The Personal Finance Podcast - How to Get to $10K a Month in Cashflow With Dustin Heiner

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Starting point is 00:00:56 Find your advisor at IG Private Wealth.com. on this episode of the Personal Finance Podcast, how to make 10K per month in cash flow using real estate. Everybody and welcome to the Personal Finance Podcast. I'm your host, Andrew, founder of MasterMoney.com. And today on the Personal Finance Podcast, we're going to be diving into how to create $10,000 a month in cash flow with real estate. If you guys have any questions, make sure you join the Master Money newsletter by going

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Starting point is 00:02:16 into part two with Dustin Hiner. And what we're going to do in this episode is I thought it would be a fun idea to have him coach me live on the podcast. So I'm going to be investing more into real estate over the course of the next couple of years as one of my goals. And I talk through with this with Dustin live on the show. And I said, hey, I want you to come up with a plan for me to be able to make $10,000 per month with real estate investing. Because I think a lot of you out there, that's the number you always come up with. When I ask you, hey, if you could make more money in real estate investing, how much would you need to make? And everybody comes up with a round number of $10,000 per month. So I thought this example would be a fantastic session where you can hear

Starting point is 00:02:55 how Dustin actually coaches people to get started in real estate investing. And so what we talked through is, what if you could turn your money into $10,000 a month in cash flow over the next decade? And that's exactly what we're going to map out here with Dustin, who left his nine to five at 37 by building steady rental income. So in this episode, I bring Dustin into a real scenario. I have 250, thousand dollars available to get started and my target is ten thousand dollars per month within ten years now dustin is going to give a step by step plan to reverse engineer that goal choose the right mix of properties and pace acquisitions so the numbers actually work now a quick primer for you all before we dive in we're going to talk through three different type of rentals and we dive into this

Starting point is 00:03:35 a little bit in the episode but we're going to talk through short-term rentals which are typically about 30 days and the highest income per night but they need active management cleanings and consistent and bookings. You're going to hear me say this in this episode. I just don't like short-term rentals long-term if there is a recession or something else going on. Then we talk through mid-term rentals, which run about one to six months, and these are great for people like traveling nurses or corporate stays. They have fewer turnovers than short-term and are usually furnished and have more stable income. And then long-term rentals are 12-month leases or longer, and they're the most predictable and hands-off with lower cash flow per unit, but they have

Starting point is 00:04:11 solid stability. And so we're going to use these three to design a realistic path to $10,000. And there's going to be simple math that we're going to walk through. If you net $300 per door, you need roughly 34 per doors. If you net 500, you need about 20. And Dustin is going to show us how to blend short and long-term rentals to raise average net cash flow per unit, reduce vacancy risk, and keep management sane. So we're also going to dive into a number of different things on how to go higher and find a property manager. And he gives us some gold nuggets on that as well. So grab a notebook, because by the end of this, you're going to know how to work backwards from your freedom number and build a 10-year roadmap to $10,000 a month in real estate cash flow.

Starting point is 00:04:49 So I am really excited for this. And if you are ready for it, let's welcome Dustin back to part two on the Personal Finance Podcast. So Dustin, welcome back to the Personal Finance Podcast. Thanks, Andrew. Super pumped to be back on. And thank you so much for having me on for the last week's episode. Super great questions. And I just hope that people realize that investing in real estate.

Starting point is 00:05:13 state's actually very, very possible that anybody can do it, and hopefully they can too. Exactly. I highly encourage every single person out there. If you haven't heard part one, go listen because that's going to be kind of the baseline of what we're talking about today. We're going to talk through some of the things that I am personally thinking through when it comes to real estate today. And then we're going to tactically have Dustin kind of show us and talk through some of these lessons that we talked about in part one and show some of the tactics and the things that we can try to tackle here as we go through this process. So Dustin, I'm going to lay out everything to you here. and then I want you to kind of ask me questions and we'll go through this entire process.

Starting point is 00:05:44 So I just sold a business. For those of you listening out there, some of you may know that I owned pickleball facilities and we sold the business to one of our partners. And so now, one of my big goals is to figure out a way to get back investing into real estate. So in my past, I invested in real estate with two cash partners and we would buy single family houses and small multifamily. So the small multifamilys, I'm talking duplexes, triplexes, quadplexes, everything that was considered, you know, very small multifamily. And that's what we purchased. And we would do, you know,

Starting point is 00:06:14 one at a time, really, really strict deal parameters in terms of the way that I structured these deals. And in the end, when we decided to, hey, we're going to just go and invest, you know, in part ways. We ended up selling the portfolio because we had these partners together. And I figured, hey, I can go do this myself. Well, since then, once I sold the portfolio, I started to kind of buy businesses and I haven't gotten back into real estate yet. So one of my big goals is I already have experience of real estate in terms of kind of investing. And so one of my big goals is to think through this process. Now, a hurdle that I have in place is that locally, and this is what you and I talked about last episode, but locally, I am having a hard time finding

Starting point is 00:06:50 deal. So I'm in the Tampa area, which is a hot market because a lot of folks from all over the country kind of moved down here during COVID. And so real estate prices increased. And so now they're kind of at a flat rate right now, but I have not been able to find deals in my specific area. I'm probably haven't looked hard enough yet to be honest, but that is just one thing that is one of the hurdles that I have to jump over. And so you mentioned in the last episode that you kind of invest out of state and you invest in different areas, which is something I've always, always been interested in. And so looking at this, how would you first, if you were in my situation, how would you think about maybe some of the properties that you were looking for?

Starting point is 00:07:24 Because I've also considered commercial and kind of thinking through that process, but I do have experience and all my experience is in residential. And really, I want to invest for cash flow. So I'm going to give you a number. I'm going to try to think through this because, hey, this is maybe good for the title too. But let's just say somebody wants to make me specifically. I want to make $10,000 a month in cash flow, okay? And because I want to make $10,000 a month in cash flow, I want to kind of put a plan together in order to do this. And let's, for argument's sake, because this is also true, I have $250,000 that I want to start investing into real estate. And so this is the starting point for me if we need to do down payments or if we need to do creative financing, some of those types

Starting point is 00:08:01 of things. And so I want to build up this portfolio over the course of the next decade in order to produce at least $10,000 a month in cash flow and probably might, you know, My parameters always change where I always just kind of, the ball just keeps kind of moving higher in my court. So I always just kind of increase that stuff all the time. But let's start at that point in time. And tell me kind of what your thoughts are there. Yeah.

Starting point is 00:08:21 So whenever I work with any student, the first thing we have to realize are a couple things, or not realize, but like help the student to come to understand. Number one, the risk tolerance. You know, are they okay with investing out of state, number one, getting leverage or using getting financing, which we recover just a second. But then also, their goals. And so I definitely appreciate the goal of being able to make $10,000 a month. It's definitely something very doable, especially we're starting at $250,000. In fact, I've

Starting point is 00:08:45 had students that, like, give you one quick example, a pastor in Sacramento, didn't have any money. You know, pastors don't make much money. And so he didn't have any savings, but he said, Dustin, I know I'm not going to be able to work forever. So help me to invest in real estate. So what we did was, I helped him get a HELOC, a home equity line of credit on his house. He tapped into that because he owned it since 2017. So he has a good amount of equity. And then he had $250,000 that he had $250,000 that He has now access to capital, or once you remember those terms, those words, access to capital. Doesn't have to be your money that you slaved away for and saved and, you know, got half a percent or less in a savings account. So his property worked for him, took that cash, bought a property in Atlanta, Georgia, that now property is free and clears because he uses home at Carolina credit.

Starting point is 00:09:31 Well, he might be thinking, well, he's got a payment, right? Yes, he does. But that new house that he bought, he then got it fixed up, got it, rented out, got it managed. And now, I think he was, I can't remember how much, like $600 or something like that, a month of passive income. He refinanced it, pulled that cash out of that Atlanta property, then paid off his E-Lock. Now he has a H-Lock to do it over and over again. So here's the reason why I brought up that story. It's having access to capital.

Starting point is 00:09:55 So for you listening, let's say you might have an IRA. Well, we can do a self-directed IRA. If you have a HELOC or a home that has a little bit equity, we can utilize that. There are countless ways to get financing. But, Andrew, where you're starting at $250,000, I'm going to give you one piece. of advice that you will probably never hear anybody on Instagram or TikTok tell you this that coaches how do people on investment in real estate. What I'm going to tell you is it's very easy to have a perspective of, okay, I get that I could save a little bit of money if I paid

Starting point is 00:10:25 a little bit more for this property. Well, I don't want you to do that because I don't want you to waste your money. Let's say, let me switch it. Let's say you only have $2,500 to invest in real estate. You're not going to be able to just spend willy-nilly. Oh, we can just overspend or we it over, I want you to think of it like you're a business owner. As a business owner, we don't overpay for things. We don't waste our money on things. In fact, we fight for every penny. So, Andrew, that's where you're at. If you have $250,000 or even more, if you have $100,000, it's easy. Just say, ah, let's just throw money at it. No. Don't do that because I want you to build in great investing principles so that you're then going to capture equity. Give you a quick example.

Starting point is 00:11:04 Before I get to that example, we were talking about risk tolerances and goals. You already showed me your goals in last episode. So if you haven't listened to last episode, definitely go back and listen to last episode. I know Andrew has some risk tolerance that he can tolerate getting a loan. He obviously just heard he sold his businesses, which is amazing. So we got that. Now he won his goals, which is $10,000 a month. Now one other quick question before I get to that story, Andrew, what excites you about real estate? Is it commercial real estate? Is it like a short term type of property? Is it long term? Or is it the cash flow that you're looking for and you're open to any deal? I think the cash flow is what I'm mostly looking for and I'm pretty much open to any deals because

Starting point is 00:11:43 my risk tolerance is pretty high. I'm willing to go out of state. I'm willing to kind of go anywhere at this point in time. So I am willing to kind of go whatever cash flows is what I'm willing to go after. I think the one area that I would be less bullish on, and this is just me, probably just my opinion, to be honest, but I'd be less bullish on vacation rentals. I'd rather it be something that's recession proof long term. I 100% wholeheartedly, 100% agree. Okay. So, a follow-up question to that is, okay, so we want cash flow, which is absolutely right. Followed question, have you ever played Monopoly? My favorite board game of all time.

Starting point is 00:12:18 Exactly. Same here. Same here. Awesome. My kids literally, about an hour ago, we're playing it down. We homeschool the kids, and so they were downstairs playing Monopoly. Okay. So, I love commercial real estate, but in Monopoly, how do you win?

Starting point is 00:12:33 Where do you start? You start with just the single family houses. Correct. You get the land. You put houses on there. And eventually you build up to where you get to commercial real estate. Now, you're going to hear other people tell you, oh, yeah, you know, commercial real estate, like large apartment complexes. It's so easy.

Starting point is 00:12:51 If you could buy a single family home, you could buy a large apartment. I'm like, no, that is the dumbest advice. Trust me. No, absolutely. It's so easy to get a 30-year fixed mortgage. Find a realtor or find somebody that wants to sell your property and buy the house. and make cash flow and have money coming in every single month. When you buy in a large apartment complex or a large commercial facility,

Starting point is 00:13:16 there's so many moving parts that are just you don't even think of. Like, oh my goodness, how old are those stairs? And will I actually get a violation from the city? You wouldn't normally think about that sort of stuff or that boiler. So, just like playing monopoly, I suggest that you start with single family homes. It could be, and when I say single family, it's four units and below. When I say commercial or multi-family, it's five units and above, because that's the way mortgages are looked at. Four units and below, you can still get an amazing 30-year fixed mortgage on.

Starting point is 00:13:50 That's why I love 30-year-fixed because after 30 years, it's paid off and it's lower interest rates, all that sort of stuff. But four units, so whenever I say single-family home, realize this. Dustin's saying, four units and below. So check. That's what we do. We start there. Now, one quick last thing, because I want you to share. I'm going to add another question for you.

Starting point is 00:14:04 So I've talked to a lot of quote unquote multifamily investors. They're called syndicators. They basically just syndicate a deal. They're flipping multifamily. That's all they do. It's really, really sad. Somebody I was talking to, they had 4,000 units. Remember, I had 30 single family homes.

Starting point is 00:14:24 I do have 800 apartment complexes, but that's not, my apartment complex is units. That's not what makes me financial independent. What does make me financial independent? My 30 single family homes. Now, when you look at the property that this person said they had 4,000 units, I asked them, how long ago were you financially dependent? When did you become financially independent? And she says, oh, I'm not.

Starting point is 00:14:43 I still got to work a job. I'm like, wait, you've got 4,000 headaches that you have to deal with and you're not financially independent. What's going? So here's what I say. This is my perspective. If you want cash flow, nothing better than single family homes. If you want to have generational wealth, nothing better.

Starting point is 00:15:03 than single family homes. If you want to scale, then there's nothing better than single family homes. When you play a monopoly, you start with single family homes, eventually you get to multifamily. It was only after I was financially independent for like, I don't know, 10 years before I finally said, okay, let me go ahead and get into the apartment complexes. Now, don't get me wrong. Apartment complexes are great that eventually you'll have pay off, but you don't get cash flow. Does this all make sense? It 100% makes sense. And I will tell you up front that I, and I said this in the podcast before, single family homes were by far my favorite place to invest. Why? Because A, the tenants usually were just better tenant overall.

Starting point is 00:15:35 And B, they had less headaches, which obviously isn't going to be my problem as we start to talk through this in a second. But C, they would stay longer. They would stay, you know, five, six, seven years some of the times. And so I really love single family homes for that purpose. Yeah. So what I love is if you're investing not in your area,

Starting point is 00:15:51 but you're investing out of state. The reason why I love investing out of state is because I'm a doer. If there's a property like in my city that somebody's all the clocked toilet, I'm going to go there myself and do it. But because it's out of state, I don't have in my brain. Like it's not in my brain to ever go do anything. So I make sure that I afford or how I say it,

Starting point is 00:16:11 all the expenses are covered for any repairs so that if there's ever repair, I don't have to think, oh, shoot, can I afford this? No, no, no, I've already covered those expenses every single time. I bought the property and then every single month I get cash flow coming in and I can also pay for repairs. Now, and thinking about single family homes,

Starting point is 00:16:30 if you're looking, okay, I want to get 10, thousand dollars a month in cash flow, then we're probably looking at close to 20 single family homes that are making $500 a month in passive income. Now, to get there, it's hard to go from one property to 20 if you don't start right. So definitely go back, everybody, I want you to go back and listen to last week's episode where I talked to you about how to build the business right, how to start with building a business. Because if you build the business first, then you can scale. Because if you are managing your properties on your own, Andrew, you know you're going to pulling your hair out eventually, you're going to be like, oh my goodness, I have so many calls.

Starting point is 00:17:06 I have six properties. And there's six problems going on at runtime. I have my businesses got out. I got my kids. You don't want that. You want somebody else's business to run that. So what I'm suggesting is if you want to get $10,000 a month, first we build a business, which means we find a good city to invest in that has a lot of inventory, three bedroom, two bath, 1,200 to 17 under square feet. And I explained more in the last episode. So definitely go check out last episode. But what we do was we find that one property. And here's my suggestion. If you really want to hit the $500 or more a month is we're going to be looking for midterm properties. Co-living is great. Don't get me wrong. Co-living is great. You're going to make a lot of money, but there's a lot more moving parts,

Starting point is 00:17:46 a lot more leases. That's where you rent out each room. But if you want the best of both worlds, long term, as well as short term, short term, you have higher rent or they rent up per day, so you make more money. But there's a lot of turnover, a lot of wear and tear on the property. When you do long term, it's so much easier. It just does work for you. The people take care of the property, but you make less money. He's a medium one, I think. I would love to see you invest not in a really run down, like a D area, but like a C plus area. And you're going to take that $250,000. We're going to start scaling by buying a first property with a down payment. We're going to be making a midterm or making that property into a midterm property. Let me give a big example. So I have one

Starting point is 00:18:27 property in Peoria, Arizona, just next to Phoenix. And I could rent it for $2,000 a month long term. But I just put furniture in it and then I pay for the utilities as well as internet. I'm renting it now for $3,600. So $2,000 to $1,600, now my expenses are maybe $400 or $500 a month at most. That's like the highest, hottest part of the year when it's the highest electrical rate. So I'm at least making $1,000 more in my midterm rentals on the bad months. On the good months, I'm making like $1,300 more. So that's my suggestion is we look for cities that are like Nashville would be a little harder, like the big metropolitan areas, really priced high. What we want is outlying areas, tertiary markets that are like cities that are like 20 minutes away. People still live there.

Starting point is 00:19:16 There's still businesses there. There's still nurses and all that sort of stuff. Midterm property is going to be the fastest way to get where you want to go. I remember when I needed to hire someone fast, but finding the right person quickly felt impossible. And if you've ever been there, you know how stressful this can be. That's where Indeed comes in. When it comes to hiring, Indeed is all you need. Instead of struggling to get your job post noticed, Indeed's sponsor jobs help you stand

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Starting point is 00:22:18 Luckily, Jeff's saved with Amazon and stocked. up on antacids, ginger tea, and milk. Habaniero, more like habanier, yes. Save the everyday with Amazon. How do you feel about midterms in terms of like long term and the longevity of those? Have they been around forever? How do you think about that? So the great thing about midterm, actually, no, let me say it this way.

Starting point is 00:22:40 What I love is to teach my students, we do not buy a property unless we can rent it for long term where we're still making cash flow. Like that's our fallback. If everything falls apart, well, we could. long-term rent it and not lose money. So if you're going to bear minimum $250 a month, like that's worst-case scenario. I have a long-term property. We could rent it for $250 a month.

Starting point is 00:23:00 But then again, you think in five years rent's going to go up, 10 years. Rents are going to go up. So you're going to be better off, buying it now than waiting. So that's number one. I tell all my students, we buy a property and we don't buy it unless we get long-term rent it. Then we have an option to do mid-term rentals. The reason why I love mid-term rentals is you're not going to have any regulations from the city

Starting point is 00:23:19 or the county, they're not going to stop you from renting over 30 days. They will stop you for one to two days because hotels, they're losing money, so they're lobbying, you know, get all these regulations and stuff like that. So if you do 30, 60, 90 days or instead of a 12-month lease, I personally think, and I have not, I'll say it this way, to help you to understand my perspective, midterm has not been around since 2008. In fact, it started coming around 2016-17. People had been doing it, but now it's coming more mainstream where a lot of

Starting point is 00:23:49 people are doing it, a lot of nurses. And so they're still out there. And so I have not seen a down cycle with midterm. Now, when COVID happened, midterms were still fine, but short terms, they were struggling because people weren't traveling. So people still have to work someplace. So when they're short term, they're traveling for a vacation or a wedding or something. So those can go by the wayside, but somebody who's going there for work, you know, traveling executives, nurses and stuff, they have to be there. And the government's not going to shut them down for being able to live. No, but I have to live there. So that's where I'm a little caveat is I have not seen a huge down cycle like 2008 with midterm, but I am 100% in with midterm rentals as well as my long term.

Starting point is 00:24:29 Short terms are great. Don't get me wrong. But in the downturn, they're going to be hurting really, really bad. Perfect. And I think that's something for sure because of the cash flow differential. I think it's definitely worth it. And if you have that downside protection of being able to rent it out for long term, I think you're still going to get the same cash flow as you would with any other long term. So I think that's great. Absolutely. If you're going to be finding homes, thinking about like your perspective where you're going with $10,000 a month in passive income, $250,000 starting with, as well as you're okay with a little bit of leverage, you know, getting loans on this property as long as you're making money every single month from that

Starting point is 00:25:00 property that's going to be putting cash in your pocket, then I can't think of any specific city right now, but if you think of any big metropolitan area, Nashville's one, Orlando's another, let's see, other big ones, Indianapolis. Do you think of like big cities? go outside of those cities that are maybe, like I said, 10-minute drive, 20-minute drive outside, let's say 20 miles, outside of that. And the reason why we like those markets is there's still a lot of people that live there. There's still a lot of people that travel there for, like I said, weddings or graduations or funerals, or you name it. There's a reason why hotels are everywhere. So think of that. And so with midterm, you still have a good city that has a lot of people. Nurses, the one that I have was amazing. in Peoria, this company found me on Airbnb. I was renting it for 30, 60, 90 days. And they booked it for 90 days, which was great.

Starting point is 00:25:53 And then in the middle of it, they said, hey, Dustin, we want to rent it for 12 months at the same lease. So it's going to be a long-term lease, but we're going to pay the same rate. I'm like, please, absolutely. So I got $3,600 for 12 months. Yes, we can, I'll lock it down for you. And so what I find is, like I said, so Phoenix is a pretty big area. Peoria is a smaller area, but it's still so pretty big.

Starting point is 00:26:13 So what I'm suggesting for you is we want to get accumulate. If we get to 10 midterm rentals more than likely, and one quick thing, you're going to find property managers that will manage it. You don't have to do this all yourself. So trust me, we'll be able to take care of that. We're not doing all the work. But if you get to 10 rentals that are midterm, more than likely, you're easily going to hit that 10 grand. If you get 10, now, these have to be in good areas that are, you know, people are traveling to and all that sort of stuff. But honestly, if you take that $250,000, I don't think you're going to be able to take that $250,000 to buy all 10.

Starting point is 00:26:43 but over three, four years by markets going up. You could refinance, pull some cash out, save that cash flow to buy more properties. That's one thing I try to tell everybody. This is not a get rich quick scheme, but this is a get wealthy plan. Just little by little. We just keep buying and buying. So in the first year, I could see you at least getting two or three in the first year in the same city. You start accumulating it.

Starting point is 00:27:05 You get a property manager. So I could easily see you start doing that. Absolutely. I think that's a perfect starting point because I think overall we're looking at this. and we want to just, because that's the way I am. I want to get, you know, I like base hits over and over and over again. I don't try to swing for the fences every single time. And so I think if we can find them, you know, somewhere in a tertiary area that's right outside

Starting point is 00:27:23 that big metropolitan area and we can get this ball roll. And I think that's the great starting point. Now, to find some of these deals when we want to go through that process, is there something you recommend since it is out of state. This isn't something that's local. Like I know everybody in the local area here, but because it's out of state, how do you kind of think about that when you find those deals? You're talking about finding.

Starting point is 00:27:41 Exactly. So like if I want to go, say I want to get started, like say I choose a location. Let's just say, you know, we look for a location. Let's just use the Phoenix area as an example. And it's right outside the Phoenix area. And we want to find some of these midterm rentals. How would you go about looking for those if it is a new area that you've never invested in before? Got it. So the number one thing is I do not look at properties. I do not have anybody send me deals until I know there's going to be somebody that can manage a property like for months and months and years and years and years. So I, I even flown to, and this is, I don't fly anywhere anymore. This is back when I first got started. I flew to a city to try to start finding properties and find a property manager. I couldn't find a good property manager that I liked, like, meaning this was Springfield, Illinois. There probably are some great property managers, but I couldn't find any that I thought I would want to work with. So I didn't invest there. The reason why is I might have found a great property, but I don't want to manage a property. So what we do, let's say if it's Phoenix or the Phoenix area, because it's a very, very big area, what I would start doing is looking for property

Starting point is 00:28:41 managers that manage midterm and long term. And if they manage midterm, they're definitely going to manage short term. But if they're management for long term, they might not do midterm or short term. They're just long term managers. So if you find somebody does short term, they will do long term. So long term and midterm. So here's what I would do. Phoenix, I'm going to get a list of 10 of the best property managers that I find on Google or Yelp or whatever. I try to find the 10 best property managers. then I would interview them and I would interview them many times. Just like if you're, actually I said this on the last episode, again, go back and listen to it, but I share this analogy of starting a convenience store where you build up a business.

Starting point is 00:29:20 You would not build up an entire business, a convenience store, lots of money, thousands, thousands, hundreds of thousands into the business and then see somebody walking across the street and say, hey, you got a pulse. Come in here and manage my property, manage my company, manage my inventory, business and money. No, you wouldn't do that. You would interview very, very, a lot of people. and a lot of times. And so what I would suggest,

Starting point is 00:29:41 you find a good city like Phoenix, the next step, literally don't do anything else. Don't look for realtors. In fact, I get students say, I've coached thousands of students now. A lot of them say, hey, Dustin, I found a great city to invest in. I've already got six realtors setting me deals.

Starting point is 00:29:53 I'm like, oh, my good, no, no, stop. If you bought one of those properties, who would manage that deal? And I said, uh, nobody. I'm like, okay, you're putting the cart before the horse. And in the last episode, I shared the financing, getting money to buy the property is very easy. In fact, if you're worried about money, trust me, or credit, trust me, those are not hard.

Starting point is 00:30:12 I will blow your mind of how many ways that you can get financing. So don't worry about that. And then finding. Finding is very, very simple to find the properties. What we need, though, is somebody that can manage these long term than making money for us. I don't want to talk to my property managers. In fact, I just want to check. I want them to run the business and send me a check every single month.

Starting point is 00:30:31 If I have to talk to a property manager like once or twice a month, I'm like, what I'm going to hire you for? I might need to find somebody else because I don't want to talk to you. want you to send me money. Does that all make sense? It does. And I think that's the big key component. So when you start to have those conversations with them, is that something where you're saying, hey, I'm going to invest in this area and you want to start to interview them based on that? Or how do you get them to talk to you without them thinking you're wasting their time? Fantastic question. And here's another thing that I tried to help my students to realize. So when my students start calling property

Starting point is 00:30:57 managers, they will sound like new investors. This is what they'll sound like, uh, hi, property manager, I'm going to start investing in real estate and I'm building my team. And you've used this word too. I'm not looking down on it. But that's a buzzword for property managers. Because everybody's talked about teams and when a property manager or even a realtor, that's the first thing that they hear like, oh, here's a newbie. Oh, I don't want to work. That's literally what's going to happen. Now, if you're the property manager, Andrew, this is what I would do if I were an investor talking to you as a property manager. this is literally I get on the call

Starting point is 00:31:34 if I'm going to find a high property manager my name's Dustin Heiner I invest in real estate I'm looking to find a good property manager tell me about your services that you have do I give any clarifying about me or any no no no it immediately puts them on oh I have to share like about me and I like that gets them excited

Starting point is 00:31:50 oh this might be a good prospect they're not thinking oh my goodness I got to help this newbie invest in real estate so that's the way to do it and then you just start talking to them drawing information out of them as opposed to because usually what we try to think is, I have to prove myself to this person that I'm good.

Starting point is 00:32:06 No, no, no, don't do that. You just literally go straightforward and be straightforward and to the point. Awesome. That's super helpful. So let's say we find that, that manager. That manager's in place. What else would you do next? Next up is absolutely finding the financing.

Starting point is 00:32:21 Now, I'm not saying go to Bank of America, or you know, big, big bank, and that's where you get to financing. In fact, I've used over 20 different ways to get creative financing. When I talk about creative financing, it means I didn't have to work my life away, save up for 20 years to then borrow money that, you know, use my savings for a down payment and borrow money. I didn't have to do that. What I did was I recycled my money over and over again with getting other people's money. OPM, I love that term, using other people's money. You give them a great return on their money.

Starting point is 00:32:52 They're happy. And then you get your property and you're happy. It could be private money lenders, hard money lenders. Obviously, we have regular conventional loans. commercial loans, a DSCR loan is amazing, a debt service coverage ratio loan. It's a commercial loan set in conventional terms, meaning a 30-year fixed, which is amazing. But the property is what guarantees the mortgage, not you working a job. If you go and buy a single-family home to live in, a primary residence, the mortgage broker is going to say,

Starting point is 00:33:23 do you make enough money and I have a proven track record to pay me back and then I'll bar you the money? No, DSCR loan doesn't worry about that. that the property, is that property good enough? Are you buying it for a low amount? Are you going to be able to rent it for us to make money and that property going to cover it? Then great, we'll give you a loan. And homemaker on a credit, self-directed IRA, you name.

Starting point is 00:33:42 I hesitate to share this because it's an advanced strategy. I do these two things. Number one, I've used a signature loan. That's where you walk into a bank and get an unsecured line of credit to buy real estate. I've done that. I've even used, this is the second one, a credit card. I used a credit card cash advance to get cash to buy the real estate. but here's the reason why I could do it.

Starting point is 00:34:01 It's access to capital, and there's a cost for that capital, and I accounted for that cost before I bought the property. I knew if I borrowed this money, my business, remember we're building a business, go back and listen to the first episode, we talked all about that, but my business is accounting for that expense, just like analogy I gave, if you could buy a candy bar for 50 cents and sell it for a dollar, you'd be thinking, how do I get more 50 cents to buy more candy bars to sell it for dollar? Well, if it costs you 25 cents to borrow 50 cents, it doesn't matter.

Starting point is 00:34:31 It costs 25 cents. You're still out of pocket 75 cents. Somebody else is paying you a dollar. You're pocketing 25 cents. So hopefully I'm breaking the idea in your head that you need money to invest in real estate. There's so many different ways to get the money to invest in real estate. Absolutely. I think that's one of the most powerful things is how creative you can get with your financing.

Starting point is 00:34:50 And just there's so many cool ways that you can do that. So we have the financing in place. And say, for example, you know, we have our property manager. Then we get the financing. Then what would you kind of consider to do next, or the next big, you know, final steps so we can start to actually buy and find deals? Yeah. So once you have the property manager, they're going to be the ones verifying that you're buying the right property. So that's why we go property manager number one.

Starting point is 00:35:12 So I've had lots of people come to me. Say, Dustin, I did everything those TikTok gurus told me to do. And I tried to find a property manager. And every property manager I called, they told me they would not manage it could they get shot there. Like, oh, you don't have any, you don't have asset anymore. You have a liability. what we do instead instead of after you've bought the property spending thousands of dollars to buy it thousand dollars to fix it up and then finding a property manager instead of that what you do is you find

Starting point is 00:35:37 the property manager first and say instead of i already bought this property no you don't say that you say i'm looking to buy this property tell me how much will it rent for will you manage it what's the clientele like what's a vacancy factor and all that sort of stuff and what we're talking about the 30 60 90 days the midterm rentals you ask them about that would this be a good 30 day rent oh yeah there's a hospital that's like, you know, three miles away that we probably, and there's a bunch of commercial buildings that are right here that they need a lot of employees, so they're a place, flight, they're going to know that sort of stuff. And so when we do is we find the right property manager? And then we ask them, is this a good property for us to buy?

Starting point is 00:36:15 And here's one thing. I give this in the private coaching, but I'll give it to you and all the students. So number one question you need to ask every single property manager, even the ones you're not going to work with. You just need to know, get a idea. You want to ask this question. If you were to invest your money right now in the city that you manage, where would it be? Because they're going to give you gold. They're going to tell you exactly where that you should invest. And then you just piece it all together. So once you find a good city, make sure you find the right property manager.

Starting point is 00:36:46 Then you find your mortgage broker. You find financing, and we could cover all that in a later thing. But make sure you can buy the property, which is very simple. We can take care of that. But then when you're looking at properties, you want to make sure that. the property manager signs off on every single property before you even put in contract in because they're going to make sure you buy the right property. Does that make sense? It does. And I think that is probably one of the most valuable questions that you can ask,

Starting point is 00:37:10 especially in an area that you're newer to is making sure that you have somebody in your corner who can help you through that process. And really, it's not someone like a realtor. It's someone who actually knows the rents and who knows and understands how, you know, rental properties work. And I think this is really, really important. A lot of people make the mistake of like, trusting in their realtors or in some of them are knowledgeable, but most of them are not thinking about it in the same way that you are. And I think that's really, really important overall for most people to understand. So this has been super, super helpful, Dustin. And I think as we start to go through this, is there anything else that you think I should be doing as we kind of progress

Starting point is 00:37:45 through this? Yeah, as you go through it, so what you realize is, and you said this at the very beginning of the first episode, is how do we scale? That's the number one thing that we need to realize as business owners, you know, if you're a mom and the pop, you're not going to scale just the way it's going to be because you don't have time. You literally don't have enough time in the day for school, if you're going to school, for work, for your kids, whatever it might be, and then to manage the properties and take care of all that. So what I want you to be thinking about is how do I then scale the business? How do I make sure that I have deals or properties coming to me? And I talked about this in one of the last episode, we tell every single person that we're an

Starting point is 00:38:21 investor. So deals come to us. Then how do we get unlimited financing? I love teaching my students. I have 20 different ways to get financing, but unlimited financing for your real estate, we start putting in place all these different aspects of, do we have this contact for mortgages, how about private money or hard money lenders, do I have a home that I can get HELOC on now? Do I need to get a self-directed IRA set up so I can keep everything in my IRA? There's so many different things. So we start working down that path. And then what we do is after we have everything, you're going to realize when you get your property under contract,

Starting point is 00:38:52 your property managers are already signed off. You know how much you're going to rent for a month. You already know everything because they're going to tell you all that good stuff. But then you need to have inspections, making sure that the home is inspected, then you need to make sure how much it's going to cost to fix up. There's so many, you know, we can go down that rabbit trail of before you buy the property. But once you buy the property, you close on the property, you send your money in, they give you the deed and you take over the property. That's when you get all of your team to work. You don't go there and fix it up.

Starting point is 00:39:18 You get everybody else. Like your property manager, if they're the contractor too, get them to fix it up. If you hired a separate contractor, you get them to start work on it. But then right away, you get your property manager realizing we're going to list this very, very soon. In fact, we should probably be fixed up in two months. At most two months, maybe two weeks. Like, it just depends on the property. It depends on how long it takes to get the furnishing and all that sort of stuff.

Starting point is 00:39:41 Get ready to take pictures. Because I don't want you to be waiting because if you, oh, I can't get there for another week. Like, I told you two months ago. We're going to be ready. At this date, you be ready. And then you list it on, let's say, if it's midterm, I love furnished, finder.com get an account set up there. That's where lots of child being executives, tribal nurses, they look for properties there.

Starting point is 00:40:03 As well as you put it on Airbnb as a 30, 60, 90 days. Like the minimum is 30 days. Then you're going to find good properties, or for, sorry, good people, tenants to come and rent your property. But that's really it. Then we start letting the team or our business work for us, getting the people inside those properties, as well as if you find a good property manager, you're not even going to put it on Airbnb or a VRBO or furnished finder. They're going to be the ones finding the tenants for the midterm. In fact, I have one property that I was going to go with the property manager. And it didn't because I already got rented.

Starting point is 00:40:36 It was great. So I didn't have to worry about it. But anyways, long story short, he was going to find all the tenants for me. He was going to take care of everything, like all the turnover. Like, it's just set it and let that business run. You just verify everything's working. That's the, I think the huge key is overall, that's what I'm looking for to is I think overall, I want it to be a set it and forget it type thing where obviously they're just checking

Starting point is 00:40:54 in with me when I need them to. and making sure that we are on the same page on all this stuff. But setting up those parameters and putting those systems in place so that your business can run itself. I think that is one of the most powerful lessons that you are teaching to all of us as we start to invest in real estate is taking yourself out of the equation and making sure that you can automate the process so that you don't have to spend your valuable, valuable time learning how to just do all these other various things that a property manager could do for you.

Starting point is 00:41:20 So I think that's super, super powerful. And all you've got to do is manage the property manager as time goes on. So that's one of the best things overall. Well, Dustin, this has been so incredibly helpful. Thank you so much, again, for being in this part, too. And for people who have not heard about you or the stuff that you do, where can they find out more about you? So last time I gave away my free course.

Starting point is 00:41:38 You mind if I share that one more time? Sure. Go ahead. Awesome. So I just want to help one million people. My goal in life is helping a million people to invest in real estate. Get my real estate investing course completely for free. Show you to find an area of the country to invest, how to build the business,

Starting point is 00:41:51 how to scale it to quit your job. if you text the word rental, R-E-N-T-A-L, rental to 33-7-7-7. Rental 3-3-7-7-7. Or go to masterpassive income.com 4-slash free course, all one word, but I'll give it to you completely for free.

Starting point is 00:42:07 I even have my podcast with Andrews coming on and share it about his real estate investing. It's basically a solo show. It's called Master Passive Income, and I've been doing since 2016, just giving out all this coaching. I just like, this is so much fun for me to be able to give all. So go check out Master passive income.

Starting point is 00:42:22 I've had students literally binge the entire 400 episodes. I have 4,100 plus now, but it's just mostly a solo show. But they listen to all of it and they realize, oh, my goodness, I can invest. Yes, this is what I had for. But YouTube, find me, I got a bunch of coaching on there. But one of the quick one was Instagram is getting a lot of fun, getting 240,000 followers now, just didn't buy any of those, no bots whatsoever, just literally hard worked. But yeah, the Dustin Heiner, T-Henner, T-H-E, Dustin Heiner, love to connect with you to say,

Starting point is 00:42:51 hey, I was listening on Andrews personal finance show and I'd love to connect with you, but that's my goal, is just help as many people as I can to invest in real estate. But thank you so much for having me on. And thank you so much for being here.

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The Personal Finance Podcast - How to Get to $10K a Month in Cashflow With Dustin Heiner

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