STAYING MOTIVATED IN THE FACE OF A BEAR MARKET & RECESSION. How did we do it? Fear or Pleasure?

Video Closed Captioning:

good morning good afternoon good evening

folks michael zuber one rental at a time

back with his good friend and content

creator matt the lumberjack landlord how

you doing buddy i’m doing awesome it’s

been a fun day so far we talked about a

lot of fun important stuff for landlords

absolutely this is gonna be important

one for both new investors and people in

the game and folks who’ve been at it for

a while like us and

that is really how do we stay motivated

and i want to break this into two

branches i want to go back to the

beginning

when your dollar menu was your reward

right remember those days way back when

and

you know so let’s go back there first

yeah you know let’s rewind the clock

it’s 2010 11 12 whatever it is

uh you’ve got a couple of units it’s

hard you know tenants aren’t paying

yeah you know you’re you’re working

12-hour days at your day job and doing

this on the side you have no

you have probably don’t have any

certainty that this is going to work out

because you’re still in the very

beginning and it

might even feel like it’s slipping away

yes how did you stay motivated and keep

getting up every day because it would

have been easy to lay down and give up

um

you got to get off off the mat like

that’s just the way it goes like

otherwise you’re dead like that’s the

true story if i didn’t do work that day

and i didn’t get in a position to sell

more software or find a way to cut cost

or find a way to get a tenant out that

wasn’t paying or fine if i wasn’t doing

that actively on the daily

it would have just imploded

and i would have been financially ruined

which is that simple and you know what i

for have the utmost confidence i would

have

declared bankruptcy gone upside down

lost my shirt everything all the

horrible things that happened and i’d

still be a millionaire today because i

would have found a way back because

that’s just the personality type right

because it’s just you keep on driving

you keep on pushing so

yeah i mean the motivation there was um

be able to not be homeless that was the

motivation that’s a pretty big motivator

yeah like that’s why it was i mean

yeah i mean i was calling accounts i

mean i was a territory manager in the

states and um kind of northeast

and i just i i asked the director i said

hey listen there’s a bunch of unclaimed

accounts west coast and and further

can i can i call into you you’re cool if

i call into those he’s like yeah sure

they’re not they’re unnamed go for it

i tried to do everything i could to

sell into unnamed accounts and grow a

bigger territory

thankfully a year and a half later i was

rewarded by them taking that territory

and giving it to somebody thank you for

growing

now the seeds are growing and somebody

else’s

what’s that we have a lot of revenue

coming out of that patch we should

probably put a rep in there probably

built it jackass yeah yeah so but yeah

but that’s life right so for us it was

it was every man on like i was ashley

was also going through college yeah

right so

so i didn’t have an option so

i know what it was for me and i’ll

answer it after so i don’t sway your

response um for me was it the fear of

failure or was it the you know you saw

some you know

on high better life in the future

clearly right it’s kind of

was there one of them or

i think it was so i think it was

i think it was more fear-based than

pleasure-based yeah it was more

fear-based so

as you get

as you get deeper into the journey as it

gets easier it becomes far more

pleasure-based and less fear-based i

hope people get that it was the exact

same for me in the beginning i you know

i came to real estate after suffering a

horrible loss right eighty percent

i could not let that happen again i

carry that rock for a decade yeah it was

all fear-based yeah all fear-based right

we whacked expenses all fear-based we we

you know we took my one saturday and we

drove five hours to look at one can you

imagine driving two and a half hours

look at a house for 10 minutes and then

drive two and a half hours back i did

that repeatedly

and um it was all fear-based it did

become

i want to say

once i looked up because again ryan i’m

just a grinder head down one step in

front of the other

i think i don’t think i really looked up

and really started to pivot to pleasure

based as you’re saying

until we started getting private money

right so we so we’re buying we did some

1031s we got commercial financing the

market rolls over we start buying from a

hard money lender which is freaking

expensive 12 point 12

3 points

65 of purchase not value

it’s just like stunted our growth and

then

because of bigger pockets because of an

old web website called

wealthbuildingpro.com which i was just

writing to kill time

we started borrowing millions and

millions of dollars

and once i realized that people wanted

to support what we were doing and get

paid for it

and we were adding units once a month or

every three weeks

i was like

ah

this is pretty cool but that was after

like

nine years probably maybe 10. i mean we

yeah we never really got to we were

always dealing with banks and so we all

know how much fun that is yeah um you

know so we were always in with banks and

i think for us

we were

much further behind from the perspective

that everything that

you know necessity was the mother of

invention

so we were having to move into all of

our apartments i remember the first i

remember the first building that we

bought

that

i didn’t have to live in

that’s that’s you still remember

oh yeah that’s the one yeah yeah it was

it was like

wow we don’t have to we don’t have to

move into this and it was in 2000 yeah

it was like 2009 or 2010 so it was after

the crash

and it was a building that i bought for

55 000

wow a building so multiple units yeah it

was uh it was it was 2700 square feet of

commercial space on the first floor with

two parking lots oh wow and it had a two

bedroom apartment upstairs what is that

what is it today you still own it today

worthless oh yeah yeah i stole that

building today it’s worth like 380 grand

i mean it’s it’s no it’s no bitcoin but

it’s pretty damn close yeah so that’s

the crazy thing is it’s like that

building even even though that

building’s worth that now

i have uh

a part ownership in

you know the essentially the cabinet

company that’s in there

so i get my cabinets at cost

i get the guy to come out and measure

them the day after i asked for it

i don’t deal with all the same like i

tell people flat out yeah i mean i i can

do a kitchen for six grand and it’s

granite countertops

there’s a reason i can do it for that

and so it was just about a matter of

building the business and the apartment

the funny thing was is the um apartment

upstairs

that covered taxes insurance i mean just

that apartment covered that and so i

could really make investment into that

guy that says i want to do a cabinet

shop

and i’m like okay i will give you the

world’s most ridiculous rent just so

long as i get all my stuff at cost right

so yeah it’s just one of those things

where but yeah i remember buying that

building and that was the first building

that i bought that i didn’t have to move

into

yeah so let’s talk about that pivot

because i didn’t know where this

conversation was going so the beginning

of our journey at least for me 100

fear-based yeah i now can think of

uh when it changed i haven’t been

fear-based in

i don’t know

10 years yeah probably yeah about the

same yep yeah yeah kind of when we

started to come out of it in 2012

you know when it was like

okay i think things just moved up a

little bit like we got through the three

million a year foreclosures yeah exactly

we were starting to see

real you know we’re starting to see you

know 90

of what sold wasn’t a foreclosure yes

that’s amazing yeah there was a time in

my market where yeah 95 plus a couple of

months were all either for short sales

or foreclosures it was crazy yeah it was

crazy but yeah it’s it’s pretty

interesting the other thing

right the other thing that i i now know

kind of again

fear is not part of the equation anymore

is i’ve i’ve learned i can do other

things sure right i never flipped a home

and i flipped one by accident that i

wrote about in my book it was purely an

accident right the government did

something and gave me 50 grand so i took

it

um

but i flipped 53 properties yeah two and

a half years after i retired and made

a lot of money

um

so i know values and i created something

from scratch right i did this whole

pride of ownership rental so i bought

dumps did my little special song and

dance and sold them for reasonable

prices

um

so i it’s i guess i’ve learned that

yes i know values yes i can do this and

i’ve been through multiple cycles so

right i think what you do is you build

um at least for me i think i built

belief that i could handle what’s coming

sure so i don’t know well i think you

know the thing that we all have to know

in in any business

you have to be ready to pivot

be watching things be trending things

and when charlie munger says don’t be

diversified if you’re diversified you’re

an idiot yeah

generally speaking i kind of agree with

them

i wasn’t diversified for the first 10 or

15 years exactly like for me if i could

own nothing but duplexes i would

the problem is is that now you know in

looking at these markets

now those duplexes are getting extremely

not even overpriced but they’re catching

up to value you know when a four hundred

thousand dollar you know nineteen

seventies vintage house

four hundred thousand four hundred and

twenty thousand but the duplex is going

for five hundred and twenty thousand

and the rents are only about ten off the

duplex has far better value of course so

the duplexes now they’re running into

the sixes and low sevens oh wow a lot of

these i bought in 10 11 12 and i bought

them for 180 190 200 grand so they’re

three four x which is great but i’m not

selling because the rents have raised

even faster exactly the rents on those

units are 3 000 aside

it’s 6 000 bucks a month and on a 375

mortgage even with taxes insurance

you’re still on a 20 return yeah

so now it’s slowed down because now i’m

looking at a six

handle yep and they don’t return twenty

percent they’re returning eight nine ten

yeah you just you just stamp you stay

pat

hey still watching the market every day

every day you have there’s one yeah

there’s one that popped on this morning

that i might i might go look at it’s a

little bit of a project but there’s the

value add there but to your point with

the flips and stuff like that flips

broke break my heart

i do i get the work done because i can

you know because i’m in there so i’m

getting the work done i see the work i

know that we’re doing it right i know

we’re getting something quality

and so because you’re then a part of it

like you helped bring it back then it’s

like i don’t want to sell this because i

know that there’s crap selling on the

market for the same price yeah you know

here’s the deal right so let’s just say

i made a million bucks flipping 53 homes

i should have kept them all i was gonna

say i bet you wish you kept them i wish

i kept them all i didn’t need the money

but again it was a proof point that i

could

you know find and create value i should

have kept them all i should have kept

them all i should have done cost

segregation

again i look at it and i look at my

portfolio and even the stuff that i sold

last year is up markedly

the rents still don’t make sense on

those single families they don’t make

money

and so i look at it and just say it was

it was right to let that thing go even

though it’s worth more because i’m not

in the appreciation game i would have

made another 50 had to hold it for

another year however the money that i

took from that 1031 is making me like 8

000 bucks more a month in rent exactly

so i i’m okay with that scenario but to

your point it’s tough and when you sell

those things

i’ve only ever sold one duplex

just one and it was just because it was

the per like you were saying it was the

perfect stone yeah and it’s still up 20

from where i sold it but the rents are

starting to get they’re starting to cap

they’re starting to cap out yeah there’s

a yeah that’s going to happen so would

it be fair to say that as of today

you’re you’re you’re motivated

yeah i guess what motivates you today

i mean what motivates me today is

um

i’ve spent

10 000 20 000 hours creating a skill

what motivates me today today is still

utilizing that to make money and to

to help a problem you know we don’t get

top of the market over top of the market

rents for a lot of our places

so i’m still part of the solution of

creating affordable housing

um and i know for us like

it’s hard to tell everybody no

um but it’s you you give that up for

that one you can hear the joy in their

face and in their voice when they’re

just like

thank you so much we got it yeah we got

one so much yeah

yeah

i’m struggling with this and i’ve said

this in other interviews

the why right what are you doing what

are you doing so for me i’m trying to

anchor on on

i’m trying to help you know a million

people kind of move in this direction it

still doesn’t feel real i’m comfortable

saying it

but yeah

i don’t have the same motivation to add

more units right i am going to build an

adu this year because i want to try

something different

i talked about my adu numbers yesterday

morning that’s gonna happen but it’s

it’s more about

seeing what else is out there right so

um

yeah i gotta i gotta i don’t have that

same fire that was you know in the

beginning that fear-based fire that i

just wouldn’t stop

it’s it’s it’s just different i don’t

know it’s weird i mean i i do get that

like you i mean that’s the thing that

you and i talk a lot about off camera

right is

how many yeah what’s the number money is

that i still don’t i mean

we’re at i think 117 now i i i don’t see

200 yeah but i don’t know i have no idea

i really truly don’t know it really

depends on

you know how deep the crash is how bad

things get you know other so we started

looking at you know non-profits and

things like that that we can try and

help out and you know potentially get

housing

and then because we know buildings

because we know how to maintain them

setting up uh setting up something for

them where they can put

you know it’s a maybe a older hotel or

something like that that someone’s just

like you know after cobin already just

get rid of it

that makes a perfect place for

low no income to be able to go stay but

it has to be properly managed if you

want that asset to not you know be

worthless in 10 years yeah exactly but

so we’re working we’re kind of

investigating with non-profits and

trying to have those conversations with

them you know hey what would that look

like how do you think we could help

what’s funny is the biggest sticks in

the mud of the towns yeah exactly yeah

just don’t want to play ball no yeah

well where can people find you because

you’re doing amazing stuff every single

day thanks mike lumberjack landlord on

youtube lumberjack lynn on instagram at

11 30 a.m eastern time live stream after

mike’s daily financial news on one

rental at a time thanks buddy appreciate

it

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