The Science of Flipping
Trump, Inflation, and the Future of Real Estate | Jason Hartman
Fri, 14 Feb 2025
In this episode, I sit down with economist and real estate expert Jason Hartman to discuss the impact of inflation on real estate investing and why debt can be an asset when leveraged correctly. They explore the Inflation-Induced Debt Destruction concept, explaining how rising prices actually reduce the real cost of debt over time, benefiting homeowners and investors. The conversation also covers the housing shortage, the Federal Reserveโs role in interest rates, and why real estate remains the best long-term wealth-building tool. Jason shares insights on tax benefits, leveraging properties, and why now is still a great time to invest despite market uncertainties. ย -- ย The #1 training and coaching system to launch, grow, and scale your investing business!ย ๐๐๐๐ซ๐งย ๐๐จ๐ซ๐:ย http://www.thescienceofflipping.com Turn cold real estate leads into engaged motivated sellers on auto-pilot using the power of A.I!ย ๐๐๐๐ซ๐งย ๐๐จ๐ซ๐:ย https://www.rocketly.ai/ Have a question? Ask me anything atย https://www.askjustin.ai/ ๐๐๐จ๐ฎ๐ญย ๐๐ฎ๐ฌ๐ญ๐ข๐ง: After investing in real estate for over 17 years and almost 3000 deals done, Justin has created a business that generates 7 figures in active income through wholesaling and fix and flipping as well as accumulating millions of dollars of rental properties including 5 apartment buildings, 50+ single family homes, and 1 storage facility Justins longevity in real estate is due to his ability to look around the corners, adapt to changing markets, perfecting Raising private capital, and focusing on lead generation which allows him to not just wholesale and fix & flip, but also accumulate wealth through long term holds. His success in real estate led him to start The Entrepreneur DNA podcast and The Science Of Flipping podcast and education company, where he has coached and mentored thousands of aspiring and active investors over the last decade. He is a nationally recognized speaker and is on a mission to educate as many people as possible on becoming a successful dynamic real estate investor. ๐พ๐๐๐ย ๐๐๐ย ๐ท๐๐๐ย ๐ฏ๐๐๐ย ๐ป๐ย ๐บ๐๐ย ๐จ๐๐๐๐ย ๐ฑ๐๐๐๐๐:ย โJustin is one of the best trainers in this space. He really gives everything to his tribe.โ โ Brent Daniels (TTP) โJustinโs ability to connect with people and help them understand what he is teaching, is unparallelledโ โ Kent Clothier (REWW) โWe have been in the trenches flipping homes in Phoenix for over a decade, he is one of the best to do it.โ โ Sean Terry (Flip2Freedom) Subscribe To Justin Colby:ย http://youtube.com/justincolby View All My Videos:ย https://www.youtube.com/c/JustinColby
Chapter 1: What is the hardest year ever to predict in real estate?
This year is the hardest year ever to predict the real estate market.
Okay.
Why? Because there are so many wild cards. Trump is the wild card of wild cards. The average construction worker now is almost 50 years old. In the past, you know, it was guys in their early 20s. Nowadays, these guys have aged. They're all 50. And there is a giant shortage of construction workers. And that's going to make the supply demand equation out of balance.
That's going to push the price of housing up. These tariffs will push the price up. There's a lot of upward pressure on prices and just general inflation.
What is up? The Science of Flipping. This one is going to be a good one. If you want to know what is in store for the market, because Trump's here, if you want to be able to see around the corner, if you want to listen to someone who's done well over 10,000 deals in his career, we have economist Jason Hartman here. What is up, dude?
Hey, Justin. It's good to be here.
So I'm going to come straight at what I think everyone's going to want to understand or your thoughts on it at least. Trump's in office. Everyone thinks he is our savior. Everyone thinks there's a lightning bolt that will come down. The economy is going to be saved. We're all going to be rich and we're going to print money. Let's hear your perspective of reality.
Yeah, that's funny. Well, I think half the people don't think he's the savior. Yes. Well, less than a little less than half. And yeah, it's a it's a really interesting time. I think Trump is going to be incredible. I think the second term is going to be phenomenal. I think he's matured. I think he knows what he's doing. He's an executive. He's a winner.
Unlike the previous administration, that was just a complete disaster. But it's not going to be without some pain. There will be some bumps in the road. These changes that Trump is making, I believe, are very good for the country long term. But, you know, if you take millions of illegals out of the market, you know, they rent from somebody. They work for somebody. Not all of them, of course.
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Chapter 2: How does Trump influence the real estate market?
Well, you know, a big part of it is inflation. And how much inflation will we have? We're not going to have deflation in any significant way. There's just nothing to support that idea. You know, there may be little bouts of it or declining inflation. But overall, the macro trend is inflation. And with inflation, real estate benefits huge amounts. I mean, bigly, as Trump would say.
Yeah, yeah, yeah. It benefits bigly. And inflation is the hidden wealth crater for real estate investors. And we can talk about that more. But in terms of the forecast, you know, the last 21 years I've been forecasting the market, and my predictions have pretty much all come true except one major prediction, interest rates. I have been wrong about interest rates. Those are very hard to forecast.
Of course. Of course. I'm not going to try and do it anymore. Okay. Fair enough. But in terms of the market, this year is the hardest year ever to predict the real estate market. Why? Because there are so many wild cards. Trump is the wild card of wild cards. You know, the tariff issue, the construction workers, your prior guest was talking about that. That's right.
The average construction worker now is almost 50 years old. In the past, you know, it was guys in their early 20s, you know, framing houses. Nowadays, these guys have aged. They're all 50. And there is a giant shortage of construction workers. And that's going to make the supply-demand equation out of balance. That's going to push the price of housing up. These tariffs will push the price up.
There's a lot of upward pressure on prices and just general inflation and housing shortage. Right now, we have less than 700,000 homes on the market in the United States.
That is such a small number.
It's terrible. Yeah. There is a massive housing shortage. We should have about double to be just normal.
Yeah, I was going to say three and a half million.
Yeah, yeah. Well, you know, what you're going at is, it depends what survey you're looking at. So let me just dice that a little bit. So National Association of Realtors is probably what you're looking at. And their survey of inventory includes pending home sales and contingent home sales and actively listed homes. So I don't like their survey, although they have been doing it the longest.
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Chapter 6: How do tariffs affect housing prices?
But then, if you analyze it, after inflation debased the value of the loan balance and the monthly payment on the loan, both of them, right? They really were only paying 1.06%.
Over the 30 years?
Yes.
On average?
That's all they paid in interest. Yes. That was their true interest rate.
Based around the value of the home 30 years later?
Nope. Not the value, just the mortgage being debased by inflation. Inflation. That's it. Right? Assume the value just kept up with inflation. And by the way, you know, if you think real estate appreciation is going to make you rich, that's not as true as most people think.
Because historically, real estate only outperforms the consumer price index, the major, you know, determinant of inflation, which is bullshit, by the way. I call it, you know, it's the CPI. It's a made-up number. Yeah, I call it the CP lie, okay? Right. And we can talk about how the government manipulates that if you want.
But, you know, the real inflation rates probably double the consumer price index or at least 50% more at any point. Okay. If we just go, by the way, my example is just based on the CPI, which is understated, okay? So what was I saying there? So their payment and their balance got debased by inflation.
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