Epic Real Estate Investing - Money! | 966

Episode Date: March 23, 2020

Money is a commodity, money is everywhere, and right now there is no shortage of money in the system for a good deal. Matt Theriault Recently, Matt Theriault was guest on Andrew Cordle’s show Built for More and he decided to share the interview in today’s podcast episode! Tune in and find out how it was at the beginning of Matt’s real estate journey, how REI has impacted his life, how he understands and treats money, and many more! Learn more about your ad choices. Visit megaphone.fm/adchoices

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

Here's Matt. Hey, Epic Investor. It's Matt Terrio here from Epic Real Estate, where we show people how to invest in real estate with an emphasis on retiring early. This is the Epic Real Estate Investing Show, and if this is your first time here, really glad that you found us. If you like what you hear, make sure you hit the subscribe button before you go. And if this is not your first time here, welcome back. And thank you for sharing this with your friends and family. Really appreciate that. Love that about you. I mean, you're absolutely. the best for doing that.

And we're getting a lot of family time right now, aren't we? As we are all essentially told to limit our social interaction. I would say it's really, don't limit your social interaction. Limit your physical interaction, right? The news seems to change by the day. And if you know, if you really pay attention to the right stuff, it's not as bad as it seems. and the message from Dr. Fauci from the CDC is, you know, I've heard him interviewed now on several shows and several podcasts.

He's making the tour and he's in high demand. And he's really at a position where he'd rather be criticized for overreacting and have this not be such a big deal than underreacting and have it turn into a big deal. And I've been following Dr. Drew around as well. I played a little clip from him last week. But the news is changing so fast. So I'm like tuned into like, what's he saying now? What's he saying now? And Dr. Drew's message is still very much the same.

He hasn't wavered a whole lot. And he refers to Dr. Fauci quite a bit at the CDC. That's the little guy with the little glasses that you see next to Trump during the press conferences. And, you know, the guy from the, I think he's from the CDC. I don't know. I might be over speaking that. I might, but he's the health guy, right? He's our health official in the country in the United States.

And he's kind of leading the charge from the medical standpoint. point of how we're going to deal with this. And all that to say is it's not as bad as it seems from a health perspective, from a economical perspective and from a panic perspective. That seems of what we need to be most concerned about. Yesterday on an interview with Dr. Oz when he had asked, how should people be navigating their quarantines? And without hesitation, he said, well, you should go learn a new language or

learn to play an instrument. And then he said, learn something that will make you better for work when this is all over. And he went on to say a bunch of other stuff after that. That was obviously probably much more health-related where that question was coming from when he was asked. But that was the very first thing that came out of his mouth. And just all that to say with someone like Dr. Oz and Dr. Drew and Dr. Fauci.

They're like, they're all telling us just to kind of calm down. It's not that big of a deal. It's going to pass. and when it does, you want to be better for it, right? So I can't do much for his first two suggestions. I only know one language. I live with the Latina. It's been on my to-do list to learn Spanish,

and I can kind of make my way around the house. But once we step out of the house and start talking about other things outside of the house, I get a little lost. So I can't help you with that. And as far as the musical instrument goes, I've actually started taking piano lessons here about four months ago with myself.

I haven't been very good at my practice, my practice lessons and the instructions I've gotten from my instructor, but now is a really good time. But I don't know how to play it yet, so I can't help you with that. But I might be able to offer some assistance with the third to help make you better for work when this is all over. All righty. So I'm going to keep some announcements all week at the top of the episodes.

I'll be rotating those in and out of where you can get some extra help and learn something that will make you better for your work as a real estate investor. You might have already heard it at the top of this episode, depending on when you are listening. But I'm going to keep those nice and fresh and just kind of give you some guidance. If you want the help, you'll be able to get it. All right? So right now, though, I wanted to share a recent interview with you where I was actually the interviewee. The interviewer is a newer friend of mine who has a great video show, really high-quality videos.

I'm actually rather envious, and it's made me rethink my whole YouTube strategy because it looks like it's a TV show. And it's a, when he's got really great guests, and he's got Gary Vaynerchuk on there, Grant Cardone, and Kevin O'Leary from Shark Tank, and a bunch of others. He's been doing this for a while. And all on the subject of money. So if you take money seriously,

you might want to head over to his website, MoneyIs.com, and check him out. Mr. Andrew Cortle is his name. And a really cool dude. And, you know, he's a great conversationalist. And he's a very accomplished real estate investor in his own right. And so anyway, I was just honored when he asked me to join his esteemed guests on his show. And he was able to pull some stuff out of me that I think, no, I'm certain, that I had almost forgotten.

Not almost. I can't say certain and then almost, right? I had totally forgotten. Definitely had forgotten with regard to what it was like when I did my first deal. And we talked about a bunch of other stuff too with regard to investing and wealth creation and what you should be doing. And anyway, I just really enjoyed my time with him. But if you've yet to do your first deal, you might get quite a bit out of this episode. So I asked him if I could play it here for you.

And he was like, absolutely, whatever you want. So here it is. Enjoy. What's up, guys? This is Drew here at money is.com. And I'm shooting on Built for More about real estate. I've got my good buddy, an incredible investor, Matt Terrio here. Right here actually from Las Vegas recently.

moved to Las Vegas. Yeah. And we're to go through, just talk about how real estate impacted your life. And for those viewers are listening, I kind of want to dive into a little bit of the specifics of what they should do to get started, what type of strategies you guys should look at playing especially if you're getting started to right now. Before I do that, Matt, let's talk a little bit about you. You got your career started in L.A. Yeah, right? How long have you been investing now in real estate? Let's see. It's probably been, I don't know, 13, 14 years. 14 years investing now. You started in LA the whole time?

Yeah, the whole time. Which is a very tough market to play the game in. Because you hear a lot of people talk about doing deals in the Midwest, right? I did a lot of deals in the Midwest. It's actually kind of pretty easy, in my opinion, right? When you're in the Indiana, Ohio, I'm not saying it's simple, but it's a lot easier, I think. I did some deals in California and do the game to me change so fast in the L.A. market. And you got your whole career started in L.A.

how many deals ballpark between every type of rental, fix and flip, wholesale. Would you say you've done right now in your career so far? Yeah, I'd say a thousand plus. We got to a point where to stop counting. Okay. I just kind of say that, so I don't know. I don't know. I don't know.

Yeah, yeah, yeah. You know what I mean? Like 1,20012. I feel very comfortable saying a thousand plus. Dude, I want to break that down because that is crazy numbers there. A thousand deals is like off is crazy, but to do a thousand L.A. is like, dude, to me, that's like a whole other world to understand what all that would take to make that happen. But before we get there, let's back up for a second.

Give the viewers a little bit of background. How you got started, where you came from, just kind of get into those thousand deals. Sure, yeah. When I got out of the Marine Corps, I spent the next 15 years of my life in the music business. Music industry. Yeah. And I did really well for myself and everything was going really well. And this thing called the digital download came along.

Napster. You remember Napster? Yeah. Well, it turned out. whole industry upside down. And for someone that makes their living on selling compact discs through music stores, when that goes away, now you've got no distribution, right? And, you know, it's kind of obvious how you would do it today. But back then, it was a total mystery knowing had a clue. This thing called the internet was kind of brand new and buying stuff on the

internet was like unheard of at the moment. And so in six short months when that happened, I mean, I found myself bankrupt. I found myself divorced. Wow. And after a, a, a, a, a, feeble job search because I didn't really qualify for anything because I'd been in music my entire life. I ended up bagged groceries. So I've gone from this seven-figure year to $7 an hour. Wow. In L.A.? Yeah, it was in Los Angeles. Yeah, Manhattan Beach. Wow. So it was a very fluent area. So to be bagging groceries in that type of areas. How old-part year? What year was this? That was 2001-ish, just before 2002. So you have this music career that you're doing, succeeding at it.

Not music in the sense that you were singing, but you were in the production. And I had my own record label with major label distribution. So we were kind of a big deal for a minute. And so you were doing that. It crashes. You find yourself completely broke, lost everything. And it's amazing because, like, you see those in business, you see those, there's a whole strategy that I teach a lot called Blue Ocean Strategy, which is a book.

And they talk about how there's certain industries that will have that new thing happened to it and completely revolutionized, though the whole thing, like Uber was to, taxi cab. Airbnb is kind of do to hotels and do the digital download completely rearranged that. You find yourself no job, your wife, you and your wife separate and get divorced at the time, no money, bagging groceries. That's right. In Manhattan Beach, LA that's right. In 2001. That's right. No real good experience. Nothing. All right. So to pick us up from there, what do you do from there? So after about six months of having the world's biggest pity party and just crying and moaning and pointing the finger

and blaming everybody and everything. It kind of hit me at one point like, wow, I've been here for about six months. If I don't do something about this, I might be here the rest of my life. And I was 34 at this time, starting life over. And coincidentally, the grocery store manager was also 34 years old.

So he was at the top. I was at the bottom. A little salt in the wound. Yeah, right? But we became, because we were at the same age, we became friendly with, and he had just shared with me one day. He says, Matt, this is what I'm going to do.

I've been bagging, or I've been pushing cards and bagging groceries. That's my 16th birthday here. And I'm 34. I'm going to hit 20 years in two years. I'm going to go ahead. I'll be able to access my retirement, but this is the really cool thing. Look what I've been able to do. And he opened up this whole portfolio of these apartment buildings that he had acquired along the way.

No way. And he showed me how my 20-year pension thing that I'm going to get from the grocery store is going to amount to this. But look at this. These apartments amount to this. And I'll never have to work another. day in my life and I was just like wow wow and so he gave me these these words and I've said them probably a thousand times since he said you know Matt real estate it's the final frontier where the average person has a legitimate shot at creating real wealth yeah and at that point my life

I was feeling far below average and I didn't really know what I was going to do to get my money back because I really missed my money from the music business yeah I was like wow it was nice when when I was going and he just pointed that to me and pointed that out to me and it I didn't need anything else. I was like, okay, I'm in. I know I have to learn something new because I wasn't qualified for anything else that was out there.

I've been doing music my entire life. I had no documents or credentials of anything. So I knew I had to learn something new, so it just made the logical sense. Well, if I'm going to learn something new, I'm going to learn the one thing that gives me the greatest income earning potential. And that was real estate.

Dude, if you go back to that moment, I think a lot of viewers, especially viewers that have never done a deal before or they're just getting started into real estate, Dude, take us back to that moment because you went through it, but I want to go back to where you're like, dude, you were at ground zero. A lot of people when they try something fail. And I don't want to say fail because you were succeeding at it, but dude, something came over and kicked the whole industry's tail. When you kind of fall back, you fail, a lot of people are there stop.

And I find there's almost like two different groups of people here. There's the one group that never tries. They just can't try. Then there is a group that tries, fails, and then they never, they're afraid to go do something again. What made you just go do something again? Like most people after a failure, like look at and say, my God, I lost everything. I have nothing. My wife, my money.

Right. Do it on my ground zero. What made, what was, if you look back, what was that thing that drove you, you think? Well, there was two things. That had been six months of pain for me. Yeah. Because of such a drastic change. I was at the opposite end of the spectrum at this point.

Like you had the tasted the other side. Exactly. It was almost, I think, I would have been better off. I had never made it before, right? Yeah. But there was a day when I was bagging groceries. They were short on staff, so they needed someone to take over the register, and I kind of had seniority, so they put me up there.

And this soccer mom, kind of if you were going to go to Central casting and you can identify a soccer mom, that's exactly what she looked like. She had the tennis outfit on, and she'd just come back from her lessons, and she was pushing her strollers, one of those double-wide strollers at all the two kids. Yeah. I remember that. Yeah. Right. And she was on her phone, paying me no mind, while her growth.

I'm checking her groceries and I finally told her what the total was. And she opened up her wallet and her ATM receipt fell out of the wallet. And I couldn't help but sneak a peek. Oh my gosh. And so I did. And I remember that to this day, it was $256,000 in whatever that account was. And that was a very significant number for me because when I was in the music business, when my account hit $250,000, it signaled it was time to make a transfer.

Okay. And I looked at that and like, wow, it was probably at that point a business. there for six months, probably about nine or ten months since I had seen that balance in my bank account. I was like, wow, if I continue doing what I'm doing right now, I will never ever see that again. It's bath of that impossible. Yeah, I'll never see it again. And so that was the moment where I was feeling a little nauseous. And literally, I really was. It really hit me hard. And I excused myself. I walked out to the

parking lot. I sat in my car and just tears. And I really looked up to God and started to pray and to say, there's got to be more for me. This can't be it. This can't be the plan. And when I walked in, now, coincidentally, this is exactly when that grocery store manager noticed that something was up. Okay. And he kind of put his arm around me, and that's when he kind of shared all this stuff

with me. So that's what that all happened. That was the signifying moment. And I think what's kept me going ever since through, you know, some of the stumbles and the shortfalls and the crash. Totally. Is I know what that feels like. Yeah.

And I'm never going back. Dude, that's so cool, man. It's cool to see, you know, I failed. I lost everything in 08 in the crash, went through the divorce, went through losing my house, had to move back to my mom and dad's basement. And when I find someone else who went through that, it's kind of cool to see what was that, like, switch.

And you never know what it was. It was like one day, I think sometimes viewers think you sit down sometimes think, oh, I read this book, and then I did these six steps right here, and then that's what propelled me to go to take this. But a lot of times, dude, it's that random thing that happened to you. And for me, it was something my dad,

said to me when I was in my pity party, right? Because if you've ever been successful, you lost, you kind of go through that three to six months. It's not fair. It's not fair. Why me? Looking for anything but you, right? And, uh, dude, I just remember something my dad said. And it was just that random thing that probably, if I even went to him today and said, you remember what you said, he would have no clue what it was. But for some reason, it flipped that switch. And I said, dude, I got to, I got to go, man. I got to move on. This is, this is enough. I love hearing the comeback story, man, of losing everything and then coming back. Let's get now into your manager's

these apartments, you say, dude, I'm going to jump into real estate. Talk to me about your first deal you ever did. Sure. Well, that would be a big leap. What happened that night was I grabbed the bottle of wine, which I was developing this habit of doing every time the shift ended. And I went home and I just hit the search engine and searched for everything that had to do with real estate.

Okay. And so everything I saw suggested that I needed to go become a real estate agent. Yeah, yeah. And during that search, I actually ran across an estranged aunt. I hadn't seen her in probably 15 years. It turned out that she was the number one real estate agent in just two cities over from where I was living. I had no idea. Wow.

So I just, after the bottle of wine was over, I was a little bit of boulder and braver. Fired off an email. And in the morning, she said, yeah, I'd love to meet. Let's have lunch. So I had lunch with her the next day. And within 24 hours, I was getting my real estate license. I was in that school. and I was an agent for about four years, and I did okay, but there was a moment where I was working on a Saturday,

and I had a meeting with a client at 10.30, and they showed up about 11, and I was dressed in my suit. I had all their documents laid out, and just kind of sitting there on my Saturday waiting for them to come sign their documents. Right. And they came in, jeans and a T-shirt, signed the documents, and took off, and then I had to go hold their house. open and they were real estate investors. And I was like, you know what, if my grocery store manager said, this is the final frontier where wealth is created, I think I'm sitting on the wrong side of the desk. Yeah. And that was another pivotal moment for me where I made this decision, okay, I'm no longer going to represent other people in the purchasing and the selling of real estate.

I'm going to represent myself. I'm going to do what they did and I'm going to have real estate agent like me working for me. Yeah. And so that was the big shift. Do let me jump on that point with you because, you know, talking to so many newbies, right? Or if you've never done a deal before, there's kind of that always that I thought, because someone's pushed so much of go become a real estate agent. And a lot of times, even as I teach in classes and stuff, you see people that they're like, oh, I'm an agent, I'm an investor.

And it's like, no, dude, those are two totally separate concepts. Becoming your real estate agent and becoming real estate investor are not the same concept of all. It's like two different career paths. There's very little overlap there. Very, very little overlap. But they had this idea that to be, for us, because we're investors that we also are agents.

So for me, I never, ever went and got my real estate license. And people always ask me, do you have your license? And I chose not, almost like I did not want to go down that road. And then on purpose he said, I'm not going to go do become a real estate agent. When you became the agent, when you went to full-time investing, do you still do any agent work right now? No. Yeah, completely gone. I let the license expire.

Yeah, dude. It's amazing. continue education to keep it active. I always see, and I know you're a trainer and coach as well. I have always seen where people, I see all the time where real estate agents want to become investors. But I rarely have ever, ever, ever seen a successful real estate investors say, oh, do you what I'm going to do?

I'm going to become an agent now. Right. I've never seen it that way. Yeah, well, the big distinction there is, you know, the agent works for commission. Yeah. The investor gets profit and cash flow. Yep, yep. Right?

That's so much better. And ownership. For very similar, the same type of work that we're. where you go out and you find your customers, or you find your opportunities. It's a very similar type of work. And the reward is significantly different. So right now you're not an agent.

You can completely let it go. All right. So you meet these people. You say, dude, I'm on the rocks at the table. Pick us up from there. Sure. So I made a large investment in my own real estate investing education. I was really fortunate to find a good program right from the beginning.

From what I heard that I could have misstepped quite a bit out there. Landmines. Yeah, right? But I found a really good one. and I went and I just learned. It was a two-year program, and I sat in a room with like 300 people. Yeah. And we traveled to this location once a quarter.

So it was kind of cumbersome, and it took some effort to get there. But I was just a good student. And I was taught this saying that I say all the time now to my clients is to move at the speed of instruction. Because so many people are always getting ready to get ready. Yeah. And they just need to know every single step before they take the first one. And they said, if you want to be successful with this, don't do that. You learn a little, do a little, learn a little, do a little.

When the whole philosophy was, you know, just travel as far as you can see. And when you get there, you'll see further. And that took a little bit of faith in the beginning. But after it was, it played out for me exactly how I was told it was going to play out, then that's become almost a philosophy for our life now. There's so much good truth you just dropped right there. Number one, I think when you said, okay, dude, I got to make this shift from becoming an agent to go to become an investor. You didn't just run out and go buy a house.

You actually kind of, I'll say, paused and went and invest in yourself first. And dude, I just think that's like one of the biggest mistakes that I see with individuals now is they refuse to invest in their self. And to me, the next thing is you. You are the thing. And the more that I've put into myself, if so as education, investing, reading, going to to masterminds, think tanks, whatever it may be, coaches, mentors in my life, the further it got me. Not all were perfect. Not all. I won't even say that I always got my money's worth out of some of them. But I always took away truth that I could apply and use. I think it's a big point. I just

don't want to skip over that because you taking the time and spend those two years of education. And then you made the second fall-up grade point, which I love, which was it wasn't about mastering everything. And then learning everything, it was learn, do, learn, learn, Go do. Learn, go do, right? Yeah. Because, dude, I know you've seen it before where maybe newbies get into real estate investing and they try to learn everything about real estate before they go do a deal. And it's like, dude, there's not a teacher out there that could literally teach you every possible scenario,

negotiation that could or could not happen and what to do if it does happen, right? There's a lesson in every single transaction. Yes, yes. And there's so many variables, so many moving parts. Yep. You could never, ever be prepared for every single. thing. But the one thing you can do is when you get stuck is ask for help. Yep. Right? And you stay connected. Education base is there. Education is based. And you stay connected. You be intentional about creating

your environment. You attach yourself to mentors. I mean, hire one if you must, right? And, you know, the people that have the most success with us are the people that are quick to implement and quick to ask for help when they get stuck. That's good, dude. And then they go back again. And that's a process that we've just seen work over and over and over again for people. So I was very limited on funds at that time when I made this transition. So it was a big leap. And I went to my coach and I had asked him, okay, so this is where I'm at. I don't have a lot of money.

I don't know what to do. And he says, okay, this is what you're going to do. And he says, go out and drive up and down the street. Yeah, driving for dollars. Driving for dollars, right? And he says, just look for that dilapidated house, look for a house that looks somewhat distressed. write all the addresses down and bring them back.

Right? So that was the thing. See, he's like, if you don't have any money for marketing anything, this is how you got to do it. He said, he said, you can pay for it or you can earn it. Those are two options. Those are two options. There's not five. Those are two.

So I had to go out and earn it. So I went driving and found a very first day. I found a house. It was in Newport Beach on Newport Avenue, I think 1740, Newport Avenue. There was a house there that looked like it had started to be fixed and flipped. It looked like it was the intention because it was torn down. But all the new wood and everything, the new build was kind of rotted a little bit. So it looks like it had been weather beat a little bit.

Like all the two-by-fours. Sitting there for a while, exactly. And there was a for-sale sign from an agency in front, and that sign was in just about as bad as shape as the property was. So I called it, and it was actively listed. And that's exactly what happened. Some investors that got in a little bit over their head and ran out of money, and now they're just trying to salvage it and escape that.

And so I said, I called the, coach, I said, what do I do now? He says, make them an offer. And I was like, make an offer. I don't have any money. What are you going to come in with this? No, just make the offer. I'll tell you what to do next. Yeah. So I made the offer and it got accepted. I said, went back to my coach, okay, now, smarty pants. Now what? Here's the, here's the contract. What do we do now? And he said, okay, this is what you're going to do. You're going to take this and you're going to create a little flyer out of it. So he's to take a picture of the house and then put just the bullet points. But focus on that flyer of what's in it for whoever you're going to sell it for or sell it to.

So this house probably is going to be sold to another fix and flipper. Because someone needs to come along with the expertise to do that. And he said, and then look at all the real estate events. So I just went and started Google searching. There happened to be two that week. And I went and, you know, they always have at the front of those meetings, the needs and wants section. Needs and Wants. Shaking in my boots. Shaking in my boots.

Okay, let me catch up here. Give me some data here. About how much was ballpark, if you can remember, how much was it, the purchase price? There's $275. All right. So, you know, as a newbie, like, I've been there, dude, and you're like, oh, my God, I'm on the line for $275,000. And I have $2.75 to my name, right? Okay, so you have this, like, pressure that you don't know what's going to happen next.

But, again, it goes back to learn and go do. Learn and go do, right? You go to these, like, clubs and networking meetings. All right. You're terrified at this point, right? Yep. Terrified. Love it. Love it. And so I stood up and very nervously, I think I gave my whole pitch inside of 40 seconds. I just said it was super, super fast. But I remember saying, hey, I got this house and they ran out of money and it looks like there's some big potential here. I have it figured out. It was probably about 300 grand equity. And after it's all said and done. If you want some more information about this, yeah. Meet me in the back room at the end. I'll give you a flyer. I'm done. I'm out. Yeah. Now is the whole pitch. Elevator pitch. Yep. And there was probably 100, 120 people in the room that night. And I went back and I just kind of sat there and I was like, my heart was racing, thinking that everyone in that

audience was thinking about me the entire time. They're thinking, oh, what an idiot that guy. I'm a little moron. When I was done, four people out of that 120 came back and said, hey, I like this thing. And so one, we just kind of connected with one of the people. And they said, okay, so how much do you want for it? And I was like, how much do I want for it? What it is. I thought I was actually trying to raise money, right? Yeah. Oh, you thought you were there to raise money. Yeah. Like a partner on the deal. I said, you know what, let me think about it. Let's go ahead. Let's have coffee tomorrow. I just had to take a break. So I had to go call my coach. What I do now?

I've noticed that great investors are good on their feet, though. You know what I mean? Like, if you find a successful investor, they're good at adapting because you don't always know the answer. And you've got to find that way to be quick on your feet and know how to pause it, move around it to go get the data or information and then come back to it. I've always thought great investors are good communicators, talkers, et cetera, in the industry. So you pause it. You, you pick it around. This isn't really the time. You're added a man for real estate. I know, but I was like, you know what, let's go over the details.

Can we just have coffee tomorrow? Smart man. I knew that would give me a break to call my coach. Of course. Okay, what next? Yeah, I love it. And he says, okay, now what you're going to do is because if you were what they call a bird dog, help finding deals, you might get $500 a thousand bucks for this, right?

Little fee. But he says you have the deal under contract. You have control. Big difference. You're going to be a partner in this. So see how much they'll give you for being a partner. Yeah. And so I went in and I said, okay, I'll give you the contract and, you know, how much are you going to cut me in for?

I'll just give it to you, but how much are you going to cut me in for? And I got 20%. Wow. Right? So I remember I made $26,000 on that deal. But the real learning experience was you don't need the money. Yeah. You need to find the deal first and the money will find you.

I was going to ask you what you thought on that was. Yeah. So, I mean, that's been my strategy ever since. It's just get everything under contract. There's contingencies in the contract. If it gets too hairy for you, you can always back out with no penalty if you follow the guidelines of the contract.

Money is the commodity. Money is everywhere. Right. And right now, there is no shortage of money in the system for a good deal. And I was like, you just got to be a good deal finder. You get control of it, and then you get to call the shots. I mean, how many times have you heard people say,

I know you have a huge podcast as well following, how many times have you heard people say, oh, if I just had money, I do this deal. or if I just, the one thing that's stopping me is money. And dude, I have disagreed a billion percent. It's not money that's stopping you. I feel like that's just an excuse that they use because other people can understand it

and kind of justify it with them, right? Like, well, I would be doing deals, but I don't have any money yet. It's like, dude, I don't know. I know there are. But the people that I network with, hang out with, that have built success in real estate started with nothing.

Like, we all started, like all the people that interview, Right? Yeah. It's like, oh, yeah, I started with no money and then I went into deals. Oh, I started with no money and then I went into deals. I haven't met someone. I'm not saying there's not people out there, but I just haven't interviewed the person said, well, I was sitting on $5 million I inherited and then I went out and did a wholesale deal. Like, dude, I don't, I'm not saying they don't exist, but I haven't found them yet, right? In this business, there's two kinds of currencies that you have at your disposal. I mean, there's the actual currency, the money.

And then you have your intellectual currency. Yeah. Right. And what I've seen is those that have actual currency, people that have money, what do they do? They spend it. They are buyers of real estate. Those with the intellectual currency that don't have those means, they go and they find better deals. They become shoppers. And I've seen that the shoppers of deals are much better investors than the buyers of deals. Because they know they don't have any money to bail them out if they make a mistake. They know they don't have any money to put down or actually purchase it. So they negotiate better terms for themselves. They go out

and they just flat out find better deals because that's their option. So I really think there's a huge advantage of getting started with minimum, minimal amount of money. I mean, if someone has a hundred grand says, I want to get in real estate, I got 100 grand, I was like, great, go in the backyard and bury it, okay? And then come out and then let's work on your intellectual currency first, because if you don't know what you're doing, I'm not even going to let you use your own money. Yeah, it's actually super risky, dude.

When you don't what you're doing, the amount of risk, to me, skyrockets. whether it's your money or someone else's money, dude, you got to know what you're doing to understand how to put the deal together, how to structure the deal, how to get in the deal, out of the deal. Without knowing that, who cares if you have 100,000 or 200,000? It's kind of a mute point to a certain degree. So you do this first deal, you make this money. Let me ask you a little bit broader question right now.

If you were someone getting started today, which one would you want to go with if you were getting started today, ground zero? Ground zero. to start, it would be to become an expert deal finder. A deal finder. Absolutely. Because once you find the deal and you get control of it, now you can decide what you're going to do with it.

Do I flip it or do I hold it? Yeah. Right? And that answer to that question is going to change from deal to deal from time to time. Because if someone's just getting started and they have some cash, they might not need to flip this for the cash. Right. They're going to want to hold it to build their cash flow and start building their net worth.

Or this deal comes along and like, hey, I've got to replenish my marketing budget and I got payroll or whatever. Maybe I got to make rent at home. So I need to flip it for cash. Right. So if you're good at finding the deal and getting control of it, the deal and the circumstance that you're currently in will kind of dictate which way you go. So that's, I would really recommend people just be good at finding deals. Becoming an expert at finding deals first. And it doesn't matter the asset class, whether it's multifamily.

or storage facilities or single family residences, you still have to find the deal. You're an investor. You've got to buy low, sell high. So you've got to do that first, and then you've got to get control of it, and then you can decide how you're going to profit from it. In your career, okay, so let me get for the viewers,

if they're starting off right now, or even if they're actually done some deals right now, your opinion is their best option. It's just to become an expert at finding deals first. Master that art of the game first. right. Okay, so in your world now, you've been investing thousand plus deals for the customers now that they've been in the business for a while, maybe they're two years on the road, they've done some deals. Now we're going to tell them which way to go with it.

Sure. It's all going to depend on what their goal is. Okay. Okay. Most people come into real estate because of the income opportunity and ultimately they envision the financial freedom for themselves, right? So if it's financial freedom that you want, buy and hold strategy, contrary to what would feel like conventional logic, is going to get you there three to four times faster. Yeah. Than flipping houses as well. Flipping houses, you can make good chunks of cash, you can make piles of cash. You can get rich flipping houses, but you get wealthy holding them.

And, you know, when you extrapolate that out, I mean, I've done the spreadsheet several times just to confirm because it just doesn't feel right. Still right. But if that financial freedom, it's understanding what's going to create that for you. So it's typically going to be a residual income for most people. That's where the freedom comes from is because you know your money is going to be replenished month after month after month. So if financial freedom, like we just use the median household income in America, and that's like $46,000, $47,000 a year, say you need $5,000 a month to create financial freedom. Right.

That's going to cover your bills and you're not going to be rich, but you're going to be free. Okay. If you needed that, you know, and you got a house, and this is a normal scenario that Mercedes and I, my partner and my wife, that we deal with on a daily basis, we'll have a house. Do we flip it for $30 grand or do we hold it for $300 a month? Yeah. Okay. And most people with that scenario, they take the $30 grand every single time. That's a big chunk of cash. That can make a big difference in a lot of people's lives. But if it's financial freedom that you're after, you're going to get to that $5,000 a month. much faster holding the $300 house. Yeah. It doesn't feel like it on the first one. It doesn't feel like it on the second one even. Right. But once you get to that third one and fourth one,

now you've got an extra $1,500 a month coming in each month to your household income. All of a sudden, you've kind of got an extra person living in your house, earning a paycheck and contributing. Right. Right. And now it starts to really make a difference quickly. But if you're over there flipping houses, yeah, you got $30,000, $60,000, $90,000, that's adding up.

But if you were to put that in a safe investment, somewhere, it's not going to generate anywhere close to the amount of cash flow that the cash flow property would generate. So, like I said, I've done it, and we don't have the ability for me to draw it out. But just trust me, it goes three to four times faster, going for the holds more often than the fix and flips. Well, dude, I mean, I remember when you showed it to me, and I come from my background of the flipping side, the fix and flip side.

I never really got played. I mean, I did some wholesale deals, but I never really got into that game. My very first deal was a fix and flip. And I went and did hundreds and hundreds of fixing flips. I enjoyed it. And when you showed me the math on the income and you said, and when you did it, you said, look, if you need the $5,000 a month, if you take you, I don't want you to quote me to this number,

but it was like you'd have to have like a million dollars in the bank. Yeah, it's at 5% interest or something like that, right? Which is pretty standard. 1.2. And then you would make about that $5,000 a month of income, right? So the viewers, you start thinking through this, because I want to try to walk through it because, dude, it is actually really cool. You'd have to have $1.2 million in the bank sitting in a, like a mutual fund, right? And you'd make, what was the interest rate you said you'd make?

5%. 5% interest. This is the number that financial planners normally use with their clients. Which is very attainable. That's a doable number, right? Not a lot of risk or anything. But it would take you $1.2 million in the bank, cash to make that $5,000 a month of interest. Your $1.2 would never go up because you'd be.

draining out the interest every single month on it. Okay. So now as a view, you've got to think about that, how long would it take you to get to in your current job, $1.2 million in your 401k? And I think we know the answer to this one. The majority of the majority, majority, majority, majority of Americans will never get to a million dollars in their 401ks. It is just a myth that that is not a true concept that they're going to get to a million dollars inside that 401K, man. People just don't earn enough to save enough. Nope. And for even those that do, the restrictions on how much you can contribute each year, it's a 40-year

plan. And that's barring any sort of catastrophes along the way. It just doesn't happen. There's a big thing came out in the, all the news facilities, this is about, I don't know, about 18 months ago or so I said the 401k millionaires is hit an all-time high. Right. I mean, there's more millionaires out of their 401Ks. and it grew by 16 or 17%.

So that seems like a significant number. That's what they reported. Right. But if you looked at all the 401K participants, all the people that have a 401K that represented 0.02% of all 401% of all 401k participants had a million dollars. Yet we're all like so many people are playing that game. Yeah. And just not kind of do the math on it,

understanding that it's not really ever going to get there unless you're in this. this point, not even the one percentile, you're going to be in the point zero two percentile to actually reach that goal right there. And they ran the, they ran down the blueprint or the playbook, I guess, for those that made the million, what did they do? Well, they maxed out their contributions, they had to do 15 percent a year, and they started early at 25 years old or sooner, and they did it for 40 years. They finally got there.

Right. And so they were promoting this, because I guess there was maybe as a Wall Street angle to it or something like this is where we want you to put your money. So it was a very positive thing about it. But what about the person that's 30 years old? Right. Or 35. I'm 38 right now.

Those five or 10 years makes a significant difference when you start talking about the miracles of compound interest. Those last two or three years are the most powerful ones. Yeah. But if you start five years late, right. Like you've missed out on all that growth. Now you're working into your 70s and potentially your 80s if you wanted to go follow that planet 40.

That only works if you actually do it for all those years. And then even when it does work, let's just walk it out. You're 65, 72 years old. And now you can finally go to retire. Yes. It's like, bro. Three-fourths of your most active years of your life are behind you.

Life is over. That's what I'm saying. It's like, okay, if you're hitting 68 when this finally hit in this made-up world of 0.0% and you're 68 years old, it's like, dude, you have, whatever, 90% of your life is gone. Your most active 90% of your life is gone. And it's like you worked to retire to die. That's all you did. You work to retire, to die.

You sound like me. This is great. Dude, I very rarely meet anyone that gets it. It's like so... I get so much resistance and argument about it. I was like, don't you understand. Life is over. How do you...

I think, yeah, dude, I battle this all the time, like, how people don't understand this and why it doesn't like shake it with a core, be like, forget it, I'm done. They go back this mouth it here. So that was the $1.2 million concept of 401K. Then you have the fix and flip, which was me.

Before you show me this, it was me. And on the fix and flips, you had to do like, and again, it was like 40 houses. Yeah, so if we took that example of 30K per flip. Of profit, which is average. It's very common. Right, very common. So that's 40 houses.

It would take you 40 fix and flips. 40 fix and flips. Without touching a dime of it. Without touching a dime. Yeah. To generate that 1.2. Right. But if you went over this $300.

How many years that take you, though? Oh, I mean, if you did one a month. Which is, for a beginner's, like, a lot. Yeah. I mean. I mean, you're probably looking at four to five year game plan right there. At best. I mean, that's just like, if you got in the game, you were good at it, you mastered it.

But you can't spend anything that you make. Which means how are you paying your bills? Right. And fix and flip is a full-time job anyway. Especially if you're doing 12 to 15 dollars a year, dude. Yeah, for sure, for sure. Full-time job. So let's say you lived on half and you saved half.

Okay. So now you just went from five years to 10 years. A 10-year plan. Right. Now it's a 10-year. Still at best. Still at best. Yeah.

At best. Now, where the magic gets really fun or the math gets really fun is if you were going to hold those properties and you did that one a month. You're looking at 18 months. I think it was like 17 houses. Houses. So it gives it for one and a half years. Yeah. 17 houses. If you were, so on one side, if you bought 17 rentals with just $300 a month of profit, which means you leveraged borrowed money, you don't have to pay for it in cash. You borrow the money. You made $300 a house, which is a very common number. It's not a crazy number by no stretch. you made $3 a month on those properties.

After 17 of those houses, you would make enough money to have your $5,000 paid for. You would have the median household. Forever. Yeah, forever. Because here's the thing I don't think people think through. Even on that fixed plan,

which is the $30 now, which is why people take it, right? Even on that track record right there, you would still have to work for 10 years straight just to get the $1.2 million in the bank, to make the $5,000 a month you would want. Yeah. It's still, it's like a crazy concept.

Or over here, by the 17 houses, which you could actually do. You tell me what you think here. Could someone buy, on a steady basis, 17 rental properties while still having a full-time job? Absolutely. Of course. Of course. Especially with all the turnkey operations that are in really good markets, right, that you could do that with.

You could have a full-time job, the entire 17 houses. You could keep the full-time job after the 17-houses if you want to do. I just think that people miss. And we're not even getting into appreciation, depreciation, depreciation, amortization, like we're not even getting into any of that stuff right there. This is just understanding the basic concept of cash flow versus fixing. Yeah, I call it the difference between mountains of cash and streams of cash.

Yeah, that's a great illustration. The mountain is really extraordinary looking, right? It's impressive. But the stream of cash just never stops flowing. And then there's another thing, which I know we don't have time to get into now, but dude, if they watch your podcast, I know you're going to a lot of this stuff, is there's the traditional rentals that everybody knows about, right? You put the 10% down, you put the 20% down, you do deals, right?

But then there's also the creative side of it, where you can get into the owner finance side, where you can get into the subject two side of these different types of deals, which can really change even how fast you can play that game. It kind of goes back to your first point, which was via expert at finding deals. Because if you're expert at finding deals, all of a sudden, I just had a guy in my hometown Atlanta hit me up,

and he follows me and does a bunch of stuff with me. And he said, dude, just the market is, he's a wholesaler. And he fixed and flipper. And he said, dude, there's some markets here getting so tight on these spreads that he's like, dude, I just don't think I can do any more deals right now. And he said, what would you do? And I said, I would do what everybody else is not doing. Because, you know, I said, dude, in Atlanta right now, it's like wholesale central, man.

Everybody's wholesale, right? So common. And I said, dude, these guys, obviously, you know the numbers. If you don't know the numbers, you follow another podcast. You can learn about it. But it's like, you know, you can only go up to so much LTV on those wholesale deals, right? You got to be selling that thing for that 75% to 80% loan to value of the after repair value. Yeah.

Right? And that's all the spread there is. And if you go up with those numbers, you don't even have a deal no more. You literally have lost the deal. When I started walking this guy through, kind of one of your big strategies, which is understanding how to owner finance, have the owner finance that for you, I said, dude, you could pay 100% of the homeowners value. I said, dude, hell, his name was Paul.

I said, Paul, you can actually pay 110% if you want to do. As long as he'll owner finance that for you, it changes the complete game of having to get that number so tight, which is like a needle in a hate stack, right? If you define that 75% right there, dude, I think that in your strategy of the cash flow of understanding there's the rental game, but then there's also the creative finance game, which I think a lot of people miss out on. Yeah.

Is it a creative finance game? That can go both ways. That can go on the acquisition and the exit. And the exit side of it, right? And hold a note. Right? Hold it all in the backside of it, dude. Man, I love the game of real estate and cash flow.

Unique question here. Do you play a lot of the tax-free Roth? solo 4-1K Roth. Do you play a lot of that game right there to get out of the tax side of it? Right. There's a couple different ways that I'll participate. I really believe in setting yourself free first.

Yeah, sure. Just generate the cash flow. To me, it just doesn't make sense. And this goes like with paying off your primary residence and all these kind of antiquated saving strategies that people kind of, they have this mission to retire their money before they retire themselves. Yeah.

Right. And so I kind of just flip that around. The tax-free environments, the tax-deferred environments, I'm all for it. Right. But let's just kind of switch the priority and get yourself free first and start producing the cash flow outside of that environment so you can benefit from it right now. And the other part that could be really helpful is if you have friends and family and network that have those vehicles, then you can put an amazing amount of ROI in their plans. And benefit outside yourself as well.

Yeah. I love it, dude. I think that the investors miss is the power, you were talking about right there, the power of a network. Because to me, I find so much opportunity inside my network, which is we're like not just deal flow, but other opportunities to invest into different things. Like I invest in the car washes and storage units, which is not really my thing. Like I don't want to go master how to, you know, start a car wash, but I have buddies that do it. Sure.

And because we're in the same network, which we build. We didn't grow up together. We both got lucky. Dude, I met these guys two or three years ago at different events and so forth, but it opens up that opportunity that's there. Last question, I want to ask you, man, market, right? It's a big thing. It's important to understand. Obviously, you always hear the buzz of we're in a bubble, we're in a bubble, we're in a bubble. Right here, we're in Las Vegas right now.

You're in L.A., which is another huge bubble market. What's your thoughts right now on the market? How much do you play into it? How much do you worry about it, et cetera? Good question. I don't, I don't, quick answer is I don't worry about it too much at all. Reason being for a few reasons. One is regardless of the, I don't think there's a good market or bad market. They're just up markets and down markets. And in both of those markets, there's a relative low price to purchase at and a relative high price to sell at. So maybe your strategy on how you actually profit from those deals changes a little bit.

But the fundamentals are always there. That's the first thing. Second thing being, a buy and hold investor, I really don't care what happens to values in between my ownership, because I know I'm cash flowing the property. That's why you bought them. Exactly. I have no intent to sell them. I'm not saying I'm not going to, but I don't have the intent to. So that's the second thing.

The third thing is when you just look at the concept of supply and demand in normal economics, right, you've got a fixed supply, which is the land, right? And you have a growing demand, which are people. And so each generation, as long as we've been alive, is a little bit bigger than the previous. And as long as that demand continues to grow, there's really no way that values can drop and stay down forever. So if you look historically, the prices have always appreciated. And I mean, I remember my grandparents, they were telling me they bought a house for $5,000 in Long Beach, California. And they just thought that was all the money in the world.

and how could this thing ever be sold for more? Yeah, yeah, yeah. Did you imagine? I don't know, right? And so here we are today, and the median house price in that area is probably about a half a million dollars now. Right, yeah.

And then people are looking at that, like, how could this ever sell for more than this, right? Yeah. It's because the demand continues to grow. And when you look at, if you're going to place your energy and effort into anything, those are the dynamics you want to look for. Supply is fixed,

and demand continues to grow, therefore value and prices will continue to rise. Yeah. So with those three elements at play, I not really care if the market goes up or down. I don't know I'm going to be fine either way. I like what you said a while ago, man. Kind of last point here was like I love it that you said,

there's not a good or bad market. There's just an up or down market, right? It's not like a, it's not like, I mean, 2008, 9, 10, Vegas was one of the bottoms of the bottoms. But it's not a bad market, dude. I mean, people that came in in 0, 9, 10, 11, and bought houses in Las Vegas and held them to right now, I'm sure are going absolutely haywire happy right now. Because it's not a bad market. It's just the upper down that it moves through the process there, dude.

Matt, man, I appreciate the interview, dude. I love talking to you. You guys are listening. This is the guy's number of thousand deals and some of the markets all across the country. If you don't follow him, make sure you follow him at his podcast. Matt, give the name of your podcast right here. Sure. It's the epic real estate investing show.

Epic Real Estate Investing Show, and your wife Mercedes is on that quite a bit as well. So you guys follow him on his podcast. Matt, I appreciate your time. This is Built for More at MoneyIs.com. This podcast is a part of the C-suite Radio Network. For more top business podcasts, visit c-sweetradio.com.