Jun 18, 2022
Is it worth it to invest in gold?
Bringing in years of experience working for the oldest continuously family-owned and operated precious metals dealer in the US, Robert Goodin answers why we should add gold, silver, and platinum to our portfolio. Robert also gives his perspective as a real estate investor and talks about networking with leaders in the business, finding value in the market, and helping others get the financing they need.
[00:01 - 04:12] Networking is Key
- Robert shares his background
- Selling precious metals and side hustling in real estate on the side
- Building relationships with successful people
[04:13 - 10:25] Investing in Precious Metals
- Comparing the US dollar to gold
- Why gold is similar to real estate
- The potential of silver and platinum
[10:26 - 22:16] Starting Small in Real Estate and Scaling Up
- Scouring the market to find value
- Turning around raw, underappreciated land
- How marketing and subdividing are keys to profitability
- What Robert and his team do to help people who are struggling to finance a property
- Working with notes and the importance of pre-payment penalty
- Finding the right people
- Robert’s thoughts on debt
[22:17 - 24:31] Closing Segment
- The best piece of advice Robert has received
- Reach out to Robert!
- Links Below
- Final Words
Tweetable Quotes
“Gold still makes sense. Countries buy gold. Central banks are buying gold.” - Robert Goodin
“You've got to know your market to be able to identify value.” - Robert Goodin
“It's about the right people. You can kind of tell when somebody has your interest in mind.” - Robert Goodin
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Connect with Robert at robert@mcalvany.com or 8556385616! If you want to know more about the precious metals market, check out their show, the Golden Rule Radio on McAlvany Financial's YouTube channel. They post every Thursday!
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Want to read the full show notes of the episode? Check it out below:
[00:00:00] Robert Goodin: There's been times when it only takes 50 ounces of gold or a hundred ounces of gold to buy the median home price in the states. That's a good trade. So gold buy real estate. If it's too high, it's over 200 being, I think, above the average. Well, real estate, may be a little too high compared to something else like a commodity gold.
[00:00:31] Sam Wilson: Robert Goodin, a good old boy from Tennessee who believes in the golden rule, like his YouTube report, Golden Rule Radio, Robert, welcome to the show.
[00:00:39] Robert Goodin: Hey, thanks. So glad to be here.
[00:00:41] Sam Wilson: Pleasure is mine. Same three questions I ask every guest who comes on the show: in 90 seconds or less, can you tell me, where did you start? Where are you now? And how did you get there?
[00:00:50] Robert Goodin: Yep. So I grew up in Tennessee, rural Tennessee, outside of Chattanooga, had a family who had some businesses. They were in the boat dock business Center Hill Lake, Dale Hollow Lake, Fontana back in the 50's, 60's, 70's. So my mom grew up. Doing that running the businesses with my grandfather. And so I kind of always had an eye for trying to recognize opportunity. You know, what makes sense, what makes sense in a business sense and societal sense.
[00:01:20] Robert Goodin: And then what doesn't make sense when, when to not say something does work went to college at Sewanee: The University Of The South, got exposed to some of the, you know, older money crap. And my grandfather had always said, you know, those, those types of people can employ you. They can give you opportunity.
[00:01:37] Robert Goodin: And it was about the people, not the education that I was going to get there 'cause it was totally different than what I expected walking in there. And so I recognize that he was a smart dude and he always said go west there's opportunity out west. I ended up right out of college, worked for SunTrust bank, did some mortgages, stuff like that for a couple of years.
[00:01:57] Robert Goodin: And then, through a family that I went to college with, they had an opportunity here in Durango, Colorado. I quit my job cold Turkey at the bank didn't know what I was going to do, but I packed up my car and left Tennessee, headed out west, ended up in Durango, Colorado, and started working for them, met some more of the right people.
[00:02:15] Robert Goodin: And I've been doing precious metals for the last 15 years. I worked for the McAlvany family. They're the oldest continuously owned and operated precious metals dealer in the states. The founder helped get gold legalized in the seventies. So I worked for a neat family and my side hustle real estate.
[00:02:37] Robert Goodin: So I was at the real estate conference there, The Best Ever Conference, met you a few years ago, Sam, and then saw you again, not too long ago. So been doing side hustle real estate deals, started small scaling up and, you know, I sell precious metals as a, as a career, but the real estate thing's worked out well, Colorado real estate's been good to me.
[00:03:00] Sam Wilson: That's awesome. I love your story there. There's so much to pull out of that. The one, the one thing that I like what you said, which if you're listening that don't know about Sewanee and it's pretty probably one of the prettiest campuses. I think that existshere in the States. That's a, that's a gorgeous campus there in east Tennessee, but you know, it is, it is about I think building your network.
[00:03:22] Sam Wilson: And I think that's a, that's a repeating theme I hear on the show. It's not, you know, the, the, the kind of overused phrase is not what it's, who, you know, but. It is, and it's putting yourself in those situations. And I think that's a, that's something that you just do over and over, right? I mean, it didn't end when you went to Sewanee, you had to continuously, and you still do put yourself in the right environment in order to grow.
[00:03:43] Robert Goodin: That's right. Yeah. I think it is about the people. It's kind of like the saying don't marry for money, but look for love among the wealthy.
[00:03:56] Sam Wilson: I've not heard of that. That's pretty good.
[00:03:59] Robert Goodin: You know, so my, my grandfather encouraged me to get involved with people, you know, who had businesses and, and learn from.
[00:04:08] Sam Wilson: Yeah, no, that's, that's absolutely, absolutely true. Tell me, you know, a little bit about, let's talk about gold and precious metals for a minute. I don't want to stay here for too long, but certainly want to hear, you know, what it is that you do, what you're seeing in the market, why people are going to gold. Just, just give us your overall market sentiments, because this is not something that I know that much about, and certainly don't specialize in a day-to-day.
[00:04:34] Sam Wilson: Sure. I think the interplay between the dollar being what everybody considers as liquidity and capital and gold, I consider gold capital. I go between gold and real estate.
[00:04:50] Robert Goodin: The US dollar index right now, hit the highest level a few days ago since 2003. And it sure doesn't feel like the dollar is strong. If you go to the store and buy something. But there's weakness in Europe specifically that has been driving the dollar index way up. And I think it's, it's a better form of measurement to measure the dollar price in some commodity like gold instead of looking at the dollar index because the dollar index is at a high that it hasn't been, there was a high in 2020, and during COVID because the dollar was liquidity, it was the safe haven currency. There was a high in 2017, but the dollar poke just above that. And it hadn't been that high since 2003 on the index, right? Well, obviously you don't feel that buying something and being a consumer here in the states, but the dollar index is at a high. And the last two times a dollar index was, is a high 2017, gold was around 1212 to 1300. Then again in 2020 at a high again around where it is right now. And gold was in the 1600, 1650.
[00:06:01] Robert Goodin: Today, Gold's around 1900. So you've got gold, kind of stair-stepping higher. And I think that's a better barometer for how powerful the dollar actually is. So I see gold as a safe haven going forward especially. And it is, there's some overlap between the real estate market and gold and silver, because you can do precious metals in your self-directed IRA.
[00:06:26] Robert Goodin: So it's one of the reasons we were at The Best Ever Conference. You know, the, that group already, you, a lot of them have self-directed IRAs that they're doing real estate deals, Well, you can do precious metals in there as well. So there's a lot of overlap there and it's a mindset of a tangible asset.
[00:06:43] Robert Goodin: You know, gold is basically real estate that you can move hide and, and trade and liquidate. Liquidity, it is a big, big thing I think, in today's market.
[00:06:52] Sam Wilson: Yeah. And certainly, certainly, you know, traditionally gold has been held as an inflation, you know, as a, as a hedge against. So, you know, seeing, seeing that, and I love, I love the idea of not heard anybody talk about that yet about comparing gold to the dollar index, because you're absolutely right.
[00:07:10] Sam Wilson: None of us are going to, the, none of us are going to the gas pump or the grocery store and paying five or six bucks a gallon for diesel or gas. And then, you know, you didn't pay in 25% and 30% more for the same product and going, yeah. My dollar is buying a lot more. Clearly our dollars not buying more. And so that's a, that's a really intriguing kind of interplay between.
[00:07:30] Robert Goodin: Yeah. I think it's about what you measure it against, you know, measuring anything against anything. There's kind of a relationship between gold and the average price of a home in America where it takes average 200 ounces of gold to buy the average house.
[00:07:45] Robert Goodin: So I'm not just measuring it in price of the home or price of the piece of property, if you look at certain times and periods over time, there's been times when it only takes 50 ounces of gold or a hundred ounces of gold to buy the median home price in the states. That's a good trade. So gold buy real estate.
[00:08:04] Robert Goodin: If it's too high, it's over 200 being, I think about the average. Well, real estate may be a little too high compared to something else like a commodity gold. So it's a a way to measure something. We do that with golden silver. We look for which one is undervalued or overvalued at any time, and there's a relationship that they have, that there's a consistent range that you can actually trade. But anyway, let's jump to real estate. If you want to. I don't know where...
[00:08:29] Sam Wilson: I certainly do. I've got one last question for you in, in the precious metals markets. Where do you think, today, which we're recording this and obviously this can change even by the time this goes live, today is May 3rd, 2022. And we're recording this. What is the value play right now in precious metals, the gold, silver, palladium. What is it?
[00:08:49] Robert Goodin: Yep. I would say. It was silver and platinum. Silver is about half of its all time high. What other commodity is half of it's all time high? Most of the other commodities are at all time highs.
[00:09:04] Robert Goodin: So silver has a range that it's previously traded, that it could double from here and just be pushing back to an all time high. I think it's ultimately going to a higher, all high time high. But silver's good value. Platinum is about half the price of gold. Platinum is 5 to 10 times rare than gold, about 12% of its supply comes from Russia, which could put some strain on the price of platinum.
[00:09:29] Robert Goodin: And so platinum's usually about one-to-one or even higher than the price of gold. So selling it a 50% discount to gold, I think platinum will ultimately have the day in the sun being a number of thousands of dollars an ounce. And right now it's below a thousand. With that said, I also like gold as kind of the ballast of the ship, right?
[00:09:49] Robert Goodin: Gold is less volatile than the other industrial metals, like silver and ,platinum have a lot of demand from the industrial side. So I I'd say that gold still makes sense. Countries buy gold. Central banks are buying gold. They turned to net buyers of gold. So I like to have a mix because at certain times one can fluctuate dramatically to the other one.
[00:10:08] Robert Goodin: And I would maybe sell ounces of gold to buy silver or vice versa. But silver and platinum are definitely your, your underappreciated prized assets right now in the metals.
[00:10:18] Sam Wilson: Awesome. I love it. Thanks for taking the time to break down your industry expertise there in the precious metals markets. Appreciate that. Let's talk about real estate. What's a, what's a deal you're involved in right now? Kind of, kind of just give us a case study on one of those.
[00:10:33] Robert Goodin: Sure. I started small. And I was patient probably shouldn't have been, being in Colorado in 2007. You could have bought anything from between 2007 and 2020.
[00:10:48] Robert Goodin: And it was a good value, but I, what I did is I, I got on, I got my buddy, who's a partner of mine to, to set me up with a list of all the properties that are coming to the market. As soon as they get posted, I get an email and I would just scour through those. Look for what's out there because you've got to know your market to be able to identify value. And so I waited years, but I was looking at every single thing coming on the market, not in just set the range tightly of what I could afford. I set the range pretty wide because certain properties may be way out of your reach in terms of being able to buy it, and make it work, and be profitable, and produce income.
[00:11:32] Robert Goodin: But there may be something to that property that's out of your reach, where you do want to go use debt and actually make it work because you've got these added value things on there. So I, I was too patient at first in 2007 to about 2010, but I wanted to really look at what the, being able to identify value.
[00:11:53] Robert Goodin: What is the value? So I scoured through all the properties coming on the market for awhile before I really selected something that made sense 'cause then I knew that I was buying value. I knew what else was out there.
[00:12:04] Sam Wilson: Right, right. What were you buying?
[00:12:07] Robert Goodin: Single-family home at first, but also before that, buying land. Raw land, kind of just underappreciated and land that, you know, I can buy it at a lower value than what I thought it was worth. And ultimately a lot of those pieces were not marketed well. It was kind of finding a crappy realtor who didn't know what they were doing, and buying land, and then turn it around, and selling it.
[00:12:36] Robert Goodin: So I think my first deal was like, I paid like 16 grand cash for a deal. Six weeks later, I sold it for 64. So, you know, since then I've done similar things and it's worked out. I hadn't lost money with it. And you know, we just, we're about to cash out on one and we've been looking for opportunity again, the same way, looking across the board to find a piece that's valuable, you know, under, underappreciated, but valuable.
[00:13:03] Robert Goodin: And there's just nothing there, Sam. I mean, we've looked at within three or four or five hours from where we are, and we're probably not going to 10 31 exchange because there's just nothing there yet.
[00:13:16] Sam Wilson: When you say there's nothing there to buy, you're saying that there's no...
[00:13:19] Robert Goodin: No good value.
[00:13:21] Sam Wilson: And you're saying the land and the land market?
[00:13:24] Robert Goodin: Land. Specifically land.
[00:13:26] Sam Wilson: Were you guys taking that and subdividing that and selling them off as parcels? What was, what was your strategy?
[00:13:32] Robert Goodin: Some doing that as well as just flipping. And I know that kind of goes against a lot of maybe what some people are familiar with being able to flip land for a profit. Right. But yeah, subdividing was, was also key in the profitability.
[00:13:49] Sam Wilson: Yeah. I mean, what are you guys, and I went, I've had a couple, you know, intense land investors on the show and we've, we've bonded into depth. Certainly try to find them, put those episodes in. I don't, but you know, but, but put those episodes in the show notes, but what, what were you doing? 'Cause it does kind of go against the grain. If you came to me and said, Hey man, here's a piece of land that's put on the market for a year as not sold, but I want to buy it and sell it for a lot more. I'd be like, no, I'm not in. What you do differently?
[00:14:17] Robert Goodin: It was poorly marketed. That was really it. Getting really good pictures, talking about elevation, but like specifics that added a little bit of value to somebody just walking across the board and seeing it. But mostly the splitting of land was, was the profitable one.
[00:14:33] Sam Wilson: Who was the end buyer?
[00:14:36] Robert Goodin: Ah, yeah. Good question. Because that is key. They were people who couldn't afford to get a standard bank loan. So a lot of it was, we bought it, split it, and owner financed. So we carry the note and that allowed somebody to get into some place that they could camper drop a mobile home and we'll look to doing some mobile home parks.
[00:15:03] Robert Goodin: And a lot of them are just, we're just overpriced. But a small scale of that was allowing somebody to not have to put 25-35% down. We'd take 10-15% down and owner finance it. And then, you know, a year or two later, we'd sell the note, full face value note and move on. Also it helped them to get traditional financing.
[00:15:26] Robert Goodin: So my parents did that a little bit in Tennessee with renters. They would help the renter, you know, improve their credit score and get to the point where they can actually buy. And so you're doing, you're adding value to somebody who can't get into a property because they just can't afford it.
[00:15:42] Sam Wilson: Right. Right. Or they just, are they just, for whatever reason don't have the skillset, the skillset or the, they're not lendable from a, from a bank standpoint.
[00:15:51] Robert Goodin: Correct.
[00:15:52] Sam Wilson: Right. And I think that's a great way. Certainly done plenty of that as well.
[00:15:55] Robert Goodin: And it, and it was about the people. I mean, we did look through who we were going to be lending to, instead of just taking whoever's out there, because good people just need a lift up a little bit.
[00:16:10] Sam Wilson: Oh yeah. Oh yeah. Done plenty of that. Where, where you have people that, you know, making six figures a year, but have made some mistakes a few years before and they're just, they just can't get bank financing.
[00:16:20] Robert Goodin: That's right.
[00:16:21] Sam Wilson: Those have been excellent, excellent products where you're like, okay, put your money down. And they pay on time and it's great. Who did you end up? Who's an end buyer of notes on things like the on ?
[00:16:33] Robert Goodin: We knew a few people who were willing to buy it. And one thing I learned in that process is to always have a prepayment penalty because a buyer doesn't necessarily want to get into the due diligence of looking at buying the note, and then they buy the note.
[00:16:51] Robert Goodin: And then they get bought off, you know, the, the borrower pays the thing off the next month. They didn't collect anything. They did a lot of due diligence. And so the prepayment penalty was key in actually finding a solid buyer. That was something we learned in the process.
[00:17:08] Sam Wilson: Yeah. Were there any other surprises along the way, maybe that you've learned in your real estate investing?
[00:17:15] Robert Goodin: It's about the right people. And I mean, that's one of the reasons that I think you and Ibecame friends, I'll call it. That is, you know, you, you can kind of tell when somebody has your interest involved or in mind. And, you know, we named our YouTube show Golden Rule Radio after treating somebody how you want to be treated. And it's about the people, whether it's somebody who is your client, whether it's some partner, whether it's, you know, the person who you're lending to, it had to be the right fit.
[00:17:46] Sam Wilson: That's great. Yeah. Absolutely. Absolutely. But no, I think you're absolutely you're spot on. I mean, that's the thing we, we talk about all the time here is, is, is when you're a passive investor, especially it's gotta be the know, like, and trust factor. And if that's not there, then like, what are, what are we absolutely doing?
[00:18:03] Sam Wilson: Tell me, give me your thoughts on using debt and leverage. I mean, you're a precious metals guy that typically puts you in a, in a less, in a more risk averse category, right? You kind of aren't you aren't running mainstream with everybody. So that would probably, in my opinion, lend itself to not being in love with debt, like the rest of us real estate sickos are. Is that a fair assumption or what are your thoughts that?
[00:18:30] Robert Goodin: One of the main reasons that I haven't been using debt is my partner doesn't like that. I'm okay with it if it makes sense. I like fixed rates rather than variable, especially with the interest rate environment.
[00:18:39] Robert Goodin: I think we're going to see over the next five to 10 years, you know, fed chairman's talking very similarly about how Paul Volcker back in the early eighties raised interest rates to curb inflation. Well, he, the current president and the fed president, he, he knows who butters his bread and I think there's maybe not as much interest rate hikes coming as maybe they think, but that's a whole nother conversation.
[00:19:06] Robert Goodin: I'm okay with debt fixed rate. I like it, but my partner doesn't want that.
[00:19:12] Sam Wilson: It doesn't want that. I mean, what, what are, what are some of his maybe, I mean, cause obviously you agree with him because you continue to invest with him. So what are some of the thinkings that you get that you, you're in alignment with? Why you say, Hey, you know what, I'm good not using well.
[00:19:25] Robert Goodin: Yeah. You know, with land deals, I think there's a lot more risk than something that's an income producing property with what you're doing, Sam. I really like what you're doing, you know, because you, you've got kind of an already formed a business model.
[00:19:38] Robert Goodin: Right, right. You know, kind of what to expect, like where you can add value, where you can improve the bottom line, the land deal. Do you not going to produce income like you would with your, your deals. So there is a lot more risk there getting stuck with the property. We didn't want to be making payments on these land deals if we couldn't move it. So different category, I'd say in the real estate market that actually made us kind of be more of a cash buyer rather than borrow, borrowing on it. I have used debt. I bought a vacation rental 2020, right before COVID hit and there was a value-add type of property completely renovated it.
[00:20:20] Robert Goodin: It's paying for itself. We're using it about half the year banded for itself and I've been offered double whatever it for. So I I liked that. I looked at borrowing on another unit this week and, you know, the, the terms on it were more, mainly almost 6%, just a, you know, a longer term rental. And so rates have definitely affected things and are going to continue. So it has to make sense. You've got to, you gotta be a numbers guy, like you are to make that doubt work for you and know what you can expect to be able to pay and have your margin.
[00:20:56] Sam Wilson: I was talking to an investor. Gosh, just before this call. And he called and he's like, Hey, you know, we're having a big cash out on the sale of one property, buying something else.
[00:21:06] Sam Wilson: So I'm going to have cash from that. And he goes, but on the new acquisition, do I use cash to buy it? Do I put a HELOC on that property? It's the small farm homestead properties like, man, I could get, or do I get long-term fixed rate? You know, which way do I, when we, we kinda just went through the mechanics of all of it.
[00:21:22] Sam Wilson: No. I'm not comfortable with the interest rate risk right now. You put a HELOC on a property and maybe it's a half a million or a million dollar property. And we hit 16, 18% interest like the early eighties. Whoa. That's a tough nut to cover every single year. And I doubt you're gonna be able to do that on a million dollar property.
[00:21:40] Robert Goodin: That's right.
[00:21:41] Sam Wilson: Yeah. I mean, so that, like you said, you know, it cuts both ways. That's a, that's a beautiful thing when properly structured, but improperly structured and, and it. It can really, really, absolutely hurt you.
[00:21:52] Robert Goodin: I've used variable rate, you know, in a fluctuating rate that HELOC, I've got those set up to be able to use those for a short amount of time.
[00:22:00] Robert Goodin: Like, I know when I'm going to be able to pay that back. Right. Very versus something that I'm going to buy and hold for a while. I'm good with the fixed rate and I'll pay a higher rate even on a fixed rate, something like that.
[00:22:13] Sam Wilson: Yep. No. Good. Couldn't agree more with you. One last question here, Robert, before we sign off, certainly appreciate you taking the time to break down the, the precious metals markets for us.
[00:22:21] Sam Wilson: Tell us, you know, about your land investing, investing in short-term rentals, your thoughts there on debt. And you know what you know, I guess the other cool piece you brought to the table was that was the U S dollar index and how maybe that's a fault. Indicator of what the dollar is actually worth.
[00:22:35] Sam Wilson: I hadn't heard that before. Certainly also really enjoyed that and just got love, love what you've done in real estate and the precious metals markets. If there were a piece of advice that you've received from a mentor over the years, you'd say, man, that's the best piece of advice I've received. Any idea what that piece of advice would be?
[00:22:51] Robert Goodin: There's two types of people in the world. One pays interest, one earns interest. So, you know, you can relate that to debt or you can relate it to the deals you're doing, which you know what you're going to earn from it, you know, to, you know, you've got some variables, but you do have the numbers down.
[00:23:10] Robert Goodin: I like what you've sent me in the past. You have the numbers down and that's what matters. So you're either going to be paying interest. And not earning or paying interest and having a margin. And that's what I think you're about. What's your deals. I like it.
[00:23:26] Sam Wilson: Awesome. That's cool, man. Robert, appreciate you coming on the show today. If our listeners want to learn more about you, what is the best way to do this?
[00:23:33] Robert Goodin: They could email me robert@mcalvany.com. It's M C A L V A N Y. The YouTube show that I do that posts every Thursday is called Golden Rule Radio. It's on the McAlvany Financial channel on YouTube that comes out every Thursday. It's about 10 minutes, metals market specific, but email or call. My direct line is 8 5 5 6 3 8 5 6 1 6.
[00:24:02] Sam Wilson: Awesome. Robert, thank you for your time today. I do appreciate it.
[00:24:05] Robert Goodin: Thanks, Sam. My pleasure.