Real Estate Bloodbath!! Who Wins & Loses? (The Reality)

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Michael Zuber (0:57)

As I had been warning for the last couple of months, we have entered a real estate depression. Some might even call a real estate bloodbath. What I want to do here with Adrian Hernandez, who's been in the game a long time such as myself, is we're just going to talk about who is going to survive and how. And let's be clear, lots of people will not survive.

I would argue that plenty of people who started in 2021 and thereafter, have bad habits, unrealistic expectations, crazy overhead, and are going to go bust. So Adrian, let's talk about who is going to survive. And you know what? Let's kick off with mortgage brokers. We just got an update on mortgages. Refinance demand down 56 percent year on year, purchase demand down eight. It is ugly in mortgage.

Who or how survives the mortgage industry in this cycle?

Adrian Hernandez (1:54)

So good. I'm going to blink at this. We are going to talk about the mortgage, but I'm just going to throw it into a quote that says, it's not the strongest of the species that survives, nor the smartest, not the strongest. Catch on to this. It's the one that is most adaptive to change. And I believe it's for those that have been through change, who know how to adapt. To your point of 2021, all the people that got in in 2021, a lot of you have no idea how to adapt, because you're just used to a market that's going like this. You've never cold called a thousand houses in a week. You've never door knocked a hundred doors in a day. You've never done 10 open houses with no pay. You've never had a million dollars fall.

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Everything's been perfect.

Adrian Hernandez (2:43)

So for mortgage brokers, it's gonna be those, the ones that are most adaptive to change, that have seen this, that have been through this and are willing to change. I know a great mortgage broker. He's gonna crush it because every time the market changes, he finds a way, he finds where investors are looking for, he finds where the market's going, and then he puts his mortgage company, what he sells there, right? He's being innovative. He's being adaptive.

Michael Zuber (3:08)

Dude, I love how you started this. That is a great quote that I haven't thought about in a while because most people think the strongest species survives or the smartest. It's not, it's the most adaptive.

And I want to be really clear. If you started in this game in 2021, I really do feel bad for you because you're probably going to go bust because you have bad habits, unrealistic expectations, crazy overhead, too many tools. You haven't done the blocking and tackling. Talk about thatch nguyen. You want to know why thatch is successful? Because he door knocked 100 doors for 10 years in a row.

Adrian Hernandez (3:45)

And he's not afraid to go back to door knocking 100 doors in a row. If for some reason, shit hit the fan.

Michael Zuber (3:52)

Exactly. Yeah. Yeah. So again, folks, in the Morgan's industry, again, I think you're absolutely right with your example of your buddy. What I would tell somebody in Morgan's today is volume is going to be down. It is 56 percent like who is going to refi when rates are at a three year high? Not many people, only desperate people will.

So again, what you need to realize, at least for the next six months, is you have to put yourself where the deals are.

And those are going to be either first time home buyers, FHA, VA, because they're actually getting a sniff these days, or investors. That's just where the game is. So you've got to get out, you've got to understand the lingo, the language you've got to get in front of more people. And the other thing is, this is not the time to try something new, right? This is not the time to do a $10,000 Facebook Marketplace when you've never done one, or Facebook ads, or whatever. This is blocking and tackling, getting small, reducing surface area, and just grinding. You are going to work harder these next six months and make less money. But you know what? You're going to survive, and then you are going to thrive, because all the pretenders are gone. Yep.