Epic Real Estate Investing - Why Flipping Houses is So Much Better Than Holding Them with Justin Williams | EREI 164

Episode Date: July 20, 2015

On today's episode of the Epic Real Estate Investing podcast, Matt is joined by a fellow member of his mastermind group and the host of the House Flipping HQ podcast, Mr. Justin Williams.  As an incredibly successful house flipper (to the tune of 1 house purchase every day!), Justin strongly believes in the power of flipping over landlording (at least for himself).  Learn why he loves flipping houses and exactly how he has created systems that allow him to work just a few hours each week!   PLUS, get access to unparalleled discounts on the tools and materials you use everyday in your investing business.  Did we mention this program is FREE for Epic listeners?  Enjoy! ------- The free course is new and improved!  To access to the two fastest and easiest strategies to a paycheck in real estate, go to FreeRealEstateInvestingCourse.com or text “FreeCourse” to 55678. What interests you most? E ducation P roperties I ncome C oaching Learn more about your ad choices. Visit megaphone.fm/adchoices

This is Terrio Media. Broadcasting from Terrio Studios in Glendale, California, it's time for Epic Real Estate Investing with Matt Terrio. Hello, and welcome. Welcome to Epic Real Estate Investing, the place where I show people how to escape the rat race using real estate. Just shift your focus from making piles of money to making streams of money, change that one thing just one time, and you are on your way to financial freedom. Now, it's not the most exciting path, I promise you, but it is the fastest, and I promise you that as well. And once you get there, life then becomes exciting. And if you'd like to get started the same way that I did with no money or a credit score to your name, you can access a free course that I created just for you at free real estate investing course.com.

Free real estate investing course.com. I outlined the two strategies that I use to get to paychecks quickly. and that's yours for free at free real estate investing course.com. So I've got a great show for you today. So let's just get right into it. On the phone, I've got a very special guest. Someone that I met earlier this year. He's a new member of my, or newer member of my mastermind group.

Really cool dude. And he's got a very popular podcast of his own, of which we'll talk about. And when he first started trying to flip houses more than eight years ago, he felt really overwhelmed by everything that he needed to learn. Can you relate? He guessed that others had felt the same way, and we all have, right? And just like me, he had noticed that, you know, it doesn't help that most guru courses and seminars, they just barely kind of scratch the surface and don't really give you the hard truths you need to learn in order to take real action.

I mean, the agenda we've all experienced so much is just to sell you that next product. And that can be frustrating. It is frustrating. It's not that it can be. It absolutely is. I've been there. He's been there. We've both felt that frustration, and out of that frustration, he created a business system that now flips around 100 houses a year with minimal involvement from himself.

In fact, I think as I heard recently, he's darn near flipping one house per day. Pretty amazing. And he's here today to try and convince me why flipping houses is so much better than holding them. So aside from that difference, I really feel that we're kindred spirits as we both claim to not know everything, nor will we ever. We're both very clear and comfortable with that. But after more than a thousand combined transactions, you know, we've learned a ton. And we both paid a very hefty tuition to that school of Hard Knocks. And now we share our tools, our resources and suggestions with others so that they can sidestep the tough lessons and they can avoid those expensive mistakes.

So I'm really excited to have him on the show today. So without further ado, please help me welcome to Epic Real Estate Investing, Mr. Justin Williams. Justin, welcome to the show. Hey, thanks for having me, Matt. You bet. Glad that you made it. We just got to meet each other actually just recently

at our mastermind group, and I'd known about you a little bit before, basically through your podcast, the House Flipping Headquarters podcast. And I've seen some of your ads on Facebook and stuff, I think. And, you know, it was just a pleasure. Finally, to get to actually meet you face-to-face,

tell me a little bit about how you got started and how you became a house-flipping genius. I've been flipping houses for about eight years now. Eight years ago we went to our first real estate investing seminar. I didn't know anything about real estate at the time. But, you know, there was this call. My friend told me about $2,000 would fly back east to Atlanta, Georgia. And, you know, we hopped on the plane.

And before we knew it, we were paying the guy $15,000 to join his coaching program. And we were stoked. You know, this guy's going to teach us how to make millions of dollars, and we had a chance to win a free new car. We were the most successful student in this program, and that's kind of how we got going. Later on we found if this guy had actually done real estate for six years, and we won the car but never got it,

but that's kind of a whole other side story. We didn't get it to another time. That's funny. It's funny. So you spent $15,000 on your education. And that was like, this was eight years ago. I mean, today, this same program would get $20, or a $40,000 program.

And how do you feel about that investment now looking back? You know, there were times, especially when we won the car. I mean, we literally went to a seminar, we won the car, we got a picture of him with a car and a trophy, and he never sent it, that I was, like, super bitter and couldn't believe I was scammed by this guy. But looking back, as I see a lot of real fit investors now, they go from, like, club meeting to club meeting or seminar to seminar, and they just know. never really have a focus. They get the shiny object syndrome. They never get focused in. They

never really take access. So looking back, I don't mind too much. Granted, yes, I would have rather found someone who was legitimate and didn't charge me as much. It was actually doing the business. But I don't mind because I was focused on one system. I was focused on learning from one person. And I hooked up with a partner who was learning the same system, who was able to kind of really help me. And I just took access. I didn't know any different. I didn't know. I mean, I said, I was sure. short sales, which was the hardest thing you can learn. I didn't know about REOs.

I didn't know about trustee cells. I didn't know about working with direct sellers. I didn't know about rental properties. All I knew was this exact system. This one person was teaching me, I had skin in the game. If you don't pay, you don't pay attention. So I paid something. I had an investment.

And I just went full board. So I don't really regret it. I don't recommend it for other people to take that exact path. But for me, I don't really have any regrets. And you would think that would be the only time I got scanned, basically. I spent $40,000 in my first few years from, you know, educators that kind of promised the world and, eh, kind of delivered a little bit. Okay, so let's touch on a couple things there. I didn't know we're going to go down this path, but I'm curious as to what your opinion is.

Is you said that you wouldn't recommend it for anybody or for everybody, and why is that? Well, I just now, I didn't know what I didn't know back then, right? But I'm a firm believer of, you know, kind of taking action. But now that I recognize that there are better educators out there. There are people out there. In my opinion, you should pay a little bit for your education. But there are better educators. There are people that are genuine and are doing the business and know what they're doing

and have created programs that can teach you and show you a clear path and give you a focus. And I think there's super high value there. You've got to watch out for the Connors, basically, is what it comes down there. Okay, so it's not so much the education is the particular person you chose. Yeah. Okay. Yeah. I mean, the one thing that I can relate to is I spent $22,000 for my very first program.

And after that was, let's see, that was back in 2005, I think, 2004, 2005. And looking back, I've learned that none of those people were really doing real estate either, or they were on the end of their career, and they're all doing something else because I'm friends with them all on Facebook, and they're all doing different things now. Yeah. And I was like, wow. But they sure had me fooled. I didn't know any better.

I still just did what they told me to do and all of a sudden, boom, I had a career. You know, I wasn't any point on talking about this, but I joined the same mastermind group that you're a part of last year. When I went to Tampa? That was my first meeting. Oh, right, right, right.

And I was really hesitant because I'm like, I'm not paying for any more this high in coaching programs. You know, $20,000, I'm not paying for that, right? But it's like, okay, clearly we both know it's very legitimate. So there is good coaching. There's good groups. There is good mastermind. The best investment I ever made.

But after that investment in Tampa, one of the people in the group introduced me to someone else, who he's like a guru of the gurus, I guess, and this guy had me come over to his house. And then he was talking to me and all this stuff. I think he wants me to join his program. I don't know what his goal is,

but he was in L.A. recently, and he came down here to San Clement to visit me, and even out to lunch here, I'm, hey, successful guy. I'm networking with him. He was going to maybe sell some houses, whatever, right? But he told me, check out my program. He's like, oh, this is amazing. He's like, hey, if you need a referral for someone to

teach your students, let me know. And I was like, what? Why do you mean? You know, like, someone who can kind of help me out, great, whatever. But he's like, no, like a call center. He's like, it's the same one, all of the guru reviews. I'm like the same program. I'm like, no, we teach it ourselves. Like, I'm, I educate, you know. He's like, no, you're a pretty systematic guy. He said, you will outsource that eventually. Like, what? I'm like, literally. I'm like, literally you're saying like to this call center of these people are going to pay $12 an hour who teach out of a manual you tell me that's a tons of these guys do and he's saying that's what you will do it I'm like no way like I wouldn't do this right if I was going to lose my integrity

by doing anyway it's just kind of crazy I was like wow right really wild you know one of my very first I don't know maybe within my first 20 episodes I did the good the bad and the ugly on real estate investing education. And that is one of the models. You buy the book on TV and then you sign up for the coaching and then the person other line just read the book back to you. Exactly. Yeah.

Yeah. That's interesting. In charge of you $40,000. Exactly. To read it back to you. Exactly. Okay. So there's another thing that here that I think I can identify with you is on, you said

you were the most successful student. So you pay this $15,000 from someone that you don't look in hindsight. You don't think was that credible. but you turned out to be the most successful student and here you are today, extremely successful real estate investment. We'll talk about that in just a second. But I kind of have the same experience.

I sat in a room with 300 people and did that probably once a quarter for two years. And I've, I mean, there's maybe a handful of us of thousands and thousands and thousands of students that went through this program. There's a handful of us that are still investing in real estate. So what's the difference? I mean, if, like, you know,

you made your investment in an education educational program that in hindsight wasn't the best one. In hindsight, mine, I don't know if mine was the best one or not, because I certainly know the educators aren't doing real estate anymore. But here we are. And now we're in this high-level mastermind group with 80 of the most successful real estate investors across the country. What do you think is the difference? Why do some people apply it and some people don't? You know, what I have found, as much as I've started educating the past few years, past two years, I should say, is there are people in life

who find a way to make it work, and there are people who find a way to not make it work. And, I mean, I experienced this when I went to my second seminar, and I was on a panel because I was actually having some success.

I'm the same guy, he hasn't been on a panel, right? And so all these people came up and talked and I never experienced that startar. You know, people come and talk to me, like, oh, wow, they care what I have to, oh, wow. Right, right.

And no matter what, what I would tell these guys that they'd bring up a concern they were having. One person would talk about, it was short sales, right? Someone would talk about how they were too many foreclosures in their area. And someone else would come and say there's not enough foreclosures in the area. Someone else would come up and say there are too many investors. Someone else there's not enough investors. So I'm going to have to network with.

And then one guy came out, this is crazy. People won't believe this. I wish it was recorded. Someone from New York came up and said, oh, only if I could buy in California. And someone came up to me from California and said New York is a place to buy. Like, literally, like, it was like from the twilight zone. And I just, after that, like, no matter what feedback I gave them, they kind of, you can do it because of this and this and focus on this, they would always start out with,

yeah, but blah, blah, blah, blah, blah, blah, blah. Right. And then when I went and came back and I was talking to my friends, and I was telling them this experience, and this guy does some education too. He's like, oh, you mean the yeah-butters. Like, so there's this group of people that no matter what you try to tell them, they'll come up with his excuses, yeah, but this, yeah, but that, yeah. And they just don't, you'll never be successful unless you, you,

focus on, you know, how to make it happen. There's always a way to make things work out. Right. Always. We're always adapting and adjusting. We always figure out how to make it happen. They also call them ask holes to where you ask for advice, but you go do it your way anyway. Yeah, exactly.

The same type of thing. I get the same thing. It's a, the particular experience I've had is I get a lot of people say, I'm only 19 years old. I'm 22 years old. I'm too young to invest in real estate. How do I get people to take me seriously? Yeah. And then I get, I'm 60 years old.

I just retired. How do I have the energy to keep up with all these young people? Exactly. Right? Yeah. Totally. When I played football in high school, they took it down now, but it's the excuses are for losers. Find a way to get the job done.

And whenever someone made up an excuse, we would quote that choice. And it's just like, I don't know, just figure out a way, find a way. Mm-hmm. So let's talk about your business. You have a very successful house flipping business. It describes me what it looks like today. I mean, you were just at our mastermind group. Your goal is to buy one house a day this year,

and you're darn, you're pretty close. No, that's what we're doing. I mean, our goal actually is not and was not to buy a house a day. We typically, for the past, in 2011, the first time it was high volume. We did 60 houses, and then since then we've averaged about 100 a year. And since joining this mastermind program and kind of go to it from my own education,

And it's interesting. People thought I was crazy for teaching out people what I do, thinking that I would be teaching the competition or whatever. And it's actually my business has grown extremely since I started doing that. And the same with joining this program. My business has grown. So since in the past 70 days, yeah, we've been averaging about a bill a day, and buying about a house a day.

That's not my goal. I actually kind of wanted to slow down a little bit. This momentum built up, and I have no involvement in buying any of those houses at all. Zero. I spend literally a few hours a week on my household business. I'd like to say it's as low as three hours, but then I do things like go to the mastermind meeting that we had. I can't really, I don't feel like I can really say that because I guess that's technically working on my business, right? Right.

But it's all systematized. I've got, you know, my staff, which is pretty lame actually. and it's just all about systems. It's systematically created processes for every part of the house-soping machine. And pretty much runs itself. I mean, we have to maintain it and have checks and balances, but it just works. Got it. So finding deals.

Let's talk about that. You've got these systems in place. What are your systems for finding deals? You said you buy in a house a day and you have very little to do with it. You work in three hours a week. So how are you actually finding your deals? So we are currently, you know, we used to just buy in Southern California. In 2011, we were just buying in one location of Southern California.

Then I branched out and branched down and branched out. And then you got to the point where I wasn't even looking at my houses. So a couple of years ago, I started buying a lot of state in one state. And then I went to another state. And then someone brought me houses from another state. We're currently buying in several states. I do have two full-time acquisition guys who do nothing but, make offers and follow up on deals.

They're buying through working with agents. They're buying through auctions. They're buying, not trustee sales. They're not going to trustee sales right now, but online auctions, HUD auctions. And they're buying through direct mail, online marketing, direct seller type stuff. And then I buy, so that's one of the main ways we buy.

And then I just buy from a lot of wholesalers. And that includes both people who are in, you know, the program that you and I are in. I bought 15 houses from one person in our group in the past 60 days. And it also includes people that are within my group. And then locally, there's a couple very successful wholesalers I buy from here as well. So you just have all those different lines in the water. And it's interesting.

I mean, some weeks, it's like I'll have one of my in-house guys just tear it up. Like one of my guys last week bought four houses, a guy out of who works for me in Houston area, in Texas. But there's something for you. He doesn't get any. And then there's other weeks where one wholesaler and I also bought two houses from one wholesaler. So it's from different people deliver at different times. So I just like to have lots of lines in the water and they just keep feeding us more and more than we try.

Actually, this week I shut off. I don't recommend this for anybody, but this is rare case. I shut off my entire marketing system. Just Monday we had our meeting a couple days ago. yesterday actually. I said, shut it off. Shut it all off. And we will still, I don't know how many deals we'll buy, but we'll still buy quite a few deals this week, I imagine.

So it was just a huge snowball effect. You know, you've got to get it going. It takes a lot of work at the beginning. It took me seven months to close my first deal. A lot of hard work, hardest work I've ever done. And then after that, I got the point I was able to do a deal a month. And then 2011, we just prank it up, put the system together. And now it's like buying a deal of day, and I'm trying not to really. Right.

So when you, that seven months still get that first deal, what was the breakthrough where it actually happened? Well, there's so, whenever we're getting started something that's brand new, I mean, you have a huge education curve, right? You have a huge education curve. You're building your network. You're building your team. Your trial and air. You're failing, falling flat on your face. You're building your community.

You know, people who can help answer questions. creating partners, you've got your internal team to build. And then on top of that, you're building your pipeline. So anyone who does real estate knows that whenever you go to a new area, we've gone in a new area several times. It actually takes us two to three months before we buy a house, usually, because you've got to send out the marketing or make the offers, and then you don't usually get those offers accepted right away.

It takes time. And then you follow up, you follow up, and then one and all of a sudden, all of a sudden you get one, that you've been following up with for a couple months. And all of a sudden you get a really motivated seller who only takes a week to get one from. And it just starts this massive snowball effect. And things just compound and grow on each other. You get this exponential growth starts to happen.

And most people, everyone's probably heard three pieces gold, most people give up before they get there. Right. They think, okay, people are afraid of the unknown. What they don't know, scare them. It's scary for people to put in all this work and feel like nothing may come of it. So most people will give up after they've done all the hard parts. You're not going to see results right away. And that's what people want.

They want these immediate overnight results. And it just doesn't work like that. No business works like that. But that's what people try to feed us. You know, we have this instant gratification, even the way our technology is these days. And people just have a really hard time putting in that initial work, which they don't realize will then lead to not only once you can get a little bit of success,

you can then exponentially multiply that. and have huge success, right? But they just need to get to that first part. That first one. So going back to that first deal, if you were to do it all over again, what would you do to make that happen quicker than seven months? Well, first off, I would learn from someone who's actually doing the business in today. I would, I don't want to say that most people can get a deal in three months.

But what I found is most people that do everything they should do, You mentioned, like, thousands of people get educated, and only few people even do anything. You're not going to get a deal if you don't do anything. But if people will immerse themselves in the education, take massive action, have a good coach or mentor or mastering community surround themselves with the right people.

And putting, you have to have a little of time if you're working 80 hours a week, you know, it might be harder in another job, right? This might be difficult to do. But I feel like people who do all these things correctly can do it within three months. I mean, you know, disclaimer, disclaimer, whatever. Like, nothing guaranteed, right?

But I've seen my brother do that. I've seen people who work for me. They've done it quicker because they have the additional resources. But I've seen several people in my program. Like anyone who actually does what they tell them to do and does it, you know, the way we teach them to do it, usually about three months. I mean, you can literally learn the basics.

in a week or two if you really submerge yourself. And then it's about, okay, what's step number one, taking action, and then surrounding yourself with that community, because you're going to have questions every single day. Right. The business is not, we go to seminars, which are awesome, and you get pumped up and excited, and that's like the fuel that motivates you,

but then you're going to go back to that question. So the students, I say, are successful. They get out there, they learn the basics, they take the action, then they ask the questions, and that's when they really learn, because they're taking action, asking questions, Take next, he was asking questions. And then they got this deal.

You know, I have a student who, just been in real estate 12 weeks. He swore he was going to get a deal after 12 weeks. And I was like, you know, calm down. It's probably not going to happen because this guy has another business. I was like, it's good you're working hard, but it's not going to happen. But, and sure enough, he just barely last week closed his first deal after 12 weeks. And he was in that forum group every single day asking questions.

and literally he made $7,500, which wasn't a killing, on a mobile home. And at first he was like, oh, I got this mobile home. He's motivated this mobile home. I'm not going to waste my time. Several people are like, no, no, go for it, right? And because he was able to ask, I'm not going to go over all the details, but he asked about five or six questions on this specific deal, and it made it to where it would have been no-dale to where he made $7,500.

And now I was also to do that once a month. You know, it just kind of grows. Right, right. So as you're growing, you're doing one deal a month. What was the first system that you put in place? Because you're highly system-oriented. And you have to be to do the amount of volume that you're doing and working three hours a week. So what was the first system you put in place?

And would that be the first system again? Yeah. So I would say acquisitions is the number one thing that you need to learn how to do well in this business. The rest at the beginning is just kind of have a bird's idea and understanding. and then you've really got to dive into deal analysis and acquisition. So I always tell people that they need to try to get to a point where first you've got to learn the fundamentals, learn how to analyze deals, learn acquisitions, what you want to focus on. And then you've got to get to a point where you are not doing all or hardly any of that late work on acquisition.

If you can get other people out there, teach them your criteria, and get them out there making offers for you on your behalf, taking the calls, doing the negotiating, and then they bring it to you once they have those offers accepted or close to getting accepted, then you can eliminate 90% of what just takes time and effort. You can focus on the high, have the highest use of your time, just confirming, okay, we'll take that one. That was good. And whether you're wholesaling or whether you're buying rental properties or whether you're

flipping, it doesn't really matter. Actually, I've listened to one of your podcasts. And I think you mentioned something like this, right? You don't, people will say, should I start wholesaling or flipping or having a rental profit? I say start out by marketing, start out by prospecting for deals. And then you can kind of determine your exit strategy once you get the house in their contract. But let other people do all that legwork for you. If you can get to a point where you have that going on, oh, man, you can really blow up your business.

Right. It's funny. Just about every guest I have come on. on a, there's no secrets. Everyone says the exact same thing. You know, you got to find the deal. If you don't have the deal, you don't have anything. You don't anything.

Right, right. Super. Cool. So the podcast is house flipping headquarters, house flipping HQ. Right? And you can find you at the website there, the same place, houseflippinghq.com. Yeah, howlinghq.com. Super.

And this has been an absolute pleasure, Jess. We should do it again. I'm out of time today, but I'm out of time today. I want to revisit that question. In fact, let's just, let's take a break and then we'll come back. So you'd set a, when you were scheduling this call, your headline was, house flipping is way better than holding property. So let's touch base on that right after this.

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Stop doing what poor people do and do what wealthy people do. VAs for real estate.com. Okay, we're back. And one of the things that inspired me to have Justin on the phone is he's such an advocate of fixing and flipping and he thinks it's so much better than holding and and my my audience justin they know my stance they know where i where i stand on this but uh you know let's hear let's hear the other side of a coin so give me the reason why you don't like holding and why you think fixing flipping is so much better all right so for kristop i think the title of um you know

this episode came from what i what i wrote when i wrote you know my my note someone i was going to talk about. And I decided to harass you a little bit because at our mastermind meeting, when I said I wanted to interview you on my podcast, you're like, that's fine, but I'm going to rip on house flipping, right? Right, right. Kind of get you back a little bit. And, you know, sometimes I find it kind of humorous to me and my buddies a lot of times. We have these arguments or debates and what's better flipping or holding. And it's pretty interesting. And what I've come to find over the years is I honestly don't necessarily think in general flipping is better than holding. I think it depends on many variables.

It depends on the person, depends on their situation. It depends on their personality. I mean, it's like going, it's saying that the restaurant business is better than the online education business or, you know, they're different animals. And we try to make them the same thing. And they are related because they are houses in the real estate and you can. You do a lot of the same steps for the same thing, but they're different animals. You know, in 2010, I decided I was going to give a go.

I was going to go full go into rental properties. You know, my goal is to create enough passive income, and I have to worry about my monthly expenses. And I got 12 rental properties in about three months, which was the most properties, the most houses I'd ever bought in that short a period of time. and I went to buy number 13, and I was totally out of money. My investors were totally out of money, and sure, I could have gone and raised more money and found another way to get more properties, creative, whatnot.

But I just needed to pay the bills. My wife was stressed out. We were stressed out. And so I felt four of those houses. And I made enough money to pay for all of our expenses for an entire year. And that's when, for me, I have kind of an aha moment for me, I thought, you know, sure, the end goal is to be financially free. The end goal is to have that cash flowed or to have enough income to not have to worry about my expenses

and to be able to do what I want in life, right? Let's be honest. So I've realized more and more, when we're at our mess from and you ask the question, who's here in the real estate investing business or who here's in real estate investor? And I don't know if you remember, but I'm the only one I think that said, no, I'm not. That's not how I see myself. and it's because I don't see myself really as real estate investor. Real estate just happens to be my product.

I'm a much more of a business person. Not that I'm a good business person. I just definitely perceive myself. And houses just happen to be the product that I buy and sell. So for me, I love systems. I love working with people. I don't really like houses, I don't really like houses. I don't really care for them.

I don't go look at my houses. but I love working with people. I love hiring people. I love having employees. A lot of people don't. So for me, having this house flipping machine that makes me a ton of money, there might be a little bit of risk involved there, but it makes me a lot of money.

I get great returns. I can get people to do things for me. It's just right up my alley, right? It's just what I love to do. But I know people who have tons of rental properties and they're incredibly successful, and they've got the systems figured out. For me, I don't.

You know, when I tried to do rental properties, it was just like a big, huge headache because it wasn't my focus. It wasn't my, I didn't have assistance figured out. I think I mentioned to you, though. I've also had several people call me. I've had two people call me at least that I know personally and ask them about rental properties, and then they mentioned your name. They knew. I was like, well, I know Matt, right?

For them, it made sense to work with someone like you because these guys are like, I think one is an optometrist, and the other one, I think, is a CPA or something like that, right? They're super busy. I see people all the time that want to keep their full-time job working 50, 60, 70 hours a week. And they're making really good money, but then they want to like, oh, I think I want to get into this flipping business on the side. I'm like, eh, good luck with that, right? Right, right. So every person is different.

it. And I think in a lot of cases, it does make sense for someone to get rental properties and work with a turnkey provider, like someone like yourself, who it's like, hey, keep working. If you like to work, you can be a real estate. And you can invest in real estate and take advantage of all that it has to offer and work with someone like Matt or someone else. And you should do that. Don't try to be the jack of all trades. Don't try to do everything. Focus on what you're good at. And then you can work with other people and find what works for you. you know for me i like flipping houses because that's what works for for justin right i'm incredibly about i do believe in being incredibly focused i know a lot of times we hear um multiple streams

of income that's good right but i see a lot of people who have no streams of income and they're going for multiple streams of income right out of the gate it's like focus on one focus on what you like and then you can add on to that right so i don't really believe that for everyone Flipping houses are the best thing. That was more of a jab. He's just kind of feeding you, right? I know. I just wanted to talk about it, though.

Yeah, no, there's probing tons, though, in my opinion. It depends on you and your situation and what your personality is and what you like, what you like to do. You know, one thing to your defense is that, you know, you are flipping houses, and I've been down that road before. And what I didn't like about it was, you know, I got to wake up, as soon as I fix or finish a flip, I got to wake up in the morning and go find the next deal to flip. And you know, and you kind of alluded to that a little bit like you sold those four rental

properties and you had enough money to pay the entire year. So maybe that's not day to day, but that's year to year. So you got to keep going. So, but what you have done to your defense is that, you know, you only work a couple hours a week, a few hours a week according to you in your business. You've been able to delegate everything. So yes, you have a flipping business, but it is somewhat. a passive income for you.

Yeah, no, absolutely. And I didn't want to, but that took a lot of work to get there, right? Right. No, it's not your typical. Most people that, I mean, you're one of the few people,

I don't even know if I know another person that has it down to the systems that you have it down to. Yeah, and I didn't realize that until recently. But then we go to our CG meeting and everyone's asking me, like, I'm almost embarrassed to share about what I do because I think all these guys are so advanced,

they're not going to be interested. Oh, wow, this is pretty cool, what we have going on. So, yeah, it's fun. For me personally, I mean, literally, in 2011, you know, we couldn't qualify for a house. You know, we didn't know how to pay our bills. And now, I mean, I don't know, it sounds very good, but like, I'm a multimillionaire, right? I live, I have an ocean view.

I live by the beach. I go on the vacations I want to. And I'm not saying that's for everybody, right? I mean, I'm like kind of go big or go home type of guy. And it doesn't mean that I'm incredibly, I'm very careful with, I'm very careful with my investing. And I don't, I don't feel like I take high risk because they're, I feel like they're very calculated for what I'm doing. But it's not for everyone, right? Not everyone's cup of tea.

There's a lot, you know, a lot of responsibility involved. Right, right. So let me ask you two questions. The market is really good for what you're doing right now. Yeah. For flipping. So what are your plans? I mean, I know you're a smart guy, and I know you've thought of this,

but I'm curious to what you actually have thought of, that when the market shifts, what is Justin going to do? For sure. Well, first off, I always tell people that it is important to recognize that there's no risk-free anything, right? There is an element of risk to everything, even getting up in the morning. So I don't claim that what I do is risk-free, right? But what I've done is I have my margins. You know, my margins are anyway, depending on the area, I try to buy anywhere between 15 to 20%.

So part of the way I look at it is even if the market on average is going down 2% per month, which I think you and I would both agree that that is pretty fast. Right. For sure. Could it be worth it could be, right? Anything could happen. I try not to play the what if game like to the point of like the end of the world is coming. Because if it comes, what are we going to do, right?

Yeah, we got bigger fish to fry if it does. economy. It's not our flipping business. So I like to look at almost a quote-unquote worst case scenario. Okay, if market could go down 2% per month, as long as my margins are good enough to where I'm not going to lose money if that happens, then okay. I can live with that. So that's one thing I do. And then also I try to make sure that about 90% of the properties I buy would have a great plan B. So they would make great rental problems. properties. So all my, you know, everyone who tells me that I need to be buying more rental

properties, like, okay, in a sense, I look at it as I always have about 50 rental properties. I'm just making big chunks of money on them as I sell them. And then it's just, crap hits the fan and something happens and I can't sell them. Okay, and now have my rental properties, and most of these will cash flow. I may need to take a loss on some of the houses that aren't good rental properties, but for the most part, I'll be okay in that as well. So I got my plan B for that. Perfect. Those are kind of the most simple, the easiest ways.

Other things I do, that's why I'm doing my education business. It's another head. It is another stream of income. So I'm okay with multiple streams of income. I'm saying it's all about focusing on one. And now that I've been able to systematized my house flipping, I can spend a lot more time on my online education business, which is a beast in itself trying to figure that out.

And my goal is to systematize that as well. But we're in the midst of that right now. It looks so easy, doesn't it? Dude, people think like those online educators are just how they're making a ton of money. Man, if you think real estate is hard, try creating an

online education business. One of my biggest pet peeves is when I read a comment, you see him on YouTube, you see him in forums, even on iTunes reviews, talking about how, yeah, he doesn't really make his money in real estate because he's making all his money teaching people how to do it.

I mean, that could not be further from, I mean, I'm sure there might be some gurus out there that do to that. I can, I can. There are people out there. Sure. There are people out there. But the main money, I mean, I think

it wasn't even 10% of my income last year with the education part. Yeah. And then people say, well, why do you do it then? I was like, because it's just another, I'm trying to figure it out. I want to figure this thing out, you know? Totally.

Yeah. It's just the entrepreneur. Why did I start flipping houses? You don't take me seven months to do my first deal. Okay. People are telling me I was crazy. What are you doing? Why are you doing this?

Six months? People can be laughing at me. and all of a sudden, I said, oh, hey, I did it, right? And then I just keep building from there. So I had the same idea. I mean, it's a new challenge, right? I could take my same housing business and just keep growing that. But, I don't know, we're all here for, you know, to experience life and overcome challenges and obstacles and create, right?

Exactly. So I like educating. I like helping other people. It's a blast. It's a blast. And it's also, there's an aspect of it, like, I was in the band in high school. Nice. Let's keep that to ourselves, but just right here, okay, between us.

But I was... There's thousands of people that are listening. Yeah, yeah. Everybody just keep this, this is private here. What happens here, stays here. But I remember, you know, when the teacher's away, and, you know, you sit there and you play your instrument, I played the trumpet. And, you know, it was just year after year, class after class, playing the trumpet, playing the trumpet. And the teacher went away.

I was like, I wanted to go hop on the drums. I wanted to go, you know, bang the symbols or something, just because I wanted to do something different. Something different. Yeah. That's a big part of the education element of this for me. Okay, so the next question is, so you got your market strategy down. With the amount of money you're making, Justin, what's your tax strategy? How do you keep more of it than giving it to Uncle Sam?

Oh, my gosh. You know. I know you write some big checks unless you got some ninja stuff behind you. Oh, man. Well, we will pay, I don't know, we'll see how the market does and where we end up, but we'll pay over a million dollars from this year for next year in taxes. But you know what? I'll be honest, that first I used to worry about the lot.

I will keep worrying about that later on. But I used to get so caught up in entity structure and asset protection and tax saving that it was prohibiting me for making more money. And once I started to focus a little bit less on that, less on the, how can I keep more and focused more on how can I make more? It's like, you know what? My strategy is make twice as much so that even when Uncle Sam takes his share, still have just as much as I would have before.

Right. Right. That's the main strategy. I mean, I have my IRA and stuff, but once you start making a seven-figure income, and you can only contribute, like, whatever it is, you're 10, 20 grand. It's, like, so minimal, you know? So, I don't know. If you've got ideas for me, I'm all here.

Because that's not for Reynolds coming here. Yeah, that's where the rentals come in. That's how, exactly. Yeah. I've got 10 rentals. I mean, and some people kind of laugh when I say I'm not a rentals. one guy, and then I make you have 10 Reynolds. It's like, to me that's nothing.

Right. Well, you're so out of balance, though. The flipping is so much such a great approach. Yeah, yeah, exactly. Right. Exactly. So it doesn't kind of drive you crazy when you see on the news and people say, like, the rich need to pay their fair share?

Oh, my God. I'm just like, my fair share is more than you make it all year. Exactly. It's like, I've paid it. People already, I see it all the time, people are afraid of making money because they don't want to pay off camp off Sam. So if we start charging them even more and more and more, it's going to be less mothering. People are going to, that American dream is no longer going to either, right? Right. And I'm all about charity. I'm all about giving to others and stuff,

but I also believe you can really impede someone if you're not careful. And, you know, people need, you need to have that thing within us that causes us to push and drive and try to accomplish something big. If it's just given to people, they naturally will kind of I don't know, take advantage of that and not take big risks and go for things in life. Mm-hmm. Mm-hmm. A little rambay. No, no, that's the part that it's just, I was just thinking about, you know, you mentioned you wrote a million dollars, you're going to write a million dollars in taxes.

And, you know, I've never written nearly that much to Uncle Sam. But I think about it where, you know, I have written some very large checks, you know, and I'm like, when people say, well, you got to pay your fair share. And I have some very liberal friends who were right there and, you know, recite that mantra. I was like, you have no idea. You know how painful it is to write these big checks that I have to write sometimes? Well, here's the deal, Matt. I mean, 90% of what I make goes right back into my business. You know, I employ several people.

I create jobs. That doesn't even talk about the contractors and the escrow officers and all these different people that are employed because of what we do in our business, right? and I'm trying to grow my other business. And the more, that's how most entrepreneurs are. The more I give Uncle Sam, the less I can continue to do that. So there is a lot more to it than just, oh, Justin's making millions of dollars. Sure, do I get to have a nice house yet? Do I get to go on vacation?

Yeah, but that's so minuscule compared to, I can be done, right? I could be done. I could go lend all my money at 10% and just be totally done, but it's not that fun. That's like, so what? Oh, I get it going. my vacation. After a while, you're like, who gives a crap? You know, who cares?

I mean, I drive an old car just because I'm not a car guy. It's like, I don't know. Yeah, when I first, when I hit that magical moment where I got my passive income to exceed my month of expenses, I was officially retired. I declared it to the world, and then in 30 days, I was back to work. I was the same way. I moved down to San Clemente. You know, we bought our dream home.

I was going to the beach. hanging out, and that's when I started my education business because I was bored. I thought I had arrived, and I wasn't fulfilled because I wasn't giving back to society. I wasn't helping them to people. I wasn't contributing. Yeah, we have the disease, right? It occurs to the entrepreneur. That's right.

It's almost impossible for me to say no to an opportunity. If I can fit it in, I'm going to figure it out. but anyway. So what's on your horizon that, and you might have already touched on a little bit, but you can clarify what's in your future that you're super excited about? I'm just,

we're working both sides. I mean, like I said, we're at the point where we're buying like a house a day. So just continuing to systematize that. And then just the education part, and I just love education. My goal now is to,

it's just another challenge, right? My goal is to just continue to figure out ways that I can reach more more people. And it's exciting. I mean, my wife and I, we've got done, she's helping me out now more at the education side and creating some killer websites and funnels. It's all that's really cool stuff to reach more people. And she's excited about it so we get to work together and just teaching our kids, you know, how to be entrepreneurs and they're helping us design some of the logos. My son's nine years old. That's fun, right? So we got that going on. And then we've become, we started more and more to support

a charitable group called OUR Operation Underground Railroad, which is a nonprofit group that rescues kidnapped children that are in slavery. Oh, wow. That's really cool.

Our goal is here is to help them fund a mission, which is $60,000. And then I might go with them. I probably won't go in and do the sting operation, but I'll kind of stand back and help out with the kids and they get back. So that, to me, is what it's all about, you know.

That's true fulfillment. And we only do things like that are, to me, what the true end goal is. Right. Right. Super. Well, Justin, it's, it's a pleasure to meet you. It's a pleasure to now know you. Let's stay in touch.

Let's do this again. Sound good? Okay. And we'll get you on my show, too. And you can, you know, we can do the same thing. Perfect. You can tell me why Reynolds are better than house-lifting. Okay.

It'll be fun. It will be a blast. All righty. So the man is Mr. Justin Williams. You can find him at the flipping houses headquarters. Flipping Houses headquarters. House flipping HQ. Sorry about that.

You got down. You got this down. Houseflippinghq.com. And the podcast is by the same name. If you're listening to me right now, you can find his podcast right where you found mine. All righty. So we'll be right back. Contrary to popular belief, a lack of funding is not the biggest barrier to starting a business.

It's excuses. But don't let a lack of funding be your excuse. We are Epic Fast Funding, and we'd like to fund your business with up to $150,000 in revolving credit lines. If you've got 60 seconds on a solid credit score, you could have access to your funds in as little as seven days. Go to Epicfastfunding.com to fill out our 60-second application. It's fast, it's simple, up to $150,000 in as little as seven days.

Go to Epicfastfunding.com. Now, before we wrap this episode up, I wanted to introduce to you one more member of my mastermind group. And the reason I'm taking the time to do that right now, should Justin have convinced you that flipping is better than holding or even planted a seed for you to give flipping a shot? My next guest could potentially help you save thousands or even hundreds of thousands in flipping costs and at no cost or even a remote inconvenience to you. Our guest is president and founder of Community Buying Group. He's spent 15 years partnered with companies like Lanier, Cisco, and IBM that provides small to median business and enterprise accounts with information technology solutions to solve business problems. And he has 10 years of experience in his second career as a real estate investor and landlord. And today, what he does is he helps real estate investors, landlords, property managers, and their associations across the country grow their membership by delivering membership benefits, networking opportunities and industry education to their members through the community buying group.

And part of those benefits, the reason I wanted him on today to share with you, that part of those benefits are massive savings at places that you're already shopping for your rehab supplies. So please help me welcome to Epic Real Estate Investing, Mr. Ben, Rao. Ben, welcome to the show. Hey, thanks, Matt. Thanks for having me. I appreciate it. You bet. Excited to be here.

Yeah. I love it when I can always, I find new resources, new contacts that can provide a service or a benefit of some sort that can. help advance the audience's real estate investing. And, you know, since we just got done talking to Justin about, you know, his world of fixing and flipping. And I know I have people in my audience that do that. And I just think they needed to meet you because of the money that you can save them. So tell me a little bit about community buying group.

Yeah, yeah. I appreciate it. And, you know, Justin's a great guy, too. Great program as far as getting into fixing flips and looking at stuff that are in or outside to your market. But I've been a real estate investor from my business. 10 years, fixing flipping properties continuously. But four years ago, I started a company called Community Buying Group.

And our number one mission is to help real estate investors to save money on the materials that they're buying for their properties. So very simply, if you're buying materials for properties that you're flipping, we want to help you to get better pricing when you're doing that. So, you know, some of the big names that you would recognize would be companies like Lowe's Pro Services. And our program is nationwide. You know, Sherman Williams, certainly on the paint, and we can go into some details if you wanted to on some of those programs. But we have about 20 different partners, as we call them, like that.

And, again, it's back to helping people to do business better, giving them ideas on what they can be doing when they're rehabbing a project and just trying to help people be more successful real estate investors. Got it. Got it. So give me an idea. If I went into Lowe's, what kind of discounts could I expect? So our program's all over the country, and our program starts at 7% off everything at Lowe's. Okay. And it can go upward to that, and we can teach people about how they can buy a little more strategically. Lowe's has a program if you're buying $2,500 or more that they can save even more than that, and some of our discount stacks on top of that as well. Some people are used to go into the Pro Services desk if they're a repeat customer.

If they are a repeat customer, they need to be going down to that Lumberette. end of the store because those guys are there to help people to find out what their favorite products are, making sure they're helping them get orders pulled and all kinds of other value ads. Got it. Got it. So we have Lowe's where you can pretty much find everything, but then we've got specialty stores like Sherwin Williams where you get your paint in case you all, in case you all

don't know that. Then Sears, we've got over there, so appliances and stuff, I can imagine. Yeah, let's not go over to Sears yet because a lot of people don't realize this, Matt. You know, Sherman Williams, obviously, you know, huge for paint, and that's what they made their name on was all of the paint. But we also have an agreement with Sherwin Williams for their flooring division. And a lot of people don't realize that they're one of the largest flooring distributors in the United States. So they have about 400 warehouses. And for my properties, I have a lockbox on them.

I have a credit card that I just keep on file. And I call them. I give them the lockbox code, or I email my local Sherman Williams rep. and I say, hey, I need to have the carpet redone, maybe in the living room, the bedrooms, in the hall. They measure it. They know what product I want, because I've already told them the products that I want to use, and they do the installation as well.

They finish the job. It's locked back up. I don't have to meet them. I don't have to coordinate it. They bill my capital one card where I get my extra points that they have on file, and it's really easy to use. So that's another one that we're getting people to understand that there's a huge value there. And, of course, those products are all discounted.

Fantastic. Okay, so let's back up a bit. Instead of just, you know, we get discounts, what other services and opportunities are available to your members? Well, we just completed a really fun project where I actually rehabbed a couple of duplexes. We filmed the entire process and created a resource guide, and that's on our website and available to our members, giving them ideas about, hey, you want your kitchen to look like this, here's the skews. We did some other video segments about different parts of when you're rehab. So we're trying to give some people some other ideas on what they can be due during that process.

But we have got a lot of other things. You know, a lot of people are buying, you know, they're in paper printing. We've got Office Max, Office Depot. Build a sign is a great sign company to do all kinds of different signages and magnetics and things. Some other ancillary stuff that people are using like FedEx Office or maybe Hertz rent a car. If you've got people that work for you and trying to kind of build out that brand for

and prints a good one to do things like pins and giveaways and shirts and that kind of stuff. Okay. If people are renting tools, Sunbelt Tool Rental, that's a great one. That's almost 22% off on tool rentals. Maybe they're not renting it, but maybe their contractor is. And that's important to let people know, too, that when they access our program, if they need their contractors to use the program, they can kind of pass it on down downstream. And I guess we skipped over kind of the biggest part of this, Matt, and that everybody that's one of your listeners has access to Community Buying Group absolutely free.

As long as they make sure that they register, you know, through you. You've already taken care of that for them, and so they can have access to our program, and it's not going to cost them anything. They'll buy the materials or services directly from the suppliers or partners. And so there's not really anything for them to buy from community buying group besides we're just helping to market merchandise these programs out to the real estate investment market. Perfect. So you set up a website for me over at epicinvestorbenefits.com. And as long as they go there, the membership is free for them. It is. Yeah, they just need to make sure they go there. Or if they don't use that URL and they go to and they go to our website, they can also redeem the what we call the group ID.

and that is Epic 521. That's Epic 521. They'll redeem that at the top of the page. That'll take them to that same page, whether they use your URL or redeem that on the communitybyinggroup.com website. Got it. Super. All right, so tell me anything that they have to change about their buying habits or anything.

How does it work? Do they have a code? Do they have a membership card or they have to go to a certain website? How does that work? Once you're a member. Once they come to Community Buying Group and register, then our customer service is going to help them kind of get into the programs they're interested in. But for Lowe's, very simply, Lowe's has a commercial card called the Lowe's accounts receivable.

They'll be able to apply for one of those. That's going to give them some billing terms. So they're going to be able to get billed just once a month. It's not a credit card. It's got to be paid in full. But there's some other benefits to that. You get an online tool to where you can see copies of all your receipts. You can put addresses of your properties on those receipts.

free delivery for appliances, free haul away on the old stuff, so they're going to haul away the old fridge and the old stuff out of a property if you're rehabbing it. Sherwin-Williams, pretty simple. During the registration process, you'll tell us that you're interested in having an account there. Or if you already have a Lowe's or Sherman-Williams account, we can get that connected to our pricing too. So if somebody has an existing account, very simply we'll get it connected. They'll start getting the additional discount. Or if they don't have it, they can apply, and we'll make sure it's connected to get the special pricing. Fantastic. Some of the other ones that are in there, like the build a sign and form print,

they're special codes that they're using to redeem those to get additional discounts, Office Max or Office Depot, you're walking to a store with a card. I'll tell you what, if you've got people that are your listeners that are doing a lot of printing, I'm almost certain, I'm going to quote this, it's four cents a copy for black and white copies. So that's a big deal if people are out doing stuff where they're out at networking. events and making copies and prints. And so there's just a lot of different things that they can take advantage of here. They're going to be great benefits for them.

Fantastic. All righty. So anything else? Did I forget to ask you anything? I don't think so. I would just say that we're here not to sell anything to anybody, but to help real estate investors, be better real estate investors. And so, you know, let us help you.

We'll help you save some money, but there's some other resources there, too, from an educational nature and just helping these folks. to do business better. Right. Perfect. So yeah, there's two ways to make money here. You can increase your income or you can reduce your expenses. And that's exactly what Community Buying Group does that helps you reduce your expenses.

So go over to Epicinvestorbenefits.com and sign up for a membership. It's absolutely free. We've taken care of that for you. We make nothing off of that. So that's just our gift to you. Ben, it's been an absolute pleasure. And we'll talk soon. Matt, thanks so much for having me on.

You bet. Take care. That's it for today. Go to Epicinvestorbenefits.com to pick up your free membership and start saving big money on your very next flip. I'll see you next week or catch me tomorrow on Turnkey Real Estate Investing. I'm Matt Terrio, living the dream. You've been listening to Epic Real Estate Investing, the world's foremost authority on separating the facts from the BS in real estate investing education. If you enjoyed the show, please take a minute to visit iTunes and share your thoughts. Thanks for listening to

listening. We'll see you next time here at Epic Real Estate Investing with Matt Terrio. This podcast is a part of the C-suite Radio Network. For more top business podcasts, visit c-sweetradio.com.