Closed Captioning:
one
good afternoon everybody it’s friday and
we have the fantastic michael zuber from
one rental at a time here and yes your
screens do not uh
confuse you he’s a pretty sexy tie dude
it’s not bad dude i couldn’t find my
dark purple so my light purple i didn’t
want to be too much of a shelf because
yours is yours is like a blue and pink
right yeah blue and pink yeah it’s got a
little blinging i don’t know if the
lights are picking it up oh look at that
wow yeah
dude i only kept the really expensive
ties this has got a little jewelry in it
i don’t know if you can see that’s
really nice see i’ve got a nice tie but
i’m a big watch guy oh yeah i left my
watch at home damn it i got to bring the
watch
i got a couple of those too yeah yeah
it’s the i won’t wear a gold chain so
the only my only option is a watch so
that’s kind of how that goes so mike
what we wanted to talk about in segment
two is just kind of talking about the
market you know the constant concept of
bubble bubble bubble it’s a bubble i
think you know what we did in the first
video was we really just tried to change
mindset on crypto versus real estate and
you know really what the what that
argument really needs to be or that
conversation needs to be because you
want to move that ball forward what i
wanted to do is kind of move the ball
forward on this you know bubble concept
because i think there certainly can be
bubbles but you know let’s kind of talk
through it and and kind of give people a
different mindset on this yeah i got
some comments here recently that really
led to this video
they’re basically saying things that i
agree with
we are in an everything bubble uh all
bubbles pop
uh you know don’t you remember the last
housing bubble right bubble was is being
thrown around
and
you know what
i remember playing with bubbles with my
daughter right blowing them and all
bubbles pop if that’s an accurate
statement they do
um
and then i’ve been telling people that i
don’t i think we’re gonna have a housing
slow down so for me i’ve been trying to
tie all of this together in my head and
i think this is what it is
i actually think the housing market is
not a bubble
i think the housing market is a balloon
okay
right and the difference is important
because again all bubbles pop
not all balloons do right you can blow
up a bubble a la real estate in 2006 789
that eventually pops too much air
stretches pops explodes it is amazing
thing
however
bubbles
i’m sorry balloons they can have slow
leaks
bubbles if you just let go of where you
can deflate at different rates
and that is actually what i think is
going to happen in real estate
i believe what we are seeing today right
so i do believe affordability is a huge
problem affordability is stretched
just like 2007. i get it i know the math
i talk about affordability all the time
sure
i just don’t see the underlying
cascading of inventory of 3 million
foreclosures because of all bad lending
right the arms the 2 and 28 all of that
so what i think is going to happen
is
uh we have jerome powell raising rates
we’ve already seen the 30-year up to
five and
five and a half we six and a half for
investors we are seeing supply
destruction which nobody’s talking about
but i am
so what i see going on right now is a
pretty significant um letting go of the
balloon
so what is going to happen over the next
three five eight years in housing
is
we are going to um have wage inflation
into an environment where the fed
eventually cuts rates i think much later
than most people think but i think we’re
going to have wage inflation and
eventually lower rates years from now
that will allow the balloon to not pop
so i’m not comfortable calling in a
housing bubble because you’re right all
bubbles pop
to me i think the real estate market is
a balloon can it pop absolutely sure
absolutely
i’ve been through it i have seen it we
lived it i and more importantly i called
it yeah i took action and got out ahead
of time
and believe me if i saw it
if i saw a bubble i would sell again
sure
i just don’t i mean i i frankly i hope
i’m wrong i’ve set up my portfolio if
i’m wrong it’s great but i just don’t
see it so to me i think the housing
market is a balloon
i think i think what we have is
lower transactions
um for the next several years we have
flat relatively flat
re nominal we have
flat real
housing growth and it goes up nominally
based on whatever inflation is so you
got to understand economics to get what
i just said but yeah i don’t see
i don’t see the housing market being a
bubble that has to pop since
so i had to i had to create another
image so i used a balloon yeah i mean i
think that’s accurate i mean you know
with my kids i like to you know squeeze
the balloon real tight so it makes that
wretched screeching noise
and you know what that’s i think it’s
going to be a wretched screeching noise
there’s going to be there’s going to be
plenty of pain but for people that are
also prepared for it
for people that think that we’re talking
our book
in real estate staying expensive
you’re stupid
that’s
no no i’ll say it because that’s what we
get in the comments all the time that’s
not the math
no yeah it is for we’re not real estate
agents people right exactly we’re not
selling anything our hope is cheaper i
cost basis goes down down that’s our
hope you know we don’t root for a crash
because we know the impact that it has
on people and families because you and i
both lived it firsthand dion lived it
firsthand
ellen kelly lived it firsthand so many
of your experts we’ve all lived that
housing and security firsthand we live
understand
so because of that we’re not sitting
there going yeah yeah yeah we want to
make more we need to make more we need
to crush everybody else that’s not it
we’re merely looking at the market and
trying to anticipate for ourselves for
our business and for all the people that
we employ not employees but contractors
i put 600 000 into contractors last year
wow that’s a lot of money that’s 10
decent jobs right and they didn’t work
for me full time that was just guys
coming and going and and the contracting
work so if you think that we’re talking
our book because we think that real
estate is going to be resilient and may
go down 5 10 15 20 over a multi-year
period and that rates are getting really
expensive
a great deal is a great deal
based whatever the rate is because it’s
based on your return on capital for that
deal
but then going the next step
yeah i’m talking the opposite of my book
i want if this were to fail i want to be
in the position
where i can then
invest into that space for people that
work prepared and then yeah i’m going to
get their asset that’s how it goes i
would again if
selfishly yeah nothing would be better
for me than another 75 percent crash oh
hey i’ve lived through it yeah b i have
a reputation i could if if the market
crashed 75 in in fresno
i could probably have 10 million dollars
lined up in 30 days
you you do you think you would
i think if it crashed even 50
you would be double in size within 24
months
uh yeah no question i mean
yeah there’s no question again when i
said 10 million bucks it would be from
private investors it was a big thing i
did
but yeah i would um
i did really well last time i bought
everything we could
i would i would go ham
yeah i i’m again fresno real estate
crashes 50 75
uh i am fairly confident that inside of
30 days i could have access to 10
million bucks and buy
everything
yeah
yeah i hope it crashes
yeah i mean that was the thing for us is
that i was in my
mid late 20s when it crashed and so i
was doing everything i can to kind of
put deals together
and getting private money for
that age and that lack of experience it
was tough it was really too hard to do
yeah i was
yeah last cycle 2010 i borrowed just
over 3 million bucks
um
it would it would be so easy to to
to get 10 this time oh i think the
number would be so much bigger
yeah it would be mike it’s fun to think
about it’d be so much bigger like you
could pick up the phone you could
probably get 10 million from a lender
yeah maybe
yeah it’s it’s it’s um
again if my words matter i hope fresno
crashes 75
crash crash fresno fresno crash
yeah so again we want to change people’s
mindset change people’s mindset from
this bubble concept to the balloon
concept number one number two is
we’re absolutely talking the opposite of
our book we much if if it crashed that’s
yahtzee from me and for mike because we
did all the work
to prepare
seven figures dry powder ready to go
ready to go and more most importantly
again if people go back and watch our
playlist we set up the debt structure of
the stuff we own exactly it can’t be
called it can’t be called like we i have
a few that can a few
major commercial that can be that said
the return on that capital and those
deals now is crazy and i’m using that to
pay that down so if it does risk if it
does if it does ever go down 30 or 40 if
it did i’m still fine they still
wouldn’t call yeah and again this time
around it’s a completely different
mindset from banks too on calling those
loans oh yeah
last time they were like call the loan
call the loan yeah cause they didn’t
didn’t own it they had it was yeah it
was all daisy chain paper correct and
you didn’t actually have to take the
loss on your paper yeah until you sold
it that’s why stuff was on the market
for or off market and on their books for
two three four years yeah because they
didn’t want to have to stack and take
all the laws they were being very
strategic exactly they’re like it was
how much can we eat this exactly
literally a little bit out and a little
bit out and a little bit out and that’s
how we got to where we got to
so again
please understand watch the whole video
really understand what we’re talking
about here when we say bubble versus
balloon and recognizing that we’re
talking the opposite of our book
because the crash
wouldn’t hurt us
if 30 of my renters stopped paying rent
i would recognize it obviously but i’m
still in business
still in business no problem and if
that’s happening i’m still going out and
buying more
still going on buying more and then the
last thing that i wanted to talk about
this concept to mike was of the letting
out of the balloon
we’re still not seeing that on the
rental side
on the roofer side right because we
talked a lot about the houses and things
like that what that market is and that
market itself but let’s talk just for
one more second about the renters
because one person pointed out to me
well you know and i think you actually
answered the question too they said
something to the effect of
well if that’s going to happen with
housing then what about rents you or
what would move rents i think you said
uh 10 vacancy
yeah i think was your answer it was yeah
again people are
rents so again i’ve been doing this 20
some odd years i have had
flat rents i have i had a little window
of time in 2006 where i had to do
move-in specials half off first month
rent half deposits it was the roughest
the roughest time to be a landlord was
- i agree
and that’s because everybody was buying
homes that’s right everyone
people that we wouldn’t qualify and
approve for a rental unit
we’re getting approved for a mortgage
no
repeatedly happened and i had i have
that’s not happening now mike nothing
like that’s happening that’s why we have
the best pool of renters yeah that we’ve
probably ever had and we’re going to
have even better pools going forward
because people are being dequalified
from buying that’s right they were right
on the line and then rates doubled oh
can’t buy now but they have a dependent
it’s
yeah so what would what would cause
rents to go down
the only well you know world war three
maybe sure uh but you know the black
swan but rents go down when you have
huge vacancies and ten percent
a decent number if somebody got to 10
vacancies if if i got to five percent
vacancies i’m lowering rent let’s just
be clear 10 which certainly caused me to
lower rents we’re nowhere close
well that was the other thing that was
my answer so my answer your answer was
10 vacancy my answer was the other side
of it which is okay i had i had
on an average everyday joe dated unit
b uh
c class property in a b class area i had
40 applicants in 12 hours yeah it’s
there’s it’s
rent is rent is at a record 18 i think i
remember on the daily financial news 100
1 827 it’s never been this high right
and it’s going to go up in the short
term yes it will
it will and we’re seeing more formation
of
uh
the nuclear household yep you know the
uh roommates brothers and sisters yes
you know older brothers and sisters yeah
i get it and well here’s the other
because i asked them
okay so you know why why you want to
live with roommates they’re like well i
can live in a studio apartment by myself
for 1200 bucks a month and pay all the
bills or i can live in this really nice
four bedroom home
multiple bathrooms all the extras and i
can do that for 750 bucks it’s a genius
move i hope more people do it again get
on the the whole thing we’re trying to
get here for folks is to get on the path
to financial freedom it starts with a
better financial future and house
hacking or rent hacking is a great i
want er i mean if you can i think most
people should give up the studio go get
three roommates yes
take that 500 make it discretionary and
come build up a little nest egg and go
by with three and a half percent down go
dominate go dominate a hundred percent
mike tell everybody where they can find
you my friend one rental at a time
youtube books
instagram and eight a.m saturdays
pacific one hour live stream i try to
answer all questions
uh i’ve not been very successful the
last three or four weeks but i try it’s
because there’s 200 people watching now
that’s not a bad thing no it’s awesome
it’s so awesome get people need to get
there they need to get there early they
need to get their question in and make
sure so one of the things that i love is
i love having the conversation with
folks but i i would love to have fewer
questions from a few people
and that way we can get through a bunch
of people’s questions like unique so
they get their question answered so
that’s guidance from my live stream
because i’m rude like that so 11 30 a.m
eastern time on sundays but click like
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we will see you in segment three