Agent vs Lender

Investment Realty and Property Management

September 24, 2020 Ron Pippin
Agent vs Lender
Investment Realty and Property Management
Chapters
Agent vs Lender
Investment Realty and Property Management
Sep 24, 2020
Ron Pippin

Alicia Polevoi Davis and Jessalyn Dixon share their extensive knowledge in investment realty and property management. They give us insight into 1031 exchanges, property management, syndication, and how they have seen the Utah market drastically changing. The knowledge of these two women is amazing. It has been a great pleasure having these fantastic realtors on the podcast. 

If you love our content leave us a review! If you would like to see more podcast content and highlight reels from our episode you can follow us on Facebook or Instagram @agentvslenderpodcast 

Show Notes Transcript

Alicia Polevoi Davis and Jessalyn Dixon share their extensive knowledge in investment realty and property management. They give us insight into 1031 exchanges, property management, syndication, and how they have seen the Utah market drastically changing. The knowledge of these two women is amazing. It has been a great pleasure having these fantastic realtors on the podcast. 

If you love our content leave us a review! If you would like to see more podcast content and highlight reels from our episode you can follow us on Facebook or Instagram @agentvslenderpodcast 

Ron Pippin :

Welcome to another episode of Agent Vs Lender. Today we have two agents from real estate agents, one from Salt Lake County and one from Davis county. We have Alicia Polevoi Davis and we have Jessie Dixon. Welcome to the podcast, both of you.

Alicia Polevoi Davis :

Thank you, Ron, thank you so much.

Ron Pippin :

So I'm going to let you just do a real brief introduction so that people can get to know who you are and why they should listen to you. So let's see, who do you want to start? Should we start with Alicia?

Alicia Polevoi Davis :

Absolutely, I'm happy to start. I've been in real estate since 2005, as an agent, and I started out in residential real estate, I quickly started working with investors. And that moved into some real estate developing and then commercial. And so my business has evolved a lot into helping out where there's really a hole in the market in Utah, small business owners that can't get the big guys to answer their calls. Because they're small, they're a small check. And so we've really moved into that. And we like working with the small business owners because we do a lot of real estate syndication. And we can talk about that later if you'd like. But the people that are interested in real estate syndication often are and busy running their own businesses that want to still be investing in real estate. And so it's sort of a perfect marriage.

Ron Pippin :

Awesome. Jessie, let's hear about you.

Jessalyn Dixon :

Perfect. I've been in business since 2015. So a little bit less, but I do a lot of residential purchasing and selling as well as property management, residential and commercial. And then I do a lot in Davis in Weber county right there on the border. So we're right next to the base. So it really helps out a lot of my clients that end up purchasing homes and live in it for two years and don't quite want to sell it. Yeah. So

Ron Pippin :

Alicia you had mentioned investing in syndication. And I do want to get to that. So give us a little brief intro about the 1031 exchange before you get to the syndication. So tell us a little bit about brief about what what a 1031 exchange is.

Alicia Polevoi Davis :

So a 1031 exchange is selling like kind real estate. And really, that can be so broad as just income producing real estate. or non but I mean, you could you could exchange land, that you're that you don't have income coming in on yet. But it allows you to defer the taxes and you can defer them until you die and continue to get into bigger and bigger Real Estate projects. And that's the basic use of a 1031.

Ron Pippin :

But on a 1031 exchange Do you have to, dont you have to buy another property? So if you sell one property, you have to buy another property within a certain amount of time?

Alicia Polevoi Davis :

You do so you have 45 days to identify a new property can identify up to three, and you could buy more than one. And then you have 180 days to actually spend that money and purchase. If you're doing new construction, some development you have to spend the money on materials or labor within that 180 days.

Jessalyn Dixon :

One of the issues I run into a lot with my clients is knowing when to use the 1031 exchange. So correct me if I'm wrong, but I believe it's you can do a 1031 exchange with just about any property that's not your primary residence, is that correct?

Alicia Polevoi Davis :

Right, unless you have converted your primary residence into an investment property.

Jessalyn Dixon :

Yeah, so we can do like the raw land for a rental home or something like that. But you can't do a 1031 exchange on your property that you're living in.

Alicia Polevoi Davis :

Yeah, and you really wouldn't want to because with our current tax code, I'm not an accountant. I know that you're not either. And so we don't want people to look at this as tax advice. But you do have an exemption for the gain in your personal home. And so it doesn't make sense to do a 1031 in a situation like that, really.

Jessalyn Dixon :

So there's a two out of five rules. So you have to live in the home for two out of the last five years when you're selling it. So if somebody had lived in it, like five or six years ago, and they lived in it for those two years, then that converts that property into an investment property if it's been over the five years, correct.

Alicia Polevoi Davis :

Yeah, yeah. Then it would need to be exchange or use you pay taxes on the game.

Jessalyn Dixon :

Yeah. And those are capital gains taxes, right?

Alicia Polevoi Davis :

Yeah. Yeah. And there is something right now that is a nice tax vehicle, which is opportunity's own properties. But if you have a gain on anything, I mean, you could sell an art collection. So it's not something that would be eligible necessarily for 1031. Or I guess you could anything that'd be eligible for a 1031 or beyond that, if you sold a business or had capital gains for any reason, you could put into an opportunity zone fund. And then the fund can purchase in an opportunity zone. There are a lot of rules around that. And that's probably the discussion for today. But it does allow you to keep your money in there, you have to still pay capital gains on the money you put in, but you have five years to do it, and you get a 5% discount, or I should say, you have to tell 2026 to do it, and, and then you get a 5% discount on those gains. And then when you're done with the opportunity's own property in 10 years, then you have no capital gains on the new gain. And so that's kind of a cool thing that you could do right now, it has to be put into the, into the fund before December 31 of this year. But that's another way that you could avoid capital gains, and that one doesn't require you to die first, with a 1031, you're just putting off those gains until you die. And then you've got to deal while your heirs have to deal with the IRS.

Ron Pippin :

Okay, so I know that people, if there are people that are listening to this, and they're getting a little lost in that 1031 exchange, call these guys because these these guys know know what a 1031 exchange. So tell me what, without getting, you know, too detailed, what is the benefits? And why would somebody want to do a 1031 exchange.

Alicia Polevoi Davis :

So it allows you to get out of one investment property and really get into a bigger investment property without having to lose a lot of the equity that you earned in the first property to taxes instead allows you to invest into the next larger property. And if you have debt, you still have to have bigger debt, or you can have some tax consequences. But it still wouldn't disqualify you from the 1031. But it would require you to pay some, some taxes on what's called boot. And once again, we're not trying to get too far into the weeds, Ron. So I apologize, with all these terms that I'm throwing out, but if you're doing a 1031, you have to have a license exchanger help you with the 1031. And so they make sure that you're covering all your bases, along with your your real estate professional, you know, they're they're also there to hold your hand, but they work in conjunction with an exchanger to make sure that everything is done legally and make sure your bases are covered.

Jessalyn Dixon :

I think the biggest goal with the 1031 exchange is to help you grow your investment without costing you a lot in taxes.

Ron Pippin :

Okay. Yeah. Right. Okay. So when you sell an investment property, or even a house, for that matter, there are taxes that could be accrued when you sell a property, and just as both of you mentioned earlier, when you sell your personal property, as long as you've been in it for, I don't know, something like two or three?

Jessalyn Dixon :

Two years out of the last five years.

Alicia Polevoi Davis :

then you have an exemption and you don't have to pay taxes on. You know, if you bought it for 200 and sold it for 300. You don't have to pay taxes on that hundred thousand dollar gain, because,

Jessalyn Dixon :

Well you still have to pay taxes, just not capital gain taxes.

Ron Pippin :

Oh, okay. All right. Fair enough. Okay, good to know.

Alicia Polevoi Davis :

So actually important thing there too Ron. Once again, if you're doing a sale, make sure you keep your settlement statements and you talk about your situation with your tax advisor, because if it's less than two years, and you had to move under circumcircle, certain circumstances, you may still qualify for some tax exemption. And, and and there are limits to the tax exemption, if you've made a million dollars on your personal residence. You can pay some capital gains because there's only a 200,000 exemption for a single person. 400 for artists 200 per each. So 400 total if you're a married couple and and I don't actually know now that I said that if you and if you and your wife and your mother bought a house and you all live there, maybe all three of you can get that 200 exemption and maybe you have a 600 exemption? I don't know that answer that would be you know, go talk to your tax professional, professional 100 per each.

Jessalyn Dixon :

I've had a lot of of my VA clients when they get deployed and things like that they do get the tax exemption if they haven't been in it for two years. But in this current market, I've had a lot of people that have purchased homes a year or six months ago. And they're turning around and selling them for a profit. And so in that scenario, you're definitely needing to talk to an expert to see how much you're paying, because it is a sliding scale based on what you make. So you need to go to somebody that has a full picture of your real situation.

Ron Pippin :

Right. So when we're talking about any type of capital gains or any types of taxes, none of us here are experts in that. These two, Alicia and Jessie are both experts in the 1031 exchange on the real estate side. So it but please talk to your accountant because this gets really complex, depending on how many properties you've owned, and how long you've been there. So talk to your account. So we're not here like on that. So that's our, that's our legal stuff. So

Jessalyn Dixon :

I like to tell my clients, I know a lot of really general things. And I can help you point you in the right direction and give you good information on what questions to ask, but I'm not here to answer those.

Alicia Polevoi Davis :

That's a good point, knowing the right questions to ask is a lot of the value that we bring as real estate professionals. I mean, you don't know what you don't know. And so if you have generally heard, oh, you have to live in your primary residence for two years to have the tax exemption. And then you don't ask your accountant, those qualifying questions of well, shoo, you know, I ended up getting married and we blended a family and have now have 10 children, we don't fit in this house, that could be a qualifier for allowing you to still write off or still have an exemption to capital gains tax for your previous primary residence.

Ron Pippin :

Perfect. So if you are a real estate agent and are interested in I, and I'm not going to point you to somebody, but I got imagine that Jessie, and Alicia would be happy to talk to you. But you're not something that you probably ought to have having you're having your, you know, one one more arrow in your quiver, just like, as a lender, I have lots of different types of loan products. And you know, and there are a few of them, some of them that almost never pull out. But it's still something that you should probably be aware of, if you're in the business.

Alicia Polevoi Davis :

Yeah, absolutely. And, and just talking about some of the reasons that you might want to use a 1031. My favorite reason to use a 1031 is, like I had mentioned before, I started working with a lot of investors early in my real estate career. And they, they would buy a few single family homes or duplex or fourplex. And after a while becoming or being a landlord wasn't fun, it took a lot of time away from their personal time to blow a time away from their, their work time. And even if they had a property manager, there's still some involvement that they, they didn't always appreciate it. And everybody has to decide if that's the right thing for their lifestyle, because some people love it, you know, it's not a problem at all. And that's just what they want to do. But that's where I sort of got into syndication is I had investors that were tired of having properties to manage, and they wanted to still have the benefits of owning real estate, because you get to depreciate real property. I mean, that's an awesome thing with real estate ownership with on the investing side is it can really offset your other income when it comes to the taxes. So and in addition to that real estate allows you to, to earn or to use leverage, if you go and buy $1 stock, you have $1 stock. But with real estate, you can buy, you know, $400,000 for 100,000, you know, and get alone as, as you guys well know. So sheets, it appreciates, and your game isn't just the income, it's income producing. But it's also that appreciation and offsetting your taxes with the depreciation can raise your income without doing anything just by having an extra write off, right. So there's, there's a lot of cool things about owning real estate, even if you don't want to have to manage it. And so one, you can get a property manager and still have a little bit of involvement. Or you can attend 31 into a syndication where previously a lot of people thought we can't turn 31 into a syndication because that's an LLC, and you can't turn 31 into essentially a security. So you can use what's called a tenant in common agreement that marries the LLC with the real property and allows you to do an exchange, you just want to make sure that your tenant in common agreement, which is also referred to as a tech has the same terms as your operating memorandum that your LLC has. And so just a very cool thing that allows you to 1031 into a property that you can still get the depreciation on but you may be a limited partner, and let the general partners manage that. And it is just sort of a great vehicle to be able to still be in in real estate investing. And you can also just invest straight, you know, funds, and you can self directed 401k or, or an IRA account also into a syndication. So it's just sort of a lot of ways to be able to be invested in real estate without having to be actively involved.

Jessalyn Dixon :

So you covered a lot of information there. Haha talking about, they're taking a property and transitioning it into the LLC, and there's different ways to kind of combine that with the benefit of doing that does it they get to come a little bit hands off from now. Managing the property. But what does that do to the actual property?

Alicia Polevoi Davis :

So let's just say that you had a duplex, and you were tired of being an investor. And you are not an investor, excuse me, a landlord. And you also wanted the benefits of owning an apartment complex, which doesn't have to be an apartment complex. I know those are two somewhere, you could be in self storage or retail space. But let's just say, an apartment complex, one of the benefits of going from being investing in a duplex versus 100 unit apartment complex be if you've got two vacancies and your hundred unit apartment complex, as a part owner of the apartment complex, you don't feel that, like you would if both of your units and your duplex were vacant. And so right there, that's just a great big benefit to being in a bigger property. But maybe you don't have the ability to finance that property, or even put the full down payment down. And it was more typically

Jessalyn Dixon :

Coming in with business partners, is that what you're talking about? Exactly. So the duplex, and you find business partners to go purchase the complex. And I definitely always support the bigger units. Because I mean, if you got 10 single family homes, you have like 10 roofs to take care of. You have an apartment complex, you only have one roof, and other things like that, like it really condenses the workload as well as the risk like you're saying,

Alicia Polevoi Davis :

And Jesse, the property management is more affordable, right? It's more efficient, so it's more affordable.

Jessalyn Dixon :

Yeah, when I'm working on 10, single family homes, it's a completely different situation. And I'm looking at a multi unit property like a condo or townhomes or something like that. So it's it's more time intensive on the single family homes than it is because you got to go worry about stuff like yards, and then every individual group, but you know, but the condos, I got one maintenance company that's coming out and doing the arts. And it's easy, right?

Ron Pippin :

Yeah. So you had mentioned Alicia, something about getting a property management company to manage some of those things. So sorry, I'm moving away from that. That 1031 exchange in syndication, so syndication, so before I leave it, syndication is just being able to invest in properties, without actually owning it by yourself, you're going in with a group of people and saying, hey, let's go buy, whether it's single family homes, or big apartment complexes, and there's in Do you have those investment groups already in place, and they can buy into those, or they can form one, but that's just a, that's basically what you're saying, right?

Alicia Polevoi Davis :

It allows you to pull your experience, your cash, and even your credit worthiness, you can bring somebody in that maybe isn't bringing any money in, but they're signing on the note and they have the assets to sign on, and maybe a 3 million 10 million $20 million transaction. Or maybe there might be a group of them needed to, to sign to make it, it worked. But if you've, you know, are making $100,000 a year, and you have a couple of rental properties, you probably don't have the credit worthiness to sign on a 50 unit or 100 unit apartment complex.

Ron Pippin :

Okay. So we you had mentioned property management, and that it's an important aspect, because I've had rentals in the past, and I didn't have a property manager and I don't have any more rentals. How I had a property manager, that may be a different story. And it was only because one, I probably didn't vet the people very well. And two, it was just a pain. It was just I was always doing something. And I know Jessie was mentioning that she is gotten into property management. So tell us a little bit about why property managers, I kind of just part of the reason

Jessalyn Dixon :

Why landlords hire property managers. Yeah.

Ron Pippin :

So why would a landlord hire a property manager? If you're an investor? Why would you hire a property manager not do it yourself?

Jessalyn Dixon :

Well, there's a few different scenarios. So on my commercial property, this is really common with commercial properties is, so he owns the whole building, and he uses part of the building for his own business. So he wants this removal from his tenants in there, right? He knows that if He's the owner, and somebody in the building has an issue, they know where to find it. And he doesn't really like this because he's like, I'm running a business here. I don't have time to hear that somebody parked in your parking spot. You know, so it gives this removal and a little bit of anonymity. For him, so I come in and I handle the problems and the complaints, and you know, people not paying rent. And I handle that. And I'm the face of that, rather than, you know, him having to walk upstairs and tell them, they're not paying rent, and they know where to find them. So it gives them a lot of anonymity that way, for that particular situation. And then also, like he said, you know, with time, it takes a lot of time to manage properties to fill the places, whether it's residential, or commercial, it takes a lot of time to fill it. And then there's a lot of follow up, you know, you're following up every month, making sure that they're not having problems when there are problems you're handling. And then also collecting rent, and the collecting rent on the residential is a little bit bigger than it is on the commercial side of things. Commercial, it's not quite, there's a little, little less issue with that. But on residential, you definitely have to stay on top of that, sometimes, we do really shoot for good, good qualified people, which helps a lot qualify is a really big deal. But it's nice as a property manager, right? I go in and I say, here's the bar. And this is a company standard bar, and a bar that the landlord signed off on. And as a landlord, I think, at least in my personal properties, I always get this sad story, and I want to help them. And I found that more often than not, that doesn't go well for you as the landlord. So when you're just like, as the property manager, right, I'm like, well, this is what the landlord says, and it's his property. And I have to do this. So I think there's less of a temptation to go outside of your set box, as property manager and as a landlord. So

Alicia Polevoi Davis :

And Jesse with the property management, do you also keep track of expenses of repairs and things that sort of helped the landlord out at the end of the year to help them get through the painful tax?

Jessalyn Dixon :

Absolutely. So there's a lot of basically that bookkeeping side of things that, you know, they fill out a tax form with me when they sign up. And then at the end of the year, they just get like a report. So there's probably hours and hours of work in there that they don't have to do. And we keep track of all the expenses and stuff like that as well. And it's all documented really, really well. So if you go in and put, you know, if a water line breaks, and we got to go in there and fix it, we have itemized lists of what it costs and things like that. And those are rights write offs for the landlord. So you know, you get a write off having to pay that hundred bucks out or something like that, as well.

Alicia Polevoi Davis :

And, you know, Jesse, when we're looking at apartment complexes, and retail space and self storage, we like to bring a property manager with us during the due diligence, when we're just analyzing it. Do you ever ask for

Ron Pippin :

Ask that question right there, because I know that that these, these two topics probably go hand in hand,

Alicia Polevoi Davis :

They really do.

Jessalyn Dixon :

Mm hmm. And I'm sure as your experience with walking through homes and other types of properties, we just see a lot of problems. And so we're used to kind of looking out for those issues, and you get kind of trained for it. This is gonna be a problem, and this is gonna be a problem. And we really need to ask about this, you know, and that's our experience is a huge part of our value. I think,

Ron Pippin :

You're seeing that you bring a property manager with you, right.

Alicia Polevoi Davis :

Now, and I'll answer that question, because that's what I was gonna say. I was, I guess I cut you off now. Sorry.

Ron Pippin :

No, I was done no. So

Alicia Polevoi Davis :

The other big piece of value that I love about bringing a property manager through with us is that we can say we're always looking to bring value and have a value add project. That's where we get higher returns, for our investors, and every property manager along and saying, Okay, if we come in here and put air conditioning and all these units, how much more rent Can I charge? If I have a parking space? How much more rent? Can I charge? Is it going to be beneficial for me to have enough for every unit to have two parking spaces? Or do you think that I can charge more if only a third of the units or two thirds of the units can have parking spaces if they pay this higher fee? Or if I bring in granite countertops in this area? Can I get more rents? Can you find some parts of the country especially when we're going outside of Utah, that they'll say, well, you can remodel this unit all you want, but the people can't raise the rent because they can't pay it.

Jessalyn Dixon :

You have to know what the income is of their area and what their capacity is.

Ron Pippin :

Yeah, I'm sure just like you said the area probably makes a big difference. If you're a little bit more affluent, they're going to pay for the nicer things and if they're not, they're just don't, it doesn't matter what you do. You're just not going to have the funds to They'll go Oh, yeah, I love this. But they can't pay any more.

Jessalyn Dixon :

Yeah. Doesn't matter how nice. You make it, nobody can afford it. Absolutely. And the incomes even through like Salt Lake, Weber, and Davis counties, those incomes fluctuate quite a bit. So you're changing pretty much from city to city.

Alicia Polevoi Davis :

Jesse, you talked about I don't know if it was on the caller before the call that you have a lot of clients that are military, right, they're around the Air Force Base. I heard that they just recently brought in, or they're bringing in some more tech jobs are going to raise the income levels around there. What's that going to do for the rental market around there? Do you think

Jessalyn Dixon :

It's already a little bit tricky to find rents, right now rentals. We're experiencing kind of the same situation with rentals as we're experiencing in the single family homes for sale, there's just, there's a lot more people out there looking for somewhere to live than we have available. So it is raising those rents. As far as landlords are concerned, they love love renting to military families, just because they there's a lot of reasons behind that. And then also, they brought in the tech jobs. And then we also received, I want to say about a year ago, a contract for one of the new planes the F-16. But one of the new contracts for them. So we have been seeing a huge, huge influx of people in this immediate area, that kind of Northern Davis, southern neighbor County. areas I think they were bringing in like, I want to say somewhere between 20 and 30,000 jobs. Wow, what we're experiencing in the real estate, as far as homes for sale is we have no inventory. I'm sure you're experiencing this in Salt Lake as well. Yeah, we know, we have a high number of people coming into the market for military and other companies that are making our supply that's already really, really low, go even lower. So the rents are going up pretty quickly. And the home prices I feel like are going up even quicker.

Alicia Polevoi Davis :

There's a demand because that's typically been more demand for affordable homes and first time homebuyers, do you think there's more of a demand coming? Or maybe it's already arrived for higher end homes in the areas or sort of a particular lack in that category?

Jessalyn Dixon :

I would say that demand for affordable is affordable housing is quite a bit higher than the luxury homes. Is that what you're asking?

Alicia Polevoi Davis :

Yeah, I'm just wondering what the higher paying jobs do you think there will be a hole for those higher end homes and you're still saying the demand is still for the lower?

Jessalyn Dixon :

Are you still a demand for higher end homes? So you know, our first time homebuyers are really looking at homes that are like 300,000, kind of in that ballpark right now. Which I've only been in the business for five years. And that's mind blowing to me

Ron Pippin :

It is what I've been in 25 years, but it's still crazy to buy a $300,000 home.

Jessalyn Dixon :

I'm selling townhomes I'm selling townhomes those nicer townhomes for 325 and 269. Right now, those are the two that I have under contract. So and those are just townhomes. You know we're looking at like 1500 square feet, three bedrooms, two and a half baths. And they're sitting right around that price range. And trying to get first time homebuyers into a $300,000. Home, you know, those go up on the market and 24 or 48 hours they have 10 offers. So as long as as long as it's in a semi decent condition. So that that's supply and demand, the prices are being driven by that supply and demand and more people coming in is only going to make that demand higher. So it'll be interesting to see what happens to our housing market in the next five years.

Ron Pippin :

I'm assuming you're seeing the same thing in the Salt Lake, Utah County area as well.

Alicia Polevoi Davis :

Yeah, and one of my investors that does a lot of land actually is also a builder. And he has a subdivision in Magna, that is townhomes and they do have two car garages in a private yard. But we're selling we started out at 300. We went to 325 and we just put one under contract at 385. It does have the basement finished. But those are condos or townhomes in Magna. It's a great product but still it's shocking.

Jessalyn Dixon :

I mean, they look fantastic. And so some of the information I've heard is, you know, because we were wedged up against the mountains, and we have the Salt Lake on the other side, we don't have land to like spread out, so the only place to go is up. So we'll be seeing and we've started to see a lot more buildings that are, you know, it's not a 30 acre Rambler anymore. We're doing townhomes and condos. You know, and even if it is a single family home, those those suckers are six feet apart with the tiny little yard.

Ron Pippin :

And apartment buildings too. So just, you know, we're talking about investing in, in the 1031 exchanges. And I've seen a lot of apartment buildings going up. So the multi unit, multi unit structures are just going up everywhere.

Jessalyn Dixon :

Yeah, when you're looking at investments, and I'm sure you dealt with this as well, especially with the 1030 ones, when you're looking at investments, as long as you're willing to do have a long term point of view, I don't ever see those investments being a bad situation, even if we see a dip or crash in the housing market, which were being driven by good reasons, not bad loans. So even if we see a dip or something, those situations will always recollect themselves. And if you look at the housing prices over a long period of time, like 30 years, traditionally, we see a gradual like two to 3% increase in price over that 30 years. So short term, things can happen long term, I don't really see issues long term.

Ron Pippin :

I know that some people have said to me that they think we're in a bubble, because because housing prices are going up a difference between today. And 2007. Is is really lending. lending, if you had a heartbeat back in 2007. If you could fog a mirror, you could get a loan. And that's just not the case. today. It's it's the simple economic, economic principle of supply and demand. This as you guys were saying they've got we've got lots of people coming in, we have lots more jobs coming in, people are coming to the state for various reasons why it's a great place to live. And they need housing. It's just driving the market up. So we don't we don't have the bubble that we've seen in the past. And I think you both have mentioned that in the past, there have been there have been steps. 2007 was a pretty good one. But it only took normally I in fact have a chart that shows that normally only takes a couple of years, one to two years, and you're back to where you were. And I think 2007 took four years. But now we're well above where we were in 2007. And so if somebody is, is contemplating not buying, because they think housing prices are going to go down, you're probably writing the wrong train. If If housing prices go down, the chances are interest rates are going to go up and you've just negated anything that you've saved, or any any any difference that you're going to gain, you're going to lose by waiting because water prices when their price is going to go down. I don't know how much farther are they going to go up before they come down. And then where interest rates kind of going to be. So I just I just think the market today with low interest rates. It's, there's just a great time to buy. And I know we always say that.

Jessalyn Dixon :

What do you see happening with the interest rates? Yeah, what's the ballpark of where they're at today?

Ron Pippin :

You know, when somebody asked me what's what's an interest rate, I always say what's kind of like calling a car dealership and asking how much is a car?

Jessalyn Dixon :

Well, so with the 1031 exchange, we'd be looking at investment properties, and they'd have a 20% down. And that would be

Ron Pippin :

Okay, so the reason why I say it's kind of like calling a car dealer and asking how much is a car, because there's lots of different factors. There's lots of different loans, and there's lots of different credit scores, and there's lots of different down payment requirements. So all these factors come into play. So you're in the twos on a 30 year fixed. Low, low twos, on a on a fixed credit. An investment property might be in the threes, but which is amazing. I know it's an investment property and the three main depending on depending on maybe creep into the fours I don't know, but still a three or 4% interest rate on investment property. That's just

Jessalyn Dixon :

That's insane. Insane.

Alicia Polevoi Davis :

Yeah, one thing I wanted to add about people that are speculating and all across the board, there's a lot of speculation about a bubble or when is the market going to come down because it is cyclic and it so it will come down is inevitable. How soon that sort of the gamble that you're playing, but like Jesse had had discussed, for the long term, it doesn't really matter. It doesn't matter when the bubble burst as long as you're in for the long term it you never can buy it a bad time, you can just sell at a bad time. Right?

Ron Pippin :

Right, exactly. Right.

Alicia Polevoi Davis :

Sort of unique about the Salt Lake Valley. And Utah in general, is that, right now our growth is in the tech space. And so we see a lot of speculation, especially around COVID, what's that going to do? And right when it first happened, we had a lot of investors just sell the TV on the sidelines saying, okay, when can we pick up some cheap space? What's happening, but what's expanding here is tech. And it doesn't have to be done at the office. But at the same time is their employees can stay home and the growth is continuing to happen. And they're continuing to grow. Who cares what the pandemic is doing, they can still afford their office space, they can hang on to that for when it comes back, because they're still generating in most cases, the same amount of income and sometimes even more. And, and there's just a lot of growth. Anyway, we were talking earlier, Jesse about what's happening in the tech space in your county. And it's just happening in Utah. And I think with some of the posturing waiting for the bubble to burst, we have a lot of companies in California that are coming to sell consults are leaving Silicon Valley, because it's cheaper to operate here in a downturn. And the cost of living is not as expensive for their employees so they can pay their employees less are the same. And they suddenly have a better quality of life. And so there's a lot of factors that are driving the economy in Utah, that is going to take, in my opinion, more than a couple of years to slow it down.

Jessalyn Dixon :

Yeah, we're being driven by economic growth and demand for housing. It's, I don't really see how that can backfire. I mean, things can always happen. But again, if you're looking at really over like five year term investment, you're pretty, I would say it's pretty say say you're okay, especially if you're looking at 10 years. Some of the best advice I was given when I was buying my first investment was time fixes all mistakes. Don't worry about what the numbers are right now time will fix it.

Ron Pippin :

So any final thoughts? Before we before we wrap up?

Alicia Polevoi Davis :

I just enjoy being on here today, Ron and meeting you Jesse. It's been a great time. Absolutely.

Jessalyn Dixon :

I hope we get to work together sometime. You're definitely knowledgeable with the 1031 exchange. That was that was really interesting. So thank you so much for having us.

Ron Pippin :

So So each of you. So let's start with Jesse. How can somebody reach you if they were wanting to reach out?

Jessalyn Dixon :

Um, so I do have a Facebook page, which has all of my information and it's just Jesse Dixon Realtor, so facebook.com backslash Jesse Dixon realtor. Or you can email me at [email protected] those are the best ways to get in contact with me.

Ron Pippin :

Alicia, how about you?

Alicia Polevoi Davis :

So my company website is overland advisors.com. And my team website is trappers dash team.com. And my phone number is 801-631-2306 or look me up on on Facebook and Instagram. I don't know how to get on there myself, but my assistant and keeps it going. So

Jessalyn Dixon :

I do have a website. I forgot about this Jessut.com.

Ron Pippin :

Sorry, say that again?

Jessalyn Dixon :

Yes. jessut.com. Awesome.

Ron Pippin :

Thanks so much. Both of you. I've I've actually learned quite a bit on this episode. So I appreciate the time you guys take and to to give us a piece of the impart some of the knowledge that you've have to help us all. If you want to reach me or Taylor or my team. You can reach us at 801-628-7667 and we'll see you next time on our next eight. Next episode of agent versus lender.