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This is not an offer to sell securities or investment financial, legal, or tax advice. Past performance is not a guarantee of future performance. I'm Nicole Lappin, the only financial expert you don't need a dictionary to understand. It's time for some money rehab. Right around this time last year, I spoke to John Grumman, real estate agent/star of Buying Beverly Hills on Netflix. We talked about the of the housing market and opportunities for both buyers and sellers. Fast forward to the present, and it's time to check in and see how these opportunities have changed. John is back to give us his outlook for 2024. John is my favorite of all the TV real estate agents because he's an expert on screen and off. But you should also totally watch him on season 2 of Buying Beverly Hills, which comes out on March 22nd on Netflix. Today, we talk about how the interest rate drop could affect home prices, tips for finding your dream home, and for the cherry on top, the truth about squatters rates. John Grouman.

Hi.

Welcome to Money Rehab again. Yeah.

Thanks for having me back.

You were here almost a year ago. Crazy town USA. What is time? When you were here last, inventory was in the pooper. Interest rates were climbing. Mortgages were high, but also prices were high. So let's cut to present day. Fill us in. What has happened since the last time you were It might as well still just be a year ago.

I don't know that much has really changed, frankly. We're still in a high interest rate environment. We're still in a low supply environment. As a result, we have a stagnant market. It's the simple reality. We've been in this for the better part of the last 12 to 18 months. Obviously, the cost of debt is much higher, thus people's purchasing power got dramatically impacted. Usually when that happens, historically, there's meant to be a teeter totter effect as interest rates go up and people's purchasing power goes down, thus us to so should home prices to reflect that. But that didn't happen this time. Because he saw it's broken. Yeah, it really did. It broke. Because most sellers, most homeowners, rather, still feel handcuffed to these historically low interest rates that they're probably never going to see again. They don't want to give those up. As a result, there's less supply on the market, less for the buyers to choose from. I think that has inadvertently helped to stabilize home prices. Because if you think of real estate as a commodity like anything else, what happens when there's less of any commodity? Its value goes up. In this case, it just- Buy and demand.

It just stabilized.

I thought it was so interesting that you compared 2023 to 2008, and you said more homes were sold in 2008 than in 2023, which was- Wild. So striking to me. I didn't even think of it that way. What would you expect for 2024, I guess, compared to 2008?

First, just touching on that point because that stat is incredible. But you think about it, in 2008, at least there were a number of forced sales. There was foreclosures. There was things happening that at least continued to keep the market active. In 2023, it was just a stalemate. Sellers didn't want to sell, buyers didn't want to buy. It was just a stalemate. Those that did, frankly, had oftentimes wildly unrealistic expectations. Buyers thought it was 2008, sellers thought it was still 2021. It was just hard to get them to connect on what reality- Meaning sellers wanted super high prices, buyers wanted rock bottom. Super great deals. Yeah, exactly. For 2024, if I can just whip out my crystal ball here and see what it says, I think the market is going to get It started off so promising. We came out of this holiday hibernation with this renewed sense of confidence and optimism because rates had started steadily coming down over Q4. Then the Fed came out with this surprising announcement right before the holidays saying that they're anticipating multiple rate cuts this year. I think that's all the market was looking for. Everyone's just been waiting for a sign.

It's like looking at that third base coach just like, When are you waving me home? Jay Powell, give us something. Give me something. I think we came out of the holidays Again, people seem to have a different outlook. The sentiment was changing, the conversation was changing. As you know, as the conversation goes, so does the market. We were feeling really optimistic six to eight weeks ago, and then it just pulled back. I think that's what the recovery is going to look like. It's going to be a little bit up and a little bit down, a little bit up and a little bit down. But overall, the trajectory is going to go upward. We need at least one rate cut. One rate cut will signal that the worst is behind us and we're on the ascent. But until we see that, there's still a lot of uncertainty in the So two steps forward, one step back, but the overall scatterplot chart is moving up.

Meaning what?

I think that we will have a pretty active spring selling season. I think that'll start to taper off a little bit in the summer. And once we're on the back half of summer and within two months' proximity to the election, watch out because I think the market's going to turn toxic.

Why? So election years always muck up everything with financial markets. Housing market is not immune from that, either. No, not at all. So why so dicey, especially Especially this year.

One word, uncertainty. All markets hate uncertainty. Capital markets, housing markets. I don't want to derail this conversation by taking it too political, but Lord knows that this upcoming election is going to turn this country into a three-ring circus and that it's going to breed so much uncertainty into the markets. The natural human response is to say, I'm just going to pump the brakes. Things feel really shaky and unstable right now. I'm just going to wait for the dust to settle, see who's in office, and then I'll make a decision. You're going to start to see more and more of that as we get closer to November.

Yeah, you never regret a pause or a workout.

Was that on the bottom of the snapple cap? I've never actually heard that one. Okay, all right.

It's true. When in doubt, sweat it out or wait it out, I think.

Okay.

That's probably what's going to happen when it comes to the election because regardless, some people might want to move to another country or whatever. That's not the time to make the biggest purchase of your life.

Probably not. But on the back side of that, once we get past the election, once the dust does settle. Assuming we get a little love with interest rates, I think that the market is going to pick up pretty quickly, and I think that's going to be the start of the next boom. I think there are so many people sitting on the sidelines. If you think about it, the demand for housing has not diminished. It hasn't wained. It's just getting pent up. The longer we're in this correction, the more it gets pent up, and the moment that there's a signal for people to start coming off the sidelines and getting back in, I think you're going to see a lot of competition, which inherently will drive prices back up, and that's going to be the start of the next run.

So hopefully a rate cut is going to happen. Do you think that the prices are going to meet somewhere in the middle, or you think that sellers are just going to continue to want astronomical figures? If it heats up, there has to be some compromise, no? Or is it just going to be a seller's market?

It's more or less going to be a seller's market is the reality. I think what you're getting at is this has been so unfair to buyers. B buyers got beat up and pushed around when the market was really frothy, when it was going at this fast and furious pace, getting outbid on deal after deal and competing with cash offers and so forth. Then rates go up and it's like, Okay, well, at least prices should come down, and they didn't. If you think about it from a buyer's perspective, interest rates went up essentially two and a half times what they were Just a couple of years ago, and prices have held steady. There's been no adjustment pricing. It's totally unfair to buyers. But all those buyers that have been sitting on the sidelines just waiting for prices to come down, they're not going to. It's not going to happen. It's a supply and demand issue. Yeah, the reality is, if you were thinking about buying, now is, relatively speaking, a good time to be doing that because you can always refinance the interest rate. There's a stupid cheesy saying in the real estate world, which is, marry the house, date the rate.

But if you think about it, it makes sense. You can always refinance your interest rate. If you can afford it today and you can- If they go down. They will go down. If your expectation is, I'll refinance when they go back down to two and a half or three %, that's wildly unrealistic. But they will go down. We'll see interest rates in the fives. There's no question about that. And that's normal. And that should hopefully give way to a more normal market.

Well, it's actually low, historically speaking.

Historically, yes. But I'm also of the mind that the days of doubled in Interest rates will never be seen again because it's just a different world today.

Yeah, people have not that long term of a memory when it comes to interest rates and are expecting the go, go days of after the financial crisis that are never coming back. No.

It's the reality.

I'm someone who wants to buy a house, too. I'm like...

Yeah, it's a tough reality. I get it. It's a really tough reality for people that, again, I've been sitting and watching saying, It's going to happen. Prices are going to come down. Okay, maybe. I just don't see it, barring any massive geopolitical event or heaven forbid, a catastrophic earthquake, something like that. I hate to keep saying these words. God forbid. I'm not trying to put this out. John. This is not me trying to manifest that, but it would It takes something like that.

For prices to come down a little bit.

For prices to come down, in my opinion. It's not going to be based on the current economic system that we're in right now. That's not going to sway it.

But are you mostly talking about big cities, LA, New York, where there's finite space?

Yeah, I think there's a supply and demand issue everywhere. In fact, I know there is. The reality is we're just not building enough houses to keep a pace with the growing population. And the millennials are putting a greater strain on the housing market than we've ever seen before. And they're all coming into their own now. They're getting married, they're having kids, they have jobs, they're getting established, and they need housing. In a city like LA, where I live and work, I think that's even more prevalent because we've just run out of real estate. We can't go any further west. There's a big ocean right there. We're not going any further east. We crossed downtown already. A city like LA that's historically always been very horizontal is now starting to go vertical because we've run out of space. But speaking to your point earlier in terms of- Some of the houses over there, too, on the PCH are falling into the ocean anyway. It's a whole another threat, which is just a climate threat, which is really, as it pertains to real estate, an insurance problem. That is a big systemic problem that we're going to be facing in years to come that I'm not sure, frankly, how we're going to navigate.

In parts of a country like LA, fire insurance has become so exorbitant, it makes it virtually impossible. I'm talking about premiums that are hundreds of thousands of dollars a year. Try buying a oceanfront property in Florida right now and getting wind insurance. It's virtually impossible. Insurance is required by banks to provide loans. Well, if you can't get the insurance, then you can't get the loan, well, then the system breaks. There's going to be some big challenges coming for this industry.

Isn't there the case where you can get insurance from the state up to a certain amount?

Yes. Call a California Fair plan up to 3 million, and then you can layer that with additional policies. But that's a whole other thing, and I'm not an insurance broker.

But basically, it's causing a lot of home buyers to get spuked or really priced out of the market.

And it's something most home buyers don't know until, I don't want to say until it's too late, but until they're already under contract. Yeah, in the process. We're in escrow and thinking, I'm going to be moving into my new home in 30 days. And then you get an insurance premium that you think is going to be 20 grand, but it's 120 grand.

I think It's a really important thing to think about as you're going into the process and not when it's too late. I've talked to people who are trying to buy in Mandeville or whatever around here. It's impossible to get the insurance at all, even if you do have the money for a big, fancy, nice house.

Yeah, at a certain point, it doesn't matter how much money you have, it's just whether or not you're willing to pay it.

And explain to me why cash offers always win. At the end of the day, the seller will get their money from the cash buyer or from the bank. So they're getting the same amount of money. But why is everybody so excited about the cash offer, specifically, if they ultimately get the same amount?

It's a smart question. So first of all, they don't always win. I've been in situations where I beat out cash offers just by having other terms that were better or more favorable. But if you think about what's the difference between a cash offer versus an offer that has financing? It really comes down to three things. There's no loan contingency, so you're paying cash. There's no appraisal contingency because you're not getting a loan. You have the ability, the flexibility, I should say, to be more nimble and close faster. That's it. You take away two contingencies and you can close quicker. Otherwise, to your point, whether it's 100% paid in cash or 20% paid in cash and 80% in a loan, it all adds up to 100. That's all it is. Is it just gives sellers a greater sense and feeling of certainty that this person will cross the finish line. It's speed. That's it. Yeah, that's it. Again, those contingencies are pretty significant because in California, the contracts are very much designed in favor of the buyer. The buyer puts the property under contract and essentially just places a force field around the property for whatever that contingency period is, which is typically around two, two and a half weeks.

Within that time frame, they have an opportunity to look under the hood, kick the tires, do their due diligence, They have a free look to do so. If at any point they decide, I don't want to buy this house, they can pull the rip cord, they get their deposit back. It's a real harm to the seller because they have to then try to recreate that initial momentum when they came to market and find a new buyer. But the buyer just gets their money back and move on to something else.

Then you have questions as a buyer, too. I'll go on any real estate porn website of my choosing of the day and I'll see, Oh, wait, this was off the market. Now it's back on the market. What happened?

It's tough.

I have some questions about it.

Look, it's the age old, you only get one chance to make a first impression. There is no substitute for that initial rollout. When something is new to market, to your point, the real estate porn that everyone's looking at 18 times a day, when something new comes on and it's new and it's fresh and the market hasn't seen it before, that is every seller's greatest opportunity to get the highest price. The longer it sits, the more, I would say, negative the narrative is that people start coming up with in their minds. True or not, it doesn't matter. What's wrong with it? Why isn't it sold? Why won't anyone pay that price? Totally. Something must be weird. Exactly. This is an internal conversation. Somebody died there. I don't have the opportunity to then counter that. These are just things people are thinking in their minds, and it all then directly affects what they ultimately are willing to write in an offer.

Yeah, because it's all sentiment. It's all feelings anyway.

It's a very emotional process, the home buying and selling process.

But let's double click on those times where you beat out cash offers. How did you that?

The one that comes to mind just off the top of my head was, it was a David and Goliath situation. My client was David competing against one of the wealthiest families in the world, had a cash offer, and I had them write a letter to the seller, and I knew the seller. I knew what would speak to them and what would essentially plug at their heartstrings to know that this is someone that you would want your home to pass on to. They ended up leaving. The seller did about $300,000 on the table and going with the lower offer because they felt a connection to that person. For them, that wasn't enough money to move the needle. Wow.

I just got chills a little bit. Is that weird? No. I have all sorts of feelings about financial markets. That makes me a super nerd. Millennials, you touched on, infamously feel shut out of the real estate market. They stress, they go on TikTok, they kfech, they bitch, they bone, that they don't have... Kfech?

Kfech. Yiddish? They get it. Kfech. I like it. Okay.

That they don't have the same opportunities as the boomers. Is this narrative true? And if it is, what resources do they have available to them as first-time home buyers?

I would say it's definitely true. It's an unfair world. I hate to be so just direct, and I don't mean to sound insensitive, but it's not a fair world that we live in. The world has changed dramatically. As I said, there's just not enough supply for the growing demand. And as a result, yeah, a lot of people feel like, Hey, I got shunned. I got shut out. That being said, there's also, I think, the biggest transference of wealth happening right now from the baby boomers to the millennials. And they will likely be coming into more money that will help them in that regard. But sure, people are also living longer. Right now, that's a challenging time for them, especially with where interest rates are.

But are there any things that they can use to lower the price if they're home for a First-time home buyer.

I wish that there was a magic pill here. There really isn't one. Again, the best thing you can do is to try to buy down the interest rate, but you're not buying it down from 7% to 4%.

You're talking about just with points?

Yeah, more or less.

Can you explain how that works?

Again, as I said, usually what will happen is you can structure this in the deal as to receive a credit from the seller to do that so you're not coming out of pocket for it. But work with your bank and they'll explain to you what the trade-off is that, Hey, you pay one point and we can lower your interest rate. Usually, let's a quarter of a point. So it will go from 7% to 6.75. Which adds up over time. For sure it does. And especially if you're going to keep that loan for the next 30 years, which, by the way, you're not because lower interest rates are coming and people will have an opportunity to refinance, I think, sooner rather than later. But sure, in the short term, it's one way to at least shoehorn in a little bit easier. Okay, fine.

What about up and coming neighborhoods? There are usually opportunities.

Sure. Yeah. If you can get ahead of that trend.

What do you keep in mind? What are your tell-tale that it's an up and coming neighborhood and not just a faux up and coming neighborhood that's really going to take a while to come?

Yeah, that's a good interesting question. I would say proximity and relevancy are the first two things that come to mind. If it's a little town in Timbuktu, well, it's really not within proximity to anything which really doesn't make it relevant. Is it just outside of a major city? Okay, that's interesting. Is there something about it, whether it's a vacation area for fishing and hiking and boating or what have you? I think COVID exposed a lot of areas that had been previously overlooked. Covid did a lot of things, and one of the things it did was it brought the borders down, and the world became flat again in terms of real estate. People started moving to Boise and started moving to Miami. If there was one great winner coming out of COVID, it was certainly Miami. But other markets, like just here in Southern California, Lake Arrowhead took off, the desert areas took off, Santa Barbara, Orange County, anywhere that was a fringe area to a major city. Again, proximity took off because people realized, I can work from home now. I don't have to be within 30 minutes or 15 minutes of my office. I can be an hour and a half away, or I can be an hour and a half flight away.

Those are the things. And I just, like anything else, follow the money.

Yeah. I mean, the reason they're going to Miami or to Nashville or to Dallas or to wherever they don't have income tax, follow that money trail.

Well, that. And like, again, I mentioned Lake Arrowhead. So my wife and I bought a second home in Arrowhead during the pandemic. And a lot of clients had started moving out there. A lot of money had started moving out there. And as I said, you got to follow the money. I had heard rumor that the owner of Soho house, Ron Berkel, had actually bought the Lake Arrowhead Resort, the big hotel there. A friend of mine happens to represent them, so I called him. I said, Hey, I'm thinking about making this offer. Can you call him and find out if this is true? And he called me back in five minutes, said, Yeah, no, he bought it, and supposedly it's turning into Soho. That, again, creates so much new relevancy, which is going to create more interest and demand, and that'll drive more traffic there, and that'll bring values up.

Are you seeing a lot of your clients leaving for more tax-advantaged states?

For sure. Yeah.

How does California keep up with that?

Well, look, I'm not telling you or your viewers anything they don't already know, but for California, the greatest thing that has going for it has always been and will still be the weather. There is a weather tax we pay to live here, but people are starting to really question whether or not or how much that's worth. La, and I say this in all sincerity, I've lived here my entire life. I'm fifth generation from LA. I believe is in a state of crisis of sorts. The number one thing on most people's list when they think about where they want to live is safety. Obviously, we've had a real crime problem here as of late. When people feel unsafe and when it's overly tax cumbersome, people start to question whether or not this is where they want to continue to live. That's what we're seeing happen right now. Unfortunately, it's like turning a ship to try to make some any of these changes. But LA and California as a whole are going to have to if they want to continue to retain these wealthy residents that pay and pave the way for the state to be what it is.

I mean, you see these guys, Bezos and whatever, moving to Florida and in the amount that they're saving in taxes. The whole house basically is free. I mean, it's not free, but- Yeah.

And they're still here. Bezos is here. A lot of these- You have to track your days. But you got to track your days. He'll spend six months in one day in Florida to be able make that happen. But he'll be here the rest of the time or somewhere else. I mean, look, no offense to Florida. You don't really want to be there in the summertime. It's miserably hot. Southern California has one of the best climates in the world, and hard to put a price on that.

True story. You mentioned Palm Springs. I did. I started my career in Palm Springs, fun fact. Doing? I was on the I-Team. I investigated all the shenanigans of Palm Springs. I was 19 at the CBS station. Interesting. Kpsp, shout out. But I saw so much growth there, specifically. And recently, we've heard a lot about short-term rentals contributing to the affordability crisis. Palm Springs has been in the center of all of the hula-baloo around that. Can you explain why short-term rentals affect the housing market so much?

It's hard to explain exactly what impact it has. First of all, in an area like Palm Springs, it's the residents that live there full-time that hate the short-term rentals. And they hate them for, I'll just say, stereotypical renter that it brings in, someone that's looking to go out to the desert and be loud and obnoxious and party for a weekend. If you're living there full-time, you moved out there for the peace and the quiet, the serenity. That's the opposition that's been built up against it. The rental market has been soft as of the last 12 months. A lot of the lease listings we have have been leasing for less in recent months than they did two years ago, which is very much outside the norm. Usually, again, there's a trajectory upward. I I think that that's overall more commentary just about the state of the economy and the psychology as it relates to the state of the economy, that there's just a tight grip on the purse strings right now. I think just a lot of people not wanting to spend money and sellers who don't want to give up, again, these historically low interest rates, but want to do something with these assets are then looking to try to short term rental them.

Yeah, there are a lot of private equity companies that are also behind these deals. I think Palm Springs put a cap, right? I heard something about that. On the vacation rentals. Yeah. I know. Look, Coachell is once a year. It's fine. Hold on to your wallet. Moneyrehab will be right back. Did you know that even if you have a 401k for retirement, you could still have an IRA? Robin hood has the only IRA that gives you a 3% boost on every dollar you contribute when you subscribe to Robin hood Gold. But get this, now through April 30th, Robin hood is even boosting every single dollar you transfer in from other retirement accounts with a 3% match. That's right. No cap on the a 3% match. Robin hood Gold gets you the most for your retirement thanks to their IRA with a 3% match. The offer is good through April 30th. Get started at Robin hood. Com/boost. Subscription fees apply. And now for some legal info, Claims Same as of Q1 2024, validated by Radius Global Market research, investing involves risk, including loss. Limitations apply to IRAs and 401(k)s. 3% match requires Robinhood Gold for one year.

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Yeah. I mean, if we're looking at the forecast for what the housing market is going to do, let's talk about that for a second. The projections, at least for this year, which, again, is going to be somewhat of a shaky year, is still single-digit appreciation. I think this is where people have gotten... I think this is where people have gotten a little bit lost in this, is that the deceleration of appreciation is not the same thing as depreciation.

Totally, or disinflation or deflation.

Exactly. Okay, so prices haven't gone up as much as they have, but to even still be in the black given everything we've been through for the last year and a half and where the interest rates currently sit is remarkable, which again, all stems back to a supply and demand issue.

Thanks, Jay Powell. Soft landing for the win.

It played out very differently than people anticipated. Everyone thought, Oh, there's a correction coming. It must come in the form of a huge drop in home values. And it didn't. It came in the form of a huge drop in the volume of homes, not the value of homes. I don't think people need to be terribly concerned about the appreciation of their homes keeping a pace with the inflation rate, because I think ultimately, as rates come down and as more people enter the market, you're going to see prices go up, and that's going to increase people's equity positions in their homes.

But oftentimes people forget about inflation when they're thinking about the growth of their home. When they say grandma bought a home for 50 grand, and now it's 250 grand, that's amazing. But they forgot that when grandma bought that house, movie tickets were five cents.

Exactly. Yeah.

That's such an important thing to keep in mind.

100 %. Yeah. And again, that's the reason why, as I said earlier, we're probably never going to see double-digit interest rates again, because it's one thing to have an 18 % interest rate when the home you're purchasing is $75,000. But when that home is $3 million, it's unlikely we'll ever see those kinds of rates again, in my opinion.

And when you're thinking about the value of your home, how would you suggest for somebody to factor in inflation or how to think about the value of their home keeping pace with inflation?

Good question. I don't know that I really know how to answer that question, to be honest with you, in terms of there's so many things, obviously, that are going to be outside of each homeowners control. You're not going to be able to dictate what the inflation rate is going to be. That's a little bit bigger than any one of us. If It's more, I think, people get a little bit too fixated on this notion of the investment component. And not to take away from it, it is a huge component. It's the largest purchase and probably biggest asset in most people's lives. But it's also your home. It's where you're going to spend time with your family and raise your kids and create your special memories. So don't lose sight of that. Historically, home values have always gone up. I'm not saying that we haven't seen dips in the market, but over a seven-year period of time, historically, over the last 100 years in the United States, home values have always gone up. That means that if you bought your house on the eve of the Great Depression, seven years later, it was worth more than that.

We're going to have correction cycles. Those correction cycles are likely to be faster and more extreme than we've seen in the past because we live in a world that moves faster and more extreme than we've seen in the past. But I wouldn't be too concerned about... Again, it's like I always talk to people in terms of looking at an investment property. It's like, look, if you're going to hold to hold this long term, you're going to be fine. If you're going to come back to me in 18 months and ask whether or not you can sell it for a 20% profit, we may have a problem.

Yeah, it's such an important point to underscore that a home is a home and leave some of the investment components to the professionals. If you want to flip houses, go on HGTV. This is more than just inflation adjusting the value of your home.

That's exactly right. Yeah. Look, if you're going to approach it from that perspective of trying to make money off this as a investment vehicle, you really got to know what you're doing. I've seen so many people try to wade into these waters that have no clue what they're doing. It was meant to be a six-month project and it taking two and a half years. It was meant to be 100,000 being half a million. You really have to know what you're doing. It's a profession like anything else.

There's been a story that I've been wanting to ask you about. It is the squatter issue that's happening in LA, your fifth generation, Los Angelino. What the heck? There was a big LA Times article. They put out this wild story about two estate agents, did you see this? —who had squatters living in one of their properties. The squatters even created fake lease agreements, and they rented out a room in the house to a legit renter. They even set up the home's WiFi. So wild.

Bananas. Yeah, it's wild. It's remarkable what people can do today. The fakes, the phoneies, the deep fakes, it's just unbelievable, and it's really hard to guard against. I had a listing in West Hollywood last year that this family literally pulled up with their moving truck. They had a whole moving truck full of furniture that they moved into the house. The owner showed up and was like, Hi, hello. Hi, who are you? What are you doing here? And had to call the police and get them out of there. But it's wild how brazen some people have been with this. So, yeah, it's challenging, and I've certainly had my experience dealing with it. As I understand it, and I'm going to be super clear, I'm not an attorney. This is not my area of expertise, not my specialty by any means, thank God. But As I understand it, squatter's rights apply to someone that has been in a home for five years or more, that has established legitimate residency in that home, has paid utility bills, has paid the tax bill. So if you've just changed the locks and moved into a house over the weekend. Isn't that trespassing?

According to California law, traspassing is different than squatter's rights. I know it seems utterly ridiculous, but they're defined differently within the confines of the California law.

So what legal recourse does somebody have against squatters?

Well, if someone has been there for five years, then they have to go through a formal eviction process just like they would if it was an ordinary tenant. But You'd have to be pretty obtus to have someone squatting in your property for five years and not take note of it. Otherwise, you're just calling the police, you're calling the sheriff, and just having them kicked out.

But it feels like this has become more of an issue as of late.

La is an interesting market because we get a lot of tourist traffic. We get a lot of fakes and phonies. A lot of the calls we get on our biggest listings, our bigger listings, rather, we have to really scrub and vet because I can't tell you how many fakes and phoneies we've come across. And to your point, people that have had fake proof of funds, fake bank statements, fake tax returns, I had one guy call on a property. It was about a $100 million property in Bel Air, and he claimed he was the grandson of the king of Jordan.

I was just going to ask you. Some prince probably has called you.

But that's not impossible. That's not entirely outside the realm of possibility in LA. We see that stuff. We have Saudi royals here. We have princes and the most affluent wealthiest people in the world that live here. So that's not altogether, Okay, fine. I'll go on this ride with you. And we went and saw the property and I was like, This Usually, it just doesn't pass the smell test. Something's wrong. I said, Why don't you come into my office tomorrow and we can sit down and talk more about this? Because he was talking about wanting to write an offer and so forth. I'm sitting there with my team and we're trying to make heads like, What's the over-under on this guy being real. I was saying, I'm telling you, this doesn't seem right. Then in the distance, I hear this engine. This engine you hear from blocks away. I look outside and this brand new Lamborghini pulls up. I went, Oh, okay. The odds may have shifted a little bit until he got out of the driver's side, walked around and handed the keys back to the guy from the dealership that came out of the passenger side and walked in.

It was like, This guy went to a Lamborghini dealership and drove up to my office just so he could pull up in it, hoping we wouldn't catch him giving the keys back.

Oh my God.

Wild.

Only in LA.

Only in LA.

But what did that guy... What was the scam?

That's the question. That's always the question. To to what end? And then what? Because at a certain point, you have to produce the money. I don't know. It happens all the time. I don't know if these guys are delusional, if they're trying to show off for their girlfriend, they have nothing better to do on a weekend. But we always, we being, just I'll say, the real estate community is always asking that same question, for what purpose? To what end? Where do you see this going? You think that one day there's just going to be a transfer of title and we're going to give you the keys? I don't know. But you have to be pretty damn crazy to even think to do that in the first place. I guess I'll leave that there.

We under episodes, as you know, with a tip, listeners can take straight to the bank. We talked about so much. What tip would you have for home buyers today besides not pretending to be Jordanian royals?

Don't be short-sighted. Kind of what I was talking about before. Understand that this is a long game. Again, there is an investment component to this. Try to find the property that feels like home. Just know that the market will do its part. It will It will go up, it will go down. That's what markets do. They're cyclical of anything. If the market of the last 18 months has taught us anything, it's that, Oh, yeah, markets are cyclical. We just forgot because we skipped a cycle and we were in a bull run for 10 plus years. But ultimately, find a home that is right for you, that's affordable to you, where you're not overextending yourself, and know that the market will do its part. Property values are going to continue to go up over time. You'll have opportunities to refinance, you'll have opportunities to pull out equity and leverage that to go buy other properties. But if I could go back and talk to myself 20 years ago, I would I sit myself down and say, buy more real estate. Because if I would have bought more as this during this last 10 years, I'd be doing this virtually from a yacht.

That would be lovely. Zoom works there. I think it's really important to remember you can't control the macro economy. You can only control your own micro economy.

That's it. Your own portfolio. Like you said, the macro factors are way bigger than you and I. So focus on what works for you and how you fit within this infrastructure, if you will.

You're not going to bring that crystal ball today.

It's broken. It's in the shop, actually. I've been going back to the tea leaves. Yeah.

Money Rehab is a production of Money News Network. I'm your host, Nicole Lappin. Money Rehab's executive producer is Morgan LaVoy. Our researcher is Emily Holmes. Do you need some money rehab? And let's be honest, we all do. So email us your moneyquestions, moneyrehab@moneynewsnetwork. Com, to potentially have your questions answered on the show or even have a one-on-one intervention with me. And follow us on Instagram at Moneynews and TikTok at Moneynews Network for exclusive video content. And lastly, thank you. No, seriously, thank you. Thank you for listening and for investing in yourself, which is the most important investment you can make.