Jason Hartman talks with Adam about the definition of a recession and what impact globalization may (or may not) have on the future of recessions. They also explore how the United States reacts to trade situations and what impact that has on markets such as the ones we invest in.

Investor 0:00
My wife and I were drawn to you because we liked the idea of putting money down qualifying, making sure we can cover the mortgage, you know, and have reserves like you were talking a language that was very appealing, based on what we had gone through before.

Announcer 0:16
Welcome to the creating wealth show with Jason Hartman. You’re about to learn a new slant on investing some exciting techniques and fresh new approaches to the world’s most historically proven asset class that will enable you to create more wealth and freedom than you ever thought possible. Jason is a genuine self made multi millionaire who’s actually been there and done it. He’s a successful investor, lender, developer and entrepreneur who’s owned properties in 11 states had hundreds of tenants and been involved in thousands of real estate transactions. This program will help you follow in Jason’s footsteps on the road to your financial independence day. You really can do it on now. Here’s your host host Jason Hartman with the complete solution for real estate investors.

Jason Hartman 1:06
Welcome to Episode 1292 1292. Hey, we’re almost at Episode 1300. Thanks for joining us today as we talk about something very important. And that is the looming recession, that will inevitably come. In fact, many would argue that it is overdue, it is overdue. And one of the things we’re going to be doing at profits in Paradise is we’re going to be talking about stress testing your portfolio so that you sail through the recession in comfort and luxury versus many investors out there, especially those speculators and those people who bought bad properties and those people who didn’t know how to either manage their managers or self managed successfully. We’re going to dive into that today. And I’ve got Adam here with me, Adam, welcome back. How you doing?

Adam 1:59
I’m doing Well, thanks for having me back.

Jason Hartman 2:01
Good to have you on. And when do you think the recession will come?

Adam 2:05
I think it’s going to get pushed back until at least after the presidential election. I don’t see the politicians willing to do anything to mess with it before them.

Jason Hartman 2:16
Well, yeah. I’ve long thought about that in every election cycle for, you know, decades now. I don’t know, Trump’s opponents would love to see the economy fall down during the heavy part of the election season?

Adam 2:29
Well, I think they’re going to be focused way too much on impeachment to worry about the recession. Yeah, I’m on the phone thing. They’ll push that back.

Jason Hartman 2:38
They’ll put that on the table. Well, it’s not that they can exactly control this anyway, but we all sort of believe that they exert some control over which they do a little bit, but not completely. So stress testing. You’ve heard a lot coming out of the Great Recession 10 years ago, about stress testing the banks, stress testing the financial system, and how The Fed has implemented new programs to do this. But what about us? What about all of us investors? Are we stress testing our own portfolios? Can we make it through the next cycle? That is definitely coming up having gone through many recessions in my career now. In fact, I just had my anniversary and I forgot to mention it. Got my license on September 13, many decades ago. So yeah, 19. Exactly. Right. That’s when I got it. I’ve been in the real estate business a long, long time, and I have seen lots of stuff and approaching, although I do not know the exact number and which I did, but I’m getting close to through my various companies over the years and personally, I’m getting close to that 10,000 transaction mark. Yes, dear listeners, you are listening to a person with a big long resume, who’s made lots of mistakes in seeing lots of things and seen lots of other people make mistakes. And I’ve had lots of success too. And I’ve seen lots of our clients be very successful. So there’s a lot of knowledge that I want to impart to you on this podcast five days a week, and then through her guided visualizations on our bonus day on Saturday. And then, of course, at our live conferences, like the upcoming profits in paradise. So stress testing, a very important thing now, on Thursday, we talked a lot about GDP, gross domestic product, and what that means. And you know, they’ll talk about GDP as it relates to a nation, which is what it’s really meant for, but people also apply GDP to states and even cities, and they apply it to the entire planet Earth, what is the entire human races GDP every years and by the way, that number is somewhere in the neighborhood of $60 trillion. Of course, the US is around $20 trillion. And then China and Japan trail the US economy, of course. So a recession is when GDP Well, the academic definition of recession is when GDP declines for two straight quarters or more. Let’s take a look at what a recession is, and dissect this a little bit. So CNBC explains on YouTube has a great series of videos, and we’re going to share one with you here about recessions.

Adam 5:31
But last time, there was a global recession within the late 2000s. The scale and timing of that great recession, as it’s now now varied from country to country, but on a global level. It was the worst financial crisis since the Great Depression. Now a decade on some people are worried the next worldwide downturn, maybe just around the corner. Well, there is no universally accepted definition of a recession. A technical recession is a decline of gross domestic product or GDP for three consecutive quarters. That means the value of all the goods and services produced in a country went down for six months straight. But the US National Bureau of Economic Research, which tracks the start and finish of each us recession says a recession can begin even earlier than that the bureau measures and collects monthly data for for other areas in addition to GDP, real income, employment, manufacturing and retail. If these economic indicators decline, it’s likely GDP will to win our recession is not the same as stagnation that’s simply a period of low or zero growth. Nor is it the depression which is a more severe decline that last several years between 1960 and 2007. There were 122 recessions in 21. advanced economies This may sound like a lot but those economies were really only in recession for around 10% of the time. Each recession is unique but they often share several characteristics. recession’s usually last about a year. country’s GDP typically falls around 2%. Although in some severe cases that decline in hit 5% investment imports and industrial production normally drop and financial markets frequently face turmoil. All this can have a very negative impact on a country’s population. Many people lose their jobs and if they can’t afford their mortgages, they lose their homes and house prices drop. They also have less money to spend in shops and restaurants. That means businesses make less money and many go bankrupt. So is there a way to spot a recession before it hits?

Adam 7:32
Some economists focus on the number of people employed in the manufacturing sector in the world of manufacturing orders are often booked months in advance when a factory of company gets fewer orders. They’ll stop hiring new workers and potentially lay off some existing workers to this is a good sign other parts of the economy will serve as well.

Jason Hartman 7:50
Now that’s not as good as it used to be though that indicator because we are not in what Alvin Toffler called in his fantastic Books, one of which is powershift, that I read back, I think around 1990 or so, where he talks about the smokestack economies when we lived in a world of the industrial age of smokestack economies that really mattered. But now that we are in the newer and cleaner age, the information age that isn’t, is telling us it used to be. So you see how all of these indicators aren’t what they used to be, because GDP isn’t the same as it used to be. It changes over time as technologies change. So the smokestack industries being the Industrial Revolution, the symbol of the Industrial Revolution, and the information age, the one we’re in now, it’s different manufacturing jobs. I mean, yes, that matters. Of course it matters. And when we look for markets where we want to recommend properties to you, which by the way, Adam, you’ve got one to talk about today. We like to look for markets. With a good stable manufacturing base, why? Because manufacturing doesn’t just get up and move like information businesses, right? As we’ve talked about on prior episodes, tracking where say the millennial generation is moving, where the retiring baby boomers are moving. Well, a lot of these people with these types of careers that they tend to focus on, whether it be retiring baby boomers who have a second gig, and it’s largely maybe an info based business or a technology oriented business, or millennials who are very high tech, they move easily, right? They move from city to city, they’re not working on an assembly line. Now, one of our longest running markets, while Indianapolis is our longest running market of the mall, but one of our other longest running markets would be Memphis Memphis has a fair amount of manufacturing but more logistics. So FedEx For example, one of the huge employees in Memphis, is not going to just get up and move, even though their business is about moving packages. Their plant in Memphis is very expensive and very difficult to move. So these businesses aren’t as mobile. You see people and you hear stories of it all the time. Like when I had dinner with Tim Ferriss, the author of the four hour workweek, about two years ago, he moved from Silicon Valley area, to Austin, Texas, he doesn’t have any equipment to move other than maybe his laptop, right? He’s an infopreneur. He’s a marketer. He’s an author, these people in these knowledge jobs, these information age jobs, they can just get up and move easily. And as investors, we don’t like that, because it’s too easy for an economy to shift quickly. In those types of areas. When you have a strong manufacturing base. They’re really rooted. Those employers are really rooted to that city. Adam, any thoughts on that?

Adam 10:59
Yeah, I was. Looking at the when they discussed how much the recession hits, you know, GDP can drop 2%. In the United States, if you look at a $20 trillion economy, that’s only about 400 billion, which seems like a big number. But if you look at especially things like the trade war hit and stuff, and you see that can affect, you know, our trade deficit right now in our trade alignment is about 700 billion, if we make it to where companies are paying $400 billion in tariffs, or you know, even 100 billion dollars in tariffs instead, and that’s been passed down to us, that is half a percent or a percent of GDP right there that we’re paying in tariffs as we import these goods still. And so that’s one of those things that if you see those happening, and government spending isn’t going up to offset that, that can drive us into the recession pretty quickly.

Jason Hartman 11:49
Well, I know you are a big fan of government spending.

Adam 11:53
Not necessarily

Jason Hartman 11:56
Hello is dz about that battle. I know you better you know, you know in like 50 years, I’m still going to be bugging you about your socialist tendencies. But by then we will have more evidence. But hey, there’s no lack of evidence now, as to modern monetary theory, and all of this stuff. So very interesting. Okay, let’s continue with the video.

Adam 12:18
Other experts examine the government bond market to see how willing investors are to lend money to governments over a long period of time. When investors are concerned the economy might be slowing down, they often sell their shares in public companies, and instead loan them money to governments by buying bonds. That’s because bonds are usually seen as a less risky investment. So those are the warning signs of a recession. But what actually causes them. A healthy economy has lots of money flowing through it, company owners are putting money into their business and hiring more people. Consumers are spending money on their products and services. But if businesses and consumers stop spending that money, less money flows through the economy and growth begins to slow, a few factors can block that flow of money. One of Those high interest rates when rates are high, people get more money for putting their savings in a bank account. But they also end up having to shell out more to get a loan. This can encourage people and businesses to save more and borrow less causing their spending too. For consumer confidence is a way to measure people’s psychological approach to money. Economists track this closely. low levels of consumer confidence means people are worried about the economy and that can cause them once again to hold on to their money rather than invest or spend it. A stock market crash for example, is one of the most Surefire ways to shake up consumer confidence across the board. But inflation may be the biggest factor. It causes the prices of goods and services to increase. If your paycheck isn’t growing alongside it. That means you will have to cut back and buy fewer things. When this happens. people and businesses once again tend to reduce spending and save more. And an economic slump that starts in one country can spread beyond its borders creating a domino effect. Let’s explore an example the 19 97 financial crisis in East and Southeast Asia. It began in Thailand when the value of the country’s currency the Thai baht, collapsed, investors had lost confidence in the country and that lack of confidence contaminated the rest of the region. Travelers face strict limits on the amount of currency they can take out of the country. Other Asian currencies like the Malaysian ring it and Indonesia rupee began to lose value too soon, investors around the world have become reluctant to lend money to any developing country. More recently, the trade war between the US and China has also affected many other parts of the world. These two economic superpowers produces sell about 40% of all global output, and economists worried the knock on effects from their continued conflict could create the next major international recession. Take Germany for instance, its economy is largely built upon exports. It makes money by building machinery and equipment and sending it abroad to other countries like China. But if China anticipates less demand for its products from the US because of the trade war, it’s going to order less That machinery from Germany to make them Germany is the biggest economy in the Eurozone, which means if it goes into a recession the rest of Europe will likely suffer to. Some experts say that the financial crisis in 2008 ushered in a new era of D globalization. That means nation states are less focused on international trade and more focused on their domestic economic agendas. They say all this could lead to more frequent recessions. And because of that, these experts believe we should reconsider what constitutes economic success in developed countries,

Jason Hartman 15:30
total debt burdens will rise. It’s sort of interesting how they say but don’t bother to ever elaborate or explain on how the D globalization that they’re talking about could lead to more recessions. I mean, I love how they just glossed over that. It seems like a pretty darn important point. I’d like to know the theory behind that. I’m just not sure what that would be Any thoughts?

Adam 15:53
No, I don’t know exactly how that would be. I mean, you would you would think it would matter especially we talked about the domino effect that the More globalization you have, the more that we rely on each other. Yeah, the more it would impact. Now, I will say the eurozone, that being a big part of it, that could have a quick domino effect. Because, you know, when one country goes under, or goes into crisis, there’s just not much they can do as their own country, you know, they have to rely on the other countries as well. And if the other countries look at it and say, yeah, we’re not going to help you out right now. And they can’t help themselves. You’re at a, you know, that’s just a spiral that you can go down. Now, I will say, the eurozone because of globalization are more likely to help each other out because they know, it’s better for them as a as an area to do it.

Jason Hartman 16:38
Yeah, yeah. Well, they’re, you know, super connected, obviously. And we’ve got all this stuff with Brexit. And I mean, Europe is a mess. As I’ve said before, it’s really quite a mess. I mean, I don’t know that’s like too much to talk about today. Let me open that Pandora’s box.

Adam 16:53
But yeah, I don’t understand how the globalization would cause more recessions.

Jason Hartman 16:58
Yeah, me neither. That seems Like a faulty point, I mean, I don’t know, maybe it’s, you know, clearly someone’s theory. But I don’t know that it’s enough to say that that’s true. I mean, the interdependency in the economy is good for peace, we’re very unlikely to go to war with our own customers, right? We’re unlikely to destroy our customers, as people. So that’s great news for society. In keeping the world peace is more and more trade. But it definitely has some problems. And you know, Trump is bringing those up. And I gotta tell you, I applaud him for doing that. It’s very unpopular, what he’s doing. But you know, you cannot have open as I’ve said, many, many times, you cannot just have these ridiculously open trade borders. When countries are unequally yoked from that old biblical concept of, you know, like in a marriage, the parties need to be equally yoked. And the same is true with a business deal. The parties in the transaction need to be equal. yolk. And China is not equally yoked with the US. We have these massive regulations. We have a very litigious world where employers can be sued for anything and everything. They’ve got obey by all sorts of environmental labor, OSHA, health and safety regulations, etc, etc. China doesn’t have to do that. They don’t have these minimum wage requirements that we have over here our companies have to deal with. So they just can’t come in and dump products on the consumers. They have to pay for access to our market. We have the biggest economy in the world. 72% of it or so is consumer spending. And hey, is a libertarian. I wouldn’t say this, but I think just from being a practical person. If you want access to our giant trade show called the United States of America, you got to pay for a ticket China, okay, if you want to sell your cheap stuff here, that’ll bring the jobs back to the US,

Adam 18:55
Adam and also as a real estate investor. You want to look at our state’s Similar to the countries like you were talking about states are equally yoked, which states have a looser yoke for businesses so are going to be driving them in, you want to take a look at each individual state and figure out which one of these is providing the environment that is needed, you know, and is allowing businesses to flourish, instead of, you know, cramping them back and making them follow more strict guidelines. Now, you may think as a person, you may believe that those stricter guidelines are better for the environment or better for this, that or the other. And that may be true. But the fact of the matter is, this is the society we live in. And you need to understand how businesses are going to react to the regulations that are in each place.

Jason Hartman 19:40
Right. You’re absolutely right, Adam, there’s no question. That is a very good point. So the same is true on a global scale as it is on a national scale. You see people fleeing these high regulatory high burdensome high yoking. I mean, Texas and California, for example, are not easy. coolly yote, Florida and California are not equally yoked. So people are voting with their feet. And they’re leaving the places with the heavy yoke and moving to the place with the lighter yoke, and they’re taking their money and their ideas and their ambition and their businesses with them. And that is very bad for those states with heavy heavy yolks. So, good point. Okay, let’s finish this up. And then we gotta move on to the stress testing. In the game we have coming up,

Adam 20:28
populations will fall as well the productivity of our workers. And so it’s unrealistic. They say to think that growth rates can continue to rise in the way they did in the second half of the 20th century. They suggest an alternative approach is to focus on economic satisfaction and contentment with a number like per capita income growth. This essentially measures how much money the average person makes. While the warning signs are there for another global recession. geopolitical tensions. antiglobalization makes it even more difficult to predict the future, but one thing’s for sure. Living in a new age of uncertainty. Alright, so that’s CNBC. Thanks for contributing that Adam. People have got to prepare for recession.

Jason Hartman 21:09
It is coming. There’s no question it’s coming. Let’s make sure our listeners are prepared for that. And one of the ways we’re going to do that at profits in Paradise is with our Saturday Lunch and Learn game. Okay, so we’re going to do a new game, it will involve stress testing your portfolio, use your portfolio ready for a change in the economic cycle. And are there properties you should dump? Are there things you should reallocate? Should you do a 1031 exchange? Maybe if you’re just getting started? What properties should you be buying now? How do you make those choices to make sure you have a stress tested portfolio? So let’s go to a little segment I recorded last week with Doug who is running the game and why don’t we play that now and then we’ll come back and I want to talk about Congress’s new attack or investigation into something that we already solve this problem for our event attendees, but it’s quite interesting. It’s known as the most hated fee and travel. So we’ll talk about that. And then we’ve got a property present as well. So the last several years, we’ve been conducting some really interesting participatory exercises that we do at our events. And this year at prophets in Paradise, we’re going to do this as well. So I’ve got Doug here with me. And he’s got some ideas for how we are going to do the simulation this year. And I think it’s going to be very educational, even if you’re not coming to profit in Paradise, which is crazy. By the way. You will learn something from this segment. Doug, welcome back.

Adam 22:48
Great to be back, Jason. So yeah, what we’re doing is we’re taking the wealth building simulation that we did last year, where last time we actually expanded on the portfolio game or in the production folio game, people would pick a portfolio. And they explained, you know why they wanted to pick one property versus the other. Now, we took it up a notch at last year’s profits in paradise. And we built out a range of projections for those portfolios for multiple years. So then people could see, okay, well, you know, your vacancy isn’t always going to be just 8%. Some years, it’ll be zero, some years, you’ll have multiple vacancies and multiple property turns. And so what happens is that range of outcomes means that if you have one property in your portfolio, that you’ll it’ll be really volatile. But as you start getting more properties in your portfolio, you start to get increased stability, and you have an increased ability to take advantage. And you know, it’s something that we always talk about, but it’s something that’s really hard to quantify, just because the numbers get really complex. So what we’re doing is we’re increasing the level of sophistication in our models. And in fact, we’re even going to be incorporating the idea of becoming an empowered investor, to be able to say, okay, you know, as an empowered investor I’ve decided that I am going to select a small number of markets or you know, a few markets. And then I’m going to self manage my properties there, I’m going to build relationships with some maintenance people, potentially with somebody who might be a property management but would help with keys as opposed to doing full property management, and be able to have better control over repairs and maintenance, better control over tenant selection, and then also be able to, you know, help keep the repair costs down. And most importantly, just keep the quality of the tenants up,

Jason Hartman 24:31
keep the repair costs down and the quality of the tenants higher. Right, exactly. And see this. By the way, when we talk about becoming an empowered investor, I think this is one of the really the hidden benefits. Everybody sees right away that if you decide to self manage, you’re going to save, you know, 1200 dollars a year, for example, on direct management fees, but you’re also going to save on repair costs 10 and turn costs and you’re going to I believe have fewer tenant turns, because you’re going to overall have better quality tenants that are going to stay longer. And they’re going to have a personal relationship with you. So these things are hard to quantify are they

Adam 25:17
they are but you know, because I’m actually going through this right now with some of my properties. But the tenant that gets placing your property is the single most important factor that determines your overall performance. Because if you have somebody who goes in who gets put in a property and then goes delinquent on the second or third month, you’re going to lose tons of money on that tenant. On the other hand, if you have somebody who takes reasonable care of the property stays for three 510 15 years, that tenant is literally a goldmine. And so what you can do when you’re self managing is you can be very specific with your screening criteria. You can be a lot more accurate in pinpointing the tenants that are going to be a better opportunity to really stay with you a long time because the problem that most property managers have is that they just have to fill a lot of vacancies. So they don’t have the option being as picky.

Jason Hartman 26:10
They’re not being careful. Nobody manages. Nobody keeps the shop like the shopkeeper.

Adam 26:16
Exactly. And so that’s one of the factors that we’re going to start incorporating into our wealth building simulation this year is to say, you don’t have to decide that you want to self manage, but if you do decide you want to self manage, how is that going to impact the next 10 to 20 years of your investing career?

Jason Hartman 26:34
Okay, good point. Good point. So what else are we going to do in the simulation?

Adam 26:38
Basically, what we’re going to do is everybody’s going to get together and teams, select their portfolio, select how they want to build it. So in other words, here, select do they want to self manage few other factors. And then we’re going to run the portfolio out for a few years and see how each of the team’s perform because all the properties will be identical to the performance for a property a will be the same for every team. But the teams will perform differently depending on how they arrange their financing. They sent how they whether it is they decided to self manage based on how many markets they diversified into, based on how much leverage they decided they wanted to take on. And then after, you know, after probably about five to 10 years of simulation, we’re going to give the teams the chance to execute a refi till you die cycle and extract the equity from their properties to buy more properties. Because we’ve always been saying, we want to quantify how refi till you die really works.

Jason Hartman 27:33
Doug, I want to add to that idea, because we could do refi to die, we could do the big boring idea which we talked about it meet the Masters, which is employee amortization, not a big secret. We could do 1031 exchange, but we could also do the new vehicle. Now it’s not a new vehicle, but it’s the first time I’m using it. And I’m really quite excited about this. And this is a way it might actually be be better than a 1031 exchange, which is hard to beat. So you do the simulation, which by the way doesn’t take 10 years. It’s just an example that it’s an example of your portfolio over 10 years. And then I want to interject and add to that, at profits in Paradise, the way you can use this vehicle that I’m really interested in right now.

Adam 28:22
Okay, well, we can absolutely do that. Because the whole idea behind our wealth building simulation is every year to make it better and more realistic,

Jason Hartman 28:32
right and more, it’s more in depth each time. Because you know, when we first did this at a Jay Chou event, Jason Hartman University one day conference in San Diego, it was a pretty simple game, but it was a good exercise. People really liked it. And this will be Saturday at lunch. People will do this will break everybody up into teams, they’ll work together. It’s a nice way to meet some new friends, to learn some from some other investors. And to really just have a good time and see how the portfolio will perform. Anything else you want to say about it done

Adam 29:05
one aspect that a lot of teams did last year without being asked that I’m going to be including this year’s for each team to come up with a name for themselves. I think team Maui wowwee is still my favorite. Right?

Jason Hartman 29:16
That was from last year when we were in Hawaii. We were in Maui until afterwards. Still, or no, no, we went to Hawaii. Sorry, not Maui. We weren’t in Maui at all. But that was a funny name.

Adam 29:27
full year later, Maui. Wow, we still sticks in my mind,

Jason Hartman 29:30
which is a lesson for all of these cannabis entrepreneurs. If you want to be taken seriously as medicine, you got to name your products and a little more clinical fashion than Purple Haze and Maui. Wow. I saw a magazine article about that, I think in Forbes and I thought that’s pretty funny, you know?

Adam 29:51
Yeah, totally.

Jason Hartman 29:54
Okay, so um, yeah, this is going to be a lot of fun. So before lunch, you’ll set up the game. You give out the handouts to people, and then they’ll play it at lunch, come back afterwards, we’ll do a debrief of the whole thing. And that was really fun how you did it in Hawaii last year. I really enjoyed that.

Adam 30:11
Absolutely. Because, yeah, it you know, it started out as a friendly competition and turned into a horse race. I’m pretty sure I even heard some trash talking in the back of the room,

Jason Hartman 30:20
and you were very funny presenting that horse race to buy. You know, if you ever want a plan B career, and you don’t want to do investment counseling anymore, maybe horse race announcer

Adam 30:32
it may be you never know. Who knows how do you know I don’t want to be an investment counselor so I can be a horse race. Announcer

Jason Hartman 30:38
Yeah, never know. You never know. You never know. Well, Doug will look forward to seeing you at profits in paradise. And by the way, folks, if you haven’t done so, already, get your tickets at Jason Hartman live.com. That’s Jason Hartman live.com and we look forward to seeing you in Orlando. The end of October.

Jason Hartman 31:02
So you’re absolutely going to love that game that we are going to play on Saturday, you know, you can learn a lot through games. That’s why so many educators have really gotten into gamification. And that’s what we’re doing it last year profits in paradise. When we were in Hawaii. Doug ran an excellent game for all of our attendees. And this year in Orlando, we’re going to do the same thing. So get your tickets for that at Jason Hartman live com. Jason Hartman live.com. Thanks to all of those who’ve already signed up. We look forward to seeing you, Adam, you got a feature property for us.

Adam 31:39
I do. We have one that came available last week, I believe in Baltimore, Maryland. Now this is one of the higher priced properties you’ll see on the website. In most cases, it’s a little over $200,000 $206,500 but it rents for 1950 was just below the 1%. However, because of the low Property taxes for the price and the 6% management fee, you’re able to cash flow $433 a month projected in this you’re looking at and this is what the 25% down and four and three quarter percent interest rate. Now this this team the one of the reasons I like this general area is it offers a wide range of prices. There’s homes as low as $90,000 going up to the $200,000 mark and they do a really great package deal when they do the rehab. Oh yeah,

Jason Hartman 32:31
their rehabs are fantastic. Their

Adam 32:34
new architectural shingle roof with a lifetime warranty, oversized gutters, you know, new siding, new exterior doors kitchen, refurbished with the courts, counters, and slate appliances. They renovated the two bathrooms. I mean, it’s got a full package for your $200,000 for your investment property.

Jason Hartman 32:52
Good stuff, good stuff. So that fee that I was talking about is what everybody hears about. They call it the resort fee. This scammy little fee, that is unpop of the hotel price, just saw a news article about it, that Congress is looking into these resort fees, right? They call it, you’ve encountered them, sometimes they call it destination fee. When we were in New York City. Last year for a venture Alliance meeting, I stayed several extra days there at a different hotel, not where our venture Alliance mastermind meeting was. A few of us were there and and they called it the residence fee. So I assume that after paying your $250 a night for that hotel, the extra $25 per night residents fee, whatever that means. It means So does it mean if you if you’re unwilling to pay the residents fee, you don’t get to stay in the hotel. What is the point? The destination fee, the resort fee, the residents fee? Well, you’ll be happy to know I think these fees are crap. And so in our deal with our host hotel, which is gorgeous, by the way It’s a it is a resort for profits in paradise coming up in late October. I negotiated that on your behalf. Their normal resort fee is $35 a night? Yes. $35 a night and it really is a beautiful resort. I mean, why do you see it? It’s, it’s incredible. I’ve stayed there a few times. And I negotiated that down to 10 bucks, they’ll only nickel and dime you for 10 bucks, rather than 35. Our room block is a great discount of 159 per night. I love this where hotels are saying that they need the fees to cover services like bottled water, Wi Fi and those kind of things. So can you imagine how much a bottle of water Wi Fi would cost if they weren’t making you pay? $35 a day? Well, oh, by the way, I should tell you. I just got back from New York. I was there for a conference last week. A very mediocre conference, which by the way, I paid $2,000 for the ticket. I couldn’t believe how sort of disorganized it was. How nothing was included, except there were a couple of lunches included. But when they serve you lunch, it was literally like an appetizer. It was like this tiny little piece of meat in a tiny little piece of vegetable. It was it was an appetizer, terrible $2,000 conference. This was, but one of the nights I met up with a friend of mine. And we went to the back room. And I didn’t know that back, right? Yes, that’s the crystal company. If I’m saying the name, right. You know, the company that makes all these beautiful crystal. They have a condo project and a beautiful restaurant bar area there. And so we went there. And the drinks, Adam. Let’s see. Well, you probably saw it on my Facebook. So yeah, that’s a spoiler. But the drinks, guess how much they were if you didn’t see my Facebook post for a single drink, one drink an alcoholic drink but it just did. Drink. How much was wondering

Adam 36:02
what what do you think the price range was? I would say between 20 and $30. Okay, well, I didn’t see it on your Facebook. Yeah, that would be my guess is somewhere fancy.

Jason Hartman 36:10
So the drink started at $29. Cool for one drink 29 bucks. But they had many drinks that were more expensive. up to $450 for not a bottle, one drink. But I tell you, it was it was beautiful. It was a really nice experience. They’re in stock your own bar for $450. I know, hey, listen, if you go to Costco, you could? Well, you could. You could stock your bar for the price of two of those drinks at 29 each. For 60 bucks. You could have a kind of a semi stock bar from Costco. Who says there’s no inflation Hmm. But yeah, so create wealth and live the life of luxury and you can do some things like and not worry about the cost, but still comment on how ridiculous they are so good stuff. Okay. Hey, we’ll be back tomorrow with another episode. Go to Jason hartman.com to take a look at the properties like the one Adam talked about, or to register for upcoming profits in paradise event, and we’ll look forward to seeing you there. And until tomorrow, happy investing. Thank you so much for listening. Please be sure to subscribe so that you don’t miss any episodes. Be sure to check out the show’s specific website and our general website Hartman Mediacom for appropriate disclaimers and Terms of Service. Remember that guest opinions are their own. And if you require specific legal or tax advice, or advice and any other specialized area, please consult an appropriate professional and we also very much appreciate you reviewing the show. Please go to iTunes or Stitcher Radio or whatever platform you’re using and write a review for the show. We would very much appreciate that and be sure to make it official and subscribe so you do not miss any episodes. We look forward to seeing you on the next episode.