Epic Real Estate Investing - Getting Rich with Balloon Payments! | 1139

Episode Date: April 13, 2021

In today’s episode, Matt reveals a revised list of real estate commandments that will help you with whatever type of investing struggle you may have. Furthermore, he shares a mistake made by a newbie REI Ace client (& what you can learn from it), as well as gives updates on cryptocurrency and the recent news. Tune in and find out more! Learn more about your ad choices. Visit megaphone.fm/adchoices

This is Terrio Media. Success in real estate has nothing to do with shiny objects. It has everything to do with mastering the basics. The three pillars of real estate investing. Attract, convert, exit. Matt Terrio has been helping real estate investors do just that for more than a decade now. If you want to make money in real estate, keep listening. If you want it faster, visit R-E-I-Aase.com.

Here's Matt. Hey there, Epic Investor. It's Matt Terrio from Epic Real Estate, where we show people how to invest in real estate using more of their mind than their money, using creative real estate investing strategies with an emphasis on retiring early. That's what we do. And if this is your first time here, glad you found us. If you like what you're here, make sure you hit the subscribe button before you go.

And if this is not your first time here, welcome back. And thank you for sharing this with your friends and family. You're the absolute best for doing that. I love you for that. So thank you. Today, I'm going to share with you some real estate investing commandments. You know, I shared these a couple of years ago as the epic edit or epic edict. I think it's how you pronounce that.

And I've added a few. And I think they're worth revisiting because I guarantee a few of them will address whatever you're struggling with right now. And then I'm going to share a story about a mistake a new RIAAA client made recently. And what you can learn from it. It holds a significant key to getting stinking rich. And I've got the news for you as well and this week in crypto. But first, today's sponsor of the show wants you to know that you've got the dream.

Now just get the funding and get it fast. Getting funding for your business is as easy as one, two, three. Step one, get pre-approved. Step two, get funded. And step three, well, there isn't a step three. The people at Epicfastfunding.com want you to know that if you need money for your business, for a rehab for marketing, doesn't matter what you need. need it for really. And your credit score is in sound shape. Simply go to epicfastfunding.com and get an

instant pre-approval without pulling your credit report, without even talking to anyone. And in as little as seven days, get a $50,000, a $150,000 credit line that can be yours to give your business the boost it deserves. So go to epicfastfunding.com. You've got the dream. Now get the funding. Epicfastfunding.com. All righty. So, I've been officially coaching aspiring real estate investors for a full decade now. And I can't believe I've almost been in real estate or been in real estate as long as I was in the music business now. I started 10 years ago coaching for really just one reason to create a second stream of income from what I had learned along the way. But 10 years later, I stick around and continue to do it for an entirely different reason or a different set of reasons, if you will. You know, first, I couldn't have imagined what it feels like to give someone some direction

and support and then watch them thrive. That's a little more of a touchy feeling than I thought I was wired for, but it moves me. It moves me weekly here at Epic. The second thing, I do more business because of my clients. You know, I buy from them and I loan money to them, creating a third and fourth income stream that I didn't plan for. I never saw that coming. And that's turned out to work out really well for all parties involved.

And third, and the biggest reason that I continue to teach and coach is because I've become and continue to become a better real estate investor by working through challenging deals with my clients. And I'm learning stuff all the time this way. Also, my clients, they teach me stuff all the time. Corey, he helped me see another side of principal only payments. Josh helped me see another side of my own three-option letter of intent. And countless clients have shown me that hard work trumps talent when talent won't work hard every time. And all things that are invaluable cornerstones to what got me to where I am today, but through my clients, they become reminders as to what to double down on.

And these lessons and reminders, they serve me to this day, daily, in fact. I'm reminded when I'm lacking motivation or not feeling 100% or feeling frustrated or, feeling like something is impossible, my clients through witnessing their actions and their results and living vicariously through their experiences and deals, it keeps me pushing forward. It gives me new stuff to share with you each and every week as well. But ultimately, just, you know, I'm human too. And I have all the same challenges that every human has. And sometimes you just need good evidence and encouraging clues as to what you're doing is the right thing to be doing.

And so I'm grateful for that. I thank you for that. And from these experiences over the years, though, I've been keeping a list of real estate investing commandments. And I shared these a couple years ago as the epic edit. And I'll get it all dialed in eventually into a neatly logical sequence at some point. It might even create some sort of document out of it. But the list that continues to grow and I'm not sure if it's done yet.

I don't think it is. But I think they're worth revisiting because I guarantee a few of them will address whatever you're struggling with right now. because we struggle with many of these things daily. And then we start looking for new solutions or shiny new objects or new technologies when all we really need is just reminding of the basics. So I've got 15 or so of these for you so far. I just kind of go through them one by one and comment on just a little bit. First one is real estate investing is the easiest path to financial freedom.

It is. More people have done it that way than any other vehicle, any other investment, any other venture or opportunity. So it's the easiest. It's not saying it's easy, but it's the easiest. And it's not getting really any easier either if you look at what the market is doing. And the supply and demand, or the lopsided dynamic of the supply and demand in the market right now. And with more and more of that demand coming from investors and institutions.

So, you know, the little guy, I'm telling you, the gap between the halves and have-nots is going to get wider and wider if you don't get yourself some real estate into your portfolio in some way. Just get one rental property. You'll be miles ahead of those that don't have it. So I have that to say about that. Real estate investing is the easiest path to financial freedom. And then I would probably double down on that and say real estate investing is the only path for the average person to financial freedom. When I say average person, that's not a degrading comment by any means. I'm just talking about your everyday employee, someone that has a job, someone that's saving in a 401k or an IRA or maybe, you know, dabbles in the stock market here and there.

Maybe he's buying gold or storing cash under their mattress. That's what I'm talking about, the average person. And, you know, you've got a great business venture or a great business idea or you've invented something or you're a prolific songwriter or author or, you know, some sort of. artist that gets paid residuals off the work that they do, then, you know, that would certainly be the exception. There's plenty of exceptions. But I'm just saying for everyday Joe, average person, real estate investing, it's the final frontier where that person has a shot at creating some real wealth, real financial freedom. All right. Number three, now we'll get a little bit more tactical. Not every seller is qualified to sell to you,

meaning you don't have to buy every house that a seller agrees to sell to you. In fact, that's not even a good idea. There's a lot of risk in that. And so you want to qualify the seller. You want to qualify the property to make sure that you don't become the motivated seller after the fact. Number four, your job is to get information, not give it. This is a big dynamic that some of my real estate agent clients that come to me and they want to be real estate investors. They have to get over this.

because they're used to being a service provider. They're used to serving their customer. And so they give information. They provide information to their customer. When you're buying real estate, no, no, no. Your job is to get information about the seller, about the property, and what there is for you to do and if this is going to be good for your portfolio. Totally different mindset.

Number five, your job is to get sellers to convince you to buy, not your job to convince sellers to sell to you. And that's very closely related to those last two. But when you're talking to a seller, whether it's over the phone for the very first time, or you're meeting them at the property for a tour, or if you're following up months after the fact, your job is to get the sellers to convince you to buy their house.

It's not your job to convince sellers to sell to you. You're an investor and you want to be a shopper. You don't want to be a buyer. So you're shopping for the best deal and you need the seller to convince you that they've got the best deal for you. Number six, you're a problem solver, but you don't have to solve every problem. So you hear the term problem solve, which I like.

I think that's a very, it's a good mindset to generate a lot of money. So that's just kind of the society that we live in. If you find someone that has a problem and you can solve it, most people are willing to pay for it. So you're a problem solver when you call on a seller because there's a reason that they're not going through a traditional path of a real estate agent because they've got a bigger problem. And it's your opportunity to solve that problem. But you don't have to solve every problem. If a seller has a problem just way too big for you to solve and the rewards aren't going to outweigh the

work or the risk, then you don't have to. You can walk away from it. So don't feel like you're obligated to do that. Number seven, we're doing sellers a favor by buying their property. you're doing them a favor. And I wouldn't even go reach out or go as far to say that when someone lends you money to buy a house or for one of your projects, you're doing them a favor too. The hard part is finding the opportunities. The hard part is being able to buy a seller's property. They've got a bigger problem, whether it's the seller or a lender. The seller is like, I need to do this fast and you do it now.

And I don't even care if it's a discount. Can you just take care of this so I can take care of this other big thing that's going on in my world? So you're doing them a favor in that way. And someone that gives you money, you know, the average person, where are they going to put it in the stock market? Put in a savings account, a CD, put it in a 401k that they got to lock it up for 20, 30, 40 years before they could reuse it. But if they could give it to you and you could produce them a return greater than where it's at, then you're doing them the favor. So don't think that just because you don't have money.

money, if that's your situation, that you're at some sort of disadvantage. No, you're at a great advantage. They don't know how to find deals. That's why they're dying to give you their money. In fact, if you get enough of those people and you start sharing deals consistently, they'll start competing to give you their money. Ready? Number eight, set expectations up front.

Frequently with some of my clients, with many of my clients over the years. They've asked, well, what do I do if the seller finds out I'm wholesaling the property? or what do I do if I have to go renegotiate the contract because the inspection report turned up something? How do I do that? How do I ask for a price reduction? And the way you do that is don't do it when it happens. You do that by setting those expectations up front.

And, you know, just upon the time when you get your contract signed as an example. You know, Mr. Seller, I think this property is going to be great for my portfolio. I can't wait to start my due diligence and just confirm that. but if for any reason it turns out to be not the deal I think it is, you know, we'll have that conversation then, or you know what, I'll just have somebody step in my shoes and they'll buy it. I've got a huge network of buyers and other investors

that would be glad to do this for me. What we'll do is those, we'll just make sure that we get you the money that you were promised and the time that you're promised it, is that fair? But just by setting those expectations, like this could happen, that could happen and this could happen. But here's the desired outcome. And so that's what we're striving for.

And if the market allows us both to win, we're both going to win. All right. So set expectations up front. And when you do that, give the seller permission to say no. And the reason you want to do that is because a lot of people are uncomfortable with telling people no. So they won't say no.

It'll sound something like, I want to think about it. Or let me talk to my wife or let me talk to my attorney. Let me sleep on it. When really, they're saying no to you. But you leave that meeting like, okay, that sounds fair. that's reasonable. Of course, it's a big decision. Of course, you want to sleep on it. And now you're sitting there waiting when you should follow up and then you're getting frustrated because they don't answer your calls or they continue to give the runaround or

they're thinking about it some more, whatever that may be. Do you have to give the seller permission to say no, create a nice, safe space? And, you know, how that happens is, you know, Mr. Seller, want you to show me around the house and point out everything that you think impacts its value, whether it's positive or negative. I'll take notes. And if it Anytime I feel like this isn't going to be a good fit for me, I'm going to let you know. Is that fair? Great. And all I ask in return is if at any time you don't think this is going to be a good fit for you,

will you let me know? Are you comfortable telling me no? Do we need to have anybody else here to say no? Right? Creative, like, it's just totally okay. Either way is 100% okay with me, right? The other part of the mindset on that, this would be number 10, it's their loss if they say no.

Right? Because you are a real estate professional. You are a real estate problem solver. You can make this happen. You can make their problem go away. And, you know, if they want to go and explore other opportunities or other offers or other solutions, then that's their loss. Because you know you provide the best service. That's your mindset.

And you're going to get them out of their situation. Number 11. Sellers sell for their reasons. Not yours. Right? So you want to get down and dig deep as to why they are selling. And that comes to the next one, the motivation. If there's no motivation, there's not going to be a discount.

Right? The foundation of every deal lies within the seller's motivation to sell. Number 12, this would be, yeah, 12. Never answer an unasked question. Remember, it's your job to get information, not to give it. So don't volunteer too much. You can talk yourself right out of a deal, particularly right when you're about to get your yes and then you keep on talking and then it turns into a no or I want to think about it.

13, you can be a part of your own plan or part of someone else's. This is why I always ask our new RA's clients to establish their minimum deal standards. And those deal standards should be based on where you're trying to get with your real estate investing efforts. So have your own plan because if you start compromising your standards and making unnecessary concessions, all of a sudden, you're starting to become part of someone else's plan. So know where you want to go, know what you want, how you want to get there, and know what you need to get there with regard to your deals. Number 14, no mind reading aloud.

No mind reading aloud. So if you expect something or expect the seller is thinking something, inspect it, ask about it. you know, I don't think this meeting is going very well. You know, Mr. Seller, I have to ask, that's what you're thinking. I don't think this going well. But don't expect that. You want to inspect to confirm that if it's not going well. Most of the time, these relationships are brand new.

You don't know how these people react and how they respond to different types, types of situations and stimulus. So, you know what? No, Mr. Seller, I'm starting to give the impression that this might not be going so well. Why would I be thinking that? Be quiet and let them answer. answer. Inspect what you expect. Next one. Well, this, I kind of said this one earlier because it fit better up there. I'll probably make that change. But no motivation, no discount. If there's no motivation, there's not going to be a discount for you. So if they're not discounting the property

during your negotiation, then you haven't found the motivation or there isn't motivation. Number six, you cannot fail at the money-making activities unless you fail to perform them consistently with persistence. I have never seen an exception to that one right there. If you want to succeed in real estate, all it takes is to perform them, the money-making activities consistently with persistence. Do the right things consistently.

And don't give up. If you're doing that, you cannot fail. It's the law of cause and effect. You cannot perform a money-making activity and not get a money-making result. Now, that will happen at different speeds for people. It'll depend on their resources. It'll depend on their experience.

It'll depend on their intensity. But you will not fail. Everybody will get the results if they perform those money-making activities consistently with persistence. Right. And then last one, number 17, last one for now, I should say. Leverage creates wealth faster. And you might understand that. And some people will use that, oh, that's irresponsible or that's risky.

or whatever it may be. I'm not talking about that type of leverage. I'm not talking about over leveraging a property, biting off more than you can chew, you know, not having backup plans and not taking calculated risks using leverage. I'm not talking about that.

I'm talking about responsible, educated, calculated leverage. It creates wealth faster, but it creates wealth faster by causing your money to work harder. If you go out and buy a property, you put 20% down and you borrow the rest, That's a five to one ratio of how hard your money is working for you.

That's five times faster than it would be if you went to go buy that property outright with cash. And it also creates wealth faster through inflation, induced debt destruction, a lesson and expression I got from Mr. Jason Hartman. But I'm really starting to understand this. And when we're talking about inflation, and you hear about inflation, and most people, they got to grasp of what it is. But you know, and you might hear 2%, 2 and a half percent inflation. But most of those inflation rates, and I'm still dialing this in, but they don't include food or energy, the things that we use on a daily basis. And as an example, I was talking to Mercedes over the weekend.

She goes, did you know my Starbucks in one year has gone from 425 to 525, her latte that she would get? So what's that? A dollar increase in one year. So what that would be? Like a 20, 25% increase. So that's real inflation. The chairman of the Fed, Jerome Powell, might tell you they're managing it right around 2%.

But go to Starbucks. Go to the grocery store. Go, you know, look at your water bill, your energy bill. Look at the lumber costs to building houses. that's three times. That's three X, right? But the Starbucks thing is just a perfect example. That's a 25% increase in inflation. And that doesn't mean it's more expensive.

It means you need more of your dollars to buy it. Your dollar lost buying power. It's the exact same latte. It has the exact same value today as it did 12 months ago. But it takes more of your dollars to buy it. And so if it destroys the value, the purchasing power of your dollar, which can be a sad thing for us. But then on the other side of the coin is it also destroys the value of your debt.

So if you're using debt, if you're leveraging other people's money, whether it's a seller's money, whether it's private money, whether it's a credit card through Epic Fast Funding, or whether it's through a bank at Wells Fargo or Bank of America or your local neighborhood bank, It doesn't matter whose debt it is. If you're leveraging debt to build your portfolio, you're putting yourself on the right side of the economy. You're putting yourself on the right side of the Fed. You're doing what our country does to create their wealth.

And if you do what they tell you to do by putting your money into a savings account and save it and stock it away in a 401k, you're doing the opposite of what they're doing under the guise of you think you're creating wealth. All righty. So leverage. It creates wealth faster. It's such an important. It's an important subject.

It's the invisible wealth stealer. No one talks about it or they talk about it, but no one really grasps how powerful that thing is because you can't see it happening. In your bank account, you see a $100 balance, for example, and tomorrow you're going to see $100 balance. But you've lost buying power. There might be $99.80 actually of buying power in your bank account.

And every day it gets chipped away at. So think about that. So if that's going to happen, it's inevitable with the amount of stimulus that we've produced here in the country recently. I just heard that if this $2 trillion stimulus package gets passed, the one that Biden's working on right now and going for bipartisan agreement, which there isn't any at the moment. But if that gets passed, that means this year we have paid for four Iraq wars just with stimulus. It costs us $1 trillion to pay for the Iraq war. this will amount to $4 trillion this year. That's how big it is.

And when you start printing that type of money, that's money we don't have, by the way. It's not like it's money sitting there in the bank account. We're just writing checks. No, we're going to print that money. And the more money there is, the less buying power your dollar has. So that's real. It's coming.

So leverage, leverage, leverage. Because some of the things I'm doing right now, the properties that I own free and clear, I'm refinancing all of them. I'm pulling out my equity. Because inflation is going to kill your everything. equity too. So consider it.

Leverage. Pull it out. It's tax-free money. And you maintain ownership of your asset and you get access to go and buy more assets. And I'm saying take the money out and take a vacation. That would be a bad use of that money. But take that money out and buy more assets, more cash producing assets. Already?

I've got more to say on that, but I'm going to stop right there. So that's the epic edict. Work in progress. All right? So I've got a story to share. share about a mistake a new RIAease client recently made and what you can learn from it as it holds a significant key to get in stinking rich. And I've got that for you right after this. When you go to work for your money, does it return the favor? If not, no worries. You do not

have a money problem. You merely have an idea problem. We're cash flow savvy.com and we'd like to share a new idea with you around income real estate that can transform your financial future and accelerate its arrival. Go to cashflow savvy.com and download a free investors package cashflow savvy.com. You do not have a money problem, merely an idea problem. Cashflow savvy.com. More ideas, less worries. Cashflow savvy.com. So I'm working with a new real estate investor. She's doing great. She's going to be a total rock star. But when she told me that she just walked away from a seller finance deal because they wanted a balloon payment, I was like, what? You walked away. And I was about to get a, I was getting a little tense. I just felt like the fire in my

belly rumbling and my hairs were standing up on my arms. I was like, okay, then I caught myself. I backed down. It's cool. Baby steps. We're not that far along in her training yet. But did you know you can get stinking rich financing property with balloon payments? Well, let me tell you.

You know, last week, this client of mine, as we were debriefing after an appointment, she had told me that she had met with a motivated seller, an older gentleman, and she asked him if he could carry back financing for her. And he agreed. And she proposed a small down payment, of which he didn't object to that. but it was the 30-year amortized carryback that he didn't like. In fact, his exact words were, I'll be dead by then. You might have heard that before.

People don't want to wait that long. They might be open to seller financing, but they don't want to wait that long for their money. Now, like I said, she's still very new, and she didn't really see a solution there. So she left and said that she'd follow up like she should have. But I asked her, you know, what did he want the term to be? And she said she didn't ask.

But she explained it had to be a 30-year-old. year amortized loan in order for the property to produce a positive cash flow. So she thought that loan had to be amortized over 30 years. So she thought it had to be a 30 year loan for the cash flow to be low enough or excuse me, that payment to be low enough. So the property would cash flow. So the amortization, this is the reduction of a loan value over a set period of time. So if you could pay off a loan over 30 years, you'd most commonly pay it in equal monthly

payments. And if you reduce the term of the loan to 15 years, that equal monthly payment would have to be much higher since you'd only have. 15 years to pay it. Make sense? So that was her concern. That higher payment would amount to more than what the property would produce in rent. Therefore, the property would produce a negative monthly cash flow. So under conventional financing with a bank, she would be absolutely correct. Under just normal everyday math, the way I explained it just now, she would be correct. But we're dealing directly with the seller of which enables us to get creative with the financing.

So I went on to explain, it's possible to get the payment of a 30-year amortized loan with a 15-year or a 10-year or even a five-year term. And you can do that by introducing a balloon payment at the end of that term. So you get an amortized over 30 years, so you have the payment of a 30-year loan, but then you have a balloon payment, it's somewhere sooner, 5, 10, 15 years, whatever may be. Right. So now a balloon payment, this is a final payment that is much larger than any earlier payment made on a debt. typically it's going to equate to the outstanding balance to be paid at the end of the loan term. But it doesn't have to be.

You could break that up into multiple balloon payments if you wanted to. But she understood all that. But her next question was, and I get this almost every single time someone hears the word balloon payment for the first time, where am I going to come up with all that money in five years or 10 years or three years, whatever that term would be? Well, it's actually pretty easy. And I'm going to give you multiple places to where you can get the money in just a second. But this is how you get stinking rich with balloon payments.

And I'll go ahead. I'll continue to use her deal as an example. First, understand that the objective to real estate investing is not to necessarily own it, but to control and profit from it. See, by accepting a seller's terms with a five-year balloon, you'd profit monthly per the positive cash flow. You'd also pay down some of the loan. That's the amortization, which I consider profit as well.

Then you'd also get the tax breaks from the property. And there's a decent chance you'd see some appreciation. as well. So mission one is accomplished. Multiple streams of profit achieved over those five years. Then mission number two is control. You see, it was Nelson Rockefeller who famously said the secret to success is to own nothing, but control everything. And in this instance, she'd be named on the title of the property, but more importantly, she'd control it had she accepted a balloon payment. The control was the important part, but she gave up control because she was afraid of the balloon payment. So therefore, no profit, right?

So as John F. Kennedy famously said, a rising tide lifts all boats. So having a balloon payment in your creative financing toolbox enables you to get control of a lot of boats. The more you control, the greater you do when the tide rises. Control is so important. So that's how people get stinking rich with real estate. One, they control a lot. And two, they profit a lot while they do control a lot. while they do control a lot.

And when the tide rises, their wealth grows exponentially. Now, regarding profit and control, most people understand that part, right? That wasn't probably too foreign to you. And so did she. She totally understood that. But to address her concern,

what do you do when the balloon payment comes due? Well, let's look at all of the options that creative real estate investor has at their disposal when balloon payments are involved. And I came up with six of them. But there's more. And I'm sure you might think of another couple yourself. But that's the point.

You're limited only by your own creativity. Number one, the worst case scenario in five years, you got to give the property back. Give the property back to the seller. There's no default jail. You're not in trouble. And unless you have a super sophisticated seller, the amount carried back by the seller is a non-recourse loan.

It's not going to impact your credit score even. Now, I wouldn't consider this a win. Nobody feels good about doing this. Nobody wants to do this. But I wouldn't consider it a loss either. You see, you profited from the property for five years. The seller received a down payment and monthly payments for five years. It wasn't a waste of time.

And actually, even if the seller doesn't see it this way, because a lot of times they don't, even if they don't see it this way, you are doing them a favor. You see, when they get the property back, they get to sell it all. over again and likely for a higher price. And that dynamic right there, that should give you some insight as to why banks are in the business that they're in. They make money by originating loans and they make money when their borrowers default on those loans.

Right. Number two, refinance. After up to five years of property performance, and you don't have to wait five years, by the way, replacing the seller's loan with a conventional loan or a private loan will typically be easier than an original purchase loan. Plus, it's not so time sensitive. Because the property is going to have a track record. It's going to have some equity per the down payment and some monthly payments and

then whatever appreciation you experienced along the way. So two, you can refinance. Number three, you could sell it, right? You likely negotiated a discount purchase price right up front. You likely paid some sort of down payment. You made monthly payments along the way. And there's a better than average chance you also experienced some appreciation. you're going to have some equity in that property.

And selling the property is a very viable solution to the balloon payment, not to mention a nice chunk of cash for you to put in your pocket. Right. Number four, portfolio management. Now, if this were the only deal you ever did and you weren't already wealthy, yeah, you might be limited to those first three options. But a lot can happen in five years. For example, you do more deals.

you buy more property. You build a portfolio. You see, when you have a portfolio, your options are essentially endless. I mean, it's easier to manage the finances on a portfolio of properties you purchase at a discount and are producing profits than it is to find new discounted properties that produce profits. It's easier to manage the portfolio.

I mean, you could refinance a different property in your portfolio to pull out the cash to pay the balloon payment. You could sell a, different property in your portfolio to create the cash to pay that balloon payment. Or something I do with all of my seller finance properties is I insert a substitution of collateral clause in the loan documents. What that does is it allows me to move property A's debt to property B's, making property A a free and clear property, which would make it very easy for me to refinance or sell

property A to pay off a balloon payment for property C or D or E. You have to rewind that, I understand. But just properties, A, B, C, D. If you have multiple properties, you can move debts from one property to the other to help pay off another. So when considering a balloon payment for one of your seller finance deals, don't view it in a vacuum. And it's just one deal of the many that you're going to be doing over the long term. And that brings me to the next option.

You're likely flipping properties too. You're probably wholesaling properties. You're flipping properties. You might be fixing and flipping properties. So don't discount the. probability that you'll have accumulated some cash along the way. And that's why we're doing this, right, in the first place, to make some money. So you're going to do more deals.

And when you're super concerned with the balloon payment five years from now, what you're actually doing is you're selling yourself short, assuming that you're going to be in the same position you're in right now. Don't do that. You're going to get better. You're going to do more deals. You're better than that. All right?

So number five, with that in mind, you could just pay it. You can just pay the balloon payment when it's due. Or six, pay it off early. Yes, early even. You know, my strategy for all of my seller finance properties is to set a reminder every six months to give the seller a call. And that conversation sounds something like this. Mr. Seller, it's Matt.

And I've got another property. I'm getting ready to purchase. And I've been making my $300 payments to you each and every month. And I still owe you, I don't know, about $50,000. And I was just calling because before I buy this property. I thought I'd just call you first and offer to settle our balance for 40,000 instead of giving it to the seller for his property, for this new property. Would you like to do that? And then just be quiet and wait for the answer. If they say yes, super. I just got an additional $10,000 discount off whatever discount I originally negotiated. If they say no, I say, okay, no problem. And I keep making my payments. And then I'll call again in six months and have a similar conversation. to make that offer again. Now, I get these early payoff proposals accepted within three years,

about 70% of the time. Because the seller typically is emotionally less attached to the property later on down the road. And they get tired of receiving the small monthly payments. And they find themselves either needing or have plans for a big chunk of cash. Life changes. I can use that cash right now, even if the payoff is at a discount. You know, in my world, a fast niggle, beats a slow dime. And oftentimes in the seller's world too. So embrace the balloon payment.

No need to be afraid. That's a poverty mindset to be so. You are a creative rock star real estate investor. Got it? A balloon payment is a big nothing burger of a challenge for someone like you that listens to this podcast. All righty. So I've got the news coming up right after this. Real estate investors listen carefully. A closely guarded secret reveals that closely guarded secrets aren't really that closely guarded. Seriously, go to find motivated sellers ASAP.com to get the inside scoop on how the nation's most successful real estate investors really find their deeply discounted properties.

Go to find motivated sellers ASAP.com. Deeper discounts, less secrets. Find motivated sellers ASAP.com. All righty, in the news, stocks heated up in April and have posted meaty year-to-date gains, as you have probably been aware if you've been watching the news. The stock market has been on fire this last couple weeks. Energy and financials are having a big 2021 after getting clobbered by tech in 2020.

COVID news. The U.S. hit a daily record for vaccines administered on Saturday. That's 4.6 million people have been vaccinated. Hopefully it's returning us back to normal very soon. And then on 60 minutes last night, as I'm recording, this Fed chair, Jerome Powell, said the economy is at an inflection point, meaning if the U.S. is able to deflection point, meaning if the U.S. is able to defeat the virus in the coming months, we could see big job gains and growth ahead. Let's all shoot our prayers up to the almighty one, and hopefully we defeat this thing.

And we've faced a number of shortages over the past year, toilet paper, grape nuts, lumber. But one shortage continues to stand above the rest in its ability to damage the global economy, and that's semiconductors. Senior execs from almost 20 companies are heading to the White House today to discuss the current chip shortage and ensure more supply chain chaos doesn't break out in the future.

The chip shortage has affected virtually every major car company in recent months, according to the Wall Street Journal, forcing automakers to halt production of their most popular cars. Both GM and Ford said the shortage could knock profits by at least $2 billion. And for the kids, Sony said the chip shortage is the reason why there are so few PS5s available. Now, looking ahead, don't expect today's White House meeting to conclude with a mission accomplished banner. Nope, COVID-19 exposed deeper systemic issues within the semiconductor supply chain, really over-reliance on China, and just simply not enough chip makers. So those are going to take

years and hundreds of billions of worth of investments to resolve. It was a busy week, though, in the world of sports. For college football, the University of Central Florida allowed its players to wear their social media handles on the backs of their jerseys during the spring game on Saturday. This is a new age of personal branding. We're going to embrace it, said UCF coach and verified cool dad, Gus Malzahn. The Timberwolves are getting new owners, fresh off losing a bidding war for the New York Mets. Baseball star turned businessman Alex Rodriguez is teaming up with e-commerce legend Mark Lour to buy the NBA's Minnesota Timberwolves and the WNBA's Minnesota Links. The current owner of both teams, Glenn Taylor, bought the Timberwolves in 1994,

for 88 million. He's selling it for 1.5 billion. Nice little profit. And golf history was made this weekend. With his victory at the Masters, Hideki Matsuyama became the first male Japanese golfer to win a major tournament. And in case he didn't know, Japan is very into golf. It has as many courses as the UK and Ireland combined. More than 100 business leaders hopped on a Zoom call to talk about voicing more criticism of controversial boating bills per the Washington Post. Iran called a blackout on one of its nuclear sites, nuclear terrorism. We don't have many details, but experts are suggesting it may have been a cyber attack carried out by Israel. The Chinese government find Alibaba, a record $2.8 billion as it ramps up antitrust oversight

of its own tech giants. That's a reason for us to all be very grateful we live in the United States and to watch our politicians closely, however, because it could be going this direction. Alibaba, if you didn't know, is kind of China's version of Amazon. And Jack Ma, the owner, the founder, the CEO, just got a little too big. And basically, the Chinese government is just taking his company away from him and given him the boot. So it's now owned by, I think the Chinese National Bank will be running the operations there. Anyway, God bless America. And let's not go that direction because that seems like where we could potentially go.

Economic data. The biggest report of the week is Tuesday's Consumer Price Index, which will reveal how worried we should actually be about inflation. Retail sales, Thursday, and housing starts Friday are two other data points to watch. Earning season is upon us, so get hyped. Big banks, including J.P. Morgan and Wells Fargo kick off the festivities on Wednesday. Other companies reporting quarterly financials this week include Pepsi Cola and Delta Airlines. Side note, corporations have trounced analysts' expectations for the past three quarters.

We'll see what this week holds for us. And that will move us right into this week in crypto. Coinbase, the app I told you all about last week. We'll go public on Wednesday. And many industry insiders see this as a bullish event for a wider crypto space, but also one that may eventually lead more people into decentralized finance. There is a number of potential results that industry insiders see coming out of the exchanges move to go public. But many seem to agree that Coinbase is an important gateway to getting started in the crypto sector,

meaning it's the front door for mass adoption. I just got Mercedes onto it. I just got my trainer onto it, my gym trainer. And I just got a guy on my mastermind onto it. And just because it's easy. There's a lot of different ways to get into it. But going through the Coinbase app is probably the easiest way to do it. And then Bitcoin, it's back with a vengeance this week as this week's trading gets underway with a fresh attack on a 60,000.

value. Now, if you don't know anything about crypto and you hear that one Bitcoin cost $60,000, you don't need, this is a big misconception, you don't need $60,000 to get in. No, you can buy fractions of that Bitcoin. And it's just like, it's just like a fraction of a share of a stock. Actually, those two things are very different, but it's the same concept. So you can put 500 bucks in and get a portion of a Bitcoin. So you don't need $60,000 if that's what you were waiting for, what you thought had to have happened. Meanwhile, Ethereum, the second largest cryptocurrency by market cap, came close to $2,200 just days after breaching $2,100 for the first time. While it's unclear if there's a causation, the price action comes just days before leading U.S. Exchange.

Coinbase begins trading on NASDAQ in one of the crypto industry's most anticipated events ever. It's a sign of the maturing market. The listing will likely give Wall Street traders their most accessible bet yet on growth in the space. This is key. This is key. If you've been waiting to get in, this is kind of like where it could explode because it's going to be one validated as a real asset class,

as a real financial exchange. And once that validation is given to it by appearing on NASDAQ, you know more and more people are going to start moving in. And when more people start moving in, that's going to drive that price up. So better to be in before then, then after. That's my opinion, not at financial advice, by the way.

Nothing of what I'm sharing here is financial or investing advice. Cryptocurrency, it's proven to be a very volatile investment and downright risky if you invest more than what you're willing to lose. I'm only sharing this with you right now because I'm working on a couple of crypto slash real estate hybrid investments that I'm going to be sharing with you soon. And all indicators are pointing to it becoming a very standard way of me investing in real estate from this point moving forward. regardless of the volatility of crypto. And that'll become clear as I go through it. I'm almost done with it. Give me another week or so probably.

And I'll complete the whole cycle once. And then I can tell you about every single step along the way from personal experience. You know, as risky as cryptocurrency is, the second reason that I'm sharing this type of news with you in the podcast now is that I believe the real risk in cryptocurrency lies with in avoiding the risk of cryptocurrency. Does that make sense? I think it's riskier to not be in it than it is to be in it, although being in it is risky, if that makes sense.

All right. Like the stock market, like the real estate market, the cryptocurrency market will go up and down. It's going to do that and almost assuredly to greater degrees if history repeats itself. But like the stock market and like the real estate market, it's my belief that it will always go up over time. It's here to stay. And I'd be remiss if I didn't share what I've learned with you and what I'm doing.

so that you have the same opportunities to incorporate it into your wealth-building financial freedom-creating plan. Right? And if you got no interest in it, no problem. That's why I share it here at the very end. So you can still tune in to the show for the same reasons you've come to expect and love it for. So you could always skip over this part if you don't want to hear anything about crypto, because I'm not going to do anything after crypto other than say, that's this week in crypto. And that's the show.

If you found this episode valuable, who else do you know that might too? There is a good chance you know someone else who would. and when their name comes to mind, please share it with them and ask them to click the subscribe button when they get here. And I'm going to take great care of them, all right? That's it for today. God loves you, and so do I. Health, Peace, Blessings, and success to you.

I'm Matt Terrio. Yo. Yeah, yeah, we got the cash flow. Yeah, yeah, we got the cash flow. Yeah, yeah, we got the cash flow. You didn't know home for us. We got the cash flow. This podcast is a part of the C-suite Radio Network.

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