Epic Real Estate Investing - Lifestyle Changes for Buy and Hold Investors | HTH025 | 583

Episode Date: February 6, 2019

Real estate has the power to change your life completely. So, today, we are talking about the mistakes you should avoid and the path you should focus on as you get your first big real estate cheques. If freedom, independence, and wealth creation are your goals, stay with us and learn how the first accomplishments tend to affect people’s lifestyles, what delaying gratification is, and how you can get rich. Learn more about your ad choices. Visit megaphone.fm/adchoices

This is Terrio Media. Don't wait for appreciation to buy real estate. Buy for cash flow and wait. In other words, Hold That House! Your host's Matt Andrews and Matt Terrio. Hey there, flipping houses can make you rich, holding them will make you wealthy.

This is the Hold That House show. I am Matt Terrio. And over there, right over there, Mr. Matt Andrews. I'm going to be a star. And before we begin, we've got a free gift for you, just for you. Go to hold that house.com and download the four-hour work month, the 10th commandments to managing property managers. It's really the key ingredient to financial independence through real estate that they are not telling you about. I still don't know who they are, but, you know.

Don't listen to them. Don't listen to them. Them is always bad to listen to. Right. They're always saying their thing. Right? It's the sin of omission, really, right? It really is.

Because they're not telling you about it. Exactly. And you can get that for free. at hold that house.com. You know why they're not telling you about it? Because they know if they told you about it, you wouldn't buy it. Exactly. Ooh. Oof. Oof. They're just putting out a big question. That's a good one. Just put out a big question mark there for you. Yep. That's right. They ain't telling you about it because you wouldn't buy it because it ain't that appealing. It's not that sexy. But that is the key ingredient to financial independence through real estate. And you can get that for free. We know we can't sell

it to you either. So we just give it to you for free at hold that house.com. Hold thathouse.com. All righty, Matt. Week number five on our southern tour of beautiful hot, hot, sweaty, Tampa, Florida. It is hot and sweaty. How did you get me to come down here? I don't know. I lured you down with paddle boards and surfboards and stuff. That's right.

The margaritas have been good, too. Yeah, those are the tasty, yes. Cool. So today, speaking of margaritas, we're going to talk about lifestyle. That's right. And the lifestyle changes for buy and hold investors. And, you know, at this point, my lifestyle has changed to where I can come hang out with you for a couple months.

Yeah, man. And, you know, but it wasn't always that way. No, that's called freedom. And yeah, you have to fight for it and grow to it. And one of the things that when you're getting started in real estate, you know, the wholesaling strategy, like the quick flips, or even the fix-and-flips strategy, and you see all the TV shows, there's good giant chunks of money to be made. And those giant chunks of money can impact your life pretty darn quickly.

You know, if it's your first time getting a different time, $25,000 check. I remember mine. That was kind of exciting. The shut up check? Yeah. Yeah. It's all your friends. No, it can work. Right. Exactly. It asked for my mom. She had to see about four of them before she believed in. Right, right, right. Four shut up checks. Yeah. Exactly. But, you know, that turned into a new car. It turned into some new clothes. It turned into a couple weekends in Vegas. And, you know, that impacted my life in a favorable way very, very quickly. And how did it affect you the most probably belief, right? Because Oh, absolutely. I realized, okay, I did this. I can do this. You know, so it's proving to yourself on that first check. I remember when I made, you know, my first deal, you guys have heard about my first deal

in one of the first podcasts we did. It was terrible. I made almost no money. But when I had that first really good deal, that first really good flip, oh man, you know, I just knew I can do this. Right. I could do this over and over again. Wait, no one's going to stop me from doing this. that's when you start thinking about, you know, okay, what kind of lifestyle do I want to live? And then you use real estate as the vehicle to get there, right? Exactly. That's it, man. Now, those giant chunks of money, they're great, but they can be almost demonically seducive.

Yes, they can. I play that game. Right? I know where you're going. Preach. Got it? Because, you know, you hit that $25,000 mark, and now all of a sudden you do that three, four months in a row, and that becomes your norm. And now you create a.

situation for yourself where you might have a lifestyle that you don't want. Sure. Because now you've increased your ceiling for your monthly spending. And now you have to get up and go to work every single day and look for that next deal. You got to feed the beast. So you're making some money, but you really have a very, just a high paying job. Sure. And most people that get into real estate, you know, they see the freedom, right?

They see the fruity drinks sitting on the beach underneath the palm tree. Like, they want that lifestyle. Yeah. Well, sadly, or not sadly, but I guess, what's the word, contrary to popular belief, that doesn't come through flipping houses. Right. It comes through holding them. That's right. Right.

So the reason that a lot of people don't, more people don't hold more houses, I have a theory on this. Because when you come up with that first deal and you look at that property, and I can flip this for $25,000. or I can hold it for $250 a month. Yeah. Like, you're looking at that. That's a hard, very few people can understand the value of that $250 a month. Well, and that's called delaying gratification. Most people can't do it at all.

You know, like, you know, why do we eat bad food? Because we can't delay gratification. You know, why do we make a lot of bad choices? Because we want that thing right now. Right. And we can't have it. Now, that might preclude us having other things that we want even more, but we can have that piece of cake right now.

Right. Now, if you want a piece of cake and you want washboard abs, one's more important than the other. You're going to make that decision in the moment. And boom, if you go for that cake, it's going to taste really good. And you're going to like it. And you're awake up in the morning. You're going to look at yourself in the mirror and you're not going to look like you want to look. So it's the same thing in real estate.

Do you want that quick 25K, which nothing wrong with that? That's good, right? I mean, that can be a great business. But how do we build wealth? We've got to delay that gratification. You've got to say, look, this is worth way more than $25,000, way more. You know, and you and I know just holding properties, we don't even bet on appreciation. But that 25K, that can be trumped just by appreciation alone, not even cash flow.

And it can certainly be trumped long term exponentially many times over by the cash flow. So it's tough, though. It is. Especially early in your real estate career. I had a hard time saying no. I like the fester famine lifestyle, apparently. Well, it gets tougher, man. because, you know, you get used to $25,000 a month, so $250 a month holding a house becomes less and less sexy, less and less important.

And what does society tell us to do when we've got that money? Well, we've got to have a car just like this guy, we've got to move into this neighborhood because we can. And if you're waiting for someone to give you permission loan-wise to go buy a house more than you should buy or, you know, to do something stupid with your money, people will give you permission out there all day, guys. They'll give you permission to do that. But it's your choice. We'll be back with more right after this. Is Wall Street failing to meet your expectations? Has your 401k tragically turned into a 201k or worse?

Don't panic. You don't have a money problem. You have an idea problem. We're turnkey allies.com. And we'd like to share with you a new idea how one small shift can transform your financial future and accelerate its arrival. Go to turnkey allies.com to get this new idea that Wall Street doesn't want you to know about. Turnkeyallies.com. More control, less risk.

Turnkeyallies.com. The only way you're ever going to get that $25,000 a month automated, that you're going to get that as cash flow, as you're going to get that as residual income, is you have to pick up that first $250 house. That's right. But if you keep putting that one off because of the $25,000 hit that you're going to take, or that you're going to receive the $25,000 from profit,

you're never going to get there. And the part that gets really scary in is, dangerous about that is you're making these large chunks of money and you feel like you're prospering. You feel like you're doing good for yourself. You're enjoying life, but you're actually prolonging your journey to the financial freedom part, which is the reason that most of us got involved in the first place. Absolutely. So let's talk about the lifestyle changes in the beginning.

You're talking about delayed gratification for sure. And I'll give you my story. You know, we've talked with the book comes up frequently on our show, Rich Dad, Poor Dad. And I remember when I first read that book was in 99, maybe 2000, right when it came out. And I read the book. And it was the first time I was ever really exposed to the concept of residual income, of cash flow. And, you know, intellectually I can figure out what it means. Sure.

But I didn't really know how to create it. Right. And so the more and more I got into that book, and I was married at the time, and she would have never bought in on this. because what I wanted to do was, all right, so per Kiyosaki, the real road to wealth is to push your expenses down and get your passive income up. And once that passive income exceeds those expenses, boom, you're free. You're out of the rat race, right? So I couldn't get the wife to ever push the expenses down, right?

So when eventually the music business crushed me and I was bad in groceries and that ultimately ended up in a divorce, I was like, aha. now I'm by myself. Now, I don't know saying you have to get divorced to get out of the rat race. But this was my story and this was my lifestyle change was, I'm going to sell everything. I'm getting rid of all debt. I'm going to get my expenses down as low as they possibly can.

And then I'm going to start working what I know how to do and create that residual income. That's it. And so I pushed, as far as my lifestyle went down, I moved into a little 600 square foot apartment. 600 square feet is very, very small, by the way. That is tiny. It's just one room in a kitchen in a bathroom. That's it. It's like a New York high rise. Yep. And I bought an old clunker of a car. It wasn't a rental car. I think it was previously a rental car. And paid cash for that. So I had zero expenses other than just normal utilities and food. And so I got my expenses down to a bare minimum. And then I started acquiring these passive income properties. And, you know, within three and a half, four years, I was out of the rat race. Right.

You know, but I made that sacrifice for those three and a half, four years. I'm not saying when delayed gratification, I'm not saying like, you know, what Susie Ormond or Dave Ramsey might tell you to delay it until you're 62. Right. I'm not saying delayed gratification that long. That's not delaying gratification. That's called deferring your life. Yes, exactly.

That's what that is. Deferring living. Absolutely. Yeah. So I'm saying you work hard for three, four years and make those lifestyle changes to where you're decreasing your expenses, focusing on increasing your passive income. you can hit a point of not just freedom, but just being totally independent. That is such a great feeling.

You might not have a ton of money in the bank, but that is a much better feeling than having a ton of money in the bank, but having to go to work every single day to make sure you preserve it. Sure, sure. And that's what you just told. That personal story is a great story because I heard two things there really that I want to point out that you didn't say, but you did say. Okay.

And I want to make sure people are reading between the lines. you, number one, and correct me if I'm wrong, number one, you made a decision, right? So it wasn't just like, hey, I'm going to buy the cheapest car I can and move into the smallest place I can and spend as little money as I can. That's a losing strategy by itself, right? Because that's what everybody's trying to do, right? That's what the media and government tells people to do right now. Live with less. Do, you know, do less. Don't vacation. Do live with less. These are lean times. You know, that's a losing proposition. And that's not what you were doing. You made a decision for starters.

And then I know you, and you don't even say this, but I know you well enough to just go out and say, then you set some goals, right? And set some very measurable, realistic goals. So three or four years later, you were in a different situation, not just because you moved into a small place and lived in a way that you knew you needed to

to be able to get back ahead, but you made a plan and you put that plan into action. So I want everybody to understand that and hear that. It's not just about, you know, hey, I'm going to delay some gratification because there are some people that will just delay gratification all day long without a plan. And then it's just like not doing anything anyway. You know, so you made a decision. And then you made a plan. And three or four

years later, the reason you were in a different situation and the reason you were out of that rat race is because you did the things that you needed to to put that plan into action. So the plan was this or the goal was this. And then you lived in a way that was going to get you to that goal. Isn't that right? And without the plan, you wouldn't do that. It's just a bunch of people delaying gratification for no reason. Right. Right? Yeah. Absolutely. So that's huge. No one has ever cut their expenses to wealth. Right.

No one ever saves their weight to wealth. Exactly. Right. You know what I mean? It's like you've got to have both parts of the equation. Absolutely, man. For sure. So, yeah, so delay it just a little bit. Focus on the residual income number more than what your bank account balance is.

That's a big key. And that's so counterintuitive to the way that we're raised. You know, you were talking about something earlier, about the Truman Show or something. Oh, yeah. that's huge. I think we talked about that before. And the Jim Carrey movie, the Truman Show, if you guys have seen that, he was living in like this fake world, right? It was a world that was created for him, and he was the only one that didn't know it. Everybody else was an actor in his life. And there was a producer

of that show that was his life. And that producer said, you know, they asked him, you know, what if Truman just leaves? And he said, he won't ever leave. And they asked the producer, why won't he ever leave? And in the show? And he said, because people, and I want to say this right, because people accept the world as it's presented to them. And I was just like, whoa, that was a huge, I don't know if that was the thrust of that movie, if that was the, you know, what was really underlying with the message or anything, but that's what I got out of it. People accept the world as it's presented to them.

So, you know, the way your parents lived, you kind of, just by supposition, you kind of suppose I'm supposed to live this way, even if they said that or not. You think, dad did it this way, mom did it this way, I do it this way. You know, the media certainly gives us all kinds of messages all the time about how we're supposed to live, what we're supposed to have, what we're supposed to have in our life, or, or lately, how we're supposed to live with less and do less and achieve less and be less or whatever it is that they're, this weird message that seems to be out there now, you know, from the government and from other sources and stuff. Or, you know, it's the people we hang out with, you know, and they've just kind of ingratiated us into a way of doing things, and this is how it is, or the way the school teaches you. Or are you. university, anything. But we're giving messages of this is how life is. And as entrepreneurs, as successful entrepreneurs, we're the ones who've raised our hands and said, no, no, actually life is what we make of it. And we actually have the power in our decisions and our choices to form what we want to. So to me, that's huge. And if we're not constantly battling against

the messages we're being sent like that, that draw us towards mediocrity, that draw us to the mean or draw us to the average, if we're not working against that all the time, then gravity will like almost pull you that way. Right. So if you're not active and you're just standing still trying to maintain instead of moving forward, you automatically get pulled to that mean. Does that make sense? It's the way it works, you know?

Yeah, I think about the whole Starbucks analogy. I mean, I drink two or three of those a day. Okay, but if I just do one a day, that's three bucks a day. That's $3 a day. That's $1,000 a year. that's a thousand dollars a year bill that our parents did not have that's right you know so even we need it right right we can't live without it and I think about just that I mean I'm I certainly don't want to give up coffee and I'm not going to but drinking one right now but um you know we were talking about uh I think you'd mentioned it just earlier about you know you're you look at the

the pastry or whatever the piece of cake or something you decide whether you're going to have it or not and and that's very much you just kind of look at you just kind of look at you just kind of look at this decision, and if you continue to take that $25,000 profit over the $250 a month, guess what? Freedom, this is going to be so painful for some of you. If you keep doing that, freedom, it's just not that important to you. You know, losing the weight, choosing that cupcake or whatever, and you keep choosing that cupcake because it feels good in the moment, well, you know what? Losing weight is just not that important.

That's right. Not as important at least. Right? And once you hit that reality of whatever there is in your life that you want, that you don't have, if you don't have it, it's just not that important to you. That's it. And that is tough to hear it sometimes because the truth is we actually do have what we want. And whether we want to say that it is or not, and a lot of people say, I want this, I want that.

But then their actions act contradictory to that. So our actions are going to show you what it is is really important to you. What is important? If you say, hey, my wife, you know, if I say, hey, my wife and daughter are the most important things in the world to me, but I never spend any time with them, I can say it all I want. I can write it on Facebook every morning and say, I love my wife, I love my daughter, but I never spend time with them. What have I, and I spend all my time working or I spend all my time with my buddies or whatever

else, I'm showing you my priorities. Right. And it's not rocket science. It's pretty easy to see. So we've got to be honest with ourselves there too, you know, and be honest with responsibility of saying, hey, I do have what I want right now. Sure, everybody comes from a different place. Everybody has different abilities.

Yeah, we're all different. But the one thing that's the same is that we can all create what we want in life. And we all have based on our choices. So, you know, tough love. Absolutely. It's a little tough love. So when you look at your lifestyle, you look at the lifestyle that you want, the reason that you got into real estate,

look at your life of your actions, of your daily activities, and your daily choices, decisions, the word you speak, the thoughts you think that are working in contradiction to you attain that lifestyle. Yeah. Because there's two ways to get rich, is that you can, one, do what rich people do. But I think even more importantly, first, you have to stop doing what poor people do. Sure.

Stop thinking like poor people think. Right. You just got to stop doing what they do. Right. You know what I mean? You can't continue to do what the poor people do and do what the rich people do and expect to get to where you want to go. Right.

There's going to be conflicting values, conflicting actions there. Absolutely. And that's a great point. A good friend of mine always says it this way. you know, what is your perfect day? You know, like if you woke up, if there were no, if you had all the financial stability you needed, everything was great, your family was healthy, everything was perfect, and you woke up in the morning knowing all that was set, what would you do? You know, what would your perfect day be? You know, would you sit on the beach reading all day? Would you just be spending

time with your family? Or would you, you know, what would you be doing with that perfect day? And then you figure out, okay, now how do I make that a reality? How do I make that lifestyle true? And if you, you make every decision like you just said in line with what that goal is and you set that goal, then that goal is just a signpost for you. So something happens over here and you start kind of veering off. Well, you look back to what the goal was. Oh, wait, that's not going to help me get closer to the goal. You come back over.

You correct the course. And then you're going, going, going. And like every good entrepreneur does, you see a shiny object over here. And you want to chase it. Like you and I still have problems with doing sometimes, right? Because opportunities come to us or different kinds of, you know, know, we meet different people and different opportunities, but then we look back, okay, is that going to get me closer to that goal that I've stated? And then boom, you come back again. So it's a,

process of course correcting, but you can't course correct if you don't have that signpost to look at, right? So if you figure out what that perfect day is, what the lifestyle is, and make every decision in line with that goal, that's going to keep you heading in the right direction. And then it's all about listen to the right people, fighting the toxic messages we get, having the right mentors, getting the right education, listening to the right podcasts, listening to the right bald mats. There's more than two of us out there. There are more than two of us out there, I'm sure, yeah.

But that's it. Just thinking about that, it's such a simple concept, and it probably seems simple to a lot of you out there, but it's harder to stay focused on it. So the key is, okay, we get it, Matt. We got to set goals, and we can't forget about the goals. okay, well, that's lip service, right? Right. You've got to actually do it.

And how do you do that? How do you discipline yourself to do that? You're with the right people. You're reaffirming that you're heading the right direction. You're getting good counsel, you know, that keeps you course directed or course corrected, I should say. And sometimes, you know, well, all the times, it's a lot easier to say than to do it, right? Just like, hey, I want six-pack abs, but you're sitting there eating cake, you know? Now you turned it into a cupcake a few minutes ago.

I was talking about a big old piece of cake, but, you know, cupcakes are good, too. It's great. Well, on that note, you see that beach right out there, Matt? Yeah, I do. Let's grab the margarita and head out there and call it a day. Let's make it happen, man. Fantastic. Flipping houses can make you rich.

Holding them will make you wealthy. We'll be back next week. Until then, remember, don't wait to buy real estate, buy real estate, and wait. Hold that house! Contrary to popular belief, a lack of funding is not the biggest barrier to starting a business. It's excuses. But don't let a lack of funding be your excuse. We are Epic Fast Funding, and we'd like to fund your business with up to $150,000 in revolving credit lines. If you've got 60 seconds on a solid credit score, you could have access to your funds in as little as seven days.

Go to Epicfastfunding.com to fill out our 60-second application. It's fast, it's simple, up to $150,000 in as little as seven days. Go to Epic Fast Funding.com. Go to Epic Fast Funding. com. This podcast is a part of the C-suite Radio Network. For more top business podcasts, visit c-sweetradio.com.