Epic Real Estate Investing - Money Is NOT Your Biggest Obstacle | 987

Episode Date: April 13, 2020

Out of 99 problems you could possibly have right now, money ain’t one! Matt Theriault In today’s episode, Matt proves the irony behind money being a problem! More specifically, he shares how he successfully lends money for the current 2 deals that he is putting on the contract by the end of April. Tune in and find out more! Learn more about your ad choices. Visit megaphone.fm/adchoices

Hey there, Rockstar. It's creative acquisition April all month long, and of the 99 problems you could possibly have right now, money ain't one. 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 rei-aise.com.

Here's Matt. Hey, it's Matt Terrio 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 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.

I am eternally grateful for that. I hope you had a very happy Easter. And if you don't celebrate Easter, I hope your weekend was fantastic. I really wish you and yours success in every walk of life. I pray daily that we wake up from this bad dream soon and you start living the dreams that you hold near and dear to your heart. I wish for them to all come true with every day of life,

just bringing the best for you. because this all shall pass, it will, and the best is yet to come. I know you've probably heard that before. It's become a cliche, but it's absolutely the truth. And knowing that, take comfort in it because it is true. We're all looking forward to this quarantine thing being over. We're all looking into the future. But we've still got today to deal with.

We've got right now. So be present and make the most of what you've got. for the choices that you make right now will determine where you are and what you're prepared for on the other side of this thing when we are set free back to normal life. It's getting stressful, I know. The unemployment numbers are absolutely staggering.

I think the worst in 50 years they've said. It might even have been longer than that. I think they said 50 though. And when the economy is reopened up, many people are going to go back to work and those numbers will come down significantly, but many will not. For their jobs won't be there anymore

as their former employers will not have survived this. But it's not permanent either. It's going to take some time to recover. But we will. And in the meantime, we've got to make some money. We've got to make some money right now. We can't wait for the world to do it for us. We can't wait for the world to bounce back

before we bounce back. You know, we live in a society where nothing serves us in the way that money serves us. I mean, it puts the food in our stomach, it puts the roof over our head, puts the clothes on our back. It pays for the doctor bills. It helps us provide for those that we love the most. It's important. It's really important. And for those people that just love to go around saying, yeah, but money can't buy happiness.

Well, right now I say, maybe not. but you're getting really clear that it definitely pays for the things that make as happy. Money is going to be a challenge for many people for a while. But is it their biggest challenge? Is it the big challenge they think it is?

You know, when people contact me to discuss the possibilities of working with me inside of my RIAEAS private client group, when you go to RIAEAS.com, there's a few questions there for you to answer before we actually hop on the phone to discuss working together. And one of those questions is, what's the number one thing that's preventing you from reaching

your real estate goals? Not sure if that's the exact words, but what's your biggest obstacle? What's your biggest challenge? Something of that nature. And you could probably guess what the number one answer is based on the, well, you could probably guess without knowing the context on the subject of today's episode. Drum roll, please. Little suspense?

Yeah, the number one answer is money. money is their biggest challenge. It's what they write. That's what they think it is. Lack of capital. I see that a lot. And when I read that answer, I know right away that it's not their number one challenge.

That's the irony. And people may have money challenges. But the person that says money is their number one challenge, typically it's not their number one challenge. And that was all pre-COVID-19. That was before we were having and experiencing what we're experiencing right now. And considering what we are experiencing right now, I still say it's not their challenge during this quarantine. And when we come out of this quarantine and there are less buyers in the market, less lenders in the market, people will think money is their problem again.

Do you see how insane that is? I mean, whether the market is booming, whether it has come to a stop, or whether it's spiraling downward, how can money always be the number one challenge? It's not. It's actually never the challenge. It's not the number one challenge in any of those scenarios. The biggest fortunes in history were built during depressions. It's never a money problem, but merely an idea problem. It's not a lack of money that's holding you down.

I don't care how much you try to convince me that it is. It's not. It's the lack of a good idea. that's holding you down. It's the lack of action backing that idea that's holding you down. And in a real estate investor's world, those ideas are what add up to creative financing. That's why we're talking about it. You don't need money to do that.

But for the very definition of creative financing is it's not financial financing. It's not money financing. It's creative financing. It's how do you do it without money. You don't need money. You need intellectual currency. You need knowledge. You need the right knowledge.

You know, back when Alan Greenspan was the chair of the Fed, when he was asked in Congress what his opinion was regarding the biggest difference between the rich and the poor. And I'll never forget his answer. He didn't say education, which is kind of what people would default to. No, he said the right education. That was his answer. I'll give you an example. And I say this because with the risk of sounding like I'm bragging.

And I guess just by saying that, it sounds like I'm getting ready to brag. But I just, I want to give you a real world current example, something that happened last week and that is happening right now. And it just so happens to be happening to me. But it's perfect opportunity to illustrate my point here. And not with theory and not with hypothetical and not with someone I know a friend of a friend that did this or I read it in a book or something like that. No, it's something that I'm going through and dealing with right now. You see, I'm closing on two different seller finance deals.

Closing on both of them on April 30th. I've talked about both of them already. but I've got them both scheduled to close on April 30th, and I'm not putting any of my money into either deal. I'm buying two houses with no money, and I don't have any money coming out of my pocket, my own pocket until November 1st, but I'm closing on April 30th.

November 1st, that's when the first payments of those seller finance notes are due. And not only am I not putting money into those deals, I'm actually putting $10,000 per property in my pocket. And the idea that allowed me to do that during a crisis like the one we're in right now, and I'm watching my cash just like everybody else. So I don't want to deploy my cash. I don't want to put it out there. I don't want to park it somewhere right now.

I want that in case this thing continues to go. I want that money. I want my reserves in case this goes to the end of May or the end of June or the end of July. It's the uncertainty that has it all kind of freaked out. All to say, I'm just, I'm not putting any cash into anything, none of my own cash. I'm holding on to it for a sec. But the idea that allowed me to do that, to buy two more rentals, put two more cash flowing properties into my portfolio and $10,000 and $20,000 total into my pocket, the idea that allowed me to do that was find the deal first. Get it under contract.

and the money will find you. That's the sequence. People are so focused on the money that they never take action on finding the deal. And when you find the deal first, the money is so much easier to find. You see, you don't have a money problem until you have a real deal under contract

because you don't need the money before. So once you've got under contract, then, hey, maybe the money is the problem, but not before. not before you have it under contract like everybody thinks it is. See, here are these two deals. They look very, very similar. They're almost identical.

Their backstories are somewhat similar. The price on both, those are a little different, but they're both just about market value, a little bit under. Not much, though. It's not like a huge equity position or anything like that. They both require small down payments, 10 to 15%, 10 on 1, 15 on the other. Payments for the first few years will, start with really low interest rates, making the interest rate payment low and the principal pay down

high. And there's a six-month moratorium on both of those for the first payment due to them being vacant. So that's, I blamed to the market on it. I made the market the bad guy. I said, hey, those properties are vacant right now. I'd be happy to take all this burden and everything off your hands, but the properties are vacant. And based on what we're going through right now, we don't know when people are going to return back to work. We don't know when people are going to be out of the looking for new places to live. So there's a lot of uncertainty. So if you want me to take that risk,

I'm going to ask for a six-month moratorium. And both agreed happily, because I blame the market. You can't argue with the market, especially when the market is bad, especially when the market is the bad guy. And it's a pretty bad guy right now. Not necessarily the market is crashing or anything like that.

But it's the uncertainty in the environment that makes it the bad guy. And you can blame a lot on that at the moment. But all that to say, there's no real deal here. I mean, there's not a huge equity position here. There's not like the super cash flowing position I'm going to be in the day that I take ownership. No, really, the only thing that makes it a deal here is maybe the low interest payments in the beginning

because the principal pay down is going to be paid down swiftly in the first few years, thereby creating the equity position. And my terms in the note setting me up for the deal after the deal, as we discussed a few days ago, I won't go back into that. but really just the terms of the loan and then the terms of the documents is what makes it a deal. Because I have control of the deal and I have those things in place, it was easy for me to bring in private money for the down payment. And because of the deal, I was able to borrow $10,000 extra on each of those houses to put in my pocket. I borrowed extra.

I didn't need $10,000 extra. I needed, I think it's 15,000 on one and 19,000 on the other, something like that. But I got 10,000 on top of that for both of those. So this idea, it turned into two new buy and holds for myself for my portfolio. And I put more money per property into my pocket than most wholesalers do when they're singly minded focus with just a single idea on just flipping or assigning contracts. I got cash and cash flow because I've got the right idea for the market conditions. That single-focused wholesaling idea, that can work pretty well in an appreciating market,

as so many of us have witnessed, we've seen people doing it, and there's a good chance you're doing it yourself. In an appreciating market, I like it. But we're going the other direction now. And all of those 20-something and 30-something wholesalers, the young gun gurus, all the people that have been in real estate for less than 10 years, they're going to need a new idea, a new set of ideas for a shipping market. They're going to need to get familiar with creative financing terms and creative deal structures. Terms and structures, those are ideas. Those are new ideas for most people. We haven't needed them for a very long time.

They work in every market, but people just got so used to just the one little idea of wholesaling or flipping or assigning contracts that who needs to think about anything else? I don't have to think that hard to make the good money. You need new ideas, the creative financing terms and the creative deal structures. The same stuff we've been talking about here all month. And to get my private client started, I put together a list of 21 creative financing terms for them

and 10 deal structure templates for them. And I'm making those cheat sheets available to you too. It's just the time that we're in. Humans got to help other humans at the moment. I was just watching on the TV the food bank lines. I'm just like, okay, I guess we got to go and buy some food and take it down to the food bank because that's just what people are supposed to do for other people. And so those cheat sheets, they're available to you.

And if you'd like to pick them up, head over to epic breakthrough.com. and you can download them there for free. And I just put in a little video that actually walks you through them. So you're not just picking up two little sheets of a bunch of definitions and terms. I got a little pushback for that from someone. I was like, I guess you're right. They are just a bunch of terms and definitions on paper. And then he got all upset saying, I could just look those up on any investment website.

I said, yeah, you sure could if you knew which ones to actually look up. But anyway, I put them together for you, and then I put a little, I think it's a five or six minute video that walks you through it and explains it. And it's going to give you a really good start. Okay? So epic breakthrough.com, you can go get them over there. Just understand it's never a money problem, just an idea problem. You may have 99 problems right now, but money ain't one. Mercedes will be here with Turnkey Tuesday tomorrow.

And then on Wednesday, what I'll do is I'm going to share with you. my strategy for raising private money because private money did come into play in those two deals that I just shared with you. So I needed money, but wasn't using my money. And that's something that you're going to want to start doing right now. You want to start learning how to do this too as a good chunk of the hard money lenders as we go into this other market. It's going to be too risky for their blood. They're going to go find something else to do or they're going to pivot into some other form of lending or something like that, or they're drastically going to raise their price and their fees to hedge their risk in a

shifting market. And I think you'll totally appreciate how I raise private money, especially if you're a little bit of a chicken to ask for your friends and family and associates for money, if you're a little bit of a scaredy cat, it feels awkward and uncomfortable. If you can relate to any of that, I can relate to. I cringed at the idea at first. But I came up with my own way. because I had to figure it out.

If I wanted to use opium, I had to get out of my own way and figure it out, just like everything. You know, desperation is the mother of invention. And I call this the introverts guide to raising private money. And I'll share that with you on Wednesday. So if you found this episode valuable, there's a really good chance you know someone else who would as well.

And if that person's name comes to mind, please share this episode with them and ask them to click the subscribe button when they get here and I'll take great care of them. All righty, that's it for today. God loves you, and so do I. Peace, health, blessings, and success to you. I'm Matt Terrio.

Look at the drink. The cash flow. Yeah, yeah, we got the cash flow. Yeah, yeah, we got the cash flow. You didn't know, home, boy, we got the cash flow. This podcast is a part of the C-suite Radio Network. For more top business podcasts, visit c-sweetradio.com.