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Profiting From the Accelerated Migration



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Jason Hartman and co-host of Solomon Success, Rabbi Evan Moffic talk about the continued and accelerated migration out of high-density areas into suburbs. This trend started in 2016 and has moved much faster as a result of the pandemic. Jason and Rabbit Moffic look at other trends affecting the needs of Generation Z.

Investor 0:00
really encourage you to get involved with Jason and his team. The whole group over there is just fantastic. I started working with them probably 10 years ago, and I haven’t bought a property in a couple years. But I’ll tell you, I still reach out to them. And they just helped me they’re helping me right now with a refinancing question that I have. So the main thing is get in the game, get started, get that first property or get six, many people by dozens. But I think the world of this group, they’ve helped me a lot, and I think that you’ll really enjoy the process.

Announcer 0:33
Welcome to the creating wealth show with Jason Hartman. You’re about to learn a new slant on investing some exciting techniques and fresh new approaches to the world’s most historically proven asset class that will enable you to create more wealth and freedom than you ever thought possible. Jason is a genuine self made multi millionaire who’s actually been there and done it. He’s a successful investor, lender developer. entrepreneur who’s owned properties in 11 states had hundreds of tenants and been involved in thousands of real estate transactions. This program will help you follow in Jason’s footsteps on the road to your financial independence day. You really can do it. And now here’s your host, Jason Hartman with the complete solution for real estate investors.

Jason Hartman 1:25
Welcome to Episode 1441 1441. Thanks for joining us today from 189 countries around the world. I’m here with our favorite Rabbi Evan Moffatt. Kevin, welcome. How are you? I’m doing great Jason. And I imagine you’re just living a nice quiet life while under quarantine not doing much work. Are you? Oh, just a podcast, right? Sure. harder than ever right now. I’m so busy. I can’t even see straight I’m busier than I’ll always One armed paper hanger doing a podcast at the same time. We’re grateful for it because we all need guidance and education right now I think we should all be taking. I mean, yes, we need to relax during this time. But we should all be trying to learn and grow as much as we can take advantage of the time we have at home use this time as the biggest self improvement project of your life listeners. And I am grateful and honored to be your guide through this. And Evan, you are also a guide through this kind of stuff too. And I just want to remind all the listeners that you live in Chicago, okay, we’re at least Chicago land I should say probably. So you are certainly familiar with city life. And one of the things I predicted long before anybody else was saying it and that means like two months ago. Time is compressed right now because stuff is coming in as fast as I predicted this big mass migration out of the Cities, because people would want to live in lower density environments. And so far, we’re starting to see a lot of stories backing up my prediction already, even though we’re still in the quarantine phase, and you pulled out one today from the New York Times. Tell us about it.

Rabbi Evan Moffic 3:20
This was a fascinating article that really hit upon this trend that you’ve talked about, but that’s really accelerating now in the pandemic, or at least we expect afterwards to accelerate. I mean, no, nobody’s moving right now really. But it talked about how this pandemic exposed a one of the core risks of city living and that is that people are so tight together and you can you know, disease can move very quickly, but it also because so many more people are working from home. It opened us up to the fact that you don’t have to pay $2,000 a month to live in a tiny apartment or winner 30 $400

Jason Hartman 4:00
Flight, which is the New York City and experience,

Rabbi Evan Moffic 4:04
why would you do that if you can do your job and live in a beautiful home in Nashville, Tennessee, or Little Rock, Arkansas, you know what, it’s truly incredible in the quality of life you can have. And I think there was always great benefits to city living with culture and you know, just the environment. But a pandemic is shut all of that down and be there’s other qualities of life you can find in these in these sort of excerpts and smaller Middle America cities that you can’t find them that you can’t get in the big city.

Jason Hartman 4:37
Yeah, and you know, my thesis is that this is not in terms of the psychology. It’s not going away anytime soon. I could be wrong about this. Maybe the quarantines will lift and life will just instantly go back to the old normal. I don’t think so though. I think we are going to have a new normal I think that people are not going to forget this, I think there will be a new level of paranoia, a new level of PTSD, post traumatic stress disorder. That will be part of the cultural Zeitgeist. And I just, maybe I’ll be wrong, but I just don’t think people are going to forget this anytime soon. I think it’s a big deal. Right. And what we’re saying to you, dear listeners, is that real estate investors can make substantial money off of the changes that will happen during the new normal phase. And the important thing is you get out in front of it, you act quickly, and you seize the opportunity, you know, seize the moment, Carpe Diem. Okay, try. We’re trying to share with you the big macro trends that we think will happen and I’m pretty sure I’m right about I mean, I’ve had Haven’t been so sure. You know, I’m usually I usually hedge myself a bit when I make a prediction right? I’m not hedging that much this time, I’m pretty sure. I’m pretty sure I’m going to be right about many of these pandemic investing trends that I’ve mentioned. And by the way, if you want to see an early presentation that will be updated very soon, go to pandemic investing, calm, grab hold of a free audio download a free video, and a free ebook on this topic, but you know, we’re going to enrich that site quite a bit very soon that stuff is changing so quickly.

Rabbi Evan Moffic 6:35
Well, one of the reasons you’re probably right is that it’s a pre existing trend. I mean, I was just looking at this great article from the Brookings Institution. And it showed that really starting in 2016, not they what they call non Metropolitan counties, so these are counties without the big cities in them. They started gaining much more population and the counties with The big cities in them. So like Cook County in Chicago versus Kane County, which is sort of outside. So this pattern had been the opposite before 2016. And then in 2016, they started seeing the pattern switch. So we’re accelerating something that’s really already started. I bet some of it has to do with, you know, technology. Okay. And

Jason Hartman 7:22
so that’s not a small idea. I just want to make sure the listeners really catch that. What you’re saying is that there are pre existing trends. And by the way, you know, this is nothing new to our listeners. We’ve been profiling on this on the podcast for a long time. The people leaving big California cities like where I grew up Los Angeles, or New York City, and moving to less expensive lower tax areas. Okay. So the trend was already there, but it has gained a massive amount of new fuel new momentum during the time of crisis when people have had a real chance to, number one, be fearful. Number two reflect on their life. And suddenly they’ve lost all of those advantages of the big city, the big expensive city that they were paying a fortune for. You know, you can’t go to a Broadway play now. You can’t go out to eat in great swanky restaurants. You can’t go to jazz concerts, you can’t go to the museums, right? I’m using New York mostly as an example there, and you’re still paying for it. It’s not like you got a discount. It’s still super expensive to live there in every way. It’s not like you got a refund on your ridiculously high, oppressive taxes during this time, right? All you got is a greater chance of becoming sick. Right? And so people are realizing this isn’t worth it. This is not a good deal for me, and so on. You know, there are lots of places you can live in suburban super low risk environments. And what I’m saying is that even after Coronavirus, when there’s a vaccine, better treatments hydroxychloroquine, whatever, right? It’s not going to matter that much. Because the thinking the thinking in everybody’s head, isn’t it doesn’t just change. Okay. This thinking is going to be with us for a long time. My prediction. Now granted, I could be wrong. Okay. But you know, we’ll see. So it’s so true. A lot of it, Jason, a lot of it, I think, depends on Generation Z, which we’ve talked about a little bit on the show, and where will they want to live? And I think they’ve, they’re experiencing this, you know, pandemic, and so will they want to live in places where it can spread so quickly. I mean, I think that where they’re living choices will make a huge impact on what kind of what will happen in terms of migration patterns, and there’s really no evidence that they really want to live in cities. I mean, the Washington Post has a recent article called the Great American migration of 2020 on the move to escape the Coronavirus, and it’s all about Generation Z. So I think we’ve got something really big that’s happening here. Okay, so the question is, how big is it right? It’s really big. How big is it? Okay. Well, we will tell you that, again, I have dangled the carrot of our upcoming webinar, and we will get this done. So don’t worry, it’s going to happen. And we’ll invite you soon enough to a webinar where we will detail this we will go into the math. We have been doing a ton of research, and hey, we will sell no wine before it’s okay, as that old famous TV commercial said, and it’ll be ready soon. And we’ll have invite you we free webinar, and you can come You can check it all out. I think it’ll be very helpful to you. Now, Rabbi, by the way, when I say you can come right to the webinar, yes, it connotes that you’re going to come to some physical event, right. And what’s interesting about this is that everything is just becoming so virtual you today. What’s the right word? officiated presided over a few? Yeah, right. And you do funerals and weddings all the time, right? How?

Rabbi Evan Moffic 11:30
As around probably at least once a week,

Jason Hartman 11:32
okay. And once a week, and a whole bunch of people attended the funeral on zoom, right?

Rabbi Evan Moffic 11:37
Yes. Huge. Isn’t it amazing. It is totally amazing. And people spoke on zoom also, in fact, the daughter of the deceased very sadly, couldn’t fly. She’s immunocompromised and lives in New Hampshire. And so she spoke and it was immensely powerful. I mean, it was and I don’t know, I think there’s a little bit of zoom overload right now, but It really works. It helps maintain connection in difficult times. So there’s something to it and it’s only going to get better. You know, we’re only going to get more and more familiar with this.

Jason Hartman 12:09
Yeah, absolutely. Okay. So the migration trends are huge. This is a big deal. It’s a huge number of people. And most of you listening are already positioned to take advantage of it. Yes, because you’ve been investing with me over the past 1617 years. And if you may want to double down and do do more of that many of you are because you see the opportunity, and you have the courage and ambition to take advantage of it. And if not, make sure you do because these are huge trends. And there are many of them, not just the migration component. Jason,

Rabbi Evan Moffic 12:49
what caused you to see I mean, how did you see this trend coming even obviously before the Coronavirus what was leading you to see it? Was it taxes or California?

Jason Hartman 12:59
No And why I mean, okay, so a couple, there’s a few layers to this onion. Okay. Number one, you know, there’s been a migration going on for a couple of decades out of the Socialist Republic of California, right former home, because people are just fed up, frankly, and they’re not getting that much out of it. Right? You know, I’m happy to pay for something even pay a high price if I get a lot out of it. But, you know, what people are realizing a lot of these things in life is that the emperor has no clothes, right? That famous story, the Emperor is walking around and telling everybody look at my great new outfit, and everybody doesn’t want to say anything because this is the Emperor you’re not gonna question the Emperor. And, you know, finally some kid not knowing any better says hey, you have no clothes. Right? Right. And, and that’s what we’re realizing about places that are super expensive. California, New York. I you know, many of the North Eastern expensive markets, right? Many of the West Coast expensive markets and probably same around the world, but the difference is that around the world, you don’t have the chance for a good escape like you’re doing the US because in the US, suburbia, that’s a pretty pleasant alternative. It’s a uniquely American idea. There’s hardly any concept of suburbs outside of the United States, right? Yes, they have them, but it’s just not much and it’s not like right here, okay. No. And in China, for example, where the Wu Han virus began right now, you know, you leave the city and you go into rural poverty stricken China, right? You don’t go to irvine california, in between. Okay. Here we have this nice middle ground in the US. Okay, that’s one of the you saw that

Rabbi Evan Moffic 14:51
so you can go for a walk along the beach in Florida, just like you could in California, and it’s much cheaper. It’s not as crowded it’s not as much traffic parking is not as expensive There’s just the amenities don’t justify the cost living in a place like California.

Jason Hartman 15:05
Absolutely. So here’s you asked when I saw the trend. So I saw the trend. I was reading some news about what was going on in Italy. Already what had happened in China before that, and move on, especially. And then I was starting to just see the beginning of this trend in New York. And I thought, you know, what the common thread here is, all these people live in high density places. Mm hmm. And the media, nobody was saying that. No. And I thought, you know, because I was born in Europe, and I’ve been to Europe a zillion times, I pretty much go there a couple times a year, at least I used to, maybe not anymore. But you know, pretty much everybody in Europe lives in a high density environment. Okay. And, and that’s how Italy is okay. And so I thought that’s the common thread. everybody’s thinking Well, it’s because, you know, the age of the population and the ability of the medical care and this and that and, and when the government started doing the lockdowns, okay, fine. That’s all those are elements for sure. But the one common thread, all of these places had a high density environment. Okay. And let me just give you a comparison here, listeners, okay, this, this is something that is part of the pandemic investing presentation that you’re going to be invited to here very soon. So here are some numbers for you. The average population density of the United States of America is only and this is a small number, only 87 people per square miles. Okay, so you’ve all heard that accurate, but misleading, old statement that every real estate, a huckster would love to have you believe to buy their wares and I told you you shouldn’t really believe it. But I think it was Will Rogers said buy land, they’re not making any more of it. Okay, sure that’s true, but the fact is there’s a lot of land okay. So, only 87 people per square mile is the typical US population right. But the average population density in metropolitan areas of the US is 283 people per square mile. So, essentially 200 more, okay. The average population density of New York City is 27,000 people per square mile, okay. In many orders of magnitude difference, right. So, look, the Coronavirus is going to end it’s going to you know, die seasonal death. It’s going to die a virus death or it’s going to die. A treatment death one way or another will stomp it out. Okay? It’s it will not be with a spread But the cultural Zeitgeist The, if you will, post traumatic stress disorder is going to be with us for many, many years. Right.

Rabbi Evan Moffic 18:12
So that’s, you know, what may happen is another thing you’ve also talked about in terms of pandemic investing. And that’s this growing gap between the rich and the poor. Maybe the cities just especially New York City, just become the province of really rich people. I mean,

Jason Hartman 18:27
maybe and look, New York City as people flooded out of the city, which they will will become a more pleasant place. By the way, it’s true because it will become less crowded, and and prices will decline in virtually everything in New York City, as the supply demand shock resolves itself, but that’ll take time, of course. So yeah, yeah, it’s it’s a really interesting trend. We’ve identified many big ideas that we’ll share in this upcoming webinar. So that’ll come but Evan, you have Another article that inspired some thinking that we should share, right?

Rabbi Evan Moffic 19:03
Yeah, the other article was also an existing trend. I mean, this is an existing trend of 100 and hundred years. And that’s the growth of government. And this is, I mean, we’ve just seen almost a $2 trillion rescue package from Congress in response to the shutdown in about 4 trillion, with a tea from the Federal Reserve in total. And so during times of crisis, government expands, I mean, think of the Great Depression, and all of the komet kind of progressive government, we have now think of the 1960s and urban riots and civil unrest and the creation of Medicare and so forth. So times of crisis expand the size of government tremendously. And in this is now bipartisan. I mean, this is this is Republican and Democratic. So that that trend is something that it’s always been a trend, but it ebbs and flows, and now it’s flowing again. And I think as real estate investors, I mean, this is probably good for us. It’s good. In a couple of ways, ultimately inflation, but ultimately housing assistance is here to stay. So what do you think about that? Jase?

Jason Hartman 20:08
I think you’re absolutely right. I think government is going to get much larger, much more intrusive, much more or William. And I think, whether you like it or not, we are going to see expansion of the section eight program or a whole nother program. for housing assistance, we are going to see a big push toward universal basic income. We’re going to see a lot of you really liked the show I did with Mike Norman, who I thought was, you know, a little bit wacky, but he talked about mmt or modern monetary theory that a lot of the millennials like and you know, really, it’s kind of a fantasy, but not completely, but whatever you think of it, we’re moving toward it. Okay. And it’s just getting bigger and bigger. And whether you like

Rabbi Evan Moffic 20:56
either one that hung up on you.

Jason Hartman 20:57
Yeah, he’s the one that hung up but I got him back on the phone, and we Got a good interview, but but then the next day, you know, I sent him one of the listener questions or tweets or something. And he said, This is why I shouldn’t do interviews. And he sees really, but but interestingly, Naresh is friends with him on Facebook. And he sent me a screenshot of Mike Norman’s posts and Mike Norman lives in New York City. And this was several weeks ago, and he said, I’m getting out after this is over, I’m leaving. This is just not worth it. So even Mike Norman specifically write that letter. And whether you like it or not, the rise of socialism, okay, this is just, this is just the way it’s going, folks. And look, we can debate all day about whether it’s good or bad. I don’t think it’s good, but I think you can make money off it. And remember, I’m a practical investor. I just say align your interest with the most powerful forces the world has ever known governments and central banks, and especially the US Government and the US Federal central bank, the fed the Federal Reserve, and that’s what we’re here to help you do.

Rabbi Evan Moffic 22:06
Yeah, that’s right. I mean, so Bernie Sanders wins even though he loses.

Jason Hartman 22:09
Yep. It doesn’t matter. The you don’t need Bernie Sanders, you, you know, Donald Trump will implement a lot of Sanders type policies. Yes.

Rabbi Evan Moffic 22:16
So true. Yeah. So true. Well, there’s, I mean, I think this is why we listen to the show, Jason is these bigger trends help us understand why income property works. I mean, this works because we buy in these markets that people are moving to, and that are low density. And we position ourselves to benefit from socialism, even if we don’t like it, even if we’re philosophically opposed. You said, align yourself with the powers that be Yeah, and this is what we’re doing.

Jason Hartman 22:41
Absolutely, absolutely. Good point. And listen, you can find the type of properties which haven’t changed at Jason Hartman calm slash properties. And they’re the same properties before the pandemic as they are after the pandemic a little more in Inventory right now. So you have more Housing Choice in your investments, which is nice and take advantage of what’s going on. And this is a tidal wave, it’s a tsunami, you want to catch it and get up on your surfboard and ride it to prosperity, because this is going to be very, very good. For our listeners, there are six major groups of people who are going to migrate. And it’s not just those urban dwellers that we mentioned, there are five other groups and I’m trying to think there might even be more than I thought of, but, but that’s what we’ll we’ll be talking about on upcoming episodes and in the webinar, of course, so Jason for more or you can always call us one 800 Hartman and Evan, anything else before you go any other comments or questions or things clients are saying to you investors, anything like that?

Rabbi Evan Moffic 23:56
No, I think clients that I’ve talked to are just happy with with what’s going on with the education they’re getting, and that you’re our guide. I mean, this is, you know, we, we talked about, we need guides to understand what’s going on. And we have here so much competing news in the media, I mean, so many things that become divisive politically. And I think what we learn on this show, and what we learn, just constantly by reading and talking through is what are the deeper trends? How do we respond to this in a thoughtful way and also within with time with the perspective of time we are in the midst, as you’ve said, April’s the worst month. And so we’re thinking about what happens next, what happens three months from now, six months from now nine months from now, and that’s what I’m always thinking about and listening to the show.

Jason Hartman 24:41
Absolutely. Well, good stuff. Let’s leave the listeners with two quotes. Okay. And these loosely came from me. You know, sometimes you don’t know if you’re, you have the right credit for something because you kind of heard a derivative of it somewhere. Else went into your subconscious and then you’re regurgitating it in your own way. So, one is more positive than the other. Okay. So I’ll do the more positive one first. Okay. And again, this is not about the amount of money because the the numbers are crazy. It’s about the concept though. Okay. Right. So in good times in expansions, right, that’s one part of the economy. And the other part is the recessionary or depression airy part. Okay. So with those two parts, here’s the quote, okay. expansions make millionaires, recessions and depressions make billionaires. Right? And yeah, the world’s first billionaire Jay Paul Getty became a billionaire by buying oil companies during the Great Depression in the 30s. Okay, and, and then That’s how he became the world’s first billionaire. Okay. Now, the other thought, is this one, okay? It’s a little more maybe down to earth, right? But here it is in a recession, or depression. The person who wins is the person who loses the lease. Yes. Okay. In a recession or a depression. The person who wins is the person who loses the lease. In other words, economics, like I’ve always said is relative, right? So if you just tread water while everyone else is losing their shirt, right, you’re ahead. That’s right. Hey, so we least do that. But we think you can do a heck of a lot better way to the upside with our our plan. So until tomorrow, happy investing everyone stay well. Be careful out there and keep your chin up. Because opportunity are all around us, and we will help guide you to them. Evan, thanks so much for joining us today.

Rabbi Evan Moffic 27:06
Thanks, Jason. Thanks for having me.

Jason Hartman 27:13
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