October 10, 2025 • 21 mins
I SURVIVED REAL ESTATE 2025
The Norris Group Presents: The 18th Annual I Survived Real Estate – LIVE at the Nixon Presidential Library
The Norris Group’s award-winning black-tie gala, I Survived Real Estate, returns for its 18th year. Since 2008, I Survived Real Estate has supported Make-A-Wish OC & IE—and thanks to your generosity, we’ve now raised over $1.2 million for children in need
This year’s backdrop?
A California housing market still starved for inventory, mortgage rates hovering above comfort zones, affordability hitting generational lows, inflation and tariffs. Add in global uncertainty, sticky inflation, and the ever-watchful eye of the Federal Reserve—and you’ve got a landscape full of questions.
- Inventory Drought: California’s housing supply remains critically low
- Rate Pressure: Mortgage rates linger well above buyer comfort zones
- Priced Out: Affordability has collapsed to generational lows
- Global Tensions: War, tariffs, and instability rattle investor confidence
- Inflation’s Grip: Costs remain stubbornly high, squeezing margins
- Tariff Troubles: Rising import costs could ripple through construction and development
- All Eyes on the Fed: Every rate hint could send shockwaves through the market
Our expert panel brings top minds in economics, investing, and housing to help us prepare for what’s next. I Survived Real Estate was born from crisis, with a mission to unite thought leaders, give back, and guide our industry forward.
In this episode:
- Assessing lending risks in today’s economy
- Shifts in lending standards and credit conditions
- The impact of California’s policies on real estate investors
- Exploring future opportunities for real estate investing
The Norris Group originates and services loans in California and Florida under California DRE License 01219911, Florida Mortgage Lender License 1577, and NMLS License 1623669. For more information on hard money lending, go www.thenorrisgroup.com and click the Hard Money tab.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Narrator (00:01):
Welcome to The Norris Group real estate podcast, a
show committed to bringing youinsights from thought leaders
shaping the real estateindustry. In each episode, we'll
dive into conversations withindustry experts and local
insiders, all aimed at helpingyou thrive in an ever-changing
real estate market. continuingthe legacy that Bruce Norris
(00:24):
created, sharing valuableknowledge, and empowering you on
your real estate journey.
Whether you're a seasoned pro ora newcomer, this is your go-to
source for insider tips, markettrends and success strategies.
Here's your host, Craig Evans.
Joey Romero (00:45):
The Norris Group is proud to present our 18th annual
gala. I Survived Real Estate atThe Nixon Presidential Library
on Friday, September 12. Since2008, our event has raised well
over a million dollars. Thisyear, we'll be raising funds
again from Make-A-Wish OC andIE. Individual Tickets are
available now. To get yourtickets, go to
isurviverealestate.com click thelink here in the card. We would
(01:08):
like to thank the followingplatinum sponsors, uDirectIRA
Services, The San Diego CreativeInvestors Association,
DouglasBrooke Homes, MVTProductions, Realty411, and DBL
Capital.
Craig Evans (01:25):
So I want to switch over and talk about, you know,
because I've had a lot of peopletalk to me tonight from a
lending perspective of, youknow, we're talking about rates,
we're talking about lending andhow to source capital, either,
not so much from an equity side,but from a debt service side,
right? So, Dan, I want to startwith you on this one, and I
think we can go through but forinvestors, primarily the people
(01:48):
in this room, for investors thatare financing flips, small,
multifamily, things like that,what lending risks should they
most be aware of right now inthe current economy?
Dan Wallach (02:01):
Well, I think a great question is, if you go out
and you get a construction loanor a rehab loan, and then you're
planning on flipping it intosomething more permanent, right?
I think the risk is, what is theinterest rate going to be, you
know, when you're when you'redone, right? And, you know,
there are other things like,what's the advanced rate going
(02:21):
to be at that point in timeduring, I would say the largest
risk I think you have today,because I don't think rates are
going up from where they are thelong term rates. So I think the
largest risk you have is thatyour cost of material might get
out of control. You know, wewere talking about tariffs a
little while ago. So if you'regoing to spend a lot of money on
(02:44):
product that doesn't come fromthe US, who knows, and there is
a lot of uncertainty abouttariffs, and I will tell you
what I know from you know, beingin the lumber industry before.
You're going to, the lumbersuppliers are going to pass that
on to you. They're not going toeat, you know, a cost increase.
(03:04):
So you know, if they're payingfor copper, you know, X dollars,
and it's going to go up double,your price is going to go
double, and they'll actuallymake more money, because they're
making a 40% margin, orwhatever, on, you know, double
the price. So I think the riskreally is in the cost of
materials and I guess overall,Craig, I think that it's a much
(03:27):
better time to be doingsomething today than it was a
year ago, because I think ratesare coming down, not going up
like they did. And I think that,I think a lot of the material
cost fears are kind of rollingout of the system compared to
where we were a year ago.
Craig Evans (03:46):
So staying with lending. Doug, I'll start with
you on this. And again, if anyof you want to chime in, please
feel free to. How do you seelending standards from a debt
service side, not equity, butfrom a debt service side? How do
you see lending standards forsingle family investor loans
evolving. You know, do you seethere's such an upheaval right
(04:07):
now, and I think that's bringingabout uncertainty when people
are looking and trying to sourcedebt sources right now? Do you
see the credit of thattightening expanding, and it is
the game flipping and changing?
Doug Duncan (04:21):
One of the things that's an interesting to me is
in each of his last three orfour press conferences after the
Fed's meetings, Chair Powell hasmade the statement that credit
conditions are modestly tight,and raises questions about what
(04:42):
the economists at the Fed arelooking at, because if you look
at credit spreads in the creditmarkets, they're incredibly
tight, which suggests thatthere's significant monetary
ease in the marketplace. So Idon't actually understand on
what basis he's making thatclaim. So if there is a with a
serious whiff of recession, thenyou start to see credit being
(05:06):
priced that I would I wouldexpect to see some widening of
spreads, which is going toincrease the cost of credit,
right? So I think at the moment,while interest rates are high
relative to recent history, notrelative to long history.
Remember the 30 year fixed ratemortgage. It's got a new tongue.
(05:30):
Had to break it in since theWorld War Two, say, since the VA
was put in post, is 6% that'sthe average long term 30 year
fixed rate mortgage. So it's alittle bit above that, but
credit spreads are justincredibly tight, and so if
there is a serious whiff ofrecession, I would expect those
(05:51):
spreads to widen, even thoughbase rates may come down because
of that, of the recession.
Craig Evans (05:58):
Anybody else got a thought on that? Or everybody in
agreeing with Doug on that?
Okay, well, I'm gonna...
Doug Duncan (06:06):
If you get a bunch, you get some economists, so
greed. If you lay them all endto end, they won't reach a
conclusion.
Craig Evans (06:18):
So, Oscar, this will probably be primarily for
you. Again, guys, feel free tochime in. But Oscar, I want to
ask you, how do you seeCalifornia policies like rent
control, ADU legislation, newhousing mandates, things like
that? How do you see thatshifting for investors, because,
(06:39):
again, my goal tonight is I wantto give them information that
they take and go out and figureout how to do their jobs better.
So it's easy to sit up here andstart talking at levels that
just start to impress me. Whatputs stuff in their pocket?
What's a great takeaway forthem? So what do you see out of
policies that can make an effectin how they function in a day to
(07:01):
day life?
Oscar Wei (07:04):
Well, we, you know, at CR, we talk about policies
all the time. And I would letthe you talk about, you know,
rental properties. Every time Igo to, I've attended, you know,
every year, a couple of sessionson policies and rental markets.
I always get someone in theaudience telling me that it's
hard to rent, to have a rentalproperty in LA, in LA County,
(07:25):
that's why people go to SanDiego, or some of the places,
because of the the required, thedifficulty for landlords, for
people who own a property andit's probably, to be honest,
it's probably, you know, as faras rental property is concerned.
It may actually get, it may notnecessarily get better the very,
very soon, within the nextcouple of years. Now, we
(07:46):
continue to push, you know, atC.A.R, we continue to push and
try to get as much as possibledone as far as rental property
is concerned. And we try to,another thing that we also
tried, and some of you probablyin the room are, are a little
concerned about, of course, isinsurance. You know, insurance
policies in California, it'stough. We turn from a year, year
(08:08):
and a half ago, we have someavailability issue. Now we may
have a little bit moreaffordability issue on
insurance. We're trying to pushfor that now, in the long run,
it's probably some of thepolicies are probably good for,
like defensible space andhardening and all this stuff
probably are good because itprotect, you know, the
(08:30):
properties from being destroyed.
But at the same time, yes, inthe short term, it is going to
affect, you know, the cost ofselling a home or turning around
a home. So that part of it. Ithink, you know, it still need
to be worked out. Now the other,some of the other policies,
ADUs, I think in the last coupleof years, some of the policies
that we try to push actuallyallowed more ADUs to be built.
(08:53):
The question is, of course,whether those ADUs are being
used as a rental properties orbeing sold. We don't have a lot
of hard data on how many ofthose are being sold or being
turned around, but I think wewill have to continue to push
for ADUs so that we can havemore housing supply. I agree
(09:13):
with what Dan mentioned earlier.
I think we do need a lot moresupply. And hopefully, and in
our upcoming meeting next week,we probably will continue to
push for more policy changes.
Craig Evans (09:28):
Okay, so, you know, historically, we've done, I
mean, you know, I've got afriend in the room that
literally struggled with a pieceof land trying to get permits
for 19 years. 19 years forpermits on a project. So, how,
we're talking about, how do wework through and create
(09:50):
policies? What are some of thereal things that you see
California coming out with overthe next 18 months that may
change that process? Or is that,is that ever a reality in
California?
Oscar Wei (10:01):
I think, well...
Craig Evans (10:03):
I mean, let me rephrase, aside from an ADU?
Oscar Wei (10:08):
I'm leaning a little bit more towards your second
choice, which is, it's probablygoing to take a long, much
longer time for things tochange, but at the same time, of
course, we have heard, and Idon't know whether it's going to
materialize. We've heard, youknow, the Trump administration
is hopefully going to work withthe state and local government
(10:31):
to actually loosen up thosezoning issues, maybe making some
of those state land, federallands available. Now, if that
actually happens, that couldactually lead to maybe a little
bit more building, but at thesame time, we still have CEQA
issue, we still have all thesedifferent things that people run
into permits, and it's takingtwo years, three years, four
(10:54):
years, five years to actuallybuild. So I think it's a start
if we actually can have a littlebit more land opening up for
builders. Now, the other thingthat I also heard, and I'm not
sure whether it's going tohappen, is, I know, in the bill,
and the big, beautiful bill, Idon't know what the new name it
(11:15):
really is, you can't remember.
They're supposed to maybe have alittle bit more credits, more
affordable housing, whether thatis going to really happen and
will allow builders anddevelopers to build more that,
of course, wait to be seen inthe next 12 to 18 months or so.
Craig Evans (11:38):
Okay.
Dan Wallach (11:39):
My view on this is everyone, most you guys are from
California. When was the lasttime the state of California did
something that helped you? Iknow that the Trump
administration would like tomake things better, but they
don't control the states. Andit's not just about California.
You know, I live in Nevada rightnow. It's the same problem. I
(11:59):
don't see, I don't seegovernment making it easier at
the local level or the statelevel, and it has been tough. We
haven't seen a lot.
Craig Evans (12:11):
Okay. I knew you were about to say something.
Doug Duncan (12:17):
I was quoted once I gave a speech in San Diego,
saying that the thing I loveabout the California legislature
is that they pass laws to dealwith the side effects of the
laws that they pass. I want toask a question about California
bill. I'm leaving here to gogive a speech to 1000
(12:39):
accountants on Monday, rock andcocktail party. But last year,
when I spoke to them, I did anaudience question. I asked, 'How
many of you in the room have amortgage that's less than 4%?'
Like three quarters of peopleraised their hands. I said,
(12:59):
'Now, how many of you, if you'rerequired to move, will keep that
house, turn it into a rental anduse that to subsidize the higher
cost mortgage you take at theplace you move to?' So my
question for California is, whathappens to the tax treatment of
that house if you turn it into arental and buy another house?
(13:26):
Does, does it step up? Or doesit or change in some way?
Because it's that becomes allthose people that three quarters
of them said that's what theywould do.
Craig Evans (13:36):
Yep.
Doug Duncan (13:36):
So that was, that created a whole new set of
investors, right? That was my...
Oscar Wei (13:43):
I'm not an accountant, so I can't really
say for sure, but, you know, asfar as I understand, if you keep
your property as a rentalproperty, and then you move on
and buy another property, see,then of course, you actually
have to pay. You actually haveto pay, you know, any of the
rental income, you haveto pay,as you know, with taxes, but at
(14:05):
the same time, I mean, if youactually turn, if you actually
turn it in and and you sell itand move and change it to
another rental property, thenthere is the 1031 exchange. But
for the most part of you arekeeping multiple properties. As
far as I know, there might notbe a whole lot of benefit in
terms of, you know, tax wise, Imay be wrong on this, like I
(14:29):
said...
Craig Evans (14:29):
There are some new tax bills that are being spoken
about right now that may comeinto play next year that would
affect that. So, so, all right,Joey is has already done
cartwheels and jumped around andsaid, I've only got X amount of
minutes left, so I can see inthe background. So here's what I
want to do. I want to ask onefinal question, and I want you
each to chime in. So if we'relooking two to five years down
(14:53):
the road, all right, what doeach of you see is the single
biggest opportunity for realestate investors, the people in
the room to be looking at andstriving for?
There's quiet. I can't believethat.
Doug Duncan (15:17):
Well, I'll take a one, a stab at one thing there.
Obviously, the boomers areaging, and there's going to be
some income transfers. And ifthey, I live in Cape Coral,
Florida, which the kids arecalled like God's waiting room.
Craig Evans (15:33):
Yep.
Doug Duncan (15:35):
There's going to be some turnover there. And it
turns out a lot of the kidsdon't actually want those homes
that mom and dad had. So there'sgoing to be movement in that
space. I believe.
Craig Evans (15:47):
Look at the biggest wealth transfer in history is
about to take place. Either oneof you wants to go next doesn't
Oscar Wei (15:55):
I'm trying to think because, you know, based on our
matter.
calculations, based on ourforecast, we know that for the
next three, four years, well,starting, you know, upcoming
year and next few years, we knowthat sales are probably going to
grow. You know, as far asexisting home or so, it's good,
it's going to grow, but we alsoknow that it's going to grow at
(16:15):
a slow pace. And I think youknow, if we actually end up
having interest rate comingdown. And I would believe that
is the case. It's going to comedown slowly. Now, for there are
a couple already mentioned it,you know, I think, you know, as
far as first time buyers isconcerned, it might actually
have gone down to it has gonedown to the lowest in the last
(16:35):
six years. I think it couldactually start bouncing back a
little bit for first time buyersand entry level buyers. The
question is, obviously whetherwe have enough supply for them.
And I think we could, assumingthat we don't hit a financial
market correction, we couldactually see homes start
(16:58):
loosening up a little bit, and Ithink we could slowly see those
movement of maybe entry levelbuying, entry first time buyers,
buying some entry level homes.
Now, here's the thing that Ithink I have to stress also. We
did also see a couple years ago,here's a movement of remote
working that allows people tomove to, you know, maybe Inland
Valley, Riverside, some moreaffordable homes. And that level
(17:21):
actually plateaued a little bit.
I do see that, you know, if wecontinue to see, you know, that
level of remote working and, youknow, interest rates started
coming back down, and entrylevel, first time buyers started
picking up again. I think wehave, we could see a few more
first time buyers coming back tothe market.
Craig Evans (17:42):
Okay.
Dan Wallach (17:44):
I have two comments. One comment is, think
about the price you paid for thefirst home that you bought.
Joyce and I, our first home was$55,000 right? And now you know
that home must be worth, I don'tknow, 250-$300,000 right? And
it's 50 years older whenever,you know. So there will be
(18:08):
inflation in housing over thenext seven years, let's say, and
I'm going to change yourquestion a little bit to seven
years. So yeah, I think there'llbe inflation in housing. And the
second thing is, almost everyseven years there is a downturn
in housing, right? So at somepoint there's going to be
opportunity to buy cheap, andyet, you know, seven years from
(18:31):
now, real estate will be moreexpensive. So I think that you
need to think about liquidity.
You know, when the market ishorrible and you can buy, that's
when you can't borrow, right?
Because you know who's lendingon that. So think about now,
when decent liquidity isavailable, how to get yourself
(18:53):
into a position where you canborrow money but you're not, you
know, lines of credit on thingsthat you own today, so that when
the next opportunity comes twoyears from now, five years from
now, you're in a position to buyrather than a, you know, a
bystander watching it happen.
Craig Evans (19:12):
Very good. Ladies and gentlemen. We have had a
great first panel. I want to seeif I can get out of the child's
chair there. Give a round ofapplause to our panel. Thank
you, gentlemen. Thank you. Thankyou. Thank you, Dan. Sorry, yep,
we're going to take a 15 minutebreak. Oh, gentlemen, I'm sorry
(19:33):
I was supposed to have given, Iwas supposed to got pictures
with you guys. I'm gettingchastised again. We're going to
take a half hour break. We'regoing to have dessert. Let you
guys mingle, talk and meetpeople, share cards, have fun,
kiss babies. We'll see you backin 30 minutes. Thank you guys.
Joey Romero (19:55):
Don't forget to visit isurvivedrealestate.com
for tickets to the event onFriday, September 12. The Norris
Group would like to thank thefollowing Gold sponsors,
Keystone CPA, The Inland ValleysAssociation of Realtors,
Pasadena FIBI, The North SanDiego Real Estate Investors
Association, LA south REIA,NorCal REIA, The Wizard of the
(20:17):
Wobbly Box, Andy Teasley,Shepherd's Finance, The Thompson
Group, PropertyRadar and WhiteHouse Catering. The dinner wine
is provided with a generouscontribution by Rick and Leanne
Rossiter. Hope see you allthere.
Narrator (20:31):
For more information on hard money loans, trust deed
investing, and upcoming eventswith The Norris group. Check out
thenorrisgroup.com. For moreinformation on passive investing
through the DBL Capital RealEstate Investment Fund, please
visit dblapital.com.
Joey Romero (20:51):
The Norris Group originates and services loans in
California and Florida underCalifornia DRE license 01219911.
Florida mortgage lender license1577 and NMLS license 1623669.
For more information on hardmoney lending go to
thenorrisgroup.com and click thehard money tab.
Welcome to The Norris Group real estate podcast, a
show committed to bringing youinsights from thought leaders
shaping the real estateindustry. In each episode, we'll
dive into conversations withindustry experts and local
insiders, all aimed at helpingyou thrive in an ever-changing
real estate market. continuingthe legacy that Bruce Norris
(00:24):
created, sharing valuableknowledge, and empowering you on
your real estate journey.
Whether you're a seasoned pro ora newcomer, this is your go-to
source for insider tips, markettrends and success strategies.
Here's your host, Craig Evans.
Joey Romero (00:45):
The Norris Group is proud to present our 18th annual
gala. I Survived Real Estate atThe Nixon Presidential Library
on Friday, September 12. Since2008, our event has raised well
over a million dollars. Thisyear, we'll be raising funds
again from Make-A-Wish OC andIE. Individual Tickets are
available now. To get yourtickets, go to
isurviverealestate.com click thelink here in the card. We would
(01:08):
like to thank the followingplatinum sponsors, uDirectIRA
Services, The San Diego CreativeInvestors Association,
DouglasBrooke Homes, MVTProductions, Realty411, and DBL
Capital.
Craig Evans (01:25):
So I want to switch over and talk about, you know,
because I've had a lot of peopletalk to me tonight from a
lending perspective of, youknow, we're talking about rates,
we're talking about lending andhow to source capital, either,
not so much from an equity side,but from a debt service side,
right? So, Dan, I want to startwith you on this one, and I
think we can go through but forinvestors, primarily the people
(01:48):
in this room, for investors thatare financing flips, small,
multifamily, things like that,what lending risks should they
most be aware of right now inthe current economy?
Dan Wallach (02:01):
Well, I think a great question is, if you go out
and you get a construction loanor a rehab loan, and then you're
planning on flipping it intosomething more permanent, right?
I think the risk is, what is theinterest rate going to be, you
know, when you're when you'redone, right? And, you know,
there are other things like,what's the advanced rate going
(02:21):
to be at that point in timeduring, I would say the largest
risk I think you have today,because I don't think rates are
going up from where they are thelong term rates. So I think the
largest risk you have is thatyour cost of material might get
out of control. You know, wewere talking about tariffs a
little while ago. So if you'regoing to spend a lot of money on
(02:44):
product that doesn't come fromthe US, who knows, and there is
a lot of uncertainty abouttariffs, and I will tell you
what I know from you know, beingin the lumber industry before.
You're going to, the lumbersuppliers are going to pass that
on to you. They're not going toeat, you know, a cost increase.
(03:04):
So you know, if they're payingfor copper, you know, X dollars,
and it's going to go up double,your price is going to go
double, and they'll actuallymake more money, because they're
making a 40% margin, orwhatever, on, you know, double
the price. So I think the riskreally is in the cost of
materials and I guess overall,Craig, I think that it's a much
(03:27):
better time to be doingsomething today than it was a
year ago, because I think ratesare coming down, not going up
like they did. And I think that,I think a lot of the material
cost fears are kind of rollingout of the system compared to
where we were a year ago.
Craig Evans (03:46):
So staying with lending. Doug, I'll start with
you on this. And again, if anyof you want to chime in, please
feel free to. How do you seelending standards from a debt
service side, not equity, butfrom a debt service side? How do
you see lending standards forsingle family investor loans
evolving. You know, do you seethere's such an upheaval right
(04:07):
now, and I think that's bringingabout uncertainty when people
are looking and trying to sourcedebt sources right now? Do you
see the credit of thattightening expanding, and it is
the game flipping and changing?
Doug Duncan (04:21):
One of the things that's an interesting to me is
in each of his last three orfour press conferences after the
Fed's meetings, Chair Powell hasmade the statement that credit
conditions are modestly tight,and raises questions about what
(04:42):
the economists at the Fed arelooking at, because if you look
at credit spreads in the creditmarkets, they're incredibly
tight, which suggests thatthere's significant monetary
ease in the marketplace. So Idon't actually understand on
what basis he's making thatclaim. So if there is a with a
serious whiff of recession, thenyou start to see credit being
(05:06):
priced that I would I wouldexpect to see some widening of
spreads, which is going toincrease the cost of credit,
right? So I think at the moment,while interest rates are high
relative to recent history, notrelative to long history.
Remember the 30 year fixed ratemortgage. It's got a new tongue.
(05:30):
Had to break it in since theWorld War Two, say, since the VA
was put in post, is 6% that'sthe average long term 30 year
fixed rate mortgage. So it's alittle bit above that, but
credit spreads are justincredibly tight, and so if
there is a serious whiff ofrecession, I would expect those
(05:51):
spreads to widen, even thoughbase rates may come down because
of that, of the recession.
Craig Evans (05:58):
Anybody else got a thought on that? Or everybody in
agreeing with Doug on that?
Okay, well, I'm gonna...
Doug Duncan (06:06):
If you get a bunch, you get some economists, so
greed. If you lay them all endto end, they won't reach a
conclusion.
Craig Evans (06:18):
So, Oscar, this will probably be primarily for
you. Again, guys, feel free tochime in. But Oscar, I want to
ask you, how do you seeCalifornia policies like rent
control, ADU legislation, newhousing mandates, things like
that? How do you see thatshifting for investors, because,
(06:39):
again, my goal tonight is I wantto give them information that
they take and go out and figureout how to do their jobs better.
So it's easy to sit up here andstart talking at levels that
just start to impress me. Whatputs stuff in their pocket?
What's a great takeaway forthem? So what do you see out of
policies that can make an effectin how they function in a day to
(07:01):
day life?
Oscar Wei (07:04):
Well, we, you know, at CR, we talk about policies
all the time. And I would letthe you talk about, you know,
rental properties. Every time Igo to, I've attended, you know,
every year, a couple of sessionson policies and rental markets.
I always get someone in theaudience telling me that it's
hard to rent, to have a rentalproperty in LA, in LA County,
(07:25):
that's why people go to SanDiego, or some of the places,
because of the the required, thedifficulty for landlords, for
people who own a property andit's probably, to be honest,
it's probably, you know, as faras rental property is concerned.
It may actually get, it may notnecessarily get better the very,
very soon, within the nextcouple of years. Now, we
(07:46):
continue to push, you know, atC.A.R, we continue to push and
try to get as much as possibledone as far as rental property
is concerned. And we try to,another thing that we also
tried, and some of you probablyin the room are, are a little
concerned about, of course, isinsurance. You know, insurance
policies in California, it'stough. We turn from a year, year
(08:08):
and a half ago, we have someavailability issue. Now we may
have a little bit moreaffordability issue on
insurance. We're trying to pushfor that now, in the long run,
it's probably some of thepolicies are probably good for,
like defensible space andhardening and all this stuff
probably are good because itprotect, you know, the
(08:30):
properties from being destroyed.
But at the same time, yes, inthe short term, it is going to
affect, you know, the cost ofselling a home or turning around
a home. So that part of it. Ithink, you know, it still need
to be worked out. Now the other,some of the other policies,
ADUs, I think in the last coupleof years, some of the policies
that we try to push actuallyallowed more ADUs to be built.
(08:53):
The question is, of course,whether those ADUs are being
used as a rental properties orbeing sold. We don't have a lot
of hard data on how many ofthose are being sold or being
turned around, but I think wewill have to continue to push
for ADUs so that we can havemore housing supply. I agree
(09:13):
with what Dan mentioned earlier.
I think we do need a lot moresupply. And hopefully, and in
our upcoming meeting next week,we probably will continue to
push for more policy changes.
Craig Evans (09:28):
Okay, so, you know, historically, we've done, I
mean, you know, I've got afriend in the room that
literally struggled with a pieceof land trying to get permits
for 19 years. 19 years forpermits on a project. So, how,
we're talking about, how do wework through and create
(09:50):
policies? What are some of thereal things that you see
California coming out with overthe next 18 months that may
change that process? Or is that,is that ever a reality in
California?
Oscar Wei (10:01):
I think, well...
Craig Evans (10:03):
I mean, let me rephrase, aside from an ADU?
Oscar Wei (10:08):
I'm leaning a little bit more towards your second
choice, which is, it's probablygoing to take a long, much
longer time for things tochange, but at the same time, of
course, we have heard, and Idon't know whether it's going to
materialize. We've heard, youknow, the Trump administration
is hopefully going to work withthe state and local government
(10:31):
to actually loosen up thosezoning issues, maybe making some
of those state land, federallands available. Now, if that
actually happens, that couldactually lead to maybe a little
bit more building, but at thesame time, we still have CEQA
issue, we still have all thesedifferent things that people run
into permits, and it's takingtwo years, three years, four
(10:54):
years, five years to actuallybuild. So I think it's a start
if we actually can have a littlebit more land opening up for
builders. Now, the other thingthat I also heard, and I'm not
sure whether it's going tohappen, is, I know, in the bill,
and the big, beautiful bill, Idon't know what the new name it
(11:15):
really is, you can't remember.
They're supposed to maybe have alittle bit more credits, more
affordable housing, whether thatis going to really happen and
will allow builders anddevelopers to build more that,
of course, wait to be seen inthe next 12 to 18 months or so.
Craig Evans (11:38):
Okay.
Dan Wallach (11:39):
My view on this is everyone, most you guys are from
California. When was the lasttime the state of California did
something that helped you? Iknow that the Trump
administration would like tomake things better, but they
don't control the states. Andit's not just about California.
You know, I live in Nevada rightnow. It's the same problem. I
(11:59):
don't see, I don't seegovernment making it easier at
the local level or the statelevel, and it has been tough. We
haven't seen a lot.
Craig Evans (12:11):
Okay. I knew you were about to say something.
Doug Duncan (12:17):
I was quoted once I gave a speech in San Diego,
saying that the thing I loveabout the California legislature
is that they pass laws to dealwith the side effects of the
laws that they pass. I want toask a question about California
bill. I'm leaving here to gogive a speech to 1000
(12:39):
accountants on Monday, rock andcocktail party. But last year,
when I spoke to them, I did anaudience question. I asked, 'How
many of you in the room have amortgage that's less than 4%?'
Like three quarters of peopleraised their hands. I said,
(12:59):
'Now, how many of you, if you'rerequired to move, will keep that
house, turn it into a rental anduse that to subsidize the higher
cost mortgage you take at theplace you move to?' So my
question for California is, whathappens to the tax treatment of
that house if you turn it into arental and buy another house?
(13:26):
Does, does it step up? Or doesit or change in some way?
Because it's that becomes allthose people that three quarters
of them said that's what theywould do.
Craig Evans (13:36):
Yep.
Doug Duncan (13:36):
So that was, that created a whole new set of
investors, right? That was my...
Oscar Wei (13:43):
I'm not an accountant, so I can't really
say for sure, but, you know, asfar as I understand, if you keep
your property as a rentalproperty, and then you move on
and buy another property, see,then of course, you actually
have to pay. You actually haveto pay, you know, any of the
rental income, you haveto pay,as you know, with taxes, but at
(14:05):
the same time, I mean, if youactually turn, if you actually
turn it in and and you sell itand move and change it to
another rental property, thenthere is the 1031 exchange. But
for the most part of you arekeeping multiple properties. As
far as I know, there might notbe a whole lot of benefit in
terms of, you know, tax wise, Imay be wrong on this, like I
(14:29):
said...
Craig Evans (14:29):
There are some new tax bills that are being spoken
about right now that may comeinto play next year that would
affect that. So, so, all right,Joey is has already done
cartwheels and jumped around andsaid, I've only got X amount of
minutes left, so I can see inthe background. So here's what I
want to do. I want to ask onefinal question, and I want you
each to chime in. So if we'relooking two to five years down
(14:53):
the road, all right, what doeach of you see is the single
biggest opportunity for realestate investors, the people in
the room to be looking at andstriving for?
There's quiet. I can't believethat.
Doug Duncan (15:17):
Well, I'll take a one, a stab at one thing there.
Obviously, the boomers areaging, and there's going to be
some income transfers. And ifthey, I live in Cape Coral,
Florida, which the kids arecalled like God's waiting room.
Craig Evans (15:33):
Yep.
Doug Duncan (15:35):
There's going to be some turnover there. And it
turns out a lot of the kidsdon't actually want those homes
that mom and dad had. So there'sgoing to be movement in that
space. I believe.
Craig Evans (15:47):
Look at the biggest wealth transfer in history is
about to take place. Either oneof you wants to go next doesn't
Oscar Wei (15:55):
I'm trying to think because, you know, based on our
matter.
calculations, based on ourforecast, we know that for the
next three, four years, well,starting, you know, upcoming
year and next few years, we knowthat sales are probably going to
grow. You know, as far asexisting home or so, it's good,
it's going to grow, but we alsoknow that it's going to grow at
(16:15):
a slow pace. And I think youknow, if we actually end up
having interest rate comingdown. And I would believe that
is the case. It's going to comedown slowly. Now, for there are
a couple already mentioned it,you know, I think, you know, as
far as first time buyers isconcerned, it might actually
have gone down to it has gonedown to the lowest in the last
(16:35):
six years. I think it couldactually start bouncing back a
little bit for first time buyersand entry level buyers. The
question is, obviously whetherwe have enough supply for them.
And I think we could, assumingthat we don't hit a financial
market correction, we couldactually see homes start
(16:58):
loosening up a little bit, and Ithink we could slowly see those
movement of maybe entry levelbuying, entry first time buyers,
buying some entry level homes.
Now, here's the thing that Ithink I have to stress also. We
did also see a couple years ago,here's a movement of remote
working that allows people tomove to, you know, maybe Inland
Valley, Riverside, some moreaffordable homes. And that level
(17:21):
actually plateaued a little bit.
I do see that, you know, if wecontinue to see, you know, that
level of remote working and, youknow, interest rates started
coming back down, and entrylevel, first time buyers started
picking up again. I think wehave, we could see a few more
first time buyers coming back tothe market.
Craig Evans (17:42):
Okay.
Dan Wallach (17:44):
I have two comments. One comment is, think
about the price you paid for thefirst home that you bought.
Joyce and I, our first home was$55,000 right? And now you know
that home must be worth, I don'tknow, 250-$300,000 right? And
it's 50 years older whenever,you know. So there will be
(18:08):
inflation in housing over thenext seven years, let's say, and
I'm going to change yourquestion a little bit to seven
years. So yeah, I think there'llbe inflation in housing. And the
second thing is, almost everyseven years there is a downturn
in housing, right? So at somepoint there's going to be
opportunity to buy cheap, andyet, you know, seven years from
(18:31):
now, real estate will be moreexpensive. So I think that you
need to think about liquidity.
You know, when the market ishorrible and you can buy, that's
when you can't borrow, right?
Because you know who's lendingon that. So think about now,
when decent liquidity isavailable, how to get yourself
(18:53):
into a position where you canborrow money but you're not, you
know, lines of credit on thingsthat you own today, so that when
the next opportunity comes twoyears from now, five years from
now, you're in a position to buyrather than a, you know, a
bystander watching it happen.
Craig Evans (19:12):
Very good. Ladies and gentlemen. We have had a
great first panel. I want to seeif I can get out of the child's
chair there. Give a round ofapplause to our panel. Thank
you, gentlemen. Thank you. Thankyou. Thank you, Dan. Sorry, yep,
we're going to take a 15 minutebreak. Oh, gentlemen, I'm sorry
(19:33):
I was supposed to have given, Iwas supposed to got pictures
with you guys. I'm gettingchastised again. We're going to
take a half hour break. We'regoing to have dessert. Let you
guys mingle, talk and meetpeople, share cards, have fun,
kiss babies. We'll see you backin 30 minutes. Thank you guys.
Joey Romero (19:55):
Don't forget to visit isurvivedrealestate.com
for tickets to the event onFriday, September 12. The Norris
Group would like to thank thefollowing Gold sponsors,
Keystone CPA, The Inland ValleysAssociation of Realtors,
Pasadena FIBI, The North SanDiego Real Estate Investors
Association, LA south REIA,NorCal REIA, The Wizard of the
(20:17):
Wobbly Box, Andy Teasley,Shepherd's Finance, The Thompson
Group, PropertyRadar and WhiteHouse Catering. The dinner wine
is provided with a generouscontribution by Rick and Leanne
Rossiter. Hope see you allthere.
Narrator (20:31):
For more information on hard money loans, trust deed
investing, and upcoming eventswith The Norris group. Check out
thenorrisgroup.com. For moreinformation on passive investing
through the DBL Capital RealEstate Investment Fund, please
visit dblapital.com.
Joey Romero (20:51):
The Norris Group originates and services loans in
California and Florida underCalifornia DRE license 01219911.
Florida mortgage lender license1577 and NMLS license 1623669.
For more information on hardmoney lending go to
thenorrisgroup.com and click thehard money tab.
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