Today, my guest is Michelle Bosh. She and her husband are real estate investors, entrepreneurs. They have multiple businesses and they have taken businesses multiple businesses they've built from scratch to seven and eight figure income revenue streams. And their business platforms include land auctions, rental portfolios, they've all authored a an Amazon number one bestseller called Forever Cash. And also, they host together the podcast Forever Cash. And Michelle also hosts the podcast In Flow.
Michelle Bosch, what is the BIGGEST RISK?
You know, the BIGGEST RISK that we have right now is that for the percentage of the tenant base that is unemployed, or that has lost their job because it is worked for housing, we buy c properties and B neighborhoods you know, that that if they've lost their job and unemployment you know, kept gets cut down, that they might not be able to To make their rent payments, so though, that's a big risk right there. Another risk is that you know, the economic recovery is longer than expected. And that therefore, you know, we are seeing having to carry, you know, a delinquency or a vacancy, you know, well right now not even a vacancy because we cannot evict So, so you know, that we're carrying a delinquency for longer than we want to, you know, what I mean? And some of the measures that we've taken it, you know, in order to preserve cash is in the beginning we are funded in order to be able to have you know, well capitalized asset number one, but now we've we've pretty much you know, cancel any big CAP X project for all three properties. We stopped already immediately because we were coming to the point where we were going to have to make payments you know, cuz on two of those three properties, we we've syndicated the asset and it's So we we stopped, you know, payments to our investors just out of precaution. And the properties have had amazing collection rates that I could have paid them. But I continue to hold on to that cash, because I want to have a little bit more time and visibility into what happens right now come July, August, you know what I mean, in terms of where we're at, you know, with the economy where we're at with unemployment and, and yeah, so those those are some of the things that we're doing but we hope that by being a from an asset management perspective, a first in class community because that's what we strive for, you know, when we come across a sea, you know, class acid in the neighborhood, we want to become the best. C there is such that there is a if there is an economic pressure, you know, that even people that are in a B property right now, that might be slightly nicer that when they have to downgrade that they're going to downgrade into the next nicest C which would be us, you know what I mean? Um, so.
So that's kind of how we're going about doing that is just making sure that we're well capitalized. I'm not excited about forbearance at all, I believe in making pay if I can pay my bills, pay my bills. And, and yeah, so now our conversation is starting to shift actually with, you know, our investors and into opportunities, because we know that there, there are owners and operators, large multifamily that bought in the last year, even within the, you know, last quarter of, you know, to 2019 that we're expecting, you know, in forecasting in their models, rent increases, you know, 3 5 7 percent and now, those increases are not materializing. I mean, they are gonna leave and there'll be opportunities out there for us to go and Again, just like we bought here in Phoenix back in 2008. This time we're going to be buying large multifamily. So kind of positioning ourselves for that, you know, having that, you know, that conversation and opening that mindset to the investor that, you know, that wants to invest with us that, that this is the right time to buy, you know, when this happens, and even though everyone else is trying to sell and trying to get out that it's okay to be a contrarian, but it's okay to, you know, you have to stomach and go against the grain of what everyone else is doing, because we've done it before and it's, it's paid off tremendously. So, um, so that's kind of where we're at right now. Yeah.
Today, my guest is Zachary Beach. Zachary is an Amazon best selling author and of the book The New Rules of Real Estate Investing. And he's also the co host of the Smart Real Estate Coach Podcast. And he's also a partner and COO and coach at Smart Real Estate Coach.
I'd like to ask you, Zachary Beach. What is the BIGGEST RISK?
Yeah, it's a fantastic question. The truth is we've we've transferred a lot based on your description, we've actually transferred or deferred a lot of the risk based on how we actually buy and sell real estate because the sellers still typically on title, and we have the ability to renegotiate based on our contracts. You know, we're collecting a non refundable deposit from our buyer. So that's limiting the risk. But if I'm just looking at it from like, purely what's going on right now, today's because we actually just came off one of our offsites that's our BIGGEST RISK would be if like there's a fear crisis that happens, meaning that people decide to no longer buy real estate, hoard money and stay where they are right? Or no longer want to sell property because there's so fear driven that they want to stay where they are. Yeah, I don't of course, I don't see that happening. But I don't have a crystal ball. But as I was alluding to earlier, it was we originally thought that people are going to start hoarding money. But then because of the tightening of the banks, it actually released some buyers that were ready to buy. So that kind of continues the cycle. So I would say that'd be the BIGGEST RISK other than, of course, if there's a complete market crash. Now, I want to say it's a risk to our current business model. It's not risk to being in real estate, because the truth is right now if you have the ability to buy on terms, but also continue to take your profits and put them away, because if the market crashes, then you're going to be able to buy property at a significant discount. So I would, I would say it's just the risk to our current business model. But we've kind of evaluated some of these things and we're working our best to set up for if the market prices again or crashes so it's just important to look at it from all the Different standpoints. But any real estate market in general, does matter if it's up or down, there's always opportunities available.
Today my guest is Hamza Ali. Hamza moved to the United States five years ago, and founded Gray Spear Capital, which focuses on bringing investors together and investing in real estate projects in the Texas area.
I'd like to ask you, Hamza Ali. What is the BIGGEST RISK?
Well, it's funny, you bring that up, then I know this is not supposed to be an insurance related answer, but I do have a little bit of a story here that I'd like to share. So very recently, I was I was under contract to buy this property, great deal, great location, you know, just I mean, it checked all the boxes. And, and I put it on a contract. So I, you know, sign the contract, we put on a contract and the next day I get a call from the guy and he's like, I need to talk to you right away and I'm like, okay, and this is the seller directly. So it's buyer and seller. Usually there's a there's a broker in between. But this seller was so panicked that he called me. And he's like, I want to meet you at the property and Okay, I was like, okay, sure, let's go at the property. And then so we walk the property and one building has been completely burned down. And I'm talking completely like it's gone. And it was 114 unit deal when it became 100 unit deal. And he was like, What do I do? I'm like, What do you mean what do you do you know, this is a, this is exactly what you what you carry the right insurance for. And so to answer your question, insurance is the biggest component that will save save us in the time when we need to save you just need to have the right coverage. So talking about risk, this gentleman did not have the right coverage did not have the right dollar amount covered towards this fire damage and I will tell you he lost close to a million dollars because of that.
Today my guest is Richard C. Wilson. Richard is a third generation Eagle Scout. He's also the founder of the Family Office Club, which has over 2000 registered investors. And his team offers a digital investor platform and sources direct investment opportunities for his 58 investor clients.
I'd like to ask you, Richard Wilson, what is the BIGGEST RISK?
For my company, even though we have good managing directors, I think the BIGGEST RISK is myself, you know, I'm driving forward a ton of the new content. You know, when I when I hang up here, we're doing a 1000 person webinar. And I've got someone on my team that could do a webinar on many different topics, but not the same topics I could, you know, fluidly and so it's kind of like a key man risk. And our business, you know, would have to go down to, you know, a skeleton crew if I got hit by a truck this afternoon, and move forward as much smaller business. So I think it's just like many entrepreneurs, getting yourself out of your own way and making sure you're not the bottleneck to growth and making sure that you've got kind of a C level team being groomed and built is part of that but also just thinking through things you know, that are insurance related, honestly related to key man or life insurance, or just You know, if you're disabled and can't work for a while, because think that you know, like most businesses that are like mine with 15 employees, you know, you're trying to grow into a medium sized business from a small business you're in that in between world where, you know, you're constantly trying to push stuff down to the team and get a better quality team.