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In this video, I want to talk about an 83% drop while another asset class rose 11%, and this video is not about pushing you into a particular type of investment. It shows how you can use different asset classes to ensure you don't go broke. So whether your asset class is Bitcoin, gold, or real estate, there are important lessons here, and if you don't want to lose everything, I strongly advise you to pay attention, because you know what?
Warren Buffett is a convert, and one of the big secrets is that Buffett does just that. This applies not only to him, but also to what family offices do. You might be wondering, “Wait, what do you mean by a family office, like Uncle Joe’s?” No, no, no. Family offices are when you become so wealthy that you have virtually no outside investors in your small portfolio.
Your portfolio is so big because you're Michael Dell or Elon Musk that you just hire a team of people to manage your money like a business. That's what a family office is. It's literally your own investment company for capital movement because you're so rich. And the goal is not to say, "Oh, yeah, just be rich, dude." No, the goal is to find out where Warren Buffett and the family offices are starting to invest money, and whether that is a potential signal or warning for us to do the same.
In my opinion, the answer is yes. So I'll give you some statistics. Then I will move on to practical steps we can take today. This video will not only contain information about the market. It will also contain a practical step-by-step guide that you can apply to hopefully make money. OK. So let's get started.
So , first we saw a strange shift that made the front page of the Wall Street Journal, and it may sound strange, but shopping malls grew 13% year over year . Yes. Shopping centers. You know, those places that were considered "dead" since COVID? Okay, that's not the main signal. I'm not saying, "Don't be poor, buy a shopping mall." It's about companies starting to return to categories that were considered "dead" , and this is a signal.
Specifically, RBC and Campton prepared this study in 2025 . And they noted that family offices' intentions to enter the residential real estate market are growing — by 23% per year. JP Morgan later stated that we see 35% of family offices looking to increase their share of assets in this area as of February 26.
In other words, we see this trend where wealthy people say, “ Hmm, interesting opportunities in real estate.” And again, this is not just a real estate show, it is a demonstration of sector diversification. So, these are just a few pieces of data that align with what Warren Buffett does. Remember, Warren Buffett had about $44 billion in cash back in 2000, before the 2008 crash.
This allowed him to make very profitable deals, buying preferred stock of Goldman or Bank of America, these crazy buyouts when everyone was saying, "These are worthless companies." They depreciate to zero. This is the end of the world. Buffett had $44 billion in cash and could act aggressively when everyone else was panicking, right?
An old saying goes: " Be careful when people are greedy." " Be greedy when people are afraid." He really did it. Today, Berkshire Hathaway, in keeping with his spirit, is doing it again, but now they have nine times the cash reserve. They now have almost $400 billion in cash. This is madness. And just recently, the amount decreased slightly in one quarter, because they ended up buying an entire company in a certain sector.
They bought Taylor Morrison, a developer , a boring developer in the age of artificial intelligence, a boring developer. This is what they bought. And it's strange because even though they bought it, you know, a few months ago, Goldman Sachs today, without mentioning it specifically, wrote in an institutional note.
They pointed out right here that with 10-year yields around 5% and Brent crude at $105, not far from the $ 110 level that started the reversal last time, spreads in housing assets like developer ETFs (it's called ITB, it's just one example of a developer ETF), quote: "are interesting given their high macroeconomic exposure to yields, energy prices and ultimately housing." This is exciting.
So if we go to the ITB ETF, dig into it , zoom out a little bit on the weekly chart, we see that the peak was about 2 years ago, October 2024 . And since then, it has fallen quite a bit. We are at $90 in after-hours trading, divide by 127.12, which gives exactly a 29.2% drop. That's quite a lot for a homebuilder ETF .
OK. So, where are we getting at with this? Because for now, we have family offices that want to diversify, perhaps from the ongoing AI boom , and at least get a bigger presence in real estate, specifically, residential real estate was mentioned separately. Our shopping centers have grown by 13% year-on-year .
We have Warren Buffett sitting on huge piles of cash, and the first purchase that Greg Abel makes at Berkshire Hathaway is a homebuilder, and now Goldman Sachs is saying, "Hey, maybe we're at the peak of the fear for this homebuilder ETF called ITB, iShares Home Construction ETF." I want to clarify, I do not own this ETF, okay?
I'm not getting paid to promote this [ __ ], okay? I'll be very frank about this. This is all really interesting. Is there a connection between what we see in that data and this? And the answer is yes. So I intentionally downloaded the data directly from the St. Louis Fed. No SHI lines in this data, okay?
Direct data from the St. Louis Fed. So I'm not getting AI crap, I'm getting Federal Reserve crap. Some, there will always be some [ __ ], okay? Anyway, I downloaded them and then loaded the period from 1998 to 2004 into the graph. And I wanted to speculate how $100 performed in the Nasdaq 100 compared to real estate?
And that was the whole point of the diversification issue, because, you know, we're all so excited about AI and data centers. I mean, me too. Like, that's pretty interesting. And then there's the thought of whether this is an opportunity to buy on the dip because of the panic that they're going to raise rates, or this, or that, or something else.
It doesn't matter. Is there an opportunity to buy on a decline? You know, we are 4% below historical highs. Look at this graph. It was truly madness. The Nasdaq 100 fell 83% from peak to trough. Ultimately, it was saved by the Federal Reserve. Essentially, they turned on the printing press. They rather verbally announced that they were going to rescue and support the markets.
Money printing didn't really get going on a crazy scale until 2009, after that housing market crash. To be fair, it was a housing market crash, right? So there are technological crashes, and there are housing market crashes . And sometimes crashes in the housing market can have consequences, and sometimes crashes in the technology sector can have consequences too.
It's not always as clear-cut as it was with the dot-com bubble. I intentionally used the dot-com bubble as an example because everyone who talks about this AI bubble is referring to the dot-com bubble. So, I understand that it's not like you can study the past and try to learn lessons for the future.
I'm not here to say that stocks are bad and real estate is good. I'm just trying to learn some lessons from this . What does this tell us? Well, anyone who held assets —you invested that $100 in 1998 until the beginning of 2005, that is, until the end of 2004—you would have actually made more money on technology stocks , despite that 83% drop.
Your $100 would turn into $164, and in real estate your money would turn into $159. So, even in this cut, stocks still outperformed real estate, even with that 83% drop. What you, of course, were hoping for is the technology index . This isn't some stupid house made of timber and drywall, you know? We already know that we don't build them like the Germans.
It feels like a block, Kevin. Okay. I know that everything is "besser" in Germany. Median housing prices. Look at the crash that real estate experienced in 2001 . -1%. That's all. Do you know what happens when stocks fall 83%? You are selling. Not because you put it in your pants, but because you know who's calling you every damn day?
Your bankers. They're like your friends. They act like people from J.P. Morgan. Gay. You know, Kevin, buddy. You know, Tesla is in the red. What do you think about selling some? We could optimize taxes a little bit due to losses. Well, man. Well, man. And you're like, " No, no, no, man. I'm not going to sell this." Two weeks later: "Hey, man.
It's down another 8%. We could optimize taxes even more now because of the losses ." I need to get my commission, buddy. Every idiot around you when stocks drop 83%, literally so does your accountant. Oh man, you're going to have to pay a lot of taxes. You did a good job, even though we are in a recession.
You know what you can do is optimize taxes at the expense of losses. That sounds so reasonable. Because when the market is on the rise , everyone says: "I'll hold on." "I'll be reinforced concrete, baby." And then when you're down 83%, everyone—your wife, your kids, your mom, your dad, JP Morgan, your accountant, and even your kids' teachers at school and the guy who helps you bake cookies—they're all telling you, "Dude, you need to sell." This is more than just psychology that needs to be overcome.
So the problem with the 83 % drop from peak to trough is that most people end up selling. Or they will be liquidated because they were on margin. So this is just an example where real estate was actually a hedge against the big " tech bubble" of the dot-com era in this segment. But keep in mind, today I don't believe that the Federal Reserve will help us in the same way that it did in 2001.
I think they will lower rates to zero, which would be good for real estate. They lowered rates here too. But they have pledged to support the market and expand the balance sheet, which is something Kevin Warsh has vowed not to do. Of course, he can change his mind. He may change his mind. But this means that today you have a much higher risk that you will not receive this assistance and will not break even or will not find yourself slightly ahead thanks to real estate.
Everyone is now criticizing real estate or other sectors that are showing poor performance. Again , I'm not trying to show only real estate, it's just an example that sometimes seeking diversification away from the technological madness is a good idea. You can't be angry at people for having such thoughts.
So here I want to talk practically: what can be done? And how can you prevent yourself from being “dumped” because of it ? Of course? This is a graph with the main findings. Stocks have fallen 83%, you are being liquidated, while real estate remains in the black at the same time. Of course? Stocks are crushed, home prices continue to rise .
It could be gold, it could be another sector, I don't care. A few lessons. Lesson number one: debt is not your friend at the peak of the market. It's normal to love debt in some markets . This is risky. You will always take risks, but debt will destroy you as you approach the top of the market. So the closer we get to euphoric levels, the more we have to think: I don't know how long this bubble will last.
These are the times when you should be on the lookout for cash. Well, maybe not necessarily cash, it means selling your shares. It is at such moments that it is worth thinking about paying off debts. So, practically, and that's why I mention housing, practically, many of you have mortgages on your homes.
Many of you watching have rates of 5, 6, 7%. Some of you have rates of 2.8%. Am I really worried about those with rates of 2.8%? No. Does it make financial sense to repay it? Not quite. For those of you with over 5%, does it make sense to start making extra payments and paying off debt? Yes. And what does this allow you to do or use in practice?
Well, here's what's happening. Real estate does wonderful things for you when and if a crash happens. So, when a crash happens, one of the first things you can take advantage of is the fact that not all real estate is suddenly empty just because there's a " bubble" in the stock market. In fact, many more people, unfortunately, become renters in these situations, and many more people start to worry about preserving their credit history, because if they have to change jobs and they go through a background check, they don't want to be the ones who let the landlord or lender down.
They want to be able to use financing. They want to be sure they have the flexibility to move if needed. So, it's interesting that during the tech housing crash, and even during the dot-com bust, or excuse me , the Great Recession, you could see more people moving into renting. This means rental property, whether you own your own home and rent it out instead of selling.
Rental property can be a kind of "safety cushion" for you. And this "airbag" allows you to do several different things. One of the first things you can do with rental properties , if you're a regular consumer, an individual, not a company, is take out a 30-year fixed- rate loan, a Fannie Freddie loan, and you can essentially use that new debt when rates go to zero to do whatever you want.
Expand your business, buy another business, save someone by getting a large stake in the capital, or buy even more real estate. Real estate essentially becomes your piggy bank. There are two ways you can do this. Again , as a consumer, you can typically get up to 10 30-year fixed-rate loans per person.
So, if you are married and each of you individually meets the requirements to purchase real estate, you can get a total of 20 of these 30- year loans. This is an interesting strategy that is worth thinking about now. If you control your and your spouse's income through an S corporation, you should receive a salary.
The other party must also receive a salary. For example, my wife should have a salary and I should have a salary. So, if you get to the point where market rates fall to zero, you will already have a two-year history of stable income. It will be very easy for you to get that 30-year fixed rate loan, and you can actually get up to 20 of those Fannie and Freddie loans.
You can now also get a 30-year fixed- rate loan based on your debt-to-income ratio. The rates are usually a bit higher, the fees are too, plus there are penalties for early repayment and things like that. So that's okay. But the more you paid for your property, the more cash flow you have, and the more you can borrow on a loan with a debt coverage ratio.
I'm not here to explain how it works. Essentially, it's just an estimate of the cash flow of your property, and we'll apply a small multiplier to determine how much we're willing to lend you. Usually it's around 1.25. Again, we won't delve into all this nonsense. Okay . This is a very useful choice for you.
This is what real estate gives you during a crisis. Possibility of choice. Good. Further. When I mentioned that you should consider paying off your mortgage, you can do so more effectively if you have a small balance on your first mortgage. So, if you have a second loan, you should pay it off. If you have a large balance on your first loan, it doesn't hurt to make additional payments.
Try to speed up the debt principal repayment cycle. So each month you pay off a little more of the principal, as this again gives you more room for future refinancing. OK. Further. Another thing people do with their homes is open up what's called a home equity line of credit , sometimes on their primary home or a second home, and just keep that line open without paying anything except an annual fee of $80 or so , just to have it .
You should understand that when a crisis occurs, banks like to freeze such credit lines, so you should exhaust them and transfer the funds to a savings account. Some even transfer them to another bank so they can't automatically write them off, but this is more like panic. We talked about this during COVID, and when that happened, people started withdrawing credit funds, and then they talked about freezing the lines, but in the end the Fed bailed everyone out, so in that case it worked out.
Next: The more real estate debt you pay off, and even if you don't own any real estate today , you might think, "Hey, I'm going to put some money aside." "I'll sell some shares." "I'll go buy some real estate or something." Keep in mind, this is just a piggy bank. You can literally be a stock market investor using real estate as a piggy bank, saying, " Okay, I'll take some profit here." I made a very good living from this .
I will buy a rental property, put down a little more money, and it will become my piggy bank for the future. Such piggy banks, in my opinion, become a base of assets for which funds can be raised not only from creditors; I don't really like partners, but if you want to collaborate, you can raise money through partnerships.
You can raise capital by selling shares to shareholders, or , again, by borrowing money. These are all options for getting money out of these piggy banks without selling assets, which would have tax consequences. Of course, I'm greatly simplifying three important points, because, of course, if you sell shares, the question arises: are you diluting your stake?
Are you selling ownership of the company? And what will be the tax consequences of this? There are nuances regarding the issuance of shares compared to their sale. There's a lot of things there . I'm not trying to make this complicated. The simple argument is that you have a choice. We understand that.
So, you have line of credit options , debt coverage ratios for rental or commercial properties, a 30-year fixed rate Fannie Freddie loan option, a home equity line of credit option, and other possibilities. When you put it all together , you realize that real estate has a unique feature that stocks don't have.
There are other asset classes of this type. Gold is a well-known example that people like to compare. One of the reasons I don't like gold for this is that I don't think Kevin Warsh is going to print money, which is a bearish signal for gold, because that would stabilize the balance sheet of the US government, as crazy as it sounds.
Uh , gold does n't feel its best in such an environment. So, again, you need to diversify your portfolio with something else. You can even choose different sectors in the stock market. There are certain stocks that can show growth during a recession. I believe one reason McDonald's stock is falling is that people are so convinced there's no recession, which is no surprise: when the job market was at its worst late last year and early this one, McDonald's stock was up.
As the job market has improved over the past 9 months, from 6 to 9 months, McDonald's stock has declined. So , up when the labor market is worse, down when the labor market is better. This is like a counter- indicator. This is kind of strange. So there are stocks you can also diversify into. OK. Now, what do we think?
What is our strategy? Well, I'm convinced that in my company Reinvest, at least, and probably in many others, 85% of our capital goes into real estate. Realistically, I think it's closer to 100% because we take some of our operating cash flow and reinvest it in the software we build, or money markets, or liquid securities, or something else.
But this is a very small percentage of the value of our company. We believe that at least 85% goes into real estate. And so we think that puts us in a very unique position. We are a company with nine-figure capital without bank debts or mortgages. We literally have a wonderful piggy bank. And the reason I'm mentioning this now is because I know that when disaster strikes, rates will go to zero, and we can, you know, say, when the recession hits, whenever that happens, we have $150 million in real estate.
Let's just assume, okay? So, we have $150 million in real estate in the future, and we can leverage, say, 35% equity and 65% debt. Then 150 would represent 35%, and we could end up with a total of about 428 million, which is pretty impressive. This means that we will be able to take on about $278 million of asset-backed debt, while still having 30% equity in all of the properties, presumably at zero interest rates.
So you can see the power of such a piggy bank. Take a piggy bank of 150 million and turn it into a piggy bank that still has a nice margin of safety of 35%, turning it into a piggy bank of almost half a billion. And of course, you can use any scale you want. You can take 120 or 150 thousand of equity and turn that into 500 thousand of assets that you own, right?
150 thousand assets turn into 500 thousand. 35% is a good number, as that's about how much real estate fell during the housing market crash . This was during the 2008 crash. So, real estate is not immune to collapse. I just don't think this is a real estate cycle that's sustained by the " ninja loans" and crazy debt that we saw in 2008.
We see more of this in the AI sector. To be fair , this debt is not created and secured by teachers taking out millions in loans, but by companies like Meta, which have very powerful advertising departments and spend their free cash flow on investments in computing chips. So, yes. I mean, I don't want to use the expression "this time it's different," but it's actually a different type of borrower.
This could just mean that the bubble is much bigger, right? It doesn't matter how big you are. I don't know what the saying goes, but the bigger you are, the more painful it is to fall. That's just how it is, right? Yes. I don't know if that's optimistic. But in any case, think about it. What can be done?
Well, there are many things you can do in practice. And let's write down some of them. So I'm going to propose a Goldman Sachs strategy. Goldman Sachs' strategy is to consider investing in ETFs similar to ITB. Of course, this is not personalized financial advice. I am not your advisor. I don't know what your situation is.
I'm not going to do that because I feel like we're our own developers. That is, we are them. We are literally developing over $10 million worth of real estate . It's probably over $20 million worth of real estate . So we have a lot going on, depending on whether we get some of the permits we're waiting for.
But, in any case, you know, this is an option for those who are not going to build their own real estate. This is a real headache. Creditors—that's interesting, but I always say that you need nerves of steel for that. And I am engaged in lending. I do n't really like borrowing money myself. But I think the loan servicing business is an interesting investment, as they are currently in decline .
And when, if rates go down, I think they will show very good results. Here's an example right here. This is Rocket Mortgage. They also purchased Mr. Cooper, and Redfin. Most people have n't understood this yet . So, creditors—that's interesting. There are also riskier options. You know, I have a stake in Rocket Mortgage.
I always like to remember my prejudices. There are no investments here. There is a stake in Rocket Mortgage. There are other lenders you can consider as well . Paying off debt gives you more options. So, this is the repayment. I know it hurts people to hear things like, “Oh, what? Do I have to make an additional mortgage payment?
" Why would I do this ?" Well, because you are accelerating the repayment of the principal amount of the debt. You build equity faster. I think there is a lot of value in this. Of course, you can also buy shares in developers, like Warren Buffett does. So remember, I mentioned that he buys developers.
There are many good developers. I don't think they're all incredibly good buys right now, but you can do an analysis, whether it's Toll Brothers or Lennar. Not sure if Buffett still owns them, but you can look. Yes, take a look at Lennar. Oh my God, man. Lennar is falling in price. Another company that Buffett at least invested in—I'm sure he still does, but I have n't checked—is Pool.
Pool shares are falling rapidly. Wow, that's terrible. A $6 billion pool supply and distribution company . I find this very interesting. Lennar, boy, I'm going to have to do fundamental analysis on these companies. Subscribe to the channel, maybe I'll post something. But yeah, I mean , look at this.
Lennar had 187 and is currently trading at 76.63. 187. Wow, seriously? They fell by about 60%. Dude, real estate stocks are collapsing right now. We only noticed this 28 minutes into the video. Sorry, I hope I don't come across as someone who's spouting nonsense. Some people leave comments like that, but I think they want a quick 10- second insight, don't get what they want, and leave.
But I think there are few of them. I think a lot of us look at this as analysts together, like, "Oh, right. I did n't even think about that . Damn it." And it's not about making you think that way. This is just to get you thinking, because in the long run, each of us has our own strategies, and we are responsible for how we make money.
I just like to be upfront because I get a lot of comments like this where people say, "Oh, Kevin, well, you know, this happened. Why didn't you tell us about it sooner?" And I say, "Well, I told you. I guess I wasn't clear enough." So in future videos I will be even clearer. I'm not saying I can predict the future .
I don't even have any promo codes to sell you anything. This is more of my own theory, and it could be completely wrong. There are real risks. You know, you should pay attention to Simon Property Group, they are at a pretty high level now. That is, they have been steadily increasing since 2025. Of course, rapid growth after COVID.
This is an impressive result for Simon Property Group. Trading REIT. Literally grew, I think they are REIT. In any case, it has increased 5 times from the range of around $40 after COVID. You know, it was up to $30 a minute. This is madness. So the next time you go to the mall, just remember that the same mall you thought was "dead" could have yielded 5x the profit, baby.
In any case, subscribe to learn more. I'm not trying to, you know, be nostalgic for the past. We try to learn from the past and make better investments in the future. And this is where my real estate startup Reinvest comes to the rescue. I guess I'll take another minute to make a presentation. This is also accurate and it's not perfect yet, but that's why we're building it.
So for the four of you who are left at this point in the video, this is exactly why we're building this. It's not perfect yet, but we're working on it. This is an app where I can go and enter the county. We're going to add a map here to make it a little easier to see where the deals are. We have so many cool ideas for this.
We are very excited about this . But anyway, here's my application. You can get it at meetreinvest.com, but we don't have a coupon right now, so you'll have to wait. Or just buy it. You don't have to wait for a coupon code. 340 Sebring Avenue in Orlando. I watched this. It seems like it's already under deposit.
But we should check, I think it just went under deposit. Let's check. You can see them, of course, before they go under deposit. Let's look at the comparative data for it to see if it was worth it. Yes, it just became "on hold". Look at this. I can tell you by the look of it, this is what you need. Oh my god, that's real sex appeal.
This is what your boyfriend Meat Kevin calls sexy. See what's on the floor there? It's glue, and I like it. I'll have to pay someone to scrape this filth off. God, even the lamp looks dirty. This is just my type of lamp. Those cabinets look like they're from the 90s. They actually don't look that bad.
These are not 80s cabinets. These are cabinets from the late 90s or early 2000s. Actually, I'm leaning towards the early 2000s. Do you know why? See those six-panel doors? And see those Decora switches on the countertop? We have already left the ivory age. This must have been early 2003 when they were doing renovations here.
Oh yeah, the Formica countertop, disgusting. The dishwasher needs to be thrown away. No, the dishwasher costs 400 bucks, dude. They are not that expensive. They have really become much cheaper. Oh, the tiles are actually in great condition. Of course, the toilet needs to be replaced. But the tiles are in fantastic condition.
It goes around the entire perimeter around the sink. Get rid of that ridiculous window air conditioner. Look at a fan that has no blades. It's like someone tried ...I'm not going to joke about this. I have to be careful with what I say. Sometimes I just speak too frankly. What is this? It looks like a bunch of plastic.
It looks like their roof was leaking. Apparently there was a leak in the roof. This is also one of my favorite options because then you change the roof and you know what? You no longer have problems with leaks. So, this property is listed for sale for $289,000. It's cheap, baby. It's time for Kevin to head to Florida.
I'm too passionate about real estate. This...this is strange. In fact, we are fascinated by any financial matters. Yo, why? Why can't I copy and paste better? This is just ridiculous. I just want to do a comparative analysis of this object. What the hell is this so hard ? Sometimes yes. Sometimes this is true, but we'll make the comparison right now together.
Okay, let's do this together. So, to find analogues, we look for sold objects. Ah, good old Zillow. There has to be a status somewhere here . Oh my god, they keep changing this crap. Oh, there it is. Sold Out. And I want it for the last 90 days. So what do we have? What statistics do we have here ? We have 1,300 square feet.
This is the size of my first house. Three bedrooms, two bathrooms, tiny. OK. So, let's just put filters in place to make our lives easier. I'm a little lazy. 1750—that's a bit generous, but I agree. OK. So, here we have Sebring. I immediately see an analogue around the corner: 100 sq. more than 400 thousand feet.
I do n't even need to open the photos. I'll do this because it's better for the video to know it's ready for occupancy. And this is my ... this is the top of my market. I mean, a black refrigerator leaves a lot to be desired . The texture of the ceiling is a bit lousy. This is a cute little European-style cabinet from 2008.
Eh, this could have been the era of " millennial gray ." Maybe closer to 2012. Yes, I'm leaning towards the 2012 farmhouse sink. But you know , some people drag this into modern renovations. So this one looks pretty recently renovated. Dude, that's a $400,000 analog right here. So, this object, when was it sold?
You know, the sell-by date always matters. Oh, it was sold on August 6th. Well, here it is, a perfect analogue. I guess I do n't even need to continue searching. Here is a house for 410, sold in June, no photos. No photos, please. Okay, never mind. Hmm, sometimes you can do this little life hack: just post it on realtor.com.
No, just one photo too. I already see it in the description. Sometimes there are more photos on realtor.com. Not always. It's okay . His condition is probably about the same. Here is a three bedroom, two bath home for 420, sold in July. It seems that it has also been renovated. It looks like it was just painted on the outside.
Here is 302 , it would be better if it was an object under renovation. August 19, this must definitely be an object under renovation. Otherwise, well, that's bad ...look at that plumbing chart there. Not that I like using Zillow charts. Description. Oh , look at this. That's all. We already understand everything just by the price.
Smart investor, opportunity awaits. Block construction. Yes, in Florida they write like that because of hurricanes. Nobody wants a house made of wooden beams. So there is plenty of space for renovation and profitable resale. This was enough for me to understand that this was a facility under renovation.
Although the first line also said that. So, okay. Properties for renovation are selling for 300. My profit potential is around 410. If I do a fresh renovation and put it up for sale, I might be able to get 425, which would be the highest estimate . But here's an example. Yes. I hadn't even looked at it before.
This is so funny. Our algorithms, which we created ourselves based on my experience and the efforts of our team. Our team has done a fantastic job and we are improving it every day. This is so exciting. But I want people to know: sometimes I get asked, " Kevin, do you have anything to do with this ?" Of course.
This is my job. My main job. I'm doing my best to make this app better every day. But I couldn't have done it without the wonderful people on our team. So go to Reinvest. But look here. I think the renovation budget is a bit low. So, I'm going to raise that amount a little bit. I will move away from the estimated 47.
I will do this because I need to put a ceiling on the price. Let it be 70. And even that may not be enough. But I'll stop at 70. Oh, okay. Yes, that gives me an estimated profit of $70,000. Oh, I like that. It even changes the estimated profit here, on the thumbnail, to the one I just entered, because the first thing is generated automatically.
But there is a chance that there were several offers for this object. However, I like it when I spend 70 and make 70. I like it when those things are relative to each other, because let's say I had to pay 295 for this deal and I put 70 into it. Okay, so I'll pay...we'll leave the value after the repair as is.
I'll put 295. This is another thing we're going to change: we're going to make it toggle in 5 thousand increments. Because now it's flipping by the dollar. And this is surprisingly difficult to do on a phone. But anyway, 265—that's my total expenses, and, you know, if I'm a homeowner and I have equity here, like 430 or something.
430 divided by...sorry, 430 is the new value divided by our 365. That gives me a yield of 17.8%. My goal is usually 20%, so maybe we can cut the rent budget a little or get 15k back by negotiating a renovation or something. The main thing is to have a certain reserve, because it may not be possible to sell it for 429.
Although, I think this is a reasonable price, especially if you put it up in the spring, or just leave it for rent, it's capital, right? I like it. This is very cool. This is an example of how I enter a district into this app, we compare the results and understand: yes, this was a good deal. It was just sold.
It's a shame I didn't take the video a few hours ago, before the sale, because it looks like it was bought today. But you know, then the "active" status would still be displayed while I was recording. That would look even cooler. I'm trying to be realistic. Yes. Yes, literally today the status changed to "awaiting completion." Just so you can see that this is not clickbait.
Here it is. September 14, expected sale. You see, I'm writing this on September 14th. So this is just an example of what we're building because we think, let's say, we'll refinance or rates will go to zero and we'll refinance the payment. This will allow us to grab bargains across the country faster than anyone in the worl.
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