This podcast interview of Neal Bawa is hosted by Paul Moore and Josh Thomas of How to Lose Money Podcast

How to Lose Money by Not Being Prepared for the Apocalypse with Neal Bawa

by Neal Bawa | How to Lose Money

Neal Bawa is the mad scientist of multifamily. Besides being an entertaining speaker, Neal is a data guru, a process freak, and an outsourcing expert. Neal treats his $200 million multifamily portfolio as an ongoing experiment in efficiency and optimization. The mad scientist lives by 2 mantras. His first mantra is that we can only manage what we can measure. His second mantra is the data beats gut feel by a million miles. These mantras and a dozen other disruptive beliefs drive profit for his over 500 investors.

INTRO: Welcome to the most important podcast of your financial future. Today we’re going
to teach you how to lose money, pay attention because these are the most valuable lessons you’ll ever learn about creating wealth. Let’s get.

PAUL: initial jobless claims this week the week of March 25th 2020 rose to five times their record level in US history hi welcome everyone I’m Paul Moore.

JOSH: and I’m Josh Thomas how to lose money is a podcast where we discuss defining moments of success through distinctive stories with failure of failure with business owners, investors and entrepreneurs.

PAUL: today our guest is Neal Bawa who’s going to tell us how to lose money by not being prepared for the apocalypse hey Neal.

NEAL: hey there Paul great to be back on the podcast thanks for having me.

PAUL: yeah this is a special episode and josh is gonna take it from here and tell us what is going on in our show today.

JOSH: so yeah normally we we kind of go through a single failure and and we extract some lessons from that but at this moment in time in history the entire planet is struggling with the same thing with the global fallout and the economic impact of the coronavirus and so there are a lot of health issues and health concerns and there are also a lot of economic stability concerns and everybody’s running around like crazy well while they’re sheltering in place of course of course but you know there’s there’s a lot of questions and not a lot of answers and so we’re bringing Neal onto kind of talk about this a little bit and so so Neal will kind of dig into this a little bit in a second but just kind of give us you know if you were to sum this up in one sentence what’s happening right now?

NEAL: I think it’s a failure amongst our part amongst every nation on earth to anticipate a pandemic I you know people call this Black Swan I say it’s a failure to anticipate a pandemic given that this is not the first one.

JOSH: hmm so and so we’re gonna we’re gonna kind of dig into what that means to us here in a minute but Paul Tell us a little bit about our guests today somebody that’s a you know Well-known good friend of both of us.

PAUL: yeah Neal Bawa is the mad scientist of multi family besides being an entertaining speaker Neal bow-wow is a data guru really is a process freaking an outsourcing expert Neal treats his 200 million-dollar multifamily portfolio as an ongoing experiment in efficiency and optimization the mad scientist lives by two mantras his first mantra is that we can only manage what we can measure his second mantra is see rule number one I’m Just kidding his second mantra is beats gut filled by a million miles these mantras and a dozen other disruptive beliefs drive profit for his over 500 investors Neal we’re so glad you’re on the show before we jump into this I just finished a mastermind call with some of the smartest multifamily guys in the country people we would all know including Michael Blanc and reboots what do you think is going to happen if you had to predict it’s so hard but if you had to predict what’s gonna happen in your 200 million-dollar multifamily portfolio what do you think is gonna come down the next few weeks you can just give us the same answer there.

NEAL: um so I’ve got some earthly indicators and I’m gonna use that early indicator one of our properties floated a $75 early payment you know if you if you pay your payment early they will give you $75 and I would have predicted day before yesterday that only about 20% of the payment the tenants were taking you up on it and I was stunned to see that 70 percent wealth the the the tenants basically took that option stunned rights if anything I have been more bearish than that so I was surprised by that so we rolled that plan out 30 minutes ago to every property that I had but it gives me more hope than I had yesterday it gives me more hope that kept their tenants will pay at least the April rent I’m more worried about April rent than March than my rent because in April they don’t have any of this free money from the government right so at this point if it’s a family of four they get 3400 dollars from the government the government’s saying they’re gonna get it there by April I don’t think so I think it gets there by the end of April Because the Treasury Department says end of April politicians say beginning of April so I know who to believe in it’s no to me I think that the impact on our portfolios in the short run is going to be fairly devastating there’s no easy way to sugarcoat it but throughout this this podcast I want to keep pointing out that we cannot compare this to 2008 2001 or anything else out there the easiest the best the simplest way to compare it is there’s a hurricane it’s a category 5 an instead of hitting one city in the US and shutting it down it’s shut down 50 states or close to 50 states at this point one half of our population 51% is now in shelter in place or quarantine so it’s essentially shut down half of America and heavily damaged the rest of America because even all of those places have social distancing going on and as a result what is actually happening is that we have frozen the American economy for the months of March April May some people say three months I think it’s four so people slow 12 the theme true but I believe that technology and an innovation is going to kick in and we’re gonna be able to partially restart the economy and we can talk about those as well because the problem is the media knows this if you give people good news they to tune out if you give them bad news they keep watching so what I have seen it has a very strong tendency yeah you know if you look at CNNI mean 95 of their articles are about the bad news but they don’t share the good news that is also happening at the same time for example did you know Paul That the FDA yesterday approved a very simple 60 cent 3d printed device that you can attach to just about any ventilator and it turns it into four ventilators what it’s it’s 3d printed device you plug it into a standard ventilator and you stick in four hoses instead of one one ventilators now for ventilators the FDA approved it as an emergency approval of course but at this point isn’t it better to have a small chance of malfunction where four people could be saved instead of one so that’s good news that’s innovation at work so keep in mind that America is unquestionably the most innovative nation on earth so to me I Think that the the long emergency is four months and it’s March April May and June and by July we will figure things out did you also know that we’ve now we haven’t found a vaccine yet we will find it at some point God knows when but you know we found something that is actually very powerful we found a way to test to see if you’re immune and we found a way to do it for ten dollars so I believe that by July we will have tens of millions of tests where you take a test it’s a finger prick and it tells you if you’re immune and if you’re immune then you can go back to work and if you’re a health professional that’s immune you don’t need the masks anymore because you’re immune.

PAUL: how do you know you are immune I mean I mean I get it that you can have a higher level of immune system.

NEAL: you’ve already gotten it not shown symptoms so keep in mind that sixty percent of the people that get this don’t show symptoms and if you got it didn’t get tested during the 15 days that you had it then you already had it and you don’t know right and you didn’t show any symptoms so you are never going to know unless yet there’s a test that shows you that pricks your finger and says ah this guy has antibodies for coronavirus in his bloodstream therefore not only is he immune but for the next six months he cannot distribute the virus to other people that’s good news even though they correct it all of this is conjecture but some of these things are happening this device that I mentioned the 3d printer device was invented by a hospital system in one of the most affected counties and so I’m pointing out that human ingenuity and American ingenuity will kick in over the next four months so I think a four month hurricane and I don’t want to call it a category 5 I’m gonna call it a category 6 because nothing like this has ever hit us and so to me the big question is you know can be survive the next three months or the next four months I think that the stimulus bill check off a bunch of boxes there I do think that I have to say this have you ever seen Congress move this quickly I mean they didn’t do do so in 2008 they had a very tiny bill in the first few weeks and then it took him a few months to come up with the next step but this bill they started working on it 14 days ago and today it’s likely to get the president’s signature so I think that I have to say and I’m usually very nasty when I talk about Congress but in this instance I think they’ve done their part the other thing is I mean if you look at
the Fed instead of doing what the fed’s a Federal Reserve always done which kind of stagger and slowly move on steps I think they threw the kitchen sink they went around the house they ripped out
all the other sinks they ripped out all the plumbing and they threw it all at once because they realize that this thing is different from every other enemy we’ve ever had and that is because and I want to state this this is I think the most powerful thing that I’ve learned about the coronavirus human beings think in linear terms 1 then 2 then 3 then 4 then 5 so by the time we get to 5 the virus gets to an astonishing number because the virus is not linear it’s exponential right which means it goes 1 10 100 1000 10,000 so in the time that human beings have gotten the 5 the virus has gotten to 10,000 and I believe that the people that understand the exponential function are the people that fought these kinds of pandemics before Ebola and SARS and Mars most people keep drilling it into the politicians that you cannot react normally because this thing grows very fast so imagine an adversary that was fighting you in 40 50 countries two weeks ago and then it was a hundred countries and then it was 150 and now it’s 193 today 193 countries and in each country it doubles every three to seven days in size so you’re fighting Godzilla only Godzilla is 3 to 7 3 times as twice the size in 3 days right and in some parts of the US twice the size every two days so I believe that we are beginning to understand that an hour respond rates are improving as a result of that and that’s why we have Congress that has passed a law in two weeks.

PAUL: Right so I was on the phone with a friend from Shanghai and Hong Kong the other night we had a conference call and they said that we’re crushing the US and they’re both Americans by the way they said we’re crushing the U.S. here in China as far as fighting this because number 199 and this is their number I know if it’s true 99.999% of people are wearing masks and really social distancing and second we built two hospitals in Wuhan in ten days each America can’t even get a architecture plan you know a permit in 10 months far less ten days what do you say to that Neal?

NEAL: they’re right I think that that their point is well-taken that that’s what China did my point is do we need to be that fast to avoid apocalypse and the answer is not here we’ve art chart already if you look at our curve upwards is passing China where it was at the 80,000 point you know they didn’t go beyond 80,000 because it just abruptly slowed at that point for them we’re passing that point so it’s not like we’re gonna end up with 80,000 infections we might end up with 250,000 we might end up with 400,000 point is that’s not the apocalyptic point we actually have more time for a number of reasons and we are reacting the other thing is that if we end up doing ingenious things like turning you know every ventilator into for that buys us more time so we are doing things that will buy us more time are we doing it as well as either China or or Hong Kong or South Korea or Japan these are the four leaders these are the people we have to learn from right South Korea for sure but you know Japan you look at them they’re they’re doing really really well so right now I mean on I built a website because I’m I’m absolutely fascinated it’s a morbid fascination by the way with this thing so I built a website from scratch called coronavirus real estate calmon this web website each morning at 8 o’clock I publish that daily growth rate for 8 countries in the world as being one of them and and so what that website shows me every day I mean I have a virtual assistant that updates it in the morning before I get up and so I go and look at that and it shows me how every part of the world is doing with this and oddly enough I’m more bullish that we will beat this thing than other people because I have access to this data so you know I’m gonna read off some of the numbers that are are are on there for today right because it’s been updated for today so the United States has average daily growth rate of 28.7%
a five-day growth rate in infections it leads down to 9.6 Spain is down to 18 point one South Korea 1% Iran 6% and the United Kingdom is down to 18 Jeremih Down to 13 here’s what I can tell you here’s the good news in every single case all the numbers that I’ve mentioned to you those five-day rates are lower than the five days before all eight instances and one of those include China by the way all eight instances the five-day run rate is grower than a four days is lower than the five days before that and
here’s the real good news the one-day rate yesterday in every instance was once again than the five-day rate it’s already slowing but we can’t see it because everyone is just looking at the number of cases everyone’s looking at number of cases and I’m telling you Paul The number of cases is not relevant it
will always grow faster because you know it’s affecting more people but you know what it’s important the only number that’s important is what is that the growth rate it’s daily growth rate because if it stays at 25% it’s gonna kill us all but the good news is our 30-day growth rate is 33% our five-day growth rate is 28% our one-day growth rate is 24%so even though the u.s. is doing a piss for a job compared to all of the other countries that I just mentioned it’s slowing at the same rate so anyone that thinks that social distancing is not working is welcome to go to coronavirus real estate there’s no forum by the way we didn’t this website doesn’t capture your information it’s never designed for that just go there the graph is right there right go there scroll to the graph and look at it the data is very clear social distancing works and it appears to be working at the same rate in all six countries actually all seven South Korea is an odd one out because they do things differently we cannot use them as an example but Iran Right where Iran’s daily growth rate was so much higher it was 53% on March 1st today it’s dropped to nine even the
United Kingdom which we’ve loved bashing was as high as 41 percent on March 5th today 18% point is I came on the show and by the way I was the gloom doom guy posting videos on the web four weeks ago
saying this is much worse than people think and it turned out to be much worse than people thought but I’m also pointing out today that the data today is not showing gloom and doom right watch my video on March 11th and you’re gonna say Neal you were just horribly gloom and doom my point is in the last 15 days the efforts that we’ve made are bearing fruit but no one can see them yet because you’re not tracking the daily growth rate and this chart tracksuit everyday the United States daily growth rate is there it’s dropping for sure and what’s nice is it’s dropping for every other country as well this methodology unquestionably works and based on this we will peak within the next 30 35 days.

PAUL: so let’s let’s kind of thank you for that it’s it’s great to have a clear view effective and but data in science to back something up and really appreciate it it’s very difficult to get any reliable information because we all live in our own echo chambers to a certain extent okay so let’s talk about two things Neal you are anticipating that we have four months of serious fight ahead of us and then we have a period of recovery after that so my question is if you are a business owner or an investor which is the vast majority of our listener base if you’re a business owner or an investor what are you recommendations for the next four months and what are your recommendations for that recovery period that comes after?

NEAL: depends on your beliefs I am now that data tells me today that we are going to beat this thing and I didn’t have that data to support ten days ago I mean if you actually look at that chart on that website and scroll up ten days ago you would have seen why I was so depressed and why I didn’t think that we would beat it but the last ten days of data shows that we are going to to beat this thing and yes it’ll come back and we’ll have partial shutdowns this is very much a two steps forward one step back think but if you are like me and you believe that over the next four months this is going to resemble the greatest hurricane in history well then the rebound from hurricanes has always been very quick whether it’s tourism whether it’s travel it rebounds from these sorts of events has been quick yes this is different in that it still will be infectious back by then but we will have taken a number of other measures I absolutely believe that between now and the end of June we will find a number of methods that we don’t have today to slow this thing down not to kill it but to slow it down and I Mentioned some of those one of them is the plasma transfusions if you take plasma from people that have been infected they have antibodies you inject them into somebody that’s sick and is in a hospital they recover much faster much faster right we will find people who will donate their blood and we will inject plasma into people I expect that by the end of June we’ll have you know hundreds of thousands of people being treated using plasma and by the way that is a proven methodology because it’s not new to coronavirus we’ve used plasma infusions before we’ve just never had the need to use them at a mass scale so going back to me looking at this as a four month hurricane I see q3 as a time when every kind of real estate asset is likely to have lower prices why the commercial market is free I mean at this point it’s free you might think that interest rates are low they’re not take a look at what’s happened to interest rates in the commercial market over the last 10 days they’ve gone up they’ve gone about a great deal no and also Fannie Mae and Freddie Mac are putting brand-new restrictions on us including requiring 12 months of mortgage and insurance as an impound which means that for a 20 million dollar project we now have to raise a million to more in equity so to a million somewhere in that range yeah it for a 20 million dollar stock boy now .

PAUL:I think Freddie and Fannie expanded the raids because of the extra risk premium right?

NEAL: Correct! I mean at this point the Fannie and Freddie are freaked out themselves they want to make sure that they do not go into receivership right so the government took them over in 2008. They’re afraid of being going into receivership so they’re taking aggressive steps not to find stuff, so the credit markets especially when it comes to commercial real estate are sort of frozen right, so everything’s slow loans not going through 50 percent of deals are being retreaded and a large number of people are just walking away even with their earnest money lost, so that the markets are in flux and I don’t expect that to change remember this is the hurricane in the middle of a hundred or 200 mile an hour hurricane. How many transactions do you really do that’s what’s happening we are in that 200-mile hurricane there’s no I in this hurricanes everyone’s in that in that process that’s that’s where we are my point is you still have to look at it as a hurricane because when it passes it really will pass I’ve no doubt that we will find out wave found ways of bringing our workers back to work ah and and still reduce the impact and there will be people still dying in June and July and August This I have no doubt in my mind but by that time its impact by that time its impact could be closer to the flu today of course if we treat this like the flu it’s it’s the end of the world right so so the math does not allow us to treat it like the flu today but I think that we will find ways of doing that four or five months from now in restarting the world economy I think this is a this is not a plan shutdown of the US economy people keep saying that my I keep pointing out to them this is a planned shutdown of the world economy 1.3 billion people in India went into quarantine today and you know how harsh their quarantine is every two days they have three hours to leave their houses buy grocery a a siren goes off they have three hours to leave and a siren goes back on three hours later and if you’re caught on the streets while while you’re in in curfew they immediately put you in jail wait is that the same three hours for everybody or is it rotating it’s it’s rotated for different parts of the city so you have you know time to go out and not everyone’s kind of rushing out all at the same time and India is also keep in mind people don’t go to the supermarket in India there’s there’s these vendors that come outside of your house so it’s less of a an aggregation issue than the US it wouldn’t work here in the US to do that we would have to do rolling hours right so the point is on March 11th when I released a video saying the United States will go into quarantine within within 30 days I have never been laughed at so much I mean if you go back to the YouTube video the people that were laughing at me were were ridiculous they thought that I was a total idiot and they made it political like I’m actually a very apolitical person but they made it very political they said that you must be a liberal Democrat because you’re saying this and it’s like I’m a data scientist there’s a difference right here so to me the math was very clear now 15 days later 50% of the United States is under an effective curfew and the remaining 50% it’s not at this point a doubt as to whether we go into curfew that is it given it’s a question of when and it makes sense right so I’m one of those people that says you shouldn’t put an entire country in the curfew don’t do that roll the curfew as you need because not every state is in the same place New York is in a company completely different place from Idaho so in a different Excel spreadsheet which I intend putting on the same website we’re now tracking U.S. states and their daily growth rate because doesn’t that make sense right to track to see where’s California I can tell you of all the states in the US the one that is now in the best place is actually Washington State with Washington State It’s the only state where the daily growth rate is under 10 percent a day why because they started this right it was where the first epicenter they were the first one to control they were the first one to tighten and so at this point they’re better off than every other state in the Union POP and that makes sense whoever starts first and first that’s what we’ve seen so far so Italy is at 8%I expect the U.S.. to be at 8% two weeks from today right so well our daily growth rate for yesterday was twenty four percent twenty four to eight seems like a long way but keep in mind that two weeks ago Italy was at 24% so it takes about two or three weeks of quarantine to drop from 24 to 8 and at 5% you can start treating it like the flu you know why a five percent daily growth rate also has to keep in mind that five percent of the people are are that were sick are no longer sick we’re infectious and are no longer infectious so you’re just replacing people on hospital beds not having to run and find more hospital beds so a four where 4% is better a 4% level is actually sustainable the world will actually figure out how to do this math put it on website and start to restart our economies we are going to play a dangerous game and it has to be played in kick-starting the economy knowing that our interaction rate will increase but we’re going to figure it out right I Have no doubt in my mind that someone will come up with a formula put it on a website and say here’s how we’re gonna restart the economy maybe the oh god no I I think that the CDC has marvelous you know people that have dealt with exponential functions so going back to the original question though I think that q3 is a recovery quarter I think q4 is an e is also a recovery quarter the only thing that I would like to say is that I am beginning to see people seeing real estate back where it was in February the people are saying well by q4 we’ll be back there Paul That’s not possible because we took the world economy is taking a 10 trillion dollar hit you can’t be back to where you work you’re still gonna go back to maybe 80 percent of where you were right so going back to where you were that’s that’s two years out right Oh at least maybe three right.

JOSH: What do you say Neal to people who may be either invested in property now or are considering investing that are kind of scared?

NEAL: my honest answer is this you do not have better alternatives your choices are actually restricted and in an art sort of a way and real estate is actually showing to you why it’s superior to the stock market you’re in the stock market depending upon which day you look you’ve either lost 30% or 40% of your money at this point for the month of April for the month of March I have the same net profit in my communities that I did last month the same net profit nothing changes right now things are going to change next month I know for sure I’ll have higher delinquency I’ll have lower payment but also keep in mind that it’s been proven it has been absolutely proven and you will see this in 30 days and you know call me out on this if I’m Wrong thirty days from now beyond food rent is considered to be the second most important thing that people apply money to we are about to give a family of four$3,400.

PAUL: what about Netflix?

NEAL: oh yeah that’s right so now we’re at number three Paul is completely correct so it’s food Netflix and then further then then rent I stand corrected the good news is Netflix is still gonna be only ten bucks a month next month right so so so so we’ve got some money left work for for rent Paul so great point so to me though I think that we’re not going to change people’s fundamental opinions of what is important simply because of this event I know it’s a catastrophic effect people will will still apply some of the money that they’re making and they’re making money in three different ways keep in mind right and now I’m reading off the stimulus bill number one we’re sending them thirty four hundred dollars for a family of four you know we’re sending them you know about you know twenty four hundred dollars for a family of two so they’ll apply some of that ruined second there’s unemployment insurance which is the most the vast the most the largest expansion of unemployment insurance in the history of the world because we’re not the only ones doing it the Brits are doing it to right the French are doing it too so it’s there’s four months of unemployment insurance and the third way that people are going to benefit is that two hundred and fifty billion dollars is going to be given to companies that were laying people off the airline industry the cruise industry the hotel industry is receiving a separate two hundred and fifty billion dollar injection and that injection will get to them in early april i don’t believe we can distribute money to 300 million people in april that’s just it’s it’s an impossible task but i do think that we can distribute money into 2000-3000 businesses at risk very very fast and so that injection of 250 billion dollars into distressed restaurants distressed hotels and and and distressed Cruise Lines and Airlines and in ho and airports that’s very quick so three different ways money is going to get injected in and I think that you know roof over your a head which is multifamily or roof over your stuff which is self storage is going to be high up in the list for people.

PAUL: well said and if I can kind of summarize we really need to you know hunker down during the hurricane and then when this when this starts to blow over in the next four months let’s say June or July that’s when we come out and start rebuilding but have conservative expectations that things aren’t going back the way they were for a couple of years.

NEAL: correct but I do think that there’s going to be appoint two or three years out where the impact of this will have you know rich gone to net zero and I think maybe two years out maybe three years out who knows how many years out the impact of this this is a catastrophic event and we will get over it we will get through it and move on with the with the world economy and we’ll find ways around it so that it doesn’t impact us as much as we think I think that the worst case scenario that has been mentioned a number of times is to bearish and keep in mind that people were predicting in 2008 that the Dow Jones would go all the way to 2000 stopped at 6,500 people were predicting that home prices would fall 70% they actually fell 29% the problem is people do not keep two things in mind number one mentally people are just number two institutions whether it’s the Fed or Congress also adjust and and as a result the whole economy once it’s given a certain amount of time to adjust will find ways that is my belief and I’m already seeing you know that happen we are talking about Italy being a human crisis and it is I mean they’ll they had 800 people died yesterday but they’ve also gone from 24% infection rate to 8%just check out the Excel spreadsheet and they’ve done that in two weeks between March 10th and March 24th their daily infection rate went from 24 percent to 8 it’s possible and to be honest we can say we’re not as good at China at this I think we’re better than Italy have you been to Italy that place is chaos I Think we’re better than Italy.

PAUL: Neal just kind of final questions here to wrap this up if if I’m a new investor or I’ma new entrepreneur or a new business owner is now the time to start something or is q3 the time to start something or what what do you what do you suggest if if we’re trying to get into the game should we do it now or wait?

NEAL: this is the best time to get started q3 is not the best time q4 is not the best time this is now the best time some of the greatest companies in history started in the worst times when Microsoft started and look up when Apple started and look at the conditions that were that happened then this is a great time to get started you tell us quickly do you remember both of them started during the oil crisis in in 1976 when when there were tens of millions of jobs lost and was it was a it was a very scary time right because we thought we were going to go war with the with Saudi Arabia over oil so it was a very scary time but bosz company started them my point is starting today it has no downsides oh no it’s no downside totally agree right and you never had that you didn’t have that in February because you were thinking oh if the market is too high for me to start well nothing is too high right now.

PAUL: like we’re all very close to Michael Blanc we all love Michael Mike when I were just talking about an hour and a half ago and he said and as I’ve heard from other people that the coaching programs out there have just dried up and Josh this is very close to home for you as well wouldn’t this be the time to get the coaching get the training listen to the podcast read the books and be ready for the second or third quarter?

NEAL: absolutely. I’m not sure about the second quarter but the third quarter will represent quite possibly the best deal you’ve seen since 2014 yeah I mean that well I’m not sure whatever I don’t think that this event is as catastrophic as 2008 so you mean there’s no credit please in the market right now because of the liquidity being pumped in by the Fed but I see I see a substantial opportunity but I’m not surprised with what Michael is saying because that is just a mental reaction people say all bad things are happening so I don’t want to invest in my education and they’re doing it at the exact wrong time so I Think that’s just a mental attitude right now is the best time to finish your education and get into the game because you you can actually call a seller in q3 and get a phone call back you can call a broker and get a phone call back you can you can make 10 offers and have all of them below balls and still be in 3 beste and finals none of that you had a chance on you can you can go you can make an offer without earnest money what have you been able to do that recently we can make an offer without artist money going hard on day one.

PAUL: and for those of you who don’t know what Neal’s talking about it’s been the case for Neal and our company and everybody else trying to buy multifamily for at least five years now that there are investors putting let’s say a million dollars down nard fundable yeah they make an offer and they’re beating the socks off of everybody else because that’s before they do any due diligence and due diligence is a formality well that’s all changed already in just two weeks.

NEAL: yes absolutely changed and no one at this point is looking for money to behard you’re gonna have sellers give you 30 extra days maybe 60 to raise money right so it means you’ve got such an incredible number of advantages in q3 of this year compared to q1 of this year that the if if the world was a logical place Michael blanks program Blanc Blanc program would have twice as many people today.

PAUL: Yep that’s right and so for those of you out there thinking about getting some training I want you to call Josh Thomas right now Josh Josh net and I want you to also call me Neal how do people get hold of you.

NEAL: we are very committed to talking about this and doing different things so we did to eben ARS this week and we had 500 people each and unfortunately we can’t have more than 500 cuz our zoom license stops at 500 and then we have a town hall on Monday where we’ve called in experts we’ve even called in people from the ground so we have a person that’s in New York that is running a a critical care facility there that’s going to be talking about what he sees on the ground and so that we have a town hall on Monday and then each week we’re gonna be doing a separate webinar on one aspect of the of this crisis and next week we’re gonna be drilling down into the two trillion dollar stimulus bill so all of that

PAUL: very good. Neal Bawa timely and potent message thank you so much for sharing this we are recording this on March 26 this should be published by Monday the what is that the 30th 31st something like that they’re so very very timely and relevant information and you know just kind of final thoughts you know what are we obviously in q3 we’re looking for opportunities what do we do right now?

NEAL: don’t freeze study build your broker relationships this is not the time to freeze you already did that back in 2009 and then you kicked yourself over it for that leg next six years do not repeat that mistake right stop looking at this there’s blood in the water they will be blood in the water in q3 I promise you you can either be a shark or you can be a tiny little fish.

PAUL: Yeah and as you know Neal I’m writing a book called Warren Buffett’s rules for real estate investors and ofcourse one of the second most famous axioms from mr. Alford is you know be fearful when others are greedy and greedy when others are fearful andHoward Marks wrote a great book that Neal and I think you and I both read mastering the market cycle and Mark says if not now when and a reporter said wait you mean you’re selling right now right this was no buying bodies Nate and he said what I’m buying if not now when yes yes Howard Marks made billions from.

NEAL: yeah I want to leave you with it with this this thought so you know I want to tell you about the stock that I Purchased that that I Purchased Yesterday and the stock is called Royal Caribbean cruise lines and I have studied cruise lines for a while and I Know that they’re going to have a bloodbath this year and I know that they’re gonna have a bloodbath next year but this stock delivers a massive amount of profit every normal year and a year from today or two years from today or three years from today when it goes backup its down 78 percent this is the time to buy.

PAUL: hmm well strongest absolutely true Howard Marks just to kind of just round that throughout he said do not wait till it hits the bottom because if everybody knows it hits the bottom everybody’s gonna take a deep breath and say well hold on wait wait wait wait maybe I don’t want to sell maybe I don’t want to take a discount you’ve got two and I think you’ll know this term catch a falling knife yeah anybody can pick up a knife off the floor without getting cut even a child but it’s very hard to catch a falling knife and that’s what we’re gonna see in the third quarter I completely agree with you Neal>

JOSH: excellent so Neal Bawa to learn more and keep in touch with all the updates about the coronavirus you can go to which is updated daily with what’s happening in the world and how it’s impacting there were also several videos with some commentary about you know how this will impact your real estate portfolio and in business in general you can also learn more about Neal’s multi family education by going to thanks again so much for joining us Neal we’re gonna wrap up here Paul any kind of partying thoughts before we wrap?

PAUL: I think I already gave my friend.

JOSH: very good so stay safe out there this is our kind of special edition of how to lose money and you know don’t be don’t be too scared don’t hunker down too much and get out there and make the most of this opportunity so that you don’t kick yourself later.

PAUL: and Josh oh I do have one more comment how do people get hold of
you if they want to get some good training on multifamily and commercial real estate.

JOSH: sure so you can reach out to Neal he has a website and then we were talking about MichaelBlanc earlier if you’re interested in discussing anything related to Michael And his training you can reach out to me directly

PAUL: all right thank you so much Josh, thanks Neal thanks guys. this was fun it was fun we’ll see you all next time at how to lose money.

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