–Mike Zschunke, Shift1 Properties / Berkshire Hathaway Arizona Properties
Mike Zschunke is a Private Client Real Estate Broker based in the Scottsdale, Arizona. Associating with Berkshire Hathaway HomeServices and founding Shift1 Properties, LLC for other Real Estate opportunities has allowed Mike to grow to his business providing real estate services in Residential, Commercial, Land and Investment Properties around the Scottsdale and Phoenix Metro area. “We handle everything from Primary Residences to Commercial Investment properties and help our clients make informed decisions about their real estate purchase and sales.” Mike’s “Project Oriented” approach to helping clients find properties and manage their real estate portfolios allows him to build relationships and provide a more personalized service than some of the high-volume brokers. It is these relationships that has led to a large referral network and built friendships for life long business partners. “While we don’t work with everyone that comes to us, there aren’t many that we turn away if we have the time to provide the quality of service that our clients deserve. It really is a relationship business and if we don’t feel that our personalities connect then we can always refer to other brokers or agents nationwide.”
How It All Began…
Mike Zschunke and his wife had always dreamed of returning to Arizona after meeting at Arizona State University in the Late 90’s. After many years in the financial markets on the Chicago Board of Trade and then relocating to NYC to work for Bank of America and Bridgewater Associates, Mike left the corporate world and joined his wife building and operating successful Health and Wellness offices in Connecticut. When the opportunity arose to sell the businesses, Mike and his wife knew this was their chance to get back to the state they initially started their lives together.
Prior to returning to Arizona, Mike and his wife had bought and sold real estate for personal investments. With his experience and understanding of financial tools, Mike felt that he could really help others understand the financial aspect of buying and selling properties. It is with this determination that he dove into researching the local Phoenix real estate market utilizing economic data and conditions acquired from his financial industry experience. “It really comes down to understanding asset valuations and how those valuations relate to market conditions.” Residential real estate is a different animal as the asset owner most likely will be utilizing the property for themselves and their families. There is an emotional aspect to residential properties but that is where the personal connection allows Mike to get to know clients wants and needs. “If I know that the client is a car builder coming from California, I am pretty sure of type of property and environment they want to live in with their family.” Again, building the relationships and building his business off referrals allows Mike to find properties that clients might not know exist in today’s market.
Challenges to Breaking into the Real Estate Business
Mike’s success has not come without challenges. Due to the real estate laws and Arizona being a Non-Judicial foreclosure state, the Phoenix area has always been attractive to real estate investors. Not growing up in the community and not having those family connections in the area were quite a hurdle in the beginning. “It seems like every other person in Arizona either has a real estate license or knows a family member that sold a house in 1972 and is a real estate expert.” Today’s technology allows the consumer access to plenty of real estate information themselves. What the consumer doesn’t know is that much of that technology is really just gathering your information for marketing purposes. “I’ll admit, the consumer comes to me more educated in real estate today than in the past, however it is my job to show them the current numbers and utilize my financial economic experience to help them make an informed decision and what is often the largest purchase or sale of their lives.”
Know your Numbers
Unlike other investment vehicles, shifts in the real estate market are slow. Real Estate is a long-term investment. The media likes to sensationalize up or down swings in the market with attention grabbing headlines. Unfortunately most people don’t read the details and look at the facts. Many of the real estate statistics are published months after transactions have closed and do not necessarily paint an accurate picture of what is actually happening in the market today. For example, The Case-Shiller Home Price Index is a three month average of home prices in 9 districts around the country. It is released on the last Tuesday of every month. The Index published in February is an average of home prices for properties that Sold in the previous October, November and December. Understand that it takes about 30-45 days from the day the Offer is made on a home until the close of escrow so that number its actually representative of the market conditions in August and September so the data for the Index is approximately 6 months old. If you wait for the headlines and expect to time the market, you are going to miss it. “We see deals close everyday and have potential clients calling everyday so we have a better feel for the current market conditions.” Once again it goes back to having that personal relationship and having clients trust your knowledge of the market. Of course, the economic numbers do have value and need to be acknowledged to educate and anticipate market movements but nothing beats the “boots on the ground” experience for analyzing the market and advising clients. Some say pricing real estate is an art form. “It ultimately comes down to what the client wants but it’s our job to educate them so that they can make smart decisions.”
Current Real Estate Environment
Today’s market is very interesting from a historical perspective. We have had 2 record years in a row and prices have hit all time highs. Most people remember the crash of 2008 and rationalize unaffordability into waiting for the market to drop again. Home prices in the Phoenix area have already dropped approximately 15% from the May ’22 highs. Mortgage Rates have more than doubled in the past year and even with the price adjustments, the same home today will cost you more on a monthly basis than it did just 6 months ago. Many confuse the National real estate statistics with local statistics. I learned from working with Ray Dalio at Bridgewater Associates to watch population flows and anticipate market movements based on those flows. In the Phoenix area, we have over 260 people per day relocating to the area and homes for sale are at all time lows. Yes, they are improving but the inventory cannot keep up with the amount of demand so prices are staying pretty firm and expected to increase from here.
The Real Estate Industry
There is much more to understanding the real estate business other than just buying and selling homes. In most states, the barrier to entry is very low and you can be up and running with very minimal education. In Arizona, anyone who pays the fee and takes a 90 hour Real Estate class can sit for the Arizona Real Estate Salesperson exam. Upon completion and passing of that exam, anyone can call themselves an “expert” and help an unknowing consumer buy or sell real estate. In Arizona and many states, it is also legal to call yourself a Real Estate Investor and wholesale properties, even without a license to do so. “The lack of professionalism in the Real Estate business concerns me. We really need to raise the bar and provide consumers with better experience overall in buying and selling all types of real estate.” With experience comes knowledge but you cannot teach ethics and common sense. Real estate can be a very lucrative business but anyone entering the profession should know that most getting into the business don’t make a dime for at least a few months and most don’t last more than two years in the business. Like anything else, you get out of it what you put into it. There is no magic formula or magic pill to become successful in the real estate business. There are many weekend seminars that say they will teach you to get rich and make millions in real estate, and you absolutely can, but I would guess that the majority of people making money in those weekend seminars are the ones holding them.
What Makes a Successful Career in Real Estate
If you are considering a career in Real Estate, there are any multitude of avenues to pursue. There are residential realtors, commercial brokers, investors, corporate real estate advisors, market analysts and many more opportunities to build a successful business in real estate. Mike says that “…relying on his financial background and his Personalized Project Approach to helping clients allows everyday to bring new challenges and opportunities. We can offer a different perspective than most brokers and provide our clients with the absolute best service possible.” It is that dedication to quality that has helped Mike build a successful real estate business in a world full of sharks. The relationships built on Truth, Honesty and Integrity go a long way to build the network necessary to long term success in the real estate business.
Please don’t hesitate to contact Mike Zschunke at www.Shift1Properties.com for more details and information on the Real Estate business or for Public Speaking assignments.
-Mike Zschunke, Shift1 Properties / Berkshire Hathaway HomeServices Arizona Properties – Scottsdale
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