 Ladies and gentlemen, boys and girls and children of all ages welcome back here to the Prince of Investment coming to you guys and girls live all the way from the city and state of Denver, Colorado via Hololulu Hawaii. Thank you guys and girls for tuning in and I also want to say I don't have a lot of time and I definitely know you guys and girls don't have a lot of time so we're going to jump straight into it. So as you can see in today's topic we're going to be talking about REITs with the Intelligent REIT investor himself. He's all the way live from South Carolina. He has you know written so many books we're going to talk about his latest book so you guys and girls stay around for a treat but he has amassed over a hundred thousand followers on Seeking Alpha. He's written over three thousand articles on Seeking Alpha. He's done great things he's been on the show before. I'm definitely glad to have him back so ladies and gentlemen I want to see here today you guys and girls sit tight or who's catching a playback. If you're catching this live sit back we're going to talk about REITs real estate investment in 2008 versus 2021. What do we have done different coming in that physical real estate having so much commercial real estate being wiped out by 2008 and looking at the market today. So there's so many things to talk about REITs versus stocks land versus REITs all the good stuff like that. So you guys and girls stay tuned so what I any further do let me welcome my guest Mr. Brad Thomas how you doing today sir. Great to see you again friends I gotta say you have the coolest show I go on a lot of shows and you have the coolest show that I've ever gone on so I'm going to give you that. I appreciate that I appreciate that you know I know you policy that to everybody Brad but I still think for making things making me feel special I really appreciate that. Thank you Brad it's good to good to see you again and look I think we did this thing before COVID so glad to see you again glad you're healthy and your family's healthy and it's great to see you great to see you again. Okay great so the first thing I want to get into was looking at your history and you know looking at some of your recent recent interviews and things like that. Nor your past how you say you spoke about in 2008 you got so much commercial real estate you got into malls and shopping centers and things like that and you see you got a little bit too greedy and you didn't diversify and 2008 came in and it was pretty heart wrenching for you and your partner with everything that happened with real estate. Now look at the real estate market 2020 you're seeing right now for some reason we thought when the pandemic happened maybe real estate was going to take a dip but no real estate is like at an all-time high right now. How do you feel about the 2008 market versus the 2021 market in real estate in general? That's a great question and of course you know I'm a little older than you so I've gone through a couple recessions and the 2008-2009 recession of course they call it the great recession for a reason and it was it was it was very challenging for me but frankly for anyone who is in real estate are really in the financial market banking any of the any the financial sectors but of course you know nobody could prepare for what we what we saw in 2020 and this you know black swan this global pandemic and it was it was pretty gut wrenching I mean I was sitting here you know at home and it was you know it was some challenging months we didn't know exactly you know what was going to happen and nobody did and you know but I'll tell you what Prince I mean you know real estate is a unique asset class because it is real property and I would drive around and although the some of the stocks that we were investing in were we're tanking almost every you know every stock in the in the beginning of the pandemic was tanking we knew that the real estate values were still going to be fine that the these shopping centers and these industrial buildings and these office buildings were still going to be around and eventually they're going to lease back up and so now we're seeing this recovery unfold and investors are making a lot of money we've done extremely well really you know in Warren Buffett's words buying into that into that fear we've really done well and you know again you had to be you had to be an experienced investor to really understand it and take advantage of some of this fear that was in the market last year but we've seen some incredible returns coming out of this pandemic and there's still there's still quite a bit of runway left for investors who want to invest in these real estate stocks. Okay so I'm glad you said that back in 2020 when we seen the pandemic go down you always spoke about before the pandemic you said hey this is a great way to diversify away from stocks you know some people have stocks some people so you know a great way to diversify getting real estate you know real estate is so tangible you don't want to do all that work you can just let someone else do the work and get into REITs but in 2020 when the stock market dropped so that we see the REIT market you're saying hey the actual physical real estate market we didn't really see a big fall in it but we saw the fall with REITs why is that? Sure well you know again there's there's advantages and disadvantages to owning public companies in fact I would say one of the advantages for REITs is the fact they are liquid you can buy and sell them in any time and if you go try to sell your duplex or your rental house or whatever your real estate is you know it's not instant liquidity it takes you have to market the property fix up the property hire the broker hopefully the the buyer will you know get a loan or be able to you know bring cash to the closing and so it takes a while maybe before that that process to could take months and months to occur so one of the benefits of owning a REIT or real estate investment trust again which is a real estate stock is that there is liquidity now of course the downside to that the other side of that is with liquidity comes volatility because the market is going to wake up you know every Mr. Market is a Benjamin Graham Warren Buffett's mentor would say Mr. Market is going to wake up every day and he may be in a good mood or he may be in a bad mood or he may be in a great mood but but obviously in the pandemic the Mr. Market was not in a good mood and so we had this volatility in 2020 there was again a lot of fear in the market so that's those are the that's the trade off you have as a as a public stock investor whether it's a real estate stock or any any stock is publicly traded you have those those issues but I will I will cite two other major advantages and these are major advantages for owning real estate stocks or REIT and the second advantage it which really goes is directly correlated to this liquidity argument that I just mentioned is the transparency so unlike some of the private partnerships I had where I didn't have full transparency with my business partners and some of the underlying you know issues with this with these with with the business model I just did not have that transparency I didn't manage the property so I had to deal with a third-party manager so you just don't have that transparency of course with a public company you have what's called the Securities and Exchange Commission the SEC these companies as you know are required to report these financials on a quarterly basis and an annual of course we get annual reports and study all of this all of this data and you have all of this you know publicly available information on hand we're actually in the middle of earnings right now so we we go through all of the quarterly earnings so that's an advantage that the other one that I think is important and again this is where I really found out the difference when I was going through my I guess my transition in life from the private side to the public side is the fact that REITs have tremendous diversification so you can essentially gain access to any property type it's amazing Prince to see the number of different property types that you can invest in today 10 years ago who would have imagined that you can invest in cannabis real estate who would imagine that you can invest in cell towers who could imagine you can invest in data centers and farming and even prisons believe it or not I would not invest in prisons by the way but there's some if you want to that's that's an option so you have all of these real estate property sectors that you can invest in and that provides tremendous diversification and I will add one other thing is we cover US stocks but we also look at the whole global landscape so there are REIT like structures in about 40 countries I just returned from Paris and Barcelona just a couple of weeks ago and looking at some of the properties in Paris and in Spain and so there are a number of ways you can you can diversify your portfolio and probably the last thing I'll throw in there Prince is management most of these public companies not all but most of these public management teams doing excellent job and the reason that they that we had confidence in this pandemic is the fact that most of these companies had very low leverage they had very disciplined capital structures and so you know and frankly they had adequate liquidity most of these companies to navigate this once in a lifetime global pandemic so REITs were definitely the place to be and again for the individual investor you know I think I said this Prince last time you and I spoke you know well over a year ago and that is you know I turn on the TV every night and I'm sure you do too and you flip through these your cable channels and you see all these you know house flipping shows and all the reality shows about real estate and you know but the reality the reality is most of most most people average Joe or average Jane they don't understand how to flip a house they don't have you know three to four hundred thousand dollars to go out and buy five duplexes and rent them out you know but but my product that I that I teach and preach is all you need a dollar all you need you know you don't even need one share of stock you can invest in these these public companies and so the barrier to entry is very very low anybody can can get into this business and so I just want your audience to be aware of that that this you know anybody can invest in real estate stocks or REITs okay now I want to actually this this next question before we go into this break you were known for in 2008 you bought a lot of commercial property right and then we hit the pandemic in 2020 and you're seeing that you know a lot of commercial properties you know companies are on zoom now uh TV television shows are doing zoom you know commercial real estate is kind of not as in demand as it once was how do you feel about that space now especially uh back in 2008 you're saying hey I think we increased inventory too much how do you feel about that commercial real estate space now before we head into break right well uh the bottom line is this I think technology's been a tremendous disruptor not only in the real estate world but just in in this in the world and so in the property sector we actually cover prop tech now there are a number of really innovative companies that have made it more efficient to lease up buildings and do all types of of real of functions to make real estate much more efficient so what we've seen and during COVID is an acceleration in those companies that really have have adapted to technology and enhance their their business models to utilize technology I'll specifically cite logistics companies for example these are simply warehouses that are leased to companies like Amazon or FedEx there's a lot of technology in those companies and that's Amazon as a technology business and we've seen that in data centers as well I mean obviously there's been a tremendous acceleration in data centers and you mentioned zoom well guess what you know these what we're recording right here this particular this this segment of this show that is right now as we speak going to a data center it's going into a cloud I probably invest in one of those data centers I'm an investor in one of those data centers that you're utilizing for your zoom technology for us to discuss this right to communicate right now the cell towers I'm using a cell tower right now that's taking this signal to the to the cell tower for this show and we invest in cell tower reeds so technology's been a great thing just like any business if you haven't adapted to that technology you're going to be lost you know in the dark ages and there are certain businesses that that haven't adapted and it's specifically malls and I'll be real quick because I know you got to go and break but we already said even last year or two years ago we have too many malls in the US just way too many there's 1400 malls prior to COVID and a lot of those we've seen now the online demand and a lot of people buying especially apparel online and a lot of the things you can now get you know with the Amazon so we're seeing an evolution it's not a complete going to be a complete wipeout but we're going to see a continued deceleration of mall closures or acceleration of mall closures in the US as it relates to technology and just that you know what Amazon's doing they've really changed the playing field for retail so every property sector is really going to have a different kind of application with regard to technology okay well thank you for that ladies and gentlemen we're going to go on a break and I mean a very quick break you stay more you stay here to get more from the the intelligent read investments of Brad Thomas we're going to be talking about his book next and we're going to give away some copies here so y'all better stay tuned if you want to get some copies of Brad Thomas the intelligent read investor all right see you soon I'm Christine lenders physical therapist and board certified orthopedic clinical specialist and I am the host of movement matters a show that is designed to bring you the best physical therapy tips and exercises so that you can have your best body and do all the things that you love you can watch my show every other Tuesday at 11 am on thank tech white dot com where I show you instructional videos from the top of your head to the bottom of your toes to get your body feeling its best remember life is better when you listen to your physical therapist I'll see you on Tuesday the intelligent read investor is here live with us today mr. Brad Thomas he's here live with us today we've been talking about our REITs REITs versus stocks and we talk about the commercial real estate using that experience that he had they always say that you can learn a lot from when someone do something right but you can learn even more when you do something wrong I'm pretty sure I butchered that quote but it goes something like that but uh so we talked about his 2008 experience as a whole in physical properties in real estate get into commercial real estate going into now as we're seeing the craze especially in single family homes but we have him here live today so ladies and gentlemen give a nice round of applause if you're just checking in mr. Brad Thomas how you doing today sir doing great and again once again it's good to see you and it's great to be back on your show all right awesome now I want to get into something here the first thing I want to talk about you recently wrote about this you talked about two high yield REITs that could soar right and one of them being your omega health care right and broad market it's a commercial real estate more commercial mortgage REIT the health care one kind of makes sense but where are we going with this uh mortgage one so tell us about these two high yielding REITs why are they high yielding and why they could store sure well of course you know yields a lot of people love yield and who doesn't right that's the shiny new toy that uh you know we'd like to we'd like to have and it means income higher income higher yield and so these particular companies again one at your right one is a health care REIT and actually specifically they're in the skilled nursing sector which has really been challenged significantly so one of the reason that this company does have a high yield is because the market has traded off again Mr. Market as I alluded to earlier in the earlier segment has not been in favor of skilled nursing why is that because of the labor shortage you know you think about it a lot of these nursing homes are under still tremendous pressure with COVID and now the Delta variant because uh vaccines so you know they're having to require vaccines so there's just a lot there's a lot of politics in this as well so the labor issues have really put pressure on skilled nursing operators and so that's again put pressure on this company omega health care and some peers just like omega and so that's what is elevated this yield which is around nine percent company actually just produced earnings generated earnings today and they actually did fairly well so we're going to be watching this and obviously listening to the earnings call tomorrow now the other company you mentioned is called Broadmark you're right and they are commercial mortgage rates and and you you've actually done your homework I'm very impressed not only is you have the coolest show you actually do your homework and I'm very impressed but Broadmark is a commercial mortgage rate they yield around eight percent now this is they have a very simple business model they lend money to home builders and apartment builders so if you want to go build a house or two houses they'll loan money to you to go build a house you buy the land to frame it put it all together put the roof on it their average customers probably they probably lend about a million to two million dollars per customer so they'll have maybe four houses up maybe five houses up going at a time now they charge around 12 percent on average which again sounds like a lot of money but it's virtually a hundred percent financing so some of these small builders they'll go out now have a business partner who will help them you know fund the house and they'll give that partner some money or you know some of the profits so it is a very successful model the key to this business model as is with any mortgagery is just underwriting the credit underwriting you know the borrower just like a bank to make sure that you know when the money goes out the money is going to come back in and so Broadmark has done a very good job of sourcing uh they're they're uh and under really underwriting their uh developers their builders uh they do they do have some trouble loans obviously the pandemic was tough last year and there are a number of builders who just frankly weren't able to pay so they're having to work through some of those defaults um and that's again what's called a little pressure to the stock price but we one thing we do and we spend a lot of time is we we not only underwrite these companies we speak with these management teams on a regular basis I have calls just like you do here with me we have calls almost every single day if not multiple times a day with management teams really digging into their businesses so with Broadmark specifically we've looked at that company and we believe that the the dividend is sustainable and the company is doing a really good job at underwriting the risk for that business model and again you know the demand of housing today and um so that's really what I really like about the business modeling Warren Buffett said it best if you know you've got to understand that business and if you really understand this business of lending money to single family housing especially in the Sunbelt markets where I'm located you know Florida Texas are some dominant markets for them where they deploy capital um it's been a great market and so we like those companies and again but we've done our homework just like you've done your homework here for this show to make sure that these are safe companies even though they're higher yield we believe they are safe okay now I want to ask you this question you spoke about it earlier the cannabis real estate not real estate investment trust cannabis read tell us about that do you think cannabis is on the brink of being legalized on a federal level and tell us about this cannabis read that you were talking about earlier well actually what's interesting Prince is there's one company we cover and they just announce earnings today called innovative industrial and their ticker symbol if you will do some research their ticker symbol is IIPR they were the first cannabis read we call that the first mover advantage so they got in early they built a very large base they launched a couple years ago I forget the date but it was at least say four to five years ago and they have grown and I use this a lot play on words pun intended that they have growing like a weed and so you know that was the first mover they're growing at a rate of about 35 percent per year now that's their earnings growth mode historically and then what we see is the forecast so they were the first out now we've had a couple of other companies that have be listed as cannabis reach we have one is a mortgagery called AFC gamma and I don't know who came up with the name that's it AFC gamma they're based down in West Palm Beach and I actually met with them a couple of weeks back and we just initiated coverage on them then we have two other traditional equity reach which means they own the brick and mortar and so one of them is a really small company called power read their ticker symbols pw they're actually a nano cap so a nano cap means they have a market cap of under 100 million but they've done extremely well now it's high as you know it's higher risk to invest in these small caps or nano caps there's a lot of volatility with those companies but there are now actually four companies in that space now you hit the nail on the head prince is the the safe banking laws that really the big overhang for this cannabis sector is at some point in time in the future it's not a matter of if it's just a matter of when the federal laws change and the safe banking laws are formed then it's going to basically allow the federally chartered banks to lend money well you're in Denver so you know this well because you've got a cannabis a pro cannabis state but you're going to see these these these banks open up and they will actually be able to lend money now that is that going to how is that going to impact these reeds because right now the reeds are taking advantage of this opportunity because there's really relatively not many many firms that will that will invest in these larger cannabis facilities but we believe and we've talked to these management teams quite a bit friends we believe that even with those laws that these companies like ii pr innovative industrial will still be able to generate very attractive double digit returns and so you know i think it's here to stay i mean obviously we know cannabis is still exploding but i think the big the elephant in the room is when those safe laws do do go in the books you know how will that impact some of these reeds and again we feel we still we feel fairly favorable but again this is somewhat of a always like to warn you know investors especially beginners i mean this is still cannabis is still an early innings asset class and so there's a lot of volatility so obviously if you're going to invest in those types of companies you always need to make sure you you manage or maintain adequate diversification and invest in some more stable property sectors as well as cannabis but we like cannabis a lot i will say i'll look right now because i've got my screen open here can't the cannabis reeds were one of our top performing reeds power reed was up like 83 percent year to date for example and just really uh innovative is that they did like 80 percent this year they did like in the year of a pandemic i don't know have the numbers in front of me but but this is amazing that they they return something like 80 to 90 percent in the year of a global pandemic you know which is which is crazy but anyway cannabis is definitely a hot sector and i think it's going to continue uh uh to be interesting but i would definitely maintain diversification all right now we're going to jump into this real quick we're going to bring up the cover of your book right this is the intel this is your newest book the intelligent reed investor right this is your newest book so the first person to email me my email address prints prince at children financial literacy.org that's all plural right i'm a singular i'm sorry children no s literacy children's financial literacy.org so prints prince at children financial literacy.org i know it sounds like a lot but it's really not but you send me an email you're going to get a free copy of mr brad tom's latest book the intelligent re investor sent your way and when you do email me please send me your address because i do need a place to send it okay but now i want to jump into something uh another topic you recently wrote about yesterday you talked about corporate taxes in 2022 what's important what do i need to know about the corporate taxes in 2022 this is going to be our last question before we gotta or we gotta run and close out the show yeah well look i think this article was specifically on corporate taxes not really individual taxes um i'll say this and i didn't really go into a lot of detail because i know we're gonna be talking topic of real estate but one of the things that i think is really important on corporate taxes and specifically real estate is that you know there was there's been discussion um in within the biden administration of eliminating this 1031 exchange law which essentially was a great tool or still is a great tool for both corporations but also individual investors to take a a property a rental house a duplex a piece of farmland and be able to sell it and then take that capital gain and exchange it into a like kind property and so there was a lot of fear out there uh reeds actually use those like kind exchanges too they're called 1031 exchanges so one thing i would do want to say and this is actually a bit of good news is that it appears that that law is going to it's been around the books over 100 years it's it's really a long term law and it was actually designed for the individual investor not really the corporation but that would have really impacted the real estate market so i did want to make mention that i didn't go into detail about that in the article but i think that's a law that i think will be impactful to real estate the other thing i want to say is that reeds and again it's all in my book probably the first or second chapter of the book it's we talk about you know the law the reed laws and the great thing about real estate investment trust prints is that these companies must pay out 90 percent of their taxable income so the reeds actually don't pay a whole lot of taxes and i get this i get this question a lot and i think it's important because but because a lot of people think this is just a loophole you know this you know i'm i'm trying to get people to invest in some kind of a loophole opportunity but it's really not recent been around since 1960 that's during the eisenhower administration so you know a long time well over 60 years of history and and so the individual investor has to pay taxes and a lot of the people who own reeds they own them in tax deferred accounts so i want to point that out i think in terms of the corporate taxes in the u.s obviously you know we're going to biden the biden uh policies are going to increase taxes for corporations but again reeds are in a better much better position because they don't really pay taxes as those individual investors that pay taxes and again this kind of goes back to real estate and why i think it was important to own real estate is part of your asset allocation plan there's a lot of wealth that's being created in real estate if you if you go on the forbes list and look at the number of billionaires that that that own real estate a large majority of them created that wealth because of real estate in fact if you look at the back cover of my book there's a gentleman by the name of sam zell they call him the grave dancer and i'll tell you why but i went and met him last week i flew to chicago because he did write up my number one testimonial on the back of the book according to forbes he's worth six billion dollars um he's you know still drives his motorcycle around on the weekends in chicago um great great man we had a great meeting um but the reason they call him the grave dancer is because he he he was quoted as saying he likes to find these really good bargain companies and right where they're kind of near the grave they're in other words they're distressed he comes in and buys them and so we like we i've actually written some articles talking about how to invest like a grave dancer um but listen back to back to corporate taxes again reads don't really have those problems and i think that's another great area to invest in and i encourage everyone to you know look at my book i actually teach out of the book now friends at nyu i just finished up my first class at nyu virtually which by the way is the largest real estate school in the world over 700 real estate undergrad and graduate students there so um anyway that's that's uh i'd love to uh you know get back on any time and talk about real estate or anything else because it's always great to be uh you'd be on this what i think is the coolest show that i've ever been on here which is your you know the prince dyke show thank you i definitely appreciate you know what one thing you know uh brad i will say when i looked at your book i was like wow all these testimonials from all these billionaires and how it's tests of people but there was no prince dyke's testimonial in there why is that brad what happened what's up with that how can i get some love well that is that is true that is true i uh we're gonna have to do something there no no actually that's that will definitely be in the next edition by the way i've got another book i'm writing on and it's called the 10 uh how was the title of this is going to be that you know the 10 wealthiest real estate investors all time and i'm going to keep it us uh i think zeal definitely is on that list but uh you know look there's again real estate is a great asset class to be in and for owning reach is the way to go because again you don't have to deal with the three tees uh prince you don't have to deal with the toilets the trash or the tenants and just remember that you know next time if you don't if you invest in reach you don't have to deal with the three tees got it all right brad so how can people follow you how can they catch up with you how can they get more from you yeah well i've got a real simple website uh called brad tom dot com so just visit brad tom tom dot com and uh you can check us out sign up for our free eblast we do a eblast five days a week again it's all about education it didn't cost you anything to sign up for the blast and we always have promotions going out we have various newsletter products of course always have a book in the works and uh i'd love to get you on my podcast as well so i definitely want to reach out further for that nice nice thank you definitely appreciate that well ladies and gentlemen brad you know i can go on for hours with you sit down with you but i know people that down there and think tecawaii they have other plans ladies and gentlemen it was great it was wonderful until the next video podcast cartoon or whatever it's crazy you see us doing around the globe peace be safe i'm out and thank you