Epic Real Estate Investing - The Future of Turnkey Investing: Embracing Manufactured Homes | Dave Lundgren | 1301

Episode Date: May 2, 2024

In this riveting episode of the Epic Real Estate Investing Podcast, Mercedes Torres sits down with Dave Lundgren, a true titan in the turnkey real estate realm boasting over two decades of expertise, particularly in modular and manufactured homes. Together, they delve into the burgeoning trend and enduring promise of modular homes as a solution to the pressing need for affordable housing. Their spotlight on Texas' real estate market, nestled snugly beside Austin, illuminates the remarkable growth in this sector. Join them as they unravel the myriad benefits of modular homes, from slashed maintenance costs thanks to cutting-edge construction techniques to the peace of mind offered by warranties. But that's not all—get ready to explore the tantalizing prospects of robust cash flow and substantial appreciation potential. Yet, amidst the excitement, they also offer a balanced view, shedding light on factors like Texas' property taxes and the higher down payment hurdle for financing. Mercedes and Dave are on a mission to empower investors to seize the wealth-building opportunities inherent in real estate, particularly in areas experiencing explosive population surges. Their message is crystal clear: don't let indecision hold you back. Instead, harness the power of real estate as a potent hedge against inflation and unlock your path to financial freedom. Ready to take the plunge? Press play and let the journey begin. P.S. Whenever you're ready to go deeper and further with your real estate investing, looking into my partner program to help you get your first deal might be the move... take the first step here for free 👉 https://epicearnwhileyoulearn.com/ Sponsor: Baselane - Banking Built for Real Estate Investors Learn more about your ad choices. Visit megaphone.fm/adchoices

This is Terio Media. And I tell everybody that $50,000, do something with it. Give it to somebody that Mercedes is connected to or invested in real estate. That's my bias because sitting on cash and she had just been sitting on cash and just watch inflation eat away her cash and she's like, I'm tired of this. I want to get back into real estate. So do something with it. 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. Let's go. Hello and welcome, welcome to the epic real estate investing podcast. My name is Mercedes-Torres. I am lucky enough to be partners in crime with Mr. Matt Terrio, the guy who created the epic real estate empire. I am back in the studio once again in Las Vegas, Nevada, and I am so excited

to bring on a very special person. I've shared before, it is no secret, that I created cash flow savvy our turnkey division by accident. You know, I was doing real estate for myself. And as I started to grow, it just became my mission to help educate our world. As cash flow made such a difference for me, I just wanted to share it with everyone. So I'm constantly exploring and sharing just innovative strategies and insights to help you thrive in the world of real estate investing. So this week, I invited to our show a seasoned veteran in the real estate industry, boasting over two decades of experience with a keen eye for opportunities and wealth of knowledge in the space of turnkey real estate. Now, my guest has established himself as a leading authority in the field, and I am honored to call him my partner.

And, you know, he's always in the forefront of, like, fascinating trends. And right now, the fascinating trend is the rise of modular homes. I don't think it's a trend. I actually think it's going to be around forever because our country's population continues to grow. And the demand for housing solutions has never been higher. Now, modular homes are oftentimes, they're constructed in offside sections and then assembled on locations. And they're an emerging game changer in the real estate landscape.

So what exactly is a modular home you might ask? So I just brought the expert to tell us all about it because he has a ton of experience in the short time that they've become the thing. So without further ado, let me introduce and welcome to the epic real estate investing show, Dave Lundgren, who is a wealth of experience, a pioneer venturing in the turnkey sector and is specifically now in the turnkey modular home space. So Dave, please welcome to the epic real estate investing show. How are you, buddy?

Well, it's good to see Mercedes. I appreciate that introduction. It made me sound old, though. I'm like, too, that guy, too is that guy. But that's true. You know what? It's true. We're like wine.

We do not get old. We just get better with time. How about that? Well, I look at that idea. You look fabulous. So I hope for those people that are following us on the podcast as well as on YouTube, you'll see how fabulous you're looking. So without further ado, I'm just going to dive into just you.

Tell me a little bit about you because you and I have known each other for, I want to say, over a decade. And you've always been in the space of turn to real estate some way or another. So I want you to tell me about you and your experience. Yeah, I'll give you the quick version. So I left the Army as a chaplain in 2000 and came into, I would say, the educational side, more of what Matt does with the coaching. And that led me, I mean, I sold enough coaching and training back then. I was like, well, my goodness, I need to start investing. So really in 2004, started actively investing myself. And one of the individuals that I worked with in the coaching space, a big name,

you know, we were doing infomercials and heavily into the seminar world and the infomercials. But that gentleman came to me in about 2012 and said, hey, let's use my money. You're in Kansas City, which is a great market. Let's start doing turnkey and sell these properties to his students at the time. So I had dabbled. I'd done some investing, bought my own properties, but really dove in heavy to like you're saying, the turnkey space. And around 2012, 2013, did 100 of deals, got my hands dirty, probably did 150, five fix and flip deals, and inside of 18 months. And that really transitioned me into selling the turnkey space. And I love what you said about the cash flow side of it.

And that's what I said as well. I'm like, I love real estate as an investment tool and a wealth building strategy. So why not just sell people training, but let's not. let's sell them the actual assets, because that's really what a lot of times they were looking for. So that's the Reader's Digest version of the last 22 years, and I've just grown in the turkey space from development, buy, fix, and flip, and then like you said, more recently, addressing affordable housing issues, specifically in Texas with manufactured home, tiny homes, and modular, technically, but it's kind of ironic because I'm doing new construction in Kansas City. Those are modular, meaning they're building most of the product off-site, and then we deliver it,

bolted down. That really is technically what a modular home is versus manufactured, which is what people used to think about mobile homes. And then tiny homes are a whole kind of separate category. But they're all, people like to use those terms interchangeably. And at the end of the day, it really comes down to from a legal structure. When you take that asset, put it on the ground, put a slab, legally becomes real property, just like a single family. So manufactured homes is really what you and I've been chatting about in Texas to address that issue. of affordable housing because, you know, it's been skyrocketing, the demand, rent prices are so crazy high to try and get those investors near that 1% rule still in today's world. That's been

one of the ways we tried to do it. Yeah, fabulous. You know, I'm really glad, Dave, that you brought up the difference between the verbiage of modular homes and manufactured homes. So in a nutshell, the difference is exactly what between the two. Is it that they've been? don't own the land. They do own the land. Dive into that and educate our listeners about that. That's a great question. So a manufactured home, and what we call in Texas a land home deal is just like a single family residence if they bought it, you know, something in the Midwest from a legal standpoint, meaning they can get a loan on it. It's real property. They own the land and they own the structure. So that's a manufactured land home deal in Texas. A modular home technically is,

and it could be anywhere, right? They build. the majority of an off-site, and then they deliver it and bolt it together. So a lot of new construction, especially builder-grade new construction, really is modular homes that they're just bringing off-site and then just piecing together like Legos. A lot of new construction, again, at a builder-grade level, that is what a modular home. And then tiny homes, everybody's, I think, familiar with a tiny home. It's really just a box, right? So they're delivering, the legal term is chattel, right?

So they're just delivering a box. In fact, the same model that we're using in Texas is what does Amazon, everybody see these Amazon houses, it's that same kind of thing. So that chattel, that's the legal term for just the box itself, the asset, you don't own the land, and we sell those as well, just like an individual little cash box. And you can do the same thing with a mobile home. So if you didn't attach the mobile home and then the mobile home was just sitting on the land and you didn't own the land, the legal term for that would be chattel as well. So there's really no legal difference between a mobile home sitting there and a tiny home sitting there if you don't own the land.

Got it. Okay. Well, that's fabulous to know. So for other, the conversation that we're going to be having because we have an amazing product that your team is providing. We're going to talk about the manufactured home. Is that accurate? Awesome. That is accurate. Okay. Fantastic. So these manufactured homes that your team is providing for us are phenomenal because they are assembled offsite and brought to this piece of land. and it is a brand spanking new home that is located in Texas. So when this manufactured home is assembled on this land, and one of my clients is interested in jumping into one of these homes,

they are owning the home as well as the land. Is that accurate? That's accurate. So they get an appraisal on it, title work. Yeah, get a loan, all of that. I love it. talk dirty to me because that's exactly what I want to know. Okay. Legal deed. Yes. I love it. Okay. So you get a legal deed. It's an actual home on a land that

my client is buying, owning, and we are doing the whole exact turnkey model that I've been doing in my 10 markets. We're getting to do this in Texas. So let's talk a little bit about Texas, first of all. And then we'll dive back into this manufactured home. We'll talk about the benefit, what it looks like, what the numbers are, because at the end of the day, Dave, that's all everybody wants to know is why we want to jump into a brand new product like this. Tell us about Texas, first and foremost.

Well, I mean, I think the majority of people understand Texas is one of, the growth has been explosive for years, right? That's projected. The last article I read said they're still projecting, and even despite the massive growth that Texas has had, 65% population growth for the next decade. So it's exploding for a lot of reasons, climate, political, whatever.

So Texas has been growing massively. We happen to be just outside of Austin. Austin, Texas has been the most explosive city inside of a state that's been exploding. So what we've done is we're just to the west of that, typically with these land home deals in an area called Horseshoe Bay, not exclusively, but typically, because it's a recreational area. There's a nice lake there, and there's multi-million dollar homes. And so what we're providing is a service-based kind of that blue-collar solution for affordable housing in an area that It's got explosive growth, like you were saying, the appreciation of the land alone near Austin, Texas. It speaks for itself.

So anybody can research and Google why Texas has had explosive growth. And what we're doing, again, from a high level, a lot of real estate I sold, I use of Warren Buffett quotes when he talks about cash flowing assets because he talks about that a lot. But Warren Buffett himself has seen the trend of affordable housing because that's really what we're solving for in Texas. And Warren Buffett, a lot of people don't know. the largest manufacturer of mobile homes, Clayton Hoveett, and his company own that, right? 21st century mortgage is one of the lenders. He owns that as well. So they provide lending.

So a guy like Warren Buffett who sees trends above affordable housing, he invests in and around this manufactured home solution because he sees the trend towards affordable housing. So that's all we've really done is Austin, Texas is so crazy expensive. can't really make something cash flow for your investors there. And we don't really want to bank on just an appreciation speculation. So how can we provide affordable housing for that blue-collar person that wants to live in a nice area? And that's really what we've done. Got it. It's amazing what you've done because the population is growing like Matt, not just in Texas, but in many of my

key markets. And a lot of the people moving to these states are people that are leaving California and have left New York, now are leaving Florida. It's crazy to be able to afford to live in these places. So families are moving to these locations. And what I'm finding is that the rental population for these properties are crazy fast. Like normally it takes me, and I always kind of quote, that it takes me 30 days to tenant a property. We're tentating properties in like five days.

because people are wanting to move into these brand new manufactured homes that are gorgeous. So, yes, I'm on board. Besides that, I did some research on Horseshoe Bay before you and I hopped on our conversation here. And that is an absolute growing market. It's right next to Austin. It's like not even 20 minutes away. And it just has so much to offer. So, I mean, I think you're on to some.

something huge, Dave. Awesome. So let's talk about, you know, I'm not a huge fan of appreciation. Whenever I provide a pro forma, I'm very conservative on appreciation because, let's face it, Dave, none of us have a crystal ball. We don't know what's going to happen. I mean, we can go off of what history has done in the past, but it's just speculating. So I don't account for appreciation a whole lot, but I don't ignore it either. So what are you foreseen in appreciation for these manufactured homes. I love that. And I love that conservative approach and it speaks to the integrity of the way you sell real estate, which is cash flow. It's a name, right? Cash flow, because that's really what it's all about. And regardless of what the market is going to be doing,

if you've got that asset that's cash flowing, I love that. From a broad 50-year perspective, right, because we're still on a currency, they're pretty more money, everything's going to go up. That's just the economics of being on a currency versus real money. So long term, we don't know what's going to happen the next five years, but 50 years, everything's going to go up, including houses. But from an appreciation standpoint, I like that approach of we could even look at Texas and we can look at Austin. It's been explosive. I certainly wouldn't tell anybody and project that what we've seen the last five years. I wouldn't tell them that's what's going to happen the next five years because we really don't know. So we like to focus on that cash flow as well. And like you were saying, the rent demand is

so high there that we're not quite at that 1% rule, but for a brand new asset with a brand new house and a brand new tenant, we're pretty close to that. Meaning, if we're in that $180,000, $190,000 range, we're probably about a $1,700, maybe $1,800. And so that's really what we do focus on as well. It's just that kind of cash flow. Buy it for the long term. Buy it for the long term wealth. Don't be thinking you're going to buy this thing and flip it in a year because that's not overpitching and training. For sure. I'm not a fan of fixing and flipping as much as I am of buying and holding. You know, people ask me, how long do you hold your real estate? And my answer is always forever, you know? So, yeah, this is a buy and hold strategy for sure. Let's talk about

property taxes. One of the things that turned me off about Texas, you know, years ago is the property taxes. But yeah, you are just shy of the 1%. But you're pretty high up there in comparison to a lot of my other markets that have kind of dwindle off just because everything's rising and rents aren't quite catching up as fast as I see in Texas. So tell me about just the property taxes in general for Texas. Yeah, it is a little more expensive. Again, I live in Kansas City, Missouri. Taxes are much cheaper there.

So I wouldn't pitch anybody, hey, Texas is amazing from a long-term property tax. But speaking of taxes and you and I talked about this a little bit on the tax income tax side of it. And I'm not a CPA. I'm not a tax attorney so that they'll take this as any advice, but you can look up or talk to your CPA or tax expert about section 128 of the IRS code that specifically talks about bonus depreciation. And essentially what that means is a lot of people are familiar with it from a commercial standpoint. You can take your 27 years on a residential and you can sometimes accelerate that. Well, look up section 168 or talk to your tax expert about it. But this specific asset class with a manufactured home, you're able to,

depending on your facts and circumstances, greatly accelerate that, and sometimes even that take all of that year one. So that's potential. Sometimes the laws are changed at the federal level. But again, from a tax standpoint, we've had investors and invest in our assets simply because of the tax benefits and that bonus depreciation that they were allowed to take year one. That tax benefit for some folks alone is worth it. Again, go check with your tax expert on that.

The property taxes, not a really amazing selling point at Texas. but income tax, depending on your facts and circumstances, can be beneficial with this asset class. Yeah. I mentioned that for a reason. And again, we're always throwing out the disclaimers. You know, Dave and I are not tax experts. Everyone has a different tax bracket. So it's really, really important.

But you did educate us on Section 168. And that's enough information for you, the listener, to just do your own digging and even share that with your tax professional. But I will say, despite that, Dave, these properties, are cash flowing amazingly well. So, okay, so we talked about, you know, yes, the property is built offsite. There are some benefits to it. I want you to just kind of give me a little bit of the pros and cons of a manufactured home

on, you know, especially what we have going on as far as turnkey. Give me a couple of pros and give me a couple of kinds. Yeah. And back to the section 168. We have a tax attorney who has written an opinion letter who we will share that. So then you can share that with your own CPA. So we'll provide that as a, hey, read this. This is an opinion letter.

And then you share it with. So just to button up that last conversation. Pros and cons. Pros, but again, I've, you know, I've owned all sorts of different assets from A class, C class, made money and all of it. Having a brand new asset is nice. I mean, you've got a builder's warranty, right? CapEx items are all brand new. I was actually born and raised in Salt Lake City, Utah.

And it was ironic because I lived in a nice area. But right across the street, there was. was a mobile home park, right? And this was back in the 80s. There's kind of a stigma about that, but my grandparents actually lived across the street from us, and back then had a nice double-wide. Now it was like 1980 to 1990. And even back then, I was impressed as a kid some of the quality of those manufactured homes back then. Now, some people who had have a stigma about mobile homes, if they walked in and saw some of the new manufacturer homes, it'd be made. So the quality in the construction of those is amazing. And again, your Kappex items are all brand new. So you're deferred,

is there? Let me just interrupt you there. Where a second, these do not look like manufactured homes. These look like a brand new single family residence. I picture in my mind a mobile park. These do not look like mobile park homes. They just don't.

They're brand new. They're brand new porches, brand new roofs, brand new everything. And it's like, okay, so I just needed to clear that up, Dave, because I get this vision of mobile park and it's not pretty. So in case you have that same vision listener, I just want to clarify that is not the case. Okay. Yeah.

To further that point, not just the asset itself. It's nice. It's amazing these new manufacturer homes, but the location. So you can look up horseshoe by anybody could. And again, these are not sitting in a mobile home park, right? So there's not 20 of these things. We're litter in the neighborhood. Somebody owns their own lot.

They own their own thing. And they're living on a nice street. So again, some people have this vision of, oh, mobile home park. That's not what this is. This is a mobile home or a manufactured home that happens to be sitting on their own lot in a regular type neighborhood in a nice part of Texas. And so some people again have this vision of, oh, mobile home parks and I don't want to be a slumort. These are amazing locations and beautiful places that people just want to live. And they, as a comparison, right, I mean, a lot of people are familiar with your markets and in the Midwest, you know, $180,000 house.

They kind of know what neighborhoods are going to be in. And there's nothing wrong with even a C class or B class neighbor because I've owned a lot of properties in those neighborhoods. This is just a different neighborhood and a different, I would say, asset class. So that's an upside to it. Yeah. Let me just add to that, Dave. We are creating brand new neighborhoods.

That's, I think, an easier way to explain how this is being laid out because it is not a mobile home park. It is a manufactured home being laid in a brand new neighborhood that is being formed as we sell these assets. So huge, huge difference. And just if we can picture that. And when you decide to embark on the journey of taking on a new manufactured home with cash flow savvy, you're provided with pictures and you can conduct your own inspection as you should with any piece of real estate that you buy. So you're able to kind of see for yourself and have your inspector take a video of what the neighborhood looks like. So that is really, really. Yeah, even outside of Texas, that's the big

benefit. Again, been in around the turnkey space, working with somebody like you who's already vetted the markets, does your due diligence. I mean, everybody should do their own, but you've already done that first layer for folks, which is a huge benefit because I would never, I would never kill somebody, especially that's new to investing, to invest outside of their market unless they're going through somebody like you or Matt educating themselves and somebody who has that extra layer. So that's a huge piece of it. And you and I both, though, at the end of the day, there's only, once they deploy their capital, there's only two things to take money out.

Maintenance and vacancy. That's it. So we just obsess with that. So maintenance, deferred, brand new asset, vacancy. Just put yourself in the mindset of somebody who happens to live in Austin, Texas, where the average house is about $750,000. So a $180,000, maybe a $200,000 house in Austin, in Texas is not a nice part of town, even if you can find something for $200,000.

So the mindset of somebody who just moved to that area, they're like, oh my gosh, all day long, I would love to move that. It's brand new. It's in a nice neighborhood. I'm not in scary areas. I'm out here in the suburbs a little bit. And I'm paying $1,700, $1,800, $1,900. If I was in Austin, I can't even find something for $200, $250,000.

I'm in a very scary part of town, the urban core, and it's going to cost me the same of my money. So the quality of the tenant you're getting, which is the other piece, a vacancy piece, you're just getting a much better quality tenant that is happy to have a new asset, not living in the scary part of Austin, if you will. Thanks for sitting tight while we pay our light bill. We'll be back right after this. Stop spending countless hours on busy work and focus on growing your real estate business and maximizing your return.

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Let's get you some more. Back to the show. You know, you tapped on all the benefits, and I honestly was harping on, what are the cons? Because I'm always trying to provide, like, both sides of the coins for our listener. And I personally came up with very little cons, but, you know, what would be a disadvantage of jumping into this turnkey manufactured home, which, by the way, is relatively a newer concept in our space of turnkey real estate.

So what would be advantage? That's a fair question. I would say the shelf life on these new ones are about 50 years, right? So the disadvantage would be in 50 years, you're going to have to rehab that. And you can rehab these just like, you know, you can do new paint and carpet like in the other home. A lot of people don't realize that. You can rehab a mobile home or manufactured home. But, you know, you buy a house in Kansas City that's 100 years old.

That foundation's there. It's not going anywhere. So if there is a disadvantage, you need to be prepared for in 50 years. You're making some major CAPEX expenses to that or bringing a brand new asset and place it again. So that's the one thing is you're not dealing with a 100-year-old foundation that's not going to go anywhere. If there's a shelf life, it's about a 50-year shelf life if you never rehabbed or did anything else with that actual structure. That'd be the biggest downside, I would say. That's not a bad gig.

I mean, holding an asset for 50 years, the average. person will hold an asset for a minimum of 12 years. But I mean, 50 years, that still gives another 35-year run. So that's awesome. All right. So I've heard you mention, we talked about the price point a little bit. Numbers are very, very important to us because at the end of the day, it's all about cash wealth. So let's dive into the numbers a little bit. I know we talked about the 1%. Let's talk about price point of our manufactured home. And what does the price point bring you as far as square footage, bed and bath count, and wits? I would say a range is 170 or 210.

And typically, the great majority of the time, we're putting a double wide and it's either a three or four bedroom, probably 75% of the time. And the current existing inventory, you only have four of these houses right now available. All of them are four bedroom, two bath. All of them are about 1,600 square feet. And all of them are in that $180 to $200,000 range. and the rents are 18,900. Those are the high-level numbers.

That's awesome. So my quick and dirty math, because I do it really quick and really dirty, will bring about almost a double-digit return, if not right at double digits. And then speaking of which, we also have a property management team that manages these assets for you. So for the most part, these four properties that we have available,

if I'm not mistaken, they're already tenanted with new tenants, with a one-year lease. Is that accurate, Dave? That is accurate. Okay. Awesome. Awesome. So basically, let's just break that down with a $180,000 asset. And we're going to talk about financing just because we're always talking about financing. I'm huge on making sure that everyone maxes out their financing. But you can come in with a 20% down payment or a 30% down payment. Let's clarify that because I think we have a conversation about that just recently, right? Yeah, so that could possibly be a con as well because the best lending we have is 30% down. So you could maybe put that under the con because it's not 20% the lender we have, a 30 or a 40 year. There's really no advantage of the 40 year. So 30 year fixed, 30% down versus

20% down. But to your point, even if you do the math on that, you are in the double digits, right? Cash on cash, you're in that 12 to 14% cash. Yeah. ROI with those numbers and you can do your own mouth on that. The one thing we can do, we're legally, you know, full disclosure allowed to do this and lender's aware of it. Everybody's aware of it. We can buy down that rate from the seller side, meaning we can have several contributions if somebody came notice and said, oh, hey, the rates are a little bit higher on this, right? I have to put 30% down. My rates half a percent, maybe one percent higher from the seller side. We can contribute to get that rate down to where typically your folks are seeing in a 30-year

on other assets and other markets. Yeah. No, that's a valid point. Yeah. So we provide the buyer of credits to be able to buy down the rate to make the payment a little bit more affordable, if you will. And that in turn means more cash flow to our end buyer. But if we think about it, $180,000 home, you're going to need about $54,000 of a down payment in order to produce a 12% cash on cash return-ish. So, I mean, if we break that down, Dave, you know, if you have $55,000 sitting in an IRA or a 401k or, you know, your typical Bank of America or Wells Fargo bank account, I guarantee you're not making a 12% return on that money. And so if we break that down and you invest in a property that's going to cash flow, 12% ROI, I mean, that's just kind of a no-brainer. But that's my opinion.

Awesome. Okay. So with the financing piece, I know that a financing, for some lenders, manufactured homes is a big no-no. But we've been able to manage to find lenders that specialize in these manufactured homes, which do have the 30% down. I know, and I don't want to quote rates, but rates are just a slightly higher than a typical cost.

conventional loan, yet we have the ability to buy the rate down so it matches what a typical conventional loan kind of is. Is that accurate? That's accurate. Last week, yeah, the rate that was quoted, and again, you know, I don't want to date us, but the rate was about 1% higher than on a typical investment, and we did buy that down with the investor, brought it down on our side. So that's accurate. Yeah, got it. Okay. What else am I missing? What else do I want to tap on? Because I just think this is You know, we're on the forefront of, I don't even want to call it a trend because I don't think it's a trend. I think it's going to be a wave. And I think this wave is going to be around for a really, really long time. Specifically, in the market that you've chosen to plant yourself in, because it's right next to Austin and Texas is growing like wildfire. So tell me what, you know, what your past our clients have done. Give me an example of something that just transatlantic. inspired this last week that you sold real-time numbers? Yeah, it was in Horseshoe Bay, an investor. I think we ended up, the price was 180. We bumped that price a little bit so we could

buy down that rate, but her net was still that 180. She put 30% down. Her rate was low eights. We bought it down to low sevens. Rent was 1,800, and she bought it for $1,800. So she hit the 1% rule, which sometimes were able to do. But that was just last week. That was was the last contract we wrote on these. A gal who had invested in other rentals in the past, not with somebody like you. She had just gone on her own and had faced some challenges like people do that haven't vetted out at the property manager.

And you and I both know, like, the lower the asset class, the more important it is to make sure the team on the ground is doing the rehab right, doing the property management. She had just gone on her own and kind of gotten some trouble with that. So for her, it was the attractiveness of,

oh, A class, brand new, our team, because she didn't go through, somebody like yourself. So for her, she just looked in the marketplace and said, okay, for the same amount of money, that 170 to 190, what could I get, and made her decision based on that. And I tell everybody, that $50,000, do something with it. Give it to somebody that Mercedes is connected to or invested in real estate. That's my bias, because sitting on cash, and she had just been sitting on cash and just watched inflation eat away her cash. And she's, I'm tired of this. I want to get back into real estate. So do something with it. Put it in a cash flowing asset, the team the Mercedes

is vetted, whether it's text or something else, go put it into something that can generate cash flow for you. And long term, again, no guarantees on the appreciation. But it's just, I'm very biased. I've been around real estate enough to see what it can do. So do something with it, whether it's us or somebody else, just don't sit on it because cash is going to continue to get eroded away. inflation's not going anywhere and, you know, savvy investors are going to be doing something with it to make it grow. For sure. I mean, I always say, you know, parking your money in real estate, it's such huge hedge on inflation. I mean, if it sits in your bank account, it's just going to dwindle away. This is a running joke, but I'm a, I used to be a huge Starbucks fanatic.

And I would always get my skinny vanilla latte before COVID, my skinny vanilla latte was $3.25. Well, not even a year and a half, two years later, that same skinny vanilla latte is $5.75. So Mercedes doesn't go to Starbucks anymore just because I refuse to pay $2 more for that same latte. It just drives me insane. Anyway, same thing goes for real estate. You can park it in real estate and have it. And neither one of us have a crystal ball, like you said. But if you look and do your own independent research about real estate in Texas, the population growth,

supplying demand from a macro perspective, doesn't look like it's going to change. Again, do your own due diligence. But if you're just looking at supplying demand, population growth, creating that rental demand, Texas is a nice place to be. I love it. I love it.

Okay, Dave, so wrapping this up here, whenever I bring a guest on, I kind of always just ask the same question, just so that our listener can just take this information and make their own decision. but what would you say to that investor that is looking to get started or looking to grow their portfolio, but just are stuck and aren't making that move? What would you say to them to share your experience and your advice that got you to where you are today?

A lot of people say it and I've heard it, but it's true. Don't wait to buy real estate, buy real estate and wait. And that seems so cliche and simplistic, but that's reality. Look at, you know, don't take my word for it, don't take Mercedes word for it. Look at real estate the last 50 years, 100 years. When it comes to deploying a dollar and getting four returns on that, it's the only asset class you can do it. You can't do it with commodities.

You can't do it. Just stocks. So real estate from a macro perspective as far as growing wealth is just the best way to do it. Then start drilling down, okay, well, where do I place my capital? That's where your podcast, what you and Matt do can help people start to understand, then, okay, why the Midwest or why Texas versus California? Then from there, just make a selection because the reality is, in a year from now, that $50,000, again, inflation. If it continues on its pace, what is that $50,000 going to be worth?

Versus, if you just parked it in any piece of real estate that's producing cash flow, you're going to be better off. So do something, and especially in the election year, I've had some investors be like, oh, I've got to wait and see, regardless of who's in the White House, right? in the last 30 years, both sides of the aisle of it in the White House, doesn't matter. At the end of the day, if you're in an asset that's producing cash flow in a good market with a good team, you're going to be fine regardless of who's in the White House. So the fear of missing out and the fear of not growing your capital, hopefully that outweighs the fear of, I've got to make sure my capital is placed in the right place because regardless of who gets elected in November, Texas is going to grow, the markets that you're in and the teams you're with,

real estate's going to be there. The demand for affordable housing isn't stopping anytime soon. And that's really what we're talking about. That's what Warren Buffett is looking at. That's why he's investing in the same things we are. And affordable housing is a real challenge. And we're just solving for that. And by providing that solution for our tenants, we're growing wealth for your clients. I mean, that's what's happening at the end of the day. I happen to think that is a phenomenal solution. So, Dave, I cannot thank you enough for your time, for your knowledge. I always get something out of speaking with you, connecting with you. So thank you so much for joining us on the Epic Real Estate Investing Podcast. I would love to have you back in about six months to about

eight months so we can kind of report on what these properties are doing. Would you come back to our show? Yeah, that'd be awesome. I'd appreciate that. Awesome. I love that. Awesome, Dave. So to our listener, thank you so much for being a part of our education aspect of the Turnkey Real Estate Investing Podcast. If you want more information on our amazing Texas manufactured homes that are brand spanking new with a double-digit return, go to cashflow savvy.com. That's savvy with two Vs. Hit the contact us. You can download the Investor's Guide to Passive Income where these properties are in our brochure that gives you all of the information about these amazing properties.

And hey, if you learn something new, why don't you share us? Share us with someone that would love to learn a little bit more about cash flow and give us a five-star review because that makes a world of difference to us. So, Dave, thank you so much for joining us on the Epic Real Estate Investing podcast. And to our listener, I see you next week where cash flow is queen. Have a great day. Stop spending countless hours on busy work and focus on growing your real estate business and maximizing your return. Baselane is a comprehensive property management platform that caters to the needs of landlords and real estate investors by offering a suite of financial tools designed to simplify the management of rental properties. The platform provides features like dedicated banking services, automated bookkeeping, rent collection, and insightful analytics to help landlords manage their properties more efficiently. With Baselane, users can streamline

their rental property finances, automate various administrators' tasks, and gain valuable insight to make informed decisions about their investment. Head over to baselain.com slash Matt and sign up today for a free chance to win a $500 Amazon gift card. Sign up for free, no monthly fees. That's baselane.com slash Matt. Baselane.com slash Matt. That's B-A-S-E-L-A-N-E-com slash M-A-A-A-A-A-A-A-E.com slash M-A-A-A-A-A-A.

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 cash flow. You didn't know home world. We got cash low. This podcast is a part of the C-suite radio network. For more top business podcasts, visit c-sweetradio.com.