Epic Real Estate Investing - Creating Passive Income.... Back to Basics | 1094

Episode Date: November 3, 2020

Turnkey Tesuday episodes with our lovely Mercedes are back! Stay tuned as Mercedes is taking you back to the basics of passive income and guide you on how to create FINANCIAL FREEDOM so YOU can create so much desired FREEDOM in your life! Buckle up, the ride is about to start! 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, the Turnkey Girl, and I am privileged enough to be partners in crime with Mr. Matt Terrio, the guy who created the epic real estate empire. For our repeat listener, welcome back, my friend.

Good to see you again. And for those new listeners, just turning into Turnkey Tuesdays, a very warm welcome to you. I look forward to connecting with you and getting to know you better. Well, as you noticed, Matt and I, during the last few months, we took our foot off the gas a bit and slowed down on our podcast production for a number of reasons. I mean, we are in the midst of a national pandemic. And much like Middle America, we had to reevaluate our business and pivot a bit, I guess. But really, we focused more. on real estate. And while we love podcasting, we took a seat back a bit from podcasting in order to keep up with the demand of the changing market during the midst of a pandemic. And I mean, think about it. The world was stopped for a minute, actually, for a little bit. And, you know, people went into panic mode. So what we did is we dove deep into our business. And I am grateful. I'm super grateful that Matt and I

created a business that is an essential of life. I mean, it's putting a roof over families' heads. And everyone needs a roof over their head. And I mean, I'm passionate about real estate. I'm passionate about passive income, if you can't already tell. And what passive income has done for me and for my family and for our students that have followed us and for our clients that have come on board. I mean, it's not only created infinite possibilities for myself and Matt and our son, but it's created so many possibilities for our students and our clients. So we had no shortage of work during the pandemic. And when people were forced to stay home, we got to stay home, but we got to stay home to work on a business that was going to serve you. Then, like probably four weeks into

the pandemic, we started getting calls into the office from you, asking, you know, where Matt and I were and where the podcast went and, you know, comments on our YouTube channel that, you know, where are you guys? Why haven't we heard more of you? And mind you, you were home yearning to learn more and to find out, you know, what to do next. And then it just hit me. It hit me that you continue to desire and seek financial freedom. Many of you were in the search of what's going to happen next. And so when I talk about financial freedom, I just really talked about what does that meant? I really started to dig deep as to what did that mean for the people that were home, that were forced to stop working and were placed into a situation where they had to provide

means for their family and they couldn't. You know, I've been doing real estate for quite some And every time I'm asked to speak and I'm given the opportunity to connect with people about passive income and to teach a class about creating personal financial freedom for yourself or to host my women's real estate investing group here in Las Vegas called Ren. I always start with, why are you here? You know, why are you seeking financial freedom? And what does that mean to you? What makes you want to do something different?

And what's holding you back from leading the life of financial freedom that you've pictured for yourself? Like, are you taking the trips that you want to take? Are you living that dream of, you know, taking care of your loved ones? And what's in the way of that? Are you driving the car that you love? Are you living in the home that you want to live? And most importantly, are you spending time with the people in your life that mean the most to you?

Well, that's what financial freedom means. And almost every time the common answer that I get when I ask this question is freedom. You want freedom to do anything that you want to do anytime you want to do it. And what really gets to me is so many people dream of that and you're not doing it. What's holding you back? You know, what you're doing now is not getting you to where you want to be financially. Now, you may be working overtime or you're working to jobs. You're cutting down on your expenses and you're not getting your hair done. You're not playing golf with your buddies or you're not going out to dinner because you're saving and you're not saving

fast enough. And that brings me to creating cash flow. You're seeking something in the world of financial freedom that you're not able to create for yourself at the moment. And that's where creating passive income and creating cash flow comes into play. Because you could be clipping coupons or you could be cutting down on your Starbucks habit. But when you're working the two jobs and when you're doing all of that, you're trading time for dollars. And the moment you're that you quit that overtime or the moment that you quit that second job, the buck stops coming in. This is why cash flow and creating passive income is so important. I will tell you, building cash flow, it doesn't happen overnight, and many times it may be difficult to get started, but it's not

impossible. Even if you're working for corporate America and even if you're not making as much money as you know you can or you're not making the money that you're worth, you could still create streams of income that could contribute to your financial freedom. So I decided to create an episode to take us back to the basics. And not only am I creating an episode, I'm creating a mini series of series of how to help you escape the rat race, if you will, how to help you create financial freedom so that you can create the freedom in your life that you are looking to create. Because the reality is that all of this starts with a mind shift. And the mind shift, I will say, it sounds hokey, I know, but it isn't always easy.

I mean, when I started. One of the hardest things for me was to change my mindset from creating piles of cash to creating streams of income. Now, I've shared my story before. I was a fix and flipper. I started in the world of mortgage banking. I worked in the subprime industry many years ago, so I understood what it was like to leverage, but I couldn't wrap my head around how to leverage on such a level that it was going to make a difference for me to create freedom in my world. So I started fixing and flipping. And while it was quite lucrative when I was doing it. I had created an additional job for myself. It was a second job. I was working at the bank during the day and then during my breaks, during lunch hour. And whenever I had a

moment, I was looking for that fix and flip that I was looking to close so that I could create piles of cash. And it worked. It worked really, really well. I created piles of cash for a couple of years. But then, in 2007 and 2008. When the market completely tanked, I was stuck holding a bag. And what I meant was, I was stuck with my last project. My last fix and flip, which is projected to make $92,000 of profit. And I made only $8,247. Now, I say only made $8,247. Now, I say only made $8,247. because I was scheduled to make $92,000, and it was a reality check. So during this time, Matt was wholesaling and he was buying and holding properties. Now, the properties he was buying, we were living in California, and he was buying these

properties in the Midwest and in the South because these were the only properties that were producing cash flow for a minimal entry point. and I would laugh at him because I would think, what am I going to do with the property that's only producing $150 or $250 a month in passive income? And he would say, watch, I'm building. And every month he would buy one or two properties and then one month I took a look. And this was back in the day when we were still collecting checks. But he collected all of the checks from the 15th to the 20th of the month where we were. would receiving the checks, paper checks in the mail still. And one day I went to the bank with him

after he had been doing this for several years. And he had deposited $8,200 in passive income. What I had just made on my last flip that was projected to make $90,000. And then guess what happened? Next month, he deposited $8,400. And then it clicked. But my friend, it took me about two years to change my chip in order to accept that, oh, building streams of income, even if it's $100 a month, made a different. So, honestly, it took me a couple years to understand that. And when I look back, I say, what a waste of time. I wasted two and a half years trying to wrap my brain around creating streams of income.

Because for me, when you're making big bulks of money on a flip, making $200 a month on one property just isn't appealing. And again, it took me a couple of years to change my mindset. But when I finally did, it clicked and I will never go back to making piles of income. And trust me, I struggle with it on a regular basis. When I see properties come across my inbox, come across my desk, and I think, wow, I can make $25,000 on this deal. Or I can make $200 a month in passive income. I have to constantly remind myself, yes, I can make 20 grand on a wholesale or on a flip, but it's only one time, or I can make $200 forever. And that concept of cash flow is so important to really wrap your brain around it.

I mean, it's streams of income, but it streams of income forever. You do the work once, and then you never have to do it again. Now, let me clarify, creating streams of income doesn't mean that you become a completely passive investor. Yes, you are classified as a passive investor, but it doesn't mean that you are an inactive investor. You still have to manage your property manager. You still are going to have to make sure that your property manager up keeps your property so that they can continue to collect rent. You still have to get your accounting statement on the 15th of the month and make sure that your

property manager indeed deposited rent checks into your account. So don't get it confused. The fact that you are a passive investor doesn't mean that you're an inactive investor. But you do the work one time and it continues to pay you month after month after month with very little work on your behalf. Much of the work when you're a passive investor is done up front. Okay. Also, you have to really wrap your brain around what your motive is forward. wanting to be a passive investor. Because cash flow in real estate not only means that it's cash flow via what's left over after you've paid your mortgage payment, your taxes, your insurance.

There's much more after that. There are tax benefits. There's appreciation. There's depreciation. And let's not forget amortization. Amortization is when you're, your tenant pays down your mortgage. I mean, it's beautiful.

And that concept, it's a concept that Matt and I call it the ROI matrix because it's not only one way that passive income serves you. It serves you in many different ways, including the tax benefits, the appreciation, the depreciation, the amortization. All of that goes into play. Now, one misconception that new investors have is my thought process exactly many years ago of, you know, what am I going to do with only $200 a passive income every month? That's what we have to change. It's the $200, the just $200 a month. because the reality is that at the end of the year, that $200 a month equates to much, much more after taxes are done.

Now, the concept and the talk of cash flow and creating it, it's growing organically, especially during these times, because those investors that had just started investing right around the pandemic or right before it, they were able to really capture what it was like to collect rents even when they weren't working. So I love to teach how to get started. And I do it via conferences or when I'm asked to speak on webinars or at the Epic Intensive. I have a whole segment of how to create passive income and how to do that in your world. And the reality is there are courses out there. there that teach you this concept of how to get out of the rat race or how to get started to create

financial freedom and what to do and how to do it. There are so many courses on how to create passive income and how long it's going to take you to create your freedom number. I mean, I teach this myself with the passive income audit that we do. I welcome people to do an audit because the reality is, is that creating passive income, it is a very slow process. And oftentimes, it's very boring. I mean, you do the work up front. And once you do the work, you close on the property and you collect rents. It's not like fixing and flipping or it's not like, you know, a seller finance deal or it could be. But, you know, it's not the seller finance deal. You do the deal. You do the deal up front and then you close on it and you continue to cash flow. But it's like anything else in your

life that requires attention. It's like, you know, you want to grow tomatoes, for example. You plant the seed and you have to watch it. You have to water it. You have to make sure that it is placed in the right location so that it doesn't get too much sunlight or it gets not enough sunlight. you have to take the time to cultivate it. Same things go with muscles. You know, everybody has muscles. If you want bigger muscles, you have to go to the gym and you have to work at growing those muscles.

You have to eat right. You have to take supplements. Creating passive income is the same concept. And the reality is we are all capable of creating passive income. But most of us won't because we're not willing to do the work. And many of us have ingrained in our heads that I don't want to learn how to do it because there's too much risk in creating passive income through real estate. Even defining your freedom number, it takes work. And all of requires work that will get you to think outside your comfort zone.

And it's not necessarily physical work. I mean, your job that will allow you to put a roof over your head, that may be physical work. And the job that you have that's going to help you create the initial capital for those first streams of passive income. Yeah, that work. But I'm talking about that extra muscle that. muscle that you have to work in your brain and in your psyche and in your mindset that's going

to allow you to make that shift so that you can create those streams of income that will contribute to your financial freedom. It's discipline. It's discipline to do the things that the average person is not willing to do. And to create passive, income, I'm talking about, I mean, mind you, I'm speaking on a real estate investing show. So naturally, I'm talking about creating passive income through real estate. However, I'm not only talking about exercising the muscle to create passive income because that would apply in any fields that you're trying to create streams of income. And just think of it. What would it mean to? you if you had the freedom to do whatever you wanted to do that would allow you to decide if you

wanted to go to work every morning. What would it mean to you to have ultimate family time or to take all of the trips that you want to take? What would it mean to you to help your family financially? Or to buy your spouse that dream home that you have been including on your dream board every single year. And all this can start with creating streams of income. So I'm going to share with you just a few key points that will help you focus your attention in the right direction to help you buy your first rental that will create passive income. Now, if you already have a few rentals and you want to step up your game, I'm planning to do an episode in this series on how to help you step up your game

so that you can look into creating your rentals into a portfolio. Because once you get these properties into a portfolio loan, you can now borrow on the projected cash flow of your real estate portfolio. I mean, it is game changing. So if you already have a few rentals, stay tuned because that is coming. But let's focus on changing a few things that are going to help us create that passive income in your world. You ready? Okay, here it goes.

Number one, mindset. I know it sounds cheesy and I was a victim of it myself, which is I just just shared moments ago, but I want you to really identify to the T what is your goal for creating passive income? And I mean to the T. So if you want to replace your job, say you hate what you do for a living and you make $4,500,000, a month. So that would be a good number for you to consider, okay, for me to quit my job, I have to create $4,500 a month in passive income. I want you to articulate to the T what that number is. And if it's not cash flow, if it's tax deductions, or if you are going to invest in passive income

for appreciation, because that's more your goal, I want you to be crystal clear as to what that figure is, regardless of what category you are diving into creating streams of income. Okay? That's number one. Number two, create a plan. It is really important that you have a plan set so that we can create that tax deduction or that passive income so you can quit your job. And that plan means either speak to your first.

financial advisor or your mentor or a professional that is going to help you create that plan. Or it could even be as simple as schedule a call with myself or one of my team members that can help you create that rat race plan to get you out of the rat race. In fact, on a side note, if you go to my website, download the frustrated investors guide to passive income. because in that package, it's a PDF downloadable. It's completely free. I have on page number, I think it's page number 21, there is a rat race escape plan where I define a plan of how to get you out of the rat race. Completely free. There's nothing there for sale. It's simply just a plan that is a replica of the plan that Matt and I actually executed to get out of the rat race. Now, in the pamphlet, it is, we modified the numbers to make them a little bit easier to obtain, but very doable, could be done, completely downloadable and

free. So I encourage you to go to www.com. That's savvy with 2Vs.com and download the frustrated investors guide to passive income. And then number three, Most important, start working the plan. Now, this, my friend, is where it gets hard because I'm not going to lie, it's a little bit uncomfortable to step outside your comfort zone. And your comfort zone may be, you know, going to Starbucks every single day, or it could be continuing to contribute a massive amount of money to your 401k. it is going to make you feel uncomfortable on purpose.

And what's going to happen is once you start to grasp what you have to do to create passive income with the resources that you already have, because most of us, I'm going to be real, already have the resources at your fingertips. You just don't know what they are because they're not common knowledge. And if they are common knowledge, like a 401k or an old IRA, the first thing that hits you is that you're going to be penalized and taxed for using them. The reality is, my friend, there are ways around it. So when we talk about working the plan, know that you are going to feel uncomfortable with the new information that you're going to be. absorbing. And immediately, you're going to start creating excuses for yourself, which, by the way,

is normal. But if you want to get out of the rat race and you want to create passive income through real estate investing, you're going to have to tell those thoughts, thanks for sharing and do them anyway. There is no tweaking and no compromising in creating the plan that's going to get you the financial freedom that you were seeking. Again, this is not going to happen overnight. It took Matt and I three and a half years to get out of the rat race. But my friend, I got out of the rat race. We got out of the rat race because we didn't have a plan B. We had no choice. So when you are plain with all chips in, where there is no deviation, where there is a huge purpose and where you are uncomfortable going through the process, you are doing something right. And I promise you,

it is not going to be impossible for you to do, but it may feel uncomfortable. Creating passive income, it's a simple concept. I mean, it's a simple concept. I mean, it's It's easy to understand. And with the right people, with the right team, it can be done. And it can be made relatively easy. Nothing is impossible. That's just the basics. But I'm committed to helping you make this happen. I mean, I'm on a mission because I did it for me. I did it for my family. And the financial freedom, gosh, it feels amazing. It's epic, by the way, pun intended. So this month, I'm going to discuss something that's going to help you create streams of income.

I'm going to tackle topics like getting your first property to produce passive income. Or if you have multiple properties, I'm going to dive into portfolio loans. I'm going to invite a lender to discuss the market trends and how you can maximize lending during these unpredictable times. In fact, I'm even going to invite an expert that's going to share secrets about self-directed IRAs and 401Ks that the government doesn't want you to know about. And I tell you what. if you want to hear on a topic in the realm of passive income with rental properties, you have my word that I will cover it. Just email me or put it on my cash flow savvy page on Facebook or on Instagram.

But it's probably easier if you email me. Email me at Mercedes at epic real estate.com. Mercedes is spelled exactly like the car at epic real estate.com and I will cover it. Now, my team and I, we've done over 2,000 transactions in cash flow savvy's existence. I personally have done over 3,000. And I've done real estate in the midst of this pandemic. So I can likely provide some guidance and feedback. But if I can't, I will seek an expert.

to come and speak on the very topic that you are looking for clarity on. That's it for today. I look forward to an amazing series that's going to help you create passive income in your world. Have an epic day. If waiting for your investments to grow feels like waiting for pink to drive, there's a powerful secret your financial planner doesn't want you to know. You can accelerate your investments growth by two, three, or even four times. 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 to take control of your investments and double, triple, or even quadruple their returns, 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. This podcast is a part of the C-suite Radio Network. For more top business podcasts, visit c-sweetradio.com.