Epic Real Estate Investing - Cash Flow. The Easiest Way To Get It | 729

Episode Date: July 30, 2019

For Mercedes diamonds are not her best friends, yet cash flow is her bestie! Today, she explains what cash flow really is, why it is referred to as passive income, and the easiest way to get it. Learn more about your ad choices. Visit megaphone.fm/adchoices

This is Terrio Media. So you want to be a real estate investor, but you don't want to do the work. If there were only a way where someone else could do it for you, now there is. Tune in here each and every Tuesday on the Epic Real Estate Investing Show for Turnkey Tuesdays with your host, Mercedes-Torres. Hello and welcome. Welcome to Turnkey Tuesdays, brought to you by Epic Real Estate Investing. My name is Mercedes Torres, your turnkey girl, and I am lucky enough to be partners in crime with Mr. Matt Terrio, the guy who created the epic real estate empire. This show is real estate for busy people. Busy people, just like you, who understand the importance of real estate, just don't have the time or the knowledge to learn every single nuance there is to learn about acquiring.

passive real estate investing. So if this is your first time here, glad you made it. And if this is not your first time here, if you are a regular listener, my friends, welcome back. So cash flow. What is cash flow specifically? If you aren't familiar with the concept of cash flow, cash flow is the cash that flows in every month without you having to work for it. Now, you've heard me say many times as cash flow is produced by investments or assets that actually generate income for you, and we call that cash flow. The cash flow is also referred to as passive income, and it's the primary focus in building infinite wealth. Now, you hear Matt and I say often, real estate is the final frontier where the average person has a legitimate chance to make financial wealth. And I would further say that the cash flow

derived from real estate is what's going to help you achieve financial freedom. So cash flow is actually one of the many beauties of real estate and the reason why I love investing in turnkey properties. It's how Matt and I have been able to accomplish our goal of financial freedom. And my friends, I am here to tell you that it is absolutely possible in your life. So this is how cash flow works. Cash flow happens when you purchase an investment and you hold onto it. Kind of boring because it's not like a fix and flip where you actually can see the property blossoms, so to speak, because generally when you do a fix and flip, you buy a distressed property

and then you have to fix it up to turn it to sell it. So it's not that exciting because when you're buying it. a property to hold onto it, you buy it, and you hold on to it. It's not even like you're creating a real estate, creative financing deal. Now, don't get me wrong, you could possibly purchase a property with creative financing where you can hold the property. But generally speaking, in today's world, most people are buying property with conventional loans because let's face it, at the moment. Conventional money is the cheapest money to find. So kind of a boring strategy because you just buy a property and you hold it. That's it. But then every month that investment

returns money to you. Cash flow, my friends. Now, cashful investors like myself typically don't want to sell their investments because we want to keep collecting money on a regular basis, on a monthly basis. For instance, if you were to purchase stock that pays you a dividend, then as long as you own the stock, it will continue to generate money for you. And that's money in form of a dividend. Well, that too is cash flow. But in real estate, you buy a property, you rent it out and every month you collect the rent and then pay the expenses including the mortgage. So the trick here is to buy the property at a good price. Now, the term good price is relative because if you buy it at a good price, even if it's market value,

a good price would mean that you would buy the property in order to pay, the mortgage, taxes, insurance, property manager. Even if you buy it at market value, if the property has money left over at the end of the month after you've paid all of these expenses, that is a good deal, that is buying property at a good price that's producing positive cash flow for you. Now, one of the best things about cash flow is that you don't need to acquire hundreds and thousands of dollars in savings in order to reach financial freedom.

Why you ask? That's because cash flow breeds more cash flow. Let me explain what that means. So my first investment property back in 2002 was a small two-bedroom, one bath in Memphis, Tennessee. The cash flow average of that property was a whopping $75 a month. It wasn't much, but it gave me a start. In fact, that $75 a month was the first building block towards cash flow that I enjoy today. Now let me tell you what happened with that little investment property in Memphis, Tennessee that I purchased in 2002. Now, you all recall the bust in 2007, 2008. I still was able to hold on to that property. Now, that property went from cash flowing $75 a month to $65 a month. And I'll tell you why. everybody was losing their shirts. Everyone was losing properties. And what I did so I wouldn't lose my tenants is I dropped the rents by just a little bit. Notice it only affected my cash flow by 10 bucks. So I went from an average of $75 a month to $65 a month for about two years. Fast forward to 2015, just about $3,000. years ago, I took that property and I did a cash out refinance. Why? Because that property

had a value of $142,000. My friends, I bought that property at $65,000. I'll let you do the math. With that property, I then took the equity and I bought two more properties. Today, that same property cash flows $125 a month, and it allowed me two more properties that are cash flowing each about $150 a month. Now, it doesn't seem like a lot of money, but now I have from that one little property, a property that cash flows $125 a month, and two properties that. cash flow a total of $300 a month. So with that one property that I bought in 2002 that I continue to hold to this day, I now cash flow with that one property a total of $425 a month. That is the beauty of cash flow. If you keep buying properties and just hold onto them, there comes a point in your investment process

where the cash flow of your investment supports not only your living expenses, but also your next investments. You see, your cash flow breeds new assets, which in turn breeds more cash. Isn't that amazing? Now, ladies, I know diamonds are supposed to be our best friends, but my new best friend is cash flow. Once you start to accumulate properties, it helps you reach financial freedom. When you start to treat yourself to everything that you wanted that wasn't tangible, my friends, ladies, you now can start to treat yourself to, all the diamonds that you want with the cash flow that's being generated by the boring strategy of buying a property and just holding it. But keep in mind, this does not happen overnight. It takes a moment. And this is why I constantly say, even if you were to buy one rental a year, or one rental every two years, it's better than doing nothing.

nothing at all. More cash flow benefits, as you see, cash flow equates to financial freedom. Once you're financially independent, you can choose the life of leisure that you want. You can choose to work less if you'd like. You can choose to pursue a new business venture. Heck, you can make your own schedule, you can take up dancing lessons, or you can make it a goal to travel and see the seven wonders of the world. You see, financial freedom allows you to do what you want. And creating passive income and cash flow will allow you the opportunity to create financial freedom. them. Cash flow is designed to eliminate the fear of running out of money during retirement and allowing you to live today while you reach your retirement. As long as you continue to own the asset,

your cash flow will continue to work like clockwork. And I have not even tapped on what kind of tax benefit cash flow has for you. It is the lowest tax type of income that exists. This is not always the case for capital gain taxes that you will have to pay for the profits that you've acquired from a fix and flip house, for example. Now, this is one of the many reasons why I stopped flipping. I originally started as a fix and flipper back in 2005. I held very little. It was the prime of the market. But every time I closed the deal, I had to account for massive capital gain taxes.

So, my friends, when I get asked, how did you and Matt escape? the rat race. My response is it's easy. Just buy properties and hold them. That's it. Don't ever sell real estate once you've acquired it. Just buy it and hold it. Your goal ultimately should be to get more cash flow coming in than your living expenses. This is called escaping the rat race. It is the ultimate financial freedom. Having your assets work for you instead of you working for your assets. Or better yet, having your money work for you instead of you going to work every day to get the paycheck and work for your money. What are you waiting for, my friends?

Today could be the first day of the rest of your life. Now, if you want my help with this, feel free and reach out to me or my team. One of us will be happy to help you at least point you in the right direction. You can send me an email at Mercedes at epicrealestate.com or better yet, even easier, go to cashflow savvy.com.

that's savvy with two Bs, download the frustrated investors guide to passive income or schedule a call in our links, and start carving out a plan that's going to help you achieve financial freedom. Now, my friends, I always ask you to do the numbers. Focus on the math. I'm going to ask you to think about your financial freedom number. That's your homework for this week. Think about what that number looks like for you to take your foot off the gas and ultimately to reach financial freedom. It could be a monthly number. It could be a quarterly number. Just come up with a number so that we have a goal, a number that's going to define your financial freedom.

because once we have the number, we now have a goal. And when you and I talk, we can focus on how to reach that goal. And my friends, with focus, anything can be accomplished. That's it for today. Until next week on next episode of Turnkey Tuesday, where Cashlow is King. Make it an epic week, my friends. Do you have doubts about your current plan for retirement actually panning out? Imagine revolutionizing your retirement plan so it pays you right now and in retirement.

Change one thing, one time, and that revolution can be yours. That's bad news for Wall Street, but great news for you. We're cash flow savvy, and we'd like to offer you free information that will show you how one simple tweak can cause your retirement plan to pay you right now and in retirement. and it's yours for free. For the secret your financial planner doesn't want you to know, go to cashflow savvy.com. That's cashflow savvy.com.

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