Epic Real Estate Investing - Jason Hartman of The Creating Wealth Show | Episode 119

Episode Date: September 1, 2014

On today’s episode, Matt is swapping stories with fellow podcaster, Jason Hartman, of The Creating Wealth Show.  Though their stories of finding real estate were different, what they’ve learned as investors is strikingly similar.    The duo is talking about the importance of consistency and hard work, the power of passive income, and why not following the masses could be the key to your success.  They also touch on the ever-changing investing and economic landscapes, and why neither of them tends to worry about the gloomy outlooks so many other investors focus on.  Enjoy! -----------------   The free course is getting a facelift and the new version will be released soon!  To access to the two fastest and easiest strategies to a paycheck in real estate, go to FreeRealEstateInvestingCourse.com or text “FreeCourse” to 55678. What interests you most? E ducation P roperties  I ncome C oaching Learn more about your ad choices. Visit megaphone.fm/adchoices

Hey, real quick, before we get on with today's very special episode with Jason Hartman, this Thursday night at 6 p.m., that's September 4th at 6 p.m. Pacific Standard Time, I'm conducting a very special training for those looking to simplify, grow, and hedge their real estate investing business and or their portfolio using other people's money, OPM. Now, this training, it's not for everybody. If you've yet to do your first deal, probably not a good fit. You're still welcome to attend, though, but still, I just want you to know it's probably not a good fit, but you are more than welcome.

You see, the expert leading this training with me discovered a very unique way of implementing Wall Street's hedge fund principles into a real estate hedge fund. He set up my hedge fund for me, and should it make sense for your business at this time, he'll show you how to set one up for yourself. In fact, that's exactly what this training is all about. How to set up your own real estate hedge fund

and how to diversify your portfolio and invest in a good real estate hedge fund. It shows you how to find a good one and the right questions to ask and how to identify one. So my coach, as I'll refer to him, asked me to invite serious and experience investors only. And since I have no real way of knowing who is sincerely serious and experience, he suggests the idea of inserting a short survey and a small fee, $97, in the registration process to do the sorting.

And honestly, I just couldn't think of a better way. So I'm just kind of following his lead on this. So if you'd like to sit in on this private training, you can register at epic syndication.com. Epic Syndication.com. And by the way, the $97 fee is fully refundable should this training not live up to your expectations. So if simplifying, growing, and hedging your business, your real estate portfolio,

using other people's money seems to make sense to you at this time or will in the very near future, go to Epic Syndication.com and reserve your seat. Only 100 seats available, okay? Now, regarding today's show, I mentioned a couple of episodes ago that I met Jason Hartman at my Mastermind event, and he turned out to be a really cool guy.

I mean, who knew, right? So we had a phone conversation the other day about real estate in general, about the future of real estate investing, among other things. And we recorded the conversation. And today, on this Labor Day, I thought I would just play it for you. Hopefully you're doing something much more fun today than listening to this podcast. But if not, the second best thing you could be doing is educating yourself. And I'm glad you're here with us. There's some good nuggets in our conversation stuff that is rarely, if ever, discussed on this show.

I think you'll enjoy it. So without further ado, enjoy your holiday. enjoy the show and I'll see you Thursday for another episode of third degree Thursdays. Broadcasting from Terrio Studios in Glendale, California. It's time for epic real estate investing with Matt Terrio. All righty. Welcome everybody. Hello, Mr. Jason Harmon. Hello, Matt. How you doing? Doing very well. You know what we're, you know what we're doing today? We're going to freak our listeners out because I know I know we have mutual listeners and they don't know which show they're listening to right now.

That's right, because it's going to appear on both shows. Yeah, that's right. Super. So we can save you guys a trip depending on where you're listening to it first. But we decided we want to do something a little different. The podcast world is, we were talking about. The word that we used was incestuous. It's a little incestuous is an understatement, man.

It's very incestuous, yeah. Yeah, so everybody's reviewing everybody or interviewing everybody. And we just thought, well, let's just talk and let's record it and see what happened. This will be like that show. I've listened to it about two times, but it's called No Agenda. And these guys just sit and talk for like two hours. But we promise not to go that long, dear listeners. Oh, God, we just lost half of them.

Yeah, yeah. Don't hang up yet. Don't turn off your smartphone. We will not subject you to two hours of us rambling. Not at all. Jason, I've known of you for quite a while. I know you're one of the very first, if not the first, like significant real estate podcasters. I think we've been like one degree of separation for the last several years, and we just got to meet last weekend.

I have no idea really what your business is about, how you got started, and what it is that you do. I just know you're like this real estate guy. So I don't know, share with me how you got started. I grew up kind of poor, lower middle end of the economic spectrum, and I didn't like it very much. And when I was in 10th grade, I saw an infomercial about real estate investing. And I thought, this is the answer. So I went out and bought the book. It was Robert Allen.

I bought his book. three chapters of it while I was in high school. I put it down. My mom read the rest and got fascinated by the topic and she started going to all these real estate seminars and by the time I was 18, I was just about to graduate from high school and my mom says, hey Jason, you know, there's this big real estate seminar in Anaheim by Disneyland. We lived in Long Beach. Why don't you come? You're the one who got me interested in this and there will be all sorts of speakers. You know, it was basically one of those weekend pitch fest where, you know, starts on Friday night and goes through Sunday evening. And I went, Matt, and I... You were in high school at the time?

I was in high school, yeah, I rounded up, you'll like this. I rounded up nine of my buddies from high school, because, you know, when you're that age, you can't do anything alone, right? So I went to the seminar, and all of them came Friday night, and only one was left by Saturday morning, all the rest went to the beach, and that was myself and my friend Rich, and then he faded out, and I went and I saw every speaker the entire weekend. And I didn't know what they were talking about. You know, it's like they were talking in a foreign language to me, basically. I didn't know what a point was or APR or any of this stuff. And so, yeah, or escrow.

And I got my real estate license just to learn, you know, I remember I was a big Earl Nightingale fan since I was 17 years old. Listening to Earl Nightgale and Dennis Waitley and Zig Zigler and Jim Rohn, that just changed my life. I mean, I wasn't exactly the best teenager. I became a really good person with a success mindset and became a really conscientious, like, good citizen. You know, I just wanted to learn more about what they were talking about. So I went to real estate school, got my license for the $99 Century 21 school,

and started selling real estate while I was going to college. My first year of college, I was 19 when I got my license. And I had only ever earned, I'd been working since I was 14 years old. I'd only ever earned minimum wage in my whole life, Matt. Then by the time I had my first full month in real estate, I made $43,000, gross, gross. You know, I had to split that with my broker. And I thought, this is so easy. All I did is I put these little classified ads in the newspaper,

advertising government repo properties, HUD and VA repos, all the boarded up really disgusting houses in the inland empire in Riverside, San Bernardino, California. And I would drive the people around in my brand new Volkswagen Jetta that I had just purchased, and I would sell them these little properties. And they bought them. And that was the start of my real estate career. And then my investing career started shortly after that. That's the basic stuff.

How about you? Tell me about how you got started. It was funny that you had said Earl Nightingale because that was my first introduction to personal development and entrepreneurship. I didn't go straight into real estate. I took a different route through the music business. Had my own record label with major label distribution and did very well for several years. And then that digital download thing came and just kind of turned the whole thing upside down, the whole industry. And I was age 34 bagging groceries. Wow.

Yeah. One day I was puffed daddy and then the next day, Poof it was gone. What kind of musician were you? A hip-hop music producer. And so I started off making instrumental records for disc jockeys, the kind of DJs that would scratch and use two turntables. And so I was doing that and doing okay, selling those out of the trunk of my car and kind of evolved up to having friends from the neighborhood,

go ahead and wrap on top of those and started selling those. And sold enough to one point caught the attention of EMI, and they picked us up and gave us a big fat distribution deal and went from there. Did you make a ton of money? Like, what is a record deal like? take us inside that a little bit. Sure. All of us real estate investors want to know.

Well, you mentioned like, you know, you'd never made more than minimum wage before and then you gross $40,000. Right. In a month. That was a ton of money. I mean, that was a lot of money. Because at that point, I was driving around from store to store all through Southern California.

I had a route. I'd start in Los Angeles and hit Orange County and go down to San Diego, then come back up north through Riverside and all the way to San Francisco and back around again. And I'd probably hit, I don't know, 50 record stores. in that rotation. And I would get just ecstatic if I came home with like $2,000 from that trip. And I did that trip once a week.

And when I got the distribution deal, there was a middle deal there. When a guy said, I'll take $500 of that one specific record. When I've never sold more than two or three at a time to a store. And that person said $500. I was like, wow, this is something. And my check was like $3,500 or something. Then EMI came knocking. They said they were going to give me $100,000 for records I hadn't even made yet.

They were going to give me an advance. Wow. So did you get that advance? Yes, I did. So at 23, 24 years old, I got a check for $100,000. Wow. And that was just like... I bet that didn't last long. I definitely had my fun for sure. But I was able to put out records and I kept that going and kept it growing for a really long time. That's how that started. And there was bag and groceries. And I have a funny story about after about six months of bag and groceries was quite the pity party and feeling sorry for myself and crying on every shoulder that I could find. And there was no shit. shortages of pats on the back telling me it's going to be okay. And I think really, Jason, I was just

kind of waiting for someone to help me. I was like, someone please give me a break. Someone give me a helping hand. It took a while for it to sink in that, wow, this is actually my life. You know, it's up to me. I've got to do something. No one else is going to do it. And I think there's one day in particular where my store manager had noticed that I was sadder than normal. And he had said, Matt, what's wrong? And I basically just told him the whole story. I just told you in much greater detail with more drama. But he said, why don't you come up to my office? you something. And he took me up to his office and he laid out, he had been working at the grocery store for 28 years and he was just two years away from receiving his pension. And along the way,

those 30 years, he had required a half a dozen apartment buildings. Wow. Wow. This is going to be a great story. I just know it. Yeah. Well, he just kind of laid out like, okay, I've got this pension here and I've got my income from these apartment buildings here and I'm going to retire and no one is ever going to hear from me again. Where was this located? By the way, where were you? I was bagging groceries at Rouse in Manhattan Beach. Manhattan Beach, California, all right? Yep. He'd said some words to me that have stuck with me ever since, a couple phrases. One thing, he said, Matt, I started doing this because someone told me that real estate was the final frontier where the average person has a real shot at achieving great wealth. And I believe that is still true. Do you? Okay. At the time, I didn't know.

I knew I needed to believe in something because I had nothing to believe in. And he said, if you want to recreate the lifestyle you had in the music business, real estate presents the greatest possibility. for you to do that again. He was a wise man, right? Yeah, yeah. Well, he did it right. And he had the evidence, so he was very believable. So he was a grocery store manager. This is why there are so many wealthy school teachers and firemen and cops and pilots and flight attendants and people like this, because anybody where you've got a job where you don't work extremely long hours, and you do a second thing, you start buying some little houses on the side. Usually you're fixing them up yourself with your own on the weekends or days off. You don't have to do it that way. That's sort of the old-fashioned

method of investing. It works and it's sort of noble in a lot of ways, I think. There's a lot of these very unassuming people that have some really nice wealth built up for themselves. And, you know, maybe it's not like they're a multi-multimillionaire or anything, but they've got a good nest egg. It doesn't take a real high income. You know what it takes, I think, Matt? It takes starting and then it takes consistency after that. You've got to just keep collecting. If the path is, 10 houses a year, great. If it's one house a year or one house every two years, whatever that pace is for you, you just got to start and you got to keep doing it because the cumulative effect is awesome. Look at your store manager, right? Yeah, couldn't agree more. That's how it worked out for me as well. So I just kind of duplicated what he did. I think to a much greater degree at this point, but when I got started, it was just to do what he did. And hopefully I didn't have to work at the grocery store for 30 years. But that night, I grabbed a bottle of wine from the grocery store and went home and just started Googling everything real estate and ran across an aunt that I hadn't seen in 15 years. And she had been the number one real estate agent for the last 27 years, just two cities over.

I sent her an email because it just seemed like the right thing to do. And she responded in the morning. And that afternoon we met for lunch. And I think 48 hours later, I was in real estate school to get my license. Wow. What year is this? That was 2002. When you started, you had email.

Yeah. And you had Google. Well, I didn't have any of that. Right. We used to use paper. Yeah. And it was up to both ways. Yeah.

But both ways. You were advertising classified ads in a rather progressive form of doing it. Who taught you that? Well, my mom was doing it. I really got her interested in real estate, but she got her license six months before I did. And she started selling government repos at a firm called Americana Realty in Bellflower, California. She would just place these ads. they'd be little ads in the register of the penny saver and people would call you know back then you had a phone

machine you didn't have any such thing as voicemail and i remember my little phone machine i would come home i lived at home i lived with my mom in san anna at the time and i would come home and i'd see that little red light blinking and i'd be excited and then i'd push the button and says oh you've got 38 messages and i was so excited i would just make all the callbacks and i'd schedule appointments i'd meet them at the property or meet them at their house or my office and drive them to the property. It was amazing to me, Matt. Here I was 19 years old and all of these old-timer veteran real estate agents at Century 21 in Anaheim, it was on Beach Boulevard, they would be sitting around the coffee pot. They'd be smoking. Oh my gosh, I hate smoking. It's so disgusting. And that was when you could smoke indoors.

Like literally the office was full of smoke. It was gross. They'd be just sitting around complaining about why the broker owner of the office, they wouldn't buy them notepads to pass out, they wouldn't pay for enough advertising. And I just placed my own little stupid ads. I just spent my own money for them and I went out and just worked. And it was amazing. Five deals, my first month. I had just turned 20. That's amazing. All you got to do is work. The money's out there. The world is an abundant place. I heard those exact words from a veteran real estate agent right in the beginning. He said, all you got to do is work. Look at everybody here. He pointed out the people at the water cooler at the coffee pot.

And it was my first real exposure to if you do what everyone does, you're going to get what everyone's got. It was a good lesson to go against the grain. Everyone would hold open houses on the weekends. I held my open houses Monday through Friday. Right off the bat, it got me a rookie of the year in my office. And I did a little bit better than next year. And then I switched offices and did better then and better then.

And after four years of that, I was like, hmm, I'm working an awful lot. And I had a client that gave me this repeat business over and over again. I remember there's one Saturday. The total turning point. I'll never forget it. We had an appointment at 11 o'clock on Saturday. He was coming in to sign his docs. And I was there all early in the morning, getting prepared, had a paperwork all laid out across

the desk. I was in my suit and tie. And he came in probably 20 minutes late in jeans and a T-shirt and signed his paperwork and he was off. And I was left there to process the paperwork and then go hold one of his houses open. And I was like, you know what? If real estate is where the money's at, I think I'm sitting on. the wrong side of the desk. Very good revelation. Before I got into real estate, my mother had two small

businesses. One was a pioneer chicken franchise, and it was in a terrible area of Los Angeles. I kid you not, she was held up at gunpoint, pistol whipped when the burglars came in and stole $1,200, made her open the safe, and they shot the gun into the ceiling and all this stuff. What I realized, and my mother realized, too, is that when you do something in business, it's good if you can do something that is a high ticket item. And real estate is a high ticket item. So you have these cash spurts where you can make a lot of money. And by the way, folks, we're talking about traditional real estate now. We're not talking about the investment side of the business, which is kind of different. But, you know, in Southern California, properties are expensive. You sell some properties there. You'll make a few

bucks on real estate commissions, but you'll never have the passive income. And the investors always really ultimately have the better life. Because like you said, you realized you were on the side of the transaction. I made a large investment in my real estate investing education. Based on what I know now, I realized how lucky I was to have found a good educational program first. There's a lot of bad ones out there. Yeah, I've heard so many stories of people to just go from one program to the next and don't end up any smarter than they were than before they got started. And they don't own any more real estate than they used to either. That's right. The bookshelf was full, but I didn't know any better at the time, but I luckily picked a really good one at the beginning. And within 60 days, I had had

my first flip done. Then it took me about eight months before I got my second deal. But then I kind of got the hang of it. And they just started to come in consistently. And I learned how to do it with none of my own money, none of my own credit. Because after a failed record label and filing bankruptcy and a divorce, it's like credit was nothing to speak of. And eight months in between my two investment deals, my cash was pretty much depleted. So I had to get creative. I had to get started with no money, no credit. And here I am almost 250 units later. Wow, yeah, good for you. So 250 units is that in like a holding portfolio that you're keeping or that you've flipped and kept and deals like total deals you've done or how do you count? No, no, no, I've done a lot more deals than that. So that's my holding portfolio.

Okay. I actually just counted this for last week's episode. I was had counted in a while. So it was 242. I'm in the process of doing some liquidation and upgrading properties. So I think there's something to be said for quality over quantity. Yeah. But that's a mix of multifamily and single families and duplexes and triplexes and all across the Midwest and in the South. After that educational program, that's about the same time I was introduced to the book, Rich Dad, Poor Dad, and introduced to the concept of passive income. And I heard of the expression before, but I never ever stopped to think about it or how to create it or what my life would look like with it. It just seemed like something for somebody else.

I just kind of got a grasp of it, you know, reduce your expenses and increase your residual income. And once that residual income surpasses the expenses, you are essentially. financially free. Right. That's that you're out of the rat race, as Keyes Nussie puts it. Yeah. Exactly. So I was able to do that in about three and a half years. When you look at the statistics, 95% of the country can't do that in 40 years. Yeah, I know. It's really sad. But we're trying to solve that problem. We are. We are. So I wasn't rich or wealthy by any means, but I certainly did not have to report to anybody. So that was a really good feeling. All of a sudden, my sleep improved dramatically. I became a much more enjoyable person to be around. When you are

bagging groceries one year and a few years later, you are playing golf on a Tuesday. People that know you, your family, friends, associates start to scratch your head and wonder what's going on over here. Well, they think you're doing something illegal. They just know that it wasn't a good situation the last time they talked to me. Had a lot of coffee appointments, a lot of lunch appointments, a lot of dinner appointments of people wanting to quote unquote pick my brain. I heard that expression so often. Right. I was like, wow, now that I've got my portfolio, I can see that there's a lot of people that would like to learn how to do this. I think I have a unique twist on it, how to do it without using your own money or credit, let me give it a shot.

Here we are with the podcast for your strong running. And depending on which day you look is number one, two or three in the real estate side, it's all been very, very good. Let's talk a little bit about the industry in general, because you talked about the podcast. And I just want to share some thoughts with our mutual group of listeners as to, you know, the industry, the outlook for the market, that kind of stuff. You got a great story.

I've got a great story. Everybody's got a great story. As long as they do something, see, the common element of having a great story is that whoever's in the story took some action and actually did something. Otherwise, there's no great story. As far as the industry, you're talking about not the podcasting industry. You're talking about more like real estate agents. Oh, yeah, yeah.

Real estate investment business, you had mentioned the threat of them taking away some of the tax deductions, things like that. You're always hearing about it. You're always hearing about the government's going to change this or take this away or alter this. And I guess in some respects that we were impacted pretty significantly with the Dodd-Frank Act and how we can sell houses to the general population. And just so many more loopholes and hoops that you have to jump through. Right.

Not loopholes, but hula hoops. I hear about the interest deductions going away or taking incentives away from real estate investors. And it's always a concern. I know you'd keep up with that more. That's more of the subject or you talk about more of that stuff than I do. My take on it is that I don't worry too much about that stuff because everything in life and in economics always has an equalizing factor.

if they take away the deduction and they somehow disincentivize ownership of real estate and really the interest deduction applies to homeowners more than investors, because the investors, it's just a P&L. You know, you have your income and your expenses and your expenses will always be deductible. I mean, that's just like running any business. That would be a completely illogical thing. But for homeowners, it does matter. If the mortgage interest deduction were to go away or to be reduced, as it was many years ago, they reduced it, I believe, to one, million 100,000, I believe it is. And then there are some tricky things if you refinance and you can't go above bases or something like that. I don't remember. But this is not what I'm concerned with. It's not my

area because I'm not selling traditional real estate. We both only deal with 100% investors. I think that's true for you, right, Matt? My client is 100% investors. Yeah, same here. If they disincentivize homeownership, hey, that's fine with me because that just means the rental market will strengthen. You know, if people don't want to run out and buy homes, I have long said, I think the homeownership rate is too high. I don't think we should encourage the homeownership rate to be 65, 69%. If the government were to get out of the business of encouraging home ownership through tax policy and through government-sponsored entities like Fannie Mae, Freddie Mac, if they were to get out of that, I think that home ownership rate would naturally and rightfully fall to about 50%. What's that other 15% of the population going to do? They're

going to rent and guess who they're going to rent from you and I and our clients and our listeners. True. True. True. That's going to mean upward pressure on rents. And these things, folks, they always equalize, but here's the part that kills you as an investor. It takes time for things to equalize. When we hit the financial crisis in 2007, 2008, you know, depending on which part of the crisis you're talking about. But when we hit the financial crisis, you know, in many ways, that was really great news for a lot of people. The hard part is the two-year adjustment period that you've got to stay in the game and hold on when you think, oh my God, the world is ending, right? And the people that can look past that are the ones who always prosper long term. A lot of people, we've all been taught and raised

to think of our house as our primary residence as an investment. No way. And it is probably one of the worst investments that you could possibly put your money into. You know, oh, you agree. Okay, I didn't know you're going to agree so quickly. Okay. Yeah, if you put it on paper and just start matching investments for investments over time, it's a loser at best. It's not that bad. I'm not going to call it that bad a thing.

And we're talking to your own home, the home in which you live. Look at anything you live in and pay for is an expense. It's a liability. It's not an asset. The only time you get deceived is when you live in nutty illogical places like California, New York City or Miami, and maybe the expensive part of Chicago. When you live in those places and every 10 years, you've got three years of boom time. I mean, the cycle is almost predictable because it's always three out of seven, it seems like,

a boom years. When you've got that, it looks like an investment because it goes up in value. But that's just a speculation. You just got lucky. I mean, good for you. I've gotten lucky many times and I'd rather be lucky than good any day of the week. But I can't count on luck. So I'm going to count on at my old age.

getting more conservative. I'm going to count on prudent cash flow investments. Amen. Amen. You're right. In California, that can be a little bit deceiving. How could you say that, you know, my primary residence is not a good investment? But it is a timing issue. You've got to time it right for that to work out for you. But over the long term, considering the money that you put down, considering the interest that you pay, considering the appreciation and how that goes right in alignment with inflation, and then the missed opportunity cost of what you're doing with that money and then it's more expensive to purchase than it is to rent. It's just like you're not any better off by the time you got that house paid off. I'll agree with you there. And you know what else? You know what is a big hidden cost of

homeownership? And this is homeownership of your own home, the home in which you live. Is the amount of time people spend screwing around with a house they live in? I used to always own houses and I was proud of that. I bragged about it. I thought when I moved out of mom's house, I moved into a condo at 147 Remington Street in Irvine, California, and I bought it. And it was $102,000. And I sold it a year later for 160 and I thought I was a genius, right? I was lucky. I wasn't a genius. I did not know that what happened. I've always really pretty much been a homeowner. I can't believe now that living in Arizona, I've been a renter ever since I moved here for three years. And I love it. It's like I spend almost no time managing my surroundings. I don't worry about stuff that's broken.

I don't call and deal with repair people. I don't do any gardening. I don't argue with the gardener because the flowers died. I used to do all that stuff. It's such a waste of time. I remember, Matt, I used to spend half of my Saturday every weekend at the hardware store. I could be learning a new skill. I could have learned brain surgery in that time.

Of course. That's what we need. Jason Hartman. Brain surgery. Exactly. But no, you're totally right. And then you got property taxes too. That's a huge, depending on where you live.

We just moved into a pretty large house in Glendale. It's got an amazing view. It's almost 5,000 square feet. Please tell me you're renting it. Oh, we are renting. Oh, good for you. Yeah, and it's just an awesome house. And I'm there for two years because then I'm going to go to Malibu.

The neighbor came over just this weekend. My girlfriend and I were out exercising out in front and we just finished and she walked over to introduce ourselves. And part of the conversation is, oh, so are you renting? We are renting and we made every decision to. Are you owning? Oh, my gosh. You poor person. Yeah, just tell him you own 242.

units and they'll shut up real quickly. Yeah. Sometimes it's more fun to keep that stuff a secret. Snobbs. Totally, totally. Let's talk about education because we both got, you know, you went through that education weekend and you got the Robert Allen program and then you went to the pitch fest and I've done all that stuff.

You know, for someone wanting to learn how to invest in real estate, what would be your, they said, Jason, I want to do what you do. Where would you tell them to get started? You know, listen to the podcast because of it. They're free. It's a great way to sort of sort of sort out the scammers from the real people to get some education. But also, it's not just a matter of who's sort of a scammer and who's not and who's reputable. It's not just that. It's also what is your investing style? What's so great about real estate is it's so creative. There's so many things you can go into.

You can roll up your sleeves and get your hands dirty and really get engaged and be in the, I'm going to call it the real estate business, which is different than being, an investor. I'm going to say that my company, at least right now, and we adapt and change things from time to time, as every entrepreneur is always tweaking things and offering something new. Right now, what we really cater to is we cater to investors. But you might cater to people that want to be more active and roll up their sleeves and get their hands dirty type people, I think. I know you cater to investors as well, but I think maybe you do that too, right? We do both. Yeah. A good percentage of the people but come through the how-to course, the do-it-yourself course, discover, wow, this is a lot of work. It is a lot of work, yeah.

It's a lot of time. It takes a little more effort than I thought. And you know what? I already have a career. I don't need a second one. So why don't you just do it for me? Right. So that was kind of the natural progression of how that second half of our business started.

Now it's the biggest part of our business. You can get in the business. If you want another business, if you're looking for another career, heck, there's all kinds of great active real estate stuff you can do that will take a lot of time. but could earn you higher profits and higher returns. You get rewarded for time and money invested, right? And anything. Just what style of person are you?

Are you the guy that wants to be driving around neighborhoods and looking for the, you know, the don't wanter seller, as Robert calls it, or the ugly house as the home vesters franchise calls it? Or do you want to be at your desk and be mostly focused on your career and dedicate maybe one hour per month per unit that you own on average? We always like to say it's about an hour. hour per month on average for each property. So if you've got 20 properties, you need to sort of have about 20 hours per month available to manage them and manage the managers of those properties.

There's just different parts of it. You know, there's all kinds of different areas. You can be a buy and hold investor. You can be a whittler. You can do a million things. There are so many little tentacles to this business. What we just met two weeks ago was at our mastermind group. And, you know, my first time in there, I was like, wow, there are so many different ways. There's a lot of stuff here. to make money and you listen to people in their presentations and what they're talking about and where their challenges are and where their triumphs are and you're like, wow, I want to do that. And I mean, I've got an established business and I was still like, I didn't even know you could do that. There's unlimited ways to make money in this business. So you've got a lot of options for sure. Listening to the podcast, you're going to learn what type of investor are you. And what I want to say to people is try not to spend a ton of money on education.

You know, try to spend on education slowly and prudently. Because, a lot of that nowadays is cheap or free. In the old days, it wasn't that way. You know, when I got started, we didn't have the internet, okay? We didn't have podcasts. You had to buy books and go to seminars and sometimes enroll in really expensive programs. And that stuff is still available. Some of it is good and some of it is really, really bad. I can't tell you the number of people who have been to my seminars and said, they come up at like usually by lunch, by the lunch break. They'll say, you know, I just spent $9,000 or $12,000 or $58,000 on this guru's program. And, you know, I could have just bought two or three properties instead.

And I'm like, yeah, you could have. Most of the education you get is by doing things. I agree. You've got to be active. Nothing is going to replace the on-the-field education. Yeah, all the job training. But you got to start. You have to get a basic knowledge.

And like you said, discover what type of investor you are. Right. Because there are all types, as many personality types there are, or go hand-on-hand with their investor types as well. Absolutely, no question. I learned how to create my internet business. Now I've got two different internet businesses, all 100% for free, basically, from podcasts. On my other podcast, do over, I talked about that,

to look for inspiration of what you want to do with your life or what you want to do from this point forward. And podcast is just such a overflowing resource of just such awesome information. You get to listen to it on your own time. you get to evaluate it on your own time. It really is. And, you know, it's like Wikipedia. I remember talking to my mom about Wikipedia

when it first started to make a name for itself. And she said, well, you know, Jason, people just put their own stuff in there. None of that stuff is verified. But think about it really. What of anything is really verified in the world? What is true? What is true is the collective knowledge of a lot of people.

And now everybody listening to this has access to almost everybody else on the planet. and their knowledge. And it's really an incredible time in which to live. I mean, we are living, Matt, in an incredible, incredible era. And I tell you, right now, as I'm saying that, I have goosebumps. Because the things that are available to us nowadays are nothing short of amazing. In just the next five years, we're going to be blown away by the kind of technology that comes along. It's incredible. I know you and I were talking about robotics, and that was one thing that you're concerned about.

Concerned or hopeful, I'm not sure. which, you know, I keep trying to, you know, that's a good thing to talk about. I keep trying to understand where that's going. And you know, Matt, every new technology has displaced people and every new technology put people out of work, but then eventually, and it's always that adaptation time, that couple of years in between that kills people, there's always a lag time. That's why you have to have something in reserve. You know, a few minutes ago, we were talking about houses and how houses for living in them, they're not a very good investment. So don't become the house four. When I lived in Orange County, it's like everybody was house poor there. Don't be

house poor. You can rent that house for a lot less money than you can own it and just own a bunch of investment properties that make more sense. What do you think is going to happen with robotics? Well, I don't know. I mean, you certainly don't see any parking attendants around anymore. There's a hotel. I'm not sure where it is. I think of Chicago, might have been Vegas, but I think of Chicago, who's experimenting now with robotic butlers. Oh, yeah, I saw that. That's A-loft. Okay, which is owned by Starwood, I believe the W, saying the robot delivers things to your room, you know, so you call the front desk, you need a toothbrush or a towel, the robot brings it to you. Right, right.

It's hard to fathom right now. I remember when I was in the music business and the digital download was taking over, I couldn't even see what was happening. I couldn't even imagine something like iTunes at the time. That's kind of how I feel with the robotic question. Like, I don't know. I don't think about it. It's not my creative capacity to imagine where we could go with robotics. I think ultimately it's going to increase the quality of life,

and it's certainly going to put a lot of people out of work initially, and this is why education is so important. If someone listening, like one of the first industries that's really going to get rolled a bit is the transportation industry, because it is a giant industry. Cab drivers and Uber drivers and Lyft drivers and truckers and people that move people and stuff around, that's a giant, giant industry worldwide.

Think of FedEx, UPS, If that stuff could be automated by machines and Amazon's drones that will deliver your packages, that's a game changer. I've talked about this before on the show, but I'd like to ask you about it. I think it's a big game changer for real estate. Because you know, Matt, the three cardinal rules of real estate, they've always been, what, location, location, and... Location.

Yeah. That's right. But I don't know. I think that's going to change too because... And I give this example in my show, if you could get in a driverless car and you live, lived in Scottsdale, Arizona, but you wanted to go to San Diego for the weekend, which is a much more expensive place to live. And you could just go to bed and wake up in San Diego six hours later. That's a game changer. Yeah. I didn't think about sleeping on the way. Yeah. And really it would

eliminate traffic because if you could drive one foot off the bumper at 85 miles an hour from the car in front of you, which automobiles would be possible. And everybody didn't have to drive at prime time. Rush hour would go away. That is a game changer. So high-priced real estate areas, beware, because you have a value destroyer, in my opinion, coming your way. Yeah, maybe offset. You can't see the ocean from Arizona, though, Jason. Do you have to if I can just go there every weekend? As long as fuel is cheap. The fuel's got to be cheap. It'll still take fuel. I think that's a factor. Well, certainly nothing I know anything about. I don't either, but certainly you could certainly consider it, and that made a lot of sense.

I like the idea of going to bed and waking up somewhere else on my vacation. It's a pretty neat idea. It only takes about 40 hours to drive across the country from coast to coast. What's that going to do to the airline industry? If you can bring all your stuff with you, jump in a car, bring your dog, it makes it really simple. Yeah, definitely. You know, one question I wanted to ask you about, Jason, when it comes to real estate, you know, we're both here in the United States. But there's a lot of activity going on, a lot of discussion, a lot of chitter-chatter

about investing outside of the United States, Americans investing outside of the United States. Yeah, great question. So I have another show you may not even know about. It's called The Jet Setter Show. I did listen to it on the plane on the way home. Okay, okay. As you were on a jet, wow, that's very fitting. Oh, that's true.

I love it, yeah. You were a jet setter listening to the Joe session. I listen to the one on the Puerto Rico that you asked me to listen to. Yeah, oh, yeah, that's really an interesting episode. That was interesting. Yeah. But I interview these guys about international investing, and I got to tell you, I just don't see it. The numbers just don't really.

The U.S. is pretty unique as far as real estate goes. Our infrastructure is better than most countries, rule of law, and the fact that we have a multiple listing service, and that we have things like Zillow and Trulia. It's just a lot simpler and more established, and the financing is much better here. The construction costs are lower here in most cases. I love the idea of international investing. I've definitely checked it out. I've traveled to 71 countries. I want to do it myself just for diversification purposes. But I look at these deals and the rent-to-value ratios are like 0.5. Why would I do that when I can buy properties in business-friendly Texas or Georgia

and get 1% per month? It doesn't work. What do you think? It seems like you're injecting an unnecessary element of risk into your investing. Yeah. It is far away. It's under a different government, different currency. I've seen too many movies where the government says, no, and what are you going to do about it? You know what I mean? Like, they just change their mind on something.

And I don't know if that's just the movies or it's how it is out there in the real world. I just like the idea of that I know what the laws and the rules are here. I know how to play by the rules here. I've done a lot of work on myself. I've got a lot of experience under my belt to know how it works here and to go into a different foreign land that I have to take either a boat or a plane to. It's an additional element of risk, but it's a significant element of risk in my way out of my comfort zone. I would agree with you completely, Matt. And, you know, people are always calling me up and emailing me and pitching me on

why don't we recommend Costa Rica properties or Panama properties or Brazil or, you know, Belize is a hot one. Oh, Belize, yeah, I hate Belize. I've been there twice. It's a, Belize is so thorough. You really must be kidding. I mean, just if you think Belize is good, the Primo place in Belize is called Amber Greece K. Go there. I've been there twice. It's a dump. Get a clue. You really just don't know what you're talking about if you're thinking that's good. Here's the thing. A lot of people listening to this show now are from other countries. And isn't it interesting that so much of the world wants to own American real estate? Maybe they know something we don't. And when people talk about the collapse of America,

listen, I do think America's going in the wrong direction. I don't think it's as good as it used to be in many ways. All I'll say is this. It has a long, long way to fall before these other places rival it. I'm just being a realist. You know, probably, you know, we look at our own books, our own clientele, and I think we're approaching 40%. We're right around a little over 30% of our clientele is from another country,

buying American real estate. Yeah. That's telling. It's a clue. It's very telling, and we have lots of foreign buyers, too, and lots of foreign listeners. They want to get American properties,

and they can't get enough of them. They'll pay cash. They'll pay 50% down and get private. They'll bend over backwards to buy properties here. Earl Nightingale, the late great Earl Nightingale, we were talking about him earlier. He said, maybe the reason the grass looks greener is because it's getting more care on the other side.

Yeah, yeah, yeah, yeah. You know, so that's something to consider. I remember that actual cassette. Yeah. That's when we listened to it on cassette. And it was on cassette. Yeah, I still got those cassettes. I bet they're worth a bundle of money.

Me too. Lead the field. Is that the one you got? I got the whole library of everything he ever made. I bought the whole library. We could get together and have a party. A listening party, Jason. Yeah, but we don't have a tape player.

That's right. That would be the challenge. We'll have to buy one of those somewhere at an antique store. I got to ask you one question before you go, though, Matt. So I'm always talking on my show and you know this about inflation and deflation and, you know, what's in the future. I got to ask you what you think. Inflation, deflation, or stagflation, or what do you think? I certainly see the value of the dollar continuing to drop.

That means inflation, yeah. Inflation, right? And I look at real estate, whether our world goes to hell or if it has a resurgence. If you're owning real estate, you're in a good place. scenarios. So that's just, I try not to predict those things. I try not to try and guess. It'll cloud my mind and maybe cloud my judgment on what I do next. But I kind of look at both scenarios and, you know, I was talking to a friend and they were over there and he had a friend from Russia. And he said that when the Russian country collapsed, that the only people that really survived,

that only made, that made it through were people that owned a business or the people that owned real estate. So I just kind of look at that. If we were going to go down that path or say go down that a lot of people compare what America is doing now to the fall of the Roman Empire. Right. Whatever scenario does play out, as long as you've got real estate and you're buying real estate for residual income, you're buying it the right way to so it produces an income for yourself. I think you can't go wrong either way. I agree with you.

In the inflationary environment, it's going to be a home run. You're just going to score massively, especially with what I call inflation-induced debt destruction. In a deflationary environment, you're going to be scraping for yield and there's not going to be anything that offers any real return except the cash flow on your properties. Your gold is going to be worth nothing. Okay, your silver is going to be a terrible deal. All of that stuff is going to suffer. Stocks will be terrible. But cash flow real estate, the value of that monthly income actually increases in a deflationary environment. And if we have deflation, there's going to be no incentive for

people to buy houses. And that means there's going to be more renters. So, you know, just See, there you go. Yeah. And then I think it's great either way. I do too. I do too. And if real estate doesn't save you from whatever happens, then we got bigger fish to fry. Yeah.

Nothing's perfect. I mean, if we have overall societal collapse, you know, guns and food and water, it's what you better have. This is the Creating Epic Wealth Investing podcast. I love it. A new name. Matt Hartman and Jason Tario. There you go. There you go.

All right. So if you're confused to who you're listening to, do you listen to both of us. And you can find us both. My name is Matt Terrio at Epic Real Estate Investing, and my co-host today has been Jason Hartman at the Creating Wealth Show. Creating Wealth Show and Jason Hartman.com. 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 Terrio. This podcast is a part of the C-suite radio network. For more top business podcasts, visit c-sweetradio.com.