SURPRISE 2022 & 2023 COULD BE THE BEST REAL ESTATE MARKET FOR INVESTORS WHO DO THE WORK

Closed Captioning:

good morning good afternoon getting you

folks michael’s uber one rental at a

time it is thursday and that means we

are so lucky to have the three amigos

how you doing dion

howdy doing great ready for round two

awesome and matt how are you

round one was mind-bending so i’m very

excited to do this one yeah round one is

important because i’m going to get all

of my experts and then i will do a video

kind of blending the averages yeah but i

i think it’s very clear after doing

seven or eight of these that we have

supply destruction yeah and

unfortunately that probably means that

the price deterioration that people are

hoping for

not coming because supply and demand is

undefeated and if there’s no supply

if there’s no supply and half the demand

it’s still too much demand yeah that’s

kind of where we’re at

very 100

but what i want to do in this video is i

want to talk to the one rental at a time

fans

i want to talk to the people that are

really willing to do the work i want to

talk to landlords that own one or more

rentals i am not talking to fans of

revenge or consulting who want to be

scared into doing nothing i want to talk

to the people that are interested in

doing the work

because i have great news for you

uh i believe we are entering the

equivalent of a stock pickers market and

i wanted to find that for folks that

don’t know what i mean a stock pickers

market means it’s very hard

it’s very hard

it’s not the market where you buy the

index and just hold on

it is the market that is dead money the

index goes nowhere

but if you do the work

you can find amazing deals

this is i believe the next decade

because of video one because of no

supply

you’re going to be you’re gonna have to

do the work and i’m excited i am

probably more excited

uh for the next year or two than i was

even in 2010. i was buying at ridiculous

levels in 2010 but i will admit to being

a little scared because like why is

nobody else buying

where’s the money going to come from

but i’m excited i’m hopefully proven now

to be disciplined and focused and i

think

[Music]

yeah dude it’s going to be a stock

pickers market meaning the people that

do the work to buy rentals are going to

create great deals because we don’t care

what the interest rate is

it could be eight percent we’re just

gonna find great deals we’re gonna write

great offers

um so that’s what i’m thinking we’ll go

to dion first

well

i’m trying to get the analogy because

i’m not a stock guy and this is going to

be based on a 30 second class that you

guys gave me before we hit record

so a stock pickers market means

if you

if buying the index makes more sense

it’s not a stock picker’s market right

it’s a stock pickers market when it

makes more sense to do the work and find

the specific amazon tesla whatever stock

that’s going to perform the best you’re

finding the one or the two you’re not

just throwing

the last two years anybody who bought a

flip won because the market you’re just

betting on a rising market

right so i’m gonna steal out of one of

my favorite books uh there was this guy

and he had a bunch of single family

houses and he saw

affordability get really really bad so

he looked at things like adjustable rate

mortgages on large multi-family were

probably going to be

the next stock to pick

so he sold a bunch of single-family

properties and then got into large

malting

and then when it made sense went back

so my strategy has always been buy and

hold small multi-family it’s what’s

worked for me house hacking

but i’m watching the larger multi-family

and trying to find things like convoy

who has 30-year fix or 40-year

fixed-rate debt for up to 29 units yeah

that might be money that i deploy on

more than five units which is a complete

shift to my strategy because i’m

watching the market that’s awesome and

again doing the work right that’s that’s

the key that the whole key

to real estate investors for the next

decade is doing the work every day

you can’t

if you’re not doing the work every day

you shouldn’t invest i want to say that

again if you’re not doing the work every

day you should because it is going to be

very easy to do bad deals

yeah

so yeah so matt what do you think

i hope i’m dead wrong i hope i’m wrong

about the market going down 15 or 20

honest to god i hope i’m wrong

i hope i’m wrong i hope i’m right

because i know how

painful it is for people but i hope i’m

wrong because that means i’m ready

i am dialed in i’ve got cash on the

sidelines i got massive cash flow coming

in every single month

and we spent the last couple years

creating cash flow but also doing a lot

of you know decent size repairs

i’ve got

six figures sitting by waiting to do

massive projects for when guys that

wouldn’t return my phone call six months

ago start calling me in six months going

hey so you know that project that i

never called you back on as a matter of

fact i do yeah and all of a sudden i can

get the material right away and

surprisingly it’s saturday but they can

start monday mike it’s really good news

so i hope i’m dead wrong i hope the

market absolutely goes through a ton of

pain i hope that reventure consulting is

right and it drops 50 percent because

holy cow

i’m then going to be known by my last

name in my area if that happens you’re

that guy he owns the block i will buy

that much stuff because it’s cyclical

and i recognize that it’s cyclical so i

think the people that are preparing now

that know their market now most

importantly do not be comparing prices

no it’s not do not com because i saw

that in the last crash right well this

one just a year ago sold for 370. don’t

care don’t care don’t care how much can

i buy it for what’s my rate and what are

my rents

that’s it that’s all i care about so the

rest of it i think like i said i hope

i’m dead wrong when people say i’m

talking my book then you don’t

understand my book my book is cash flow

and i want to buy a ton of properties

even if someone was yelling me even if

18

yep the numbers were if i still get a 23

return yeah i don’t care if it’s 50 i

don’t care i care about one thing i care

about return on my capital that’s it

yeah yeah i call it i call it yield you

call it rock whatever you want whatever

whatever you call it it’s money it’s

money yeah how basically how hard is my

money working yes that’s you know simply

said so

uh dion i think you’re leading by

example uh you you you had this example

of a four plex that i just want to

revisit i have no idea where it sits

today

uh even if you didn’t get the deal it’s

what i want people

to to

it’s what i want everybody to do

you have a buy box and you look at it

every day probably a couple times a day

right

yep

and you found something to fit your buy

box and then you ran the numbers based

on what you consider a a great deal

and uh you wrote it below asking price

right

low asking and when you said i haven’t

got the deal uh there’s a caveat i

haven’t got the deal

yet

it hasn’t sold yeah no so at some point

if they become motivated enough my offer

is still sitting there yeah and this is

what i want people to realize

the last couple years

it became

frankly standard to

worst case right at asking

and many of you are writing over in

waving conditions the market was that

hot

the market’s not going to be that way

it’s already not that way in many

markets my my followers are telling me

uh some markets are still crazy hot uh

colorado southern california i keep

hearing from it’s coming it’s coming

as rates go up demand that’s what the

fed is doing it’s trying to destroy

demand and they eventually will

two things are going to happen you write

great offers

you will either eventually get the deal

or

the seller will prove to be not

motivated and take it off the market

those are the only two things that will

happen

that’s why days on market are going up

that’s why inventory is going to build

that’s why price drops are going to

happen folks

it’s been

five years since i have found a truly

motivated seller

it is going to be easier

10 times easier 10x easier

but not easy

just 10 times easier to find motivated

sellers and if you are putting lots of

lines in the water because dion you told

me the other day we talked about this

four plex and you like chuckled because

you had like three other offers out or

something

yeah i’m doing on average one offer a

week or so and and that week i think i

had a offer on a burr

offer on a duplex very rural and then

that four flex yeah so again these

just keep writing great offers and most

of you let me kill you most of you

listening to this or watching this

you as of yet do not know what a great

deal is

you’ve not done the work it takes time

it takes 60 to 90 days of daily

discipline in your buy box

to find a great deal would you agree

with that matt

yeah 100 dion um a month ago how many uh

buildings were in your buy box

a month ago

uh so i don’t know total numbers like

that but a month ago

uh

less

yeah exactly that’s the official number

yeah because the so we’re still so mike

we’re still seeing what florida and

southern california are seeing still

okay we i haven’t i’m i’m

oh i’m wishing it in man i want to see

some freaking inventory because i am

bored yeah you know like

literally i called my agent and i said

the rumors of my death have been greatly

exaggerated i’m still alive i just have

not found anything that we can go look

at yeah and it’s true like and the stuff

that and there’s a couple things that

made it to market and they were just

ridiculously overpriced i was just like

that’s just not a thing so it’s

definitely shifting in some markets not

in all it will come to ours

but i am anxiously awaiting because you

know the position that dion’s in is the

position that i think i was in probably

nine months ago where there was enough

stuff hitting the market where i was

writing an offer once a week yeah you

know there was enough stuff and and and

you know one out of

four or five of them would get accepted

yeah so

yeah what i want people to take from

this is again this i i don’t know what

it’s called the only analogy is a stock

pickers market the next decade in real

estate you’re going to have to fish

for the motivated sellers because you

should only be writing great offers it

takes works it’s 10x easier but never

easy

it’s um

it’s frankly fun

and and real estate agents will write

the offer it’s not you know like two

years or a year ago it’s like hey we’re

already one of 30 and it’s been on three

minutes and

it’s just it’s just gonna change and and

i talked to matt the mortgage guy more

and more buyers are getting out a lot oh

las vegas builder my daily financial

news this morning las vegas builder said

it is a daily occurrence

for him to remove buyers who are no

longer qualified

yeah that makes sense

right now they still have more buyers

than supply but think about that you

have 100 buyers and you have 10 units

you wash away 50. now you have 50 in 10.

wash away 50 now eventually

it’s more houses than people this is

demand destruction

you roll that into supply destruction

like video one and this thing can get

hairy pretty quickly so mike what are

you seeing in your market i mean as far

as like buy box go because the other

thing that we do too a lot is

off market stuff

and so

i have seen that’s one thing that i’ve

seen probably

[Music]

triple in the last month is off market

stuff yeah so i look at my i’m lucky

enough i can go through my entire market

about a half hour i’ve been looking at

it so often now so i’ll answer it

completely the high end which in my

market is seven figures and above

slow

yes slow inventory building we’ve had

100k price drops which i haven’t seen in

a long time yeah years years years uh

then there’s in my market kind of that

move up buyer which is like 500k to a

million

uh slow

uh not as many price drops but inventory

is clearly building and then stuff below

that still going really fast it’s just

not enough of it right um

and then to your point off market i have

seen more wholesale deals so for two

years

the last wholesale deal i did was

february of 21.

for what i guess that’s more than a year

now right so it’s 13 months

everything has been retail or worse

okay last two weeks

uh i’ve seen two deals that i sniffed at

weren’t quite right but there was there

was room just not enough

uh but more uh i’ve seen more stuff

because i’m on every list yeah i’m on

some lists i didn’t even know i was on

and uh i’ve seen every day every day i’m

getting notes from wholesalers yeah i

saw i saw a couple with

a 399 handle that would have been a 450

handle

where it was like okay that person is

going to move that property the thing is

is that there’s still enough retail

interest where that thing is going to

sell in five seconds and it’s going to

go for over ask and it might even sell

for 430 but it’s not going for 470. so

yeah the market is turning it’s turning

everywhere it’s slower again many

markets like denver and la and miami

miami wow

it’s still demand the demand dwarfs

available supply

but um it’s it’s demand destruction is

happening again it built

builders like greg right greg dickerson

i talked to on monday who had 30 million

bucks in debt and

in the last crisis before it rolled over

that’s that’ll make you pucker up yeah

and um he’s like builders will feel it

first

yeah don’t they don’t they always

well yeah that’s his point yeah

because they have to sell right because

they’re not in the business of

like they don’t have an option what are

you gonna do keep it empty

yeah exactly yeah the and like i said

that one example that i brought that was

the only one that’s the only one that

gives me faith that it’s coming because

everything else is still nuts yeah you

know but again this this is the

environment to do the work sorry dion

sure that’s okay i’m glad you guys

brought up the off market stuff that’s

something i actually i kind of want to

do the research and do a whole video on

because i’ve seen an uptick in that too

yeah but it’s it’s ridiculously bad

deals they’re they’re marketing it off

market because they would be embarrassed

to put that price on that property on

the mls i see that and

so so in the last couple of weeks i’ve

gotten a bunch of people who

found us watched a live stream or

something got my email and they’re

saying hey i’ve got these great amazing

deals

and it’s it’s

are they finding buyers that just don’t

know what they’re looking at

uh for the last couple of years at least

in my market of fresno california there

was enough dumb money yes buying dumb

deals yes mike my question for you on

that is are you seeing with those

wholesalers right so a wholesaler puts

the deal under contract yep and then

they’re selling it to somebody else the

contract

i see some guys getting stuck

oh no i’ve already seen two deals

there’s there’s been a while since a

deal went

back to the owner where the

wholesaler had to back out i’m starting

to see those already pricing is changing

folks it is margin appetite um

and again i talked to non-qm lenders

right

this whole world will be very different

in a year

the federal reserve is destroying demand

just wait until their 50 first 50 basis

point move which will happen may 3rd and

4th

i mean this is not only a real estate

thing this will hit the economy this

will hit businesses where we had

instacart go from a 39 billion valuation

to 24. you don’t think that’s going to

cause employees to bolt because they’re

their stocks worth nothing

it’s happening

yeah something else real quick mike that

i was thinking of too is

make sure that people are following

through on their spreadsheet not just

what stuff is listing for but what it

actually sold for yes exactly

this market the strategy for elite real

estate agents what they will do is they

will now underprice the asset

because you’ve got people out there that

are at 450 they’ll under price it at

3.99 and the person will go but i want

450 and you’re like listen do you want

every set of eyeballs in this market

looking at this thing and the people

that are under the 400 number you want

everybody looking at this thing that can

possibly look at this thing so our

strategy now is

either a we’re three to four percent

below market or b we just go you know

what 10 below market let’s get it out

there let’s have 90 people on sunday

show up for the open house and then boom

you get to 4 30 or 450 anyway so make

sure if you’re doing your spreadsheet

that you’re not just putting in there

what people are listing it for but

you’re actually showing what the

realized sale was you gotta look at that

yeah totally agree uh dion how can

people find you

right here on youtube dion talk

financial freedom

and that lumberjack landlord on youtube

as well as instagram and 11 30 a.m

eastern time and if sunday’s not a good

time for you go watch dion at four

o’clock pacific time on tuesdays

thanks guys

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