How Michael Zuber Quit His Job on a Whim After Achieving Financial Independence

In this episode, Michael and Emil invite Michael Zuber back on to discuss the importance of learning your market very well, what he anticipates coming in the near future for the real estate market, and how he transitioned into retirement on a whim.  ---   Transcript   Emil: Hey, everyone. Welcome back to another episode of The Remote Real Estate Investor. My name is Emil Shour, and today I'm joined by Michael Albaum and we're going to be interviewing another Michael Michael Zuber, who you guys might be familiar with. He was on another episode. We did, I believe it was episode 11 and it was a great conversation, really smart guy. And we wanted to bring him back for another episode case you guys don't know him. He's the author of a book called one rental at a time, which I highly recommend you read. I often cited as one of my favorite real estate investing books. All right. Let's jump in Michael, Michael zebra. I should say welcome back to the show because I'd have you again.   Michael Z: Yeah, this, this should be fun.  I love talking real estate love helping people. So that's what you do and I'm glad that the partner on another podcast.   Emil: It sounded like the guys were telling you that your last episode, which if people miss that one, that was episode 11, that was like a hit. I still get messages from people saying I love the Michael Zuber episode. So, I'm excited. And I think we're going to have you as a regular. Hopefully we get you on like every other month to come and chat with our listeners and us.   Michael Z: I'll be there anytime you ask, I really do enjoy this topic.   Michael A: Awesome.   Emil: So for people who are not familiar with you, can you give us the quick summary rundown of who you are and your story?   Michael Z: Yeah, essentially, my story goes like this. I wasted my twenties, earning a bunch of money and spending it all I bump into rich dad, poor dad, it 30 years old realize I'm a complete idiot. I spend the next 15 years busting my butt during the day working a tech job. But I start sacrificing living below my means. And we start building a real estate portfolio, one rental at a time. It starts with houses. You know, I started investing long before the last crash. So a lot of the stuff we're kind of in the mix of now, I've seen before we moved out of houses into apartments, then the crash comes. All the banks say, no, we find a way to keep growing. Ultimately, we retired, my wife and I retired replacing two six figure incomes on rental properties. And you know, she's been out for about five years and I left February 1st of 2018. And haven't looked back, just enjoy this topic. Enjoy helping people see what's possible.   Emil: I love your story and your book. I refer back to it all the time, one rental at a time. I think everyone who's listening should go read it. It's such a, it's a great story. I think a lot of other books I've read, you know, they don't get into the story as much and like the different challenges that arise throughout someone's investing career. And I love that you tackled those. So definitely recommend people go check that out.   Michael Z: Yeah, I appreciate that because I, it's not a how to book. Right. You know, I don't, it's not a how to book. It is literally what I said. I read rich dad poured out and it changed my life. Here's a 15 year journey, which, Oh, by the way, happens to correspond to a crazy real estate cycle, both boom and bust. You know, lots of mistakes are included and ultimately success, but it was 15 years, one at a time, you know, some good days, some bad days. And you know, the book is really meant to create belief and confidence in people. I really hate that. I see a lot of people out there working to build a nest egg and then they give it to someone else. And in real estate that's often called a syndication. I want more people to learn their market. And you know, in this case come to Roofstock and, you know, make a selection, right. Bet on yourself. Don't take 50 grand and give it to some schmuck who goes, he has a big YouTube or yeah, YouTube presence. That's just stupid.   Michael A: There are so many things that you just said that I want to touch on, that, I agree with one, I think, especially within the Academy, I talked to a lot of people about, you know, building a passive income portfolio and hitting X dollar mountain passive income. And they're like, Oh, there's no way I could ever do that.You know? Well maybe not today, maybe not tomorrow, but in a year from now at 10, 15, you're living proof that it is possible. And it took you 15 years to get there. So I love that. And then as far as the syndication stuff, I think that's so interesting because I think a lot of people use that as a crutch, right. I want to invest in real estate, but I don't want to go do the hard work to get there. And so I love that advice of, Hey, just go learn the market.   Michael Z: Yeah. You only have to learn one. You know, learning a market is a skill it's researching. I talk and teach all the time about if you learn your market. And let's just, I don't know, pick a market like Fresno, where I am, right. It produces a 6% return and you can calculate it. It's easy math. Then your job is to go find seven and 8% yields. That's it. And sometimes the market's crazy like today, the market today is the strangest I've seen in 20 years. The supply of affordable housing is 30 or 40% below. What I am used to and the demand is high. And we're competing with owner occupants that can get mortgages now with a two on it. Right? My first mortgage on investment was almost 8%. So it's a very odd time. This is a time to learn a market, educate yourself, build confidence because it could change in a heartbeat. Come later this year or next year, I'm not saying it will. I'm just saying it could, this is the time to learn, learn, learn, learn.   Michael A: There was, I think it was maybe a Warren buffet quote or something, but he talks about, you know, if you're not confident to go execute in a strong economy, there's no way you're going to feel confident to go execute in a weak economy.   Michael Z: Oh yeah. I mean, yeah. I had not heard that one from Warren buffet, but he's so right. If you were to ask me, my best time to buy was 2010, 2010, we were buying houses for land value or less. And there were like literally houses on them. It wasn't just lots and nobody was buying it. It was crazy. You know, right after that financial company went out, Bear Stearns, I think. And it was a weird time and it wasn't hard to find they were in the MLS. Like any price excepted make an offer, like all capital letters. I'm like, okay, well I can write an offer and I'll write an offer, half of list and all that stuff. So our busiest year was 2010 and just nobody was around. It was just nobody. So yeah. I agree with you.   Emil: Did people think you were crazy in 2010 for going and buying real estate? When it was kind of bottoming out?   Michael Z: They did. When they, if they just heard right. If they just heard, Hey Michael and Olivia, Olivia is my wife named, just bought another house. They thought we were crazy until they realized, you know what, that was our hundredth or a hundred and fifth unit. Then they're like, Oh, they must be doing something. Right. But yeah, one of the reasons I still go to real estate meetups and I agree to talk is I want to see what the audience is doing because yes, I'll talk on any topic they asked me to, but I always leave like 20 minutes of questions and why I want this is I want the questions and all the questions in 2019, you're either a first time wholesaler or you were a syndicator who had never done a deal. And that's all I heard about. I'm like, Oh, we're near the peak. And I used that signal to sell 50 units of apartments in 19. So I have a bunch of cash ready to deploy if the market turns.   So I've danced through raindrops twice. We sold housing at the peak in Oh five Oh six. And we sold apartments at the peak in 2019. So if you learn your market and you look every day, I've been doing it 20 years. And I still look every day. I look before this call and looking, does it mean by looking just as what's going on, what's new, what came off? What's been price drop, what came back on? It takes 20 minutes. Everybody can do it. The key is you can't do 17 different markets. You can't do 15 different types of real estate pick one. And for most of the people watching this, your most important thing to do during the day is work nine to five or eight to six or whatever it is. So find 20 minutes before after work to change your future. And you don't have to grow a portfolio to the size of mine. If you got to four or eight or 10, you're going to fundamentally change your life forever. And that should be good enough if you want more great. There's nothing wrong with four. Four is awesome.   Michael A: I love that. I think, you know, keeping your finger on the pulse is so important because now you recognize change. Whereas if you're all over the place, like you're mentioning, you're not going to see it because you're not as involved. You're not, you know, embedded in that market so to speak. Yeah. So you mentioned something Michael, about how this is the strangest real estate market you've seen in 20 years. And curious to know, I mean, from everything that I've seen, I've experienced, everyone talks about, you know, we at the top of the market in 19 and now COVID hit and now there's this kind of impending kind of built up friction, but nothing I've seen really happen yet rates have dropped, but I haven't seen the prices come down like people were anticipating. What are you seeing? What are you anticipating? Obviously without a crystal ball?   Michael Z: Yeah. Again, yeah, just, just one guy's opinion. I only know one market in any detail, but I think there's a couple of things, things that are very clear, there are sub markets everywhere. First and foremost, what I can already see happening in vertical cities, right? San Francisco, New York, LA right. Anywhere that's has towers. What we're seeing is space is good. So you're seeing class a tenants, which are always supposed to be the safest apartments to own. They're leaving because they have financial backing. They have a little nest egg, and they finally realized that, you know what? I don't want to live somewhere where I got to touch an elevator that, you know, 1700, hundred other people have touched. I want a backyard for my kids. I want an extra room for my office.   And you know, frankly, this health crisis has taught us space is good. So that's happening. San Francisco is going to be a totally different city in a year. It's going to be, it's going to be tent city. It's going to be, it's going to be disgusting. Like it was for me in the eighties and I've lived here 50 years. So I remember when San Francisco wasn't the shining stars. It's going to go back the other way. Unfortunately. So verticals out, that is already happening. Class A is not the safe place to be in major metros. The other thing we're seeing is suburban flight. It's already happening kind of localized right in the Bay area. You know, it's East Bay, that kind of stuff, but what's really going to happen. If the companies like Twitter and JP Morgan and all these others continue to say live wherever you want, which I'm not convinced they will. They are certainly saying it now. But if they're still saying that in January, February, we're going to get the mass Exodus from New York and California because of high taxes, right? California's state taxes, 13.3%. I go three hours away to Nevada. It's zero, right? Eventually people are going to make those kinds of decisions. So this will fundamentally change the landscape. There will be States like New York and California who struggle for a decade, probably because they're going to be losing tax revenue and they're going to be having to cut services and people. And it's just going to be a different state, I think for New York and California. So, and then the last thing we're seeing is jumbo loans. Jumbo market is really turned off. Even if you're a Silicon Valley, RSU, IPO kind of stuff. It's hard to get a jumbo loan today. So that market, especially if you're out in the suburbs is slowing down like Fresno.   That's the one part of the market. That's building inventory. But that leaves conventional, right? Sub jumbo, affordable, good quality FHA, passable properties. That stuff is on fire. I mean like fire, there was a house I was interested in that just the other day for 199, my model said I could have paid 170 for it. So 1 69, it was bid up to two 19 because an owner occupant could come in with three and a half percent down. They can overpay my number one competitor. What I look at all the time as the consumer it's because if they are, they're either fearful or greedy. And if they're greedy, they're going to overpay. Because again, what's three and a half percent of 200 grand. It's like 7,000 bucks. What's three and a half percent of two 20. It's like 7,000 bucks, right? It's like not much more so they can overpay. And that's what's happening today. The below the median quality stuff is multiple offers in contract in 48 hours. It's nuts. I've never seen a market like this, not even Oh five Oh six was like this. This is nuts today.   Michael A: Interesting. And something I want to circle back to Michael, can you help quantify and clarify for all of the listeners who maybe don't know what a jumbo loan is? That's not a loan for a jumbo jet is it?   Michael Z: I'm sorry. Yes. So in the lending world, right? When you're buying a home, there is conventional and jumbo loan. So every city will have a loan limit where a conventional loan in. So let's just pick the Bay area. I think it's 5.10, or it's 5.08. So there are some limit. When you were looking to go get a first mortgage, you can't exceed or you're into what's jumbo territory. Jumbo loans are not traditionally backed by the federal government. They are put together by wall street and other lending institutions, a conventional loan, which is below that loan limit. It encourages home ownership. It does all these things. There are FHA typically back programs that say, if you meet this criteria, we will buy your loan. We will be the lender of it. So it's easier to get a yes answer. They're the cheapest loans. When you hear, you can get a 2.75% 30 year mortgage, it's always FHA conventional. They're talking about. So it's just basically what I boil it down to is where's the expensive homes. And where's the average home average homes are non jumbo, expensive homes or jumbo. And Oh, by the way, as a landlord, I never buy none of my properties or jumbo loans. Don't make great cashflow. It's just like the monopoly board, right? You don't buy park place and boardwalk is rentals typically.   Michael A: Oh, I've been doing it wrong this whole time. I always buy park place, shame on me.   Michael Z: Yeah. Well you, you got deep pockets.   Emil: I want to circle back on something you mentioned, we're going to see potentially this flight for some of these major metros LA San Francisco, New York, a lot of people listening to this, it's called the remote real estate investor. A lot of people are looking to invest outside of California and New York. Do you see that meaning secondary markets are going to be more attractive?   Michael Z: For sure. Like I said, I believe a lot of California is I can't speak for New York. I've never lived there, but I actually own a place there. It's where my daughter lives. A lot of us are thinking, you know, for I'll just pick on Twitter, right? Twitter was the one that came out and said, you live wherever you want forever. We don't care right. Until they said like 30 days ago. So if they keep saying that next year, and I think there's a general belief that they may or may not, if they do. Yeah. I mean, California is the most populous state for a reason. And if we lose even 5% of the population that says, I don't want to live in this high tax space with crazy homes, what I'm paying for a studio in San Francisco 4, 5,000 bucks a month rent, I can go buy something in Texas and have a yard and a front yard and all these other things.   Yeah. People make quality of life decisions. And then what's really going to hurt San Francisco. Why I'm down on San Francisco for the next decade is not only you're going to have the Exodus, but you are going to have people stop coming. That is what the feedback loop. That is the Silicon Valley, right? Computer science, engineers come, all the smart people come. They do whatever they do. Some of them win. Some of them lose. You know, it's just the history of the Silicon Valley. We're going to stop being attractive because we're going to have companies tell that 22 year old, 23 year old, no stay where you are. Stay in Nebraska, stay in Utah, stay in Texas, wherever it is, work remotely. So that input is going to turn off and then you're going to have the slow leak of people leaving. And yeah, I'm guessing the Bay area, real estate market sees a, you know, a double digit hit in the next year to 18 months. It's just why live here. If you don't have to.   Michael A: Yeah. Something kind of taking it to the next step of, yes. We're going to see this mass Exodus. Do you now anticipate seeing some of these traditionally investment friendly markets becoming a lot more competitive now? Like what you're experiencing in Fresno, because now we are going to see maybe new owner occupants moving into the area.   Michael Z: Yeah. You're only going to see new on occupants. You're gonna see new owner, new owner occupants with deep pockets   Michael A: With money, yeah.   Michael Z: Yeah. Right. They're going to be sitting there, like if you're an owner of anything in the Valley or LA you can sell it. And you know, if you bought it, you know, five years ago or more, you're sitting on a pile of equity, even if you have to take a small haircut, you're going to still have enough money to pay cash for pretty much anything you want in most of the rest of the country. So yeah, it's going to happen. And my guess is the States with no income tax that are warm weather are probably going to see even more flight from California. So close to us. That means Nevada and Texas, right? If you want to go out to Florida as well. So I think there's going to be a lot of quality of life decisions made in the next 18 months. And California is going to be a net loser. And there'll be some States that are clear winners. I think it's very logical to see how the dominoes go that way.   Emil: I was just gonna agree with you that I think a lot more company we're seeing it, right? Like people, companies are being more open to remote and not only once companies realize we can work remotely, be as productive. They can also get away with, you know, if you live in Texas now, they're not going to pay you the same as when you were living in the Bay, right? Like you can afford a good quality of life for less. So I think knowing that, that makes more of like the business case for companies.   Michael Z : Oh yeah. What I mean, just think about this, right? You're an engineer, right? And you went to a great college somewhere in the country. You can live where you're currently at for 75 grand a year for what it would take you to live for 150 or 160 K to live in San Francisco. They can hire two of them. You don't even have to be as productive. And they're going to come out ahead. If you're 75%... I mean, let's do the math, right? If you're 75% is productive and you cost half as much, you win simple math.   Michael A: That's so true. It's a good, it's a really good way to put it. That's a really good wat to put it. So Michael, and your last episode, we had John, the main takeaway was single family homes, still the best way to go for the next 10 years or so, has your opinion changed at all as a result of the last couple of months?   Michael Z: No, not at all. If anything, it's gotten deeper. I actually see again, excluding San Francisco, New York. And I think there's a very good chance that many markets actually see double digit price increases. Right? A lot of that's going to boil down to supply. This is a supply problem. And there are certainly, you could look at the chess board or domino's in see a branch that says, Hey, these forbearance requests that are out there, you know, double digit unemployment, a lot of that stuff. Could the necessitate more supply next year? You could certainly tie that together. I just don't see it. I see demand. So outpacing supply that the little trickle of Oreos or foreclosures that may come from forbearances that blow up, won't be there. I actually see most of the pain in apartments, which is again, why I think I was negative on multifamily in 19, but that was more just because cap rates got so low. What I'm seeing in 2020 is not only cap rates expanding, which means values come down. I'm seeing economic occupancy. I mean, just look at San Francisco mountain view rent last month, asking rents went down double digits in a month. That's freaking unheard of. Right? Economic occupancy is down double digits, right? So multifamily and…   Emil: What is economic occupancy?   Michael Z: Occupancy is how many heartbeats you have economic occupancies are how many heartbeats are sending you a check? So you can have occupancy at a hundred, but on economic occupied, stay at 50, which just means 50% of the people aren't paying you. Right? That's the fits in. And we're seeing occupancy go down economic occupancy, go down. We're seeing asking rent, go down double digits into a rising cap rate. I mean, I did some math the other day where like rents went down like 5% economic occupancy went down 5% in cap rates, went up a single point that values fall 30% fricking multi-families are going to get crushed, just crushed.   Emil: Do you think that will be everywhere or kind of?   Michael Z: I mean, there'll be exceptions, right? If you're in like a area where it's getting a lot of net migration and you're not high rises, I think any high rises in trouble. So your garden style, there will obviously be some winners just like there are going to be lots of winners in single family, but some clear losers, New York and San Francisco, there will be some winners like Texas, again could win because again, you're going to get net migration, no taxes. I think Florida could win. They got a little bit of a problem because of all their service sector and cruise lines and all of that stuff. So it's far easier to see single family winning than multifamily, right? I would say 90% of the country wins single family where maybe 30% of multifamily markets wind, because again, space is good. Everybody remembers the last crisis in today's space is good. Do you want to live in an 850 square foot, two bedroom, one bath apartment, or for the same cost? Do you want to move somewhere else and live in a, you know, 2200 square foot single story house. I mean, people are going to make these decisions over and over again. And right now space is good.   Michael A: Yeah. So it's interesting. We talked about this projected growth in price for single family homes. I think so many of our listeners, and I know a lot of people within the Academy often ask, you know, what do I do? Do I sit and wait and sit on the sidelines? Or do I go by now? What our price is gonna happen? And of course, nobody knows, but you're anticipating prices to increase in the single family space. So having invested through the last recession, you know, what advice would you give to a new investor who is just coming to the game now?   Michael Z: I would tell them again, I can speak to Fresno, right? I would tell a new investor coming to Fresno and I would tell them, this is the riskiest time to write offers because you're new, you're hungry, you're eager. You want to get a deal. And when you're in that state, you are very likely going to overpay. You are likely going to pay 220 because an owner occupant bid 219, and you're going to take a deal that I would have paid 174 and you're going to pay 221 and you're going to pay 50 grand too much. Yeah. So congratulations, you got a deal. You'll feel good for a week. And then you'll realize you created an alligator, which I write in my book, which is negative cashflow. So you need to learn your freaking market. Realize that patience is good. This is the most unusual market I've seen in 20 years. And if I'm saying that you should take that as a freaking grain of salt, because it's very easy to make mistakes. So that's what I would tell them. Do your freaking homework.   Michael A: Love it.   Emil: By the way we use the alligator all the time on the show. Now we always give you a shout out. Yeah.   Michael Z: Thank you.   Emil: So we always call out alligators and give you a shout.   Michael Z: That's nice of you! It'd be so that's what I would tell them.   Emil: That's great. I want to shift gears into something you actually talk about outside of. I mean, it's the ultimate goal of why we do all this, which is financial independence. And there were some questions I didn't get to ask you in the last episode that I wanted to ask you this time. I feel like a lot of us that's the goal, right? Like we're trying to build our real estate empire to either semi-retire or have financial independence. And take me back to when you actually retired, like how did it feel? Do you feel like anything really even changed? Is this something I think about all the time, like is anything you need even change? Am I just gonna want to keep, like, how did that feel?   Michael Z: Alright so let's see if I can set this up for folks. So first and foremost, it was February, first of 2018, I worked at a place where that was the first day of the fiscal year. Right? Cause we just finished our year. We were off months. So first day of a new year, I'm 45 at the time. And all along, I'm telling myself I'll retire at 50 because I love my job. I'm having fun. I'm really freaking good at it. And I just, I love my team and all of these things, I go into the office. It's February 1st, I work in sales. So in sales every year they throw up the desk chairs and you reorganize and you get all these new things and your quota goes up a mile. And they had me reporting to an individual that I don't like respect or worse, trust.   This is not a secret to anyone. He has been at the organization longer than I have has a bigger list of friends. I find this as happening. I have about 10 minutes to think about it. I do play with in my head, the chess board that says, do I try to circumvent this, play every chip I've built over the last several years and make this something else? I quickly realized that that would probably be successful, but I'll lose the war. Right? I'll win the battle and lose the war. So we walk into the meeting, the schmuck starts talking and I'm like, I just can't work with you. Right. You're saying all these things and I can see the other side of your mouth moving. And I'm like, dude, you don't like me. I don't like you. This is not a secret to anyone. I suggest you create me a package and I will promise not to say anything nasty. That was it. It was a 10 minute thought. And so my wife, because again, I went to work excited, right? We just crushed it. We had a great year. I'm excited for the next challenge. Hoo, rah, get to the office, figure out, blah, blah, blah, blah, blah. I'm like, Ooh, don't think I could do that. Nope, really can't do that. So I just, I asked her, you know, I'm coming home, I'm done I'm out. And um, so I spend the next couple days, the day smiling so hard. My face hurt. I don't know if you've ever smiled that hard for that long. I called everybody in my phone. I mean A to Z, everybody got a phone call, but then problem set in. I'm a type, a person I've been running a thousand miles an hour since I was 12 years old.   I've had a job since 12, at least one job. Many times I had two or three and now it's, you know, Wednesday and then Thursday and then Friday. And I'm still up at 6:00 AM. Nothing to do. So after about two weeks of this, your mind's dangerous, man. You gotta watch out for your mind. I start to go into a depression. I'm 45. I'm financially free. I don't have any crazy wants or needs. So I'm good for the rest of my life. But I'm telling myself for hours a day that I'm a loser and I'm a failure and get off your ass and do something. So I was a weekend away from just getting a job, right. I'm pretty well known in the Valley. I could've gotten a job at another software place easily, but that's when I decided, I said, you know, I got to tell this story of one rental at a time.   I'm going to focus on that. And you know, that was something I suck at writing. It's hard to do. I'm not good at it, but that was going. And then I realized that, you know what? I want to help people. Right? I'm okay on the ladder. Right. That's where some people struggle as they get to a point where they're financially free, but they've done it keep climbing. And if that's you awesome, that is not me. Right. I'm where I'm at. I got a cushion. I'm good. So I want to reach down and pull people up. Cause I came from very, very humble beginnings. I have enough and don't need more. So I had to get I'm comfortable helping people up. And that's where the YouTube channel grew from now, nearly 8,000 subscribers. Over 2000 videos. I do four hours of original content every week, and that's been enough for me, but you know, being financially free at 45 and quitting in a whim, it felt good for a couple of days, but there were two, I've never been a person to see depression, but those two weeks were pretty dark.Your mind's a powerful thing and it could be used for good or bad. So I remember that timeframe. It was kind of scary.   Emil: Yeah. Wow. I'm sure.   Michael A: Thank you so much for sharing.   Emil: Yeah. So did you, when you walk into that office, you already knew like I'm good. I've already reached where I need to. You just were working because…   Michael Z: I thoroughly enjoyed what I was doing. I’d had done my job for free man. I had done it for free. I just love what I did.   Emil: You're rare. You're rare in that. I feel like a lot of us are like building towards this place where it's like, I can't wait till I go in and I'm not in that camp. I'm not in that camp. I love you Roofstock, but like, like I like what I do. I do marketing and I like what I do, but it's like, there's a lot of people who were in the camp of like, I cannot wait to hand in my I'm quitting letter, but it's cool to hear that you were, you were still like going because you enjoyed it. And then you were in a place where you could change paths whenever you want to do. I mean, that's amazing. That's an awesome freedom.   Michael Z: I probably could. I mean, if we wanted to, I mean like the earliest we could have been financially free and not suffer any kind of hardships financially with where we were, it would probably have been 42 or 43. So a couple of years earlier. So we were fine for a long time. Right. But yeah, again, I went to work that day. Excited is all get out because again, the best day of the year as somebody who just crushed last year is when you get to go attack the next year. And it didn't end up that way by 10 o'clock. I was like, Oh, I’m done.   Michael A: Went sideways!   Emil: Isn't it funny how your reward for a job well done is more work?   Michael Z: Yeah, but I've been on that treadmill for 20 years. So one of my most frequent phrases in sales is we operate 90 day cycles. Right? I can get fired every 90 days for lack of performance. And you know, you do that long enough. You just, you become a callous to it. So it was exciting to me.   Michael A: So many people I talked to, like Emil mentioned, you know, I feel like there's two kind of two types of people working towards financial independence. One is running towards something and you know, they like their job. But I think financially being free would be great or they're running away from something. They hate their job. They can't wait to be done with it. And for the folks that are running towards something that enjoy their job, I share with this again, I heard this quote somewhere, but it's dig your well before you're thirsty. Because for you, if you had said, you know what, I love my job. I never want to retire. Forget this whole investing thing. Why would I bother? I love my job. You wouldn't have been able to walk away, come that Monday morning.   Michael Z: Oh yeah. Oh my God, you know how miserable I would have been? You're so right. If I couldn't have known in the back of my head that this idiot talking across the table from me has no idea that I don't need this place. Yeah. That would have, Oh man. That would have sucked. That would…   Michael A: A shackle.   Michael Z: Yeah. Oh, I gotta deal with you. Oh, I'm going to hate this every day.   Michael A: Did you find Michael? Kind of sticking with human financial independence here that the, we just recorded a podcast the other week with a tax professional. And he was saying that, you know, someone, people who make a hundred grand equally, one from passive one from earned income, the guy who earns a passive for the person who runs a passively doesn't need to make as much because they'll actually going to be taxed less. So for your personal financial independence situation, did you find that you actually didn't need to replace the exact amount you were earning because of that? Because it was tax advantaged.   Michael Z: Oh, absolutely. Yeah. I don't know what the exact math is. I'll be close, but yeah, I could probably, you know, bring in 30% less and live just the same because of different tax treatments, depreciation from a big portfolio hides a lot of top line income fall. He's absolutely right. And that's the beauty of real estate. Absolutely.   Emil: That blew my mind when we did that episode, I had never thought about it. I had thought, okay, here's my income. Now that we're at a lifestyle where we like, I need to replace that, but it's totally different. Cause it's being taxed differently. So you end up with more of it at the end.   Michael Z : Yeah. I mean depreciation, right? It's not a real expense, but it shows up on my tax statement every year and I'm writing off. I didn't look this last year, but it's gotta be almost 200 grand in depreciation that doesn't suck. That's awesome. That doesn't suck.   Emil: That does not suck. I had one last question here. I watch your YouTube channel. I probably watch one or two episodes a week. And I forget who you were talking to. I think it was a guy named Matt and you casually kind of slipped in that you're planning in retirement, like full retirement at the end to like not have any property to sell it off and kind of have all this cash. And I was kind of like shocked. I'm like, yeah, I didn't know that was the plan.   Michael Z: I'm not sure what the plan is. I remember that video basically. So we have a, my wife and I have a daughter and she is in New York as I think I shared earlier. She has no interest in real estate investing. So as we get closer to the end, it's going to be a choice on what we do. Cause one of the things we've always thought about is great. We'll give it all to her right now or at least most of it. Right. But she's made it very clear that she wants none of that. So my guess is we will probably sell off. Well, more than half of it later in life, you know, decades from now, we'll probably do some owner financing things such as that. So we get fair tax treatment, but she'll probably only end up getting 10 or 20 of the highest class assets just because she doesn't want them. But yeah, that's, that's a real possibility. I mean, if you would've asked me two or three years ago, it would have been a totally different answer, but yeah. She's like, yeah, she doesn't want him. She wants nothing to do with them. So we have to figure out something to do.   Michael A: Interesting. Michael, is there a point that you foresee where you are only going to go into sell mode if you ever get to there where the buying the stop never see that happening for yourself? Never. I don't know what I shop till you drop.   Michael Z: I mean, if I ever got like a health scare that said I had a year left to live or something, yeah, I'd be done because I think if your time horizon is longer than five years and you spend the time learning your market, you can't go wrong. If you only had a year left to live, you know, real estate selling costs cycles, it's possible to make a mistake. So as long as I see myself having five years of life left and that's the beauty of real estate, it doesn't have to be a young person's game, right? It's not like playing in the NFL or the NBA. I can take the skillset that I have and keep doing it in my market or heaven forbid get bored and move to another city and start over. I still have the same skill. So yeah. As long as I see myself living five years out, at least five years, I'll keep buying.   Michael A: Awesome. And I'm just curious on a personal level. I love these interviews because we get to ask, you know, self-serving questions. You also have a portfolio invested in the equities market or stock market?   Michael Z: Zero.   Michael A: A hundred percent real estate?   Michael Z: Yeah. I would say, gosh, 99.1% real estate and the rest is gold or silver.   Michael A: Awesome.   Michael Z: Yeah. The stock market, I read a little bit about in the book. I was big in the stock market. I was, you know, there's a lot of people day trading today rewind the clock 20 years. I was one of those idiots who were day trading and killing. Right. I reported a six figure profit year on my tax return day trading one year then by the tax time of the next year, I'd lost it all. And then some, because it will eventually turn, there's a famous guy out there now talking about stocks only go up. Yeah. Right. Yeah. I only go up when there's trillions of dollars being pumped into the market by the fed, just wait buddy. I'm so I've been there. I know what it feels like. Uh, and I've never been back. The casino is real. I mean, who would have guessed Wirecard German bank as a complete fraud with one point $9 billion. That was never there. You know, it's not a place for me. No, thank you. Never. Nope.   Emil: That guy you're referring to, it's funny because he's like a media person. So part of it is like, he's just trying to get eyeballs and attention, but I wonder how many people kind of they're like, yeah, that sounds about right.   Michael Z: I mean, he is clearly entertaining. I watch him. I actually follow him on Twitter. I think he's hilarious talks about the green hammer of death and all these things. I think he's hilarious. He has fun, but he is inadvertently bringing tens of thousands of 20 year olds in, tens of thousands of people taking their stimulus checks and gambling. And the worst thing is they're freaking winning. You go gamble at the roulette table and you hit the number first and you get paid out 12 to one or 18 to one the first time you are going to freaking stay at that table until you mortgage your house. Because you're going to remember that feeling the first time. And I don't know when it'll happen. It may go on for another six months. Right. But there will be a day and it will be nasty and it will come. And I say this as a person that has six figure scars on my back from when I did it 20 years ago. So I'm not going to be jealous. I mean, I know exactly how they feel. I know what it feels like to go to the craps table and win the first two times I get it, it's going to hurt.   Michael A: Get that rush of adrenaline. And then you chase it. You chase it. Cause you remember the first time was so easy. Right?   Michael A: Right. So I'm curious, Michael, if your daughter is not interested in real estate and you are strongly, you know, adverse to the equities market, what are you advising her to do? As far as investment income or passive income?   Michael Z: I had this battle with my wife when my daughter chose her college degree. So here's the story. She's a senior in high school. She tells us that she wants to go get an arts degree, which as you might imagine, what we've just talked about did not sit well with me. I'm like, I'm like, okay honey. I remember. Cause I think it was monster was the dot was the job board at the time. I said, honey, maybe daddy doesn't know, go to monster and how me what kind of jobs you can get when you get out of school. Cause maybe dad doesn't know. So she goes to monster and she types in some arcane logic or words in like, I've never seen no searches, come back. No searches came back. It was like,   Michael A: On the internet, nothing,   Michael Z: Nothing. I'm like, I need this, you know, you're being too specific. Be more general. Right. And then she does it again. And I don't remember what they were, but I want to say like $12 an hour jobs or 15 hour, hour jobs come back. And I'm like, honey, realize that you're asking mom and I to pay 200 grand to get your education. Right. Which is the cost of her school for four years. I said, I can take you to in and out burger, that's a mile away. And they will pay you $18 an hour right now. Yeah. Help me understand. Well, that was a strategic error on my part. She started crying   She starts crying. She runs upstairs. My wife goes to see her. I can hear him poorer. Then my wife comes down. I've never seen her this angry. And she gets right up in my face and she's this little, and she starts beating on my chest. My daughter will go wherever she wants. She's not going to be like us. She's going to make do, which makes her happy, blah, blah, blah, blah, blah. We haven't worked this hard for all this time. She's going to be happy. Not like us basically. And I'm like, yes, dear. So I have not figure that out. Basically, my daughter's going to get a pile of money when I die. And I'm okay with that. That's my answer to that. I did not do that.   Michael A: Right. Got it. Got it. Got it. Well, thank you again for sharing. This is getting real personal. This is great.   Emil: What's that saying? Set it free, and if it's meant to be it will come back.   Michael Z: We'll see. Not yet.   Emil: I don't know if it applies here, but…   Michael Z: There's always that hope that you know, that comes around and she says, well, what, tell me about that real estate thing, but she's 28 now. So it doesn't come around yet.   Emil: All right, let's wrap this one. So we usually end episodes, we've been doing this thing lately where we kind of just have a random question outside of real estate investing. And I just thought of one I wanted to ask you. Okay. I know you can talk about real estate and personal finance for hours. What outside of those two topics, could you talk about with anyone for hours?   Michael Z: So I was very good at running. What's called go to market strategies for software companies. I've repeatedly taking software from zero to a hundred million at many different companies once in as short as 30 months. So I'm very good at go-to-market building sales teams, finding someone's passion and really leading those kinds of teams. So that's where my passion started. Right. Was go to market strategy, all of that. So could certainly talk about that equally for hours and have in different speaking engagements.   Emil: Wow. Do you think that has lended itself well to your investing career?   Michael Z: Those skills? Not really in my investing career, no, but it has, since I've left work, you gotta be comfortable talking as we are, you know, my most valuable college class, which I get asked sometimes was actually in junior college, it was speech and debate by far that one class has made me millions of dollars by getting cause I was an introvert. If you can believe that when starting college I was an introvert and it was that class that kind of tried to break me out of my shell.   Michael A: Awesome. Interesting. There's a show on HBO called Silicon Valley. Have you ever seen it?   Michael Z: I have   Michael A: I get a total kick out of it and I feel like it would be better if your alley being in Silicon Valley.   Michael Z: Absolutely. Yeah. It's funny when they do the inside jokes, I've lived here long enough. I know exactly what they're talking about.   Michael A: You're on the inside!   Michael Z: I'm on the inside.   Emil: It's pretty spot.   Michael Z: It's remarkably accurate and, and embarrassing all at the same time.   Emil: I love that show.   Michael A: This was great. Michael, thank you so much for taking the time to come back on. I really, really appreciate it.   Michael Z: Anytime guys.   Emil: And we're excited to have you back on soon. Alright, everyone. Thanks again for tuning in and a big thank you to Michael Zuber as always such a great guy to talk to and has so much wisdom to share. Hope you guys got a lot of value out of this one. I know Michael and I did and we will catch you guys on the next episode. Happy investing.