[et_pb_section fb_built=”1″ _builder_version=”3.22″][et_pb_row column_structure=”2_3,1_3″ _builder_version=”3.26.6″ background_size=”initial” background_position=”top_left” background_repeat=”repeat” min_height=”4344px” custom_padding=”28px|||||”][et_pb_column type=”2_3″ _builder_version=”3.25″ custom_padding=”|||” custom_padding__hover=”|||”][et_pb_text _builder_version=”3.26.6″ background_size=”initial” background_position=”top_left” background_repeat=”repeat”]
Thank you for checking out these show notes! If you haven’t already, make sure to:
Subscribe to our podcast and leave a review: Click Here
Subscribe to our Youtube Channel and comment on a video: Click Here
Check out our site, and download our “Free Guide to Becoming a Real Estate Investor”: Click Here
Follow us on instagram: Click Here
Contact:
Website: www.onerentalatatime.com
YouTube: One Rental at a Time
Facebook: Michael Zuber
Ep 021: When is the next market crash? | Michael Zuber
01:42 – Michael shares one of his interesting stories, it was the first property he ever bought. They did everything right but it didn’t work out. They did credit checks, reference checks, background checks but unfortunately the couple broke up after moving in. After that Michael knew that eviction was coming right out of the gate.
02:36 – Michael’s story began in 2003, reading the book Rich Dad Poor Dad shook him. He was working and making a good income but he still had nothing. If he didn’t wise up then he was going to work forever. He read the book five times and learned that buying and holding rentals was how he could do it so that year he began his business one rental at a time.
04:03 – Michael talks about the ‘crash’. It was July 2007, but in 2006 they were listening to a guy named Bruce Norris that they believed could predict the future and talked a lot about affordability index which became Michael’s North Star. At a meet up they heard about a 5 to 20 unit multi-family commercial building. So, they did a 1031 exchange and sold the house for $260K and bought a five unit building for $220K. Not only did they save 40 grand, the rent was tripled. They sold their first 8 houses at ridiculous prices and moved into apartment buildings. They went from 8 to 80 doors, cashflow exploded and when the crash happened they were sitting on multi-family properties. The crash mainly happened in housing. They survived and it allowed them to thrive.
07:12 – Michael can say 2 things clearly regarding how they survived that crash. Did they know the crash was coming? No. Did he know it was going to be a depression? No. But when it came they were in the right asset class for sure.
08:26 – Michael says that there is a general impression that real estate is about to crash. Michael thinks that the sentiment is accurate but what they’re declaring or thinking is going to happen is wrong spectacularly.
10:11 – Michael’s prediction is in 5 to 7 years when a lot of these LP’s and syndications come up to reset they’re not going to be able to refinance for what they think they are going to. Michael has done some math on available properties in Fresno today, it shows that for the first time in 15 years housing is better than a 10 unit apartment building because people are pricing so much for perfection, there’s no money there.
12:23 – Michael did a video where he compared a single family home with a 10 unit building, he did the math and he took actuals because he owns them. The fact is if you really know this business you make your money as a landlord by controlling your turns because every time you have a turn you’re going to at least lose that month and you may lose that year depending on how bad it is. So, if you buy assets that produce roughly the same income but you’re betting on an asset that has four times as many turns you’re going to get caught says Michael.
16:40 – Michael was building his real estate portfolio for 15 years while having a full time job as a travelling software sales leader and for the last decade he owned worldwide responsibilities. He worked 40 to 60 hours a week and would be traveling to two cities somewhere in the world. He worked these hours and did all this traveling and yet with sheer discipline, focus, and execution he was able to build his real estate portfolio one rental at a time.
17:39 – It’s absolutely possible says Michael, you just have to learn your market, understand what a bad, average, good, and great deal are, get really good at that and then just put in the work.
18:33 – More than half of the properties Michael’s closed came from MLS (multiple listing service). He explains how he does that, you just have to pay attention, says Michael. He looks everyday usually multiple times a day, you can see trends in the data.
20:58 – What drives Michael is helping people. They live modestly but still their month is covered so that they can do what they want like create content and post it on YouTube or go to the gym everyday. Money is covered so now Michael finds a way to help others.
Ep 022: How to buy turnkey rental properties | Michael Zuber
01:55 – Michael talks about why you should buy and hold. Michael needed financial independence which to him means his income exceeds his expenses. In real estate, rentals were the answer Michael says.
02:46 – Michael shares how they started. He started in 2003, and the first rule people knew was the 1% rule which means you should be covered if you buy a $100K house that rents for a thousand dollars and it was what he used to buy the first three rental properties.
04:44 – Michael thought that banks were conservative, but no, they are banking on your income. Michael’s learned his lesson on having a negative cash flow so he created this term “no alligators”.
05:39 – What Michael uses now is what he calls “Yield”. Basically, it’s two numbers, the denominator is the easiest one to calculate, it’s how much cash to put out to make an asset to perform.
06:42 – Michael believes that full time employees should be shooting for 5.5% to 6% today on their cash invested. Michael says he’s not retired and can be more aggressive so he’s aiming for 7% to 8%.
09:07 – Michael believes that his portfolio is not bad, but it could be double if he wasn’t attracted to cheap properties when he started. Too many people are focused on cheap says Michael, not realizing the power of borrowing on private ownership stuff he calls it.
10:58 – Michael explains the 80-10-10 program.
12:14 – He’s a simple person says Michael. He lives on the money that comes into his account. He only wants to know the exits and how much does he expect to come in which is the expected yearly cash flow, 200 times 12 this year for example, says Michael.
12:49 – He doesn’t treat commercial apartments with a cap rate and then $200 a door for a house. For a buy and hold investor you should be all equal says Michael.
14:13 – If he could go back and do something differently he would have started earlier. If he could have started in his 20’s he would be so much further along. When you get financial independence you are actually buying time.
15:14 – Michael gives his number 1 piece of advice for those who are starting today. The secret in this business is to live below your means. The reason why they’re so successful in this business and kept buying which allowed them to create more foundation that grew over time was they lived very conservatively. They are very good at understanding what a need and what a want is.
16:24 – Sacrifice takes time says Michael. If you can suffer for a few years or maybe a decade you can buy time like Michael bought 20 years.
17:21 – Michael says you have to keep yourself educated. You have to know that it is absolutely possible and take a shot, you’ll be okay.
[/et_pb_text][/et_pb_column][et_pb_column type=”1_3″ _builder_version=”3.26.6″][et_pb_signup mailchimp_list=”undefined|” layout=”top_bottom” name_field=”on” title=”Download Your Free Starter Guide” button_text=”Yes! Please Send It” description=”
Want to start investing in real estate, but have no idea where to begin?
Get your free Real Estate Guide below.
” _builder_version=”3.26.6″ header_text_color=”#ffcd00″ body_font=”Poppins||||||||” background_color=”#262a23″ border_radii=”on|17px|17px|17px|17px” custom_button=”on” button_text_size=”16px” button_text_color=”#ffffff” button_bg_color=”#e09900″ button_border_width=”0px” button_border_radius=”44px” button_font=”Poppins|600||on|||||” button_custom_padding=”12px||12px||true|false” text_orientation=”center”][/et_pb_signup][/et_pb_column][/et_pb_row][/et_pb_section]
