Episode 79: Overcoming Adversity & Fear By Taking Action With Jeff Holst

Jeff is a recovering attorney who spends his time as a real estate investor. His story of overcoming adversity and prospering in the face of uncertainty makes him the perfect guest for us today. Jeff has gone from riches to rags and back. He currently owns over 300 residential units and multiple commercial properties. In February of 2020, Jeff climbed Mt Kilimanjaro and stood at the highest point in Africa. He is the co-host and founder of the Last Life Ever Podcast and is passionate about helping people live the best possible version of their lives. He is also co-host of the Old Fashioned Real Estate Show where the hosts drink bourbon old fashioneds and talk about real estate investing.
Get in touch with Jeff:
www.jeffreyhoist.com
www.oldfashionedrealestate.com
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Are you ready to bring your real estate game to the next level? My name is James Prendamano. I'm the CEO and founder of PreReal. And over the past 25 years, I've closed over a billion dollars in transactional real estate. Each week, a meeting with outstanding investors, investors, highperforming individuals and visionaries operating in the real estate space. These are the people that are actually out there in the real estate game right now. Getting it Done this podcast aims at bringing anyone's game to the next level. This is the PreReal podcast.

Welcome, everyone, to the show. I'm joined today by some guy I just met. I really don't know who he is. Just kidding, guys. Jeffrey Holst is an amazing guy. In the short few minutes we spent chatting before we went and began recording, I'm getting a real good flavor of who Jeff is, and it's interesting to do your homework and do your research. Right? But then when you connect with somebody almost instantaneously, you get a feel of what they're about. Jeff's a public speaker, of course. He's an investor, multifamily and commercial. He's a podcaster. He's an author. He's a public speaker. He's a coach. And when he's not swimming with Sharks, he's out crushing real estate deals. So welcome to the show, man.

Thank you. I appreciate it. That's one of the best introductions ever. I love it. Thank you.

Here we go. We're off to a good start. So Jeff, you're one of these people that have this theme that we seem to talk about over and over on the show. You've got this thread of adventure that's woven into your DNA, clearly. And we all seem to have the common elements to our temperament, our DNA. Like a serial entrepreneurs. Right. We're all kind of cut from that same cloth. But you're doing it, man. You're out living your best life. And I hate that expression. But it seems like that's what you're doing.

Yeah. So I hate the expression too, actually. So I totally get it. People say that to me all the time. We actually have our own brand called Last Life Ever. Just about recognizing that it's like a less gangster version of Yolo, right? Like, it's like you only live once, but a lot less on the gangster side. Last Life ever since about living like you only have this one chance and doing the things that are important to you, whatever those happen to be. And for us. You said that the people that come under show and the people that you deal with are cut from that clock. But I actually think everyone is. I think just some people suppress it and don't live into it. And I'm on a mission to be the very best Jeffrey Holst. I can. And you shouldn't try to be me anymore than I should try to be you. You can be inspired by the stuff that I do. I can be inspired by the stuff you do. Or the stuff Arnold Schwarzenegger does, it doesn't matter. But I'm never going to be Arnold. Right? I don't want to be Arnold. I want to be like a really good version of me.

What is it that gives someone like you the confidence, the tenacity, the will to take that leap? We all talk about it, man. We do. And we all say that we're out living the life we want to live and we're doing the things we want to do. But when you have those moments and you're looking in the mirror, so few of us actually do it.

Yeah. No, that's actually why I talk about this stuff on shows and just try to encourage people to lean into their units. Right. But what it really comes down to is when we get and no one's ever asked a question quite like that before, so I appreciate it. I think that I've read lots of stories of people on their deathbed, and those people aren't regretting the things they did. They're always regretting the things they didn't do. Right. I've always wanted to do this, and I didn't do it. I think we all come to that realization at some point. Unfortunately, most people just come to it way too late. Your deathbed is obviously too late to come to the realization. You need to start doing those things. Life is super short. It goes really fast. And for whatever reason, some people recognize it earlier than others. In my case, what caused me to be able to sort of change the course of my life is that I got diagnosed with leukemia, and I was told I was going to die. We believed it. I got diagnosed in September of 2008, and I was a bankruptcy attorney. I wasn't unhappy, but I wasn't thriving. I was doing well in my career. We were making money, but I wasn't excited about life like I am now. And when I got diagnosed, I was kind of like, well, that sucks. There's a lot of stuff I still want to do. I never did. I mean, I had done some cool stuff. I mean, I had just gotten back from Machu Picchu at the time, and I had been to Egypt twice by then. I'd done some really cool traveling type stuff, but I really had just enormous amounts of things that I thought I was going to do some day. And one of those was invest in real estate. I wanted to invest in real estate since I was 15, that I was 30 years old. I didn't have any real estate other than my personal house. And when I was diagnosed, remember, this is September. We're having conversations that were like, if you live until February. My dad said that to me, actually. He said, if you live until February, I'll take you to Australia. And I was like, I just want to make it till Christmas. That's where we were at. It was really like, for a period of time, I thought I definitely was going to die. And I was still optimistic about life, if that makes any sense. I have this philosophy. I said to you off air that I never have bad days. I decided that when I was 17, I don't know why I did, but I did. And I built up at that point more than a decade of consecutive good days. And so people would come into the hospital to see me, and they'd be saying things like, Man, I bet today is a bad day. And I'm like, well, not really. Most of the day was pretty good, like finding out I had leukemia. That kind of sucked. But the rest of the day was all right. And people looked at me like I was insane. But the thing is, it felt that way to me. I remember at one point, there was a shift change, and a new nurse came in, and she looked at me and she was like, oh, my God, Jeff, I'm so sorry to see you here. And I was like, oh, my God, Shelley, I'm so happy I'm here because this was like a childhood babysitter of mine, because I'm so neurotic about not having bad days that my mind looks for the positive in everything, right? And that's the thing about it. It's like good and bad stuff happens to everyone every day. I have a mentor who told me once that somewhere in the world right now, someone's having the worst day of their life, someone else right now is having the best day of their life. So the day is objectively neither good nor bad. It's really just how you perceive it that matters. And that resonates with me because that's how I felt in the hospital. There was some bad stuff that happened, but there was also some good stuff. And I just chose to focus on the positive, and I think that's how I got through it. I recovered. I technically still have leukemia, which kind of sucks 15 years later, but it's under control, and I feel like I'm on borrowed time all the time. So the long answer to your question is, I went through a health scare, and I ended up in personal bankruptcy. So I was a bankruptcy attorney that filed bankruptcy, and I said to myself, I got to do something different. And I started living into my Jeffness, if you will, like, living my life as well as I possibly could. And then that resulted in me investing in real estate and growing this portfolio. So from 32 to 37, I invested in single family properties. And when I turned 37, I quit my job and went full time real estate. And that's all I've done since then. And that's given me incredible flexibility. And once I really embraced that flexibility, I thought, I got to tell people about this. This is freaking awesome. I need to help people do this so that's all I care about now is just help other people live well. So live your best life. Even though I hate that expression

Thank you for sharing that, that's a pretty remarkable story and an even more remarkable perspective that you have. You decide to make the leap and dive into real estate. Right. And I'm assuming financial freedom is the motivation behind this. Right? Passive income, mailbox money, all of those buzzwords.

Yeah, exactly. Honestly, I take a little issue with the mailbox money thing because there are ways to invest mostly passively. Right. Like, you can go invest in someone else's syndication or something like that. And I'm happy to set those up for people once in a while. I do syndicate every once in a while. Right. But you have to still do some work. You shouldn't be completely passive or you're going to get screwed. I've done that. I met somebody, and I thought they were pretty cool, and they were telling me about a deal, and I said, that sounds good. I'm going to send them $50,000. And the deal didn't really work out very well. So you can do that. But it's not a smart way to invest. So I take issue with mailbox money. But the rest of it, yeah. I wanted to create residual income. I want to put my money to work for me, and I wanted to create real, lasting generational wealth. My main motivator when I first started investing was I was a lawyer. I was high paid. My wife is not a lawyer. She's not as high paid as me. And I went, Jeez, if I die, my wife is kind of screwed. We need to have our finances in order. I need to get my financial house in order. And one way to do that was to create some residual income for her if I did die. Because the first few years after I got sick, I actually spent most of the time, assuming I had a year or two to live. Now I'm very lucky. I got an experimental treatment that's no longer experimental. Now it's common treatment for what I have. And I'm in a situation where probably I'm not going to die from the leukemia that I have. But I didn't know that for the first couple of years. So that was a big motivator to get focused was like, I need to provide income for my wife. She needs to be okay if I'm not here.


Wow. So I've been in real estate since I'm knee high to a grasshopper. I understand as much as anybody understands the unbelievable amount of work that goes into these deals. Right. So the mailbox money is intended as when the check is there every month, reasonably assured, and I totally get it. I was just suggesting that it's a little deceptive. People get into this. Oh, I want passive income. That's fine. I look at it as a scale of passivity, right? On one hand, you could build a ground up apartment complex by hand, with Hammers and nails of your own. Right. Or on the other hand, you can buy someone else's deal that's already existed or a turnkey deal or invest in a REIT. And you're going to do different returns and different results depending on what side of that scale you're on. And I think you should do all of it. Not necessarily build from the ground up. Right. Not everyone's constituted for that. But you should be okay with doing some turnkey, some passive investing, some active investing, some flipping if you really want to make a career out of real estate. Not everyone wants to make a career out of real estate. And that's why I say I help people lean into the best version of their lives. And for me, that's real estate. For you, it's probably real estate. For most people listening, it's probably real estate. But there are going to be people that hear me talk and hear you talk and say, I have no interest in real estate. We all know those are people that say, you're insane to invest in real estate. I don't want to have to fix toilets. And I'm like, I don't remember the last time I fixed the toilet other than my own house. Right. I don't go to my tenants. I have 300 families that live in places that I live that I own. Right. And those 300 people don't know who I am. So there's a lot of people now that it's kind of become hip to trade the nine to five in and to invest in real estate. And it's not as easy as people make it appear to be something. I think that there are some folks out there that it's really misleading how they make it seem so easy to get into this game and to perform. And there are portions of cycles where it is easy to make money. Sure. If you bought 40 or five years ago, pretty much you could have thrown a Dart at an apartment building. You'd be fine. The market has been great the last five years, but the market will not always be great. It might be great the next five. I don't know for sure, though. And that's the thing I didn't know five years ago. It would be great for the next five years. Now I kept buying because I think if you're careful and thoughtful about the risks that you're taking, you can buy in any part of the market cycle. But you have to be careful and thoughtful about the risk you're taking, and you have to recognize the downsides. Yeah, without a doubt. And I think it's really important to look backward before you move forward. There's a lot of clues about what's ahead. And I'm seeing folks I call it buying payments. I see these performers come across my desk constantly that gosh if you're specking on some of these cap rates that are really, really tight and you're banking on massive appreciation and you're not accounting for inflation on the expense side, and you're not taking a look at when that debt comes due, the capital markets as they are today. If you have to borrow money now, it's fine. But I don't know that that will be the case in three years or five years. Right. And you're right. Another person I follow said to me once, and I've heard it from lots of people since, but they've never seen a pro forma that didn't work. Right. It always looks good on paper. When someone hands it to you, it always looks good. But you need to be comfortable with your own numbers. And you better be sophisticated about how you're analyzing these deals, because there are syndicators that I know they're fine people. There's something wrong with them that I've done really well the last few years, but they're not really sophisticated and they're not very smart. And I'm not going to name people, obviously, but I know people that have done really well the last few years that will do really bad in the future because they're assuming that the market will always be like Enos right now. And that's a big risk point, and they might be fine for the next 2345 years. I don't know. Right. But it's not a risk I'm willing to take. If I'm going to raise money for a deal, I'm going to make pretty darn sure that I'm comfortable losing my own money first. And that's a real issue for a lot of indicators. They don't really have any skin in the game, so there's really very little risk to them. And so you have to be careful. That's all I'm saying about investing in other people's deals. It's not that there's anything wrong with it. It's just you got to be careful. You better do your due diligence on who you're dealing with, and you better do your own due diligence on the deal and make sure it makes sense. Yeah. We hear people talk about the OEMs offering them random as well. It clearly States what the risks are, and it clearly talks about things that can happen. And nobody has a Crystal ball, and I get all of that. But there are a lot of metrics that you can and should be looking at that we're finding more and more not only looking at them. A lot of people when press don't even have a clue. I know people that are doing this kind of work that don't even know what an internal rate of return is. Literally, they put it on their projections. They say the IRR is this, and you go, Great, how do you calculate that? I don't know. Somebody told me that's what it was. It's like, okay, well, do you know what an IRR is? Right. If you don't know, then maybe you probably not tell people what it's going to be. Right. Those things are hard to calculate, and there's a lot of fudges in that. Right. What's your exit cap rate going to be? To me, this is something that really bugs me. I see all the time people say, well, cap rates are going down. So I'm buying this at a five cap and I'm going to sell it at a four and a half cap five years from now. Well, that's garbage. There's no way you can know cap rates are going down. You can't know it because cap rates are like the market's idea of where the market is going. Like the reason the cap rate is five. Now, if we assume that's the actual cap rate on that particular property now is that the entirety of the market, all of the possible knowledge together agrees that that's what it's worth, which the only thing we know of is that five years from now that the market hasn't accounted for is that building is going to be five years older. Everything else will be the same. If cap rates are going to go down and everyone knew it, they already went down. Right? So to me, yes, cap rate might go down on that particular property, but that property, like all things being equal, is much more likely to have a higher cap rate in the future because it'll be an older building. And so that's why old school economic theory says the cap rates go up about ten basis points a year on a property. So when you underwrite, you should follow old school economic theory. You should say, I'm buying it at five, and if I sell it five years from now, it's going to be five and a half. And no one's doing that. I haven't seen a syndicator have a higher exit cap rate in two years. Like, haven't seen anybody. They all go, oh, it's going to be better five years from now than it is now. And that's absurd. Like, if it is going to be better, great. I hope it is. It'll be good for all of us. Right. But I don't know how we can possibly know what the future is. And if we did know, it would have already happened. Not only are they not accounting for some of the standard metrics, they're assuming multiple liquidity events. Yeah, that just the assumptions are startling,folks.

For those of us that have seen multiple cycles, we're not here to scare you off. I personally believe that we are at a moment in time where it may be the best time to get into real estate. We're at a point where inflation hasn't yet driven the rates, although I believe that's absolutely coming. Many of you have heard me talk about it. A lot of people talked about it for many years. We didn't. I believe the time is now. And as that happens, the capital markets are going to change dynamically. And if you're making investments that are predicated on liquidity events, you need to be darn sure that you're contemplating a very different interest rate environment at that point and that you're accounting for a number of different variables on the expense and income side. If it's not making sense today, do not bank on it making sense tomorrow because chances are it won't, right? Yeah. And I mean, I think of that. Obviously, some of it depends on what your strategy is. Right. You can have a value add deal where it might not make sense today, but you know for sure, six months from now it will because you're going to do some kind of like renovations or something and get the rents up. But all that saying is like it's poorly managed now and they're going to fix that. Right. And there's a place for that. I do a lot of that stuff.

But if your numbers are assuming that 18 months from now you're going to be able to borrow it, sub 3% interest rates, that might be the case. It could be, right. The Fed said they're going to raise rates three times this year. I suspect they're either going to raise rates zero times or they're going to raise it ten times. To me, three is a very unlikely outcome. It might be ten times in the next two years. So it might technically be three this year. Right. But it's going to be one or the other. Either we're going to have like the Omnicron is going to scare everyone away and the inflation is going to tame itself down because they're going to be putting more stimulus to try to save the economy again, or in the alternative, we're going to have inflation, which seems more likely, and then they're going to have to raise rates a lot more than 75 basis points. It's not going to be we're going to go up a three quarters of a percent. It's going to be going up 3%. I couldn't agree with you more. And you're one of the very few who even see that as a possibility, and I'm certainly not going to say it's. I have no idea. I think that's more likely than the alternative, which is that we raise rates a tiny bit and you underwrite your deals two years from now, borrowing at half a point more than you are now, which is what the people that are being conservative are doing, that I stress test my deals. If I'm looking at refinancing in two years, I'm going like, okay, what if I have to pay 6%? What does that look like? Am I going to be okay now? It might not be as good of a deal at 6%, and obviously, if I can do three, I'm happy. I'm not going to complain. But if it works at six or 7%, it definitely works at 3%, right? It works okay. This higher rate situation. And honestly, I'm trying to do as much long term debt or even like when we structure deals now we're looking at deals and say, okay, this has an interest only period, but it converts to amortizing debt automatically. So maybe we can't refinance and have that liquidity event, but we have to slower rate locked it. I just had a conversation about that last night advising somebody, you need to be looking to pay more for the debt today. The option to extend, look, it's a cycle. It goes up, it goes down, it goes back up, it goes back down. The key is you need to be able to get to the other side of the rainbow, right? And we've seen periods of two, three years where it doesn't matter how good the deal is, it doesn't matter how strong the spot is. You cannot borrow. There is no debt. So even performing loans become non performing loans. And certain banks and certain lenders, when they carry too many of those deals and they can't be taken out, they fall out of compliance notes, start being cut and sold at 70% discounts. Like we've seen all this, been there, done that. And as long as you can get to the other side of the rainbow, that's okay. I'd expect if you can get to the other side of the rainbow, you're much richer for it. Because all the riff Raff is out there and you're getting an opportunity to buy stuff that no one else can buy. Because if you're performing when everyone else has failed, then when the credit markets start to open back up, you're the best borrower out there. The banks look at you first and say, hey, James, like, you know what, I've got these three things in mind that we take it back that we want to get rid of and we want to give them to you and you're getting them at discounts, then this is scary stuff, right? But it's also like opportunity. And I've said this for years. I made a lot of money in 2010, eleven and twelve, because no one else could make money, then I will be honest, I was not a good borrower then we couldn't borrow money then I had just filed bankruptcy. I had no assets. I had a negative net worth. We still made a lot of money in chaos. So I'm excited about that. I'm going to survive this. I know that. I know I'm in a position to survive. And I know that if something bad happens, it's going to be amazing. I'm going to be very rich. I actually still hope nothing bad happens. It's better for the world if it doesn't happen. I mean, listen, I'm fine. I can pay my bills forever. I don't care. I don't need to be very rich. But if it happens, I'm going to take advantage of it. Someone should and someone will. Yeah.

And it's not actually you'd be bailing people out. That's the sad part, right? The people that are making bad investments now are going to get hurt. They will. If the world goes the way it could, and you're going to be helping them by taking it off their hands. The banks are making bad loans now, too. I mean, the Fed has created a system that made it possible to make bad loans again. And when you make bad loans, bad stuff happens. That's what happened last time. It's not quite as bad from a lending perspective as it was before. And in our world, multifamily even before, there wasn't a huge amount of defaults, but especially in the smaller deals. When you're talking about single families or even small multifamily, I would be really careful because I think there's going to be a lot of people burned in that market. You'll see people burn in the multifamily, but it'll be more burned like they lost their investment and they didn't end up bankrupt because they had to sell at a discount to people that didn't make bad decisions at the beginning. No question about it, man. God, is this a refreshing conversation? Because most people have this discussion with they think I'm nuts and they feel like I'm doom and gloom. But it's not doom and gloom. It's just the reality of a possible scenario that we're all going to be dealing with in the next two or three years. Yeah. And listen, I mean, there are people that have been predicting this stuff forever, so we could be wrong, right? I have a friend, Harry Dan. He's an economist. Right. Harvard train, super smart guy. He's been predicting a crash since like 1997. I'm exaggerating a little bit. Harry probably mad at me for saying that, but he sold a ton of books, predicted a lot of things correctly, but literally for the last ten years. He's saying we're due for a crash any second.

I read his newsletter. It said that we're going to have a huge crash before the end of January. So we're January 6. So we'll see. I hope he's wrong. I've told him as much. But I also know people that sold all their real estate in 2013 because the market was too hot. And they said I'm going to wait until the market cracks. And what I know about that is if you could buy in 2013 prices now, even when the market cracks, you'll be fine, right? Bad choice. You can't time the market, folks. You can make smart decisions to hedge, but you cannot time the market. You can't wait and try and pick the right time to get in the right time to get out. You have to consistently be making sound decisions based on fundamentals. And you'll be just fine. Yeah. Because here's the thing. If you bought in 2006 or seven and you sold or refinanced in 2010, you got crushed. If you bought in 2006 or seven and you're selling or refinancing now, you're super wealthy, right. So long term, this stuff is fine. If you buy something today, even if the peak of the market is today, and I think we probably have a little runway left. But let's say it was today. Like if you bought it today at the highest possible price and it cash flows and you have long term debt in place and you have adequate cash reserves, it does not matter what it's worth a year from now or two years from now. What matters is it's still cash flowing and you still have long term debt in place. You cannot just wait it out. You said you can't time the market. I actually think it's stupid easy to time the market the way you time the market is you buy whenever and you only sell when it's high. That's how you time the market. Just buy whenever you buy, sell when it's high. As long as you can hold those stuff long term, you can always just wait until the market is high in itself. Absolutely. So let's talk a little bit about your portfolio. You've got a pretty diverse portfolio. Industrial strip centers, residential. Are you leaning one way or the other? Now, are you ramping one side up and backing off another, or are you still keeping it rounded? Well, the main thing I've been getting out of is the smaller deal. So single families were almost out completely. I bought a couple of Duplexes because they were really good deals recently.

But even Duplexes triplexes, quads. We're trying to get out of all that stuff, trying to stick to commercial multifamily. Part of that is just a scaling thing. It's just a lot easier for us at this stage. But another part of it is that stuff is more susceptible to a market correction than income based properties. Income based properties are the price on income. And I'm comfortable in our ability to manage the income. And so I think we can keep the value up. No, they'll still go down in value, right? Cap rates go up. It doesn't matter if your income stays the same, your value goes down. But if your income stays the same and you're paying your debt and you have long term debt in place, then that's okay. So we've been really focused on getting out of that lower end stuff. And then the other thing that I'm looking at is really like, especially in retail space, I'm very concerned about certain sectors of the retail space. I don't think Starbucks is going anywhere. If you buy a Starbucks, you'll probably find in the recession, people still want to drink coffee. They're just going to not go to the movies as much. Right. So I wouldn't buy a movie theater, especially in a post covered world. So retail I'm a little bit more picky about. I like industrial, especially like industrial flex space quite a bit. But I still think the one that you have the most long term stability in is be better C class multifamily. I don't do D at all. I prefer not even the lower C class, but like a C plus two, about a B plus. I feel really good about the A stuff. The cap rates are so low now, it's hard to imagine buying it and making that work. So if you can do a value add B, especially a value add C, that you can convert to A, B, Golden. That's what I want to buy. But again, even when I do that, I'm doing shorter Horizons. I'm looking at how fast can I turn it around? Because when I buy something that's got a value add and I'm going to do a construction loan or something like that, I want to turn it around really fast and get to that long term debt as fast as possible because I don't want to get stuck hanging in it. Yeah. So I mean, I'm being way more selective about it, and I'm sticking to that sort of narrow band of C plus B minus that I can raise it a little bit up and get it done fast. What are you finding the most effective ways to source deals? How are you sourcing the deals now?
Yeah, I mean, I just tell people. I tell everyone what I want, and the more specific you are, the better. And it's a lot of it's broker relationships. We buy in only really two markets. Like we buy in Chattanooga, Tennessee, and we buy in Metro Detroit, and we have a reputation in both of those markets. So as a person, if we put it under contract, we're going to close it. There are obviously exceptions, but when there's an exception, they know why there's an exception, and we'll pull the cord quick if we're going to leave. Right. And I think as long as you build a reputation of being consistent and an integrity and they know when you make the offer that you're serious, you're going to get those deals. And I think that it's hard to compete with brokers. These guys are messaging and they've got costar and they're talking to every owner 50,000 times over. It's very difficult to compete with them. So instead of competing with them, I just pay them. Got it. So when did you enter the Detroit market? Actually, the very first deal I ever bought was in Detroit in 2011. It was a condo, a single family condo. We actually still own it. It's in Birmingham. So it's like a nice suburb of Detroit. And it was a bank owned foreclosure. Bottom of the recession, we paid 30,000, probably with 150. Now we bought two in the same building, and I probably never sell them, even though I said I'm getting out of single families because they're just so Dang stable. And I know they could go back down to 30,000, but I don't care because I know what the rents are. The market crashes completely, and I don't think they go back to 30. Maybe they go to 70. Right. Or something. That's okay with me because the cash flow and they're easy to keep. That's when I started there. We started multifamily in Detroit in 2017 and then again, not in the city again. It's in Macomb County mostly so areas outside of the city, workforce housing. We did a lot of Section Eight and we've done really well on that. But now we're at a point where we've rolled a lot of our local community stuff into non recourse long term debt, ten year terms in the last six months, and we have a couple more that we're going to roll into that in the next six months. And then it's just set it and forget it, kind of stuff like that. And the cash flow is crazy. We're moving to pull cash out and having payments be the same because we bought it a higher interest rate environment in some cases on 20 year amortization schedules instead of 30. So we can actually pull cash out and keep our payment the same or less. And to me, that's the best possible place to be right now because even though there probably will be inflation, if you borrow dollars and there's inflation and you leave the dollars in your bank account, you lose money on the dollars you left in your bank account, but you gain the same amount back on the dollars that you're paying back cheaper because you've got the inflation hedge in the debt. So I'm going to stack as much cash as I can and utilize that to buy the best deals I can. If there's a great deal, I'll buy it. If not, I'm just going to wait because I'd rather have cash if prices go down. Yeah. So as covert has impacted just about every market, what are you seeing with the decentralization in the big cities? You had mentioned you're not in center city, you're on the outskirts. Again, super sound strategy. Do you think that this is a pattern that so let me give you a little more context. I was reading a report recently, Partnership for New York, well respected organization out here, Kathy Wild at the head of it, super, well respected leader in the community. 8% of the office workers in New York City have returned to work five days a week, a week, 8% now, I know business speak. And what I was reading in the report where a lot of these companies saying, yeah, we're going to take a wait and see approach and we'll talk in another quarter or two. Folks are starting to embrace this. Okay, people can work from home thing.

Let's adjust salaries, let's modify our space. Let's scale back. Let's get out of some of these real expensive digs and opt for much more affordable space. Do you think that these big cities that have been impacted the most are in for a real long term correction, or do you think that these things bounce back quick? Yeah. So I mean, listen, high rise office is not something I'd want to buy right now, maybe at the right price. Like if I was going to convert it or something, but I would be really concerned about high end office space. I think that the trend was already away from it. I think that that was going to be a dying space anyway. And what Kronovirus did really is an accelerated trend that already existed. And that's what I was saying about retail, too. It's like movie theaters are already dying. Like less and less people are going to the movies. Then they may have a resurgence because they may have gone too far in one direction. And the same thing in office, you might see, instead of 8% of Return to Work, two years from now, it might be 50% return to work, which is great. That's five times as much as now, right. Or six times as much as now. But the problem with that is it's still half of what it was two years ago. And I think we were going that direction anyway. And to the extent that we were going that direction, that part that was going to go away anyway isn't coming back. I don't know if that's 20% or 50%. I doubt it's 92%, though, right. I think we're going to see some resurgence and there's going to be price correction in that stuff because of that. And that's natural. And what Coronavirus did is it made it faster and more painful, but not necessarily any worse than it would have been otherwise. Yeah. The retail decentralization that started to happen in 20 05. 20 06, yes, you've got the Amazon effects, right. If you can buy something on Amazon, you do. I love Amazon. But you know what happened. And that got accelerated, too, because you know what? Even things like this has not happened yet. But I suspect will happen with like Uber eats and all of your DoorDash and stuff. I suspect there'll be restaurants that are carry out only that didn't exist as carry out only before. And the reason they'll exist is because people have gotten comfortable in the suburbs ordering food. But right now, if I want, I can have McDonald's delivered to my desk. When I went to Egypt in 2001, they used to have these guys that ran around on little scooters with McDonald's on the side and they would deliver McDonald's. And I actually ordered it one time just because I thought it was hilarious to get McDonald's delivered because that wasn't something for us. Right. I don't need McDonald's now. Nothing against it. But it's not my thing.

But the point is, I think we're going to see restaurants converting away from having dining space or having much less dining space right now. You've already seen that in the cities because real estate prices are really high. Right. Like New York has a lot of places that are essentially take out. Right. But that's not common in Chad Nugget. And I think it will be because I think people have gotten used to the delivery stuff. And like New Year's Eve, my wife and I went and picked up food, and I don't think we would have ever done that two years ago. Right. And we didn't do it because we were afraid of omnicross. We did it because we just felt like having a nice quiet evening in our house. And you know what? We could have DoorDashed it or Uber eats it or whatever. Right. But not every restaurant has gotten on that bandwagon yet. So the place we wanted to go wasn't there yet. But it's going to happen. And it would have happened anyway. But it's accelerated dramatically by what we've all gone through collectively. Yeah. We're seeing ghost kitchens. We're seeing places pop up that have no retail presence at all. Exactly. It's interesting how and that's going to get to that. It starts in the cities. Right. But it's going to get everywhere. It's going to be like some rural place in Iowa is going to have a ghost kitchen. I know it's going to happen. That's the way of the world. Absolutely. World is changing quick. But there are pivot opportunities out there and there's ways to, as we said in the beginning, get ahead of it and take advantage of it. You make the most money in chaos anyway. People that stay ahead of this stuff, the people that recognize the trends, they're the ones that make a lot of money. That dude who formed Uber, who apparently is a terrible person or whatever, I don't know, because he kicked out. I don't know. But they're making movies about it and everything. That dude made a lot of money. And when I first heard of Uber, I was like, this is the dumbest idea I've ever heard. Like if I want a cab, I'll just call a cab. Right. But now it's actually freaking brilliant. Right. And it's changed how we do everything. They've uberified stuff.

Right. I'm surprised that there isn't like a big name like lawn service. That's like the Uber of lawn care. Now somebody should do that, right? Probably somebody is doing it. I just haven't heard of it yet. And that's going to happen with that whole, like, the decentralized nature of stuff. And this stuff is all going to be on the blockchain. I know that sometimes people think I'm crazy when I say this stuff, but something like the Register of Deeds office, I don't know what they call it in New York, but we call it in Michigan, in Tennessee, that's going to be a blockchain for sure. That's going to be a blockchain. And it's going to be really slow before that happens because the government is always the last one on board. But I guarantee you, people are gamifying this. They're tokenizing real estate already. I know people that are doing it. It's going to happen. I mean, heck, I'm actually contemplating doing Reg crowdfunding tokenized version of like a Safari Lodge in Africa just because I think it would be fun to let people buy, like, Safari Lodge tokens or whatever we call them, and let them go out there and own 100 or 1000 or even a billionth of a Safari Lodge. And then they can come to their Safari Lodge and they can go into the National Park and see Lions and elephants and stuff like that, and they can go back home and be like, I got to hang out at this building I own in Africa. People are going to love that. That's the way the world people love that stuff. Like tiny pieces of stuff. No question about it speaks so directly to who the new audience is. We're working on a deal right now, and you took the words out of my mouth where we're tokenizing a shopping center, essentially. And we're making something that was not available to the everyday, never mind everyday investor, to just the everyday person and giving them an opportunity, using the ledger, using blockchain transparency, allowing for people to see in real time having the money dispersed and get a real clear, true window into how all this stuff works. And if you do that, there's plenty of money to be made. Transparency, I think, is the future. That's what sells.

That's what people want. And it can be not easily, but relatively easily achieved if you take the time and just revision things a little bit differently. Yeah. I mean, listen, if you were making wheels for wagons. Right. At the turn of the last century, we're in a dying industry, but that doesn't mean that we aren't better off having cars. Right. And that's kind of how I look at this stuff. Yeah. There's a lot of things that have accelerated because of covet, but there's, like, a lot of great stuff that's going to come from it. I don't want to minimize the pain the world has gone through. But I will say this. The people that have inspired me the most are people that have overcome, like, incredible obstacles and have changed the way that they live their life because of it not all that different than my own story. And that's probably why that resonates really well with me. But I believe we've all gone through this couple of years now of global hardship, and the whole world has the opportunity to be much better because of it. Yeah. There'll be some short term pain and some people aren't going to survive it. That sucks. But also we can come out way ahead. So, like, ten years from now, I think people are going to look back and be like, this is one of the best things that ever happened to us. Yeah. Listen, this has been an amazing chat, Jeff. How do people find you?

What's the best way for folks to find you? I'm not hiding. Right. So it's Jeffrey Holst everywhere. So like, Facebook, Instagram, TikTok, whatever. It's JeffreyHolst.com but my real passion, like I said at the beginning of the show, is last life ever and last life ever is just about living the best version of your life. It's one of the two podcasts that I do, but we also have a last life ever private group on Facebook where people can just come and talk about what they're doing, what their goals are, what their dreams are and support each other. And I really feel like that's the place I like to hang out the most. So if you really want to get my attention, that's where you go. And then if you want to see more about real estate, you try my real estate show, which is old fashioned real estate and we literally just drink bourbon old fashioned and talk about real estate on YouTube and that's a ton of fun, too, so people should check that out as well. This was really great and sponsored hiring informational I really enjoyed our chat. Jeff, thank you so much for the time. Yeah, thanks for having me on. Absolutely. As always, everyone out there, please stay safe.