Epic Real Estate Investing - The Future of Texting, Bidding Wars and What Jerome Powell Said...| 1143

Episode Date: April 30, 2021

In today’s episode, Matt reveals how to win a bidding war and update us on monetary policy and cryptocurrencies. Moreover, he shares a webinar from Josh Miller, an REI Ace client who talks about the development of text messaging and the upcoming changes around this marketing strategy. 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-Aase.com.

Here's Matt. Here's Matt. We should get that change, right? I need a new song. I had a new song being created, a new intro. And then Instagram decided to deactivate my account with no reason. At least they weren't clear on what the reason was. Said I just violated the terms and policies.

And here, read it, you figure it out. And I was bummed about it. I took a little bit personally. I was thinking someone was out to get me. And so I had another account. And then the same thing happened to that account. I was like, okay, now I'm really starting to feel like this is a personal thing. But I was listening to a podcast today.

It's a new podcast I'm listening to. I really enjoy it. Let me look it up here real quickly for you. Something about money. Oh, we talk money. It's called We Talk Money. They've got like a crypto guy on there, a conventional financial planner, and then some, you know, multimillionaire investor.

And they all just talk about money. And you get like these three different perspectives. That's a really good show. We Talk Money. Anyway, the girl on there, she's the financial planner, and she told almost the exact same story as I'm telling you about the Instagram account. So I'm not the only one, so maybe it's not personal. I don't know, because she seems like a really nice person.

So if I am in her company, then that's probably a compliment. Anyway, so the person that was doing this new intro for me, I can't get in touch with them now because we were doing it all through DMs. Anyway, I will figure it out. But for now, we got what we got. So, hello, and welcome to the show. This is where we show people how to invest in real estate using more of their mind than their money, using creative real estate investing strategies with an emphasis on escaping the daily grind and retiring early.

So if this is your first time here, really glad that you found us. If you like what you hear, make sure you hit the subscribe button before you go. And if this is not your first time here, welcome back. So good to see you again. And thank you for sharing this with your friends and family. I just would not be here for almost 12 years now without you doing that. So thank you. My deepest gratitude goes out to you.

You are the best. All righty. So today, we've got a few things to talk about. One, how to win a bidding war. So if you've been out in the market, you probably know what that is. So we'll talk about that. And then we're going to talk about what the Fed said this week. And what there is for you to do about it.

We're talking about a little bit about, monetary policy and how to pivot to make it work for you. And then, of course, I've got the news and I've got this week in crypto. And at the end of the show, the very, very end, I'm going to drop in a recording of a webinar that I was on today by RIA Ace client turned marketing guru. He runs his own marketing agency just for real estate investors, Josh Miller over there at Go for Close. And he did a little webinar for his clients.

but you let anyone join on the developments of text messaging, the industry of text messaging for your marketing. So there's big changes coming that are going to impact you if you're reaching out to sellers via SMS. You know, it's been a whole lot of fun. It's been affordable. It's been effective and people have made a lot of money doing that.

But there's going to be some big changes that are going to impact you. So you want to stick around for that. And I'm just going to drop it in at the end with minimal. If. any editing. If you want to listen to it, just know that edits at the very end. All right,

so you can get the whole scoop. If you're not marketing via text messaging, then you're probably not even relevant to you. But just so you know it's there. All righty, so today's sponsor of the show. Once you to know that, you've got the dream.

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Now get the funding. Epicfastfunding.com. So depending on how you're going to, about your real estate investing or even if you're shopping for a new home to live in, you're undoubtedly experiencing competition for properties, of which are more and more each day resulting in bidding wars. And I know this because I was in the mar, right, not was, I am in the market for another rental property. And Mercedes and I frequently will purchase turnkey properties. We have a team and we know other people that have teams and we just kind of look out for

those deals when we're ever ready. And we pick up the phone and start making phone calls. And there are multiple offers on all of these properties. So the inventory, as you know, on the retail side is really low. And on the investor side, it seems to be low. Now, if you're dealing straight with the seller, then there's kind of that, that's kind of steady. That's stable. There's always that supply there because, you know, you're looking for motivated sellers.

And, you know, unfortunately, life happens to everybody each and every day, comes along, waxes us upside the head and causes us. to be motivated where we have to turn to our property for some sort of financial relief. And so we're willing to sell quickly even if it's at a discount to solve that. So that happens every day. But on the retail side, the inventory is low and there's just more buyers than there are properties. And these buyers, they go and they bid against each other, creating this bidding war.

It refers to when two or more prospective buyers of a property compete for ownership through incrementally increasing bids. So my agent here in Vegas says, They're seeing houses get 10 to 20 offers in a few days as soon as they, within them hitting the market. And they're selling for anywhere from $20,000 to $30,000 or more over asking. And based on the typical market indicators that we pay attention to, it doesn't look like this market dynamic is going to be changing any time soon. In fact, by each passing day, it's only getting tougher. And as they say, when the going gets tough, the tough get going, right?

So what I'm going to do is I'm going to give you some things to do to toughen you up for your next bidding war because you deserve a fighting chance out there. Because you are an epic investor and epic investors are prepared. And so when I first became a real estate agent in 2003, the market conditions were very similar to what we're seeing right now. and being a brand new agent at the time in a very competitive market like that, I mean, if you don't figure things out quickly, you're going to starve. You know, I was a brand new agent and they said, don't expect to make a paycheck or earn a paycheck for the first six months of you being a real estate agent. And then that's under normal conditions.

And then they throw you into that type of market where, like I said, very similar to what it is like right now, whether the demand was just so high, it's tough for a new agent to earn a living. So you've got to figure something out. And I did learn a thing or two when it comes to working with real estate agents in bidding wars. And those lessons have translated very well for my own real estate investing when dealing directly with private seller. So it works on both sides. The concept of principles are the same might be some nuances there that have to be adjusted. But the overall concept or the overall approach, very, very effective, whether you're working with an agent or if you're dealing directly with the property owner yourself.

Right. So first thing, sometimes it may seem unfair that you got to go through this, right? But it's just what happens in an economy when demand exceeds supply. And right now, demand is exceeding supply like a. mofo, right? It's so lopsided in the seller's favor. It's something that we've really never seen before, not to this degree. But don't fret, hang in there. That pendulum is going to eventually swing back the other direction and the buyers will again have the power in the market and then there'll be discounts everywhere. When is that going to happen? I don't know. But it's just kind of nature. This pendulum has to go back and forth. But for now, the power is in the seller's hands. They call the

shots. It's their property and they can sell it in any way. that they want, and that's exactly what they are doing. So as a buyer, you are at a disadvantage before the bidding war ever begins, okay, or before the bidding period ever begins. Yet there are things you can do to increase your odds of winning your next bidding war. So first, know your outcome. That's number one. Know your outcome and know your limits.

So define what it is that you want to have happen and how far you're willing to to go to make it happen. Then just consider the pain of overpaying, which is almost a given versus the process, the pain of the process of losing and repeating that experience with the next property and likely having to pay even more then. I mean, it's really easy to get caught up in this multiple offer frenzy, especially if you really like the house and then you start seeing how it's going to turn profits in for you or you start to see the equity or the cash flow.

or whatever it may be, or something you're looking at to live in and you start imagining your life there, it can get very emotional. So establishing your limits up front or your minimum deal standards, as we refer to them, can help from those emotions totally taking over if there's competition and provide some protection from bad decisions. Okay, so number one, know your outcome.

Number two, understand the seller. You want to tune in to their favorite radio station and play their station loud, W-I-I-F-M, what's in it from me? And so if you are talking to the seller or if you're dealing with an agent, ask your agent to talk to the seller, to call the seller, and ask the seller what they would like to see in an offer. You tell me, what do we need to do to get this through? What do we need to do to make this deal or to make this a deal?

Because sellers aren't exclusively motivated by price. and they're not as motivated by price as much as most people think. And if you assume that they are only motivated by price, you're going to overpay more times than not. Or you're just going to flat out lose and not get the deal. You know, sometimes a fast close can be the most important thing to a seller. Sometimes a slow close, maybe, or they want to rent the property back, something like that. Sometimes the certainty of clothes can be the most important.

I just want to make sure this deal gets done. I don't care if it takes 30 days. I just want to make sure that it's only 30 days. And sometimes there's an emotional satisfaction involved where the seller wants to sell to someone who's going to take care of the place or is going to really appreciate the place or is going to raise a family there like they did. You know, I remember talking to a seller not too long ago. And I felt like we had a whole deal.

Like we were really hit it off. The rapport was built. And I thought, okay, cool, I got a winner here. And when you found out that I planned on renting it out, he said, oh, no, no, no, no, no, no. I can't, I can't rent this to you or I can't sell this to you. I couldn't do that to my neighbors. I can't bring in tenants into, to this neighborhood.

And that's why he basically said, no, sorry, no, thank you. And I almost felt like, okay, I was just kidding, I was just kidding. I'll live in the house, but I didn't think you'd go for it. Anyway, some agents will play ball in sharing this information with the other agent from agent to agent. And others won't. they don't, it's, it's a, it's their fiduciary duty to kind of keep each side their secrets, but it's also their fiduciary duty to, you know, reveal what they have to reveal without compromising their client's position to put a deal together. So, but someone just flat, I won't do it. And,

but it doesn't hurt to ask. And then also ask your agent, or if it's you face to face with a seller, present your offer in person. Now, most agents are going to resist. Just because most agents don't do it that way. They think it's weird or they're lazy. I'm not sure. But it is their fiduciary duty to represent you in the way you want to be represented. Don't underestimate the power of rapport that can be built face-to-face versus just sending an email with your offer attached.

And so if you're trying to close your deal over the phone and you have the opportunity to go and close that deal face to face, always opt for the in-person face-to-face option. Okay? I've purchased so many properties just because I went the extra mile to meet in person. And the seller just ended up liking me more just because they met me, not because I was more charming or nice or funny or anything. It was just because I meant more to them than a voice over the phone because I was there. Ready?

So present in person when you can. Number three, be prepared. line up your finances. And I would say this is more for being a home buyer on the retail side of things. I don't think this is nearly as important if you're dealing face-to-face or directly with a private owner as an investor. But certainly if you're on the multiple listing service and you're working with real estate agents, line up your finances. At the very least, get pre-approved for financing. You'll likely have to act swiftly in this competitive market.

And if you have a pre-approval letter in advance, you will have the ability to do. that. And who knows, if you stumble across a sophisticated seller as an investor and you need a proof of funds letter, you can grab those at epicfunding solutions.com, epicfunding solutions.com for the investment side of things. So, and the reason this is important, because on the retail side of things, if the seller's agent oftentimes is going to be reluctant to even consider an offer without a pre-approval letter. So this just shows the seller that you're not only serious, but you're qualified. And don't underestimate the agent's interests either.

They don't get paid until the deal closes. So they're looking for a strong buyer as much as the seller is. So they're going to give some encouragement to the seller on which offer to choose. So and then maybe even having the seller's agent represents you to kind of feed off that agents need. to get a double deal, right? They'll get both sides of that commission. But anyway, a pre-approval should not be confused with the less rigorous pre-qualification. Those are two totally different things.

So the pre-qualification, this really provides a quick estimate of what you might be able to afford, usually based on unverified financial information that you provide. In a pre-approval, lenders will thoroughly review your income, your assets, and your credit scores to determine exactly how much you can borrow and which loan might be best suited for you. And this can take from a few hours to a few days to complete. So if you want to win a bidding war and you're dealing with agents, it pays to do this work in advance.

And I would have to imagine that I haven't been in too many bidding wars. That's why I said, why I had to pause there for a second. I haven't been in too many bidding wars as a real estate investor. I mean, I always know there's competition. but I always just rely on the rapport and the trustworthiness and demonstrating my competence and playing the reluctant buyer, all the little positioning that we do when we're dealing with a seller. But I can imagine if you walked in and held up your bank statement, say, I got cash, right?

Here it is. Here's proof I can close. That might, yeah, that would definitely, that would probably trump another investor in there that was, doing it the way that that I've done it for so long, right? So that might be something to consider. I'm going to think about that. I just thought about that as I'm sharing this with you. I was thinking more along the, as I'm reading from my notes here,

I was thinking more along the side of dealing with a real estate agent. And I've never really had to do that or I haven't done it at all as a real estate investor. But I can imagine it work. Yep, it sure would. You show you demonstrate your strength as a buyer and that you're going to follow through. So perfect. All right. Now we resolve something right here.

together. But most people, of course, won't have the financial means to offer all cash, but if you do have the cash available or you can arrange it, this will almost certainly put you at the top of the pile or the top of consideration. And, you know, depending on your circumstances, this may sound unrealistic. But you are competing in a market with buyers who do have all cash, especially after they've moved from the city to the suburbs and or they are downsizing. They're coming with deep cash pockets. You know that average household income

increased their net worth by I forget the number. I'm going to butcher it. I think it's 22%, but I'm going to say 12%, just to be conservative. But I think it was 22%. In 2020, during the pandemic,

the average net worth increased per household. 22%. Crazy. And then on the agent side of things, the retail side of things, there's a recent survey by the online brokerage firm Redfin that found that buyers who offered all cash almost quadrupled their chances of winning a bidding war. So as they say, cash talks and that other thing walks. Number four,

and this one's really key. Move fast. Speed and decisiveness are critical. Homes are selling at a fast clip in most markets, usually within days, sometimes hours. So if you see something that meets your criteria in your price range, don't wait to submit a competitive bid. You know, that's why knowing your outcome up front, knowing your minimum deal standards up front, if you know that, it makes it very easy to put an offer together and submit it quickly. It doesn't take a whole lot of thinking because you know exactly what it needs to be. So move fast.

I mean, I remember calling my clients and pulling with them out of work to meet me at properties within an hour of listings going public. And we wrote offers right on the hood of my car and submitted first. And we won a ton of bidding wars this way just by being first. Ready? Number five, make a good offer. You know, this is where learning about the seller and what's important to them really comes into play. Now, if an all-cash offer, if that quadruples your chances of winning, a close second is to waive your

loan contingency, if you have one. And a contingency, if you don't know, that's a condition for some unforeseen event or circumstance. It's kind of like if this condition happens, then this is the action we take. Or if this condition doesn't happen, then we take this other action. You know, for example, if you write an offer with a loan contingency because you went to the bank and you're getting a loan and your loan gets declined, you can walk away from the transaction without penalty based on your loan contingency. Right? So if your loan contingency or excuse me, if your loan was approved,

then you wouldn't have that contingency to cancel. But if it got declined, then you would. So that uncertainty, it can cause a seller to pause, especially if competing offers have waived their loan contingency. Even if your offer price is higher sometimes. It's not always the high price that wins. Sometimes it's just that certainty of close. that we know this deal is going to go through.

And waiving the appraisal contingency is also a really effective strategy for making a good offer, especially in a rapidly appreciating market like the one we're in right now. Because the appraisers, they just can't keep up with the sales. You know, a house today that closes today is really just a snapshot of what the house went into contract for 30 days, 45 days ago. Houses right now might be selling for a lot more than they were when you went into contract. So the appraisers have a tough time keeping up with that. And that appraisal contingency can make people nervous. There might be people willing to pay the price,

but the bank is not willing to fund that price is the issue. So keep in mind, however, that you may need some extra cash to bridge the gap between your lender, what your lender will give you and the price written in the contract. And if that's a concern because you don't have the cash to cover that gap, there's some other things that you can do inside the contract. You can offer to pay the seller's closing cost. That can help.

or the transfer tax, if you have one in your city, or property taxes, or maybe a portion of or all of the agent commissions, of which will, by offering to pay those in the terms and the fine print and the contract, that can increase the net proceeds to the seller sometimes significantly without impacting the price, so it wouldn't impact your appraisal. See how that works? And then waiving or reducing your inspection contingency. That can help too.

What that means is you're just willing to take the property as is or conduct your inspection quickly. It's kind of customary to have 14 or 17 days to conduct your due diligence and your property inspection. But if you say, I can do this in three days, so they'll have an answer really quickly, that could make up a more powerful offer and something more comfortable for the seller to accept. The bottom line is sellers often just see contingencies as roadblocks to a sale.

And these days, they're far more likely to accept an offer with fewer contingencies. or none at all. Okay? However, though, keep in mind, removing contingencies can, it puts more risk on your side. So consider that, what the risks are. And if you're willing to accept those, and if you're not sure and you're working with an agent, consult your agent before making a move like that. But if you really want the property, that just might be what's necessary to win.

Increasing your earnest money deposit, that can strengthen your offer too. It can convey that you're serious about the transaction and you're willing to put your money where your mouth is. And also just be flexible, be willing to compromise. Like, with something like closing dates. You know, some sellers may want to close quickly and others may want to hang out for a while because they don't have any place else to go. They might even want to lease the property back for a while after you close.

So enter the deal with an open mind. So that's five. Was to make a good offer. Number six, follow up. So we know the fortune is in the follow-up. We talk about that frequently here. And under normal circumstances, when you follow up, you want to hold your cards essentially a little bit closer to the vests.

Because you're negotiating, right? You don't want to look desperate. You don't want to look eager. You don't look like you're drooling. You don't want to like you need it. You want to play that reluctant buyer. That's what we do. But this is an abnormal situation.

This is a bidding war. So if you really want the property and you've got competition, you're not negotiating so much against the seller as you are bidding against the prospective buyers. And as much as you're negotiating the best possible deal for yourself, because of course you want that, you're also seeking the seller's approval to choose you over the other buyers. And so under these competitive circumstances, you've got minimal leverage with the seller. So follow up on a way that appeals to the seller accepting your offer. even if you have to err on the side of looking desperate.

You know, make it be known that you really want the property and that you're serious about following through and you're serious about closing the deal. That's going to put the seller's nerves at ease or more so at ease. And placing multiple follow-up calls that can go a long way in accomplishing this.

Just don't be a pest about it. And that might feel counterintuitive to you. And keep in mind, this is in the environment of a bidding war. If you find yourself in one, then it's a different environment. It takes a different tactic. And this may be too much

for some personality types to swallow. Like, I don't have to buy their house. They have to sell me their house, whatever it may be. Because that's normally how we would operate. But if you're in a bidding war, do you want to win the bidding war or not? You may have to lose a bidding war or two

before this dynamic really sinks in. Because it won't be uncommon for you to be competing against a buyer who has already lost a few wars. And now they're willing to go the extra mile on this one. They don't want to lose again. So they might be able to go far beyond what you're willing to do. You don't know.

But that's not uncommon. And so let's see. A couple final words here on the follow up. Should you receive a counteroffer from a seller? Always respond. Even if what they've offered is like beyond what you're willing to do. Or if it's just they're out there in fantasy. Lenn.

Counterback anyway. Counterback with what you are willing to do. Even if it's the exact same price in terms of your original offer, if you're just countering back with the exact same thing, counterback. Don't let that ball bounce twice in your court. And then lastly, in the event you do lose your bidding war, it doesn't necessarily mean that all is lost.

There are a multitude of reasons why a deal can fall through. So if you've written a strong offer and you continue to follow up, you may be next on the seller's list. In fact, that's a really good tactic is, you know, when you do lose or just look at properties that go pending, keep your eye on those and be in line should they fall through. That really kind of, it's inconvenient to the seller. And if there's a convenient offer to snatch up right away and that just might be yours if you do it this way. Okay. And that's how to win a bidding war.

All righty, next up. What did the Fed say this week? It's important. And I'll let you in on it 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 cashflow 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 investors package. cash flow savvy.com. You do not have a money problem, merely an idea problem. Cashflow savvy.com. More ideas, less worries. Cashflow savvy.com.

All right. So, as you know, we show people here how to invest in real estate so they can escape the daily grind and they can retire early. We start the show off almost each and every week with that exact comment because that is our mission to create that option for us to retire early. At the very least, to escape the daily grind. Who wants to do that, right? And I've got to say, though, that there might not be a better time in history to pull off this early retirement thing than right now.

If you play your cards right. Here's what I mean. The Federal Reserve announced that it's leaving the federal funds rate at essentially zero. And this is good news for real estate investors. This is exactly what they've been saying they're going to do for the last year or so until the economy is kind of weathered the impact. pact of COVID-19. So I would say, what are we are with this virus thing? We're probably like an inning six, inning seven.

We're definitely on the back side of the thing. But we're not out of the woods yet, as our president says. And he's probably pretty accurate with that. We're almost there, though. I can see the finish line. I can see the light at the end of the tunnel. So they're going to keep the, they've promised, the Federal Reserve has promised to keep these funds really, really low.

until we get through this thing and show a little bit more signs of actual recovery. So no real surprises here, even with the economy seemingly kicking into high gear already. And that's thanks to the vaccinations and nearly $3 trillion in stimulus. So far, a lot more to come from what I hear. However, not everybody is winning. You see, when you consider unemployment at 6%, and many think that's closer to 10%, and an uneven household recovery and more than 2 million fewer Americans in the labor force than there were prior to quarantine. Jerome Powell, chairman of the Fed, said he'd be accommodating those in need with a favorable monetary policy for the foreseeable future.

And he's got the pedal to the metal even. He's going all in. And then the central bank is marching right there in lockstep with the Fed and keeping interest rates low too. So the intent of this move is to help those who need it the most. And I hope it will. I hope this works because I know there's a lot of people in need and I want them to be helped because they are there as to because due to no fault of their own. I want this to help.

But many that don't necessarily need the help are doing better today than they were before the pandemic. They are running away from the crowd. And I put together for you a very short list of the winners and the losers. and the losers. And then I'll give you a simple little action plan to keep you out of the loser's circle and assure that you join the ranks of the winners circle. Deal?

All right. So number one. Stock market investors, Wall Street, definitely winning. You know, as interest rates, these low interest rates are music to their ears, making stocks more desirable than the dismal rates offered on bonds and fixed income investments such as CEDs. That's really working for that. them. They like this song that's playing, but the music won't play forever. You know, we could see

serious stock market volatility in the near future when the Fed starts to show the inevitable signs of easing up on bond purchases. I won't go deep into that. But for now, stock market investors are winning. Number two, savers are losing badly. You know, low interest rates, they translate to low returns on money market accounts. low returns on CDs, certificates of disappointment. But it's the savings accounts that have largely felt the brunt of lower rates. You remember those emails? Do you remember the email we all got?

We all got those in last March from our banks, informing us that they have slashed our interest rates due to the pandemic. Not that there was much interest rate there to slash, but they did. And they did really, really well. They cut it down to almost nothing. and all the while they proceeded to experience record earnings in 2020. Had a great year. You think they would have put those interest rates back, but they have not.

So when you combine that with Powell's desire for higher inflation, it's bad news all around for savers. They are losing, but they don't have to. And I'll let you in on what there is for savers to do in a second, just in case you know one. Because at the very least, you deserve to know the rule. rules. It's your choice whether you want to play by them or not, but you deserve to know the rules and then you can make your own decision, right? So I'll get to that in a sec. Number three, borrowers,

borrowers are winning. You know, whether it's home equity lines of credit or whether it's credit cards or whether it's even the United States government, as there's no bigger borrower than them. They're all winning. The cost of a home equity line of credit remains low. The Fed's decision to stay lower for longer means that interest rates on variable rate. credit cards is likely to remain flat as well. And, you know, if your credit cards have fixed rates, the Fed's announcement this week could be a welcome opportunity to find a new credit card with a lower rate or multiple credit cards with a lower rate.

You could try out Epicfastfunding.com, by the way, our sponsor of this show, and they could potentially help you out with that and potentially help you out with multiple credit cards as low as 0%. that's at epicfastfunding.com. But the borrowers that are really winning, they deserve a category all by themselves. So that's number four. That brings us to number four. That's the mortgageeers.

They are winning big. They'll say they're winning the most. Those that are borrowing money to buy real estate are really winning big. You know, the recent pullback in 10-year treasury yields means mortgage rates remain in the refinancing zone for, procrastinating property owners, yours truly. So I'm refinancing a bunch of stuff right now. I'm like, you know what?

Let me take advantage of this right now and thank goodness they just drop those rates a little bit. So for us procrastinators, there's an opportunity here. The windows open. And this also adds a boost of buying power for home shoppers in this ultra-competitive market. And here's why the mortgagers are winning more than the other borrowers and winning more than the rest. First is real estate. It's produced more wealth for more people than anything else on

the planet. And that's all because it has the for-profit centers. It's got appreciation, it's got amortization, it's got cash flow, and it's got depreciation. Not too many. I still can't think when I always say not too many because there's probably an exception out there that I don't know about. And there's probably an exception that you are screaming in the in the speaker right now at me. But I don't know another investment opportunity out there available to the average person that offers all four of those profit centers. So that's first. Second, with a minimal supply of homes for sale right now combined with frenzy-like demand for homebuyers. I mean, they're absolutely going insane.

And the real estate appreciation profit center, it jumped 7.3% nationally in 2020, when it's typically about 2.5% the average appreciation. But in 2020, jump to 7.3%. 7.3% and it's not slowing down. Now, some people might hear 7.3% and think that's not that big of a deal, right? Because they know that the stock market returned, you know, basically 12% in 2020, like 5% better. Why want to do real estate and do all that work when I could just sit there and put it in the stock market at 5%. Well, not so fast. Those that borrowed money to buy their real estate,

their leveraged return exceeded 35%. So that's three times that of the stock market. See? You just can't do that in the stock market. Now, yeah, but what about buying on margin? I hear all that all the time. They're not the same thing when it comes to the risk involved, not even close, right?

Leverage in real estate. It's there like it is in no other. asset class. So that's a big deal. That's 35%. That's a pretty good return. And then the third thing, with the Fed pushing inflation, the way that they are, they've essentially promised it. And he backed that up this week. Leveraged property owners stand to win the most. So if you're borrowing money to buy real estate, because the Fed is pushing inflation, you get a double whammy on your win. Because historically speaking, real estate has proved to slightly outpaced inflation. Actually, I just looked at the charts today.

If you look at the inflation, yes, it's slightly outpaces inflation. But if you look at the consumer price index, that's the real inflation. That's the stuff that we feel on a daily basis. I've mentioned, I think, last week, how Mercedes, her latte is up a dollar more than it was this time last year, being represented like a 20% increase. That's the cost consumer price index at work. That's the real inflation, what we feel. And just this, gosh, I just noticed that after I recorded that last episode, I should,

oh, I should have talked about this too. And, you know, when I go to the gym and I always get this peanut butter shake, it's delicious. But I get that almost every day. It's like $8.25. Now it is $9.35 in one year. That's real inflation. So when you look at that, you know, real estate is what can preserve the value of your dollar. So when they raise the price of your latte, you're in good shape.

All right. And here's the good thing, though, about inflation. It might suck there because the shake and the coffee costs more. But the good part about inflation is it also destroys your debt. It destroys the purchasing power of your dollar. But it also destroys the purchasing power of the dollar of the person that loaned you the money to buy the real estate. And it doesn't matter who loaned it to you or where you borrowed it from. It could be from a bank. It could be from a hard money lender. It could be from a friend or a

relative. It could be from a credit card. It could be from the sellers themselves and the way that we teach you how to do here. It doesn't matter. It's still a dollar and it's someone that gave that to you and you're paying them back in dollars, but their debt is getting smaller as well. So for the savers, and anyone else that wants to win big in this economy, you just got to do what the economy is rewarding people to do. I first got kind of tuned into this through Robert Kiyosaki when he would always, if you read the tax code, the government will tell you where to put your money. They'll tell you where you're going to get the breaks, right? And that's why real estate was such a big deal because the government doesn't want to build housing. Then if you invested in oil, then you got a bunch of kickbacks there because the government didn't want to handle all of that expense.

They wanted you to participate in that. I don't know how that's probably not the case anymore. But those are just examples. But if you look at what the Fed is doing and what they're rewarding, then it's very easy to tell what you're supposed to be doing. You're supposed to be borrowing as much fixed long-term debt as possible to purchase cash, producing assets like real estate. Borrow, and this is so counterintuitive for so many people, you want to borrow as much as you possibly can of fixed long-term debt,

get as much of that as possible to purchase cash producing assets. Now, obviously, you don't want to borrow money that costs you more than what the asset pays you. I'm not talking about that. That would be dumb. I don't want you to negatively cash. flow. But if that asset is paying you more than it costs you to borrow the money, that's what the type of debt I'm talking about. That's the type of borrowing that you should be doing. And if you do that, you're going to be the beneficiary of and you're going to produce wealth faster in this

inflationary environment and ultimately come out a big winner. And sadly, those that don't, those that ignore this advice, those that have didn't hear this information or don't know any better, they're going to lose the gap between the haves and the have-nots. It stands to expand over the next several years like we've never seen before, despite the higher taxation to the wealthy, despite the redistribution projects that are in the works, despite the proposed equity programs.

Despite the socialist movement, call it whatever you want, put the whatever label you want on it. Despite all of that, this gap is going to get wider and wider and wider. Because all of those types of programs, they feel good to your lower income population in the beginning,

but the long-term ramifications are not good. So with a total combined $10 trillion of stimulus on the table for 2021 alone, like we're not even halfway done with the amount of dollars we're going to print this year. The bottom line, if you want to be a winner, you're going to want to pay as much attention to the value of your dollar as you do your investments. And that's over the head of a lot of people, not you because you're hearing you listen every week. but what do you mean I got to watch the value of my dollar yeah well I last week I needed

eight dollars to buy my protein shake my peanut butter protein shake and this week I needed nine dollars because those eight dollars aren't as strong this week as they were last week that's what we're talking about so let's just I talked about a lot of stuff I don't want to bog you down in inflation stuff and confuse you we're just going to keep this simple this is the action to take just borrow money to buy income property and refi till you die in the immortal words of Mr. Jason Hartman. Real estate works right now more than ever. All righty.

So I've got the news for you. Plus the latest update on text marketing that you don't want to miss 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 ASA.

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. All right. In the news, everyone's talking about the economy. This thing's about to catch fire.

The U.S. consumer confidence hit a 14-month high and house prices jumped the most in 15 years in February. and Alphabet, Google's parent company grew sales, 34% to a record $55.3 billion and more than doubled their profits. Alphabet, which owns a thriving digital ad business, YouTube, and a cloud service was in a perfect position to benefit from more screen time. Its stock is up more than 50% since the Department of Justice sued it over monopolistic. Hold on a second. monopolistic behavior last October when they were trying to create a monopoly. That was much easier to say it that way.

Microsoft also posted strong results that beat expectations, but shares dipped because it didn't beat them by enough. The tech company recorded its biggest quarterly jump in PC shipments in more than 20 years. That's weird how stocks will drop when the company does really good. It just didn't do good enough. And then people get all emotional and pull their money out. Weird how that works. Starbucks, U.S. same store sales have returned to pre-pandemic levels. While traffic is down by 10%.

The average order has increased 21%. Ha ha. That goes right in alignment with Mercedes latte appreciation, I should say. Right? I said 20%, but the average order they said right here is increased 21%. That's right on the money. We found it. This is how you bring your business.

business back, you just charge more. JP Morgan expects all U.S. workers to be back in offices by early July on a consistent rotational schedule. President Biden reportedly wants to give the IRS an extra $80 billion to crack down on tax evasion by the wealthy and large corporations. Why do they hate the wealthy so much? They're going to spend $80 billion to crack down on tax evasion. I got to tell you, the wealthy.

don't pay their less taxes because of tax evasion. They do it through tax avoidance based on what's written in the tax code. It's much easier to tax the wealthy by just changing the code than spending $80 billion to crack down on trying to find them evading taxes. Because they're not. They're just following the rules. They're playing within the rules that they were given. Anyway, Biden also signed an executive order that increases the minimum wage for federal contractors to $15 an hour. Facebook revenue increased 48% last quarter,

but warned that growth could significantly decline thanks to Apple's new privacy policies. I think they'll be okay. And speaking of Apple, it reported double-digit sales growth in every product line. It also authorized $90 billion in share buybacks. They said the X-phone, the iPhone, the iPhone 10 has the X.

The iPhone 10 came out. They said, no one is going to spend $1,200 for a phone. This is the end of Apple. They've lost their innovation. They've lost their edge. All they can do is produce a phone and just continue to charge more for it. Well, people are still buying it. CES is returning to Las Vegas in 2022.

Tesla said the market value of its Bitcoin holdings is $2.5 billion. It invested $1.5 billion in quarter one. Probably should have put that in the crypto news, but it's a headline here in the regular news. What was that? In six months, they turned... One and a half billion to two and a half billion? They made a billion bucks. That's the crypto thing.

We've got to start talking about that more. Wing, an alphabet subsidiary is delivering Girl Scout cookies via drones in Virginia, putting the Girl Scouts out of business as well. The robots are on their way. Doritos and Cheetos announce a face-off to determine who has the hottest chip. The two brands, which are both owned by Frito-Lay, are letting fans choose which chip is the best,

according to a recent press release. Voting will be held on Instagram and Twitter, where fans can use either the Team Cheetos hashtag or the Team Doritos hashtag. Who's got the spiciest chip? I like it. Too bad I'm not on Instagram anymore nor Twitter. I trust you guys will vote correctly. Rudy Giuliani's son, Andrew, is closer to the yes than ever on his run for New York

Governor after the FBI raided his dad's flat. Yesterday actually only gave me more confidence that running is the right path to be perfectly honest, he said. Andrew Giuliani running for New York governor. Federal investigators, by the way, if you didn't hear it, execute a search warrant on former New York City Mayor Rudy Giuliani's home, Wednesday, seizing electronic devices, including laptops and cell phones as they investigate whether he violated the law by lobbying the Trump administration on behalf of the Ukrainian officials. 2019. They just will not let the Trump-Russia thing go, will they? They haven't found the piece of evidence to support it. We went to court and they decided they didn't have any evidence, but they're still digging. They are obsessed with that relationship. Anyway, Fox News, Sean Hannity will sit down for an exclusive one-on-one interview with former Olympic athlete

turned California gubernatorial candidate Caitlin Jenner. Yes, they got enough signatures to recall Governor Newsom from California, and Caitlin Jenner has thrown her hat in the ring and is going to run. So this interview, it'll take place in Malibu, California, and it will mark Jenna's first national television interview since announcing her candidacy. And Jenner will discuss her bid to unseat Governor Gavin Newsom as Governor of California, as well as her thoughts on the current issues facing the state, including recent COVID-19 restrictions and the rising crisis.

Ryan rates. This will give the woke left an opportunity to redeem themselves on just how woke they are. But don't hold your breath. They don't care about transgender. Nope. Don't care about them at all. Only if they vote Democrat, do they care. It's another blunder on their part actually happened this week when they again demonstrated how mean and nasty they are and how hypocritical they are. that everything they say that they stand for, it's a lie. And then this is not just all proven. It's proven on a weekly basis, but they did it twice this week.

After their stunning personal assault against Senator Tim Scott, following his rebuttal to President Biden's address to Congress, Scott told Fox and Friends, it was shocking to hear intolerance coming from those who say they want to end discrimination. The Democrats, they just need to stop referring to their party as the party of love and tolerance, because they are anything but, right? I don't think it would piss people off as much

if they didn't position themselves that way and then actually do the opposite. Anyway, this week in crypto. The cryptocurrency Ethereum hit a record high of $2,714 yesterday. Actually, it passed $2,800 for a little while as of the recording. And the spike followed.

Tuesday's announcement that the European investment bank will sell bonds on the Ethereum network with the aid of Goldman Sachs, Banco Santander, and Society, Hennaral. Plus, Visa announced it'll settle transactions using Ethereum earlier this month. Basically, Ethereum is getting big finances seal of approval, just like at Costco. There's nothing to be ashamed of if you're feeling lost here. Ethereum, it's the blockchain network that conducts transactions using Ether, the name of its cryptocurrency. In other words, no central authority controls Ether in the way the Fed controls the U.S.

dollar. That decentralization is what makes crypto crypto. So what can you do with Ethereum? You can run exchanges, you can take out loans, you can send Ether to family and friends, and more. Most non-fundable tokens, NFTs run on its tech also, like CryptoKitties digital cat platform, like the NFTs we talked about here in the housing market a few weeks ago. So if we zoom out some like Shark Tank's Kevin O'Leary think Ethereum will always be the silver to Bitcoin's gold.

Right now, one Bitcoin equals more than 20 Ethereum. In more Ethereum news, major investment bank JP Morgan expressed their belief that Ethereum is going to keep outperforming the world's number one crypto while some are preparing headstones for Bitcoin's grave yet again. Interesting that this is coming from JP Morgan because not too long ago, And actually from the very beginning, they've been very anti-cryptocurrency, anti-Bitcoin. The CEO leader over there at J.P. Morgan, the head honcho, actually threatened to fire anybody if they were caught investing in cryptocurrencies. And now J.P. Morgan is preparing to offer an actively managed fund, cryptocurrency fund. But weirdly, after that statement of speaking so highly of Ethereum, they're going to be managed. a Bitcoin fund to their private wealth clients as soon as this summer.

In either case, analysts at the bank said that the trend of the world's second crypto outperforming Bitcoin can continue as the competition in the crypto market heats up. And that is this week in crypto, but we're not done. If you're interested and want to hear the update of the webinar I was in today about the status of text marketing. Stay tuned for that. And if you found this episode valuable, who else do you know that might as well?

There's a good chance you know someone else who would. And when their name comes to mind, please share with them and ask them to click the subscribe button when they get here. I'll take great care of them. All righty. So that's it for our main show today. Stick around for the text marketing update.

God loves you and so do I. Health, peace, blessing. That's success to you. I'm Matt Terrio. Living for me. Yeah, yeah, we got the cash flow. Huh? Yeah, yeah, we got the cash flow. Yeah, yeah, we got the cash flow.

You didn't know, home boy, we got the cash flow. Hey, what's going on? So I wanted to break down as best as I can. What exactly is happening with text messaging for real estate investors? And, you know, are we going to be able to continue text blasting? So I think it's important to first talk about kind of how we got to this place. Prior to about a year and a half ago, we were considered P-to-P. So one, you know, a person texting another person.

And then a year and a half ago, Verizon was actually the first people that came in place and said, no, we need to, we need to recognize what's really going on. You're using an application to text a person. And we want to know who you are. And there's a lot of upsides and downsides to it. When Verizon did it about a year and a half ago, there were really no changes at all when they required everyone to use these. A to P phone numbers. They really just said, okay, you have to use these A2P numbers, and we're going to charge you is like 0.002 cents or something like that, two tenths of a penny additional for using these

phone numbers. The differences right now is that AT&T and Sprint, everyone expected them to do the same thing, like to say, okay, you got to use these ATP numbers. We're going to charge you a little bit. But they really threw a monkey wrench and everything. It went in January they announced, no, we're not going to be anything like Verizon. We're going to actually require you to register your business in order to use these A2P numbers. And we're going to assign you a trust score.

And we're going to monitor you. And the reason for that is really pretty simple. They want to stay in business. Right now there's signal and what's up and all these other messages. messaging apps. And, you know, right now, I don't know if you're like me, but I ignore pretty much all my phone calls unless it's somebody I know because I know it's spam. It's getting out of control. And the same thing is starting to happen with messaging where it's, you know, you've got to check your messages and everybody still text their messages, but it's going to get

to a point where if it's all spam, we're going to be switching to these other services. So that's why AT&T and, you know, T-Mobile Sprint, I think they're kind of smart, actually. They're like, We want to stay in business. So they're saying that you're going to have to register. So that's what's going on. And let's break down exactly what that means. So this is a little bit about the A2P 10 DLC numbers. You can go through this later, but essentially we're being required to register.

So what does that mean, first of all, registering? It doesn't mean you can create a fake email address and register. No, it's like the legit process where they want your EIN, they want your business, identification number. It's like the whole nine yards, not only for the business, but also for the phone number. And like, there's no way around this. You're going to have to register. So you're going to have to put all this information out there. And not only do you have to register your business and yourself as the business representative, but you're also going to have to register your messaging content in a campaign. So if you have one campaign type for, let's say, employment reminders,

That's going to be one campaign that you register. If you have another campaign for like cold outbound messaging, that's another campaign type and so on. I don't think that that's going to be a huge problem because all the campaign types are going to come back to your company. So basically, if you get screwed in one campaign type, I'm pretty sure they're going to be like you're spamming people. We're going to kick your entire business off. So let's circle back to what a trust score is because I really think that this is at the heart of everything. Think of it like this. Like in the old days, you could set up an email and you could send a million emails out to the whole world and spam to death everyone.

And there were really no consequences and nobody, nobody had to do anything. Now try doing that. You'll be stopped like right away because all 100% of your emails are going to end up in somebody's spam box. Well, it's actually more strict than that with what the phone carries. careers are doing, they're going to be identifying all phone numbers in your account, all your marketing different messages, all your messages, period, to a business, to your business, and they're assigning your business a trust score. And if your trust score is, they're going to assign that trust score to you when you register. And this is something interesting. It's not like

your trust score is going to drop down and more, more of your, you know, your text messages are going to end up in some spam folder. It's actually, they're just going to shut you down. So it's like you got this big gold trust score. And then from my understanding, at least from what they're saying at this time, is that if they recognize you as a spammer, your trust score is going to go to zero. And they're going to, they're not going to let any of your messages go through at all. So, yeah, pretty big deal here.

Now, as you can see here, I, This is all in the future. So none of this has taken place yet. This is a big question. When is it going to happen? Well, it's actually supposed to ready take place. But this is a huge deal. And Twilio and these other folks are still working things out with the carriers and the whole

registration process. So currently you cannot register through Twilio as a, but that's going to probably be changing here real soon. And I expect within the next month you're going to be able to register. And then within two months, I expect some of this to start taking place. So bottom line, business as usual, but expect this to be happening here real soon. So what do we have here? I expect that we're probably going to be falling into this mixed marketing use case. When we register, we're going to have a trust score between 26 and 65, which means we can send to T-Mobile.

10,000 messages a day to AT&T, 60 messages per minute. And I should clarify, I don't think it's messages, it's actually segments. So a segment is 160 characters. So if you have a long text string, that would be two, three segments. But the bottom line is that probably won't be a huge limiting factor for most people. But the problem now is, and I've said it before, but I just want to make sure you understand, is that before you could burn a phone number, right? So we rotate phone numbers.

We rotate messages to try to be like, if a phone number got screwed, it'd be like, who cares? Let's switch to another phone number. What's happening now is that they're going to give you, you know, everything that you see right here. But if you screw up on one phone number, you're gone. Like, I don't know how strict it's going to be, but that's their intent is to stop spamming. And just like right now, if you have in Twilio, it's a 3,0007 error code basically means a carrier filtering. So the carrier recognizes that you're trying to spam and they start restricting that phone number.

So at the beginning, you might get 100% deliverability on that phone number. And then the more you send out, you start noticing you're getting less and less. deliverability on that phone number, well, that's carrier filtering. And that's all they can do right now until that phone number basically no longer works. So you just get another phone number, right? Well, what they're going to be doing in the future here is if one of your phone numbers starts like carrier filtering, they're not going to just get rid of that phone number. They're going to get rid of you as a business. So that's not good news. The good news is that there's a, I don't want you to get confused because there's this low volume mixed use case, but there's another use case that

isn't here, which is like extremely low volume usage as a business and you don't have to register at all. So maybe I should have started with this. If you're sending very few messages out a day, you don't have to worry about any of this. You can continue with business as usual, pretty much forever because they don't actually, no one's going to make you register. Now, what is that magic number? I don't know. I've asked. And I got. a wink wink we think it's going to be 500 segments per day so essentially if you send out less than 500 segments a day they're not going to make you register uh that's a known at this time but that's kind of kind of makes sense in that you know twillio is a billion dollar company no one wants to

spend a lot of time on tiny tiny businesses people you know just sending a little bit out so So let's say that's true. $500 really, though, is not a lot if you want to get like serious business through texting. So I think I've been in that horse to death, but if you have any other questions about this, you know, feel free to reach out. The other kind of bummer to all of this is the cost is not that bad. So ignore the $200. The $200 is for CSP basically a, I think lead Sherpa, roar, launch control, like those,

type of big texting platforms, they're going to have a 200, which is obviously nothing. For you as a small business, you're just going to have to pay $4. And then this $10 per month for your actual campaigns. Those are both tiny, though, in comparison to this 0.003 cent. That is, and it looks like unregistered, so meaning like you're a small business, that's 0.004. So that actually represents a good chunk of change. If you think about sending a lot of messages, you think of your current phone bill and then increase that 30%. That's, you know, that's significant.

So, yeah, so anyways, here's some key points. I do want to stress that the carriers have, they had a date in mind for when this filtering was going to take place, basically. Because right now they're filtering the phone numbers. You're not filtering your trust score as far as like your registered business. Your trust score is you violate some, you send some spam and they're like, boom, you're gone. They haven't started doing that. They're going to start doing that, though probably within the next month or two. So what can you do about it?

I think this is the most important thing. I'm actually kind of inside. I'm really happy about this taking place. texting has gotten out of control. And I think overall it's going to be good for the industry. So what can you do? Bottom line, I'll just go through these. So first of all, focus on the quality of your messaging.

So instead of sending out 10,000 horrible text messages, now you're going to have to actually be, one, super smart about what messages you send. And then two, how many people you send. that message too. So really filter down your list from just say every single person with equity to do really some good point in this stacking where you're looking at not just how many lists they're on, but what are the actual distress points and reaching just those really few unique great people. So that's one. Optimize you and test your text messaging campaigns. What I would

do, this is what we're going to do, is set up a small business. probably not even register it because it'll be so small, and test out a lot of different messages in that platform, or in that workspace where we're going to try out different words and different things. And at this point, we know we really have a good idea of overall we have a 92% deliverability rate. And so I know that there's this 8% that are still getting filtered. And we're really honing in on what are the words and what kind of things makes the carriers start filtering that. But if you're unsure, set up another workspace, another testing place where you're not going to be potentially harming your trust score by testing different things out.

And really make sure you're not sending out spammy words or anything that carriers will consider spam. And it's really easy. Go to your Twilio log or whatever platform. you're using and look at they have an insights report and look in the errors and see which ones are showing up as a 3007 and check to see oh that message was blocked that was message now the carriers don't want you to exactly figure it out so it's not like you can send one text message out because they'll let some things through it's like this hidden black box where they don't want you to know their secret code to like this is what we're filtering this is what we're not so you're

going to have to send a significant amount, but eventually you can learn of what words to stay away from, what frequencies to stay away from, how many times can you message somebody without the messaging you back and things like that. So that's number two. Consider limiting all follow-up text messaging campaigns. So this pains me because I really love follow-up, but I do think it's important to not take huge risk until we really see what's going on. in, you know, my current campaigns is we text the person, are they interested? And then even if they don't respond, we have this like year-long campaign following up with them and all this other stuff. Like, we're going to be getting rid of that just because we feel that there's that risk that some of those follow-ups or may hurt our trust score or may make us put in that category of being spam.

And so we want to just eliminate that. Switch to toll-free numbers. That is a very short-term play, I feel. One, there's only so many messages per minute that you can send through toll-free numbers. Two, you know, this 10-DLC requirements are probably going to come into play with these 800 numbers sooner or later anyways. and three, yeah, the whole idea of texting is to make it feel personal, and I don't really feel like this 800 number makes it feel very personal. So, yeah, very, very short-term, but that is an option.

I would say most importantly, look at alternatives to text messaging. If you're not doing cold calling, get on that. If you're not doing direct mail, you know, make sure you've got your Facebook, your Google ads, you're retargeting. start exploring new marketing tactics. So that's what we do at GoFer Close is we're really just about multi-channel marketing. This podcast is a part of the C-suite Radio Network. For more top business podcasts, visit c-sweetradio.com.