good morning good afternoon good evening
folks michael zuber one rental at a time
back with his good friend matt the
lumberjack landlord how you doing sir
i’m doing super awesome one was fun
let’s do two yeah this one was fun let’s
do two so hey uh one of the things i
wanted to talk about with you is i think
it’s very clear
uh that the housing market for the next
couple of years is
it’s not going to be running as smooth
as it should be right as i’ve said the
fed broke housing we don’t need to re we
don’t need to go there again they just
did
but to me that means there are parts of
the market that are really exposed to a
lot of pain
so i thought we should play some ping
pong go back and forth and talk about
those areas uh you’re the guest i will
let you go first what are one of the
areas you think are set up for a lot of
pain
you’re nothing if not a gentleman
michael
um i think the
i think
it is the
supporting cast
that is in the most trouble
because i think as i look at it you know
agents you can be a buyer’s agent you
can be a seller’s agent you’re going to
be whatever agent you need to be right
now
but i think that they can also go into
rentals they can go into foreclosures
they can go into other things and so as
much as everyone says all real estate
agents are screwed all the stupid ones
are screwed all the lazy ones are
screwed if you’re a worker and a grinder
guess what you’re gonna make a lot of
money and you’re gonna make even more
money because a lot of these people
haven’t set any of that network up so
you better get cracking now and do it
now but the people that are going to get
crushed
mortgage brokers
crushed
home inspectors
crushed
um
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like a lot of like so landscapers won’t
be as much because banks actually
contract with them to take care of the
properties but like general maintenance
guys or and certainly construction crews
those guys are gonna get crushed well
that and remodelers anything again if
you’re in an industry that benefits from
lots of housing transactions
and we see half as many transactions
of writing on the wall right so yeah
that’s one uh the the one that i
actually think is most at risk is um
i think airbnb i think a lot of people
got again if you’re doing airbnb right
like anna kelly does you know kind of
the top a properties
you’re going to be fine i’m not talking
to those i’m talking about all the
newbies that ran to airbnb because it
was easy money the thing that i’ve
learned about real estate in 22 years is
every now and again there’s this new
widget this new toy people play with
and you know a couple people have
success then they market it more people
come in they probably have medium
success and then
the wave comes
the stupid money comes you cut corners
you down select
and uh you lose your ass so i think
there’s a lot of kind of second-tier
cities a lot of second-tier properties
uh that people are going to lose money
in my world that’s an alligator uh
they’re gonna
uh and they bottom so high that they
don’t make sense as monthly rentals so i
think there’s going to be a lot of
people trying to desperately sell which
is going to impact some markets more
than others
uh but yeah i think i think there’s some
airbnb concentration that’s
it just has to reverse i think
yeah i agree um i think that the next
people that suffer are the older
landlords ooh
i think the older landlords suffer
because they didn’t raise the rents now
they’re going to be trying to raise the
rent in the in the flight of all of
these crazy cost increases
they might try to increase rents now the
quality of tenant has been drastically
reduced
um we actually looked at the numbers on
the latest unit that we posted it was a
three bedroom
we had about a hundred applicants in a
week
and 17 of them met the credit
requirement wow
wow only 17 so call it 17 of them credit
and our credit requirement is 680.
so
it’s not it’s not 720. right it’s not
720 it’s not 700. so i think the older
landlords now they can turn it they can
turn it around they can they can sell or
they can do a sub two or they can do our
seller based financing they have some
out yeah but to continue as a landlord
will be really really hard because the
quality of tenant is pretty bad yeah
i think one of the most unfortunate
places where the pain is coming so i
think airbnb is first
but i think right behind it are what’s
called limited partners or lp’s
inside of syndications oh i gotta tell
you man there are some lps that already
lost their their money it’s already gone
and they don’t even know it yet right
it’s it’s like oh i bought this hundred
unit or 400 or a thousand units i got
you know it’s at a four cap i i got
bridge debt of one year and don’t worry
we’re going to value-add and i mean
what are you doing right you there’s so
many people that got lucky the last two
years
and they just kept they just keep moving
their chips to the center of the table
it’s a very addictive thing
and um the casino’s going to come
calling and um
now not all i don’t want i’m by no means
saying all i’m just saying too many
there are too many lps that over the
next 12 to 18 months are going to reach
out to us and say i lost it all or worse
yet they came calling for a capital call
and i told them to f off and then they
lost it so
yeah so let’s do one more uh because
again i think there’s a bunch of pain
coming it’s definitely in in parts of
the market uh you got one more
yeah commercial oh yeah commercial so i
talked to one of my banks
they have a team
of
uh a team of uh you know basically
brokers
um in the last 30 days they have done
zero applications
wow
zero it’s not a tiny team
and they’ve done zero
zero now just so people know when you
say commercial that’s everything
multi-family office retail everything
it’s everything it’s basically anything
five units and greater
they have done zero applications nothing
so
that’s that just tells you that because
again that market is very interest rate
sensitive right shorter terms you have
to you know 25-year ams not 30. it’s
just so many differences that people
don’t see
what you really have is you have a push
and pull between price and expectations
i think it was um
rod khalif
he talked about he was already he was
already in contract and because rates
got him he had to he has to retrain and
lower like 10 million bucks or something
yeah all of this is happening right now
so yeah i think i think commercial is
going to soften
it’s just interest rate sensitive it’s
it it’s soft like puppy poo after a week
of rain
it is
it is not yet not good
it is not we’re not picking that up
honey exactly no one wants babe nuclear
winter is the next time i touch that
thing that’s right this is like this is
what we’re looking at and so i look at
it from a from a commercial perspective
and what’s really interesting is i said
let me ask you a question and this is a
rude question and you don’t have to
answer it it’s like go ahead and i said
seeing as how you have literally nothing
to do what are you doing now no
he goes um i was like i know you don’t
want to answer it but i already know the
answer so if you tell me i you’re just
going to tell you i already knew the
answer right he goes
yeah we’re looking through all of the
loans that reset in the next six months
yeah of course
because they’re gonna go from mike
they’re going from the mid threes
to the sevens
yeah think about that again that’s think
about that that’s why i think lps are
crushed right
right but if you like these are things
that were bought think about this these
are things that were bought in 18
because it’s five-year death large
so these are things that were bought in
18.
18 you’re just getting the asset you’re
putting money into it you’re getting it
up to speed then you finally get a
tenant in 19.
then
pandemic
pandemic
no everything working from home
and now they’re finally starting to come
back to the office in limited share
and
your debt is going to completely
restructure and likely raise your
payment 60 percent
again this is opportunities for folks
that have relationships go meet these
bankers i’m going to send another note
to a couple of banks that i work with
this morning saying hey just so you know
i’m out here
let me know if there’s somebody in
trouble and real quick mike talk about
can you just talk about that a little
bit because i don’t think people
understand
that bank is not going to come to you
and say i need 5 million
they’re going to come to you and say we
just want you to assume the paper
responsibility for the product yeah so
i’ve i’ve i’ve done
almost 50 units this way uh in the last
crash all you have to know all you have
to do is be a performer
um i bought
i’m trying to be accurate i bought an 18
and a 10
um nothing and then i got the 10 next
door i had to put 50k in escrow for the
repairs which was
i had to do it anyway
and all of them gave me the debt all of
them whacked the rate because again they
just wanted somebody they just want to
know banks don’t want to operate this
stuff especially if it’s in rough shape
like two of my three
they’re like get this off the books
this this is a liability this is bad
yeah it was it was a it was a bad asset
but they lended against it because the
market was going insane yeah because the
numbers made sense it was they made a
decision based on the spreadsheet not
based on the actual asset itself
so these are the areas where again
network network network i’ve gotten in
front of all of these different people
and said if you have that
underperforming asset and you just need
someone to assume the loan at least
let’s have a conversation about it there
might be mike i might get into a hundred
unit that way yeah you could
yeah the biggest i looked at last time
and maybe it’s just because i didn’t
have the scratch or the reputation it
was 40 some odd units
yeah it’s yeah the more you know the
bigger scratch the reputation you’ve got
20 years on you they should probably
bring you anything
right that’s the whole yeah exactly i
certainly call them enough
this is awesome man do me a favor where
can people find you lumberjack landlord
on youtube and instagram at 11 30 a.m
live streams on sundays awesome thanks
man thanks