[Editor’s Note: The image above is not Pedro, but it is how I imagine he is writing posts like this one and beyond.]
To all the wonderful readers of Notorious ROB:
Admittedly, the extent of my real estate knowledge goes so far as Ryan Gosling’s epic but also still kind of confusing explanation of CDOs in The Big Short and that owning a home is probably a good thing for me to do before I’m, like, 40. That said, I’m here to help Rob create content about the good, the bad, and the ugly in residential real estate. It helps that we kind of hit it off instantly even though I know very little about real estate. The big question, however, is how the f%#* am I going to immediately start writing good content for all of you guys with such minimal experience in residential real estate? Well, the conclusion Rob and I came to is, while I might not know the real estate industry today, I do know the future real estate consumer: Millennials and Gen-Z.
I was born in 1992 and am towards the tail end of the Millennial population. The prospects for the average American being able to afford a house, as Nicole Lopez so eloquently puts in her interview with Rob called Truth About Millennials and Housing, are grim, to say the least. In the interview, she outlines the average cost of living for a family of four in Texas to have been around $20,000 as of 1979. Since then, for the same family of four, you can expect to pay $76,000 a year. Keep in mind that the average family income in Texas in 2020 was $70,000 a year. So, unless you are working two jobs, the average family will be going into debt just to survive.
Scott Galloway, a professor of marketing at NYU Stern, had similar findings on his Vice show The Rant. Specifically, he says:
“Here’s a look at how colleges have been squeezing students for 30 years. First, tuition costs have exploded 1400% since 1970. Another ratio is in my first house in Potrero Hill, San Francisco cost $280,000. The same house today would cost 1.4 million. So the cost of a starter house in San Francisco has risen from 2.8 times my starting salary after business school to 10 times the starting salary of today’s business school graduates.”
I don’t know if it can be put any more clearly. The cost of living, particularly college tuition and housing is at a tipping point. Average Americans can’t afford two necessities to the American dream: housing and education. I’ll leave the education bit to rest, as this is a real estate blog, but the point still stands and something needs to be done.
I’m not claiming to have any answers. Hell, I don’t even know exactly what MLS’s are. With that in mind, I’m going to do everything I can to learn as much as possible and, most importantly, write about my learning process. In doing that, I hope to inform younger generations about real estate housing but also want to inform the industry about important truths and realities facing younger generations.
I also think this process will be very beneficial to readers who want to engage, not only with the real estate content but with the process of rapidly learning in and of itself. Given the bleak economic prospects for the majority of my generation, there is one, a tiny fraction of hope. That is to learn how to learn about valuable shit, fast. Scott Adams, the creator of Dilbert, popularly mentioned in his book, How to Fail At Almost Everything and Still Win Big, he writes, “Every skill you acquire doubles your odds of success. You can raise your market value by being merely good. Not extraordinary.”
In another interview, he goes into more detail and says:
I’m a poor artist…I’ve kind of through brute force, brought myself up to mediocre. I’ve never taken a writing class, but I can write okay. You put me in a room of writers. I’m not going to be the best one. If I have a party at my house, I’m not the funniest person in the room, but I’m a little bit funny. You put those three together and you have Dilbert and it’s a fairly powerful force.
Similarly, legendary Angel Investor Jason Calacanis, on this podcast, has said:
“What I tell young people who are looking for advice is, “The skill you need to refine is the ability to learn new skills. Tim Ferriss has really pioneered this. Like he can get to 60 or 70% at most things. That’s what you need to learn.”
This, at least for now, is what I am going for. Obviously, I’d like to have extraordinary skills from a residential real estate perspective, but, for now, I’m a novice. Getting to 60% is a good starting goal. Working for Rob is an opportunity to learn how to learn, understand residential real estate, and take all of you along for the ride. In this journey, I hope to also help make housing more affordable so that many Americans still can partake in the American dream.
Stay tuned. My next posts are going to outline the different aspects of the current residential space that I need to learn. So I’m going to write and podcast about it. In addition to helping Rob with his content, I’ll be adding to Notorious ROB’s corpus by documenting my own journey of learning. Hell, maybe I’ll even post under the name Anonymous Dro or something silly like that. Either way, expect more to come.
My next suite of articles will try to answer questions like:
- What does the research and work look like for a lowly millennial like me to actually make a good investment in a house? How do you turn that into passive income or even a residential real estate business What do the traditional residential real estate markets and businesses look like?
- How have the brokerages been operating traditionally? What is the difference between single-family, multi-family, Co-ops, Condos, and Townhouses? What are the most important geographies? How are they changing?
- What are the big policy issues that are affecting residential real estate? Who are the big lobbyists? What are the non-biased points on each side of the political aisle? How will the policies affect the business?
- How is technology changing the industry? Who are the big tech players? How are they changing the game?
Those are my starting points. See you soon!