Epic Real Estate Investing - A Six Year Plan to Retire with Ryan Ball| Episode 103

Episode Date: May 6, 2014

In celebration of the 100th episode, the 1,000,000th download and the opening of Version 2.0 of the Epic Pro Academy... Ryan Ball will replace one of his household income's in less than 3 years, and likely replace the second in 2-3 more... what 95% of people are unable to do in 40 years! Listen and learn how simple it can be. It's another "can't miss" episode of Epic Real Estate Investing. ------------------------- Download Matt's free real estate investing course "How to Do Deals | No Money Required" at FreeRealEstateInvestingCourse.com or text FreeCourse to 55678 "Click" what interests you most:  Education Properties Income   Coaching Learn more about your ad choices. Visit megaphone.fm/adchoices

Broadcasting from Terrio Studios in Glendale, California, it's time for Epic Real Estate Investing with Matt Terrio. Uh, yeah. What's up? Hello, and welcome to another episode of Epic Real Estate Investing. If this is your first time listening to the show, boy, did you pick a good day to show up? Welcome to you, really glad that you're here. And if this is not your first time, uh, welcome back. I'm super happy that you're here.

This is the place where I teach people how to escape the rat race by investing in real estate. And if I had to do this thing all over again, I do it exactly the same way. I do it exactly the same way whether I had money and credit to work with or not. You see, while I was getting started, I had neither of those. I had no money and I had a terrible credit score. Yet, I stumbled upon 12 different strategies of investing in real estate that were you didn't need money. You didn't need credit.

I still to this day of having used a bank. And in hindsight, you know, being forced to invest, being forced to invest, being forced to get started under those circumstances, I believe that made me a much better investor today. What it did is it forced me to use my brain before my wallet. All I had was my brain. All I had was that intellectual currency. I didn't have any actual currency. So it taught me to do that, to use my brain before my wallet. And that made me a much better investor. It's made me by far a much better investor today, no doubt in my mind. And I want to make you a better investor as well. So I put the first two strategies of those 12.

I put them inside of a free course just for you. They are the two easiest and fastest strategies to a paycheck. And you can access that course for free. No strings attached. They are whole and complete. It's all there at free real estate investing course.com. Free real estate investing course.com. And if you don't have access to a computer or you just can't wait to get back to your computer,

you can access the course right there on your phone. Just go ahead and text free course to 55678. Free course to 55678. And that's free course. There are no spaces or anything like that in there. It's all one word. All righty. So here we are.

We're here on day four. Can you believe it? This week is just zooming by, ain't it? This is day four of our epic celebration. And what are we celebrating? For those of you that just joined us, that just found us today, here's what we're celebrating. We are celebrating our 100th episode this week. We are celebrating our one millionth download.

Where have you been? We've got a million downloads, 100 episodes. How do you just find us right now? Well, anyway, I'm glad that you're here, but that's what we're celebrating. And we're also celebrating the grand opening of the Epic Pro Academy version 2.0, its first revision, of which actually opened up today, early this morning. And I had more than 500 people just on the waiting list. And thank you for hanging in there with me. I had anticipated having this released months ago.

So thank you for your patience. The wait is finally over, and no doubt it is. will be worth it for you. I'm really actually, there's one specific aspect of the Academy. I'm really excited for them. I'm excited about the future of the Academy and its members

because there is now a platform for the community to interact with each other. You all requested that when I shut for 1.0 down. You said that's something that you'd like to see in the new version and it came up multiple times

and so I put it in place. You know, I've said it once and I'll say it again, this is a people business. You know, certainly inside of the Academy, I'm going to give you all the best practices. I've revised a bunch of stuff, all the best strategies. I've got some new ones in there.

All the best tactics. I got that in there. The best resources, a bunch of new resources. All the best tools. Got that in there. I got some new systems just to make it easier for you. I mean, it's all in there. Everything that you need is in there.

Just never forget. It's a people business. It really is a people business. And really, regardless of what venture you pursue, whether it's real estate investing or any business. the speed and ease of that venture will be significantly impacted by, if not in direct proportion or a direct correlation with the people you know and the people that know you. I mean, sure that you've got to like each other, you got to trust each other and you

got to have confidence in each other's competence and all that stuff. Yes. But just to keep it really simple, that's going to be that the speed and the ease of your progress, of your success is going to be in direct correlation with the people that know you and the people that you know. I mean, I know for sure, without a doubt, there's no way that I could run my cash flow savvy business or even got it off the ground without the people that I met along the way while I was building my own portfolio.

I mean, it's a people business. Every real estate transaction you complete, every property you buy or sell will be to or from another person. And I think that's something that was definitely missing from version 1.0. So thank you for your recommendations. Thank you for your suggestions. I thought about this before when I've done. first launched 1.0.

I just didn't know how to implement it, how to implement it and have it really be impactful. But no longer, okay? It's in 2.0. The academy members will have a network now of hundreds of fellow members across the country of which they'll be able to interact with. They'll be able to buy from each other,

be able to sell from each other, be able to partner with each other, they'll be able to share ideas with each other, just overall generally network with each other and so on. And I'm really excited about that aspect of version 2.0 and it is indeed a cause for a celebration. As it's your freedom at stake, real estate investing is the final frontier

that gives the average person access to their freedom. So it's your freedom here that's at stake. And it's the pursuit of your freedom. That pursuit, it just got a whole lot easier via version 2.0 of the Academy. So to become a member, go to Epicproacademy.com, click on the join tab, and boom, become a member. Can't get any more simple than that.

So all this week, in celebration, I mean, the way that we're celebrating all this week, every single day we're releasing an episode with an interview of an epic community member. So you can get real-world experience, you can just get real-world stories, real-world perspective of what's going on out there inside of the world of real estate investing

with no hidden agendas. Nobody's got anything to sell, nobody's got anything to promote. They're just sharing it with you. And these are probably the most downloaded episodes. Every time I do an episode like this, these are always the most downloaded episodes. So I just want to deliver a whole week of these for you.

So, you know, I just want to, it's a week for celebration, yes? Okay, so, you know, this Monday, we had Kenny Castillo. Tuesday, we had Nicole Bryan. Wednesday, we had, we talked to Mike Slane. And if you missed any of those, you got to go check them out. You know, depending on which day you updated your, your iPod or your phone or your listening device of choice, you know, a lot of the apps out there if you didn't, if you updated last Friday, say for Financial Freedom Friday, and didn't update

until Wednesday, you only got Wednesday's episode. You missed Mondays and Tuesday. So make sure you got them all, okay? I mean, there's just so much to learn from those interviews and I've got another one today right now, in fact. So please help me welcome Epic Pro Academy member Ryan Ball. Ryan, welcome to the show. Hi, Matt. Thanks for having me. You bet. Glad that you you're here. I guess let's just kind of get started. Are you a full-time investor or do you have a day job? How is that going for you right now? I actually have a day job and to kind of top it off. I have three young kids too. So that's limited a little bit what we can do. But like a lot of people, you find time to, you know, where you can to, you know, to make things happen. Sure. If it's important

to you, you make time, right? That's right. Super. do during the day? My full-time job is investment consulting, so I advise institutional investors on kind of how to invest their money. Interesting. Interesting. What is it that attracted you to real estate with so many options available to you? Well, my parents were involved.

They bought some multi-families growing up, so I had kind of seen how that worked. And back, you know, to get back 2006, 2007, had been trying to work with my. brother to do some fix and flips and you know that never really happened but it was always something we had you know we'd looked at from off and on and back in 07 actually had a friend of ours approach us in Cincinnati we live in Chicago and Cincinnati's actually where all all the properties we own who had essentially gotten two two multifamily under contract near where he lived and didn't have the money to close and approached us and said, hey, would you be interested in on this?

And we looked at it and thought it made sense and ended up going in our partnership on these first two buildings back in 2007. And it's worked out great. In between, we had, you know, life kind of happens and you get diverted from things. You know, we were planning on, I'm moving forward and doing more with that. My job changed. We had a baby. we actually did another side business unrelated to real estate and kind of came full circle back,

you know, 2012, looking at what had happened to the real estate market and where prices were. And so, you know, maybe it makes sense that, you know, we should really go back and look at this again and try to get more serious about it and, you know, stop spending time just looking and saying, oh, yeah, it'd be great if we do this deal and actually really, you know, do something. Got it. So you live in Chicago and you're investing in Cincinnati. Are all your investments there? They are.

Okay. What was it about Cincinnati that was appealing to you? Well, it's actually my wife's from there. Okay. And, you know, we had done, as I said, that these first two properties with a partner had worked out great. You know, he was managing them. You know, he'd run kind of big expenses by us and just make sure we were okay with it. But, you know, we looked at the numbers and it's like, wow, this really, this makes a lot.

sense versus, you know, we had looked at some multi-families in Chicago and just, you know, the price you had to pay for the rent you would get just, it didn't make sense to it. Right, right. But so you're looking at a much lower price point in Cincinnati and you look at the cash on cash returns and it was, it was good. And, you know, we had kind of decided we didn't really want to be landlords. Mm-hmm. So that solved that problem.

There was no way we could be involved in, you know, people calling us or anything when it's five hours away. Got it. So you have property management down there, obviously? We do. Okay. And how has that relationship been for you? It's been good.

It's been really good. We've had, I guess, I, we had one run-in with a bad property manager on our first two properties that's really hammered home how important good property management is. But the three properties we've purchased in the last year, it's actually our realtor also manages property and he also owns, you know, a lot of buildings himself, which I think, you know, kind of looking in hindsight, I don't think I would ever hire a property manager or a realtor who doesn't invest themselves.

I mean, just the amount of knowledge he brings to the table has just been unbelievable for us. Right, right. Especially being newer to, you know, to doing this. Very cool. Very cool. Yeah, that's how you find the good property. managers as you work with the bad ones first. Yeah.

Yeah. Well, fortunately, or I guess unfortunately, these bad property managers were on the buildings that we owned with our partner. So he's there to kind of see if things are going. Okay, but if that had been on our properties, we would have, it would have taken us a long time to figure it out. We probably would have lost a lot of money. Right.

Right. Well, everything happens for a reason. So let's talk about the three properties that you got last year. How are you finding your deal? deals. Well, the first two we bought actually were through our realtor. They were properties he was managing that the owner wanted to get out of. He was just kind of tired of owning them and had listed them and they didn't go anywhere. The listings had expired and when we first started talking to him, we said, you know, here's what we'd like to do. You know, we'll take your guidance on kind of where

you think we could find these. And, you know, he had three or four properties that were like this that weren't listed, but the owners were interested in just being done owning property. He was already managing them. So for us, we looked at the numbers. We looked at the places. We saw a number of different properties. And, you know, for us, again, this was really our first two on our own. The same owner had the two buildings.

And our realtor was already managing him. So he knew everything about the buildings. He was willing to just, you know, keep managing. So, you know, in some ways it was almost just a turnkey purchase for us. So it really, you know, between the buildings being good cash flow and him being willing to manage them, it was just, you know, it's almost a no-brainer. But we've done some other, we've also done some yellow letters. Okay. Haven't actually ended up buying anything yet from those, but, you know, it's definitely produced some, you know, some things that we've pursued.

We've definitely made offers on some of those. but haven't actually closed anything yet through that avenue. Got it, got it. What do you think is the biggest reason that you haven't? On the yellow letters? I think unrealistic expectations on the people we're talking to. I think I've heard this on some of your podcast that you probably get better at talking to these people,

the more experience you have. So I think maybe there were some early ones that, maybe if I had approached things differently, could have gone somewhere. You know, probably the quantity that we're sending out to. We're only sending them out to multifamily. We're not sending them to any single family. That hasn't really been an area we focused on.

You know, so it seems like it's been harder to find motivated multifamily sellers because a lot of times, you know, there's not that need to sell. Although we just sent out another batch here in the last week and we're looking at a place. Thursday that seems promising we'll see. Cool. Very good. So you're still very active.

I love it. Trying to be. Yeah. The consistency isn't always there, but... I don't know how you do it with three young kids. I have one, and it makes business tough enough. It does. What are the ages of your kids?

The oldest is four, going to be four in a couple months. The youngest is six months, so they're pretty... Oh, wow. You're really busy. Yeah. Yeah. So it sounds like you have a good realtor. How did you find your realtor? You know, he was a recommendation from my brother-in-law. And again, that's another one where we've had plenty of, you know, maybe bad realtors, not the right word, but realtors that don't, they're not focused on investing in it.

And this guy is. Right. You know, he gets it. You know, our experience was with some of these other realtors like, oh, yeah, that sounds great. You know, let me put you down. We'll send you the MLS listings, which, you know, that's not the most helpful thing in the world. You know, in this day and age, you don't need a realtor to get access to the MLS necessarily. You need somebody who can kind of tell you, yeah, here's where you need to be looking.

Here's what you need to be looking for. Sure. And we hadn't found that until the guy we use now. And he's, you know, it's made a huge difference. Right. And I think the fact that he's an investor himself, I mean, I think that's really been the difference. Yeah. You'll notice that with all of your team members, those that invest, they just, you just get a little different level of, not service, but you get a different result for sure.

You know, they can relate, absolutely. So that's your two deals. How did you get the third deal? The third deal was actually just, it was off the MLS. It was his property that had been listed forever. They dropped the price multiple times. It was in an area that as a whole, you know, maybe you wouldn't think it was a great area,

but the kind of periphery of it, it was surrounded by kind of decent areas. And this was on the edge of that. And, you know, we went and looked at it And you looked at the numbers, and you said, wow, this makes sense as it is. And they were, it wasn't being, I wouldn't say, managed well. The rents were all lower than, than really what, if you looked at what was prevalent in that area. Right.

So there was some potential to increase it, but, you know, we try not to be heroic in our assumptions when we're evaluating something. But, you know, there was the potential that it made sense as it was, but there was definitely room to raise the rents. The first vacancy we had, we raised it. I want to say 80 bucks. Mm-hmm. Mm-hmm. Super. So there's some room to grow there, but it was working well as it was.

It was. Yeah, exactly. Super. Okay, so you got three deals. How many units? How many doors in total? The ones we own ourselves are all four families, and then the two buildings that we own with our partner are three families.

Got it. Very cool. So all these deals were traditional financing? conventional finance? Yeah, well, the first two deals, it was kind of a conval with our partnership was kind of a, we bought them for cash and then did a cash out refi. Got it. But the ones that we've done, the three we've done ourselves, have all been just traditional financing.

Any challenges with the current lending environment for you? Anything that seemed to? You know, it got real tough when we hit our fifth, the last property we bought was our fifth mortgage. So all of a sudden, if you're four or less, pretty much it seems like any, assuming your financial situation credit scrawl is fine. The number of people that will lend for that is pretty high. But once we hit fifth mortgage, the pool of people that will lend dropped substantially. None of the lenders we had dealt with previously would lend. I mean, that was, you know, a lot of the big national banks.

Most of them seems, well, none of them I talked to would do it. There was a couple of local banks that people had referred me to, and one seems to do a lot of business in Cincinnati, and they wouldn't lend to anybody outside their little tri-state geography, so they wouldn't lend to us. They would have lent to us if we were in Cincinnati, but not outside. And I finally ended up talking to a broker who dealt with, I want to say, 13 different different lenders and he found one out of that 13 that would lend to somebody with more than four mortgages. So that number that we hear out there, and this is something that's a little bit unfamiliar to me, because I hear some people say you max out at four and I hear other people say you max out at 10,

but it sounds like there is some discretion on the lender's part. Yeah, it's 10. I guess Fannie Mae will, you know, that's the whole thing if they can sell it to Fannie Mae or get it guaranteed by Fannie Mae. They'll guarantee up to 10. But it's, I had read that on the internet, so, okay, great, well, we're fine. But finding somebody that will actually lend is a whole different story. Right. But you got to look, and they're out there.

You do, yeah, and I think that's, you know, probably one big thing we've learned is that, you know, if you look hard enough, there's usually a solution. Mm-hmm. But it's not, you know, it's not easy. Right. It just, you know, it takes time. Yep. Yep, definitely. Well, super. So your exit strategy here is obviously to hold these. Yeah, we're buying hold and, you know, we're focused on cash flow.

Mm-hmm. You know, trying, would like to eventually down the road have that income be a substitute for a full-time job and, you know, have time to do other things. Right. So, you know, that's the long-term plan. Again, it takes time to get there. Sure. But you've got a great start. Let me ask you, currently you're sending out yellow letters looking for the next deal. Anything else that you're doing to source new deals? You know, that's really been it so far.

You know, our realtor provides us some, you know, occasional one-offs, you know, when he has things. You know, and that's, you know, probably the thing that I'd like to focus on most in 2014 is doing a better job of networking. You know, I think you talk about that a lot on your podcast about how that's really, how you drive deals. And I think, you know, I think that's true. Just the limited amount we've done, you know, we have had opportunities come to us. You know, it's just how do you, how do we do a better job of that? Right, right. How has your time in the academy been?

What have you been able to pull from there? You know, it was really good. And I think the thing that drove me of that was, first of all, I listened to a couple of your podcasts. And I listened to a lot of different real estate podcasts. And yours resonated with me more, I think, just because it seems more, I don't know, down to earth. I don't know if that's the right word or real world.

I get that a lot. Unless, you know, it doesn't seem like you're trying to sell me 10 different things during your podcast. So I like that. And then, you know, I kind of talk to my wife. I'm like, you know, we really need to get serious about this. I feel like I know some, but I need, I just need something to kind of jumpstart me, kick me in the butt to get me going. And that's sort of what prompted me to join the academy is, you know, I didn't know what wholesaling was. You know, I don't, it's not something we're pursuing.

But, you know, I'm like, yeah, I feel like I should at least know what the options are out there. And then I can kind of decide maybe what works for us. So, you know, I think that was a great, great way to do that. And it wasn't, you know, it wasn't a $5,000. course. Right. You know, it was, you know, I feel like I'm plugging your, your academy. But no, it was good for us to really, you know, it was good for me to push me into taking

action and, you know, stop sitting around, just, you know, looking at things in my spreadsheet, saying, oh, yeah, that would be great. You know, and it was a good, broad, I think, look at how all the different, you know, how all the different pieces fit together and all the kind of different ways you can, you can attack investing in real estate. Super. So you've got 12 doors, you've got three buildings, and then you've got a partnership and another.

And your goal is to get your cash flow to at least replace one of your household incomes. Have you figured out how many properties that, how many more properties that is for you? Yeah. Well, if we could do, I kind of look at our partnership property separately, you know, just on our own, you know, say the three we own now. If we could kind of triple that, I think we'd be in a good spot. Got it. If we could get six more deals or however many more deals equal that,

that same kind of cash on cash return, we'd be in good shape. Got it. Got it. So I'm sorry, I was just going to say if you're going to triple that, so that's really just three years and you replaced one of your household incomes. Yeah. Phenomenal. Phenomenal.

People work 40 years of their lives and never achieve that with their... I know. It's one of those things, you know, before we started, you know, we're talking about, you know, well, it'd be nice just to get a little extra. And then, you know, we're three investments in one year into it saying, wow. Yeah, actually, my wife is much more kind of conservative than I am. And, you know, she's looking at the, you know, the rental statements we get every month and the deposits going in our bank cash saying, wow, you know, we really need to do more of this.

which was kind of funny because she was well you know that's not get too carried away it's like it too carried away but yeah once you get into it you say well you know it's it's manageable you know it's not like a pipe dream that oh you know 20 years from now maybe this will work out it's you know if you if you do a right yeah you know like you said you would just look if we could just do three deals a year in three years you know there you are there you are that's a pretty manageable goal It's a very common story amongst my successful students, by the way, where one of the spouses is not so for it.

And then once they get the results, they're like, then the spouse really gets on board and actually does the pushing. Yeah. It's funny. She said, oh, look, we didn't really have to do that much. I'm like, well, you know, hang on. That's not exactly true. We did a lot of work up front. But now it's, you know, it's pretty hands-off, which is, you know, exactly what we want it.

That's super. That's awesome. Well, congratulations to you, Ryan. If anyone listening wanted to contact you for the sake of creating a professional connection, is there a certain way you'd recommend them to do that? Sure. Yeah, we've got an email with our real estate LLC. It's real estate at ptventuresllc.com.

PtVentures LLC. Primetime Ventures. I love it. So PT Ventures, yeah. I guess anything else that you want to share or ask? Something I should have asked. No, I know you've done, I know you do some investing in Cincinnati. You know, what's your experience been there?

Yeah, we've got our team set up there, and we were doing really well. We never actually pulled the trigger there. Our person that was sourcing all of our deals for us got pregnant and left the business. So we're... Selfish of her? Pardon me? I said that was self-fell. I know. I don't know what she was thinking. But, you know, I did visit, and I really, really liked what I saw. I did go through some rougher neighborhoods. I was going to buy a very large, I think it was, I can't remember the number now. I think it was upwards of 30 properties from one person. And I went out there to tour the area, and I toured those properties, and I made it through about 13 or 14. And I said, no, thank you. He was such a slum lord, and it was really, it was really disgusting, actually.

I was really turned off. Then I was like, I don't know if we want to be here in Cincinnati, but then the following day, she had taken me around to some other places where the numbers did work well for the single families. And I was really impressed with the neighborhood. So it's just like any city that's got their nice areas. They got their mediocre areas and you got your ritzie areas. And, you know, local knowledge goes a long way, but we just don't have that person with a local knowledge there yet, sourcing us deals. Right.

But I loved it. I loved the little place down there by the ballpark and everything. That was all nice down there. Yeah. Yeah. Well, thank you so much for your time. Thanks for being so giving with your experience. And, you know, something else pops and you want to share.

Let's do it again. Great. Thanks a lot for having me. You bet, Ryan. Thanks again. All righty. So that's it for today. I'm Matt Terrio, living the dream. You've been listening to Epic Real Estate Investing, the world's foremost authority on separating the facts from the BS in real estate investing education.

If you enjoy this show, please take a moment. minute to visit iTunes and share your thoughts. Thanks for listening. We'll see you next time here at Epic Real Estate Investing with Matt Terry O. This podcast is a part of the C-Suite Radio Network. For more top business podcasts, visit c-sweetradio.com.