Mauricio Umansky on “Rentvesting” a Bullish Real Estate Market and Where to Buy

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a peak and you hold out 10 years, there is not one time where your property is worth less than 10 years later. There's not one 10-year cycle that's ever been lower than the peak.

We're east of Umanzki built the agency into one of the most powerful luxury real estate firms

in the world. He has personally done billions in real estate sales and has represented some of the world's most noteworthy properties alike the world. Disney, a state, poems that were owned by Michael Jackson, Little Jordan, and the Prince. Today, he takes us behind the scenes in the real estate

“market right now. There's amazing deals out there right now to be had. And so I think”

we're in the transition and we're moving from the bear market into a bullmark. He gives us his take on rent vesting the strategy where you rent where you live, but buy or rent. I think right now it's a great opportunity to be a tenant in California, insurance is super high and so being a tenant right now is not a terrible place to be and then building equity through somebody else's rent. Potential cash flow. And it builds equity. Where he buy right now?

Lot of money and people flocking to Miami. Florida, great tax haven. Texas, great tax haven. And whether we'll be calling him Mayor Umanzki anytime soon. I've thought about it a lot. I'm Nicole Lathen. The only financial expert you don't need a dictionary to understand. It's time for somebody real. Thank you, Nicole. It's good to be here. I'm excited to talk money.

I'm always excited to talk money. I'm glad to have somebody who shares in that.

I have to start with where is the real estate market right now? I know everybody asks is it a buyer's market? Is it a seller's market? We are in a great time right now. We're in a transitional time. We've been in a three year or three and a half year low. It's been a very difficult market. And when I talk about

One is price is maintaining price or depreciating or appreciating. But right now I'm going to tell you about transactions because I own the agency, which is a real estate brokerage firm with 170 offices around the world. And so I care more about transactions than I care about price. And we are in a three and a half year low of transactions. It's been a very, very difficult three and a half years. Because I've heard you talk about this a lot. But you give us a comp.

So when you say it's a low, where have we been, where are we now? And why should individual

“buyers and sellers care about that number, even if they're not part of the agency?”

Great question because it affects the market. That's the fast answer. But just to give you an idea, a typical 20, I look at, when I analyze the real estate market, I analyze 2019. And I kind of just get rid of the whole 2020 COVID world because it was an anomaly on every part. For the first three or four months, there was nothing. And then it was a holy cow. It was everything. Right? So I take those that year and a half or whatever and I just throw it out because it's outlier.

It's an outlier. It will never happen again. Free money was giving me the, you know,

I've got a word. Better not happen again. Yeah. So I look at 2019 and then I look at post 2022, right? And then I look at the history. But a typical year in transactions is somewhere in the neighborhood of 5.65.7 billion transactions in the country. Since the 1994, savings and loan crisis, we were, you know, even in 2007, 2008 during the banking crisis, we had more transactions. But a typical somewhere around 5.65.7 billion transactions. During COVID, we went up to 7 billion

transactions. Right now we're at 3.5 million transactions. 40% drop from the average of 5.8 million.

“So when you think about that, you know, what's occurring high interest rates?”

Okay. Owners that are sitting on low interest rates, they don't want to sell or, you know, what are they going to trade up or trade down? You're going to trade down and you're going to have a higher mortgage payment than if you stay. And if you trade up, it's on affordable. So nothing happened. It was just kind of a dead market for three years. But what happens with that? Eventually, people started hurting and eventually started seeing prices drop. We have now seen prices

drop. It took a long time. In 2008, when we had the crisis, prices dropped quickly. We had a 35 40% price drop fast. So what had happened? People started to buy quickly. So there was transactions. There was a very low amount of time where there was no transactions. Right? Today, it's taken us three years for prices to start dropping. Prices are now dropping. People are not getting back into the business. All of those three years, you've got to pent up the man of buyers that have

been sitting around, whether they want to upgrade, whether they want to downgrade, whether they're an empty nuster, whether they went through a divorce, whether they've had three kids. Right? They want to make a move and they want to make a change. And eventually, they have to.

“Yeah, sometimes you have to. Regardless of the macro condition. You can wait for a while.”

Eventually, you've got to make a move. Right? And nowadays, people have, I think, accepted the new interest rate. Which, by the way, is still low. Yeah, historically, you zoom out to the 80s. Right? We're still low. We're still borrowing relatively inexpensive money. Right? So now it's just becoming more of a norm. And so now you're seeing buyers starting to get into the buying mode.

And there's amazing deals out there right now to be had. And so I think we're in the transition

and we're moving from a bear market into a bull market. So you think it's a buyer's market? I don't know. Sometimes I get annoyed with this question. Yeah. Because I think the better question is, and I'm surprised you're not annoyed by it. Is it a buyer's market for me? Right? Because it's all case specific. Correct. And also when it's a buyer's market, there's going to be more competition prices are going to be high. You can't just use interest rates

as a proxy. No, you can't. And again, we're talking about right now. We're talking about you buying your house. So we're not talking about buying an investment property. Right? Which is a different conversation, which is also an important part of real estate. But right now we're talking about buying your house. And how do you make a decision as to whether you're buying, you know, at the right time, the wrong time buyer's market and seller's market. Like,

sometimes you just gotta make your move. And so it's just never perfect. It's never perfect

conditions. But I could tell you one thing that will give everybody comfort here. In a 10-year

But even if you buy in a peak and you hold out 10 years, there is not one time where your

property is worth less than 10 years later. It has not, you can grab, go back to like the, I think these graphs started like in the late 1800s. And you can see the graphs and all the peaks and all the troughs and everything. There's not one 10-year cycle that's ever been lower than the peak. So if you're holding for a long period of time, we're not talking about flippers here. Again, we're talking about your home, right? So there's no time to buy your home. Like buy your home.

Make your family. Make your, you want to start getting into investments. You got to look at peaks. You got to look at troughs. You got to look at when to buy, when to write time to buy,

“flipping, when to the right time. How long is it going to sustain all of that kind of stuff, right?”

So we get into multi-family. We're, we're coming out of the trough. So we're like, yeah, coming on up. Yeah. What about this idea of rent investing? So renting where you live, your primary house, and then owning where you rent as an investment property. I've started to see a lot more of that, which is quite interesting. And I actually don't have a problem with that. I think right now it's a great opportunity to be a tenant.

There's lots, you know, unfortunately with the fires, with all of the natural disasters in California, which we're in right now, taxes, insurance is super high. All of these different things make being an owner run into the difficult. And so being a tenant right now is not a terrible place to be. And then building equity through somebody else's rent is gives you cash flow and it builds equity. Well, you know, sometimes prioritizing the equity argument gets me because if you're

investing in actual equity. So if you look at those big charts compared to the S&B 500, you're getting more over time if you put the money in the market versus the real estate market,

four to five percent compared to, you know, to 10 percent. So is that I'll challenge that for one

second because I think that in you're really looking at an IRR in the in the real estate market, right? Because so much of the borrowing power, right? So even though you're seeing perhaps an increase of a smaller amount, you know, four, five percent versus eight to 10 percent or whatever, is it we're talking about your dollar for dollar, your purchasing power is so much greater. So when you see a 4 percent rise, and you've only borrowed, you borrow 80 percent, right,

alone to value, but you get that 4 percent than your cash on cash return is greater. Borrowing against it is greater. Right. I hate the when people come at me with the argument that you get a tax rate off. Like you can't make the biggest purchasing decision of your entire

“life because of a tax rate off. I agree. I'm with you on that one by the way. I think you should be”

making the look, nobody likes to pay high taxes, but the way I see it is if I'm paying taxes, I'm making money. That's the end of the day, right? Yeah, I mean, it's a high class problem to pay more tax. It's a high class problem. So where are you buying right now? Where would you buy right now? You know, I think there's great opportunities in a lot of different markets. I really think there's opportunities everywhere. I think there's opportunities here in Los Angeles. I love the lifestyle

play, right? You know, that I've always loved the lifestyle play. Just buying somewhere where you

love to play, right? Aspen, for example, somewhere I love to play. So, you know, I bought an aspen. You know, a lot of money and people flocking to Miami, you know, Florida, great tax haven, Texas, great tax haven. But, you know, the idea of buying in the Caribbean, the Bahamas, Turks and Cacos, the idea of buying in Mexico, the idea of buying overseas in Spain or Portugal, you know, there's amazing properties out there in Italy, like gorgeous properties. So again, to me,

it's about there's there's an investment and you can make a lifestyle investment where you're still holding onto your money, but you're also enjoying your life, like creating that balance, right? Like, I call it the enjoyment value, right? Because sometimes you don't need to maximize

“every single set. Sometimes you need to enjoy your life. Well, you don't have to maximize everything,”

and that's really cool that you can have play vestments. Sure, I like that word play vestments. If you were to flee the country, word actually existed, we just coined that right now. I like it. Okay. Play vestments. Play vestments. I like it. I mean, because you're, you know, it's like you get paid in sun and California, right? Like there's certain things that are intangible and not

So if you wanted to frithly the country for your primary home, where would you look? That is a great question. I think, you know, a few places that I've been looking at, and I think you're just fantastic. I think Mexico right now is amazing. Mexico City is a great city. It's a great place to be. There's lots going on there. I think Spain, Madrid is super rocking and inhabiting. I think, you know, Lisbon has a great, Portugal has a great particularly for

some retirees and people that are looking at retiring and going overseas. I mean, you can still get a cup of coffee in Lisbon for, you know, $1.50 or something. And it's delicious. And it's amazing. So it's a great place to be the temperature is fantastic. The coastline is amazing. Everybody speaks

“English. So, you know, I think those are great places. So what's your overall investment thesis right now?”

And you're very thoughtful, dude. On real estate. Yeah, I think there's great opportunities in a lot of different areas. Hospitality is really interesting right now. I think there's an amazing opportunity when you're these branded residences. And there's a lot of changes happening with these type of things. There's the longevity play. There's the wellness. All of these things where you can start bringing these new buildings into the new types of amenities because of your competition is

very limited. I think that... Well, I, you know, I still like the housing. I think the Airbnb plays still fun. I think it's still play. I still, I'm currently flipping a couple homes. So I'm still playing in the spec world. I think, you know, in LA, I just think, you know, the way I look at

“investing is opportunistic. It's, it's deal by deal. Like, I think there's deals in, and you”

said it in a buyer's market, in a seller's market, there's deals all the time. It's just a question

of finding the right deal. And a lot of times people are just scared to make an offer. And you never

know who's going to be out there. So, you know, if you're not scared of being rejected 50 times, in order to get the 51st deal, 51st state, the 51st deal, it works. Is there those the odds? Again, it depends on the market. I was taking it. If it's a seller's market, it's going to go to 50, it's probably going to go 50 to one. If it's a buyer's market, it's going to go 10 to 1 or 5 to 1. And again, it depends on what, how, you know, aggressive your, your offers are. Because keep

in mind the beautiful thing of looking to stock market. It's telling you, you're going to buy in video at X. You're going to buy Apple at Y. You're going to buy, like, boom, you want to hit it, or you don't want to hit it. In the real estate world, the, you know, the, the offer is a million bucks, but, you know, the, the, the ask is a million bucks, but you can make an offer of 500k if you

want, right? I mean, yeah, a house is only a worth as much as someone's worth. So, you never know.

I mean, you could also put some, some buy limit orders, low for in video, if it is. Sure. Are you invested in, in video in Apple, you mentioned? I haven't, I have a position in both of those,

“yes. So, when you think about your overall portfolio, how much of it is real estate?”

The majority of my portfolio is still real estate. And then, you know, and obviously a lot, large of my portfolio is in the equity of the agency and the value of the agency as well. But I would say that a good 80% in my world is still real estate and 20% is in equities. Equities bonds, bonds, stocks, all kinds of different things. I am not in private equity. I do all of that risk and all of that stuff in real estate, because that's

what I know, it's what I live every single day. So, I do all of that kind of stuff more in the real estate world. Maybe when they will start playing, I like tech. I'm still not to put orders, so I'm actually working on a few different startups that I'm running with. Real estate related? Mostly real estate related, but tech tech can real estate. So much disruption, like an aspect. So much

disruption. So, again, real estate is what I know best. So, you know, it always has to do something

with real estate. What do you think that disruption is going to be in a big way? Like, are we going to see in the next 10 years a world where real estate agents don't exist? I don't think AI is going to take away the real estate agent. I think we still need a real estate agent for many, many reasons, particularly in the luxury segment. I think if you're selling, you know, pod, a planned urban development that, you know, there's four different styles of homes,

you know, an agentic AI or something like that that takes over, you know, that transaction,

or just makes it way easier, but you still need one or two people, you know, to kind of, like, I guess drive you around. I guess, eventually, we can have robots driving us around, but like, do you really want that? I don't know. I mean, I guess the tech--

“I think my Tesla drive rides me around. Your Tesla drives you around for sure, but then, you know,”

yeah, I guess he can, you know, then you win, they can also tell you stories. So I could see it happening with that, but in the luxury world, it's, it's a whole different. We're watching one of the greatest wealth transfers about to happen right now. It's 124 trillion, which is such a big number. I, like, I can't even rent my head around that by 2048. What should you know about preparing for that wealth

transfer? If you're listening and hoping to get into the real estate market, because not only

is cash, get to get transferred, but a lot of boomers are going to transfer their homes in the real estate holdings. There's major change, major, you know, AI, SpaceX, all, you know, tech. I mean, there's just major, major. And then there's going to be a tremendous amount of wealth transfer, you know, generational, the generational. And we are starting to see different ways, you know, the people are enjoying their life. I think that, you know, one of the things that we're seeing family compounds.

So what does that look like? Just multi-generational? So this is kind of the sandwich generation that we're not really seeing. Multi-generational, yeah, you know, where you're, you know, I might create a compound where my four kids have a home, you know, and they have their own family and my compound, but we're all together, right? They all have their own homes, right? And they all have their

“own life and their own everything, but yet we're still on the same land. On the same land, right?”

Or together? I don't think you would do. I would 100% do that. I would love to do that. I think it would be super cool. I have your parents. Yeah. So sort of the sandwich idea where we're taking care of our aging parents, but we're also taking care of our kids and everybody's helping out. Yeah, and by the way, in terms of taking care of them, eventually they start taking care of you, right? I mean, they have their own home, and yeah, you know, then, you know, hopefully they're going to have

grandkids and all kinds of other fun stuff. But we're also seeing a tremendous amount of investment occurring. One of the things that people used to love when they had money is to buy large homes. Today, we're seeing not so much the volume and the size of this core footage, but more about more homes, more places to go to. I think that, you know, COVID, one of the things that it did is it changed the behavior about the way we work, right? So before you went into your office every day, you lived in

LA, you went into your office every day, you lived in New York, you went into your office every day, and then you had your vacation home. But today, because we don't have to go into the office every day, which sometimes I like, and sometimes I dislike. But today, because of that, what's happening is that we can have multiple homes where we work out of. I can actually live in four different areas, three months a year, right, or six different areas two months a year. And like, it not just be my

vacation home, but I actually live there, right? I could live and work there. I can live in Miami and the winter. I can live in Los Angeles and the summer. I can live in Aspen and the fall, and I can live in, you know, the Caribbean and the spring. I mean, I could do whatever I want, right? So when you're starting to see what the wealth is, you're starting to see them by more homes versus the big one, you know, one big huge home that they put up all their money in order to live in their homes.

Well, as part of that, it's the trend. It's become so sexy on social media with short-term rentals. Yes. And you mentioned it briefly, but I want to double click on it. The Olympics, obviously, coming to LA, yay, 28, right now LA, you can't list your secondary home or investment property

“as a short-term rental. It has to be your primary home. So now there's, I believe, a proposal to”

allow short-term rentals through 28 of an investment property. Do you think that's a good idea for this city? I think it's a great idea for the city. And I think the city is going to need it. And I think, you know, A in order for us to host what we need to host in the Olympics. I mean, we're seeing it right now with the world cup and it's, you know, not, you know, and it's spread out over how many cities. I don't know, 20 cities. Maybe plus or minus. But imagine all of it being here, right? We're going to

need to host the people. And it's going to be an opportunity to bring in a lot of money to a lot of different people. So I think it's going to be great for Los Angeles. We needed to do something great here. We're due. Are you going to make it happen? I mean, I'm going to try. I'm going to move hard to make things happen. But yeah, but I'm not running for mayor yet. I was about to out.

Yet, you don't say ever. I never said never. Will you? Maybe one day. I've thought about it a lot.

But I did for Republican Party. I remember registered independent. And I believe in, in, in, in the

Where everything is just so extremist right now. And I think that we need to start making

a push more for finding balance and finding that middle again. Okay. Well, I'm an LA voter. Why should I vote for you? Because I'm going to make LA great again. I'm just going to make LA great again. Well, look, we need to do a lot of things. We need to do a lot of great things for LA. So, look, on the financial side, I'm definitely more in the Republican side. I do believe in still. I still believe, I mean, Reagan was an LA guy and an LA

native. And I do believe in Reaganomics. Reaganomics are no longer. I think if you took Reaganomics today, there's certainly not a Republican side. And there's certainly not, like,

“like, that's more of a middle thing. Okay, in today's world. And that's what I mean by, by the middle.”

And what I mean by that, it's not about only the trickle down, but it's about, we need to bring

businesses back. We need to bring employment back. We need to bring innovation back. We need to keep Hollywood. We've lost so much of Hollywood. Like, we need to give Hollywood incentives. Okay. Like, I am not in Hollywood business. This has not been if it's benefiting me. But I can tell you one thing that what put Los Angeles on the map was television movies was Hollywood. Okay. The reason we have people come from all over the world to visit LA is because of the movies. Okay. And if we

stop filming movies and television here, it's not only about the employment that's coming. It's about the tourism. It's about all of those things that continue to come here. We've lost. I can tell you just on the real estate world. The international buyer that we used to have, it's they're gone. Like, we're, we barely have that international buyer coming in anymore. And I'm seeing that early. Okay. But if we don't start fixing that now, that's going to affect us.

One of the greatest things about the real estate market was that we had everybody buying here. We had Chinese, we had Russians, we had Europeans, we had Saudis. You know, one of the most beautiful

“things about LA is that it was an incredible melting pot of everybody. We're losing that. Why?”

Many reasons. Bad PR. That's something LA needs to work on. We need to work on PR. What I mean by that is, you know, right now somebody, you're even seeing it in the world cup. People are coming out here. You're seeing it all over social media. Like, oh my god, I've been reading the press on, you know, LA, the US. And it's far from that. You know, all we read is crime and theft and burglaries and your people are scared to come to Los Angeles right now. Because of the

press that's out there, the PR that's out there. But if we can change the PR that's out there, and not only change the PR, but actually change it. Right. So we are safe here. You know, we cannot have criminals. You know, get out of jail in three days. Like, we just can't do that. Because what happens is that you just more crime happens, right? Because they're not scared of being a jail. They're not scared of being put away. They're like, oh, it doesn't matter. I didn't

have a weapon. I can go brokerize a house and where's thing that's going to happen to me is, you know, I'll spend 15 days in jail. That can't happen. Did you vote for a sponsor? I did. And seeing him lose, did that change your thoughts on running? Well, it changed my thoughts on running and, you know, it didn't change my thoughts on running. I haven't decided whether I want to run or not. It's a major commitment and it's also very difficult to run against the

Democratic Party in Los Angeles. And which is also kind of sad because, you know, A, it makes you wonder if, you know, if, if it's the problem, the problem that I see with the Democratic Party is that they're making promises that are unsustainable in order to win votes. And they're not good for the city, just to win votes. And, you know, when the ULA measure, let's go back to real estate, for example, the mansion tax. Okay? I don't know if you remember on the ballot,

but the ballot was pretty simple in terms of what you were voting for. Yes, you explained

it briefly, so $5 million. Yeah, so basically the ULA tax, the mansion tax, is that

“you get taxed a percentage on any home that sells above five, I think it's $5.3 million right”

now, or $5.4 million. It's gone up little by little. And so it's 5% on the total sales. So on a $5 million house, it's $250,000. But if you bought the house for $5.5 million, and you're selling

capital gains tax. This is a transaction tax. And it makes it, there's no exception if you're taking

a loss. No, you're taking a loss, you're paying your taxes, you're making an investment into,

“and that's why we don't have a lot of developers are stepping away, and they're going”

elsewhere to develop. I have one of the best development sites for sale right now, ever, ever. And I am struggling, getting it sold, and it's at a steal. It's at a deal, okay? And I am struggling getting it sold, because the developers don't want to work in LA. That's sad. It's a great deal. And people don't want to work in LA. And when you think about that, that's a political move.

Why do they not want to work in LA because of the politics of what's happening in LA? So we're

losing that investment. So all of these developers that are national developers, they're buying in New York, they're buying in Miami, they're buying in Texas, they're buying in St. Louis, Missouri, they're buying everywhere, Denver, Seattle, but they're not buying in LA, and they're scared of it. That's a problem. I've heard Spencer talk about the idea that reality TV has both helped him and hurt him, and I've heard you say the same thing. Yeah, it's both. It's one more than the other.

No, I would say, for me, it's probably 50/50 in terms of help and hurt. And there's a lot of sacrifices that come with reality television that you put out there. And it helps with a lot of different things as well. I mean, but if I looked back and I had to do it all over again, it's very difficult. There's days where I would say I would not have done it. There's days that I would say I would have done it again. There's days where you're not doing it. Just depends on the way I wake up in the way I feel

better. It's literally a 50/50 thing. It's not leaning towards one of the other. So it's literally just the way I wake up. And I'm like, why did I ever put myself and subject myself to, you know, because a reality TV, one of the things that happens with reality TV, which is different in television, is that reality television people actually think they know who you are. And they build opinions about you. If you're on television, you're I'm acting a Spider-Man, a Spider-Man. Like they're not,

you know, nobody thinks they know me, right? Like they might recognize me, but they don't think they know me. In reality television, people actually think they know you. And that can, that it causes a lot of problems because a, imagine somebody gets to know you based on an edit that's occurring that you're filming. Oh my god, I don't know. 30 hours of television,

“you know, and then you get edited down to eight minutes. And then that's what they put,”

you know, everybody bases their opinion on and that's how they know you. Kind of a weird way to know somebody. So it hasn't helped your business. More people have it. It has definitely helped the business. But that doesn't mean I would choose the money over privacy. So is it money or fame for you? That's right. Well, money and fame come in, in that particular one in the same side. Right? So is it money, fame or privacy? What is it for you? 50/50.

Why do you think there's such an access between influencers who are now becoming real estate agents or real estate reality stars? And how much of that is real? Like the deals that we're seeing on real estate specific reality TV. Those big numbers slashed on the screen. They are somewhat real. They are somewhat not real.

They like to flash out the big numbers. You know, they never flash the struggles and how we got there

and all of that stuff. And you know, as real estate's become more and more difficult, you know, there's been some commission compressions. We don't talk about that. They don't talk about, you know, the split with the company, all kinds of different things. So it's, it's, it's a little, it's a little bit, uh, fantasies. A little fagazzy. Fagazia. Why has real estate specifically become such

“a draw for people who had been on a reality TV or influencers? I think that because they,”

well, first of all, one of the beautiful, when you talk about real estate brokerage, right? And I think that one of the neat, one of the things about real estate brokerage is that with the small investment, you can make a lot of money. And in order to be a great broker,

if you have people that want to be with you, then your lead generation becomes a lot easier. And so therefore it becomes a much easier job to become a real estate agent than, than somebody's starting without an, you know, influence without being on television. And with some of the best

real estate agents in the world have never been on television. That's be clear. We've got, um,

I mean, how many of us have been on television and have reality stars, you know, a handful of us, right? I mean, there's a million, 300,000 real estate agents, right? And if you look at the top agents in the country, um, first of all, uh, you know, if you look at the top 20 agents in the country, you know, maybe four of reality stars or five, you know, the other ones did it on their own,

“right? That's number one. Secondly, I'm not 100% sure about what I'm about to say, but I think that”

most real estate agents, um, that are reality televisions made their, um, career because of reality television and did not have the career prior to reality television. I think I'm the only one that was, uh, the top, I think I was number three agent in the country before I ever got on television. And then I got on television. So you don't need the television to make you an amazing real estate agent. Oh, so you're a great test case for how much more Legion you got. So it was your Legion pre-reality

and then post-reality. So post-reality, I changed my business. I actually created the agency. And so I used television and reality for the agency for myself and became more scale. So it's very difficult for me to give you that exact answer because I stopped chasing them being number one. Before I did the agency and before I did reality, I became the number three agent in the country. I was two spots away from number one. And then I did reality and I decided to start the agency

and I stopped chasing number one. There's a guy out of Texas. His name is Ben Cavalero. He's been number one forever. And it's number one is based on strictly volumes, strictly volumes, yeah. It's transactional volume. When I was number three in order for me to do that in that today, everybody's got teams. So now you're separating large teams, small teams, medium teams, similar to that. Back when I did it, it was just, it was individuals. There was no individuals.

But in order for me to do that, I did $640 million of volume by myself. And which, so you were number one in California? I was number one in California number three in

“the country that year. Ben Cavalero was number one. Do you know him?”

So I never met him. But I'll tell you a funny story about that. He'd love to put it on his podcast.

And Sarah Broadman, Serena Broadman from New York was number two. She beat me by like $5 million. I'm so upset. It was a very, it was like a half of transaction or one transaction or whatever it was. But I called up, and I was chasing Ben forever. He's in the Guinness Book of World Records and all that stuff. He put himself in there. But I picked up the phone and I called up Ben and I said, hey Ben, it's more easier. I go, you may not know me, but I just want you to know I've been chasing you for 10

years. And I'm only two, I'm number three. And I also just want you to know I'm done chasing. I was turning my own company. I got so good. Congratulations. But I just wanted to talk to the guy that I've been chasing before I stopped chasing you. And I just wanted to say hello. And he loves that story. And what do you say? Oh, he was just great. He was bent. We had a great conversation. It was funny. That's awesome. I mean, you've grown your business so much since

becoming on reality TV. And it makes it so smart to scale yourself because you would have so much more publicity. Being in the public eye, how has that? Obviously, it's been good for business.

“But what about relationships? I think it's more complicated to have not enough money.”

So have you not had enough money and had too much money and which went to your prefer? Well, I definitely have not had enough money. I mean, I started with nothing. And that was very difficult. And I don't think I have enough money yet. What's enough money? I think enough money is when you can live the lifestyle that you want to live. That is what you like to live without having to work anymore. And so therefore it's

different for everybody because some people spend $10,000 a month, some people spend $5,000 a month, some people spend $200,000 a month, some people spend $2,000 a month, right? So some people spend $20,000 a month. So it's very different for everybody with enough money is. How much do you spend a month? You laughed the most at 200. So I would clock it around there. You're not far off.

Like, what's your FU number? We're never going to hear from you again.

And at that point, do you just piece out?

“I don't think I'll ever piece out. I, you know, money is not my driver.”

What's your driver? Competition with myself and the game, the chess game. I love the game. I love making moves. I love, you know, being disruptive. You know, right now, I'm starting something that is a, I just started something that is super disruptive, but will not make me any money. It's the American Real Estate Association. It's a non-for-profit. I'm not taking any salary.

I'll never take a salary. It's, it's not about me making, but it's man is it disruptive.

It's disrupting the national association or filters like crazy. They're going bananas with me. They have, you know, 1.3 million people. We're up to now approximately 100,000 people. And we're growing, and we're growing fast. But it's innovative. It's disruptive. It's fixing a problem that needs to be fixed. And, and it's one of my favorite things to do, even though it literally, when I tell you, I have, I don't make a cent on this thing. I don't

make a cent on this thing. But it's one of my favorite passion projects I'm doing. So money is your driver just to keep this scoreboard. Yeah. For yourself. So what are you at now for sales? 5 billion in real estate sales? So that number has been the number, I haven't measured it. That number has been the number that's been. I don't believe that. So I have not, I got to measure it. That number has been the number that we came up with about 3 years ago. And it was accurate 3 years ago.

And I probably have done 300 million every year personally. So let's just pretend I'm around 6 billion. Okay. What's another billion amongst friends? So the agency has offices.

“But by the way, those numbers, that's what the problem, I want to talk about that. That is exactly”

what the problem is with these reality shows. And that is exactly what the problem is with these,

with the way that we measure volume and real estate. Because we, 6 billion dollars sounds like a hell of a lot of money, doesn't it? Right. But I surely didn't make 6 billion dollars. And that was not my revenue. No, that's so important to say that. Because when people see headline numbers like that, or when a founder exits a company, they're like, oh, you have 100 million dollars in your bank account. Yes. Have investors. Do you guys have investors? But it's not only that.

Here's the thing about real estate sales and all of these reality shows. And then all of these real estate agents that glorify themselves based on how much they sold a billion dollars this year. Who cares? How much did you make? What was your gross commissions? Okay. A lot of these people,

they do a typical numbers. I just use 100 million dollars. That's not a typical. That's a great

real estate agent. 100 million a year. This is a gross gross gross gross gross gross gross. But now they take that 100 million. They multiply that by 2%. Okay. What is that? 2 million? Right? I think they're probably not taking all of that up. There you go. Then they split it. There you go. What is realists? So they throw out this number of 100 million or a billion. Okay. And like what are these people bringing home? They're probably bringing home a million and a half.

A million? Okay. Which doesn't suck. Don't get me wrong. But you're bringing home a million and a half. Then you got to pay Uncle Sam and your taxes and you limit California. That's 750,000. And then your business expenses is probably another 250,000. You're down to $500,000.

“And that's what you're living off. 500 grand. Don't get me wrong. That's pretty nice lifestyle.”

But it's not going to let you spend 200,000 a month. So do you be there? You don't have 6 billion dollars. I do not have 6 billion dollars. I will not be chasing 200 million if I had 6 billion dollars. But I'm really glad that you talked about that headline number being so misleading. It's misleading. And the way we measure and real estate drives me bananas. We should not be talking about that. We should be talking about gross revenue just like every other business does.

We should be talking about our volume. The way we measure should be based on what our gross commissions are. What our gross revenue is. Or net. Either one. I mean, because again, but a company does not measure net net profits or net revenue. They measure gross revenues. They measure EBDA. They measure at the other day. They measure EBDA, right? But in terms of like your revenue, like Walmart, whatever or Amazon, they have a revenue.

Whatever the revenue is, right? It's not the net revenue. It's the revenue. They're net revenues at different number. But in GMV, like gross revenue should be measuring real estate companies. I mean, you look at these companies and they say, I did 30 billion dollars last year. They did it to 30 billion dollars. They did 30. They probably did 600 million. Still a huge number. But let's measure it off the 600 million. But the 600 million is not what they're taking home either.

whatever. Let's just take the agency. Okay, for argument say. Okay. So lead by example. So let's change the website. Oh, I, well, I would, let's change the website. I'm in. I'll lead by example. The problem with that is, and I've talked about this all the time. And by the way, I go to all these conferences and I talk about this and I talk about it in the real estate conferences. Like I am vocal about this. The problem with that is that if you're in a competitive world,

okay, think about this. I'm competing for a listing. I'm competing for somebody. And somebody says,

“I did 2 billion. And I say, I did 200 million. Right? Like my, I did 250 million. Right?”

That's more than their 2 billion. Okay, in reality. But they don't see it that way. Right? So the

consumer is going to be like, Mom, I'm going to go with the person that does 2 billion. Why would I go with the person that's 250 million? Right? So unless I can change everything and talk real numbers. Change it all. So what's the goal with the agency? You have the agency in 14 countries. 16 now. 16 countries. Yes. You have we just opened Italy? 6 billion in sales. Top, top, top, top,

number. Would you take a public? Okay. So when you were talking about 6 billion in sales, that's my

“personal sales in my, in my history. That's more than you were asking. So the agency we're doing,”

and again, I'm the worst at this because I actually would tell you the gross revenue. But the agency is doing something around 15 billion a year in terms of sales. So what's the, the end goal? And goal there. So right now, again, we're in a three. I just, we began to show by me telling you we're in a three and a half year low of transaction volumes. I can tell you that right now, we have set up the agency to be a for growth. And we have no

EBITDA. Okay. That is not the goal right now. As soon as this market changes, and we start having

“profits. Okay. And we could, because right now, if you look at every real estate agency, every real estate”

broker, it's the, on, on, on the markets, it's the stock markets. Nobody's making money. Okay. As soon as we start seeing money being made and capitalizing, I feel like we've grown it to a great place. And we're budgeting for that. Like I've planned for this. Okay. Then I'd like to take the company public. When we go back up. When we go back up. Oh, the way up. So somewhere within the next year, maybe.

We're here first. We end our episodes. We're easier by asking all of our guests for a final tip that listeners can take straight to the bank. We talked about short-term rentals. We talked about rent investing. We talked about by our seller's market. What's one final tip that our audience can take away from the real estate market today? Real estate is a great wealth preservation. It's a great way of investing and saving money. Even if you look at all of these people that are making

fortunes in AI, tech, et cetera, et cetera. Once they make the fortune, they put it into real estate. It's just a great place to invest. And there is no right or wrong as to where to invest.

It's whatever makes you happy. Up to them, always up to them. I'm happy.