Graham Sold Everything... Here’s What He's Buying

**Dave** (0:00)
Graham Stephan built his entire brand on real estate, becoming the voiced rental property investing on YouTube, starting with a small $59,000 house renovation and turning that into a multimillion dollar empire. And now, he's selling it, not one property, he's not trimming his portfolio, he's selling everything. And at the same time, he's shutting down businesses, selling his forever home, and essentially simplifying his investments across the board. When someone like Graham Stephan walks away from the thing that made him, you pay attention. What does he see that everyone else is missing? Today on Dumb Money, he sold everything, and we're going to show you what he's buying.
Hey there, Dave here, along with Chris and Jordan. We are Dumb Money. Welcome to Dumb Money Live. Quick reminder, if you don't mind, smash the like button for the almighty algorithm. Graham would be very proud if you smash that for us. Thank you guys for joining us this morning, especially those of you trolling us in the live chat for delaying this episode not once, but twice. Technical difficulties scheduling on our end.
You might tell Chris is remote right now. He's many time zones away in Hawaii right now. I don't know if you can fill us in on anything that you're working on there.

**Chris** (1:09)
Yeah. I'm here for a reality type, I guess, YouTube show.
You had to pick, David, that floating platform in the middle of the ocean they built.

**Dave** (1:19)
I have it. I'll try to pull that up and we can show a little bit more about what you're doing later in the show.

**Chris** (1:24)
Yeah. It's not fun.

**Dave** (1:25)
We do want to talk to Graham Stephan, selling everything. He posted this video. They got 240,000 views on YouTube and a post on X that just went crazy viral, 3.6 million views so far. It's all about why he's selling all of his remaining rental properties in LA.
He goes into the financial reasons, the non-financial reasons, the broader context of real estate in California.
But the thing we're most interested in is what he's doing at the proceeds. Because he gives a lot of financial reasons. We've been saying this for years. Real estate, it's messy, it's time consuming, it's not liquid. And Graham finally realized that his net cash flow after all of his expenses and taxes, insurance, maintenance, all of that, he's only making like four to five percent, which he says is like, why am I taking all of this extra time and energy to do what I could do with a treasury bond, right?

**Jordan** (2:26)
Yeah. So when you guys sent all this stuff to me, I don't actually watch Graham. So I thought that he was like a dividend investor guy. I didn't realize he did real estate. Is that bad?

**Dave** (2:38)
It's been a while since you've hung out with Graham. No, Graham is the buy and hold S&P, and he got his start in real estate and continues to manage or continued to manage a bunch of properties in LA.
But he's just buy the S&P and hold the S&P, and he's changing that. He's come out with a whole new strategy. So we have things to talk about. But basically, LA real estate is not passive. It is, you know, people talk about passive investments. It is anything but.

**Chris** (3:10)
Oh, Dave, no real estate is passive. And by the way, Graham makes you look like a degenerate gambler in terms of how conservative he is with his money, which I always have thought was just ridiculously too conservative.
This is such an awesome thing when I saw that note go out, because every time we're around him, I'm always obviously promoting, get more aggressive, dude. Get into stocks, get leverage, dude. And I felt like the transition was happening even before he sent that note out. And when he did the post, I was like, yeah, it finally happened.

**Dave** (3:46)
Full disclosure, Chris and I have been on his podcast a couple of times. Chris is on it all the time, and you are continuously telling him, get more aggressive. Your investments are basically, you're 95% in cash. Why?

**Chris** (4:03)
Well, the last time I was there, he bought Amazon at 197, right? I fell below.

**Jordan** (4:10)
He's looking right by.

**Chris** (4:12)
I know, and I think that's part of it. He's just like, what if I would have been doing this a long time ago? But here's the thing, this is a conversation, it's an argument that we've been having with so many people and so many friends for the last 20 years. And quite honestly, it was a harder argument back in the day because most of the appreciation, and I don't think people truly understand this. I don't even want to say most, but a good chunk of the appreciation in buying houses and renting them out for cash flow, it's all about the increase in value of that home over time. It's not about the actual cash flow, because more times than not, the cash flow that you're generating from a rental property that you purchased is so much lower than you think it is, okay?