Epic Real Estate Investing - EPREI 038 : That "One Thing" That Will Positively Impact Your Business

Episode Date: July 31, 2012

Time flies when you're having fun, and recently real estate investing has been a ton of for Matt. On this episode, Matt will share with you the one thing that has, and continues to, positively impact his real estate investing business around buying and selling income property. More importantly, he'll share with you how you can implement the same. Up to this point in Matt Theriault's real estate investing career, he has mastered 12 different investing strategies that require little to no money. Learn the 2 easiest and fastest of these strategies by downloading Matt's free real estate investing course at http://FreeRealEstateInvestingCourse.com Learn more about your ad choices. Visit megaphone.fm/adchoices

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. This is episode number 38. And this is the podcast that will show you how to build wealth through 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. 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. Glad you're here. Now, you're going to want to do two things. First, go back and listen to Episode 1 for the ground rules of the show. And two, 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 where I unveil the mission. history around doing deals with no money or credit. Yes, it's possible. I mean, to this point in my investing career, I've implemented 12 different strategies of investing in real estate using none or very little of my own money. And I've yet to use one point of my own credit score. And inside this free course, I give you the first two strategies, the first two, which are really, they're the easiest two. And they are the actually, they're the two that can generate the quickest

success for you as well. And you can get them four, free at free real estate investing course.com. So, wow, it's been a little over three weeks, I guess, since the last episode. Time flies when you're having fun and things are going well and things are going really well. I'm so blessed. You know, as I think I mentioned a few episodes ago, I've thrown myself back into the game full time. I am back and I am a full-time real estate investor.

It is my number one priority now. And there's just, you know, there's just way too much opportunity out there to just sit on the sidelines and watch. So I had to get back into the game. And I never really left, but I'm playing all out right now. And I'm having a blast, and things are really happening. And, you know, I've been heading back out to all of the RRII clubs, the same things I tell you to do, the same things I tell you to do in the free course in the Epic Pro Academy.

And I've gone out following my own advice, practicing what I preach, just because I know that it works. So I've been going out to the clubs to re-familiarize myself with my local investor community. And actually, this time around, it's been a very different experience as I've been running into listeners of the podcast. I mean, almost everywhere that I go. And people tell me the impact that this show is having on them. And it just feels really good to meet people. I mean, I met Clifton and his wife at the Manhattan Beach Phoebe Group.

That's a group, Phoebe stands for four investors by investors. And if you're Southern California, I highly recommend that you look those up. And I think they're spreading their way nationally. So in other parts of the country, you might want to look that up also. I mean, it was a pleasure meeting Clifton, pleasure meeting your wife. And I met Paul in Orange last night, actually a couple nights ago now. And, you know, a couple of you actually joined me on my Memphis Investment Property Tour a couple weeks ago. So it's been nice to meet everybody.

Fernando, Melanie, Linda, big hello to you too today. And, you know, it's just pretty amazing to hear firsthand the impact that this show has had on people. and the life-changing decisions that people have made because of it. And the life decisions that they continue to make because of it. I mean, the email correspondence from you and the visitors to my blog have significantly picked up. And, you know, when it used to take me just a day or two to get back to people, I mean, it's now taking me almost a week or so. But keep them coming and be patient.

I mean, I'm happy to get them and I'm happy to answer your questions and address your concerns. But just know that the volume of these emails, it's picking. up so it's taking me a little bit longer to get back to them. Now, with regard to my real estate investing, I mean, I've got, I've got 20 deals in escrow right now. I mean, that's a personal record. I know for some of you out there, maybe that's, that's normal. But for me, that's a big deal. I've got 20 of them in escrow right now. And you see, what I've done is, I've lucked up on a couple of great contacts, a couple of great contacts, a couple at Fannie Mae. They're regulating a lot of foreclosed property right now. So it's a good contact I have.

I've lucked up on another contact over at HUD, housing of urban development. I think that's what it stands for. I never read. I just knew HUD was a place to get deals. But I think that's what it stands for. And my biggest find of all, I met a guy that is responsible for boarding up condemned homes for the city. And I've been getting all of his phone calls around the most recent dilapidated condemned homes. So that's been a great source of deals and a very short period of time.

And there's two things that I want you to get out of. of what I'm sharing right now. I mean, it shows that this continues to be a people business. And specifically, it's about your relationships with people. That's not going to change. I mean, until you start buying property from inanimate objects that are owned by inanimate objects, I mean, you're always going to be dealing with people. Every piece of property that you buy or sell is going to be to or from another person.

That's not going to change. The second thing is, you're not going to meet people unless you get out there and mix it up in your real estate investing community. So, I guess so you could say I actually didn't really luck up on meeting these contacts, did I? No, I created my own luck. I created my own luck by getting out of the house and getting around other people, around other investors, around other people that have an interest in buying and selling

real estate. And, you know, I didn't set out to find a Fannie Mae or a HUD representative. And I certainly didn't set out to find the bird dog. of all bird dogs either. But I understand a dynamic amongst people or when you involve yourself in a community or a group or a club, so to speak. I understand that this being a people business of which is all about relationships, I'm not going to make any relationships sitting at home.

I'm not going to make any relationships sitting in front of my computer. I'm not going to make any relationship sitting at the desk. And I'm not going to build the quality relationships over the phone. So get out of the house. Go meet people. I mean, and even if you live in an area of where the closest real estate investor club is a two-hour drive, and I've talked to some of you, and that is the case for you. Make the drive.

I mean, if you want to do this, make the drive. I live in Pasadena, California, and a couple nights ago, I drove all the way to orange during rush hour, which was about, I don't know, a little over a two-hour drive. But I do it because I know it's going to be worth it. I know it's going to be worth it because, every time I go to one of these clubs or a seminar or any sort of meeting or group setting, I always get that one thing. I'm always looking for just the one thing.

And I never know what it's going to be. I mean, that one thing, though, I always get because I'm always looking at it. You see, when you go to a club meeting or a seminar or hear a speaker, anything like that, I want you to go just because by being there, you're always going to get that one thing. And that's that one thing that's going to positively impact your business. I always find it for myself. I mean, maybe it's a person that I meet, or maybe it's a tip that I get, or maybe it's an absolutely revolutionary idea that contradicts everything that I've ever thought to be true.

Sometimes you get big, giant ones like that. Sometimes they're little ones, but I always find that one thing. You know, last night, I got one of those specific ideas. I'm going to share it with you. I mean, I went to hear this guy speak, and I had never, ever heard of him, but the host of the event of which I know reasonably well, he edified the speaker so much to the point that, okay, I got to go. I got to go and I got to make the drive.

I got to go check this out. I had also had a coaching client also that was going to go to that particular meeting. So I wanted to kill two birds with one stone and I told him that we could conduct his coaching call in person after the event. So that was a great reason for me to go and also, you know, to get something to get that one thing. All right. So anyway, up to this point in my real estate investing, now holding 50 units of

rental property, I've always shied away from one bedroom, one bathroom units. I just, if I see one bedroom, one bath, I really just kind of turn my head and go next. And the reason why is they're typically harder to rent, and the turnover is typically greater as well. So they end up at the end of the day, just eating up a bunch of your cash flow. And a lot of times, you might think you're going to positive cash flow over two or three hundred bucks a month on one of these little units, but because of the turnover, you end up just kind of breaking even at best most of the time.

You know, and most investors that I know feel the exact same way. In fact, I think every investor I know feels the same way. But this guy that was speaking, he has made his fortune in one bedroom, one bathroom rentals. So he had my attention. I was like, and the reason he had my attention is because I turn these types of properties down all the time. They seem to be everywhere and I keep on, I just, I resisted them.

So he definitely had my attention. and I certainly don't want to miss out on an opportunity here. I mean, if there's something that I'm missing, I mean, because on the surface, I mean, this could be a very great thing as there isn't a bunch of competition for one bedroom, one bath rentals. And, you know, if there's no competition, I mean, that means even better deals, right? I mean, if no one's competing for them, you can get even better deals than what they actually are. So he went on to explain how he does this.

And he said after about his first five years or so of being a landlord and at the, at the point to where he was almost going to give up. He looked back at all of his tenants and analyzed what his best tenants all had in common. He found a couple common denominators. And he just thought if I could bottle that, if I could put those common denominators into all of my tenants, this landlording thing would actually be kind of easy. So what he noticed that his best tenants were, they were first, they were retirees. they were 62 years old or older.

And the second thing they all had in common is that they were single. 62 year old and over and single. And what he noticed is that when we retire, just as human beings, and specifically if we're single, we really oppose any type of change. I mean, we've lived our life, and it essentially is what it is at that age. You got what you got.

And we just simply want to be, comfortable. We want a comfortable place to live and we don't want any change thrown upon us. We don't want to make any waves. We just kind of want to, you know, do our thing. And we have no intention really of ever moving again at that point. Now, you know, I'm sure there are some exceptions. But overall, I mean, that made a lot of sense to me and I'll explain to you why in just a second. And so he went on to explain that these great tenants rarely called for repairs and he was able to avoid the expenses of new carpet and paint that typically accompanies. one bedroom one bath units because

you know you have to repaint and you have to put in new carpet every time someone moves out and the turnover is typically so great. But these great tenants of his, they never moved out so he didn't have those expenses. And up to this point he's kept track. I think this guy and his name

escapes me. Shame on me. It was Walter or Wade or something. Started with a W. But he says the average time these great tenants stay in his property is 16 years. 16 years with the rent flowing just like clockwork. Minimal repairs, minimal turnover.

And he noted that married retirees stay on average of about 10 years. Still, really, a great number from a landlord's perspective. And this totally resonated with me. And you see, as with my most recent acquisition in Memphis that I've been talking about, my 14-unit building, I mean, when I purchased that property, it was completely uninhabitable. I mean, but when I purchased that property, there was one. one guy still living in it. I mean, he had been there 13 plus years or so.

I mean, this is a rat-infested building. Three of the units were burnt to a crisp from a fire. And the only water and electricity that ran to this building was just to his unit. And if you want to see, it's on the website, Epicprofessionals.com. It's one of the blog posts. It's one of the more, I don't know, it's probably within the last couple months or so. It should be easy to find. But you can see the pictures of this.

It's scary. and you know, guess what? Guess what about this guy? He's elderly. He's definitely over 62. I don't know his exact age. And he's single. And, you know, even the worst of worst conditions did not cause him to move.

So this guy that was speaking at this real estate club, his story totally resonated with me. I have recently just had the exact experience. I get it. I understand. So what I've done is I've started looking into expanding this idea and incorporating it into my portfolio. I'm going for it. I mean, it just makes sense. And what's more of which he didn't mention?

But I know, but I know this fact about real estate and it actually is going to impact this strategy even more. I know about the baby boomers. I mean, the leading edge, the leading edge of that generation just hit 62 years old. So this could be a phenomenal strategy for the next 20 years. to 30 years. And I believe it will be because, you know, as the baby boomers, as they've, as they've moved through society, they continue to impact different industries just by the sheer number of them. I mean, they account for 77 million people born in a 14-year span. And here's what I mean, how they impact. I mean, when the baby boomers were born, you know, anything having to do with

baby was a really good industry to be in. I mean, that's when Gerber's baby food became a household name. And when they became teenagers, those were the most prosperous years for Levi Strauss. You know, teenagers wear Levi's, especially in the 50s, right? And as they aged and started to start their families, you know, there was a very famous businessman, Mr. Lee Ayacocca. He recognized this dynamic. He recognized what this generation was capable of when it came to impacting industry, when it came to impacting business. And he said, okay, if they're all starting families, and I'm here over here to save this struggling car company called Chrysler,

what do families need? They need minivans, right? And that's how Lee Ayacocca saved Chrysler, because he recognized the power of the baby boomer. So let's give this giant portion of our population that has money. Let's give them something to spend it on, something that they actually need, the minivan. You know, an economist, they've actually noted that most people

really hit their stride in their late 40s and their 50s as their real money-making years. That's where you're supposed to really start generating your top salary and you're getting paid your most for what you do for a living. And before our financial crisis, I mean, guess how old the baby wombers were the previous 10 years? Those years, that last decade where we were experiencing all this amazing appreciation. Yep, most of them were in their 50s making money. And they were spending it too, right? I mean, they were upgrading their personal residence every three and a half years. They were buying vacation homes.

They were buying investment properties. It was the baby boomers that drove much of that appreciation. And now that the baby boomers are hitting that retirement age, they're approaching that retirement age. And they, I mean, the forward edge of that wave just hit age 62. Big business is recognizing the economic power of the baby boomers. And they're ramping up to meet the medical demand and the health care demand. They're getting old, right? They're all going to be going to the doctor much more often.

And also, as it struck me last night, guess what else they're going to need? Retirement housing, right? Yes. And guess who's going to be a provider of that housing? Or at least some of it. Yep, me. And I want you to look at that too. I mean, it might be the right thing for you.

It might not be, maybe there's no real retiree population in your area, maybe it's time to start looking in areas where there might be. The great, great strategy. So that's the one thing. That's the one thing that I got from last night's meeting. Now, the night before that meeting, I went to another meeting. I didn't get nearly that type of epiphany. That was just one I got last night.

And you can probably tell I'm very excited about it because I think it's going to work. But the night before, all I really got was confirmation. I listened to a panel of speakers and I just got confirmation that everything I'm currently doing is the right thing. and sometimes that's enough. Sometimes that's all you need. I mean, just some self-assurance and some reassurance can go a long way and count as that one thing for your business that you need to get up tomorrow morning knowing that you're doing the right thing.

But then, hey, the meeting a couple weeks before that is where I met the private money lender that's providing the financing for all of my wholesale deals. But not just for me, also the people of which I'm wholesaling the properties too. That was a huge score. And I wasn't even looking for that. I mean, and that certainly constitutes as the one thing, right? So there's some great, great tips in there.

And in the next five years, when I've created a second fortune with one-bedroom, one-bath properties, don't call me lucky. Okay? It's not luck. Well, maybe it is luck. But know that I created my own luck. I created it by getting my butt out the house and amongst the people, amongst people that buy and sell real estate.

I got my butt out the house amongst the people inside of this people business. That's how this business is done. I mean, go back and listen to previous episodes of the string of interviews that I conducted of the real-world investors. I purposely put together a collection of interviews of real-world investors that, you know, they weren't the greatest speakers. Some of them were kind of boring. they had nothing to sell, they had no website, they had no podcast of their own, they had no blog or anything like that.

But I put them all together for a purpose because I wanted you to see how it's really done with no agenda without trying to influence you one way or the other to go buy something or pay for a service or a product. And without one exception, each and every one of them said that they find most of their deals through their relationships. most of their deals through their relationships. So if your business isn't working or isn't working as well as you'd like it to be,

get out and meet some people. And just like all of your other real estate activities, you've got to do this too consistently and you've got to do it long enough. You know, relationships, they take time to build. And some are going to build faster than others and some of you are going to be better at it than others. But just know that it all takes time.

So be patient. Oh, and here, I think this is the biggest tip that I can give you. Don't be attached to the outcome. Don't go into a meeting with the intent that you're only looking for cash buyers. I need to find cash buyers because that's what my business is working and that's why I'm going. I mean, you certainly can be open to finding cash buyers, but don't be attached to the outcome. Just by the nature of being involved with people, you might find another source. to cash buyers that you haven't even thought of.

But if you go in with blinders and you're only looking for cash buyers, you might miss it. You know, and if you're looking for sellers or you're looking for wholesalers or you're looking for a bank REO rep, that's okay to go looking for it. But just don't be attached to it and consider that night a failure if you don't find that one thing that you're looking for. Go with the intent to get that one thing, but don't be attached to what that one thing is. I hope that makes sense to you. I mean, always look for the one thing.

I mean, if I only went looking for cash buyers, I might have never even approached that Fannie Mae rep. I might not even have bothered to even talk to them. Or that dingy-dressed guy that showed up in jeans and a t-shirt that boards up the condemned properties for the city. I would have never talked to that guy if I was only looking for cash buyers. So be open and be curious. Be curious about people and be curious about what they do.

And then just accept what you get. You know, this is not, real estate investing is not a one-man business. It takes a team. And it can be challenging to put a team together. And it can be even more challenging to put a good team together. And you're going to be swapping people and team members in and out of your team looking for just the right ones, the perfect fit. And you just never know when you're going to meet them.

And you never know what impact they're going to have on your business. I mean, you might be going looking for cash buyers and you just found the most amazing seller that's going to hand you properties on a silver platter like this Fannie Mae rep has handed me some already. Well, you know what? If you have these great deals handed you on a silver platter and they really are great deals,

the cash buyers are going to find you. All of a sudden you were so focused on looking for the buyer, the buyer, the buyer, when maybe you might have just should have been open to finding better deals. Because real estate is one of those things. If it's a deal, you're going to have no problem finding buyers. So just don't be attached to the outcome because you never know what your solution, or the solution to your business or what's going to make your business more efficient or easier

or more profitable. You don't know what that's going to look like. So just be open and accept what you get. All right. So I actually had another subject I wanted to discuss today, but time kind of got away from me. So I'll save it for next episode of which we're going to start looking through different no money down or very little money down strategies and how to put these deals together. Okay, so that's what we'll do for the next episode.

Oh, and a quick announcement before I go, my next Memphis investment property tour has been rescheduled for September 6th and 7th. It's not the last weekend in August that was previously scheduled. I didn't realize that that was Memorial Day weekend. And flights and hotels will be absolutely through the roof on that weekend. So I don't want to subject you to that. and I didn't want to subject myself to that either. I wanted to avoid that, and I want to avoid that for you.

So just know that the tour is for September 6th and 7th. It is free. I don't charge anything for it. There are a lot of other companies and services and programs out there that charge just to take you around and look at properties. All you have to do is get yourself there and secure your accommodations, okay? And then we'll get to hang out for a full day looking at properties, some before properties, some properties in the middle of rehab, some properties that are all fixed up and ready to go and have tenants in place. and we'll spend a day doing that,

and we'll spend that same day just talking about real estate investing and hanging out and connecting, and we'll enjoy some of the South's most, one of my favorite parts about Memphis is the food. We get to spend a lot of time eating too. And you'll get to meet my team. You get to see how I personally run my operation, the same operation that has 20 properties in escrow right now.

And I'll show you exactly how I do that. I'm completely transparent. I reveal everything. So you can go and you can see it all. You can ask all the questions, and you can feel it, touch it, smell it, do whatever you want. Okay? So if that's of interest to you, go to epic real estate tour.com.

Epic real estate tour.com. All right. So until next time, as a very wise person once said, paying attention to simple little things that most men neglect makes a few men rich. So 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. To your success. This podcast. is a part of the C-suite Radio Network.

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