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well Robert F Kennedy might not exactly be mainstream but at least according to political unor polls on X when you pit Robert F Kennedy versus Biden Kennedy beats him and when you pit Kennedy against Trump they tie now obviously in the general election we expected this to be a rematch of trump V Biden but the point is clearly at least some of rfk's policies are Making Waves one of those in includes a topic I happen to be well well have basically dedicated my career to and that is real estate bringing back the 3% mortgage rfk's plan to level the economic playing field let's take a look at this as posted on the hill Democratic presidential candidate Robert F Kennedy has shown an impressive gift of Pol policy Innovation recently he began to roll out his economic plan which would among other things level the playing field for working American seeking to buy a home Kenny points out there has been a shift of $4 trillion of wealth since 2020 from the working class to the super wealthy uh let's just quickly make the point here that that's probably going to keep happening I hate to say it but I just made a video about basically the death of the middle class how the middle class is getting crushed and unfortunately I think there's a chance that crushing of the middle class will continue as housing continues to get more and more affordable and even if we end up having Goods deflation the only thing that could come from Goods deflation is a likely layoff cycle which would once again crush the middle class as middle class wages go down lower class individuals are able to bump up into the middle class hopefully and upper class individuals take more of a share of the stock market and real estate wealth I hate to say that that is what I think our f fut is heading towards which made me really interested in rfk's point he says this in part is because of inflation but this is where we differ a little bit right I think inflation I I personally am not convinced we're going to have a second wave of inflation but it could happen and that's just going to make it even harder but I think let's say you have inflation guess what it's bad for the lower and middle class let's say you have deflation like negative inflation ironically also bad for the lower and middle class because yes things might get less expensive but it'll come at the cost of a recession which means you might lose your job so goal being hold on to your job right but what is rfk's goal here and this is the interesting part not so much the chat about this but it has to do with a mortgage Kennedy's proposal would change the tax code to disincentivize the corporate takeover of residential real estate while guaranteeing government-backed mortgage interest rates of 3% for millions of buyers now it's very politically popular to sort of fight the corporate takeover of single families do keep in mind that over 80 to 90% of properties are purchased by home buyers that depends on what Market you're in when you actually look at the sliver of institutional ownership of single families it's in the less than 3% range however and this is different than corporate takeover the biggest competition that home buyers do have are local investors it's usually mom and pop investors they're the ones that do end up competing with home buyers but either way Kennedy makes this proposal for a 3% mortgage now this program would basically sell bonds to individuals who want to invest in probably higher yield bonds because otherwise you would just buy t uh treasury Securities so you'll have to pay a higher yield on these bonds the government would but in other words they're going to try to come up with a way to reduce firsttime home buyer payments by giving them the chance at a 3% mortgage which could save about 1,000 bucks a month we could fact check this pretty easily if you take a 20% down deal on let's say a $400,000 home so we end up going with let's say a $320,000 loan amount and the current interest rate is say 7.25 on a $ 3-year fixed and we drop this all the way down to 3% our monthly payment is going to go from about 2200 00 to $349 almost 1,000 bucks that was about 850 bucks there on a $320,000 loan so this is not incorrect however as exciting as that is not all the things RFK is saying are factual for example this line if you have a rich Uncle who will co-sign a mortgage for you you can get a much lower rate because the bank will base it on his credit rating rather than yours this is incorrect when you get a loan all of your Cod borrowers credit scores are lined up and they're going to go by the middle score of the person with the lowest credit score Unfortunately they don't take the best credit score because they underwrite to the highest level of risk which is the person with the lowest credit score so that's not exactly accurate but hey you know politicians make little oopsy dupsies I think the idea here is can we have a 3% program that then lets home buyers basically buy houses for cheaper than what even mom and pop investors could and so in that case I would say the answer to that is yes now if we do end up having deflation rates are going to go right back down to 3% anyway the FED Cuts rate to zero rates to 0% we have a recession interest rates are going to go down to 3% for everybody anyway but yes let's be real for a moment if Mom and popop investors in a neighborhood and corporate landlords if they're even borrowing you know they could be borrowing through other means but let's just say investors who are borrowing on a 30-year fixed rate mortgage if they're paying 75% and a first-time home buyer is paying 3% they will absolutely be able to be much more competitive than the investors and yes you would be handing a big win to first-time home buyers not a terrible idea I personally think the best case scenario is we figure out how to build more housing of course as you've seen in States like California that seems to be politically uh too complicated to understand oh well you'd think the uni party of California would figure that out I could say that because I ran for governor in California and tried to change it but anyway back in the 1930s and 40s let's keep going here back in the 1930s and 40s Innovations and housing policy perfected the 30-year mortgage yes 30-year amortised mortgage nobody really calls it that anymore but yeah uh introduce the government backed uh Insurance these are your fanny ma your Friday Max they basically say hey uh you can get a government backed 30-year mortgage which without the government frankly you wouldn't have a 30-year fixed rate mortgage you'd be in a system like what you have in Europe or in Canada where you might get a 10-year fixed rate term more likely a 5-year fix rate term and then you either have to refinance sell or pay the higher payment so as far as rfk's plan it's not a horrible idea for firsttime home buyers I don't think it's the best solution but it's definitely something that would help firsttime home buyers get in in competition with your largest competing type of home buyer which is the local mom and pop real estate investor it's the person who's buying their second third or fourth rental property that's your biggest competition outside of other home buyers not the corporation uh in that we can statistically prove here for example is a housing wire post which breaks exactly this down it shows you that ey buyers like uh you know a red fan when they were buying or an Open Door they buy just half a percent of properties companies that own a thousand plus properties own just.
3% of properties uh or or purchased just 3.3% of properties in the second quarter of 2023 uh those who own a 100 to 999 properties were just .7% of buyers and those buying 10 to 99 Properties or holding 10 to 99 properties were 2.7% of sales is actually those smaller mom and pop buyers that owned between 1 to n properties that were the biggest competing Force again about 20% versus that 25 to 20% versus that 70 5 to 90% home buyer competition again depending on what type of Market you're in so there's the data to fact that up and back that up but what I want to ask is what do you think about an RFK presidency and do we need an independent that could finally have a real chance against a Democrat or a Republican or are we just going to adopt their ideac
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