WARNING LAS VEGAS REAL ESTATE BUST: Advice for First Time Buyers, Investors and Real Estate Agents

Video Closed Captioning:

good morning good afternoon good evening

folks michael zuber1 until that time we

have the one and only the man of las

vegas brian liba how you doing man great

thank you so much for having me on hope

you guys enjoyed part one yeah you

should be in for good ride part one is

um if i were to summarize the party’s

over uh the cool kid left he’s got his

girl he’s gone

and uh there’s a lot of people still at

the party

but you should be leaving right now uh

so what i want to do is i want to pick

your brain on three topics one let’s

just talk to other real estate agents in

vegas if they’ve been in the game less

than 10 years they’ve only known one

market let’s just have an honest

conversation with them two if you are an

investor or maybe looking for a second

home in vegas like the lumberjack let’s

talk about what we would advise and then

three if you’re looking to be a

first-time homeowner in vegas what would

we recommend so um

let’s go through them let’s start with

ages what what would you tell a real

estate agent’s got 10 years or less on

them about what they are about to hit

not sure

better to like let’s start with the

consumer homeowner first and then we can

talk investors then finally we’ll talk

about agents and what they need to

acclimate so all right homeowner first

time homebuyer probably what below 500

entry level home

yeah so the well the median price in las

vegas right now is 485 000 okay so below

that um

i mean there’s really nothing below 300

so entry level is going to be three to

five really

so that so that person fha va maybe

first-time homebuyer uh what what would

you tell them today so the truth is this

one look i can prognosticate all day

long and hold my crystal ball and say i

am smart i’m successful listen to me but

the truth the truth is that no one i

don’t care who you are is going to be

able to predict

just how

bad this may be you know we might have a

five percent correction in values

something could trigger that we could

see a 30

devaluation the truth is at this point

it’s

irrefutable the direction that we’re

going let’s just not play this game we

know the direction that we’re going and

it has officially started

now what’s important is reading the tea

leaves to see how bad it’s going to

become and that is going to occur very

very quickly i think in the next month

we’re going to really test this market

so

it’s going to happen how severe no one

knows yet it’s too early that’s pretty

arrogant to say but as a homeowner

here’s my true advice you know it’s

it depends on your status your position

and your goals it’s not a time to

necessarily freak out yeah it doesn’t

feel good if your home was worth a

million dollars and now it’s worth 700

000 it’s not a good feeling but the

truth of the matter is this timing the

market is one of the most difficult

things there is to do so and you have to

understand

selling your home and bailing out right

now

on the hopes that we’re going to have a

correction and then you can buy back in

and capitalize

you know that that might not be the best

bet personally i’m not going to do that

i have the capability to do it very very

easily and i have no desire to do that

and the reason is this if you think that

you’re going to sell your house and buy

back in

the basically the gamble that you’re

making is let’s say 15

if the market doesn’t decrease more than

15 i don’t see the point in you doing it

and the reason is this

any time you buy and sell a home you’re

basically gonna leave 10 of your equity

on the table it costs money to sell your

home it costs money to buy a new home

especially if you’re getting a mortgage

and then no one buys a new home and then

doesn’t spend some extra money getting

that home into

the position that they wanted to be in

so let’s just say it’s ten percent it’s

going to cost you ten percent just to

make that move

then

i’m just giving you five percent for

your time obviously you know this could

take years let’s say it does go down 30

percent people forget that the huge

crash in 2008 lasted three years yeah it

wasn’t like

prices crashed overnight and then we

started rebounding it took three years

to bottom out so who knows how long this

correction will take

so

if you are renting you’re losing your

tax deduction if it’s applicable et

cetera et cetera so for me it’s not even

worth your time unless you truly believe

and think that the home that you want to

buy is going to drop more than 15

if you really believe that the home that

you’re targeting is going to go down by

more than 15

yeah sure cash out sit on the sidelines

and go back we also got to remember you

may have tax implications there’s no

damn point paying taxes on your owner

occupied property

if

that new property is going to go down

substantially so again

my advice is not

one-sided

it depends on your personal situation if

you were if you were going to sell

anyways next year you know what probably

best to cash out now and just rent until

you’re ready to make that move

if you’re sitting there forever just sit

there’s going to be waves

your house is not a piggy bank just

pay it off write it out yeah so

yeah two i have two thoughts because

again i think about the first time home

buyer a lot right i have a lot of them

on my channel that follow it so there’s

a couple of things first off that person

is going to time the market i would tell

them

do the math not only is it 15 but you

are very likely selling an asset that

has a three percent mortgage on it and

you’ll be buying into an asset that has

a six percent mortgage on it

okay got my asset she’s cheaper but i

paid the bank more

is that really the equation we want to

do today so again do the math that’s why

i think a lot of supply is not going to

show up because the people are going to

realize where am i going to go

right it’s this this that’s an asset but

back to the first time home buyer

uh i’m sure vegas is like most marketers

i follow and i get uh information on fha

and va buyers have had no chance the

last two years cash buyers came in

they just couldn’t compete

so what i would tell fha and va buyers

is your time is coming

i would also say

time to get aggressive i just did a

video with a mortgage broker

where basically they’re now uh or i

would advise if you’re an fha or va

buyer get this seller to pony up eight

nine ten thousand dollars in fees

basically points to buy down your rate

we did an example where maybe 30 year

money was at six and an eighth you get

them to buy you down to five and a

quarter why not

again you have the power today the buyer

is scarce the sellers are freaking out

don’t dude if you have an agent today

telling you to pay list price get a

freaking new agent right this is not

that market anymore be aggressive get

the seller to buy it’s what home

builders do home builders are buying

down rates all the time get a seller to

give you 10k and credit back to buy down

your rate 30-year money all day long

what do you think buy down your rate and

for a lot of first-time home buyers if

you’re barely barely holding on and you

barely have enough to make the down

payment

this is normal in a normal market you

can just ask the seller to pay your

closing costs for exactly typical home

time first buyer your uh your closing

costs can be about three percent

not you know it may be a shock to the

system for new agents and for sellers

but at the end of the day pretty normal

yeah i mean either you want to sell your

house or you don’t so

you know a couple grand below list price

and three percent for closing costs it

may not sound good today it’s gonna

sound fantastic a month from now i

totally agree that’s a great that’s a

great great great point because in a

normal market i do that kind of stuff

all the time it’s just been

uh

it’s just been

it’s been a couple years i’ve been a

fuel attempt for the last few years it’s

just not gonna happen yeah but that’s

gonna really be coming back i love that

so that’s first time home buyers again

you should be excited don’t stretch

don’t do anything stupid and again

please get your sellers to buy your rate

down why not three quarters of a percent

on 30-year money that will make a

difference the other thing is if you can

afford

to to eat the six percent depending on

your situation you know a lot of people

do believe that you know by quarter two

next year rates will be back into the

force so

you know depending on your situation

it’s a gamble but you might say hey pay

my closing costs that way you have less

capital to come out of pocket with and

then you can refinance in six months a

year whatever when rates do come back

down that’s another option yep so

there’s a first-time home buyers uh i

think your time is coming and again

remember you have the power

sellers are freaking out so let’s flip

to investors i can’t tell you how many

investors i have that say get brian on

get brian on get brian on people just

want to invest in vegas

what would you be telling investors

today about today i’ve done a lot with

your uh with your uh your viewers so

thank you all for your support i’ve

appreciated working with you over these

last few years

so when it comes to investors i mean

look

[Music]

if it made sense yesterday it’s probably

gonna make sense tomorrow and the

reality is is if you’re renting

properties with the market going the way

it is

it’s probably gonna put more stress on

the rental market because people if they

if people decide not to purchase for a

year what are they going to do they’re

going to rent exactly yes i

from an investor standpoint

i’m not worried the least bit as far as

demand for rental properties of anything

it might even exacerbate

as as an investor

look you shouldn’t have got yourself

into an investment that didn’t pencil

when you did it day one and unless you

just like just right now purchase an

investment property

you have tremendous amounts of equity

and again you know everyone’s got their

own goals but for me as an investor my

goal is to own the asset outright and

have it paid off right so for me

look as long as as long as you have cash

flow you can ride this wave out forever

the goal is to get to the finish line

and like we already discussed what are

you going to do you’re going to sell the

asset and pay taxes on your money

where else are you going to put the

money so i mean unless you’re in a

negative cash flow situation which

frankly you should have never purchased

the property to begin with

um and like like zubra said earlier i

mean you locked in at a historical low

interest rate so how are you gonna beat

that yeah it doesn’t

even if prices do go down 10 and you buy

back you’re gonna get killed on the

interest rate so you’re really going to

be a zero-sum game and then you lost you

know two years of principal balance

reductions by paying it off so if you’re

an investor just stay pat you’ll be fine

there’s ups there’s downs there’s more

ups than you have downs on the long term

so just stay tight and if you’re looking

to invest i think right now is premature

there’s no way i would you know be

buying unless

it was someone dropping their pants but

i think which

where the real pain comes

is

starting in six months

so as an investor i would start really

getting serious in about six months and

the reason is this

when we talked earlier about there is a

difference between someone who wants to

sell their home and has to sell their

home

and i’ve been through this before

different names same thing

what ends up happening is this your

crypto kids your wall street geniuses

and you got to remember this has a

trickle-down effect right

and this this is where this is where

people are missing how huge of an effect

this is

when the market’s going crazy and your

neighbor just

you know your house went up four hundred

thousand dollars your neighbor

refinanced remodeled their whole house

bought a mercedes your neighbor across

the street bought a g-wagon and you’re

like dude everyone’s rich all right

i’m gonna keep up with the joneses so

you go buy this and do that we’ve lived

in a fantasy world for three years where

everyone was rich and spent money on

everything and you felt rich because

when the equity in your home goes up you

feel wealthy well conversely is true

so what’s going to happen now is as

prices go down and you see your neighbor

across the street sell for 50 000 less

than the other person spent

everyone is going to contract their

spending and i’ll tell you i i literally

in my household i’ve already had these

conversations i got everything i need

everything i want now’s not the time to

spend a dollar i literally

am not spending money not because i know

where this is going so what ends up

happening is this when people stop

spending money

the next thing that’s going to affect is

think of all these rich contractors all

these contractors don’t show up they’ve

got more business than they can handle

their their business is going to dry up

overnight yes so

those contractors and then think about

small business owners you own a solar

company you own a company building pools

or what have you

your business is going to eviscerate

overnight between the interest rates and

demand you’re dead so what’s going to

happen very quickly is the consumer

confidence is going to plummet people

are not going to spend money and when

people don’t spend money all these other

small businesses are going to get killed

and a lot of these small business owners

got a little high on the hog and forgot

about 2008 so you’ve got a lot of small

business owners that are like they’re

making so much money it’s time to buy

that new house it’s time to buy that new

car

so now we’re reaching the point of

reckoning and human nature doesn’t

really give up that easily so

you know when your wife’s like we need

the bigger house the business is doing

great and you bought the boat you bought

the vacation home you bought the big

house because your business is doing

well

it’s really hard to look your children

and your wife and and tell them that we

probably should sell the house things

are not looking good it’s human nature

to to hopefully wish that things are

gonna turn around and you’ll get saved

i watch people with so much more than i

did lose everything out of hubris so

what’s going to end up happening is your

small business owners are going to get

hurt they’re going to keep their

business because that’s their livelihood

but they’re going to have to dump their

house so on that high end you know homes

that are 750 more like a million one

five

who the hell is going to be buying it

going in recession and all that funny

money all the crypto cash

it’s going to be really difficult and

what’s going to happen is

people are going to start listing their

homes in six months because they have to

sell their house but their ego is going

to to tell them that they still need to

ask top dollar by the time they get to a

realistic point it’s too late and i’ve

watched this happen multiple times and

the big big big pain is going to be felt

on that mid high level those 750 800 000

to 1.5 million people who got rich for a

second but don’t have wealth huge

difference but you’re wealthy very

different you know

so yeah so there’s a couple things i

would tell investors first and foremost

much like the homeowners that your

market’s coming to you

uh i tell people get a buy box right

vegas is too big you got to have a buy

box down to a zip down to an asset type

you got to look at it every day i would

expect the vegas market to be popping

with inventory changes cancellations uh

stuff coming off and going back on the

market this is the time to watch and

learn you need to learn ahead of time

you don’t just wake up six months from

now and know the market you have to

invest i call it focus and daily

discipline so get your ass off the couch

and start doing the work

and then if you’re going to be in vegas

you need to be reaching out to brian

lebo saying hey brian let me just share

my buy box let me check with you is this

is this good

right get that relationship especially

if you’re buying from out of state

and then lastly uh something i’m doing

personally again i’m an open freaking

book i am getting ready for

pre-foreclosures because exactly what

you talked about that kind of high-end

million million five those people are

gonna have egos they’re not gonna want

to take it down they’re gonna get behind

and pre-foreclosures is where i’m going

to go fishing right because foreclosures

take time you and i both know last time

it took over two years to foreclose in

vegas

and but you can fish in pre-foreclosures

and maybe you can find a way to get them

out uh and take it over easier so uh a

lot of opportunity coming to investors

don’t rush but freaking get off the

couch and do the work start building

relationships figure it out that’s

that’s what i would tell people no

that’s that’s

that for you guys out there that was

fantastic advice

you know even for me you know when i’m

interested in buying an asset

when i’m really interested in a specific

neighborhood or area that’s exactly what

i do is

way ahead of time before i’m ready to do

anything that’s exactly what i do for my

investors is we decide on what the goal

is what the area is and then we just

start monitoring it so

the easiest thing to do and i just did

this for matt is set up your parameters

and then you have a search so every day

it just sends you an email

price reduction price reduction sold

back on the market perfect you really

you want to see where the momentum is

going you want to see okay this is a

property that i would be interested in

and then 30 days later when it closes

you know immediately so you can start

tracking these trends and figuring out

what your goal is and how you’re going

to achieve it and when to stop on it

yeah just so you know brian that’s not

parameters that’s called a buy box just

so we get vocabulary correct

farming sorry i’ll get the renekton yeah

come on work with me here man work with

me

[Laughter]

all right now let’s just talk to the

real estate agents who are uh

have you been in the game 10 years in

vegas 20 years no but if you’ve been in

the market ten years right you are

you’re gonna get you’re gonna get a slap

on the face slapping the butt it’s here

it’s gonna wait it’s gonna wake up

you’re gonna get woken up uh here

shortly so what would you tell an agent

with 10 years or less so my advice and

and the advice that i’m going to give

you is advice that i actually

did this is not me just

talking off the cuff hypothetically

i would recommend you do what i did in

  1. in 2007 it was looking very very

bad it was worse than this but we’ll see

how it looks in a month but

all the telltale markers were there

i am a very conservative person

financially

so for me

when i saw the writing was on the wall

and i as an agent i had 10 agents

working for me and i was having a

difficult time making an income

so you know they don’t have a chance in

the world

so i had a meeting with my entire team

and i said hey guys

i’m just banning the team

i am literally cutting all the fat out

of my life and

that includes having this office that

includes having at the time i had an sl

mercedes convertible i had a bmw 7

series i was ballin

immediately sold everything

the mercedes i didn’t need it was a

second car the bmw was not the most

reliable vehicle and i wanted to put

myself in a position where i could

control my expenses so i literally

dumped everything i got a nice boring

mid-level lexus that’s completely

bulletproof just make the lease payment

don’t have to worry about anything just

take the right off and i knew what my

fixed costs were so as an agent you have

to understand that you’re about to enter

into a phase that

for you is unprecedented and the reality

is is a lot of times there’s no activity

until there is so

this market like you said transactions

will be 50

that’s we’re not speaking in hyperbole

here that that’s very realistic

and it’s going to be very difficult to

make income so you either

hopefully have a lot of capital saved up

or you need to create capital so

you know divester interest

get liquid there will be opportunities

to invest to flip to do other things but

the most important part is your ability

to to stay solvent and survive you got

to survive to thrive you’ve got to

survive the next 18 months and it’s

going to be brutal so anything that you

don’t need in your life cut it out any

that you don’t need that’s

costing you money get rid of it because

if you don’t get rid of it now it’s

going to be worthless in six months

because everyone else is going to be

doing it and at that point yeah

you know yeah

i love all of that

i mean that was so well said the only

thing i would add on top of that for new

and real estate investors is you got to

remember

time is still your scarcest factor and

unfortunately you are going to have lots

and lots of time wasters does it does a

listing matter if the client has wish

pricing that you think is six figures

above what is reality and they won’t

listen yeah

and and you know again you know there’s

not going to be a lot of buyers so

taking crap listings on the hope that

you can you’re never going to sell this

but at least i can get signed calls

it’s not yeah signing calls are already

dead you’re not really going to get a

lot of activity um the reality is going

to be this you got to ask the qualifying

questions to sometimes people will be

honest sometimes people out of pride

won’t be honest but you really have to

ascertain is this a person who needs to

sell or wants to sell because the wants

are most likely going to withdraw their

listing um just let another agent waste

the time again for you agents that you

don’t get paid to the end right so again

you’re wasting time and money right if

you’ve already if your liquidity is not

where you want it to be taking a listing

just cuz is not the way this is not list

to last the next 18 months and if your

house is if you have a top 10 listing

you’re gonna sell you’ll be all right

it’ll work it’ll work but if you are in

the bottom 80th percentile where all the

homes are homogeneous meaning they’re

all generic this house is no different

than my neighbors across the street

those are the properties that become

value-based um if there’s no emotional

attachment to the property then it

becomes well why would i buy your house

for x when i can buy the one across the

street for why yeah you compete on the

way down yeah yeah so just understand

that if you’re taking these boring

listings which we all do that is going

to be a value-based proposition so you

either get the timing right quick or

you’re going to be chasing it down and

and that’s just the way it goes

so brian if an investor who follows my

channel or home first time home buyer

wants to reach out to you get a buy box

set up brian buy box how would they do

that

so you can help them do that like you

are the lumberjack yeah so i mean please

watch my youtube channel

thelibogroup.com a lot of my information

is right there in the description

you can go to my website libogroup.com

the best way to reach me the best way to

reach me shoot me a text message you

guys all have phones text me so 702

257 libo l-e-b-o

libo shoot me a text say hey bry i want

to make some money hey bry i need to get

out right now shoot me a text i’ll get

right back to you awesome brian thank

you for all you do thank you for this

this has been a lot of fun i appreciate

you my pleasure thank you for having me

on and thank you to the audience it’s

been a great run i appreciate your time

yeah we’re not done yet we’re going to

make a lot of money the next two years

time time to get wealthy exactly

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