Wow, there is complete and utter turmoil and that turmoil is also going to lead to an apology from me. So let's talk about these in order and number one: Ever since we heard Jerome Powell yesterday suggests that we might essentially have higher rates forever. we have seen a complete dumping of Treasury bonds. We've seen the 10-year Skyrocket about 13 basis points.

We're over four and a half percent on the 10-year now. Real estate mortgage rates just skyrocketed over eight percent, leading a lot of people to believe that real estate is about to actually hit the toilet or take a massive poopsie-doopsy this winter. Black Friday This year might not be about getting a cheaper TV It might actually be about getting a cheaper house. This Christmas might be the opportunity to buy the best deal in real estate ever.

And this turmoil that's happening in real estate where people expect now, the Fed's certainly not going to bail anything out. This year, they're going to keep hiking until they break something and that break, by the way, might not be another bank. You know what? that break could actually be the entire housing market. It could be the housing market, which that's where then people are speculating.

Oh, Jay Powell and the Fed put will come in next year because you know, by March or the summer of next year, we'll be able to confirm that Yes, indeed, inflation has trended towards two percent. we're on the path to two percent already there. or they pull out flexible average inflation targeting. And what do we end up having? We have a J-pal bailout of real estate and all of a sudden you start seeing rates fall and people getting really excited about real estate again.

That's all speculation, who knows. but that's what people are believing right now. that could happen and we're seeing exactly that in the real estate market. I Mean we heard Lennar and uh, well.

Lennar the home builder talk about Boise and Austin hitting the complete uh poops and their real estate market essentially hitting a wall. Uh, buyers all of a sudden are gone. Active listings are plummeting in terms of price relative to sold comps. That's a scary mode when all of a sudden Actives are selling for less than sold.

and when we were in those markets, we felt exactly the same thing. Real estate is all about people and being local, and we're seeing it in almost every single market. Now we're starting to see it in NorCal We're starting to see it in SoCal We're seeing it in Florida The actives are starting to come in softer than the pendings. That's probably because of the normal back to school buyer demand being gone.

and now the Active listings are sitting, they're not selling and people are like, oh, crap, winter is coming. But that turmoil is also leading to this apology that I have to make because I Think because it's becoming very clear that there could be massive opportunities in real estate this winter. since the J-pal meeting, we have gotten absolutely destroyed with emails from people asking us about their investment and their ability to invest and the timing of their investment and everything related to their investments into House Hack. Now, obviously, you should read the prospectus slash offering circular that's available at Househack.com It's a fundraise that we're doing for my real estate startup at a one-to-one valuation.

Keep in mind they're obviously processing fees and other things that go into raising money so net of that. But outside of that, it's a great company and a great valuation. It's my expectation. But I think what's happening is more people are getting interested in diversifying in real estate.

So much so that now our payment processor can't keep up. that is, we're so inundated with people trying to get in that our payment processor is like whoa, whoa whoa. This is way more than we expected. We can't handle this and so now we're We basically just have to apologize and ask for time to get back to you so we expect to be able to get to everybody's situation within the next week, but it's not going to be within the next 24 hours.

It'll certainly we'll be able to have whatever questions you have resolved within the next two weeks. We don't think we're going to close the round or anything for probably at this rate for at least the next 30 days. That's the goal so we can make sure we get everybody's inquiring processed, but it's really interesting because we're seeing these crazy market dynamics actually translate directly into this demand for investing in house. Hack.

That's at least what it feels like I Can't know with certainty, but we are. Here's what we do know: We know that certain markets in real estate are hitting a wall. We know and therefore markets are. Fear saying a Paul Volcker, because what do we know, We know that there aren't going to be any cuts.

No. Cuts soon. Obviously we should put a little asterisk here because the asterisk is unless break right If something breaks then we might get cut soon. but then you have bigger problems.

TS Lombard Our famous bear. What are they saying? They're saying the best thing for risk assets is a slow decline in rates next year. The worst thing for risk assets is oh crap, we broke something in some kind of recession. This is very interesting since they're sort of your resident bear.

The resident Bayer was saying you don't want quick and Rapid Cuts Well, now we're feeling a wall hit in real estate. People are seeing that as an opportunity to finally buy real estate. but you have to be able to buy real estate. and frankly, most people don't want to pay eight percent on a mortgage.

Today we just ran the numbers on a 780 000 house which is like a regular three and two in California or maybe like a four and two in Austin or whatever. We ran the numbers on this. uh, we used a one percent 1.2 property tax rate, but we ran the numbers on a 780 000 house and we wanted to find out what would your payment be on this and how much money do you have to make to qualify for this at a 30 front end, 35 front end ratio. Ignore some of that, but assuming 10 percent down, assuming a half point in mortgage insurance which means your rate is not eight percent, it's actually eight point five percent Again, assuming 10 percent down and a 1.25 uh, 1.2 ish percent property tax rate.

People are gonna have to pay somewhere around six grand a month just to be able to buy this kind of property. There's no way you can Finance This right now people who are financing or financing this and they're underwater uh with their payments on a monthly basis if they're renting out these properties which you're not supposed to anyway, unless you're putting 20 25 down and I think what people are doing is they're speculating on the cuts. But right now the Market's going uh-uh don't plan on Cuts Right now, we're dealing with basically Paul Volcker over here is when it feels like that's the sentiment right now. So we're getting people saying you know what? Hey Kevin you do it.

That's what it feels like again. I Don't know if that's exactly what's happening, that this turmoil is leading to all of these emails and inquiries, but we're getting blown up. Obviously learn more at Househack.com and again I apologize. We have to ask you for patience when you go through the portal.

By the way, we have now removed all fees to invest. So there's no credit card fee. There's no ACH fee. There's no wire fee, nothing it is.

If you want the credit card rewards you can do that is cheaper for house hack at the moment if you just ACH or wire but that's your choice. We'll leave that on you if you want to Apple pay. You could literally Apple pay to invest right now in housing. It's kind of wild.

Uh, a quick reminder though, don't press the transact button multiple times. People are getting a lot of like. There's some cases where people are hitting the button multiple times to invest and then they see on their uh statement they'll see like minus 10K minus 10K minus 10K Uh and and then these will be pending transactions. We expect that these will end up being failed transactions and like only one will end up going through, but this will all get resolved.

And just a quick little thing that we're finding is some people are getting a little excited to invest. uh and uh, if you if you push the button too much you might end up seeing a few more pendings than you're supposed to be seeing. But again, all this kind of stuff is resolvable. It is mind-blowing to us that a payment processor that has worked with over 200 different funds or actually I think thousands of clients they say they have but I thought they've done over 200 foots I don't even know which number it is.

But the point is, it's surprising to me that they're inundated to the point right now where where we can't get all of the answers. But I want you to know our entire staff is working on helping everybody as much as possible and we really think part of this massive surge in demand is potentially because of Market turmoil. And I want to be clear about this. This is something else that we've been talking about today.

Is that really what you want to do is? and everybody says this? but nobody really does it right. Remember the phrase be fearful when people are greedy, Be greedy When people are fearful, the fear is starting. Let me give you an example. We hit up a seller because we saw the comps in the neighborhood were somewhere around 570 to 600 000.

So we're like hey, maybe we can pay around 570 for yours. It doesn't need that much work. if it's worth six, we put 30k in it's 100K wedge. you know we were just spitballing and uh so I was like okay, yeah, we'll take it.

And one of the first things I usually do when I when somebody's like oh yeah yeah I'll take your offer as soon as I think that I'm like, hmm sounds like I'm overpaying. Let's offer less which is just part of the game, right? So that seller said, you know what? Never mind, we had a closer look at some of the active comps. There's actually some active competition that's not selling at like the 550 level and we're worried if they end up selling for less and that really caps what Our Wedge is on the deal and so that seller's been reaching out going. Okay, okay okay okay, how about uh, we sell it to you? Well, that's the comp value.

So they come back and they go. How about we sell it to you for 460. can we do a deal at 460. you said 470? How about 460.

no no no no like we're like in the low fours like no, we can't go down that low but you know what we can do for you 450. didn't talk to him for a few days. Kevin How about 4 30. and now like the agents reaching out going should we write it at 4 20.

it sounds like there might be an appetite to go for that. I'm like this right here has not happened since 2010 for me. and I remember this happening because we actually had sort of a double dip recession. Uh, it was nominal but it was basically you had your your that's not really double dip.

it's more like that. There you go. So you had your 09 0809 crash, then you had a little bit of a recovery and then all of a sudden an oh like 10. You kind of start getting this crash again which bottomed out in 11 at least in our Market out here.

And that's when I felt this kind of stuff where the sellers are just like please I need to get out of this property nobody else wants to buy. That's the time to buy. And of course you have to insulate yourself with wedge, right? That's the beautiful thing about the Wedge is when you buy a property that's in a 550 000 neighborhood, let's say, instead of six, let's call it 550, you buy it for four. you're into it for I don't know 4 30 because you could put 40, 000 or thirty thousand dollars into it.

Let's say now, you have a hundred twenty thousand dollar wedge, right? So you're into it. For 430, you're in a 550 neighborhood now. All of a sudden, the market drops I Don't know. Ten percent.

Let's say that's 55k 20. That's a hundred and ten thousand dollars. Well, if the market drops twenty percent, twenty percent decline. What does that get you to? That actually brings you down to 440.

look at that market could drop 20 in that case and you are still positive on the deal. Those are the deals you want to be buying this winter. Unless of course you think the pain of the real estate crisis will last even longer. And this is where you also have to be vigilant.

You know, if I go into November and everything's doing this, you know you don't want to catch a falling knife either. You don't want to go all in, you have to be patient. all the cost, average. but anyway.

Uh, that's our job. We do this on a daily basis. If you want to learn more, you can email us at IR Househack.com But I Want to be clear? This Treasury Market disaster where we're seeing potentially the uninversion of the yield curve I Think we're only about 59 basis points inverted right now, which is almost half of what it previously was. That's usually the painful part, by the way.

Don't worry about that if I lost you. But the point is, if you want to invest with us, go to Househack.com Learn more. Read the prospectus. Obviously there are obviously risks.

it's a startup, but we're doing our best to mitigate those risks. We believe this interest rate turmoil is leading to this massive inundation of emails. We're getting a lot of people very excited. They're like Kevin Kevin I I Want to invest now? I Don't want the round to close.

We can take your breath. We should without a problem or without a doubt have 30 days here. So we're good. We'll get everybody resolved.

so I just want to give everybody that confidence that faith that yes, this Market uncertainty appears to be at least leading to some more interest in House Hack. and I want to apologize that we can't get back to everybody instantly as much as we would like to and there's a limit to how much control we have given that we have a payment processor involved and so we're working with them. We'll work 24 7. but you know other companies are working normal business hours so we're a little bit strong uh, or stuck or by the parameters that they're working and that's okay.

We'll get it all resolved and we really thank you for your interest in House Hack. And quite frankly, I wish you the best out there on the market because it's a wild time and I'll tell you it's Times Like These that make you want to diversify anyway. Thanks for watching. We'll see in the next one.

Bye.