Real Investor Radio Podcast

Transcript:

Craig Fuhr (00:02)
Hey, welcome back to Real Investor Radio. I'm Craig Fuhr, joined again by the great Jack BeVier. Jack, it's good to see you.

Jack BeVier (00:08)
Good morning, sir. Great to see you.

Craig Fuhr (00:10)
You're always the great Jack BeVier, Jack. I'm sorry, I have to say it. I have to give you kudos where I can. And so Jack, I'm going to jump right in today. I read an interesting report on Redfin came out on May the 30th. The headline was Redfin reports price drops hit the highest level in 18 months as high rates dampen buyer demand. So you know, basically the latest housing market analysis reveals a significant shift in

Jack BeVier (00:12)
Yeah, yeah.

Craig Fuhr (00:40)
that's favoring buyers as of April 2025, there are approximately 500,000 more home sellers than buyers nationwide. That's a 33 % surplus, the largest since Redfin began tracking in 2013. We're seeing price reductions in some markets across the United States, Jack. Weekending May 26, 6.4 % of home sellers were reducing their asking prices. That's the highest share since November of 2022.

The median asking price dropped by about 3000, not much there. Seeing an inventory surge, active listings are up to 1.96 million houses. That's up 16 % year over year. And 44 % of those listings have been on the market jack for 60 days or longer. Never a good sign. You know, just seeing some buyer has hesitation, some regional variations. ⁓

I noticed there was one they had a pretty extensive table. And they were talking about their home buyer demand index, and that's down 12 % year over year. So, you know, I think the 30 year mortgages are hovering around that 6.9 to 7%. Jack, you know, could it be the interest interest rates only? Could it be consumer confidence? Could it be, you know, what's your take?

Jack BeVier (02:04)
Yeah. Yeah. So, um, mean my perspective is that it's been soft since November, like showing activity has been soft since last November, the October bottoming of interest rates. There was a big surge right then, but when things started to head back up, uh, and then Trump took office and there's been a lot of like just uncertainty and, you know, in, the world. And, uh, since then I think that

combination of those two things have just ⁓ caused consumer psychology to react in a way that people are just not that excited about making big decisions just at this moment. The ground just doesn't feel settled, settled underneath their feet. ⁓ Yeah. then, and then, you know, and then we just happened to be going into the spring. So that was like nice timing from a volumes perspective, but I'm nervous about the end of the spring selling season. Because if we're in a

higher in this and I think we are like higher interest rate environment for a longer period of time. ⁓ The you know, we're not going to get a we're not going to get an interest rate driven like boost to to demand and we're talking about privatizing Fannie and Freddie now. ⁓ So that would you'd expect that to have a modest increase, you know, upward pressure on mortgage rates also.

Craig Fuhr (03:16)
Yeah.

Mm-hmm.

Jack BeVier (03:29)
And then my over all look is that I think that we got a consumer recession coming, you know, to, to, to, kick off the end of the year. So.

Craig Fuhr (03:37)
Well,

well, wait a minute. Whoa, hold on here. That's the first I think I've heard Mr. BeVier say that. I think it might be talk about why you feel like that's consumer recession is coming.

Jack BeVier (03:42)
Is it?

Okay.

Yeah, I feel like I feel like there's a shift in the labor market happening like right now that hiring freezes have gone into place ⁓ at a lot of large companies. And I think that that's going to continue to increase relief resulting from technological advances. I think I mean, it's something that we've been working on. I think that AI has gotten to the point where it actually does real work now. And so companies are looking to get more out of the people that they have with

Craig Fuhr (04:05)
Mm-hmm.

Jack BeVier (04:17)
product, you know, adding adding technology as a productivity booster. And so the argument to add more headcount right now is just not ⁓ not that compelling. And and I think that that and I think that as the technology gets better, it's gonna put pressure on labor to change job descriptions, right? Like the pie will expand, you know, with with with new technology, it's ultimately deflationary, which is good for the economy, good for and good for productivity and in the long run.

good for the consumer, right? But in the short run, if you're one of the ones that gets disrupted by it, it doesn't feel so great, you know, and this is going to be pressure on white collar labor, which is not something that we've really seen, not something that we've experienced before, right?

Craig Fuhr (05:02)
Well, that's something I'm hoping to talk about with our with our guests today, actually. ⁓ So so I'm sorry, Jack, but keep going if you weren't complete with it.

Jack BeVier (05:11)
No, that's

that's kind of that's that's the thesis is that I just think that there's going to be I don't think that there's going to be tailwinds on the the labor market. ⁓ And I think that's going to hurt psychology. And I also think that's going to hurt consumer psychology. And all those things are not going to be good for for the housing market. Right. That's none of those things encourages people to to trade up houses, certainly not to trade in their cheap mortgage. So I don't know. I'm kind of just hunkered down and we're in this one for

a while.

Craig Fuhr (05:41)
Yeah, let me ask you this, while we're on the subject. So, you know, as as both a investor who, you know, still buys a lot of houses per year and does a lot of projects per year, and as a nationwide lender, what's your take on some of the markets that we're seeing around the country that we lend in Jack, where we're, you know, quite frankly, you know, parts of Florida, parts of Arizona, you know, some of the markets in the country that are feeling

pretty depressed right now in terms of inventory and you know, slow down in sales. What's your what's your take as a lender on that? Like, let me let me just pick one Fort Lauderdale, you know, tough market right now in some areas.

Jack BeVier (06:24)
Yeah, I think that, ⁓ like you said, a lot of the Florida markets, Texas market, you know, all the sunshine states, right? They're everywhere that benefited significantly from, the run up. Yeah. The post, post COVID run up. Yeah. Migration are all softening right now. Also those places that have where it was easy to get a permit issued. What they did was they issued permits. They issued permits like gangbusters and built a shit ton of multifamily ⁓ supply, which definitionally competes

Craig Fuhr (06:34)
Net migration. Yeah.

Jack BeVier (06:53)
you know, just because just because it's housing with a single family market. And so, ⁓ you've got an excess of supply in places where you can, where you can get permits, right? The nice thing about getting permits, the problem with it, you know, the downside to that is that everybody can get a permit and build a lot of houses. So right now all those places where you can get permits are suffering from a bit of an oversupply right now, a glut of inventory at the moment in a weaker demand and consumer demand environment where interest rates aren't helping anybody.

Craig Fuhr (07:15)
Yep. Yep.

Jack BeVier (07:22)
And then ironically, you go up to Hartford, Connecticut, and it's super tight and prices are increasing in that market. that, you know, the people have been talking shit about the Northeast for the past six years. All of a sudden right now, it's the only it's the it's the healthiest housing market in the country. So there is definitely like a regional dynamic to this. And we're having to take that into consideration. Obviously, the listeners are buying wherever they're buying. But for those folks who are in multiple markets, you know, the regional differences do make a pretty significant.

There's a pretty significant like, you know, divergence between sub markets right now. ⁓ But, you know, I'm all I'm still very long term bullish on ⁓ on American real estate. So we continue to buy, frankly, kind of regardless of what's going on on a micro, whatever, whatever my 12 month view is, is kind of like the problem I have to deal with. But I'm not not buying at any point at any point in time because I'm trying to time the market. ⁓

So we just, you know, try to keep the machine running and just, just, you know, the, the problem or the challenge is what shifts over time.

Craig Fuhr (08:29)
Right, right. Well, let's bring in our guests today. We've got what's really quite frankly, Jack, known as a unicorn on the on the show today. ⁓ For those of you who haven't been listening to the podcast very long, we are ⁓ in Maryland, right outside of DC. We're actually I'm in Baltimore today. Jackson Baltimore, Mike, I assume you're up in Harford County somewhere or Timonium.

Mike Griffith (08:37)
⁓

Yeah.

Craig Fuhr (08:55)
Yeah, so Mike, I met Mike Jack at the Maryland investor network, Brenton's thing. We have Brenton on a few a month or so ago. And ⁓ I was really captivated by the guy we sat and talked for probably a better part of a half hour and he's got quite a story. So Mike is I said unicorn because he is actually a conservative who serves in the Maryland House of delegates delegates since 2020. ⁓

He's joining us today as a dedicated public servant with a remarkable journey from foster care where he grew up in Aberdeen to the halls of the Maryland General Assembly. Mike's a U.S. Marine Corps veteran who ra and served as Mike served in the military as a military police officer, earning three meritorious promotions and multiple awards during his two tours, including a deployment in the former Yugoslavia.

Mike Griffith (09:35)
⁓

Craig Fuhr (09:48)
Transitioning to the public sector, he amassed nearly two decades in business development, holding leadership roles across various industries. Today he works as the head of business development for Albers & Associates, a law firm here in Maryland. And since his appointment in 2020, delegate Griffith has been a staunch advocate for conservative values, championing education, veterans affairs, and public safety.

his legislative efforts have earned him accolades such as the Arc Maryland legislator of the year and the CPAC award for conservative excellence. Mike, it's a pleasure to have you on the show. Thank you for taking the time,

Mike Griffith (10:27)
Howard, thank you very much for having me.

Craig Fuhr (10:29)
illustrious career indeed, my friend.

Mike Griffith (10:33)
one day at a time, we'll figure it out. We'll see where it all ends up. So, but thank you. Very nice words.

Craig Fuhr (10:35)
Well, man, there's, there's so much, there's

so much, ⁓ I know that Jack and I want to dive into because we love hearing how the sausage is made in Annapolis. but why don't you start off talking about, ⁓ how you made your way to the business development, head of business development for Albers and what you guys do there. ⁓ in addition to mid Atlantic title.

Mike Griffith (10:56)
Sure, so it's.

Yes, it's Aberdeen Associates in Midland title and so it's an interesting story so and I do have lots of comments on what Jack was talking about earlier, so I have a lot of feedback on that, so I'll dive into that a minute, but to answer your question so and to try to make it as short as possible. So you know it was a foster kid in Aberdeen kind of joined the Marine Corps to get out of the system and get on my own. Two tourists in Marine Corps really struggled to get out of the Marine Corps.

Craig Fuhr (11:08)
Yeah, jump in.

Mike Griffith (11:25)
So I didn't have a lot of confidence in things. I didn't have a fallback either, because you got out of the Marine Corps, and you can't go back home, you have figure it out. So I did door to door sales for two years, believe it or not. And frankly, one of the best experiences of my life, very humbling, really taught me how to transition back to the civilian world, because when you're going door to door and trying to get people to do business with you, a lot of pride swallowing.

⁓ But you learn how to build relationships very quickly. You learn how to deal with social adversity. You take a lot of nos, 90 % failure rate there. ⁓ But you learn some great skills. Because when you're at somebody's door, you got five seconds to get 10. You got 10 to get 30, you got 30 at two minutes, and you got three minutes to close.

Craig Fuhr (11:56)
Mm-hmm.

I gotta know what were you selling?

Mike Griffith (12:18)
I was doing fundraising for the dare program. So as a MP in the Marine Corps, one of my additional duties, I was a dare officer for the schools on base Aquanico. So I kind of got out and started doing some work for them fundraising. So it wasn't like a terrible product, you know, but ⁓ doesn't matter. At their door, right, so but those skills have transitioned not only in my career because the court.

Craig Fuhr (12:37)
Still asking people for money. Right.

Mike Griffith (12:47)
core skills and core values are still today, whether I'm dealing with a CEO of a huge commercial company, or I'm dealing with a constituent of my backyard. Those skills translate not only to big business, but also the politics as well. And I approach everything from my constituents to my clients, to my colleagues in general assembly with those exact same core skills. And ⁓ I wouldn't trade that experience for the world and then continue to work up, work for... ⁓

college for a while then and I don't have a college degree. So I was head of business development for a college, then the Baltimore Sun. Now I was head of business development for Cal Ripon Juniors, commercial entities, and help grow a property management company that was sold and then got the title on them and just working my way up through that and then brought on and we're doing really, really great here with Albers and Associates and Midland Title. So yeah.

Craig Fuhr (13:45)
Well, that's awesome, man. So ⁓ he wanted to jump in on some of the comments that we were making with regards to the Redfin article.

Mike Griffith (13:50)
Oh yeah.

Oh yeah, so I have lots of thoughts and not necessarily the article, but what we're seeing here in Maryland, right? So from a business perspective, I do business throughout the Mid-Atlantic region, but from a policy perspective, I'm very focused on Maryland. And there are a lot of indicators that I've been alarmed at for a couple of years. So first of all, we're 90,000 units upside down in the state of Maryland. We're 90,000 units short to provide housing for the folks we need here in Maryland. So that's an issue, whether it's multifamily, single family, things of that nature.

and we've had a lot of challenges in trying to meet that need. But the economy in Maryland has been very poor for a very long time. And the number I really want to focus on is the number I feel that's the most deceiving number in all of politics and all of economics is unemployment rate. So that unemployment rate is tied to, and it's mostly reported by exactly ADP in those companies, right?

Craig Fuhr (14:45)
ADP.

Mike Griffith (14:49)
But it's not based upon percent of people working. It's people that are looking for work. And even some of those numbers are driven by individuals receiving unemployment, because if you're receiving unemployment insurance, you're required to apply for two jobs a week. So they count in that unemployment number, even if they're not actively looking for work, they still get gobbled up in that. The number that I think is the most accurate is labor participation rate, or some people call it workforce participation rate. So in 2019 in Maryland,

The workforce participation rate was 68%, the highest in history. 68 % of eligible Marylanders were working. Right now, according to the Comptroller's Office, and I serve in Ways and Means Committee, so I get the annual briefings on the economic outlook for the state, because we deal with the taxes or revenues, but you know, their taxes pass and Maryland goes through my committee, and I of course fight them, but ⁓ so we have to understand the projections, the outlooks, and the

potential shortfalls we're facing and we are facing in state of Maryland due to policy decisions. But as of right now, that same workforce participation rate is at 62%, the lowest since 1977. So in a state of 6 million people, what that means is 300,000 Marylanders that can go to work have not gone back to work. Now we can, you know, there's

not great data as to why we can say lifestyle change, can say people living off debt or benefits or entitlements for whatever reason, 300,000 Marylanders have not gone back to work since COVID. All right. Now that obviously has a huge effect on income and revenues and things of that nature, but we've also seen record debt for individuals in Maryland. Right. I think the Wall Street Journal reported or Forbes reported that

The average credit card debt in Maryland is $13,000 per home. So when you're looking at multiple things, people not going back to work, massive credit card debt, and combined with the fact that people are also operating, people bought homes last few years are operating at three, three and a half, four percent interest rates. If they're not going back to work, their entitlements are starting to go away, the government benefits are going away, they may have been...

Helping support through COVID benefits, things like that. And this isn't a criticism or an indictment against anyone. This is just laying out the facts. And with massive debt, if these folks are in trouble, they're not going to be able to refi, right? Which is why you're going to see foreclosures skyrocket. You're going to see people getting out of their homes, which is why I think, like, so one things I've done in my business, I've really focused on the investor business. Resales are down, refis are dead. So I've spent a lot of time in the investor network.

which for reasons we probably haven't spent a lot of time together before this because this is where Business is going is the investor area and what I've also seen is And it appears and I've talked to some banks and they've kind of confirmed this where in 2008 they were heavy on foreclosures and They got saddled with all this ⁓ All these assets they didn't know what to do with this time

It seems they're really focused on short sales. I've seen all the short sale folks really go gangbusters right now and have a lot of success because the banks want these assets off their books. And I've seen, you know, with some of the deals that, you know, we've been involved in on title work that the banks have been extraordinarily, not agreeable, but quick to agree to short sales. So that kind of tells me from some, you know, anecdotal evidence.

and some data in the market where things are going. I think you're going to see ⁓ to Jack's point about a small recession. it feels like almost even though the Fed's supposed to be nonpartisan, almost adversarial relationship between the administration and the Fed, wondering why the Fed has not been reducing rates. Like they're projecting a point and half down by this time, right? And we're not.

And the banks are also seem to be lagging when they did go down a quarter point was a quarter, a half point earlier in the year. The banks have been lagging on catching up to what the Fed has been recommending in terms of their interest rates. So and then with some decisions made out of DC, does that affect inflation? Inflation goes up. The Fed's going to lag again on reducing interest rates. So there's some environmental factors. There's some policy factors.

But there's also some people factors involved in this too. So I don't get caught up when people say it's 4 % to 3 % unemployment rate. That's just not, in my opinion, that's not a real number in Maryland when you have 300,000 Marylanders who have not for whatever reason gone back to work since COVID.

Craig Fuhr (19:48)
Do you have any idea what the demographic makeup is of that 300,000? it sort of, you know, is it black, white? it college educated versus non-college educated?

Jack BeVier (20:01)
rich pour.

Mike Griffith (20:06)
So this date is not self-reported. It's kind of reported from what the comptroller extracts, that people that are going to work. it's not based upon demographic. It's just hard numbers. And by the way, it's not impacted by health growth. Outgrowth is not impacting this because the net number of Marylanders are roughly the same, about 6 million. And that includes people that have moved to Maryland, people who have moved out to Maryland. ⁓

And we can discuss that as well. There's some other philosophies of who's leaving versus who's coming in. That's a greater conversation to have. But we don't know. At least I don't have the data. But the hard numbers are we're down 6%, 300,000 folks who have chosen or unable or whatever you want to say. I'm not going to speculate as to why necessarily without good data. It's 300,000 Marylanders are.

There's 300,000 less mailers working now than five years ago.

Craig Fuhr (21:04)
So of all the structural problems that keep you up at night as a delegate, you know, this is one of them. ⁓ You know, what else?

Mike Griffith (21:11)
yeah.

I mean, just our economic outlook in Maryland. We have a huge spending problem. We have a huge taxing problem in Maryland. And people will say.

Craig Fuhr (21:21)
$3.3

billion deficit in 2025.

Mike Griffith (21:25)
Well, mean, so in 2014, our state budget was $35 billion. This year it's $67.

That's not a revenue problem, that's a spending problem. And I'm not trying to be partisan about this. I'm just, I'm certainly a physical conservative. And when your budget, if your household budget almost doubles in 10 years, right? But your population hasn't and your economy hasn't, right? That means you're just taking more money out of the economy.

Craig Fuhr (21:37)
Where does, like.

Jack BeVier (21:54)
Yeah, it's a six, seven percent growth rate.

Mike Griffith (22:04)
Maryland doesn't have a single Fortune 500 company. Think about that for a second. know what mean? Quote unquote one of the wealthiest states in America because we're overly dependent on government. Government is the largest employer in the of Maryland.

Craig Fuhr (22:15)
6 %

of Maryland's workforce are currently employed by the federal government, either directly or, yeah. Yeah. All right.

Mike Griffith (22:20)
Right? But that's just federal government. That's just federal government. Right?

Jack BeVier (22:21)
Yeah, that's direct. Yeah.

Mike Griffith (22:25)
Then you also talk about government contractors. But think about state employees. Think about teachers. Think about law enforcement. Think about, you know, DPW. You think about all the government employees we have throughout the state. At the state, county, and municipal level. Right? Government combined is our largest employer by far. Jobs that come directly from government money.

Craig Fuhr (22:43)
Go ahead.

Go ahead, Jack.

Jack BeVier (22:47)
What's your perspective?

What's your perspective? mean, as a as a conservative in in a Republican in Maryland, what's your perspective on what's happening? For example, you know, I know we didn't get curious about your take on the federal budget also, but just in terms of like Doge efforts and like all that, like, you know, philosophically, I like that stuff. As a Marylander, I'm like, ⁓ we're going to have a we could have a regional recession here.

Mike Griffith (23:13)
What?

Jack BeVier (23:16)
and the fed won't care because they'll be like, that's a DC Maryland problem. The overall economy is going fine. And Maryland just gets hung out to dry as, we got a lot of people who are on the teet of the federal government in this state, right? Like

Mike Griffith (23:26)
I love-

I love that you asked that question because I want to slam the door on that.

⁓ talking point that's out there. All right? And a lot of people have that talking point. First and foremost, we've made ourselves as a state way too dependent on the federal government almost deliberately because we've created a business environment that does not grow private industry. If we had robust private industry, we wouldn't even be having this conversation. And then by contrast, let's look at Virginia. Virginia is equally

Craig Fuhr (23:58)
That's correct.

Mike Griffith (24:04)
if not more impacted by federal cuts. Have you ever driven down 66 or the Dulles Toll Road? All you see up and down is government contractors, lobbying firms. That entire region is dependent on DC way more than Montgomery or Prince George's County. And Virginia has a budget surplus and are giving tax cuts this year. That has nothing to

Craig Fuhr (24:15)
That's right.

Jack BeVier (24:31)
Mm-hmm.

Mike Griffith (24:34)
Same impact, actually more of an impact against Virginia. And they beat us for Google and they beat us for this company and they're beating us everywhere. Right. It's about business climate. We have put ourselves in a position where so dependent on federal government that something happens like this. It all falls down. And it's always been a bad philosophy because the government can give it and the government can take it away. Right. And.

This is why I'm generally conservative, because if we feel government can do good with the right person involved, then we feel government could probably do bad with the right person involved. So the more power and the more we depend on government, the more that rug can be pulled out from us just as quickly. So as far as philosophy, like, you know, we need to shrink government period. We need to spend less. We got to get our house in order physically. There's no question. Yeah.

Craig Fuhr (25:29)
We know what we have to do, Mike. You know,

so like that's the question when I talk to guys like you and it is rare indeed, but like you go to Annapolis and what I got it. First of all, I have to think it's a constant uphill battle for you there, but like how, what is, I was reading prior to the show that like Maryland ranks 38th in business in climate for business, right? Like very.

Mike Griffith (25:55)
Now it's 45th. The new report

came out 45th.

Craig Fuhr (25:59)
There you go. So 45th in terms of economic viability and sort of legislative problems that hurdles that small businesses have to cross. We know that small businesses have left the state. We've deindustrialized since, you know, 1980 to now. There's no factories left here. You know, my dad worked at General Motors for 35 years. It's now, you know, an Amazon plant. So, you know, what tell me what your

what your fellow politicians are really trying to do to make the state a better place for businesses, if anything.

Mike Griffith (26:34)
I haven't seen any evidence of trying to make it a better business climate. I've seen frankly the contrary and we fought these issues and efforts left, right and center. We raised $1.8 billion in taxes and fees this year. There was a bill three to the last five years that a business of business services tax, right? And in my committee, killed it in two year 2020. We killed it in 2024. This year it passed.

Craig Fuhr (26:55)
Yep. Yep.

Mike Griffith (27:04)
So during the bill hearing, ⁓ I was the one who asked, you can look on Facebook on ⁓ Maryland House Republican caucus Facebook page, I asked the question that opened the can of worms with the head of McCormick. said, if this passes, what are other states gonna do to recruit you? And they admitted that they're gonna be moving, they can't move their entire operation because of the infrastructure, but they admitted if that bill passed, they're gonna move a lot of their operations out of state and companies that are more nimble.

would move out of state, right? ⁓ They reduced it all the way down to just IT services, a 3 % tax on IT services, which impacts everything we're trying to do. The governor comes out and says, we want more IT, more quantum, more AI businesses that are thriving in Maryland. But then we're saying on one hand, we want to bring this business in, but then we're going to slap a 3 % tax before they even come here. The vice chair of the Economic Matters Committee and the House of Delegates, a Democrat.

high-ranking Democrat. When this bill passed, moved his business out of Maryland. His IT company. He moved his IT company to Virginia.

Craig Fuhr (28:09)
Cheers.

It's amazing.

Mike Griffith (28:16)
A high ranking Democrat who fought this bill said even I can't go on board with this and move this business out of the state. That's where we're at.

Jack BeVier (28:27)
So what's your perspective on the next like five year? What's the five year, 10 year outlook on that then? Like, is this like a, we in a declining, meaning downward spiral here? I mean, is the best over cause you know, Hey, if, all of a sudden spending is going to get more national attention now, uh, that's not good for Maryland. And if all of the elected leaders don't get it like, and so we're going to get forced off the tee and there's nothing to fall back on.

Craig Fuhr (28:34)
Yeah, are we in a death spiral? Is there a way? Right.

Mike Griffith (28:36)
I mean...

Jack BeVier (28:54)
I mean, how are we going to get out of a, how's Maryland going to get out of a deficit spending situation?

Mike Griffith (29:00)
I mean, the only way we're gonna get a deficit based upon what I've seen from the General Assembly is to tax more and find more revenues. ⁓ Because we've put ourselves in situation where, so it really started with the blueprint for Maryland's future, the Curwin bill, the education bill, which was a $40 billion unfunded mandate. What's that mean? It's mandated spending by the General Assembly. That's what a mandate is, that the governor must.

It was passenger Hogan, so they're saying you must do this right? 87 % of the state budget is mandated spending, not discretion. I mean, just whatever the General Assembly says the governor must spend this. Right, they put in the law. It's their work around the budget. So it's mandated, but they never created a revenue stream to pay for. They've been robbing Peter to pay Paul painted doing a shell game. And. Rolling out this platform that the.

Craig Fuhr (29:34)
Is that entitlements or?

Mike Griffith (29:57)
the blueprints paid for. No, it's not paid for. They've been taking money from all these different pots, throwing it into a special pot and saying, the blueprints paid for, we just gotta pay for other things. So, but it's really down to the blueprint. Even the physical analysis by the non-partisan Department of Legislative Services stated that our financial shortfall is due to the education bill, right? So first of all, it's $40 billion over 10 years out the door that we're trying to find a way to pay for.

And then when you combine other policy decisions, and again, this is not, know, the purpose of this podcast, I'm not trying to get into the policy decision, but we decided to give free healthcare to non-citizens, right? Well, that was a $500 million hit overnight that they wrongfully projected was gonna be a much smaller number. And then also our energy policies are a big piece of it, right? So we've over the last 15, 20 years eliminated a lot of our

in state energy production, mostly around fossil fuels. So what does that do? Well, that forces us to get energy from other states. So right now we're buying 40 % of our energy in the state from Pennsylvania and 60 % of that energy is fossil fuels. And now we're paying a massive premium. So first that hurts consumers at the consumer level, but it also hurts government because government also has

energy bills and energy costs. And now those costs have skyrocketed, which gets passed on to the overall budget and then gets passed on ultimately to consumer again. So when these energy policies are crushing consumers financially, not just in their pocketbook in terms of their energy bills, but in terms of their tax bill too at the state, county and municipal level, because they're having to raise taxes and fees to offset the cost of their policy decisions.

Marylanders and businesses are getting covered both ways. And then some of these additional energy policies that are forcing businesses and forcing housing to go to ⁓ electric power generation, electric devices, electric, ⁓ all that, right? So now the policy decision is not only in terms of you must use these products, you must help pay for the government's policy decisions on energy.

Craig Fuhr (32:08)
heat pumps, heat pump, non-propane, non-natural gas.

Mike Griffith (32:21)
You must pay for our decision to buy energy from out of state. But then the additional pressure that's put on the state by everyone being forced to use ⁓ electric devices, right, also now increases energy use and increases cost. So all this is done by policy decisions.

Craig Fuhr (32:39)
So.

Mike, your district is in ⁓ the backyard of where most of my friends live. If you grew up in Parkville, Maryland, a little suburb of Baltimore, the natural migratory path for all of them is up 95 and into Harvard County. And, you know, I know my friends and I know people like my friends. What are you hearing from them, man? Because I have to be honest with you, I'm very blessed.

Mike Griffith (32:56)
Mark for County.

Craig Fuhr (33:07)
to work for a company that allows me to work remote if I want. And frankly, when my daughter graduates high school next year, my wife and I can't get out of the state fast enough. We've already started packing boxes. I mean it sincerely. We're going south. We're going to South Carolina or Florida someplace that's a little bit more friendly towards business, towards consumers, and frankly has a more conservative outlook on things. What are you hearing from guys like me and Jack who live in your district?

Mike Griffith (33:36)
Well, first let me address that last comment. So we tell people in the General Assembly, people come and testify in the General Assembly before our bill hearings and say they're leaving the state. And you talk to the majority party, I'll talk, and not to be partisan here for people that this isn't a partisan conversation, just in Maryland. You know, I'm in the minority party, the party empowers the Democrat party, they're the decision makers. So I'm just going to refer to it in terms of that, not trying to be partisan, but the Democrats in Maryland will say.

They do not believe people are gonna leave as are all these policy decisions. They don't believe it. And it's gonna take tremendous pain to steer the ship in a different course, to get away from spending. Because remember, when we raise $1.8 billion in taxes, we're extracting that out of the economy, right? And then when we push people out, that's extracting. And one more policy is, now you got me on a rant.

For example, the bill that I introduced every year, so I was blessed. I was the Maryland Military Coalition Legislator of the Year in 2024. I'm also Vice Chair of the House Veterans Caucus. I've passed a lot of bills and done a lot of good work for, and me and my colleagues have done a lot of work for, the veterans community and military members and their families. 100%. In a bipartisan manner, but I've been fortunate to help lead the effort on many of these issues. And there's a bill right now, first of all, we do tax.

Craig Fuhr (34:50)
from both sides of the aisle. Yeah.

Mike Griffith (35:01)
veterans military retirement, which is absurd to me because military veterans, when they're here in the state, you can retire at 38 from the military, right? Which means you got 20, 30 years left to work. And not only are you bringing your military retirement income to the state, but then you're producing a secondary, another full-time income that's being taxed, but you're spending all your money here. So we should be incentivizing veterans to come to Maryland because you have two incomes you can spend here, right?

But the bill I introduced again this year, because right now, there is a deduction. You do get part of your retirement tax, only a portion of it is taxed on the whole thing. But until you're 55, your full retirement tax is taxed. So I had a bill for several years again this year that would extend the partial exemption on your military retirement to all ages.

That only costs the state, in terms of hard revenue, $3 million a year. And we couldn't even pass that. Because they're so worried about a $3 million versus the overall income benefit, would have the economy.

It's maddening, but what everybody's everybody saying the same thing. We can't afford to live here. You know, ⁓ we're going to leave the state as soon as we can. Listen, I'm going to leave the state as soon as I can. Right. Well, but but I'm not going to, but I'm going to fight to the death. I mean, not fight the death. That's probably what I said, but I'm going to fight with everything in my being for as long as my constituents allow me to have this job. To try to steer the ship in the right direction.

And it's not about I told you so. It's not about spiking the football. Everything that's happening, we have talked about. We've screamed at the top of our lungs. We told them on the floor. I told them on the floor of the House of Delegates that this would happen if we passed this education bill. And when you get a return, you hate teachers. You don't want to give teachers more money. No, I love teachers. I adore teachers. But if we're going to pay more money, we've got to find a mechanism on how we're going to pay for it as a state.

And then you hear the governor and the Democrats say, your budget is your priority. You show your budget, that shows you what your priorities are. All right, well, then let's show Marylanders what the priority is by making hard decisions and actually balancing the budget, not on the back of Marylanders.

Craig Fuhr (37:31)
I could have sworn

that, you know, when O'Malley was governor that when we brought in the lottery and the casinos that, you know, all of our schools will be lined in, you know, gold with all the revenues that were supposedly going directly to the schools. You know, all revenues go to the schools. should, every school should be made of gold these days, but there appears to be always this structural deficit for schools and education.

Mike Griffith (37:50)
Well that's

Well, that's it. mean, they talk about we're making hard decisions. It's not a hard decision to take money from other people to pay for what you want. The hard decision is say, what are we actually going to cut? We didn't make cuts in this budget. In your household, if your annual budget goes up year over year, are you making any household budget cuts? No, not as a net effect, right? Right. So our budget last year was 66 billion. It's 67 this year.

That's not a cut. We may have spent less increases than we wanted, right? But we're not making any actual cuts. And then you hear the trope that 94 % of Marylanders are getting a tax decrease this year. Guess how much that average tax decrease is? $50 per person on their income tax. But when you raise $1.8 billion in taxes, there's no way you can raise $1.8 billion in taxes.

on a state of six million people and that have a significant impact every single solitary person. So that $50 is gone by the end of January.

Craig Fuhr (39:01)
Jack, see you getting a little bit redder. you gotta be, ⁓ something's going on there. What are your thoughts?

Mike Griffith (39:05)
Hahaha

Jack BeVier (39:11)
Yeah, just I'm wondering like, you know what the end game is, right? Like, is there is there an end game to this or is it just going to keep getting, you know, there's going to like to take in more and taking more and taking more and taking more. ⁓ And I'm ⁓ thinking about it from kind of three perspectives, right? Like one, we have a real estate business that is where the real estate is located in Maryland. I ain't getting rid of state tax on that. Right. Like the Maryland's that Maryland, you know, the real estate's located in Maryland, the rents that come out of it.

are and the flipping activity like that is Maryland has nexus on that activity. Lending business is like not, you know, that's like a virtual thing, right? Like that could be anywhere. So like, you know, thinking about that and ⁓ and then as just a resident, right? Like Fred and I pay a lot of taxes. And so and the conversation about like

move into Florida, move into a lower tax state, move into Texas. ⁓ It's frankly an annual conversation at this point. yeah, yeah. mean, I don't have kids. His kids are out of the house. So when the kids stop being part of the equation, it makes it a lot easier. Frankly, it's my nieces and nephews right now, which is what keeps us local. ⁓

Craig Fuhr (40:15)
Really?

That's true.

And the,

you know, the crazy thing is, as a guy, you know, two guys who've, who've lived their entire lives in this once great state, it's just a shame to see, ⁓ you know, my, my, my, grandparents were here. My great grandparents were here, ⁓ you know, came over on the boat and, and, and all of those great value added manufacturing jobs that, kept guys, you know, employed and kids in Catholic schools that lived in the better parts of Baltimore city now, and then out into the County, they're gone.

And I just don't know how that ever gets replaced. I don't know how you get back to those, you know, high value added blue collar manufacturing jobs that made this state this the great state that it was. I see no indication indicators that that'll ever come back. And I and I see, frankly, an entrenched party who has controlled this state for the better part of 50 years, just getting worse. There you go. So

Mike Griffith (41:28)
150 years.

Craig Fuhr (41:33)
You know, I my outlook for Maryland is very similar to a lot of other, you know, northeastern sort of rust belt states that are just dying on the vine right now because those once great jobs are gone. And we talk about, ⁓ know, we were talking earlier about A.I. and how a lot of the white collar jobs will soon be gone ⁓ that now are the fuel of the taxes for Maryland.

⁓ I just don't understand how, you know, the politicians, the elected politicians in Annapolis don't see that, don't make changes, don't don't appear to want to make any changes. It's just tax, tax, tax, tax, tax, and spend, spend, spend. And to your point, it is a spending problem. It's not a tax problem. It's it's absolutely a spending problem as as it is in the federal

you know, how do you go from a $3.8 trillion budget to a $7.4 trillion budget in the government within the matter of just a few years?

Mike Griffith (42:30)
Yep. And it's interesting, so.

During the budget debate, there's a bill called the Bertha, which is a budget reconciliation bill. One of the things they did is they eliminated itemized deductions for individuals or entities making over $200,000 a year. So we try to find the most obvious, no-brainer amendments to offer that no one could oppose. Right? But they're so desperate for revenue, they even rejected those. So the amendment I offered on the floor against the bill was to at least carve out

or restore itemized deductions for nonprofits. $6.7 billion of donations to nonprofits in the state of Maryland are made by individuals and entities making over $200,000 a year. So we have de-incentivized $6.7 billion of charitable giving in the state of Maryland. And that cuts across every ideology. Everyone, no matter what your race, creed, political affiliation, you have a nonprofit you care about.

And some people are still going to give. But if you're a company that has the ability to donate, you know, a million dollars in Maryland and get no business benefit or make that same donation in Virginia and get a deduction, where you going to make that donation? In Virginia, right? So these are the type of policy decisions we're making that and every nonprofit in Maryland is freaking out about this. Right?

it's gonna seriously hurt everybody, especially the most vulnerable populations who depend on some of these nonprofits to make it through the day. So.

Craig Fuhr (44:20)
Mike, I've seen a lot of, know, mainly at the federal level, a lot of great people that go to DC and they just, you know, they serve in Congress for a term or two and they're just like, came here to make a change, came here to really see if I could, you know, turn the turn the Titanic, so to speak. And they give up, they either go back to state politics, or they just go back to private, private life. And, ⁓ you know, how do how do you tackle that? How do you

continue to go to Annapolis every year, try to get stuff done and, you know, beat your head against the wall, not and not give up.

Mike Griffith (44:55)
Well, it kind of goes, I gotta be honest, and not to...

Craig Fuhr (44:59)
It's not like you're getting paid, you know, some exorbitant amount of money to be a state delegate, you know, like so.

Mike Griffith (45:04)
No, I mean,

we make some money, we get a little bit benefit, but I have a full-time job that I have to maintain to allow myself the terrible habit of being a politician. Yeah.

Craig Fuhr (45:11)
All

But let me ask you this before you answer

what is what does it cost to get reelected as a state delegate? what what does what does it you know you're going to run again in what year 26? Yeah so what do got to raise to you know get the word out about about your candidacy?

Mike Griffith (45:28)
Next year, 26. 26.

It

varies by geography. It varies by district. It varies by political party. know, so it, you know, you know, my goal is to raise about 250 grand over a four year cycle.

Craig Fuhr (45:50)
That's not an insignificant amount of So all right, so you go to Annapolis, you're beating your head against the wall. Why do you stay?

Mike Griffith (45:53)
It's not.

I will want ice that we talk about this so in terms of first let's talk about how I'm able to operate down there I think goes back to my background you know I mean and and this is good.

I'm saying in my head, I know it makes me sound a certain way. I'm just going to tell you my best assessment. think from, you know, growing up in adversity and, know, in a, tough environment, a tough situation, uh, you know, in a, in a rough neighborhood, Aberdeen in the eighties was really tough. Uh, you know, you know, I mean, my dad was a drug dealer, like, you know, stuff I dealt with as a kid, you get a little resilient from there. Time in the Marine Corps. Um,

You know, door-to-door sales, the adversity, just a ton of adversity coming through. And none of that adversity compares to, I mean, whether you're with the General Assembly, doesn't compare to any of that. you know, I'm used to getting my teeth kicked in and dealing with these things and I can take a no. But also my business mentality, I don't take it personally in the General Assembly dealing with issues. I try to keep it on target. I try to keep it on the issues.

It's important to me not to lose my voice so I don't attack people. I don't attack their motives. I focus on the issues. As long as I keep my arguments on the issues, especially how it impacts my constituents, I have a voice and I get amendments on bills and I've killed bills and I get bills passed. So I can still, and I feel I'm pretty effective in spite of the environment. Cause it isn't the what, it's really the how.

And I get bills passed that I was told a Republican would never get passed. ⁓ I kill things and I amend things I was told I would never be able to affect. But it's a relationship business like anything else. You know what mean? Just like in business, the best company doesn't always get everybody's deals, right? It's the relationship. And like I'm sure you and the people you deal with, know, it's a relationship business and you'll give somebody the opportunity to fail or succeed based upon the relationship.

And in general assembly, you know, there are Republicans who accomplish nothing and there are Republicans accomplish great things. There are Democrats that accomplish nothing because they burn bridges and don't have relationships and they are adversarial in their approach. And then there are Democrats that accomplish everything. So it's really a relationship game. And because I feel like I can be effective, I have been effective. ⁓

I have certain expectations of what I can and can't do. Like the current bill, I knew I wasn't going to be able to stop that, right? We knew as a party, we couldn't stop that. ⁓ We did affect some things, but if it's a big, huge priority for them, that's going to happen. But there are lots of ancillary things and even some big things that we are able to get done. ⁓ And I'm going to be interested in doing this for as long as I feel like I can be effective and have the appetite. And when I lose my patience and lose my temper and...

feel like it's turning me into a monster, then I'm gonna walk away. And hopefully, you know, I can do it on my own terms.

Craig Fuhr (49:14)
So one of the things that Jack and I have been talking about quite a bit on the show, I don't know if you want to weigh in here, but I'll bring it up. We're seeing a lot of legislation around the country that local state and federal where municipalities and states are trying to limit the number of getting back to real estate here, trying to limit the number of houses that entities can own. Our feeling is, that

you know, a lot of these have just sort of died in committee or not even really gotten out, you know, gotten much play. But some of these, some of the, some of the proposals that we're seeing, like in Texas, ⁓ you know, California, a lot of states are saying that, Hey, we're going to limit the amount of houses that an entity can own. And Maryland ⁓ tried to pass, I guess in the last session ⁓ was withdrawn by the sponsor. ⁓

Excess ownership of single family residences, excise tax, basically ending hedge fund control of Maryland Homes Act of 2025. We have landlord and tenant proposals. know, Jack could probably speak more about that. You know, I'm sure you're hearing a lot of rumblings around town about those types of laws. You know, what's your take on any of them getting traction? My take is that they just keep taking a bite of the apple until they can get something passed.

But we've seen states say like, hey, you can't own more than 1,000 houses. We've seen states that say you can't own more than 10. 10 is not ⁓ a jack and frat of Dominion properties. That's like mom and pop who don't really believe in the stock market, so they want to have a retirement in some houses, some real estate, and rental income. What's your take on what you're hearing and the traction that that kind of legislation is getting right now?

Mike Griffith (51:08)
What it all goes back to the demonization of success, right? And saying that, you know, every landlord is a bad guy and property owners are bad guys. Here's the thing. And this is one of the reasons I support the investor industry so much, right? If it wasn't for investors, how many properties in the state of Maryland would be just in disrepair with no hope?

Craig Fuhr (51:34)
Half of Baltimore would still look like shit. mean, like, it's sick. Yeah.

Mike Griffith (51:36)
Right. It's because of investors, right?

and we were 90, you know, there's a lot of people who don't want new homes built. So the only path to get close to our housing needs is by rehabilitation of blighted homes, right? So it's solving a need. And also these homes come in at a lower price point because they're rehabilitated homes. And if

Democrats in Annapolis are at all serious about... ⁓

creating more wealth and more economic mobility, especially for low income folks in the state of Maryland, they should be embracing investors because the number one indicator for economic mobility and future wealth is home ownership. And the investors, the only people really creating, you know, homes in some of these areas where we need, you know, economic growth and economic mobility.

Craig Fuhr (52:36)
I don't see a huge target on the backs of guys who are out there flipping houses like you know doing doing significant value add to a house and bringing it back on the market. What we're more concerned about is the target on landlords especially landlords who own you ⁓

Mike Griffith (52:53)
But they don't see a difference. Remember,

it's in Annapolis, it's all one vertical. It may be different pieces of pie. And there's a bit of education piece where I'm always telling people, this, you know, this will hurt investors. This will hurt on Poland ownership. This will hurt the people that are coming in, risking their own money. Right. Can't worry about the big hedge fund. Right. How many of those are really out there gobbling up properties in Maryland? You know, right.

Jack BeVier (53:21)
None. There's not. There's

not a thing. Yeah.

Mike Griffith (53:23)
Right,

right. It's it's people that and again, it's not just people like you who own multiple properties that are, you know, landlords and investors. You know, it's a person who, you know, bought a house. And now because the environment, they can't afford their house anymore and they can't refi. So they get another place and rent their house just to make sure their house doesn't go into foreclosure of bankruptcy. Right.

It's those people that are impacted too by these policies we're making or trying to make.

Craig Fuhr (53:54)
We all know plenty of guys that own five, 10, 15 houses and they're just picking up one or two or three a year and they're building towards a retirement. And if those guys have a target on their back, that's a significant problem. And what we're seeing around the country, including Maryland frankly, is that those guys have increasingly a target on their back because ⁓ politicians think that somehow or other they're the rich guys.

Mike Griffith (53:58)
100%.

And they're not the bad guys.

And that goes back to what's so important about this conversation and what my role is in Annapolis and what frankly you and all your viewers role needs to be in Annapolis and state houses across the country is when this bill comes up, right? Cause all they see is, you know, the big dark money person that has a bunch of, you know, run down slumlord.

units, yada, yada, yada. That's what many of your landlord, that's what they think. That's what they see. But they need to see everybody. When that bill comes up for the bill hearing, there should be a hundred investors, a hundred landlords in the of Maryland showing up to testify saying, this is what we do. This is how we're helping your community. This is how we're helping the state. This is how we're helping the economy. Right. And this is why you need to kill this bill.

Craig Fuhr (55:12)
What's your take? That's

where I wanted to ask you that earlier. ⁓ What's your take on just the level of involvement that you get from just your constituents? mean, you're Maryland. Are these people vocal enough about what's going on in Annapolis that truly affects them or are they not? Is it literally, you know, I don't even know what the average voter participation in Maryland is, frankly, but you know, what's your take on constituent involvement?

Mike Griffith (55:42)
I mean, we always need more constituents to speak up, right? There's a ton of opportunity, but the problem is with the nature of the General Assembly in Maryland being three months, know, people work during the day. People have families. You know, they elect me to be their voice down there to fight the fight so they can go about their lives. And for me to do the best job I can. But on the big issues, especially ones affecting industries,

Craig Fuhr (56:04)
Right. Right.

Mike Griffith (56:10)
The reason that business to business services tax died all but one vertical was because 430 companies signed up to testify in opposition to it. 126 in person.

And unfortunately, the one area that didn't was underrepresented was the IT area. That's the place they got hit. Right, like. OK, this this group didn't come out in huge opposition, so we're going to let these guys have it right. But that's I mean, that's really it. And I'm happy to share updates with you that you can share with your audience next session when these bills come up. You know mean and send you instructions how to testify and you got to flood him. And if it's overwhelming.

Craig Fuhr (56:32)
Right, right.

Mike Griffith (56:54)
and then they feel underwater, that kills bills. It really does. Even in an environment where we're so desperate for revenue, they wouldn't pass the full business of business services tax because ⁓ the outpour is overwhelming. For example, another example, they slipped into the last second of session a fee, a 20 cent fee to view pages on Maryland land records. So I got a wind of this. So I led the effort statewide. ⁓

Jack BeVier (57:16)
Yeah, that sucks.

Mike Griffith (57:21)
I led a letter from my caucus. Again, you can see on ⁓ a Facebook, Maryland House Republican caucus. I led a letter because it would have impacted my business to the tune of $15,000 a month. A month is how that fee would have impacted my title company, right? Not to mention law firm. That's just what it impacted my title company, right? And we're a mid-sized title company. ⁓ So, and then.

Craig Fuhr (57:33)
A month.

Holy shit.

Mike Griffith (57:49)
You know, we started pushing that out to the realtors and the Maryland bar and to all these different groups and they got bombarded. Well, found out yesterday that they're not moving forward that fee. That fee is dead. Dead. Dead, dead, Right? It is dead, thank God. But that's because, you know, and people say, well, Republicans aren't effective in Maryland. Well, we started that fire. Now the Republicans didn't kill it.

Jack BeVier (57:59)
really? That's great.

Craig Fuhr (58:02)
Put your credit card away, Jack.

Jack BeVier (58:03)
That's great.

Mike Griffith (58:16)
But we started the conversation, they got all the advocacy groups involved and rained down hell upon the governor's office and killed that fee, right? So that's how we're effective as a super minority, but that's what advocacy means. That's when your groups come out. So when these bills come out, I'm gonna urge you to come out and testify against these bills. And these bills passed and you guys didn't show up, shame on you. So I need air support.

Craig Fuhr (58:22)
That's great. That's great.

Jack BeVier (58:39)
Hey, Mike, I this.

There's this I counted this in like city politics, that there's this perception that you can that you can punish the landlord, right? Like that you can like that even that concept, right? Like, so whatever your politics are, if you're like, hey, the rich guy should pay more. So let's go tax that business model or like the attempt to ⁓ the attempt to extract value or extract money from that perception.

Which by the way, like, let's not even debate that. Let's just, you know, let's just have that. Let's just say that that's what's good for society for a second, right? As a starting point, which I don't agree with, but hey, let's just, let's just start there. The mechanisms that are used that are that are attempted to me are like, painfully and like, I don't know, cynically hilariously feudal, right? Like the idea that you can

in, you know, put like putting it putting a higher tax rate on non-unoccupied properties, or that you're going to increase the fees to do stuff or, you know, registration fees, all the logistical things that they the hoops that they make us jump through. And, yeah, and like, you know, or elongating the foreclosure herbs are the the eviction timeframes, adding more due process to the eviction process. Like, yeah, which like, you know,

Craig Fuhr (59:46)
rent control. Yeah.

Mike Griffith (59:48)
Rank

Control is a big one.

Water Rights.

Jack BeVier (1:00:01)
On their very, you know, on the checkers level of like the on the checkers view of the world, I'm like, yeah, I get how you came up with that, right? Like, but that's like, but that but the world's not one dimensional, like checkers, there are secondary and tertiary effects to everything that happens. And so like, I think it's something like 7 % of the houses in Maryland and the state of Maryland, their own non-unoccupied, not owned by investors. But and so like the attempt to extract money from that 7 %

just leads what I do as an investor, right? Is I say, okay, like it sucks that the goalposts moved, right? So everything that I own is now worth less because you've made it harder to operate in this environment. So like, yeah, you move the goalposts on me and that sucks, but you only, you know, but that affected that negatively affects my value, right? The value of my property, ⁓ but it affects the 93 % of everybody else's properties too, right? Like it's a

Rock operating real estate is a business model, right? It's an operational model. And so like, if you increase the cost of operating, whether that's by a fee or by a, ⁓ you know, a logistical, you know, hoop that I got to jump through, I have I just price it in right, like I have to then price it in because I'm just an operator here, right?

Mike Griffith (1:01:22)
Unless

they put in a rent control, right, which now squeeze you from both ends, right?

Jack BeVier (1:01:24)
Yeah.

Yeah. that would be an exactly. And that would be a huge taking right. That like rent control would be a huge taking of value ⁓ from property owners. But it's not just a taking a property of value from property owners of like of the landlords. It's like the you know when when the when mom passes away with a house that hasn't been updated since 1920 and the kids go to sell that house.

they ain't selling that to another homeowner. They're only selling that to investors. And so the wealth has been extracted from that family unit, right? Like it's a destruction of wealth. It's a wealth destruction for 93 % of property owners. They're trying to reach in my 7 % pocket, but they take out of 100 % of pockets with that.

Mike Griffith (1:02:00)
W-w-w-w-w-

Well, I mean, it's funny. You were going back in terms of the tertiary effects, but you didn't go back far enough. We got to talk about the policy decisions that created the blight, that created neighborhoods that are underserved, that moved the jobs out, that devalued the communities. You know mean? Look what happened in Sparrows Point when Bethlehem Steel went, the economy dropped and those houses lost value because there were no jobs there and people couldn't afford to live there. Those were policy decisions, right, that led to that.

So you go even further back to the extraction of wealth in families. It all starts with the government decisions, right? That led to businesses leaving, that led to communities becoming poorer, that led to loss of, you know, so people would not be able to afford the houses, which led to blight. So the reason that 7 % of homes in Maryland are owned by investors goes back to you wouldn't buy, investors wouldn't buy those homes if they didn't get them in a premium.

Jack BeVier (1:02:45)
Fair. Fair.

Mike Griffith (1:03:13)
And they were at a premium because of policy decisions is devalued those homes. Ultimately, when you go all the way back. So and then they've created the mess. Investors are coming in trying to save the day. I'm sure they're trying to make money, too. It's not you're not doing it for, know, for you're not a nonprofit. You have to make money, too. And you also have overhead. Right. When some of these laws we've created that allow somebody to destroy the house with little to no repercussions or squatter comes in and destroys the house.

and you have to pay to rehab and bring that building back up the code and make it a livable house. That's also factored into your margin, right? That's not being considered by government, right? So.

Craig Fuhr (1:03:57)
To Jack's point, I

think, you know, it's the 93 % that suffer when a company like Jack, you know, and there's many of them in Maryland, when they go in and they're like, hey, I got a house here that hasn't been updated since 1940, and I'm going to pay less for it now because of all the regulations that are on me and the goalposts moving. And so that not only affects me and the price that I'm going to pay for this house, but it also affects the guy right next door.

It's going to affect him too because his house hasn't been updated since 1940.

Mike Griffith (1:04:25)
What?

This is exactly it. And to push back on Jack's point a little bit, with all due respect, I think one of the reasons that I've pivoted and focused so hard with my title company and my law firm on investor business is that we're not building new homes in Maryland. We have a huge housing crisis. The only path to restoring Maryland and our housing market is with investors.

Craig Fuhr (1:04:35)
He said, all due respect, Jack.

Mike Griffith (1:04:59)
That's it. And I see the investor business in Maryland being the one hair area of real estate that's going to absolutely explode.

Jack BeVier (1:05:09)
thing is, but this is a job, like everyone like there's this perception that we're like a bunch of rich guys like deploying capital, like, dude, I just can work for a living, like, I just find some shitty house. And then I go through a bunch of Leo, it's a manufacturing process, right? Like,

Mike Griffith (1:05:15)
No. Right.

I mean,

if you own 10 homes, you might be making 80 grand a year in your pocket.

Craig Fuhr (1:05:28)
I don't know if I don't think it's that. Yeah, right.

Jack BeVier (1:05:29)
If you own them free and clear.

Mike Griffith (1:05:31)
I'm saying like, well, whatever. I'm just saying like, you know, a bunch of real estate and

Jack BeVier (1:05:32)
25 years later, yeah. Yeah, yeah, yeah, yeah, yeah, I'm just playing. Yeah.

Mike Griffith (1:05:37)
not be like some guy driving a Ferrari. Right. This isn't like I own 10 homes and I'm, know, you know, I have a yacht. No, like, I mean, you're making a living by owning these properties. There's future revenue down the road. There's a there's a there's there's gold at the end of the rainbow. Right. But the day to day, you're not making a lot of money.

Jack BeVier (1:05:39)
Yeah, yeah.

And you know what's funny?

Yeah, the rainbow is 20 years long. The misperception is that the rainbow is like five years long. It's 20 years long.

Mike Griffith (1:06:00)
Right.

Right. That's exactly right. And this is all about.

Craig Fuhr (1:06:08)
That's a, and that's a lot, that's a

lot of banging your head up against the wall, trying to figure the business out of being a landlord. You know, there's a lot of operational activity going on there to figure it out. And Jack and I have talked many times, Mike, on the podcast about how if you buy, you know, let's say you own five houses, it's a 10 year business before you really see any appreciable effect on your work. It's, in terms of appreciation,

you know, hopefully you're getting some rent increases over the time and cashflow, but man, you're really banging your head up against the wall to keep that tenant happy. Keep them in there. ⁓ and ⁓ you know, just, just so happens that Jack and Fred haven't been doing it a long time, but yeah, it's not, it's not a glamorous business to be a landlord. And I just don't understand where, you know, the politicians in Annapolis think it is.

Mike Griffith (1:06:53)
and people.

And people think residential landlords is a white collar job. It's a blue collar job. mean, especially when you started out, how many times were you the guy doing the rehab? You guys preparing the drywall. You were in there managing the rehab and the work. and by the way, you're taking all the risk. by the way. ⁓ And risk, especially when you first started out, if something goes sideways,

Jack BeVier (1:07:03)
Mm-hmm. Yeah.

Mike Griffith (1:07:26)
You're in trouble, in real trouble. So we need to be as a state supporting these efforts. The only way Baltimore is going to make its way back, especially in some of these communities that are really troubled and create more homes and livable homes and nice homes and the pride of living in a good quality home is really through these investor networks and these investors, the ones boots on the ground, rolling their sleeves up.

And we've passed a law last year that I supported that created a non-continuous TIF, ⁓ which is actually really great for these exact things. So a TIF is a type of tax incentive for property for rehab, right? But we passed a law, which I love, for non-continuous TIF. So a TIF, all the properties need to be connected. A non-continuous TIF allows you to go into a neighborhood and say, well, this house, this house, this house, and this house, and then combine that into one tax credit and one application for that tax credit.

for the purpose of rehabilitation. So I think that's something we did do to help support this effort. ⁓ But no, mean, you know.

Craig Fuhr (1:08:32)
Jack, are you familiar

with that?

Jack BeVier (1:08:34)
Yeah. Yeah. And then the States, ⁓ I'm not sure if it's using TIF money. I just should, I should know the answer to this, but I don't. but there's like the $50 million, there's $50 million of state money that's being allocated right now in Baltimore, the Baltimore vacants, some initiative. ⁓

Mike Griffith (1:08:48)
Yeah, that's

a little bit different. mean, there's money being allocated, but this is a tax credits of Baltimore city a couple of years ago, pass a non-continuous TIF at the city level. But there were some questions whether or not.

Jack BeVier (1:08:59)
haven't raised it though.

They haven't gone to market with that bond offering though.

Mike Griffith (1:09:03)
Okay, well, there was some question as to whether or not it was legal, whether the Baltimore City Charger authorized it. So what we did, we passed it at the state level to give the mayor support. then now, right. Correct. So now the counties and municipalities have to enable that with Baltimore City already enabling it. Now that should be fully ready to go. So, ⁓ and if we can circle around after I can get some more information on that, but yeah.

Jack BeVier (1:09:14)
authorizing resolution or authorizing legislation.

Yeah, I think it's a great idea. I'm a big fan of it. I mean, the concept is, hey, we've got these vacant properties that are, you have a, if you have a 3000, if you have vacant property, it's got a $3,000 assessment. Maryland combined tax rates, 2.38%. You know what that tax revenue is? $72 a year. So let's, but if we, if the, there was a house on it, it'd be taxed on the improvements and the assessed value would be $200,000 a year. So let's turn this, let's turn. So if let's encourage

Craig Fuhr (1:09:31)
Jack is.

Jack BeVier (1:09:58)
let's try to figure out the gap financing or what subsidy may be necessary. Subsidy. I'll use that term very loosely, but like let's figure out what, needs to happen in order to spur the market to turn $72 a year of tax revenue into seven, into $720 a year of tax revenue. And then use that seven, use that $650 as a revenue stream to finance whatever is necessary to turn 72 into seven.

Mike Griffith (1:10:14)
And this.

And again, to all your points, Jack and Craig, and my frustration in General Assembly, we got to tell this story in Annapolis because not only now do you have a property that's making more tax revenue, it's also raised the value of the properties around them. So now we're making more tax revenues on all those properties. Now there's somebody living in the home who is spending money and they're being taxed in the community. and if the social issue is your most important concern, we just found a family home, right?

And you've given more civic pride, more community pride because you have less blight ⁓ in that community.

Jack BeVier (1:11:00)
And the costs of the negative externalities as it relates to vacants are very well documented as to how this is like just a cash suck from governments. we're also, you're going to see a bunch of ancillary benefits in the budget from lower budgets to deal with all these vacants and all the social ills that happen around vacants.

Mike Griffith (1:11:19)
100 % right. Yep. So that's one of reasons I champion this industry.

Craig Fuhr (1:11:21)
Mike, can't,

we spent about an hour plus with you here. Can't tell you how much we appreciate the time. And I know for those who are listening outside of the state of the Maryland, this must have seemed, you know, highly local. ⁓ But I can assure you that these, the things that we're discussing on the podcast today that are frankly Maryland based are happening all over the country, all over the country.

We've got the same issues in very, very similar communities. You could go right up the East Coast jacket. Philadelphia looks like Baltimore North, Boston, Chicago. Any post-industrial city is going to have the same exact policy issues that Mike has been fighting since 2020 in the Maryland House of Delegates. Any last thoughts there, Mr. BeVier?

Jack BeVier (1:12:10)
Mike really appreciate the time and appreciate the service that you're doing and the work that you're doing. So thank you very much.

Craig Fuhr (1:12:16)
Yeah, man. It's been awesome to have you on the show, Mike. You can come back anytime you want if something comes across your radar that listeners need to know about. Really ⁓ enjoyed meeting you at the Maryland investor network. ⁓ Continued great work. What you're doing over there with the title company and Alberts and Associates. If folks want to reach out to you and their local investors, if anybody wants to find it, find you investors or not, how can they get in touch?

Mike Griffith (1:12:42)
Sure, so ⁓ mgriffith at rossalbers.com. ⁓ It's the best way to get a hold of me via email. ⁓ And yeah.

Craig Fuhr (1:12:56)
Continue giving them hell down there in Annapolis, sir. You need more just like you down there. I don't know how we're gonna get there, but we need so many more just like you. Continue doing, keep, keep.

Mike Griffith (1:13:05)
Well, I'm

very grateful for the time and the opportunity to speak to so many folks. And just so your folks know, people are fighting for you guys, and we're not gonna quit.

Craig Fuhr (1:13:19)
All right, man. Well, that's the show for today. Hope you guys enjoyed it. Real Investor Radio with Craig Fuhr Jack BeVier. We'll see you on the next one.