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