Epic Real Estate Investing - Creative Options for Optimum Cash Flow | Episode 98

Episode Date: April 21, 2014

Matt wraps up the "Living the Dream" series by sharing creative options for optimizing your cash flow to build your dream faster. In closing, he shares 7 ideas every real estate investor should never forget. ------------------------- 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. Yes. What's up? Hello. And welcome. Welcome to another episode of Epic Real Estate Investing. If this is your first time listening to the show, welcome.

Glad that you are here. This is the place where I show people how to escape the rat race by investing in real estate. And if I were to do this all over again, I'd do it exactly the same. same way. And I'd do it exactly the same way whether I had money and credit to work with or not. You see, while I was, you know, getting started and navigating my way through this whole real estate investing thing, I stumbled upon 12 different strategies of investing in real estate with little to no money because I had to, because I didn't have any. And in hindsight, being forced to invest that way, I believe it made me a much better investor. And I want to make you a better

investor also. So I put the first two strategies, the two of which I believe are the easiest and fastest strategies to a paycheck. I've put them into a free course just for you. And you can access that free course at free real estate investing course.com. Okay. I'll share with you maybe a little later, but it's probably a more important time to access that course than any other time. And if you're listening on your smartphone. I've got something special for you. If you just can't wait to get home to get to the computer, you don't want to forget. You can download the course right here on your phone or right there on your phone because you're over there. I'm over here. Then you can text free course to 55678. Free course. That's all one word by the way. There's no space in between the words

free and course. It's free course to 55678 and you'll get the course right there on your phone, the two easiest and fastest strategies to a paycheck in real estate. So let me begin. I want to begin today's episode by just sharing with you just my gratitude, my appreciation, and just acknowledging how awesome you have been at the epic online coaching sessions. I mean, you had great questions, great interaction. I mean, so many of you are so helpful to the others in these sessions. It's just been a good vibe, a good environment, and it's an absolute pleasure to spend that time with you

and to be able to coach you and help you out and answer your questions. And so I just want to say, we're going to acknowledge, you know, you guys are great. It's really great. And so the next coaching session is tomorrow night, and you can get a full schedule of the upcoming coaching sessions and register there as well at EpicproWebinar.com. Now, these sessions are free to all that want to attend, yet the recordings of these sessions. Listen closely. No, some people are still missing the message, and I put the message everywhere. The recordings of these sessions are available inside of the Epic Pro Academy only.

It's for members only. Okay. So you can attend the live trainings for free. It's free for everybody. But the recordings and the archives of all those recordings are for members only. And speaking of which regarding last week's sessions, I will be posting the recordings inside the academy shortly. The recordings, they didn't come out too good. So I'm going to go ahead and redo them here in the studio so that they'll be a little better quality,

a little more concise, more to the point. And so you can get that information a little bit quicker and also without the interruptions that we experienced. You know, unfortunately, I've got a seemingly third world internet connection here inside the studio. And that has been interfering with a nice fluid flow of these sessions. It hasn't been too bad, but it has definitely interfered with the recording. So I'm going to go ahead and just redo those for you.

And I'm happy to say, however, though, that after a long and drawn-out battle with AT&T, Yes, AT&T if you're listening, you need to pick it up on the customer service side. I will be switching to charter this week for my internet connection. They have assured me that I will be lightning fast with my internet, and so I'm going to hold them to it. So this challenge should be behind me once and for all very soon. And speaking of the academy, you know, one opening day is coming up. Version 2.0 is May 1st, and in celebration of that launch, and in celebration of our 100th episode, Yes, we're only two episodes away of episode number 100.

And coincidentally, during this time, we're going to go ahead. We're going to hit 1 million downloads next week of this podcast as well. And I just have to say, thank you for your support of this show. I mean, I wouldn't be here doing what I'm doing today if it weren't for you. I mean, I love producing this podcast. I love helping people achieve their investing results. I love making people better investors. And a benefit I get out of this, other than the love of doing it,

benefit I hadn't actually anticipated, but I highly recommend it to everybody listening to me right now if you have the means. But by producing this show every week and the interactions that I get to have with my coaching clients, it's made me a better investor and it's making me a better investor every day. So if you have the opportunity to teach, even if it's just with one person, teach, it's going to make you a better investor as well. So just business on all fronts, it's just really booming and I thank you for that. Thank you for allowing me to give to you and thank you for giving back. So next week in celebration of all this good stuff, I'm going to release an episode every single day of the week, Monday through Friday. And these episodes are going to consist of

interviews of epic community members. I've been collecting these and I can't wait to share them with you. I'm really excited to share these particular shows with you because they are real people. They are investing in real estate in the real world. They are achieving real results. They're experiencing real world challenges. They've got nothing to sell. They have no alternative motives, but to share with you what's working for them so that you can learn from them and apply it to your own business or situation. I mean, these are my favorite episodes. And per the download statistics, they are your favorite episodes as well.

So I haven't done one in a while. So this should be a really great week of real world education next week and in celebration of all the cool stuff that's going on. And not to mention, it's going to be fun. It's going to be entertaining. I'm looking forward to it. And I just wanted to make you aware of next week's plans because depending how often you update your mobile device, most systems will, they'll only download the most recent episode. So, for example, if you update your phone on Monday and all your podcasts, all of the stuff that you listen to, if that's all going to update on Monday. And then you don't update it again until Wednesday, you're going to miss whatever happened on Tuesday.

unless you intentionally go in there and look for it. So that's just an FYI to make sure that you get all of the episodes next week that that you want to listen to and then you don't miss anything that could, you know, maybe impact your business or cost you an opportunity or cost you some money. So be diligent next week when it comes to your podcast updates, okay? Now, as I promised last week, I will be offering a special discount promo code for this version 2.0 launch. I will be sending that out via email and the specific email list that I'll be using to send

out that code is the one that you subscribe to when you access the free real estate investing course. So two things here. If you want the discount code and you haven't yet accessed the free course, you're going to want to do that. You don't want to do that. ASAP, I promise you. Go to free real estate investing course.com and get that course.

Second reason you're going to want to do that, or the second thing you're going to want to do is make sure that those emails aren't going into your space. Spam folder or your junk folder because you're going to miss the promo code. So go through your inbox stuff. Make sure that you okay your system to receive epic emails in your actual inbox. Okay? Make sure you unmark them as spam or junk. Because I know Google, especially Gmail, is getting more and more strict.

And there's stuff that I want that's going to junk mail. So I'm kind of annoyed by that. But I now know it's a regular practice for me to go in there and look. You might want to just do that regularly. Or you might want to just do that anyway to go see if there's something that you miss there, especially if you have a Gmail account. All right, so as I was mentioning last week, this will be a one-time discount offer of the Academy.

This offer will never be made again, I promise. It's going to be good only from May 1st to May 4th. And then Sunday night at midnight, that thing is going to expire. And the Academy will just be regular price, which would still make it the best offer that I know when it comes to real estate investing education. I set out with that intention.

I said I have to make sure this is the best education. and not only the best education, but at the best value as well. So even after that, no big loss to you, but I just want you to know about the promo code and the discounts that will be from May 1st to May 4th. And then price will just, after that, it'll just be what it is. It is what it is.

And I probably won't be fussing with the Academy anymore, at least for a long time. I've got other things to move on to like my own real estate business. And I've got this 40 unit and I've got a 44 unit that needs my time, needs my attention for probably pretty much the rest of the year. So that's that. That's what I'm going to be doing, you know, starting Cinco de Mayo. And happy birthday to my girl because that happens to be your birthday.

All righty. So today we're going to resume and finish up our Living the Dream series. Oh, last thing. Maybe you know or maybe you don't, but I just launched a new podcast last week. And I launched that with my personal trainer, trainer to the stars, Mr. John Schaefer. And that podcast is called Body Do-Over. Body-Doo-Over. So if your waistline has been expanding a bit like mine, especially for real estate investors,

and sometimes we spend a lot of times on our butts and we eat bad food because we're in a rush. And so if your waste has been expanding a bit like mine and you like to contract that waistline and contract it and do it in time for summer, why don't you go check it out? Check out what we got going on over there. Again, it's called Body Do-over. I mean, it's already after just one week. It is already the number one fitness and nutrition show on iTunes. People are digging it.

So if that fits into your world somehow, now you know. Okay, so to finish up the Living the Dream series, I want to offer you some closing words, some very serious ones, though. I mean, this is your life at stake here, right? Absolutely. So let's talk about growing and developing your business and essentially growing and developing your dream. I want you to spend some time defining your long-term goals.

I mean, it's critical for staying on track to make sure that, that, you know, you do eventually get your dream and more specifically sooner rather than later. I want you to enjoy your dream while you're still young enough to do so. That's what this is all about. So it's important to take things one day at a time in certain instances, but it's also good to know where you are ultimately going. I think that's really important. So please put some serious thought into your long-term goals and clarify them, say, in stages and categories. I mean, there are many, many ways to do this.

And, you know, various coaches suggest different methods for setting goals that combine that precious balance between, you know, being ambitious and being realistic. You know, what kind of lifestyle do you want to have? What kind of monthly residual income will provide you and your loved ones with the things that will make you truly happy? And, you know, chances are that you'll not want to stop with one investment property. I mean, it's probably not going to be sufficient to really help you achieve financial freedom anyway. So once you've grown your residual income to more than one property, because it'll probably take more than one. And once you've got it to a point where it's covering your expenses, once you've got it to where it's covering your expenses, you are essentially free there.

It might not be your dream, but you are essentially financially free. So when you're setting your goals, you may want to consider your monthly expenses. That's good to keep track of those. It's probably a good idea. Actually, it's a great idea to calculate those up so you're aware. And set one of your main goals, maybe that's your first goal to make enough money from your, excuse me, to make enough money from your real estate to cover those expenses. And once this is accomplished, you know, you can effectively retire from the kind of work that you don't want to do.

You know, as long as you manage your properties, you manage the maintenance on your properties, and you manage the tenants of those properties. As long as you do that, you can essentially stop working and stop doing the work that you don't want to do. And we cover that in great detail in the last episode of how to do that efficiently. So it doesn't soak up a bunch of your time. So if you miss that, go back there. All right, on your long-term goals, you know, you may also want to consider financial goals beyond your immediate monthly bills. Okay? So we've got your immediate monthly bills and then we've got your dream life where, you know, you are living the dream.

But what else? What expands beyond you? You know, do your kids have, do they want to go to college or maybe your grandkids, do they want to go to college? Is there anyone in your family who has, say, a member? medical condition that will require some major bills. How about charities? You know, are there charitable organizations and schools or causes that you'd like to help support?

You know, sometimes it's very inspiring to set goals that go beyond your own, beyond you, and beyond your lifetime even, and forging ahead and planning for a better future for others. I mean, if you think about it, you'll probably come up with some big dreams that will really light a fire under you and get you going. Maybe that's the connection that you need. Maybe that's something that you really need to think about. Because, you know, real estate is a vehicle.

And I, you know, me, I got a podcast on real estate. So I think it's the best vehicle to create a real legacy. I mean, to really make a difference. I mean, that's not a dream. That's real. That's what real estate can do for you. And it's done it for so many people before. And I just don't know of another approach out there where, you know, just the average, everyday person has a shot.

Like, truly making a difference in a big impact on this world. that lasts long after they're not here anymore. So I want you to look at that. I want you to look at those long-term goals as well. And your progress along your goals, it should be charted on a regular basis, keeping a realistic understanding of how you are doing from day to day. And there are many ways to chart your progress

as you continue on your journey as a real estate investor. So it's a matter of finding a way that's really just going to work for you and keep you informed and most importantly keeping you motivated. you stay on the path. And measuring your progress is a great way to stay motivated, especially when you see yourself moving closer and closer, it becomes more and more real. Your belief goes up, up, up,

and you'll see your results start to snowball, and they'll start to get bigger and start to get faster. So it's really important to chart your progress. You know, many people really respond well to visual representations incorporating charts and graphs that depict monthly income and properties or maps of investment areas or other factors that can affect the investment game, whatever your game is.

You know, if you have a chart on a wall or a map on a wall and you put a little pin on top or the location of every property that you own and that starts growing, like, that could be kind of cool to look at every day. So those are just some ideas, but you figure out how you want to do that and chart your progress

and check in with it daily, or not daily, but regularly. And it's good to ask, you know, questions of your team, team also to help you along with your progress and other experts. But it's also important that you, you know, you have a little Q&A session with yourself once in a while too. Revisit your goals, revisit your strategies and your progress to make sure that, you know, things are progressing the way that you want them to. Then, of course, you should also connect with your team and your network, you know, your property managers, your attorney or attorneys, your lenders, your private

investors, your accountant, CPA for sure. And anyone else who has joined your team along the way, You know, they're likely to all have some kind of new information, and they get this information on a regular basis, especially your lenders, especially your attorneys, especially your CPAs. Find out as much as you can about market trends and changes in neighborhoods and property values and tax strategies and investment opportunities and mortgage programs and anything else that may contribute to your success. You know, one little shift in the law could alter your whole approach to building your dream for the good or the bad.

So stay up to date. check in regularly with what's going on, check in with your, your professionals that you've hired, the people on your team, and see what's going on in their industry of how that's going to impact you in your business. And, you know, this type of information,

it's just going to help you stay on track. And to make necessary adjustments, it's going to help you stay the course, and it's just, you got to do it. Okay, this is your business. This is your life. Okay, no one cares about this more than you do. Okay, so try to do this on a regular basis,

perhaps annually or semi, annually and to ensure that, you know, you're just working in the right direction. And then once you've gone through this process once, you know, I walked you all the way through the whole process of getting that first income property. Once you've gone through that once, you know, it's pretty easy to replicate that process over and over again, expanding your investments and developing your wealth. And we're going to cover a little bit of that right now. You know, as you get more practice, you'll hone your skills and you'll become a more and more seasoned, experienced investor learning. And you'll be along the way, you're going to be learning

many aspects of the business. That's how this gets easier. Real estate doesn't necessarily get easier. It's that you are getting better. Make sense? And as you get better and you get more experience under your belt, you know, your goals, they may evolve over time. And that's okay, just as long as you actually have goals

and you do actually keep growing and learning. And speaking of which, as you continue on your journey towards success as a real estate investor, you're going to begin to develop an impressive of real estate portfolio of multiple properties. Okay. And I want you to just, we've heard this many times before by many different people, you know, success leaves clues. So learn what you can from those who have succeeded in the ways that you want to succeed.

Success, it also tends, like I mentioned earlier, it snowballs. The more properties you own, the more that you can acquire. And the more tenants you have, the more tenants you'll get as the word gets around. And if you're careful and you're diligent and resourceful, you'll probably find that your investment successful will gain momentum. Just, it'll come quickly and steadily. It gets, it gets, no, I was going to say it gets easier again, but it doesn't get easier. You're getting better.

It's going to feel like it's easier, but you're getting better. And the first deal, just understand that the first deal is typically the most difficult. But once you're over that hurdle, the second one does come much easier to you. So keep that in mind if you haven't done a deal yet. Know that just on the other side of that first transaction, it does start to get easier. And it gets easier because you are acquiring new skills, new experience, new information, meaning you are getting better. That's how it gets easier.

So always keep your eyes open. Here's another good tip. Always keep your eye open for new opportunities. Stay open. Don't be one of these tunnel visioned people out there that only knows one way to do things or only wants to do it in one area or in one method or one strategy. one way with one team, whatever it may be. Keep your eyes open for new opportunities. The financial world, it's changing all the time. In fact, the world in general is changing all the time. And we know

that this world is changing fast. I mean, gosh, all you have to do is watch the news right now. And I try to stay away from that as much as possible. But things are changing. Left and right. Things are really changing. And, you know, I'm not going to get into politics, but, you know, our current people that we have in charge right now of this country, they're changing things. And They're changing things in a big way that can really impact your investments, can impact your finances. So you want to stay on top of that. And, you know, these changes, they can be a bit scary for some people.

But they can also be exciting and profitable if you have the right attitude and the right information. You know, I love the way Robert Kiyosaki constantly says or puts it in the sense that it doesn't matter when there's always going to be, anytime they put a rule in place, the government or any type of regulation or whatever, you know, it's anytime they put something in place, it's to benefit somebody, right? There's definitely a benefit in there for somebody. It's not to punish everybody. Someone's getting a benefit out of that new law or guideline or policy that goes into place. So all you have to do is align yourself with that person and do what that person's doing

so you can benefit from it. So it might be bad news or scary to what you're doing right now, but that creates an opportunity for you look at, okay, so who's benefiting from this and how can I be that person or how can I align myself or my business or my finances and benefit in the way that they are. Okay, so there's a lot of laws, a lot of guidelines and policies that have come into play, you know, recently some adding additional hoops to jump through for real estate investors and the industry as a whole, really, and I wouldn't be as surprised if there are more to come.

So you got to stay open. And like I said, don't let that scare you. Don't be scared away from your dream because of change. Look at every change as an opportunity to ask this question. Where is the opportunity in this change? Where is the opportunity in this change? Ask yourself the right questions, and your brain's going to deliver the right answers.

And that question in particular can take you very far with regard to separating yourself from your competitors. And maybe not your competitors, but from the people that don't ask themselves that question, the people that get scared and crawl into the corner in the fetal position, and either, you know, wither away or they go pursue something else, okay? Don't be that person.

Look for the opportunity in every single change that comes your way because change, it's coming. It's always coming. That's the one thing you can always count on is change. So to be creative and flexible in your approach to investing, I want you to, I want that to be a constant focus for you. Always look to your brain before your wallet. Okay? Always look to your brain before your wallet.

look to spend that intellectual currency before your actual currency, meaning your cash. Use your brain. Exhaust your resources and tap into your network and look at all options before writing checks. Money is very rarely, if it's ever, the issue in any sort of challenge you may be experiencing. It's never a money issue. More times than not, I'm going to go ahead and say it's always an idea. issue. It's not a money issue. It's always an idea issue. Okay. So be creative, be flexible. Be creative in generating income from your rental property as well. You know, it's better to

get started with some kind of rental income than not to bring in any at all. But, you know, I spoke a few episodes back about owner occupied purchases, which can be, you know, a great way to get started. You purchase the home as a resident and then move out and rent the property when the required occupancy occupancy time is up. You know, the situation, it usually makes it easier to acquire the property. And then you get low mortgage rates. You get a smaller down payment. You build some equity.

And you got some time to make some repairs and upgrades. And then you have that option to go do it all over again. And you can kind of just leapfrog your way that way. Okay. Another option to help you get started is to bring in one or more, say, roommates as formal renters or get someone to rent your room when you're traveling. You know, these are great ways to make some. some extra cash, get some property management experience, and get started on your career as a real

estate investor. As a matter of fact, you don't even have to rent living space. You know, you could rent storage space for cars. You could rent equipment or boats or recreational vehicles, personal items, or anything else that people will pay to store. Okay. And of these, you know, situations, they could really start your cash flow right and help you move towards your financial freedom. So be creative. Okay. It's creative. It's not necessarily. common knowledge right now or maybe i guess it's becoming more and more common but you may be able to use your 401k or your IRA to help you acquire properties you know the IRS has a provision that states that you can use your tax deferred retirement funds to acquire investment properties did you know that

you probably did because you're here on a real estate podcast you've probably heard that before i'm sure but if you haven't you need to take notice because you can this is covered in section 408 of the the IRS code declaring that you can purchase a variety of different investment properties with a range of IRAs and 401Ks, Roth IRAs, simplified employee pension plans, traditional IRAs, all that stuff. You got more control over your money than you realize. And you can also use your IRA in conjunction with partners in order to acquire a property if your IRA is not sufficient to cover it.

Okay, so your IRA can actually act as its own entity and partner with other people. And, you know, many of the units that I own are in a association with or partnered with other people's retirement plans. And there are various rules and stipulations to be aware of, but this option may be worth looking into if you think it could help you. You know, most retirement investments have a pretty low rate of return, right? But this option has the potential to, you know, bring you better cash flow and other benefits inside there.

You know, my partners are receiving anywhere from six to 10% returns inside their plans. That's far and away better than what people are receiving in their retirement plan. that aren't taking control of it and aren't directing it and that they're let meaning they're letting somebody else direct it for them okay so it's not difficult to to get double-digit returns on your rental properties of which you could easily pay someone's retirement plan six eight 10 percent right if there's someone if you partner with somebody you could pay that into their account to help you build your portfolio and it'd be easy to pay that because you can you know through creative structuring that we talk about here you could get a return of 20 percent 30 percent 40

So if you're getting, say, 20% on your property, no big deal to pay 8% on the money. You've got that spread there. You got 12% profit for you, right? And because you can do that, because you know how to do that, that is a great place to find the money, people's retirement plans. And it can be a rather easy place to find the money as well when you can convey to them, you know, how much more you can give them than where they're currently invested. Okay.

So a bit of, also a bit of creative strategizing can help you take. make the best of your financial situation, really no matter what is going on at the time. So, you know, with some careful planning and maybe a bit of advice from your team of professionals, you may be able to figure out a number of ways to turn your expenses into long-term advantages. Housing is always needed by someone. So you can have, I mean, you always have a built-in market. Now, if you're investing in air, water, food, or shelter, you've got a built-in market. We need those things.

And that's another great aspect of real estate is people need it. So if you have a friend or a relative who needs a place to stay, you may be able to turn this into an investment opportunity, especially if you're taking responsibility for their expenses, a family member or something like that. In cases where you'll be covering housing costs for, say, your child in college, you can buy a rental property and have your son or daughter live there with friends who will pay rent and contribute to your mortgage payments.

After the college years are done, you know, you'll have various options because you'll have this property. Like you can get new tenants, rent it to a whole new, clock of college students or you can continue or just put out on the open market or even maybe even sell the house for a profit. So if you have friends or family who are looking for a place to live, you might set them up in one of your rental properties at a discounted rental rate in exchange, save for them, taking care of the property you're doing repairs or upgrades. If you have a serious fixer up or you might let a handy friend stay there for free for a while in exchange for fixing it up and getting it ready for tenants. I mean, you can make a game of this, really,

considering as many creative possibilities are possible. I mean, you're really only limited by your brain. So I'm saying you've got to look at your brain before your wallet. Other ways to get creative when it comes to increasing the size of your portfolio, when it comes to acquiring new properties. One of the most reliable ways to acquire new properties is to leverage the ones you already own. Okay? There are various ways to do this.

So it's best to investigate your options and apply a strategy that works best with your situation. you may be able to apply your equity from, say, one property to help you buy another property. Or other methods may be better. But generally speaking, the more properties you own, the more properties you'll be able to get. So you could access the equity in the home by refinancing it, or you could access the equity in the home by selling it outright. But then again, that would mean sacrificing the cash flow from the property. However, though, maybe you could take that equity or the proceeds from

actually selling a house outright and purchase another house that produced a higher return. Just another way to look at it. You know, most lenders, if you choose the financing route, they're going to require that you still have 30% in the property when you refinance it. So you'll need to have a pretty large amount of equity built up. And this is yet just another case where you'll need to talk with your team to check out your options. But it's good to know that it's an available strategy.

Okay. Now, if taking out a line of credit on one of your properties is not the best choice for you or it's not a choice for you, there are other options for gaining greater cash flow. You may be able to repurpose the property to get more out of it. You might be able to use the property for a different purpose other than the one you originally bought it for. If you can convert, say, a single family property to a multifamily property, you've effectively added a property to your portfolio, right?

So depending on the building, you may be able to divide it into a duplex, or you may be able to add rooms, or you may be able to build upward, like adding levels, stories to the property or make other changes that it's going to expand the property's cash flow potential. If you have enough land, you may be able to build new rooms or even structures. You can even rent the rooms in a property as separate units with shared living space. Okay. If you find a really good deal on a large plot of land, you may want to subdivide it, breaking it down into sections and selling or leasing those sections of the land. That's another great strategy. I mean, when you do that, you've effectively,

expanded your properties by buying a large lot and sectioning it into more marketable pieces. And maybe you could build on each one of those lots. And now, you know, you've got that. Or maybe you have two, this is another way. You've got two properties on a lot. You can divide that lot and essentially create that two separate entities. And that right there will increase the value of your properties. So in many cases, what's another way?

Commercial properties is more, in many ways that that's more. more valuable than residential property. So, I mean, you've got other game to play. It's a whole other conversation because you'll be, you know, you'll be limited by zoning restrictions, but it may be possible to add value to your property by converting it to commercial use, right? It's certainly an option that's worth checking into.

Now, there is another little known option that comes in really handy when you're looking to expand your real estate business, the 1031 exchange. Under the United States tax code, you may be able to sell us. a property and effectively exchange it with another property without having to pay federal income taxes for that transaction. And this basically means that you can sell a property and buy a more lucrative investment

property without having to pay taxes on the sale. You know, the general concept behind that 1031 exchange is that it's only paper gain, you know, kind of like a paper investment, like a rise in the value of your stock portfolio. It's not tax until you actually sell it and effectively cash out. So with the 1031 exchange, there are stipulations, including a pretty small window of time in which the exchange has to take place. You know, the penalties for exchanges that violate the rules can, they can be pretty brutal. So you need to be extremely careful with this process involving the service of an expert on that particular subject. And, you know, if you're trading from one investment property to another, you might be able to benefit from this option.

You know, upgrading from a single family home to a duplex, a duplex to an office building. you know, just keep on going up, maybe an eight unit to a 20 unit, whatever it may be. Because of the added restrictions and stiff penalties, though, for noncompliance, it's really worth it to locate an expert who has extensive experience dealing with this specific strategy. Probably be a good idea for me to have a 1031 exchange expert on the show in a near future. Now, of all those strategies, I just went through a bunch of different stuff really quickly, and we've discussed the details on a bunch of that stuff in the past, and we'll continue to do so in the future.

but the point I really wanted you to get from this, the reason I went through all of that and just in a very general conversation is that I just want you to understand that you have options, more options than most are aware of. And of all those options I gave you, those were individual options.

Well, with your creativity, what if you're to start combining options? That's how I came over these 12 strategies in the Epic Pro Academies. I just started combining different strategies that I was learning and getting really creative and putting deals together that way.

So you have options, the more options, you know, than most people are aware of. And the reason why this is important to understand is anytime you hit a roadblock in building your dream, you can say to yourself, you're going to look at roadblocks very differently from this point forward. You're like, huh, that was interesting. This roadblock here, I thought that was going to work, but it doesn't look like it's going to. Oh, well, no worries. What other option do I have? What other option might work? because you have so many in real estate investing.

You have so many in building your dream. And I want you to just understand that you have options from this point moving forward. And that's what it takes. Having control of those options is that's what it takes to continue building your portfolio, to build your dream. And hopefully by now, you can see that, you know, this isn't a dream at all. It's not a dream in the space of that could never. happened to me.

Right? It's not that kind of dream anymore, but rather, huh, this shit is possible. I can do this, right? Of course you can. Yes, you can do this. You just have to know how. And that's why we're here.

And I just want you to know that the options are, they're only limited by the creativity that you apply to your investing. That's why I always say, look to your brain before your wallet. Use your intellectual currency before you use your actual currency. Because it's never a money problem. It's just always an idea problem. problem. Got it? I'm excited for you. So I'm going to close this out by giving you seven places of which to never forget, seven things to never forget as you move forward as a real estate

investor from this day forward. From the moment you're hearing my voice right now, you never want to lose sight of these seven things when it comes to building your dream. First, cash flow. Okay. Always focus on developing cash flow if you really want long term financial freedom. If you really want to live that dream. I mean, there are times absolutely, and we teach this here too, because there are times when you may need to get short-term cash through, say, wholesaling or a fix-and-flip. But the real goal should always be to hold onto investment properties for their ongoing passive income potential.

You know, I'd share that with you right at the top of the year. This should be a new focus for 2014. Every deal you get, every lead you get, every property you cross. Make it your intention to hold on to it. Don't have to, but I want you to look there first. If you really want the dream, if you really want financial freedom, you have to look there first. It has to be your intention. You know, bills don't just come one at a time.

So you need your money to come more than one at a time as well to match those bills. You need to make sure that your income keeps growing, that your cash keeps flowing in. Okay, so that's number one. Number two, leverage. Always keep leverage at top of mind. I mean, the fastest path to escaping the financial rat race is to apply leverage in every way possible. Keep your mind on the best ways to maximize your efficiency by leveraging your time, leveraging your money, and the people within your network. Okay.

Number three, relationships. Constantly create and nurture relationships. You know, every business, it's a people business. and real estate, no exception. So a good investor develops good networks of people who are smart, ethical, and motivated to helping each other out. They're about, what they call it, the cooperation economy. They cooperate with each other. So good relationships, they require mutual benefit.

So don't try to just take all the time. They require give and take, which means that you should always show appreciation to the people in your circle. help them achieve their goals and they're going to help you achieve your goals. Help them to the best of your ability and they're going to return that favor. So that's number three. Number four, contribute to others closely related to how we treat our relationships, right? As with your business network, it's good to give back to others as well. Whether you call it, you know, karma or goodwill, the law of attraction or simply just giving back.

You don't have to put a title on it. Just call it for what it is. Giving back. You know, your contribution to others, they're going to crown your success. and on a psychological level, giving back to your community, your church, your family, it's going to help you to keep up your energy,

it's going to keep up your enthusiasm, it's going to make you feel good about what you do. But on, and then even on a more mundane level, it's good business to develop a reputation as a philanthropist. That's just good for business. I mean, the more you give, the more you get. And I've never been disappointed by the act of contributing to others. So that's another thing I don't want you lose your focus on.

Next, think like an investor. Okay. that's the first stage of the millionaire real estate investors to think like an investor. And the reason that's the first stage is because you have to maintain thinking like an investor through the other three stages if you ever expect to get there.

If you ever expect to receive that million dollars a year of cash flow, if you ever expect to live that dream, if you ever expect financial freedom. I mean, there is a really big difference between an investor and a speculator. If you apply mere speculation, you're basically just, you're trying to predict the future. And I don't know, if you got a crystal ball, knock yourself out. But I don't know

anybody that does. So what that does is you're just getting into very risky territory when you try to speculate, when you try to make predictions. When you get, you get buying into a market because you think it's going to appreciate. Okay. Think and act like an educated investor. You know, sticking to your system, that's why we're sticking to your minimum deal standards, acting on reliable information, that's thinking like an investor. Being creative. where so many of the things that we covered in this episode today, that's thinking like an investor. And part of the thinking like an investor,

it's a big part of thinking like an investor is remembering that your job is to make a profit. Your job is to buy low, sell high. Your job is to solve problems. And the better you get at solving problems, the more profit you're going to make. But that's your focus. That's just the definition of an investor

is to make a profit. And those who have some type of ethical problem with the idea of making a profit with the making money, you're not going to thrive in any investment business. So go find something else to do if you've got some ethical conflicts for some reason. I don't know why you would, but I know I've met people that do. Yet to understand it. So just keep in mind that you can make a profit without sacrificing your ethics. You can make a profit without sacrificing your morality.

You can make a profit without upsetting God, okay? I promise you. It is possible to create win-win situations in which everybody in the process gets what they want. Absolutely. Apply logic. I want you to never take your eye off of this either. And what I'm talking about that is it's crucial that you act on logic without letting emotions cloud your judgment and your decision-making. Focus on the numbers.

Focus on the facts. Keep your perspective, close. clear by focusing on the facts. You know, emotional force is absolutely necessary in the process of success when it, you know, it comes to your drive, it comes to your motivation, comes to your perseverance, your persistence, right? Logic devoid of emotion amounts to just kind of bunch of empty facts and figures and there's no reason to take action.

So you need both. However, emotion without logic leads to irrational action and chaos and failure. So you need a good balance of them both. You know, your dreams are fueled by emotion, but they're directed by your logic. Got it? Your dreams are fueled by emotion and your direction is fueled by logic. In other words, emotion is what keeps us going, but logic is what steers us in the right direction. And lastly, always be a learner.

Be open. Always an investment in your education. Always take every experience as education. Don't make the same mistake twice. apply what you learn in this transaction to the next transaction. You know, the most successful people in the world are tireless seekers of knowledge. Read, listen to podcasts, listen to other podcasts too. Attend seminars, attend workshops, and don't be afraid to pay for education,

especially in real estate because we can make that education investment back so quickly with just one transaction. It's one of the beautiful benefits of real estate is that we make such good money when we do it, right? might as well learn how to do it right. And it's important to always learn everything that you can about your business, regardless of your business. But we got an advantage here in real estate because we make a lot of money when we do it right. But you want to always make that investment in learning because things can change over time. They often do.

Industries evolve. Market shift. Technology develops and regulations. They get tweaked. And all of this adds up to a dynamic environment that requires constant monitoring and adaptation. You got adapt, improvise, overcome, okay? And you do that through really, through being consistent with your education.

I mean, stagnation, that's the worst thing that can happen to a business or an investor. So seek growth all the time, seek new information all the time, the type of growth and information that you can apply to gain every edge possible. All right? You're going to create your own unfair advantage

by constantly making an investment into your education. So that's it. for today. And I will see you next week with a brand new episode, a brand new episode every day of the week starting on Monday. I'll be interviewing your own epic community members as they share with you what's working for them in today's market. I can't wait. 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 enjoyed the show, please take a 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.