Epic Real Estate Investing - Turnkey Real Estate - Just Do It! |642

Episode Date: April 30, 2019

Interviewing our clients, most of them have one real estate message for you – Justo do it! This is the takeaway especially of those who suffered from analysis paralysis. Today, we are hearing the experience of a gentleman who went through it and with whom we first spoke 5 years ago when he said he wanted to try it on his own. Alex Ramirez was successful but he confesses that it was hard. Now, he is working with us on his 3rd property and he has a point of comparison. Learn more about your ad choices. Visit megaphone.fm/adchoices

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

Just to go over some basic ground rules of the show, I created this real estate investing turnkey podcast for busy people. Busy people just like you who understand the importance of real estate, they just don't have the time to do it themselves, or perhaps are too afraid to take the first step, or are just tapped out with time to just grow the real estate investing portfolio. So today, I invited a very special guest to our show. You know, I always say my guests are special because they are so special. They're so special to me because, well, once I start working with you, I just go all in with my clients. And I get to know them on a personal level. And that's what happened with Alex and Natalie. Alex, ironically, was referred to me by a friend of him. Alex is a full-time police officer in the city of Los Angeles. And he was referred to me by another full-time police officer that is one of my clients. You know, I always think to myself, what do they do,

sit in their patrol car and talk about everything under the sun except crime? So in this case, he confirmed that they do a lot of small talking and talking generally. And Alex called me about five years ago, and we did what we called at the time a passive income audit, where I helped them figure out what can happen and what he can do and how real estate investing, turnkey real estate investing specifically works. And Alex, very humbly and very nice, said to me, you know what, Mercedes, I don't think I need you. I think I can do this all on my own. It's not rock and science. I can do it. So I said, dude, go for it. More power to you. I've been there. I've done that. And I wish you the best on your journey. And that was five years ago. So fast forward to the beginning of the year,

Alex emails me again. I had sent out a property of the week and it caught his attention, but it actually reminded him that he and I had spoken before. And he said to me, it reminded me that you and I talked and you were way cool and I did it on my own and it sucked. So can we chat again? So we got on the phone again and long and behold, he not only jumped into one property, he's jumped into three. But what's so impressive is that he tried it on his own. And I'd have to say was successful at it.

So without further ado, I'm just going to let Alex tell you his story, his journey, and really allow you to get to know Alex and what he's done for him. So without further ado, Alex, can you hear me? Yes, I can hear you. Alex, welcome to the epic turnkey real estate investing show. Turnkey Tuesdays. Welcome. How are you?

Oh, I'm doing fantastic. Awesome, awesome. So let's jump right into it, Alex. Introduce yourself. Tell me a little bit about you, who you are and what you're all about. Thank you for having me, first and foremost, Mercedes. My name is Alex, Alex Ramirez. I am 32 years old.

I was born and raised in Los Angeles and California. And right now, currently, I'm working as a police officer. So I work in the area of Los Angeles. And, you know, it's a great job. I love it. You know, I work with a great partner. It's fun sometimes. It's challenging at times.

But overall, I love it. It's a great job. I've been there for eight years already. so that that's also a great thing. And, you know, I'm also married. I have my wife. Her name is Natalie. We both actually own our own agency or a home care agency.

So we're getting that up and running. It's called Motherly Comfort Home Care. And we pretty much focus on veterans, people with disabilities, and the elderly. Wow. Yeah, so she's mostly in charge of it. she's uh she's she's also works uh another job as well so she's a pretty busy we're both pretty much really busy and plus you also know mercedes i have my uh my investment properties as well here in california we will absolutely talk about that so tell me a little bit about i know

you are a full-time police officer you work for one of the largest cities i'm sure of of the United States, I would probably argue that. And then she is full-time something else. And in addition, she runs a home health care agency. Like, when do you guys have time to breathe, let alone think about real estate investing? Well, it's actually a home care, home care agency, not home health because of difference. Got it. So what is home care?

Home care is just pretty much where we help them out with daily live. daily living, for example, meal preparation, bathing, dressing, taking on to their doctor's appointments, medicine reminders, just pretty much helping them live a normal life on everyday life, just as they would. Wow, wow. I just learned something and thank you for your service. I had no idea that this business existed. Awesome.

So you guys have been married for how long? We've been married for three years, but we've been together for 10 years in total. And you finally mustered up the courage to pop the question. Yes, I wanted to make sure. I like that. Yeah, you are one of those analysis guys. Yeah, analysis for Alice. Analysis for Alice.

Awesome. So tell me, how did you discover Epic Real Estate and Cashwell Savvy? So this happened about four to five years ago. I was actually interested in investing in real estate, but I just didn't know how to do it or go about it. So I started asking people around some of my coworkers who had real estate. And I came across one coworker who had a property with you. And he told me about cash flow. And he said, go check them out, go online, give her a call and talk to her.

So I'm like, all right, cool. So I give you a call. I talked to you. but then when there was out of state properties, it just, you know, it just didn't, at me, to me at the time, didn't make that much sense because I'm like, I'm not going to fly over there every day to go to these properties.

And I was just like, oh, out of state. No, I want to do in-state, you know. And I think I came in there talking to you with a negative mindset about it. So I just didn't go through with it because I was thinking it's out of state. I don't want to fly out there. And then plus I didn't have the money. just yet at the time. So I just pretty much put it at the back burner and, you know, I totally forgot about that. And I ended up just doing my own thing here in California.

Yeah. So I do remember talking to you. I do remember you being skeptical, um, to a degree because you knew you wanted to do it. You didn't know how. And I remember I was super open. And I gave you the pros and cons. And I remember you said to me, you know what, Mercedes, I'm going to go try this myself. And my instant thought was, you're a police officer, you're a newlywed, you're going to go try it yourself, and it's going to be hard. Call me, call me when you're done, and I'd love to hear about your experience. So let's fast forward to that.

What did you do? And tell me about your experiences doing it yourself, because I know when you came into my office, after it was all done, you said to me, it's been hard. Yes, yes. All right. So, you know, after that conversation, I decided, you know, I wanted to invest in California. So I went and did my own research. I studied up on it.

I ended up, you know, I did work. I saved up all my money. I did a lot of overtime. So saved up a lot more money. Didn't buy no fancy cars, no jewelry, nothing like that. And I was able to finally purchase my money. own property, which was a fourplex. It was a multi-family home, and I was able to purchase that. I was able to get some cash flow from that, and I ended up saving some more money, and I bought my

second property. Same thing, did the same thing, repeated the steps, and then I ended up buying my third one. All three were multifamilies. And let me tell you, I was managing all those three properties, and it was hard. It was tough, you know, just trying to fix everything, getting those late night calls, and it was hard. Like, I remember listening to podcasts of landlords talking about all the, all the, all the negatives that they had. I'm like, I could totally relate to all that because that's how I felt. So it was, I mean, I'm not going to lie, it was becoming stressful.

So I had to, I was like, you know what? I got to sell the first property about. So I sold it. And I was, yeah, I sold it. And I had it for three years already. So I sold it. And I said, okay, I'm thinking about going in. to flipping homes.

I wanted to do that. But then I started doing my research and then I also dealing with contractors and everything. I'm like, oh, man, I don't know, and especially in California, because California homes are very expensive. That's relative. So tell me what was the price point of your properties

that you purchased? The Foreplex, that one I bought it for 360, but that was like almost four years ago. Okay, you bought it for $360,000. four units, and that was four years ago. Okay. Four years ago. Okay.

And what would be the value of that today? Because you sold it. So what did you sell it for? So I sold that for 500. Okay. And that was in two years. Ladies and gentlemen, that is typical California properties and California numbers. But you bought it at just the right time because you bought it at the low of the market.

So tell me about that. Did you buy it in pre-rehab conditions? Did you buy it already ready to go? What was that? It was pre-hap, so I still had to do some work on it. Nothing too major, but I mean, I did some work on it, some painting and kind of replaced a couple things. Got it. And did you do the work yourself or did you hire somebody to do the work for you?

I did the work myself, plus I hire somebody. So it was like side by side. I mean, I try to do some of the work as well to try to save up some money. Got it. Okay. Okay. So then go ahead, go on with your story. So, yeah, so once I sold the property, you know, like I mentioned before, I wanted to do flipping, but that the homes were already too expensive and then dealing with contractors and, you know, time is of the essence.

So I needed to make sure that because if project lasted too long, that would have been profit getting cut from me. Yeah, yeah. So that was out of the question. And so there I am sitting with this money that I have. and I didn't want to buy another property here in California because by now it's already too expensive. Yeah. So I don't know what happened. I don't know the stars aligned or something.

I received an email from you. And it was one of those like, it wasn't like directed towards me. It was just more like, you know, I had this property out here if you're interested. And I was like, oh, I remember Mercedes. I'm honored that you remembered me. Yeah. I'm like Mercedes, the out of state properties. And by this time, I already had knowledge about properties.

I knew about property management. I knew that, you know, I had more knowledge about it now. You know, and I also had the money now. Yeah. So I told my wife, I'm like, you know, I told her about you and how we talked about a while and she said, well, you need to email her right now. And I said, okay, fine, I'll email her right now. So that's what I did and you got back to me the next day.

And then I was like, let's sit up that phone appointment and let's talk again. Yeah, I remember when we talked again, you're like, you're actually calling me. I was like, yes, I actually call you. You book a call with me. I actually call you. So I called you. And then a little bit more to that, you actually came into the office with your wife. I invited you to come in with your wife because although she was in theory on the same page,

I wanted you to really understand the power of what both of you can do. So you came into my office. I had a whiteboard session with you. Tell us about your experience in that whiteboard session. It was like a mind blown. I was like, wow. I was like, that's amazing. Just the fact that the ability that you could buy properties out of state and make, you know,

by percentage why make more money than you can here in California. And just the whole process of it. It just, it made total sense. And I was, I came out of there just like an amazement. I was so excited. I was happy.

I was like, let's do this. But in the same time, I was nervous. Yeah, I understand that. Tell us a little bit about, so you said,

you know, you were excited. It was mind blowing. Just because you knew that the percentage that you were going to get back, although the numbers were smaller than what you're used to seeing here in California, you realize the percentage was bigger. So that, I remember seeing your eyes open. And your wife, I mean, Natalie was asking amazing questions. But tell me specifically, how did I help you see that? What did I do so that you saw what was possible for you? Oh, yeah. So pretty much you, you know,

you asked us about, okay, what's your goals? What is it that you want to accomplish within the year? And you pretty much went in detail. You wrote it all down on that whiteboard and even the little drawings with the little houses. You set it all up and you said, okay, if you were to purchase this amount with the month that you have, you'll get this many houses, right? And then once we establish that, then this is the percent you get, even though it was minimal every month that you were going to get. Yeah. But if you continue to buy, especially with the money that you have and you continue to save, that can accumulate. You can get more properties, which all that little bit that you get from each of those

properties will end up accumulating to a larger number, right, every month. Yeah. So it's important that we point out, Alex, and I mentioned this when you and I were sitting together with your wife. The cash flow number that you were getting, the amount of cash that you were receiving at the end of the month, let's just assume that it was $600 a door that you were receiving or a property that you were receiving. But you were only receiving a 3% cash on cash return. Where in the Midwest and in the South and with our cash flow savvy properties, you were actually receiving a 9%

cash on cash return, but you were only getting $200 a month. And what matters, and I think I helped you see that the cash amount that you're receiving, the $600 a month, that doesn't matter. What mattered is the percentage that you're getting back for the money that you're investing. So I think that's what was eye-opening for you and Natalia. And I see you nodding your head and you're saying yes. So for our listeners. You're explaining that very well, yes. Yeah.

So it was very important to me that you and Natalia understood that. And furthermore, I remember saying to Natalie, her name is Natalie, I remember saying, I have to split you guys up on paper. And her eyes just like looked up because she didn't understand what that meant. And I said, the power of leverage, if I split you up on paper, you're going to be able to get to your goal a lot faster. Explain what I meant so our listeners understand. And I want it in your terms. So pretty much, you know, like to split it up, like, you know, I get a certain amount of properties, which is 10 properties. And then Natalie will also get her 10 properties. And by leveraging, we can we can increase our income a lot of them. Correct. Correct. And so the reason I said the 10 is because right now, and I talk about this all the time, leverage is king. If you do not. not over leverage yourself. And what I was saying was if you and Natalie split yourself up on paper,

she can qualify for her own loans. You can qualify for your own loans. And if you were to do a conventional loan, so a Freddie and Fannie Mae product, you can get up to 10 loans individually with only 20% down. And right now, rates are, you. And right now, rates are are at around a five and a half, six percent on a 30-year fixed. So it is insane if you guys were to do it together, which is why I specifically explain, let's split you up so we can maximize your leverage. And I congratulate you guys because you did just that. You're moving at the speed of instruction and you're following the rule.

So I love that I was able to share that with you. and to have you guys see the light, if you will. So let's fast forward a little bit. You decided you said Mercedes, I remember you said, I'm all in, let's do it. So what did you do? What have you acquired with Cashflow Savvy? So right now I acquired my first property.

So that already closed. Yay. Tell me about your property. Yeah, I mean, I'll explain that whole process later on. But yeah, we got our first property already. we closed on that. And right now, once I saw how easy that was, I said, you know what Mercedes?

I want to buy like five now. And what did I say to you? And you were like, okay, well, hold on. Let's go ahead and let's start. I'll send you some more houses right now. You pick them out and we choose and we'll move forward. And so far right now, we're in the process of purchasing two right now. Two more.

Yes. So although I have you move at the speed of instruction, I make you move cautiously. So we strategize. So we are currently in the process of strategizing your acquisition. And where are your properties that you have already acquired and the two that you're acquiring? Tell us a little bit more about those properties. So the one I acquire right now, it's in Alabama. And the two that I'm purchasing is also in Alabama as well. Correct. And where are your next one's going to be? Not in Alabama, right? Alabama. So whichever property you send me recommend, that's where I'm going to go.

Yeah. So the point is, and I know you know this before our listeners, I already know that you and Natalie are creating a portfolio. So I am strategically setting up or helping you set up the portfolio because you still have to select the properties in a manner which diversification is solid in each market. So in Alabama, for example, you have lower price point properties, 80 to 100,000, and then a little bit mid to higher price point properties, 100,000 to 130,000. And so we do that in each market so that we can not only diversify markets, but we can diversify the price point of the property, which ultimately dictates the caliber of your tenant. So I'm big on smart diversification. Cool. So the property that you acquired the first one, tell us all about it because I know you're in acquisition mode on the other two. Tell me about that first property.

Oh, wow. It was so, you know, like how you mentioned before, once you, everything is set and done, once you go through the loan officer, you got all your paper and documents ready. You get set up on a queue and you get to pick the property you want, right? So once you pick the property, after that, it was easy. It was just, you know, it was all through email. You know, I saw the property. I saw the pictures, the inspection report.

We just, I kept in contact with my loan officer. I get in contact with the property management team out there. It was just like, I was, I was surprised. I was like, this is, I mean, this is pretty easy. Like, I even felt like I had to do more. I even email them and tell them, hey, like, like, do you need anything from me? And then they'll message me like, no, it's okay.

We got it. I'm like, really? Yeah. It's crazy how it was so easy to get everything to set up and how easy it is. Alex, let me just tell you, it's easy for you. There is a lot going on in the background so that it is easy for you. And I don't have to tell you, you've already acquired a couple of properties in your own backyard. And you saw how challenging that is.

You see how much you have to do. So we do all that for you. We still go through the struggles that you go to. You just don't see it. We take care of it for you. And that's the beauty of working with us is that we do all of the heavy lifting for you. We take all of the headaches. But I do make you do some work.

I do make you do your inspection. So tell me about that. Yeah. So pretty much, you know, you send out. an inspector to go out there and they do the inspection of the property and you know they're sending that information via email so you look at all the pictures that they send you this you look at the issues and everything and so you already know uh beforehand what issues the property has if any so uh and the property mastering team they're great they if they see the issues they'll take care of those

issues for you and and if you have any any problems that you want to fix then you usually just let them know they'll take care of that problem, but you know, you pretty much have to take care of it. You've got to take care of that on your own. And you also have the option to fly out there and check the property as well. Yeah. But I mean, me, I'd rather just, you know, stay in my comfort of my home. And I trust you Mercedes. I trust your whole team. So I'll just look at the pictures. I'll say, okay, perfect, cool. And I'll let them know, okay, this is, these are the issues we have and this is great or not. And we'll just take it from there. Yeah, our teams are pretty amazing. It's taken me a long time to create the solid, legit teams on the ground. So I do pride myself in our teams. And I talk about that all the time.

It doesn't matter how great your property is, how pretty it looks. You know, it doesn't matter if you have the white picket fence. If you cannot get your team on the ground to place a qualified tenant that pays rents and collects the rents by the property manager. It doesn't matter how pretty the property is. It's all about your team on the ground. So I do pride myself in our teams, and I thank you for acknowledging that. I will say to you, Alex,

I didn't choose the inspector for you. You get to choose the inspector. We send you a list of recommended inspectors, and you actually chose a pretty hard inspector, but we have good inspectors, And we were really thrilled to see our inspection report with few things on your property. So, you know, inspections. I even did a whole podcast on inspections because inspections are inspections.

And, you know, an inspector has to fill up 50 pages, you know, reporting to you, the client, what the property is all about. And sometimes those 50 pages don't always look so pretty. So I love that. you went through that whole process yourself. So then tell me about the closing process. I know that you said, you know, you reached out to the lender and the lender said, nope, I don't need anything.

But then the lender had to reach out to you as well as our escrow and title to meet you for the signing of your documents because the property is in Alabama and you live in Los Angeles. So tell me about that process. So pretty much just overall, like I said, it's been a great process. but when it comes to actually signing the documents, they send out a notary. A notary, yes. Yes, they sent out a notary so you can sign, you know, your packet of documents.

Yeah. I mean, like I said, everything is set up for you to make the process very easy for you, for the investor. Yeah. So when the notary came over to my house, she brought the packet of papers. We went through them. I signed them all and that was it. I was like, wow.

I'm like, I feel so guilty because I'm like, I feel like I need to do more. All right. So you close on the property. We sent you a congratulations email. And you're on your own. You're a homeowner. Do you have tenants in place? Have you collected your first rents?

Tell me about that. Yeah. So we closed on that first house. We closed towards the end of February, beginning of March. So that was that was the end of that. And then after that, I was in contact with the property management team. And they were keeping me updated every Friday, which was awesome. And if I didn't have any questions, I'll email them.

And they got to me right away. And they finally just got it intended to. Awesome. Yeah. They just got it leased. And they sent me a message. They send me the lease. And I have it saved.

And we're moving forward. And we're moving right along to property. number two and three, which are closing probably at the end of next month. So I love it. I absolutely love it. Cool. Alex, so tell me, what would you say was the biggest challenge in this whole process? The biggest challenge, huh? Wow. I mean, just jumping in, doing it. And trusting the process, right? Just doing it. Just doing it. I think that was the biggest challenge because I just felt like there was more to it, right? And I just felt like there was a lot that you had to do. But I'm just so glad that I was able to talk to you and be able to meet with you and have you explain how the whole process is. And it just made me more comfortable. But I would say, yeah, just the biggest challenge. And I think a lot of people will agree with me that the biggest. is challenged when it comes to anything like such as this as investments is just jumping jumping in

executing it yeah it's hard and many people are like you Alex that suffer from analysis paralysis I mean you can only read so much you can only listen to so many podcasts you know you can only attend so many seminars at some point if you don't do it it's just wasted energy on your behalf you're spending all this time investing in education but if you're not putting it to work. What's the point? So it took you a couple years to come around, Alex, but you came around. So I love it. I mean, it took you five years to come around. Because That's how long ago it was that you and I first talked. So, Alex, when you were in the process and you had questions or you felt like you got stuck, you know, you have a point of comparison because you did this all yourself. And I don't know who you called when you got stuck or when something went wrong or when your timeline. was out of proportion that was costing you money.

I don't know who you reached out to when you were doing it on your own. But with us, when you had questions and you wanted to reach out to us during the process, what would you do? Yeah, like I would try to get in contact with you via either email or phone. And you were on it. You were just, I would always get that email right away. And, you know, we'll set up an appointment to talk on the phone. And whatever questions I had, you were always there to answer them.

And let's say I had a question regarding the property. I just emailed the loan officer or the property management. And they were just, just been great. They've been on there and answering all my questions that I have. They never left me in the dark with anything. And when I was doing my, my properties here in California,

it was tough. So it was, I was learning as I was going. So I was learning from my mistakes. I was learning from a lot of mistakes. I mean, I did a lot of mistakes. and and and but that's how you learn as well right and I didn't have I I did have someone that

somewhat guided me and he was my real estate agent but uh pretty much I was on my own uh when it came to management managing the property finding the uh the contractor uh going out there learning how to fix little things I had to go on YouTube to to learn how to fix whatever thing broke down or you know so it's It's going through with you guys. It's just been, you know, just a total blessing. Wow. Thank you.

So when you said, you know, I learned from my mistakes, what did that cost you? Oh. Oh, it costs me, let's just say, a pretty good penny at some of some of those, you know, mistakes. Not to mention stress and sleepless nights. Oh, oh, yes, yes. those holes in the morning and just one one that sticks out of my mind when, you know, when we had a lot of rain and one of the roof didn't collapse, but there was like a big leak and there was a hole in the roof and just the call late at night to go out there and fix it.

Like, how do I go out there and fix it right now, three in the morning? Yeah. You know what I mean? Oh, wow. Wow, wow. That's terrible. I'm glad that I'm glad that you dealt with that and that it wasn't one of my. properties for the most part.

No, no. That was out here in California. Awesome, awesome. So what would you do different, Alex, from, you know, from this point that you're able to see in hindsight. You know, they say hindsight is 2020. What would you do different? What would I do different is just, you know, I think I should have just got more information, instead of going in there with the negative mindset, especially when I was talking to you about the whole out-of-state properties actually just kind of just went for it. I think, you know, I probably would have many, many properties out of state now. And it's just, it's just having a positive mindset overall and just really looking at things in a bigger context, bigger picture,

instead of closing your mind. That's interesting. So if you would give a, advice to a new investor that is considering getting started or an investor that wants to expand their portfolio but doesn't know how? What advice would you give that new investor? The advice that I would give, I would say, just do it. Like, I know I've been hearing a lot of your podcast and a lot of people have said, a lot of the investors have said, you know, just do it. And it's so true. It's like you have to, once you think about it, just go out there and execute that plan. Don't just don't get analysis paralysis.

Execute the plan. You know, just like for example, when I had asked my wife, should I email Mercedes? She said, do it. So I just went ahead and, you know, I said, okay, fine, let's do it. And look at us now.

So don't think about it too much. Don't, if this is something that you want to do, go in there and execute, execute that plan. Don't hold back. Wow. Those are powerful words. Coming from a gentleman that suffered from analysis perhaps. Coming from a gentleman that I spoke to five years ago who said,

I got this Mercedes, I can do it on my own. And now that you're working on property number three and you have a point of comparison, I'm honored that you came and gave me the opportunity to show you the power of what you can do. if you open your mind and if you just do it. Ladies and gentlemen, Alex has said it better than I can ever say it. So Alex, thank you so much for not only giving up your morning to spend some time with me, but really for sharing just openly, authentically, candidly with everybody out there that has that little spark in their mind that they,

want to do real estate, but for whatever reason, they just haven't done it. So thank you, Alex, for being a guest on our show. And for those of you who are interested in making a difference to your financial freedom, I urge you to reach out not only to me, but just do your own assessment of where you are with your finances and what your potential is. So go to cashflowsavvy.com. that's Savvy with 2Vs. Download the frustrated investors guide to passive income, and you two can do what Alex and Natalie are doing for their lives. I will see you next time on the next episode of Turnkey Tuesdays.

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