Epic Real Estate Investing - What They're Not Telling You About Being a Real Estate Investor | 1206

Episode Date: May 26, 2022

In today’s episode, Matt will reveal the hard truth of being a real estate investor. Specifically, what you'll need to succeed in the housing business and how to overcome the roadblocks that you're going to experience. BUT BEFORE THAT, learn about how to maximize the money you have when investing in real estate and when RE inventory will reach its peak again.   Are you ready?   Let’s go! Learn more about your ad choices. Visit megaphone.fm/adchoices

This is Terio Media. So you've got some money and you want to know where and how to invest it safely. You know, this is a really popular concern right now, considering the number of uncertainties in the economy today. You know, we continue to hear the word recession. We're seeing more than normal volatility in the stock market. You know, the crypto market completely is tanked. Interest rates are on their way up.

Who knows when they'll stop? And inflation is at its highest point in 40 years. and we're all saying a wide array of predictions with regard to the real estate market. So what is an investor to do? A client of mine recently asked, I've got $100,000 to deploy what's the best way to maximize it. And I had some ideas for him to safely invest in a seemingly risky environment. And he replied with, I wasn't expecting that. So I'll let you in on what I said.

You ready? Let's go. Welcome to the all-new epic real estate investing show. The longest running real estate investing podcast on the interwebs, your source for housing market updates, creative investing strategies, and everything else you need to retire early. Some audio may be pulled from our weekly videos and may require visual support. To get the full premium experience, check out Epic Real Estate's YouTube channel, EpicR-E-I.TV.

If you want to make money in real estate, sit tight and stay tuned. If you want to go far, share this with a friend. If you want to go fast, go to reiase.com. Here's Matt. Hi, I'm Matt Terrio, CEO of Epic Real Estate, where we show people how to invest in real estate so they can escape the daily grind and retire early. And most people get this wrong.

And that's why clients come to me. And even though they have decent, sometimes great jobs, they tell me they are frustrated with either the line of work that they chose or they're just tired of the rat race. And they tell me that they feel that they wish they would have started investing in real estate much sooner. And if that sounds familiar to you, you're not alone. I mean, how could you not have that regret? Especially when you have a good paying job, but you feel you might not have had enough money or resources to make a real dent in your day job escape plan.

And I tell them, one thing that always works is to invest a little time in learning how creative real estate investing works. because investing in real estate with the intent to retire early, or at least create the option to, it's not as money intensive as most people think when they see what's actually possible using more of your intellectual currency instead of your actual currency. And this reminds me of a recent client of mine, Spencer, who just before we met, started building his wealth in real estate. And today he holds a few cash flowing income properties and he has $100,000 liquid to invest. And that's really why he became a client because he wants to learn how to best.

maximize that $100,000. So what do you think Spencer should do? You know, the answer to most real estate investing questions is it depends. Because the most important detail of this scenario is that Spencer is currently in the wealth building phase of his real estate investing career. See, in the building phase, you want to get control of as much real estate as possible and responsibly leverage as much as you can by using other people's money. And when I say other people's money, I mean, that can mean,

of course, it can mean hard money, can mean private money, it could be credit cards, it could be the existing financing on a property or seller financing, whatever money that's not coming out of your pocket. That's what I'm talking about. You see, just because you have money doesn't mean you have to use it to acquire property. You know, instead of Spencer using his $100,000 to buy more property, I suggested that he probably hold on to the majority of that and use it to manage and maintain the properties that he does acquire. So if you're not going to dip into your own disposable cash, whose money are you going to use? Well, I've got some ideas for you, six of them actually. Number one, right now, the cheapest money available today will be through the banks.

You know, despite the recent increase in rates, it is still pretty tough to beat the low rates they're currently offering. And I'd take as much of their money as they'd give me and I'd take it right away. Now, if banks are an option and even if they are at some point, they will not be, I'd start looking for number two, seller finance deals. You can find them on Craigslist fairly regularly. You can even find them on Zillow by typing in motivated seller keywords into your search criteria, like seller carryback or owner will finance or seller finance. Phrases like that. You know, most of my clients are surprised by how frequently they're available. Or ask realtors. You know, every realtor that you come in contact with, this is the question I always ask,

you ask them this. Do you know of any listings where the seller is willing to to carry back financing. That's been the most productive, valuable question that I've asked realtors over the years than anything else. Now, another place to look for money is number three, your friends, your family, your associates, your network, who are dissatisfied with the current returns on their investments. Meaning, don't you think Aunt Sally,

who's earning 0.7% in her CD, would be very interested in an 8% return or even a 6% or 4% for that matter? I mean, that's secured by a tangible asset? Yeah, most likely. I mean, even at 2%, it's more than doubled what she's currently earning. And let's not forget number four, your own assets as a means of money. I mean, do you have any assets that are underperforming?

Do you have an old 401k that you forgot about or an old IRA? How about some gold or silver lying around? Maybe you have a couple jet skis in the garage that don't get used anymore, not very often. Anything that you have a value that's no longer serving you or not serving you as well as it should, utilize that. That's a good place to look. I mean, you can always buy it all back later, if you want, from your real estate proceeds. And by the way, if you'd like to go deeper into using other people's money to build your real estate portfolio, I'm getting together next week with a small group of investors over Zoom to walk them through a full day of creative financing strategies and techniques.

You can get the details at creative financing masterclass.com. Number five, always be negotiating. You know, your negotiating skill has actual monetary value. people really undervaluate this. They underestimate it, meaning you can turn your intellectual currency into actual currency, actual money. For example, if you ask a seller a very simple question like this, what's your bottom line? And they respond back with $10,000 less than what they originally asked for. That's $10,000 you don't have to find. Or perhaps a combination of any of the things that I've mentioned. And that brings me to number six, creative financing. And this is where real estate really gets fun.

You know, let's say, for example, Spencer goes out and he finds a single family home with an owner who's willing to sell or finance 60%. Well, if he negotiates that up to 70%, then he sells the jet skis for an additional 10% of that purchase. And then Aunt Sally decides to step in and finance the remaining 20%. Spencer's now got 100% financing and control of another cash flowing property in this portfolio, doesn't he? Yes. And he still has his 100,000. in the bank, right? You know, maybe he uses a couple hundred grand of that to improve the place a bit and then puts, I don't know, another $3,000 or so into a separate bank account for incidentals.

Now, Spencer is out of pocket, just say $5,000 and he's sleeping very well at night, knowing that everything is taken care of and he's got ownership of another cash flowing property. Then tomorrow, you can get up and go do it all over again. And after the mere, I don't know, 10 repetitions of this, Spencer can or is really close to stepping away from that day job that's got him so down. You know, when it comes to investing in real estate, people get stopped because they think they have a money problem. But in reality, all they have is an idea problem.

And if you'd like more of these creative ideas that we've been discussing and others, like, you know, subject to financing, options, wrap around mortgages, equity sharing, moratoriums, deferrals, de-escalating interest. I mean, the list is seemingly endless. You'll probably really like what we're going to be doing next week. creative financing masterclass.com. So take a look. If you like what you see, join us. Now back to Spencer. The main point here with him is, if you're building your wealth, you want to get your hands on as much property as possible, using as little of your own money

as possible, and keep a good chunk of cash in the bank to back up the properties that you do acquire. I mean, you'll rest easy knowing that your assets are covered and protected and you can continue to build your wealth until it's time for phase two. And that would be the preservation of the wealth that you've created. Thanks for sitting tight while we pay our light bill. We'll be back right after this. Boarding for Flight 246 to Toronto is delayed 50 minutes. What?

Sounds like Ojo time. Play Ojo? Great idea. Feel the fun with all the latest slots in live casino games and with no wagering requirements. What you win is yours to keep groovy. Hey, I won! Beal the fun. Boating will begin when passenger Fisher is done celebrating.

19 plus Ontario only. Please play responsibly. Concerned by your gambling or that if someone close, you call 1-8665331-2-6000 or visit Comexonterio.ca. Ever hear someone say, I have too much money? Me neither. Let's get you some more. Back to the show. When will real estate inventory increase?

I mean, everyone wants to know. So by the time we're done here, you're going to know when real estate inventory will hit its next peak, when it's likely to rebound, and what's the next. there is for a home buyer to do about it. Serious lack of homes for sale over the last 18 months has made house hunting in 2022 quite a challenge. The challenge being, once you find a listing that meets your needs, your offer gets buried under a pile of competitive bids.

And when you have more buyers than houses available, that's exactly what you should expect. It's how the concept of supply and demand works in a free market. And it's this basic understanding that's needed to navigate the housing market today. Now, there are signs that buyer demand could start to wane, and that would typically mean that inventory supplies should start to grow. Now, the first thing that should contribute to more homes on the market is that traditionally, spring is the home buying season where competition is high, and then it tends to slow down by the end of summer, producing a recovery of housing inventory. The recent increase in mortgage rates could help bring back this typical seasonality, not to mention how the market returned to this seasonal trend in 2021. Another sign that inventory should increase in the second half of 2022 is what was revealed in a recent realtor.com report. It stated that approximately 64% of prospective home sellers plan to list their properties by the end of August.

Now, this is some good news for buyers. And some even better news, a 43% share of those selling have expected prices below $350,000, the range most first-time home buyers target. And 22% anticipate listing prices between $3,000. and 500,000. Because of this, come late summer and early fall, there should be a bump in listings for buyers to look forward to. We should hit a peak during this period. But that peak, it's relative. You see, with good news also comes perspective. Although inventory is expected to increase, the forecast doesn't have that increase exceeding 1% this year. Considering work coming off all-time lows in inventory, it might be premature to celebrate. However, something is better than not.

Nothing. Forces pushing against rising inventory are rising mortgage rates. As the rising rates may push some buyers out of the market, it can also push sellers out. And here's what I mean. The meteoric rise in mortgage rates can work both for and against increasing inventory. Some otherwise would-be sellers could decide to just stay put if they find the new interest rates cause them to lower their price too much due to buyer affordability. It's very possible that sellers decide to just stay. You know, we haven't seen anything like this very rapid increase in rate. in the last 20 years, and it's totally disrupting people's plans to both sell and buy. Fundamentally, we need more homes, and we just can't rely on existing homeowners turning over because when they sell, they put their home on the market and contribute to supply, but they buy again and then contribute to demand. The real source to increase supply would come from new construction, and that's a significant contributor to the fiasco that we're in. See, the question isn't really, when are people going to start selling their homes to increase the inventory?

but rather, when are builders going to start building to increase the inventory? Because here's the reality. The Great Recession and the glut of housing supply that followed ushered in a decade of underbuilding that has now caught up to us. At the end of 2021, the U.S. was 5.8 million single-family homes short. It essentially means we're five years behind when it comes to new construction. So not only do we have to get back to normal building levels, but we have to exceed them to,

make up for the deficit. Further, each generation is bigger than the previous. So while we need to make up for a lost time in the building department, we need to pick up the pace even more to keep up with the population growth. Although builders are firing on all cylinders to complete houses, they are dealing with supply chain issues that are causing the construction process to take longer than usual. Fixing these bottlenecks would help, but even then builders would have years worth of work ahead of them to meet the demand for new houses. Loosening up restrictive zoning laws could pay huge dividends here, allowing ADUs, these are accessory dwelling units, and in-law suites in single-family neighborhoods, and permitting missing middle options such as duplex and triplex units, could meaningfully

increase housing supply if broadly implemented. In order for builders to catch up even within just a few years, there's massive amounts of red tape to be removed in order to make it easier and faster to build. Much of it is controlled at the local level, meaning local communities need an attitude adjustment from being protectionary and housing to being pro-housing and pro-growth. Because there's a significant portion of the population that is pro-growth

as long as it's not in my backyard. And that contradicting community sentiment slows builders down. And it could be that sentiment that's causing the recent home builder sentiment to slip for the fourth month in a row in April, actually, along with rising construction costs, home prices, interest rates, and supply chain

wells continuing to take their toll. The National Association of Home Builders, Wells Fargo's housing market index recently released showed that builder confidence fell to 77 this month, down two points from March. And it's the lowest reading on the index since it hit 76 in September. A score of more than 50 shows more builders view the conditions as good versus poor. So, builders are still showing confidence and they are still building. But for the last four months in a row, that confidence is slipping. As construction costs and interest rates continue to rise, I wouldn't be surprised to see builder confidence slip even further. The market will eventually

get back to a balance, it's just not going to happen overnight. We need to build more, much more. And given where housing starts and permits are, I wouldn't expect that housing production to fill in the gap for at least another two years. You can almost guarantee it to be a slog to increase the housing inventory and bring overall balance back to the market. As recent history has been anything but normal, 2022 should start heading in that direction. But returning to normal by 2023, that's wishful thinking. All righty, so if we're not expected to return to normal for quite a while, when will this hysteria cool at least?

Well, according to a panel of housing market experts polled in the latest Zillow home price expectation survey, the housing market is expected to return to pre-pandemic 2019 norms, at least in terms of inventory and the share of purchases made by first-time homebuyers by 2024. Inventory should return to a monthly average of one and a half million units or higher in in 2024, according to the largest group, 38% of the respondents to this Zillow survey. But many are more optimistic. The second largest group, 36%, believes supply will bounce back to pre-pandemic levels in

2003, while 2025 earned the third highest share of votes with 12%. Inventory and mortgage rates will determine how far and how fast home prices will rise this year and beyond. Indeed, new listings are returning to the market, albeit slowly. The other side of the equation is buyer-dict. demand, specifically first-time home buyer demand. You know, the last couple of years of record-breaking price growth has pushed many of them out of the market. First-time homebuyer purchases dropped from 45% in 2019, all the way down to 37% in 2021. According to the majority of experts

polled in this Zillow survey, first-time home buyers should regain their pre-pandemic share of the market in a couple of years. However, 18% of the experts polled did not believe the share of first-time buyers will rise above 45% until after 2030, despite millennials, the largest U.S. generation ever, aging well into their prime home buying years before that time. And then there are inflation considerations, as it is currently eroding the bottom lines of American households, with the rising costs for energy, housing, and food as prime factors, driving it to a four-decade high. Of the six categories considered, survey participants expect energy prices to increase the most over the course of 2022, followed by house prices, residential rents, and food costs.

Employee wages and stock prices were ranked fifth and sixth, respectively, rounding out that list. So what does that mean for demand? Well, against the backdrop of tightening Fed policy and increasing mortgage rates, the significant inventory shortages are likely too strong for the market to see prices pull back. If prices increase this year for homes, rents, energy, and food, and each exceed wage growth, as the panel expects, home of four. affordability challenges will intensify further, especially for low and moderate income renters, making the market even more desirable for your buy and hold investors. But if you're in the market still to buy a house sooner rather than later,

there are some things to consider that could result in a satisfied purchase for yourself. There's no getting around the fact that higher costs, whether due to inflation, interest rates, or building materials are going to make home purchasing more challenging. Buyers can call on some creativity and flexibility, like looking further out in the the suburbs, or maybe consider smaller houses or less expensive metros than they might have before. Consider your timing as well, as buyers tend to try to complete their home purchases in the summer, with August as the end of that bulk-moving season. So the best time for buyers is normally in the fall because sellers who list then usually

are a little more willing to negotiate, traditionally speaking. But with that said, I wouldn't necessarily put home search plans on pause. Keep your eyes and ears open. And if you find a home that fits your checklist and is within your budget, put your best offer forward. The market is indeed changing. So I'm not suggesting to be reckless with your offer. You definitely want to be cautious about overbidding and thinking there's more competition than there really is. It's going to take some time for the housing market to really feel different.

So pay attention to how many people are actually bidding on homes. Meaning, if you're in a bidding war against one person, your strategy would be a little bit different than if you're in a bidding war against a dozen people. The market is certainly showing signs of shifting from very, very, very hot to very hot. And later in the year, likely fading a little bit further to just hot, but hot nonetheless. So stay on top of your local housing market. With all that being the case, if you're not already ready, get prepared and stay prepared to move fast, meaning with mortgage rates expected to rise throughout the year, the amount of loan you qualify for will likely fall.

stay engaged with your lenders so you're clear about the price point you're shopping for. Do this, and if the right property shows up, you'll be ready. And if you happen to be in the market for income properties, that cash flow, where everything is done for you, I have some free information for you. Download an investor's package at cashflow savvy.com. Please stand by. We've got overhead to pay. We'll be right back.

It's the macho or the three ensemble cado Cephora of the fact that I just just the deniches who's the ennergues so many regrouped? And the form of pretty good, which is practically

to do you know, I know that I should have the summer Fridays and Rare Beauty by Selena Gomez. I'm, I'm sure.

The more ensemble the gift is atop the fiefora. Summer Fridays Rare Beauty Way,

Cifora collection and other part of Vite. Procurry you Corma and mini regrouped for

a better quality of free. On link on C4. or in Magazen. Remember that

person that gave up on their real estate investing dreams? Neither do I. Let's keep going. Back to the show. They want to talk about the hard truth of being a real estate investor, what they're not telling you, specifically about what you'll need to succeed

and the roadblocks that you're going to experience. I posted this survey yesterday, and it's asking, what's your biggest roadblock in real estate investing? They gave them the options of lack of knowledge, lack of time, lack of money, or fear. And you can see kind of the order of the sequence that those played out. And I asked it this way because these are the things that you will need to succeed as a real

estate investor. You need the knowledge, need the time, need money, and need confidence. And what people won't tell you is you don't necessarily need to possess them all yourself. You just need to have access to them. And you can access them by partnering or outsourcing or delegating. but the more of these that you do have yourself, typically the better off you're going to be. And although they are major roadblocks for real estate investors,

they're much easier to overcome than most people realize. You know, you can see the people here surveyed that they didn't all choose the same thing. They didn't all choose lack of knowledge. They didn't all choose lack of time. They didn't all choose lack of money. And what you want to see there is just kind of realize whatever is a struggle for you if, say, lack of money was the struggle for you. Look at there's 24, 30, so that's 50% of the people, essentially, 54%.

Oh, there's that 3% down there below something else. But half the people don't have this struggle of money. And so the point being is what's a struggle for you is easy for somebody else and vice versa. So that way there should give you a little bit of relief based on whatever you think you're missing and knowing that it is attainable. It's not impossible by any means. So the second thing would be, I'm going to show you is how to overcome all of these with great probability, with a little bit of creativity.

So I'll just go through each one of these really quickly. And then we'll spend some time on the lack of money since that seems to be the biggest one. But the first one, lack of knowledge. Now, that's easy, right? That really is easy. And that's like kind of a poor excuse of that's really what's getting in your way. Information that's readily available these days. You can get all of the knowledge that you need to succeed for free.

Now, you may have to piece some stuff together and you might be working and going a little bit slower working by trial and error, which will work, nothing wrong with that. Or if you want to go a little bit faster, you could essentially pay for it and get in a more organized format or a more organized system to streamline your learning and accelerate your journey. And then you can also get some support for when you get stuck because, you know, you can have the best resources. You can have the best education. There's so many variables in real estate, you're still going to get stuck.

And so you're going to need somebody to lean on. So to go the fastest, you want to have a coach or mentor to reach out to when you get stuck. So lack of knowledge, the point here being is just. If lack of knowledge is your roadblock, it's really just laziness. It's sad, but it is. Or succeeding in real estate, it's just not that important to you. And that's fine too. So the next one, lack of time.

So 6%. I'm surprised this is a little bit low because this is kind of what people, when people come to me, this is one of the biggest challenges that they say they have. But per this survey, it was actually really low. But lack of time can typically just be solved with a reorganization of priorities, right? what's kind of identify what you do during the day and put it all in order of importance and then you know see where you can steal some time from i think the last that i saw people watching tv was like i don't know the average person watches like 22 hours of tv a week if you're watching

22 hours of tv you definitely have enough time to be a successful real estate investor i mean really you could do this in as little as an hour a day and there's people here that work with us that actually do that, have very limited amount of time and do it. And we do it by this how we do is we just stay focused on the right activities. We use this thing called the Daily Navigator. And what it is is just a list of all the essential money making activities. So if you have just an hour a day, you want to make sure that your folks are just these activities here because it's really easy when you start working in real estate or start

being interested in investments and pursuing stuff to get on Zillow or to get on Redfin and start clicking around and just go down this rabbit hole. And before you know it, 40, 45 minutes have passed. And you've done really nothing. You've made no money. You're like, oh, I don't have any time. And I make any money. This didn't work.

Well, searching Zillow is not a money-making activity the way that we do it here at Epic. So not no surprise there. So we just use this little scorecard, so to speak, to keep us focused on the right activities. So there's lack of time. Next one. Let's focus on the lack of money now. Okay. So let's focus on this because for the survey, this is the biggest roadblock

for people. And if this is your roadblock, then you really want to join us next week for the Creative Financing Masterclass as I'm going to be showing how to use more of your intellectual currency than your actual currency. And when your intellectual currency won't close the whole deal, when that's not sufficient, I'm going to be given everyone at the master class access to the funds to do so, to put those deals together. But the people here that said money is their biggest roadblock. contrary to their belief, they don't have a money problem. They have an idea problem. They're lacking in the creativity.

The hard truth about real estate investing is that you do not need money until it's time to officially close. That's the only time that you actually need the money. I mean, you don't need money to go out and find deals. You don't need money to present your offer to sellers. You don't need money to get the seller to sign those offers. And see, what happens when you do that? When you take it that far and you have a signed contract on a property is you now have an asset, you have control of an asset.

Now, you don't own the property yet, but you indeed have control of it. And there are other real estate investors that will gladly pay you in exchange for that control. Here, I'll give you an example. My very first deal, my coach, when I was just getting started, operated from this idea. You probably heard me say it here before to move at the speed of instruction. So you learn a little, do a little, learn a little, do a little. And so that was how he taught me. And so initially he said, this is what you're going to do?

You're going to get in your car and you're going to drive up and down the streets. You notice of any houses that look a little bit distressed. Look for broken windows, look for boarded up windows, look for chipped paint, anything like the roof is, doesn't look great. Just look for something like the house, you know, isn't as good in conditions as the other houses in the neighborhood. So I did that and I wrote down some addresses and I came back to him and with these addresses, I said, okay, I got these addresses. Now what? He says, I want you to contact them and write offers to all of them. And I was like, but, you know, I don't have the money to write offers. He said, you don't need money to write offers. So I went ahead and I just wrote the offers with total blind

faith to do what he said. And lo and behold, within a few days, I actually got one of those offers accepted. And so I came back to him and says, okay, we got this thing accepted. Now what, smarty pants? I still don't have the money. He says, you don't need the money yet. And so he showed me a way to go out and share my opportunity, my assets, my signed purchase agreement with people that did have money and show them how they could make money by working with me. And so I did that. And I only had to talk to two people before I found somebody that was willing to go in on it. And so that was like my first kind of realization that, wow, I didn't need the money because we closed that deal and I think I made $26,000-ish dollars on that very first deal. And that was inside of 60 days of me being a full-time

real estate investor. That was just the idea of, so I followed his instruction. I kind of operated that way ever since. So it's just been much easier to find the money once you actually have the deal. It's significantly easier because you actually have something to exchange, you have something to trade, because there are people out there with money that are looking for people like you that have properties under contract. So that was my very first deal, and I've operated that way ever since. And then one of the more significant ones was maybe just about eight months after that, I had ran into a real estate investor who had a portfolio. He had 35 properties of Illinois, and I was in Los Angeles. So I had never been to that area. And so my coach, he said,

just write an offer. I was like, but this 35 properties, I don't have the money for 35 properties. Remember, you don't need the money yet. So we went through this whole process. I got all of those properties under contract. And I said, now what? He says, well, now you're going to go out and see if if you can sell those. So this was my first introduction to wholesaling. So I was able to find, I sold those properties one by one by one and made enough money to put some cash in my pocket. And I was able to keep a few of those properties for myself. And that kind of started my whole passive income journey and I got my first rentals that way. Here's another more creative example of one of my clients.

Nathan, let me pull this up real quick. He found the deal that the house that's right behind him and he got seller financing on it. He purchased the property for $180,000 bucks. He put $9,000 down. It was a 5% down payment. He had principal only payments of $500 a month. Gross rent was $1,200. And this calculates to a 96% cash on cash return.

So he used very much of his intellectual currency, to go and purchase this property and create an amazing asset for himself. The return on investment is 96%. Right? That's ridiculous. But he still had to come in with that $9,000. So how do we do that? Where did we come up with that?

So we got the intellectual currency to pay for 95% of this, but we still got to come up with the $9,000. So that would be the money problem, essentially, that we'll go ahead and we'll look to see how we solve it. So it's not a money problem, though. It's an idea problem. So I'm going to give you some different. ideas of where you can find this.

So, for example, here's some money ideas. First thing is, could the seller themselves cover that $9,000? You know, they've already given you, or gave Nathan seller financing of $181,000 or something like that was the actual loan from the seller that they were carrying back. But could you not take that, ask the seller to take the $9,000 and carry that back for a different term? So rather than the 30-year long term of the bulk of that note, maybe you just do a one-year term on the down payment and you pay that off sooner.

So that's one way. The way is do you have anything of value, right? Do you have an old jet ski or an old motorcycle or a boat that only gets once or twice a year? Anything of value is a little baseball car collection, whatever it may be? You know, do you have anything? Is it producing 96%? So you want to look at your other assets that you may have a value. I mean, with a couple investments like this, I mean, you could buy it all back pretty darned

so anyway. So that's another place to look. Credit cards. A lot of people don't really consider credit cards. They don't think of it that way that this is what we buy dinner with. This is what we go on vacations with. This is where we go to the shopping mall with. We buy plane tickets with credit cards.

But if you only need a $9,000 for this, you know, why not? It's a 96% return. You can't pass this up. You can't let $9,000 be the roadblock here that prevents you from advancing your financial future this way, right? So another one, stocks. Could you sell a stock? You know, if your stock is earning 96%, then maybe you don't sell it. But I know this year, you know, we're down, what, 20, 30% so far this year.

This average stock return or average mutual fund is like, what, 8% or so. This is 96%. This is a good exchange. This is a good way to reallocate your portfolio. So that could be a one that you could do. A 401K, you could go, if you have a 401k at your job, you could borrow against your 401k, you get to pay yourself back with interest. It's a great strategy to do that.

Or do you have an old 401K from another job that you forgot about or you know it's just sitting there? You know, we meet people here at the cash flow savvy all the time. I've got two or three 401Ks from two or three jobs that they don't work at anymore. I mean, even if you cash that out for the $9,000 and paid the penalties and paid the taxes, so that's 10%, maybe another 20%, 30% for taxes. But this is a 96% return. It totally makes sense to do that in this scenario. Or do you have any gold, right?

Is your gold earning 96%? Is your silver earning 96%? Do you have any cash value life insurance? I just interviewed Willie Booker, an RIA's client of mine. And this is exactly how he's doing his deals. He's got a cash value life insurance policy, and he's been purchased his properties that way. Or do you have any other real estate?

Could you refinance another piece of real estate? Could you sell another piece of real estate? Right? So you could do that? Or maybe even your primary residence. Do you have equity there? You could potentially borrow from there and get home equity line at credit to come up with this $9,000.

That money is just sitting there doing nothing in your home. Why not take $9,000 or whatever you need to do and get a 96% return? That's working a lot harder than zero, right? Okay, so those are the ideas. But the other idea is your ace in the hole here, so to speak, you have this property under contract. That is an asset right here even before you close. So what that does is it makes borrowing much more. feasible way to go about this.

For example, this pays 96%. Do you think someone might split that return with you for $9,000? Of course they would. Where in the world are you got to invest $9,000 to get a 48% return secured by an asset, like a piece of real estate? Or same, you could say the same thing for about 24%. Where are you going to put $9,000 to 24% or even 12%. Right?

Once you know what a property is going to return for you, now you know what you're going to actually pay for the money that you need to put the deal together. So this is 96% return. That's how much of a percentage I have to deal with. I could probably find someone for 10, 8, maybe 6%. Let me look at today's savings accounts. I mean, it's 0.7%. I think Aunt Sally would mind giving $9,000 to put into this deal to 12 times what she's getting in her savings account for sure.

Well, here's the thing. So borrowing is an option. I'll give you some ideas of where you can access. or where you can borrow this money from in a second. But if you don't know anybody that would be willing to do this with you, that's not necessarily a money problem. It's more of like you don't know enough people, but more than likely it's a credibility problem,

not a money problem. And what gives you the credibility? Well, the credibility comes from having good deals like this that under contract and having control of them. So that's where the credibility comes from is having control of the deal. And then how do you get the deal under contract? Well, you're out there.

You're taking action and you're writing offers. And then how do you know when do you start doing that? Well, once you learn how to do it, right? So it kind of works like this. When people look at this $9,000 and think of this is the money problem, if you trace it back to the roots and just kind of peel back the layers of this onion, what you really have is you might probably just have a knowledge problem. So you need the knowledge and you might know how to do this,

but are you actually doing it? Are you applying what you've learned? earned. And if you are taking action, are you writing offers? Are you getting those deals? Are you finding good deals? And once you got the deal, now you've got the credibility and then you've got the money. To understand that it's much easier to find the money when you find the deal first. All right? So that's what you want to focus on. Focus on finding the deal and the money will find you. You do not need any money to actually find the deal and secure a contract. So here's some money ideas. Where are we going to borrow this from? Could be a family member. It could be a coworker.

It could be a friend, could be a friend of a friend, or it could be an associate, right? Could be any of those. Or maybe the retirement account of all of those people. Let's look at how this would work. So this is what Nathan did and very creative way to acquire it. Once you close on it, what's a creative way to make even more money from this? Let's look at this. So right here, let's say we've found the money.

We're going to borrow the money from Aunt Sally for five years. we're going to pay her 7%. And now we've got this property. Let's say we resell it. So we bought it with seller financing. Let's resell it with seller financing. So we purchased up for 180. We'll market up just a market value.

Sell it for 190. He could typically maybe even charge more and charge a premium because we're offering financing because our buyer won't have to go to a bank. And who we're looking for is someone that might not go to a bank or might not be able to qualify for a bank loan. But, you know, still it could be credible, could still make the payments and it's tired of renting. And if they could own a property for the same price that they rent it for, that's a very appealing opportunity for a lot of people. And this is how we've always attracted it up.

Why rent when you can own was kind of our whole promotion when we do this? But we could sell it there. We can ask for a 10% down payment. So there's $19,000 that we would collect when we sell this. And then we'd carry back the financing at 9%. So we have these. principal only payments on the property that we purchased, but then we're going to resell it with a 9%.

So we're collecting 1376. And that's a really important number. So we kind of play with the percentage rate there to try and get that monthly payment very close to what the gross rent is in the area. So now the person is purchasing the property for the same amount on a monthly basis, what they would rent the property for. So that bet, we put $19,000 in our pocket. And we have to make this payment here, though.

So we're collecting 1376 every month from the new owner. We pay off our $9,000 loan every month, $178. And then we pay off the $500 to the seller. What that leaves us with is $698 a month. So another very creative strategy. So we purchased it with seller financing and then we resold it with seller financing. So when you look at that, what does that do to your return? It's not 96% anymore because we don't have any money in this deal.

It's an infinite return. So what initially was thought to be a money problem, purchasing this property has really just been an idea problem, a very creative idea. So how long would it take for you to escape the rat race with a new set of ideas like this with infinite returns? We essentially with our ideas, with our intellectual currency, we created money out of thin air. Got it? All right. So let's go back to our survey. Last obstacle is fear, which really starts to disappear rather quickly with the more knowledge and education that you gain, the more experience that you gain. But to overcome this

completely. We really kind of have to dig deep and again, kind of peel back the layers of that onion to discover what you're really afraid of. What's the real fear? So I'll let you know right away that there's no real estate jail. If you're operating in good faith, then your intentions are good. You're not being fraudulent in any way. You're not going to jail. So there's nothing to be afraid of there. And the second thing is nobody dies from real estate. I don't even think it's in the top 100 causes of debt each year. So those two things. things, no real estate jail, no death, that should give you some comfort right there. So the worst of the worst possible thing that happened is it just doesn't happen as long as

you don't have good intentions. You can't mess it up it, find yourself in a bunch of trouble. So if you dig deep enough of what you're afraid of, I mean, everything else that you're afraid of, it's really all attached to your ego. And here's what I mean by that. You know, we're all hardwired as human beings. We're all hardwired to either look good or avoid looking bad. That's at the core at all of.

of us and it's inside of us, whether we're aware of it or not, it's there. And once you realize that, once you have that enlightenment, you get to decide what you want to commit to. Do you want to commit to being a successful real estate investor? Or do you want to hold on to your commitment of looking good? When you have that awareness about yourself, all of a sudden, the things that you're not trying to do in life, the things that you really want to go after, it's kind of silly to not do it. So in real estate, if the fear is holding you back, understand you're just learning something new and understand that it's impossible to learn something new and look good at the same time. I mean, think about something that you are good at right now. Maybe you play your good at golf.

You have a great golf swing or you play a musical instrument and you're really good at the piano. Or you know, you could juggle three tennis balls, something like that or you're good at magic tricks or something like that. Whatever it is that you're good at and you're all the, you're good at something. At one point you were not good at it, right? and you didn't look good while you're learning how to do it. I mean, you hit a lot of sour notes on the panel, didn't you? Praxing those, juggling those three tennis balls, you drop them all the time. But you stayed the course, and then you did become good at it.

And now you do look good doing it. You might even be, like, show off because look what I know how to do. So you've been through this process before, and I just want you to know that real estate investing is just like that. It's a skill that you can learn. And I think there's going to be a lot of opportunity coming up in the market right now because I don't know if you've noticed, but those foreclosure more,

the eviction more, 20s are over, and the real estate market is returning back to normal where we're starting to see arise and foreclosures. We're back just almost to the point where we were pre-pandemic.

So those types of opportunities are coming back again, and you want to be armed with a lot more tools in your toolbox than just, you know, negotiating price, because there's going to be a lot of opportunities to negotiate price and terms. And really create a whole thing.

lot of money for yourself. And one thing I've learned over the years is, you know, when the economy goes down and people lose their money and people are crying, like money doesn't disappear. It just moves. It goes somewhere else. And so I think we're watching right now money move. And so if money is important to you and you like making money, you want to go move to where the money's at. And so if the closures are coming back and people are losing their well, people are, you know, are struggling out there right now, which is sad and it's tragic, but that money's going to move regardless of what you do about it. So if you want to position yourself to be in the place where that money lands,

I think real estate could be potentially better to getting started in right now that it was maybe, you know, five years ago. Those are just my thoughts. And I don't think the market's actually going to crash. I think it's going to continue. The supply and demand balance is so out of balance that I can't anticipate. that I can't anticipate us seeing a crash. And even though the interest rates are going up

and the affordability is getting more and more difficult, and a lot of first-time own buyers are getting pushed out of the market, and the actual number of sales is even down. So you might hear that in the news right now, but be careful how you're interpreting that. Sales activity is falling, but we just hit another new record in the actual sales price. So there aren't people leaving the market being pushed out of the market,

being outpriced out of the market, but not everybody. So houses were getting, you know, 10 offers, right? They were getting 10 offers per every time a house will in the market, they get 10 offers and they have this bidding more. So they're not getting 10 offers anymore, but they're still getting seven. They're still getting six. And I've always said that the market, like I don't see it's going to crash,

but watch the interest rates. That's the variable. Watch the monetary policy. Watch the money printing. Watch what the Fed does. So we're acting very aggressively right now. The interest rates are going up and they've tightened the money printing up. And so it's having an impact on activity and it's pushing some people out of the market,

but not enough to stop to slow down the price. It's not pushing the price down we're getting. And it might correct. But will it crash? I doubt it. And the other part of that is on the supply side. You know, we're at a 2.2 month supply of houses across the nation. that's really,

really low. That's such a strong seller's market right now. And then the new builders, building numbers came out. Housing permits are down. The builder confidence is down. And the reason being is, builders can't,

they know the demand is out there. They know that there's money to be made, but they can't build houses cheap enough due to the inflation and the supply chain issues. They can't get the stuff and a huge labor shortage. And so the building of houses and adding more supply to the market, it's going to come really slowly, really, really slowly.

So I see when you have an industry like this on the supply and demand is so out of balance like that, if you can get in and you can find the deals and you can control those deals, just very much in the way that I've been showing you tonight, you can essentially write your check. That's job security for the next decade. So if you're already investing in real estate, you're doing the right thing. If you want to get started, come join us. A great first place starting point will be to join us next week at the Creative Financing Masterclass.

And that wraps up the epic show. If you found this episode valuable, who else do you know that might too? There's a really good chance you know someone else who would. And when their name comes to mind, please share it with them. And ask them to click the subscribe button when they get here and I'll take great care of them. God loves you and so do I. Health, peace, blessings, and success to you. I'm Matt Terrio.

Living the dream. Yeah, yeah, we got the cash flow. You didn't know home for it. We got the cash flow. This podcast is a part of the C-suite radio network. For more top business podcasts, visit c-sweetradio.com.