Epic Real Estate Investing - Passive Income - It's Never Too Late to Start | 1158

Episode Date: July 6, 2021

In today’s episode, our Turnkey Girl, Mercedes is joined with Mitch Norby, a Cash Flow Savvy’s client who has been in the software industry for 30 years and decided to level up his financial game! Tune in and learn how Mitch acquired 4 rental properties and why it’s never too late to start generating passive income! Learn more about your ad choices. Visit megaphone.fm/adchoices

This is Terio Media. So you want to be a real estate investor, but you don't want to do the work. If there were only a way where someone else could do it for you, now there is. Tune in here each and every Tuesday on the Epic Real Estate Investing Show for Turnkey Tuesdays with your host, Mercedes-Torres. Hello and welcome, welcome to Turnkey Tuesdays brought to you by Epic Real Estate Investing. My name is Mercedes-Torres. I am lucky enough to be partners in crime with Mr. Matt Terrio, the gentleman who created the epic real estate empire.

I am lucky enough to teach busy professionals how to create passive income through real estate investing so they can retire even faster. So, the show we share tips and real life expanses on how to create passive income in your world. So if this is the first time here, glad you made it. is not your first time here, welcome back. So today or actually this week, I am really lucky to be visited and to be joined by one of our clients. And I'm just going to have them jump right into the interview, introduced himself, because what my client Mitch has done, I am confident in saying that he's joined the 1% club. Because less than 1% of America actually does what Mitch is currently doing now. So, Mitch, I can hear you breathing.

Are you there? I am. Yeah, hi, Mercedes. Hi, fantastic. Welcome to Turnkey Tuesdays. How are you today? I'm doing wonderfully. Thank you.

I, a little bird, told me that you just got back from the escrow office because you just signed documents for your third. real estate investment property with cash flow savvy. Is that the case? That is the case. As a matter of fact, I closed on two of them. So third and fourth today, yeah. I am so excited for you. I didn't know about the fourth one. So you'll have to tell me, well, I did know about the fourth one. I just didn't know that you were signing on the fourth one. Yeah. So see, that's how great my team is. They take care of you all the way around. So we're going to get to those details. Hold on. I'm so excited. Tell me about. Mitch, tell me all about you.

Sure, yeah. So I am married to a wonderful wife, and the reason why I'm going to share this will become more apparent as we go forward. So my wife and I have six kids, and our oldest two, our oldest daughters, their husbands and our daughters have each given us a grandson. So we have two grandsons. So six kids, two grandsons. So we have a large and growing family. And my wife has, we've been blessed. She has homeschooled all of our kids.

So we have a busy household. She stays at home. I have been in the software industry for 30 years and have been working for my current company for 20 years. And so with the growing family, with all the activities that come, whether it it's sports or just spending time together or church stuff that we do together. We're just a busy family. So the work that I do, I actually enjoy it. It's been 20 years.

It was a startup company in the software industry, specifically in food and ag. And I think the things that we're doing actually are making a difference. So I really enjoy what we're doing. And that's who I am. That's Mitch in a nutshell. Mitch, what are the ages of your children? So our oldest is 25 and our youngest just turned 14. Wow.

So, oh my gosh, in like four years, you're going to be an empty nester. That's right. Are you looking forward to that or is that like your wife is probably cringing, right? It would be, you know, it's been a long journey for my wife, having homeschooled all of them. At the peak, there were six of them that she was juggling. So they were all doing something at one point. But you know what? In four years, she'll be able to retire from doing all that.

And she's done a wonderful job. We have great kids. I'm sure everybody says that, but we do have great kids. And it will be nice. It's fun to see them leave the nest and make a life for themselves. But we, you know, it's our prayer. that we maintain close relationships with them and our grandkids and all that. So, yeah, we're looking forward to it.

You're doing just that. I love it. You know, I speak to so many people across the United States, and homeschool comes up quite a bit, so much so that I've been able to really sit down with our clients and the children who have been homeschool and the children who have not. And there's just something to say about children who have been homeschool. You know, I have a little guy and he's not homeschool because God knows that there are people that are placed on this earth to homeschool and I'm not one of them. Yeah, it's not for everybody.

Yeah, it's not for everybody. So I have my right most respect for those individuals that choose to do the homeschool route. Let me just tell you, Mitch, your wife has a harder job than you. She does. I agree completely. Okay, awesome. So with a busy household and a wonderful wife, what piqued your interest about real estate investing? Yeah.

You know, it's actually my interaction with real estate investing kind of goes back a few years. I went through the process of finding distressed properties and I worked with a contractor and we fixed up homes and made them rent ready and all that sort of stuff. the stuff that you and Matt talk about on your podcasts. It's just that as we got busier and busier, we just, I didn't have the time to put into it that it takes. And so we had, we had a number of properties.

I actually sold, I cash flowed on each of the properties really well, sold all of them for, you know, good return on what we had put into it. it and then wanted to get back in and ran across the podcast, the Epic Real Estate podcast. I'd listened to a few others, and there was something about what was being taught that caught my attention. And I can't really put my finger on it other than it just feels like you and Matt just share

what it takes, not really sort of sprinkling in some of it and then holding back for the rest. It feels like you're sharing what people need to know. And so having run across that, and then all of a sudden there was this special show on Tuesdays. Called Turnkey Tuesdays. Turnkey Tuesdays. And I'm like, I'm like, okay, I want to do the rest of it. But right now, just as I was listening more and more to it, just felt like this is what I need to be doing. at this point and potentially as things change and hopefully over the you know over some some period of time they will i feel like i want to you know fire up the full engine and and and i think it's a

it's a interesting thing for me to to think about as to how i might partner with my children who are interested and so anyway right now this is how i want to participate and can participate. Got it. Wow. You've said something really interesting that you found Turnkey Tuesdays because Turnkey Tuesdays started out of a need just based off of what our clients and our students were asking Matt and I for. You know, we always hear that we share a lot.

It's very different because Matt and I are in the trenches. I mean, Matt and I are still building our real estate portfolio. We do real estate every day. So you signed on two properties today. I signed on one on Monday. I mean, that's part of our life. But we just saw that there was like a need because our clients were asking for it. In fact, that's how cash flow savvy got started because so many individuals would go through our course.

At the Pro Academy, I know I'm biased, but it is the most comprehensive real estate investing course out there. because Matt goes step by step of everything that we do in our office in the academy. So what would happen is busy professionals, just like you, would go by the course. They would try to do the course. And then they're like, I'm a busy professional. I work 80 hours a week. I have no time. So then they'd call our office and they'd say to us, can you just sell us one of your homes?

When we started, all we had was our personal portfolio. And Matt said, sure, let's sell you on a home. So he calls me, he's like, Merce, so-and-so wants to buy a home, sell it to him. Well, one month, we sold two houses. Month number two, we sold four houses. And Matt, on month number three, sold about 10 of our houses. And I was about to kill him. He slept on the couch that night.

But then it dawned on me. I was like, if our students, our clients are needing this service, why don't I just provide it to them? So that's how cash flow savvy was born. That's how Turnkey Tuesdays was born. So thank you for acknowledging that because there is a need out there for you busy professionals that wife stays home and homeschooled and has a harder job than a husband who's outworking, you know, 40, 50 hours a week.

So wow. Thank you for sharing that. That was a lot, right? Yeah. So tell me, why passive income? Because I know you did it before. And then you decided to just. So why passive income? Well, it's a couple reasons. I mean, I think it's obvious that it's a good

situation to have where your money is working for you and not just not just getting paid for every hour you put in. So, you know, any investment you're hoping is your money working for you, right? And so having it an opportunity, a mechanism to create passive cash flow is significantly more value to me as I move forward. And I know the things that you and Matt say instead of building a pile that generate to build a pile. So I think that's, I'm sure I got that wrong, but the idea is there is that you, is that you, need to have something that's generating income for you as your money works for you. And I had a windfall last year. And so this is my process of getting it plugged in to what I think is a good mechanism to generate that cash flow. I love it. And so in a nutshell, Mitch, what's the end goal for

you? Yeah. I think in the end, you know, and I don't have, I know this probably sounds bad, but I don't have a specific goal as to timing as to when to retire. But when I do, I want a mix of things that I'm depending on. And this is an important piece of that. So there are other things that we're doing and other ways in which we're making use of the windfall. But this is a big, a big chunk of it is what we're trying to do. I love it. You're not only diversifying your real estate portfolio, you're diversifying your investment strategies in your life. I love that. It has to be that way. It absolutely has to be that way. Awesome. So tell me how many properties, I know you signed on two, so how many properties have you acquired with cash flow savvy?

This is, today was our third and fourth with cash flow savvy. When I got into the queue, the first email I received, I found two properties in that email. And so I had, asked if it was okay if I bought two of those properties. So the first pass, I bought two at the same time and then got back into the queue and found two opportunities I wanted to take advantage of again. I love it. So tell me about you. You talk about a cue.

Tell our listener, what is a cue? What was the process? What was your experience like? And I'm going to ask you, Mitch, not to spare any details because you're a very detailed individual. I love it. So do share with us. Yeah, so I guess how we got started, it's a little bit, but I indicated my interest and we went through the process of signing the contract, is this is how we're going to work together. This is what we're going to both agree to. And then once that is completed, we, I believe we put some money into escrow. And then with that in place, then the queue is the idea that.

you have a number of clients that you're working with and you just cycle through that list of clients whatever opportunities are available the next in line is sent an email and you have 24 hours to evaluate the the properties that are there and and what is sent is actually very useful because it's not just a list it's a list of links and those links take you to a website where you can see the pro forma details of the property. And, you know, obviously the information that you know about the areas within which these properties are, you can give really detailed performance. And so what I'm looking for, I'm a numbers guy.

My eyes immediately go to the cash on cash return. What is that estimated to be? And so I then see, you know, what are, what is that number? And then I look at the rest of the details of the property. I, yeah, I do look at the pictures, but I'm not really concerned about the pictures. I'm concerned about what is my money going to do for me. And so I respond back, hey, I would like to to purchase these two properties. And then I, you know, then the other properties that are in the list, I'm, I,

assume, go on to the next client in line and with maybe some other properties. And then that really starts the process with the specific properties. Yeah, you did a great job at explaining that. I'm going to hire you. Yeah. So the purpose of the queue, when you deposit the $2,500 to escrow, that puts you into the investor queue. And then you are placed in the queue in the order in which you've opened escrow. The rhyme. a reason behind that is because there is no bidding on our properties. The price is the price, but everything we send you is exclusive to you. So you have 24 hours to make a decision and nobody can take the property from you and nobody can outbid you. And we purposely designed it that way because

we don't want to create a bidding war. The price is the price. It's going to be supported by the appraisal. And so you don't have to worry about anyone stealing it from you. And I think Mitch, in fact, I think you made a comment about this, is like, when I send you a property, it's yours for 24 hours. You can evaluate it, sleep on it, think about it, pick your wife about it, whatever, for a whole day. And then, you know, wake up the next day,

tell me if you wanted or if you don't. And if you don't, it just goes to the next investor in the queue. So you've done a great job at weeding through the properties right away. So then you chose your property, and you were introduced to your transaction coordinator. I think you were assigned to Ashley. So tell me, what was that experience like? What's the closing experience like?

Well, Ashley is great. I come up with all sorts of questions. But, you know, if I need resources in the area, you know, wherever the property is, you know, whether it's inspectors or whatever, she can send me a list. I've asked for a list of insurance companies that are in those markets. and so she's providing all that. And so that's the selection of the properties. There's a time period where the inspection happens

and I get the results back and then I can create my list of, here's my punch list. And it's always been very smooth, right? There is a give and take. And I experience that in everything else I do. And so there is, here's my list. and, you know.

Let me ask you about that, Nitch. Tell me about what the inspection process was. So did you request your own inspection? Did we send you our inspection? How did that go? Across the four properties, it's been a mix. They're of the four. Because of the timing of the inspection on one of the properties,

I just used your inspection. On the others, because of the timing, I asked to do my own inspection, paid for those inspections, got the results back and then created a punch list. And even on the one that I accepted that you had done, I think there was a punch list that I made requests on. And of those set of requests, hey, could you fix this? Can you take care of that?

It's been a good mix. And I think it's been fair. I think it's been, and any time that it's like, hey, we suggest that we don't put, make this change, it's been a reasonable reason why. And so having had experience and doing that, having had experience and selling other homes, I understand all that. And so I thought, I think it goes very smoothly.

And yeah, I've been very happy. What was the timeline from the time that you got the inspection until the time that you closed? How long is that whole period for you? I think on the first two, I think we were in the middle of the process in August of last year. And I think it went fairly, fairly quickly. This year it kind of lined up with the holidays. So it got extended a little bit. But that's all right.

I mean, that, you know, that's reality as well. Yeah. And so I think it was a little bit longer these last two. But it all felt like it went very smoothly and quickly relative to the fact that it was the holidays. There's just, you know, sometimes things get backed up because of that. But that's right. Awesome. Okay.

And so what about the appraisal? The appraisal was ordered by a bank. And did you have problems with the appraisal? Did the values come in? Tell me about that. Yeah. On all the appraisals, the values came in, I think on all of them, They came in slightly above the purchase price.

So, you know, that obviously makes you feel comfortable with the transaction. And it doesn't introduce any, you know, wrinkles where you have to bring more cash to the closing. All those things that might happen. So, yeah, it's been good. You mean to tell me, Mitch, I could have sold my properties for hire than I sold them to you for, and I didn't do that. Gosh, darn it. It's true. That doesn't always happen, Mitch, to be quite honest.

But yeah, we try to have a little bit of equity, even if it's just a couple thousand dollars. It makes a difference at the end of the day. So, yeah, we intentionally try to do that. I love it. So what was the closing like? I know you had a closing today. So walk me through what happened today. How do we get to closing?

Yeah, so coming up to closing, I'm sure. Why are you laughing? I want to hear. I'm sure it goes all the way back to the mess of 2008, but the process of getting underwriting and all the details. And it's nothing that you do and nothing that's required by you, but it's now required by the lending process. There's, you know, you go through the process. There's a first request, hey, can you get this information put together? and you kind of gather up all your documents

and you put it together and you send it off and then the requests keep trickling in because of the things that they may find through the process and all that sort of stuff and so you go through all that but all the date is coming for close and the lending, the bank, the lending group is trying to get all that tied together

so that the closing can happen. And so what has happened actually on all of them, not just these four, all of that bills requests always keep come trickling in. And magically at the end, they've have all the information they need. They've validated that no, there's no funny business, all that kind of stuff, that I'm sure that they're required to track down. And then today, you know, last night, I got the official closing documents.

I got the wiring instructions. And my properties are in Birmingham, Alabama. I'm north of Dallas, Texas. And so what I had was a notary that is part of the service came by to my office, sat down with me over my lunch hour. And we went through the documents and everything was in order. and, you know, signatures and dates and initials on everything. And it was smooth.

We were done on two. Because I've been through it enough, I'm not afraid of the process. I know the documents. We were done on two of them probably not much more than a half hour. Wow. I think that's almost record time. Yeah. The longest closing that I have experienced,

experience through Cashwell Savvy was two hours and 40 minutes because my client chose to read every single document, which is A-OK. Yeah. But I think you went for the fastest closing because that would mean it's 15 minutes a set a document. Wow. That's awesome. So you're talking about all these papers trickling in.

You were specifically speaking about the lender requirements. Yes. Okay. Yes. I was like, I don't remember Mitch asking you for a whole lot of stuff. No, no, no. Yeah. Okay. Very cool. Very cool. So fast forward to that you, this was today, you actually signed on two properties. So congratulations. Mitch, you got two amazing properties. In fact, the one that you purchased on Sam Drive, we did an excellent job at that rehab. We said we were going to do carpet and we ended up putting hardwood floors. We said we were not going to include a few things. We did it all stainless. So congratulations, it's totally worth it.

So I'm really excited about that property. You'll see how it's going to be a beauty for you. But I want to ask you your two other properties. Yeah. What has been the experience as far as the tenant goes and property management? Tell me about that. Yeah. So all of the other properties I've ever owned, I managed them.

And so this is my first go at having a property management company. And the first two properties. You're making you out? One's in Little, I'm sorry? I said, is it freaking you out that somebody else is managing your properties? No, actually, I'm very happy about it. I love it. Okay, tell me more.

I didn't need to interrupt. Go ahead. Yeah. So the first two properties, one was in Little Rock and one was in Memphis. And so I'm working with two different groups. And they have different websites that represent their portal into their service, but both of them are high quality. Both of them, you know, they're different, but very responsive.

There have been, there have been some things, right? Whether it's some plumbing item or whatever, but they take care of it. They make sure it's done. And I have all the documentation that I need to know that, you know, that an issue had come up, the action was taken. and it all is right there in the reports and all that kind of stuff. So having done all that, I never did any of the work, right? So I always had contractors or people that I could call and have take care of it.

I have some very interesting stories. But it's nice to not have to take the call to then turn to my Rolodex or call somebody and say, hey, who do you know that is a plumber or an AC guy or whatever? Isn't it amazing? I know. I love it. You never have to hear from your tenants. Property Management does that for you. Exactly. So I'm very happy. I'm very happy with that. And both of those, I'm really interested in meeting the group that's going to be working in Birmingham and looking forward to it. Yeah. Our property management, Mitch, across the board, we spend a lot of time. vetting our property management. In fact, we don't introduce them to our clients until Matt and I

personally have worked with them for a long period of time and have vetted them. So the reason we are left with the best of the best in the industry is because all the other bad property managements that couldn't keep up, they weeded themselves out. So I am truly left with the best of the best. And I hear it all the time from my clients. You know, it's all taken care of. So it's really, really nice. Now, there are some hiccups just as it would happen. Yeah. So sometimes we get, you know, bad Apple or something happens, but that's what property management is for to communicate with my clients so that there's no loss of communication. So Mitch, tell me, have you been cash flowing with those two properties? I have, yeah. And so we bought them in August time frame and now we're

receiving the end of year reports. And yeah, one of the properties, um, On items that you can't see that you can't know about, one of them had the sewer line out to the street collapse. And the question was, hey, do you want to just fix just the section? And I'm like, let's just get it taken care of if it collapsed in one section, let's take care of the rest of it, knowing that once I take care of that then, and it's a little bit bigger ticket, everything's going to be fine. And so that's the reality, but even with that, partial year, that property will have cash flow for me. You're absolutely right. You get it, Mitch.

You get it. I love it. I love it. So, Mitch, what would you say, just generally speaking, what is the cash on cash return? You may not even know this just yet because we're so early in the year. But do you know what your cash on cash return is on each property that you purchased? Yeah, all of them should be around 10%. Yeah, that's about right.

So I always under promise and overdeliver. So I'm happy to hear that they're right out, the 10% mark. I love it. Fantastic. So tell me, what is your biggest challenge throughout this whole ordeal? I don't see any of the hiccups. I mean, there's nothing about real estate that's different than the rest of life, right? There are going to be hiccups.

So I don't see any of the hiccups being a major challenge. I think that the process has been smooth. I think that the stuff that we work through, I think it's all been fair and give and bake and you all have been very helpful. I think I wish it could go faster, right? I mean, the inspection process and the punch list and the underwriting for the loan. I wish I could just say, you know, here's X number of dollars and it's all done, right? But that's okay.

It's just part of how you have to go through the process. Yeah, I don't think I can make it go any faster because that would be 30 days is pretty darn good, Mitch. Let me tell you. It is. It is. Yeah, it's nothing wrong with your process. I just wish that it's like other things that you could just do a transaction and you're done. Yeah, that would be Mitch's perfect world, a real estate transaction in a week.

I have done a couple in 10 days. I think that's my fastest. But, yeah, faster than 30 days on this kind of a closing, I don't know if I can swing that. 21 days is my fastest time. I love it. So tell me what is the one thing that you would share with that investor, that is considering cash flow, considering internity, but they're just stuck. What would you say to that?

Yeah, I would say, you know, I would suggest that if you're holding back to spend some time listening to the podcast and find the episodes where Matt and Mercedes talk about the four ways to make money in real estate and really understand the difference between what you can do in real estate versus any other mechanism. It may sound like it doesn't make sense. But spend time and understand all of those dimensions because they are additive. They are, they make real estate a significantly more powerful

tool to use in your investing situation. So that's what I would say is take some time and really understand why those four aspects work for your benefit. And once you get there, then it's a matter of just taking the step. As Matt says, travel as far as you can see. And when you get there, you'll see further. That's right. Very, very true.

So, Mitch, is there anything in the realm of real estate that you would do different? now that you know that you've done it yourself, that you dove in and sure it took a lot to trust somebody else to do what you were already doing. So is there anything that you would do the difference? And what advice would you give that person that is considering? But anything that you would do different? I wish I could go back to my younger self and get started in this a lot sooner. But what I'm going to do with that knowledge is make sure. that my kids know. And my one son-in-law, he's already done these sorts of things, and he's been in real estate. My other son-in-law has actually just became a real estate agent, is getting his head around

how all those things work. But I want all of my kids to understand this and understand it so that they make this part of what they're doing, at least part of what they're doing. You're leaving a legacy, Mitch, that just gave me the time. chills. You have made a difference because had my father done what you're doing, I would have had a whole new different life. And so maybe that's why my father didn't do it so that I could reach out to people just like you that have made a system that will allow them to benefit. So Mitch, you are amazing just for doing it and setting the example for your six children. Well done, sir.

Mitch, you have been an absolute pleasure, not only to work with and to serve, but to just have some time with you to really dive into it. I get to speak to you, but I didn't get all the nitty-gritty that I got today. So thank you for sharing so candidly. And here's to property number four, buddy. And oh, a little bird told me that you want more. So is that the case? That's right. Yeah, I'm going to get back into the queue.

Oh, I love it. I love it. Well, I welcome you. And will you join me after you close your next property so you can tell me what that experience was like? Sure, yeah. I love it. Awesome. Thank you so much, Mitch. Thank you. Thank you. Thank you. Ladies and gentlemen, I am thrilled to have presented an individual who is not only doing it, but is leaving a legacy for his family. If you want information on how to do what Mitch did, feel free to go to our website. Go to cashflow savvy.com. That's savvy with two V's. Or send me an email. I actually do answer emails. It is Mercedes at epic realestate.com. And trust me, I will answer it. It might take a day, might take five days, but I will answer you.

To the next turnkey Tuesday, I will talk to you soon. Have a great week. Do you have doubts about your current plan for retirement actually panning out? Imagine revolutionizing your retirement plan so it pays you right now and in retirement. Change one thing one time and that revolution can be yours. That's bad news for Wall Street but great news for you. We're cash flow savvy and we'd like to offer you free information that will show you how one simple tweak can cause your retirement plan to pay you right now and in retirement. And it's yours for free.

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