Epic Real Estate Investing - EPREI 015 : Your Real Estate Investing Burning Questions

Episode Date: October 17, 2011

You asked for it, you got it! Matt answers your most burning real estate investing questions. Learn more about your ad choices. Visit megaphone.fm/adchoices

Epic Real Estate Investing Podcast, episode 15. You're about to meet a man that can show you how he took control of his life and financial future and how you can do the same. He's never been on TV. He's not a millionaire, and he does not know Donald Trump. He is a full-time real estate investor, newly discovered author, and family man. He does not report to a boss. He creates his own schedule and takes his family on a few vacations every year.

He got started investing in real estate with almost no money in a really crummy credit score. And he's going to show you exactly how he did it and how he continues to do it. You will have to work. You will have to be responsible. However, laying by the beach sipping fruity drinks is a reasonable goal without further delay. Your guru. Sorry. Your guide to a better life through real estate investing. Matt Terrio.

Hello and greetings from the epic real estate investing podcast. The podcast that will show you how to create wealth through conventional and creative real estate investing, so you'll have the option to realistically retire in the next 10 years or less. And enjoy the good life while you're still young enough to do so. I mean, that's really what life's all about, isn't it? My name is Matt Terrio. author, full-time real estate investor and family man. If this is your first time listening to this show, welcome.

You're going to want to do two things. First, you're going to want to go back and listen to episode one to get the gist of what this show is about and why it's here. I mean, everything that we discussed from this point forward is just going to make so much more sense to you if you do that. And two, I want you to download the free real estate investing course. How to Do Deals, No Money Required, and you can get that at free real estate investing course.com. It's a step-by-step course of which I reveal everything that I do. do, everything that I say, everything that I use, including all the documents and the contracts

to invest in real estate using no money or credit. And that's yours for free at free real estate investing course.com. Okay. So over the past 30 days or so, I've been sending out a survey to my email list and to my podcast list regarding their most burning questions about real estate investing. And the response is really, it's been fantastic. So thank you for your input. And if you missed the survey and you have a burning question or two or maybe three, you can send me an email to Matt at Epicprofessionals.com. Matt at Epicprofessionals.com. And I'll do my very best to answer all of your questions. And having said that, I don't know at all. That's for sure. So what I'm going to be doing is I'm going to be bringing a bunch of guests over the next two months or so to help me answer

all of your questions, as well as give you different perspectives on your questions. I mean, I can certainly answer most of your questions from my perspective, but that doesn't necessarily mean it's going to be the right answer for you or the best answer for you. And most of the time, I mean, there just isn't one right answer. The actual answer to just about any question in real estate always starts with, it depends. And what I mean by that is there are just so many variables in real estate investing and so many different approaches to achieving success. And a lot of them will work as long as you just stick to that one approach.

And depending on the approach is going to influence the answer to a lot of your questions. You know, the place that I see a lot of people experience a lot of frustration is that they choose one approach. They go give it a try and they discover that this involves a little bit of work, a little bit of effort, and to experience a little bit of failure, and there's a learning curve, and there's a learning curve, and there's a learning curve, and there's a learning curve, and there's a learning curve, and there's a little bit of failure and frustration. And so they decide that that doesn't work, and they go try another, and they experience the exact same thing. Then they try another, and the exact same thing, they try another, and oh, this involves work too. This involves a little bit of a learning curve. This involves a little getting started, period. They never stick with one approach long enough to get good at it and experience the good results.

And as we discussed on a couple of episodes ago, every approach involves three characteristics. You have to do the right things. You have to do them consistently. And you have to do them long enough. And you can't do them long enough if you're hopping from approach to approach to approach. You're never going to get away from that. Every approach has that. You've got to do the right things.

Got to do it consistently, and you've got to do it long enough. So I'm excited to answer all of your questions, and I promise to do that over the next 30 to 45. It might take me 60 days, but I'm going to do it as efficiently and as quickly and as thoroughly as I possibly can for you. And I'll have multiple guests on the show

to help me answer those questions. Now, what I wanted to get started with today is a certain group of questions. A lot of you had questions specifically for me. and today I'd like to answer those questions because there were really some great ones in there. And by the way, some of you had asked me some questions as if you were sending me an email and wanted me to respond directly. But the nature of the survey was that it was anonymous. So I have no idea who asked what.

So if you asked me a question like that and you're awaiting a response, please send me an email directly to mat at epicprofessionals.com so I can answer that for you. So question number one, if you could start over again, What is the first thing that you would do? That's a great question. And I actually had to think about it for a minute, but I know exactly what I would do. First, I would set up the lead generation systems that I currently have in place right now.

And I'd set those up right away. A real estate investor without leads is just not in business. It all starts with leads, and it starts with a lot of leads. The quality of the leads is in the quantity of the leads. You need a lot of leads to be successful in this business, especially in the beginning, to even call it a business.

And those three primary lead generating sources that I would put into action, they would be first. I'd start attending networking groups and real estate investing clubs. I'd start attending those as soon as possible. Because in hindsight, I've come to notice that the majority of my leads come from my personal relationships and the network that I've built. I wish I would have been a little bit more proactive about that in the beginning. That would be the first thing.

The second thing is I would implement a massive yellow letter campaign. Now, I haven't used the yellow letter very long in my business, only about, I don't know, a few months, maybe about six months now. And I've found that that yellow letter is almost just as powerful as my network. I received probably 10 calls a day right now because of my yellow letter campaign. And I'm averaging, I would say two deals, maybe one and a half deals per month just from the yellow letters. And I send out a lot of those letters because I understand that I got to do the right thing. I've got to send them out.

I got to do it consistently, and I got to do it long enough. And because I do send those out consistently, my phone rings consistently. And in a very short period of time, I'm doing deals consistently just from those yellow letters. So that's the second thing I would do. And the third thing is, I would set up my internet presence. I would set up my buyer's landing pages and my seller's landing pages, my squeeze pages. And then I would hire a VA, just as I've recently done, to post ads on the online classified sites, like the Craigslist and the back page and the Kijiji and the Oodle.com, I'd hire that VA, as I've done,

to set that up or to post those ads every single day. That's probably my third biggest source of leads right now. And with just those three, I've got more leads than I can get back to. So networking events, I would start building my database ASAP, building those relationships. Second, I would implement a massive yellow letter campaign. And third, I would launch my squeeze pages, my landing pages, create this giant internet presence, and then hire a VA just to place the online classified ads for me, and I'd have them place them every single day, at least Monday through Friday. Great question. Okay, question number two.

What are your top 10 ways to grow your network of buyers? Well, I can't really answer that question because I don't have 10 ways. And the answer to this question will be very similar to the answer of the first question. My top way, my number one way to build a strong buyer's list, is to meet buyers face-to-face. Now, it's not the most efficient, but it is the most effective. You see, when you meet face to face, just that likeability is conveyed, the trust is conveyed much more thoroughly, and the competence is conveyed much more thoroughly. So I'd start filling up my calendar with networking events, with real estate investment club

meetings, with real estate investing seminars, wherever I could get in reach or in communication with other real estate investors, with other like-minded people, and I'd start collecting business cards and bring those cards home. then I'd sort them. Are this person serious? Was he curious? Was he just getting started? Has he been doing this for a while?

And I'd input them into a database and sort them in that fashion. And then create a schedule for regular contact. Do I want to meet this person every single month for coffee or every other month for lunch or maybe twice a year to just catch up or just a phone call, whatever it may be? And I would maintain consistent communication. I would work on building those relationships. And that's what I'm doing a lot more of right now. And because I am, I'm doing a lot more deals right now. And I use a database program called epicdadabase.com.

Epicdatabase.com. And it does that very easily for me. I can sort my leads and I can set up a contact schedule. The second way to grow my network with buyers would be through the internet. I mean, 90% of all buyers start their search online. So if 90% of the buyers are there, I mean, that's where the pond is with all of the fish. I'd want to go fish there. And I fish for those buyers in the very same.

way that I mentioned in answer one, through landing pages and squeeze pages. And then I link those pages from online classified ads of which I advertise property for sale, I advertise cheap property, I advertise discount property, I advertise wholesale property. Those are the types of things that attract buyers to me. So those are my top two ways of creating a network of buyers. I don't have a third way. I don't really know of a third way as effective as those two. I'm sure there are some out there. I just haven't discovered them. and that's where I'd invest my time. More networking, more getting to know people, buyers face to face, and online.

Great question. Okay, next question. If you could start over again, what's the one mistake you would avoid? Okay, another great question. And it didn't take me as long to figure out what my answer would be for this question. And I alluded to this in the introduction. I wouldn't have tried my hand at so many different approaches to real estate investing in the beginning. I would have investigated each approach a little bit more and then just picked one.

and then I would have mastered it. And then I wish I wasn't so timid when I got started. I wish I would have taken bolder action. Because, you know, after you do that first deal, you recognize that there was really no reason to be timid. There was nothing to be scared of. And by being so timid in the beginning, I really unnecessarily delayed my success.

So I'd focus on one acquisition strategy, one approach, and go after it with bold action. Great question. Next question. I hear many times over that I am the same. some of the people I associate with. Is this correct? You know, that's actually a very, I don't know, difficult thing to gauge. And I think what you actually meant by that, though, was you are the average of the people that you associate with. I mean, if you were the sum of the people, you'd be

bigger, better, faster, and stronger than everybody that you know. I think you meant the average. And, you know, it's been said by many personal development gurus that if you take the five people that you hang around the most and average their income, your income is going to be anywhere from five to 10% of that average number. And it's also been said to be true about the character of the five people you hang around the most. Now, in my experience, I don't know what the actual number is, but I do see a lot of truth in that statement.

For example, I mean, if you went to a bar, well, I actually did this. I noticed this about a year ago. I went to a bar to watch a Monday night football game. And I noticed a group of guys at one table, looking like they might have been blue-collar workers. They just got off work and they had their work uniforms on. and I noticed another table filled with guys that looked more of a corporate nature, more of your white collar type workers. And I noticed something. They had a ton in common. First, they each got

together with the guys on a Monday night to watch football. They had that in common. They were both loud and obnoxious and rooting for their team. They were both drinking beer by the pitcher. And they're both whistling and gawking at the waitresses. But I know during the day, the conversations that would take place in those circles would be very different. The next thing, the next thing, network would be very different. The opportunities available to those individuals would be very different. The help and the resources available would be very different. And it doesn't really make one good and one bad. It's just that they're different. You know, one of the most efficient ways for you to change your situation is to change your environment. And that would include the people that you

associate with. That would include the places that you go. That would include the type of TV that you watch. It would include the type of books and magazines that you read. I mean, that old movie, Trading Places, a great movie, one of my favorites, with Eddie Murphy and Dan Aykroy. It was very much an experiment on what had the most influence on a person's outcome on their results. Was it their environment or was it their genes? And if you saw the movie, you know which one it was that one. It was the environment. I mean, Eddie Murphy, who was the homeless thief on the street,

became the successful clean-cut businessman when his environment was changed. And Dan Aykroyd, who had the good genes, who had the whole world at his fingertips, was very rich and successful, but he became the homeless begging drug addict when his environment was changed. They traded places because they traded environments. Now, I know that was just a movie. It's Hollywood, right? But I don't think it was really too far from real life. I mean, it was an extreme example, but there's a whole lot of truth sewn into that.

I hope that answers your question. And by answering your question, I hope you don't walk away from it thinking that you have to go get rid of all of your current friends. I'm not suggesting that at all. But what I am suggesting is that you might want to start networking with people that you want to be like. You might want to start investing with other real estate investors. successful real estate investors. Because when you do, it will have an impact on your results. It certainly had an impact on my results right in the beginning and right away.

I mean, you're just open to new conversations. You discover new opportunities. You have new resources and you have new help and assistance at your fingertips within your network. So add a few successful real estate investors to your network and see what happens. I'm pretty sure you're going to get some good results and you're probably going to notice them fairly quickly. Next question. Aside from wholesaling, what does you? your next favorite strategy? Well, you know, I wouldn't consider wholesaling my favorite strategy.

Buy and hold is actually my favorite strategy. And that's really an exit strategy, by the way. I mean, you need to have an acquisition strategy and you need to have an exit strategy. Wholesaling, although you could acquire property through wholesalers, it's typically an exit strategy. The profit is really in using it as an exit strategy. And holding, that's an exit strategy as well. My goal is to create a million dollars a year of passive income, and I've got to hold those assets to make that happen. My preferred acquisition strategy is to deal directly with motivated sellers and distressed sellers. And whether those are the sellers are distressed or the properties are distressed doesn't matter, but that's where I'm going to find the best deals.

And that's actually where I enjoy what I do the most. So buy and hold is my favorite exit strategy. I mean, holding is my exit strategy. Now, I do a lot of wholesale and I do a lot of flipping to create the cash. so I can buy and hold more property. Hopefully that makes sense. What I don't like, I don't like anything that has to do with banks. I don't like short sales, although I do a lot of those, and I've been successful with those

over the last few years. I don't like them. And I don't like REOs, real estate owned, and I don't like foreclosure auctions. And all of those strategies, you have to deal with the bank. And I don't like them for a couple reasons. I don't like them, first of all, because you typically have to have cash on hand to conduct those transactions. and I like to invest using none of my own cash, none of my own credit.

Second, I like to deal with people that need to sell. That's where you're going to find your best deals. In these days, dealing with a lot of short sales and a lot of REOs, I'm finding these days that banks don't need to sell. They want to sell, but they don't need to sell. Good question. Next question. Actually, it's not really a question.

It's a statement. It says, I want to thank you for your series of podcasts. I'm finding the information you're providing is great for other forms of making money, not just real estate. I find myself going back to listen to them over and over. Thank you for your hard work. Now, although this isn't a question, I wanted to draw your attention to something. In this statement, it says,

I'm finding the information you're providing is great for other forms of making money, not just real estate. This person is absolutely correct. You see, when you're going out to make money, when you're going out to conduct business, you've got to go out there and you've got to find the deal. And then you have to analyze it to determine whether it is a deal. So you know the difference between a good deal and a bad deal and a great deal and a terrible deal.

You've got to know how to analyze deals. And then you've got to make a presentation. And then you've got to make an offer. And then you've got to close the deal. That's pretty much the way it is in all business. In fact, it is the way it is in all business. Anything where money is transacted. And further, what makes real estate really such a great training ground for business is that you have to master these four phases.

And what makes real estate such a great training ground is you'll be dealing with lots of people. It's a great place to sharpen your people skills. And from this point forward, whenever you buy or you sell, whether it's real estate or the widget of the day or the service of the day, it's going to be to or from another person. So if you're a really good businessman already, you're probably going to be a good real estate investor. And if you're not a good businessman, real estate investing will make you one. Glad that you noticed that. Thank you for pointing that out. It was a great question or a great comment.

Next question. What is the most strategic way to invest in today's market in the state of California? Okay, I'm going to defer to the default answer. The answer is it depends. It depends on what your actual goal is. Remember, you've got to know what you want and you got to know why you want it. Because once you answer those two questions, that's going to dictate what is the most strategic way to invest in California.

I mean, are you looking to create quick cash? Are you looking to create long-term cash flow? Or are you looking to just buy and hold and maintain until the next, wave of California appreciation comes about. So it really does depend. I can't give you just one answer for that. But I'll tell you what my strategy is right now. I buy and sell houses here in Southern California. I flip them or I wholesale them. I do that in Los Angeles County and Orange County. And the reason I buy and sell in California is twofold. First, the property here is very expensive and it typically takes a decent chunk of money and credit to hold the property in California, both of which I don't have

access to on a regular basis. So I don't have much choice but to buy and sell here in California. The second reason is that you can create anywhere from $25 to $30, $35,000, $35,000, $50,000 on really simple and easy flips here in Southern California. So my strategy is to buy and sell here in California because you can make chunks of cash. You can make really good chunks. And then you can take those chunks, and you can buy property outright in other parts of the country where the return is much greater, where the cash flow return is much greater. And I really like the Midwest, and I like the South. That's where I'm buying and holding at the moment. The return is just much greater there on your dollar. I can take the profits I make from flips and wholesales here in Southern California

and buy a whole property, a whole house free and clear in the Midwest that cash flows from anywhere. I don't know. Depends on where it is, but could be $500, $600, $700, $800 a month. So that's my strategy to buy and sell here in Southern California and then buy and hold in the Midwest and the South. Now, having said that, my attention has been very much on buying and holding something in California. I've been looking for something. I just need the right opportunity where I can get creative and do that. And coincidentally, I was just able to do that actually this week for the very first time. Through my Yellow Letter campaign, God bless the Yellow Letter.

And I found the ideal situation. I found a seller that owns a property free and clear. She actually owns several properties, but this particular property, it's a troubled property for her. You see, she wants to get rid of it because the majority of her potential tenants in that neighborhood only speak Spanish, and she does not. She still wants the cash flow from the property,

but she's having a terrible time communicating with her tenants and her potential tenants. So I made her an offer of which would still allow her to cash flow from the property without all of the headaches from finding tenants for the property. I made a full price offer with her to carry back 100% of the financing. And that financing, I amortized that over 40 years with the balloon payment due in 10 years.

So I'm getting to take over this property with no money out of my pocket, with 100% seller financing. Oh, and I got a three-month moratorium on the payments. So I don't even have to make any payments for three months. Sweet deal, right? The reason this is a sweet deal for me, to do with my answer to your California strategy is I don't have a crystal ball. I don't know what's

coming, whether it's next year, five years, 10 years. I have no idea what's coming. But I'm pretty sure and I'm pretty confident that the real estate market is going to come back or start to come back within the next 10 years, within a 10 year period. So while I'm waiting for that to happen, I'll be cash flowing on that property. Now maybe the market can go down a little bit more. I don't really care. I'm still cash flowing. Or maybe it goes up again and crashes before that 10-year period. It doesn't really matter. I still cash flowed along the way. What's going to happen? I don't really know. But all I do know is I'm going to be cash flowing and making some money during that 10-year period while I wait for it to happen. I can't really lose. I've got no money in the game. So I buy and sell in California,

then I buy and hold in the Midwest, but I've always got my eyes and ears open for the right opportunity, for the right property that I can take over and hold with relative ease here in Southern California to wait for the next upswing in the real estate market. That's my strategy. So I hope that answers your question. Great question. Next question. What are the steps I should take in getting my first real estate investment deal going on here

in the state of California? Well, I think I've kind of answered that question with the combination of the answers of the previous questions. Unless you have a bunch of money to deal with and you have a great credit score, you're probably going to have to get very creative to acquire property here in California. and the one place that lends itself to creativity is dealing directly with distressed homeowners and motivated sellers themselves. And I'm starting to get in touch with a good amount of these types of sellers through my yellow

letter campaign. So to get started, I would suggest you get on top of that yellow letter campaign. If you want to do a deal in California, that's the quickest path I see to making that happen. That's what I would recommend. Get those yellow letters going. Great question. Next question. You were married with a new child.

How did you help your spouse become comfortable with you? investing. I'm having a hard time with her fear and helping her overcome it. Wow, that's a very common question. You know, through my coaching and my seminars, I actually experienced that question a lot. I get that question a lot. You know, either the wife gets it and the husband is ultra conservative and wants nothing to do with it or the husband is all about it, but the wife wants nothing to do with it. Fortunately, I'm blessed with a girl that also invests in real estate. So it's not an issue for me. Well, it's not an issue for me now because you see I've been married before and it was an issue then. So I'm probably not the best person to ask this question because I didn't complete a real estate

transaction during that relationship. I didn't complete one until that marriage actually ended. And that's certainly not going to be my answer to you is to get divorced and go pursue real estate on your own. What I have noticed that seems to be effective in breaking down some barriers between couples and eliminating some fear is to take your spouse with you to your real estate investing club meetings. Take your spouse to your real estate investing seminars. Take your spouse to watch the online webinars that you might watch,

to read the same books and to listen to the same audio programs that you do. Most of the time, one spouse is going to be completely ineffective in convincing the other that real estate investing or entrepreneurship is the right thing for them. Most of the time.

However, introducing a third source of information, a third party can accomplish that for you. You know, my opinion, it really just comes down to the relationship itself. You know, now having walked the earth for 42 years, gone through a couple of marriages, it does have more to do with the relationship and compatibility than it does real estate investing. I wish I had the magic answer for you because I get that question a lot. I would bottle of the answer to that question. I would sell it and I'd make a million if I had it.

I've answered it to the best that I can. Hopefully that helped. Last question. Is there any chance we can meet in person? I'd even be willing to drive to L.A. I live in the Bay Area. Because this was an anonymous survey, I have no idea who you are. That was one of the type of questions that I was referring to. And having said that, I love to meet people face to face. Especially people that are serious about improving themselves, especially with people that are interested in improving their situation and expanding their results, expanding their success. So if I have the time, I'd be more than happy to meet with as many of you that I can. And if you want to do that, if you happen to be in the area, you know, hit me up. Let's give it a shot. If our timing works out, we'll do it. If not, you know, maybe next time. Send me an email to Matt at Epic Professionals.com.

Matt at Epic Professionals.com. All righty. So that's it for today. Great questions. And until next time, as a very wise person once said, if you don't ask, you don't get. To your success, I'm Matt Terrio, living the dream. Thank you for spending this time with Matt Terrio and the Epic Real Estate. investing podcast.

When you have a moment, stop by iTunes to leave your comments and let us know what you think of the show. And if you haven't done so already, get started investing today by visiting free real estate investing course.com to access Matt's free course, how to do deals, no money required. Until next time. To your success. This podcast is a part of the C-Sword. Sweet Radio Network. For more top business podcasts, visit c-sweetradio.com.