Epic Real Estate Investing - The $100K Real Estate Trick That Pisses Banks Off | 1447

Episode Date: March 22, 2025

In this episode, Matt shares the story of how a private client, Ivan, successfully transitioned from having no real estate deals to owning six cash-flowing properties without heavily using his $100,000 cash. He explains the concept of 'intellectual currency' versus 'cash currency,' and how relying on creativity and problem-solving can be more effective than using cash. Key elements covered include the three common mistakes that ruin seller financing deals, the 'deal dynamics axis,' and specific phrases to introduce seller financing without scaring off the sellers. The episode aims to demonstrate how leveraging intellectual currency can help investors achieve profitable real estate deals while bypassing traditional banking methods. Matt also offers a free seller finance cheat sheet containing helpful strategies and contract templates for viewers. Ivan's seller financing cheat sheet: https://drive.google.com/file/d/1tzi1yXOulCL6yRzypyZ4gSk2BV7-O3tN/view Learn more about your ad choices. Visit megaphone.fm/adchoices

This is Terio Media. Hey, strap in. It's time for the epic real estate investing show. We'll be your guides as we navigate the housing market, the landscape of creative financing strategies, and everything you need to swap that office chair for a beach chair. If you're looking for some one-on-one help, meet us at rei-aise.com. Let's go, let's go, let's go, let's go, let's go, let's go.

Let's go. You know what pisses banks off more than anything? losing money. And they lose money when you cut them out of the deal. Here's what I mean. Last summer, a private client of mine, Ivan, came to me asking how to best invest his $100,000 in real estate. And I told him something that shocked them. I said, don't. Stick it under your mattress, bury it in the backyard. I mean, whatever you do, do not invest it in real estate. Now, most investors completely miss what I'm about to show you. You see, investing in real estate, it can present 99 problems, but money ain't one. It's never a money problem. It's always an idea problem.

And by the end of this, you're going to see the three secrets that help Ivan go from zero deals to six cash flowing properties while barely touching his $100,000. I'm going to show you how to use intellectual currency instead of cash, the three common mistakes that kill most seller finance deals before they ever start, and the deal dynamics access that makes sellers say yes to creative financing. Now, when I told Ivan to keep his money under his mattress, and he looked at me kind of puzzled, understandably, he was like, well, then how are we going to invest in real estate? I was like, Ivan, look, we do need currency to invest in real estate. But here's what most people don't understand. You've got two types of currency available to you. You've got cash currency and you've got intellectual currency. And here's why this is important.

You see, when people have cash to invest, they use it. When they don't, they find better deals. I mean, think about it. Having cash makes people lazy. You stop looking for creative solutions. I mean, you just throw money at the problems. And you stop seeing opportunities that others miss. But when you don't have cash, that's when you're in.

intellectual currency activates. You start seeing deals differently. You find solutions others can't see. Now, banks really don't want you knowing this next part because when you learn this, you just may never need them again. I mean, some of my best deals, my most profitable ones, they came when I had the least amount of cash to work with. And why is that? Because I was forced to get creative. I had to solve problems that my limited amount of money at the time couldn't fix. And after going through this multiple times, here's what I discovered. The more I was forced to get creative, the more intellectual currency I gained to take down the next deal. And the more deals I took down, the more cash currency I got in return. And then Ivan asked me, uh, you're not talking about

seller financing, are you? Because I've tried that before. It doesn't work. That's what he said. And I was like, let me guess. It hasn't worked because you probably made one or all of the same three mistakes most investors make. First mistake, you probably brought up seller financing too quickly, and you scare them off. You see, when you lead with seller financing, you're thinking like a bank. But when you lead with problem solving, that's intellectual currency at work. You're thinking about the seller.

That's how smart investors think. So instead of asking, would you consider seller financing, we start by asking, Mr. Seller, if you could wave a magic wand, what would you like to have happen? Second mistake, you made it sound too complicated and confuse them.

You see, when you're focused on money, you talk about things like interest rates and amortization schedules. But with intellectual currency, you're having conversations about solving problems, like helping a tired landlord get reliable monthly income without tenant headaches. And this is where it really started to click for Ivan. This third mistake, you missed the signals about what sellers really need.

You see, every seller has a story. Every property has a problem. When you're too focused on the financing, you miss the real opportunity, solving the seller's problem. Now, most sellers, when they're first talking to you, they think the only solution to their problem is just getting their price and getting it fast. That's the only thing that really makes sense to them at the moment. And so that's where we start the conversation of creative financing by not being creative at all.

Let me show you something I call the Deal Dynamics Axis. The vertical line represents price, how much you'll pay for the property. The horizontal line represents time, how long you'll take to pay it. And here's the secret idea most investors miss. You only need to control one of these two. who make a good deal. It's like a seesaw. When one goes up, the other must come down. So if a seller needs all their money and they need it really fast, hey, it's fine, but the price has to come down. If they want full price, no problem there either, but they'll need to wait longer to get it. And this

here is where Ivan's whole perspective shifted. You see, it's important to start with just the price because that's what sellers understand. And once we reach an impasse on price, that's when we introduce how we'll pay it. Now, there's more than one way to do this, but here's exactly how I say it every time because it works. Mr. Seller, the market may allow me to come up to your price if you could take some money now and the rest later. How much do you actually need right now? Now, pay attention to what this simple question accomplishes.

There's three things. First, it introduces seller financing without ever saying those words, seller financing. Second, it asks if they're open to payments without directly asking if they're open to payments. And most importantly, if they tell you the number that they need right now, they've just indirectly confirmed that they are indeed open to receiving the rest later. They are open to payments. See, this is where intellectual currency really starts working for you. So once they tell you how much they need right now, here's the magic phrase that changes everything. Would it be okay if I broke up the balance into 300 equal monthly payments? Now, here too, there are three reasons

why this simple phrase is so powerful. It's almost like magic. First, it's psychological. You see, when I say 300 payments, it sets what we call an anchor, a big one. And if the seller was thinking that 50 payments might be fair, now they might counter with 100 or 150 payments in the interest of not scaring me away. And I'm still winning. Second, it's mathematical. I've yet to find a deal where 300 equal monthly payments wouldn't work with the rent-to-mortgage ratio. It's my safety number that I can count on producing a positive cash flow, no calculator needed. And third, this is where it gets really cool. It sets up zero percent interest without ever using those words zero percent interest. Here, let me show you exactly how this worked with the

that Ivan and I found by sending customized personal letters to tired landlords who were either behind on their property taxes or had a late mortgage payment within the last 12 months. So this particular landlord, they were just tired of dealing with tenants, but they didn't want to let go of their passive income. Ideal situation, right? But remember those three mistakes that we talked about. You see, as a perfect of a scenario as this deal was for seller financing, you still have to be mindful of these landmines that you can step on. So instead of just jumping straight into seller financing, we led with understanding his problem. Instead of introducing complicated terms, we still led with price. And most importantly, we listened when he told us what he

really needed. Nonetheless, he insisted on his price. He was pretty firm there. And this is where most investors get discouraged and lose it. See, they almost inadvertently take on an adversarial role at this point. They take on this role with the seller trying to grind them down on their price by, you know, showing them comps and talking about interest rates and embellishing on the repairs that the property needs. Amateur hour. When this seller insisted on his price, we let him know, simple. You know, Mr. Seller, the market, it might allow us to come up to your price if you could take some money now and the rest later. How much do you need right now? And he gave us a number, about 11% of his asking price. And then he immediately asked, well, when will I get the rest? Well, Mr. Seller, typically,

we divide the balance into 300 equal monthly payments. Would that work for you? So he, he paused and he calculated in his head for a second and said, gosh, I'll, I'll be dead by then. But what if we did 200 payments? That would be just about right. Now, this was a first. Watching a seller calculate his own life expectancy to structure the deal. But that's the thing about using intellectual currency. Every deal has at least one first somewhere. That's exactly why your intellectual currency grows with every deal, why it's so much more useful and valuable than your cash currency or the bank's currency. And this was Ivan's breakthrough moment.

He finally understood getting seller financing isn't about the property or even the deal structure or the math. It's about understanding the seller's motivation to sell and presenting solutions and plain English. No investor or finance jargon allowed. Once he got this, everything changed. In just a few months, I've helped Ivan build a portfolio of six cash flowing properties, all with creative financing.

And remember that 100,000. that he kept under his mattress, most of it's still there, ready for repairs or emergencies. Think about that. The bank lost out on six mortgage opportunities just with Ivan alone. No wonder they get upset when investors figure this out. Before you go, I want to give you something that'll help you implement everything that we covered. Use the link below to grab my seller finance cheat sheet. I don't need your email or anything. Just grab it and go. But in it, it includes the exact phrases that I use to avoid those three common mistakes, a visual guide of the deal dynamics axis and how we find deals like this. And I'll even throw in a copy of the actual seller

finance contract that we use in our deals. I'll give you the paperwork too. And if you need any help beyond it, let me know. But if we never meet, use this cheat sheet because every time you structure a creative deal like this, somewhere a banker is crying into their spreadsheet. And do me a favor, hit that subscribe button if you want more real estate strategies that the banks don't want you to know about. And by the way, this is totally free to share with those that you want to see when. I'll see you next time. Take care. And that wraps up the epic show. If you found this episode valuable,

who else do you know that might too? There's a really 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. God loves you and so do I. Health, peace, blessings, and success to you. I'm Matt Terrio.

Living the dream. Yeah, yeah, we got the cash flow. You didn't know, home for us, 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.