BiggerPockets Real Estate Podcast - Michael Zuber: Why the Average American Won’t Make It Without Rentals

Episode Date: April 22, 2026

By buying just One Rental at a Time, Michael Zuber was able to replace his entire W-2 income, scale from one rental to four, then to over 80 rental units, go from paycheck to paycheck to becoming a real estate millionaire, and survive the Dot Com bubble, the 2008 crash, and the post-pandemic meltdown. And in today's show, Michael has two things to say: First, the average American won’t make it without becoming an investor. Second, there’s good news—this year will be horrible for everyone but investors.  Michael says we’re sitting in the best housing market in a decade. He’s putting his money where his mouth is, pulling a million dollars out of his properties’ equity to buy more, starting now. He’s aggressively making offers and getting deals for a fraction of their face value. Using a simple, but easily repeatable “wealth formula,” Michael has become the millionaire next door, and he says with just 20 minutes per day, you can, too. This is a masterclass from one of the most respected real estate investors in the country. Michael shares exactly how the average American can become an “elite investor” with his 20 minutes per day exercise, the properties Michael is looking to buy now, the two (yes, two) offers you should make on every house, and why he never bets on appreciation (and we agree). Michael says this market could last another year—are you going to make a move or wish you had? In This Episode We Cover Michael’s 20 minutes per day “elite investor” exercise anyone can use to become a rental millionaire  How Michael replaced his W-2 salary with rentals even through multiple crashes  Why Michael says 2026 will be the best year in a decade to buy real estate The “wealth formula” Michael uses to decide whether a property is worth it  Why the average American will not be able to have a comfortable life without investing  And So Much More! Check out more resources from this show on ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠BiggerPockets.com⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ and ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠https://www⁠.biggerpockets.com/blog/real-estate-1268. Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠[e-mail]⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠. Learn more about your ad choices. Visit megaphone.fm/adchoices

You need a plan to create your own income because expenses are up while wages are not. And every day brings more layoffs. So you can't just rely on a company to sustain your livelihood for the next couple of decades. You need something of your own. And if you want that something to be real estate, now might be the best time in more than a decade to get in. Just buy one rental at a time. Hey, what's up, everyone. I'm Dave Meyer, Chief Investment Officer at Picker Pockets. Henry Washington is here. What's up, man? How you doing? What's up, Dave? So glad to be here and super excited for this conversation. Michael has been a buddy in mine for years, and this guy knows his stuff.

Yeah, this one is going to be super fun. We have Michael Zuber on the show. You might know him from his channel, one rental at a time. Michael has been investing for 25 years, and today his going to explain why he honestly sees 2026 as the best time in a decade to buy properties. And this is not a guy who says this all the time. He genuinely believes this. He's also going to share with us how anyone can become an elite investor and instantly spot which properties to buy in just 20 minutes per day. And that's it.

That's really what he says it takes to be successful in this game, 20 minutes per day, to create an income stream of your own and secure your financial future. let's bring on Michael. Michael, welcome to the Bigger Pockets podcast. Thanks for being here. Thank you, David. I appreciate the opportunity. What's going on, Henry?

What's that, buddy? It's going to be a lot of fun. So, Michael, give us a little bit of background for those who are new to the channel. Tell us a little bit about yourself and your background in real estate. Well, I go way back with Bigger Pockets. I was originally a Bigger Blogger back in the day. I've been right or die Bigger Pockets since probably 2011 or 12. It's been a big part of my journey.

It was the place in the, investors went to be around other investors. There was no other place like it. And obviously Bigger Pockets has gone on to great heights and it's been fun to watch. It was fun to be there at the very beginning and to be a casual observer from now. But my story is one probably like a lot of viewers. I'm a W-2 employee. I realize that I wasn't going to make my wealth in the stock market. I suffered an 80% loss in the dot-com crash. I came to real estate after that purple book, Rich Dad, Poor Dad, and it sent me on an entirely new journey. My plan, plan was to buy four. And why four? I figured if I got four in my 30s, that's when I started.

I would pay it off by the time I'm 60 or 65 and I'd have options at retirement. And, you know, once you get in this game, you realize there's lots of things to do. And I start in 2001. So even before the run up, I was doing this. And probably what, you know, set me on a new trajectory is in 2006, I saw a Bruce Norris event, which I paid to go to. And he said California was going to crash. that caught my attention because I had all my wealth in California. And, you know, I didn't understand half the things that he said, but he did key on this thing called the affordability index. And I realized that Fresno was the most unaffordable it had ever been. And, you know, I'm one guy to take action. So we 1031 out of the eight homes that we owned and moved all our

equity into apartment building. So we went from eight to 80 in 2006, which was great timing. Yeah. Because we didn't suffer any of the pain. And then we just, kept going hard during the crash. So yeah, that's who I am. See, this plays perfectly into my, let's have Michael on the show and have him predict what's going to happen in the next five years. You clearly predicted the 2008 crash and got out ahead of time. So yeah, well, I mean, it goes even further than that. So if you want to really talk about fun things, I retire in 2018. I go on to flip 56 homes. I stop in 22. In the market, obviously gets much harder for flippers after that. I just recently went out and extracted nearly a million dollars in equity right before

the Iran War because I was getting ready to go shopping again. So I got I got cash out debt at 599. You know, today that's probably six and three quarters. So, you know, when you pay attention to the market every day, every day for 30 years, you kind of see things coming. And yeah, I've made several pretty good moves in real estate. But we're just going to give you the floor then. What's coming next. If you can predict the future, help us. Well, I'll tell you what I think's happening right now. I think 2026 is going to be a horrible year for everyone except bigger pockets than one rental at a time fans. Why do I say that? And I mean that with all seriousness. Why do I say that? Investors, who I think our audiences are, what do we want? We want more options, i.e. more active

inventory. We want less competition, right? CNBC just put out a survey today that basically said 60% of buyers are delaying or out of the market. So that's net good for us. And we're going to have more motivated sellers, right? We have seen record relistings. We have seen, you know, days on market growing. So yeah, if you're a seller, it sucks. If you're a flipper, it sucks in most of the country. But if you're a buyer who has a buy box and a focus and a discipline, you should be writing disrespectful offers every day. You should be following up every day. You should be learning creative financing, seller second, seller first. This is the time we make money. Investors make money when we have more options and less competition. This is the best real estate market for bigger

pockets in a freaking decade. Most people think it's 21. No, it's 26. This is the market we should go ham. If you are a buy and hold long-term investor, like I think most of our audience is, this is our market. Don't get me wrong. It will take work and follow up and lots of offers and being told no a hundred times. Yeah. But who cares? You only need one yes answer. I am so happy you says Michael. Henry and I talk about this all the time. It's, you know, there's all these headlines. Like prices are going down. Good. That's great. Inventory is going up. Fantastic. Thank you. I think I'm seeing better deal flow now than I have since 2019, probably, at least, maybe before that. And there's still garbage out there, though.

Like, I think that's kind of the thing that people are seeing is if you're just a casual observer and you go on Zillow, the majority is garbage. And so people are getting discouraged. So maybe you can tell us a little bit more about your process. You mentioned making disrespectful offers, but like, how are you waiting through the best? bad stuff, overpriced stuff out there to finding that one yes that you were alluding to. I believe every investor should have what I call a buy box. It's a focused set of criteria that produces a finite list of opportunities. I believe most new investors overcomplicate this game. I believe you should have a set of criteria. And I'll give you my criteria from 2001 in a minute,

just to give you an idea. Yeah. But it should produce 20 to 40 active listings. Anything less, it's too tight anything more more it's too much so here's my criteria from 2001 9 3703 that's a zip code in Fresno, California single family homes so not duplexes condos trailer parks mobile homes single family homes three or four bedrooms so not small not big a single story two car garage between I want to say 1,200 and 2,000 square feet right why did I do that well I needed a set of criteria that pretty an active inventory of 20 to 40 listings. Why? I never lived in Fresno. I never knew anybody in Fresno. I could not learn the market of Fresno. It's half a million people in 2001. Now it's a million people. How the hell am I going to learn a market that big from three hours

away? I'm not. I had to get super micro focus. And then I look every day. It's a 20-minute activity. Put in that criteria today, it's a save search in 2001. It wasn't, but you just saved a search, hit it again. And all you do is you document what's changing. And for the first 90 days to 120 days, you're not doing squat except seeing what sells and seeing what changes and all of these things. And then at some point, you're going to come to a realization that you can speak to the average. So the average deal produces three and a half percent cash on cash.

I call it a yield. But it's basically down payment, closing costs, make ready, and then the expected yearly cash flow, that produces a percentage. So what you're trying to do with this criteria is not buy. You're simply trying to articulate to yourself or anybody else who's listening is, what is the average deal in my buy box? I do not want you writing an offer at all until you could tell me succinctly what an average deal is.

Why? Because most people can only buy one deal. And I don't want anybody in my world to do an average deal. We are only going to do great or legendary deal. So an average deal is 3.5%. I don't want you do anything less than 5.5 or 6. If an average deal is 6, I don't want you to do anything less than 9. This is a game of doing great deals.

And again, as we said at the opening, this is the best market in a decade to find and or create those great deals. So that's what people should be doing. too many people rush, rush, rush, I need to buy. They got like money burning a hole in their pocket. And they're like, hey, the first deal is going to be my education. Hey, if you want to lose money, just send me a check every month. I'll educate you. Yeah, I'll educate you for free. Just send me a check. And oh, you feel better? Okay, great. No, do the work, do the work, do the work. I love this man. I mean, this is, I'm excited to have you on Michael, because this is kind of the philosophy, Henry and I have been talking about all the

time and makes a lot of sense. I've never heard this 40 active inventory number, though. I like that. That's a really good benchmark. But how'd you come up with 40? Is that something like, you know, you need to make 40 offers to be able to get acceptance? It was really a time constraint because, again, I was a busy tech worker. I was traveling all over the world. I didn't have a lot of time. I was raising a family. And I only could allocate 20 to 30 minutes a day to getting better. and I found that I could go through 20 to 40 active listings in 30 minutes. It was really that simple. Because I believe most of us, certainly the W-2 employees, we don't have a lot of time.

Time is our constraint. And again, if you're going to learn something, it takes daily repetition. That's the other thing that drives me crazy. I tell people 30 or 20 minutes a day, seven days a week. They're like, Michael, I don't have time. But I'll do five hours on Saturday. No, I don't care. No, that's not it.

You've got to see what's happening every day in your buy box. because once you document the buy box on Monday, it really doesn't change that much Tuesday, Wednesday, and Thursday. There'll be some days that nothing changes. Great. You're done in three minutes. But document the changes and move on. Yeah. So again, it was really a time thing, David.

Pastor Zuber is taking us to church. I love it. Amen, brother. This is the articulation of what Dave and I have been screaming about. So I love that you're coming in and, uh, and, uh, and, schooling us all in what is probably the most amazing time I've seen to buy property in the real estate market. And every time I say that, people look at me like my heads on backwards. I'm like, man, this is what you asked for. Yes. Like if you decided to invest in something, the goal is to

buy low and sell high. You don't just get to buy low because you feel like it. You have to buy low because the conditions indicate an opportunity to do so. So if you decided to invest in real estate, what you asked for was an opportunity to get properties at a discount. And that is exactly what the market is offering you right now. Nobody said it's going to be comfortable when those opportunities are around. Nobody said it's going to be fun. Nobody said it's going to be easy.

Nobody said it's going to be a good old time. Actually, everybody said it's going to be exact. Everybody who's done it before said it's going to be exactly the. opposite. They said it's going to be terrifying and scary and horrible and you should buy all that you can that makes sense for your wallet and for your buybox and for your market because you make money in times of pain. And when everybody else decides it's a good time to buy, you should be looking to optimize your portfolio. What should I sell? What should I get rid of? What should I 1031 into something else while it's a good time to get rid of properties? How to maximize on the people

who aren't doing this research that Michael is talking about every day. This is investing, not real estate investing 101, investing 101. Buy low, sell high. So if you think it's uncomfortable right now and you think it's scary, guess what? You're right. Go do it anyway.

I love the passion of this episode so far. We're just yelling. We're all agreeing, but we're just yelling at each other. Well, it's really funny because you're right. I mean, people look at me like I have a third eye when I tell them today's the best real estate market in a decade. They're like, what are you talking about? You're talking to your own book. I'm like, come on that guy.

What do you want? You want more inventory or less? Oh, of course, I want more. Do you want more or less competition? Well, I want less. And I want more motivated sellers. I'm like, we're three for three. Get out of your own way.

So with that being said, Michael, there's a subset of people listening to this episode who are in the boat that you're talking about. So I think the people who are poised to do the best in this market right now are the ones who have already positioned themselves to be able to take action. But there's a subset of people right now who want to be able to take advantage of this market and they may not have started to position themselves appropriately to be able to act quickly. What steps should those investors be taking to prepare themselves and ramp up quickly so that they can take advantage as, some of these opportunities in this current environment. Well, the good news is this market will last a while, a while being six to 18 months, at least. So again, you have time.

If you're watching this episode, you still have time to do it. But I'll go back to my earlier buy box discussion. I do not want anybody in my world to just start writing offers blindly. Until you have a buy box, step one, until you can articulate what an average deal in your buy box is, which usually takes 90 days. I don't want you riding squat. You're gambling. This is not a time to gamble.

I have been there, done that in the dot-com crisis, and it crushed me. I turned seven grand into 200, only to see 200 collapse to 40. You want to feel like a miserable loser. Watch 160 grand evaporate because you're gambling. That sucks. Don't do that. I don't want anybody gambling. So again, get a buy box, get disciplined, look at it every day.

In 90 days from now, you can talk to David, Henry, or I, and say, my average, yield is X, then you can go write deals that produce X plus. That's the process for everybody. And you're right. A lot of people are, you know, a lot of people hopefully be convinced to take action, but it doesn't, you can't write offers until you know what you're doing. Michael, this is something I've, same concept, but I've called benchmarking. Like, you have to know the benchmark in your, in your area, right? But people struggle with like, how do you actually go out and do that? So let's talk through that, but we've got to take a quick break. We'll be right back. As a host, the last thing I want to do or have time for is to play accountant and banker.

But that's what I was doing every weekend, flipping between a bunch of apps, bank statements and receipts, trying to sort it all out by property and figure out if I was actually making any money. But then I found Baseline, and it takes all of that off my plate. It's Bigger Pocket's official banking platform that automatically sorts all of my transactions, matches my receipts, and shows me my cash flow for every property. My tax preparers done and my weekends are mine again. Plus, I'm saving a ton of money on banking fees and apps that I don't need anymore. Get a $100 bonus when you sign up today at baselane.com slash BP.

BiggerPockets Pro members also get a free upgrade to Baselaine Smart. That's packed with advanced automations and features to save you even more time. My home and I have a very one-sided relationship. I work hard to pay for it. and it mostly just sits there. It's got no side hustle, no part-time gig, just four walls living its best life while I'm covering the mortgage.

Here's something I recently learned. When you're away from home, it doesn't actually have to sit empty. You can list your space on Airbnb, and now there's something called the co-host network, which makes it a lot easier to do and takes a lot of the pressure off getting started. A co-host is a vetted local

with hosting experience who can help take care of all the details. They can help set up your listing, manage reservations, message guests, and even provide on-site support. So hosting stays stress-free and manageable. So instead of your home just sitting around waiting for you to come back, it could actually help bring in a little extra income while you're away, whether you're traveling for work, visiting family, or just taking a vacation. And that feels like a much healthier relationship, honestly.

Find a co-host at Airbnb.com slash host. Most investors spend more time chasing deals than reviewing their insurance. But a quick coverage check can be fast, easy, and one of these smartest ways to protect and even improve your property's cash flow. As the months get colder, frozen pipes, icy walkways, and seasonal wear and tear can increase the likelihood of claims. And traditional insurance companies aren't always built to handle these claims quickly or smoothly.

That's why more real estate investors are turning to steadily. They focus exclusively on landlords, whether it's a single-family rental, a burr-builder's risk policy, or midterm holiday guests. You get fast quotes, flexible coverage, and protection for property damage, liability, and even loss of rental income. Now is the perfect time to review your rates and coverage. Get a quote in minutes at biggerpockets.com slash landlord insurance. Steadily, landlord insurance designed for the modern investor. You just realized your business needed to hire someone yesterday.

How can you find amazing candidates fast? Easy. Just use Indeed. When it comes to hiring, Indeed is all you need. That means you can stop struggling to get your job notice. on other job sites. Indeed, sponsored job posts help you stand out and hire the right people quickly. Your job post jumps straight to the top of the page where your ideal candidates are looking. And it works. Sponsored jobs on Indeed get 45% more applications than non-sponsored post.

The best part, no monthly subscriptions or long-term contracts. You only pay for results. And speaking of results, in the minute I've been talking to you, 23 people just got hired through Indeed worldwide. There's no need to wait any longer. Speed up. your hiring right now with Indeed. And listeners of the show will get a $75 sponsored job credit to get your jobs more visibility at Indeed.com slash rookie. Just go to Indeed.com slash rookie right now and support our show by saying you heard about Indeed on this podcast. That's Indeed.com slash rookie. Terms and conditions apply. Hiring, Indeed is all you need. When I bought my first rental, I thought collecting rent would be the hard part. Nope. The admin

crushed me. Every night was receipts, tax forms, and checking who was late on rent. I kept thinking, if this is one unit, how do people run 10? Base Lane changed that. It's BiggerPockets official banking platform that handles expense tracking, financial reporting, rent collection, and even tenant screening, all in one place. It's the system I wish I had from day one. Sign up today at baselane.com slash Bigger Pockets and get a $100 bonus. Baselane is a financial technology company and is not an FDIC insured bank. Banking banking services provided by Threadbank, member FDICIC. Welcome back to the Bigger Pockets podcast, Henry and I are here with Michael Zuber talking about why Michael thinks that this is one of the

best times to buy real estate in a decade. And now we're going to talk about how you actually go and take action. Michael said, you need to know what the yield is in your market once you've had this buy box. So Michael, talk us through like, how do people go from designing a buybox to understanding what a good deal actually looks like in the market they're looking at? Yeah. So the yield calculation is a lot simpler, right? I'm an accountant, econ, MBA, and I had my first Excel spreadsheet way back in the day that was multiple tabs, and it's just chaos. I really boil it down to a very simple spreadsheet, so I'll try to articulate it here. There are really only two numbers that matter to calculate you, and I'll talk about the denominator first, and the denominator is the bottom number.

This is how much money do you have to take out of your bank account to buy an asset and make it rent ready. So in broad strokes, those are three things. One, your down payment. Two, your closing costs. And three, make ready, if any. Sometimes that's zero if it's turnkey. Sometimes it's a big number if it's a full gut rehab. But those are the three numbers on the bottom. On the top is your yearly expected cash flow. So part of this 90 day period, you're going to have to go figure out what the average rent is for your defined buy box. You're going to have to figure out your taxes. You're going to have to figure out your insurance. You're going to have to figure out your reserves and all of your expenses, right? Capital reserve for bad debt, bad tenants, all of those things.

What will happen is that rent minus all those things will produce a monthly cash flow. You take that number times 12 because there are 12 months in the year and that is your top number. So for example, let's say it's 200 bucks a month. So 200 times 12 is 2,400. And just for easy math, let's say the bottom number is 24 grand, right? Down payment, closing cost repairs is 24 grand. You divide those. And in that very, very simple example, the answer is 10%. That's it, right?

You do that across all of your active inventory. You know, some will be 10, some will be four, some will be 11. That then will at some point, you go like, oh, I got it. The average is 8.2. That's how you do it. It's just repetition. It's daily, daily you do this, and then eventually you'll notice what the average is. I like the thought process here.

And I just want to highlight for people who might have missed it. Dave asked, how do you do this? You gave a formula, but you also gave a recipe for what people should be learning as they're doing their research. And that recipe was understanding what the average rents are in the market in your particular buybox. It doesn't matter what the total market is if your buy box is outside of that. So pay attention to the rents in your specific buy box. box. Understand what taxes are on the asset you're looking to buy. If you're buying single family, much less than if you're buying multifamily. Taxes are a big part of this. Taxes have gone up

substantially since Michael got in the game. Heck, since I got in the game. So it is a huge expense. It has gone up recently. Also, topic for another time, you can actually fight these tax costs. So if your taxes are going up and you don't agree with it, argue about it. Insurance, this is huge in some markets more so than others. If you're in the middle of the country, less expensive unless you're in Tornado Alley. If you're on the coasts, probably way more expensive because of storms, extreme weather and things. Pay attention to this.

Some markets, it's a really big deal like California. There are less insurance providers in California now than there was a year ago. Who knows if that's going to continue? But it's very expensive. So study these things. These are things people didn't have to study before because they weren't really needle movers. But now they are deal killer. if you are not researching,

understanding them, and adding them to your underwriting. And then reserves. What reserves? What's that mean, Michael? Are you saying you actually have to have some money? Yeah, I would strongly suggest if you're going to be a buy and hold investor,

you have some reserves, not only in the game, but you should be reserving some every month. And that's what a lot of people miss. It's not your money. It's the business is money. Put it away. Here's the deal.

Guys, I think getting wealthy is a remit. remarkably simple three-step process that most people miss. And real quick, you know, step one is you have to create discretionary or disposable income. That's basically money you could light on fire and nothing changes, right? Why is that important? Because that becomes the seed capital. That discretionary income that you sock away every month, every week, whenever you're paid becomes seed capital for step two. Step two is you've got to become an elite investor. And I'm trying to give you the formula to become an elite investor, right? Get a buy box. Get a focused, learn taxes, learn insurance. You need to become the expert in that set of criteria because what does an elite investor do? A lead investor can see value like that. That's what the magic of this game is. I could tell you in 937.03, 3 or 4 bedrooms, single family homes, two car garage, 1,100 to 2,000 square feet, what a deal was. Why? Because I looked at it every day for three freaking years. Right? Nobody was going to beat me on that.

market. And then you hold for a decade. And this is why I brought this up is because if you don't have reserves, you're going to get busted out. Like you guys don't know my story, but my first property, Norris Drive, I was so happy after spending a year to find it. I did everything right with tenant selection, but they got divorced the first month they moved in. The wife took off. The husband became a drunk and lost his job. Oh, God. And he destroyed my property the tune of 15 grand. I never received a rent payment. Ever. Oh, my God. Never did. I got a first month in deposit when they moved in, but I never saw another dime. And I had to evict him. And I had to do a 15K remodel on something I just remodel, right? That would have busted most people out. Right. Yeah. The story goes on. We end up 1031 out of North

drive and new an apartment building we still own. So there is a happy ending, but I almost busted out on my first property. This is the whole game. right? You have to stay in it. The way you lose money in real estate is being forced to sell, right? Like, that's it. If you stay alive, you're going to be all right. Like, that's, there's always risk, right? Things could happen. But, man, it's pretty tough to lose money in real estate over the long run. If you just have enough cash in the bank account to weather your storm, if that means you buy, you have to wait an extra year to buy your second property, that's fine. Like, you should actually do that. People get confused. because they think buying real estate and owning real estate are the same thing. You can absolutely buy real estate with none of your own money. That is very possible. Doesn't mean you should, but it is very possible. But you cannot own real estate unless you have some capital because of things like that.

Things break. People need things fixed quickly. Or even if you're just a. flipper. Yes, you can, I bought a house yesterday. I paid zero dollars to buy that house. Guess what happens 30 days from now. They want a payment. I have to have money to own real estate. It's also like, it's not even just offensive, too. Like, you can be more opportunistic if you have capital, too. If you buy something and then someone down the street is selling or you have an opportunity to renovate a property and increase rents or add an A to you and you're back to

or whatever it is. Like having capital allows you to be defensive and to take action when there's an opportunity in front of you. I'll give you two examples with that because, David, you're on to something. Again, assuming you've done the upfront work, the buy box, you know average, now let's get fun with this, right? So what am I doing today? I told you earlier, one of the things I did, again, luckily is I raised a million dollars before rates went up. What am I doing now? Well, I'm basically writing two offers on properties that I want. I'm writing a ridiculous disrespectful cash offer and i'll give you some examples let's say the property is 300 i might write it at 205 right just something crazy like that and then i'm going to write a second offer with seller financing

right and i might write that at 275 but i'm even doing more work today than i was 20 years ago because now i can go to prop stream or like system and figure out the debt structure the equity position i can figure out can this seller say yes because hey if they got a 97 percent loan to value the They're not going to say yes to a seller financing. So why waste anybody's time? But if I can go find who's got greater than 50% equity, I can write all kinds of creative offers. And back to our opening conversation, this is the best market in a decade, not only for prices.

That's what a lot of new investors get wrong, is they always think price, price, price, many times it's terms. You said something about price, Michael. I think it might be the best time literally ever to pursue this kind of strategy with the amount of equity that people have in their homes right now and the number of people, almost 40% of homes are owned free and clear. And so if you look at just demographic trends and the economic trends where, you know, I don't think we're going to have a quote unquote tsunami where everyone puts their house

on the market at one minute, like some people are saying. But a lot of that inventory will become available over the next 10, 15 years because old people always sell. I think that's the thing, the silver tsunami people, always miss. But this is an opportunity. They have a lot of equity. A lot of them own it free and clear. Like, this is one of the best times to negotiate, maybe ever with these kinds of things. It's funny you bring that up, David. I've never thought about this. So I've been buying real estate for almost 30 years. And I will actually agree with you 100%. This is the best market for that

kind of offer. And again, I was investing in the crash, but that didn't make sense, right? Everything was leveraged, yeah. Leveraged, yeah, short sales and foreclosures. You're absolutely, I had never thought about that. Today is the best opportunity, most equity. And again, we have the tools. People got a bump in COVID years. So everybody got, I'm sorry, everybody was a genius and bought before COVID. And so, yeah, yeah, excuse me. Everyone tied in the market perfectly. Yeah, you know, Michael, I actually want to get back to something you said earlier. When you were talking about figuring out your yield, when you were talking about what's a good deal in your market, you specifically did not mention appreciation or,

any type of value ad. So I take that that's intentional. And can you explain to us why? Again, you got to remember what I've seen over 25 years. I've seen the crash up close and personal. I saw people with 10 million dollar balance sheets go bankrupt, divorce, and leave the game. And as I said in my wealth formula, the whole idea of getting wealthy is you have to hold for 10 years. And appreciation is smoke. It's just smoke. It's not real until the day you sell. And I'm a long-term buy and hold investor. I will include value add if it increases. is rent. Like, for example, one of my greatest things is to buy a two bedroom, but convert it to a three, assuming the square footage works. So I will do the math, including make ready of adding a

door, a closet, and that. And then I'll have the rent go from, you know, a two bedroom might be 900 to a three bedroom being 1450. I'll do that. Like, that will be included, but I have to have the plan. I'm not, oh, it's got a new kitchen in bath. That doesn't give me rent. Are you kidding me? I think that sort of always makes sense, but particularly in this market. Like, no one knows what's happening with appreciation. My best guess, I've told you guys many time, I think we're going to be flat for a while. At best, maybe going down. And so that scares off people.

That is the reason why there will be less competition. But it also means you shouldn't be counting on that. The way you build equity right now is buy cheap, right? That's how you get equity right now. Make your money when you buy. Exactly. Take appreciation out of your underwriting. Buy it if it works without it.

If you get it, that's awesome. And appreciation is real, guys. You just got it a couple years ago. It's just going to be a while before you get it again. Yeah, if you look at real home prices, and when I say real, I mean inflation-adjusted home prices, a lot of the times, historically, even if the number on Zillow, the nominal home price is going up, the real inflation-adjusted home price is pretty flat for, like long periods of time.

And then you get these bumps, right? I've done research back to 1950. The people are shocked that the real adjusted return is only 1%. That's right. Exactly. It's barely above inflation. And actually what happens, though, is like a lot of times it's flat, real, or right now, it's down, it's been down for several years.

And then you get these pops. It actually looks like a staircase when you look at real home prices. Correct. And so the game with appreciation is don't count on it. Be in the game when that stair step happens. And we're not all Michael. and can't predict it. But like, if you hold it for 10 years, you're probably going to get one of those pops.

If you hold it for 20 years, you'll probably get two or three of those pops. And so that's why you just stay in the game. Just stay in the game. The getting wealth formula is people don't like it because it takes time. That's right. Right. I don't know if it's social media or whatnot. But everybody wants instant gratification.

And it takes a decade. If you can hold and be in the game a decade, your chances of getting wealthy are really, really good. Problem with real estate right now is not the market. It's people's expectations. They've just gone crazy. People are thinking, oh, I'm going to buy this asset with someone else's money and I'm going to retire in two to three years. What?

Like, how entitled are you to think that you can do that? Like, that's insane. Like, you're going to have to work for it. And honestly, it's not that much work. Like Michael just said 30 minutes, seven days a week, are you willing to give three and a half hours a week for 10 years to get rich? Yeah, I hope so. I hope so.

Because otherwise you're going to be doing it. way. 50 hours a week for 45 years and probably not get rich, right? So it's just the math is still so compelling. It's just not what a lot of people on the internet are screaming about right now. And I mean, just be smarter than that. See past that and follow this. This is great stuff with Michael Zuber, but we got to take a quick break. We'll be right back. If my house had a resume, it would probably say great at structure and not much else. I'm the one paying the mortgage. My house mostly just stands there looking supportive. When you're away, it doesn't actually have to sit empty, though.

You can list your space on Airbnb. And now Airbnb has something called the co-host network, which makes it a lot easier to do. A co-host is a local experience host who can help manage all the details, so hosting stays stress-free and manageable. So instead of your home just sitting there while you're away, it could actually help bring in a little extra income. Find a co-host at Airbnb.com slash host.

People love to call real estate passive income, which is interesting because most of the investors I know are very busy. Busy finding deals, busy managing teams, busy worrying they pick the wrong market. Rent to retirement flips that model. They help investors buy turnkey new construction homes, often 10% below market value in top rental markets across the country. Their local teams handle the build, the property management, and the details, so you don't have to. In some cases, investors even receive 50 to 75% of their down payment back at closing, and there are interest rates as low as 3.75%. They've been trusted partners with BiggerPockets for over a decade, and if you want to learn more, visit Biggerpockets.com slash retirement.

Local news is in decline across Canada, and this is bad news for all of us. With less local news, noise, rumors, and misinformation fill the void, and it gets harder to separate truth from fiction. That's why CBC News is putting more during. journalists in more places across Canada. Reporting on the ground from where you live, telling the stories that matter to all of us. Because local news is big news. Choose news, not noise.

CBC News. Okay, when I sell my business, I want the best tax and investment advice. I want to help my kids, and I want to give back to the community. Ooh, then it's the vacation of a lifetime. I wonder if my head of office has a forever setting. An IG Private Wealth Advisor creates the clarity you need with plans that harmonize your business, your family, and your dreams.

Get financial advice that puts you at the center. Find your advisor at IGPrivatewealth.com. Welcome back to the Bigger Pockets podcast. Henry and I are here with Michael Zuber. Let's jump back in. I wonder what you guys think of this. I just changed my opinion on this. So for the longest time, I believe the average American could get rich.

I now no longer believe that. If you look at the average American, we're broke, fat, out of shape, divorced, and whatever, right? It's a whole list of nastiness. What I just tell people is, who the hell wants to be average? Don't be average. That's what I think today. Yeah.

The middle class is just eroded. There's just less of a middle class than there was 20 or 30 years ago. It's very difficult to get a career and get anything other than average and even below average now. I also used to think that entrepreneurs, And or investing isn't for everyone that only some people should or need to do this and there's probably still an argument to be made for that being true But I believe we are in a time now where it is less of a luxury and more of a necessity for almost everyone to have some sort of investment vehicle Side hustle entrepreneurship journey or a secondary job to help produce income. Oracle just laid off 3,000 people. Was it 3,000 people? I think it's 30,000. 30,000 people

overnight via an email. And that email was ruthless. If you think your job is secure, you're losing your mind. Things are way too expensive. And it is so much more important that you, anyone listening, you have some sort of plan to create income, whether that be passive income or active income, but just relying on a company to sustain your livelihood is no longer the comfort that it used to be. We have to do something more now. And I used to stand up and say, hey, this isn't for everybody. Not everybody, I get it. If you just want to go get a job and live your life, that's awesome. I do not agree with that take anymore. I think you have to be able to do something. It may not be in.

investing in real estate. It may not be that you need to go just start a business or buy a business, but the good thing through all of this change is that we have this thing that you're listening to Dave and Michael and myself on right now called the Frick-Freckin Internet. And it has created so many ways and opportunities for people to be able to take what's in their head and turn it into dollars in their bank account, especially with the use of tools like AI. It's not easy. It's not fun. You shouldn't have to do it.

I agree. But I don't know that people have as much of a choice anymore. I agree with a lot of that. You know, step one of the wealth formula, again, is creating discretionary income. What we didn't get into is there's only three ways, right? If the goal is to have more money at the bottom line, you only have three choices. You can cut expenses. You can increase income or you can do both.

Those are the only three options. Yeah. So what did Olivia and I do? We were living check to check because we were, We were spending every penny. We were just like everybody else at 30 years old. We did a deep analysis. We ended up cutting 20 or 30 percent of our spending immediately because it was just, you know, wants versus needs.

And we, you know, we did our needs, but we stopped doing wants for a decade against sacrifice. But you can also increase revenue. And what I'll tell you today, as a W to employ, I don't see myself as an entrepreneur. You guys certainly more entrepreneurship than I am. But you're absolutely right. It has never been easier to take your passion. Like if you're my age, right, I'm 50 freaking three. And you have had a hobby for 20 years.

It might be Star Wars. It might be classic Mustangs. It might be rare wine. I don't care what it is. But you can take that 20 years of passion and produce income from it. You can find your tribe, your community online, start a YouTube channel. I mean, there's just so many ways. You know, I am not an entrepreneur.

I started a channel called One Rental at a time in 2018 because I would board. I now have 24 income streams off of that YouTube channel. It's absurd what happens if you just stay disciplined. Beautiful thing about real estate, as we say on the show, you're not inventing something new. This is one of the oldest businesses in the history of the world. Like, it predates capitalism. Like, this is the most stable business that you can come up with. You don't have to think that hard. You have to be good at it. Like Michael said, you have to be good. You have to be good. at it. You have to put work into it, but you don't have to be Steve Jobs. You know, like, that's the really nice thing about it because I don't want to invent something new. I just want to do

what other people have proven already works. Yep. Buy something with an opportunity to add value or increase value. Increase said value monetize at new higher value. Real estate. Buy my course. There you go. Again, that's the whole, that's the whole game. And again, if you could find that's why most investors fail is they're not focused. I mean, you guys probably see it all the time like I do, right? I want to get started. I want to get started. I'm looking in Denver and Philly and Austin.

Like, you're going backwards. What the hell are you doing? Oh, I want to do apartments and sub two and this and that and blah, but dude, stop. Stop. 20 minutes a day, focus, focus, focus. One of the things I think that you said that was important was recognizing value, right? I like the opportunity you said about turning two bedrooms into three. Are there some other tactical things that people can look for when they're just looking at a

basic old real estate deal or a basic old house? What are some things they can have their eyes on to say, you know what? That might be an opportunity to add some value. Yeah. What I've seen having to help people across the country is, like you said earlier, certain markets, certain things work like the Northeast Seattle, right, adding ADUs or San Diego kind of the same play. Is, again, by having this tight buy box, you not only learn that. that, but you also learn what other people are doing because some properties are being sold,

some people are transacting, and you can see what people are doing with those. So if you're in a market where ADUs are a thing, you're going to learn that, hey, the lot's got to be greater than $6,500. It has to have alley access so you can get in and out, right? You're going to learn these other things. If you're in a market where there's a density problem and you have a, you know, a big, I don't know, a 5-3 that you can convert into a 3-2 and a 2-1, basically your investor eyes come with, that's why repetition is so important. You can see what's transacting and what's not transacting. What has to be, prices have to be lowered. Like what sells first day? You might want to understand that some assets are selling the first day while others take 90 days. Well, you get to go

figure out why. Why did that, oh, that was a corner lot. Why are corner lots important? Well, that gives me two entries to the house. Maybe that's a thing, right? So again, your investor eyes come with repetition. And again, that's why most people fail is because they're like, hey, nothing changed. And I'm going to go look at something else. So again, the first year is all about focus, focus, focus. This is something people can also talk to their agents about. Like if you are struggling with this, call your agent and ask them, what is selling right now? Because I'm seeing this where I live in Seattle, right?

It's slowing down. Some stuff is still flying off the shelves, right? It's like completely dependent. And you call an agent, they'll tell you what? exact features they're looking for. They might not know everything, but that can at least point you in the right direction of what kind of things to be looking for and give you a hypothesis to look after. I'll go one level deeper. First and foremost, you should never talk with just one agent. You should talk with lots of agents. For sure. Yes. And cross-check the variables. But also,

if you're going to get really geeky with this like I did, figure out who else is buying in your buy box. Because A, some of them will be homeowners, sure, but you'll actually have some other investors fishing in your pond. Go figure out who they are. You can do that via title or other systems and go meet them. Go figure out what they're seeing and verify this. Because the great thing about investors is we talk, right? We generally speaking, we don't have a scarcity mindset. We have a, like there's more opportunity. So we're willing, I've talked to people all the time. I've helped hundreds of people in my market of Fresno, California. We're not competition. Talk to as many people as you can. One of my rules is go meet two new people a week.

And if you do that for a year, that's a hundred freaking people. I used to pull the neighborhoods I liked buying in or wanted to buy in and go find all the LLC owners. And then I would ask other investors at meetups who owns this LLC so that I could meet them and talk to them. I want to know what you're buying. Why are you buying here? What did you see here that I don't see? Who are you using to fix these properties? Are you having trouble renting them?

Are they still? Like, I learned so much just by researching. Or I would just, since I'm doing this all the time, I remember the names of the LLCs. And so when I hear somebody mention or I'm at a meetup and I see something, something LLC, I'm like, ah, you're the guy. Let me talk to you. Right. So I think part of this research that Michael's talking about, you can add to it by looking at past

transactions. You can pull past transactions on Zillow and see what's sold, when it sold, how much it sold for, who bought it? And then you can go and do a little bit deeper research. And when you start to see trends, oh, you know, one, two, three, property. LLC has bought 10 homes in my buy box, go find out who one, two, three properties LLC is and talk to them. You know what investors love to do? Talk about their deals. They'll tell you everything. They'll tell you what they're buying, how they're buying it, how much they pay, how much of a genius

they are for buying. You'll get so much information. Just let them talk. Let them cook. Well, speaking of, maybe the last question here, Michael, before we get out of here, tell us about your deals. You just said you raised a lot of cash, right? You're sitting on some dry powder. What are you holding that for? What does your buy box look like right now? So again, I have two buy boxes today. So I have a, you know, I am looking to buy new construction in Vegas. Oh, okay. One of the things, because again, I'm much older than you guys. One of the things I'm starting to think about is how does my portfolio look when I'm dead and I give it to my daughter? Right now I do not want to pass on 100-year-old properties to her because she doesn't want anything to do with this.

So I'm looking to probably create a portfolio of half a dozen new construction today, which will be 30 years old when I'm gone, that she may keep. She's not going to keep the other stuff. So that's step one. There will definitely be one or two transactions there. But the big play I'm trying to make, something I've been tracking since 2022 is all these syndications that are going to go bust. right there were so many stupid deals done in my market right my market of Fresno

California never should have been less than a six and a half cap they traded down to a four and a half cap four yeah yeah and I know there's a lot of busted apartments so I got a lot of money sitting on the sideline because you know there's a good opportunity I had 100 or 200 units via buying busted syndications and again I have relationships I have lenders out there I've done deals with banks for zero down on apartments before because again I've been doing this 30 years. So that's what I'm trying to do is, is I want to be able to pick up another 100 units at 50 to 60 cents on the dollar, probably 100% finance with the bank, but they're going to need a big escrow because most of these assets are in disrepair. So that's what I'm

looking for. If it happens great, if not, I'll pay off some debt and move on. But I think there's going to be an opportunity in the next 18 months to, you know, turbocharge the portfolio via busted syndications. Yeah, I think the busted multifamily market is about to get pretty right. Really good. Maybe not today, but yeah, like next year, two years. Yeah, yeah, for sure. There's going to be a lot out there. Awesome. Well, Michael, thank you so much for being here. This was a lot of fun, dropping a lot of great insights. It was great to have you. I appreciate the opportunity. David, Henry, thanks again. This was my first time in the one rental out of time church service. So I appreciate the invite.

I'll be back next week. Pass around the collection plate. I'll donate. But we appreciate it. it. Thank you, family. And Michael, if people want to learn more for you, watch your YouTube channel, where should they connect with you? One of the few things I've done right in life is everything is one rental at a time. Website, books, YouTube channel, Instagram, one rental at a time. Well, check that out. And thank you all so much for listening to this episode of the Bigger Pockets podcast. We'll see all next time. Thank you all for listening to the Bigger Pockets Real Estate podcast. Make sure you get all our new episodes by subscribing on YouTube, Apple, Spotify, or any other podcast platform,

our new episodes come out Monday, Wednesday, and Friday. On the host, an executive producer of the show, Dave Meyer, the show is produced by Ian K, copywriting is by Calico content, and editing is by Exodus Media. If you'd like to learn more about real estate investing or to sign up for our free newsletter, please visit www.w.w.com.

The content of this podcast is for informational purposes only. All host and participant opinions are their own. Investment in any asset, real estate included, involves risk. So use your best judgment and consult with qualified advisors before investing. You should only risk capital you can afford to lose. And remember, past performance is not indicative of future results. Bigger Pocket's LLC disclaims all liability for direct, indirect, consequential, or other damages arising from a reliance on information presented in this podcast.