WEBVTT

1
00:00:09.161 --> 00:00:14.621
Bill Neville: Who's our real estate expert today, and I'll at him, when we get to his portion, he can…


2
00:00:15.301 --> 00:00:24.110
Bill Neville: tell you what exactly makes him such a subject matter expert. And also, before I get started, just want to remind you, we will be taking


3
00:00:24.291 --> 00:00:26.320
Bill Neville: Questions at the end?


4
00:00:26.841 --> 00:00:34.271
Bill Neville: So whether it's questions for Dave about his presentations, or for me about self-directed IRAs, you can just type those questions in the chat box.


5
00:00:34.401 --> 00:00:38.031
Bill Neville: And we will answer them all after the presentation. So…


6
00:00:38.161 --> 00:00:46.950
Bill Neville: This is a slide that we show for all of our webinars. Essentially, what it says is that Entrust does not give advice.


7
00:00:47.261 --> 00:00:51.531
Bill Neville: Or sell, or recommend any particular investments.


8
00:00:51.801 --> 00:00:55.110
Bill Neville: This webinar is for educational purposes only.


9
00:00:55.381 --> 00:01:00.511
Bill Neville: So if you're considering doing any investments based on this, do your own research and due diligence.


10
00:01:00.931 --> 00:01:15.681
Bill Neville: As far as today's agenda, I'm doing the first part, I'm introducing Entrust, then we'll get to Dave with his, first 2026 economic update, then a housing market update, some conclusions to consider, and then at the end, we'll get to the Q&A.


11
00:01:17.591 --> 00:01:20.891
Bill Neville: That's me. I've been with Entrust for…


12
00:01:21.041 --> 00:01:25.400
Bill Neville: My… started my 16th year, earlier this month.


13
00:01:25.771 --> 00:01:37.341
Bill Neville: And, what I do is I educate people on how they can use their retirement accounts to invest in non-traditional investments. As far as Entrust, we are a self-directed IRA custodian and record keeper.


14
00:01:37.731 --> 00:01:50.181
Bill Neville: The majority of our staff, or those who qualify, are certified IRA service professionals, that's what CISP, and we do these monthly educational webinars. Actually, for so far this year, we've been doing these twice a month.


15
00:01:50.411 --> 00:01:53.691
Bill Neville: Although we're gonna slow that down back to monthly again.


16
00:01:57.241 --> 00:02:04.110
Bill Neville: Currently, we've been in business since 1981. We currently have approximately $6 billion of assets.


17
00:02:04.311 --> 00:02:10.171
Bill Neville: Under administration, that we hold, we have currently about 26,000 active accounts.


18
00:02:10.391 --> 00:02:24.220
Bill Neville: Again, we've been in business since 1981, so over 45 years, and with Entrust, you get a single point of contact, so if you have any questions or need assistance, rather than just calling an 800 number, when you open an account with us, you get a team of two people.


19
00:02:24.341 --> 00:02:32.481
Bill Neville: I'm one of those two people, if you're in my region, or referred by one of, the referral partners that, that are under me.


20
00:02:32.591 --> 00:02:35.780
Bill Neville: Otherwise, you get a regional point of contact.


21
00:02:35.891 --> 00:02:48.701
Bill Neville: One of my colleagues that's either in New Jersey, Florida, or South, Southern California, and then they have a team member, so you get a team of two people if you have any questions or need assistance when you open an account with us.


22
00:02:50.141 --> 00:02:54.380
Bill Neville: And with that being said, I am going to,


23
00:02:55.021 --> 00:03:04.390
Bill Neville: shut off my video and pass this on to Dave, and then I'll be back at the end to do a final wrap-up and then the Q&As. So, thank you for joining again, Dave.


24
00:03:04.931 --> 00:03:05.971
Bill Neville: Take it from here.


25
00:03:07.191 --> 00:03:13.631
Dave Stech: All right, Bill, well, I sure appreciate that. Thank you very much, and you're going to appreciate the next slide that I'm going to show, but…


26
00:03:13.631 --> 00:03:32.510
Dave Stech: Before we get there, I'll simply say, I'm Dave Steck, and we're near the end of April, early May, and for those of you who are watching this live, or who are going to watch it as a replay, I hope you really find value in it. I know there are a lot of people who do, sort of, market updates.


27
00:03:32.511 --> 00:03:52.091
Dave Stech: But I'll show you why this is going to be different, and I'll also let you know up front, it's sort of part one of two. I felt like I had 10 pounds of stuff to fit in a 5-pound bag, and I'll talk more about that in a second, but we will be doing a second part, rather than try to cram everything in here.


28
00:03:52.091 --> 00:04:11.360
Dave Stech: But even with Part 1, we're probably going to go maybe a few minutes over. But we're going to be talking about the state of the economy, the state of real estate, the state of private lending, and this is something that I've done for a long time. It's an economic and housing market update, but with additional information.


29
00:04:11.571 --> 00:04:26.961
Dave Stech: So, as I told Bill, I'm going to start today with a couple of quick stories that I think you'll appreciate. I don't like to read bios or any of that stuff, because people generally don't care what you've done, they only care what you can do for them. So, I think you'll find this


30
00:04:27.221 --> 00:04:47.180
Dave Stech: interesting, because you're gonna find that you're a lot like me. I spent way too many years in corporate America, so for those of you who've been there, you know what I'm talking about. The good news is, I was in senior management with Kodak, Disney, launched the first disposable camera, launched things like Disney Cruise Line.


31
00:04:47.321 --> 00:05:06.971
Dave Stech: And I was doing well, as far as everybody else was concerned. The bad news is, I had zero freedom. I didn't have financial freedom, therefore I couldn't get time freedom, therefore I couldn't get global freedom. Those are the three freedoms that I wanted, and now I have, and I've had for the last decade.


32
00:05:07.241 --> 00:05:10.400
Dave Stech: The problem at that time was I was comfortable.


33
00:05:10.801 --> 00:05:25.711
Dave Stech: And I didn't realize that comfort is the silent thief. Comfortable is where dreams go to die. And once I realized it, I left corporate America. And when I left, guess what? I had this big 401K.


34
00:05:25.841 --> 00:05:31.881
Dave Stech: And a well-meaning friend of mine referred me to his broker at guess where? Merrill Lynch.


35
00:05:32.171 --> 00:05:35.310
Dave Stech: And he successfully made me broker.


36
00:05:35.351 --> 00:05:51.231
Dave Stech: as I always say, he took my 401K, and even though I'd asked him to invest it conservatively, even with his conservative approach, he turned my 401K into a 201K, and I swear that if I were still there, I'd be eating special K.


37
00:05:51.231 --> 00:06:05.121
Dave Stech: Well, guess what? People always say, you know, when the student is ready, the teacher appears. I went to a webinar, rephrase that, a seminar, a live event on real estate, and someone from Entrust was speaking.


38
00:06:05.421 --> 00:06:22.050
Dave Stech: I couldn't believe it. I elbowed the guy next to me. I said, there's no way this could be true. You could self-direct your own money, and it's true. All of this is true, and here's the deal. Thank goodness for both. One of these, and trust, was a win, and one of these


39
00:06:22.171 --> 00:06:29.910
Dave Stech: Merrill Lynch was the lesson. I don't have wins and losses, our family office doesn't have wins and losses, we have wins and lessons.


40
00:06:29.961 --> 00:06:47.151
Dave Stech: Now, I learned a lot that I took in the form of lessons and turned it into wins when I did my first State of the Union for real estate investors at Harvard 21 years ago. That was in 2005, and for those that don't remember or have the background in this.


41
00:06:47.221 --> 00:06:54.050
Dave Stech: The market made a pivot in May of 2007, and in the next 21 months.


42
00:06:54.251 --> 00:07:00.351
Dave Stech: California prices dropped 59%, and Las Vegas prices dropped 65%.


43
00:07:01.061 --> 00:07:10.160
Dave Stech: a couple of years before that, I said, we've got to get out of the market in 2006. I was bearish when everybody else on the planet was bullish.


44
00:07:10.331 --> 00:07:27.180
Dave Stech: So, I pretty much got thrown out of the room until 2008, when they invited me back, and I said, go all in on Las Vegas, because I was bullish when everyone else was bearish. Even though 68% of all homes were underwater in Las Vegas, and it was the foreclosure capital of the world.


45
00:07:27.181 --> 00:07:30.600
Dave Stech: I looked at volatility as opportunity.


46
00:07:30.901 --> 00:07:47.580
Dave Stech: So, in 2005, I got out, 2008, I got back in, and 2011, 10 months before the bottom, I predicted that the market would bottom in the next year, and I was bullish when everyone else was still licking their wounds from the global financial crisis.


47
00:07:47.601 --> 00:07:52.851
Dave Stech: So that, I think, is what makes me qualified to speak to you today.


48
00:07:52.931 --> 00:08:06.090
Dave Stech: you know, I don't know 99% of the stuff in the world, but what I do know, I know really well, and what I know is that research isn't nice, it's necessary, and it's become our unfair competitive advantage.


49
00:08:06.211 --> 00:08:22.470
Dave Stech: Well, as I was focused on timing the market, my sons joined me, and we became a little family business, which is now Steck Family Office, and has been for the last 70… 17 years, and we do 3 things every day. We make money, do good, have fun.


50
00:08:22.661 --> 00:08:31.431
Dave Stech: That's it. I'm the luckiest guy on the planet. Imagine making money, doing good, having fun with your kids every day. It's a great deal.


51
00:08:31.501 --> 00:08:44.710
Dave Stech: Now, my son on the right is Blake. He went to Berkeley, graduated, and Josh, on the left, graduated from Stanford undergrad and grad, and real estate has been great. We love real estate.


52
00:08:44.791 --> 00:08:55.300
Dave Stech: We just don't love it too much now. What we love is private lending on real estate, because we want to control real estate, not own it at this point in the market cycle.


53
00:08:55.431 --> 00:09:10.431
Dave Stech: And that key, private lending, being the bank, has literally added zeros. And really, to our self-directed IRAs, where we now have three generations, including my grandkids, of self-directed IRAs.


54
00:09:10.691 --> 00:09:17.191
Dave Stech: Because we like to hold paper, not real estate, in our IRAs, because there's less liability.


55
00:09:17.281 --> 00:09:35.471
Dave Stech: And funnily enough, not long ago, I spoke at a conference, and the host introduced me as the head of the most successful private lending family in America, and I thought, wow, look how far we've come in such a short period of time. I started in a trailer park for the first 20% of my life with two parents with 8th grade educations.


56
00:09:35.471 --> 00:09:42.430
Dave Stech: So I am grateful, but not content. And I'm definitely not comfortable, because that's the silent deep.


57
00:09:42.591 --> 00:10:00.321
Dave Stech: Well, guess what? My son started a little fintech company that became big in private lending, and then another one in real estate a decade later that was featured just a few years ago as one of the 25 companies that was most likely to be the next billion dollar startup.


58
00:10:00.571 --> 00:10:07.961
Dave Stech: And that happens to be my son, Josh. He co-founded it with the former CFO of Airbnb. It's called Sunday.


59
00:10:08.231 --> 00:10:12.391
Dave Stech: They've raised a lot more than $136 million now, but…


60
00:10:12.411 --> 00:10:29.101
Dave Stech: He was, prior to this, one of the four founding partners of Lending Home, which is now called Kiavi, which is now the largest institutional private lender in America, worth over $3 billion, I believe. And I only tell you this because it's crazy


61
00:10:29.351 --> 00:10:32.371
Dave Stech: What a generation can do for a family.


62
00:10:32.691 --> 00:10:40.241
Dave Stech: And here's the takeaway that I want you to have, and the only reason I'm sharing this, what you don't know, your kids will inherit.


63
00:10:40.371 --> 00:10:47.961
Dave Stech: And that's why you need to be recognized for being here, because you could be anywhere today, but you're on this call, or you're going to be listening to it later.


64
00:10:48.091 --> 00:10:58.450
Dave Stech: And that's what I wish for you. The outsized results that we have had as a family, where we've added zeros and done much of it in our self-directed IRAs.


65
00:10:58.681 --> 00:11:16.080
Dave Stech: All right, well, I recently shared what you're about to see next, except that it was a longer version with my insiders. It was over 3 hours. At Harvard, it's typically longer, and I've condensed it down into a part 1 that'll take about 60 minutes or less today.


66
00:11:16.111 --> 00:11:27.930
Dave Stech: So we're going to dive in, because we've got a lot to cover, and I'm going to move quickly, but feel free, as Bill said, to type your questions as I go, and we'll get them to… we'll get to them at the end.


67
00:11:28.111 --> 00:11:39.351
Dave Stech: Starting with the economic update, this is arguably the driest part of the presentation, because not everyone loves economics, not everyone seeks to understand the economy.


68
00:11:39.581 --> 00:11:44.320
Dave Stech: But when you do, You can make THE economy your economy.


69
00:11:44.811 --> 00:11:48.150
Dave Stech: And it starts with 3 things that I'm going to cover today.


70
00:11:48.261 --> 00:12:00.641
Dave Stech: At least for this update, and every update is different, and we do them every 4 months, but I'm going to talk about the shape of the economy. And you notice how it's in quotes, because it's sort of a play on word.


71
00:12:00.861 --> 00:12:09.871
Dave Stech: You see, there's a K going on in our economy right now, and there's an argument the current economy isn't strong, and it's not weak, it's just split.


72
00:12:10.051 --> 00:12:19.440
Dave Stech: You see, if you're waiting for it to feel like a coherent story, I hope you've got some crossword puzzles or something to keep you busy, because this is going to take me a little time to explain.


73
00:12:19.621 --> 00:12:38.480
Dave Stech: Because this economic cycle isn't a single wave like historical cycles have often been. It's a set of lanes moving at different speeds, and increasingly so, where you've got folks like you on this call, and me, where we're affluent Americans, and we're doing well.


74
00:12:38.591 --> 00:12:43.170
Dave Stech: And you got the folks at the other end of the extreme who were falling behind.


75
00:12:43.411 --> 00:12:46.271
Dave Stech: The technical term for this is dispersion.


76
00:12:46.481 --> 00:12:55.000
Dave Stech: It's a simple, almost duh idea. In the same economy, outcomes disperse. They spread out.


77
00:12:55.181 --> 00:13:04.640
Dave Stech: The variation or the spread measures volatility or inequality. So, in a high dispersion environment, we got a lot of variability.


78
00:13:04.721 --> 00:13:14.081
Dave Stech: In low dispersion, we've got pretty high consistency, and the net result is big gaps in outcomes across three things.


79
00:13:14.161 --> 00:13:29.920
Dave Stech: Households, like yours and mine, companies like yours and mine, because most of you are probably entrepreneurs and business owners, and asset classes, which I'm going to talk about near the end. It's all happening at the same time, and if you think about it like this.


80
00:13:30.331 --> 00:13:35.180
Dave Stech: You… all you have to do is take a look at quarterly consumer spending, for example.


81
00:13:35.491 --> 00:13:44.860
Dave Stech: So, if you were to look at the change quarter over quarter in blue, you can see that it's bouncing around 3% or so.


82
00:13:45.251 --> 00:13:55.131
Dave Stech: And it looks fine in the aggregate, and even this most recent quarter is up 2.4% annualized, despite the government shutdown that rattled so many nerves.


83
00:13:55.351 --> 00:14:11.881
Dave Stech: But it's being carried by a narrow cohort, the top 10% of households like you and me. You see, if you look at the share of overall U.S. consumer spending by income percentile, what you see is this K quite clearly.


84
00:14:12.101 --> 00:14:27.840
Dave Stech: The top 10% of income earners, are you ready? Account for 49% and growing of all consumer spending, while the bottom 80% only represent 37%, and it's falling, and it's widening.


85
00:14:28.021 --> 00:14:46.221
Dave Stech: And it's also evident when we look at the K when it compares consumer sentiment and the S&P 500. Again, you can see that K plain as day, and it starts becoming especially pronounced in early 2024, as the Fed fund rate peaked.


86
00:14:46.371 --> 00:14:58.960
Dave Stech: The S&P goes up 45% over the next 2 years, hitting record after record, while the population at large is reporting that they're feeling increasingly less and less confident about the economy.


87
00:14:59.401 --> 00:15:07.120
Dave Stech: And why is it no surprise? Because the lower-income lane, where most of the folks are, is losing momentum.


88
00:15:07.301 --> 00:15:13.330
Dave Stech: Income growth for those households tailed off dramatically starting in 2025.


89
00:15:13.761 --> 00:15:25.350
Dave Stech: It's… if you look in navy blue, you'll see it's only up 1.4% year over year, versus those of us in the higher income tax bracket, where it's 4.0%.


90
00:15:25.691 --> 00:15:36.910
Dave Stech: That's the K-shape economy again. One of the lanes, yours and mine, keeps moving, and the other is forced to increasingly make trade-offs that are painful.


91
00:15:37.141 --> 00:15:53.790
Dave Stech: Well, dispersion also shows up within the stock market. If you look at the S&P's 16% year-over-year return, certainly sounds like, on the surface, it's doing great. And by index, I'm referring to the whole thing. But underneath, what do we see?


92
00:15:53.961 --> 00:15:55.591
Dave Stech: Two lanes are merging.


93
00:15:55.971 --> 00:15:57.431
Dave Stech: What do I mean by that?


94
00:15:57.621 --> 00:16:07.090
Dave Stech: Well, on the have side versus the have-wants, you have the AI-driven names that have been wildly outperforming the rest of the market. And if


95
00:16:07.091 --> 00:16:19.941
Dave Stech: You look at Oak Tree Capital's latest report. Since the launch of ChatGPT in 2022, a small group of AI-related companies have driven a certain amount of the market.


96
00:16:20.011 --> 00:16:21.870
Dave Stech: Are you ready for that percentage?


97
00:16:22.281 --> 00:16:32.091
Dave Stech: 75%. 75% of the S&P 500's entire return is driven by the Magnificent Seven.


98
00:16:32.601 --> 00:16:50.131
Dave Stech: Now, we'll talk about that in a second, but without AI, which is where those tech companies play, the top 7 companies in the world are all tech companies by market cap. And without AI, the S&P return for 2025 would have been 6%, not 16%.


99
00:16:50.491 --> 00:17:04.070
Dave Stech: You could have gotten that in a high-yield savings back in 2024 with none of the volatility or what I call concentration risk. I underlined that because I'm going to talk about it. And the latter is getting worse.


100
00:17:04.241 --> 00:17:17.611
Dave Stech: concentration is becoming problematic for those that don't realize it, because the S&P is a market cap weighted fund. And that's important, because the concentration at the top just keeps increasing.


101
00:17:17.841 --> 00:17:22.470
Dave Stech: In other words, the big boy tech companies become more and more valuable.


102
00:17:22.581 --> 00:17:34.990
Dave Stech: They necessarily, then, make up more and more of the index's weight to the point where the 10 largest companies now constitute 41% of the entire weighted index.


103
00:17:35.271 --> 00:17:37.551
Dave Stech: So stop and think about what I just said.


104
00:17:37.701 --> 00:17:55.961
Dave Stech: If you're in an ETF in the S&P 500, for every dollar you throw into that ETF, that exchange-traded fund, 41 cents goes into 10 of the 500 companies. Think about that. 10 out of 500 is 2%.


105
00:17:56.221 --> 00:18:15.850
Dave Stech: 41% of all of the index is driven by 2% of the companies. So, another way to think of it is of market breadth, and the breadth is shrinking. In other words, the breadth across the market that we're getting contribution is shrinking, and the risk is concentrated and rising.


106
00:18:16.111 --> 00:18:33.780
Dave Stech: Risk contribution basically answers the question, if the S&P moves tomorrow, up or down, how much of that move is being driven by the top 10 companies? And it's surged into clearly majority territory, now that 56% of the S&P's day-to-day movement


107
00:18:34.291 --> 00:18:53.941
Dave Stech: is really driving the entire market. It's what I call diversification illusion. You think you're diversified because you're in a basket of 500 stocks, but you don't realize that your outcome is just one crowded trade. So when the leaders wobble, the whole index behaves like a single position.


108
00:18:54.541 --> 00:19:07.041
Dave Stech: All right, let's talk now about the Fed. Everybody wants to know what's going on with the Fed, and I call it the sneaky Fed and its likely new sheriff. So, guess what? They're at it again.


109
00:19:07.211 --> 00:19:18.951
Dave Stech: After nearly 4 well-publicized years of quantitative tightening, they're back to doing the opposite. They're adding to their balance sheet. They're reducing the Fed fund index rate.


110
00:19:19.001 --> 00:19:35.661
Dave Stech: They're quietly, steadily doing it on purpose, and not without plenty of political pressure from Washington. The Fed bought over $90 billion in short-dated government debt over just an 8-week period starting in December, and that's just what they've confirmed.


111
00:19:35.721 --> 00:19:51.431
Dave Stech: So why should you and I care? Because this is quantitative easing. The Fed buys the T-bills from commercial banks, then they credit the cost back to those banks' reserves, and it creates more liquidity, or quote, cash, in the system.


112
00:19:51.631 --> 00:20:02.321
Dave Stech: You see, rising reserves means the system has more balance sheet flexibility, which does a few things. One, it reduces the system shock of bad loans


113
00:20:02.321 --> 00:20:16.581
Dave Stech: like those that I talked about in my last update for the State of the Union, where the regional banks and commercial real estate and first brands have not only begun their debacle, but will continue their debacle.


114
00:20:17.031 --> 00:20:26.461
Dave Stech: My sons and I talk about this potential, what we call bad loan protection, from a private lender's perspective in our workshop called Just Be the Bank.


115
00:20:26.461 --> 00:20:40.521
Dave Stech: And Andrew, if you bear with me a second, I'm about to ask you to queue up a poll, and we'll see if it works. But first, the importance here is always being entitled verified first lien position if you're going to do


116
00:20:40.571 --> 00:20:56.991
Dave Stech: private lending in the mortgage space. And ideally, being the only lien holder, like we make sure of, where we restrict the borrower from getting junior loans. So, Andrew, let's see if it works. This is our first go with this. See if you can't launch it.


117
00:20:57.431 --> 00:21:07.681
Dave Stech: Look at there. All right, kudos to Andrew in the background, but out of curiosity, how many of you have ever done a private loan on a real estate deal?


118
00:21:07.831 --> 00:21:26.521
Dave Stech: So, maybe the answer is yes. I've done at least one private loan, or maybe many, or B, I've never used a private loan for real estate. So, would you do me a favor? I don't want this to be me begging you to complete a poll. It's a simple poll, and I'd like to really understand


119
00:21:26.761 --> 00:21:42.301
Dave Stech: what your answer is. How many of you have done a private loan, and how many of you have not? Simple question. Please do me a favor and answer that. Let's make two polls, the only two polls I've got in the entire survey, non-negotiable. What do you say?


120
00:21:42.471 --> 00:21:45.511
Dave Stech: So, Andrew, are we getting some… some answers here?


121
00:21:45.511 --> 00:21:52.170
Andrew Crawford: Yep, got about 38 answers, we can leave it open for another 10 seconds or so, and I think I can go ahead and show you what we got.


122
00:21:52.351 --> 00:21:53.191
Dave Stech: Perfect.


123
00:21:53.461 --> 00:21:57.861
Dave Stech: So, yes, you've done a private loan, or no, you haven't.


124
00:21:58.161 --> 00:22:12.850
Dave Stech: Well, look what we got there. We got 44% of you have done at least one loan, and 56% of you have never done a loan. Well, that's really important, because as we get into this, I think you're going to find this increasingly interesting.


125
00:22:12.851 --> 00:22:18.281
Dave Stech: Because we're going to talk about the one area that tends to be the first


126
00:22:18.331 --> 00:22:35.870
Dave Stech: eye on the market, and I'm not going to get into it any further. I'll get into it in a little while. Well, the Fed is likely in for a shakeup here soon. There's a new sheriff that may be coming to town, you probably have seen plenty of the hearings, and his name is Kevin Warsh.


127
00:22:35.871 --> 00:22:45.570
Dave Stech: Well, Kevin didn't just roll out of bed, and I'll talk about him for a minute, but for our purposes here, what we care about as we're thinking about the economy.


128
00:22:45.861 --> 00:23:03.110
Dave Stech: He appears to be, to value fed independence, and he has a reputation for being more of a hawk than a dove. I'm going to talk about that for a second, and why that is important, but here's the message. This guy didn't just roll out of bed and potentially get


129
00:23:03.111 --> 00:23:16.461
Dave Stech: into the Fed chair. He went to Stanford undergrad, Harvard Law School, practiced in private equity, in the hedge fund space, was on the Federal Reserve Board, so he's been around the block.


130
00:23:16.461 --> 00:23:30.470
Dave Stech: We're not just trying to find… we don't have nepotism necessarily going on here. The thing is this, if Warsh is truly a hawk, which is the way he positions himself, it's almost counterintuitive to what Trump wants.


131
00:23:30.471 --> 00:23:41.101
Dave Stech: Because a hawk is going to prefer to rein in liquidity, reduce the balance sheet, and err on the side of keeping rates high in order to tame inflation.


132
00:23:41.101 --> 00:23:46.471
Dave Stech: Remember, the Fed has two mandates, a dual mandate. Keep


133
00:23:46.471 --> 00:24:01.871
Dave Stech: employment in check, and keep inflation in check. And a hawk doesn't want easy money and barn-burner GDP growth if it means elevated inflation, which explains why Warsh's nomination wasn't well received by the markets.


134
00:24:01.871 --> 00:24:16.270
Dave Stech: After months of record highs and stretched valuations, gold, in gold there, and silver in silver there, dropped 10% and 27% respectively, the day following Trump's announcements.


135
00:24:16.491 --> 00:24:34.750
Dave Stech: That's what I don't like about precious metals, oil and gas, or the stock market. I can't control the outcomes, and somebody else can, and when they do, and it's not in my favor, you can get spanked. 10% and 27% in one day, what if it hadn't come back?


136
00:24:34.751 --> 00:24:36.941
Dave Stech: Well, the stock market also fell.


137
00:24:36.941 --> 00:24:52.831
Dave Stech: with major indexes all reporting modest losses, but if we put it in context, especially in the context of concerns over Trump's interfering with the Fed, the market hiccup can ironically be understood as an early vote of confidence in Warsh.


138
00:24:53.031 --> 00:24:59.560
Dave Stech: Rather than the opposite, because they believe he's independent, that he'll be suitable for the role.


139
00:24:59.751 --> 00:25:13.311
Dave Stech: And what I mean is this. The market priced in different Fed reaction function. In other words, it priced in what's called tighter plumbing, where less Fed T-bill buying and liquidity


140
00:25:13.331 --> 00:25:28.271
Dave Stech: and the idea that marginal support for risk assets might be less reliable going forward. In other words, the risk markets, like stock, crypto, all fell because the Fed won't be there to prop them up with cheap money, and the safe haven assets


141
00:25:28.271 --> 00:25:38.111
Dave Stech: precious metals, even real estate, fell too, because there's less of an inflation hedge in a world where the Fed is aggressively battling inflation.


142
00:25:38.371 --> 00:25:44.401
Dave Stech: Which takes us to the third thing I wanted to talk about in the economy, and then we'll move on to the housing market.


143
00:25:44.551 --> 00:25:46.490
Dave Stech: Let's talk about the labor market.


144
00:25:46.711 --> 00:26:01.560
Dave Stech: This may not be as big of a concern right now to you, but I promise you this will be a massive concern in the next 1, 2, and 3 years. We're not going to talk about that today, but I just put together a forecast


145
00:26:01.831 --> 00:26:03.471
Dave Stech: And I don't think it's pretty.


146
00:26:03.731 --> 00:26:05.631
Dave Stech: Well, where are we today?


147
00:26:05.741 --> 00:26:09.140
Dave Stech: Well, most of us still carry this simple metal model.


148
00:26:09.281 --> 00:26:20.380
Dave Stech: Vis-a-vis monetary policy and labor. You see, there's monetary policy, which is driven by the Fed, and there's fiscal policy, which is driven by Congress, putting together budgets and the like.


149
00:26:20.521 --> 00:26:22.061
Dave Stech: And then there's labor.


150
00:26:22.161 --> 00:26:30.151
Dave Stech: Well, we all think that if rates fall, borrowing gets easier, spending and investment lift, and hiring follows.


151
00:26:30.341 --> 00:26:34.911
Dave Stech: Highly intuitive, cause and effect, almost always true, but…


152
00:26:35.151 --> 00:26:41.310
Dave Stech: This cycle is confusing people because the first part of the script happened, but not the latter.


153
00:26:41.731 --> 00:26:48.161
Dave Stech: Because the Fed makes money easier doesn't mean employers get more optimistic.


154
00:26:48.341 --> 00:26:55.900
Dave Stech: Easing shows up first in financial conditions, like liquidity and market pricing, and as we can see in blue.


155
00:26:56.021 --> 00:27:03.611
Dave Stech: Sometimes it takes a lot of rate cuts before we get a rebound in year-over-year employment growth in red.


156
00:27:03.841 --> 00:27:06.371
Dave Stech: And the point is this, and it's important.


157
00:27:06.511 --> 00:27:13.520
Dave Stech: The labor market only re-accelerates when employers regain hiring intent. Right now, they don't have it.


158
00:27:13.811 --> 00:27:18.990
Dave Stech: Hiring intent is measured by job openings, and as you can see in the sort of purple.


159
00:27:19.261 --> 00:27:32.331
Dave Stech: As of February, openings are down… down to 6.9 million job openings, but it's down 300,000 from January, and the lowest they've been since 2020 during the pandemic.


160
00:27:32.671 --> 00:27:43.930
Dave Stech: Granted, the downward slope is flattened in tandem with the rate cuts, but it's still going down, not up, the way monetary policy and a reduction of the Fed funds rate should have driven it.


161
00:27:44.211 --> 00:28:01.850
Dave Stech: And if we break it down by sector, which is what we have to do in order to understand where the trends are, a trend-adjusted basis is what is called a difference from normal basis. And if you look in red, and look at the red squares versus the gray squares.


162
00:28:01.861 --> 00:28:05.211
Dave Stech: So, job openings, the red squares.


163
00:28:05.311 --> 00:28:13.831
Dave Stech: If you compare them to openings a year ago, they're down in 14 of 17 major industries. Some are significantly so.


164
00:28:14.241 --> 00:28:18.941
Dave Stech: And a really important openings metric just flipped last July.


165
00:28:19.171 --> 00:28:30.720
Dave Stech: the openings to unemployed ratio. At a .91, as of February, that means for every one unemployed person, there are only .91 jobs.


166
00:28:30.901 --> 00:28:33.981
Dave Stech: The leverage has returned to employers.


167
00:28:34.091 --> 00:28:36.931
Dave Stech: And other than the COVID outbreak last year.


168
00:28:37.141 --> 00:28:46.250
Dave Stech: or the outbreak year, rather. This is the first time the ratio's been sub-1 since March of 2018, 8 years ago.


169
00:28:46.451 --> 00:28:51.970
Dave Stech: And one thing the headlines fail to mention, which makes it even worse, is NILFs.


170
00:28:52.351 --> 00:29:06.791
Dave Stech: Those are the folks that are not in the labor force. So when the Bureau of Labor Statistics does the household survey every month, one of the questions they ask people is, have you looked for a job in the last 30 days? Well, look at in the red.


171
00:29:06.831 --> 00:29:13.541
Dave Stech: If you haven't, they basically take you out of the total workforce, and you don't count as unemployed.


172
00:29:13.681 --> 00:29:26.360
Dave Stech: And when someone goes from unemployed to a NILF, that is, they're no longer in the data, two things happen at once. First, the U, or unemployment, goes down, which


173
00:29:26.371 --> 00:29:28.110
Dave Stech: Pushes the rate down.


174
00:29:28.111 --> 00:29:46.901
Dave Stech: And the total labor force, which is unemployed and unemployed, also go down, which can further improve the ratio mechanically. So, you can actually have a better unemployment rate, even if nothing improved in hiring, or even if the labor market actually weakened and discouraged people because of these NILFs.


175
00:29:47.121 --> 00:29:55.041
Dave Stech: Well, when we break it down into monthly net gains, ADP's report shows plus 62,000 jobs for March.


176
00:29:55.301 --> 00:30:05.090
Dave Stech: In a job market our size, where there's roughly 160 million jobs, plus or minus a few million, that's peanuts. That is a drop in the bucket.


177
00:30:05.090 --> 00:30:16.351
Dave Stech: And if you look in purple, which is the 6-month moving average, we're bouncing along just above neutral, gaining maybe 30,000 to 40,000 jobs on average a month, which is peanuts.


178
00:30:16.391 --> 00:30:29.410
Dave Stech: But if we turn, ironically, to the official Bureau of Labor Statistics report, they're reporting 178,000 jobs added, versus the 64,000 that I just showed you.


179
00:30:29.531 --> 00:30:39.420
Dave Stech: And that's well above the Dow Jones consensus of 59,000, which is another data point, which knocked the official unemployment rate down to 4.3%.


180
00:30:39.601 --> 00:30:52.880
Dave Stech: Remember how I talk about looking at single sectors? Because it's not just what's happening in the market, it's what's happening in each of the sub-markets. Just like real estate, there is no real estate market in the U.S.


181
00:30:52.881 --> 00:31:00.521
Dave Stech: It's a sum of all the 405 metropolitan statistical areas and all the millions of census tracts.


182
00:31:00.521 --> 00:31:03.160
Dave Stech: Well, the one single sector


183
00:31:03.271 --> 00:31:12.610
Dave Stech: that's showing growth is private education and health services. That sector has been aggregated here, and you can see the significant growth.


184
00:31:12.931 --> 00:31:17.441
Dave Stech: Over 100% of the job gain in January came from that sector.


185
00:31:17.651 --> 00:31:31.501
Dave Stech: Health and education added more jobs than the net jobs added for the entire economy, which can only happen if the rest of the economy, other than private education and health services, actually lost jobs.


186
00:31:31.831 --> 00:31:33.461
Dave Stech: Why is this important?


187
00:31:33.631 --> 00:31:40.751
Dave Stech: Because it wasn't just January. Healthcare has been the biggest job creator for 2 years by a mile.


188
00:31:40.881 --> 00:31:56.610
Dave Stech: And this chart's a little outdated, but education and health services accounted for 60… 56% of all the employment growth over the two-year period from July of 23 to July of 2025. That's the K showing up again.


189
00:31:56.951 --> 00:32:01.880
Dave Stech: But this is what I wanted to show you, because I showed it to you earlier, but this is an update.


190
00:32:02.231 --> 00:32:15.491
Dave Stech: Healthcare, as we discussed about, as we discussed, is one of the industries that is driving this whole thing. In fact, it is driving the whole thing, with downward trends now showing up.


191
00:32:15.631 --> 00:32:26.420
Dave Stech: If you look at that red box down at the bottom, you'll see where it is today versus the gray box to the far right, where you saw it a year ago.


192
00:32:26.571 --> 00:32:44.510
Dave Stech: What that chart is saying is that healthcare job openings were 300,000 above normal a year ago, now they're only 100,000 above normal. And I got news for you. When the biggest jobs boom sector is showing signs of contracting, like by two-thirds, not a good sign.


193
00:32:44.811 --> 00:32:49.640
Dave Stech: And oh, by the way, don't forget the revisions. You know how the government is really getting


194
00:32:49.791 --> 00:33:07.360
Dave Stech: I don't know, fond of making revisions, and we just got the adjusted full year numbers in February. Now, truth is, these revisions happen every year, but if you heard that payrolls increased for the year by almost 600,000 jobs, I got news for you.


195
00:33:07.361 --> 00:33:20.441
Dave Stech: It's been revised down to 181,000 jobs. It's a third of what it was originally forecasted to be, so all the narrative that we've heard for the last year about how great things were.


196
00:33:20.441 --> 00:33:31.071
Dave Stech: weren't really too great after all. Basically, 15,000 jobs per month on average is what we were adding, which is far and away the weakest year for job growth since the pandemic.


197
00:33:31.071 --> 00:33:35.810
Dave Stech: And it happened despite all the easing that's happened in the last 2 years.


198
00:33:36.031 --> 00:33:47.310
Dave Stech: Excluding the post-pandemic volatility years of 2020 and through 2022, this year is shaping up to be the slowest year for job growth in a long time.


199
00:33:47.441 --> 00:34:01.010
Dave Stech: It's basically simple technical analysis. You see, there's fundamental and technical analysis. And from a TA standpoint, the labeled averages step down each year. From 177,000 jobs


200
00:34:01.011 --> 00:34:12.021
Dave Stech: in 2023 to 64,000 in 24 to 33,000 in 2025, and now I just talked about 15,000… 15,000 jobs a month.


201
00:34:12.051 --> 00:34:17.011
Dave Stech: That's not still strong, but cooling, it's a different operating speed.


202
00:34:17.841 --> 00:34:35.931
Dave Stech: All right, well, I hope you found that valuable, and by the way, if you did, feel free to bounce that yes or no in chat, and thank the folks at Entrust for having invited me. Don't thank me, thank them, because I wouldn't be here without Bill and Andrew, and I'm grateful for them.


203
00:34:35.931 --> 00:34:39.540
Dave Stech: Which allows me to now segue into the housing market update.


204
00:34:39.591 --> 00:34:44.720
Dave Stech: And by the way, I know that they're going to be sending out a poll after this, so I encourage you to complete it.


205
00:34:45.481 --> 00:35:04.940
Dave Stech: When we talk about housing, what are we always interested in? Supply, demand, price? We're going to talk about those. And we're going to talk about one thing that I think's really important. The sector of the market that knows more than other parts of the market realize about what's actually going on on the ground.


206
00:35:05.201 --> 00:35:07.471
Dave Stech: So, let's start with inventory.


207
00:35:08.241 --> 00:35:22.790
Dave Stech: We have to look at active listings. That's the best way to measure inventory. And while it's up 8% year over year through March, the pace has slowed a great deal. If you look at the gap over the last 12 months.


208
00:35:22.791 --> 00:35:29.721
Dave Stech: from 25 to 26, that's that gap in purple. Look at the gap in blue.


209
00:35:29.911 --> 00:35:32.271
Dave Stech: In the 12 months preceding that.


210
00:35:32.611 --> 00:35:37.880
Dave Stech: So, inventory's grown for the last 2 years. Its growth is slowing.


211
00:35:38.361 --> 00:35:49.741
Dave Stech: But active listings, in absolute terms, actually stopped growing for all of the second half of 2025, which almost never happens. Think about the seasonal. Usually.


212
00:35:49.741 --> 00:35:59.981
Dave Stech: You know, there's a lot of spring buying, there's summer buying, and then things slow down when kids go back to school. And they usually peak somewhere between July and October.


213
00:36:00.051 --> 00:36:15.680
Dave Stech: Well, they're not. Look how flat they are, and that basically means, in my opinion, that the market's hit a stress point and adapted, not by blowing inventory out, but by shifting into what I call a low liquidity equilibrium. What is that?


214
00:36:15.731 --> 00:36:24.261
Dave Stech: Well, it's when the market looks balanced on paper, but only because both sides are constrained, and no one feels any urgency to blink.


215
00:36:24.471 --> 00:36:34.821
Dave Stech: You've got optional sellers on one side. They're throttling supply because they don't want to give up their low-rate mortgage and overpay for another property and then have to finance it at a higher rate.


216
00:36:35.071 --> 00:36:43.631
Dave Stech: Buyers on the other side are rationing their demand because the monthly payment is punitive. They either can't afford it, or they just plain refuse to.


217
00:36:43.931 --> 00:36:52.151
Dave Stech: So where do sales happen? They happen at what's called the margin, where concessions are required, price reductions are made.


218
00:36:52.291 --> 00:37:00.820
Dave Stech: Time finally forces a seller to reduce price. It's all about the margin, not higher volume.


219
00:37:00.961 --> 00:37:18.950
Dave Stech: And you can see the cooling inventory growth more starkly here. If you look at 2024 to 2025, from March to March, look at the dark green areas. Those percentages are all inventory growth. And look at the lower right, on the left.


220
00:37:19.231 --> 00:37:21.661
Dave Stech: 34% in Florida.


221
00:37:21.771 --> 00:37:36.681
Dave Stech: Well, look at what has happened in the last 12 months. Inventory's growing. You can see all the green, but it's growing slower, which is what I just shared before. And look at Florida down there on the right-hand side, a negative 8%.


222
00:37:37.281 --> 00:37:41.470
Dave Stech: So, in other words, inventory's not growing, it's actually contracting there.


223
00:37:41.671 --> 00:37:52.631
Dave Stech: But despite the growth, we're still 17% below pre-COVID inventory nationally. Now, you can see the negative numbers when you look at the browns and the yellows.


224
00:37:52.851 --> 00:38:11.091
Dave Stech: And there's this narrative about kind of a glut of inventory that sometimes people hear, but all we're doing is rebuilding supply from a historically starved baseline. So, when most states are some shade of brown, in other words, they're down from where we were in 2019,


225
00:38:11.091 --> 00:38:19.871
Dave Stech: You get an aggregate market that's still structurally short on listings, but it can remain resilient even when activity feels sluggish.


226
00:38:20.171 --> 00:38:34.110
Dave Stech: So, here's another scattergram, where we look at active listings compared to 2019 levels, and it doesn't mean the market is balanced in some academic sense, it means buyers are starting to regain leverage.


227
00:38:34.481 --> 00:38:52.170
Dave Stech: Buyers have more selection because inventory's higher. They've got more time to make a decision because no one's beating them to a deal. They've got negotiating leverage, because supply looks closer to what it looks like in the last non-distorted cycle than where we were in the last couple of years.


228
00:38:52.461 --> 00:38:59.700
Dave Stech: Well, like active listings, new listings are still well below the 2017-19 benchmark.


229
00:38:59.701 --> 00:39:13.670
Dave Stech: But you can see the step up from 2023 and 24 to 2025 in gold there. And if you look in red, which is March 2026, it's barely up about .7%.


230
00:39:13.731 --> 00:39:28.380
Dave Stech: But what this all means is that more households are willing to list today than they were a year ago, or 2 years ago, even though the average interest rate from 2023 wasn't that much different from 2025.


231
00:39:28.561 --> 00:39:38.631
Dave Stech: And we're going to talk in Part 2 about what's happened to interest rates since then, over the last two years, compared to what the Fed fund rates has done.


232
00:39:38.871 --> 00:39:53.660
Dave Stech: Well, to me, this all suggests that the mortgage lock-in effect is easing up. In other words, you and I, who might have had interest rates at 3% or less, or even 4%, where we were locked in, we didn't want to trade that


233
00:39:53.861 --> 00:39:57.360
Dave Stech: For a higher interest rate of 6 or 7%.


234
00:39:57.451 --> 00:40:08.231
Dave Stech: Well, now all of a sudden, after some years of this resistance, all of a sudden, life is getting in the way of more owners' resistance to leave their 3% mortgage.


235
00:40:08.231 --> 00:40:25.670
Dave Stech: You have death, divorce, disaster, downsizing. Those four Ds are impacting what's going on in the market. But it affects different people at different times, and I expect this phenomenon to continue, but not to add anything more than a slow drip of incremental supply.


236
00:40:26.111 --> 00:40:34.040
Dave Stech: On the price side, remember we just talked a little bit about inventory? Well, on the price side, the national median list price is down 2%.


237
00:40:34.061 --> 00:40:39.670
Dave Stech: Of course, that doesn't always mean broad-based home price depreciation. Falling media


238
00:40:39.691 --> 00:40:55.251
Dave Stech: Median list price can certainly be a mixed shift, where there are more smaller homes, there's more entry-level supply, and not necessarily indicative of actual value declines. After all, it's just list price, it's not actually sales price.


239
00:40:55.301 --> 00:40:56.131
Dave Stech: But…


240
00:40:56.361 --> 00:41:08.461
Dave Stech: If you couple that with falling price per square foot, which is what's happening now, the mix shift explanation starts getting weaker when justifying the drop in price.


241
00:41:08.731 --> 00:41:17.541
Dave Stech: Price per square foot is a good way of normalizing for size and some of the composition change, and it's down 2.5% year over year.


242
00:41:17.811 --> 00:41:27.430
Dave Stech: If both the median list price and dollars per square foot slip, it's a signal that the market is seeing a genuine erosion in pricing power.


243
00:41:27.671 --> 00:41:29.391
Dave Stech: Well, the typical home


244
00:41:29.651 --> 00:41:35.981
Dave Stech: Last month, spent 57 days on the market, 4 days longer than this time last year.


245
00:41:36.201 --> 00:41:48.870
Dave Stech: When days on market moves from 53 days to 57 days year over year, you're seeing homes sit a little longer before they exit the active pool. That much is obvious, but what may not be obvious?


246
00:41:48.901 --> 00:41:58.261
Dave Stech: Higher days on market raises the steady-state level of active listings because each listing occupies shelf space for longer.


247
00:41:58.391 --> 00:42:18.080
Dave Stech: In other words, rising days on market tends to increase what's called staleness, which changes the proposition of inventory before it changes the level. So even if total active listings don't spike, higher days on market usually mean a bigger share of inventory becomes one of three things.


248
00:42:18.171 --> 00:42:29.440
Dave Stech: Older listings and relistings, repeatedly price cut listings, or needs a concession. Something needs a concession, and therefore the listing has to concede.


249
00:42:29.761 --> 00:42:41.671
Dave Stech: And importantly, stale inventory sets the next round of comps, meaning that rising days on market is often an early signal that future price movement will come through terms


250
00:42:41.871 --> 00:42:46.240
Dave Stech: And selective sales, not a clean repricing of the median.


251
00:42:46.381 --> 00:42:48.261
Dave Stech: Which takes us to demand.


252
00:42:48.561 --> 00:42:57.111
Dave Stech: How's demand looking these days? Well, it's easy to misread right now, because different parts of the demand funnel are sending different signals.


253
00:42:57.281 --> 00:43:04.951
Dave Stech: When you take a look at the metrics for each of the usual funnel stages, there's a sequence that usually occurs, and it's threefold.


254
00:43:05.221 --> 00:43:11.551
Dave Stech: First is financing a tent, second is on-the-ground shopping, and third is contracts signed.


255
00:43:11.951 --> 00:43:18.390
Dave Stech: Well, financing intent is measured by mortgage applications, specifically purchase application.


256
00:43:18.411 --> 00:43:30.011
Dave Stech: And if we look at the Mortgage Bankers Banking Association's weekly survey, it shows the purchase index up year over year for nearly all of the first quarter of this year.


257
00:43:30.031 --> 00:43:36.820
Dave Stech: Though it's fallen sharply over the last couple weeks as the war on Iran spiked Treasury yields and thus mortgage rates.


258
00:43:36.831 --> 00:43:56.351
Dave Stech: Now, before the war rattled those rates, mortgage apps were roughly the same level as last year, or I should say as pre-pandemic, early 2019, when mortgage rates were in the mid to low fours. So that's a reminder that demand for mortgages isn't so much about the level of rates.


259
00:43:56.431 --> 00:44:03.691
Dave Stech: But the relative change in those rates. So rates can be 150 to 200 basis points higher.


260
00:44:04.071 --> 00:44:21.901
Dave Stech: worse now, which is a point and a half, or two points, and home prices are more prohibitive, but because the rates have simply, quote, gotten better, it feels better, we see the same demand as we're seeing now that we used to see in pre-pandemic days.


261
00:44:22.161 --> 00:44:33.881
Dave Stech: Yet, what's happening to on-the-ground shopping data? It's one thing when we look at mortgage applications, it's one thing when we look at people searching rates, but what about what's happening on the ground?


262
00:44:34.171 --> 00:44:35.501
Dave Stech: It's pretty bleak.


263
00:44:35.691 --> 00:44:48.811
Dave Stech: If you look at Redfin's Homebuyer Demand Index, which is built off requests for tours and other homebuyer services, it's down 21% year-over-year, which is as low as it's been at any point since COVID.


264
00:44:49.471 --> 00:45:06.081
Dave Stech: So, these are people that are raising… these are people raising their hands and saying, I'm not interested, not just those that are poking around online. And there's 21% fewer of them now than there were when interest rates were a full point higher.


265
00:45:07.051 --> 00:45:11.790
Dave Stech: Which brings us to the most anemic part of what's going on in the market now.


266
00:45:11.951 --> 00:45:27.051
Dave Stech: pending sales. Those are basically contract signs, and those are the things that we measure prior to there being a sale. So we can't look at solds until we look at what's happening with pending sales, and in a word, they're anemic.


267
00:45:27.211 --> 00:45:38.831
Dave Stech: The pending home sales index fell almost 1% in February to 72.1, which is essentially in line with the lowest levels ever recorded.


268
00:45:38.941 --> 00:45:52.571
Dave Stech: And that's before the war broke out, when mortgage rates had fallen into the low sixes and even high fives toward the end of February. So how do we reconcile this rising applications with falling showings and pendings?


269
00:45:52.751 --> 00:45:53.841
Dave Stech: Pretty simple.


270
00:45:54.571 --> 00:45:57.410
Dave Stech: The fact that mortgage rates are improving


271
00:45:57.691 --> 00:46:04.681
Dave Stech: Pulls back people to the application desk, although they went in the opposite direction in the last few weeks.


272
00:46:04.811 --> 00:46:16.021
Dave Stech: That's a low commitment action, though, to actually sign an application. It's often a pre-approval refresh, a payment check, or, hey, can I qualify now moment?


273
00:46:16.021 --> 00:46:25.081
Dave Stech: Nothing more than that. It doesn't put prospective buyers into the car to tour homes, and it definitely doesn't force them to sign contracts, which is what we're seeing.


274
00:46:25.091 --> 00:46:35.751
Dave Stech: So what's happening? Well, the funnel's widening at the top, narrowing at the bottom, which is exactly what you'd expect from what I described in the economics section as a low liquidity market.


275
00:46:35.961 --> 00:46:54.110
Dave Stech: You could even say the demand funnel is leaking, because it shows up in two stages. Buyer traffic is down, because when people run the numbers, many still don't like the payment, or they like it, but only for a small subset of affordable homes, let's say. So the process stops at looking, not touring.


276
00:46:54.291 --> 00:47:00.190
Dave Stech: And that's why we see on-the-ground indicators stay weak even as applications pick up.


277
00:47:00.411 --> 00:47:02.051
Dave Stech: And then the final leak.


278
00:47:02.221 --> 00:47:03.691
Dave Stech: That's conversion.


279
00:47:03.871 --> 00:47:17.691
Dave Stech: Pending sales are down because the deal is harder to close than it looks on paper. Sellers are still anchored at yesterday's price, so they're not willing to cave. Buyers, on the other hand, are more conditional, so we're seeing those negotiations


280
00:47:17.861 --> 00:47:24.261
Dave Stech: In terms of inspections and concessions and financing terms, all happening at the margin.


281
00:47:24.391 --> 00:47:31.401
Dave Stech: And the result is a market where more people re-enter the funnel at the top, but fewer make it through to the bottom.


282
00:47:31.841 --> 00:47:35.881
Dave Stech: Which leads me to ask Andrew to pop up another poll.


283
00:47:36.001 --> 00:47:51.710
Dave Stech: Because what we're going to talk about next is flipping as sort of the harbinger for what's going on in the real estate market. So, here's my question. In a market like this, what do you think matters more to flippers who are trying to close deals?


284
00:47:51.971 --> 00:48:08.031
Dave Stech: And you only get one choice. Is it the lowest possible interest rate? Is it speed and certainty of closing? Or is it higher leverage, where they can get me, as a private lender, to lend at a higher loan-to-value on after-repair value?


285
00:48:08.171 --> 00:48:09.280
Dave Stech: Which is it?


286
00:48:09.921 --> 00:48:15.260
Dave Stech: In a market like this, what do you think matters more to flippers who are trying to close deals?


287
00:48:15.861 --> 00:48:24.821
Dave Stech: The lowest possible interest rate is A, speed and certainty of closing is B, or higher leverage. They want to get more money.


288
00:48:25.161 --> 00:48:26.491
Dave Stech: What do you think it is?


289
00:48:27.391 --> 00:48:41.431
Dave Stech: Andrew, when you think you've got enough empirical data to tell me, then we'll go from there. I'm curious. And by the way, remember, those of you on this call understand real estate. You certainly understand flipping, and you've seen enough


290
00:48:41.441 --> 00:48:51.261
Dave Stech: shows. By the way, it turns out many of you have actually done loans. About, what, 45%? The other 55 or so have not.


291
00:48:51.391 --> 00:49:01.731
Dave Stech: But it's not. To your point here, A, the lowest possible interest rate, only 6% of you answered that. And you're right. That's why private lending


292
00:49:01.931 --> 00:49:19.980
Dave Stech: and private lenders are doing so well in this market compared to real estate investors or operators. Is it the speed and certainty of closing? 53% of you say it is, and is it higher leverage? In other words, getting more money, a higher loan to value, so borrowers don't have to put as much down?


293
00:49:20.061 --> 00:49:33.460
Dave Stech: 51%. So, you've voted 6% being the lowest interest rate, and most of you, 94% of you, believe they just want more money, or they want it quicker. And you're absolutely right.


294
00:49:34.041 --> 00:49:44.761
Dave Stech: So that takes us to flipping as we finish out the housing market, and then we'll get into conclusions, but I think you're going to find this interesting, especially because 56% of you


295
00:49:44.761 --> 00:49:55.530
Dave Stech: haven't done any lending, and 44% of you, I believe, have, which means you're interested in, sort of, the state of the flipping market, not just the state of the real estate market.


296
00:49:55.701 --> 00:49:57.931
Dave Stech: So, why would I talk about flipping?


297
00:49:58.591 --> 00:50:17.211
Dave Stech: Flipped homes only represent 8% of all the existing home sales. What's the other 92%? It's homeowners who are buying a home. They're either buying a first home, they're moving up, they're moving out, they're getting a second home. Only 8% of all resales are flippers.


298
00:50:17.331 --> 00:50:42.121
Dave Stech: Well, flippers are a reliable edge indicator when we look at overall market conditions. They're the definitional price-sensitive marginal participant that I just talked about in the economics section. They're the buyer who leaves first when the deal doesn't pencil, which is often how the market discovers the clearing price before the market reacts. What's a clearing price? It's where demand and supply are exactly equal.


299
00:50:42.121 --> 00:50:42.791
Dave Stech: equal.


300
00:50:42.791 --> 00:51:07.100
Dave Stech: And the price is very clear. It just gets negotiated, and we're good to go. In short, flippers operate on thin time windows and tighter spreads, so they have to react faster than everybody else. They have to cut price. They have to make concessions. They have to do whatever they can to market a better property. Maybe they have to, you know, do a better rehab. Maybe they have to stage the property.


301
00:51:07.431 --> 00:51:17.421
Dave Stech: Well, fix and flipper sentiment got a fair bit rosier to end last year, which you gotta love seeing if you're a private lender like myself and my sons are.


302
00:51:17.651 --> 00:51:31.240
Dave Stech: Sure, surveyed flippers have consistently rated market conditions as better than flat, because generally speaking, flippers are optimistic, but they're more guardedly optimistic at some points in the market cycle.


303
00:51:31.311 --> 00:51:39.001
Dave Stech: And especially during what I call real estate winters, where things get tough, and it's been tough on flippers for the last year or two.


304
00:51:39.181 --> 00:51:51.841
Dave Stech: But they're getting more optimistic, as you can see to the far right, where flipper sentiment jumped to 62, 62%. That means 38% are not as optimistic.


305
00:51:51.841 --> 00:52:01.360
Dave Stech: So, optimize… optimism has been sliding closer and closer to flat until the last quarter, where flippers are now saying they're more optimistic about the market


306
00:52:01.361 --> 00:52:18.541
Dave Stech: than they have been for 6 quarters since 2024. That's the largest uptick in quarter-over-quarter jump in 3 years, which does my heart good. And flip volumes in 2025 were essentially flat year over year.


307
00:52:18.561 --> 00:52:36.501
Dave Stech: We have, we've created software through our experience in the technology space, and particularly giving credit to my son and his data scientists, where we can actually look at all the flips that are done in all the markets to make decisions about where we want to place our bets.


308
00:52:36.501 --> 00:52:56.500
Dave Stech: And our data analysis has the year-end total at 245,000 true flips. Those are homes that were bought specifically with one purpose, renovate and resell. We've excluded what we call the wholesaler pass-throughs, and the big companies that are wholesaling, like iBuyer.


309
00:52:56.501 --> 00:53:09.530
Dave Stech: the iBuyer churn, like Opendoor and Offerpad, and just incidental resales. So, as you can see, quarterly volume is down from the peak in 2021, but it's still running well above


310
00:53:09.531 --> 00:53:16.570
Dave Stech: pre-2020 baseline. So, pre-COVID, flipping is happening more now than it was before COVID.


311
00:53:16.591 --> 00:53:20.941
Dave Stech: It's not as frothy as it was during the maximum buyer euphoria.


312
00:53:20.971 --> 00:53:35.700
Dave Stech: But after some obvious cooling, you can see that the volumes have stabilized over the last few years. Lower overall… or what's important here is in a lower overall inventory, higher rate world, that's notable.


313
00:53:35.701 --> 00:53:44.920
Dave Stech: Rates of, interest rates have gone up considerably over the last 3 or 4 years, and we have low overall inventory, and yet, you can see that volume


314
00:53:44.921 --> 00:53:51.550
Dave Stech: hasn't been impacted nearly as much. And here's the even better news. Gross return on investment


315
00:53:51.671 --> 00:53:58.340
Dave Stech: Has trended down in the past, but now it's trending… it's been trending up since 2023.


316
00:53:58.651 --> 00:54:04.381
Dave Stech: And that almost sounds counterintuitive. How can flippers be profiting more in a tighter market?


317
00:54:04.431 --> 00:54:20.280
Dave Stech: And what you have to remember is that it's a spread business, because when rates rise and the market gets choosy, a lot of the amateurs who went to a seminar and were told, you can get rich by tomorrow at 4 o'clock if you give me a lot of money, well, those folks


318
00:54:20.301 --> 00:54:35.791
Dave Stech: are no longer in the market. Those light rehab people have stepped back, because they don't understand median and heavy rehabs, so it's put less bidding pressure on ugly inventory where many of the true pros live.


319
00:54:35.791 --> 00:54:47.661
Dave Stech: So, you see this when you look at metros. There are 405 metropolitan statistical areas in the U.S. which are generally population bases of a certain amount or more.


320
00:54:47.661 --> 00:54:57.810
Dave Stech: And that includes Puerto Rico, and it includes Guam. So, 403 are in the U.S, and then there are 2 territories. If you look at the top 15 ROI list.


321
00:54:57.891 --> 00:55:14.620
Dave Stech: It's basically a collage of the older industrial markets. Pittsburgh, Youngstown, Akron, Cleveland, Toledo, Buffalo. That's the signature of a flip market where ROI is driven by cheap entry and fixable housing stock, but a lot of deferred maintenance.


322
00:55:14.751 --> 00:55:35.821
Dave Stech: There are a lot of older homes where move-in ready supply is scarce, especially relative to demand. So if flippers effectively convert dated inventory into the middle of the buying pool, they're gonna win. And that's why you get these very high ROIs in markets that no one else would describe as booming, but because there's a lot of deferred maintenance.


323
00:55:35.821 --> 00:55:43.811
Dave Stech: When I entered Vegas in 2008, when the market was imploding, the median age of a home was 15.6 years old.


324
00:55:43.811 --> 00:55:55.760
Dave Stech: In Buffalo, at the same exact time, it was 55 plus years old. That's why I chose Vegant, because I could get in, get out, profit, move on, while the market was dropping in price.


325
00:55:56.021 --> 00:56:06.911
Dave Stech: And there's an important caveat. Gross ROI, though, is not investor ROI. You see, ROIs are purchase to resale spreads, where in low-priced markets.


326
00:56:06.911 --> 00:56:16.200
Dave Stech: Rehabs can be a bigger share of total cost, because there are a lot of surprises, and they matter. So net returns can look different from gross returns.


327
00:56:16.321 --> 00:56:23.570
Dave Stech: High gross ROI doesn't automatically mean easy money, because it doesn't factor in the cost of rehab.


328
00:56:23.641 --> 00:56:29.900
Dave Stech: And it often means there's older housing, more execution risk, more dispersion by neighborhood.


329
00:56:29.901 --> 00:56:45.020
Dave Stech: Well, in 2008, I specifically chose Las Vegas because I'd be able to buy light to no rehab inventory like a drop-in sailor. We were buying up to 3 homes a day, and our turn times had to be quick because the market was dropping in price every day.


330
00:56:45.331 --> 00:56:47.891
Dave Stech: Well, look at after repair value.


331
00:56:48.191 --> 00:56:53.880
Dave Stech: More flippers are hitting their targets now than the previous quarter, which is why they're more optimistic.


332
00:56:54.171 --> 00:57:12.591
Dave Stech: It turns out that the share of flippers selling mostly below expected ARV improved to 17% from 21%. Now, it was roughly 17% to 18% for the 5 straight quarters, but it did improve to 21%, which basically means that the exit environment is stabilizing.


333
00:57:12.641 --> 00:57:20.411
Dave Stech: Pricing pressure is easing, and the flippers are cutting price faster than typical sellers or homeowners when things slow.


334
00:57:20.621 --> 00:57:23.421
Dave Stech: Flippers are bullish about next year, or this year.


335
00:57:23.711 --> 00:57:35.351
Dave Stech: In 2023, 40% were bullish, the next year, 49%, the next year, 66%, and in 2026, 71% of flippers expect to flip more.


336
00:57:35.451 --> 00:57:54.691
Dave Stech: Which, as I said, is music to my ears. So, let me quickly summarize conclusions. As fellow investors, there's one thing we can all agree on. There's no one on this call that can disagree with the fact that it's incumbent upon all of us to make risk-adjusted investment decisions that are the best


337
00:57:54.831 --> 00:57:58.130
Dave Stech: That we can at every point in the market cycle.


338
00:57:58.301 --> 00:58:04.501
Dave Stech: Well, our family and family office is no exception. We're on a constant quest to figure out


339
00:58:04.601 --> 00:58:16.601
Dave Stech: what to do next. What's coming next, and where do we place our bets? So, let me ask you a question. What one passive investment strategy do you truly believe in right now.


340
00:58:16.621 --> 00:58:31.941
Dave Stech: Where you are excited to bet on her. You can feel confident enough to have conviction that it'll safely generate double-digit annualized passive recurring income in this overpriced, overheated, volatile, uncertain market.


341
00:58:32.301 --> 00:58:50.640
Dave Stech: Well, let's walk through it objectively together. You probably know what I believe, because you know what we do. But let's be objective, because ultimately, I will do anything that is the right thing to do at this point in the market cycle, and we literally have 3 things at any point in any market cycle.


342
00:58:50.751 --> 00:59:08.221
Dave Stech: We have strategies, blueprints, and opportunities. We have identified everything we need to do at any point in the market cycle based on looking at the last four market cycles over the last 30 years. And so when you have that, it's just a matter of doing


343
00:59:08.271 --> 00:59:12.700
Dave Stech: Whatever the market tells you, we only take what the market gives us.


344
00:59:12.941 --> 00:59:19.440
Dave Stech: Well, how's the stock market? Well, I don't know about you, but it's pretty uncertain. I can't believe it's still trending up.


345
00:59:19.971 --> 00:59:36.421
Dave Stech: If you look at the Buffett indicator, though, which compares the total value of the stock market to gross domestic product, it's been above or well above the historical trend line of what is considered a fairly valued market. And one would think that Warren knows what he's talking about.


346
00:59:36.601 --> 00:59:49.470
Dave Stech: What I said at Harvard back in 2005, when the market was at or near the peak, in my opinion, hasn't changed at all. Look, any market that's at or near the top, where there is a record high.


347
00:59:49.471 --> 01:00:08.541
Dave Stech: by definition, has more downside risk than upside potential, because it's at the peak, not at the bottom. At the bottom, it's got more upside potential than downside risk. But when you're at or near the top of a market, a little push in the opposite direction, and all of a sudden, a strong but uncertain market could unravel dramatically.


348
01:00:08.571 --> 01:00:10.091
Dave Stech: And it could be, again.


349
01:00:10.131 --> 01:00:19.451
Dave Stech: How about other asset classes like precious metals, oil and gas, or crypto? Look, if you actually understand those classes, more power to you. I don't.


350
01:00:19.541 --> 01:00:23.821
Dave Stech: I don't even want to. And here's why, and this is so important.


351
01:00:23.921 --> 01:00:31.450
Dave Stech: If you even understood those asset classes, you must agree you cannot control the outcome.


352
01:00:31.451 --> 01:00:44.540
Dave Stech: If you're a flipper, you can control the outcome in your real estate deal. Sure, the market can move, interest rates can be high, but you price that in to the price you pay and the amount of rehab that you do.


353
01:00:44.721 --> 01:00:52.230
Dave Stech: Where, in these other asset classes, you can't control the income, or the outcome, rather, which means you can't control your income.


354
01:00:52.281 --> 01:00:54.850
Dave Stech: Plus, you don't know who's pulling the strings.


355
01:00:54.891 --> 01:01:06.850
Dave Stech: would you have anticipated 2 months ago that we'd have a war in Iraq and now prices of oil would have gone up? Or any of the other number of things that have changed as a result of Trump's decisions?


356
01:01:06.851 --> 01:01:14.031
Dave Stech: And some people may say, yeah, but won't the Fed solve this eventually? Won't things go back to normal like 2022?


357
01:01:14.031 --> 01:01:28.201
Dave Stech: And I get why people ask that, because they think Fed rate cuts, they think that Trump wants Warsh in office, and as a result, they think back to free money, cheap leverage, asset prices going to the moon. But that is not how it works.


358
01:01:28.281 --> 01:01:45.940
Dave Stech: When the Fed cuts rates, it takes years to play out. They're often erratic. The Fed has cut the rate in the last 2 years 1.75%, or 175 basis points, and interest rates have gone up 0.5%, gone up.


359
01:01:45.991 --> 01:01:59.670
Dave Stech: Well, it takes a while, because they're linked to different things, and you can still end up in a world where money isn't cheap, credit isn't loose, and borrowers still have to pay for speed and certainty. So if you're thinking, when are we back to the good old days?


360
01:01:59.671 --> 01:02:08.771
Dave Stech: That's not the plan, or that's not a plan, that's a hope, and it's not one to build an investment strategy on, because we know that hope is not a strategy.


361
01:02:08.911 --> 01:02:11.690
Dave Stech: What about commercial and multifamily real estate?


362
01:02:11.951 --> 01:02:25.770
Dave Stech: Well, we've all heard the nightmares. Values plummeting, vacancies up, rent's softer down, OPEX is way up, NOI is down, and so you're going to hear a lot of syndicators and a lot of promoters talking about


363
01:02:25.771 --> 01:02:37.320
Dave Stech: Boy, things are just… we're in a distressed land. This is when we're going to make our money. And maybe there's an argument for trying to get in now due to the level of distress. Here's what I want you to ask yourself.


364
01:02:37.571 --> 01:02:41.070
Dave Stech: Do you know what you're doing in commercial real estate?


365
01:02:41.351 --> 01:02:45.690
Dave Stech: I can tell you 99% of people don't, and I don't profess to.


366
01:02:45.911 --> 01:02:57.780
Dave Stech: And is the distress over? And the answer is, and this is what you're not… you're not being told, there's $2 trillion in debt that's coming due over a 2-year period.


367
01:02:57.781 --> 01:03:12.520
Dave Stech: Maybe a little over 3, and 1.26 trillion of that. 63% of all of that debt is hitting a maturity wall next year. So if you think things are bad, and they have been, imagine where we're heading.


368
01:03:12.791 --> 01:03:14.741
Dave Stech: What about single-family rentals?


369
01:03:14.791 --> 01:03:22.321
Dave Stech: Not a bad choice. If you're going to be in real estate, not a bad choice, but we all know the 1% rule for single-family rentals.


370
01:03:22.321 --> 01:03:35.111
Dave Stech: Where, if the gross rent you expect to collect each month equates to 1% or more of the property's acquisition price, you can pretty safely assume the property will generate healthy, positive cash flow.


371
01:03:35.321 --> 01:03:40.240
Dave Stech: Now, think for a moment about the median price in your area, because that's important.


372
01:03:40.411 --> 01:03:46.991
Dave Stech: Nationally, it's over $400,000. So is that $400,000 property going to rent for $4,000 a month?


373
01:03:47.151 --> 01:03:49.211
Dave Stech: No, of course it's not.


374
01:03:49.341 --> 01:04:03.140
Dave Stech: not on an annual lease, and maybe not even as an Airbnb or a pad split where we're pretty sizable investors, or maybe you buy a price… a property that's half that much in order to close the rent-to-price ratio gap.


375
01:04:03.441 --> 01:04:13.760
Dave Stech: By the way, you're only looking at gross rent. We all need to know, and those of you who are investors in real estate, and rentals in particular, already know that mortgage payments


376
01:04:14.131 --> 01:04:29.511
Dave Stech: Are something that have gone up because the cost of financing has gone up. HOA fees are increasing. There are increasingly more special assessments, insurance has gone through the roof. Maintenance has gone up. OPEX has gone up, taxes have gone up.


377
01:04:29.511 --> 01:04:35.501
Dave Stech: All of this has increased. All of these things have increased faster than inflation since COVID.


378
01:04:35.501 --> 01:04:43.470
Dave Stech: So, I love single-family rentals. I don't love them now, because we're at or near a peak where it's not the best alternative


379
01:04:43.591 --> 01:04:52.101
Dave Stech: And especially for those of us who care about effort-to-return ratio. So, the good news is, and we look at all of this every quarter.


380
01:04:52.161 --> 01:05:00.950
Dave Stech: There's one strategy that's been benefiting from the kind of environment that I've talked about, where borrowers have to pay up for velocity and certainty.


381
01:05:00.961 --> 01:05:05.480
Dave Stech: And that's private money lending, or hard money lending. You see.


382
01:05:05.480 --> 01:05:21.120
Dave Stech: Smart real estate investors pivot through a market cycle to optimize risk-adjusted returns. Our wealth has largely been accumulated through getting in, getting out, profiting, move on, depending upon where we are in the market cycle.


383
01:05:21.230 --> 01:05:40.371
Dave Stech: And if you just look at being in cash, or flipping or holding, or doing private lending, at different points in the market cycle, we move our money, because we want to optimize returns. We don't take the lazy investor away and hope that real estate goes up and to the right, and that rents do the same thing.


384
01:05:40.501 --> 01:05:42.171
Dave Stech: Well, before.


385
01:05:42.231 --> 01:05:53.811
Dave Stech: Or as the real estate market softens, we reduce our hold exposure, we increase our cash and private lending to our investors. And then when the market is at or near the bottom.


386
01:05:53.811 --> 01:06:06.461
Dave Stech: we start taking more equity risk, where we do more flips, we do more holds, because we're going to get better returns. And then, we lean into even more flips as the market is heading north.


387
01:06:06.641 --> 01:06:18.001
Dave Stech: And we generate higher returns. Cash flow and appreciation. And remember, appreciation comes in three forms. Instant appreciation, where you buy it for less than its as-is value.


388
01:06:18.001 --> 01:06:28.650
Dave Stech: Forced appreciation, where you rehab the property and increase its value, and market appreciation. When you've got all three of those things working for you, and leverage.


389
01:06:28.781 --> 01:06:30.501
Dave Stech: And cash flow?


390
01:06:31.201 --> 01:06:35.941
Dave Stech: It's like cheating, only legal. Well, that's where we believe we are.


391
01:06:36.031 --> 01:06:45.651
Dave Stech: where we're at or near the peak in residential. Doesn't mean it's going to collapse like it did in 20… 2007. It just means that we can't get the returns that we'd like.


392
01:06:45.741 --> 01:06:48.531
Dave Stech: So, our family office, as I said.


393
01:06:48.621 --> 01:07:03.711
Dave Stech: And strategies and blueprints, and we seize opportunities at every point in the market cycle. And when we're at or near the peak of a real estate market, we shift our strategy from buying real estate to own it long-term, to controlling it short-term.


394
01:07:03.761 --> 01:07:14.661
Dave Stech: to generate the greatest possible returns with the least amount of risk. You see, when you control real estate rather than own it, and especially in your self-directed Roth.


395
01:07:14.661 --> 01:07:24.020
Dave Stech: You're protecting against the downside risk of market depreciation of that asset, while simultaneously looking for double-digit passive recurring income.


396
01:07:24.031 --> 01:07:32.351
Dave Stech: And tax-free. So you get a better market, or until a better market or a greater investment opportunity presents itself.


397
01:07:32.561 --> 01:07:42.771
Dave Stech: That has always been our family office strategy. It works really well. So, in a market like today, I'd recommend you shift to short-term investing.


398
01:07:42.901 --> 01:07:55.580
Dave Stech: flipping or backing flippers, and doing private lending, because right now, the market is so uncertain, you gotta get in, get out, profit, move on. Get in, get out, profit, move on.


399
01:07:55.791 --> 01:08:10.831
Dave Stech: So, are there still deals out there in any of these asset classes? Well, let me finish by saying, of course there are. There's always a deal out there in any market at any moment, but right now, great real estate deals. Great deals outside of real estate.


400
01:08:10.931 --> 01:08:24.581
Dave Stech: Except for technology companies, are kind of like needles buried in haystacks at risk, where we're not looking for the haystacks so much, we're looking for a deal where the needles come to us.


401
01:08:24.871 --> 01:08:26.171
Dave Stech: And that's important.


402
01:08:26.301 --> 01:08:28.350
Dave Stech: So, I'm gonna wrap it up.


403
01:08:28.501 --> 01:08:39.120
Dave Stech: What should you do about what you learned today? If the roles were reversed and I were you, I'd probably do three things. The first thing is make THE economy your economy.


404
01:08:39.471 --> 01:08:51.500
Dave Stech: Until you figure out what's going on in the economy, you can't place more informed bets to be able to maximize the amount of cash you can generate, active, passive, and recurring.


405
01:08:51.621 --> 01:09:01.030
Dave Stech: the number of assets that you can accumulate wealth from, and the amount that you can keep. So, our strategy, and feel free to cheat off us.


406
01:09:01.051 --> 01:09:18.270
Dave Stech: is to do real estate at the right time in the market cycle. As I said, we love real estate, and we've made a fortune in real estate, but that's not our play now. It's private lending, where we can get double-digit passive recurring income tax-free in a Roth.


407
01:09:18.301 --> 01:09:20.210
Dave Stech: Or, in any other vehicle.


408
01:09:20.321 --> 01:09:28.181
Dave Stech: We love real estate for appreciation and leverage, but how much appreciation and how much leverage can we do now? Not like we used to.


409
01:09:28.181 --> 01:09:40.401
Dave Stech: But we can scale our private lending business, and we're also doubling down on early-stage technology, because it's giving us outsized returns. And we've invested in over 100 early-stage companies in the last


410
01:09:40.411 --> 01:09:41.651
Dave Stech: 4 years.


411
01:09:42.131 --> 01:09:43.361
Dave Stech: And of course.


412
01:09:43.771 --> 01:09:58.090
Dave Stech: optimize your Roth self-directed IRA, pay nothing in tax, or in our case, my case, I live in Puerto Rico. That's what I'm looking at right out the window right now, where I have two tax treaties that allow me to


413
01:09:58.101 --> 01:10:07.571
Dave Stech: pay 0 or 4% tax. So, you can imagine what my combined rate is. Where every single day, I want you to be able to do what we do.


414
01:10:07.571 --> 01:10:10.581
Dave Stech: We make double-digit passive recurring income.


415
01:10:10.581 --> 01:10:30.411
Dave Stech: And that's supposed to be mostly interest income, not lossly. Mostly interest, regardless of our active income, we reinvest it to accumulate wealth, we keep more of both, and we increasingly optimize our effort-to-return ratio by doing the things that give us the best return with the least amount of effort, all from a backpack anywhere in the world.


416
01:10:30.481 --> 01:10:33.381
Dave Stech: That is financial, time, and global freedom.


417
01:10:33.901 --> 01:10:53.701
Dave Stech: In a nutshell. Second thing is, make sure to attend Part 2 of this webinar. You can see how much research I covered, I just couldn't cover it all. I'll talk about the one strategy that our family office is doubling down on in 2026 and 7, and I'm also gonna, make you, or make available to you.


418
01:10:53.701 --> 01:10:57.440
Dave Stech: These three e-books, they're advanced.


419
01:10:57.441 --> 01:11:09.030
Dave Stech: But they start by kind of dumbing everything down, but I can tell you that I've never written more on a topic that was more easy to implement than here.


420
01:11:09.141 --> 01:11:25.801
Dave Stech: So, you get that free just by attending Part 1 and Part 2. So, that's how you attend Part 3, or Part 2, rather. If you'd like to be invited to Part 2, if you'd like to be added to our Market and Investment Alerts list, just scan the QR code.


421
01:11:25.801 --> 01:11:35.721
Dave Stech: Or, if that's not convenient for you, just go to accessinsiders.com forward slash entrust, and that will take you exactly where you need to be.


422
01:11:35.931 --> 01:11:50.290
Dave Stech: So, I hope that was helpful, I hope you got value out of it, and if you did, thank you, because recognition feeds the soul, and I want to thank Bill and Andrew for having invited me, and Bill, I think it's time to turn it back over to you.


423
01:11:53.181 --> 01:11:58.520
Bill Neville: Alright, let me get back on here. Go ahead and… so, if you guys have questions, go ahead and,


424
01:11:59.331 --> 01:12:01.491
Bill Neville: Go ahead and start typing them in.


425
01:12:01.671 --> 01:12:04.200
Bill Neville: I just have a couple of things to…


426
01:12:04.841 --> 01:12:16.280
Bill Neville: say here, go ahead to the next screen. So, if you want to, open, if you don't have an Entrust account and you want to open one, you can do it just… we have an online portal to open the account.


427
01:12:16.491 --> 01:12:31.050
Bill Neville: It takes maybe 10 or 15 minutes to get that entered in, then you fund your account. You can either transfer from an existing IRA, roll over from a 401K or other qualified plan, or make an annual contribution, and the final step is you direct us to make the purchase.


428
01:12:31.051 --> 01:12:37.040
Bill Neville: If you do want to open an account, if you want to contact me, and we'll leave our contact information up here, I can…


429
01:12:37.971 --> 01:12:43.091
Bill Neville: Provide you a promotion code to waive our $50 new account fee, so just reach out to me.


430
01:12:43.291 --> 01:12:47.961
Bill Neville: Coming up next, our next webinar,


431
01:12:48.831 --> 01:13:02.210
Bill Neville: real estate investing with debt versus equity, which is right for your strategy. And, we do send out this, this email. We send out, an email with all the… with a link to this one, so,


432
01:13:02.731 --> 01:13:08.021
Bill Neville: those of you who are still on here, I don't know if you're still gonna win it, but, you will get that email.


433
01:13:08.411 --> 01:13:14.850
Bill Neville: Question answers, we're up. Go ahead to the next, screen, Dave. I think it's gonna have our contact information.


434
01:13:15.431 --> 01:13:19.050
Bill Neville: I hope, yeah. So… There's… we'll just leave that up.


435
01:13:19.191 --> 01:13:29.610
Bill Neville: So if you do have, you know, if you, like I said, if you want to open an account, you want to get our new account fee waived, just reach out to me. There's my email or my phone number if you have any questions, and then


436
01:13:29.721 --> 01:13:43.571
Bill Neville: Same thing with Dave. So, at this point… If anybody has any questions, I'm not seeing anything… Yet.


437
01:13:44.461 --> 01:13:56.961
Dave Stech: Yeah, and by the way, if there aren't any questions, but you want to… I mean, I'll show that QR code, because I went through it pretty quickly before, but if you need to, just complete that form, and if you've got a question, just ask it.


438
01:13:56.961 --> 01:14:04.971
Dave Stech: But it's pretty simple, and you're welcome to do that. So, yeah, I'll stay on. In fact, I always joke that I'll stay until I outnumber you.


439
01:14:05.151 --> 01:14:17.970
Dave Stech: So, if you guys have questions, don't be bashful. I'm happy to answer them, and if not, you're probably wondering what Part 2 is going to be all about, but we'll send you an email on that if you complete this form.


440
01:14:19.051 --> 01:14:21.260
Dave Stech: Bill, anything? Andrew, anything?


441
01:14:21.751 --> 01:14:23.501
Bill Neville: Doesn't look like it,


442
01:14:23.831 --> 01:14:29.931
Bill Neville: Sometimes this happens, where we just… there's so much information there, they don't necessarily have any questions on it, so…


443
01:14:30.201 --> 01:14:32.600
Bill Neville: I'm not seeing anything.


444
01:14:33.201 --> 01:14:38.901
Bill Neville: So, that being said, I guess, we'll let everybody go. Dave, again, we really appreciate it.


445
01:14:39.431 --> 01:14:49.990
Bill Neville: And everybody who joined, or everybody who watches this after the fact, we appreciate you taking the time, and be sure to join us next month, or every, you know, all the months after that, that we have these webinars.


446
01:14:50.441 --> 01:14:52.390
Bill Neville: Everybody have a good day. Thank you all.


447
01:14:53.041 --> 01:14:53.731
Dave Stech: Thanks.