I QUIT REAL ESTATE!!!

Michael Zuber (0:02)

I quit real estate investing. That seems to be something I am hearing more and more in the real estate space. In fact, over the weekend, we heard from one of the biggest names in the space, that in himself, Mr. Couch Flipper himself, Mr. Ryan Panetta. Yes, Ryan Panetta, the guy who has held many wealth cons and other events, is quitting real estate. He already backed off flipping and went to nationwide wholesaling. He is now, according to his own post, giving up on real estate. That, folks, and the first three sessions of Bigger Pockets are very eye-opening to me. Of course, we will go through the economic news, but given I am at BPCON and we just finished up day one, I thought I would give you my summary of day one. And frankly, it's really connected to what Ryan Pineda just did. So I have been to three sessions so far. We went to Morgan House's Keynote. I saw Dave Meyer, and I went to Jay Scott's breakout session. Of course, the fourth session was my own, One Rental At A Time, from One House to Financial Freedom. Hopefully, you were there. Hopefully, you liked what I had to say. If you are in my school community, we will be giving you the presentation, and then maybe I'll do it inside YouTube as well. But yes, Morgan Housel, very eye-opening. Step one, I did not know this. As somebody who has talked about Warren Buffett and Charlie Munger a lot, I did not know, and maybe you don't know, that Warren Buffett and Berkshire Hathaway actually had a third partner.

Yes, there was a third partner named Rick, Rick Gurin. Rick Gurin did green stamps. He did C's Candy and many, many other investments alongside Warren Buffett.

And what happened? Well, Warren Buffett always knew he was going to be rich. He just knew that in time, given his strategy, him and Charlie Munger, that they would be rich one day. Unfortunately, Rick wanted to do it in a hurry. And to hear Warren Buffett answer the question, whatever happened to Rick, Warren Buffett said, Rick was just as smart as Charlie and I. Did just as much work, was just as talented. Unfortunately, Rick wanted to go fast. Rick wanted to get wealthy fast. And the market turned, specifically 1974

1974 was a bear market. And because Rick was out on margin, he lost. And guess what, folks? Warren Buffett was liquid. And when Rick got margin called, and Rick lost everything, Warren Buffett stroke the check and bought those shares because he was liquid. Folks, at the end of the day, some people chase hot money, fast money, and some people build for long-term worth. Let's go to Dave Meyer. Dave Meyer gave an excellent keynote speech to kick off day two. In fact, his most important slide to me, he said that some people are built to last, and some people were built to leave. Now, I have joked that Dave is much nicer than I am, but, or actually, it's not a joke. Dave Meyer is a nicer guy than I am, for sure. But I believe what Dave Meyer should have said, some people are built to last, and some people are built to fail. Folks, if you are involved in real estate for the quick money, the hot money, the leveraged money, you are either extremely lucky to get out, or you are going to fail. You are going to quit. Real estate investing is hard. It tests you.

So, again, you are either built to last, because you are thinking in a decade, you know the first five years suck, or you are building for hot, quick money, and you are going to lose, you are going to quit. Then our good friend, Mr. Jay Scott. Jay Scott, somebody that I followed for the longest time, even before he was doing apartments and multifamily and all of that, he was flipping homes. I think it was called flipping one, two, three, or something like that.

Anyways, him and his wife, Carol, were doing great things, and I went to Jay Scott's speech, and shockingly, he was talking about multifamily or commercial. And according to Jay Scott, you have seen nothing yet. The pain is going to go on much longer, we're talking a year or two, prices are going to go lower, cap rates are going to go up, and you haven't seen the end of pain for syndications. Now, you know I have a particular bug about syndicators who raise money on social media, some people that use their names, people that talk about being financially free in a year, that kind of nonsense. You know who I'm talking about. But it is interesting to hear Jay Scott, somebody who I respect with an economic background, to hear that the syndication space, the pain in multi-family is just beginning. He painted a pretty dark picture of the next couple of years.