Epic Real Estate Investing - EREI 069: Edgar Macias is Having Beer with Matt

Episode Date: October 9, 2013

Matt continues his new series "Beer with Matt" where YOU the podcast listeners have the opportunity to visit the Epic Real Estate Investing studio and get your questions answered live on the air. You provide the questions and beer, Matt provides the answers... and drinks your beer. Matt likes coffee, too in case beer isn't your thing :-) If you'd like to sit in and ask Matt some of your most burning real estate questions over a couple of cold ones, send an email to [e-mail] with "Beer with Matt" as the subject line. We'll do our very best to accommodate you and fit it in the schedule. If you're not in the area and you'd still like to ask Matt a question, call into the Epic Real Estate Hotline at 1-888-891-7203 and he'll answer your question live on the air. Download Matt's free real estate investing course "How to Do Deals : No Money Required" at FreeRealEstateInvestingCourse.com If you've got the money, but don't have the time... Matt will do the cash flow investing for you at CashflowSavvy.com 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. Yeah. Welcome. Hello, and welcome to another episode of Epic Real Estate Investing. If this is your first time listening to the show, welcome. Really glad that you're here. And this is the place where I show people how to get out of the rat race using real estate. and it all really begins with just a simple shift in mindset, a shift in focus, just to simply stop

focusing on creating piles of cash. Stop working so hard for money and stop, you know, saving money and start focusing on creating streams of income. What we like to call in the real estate world, cash flow. And for step-by-step instruction from where you are right now, all the way to to live in the dream of your own being financially free, you can become a member of the Epic Pro Academy. I got started investing in real estate with absolutely no money, no credit, and I was forced to come up with 12 different strategies that required little to no money. And that's what I teach in the Epic Pro Academy. So if you'd like to become a member and support the podcast, support the show, you can go to Epicproacademy.com. Or if you want to just test me out and test out the strategies

first, I'll give you the first two of those strategies for free, the two that I like to think that are probably the easiest and fastest ways to transact real estate using no money, no credit, put some fast money in your pocket. And you can access that at the free course that I put together at free real estate investing course.com. But you can get it all right there on the homepage of Epic Pro Academy. All of it is right there for you. Okay.

So today, really excited. Got another very exciting episode of Beer with Matt. And this is where you, the listener, send me an email to Matt at Epic. Realestate.com. You put beer with Matt in the subject line and we'll try and coordinate something to where you can actually come into the studio and you essentially get to interview me. This is your time where you can ask all the questions that you want specifically about your own situation and we go ahead and record them. You know, there's so many of the podcast listeners that I've been able to go to lunch with, have beer with, have coffee with, you know,

just have snacks with. And we've had so many great conversations that I look back and I kind of regret that I didn't record a lot of those. So now we're just going to double down, leverage our time, and put these on recording. So today I'm joined by Mr. Edgar and Macias. Edgar, welcome to the show. Hey, very glad to be here. I'm very excited. I sent you an email away while back asking for lunch and to pick your brain and you just took it to the next level. Yeah, it was good timing. I was thinking about something like this and then you had sent me the email and I said, well, let's just go ahead and launch this. This is just per our schedule, even though you were the first request. You are the second episode of Beer with Math.

The first episode went fairly well, I thought. So we're going to keep on doing this as long as it continues to go well. So, Edgar, where are you from? Well, I currently live in West L.A. Originally from Fresno, California, Central California. I lived there until I was 18 and then went to Northern California for school, and now in L.A., so basically all over California. Got it, got it.

And what do you do during the day? What do you do for a living? So my living is property management. I manage basically single-family homes up to small apartments all in the West L.A. area. My business philosophy is within a 20-mile radius because I feel I wouldn't be a service to my clients if it was farther than that. So I'm within a 20-mile radius and where I've located. Got it. And how long have you been doing that?

Actually, I've been doing property management for over eight years now. Actually, I started with corporate working for corporate America. And I got laid off in 2009 and actually ended up being, it was a shock at first, but ended being a blessing of this guys. Actually, you could say that was my do-over because that enabled me to start my own business. Got it. So it's your business. It's your management company.

It is my own business right now. That's awesome. How many units are you managing? So right now I have around 80 units currently. And I'm fortunate it's enough for me to have enough cash flow for my team members and myself to, you know, just run my own business and do my own thing. Actually, I got laid off in 2009 and just, you know, some. clarification 2010, I ended up able to go full-time into my own business, which was a milestone for me.

Awesome. You started it from scratch. Exactly. Well, congratulations. That's awesome. Thank you. That takes up a lot of your time, I imagine. Oh, yeah. So that's actually leads to one of my first questions. Okay. Because I do have two business goals this year. And one of them is, because of this property management business, one of my goals is to have it run without me. So currently I'm trading my time for money and property management consumes a lot of my time right now. I'm working on developing systems and delegating the day-to-day to my team members so I can focus on more growing my business and not working in my business. So a solution that I was thinking that would work for me currently is to hire another property manager to replace me. But I currently do not have enough cash flow to do this.

Any suggestions on how I can bridge this gap and accomplish my goal quicker? Got it. Got it. Well, you're on the right track of replacing yourself within your business so you can work more on it rather than... it. I'm in the middle of doing those types of things myself. Great. Not enough cash flow. Well, there's got to be a give somewhere, you know. So I would, you can certainly look at the intern route maybe, maybe that you train somebody and move up to a paid internship. And eventually as you continue to build the business,

hopefully there would be enough cash flow to feed you both. Great. That's, you know, the business just isn't big enough for you to step out of it yet unless you are going to create an additional means of income for yourself by stepping out. So I think you have to hit that level first. I'm not an expert at doing this because, like I was just sharing with you, I'm in the middle of doing it myself. I'm hiring our very first people this week specifically, you know, just before you walked in, we were on a conference call and talking to a prospective candidate. And so, you know, before you can step out, if you want this business to also support you, you've got to get it. to a level to where it can support you both.

Great. And that's what I was, I'm working on doing the systems. And the way I see it is more managing the manager. I'm still going to be involved with the business. But I could at least step out a little bit more and focus on growing it. Sure. So, but yeah, those are great suggestions.

Thank you. And my second goal is for my partner, Sepher and I, we're looking at investing in apartment buildings. And before the year end, that's our goal. We had a 37 unit under contract and just recently walked away, because we cannot come to terms with the seller. So we're back to searching for another apartment deal. And any recommendations on developing good deal flow,

especially from out-of-state locations? I don't know how good they are. I'll tell you what I've been doing for my own personal deal flow is I'm a big believer in networking. I'm a big believer in relationships. All of my best deals come from relationships. It didn't start out that way. I mean, I had to do the direct mail and I did the internet and I did the door knocking and I did the driving of the neighborhoods.

I had to do all that initially. But the more and more deals you do, the more relationships you gain. And my two best places probably now, my best relationships that do bring me deals would be my property managers. Okay. You know, you probably understand that the dynamics of that, you know, when you have a dissatisfied landlord, right? And you know that, well, he might be a feasible candidate that might want to sell. So that's a good place for property management. And then, of course, you know, realtors.

And the one question that I always ask realtors, regardless of how long I've known them, I try to work it into the conversation at least once every single time, is do you have any listings or do you know any sellers that would be open to seller financing? Awesome. And those have been those two places,

the property managers and realtors by asking that one question have been my best source of deals. Great. Definitely, thank you. So another thing, I love playing the cash flow board game by Robert Kiyosaki. I just finished playing it.

We, last night, I played every week on Wednesday nights. We have a meetup at the Grove, and I just love playing it because there's so many valuable financial lessons in this game. One of them is partnership. Like John F. Kennedy said, a rising tide lifts all boats. And one thing I noticed when you play the cash flow game, when you partner with people and have a mutual win-win focus, you end up getting out of the rat race quickly. In the real world, however, partnerships are like marriages and last a lot longer than in the

cash flow board game. Can you give us some tips on choosing great partners or ensuring success in your partnerships? Okay, good. Well, awesome insight because that board game can be like monopoly, and it can take three or four hours if you play by yourself and you're playing against everybody. But if you do create partnerships, you know, you can get out of the rat race significantly quicker. I can attest to that that absolutely does apply in real life as well. I have many partnerships on many properties. one thing of this is changing a little bit now but I'll tell you up to this point how I've created

my partnerships is I've defined a very clear line between you know I'm always the lender or I'm going to be the owner one or the other that way first of all I don't need to get an attorney involved we don't need to have a joint venture agreement or start an LLC together and so that kept it nice and clean and additionally if you both have those specific roles, you know, the laws are very clear on your rights from that aspect, whether you're the lender or the owner. And also, it keeps each other out of your hair. Like, if I'm the lender, hey, as long as you keep making me payments, I'm fine. I don't really care what you do with the property. But I need you to keep those payments steady. And I know if you mess up, then, hey, I have the property of security. So that's the one position you'd have as a lender. And then as the landlord, you know, it's your job

to make your payments. So you got to get the building to produce. So that's how I'd like to do probably, I would say, 80 to 90% of my relationships right now or my partnerships are distinguished that way. I'm either the lender or I'm the owner. Now, just recently, I've started, I've had a couple partners where we are actually members of the same LLC and we have partnerships there. I just you just got to be really careful on who you go into business with.

You're right, they are very much like marriages. And when that honeymoon period is over, you know, reality can hit the fan, so to speak. You just got to be really careful. And I don't think there's any way to tell up front. We definitely have operating agreements and we have LLC set up. So all of that stuff has been established with an attorney. we have our exit plans and all of our contingency clauses and what happens in certain situations. So that's all very clearly written out right from the get-go.

So that's probably the most important thing to do. Okay. So defining each other's roles and being clear on that? Absolutely. And you can put all of that in the operating agreement of your limited liability companies. Awesome. Mm-hmm. Okay.

Tony Robbins said you are either growing or dying. How I interpret this quote is, well, first of all, I'm not sure if Tony Robbins created that quote, but I give him credit because I was at an event with him at Unleashed the Power Within and he said it. So it's a great quote. And how I interpret this quote is to push yourself out out of your comfort zone and be a student for life. What do you do to ensure you're always learning and growing? Good question. Well, I am a consummate student.

I'm always, I listen to podcasts like crazy. I listen to audiobooks. I attend seminars all the time. I know that you want to be very open to learning because none of us know it all and none of us are ever going to know it all. So I invest a lot in my education and that's I invest money and I invest time. And so that's one way that I do. I don't know how much I push myself out of my comfort zone these days. I don't know if I really have to.

But to get where I am, I had to do it consistently. But now inside my comfort zone, I can still make. a very significant living just doing what I do. I guess recently, I guess over the last year, going from single family residents to multifamily, that pushed me out of my comfort zone a little bit. But I wasn't out of the comfort zone very long. I'm very comfortable with it now. Someone just asked me if I had planned on, actually was the last beer with Matt conversation

that we just had. Someone had asked me if I was going to go into commercial real estate. And I guess that would be a little bit out of my comfort zone. I don't know too much about it. I don't have a whole lot of interest in it. I don't have a big giant incentive to stop doing what I'm doing. So I don't really have a good question there. I do know in real estate, though, that either you are making money or you're getting educated.

So it's not necessarily you are growing or you're dying, but you are making money or you are learning. That would be my twist on that. Definitely. Don't know if I answered your question there. No, you did. I mean, I feel like, for example, in property management, I'm always learning from my client's mistakes. That's why they hire me is there's an issue going on. And just for me to be accepting to that challenge and willing to take it on, I feel like I'm growing and learning.

So every day is a different day. So I guess just in my normal day to day, and I'm sure in any real estate entrepreneurs day to day, it's not going to be the same thing every day. You know, in every single transaction, there's a lesson. Exactly. There's something that I didn't know that I didn't know. It's why I'm such a big advocate at moving at the speed of instruction. Because there's no way I could teach you everything that there is to know about real estate before you take that first step, right? And I mean, still to this day, every transaction, I've got a lesson that I'm something that I learn.

So, yeah, you can't help but learn in this business. So I think what I take from it is just having the courage to be open to learning and taking on new challenges. You're going to automatically, you know, be pushing your limits and growing. Yeah, yeah. Great. How did you get where you are today? I mean, obviously, you're a success, and I look up to you, I listen to your podcast, I'm always learning from you, and I get a lot of gold nuggets from listening to you,

so you have a lot of knowledge and wisdom. And I'm curious, you know, how did you get where you are? How did I get? That's a big question. That's like, let's start talking about the life, you know. You know, when I got out of the Marine Corps, I spent, you know, a decade, over a decade in the music business. And that digital download thing came along, just new technologies of the way people consume and purchase music, it changed. And I wasn't prepared for that change.

And I had to start all over again. And I hit rock bottom. I had to start from scratch. You know my story. It was 34 years old. I was bagging groceries. And never envisioned myself being there. But I took all of those lessons and I said, okay, I'm not going to make the same mistakes twice.

But I got to start something new. I got it. And entertainment was no longer an option for me. So I was like, okay, what's out there? can produce the same type of lifestyle that I had become accustomed to. And, you know, after some searching, I came up and I decided real estate was the answer. So I had to learn. But I was going to learn in a way that I was going to become really good at it.

I was going to become the best at it. And I wanted to learn from the best. And then as I got into business, I wanted to make sure I didn't make the mistakes that I made in the music business. And just one step at a time, you know, there's just real estate is not a complicated thing. It's generating leads. You've got to learn how to find the deals. You've got to write the offers. And then you've got to learn how to analyze the deals

to make sure that they are actually deals at something that you want to follow through with. And then you've got to come and find the money to close the deal. And I just did that over and over and over again. And it's just built up to something like as of this, you know, last week, two weeks ago, we just closed on our 138th unit.

Wow. So I've gone from one small little single family residence all up to 138 total units. Great. Awesome. So it's just one step at a time. and the more you do it, the better you get, and the better you get, the more money you make.

Awesome. So talking about your real estate empire, besides growing it, what do you like to do for fun? What do I like to do for fun? I like to drink beer. So I figured I could work and drink at the same time. That's why I started this. No, seriously, I love sports.

I'm a big Dodger fan, big Laker fan. I love the St. Louis Rams. They used to be here in Los Angeles. But I'm not holding that against them. I'm still a fan of the Rams. I love the USC Trojans. So I like going to sports bars and watching sports on the weekends. I love that.

I love drives up and down the coast. I love the beach. My son is a big fan of the water. Anything having to do with water is whether it's the swimming pool or the shower, the bathtub. It's the hose. It's the ocean. So we do a lot of water sports now. He just great.

He wrote his first jet ski the other day. And so now I think I have to go. and buy a jet ski farm. Awesome. And your favorite real estate book? Favorite real estate book. That's a good one. Well, I think the obvious answer, and it's not necessarily a real estate book,

but it is the book that changed my whole way of thinking that it would be rich dad, poor dad. But this real estate specific book, I really like Gary Killers book, The Millionaire Real Estate Investor. I refer to it frequently, and I just think it lays out a good road to travel to create that financial independence that, you know, the cash flow to it. escape the rat race that you're familiar with. Awesome. I haven't read that book.

I'll put that on my list for sure. Yeah, it's a really thick one. It's a really big one. Audio book is available though. Okay, yeah. I'll probably take that on. All right. And your favorite non-real estate book?

Non-real estate book. Oh, easy. You mentioned him also Tony Robbins. Awaken the Giant Within. Awesome. I read that book at least once a year and a half for the last decade. Cool. Mm-hmm.

What dreams and goals inspired you to succeed? You know, I don't know if it's actually my dreams and goals that inspired me. What inspired me was more of what I didn't want. And, you know, as an entrepreneur early on in the music business, I had a lot of odd jobs because I had to make ends meet and had to fill those holes and pay the bills and make sure that I actually ate. I knew I didn't want to be an employee. And when you're doing a lot of odd jobs, you have really sucky jobs. and a lot of stuff that you just,

you become really clear on what you don't want. And even jobs where I had where I did have a consistent paycheck and I did hit a little level of comfort for a little while because I could depend on that paycheck. That was still an uncomfortable position for me because I knew that there wasn't any more. If I worked harder, I was still going to get the same amount.

So I was actually much more comfortable in an entrepreneurial position with the uncertainty of pay, but knowing if I worked hard, I was going to get paid a lot. So I wouldn't say, it was my dreams and my goals that inspired me to do what I do. It was more of just being really clear of what I didn't want. Awesome.

Make sense? Yeah, I do. I mean, with me, with my business, I feel like every day I get up, I'm excited because every minute I spend in my business, I'm growing it. And to me, that's an awesome, you know, realization. It comes with its tradeoffs, though, because you have that uncertainty, especially when you were starting your business. It does.

You know, you have five units. How do you live off the management fee? of five units, right? And, uh, but it grows and, and you know you have the freedom, you know, have the ability to grow and no one really controls that except you. Exactly. I mean, definitely there is sacrifices in the beginning that you got to, you got to undertake. Um, but the sky's the limit. That's why I love about it. So, so, and it's basically all on you on how, how big you want to get it. So, um, what qualities do you look for in people you hang out with? That's good. Uh, definitely character. You know, I've, I've, I've, I've, have, um, I've, I've, I've,

I've made a lot of my, a lot of mistakes over the years. I certainly want to hang around ambitious people. I think the environment that you create for yourself is going to have as big of an impact on your success than anything else. I've recently been introduced to a quote that if you find yourself that you're the smartest person in the room, you're in the wrong room. So I definitely look for people that know more than me, which is not, they're not difficult. to find. But I definitely want to surround myself with people that I can learn from and grow from. I have a very relaxed manner. So I definitely want people that are relaxed. Interests, common interests are great. Laker fans, Dodger fans, love them. But I like hanging

around with entrepreneurs also that aspire to do bigger and better things. Awesome. And what characteristics or skill sets you, sets you apart and enable you to be successful so quickly? Two things. I've really concentrated on developing my people skills and my sales skills. I read a lot of sales books, taking a lot of sales courses. I spent a few years in network marketing. And I think that's an amazing training ground for creating strong people skills.

So I think that that is a biggie. And second is I'm just always kind of going back. to the dreams and goals thing. I'm always just very clear as to what I don't want. So I know if I just got, I've got something, I guess, what's the word? Resilience, I guess. Grit is where I just know I got to work, work, work. And if I do the right activities, I do those consistently, you've heard me say this before, too.

If you do the right activity, you do them consistently and you do them long enough, I'm going to get what I want. There's no way that I'm not. So recognizing those two aspects, like the people skills are so much. important, regardless of whether it's real estate or not, because everything that you want is going to be owned or controlled by another person. So you're going to have to have good people skills to get what you want. And secondarily is just to know that the daily actions, the daily decisions, compound over time. And those decisions of whether those are good decisions or bad decisions, good activities or bad activities, they do compound over time. You know, and I started with one house with making the one offer. And I just kept on doing it over and over again. And here we are with 138 of them. And, you know, I am financially free. Awesome. So those are probably the two qualities, I think, my people skills and just getting up and going to work every day.

Awesome. And, you know, that's one thing I realized, too, as a property manager, they call it property management, but I realize it's people management. You're dealing with the tenants. You're dealing with the clients who are the owners of the property, the vendors, the attorneys, the contractors. And so you learn, like you said,

you've got to develop good people skills if you want to succeed. Absolutely. Be successful. So, yeah, I agree with you. That's great. Well, Matt, you know, those are my questions and I really appreciate all your answers and I will listen to this podcast over and over again. That's it? You've got more questions here.

Okay. Well, that's good. Let me ask you some questions. Okay. What is it about real estate that's appealing to you? Well, what I like about real estate is, you know, I think I realized this young that, you know, I think I did a study of the richest people in the world. all of them are in real estate, but even before that, my father was a handyman, and I like the fact, and I studied architecture in college, so I like the fact that, you know, shelter is something

that affects a lot of people, you know, it's one of the, I would think, one of the most important assets in most people's lives, so being able to be a part of that. And my, I guess one of my things is if you're able to improve something and make it, better, leave it better than how it was, you can, you know, you can affect people's lives in a positive way. So that, you know, that goes with property management, goes with real estate. And also, it's a good way to get out of the right ways is how I, you know, envision it. Awesome. Awesome. So up to this point, you look relatively young. How old are you at? I look young, but I'm younger than I looks. I'm 35 years old.

Okay, yeah, you know, you definitely look much younger than that. All right. So what have you done up to this point to build your own real estate portfolio, not manage other peoples, but what are you doing to build your own? And that's actually my dream. I do have two properties that I own and also actually just a third one. I got a condo in Orlando, so just got that one added to my portfolio and I just want to continue growing that.

And like I said, one of my goals, my partner, SEPA and I, we want to buy an apartment building this year before the end of this year. So that's what I'm doing to improve my passive income. not only that, but in crew, grow my business as well simultaneously. So that's what I'm working on to grow my cash flow and get out of the rat race. So of the 80 units that you're managing right now, are they mostly single families or a combination? They're mostly single families, a lot of duplexes, four plexes, and the biggest one I have

right now is 10 units. 10 units? Apartment, yeah. Very good. Have you let all of your clients know that if they ever want to sell that you're open to making them an offer? You know, I never, never came into that. That's a good question.

You are right in the perfect position to acquire property. Managing property is awesome. You know, landlords and investors are modifying and adjusting and growing and reducing their portfolios all the time. So every time they do that, there's a transaction there. And so that's the investors that they're always looking to increase their return on investment. And then there's other investors that just don't like it anymore as well. So keep that in mind.

Okay, yeah, definitely. And create those relationships, put the, drop the little, what I can say that, the birdie in the ear or something like that. Yeah. I'll put that in their ear. Yeah, I will, for sure. I mean, one thing I was thinking about using them for is, you know, if I find a good deal, let them know about it, they want to partner up. I was thinking maybe they could be potential partners. It's another.

It's another. You are, you know, you've got, you know, you work for real estate investors. You have a partnership with real estate investors. So you're in a perfect position to make those types. And there's a little difference, too, that you should really embrace, is that not only are you partners with investors, you're partners with investors that are actually doing things. Exactly.

Because you can be partnership with someone that says they want to be an investor, and it's not quite the same as being in a partnership with an investor that's already done something. So you're in an awesome position. I love it. Great. What's the name of your property management company? It's Gaza Realty and Investment Inc. Gasso?

Gasa. Gasa. Gasa. It's Casa as a house. It's casa as a house. Oh, Casa. Okay, got it. Got it. I ablo a little bit.

Super. So if anyone listening, they're looking for a good property manager in the Los Angeles area, how would they contact you? They can go to my website, gaza realtyinvestments.com, or they can call me at my office line. My direct line is 323-639-0888. Awesome. Well, Edgar, it's been a pleasure. Thanks for coming down. Thanks for the beer. Yeah. Welcome. My pleasure. Let's stay in touch. Definitely. Okay. Super.

Great. All right. So if you'd like to appear on an episode of Beer With Matt in the Future, send me your request to Matt at Epic Real Estate.com. Put Beer with Matt in the subject line. And I'll do my best to get you on the schedule. No promises. But so far, we're batting a thousand. And if you don't want to come into the studio and you still happen to have a question, a comment or concern, the Epic Real Estate Investing hotline is open to you.

That number is 1-888-891-7203. 1 8888191 7203. Okay, on behalf of Edgar and myself, until next time, to your success. 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 this 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.