Video Closed Captioning:
good morning good afternoon good evening
folks michael’s uber one rental at a
time it is thursday afternoon and that
means we all have the treat of speaking
with the three amigos how you doing matt
doing awesome super excited to be doing
this and not what i’ve been doing the
rest of the day but thanks for i’m happy
to be here yeah we can just tell the
audience that it’s been negative 25
windchill yeah yeah and uh pipes and
water don’t like that so uh
i’ll just apologize for all of us right
now
that’s fine yeah
sorry deal with it
this this is this is why this is why
only winners win right this is why only
winners won this too shall pass and dion
how are you
howdy guys doing great ready for round
one
i like thursday it’s my favorite day of
the week um and i don’t want to rub it
in matt’s face or anything but it is i’m
tracking
35 days without a tenant issue
35 days i broke a month so literally a
text we just need to send michael scott
on site he’ll be fine
don’t know that reference but that’s
okay
that’s all right so um
yeah i don’t think i’ve gone
three and a half days without attendant
issue that’s that’s what happens to me
when you’re the kindergarten investor
and you only have 16 units
a lot smaller opportunity
yeah so you say i remember that it was
12 years ago exactly exactly exactly
well hey guys one of the things that i
was interviewed about yesterday the day
before is first time home buyers it was
an interesting discussion something we
don’t talk a lot about but basically the
question i got and i want to ask both of
you and i think we should just
acknowledge is the question i got was
really this
michael you’ve been doing this for
you’ve been buying rentals for 21 years
your competition you talk about his
owner occupants because that we’re kind
of a lot of at least first time own
rocks were fishing in the same pond the
question was is this the hardest real
estate market you have seen for
first-time home buyers so dion i’ll go
to you first
so i
i think it’s the hardest but not just
for first-time homebuyers for investors
too
i remember in 2018 having to cherry-pick
between
probably 10 deals that made sense and
figured out which one was the best one
offer on five or six at a time and then
hope to get one accepted
it’s not that way now now it takes a lot
more hunting and digging to find the
deal
as an investor so as a first-time
homebuyer it would be difficult too so i
think the problem first-time homebuyers
and investors are running into is
in 2013 had i invested it would look
like this in 2017 had i invested it
would look like this and right now it’s
not going to look that good
what is the great deal for now that you
can get because getting on the property
ladder is going to have a bigger impact
than getting that perfect return that
you were looking for in a market that
we’re just not in now
inventory as low as it is is probably
the biggest challenge i think we have
because
increased competition for less things to
compare to
if somebody learns how to invest in this
market
they’re a rock star yeah
there could be some other black swan
event that we don’t see coming but the
odds of that are in my opinion under 5
where we have 95 chance that two years
from now it is going to be easier to
invest
yeah i would agree with that two years
from now should be a lot easier uh but
matt when you think about the first time
um homeowners or new investors uh
definitely in the residential space is
this the hardest market you’ve seen i
think it’s the worst i’ve seen ever for
single family homes right i think it’s
one of the best i’ve ever seen from
multi small multi-family tooth okay
okay i like that i think it’s one of the
best and i think the reason that it’s
one of the best is that you know you’re
you’re looking to
you’re in there and you’re competing on
a single family home and you’re fighting
against a bunch of other people that
want a single family home
and it’s very rarely in a lot of these
markets there’s some investors for sure
on single family home
but we all know that owner ox that’s why
you lost 250 two years ago right right
is because you were losing them to own a
rocks
owner occupants and so this time around
i think where we are in this market is
that if you can reframe your mind as to
what
real estate success is
those two threes and fours
they can get a three and a half percent
loan down on a six hundred thousand
dollar duplex and they can live in one
side and it cost them a thousand bucks a
month out of pocket when if they were
living in a condo built exactly the same
way with a shared wall
they’d be paying
3000 or 3500 bucks a month so i think if
you can look at the math
i think that it is probably the best
time in history to be a
single
non-single family home purchasing uh
owner occupant in small multifamily 234
i think that’s a great way to put it i’m
glad we went there so when i was
thinking about this yesterday was
definitely single families because
that’s what most owner occupants look at
sure and
when i went back and broke it down after
right we talked about record low
inventory 920 000 homes which is unheard
of right but i went back and i peeled
the onion by price levels because again
920 000 home includes all the million
dollar homes right includes everything
right so when you try to put in
the threshold for first-time home buyers
across the country
we’re sitting at days of inventory right
um it’s never been this slow and then to
dion’s point when you add on top of that
there’s people like me preaching one
rental at a time and all the investors
are competing and then oh by the way
you’ve got wall street who strokes a
check and
you know you have all of this it’s it’s
very very um competitive so i’ve got mo
more there but i want to go back to what
you said matt and really what dion is
doing
i think a lot of frustrated homeowners
or want to be homeowners first time home
buyers
take these guys
opinions and go give it a look
instead of looking for your forever home
or your first time single family
why don’t you at least kick the can on
some duplexes through quads
and then sacrifice a little bit like
both these gentlemen did like anna kelly
did like like so many others on my
channel have
you’re right
i think i think the owner-occupant buyer
of a dupe through quad has an advantage
over investor because you can get in for
three and a half where i gotta come in
with 25 or 30
that’s right that’s right that’s right
that’s a great little twist and so i
think that you know as i look at it and
they say you know
uh
the new construction builds around us
are
about
so uh one one neighborhood just came in
um they’re selling at i think it’s 559
and i want to say that house is about
15 to 1600 square feet i just bought a
uh 3 400 square foot duplex for 5.25
um yeah and one side
was already rented out one side was
vacant the side that was already rented
out was two grand the side that was
vacant within three days i had it rented
for 3 100.
so
and my mortgage all in taxes insurance
the whole nine yards is 2907.
so they could be moving into either side
you know they could be a thousand bucks
out of pocket and let those people stay
or sorry gotta go then they’re moving to
that unit they’re renting out for 3100
they’re net
even
not a dime out of pocket and so that
previous mortgage that they would have
been paying three or 3 500 bucks a month
for because the taxes are higher on that
building their payment would have been 3
500 on that building
instead of paying 3 500 they’re making
200
and they now have an asset that will do
nothing appreciate so that 3 500 hey
where do i save how do i get my next
down payment one year of 3 500 a month
times 12 is 42 000
sounds to me like that’s well on your
way to your next down payment for your
next half million dollar duplex
just saying
yeah that’s pretty much how that worked
for me
the house hacking added to the savings
rate plus the savings that you already
have put those together took two years i
wasn’t making a lot of money
there is an asset class that can help in
a situation like this that a lot of
people skip over this asset class
doesn’t have home buyers pursuing it
like small multifamily so you take out
your biggest competition pool and even a
lot of investors forget to look for this
asset class because
searching for it is nuanced right a
house
with an adu
most people tell their agents look for
small multi-family in this footprint
with this price range and then they have
their criteria that they screen out home
buyers go i want single family houses in
this footprint with my price range but
hardly anybody because home buyers don’t
want tenants and
investors aren’t adding you have to have
the terminology in your search adu d adu
granny flat mother-in-law house whatever
colloquialism is used in your area you
have no control over what the listing
agent is going to put it under but if
you search for anything you can figure
out what they’re called in your area
the the real benefit to that is lending
even though it’s multi-family small
multi-family that is a single-family
house with an adu so conventional can be
three percent down for your first time
five percent down for
owner occupied second properties
um
but you’re taking out the investing
uh people that
don’t want to look at small multifamily
because their family can’t stand the
idea of their garage touching the garage
of their tenants
so now you actually have that forever
home feel of your property your
buildings don’t touch each other so if
you’re having trouble getting your
family on board with house hacking
because they don’t want their
garages to touch that’s another way to
solve that problem too so hopefully
people put that into their thought
process as new home buyer and first you
know adding as an investor that’s an
asset we should be looking for too yeah
totally i agree the other thing that’s
going on just to kind of round this out
as i thought about it is
uh
developers or builders they’re at least
in my market they are certainly not
building first-time homebuyer homes i
mean they’re the price point is
25 above the median so it just doesn’t
play it’s definitely the move-up buyer
for me so you’re not getting that fresh
inventory coming in
talked about wall street wall street has
long said that the best risk adjusted
return is a single family rental
and then lastly we’ve got build for rent
right which is consuming developers
right so
uh
we are fishing in a pond there’s
affordable homes that’s getting smaller
and smaller and it’s not being
replenished with new fish so it is going
to be hard when i i think you guys
nailed it if you’re going to be a
first-time home miner homeowner
you might need to do something
non-traditional get something with an
edu get a duplex through quad because
the magic of getting on the property
ladder means you’re building equity it
means that next move is so much easier
and you can save ie uh 42 000 bucks in
matt’s example so
uh yes it’s hard
yeah but maybe you just need to
tweak your mindset a little bit and get
on the property there because it’s
amazing once you get there uh instead of
just being frustrated what do you guys
think of that i’ll go to dion first
i think uh as much as i don’t like to do
it i have a
this big of a disagreement with
something that you advise okay go for it
one rental at a time focuses on learning
your area average and then going for
those great deals
i think the first time home buyer and
the investor in a market where there’s
this limited inventory
i’m okay with the base hit
don’t buy an alligator no don’t buy
something that’s only going to get a two
or three percent return but
if your area averages eight percent and
you haven’t seen an eight percent in a
while that’s not the area average
there’s so little inventory that the
area average is lower so if you find an
eight percent in your area take it and
it meets the other criteria of several
economic drivers you know aspects of the
property that’ll help limit tenant
turnover but your return might not be as
much
then
hard to disagree with i like that all
right and matt what do you think i think
delayed gratification remains the story
of the day right
delay just delay i mean get forget
single family think duplex
or triplex or quad if you really have
the stones but largely speaking yeah do
it do a duplex and
even in that example that i gave you
every single person i talked to said who
overpaid for that i was like let me show
you some math hmm
and i was like no no no it’s okay you
can show me all the properties you have
that are making 29 return on capital i’m
ready i’ll let me get comfortable i’m
done i’m good yeah yeah one two three go
okay none right so i mean that’s really
the thing is i think that people need to
look at it and
great business people
pivot pivot they pivot great business
people pivot yeah you know steve jobs
didn’t show up and go
yeah man wow uh yeah the mac’s not doing
pretty well you know it’s that next
isn’t going too well
um
i’m still going to make that computer
and that’s what we’re going to stick
with yeah like you greats pivot and
they’re known for their pivot so great
investors same exact thing even if
you’re new to the game
mike and i talked about this a couple of
weeks ago is your asset class that
you’re looking at before you think about
leaving your market yes look at all of
the asset classes in your market and i
bet you you will find a undervalued
asset
that probably will get you pretty
incredible return and you don’t even
have to look for a single fame with an
adu you can look for a single family
that has a garage already on it that’s
separated from the house and likely you
can build on top of that i’m going
through the approval process right now
on a duplex that i absolutely stole
and we’re actually taking the two bay
garages and we’re gonna build a studio
apartment on top of each one of them
it’ll cost me like 50 grand the return
on that capital is gonna be like three
and a half years and then i own them
flat yeah that’s pretty awesome the last
thing i want to say is if you are an
owner-occupied buyer and you are dead
set on single family i have a word of
caution about the next six to ten weeks
we are in a low inventory environment
with rising rates and that means you are
going to have a lot of people who are
freaking out
and thinking they are gonna miss the
bottom so you are going to see a lot of
people overpay
you thought last april was bananas
it is bananas squared right now so if
you want to jump in that mess go ahead
you might
be a little bit more free in the summer
uh because again this rate rise is going
to cause some just unnatural behavior so
be
careful uh matt how can people find you
lumberjack landlord mr mrs lumberjack
live stream tonight at 8pm
damn the torpedoes we are doing this
thing even with all these burst pipes we
will figure it out that’d be that’s a
great way to start we had one here and
one here and one here
and dion how are you where can people
find you
right here on youtube dion talk
financial freedom my live streams are
tuesday afternoons 4 p.m how long did
the last one go
three hours and 29 minutes almost three
and a half you two are amazing i will
not be doing a three hour and 29. you
come really close though if you look at
your seven o’clock update or 7 30 update
8 o’clock youtube 9 o’clock private
group i mean your saturday mornings are
pretty close to what we do yeah
getting a couple hours
okay i feel better yeah
all right thank you very much