The Norris Group Real Estate Podcast

EP2 | Part 2:INVESTOR CLUB ROUNDUP SHOW with Kaaren Hall & Derek Harms #914

• The Norris Group, Craig Evans

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In this episode of the Investor Club Roundup, Joey Romero chats with Kaaren Hall of OCREIA and Derek Harms of NSDREI. They explore their clubs’ missions, meeting formats, and how they're helping investors navigate today’s shifting market. From self-directed IRAs and assisted living to local real estate trends in Orange County and San Diego, this episode offers valuable insights, strategies, and the power of community in real estate investing. 

For more information on this month’s featured clubs and speakers, please see below:

Orange County Real Estate Investors Association

North San Diego Real Estate Investors Association, Inc



In this episode:

  • Unique audience questions answered by industry experts Kaaren Hall and Derek Harms
  • Investor concerns about rising interest rates and housing affordability in today’s market
  • In-depth look at San Diego & Orange County's real estate market dynamics and regional trends
  • The importance of networking, mentorship, and community in investor success
  • How the recent stock market downturn is influencing real estate investment decisions
  • Why real estate remains a resilient alternative asset during economic uncertainty



The Norris Group originates and services loans in California and Florida under California DRE License 01219911, Florida Mortgage Lender License 1577, and NMLS License 1623669.  For more information on hard money lending, go www.thenorrisgroup.com and click the Hard Money tab.


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Narrator:

Welcome to The Norris Group real estate podcast, a show committed to bringing you insights from thought leaders shaping the real estate industry. In each episode, we'll dive into conversations with industry experts and local insiders, all aimed at helping you thrive in an ever-changing real estate market. continuing the legacy that Bruce Norris created, sharing valuable knowledge, and empowering you on your real estate journey. Whether you're a seasoned pro or a newcomer, this is your go-to source for insider tips, market trends and success strategies. Here's your host, Craig Evans.

Joey Romero:

Thanks for joining us again for part two of our Investor Club Roundup with our special guests, Kaaren Hall from OCREIA and Derek Harms, President of NSDREI. Hope you enjoy. So can I ask you guys question how different, and I'll whoever wants to answer this first. How different are the questions that people ask to the whole crowd than the ones that they say, 'Hey Derek, can I ask you a question? Hey Karen, can I ask you a question?' before they go home? How different are those questions? Because I'm thinking about when I'm trying to pull Bruce out of the meeting and everybody's like, 'Just one sec. Can I just ask you one sec?' So how different are those questions where, like, 'Hey,' you know, 'I'm asking a question in the crowd', or like, 'Hey, Derek, you know, can I ask you

Derek Harms:

Yeah, I see, I see what you're saying. Um, I think something?' that when guys like Bruce or similar speakers are at the club, it at least the way I tend to emcee the meeting is to try to answer as many of the larger questions that most of the people in the audience are going to have and want to leave the night knowing, whereas usually afterwards, we'll get a lot more of the specific scenario to this person's specific deal or situation or event or scenario in their life, that that type of a thing, and then maybe you can sidebar a little bit, but it's not efficient to to get into the weeds like that with individual scenarios, unless that it is something that we feel would represent the greater good. So that's usually what I see, is like a kind of, like a high level, down to granular thing.

Joey Romero:

Is that the same for you, Kaaren?

Kaaren Hall:

I mean, we're on Zoom, so people aren't like, a lot of times coming up and asking me questions, but like, where Derek is a real estate investor full time. I mean, it makes more sense to ask Derek about the market and then we just, we have time for the speakers after, we just let people get in touch with them and ask them directly. And then, of course, you know, my specialty is self directed IRA. So it's like, how can, you know,'how can I break this up and get this into a self directed IRA, and how can I get a piece of this deal that shouldn't be.'

Joey Romero:

So what's the biggest concern right now is, if we went to your meeting, what would be the biggest concern that investors have right now?

Kaaren Hall:

Interest rates, I would say, I think, obviously, you know, this is not news to either one of you. But of course, how many people are sitting on 2.75% mortgages with a ton of equity, and they don't want to, they don't want to sell their house, they don't want to let go of that inventory. So a lot of inventory is frozen. Because really, who would walk away with that away from that, turned it into a rental. And you don't, you don't walk away from something like that. And so, and then when you want to buy, like, there's a house I wanted to buy, and I ended up not pulling the trigger on it, and then rates went up, and so, so the price the house went up in price, and that the rates made, made the payment double. So I would have been walking into, you know, like, this one payment, the other payment was, double, and really more than I wanted to spend. So what happened between 2022 and 2024, '25 now is rates have made things less affordable, and housing prices like like Derek, you say, I mean Southern Cal, I mean, you know, OC isn't San Diego, but it's still a wonderful place and beautiful place to live. People really want to be here. So prices go up, so it becomes more and more out of reach.

Joey Romero:

So Derek, what's the biggest concern that down there is it? Is it affordability? Barrier entry? What is it?

Derek Harms:

So glad you said barrier to entry. We do get a lot of those concerns from folks. Is barrier to entry is difficult, right? The price points are high, and so that means what? You have to either be independently wealthy and have a stack of cash that you can put into some of these deals, or on the contrary and what I do, and what most people do, is they borrow money. So the borrowing money aspect is very important to San Diego investor Investors, because it's so critical and necessary, essentially, if you want to do any sort of volume, and I would also say ADUs are a big thing in San Diego right now. City of San Diego specifically has some of the most lenient ADU laws in the country, and it's actually made made news stories lately. City council has been getting into a little bit with potentially pulling back on some of the loopholes. And, you know, knock on wood, I was able to take take advantage of a couple of those, but we have bonus densities, which allow you to build super dense in neighborhoods that weren't originally designed for it. So, understandably, so neighbors are getting pissed off and so, but if, yeah, oh, for sure, yeah. So it's, that's been a big thing. We see a lot of concern about pricing in terms of, like contractors and underwriting, how to make deals work, concerned about the actual median price and what, where is this going in relation to interest rates, and are they related? Because, as Bruce will explain to everyone, and as he does so eloquently every year, rates and pricing aren't always necessarily correlated, right? They are often, but sometimes they're not. So it's, I would say that. And of course, the inventory, right? San Diego still has historically low inventory, and it's been a tough kind of pockety real estate market. If I can just sum up the San Diego County market is that it's very pockety, and some areas are moving really well. Some are not. Some asset types are moving better than others. And so you really, really have to know what you're doing right now if, if you want to make consistent profits.

Joey Romero:

I'll stay with you. Derek, who has been the most dynamic speaker that you've had in last 12 months. And I'll take it away from you guys. Notwithstanding, Bruce, like other than Bruce.

Derek Harms:

The most dynamic speaker. Let me think about that one for a second. Kaaren, you want to take this one and then I'll, give me a minute to think about if you had some really good ones.

Kaaren Hall:

Yeah, we have some really good ones. One of my favorites is a guy named Hans Box, and he's out of Texas. And what the reason I really liked his appearance in OCREIA is because he's super analytical, and he was talking about vetting deals, vetting real estate syndications, and breaking it down into the numbers. Because what I see in the self directed IRA space is people investing in syndications and not knowing how to vet the deal, not knowing how to vet a syndication deal, so that people came away from that with some real, solid knowledge about, you know, how to vet a syndication deal effectively. Now you you vetted on the outs, you know, at the beginning, and it doesn't really impact what's happening during the syndication, you've got to go back in and make sure that you've got the right to look at the financials and so forth. But I really love the way Hans broke it down and made it just so straightforward for everyone.

Derek Harms:

Nice. So after thinking about it now, so we've had a lot of really awesome speakers in the last 12 months. Of course, we had Bruce we've had some of the legends right, Pete Fortunato and Bill Cook and Aaron Mazzrillo, which was really good. He spoke at our holiday party, and he brought his two partners, and then got into Novations.

Joey Romero:

How candid was he?

Derek Harms:

Oh, very, very much so, you know, Aaron, he's wonderful stage presence, that's for sure. I would say, though, I really enjoyed speaking with the, who, the previous Chief Economist of Fannie Mae Doug Duncan, who I know the Norris group knows, knows really well. I prepared for that interview for at least a month before that, and I really enjoyed that process, because I was able to learn and understand a lot more about economics than I ever thought I could have by preparing for that interview and speaking with him was really interesting. And one thing that really resonates with me was I asked him, 'Will we ever see interest rates like we did in this previous low interest rate environment in your lifetime, Doug?' And he said, 'No'. So I thought that was an interesting takeaway, and I do want to give a, man, we had so many good speakers, but Chi Win also did a really good one on note investing. And what I loved about it was it was so granular and in the weeds and like bare knuckles, to where you could go and take what she talked about into the marketplace and go invest in notes like the next day. If you wanted to, you would obviously need to do some more diligence. But it was that packed with information, Jan Leasure, who spoke at Gary Johnston’s event the Masters of Real Estate, she was really a blessing to talk to just such a bright light and bubbly and smart and generous with her time and willing to talk to people afterwards, and that's really cool. And I'm kind of rambling here, but I really do appreciate all of our you know, Dean Rogers was here in March, and I don't know if you know Dean, but he is just a animal when it comes to his business model, and really was able to help provide some nuggets to people, as you can tell.

Joey Romero:

The common thread here is that these are all people who, you know, could have just made their money, keep making their money, but they're out there, you know, coming to your guys's clubs and just sharing everything that they know, and just, you know, helping just countless investors, because you never know who, what connection you're going to make, where it's going to take your career. I want to, I want to ask a sort of a follow up question is, and it is kind of a fun question. I asked this to the guys last month. All right, so if you could have anybody throughout history come and speak at your club one time, who would that be?

Kaaren Hall:

I'd like to bring Mike Cantu back.

Derek Harms:

That's a good one.

Kaaren Hall:

You know, when I, when I very first got into the space here in Southern California, I went to NSDREI and I heard Mike Cantu speak. It was a very long time ago, and I'll never forget, 'Buy four, sell three, keep one for me', you know, but he hasn't spoken in a long time, and he's a great speaker. I would bring Mike back.

Joey Romero:

Yeah, he's in these days, he's still, I mean, we interviewed him, what? A couple years ago, he still reads an hour every day, and he still prints out every email.

Derek Harms:

You know, I have an answer to that. I would do want to second what Kaaren said, be really good to have Mike back.

Kaaren Hall:

He does not. He spoke at our club on Zoom in April of 2021, and we compressed 40 years of experience into two hours. And it was a, it was just

Joey Romero:

Yes, he does. He still prints out every email and such a fun interview, and he helped so many people just in he doesn't do it. He's got an assistant that does it. So he's, that Zoom call. And I'm grateful to have lunch with Mike, usually you know, and I try to get him on Zoom, you know, I have to get a recorder, and he continues to be a huge presence in my life on the phone and walk him through him. He's like, 'oh, and in my financial world. And it's really, really, he's really sorry my, you know, my assistant's not here. She's on vacation,' and I gotta walk him through that. So Derek, who just one of the, one of the, the legends, the icons and just like would you bring back? Who would you know, dead or alive, you the overall good people that we love in this industry. I think know, throughout history doesn't have to be real estate. Who if I could bring anyone to the club, I'll try to get Warren Buffett. I think I would try to get the most successful investor of all time to the our investor club and see if we can pull a would you bring? few gold nuggets out of him. You know, I think I talked about this last time, but, everybody talks about Warren and Charlie. Warren, Charlie, does everybody know that was a third pardon.

Kaaren Hall:

Who's that?

Joey Romero:

I forget his name. I think it was Roger. What's that?

Derek Harms:

Bruce Norris.

Joey Romero:

No, it wasn't Bruce Norris, no, but, but he kind of fizzled out. And, you know, he was successful, but not to the levels of Charlie and Warren. And one of the things that I love about when they asked him, like, 'Why do you think he did? He wasn't as successful as you guys?' And his answer was, 'He didn't understand the concept of enough'. And it just kind of blew my mind like, at some point, like, you know, like, don't just chase the money. You know, you have other aspects you want to give philanthropic. It's, you got, you have your family, you want to give back to the community that brought you up. Which kind of leads me to another question is, who did you connect with at your clubs, or who has been probably the biggest influence in your career that you, you know, met at a club?

Derek Harms:

I'll start with that. I met one of my best friends now and a really successful real estate investor in his own right here in San Diego County. His name is Nick Davidson. He's spoken at our club on a panel since then, and he's, he's just a really, really good dude. And I met him at a club, and without getting too into it, but we met at a financial it was like an apartment building mastermind lunch, and we met there, and then there was a real estate guys syndication event, like a few weeks later, in Phoenix, and we're like, 'Hey, are you going to that? Yeah, I go to that. Yeah. Okay, cool, let's go.' And ended up, we ended up sharing a hotel room and we get there, and I booked the room in advance, and we get there like, 'Oh, sorry, your room isn't available the one that we booked for you, but we have this room over here that has one bed. Are you guys okay with that?' Now we just, like, looked at each other. We're like, 'Are we okay with this? Like, are you sure? And we're like, Ah, whatever. Let's do it.' So we ended up sharing a bed in Phoenix for a syndication event, and we were just become super, super good by these ever since then, he was at my wedding and but again, it all started there.

Joey Romero:

Who's the better fisherman?

Derek Harms:

Oh, man. Well, that goes without saying, certainly me, but I gotta give credit, he's been a trooper, and has gone with me on a lot of trips, Alaska, Montana, all around the US, actually, five fishing. So cheers. Cheers to you Nicks.

Joey Romero:

Kaaren, who, who's been the biggest influence on you?

Kaaren Hall:

Yeah, a couple of people. One is Amanda Han, you know, we met at a real estate investment meeting even before I opened uDirect, and kind of built our companies together. Obviously, Amanda's and matter their CPAs and just our careers having have grown together, and Amanda's just taken off like a rocket ship, you know, with Bigger Pockets, and she's just such a natural. And it's just great to see her, you know, growing in the ways she is and influencing people in such a positive way. She's also been my CPA for 18 years. So thank God for her, you know. And also Kathy Fettke, you know, she's somebody I met at the clubs, and we got to be good friends. And look at somebody who is, she and her husband rich. Look what they've done for investors, you know, Real Wealth Network, right? And just taking it from grassroots, buying a house in Dallas to creating so many opportunities for the entry level investor. I mean, obviously big investors too, but also for the entry level investor, to get in and to make sense of it, to understand things, you know, soup to nuts, how do you do this? And to be really heavy in education. And so those two women have been huge leaders and dear, dear friends.

Derek Harms:

You know, Kaaren. So I think if I don't mind Joey, I'd like to.

Kaaren Hall:

Yeah.

Derek Harms:

I really appreciate what you said there, because at the end of the day, what are you doing when you go to an organization like like Kaaren's or the NSDREI, you're going there to surround yourself with other like minded individuals who have taking the effort to drive to the club on a, or log into zoom, whatever it all takes effort you're taking the effort to be part of this, taking an effort to shake someone's hand or reach out to them on a phone call or email later. And every one of us that that attends is putting yourself in that ecosystem. And if you put yourself in situations like that and that type of environment, enough things start to happen, and they don't happen overnight. Sometimes they do, but it takes a little while, most of the time. But when you're around those types of folks regularly, you start to assimilate. You start to siphon off some of their experience and knowledge and apply it to your own business model, and you start to become friends with these people. And then next thing you know, you're on a group text with, you know, 10 top developers in your town, and you're getting connections that way, and insight and things you never would have known. And it all starts by putting yourself in that position. So I, you know, I encourage anyone listening to this tonight, or wherever you're at and on your drive or at the gym or whatever, and if you you haven't yet stepped into the doors of a REIA, I would highly recommend you do it. And if you're in North San Diego or Orange County, definitely check out Kaaren or NSDREI, OCREIA, um, but, it really is an environment that nurtures your financial growth.

Joey Romero:

So, I want to touch a little bit on what's going on right now. So it's been a rough, rough couple of weeks for the stock market, when, honestly, year to date, it's, you know, it's down, you know, almost 6000 points year to date now. But you know, a lot of people, you know, they don't, like Bruce doesn't pay attention to the stock market, you know, as far as stocks, because he doesn't own any, it's all, it's all real estate. So how do you guys view what's going on right now in the stock market, and do you believe it's gonna affect the real estate market in general, or will it really affect like, I'll start with you, Kaaren. Like, what do you think about what's going on right now?

Kaaren Hall:

What do I think? I mean, you know, it's, I think that we've got a sick patient and it needs to go to the hospital, need some medicine. I see what's happening as a correction. I don't see this as a Armageddon. I see that, you know, Trump and his advisors, in my opinion, are very intelligent. What they're doing is doing, you know, what it takes to do. I think that by causing the market to do what it's doing now, what they're doing effectively is bringing rates down, and if rates are lower, then they'll be able to readjust and recast loans at a lower rate, and it's going to help a lot of people in that situation with lower rates. I don't know if we're going to see 2.75 again, like what he said, never you said, but I think you know, bringing down rates is one thing. But I mean, this isn't something is just doing on the fly. This is something that's had a lot of serious consideration. So, yeah, you know, the patient has to take some medicine and it hurts. But didn't we have this exact same thing during COVID, didn't we, didn't the market go down then, doesn't it go down, you know, on a regular basis? And I think, it's a cycle. It's got a pattern you can measure that. I'm sure, it's pretty measurable and consistent that it's going to go up and down. So it's down now. But when I was in Seattle at an event, multi family event, in September, there's a guy I can't remember his name, he was speaking, and he talks about how, basically, the stock market has been a hockey stick, you know, and nothing is ever flat, but, you the stock market is going to continue to go up, so we're having a correction now. I'm not worried, and it's another reason why people like alternative assets too, is because anybody who's got a house that got renters, they don't care what the stock market's doing. They collected their rent on the first right, and it didn't really impact them, unless those people lost their jobs. And if that's the case, then real estate investors are buying more houses. Am I right?

Joey Romero:

Derek, what's your take?

Derek Harms:

Honestly, I'm not qualified to answer any question about about the stock market. I really, I only have a handful of stocks. I don't day trade. I follow the the news headlines, and that's really all I know about the, under the hood of the stock market. But what I will say is that I think that overall, the it's going to be an interesting balance, right? When stocks usually go down. And this may not be true always, but at least the way I understand it, if money's flowing out of stocks, then oftentimes will flow into bonds. Money flows into bonds that's going to drive interest rates lower, and then, then it becomes what comes first, right? Are people freaked out about a recession and their stock portfolio and retirement accounts looking a little lower. But on the flip side, if there's been buyer on the sideline and interest rates are significantly lower, are they now going to pull the trigger where they once wouldn't have because rates were were a little higher and it didn't make sense for them affordability wise. So I think it'll be this interesting balance. I think the equalizer, at least in the San Diego market that I know and work in is going to be inventory. And as long as inventory stays so low, and we have these swings in the stock market, bonds and interest rates, it doesn't seem like anything is going to go crazy one direction, at least, that's the way I see it. So I don't I'm not looking at this like, oh, everyone run for the hills. Who is buying homes in San Diego County? I think that it's it, like Kaaren said, it's a correction, and I it'll be interesting to watch, though, like how the sentiment, buyer sentiment reacts in terms of, are we going into a recession or interest rates lower, and am I comfortable buying now? But what I will say is that kind of a hot take. I think this was Trump's plan all the whole time, and I think that he's been very vocal about wanting Jerome Powell to lower federal funds rate and I think this may be one way for him to get it done, right? You you create a somewhat of a recession, and the Fed may need to pivot in order to help out. So I don't know. We'll see if, if that comes to fruition or not, but definitely, first four months of this, this presidency, has definitely kept the popcorn on the table.

Joey Romero:

So we're getting close to an hour. So I want to ask just two more questions of each so the one question I want to ask is, let's say I'm a brand new investor, first time at your club, what would, what would your advice to me be?

Derek Harms:

Wow, take notes and meet other people, network and get to know other people. Because just like Derek was saying, you know, it's people, you know. And I mean, of course, I'll say your network is your net worth. So that's the most Yeah, I would say something very similar, is get to know everyone in the room, right? Everyone here is like minded. It's extremely important. I usually tell newer folks to the important thing. industry. I usually tell them a couple things. I say, 'Look, you're in San Diego. You want to do this, you're gonna have to borrow money. go learn, borrowing money language, talk. Go to lunch with couple hard money lenders. Learn what a promissory note is. Learn what a need of trust is. Learn what people are paying for this kind of financing. Go and talk to someone who is maybe invested in second position with private money. What are they doing? Talk to Karen. How are self directed IRAs able to help you buy your assets' Now I always tell people like you have to learn that component. And if you really want to buy homes here in San Diego County, then of course, similar networking. Go find one or two people that you think are

Joey Romero:

All right, Kaaren, tell everybody once again, how operating in a similar space that you could see yourself doing. Take that person out to lunch, right, offer some free work for them. Go find a deal for them, and then partner with it on them, and don't make a penny, but have them show you they can connect with OCREIA. how they did it. So that I've done that for a couple folks, and I like that advice, and I think that those two things could be really helpful for somebody new.

Kaaren Hall:

Yeah, we've got a website, OCREIA.com so it's super easy to find us, and you can register for our next meeting right online, right there. That's free. So there you go. And we have, you know, always just some really amazing speakers, like I mentioned this month. It's Vinney Chopra is going to be talking about residential assisted living and then we just, we, you know, we always have somebody new. So again, OCREIA.com.

Joey Romero:

Derek.

Derek Harms:

Our website is NSDREI.org and you can find us on Instagram and Facebook as well. And we meet the third Tuesday of every month at the Shadow Ridge Country Club in Vista. And we really look forward to meeting the new faces and hopefully turning the light bulb on to where you can, you can start to become that financial hero for your family through real estate investing, because we see it happen.

Joey Romero:

Awesome. Well, thank you both for being on, on our sort of, our spin off show. I'd like to continue doing this. And you know, you know, maybe have you guys do it once or twice a year, you know, with different folks and, you know, different questions. I think it would be good for people to get to know you guys like we know you guys. So thank you so much for being on really appreciate it, and we'll see you guys next time.

Narrator:

For more information on hard money loans, trust deed investing, and upcoming events with The Norris group. Check out thenorrisgroup.com. For more information on passive investing through the DBL Capital Real Estate Investment Fund, please visit dblapital.com.

Joey Romero:

The Norris Group originates and services loans in California and Florida under California DRE license 01219911. Florida mortgage lender license 1577 and NMLS license 1623669. For more information on hard money lending go to thenorrisgroup.com and click the hard money tab.