Epic Real Estate Investing - 5 Steps to Financial Freedom through Real Estate

Episode Date: October 27, 2019

How we get financially free through real estate? This Sunday, Mr. Theriault reveals 5 steps to escape the rat race and reach financial freedom. Take a listen and learn more! Learn more about your ad choices. Visit megaphone.fm/adchoices

This is Terrio Media. Success in real estate has nothing to do with shiny objects. It has everything to do with mastering the basics. The three pillars of real estate investing. Attract, convert, exit. Matt Terrio has been helping real estate investors do just that for more than a decade now. If you want to make money in real estate, keep listening. If you want it faster, visit REA.

iAase.com. Here's Matt. Hello and welcome to the epic real estate investing show back home and for the rest of the year. And what a relief. I've been gone for about three weeks and doing this whole thing on the road. Feels great to be home. I got home though yesterday and the electricity on the side of the house where I do all of the recording is out.

So now I'm in the kitchen. So here I am making another excuse for. sound quality. I think that's like the one of the first no-noes of any sort of speaking or presenting is that you're not supposed to make excuses. You're just supposed to go through it because the audience doesn't really care. Just like, get to the point. Get the point.

All right. So I'll get to the point. Here we go. By the way, speaking of sound quality yesterday, the episode, I just happened to listen to it again. Don't do that very often, but I was actually very curious to how that sounded because I was recording in the airport. That was the first time I've ever done that.

I was on a layaway or layover, excuse me. did the whole episode right there with just people walking around and the speakers going off, the plane's flying over, and it was remarkable. Luca, my producer, was able to make a lot of that stuff go away. Still wasn't the best quality, but it was audible. But what I really hope, if you missed yesterday's episode, I would really love for you to go back and listen to that. It was nine tips to make you a better real estate investor. And I think it was one of the more valuable.

episodes content-wise that I've released in a really long time. And don't let the sound quality distract you. I will probably redo that to some degree in the near future with better quality because I do think it's that important. So make sure that you go listen to yesterday's episode, which I believe was 817. We're on 818 today. And I mentioned in that episode that I like real estate, but I don't necessarily love it. I think that was yesterday's episode.

It might have been the day before. Anyway. But what I do love it. about real estate is what it can do for the average person and that is make them wealthy and with some focus and discipline that wealth can come relatively fast and the operative word there is relatively fast relatively meaning compared to the traditional way we're all taught to go about it the whole 40 to 50 year plan of school job home stocks bonds mutual funds 401k blah blah blah you know what that is right i don't have to go into

detail on that. But that's the time-honored way that still the majority of the population adhere to and more times than not to great disappointment with more than three-fourths of their lives in the rearview mirror. And now they don't really have any other options unless it's to keep working or to finally give this real estate thing a try because it really does empower you and enable the average person to make up for lost time. But that traditional planet, it just won't be enough for most people to live the same lives in their retirement as they did in pre-retirement, let alone experience any sort of wealth. I'm just talking about maintaining lifestyle from your working days to your post-working days. And I get pushed back on this frequently

with stuff like, yeah, Matt, but what about the tenants that trash your house every time they move out? Yeah, it happens. It totally happens. I'm not going to try and sugarcoat that. but the houses that perform well, the tenants that don't trash your house every time they move out, that's more frequent. That's more common. That's more likely the scenario. Just be better at selecting your tenants. That's what you really have to focus on.

Not like that's an inevitable situation on every single piece of property that you're going to purchase or acquire. All right. Or the other one is stocks are simple. You just put money in and it grows. Yeah, over the last eight, nine years, that's certainly what, it would seem like, doesn't it? Absolutely. It has done really, really well if you had your money in the stock market. But, you know, do you remember the dot com crash? It was that 2000 or 1999? 2000? Yeah, that thing just tanked. And it was a terrible place to be. Yeah, but all the money is back.

If you just left your money in there, you did fine. Yes, to some degree, you did recover. But you didn't necessarily do fine, not nearly as good as you could have done. And what I mean by that is when you have an investment and it drops 50%. I mean, some people's 401Ks were just completely wiped out. Yes, but it's all bounced back. Yes, but it might have bounced back and there might be more in there now than there was just before that crash. But you did lose a decade of growth trying to claw your way back up to zero. Most people don't realize that or don't even consider that.

And the other one I get is what happens when the bubble pops? right, the real estate bubble. I mean, there's a stock market bubble, too. We just talked about it. And the real estate bubbles, yes, it can pop. Pop is a pretty aggressive word, an emotional word. And that doesn't pop all that often. It certainly goes through adjustments.

And we're all fresh off of one 2007, 2008. And then on the heels of that, we had this big Wall Street boom. So, yeah, naturally everybody in their general state of mind are conditioned that real estate is risky and the stock market rocks. But it hasn't always been like that and it's not always going to be like that. So I get it, the bubble pops in real estate. But if you're investing the right way, if you're not investing for equity, growth, and speculation, because that all is going to happen.

But if that's not your main strategy and you really are investing the right way for income, it doesn't matter what happens in the real estate market where the values go up or down. The rents aren't nearly affected as much as the market value. and you'll pull through it. You might have to make some adjustments to rents. I was talking to Jeff with this over the weekend or actually at the ground of pound school. I just spent a whole week with Jeff. So I've got a bunch of reference points with Jeff right now.

But we were talking about with all the people that were there in the class, like what happened during that crash? And they're all like thinking, what are we going to do? What's your best advice moving forward? Because there's a lot of talks of a recession and an adjustment. And some people might even think of a total downright collapse. who knows, none of us really know, but we can prepare for it and we can learn from our past mistakes. But Jeff was saying, my whole point here, Jeff was saying that, you know, he had,

through all of his rentals and the values dropped, his rents actually went up. And we had some experiences like that. We had some rents stay the same. We did it in areas where our tenants were heavily financed or employed, is the word I'm looking for, were heavily employed by stuff that was directly or indirectly having to do with the housing industry. We had to make some adjustments, but we pulled through. We never hit zero. So yeah, the bubble can pop, but if you're investing the right way, it's not going to impact you as much as you would probably think. And, you know, I get these all the time. They're not totally irrational thoughts. People are making these decisions and coming up with these ideas based off personal experience and what they're witnessing, what they're

what they see around them. But here's the deal. You just don't stand a chance at any sort of financial freedom unless you incorporate real estate into your financial plan in some way. You don't have to create a real estate investing business. You don't have to be a full-time real estate investor. You don't have to quit your job. But you do need to incorporate real estate into your financial plan to some degree. And for now, let's just go ahead and take our eye off of wealth for a moment. We're not going to talk about being wealthy.

We're just going to focus on the freedom part. how do we get financially free? When I left the music business and actually when the music business kicked me out and I was bagging those groceries for six months and finally made the decision to get into real estate. And I got this great book and someone gave to me and it taught me all about the concept of passive income

and escaping the rat race. You probably know the book I'm referring to. And when I put all of that together and with some real focus on creative, a monthly residual income that would compensate or pay for my monthly expenses, I got to that freedom part relatively quickly, like in three and a half years. And I wasn't rich. I wasn't wealthy, but I didn't have to get up and go to work.

I was financially free. That's the freedom part. That's what I'm talking about. And I'm just a really a big proponent of setting yourself free first. And then once you're financially free, then it's so much easier to focus on the wealth part. You've got the time. You would have some discretionary income and some cash to go ahead and use and apply towards that. And you've got a free head.

You've got a clear mind. All righty. So let's just focus on the financial freedom part today. I'm going to give you five steps to financial freedom through real estate. Number one, define your freedom number. And that freedom number, what's that? That's the number you need coming in on a monthly basis to cover your basic living expenses. And people generally have an idea of what that number is, but most don't really know.

They got an idea, but they don't know for sure. And so as we look at financial freedom, if this is something that you're going to pursue, all progress begins with the truth. And you've got to get right down to the real truth. So take an hour of your time just to really figure it out. Your freedom. It deserves an hour of your time. It's funny how most people will take at least an hour or more or weeks to plan their summer vacations,

but resist setting any time aside to plan their lives. So do that. Do that for yourself. Do yourself that favor. And then once you're clear on your number, what it takes on a monthly basis for you to exist and live the life that you're living right now to cover your basic needs. Then you're ready for step two. Ready?

And number two is to invest in your self. And here's what I mean by that. There are no bad investments, just uneducated investors. It's funny how money is so important to people, but how little they actually know about it or how quickly they are to relinquish all control and its management and its growth to someone else, like a financial planner. But it's like the most important thing to them. It's the thing they stress out about it, the thing they worry about for their future. but they just give it up to somebody else. If it's the most important thing to you,

doesn't it make sense to know something about it and take the wheel on that and make sure that your best interests are always at heart and no one's going to manage your money better and care for your money better than you? Ready? So broaden your horizons a bit and investigate the different options real estate presents

in generating income streams as there are plenty of them. There's a lot of them. I was scrolling through the podcast charts on the way home. I was on the plane and just kind of scrolling through the podcast charts. And it's been a while since I did it. And gosh, the little Apple podcast app sure looks way different now than the last time I saw it. And there are a lot of real estate podcasts now.

I wasn't aware there were so many. I mean, from commercial investing to multifamily to notes, to mobile home parks, to storage facilities, to single families. And it's just a bunch of real estate information there. So check out the very very. various resources available to you, and which many of those things are free today, right? I mean, when you're considering podcasts and you're considering YouTube,

that's all free information. And once you think you've found a good fit for that matches up, a good strategy and asset class that matches up to your time, your resources, your natural tendencies, and your comfort, invest in a course or two. Find a mentor, hire a coach if you have to. And the point being, just don't go in blind. Don't watch an episode of Flip That House on TV and think, boom, I've got this.

I've seen it. So many times where people do this and they lose their shirt and then they give up and they quit and they blame it all on real estate. Real estate is risky. Real estate is hard. I should have just kept my money in a damn 401k. Right? There are no bad real estate investments, just uneducated investors. So invest in yourself.

That's number two. Number three. Find the deal first. Step three. Find the deal. Once you've decided on the best real estate income stream for yourself, once you've done that investing in yourself and you've chosen your asset class, you've chosen your strategy.

And it doesn't matter which one you choose. The one thing that they all have in common is finding the deal. So place all your energy and finding the deal first. And at all costs resist labeling yourself as a multifamily investor. I want to get into multifamily. I hear that so often now. I want to get into multifamily. I want to get into multifamily.

And I let him go, but I got tired of asking them, well, why multifamily? Well, that's where all the opportunity is. So it's where everybody's going, right? It's really funny. Anyway, resist labeling yourself as a multifamily investor or resist labeling yourself as a wholesaler or a lease option investor or expert. And just kind of reframe your idea around your own real estate identity as a deal finder or maybe an acquisition expert if you want to get really fancy.

Because regardless of your chosen asset class or your chosen investing strategy, the one that you're going to pursue, you're an acquisition expert first. You don't get to acquire that asset class until you find that deal. You don't get to execute that investing strategy until you find that deal. And that's what an acquisition expert does. They find deals. deals below market value. You got to buy low so you can sell high.

And maybe you're going to flip for a higher amount or maybe you're going to hold. And over time, you're going to get paid much more than you paid for it. But that's where you buy low, you sell high. You've got to find your deal below market value. And when you've truly found a deal, just focus on one. You just need one. You don't need a bunch of them. Just find one first.

Once you have found that deal, step four is going to take care of itself. And if you've been listening to this show for a while, you probably know what that is. And that is step number four is, let the money find you. Once you have found the deal, the money will find you. And people really struggle with this one.

They feel they need to find the money first. At least the people that have never trusted me with this advice, they struggle. Those that have trusted me with this advice, they always come back to me telling me how the money actually did find them after they found the deal. It was like a magic trick.

and you know here's what I mean there is no shortage of money available for a good opportunity there's so much more there's so much more money out there than there are opportunities people are just dying for an opportunity they're looking for an opportunity they've got money and they want to put it to work and I mean you've got friends you've got family you've got associates you've got private investors and you've got traditional options like bank And with the internet, there's all kinds of different types of things like crowdfunding and, and what do you call it, the lending sites. I forget what they were called. There's a specific name for them.

But my point being is there's just money everywhere. And if you've got a deal, I mean, you don't have to look any further than just that short little list I just gave you. You see, it's when your deal isn't the deal you think it is when things slow down. when the market speaks up and looks at your deal and analyzes your deal and the market says, nope, this is not a deal, then the money gets tough. But when you actually have a deal, the money will find you. You know, most people don't even realize this. You know, and this is kind of where I think this line of thinking comes from.

You see, if you were going to go into a bank, let's just say you're going to buy your own primary residence. And you're going to go about it a very traditional way. you're going to walk into the bank, you're going to apply for the loan, you're going to put your 20% down, you're going to get your pre-approval letter so you can go out shopping for real estate with your realtor. That bank isn't going to actually give you the money until you've got your property under contract, until they've done their due diligence, until they confirm the value of that property because you've got to go through an appraisal, and they're not going to give you your money until you put in your down payment, which ends up representing their equity position, their security.

So even the most traditional source of funding for real estate isn't going to give you any money until you actually have the deal and the deal has been confirmed as a deal. You know, every resource I just gave you is going to go through their own version of that process before they actually give you the money. And if your deal passes, they all will most certainly give you the money.

And if one says no, just go to the next one, they've got your back. They'll do it. In fact, the better your deal, the better the money will be, the better the rate and the terms that money will be available to you. Here, try this out. It's a service my friend Russ put together.

It's called newprivatemoney.com. Newprivatemoney.com. It's really cool. service, it's kind of like lending tree for investors. If you don't know what lending tree is, that's where you could go to, I don't even know if it still exists, but I remember the commercials all over the place. You'd go to Lendingtree.com and you would submit what you were looking for as far as a home loan and you'd provide the address in the house and then they would come back with and give you all these different banks would basically compete for your

business. You didn't have to leave the house and now you'd have your option of which loan you wanted to choose. So that was that for like homebuyers, but this new private money.com, it does the same thing for investors like you. So you can go there, submit your deal, find the deal first, get under contract, don't waste their time, get the property under contract, go submit your deal, and then private lenders from all over the country within 30 minutes are going to start sending you their lending terms.

And you get to choose. You're going to be in total control. They'll actually compete with each other to give you their money. So once you've got the deal under contract, don't even go there now. Once you've got the property in the contract, then you can go there and just give it a shot. You don't have to use it, but go try it out. My point being is if you find the deal first, that money, it's going to be waiting for you. And if it's truly a deal, there's going to be people fighting for each other to give it to you.

All right. So that's new private money.com. New resource. Step five. Repeat. That's it. Go back to step two. Invest in yourself.

Don't stop investing in yourself. Never stop learning. Invest in your mind. Invest in your network. Become a student of investing in real estate. If escaping the rat race and your financial freedom is important to you, the more you know about it, the better and faster this whole experience is going to be for you. So become a student. Invest in yourself.

Number three, find more deals. Number four, fund more deals. And then number five, repeat. Go back to step two again and just keep on doing it until your passive income exceed your monthly. the expenses till that passive income exceed that freedom number and boom i'm telling you it ain't gonna be a 40 50 year plan like dave ramsie and susie orman want you to follow no we're talking i don't know really really conservatively 10 years so that's one fourth the time right if you want to get up into it and you want to go fast and be really disciplined i mean four years is not out of

the question that was about my time frame and if you're just an absolute animal like Corey and Parker, you can do it in less than a year. Right? But just consider it. That's five steps to financial freedom through real estate. Matt, could it really be that simple? Yes, it is. That's it for today.

God bless to your success. I'm Matt Terrio. Living the Dream. Take care. Yeah, yeah, we got the cash flow. Yeah, yeah, we got the cash flow. Yeah, yeah, we got the cash flow. You didn't know home world, we got to dash low.

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