How is the corona virus recession different than the 2008 Great Recession
with the subprime market? It's the same thing happening again. The stock market
blew up in both. Do we have a real estate bubble that has pop just like before?
Let's find out. Everyone is just fighting for help everyone. I'm like, "Guys, this is not
working."
Today, I'm going to be meeting Tyler Bennett up on the rooftop. Now, you know him. He's
my acquisitions director. We've done a billion dollars worth of real estate
together. Man, it is a ghost town. This is supposed to be a convention center
thriving where people want to come and meet. Before I meet Tyler though, I just
want to break this down for you. There's a difference between the recession of
2008 and what we're facing right now. However, there are key distinctions.
Because right now we have this big huge health problem. And back then, we had a
huge financial crisis. We had the stock market blowing up. We had the real estate
bubble pop. It is not often that they actually do that at the exact same time.
It was a perfect storm back then. But right now, what does this mean for your
future? What does this mean for your ability to pay mortgage or get back to
business? Will this recession be deep and long and last? Is the real estate market
going to fall out? I'm going to get all those answers right now up there. Hey! Wow! Look
at this parking lot below. -Yeah. -There's like one car. It's yours. It's empty. And
then the other one is mine. So, dude. Wild times, right? -It is. -Okay, let me ask you.
Corona virus recession right now versus what you and I went through together in
2008. Are they the same thing or are they different. -No, completely different. I mean
this is really... It's a health pandemic that's having economic factors.
-Wait, it's health pandemic but look at that. The stock market has freaking crashed, it's
crashed like... -I know. -That's what happened in 2008. -Yeah, we've never been told to
not go to work. -Right. -And and to stay in our houses like that... We just never
seen anything like this. So, it's so different than 2008.
-You know, 2008 was a subprime mortgage crisis stacked on top of a recession,
right? With the stock market. Both hit at the same time, That only happens
like 2 out of 5 times. That is just not a normal scenario situation. Are you
saying that that once the coronavirus like works itself out that we're going to
be back to work and there will be no recession? -I think it'll turn on a lot
faster than a normal recession cycle. -Predict. When is the economy going to get
functioning again? I'm hoping, Kris that by May-June, the lights... -What year?
What? -This year. -No way. -Yeah. -There's absolutely no... There's
no freaking way. -We have to. -If you have one case of corona virus, this whole thing is
going to like explode all over again. -I know. But we can't print enough money to keep
everything shut down for year. -How do you know that's true? -Well, I don't. -Like, we passed 2
trillion dollars, why not another 2 trillion? Why don't have another 10
trillion? Like... Dude, we've got to be able to do this until there's a vaccine.
Honestly, I don't see them kicking the trash out of this virus and eradicating
it without a vaccine which means they've got to change their entire policy. -I agree.
The virus is going to be around so we're they're going to have to adapt and
learn how to open up businesses and deal with it or stay hunker down and have
empty parking lots. I don't know. -Either way, there are some big differences. First of
all, 2008, there was a bubble, right? -Yeah. -The prices were going up higher and
higher and higher. And then we started building real estate that people didn't
need. Everyone became an investor, everyone was spec building on a property.
And when the bubble burst, there was no one to buy that real estate. So, we had
all of this leftover overage. And that's what dropped the prices like crazy. Do we
have a bubble right now? -No. And 2008 max leveraged, savings
accounts were low, right? So, this one's way different. People have money coming
into this. Housing market, banking financial systems were all sound with
more reserves than they've ever had before. Corporations have cash in the
bank. -And guy's Fannie and Freddie, make no mistake. They're saying we're short
3.3 million houses that still need to be built to satisfy American
needs. There's no bubble. -Yeah. -By the way, real estate if anything is just going to
like creep to a pause. -Yeah. -You might even go from a seller's market to a
buyers market. -Yeah. Less competition out there. Builders may be stalling
developing or doing new builds, pulling permits stuff like that. But really I
think it's just pause right now. It's on pause, I don't see it crashing or just
tanking like it did in 2008. But it's going to be a good opportunity to buy over
the next 3, 6, 9, 12 months. -So, 2008, guess what Tyler and I we're doing?
We're actually out there, we move 2 billion dollars worth of real estate. In
the first 5 years, we need our investors over 100 million dollars
because one of bubble bops, what it does is it brings the prices real low. And
what you're saying is that's not going to happen again. We're going to see a
slowdown but we have to keep on building. The only
that could depress the market is literally if this corona virus hangs out
longer than May. Like if this is a June, July, August, September. Like if this is a
12 month thing or 18 months until we get to vaccine, what might
happen to the market then? -Well, then we're going to see prices drop. We're going to
see everything drop. Because there's going to be no demand. -So, there's going to be
no movement in the market. And innately, that's just going to drive prices
down. If we start getting back to work in the next 2, 3, 4 months even,
I feel like prices are going to be pretty stable in real estate. -Okay. Let's talk
about the stock market, right? I mean check out what's happened to the stock
market. The market has dropped down
substantially. We've got like 10% unemployment. Which... Listen, if you're
sending people home, you would kind of expect that. But if this keeps going, it's
actually only going to get worse. If the corona virus ends whether it's in one
month, 2 months or 3 months, does the stock market go back to where it was
or is this actually this stock market's recession? -So, I think it's going to take
companies a longer time to recover because they're getting hit hard. And
they're getting hit hard from a cash flow perspective. -Be specific. How is this
impacting your businesses already. -Yeah. So, I have multiple businesses, hundreds of
employees. I've laid off the majority of them. -Okay. -And my revenues are down
95% from 30 days ago. -Okay. So, think about the 95%
drop in revenue. Laying off almost all of your people. Like, that's
crazy. How does the government stimulus package
come through for you? -It did just yesterday. -Okay. And is it going to be
everything that you hoped it would? -No. -Why not? There's a lot more strings
attached than I thought. -Okay. -There's kind of a broken system here where I believe
that by putting money in the private sector, that'll get to the normal citizen
way faster. However, some of my employees make more money through unemployment
than they do through my employment. So, why would they come back? -Dude, check that
out. Right now, did you know that the government is trying to take every
company and say, "Crap! We're overwhelmed. We can't be the unemployment office of
America." So, you're the unemployment office, we're going to give you this money
but here's the string attached: Only if he'll keep your people employed. But your
people are 1099. And this does not cover 1099. -It doesn't cover 1099. And all my
W-2 people who are getting unemployment, they make more money through an
employment than if I hire them back. -How are they making more money through
unemployment? -Because they're getting a certain percentage of their wages plus
that extra $600 a a week. -Okay. -That so for an entry-level
type employee, they're making more there, So, why would they come back to work for me? I can't
even open my doors. So, they're not coming back to work. They're sitting at home.
It's just are they getting paid through unemployment or from me with stimulus
money. So, right now, the question is like this is crazy. -The cluster. -This is a
total cluster bomb. -Yes. -So, the question is how then in your mind is this most
different this pandemic than just not just a recession but 2008 dude, when real
estate price is just like plummeted, I mean, honestly, I can't wait for that to
happen again in my lifetime. I promise I'm going to hit a freaking 10
times harder than I did last time. Number 1 biggest
for a bid of 2008 was I helped so many people and we did a lot. But man, there
was so much more to do. I did not know that it was going to be so historic. Do you
think if corona virus and keeps on extending the way it is --employees are
getting hurt, business owners are getting hurt. The government stimulus packages
have strings attached. Like could this actually get depression
bad or really bad? -Yes. -It could get really bad. -What would take to that to happen? -I think
time frame. If we're closed down, if we can't get our grasp around this virus
and we can't get back to work, you can't not evict tenants for not paying,
you can't give mortgages lenient on payments. You can't defer all the
commercial loans. At some point, lenders need to be made whole or or not. But
people are just going to stop making payments. -So, guys... Reality is Donald Trump
has done this wrong in my opinion. I think he's starting to realize. He's like,
"Oh, no. We got to get the economy back to work." I'm like, 'Bro, the only way you're
getting the economy back to work is to send all of the at-risk or older people
home. Let them barricade their doors. Give them money. Slide the food through the
food slot for freaking 14 months of self-quarantining and let the economy get back
to work." If we don't do that, I think we will create our own depression. By the way,
would be great for real estate. Good for business if you know how to pivot. But
not everyone really knows how to pivot. -Yeah. And someday, this business
simply cannot pivot. We've seen amazing stories locally and nationally
of businesses being innovative and keeping their doors open and surviving.
But they're surviving, they're not thriving. -Have you figured out how to be
6-feet away in a hair salon? -No. -Like doing massage 6-feet way?
-We cannot cut hair or wax
hair or give laser treatments right inside of six feet. -So, then
get real with me for just a moment. Like, how like personal... Like I know you have a
lot of investments. You have other businesses and you know things are
working. But like, sure your businesses that are
suffering right now. What is it really like? Like, how worried does this have you
about your future? My personal experience over the last 3, 4 weeks is I'm
working 16 hours a day, 7 days a week. I'm not spending time at home with my
kids or these stories you see on social media of what do I do with my kids and
they're playing board games and doing all this stuff. Like, that's not my world.
I'm in survival mode. And I've got employees that have relied on me that I
can't do anything for and it's frustrating, it's hard. -So guys, I want you
understand with this market that we're in right now, this is we're different and
crazy. This is a global crisis. And right now, the pain is being felt everywhere.
And personally, if this is are actually going to get fixed, it's going to be
world leaders and governments coming together and saying "You know what? We
have to make the hard decisions?" Either let the old people die which no one is
going to let happen. I wouldn't let that happen. They're going to have to start
putting the resources to those at risk. And let the economy open up. Because if
we kill off the global economy, now, you have to start weighing out the horrible
moral question of, "Uh-oh, do I choose to kill off the global economy or do I allow
unfortunately these people about." There's a middle ground. There's a solution on
that. But they're not getting there. Everyone is just fighting for help
everyone. I'm like, "Guys, this is not working." -I would not want to be a
politician right now, right? Because you have this balancing act and it's so new.
They've never dealt with it before. And so, everybody's just taking information
that changes daily, hourly, by the minute and figuring out "What do I do with that
information? How do I respond?" And so, that's what we're trying to do our best
of in my business and our real estate business is "What do we do based on the
information we have?" But there's a way to get back to work. -Yes. -And you got to be
creative. And in the beauty industry, I've seen stats at 25 to 40 percent
of them are never going to reopen based off the damage they've already experienced.
-Yeah. -And so, you've got to figure out how to not be in those percentages
and figure how to make it work. -Here's the biggest problem: Right now,
we're killing it in real estate. We're going to keep going out there, we're going to
keep buying. It is most definitely when fear is at a high or everyone runs this
direction, it's always a good time to be in real estate. But here's the thing
right now, the government stimulus, it's not working all that well. You filed 4
years and got it yesterday. I filed for mine and I'm getting my check tomorrow.
But you know the problem with it is? First of all, the local bank has actually
said "We're not going to do it the way the SBA is actually saying. We're not
going to do the rules over the last 12 months. We're going to do 2019."
I got shortchanged 30% of my money and they said, "Tough. It's the only way we can
help as many people. By the way, we're almost out of stimulus. It's going to be
gone." It's like, take less take what I can get and sign something saying I can
never go after the rest. -Yeah. -And they're going to run out of money before some banks
even got their act together to accept application. -I know, I know.
-Yeah. -So, I feel blessed in that regard. But right now, no one was really
ready for how crazy this is. So, here's your takeaway message that I
I want you get out of this, right? 2008 was a total different scenario. It was the
perfect storm. It was a massive real-estate bubble popping. And at the
exact same time, we had the stock market crashing. Right now, the stock where is
crashing because of what happened with the corona virus. And when it cleans
itself up whether it is 14,16 months from now or whether it's in 1 or 2
months, somewhere in there, the market has to rebound. Real estate won't need to. If
anything, real estate gets juicier depending on like the longer this goes,
the better real estate gets is a really important take away. And frankly, the
faster that we get back on our feet, the real world can get back to doing
business. And we can all get made whole financially as best as possible. So, my
friends, Tyler Bennett, dude, thank you for being
here today. -You bet. -On the rooftop. Social distancing from all of you people out
here that are not actually there. Well, my car is wet. I got my top up. So... But the
reality is I feel like a very blessed human being. So, it's okay. There's a lot
of people, there's a lot of suffering out there in the world today. Listen, I want
to thank you for watching today's video all about understanding the difference
between what is happening with this recession and the corona virus. How
different it is from what happened 2008. Why it is still
such a great time to actually get business moving in the right direction.
Certainly investing in real estate hoping that the economy gets
jump-started soon. For those of you that want to connect more with me on this
topic and understand why it's so good in real estate, check out their report on my
last billion dollars worth of real estate. Click the link below. I'm going to
send my track record in the mail to you. And you can review it and literally see
all the addresses and see my strategy. And you know what? I want you to do
what's called R&D, ripoff and duplicate. Take advantage of my system and then
take it apart and then go implement it yourself and make as much money as you
can. Because I'm telling you right now, it is that time. It might be raining cats and
dogs but that doesn't mean you can't be actually thriving not just surviving.
Peace out. See you tomorrow.