Joey Romero interviews Bruce Norris about his pending retirement (2024) and the new report and seminar. This latest report will be the swan song for Bruce and his legacy or market timing reports. Bruce has made a living on getting the market right for almost 30 years. Along the way, helping countless investors become very successful and changing the trajectory of their families. You will not want to miss this event and this show is a small taste of what Bruce will deliver.
Episode:
Narrator This is The Norris Group’s real estate investor radio show the award-winning show dedicated to thought leaders shaping the real estate industry and local experts revealing their insider tips to succeed in an ever -changing real estate market hosted by author, investor, and hard money lender, Bruce Norris.
Joey Romero Hi everyone, welcome to the Norris group, Real Estate radio show and podcast. Today we’re gonna be doing a very special show. As you all know, we will be hosting a seminar on June 3, What’s Next? A Lost Decade or 1% Interest Rates? This is billed as Bruce’s last seminar. With me today is Bruce Norris real estate investor hard money lender. I’m just kidding. You guys all know who he is. Alright, Bruce, let’s get into it. Bruce, you know, I’ve been getting a lot of emails and calls and questions and the one they’re really asking about is, is this really your last report?
Bruce Norris You know, I think so. I think so. Because I think that this is a longer term trajectory of what I see. So I think that’s probably true. There’s, there’s another thing, you remember, I talked about this one time going into a bookstore, and actually writing down that the titles of all the categories in the whole bookstore? And I was thinking about, Okay, what have I earned the right to write anything about for my fellow human being honest to goodness. And so this has been one category, that I feel like I have been able to share something of value with my fellow human being, I want to figure out what the next category is to be quite honest with you. And I don’t know what that is. But I’ve given this one my all, and it’s been a delight and I guess, you know, God, you never know, it could be something I see. Oh, I have to say that.
Joey Romero Well, you know, the follow up question I keep getting after that. It’s really a last report. Is he really retiring?
Bruce Norris Yeah, and I, you know, but I want to, I want to have another passion. And so I’ve really, I’ve really thought about, you know, really trying to think about what’s next, you know, one of the things that I’m passionate about speaking. So I would continue to do that, because I just get a big kick out of it. And it doesn’t have to be about statistics, anybody knows when I speak their stories, and there’s, you know, there’s the experiences that I had as a property buyer, and interacting with people, sometimes with their lives at stake. And you know, when you really realize that you realize, you can teach other people to be aware that this is more than just the house buying business. That was why the speaking was a passion to me, because I had that experience so early on that it was, it was very rewarding to not just think about how much money am I going to make the deal as, as it was, I could look across the table and see a person in distress and see if they can if I can get them past, this is a permanent state for you. You know, so I really enjoyed that. And that’s what I think maybe that’s what I brought to the property buying business is maybe a cleaner, better view of how to conduct the business. The charts, you know, that this came about, because I, I was an investor that flubbed up, honestly, I had that thing going on in 1988, where I had a chance to go and buy a bunch of lots of made a million bucks in six months. And I just thought this is the coolest thing ever. So, let’s build 7 custom homes and 89 get done with them and 1990 and basically gave it all back. And that was the first time it dawned on me real estate could hurt. And then, you know the example of Aaron’s car, you know, I buy him a Honda Civic. And then a couple days later, buy a three bedroom house for less. And you go like, okay, and I really just wanted to understand the cycles, and I figured somebody else had figured it out. Honestly, I didn’t ever intend to write a word on this thing. I intended to find out who wrote it. And I didn’t find.
Joey Romero Out that was actually going to be my next question is what gave you the most satisfaction in your journey? You know, and you kind of answered it. And so let me rephrase. My question is, do you feel better about helping people that you were buying from or are following like our clientele like your fellow investors?
Bruce Norris I love to both No, I haven’t sat across from an owner for a long time because our business model changed. So, that’s been a long time since I’ve done that. Which is interesting about the business model that we have is that it does change. So there’s times where you you’re buying directly for people, there’s times that you’re buying REOs. And ever since that REO patch, we bought a trustee sales with Greg at the helm and we built houses. And so that’s what’s nice about having different skill sets in this business. But definitely both have been great passions, but I get the biggest kick out of helping. You know, I was on food stamps at one time. I wanted to help that guy. I wanted to help us as to, you know, I wanted to create heroes for families, that’s the fact, I’d never occurred to me until I saw an example. You know, last year, when I was speaking in front of that big group of real estate investors, what is the name of their group?
Joey Romero Oh, man, you’re gonna put me on the spot.
Bruce Norris That’s okay. I’ll think of it while I’m talking about it. These guys…
Joey Romero The Collective Genius.
Bruce Norris Collective Genius. So they spend big bucks to be part of this group. And I was there as their keynote speaker. And I observed something that was inspiring. They, they had a guy that’s got up and said that he was involved with helping kids get out of the, you know, sex trafficking racket. And on the spur of the moment, the guy that was in charge, he said, let’s see if we can raise the money for him. By show of hands, each finger’s a grand. A few minutes later, 340 grand was raised. And I’m getting a little emotional because I got emotional that I thought this is in real estate. This isn’t a real estate meeting. This is you guys are teaching each other to be heroes for your family. I mean, how cool is that? And so yeah, that’s what I wanted, I wanted to be able to share what worked for me got me out of the hole and then made me, you know, financially successful. And, you know, there was always the pull to be in a bigger direction. Because of, you know, Aaron, when he created those documents that were so great. You know, the guy that was a promoter that was teaching people to run to the back of the room when I hated that model. You know, he got out he said, well, at least send me your materials. And I think we wrote this in the in the promo piece. At least send me the your materials, let me help there. And it was the best recording. You know, it really was one of the best recordings ever. He said, Bruce, I got your materials. Oh my God. In other words, there’s nothing like this. Yeah, I know. And do I want to go to Wall Street? No. You know, I just want to help the guy like me.
Joey Romero I just had a conversation yesterday with one of the founders of BB. And, you know, he was just like, man, like, I don’t understand how you guys don’t have a, like a 5000 you know, attendee limit, because this should sell out immediately. And everybody in the world should be at this event. You know, as a matter of fact, we don’t promote we don’t you know, there’s we’re very strict about no sales, nothing, but send me something because I need to get something out to all BB saying, Hey, this is the ‘Do not miss event’ this year. You know, and it was somebody that you’ve spoken to, you know, for three years. And he’s like, man, Bruce has been so generous with his time, his knowledge that this is the least I can do is just send an email or a promo put on my LinkedIn, whatever you need me for me, you know, but that’s the kind of impact that you had had on our clientele. And it really does feel like a family reunion. Whenever we do these things.
Bruce Norris Yeah, it’s pretty cool. It is. I love seeing that man. Frank, you have people trying to get like, Okay, I hope he comes because he’s gonna sit over here with me and all that. It is it’s a lot of fun. It’s so rewarding. You know, the last, probably the last 15 years, it’s really been challenging for our industry, because big money has shown up. So you know, this was in 2009, I was invited to a dinner, a three hour dinner with the 10 largest hedge funds in the world. And that was an interesting meeting. First of all, I really didn’t know what a hedge fund was. That was the truth. And so I said that to him. I said, be honest with you. I don’t know what you guys do, what hedge funds do. It’s probably the best thing I could have done because honestly, it it made them at ease, knowing that I wasn’t there to be so sure. But you know, they offered me a lot of money and I just didn’t want it. And a couple about a year later, I’m speaking. Yeah, maybe it was almost the same year I was speaking in front of a big crowd. And guy comes up to me and he says, I said I love your company. Love what you guys stand for. He said, I really feel sorry for you. And I said, really? Why is that? He says, Well, there’s no way you’re going to be able to stay in business with Wall Street as competitors. And you know what kicked off to me, you know, that pissed me off and so I reached for business…
Joey Romero That was in Pomeroy. I’m aware.
Bruce Norris That’s right. I reached I reached a wallet and wrote down my phone. I’m handed him a card and I said call me in five years, I guarantee you, I’ll pick up the phone.
Joey Romero Before we get going on talking about some of the things that we’re going to talk about that Saturday, I wanted to ask, What do you like in the education space right now?
Bruce Norris Ah, you know, oddly enough, I haven’t been to almost any real estate trainer stuff. who I respect is who we’ve given the Rohnny awards to that group of people is unselfishly given of themselves. That’s why they have the reward the award because it reminds me of what Jim Rohn did for me. Now, it’s specific to real estate. But if somebody is holding that award, it means that their reputation is, is just unbelievably great. And that’s what that’s about, you know, it’s on selflessly giving to your fellow investor. So you know, it’s kind of cool that there’s a pack of Florida, people that have that trophy, because they’ve always been kind of the All Stars that were invited out to both coasts, and, you know, just getting a chance to know them personally a little bit. It’s been great. But that’s, that’s where I would have, I would start is with those people that have that reputation. And nothing, they don’t need anything from you. I love that, you know, they don’t, but they teach for the right reason.
Joey Romero You’re gonna be meeting with Jonathan Gross, this week of Fannie Mae. Now, he’s listed as the VP of Business Strategy and transformation. That’s a little different. You always, you know, talking to the CEO, or, you know, Doug Duncan, what do you think this means about?
Bruce Norris I don’t even know if I’m going to say this.
Joey Romero Oh, I got you.
Bruce Norris I know what’s a valve? But I don’t know that. I don’t know that I can say, this is non taker or keep it that way.
Joey Romero Will you be able to say about later?
Bruce Norris Yeah, absolutely. At the seminar, I’ll tell people why I went there.
Joey Romero Okay. That’s a perfect little tea. So there’s so you know. It’s not a tea, that’s the truth. I don’t think I have the freedom to say that it’s sort of hush hush what they’re planning, and I’m part of directing what they’re going to do. Wow, wow. That’s a huge tea. I don’t mean that you’re not going to deliver. I’m just saying it’s a tea for for being there on June 3, you gotta want to hear this.
Bruce Norris Okay, that could be.
Joey Romero So let’s talk about some of these chapters. You know, I was looking at the whole chapter list today, and I wanted to talk about a couple of them. So the first one I wanted to bring up was the installations impact on real estate?
Bruce Norris Well, you know, I was so fortunate, when I wrote the first report, I ran across this report from CalPoly Pomona construction report. And I didn’t know what their clientele was, but it was every builder in California, and they had just the coolest set of statistics that weren’t available anywhere else. So, I had gone into the library and hand written with with a notepad you know, any any topic I thought might be a value, I wrote it down the history of this stat, and would make a chart of it later, but they had unusual statistics that no one else had and it was really cool when it kind of it kind of wrapped up my body of work for that time, okay. Michael Kearney was very generous. And I just really liked that he allowed me to look at the stuff and talk with me. So, I sent him a copy of the report and he invited me to speak in front of his clientele. I had no idea that was every major builder in California and the president of Fannie Mae and so forth. It was like crazy in the audience. And it was in San Francisco with the, my podium behind me was like a 40 foot piece of glass looking at the San Francisco bridge. But here I am telling him titers are going to double and we’re flat on our back and had been for four or five years. So everybody’s happy I said it but you know, no one believed it. But at any rate, what happened then is I built a relationship with Michael Kearney. Now, what I didn’t know is he had a vault. I mean, literally, double vault where he had old copies of this report going back to the 70s. And he said, I’ve never let anyone do this. But I think you might really find that interesting. So I go into the ball that nobody’s ever been in.
Joey Romero …..Willy Wonka.
Bruce Norris I was like, Yeah, well, what was so cool is somebody thought about okay, why don’t we trace the cost of the same home during the 70s inflation and so they got the same plumber and supply cost for every category. It’s, it’s great. So it really is this journey of the 70s inflation attached to a house that’s being built, and the labor per process. It was awesome. And so I mean, that to me, it was. And then, of course, you know, one of the things they also have is they have a price, a median price for the existing home, and a median price for the new home. Well, they intersect every once in a while where the existing goes more expensive. And it really taught me Gee, when I, when I own a real estate piece of real estate, I own a basket of commodities, I my wall become becomes more expensive than the NAR’s. That just was so fun.
Joey Romero And so so the stats, there are seven years sent in, because that’s what inflation, you know, did in the 70s. So the new inflation was…
Bruce Norris Wait a minute, they actually stopped doing the quoting of that house for after 77. So, but there was other there were other charts that went all the way through the decades. So, not there to interrupt you. But anyway.
Joey Romero But what was going to say is that now, inflation, you know, it wasn’t a seven year ramp up for us. This happened very, very quickly. And so we’re actually going to be able to share some interesting statistic that jumped in those 18 months, right?
Bruce Norris
Yeah, it was so cool. I mean, you did such a good job, I had to do a page of here’s the numbers, and you expanded into 20 charts that were so cool. I mean, honestly, that made my day yesterday. Yeah. Because, you know, that’s one of the things about when you write reports, there’s going to be some categories that are the same because of necessity, they’re going to have an extra year, what you did was say, oh, isn’t that interesting? Look at what happened in an 18 month period of time to the cost of building a house. And, and I mean, parts and labor, basically, you know, in different categories and permits and all that stuff. So no, that’s a big addition. And I was so glad that we were able to you were able to do that in such a good visual, you know, I got pretty jazzed and I saw that.
Joey Romero I was just when I sent it. I said, Oh man, I hope he loves it. I just spent two hours doing this.
Bruce Norris No, it looks it looks really good. But you know, it also lends credence to the same process. You own a rental in 2020. By the time 2022 came,our walls kept up with webinars. Now it’s cool.
Joey Romero Yeah. So one of the other chapters that we’re going to talk about is the Fed policies and how they impact is banking.
Bruce Norris Yeah. Yeah, I don’t think that dominoes over yet. You know, the I mean, if you look at my desk right now, honestly, there’s about three feet of paper that I keep on printing reports, or you send me reports and I print them? Well, I just looked at a report, it’s over my head, to be honest with you. And many sometimes that’s true. But it’s a report from basically some mathematicians that got together and looked at the price damage to the mortgage sector. So, you’re holding a mortgage in your portfolio that pays two and a half percent for 30 years. What’s that worth on the open market? There’s trillions of dollars of damage to the people that hold that paper. And that’s what’s starting to be a problem is because people are being afraid. And they pull out billions of dollars in a tight timeframe. So, if there’s bad news about a bank, whoa, to pull deposits, well, then what happens is these banks and we have a chapter about that, and an actual watching how it plays out. Where if you’re forced to sell one of those assets, so like a 10 year T-bill, you know, 10 year T bills were under 1%. For a while well as a as a bank, you’re obligated to hold a certain percentage of very safe assets. So, you put a whole bunch of money and that type of thing. Well, when 10 year T-bill goes to three and a half, what’s your 1% 10 year T bill, cuz you’re missing two and a half percent a year and it’s 10 years long. It’s a big hit. And I think, you know, when auditors came in, I think that was the problem. You’re valuing this at face value, and it’s not. And so, you know, for a individual bank tensive maybe even more than that. 10s of billions of dollars disappeared in value and put them upside down. And you know, that’s the thing that’s not over. That’s, that’s it. That’s one of those, you know, we have the one chapter at the end of wildcards. That’s a wildcard that is really a wildcard.
Joey Romero And the last one I want to talk about is family budget. I think this is something that is on everybody’s all of America’s mind right now.
Bruce Norris Yeah. Well, you know, last year we talked about, but here’s the math, it’s it’s going to be, it could be a lot of damage, the one thing that might occur is people will stay in their home. Okay, so you really have two categories of people, right now, you have people that own and have a mortgage and two and a half, or 3%. Or you don’t. So it’s going to be very interesting to see. So, one of the things that we had to figure out is, that group of properties, is probably going to be more stationary than any group of properties ever as far as owners if they can, if they can stay there. So we know that history tells us that foreclosures are damaging to price if they get to be a certain participant. So, we’re assuming that’s not going to happen this time. So, what’s the category of have to sell stuff? So there’s a chapter about that, but one of the problems is the family budget is if you don’t have a fixed loan, on your house, you have a variable rate rent. All right, all of us appreciate that. We can raise rents on you. Okay, and we have a lot, okay. So, we have that, if you have credit card debt, it used to be really cheap. Now it’s not. You had student debt, it just there was a there was a moratorium on payments for two or three years and now it’s not. So this budget has to go forward and buy a home at a six and a half percent mortgage instead of a two and a half. Well, that’s what that chapter is about is analyzing how many people are going to actually be able to afford the next house. And so that’s one of the reasons we have a chapter of we haven’t even compiled it yet, is who’s the buyer? Because that’s kind of a key, because there’s going to be diminished demand, because of this capacity. You know, you’re just you’re either going to maybe say, Okay, now, I mean, everybody does this, and the first time you bought a house, I rented a part of a duplex in Orange County, I couldn’t buy in Orange County. So I was willing to drive 40 miles to Riverside, and work in Orange County, so that was normal. So I could buy a house in Riverside that was bigger than what anything I could afford in Orange County. Well, that’s what people will do. They’ll either, you know, builders, you might see builders building 13, 1500 square foot homes again, where they go, okay, well, this is the price range that people can afford, you know.
Joey Romero It makes me think that you know, the same bank for your buck. Like it’s more like a third for your buck now.
Bruce Norris Yeah, well, it’s because we’re spoiled, you know, that, see, that’s, that’s a that’s a significant statement. We would we now think 5% mortgage money is expensive.
Joey Romero Yeah.
Bruce Norris And, and that’s, you know, as part of part of me, when I do this presentation, I am going to take a little time talking about what happened when you were a participant at these levels, because I was, you know, the whole time. And so, yeah, real estate, well, it took for me to be a full time real estate investor, we had bought a home on it, that was a deal. And then we fixed it really nice. There was a $5,000 loan on it that I did pay off, because it was at four and a half percent. And so I just had to leave it there. But then when I decided to become a full time investor, I refinanced at 17 and a half. And, you know, I just, my payment was 1260 bucks, I think for 76 grand. And, you know what’s pressure is when you’re when your wife is crying when she signs the one ducks. That’s pressure.
Joey Romero Yeah, for sure. So, you know, why do you think it’s important for real estate investors in California to be at this event?
Bruce Norris Well, I think first of all, it’s a journey through the history of what’s happened. And to be honest with you, I think that we’ve done it better than anybody as far as figuring out when the turns come. So to me that’s really important because you get you can get hammered missing and turned down and you get very wealthy understanding that a turn up is about to occur. This cycle is different If it really is, we should have 40% plus hidden price. That’s the math. So really, that day is about okay. So far, you know, the 20 properties that Rick’s Elise says, as a brace all that.
Joey Romero That was really interesting.
Bruce Norris 2Yeah, that was really interesting. So, we’re not gonna spill the beans on that. But that kind of surprised me in a way because, okay, that’s interesting to date that’s the damage. Okay. But that doesn’t negate what could occur. You just need a big enough group of properties that have to sell. So there’s a whole category that we’re going to talk about, okay, you could get unemployed, etc. So, there’s all kinds of categories that are going to tip into and add to the properties for sale. And if they come have to sell properties, in quantities that mimic the 90s or the 80s or 2006, well, you’re going to have a very different result.
Joey Romero On and that catalysts could turn damage into a crash, or something that would mimic a crash, right?
Bruce Norris Yeah, that’s all you need. Now see, think about how little has to occur? Your sales volume in California, let’s say during, you know, regular good years 400,000? Well, now we’re saying 250 would probably be maybe where we’re at? Well, if 40% is the point of significant damage starting, you only need 100,000 total houses out of all the inventory in California that says I have to really sell well, if you have 400,000 sales. Well, that’s a different that’s 160,000. So the smaller number of sales, it lends you makes you very vulnerable to problem categories, you know, and so.
Joey Romero Never I thought about it that way.
Bruce Norris Yeah. Well, that’s, that’s my job.
Joey Romero Okay, so, you know, we’re getting pretty close to that half an hour mark. I’m gonna ask you this. The one last question. And the one that I wanted to tell you ahead of time, but can I get a raise this year? I’m just kidding. I’m totally kidding. All right. Here it is. Are you going to make a prediction on June 3?
Bruce Norris Absolutely. And I appreciate. I appreciate that question. Yeah, I’m going to make a prediction, I’m going to take a side. I’m also going to say some pretty stark things, as I end that, cuz I’m thinking, Okay,this is the last time. So this, some of those start comments are not so much about real estate, and, and more about direction. And so it’s interesting, you and I just discussed the cover.
Joey Romero Yeah.
Bruce Norris And you wanted the you wanted the light.
Joey Romero Can I share that, and give them a sneak peek?
Bruce Norris Yeah, sure. Absolutely.
Joey Romero Let me share my screen so they could see what we’re talking about. Sorry, radio fans.
Bruce Norris Can you see it, Bruce?
Joey Romero I cannot. Oh, there we go.
Bruce Norris So Joey, and my discussion was about putting the light on the right hand side of the report, because that seems to be the positive result. And part of what I’m going to talk about is that we better look at the long term, we’ve got to hand something off to our kids, where they have the same future as we do. We go to 1% interest rates. And I’m not saying we’re not going to I’m not going to tell you what my prediction is. But I am hoping that we step in front of whatever we need to, to make sure our kids have a future that we had. That’s for sure.
Joey Romero Well, I can tell you that my kids are really excited about being you know, homeowners and buying, buying homes, you know, they’re planning on having, you know, really, you know, interesting careers, one’s a pilot, the other one’s gonna be a doctor, you know, but, but they’re looking forward to the real estate side, just because of, you know, they see how, you know, what, what impact Aaron had on my life, you know, the impact that you’ve had on my life, and you know, and moving forward, so they all want to be landlords, and they all want to be real estate investors too.
Bruce Norris You know, I just never forget the day when I cut my own grass for the first time. I mean, that memory can be very emotional to me, because when when I write this report called the California crash, at the time, I’m living in a $1.2 million house knowing it’s going to go down by half, and I don’t sell it. And why would you not do that? Does that make any sense? Well, yeah, it did because my priority was Was that inside of the walls of that house, I get to do whatever I want. That was more important to me than saving 600 grand, really was. I sold that for 720 I think and could care less?
Joey Romero Well, I just want to address a couple of things. You know, we’re getting a lot of emails, phone calls, and even in the chat today, you know, folks that have vacations or you know, graduations because it’s around that time. You know, they’re asking if we’re going to record and will the report be available? Absolutely. Yes, we will be recording the whole day you will get access to it probably about a week later, we will mail you your report that following Monday, so you won’t get it ahead of time. But, but unfortunately, we will not be live streaming at the same time. It’s just, you know, too much can go wrong. And we you know, we want to make sure that we focus on the folks that are there in the building and produce the best product that we possibly can. So there’s there’s gonna be a great day. Some interesting like you heard from Bruce and there’s also going to be some you know, some news probably about you know, the rest of the year for us and what it’s going to look for the Norris Group going forward.
Bruce Norris Okay.
Joey Romero Thank you, Bruce. Thank you everybody for being on really appreciate it. And we’ll see. You get you guys can catch if you if you join late. We’re going to put on the radio show. So you’ll see, you know, this weekend probably.
Bruce Norris All right.
Joey Romero Thanks Bruce.
Bruce Norris Have a great day. All right. Bye.
Narrator For more information on hard money, loans and upcoming events with The Norris Group, check out thenorrisgroup.com. For information on passive investing with trust deeds, visit tngtrustdeeds.com.
Aaron Norris 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.