Why Your Single Family Rentals Are Bad Investments in 2026

0:00At the end of this episode, that same thing is going to continue to happen. In our mastermind, you talked to our members about this. You were struck by lightning.
One person stood up stood up out of their chair and said, "Brett, this is blasphemy. Like this is I cannot believe you have the audacity." So, Katelyn, I'm not some guy that's just dunking on landlords and doing this for clickbait. I'm a guy who literally built my wealth starting in this asset class. Listeners out there, you thought you were a cash flow investor,

you were an appreciation investor with a side hustle. We all were, myself included. When costs compound faster than revenue, your margin gets eaten every SINGLE YEAR.
Welcome back to the be wealthy podcast. i'm Brett Tanner. I'm joined by the one and only Katelyn Mitchell. And today we have a little bit of a different episode. Katelyn, unlike not unlike our other ones, this may be controversial. Um we may be telling people things that go against their very belief system. Katelyn, I'm not going to go into a topic like politics or religion or where you think I'm going. Uh we're going

1:03after people's money today. And the topic is going to be one that I'm
For some people, it's religion, Brett. Some people
For some people, it is. Um you know, some people have a fiscal religion. So, it uh I'll tell you this one uh it's going to be The topic of this is why your single family rentals may suck. And the reason why we got to talk about this, Katelyn, is this is coming up um with some of my private clients that I coach one-on-one. It's coming up in our masterminds. And not in the way you would think, right? Our people are actually making the transition, which we'll talk to later, because they have the tools, they have the calculators, they understand. But when I go out in the general world and I hear this comment, Katelyn, and I'll be honest with you, when I hear it, um it's hard for me not to check out of the conversation.
What is it?
Someone says something like like, "Oh, Katelyn, I got a rental and it makes $400 a month." And it just it's I have a door and it's a wonderful beautiful property and I make $400 a month. And all I know is that that person has no idea what

2:04they're talking about because it doesn't make $400 a month. It It might have made it 1 month. For sure, that's possible. But to say that it makes it every single month is absolute lunacy. And what it And it's a bigger problem, Kaelin, people don't know the math. Right? They are buying a piece of real estate because they read Rich Dad Poor Dad, which is wonderful. And then but nowhere in the Rich Dad Poor Dad book did it say buy it, check out for 12 years, and then hope and dream and hope you land at the destination you want to be at. The book did not say that. And maybe that's another one cuz I haven't read real Robert Kiyosaki's latest book, Kaelin, but the original one the original thesis was passive income would set you free. Right? There was the two dads which were both made up. Um the rich dad was Keith Cunningham. Also not his dad, but all beside the point, Kaelin. The point of the book was passive income would set you free. And so today you and I are going to run through some math. We did a lot of research and so the data on here it's not Brett and Kaelin that did the data.

3:06So the numbers we're reading you they're from really smart people. We'll cite those institutions for you if you want to go look them up in the Bureau of National Labor Statistics. If you want to get in there, you know, from the Federal Reserve to the Census to SEC filings, Kaelin, lose yourself. We'll put that in the show notes. We'll show our work cuz we don't plagiarize here. We don't do that on Be Wealthy. Kaelin, that's
We are mathletes. We are Anything we do we play to win. We are mathletes. However, we did have some teammates on this that brought in the actual data. Is that fair?
Yeah. That's true. Kaelin, I'd like to say uh I never heard mathlete before. That's a good one. I have to say like guys I'm I'm a corporate I'm a I'm a corporate athlete. I play the only sport that's 24/7 365. Um I drafted my fantasy team in in the early 2000s. I drafted myself and I've been running the same team every year. I get myself on there and I'm running the same place.
Brett, I literally did go to the math Olympics in 1994 in Costa Mesa, California. I just want to tell you I

4:08was a legitimate mathlete. So, please do not disrespect the title.
I I got to be honest with you. I didn't know that. I feel like that's Joe and our investor business marketing degree that comes up at every meeting. I didn't know you're a mathlete, but that'll that'll definitely come back up in our next meeting. Guys, for next week Katelyn's going to take over because she's a mathlete in in 19 in 1989, she was the
Really good at basic
grade, she was a she was a mathlete and it was insane. So, Katelyn, as you know this already, but for our our new viewers and listeners worldwide, I used to own a lot of single family rentals. I got north of a hundred of these and my original plan was to buy a thousand single family rentals. They were obviously going to run themselves. They were going to print $400 per month each one or more. And I was going to like, you know, sail off to the islands and just call it a life. That was my original plan. And I got to I think the number I peaked at around 130 single family rentals. And I got to be honest with you, nothing about

5:11sailing off to the islands was in my future. I bought them all at the right time. I did all the right things, but what I found is they did not scale the way I thought they would. Right? I went to multiple markets. I bought great stuff. All of which we'll talk about. But if you own some single family rentals as we go through this today, you're going to feel uncomfortable. And that's okay. As of right now, you didn't know the math on your rental sucks and in an hour you might know that it does and you're going to be better knowing than not knowing. So, Katelyn, I'm not some guy that's just dunking on landlords and doing this for clickbait. I'm a guy who literally built my wealth starting in this asset class. I love the asset class and I think it's got its time and place, but I think a lot's changed. And Katelyn, I don't think people are talking about what actually changed.
Well, Brett, I want to just say if we look back about a 2 years ago, you shared with a lot of people your math around uh short-term rentals, Airbnbs.
It was about By the way, that was 3 years ago in the mastermind, I think

6:13what you're referencing, when I was lit on fire.
I was going to say, and then you were struck by lightning both in our mastermind by your private clients and on his podcast and in social media. And then about 12 months ago, everyone came back to you and said, "Wow, how did you know that that was the fact? How did you know that?" And you said, "Gosh, guys, it just it was math, right? It was just math." I want to brace you for impact. You're about after at the end of this episode, that same thing is going to continue to happen. In our mastermind, you talked to our members about this. You were struck by lightning. They all wanted to challenge you, which you welcomed them to. Bring us all your data
One person stood up stood up out of their chair and said, "Brett, this is blasphemy. Like this is I cannot believe
I think he used a different
audacity
Yeah, he used a different word that started with a B and ended with a another word
They were pissed.
Yeah, they were pissed.
They were mad. And I used Katelyn, I used this, right? I don't know if you see this. I used to discover all of this what I like to call the calculator, the

7:16long lost art. Not a mathlete here, but I discovered all of this using a calculator.
Well, to be a mathlete, Brett, you have to do it all by hand, and so that's the difference, right? Doing it by hand or or using a calculator.
So, Katelyn, I want to ask all of our listeners right now one single question. Each rental you have, what did it actually net you dollars in your pocket that you could take in your bank at the end of the full year. Not what Not the 400 per month you think. I want the real number after taxes, insurance, vacancy, management, evictions, brain damage, headaches, mortgage, all of it. Raw dollars that you could actually go spend. And you need to know that every single year. And most people, Katelyn, this is going to sound crazy, I The average person listening to this can't answer that question.
Mhm.
They cannot answer what their rentals net. And it's the entire subject of this episode. So, here's what we're going to talk about, Katelyn. Here's the

8:18punchline up front. Single-family rentals work spectacularly from 2010 to 2022. Honestly, if you were to research, and I did not research this, but I bet if you went back and looked at any 12-year period in the history of this planet where we're confined to do business on for right now until Elon fixes that, if you looked at any 12-year period,

you would find that that was the greatest 12 years in real estate run-up in the history of Earth, okay? I think that's what you would see. And if it's not the first, I don't know when it would have been It would have been somewhere that's so far below our time, you know, like before our time. Um so, they worked spectacularly those 12 years, but not for the reason everybody believes. Here's the Here's the catch, Katelyn. Nearly all of the return, the majority of the return, was appreciation, not the cash flow. Appreciation from 2010, you pick the rock bottom, to we had, you know, it kind of was peaking in 2019 and leveling off, and then COVID happened, and then we all know what happened.

9:21It It It But in 2022, the lights got shut off. The appreciation this stopped happening. Here's the problem, though, Katelyn. Costs did not stop. Your appreciation went like this, and slash in Arizona maybe a little that. And yet your costs continue to go up. All of your costs, your insurance, your taxes, uh your repair costs, your turns, your eviction costs. Every cost related to your rental went up. So, this episode, it's math. It's not going to be a motivation. You're not going to leave your ready to run through walls like you're at a Tony Robbins walk on fire event. You know, again, Katelyn, which I have done. This isn't going to fix your mindset. This isn't a coaching thing. It's like, "Well, what other options have you explored?" We need to explore the option of using a calculator today. And so, we're going to do four things. One, we're going to show you why the last 15 years worked with real numbers, okay? How did we get here? Then we're going to show you how the game changed, when and how. Next, we're going to walk through every

10:25single expense. Taxes, insurance, management, HOA, vacancy, repairs, and turns. And we're going to look at the old days versus today, again, which is the period of time we're working in. And then lastly, Katelyn, we're going to walk through what we did, what our family office did with our portfolio, and what I would do if I owned your houses today. So, at the end, Katelyn, we've got a worksheet that we're going to leave in ibewealthy.com that all of our listeners and viewers can go grab, and you can go see if your single family rental math sucks. By the way, Katelyn, full disclosure, not all not all the math on all of them sucks. Not every rental sucks. Right? But not all of them are awesome, and if you don't know the difference between awesome and sucks, that's a dangerous place to be. So, Katelyn, I want you to wrench up your time machine. I want you to grab your wrenches and go back to 2011.
Okay.
And we're going to call that the bottom of the market. We, you know, we There was debates, was it, you know, late 2010? But we're just going to pretend 2011

11:26
It's the truck.
is rock bottom of the great financial crisis, and what we're calling the golden age of single family rentals. Okay, I'm in single fam- I'm in I'm in single family rentals, Phoenix, Arizona. There is not a place that is better for the crash of real estate than Phoenix, Arizona. And if you bought a house anywhere around this period of time and you held it through today, you crushed it. Katelyn, what's your guess? How much did that home go up in value if you bought it in 2011 to today? What's a guess?
Uh probably doubled. Maybe went up to 70%.
went up 224%. 224% over a 15-year period.
Would you share with everyone what you you taught me, which is why do we look first before we go into this cuz your analysis and what we're going to show here it'll apply in every market, but you're using Phoenix for two reasons. One is it's your market, right? You we always teach to what worked in your world or didn't. You never teach in

12:27theory and I love that. But the second has to do with the way data's collected in Phoenix and then it makes it a really easy way for us to see how things Can you You do a much better job than me at explaining this. Can you explain why Phoenix is really a great place when you're looking at national statistics to go ahead and pull data from?
So if you looked at everything weird that's happened in the real estate industry in the last 15-20 years, every concept started in the same market. Phoenix, Arizona in Maricopa County. And the reason for it is it's a market where a lot of the housing is very similar, right? So you've got even like, you know, a lot of stuff from the '80s and then you've got a lot of stuff from the 2000s, right? The tile roof, stucco built, which you know, kind of the Phoenix, Arizona look. But it's the only market in the country where you've got about 100,000 transactions that occur per year. And so you've got this huge marketplace where you've got all these transactions so you could test anything crazy. I mean, you had OpenDoor. Uh and there's another influencer out

13:30there who will remain nameless that says he was the first agent with OpenDoor, which is completely not true. And I know that only because it was me. Uh when OpenDoor started, they started it in Phoenix, Arizona. And I was agent 0001 with OpenDoor helping them build out their model back when it was just the four dudes that started it. Um but all the weird stuff starts there. You look at We're going to talk about Invitation Homes. We're going to talk about American Homes 4 Rent. You know, in what year would it have been? 2013, I sold those guys a lot of the homes they bought. I mean, hundreds of hundreds of homes per year. To the hedge funds that were buying around this premise. And so, Phoenix, Arizona, they use it as kind of a model for what would likely work in other large markets across the country. And so, it's kind of the epicenter for, you know, boom and bust, but it's the epicenter for market data because you get so much data that you can pull out of a single market. So, that's the reason why.
Perfect.
So, Katelyn, this home we're talking about, you know, again, over from 2011 to 2026, goes up 224%. I want to say that a different way.

14:34That's not a return on your money, Katelyn. That's your one house becoming three and a quarter houses. Right? Like like that's a mind-bending idea, right? So, a lot of us think that we were just brilliant investors. And instead what we need to realize is the market gave us that lift. The brilliant investor is managing your expense ratio and knowing what that means, which we're going to get to. But, you know, even if you were late, Katelyn, in buying in 2015, let's say you waited until 2015 to buy, your prices are still up 120%. Like it it it's just crazy, right? So, rents ran up, too. And so, we talked about house prices
If you need help in your business right now, you've got a challenge or an opportunity that you really want to hone in and capitalize on it and make a game-changing breakthrough in your business, come out to our one-day workshop. This is something we've never done before. We're now doing it with the resorts we've bought, so they could be at Apple Mountain, Georgia, they could be in northern Arizona. Um they might even be in Belize in the future, but you get to come to a one-day where there I'm not going to present slides. It's

15:36literally you and your business, and you're going to leave with an action plan you can implement in your business. Go to bewealthypodcast.com, and you can click on our upcoming events and see where we'll be and book to come. We have the room is limited. We have no more than 50 people in the room. Go to bewealthypodcast.com, and you can book our one-day workshop coming up. Let's talk about rents. National single-family rent in January of 2015, Katelyn, was about $1,259 a month. K? May 2026, 2291. Those are national stats from Zillow's single-family rental index. So, that's 82% increase. Phoenix is even crazier. Our rents doubled. We went from 1150 on average to 2314. So, more than double. And so, when I say those that that data, Katelyn, you might go, "Well, Brett, why are you going to say rentals suck? You just gave this case of where things are up. It appreciated 224%. My rents doubled. Why would that be bad?" Well,

16:39the key is we've got to know where our income comes from. Just like in your business, when we analyze our businesses, right, you might have multiple sources of revenue that are impacting your bottom line. We've got to look at those sources independently, and the expenses associated with each source, so we can make really intelligent decisions. And so, if you look at there was a peer-review study done, Katelyn. Uh real academics. These are real peop- real researchers, Katelyn, not Brett and Katelyn. These are people that like research for a living, okay? It's published in the real estate economics, and it decomposed single-family rental returns across every US city over three decades for total return. And I know it's a like a sentence and I got to actually just look down and read it. Uh the return was about 8 and 1/2% per year split equally between appreciation and rental yield. So this study done over 30 years um over 30 years you got basically 4.25% of your return came from rental yield, 4.25% from appreciation.

17:41That's the long-run average, but in the window we just lived through from 2010 to 2022, appreciation wasn't half. It wasn't even close. It was almost everything. So let's run through this. Say you bought a house, Katelyn, for $200,000 in 2015. Today that house is worth $440,000. You got 240,000 bucks in equity. Congratulations, Katelyn. You crushed it. Okay? You made 240 grand that showed up while you slept. You were living the single-family real estate dream. Now, honestly, what did the same house cash flow? Rent minus mortgage, taxes, insurance, repairs, vacancy, property manager. For most people on a leveraged house, it's a few hundred bucks in a good year. Let's call it 3 to $6,000 a year if nothing broke. And as we know, something does break, Katelyn. Roofs tend to leak. AC units, I know we think they last forever. I constantly think that they do. They don't.

18:43Uh the water heater of today is not the water heater of 1975 from our parents' generation. It's just not. Right? My my last cabin had a water heater last for 35 years. I got to be honest. I I if one lasts 7 years today, I'm like, we really did something. And so in 10 years, you know, your 30 or $40,000 in total, you know, in like what you're actually making. You made 30 or 40 grand against 240,000 in appreciation. It's kind of crazy when you think about it, right? Like your your return in that scenario that she gave you was 90/10. 90% came from appreciation. 10% from actual cash flow. So So listeners out there, you thought you were a cash flow investor, you were an appreciation investor with a side hustle. We all were, myself included. There's no shame in it, that's just where we were. And so Katelyn, I wanted to I want to share a little like my story. I started buying at scale single family rentals in 2011. And I will still buy them now. Like when I find a deal that makes sense, I will buy it. It's just rare that I can find

19:46one that makes sense. And now I'm not leveraging the ones I'm buying today because I can't, you know, the debt costs are too high to get the returns that I want. Um so it's a different strategy there. But so in 20 Here's why it worked back then, Katelyn. It all worked due to the low cost of debt and appreciation, those two things. And I went back and analyzed low cost of debt.
Meaning we were able to take loans out at a 3% rate of return or 3% interest rate, right? Which allowed that delta if we were only making 5 or 6% of a cap rate, we were at least making, you know, call it 3 or 4% rate of return there. If we're borrowing at 6% and we have a five or six cap, we are paying to hold the property. Is that right?
To and so investor investor rates probably averaged if we took that whole era 4 and 1/2 5% on the investment side. You know, just for for fun here, I I've kept about 13 of my rentals. I kept 13. By the way, I kept all the ones with low

20:49mortgages as you could likely imagine. I just looked before we filmed this episode. The average debt rate on the I'm sorry, I have 12 I'm still holding. The average debt rate on all 12 average 3 and 1/2% on 30-year fixed. You can make anything work with that debt rate. but today, Katelyn, you're going to be at seven. You're going to be at, you know, low sevens. And if you're going DSCR, it could be even higher or unless you're getting a shorter term. You know, in 2018 and 19, I was buying homes in Huntsville, Alabama for $50,000 with a 4 and 1/2% debt. That were, you know, I buying them for 50, renting them for 895 with 4 and 1/2% debt. Katelyn, you can make that work all day long, right? And it takes no genius to pull this off. So, none of that, what I just described you, Katelyn, was skill. I was just a guy in the right place at the right time.
Sure.
So, if you were buying in 2012 instead of 2006, it was just timing. And if you did it,

21:50you got the win. But interest rates fell for a decade, yet institutional money flowing in into houses, you had a once-in-a-generation supply shortage, and none of that, Katelyn, we did. The market did the heavy lifting. You know, the house just kind of held our coat. So, the next 10 years, do you believe that's going to happen? Is the market going to do that again? Are rates going to plummet down to 3 and 1/2? We're going to have another worldwide pandemic? Things are going to skyrocket out of control? Maybe. And even if that happens, I still think there's a better way to protect yourself. And so, I want to go back, Katelyn, to June of 2022, which is where the actual engine turned off. And every investor who pays attention should have this date circled, June of 2022. And that's the date the Case-Shiller Index peaked, specifically in Phoenix, Arizona. And it's gone essentially nowhere. So, for four years, Phoenix, Arizona, our house prices, in

22:52terms of appreciation, are flat to slightly down in the last four years. Again, a market that went up 224% for a decade now has like zero in four years. And rents, the thing that's supposed to save you when appreciation stalls, national rent growth, they're saying you're going to get 2.9% per year. But that's national. That is, you know, it's like the national weather right now is 78°. Well, that's not very helpful if you're in Alaska. Or you're in a You know, like the national isn't the great average for your local market. Rents in Phoenix actually fell in '23 and '24. Some of my And the reason I can tell you that I I don't even look at the data. I look at my own portfolio. Okay, well, I had things that I were renting for two years ago and I'm renting it for less money now. And I know people say rents never go down. Liar. Rents go down. They do. They don't go like that, but rents can go down in a year. American Homes 4 Rent, one of the biggest

23:56single-family landlords in America, reported that across their 33,000-plus Phoenix houses, the blended rent growth in 2024 was just over half a percent, their second worst market in the country. Okay, well, that's 0.6 again in case I lost that. So in a world where you're banking on if your whole plan was rent growth and hope and enthusiasm, you just may not see that. Right? So that's your That's your first, you know, warning sign. The next one, Katelyn, vacancies going up everywhere.
Yeah.
Vacancy, the national rental vacancy rate at the bottom of the market in 2021 was 5.6% on average. You know what it is in the first quarter of '26? 7.3%. It has climbed every year since 2022.
So Brett, I will tell you those exact

24:58same numbers are what for the property, the larger property that I helped to run here in Texas, almost identical. So, while rents did not go down, the incentive upon which we had to give for a renewal or a new move-in, that went up. Well, spread that over the term of a lease, equivalent of rents going down, right? The income goes down per door. Um and then same thing here, when you look at the trend lines for occupancy. In 2021, I could barely hang on to them. Like, the only um the only vacancy that really existed would be the lag from move-out to remodel to putting someone new into the property, right? The turn process. Today, you're exactly right. It's sitting at these exact same numbers. And we're experiencing that in all the properties that you and I are working on together. Um you know, luckily we we're in some really great properties with really great markets, but this is this is 100% true, and that's a huge shift. So, if you look at the NOI of a property as a whole, when you shift from 7.3%

26:03or excuse me, 5.6% vacancy to the 7.3% vacancy, and take that that gross revenue you would have made, take it off of your actual profit, it can eat up to the entire profitability of your rental.
But But I love that you made that point. People don't think that vacancy is a cost you have.
It's a good point.
absolute So, here's a here's Here you go, Invitation Homes is the largest Dallas Tanner, their CEO, great dude. I knew him in Phoenix. Again, I sold it was Treehouse Residential back then, a lot of these properties that they have in this portfolio in Phoenix. Like, I'm not even saying like I'm not just a guy filming a podcast, I've actually sold some of the homes in the portfolio I'm about to speak about. Invitation Homes, largest single-family landlord in the country, 80,000 homes in their port plus in their portfolio. This is in their annual report. The average home now sits empty 47 days between tenants. That's a 17% jump in dead time over a year. In the most sophisticated operator

27:11in the country, okay? In the business, 80,000 homes. I mean, they've driven down costs, they've got scale. We'll we'll walk through all of that here in a minute. But when the greatest players out there are experiencing that, you've got to look at your own portfolio and see the math. So, let's take stock of where we're at, Katelyn. Appreciations off since 2022.
Yep.
Rent rent growth is down, right? It's either flat or slightly up in Phoenix, it's zero. Vacancies climbing.

And so, if the return in a single-family rental has to come from cash flow, I think we got to go look at what's happening to our costs. Right? Now, spoiler alert, they didn't get the memo about slowing down, right? Their costs are not changing, Katelyn. So, I want to go through every line then versus now, but I know Go ahead, chime in before we go to expenses.
So, I was just going to mention something because I think it's important. If you look at any large If you look at a portfolio If you think of it your income and expenses for your rental in a true business format, it should be on a P&L, right? And when I first

28:14started working a little more in on the property management side of things with you and and with, you know, my responsibilities, there was an interesting component to it. So, like in our Yardy, right? On our P&Ls, it starts at the very top with the GPR, the gross potential rent. And so, when you're looking at a larger multi-family or a larger portfolio, you're looking at what is that gross potential rent that I could get. When we're looking at just a single-family, right? And we're talking sometimes to some of our clients or for people who are coming into our world. They think that gross potential rent number is the number of amount of rent they're getting. They're saying, "I can rent this property for $2,500 a month. So, really my gross income is 2,500 * my 12 months, right?" When the fact of the matter is gross it goes gross but this is before you where you're getting the income, Bret. Gross potential rent less your vacancies less any incentives that you're giving.

29:18Now we have what our income is, right? For our rental income. And sure, after that you might have some additional add-ins like, you know, utility bill backs or anything like that. But let's remember gross potential rent less vacancy, less incentives is now the income we're looking at. So, when you look at like Invitation Homes they're looking they're not saying, "Hey, here's what our income is, right?" That it's based just on a gross potential rent. They're taking those vacancies into effect. With 47 days between uh someone moving out and someone new moving in. That's almost 2 months. That's almost 15% of their gross potential rental income being removed before it hits the pocket. So, I only drilled that down not to be the downer cuz usually I don't like to be the one with the negative news. But the delta of how we think about it in single-family residential versus an institutional or multi-family is drastically different. We look at it, Bret, and say like, "Hey,

30:22I've got a duplex. I rent it out for $1,200 on each side. That's 2,400 12 months. Boom, I've you know, here's what my income is." You have to make sure you're deducting any vacancies or incentives. I bring that up because a lot of our private clients hate and Bret, I mean hate how you've built that rental uh rate of return calculator we have because you make everyone assume they will have one month of vacancy in it and it ruins everyone's numbers and you say guys it didn't ruin your numbers the facts did it will be empty for a month.
By the way what they don't get Katelyn I'm giving them the best case scenario possible. Invitation Homes the biggest issue in the world who's got hundreds of people whose job is just to shorten this timeline is doing it in 47 days. So when I give them the 30 days and their rental still sucks you know it's bad. Right so now let's go I want to go to expenses. Now I'm going to do something right now Katelyn that no other real

31:24estate podcast does. Before I went and did the research and had our team do it I make my guess on how much things went up and I I believed and this is where I'm going to tell you where I my guess was wrong. I believe that expenses had doubled over the last 10 years on your rentals. And so that's what I believed since 2015 I believe rents only went up a little bit and costs doubled. And so we pulled the data from the BLS from the Fed from contractor cost studies and SEC filings. Okay costs did not double and rents didn't crawl. Okay rents they ran up 82%. But here's what actually happened and I'm going to show you why it still doesn't save your rental return. So repairs and CapEx the stuff that breaks Katelyn construction and materials okay per the producer price index are up 68% since 2015. Basically though 2015 to 2019 nothing. 2 and 1/2% per year no big deal. But in January of 2020 and May 2022 you know COVID they went up 51%

32:28in 28 months. Largest spike since 1947 and prices have never come back down and they're sitting above peak COVID right now. So, Katelyn, what does that mean? Let's do a roof, okay? These are industry average. Again, I'm pulling industry data. A roof that cost 19,500 in 2015 is 32,000 in 2025. The water heater installed today, it's 13 to 1800 dollars by the time the plumber leaves. But, the new ones that matters, Katelyn, is trade wages, what the plumber actually gets paid, is only up 30%. But, you don't pay the plumber's wages. You pay the build-out hourly rate. And plumbers bill 45 to 200 bucks an hour. The big issue here, Katelyn, private equity came into the trades. They've been rolling up HVAC and plumbing companies across the country, and they're literally trying to create service calls and turn them into SAS software products, right? That's what private equity's trying to do.

33:30
Sure.
But, every smart person I know is trying to go into a trade and roll it up, you know, to some private equity. And so, the spread between the tech, the way what the tech earns and what you pay is where your money goes. Right? So, our costs, we just showed you are up on every single thing up dramatically, 68% since 2025.
Look, if you're out there and you're a real estate agent, and you're having success, but yet you don't feel like you're successful. You're making 500,000, 700,000 dollars a year, and you're asking yourself, where does the money go? I don't ever have the time. I've got I'm trying to be at home. I'm trying to be with my kids. I'm trying to build a career, and you just feel like there's you're missing something. I think it's because you are. And if you come to our one-day workshop, you can see the testimonials on our website. Go to bewealthypodcast.com. Come spend the day, and let's show you a different way to play the real estate game that helps you hit your goals. Go to bewealthypodcast.com.
15. Now, let's go to insurance. This is the one that's brutal, right?
just talked to my insurance.
It's the worst. This is the killer.
All right, ready? 21 2021 to 2024 up 24%

34:37in 3 years. That's national. Arizona was up 48% in those same 3 years. Third worst state in America. Only two states that beat us for most insurance increase.
Texas.
Utah and Illinois.
Oh.
No, Utah and Illinois. You're coming up to taxes. Wait, taxes you guys lead the league. Hold on, this is this insurance. Okay? It's not slowing down. Are you ready for this? The average inflation for insurance right now is running 6.9% per year. That's two and a half times the rent rate. And the rent rates are growing. American Homes for Rent, which I believe is the third largest institution um with single-family rentals in in the United States, 40% insurance increase in the last 2 years. 4 0%. Again, the bulk a lot of their inventory in Phoenix, Arizona where rents are flat. Now, I'm no financial wizard, Katelyn. But if you have one of your expenses it's kind of significant go up 40% and your income does not, it's going to impact your bottom line,

35:40right? That you don't need you don't need to do a lot of research to get that. All right, let's go property taxes. Nationally, the average tax bill on a single-family home went from $3,300 to $4,427 over the last decade. So, up a third. It's not terrible. This is where Phoenix this is where we are the best at property taxes, okay? We're we are incredible. We have the second lowest effective property tax rate in any big metro in America. We're 0.39% and Maricopa County actually caps. They can only increase the max they can increase is 5% per year. We're in the most landlord-friendly tax state in the country and I'm still telling you the math sucks. If you're in Texas or Illinois, Texas, Katelyn, touch the sky. Taxes are the That's your It is a disaster, right? It's so brutal. And so, you've got to go I mean, you've got to be fighting the tax appeals. And then now you've got this other expense.
You're literally in lawsuits constantly with the county.

36:42
You're lawsuits constantly to try to get the county just because And again, I have a lot of issues with the way the counties are ran. So, I think it's just totally like most of them ran awful. And so, but then we get to pay for it, which is just super awesome. Um all right. Now, let's go to property management. Katelyn, let's think about this. When was the last time Now, we we manage ourselves except for my single-family rentals. Like all the big properties we own, we self-manage. But Katelyn, have you ever seen the fees in property management go down?
I've never seen fees really go down anywhere for anything.
Yeah, but so this In on average for single-family rentals, 8 to 10% is is the norm. Now, someone might be getting a deal, but here's the other problem. The cheaper you get it, the less time they spend on your thing. Right? I mean, it's not like some magic thing if they don't make any money that they can go spend more time managing your asset. So, let's do some math on what that means. If the percentage stayed flat while your rents doubled, your property manager now is making twice as much money per house for the same work.

37:46They get a leasing fee on every turn. You know, if their average rental in Phoenix, Arizona is $2,300, 10% management fee plus a half month's leasing fee every other year, that's 3,300 bucks a year. So, management stayed constant, but actually as a percentage, right? Your revenue's gone up, and they're a fixed percentage off the top line. So, now let's look at We talked about vacancy, again, going from 5.6 to 7.3. Let's talk about the turns. So, your tenant moves out. The old rule, Katelyn, you know, we're charging them The whole purpose of a security deposit was to protect us against the rental turn, right? I mean, isn't that the purpose of it? Cuz Katelyn, if we didn't If everybody wasn't screwing stuff up, we wouldn't even need to charge a deposit, right? They would just clean it, vacuum it, wipe it all down, and move out. But again, people aren't that way, and so we've got to charge them. And so we charge them typically, Katelyn, how much do we charge them in a single-family rental? On average?
I I don't know.
As a month About 1 month's rent, right?

38:49We're going to charge them It's rented for $2,300 a month. This isn't a trick question. We're going to We're going to take $2,300 in a security deposit. Well, here's the problem. In 2013, your turn number was about $3,500 to turn your house. Guess what it is now. Now, we're assuming they didn't screw it up and like totally, you know, tear the cabinet off the walls and rip the dishwasher out. Let's assume there's minor wear and tear. Your average is $5,500 plus. Okay? And then when he goes to collect the judgment, right? Cuz you went way past and you go pursue them, on average, you only collect 17% of the time, right? Going after people that tore something up, they don't have any money. Not a great use of time and capital. So, you've got this issue where every single There's no bright spot in your expense lines here. The bright spot needs to be that rents are climbing in proportion to the way our expenses are so that our margin stays intact. So, we got to talk about this concept called expense ratio. And this is a tattoo that every single-family rental investor should

39:52get. Right? Your expense ratio. Okay? All that is is your total expenses divided by your total revenue as a percentage. Okay? We want to study the two biggest players in the game, Invitation Homes and American Homes 4 Rent, two biggest landlords. You know, they've got everything working for them, Katelyn. They've got in-house crews that are turning everything, right? They've got insurance programs at scale that are like in-house driving the house the the the cost down. They got tax appeal departments that are fighting the cities and counties. Every scale advantage you could possibly get. Are you ready for their expense ratio? This is from the SEC filing, so this is the real number. They're doing it at 35% and it's been flat for a decade. Okay, they are the best there are at. And that number but that number excludes in their SEC filings big CapEx. Because in the SEC filings, you don't want to put all the stuff in there together calculating the calculator. What you want to do is pull out the

40:53things that you like so you hit the 35% number. It's kind of like our inflation, right? Something goes out of control, you just pull that out and you recalculate and like holy cow, it's still 3%. It's a magic. It's like it's just it's mathematical magic. And so that's what like they've pulled out. One of my favorite things ever was from OpenDoor's like corporate filings. They're like, "No, no, no, no, no, no. If you pull out our cost of money and all of our people, we're crushing it." I'm like, "What? If we had If we had free money and no people, oh my god, we'd print money." I was like, "Katelyn, my business is too." So, wait. So, if So, here's the If you own four rentals and you pay retail everything, and then you've got the institutional players that are wholesale everything, and their floor is 35% before CapEx, Katelyn, what's your number? With a property manager at 10% retail insurance at renewal and climbing every year, that $32,000 roof amortized in annually, a month of vacancy, which again, not a month, it's 47 days in Phoenix, and a turn every couple years at 5,500, what's your real expense

41:56ratio, Katelyn? It's 40 to 50% all in. The old rule of thumb when I was buying in 2011, I was I was able to hold at 35%. I was able to do what the big guys were doing by managing it really efficiently, really thinking through how to drive long-term costs down, getting the carpet out of there, tiling everything, making really intelligent business decisions. But that world ended, Katelyn. It's gone. That ship sailed in 2022. It's gone. So, even if today's snap- snapshot were fine, the direction we're going is not a promising one for the future. Your revenue line is growing 3% per year. Phoenix is close to zero. Your insurance is at seven. Your fixed costs are at five or six. Your build-out labor's marching up, and they're growing twice as fast as your rent. Invitation Homes just lived it. Their costs are up 5.4% last year. Revenue's up 3.6, and they're the best in the world. Here's the point I want to make, Katelyn.

42:58Everyone, if you're doing, you know, if you're doing squats right now, if you're on the bench, just pause for a second. Tell your spotter to hold for a minute. When costs compound faster than revenue, your margin gets eaten every single year. Not once, not just this year, every single year. And that's how that a a house that cash flows a little, Katelyn, in 2026, you're actually paying for it by 2030. There's no appreciation coming to cover this time. All The problem is you've got pain coming. If you're not crushing it in cash right now, you got serious pain coming. So, Katelyn, I laid it out like that. It doesn't The data, and that's not emotion, the data doesn't look great.
No, the data doesn't look great. And in fact, uh this may be call for a second pizza example, right? We use the pizza example all the time to talk about how to be profitable in your business, right? And we look at cost of

44:00goods sold and split you know, we look at all those ratios. I I we're going to have another pizza example, which is how does your actual property cash flow when you have, you know, one piece of the pizza is insurance. One piece of the pizza is So, when we add all of those up, what does our cash flow really look like? But
When you lose five slices before your mortgage, I'm going to tell you I like pizza. I mean, if you show me somebody that doesn't like pizza, I'll show you a liar. Okay, well, I like I love it. I know everything there is to know about pizza. I love it. But when five of the slices of the 10 are gone and the the pizza representing 100% and then you got your mortgage, which is a lot. I mean, it real quickly gets to
It's more of like a Totino's pizza roll that's left for you, not an actual slice of pizza.
Maybe. That may Maybe you might be eating the pan.
I'll be honest with you, I like Totino's pizza rolls, but not when it comes to profitability. Um for the past like 50 years, wealth in America has changed in two big categories, right? One has been the stock market. The ability for us to go in as a general

45:03mom and pop, what was it? Edward Jones brought that to the table, right? That we all could go in and and we could all buy shares in in the stock exchange and we can go into the S&P 500 or whatever that might look like, right? So, a lot of America
And we could go to Wall Street or Y'all Street today. We've got all the options today.
That's right. Don't mess with Texas, Bret. We're going to bring it. That's exactly right.
I just I've been waiting all year to work that in and it was just a it was a small window and I had to try to just

knock
you a commercial for it?
Uh you didn't have to send it to me because we watch the same programming. I watch it and first of all, greatest commercial. The bull getting shattered by the longhorn. I mean, it's unbelievable. It's incredible.
It's so incredible. Anyway, for those of you who don't know, look up Y'all Street and what's happening in Dallas. It's pretty exciting. Um but
We'll link that in the show notes cuz that's huge.
That is huge. Long story short, it's it's been a lot of America invested into the stock exchange, which is, you know, something a lot of people have chosen to. And then the other great area of wealth

46:05has been investing in real estate. And as we look at these numbers, and as many of our listeners and our clients are sitting invested in real estate, and a lot of that comes from single-family residential, which is our trade, right? It's how most of us got into this industry. What are we If If we're looking at no appreciation moving forward in single-family residentials for the short term, what should what should we even Where do we go from here? Where do we start? What's the plan? Cuz we all read that purple book, Rich Dad Poor Dad, start in collecting homes like some people collect shoes, right? I'm not going to say who on this call, but probably me, right? Now, how do we determine where we move forward from here if there's not going to be If If a lot of this headwind is going to continue to exist, um and I know you're going to go and share with us some of this headwind, but at the end of this, are you going to give us some direction of a plan or or what are we doing?

47:06
not all that Yeah, well, I'm not taking everyone to the edge where they're ready to jump off a building. No, there's a We're going to fly like a phoenix here in a moment. But before WE DO THAT,
You just want to tell us that that's coming.
No, yeah. Well, well, Calen, the pocket We're We're not We're not done. That's the whole thing. Like where you're you're you're pausing us at Well, All right. So, first of all, if you've got rentals and you want to go check them out, go to bewealthypodcast.com/sfr like single-family rental check. Bewealthypodcast.com/sfrcheck. We built a worksheet for you. You go on there, you're going to enter your rent, your real expenses, your loan, what the house is worth today, and it's going to give you your true expense ratio, your real cash flow, and the one number that matters most, which I'm going to get to in a minute, right? Your return on trapped equity. It's free. There's a link in the show notes, Katelyn. Go to bewealthypodcast.com. And run your data and make sure that you understand the math around it. Good, bad, or indifferent, you got to go do that at the end of this.

48:08All right, so Katelyn, I want to talk about one more thing. And it's the headwind that nobody underwrites. It's the thing that no one's talking about. And it's something I've been very passionate about because I've you know, I've got rentals in multiple markets, and so I get to feel how different cities and municipalities treat landlords. And as business owners, right, we are going to go where we are treated best. It's an illogical thing to say otherwise, right? It's just And you go, "Why is everyone moving to Texas?" Well, I don't know. Maybe it's because the governor actually calls business owners and actually tries to get them to move there. What a crazy concept. What a great idea. So, there So, it doesn't show up on a spreadsheet, and the rules of the game are being rewritten one city at a time. Katelyn, in 2015, the number of American jurisdictions where a tenant had a guaranteed right to an a lawyer for an eviction, do you know how many jurisdictions in America have that?
How many?
It's It's easy to remember, zero. In 2015, none of them had that.

49:122017, first state first city to pass it. You want to guess where? First city, Katelyn, to pass
New York.
something tenant-friendly? Bingo, New York City, 2017. But today, there are 28. 21 cities, two counties, and five states. And the list grows every year.
So, wait.
Why does it matter to your wallet?
Are So, if I take someone if I own a property in New York or any of these other 28 states that you mentioned, if they do not pay their rent, this is shocking to me cuz I'm in Texas.
They have a guaranteed right to a lawyer for an eviction. I
someone, I get a guaranteed right to a lawyer, right?
Well, I can't speak to all I can't speak to all that. I got to say you're going to get evicted and you're like, "Hey, I want to be you know, normally in Arizona you walk in there." Arizona's incredible, right? We ask the first question they ask of the the tenant.
Did you pay your rent? If the rent answer is no, doesn't matter what happens next. You lose. Now, they say, "I did pay and I have an issue with my landlord." Oh, now the landlord's going to get

50:12hammered, right? So, if you paid and and the landlord should get hammered, right? If they're not doing the right thing for their tenants.
Most of us make massive investments in our business and some of those investments don't pay off. So, you can come spend a day with me for $997. You come up to one of our resorts, you're going to spend a day, bring your challenge, bring your opportunities, and let's work through it in a one-on-one coaching session. You're going to be in a room of your peers, no more than 15 people are going to be there, and I'm going to coach you personally to tackle your challenge and your opportunity. Go to bewealthypodcast.com to see the next dates for our event.
So, here's where I want to go. Why does it matter to your wallet, Katelyn? Because nationally prior to this, only about 4% of tenants uh actually showed up with a lawyer. Versus 80, you know, 4% of landlords are going to show up. But under the right to counsel in New York, eviction filings under right to counsel in New York, eviction filings fell 49%. The eviction, which is your last remedy of resort, gets slower and more expensive everywhere these laws land. Katelyn, what's even worse? 17 states plus

51:14DC now seal the eviction records. Five of those states just added 2023 and 2024 and Arizona passed a law sealing in 2022. So, our data, when we go to screen tenants, it's getting blinder. Statewide just cause eviction where you can't non-renew a problem tenant without a legally approved reason, i.e. California, Oregon, Washington, all added between 2019 and 2021. California and Oregon, it gets better. They paired it with statewide rent caps. The source of income laws seven more states in 2028 the share of housing voucher holder protected by these laws went went from about a third to over half the country. Now, Phoenix is still easy mode, right? The cost for an eviction filing in Phoenix is about $69. It's set within a week and it ain't stock that bad. But, I'm playing the game in the easiest laws in the country and the math still sucks.
Insane.
So, if you're in the state where the

52:15laws are drifting, you're not investing anymore, Katelyn. You're just volunteering. You're doing charitable work.
But, if you're going to do do it in a 501c3 in the proper format. Don't do it obviously with your, you know, your entire wealth determination determining factors.
But, are these So, but no one's talking about like but the eviction laws hit the landlord's pocket. Right? Makes it harder and harder. And so, you can't out-operate the machine. There's one more There's one more structural truth we got to cover. Invitation Homes holds 35% expense ratio while all of us mom and pop are going towards 45%, right? And the reason how they're able to do it, Katelyn, is because they've got a field service person on payroll. And when we call so we call the plumber out we're paying 150 an hour. Their insurance is a portfolio program and our reprice is at every renewal. They've got lawyers and a full legal

53:20team fighting property tax appeals and yet you and I are sitting here paying the tax bill. Scattered single-family houses are a scale business that you don't have scale. You're competing against industrial operators and we're paying artisan prices. And that's where we're at today. So, big sigh. Here's the positive.
Well, here's Well, hold on. Do you want to know I don't know big sigh exists? I think it's important to say. My big sigh exists because as I look at our family office and I look at what we manage, a lot of the tools that we have, right? When we look at a property, we look at it that we want it to be a great place to live. We want to attract an awesome tenant who loves to be there. We then want to create make it a great place for our team to work, right? That they enjoy it, that they have the tools they need to do their job. And we want to make it a great return for an investor. And I talked about this a lot, right? It's our three-legged stool. Well, most of the things that you've laid out here, if it was at a single-family residential homes, when I think about

54:22your 12 single-family residentials, residential properties and these changes that you've laid out, I don't know how to create that three-legged stool in a balanced way. I can't get
me the stool. First of all, the three legs of the stool are?
Number one, you've got to make it a absolutely fantastic place to live. Your resident needs to absolutely love being there. It needs to be an affordable, fair rent with a great uh environment, meaning the community's nice,
But
noise, all those things.
And overwhelmingly, invest in landlords are doing it. So, we got we got one leg of the stool. We're propped up. This is my stool up here. We're propped up. What's our second leg?
Second, my team, right? Our team. Our team needs to enjoy working there. They need to feel fulfilled in their work. They need to have the tools and ability to do their job, right? And we need to be able to pay them a decent wage.
I got to be honest, though, leg two sucks because the landlord law it's not a blast taking people to eviction. Not a blast losing money.

55:24Managing contractors these days not awesome.
No.
Um so, I would argue leg two is still gone. What's the third leg?
That the investor has to get a decent rate of return, or otherwise we sell the asset and no one has the place to live or the place to work. And so, unless every decision we make has to honor those three legs, I'm looking at everything you just told me cuz I've been taking notes, and on your 12 single-family residentials, if it was a normal like that would be so difficult to provide. And if that ecosystem of those three legs doesn't exist, it isn't a long-term legacy investment you can hold on to.
So, Katelyn, I want to it it's it's tough, right? So, I want to land this for you, right? So, I I didn't spend the last hour telling you that single-family rentals are stupid. That was not what I did. I outlined the math, the four main problems out there, and here's what I want all of our listeners and viewers to get, that single-family rentals are a

56:26stage. And most people never notice where the stage actually ends. Right? If you say it a different way, Katelyn, they're the on-ramp, right? For me, it was an on-ramp. It was the easiest asset in the world to buy for me as as a real estate agent, for most of us out there listening and watching this. It's easy to buy, easy to to finance, and it's really easy to understand cuz we live in houses.
Sure.
I'm like, I get it. It's just like this one, but it's over there. And if you bought the 2010s, that on-ramp handed you the biggest equity check of your life. It's up 224%. You won. But wealth is ownership plus time, Katelyn. That's the formula. It's ownership plus time, and then the last part of it is in the right vehicle. And the vehicle that got you here, right now, is flat on appreciation for 4 years. You got growing rents at 0 to 3%. Costs are going up at 5 to 7%. A regulatory environment that is ratcheting very hard in one direction,

57:29and retail prices competing against industrial competitors. And here's the number one number that decides everything. And it's what the worksheet that if you go to bewealthypodcast.com/cfsfrcheck it's return on equity, Katelyn. That is the number that matters. Not the return on what you paid in 2015. I understand you're crushing if you bought in 2011. It's the return on what's trapped in the house today. That $440,000 house in Phoenix that we started with in the example, it's got almost $250,000 of equity that's cash flowing quote, and I'm using air quotes here, 500 a month with nothing breaks. That's a 2.4% return on your trapped equity. In a bad year, you're writing a check. Katelyn, here's why 2.4% sucks on return on equity. Cuz you could get nearly 4% in a treasury bill and do nothing. Not bust your ass dealing with all the problems we saw. And so your equity doesn't know that it lives in a home, believe it or not, Katelyn. Did you know your equity is not like, "Oh my god, I love living inside of this thing." No. But it could be earning 8 to 10 to 12% somewhere

58:34else. And the IRS actually lets you move it. You don't pay a dollar of tax, you keep your cost seg, you move it all forward, and you can trade up, and you can move into things that have none of the problems that we just talked about. And so I want to tell you a story, Katelyn, about what I did.
Okay.
I started this journey 3 years ago. I walked into my mastermind, I ran all the data, I proposed it to our room, and as Katelyn mentioned earlier, they were pissed. They were upset at me. Like, I cannot believe you're the guy that said buy a rental and now you're saying they're crap. And I said, "I didn't say they're crap. I said the math changed." And the math did change.
I remember this specifically.
in the sand
This was in Nashville.
head in the sand, Katelyn, doesn't make it better.
Do you remember it So it was in Nashville, and I remember specifically people standing up telling you, you know, and and and saying and it completely doesn't make sense. One year ago you told us buy as many rentals as we possibly could. Get moving. Not one year ago, but several years ago. And now you're sitting here and telling me that everything I built

59:36was dumb and I shouldn't have. You said, "No. That's not what I'm telling you at all. I'm telling you the vehicle is changing and you have to get in the next car. And here's what I'm doing." And then directly after that, I can't tell you how many phone calls I got that said, "Brett just doesn't understand where we are anymore. He's too far along. He doesn't get it." And your response
his touch.
He's lost his touch. He's too far away from reality. He got too successful. But you said absolutely not. What was the How did you respond to that? Cuz you got that a lot. Like, "Brett's too far gone." You're going to get it after this episode. They're going to be like, "Oh man, he bought a golf course and a couple of apartment complexes and now he doesn't get that residential properties are single family residentials where it's at." What's the response to that?
So, here with the comments room, I said, "If any one of you want to bring me your math and you do the rental tracker and I know that I'll never get the phone call, but I'm totally open for it. But once you've done the math, show me if they're all awesome. Cuz if you own 10 single family rentals, I know

1:00:38one thing. I know three of them suck. You might have seven good ones, but I know a portion of them aren't awesome. Cuz in every portfolio, right? There's a There's the 80/20 exists in everything in life. And so, I went out there and I knew nothing about commercial real estate three three and a half years ago. I mean, zero. I knew, you know, there's a Starbucks, there's a Denny's, there's an AT&T building, but I didn't know how it worked. So, what I do? I did the work. I literally bought every book that exists in publication on commercial real estate. And I read all of them. And then I met with some of the smartest minds that exist on, you know, that I have access to in America. One who is a household name that everyone would know. And I started looking at and I asked the question uh uh of one of them and I was like, "Hey, did I did I miss the part where I was supposed to play Monopoly, where I was supposed to take the four houses and trade it in for the hotel?" Cuz I think I did. And I did miss that part, cuz that's exactly what you're supposed to do. Is that you actually the entrepreneur's job, right? I think it was Peter Drucker, right? It's to find the more

1:01:39efficient way to make more money. And it just that's what we That's what we do. And so, I started studying it, and I rolled up my rentals. I took 20 here, and I bought that AT&T. Well, I took these 10, and I bought a Starbucks. I took these 13, I bought a Denny's. And I started 1031 exchanging, and my head exploded. Because all those costs we talked about in a triple net lease, Katelyn, they're not mine. That AC breaks, and it goes to $50,000, I don't care what the AC costs, Starbucks is paying. That's their problem. They're going to sell more coffees, or raise the price on their coffee, or whatever they do. But I'm you know, the Grand Slam at Denny's, they're going to sell a more expensive Grand Slam. However that works. But it it that changes the game, right? So, you've got Number one, I went from a bunch of scattered 130 rentals to bigger, quieter assets, multi-family commercial. You know, again, we've got 96 units under one roof, instead of 96 roofs spread out everywhere. Right? Well, when you do that, you can collapse costs. And so, you know, our insurance is totally different, easier to to figure out, right? And on on on Star- our

1:02:43triple net commercial properties, they pay the insurance increase. When it goes up 8%, you're like, "Well, here you go." Right? So, it it it nobody sends me a $32,000 roof bill anymore. Right? I don't get those. Right? The wealthy don't fall in love with assets, Katelyn, they fall in love with the asset does for them.
Agreed.
I'm going to say it again. They don't fall in love with the asset, they fall in love with the asset does for them. What the asset should do for you is create passive income. I hope appreciation's there, I love that. But I can't go down to Wells Fargo and spend that. And so, I need the cash flow to fund my life to set me free. So, your single family family rentals were a great first chapter. For a decade and a half, the market did the heavy lifting and and let you believe it was the house. But, the market has put the weight down and it's time for you to do your homework. Go to bewealthypodcast.com /sfrcheck and see where you are with your rentals. If the you've got to figure out your

1:03:45honest cash flow, the honest dollars you can spend, and the return trapped in your equity. You've got to figure that out, Katelyn. You've got to know

Once you know the scoreboard, you can finally decide if you're still playing the right game. And if you feel like you're not playing the right game, go to bewealthypodcast.com and set up a call with my team. We take these calls every day and we've got a whole tribe of people that are on the same journey that you are. They understand the game's changed and they understand that being in the right room with people that are walking the journey, taking their rentals, moving them into things that align with the dream they had when they started. The dream of being set free by passive income, that is still possible today, Katelyn. You've just got to think differently and you've got to know the math. Go get our checklist, jump on a call with my team, and before we wrap, Katelyn, any parting thoughts that you want to share with our group before we wrap today?
I'm tickled that I get to say this. It's very very You know like in a comedian in a tight 10, they have a joke at the beginning and they can tie it up at the end? Brett.
Yeah.

1:04:45
Once they know the scoreboard, they can decide if they're playing the right game. Do you know why, Brett? Cuz they're going to be mathletes. That's why. Yes.
Boom. That's Katelyn Mitchell. I'm Brett Tanner. This is the Be Wealthy Podcast. We will see you back here next week.
Go be a mathlete.