Epic Real Estate Investing - Managing Risk in a Recession and Depression | 1014

Episode Date: May 10, 2020

The market is shifting and there are new opportunities for you to seize and quantum leaps in your financial future to make! However, you need to manage the new risks that accompany such a shifting market. Therefore, Matt shares 5 tips on how to MINIMIZE YOUR RISK and MAXIMIZE YOUR REWARD. Tune in and find out more! Learn more about your ad choices. Visit megaphone.fm/adchoices

The market is shifting. And whether this crisis is a recession or a depression, at the moment, there are new opportunities for you to seize and quantum leaps in your financial future to make during times like this. If you can manage the new risks that accompany such a shifting market. Today, let's minimize your risk and maximize your reward. What do you say? 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-Ase.com. Here's Matt. Hi, my name is Matt Terrio.

I am CEO of Epic Real Estate. This is where we show people how to invest in real estate. with an emphasis on retiring early. There are unfamiliar risks in a downwardly shifting market that if not managed, can really slow down, if not completely derail your financial freedom pursuits and that early retirement. But if you know what they are and how to protect yourself, you can move faster in this type of market than any other. I know because it was a market like this that set up the foundation of epic real estate that eventually became a cash flowing machine of passive income. And if you like the idea of pulling something like that off for yourself, I want to give you what I know so you can. Now, the biggest risk in a downwardly shifting market is overpaying for property to a point where it interferes with your planned exit strategies.

You know, whether it's a flip, whether it's a hold or whether you're going to finance, overpaying can mess it all up. So to manage the risk and maximize your profit, I've got five tips for you. Number one, stay away from long-term projects. What may be a good deal today after a three or four-month rehab business, period, that time in the deal may reveal that your deal is not the deal that you thought it was. You're going to want to focus more on quick flips that you never actually take ownership of. Or the real opportunity to hold long. Property that pays you cash now and cash every month, while using very little of your own money to make it happen.

You see, the name of the game in this type of market is control, and the tactic is creative financing. And I'll show you how that works in a minute. Number two, analyze for multiple exit strategies. I mean, if you can't help it, but to fix us, and flip properties in this market because, you know, that's what you know best, that's what you do best. Then at the very least, pick properties that you can also cash flow just in case you get stuck with them for a while. I mean, if this is your first time in a down market, this can happen more easily than you think. Three, reconsider the home run deals. And for a couple of reasons, you know,

home run type deals where the rewards can be huge, they're very tempting. But typically, they take longer to pull off. So see tip number one. And these home run deals usually come with bigger risks as well and not just from a financial perspective but as well as a time risk and your opportunity cost too you don't want to take on anything too big right now where if it doesn't go the way that you planned it's going to ruin you you'll find plenty of opportunity to hit and exceed your financial goal so be cautious around being greedy during this time we can all be susceptible to delusions of grandeur during times like this and inadvertently bite off more than we can chew number four look at all the data when determining property values meaning we know the most

important data that we can look at when determining property value is what comparable properties have actually sold for. The market determines the value. A property is only worth what someone is willing to pay for it. And that's still the case in a down market. But there's more data to look at than just the sold when it comes to confirming value. It only takes a couple of miscalculations just to knock you right out of the business. So you want to get your values right. In a market like this, the when a comparable property sold can be as if not more important than what it's sold for. So, give extra weight to the more recent sold data. Further, pay attention to what comparable properties have not sold. You know, if a comparable property sold a few weeks ago for $100,000, and then

there are three comparable properties on the market right now priced at $90,000, then you can pretty much throw the $100,000 sale right out the window. In this scenario, we know the property we're looking at is almost assuredly worth less than $90,000 because these properties haven't sold. And if you plan to resell your property, you don't want to be one of those that are sitting on the market waiting indefinitely for the market to come back and rescue you. You could be waiting for a while. See tip number two. Now, tips one through four, they're all more of a defensive nature. But tip number five, you can score points while defending yourself and your finances simultaneously. Whoever said defense doesn't score points. Actually, I think I said that. But here's the exception.

And I alluded to it earlier, creative financing. So tip number five, present more terms offers. You'll need less money for each deal, if any at all, and therefore your risk is greatly reduced that way. And why it takes less money is during a market like this, your ideas, they can have greater value than your actual money. And if you're short on money, this is really good news. You see, it's never a money problem. It's always an idea problem. This is where the creative in creative financing comes into play. And as an epic investor, these ideas are referred to as terms. You see, we purchase property based on price and terms. As long as you can compare, you. one of those, the price of the terms, you can always make a deal for yourself. Simply put,

if the seller wants a higher price than you want to pay, no problem, as long as they're willing to break their price up into payments. We call it a deferred cash sale. That's all. And you might want to incorporate that into your vocabulary. Paying with terms is nothing more than a deferred cash sale, Mr. and Mrs. Seller. Now, if they want their money fast, hey, no problem there too. As long as they're willing to reduce the price. It's a give and take. The best investors create win-win outcomes. So when the seller chooses top dollar or fast sale, you choose the other. And by doing it this way, you can always create a deal for yourself. I give my private RIA students these cheat sheets to help them put these types of deals together. And if you'd like copies, so you can start

doing deals like this too, you can grab them at epic breakthrough.com. Control, it's the name of the game in a market like this. Creative financing, that's the tactic. With creative financing know-how in your toolbox, you're going to do more deals, you're going to need less money, You're going to create passive income. You're going to mitigate your risk. You're going to hedge yourself against inflation. And you're going to control more property. Control presents options.

Options create freedom. I'll see next. 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 the car flow. The cast is a part of the C-suite radio network. For more top business podcasts, visit C-dash-

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