[00:02:24] Patrick Donley: I’m happy you were able to survive a snowstorm and make it to the office. And really looking forward to this.

[00:02:28] Patrick Donley: I’ve been a fan of yours. I’m a big fan of Set for Life. It was influential to me and BiggerPockets has been influential to me. So I was really looking forward to diving into a lot of different ideas today, but I wanted to start off, you’re CEO of BiggerPockets now, but it always wasn’t that way. You started as a cubicle guy, working at a company.

[00:02:45] Patrick Donley: I think it was like the worst rated company of all time or something. I forgot that the Glassdoor rating was not very good. So I wanted to hear about those early days of yours, just like working, you come out of college, you’re working this cubicle job. Talk to me a little bit about that and just how the search and interest and hunt for financial independence got started for you.

[00:03:06] Scott Trench: Yeah, sure. So in 2012, I was between my junior and senior year of college and I got an internship at a Fortune 500 company here in the Denver, Colorado area and the internship was wonderful. I had a great time with my friends. I made about a bunch of friends, got a job offer, and then decided to accept it and had my job lined up for my entire senior year, college basically, and moved out and started that job in 2013 in the late summer.

[00:03:34] Scott Trench: And within a couple of months, I realized that while the internship was great, and while I, make a big deal about the worst company rated in America, it was, at the time I worked there, that was a true story, but I wasn’t mistreated or anything, I had good colleagues, I had, reasonable work, reasonable pay, all that kind of stuff.

[00:03:49] Scott Trench: I just realized that there was no long term upside for me in the way that I wanted to advance my career. It would take 20 years to move into the C suite if I was very fortunate and lucky and had a number of really good moves. And I had, I was ambitious and I was starting to catch the bug for this concept called financial independence, retire early, probably a couple of months into that journey.

[00:04:08] Scott Trench: I was studying how to be a better financial analyst. I’m putting myself back 12 years. I think I was studying to become a better financial analyst, how to be, and, learning about finance and the concept of personal finance came up. And that led eventually to, I think the mad scientist to Mr.

[00:04:23] Scott Trench: Money Mustache, who was really a big influence on me. And, the aha moment came while diving deeply into his content. So once I got the bug for financial independence in late 2013, early 2014, a series of cascading events led to me joining BiggerPockets. I started listening to the BiggerPockets podcast.

[00:04:43] Scott Trench: I started meeting up with a group of local real estate experts and entrepreneurs. And I took each of them out to lunch because I was lucky to be a part of that group. I happened upon it serendipitously. One of them happened to work in the same co-working space as the founder of BiggerPockets, Josh Dorkin.

[00:05:00] Scott Trench: I was a big fan personally of Josh and more broadly of the BiggerPockets business. And so I said hi, bugged him a couple of times and eventually got an interview and became the third. employee, the director of operations at BiggerPockets. There are other people that were technically working there.

[00:05:13] Scott Trench: I was the third full time employee at BiggerPockets that was actually employed by the company, not a contractor. 

[00:05:20] Patrick Donley: So what was that move like, like moving from a traditional finance company, doing analytics and moving towards a much more entrepreneurial kind of startup? I think BiggerPockets had been around for quite a while at that time, but still, it was early days.

[00:05:32] Patrick Donley: And like you said, you were the third employee. What was that move like? And what did you think about it? Was it a risky thing for you at the time? 

[00:05:39] Scott Trench: Yeah, so the risk in my mind had a lot to do with my cash position. And because I was so frugal, thank you, Mr. Money Mustache, I had amassed, probably by the time I joined Bigger Pockets, like 15, 000.

[00:05:51] Scott Trench: And by the time I bought my first property, 20, 000 to 25, 000, I joined Bigger Pockets in July, 2014, and went under contract on my first duplex shortly thereafter. And, my comp was essentially flat between the two companies. My benefits, if anything, were a little worse. At BiggerPockets to start small early days, but what was life changing and so awesome about BiggerPockets was one, the passion I had for the mission.

[00:06:15] Scott Trench: I was a huge fan of the company. It was changing my life in real time when I joined. And the ability to just constantly learn. My days were completely filled with me learning and developing new skill sets. It was expected that I learn how to, I read this blog, learn how to run a split test, two different experiences on the website and see which one gets better engagement, for example, and then go and implement it, in the next day or two.

[00:06:40] Scott Trench: That was like, those would be like regularly given tasks for me, go figure out this billing platform. And I just thrived in that type of environment. That’s where I do best is constant learning. No two days are the same. There’s always a new challenge. 

[00:06:53] Patrick Donley: So your initial role was what? Director of VP of operations?

[00:06:58] Scott Trench: Yeah, I had a string of operations titles over my time at BiggerPockets. But yes, it started as director of operations, which at a three person company means everything from you doing revenue to get the coffee, please. Move the car, yeah. 

[00:07:12] Patrick Donley: And it sounded like you pestered Josh a couple times before he finally was like, Okay, we’ll give you, we’ll give you a chance here.

[00:07:19] Scott Trench: Yeah, he remembers it differently, but I seem to remember having to follow up a number of times and interpreting his reaction as me annoying him in the middle of his workday when I said hello. 

[00:07:29] Patrick Donley: I wanted to get in, you mentioned your first deal. Talk to me a little bit about that. You had an interview a few years ago with my former co host, Robert Leonard.

[00:07:37] Patrick Donley: He wrote a book on house hacking. So I wanted to hear, is that, talk to me about the first deal and if that was part of it, was doing a house hack on it. 

[00:07:45] Scott Trench: Yeah, the first deal was a duplex. It was in Northeast Denver. 240, 000 purchase price, 5 percent down, 12, 000 down payment. The mortgage was 1, 550, including principal interest taxes and insurance.

[00:07:57] Scott Trench: Other side paid 1, 150, had a roommate paying 550. So it was right there. And this was not lavish living, right? This is a box, right? 700 square feet, each side, flat roof, yard is a disaster, the worst house on the block. I bought it from HUD, which was a huge advantage because at the time, HUD was offering it only to people who wanted to be an owner occupant.

[00:08:20] Scott Trench: You had an exclusive window for 30 days, and at the time, house hacking was not super popular as a term, so I was not competing against the investors who might have otherwise bought it, and I had some time to just think and react to it. I got to run it by one of the people in that mastermind, for example, and he was like, dude, yeah, you gotta go on this one.

[00:08:37] Scott Trench: If you don’t, I’m probably gonna be making offers on this in a few weeks. And like those little things, that network, those connections make all the difference in helping get you over the hump because it’s terrifying, right? If someone is going through their first purchase today, relatively speaking, you might have a similar challenge, right?

[00:08:51] Scott Trench: I was making 50 grand and that property was 240, 000, right? I don’t know, if you’re looking at something that’s five times your annual income, then it’s perhaps a similar type of dynamic. 

[00:09:02] Patrick Donley: Let’s get into the book a little bit set for life. That was a big influence on just me, the way I think about money and finances.

[00:09:07] Patrick Donley: It’s Just talk to us a little bit about it for our listeners that aren’t familiar with it. It came out in 2015, is that about right? I mentioned this before we got started, but I’ll see a lot of lists on the best personal finance books that people should read and it’s consistently listed.

[00:09:21] Patrick Donley: So share with us what do you think? I want to hear a little bit about the process of writing it, but first I want to just hear about what it is. Do you think it just strikes a chord in the average reader that makes it so important and influential? 

[00:09:33] Scott Trench: What I thought at the time, and I definitely, yeah, I think still agree with, is that there was a lot of books written about wealth management, but they were from the perspective of somebody in their 40s, 50s who had amassed a large amount of wealth and felt that kind of was the credibility factor for that.

[00:09:51] Scott Trench: And I think that when you know, after interviewing a lot of people, what I found is when people go back to the beginnings of their story, it almost always begins with that scrappiness, the frugality, the hustle, those types of mindset. And then I think it mellows the worldview around money begins to mellow out in the years later.

[00:10:06] Scott Trench: And at the time I wrote the book, I was probably five, five, six years into my personal finance journey. I had accumulated plus or minus about a million dollars in net worth. And I still had, I’ll call it the obsession with financial independence and the grind mentality that I think, sometimes it gets a bad rap.

[00:10:24] Scott Trench: There’s hustle porn, derogatory comments and all that kind of stuff. But I fully subscribed to that for a good five or six years. And I recall days where I would get it. wake up in my duplex, make breakfast while listening to an audiobook, bike the five miles to Bigger Pockets, work at Bigger Pockets, bike to rugby practice, come back home, write a little bit more, and that would be my day with zero dollars spent, have a little bit of fun, but really hustle work and try to accumulate.

[00:10:52] Scott Trench: And I think that the book captures that mentality unapologetically from the perspective of somebody who is right in it and right at the, right there on the cusp, if not just over the edge of financial freedom and knows what it’s like in that journey. I think that’s what resonates with people is it’s unapologetic.

[00:11:08] Scott Trench: Hey, if you want to get to this thing, you need to save half your income. And that means you’re going to make drastically different choices about where you live, how you transport yourself, what you eat and how you prepare that you can have fun. You can still put together a little bit of an entertainment budget, but if you want to get there, you have to make big changes, sacrifices, or get really creative on those big three expenses.

[00:11:29] Scott Trench: And then you have to be completely unapologetically opportunistic with your career using those savings. You have to make radically different choices like not putting your money into a 401k. A 401k is a great way to diversify your wealth to 10 percent long term average returns. It’s not a great way to get a shot at early financial freedom and take your crack at entrepreneurship or a highly levered real estate investment strategy, for example, which are ways to get there.

[00:11:56] Scott Trench: You have to be willing to take risk and to take that approach with the extreme level, I will call it, of frugality. And I think that’s what the book captures. And I’m reciting all this and I’m like, I don’t know if I could write that today because I have mellowed out. I don’t want to live the way I did five, six, seven years ago.

[00:12:12] Scott Trench: I’m glad I did because I paid a price and was able to amass a pile of assets that now produce a tremendous amount of optionality in my life and the ability to live an upper middle class lifestyle on passive income alone. But I don’t want to go through what I went through to get there. But I think that a lot of people do.

[00:12:28] Scott Trench: And if you are willing to do that’s what I think Set for Life captures. Maybe that, that other books don’t. I’m proud of it. And a little cringed at it, if you can’t tell from my diatribe here, there’s a different Scott who wrote it. I’m super proud of that, Scott. And I recognize that it is that mentality that you have to have.

[00:12:44] Scott Trench: If you want to really have that shot at getting ahead here, at least without starting some uber big business. 

[00:12:51] Patrick Donley: I had an interview last week and the gentleman made the same point that contributing to a 401k is basically a bet against yourself. He’s you shouldn’t be, when you’re young, you should be taking bets on yourself and you can maybe earn eight, nine, 10 percent interest, but it’s really by putting that money into a 401k, it’s really a bet against yourself.

[00:13:10] Scott Trench: I think that’s a super interesting point. And I think I completely agree with that. If you’re someone like this is the millennial investing podcast, surely a lot of people listen to this. Want to get ahead early in life. And I think that if all of your wealth, this is the middle class trap, right?

[00:13:23] Scott Trench: The middle class trap is, I don’t know how many millionaires we’ve interviewed on BiggerPocketsMoney who, Hey, I’ve 500, 000 in my home equity. I’ve got 450, 000 in my account. 401k and Roth IRA combination of retirement accounts. I’ve got 25, 000 in my after tax brokerage, 15, 000 in my checking and savings, and 7, 500 in credit card debt.

[00:13:46] Scott Trench: And it’s you’re almost a millionaire. You are over a millionaire, but you have No ability to leave your job. You’d be broke after a month or two. And I think that’s right. I think that if more people took those first few years of savings and just amassed 50, a hundred, something like that outside of the 401k, especially early on by making those sacrifices, paying the tax, man they’ve reaped the rewards from.

[00:14:09] Scott Trench: Optionality to start businesses, buy real estate, all those other kinds of things. The key is that you have to have the mindset of, I’m going to use it to take my shot and make my bet, not buy a boat or a Tesla. 

[00:14:19] Patrick Donley: Charlie Munger has that quote about the first hundred thousand dollars is a bitch, being able to save that first hundred thousand and then figuring out some different options probably makes a lot of sense for people.

[00:14:30] Scott Trench: Yeah. And I wonder, if he were here, if he wouldn’t maybe amend that a little bit to say the first hundred thousand after tax is the bitch, right? With that’s how you really begin to, or the first hundred thousand that you really have that control over the first hundred thousand, your home equity, happens automatically and doesn’t give you that control.

[00:14:45] Patrick Donley: So in writing the book, we mentioned Mr. Money Mustache, but were there other influences on you that helped with your mental blueprints and how you were thinking about money at that time? 

[00:14:55] Scott Trench: Yeah, I went down the rabbit hole of all the five folks. So there was the early retirement extreme guy, Jacob Blund Fisker.

[00:15:00] Patrick Donley: There was, that was extreme. His stuff was extreme. 

[00:15:04] Scott Trench: Yeah. I was like, okay, good. Like his situation for me was super helpful because, and complete respect for the guy. He has a wonderful setup and has really figured out a lot of things and inspired a lot of people. But for me, it normalized Mr.

[00:15:14] Scott Trench: Money Mustache because I was like, oh no, he’s the extreme guy. Mr. Money Mustache is the normal one. And I’m the normal one here. With all these things. So that was helpful in a variety of ways, not just the tactics and tips, but also in, in contextualizing what was going on bigger pockets.

[00:15:28] Scott Trench: Obviously the mad scientist was another one with Brandon, who lives in Scotland. Yeah, and there was probably, there are probably more that I’m forgetting here and that I touched on, but again, that was 10 years ago now. 

[00:15:41] Patrick Donley: There’s another one that was influential to me called, and this was way back.

[00:15:44] Patrick Donley: It was written maybe in the nineties, I think your money or your life by Vicky Robin and Joe Dominguez were, and the big idea was like putting a value on your time. And then it’s a common thing. Now, Naval Ravikant has that thing, put a value on your hourly wage. And if something is You know, not worth your time, pawn it off to somebody else or delegate it or outsource it.

[00:16:03] Patrick Donley: But it really gave this idea and your money or your life about what your time is worth in terms of your life energy. And putting a dollar value on that. 

[00:16:13] Scott Trench: I’ll put Rich Dad Poor Dad and The Millionaire Next Door in there as books that were highly influential as well. 

[00:16:18] Patrick Donley: Yeah, definitely inspirational. So let’s get into real estate in 2024.

[00:16:24] Patrick Donley: You and I both got into it, about the same time it sounds like. For somebody that’s listening to this in 2024, does real estate make sense in your mind as a path to wealth? And are the opportunities still there? Because a lot of people can be looking, listening to the news with interest rates and all kinds of things saying maybe now is not the time.

[00:16:42] Scott Trench: Yeah. So I’ll actually start the discussion with the stock market. What is an investment in a U S stock market index fund? It’s basically a bet on the long term growth and improvement and efficiency gains in the U S economy. And I think that if you believe in that long term bet on growth in the U.

[00:16:57] Scott Trench: S. economy, you’re going to place your money in index funds, set it, and forget it for a very long period of time. An investment in U. S. residential real estate is a similar type of bet, right? You’re betting on the overall growth of the U. S., wage growth, long term inflation. You’re betting on, in particular, that region that you’re investing in a property, and you’re betting that You will over time get the rewards of appreciation multiplied by leverage.

[00:17:23] Scott Trench: Most investment properties are bought with leverage. So I fundamentally believe in that bet. My portfolio here in Denver, Colorado is a set of properties, duplexes, triplexes, quadplexes. I may purchase single family rentals as well at some point, and I believe in the long term and the growth of the U S economy. I believe in long term inflation being at a little over 2%.

[00:17:45] Scott Trench: I believe that in Denver, Colorado, specifically, we will see net inbound migration over a long period of time. And we will have supply constraints that constrict new development, mostly in the form of water. We’ve got plenty of land out here. We don’t have a lot of water here in Colorado. And I believe that we’ll experience a greater than three to four percent long term appreciation rate on both prices and rents, and that’s why I continue to invest, hold my properties, and intend to buy more over the long term.

[00:18:14] Scott Trench: And I think that’s fundamentally what investors have to believe if they’re going to get into real estate investing in any sense. There’s a whole bunch of stuff in the near term that then you can focus on that then make things harder or that, that force creativity or that, make people have pause.

[00:18:29] Scott Trench: Transaction volume is down dramatically from a peak in 2021 for a reason, right? Both on the investor and homeowner front. So we can get into all that near term stuff, but I like to frame it with what is the long term bet here? Most people aren’t buying a rental property and holding it for two years.

[00:18:43] Scott Trench: They’re holding it for 10 or 15. And if you believe that, that’s the first starting point. And if you don’t, you shouldn’t get into real estate. 

[00:18:50] Patrick Donley: Okay. So assuming we’ve got a positive, optimistic view of where the U S is going and that growth is going to continue, let’s talk next. Is now a decent time with interest rates high or should like, I’ve talked to a couple younger guys who they want to get involved in real estate, but they’re thinking like maybe I should wait a little longer.

[00:19:06] Patrick Donley: Maybe rates will come down or values will come down. Like maybe now’s not the time to buy. I know this is case specific. But what would you say to a younger person? Who’s got some savings ready to make an investment, but they’re wondering if now’s the time to jump. 

[00:19:19] Scott Trench: I think that the right time to invest in a market is one, if you believe the long term thesis and two, when your personal financial situation and life circumstances are conducive to it, right?

[00:19:31] Scott Trench: The right time for me to invest in a 500, 000 rental property is when I have 125, 000 for the down payment. When I have another 10, 000 for reserves and when I have whatever else is going to come up from a planned rehab perspective, whether the portion that I’m not financing, I have the cash on hand to cover that because again, if I’m investing in the U.

[00:19:52] Scott Trench: S. stock market I’m going to basically dollar cost average every month and add in the surplus that I get from my paycheck or whatever it is. and put it into the market on a continuous basis, right? We want to follow the same pattern long term because what we’re trying to do here, what I’m trying to do at least as an investor is I want a system where I don’t have to be exceptional to win.

[00:20:13] Scott Trench: That’s the beauty of index fund investing and why half my portfolio is in index funds, right? If I don’t have to be exceptional. I’m getting a low fee, long term average here, right? Now, in real estate, we want to pursue some of the inefficiencies, and we’ll talk about a good deal later, if you’d like, and how to find that specifically.

[00:20:28] Scott Trench: But we start with a system that is going to produce a great shot at that kind of 15 percent R. O. I. at least in the early years when we’re fairly leveraged because we’re doing all this work. We’re going to have to probably visit the property. We’re gonna have to take a look at it. There are fees that are associated with buying real estate.

[00:20:43] Scott Trench: We want a premium over what we can get in the stock market. The key is here. We need a system where you can be average and still win. And so I think my portfolio is basically dollar cost averaging every 18 months in real estate. Sometimes I will buy high at the wrong point in the cycle, and sometimes I’ll buy low.

[00:21:00] Scott Trench: And it’s really hard to know that. And everyone wants to predict the market cycle in that context. But I think first and foremost, it’s, I believe in that long term thesis, and I’m going to buy consistently when my position can’t afford it. I’m never going to put myself in a position where I’m dependent on the property working out to move my financial position forward.

[00:21:16] Scott Trench: So here are some examples of things that I think I get people out of trouble. A HELOC right? I take a HELOC on my primary and I use it as a down payment on my investment property. This creates a huge problem, right? Because I’m financing that, that property. I’m maybe getting a couple hundred dollars a month in cash flow, but I’ve got, I have to repay the HELOC plus interest.

[00:21:34] Scott Trench: So I’m getting a 500 a month cash flow property and I’ve used a 60, 000 HELOC. If I’m paying it back over the next five years, that’s a thousand dollars per month in principle, before we get to the interest and that property is going to suck cash out of my life over that time. So again, I think that the personal financial position is the most important thing.

[00:21:50] Scott Trench: Now, in 2024 specifically, right now that I’ve coached all of that and saying, don’t time the market to start with a plan where you can win in any market condition and trust the plan over the long term. Now I’ll predict 2024. First thing I always like to start with is supply. There are about 1. 6 million units of housing stock currently under construction in this country.

[00:22:12] Scott Trench: About 975. That’s a lot. That’s close to the historic high, right? On average, we form about a million households per year in this country. Last year, we formed about 230, 000 households because in tougher economic times, people tend to group up or whatever, right? There’s just lower household formation.

[00:22:29] Scott Trench: This year, the pressure is going to be even higher on the supply front. We saw modest price gains last year, and we saw rent growth actually declined by just under 1%, which is a rare thing for the U S economy. In 2024, I’m expecting rent growth to continue to decline by a couple of percentage points, because on average, the U S is seeing a ton of new multifamily unit construction hitting the market, which is what competes with everybody for rents.

[00:22:56] Scott Trench: This is a disaster for the multifamily and apartment complex investing space. Those guys are getting crushed. They’ve seen a 20 percent to 30 percent likely decline in asset values from the peak in 2021. And I think they’re in for more of a bloodbath in 2020. I’m going to release an article to BiggerPockets that will come out probably before this recording that’s five or six thousand words describing this pain in great detail.

[00:23:20] Scott Trench: Why I believe that’s the case on the multifamily side. On the single family side, we have a pretty close, a little bit higher than usual, but pretty close to the normal amount of currently under construction supply, about 600, 000 homes. Now, these homes that are being built are geographically dispersed across the country, right?

[00:23:38] Scott Trench: So the South and the West are seeing a disproportionate amount of this new construction. And the south and the west in particular are getting crushed right now from a multitude of factors. They have all this new supply. There’s a huge bet on inbound migration, which I worry for folks in those areas is a little bit overplayed at this point in time, right?

[00:23:57] Scott Trench: I think all the people who wanted to move out of California to Texas may have done so. by now. And that belief that more is coming again, could be a challenge. You’ve got huge taxes in those States and the property tax front. And a lot of valuations have soared in the last two years, and those are still catching up.

[00:24:11] Scott Trench: So that’s causing a tax increase there. And you’ve got insurance costs rising at crazy rates in both of those States, Texas and Florida in particular, but much of the South and parts of the West overall. So those are causing a lot of pain for operators right now. And I think that if I’m looking at investing in those regions, I’m being very cautious and doing my homework on the supply that’s coming in at the very least, and then also checking that against the, do I have some really bullish projections because like markets like Phoenix, they got really bullish projections on income and inbound migration, for example, those might be true, but there’s also a supply dynamic and they got a ton of supply coming in.

[00:24:49] Scott Trench: So I’d be really careful and do my homework in those areas. In the Northeast and the Midwest, you have much more muted dynamics from a supply standpoint, right? So you don’t have anything special going on or a ton of construction. And I don’t think you’re going to see much of a decline in rents.

[00:25:04] Scott Trench: You may even see substantial increases in prices and rents in those areas because they’re still more affordable than other parts of the country. And you don’t have the supply dynamics. On the interest rate front, I think that the markets are crazy right now. And I’ll probably be completely wrong. And you can play this next year and laugh at me about all of this stuff, of course, but I think that the markets are a little crazy right now on the interest rate front.

[00:25:25] Scott Trench: The most important interest rate to real estate investors is the 10 year U. S. Treasury. The 10 year U. S. Treasury is hovering around 4 percent right now. That’s important because it’s lower than the overnight interest rate. treasury rate, right? Which is about five and a quarter, five and 5. 3%. What this means, usually the 10 year is about 150 basis points higher than the overnight rate in a typical Euro curve.

[00:25:50] Scott Trench: So what the market’s saying is they expect a recession so deep and so bad that the Fed is going to cut rates by nine times. to get it to about two and a half to 3%. I think they’re nuts. The Fed is not saying they’re going to do that. Yes, the Fed screwed up in 2021 and let inflation get out of control.

[00:26:09] Scott Trench: Since then, they’ve been the least bad central bank in the world. I love using the word least bad because it offends the fewest people. When that’s a compliment to J PAL. I think he’s handled this better. Like the US is alone among major world economies that is doing all right now. You can see everyone has an opinion about what all right is, but they’re not seeing the devastation that a lot of people predicted.

[00:26:30] Scott Trench: They’re seeing asset values crater. In the commercial real estate space, for example, but we’re not seeing the wealth of the middle class in America being eroded right now from those decisions. We’re not seeing mass layoffs and they’ve got a lot of room to run. I take them at their word. When they say they’re going to lower rates three times in 2024, I believe them.

[00:26:48] Scott Trench: If they do that after that, I think it’s anybody’s guess, right? In your coin, you’re flipping a coin. If you think they’re going to continue lowering them, keep them the same or raise them. And I think from that point, that means that 10 years is going to climb, right? That 75 bips down puts your from five and a quarter for the overnight rate, puts your overnight rate at four and a half that puts your tenure at six.

[00:27:08] Scott Trench: If the market stabilized long enough from a long enough time perspective, and that’s not crazy in the context of historical interest rates for this country. Despite what a lot of people listening to this will say. So I think that there’s every possibility that it will happen. I don’t think in 10 years we’ll get to six, but I think it will climb up and up and up probably a hundred basis points over the year.

[00:27:27] Scott Trench: And that’s going to continue to hammer your commercial real estate space. But despite all this talk about interest rates, it’s not going to hamper your single family housing market nearly as much. 

[00:27:37] Patrick Donley: And why is that? Explain that. Yeah. Explain that a little more if you would. 

[00:27:40] Scott Trench: Yeah. The reason for that is that a 30 year mortgage is tightly correlated with a 10 year treasury, but it’s not perfect.

[00:27:47] Scott Trench: There’s usually a certain spread between 30 year mortgage rates and the 10 year treasury. Right now, that spread is higher than normal. I think it’s about 75 to 100 bips. I should have had this one ready. People listening, go take a look at this if you’re interested. But I believe that as the 10 year rises, that spread will compress and mortgage rates will stay in the high sixes, low sevens throughout the year in 2024.

[00:28:11] Scott Trench: So I think that there’s a reasonable chance that U. S. housing stock on average, again, regional differences are going to be the story. They were the story of 2023 and they will be the story of 2024. Some people will feel tons of pain and some people will see their properties and rents soar depending on where you are in the country.

[00:28:28] Scott Trench: And I’m betting on the Northeast and the Midwest as potential places in 2024 for appreciation. I think that the Southeast. The Southeast and the West are in for some potential pain in 2024 from a rent and pricing standpoint. 

[00:28:43] Patrick Donley: So in states in particular, what states are you mean like Texas, California, what, when you say the areas that will experience pain, what states would those be?

[00:28:51] Scott Trench: I think big markets in Texas and Florida are going to be among the hardest hit. Austin, Texas, I think is in for continued challenges. I think Tampa, Florida, I think these big metros in Florida and Texas are the ones there. Now, I am going to commission a study here at BiggerPockets to see where that supply is hitting, because that’s where I think you should be the most afraid if you’re an investor.

[00:29:09] Scott Trench: Supply is not your friend. As a new investor or as an investor in this country,

[00:29:14] Patrick Donley: I wanted to specifically talk about your buy box. So you mentioned you’re every roughly 18 months, you’re making a purchase. Let’s talk about what your buy box looks like and how for a new investor, like how they can think about and construct their own buy box to test out a hypothesis.

[00:29:30] Scott Trench: Yeah. So first of all, again, that’s 2024, right? So take that how you will as an investor. And despite the fact that I think Denver, Colorado is squarely in the, I’m not loving the prospects for 2024. I plan to buy another property here in Denver in the next year, probably in the later part of the year. But I know that despite my prediction, I could be dead wrong.

[00:29:50] Scott Trench: I could be right about everything and wrong about something else that comes in and I’ll bet you this, that in 30 years, my investment made today in Denver, Colorado is going to perform better than the one in the Midwest. In 2024, the Midwest is going to perform better, but in the next 10 years, in the next 10 years, almost certainly in the next 20 years, for sure, in my opinion, come back and see me in 20 years and we’ll debate it at that point.

[00:30:13] Scott Trench: But I think that Denver is going to see that price appreciation and Detroit, for example, may not. That’s the theory there. I bought a box in Denver. I really like big, nice luxury multifamily. And so my favorite type of property is like a four or five bed duplex on each side. Say more about that. 

[00:30:32] Patrick Donley: Why is that?

[00:30:33] Patrick Donley: Do you want a big duplex like that? 

[00:30:36] Scott Trench: I believe that there’s a rise in high income earning renters. I believe that those larger units offer the ability to diversify your strategy. So for example, you can do a sober living. If you wanted you could do a rent by the room strategy and produce a lot more cash flow.

[00:30:52] Scott Trench: They’re the type of units I want to live in. And I think that’s important, right? Is that, that I’m buying stuff that I and my family would live in. I literally live in one of these types of duplexes that I’m describing here right now. Here in Lakewood with my wife and our one year old baby and our cat.

[00:31:07] Scott Trench: And it’s a, it’s wonderful. So I like that for a number of reasons. I also think that it’s closer, it’s better cash flow potential. So this property, for example, would be valued at around 750, 000 to 800, 000. Each side would rent for just over 3, 000. The mortgage on that would be about 4, 500, and that gives you a pretty good shot at cash flow with a long term traditional rental strategy, more if you want to get into one of those creative strategies.

[00:31:32] Scott Trench: The price point is also high enough where I’m not competing with folks that are buying their first, their first house hack or small investment property. So that’s the kind of stuff that I particularly like and feel like there’s a reasonable competitive edge and the kind of thing that I’ll probably buy here in 2024.

[00:31:50] Patrick Donley: So is that who you rent to? Is it like sober living homes and do you rent out rooms by the room? Or talk to me about that a little bit more. Like you mentioned those strategies of why you like that. Is that how most of your portfolio looks? 

[00:32:02] Scott Trench: So that’s what I’m going to buy this year. Most of my portfolio looks like what I bought my very first duplex: two bed, one bath units, one bed, one bath units, up and coming areas, those types of things.

[00:32:14] Scott Trench: I did very well with that strategy for a long time, but it is a little bit more intensive from a management perspective, and I’m preferring the kind of B plus A neighborhood investing these days as an investor. I do have to put in more cash. down in order to purchase those, 25 percent on a 800, 000 property is a significant chunk of cash.

[00:32:32] Scott Trench: But I prefer that personally and believe it’s the right approach for me today. My other units typically, again, are in up and coming duplexes. I have two other duplexes in the Denver area, a triplex and a quadplex. The quadplex is one bed, one bath and rents each unit for a thousand dollars a month.

[00:32:47] Scott Trench: So a very different type of property than what I’m describing to you here. And my tenants in the nice properties, they’re actually five individuals that got pulled together to rent the property on one lease. They’ve been great. They live next door to me, always take care of the place, quiet, nice neighbors, and help us out from time to time.

[00:33:06] Patrick Donley: And you focus strictly on Denver. You wouldn’t go to Detroit just because of the values or whatever the numbers might look attractive right now. Your long term thesis is strictly Denver, correct? 

[00:33:16] Scott Trench: Yeah, I may change that at some point in the future, but to this point, I’ve only invested in Denver because of that thesis I just told you about.

[00:33:24] Scott Trench: I’m making a long term bet on appreciation of Denver, Colorado. I think people can live anywhere they want in the world these days and do a lot of jobs and they choose to live in Denver for the access to the mountains, the Great city that we’ve got here. Beautiful weather and sunshine. And the four major sports teams.

[00:33:39] Scott Trench: Great. Just overall, there’s a lot of things to like about living out here. Mountain view out our window. So I think that’s fundamentally my long term bet. And I can de risk the portfolio to a substantial degree as I’m operating it. I can go to a property, change the locks and paint if I need to.

[00:33:54] Scott Trench: If times get tough, I can move on from my property manager and self manage the portfolio. I think those are huge advantages that I’d be thrown away if I invested out of state, but if I was going to go out of state, I’d be gone in 2024 and I was looking for cashflow. For example, specifically, I might be going to upstate New York or one of those Midwestern cities like Cleveland.

[00:34:14] Patrick Donley: Yeah, I saw a list just last night about the top markets. And I think Buffalo was number one, Cincinnati, Columbus, and Cleveland were all top 10, I believe. So it’s interesting to me, but I totally agree with you just saying, staying hyper focused on the market where you live. So you have that control over, over your asset.

[00:34:32] Patrick Donley: I can’t imagine investing out of state, honestly. 

[00:34:36] Scott Trench: I think that if you’re going to invest in a state, it’s got to be for cash flow. It’s got to be in a place that you believe has long term appreciation prospects. And like a good reason to invest out of state is, Hey, I live in San Francisco and I make 120, 000 a year.

[00:34:47] Scott Trench: And it’s just, it’s never going to happen here. It’s going to take me seven years to do that. And I’m unwilling to move to these other locations. So I think there’s good reasons to do that, but I think that if you’re anywhere, but maybe, pockets of California, where it’s totally unattainable, maybe New York city maybe a select number of other cities.

[00:35:04] Scott Trench: It’s good to bias towards your local market if you believe in the long term thesis for that local market because of those risk mitigation factors that I just went through. I think it drives returns over time. Everybody has problems in this business and, if you can self manage and operate your way out of them, you’re not going to enjoy doing it, but you’re going to, I think, thank yourself that it was, within a half an hour drive of your home.

[00:35:25] Patrick Donley: So you followed this steady, maybe unsexy path. I think I’ve heard you describe it as unsexy, but it works right? This path with real estate towards financial independence. Looking back on your journey, is there anything you would have done differently? 

[00:35:39] Scott Trench: I watched dozens or hundreds of people race past me from a real estate perspective, just buying tons of property in their late 20’s.

[00:35:48] Scott Trench: And, create huge amounts of wealth. So obviously, in hindsight, 2020, maybe there’s some different bets you’d make, but one of the things I found is that many of those same folks could never stop, right? Once you start doubling the penny, it gets very addictive.

[00:36:01] Scott Trench: And a lot of those folks are the ones who transitioned into fund management and capital raising and bought tons of apartment complexes, hundreds of millions, tens of millions of property. And they are screwed right now, right? They’re going to they’re at risk of losing all of their investor capital in many of these cases.

[00:36:17] Scott Trench: And there’s nothing they can do in and you can run an apartment complex perfectly in Austin, Texas. You can have your marketing dialed in your operations dialed in, your asset value is just 40 percent less than it was two years ago, because the market’s crushing you between interest rates and the new supply coming on the market.

[00:36:36] Scott Trench: And so I think that what I am proud of or what I’m confident in with my approach is this concept of a strong financial position, slow and steady, 20 percent returns are great, but they’re not great if you compound at 20 percent and then go bust with a hundred million dollars. I’ll take my 12 percent or whatever it is that I’m getting in my portfolio.

[00:36:55] Scott Trench: I should probably go back and compute it and rephrase everything here to understand that, but at a lower rate and likely be able to compound it forever without real any material risk of a BK bankruptcy. 

[00:37:07] Patrick Donley: Yeah. I know you’re a fan of Warren Buffett and he’s got that one quote. Rule number one is never lose money.

[00:37:12] Patrick Donley: Rule number two is never forget rule number one. And to your point, you also, another idea of Buffett is buying below intrinsic value. Do you see opportunities in any real estate asset class where there’ll be opportunities to buy below or, replacement costs? Because there, it’s been tough to do that recently.

[00:37:31] Scott Trench: Yeah, so I think that in 2024, as all this inventory comes online, especially in the multifamily space, you’re going to see something really interesting opening up. And I think that’s where people are going to start trading in effect. And, one person’s pain is another person’s gain, right?

[00:37:46] Scott Trench: So I think there’s a risk of cap rates going from prime multifamily cap rates going from 5 percent where they are now to seven or 8%. That would be an enormous destruction in value. But at that point, now you’re getting a seven or 8 percent cash on cash return from a high quality multifamily asset.

[00:38:04] Scott Trench: I think that’s a very realistic possibility. I’m not saying it will happen, but I wouldn’t bet against it, I’m not betting against it at this point in time in 2024. And I think that could be an option, a possibility at the end of the year. 

[00:38:15] Patrick Donley: You had mentioned a little bit about your portfolio and it sounded like you do some index fund investing.

[00:38:20] Patrick Donley: I mentioned, I did this interview last week and this guy mentioned 401k. Another idea that he had was he. He didn’t want to do any index fund investing at all because he felt he had much more control in real estate, much more control over his ultimate returns than he ever would with investing passively in an index fund.

[00:38:37] Patrick Donley: Can you share some of your thoughts about that? 

[00:38:40] Scott Trench: I think that’s a great question. So I approach personal funds. I think there are two conflicting, but simultaneously true philosophies about building wealth. One is that you need a formula to get to financial freedom. And the other is that you need to seize opportunity when it.

[00:38:55] Scott Trench: And those are at odds, right? We’ll discuss this with couples, for example, and one individual and a couple will be like, no, we need to put all the money in cash and throw it into the business. And the other will be like, we need to be investing in the 401k in the stock market. And I think they’re both right.

[00:39:08] Scott Trench: And I think that’s what, how I’ve approached my personal financial situation is there’s the foundation and the consistent formula that moves me towards financial freedom, where every month I’m putting more into index funds, I’m putting more into savings that are going into the next rental property, and I’m constantly playing that formula that I know has a good high probability, has a very high probability of getting me to my end state.

[00:39:31] Scott Trench: over the next couple of years. And there are opportunities that you need to seize in life and go after with your time and resources, right? Like the jumping ship from my corporate job to bigger pockets, for example, like a real estate opportunity that comes up in life. That’s an all in bet for that very first one, like my first duplex was.

[00:39:49] Scott Trench: So I think that I completely agree with him. However, for me, I need both. I need to feel like I’m, I have a formulaic approach that will get me there no matter what. And that I’m taking a couple of quality shots that can move me towards my goal. When I was early in my journey, we didn’t talk about this. Every quarter, every 90 days, I was trying to take a new shot, if you will.

[00:40:08] Scott Trench: There was a house hack. I tried to start a winter gloves business for an e-commerce business. I thought about winter tire rentals as a theme. None of them worked. I drove for Uber. I was a tutor, right? And wanted to get into that so I could start a tutoring company for that. So none of those things worked, but they didn’t require large amounts of dollars for me to test out from an ideation standpoint.

[00:40:29] Scott Trench: So I agree with what he’s saying and feel that there’s a formula that many people, myself, as part of that need. 

[00:40:36] Patrick Donley: Yeah, that makes sense. Is there anything outside of real estate and index funds that you also are investing in? 

[00:40:43] Scott Trench: My biggest investment is BiggerPockets, the company I lead. So I invest significantly in it and am a big participant and feel very strongly about its success as a company.

[00:40:52] Scott Trench: So that’s a huge position in my portfolio where most of, I would say, the risk is one private company, right? That I feel really passionately and strongly about. And then on top of that, I also invest in hard money notes. So as a rental property investor, some people, a hard money note is when someone is going to fix and flip a property.

[00:41:09] Scott Trench: They will. borrow a high at a high interest rate, usually 10 to 14 percent interest, depending on how much cash they put into the deal. And then they will fix up the property. They’ll do, they’ll complete the project as fast or, they’ll either build or fix and flip or do a major remodel or somehow otherwise stabilize and transform the asset.

[00:41:27] Scott Trench: And then at that point they’ll sell after they fixed the transfer on the asset, they’ll sell it or refinance it and pay back the loan. So these are short term loans, six months to two years. typical time horizon, high interest rate. And I like them because I feel like, Hey, if I’m going to lend to somebody, let’s say they’re doing a 400, 000 fix and flip, or they’re buying a property for 400 grand, going to put a hundred into it and fix and flip it.

[00:41:50] Scott Trench: If I can lend on that and the worst case scenario plays out, I can foreclose and finish the deal myself, place a tenant. And now I own a property for 20 to 30 percent off, if you will, from the purchase price. So I like that a lot. And that produces a lot of simple interest yield, which is very freeing.

[00:42:07] Scott Trench: So I have a couple of those notes and plan to continue to expand that position. 

[00:42:12] Patrick Donley: Now, are these like towards friends that are in the business or people that you’ve just met through your bigger pockets contacts or where’s your network come or how do you do the underwriting for these loans? 

[00:42:22] Scott Trench: So there’s an industry called hard money lending and hard money lenders typically have funds.

[00:42:28] Scott Trench: So they’ll borrow from an institution 30, or raise capital from investors like myself, and they’ll raise 30, 40 million, maybe have a line of credit with a bank for another 10 million. And then they will lend out those funds to various borrowers. So if you have a 50 million fund and you’re lending out 500, 000 hard money notes, that’s 100 loans.

[00:42:47] Scott Trench: If you want to do more than 100 loans, You have to sell some of those loans or let them mature. And so they often, the hard money lenders, because they originally get points, they make one or 2 percent profit each time they originate a note. They’re very anxious to do as much volume as possible. So you have to be careful because you want to make sure you’re not buying the notes that they don’t want.

[00:43:06] Scott Trench: on their balance sheet at that point. And you have to do your due diligence, but I like doing that because hard money lenders that have an established reputation and a portfolio of loans typically have a process for doing due diligence. They’ll send me 1099s to handle all of the payments and those types of things and give me rights to foreclose directly if I don’t like working with them.

[00:43:24] Scott Trench: And so I shop with hard money lenders available through the BiggerPockets platform. 

[00:43:29] Patrick Donley: Nice. You’ve got a pretty diversified portfolio with all this stuff that you’ve got going on. I wanted to hear a little bit more about your CEO of BiggerPockets. I wanted to hear what your average day is like running the company, managing your own portfolio.

[00:43:41] Patrick Donley: You’ve got a young kid right now. How do you manage all that? And what are your days looking like lately? 

[00:43:46] Scott Trench: Yeah, so I’m a big planner and goal setter. My wife and I sit down once a quarter and go through our vision. We update it and tweak it. Doesn’t move quite as much anymore, but it used to move a lot.

[00:43:56] Scott Trench: We think we want this, we think we want this. We have settled in that provides a lot of clarity for those. I then have a set of goals that I want to do for the year and a set of goals that I want to do for each year. quarter. I translate that into a weekly planning session on Sunday evenings with my wife, where I say, here are the big three areas that I want to move forward.

[00:44:12] Scott Trench: And here are the things that I want to do this week to get those things done. There’s a whirlwind that goes on at work every week that can throw you, blow you completely off course. But this simple ritual of just setting once a week, getting back on track has been very powerful for me because most weeks I’m able to get most of the things that I set as the priorities.

[00:44:30] Scott Trench: done, or at least advanced. Sometimes it’s literally this one email. Got to send this email to this person to begin this series of events cascading. I get that done on Sunday nights and that helps. So what does my day to day look like from there? Mondays, I usually leave free to focus on the big quarterly priorities.

[00:44:45] Scott Trench: that is coming up in that particular quarter. Tuesdays are when I typically record podcasts and create content. Wednesdays, I typically do my one on ones. Thursday is a catch all for things like internal operating reviews, board meetings, or whatever else that I got to do as a CEO. I have a lot of 30 minute calls with various folks, whether they’re sponsors or new potential partners or customers or whatever.

[00:45:05] Scott Trench: I try to meet a customer once a week for coffee and just Hey, what’s your real estate journey? How are we doing? What do you like? What do you don’t like? Give me the goods on Vicar Pockets. I like to do that over coffee and beer. I find that you get really good information after three beers with a lot of people.

[00:45:17] Scott Trench: And then Friday I have a one on one with my boss, our chairman and operating partner, and we have more kinds of catch all time. I also get a lot of content done. So that’s my typical week now. But in Q2, that will completely change because I like to reset my calendar every quarter to make sure I’m focusing on the most important stuff.

[00:45:34] Patrick Donley: I wanted to hear about the transition when Josh and Brandon left BiggerPockets. What was that like for you taking over and filling their shoes rather? 

[00:45:42] Scott Trench: Yeah it was interesting when Josh stepped away in late 2017, and I was, by the other people in the company, I was actually elected as acting CEO at that point.

[00:45:53] Scott Trench: That was a really interesting dynamic because Josh had to step away for personal reasons. We didn’t really have a formal succession plan. I didn’t have the ability to fire, promote, and change compensation for these folks. But for a period of months, we operated the business and we’re able to drive things forward.

[00:46:08] Patrick Donley: And it was a democratic election in a sense, like everybody had bigger pockets, had a vote on who should run the company? 

[00:46:14] Scott Trench: Among the small leadership team at that point. So it was not a company wide election, if you will. But that was interesting. And a few months later, Josh named me president and I had those powers officially.

[00:46:25] Scott Trench: I reorganized the business at that point in time and some folks didn’t like that reorganization, but I was like, Hey, if I’m going to be running things, I’m going to make sure I know what everyone does. And I know why that function exists. And I couldn’t have said that for five or six different roles.

[00:46:38] Scott Trench: And so some of those people love the new role and thrived in the new position. And some said, Nope, I’m out. And we actually called that the bigger apocalypse at the time. That was very challenging for me. Because there was some turnover because people didn’t like the changes I was making in this first couple of months.

[00:46:52] Scott Trench: 2018 ended up being a fantastic year for us and we recapitalized with a private equity group out of Omaha, Nebraska called McCarthy Capital. And they brought in a chairman of the board who was my boss and he was a mentor. tough, coach. Hey, here’s what world class looks like. And you’re not it right now with these things in a, he would never, he never said it like that, but I knew I was like, Oh boy, I’ve only had my experience.

[00:47:15] Scott Trench: I haven’t had the experience of working with 20 other CEOs and 50 different chief financial officers, whatever. And so over the next five years we developed a strategy. For BiggerPockets, we understood our market much more clearly. We put together a leadership team . I learned what good and bad looks like from various leadership team positions.

[00:47:35] Scott Trench: And I went through the pain involved in reorganizing the business and putting those roles together. And we grew the company over that period of time as well. Today, we are thriving. We’re as strong as ever as a company and have a ton of different hosts, talent. Authors representing a variety of different viewpoints.

[00:47:52] Scott Trench: And I think we’ve really shown that, but I think the beauty of BiggerPockets is it’s not about my views on real estate, right? 10 of our other hosts will disagree violently with what I just said about the markets and all those kinds of things. It’s the community and crowdsourced feedback of people who try their best, think they know what they’re doing and disagree and debate each other and know that they’re probably going to be wrong on a variety of different things and that there’s always new strategies popping up.

[00:48:14] Patrick Donley: Yeah, the community is huge. That was such an important part for me in my learning early on when I had a pro membership and just being able to bounce ideas off of people. It’s just invaluable. 

[00:48:23] Scott Trench: Absolutely. I think that’s the power of it is it’s not one man’s secret sauce to real estate investing because there’s no such thing.

[00:48:28] Scott Trench: It’s the crowdsourced wisdom of the community and the new tactics that are constantly popping up to make money. 

[00:48:34] Patrick Donley: Before we wrap up, I want to do a quick fire round if we can. So I wanted to hear what your most controversial or a contrarian take on real estate is. 

[00:48:42] Scott Trench: I think it’s the risk of a 30. plus percent additional cratering in multifamily asset values in 2024.

[00:48:51] Scott Trench: Large apartment complexes, I think, are one of the most at risk asset classes in this country right now. 

[00:48:57] Patrick Donley: What are you currently reading? I see a bunch of books behind you. I wanted to hear what you’re currently reading. 

[00:49:01] Scott Trench: I’m currently reading Number Go Up about the crypto boom and bust.

[00:49:07] Patrick Donley: And what’s your takeaway so far?

[00:49:08] Patrick Donley: Is it Bitcoin specific or is it just the whole arena of crypto?

[00:49:13] Scott Trench: I was not a fan of crypto. I’ve tried to read both sides of the argument. I think that the side that is most rational to me for crypto fans is the one espoused by Saifedean Amus from the Bitcoin standard, of which there are Bitcoin maximalists.

[00:49:30] Scott Trench: If you’re going to bet on crypto, to me, it makes sense that Bitcoin specifically would be the winner. That would be your, hard currency that would potentially replace fiat currency long term. All of the other cryptos have never made sense to me. This book confirms, I think, that skepticism and I think exposes the wild west of just how many scams and absurdities were going on just a few years ago in that space.

[00:49:55] Patrick Donley: Yeah, that was a game changer for me too, reading the Bitcoin Standard by Saifedean. I had a bunch of different, quote unquote, 

[00:50:02] Patrick Donley: crypto speculations. 

[00:50:05] Patrick Donley: And after reading that, I stuck strictly to Bitcoin. It’s there’s gonna be a winner take all, and there might be some use cases for a couple others, but in general, there’s gonna be a winner take all, and it’s pretty clear, 

[00:50:14] Scott Trench: I think, what that winner will be.

[00:50:17] Scott Trench: Yeah, the main thesis, and I haven’t finished the book, so we’ll see how it ends. I probably should know this, but it is about how a lot of these coins claim to be stable coins and were backed by US dollars, but then they weren’t actually backed by US dollars. So when something that’s supposed to be worth a dollar is worth even 98 cents, the whole thing collapses.

[00:50:34] Scott Trench: Because why would you be the last two people out of 100 to leave your money in it and not get your money back? 

[00:50:40] Patrick Donley: Yeah, the unfortunate thing I think is like there’s so much of the crypto stuff that’s conflated with Bitcoin that that’s a whole nother topic and a whole nother rabbit hole. 

[00:50:50] Scott Trench: The reason I don’t invest in Bitcoin, even if I think that the Bitcoin maximalist approach is the most reasonable take on crypto overall, is because at the end of the day, crypto or Bitcoin would be a currency.

[00:51:02] Scott Trench: What would I use the currency to purchase? I’d use the currency to purchase things that I want for my lifestyle or assets that produce income and are likely to appreciate in real value like real estate. So I’m just like, I can invest in Bitcoin or I can purchase rental properties. And which one is the better bet long term, we’ll see, there’s a case where Bitcoin takes over the entire world economy and becomes worth, the value of all of the cash in the world.

[00:51:26] Scott Trench: And what goes up soaring in value. But even at that end state, I would then use Bitcoin to purchase rental properties and receive payments in what, Satoshi’s or whatever. So I, I think that’s, that ends up being my, how I’ve rationalized this whole world of crypto into, yeah, I’m just going to stay out of it because the goal is to have the cash flowing properties at the end anyways.

[00:51:43] Patrick Donley: There’s an argument that’s made that there’s a lot of monetary premium that’s in real estate that Bitcoin will have, who knows what percent But it will suck some of that monetary premium up. But yeah, it’s hard to know like time will tell for sure But I don’t know we all have to make our bets and it’s a risk no matter what you do But they’re like you said there is no right answer for everybody Scott, this was a lot of fun.

[00:52:06] Patrick Donley: I really appreciate your time. Do you have another book in you? Is there anything coming out that we can look forward to? 

[00:52:12] Scott Trench: I’m not personally working on a book right now. My kind of passion project, if you will, is something for bigger pockets. We’re called passive pockets. So because so many of these, because we’re seeing this pain in the commercial real estate space, and a lot of folks have put together syndications in this space to raise capital.

[00:52:28] Scott Trench: I think a lot of investors didn’t really know what Folks charge for fees or what they are, what the business models look like or how to underwrite them or the risks inherent in the commercial real estate world. And so we want to really put together a product to educate folks on how to think about those passive investments.

[00:52:42] Scott Trench: We really focused on the single family, small multi family duplexes that people personally own and operate and not as much on these larger funds and passive investments. That’s what we’re working on. I don’t know if a book will come out of it, but it will certainly have a lot of content. 

[00:52:54] Patrick Donley: Passive pockets.

[00:52:55] Patrick Donley: Cool. I’ll have to check that out. So for the people that want to find out more about you, find out more about BiggerPockets, just what you guys are up to, what’s the best way for them to do that? 

[00:53:04] Scott Trench: You can just find me on BiggerPockets post in the forums and tag me. You just type in the at symbol and Scott Trench and I’ll come up.

[00:53:10] Scott Trench: You can ask a question there and I’m happy to respond and engage all day. 

[00:53:14] Patrick Donley: Cool. Scott, thanks so much. I really appreciate your time. This has been fun. 

[00:53:17] Scott Trench: Thank you, Patrick. This is great.

[00:53:19] Patrick Donley: Okay, folks, that’s all I had for today’s episode, I hope you enjoyed the show and I’ll see you back here real soon.

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