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