Video Closed Captioning:
good morning good afternoon good evening
folks michael zuber one rental at a time
it is tuesday and you know what that
means we bring on omar the real estate
entrepreneur how are you doing buddy
good what’s up michael what’s up
everybody how much man so the first
video we’re gonna do probably for the
next year
is just an update on the high desert
right for me it’s an important market
because the high desert leads california
right i can get a sense in fresno by
understanding what’s going on in the
high desert it reacts first it reacts
with the greatest variation so uh what’s
going on in the market i think last week
we were at like
1086 or 1087 listings where are we at
now
we’re officially as of the 12th of june
a few days ago
uh two days ago
1142 houses for sale
or just properties for sale yeah single
families wow so that’s that’s a five
percent move in a week that’s
inventory is piling up and
that’s it’s it’s it’s this is coming
right
man
in a week you got five percent more
listings in a week
11 42 michael i’m just you know i’m
taking notes like we always do um
11 42 and we’re at
we are at 158 new listings okay 118
solds okay
93 pendings all right
and
57 back on markets
uh yeah the one thing again as investors
there’s a couple of places that i would
hunt right back on market i hunt
the first thing i’ve already told people
is i have changed my search from first
day listings to 15 days i will very soon
change that to 20 or 25. the second
thing is exactly that i want to fish
with back on markets
why
you don’t know for sure maybe the
listing agent will tell you maybe they
won’t
usually there’s a reason why it didn’t
appraise
the buyer got cold feet there was a
condition something
i am fishing for better deals i am only
doing great deals so i want to fish
where my chances of motivation go up
days on market back on market hunting
ground hunting ground go to work
you know what let me add to this michael
the back on market okay i’m a seller i’m
selling a property right but i’m also on
the hook for another one and and i don’t
need to sell but i want to make sure i
get that other house now my motivations
changed if we back if if the buyer
backed out on my deal guess what you
come in michael and you say listen i’m
going to give you an offer right now you
write it up do whatever maybe you use
the listing agent
and you send an offer for 50 grand less
than what i was already in escrow for me
i’m like okay well bird in the hand uh
yeah you know what that let’s do it
because i don’t want the asset no more
i’m already emotionally attached to the
new property that i’m in escrow with or
that i’m closed on so guess what i just
you came up on a 50 000 um what do you
call investment yeah thank you very much
yeah again folks
real estate
and the other thing we got to talk about
is i don’t know if you saw this they
this may not have hit your radar
yet but yesterday
omar dude yeah i know 0.75 percent of
interest increase yeah but the mortgage
the 30-year mortgage rate the best rate
your best buyers are gonna get now
six point one eight percent
what have we been saying it’s coming
seven percent man yeah it’s coming with
bad credit at seven percent oh with bad
credit all day it yeah it might be seven
and a half now but the reason i bring
this up is we are going to see true
demand destruction right there are folks
in the high desert
who six months ago qualified for the
median home
they just don’t qualify anymore cnbc ran
an article with diana olek i don’t
remember where their numbers came from
might have been housing wire might have
been black i forget
but basically
40 of people that were qualified six
months ago aren’t qualified today you
want to talk about demand destruction
and the high desert in california is
going to feel that right your average
income is not orange county income
no not at all it’s it’s you know 100k
85k and nowadays that doesn’t get you
much it really doesn’t and this is what
i’ll share with you too michael this
makes a great point because if you’re
saying
6.18
on a traditional fha loan 30-year fixed
that’s going to put a lot of people out
like they’re not going to be this is
where you’re you as a seller you as a
professional are going to have to get
creative and give away some closing
costs so they can buy down that rate
give away some closing costs so it
doesn’t require that much out of their
pocket so you can sell your asset and or
investment so if you’re a flipper and
you’re making 50 gs on a house well
guess what go make 40 000 give away 10
000
to sell your damn asset 100
i’m dropping all mine because yes i was
in that same boat of throwing it on the
market it appreciated so much but i
bought so well that i’m able to now
compete with everybody else and i still
make a profit you cannot go broke making
a profit absolutely yeah
yeah there’s there’s a couple of things
again the high desert is going to be
very interesting i
you know it gets hot in the high desert
i.e the name right you think in july i’m
thinking july august it might be
crickets
it just might stop i mean i’ve seen i’ve
seen the housing markets in 22 years
stopped twice
once in q4 of 2018 for about a
six to eight week period rates jumped
everybody kind of got a little wonky and
then obviously march of 2020 the world
stopped for lots of things including
housing
i got a sneaky suspicion that
transactions i don’t know what what is
the record for at least i mean maybe
next time we can figure out what’s the
month you’ve done the least transactions
because i think you’re going to break it
i think august and the high desert
you’re going to break a record for least
number of transactions
you you might be right man i mean i i
don’t we’re training as a company as a
as a team
where we’re at
last last month we’re at 31
closed which is pretty good yeah and
then
net this this month we we might hit the
same but i don’t i think that we’re
probably gonna be 25 26 right then july
because june there’s not much
acceptances right now exactly this is
what i’m talking about man it’s it’s
even the best i mean like let’s just i
mean i’m
well it’s my show i can do what i want i
guess
so let’s say you did 31 last month
i know you’re the best of the best i
know you invest all this but if the
market’s not there the market’s not
there i mean you might do correct 14 or
15 in august because august is like hot
hot hot not a lot of people not
normally it’s the slowest month of the
year yeah or is it july
nah you’re right august august no end of
july august september yeah you know it’s
also the last video
yeah last piece of summer
and again if that happens to you think
about what happens to the entire market
the onesie twosie agents nothing
i really do think the high desert is
going to lock up in august
you know i i i don’t want to be a debbie
downer no but obviously we have not had
a
um a year that looks like this
in quite some time yeah i mean even this
was prior to covid this is 2019 even 19
we still had an increase yeah 18 we had
an increase
17
it was still good yeah and so this is a
different you know you’re saying q4 of
2018 that was a stop march of 2020 to
stop now question for you yeah if you
think that now i’m going to put
michael’s uber on the spot august
of 2022
okay
you think there’s might be a stoppage
there maybe the beginning part of
september now question for you with
inflation with everything this interest
rate hike of another 0.75 and then
probably another one before the end of
the year to recap or re you know to to
repopulate the cash flow that was
printed out right
do you think
that the feds will do that and then
there’s gonna be a absolute
destruction of the um
of the interest rate back down to four
percent three percent to get people to
start again
yeah so i get asked this a lot uh and i
think most people have it right but
their timing is off everybody wants it
faster
no i believe the fed is on a path that
takes the fed funds rate which as of
this recording is still 0.75
okay it will be one and a half i am
hoping fingers crossed tomorrow
i believe that funds funds rate is on a
path to it at least
four percent
whoa
yeah at least and that in my current
prediction was the summer of next year
it might now it might be the march of
next year at this point
right it’s happening fast so what does
that mean that means the real estate
industry the real estate market that you
are you and i in is about to get
very very slow because if you have a
funds rate at four the 30-year money
could be at seven
it could be touching eight seven and a
half yeah could be touching eight for
the non you know bad credit folks so
again housing market is going to slow
this is going to be 1981 all over again
where housing transactions crashed 50
and in some markets and it could be the
high desert right because again you you
happen first and react the most it might
fall 60 every every market is different
every buy box is different please go do
your work in your buy box folks but i’m
talking nationally
50
maybe 60 crash in transactions we are
crushing affordability we are crushing
the move up buyer builders aren’t
builders will
back off buildings starts are way down
this market
is about to get glacial slow
which is great for investors what have
we been begging for as investors
we want the market to slow down sellers
yeah congratulations they’re coming
um but it also makes the exit harder for
flippers right oh 100 but this is where
this is where you um you stack your
doors man
like
terms baby
all terms i’m taking this from you
michael i mean um
and being a what do you call a uh uh
you know a multi-faceted professional
with buying selling wholesaling sub to
hybrid type of investor and or agent
stack this is where you go and represent
if you’re a professional out there go
and represent
um a bunch of buyers and sellers stack
your cash out of flip make sure it’s
good if you’re not gonna flip then make
sure there’s enough spread so you can
still get
the 30-year um dcsr loan pull out some
money stack the door stack the door
stack a door with your commission checks
this here i think that this is probably
another
2011 and 12
um of being able to borrow some money
still inexpensive right because we were
paying 12 percent michael you i have i
have um and
you’re going to be able to get it at 10
at nine and a half ten ten percent with
a point or two but because of that now
you’re going to be able to be like all
right well i’ll i’ll you know burn this
one i’ll burn that one
you may not pull out all your money out
because because the appreciation is not
going to be there yeah but
you’ll stack the door man and that’s
like this is this is huge i will be
stronger coming out of this than going
in
yeah all right this is the time
again when i talk about the real estate
market you got to remember that owner ox
make up roughly speaking 30 or 70
percent of the market investors are only
- over the next couple of years it
might go 60 40. the investors that do
the work the investors that only do
great deals the investor who doesn’t
give a rat’s ass about the cost of
capital because you’ll do great deals
whether it’s 8 10 or 12. it’s time to go
right and again
i’m adding skill sets there are things
that i don’t know that i need to add
like pre-foreclosures and all this other
stuff
it’s time to go ham it’s
in real estate investors
you’ve always wanted a slow market
congratulations i think you’re going to
have the slowest market i’ve ever seen
in 22 years it’s a good time coming
yeah i love it this this is good michael
where can people find you omar
guys just follow me on ig at omar
underscore alfaro
or omar alporo.com thanks buddy