Buying Real Estate Was My Worst Financial Mistake

0:00 Put it in chat. But Ish, we got to have a conversation. Me and you got to have a conversation. And Ian, I want your take on this too. The time has come because let's have this. Let's talk about having uncomfortable conversations. Stocks is a better wealth building generational tool than real estate. And it is by a long shot.

0:19 Real estate has drained a lot of people financially and real estate so far has been my biggest mistake as far as this dumb ass home that I'm building.

0:30 You're going to quit saying that too.

0:31 I'm not.

0:32 No, no, no, no, no, no, no. I should have made a call in July after.

0:37 No. No.

0:38 Listen.

0:38 Rashad.

0:39 Troy.

0:40 Troy.

0:40 I'm potting. I'm potting.

0:42 No, no, no. I'm potting. Not when they get to clipping.

0:45 I'm potting.

0:47 Yo, let me ask you.

0:48 No, you're not.

0:49 Let me ask you two things. I'm going to ask you two things. When we say.

0:55 stocks is a better financial vehicle than real estate. Are we talking about for the common man?

1:02 Yes.

1:03 Yes.

1:04 And I don't want to have this conversation. I've avoided this conversation with you for three years. Yes. In terms of return on cost basis, short term, long term.

1:12 It's not true.

1:14 How?

1:15 I'm about to tell you why.

1:16 How?

1:17 I'm about to tell you why.

1:18 I'm potting.

1:19 When you start talking about the common man doing it on their own.

1:24 They got me. If I made you money, please put yes in chat. I don't even want to do this.

1:27 And that right there is not the common man. And that's my point.

1:31 I'm talking about somebody, look, somebody doing this on their own, not somebody that has a financial advisor that, Or somebody that's telling them that reads charts like it's fucking ABCs directing them where to put their money.

1:42 Index funds.

1:43 That's not the common man.

1:45 The average person can invest in an index fund or ETF.

1:49 10 years ago, 15 years ago, I would say you're 100% right. Oh, and I was about to say that too. No, you took the words out of my mouth. Lately, these markets have been some.

2:01 Some of the highest alpha generated markets of all time.

2:05 So now that conversation has shifted. But historically, you can't tell me that the stock market was giving you 9 zillion percent returns on your money.

2:15 Historically, even at 15 percent. Historically, the stock market has outperformed real estate.

2:21 If a real estate investor made 15 percent on their money, they jump off a bridge.

2:25 Let's be clear.

2:26 Then you should come over to indexes.

2:27 Let's be clear.

2:28 If a real estate investor made 15% on their investment, they would jump off a bridge.

2:33 So how much is a real estate investor making on their investment?

2:36 It depends on your region. Number one, it's regional.

2:38 Okay.

2:38 So I don't want to... New Jersey? Yeah, New Jersey.

2:42 New Jersey.

2:44 A couple hundred percent.

2:45 A couple hundred percent.

2:46 Over what time frame?

2:48 What's the time frame?

2:48 A year.

2:49 Give me a flip.

2:51 Okay. Okay.

2:52 What about Midwest? Let's take Cleveland... Their numbers are different. We're going to say Cleveland. I'm a little familiar with Cleveland. I can't say Chicago. I can't say these other areas.

3:02 Today, 2026, you could go buy a two-family house in Cleveland for 15 grand.

3:07 That's your buy-in. Okay.

3:09 You could sell said house for $ 90, 000 in less than a year. Now, let's... And you could put 15 in it.

3:17 Let's break this down. Because you said something like there's a barrier of entry that's difficult for people to get into the stocks. I would argue that it's way more difficult to get into real estate. Let me finish. All you got to do is you don't even got to watch Market Mondays. You just got to have a half a brain and you can easily open up a Robinhood account or E-Trade or any brokerage account. And you can invest in QQQ, which gives you all the technology companies.

3:45 You can invest in the S & P 500 and you can put $ 500, $ 1, 000 and whatever you could put in.

3:48 Easy. Easy.

3:53 Easy. You could. I'm not disagreeing with you.

3:55 Buying a home is like, man.

3:58 That's your home.

3:59 Even wholesale.

4:00 That's your home.

4:01 No, that's your home.

4:01 No, no, no, no. I'm going to be real. Even, okay, let's say you wanted to wholesale. No, no, for real.

4:06 If you wanted to wholesale or even buy a rental or even if you want the auction route. So my dad's been in real estate my whole life. A lot of my investment principles come from that.

4:15 I'm just waiting to listen to you, my brother. That's all good.

4:18 I can't easily access any property anywhere in the United States of America for $ 500 or $ 1, 000 a month.

4:25 It's impossible. Even if you wholesale.

4:28 You're wrong.

4:29 As a wholesaler, you don't have to pull a dime out of your pocket as a wholesaler.

4:32 You don't have immediate entry or immediate liquidity into that.

4:36 You're going to have to wait. The people who make wholesale and sell.

4:42 You're wrong.

4:43 No, I'm not.

4:44 You know how many wholesalers I've had switch to stocks because.

4:47 They couldn't get no fucking deals done? At least a hundred.

4:51 Yeah, they not hustling. Wholesaling is a different type of monster. Look, wholesaling is a system where you don't have to pull one dollar out of your pocket to make money.

5:01 How do you get the deal flow?

5:03 Your mouth.

5:04 You got to cold call. You got to knock on doors. No, not necessarily.

5:07 Yo, you had to have a network.

5:08 You got to email. But what if you don't have a network? What I'm telling you is you don't have to have a dollar. We start talking about money for point of entry. In wholesaling, you don't have to pull a dollar out of your pocket.

5:21 Okay.

5:21 You can make money in wholesaling. So let's just say you wholesale seven houses in one year.

5:28 Right? Let's say you made 30 a pot.

5:30 That's a stretch to do seven in a year.

5:32 It depends on what your region is. That's not true.

5:35 Okay, but I want to put... I'm sorry.

5:37 But for the average person's pushback, if they want to buy Robinhood stock today, Cisco.

5:42 I'm going to just go to the ones I'm not... Palantir today. Nike today.

5:47 How much is Palantir this year?

5:53 Let me pull it up.

5:56 And I'm not pro-Palantir for those of you who.

5:58 Listen to this.

5:59 While you look it up, let me speak. 187. For one share of Palantir. So a wholesaler can find a deal, put the deal under contract.

6:10 They're going to be on the phone for 22 hours.

6:12 It don't matter.

6:13 It doesn't matter. Yo, you got to put in some type. You got to have money equity or you got to have sweat equity. So stay on the phone for 20 hours. Let's say they spend 100 hours, right? The duration of the deal. I spent 100 hours on the phone, piling in emails, texts, faxes, whatever the case may be. And at the end of that 100 hours, I made $ 30, 000.

6:36 Tell me what job you can go work at for two weeks and put 100 hours in and make 30 grand.

6:40 I'll wait.

6:41 How many wholesalers are making $ 30, 000 a week? Not a lot.

6:44 In our region? Oh, not a week. No.

6:47 I'm just saying 100 hours. We're talking about hours. So what I'm saying. If you do four wholesale deals a year.

6:54 How many wholesalers do you know that are successful?

6:57 A bunch.

6:58 How many wholesalers do you know that are millionaires?

7:00 A bunch. You don't know a bunch.

7:02 How many?

7:03 You don't know a bunch. You don't know a bunch of wholesalers. You don't even know a bunch. There's not even a bunch of wholesalers.

7:08 You're wrong, Rashad.

7:10 Okay, how many do you know?

7:12 Where are they? Where are they? Yo, dog, I live in northern New Jersey.

7:16 These niggas, wholesalers kind of fucked up our market because they were so greedy, to be honest with you.

7:21 Wholesalers were taking houses.

7:22 Wholesalers were taking deals that they were finding for 250 and putting 80 on them, putting 100 on them. They used to only put 20 and make money from volume. This real estate resurgence that we've had in the last five years, wholesalers are so fucking greedy that they're putting 60 and 70 and $ 80, 000 on top of these houses.

7:41 These wholesalers are making money out here. But some of them were told to do that. Because it's a premium market.

7:47 I'm not disagreeing.

7:48 I'm just answering the first question of how many of them are making money?

7:51 A lot of them are making money.

7:53 Can we give a range of numbers?

7:55 I can say this year I made 85 millionaires this year.

7:59 Can I clap it up?

8:02 For me. For me.

8:03 Yes, in chat.

8:04 It's a bunch of motherfuckers who talking, but when I ask who made the millionaire question, it should be Silencio, my boy.

8:09 Cool.

8:11 So let me say if somebody had a wholesale platform where all they did was teach wholesaling, they could make maybe not 85 millionaires in one year.

8:20 Because, again, it's regional.

8:22 They've been out there.

8:24 And they are making, it's a bunch of, it's more wholesale tutors than you.

8:30 So, all right, let's go to this buy and hold conversation, right? Buy and hold real estate, right? Let's say you buy a house, right? Their taxes keep going up every single year.

8:43 That doesn't stop. Most stops. Most times.

8:45 90%.

8:47 I'm with you. I'm not trying to be antagonistic.

8:50 I'm with you.

8:51 Taxes keep going up. There's always upkeep for the house. Something is going to happen. 100%. Then you have ongoing things that you're not even counting on. Even the cable or electric. What I'm saying is when you own stocks, you just own the stock. There's no other fee. If I buy $ 100, 000 worth of Apple, I have $ 100, 000 worth of Apple. As it goes up, that $ 100, 000 is just compounding.

9:24 There's no annual tax fee that I have to pay. There's no annual maintenance fee. There's no annual electric fee that I have to pay. The compound interest is just really compounding. Where the compound interest on real estate has to actually be deducted by the cost that it costs to actually even maintain the real estate. And depending on that, it could actually be a wash. You ready?

9:51 If you bought $ 100, 000 worth of Nike, what would you be saying right now?

9:54 Of course, stocks can go down.

9:56 I would love for you to answer my question.

9:58 No, no, no, I'm the one who brought the question. Nike thing over there. No, no, no.

10:04 I'm asking Mr. Rashad a question.

10:06 If you bought $ 100, 000 worth of.

10:08 Nike, where's your compound theory at now, nigga?

10:13 Real estate can't go down. Can you not lose your house? Can you not foreclose your house?

10:17 Not on a buying hold.

10:20 So in our region, multifamilies are buy and hold. So even in the crash of 2007, which I endured, I'm not speaking from theory, I'm speaking from experience. I was a real estate investor in 03 up until now. When the house prices fell, rents did not fall. So if you bought a house for $ 400, 000 in 2005 and your rent roll covered your mortgage in 2005, when the markets fell, yeah, your house might not have been worth $ 400, 000 or more.

10:53 It might have been worth $ 200, 000. But guess what happened? Those rents didn't fall. And so you still were able to maintain that said property.

11:02 That's not true. Because... Rashad, I lived it. Listen, listen, listen. You said Nike. So what you're doing is taking the stock... A worst case scenario. You're saying that every stock is not the same. Every real estate market is not the same. There's a bunch of people that are upside down on their mortgages in Florida and other places where they brought at the top. Real estate doesn't always appreciate either. They brought at the top.

11:25 Eye and hold is what the example was that you gave. I'm not talking about personal homeowners. We're talking about investors. So as a homeowner, you could have bought your home for 400 grand. And your shit could be worth 280 right now. That's not the scenario you gave. The scenario you gave was as an investor, you're buying and holding, which means your rent covers your expenses in a buy and hold scenario.

11:45 Okay.

11:46 Well, there's other factors that go on. Do rents typically go down over the course of time? Probably not. But do problems happen all the time? Do people stop paying their rent? And if you live in New York and New Jersey, you can't evict somebody for a year and a half up to two years. That happens all the time.

12:05 Do apartments stay vacant for five months at the time and you got to come out of your pocket as a landlord? Don't just play the landlord is all good game.

12:14 I didn't say that at all.

12:15 There's other ways to lose money in the landlord situation just because your rent prices don't go down drastically. People could stop paying the rent.