uh people can't go to work we've been pushed remote
38 million plus people and growing out of work
i have no purpose i i lost my team i don't know where i'm going i don't know
how i'm going to take care of my family of course there's going to be depression
and i'm going to want to drink and i'm going to want to peel it up
and on top of all that america needs to be rebooted now which means we need to
buy a local not from amazon okay like i i have a
policy in my family right now for three months we will not
buy anything from amazon we will only spend local and we will go out so
just like we flatten the curve if we actually did whatever that means
we need to now spike the economic expansion by having americans leave
their homes buy local go to their malls use the
money the government's giving them and re-stimulate reboot this thing
for your book the ten times rule uh you know we in this country have
succeeded and become a market-driven economy
unlike any other nation but right now even that's in trouble even though the
numbers show you one story uh the main street and market
relationship is important so where are we in that dynamic
well we we have a we have a stock market that makes no sense to anyone
most of america is not benefiting or participating in that
we have individuals that are getting checks most of which are getting checks
businesses that are being subsidized uh seven trillion dollars in new debt
every everybody should have got richer so like all your listeners like did you
do are you richer because when you print seven trillion
dollars everybody should have more money right now but we don't why
because you stopped the economic engine and there there's half the country
saying i don't want to go back to work of course you don't want to go back to
work you want to get paid not to go to work but the economic
engine requires the car dealer the plumber the roofer
the the every business in america the masseuse the cosmetologists
like every company in america has to go back to work personally i would rather
risk the the virus i'm 62 years old i'm the target group i would rather risk
the virus than risk the 107 people that work for
me depend on me for work and all the thousands of
companies that we consult and work with in any contraction like 2008 and this is
even bigger than that you have to expand into the contraction
or you will be left smaller and worse off for it
so um the econ the stock market nutzoid okay real
estate across the board all frozen up we got major problems that will take
place millions maybe tens of millions of businesses
will go bankrupt in the fall and winter unless americans
go out support their local businesses like
everybody everybody right now the government can't do any more than it's
done it'll try to but people 330 million
people need to grab their money their
checkbooks their visa cards or mastercards
and go out and re-stimulate their economy
this is not somebody else's economy this is our economy like the old thing used
to be buy america now it needs to be buy local
way you approach things i just put in real life
uh when you talk about this because it's all interconnected
real estate let's just focus on real estate we've seen some headlines come
out about mortgage failers for parents is not
enough we're building that crisis i i've seen some good
stories like the dallas market has seen a spike in wholesale uh but at the
same time other markets are not so the supply chain of home builders
builders even the vertical builders that's being interrupted what does that
mean to the average american out there yeah it's a great question like you know
all real estate tends to get lumped together as
real estate and it's all very separate so let me just start with homes single
family homes single family homes are going to
continue to be punished in america you have 80 million baby boomers that
are retiring they don't want a home they don't want to go buy a home
they're more likely to go on a cruise even though they could get sick on it
than go go into a home because they want to
spend the next 10 or 15 years of their life traveling and seeing the world
you also have 75 million millennials not only do they not have the wherewithal to
buy a home they have no interest in buying a home they don't want to lose
their mobility so you have the single family home
this an issue and it's going to continue to be an issue
you have retail retail in america we have 10 times
more 10x the 10x rule 10 times more retail in this country per capita
than any other country on the planet what we have too much retail there
there's a store on every street corner like there's just too many choices for
restaurants and and somebody somebody told me uh that 14
of the restaurants in america in eight weeks
have already said permanently clothes will not come back
now these companies were in trouble before this event if you were in trouble
any kind of real estate that was in trouble before this is in more trouble
after this office buildings i don't believe all the
the negative news about the office buildings will never be used again we're
all going to be working remote that's not true
but for for 2000 years man has wanted man and men and women let me be
politically correct men and women have wanted to work together
outside their home i don't want to spend all day
at my house i want to go someplace where i do this thing called w-o-r-k
and you can only do so much of that on video you know you can only do so much
of that connection on video at which point
hey i need to bring the group together i mean you got goldman sachs and
blackstone those guys they have hundreds of millions of dollars invested
where their people work you're not going to just abandon that tomorrow also with
the social distancing bs if you will the six foot arbitrary you could
actually see an expansion of office space in america
but the real winner in this whole deal is going to be multi-family real estate
we own almost 8 000 apartments today people are
going to spend money where they rent where
they live that is going to be the biggest winner in the real estate
space going forward
erica and i've been working on this for a while with some of the
big builders out there and this component is the commercial
mortgage-backed security component of this the cmbs
loans uh you know when you look at uh people who leverage and build vertically
big buildings or rental units in some form this is a
problem of hundreds of millions of dollars going on
right now in this country and if we see a collapse of
builders you know builders have to hire contractors subcontractors look at
all the supply lines that are necessary to build look
at the components the various industries that
is that literally create what goes into a building
mixed use or pure residential if that one component of our of our
economy fails and cmbs loans get into more trouble and builders get
into more trouble i've heard numbers as high as 540
billion nationwide yeah
yeah it's crazy look at it you're talking about a half a trillion dollars
but let me just say on the other side of that blackstone by itself
just one small group has 185 billion dollars
in cash today to put to work they are sitting on the sidelines there's guys
like blacks the big groups that are sitting there
now the question is where does that money go
okay i know guys like me right now that are actually buying fannie and freddie
loans that fannie and freddie is stepping out
of it selling it to a guy like me i sit there i get a 60 position on let's
say 100 million deal i take fannie's place i give them
60 million i replace their money and now i own that property i'm waiting
for that thing to fail so i can buy it for basically take
ownership of 60 60 cents on a dollar american real
estate is the most valuable real estate on planet earth today
like if you compare what we have in this country to like dubai
they think that 70 of all the companies in dubai are going to fail
why is that they're dependent upon travelers
they're new businesses they're only 10 years old like it's only 10 or 15 years
old dubai is brand new they have they don't have mature
companies even if we only if we lose 8 million companies in
america we still have 24 million businesses doing business
and 330 million people are going to go spend money every day
so money money real estate works because where money
money goes and attention goes real estate has to be there to support
companies and and and employees and infrastructures
so i don't i think somebody because the amount of liquidity david in the
marketplace somebody is going to step in and say hey
i'll take that cmbs loan why because i want that piece
of real estate that sits behind it is that
again all kinds of you know mixed-use residential
well we can leave condos off this discussion but stick with the rent
yeah please do or the hotel market uh when a builder has to lay off a
thousand people when someone at that level has to lay
them off if they run into more trouble you know
if you multiply that by a number of builders not everybody's a black stone
and i'm not saying they want to lay off i'm talking to these builders
and they say look i don't want to go out of business i don't want
to default on my loans yeah i want to keep going
yeah yeah yeah but david builders in these cycles
unfortunately always go broke always okay they had their they had
their little they had their their 10 years of expansion okay we went into
this massive building over building they always over-built
there's there's never been a cycle where the builder doesn't over build he's a
builder he doesn't know when to stop building
and he ends up losing all his money as the last two or three deals because he
ends up with this big payroll he's got it yeah exactly
and then and then the music stops everybody's looking for a chair and
first one builder then it's the second builder then it's a third builder and
then nobody wants to buy that stuff so that's why i'm telling you the cash
flow positive apartments that exist in this
country today i mean this this is actually going to be who wins
out of this because you can't change some of what's going to happen
it's just too big right it's too enormous so
who wins out of the builder that couldn't finish the apartment
or the hilton hotel okay those hotels that were going to be hiltons or
radissons there's too many of them in america
and so what happens to those oh they're probably going to be either sit there
and and rust out or it's going to be
converted to affordable apartments trump will probably come in and say hey
let's give some big tax credit for these for this to happen and provide
affordable so the retail in this country is in great
locations location location location that's what's going to win this
this game whether cmbs loan that somebody's trying to buy
or the real estate they're trying to take out somebody will figure out
in great cities in america that have positive migration
job growth people coming back to work people going back at the game
that those pieces of real estate will will 10 years from now be more valuable
than they are today because you can't look at 2020 anymore now you got to
start looking at 20 30.
you