Epic Real Estate Investing - Buying Properties at Online Auctions - Paul Lizell | 1105

Episode Date: December 10, 2020

In today’s episode, Matt is joined with Paul Lizell, a real estate ace, specialized in buying properties at online auctions, a crypto investor, and a host of Flipping Out Podcast. Tune in and find out how Paul stepped into a world of real estate investing, how he finds deals online, how his crypto business looks like, and much 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 R-E-I-Ase.com. Here's Matt. Hey there, Epic Investor. It's Matt. Terryo from Epic Real Estate, where we show people how to invest in real estate with an emphasis on retiring early. This is the Epic Real Estate Investing Show.

And if this is your first time here, really glad that you found us. If you like what you're here, make sure you hit the subscribe button before you go. If this is not your first time here, welcome back. And just thank you for sharing this with your friends and family. I really appreciate that about you.

I'm on the road right now. And so I couldn't put, a formal full-fledged episode together for you. We're going to skip the news this week. But I did have a great conversation this last week with a good new friend of mine that excels in online auctions. And he's been doing it for several years. He's been investing in real estate for a really long time.

He's a wealth of knowledge. And so I can't wait for you to meet him. So enjoy the show and I'll see you next week. All right. So please help me welcome to the show, Mr. Paul Lizell. Paul, welcome to the epic real estate investing show. Thanks for having me, Matt. I appreciate it. Yeah, no, glad to have you.

Glad to have you. Glad we were able to carve out this time. You know, we just met a few months ago. And you were like one of the only people in the room that was a real estate investor and also had this knowledge or this attraction or involvement in crypto. And that's something that I've been very interested in. And so I think we just kind of resonated that way. So I want to talk about a little bit of both and how maybe you're working them together and what your business looks like and just get to know each other a little bit better. So share with me. What were you doing just before you got started involved in real estate investing?

So before I got started in real estate investing, I was actually a commercial business loan underwriter. And I did that for about a year. And then for two years, actually make that three years after that, I was the business development officer. So it was good being the underwriter was great because you get to see the businesses from the inside out, which ones do extremely well, you know, which are the most profitable ones. Self storage facilities, by the way, that's what I found out to be the best thing. Most profitable guys were self-storage facility owners. So I went from that into the real estate world by part-time doing a fix and flip. I did a fix-and-flip in 2001.

It was partner with a guy. We paid 295, put about $4,000 into the property. We put a little work ourselves in. It sold it for 69 a few months later and then started doing more and more and more. I'm probably doing one or two a quarter as I'm working full-time. And my objective was, all right, let me get 18 months' worth of, living expenses put aside and I'll do this full time, which happened in 2004, which was still booming in 2004.

Right, right. Did a lot of fix and flips, occasional wholesale deal in 2004. Then 2008, the financial crisis hit. I probably lost them like six or eight fix and flips I was doing at that point, anywhere from like 15,000 to 65,000 on each deal. And then I said, you know, I've got to pivot. I'm going to switch something. All my friends, all the other guys I knew locally here were just going away.

they weren't investing real estate more. They got out of it. And I said, I'm going to pivot. My easiest deals were wholesaling. The hardest ones were the fix and flips. Let me go 90% wholesaling and 10% fix and flip, do some owner finance and things like that. And that's what we did.

We pivoted in 2009, 2009, 10, 11, 12, we had monster years doing wholesaling. And this was all bank-owned properties too. This was all from whether it was HUD Home Store, Hudson Marshall Zone. Actually, it wasn't even zone at that. that time, I think it was home search. They came out about 2013.

HubZoo was just, I think they were kind of newer then, and auction.com, of course. So we started buying those and we had some huge wholesale fees, 55,000, 50,000, 45,000 from 2009 to 2013, some of these big fees. And then they started shrinking as time was going on to market started to heat up a bit. And then I started pivoting doing some different things, doing more owner finance, along with the wholesale. We still do probably about one in every 10,

deals, it's an owner finance deal. We do love those owner finance deals. Those are my favorite. Yeah, they're the most profitable, I think. I'm almost at the point these days where if you're not going to owner of finance, I don't want the deal. Yeah. I understand that. I throw a lot of leads away shamefully. I'm just at a point where I don't want to go on over and I have that conversation right now. I want the seller finance deal because I just see what those have done for me long term. And, you know, And I'm grateful that I'm in that position. I don't need to flip the property to get the cash to keep the payroll or keep the marketing budget going and everything.

It's all about wealth creation for me and there's nothing better than being able to negotiate some creative terms with a seller. That is for sure. Usually your least amount of money into the property and end up being some of your biggest payers out, you know, profitability-wise. Absolutely. Do you know Eddie Speed? You know, we were just talking about it.

Oh, yeah, I know Eddie well. Okay. Yeah, I mean, he turned me on. He says, Matt, I really like what you're doing. and you're doing a great job at it, but you're missing something. You're leaving a lot of money on the table. And he went and told me, he told me about the deal after the deal. And so that is just like transformed my entire world.

So the seller finance with the deal after the deal, I mean, there's enough profit in there. That's like five deals of profit in one of those deals if you set it up correctly. Totally. And I think you and I both know Mitch Steven, who was in collector's here for a while too. And he's doing them like, wow, fire down in San Antonio. Yeah, no, Mitch, well, we're in CG. We're in collective genius together. All three of us.

Were we all that at the same time? I think so for a short time. Totally. No, Mitch is another really smart guy when it comes to the creativity. Perfect. So what is, maybe you just said it and we got sidetracked, but what does business look like for you today? So business is still pretty similar as far as we do mostly wholesaling, but that numbers

moved down about 65% wholesaling. then the rest is filled up with fix and flip, rentals, and owner finance. And, you know, I mix the rentals. Rentals are necessary evil, I think, unfortunately, in our business and the fact that we have to have them to reduce tax liability as much as anything. And great longer term wealth. Wholesailing is that what you said? Not wholesale.

Yeah, to offset the wholesaling, right? So rentals, we need them. They're necessary evil for, you know, depreciation, the interest, expensive, right off the taxes, all the different things. So you call rental is evil. Yes. Explain to me. What's evil about them to you?

Because I love one. I do. Well, they're great. They're more management, I'd say, right? We have more maintenance and everything. And we do most of the maintenance ourselves. Like myself and my wife and my VA, dude, we're pretty much the three that are responsible for managing them all.

And we do manage them all. They're not too bad. Occasional things here or there. And the one thing I do love about them is they spit out money every single month, which is great. And you got cash flow from them. But the best thing is the depreciation, the write-offs you get, which reduce your tax liability. That's my favorite part of rental selling.

You don't get that with owner financing. That's the one negative with owner financing. Right. Well, you get the payments, but you don't get the write-offs as much. Why not? Unless it depends how you set it up. So if you set it up where you're still the owner and you're selling it on terms, like if I sell them and I'm selling, I'm transferring the mortgage. Oh, you sell via seller finance.

Correct. Yeah. I sell it. Okay, got it. Yes, of course. You occasionally buy some with owner financing, but it's more selling them with owner. Ah, okay. No, I see, I'm a big acquisition guy on seller financing. That's how I do it. But I do have a really nice balance, but to your point on the tax issue of rentals and seller finance notes that I'm carrying because you're right. You need to offset that because that's what it's ordinary income. Yes. From the notes, right? Right. Plus, the other part about that, and it is nice because the cash flow is big and there's a lot less headaches, a lot less phone calls, but your wealth is getting smaller and smaller as they pay off every month, right?

So you need something else that's going to build your wealth. So it's a good balance. All right. I'm on the same page. You need a more on your portfolio. Now I agree. I was like, well, I'm going to get tax writeoffs on all of my seller financing. I don't know what you're talking about.

You want my CPA's number? I'll take it. Right. But you're talking about Xist strategy. Perfect. Totally. Different one. On the same page.

Super. So your acquisitions, how are you finding most of your deals? I think this is kind of the part that's really unique about what you do. Yeah, and we're different than pretty much anybody else out there are pretty much, I would say, about 85 to 90 percent of our acquisitions are through online auctions, whether it be auction. com, Zom, HubZoo, Hudson and Marshall, Realty Bid, or HUD Home Store. And the rest of them are off the MLS. We do a lot of MLS deals in certain markets, whether it's Tucson, Arizona, here in Pennsylvania, even a little bit, New Jersey, Kiji down in Florida and in San Antonio, Texas, where we have boots underground there. And then the rest, we get, we get some from wholesalers and referrals.

I do get people that just refer, like, I'm fixed and flipping a house right next door to me here. That was just a referral. Nice. Referrals are the best. They are the best. Yeah, the warm leads going, so much simpler and easier. Yeah, yeah. I've got a guy that I'm going to have on the podcast here and probably right after the

after the new year. And this whole business is just teaching businesses how to generate referrals. I was like, you know, almost all of our, the business that Mercedes and I do is all based on our relationships. Yeah. Almost all of it. I've been doing a lot of marketing since we've moved back or we've moved here to Las Vegas. So I've picked that up again.

But still, when we need a deal, we can just pick up a phone call or pick up the phone and and make a call and find one pretty quickly. And that's super important. It so is. You know, and my whole thing is if you know, if you want to go fast, you've got to learn to market.

If you want to go far, you've got to build the relationships. Oh, yes. Yep. Agreed 100%. When they know you're a consistent buyer and they know you're going to close and stuff, you're going to get preferential treatment one,

and you might even get a little bit better deals here and there. Yes, always scratch. And the barter thing is just fantastic as well. What that one is going to right. Totally. So tell me about the online acquisition, the online auctions. I imagine they all have their own little nuance, but generally, how does the process work?

They do. And like, so our process is pretty simple. It used to be me looking at every different auction. It was coming up, whether it was, say, a Northeast auction, a Southwest, Southeast, South auction. And I would break down everything and look at everything and decide what the bid on. Now what I end up doing is I created a few videos, sent them to my VA. So my VA knows how to come up with the ARV. on these properties.

Contacts, she'll sometimes email the agent if it looks like it's an intriguing one. If not, I email the agent and contact them if it fits our buying criteria. In other words, so they are V minus that, you know, 70%, say 75% minus to repairs and our wholesale fee. If the starting bid is below that, we're good to go. If the starting bit is above that, it's a no-go. So if there's 150 properties in this particular auction, maybe 20 or 25 might meet that criteria. So now I'm not looking at 150. I'm looking at, you know, 20 to 25.

It's just made it simpler and easier for me. Got it. All right. So you got your formula, a pretty standard formula. Right. You give that to the VA. She basically scrubs the whole list of what's there. Right.

Identifies what there is that you actually want to make a bid on. Right? Yep. So you determine that. So now do you make the bid or does the VA make the bid? Right now I'm doing a bidding, but I'm going to transfer it into 2021. I'm going to get kind of a little bit away from that. so I could focus on other things, other parts of the business.

So I'm probably going to have the VA start bidding now that she's getting comfortable with it and understanding a little bit more, it be a little bit simpler to have her go in and do it. Perfect. So if there's, I don't know if you have general numbers on this, but say if there's 100 houses going up for auction, how many of those that will actually pass the formula test? Generally, right now, probably about 15 out of 100. All right. So you'll bet on 15 of those about how many do you win out of those 15?

Sometimes I'll win one, sometimes none, sometimes I went four or five. It really depends on a day where they're located. Like we do a little bit of what Larry Goen says, if you're familiar with him, finding some of these smaller towns, he's tertiary markets where it's less competition. Terti. You're the only other guy I know that uses that word. That's good. I was feeling a little bit snooty by using that word and throwing that out there in front of people, but good.

I think it's a great word. It is. It's great. It's like no one knows what comes after secondary, right? That's right. You know what the fourth is? What is the fourth market? I wouldn't even know what the heck that is.

Forciary. Forciary. I like that. All right. Cool. So we buy a lot of these markets like that in Texas too, right? These outside markets outside of Waco, these smaller little towns where we have much less competition and we get some outstanding deals. That's great.

That's great. Okay. So the bidding process, is it just like you just like, is it just clicking a mouse that? online and you're sitting there watching other people bid against you? How does that work? It is. Yeah. So you can preset on a lot of these what you want to bid up to. I don't generally ever do that. I want to bid it and then I want to see what's going against me because usually what happens more often than not is the bank bids against you, the seller's bidding against you, right? They're putting the auction company is putting a bid in on behalf of the seller trying to push it up.

And I can tell this is where I'm a little leery to give it totally the VA yet to do the bidding because I know when I put my bid in, if there's a certain time period it goes by, I know it's them and it's not somebody else I'm bidding against. You get a feel for it when you bid enough of these, everything. So I know when I'm bidding against a person compared to when I'm bidding against them. Got it. So that's something that she'll have to learn some of the nuances there. And I'll try to explain to her, but it's it takes a little while to learn that. Got it.

And you don't want to bid against you. You're basically bidding against yourself when you're doing that. Right. And they're just pushing your number up. Yeah. I mean, I've kind of learned that through a bunch of eBay stuff that I had done. Yes. Where you said that maximum bid, and you're like, oh, I'm already at the maximum bid. That was just like two seconds ago when I said it, you know?

Right. Exactly why you don't want to do that. Yeah, perfect. Okay, so same concept there. So let's say you win one. All right. So, all right, you won this bid for $100,000. What happens next? You have to send them $100,000? For me, that's next level due diligence. and they have you fill out the high bidder form. You do that, send that in, and they either accept it or they decline it or they counter you within a period of time.

But as soon as I win that high bidder, I'm doing the next level of due diligence where I'm either, if I haven't contacted agent, I'm contacting a listing agent at this point. If there is no listing agent on there, I'm sending somebody out there to go take a look at the property and trying to get access to it so they can give me some pictures, use a company like BPO Photo Flow to get some pictures and some details on a property. Then that's that next level due to do. Make sure there's no cracks in foundation. Make sure there's not three feet of water in the basement, which we've had a couple of times.

And, you know, different things like that. So if everything looks good and they come back and they say, we're accepting your deal, then we move forward with it. If they come back, say, yeah, we're accepting your deal. I'm like, hey, wait, I found a bunch of stuff. I can't go to this number anymore. So I can't move forward. And you go, well, there is a number where is there a number where you can move

forward and I'll give them my next number where I need to be to make it make sense with those repairs. So usually the way it goes. It's kind of similar to like the direct mail when you find that stuff. You find out what that needs this, that and then you're dropping the price, right? Yep. Yep. Same deal. It sounds very similar.

Okay. So just because you won, there's a couple things I just recognize where I heard and I just want to clarify. So even though you won highest bidder doesn't necessarily mean that's the price you're going to buy it at. Correct. Okay. So they can still come back and say more.

They can. So say I win it at 100K and say the property who's listed 1699 on the MLS, they might counter me at 135, especially if it's a new property where it hasn't gone through two, three, four, five auction cycles. They'll counter me high. Okay. So these properties aren't exclusive to the auction then. They can be listed on the multiple listing service. They do.

They put them on the MLS. However, they can't. The only way they can be bid on is through that auction company. Got it. So who's the actual owner? Are these bank owned? Bank owned? Yep. They're bank on. Okay. Got it. So if the real estate agent that got the REO doesn't move fast enough, then it probably comes to the auction process.

Exactly. Yeah. Sit for a little while. They put it there. Try to move quicker. All right. So you're dealing with banks. That's fun. Yes. So you have to come in with cash at that moment. If once everything is approved? Yes. Yep. Then you want to close, you know, within 30 days, generally, sometimes 45, but usually within 30 days or so, we're closed on. So you're saying 65% of your business is wholesaling, are there any deed restrictions that the bank is putting on you? If we do Fannie Mae's, yes. Fannie Mae will put that 90-day deed restriction at anti-flipping thing on there, which is a real bugger. And there's ways around it, which I'm sure you may have dealt with in years past. But you can do things off the HUD.

You can do things consulting fees separately. But if they see it on there, they're going to be a little area of it. on a double close. Well, Fannie Mae, that's probably a lot of them, right? Yeah, there's a good bit of Fannie Mae's. Although I think they, right now, Fannie Mae seems to be doing more repairs to these properties and putting them out there retail and they're getting a lot of retail buyers because I have not seen as many Fannies and Freddy's as I have in the past.

I'm seeing more of Wells Fargo, Chase City, what is the other, Aquin, and Nation Star. see more of those out there. Yeah, they got, they kind of learned their lesson in 2008, right? Yes. They've always said, the famous line was, we're in the money business.

We're not in the real estate business, but then they became owners of so much real estate that they're like, well, we better figure out how to be in the real estate business. Right. And so they probably all got, they got all these departments that never really disappeared because now they're liquidating their own real estate.

Is that accurate? Yeah, absolutely. Nothing has changed there. I know how I dealt with it. I just went and did something else. I stopped dealing with the banks. When those 90-day deed restrictions came out, I was like, you guys just killed the whole thing.

Yeah, I was so I was imbecilic on their part. I don't know why they ever did that. They just hurt the market. They hurt investors big time. And yeah. Yeah. And it was at a time, what was the irony was at the time when all the banks got bailed out. So even if they sold them at a loss, they're not taking a loss.

Right. Right. And then they stopped it from the real estate investor. so the trickle-down economics stopped with them, right? And so they double-dipped on everything. And it was like, I don't know, that's when I started. You know, do you know who did aware of how the world works? HUD didn't, though, HUD to their credit.

And I think it's because the type of properties they had, they got rid of that 90-day deed restriction, anti-flipping and everything. You were allowed to do it. I was doing back-to-back closings on HUD properties. I was probably doing 40 to 50 year, just HUD's from 2009 and 2013. And 13, everything kind of changed. They went back to that 90-day thing. And not anti-flipping, but what they would do is make you get a second appraisal.

So the buyer pays for an appraisal, the seller pays for an appraisal. So they started that kind of nonsense. But it was still better what Fannie Mae was doing and Freddie Mac with the deed restriction stuff. Right. Super. All right. Well, that's cool. And there's a bunch of those types of sites out there.

But you need cash to play that game. You do. Are you using hard money? Are you independently wealthy? Some of my own money. Use a lot of private money. KG use a company like lending home and lending one. If it makes sense, the deal makes sense.

Especially for fix and flips, right? Because I get rates from them like seven and a half, seven and three quarters. It's pretty darn good money there. What's the rate there you're getting? Anywhere from seven and a half to seven and three quarters with them. Okay. Well, that's good then. They're very, very good rates.

That's great. Yeah. Yeah. Yeah. Absolutely. But on stuff I'm trying to wholesale, I generally just use private money, short term and our own funds that we, got it. All right.

And then your time for due diligence, like is it just a traditional purchase agreement that they give you? Yes. Traditional period, time period? Traditional time period. Yep. Great. Well, fantastic.

Let me ask you about two things. Having experienced the crash of 2008, and we're all kind of sitting around waiting for the next one. We're way overdue. Sure. It's such a crazy landscape to navigate at the moment. There's so much conflicting information. Some stuff points to a boom.

Some stuff points to a bust. And we're like, which one do we pay attention to? But what lessons did you learn back then that you're going to apply this time around? I'm going to have some more cash sitting on the sideline. That's one. I definitely want to have more cash sitting on the sidelines prepared for that. Our motto has been stashed the cash and saved it for the crash. The correct question is, when will that crash come?

Right. We've all been kind of waiting for it for a while. Now we had with COVID that kind of, we thought that was going to be the spur right now. But then you have people who are not sure what they do, right? They could be in forbearance right now and they haven't paid in six, seven, eight months. Yep. And then come April, they're going to have to decide whether they're going to keep their property or sell. So you might see an increase then.

But I think you'll start to see an increase of foreclosures in general. January, assuming they lift the moratorium on these foreclosures. And then I think we'll have inventory trickling up. And then that, I don't know whether it be a crash or correction. I really can't even tell you right now. My guess would be later next year is when we'll see more of the crash when you have more businesses failing and more people losing their jobs. I think that's when I think we'll have a bit more if they don't do another stimulus. Yeah. I'd have to think the new administration. is not going to let this thing crash on their watch after four years of bashing Trump

and the terrible job he did, quote unquote, terrible. They can't perform worse than him or else. Boy, that's doomed for them on the next election. Sure is. I think they're going to keep it propped up as well. So I don't know. Yeah, they kind of have to. Right.

Yeah, they have to. I mean, they made their bed. Now they got to lie in it. Yep. Or we have to lie in it. We have to lie. It's right. Cool.

All right. So, yeah, so you kind of, you can't answer both of my questions and one, I have no idea what's going to happen either. I mean, gosh, back in March and April, I was sounding alarms. Everybody, let's brush up on our creative financing. This is what we're going to do right now because this is going to be fantastic. I can't wait. And then I can never happen.

I know. I was in the same boat as you feeling the exact same way. And I started selling things, right? I was listing everything I could possibly list to get rid of. And then the price was going up and up and up. Like, wow, I'm selling these things for, I'm making killer profits right now on these real estate deals. we're still doing. We're still doing some fix-up lips.

But God, it could turn at any point. You never know. There can be something to trigger. Yeah. You know, who knows what's going to happen tomorrow. We could have a war with China or a war with Iran and that could change everything, right? Everything. Absolutely.

Absolutely. You know, back in March, and here's the other thing that really led me to it is, I picked up a few deals right away in March just from, like, people panic selling. And they're just smoking. Thanks, thanks were letting them go. I think in March itself, I picked up 12 in March. That was a lot of deals for auctions right down. I was barely bidding.

They were accepting everything I won because they didn't know what was happening. Yep. It was great. Right. I would have been a little bit more aggressive that month. But it changed really quickly. It really quieted down. And so, yeah, moving forward.

So you're storing the cash, which I know is kind of like the thing we're supposed to do. But let's kind of transition a little bit. Storing it in crypto and Bitcoin. Yeah. I've got a, boy, it wasn't last weekend or was it two weekends ago. It was super exciting. Yeah, it was. Godly. I was like, is this thing ever going to stop? I know. I'm going to stop working today. But it came back down, but we're still way up for the, for the year, right? Exactly. Yeah. I've been really paying attention, though, with the amount of stimulus that we've had this year and likely more stimulus coming up very, very soon. Great. And I've looked at what's his guy named Jerome?

Pal. Guy. Power. He's almost all but guaranteed inflation to go up. He has. Yeah. And then Ray Dalio just had an article in the June or July on MarketWatch.com. And he had a very big global view of the economy.

But the one thing like one of his closing statements was, going forward, you want to watch the value or the return, the value of your money as much as you're watching the value of your investments and kind of taken what he had put there in conjunction with what Jerome Powell said. I was like, maybe cash isn't the best place to have your money right now. It's not. It's sinking. The dollar is losing value and it dropped a bit more today, which is why you have crypto's going up a bit more again today.

It was one, two days there of Bitcoin hits all time high. I anticipate it going. I thought when we hit that little jump up, like you said a couple weeks ago, that we'd have a correction down around that 13,000 level. But it didn't. It dropped out of 16 and change and then shot right back up,

which is telling me that 16 might be the bottom right now, temporarily at least for it. And it could run up to 30 very early next year. It wouldn't surprise me if it runs up 30. And then I think there will be a pullback if it does. hit that 30 number, but we'll still be all in pretty good shape if it does do that. Yeah, no, totally. Do you listen to Mike Dillard at all? No. Mike Dillard's got a podcast, and I've followed him around for a long, long time, but he's more of a business entrepreneur

coach type guy. He has some really interesting guests. He asked really good questions, but he is huge in crypto, and he thinks it's going to, the Bitcoin will be up to $200,000 dollars within the next two years. Yeah, so I think it was J.P. Morgan or Citibank. A Citibank analyst has it at $318,000 next December, not this December, one year from now. And then all it was, JP Morgan says they see upside of at least 13 times what it is right now with one of their analysts that said. So that's telling you a lot. They see the dollar devaluing and these things going up. Right. I mean, it's a store wealth. Instead of us buying gold and silver, and now we can buy Bitcoin. Right. Some of these other.

last month at its worst month in what, since 2016, I think? Yeah, yeah, had its worst month in a long time. I still think it's a good asset to be in though for people long term, especially as a dollar drops down, but it's not going to go up as much as Bitcoin will. Right. No, I think the upside there is greater. Still a high level of risk, though. So, I've been very, I mean, I started off with just discretionary income, like money I didn't care if I lost or not, kind of like Vegas money. Same thing. That's what I called it, Vegas money. Yeah, okay, well, there you go.

But it just keeps on growing. So I'm like, gosh, I'm now losing money by not putting in. So now I've got a little bit more in there to where I'm like, this would kind of hurt if we, if this tanked. Oh, yes. Yes, I agree with you. I'm in the exact same boat as you. But look, I keep buying more and I'm waiting, been waiting for a dip to buy a little bit more because I've got money sitting in the sidelines. But there may not be that dips.

I might just have to start dollar cost averaging again. Yeah, yeah. I mean, that's kind of what I'm doing right now at very small increments. but I'm doing that every week. But I know nothing about it. I'm a complete moron. My whole strategy is FOMO. That's my investing strategy.

I'm going to miss out on this one. It's a lot of people, though. Yeah. It's like, so I know nothing. And, you know, and anyone listening right now, like, Matt, what are you doing? You're not in real estate anymore. So no, no, I'm totally in real estate. Like, I'm financially free from the cash flow for my real estate.

Right. And I've always promoted that, like free yourself first. Yes. And then take the. excess and then you can diversify that into some of your more traditional stuff, right? Totally. So that's kind of what I'm doing. So like the surplus is kind of going.

I just bought some PayPal stuff. I bought some square stuff because they're kind of affiliated with it. They're both into it. Yep. They're both doing the crypto thing. I bought a few of the pharmaceuticals and not a great deal, but the dollar cost averaging is kind of fueling all that and it's kind of growing and everything's doing really well.

But gosh, I mean, if I think tanked, I would be like, that would be painful right now at this point. It would be. We'd both be hurting. My portfolio would shrink by quite a bit. I don't want that. Tell me about this, though. How long have you been in crypto and how much do you know?

Like, how much time do you spend educating yourself about it and how certain do you feel about the future? So spring of 2017 is when I first started investing in it. I've been following. I was right at the kind of the last peak, right? Yeah, yeah, right before. So that peak was like October, November, December. So I was buying right before that.

Okay. And then into that. And then it took forever for what I purchased during the end of that time to catch back up to where it is now, right? Right. But no, so I spent, I spent at least a thousand hours research and this stuff over those years, if not more. And I follow some people now. There's a few different guys that are just very, very good online. And there's some of the guys I just don't follow because they're more trying to sell their programs and stuff.

Crypto viewing is one that I've followed for years. They use some way it's called remote viewing. They try to figure out what things are going. It's pretty interesting, very interesting stuff. They have some pretty neat guys on there. They got a trader, the guy who trades Bitcoin now up in Canada and Marty Hibbs. He's been spot on the three months he's been with them telling us what Bitcoin's going to do and some of these other ones up and down.

He's been really good. So I'm following them. Jay Snip is another one on YouTube. he's pretty good with it too he does some goofy stuff too but he's pretty good with the crypto stuff and then just like listen to a lot of the macro guys talk about it

over the years they've like how Robert Kiyosaki has now gotten really into it right but he wasn't into it before there's different guys like that that I follow and still listen because I want to listen to everybody I want to get everybody's perspective yeah I may like it but I want to listen to people who don't like it and I want them to tell me why they don't like it

so I could all right either reaffirm myself, yeah, I'm right, or I could be wrong, or maybe I should, you know, do with this or that. To play devil's advocate, what have you heard that causes you to pause about it a little bit and not go all in? So for me, I haven't really heard anything to make me pause. Everybody keeps telling me, well, what's it backed by? I'm like, I don't know, what's the US dollar backed by?

Our faith in it, right? That's what Bitcoin's backed by. As I have a hell of a lot more faith in that, the fact, there's only 21 million Bitcoin allowed to be mined, and five million have been permanently. loss. So there's really $16 million compared to what we do and just print, print, print, and add more and more and more. You can't do it. It's a set algorithm. So I like that aspect of it. And I think a lot of people do. A lot of people that are gold bugs, silver bugs too. Really like that aspect of it. And how easy it is to do stuff. I mean, I can have everything on my

phone, on my wallet and my phone. So it's nice and simple. Yep, yeah. Easy to spend. Easy to acquire. And it's not super expensive to acquire as far. as there's an app I use called Uphold right now, which is a really good one, which doesn't charge you a commission when you're buying these. Oh, really? It's a good one. And on that app, uphold, it's a green app here. You can also trade commodities as well. Oh, nice.

Yeah, it gives some real nice aspects to it. And it has a bunch of cryptos. It doesn't have all of them, but that does have a bunch of them. It has a bunch of them I like the, I do think the most undervalued crypto is probably Ethereum. And Ethereum is on a DFI network, which is going to have the smart contracts. And there was just some news about it today, too, about the speed of it and what they've done to increase that. And I think they're calling it Ethereum 2. I'm not exactly sure what that means.

I've got to do more research on that. But I know Chainlink is a part of the DFI network and Digibite. Chainlink is right now about 1395. And Digibite's 2.3 cents. Love those. Love XRP, which is Ripple because, you know, it's going to be the merchant service one. Those are just some good basic ones for people to be in, like coin, but I do think Ethereum, you know, basically near that $600 level.

I think next year we're looking at it. Wouldn't surprise me was that 15 to $2,500, $3,000 or even beyond. Mm-hmm. I know. It's exciting. It's so exciting. You know, because I listened to Mike Diller, and he's just saying, like, this is, like, the opportunity for, to just create a life-changing event for yourself.

and a legacy changing event. Right. But then he also says, don't put more in there than you're willing to lose. Totally. Right. So he's got that too. But he says like,

this is an opportunity to take 500 bucks and turn it in and add a couple zeros to it in a couple years. Yeah. And I was like, yeah, that sounds exciting. It's funny that number you just used there because I used to take $500 from every single deal I did and put it in it.

Every single deal I was down, $500 I would put in. So it is a good, safe number to do. Yeah. I mean, 10,000 this deal, we put 500 bucks in. That's not a ton. So here are the two things that caused me to pause is Mark Cuban is very bearish on it.

He thinks it's a scam. And then the one that really terrified me was when Jordan Belfort came out. You know who he is, right? Yes. The Wolfo Wall Street guy. He said, I've seen this before. And I was like, oh, man. That really hurt.

And so that's really caused me to be very, very conservative. Otherwise, I might have a whole lot more money in it if it wasn't for Jordan Belfort. But, yeah. There's always going to be, and you want those guys, because there's those guys that say that about almost any asset class there is out there, right? No matter what it is, no matter what stock, there's people that would have said that about Amazon back in the 90s, right? So I look at it like that. And this is a technology. And one of the reasons I think more real estate guys are going to get into this.

is because the technology is going to be used for us in real estate. At some point, the counties are going to be recording mortgages on a blockchain and not recording them as they do right now, because now it's going to be impossible for people to steal your deed and be able to refinance without you knowing it. So there's going to be all kinds of added levels of security. It's going to be used. I mean, it should be used in hospitals.

I don't understand why it's not used by hospitals right now, because they could have all of our personal records in there. Doctor can put that in the blockchain. another doctor can go look and pull that from the blockchain, assuming if the other doctor gives him his code to look at it, right, to be able to do that. So it's super secure from that perspective, or it's just the user, you yourself,

going to the doctor, here, I'll pull up that information for you. I know what that code is. And then they look at it and they can't do anything with it. So, I mean, to me, the security of it, it's a simple, blockchain technology is nothing. It's not rocket science. It's pretty simple, but it's very effective.

Yeah. So, yeah. I'm a big fan of it. I'm a big fan of the future of it. Yeah. You know, our gas stations here in town, I could throw a rock and hit three of them that have Bitcoin ATMs in them now. I'm like, okay, well, that wouldn't be there if there wasn't something coming. Yes. Right. Right. And then JP Morgan, as you had said. And they were trashing it before. They were trashed. I know there was some of the biggest naysayers about it. And now they're. They flipped 100% investment into it. Yeah.

I'd have to think also with the political display that we all got to witness to get a little bit more behind the curtain peak of how our government works. Yes. I think all of us lost a little bit of faith in the stability of our leaders. Oh, for sure. Regardless of which side of, I mean, any normal person, right, anyone rational and still has some logic left that, you know, I think we all lost a little bit of confidence on who's leading this country. And I think that's going to do a lot for Bitcoin as well, or just cryptocurrency. Agreed. I think it will. Yeah. It's just going to keep printing. It's just going to keep going up.

Banks are already putting a limit on how much cash you can withdraw. They're putting a limit on how much money you can wire. There's a serious ceiling on how much money you can wire overseas. Right. So it's like in this defeats all of that. Like it makes all that go away. And it's it's our money. We should be able to use our money the way that we want to use it. So I like that aspect to it. It too. And we can control it.

You know, I mean, if I have it in my cold storage wallet where it's offline, nobody can get to it but me. But if I have money, let's say I held it with the Ouisha Bank, who now is holding cryptos for people. If I do there, they could technically seize it. So I wouldn't want to hold it in the bank, but I get that a lot of people like our parents, our grandparents, probably wouldn't feel comfortable with this technology and all the seed words you have to remember and all the different passwords and that kind of thing. So if it's held by a third party company, whether it's Vanguard or Fidelity is doing it. Fidelity's known for people right now. And there's other companies out there do that as well. They want that security. Me, I want to control it. I want to control

it right here. I know. I'm sending Matt money right now. Here you go, Matt. And you get it. It's up in here in five seconds. You've got it. Yep. Yep. And there's no cost for Medio. The best part. Any time a day. I love it. Yeah. I always thought that Venmo app was made for the crypto, right? That Venmo was preparing us for crypto because you're basically, I mean, it's through your bank account and everything. But, all right, I forgot my wallet. You bought the pizza in the night, boom. Here's 20 bucks for you. And now everything's going to be set up on Venmo for the cryptocurrencies as PayPal's use.

So it makes sense. It's a simple app. Well, now you make me want to go out and buy more. Like, I don't have enough money into it. That's awesome. Gosh, I almost forgot we were recording a podcast. Where are you located, Paul? So I'm located about 45 minutes north of Philadelphia.

Okay. All right. Pennsylvania. Yeah, lots of news happened in there the last couple months. Oh, totally. Yeah, you wouldn't believe the corruption here, Matt. 130% of the people in Philadelphia voted. How does that happen?

30%. Yeah, 130%. You got to love it. That's like almost all of them. Yes. Yes, right? It's so unbelievable. It's been going on for years.

Philadelphia is just notoriously awful with it. Yeah, yeah. Detroit, you know, all the same cities and land in Detroit, Philadelphia. Same as it's always been. Interesting. Boy, there's a whole other conversation. We'll save that for another episode. That's another podcast.

I mean, that's another subject altogether. And speaking of podcasts, you have your own. And if people wanted to learn more about you or listen in on what you do, what's the name of the podcast? So the podcast is called flipping out. And if they want to see it online, it's the virtual investor.co. The virtual investor. Dot C.O. Yep.

Got it. Yeah, you know what? Like we didn't even get part to like your exist strategy and how you're operating in all these other markets. Yeah, you want me to jump in that real quick? That's pretty short conversation. Okay, cool. Yeah, go ahead. So more or less, if it's a brand new market we're into, we're pulling a cash

buyers list and we're mailing the property to the cash buyers. We also- You're doing a direct mail. You're selling your properties in other markets via direct mail. That's fantastic. Direct mail, Craigslist, Zillow. How many pieces of mail do you have to send out to sell one property in a brand-new market? Generally, generally you sell anywhere from 100 to 200 in a general market.

market, yeah, under 200 of this. It's not a ton. Right. And most of them we sell off, especially depending on where it is, Texas, most of them we sell a Facebook marketplace, which is bizarre. That's becoming a new hot spot in different areas. It's like a new Craigslist almost. Yeah. It's like, it's the new Craigslist, right? So we sell a lot those ways. And if it's a property, it doesn't need much or I can list it on the MLS and sell it pretty quickly, I just slop right back on the MLS. Yeah. So I've been doing a lot of that this year and doing extremely well with that. I think the whole tail strategy. I think this market is right for it right now, while inventory is so low on the retail level. Yes. That retail consumer isn't looking for

nearly as big of a discount as your investor buyer is. Not at all. I'm getting outbid on some these auctions by retail buyers. I know they're retail buyers because of what they're paying for the property and they don't mind putting a little bit of work in it. So if you do a little bit of a wholesale, boom, people are loving it. They're overpaying for it in almost any market right now. Yeah, super. So direct mail, Facebook marketplace, or you just put it on the MLS yourself. Correct. Those three bases, ways of exiting. Yep. And always on Zillow. We always post on Zillow as well.

Sure. Yeah, because it just because it hits so many different sites. Totally, totally. That was awesome, Paul. Came to a crashing halt. I got to run, but let's stay in touch. I enjoy this. I talk to you all day long.

I literally forgot that we were recording. Well, more conversations here, Matt. Yeah. It's like, maybe we talk more crypto offline. Let's talk more crypto offline. Very good. Well, next time I'm in Philly, I'll certainly look you up, and maybe we'll cross paths with the next mastermind.

That would be great. Sounds great. Awesome. So if people wanted to learn more about you, we got the podcast, anywhere else that they should go. REOAOauctionacademy.com. If they want to learn more about what we do, we do of students, we teach them how to do exactly what we do.

Super. REO auctionacademy.com. Very good, Paul. Thank you, Matt. Thank you, sir. It is a pleasure, and I'll talk to you soon. Yep. See you soon.

Take care. Go. 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 board, we got the cash flow. This podcast is a part of the C-suite Radio Network. For more top business podcasts, visit c-sweetradio.com.