#098: The $30 Million Mistake

Welcome to The Accelerated Investor Podcast with Josh Cantwell, if you love entrepreneurship and investing in real estate then you are in the right place. Josh is the CEO of Freeland Ventures Real Estate Private Equity and has personally invested in well over 500 properties all across the country. He’s also made hundreds of private lender loans and owns over 1,000 units of apartments. Josh is an expert at raising private money for deals and he prides himself on never having had a boss in his entire adult life. Josh and his team also mentor investors and entrepreneurs from all over the world. He doesn’t dream about doing deals, he actually does them and so do his listeners and students. Now sit back, listen, learn, and accelerate your business, your life, and your investing with The Accelerated Investor Podcast. 

Josh: So, hey, welcome back to Accelerated Investor. I am so excited to be with you as always. For all of you who have been sharing this on social media, telling your friends about it, telling fellow investors about it, entrepreneurs about Accelerated Investor joining our Accelerated Investor Facebook group. I just want to thank you for including me in part of your journey, part of your life as an entrepreneur, building your lifestyle business, your cashflow business to support you and you know, really provide an opportunity to live a life on your own terms. Today I have a special guest. His name is Rob Swanson. He’s the CEO of Freedom Soft. He is a 18, 20 year real estate investor with over 20 years of experience. He’s a close personal friend. I first met Rob over 10 years ago at multiple real estate seminars. He’s spoken on my stages at my live events and we continue to share at mastermind groups. 

Josh: He’s just an amazing investor. To give you some background about Rob, he is the CEO of Freedom Soft, which is one of the world’s best automation tools for real estate investors. He has done a hundreds and hundreds of fix and flips wholesale deals, owns a robust cashflow and rental portfolio and is the author of an upcoming book about how to profit in real estate during the upcoming recession. And that’s going to be the major talking point of today’s interview. Rob, thanks so much for carving out some time for us and our family here at Accelerated Investor. How you doing today bud? 

Rob: Hey man, I’m doing awesome. Thanks for having me. This is going to be super fun.  Appreciate it buddy. 

Josh: Yeah, you bet. You bet. So Rob and I, you know, kind of parallel kind of paths we’ve been investing for a long time. Rob is really a huge fan of automation strategies and tools, systems and process to the point where he’s actually franchised his model and his sold franchises on how to invest in real estate with the backbone of that franchise being his software Freedom Soft. We’ve been a big affiliate of his for a long, long time. So Rob, tell everybody a little bit about right now in 2020, I love to ask my guests, what are you currently working on? Literally like this morning or tomorrow, but before and after this podcast, what are some things that excite you about real estate and what are you currently working on that gets you going? 

Rob: Yeah, so a good, good question. So where I’m at today, Josh? You know, just, you know, I look back over a 20 year career and I say, okay, what’s been happening for 20 years? The good, the bad, the ugly, the ups, the downs, the sideways, and how does my experience parlay into what we’re doing today? And that kind of brings me to what I am doing and that is today we’re buying for cashflow. I think that, I think that the market is up. We know that across the country. The, you know, the economy is doing well. Things are, things are moving along nicely, but we’re starting to see the sprinkles, right? We’re starting to see the advertisements for the no doc loans again. And the easy financing and like the, the easy money, that liquidity that floods into the market that we’ve seen over the last three housing market crashes right back in 73, 74, 90, 91, 2007 eight and we’re starting to see it again. 

Rob: It’s a typical 1718 year cycle ever since. You know, the dollar was taken off the gold standard back in the 70s and, and, and debt was introduced as the primary sort of driver of, of currency. And so here we are today, I think we’re at nearing a peak. I don’t know that we’re at the peak. And we’ll talk about how this plays out differently. There’s a national economy, but then there’s, you know, every market is different. But today I think we’re up across the boards and I’m buying very conservatively on cashflow. If it doesn’t cashflow I’m not interested and I’ll give a little precursor into some of what we’ll talk about. The reason why is, we have seen in the last three housing market crashes, those timelines that I just talked about, that rents on predominantly on single-family homes, but also on well-positioned multi-family assets, rents on single-family homes and well-positioned multi-family assets go up in a crash. So all of this, this equity, the fake money that everybody is so excited about, crashes and evaporates and the real money, the cashflow that comes in and goes into Rob’s hip pocket national bank goes up. And we saw that in the last three housing market crashes. And I don’t expect the next one to be that different. Yeah so that’s where we’re at. 

Josh: Fantastic. So investing for cashflow is where it’s at. And as we kind of got ready for this interview, we’ve started to move our assets from fix and flip investing, fix and flip lending, buying and flipping to buying and holding. Matter of fact, we’re even lending more on smaller and smaller and smaller rehabs to our borrowers for the purchase of acquisition. And basically what we call stabilization, not necessarily massive flip rehab projects. Not $50,000, $80,000 a $1000,000 thousand dollar rehab budgets, but you know, $8,000 and $10,000 and $15,000 and $22,000 rehab budgets for the sake of stabilization to immediately refinance into longterm financing. So much so that we now do the acquisition finding financing and the 30 year permanent financing. We have a  couple of different crowd funding platforms and life insurance companies that love that longterm paper. So we’ve begun to move that way as well. 

Josh: Getting ready for this. Rob, you told me about your, you saw the crash coming of 2008, 2007 you were doing fix and flips back then and you made a $10 million mistake, something that you learned from, you know, 12, 13 years ago. So let’s talk about that. What did you learn from the 07, 08 crash of what you were doing then and how is that also helping you to position yourself this time around? 

Rob: Yeah, so it was actually a $30 million mistake. What we did back in 2008, I put a $10 million real estate fund together. I here in 2004 I started tracking markets. I’ve done a lot of virtual investing, investing remotely across the country, probably invested in 20 some different states and 35 or so different cities across the country. And so we started tracking markets. We were tracking the weekly performance of over 8,000 cities in 43,000 zip codes across the country. And what we could see was this tipping coming. I wasn’t, you know, I’m not an economist, but I was certainly looking at the supply and demand triggers and kind of how liquidity in the market was affecting things. And so I sold out of my real estate portfolio in about 2006, early 2007, good timing. And when the market went into free fall, it was about August 13th of 2007 I got a phone call from a buddy of mine and he said, Hey my business is gone. 

Rob: And I said, what do you mean man? It was like a Wednesday morning. And he’s like, wall street stopped buying all the debt. August 13th, 2007, the liquidity just evaporated out of the market. And so when that happened, everything started to free fall. Prices started to drop. Everything started to happen. And I saw it as an opportunity. I, you know, the old saying, you know, when there’s blood in the streets, you know, go. So that’s why I started to put together a fund at that time and I ended up with a $200 million capital partner out of Stanford, Connecticut. They carved off and gave me a tiny little $10 million traunch of their money and said, go to work. And we did, we went to work, we bought and we sold and we fixed and we flipped and it was great. 

Rob: We made a lot of money doing it and we built a lot of systems and it was a wonderful time. But here’s all Josh, here’s the thing. Then all of the old crusty chain smoking and hard money lender guys and note buying guys in town here that I knew were all telling me, Rob, you’re young, you got access to the money. Here’s what you do, kid. You know, they’re telling me buy everything you can get your hands on board them up, disconnect the utilities and then just rehab them as you can get to them and put tenants in them as you go. But they said, do not let construction hold you back from buying. What did I do? I reserved the right to say but Bernie, I don’t know, man. This one feels different. And he’s like, well, you know about feeling.

Josh: What do you know young man?

Rob: Yeah. What do you know? So I did it. I did it wrong. If I would have taken the $10 million spent every dime, bought everything I could have, I would’ve, with no work, I would have turned that $10 million into $40 million. So it was a $30 million mistake. And it really got me understanding and focus when I look back now and realize, man, you know, wealth is built in real estate by buying and holding real estate. It’s not built by  flipping real estate. You make good money, you’re a high income earner flipping real estate and it’s wonderful. And it sometimes gives you the cash to just go pay cash for another income property. But the true wealth is built by buying and holding.

Josh: No doubt, no doubt. And so today and really for the past couple of years you’ve been positioning yourself for that. You have this book that’s going to be coming out in the upcoming year about how to profit during this crash based on, again, the things, the lessons that you learned from the 07, 08 crash. And I look forward to reading that when it comes out. I know that you do have like a almost like a prelaunch registration what it’s called cash. Give me that website again in case people want to go and get kind of preregistered for that. 

Rob: Yeah, you bet. The book is called What To Do Before, During The Next Housing Market Crash. And Josh, I’ve intentionally, like I’ve been, I’ve been talking about releasing this book for a couple of years, but I haven’t felt like the timing was exactly right. And I keep seeing different things that I’ve gone back and I’ve added and I’ve tweaked on the book. But CashInPlan.com people can go there and they can get on an early bird release. And you know, when I talk about what to do before, during and after the next housing market crash, it’s taking my experience over the last 20 years and saying, what did I do right and what did I do wrong? What have I heard along the way? What if people told me along the way and how do I take that knowledge plus the actions taken and turn that into wisdom that I can share with others? 

Rob: And there’s five market ground rules that I think about when I’m talking about a housing market crash or the housing market in general, if you will. Number one, every market is different, right? There’s a national, you know, financial currency. So there’s a global national economy, but then every market sort of reacts a little bit differently. Different price points, different economic stabilizers and all of those things. That’s rule number one. Every market’s different. Rule number two, markets always change. One of the things that I’m sure you’ve learned in real estate is that the common and most common thing that that is always the same in real estate is that things always change in real estate, right? So rule number two is market is always change. Rule number three is you can profit in both up and down markets. 

Rob: Like people don’t have to sit on the sidelines if the market’s going up or if the market’s going down, you may just have to adjust your strategy, right? And that goes back to things always change. Number four is some strategies work better at different points across the cycle. And so if you find yourself sticking a square peg into a round hole and things aren’t working, ask yourself is what I’m trying to do today aligned with the market positioning that we’re at. And number five, knowledge plus the correct action allows you to build wealth faster if you understand speculative market timing. But if you can understand market timing and how to apply the right strategies in the right positioning of the cycle, you can do a whole lot better. It goes back to my $30 million mistake.

Josh: Right. Right. So love it. So every market is different. Market is always changed. You can profit on up or down markets, strategies work different and depending on what part of the cycle that we’re in and knowledge plus action equals building wealth faster. So love those ground rules. So as you apply those ground rules to the before, during and after  the crash, let’s assume now that we’re before the crash and the during might be six months to two years away depending on who you talk to. We’re before the crash. So how do you replying these market ground rules to now? Assuming again, markets are different, which is, you know, rule number one and markets change, which is rule two, but there are, as an overall national economy, we are in a big bubble together.

Josh: Understanding that local markets change, but we’re before this crash as a nation. What specifically are you working on and are you teaching your franchisees and your students? What are some specific tactics to be working on right now before the crash? What are they doing? Are they hoarding money? Are they buying rentals? Are they, are they buying inexpensive properties, maybe multi-family, are they getting rid of fixing flips? Help me understand what are some tactics there and before the crash that you’re working on? 

Rob: Yeah. Great, great question. So right now, today before a crash, as we’re in, you know, in the real estate cycle goes up and it goes down and it goes up and it goes down. And so we’re in that riding it up. We’re not at the peak, we’re not, we’re not over the peak, but we’re riding up somewhere along the wave. And so what I, what I teach people to do in this is it, the real estate cycle is to buy conservatively on cashflow and do that in what I call price stable markets. So there are, there are two types of markets that I think about as it relates to a housing market cycle or a housing market crash. There are boom bust markets and there are price stable markets. And so I’ll give you an example.

Rob: Denver is a boom bust market, right? Denver skyrockets up and then it crashes, it skyrockets up and then it crashes. That’s the cycle, right? Seattle is a boom bust. Las Vegas is a boom bust. Phoenix was a boom bust. Lots of places in Florida were boom bust. A price stable market is like Memphis, Tennessee. So I buy a lot in Memphis, Tennessee, Memphis, Tennessee is, if you look at the price and if you look at the rents from today, over the last 30 years, they’re not that different. Yeah you know, every time we hit that upward curve, there’s a little bit of a drive up, but when it crashes, it can crash. And also the price point is so much lower that even if you get a 20% drop in market value in, in a crash that represents maybe $10,000 maybe $15,000 in total value lost. So today in an upward trending market, I like to buy for cashflow. It’s got to be net positive cashflow in a price stable market. 

Josh: It’s probably stuff in the Midwest, maybe the Southeast, excluding Florida, certainly Texas places in the middle part of the country. You know, the further you move West, the more closer you get to the coastlines, the more those boom and bust markets are happening. You know, people might talk about Texas because you know, there’s just, again, fairly stable market, but there’s also so much population migration moving there. I would imagine that’s pretty price stable. Although, you know, some of the big cities, Dallas or Houston could have a larger fluctuation simply by their pure size and some of the speculation that’s going on there. But yeah, you know, I love to invest in the Midwest. It’s not the sexiest play, but it’s again a stable, smart play. I love Cleveland, Indianapolis, Kentucky, obviously Memphis, some of those types of places are on the board. 

Josh: And I love the fact that you’re, and again, more of the, if my listeners are really listening and I know they are because they talk about it and they reply to us. So many of the guests we’ve been having lately, whether they’re investing in mobile home parks or multi-family or SFR, single-family rental portfolios, they’re all saying same thing, right? Buying conservatively for assets that cashflow very quickly. They either cashflow right no or they’ll cashflow in the next 30 to 60 to 90 days after you do a small stabilization, not something where you’re doing ground up construction that’s not going to cashflow for 18 months. Don’t do that right now, especially in a boom bust market. So Rob, any other nuggets or pieces of advice on investing before the crash before we move onto during the crash? 

Rob: Yeah. So there’s a, I always like to think about kind of that before the crash area, you’ve got early crash and you’ve got later before crash. And what I mean by that is there’s a transition point at some point in the bottom of that dip right there, you know, and you start to ride back up. You’re early, you’re before the next crash, but you’re early and that’s where you can, you really have the opportunity to cash in. And as we kind of talk through the peaking over during the crash and then what do you do post-crash? We’re going to go post-crash we’re going to talk about that after the crash on the drop down and then on the ride on that early rise backups. So yeah, we’ll get there if we keep the conversation going. 

Josh: Yeah. So almost even within these three cycles, before the crash, during and after, you’ve got too many phases in between each. You’ve got early before the crash and then closer to a coming crash. Then you’ve got early in the crash and then late in the crash. And then after the crash, early recovery and the later recovery, which is great. So let’s talk about during the crash, right? Which is what many people are probably fearing is, am I positioned to survive the crash? Like when the crashes are actually into it, which by the way, we’re not even going to know we’re into it for probably a month or two or three until we’re actually into it. You know, the market economy, the data doesn’t come out in real time. It usually comes out 30 to 90 days past due and you’re like, oh my God, we’re in a recession, right? 

Josh: And then everybody freaks out. So let’s position ourselves before the crash, which we just talked about. Now let’s assume we get the news. You know, it’s a year from now. And they’re like, yep, we’re in a recession. And the data proves that the economic growth is actually stagnant or going negative for the past 30, 60, 90 days. All of a sudden it’s during a crash. What are we doing now based on your experience to be positioned while during the crash to profit? And to be successful and survive and not only survive, but thrive during that time. 

Rob: Yeah. So here’s, there’s a couple things. There are five things that I kind of try to tell people that they’ve got to understand about moving into a crash, right? So before the crash, everybody’s euphoric. Everybody’s happy. Real estate is awesome. Everything’s going well. And then all of a sudden we get into this slowdown period. Everybody panics. We get into this kind of crash bubbly area and everybody starts to really kind of lose it. And so five things that I think help people navigate the crash. Number one is understand this, bankers make markets and bankers crash markets, right? Bankers make the markets and they drive up the values. It’s about liquidity. It’s about availability of financing and funding in the market. That’s what helps the market go up. So if understand that the crash in real estate in housing is tied to the availability of funds, you can kind of watch what loan products, what options are out there, what’s happening in the financial market to say are prices going up because of easy liquidity? 

Rob: The second thing is that, you know, number one, bankers make markets and drive up values. Number two, there’s those two types of markets, the boom and bust markets and the price stable markets. But number three, and this is a big important thing, there are three converging storms that in the last three housing market crashes. And again, Josh go to the 70s, the 90s, and then the 20 early two thousands, right or other late 2010s. Three things converge that drove that crash number one. Number one, there was a presidential transition, okay. In each of the last three housing market crashes, there was a presidential transition. That presidential transition triggered number two, financial policy changes. And number three, stock market turmoil ensued because of all of this happening. So three things came together in the last three housing market crashes, a presidential transition, financial policy change and stock market turmoil.

Josh: Wow. When I look back to 2007 2008 you have the move from president Bush to Obama, financial policy change. Along with that, you know, president Bush had that big push for everybody should own a home, homes should be affordable if they made it. They pushed on Fannie Mae, Freddie Mac and FHA to expand the underwriting criteria to make homes more affordable and then stock market turmoil happened for many different reasons. Stocks were overpriced. Also, going back to your point number one, which is the availability of funds when the market crashed and the funds literally like your buddy side, my business is gone. There’s no secondary market to buy this paper. That not only happened in real estate, but it was happening everywhere. It was happening to every business where their lines of credit, their ability to borrow was constricted, so they can’t, they can’t buy inventory, they can’t make product. They can’t build our factories because there’s no money in the system. I remember all that without the fact that you pinpointed those three are just they jump out immediately because we lived through that crash. 

Rob: Exactly. Yeah. I mean, I was an active investor during that time. I remember, I remember one day I had a line of credit out that I was using to buy and renovate you know, properties. And I remember waking up one day and that line of credit was tied to an operating account that I had for my business. And I remember waking up one day and this operating account being like wiped clean, like there was no money in it. And I’m like, what? I’m like calling the bank and I’m like, hey, I think you guys maybe made a mistake because you know, there’s supposed to be a lot of money here, but it’s not there, what’s happening? They said, Oh no, we’ve, we’ve called all our lines of credit. And because the line of credit was tied to that bank account, they legally had the right contractually to just wipe the money out of the bank account and pay off the lines of credit. 

Rob: It was unbelievable. And so that brings me to number four, which is bankers crash markets. Bankers make markets and bankers crash markets. Number one, they make it. Number four, they crash it, right. And so if you remember a minute ago I had talked about my buddy in August of 2007, well I remember that phone call so vividly and if you  go back and do some research. The federal reserve actually published a report in August of 2007 get this August, same dates. They published a report that said they now recognize that banks don’t have enough liquidity to function. So liquidity, Josh is the driver of a housing market crash. And like it just lines up so perfectly when you like take some time. Like I took the time because I looked back and I said, okay, I made a lot of money in the crash. 

Rob: I did well in the crash, but I missed the big opportunity, why did I miss the opportunity? And it was because I didn’t understand what was happening underneath the surface and I was playing on a very surface, hey, this is really good. I can make money opportunity and I didn’t understand below the surface and I’m like, I’m going to go study this and figure it out because I’m not going to miss it the next time. And so that brings us to number five.

Josh: Here it comes.

Rob: Yeah, here it comes. Number five brings us to lending ops for closures skyrocket and people rent. So if in the, before the crash today you’re buying conservatively for cashflow and the crash happens and lending stops foreclosures go up and people now are forced to rent because number one, the financing to buy isn’t available. And number two, they got foreclosed out of their house and they need a place to still live. The demand, the demand for rentals goes up. And so if you’re in single-family homes and well positioned multi-family, your position today to take advantage of that rising rent and that increasing demand, it’s just a no brainer. 

Josh: Yeah, that is phenomenal. And I love how you’re referencing back all of these real life situations that actually happened. You know, the financial reporting from the fed saying there’s not enough liquidity and then bang this, you know, banks start calling their lines of credit due because of that. Trying to create more of a balance sheet for themselves, more of a cash cushion, if you will. And yeah, I remember sitting thinking all of a sudden there’s not liquidity for people to get loans anymore, the lending criteria got tighter. Credit scores had to be way higher. The amount of money in the bank had to be way better. The amount of stability in their job had to be way better to qualify for a loan. And I do remember we flipped a ton of properties, but we were doing short sales back then. There were still lots of buyers for our short sell properties. 

Josh: But again, the only, the best of the best borrowers because the liquidity wasn’t there. People say, oh, they stopped lending. Well, the truth is they didn’t totally stop. It just became so much more tight to actually get a loan. And that’s why as you said, foreclosures skyrocket and people rent because even if you have, let’s say a decent job, but you’ve only been on the job for one year in a, in a crash, they’re going to want you to have job stability for two years or more. In today’s economy, you might be able to get alone with a 620 or 650 credit score, which is not bad. But in a real tight lending market, they want you to have credit score of 720. So those people that are on the fringe that are on the gray area today, if they’re still getting loans and they’re not like subprime, totally horrible buyers, they’re decent buyers in a retracting economy, they’re only lending to the best of the best of the best. So even the beak, let’s call them B class credit or B class borrowers, they become renters, right?  

Rob: That’s right.

Josh: Even though in today’s economy they would be a normal house buyer. Which is awesome Rob. So again, let me just feed these back. So number one things to understand during a crash. Understand that bankers make the market. Number two, you know, be aware of those boom and bust markets versus the stable markets. Number three, the three converging storms, the presidential transition, which is exactly where we’re at, potential policy change, which is exactly where we’re at. And stark market turmoil, which everybody keeps talking about. Is there going to be a Democrat, Republican, you know, those types of things. Number four, bankers crash markets, again, liquidity, the main function and the number five lending stops, foreclosures skyrocket and people rent. And now all of a sudden, even if you bought a rental property today, and again in your example, Rob earlier, you lose some of that balance sheet or paper equity. You know, your paper equity is down because prices are down, your rents go way up. And that’s what really matters, right? Is the ability to cashflow during that recession. So love those five points. So tell us about what happens after the crash then what? 

Rob: Yeah, yeah. This is where it gets fun, man. So a few things so somebody could argue and say, okay, but if we’re, if the market is already high and we’re expecting that the market’s going to drop and go down, even if we’re buying conservatively on cashflow, now all of our capital is high up and we can’t take advantage of the bottom of the market, you know, and buy low. Well, here’s why you buy conservatively on cashflow. And this is where the strategy starts to become a strategy. And where we tie all of these understandings, these proven historical things together, right? So we’ve established the demand increases and rents go up. And so if rents go up as the fake money, the equity crashes and evaporates, what do you think you could do? How can you force appreciation in a free fall market? 

Rob: Well, you can tie the value of your investments to the cashflow. And what I’m talking about here is selling owner financing because rents just went up and rents cashflow. The income is what drives an owner financing sale, right? So if you can tie the value of your real estate in the free fall to the rising demand and the rent, you can actually force appreciation, not a bank value, not a bankable value, but a market owner financed value. So now you’ve gone from owner to banker, you’ve become the banker, right. Now you have paper and let’s, let’s bring this full circle. You now have paper and you sold the paper at a premium, even though the bankable value is going down, you sold it tied to the rising cashflow. So you’ve established this forced appreciation on your assets. You’ve taken the position of banker, you’ve sold off the paper or you’ve sold and created a paper and now what do you do? 

Rob: Well, what did we say? Created this whole thing, right? Bankers created it. Lack of liquidity, stock market turmoil is one of them. You’ve got all these stock market guys that have jumped out of the stock market and the last thing they want to do is own real estate. But what do they want to do? They want to own paper cashflow, something tied to some asset that can be insured. It’s got income, it’s got stability. And so you can take your paper that you’ve now created, sell it to all these frustrated stock market guys, right? Who just got their butts handed to them. Get your liquidity back out. And then as  that free fall continues to go, you go take all your liquidity and buy at the bottom of the market and then ride it back up, buy and hold at the bottom and ride it back up. That’s how you cash in. You never have to sit on the sidelines, but you’ve got to be smart and you’ve got to do some things that most people just wouldn’t do. 

Josh: Right. And you’ve got to be, have enough foresight to be making moves. Now in the before the crash, which is exactly where we’re at and we’re at the, we’re at the latter half of the, before the crash. Because the crash is not 10 years away like it was in 2010 or 2012 it’s months or a year or two away. And be able to do that and this ties in so well, Rob, you know, our philosophies are very much the same. We’ve pivoted from a couple of years ago, as you know, we were a huge and affects and flips huge and a fix and flip lending. We had a fund, we were doing dozens and dozens of big fix and flips a year cashing in $50,000, $70,000 a hundred thousand dollars profit checks and an entire training course called 40 K Flips around it. All of that stuff has sort of seasoned out and people asked me, well Josh, how come you’re not doing big fix and flips anymore? You are the guru. There’s so many gurus out there doing fixed flips. Look, it’s because I’m not married to a strategy. I’m married to my wife and children, right, who I want to provide for, I’m not married to a technique to make money. What I’m married to is the pivot. It’s the change. It’s being flexible with what the market is giving you. 

Rob: Yup. A market gives and a market takes away.

Josh: That’s right. That’s right. And so Rob, this is phenomenal, phenomenal content. I know you’ve delivered this in keynote addresses before, so I really want to thank you for sharing this with my audience at accelerated investor. As we kind of round third here and kind of head for home with this interview, are there any other points or big takeaways or things that you’d like to just kind of pass forward as we get closer here?

Rob: Yeah. The only other thing that I want to do to kind of bring it for people is to recognize that when you’re buying in that before and during the crash kind of phase, right? Where we are today and you’re buying in a price stable market, you’re doing that because number one, the cash flow is better. And number two, the price variations even in a crash are not that great that it allows you to sell that owner financing because with all of the demand for rent, most people that just owned a home got foreclosed on and now have to rent. They would rather own than rent, but they can’t afford or they can’t get the financing for the ownership, right. 

Rob: So where they are now is owner financing buy the sense. When you see, when you create that paper, sell that paper, get your capital back and then go into the bottom of a market and ride it up. You’re transitioning from a price stable market into a boom bust market. And that’s one of the key factors today. You should be buying in a price stable market in the bottom of the crash. After the crash you want to be buying and holding in a boom bust market because a market that has the historical trend of significantly appreciating, that’s a key to the markets understanding piece of the strategy.

Josh: Yeah, and this is where, you know, we talked about boom bust or you could say appreciating or depreciating markets. If you look at all of the capital that float into real estate in 2009, 10 and 11, and all these private equity funds, hedge funds, venture  capital companies that all of a sudden became lenders and buyers, you know, companies like Blackstone and Homes For Rent. These companies that now have thirty thousand forty thousand, 50,000 single family rental units. What did they do that Rob just described when it came out of the last crash and they were, you know, 2009, 10 they all bought in boom bust markets. They bought Nashville, they bought in Charlotte, they bought in Florida. They bought in California, Seattle, Nevada, you know, Vegas, Phoenix. And what’s happened over the last 10 years, they’ve seen all that appreciation happen and into a little bit of a degree. 

Josh: Now you’re starting to see them sell off some of some of those assets, liquidating some, not all of them, but some of their assets at what would be the top of the market. It’s really, really genius. Rob, I love how you’ve tied this all back to the last cycle and how we can profit going into today’s cycle. Again guys, the website is Cash In Plan like the word cash, the word in, the word plan.com. Rob’s going to be coming out with this, you know how to profit during the next recession, how to be ready before, during and after the crash if you’re want to get some of that prelaunch content. And some of Rob’s material. Visit CashInPlan.com Rob, you absolutely brought it today with tons of amazing information to help us be profitable no matter what the cycle. Thanks so much for being here, brother. I appreciate it a lot.

Rob: Absolutely. You got it, man. Thanks.

You’ve been listening to Josh Cantwell and the Accelerated Investor Podcast. Leave a comment on our iTunes channel and let us know what you want to learn next, or who you’d like Josh to interview. While you’re there, give us some five star rating and make sure to subscribe so you can be the first to hear new episodes. Follow Josh Cantwell and his companies, the Strategic Real Estate Coach and Freeland Ventures on all social media platforms now and stay up to date on new training and investment opportunities to start your journey toward the lifestyle you’ve always dreamed of. Apply for coaching at JoshCantwellCoaching.com.  

Investors who’ve been through the last recession are in a key place to give advice about protecting assets in the coming recession. But none is quite as well positioned as Rob Swanson, the CEO of Freedom Soft, and author of the new book Cash In Plan. Rob’s $30 million mistake in the last recession has motivated him to understand what causes a crash, how to profit from one, and how to position a business to go through one unscathed.

The market is up, the economy is doing well, but we’re starting to see those ads for easy money. Those are the beginning signs of the liquidity that floods into the market right before a housing crash. Rob talks about why he’s buying very conservatively on cash and why he doesn’t count on “fake money” equity.

Rob felt pretty prepared for the last crash because he’d been tracking markets and knew just when to sell out in time. All of the hard money lenders were giving him advice that he thought was completely crazy, so he ignored it. He details how he lost out on $30 million in real estate because he was too focused on what he knew about the real estate business.

Now, Rob has 5 market ground rules for a crash:

  1. Every market is different.
  2. Markets always change.
  3. You can profit in both up and down markets.
  4. Some strategies work better at different times.
  5. Knowledge + the correct action allows you to build wealth faster.
He explains how these rules affect lending and buying before, during, and after a crash.

I’ve pivoted from fix and flips just like Rob because I’m not married to a strategy. I’m married to the pivot. If you want your business to succeed through the coming recession, you’ve got to be flexible with what the market is giving you.

What’s Inside:

  • Rob’s “Before the Crash” tactics.
  • How and why Rob uses price stable markets to build a portfolio
  • Rob explains how bankers make the markets and crash the markets.
  • At what point you want to buy in a boom/bust market.
  • Why liquidity is so important in the economy.

Mentioned in this episode​

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