042725- Home Solutions Podcast

Episode Transcript

Speaker 1 (00:03):
Good morning and happy New Year. This is Andy Keel
with the Win three team powered by Epic Realty, and
welcome to the Home Solutions Show on KNST. I am
joined today with Jerry Sunt with Cross Country Mortgage and
a very special guest, John Burley. John Burley is a

(00:24):
mentor of mine. I've known John for oh gosh, probably
about ten plus years now, and I've said this many times.
I've got two key, key mentors that have helped me
out deeply in my investing career, and John is one
of them. Bob Zachmeyer, the former host here is another
couple of the best investors that I've met. We'll we'll

(00:47):
talk a little bit more about John here in a moment,
but again, Welcome to the new year, Welcome to the show.
Wanted to just kick this show off talk a little
bit about what the market is doing and interest rates.
So Jerry, I'd like to if you would be so
kind to start us off and tell us where we
are today.

Speaker 2 (01:04):
Yeah, you know, this has been a quiet week for
mortgage rates. The real news will kick up next week
because most of Wall Street's on you know, still on
vacation this week, so no mortgage rates are still you know,
thirty year fixed are sitting right below seven percent in
the six point eight seven five, six point nine to
nine category. Fifteen years are fantastic, they're down closer to

(01:27):
six percent or high fives. And you know BA and
FHA loans are sitting in the six and a quarter
six and a half percent range, so they're you know,
rates are expected to move lower next year. Again, it's
all going to be about the the inflation and what
happens with inflation. And so with the changes with the

(01:49):
new administration coming in on the twentieth, you know, there's
questions about the tariffs and are there really tariffs going
to be implemented which could be inflationary or is that
more of just a negotiating time and that there won't
be a lot of there won't be tariffs put in place,
or at least not to the magnitude that that Wall
Street expects, and that will help ease inflation, and that

(02:11):
inflation will will slowly come down. I think, you know,
the early predictions are is that we may see lower
mortgage rates in the spring, you know, the end of
first quarter and the second quarter timeline, which will be
phenomenal for the spring buying season, but it's you know,
it's a wait and see game as to what's going

(02:33):
on with the economy and what's going on with inflation
and what's going on with the employment situation.

Speaker 1 (02:39):
Great, Well, a little more about John Burley.

Speaker 3 (02:43):
John is.

Speaker 1 (02:46):
Probably one of the most successful real estate investors that
most of you haven't even heard of, anyone that tuned
into the show. Last week. His daughter Danny Burley was
our guest. We are talking a little bit about financial
literacy and wealth and growing up in a wealthy family. Well,

(03:08):
today we get to speak to her dad, and he
has just been such a huge impact on mine and
so many others lives because he's been so open and
sharing his training and teaching how to be successful investors
and how to be specifically successful real estate investors. And

(03:33):
I just I can't even begin to explain how impactful
that has been to me. So, without any further ado,
I'd like to introduce John Burley. If you'd like to
give us a little bit more of your background, John,
I'm sure the audience would love to hear.

Speaker 3 (03:47):
Hi, Andy, Hay, Jerry. Great to be here, guys, I
really really appreciate it. Super excited. Yeah, yeah, I think,
like a lot of people on this show, and real
estate has always been near and dear to me. You know,
I started real estate investing when I was seventeen years old,
way way way back in the late seventies, and you know,

(04:09):
just really really loved it. I spent quite a bit
of time working in the world of Wall Street, where
we're learned a lot of things that really changed it.
I think when I look at real estate, I look
at it differently than any educator I've ever seen. I
look at real estate is nothing more than money. It's
an asset class, but you need money. It kind of
many of us have been to the you know, seminars,
and I affectionately call them seminar Land in quotes, because

(04:31):
you know, in seminar Land everything works. Just buy my
course and you'll get rich without doing any work. And
you know, all of us, no, that's not how it
works in the real world. In the real world, real
estate is entirely about money. And I think it's just,
you know, beyond ludicrous to think that you can do
real estate without money. So we teach people how to
get money, you know, and in my career, where you're
literally you know, the largest private buyer of real estate.

(04:53):
In the history of Arizona, we as you know, Andy,
we literally have taught thousands of students in the state
of Arizona who are millionaires. That's thousands of millionaires people,
a large number of dec and millionaires, and we even
have a handful of people who are worth over one
hundred million dollars here in Arizona from our program. But
it was all about real estate and how you do

(05:14):
real estate. Ben are saying that real estate is just
a commodity, it's just an estay class, it's not a product.
And the key to successful real estate investing is you
need access to large amounts of money at all time.
And if you have money, you know, there's a saying
that we have that's very common. But if you have money,
real estate's extraordinarily easy. And if you don't have money,

(05:34):
real estate's extraordinarily hard. And so unlike most of the
traditional education which just doesn't work very well in real estate,
where they keep trying to teach you how to do
it with no money down and you know what today
has been exposed is in most cases some pretty extraordinary
unethical business practices of trying to do real estate without
money and tying people's properties up. I mean, you know,
we've had state legislation, legislations swept across America, Federals probably

(05:58):
coming to ban stop that sort of transactions because they
don't have money to perform. We're just like, look, it's
like any asset, can you do it without money? Yeah?
And I think the question is why would you try?
Why not just learn how to get the money. And
so we teach you how to raise money and then
do real estate really really well. But the money is
the most important thing. So we're just different than anybody

(06:21):
ever met because I came out of Wall Street, and
you know, from Wall Street, we weren't kidding ourselves that
you could easily build a huge portfolio without having money.
And so we just you know, common sense and a
lot of truth. And I know that's not always popular,
but that's how we teach it.

Speaker 1 (06:39):
Yeah. When I first met John, it was at an
az REA, which is our Arizona Real Estate Investors Association
in Tucson, and I remember a couple of key things
that just really blew me away about John. And one
of the questions that I remember somebody asking you, was,

(07:01):
you know, back in you were a big, big, and
still are a big investor in the Phoenix market. And
I remember somebody in the audience saying something to the
effect of, how did you know to stop buying real
estate back in two thousand three, two thousand or as
the market started heating up? And your answer was just

(07:21):
so amazing to me. It's like, did you have a
crystal ball? How do you know the crash was coming?

Speaker 3 (07:27):
Fifth grade math?

Speaker 1 (07:29):
Yeah, And that was the answer.

Speaker 3 (07:31):
The short end, the short short answer is fifth grade math.
I know what the income is. I know what real
expenses are. I don't pretend expenses don't exist, like so
many investors do in their spreadsheets. I put in the
real expenses, which is more than printple interest, taxes and insurance.
You lose about twenty five percent to just normal activity

(07:51):
with a piece of real estate. It's real estate. Stuff
goes wrong every day, and then there's ten percent per management.
It's thirty five. It's not ten and so fifth grade math.
By two thousand and four, when I looked at what
the debt service was going to be, what the expenses
were going to be, and what the income was, there
wasn't a large enough spread of profit or there was
no profit, so I simply do not place. I am

(08:12):
unique that I was extraordinarly well trained and worked very
hard to learn the lessons. I do not invest emotionally,
So when everybody else wants in, I'm usually out, And
when everybody else wants out, I'm usually in with the
vengeance that few people have ever seen. It's the you know,
we train people to remove their their emotions and to

(08:32):
make their psychology stronger. Real estate investing is like any
other investing. It's just about money and numbers. I've done
thousands and thousands of long term holds and I've never
been emotionally involved with any of them. They're just silly
houses and silly pieces of property that provide cash flow.

Speaker 2 (08:47):
John's that's incredible discipline.

Speaker 3 (08:52):
It It's something that we all go through and we
teach it. I mean, so when I met Andy, he
didn't have that discipline, and now Andy is. You know,
he is just cold, laser focused machine for his for
his capital investors that work with him, and the people
that he does real estate with. It's a process that
if you're willing to learn, we can teach anybody the process.

(09:14):
And when you can take your emotions out of investing
and see clearly you are in the top two percent
and those are the ones that make all the money.
And so that's what we do. It's just it's about
the money and the numbers. The returns are there or
they're not. I do not speculate on my internal spreadsheets.
I always put zero for the future growth. The deal
needs to make money the day I buy it based
on the numbers.

Speaker 2 (09:35):
So John, you know interesting, it's so important to look
at you know, hey, where is the market now and
where we perceive it or expected to go in the future.
What's your you know, we've been talking about predictions for
the last few weeks of what's your prediction for twenty
twenty five when it comes to housing in the Phoenix

(09:57):
market and in the Tucson market.

Speaker 3 (10:00):
Great question. So, first of all, I think prognosticators are
full of crud. That's the nicest word I can use.
Nobody knows what the market's going to know. I've asked,
you know, speeches I've done around the world, and predominantly guys.
What I do is I run a private equity company
that I founded in nineteen eighty nine. I'm the founder
and seventy percent of the assets in the portfolio of mine.

(10:22):
That's what I know about prognostication. Nobody knows. Anybody who
says they know is lying to take your money. The
only person that know, from my point of view spiritually
would be God in Jesus Christ. I'm close to both
of them. Neither has told me. Every time I do event,
you know, kind of tongue in cheek. I ask anybody,
if you know what the market's going to do, let
me know. And I've talked to some crazy people, but

(10:42):
never a prophet. With that said common sense. Based on
forty five years in the business and extensive research going
back hundreds of years researching markets in America and in thousands
of years overseas, I think that we'll probably see a
softening in interest rates, which you said, as far as
the market in what the market's going to do or
not do, it's not that relevant if you're nego, if

(11:06):
you're buying without emotions, we simply buy all the properties
that we want to buy based on a return. If
the return's not there, we don't buy. I don't believe
in market timing because it does not work. No one knows.
You may got lucky a few times, but nobody knows
what the market's going to do, and so I always
let the market time me in and time me out.

(11:26):
So you know, Andy mentioned earlier in the show, you
know two thousand and four to six, the market in
Arizona just timed me out because the returns weren't there,
the numbers didn't work on a mask. Were we buying
deals off the market and on you know, some deals, yes,
but volume in Arizona that period, no, you know, when
the market is extraordinarily good, like you know we were.

(11:47):
We were large full in in fourth quarter eight all
the way through fourteen, and you know then just because
of where the market was, we bought in large volume.
So we don't try and do marketing timing. We don't
imb procrastinators. In Hell, I made money when interest rates
for eighteen point six percent, So I just just look
at the numbers in this market. It's medium market to me.

(12:10):
Interest rates aren't that high from a careers per perspective,
and there's good value out there and rent are gone
through the roof.

Speaker 1 (12:17):
Yeah. I want to touch on this a little bit
more when we come back, but we are coming up
on a break. So this is again Andy Keel with
the Home Solutions Show on KNST and we'll be back
in just a few moments. Hi, and welcome back to
the show. This is Andy Keel with the Win three
team powered by Epic Realty, and I am again joined

(12:39):
with John Burley and Jerry Sunt with Cross Country Mortgage.
Jerry Real Quick, before we get into the next segment,
would you like to share your phone number for the audience.

Speaker 2 (12:48):
My number is five two zero three seven zero nine
five seven six.

Speaker 1 (12:53):
And I can be reached at five two zero five
three nine nine five nine one. And before the break,
we were talking about several things, but one point that
I wanted to clarify is John was talking about the
market timing him out prior to the Great Recession and

(13:14):
stopping not buying property because of fifth grade math, and
I wanted to expand on that a little bit for
the audience and what that meant. And I've learned to
be very selective with the use of the word the
words always and never, but when it comes to investing,
I'm very deliberately using the word never. We never buy

(13:34):
a property that's going to negative have negative cash flow,
and I think that is what John was referring to
with the fifth grade math and going into this era
where the market was timing him out. So is that
kind of the gist.

Speaker 3 (13:48):
Of yeah, I think, you know, especially residential real estate.
I mean, guys, you don't need a spreadsheet to buy
a three or four bedroom house for you know, two hundred,
three hundred thousand dollars. You don't, I mean, just growing
up and living in America. You've been in dozens, if
not hundreds of these. If you don't know what you're
doing in your new pay for the property inspector. But

(14:08):
the numbers are just the numbers. If you're buying because
you believe it's going to go up, you are not
an investor under any definition. You are a speculator, and
speculators eventually get busted. No one's lucky enough to win
every time. That's why they built Las Vegas. And so
you know when I say fifth grade math, look, it's
really simple. If my debt service is fifteen hundred dollars

(14:30):
a month and my income stream is two thousand dollars
a month, after the property management and the loss of income,
I'm looking at a negative. I'm not going to make
money on that. So I've got to have, you know,
a twenty four hundred dollars a month income stream. I've
got to have money guaranteed the day I buy it,
the day I close escrow. I am making money. Usually

(14:52):
I have equity in but I'm more concerned about having
card cash flow. I do not do balloons, and I
don't teach you to do it. Balloons are four clowns.
Don't do them. I do not buy properties with you know,
teaser rates that are going to explode in a year
or two, because I have no idea what the market's
going to be. And I've been doing this for forty
five years. I know that markets don't always go up.

(15:13):
I know that markets go down. I also know that
they go sideways sometimes in some markets for a decade plus.
So real estate to me was number one about the
cash flow. It's got a cash flow the day I
buy it. If it cash flows the day I buy it.
With the rate of return that you're looking for, you know,
and if you're new, hey making six eight ten percent
plus all the cool stuff, the tax benefits and the
possibility for growth, that's really good starter rate. It's not

(15:35):
what veterans go for, you know, and you know, so
we're looking at you know our fifteen or twenty or
twenty five percent, depending on the market, first year cash
on cash return. That's what we do in Arizona right
now today. And if I can't get that, I just
moved to the next property. I don't get emotional. I
don't care. I put the offer out the number that
works for me at the optics not accepted, I just
go to the next property. I mean, there's so many

(15:57):
of them. I mean, when they when they say there's
a shortage of inventory, it's not like people are living
on the street because they can't buy a house. The
shorte of injury is more referring to they can't buy
the house they want. There's a big difference, you know.
And so I know in any given market, there's always deals.
I mean in two thousand and six, we were still

(16:18):
buying deals. It was just a very low volume because
most didn't make sense because of all the speculation going
on by amateur investors. They didn't know they were amateurs
until two thousand and eight that it was pretty clear.
And so we just you know, we buy for the return,
the cash on cash. If I'm doing short term transactions,
which you know, those are great to start the flips
and the quick cash veterans. If you know what you're

(16:41):
doing in your business business for a while, you're not
doing short term transactions. Because of short term transaction, you know,
when you make that twenty or thirty thousand dollars, you
just guaranteed yourself the smallest possible ready to return. I
mean here in Phoenix, what you do with with our
model in Tucson, Andy, I mean, you know, a regular
house literally bought for one hundred percent of retail over
the next ten years. If you know how to properly monetize,

(17:02):
we'll give you one hundred percent of what you paid for.
So if you paid three hundred grand, you will make
three hundred thousand dollars in the next ten years on
that property. Like clockwork. We've been doing it for thirty
five years in Arizona, over and over and over again.
That's what we buy. I don't want to make twenty
or thirty thousand dollars in a one time deal. I
want to get three hundred thousand dollars over ten years
for doing a deal one time. Good. That's how money works.

Speaker 1 (17:24):
Yeah, exactly. And one of the other things that just
when I first met John, that just blew me out
of the water. Is I got hurt pretty badly in
the Great Recession era of two thousand and eight to twelve,
as I'm sure many of the listeners did too. When
I met John Now, he had just a massive portfolio

(17:46):
in Phoenix and I think across many other cities in
the country. And not only did you survive that, but
you found a way to thrive through that.

Speaker 3 (17:56):
You know, I think that, well, the best investor, not
the richest man anymore, but the wealthiest investor in modern history,
not even close Warren Buffett. Because Elon Musk is a
business owner. Buffet's an investor. There's a difference. Warren Buffett
has always been an extraordinary contrarian. When everybody is buying,
he's out when everybody When everybody doesn't want to buy,

(18:20):
he buys. And you know, and during the booms he's
always out of favor. I mean, for those of you
that remember it were finding markets, I mean in two
thousand and three and four and five, they were laughing
at him because oh, he didn't understand tech. No, well,
he didn't understand why you buy companies for multiples of
their hits on a website with no profits and no future.
There's a difference. And I remember, you know, when everybody

(18:42):
was teaching refinanci your properties in six which they were
teaching again, you know, in the early two twenty twenties,
you know, refinance everything, refinance everything, take all your cash out.
What could go wrong? Everything can go wrong. You know,
I was out of favor, and people say, oh, he
doesn't understand how leverage works. No, I understand. Leverage is
a double edged sword. I get both sides. So we
just simply buy for the return. Today, it's not that
hard to teach. The biggest challenge that people have is

(19:05):
their own psychology and emotions. And we know that. We
acknowledge it, you know, and you told me to mention it.
I've forgotten the first section, but you can go to
John Burley dot com John B. U R. L. E
y dot com. We've got free downloads for you there
on the landing page. If you go across it, you
can also see our coming events. We have one in
January and one in March. I only only do three

(19:26):
four events a year in Arizona. That's it because mainly
what I'm doing is what you want to be doing,
or you're already doing. I'm out there doing deals and
working the business for real. I just learned how to
raise money properly, and so we do it on a
much much higher volume than most people.

Speaker 1 (19:41):
Yeah, and tell us a little bit more about your
event coming up on January eighteenth, because we're going to
offer that to our listeners too as a special Yeah.

Speaker 3 (19:48):
I'm really really excited about it. I have a book
Moneysickets of the Rich actually outsold Harry Potter for a
couple of weeks, had noted Rich Dad, Poor Dad. My
friend Robert kiss Sake and Sharon Lector's book off the
number one business bestseller for a while. And in it,
we just teach what people who are wealthy really do.
You know, there's seven levels of investor. You need to

(20:10):
identify where you are. There is you know, seven steps
to financial seek to freedom, and we just go through
and show you how to do an automatic money system,
how to become debt free, how to really set up
your finances and your money properly. And so we're going
to take a day up in Phoenix on the eighteenth.
One hundred percent of your tuition. One hundred percent of
your tuition goes to Saint Mary's Food Bank, And what

(20:32):
we're going to be doing is just going through all
the money steps that everybody needs that most people don't do.
And I've been blessed in my career from the broker's
business and the private equity real estate business. I have
served over a thousand clients that we've done JB's with
who are deck in millionaires to billionaires. And here's what's amazing.
The stuff I'm teaching you, I didn't learn from a book.

(20:53):
I learned it from my wealthy clients. Ninety eight percent
of them don't have a mortgage on their home, eight
percent of them don't have car leases and car payments.
They live consumption wise, completely totally debt free. And it's
a process that for most people it's just a few years. Literally,
I can show you how to get a debt in
three to five years, and so we're gonna just show
you the core talents and if you then learn how

(21:16):
to invest and make money at a higher rate of
returns and have done the foundational skills for most people,
financial freedom is eighteen years. I'm starting cut to eighteen years,
eighteen months to three years out And by financial freedom,
what do I mean completely replace your income and whacked
off all your bad debt, and then you can live
the life. And then and then people go farther. I mean,

(21:37):
like Andy, I mean most of you know, he's what
we call a Burly Century Club member. It's got over
one hundred properties, well over one hundred properties in portfolio,
performing every month just kaching, kachin, kachin, kachin, kaching. In
the old days we call it mailbox money. Today most
of it's just wired. But every month on the first
we get boatloads of cash coming in, which is how
it should be for everybody listening. So go to Johnburly

(21:59):
dot com, get the free downloads, and book yourself into
the event.

Speaker 1 (22:02):
And what's the price of the event, John.

Speaker 3 (22:04):
Just twenty seven dollars all go.

Speaker 1 (22:06):
I said, yeah, amazing. You know, I've been to a
number of these and I keep coming back, and so
many of the colleagues, I mean, We've been coming back
to virtually every one of these ever since I've met John.
I just such an immense value every time we go.
Not only do we learn something new, but people that
we meet there too, is just an amazing, amazing group

(22:27):
of people investors. Just it's wonderful wonderful, full group of people.
I just I can't explain enough how valuable that has
been over the years. So oh yeah, really great opportunity.

Speaker 3 (22:38):
Yeah, and for you guys listening, if you haven't met Andy,
he'll be at the event on January eighteenth up in Phoenix, Arizona,
come on up and meet Andy face to face. The
other thing is that our events are unique. About forty
percent of the students and attendance are successful high end investors.
And there's nothing like talking to somebody the break who
really does it, rather than theoretically talking about why it

(22:59):
won't or how they can how you can't do it,
you know, grabbing a guy like Andy and taking him
out to lunch. I mean, you can't put a price
on what it is being in that environment of success
where people who are actually doing it. I mean most
events I go to, less than five percent of the
room is successful. It's like you just need to avoid everybody.
And and we even joke about you, like, hey, just

(23:20):
you know, when you go to break you might not
want to be talking in the bathroom about how it
don't work, because there's a good idea. The guy standing
next to you is a deca millionaire off the model.
So you want to be careful. You know, if you
want to go to event and talk about how it
doesn't work, I'm not your guy. Go to another event, yea.

Speaker 1 (23:36):
And I want to just have one more quick announcement
before we take a break. We're also doing a meet
up event at my office, the Win three team office,
which is sixty sixty one East Broadway Boulevard, Sweet two
twenty eight. We're basically right across from park Place Small
Broadway in Wilmot for you two sonyms and this is

(23:58):
an open to the public event. It's basically just about
raising raising private money investing real estate. It's kind of
an open forum. We almost do it kind of like
a Mastermind where we'll actually field questions from the audience
and you know, you get to talk to active practitioners
that actually do this stuff. So again, feel free if

(24:19):
you'd like to come to this, feel free at six
o'clock on January twenty third, again at my office at
sixty sixty one East Broadway, Sweet two twenty eight. This
is an open to the public event. If you'd like
more information, feel free to give me a call directly
at five two zero five three nine nine nine one.

(24:41):
And with that, we're coming up on a break and
we'll be right back. Hi, and welcome back to the show.
This is Andy Keel with WIN three team powered by
Epic Realty, and you're listening to the Home Solutions Show
on K and ST Radio. I'm again joined with Jerry
Sunt with Crosscunt Mortgage and John Burley. And on the

(25:02):
break we were just talking a little bit and Jerry
had a couple of great questions for John that I
really wanted the audience to hear, So go ahead, Jerry.

Speaker 3 (25:10):
Yeah.

Speaker 2 (25:11):
No. You know, when I look back at when people
talk about the greatest opportunities with real estate over the
last thirty forty years, one was right after the SNL crisis,
and then one was after the Great Recession and both
having to do with bank failures or savings and loan failures.
And with that, after the two thousand and eight recession,

(25:31):
you know, we had we went to basically the cheapest
money we've seen in history, and I think a lot
of investors came out of that, and you know, it
was easy to make a property cash flow because whether
where they were using private money or private debt, or
whether they were doing Fanny Freddy mortgages. Mortgages were at
their all time lows, so cash flow was able to

(25:53):
be accomplished relatively easily. Now since twenty twenty two, people
have had to sharpen their pencil pen and you know,
and John, if you could elaborate on that, what is
the details there? You know, is someone's buying real estate
now as compared to five years ago. You know, they

(26:13):
got to have a sharper pencil because the debt service
is that much higher.

Speaker 3 (26:16):
I agree, Jerry, and I'd say there's two parts of it.
The first ones we got it. You have to be
trained to have a sharper pencil. The second thing is, look,
I don't take advice from anybody on investing who hasn't
not just gone through a downturn, not survived a downturn,
but thrive, because downturn is where you make your money.
So one of the blessings I had is that when

(26:37):
I opened the private equity company in eighty nine, we
were sitting on interest rates that were still at twelve
to fourteen percent from the bank, so I didn't have
the low interest so I had to sharpen the pencil.
I had to buy well but I was raising money
in large volume, so I had to place and I'm unique.
Two percent of the private equity companies in America are
for profit. The other ninety eight percent of per fee.

(26:59):
Almost all the big Wall Street companies there literally is
virtually no intention of making you any money. They just
want fees. That's all they do. And you need to
understand that, I'm from that world. That's how that works.
Two percent have the courage and the ability to work
for profits, and they make way more money for everybody,
including themselves. Ninety eight percent don't. So when I the

(27:19):
benefit I had is having been this game so long
and been so blessed with so much work, which is
a nice way of saying I figured out every single
thing you could do wrong on a real estate transaction.
I did it. Is I had to change the game.
So because when I was going, you know, when I
was buying all those houses, hundreds, just hundreds of houses
back then every year we had bigger during the next downturn.

(27:40):
But after the savings and lom and what we knew
is that look, it didn't work. Interest rates or twelve
percent didn't matter that I was buying the house for
fifty grand my pit, I was six fifty in rent
for six It wasn't going to work. So I had
to change the game. So I looked at two things.
I had my expenses. What could I do to reduce expenses?
And it's twenty five percent. So if you're making two

(28:01):
thousand dollars a month rent over the long term, five
hundred dollars a month is going to go away to vacancies, repairs, everything.
It's twenty five percent. That's just real world. If you
do Class C property, it's more than twenty five and
so it's like, okay, So how can I change that number?
And then the second thing is how can I create
the income? And so one of the things we've done,
and it's been such a blessing, we provided home ownership

(28:22):
for thousands of families and our students around the world.
Hundreds and hundreds of thousands, of hundreds and hundreds and
thousands of families owned a home because we provided owner financing.
So I can take a house that my PITI today
is say fifteen hundred, the rents two thousand, well five
hundred is going to go to long term expenses press
property management. So two thousand maus five hundred is fifteen hundred,

(28:45):
two hundred dollars for property management. That means I'm down
to thirteen hundred dollars net income and my expense is
fifteen hundred. I can't buy that house. Now, it gets hard.
But what if you could just flip the switch. What
if I could take that exact same house and on
paper take the five hundred dollars expenses and make one
hundred percent of them go away because they're the owner.
Now they're buying the home, and then people will pay

(29:07):
more to own than rent. This is no different than
a used car. Most of us, at some point in
our life was in a position where hey, I couldn't
get the super new deal car deal interest rate, but
I need a car, so I went to use car dealership.
And today maybe you pay ten or twelve percent, ten percent,
nine percent and a little bit more money because you
wanted to own the car. Well, the same thing works
in houses. So we took a house that was two

(29:29):
thousand a month, five hundred expenses, two hundred property management.
So Netta thirteen hundred with a fifteen hundred dollars mortgage payment,
and I flipped the switch and I turned it to
twenty four hundred dollars income and a couple hundred dollars
a month in management expenses. So suddenly I'm at twenty
two hundred net. I'm only paying fifteen hundred, and I

(29:50):
make seven hundred dollars on the exact same house that
most investors lose money every month. But I'm even knowing
they're losing money. We make five hundred, seven hundred, eight
hundred dollars walk away like clockwork, month after month after month,
year after year after year, for now thirty five plus years.
And that's what we teach. We teach you how to
change the game, because you cannot win playing the game

(30:12):
that everybody else is playing. If everybody's doing it, it's
too late, you know, like by two. You know, it's
like the short term flips. There's just way too many
people trying to buy the same house in the same way,
and then created such ill will in the marketplace because
most of them trying to do are trying to do
with no money and can't perform on the contracts they
put under. And so we just flipped the switch, Jerry,

(30:33):
We changed the game. You know, we went through and
and you know Andy's been through the details, but I
mean literally we go for days in March. You know,
our our our big real estate evand of the Spring
is in March twentieth to twenty thirty. You can go
to Johnbully dot com to find out with it and
we literally just go four days with open Q and
A the entire event, walking you through step by step

(30:56):
how to take a property that would be a loser
for ninety five percent of the people and turn it
into a winner every single time. Can't just do what
everybody else does and expect extraordinary results. There's too much
information out there. This is twenty twenty four, and look,
this isn't this isn't a uh, this isn't Instagram. There's
no Tsunamia foreclosures coming. I mean, you know, Jerry, the

(31:19):
federal numbers are actually the exact opposite. The federal numbers
are showing we have more equity in single family homes
than at any time in the history of America. Correct,
that is correct. And the default rates are running are
running at twenty five to forty year lows. There's no
big foreclosures coming. They're sitting. I mean, you know, if
you're in Tucson, the average person that's got a house
out there. They got one of those loans from four

(31:40):
years ago. They got a three percent loan and they
got one hundred and fifty thousand dollars of equity. This
house is not going to foreclosure. You know, it's ludicrous
the things people say. This is a market where you
got to do a little bit of work to get
your deals. However, if you follow our model, you can
literally in Tucson buy a two hundred and fifty thousand
dollars house or a three toner thousand dollars house for

(32:01):
one hundred percent of the price on MLS and cash
flow at day one. Now, when you learn to buy
it better, you make even more, which is what Andy
does for his capital investors and his team. So we
just we just we realized that the game had to
change and we couldn't do what everybody else did because
the reality is especially today, Look folks, straight up, man,

(32:25):
you're dealing with funds and institutions, most of them aren't
even trying to make a profit. Then you're dealing with
guy against guys like me who know how to make
a profit. You can't go in there and compete with
the lions. You're the gazelle, you know, It's like, you know,
we every single time you see these documentaries all the time.
You know, there's a drought in Africa again, and there's

(32:45):
this one watering hole and all the animals are going
and the gazelles all go down, and the lions are
just sitting under a tree and decide when they're hungry
and they go in, and the gazelles they all stay
together because they know if they go in one a time,
the lions are gonna eat every single gazelle. You're the
gazelle as they go in as a herd, and the
lions might pick one off, but the herd survives. And

(33:06):
so we teach you how to compete against the lions
because you're not. We teach you to go get money
millions of dollars that you can go do it. We
teach you how not to pay for the money, how
the money is in an equity position with the capital investor.
We take very extremely advanced models that Wall Street used

(33:26):
and we use them on single family homes for you
to build your own portfolio.

Speaker 2 (33:31):
You know, John, the more I hear you, you speak
and I'm an awe because there is in the last
two years, the stock market's done very very well, extraordinary, extraordinary.
And but now I think there's a lot of investors
looking for diversification because, as you know, you were you
mentioned earlier, you touched on pe, ratios are at a

(33:55):
level where it's like it's going to be hard to
repeat and hit that you know that home run again. Well,
diversification into real estate now is a time. So there's
a lot of money out there looking to be placed,
looking for that return.

Speaker 3 (34:09):
Oh absolutely. And then the other thing that you really
we're going to help you do. And if you want
to do real estate, i'd really encourage you to get
for one of events because here's the thing. I get
it because I have the same rose colored glasses. If
you live in Arizona right now, you're in sticker shock
at the price of the houses, and you're in sticker
shock at the price the rent, and you think it's
ridiculously high. However, if you take off your Arizona glasses

(34:33):
and you look at it from a national point of view,
you can literally take not just the top ten or
top twenty, you can take the top fifty biggest cities
in America. And we are just about the lowest price
and almost for sure. Just about the lowest rents our
rent are not high. They just caught up. And look,
I get it because I know in eighteen hundred we
were getting fourteen hundred dollars for a house. We get

(34:55):
twenty four hundred dollars today. But like, oh, that's crazy.
It's like, no, our rent was so far behind where
it should have been. And so you know, we have
to use that's back to our emotions. In psychology. We
can't get stuck into what everybody's saying. Who doesn't do
this for a living, well, we have to listen to
the ones who do it for a living extraordinarily well.
And so you know, NS in Arizona most likely will

(35:17):
to continue to go up. We don't have a big
crash coming. There's absolutely nothing that indicates it whatsoever. In
the United States of America, folks, there's been four crashes.
That's it. The first one, you know, this is a
charge going back to seventeen sixty five. The first one
was in seventeen ninety one, well, Revolutionary War. The country

(35:38):
was bankrupt, we were divided. Forty percent of the country
fought for the English, sixty percent fought for to be free.
So it was and there was a financial just devastation.
The next huge crash that we had in America was
in eighteen seventy three. The next one was the nineteen
thirty two, twenty nine, and the next one was two
thousand and eight. First of all, there's sixty to ninety
years apart, like clockwork. In The reason is history doesn't

(36:01):
repeat itself. People forget history and then it happens again.
See right now, there's no big crash because if people
have money, lost the third of everything they owned in
twenty ten to twelve, and they ain't going to put
their money at that risk ever again while alive. Their
children probably won't grandchildren. They'll just lock and load and
lose it again. Yeah, and so that's just where we're going.

(36:25):
And you want to learn more, go to Johnburley dot
com and you'll be up at the next two events
and so you can meet Andy face to face and
a lot of his team will be up there. And
we're really excited to be able to teach and show
people how to do this.

Speaker 1 (36:40):
And with that word coming up on another break, we
will be back in just a moment. This is Andy
Keel with the Win three team powered by Epic Realty.
And this is the Home Solutions Show on k and
ST and we will be back in just a moment. Hi,
and welcome back to the Home Solutions Show on KNST Radio.
This is Andy Keel and I'm again joined by Jerry

(37:01):
Sunt with Cross Country Mortgage and John Burley. Before we
took a break here, John was talking a bit about
changing the game and getting properties to pencil out in
today's market, one of the things we've talked about this
often in past shows, But I wanted to get some
clarity that the main program that we tend to use

(37:21):
actually creates homeowners. We're not just doing straight rentals. We're
doing a program that actually helps folks actually become homeowners,
and wanted to talk a little bit more just about
that and owner financing in general. So, Jerry, did you
have a more specific question about that, Otherwise I'll turn
that over to John.

Speaker 3 (37:40):
No.

Speaker 2 (37:40):
You know, I love the strategy we talked about owner
financing rent to own. When did John you implement that
as a strategy and was it something you learned about
from other people in other markets or was this something
that just makes sense because obviously pride of ownership is
so incredibly powerful and then hey, let's rent to own

(38:02):
because we know that they're going to have pride of ownership.
You can't even put a price tag on that.

Speaker 3 (38:08):
Yeah. So my first owner finance deal was in nineteen
eighty two and it was by accident. Well I mean
at that point, so a lot of people forget Jimmy
Carter started the interest rates going through the roof, and
my sincere prayers to his family. He was a wonderful man.
I didn't think he was the best president, but he
was a wonderful man. He popped interest rates up to
just under fourteen, and Ronald Reagan took him to eighteen

(38:29):
point six. A lot of people forget that. They skyrocketed
under Reagan, not under Carter. Carter took him up. Reagan
puts it through the roof, and again a great president.
Most of the things his administration were good, although his
legislation tax before back to eighty six was the primary
cause of the stavementson loan crisis. Eighty nine, I started
buying big rental portfolio in Phoenix. I had first six months, bought,

(38:52):
rehabbed and filled forty two houses in six months, So
first of all for me, that was really fast but
also I found was finding it was too slow. My
margins were also very very thin. And then I found
out that I thought my tenants were working for me
to get me rich, and I found out that I
was actually working for them. It was basically, you know,
I was just at there becking call twenty four seven

(39:14):
and I never had anybody moving and go like, ohy wow,
well our rental house of our dreams. We're gonna stay
here for thirty years. Most of them told me they
were saving up money for a down payment to buy
a house, and so it's just like, Okay, I gotta
do something different. I'm not gonna do flips. I'm not
doing short term. I wanted to be financially free and flipping.
Was never going to do that because that would require

(39:34):
me to work forever. So like, how do I do it?
And it's like going, okay, man, I'll do owner financing.
You know, when I started out, there was no Dot frank,
there wasn't that type of federal rigs. We did agreement
for sales is what's called in Arizona install my contract
contract for deed. We made every mistake we could in
the first couple of years, which is great for you,
because if you come to my event, you get to
pay for what to do based on not doing it right.

(39:56):
You know, we were fined the process. We were fined
the qualifying class. He actually, Jerry, we actually do more
due diligence than Dodd Frank requires. I remember the mortgine
he was going psychonic about Dodd Frank is like going,
what if you weren't doing that, You're an idiot. Our
DTI is only thirty three percent. I meaning, if you
you to have a two thousand a month rent, you

(40:17):
got to take home sick grand. If you don't, I
can't move you in because I'm harming you. I'm not
helping you. So we reverse engineered it. One of my
dear friends on this plant who passed years ago was
zig Ziggler, and there's a lot of speaker. He was
a shining beacon of light in a very ugly industry.
I spent too much time in green rooms, and there's

(40:39):
a lot of zigisms, but my favorite always was, if
you help enough other people get what they want, you'll
get everything you want. About two thirds of Americans own,
so one third don't. Of the third that don't, seventy
five percent want to own, and many can, but not
under traditional guidelines. They can't get an FHA loan. They
can't get a loan, they can't get a bank loan.

(41:01):
They either don't have the down payment, don't have the credit,
don't know how to fix it. So twenty five percent
of America is your marketplace. So think about your neighborhood.
Twenty five percent of the people in that neighborhood could
move into another home in the neighborhood and own it.
So we originally did agreement for sales thirty years, fully advertising.
The Obama administration in two thousand and twenty and fourteen

(41:24):
took live DoD Frank, which changed underwriting processes and meant
that a large number of people that we could qualify,
who common sense could pay, can't qualify under the government,
So we switched it. Now, I know there's a lot
of rent to own it and lease option things that
are two or three years. Those are done by criminals,
basically know what. No regular person in two or three

(41:44):
years is going to fix their credit and buy the
house with a new loan. They're just praying on them.
So we do ten years with a locked price, no formulas,
no nothing, ten years this is the price. Anytime in
the next ten years, you can cash me out and
get your own loan. And at the end of ten years,
because we started doing those in July of thirteenth, at
the end of ten years, if you still haven't got it,
well we'll just renew it and do it again. The

(42:06):
only reason we changed it from thirty years fully advertising
because the Obama administration said too many people owned a
home and I can't give you a house, so we
changed it. So what I do is I want the
families to win. I want to put families in who
move in, make the payments, take care of it as
if it was their own, because it is. We don't
even use the term tenant their residents. They move in

(42:28):
the owner. And the only reason we're not doing the
installment contract sale is because the federal government made it
too hard to do and I can't qualify many people
because there is no common sense underwriting. I want the
resident to win, so I learned decades ago always better
for the house to remain vagant for a month and
make the mortgage payment than put the wrong family in,
because it's bad for the family and it's bad for me.

(42:50):
We have a reasonable faha type movement. So in these
days it's eight ten thousand dollars is the movement. If
you don't have eight to ten thousand dollars, you're not
ready to own yet. That's what it is, and that's fair.
No one's entitled to own a hub. It's a right
and a privilege you can earn, but it's not an entitlement.

(43:11):
And you've got responsibilities to come with home ownership. And
so we teach a very detailed underwriting model that is
in my opinion, literally more effective than what most mortgage
brokers use. So I need to do proper underwriting so
that the resident wins and they can afford it.

Speaker 2 (43:28):
John, do you ever do classes or do you know
of classes where you teach common sense financial literacy for
an owner? You know, I think a lot of times
people when they buy a house, they fall on the
same thing that their parents did or they see their
friends do, and they don't know that they have to

(43:48):
take care of this asset that will grow in value
over time. And to do that, you have to have
a balanced budget. You can't just spend money willy nilly,
and just those basic common rules will allow them to
have success over time.

Speaker 3 (44:03):
We're teaching those very things on January eighteenth. The common
sense that millionaires use. There was a great book, The
Millionaire next Door, which actually was a research project done
by financial companies, my company being one of them. Actually
many of the clients and the research back in the
eighties were my clients from the brokerage industry, and it

(44:24):
explained how the wealthy actually live, which has nothing to
do with Instagram or social media. Most of us live
well beneath our means and don't carry any consumer debt.
We own our homes, we own our cars, we don't
carry credit card balances, which means what we're what we're
gonna teach at the January eighteenth event is literally how
in three to five years, with making no more money

(44:46):
and doing no real estate deals, just doing what you're doing,
in three to five years, you will literally be down
to your expenses in life will be insurance, food and fun,
and that's what it should be. You know, we're going
to show those of you how to vaporize your mortgage
on your single family home, and for most people it
makes sense. Yeah, And so there's a lot of common

(45:08):
sense and then some very very advanced techniques and so
We literally have put together a model for owner financing
where the client wins most of the time, because most
people who teach it, they teach you how to screw
the resident. And I've been a lot of seminars, and
some of them they're just so extraordinari level, it's beyond comprehension.
Where they're laughing about how they get the five or
ten thousand dollars down payment and the people never buy.

(45:29):
They're laughing about, how, oh, I give them a massive
rent credit because I know they'll never be able to
get the loan. They do it on purpose. Also owner financing. Look,
we got to be in the heart of America. We
got to be in middle class, class B neighborhoods. I
do nice homes and nice neighborhoods for nice people. I
don't do class C. Why because I did it, And
as Andy knows, you know, Andy, when I do something,

(45:51):
it's volume. So I have the numbers and the data
to show what works. And so what we're doing is
we just teach you, verbatim, step by step, exactly what
we do. And that program's created thousands and thousands of
millionaires here in Arizona. And we're going to show you
actually how to do it, how we do it, all
the steps, I don't hold anything back, and Q and
A for as long as you want. Go to Johnburley

(46:12):
dot com. Come up to Phoenix and see us. We
look forward to it, John.

Speaker 1 (46:17):
I did have one question from one of the listeners
that knew you were coming up on the show that
I wanted to ask. And the question is do you
prefer to be the lender on properties like the note
holder or do you prefer to be the owner of properties?

Speaker 3 (46:31):
And why both? I want both? So I want everything.
I want all the good stuff of rentals. I want
all the good stuff of owner financing, and I want
all the good stuff of notes, and I want none
of the bad. So notes are great. You get the
income every month and you don't have to manage it,

(46:53):
but you don't build up equity by paying it down.
You don't get tax benefits, and you don't get the
upside of growth if it occurs that it's not good enough.
Straight rentals. I don't want to do straight rentals because
I don't want to have to be the person spending
thirty five percent of my income streams fix and toilets,
And so I want all the tax benefits of the
rental property, which is incredible. I mean, there's so many

(47:15):
benefits to residential real estate tax benefits. So I want
the ability to have the growth. I want to be
able to pay my debt down. I want to get
a significant amount of money three percent, four percent, eight
ten thousand dollars from my resident when they move in,
so they have skin in the game and I have
capital in my hand. I want it all. We're going
to teach you there's eight steps to monetizing every property,

(47:37):
and we do it on every single property. Most people
only do two or three of them, and they wonder
why their deals don't work. Look, you can't do conventional
buy and hold and expect to have any significant increase
in your income stream for years. You have to be
more creative. You have to be better. The strategies that
worked in nineteen fifty, sixty and seventy in small towns

(47:58):
in America don't worry work anymore. And unfortunately, most real
estate education is literally teaching stuff that I learned in
the seventies and eighties didn't work in nineteen eighty, and
it sure as heck doesn't work in twenty twenty five.

Speaker 1 (48:10):
So true. So we are coming up at the end
of the show, looking forward to a wonderful twenty twenty five.
Thanks so much John Burley for joining us today. Thanks
for listening to the Home Solution Show. This is Andy
Keel again. I'm joined with Jerry sunt Cross Country Mortgage
hope to see one of the future events coming up,
John Burley's event coming up January eighteenth in Phoenix or

(48:32):
my meetup coming up January twenty third at six pm
at the WIN three office at sixty sixty one East Broadway,
Sweet two, twenty eight Thanks so much for joining us
today and we'll talk to you next week.