The Roundtable_07-04-24_Audio

[00:00:00] Andreas Senie: Welcome back to this month's round table. Your all in one comprehensive view of what's happening across the real estate industry, straight from some of the industry's earliest technology adopters and foremost experts in marketing, brokerage, government policy, construction, cybersecurity, and financing.

As always, this is a three part show part one introductions. What's new for each of our round table hosts in their business business sector part two, we're going to unpack and dive into the biggest trends and the biggest changes in our industry and part three, what you can do to outpace your competition in the next 30 days and grow your business.

I am Andreas Senni founder, Siri collaborative, brokerage owner and commercial director, KW and technology growth strategist. Joining me this month for our July 4th show is none other than Saul Klein, Realtor Emeritus, Data Advocate, CEO of an MLS, one of the largest San Diego, Editor of Realty Times, the list goes on and on, and Car Wash owner and profiteer.

Saul, how are you? Nice to see you for July 4th. We needed fireworks 

[00:01:44] Saul Klein: for your call. Yeah, it's great to be here. It's great to see you and the gang again. Um, as we get ready for this, uh, 4th of July week, it seems, huh? 

[00:01:54] Andreas Senie: Absolutely. It's, uh, it's been a fun half year and it's only getting better. Also joining us for this show, Rebecca Carlson, founder, CEO of Carlson Integrated, past president, now your car association, brokerage owner herself.

Celebrating seven years as CEO for Carlson Integrated. Congratulations, Becca. Nice to see you. Welcome back. 

[00:02:14] Bekah Carlson: Thank you so much. Great to be here. 

[00:02:18] Andreas Senie: Dan Wagner, senior VP, government relations, the traveling man out there fighting for DST from Inland Real Estate Group of Companies, Dan, welcome. I see you and the Inland sign.

[00:02:32] Dan Wagner: It's great to be here. And most importantly for this 4th of July, we are all blessed to live in this incredible country of ours. So God bless you all get 

[00:02:39] Andreas Senie: to do this. 

[00:02:40] Dan Wagner: It is. It's wonderful. Private property rights is the key to our success of this country. 

[00:02:46] Andreas Senie: Well, speaking of private property and what we do on those properties to build them and make them more valuable, Chris Abel, also joining membership director, Associated Builders and Contractors Association, now a member of the director council nationally for the Associated Builders and Contractors.

Chris. Welcome back and congratulations. 

[00:03:05] Chris Abel: Absolutely. Thank you. Glad to be back. Um, all things are looking up in regards to membership. So I'm, uh, I'm happy to be back and happy to be happy to be here at everybody. 

[00:03:15] Andreas Senie: Last I heard you have the highest retention rate and growth rate of any of the other directors nationwide are close to, I might be fudging it a bit.

We're going to go close to, I don't 

[00:03:25] Chris Abel: know who's, who's listening. So, um, now we are, uh, I'll tell you, we are, um, in Connecticut, we're at 93 percent retention. Every invoice has been closed out for the past month, um, which is wild. But more importantly, growth. I've never seen the interest in association membership like it has been.

Um, we are, are, we are here at the very beginning of July and we're over, over 3 percent growth with the full, you know, rest of the year to go. And, uh, it's, it's, it's wild. It's shakeup kind of happening that's causing it. It's pretty interesting stuff. 

[00:04:08] Andreas Senie: Well, so you said you don't know who our audience is, so I'm going to take a quick second and say, 73 percent of our audience is in the U.

S. We are on every continent. We have over 3000 tune ins and downloads monthly. So thank you to everyone tuning in. Happy July 4th. Again, this show wouldn't happen without you. And it has continued to grow at an incredible rate. Thanks to my co hosts all on the call, you on you out there tuning in, watching replaying and Mr.

Mendoza producing in the background. So as far as the sectors and what's happening, Um, from my standpoint, I want to give a shout out to Inland for the largest sales volume in the Midwest, 910 million industrial in your neck of the woods. What's going on there, Becca, Dan, let's pick up the ball and run. 

[00:04:57] Dan Wagner: Go ahead, Becca.

[00:04:59] Bekah Carlson: Well, I appreciate you calling on me, Andreas, because it's been a very interesting week and I've had the opportunity to explore several sectors in conferences and events this week. One of those was self storage, which was absolutely fascinating. My first self storage conference, and they continue to be very, very bullish, very excited about the future of that industry.

Apparently a conference that had 30 or 40 attendees five years ago had 330 attendees this year, very, very. Excited to, they feel that it has become a more primary niche versus a kind of secondary or tertiary niche within the commercial real estate sector. And it was really interesting to learn and to meet so many wonderful people from around the whole country that were at this Great Lakes Region Self Storage Conference.

Moreover, Industrial. I will tell you, we are seeing a little bit of a softening and I have a specific listing. I was meeting with my co broker this morning and there's been some challenges in because of financing specifically that we're seeing a little bit of softening in that land sales, industrial sales marketplace.

The other thing that I did this week that was really interesting. Awesome was to attend a giant restaurant show. And that was fascinating to see Michelin star chefs to be at a tasting for a no kid hungry event here in Chicago. And to hear all of the wonderful things that are happening within that restaurant space and to see all the entrepreneurs and to hear about all the SBA loans that have really funded those businesses was really truly wonderful and a remarkable experience.

So, Between those guys, those different sectors, you know, specificity and my clients who are very active in retail who maintain extremely high occupancy rates, the vast majority of real estate is functioning as it should on each product type within its own cycle. 

[00:07:05] Andreas Senie: Pockets or pathways to profits exist and those that can and are taking advantage.

England being one of them, I'm sure. San Diego MLS is full of transactions as well. But since we're in Chicago first, Dan, talk to me, what's it, what's Inland doing? I know you were traveling too. It seems like we're all traveling. 

[00:07:26] Dan Wagner: Well, I got to tell you, uh, Becca, I know you saw some of our, uh, Inland folks at that, uh, that self storage conference, so Inland's purchased, um, uh, company, operating company, Devon, uh, self storage.

And so we're, uh, we're going all, we're going all in with self storage. We love it. Um, it is a really good sector for us. I was just going to highlight to you Um, I one of the things I do is I talk to some of our experts and I said, hey joe casenza um, could you you know, he's the guinness book world record holder of uh, Buying a property in the united states individual commercial real estate deals and he's up to three thousand nine hundred or something like that But I said so joe, you know i'm going to be on this.

Uh, you know, what what what? What are some of the high cap rates to low cap rates? He's like, well, uh, the highest cap rates are, um, the, uh, CEDAR living, uh, good quality CEDAR living and assisted living, memory care, uh, those are, um, in the, uh, the high sevens. Um, you should shopping centers, uh, like, uh, the, the little, uh, centers or grocery acre shopping centers are about a six and a half cap to seven and a quarter, um, self storage.

Uh, again, those are, you know, that's about two to three stories. Um, those cap rates are all kind of all over the board. Um, and then the, the last is a three to four cap rate is, uh, mobile homes. manufactured housing, but he said that I said, what would you like to buy today? And he said, I'd like to get, um, the, uh, the, the bill to rent about 150 to 250 units where the detached, and you don't have anybody on top of you on the sides or anything like that.

It's about a thousand foot to 1800 foot square foot. So that's what he, if he could buy something today, that's what he would like. He's looking for it. So that might put something out there for you guys. Gals are in the audience, but It's always fine. We're always back. Yes. We got, uh, we got dry powder. So we're, uh, we're good.

Um, and I just, I went on, you know, it lends across the country. So I just did a big tour of, uh, Southern California. And what was interesting to me, it was, uh, talking to financial advisors and to, uh, Commercial, uh, realtors and the big discussion, uh, of course, is what do you do in California? If you're a mom and pop owner of, uh, of apartments, cause there's so, it's all Waldo.

There's a lot of, uh, challenges for people that, that have to deal with rent control that have to deal with all these, um, these landlord, uh, Uh, attack bills that they put in. And so people are wanting to sell and they're wanting to find what they could go into. And I'm the DST, the 1031 to DST is a great place for people to go.

And so we had a lot of people, uh, meeting with us talking about the whole concept of the DST. And, um, I guess in California, it is, it's really hard to go, you know, when you sell, Where are you going to go into it? So that's where they liked the idea of going into an inland apartment complex that we own in Florida for 150 million.

And, you know, they, they see that that that's a good deal. So, uh, Beverly Hills, um, it's fun to, to go into Beverly Hills and often Rodeo drive and host luncheons. And, um, and here these, you know, very, uh, very, very, uh, experienced, uh, well heeled folks that are. Really looking at this possibility of doing the DST 1031.

It's kind of, uh, you know, you don't want to say it's like taking orders at these places, but it is amazing to see, uh, how much the product is really, uh, And, um, one of the difficulties quite honestly in the DST business is, um, you know, keeping enough product on the shelf before constantly having to, uh, to, to, uh, be out there buying and getting everything all already.

And that's why it's good that like Inland has the dry powder that we could go and, uh, we can close. And, uh, once we close, you know, then we can start. Syndicating and get, you know, getting, doing the DST and people really appreciate that, but not all DST companies are equal. And we had some, uh, some folks, uh, meet with us and, and say, my gosh, I wish I went into an inland DST because, um, there's so many companies out there.

You really have to do your due diligence. And this, uh, this guy lost everything. We thought it was going to be a great student housing play at Ole Miss. And it just, uh, it all blew up. That 

[00:12:00] Andreas Senie: speaks to track record, right? So you know who you're working with at all times. Speaking of costs, right? The cost of buying a home against renting a home.

I mean, there's so much happening. You just, if you don't know the numbers, if you don't have the right advisors. You're in trouble. Speaking of track, go ahead. 

[00:12:17] Dan Wagner: No, it was really sad. Cause this guy, um, he was an older gentleman and it was, uh, you know, clearly, um, you know, he's, he had a lot of money and it didn't kill him, but he was embarrassed and I think it's important that people understand that track record, so 

[00:12:30] Andreas Senie: you've got to ask the right questions, but speaking of track record and changes in the industry, Saul.

How are things in San Diego? There's a lot of changes in your neck of the woods in the industry. 

[00:12:42] Saul Klein: Yeah, no, San Diego is great. It almost doesn't matter what's happening. It's just a nice place to be. And, uh, you know, we got great weather. You can wash your car just about any time of the year. But, um, you know, Beck, I want to mention, you talk about storage, you know, the storage business has been around for a long time.

It is interesting to see. I mean, I got this storage unit I've probably had for the last 25 years. I'll never use the stuff in it. And I've paid for it at least 10 times in the past, but that's the way it works because it's so much hassle to get rid of it. So I can see the storage business continuing to grow.

And, uh, Dan, you talk about private property rights and I'm a hundred percent with you on, you know, private property rights being the underpinning of this country and part of what makes us great and you're right about California. It's like a terrible place with regard to that. I'll just give you, I'm going to go talk to a bunch of attorneys this morning.

So, um, Just to give you an idea of some of the things we're dealing with here in California, we've got the Senate Bill 267, which prohibits rental property owners from using a person's FICO or credit history as part of the application process. Now, can you believe that somebody comes to apply to rent the property?

You can't ask him if they got good credit, if they got bad credit, can't do that. And this of course, very restrictive for people who own a property and then, uh, limiting amounts of security deposits. We're seeing some of that and in unit storage restrictions. And so now it looks like you can take your scooter and charge it in your apartment.

And of course you might have fires that evolved from that, but it doesn't matter. Tenants got rights, you know? Um, Relocation, uh, with disabilities. And so if you've got somebody with a disability and you're in a rent control area and you're a landlord, you've got to find something equal if you're going to, uh, re rent the unit.

So you've got all these things that you're dealing with. And I can see where, um, people who own real estate in California might want to look to, um, DSTs. And, you know, when I listened to you, Dan, I'm thinking that you guys have, We used to call them specified offerings. As opposed to blind pools, right? So when you're looking at syndication, raising money for real estate, one way you do it, you say, I'm going to buy a property that kind of looks like this and kind of performs like this.

And I don't know where it is yet, but I'm going to raise the money now and go out and buy it. And then if you've got though, a syndicator who's got a deep pocket, they actually go and buy it. Or they actually get committed to it. And then they raise the money based on a specified offering. And it sounds like that's what you guys do at Inland.

[00:15:31] Dan Wagner: Yeah. And Saul, what the other thing is with the DST and Mr. Goodwin created it here at Inland and created a whole new industry is that, you know, the old TICS, the TIC program. You could only have 35 investors and they all had to vote on everything. And, um, and the loans were, uh, were directly recourse to the investor.

Now with DST, you could have up to 1, 999 investors. So the minimum to get in is real reasonable. It's usually about a hundred thousand and the loads are all non recourse. And the, uh, you get to pass the, uh, the depreciation on to the investor. Uh, farmers just go crazy cause they never get depreciation. So they're, cause of land.

So they're like, wow, this is, you know, they get to shelter their income, which they just love being able to do. Um, but. It is, uh, the idea that you don't have to have 1, 999 people vote and it's, it's all Inland gets to, you know, we're in charge of running the cruise ship and we can tell you when to get off and when to get on.

So the detriment of the DST, you know, cause there's nothing's perfect. Is that, um, it is, there's no secondary market. You're going to be able to. Get your money quickly. So you got to be able to know that it's uh, this sucker is is not selling right away You're going to be in it for as long as we say you're going to be in it It's usually about five years to ten years at the most uh, but it is uh, if you can if you're a decredited investor meaning that you have a million dollars of net assets or you have 250 000 as an individual or 300 000 Um, as a couple, then you're able to, to qualify for it.

But it is you, you are so right. So it, it just mind boggling how they try to come up with new laws in California. And the scary thing is what happens in California, it morphs over into the other progressive states. And so Illinois. Is looking at scary stuff. I, um, I, the one thing I didn't tell you, Andreas, um, since the last time we talked, I just got installed as the chair of the Illinois chamber of commerce.

Um, so I'm in that position and that, thank you. And that I'm more aware of what's going on, uh, with all of our, our team constantly evaluating Illinois. And the big thing that realtors are going to have to look in, look out for is that the, uh, the government in Illinois is looking at. Trying to find more revenue because of the, uh, the Biden bucks are done, so to speak, uh, with COVID money being done.

And so they, you know, they're not able to balance the budgets with that money anymore. So they're looking at, uh, service tax. And so they, they're going to be trying to tax, um, all services. So. Um, the, uh, from realtors to barber shops to, you know, dog groomers. I mean, there's just anything you can think of, but the, but the real estate world is going to be very much impacted by that.

And so there's across the board, um, always, uh, the government's, you know, always it's challenged because if you're not willing to cut, uh, then they always have to find money to, uh, to pay for stuff and, Illinois just passed the largest budget they've ever had in the history of the state, and it doesn't look like they're trying to reduce that anytime soon, so.

[00:18:48] Andreas Senie: Municipalities have to raise funds. They're shoring themselves up for, you know, opportunities and assets. They have to move around developments, right? I mean, when you talk about too many chiefs, not enough Indians, the tick model, right? DST model that goes back to the track record of all chiefs, Indians. I mean, if without, without our GCs building it and making the world better or giving us these assets to sell, then what could we do?

Right. Right. Chris speaking chiefs and Indians over there. Yes. How's the construction world? 

[00:19:23] Chris Abel: Um, it all depends on who you talk to. You know, it's, it's been interesting. Um, I would say the past few weeks, maybe the past month at this point, speaking to a lot of specialty contractors, they're kind of struggling and trying to find their next.

You know, their next, uh, their next position and their next job where, you know, some things are being held up. You talk to the GCs or the CMs, they seem to be doing fairly well here, at least in Connecticut, um, cause obviously, especially contractors, they come in. They do what they have to do, and maybe they get back on the site at some point during a punch list to get a couple things in, but realistically, they're kind of doing their work, and then they're moving on where the GCs and CMs are just kind of hanging on and, uh, and seeing everything through.

So it all depends on who you really, who you really chat with. Um, I was able to sit in on a, on a, uh, I wasn't on the panel, but I was at the event for a panel. It was a projects and projections panel, which was really interesting last, uh, Last week because they had a you know, they had just different entities.

They had someone from dot They had someone from a local university which happens to be local to to where I live So it's kind of in my neighborhood, which is interesting to to learn about. Um, Someone who is kind of an expert in land use and helping people with land use uh the hartford hospital system and then Kind of having a brain lapse on what the uh, oh manufacturing manufacturing Um, and it was really interesting to kind of hear You And this kind of goes off of what Becca was saying in regards to like being in this, you know, kind of getting outside the box a little bit where I was in a room full of marketing people and how Becca was saying the restaurant, um, show that she was at, how, how interesting that was to get these different perspectives.

So I'm in this panel with all marketing people. Their perspective is they want to learn about the projects and what's kind of coming out so they know what to look for. So they're feverishly taking notes on this. This is coming up. This is coming up so they can know when their RFPs are going to, things are going to hit the streets and when their RFPs are due and yada, yada, yada.

Me, I was there at a different perspective because I. Yeah, I want to know what the jobs are and I want to be involved where I can try to get our members, um, you know, some connections, but realistically I was there just to listen to what the forecast was, take the temperature of the room, get an idea of how they were feeling.

And I will say the. Overwhelming, um, situation right now is everyone's past like the supply chains, not past it, but we're past certain things. It's it's the labor. It's just the labor side of things. The agony on on the faces of the people up there from D. O. T. To, um, to the university. It's just a matter of people, actual people.

And I get these emails all the time about how jobs, you know, this may jobs created construction. This is not the other thing. But if we can't You can't snap your fingers and just, if we don't have people to do these things, it's not, it's not really going to pan out. So that's where the specialty contractors really need.

They just don't want to run into a situation where they have to either lend a crew out, lay a crew off. Um, that's where they're kind of struggling. It's not that they're so slow that they can't run their business. It's not so much the profits for some of them. It's more the idea of, yeah, okay. So I've, I've dealt with the fact that we're not necessarily going to grow this year, we're probably going to even out.

I need to keep my people moving and keep my people busy. And get them out there onto another job. Um, because any of that idle time that's on the, on the, the hands of people in the construction industry, a lot can happen and it can be getting picked up by someone else going in and grabbing a couple extra hours with someone else who ends up, you know, turning into a better position, um, I talked about this a few months ago.

What's that? 

[00:23:28] Andreas Senie: Use it or lose it. So Cento, the third largest, fourth largest owner in our state. He has in house constructions, GSTs, he literally sends them on vacation. Yeah. Hey, he doesn't have enough work for him. 

[00:23:41] Chris Abel: Some of those ideas outside the box ideas are not bad ideas. Idle time in any industry can be tough, but in the construction industry, especially, I mean, we've all heard of, we talked about this a few months ago.

We've all heard of the substance abuse issues that go along with it. We've all heard of the mental health stuff that goes along with it. Um, I'm not going to be Debbie downer on the stats for. That have just been released on some of the, some of the mental health stuff, you know, um, suicide rates and things like that.

But Idle time is not the best thing for a lot of people. And then the construction industry, it's heightened a little bit. You got to keep, they want to work. People want to work. If they want to work and they're built to work and be in that industry, they want to get up every day and they want to go to work and they want to earn their paycheck that way.

These are not. People that want to sit back and just collect those checks. Even if they do that, they still are tinkering around their houses. They're still finding ways to keep their hands going and stay busy. So, um, It's an interesting time, but during that panel, there was definitely a pain point of people, people, people just not having enough people.

And, uh, some of that goes into, you know, the politics and infrastructure stuff and all sorts of things. But, um, but there's a lot of building going on. I can't go down a street without being redirected right now in Connecticut. And I can't complain. It's a great 

[00:25:08] Andreas Senie: place to invest. Great place to build as always.

And Becca, you mentioned all the SBA loans in your neck of the woods. We're seeing the same here between the government RFPs and the projects from municipalities and the owner operators upgrading to new buildings. That's everywhere, I believe. I mean. When you talk about these projects and these people, Chris, and I don't know if you know this, that offhand, do you know how much longer projects are taking?

Is there an estimate? 

[00:25:36] Chris Abel: I honestly don't know that offhand just because the sizes are varying so much that, um, and things are getting put off. So people can get certain things, you know, certain things finished up. So I honestly don't know. I mean, there's so many different ones going on. I mean, I have a multifamily, um, you know, down the street for me that If they have a delay, I'm not seeing it because these things are getting popped up like you wouldn't believe.

Um, but then I'm hearing of other jobs, just not really starting. It seems like once they get started, 

[00:26:11] Andreas Senie: they move about 

[00:26:12] Chris Abel: a year ago, about a year ago, it seemed like it seemed like there were pauses and stops for supply issues and all different things. So things were just kind of, and people getting frustrated with it.

CMs, GCs, specialties, they were all getting frustrated. Now here, what I'm running into and what I'm hearing is. Once something gets rolling, it's, it's moving, it's moving, but other stuff is kind of getting put off. And again, you run into the college this time of year. Now, all of a sudden it's like, got to get the schools done.

And if you're in a position where you can work within the schools, you're going to, you're going to stay, stay very busy, but some of those people in just kind of the private sector working on, you know, um, Maybe, uh, you know, build outs and things like that. Seems like anyone who's working on the road, horizontally, uh, infrastructure type stuff, and anyone who's in the schools, I can't, anytime I go by a job site, when it comes to those two things, they are moved.

There's a lot going on every single day. You don't see a lot of pauses from the eye tests. I mean, I can't tell you from what's going on, you 

[00:27:21] Andreas Senie: know, different municipalities, working at different speeds, different opportunities, uh, dare I say location, location, location, right. Yeah, where you're working and hopefully relocate, right?

We can always move workforces around the stat. I always throw out is Connecticut's still the leader and bringing kids to college, right? So if that's, if our future is the most important thing, then we're the most important place, uh, all credit to Chicago and California there as well. That being said, so with everything going on, I'm curious, you're traveling.

Or rather your traveling knowledge and collective knowledge ice X had that major acquisition, right? There was some data changes. There's been a lot. Happening in the world of real estate, real estate data. Have you seen, or can you speak to, uh, co stars change and shift into the market that bought homes, uh, apartments.

com and just probably the tech side because we don't have that.

[00:28:20] Saul Klein: Yeah, I can talk a little bit about that. We talk a lot, lot. Yeah. So there's lots going on in the data space, right? And what you do with data and how valuable data is. And one of the things that, that people don't realize when we, we talk about data, particularly data and information around property, is that in the age of ai.

Data becomes much, much more valuable because now it can be used for different things that it never could be used for in the past. And so for training AI models. So all of a sudden, information, even historical information, historical data becomes incredibly valuable. So if you look in the real estate industry, and in particular in the residential real estate industry right now, we just got an amazing amount of litigation.

It's mind boggling when you look at all the litigation that's taking place, and the fact that the DOJ is involved, and the Federal Reserve is involved, and the GSEs, Fannie and Freddie are involved, and of course, the private sector is involved. And it seems like there's some kind of battle going on between the GSEs and private capital to be used in the housing finance market.

And so when we look at the big players today, we look at Because on the cell side, we know that MLSs and brokerage firms pretty much got the listing information and data down. But what about the buy side? What about all the information that comes from the buyer? And then what is the real value of the data around the buyer?

And it's not just, um, from the sale of a piece of property, but all of the transactions that take place after somebody buys it. Before and after somebody buys a piece of property. And so who is interested in this data? You know, and so you, you mentioned ice and that's the intercontinental exchange company and it was the New York stock exchange.

And how about co star big data company and what are, or what are they doing? And then there's core logic and then there's Zillow and people want to capture this by side data. That's where the emphasis seems to be. And, um, so I'm hearing phrases. That actually have been around for a while, but I'm starting to hear them again, like loans in minutes instead of days.

That's powerful. Loans in minutes instead of days. And securitization of loans in days instead of weeks and months. And so, what happens when somebody gets a loan? And who else might be interested in data around home purchases? Maybe somebody like Amazon, which is a giant data company, really. And so think about all of the purchases.

Yeah. Somebody gets a loan, they're going to buy a house. They got to get a loan, but then they get a loan and then they got to buy a refrigerator, then they got to buy paint and then they got to buy fences. And it's like all of this capital that's created downstream of the home purchase. And, and the big players know this and they're paying attention to this.

And of course in the real estate industry and the residential sales side, people are in just inundated right now with, with questions about the litigation that's taking place and how are you going to be compensated if you sell real estate these days? And so big players are positioning themselves. I don't know if you saw Andreas where RE, a real estate Colorado, big multiple listing service, Now, whether or not it's a hostile takeover or something they planned, I'm not sure at this point in time, but private equity purchasing an MLS.

Because really to, to be able to capitalize, be able to, to make the most out of data, you know, it's all about, MLSs are all about content. But to do something with that content, you got to have capital and you got to have capability and multiple listing services typically don't have the capital and the capability, but they got the content.

And so if MLS is going to start to look at in a friendly way, ways to step out with that content, By bringing capital and capability to the table, there's a great future for listing and selling real estate and maybe compensation in ways that people haven't looked at before. So the technology is moving ahead, the data collection is moving ahead, the litigation is on everybody's mind, but I'm an optimist and I see a bright future.

[00:33:01] Andreas Senie: Well, that's actionable insight all over again, right? So brokers bring actionable insight and broker the ability to bring parties together based on set data. Months and minutes instead of days. Sounds great to me. Sounds great to everyone, right? But how close are we to that? 

[00:33:19] Saul Klein: We're actually, the capability's been there for almost 30 years, Andreas.

It's a very interesting story as to who's pushed back and fought this over the years. And like I mentioned, there is a very interesting dynamic between the GSEs and private capital. Because you think about the security, if in fact you can determine what something's really worth because you've got the data, um, you can attract private capital and maybe you don't even need the GSEs anymore.

Of course they'll fight that. How much did they make last quarter? Seven billion dollars? And so the private capital is looking at this and saying, you know, securitizing those home loans. If we really can understand the value of the property and the value of the capability of the people that are borrowing the money, that's a safe place for us to put our money.

But we got to compete with the GSEs. And it's really been the securities brokers against the bankers. And remember the bank and real estate controversy. I know, Dan, you remember that. From a number of years ago, this is all out there. So this idea of loans in minutes, instead of days, that technology capability has been around for a long, long time.

And what's kept it from moving forward is not the technology. But it's the politics behind 

[00:34:38] Dan Wagner: the technology. That's what I was going to say. The politics are definitely a part of all that. So, and one of the things I do want to give a plug for again, um, during all this, uh, all this time with the lawsuits.

And, um, I just want to still highlight. That the best, uh, the best place that realtors can, can be a part of is their association. I mean, the national association of realtors is still there to, to help fight for our industry. And I just, you know, I want to make sure the relevance of the realtor is a really big deal because, um, with, with everything that individual relationship with that, um, that, you know, with their client is, is huge.

And then, you know, Because our realtors, you know, Becca is boots on the ground. She's dealing with, um, municipal, you know, local state and the national legislation that impacts her. Um, many times the realtor is the canary in the coal mine to make sure to alert. Um, the, uh, the associations of, Hey, this is the latest thing to happen.

And then. The Realtor Association in many ways stands in the breach, uh, where there's no one, you know, there's nobody else that has the resources, the wherewithal to, uh, to, to try to stand up and be for something, all this stuff that Saul talked about with the legislation in California, you have to have someone at least being, you might be crying out in the wind, but at least you're able to have someone be there to say, no, this isn't good for investors.

And when you have a Realtor attached to every member of Congress that's, uh, coordinated and working together, that's, that's so powerful. And I'm a big believer in that. I just don't want us to forget that importance, Saul, because I, I know, um, the technology is, is moving forward at rapid paces, but I, I still think that we have to remember Going back, why are we a part of, of all this together?

Because that networking is still important and those relationships are still important too. 

[00:36:41] Saul Klein: Well, so you're right. Then, you know, and this is kind of interesting. It's tough to fight the DOJ. So the litigation that we're talking about is primarily, um, civil litigation, but standing behind it all is the Department of Justice, and they've got a beef with the National Association of Realtors.

They have, they've had this for the last 40 years, as long as I've been tracking it, and something interesting happened in California last week. You know, as everybody's getting ready for this August 17th date, that's the day that we have to be able to comply with the With the, uh, provisions, the practice changes in the National Association of Realtors settlement in the Sitzer Burnett Merrill case.

So as we get ready for, uh, August 17th, of course our Association of Realtors are looking at, because you can't take out a buyer anymore without a written contract. Under this, this new settlement. So let's get people ready for it. Let's teach them about it. Where do it, does that happen? It happens through our associations of realtors, a lot of classes going on.

NAR is offering free classes. California Association of Realtors redoing 63 of its forms. And we found out just the other day that the department of justice has called like 27 of those forms. Are now uh car said california association realtor said we're not going to release those forms as scheduled We can't the department of justice is reviewing them.

And so, um, There's there's lots going on in the background that a lot of people just don't see right now But you're right who's on the forefront that our realtor organizations are they're fighting this every day and they're dealing with more than just Litigation they're dealing with the government 

[00:38:31] Andreas Senie: Sorry, got muted there.

The just a tactical tip for those tuning in. If you are a member of any are whichever state you're in. I know here in Connecticut, we have a legal hotline. We can call for legal advice on our transactions on agency. All of it. It costs us nothing. Well, it's part of our dues. So it's just 1 way. NAR helps us in the real world every day.

Not to go back to Na, NAR gave us the roads, they gave us everything, right? 

[00:38:57] Dan Wagner: Yep. 

[00:38:58] Andreas Senie: So, 

[00:38:59] Dan Wagner: and Illinois is the same thing, Andreas. I mean, I think every state has that hotline and, uh, you know, we're, we're blessed to have a really good staff at Illinois. Um, you know, at the Chicago Main Street Association. I mean, across the board.

Um, you got experts that are there to help. Its me, the members, and the cost of, of membership. Is, uh, is really, uh, peanuts compared to, uh, what it would be to, if you didn't have that, and it really helps make people professional and to do, go to the next level. I think it's important for people to remember that.

One 

[00:39:31] Andreas Senie: of the most 

[00:39:33] Saul Klein: underutilized, one of the most underutilized resources that, that you have at your fingertips, if you're a realtor and you really should pay attention and play with this is RPR. property resource. It's the most amazing tool. It is so comprehensive. You can do so many things with it. It's covered Andreas in your dues.

So it didn't cost you anything extra to be able to utilize this. And people really should take a look at that product. It's RPR. Go look at RPR. Integrated into your practice. It's just, it's just an incredible resource for people that's listening. So, 

[00:40:08] Andreas Senie: so just RPR, just one part of RPR, so their market reports, the different studies they do, the data they provide as an example, their traffic data is last year data.

Which would have cost 10, 000 to run a study. They're going to give it to you. It's included. You can pull up any address in the U S and have that last year's traffic insight, average daily cars. If you're doing commercial on the residential side, they have their own valuation modules. It is an impressive piece of software.

And so to your point, I love doing my continuing ed when I'm teaching and instructing other realtors. And I, and I look at them and I said, Hey guys, I want to thank you so much for paying for this tool. I use to take business every day, win business. You've been paying it out of your dues and they go, what?

And then they go, look, and it's just an incredible resource. That's the realtor property resource coming out of our Jews. And it's, uh, also they have a technology toolbox over at NAR on their website. All the approved tech and partners, Greco is one of them as well as many others. So reach out to your technology toolbox as a members of NAR.

[00:41:17] Dan Wagner: And I want to give a shout out to, um, I mean, just again, what your dues pay for, uh, Shannon McGann is in charge of, uh, advocacy for the national association and she's in Washington with amazing, amazing staff. You have Evan Liddiard in charge of all of tax and the history and knowledge. He works. He, uh.

He's an adjunct professor at American University, uh, in the county. And just the, the level and status of, of all these different groups that we have at NAR, it is over, it's really awe inspiring. And to, to know that we have that at the local, state and national level is such a big deal. And again, we might not win them all, but if we didn't have someone there to push back, even in California, you still have the possibility of, of having, you know, The lawmakers say, boy, you know, we're going to take the, on the realtors.

Maybe we could reduce the level of pain that we're going to cause. I mean, there's, it's so important to have that at least somebody standing up and saying, this is not right. And, and that does across the board help out. I know, um, with the upcoming. Probably one of the biggest issues, but probably the biggest issue that's going to impact real estate, um, is going to be this election coming up in November.

And no matter where you side on who you're going to be for, it's important as a realtor that you get engaged, you're registered to vote, you know, who you're, you know, who your member of Congress is, you know, know where their positions are related to private property rights. That's, it's just such a big deal because we're looking at in 2020.

So January 2025 will be the new Congress will be put in place and they're going to start talking about redoing the entire tax code again. So remember, um, that every now, because there's never a super, there's never a large majority in the House or Senate. Um, they, they're passing legislation for tax, uh, with only, you know, one major, one person is a majority vote.

You have to work, do the filibuster because of a thing called reconciliation and all the budgets then last for 10 years. Because if you go through this thing called reconciliation, and I don't want to get too much into the weeds because it can get confusing, but, but you have the mortgage interest deduction capped at 10, 000, you know, that was done, you know, over 10 years ago.

And one of the thoughts that Republicans were in charge during that time, and they reduced The corporate tax rate to 21 percent and you know, that's going to be a big discussion. Should we increase it more? Should we you know, or reduce it more and how are we going to pay for stuff? and uh last time they looked at the 1031 to pay for and We were able to educate the republicans then to say hey the 1031 is obviously the 401k of real estate It's the savior of Of keeping the economy fluid, but they did take away the 1031 for personal property And so that's you know, you can't uh do 1031 of your yachts or your or your airplanes or Enterprise rent a car now because they had 100 percent deduction but Um, but that this tax stuff is serious because it tax impacts our business more than people have any idea Um, I'm sure Saul you could you could attest to that with your experience over the years.

Is tax a big deal for uh, For for real estate for real estate. 

[00:44:47] Saul Klein: No tax an incredible Big deal for everybody people don't really have somebody asked me the other day Is there does it ever end will it end? Uh, is there a ceiling? I said there's a ceiling the ceiling is When the debt service on the national debt exceeds the total income of all the people in this country, that's when we're close to the city and the government can only take so much.

Remember, there used to be an old joke, an old tax form, right? How much money did you make? Send it in. And when you get to that point and that money has to go to service the debt. We're in big trouble and we're in big trouble right now because the deficit just continues to grow. The national debt continues to grow.

Where is the government going to get the money? It has to get it from where's the biggest pot of money. It's around the real estate. And so everything they can do to take money out of real estate, they will all continue to do, and I say they, I mean, local state and national government. They'll continue to do this and homeownership and private property rights are the foundation of this country.

And they're just going to tax us into oblivion. They have no discipline at all when it comes to spending. I think Ronald Reagan had it right. He starved the beast. But nobody's willing to starve the beast today. And so it's just more and more taxes. They don't even call them taxes, fees, right? And we look at homeownership and the fact that people can't afford to buy, part of it is the fees and the costs that are there when they build.

So. Lots going on, Dan. We need people to be lobbying. We need people to understand how important private property rights are. And I'm, you know, and I'm afraid people lose track. People don't think about me. We lost that over the last couple of generations. I'm not sure. It 

[00:46:45] Dan Wagner: is such a big deal when you look at, uh, you know, property taxes, for example, it's, it's easy for, for governments just to say, yeah, we have to, we have to keep this, whatever product program is going is going.

And it ultimately, um, when you start having government, like in Cook County, the property taxes in different parts of the South suburbs. basically taking a property. You people can't and Becca, you might want to talk to this, but when you look at your property tax bill in a place, you're going to try to, to, to sell as a piece of commercial real estate.

You just can't even afford to pay the, um, the property tax bill is more than the debt service of the loan. I mean, you, did you want to mention that Becca, your experience with that? 

[00:47:30] Bekah Carlson: You know, we've seen it extensively in retail in particular, because tenants can only pay so much. And if their pass throughs to cover the actual taxes exceed the amount that's even going to rent and for the mortgage for the property owner, there's no point in owning.

Anything there. And so we're seeing a number of investors say, I can't, I cannot afford to invest in Cook County. And certainly in the southern suburbs, we have had it where it's, it's 13, 14 a foot for taxes and that it's, it's not possible. 16, 17 a foot as a tenant and have a thriving business. And it's eliminating small shops and the nationals have no interest in it.

So it's literally creating retail deserts where there shouldn't be. There's plenty of population that you would think would carry through, but the taxes are so onerous that they're just, it's literally destroying entire communities here in Chicago. 

[00:48:35] Dan Wagner: It is. And, and related to all that, everybody is the, the, the issue of, uh, of law enforcement.

And so, you know, you look like in Portland, you have people, um, I've gone to conferences and you I've met owners of property in downtown Portland, where it's, it was so dangerous because of all the, the writing and stuff that their apartments are worth less. And so, so it's, so, so even. Who you're going to elect locally and the decisions they're going to make related to crime.

And are they going to put people in jail for stealing 1, 000 or less? You know, that's a big thing. They're not doing that. And so, so it's. Well, that if you're a business to deal with that, that's a big deal. 

[00:49:21] Andreas Senie: Well, so pushing back on the, uh, being taxed into oblivion, what I'm also hearing around the room is it's back to location.

If your government is doing a better job in policing their, their community and spending their dollars. Then that's where the money is. But as Becca just pointed out, retail deserts, it's first, I've heard that in a long time. Retail seems to be thriving everywhere else, uh, at least here in Connecticut. But Inland's a great example.

Inland doesn't like to come up to Connecticut. You like the Sunbelt because of taxes, because of regulation, right? Investors have different tolerances. I think 

[00:49:53] Dan Wagner: we're, uh, we're one of the largest owners of property in Florida now, because of that. Um, Texas is another one. Tennessee, um, you know, all these different places, but that that's where people are selling their stuff in California and they're loving to go into these other places.

And it is, it, um, it's not a blind pool. Like Saul said, you're able to know exactly what you're getting. And, you know, you, you own this little section of the bathroom of this. Um, this apartment complex or whatever it is, self storage is a big 

[00:50:25] Andreas Senie: thing to come up to something like 14 different apps that give me partial ownership interests and different properties and mortgages that may or may not work.

They each have like 100 bucks in them. So I'm like, Oh, let me see how this works. You know, I would just want to see. Um, uh, but otherwise real estate is still the safe investment. It's longterm. It's generational, right? Even, even as we worry about water, uh, being big footed by the. National government or local municipalities.

There's, there are these pockets that people are thriving in smaller, smaller projects. 

[00:50:56] Dan Wagner: Well, and Andrea said a big deal for commercial real estate investing. Um, it's, it's not for just the, the, uh, Yeah. You, you need, so what's, so what's a big deal like with DSTs is that Dan Wagner, you can't just walk up to inland, um, in a drive through and say, Hey, I wanna buy A DST.

Uh, you can't do that. You have to have a third party financial advisor. That's analyzing all of your portfolio to see is this the right thing to go into because If you're looking to be able to get in and out of something, you're not going to get into it Yes, it's not good. You need to have someone who's going to analyze Everything that you have and to give you the best advice and someone who's not related to inland You need someone who's you know That someone who can say, yeah, this, this type of investment for you is no good.

And, um, I just, I hope everybody, um, on this, you know, that listens to us knows that it's super important to get professionals. That's why you use realtors. That's why, I mean, you can go on Zillow and you can buy whatever you want to buy. You can buy your house without a realtor, but, um, You know, that it's, there's so many horror stories that people have that they just don't know what they're getting into.

They don't know, they don't know what they don't know. And the, I think it's so, it's so important when you go into a town to go on vacation, you do some research, you call experts of the community. What, you know, what are the things to look for? Where do I go? But this is a major thing in your life is your money.

That's going to be paying for your kid's college. It's going to pay for your retirement and you can't make a fly by night decision. You need a Becca to be able to figure this out. And knowing that you have someone that has a code of ethics that you have to follow. I've been. My God, that code of ethics that the realtors have is a major deal.

And, you know, people can lose their, their livelihood if they don't, if they are unethical, if you're a realtor, they get, there's a whole system in place that, uh, finds you that, uh, you know, you, you have lots of issues related to that and, uh, I, I can't. Just emphasize enough for people. They have to look at those professionals and hopefully out of everything that we talk about, people understand that this is, this is a business that is very profitable and can be just wonderful, but it also can destroy people if they don't, or they're not careful.

[00:53:11] Andreas Senie: So I, I, Tom, almost daily. I'm talking with realtors and buyers and sellers. And I always go back to, you know, your residential realtors, they're your heart surgeons, your commercial brokers, they're your brains. You're not even going to begin to try this without the, try those types of things without a profession, right?

You want to surround yourself with someone and the most highly accredited person, the guy with the best track record, the best history, so on and so forth. Uh, Associated builders, contractors, NAR, NICAR, all of these groups, CCIM, right? They all provide that this level of, or expectation of better service, not to mention fiduciary care and so on.

[00:53:53] Dan Wagner: Well, and the Realtors Land Institute, I mean, people don't, I got to, I'm a member of that group and, oh my gosh, I love the Realtors Land Institute. Um, Aubrey Curtis is the CEO and, uh, they're, they're like, you know, CCIM. I mean, every, S I O R has, uh, Institute, um, IREM for, uh, for management. There's all these, every organization has this wonderful professionalism.

And the Realtors Land Institute is another example. If you're into buying land, you want to know that you're going to go to the experts and these are the experts on land. So across the board, um, it's all a part of it. And if you want to feel good about something, being a part of it, the Realtors, I'll say one more time that.

My gosh, they're involved with helping, um, with disasters. They have, uh, the realtors, uh, fund that helps pay for the difficulties that people have that are out there. They're, they're doing boys and girls club stuff. They're, you know, a lot of other really good, feel good things that they're involved with.

So it's, uh, it's really, you know, giving back to the community and. I'm just really proud, uh, that I'm a member. I'm proud that I'm a RPAC member. I donate, um, to the, the RPAC, uh, fund because I know that, uh, that's the lifeblood of, of being able to work in Washington and it's the state, local level. So, um, give, I'm a, I'm a Golden R Hall of Fame Presidential Circle.

APEC member. So, uh, it's, there you go. A 

[00:55:15] Andreas Senie: lot of accreditations. It's 

[00:55:16] Dan Wagner: all this , 

[00:55:19] Andreas Senie: all realtor emer on the call as well. Past president, director, Chris. The list goes on. It's there for us to use. Guys, we've gotten to the top of the hour quite quickly here on this July 4th show. What's the biggest piece of advice you want to give to the audience as they move forward?

Don't say join the NAR. You can't say use a realtor because that's bar none the most important thing they should do. Uh, last I heard the average home sale that sold without a realtor was 13 percent under price. So the fee is less than that in most cases. Uh, commercially, we're not even going to go how, how much of a disservice you could end up doing yourself if you don't use the proper specialist.

If you don't bring on a team, two heads are better than one. And I've got one, two, three, four here on the call, right? With me. So five, that's my biggest piece of advice. Build your team. So Sol, you're to my right. Actually, I'm gonna put back ahead of you. Well, 

[00:56:20] Bekah Carlson: and I have to pop off a little bit early here, but my biggest piece of advice is to be curious and to explore what's happening with other product types, with other sectors, what's going on in the market, in the industry, because sometimes we get a little hyper focused on what's in front of us.

And it's always exciting to expand your network and to build relationships and other product types. And it is important to understand globally and overarchingly what's happening, particularly in the financial markets and in politics these days. And this call was a phenomenal evidence of that. Have a wonderful 4th of July, everyone.

[00:56:58] Andreas Senie: You too. All right, now we'll jump over to Saul. 

[00:57:05] Saul Klein: Yeah, well, my advice would be, uh, as you prepare for the 4th of July weekend, be safe, be careful. We've got the next half of the year now to begin. There's going to be plenty of opportunity. It is an election year. There's so much going on. But take this weekend and, uh, forget all of the, uh, all the, uh, the negative things that we talked about today.

All right. And just enjoy it because it's a long weekend. We're taking off here Thursday and Friday and Saturday and Sunday. And, uh, we probably won't think too much about real estate during that period of time. 

[00:57:44] Andreas Senie: Well, well, commercial doesn't work weekend, but, uh, and certainly not evenings, thankfully. Chris, you're next up.

What's your big takeaway? 

[00:57:54] Chris Abel: Yeah. So I got, I got pretty excited, uh, listening to all the talk about dues and value of dues and Dan shouting out chapter staffs and that stuff gets me going. I love it. So, um, I would say I was jotting down a few notes here and I would say, you know, if you are a member of association in association, I'm going to combine a couple of things.

I like what Becca was saying about. Looking into different, you know, different verticals and looking into different avenues, and if it's worthwhile, that might be a different type of association. You might want to just give it a, give it a whirl for, for a year or so. But I would say for people who are members of associations, um, piece of advice is to use something that your dues pay for.

All of you described a whole bunch of different stuff that your dues pay for and the association you're involved with. And that's the best possible way to just grab onto something. You don't have to do everything. Cause we've tried to do everything that an association can do for you at once. Then you're going to burn out and you'd, something's going to end up lacking, but taking those baby steps of making sure you have a little bit of an idea of what you're paying for and how you could utilize it.

Use at least one of those and. The biggest reason is because if you find value, then, then you're going to stick around. And if you stick around, the associations are going to grow around you and build the network for you. Um, it's funny. I was putting out a post, uh, earlier this morning and something I realized we're, we're about, we're about one member away from being about 240 members of the Connecticut ABC chapter.

And anyone who joined five years ago had a network of around 185 companies. And just by sticking around Just by sticking around, they've, they've upped that network from about 185 to, you know, right next to 240 now. So just sticking around and taking advantage of these things, these things will grow around you.

And then, um, you know, it's kind of, you know, Dan touches on this every once a while, the, then when it comes to the political side, it's, it's strength in numbers. And, you know, you just, you pay your dues, you stay in the driver's seat, you take advantage of at least something that your dues pay for. And hopefully you can sit back and go from being a member to being a proud member, uh, faster because you know what's actually going on and what your dues are paying for.

[01:00:20] Andreas Senie: And then even volunteering and hopefully going into leadership roles, 

[01:00:23] Chris Abel: right? Whatever it is that, yeah, whatever it is that, yeah, whatever it is that, that floats your boat, find something that you're paying for. 

[01:00:31] Andreas Senie: Absolutely. Uh, find something you're paying for. Dan, what's Inland paying for? What's your biggest takeaway as we move, uh, 

[01:00:41] Dan Wagner: Well, well go, you know, jumping off of what everybody's saying, remember the, the strength of the wolf is the pack and the strength of the pack is the wolf and all of us together, uh, make America great.

And we love, uh, you know, not to, not to take anything from Donald Trump, but, um, I think it's important that all of us remember. That this country is based on private property rights and being from the land of Lincoln And you can see behind me. I have a picture of Lincoln here. Um, he was a real estate lawyer Uh very involved in private property rights and he was engaged in politics We all need to be engaged with whatever party you are a part of You need to evaluate those candidates and how that relates to your industry and then you need to be engaged in it.

You can't be a Sit back and be a little innocent observer. You have to be engaged So my big thing is get registered to vote know who you're voting for go meet your candidate find out You know tell them this is what you do And and again, that is our strength that we have people that are very Right wing that are part of realtors.

We have people that are moderates. We have people that are very left wing, but all of us come together under the private property rights and we, you know, eat what we kill, so to speak. And, and we're unusual of an industry because we all work together. So that's what I say, go get registered to vote. And remember, uh, happy 4th of July.

This is the best country in the entire world. 

[01:02:09] Andreas Senie: Here, here, uh, happy 4th of July to those tuning in to my cohost. Thank you for showing up every month and showing out. Both in your sectors and here on the show. I couldn't ask for a better group to be with 83 episodes and counting we keep growing mr. Mendoza Let's give a special shout out to him as he comes in and does the edits and makes us all look a little nicer Sound a little better Although Come see us in New York, Siri tech.

We're Dan Wagner at C5 this November, October, November is CRE tech 13th to 14th, as you heard again and again on this show in person events, your network is your net worth. The hope is as strong as the pack, Dan. I will continue to use that. Use CRE collab code CRE collab 20 for a special discount. We are a partner there.

Love to see you there in person. And then don't forget, see Dan Wagner speaking C5 event coming up on 9 17 in South Florida and catch our replays. Anytime, anywhere you get your audio, Google podcasts, Spotify, Stitcher, and YouTube, there's a great host of great content, including sector interviews, past shows.

And please do share rate and reviews. It really does help. Thank you for tuning in to this month's round table. Tune in again next month, first Thursday of the month to learn more about the industry and have a great 4th of July. Be safe. Get out there. Keep going. Keep growing onward and upward. As I like to say, thank you all.

[01:03:48] Reagan Mendoza: Thanks for tuning in to the real estate round table powered by crack. Oh, AI, your source for the latest in real estate and technology for past episodes, sector interviews, and more great content. Follow us on all social media and YouTube at CRE collaborative. You can also find us anywhere. You listen to podcasts, please like subscribe and share.

It really does help. Thanks again for tuning in and we'll see at the next real estate round table. 

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