Epic Real Estate Investing - The Best Use of $100,000 to Build Your Real Estate Portfolio - 2019 | 650

Episode Date: May 10, 2019

What would you do if you had $100,000 liquid to invest? Well, as you start building wealth, you want to get control of as much real estate as possible and responsibly leverage as much as you can by using other people's money and today, we are showing you how to do just that. Learn where to find and how to use other peoples’ money to invest, why leveraging in real estate is very important, and how asking good questions can make you money. Learn more about your ad choices. Visit megaphone.fm/adchoices

So now I have a whole handful of new friends that understand what real estate investing is about. They understand my same challenges. You know, you can't do this alone. You can't have a business and try to operate it alone. You need a tribe around you. And that is exactly what epic intensive coaching helps you do. It helps you to create your tribe and feel like you're not alone in this journey. Hey, Matt here.

I got a great show for you today. But first I got a question. Are you trying to buy discounted real estate, but finding that spending more and more on marketing is just becoming way too much to handle. I mean, do you start fresh every Monday, fail, then vow to start again with the same old real estate investing strategies that aren't working for you? Well, you deserve to learn about a new way of contacting your leads, setting appointments and making offers by actually setting up a really good automated lead machine so you can quickly get your hands on more discounted real estate. That's the goal, right? Because this changes

everything. And before we get started today, this podcast, as long as you've been listening, even whether that's just a week or it's been a few years, you know it's all about finding discounted off-market real estate deals and then what to do with them. And if you're really serious about finding these types of deals at will, then you might like to join us at the upcoming live three-day Epic Intensive Lead Machine Workshop. It's going to be in Manhattan Beach, California on July 18th through the 20th. And if that sounds good to you, then have a look at Epicintensive.com. I mean, it's California. It's the beach.

It's the middle of summer. Bring the family. Make a vacation out of it. Go to epicintensive.com and let's make it happen. All righty. Let's get started with the show. This is Terio Media. It's Financial Freedom Friday.

And I'm going to do something a little bit differently today. And what has inspired this different type of episode was what happened this past Wednesday on way back Wednesday. And if you're just finding us for the first time, welcome. I'm glad you found us. But on Wednesdays, we've been. reach way back into the archives. That's why we call it way back Wednesday. Back into the archives of old podcast episodes, we re-air them and bring them back to life. And currently we're going through

the old do-over podcast episodes. That's the original podcast that gave birth to the epic real estate investing show. And I was listening to it and it was just interesting to hear what I was actually thinking, what I was saying back then. I mean, it's been 10 years. I don't even remember what I said back then. So it's a brand new episode. It's like I'm listening to it for the very first time, just like many of you are. When I got to the end, this is the part that I'm really like going to draw your attention to was there was the five habits of billionaires. And I was reading an article out of Forbes magazine. And I felt the need to interject my own little commentary in between each one of those points or each one of those habits. And God, it was just causing me to cringe.

Because I was just like, shut up and just read the next one. No one wants to hear from you. We want to hear from the billionaires. On some of those, I even ridiculed some of those habits or some of those points from billionaires. And it was just really interesting

to recognize how much water has gone under the bridge, how far I've come, how much I've learned, how much I've developed, because I've invested so much money into myself,

my personal development, specifically around hiring coaches and getting close to people that are just smarter than me and people that are much further along than me. I've done that through coaches, is I've done that through mastermind groups. And something I've learned about myself is,

and I think I even mentioned this just last week or two weeks, because I caught myself slipping up again when I was meeting with my current coach. And I had asked him a question, something that's really painful right now and something that's really ailing me. And he said, well, do this, do this, do this. And I caught myself, like inside my head, it was,

yeah, yeah, that's good. That's probably how you did it, but that's not how I'm going to do it. And I caught myself. I'm like, ah, see, you used to do that all the time. And I recognize that in that episode that we're getting advice from billionaires on how to become a billionaire. And I had the nerve to ridicule some of those points and almost make fun of them, being really snarky about them. I don't know.

It was just really interesting. So moving forward as far as today goes, I said, well, let me reach back into a couple more of these episodes and see if there's anything else that I can recognize a difference or recognize a growth or a maturity or even maybe I just flat out changed my mind. maybe I learned something since then to where I don't believe that anymore because we all grow. We all get different life experiences. We all have the ability and we all certainly do change our minds on certain issues. And so I wanted to play this episode. I picked this one out. It's been a really popular episode on YouTube.

And I wanted to go back and see what I actually said there because it gets a lot of comments, a lot of positive and negative comments. So it's somewhat, I guess, polarizing. And I wanted to see what was so polarizing. Let me go back and listen to what I actually said. And so I will play that for you. And then after it's over, I'll come back and comment on how I think differently or what I would say differently or, you know, how I've evolved or regressed maybe even. I don't know.

So let's see. I'm going to listen to it right now. And then I will be right back. Enjoy. It's time for Financial Freedom Friday with Matt Terrio. Here's a scenario for you. Joe recently started building his wealth and real estate, and today he holds a few cash-flowing rental properties, and he has $100,000 liquid to invest.

How should he best use that $100,000? What should Joe do? I mean, what do you think? Well, the most important detail of this scenario is that Joe is currently in the wealth building phase of his real estate career. See, in the building phase, you want to get control of as much real estate as possible. and responsibly leverage as much as you can by using other people's money. And other people's money, that can mean banks, it can mean hard money, private money,

the existing financing on a property or seller financing, you know, whatever's not coming out of your pocket. That's what I'm talking about. You see, just because you have money doesn't mean you have to use it to acquire property. You know, instead of Joe using his $100,000 to buy more property, personally, I've I mean, I'd probably hold on to the majority of that money and use it to manage the properties that he does acquire. So if you're not going to dip into your own disposable cash, whose money are you going to use? Well, I've got some ideas for you, five of them actually.

Right now, the cheapest money available today will be through the banks. I mean, it's pretty tough to beat the low rates they're currently offering. And if I could, I'd take as much of their money as they'd give me, and I'd take it right away. Now, if banks aren't an option, and even if they are, at some point they will not be, I'd start looking for seller finance deals. I mean, just look on Craigslist. It's very simple. Or ask realtors. Every realtor you come in contact with, ask them this. Do you know of any listings where the seller is willing to carry back financing? It's a very powerful question. Now, another place to look is your friends, your family, your associates who are dissatisfied with the current returns on their investments. I mean, don't you think Aunt Marge, who's earning a 0.7% on her CD would be very interested in an 8% return, or even a 6% or 4% for that matter?

Yeah, I think she might. And let's not forget your own assets as a means of money. I mean, do you have any assets that are underperforming? Do you have an old 401k that you forgot about or an IRA? How about some gold or silver line around? Maybe you have a couple jet skis in the garage that don't get used anymore. I mean, anything that you have a value that's no longer serving you or not serving you as well as it should, utilize that. And lastly, always be negotiating.

I mean, your negotiating skill has actual monetary value. You can turn your intellectual currency into actual currency. I mean, if you ask a seller a very simple question like this, what's your bottom line? And they respond back with $10,000 less than what they originally asked for. That's $10,000 you don't have to leverage. or perhaps a combination of any of the five things I just mentioned. Here's where it gets really creative and fun. Let's say, for example, Joe goes out and he finds a single family home

with an owner who's willing to seller finance 60%. Well, if he negotiates that up to 70%, then he sells the jet skis for an additional 10% and then Aunt Marge decides to step in and finance the remaining 20%. Joe's now got 100% financing and control of another cash flowing property in his portfolio, doesn't he? Yes. And he still has his $100,000 in the bank, right? I mean, maybe he uses a couple grand of that to improve the place a bit and then puts, I don't know, another $3,000 into a separate bank account for incidentals.

Now Joe is out of pocket just, say, $5,000, and he's sleeping very well at night knowing everything's taken care of. And he's got ownership of another property. Then, tomorrow, he can get up and go do it all over again. I mean, right now, if you're building your wealth, you want to get your hands on as much property as possible. using as little of your own money as possible. And keep a good chunk of cash in the bank to back up the properties that you do acquire. I mean, you'll rest easy knowing that your assets are covered, and you can continue to build your wealth until it's time for phase two.

That would be preservation of the wealth that you've created, which is a conversation for another episode. Anyway, that's what I would do if I were in Joe's shoes. And I don't know, what would you do? Maybe you want to do the same thing. And if you do, maybe you don't know where to start. All right, so I've certainly got some thoughts on this. But before I share those, if you're really serious about your real estate investing and turning

it into a part-time or a full-time business, you might want to go check out RIIAase.com, because that's what we do over there for people. You can head over to RIAease.com and fill out a little form. We can hop on the phone and we'll brainstorm some ideas. And if it makes sense, we'll help you out there. And if it doesn't, that's fine too. There's certainly no obligation. That's over at RIAease.com.

But now with regards to this episode, I don't know if there's too much I actually do disagree with. I think the big points that you want to get from here, what you want to pull from here, is you want to leverage as much money as possible to build your wealth, to build your cash flow, because it's going to build at a faster rate. The use of leverage really multiplies the growth of all four profit centers of real estate. You want to use as little of your own money as possible so you can fully harness the full best. benefit of leverage because leverage in the way we're allowed to use it in real estate really isn't available to the average person and any other typical investment or the types of investments that are available to the average person. And then what I kind of left you hanging there as far as preservation goes. So if we use leverage to build our wealth, the rule of thumb that I hold on to

is to eliminate leverage to preserve. So you take on the debt to build, you pay down the debt to preserve. But other than that, I think, yeah, I really agree. It's really interesting. I thought that video was shot a little more than six years ago. And it's interesting that the bank's money is still the lowest and cheapest money out there that's available. So if you got the ability to use the bank's money, continue to do it.

I don't know how long it'll last and how long that will be available. I certainly wouldn't have guessed it will be available for another five or six years. if you'd ask me that question back then when I recorded this. But then also seller financing, that gives you all kinds of flexibility and presents all kinds of opportunities and friends and family. And don't borrow money from people.

Do them a favor and give them an asset that's going to produce far greater than what their money is currently earning. And then look at those old assets that are sitting around. You know, I'm getting ready to move right now and we're doing a lot of liquidating and a lot of selling. We're doing eBay stuff. We're doing estate sales.

We're just getting rid of a bunch of stuff. and it's just amazing how much junk I have. And, you know, some of it's really nice junk. Some of it was very expensive junk. But when I refer to it as junk, it's stuff that at one point was so important to me to go out and buy. And now it has no importance at all that I actually forgot I even had it. And it's sitting in the garage or sitting in a closet in the spare bedroom. And it's just sitting there collecting dust.

And I was like, oh, look at this. I remember this. And then the final one was don't underestimate the power of negotiation. That right there, a simple question, can put some money in your pocket really, really quickly. You know, what is your bottom line? That's a great question. Or is that at all negotiable? That's another great question.

Is that the lowest you would take? Another great question. So all of those, really good questions to ask. And, you know, frequently, you put another $3,000, $5,000, $10,000 in your pocket by trimming that off the price that you're negotiating. But anyway, banks, seller financing, friends and family, your assets that you currently have, or I would say your liabilities that you currently have, that you're not using, there's value there that you could deploy, and your skill and your ability to negotiate. All righty, so that's all I got for you today. That was fun. I'll see you next week on another episode of Financial Freedom Friday.

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