Epic Real Estate Investing - Matt and Matt's Best Deals Ever | HTH 019 | 552

Episode Date: December 26, 2018

Today, we are revealing how we closed our best deals ever and why you don’t need to know it all to create your success story. Hear us out and learn how a deal can change your mindset, why people don’t get involved in real estate, and why connections matters. 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. Yes, that's us.

Flipping houses. It can make you rich. Holding them will make you wealthy. And this is the Hold That House show to talk about getting wealthy by holding houses. It's the final frontier of where the average person has a legitimate shot at creating real wealth. And that's the real estate, holding that real estate specifically. I am Matt Terrio. Over there is Matt Andrews. I'm bringing sexy back. He is looking very sharp today. Yeah. And before he brings sexy back, we've got a free gift for you. Go to hold that house.com,

download the four-hour work month. You'll get the 10 commandments to managing property managers, the key ingredients to financial independence to real estate that they're not telling you about probably the most invaluable information, the most invaluable lessons that Matt and I can share with you in the interest of your eventual independence. And you can get that for free at hold that house.com. All righty, Maddie. So we need a little pick-me-up after last week.

The horror stories, yes. I saw both of our postures change after the recording of that episode. We kind of walked out of here like, well, that was no fun. I forgot how terrible that was. was, yeah. Exactly. But fortunately, those types of occurrences, those were the extreme, those were the worst, but even just the bad or uncomfortable situations are few and far between once you get into real estate and you're into multiple deals. And we've got many more good stories than we have horror stories. That's for sure. That's why we're here. That's why we're here.

Yes, sir. That's why we're still here for sure. We want to hear your good stories too. We should say that. I mean, the success stories you guys have with your buy and hold properties, I mean, let us know. You know, get in touch with us. Go to our website, message us, email us. Yep. We want to profile some of you guys, too,

you know, that are gaining, you know, valuable insight from what we're sharing with you here. Give us your success stories, man. We want to hear your good stuff, too.

Don't, don't give us your nightmares. That depressed us last week. Yeah, yeah, we don't want to do that again. Give us your success stories. That's right. That's right.

And I heard that it takes, seven compliments to eliminate one insult from, like, your psyche. Like, it takes seven reinforcements. to get rid of the negative stuff.

And people just focus on their bad situations and their bad experiences. And unfortunately, bad news sells. Yes, it does. And we see that on the news a lot. And that's why I don't watch news. Right. That's why you and I and people like us, we make our own news. That's right.

That's the way it works. I like it. All right. So, that's a Bruce Lee quote. To hell with circumstances. I create my circumstances. Oh, Bruce Lee is the man. He's the best.

I love them. For sure. Okay. So let's talk about our best deals. Our best deals. our best deals ever. Okay, so we got a bunch of good ones. Yeah.

We wouldn't, like you said, we wouldn't be here today if we didn't. Sure. But let's talk about the best one. Let's do it, man. Go ahead, dude. Yeah, awesome. All right, cool. So, you know, I was thinking about, you know, the deals that I've made the most money on.

And I thought, okay, I'll share the one that I made the highest total on. But then I thought back, you know, what was really the best deal I ever did? And why was it the best deal? So I want to tell you about one that I did probably, well, wow, it was probably, about five or six years into my real estate career, my real estate investing career, right? So I had been, I started doing a lot of wholesaling, like I told you before. You know, I'd done some rehabs and started keeping rentals, you know, in the early 2000s. And then as I was getting into more wholesaling and, you know, the mid-2000s, and this was

pre-bust, right? So this was pre-foreclosure, you know, bust and everything. but I was kind of got into this thing about wholesaling properties to other investors. The typical markup in my area in Central Florida at the time was just kind of typical. You could do a double-close kind of property and you make $5,000. That was just kind of typical, right? So I was doing that a lot. I was locking up properties.

I was locking up bank-owned properties, even though there weren't as many back then. I was locking those up. I was wholesaling them to other investors and that was my model. So in addition doing some rehabs, in addition to keeping some rentals, I was doing those wholesale deals. And it was just like, you know, 5K here, 5K there, 5K here, 5K there. And I got into this thing of, hey, I can do a high volume of these. And just, you know, you're not making bank on any one property, right?

Four, five, six K, not a ton of money, but when you're doing four or five a month over and over and over again, adds up, right? So good income. So I got into this, you know, kind of a groove, you know, wholesale 5K, wholesale 5K, wholesale 5K, wholesale 5K, wholesale 5K, I was just kind of like, you know, really focusing more on that than any other phase of the business. And I really wasn't even paying that much attention to maybe what I could have sold some of these properties for. I was just into the speed of the transaction. I wanted it to happen fast, right? So I found one property that I bought for, I want to say it was, I think it was like 25,000, right? And so, I mean, I just threw it right in my pipeline of wholesale deals.

I got it for 25,000. I was going to wholesale it for like 30 or 31. know, and some guy immediately offered another investor, immediately offered that amount for it, you know, and I told him, you know, I got this for 25K, you want it. He was like, yeah, pay you a 32K all day on. So I thought, great, 7K, I'm going to do this, you know. And then I thought, you know what, I haven't invested in this particular area that was kind of outside of Tampa, you know, a little bit further east, close to Lakeland, Florida, an area I didn't know that well. I knew it was a deal, but I didn't, I didn't do a whole lot of research on it. I was just turning and burning, turn it and burning.

So I thought, you know, before I signed this deal and make 5 or 6K or 7K or whatever it was, let me take a look and see what I could really do on this. Maybe I can mark it up a little bit more. I did my research, which I hadn't done before. And I realized it was worth way more than I thought. It was a distressed seller deal. Got it off a sign. You know, we buy houses.

You know, just the typical way we do distressed seller deals, right? And I started looking at the numbers, and I'm like, I've got this thing for 25K. this thing's worth every bit of 100K. Like, I mean, and it's still a pretty good deal at 100K. Right? So, long story short, I listed it with a realtor, right? Because I didn't know how to, you know, sell it at that level or whatever. I didn't want to sell, I didn't sell to owner occupants.

I just sold to investors at the time, you know? So I didn't know how to do it. I didn't know how to handhold and do all the things that I perceived selling to an owner occupant was, right? So I gave it to a realtor. He, I said, you know, let's do it for 95K, right? It went out on the market for 95K and it started a bidding war. All right? I had multiple offers.

All right. And so now what do we do? Well, we start playing them off each other. Hey, we need highest and best, right? Bottom line, I essentially wholesale that property. I didn't touch it. I ended up having to spray it for pests. That was the only thing I did.

They had their request. I sold that property. I basically wholesale that property for $80,000 profit. Wow. I was about to sell it for $7. Right. And I made $80. Right.

You know, you guys know I'm not real good at calculations in my head. I'm good enough to know. That's like at least double. Exactly. 80K, definitely better than 7K, right? So, and here's why this is the best deal. Have I made more than 80K in a deal since than I have multiple times, right? I've made, you know, six figures on deals before.

So it wasn't the best, you know, profit. It wasn't the most gross profit I'd ever made. But it let me realize and it made me realize, you need to know your numbers better. Right. You know, you got to get out of this rut, or this not a rut,

but this groove that I was in of 5K, 5K, 5K, 5K, 5K, 5K, 5K. And I almost let a deal go for 7K that was worth 10 times more than that to me. You know? So the lesson I learned there was sometimes you got to step back, look at what you're doing, take the blinders off

because I was in wholesale land, you know, and I stopped looking at it like a real investor and I was doing this process. I was just doing the same process over and over again. And that's the difference. Sometimes stepping back and looking at what you're doing, getting out of your tiny little niche that you're in,

stepping back, take a look. That could be the difference between a $7K and an $80K profit. So what that helped me realize was that wholesaling a deal and making $70, $80, $90K took me as much time as wholesale on a property making $5K. And my thinking shifted. There was a paradigm shift in my head, right? Kind of like when you, you told us on an earlier podcast, you discovered, you know, that you could flip a million-dollar house for as much as?

Yeah, as easy as you could a $10,000 house, right? And when you realize that, everything changed for you. Right. Right. It all changed. Well, that was the moment it changed for me. That's when I realized, hey, it's okay to make $80,000 for working as a little bit of time as you would for $5,000. Right.

It was almost like I was placing a limit on myself. health. Right. You know, it was kind of like, look, it's not fair for me to make more than 5K on this. Why? Why is that not fair for me to make more than 5K? Am I gouging somebody? The person that bought that property, the owner occupant, they were thrilled at the price

they got. They still bought it under value. You know, they were absolutely happy. But for some reason in my head, I thought, if I was charging more than 5 or 6 or 7K, I was greedy and you shouldn't do that. And I wasn't thinking about the end product. And I wasn't thinking about, you know, the fact that I was still giving that in buyer a win. So after that, my thinking changed.

And I realized it's just as easy to make 80K as it is 7K. And it really hasn't been the same for me since. So far. So that's probably the best deal I ever did. Right. Because it helped me change that mindset. Just a sec. 30 seconds, actually, while we chip away at the rent.

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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. I think mine's, my best deal ever is pretty closely

related to a mindset shift as well. Cool. And it was my very first deal. Yeah. And, you know, I just made a little. large investment at the time for me was a $22,000 investment. That was pretty large in my investment education. Yeah. How to become a real estate investor. And I found this little property in Long Beach, California, a little single family home that was in total disarray, darn near, well, it was uninhabitable because I think it was missing a wall. So it looked like somebody started something

and then just didn't finish it. And it had a for sale sign on the front. Like it was just for sale. I wasn't really looking for a deal. I just drove by it. And because I was immersed in my education, my real estate investing education, like the antennas went off. You know, it's like the light bulb when I was, boo, bo, bo, bo, bo. Let me go and check and see what's up with this property. So I went to the multiple listing service. I checked it out. Your spidey senses kick in. Yes, they did. I was like, maybe this could be it. Maybe this could be the first deal. And, you know, I found out that the property is exactly what happened. It was owned by the bank. They had, the previous owners had bought it as a fix and flip, and they ran out of money, and they let it go. And then I also found out

that they went far enough to get the blueprints approved by the city. Those blueprints, having that single-family residence converted into a fourplex, a giant two-story fourplex. Okay. So if you know anything about rehab, sometimes that permit process, the blueprint process, especially on a deal of that size. Oh, it could be a headache. Yeah. I mean, you're carrying costs can go through the roof in hindsight. I mean, at that time, I had no idea what a And they're in no hurry. Right, right. It's almost like they don't care about your investment objective.

So you flipped in Long Beach before. Yeah. Oh, okay, got it. No, I've flipped. I've dealt with city officials before. There you go. So, I mean, when I was going through it, I had no idea what a carrying cost was. You know, that vernacular or that word wasn't in my vocabulary.

Anyway, I remember from my class, they said, if you find a good deal, write an offer. Just get the thing under contract. and you can deal with everything else later. So I wrote an offer. And I got accepted. The thing had been there forever, they were dying for an offer. And I just, I had this thing under contract. And I was like, okay.

Now what? Because at that time, I think it was like $350,000 to buy that property in the land that went with it, obviously. And I didn't have $350,000. And I certainly did not have the skills or the know-how to turn this single-family residence into a fourplex, but I knew somebody who did. And it happened to be somebody that I sat next to in one of my classes at the education.

You knew a guy. I knew a guy. I knew two guys. Yep. Two guys from Long Beach. Okay. All right. And it sounds like a restaurant,

the two guys from Italy. Two guys in Long Beach. Or like a sitcom or something. That's right. Or our house song, a rave song. Yeah. Two guys from Italy and a mouse. Two guys in a rezoning project.

That's right. The new NBC sitcom. Exactly. So I said, hey, I've got this deal under contract. Here's the numbers. If we fulfill these plans, it's going to be worth this. So it was $3.50. I think it came out.

Retail was going to be about $7.25 after it was all completed. And they looked at it and said, this is great. Let's do it. And I said, great. So I'm obviously a partner. I've got under contract. And how much do you want? So I was able to get 25% out of that.

And they got, it was their money. They purchased the property for me. It was their rehab crew. and they did all the work. I sat there and I watched. And all I did, once it was done, is I slapped an ad up on Craigslist and I had that thing in contract with a buyer in six days.

Awesome. I love it. Yeah. So what that did for me, I think I netted $26,000 for myself. Fantastic. It was fantastic. And so I did a few things for me as far as mindset.

One, that this investor thing is possible. I don't have to be an agent for the rest of my life. That was the first thing. second thing, and I didn't even take a no money down course at that point. And I was like, I did this without any money. It really had to do with who I knew, not what I had. Sure. And then I didn't have the rehab experience that I had to do with who I knew.

So I just saw a whole world of possibility. And if I didn't do that deal first, if I didn't have that happen for me, I doubt I'd be where I am today. Because what that did is it made me a believer. and there's really two things, two reasons, like the people that want to get involved in real estate, there's really two reasons that they don't. Number one is they don't believe real estate works.

They've seen other people do it, but they're just like, it doesn't work. And the second reason is they don't think that they will work. They don't think that they work. And what that did is it totally wiped out those two beliefs for me. I believe that real estate worked, and I believe that I worked, because I just did it and I just saw it.

And that belief has carried me forward all the way up until very present day. And now I am officially out of the rat race. I have been for several years now. Awesome. Love it. And, you know, I've got, our business right now does it easily seven figures a year. We're really working towards an eight figure year this year. And I've got a staff and I've got people that, I've got people, you know.

I've got people that do all this stuff for me. And then I get to meet great people and our path, have never crossed if that wouldn't have happened. Sure. So that's why that was the best deal for me. That's awesome. I was just like, this ain't difficult. I got this.

I can do this. And I said, don't need any money or credit score to do it either. And that just blew my doors open. Yeah, you just had access to some people that you knew that knew that knew some things that you didn't know. Right. Right. And that's a great lesson because, you know, I could, you know, you could fill encyclopedia

volumes with things that I don't know. Right. All of us. But you couldn't find a whole lot. lot that my network doesn't know, right? So, you know, I may not know everything about the legalities of, you know, tax law. Right. But you know who does? My tax attorney. Sure. You know, I don't know everything about the legalities of, you know, title work and, you know, title insurance. You know, who does? My title attorney. You know, exactly. I don't know the ins and outs of, you know, how to put in a pool.

But you know who does? My pool guy. Your pool guy. Right. So the question that, you know, that I think everyone should be asking themselves when they hear your story is, who do you know? And it was who you knew that bridge that gap between, you know, not knowing what to do with that property, not knowing what the correct exit strategy was, to getting it done with none of your own money and making really good money, especially for you at the time, right? So, I mean, that's huge. And so you guys, you know, for those of you that think, mistakenly think that you've got to know everything, that you've got to do everything. That's the first big lie

that you've got to get out of your mind. Right, right? You don't need to know everything. In fact, you can't know everything. In fact, it's counterproductive to know everything. Right. And we talk about a lot,

and we talk about this, you know, with our students and with other people that we work with. We talk about this phrase, you know, analysis, paralysis. You know, and you can get to the point where you're studying, studying, studying, studying real estate so much

that you think, oh, man, I still don't know enough. And so you just forever are just learning. Right. And there are probably some people listening to this podcast right now that maybe haven't done a deal yet or maybe at the very beginning of their real estate business. And that's where you are right now.

You're in your learning phase. And maybe you've been there for a long time. And I know some people that never leave their learning phase. And really, it's almost like a crutch. And it's fear telling you, I've got to keep studying. I've got to keep knowing what I'm doing. There is some value to, instead of ready aim fire,

there's some value in ready fire aim. Absolutely. You know, now you don't want to go into things half-hazardly. You don't want to make stupid decisions, but there is a value to taking action and making up the slack with the people you know and people you can partner with. So, you know, a good example would be, you know, some of you that have done co-wholesale deals. You know, I've done a ton of deals where I generated a buyer lead and I didn't have properties at the time, you know. But all I needed to do was know a guy who had some properties and I put that deal together and I made money, right? So, you know, you can't underestimate the value of knowing a guy.

Why does Leonardo DiCaprio make so many movies? Because he knows a guy. His name's Martin Scorsese. And Martin Scorsese puts Leonardo DiCaprio in every movie. Leo knows a guy, right? That's how it works everywhere. That's how it works in Hollywood. That's how it works in real estate.

That's how it works in life. You know, so you're not limited by your skills. You're not limited by what you know, and you're certainly not limited to the fact that you need to know everything. have to wait until you know everything. You're limited only by your ability to reach out and make partnerships and create relationships, right, with people that bridge that gap or can do the things you can't do. So today, whenever I'm moving to a new market or I'm in a new type of investment vehicle that I'm not familiar with, I always look for the shortcut of partnering with somebody who's

done it before. Right. Why wouldn't you do that? Right. You know, and that's kind of, you know, a pivotal point in this whole podcast. That's why we're sharing this information with you guys. so you don't have to know all this stuff, you know, so you can take advantage of some of our resources, you know, and you can take advantage of what we've learned over the years, so you don't have to know all the same things. You can learn the lessons or you can partner with people or partner with us for your education so that you can move forward and realize you don't have to know everything.

So that's a great lesson. Absolutely. That's a great story, man. You know, General Patton, he's got a quote, and I remember this quote very vividly, is that it's not what you know before the decision is made that makes it a good decision. it's what you do after the decision is made that most often makes it a great decision. And I think that applies so much to real estate. Absolutely. You're right.

And, you know, you don't need to know it all. You're never going to know it all. No. You can't, my favorite analogy, I'm loaded with these, by the way, it has helped me understand. These help me learn. You're very analogous. Yes. Yes.

Very metaphorical. Yes, I like that. He's metamorphicizing before my eyes. Right. If you're pulling out of the driveway in the morning to go to work, and, you know, you sit there, you don't sit there at the bottom of the driveway and wait for every light to turn green between home and work before you actually step on the gas. That's great. You drive to the first light, and if it's green, you keep going. If it's red, you stop and you wait for it to turn green.

And that's just how I approach pretty much everything now, and I owe so much of that to that particular deal. Absolutely. It's travel as far as you can see when you get there. you'll see further. And what do you do when you're at that red light? You still have your eyes pointed in the direction you're going, right? And you know, hey, in a minute, I'm going to keep moving forward here. Well, I kind of keep my eye on the peripheral vision to wait for that light to turn yellow.

The cross traffic. Then I go. Then you go. Absolutely. Gotcha. All righty. So that's it for today. 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.

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