Jon G. Sanchez, CEO: Good Tuesday afternoon to you. Welcome to the Jon Sanchez Show on News Talk It's a pleasure to be with you and a pleasure to be with one of my two co-hosts. Not saying he's not number one. Aaron Clark of Israelity, how are you my friend? Good buddy, good. Do I, beyond it is, you know, you think when you do this, as long as I've done it, Aaron, you think you've seen everything and I tell you, ⁓ every every, yeah, day, it's like,

Aaron Clark, Edge Realty: I'm doing great. Your world's doing crazy. No one's seen this.

Jon G. Sanchez, CEO: just, ⁓ think my biggest frustration is like common sense does not prevail anymore. And it's because of technology that we're dealing with, the algorithms, the quant trading, all these that have no rationale to them. I'm gonna give you a prime example. Now that you've got me on my soap box, gonna ⁓ give you prime example. All right, so.

Aaron Clark, Edge Realty: Mm-hmm. Yeah, give one.

Jon G. Sanchez, CEO: We go today, right? We start things off. Going back to my notes, were down, when I did my first update at 523, we were down 108 points. Right before the market opened, we were down 365 points. I'm talking about the Dow futures, right? Ugly open, pretty simple. Oil prices were through the roof. Oil was up over $3 a barrel. Gold was up just a little bit. Bond yields were skyrocketing. Everything was going on, right? That was negative for the market. Market opens up, it dips a little bit, and then all of a sudden, it reverses. And I'm scrambling. I'm looking at every new source that I have, making phone calls, trying to figure out everything as to why. Nobody knew anything. The algorithms, there were something that happened, and the algorithms took off. I'm like, this is making absolutely no sense. And Aaron, we closed with oil at $4.10, $9.29 a barrel. We hit very briefly overnight $100 oil. Now remember, we lost almost $10 yesterday. right, and on Trump's comments. it rebounds today. In my first update this morning, I said, I got to be real honest with you, Ross. I said, I'm skeptical of what the president said yesterday. Not that I'm saying he's lying or anything like that. I'm skeptical. And I said this on the show yesterday. I just don't see, I think we are in, meaning this war is too deep for all of a sudden just to say, yeah, we're having a few phone calls and everything's hunky dory. And boy, the world's just going to be. ⁓

Aaron Clark, Edge Realty: Mm-hmm.

Jon G. Sanchez, CEO: know, kumbaya again, it's not going to happen. There's too much damage. There's too many lives, unfortunately, of course, that have been lost. Too much money has been spent. You got $200 billion trying to get approved by Congress to spend more on that. So you have all of these negatives. you have to sit back and you go, well, wait a minute. The only thing really positive yesterday that happened was you had the president come out and say, yeah, we've had conversations with Iran over the weekend. looks like a deal is imminent. We should have no something. And by the way, I'm going to bump up until the end of the week this massive bombing that the world has said if you bomb their infrastructure, their utilities, and plants, the desalinization, and all the infrastructure of the company, it's a war crime. And so many are saying that's why he backed down, that he needed some way to get out of this mess a little bit, and that he fabricated the story that, yeah, we were having all kinds of great discussions twice yesterday and even this morning. Iran came out and again, take it for what it's worth. You you don't know who to believe anymore. Iran said, no, we've had no discussions. You've got a few countries like Turkey and a few others that are kind of playing middleman, but you got Jared Kirchner, Kirchner, Kirchner trying to, you know, I guess he's the new, you know, world broker dealer, his son-in-law, know, trying to broker this deal with Iran. And you're just going, it make any sense, you know? ⁓ And we continue watch that. And then again, this morning, overnight, I wake up at three o'clock, I'm checking the futures, checking oil prices, and they're through the roof. The futures are down and oil prices are through the roof. And this is what I said on the show yesterday. I'm skeptical. Be very careful. Don't judge that this thing is all behind us just on one day's trading action because yesterday was the algorithms again, right? you know, you know what, Aaron? I'm going to let you explain how algorithms work because the is probably sick and tired of me telling them, you're a tech guru. You explain it. Let's hear your explanation.

Aaron Clark, Edge Realty: I'm

Jon G. Sanchez, CEO: how computer trading algorithms work.

Aaron Clark, Edge Realty: Well, I mean, the simplistic or explanation with algorithms is the computer basically, it's kind of like stop losses, right? The computer does that, but it creates it ⁓ a five dimensional format. So where we would look at, let's say a stock and say when it reaches a certain price, we want to sell or we want to buy. And so it's, it's one dimensional ⁓ an algorithm. It's five dimensions. So it might be price.

Jon G. Sanchez, CEO: analogy.

Aaron Clark, Edge Realty: but it also might be futures. might be based, let's say for AI, for example, if you were looking at an algorithm on AI, it's gonna base it upon multiple aspects, cost of oil, chips of Taiwan. So you're gonna take all these other, yeah, inflation, future tech companies, evolutionary discoveries in technology. I think Nvidia out today and said that they officially have figured out AGI, which is,

Jon G. Sanchez, CEO: inflation levels, bond yields.

Aaron Clark, Edge Realty: artificial general intelligence, where now artificial intelligence has the ability to act and think just like a human. So that algorithm right there is going to take that information and then speculate there forward and decide what it wants to do based upon whatever inputs it has.

Jon G. Sanchez, CEO: Yeah. human. Yep. Yep. explanation. Better I've explained it. I've never thrown in that word five dimensional, ⁓ but going to say five dimensional, you know, times a because that's what an algorithm can do. Right. And as I've always emphasized, Aaron, every trading firm out there, ⁓ whether it's individual or a multi trillion dollar Wall Street firm, ⁓ they all their own algorithms. Right. They're ⁓ not doing same thing because

Aaron Clark, Edge Realty: Yeah. See ya.

Jon G. Sanchez, CEO: They get their analysts and go, okay, Mr. Analyst, the program says, okay, Mr. Analyst, tell me what would make oil prices go up, right? And the analyst goes, well, let's see if there's flow through the Strait of Hormuz, if this is going on. ⁓ he gives the programmer a list. ⁓ then he goes to the next trader and says, ⁓ what would make the Dow Jones Industrial Average break the 200-day moving average? The analyst goes, da-da-da-da-da-da-da-da. And are the programs in there. so here's the that's exciting, folks, and ⁓ can be It's not static, right? It's dynamic, right? Because the markets change, the economy change, the world changes day by day, hour by hour, minute by minute. So these algorithms have to adjust. we said coming into this year, we said, actually, let me back up, January of 2025, we said, look it, with President Trump coming in, that was after, of course, we knew that he won, with him coming in, ⁓ be for volatility. Because you don't know what he's going to say. We got a taste of that in his first term. ⁓

Aaron Clark, Edge Realty: Yeah.

Jon G. Sanchez, CEO: That's when, of course, you had Twitter, right? And so he would make just one comment on Twitter. Now it's true social. And the algorithms will go nuts. Their program, if he says this, this, and this, then the market does this, or a certain stock does this. now you've got him, of course, all long, every single day, saying this or that, or someone in the cabinet saying this. And these algorithms just go nuts. And so human logic, the point I think Aaron and I are trying to get to with everybody is Human logic no longer makes sense. Human logic says, well, like today, this market should have tanked. We lost 84 points on the Dow. Big deal. mean, was nothing, 0.18%. You got it. You got it. yet the algorithms are programmed for this or that. I we finished up, like I said, $4.10 a barrel. If look back on some of the other days, as this conflict evolved into almost a month now, we're in the fourth week.

Aaron Clark, Edge Realty: last two weeks the market should have tanked.

Jon G. Sanchez, CEO: There's days where oil is budget a lot less than that and the market tanked, right? So realistically, Aaron, a $4 gain in oil prices probably should have equated to well over 1,000 point loss on the Dow. Now, here comes human logic. You go, OK, but we lost $9 a barrel yesterday. So now we're still roughly $6 or $5 and some change ahead of where we were yesterday. But we're still historically high, right? $92.27 a barrel.

Aaron Clark, Edge Realty: Mm-hmm. ⁓ yeah.

Jon G. Sanchez, CEO: That is a historically high number when we're, know, everything is programmed for oil around the mid 70, low 70 to mid $70 range. So here we are $20 plus above that. Now, the other thing that's going on, Aaron, and I know you're aware of this, is you're now getting a lot of, I mean, there are of all positions, whether they're a global economist, a global Wall Street strategist, whatever you want to call it, men and women that have done this for a long time going, We've got about, well, I'm hearing any projection from two weeks to two months that if this thing doesn't get handled, we will be in a global crisis. a global recession, but a global crisis because of higher oil prices. So know that weighs on the president and his strategies and what he says and ⁓ does so on and so forth. So again, just, again, another, I I've said this a million times this year, another bizarre trading day today that Thank goodness. we only lost 84 points on the Like said, I'm brushing my forehead now. If you can't see me, it's like we made it out of this one OK. ⁓ So yeah, was crazy. was But then you go to the bond market side, Six basis point increase on the treasury, 439. Now here's what was interesting yesterday. I wish Dwight could have been on the show and you yesterday because bond yields plummeted, right? ⁓

Aaron Clark, Edge Realty: Yeah. Yeah.

Jon G. Sanchez, CEO: which is what they should do in a day where the market rallied, you know, again, Dow up over 600 points. today, they're selling the bonds, right? Here's come irrational. Markets in turbulence, oil prices up $4. What should they be doing? ⁓ should be buying the bonds as a safe haven. Instead, what were they doing? Selling bonds, ⁓ drove yield up to a yield of 439. So I'm fearful that starting to get back into this trend where we were a couple ago where

Aaron Clark, Edge Realty: Yeah. Selling.

Jon G. Sanchez, CEO: nothing made sense, right? It's almost like you would do opposite. You get bad news, market goes up. You get good news, market goes down. It's the market is, and let me tell you folks, if you as an individual retail investor are confused, you're alone. The brightest in the world, and again, this is because this is a global issue, the brightest minds in the world, Aaron Clark, are confused, ⁓ confused as else. Everybody is just absolutely speculating right now. what's going to happen next, right? From the war standpoint, then transpires into, obviously, oil prices, which then transpires into the stock market, transpires into your world, the world of rates, and so on and so forth. a lot of moving parts. Now, me tell you real quickly what Aaron and I are going to cover. Who knows? We may just start keep wrapping like this. I enjoy this conversation with you. I really do. We're going to get into cash flow for rentals. But we're going to take this one of

Aaron Clark, Edge Realty: you

Jon G. Sanchez, CEO: We're gonna make it really simple. We're talking one property. We're talking your personal residence. Yes, you can make cash flow on your personal residence. We're not talking about going out and buying five or 10 rentals or a of duplexes, fourplexes, whatever the case is. We're gonna focus on your home. Aaron's got some great strategies that I'm really excited for all of you to hear about. ⁓ we'll cover that, but first, Aaron, when we come back, ⁓ do wanna cover a Bloomberg story that came out just a little while ago. very fascinating about, unfortunately, some more US troops that are on their way to Iran. So again, you kind of sit here and go, yeah, this thing is going to be ending in the next few days, as the president said yesterday, and he did say, I don't make any promises, you wouldn't be sending 5,000 US airborne, 82nd to the Middle East. So that's what happened today. So we'll cover that. Let's turn it over to Kristen Snow. She's in the Wonderful, ⁓ well, she's wonderful. in the Right Now Traffic Center.

Aaron Clark, Edge Realty: Yeah, I saw that.

Jon G. Sanchez, CEO: How are you, Kristen? Welcome back to the Jon Sanchez Show on New Stock 780k. I'm with Aaron Clark of Edge Reality. Mr. Millard has the afternoon off. Once again, here's how we finished in a... Again, bizarre. Wiped the sweat off my forehead. Shocked that we only closed down 84 points on the Dow. Closing levels 46,124. NASDAQ, a little bit worse. Down 185.84 % and the S &P giving up 25 points, closing at 6,556. Actually pretty good on the Russell 2000. Up almost a half a percent, 0.45 to be exact. Once again, oil prices skyrocketing. $4.10 gained 92.29 a barrel, gold down $6.20, 4,401, and a six basis point increase on the 10-year treasury at a yield of 439. According to Mortgage News Daily, boy, I'm sure Dwight's not smiling today, Aaron, six basis point increase on that 30-year mortgage at 6.55%. 6.55%. Couple more weeks of this, we could hit that seven mark. It's right there. But you know, before I get to this Bloomberg story, Aaron,

Aaron Clark, Edge Realty: ⁓ yeah.

Jon G. Sanchez, CEO: You were mentioning something very interesting to me off the air. And he said, it's kind of business as usual. You're not hearing any concerns from buyers and things that they're worried about this or worried about that. And ⁓ and I were joking. I said, yeah. that's human nature, right? No one worries anybody else, or especially somewhere as far away ⁓ as until it affects them, right? And whether there's you know, God forbid something happens to us in our country or cyber attack or something, or the markets tank and their 401k goes down, then they're gonna feel it. But that's kind of what you're seeing at this point, right? No concern.

Aaron Clark, Edge Realty: Yeah, absolutely. I I mean, what you're saying as far as attacking people directly in their pocketbook is totally true. But also things are moving at such an incredible rate that I'm not even sure the news sort of has trickled to the water cooler yet as far as how it'll impact people that are currently shopping, currently getting their house ready to put on the market. I mean, we might not actually be seeing the result of that.

Jon G. Sanchez, CEO: I I agree. I agree.

Aaron Clark, Edge Realty: until a couple more weeks from now. like with groceries and things like that, we're probably not seeing the impact of the increase in price quite yet. It's gonna hit soon.

Jon G. Sanchez, CEO: You alright? Sure, oh yeah, no, at all. Mm-hmm, mm-hmm, yep, you're right, that's a great point. Okay, let me share with you a story. Aaron actually saw this earlier today also. So it came out, this is from Bloomberg. It came out at 1.39, our time, so not too long ago. All right, buckle your seat belts, this is not a good story. It says the US is preparing to deploy more troops to the Middle East as the war with Iran drags on. The Pentagon plans to send around 3,000 soldiers from the Army's elite 82nd Airborne Division to support operations against Iran, according to the Wall Street Journal today. ⁓ decision to put boots on the ground in Iran hasn't been made final yet, the official said. Either way, the move would be a significant shift in the conflict, which has largely been an air campaign. As US troops head to the Middle East, President Trump has increasingly looked for an off-ramp of the war. Trump signaled ⁓ that had offered a quote, present as a show of good faith and negotiations. while he wouldn't detail the gift, he confirmed it was related to energy flows through the Strait of Hormuz. Overall, there remained broad uncertainty about who the US is negotiating with, the structures of the talk, ⁓ the outlines of any potential agreement. ⁓ Iran and Israel have showed no signs of letting up on the conflict. I'll right there. Aaron, I'm sure you saw this. Many, many missiles were fired, both. in Iran and against Iran and against Israel overnight. That's the thing that's got me concerned also is if in bed with Israel on this thing, right? We're supposed to be working side by side, hand in hand, why would Israel be firing aggressively the missiles, right? ⁓ If, yeah, if...

Aaron Clark, Edge Realty: Yes, I've had that thought many times, yeah.

Jon G. Sanchez, CEO: If Aaron and I are negotiating a house, the last thing I'm going to do is go Agus house, right? I'm going to be, I'm going to be really, I'm to bring you some cookies. I'm going to be a really nice guy to you. Yeah. And so that, that part's got me really, really confused. Okay. So let me go back to this, to this Bloomberg story. This is where it also gets very interesting. Despite overtures for negotiations, there are some warning signs. The conflict could explode into much larger regional war. The New York times reported that Saudi Arabia's crown crown prince is pushing Trump.

Aaron Clark, Edge Realty: Yeah, exactly. Please don't.

Jon G. Sanchez, CEO: to stay in the war. told Bloomberg the region's most powerful states, Iran rival Saudi Arabia and the United Arab Emirates in particular, are losing patience with Iranian strikes that have been hitting energy facilities, and airports. But those states would only join the war if Tehran makes good on the threats to attack vital power and water infrastructure, a high threshold. ⁓ So me stop there. So this is, again, the other issue is you Saudi you take the UAE. ⁓ And they're like a punching bag right now, sitting back every day. There's barrages of drones and missiles that are hitting them. ⁓ again, starting to hit, ⁓ go to Qatar again, the big story last week where it one of the largest, it is the largest natural gas production facilities in the world ⁓ hit one of that plant. So you're not seeing any retaliation, at least that we know of maybe on guerrilla warfare side, but you're not seeing any retaliation by UAE, by Saudi Arabia, cetera.

Aaron Clark, Edge Realty: Yeah.

Jon G. Sanchez, CEO: I've wondered about this. That's why I want to bring this story up because it's like, okay, so this is the case. They're tired to be in the punching bag. They're telling Trump stay in the war. Meanwhile, this is interesting. If there's one clear winner from the war, it is Russian president Vladimir Putin. The Kremlin is earning the most from its oil exports since just after its troops marched into Ukraine in 2022, boosting crude flows amid soaring prices and these sanctions. Russia's oil has been heading down while Putin has warned that the windfall will be temporary for now. Moscow's own war chest is getting a big boost. Take a guess, Aaron, how much money Russia is making at these oil levels. Take a guess how much they're making a day.

Aaron Clark, Edge Realty: I'm sure it's billions.

Jon G. Sanchez, CEO: I would thought so, but $270 million a day Russia's making. Up from 135 when oil was down in the $70 range. So think about this. Let's apply very quickly some logic. All right, so you're Putin. You're going, okay, my economy's kind of been decimated with this Ukrainian war. I was making $135 million a day in my oil exports. Now I'm making $270 million a day.

Aaron Clark, Edge Realty: ⁓ okay. That's crazy. Yeah, over double.

Jon G. Sanchez, CEO: Am I going to supply Iran with? some missiles, some more ability to keep these oil prices, well, bottom line, to keep the oil prices up, right? again, we wanna know, could this be a situation where China may be doing the same thing? mentioned the you were talking about over the break with me, all fair, real quick, about China.

Aaron Clark, Edge Realty: some more ability to create chaos. Yeah. ⁓ Yeah, I was talking about how a lot of the reports that are coming out of China is that they're kind of, you know, buttoning down the hatches because they are in a complete state of running out of oil and self oil time periods because they get most of their oil out of the straight ahead. So, yeah, so they're not there. Their inflow is ⁓ pretty much at this point. So I think

Jon G. Sanchez, CEO: 90 % 90 % of the oil. You got it. You got it.

Aaron Clark, Edge Realty: It could be that affects them far deeper than anybody realizes and time will tell.

Jon G. Sanchez, CEO: Yes, it's not getting your spot on. It's definitely not getting enough press coverage of what's going on in China. said this a couple of weeks ago, they're ⁓ long gas lines. They're rationing that of it. So once again, every if you on the show, takes me the first half hour of the show just to bring everybody up to date on ⁓ just talk about oil what happened today or the last 24 hours since we were on the show.

Aaron Clark, Edge Realty: No. Just to talk about oil.

Jon G. Sanchez, CEO: So very, very interesting, know, fold events that are undertaken at this particular time. All right, we come back, let's try to make some money with Aaron Clark. Let's talk about how we can make some money, believe it or not, on our primary home from a rental aspect. All right, let's turn it over to Mr. Jim Poston. He's got news, traffic and weather. Hi, Jim. Welcome back to the Jon Sanchez Show on New Stock 780K, which with Aaron Clark of Edgerillity, Dwight has the afternoon off. All right, once again, we finished with a loss of 84 on the Dow. NASDAQ finished down 185 and the S &P lower by 25. Oil surging $4.10 to 92.29 a barrel. All right, we're gonna get to our real estate topic now. Looking forward to this. know, Aaron, when we talk about making income off of real estate, the first thing that comes to mind is, I need a bunch of rentals, right? If I wanna do it right, or if I want a lot of money coming in, I need two, three, five, whatever number of rentals, depending upon your income goal. Very few times have I ever come across someone that says, ⁓ I'm making X amount of dollars on my personal residence. It's like, wait a minute, how you doing that? And so that's the topic. yep, exactly. So that's the topic that you and I are gonna get into. So let's kind of start off with,

Aaron Clark, Edge Realty: I have a few of those people.

Jon G. Sanchez, CEO: I'm gonna just share these, the myths as Aaron puts them. don't need multiple properties to create income. Most are sitting on opportunities and they don't even realize it. Real estate has evolved into not just buy and rent. So Mr. Clark, let's start with your first strategy, house hacking. I like this one.

Aaron Clark, Edge Realty: Yeah, so with house hacking, one, I mean, it reminds me of when I was in college, I had a rental property that I didn't own it. I rented it and I rented all the rooms out to my buddies and charged them enough money that I paid zero. I mean, that was, ⁓ they thought it was a great deal. ⁓ was a great deal. Yeah, exactly. So kind of similar. You have your house ⁓ and.

Jon G. Sanchez, CEO: Okay. Did you really? Love it. Starting your real estate career. Right. And that was a great deal. Yeah. Eric, can we pay you more?

Aaron Clark, Edge Realty: You might have an area that you're not using or let's say a lot of homes now you have daylight basement or something like that. rent rooms out. So you can rent rooms out, garages, things like that. I have clients that it's not quite the same thing as far as like renting it out for somebody to live in, but they will rent their RV parking space online to that have RVs because they don't have an RV or they have room for a couple RVs. Especially those of you that might have

Jon G. Sanchez, CEO: Mmm. Yes.

Aaron Clark, Edge Realty: some land available to you, know, Golden Valley, Lemon Valley, places like that, where you might have some unused yard area where you could park two, three, four of those things, you can rent that space out. Of course, of course, everything's gonna be subject to laws and regulations. But yeah, so that's basically ⁓ that. ahead.

Jon G. Sanchez, CEO: So always check your zoning rules with everything we're going to talk about. What's the biggest challenge you see with your clients that rent out rooms? I mean, when you said that, I've had a few clients over the years, I don't think I have anybody right now that have done that. It's usually what I have found, at least in my situation, they're usually widowers, right? Widows are widowers. They're lonely, number one. And number two, they're like, I had one guy tell me a couple of years ago, he's like, he had lost his wife a while back. He said, this was the best thing I ever did.

Aaron Clark, Edge Realty: Mm. Yes.

Jon G. Sanchez, CEO: And I said, why? He goes, number one, and most importantly, I'm not lonely anymore, because I've got someone there all the time. And number two, I'm bringing in good income off of it. But what's the downside of it? of privacy and...

Aaron Clark, Edge Realty: Yeah. I mean, the downside of it is might get somebody who ⁓ up not being a great roommate, if you know what I mean. ⁓

Jon G. Sanchez, CEO: Right, right. And he focused on people, by the way, I should mention that. Like I you said, won't rent anybody that's ⁓ under or something. you ⁓ know, in the same situation. Yeah, yep, yep. Absolutely.

Aaron Clark, Edge Realty: Yeah, or they're single at the time and then they meet somebody. I mean, the dynamic will change and that's really it's not age restricted. It's like, you know, I tell a lot of young people that are buying a house it's their first purchase and they're going to be really stretched. And talk about this whole process, like buy a house, run out a couple of rooms, you're single, you know, until you find the right one to settle down with type thing. And it's a great way to do it and not feel the pressure of being so stretched. But you know, as soon as you get to that place where you don't want to do it anymore and you kick someone out or let they start bringing people in you don't like, or they start making a mess. Yeah, you gotta have rules. we're talking, remember, I was just gonna say, remember, we're talking about hacking. So when you're hacking, you're just trying to pull out the best possible you can without maximizing the coverage or loss potential by buying a full blown, know, real estate house that you're renting out.

Jon G. Sanchez, CEO: Great point. Yeah, yeah, yeah, yeah, gotta have rules. ⁓ Right. Right.

Aaron Clark, Edge Realty: So there's going to be downfalls, downsides.

Jon G. Sanchez, CEO: curious, let's pick a nice three bedroom or four bedroom, two bath, et cetera, Reno, Northwest, it doesn't matter. What would a room rent out for? A nice neighborhood, nice house? have no idea.

Aaron Clark, Edge Realty: Yeah, so I know because I have a lot of clients that are buying places for their students, their college students. Rooms right now are about $800 to $900 a month. And now that includes them to be able to access like the kitchen to cook something or whatever. But even some of the modified dormitory type places where you rent basically a bedroom and then there's a common area that's more cafeteria style.

Jon G. Sanchez, CEO: You're kidding me. kitchen. Yep. Yep. Yes.

Aaron Clark, Edge Realty: They're charging anywhere from seven to $900 a month just for that room. And it's private room. I mean, it's just you. It's not like there's two people in there, but yeah. Yeah, it's crazy.

Jon G. Sanchez, CEO: Yeah, had no idea. So if you had a four bedroom house, renting it out at, so you're going to stay in one, rent out three bedrooms at $900, you're making $2,700. Yeah, majority of a mortgage.

Aaron Clark, Edge Realty: Yeah. I have a lot of clients where their kids are young, they're getting married, got out of college, and they're turning that five bedroom house, four bedroom house over to the kids. And then they're renting out each room to the kids and their friends and et cetera, as they're establishing their lives and basically creating style living within neighborhoods in Northwest Reno and South Reno.

Jon G. Sanchez, CEO: Aha! Yeah. What have you come across, any zoning problems that you see in certain areas of town with that? I mean, if you're out three rooms.

Aaron Clark, Edge Realty: I mean, in regard to that, you're not really, not a multifamily because you're renting out rooms. ⁓ no, you could have an HOA ⁓ where it's like, you know, if you had a real strict HOA with a, or 55 plus community or something like that, you'd be in violation. yeah, check check your local rules, drink it, blah, blah, Yeah.

Jon G. Sanchez, CEO: Yeah, where does it fall? That's what I'm saying. It's like, it's not a, okay. Right, Okay. Absolutely, absolutely. Wow, that's a fat 900 bucks. Amazing. Something we talked to Corey about when this has been quite a while now over the last year or so, city of Reno passing the accessory dwelling units, the ADUs. Bring us up to date on that because a lot of people have big backyards and yeah, it costs a little money to build something if you don't have it, but man, the cash flow could really work out nicely.

Aaron Clark, Edge Realty: Yeah. Mm-hmm. Yeah, so my understanding is basically you can convert anything that's attached to the property. It has to be less square footage than the house itself. I think it needs to be under 1500 square feet. It has to include I think a kitchen and bathroom. So what you could potentially do, and I have clients that have done this, you could turn a...

Jon G. Sanchez, CEO: Mm-hmm. Okay, makes sense.

Aaron Clark, Edge Realty: to car garage, through car garage into a studio apartment that has a living room and laundry area, bathroom, bedroom, et cetera. you could do something like that. You can add on to the property to do it. It's still, so even though it's, you're allowed to do it as far as the county is concerned, you still remember that HOA regulations supersede whatever the county allows. So if you're in a...

Jon G. Sanchez, CEO: Mm-hmm. Right.

Aaron Clark, Edge Realty: a strict HOA, they may not allow it. doesn't matter if the county allows it. So you do have to check on both sides of that.

Jon G. Sanchez, CEO: Sure. So we want to make sure that we're checking our HOAs, ⁓ and county. Okay, all right, good point.

Aaron Clark, Edge Realty: Yep, correct. I always tell people a lot of the times if you can do it, so when people go, well, do know if I can park an RV here? I go just drive through the neighborhood. You'll have your answer. You'll see 50 RVs parked in there in the driveway, right? So yeah. Yeah, exactly.

Jon G. Sanchez, CEO: Yeah, exactly. There you go. Right. Yes. If you see nothing, don't even try it. Perfect. All right. Great advice there. All right, Aaron, when we come back, let's talk about short-term versus mid-term rentals. Get in kind of this Airbnb versus I love this idea. You put the 30 to 60 day rental, right? This is a great moneymaker. Aaron Clark, a very special guest, of course. Let's turn it over to Kristen Snow. She is always special to us. Happy Tuesday. How we doing in the Right Now Traffic Center?

Aaron Clark, Edge Realty: Mm-hmm.

Jon G. Sanchez, CEO: Welcome back to the Jon Sanchez Show on Newstalk 780K, which Mr. Clark, your phone number, saw.

Aaron Clark, Edge Realty: 673 6700.

Jon G. Sanchez, CEO: Beautiful. right, we're talking about again, ⁓ don't need multiple rentals to make cash flow in real estate. We're talking about utilizing something most of you have, your home. Now, know we're pushing the envelope saying, you can make $900 a month renting out a room or ⁓ putting ADU there or something. Obviously not for everybody, especially if you still have kids at home, et cetera. But for those of you that are single and you're looking for ways to make some additional income, quite an because rentals are of short supply. even, right, Aaron, even just renting a room. short supply. And believe it not, that's what a lot of people want to do. They don't want to rent an entire house. They would rather, hey, you know, give me a room ⁓ let make a meal once in a while because I'm working so much or I'm not to be here home very much. So I just need a place to rest my head at night.

Aaron Clark, Edge Realty: And I have quite a few clients, they travel a lot, so they have multiple houses in different areas. And so they really, their downsized strategy was they had a big house and they just want the room. So they'll rent out the rest of the house with the idea that when they're here for a couple weeks, get to stay in that bedroom. Yeah, or that daylight basement or whatever it is. Mm-hmm. Yeah. Mm-hmm. Yeah.

Jon G. Sanchez, CEO: Yep. There you go. You're kidding! ⁓ my gosh, they reversed it! Isn't that something? Really? What a beautiful idea. Never thought about that, reversing it. Wow. All right, well let's wrap things up with our short term versus midterm rentals, right? We've got Airbnbs and those type of things. Real quick before we get to the 30 to 60 day strategy or 30 to 90 day, bring us up to date. What's the scoop on Airbnbs right now? I'm hearing mixed things. That it's got so saturated.

Aaron Clark, Edge Realty: I mean, they were pretty saturated. there is a lot of people, I've had a lot of clients at bottom, had them for five, 10 years, and they've been pulling out of them a lot lately. The fees are getting exponentially more and more and more. They're just harder to maintain. I mean, they're still there, they still exist, but it's not, there isn't as much return as there was, I would say. Not as enough meat on the bone. Yeah, so because of it, transitioning into next thing, people are doing more,

Jon G. Sanchez, CEO: Yeah. That's what I've heard nationally. Right, okay, all right. That almost made on the bone. All right, yep.

Aaron Clark, Edge Realty: the midterm rentals. the beauty of the midterm rentals ⁓ you can do things like, I'm sure people have heard of a furnish finder, for example. So it's where would ⁓ fill house with furniture just like you normally would like a Airbnb or whatever. And it would be just like an Airbnb, ⁓ but renting it out to corporate tenants. So you might have a business person that's in town for three months doing some workshops for a new launch of a business, especially with the

Jon G. Sanchez, CEO: explain that. Mm-hmm.

Aaron Clark, Edge Realty: Tahoe Regional Industrial Center. You have a lot of traveling ⁓ field people, a of traveling nurses. A client right now, we're selling one of their properties, they have a condo and they have only done midterm rentals. ⁓ so because of it, you're renting, your minimum time periods are sometimes 30 days ⁓ your max might be six months. Or might be two month block, one month off, two month block, one month off, know, things like that. Because it's all based upon their usage and what they need.

Jon G. Sanchez, CEO: Mm-hmm. Yes. Mm-hmm. I've got a husband and wife client, own a beautiful home, time to retire. They bought a motor home, traveling. they wanted to come back periodically, found an executive through one of these services. Six to, they've had one for six months, one for nine months, one for a year. And yeah, just loving it, just absolutely loving it. So ⁓ all right, Clark, God bless everybody. We'll do it again tomorrow on the Jon Sanchez Show. Take care.

Aaron Clark, Edge Realty: Yeah, yeah, it's great.