Epic Real Estate Investing - NEW Hot Real Estate Market, the Death of the Subject to Deal, and the News | 1135

Episode Date: March 27, 2021

“Let’s get out of our pocketbooks and use more of our knowledge and imagination” Matt Theriault In today’s episode, Matt reveals a NEW hot housing market, explains why the creative Subject to Deal strategy is decreasing in its popularity, and why you should pay greater attention to cryptocurrency! Tune in and find out 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's.com.

Here's Matt. Hey there, rock stars, Matt Terrio from Epic Real Estate, where we show people how to invest in real estate using more of their minds rather than their money. Let's get out of our pocket books and use more of our knowledge, our imagination, our creativity. Using creative real estate investing strategies, that's what I'm talking about, with an emphasis on escaping that daily grind and retiring early. Now, if this is your first time here, really glad that you found us. If you like what you're here, 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 continuing to share this with your friends and family. You're the absolute best for that. I love that about you. Thank you. So today, going to talk about a new hot housing market, something that you're probably not thinking about. Going to talk about how the creative subject to investing strategy has likely seen its best days and why, but how you can keep it alive and well inside of your investing toolbox. I got the news for you and for our very first week of this week in crypto, cryptocurrency. But first, today's sponsor of the show, Launch Control, the most effective and cost-effective tool to find motivated sellers.

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So if you've been. Sitting on the fence maybe a while, if you're listening to the show, likely not, but just in case. And you've been waiting for the housing market to crash to make your riches investing in real estate. Your weight could be over, but not how you might think. You see, there's a new housing market that is set to explode. It's set to blow up. And we're even at the ground level. And you see, there's this digital land grab going on right.

right now. Real estate deals there are surging and people are making millions. And in case you haven't figured it out yet, I'm speaking of virtual real estate. Not your virtual wholesaling that we are used to hearing that word around, but no, actual virtual real estate. And if you're wondering what that is, I don't know, maybe you're not, but I was because this is something very new and apparently something not to be ignored because there's big bucks in it. So it was a very wise person once told me many years ago, and if you've been to one of the epic intensives in the last year or so you know him, you got to meet him, Mr. Stephen Gregg. And he had shared a quote with me that I've thought about ever since, and I've applied it ever since, that the best way to learn

something is to teach it as soon as you learn it. So I have just learned about this. So now I'm going to teach it to you so I learn it even better, but also give you an introduction to what this virtual real estate thing is all about. And although I've been privy to the rumblings, but I just haven't paid them much mind. And like I said, I just learned about this in a Wall Street Journal article that my buddy Dave sent over to me. And it just sent me down a deep rabbit hole one night. You know, you just get on the internet, you start clicking and reading and clicking and reading. And I was just like blown away by what I found. And so I'm going to give you the summary of what I found. Because if I gave you everything I found, we'd be here for a few hours.

And so I'm going to give you the summary. All right. So it's like this. In some video games, now I said video games, but stay with me. This ain't child's play. This is, we're talking real money here. So in some video games, the players can actually buy the real estate that's within the game in the form of something called an NFT.

It's a buzzword right now. It's highly searched on Google. It's trending on Google. And a lot of the big entrepreneur influencers are, talking about it. I think Gary V releases some sort of content on this every single day right now. NFT, a non-fungible token, non-fungible token. So get familiar with that because you're going to be hearing that a lot. So NFTs, they work on the blockchain, very similar to cryptocurrencies, like Bitcoin and Ethereum and all the other coins. There's 5,000 of those coins now. But it works like

that. So the difference here is that each Bitcoin can be exchanged for another Bitcoin. So they're interchangeable. That means it's fungible, while a non-fungible token cannot be exchanged for an identical NFT because there isn't an identical NFT and a non-fundable token because they're all unique. So they're not exchangeable. They're unexchangeable. Kind of like, you know, you go to where's the, what's the big art store? I don't know, just a frame store and you can, you know, you buy frames and they got art

and pictures there. Just like, what do they call it? I think they call it Aaron Brothers over here on the West Coast or Michaels. Michaels is another place. But say you went and you bought a print of the Mona Lisa. The Mona Lisa is that print is fungible. And so you really wouldn't be able to tell one print of the Mona Lisa from another. They probably got a bin with a bunch of them, right?

So those prints would be interchangeable. However, there is really only one Mona Lisa. It cannot be exchanged for another because there's not another original Mona Lisa that exists. So that makes the Mona Lisa non-fungible. Now, I suppose you could hang those prints

on your wall, and you might fool some people every now and then if they didn't know any better. But when you actually went to sell it, it would be discovered as a print, thereby having no value, right, other than the $9.99 you paid at the art store for it.

Got it? So the NFT-Krays, this is sweeping up certain sectors of our society. Basketball fans are one because they've been purchasing NFTs of their favorite players, kind of like trading cards, but these are virtual. They live on the, on the internet, right? They don't live or you don't get to like actually hold them in your hand. You just hold them in like a folder on your computer, right? Or in a wallet is where that you hold them. And art lovers also. So just this month,

for example, a digital collage by the artist Beeple sold at Christie's for $69.3 million. So that's not the actual painting. It's a digital file of the painting or the collage. $69.3 million, right? So Rob Grancowski, Mark Cuban, they've both started selling their own NFTs. And nearly, I don't know, it seems every single day, there's a new celebrity entering the NFT market. For example, Kansas City Chiefs quarterback Patrick Mahomes is launching a collection of NFTs that are centered around

significant moments in his life. And the band's Kings of Leon released their latest album when you see yourself. And that album, it includes NFTs that reveal exclusive album artwork. And then multi-platinum recording artist,

Lil Pump, just dropped a collection of NFTs as well. And there's going to be more celebrities to follow for sure. All right? So feeling out of touch, maybe a little bit. I know I get it. It was hard for me to grasp, but stick with me because it starts, to come, kind of come together.

So if you can't really resonate with that so far, this you might be able to, because NFTs have now made their way to real estate, virtual real estate. That is digital real estate. So plots of land inside of video games. And the virtual real estate market, it works like this,

very similar to the real world real estate market. So when a player purchases real estate within the game, they receive a digital deed. in the form of an NFT, which proves the authenticity of a certain plot in a specific game. And so the real estate will appreciate as more players join the game. And then the economic law of supply and demand kicks in. And then you know what happens then.

So where scarce land can now appreciate and be sold to other players for a profit who require the plots for certain tasks and missions. And then the players, they can rent out their land to other gamers. They can charge others for using it. Or they can even flip it. and I'm sure, you know, seller financing and wholesaling aren't that far behind. And this all happens within the game or there's a, it's on a, there's a third party exchange called OpenC, I guess where it happens as well. I haven't gone there.

But that's what I hear. So you can do it inside the game or on this third party app. So the transactions are usually backed by a game's unique cryptocurrency, which can be then converted to Ethereum, which is another cryptocurrency. And then that can be converted into real US dollar. So real money. All right. So contemporary artist Krista Kim this week hit the news where she recently sold an NFT minted digital house, a digital house, a virtual house for 288 Ethereum. And that's valued at over, it was valued over at $500,000 based on the Ethereum price at the time.

So you got that, right? someone paid a half a million dollars for a digital house that they can't live in. It lives on their computer. So the new owner of Kim's house will be able to upload the file into various metaverses. So a metaverse, this is an informal term used to describe a collaborative and immersive virtual world. And the owner will be able to, once they upload it into their metaverse, they'll be able to experience that digital real estate there.

So like their character, I guess, can live in the house. So they paid a half a million dollars for their character to live in the house. They don't get to live in it. Their video game character gets to. But anyway, companies like Roblox and Fortnite Maker Epic Games, no relation, unfortunately, are working on this concept and they are pioneering it. And Krista Kim, the artist foresees, will all be living in an augmented reality within a couple of years. That's her prediction.

That's right around the corner. So if that happened to come true, we might want to at least understand how this works. Another example, Republic real estate. This is a firm that's raising money to buy distressed condos in the physical world, but they're also launching an invite-only fund this week aimed at investors seeking to buy virtual land. This is a fund to buy virtual land, land inside these computer games. So the venture plans to purchase parcels across several lines, several online metaverses and develop them into virtual hotels, stores, and other uses with the

goal of increasing their value among cryptocurrency enthusiasts. So they're buying this virtual land. They're going to go improve it and increase its value for the cryptocurrency consumers. And the minimum investment in the Republic Realm Digital Real Estate Fund, that's the name of it, Republic Realm Digital Real Estate Fund is $25,000. So we're talking real money, right? So this virtual real estate market is just like our real world real estate market. And it has been boosted and it's seen massive appreciation recently by this pandemic-fueled rise in electronic games and investor excitement around cryptocurrency.

You can tell I'm kind of getting excited about it. I talked about a little bit about last week and I'll probably continue to talk about it some more and how I'm incorporating it into my physical real estate. But now my ears are perked up for this virtual real estate if this is going to be a real thing. So this concept, it's starting to sink in for me. But the part that I was unable to grasp for a second, actually for many minutes, maybe hours, still kind of struggle with it. But where's the value that's commanding such hefty price tags, right?

Why would you, how could you spend $25,000 to buy a piece of video land? Right. So that's something that took me a minute to grasp. But here's where it really started to click. What non-gamers like me don't really understand yet is the growing importance of a gamer's digital items and identity. That's the nuance there. So if this seems like just, you know, Twilight Zone to you, that's the part that you might not understand, particularly if you're not a gamer. Because, you know, for years now, gamers have laid down big bucks on gear such as weapons and armor or tools to strengthen their characters.

And games like you've heard of them, Fortnite probably. Even if you don't play, you've heard of it. Minecraft and World of Warcraft. So those are some very popular games that gamers are involved with this type of thing already. So these NFT-enabled games now will allow players to buy, sell, and trade their gear and their real estate for cryptocurrency, of which can be converted to real spendable US dollars. So when I said it take, oh, here, I'll just keep going and you'll get an idea of what these prices are. And even though this is inside of a video game, this is real money.

So this might still seem all like a bunch of nonsense to someone pre-internet. However, talk to any gamer and ask how much money they spend on outfits and new guns or any other collectibles within the game. And you'll find it to be a very staggering amount. And, you know, if we ever get to meet, Facebook. face to face, ask me sometime how much a week I dole out for my son's obsession with Roblox. Because I give him money every week. Well, actually, he works for it. But that's what he chooses to spend his money on.

And he chooses to spend all of it on that, buying building materials for his virtual real estate, buying boats and airplanes. And this is all virtual stuff, all digital things inside of his video game that he's spending real money on. So the popular free video game Fortnite brought in revenue. of $1.8 billion in 2019, $5 billion in 2020. And that was just on the clothes and the weapons and stuff. Because this is a free game, and it still made $5 billion.

So it generated that revenue from the gamers buying stuff inside of the game. So now that digital real estate is on the market, those revenues will certainly rise. as the virtual real estate is not priced too differently than the physical real estate. For example, real estate purchases have brought in millions of dollars. Recently, on already, nine plots of land on the popular game, Axi Infinity, were sold as a single NFT deal, the user who made the purchase paid $1.5 million for nine plots of virtual land. Then a group of people just last month topped that,

by paying $1.6 million for Citadel of the Stars. This is a large kingdom in the unreleased fantasy role-playing game, Miranda's by Gala Games. So this is a game that's not even out yet, and someone paid $1.6 million for Citadel of the Stars. It's a big castle. I saw a picture of it. And yeah, so you understand that, right?

This is a pre-market sale of someone bought the real estate before the game is even available. And so Gala Games, they've got their own cryptocurrency, by the way, and rumor has it. They may be, that may be one you want to get in on soon if you're involved in crypto at all. The coins symbol is G-A-L-A, G-A, G-L-A, G-L-A, G-L-A,

G-Gala. I bought a little bit, and we'll see. It's not, it's just money that I was willing to lose. But you start hearing the rumors and stuff online, and you're like, okay, well, let me grab a piece of that, just in case. Because actually that just-in-case purchases over the last couple of years have actually served me pretty well.

So this was just another just-one. in case thing. I have no idea what I'm doing, by the way. My total investment strategy with cryptocurrency is FOMO. Right? I'm just got this fear of missing out on what could be. I'm actually thinking right now that with the cryptocurrency, the way that momentum is starting to build,

it almost feels like the risk of not getting in is exceeding the risk of avoiding it. That I said that right? No, I'm going to say that differently. The risk of getting in, so it's risky. It's a volatile, risky type thing, right? It's still not really an established thing. But the upside, I think, is so great that it's riskier not to do it than it is to do it.

That's how I'm kind of looking at it. So I'm trying to restrain myself. I'm not putting too much in, but I certainly want to win. Because over the last few years, I've done really well by not knowing a darn thing about what I'm doing. All right? So G-A. That's the one that the newest one that came up.

I got a bunch of these things. But anyway, so last month, virtual world, the sandbox sold about $2.8 million worth of land in a pair of well-received sales that now have the company valuing its digital properties at about $37 million.

So this virtual world, the sandbox, I guess that's a game. I'm not familiar with the game. But just the real estate inside the game has a value of $37 million. And so players in the game, they can go, they can buy plots in like five different sizes or something like that. So our reality and our real estate included is going completely virtual.

It's going completely digital. I'm going to talk a little bit more about other ways that's going digital in the near future. But the big real estate upside opportunities will become less and less realized by, you know, walking around your neighborhood, driving for dollars, looking for that distressed house to buy. But rather by scrolling through your phone, searching the internet. internet and playing video games. Because there are new houses right now being built on the beach in cyberspace. Imagine if you bought the houses when they were first being built in Malibu, right?

Whether that be 40, 50 years ago? Where would you be today if you bought a bunch of those things? So the world is getting very interesting. And I'm just curious. Like, what are you thinking about this? I mean, is this a real estate? Is this digital virtual real estate thing, a fad? You know, kind of like we all thought the internet was.

like the digital music download was, like Facebook was. Or is it here to stay? You know, like the internet did. Like the digital music download did. Like Facebook did. I mean, if you're old enough to remember, and if you're not old enough remember, you probably wouldn't be able to fathom this.

But if you're old enough to remember, those were all crazy ideas that the masses rejected at one time, thinking those were scams, thinking they were trans, thinking they wouldn't stick. They were fly-by-night type things, including myself, every single one of them. And so this thing here, I put this in the exact same category. I think this is absolutely ridiculous. But I thought about that or I thought the same about all of those things I just mentioned.

So at least I'm not going to push it off and be this old antique grandpa that's stuck in his ways. I'm open to it. So I haven't put any money into it, but I'm learning about it. All righty, so up next, subject to real estate investing, buying property subject two, it could be on its last leg, perhaps even flat out dead. And I'm going to tell you why and what you can do about it right after this. Alert, alert. Real estate investors, listen carefully.

A closely guarded secret reveals that closely guarded secrets aren't really that closely guarded. Seriously, go to find motivated sellers ASAP.com to get the inside scoop on how the nation's most successful real estate investors really find their deeply discounted properties. Go to find motivated sellers ASAP.com. Deeper discounts, less secrets. Find motivated sellers ASAP.com. Okay, so as you know, being a real estate investor, you know this because you're a listener of this show. So being a real estate investor, it doesn't always require you to go to a bank, get pre-qualified and call your real estate agent. That's not really what we do here,

but that's what most people think is necessary. But sometimes that conventional path just flat out doesn't work for the property or the investor. And under these scenarios, which are more common than most people think, people get stopped. They think they've got this credit problem

or they think they have this money problem when in reality, all they've got is a idea problem. That's what they got. So that's where we kind of start, talking about creative outside the box ideas around investing in real estate and financing real estate. And one of the more popular and profitable creative ideas is known as subject to.

So I and countless of other creative real estate investors have built small and big cash flowing portfolios using this strategy. You've been doing it for years. It's a really powerful tool in your investing toolbox. We've talked about it here several times. But unless we change the way we go about it, the subject to strategy, it could be on its way out. And I'll tell you why. First of all, if you don't know what a subject to is, if you're just getting started with us and you did your first time here, you're just finding a way into real

estate for the first time or brand new. You see, when you purchase a property subject to the existing mortgage that is already in place, that's what subject to is that when you buy it that way and you just leave the financing that the seller has, you just leave that there. So with a subject to deal, you are not formally, you're not assuming the loan, but instead you are taking ownership property and the responsibility of making sure that the mortgage is paid on time, but you're not assuming it. And you'll take on that responsibility typically until you refinance or resell the property.

So in a nutshell, your name is on title as the new owner and you make the payments on the existing financing, but the seller's name stays on the loan and is ultimately the one responsible for the loan. So the strategy is it's been used for years, like I said, as a very effective method of investing for both newbies and experienced investors alike, but his days are numbered. And here's why. And I started thinking about this when I heard Jason Hartman, I was driving through the canyon here in Vegas, and I was listening to a podcast, The Rebel Capitalist Show. And Jason Hartman just happened to be a guest, who's also a very good friend of mine.

And he's host of the Creating Wealth podcast. It's the longest running real estate investing podcast on iTunes. It would be me if it weren't for him. But I'm happy to be number two to Jason because he's a really, really smart guy and really cool and got a big heart. But the thing that Jason, he talked about his normal thing. He talked about inflation. He talked about debt on the show. And I always learned something when I listened to him. But he summed up the show, not summed up the show, but closed out the show by making a prediction over the next four or five years.

I think of five years was his time frame. But I think it might happen sooner after he explained it. And what he was saying was what people aren't talking about with regard to the current housing crisis. And I call this a crisis because there's no houses for sale. We're in a supply crisis. And with the cost of the building materials and the availability of the building materials, we're in a crisis. We're going to be here for a second. Hopefully when the economy opens up more and more and more, people get more and more vaccinated and they feel more and more comfortable of going outside again.

This will start to loosen up a little bit. but still the demand is so strong and so huge for real estate right now that any sort of supply that hits the market, it immediately gets just snatched up just like that. So Jason was talking about what we're going to have in two, three, four years, five years, we'll probably start to really see it is we'll see millions of homeowners having refinanced during these low interest times,

having these two point, two and a quarter, two and a half percent interest loans, like almost zero interest. And his prediction is where the typical time that someone spends in their houses five to seven years, or is it three to five years, and we'll just say five years. That's going to extend significantly because what they're going to realize, what homeowners will realize, is they have this asset they don't want to let go of.

And when I say asset, I'm not talking about the real estate. I'm talking about the actual mortgage. because real estate, or excuse me, interest rates are going to have to go up. I mean, they can't go any lower and they're already creeping up a little bit. So two years, three years, four years, as those interest rates return back to 3%, 4%, 5%, 6%, because they will. They have to. Or else our whole monetary system is likely to collapse if they don't or something else is going to happen. But it's likely that interest rates, we have to.

we can all kind of assume and agree that interest rates will continue to go up. So once those interest rates hit the 40%, 5%, 6%, homeowners are going to really start or going to second guess whether they should move or not because they don't want to move into a new house and pay that higher interest rate. And if you go from a 2.5% interest rate to a 5% interest rate, that's not a 2.5% gain or a 2.5% increase. That's 100% increase. double. That's going to be significant and really impact the amount of house that people can buy.

So Jason's prediction is that people are going to stay in their houses longer. And so even impacting the housing supply that we've issues that we have already. And I started thinking about that. I mean, one thing to note from Jason's prediction is how the current housing supply crisis it might not improve anytime soon, which would continue to support a very strong seller's market that we're in right now and support that for a long time to come. And that alone could hinder the effectiveness of subject to investing. That alone could.

But certainly, it's not going to kill it. There's something bigger in Jason's prediction that likely would. So to really grasp it, you just need to understand the history of the subject to deal because this isn't a new form of real estate investing, not a new form of real estate financing. So in the 1950s, in the 1960s, buying property subject two was a very common practice. Homeowners would sell their property this way to a buyer that had insufficient credit. It happened all the time.

But over time, banks evolved and made it easier to buy houses with personal credit. And because of this, the subject to transaction became less popular. Then in the mid-70s, as interest rates started to rise, The subject to transaction took an even bigger hit when banks began inserting a due-on-sale clause into their loans. So if you don't know what that is, a due-on-sale clause, also known as an acceleration clause, is a provision in a mortgage document which gives the lender the right to demand payment of the remaining balance of the loan when the property is sold. So it's a contractual right that the banks have. it's not a law contrary to popular belief,

nor is it the bank's obligation to call the loan due, just merely the option to. So here's why banks started to put this into their loan documents because it wasn't there all the time. This is like relatively new. Home buyers were taking over existing loans rather than borrowing new money from banks because the interest rates on the existing loans were lower

and eventually much lower. So the banks, they weren't lending new money out at the higher rates. Rates that reached as high as, believe this, 18% in 1982. So the banks, they argued that the reason for the restriction was to be able to police and monitor who was actually living in the property.

They wanted to know who was living in the property, the collateral for the loan. Super weak argument, though. And they kind of got exposed. And here's how. because this was a very small window of just say two or three years where banks were actively enforcing this due on sale clause, of which made it problematic for subject two deals. But banks started to pull back on their due on sale enforcement when interest rates began to plummet in 1984. So it wasn't really about monitoring who was living in the property at all.

It was all about the money, right? So to this day, banks are still very unlikely to enforce the due on sale clause. provisions because, you know, interest rates have been trending downward ever since. So it makes sense that they don't enforce it right now. They lose money if they made that a common practice. So they stop doing it. They ignore it mostly. So with regard to Jason's prediction, with interest rates being at a place where they can't

go much lower, and despite what the Fed is saying about keeping the rates low, they have been on an uptick since early January. So the Fed keeps coming out saying that we're not going to raise them. But if you look at the chart, they've been on a steady uptick for the last several months. So this is kind of why Wall Street's acting the way they're acting because they listen to the Fed. They want to know what Jerome Powell is going to say. And they will make decisions based on that. But they're hearing him say one thing and doing something else.

So they are on an uptick. And we may see them slide up and down along the way. but to support our over-leverged monetary system, the Fed will have to increase rates at some time and overtime just to keep inflation in check. And that's really the government's only plan, along with increasing our taxes, of course, to recover from the monumental stimulus bill that we've recently passed,

or stimulus bills we've recently passed. Not to mention the Godzilla-sized infrastructure bill that's on its way from the Biden administration, saying it could be up to $4 billion. So the bottom line, when rates increase to a point where it becomes profitable for banks to enforce their due on sale clause again, just like they aggressively did it in those few years in the early 80s, you can bet they most certainly will, thereby killing the subject to transaction under most circumstances. So what can you do about it? Why do you want to figure out what to do about it? Why do you want to figure out a workaround?

because yes, you can do something about it. And here's why you actually want to. You see, when you successfully execute a subject to transaction, one, you don't have to qualify for a loan. Two, you'll have the advantage of the owner's lower interest rate. Three, you'll have the advantage of the owner's amortization schedule based on their time in the loan. And four, you'll have instant ownership in the property. You don't want to give up those benefits just because the bank's

increasing inclination to execute the due-on-sale clause. And besides, the benefits don't stop with just you either. The seller gets the benefit as well. It's a big solution for a lot of sellers because, one, they're receiving an instant solution to their urgent problem. Two, they're preserving their credit rating or their credit score because you are making their payments. And three, you're eliminating their closing costs, their fees, and any need for repairs

because we take that on as real estate investors. So, you know, I use the word word. work around. And I'll let you in on what that workaround is in a second. But if this feels like we're playing in the gray area of the law, we're not. Because you can still purchase a property subject to unlisted and off market properties because there's nothing illegal or unethical about buying a property subject to and to assure you you don't create. And that's contrary to anything you may believe. You might talk to a real estate agent one day and they'll tell you it's illegal. You may talk. to a title rep one day.

They'll say it's illegal. It's not. There's nothing illegal or unethical about it. So don't let that dissuade you. But to assure you don't create any unnecessary challenges for yourself, you're going to want to follow these best practices. Right. So I got five of them.

First and foremost, you need to use a trusted real estate attorney throughout the process of the deal to protect you and the homeowner. It is still a real estate transaction that must follow real estate laws, both the state and the federal laws. Second, you need to ensure that all aspects of the transaction are in writing, especially the seller acknowledging that they're fully aware of the subject to aspect of the transaction. Third, you got to have a backup plan because lenders, they rarely enforce the due on sale clause because they would prefer a performing loan over or foreclosure.

So while the loan being called due is highly unlikely for now, it is still possible. and as the rates increase, so does that possibility. And if it is to get called due, then you don't want to do the seller like that. You want to have a backup plan to make sure that you preserve it and can follow through on your word and taking over that property. Fourth, you want to use a third-party note servicing company to hold the funds and make the seller's mortgage payments.

It's also not a bad idea to give the seller some limited access to the account in the interest of their comfort. level so that they know that the mortgage payments are being made on time. Then fifth, you'll need to open up a new insurance policy naming you or your company as the insured. This is going to limit your liability. So now, the workaround that you've been waiting for to keep this strategy alive in your toolbox. Banks, they don't typically look for reasons to exercise the due on sale clause. But if they're notified that the property has been sold without paying off their loan.

They could, and as mortgage rates increase, they're likely to. So the primary way to keep the bank from being privy to your subject to purchase is by incorporating a land trust in the transaction, a land trust. We've talked about that here before. I don't want to go deep into the nuances there, but using a land trust, this is going to keep most of you and your sellers secret from the bank. But there is one person. This is not a perfect system

This land trust by keeping everything concealed and keep maintaining your anonymity. There is one person that will eventually blow the whistle on you and that's the insurance company. The insurance company will notify the bank when that insurance changes as they are the lost payee in the seller's policy and they're going to let them know,

the bank know that there's been a change into the insurance. So that's when the bank's eyebrows may raise and I've got to do a little bit more investigating the research because they want to make sure that they're covered. But now they're like, oh, why did this change and whose name is this that's on the policy? So the one way to deal with this issue is to just keep the seller's insurance in place

and keep it current. So that just adds a little extra to your calculation if you're going to hold the property. Because if your strategy is to hold long term for cash flow a subject to deal, you just want to make sure that you calculate the double insurance payment. And then you can refer to number three also of best practices.

Number three was having a backup plan in case the bank does call the mortgage due. So purchasing subject to is still relatively risk-free. So don't give it up yet, especially if your plan is to refinance or flip the property within a few months. Then you probably don't have anything to worry about. Probably don't even need to use a land trust. If that's the strategy, if that's your intent. Just know that when the rules change,

Specifically when the interest rates rise, your strategy to win is going to have to change with them. All right? So I've got the news for you next right after this. When you go to work for your money, does it return the favor? If not, no worries. You do not have a money problem. You merely have an idea problem. We're cash flow savvy.com.

And we'd like to share a new idea with you around income real estate that can transform your financial future and accelerate its arrival. Go to cashflow savvy.com and download a free investor's podcast. package. Cashflow savvy.com. You do not have a money problem, merely an idea problem. Cashflow savvy.com. More ideas, less worries. Cashflow savvy.com. In the news, COVID news specifically, the U.S. top 30 million cases of the coronavirus yesterday, even as states open vaccine eligibility to more people. Nearly 25% of all Americans have received at least one vaccine dose, and more than 15% have Instagrammed about it. This week, Also, the Olympic flame begins its 121-day relay across Japan.

Following its arrival in Tokyo, it'll light the only quadrant we know of outside Harry Potter. Kick off the 2020. Oops, strike that 2021 summer games. And then Facebook said that China-based hackers used its platform to target the Uyghurs, a largely Muslim minority group persecuted by the Chinese government who are living abroad. That's a tragic story. And I'm surprised there's not more outrage here in the United States. We'd rather worry more about Mr. Potato Head and Dr. Seuss than a minority group of people that are being stripped of all of their belongings, put on trains on their way to labor camps, having their heads shaved, and being sterilized even to put an end to that group.

it is the most tragic thing I think is going on in the world right now, at least the most tragic thing that I know of, and we're concerned with equal distribution of representation in the Muppets. All right, so it's kind of crazy. Anyway, game stock fell more than 33% following an earnings report that disappointed investors. And New York lawmakers have reached a deal to fast-track legalizing recreational marijuana. Welcome New York to the 21st.

century and Tesla is now accepting Bitcoin as payment for its cars. And more on that in or this week in crypto news. The economy, the number of jobless claims filed last week dropped to a pandemic era low of $684,000. Another data point that indicates an economic rebound is just around the river bend, just around the corner. I hope so. I hope that's what it means. And that's what everybody wants you to believe. And I want to believe it as well. Just know that 600. 884,000 jobless claims is still super duper high. In D.C., his first formal press conference, President Biden, doubled his original vaccination goal to 200 million COVID-19 shots administered in his first 100 days.

You know, he had the one million shots a day that was his goal. And I was like, that's such an ambitious goal because we've been doing a million shots a day for the week before you were even inaugurated. So now he's like, okay, we're on track. So we're going to double that. But anyway, Biden also. pushed for changes to the Senate filibuster, which results in most legislation needing 60 out of 100 votes to pass. Interesting story about the filibuster. If you don't know much about it, I've been

paying attention to it. But the filibuster accelerated during the Obama administration. So the Republicans used it a lot, a lot, like historically high during those eight years of President Obama's term. And then when Trump came through, Democrats, they followed. suit. They said, we can do it too. And now that they have control of both the House and the Senate, they want to do away with it, even though they have been the most recent abusers of it, they want to do away with it because now they know they have the power and they don't want that power to go back to the Republicans in case they lose the representation or the majority inside of the House and the Senate, as well as they've got lots of grand ideas for our country. And they don't

want that filibuster to get in the way of those grand progressive. I'm using air quotes, progressive ideas that they plan on pushing through. I would call them more regressive ideas, the more days that, or the more that we get to learn about them. But anyway, that's just me. You do you. Robin Hood is reportedly building a platform to democratize IPOs and allow regular investors to buy into initial public offerings like its own as big banks do. And then New York City is aiming to open Broadway shows in September. That is a sign of returning to normalcy. Because what kind of society are we without Broadway?

All right, this week in crypto, as you know, or as I explained last week, if you missed it just in case, I've been into cryptocurrency, not as a big student, just as a, casual observer and just playing, right? I put some discretionary income that I wasn't afraid to lose a few years ago. And then it grew into a size of money that I am afraid to lose it. So I'm learning about it. And the best way to learn about something is to teach it right after you've learned it. And I am going to teach it to you based on what I learn and when I learn.

And I am incorporating it into my real estate investing. So it's not like the subject of this show is changing. No, not by any means. but I have discovered some very powerful uses for it to incorporate into my real estate and to get kind of the best of both worlds. I believe some sort of digital currency is going to come about. I think that is the future. That's where we're going.

But just in case I'm wrong, going to hedge it with my real estate investments, but they each support each other. So like I said, I'm taking this through this process. It's almost theory right now. I'm almost about three quarters of the way through it at the moment. And once I have successfully executed it and confirmed everything I was thinking to be true, then I'll certainly share it with you here. But nonetheless, cryptocurrency, you should have something in there just in case.

I think FOMO is actually a good strategy here. Just don't go all in. Don't be reckless with more money than you're willing to lose because I am not responsible for that. And I want you to be well aware that this is a voluble. volatile still unexplored and potentially very risky investment. All right? So this week in crypto, the headlines. And this is the parts of the story and the evolution of crypto in our society that kind

gets me more and more convinced and increases my confidence about its future. So for example, Bitcoin ETF product was filed by Goldman Sachs with the SEC. So Goldman Sachs, they're a major investment bank in the U.S. They've recently filed a new prospectus with the U.S. regulator that is Securities and Exchange Commission or SEC to offer Bitcoin inside of an ETF. So they take Goldman Sachs, household name, you've heard of Goldman Sachs. They're smart people. They're very wealthy people. And they see an opportunity to make money by bringing Bitcoin to Wall Street.

So I think that's a good endorsement. It's a way that we can kind of leverage their research. and see what they're doing. And it's not just one because Fidelity also applied to launch a Bitcoin ETF this week. That was on Wednesday to launch an exchange traded fund to track the performance of Bitcoin. This is the latest move, the most recent one on Wall Street, to embrace the digital currency. Then, Chairman of the U.S. Federal Reserve, Mr. Jerome Powell, said recently that he considers Bitcoin to be an alternative to gold rather than the dollar.

The guy that runs our monetary system said this. While speaking during the Bank of International Settlements Innovation Summit, Powell said that Bitcoin was too volatile to replace traditional fiat currencies like the US dollar, but he supported the idea of Bitcoin as a digital gold that could have similar utility to precious metals. And then Tesla, which was in the news, you can now buy its electrical vehicle with Bitcoin and its boss, Elon Musk said on Wednesday, that you could do that.

And this is marking really a significant step forward for the cryptocurrency's use in commerce. But that wasn't the big news. The big news, and this is what I'm learning about cryptocurrency, if people go and invest in it, and once they make some money, they pull it back out and convert it to dollars and put it in their bank,

that actually brings down, because it's still such a small market cap of an investment, Like those sales and pulling the money out of the cryptocurrency back into dollars and putting in your bank actually pulls down the value every time that happens. You know, if you were going to do that with Apple, you wouldn't even notice because there's so much money in there that it wouldn't even register. It wouldn't even be a blip. No one would ever know that you pulled your profit out and put in your bank. But with cryptocurrency, it's still, the market cap is still low enough to where those types of buys and sales can impact the cryptocurrency higher or lower. So what Elon Musk said is he's going to accept Bitcoin for the transactions and the purchases of his electric vehicles, but he's not going to convert that money to U.S. dollars only to drive the value of Bitcoin upward.

So that was big news. And then a new survey conducted by Harris Poll has revealed that nearly 7% of Americans have spent their latest round of stimulus checks on Bitcoin and other cryptocurrencies. And then Bitcoin's impressive bull run this year has been matched with an increase in the number of Bitcoin ATMs across the globe. Since the beginning of the year, the number of Bitcoin terminals has increased by 20%. I believe last week I misspoke and I said 120%. Incorrect. I am retracting that and we are putting the right number here.

The number of Bitcoin terminals has increased by 20%. It seems like a lot more than that in my neighborhood because every single gas station has one. but that's good news as far as people embracing that as a potential currency. And then as Bitcoin breaks, new record highs and other cryptocurrencies follow. More companies and institutions grow interested in them. And Visa is one of the leaders regarding payment processors, and it has been one of Bitcoin's traditional rivals. However, it has recently made headlines thanks to a vital move allowing cryptocurrencies in its platform.

Naturally, it keeps nurturing. interest in cryptocurrency and it promises to change the landscape significantly once it begins. So this is why I'm excited about it. This is why you shouldn't ignore it. I'm not saying you have to get excited about it. I'm not saying you have to go jump into it. This is why you can't ignore it. Just this week, Goldman Sachs filed with the SEC for a Bitcoin ETF.

Fidelity filed this week with the SEC for an ETF approval. Then the person that runs our monetary system acknowledges it as an alternative to gold. And Elon Musk is now accepting Bitcoin for the purchase of his cars. I believe Lamborghini does that. And I believe there's a few Porsche dealerships in Newport Beach that do that as well. But Elon Musk certainly a much bigger company accepting it as well. And I think that's.

And then Visa. Then we got Visa. And MasterCard already did. That's old news. So this is going mainstream. And these Bitcoin ATMs, those aren't cheap machines to build, not cheap machines. not cheap machines to put in place. So just be open to it, learn about it,

and then proceed with an educated or as much education as you can type decision to get involved. And even like, for example, all the people that were against it, Mark Cuban, who's always against it. Said this is a scam, it's going to crash. He's now supporter of it. Mr. Wonderful from Shark Tank.

Same thing. He called this was junk. He's now acknowledging it. Jim Kramer, the guy on, he's on one of the financial channels. crazy guy with all the buttons and the in the sound effects and the props and everything. He was against it. Now, he's all in, not all in, but he's acknowledging that there's room for it inside of someone's portfolio.

So it's changing minds. It's here. It's not going anywhere. Who knows if Bitcoin is going to be the one coin that wins out? It's certainly got the dominant market share by far. But something's going to happen. And so if you don't want to be left behind, consider learning about it. I'll do my best to keep you informed here as well.

All righty. So that's this week in crypto, and that's the show. If you found this episode valuable, who else do you know that might too? There's a good chance you know someone else who would. And when their name comes to mind, please share it 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. Health, peace, blessings and success to you. I'm Matt Terrio. Live in the Dream. Yeah, yeah, we got the cash flow. Yeah, yeah, we got the cash flow. Yeah, yeah.

We got the cash flow. We didn't know home for us. We got the dash low. This podcast is a part of the C-suite Radio Network. For more top business podcasts, visit c-sweetradio.com.