
Jack
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- [16:48]
Graham Stephan
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- [17:17]
Jack
So does this seem like mostly a policy issue? Is it a culture issue where people just don't. The culture is you can't punish people. You know what I mean? Like, if someone does a bad job, you can't say, oh, you're fired, because if you fire someone, then it, you.
- [17:31]
Jason Oppenheim
Know, for some reason that's just a problem with government.
- [17:34]
Jack
Or is it a legal issue because you have so much, so many people lawyering up in the state of California and lawyers can just basically siphon the funds from anybody.
- [17:43]
Jason Oppenheim
Yeah.
- [17:44]
Jack
And just sue for anything.
- [17:45]
Jason Oppenheim
There's so many. I mean, I'm an attorney. I've been an attorney for 20 years actually. I don't know if my license is still active, but who cares? I'll still speak on it. So example, when I When I built my Newport beach office, we had to hire an ADA expert. You know, someone who comes and. And kind of guides you in terms of what you need to do to be ADA compliant. American with Disabilities act, which we're all for helping disabled people. Right. But we want to do it in an. In an efficient manner. They. What they. What he told me is that you'll have attorneys that have no clients. Like, no, no. No one within a disability will ever go, you know, has gone on the property, but they're allowed to just sue on behalf of the class. So they'll write, they'll come in, they'll sneak into your office, they'll pretend they're a client, whatever. They'll go in your bathroom. They'll measure the distance between, like, the toilet and the wall. Or they'll. In my case, there was a. They said that my back parking lot was, like, 2 degrees too sloped. And so they said I had to spend, like, $40,000 redoing my entire back. And then I. There wasn't this. There was a sidewalk, and then there was an entrance to the parking lot. And so the wheelchair would have to go, like, 10ft into, you know, and come back. And they said, no, you have to have a pathway right through. So I had to spend, like, another $15,000 cutting through, like, this retaining wall. Then I had to spend about $15,000 on an automated back door. You know, you're not allowed to go out and open the door. You have to have an automated door. So I, I spent about $70,000 to be 80A compliant, because I, They. They said lawyers will come in and they'll measure the slopeage, and they'll do all this stuff, and you'll get a. And then they'll sue you. I have not had anyone try to access my property in, you know, five years with a wheelchair. If they did, they would have been able to get on very easily. But I've spent $70,000 now. I personally think I would have preferred to put $70,000 into an account to help people get wheelchairs, to get prosthetic limbs, like, to actually help people with disabilities, as opposed to repaving a parking lot. That was fine in the first place. The. My landlord at. At. At Sunset Plaza had to spend $250,000 redoing his parking lot because of a slopage issue. That's not money well spent. That's just bureaucracy taking over. We're all for. I, I think many people are for helping other people. I'm for taxation. You know, if it's done intelligently. I'm for helping. I mean my mom's entire job was placing people with disabilities in, in job placement. I'm just for efficiency. We are doing. There's another example. There's a building that one of my clients lives in on Beverly. And the city required them to put middle income, low income housing, you know, in the building, even though the building is a building for billionaires. So it starts at $5 million, it goes up to $25 million. So the building has had a very difficult time selling units because a lot of people don't want to have low income in their building that they're spending $20 million on because they're paying an HOA of like $15,000 a month. And yet half the building's occupants, because a lot of these billionaires don't live there. So There may be 30 units for sale and maybe 10 units that are low income. But of those 30 units for sale, maybe only 10, five or six people live there full time. So it's actually a building more predominantly lived in by low income than by billionaires. And the low income pays zero hoa. So it's the city that, that subsidizes it. And yet you've got the bill, you know, the wealthy people paying 10, $15,000 a month for the pool, for the gym.
- [21:17]
Graham Stephan
Low income people get in that building to begin with.
- [21:19]
Jason Oppenheim
Just you have to lottery system or. Yeah, you have to not make a certain amount of money for like 10 years. So if you ever make too much money, you get kicked off the list. So.
- [21:28]
Graham Stephan
So theoretically someone could.
- [21:29]
Jack
Incentive is you can be living with billionaires if you continually try to make less.
- [21:32]
Jason Oppenheim
Well, and, and I'm getting 30 to.
- [21:35]
Graham Stephan
$50,000 a month in value of living in that building.
- [21:38]
Jason Oppenheim
Well, they're getting way more because there's, they're not paying any hoa. So they're. That's a hundred, that's fifty to a hundred thousand dollars just in free HOA amenities. And then they have valet. So for example, you know, the build, all the ex. All the building's amenities are accessible to everyone. So the low income obviously will have 24 hour valet and concierge and food brought up and pool, gym.
- [21:58]
Graham Stephan
So how do they get that for free when the person working 100 grand a year?
- [22:03]
Jason Oppenheim
The city requires the building to create like I think in this case it was 10 or 12 units that are low income. So the. Listen, I'm not even theoretically against this. Here's the problem though. The problem is the building is having A very difficult time selling the luxury units. So the building lost maybe 30 to $40 million in value because they lost so many potential buyers. So I think it would have been better for the building just to put in, let's say a few million dollars into a fund for low income housing. And then they go out and you buy a building that's for sale, you know, like an older building, and you get, with 150 units in it, and now you've housed 150 people instead of eight or 10 for, for $5 million instead of the building losing 30 or $40 million in sales. So it's just so inefficient. That's the problem with it. I don't mind the concept. I actually appreciate the concept. The problem is it's so unbelievably inefficient and how much money is lost and economic activity is lost and sales are lost to help, you know, 10 people when that money could be used.
- [23:08]
Graham Stephan
Speaking of that, I had a clip recently, goes somewhat viral where I said, and I made the argument that a lot of buildings in Los Angeles are actually more valuable empty than they are with tenants in them. And I know a lot of people who purposely keep their buildings completely empty because they don't want to deal with tenants. And if they want to sell at.
- [23:24]
Jason Oppenheim
Some point, well, rent control, not tenants.
- [23:26]
Graham Stephan
Because. Correct. Because, because of rent control. So building is more valuable empty.
- [23:30]
Jason Oppenheim
The problem with rent controls, and many studies show this rent control does well in the short term. So rent control manages prices and keeps people in, in, in units in the short term. In the long term, it hurts, it hurts the very people that it's trying to help. It actually increases rents because it decreases supply and it decreases investment in the community. So for, as an example, nobody wants to buy multifamily in Los Angeles because of all the rent control problems. Nobody wants to build single family in Los Angeles because of the rent control problems, because of the mansion tax. So it actually, in the long run, and just about every study bears this out, but it's really hard for people to change their ways. I mean, you think that California is just going to all of a sudden admit, hey, rent control was a bad idea. No, they're just going to keep doubling down like they do on everything. They're not going to admit that the mansion tax was a terrible idea. You won't get one proponent of that to ever admit that. So people are just very stuck in their ways and they don't, they're not willing to think critically, even though I think all the intentions are great. The intentions behind rent control are great. The intentions behind the mansion tax were great. It's just the inefficient implementation.
- [24:38]
Jack
Do you think California is doomed? Do you think that it will just continue to get worse and worse and.
- [24:42]
Jason Oppenheim
No, no.
- [24:43]
Jack
Or when will, when will they realize how bad it is to actually reverse some of this? You know, some of the layering they've done.
- [24:50]
Jason Oppenheim
Yeah, some of it's already happening. People are pretty hard headed. I think the problem with people generally is that they'll put their own self interested dogma in front of a critically thought out answer. Most people like to be in camps. You know, like Democrats like to always do the same thing. Republicans like to always do the same thing. And they don't question it. They're just. Many people are just blindly led down the path and they just think that everything that one party does is accurate when the truth is both parties have really good ideas. And the answer is generally in the middle when any one party gets too much control. And it'd be the same thing for, I would say the same thing for a Republican led state that is just, you know, has, has too much dominance for too long. They, they, they veer off track. California's veered off track because it's been dominated too long by it. By the same people that don't have any pushback. And there's really no debate. There's just simply no debate. Rent control is not debated in Los Angeles. It's not debated in California. Of course it should be, but it's just not. I think that I don't think there's any doom. I think California will remain the best state in the nation.
- [25:58]
Jack
But it's continued to go downhill.
- [26:00]
Jason Oppenheim
It has. I think that there was an awakening. I think what happened was California had a captive audience and Los Angeles had a captive audience before COVID Covid, when, when people were able to not work, you know, in the office and more things are done online and people are just generally more mobile. I think they lost their audience. And so now California has to attract people because of its policies. When it used to just have to attract people because of its jobs and its weather. And now that jobs can be done anywhere, all we have left is weather. And that's just not enough for a lot of people to stay.
- [26:33]
Graham Stephan
So should you buy or rent in 2025?
- [26:36]
Jason Oppenheim
I mean, I think. I don't know. That's a difficult question because it's really location specific. I mean, that's a very difficult question. I think it depends on how much personal satisfaction. If you just from a financial point of view, let's say you have no personal satisfaction in owning versus renting. You just want to make a great financial decision. I'd probably rent, you know, I'd probably rent for a while. I don't think real estate's probably going up, you know, maybe flatline for a little bit. If you can get a good rental, then rent. I don't know why people always think, oh, I don't want to throw my money away. You know, in rent, I mean, if you own, you're throwing your money away on interest at a bank. It's no different. I've never understood the argument why owning is inherently better than renting unless you care about it, unless you factor appreciation. But if you can rent for, you know, $6,000 a month and it's going to cost you $9,000 a month to own, you know, unless you think interest rates are going to go way down and you refinance or you get a really good deal, I would probably just, you know, stay renting until things look like they're a little bit more optimistic or positive. And, and, and it really, again, it's very location specific. I would not buy in all these areas that blew up. Miami, Austin, Las Vegas, Nashville. I wouldn't get near those places. I wouldn't get near those places right now. Those places have another 10 to 30% downward trajectory before they flatline. And the other thing is, there's no supply limitations in those cities. I mean, every, every 250 square feet of land in Miami can, you can build a thousand, you know, condos. Austin can be built out, Vegas can be built out. There's, there's no limitation on land in these places. So that's where you get crushed in real estate. If you're going to buy real estate, that's why Newport beach does so well. There's just no land. And so if you buy something with good land in a place where there's limited supply of land, you're going to do really well.
- [28:34]
Jack
So what's your Investing philosophy for 2025 and 2026? What are you doing with your money?
- [28:38]
Jason Oppenheim
Oh, I'm glad you asked. I'm putting it in 30 year treasury bills.
- [28:43]
Jack
Okay, so we actually just talked about this. What was that yesterday? You put how much into a 30 year treasury bill?
- [28:48]
Jason Oppenheim
Well, I put $2 million into an ETF called TMF, which is like a leveraged. It's like, it's like, so it'd be the equivalent of buying $6 million in treasury bills. It's three times leveraged. I'm just making a bet. Well, first of all, you get a 4 1/2% to 5% guaranteed return on your money. That's the yield because of the underlying asset, which is a Treasury, so it pays you a yield. So you're already, you're already going to get a four and a half to, you know, 4 to 5% return. Then if interest rates come down, which I'm very certain, you know, I'm quite confident that they are, and treasury yields come down. So like a 30 year right now pays about 4.8%. If that goes, let's say next year it's at 3.8%, which I think it will be, then my $2 million will be worth like $3 million. So you can make a million, you can make a lot of money on reselling the bond because that appreciate the yield comes down, the value of the treasury goes up. So you're getting your guaranteed return and then you're making a. It's a little.
- [29:48]
Graham Stephan
So what I was showing Jack is the day after you said that you bought into that, it was up about 4 1/2 percent.
- [29:54]
Jason Oppenheim
Yeah, I made 100k on the first after, the day after my investment from that because the jobs report came in a week. Yeah. But I, this is a long term for me. So I understand. I also like the stock market. I also have a lot of money in the stock market. I mean I invested on Liberation Day. Remember when tariffs, when the market crashed, I put a ton of money in the stock market. So I'm not a generally, I mean I like real estate. I'm more of an opportunistic investor. When someone like when Covid hit the market, I put all my money in. Yeah.
- [30:24]
Jack
So what's the most you ever lost on an investment?
- [30:29]
Jason Oppenheim
Well, I bought three soccer cards like a year ago. This gold. Well, it's 2014. Panini, Prism Gold, Messi and Ronaldo. I paid 80 grand for these three cards and then like two months ago they'd gone up to like 275 grand and I sold them and had I held like another eight weeks, now they're worth like 700 grand.
- [30:53]
Graham Stephan
That doesn't count as you losing money.
- [30:54]
Jason Oppenheim
In terms of like thought out investments. I mean I've done pretty well on those.
- [30:59]
Graham Stephan
How do you always make money? It seems like anytime you say, oh, I'm buying this, I'm buying this, it just, it goes up.
- [31:05]
Jason Oppenheim
You know why? Because I don't listen to anyone else. Ever, really. I just think there's too many pundits, too much talk and people overanalyze. I'm very simplistic. I take a very macro look at what's going on. Perfect example. My biggest investment ever. I put all my money into the stock market. When it crashed in Covid, I thought this was an overreaction. The market's going to recover. No, of course it's going to recover. I doubled my money in 12 months. That's common sense. When the, when the market crashed because of Trump announced tariffs and it went down like, I don't know, 20, 25%, I said, oh, that's obviously an overreaction. People generally overreact. So I put, you know, a ton of money into the market. Then when Netflix was down to like, I don't know, I forget what it was like two in a hundred, two hundred a share. I'm like, this stock has crashed way too much. This is a massive company, it's going to rebound. So put some money in that. Interest rates, it's common. It's pretty common sense right now. You don't need to like do a bunch of, you don't need to be a bond trader to figure out that the 30 year yield on an American treasury bill is 5%. You know what China pays their investors? That if you buy a Chinese 30 year treasury bill, you get 2%. If you buy a German Treasury 30 year treasury bill you get 3.3%. And yet America, the most safe investment on planet earth, far safer than, than a Chinese 30 year bond, safer than a German bond. It's arguably considered the safest bond in the world, is paying 5%. It doesn't even make sense. I know that there are reasons for that, like currency exchanges and inflation risk and like that. But that's when you get too much in the weeds. It's like, just shut up with all the details, like macro approach. It doesn't make sense that you could buy a risk free government bond and get a guaranteed 5% return.
- [32:59]
Graham Stephan
You don't think there's any chance that the 10 or 30 year treasury stays high because people say the United States is printing too much money? Maybe there's a bit of a risk here with tariffs. Maybe we're less bullish on the economy. We don't know what's going to happen. Do you think there's any chance it stays.
- [33:14]
Jason Oppenheim
There's always a chance. There's no way that it's 100% guaranteed. I'd say it's an 80% chance that the 30 year treasury is in the threes. The yield is in the threes within 12 to 18 months.
- [33:26]
Graham Stephan
And what do you think that's going to do to real estate prices?
- [33:28]
Jason Oppenheim
It'll increase prices, but it'll also increase supply. So I don't think it's going to be like a direct correlation like, oh, interest rates are down. I mean, if interest rates go back down to where they were, which they will not, we would see a massive, you know, increase in prices. Interest rates are not going to go back down to 2% or even 3%. If, if you can go out and get a, a 30 year loan at 4 and a half percent, that's probably the right where we should be at right now. And I think we'll get there in the next couple of years. And, but again, the problem is it's going to increase a lot of supply. So you're going to see more supply come to the market and you're going to see more buyers able to afford those houses. So it's good for real estate agents because, because we work on, on volume, I don't think, I think prices will go up but 5, 10%, not 25%.
- [34:11]
Graham Stephan
What about for the people who believe that I could actually cause deflation?
- [34:14]
Jason Oppenheim
I believe so. Efficient will cause deflation. Absolutely.
- [34:18]
Jack
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Graham Stephan
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- [34:53]
Jack
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Graham Stephan
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- [35:24]
Jack
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- [35:29]
Graham Stephan
What about for the people who believe that AI could actually cause deflation?
- [35:32]
Jason Oppenheim
I believe will cause deflation. Absolutely.
- [35:35]
Graham Stephan
Wouldn't that then result in even lower interest rates?
- [35:39]
Jason Oppenheim
Yes, it will. I think that AI is deflationary and puts pressure on, I will put pressure on the Fed to lower rates. You know, I don't think we're there yet, but I think also it's going to create unemployment and when unemployment is going to put pressure on the Fed to lower the rates. I think we're going to. Within five years, we'll probably have, you know, not. You probably won't have an Uber driver, there probably won't be truck drivers and I think there'll probably be millions of other jobs. I mean, I think that Trump is bringing on a lot of, or at least he's trying to bring on a lot of onshore production, manufacturing, because that's not going to be done by humans. I mean, I'm sure he'll say it's going to be done by humans and create jobs, but it'll be done by robots in five or ten years. So now we'll actually be able to compete on a global scale in terms of production because we're not having to pay, you know, $30 an hour. You have a robot that's going to work 24 hours a day. That's three, that's three shifts. That's like three human. It would take a human being three days to do what a robot does in 24 hours. And the robot won't make mistakes, won't have to take a break, won't have to go pee, won't unionize, a lot of other things.
- [36:42]
Graham Stephan
So do you ever think that mortgages could get back down to 2%?
- [36:46]
Jason Oppenheim
I mean, of course they could. I would be very surprised if in the next 20 years we see if you can go out and get a 30 year fixed at two, two and a half percent. I would. That would surprise me. If we see that, if I see that again in my lifetime, I'll be surprised.
- [37:01]
Jack
So if someone wants to have some exposure to real estate in their portfolio, what is the best way of even going about that right now? If they like commercial, is it like single family home residential, Would it be like, you know, investing in real estate, Orient, ETFs those are the most simple.
- [37:14]
Jason Oppenheim
The ETFs are the most simple to be honest. But if you want to get. I mean, listen, it is not for the wary of heart to own a property, let's say in Los Angeles, you know, that has tenants. I mean you're just asking for a nightmare problem. But I will say that this is probably the best market that I've seen for a buyer to come into LA and buy multifamily. I mean I look at it myself just because it's so intriguing. You can buy. I mean I saw a property on Lexington which is in Hollywood. 20 unit building. This just shows you how big of a problem, you know the tenant, the tenant restrictions are in LA. 20 unit building, 11,000 square feet, interior square footage. And I could have bought the building for 2.8 million. It sold for 2,8. I wrote an offer of 2,5. They didn't. They sold it. I mean rightfully good for them. They got two, eight for it. That's insane. I mean that's, that's.
- [38:08]
Jack
So what is that per unit in Hollywood?
- [38:10]
Jason Oppenheim
It's 260. $270 a unit. 270, 000 a unit. Which is. By the way, this is what the government should be doing if we're trying to. I don't think. I think the homeless problem is a lot more complicated than housing. The truth is we have more housing now per capita than ever before because we had 600000 people leave LA. So we have. It's actually the equivalent of building 600000 homes. But yet homeless were. So it's not a, it's not a direct correlation to housing. I'd love to see the city go out and buy that property and house 20 people for $270,000 and say what they do is they hire, they have a deal with union where union supports the democratic politician and then they run on some, some platform to build homeless housing with unions. And then those prod. Then those condos cost about a million to a mill two to build. So. And they never even get built. But even if they did get built, it would cost the city a million dollars to house someone when you can. When I could out and bought this 20 unit at $270,000 a unit.
- [39:12]
Jack
Does it ever work when the government funds housing for homeless people?
- [39:17]
Jason Oppenheim
The government is, doesn't do much right when it comes to the homeless. There's a lot. Listen, I'm, I'm a. I mean I've been working and volunteering for 15 years for food on foot. It's a private organization which is, which I, I like and there's so many good people that work there. So I also think that most of the people in the homeless industrial complex, which is just this huge monstrosity in la, good, well intentioned people. But I think the problem is that they, they won't, they're not willing to st. Take a step back and to try to figure out a new approach. People are just so stuck in their ways and they just double down and double down and just keep bulldozing through without pulling back and saying, hey, maybe there's a, another way to do this. It's a lack of critical thinking. I think it's been a downfall of, you know, it's, it's that, that, that sentence alone probably explains 90% of the problems in the United States and the world. It's just a lack of critical thinking.
- [40:12]
Graham Stephan
So what do we do in terms of a housing shortage that they say like 6 million.
- [40:16]
Jason Oppenheim
There's not a housing shortage. If you. And housing is not unaffordable any more than it was for the last 80 years. If you look at the actual facts, there's actually at least as much housing now per person in America as there has ever been. So people don't usually know what they're talking about when they throw these things out. They just read a CNN headline. In terms of housing unaffordability, not true. If you look at way, if you look at what it costs to rent a 1,000 square foot two bedroom apartment, as I'm just using as an example, from 1930 to today, and you look at wages from 1930 to today, it is almost a perfectly correlated similar line for the last 95 years in terms of how much it costs to rent a 1,000 square foot two bedroom apartment in Los Angeles or in America. So there's always talk about it's more unaffordable than ever before. It's actually not. It's actually the exact same. It has pretty much followed wage inflation, has followed rents and by the way people talk about, you know, it's like a clickbait to say housing is so unaffordable when interest rates are high like they are now. Of course, buying a house is of course more unaffordable to the wage than it was five years ago. So if people say housing has gone up 6, you know, the cost of housing has gone up 60% in the last five years. No it hasn't. The value of the, you know, a $500,000 condo, five years ago in LA is worth 500,000 today. So it's gone up zero. The cost of buying it because interest rates are up means that it's going to cost more of your wages. That is a fake argument because when interest rates go down. Did we fix the affordability problem? No, that's just another way of saying interest rates, interest rates are up. That's not fixing the problem. That's the problem with trying to fix most things in America. It's just talking points, people yelling about things that they have no idea like affordability and, and cost of housing. They don't really. If you go on chat GPT and you spend 30 minutes asking it to analyze these facts, you'll actually learn that housing is as unaffordable today as it was and for your grandparents.
- [42:34]
Graham Stephan
Is this what ChatGPT told you?
- [42:36]
Jason Oppenheim
I've actually, my brother, my brother and I did a full analysis on chat about 30 minutes about this very issue because we wanted to learn. Nobody does that unfortunately but they just watch like you know, CNN and, and see a headline about unaffordability, don't even know what it means. They're like if you, CNN doesn't even say is this buying a place? Is it renting a place? You have no idea.
- [42:55]
Graham Stephan
Here's how they compare it is that they say it used to take two to three years worth of wages to purchase the average house and now it takes six years to 10 years worth of wages to purchase the average house. And that they, they calculate the cost of living and the affordability.
- [43:11]
Jason Oppenheim
Well first of all the affordability index should be that, that is into when you're talking about buying that's interest rate dependent. So for example then according to that logic you could say cost of housing has doubled in the last five years. But that's nonsense.
- [43:25]
Graham Stephan
Interest rates have done throughout the 70s and 80s though interest rates were 15% but the, the cost of.
- [43:30]
Jason Oppenheim
Well that's why you, well that's why you should use rental. That's why you should because rents are not as tied to interest rates. So the real, to me, I think the real question is how much of your, of the average person, the average person's wages does it take to rent a two bedroom, 1,000 square foot apartment in X city? That seems to be the more logical way to do it. And actually there are arguments now that there are two people working in households whereas you know, one generation ago, two generations ago it was just one usually the man. So there's only one income. So it actually there's an argument to Say it actually cost more of someone's wages back then than it does today because there's usually two earners. But again, it gets very. That's the thing, it gets so complicated and no one likes talking about complication. But the bottom line is there's not an affordability crisis. It is housing. Renting a condos or renting apartment is just as unaffordable as today. As it was for your parents. As it was for their parents. As it was for their, their parents. That's how similar it's been for four generations.
- [44:36]
Graham Stephan
What about for the people who say that they should have a right to be able to buy something well and that they don't want to be stuck?
- [44:40]
Jason Oppenheim
Don't even get me started on entitlement. I mean, everyone's entitled to, Everyone isn't thinks that they are entitled to the American dream. When you're entitled to an opportunity to work hard and achieve the American dream, that's much different than just being entitled to the American dream. So I don't, you know, my response to people who you even use the word entitled is no, you're not. None of us are. I mean, you're entitled to equal opportunity. I think that's a fair statement.
- [45:09]
Graham Stephan
So how much success in real estate right now when it comes to buying is due to strategy versus timing?
- [45:15]
Jason Oppenheim
It depends on if you're going to hold long term. If you're going to buy long term, I don't think timing is important. Same with stocks. I don't think it matters. Like, I am an opportunistic buyer in real estate. I'm an opportunistic buyer in the stock market. So I, you know, I'll buy in a crash. And by the way, if you want to buy real estate and you don't and you're not going to hold it for 30 years, necessarily buy in a crash, buy stock in a crash. Wait. Everyone over always overreacts. So just wait for the next wave of lemmings to overreact.
- [45:46]
Graham Stephan
Yeah, speaking of being a contrarian investor to a certain degree, as I was speaking with a guy who was a prominent investor in San Francisco for the last 30 plus years who said he believes now has never been a better time to buy in San Francisco. And he's actually making a ton of offers and he's getting properties for 30 to 50% less than you could buy them for in 2018.
- [46:09]
Jason Oppenheim
Commercial or residential? Both. Parking lots. I don't disagree. I don't disagree.
- [46:14]
Graham Stephan
Properties. And he's like, this is the best opportunity for me Even though a lot of people are moving out, businesses are moving out, but like, this is the time you want to buy. And I almost look at this in LA because I've seen some of these deals that you were talking about. Like there was a seven unit in Santa Monica that I saw for three and a half and I thought it was worth three and a half and it had sold years ago for like 3.8. They're taking a loss on it. It's a great deal. It didn't sell after six months. Yeah, I was thinking, man, at 2.8, if they take that, it's a killer deal. But they just didn't sell. So maybe now is a good time to buy into these places because everyone like us is overlooking it to a certain degree. I know you're still making offers, but like, I would look at this and think, I don't want the hassle anymore. But it's a pretty attractive price, all things considered.
- [47:01]
Jason Oppenheim
Today I agree with. When people are not doing something, is usually the time to do it. I don't disagree with that investor in San Francisco. I don't think it's a bad idea. For the only thing that I, that concerns me is I don't want to be dealing with the problems. I don't want to deal with the lawsuits, I don't want to deal with the, you know, the phone calls. I don't want to deal with all the risks and insurance and, you know, tenant that goes on in a, in owning a property. So for me, it's personally, it's not worth it. Fifteen years ago, you know, I had the hustle for that. Yeah, it's great for like a young person, you know, at 23 years old, has some money, or 28 years old, has some money, wants to invest in multifamily. I would buy it. I would go buy right now in la. It's probably the best time to buy multifamily.
- [47:45]
Graham Stephan
Telling Jack about this.
- [47:46]
Jason Oppenheim
And by the way, don't look at, don't look at the returns right now. Look at the appreciation. Because when interest rates go down, that $2 million, 10 plex will be worth 2.5. So that's how you make money in multifamily, because you raise rents. But more importantly your, the cap rate will be affected by interest rates.
- [48:03]
Graham Stephan
Speaking of that though, I was telling Jack the other night about a new legal scheme that seems to be going on throughout California. It's a tenant habitability issues. So they could basically claim my unit's not habitable because of insects, mold whatever it might be. And then they claim a code violation with the city and they try to settle with the owner. And this is usually common on like larger apartment buildings, like 12, 20 units plus they settle with the owner because the owner knows they're going to spend 20 to 50 grand defending themselves. Let's settle for 20. Done. Now the lawyer on that case could send a mailer to every other tenant in that building saying that this owner was found to settle this case. You might be entitled to money. And now every single tenant can now file a claim against that owner. Yeah, potentially bankrupting the owner.
- [48:58]
Jason Oppenheim
We're far too, we've gotten far too litigious. I think the problem is that these lawyer organizations, they just fund these democratic politicians and so the politicians keep laws in place to allow all these lawsuits.
- [49:12]
Graham Stephan
So this is something that Jack actually brought up because he said, who's lobbying for this? And there is a new ordinance that came throughout Los Angeles recently where now you have to put a, you have to put it in a common area of any rent controlled property. That said the tenant is entitled to free legal services. Here's the number. And it needs to be displayed at all times. And if it's not properly displayed and the tenant falls behind on their rent, you can't evict them. Is that whole eviction case is going to be thrown out because they didn't know that they had an entitlement for those legal services. And Jack said, who, who comes up with that?
- [49:47]
Jason Oppenheim
When you go too far in one direction, tenants will abuse the system. And I know that. It's like, you know, you're not supposed to say anything negative about tenants. Oh, and here's the other thing too. So LA in all of its wisdom just passed a new law saying that I renting out this house as an example. I have about half a million dollars worth of furniture and art in the house. And So I charge $33,000 a month and I charge a two month security deposit, $66,000 and a half a million dollars. City of LA says no, I can only charge one month security deposit even if the house is furnished. I cannot charge any more money for a furnished house versus an unfurnished house. That's LA in all their brilliance because they were trying to protect, you know, ostensibly trying to protect someone in like the thousand, you know, to $2,000 a month price point and didn't want them, they wanted them to be able to afford their, their security deposit. So now they're limiting people that have $10 million homes from getting a two month security deposit from another millionaire. Like it's, it's so illogical. And here's another problem too. I now can't sell that house. Up until a year ago, I could tell the tenant, hey, your lease expires in February. When you move out. I'm going to put the house on the market for sale and I'm going to sell my house now. I cannot get rid of that tenant. That tenant can now live there forever.
- [51:03]
Graham Stephan
Indefinitely.
- [51:03]
Jason Oppenheim
Indefinitely? Yeah, I cannot. You cannot get a tenant out just because you want to sell a property that's no longer just cause eviction.
- [51:10]
Jack
So even how can you get a tenant out?
- [51:13]
Jason Oppenheim
You can never get a tenant out in California.
- [51:14]
Graham Stephan
I was telling.
- [51:15]
Jason Oppenheim
You're not. You cannot. But what you have to move. You have to. I'd have to personally move back into.
- [51:19]
Graham Stephan
That house for two years.
- [51:21]
Jason Oppenheim
For two years. But I don't want to live in that house. That's the only way to get. Otherwise that tenant can live there forever even though he's paying $30,000 a month. LA thinks that they need to protect that tenant and not allow me to sell my own property because that tenant's lease expired and yet he's allowed to continue to live in my house and pay $30,000.
- [51:39]
Jack
So there's, you literally can't say, here's you know, 90 day notice, you can't say, nope.
- [51:43]
Jason Oppenheim
In fact, what happens is the tenant will go, oh, you want to sell your house, give me 200 grand and then maybe then I'll move out. That's what happens because they have all the power now.
- [51:55]
Graham Stephan
I was telling Jackson, if you make too many offers to the tenant a cash for keys, they could now sue you for harassment.
- [52:03]
Jason Oppenheim
Yeah. And also now if you, if you enter into a deal for cash for keys and you pay a Tenant, let's say $20,000, you know, to move out and he moves out. He can move back in the next month. He can say I changed my mind and move back in. He has to give you your money back. So you can't even actually conduct business. You can't even move along with the understanding that this signed contract is, is enforceable. The tenant can change their mind be.
- [52:28]
Graham Stephan
An exemption for luxury properties, of course.
- [52:31]
Jason Oppenheim
Should be if you have, well, you.
- [52:32]
Jack
Should just be able to kick someone out of your own property.
- [52:34]
Jason Oppenheim
Well, it's just common. That's what I'm saying. They've lost common sense. So as an example, if someone's paying over $10,000 a month in rent, they don't need the city to be managing security deposits. They don't need the city to tell them that they don't have to move out at the end of their lease. I don't know why the city is promulgating codes protecting millionaires. They don't pass these things to purposely harm economic activity. They just aren't smart enough to figure out all the damage they're causing.
- [53:03]
Jack
It does appear as though that's probably something that's just lobbied by lawyers because the more regulations, the more loopholes, the more layers of paint that they put on this mound of regulation is just another thing that they can exercise to get more profit. Basically they just like, oh, this one code. Oh, this code. If there's a million codes, they have a million choices to be able to try to, you know.
- [53:25]
Jason Oppenheim
Well, I think it's execute. I think it's different. I think it's tenants rights groups, well intentioned, say, hey, there's a pro. Here's another example that LA did. You can no longer discriminate on, on tenants based on criminal history. So you, I don't even think you can even look up criminal history now. I don't think you can. So if someone committed like a, a crime and you find that out, you cannot say, oh, I don't want to lease it to you because you burglarize a house or something like that. No, you have to lease it to them. That doesn't make sense. That's not helping anyone. That's just creating inefficiencies in the market.
- [54:00]
Jack
What if they committed a crime of fraud?
- [54:03]
Jason Oppenheim
Let's see if there's any.
- [54:04]
Graham Stephan
There's no carve outs, by the way. Jason, I do want to correct you on something.
- [54:07]
Jason Oppenheim
Yeah?
- [54:08]
Graham Stephan
The term now is justice involved.
- [54:11]
Jason Oppenheim
What is it?
- [54:12]
Jack
Oh, it's not a criminal, it's a justice involved individual.
- [54:15]
Jason Oppenheim
Shut up, Jason. Look it up. I don't care.
- [54:18]
Graham Stephan
I'm being 100% serious.
- [54:21]
Jack
You're going to be canceled.
- [54:23]
Jason Oppenheim
I can't be canceled then. I'm not saying justice.
- [54:25]
Graham Stephan
I'm being serious though.
- [54:26]
Jason Oppenheim
I'm being serious.
- [54:27]
Graham Stephan
You cannot call them a criminal. It's a justice involved individual.
- [54:31]
Jason Oppenheim
Well, you can, you can. What I'll do is I'll say criminal and then my mouth will go justice involved. If I know that a tenant committed a violent and burglarized someone and committed fraud, I can't be like, oh, I don't want to lease my apartment to you. The city requires, says I'll be, I'll get sued, I'll get sued for discrimination if I don't lease out an apartment to a violent felon who's committed a violent crime or a fraud.
- [55:01]
Graham Stephan
What about, what about a second.
- [55:03]
Jason Oppenheim
Let's say, let's say that he lived in another apartment building and burglarized the other tenants and committed fraud on the landlord and then beat up one of the other tenants. I cannot, I, I cannot discriminate against those acts. I have to let him.
- [55:18]
Jack
What can you choose? If you put a listing out for rent and you get 15 applicants, how are you able to choose which one you rent?
- [55:26]
Jason Oppenheim
Well, based on their job. Employ, I think just based on their employment and their credit score, maybe.
- [55:33]
Jack
But what if you have 10 people that apply that.
- [55:35]
Jason Oppenheim
Yeah. Then you'll get sued. I. We have a case right now where, where a client is getting had a bunch of applications. Pick the best one. And there was another person that applied for the property in a protected class that was losing their job, and he literally stated that they will be unemployed in 60 days. And they didn't choose that person because of that.
- [56:00]
Jack
So this person, they basically put out this listing, they got a bunch of applicants, and then they went with the most qualified individual.
- [56:05]
Jason Oppenheim
And now they're getting sued.
- [56:06]
Jack
And now they're getting sued by someone.
- [56:08]
Jason Oppenheim
In a protected class. Yes. Even though that person said they were losing their job.
- [56:13]
Graham Stephan
Now isn't that just a money grab though? I don't think it's an actual 90.
- [56:17]
Jason Oppenheim
95% of lawsuits are a money grab. I'd say 95% because they know it's usually suing a wealthy individual or landlord or company, whatever, and they know that that person is going to spend 50 to $75,000 in legal fees and a year and a half of their life defending it. And so the person thinks, oh, I can get a quick 20 or 30 grand. I mean, that's 90 plus percent of lawsuits. That's a problem with how litigious we are, is that it's so easy to make a claim and it's so costly to defend it. So you just. See, that's why nine. I think 98% of cases are settled. Yeah, it's, they're. It's. So what? Basically legal extortion.
- [56:57]
Graham Stephan
What could be done about this?
- [56:59]
Jason Oppenheim
I mean, I think higher, higher bars for, for lawsuits, for sure. I mean, I, I'm not exactly sure. But you know what, you know what I think would probably be the easiest way to solve this? If you lose a case, if you bring a claim and you lose, you should be responsible for the other person's attorneys. That alone, that Law alone.
- [57:19]
Graham Stephan
But they're going to say that low income people who justifiably should have a lawsuit against someone and win, who don't have the resources to do that, might.
- [57:26]
Jason Oppenheim
Be less likely to. Well, okay, well then you can do it this way. You can still take a case on contingency if you don't have money. But that, that contingent lawyer, that lawyer then has to be responsible, taking the risk. Not just the risk of his time and energy and money that he spends on the case, but also the risk of having to pay the other side's attorney's fees. That will. Because the problem is this too. Lawyers will take any case because they know that they can settle out for 20 or 30K. And then, so they should be. So I should, you know, let's say you get sued, Graham. You should be able to say, you know what? I'm not going to settle for 20 grand because I'm 100% right here. I'm going to spend the $50,000 to defend this and then you're gonna have to pay me back that that lawyer should be responsible. So if that lawyer wants, thinks that that case is a case, he's not gonna take it. Now a lawyer will take a case because like, oh, I can shake this wealthy guy down and I'll. And he'll settle for, you know, 30 or 40 grand. I know he's not gonna go to trial. But if there's a risk of having to pay that other side's attorney's fees, then they wouldn't do it. Then, then lawyers would only take good cases because they don't wanna take that.
- [58:27]
Graham Stephan
Risk if it's ever gonna happen.
- [58:30]
Jason Oppenheim
No, because I think that attorneys lobby so much to make sure that doesn't happen because they love all this litigiousness.
- [58:37]
Graham Stephan
And what's going to be the result of that? Just no one buys real estate. People are afraid to put themselves out.
- [58:42]
Jason Oppenheim
I mean, what it creates is. Yeah, it creates a disincentive for legitimate action. You know, I mean, it's a economic disincentive. But you want people to be able to, to act freely in, in a capitalist manner. Right. You don't want to create friction costs. That's a friction cost. Like insurance. Let's say insurance was, was 10 times higher than it should be. That's a friction cost. This is essentially an insurance policy. I mean, because every time, every time you do something, you're thinking, I could get shaken down, I could get sued and I'd have to spend a hundred thousand dollars to defend it. I mean, there are a lot of problems in California. I can't solve them all, but that is probably the way to solve how litigious we are.
- [59:23]
Graham Stephan
And what do you think are the best opportunities going forward right now in terms of market investment?
- [59:28]
Jason Oppenheim
Real estate, you know, so I was buying real estate every year, but mostly I was buying real estate because interest rates were so low. And now that's gone. So I'm not really buying real estate right now. So I don't know if I'm gonna sit here and just recommend, you know, buying real estate as an investment. I mean, I think it's a fine investment in the long term. You know, it's gonna go up 5, 8, 7% a year. Truthfully though, I think the market right now is probably going to go up 5 to 10% a year for the next few years and you don't have to deal with five tenants, you know, and maintenance. So I'm, I think I'm probably going to leave my money in the stock market and put my money in 30 year treasuries and just hang right there for a little while until I see another opportunity. I will say if you are glutton for punishment, you should go buy multifamily in San Francisco or Los Angeles because it's, it's so low right now. You can get, you could spend $5 million in multifamily right now and you're, and you're intelligently buying. That'll be worth $7 million probably in three years.
- [60:32]
Jack
Hiring always sounds so simple. That is, until you actually have to do it. Trust me, we're going through it right now. You wait for the right candidates, dig through stacks of resumes, and half the time the people you reach out to aren't even looking for jobs. It's such a grind.
- [60:44]
Graham Stephan
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- [60:59]
Jack
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- [61:14]
Graham Stephan
Over 320,000 resumes are added to ZipRecruiter every month. That means you're always pulling from a fresh pool of talent, whether it's entry level or highly specialized roles.
- [61:24]
Jack
It's really no surprise that ZipRecruiter is the number one rated hiring site based.
- [61:27]
Graham Stephan
On G2 and the results speak for themselves. Four out of five employers who post on ZipRecruiter find a quality candidate within the first day.
- [61:35]
Jack
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- [61:46]
Graham Stephan
Is ZipRecruiter.comich with the link down below in the description ZipRecruiter the smartest way.
- [61:52]
Jack
To Hire Remember that doctor's appointment you were supposed to make a long time ago? The one that's been probably sitting on your to do list for weeks, maybe months. Maybe it's just an overdue annual checkup. A weird rash that you keep googling Graham. Or it's your dentist reminding you it's been two years since your last dental cleaning. Trust me, we've all been there. Booking a doctor's appointment has always felt like such a hassle. Until now.
- [62:13]
Graham Stephan
That is where our sponsor ZocDoc comes in. For those unaware, ZocDoc is a free app and website that allows you to search and compare high quality in network doctors and book an appointment right on the spot. You could also filter by insurance, location, medical specialty and even look at what verified patients have to say about them so you know exactly what you're walking into. And then once you find the right doctor, you could see their real time availability and book an appointment that works for your schedule.
- [62:38]
Jack
And appointments made through Zocdoc happen fast, typically within just 24 to 72 hours of booking and you can even score same day appointments. So stop putting off those doctor's appointments and go to Zocdoc.com ICE to find an instantly book a top rated doctor today, that is Zocdoc.com Z O C-O C.com ICD thank you so much to Zocdoc for sponsoring this episode. Link in Description do you think that there's anything to the philosophy that people that are really tight with their money have less opportunity just coming to them because they have more of a scarcity mindset as opposed to those who have more of an abundance mentality? I know Graham was telling me that you are totally fine overpaying for whatever ever.
- [63:20]
Jason Oppenheim
Like you don't even.
- [63:21]
Jack
You don't even really consider it.
- [63:22]
Graham Stephan
I was talking about the 4GT. And I'm like, Jason, you might be overpaying by 2030. And plus sales tax on top of that. If you just wait and you're like, dude, I don't give a. I'm not gonna waste my. I just want a car.
- [63:31]
Jason Oppenheim
I totally. So I have always been. I had a lot of what. What's the word? Risk.
- [63:42]
Graham Stephan
Tolerance.
- [63:42]
Jason Oppenheim
Tolerance, yeah. Thank you. I've always had a lot of tolerance for risk in my investments. I'm okay losing money. I think. Think in order to make money, you have to. You have to be pretty risky. If you are going to be. If you're too careful. If you have a million dollars today and you are a careful investor, you'll have $3 million in. In 20 years. And at best, maybe, honestly not even that, you probably have $2 million in 20 years. And on a more aggressive investor would probably have $5 million in 20 years. So it's a big difference. I'm a believer in taking risky investments, not stupid investments. But like, again, this. A lot of people told me not to invest in TMF because it's three times leverage. And that's like. It's like, who gives a. So I'm taking. I believe strongly that the treasury yield's going to come down. I mean, I think that's an intelligent risk. I put a. I put. Put a ton of money into the market on Liberty. You know, when Trump announced the terrorists and the market crashed. I think it's very intelligent to believe the market's going to recover. I think that's a. I mean, I guess that's. You're taking a big risk, but I think those are calculated.
- [64:54]
Graham Stephan
Not just that, though. I think. I think it's. Overall, from what I've seen, you spend a lot of money. I mean, at least compared to what I'm used to. The dinners and the experiences and the cars and the houses and the, you know, the trinkets and the watches and the going out and the entertainment. It's like. I remember seeing some of this.
- [65:11]
Jason Oppenheim
I don't know. I don't have kids. Kids. And I don't need to die with money. I mean, I worked hard and continue to work hard to have fun. I think money is not. Doesn't do anything sitting in my bank. I am all about spending my money, as you well know. But do you think shy about it?
- [65:27]
Graham Stephan
Do you think that's giving you more opportunity than, let's say, me?
- [65:33]
Jason Oppenheim
I don't think it's giving me more opportunity. I don't think that You've going out and buying a I just bought a rolls Royce for 500 grand brand. I don't think that's giving me opportunity. Do you think it's fun as, but.
- [65:42]
Jack
The, the abundance of living that life. I do think I'm a pretty firm believer that it does end up somehow coming back to you, maybe in the way of like someone sees you in a Rolls Royce, you get a connection because you're wearing a watch or you go to a fancy dinner and so instead of staying at home, you meet someone and you do deals with them.
- [65:57]
Jason Oppenheim
And you develop a relationship.
- [65:58]
Jack
You enter that web of people. Or it could be in such a way of just like, like what you put out is kind of like, you know.
- [66:05]
Jason Oppenheim
Yeah, I mean, I don't want to go there because I think there are too many people that, that, that shouldn't be doing that pretend that they're wealthy and they're running out there and like, you know, buying bottle service and dumb. So I wouldn't encourage that behavior unless you can afford it within your means. Also, if you have a family and a wife or whatever, you know, then probably not the best idea. I purposely don't have kids because I want to go around and I want to go, I want to buy a Ford GT and a Rolls Royce and I want to go fly first class to wherever with my girlfriend. I mean, that's, to me, I don't understand how people work hard and have money and don't do that. I really don't get it. I, I, I, I think they're fun. They're fun coupons. That's what money is. They're fun coupons. Why are you leaving fun coupons on the bank? Go use them to have fun if you're rich.
- [66:58]
Jack
What's the best thing to spend money on?
- [66:59]
Jason Oppenheim
I, there's not one thing. I think clothes, really.
- [67:05]
Graham Stephan
I think people say that's the lowest.
- [67:07]
Jack
Yeah, no, I love clothes.
- [67:08]
Jason Oppenheim
I love cars. I love travel food. But you can't spend that much money on food. Let's be honest. I mean, you know, not, you can't, you can't go out and buy a $500,000 dinner. You can buy a $500,000 car. So I'll just, I'll say travel, definitely travel. You know, spend a hundred grand on a European vacation. And I, But I will say the, arguably the most fun that I have with the, with my money, best ROI is spending it on other people. I love being able to do things with my friends. I think it's great that I Can provide, you know, opportunities for my friends traveling or dinners or whatever that they wouldn't otherwise do. I also don't understand why people who have money. To me, if you're at a dinner, the person who's least affected by paying the bill should pay the bill. That's that simple. If you're out traveling, it should be based on who's least affecting. It's a utilitarian argument.
- [67:57]
Jack
We picked up the bill just a couple days ago.
- [68:00]
Jason Oppenheim
Oh, for Mexican food.
- [68:01]
Jack
The iced coffee hour. Picked up the bill for the Mexican food.
- [68:03]
Jason Oppenheim
To be fair, I told my staff to pay it, and then they said, oh, hey, Graham paid it.
- [68:08]
Graham Stephan
Yeah, you did.
- [68:08]
Jason Oppenheim
And by the way, does not count. Don't. Don't bring up the fact that you finally bought lunch. Fifteen years of me buying lunch and I gotta hear about the one Mexican.
- [68:16]
Graham Stephan
Restaurant, you guys, I'm never gonna live that down.
- [68:19]
Jason Oppenheim
And pinches tacos, by the way, does not count as dinner. What does it count as? That's like a cheap lunch. That counts as like a half a lunch.
- [68:28]
Jack
Okay, so it's mostly spending the money on other people. That's the highest.
- [68:30]
Jason Oppenheim
I'd say that's probably the best roi. Yeah, I mean, because two people get the enjoyment I get, you know, I do something nice for my girlfriend or my brother or a friend, I get the enjoyment of it, and they get the enjoyment of it. You know, I think it's a. It's a great thing if you can afford to do nice things with your friends. I think that's awesome.
- [68:51]
Graham Stephan
What do you think is the optimal amount of money to have?
- [68:56]
Jason Oppenheim
That's an interesting question. You don't want to have so much money that everyone's angling at you, you know, and you can't even have a normal conversation with someone. Maybe 100 million, maybe. The other thing too, is once you have so much money that you can, you know, total you money, you can do whatever you want. I don't know if you appreciate it as much. So I don't. I'm not going to say a dollar amount. This is what I'm going to say. I think the goal is to continually increase your net worth so that you can continually get nicer and nicer things and so you can continually appreciate those nicer and nicer things. The last thing you want to do is one, have so much money that you stop appreciating things, or two, you have a lifestyle and that you have to. That you have to come down. So I've always found that, like, perfect example is My. I now drive a Rolls Royce Cullinan, but I didn't just go out, you know, and that wasn't my first car that would suck. You start out with a Rolls Royce Cullinan suv. You're never. There's no better car out there. So there's no. I started with. I don't know. I forget what. You know, who cares what my first cars were? But up until, you know, finally I was able to get a Bentley, you know, like five years ago. And then five years later, I got a roll. It's like. So I. When I got into my Bentley, I'm like, oh, my God, this thing's is amazing. And now I'm in my roles. I'm like, oh, my God, this thing is even better. So you just want to keep living to where you can continually increase your quality of life, and then you will appreciate it every time. I never just. I never want to come down. And also, I guess you don't. If you have. If I had $50 billion, I mean, I don't know, then you can do anything. So then nothing's fun. You know what I mean? I like to be able to. I like there to be things I can't do. I cannot go out and buy a private jet. So I. I like. You know, it's nice to be able to not do everything. I don't know.
- [70:41]
Graham Stephan
I feel like, theoretically, you could buy, like, a $6 million private jet.
- [70:45]
Jason Oppenheim
Oh, yeah. But then you're stressed out about the costs and the user. You know what I mean? That's stressful. That would be stressful.
- [70:51]
Graham Stephan
So how much money do you need? How much money do you need to buy a private jet?
- [70:55]
Jason Oppenheim
A Hundred million minimum. 100 million, probably 200 million to even start thinking about a private jet. Okay. Yeah, I'm not. I'm not there.
- [71:07]
Graham Stephan
What if you tra. What if you traveled a lot? You used it, like, a few times.
- [71:11]
Jason Oppenheim
First of all, I'm not even. If you travel a lot, like, to Europe and what you're talking about, those private jets cost, like, 30, $40 million. You got to be worth, like, $400 million before you're stepping up like that. And I don't even. Like, I'm not even a huge fan of playing of flying private because I get nervous turbulence, and then the pilot's not gonna be probably as good as a commercial pilot. And the bigger the plane, the safer it is, the less turbulence. I mean, more crashes on private planes than commercial planes.
- [71:40]
Graham Stephan
What's the biggest lesson you've learned about money? That Nobody teaches you.
- [71:43]
Jason Oppenheim
I mean, I would say that money does buy happiness. People tell you that it doesn't, but I think it does. It doesn't guarantee happiness. I think that's what the saying should be. Money doesn't guarantee happiness. Because that's true. Money definitely buys happiness though. And I think that maybe people don't realize that money is meant to be spent. You know, I mean, I think you, you're on this planet for only so many years. I don't, I don't understand how people are wealthy and don't spend it. And then the other thing is, I guess circling back on this, spend it on your friends. I encourage my mom, my mom has, I beg my mom to spend money. She's buying a Porsche right now. I mean, she's never had a nice car. She hasn't had a car, you know, over a hundred thousand. Well, not probably. I bought her a Mercedes for 100k, but before that, probably, you know, she has a pickup truck and she's got money now. I'm like, mom, like she, you know, she doesn't spend money. I like, I beg her to spend money. I actually like have long conversation with her. I think that some people need to be encouraged to open up and enjoy the food to their labor. I don't know why people, so many people have money and don't spend it.
- [72:55]
Graham Stephan
So what's your advice to me? Yeah, because here's how I look at it.
- [72:59]
Jack
What are you going to do?
- [72:59]
Jason Oppenheim
How do you do with your money? Are you gonna have, are you having kids one day?
- [73:02]
Graham Stephan
Here's how I look at it. I see the amount that I have invested and I just think I could spend 3% of it a year and not run out. So that's kind of what I base everything off of. But then I think if the market falls 50%, I don't want to go down in lifestyle. So that 3% now turns to one and a half and I spend that. That's it, one and a half.
- [73:21]
Jason Oppenheim
But does that assume that you're not making any money?
- [73:23]
Graham Stephan
Yes.
- [73:23]
Jason Oppenheim
So everything you are making money.
- [73:25]
Graham Stephan
Yeah. So that adds to the top. And then I could spend one and a half percent of what's invested.
- [73:30]
Jason Oppenheim
Well, but then you have to figure out how many. You also have to. Minus how many years you have left, right?
- [73:35]
Graham Stephan
Yeah, 50 plus years. But I don't want to run out. So one and a half percent over 50 plus years, assuming my expenses keep.
- [73:42]
Jason Oppenheim
Going, assuming a return of how much a year? Year. 5%.
- [73:45]
Graham Stephan
I do 5 to 6% to me.
- [73:48]
Jack
This sounds borderline mental disorder.
- [73:50]
Jason Oppenheim
No, no, I don't think that.
- [73:51]
Jack
I think one and a half percent.
- [73:53]
Graham Stephan
If, if the market falls 50%, I don't want to be affected by it. I don't even want to think about it. I want to be like.
- [73:58]
Jason Oppenheim
I think, I think what you should do is be diversified enough that, that, that doesn't happen.
- [74:04]
Graham Stephan
Oh, I am. But you can still.
- [74:06]
Jason Oppenheim
Let me give you a perfect example of how you can hedge that. I'm really pitching 30 year treasuries, the inverse 3x leverage. Buy a 30 year treasury. Why? Because if we go into recession, what's the Fed do? Lowers rates. So you have, you could put in 10. Let's. I'm just gonna say you have $20 million. You don't have to tell me what you have. Let's say you have $20 million. If you put 10 of it into, into 30 year treasuries, then you're guaranteed a 5% return, which is pretty solid. And you're also investing that to some degree because if rates go down. But you're, you're. It's a hedge against inflation. No, sorry, it's not a hedge against inflation. That was stupid.
- [74:43]
Jack
Against the market.
- [74:44]
Jason Oppenheim
It's a hedge against a recession.
- [74:46]
Graham Stephan
Right.
- [74:46]
Jason Oppenheim
So if the market goes down and we're, and we got unemployment and hitting the fan, rates are going to go down. So have a balanced portfolio and then you don't have, there's no way you're going to lose 50% of your money. So then, then you're 20. Then, then you could do 25%.
- [75:00]
Graham Stephan
But I still think there could be a small chance we turn out like Japan that just goes down for like 30 years.
- [75:05]
Jason Oppenheim
Well, didn't rates go down in Japan? Yeah, they went to like zero.
- [75:09]
Graham Stephan
But the market's going down at the same time.
- [75:11]
Jason Oppenheim
I know, but you can, My point is you can hedge. That is a perfect hedge. I spend money to remove stress. I'm overstaffed. You know, personal assistant. I have a stylist, you know, I have, I don't do anything anymore. I love that. I think there's no better way for me to spend money than to have somebody pack for me. You know, why do I want to. Or go to the grocery store for me or get my, my, you know, dry cleaning. Are my shoes clean? Why do I want to be driving to drop off my shoes to get cleaned, you know, or. That's a dumb argument. I know I'm sounding like a douchey guy, but. Douchey. But I mean, why do I want to be doing anything? And that's the best thing for to Graham.
- [75:49]
Jack
Graham will lose sleep over a quote that he gets from a contractor. That's like 700 more than what he thinks.
- [75:56]
Jason Oppenheim
Like he will literally.
- [75:58]
Jack
And then he'll have a podcast the next day and he'll be like groggy and people will comment. Graham looks tired.
- [76:02]
Jason Oppenheim
One of, one of the things that I've done to change Instagram is I used to be so difficult about contractors and I always used to think I was getting and I would negotiate them and get a second bid and a third bid and guess what? You are getting like 90% of the time. I have now. It was, it's less about money for me. It was more about psychology. You know what I mean? I was, I was feeling like someone was getting one over on me and I was being treated unfairly. And now I'm like, you know what, I'm wealthy enough that I. Who care? What's the worst case scenario? This is the way I think about it. The worst case scenario is this contractor who's working hard is charging me $1400 for a $900 job. So, okay, so I'm giving this dude $500 more than I should. Is that the end of the world? It's going to that guy and his family and he's increasing his quality of life. A hell of a lot more than 500 is going to increase my quality of life. Just look at it as like a tip, just a massive tip for a hard working dude. And I'm just way happier when I look at it like that. I just don't mind getting as much.
- [77:01]
Graham Stephan
How I look at it is that I don't spend that extra 500 bucks. And I think when I spend that here, I could have done all these other things that I purposely didn't do because I'd rather just save the money. And then it just poofs go. Just goes.
- [77:15]
Jason Oppenheim
Think about it like from a utilitarian perspective. Who's going to have more happiness from that $500? You or that dude?
- [77:21]
Graham Stephan
That dude.
- [77:22]
Jason Oppenheim
That dude, yeah. So worst case scenario, when you leave this planet, you have just made other people happy. That's the worst case scenario for you. That's a good way of looking at it. I mean, I really don't negotiate as much as I used to. I'm not as I don't get, you know, second and third bids. I tip like crazy tip 100 bucks to everybody. I mean, what is so the bathroom attendant or the, or the valet is going to get a hundred bucks. Do you know what he's going to do with that? He's going to take his girlfriend to dinner and have a whole good night. What am I going to do with a hundred bucks? I don't even know what I would. I mean, nothing. I don't know what you can do with 100 bucks.
- [77:59]
Graham Stephan
So buy tacos.
- [78:01]
Jason Oppenheim
Yeah, exactly. Graham. Lunch. So that I think you have to look at it like that's the same reason why I buy dinner. I've never. I mean, in 10 years, I don't think I've never not picked up a tab unless, you know, someone's adamant about it because it doesn't affect me and it affects other people. I would always look at it like that from a utilitarian perspective. And it feels good. It feels good to.
- [78:22]
Jack
The main thing that I see is like, sure, Graham could be spending money to increase the quality of his life, but at the same point, the thing that it sucks to see is when he's stressed out over these money issues and he's like. And he's on the phone with contractors trying to negotiate something down and on hold for an hour and he's like, literally stressed out and he gets anxious and he gets angry and he gets all these neg.
- [78:42]
Jason Oppenheim
Hiring a personal assistant that do that just does all that for you just pay that person 100 grand.
- [78:47]
Graham Stephan
The thing is, it just, it. It comes up so infrequently and it's so like last minute where today I have nothing, but then it could be one phone call at 4pm that just comes out of the blue. And now it's like, I really want someone to come over.
- [79:00]
Jason Oppenheim
Like, quality of life is more important than money. If you can. If you have the money to not have to worry about that then. And. And you're still worrying about it, then you're not using your fund coupons appropriately, Graham. They're really meant to be like, to de. Stress. I have very little stress in my life. I use money to. To de. Stress my life. That's the best thing I can. You can use it for.
- [79:21]
Graham Stephan
I'm still rooted to like how much I feel like a thousand dol. For like. Because I remember like $1,000 commission early on would be like, oh, wow, I. I could do this and this and this and make this last and invest it here. That. Just having it go away in seconds feels like it's irresponsible.
- [79:36]
Jason Oppenheim
You have a problem because I went gambling with you and you lost like $30. And he. And he Got so upset. I was like, dude, you don't. This is not fun. I'm, like, losing, like, seven grand, and I don't even give a. And Graham lost $30. And he's like. He's like, I'm done. I'm so done with this. He's so upset. I don't know, bro. We're. We're cut from a different cloth. Also. The other thing, too, is I think that you would be just as happy with half as much money. I don't think you would really, so it. I don't think. I think you should spend the. Out of it, bro. And the other thing, too, is, like, I bought that. The $450,000 Ford GT that is not spending $450,000. Just like. Or my Rolls Royce or, you know, I buy baseball cards or a whiskey. Like, whatever the it is I'm buying or artwork. It's not like I can't sell it in the future. Or a watch. Let's say I buy a $30,000 Rolex. Someone's like, oh, my God, you spent 30,000? No, I spent $5,000. Because I'll probably be able to sell that thing in a few years for 25k, so who cares? So I. So I only look at it as spending 5k. All I do is look at how much money I'm losing when I bought that Ford GT. Maybe I'll lose 50 or 70. Maybe I'll lose a hundred grand max, you know, with taxes and maintenance, and I'll have it for, let's say, 10 years. So I look at that as spending 100 grand. I don't look at it as spending 500 grand.
- [80:54]
Graham Stephan
How has the show selling Sunset changed your perspective on everything?
- [80:58]
Jason Oppenheim
I wouldn't say it's changed my perspective that much. No. I mean, I think it's made me wealthier, you know, and more. More of a public figure. I don't think it's changed my perspective on things.
- [81:09]
Graham Stephan
But has anything changed when you go out now and that you're recognized all the time?
- [81:12]
Jason Oppenheim
Yeah, but I don't think that changes my perspective. I mean, it changes my life in as much as I'm taking, you know, photos with people when I'm out. But other than that, it's pretty similar. If you took away me taking photos, 99% similar as my old life, you know, Although also, it's. I think it's helped me build my business and my career, so I'm wealthier because of that. But, no, I don't think I'm a different Person. I mean, shit, you've known me since way before the show.
- [81:40]
Graham Stephan
You've mellowed out, though, a lot.
- [81:42]
Jason Oppenheim
That's not from the show.
- [81:43]
Graham Stephan
Okay.
- [81:44]
Jason Oppenheim
Shows does not show. Stresses me out. Mellowing out, I think, is therapy. Years of therapy, which I probably credit more than anything. But then learning not to stress out over things. I think I perfect example, like, if I got a contractor bid of $1,400, I would immediately get a rush of quarters. All I would be, this is, you know, I'm getting. This is probably only $800. Show me the labor, you know, show me the parts. Let me get a second bid. And I. And all of that would be anxiety and stress and cortisol. And I have in my phone. I literally have on my phone. Don't sweat the small things. I know that's kind of cliche.
- [82:25]
Graham Stephan
Where do you have that?
- [82:27]
Jason Oppenheim
Look, I just opened up my phone. It's on my notes. So it's. It's my notes.
- [82:29]
Graham Stephan
You know, it's so funny you did that. Let me show you this. For every decision I make, I f I go through that return on hassle.
- [82:38]
Jason Oppenheim
Ah, yeah.
- [82:40]
Graham Stephan
Like how to spend money.
- [82:41]
Jason Oppenheim
Oh, good for you.
- [82:41]
Jack
Yeah, Screenshots.
- [82:42]
Jason Oppenheim
That's very, very. I'll read like four or five for the. For the people watching here. Well, some of it's, you know, about me being a boss, so I'll skip that. Be a positive personality. And then I put like, my dogs, like Nico, Zelda, Thor, because my dogs have the best personalities. Don't be too hard on yourself. Set an example, compliment, appreciate and validate people more. Be more serious. Sorry. Be more serious. Be less serious. More lighthearted, humorous, easygoing. Be more present, patient. These are all. These are. The most important one is don't take things personally. I now try not to personalize so many things, you know, like other people's actions are a reflection of them. My therapist told me, you know, and so many people, like, you know, someone gets angry or someone's driving and they cut you off and flip you off. It's not about you. Maybe they're having a bad day. It doesn't need to get you so upset. So I now don't let other people affect me as much. I now also. This one is the most important one is don't sweat the small things. Because I used to think everything was a big deal, and I always have to react immediately and get my cortisol up and solve it. And I now realize that. But everything resolves itself. Everything. 99% of things resolve themselves, 99% of things, when you look back on them six months later, were not nearly the big deal that you thought they were. So I just take that approach to everything, that everything is small. And I remind myself every day that every issue I'm going to deal with is small. And it is, it ends up that they're small. And I have a lot of issues that I'm dealing with. I probably have more issues today with a hundred agents and four offices than I've ever had. And I'm the least stressed because I just, you know, I've kind of turned, you know, I, I, I, I look through things from a different prism.
- [84:34]
Graham Stephan
Were, were you addicted to cortisol in the past?
- [84:36]
Jason Oppenheim
Yeah, I think so. I think so, yeah. I, I used to think that I needed cortisol to have the energy to work hard. You know, I used to think that that was my motivating force. And I had to have this reactive, aggressive of, you know, cortisol infused kind of approach to things. And I realized that I'm calmer, happier, more relaxed, less reactive, more, you know, I think arguably more thoughtful and happier. And I handled just as many things, and I think the people around me appreciate all that more as well.
- [85:15]
Jack
What led you to go to therapy in the first place?
- [85:17]
Jason Oppenheim
Place? Me and my brother were fighting a lot, so I, I said, let's go like, you know, brothers therapy, kind of like couples therapy, but for brothers. And I thought it was helpful. And then I said, I want to continue to see you, you know, individually. And it got, it worked. When I, she almost quit on me, I was so. Brett and I would fight so much in therapy, and I was so different.
- [85:37]
Jack
What were you guys fighting about?
- [85:38]
Jason Oppenheim
Just silly fight over anything, honestly. We can, we can, we can trigger each other and just really get after it.
- [85:43]
Jack
Because you guys know what buttons to press.
- [85:45]
Jason Oppenheim
Yeah, exactly. Exactly. It's like 40 years of skill. We're both lawyers, you know, we just go at it. Yeah, I used to be very, just if there's one thing that I was very reactive, I would just get that cortisol rush and I would follow it. You know what I mean? And yeah, I just don't anymore. I feel it now. And I'm like, oh, you know, I don't need that, you know, And I'm just so happy. I'm so much happier. And everyone that knows me tells me, me how much like, you know, more chill I am.
- [86:14]
Jack
How long did that take?
- [86:15]
Jason Oppenheim
Five years. Probably five years. But that's me trying. I, it's me reading My list every day, that's me going to therapy every week. That's me thinking about it and wanting to improve on these things. You know, it's not. You can't be lazy about it. For me, it's like the gym for my mind. You know, I. I go. I've been going to the gym for 30 years. I go five times a week. Same. You know, you gotta. You gotta have that same approach to therapy.
- [86:41]
Jack
Why do you think it took you so long to finally make that decision, to try to actively work on it?
- [86:48]
Jason Oppenheim
Because I think it's really easy just to kind of. Well, first of all, I thought that I needed this reactive cortisol, you know, aggression to kind of continue to succeed in business.
- [87:00]
Jack
But something made you change your mind that you don't.
- [87:03]
Jason Oppenheim
I think for everyone, it's different. You know, I definitely don't think it's other people. People telling you to. That you need to change. That's not going to change it. You really have to want to change. And I don't know if there's anything other than that. Just, you know, people just have to wait for that moment for themselves. I'm not sure there's anything you can do or say to kind of make yourself ready. You just have to get to a point where you. And I'm just someone who wants to improve. And for so much of my life, improvement for me was getting, you know, getting good grades, getting into law school, opening up a business, making more money, growing that, you know, I mean, there's all these markers that we have, especially in a capitalist society, of. Of what success means. And it wasn't until I kind of viewed success as, you know, my happiness and my. My ability to kind of create, you know, happiness among people. Like, when I started realizing that that's actually what success is, then I'm like, oh, well, in order to be successful under this new definition of success, I need to see a therapist.
- [88:05]
Jack
How do you know if a therapist.
- [88:06]
Jason Oppenheim
Is good or not if you're getting better? You know, for me, I probably could have no disrespect to my therapist, but I could probably talk to a brick wall to some degree, because it's really about me telling my therapist what my problems are, what situations I got in where I did not handle myself in the way that I wanted to, and then how I wish I would have handled it. So it's almost me, like, talking to myself. And now you got chat. I mean, I think everyone should be using therapy apps now.
- [88:39]
Jack
How is ChatGPT in terms of Therapy. Having used it relative, I am, I've.
- [88:44]
Graham Stephan
Used it for certain situations and it's fantastic.
- [88:48]
Jack
I've used it.
- [88:48]
Graham Stephan
I use it for conflict resolution. I say like, give me a script to follow and it's, it's really good.
- [88:54]
Jason Oppenheim
I, I believe that chat, or when I say chat, I mean AI. I believe that AI will be 50 times better than, than the best therapists on the planet. AI will have been able to read and take, you know, essentially AI will have 500 PhDs, you know, or more. Whatever. It will know you far better than your therapist knows you could. Probably hears you all day long. It probably hears instead of having to go to your therapist and tell it them about a situation, it will probably have heard your situation. It, it probably have heard Graham on the phone talking to the contractor, you know, or whatever, raising his voice or, you know, whatever it was. So I think, I mean that's the answer. The answer for, for therapy is going to be AI the pro.
- [89:40]
Jack
I feel like the problem though with that is people assume because it has the 500 plus PhDs that it's the smartest thing that they can possibly talk to that they'll start treating it as though so anything that it says is completely without question true. And you say, hey, I handled the situation like this. And then ChatGPT says oh well, maybe it's because, you know, five years ago this happened and then you're like, it has to be that. There's no way. It's not.
- [90:05]
Jason Oppenheim
Well, people already do that with their therapist. I mean people always already give too much credit. I mean, CHAT right now is not that great, right? AI is, is, is, is still in its bind. You know, it's beginning phases. In, in five years it will be probably 99.9% right. And it will probably give you the best therapeutic answer you could possibly have ever received. You know, I do, do I believe everything I read in chat now? No, it's got, I mean it literally. We did a. Graham and I did a thing on it yesterday where I literally prompted it to pushed it in a different direction and it gave me a totally different answer. But in five years, I think, you know, this will be the answer to people that can't think critically, you know, and people that need therapy.
- [90:47]
Jack
I'm curious, I'm sure you spend a lot of time with billionaires, ultra high net worth individuals. What differences do you notice in those sorts of people as opposed to your everyday person?
- [90:58]
Jason Oppenheim
Very little. Very, very little. I don't think there's much difference between a billionaire and you know.
- [91:04]
Graham Stephan
Really?
- [91:04]
Jason Oppenheim
Yeah.
- [91:05]
Jack
I imagine to be a billionaire you have to have an outside the bell curve personnel.
- [91:09]
Jason Oppenheim
No, I think, well, first of all, let's call it somebody with a hundred million dollars or more, you know, because it's, I don't, it's all relative. I mean it's. I don't know if there's a cutoff, but no, I'd say they're successful. But I think there are millions of people that, I think that you are arguably more intelligent and a better critical thinker than most billionaires, at least half of them. And you're not a billionaire. Most of it is being in the right place at the right time. Most wealthy people are in the right place at the right time. Yeah. I'm not saying they're not smart. You have to be smart, you know, and you have to be hard working and you have to be in the right place at the right time. That's how I'd say 75 of billionaires.
- [91:53]
Jack
But I tend to believe that it's not like a, like a switch, like a light switch. And it's like, okay, I made this one correct decision. I was in the right place at the right time and I became a billionaire. It's more so like you got an opportunity and that opportunity led you another one. You made the right decision there and you made the right decision there. You failed and you learned from it. And it's like it's a series of good decisions.
- [92:10]
Jason Oppenheim
I would disagree. I'd say it's usually right place at the right time.
- [92:14]
Jack
So you think most people, if given that exact right place, right time opportunity.
- [92:17]
Jason Oppenheim
Not most people, but like most intelligent, hardworking people. Yeah, I think you could replace top 1,000 wealthiest people in America with probably a million other people and nobody would know. So you said intelligent, 3 million. But you, there are, there's. I truly don't think that, that, that I, I think arguably you, if you were put in the, if you personally were put in, been the position of half the billionaires in this planet, you would have done equaled or greater.
- [92:47]
Jack
But you said intelligent and hard working.
- [92:50]
Jason Oppenheim
Thank you. Yeah.
- [92:50]
Jack
If you said intelligent and hardworking. So you think those are very important characteristics for someone that is going to achieve that level of success.
- [92:59]
Jason Oppenheim
Yeah, I think those are the two. I, I think someone generally a very successful person is a, is a, generally a problem solver and a problem solver requires critical thinking skills and a certain level of intelligence. And I think all of that also needs hard work. But those are not skills that are super rare. I mean, I'd say 5% of people have all those skills. That's 15 million people in America that have those skills. There's probably only a few hundred couple thousand billionaires. So. So I don't think there's a big difference. I mean, I don't think there's a big difference between a lot of the wealthy people that I know and a lot of the, just the hard working, intelligent people that I know. I've got a lot of friends that are no less hardworking or intelligent than billionaires and they're worth, you know, nothing.
- [93:53]
Jack
That is a really interesting thing to point out because now I'm thinking about people we've had on the podcast or just people I've met. And you take the architect type, the, the type of human that wants to achieve billionaire status and they chase it, and they chase it and they chase it. Those are never the billionaires that I met that are like, I always wanted to be a billionaire. Every billionaire that I've met has been someone like Papa John. It's been someone who's, who's achieved this ultra wealthy status not because they wanted to be a billionaire, but because it just kind of happened to befall on them.
- [94:20]
Jason Oppenheim
Like, I, I don't think that wanting to be a billionaire. Listen, does everyone want to be wealthy to some degree? I'm sure that, you know, everyone thinks about that like there's a difference between wealthy and $100 million. I think people, I mean, there's nothing that turns me off more than someone telling me what they're going to be. You know, I think there's too much of that today. You know, another thing about most billionaires that I think I should address, they're not entitled. I mean, maybe they're entitled now, you know, because they're billionaires. They had everything, but they, they didn't get to being billionaires by being entitled. I don't think that a lot of these billionaires felt like they were the, a victim or, and I'm not saying there aren't victims out there. I'm just saying that mentality does not push you into, you know, billionaire status and, and having entitlement does not either. I think like I, as a personal example, I never felt, I always felt like I could do something if I kept at it. I never felt entitled. You know, I, I just felt like I had opportunity and I would just keep working hard. I never had aspirations of being a billionaire. I thought if I could make $10,000 a month, I could live a great life. That was My goal, that was my goals. $10,000 a month. I mean that was my goal up to not long ago. That's a healthy goal. I don't think anyone has these, anyone who has these annoyingly high aspirations is just that annoying.
- [95:46]
Jack
I tend to agree. And I also think another thing thing to to note is I think that the people that make it to that ultra wealthy status are able, they have an accurate grasp on reality. And then you have these other people that are somewhat delusional which are the people that have a victim mindset or the people that have an entitlement mindset. They fall into that category because both of those are under the premise that they are the center of everything. If you're a victim, it's because the world is trying to keep you down. If you're entitled, it's that, that you are owed everything that the world is, is there to cater and serve to your needs. You want something and it will just manifest, it will follow you. And so the other people are like no, the reality exists in the same way that just the reality exists. Like I'm here, I'm placed here and I need to do my best to see reality for what it is, play my cards right, you know and, and basically have an accurate prediction engine.
- [96:36]
Jason Oppenheim
Yeah.
- [96:37]
Jack
Of do I see reality for what it is, Do I predict if I make this action, will this outcome occur?
- [96:41]
Jason Oppenheim
And it's not. And it's not just one action.
- [96:43]
Jack
You have an accurate grasp on reality.
- [96:45]
Jason Oppenheim
I, I think you that was super well said. And I also think that some people think that it's just one decision or one big bet or whatever that's going to make them wealthy. That's a terrible approach. I mean go in and say I want to be successful at the, in this career. My, my goal is to make you know, couple hundred thousand dollars a year or whatever it is like baby steps. Don't just otherwise if you're trying to get wealthy super quick, you're going to be making dumb risky decisions. And I think what you said, it's just one intelligent decision after another and then 800 intelligent decisions and a lot of hard work later you're a billionaire. But yeah, I still don't think I know a lot of dumb rich people. You know, I don't think that, that it's intelligence is a requisite to being rich. I think there are, I think it's more likely that you're intelligent and hard working and have critical thinking skills if you're very well healthy. But I think it's probably more Right place, right time than anything else. So I would just encourage people to. I don't know if. I also don't know why people always listen to billionaires like give me a break. The guy invested in oil in Texas in the 80s. No, he's a billionaire. You know what I mean? You could be an idiot and invest in oil. Know what was it I saw, I saw this. No offense, I hate the cowboys. So I'm just going to use this example. Jerry Jones invested in, you know, finding oil in Texas in like the 80s or whatever, made, you know, $50 million. It does not mean that he's a genius or that he's got some exception. So it doesn't mean that we should sit down and listen to what Jerry Jones has to say about politics. X. Yeah, because I mean that's being at that he was at the right place at the right time. He's probably, probably has a modicum of intelligence and critical thinking skills and hard work. I give them all that. But there's no difference between Jerry Jones the billionaire and probably, you know, 15 million other people person.
- [98:44]
Jack
That's a really interesting point you made right there.
- [98:46]
Jason Oppenheim
Well, I'm not saying there's no difference between him and a blue collar person, but there, but there's no difference. If that blue collar person is hard working and intelligent and is a critical thinker and is working hard. Yeah, there's really probably no difference. I'm a decent example. Example. I mean it was right, right place at right time for me. I mean, would I still be successful? Yes. But would I be this successful? No. I mean I happen to have some beautiful women working for me on the Sunset Strip and I had a producer come up and want to create a show that ended up being a hit. That's what am I going to sit here? Should everyone listen to me now because I have, you know, some success and some money? Not necessarily. I mean, listen to me. If you think I'm intelligent and a critical thinker and I've got. But don't just listen because I have money. I was at the. A lot of my money, at least a decent amount of my money has to do with the fact that I was at the right place at the right time. I mean, I'm not gonna take credit for that.
- [99:35]
Graham Stephan
What about being a good boss? You said you had other notes on your phone.
- [99:39]
Jason Oppenheim
Positive reinforcement at the office. Compliment everyone and be specific. And don't criticize mistakes. Make them teachable moments. Those are two that I try. I mean I fail at the. That every day. You know, you can't be perfect. But I try to remind myself I do better with positive reinforcement. You know, when I was an attorney or something and someone says, hey, great work on this. You know, let's focus next time on. I think you can do even better on this part. You know, that, like that kind of positive. As opposed to saying, dude, what the. You know, why'd you give me this? You know, look at all these misspelling. Like, don't. If I don't think people really react so well to being criticized. I know I don't.
- [100:18]
Graham Stephan
So how do you. How do you motivate someone if you find them falling behind or you think they're maybe just not doing as much as they could?
- [100:26]
Jason Oppenheim
I mean, listen, I guess there's something called like a. I. I think like a positive. Like a sandwich. You're supposed to sandwich it. Yeah. So you say something. Sandwich. Yeah.
- [100:33]
Jack
Criticism sandwich or whatever.
- [100:34]
Jason Oppenheim
Yeah. Either way, I mean, there are. I don't, like all these rules, and I don't actually have never used that in my life, even though my therapist told me to. It's too, like, I don't like, you know, know, fake, but just put yourself in their position. Like, I mean, I get, you know, things that I think could be done better all the time. I just don't think you can just. You can't just rip on somebody. I just. You have to think about what is going to make them want to do a better job. You getting upset at them is not going to be. They're not going to walk away and be like, oh, I definitely am going to do a better job next time. They're going to walk away and be like, oh, you know, so it's kind of common sense. I mean, you just have to be motivating and you have to have. I think you actually have to care. Like, I truly care about the people that work for me. I care about their quality of life. I care about their happiness. So, you know, you take the time to kind of nurture that and develop that. I'm not excellent at it. I'm a hell of a lot better than I used to be. I mean, I think it was probably hard to work for me 10 years ago, probably even five years ago. You know, I was really tough, aggressive, negative, terse, reactive, you know, very demanding, very detail oriented, but not in a constructive way, in like a critical way. So, you know, I think you have to create a culture of do people want. And I always ask, you know, the people in my office, like, what's going to make you happier working here. I think if you create a culture where people want to come to work. I look forward to Monday morning, morning as much as I look forward to Saturday morning.
- [102:08]
Graham Stephan
It's so funny, we just talked about this last night I went to a doctor's appointment and they're closed from 12 to 1 for lunch. And I show up there at like 12:55, they open the door and the doctors are walking in and they say, oh man, it's almost 5pm we could almost go home. Three more hours until I'm out. And they're like, what are your plans for Friday night? Oh man, it's almost there. And I remember I briefly had an experience where I would think to myself, okay, only two more hours until lunchtime. And then after lunch I was like, okay, only three more hours until I go home. And then after one more day, it's Friday and then it's the weekend and then Sunday. I just remember that dread of like, man, I gotta be up at 7am that next morning. I haven't felt that way in like 20 years.
- [102:55]
Jason Oppenheim
Same. I haven't felt quarantined since I was a lawyer. Yeah, yeah, it is.
- [102:59]
Graham Stephan
That is thinking through that of, of hating what you do all day just to be able to.
- [103:04]
Jason Oppenheim
I wouldn't say it's hating, I'd say it's not enjoying. Sure, yeah. I mean, unfortunately that's most of America. And listen, most people are, you know, I'll be. Most people are probably cut out for that, right? I mean, not everyone's going to be an entrepreneur. You can't have that. Society wouldn't function. So, you know, I think for a lot of people that's probably fine and acceptable. I think for the people that it's not fine and acceptable for it. They go off and do things like you and me. I do not like nine to five. You know, I'm not cut out for it.
- [103:37]
Jack
We got a question about creative finance deals. Do you get a lot of seller finance? Have you heard of sub 2? What do you think about any non conventional way?
- [103:45]
Jason Oppenheim
I don't like any of it. I honestly, anytime anyone even says the word creative financing, I'm like, shut the up, get out of here.
- [103:52]
Jack
Doesn't it make sense if that's the thing that can push a deal through? For example, if someone buys a house three, four years ago and they got a two and a half percent interest rate and now rates are five and a half, 6%, doesn't it make sense to try to just sell or finance the equity that's there or pay someone money to be able to take over the loan.
- [104:10]
Jason Oppenheim
You can't do it. There's no way to, there's really no great way to keep a loan and transfer an asset. Trust me, I would do it if I could. I have been in this business for, for, you know, 15 years, done billions of dollars in deals. Not a single deal, A single deal have I been able to have the original loan kept.
- [104:34]
Jack
So we've spoke to this guy, Pace Morby, and this is like his whole big thing. He's got like couple thousand units or something. He talks about it, he's like the guy on YouTube that talks about creative financing specifically. Also sub two, which is basically you go in, you take over the mortgage payment.
- [104:48]
Jason Oppenheim
Payment.
- [104:48]
Jack
So you just send the money. And then I think what he does is he puts the deed in a trust or something and it doesn't count for a sale. And then, you know, you have the due on sale clause of the, of the loan.
- [105:01]
Jason Oppenheim
Yeah. And that's when it, which I think.
- [105:03]
Jack
It'S which like only ever. He's only ever been called on once out of his thousands of deals that he's done for this.
- [105:08]
Jason Oppenheim
But he doesn't he remain liable for the asset, liable for insurance, liable in litigation. So you're saying he's the only, he's the only owner. How is that any different? How is that really substantively any different than a lease with an option to buy? It's. It's similar. Yeah. Yeah. I mean, that's not a transfer of an asset. I'm not saying it's dumb. You know, I think a lease option can make sense, but it's just, I, I, My understanding is that he would still be liable for anything and everything. Maybe in commercial real estate, you know, you can isolate that risk a little bit. Maybe it's a little bit different. But in residential real estate, there's really no great way to do it.
- [105:49]
Jack
So you're saying the seller in this instance, if you are selling a house, sub 2 to someone else. So sub 2 is like when you just take over the payments, basically, then as the seller, you're still liable for anything that could go wrong with that.
- [106:01]
Jason Oppenheim
Yeah. Because you probably created some type of joint venture or trust or whatever it is. So his also. The other thing too is you have to remain the sole owner. Owner. If there's any other ownership, then the bank can call the loan.
- [106:13]
Jack
But he's, he's been called by the bank once, but he said most of the time the banks just want to ignore it, because this is just one small thing that's been sold off and sold off and sold off.
- [106:21]
Jason Oppenheim
In actuality, as long as I'm not going to risk my loan, as long as they're performing, then I agree that you're right.
- [106:28]
Jack
And there's also, I will say there's a, there's added benefit to the seller that, that we haven't even considered, which is, you know, if you're selling a house at a 2 1/2% interest rate, basically when you take over the LO. Then the person can overpay whoever's buying the house or what? You also see.
- [106:46]
Jason Oppenheim
Wait, let me ask you a question. I own a $10 million house, right? I have, let's say I have $5 million of equity and I have a $5 million loan at 2.5% and I structure this. Does this guy give me cash up.
- [106:59]
Jack
Front so you could. Yeah, yeah, 100%.
- [107:01]
Jason Oppenheim
So let's say I have.
- [107:02]
Jack
It'd be similar to a lease option.
- [107:03]
Jason Oppenheim
But that cash upfront is going to be treated as income, whereas, whereas on sale, it's treated as long, long term capital gains. So Now I'm paying 50% tax on the, I do wonder on the, on the money that he gives me when I could be paying 28% tax or.
- [107:18]
Jack
What you could do is just increase the sale price of the home, right?
- [107:22]
Jason Oppenheim
No, I'm not sure that. How, how's that solved?
- [107:25]
Jack
Well, you could. Wouldn't it solve it if you just sold the house at a premium? So for something that's not technically worse, sell it.
- [107:31]
Jason Oppenheim
Remember, you can't sell it because if you sell it it, then the, the bank calls the loan. They transfer the asset.
- [107:38]
Jack
They haven't.
- [107:38]
Jason Oppenheim
No, he was, he's not transferring the asset. He's still, he's still, he's still on title. Otherwise, of course, I have no idea when.
- [107:46]
Graham Stephan
Even when Pace is describing it, I'm.
- [107:48]
Jack
Like, I mean, I'm not a big real estate guy, so I'm.
- [107:50]
Jason Oppenheim
So I, there's no way for me to transfer this house to another person without the loan being potentially called or. No, I mean, it would be called if I transferred it to him now, could I, I put it into an LLC, let's say, and then have him buy 50% of the LLC or something like that. Technically, the bank can still call the loan and then he'd have to buy the LLC by giving me money. So let's. I'm trying. I mean, the whole point of a sale is I want to get my $5 million of equity. Right. But if he gives me $5 million, then it's income. And now I got to report $5 million of income and pay 50% tax on it. There's just no way to get my equity out on this. There's just no way. I mean, I've thought about it. Even on a long, even on a long term lease with an option, you're still gonna get an upfront payment that's being treated as income. It's 50 taxed at 55%. That's crazy. Whereas when you sell it, it's long term capital gain. So you can't mess with that structure. There's no way to get your equity out except taking out a line of credit, you know, if you want cash. I'm just telling you there's no good way to do this. I would be happy to argue with that guy. Guy, because I just, I don't, I don't buy it.
- [108:58]
Graham Stephan
He says for the seller, the benefit is that if you're trying to sell your place for a mil, you know, a million, you're not getting it. Now you could sell it for 1.1.
- [109:05]
Jason Oppenheim
Yeah, but you're not getting 1. 1. I mean, so it's just a number on a piece of paper. You're really getting, you're, you're really continuing to take all the liability. You're getting your, you're getting your monthly nut covered, but you'd be getting that covered by rent anyway. So what? So I, and you don't get any equity because if you're getting any equity, you're paying massive tax on it. So, so where's the seller benefiting from this? I don't get it.
- [109:30]
Jack
I mean, you could argue for the people that aren't in a rough financial position. It's more like an annuity. And then you could argue for the people that are in a rough financial position. A lot of people, if they hold.
- [109:39]
Jason Oppenheim
On something, let's say my example, this $10 million house, right? And it's only costing me $20,000 a month because I've got such a great loan on it and low property tax basis. So this guy's paying me what, 20, $25,000 a month? Month. I mean, he's, he's just.
- [109:54]
Graham Stephan
Maybe he's paying 30,000amonth.
- [109:56]
Jason Oppenheim
Fine. But I, presumably I can rent it for 30,000amonth. So maybe he's. So why, so how's this guy, I mean, he's getting all the benefit.
- [110:04]
Graham Stephan
Yes.
- [110:04]
Jack
But also there's the situations, because he.
- [110:07]
Jason Oppenheim
Doesn'T do this Typically sell it at all.
- [110:08]
Jack
Well he's not doing this with like massive million dollar.
- [110:11]
Jason Oppenheim
Who cares?
- [110:12]
Jack
But no, no, because a lot of the people they're getting in a position of bankruptcy and they don't want to file for bankruptcy if they're underwater in the home. And then he's basically able to take and monetize the home more effectively than they would be.
- [110:22]
Jason Oppenheim
How. How is he able to monetize it more effectively?
- [110:25]
Jack
Been a landlord before and then that's.
- [110:26]
Jason Oppenheim
A totally different argument. You're saying he's a better property. I don't buy that. That's a different argument.
- [110:32]
Jack
I don't buy it is a different argument. I'm just saying that that makes this option a little bit more viable. Then he's taking sides of the.
- [110:36]
Jason Oppenheim
Then, then the seller is not a, is not a, a good commercial actor. I mean if he's, if he's buying properties off idiots, then sure. But if you have an intelligent seller, why would an intelligent and I don't even mean that intelligent. I mean an average seller who just know has a modicum of, of understanding of his asset, why would he want to enter into this transaction? I get why that guy wants to, I totally get why people would want to buy like that. I've had a dozen buyers try to buy my, you know, buy properties for my clients like that and I tell them to off. Why would the seller want to do it is the question. It's a fake sale. It's not a real, it's not a real sale sale. You think you sold it for a million fifty, but you didn't. You, you, you got, you got $20,000. You got whatever you rented. You probably could get more money just renting it out. You're never going to get your equity. When are you going to get your equity?
- [111:30]
Graham Stephan
I guess with renting you would be responsible though for repairs.
- [111:33]
Jason Oppenheim
You still are. Well you could if the, if the buyer you could find a tenant. That's why I just get a property manager and just say hey, you got. I'm.
- [111:41]
Graham Stephan
Because then, because then the buyer for any. And if the buyer defaults on that you would take their down payment.
- [111:47]
Jason Oppenheim
Let's just say how is than a, than a good property manager. Why is, how is this guy.
- [111:52]
Graham Stephan
The buyer is going to be responsible for the issues with a property manager.
- [111:55]
Jason Oppenheim
Property manager. Let's say you hire a property manager.
- [111:58]
Graham Stephan
Still have to pay the property manager and you still have to pay for.
- [112:01]
Jason Oppenheim
Well, but at the end of the day, if the dollar amount's the same, the dollar Amount.
- [112:05]
Graham Stephan
Like, let's say a roof repair like you sell.
- [112:06]
Jason Oppenheim
Let's say, let's say you get a profit. Let's say, listen, let's say you have an asset that's only costing you $20,000 a month. You know, obviously it's going to. It could rent for more. And you get a good property manager to say, hey, this property manager says, hey, I'll guarantee you I'll rent it for 10 years and I will pay $20,000 a month and I'll handle all the everything property. It's like a triple triple net. Why don't we look at commercial. Sure. How is this guy any different than a triple net tenant? Except that he has a right to take the asset. He's just a really bad triple net tenant. I get why he wants to do it. I would love to be. Hey, I'm going to offer you, here's a triple net lease. I'm a tenant also. I have a right to buy it at this price. If I, by the way, if I want to, or I can, or, or, you know, or I'm in a forfeit recession, I can. If it's ever not in my financial interest, I'm not going to buy it. If it is in my financial interest, I will buy it.
- [112:59]
Jack
By the way, guys, clearly we are filming currently in our studio, but recently you may have noticed we're on the road for a lot of these podcasts and it's very, very difficult to lock down a studio space.
- [113:08]
Jason Oppenheim
However.
- [113:08]
Jack
However, White Glove Estates, we were there in Los Angeles. We filmed an episode with Mizkif and with Stable Ronaldo and Mike Mayak, he was also there. They were so generous to let us stay there, film our podcast. They gave us the entire space for nothing just because they're very friendly people.
- [113:23]
Jason Oppenheim
So they're also. They're also right next door to the Oppenheim Group. They're my best friends and they do all of my personal properties and probably 90% of my clients work. So I love them as well.
- [113:33]
Graham Stephan
Yeah, check them out the link down below in the description because they've seriously helped us out a lot.
- [113:37]
Jason Oppenheim
So we should say what they do too. They do like home, home remodel models, you know, AV pretty much design everything.
- [113:45]
Graham Stephan
The best of the best, like the highest end stuff you could imagine. They do it all. So again, if that's you, the link is down below.
- [113:50]
Jason Oppenheim
Oh, they actually built out all of the Oppenheim Group offices as well. So if you like those. Yeah, they did all of them.
- [113:55]
Jack
Looks great in there.
- [113:56]
Jason Oppenheim
Thanks. Yeah, cool.
- [113:57]
Graham Stephan
Thanks so much, Jason. Your info will be listed down below. Thanks so much, and thanks, guys.
- [114:02]
Jack
Till next time.