Seemingly complicated, real estate investing always comes back to the very basic, yet often overlooked concepts. As we are approaching the best time of the year for growing your portfolio, we decided to go over those concepts and give away the 5 secrets of turnkey real estate investing that will set you up for a winning season. Learn how to use the upcoming period to grow your business, how to set up specific goals, and why managing your own properties is a nightmare.
What You Will Learn About 5 Secrets of Turnkey Real Estate Investing:
- The first step towards escaping vicious 9 – 5 mentality
- Where and how to register for the opportunity to work with us on creating your own lead machine
- Why spring and summer are the best seasons for growing your portfolio
- What knowledge means for real estate investing
- How to set clear and specific goals
- How Mercedes came to understand the importance of cash flow
- Why and how you should diversify your portfolio
- Why trying to manage your own properties is a bad idea
Whenever you’re ready, here are a few ways we can help:
Work with me One-on-One
If you’d like to work directly with me on your business… go to REIAce.com, share a little about your business and what you’d like to work on, and I’ll get you all the details!
- Would you like to meet in person? Our next live event is right around the corner! Go to EpicIntensive.com for the details.
- Become an Epic community member at The Epic Real Estate Investing Show
One of my favorite things to do is share with investors the latest and greatest tactics and strategic friends I make. I do it every week and you can listen in by subscribing to The Epic Real Estate Investing Show podcast on iTunes – Click Here.
- Grab my book, Epic Freedom ($1)
I frequently hear from people looking into investing in real estate for the first time, “How long is it going to take?” So much so, I wrote a short book about the 2 easiest and fastest strategies to a paycheck in real estate. You can grab a copy for $1 and I’ll pay the shipping – Click Here.
- Join our Badass Investor Program and be a Case Study
I’m putting together a new Badass Investor case study group at Epic Real Estate this month… stay tuned for details. If you’d like to work with me on your real estate investing, go to FreeRealEstateInvestingCourse.com to get started.
- Also, check these out:
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Speaker 1: Just working at a nine to five job isn’t cutting it. I used to have a mentality where you were supposed to get a job, get out of debt, pay off your house, pay off all the loans that you have. Go to school. I wanted more than that, and I stumbled across Matt’s podcast. It was just fantastic. I also am a firm believer in the people who have done it are the ones you want to follow.
Matt Theriault: Hey, rockstar. Matt here. Probably don’t have to tell you this because you do listen to this show, but just in case, you do know that lead generation is the engine that runs a real estate investing business, right? I mean, if you don’t have consistent leads, you won’t have consistent opportunities. Without that, your bank account is going to go up and down, up and down, just like a roller coaster. But, if you know the best sources for leads and how to automate the flow of them, your income can be nice and steady, to a point where you can then focus more on causing your income to grow rather than losing sleep over those money peaks and valleys. Let me show you how to avoid this feast or famine income flow in your business to make sure that your stress levels stay nicely in check. There are three things you have to do so your business doesn’t turn on you and drain your bank account dry. You’re going to want to take a look at epicintensive.com and register to join me in person for the next Epic Intensive in Manhattan Beach, California. It’s the nicest beach city on the west coast, by the way. That’s on July 18th through the 20th. This is going to be the last Lead Machine workshop before we change it up for 2020 and seating is limited, so if you don’t get in on this one, that’ll be all she wrote.
We’ll be on to the next thing next year. Right now, for a limited time, you can only get access at epicintensive.com. Right now, you can get two tickets for just a very small, fully refundable seat deposit. At the Intensive, you’re going to learn the essentials of a really good automated lead machine. We’re actually going to work together on creating your very own that you’ll be able to bring back to your market and put it to work. In fact, we’re going to turn your weak lead generation into the strongest part of your business. Imagine what’s possible when this is true for you. But remember, access to The Epic Intensive is only available for a limited time. When the seats are gone, they are gone. That’s July 18th through the 20th, and it’s California. It’s the beach. It’s the middle of summer. Bring the family. Make a vacation out of it. But, don’t delay. Go to epicintensive.com and register today.
Speaker 1: This is Theriault Media.
You want to be a real estate investor, but you don’t want to do the work. If there were only a way where someone else could do it for you. Now there is. Tune in here each and every Tuesday on The Epic Real Estate Investing Show for Turnkey Tuesdays with your host Mercedes Torres.
Mercedes Torres: Hello, and welcome. Welcome to Turnkey Tuesdays, brought to you by Epic Real Estate Investing. My name is Mercedes Torres, and I am lucky enough to be partners in crime with Mr. Matt Theriault, the gentleman who created The Epic Real Estate empire. If this is your first time here, glad you made it. Make yourself at home. I created this show for buy professionals, or busy people, just like you, who understand the importance of real estate but don’t have the time or the desire to learn every little nuance that is to learn about real estate investing. This show is for busy people just like you, so you can get started on your journey to real estate investing. For my listeners that listen every single week, welcome back my friends. Glad you made it. It’s no secret that I hop on the phone every week with many of you and by the way, the emails that you send me add just the connections I absolutely love. Keep them coming. I welcome all of the emails. I am a little behind on answering emails. I’m about two or three weeks behind, but trust me I will get to you. Sometimes it takes me a couple of days, sometimes it takes me a couple of hours. Sometimes it takes me a couple of weeks, especially if I’m out and about speaking on the real estate speaking circuit.
That has been the case and combined with spring break, I’m a little bit behind, but I will get to all of your emails and I thank you for reaching out and giving me just amazing feedback of how this show resonates with you. As I often share, it’s no secret that I hop on the phone with you and I share questions and stories and situations that I think will relate to you. All the time, I bring them to the show because what I’ve learned is it’s very likely that you have the same questions that get asked of me via email or via phone, so I thought I’d share them with you. As we move on to the summer months, if you’ve been thinking about pulling the trigger on an income property or two or maybe expanding your portfolio because you’re a little stuck, it’s important to understand that this is one of the best times of the year to score an awesome deal. Well, because of two reasons. In most cash flowing markets, reason number one, this is a great time because generally, people start to think about moving in the spring and summer months because during the summer, well kids are out of school.
This is a good opportunity for parents to relocate themselves to either a better school district or something new across town. So, this is about the time where people start to think about moving, thus think about either selling their houses or renting your house. That’s reason number one. Reason number two is something called weather. Like snow. Well, as it turns out, I live in souther California, where it is literally almost 75, 80 degrees 365 days a year, and that’s not necessarily the case in the midwest and in some of the south, where it turns colder during the winter months and it starts to snow. Generally, people stay indoors when it snows. Now, if it’s Matt and I and Mateo, we see snow and we want to go outside and play in the snow. But, that’s not the general consensus where people have lived in snow their entire lives. They tend to kind of nest in their homes. The reality is, rehabbers don’t like it when it snows. Contractors don’t like to work when it’s cold. Basically, real estate investing activities, well it slows down during the winter months, but people still need to sell so their wheels start to turn during the summer months because they want to avoid making a move during the winter.
A lot of activity in real estate starts happening in the spring and in the summer, and that’s one of the second reasons that this is one of the greatest times to start either investing in real estate or selling an asset that may not be performing so well. This is where, my friends, I encourage you to take those low yielding assets if something is not performing and turn them into assets that do begin to perform. Generally speaking, people start to move during these times, during the spring and the summer, just to avoid the massive coldness that tends to happen during the winter months. So, a great time to take your first step or your next step to pick up an income property, an investment property or two, and likely, in the fourth quarter, it’s a good time to even consider buying before the winter so you can take advantage of those tax deductions. Now, you can experience great profit centers in real estate through tax deductions, and this is the time where you should absolutely dive into it. This is a great time to get off the fence. Pick up the pace. Start building your real estate investing portfolio. This is a great time to do it.
Real estate investing, it’s not as complicated as some would lead to believe. Sure, there are a lot of details, and we can implement some pretty complicated system when it comes to real estate investing, especially when it starts to get going, but the truth is, the business of real estate investing always comes back to the very basic. That basic concept of real estate investing, just the basics, they frequently get overlooked. That said, today I’m going to to go over some of these basic concepts to get us refocused on the elements that make up the core of investing and the core of the real estate investing business and give you a boost to get into your first or your next deal. Let’s do this.
Five secrets of cash flow real estate investing. Actually, I’m going to say it’s five forgotten secrets of turnkey cash flow real estate investing. That’s a handful, right? Awesome. I’m going to get into it guys because the basics, that’s what gets everything going. Basic rule number one, knowledge is power. It’s a phrase you’ve heard since you were a child, and we say it a thousand times. Matt repeats it on the podcast all the time. It remains to be so true in the very adult world of real estate investing. As an investor, knowledge is your ability to process and act on your knowledge. It’s the greatest strength that you will have. Ultimately, your ability to make good decisions is at stake, so knowledge is power. In order to understand whether or not you’re looking at a good deal or not, it depends on your ability to process the information. Now, this is one of the very main reasons why Matt and I invest in our own education. To this day, we still invest in mentors and we still invest in coaches because we strongly believe knowledge is power. The more information you have, the better your ability to analyze the information and the more likely you’re
… able to make a deal that results in profits. At the end of the day, my friends, profit, that’s the goal. Every investor should be excited about that idea. Profit and cash flow. Knowledge is power. The more knowledge that you have will allow you the ability to analyze deals to make them the most profitable ever. That’s clear and concise, right? Awesome. Knowledge is power. That’s rule number one, or basic number one.
Basic number two, set clear investment goals. This seems so obvious. I say it all of the time. Be crystal clear on what you’re trying to achieve when it comes to real estate investing. When it comes to anything, to be quite honest. When I talk about clear investment goals, I want you to be honest with yourself. Not many people do a very good job at thoroughly analyzing and outlining their goals, explicitly identifying and documenting your specific goals. Some people want to jump into real estate investing because of tax deductions. Other people need cash flow because they’re trying to get out of the rat race. Some people think, “Okay, I want an investment property to pay for my children’s college education.” Whatever it is, just thinking about it isn’t enough.
Telling your friend, “Oh yeah, I plan to make a lot of money in real estate investing. I’m going to buy passive income,” no! It’s not enough to just talk about it. You have to get specific. Talking about it will not get it done, not in real estate, not in investing, really, not anywhere in life. When I talk about setting clear and concise goals, it just means to look at what you need first, where you want to be. Second, where you currently are. Third, identify the roadblocks that could interfere with reaching those goals. Be super realistic with yourself. If it’s time, or if it’s money, or if it’s knowledge, be very clear about what that roadblock is. Only getting specific to why you want to invest in real estate for a profit, or for income, is going to make all the difference in the world.
Then, we need to create a step by step action plan for that journey to create that specific goal. Once we have that clear and concise goal in mind, then, a step by step action plan to meet our cash flow goals is going to be easy. Ladies and gentlemen, let me be specific. This is absolutely doable, it just has to be crystal clear. The more crystal clear it is, the easier it’s going to be to achieve. It’s very, very simple. In fact, it’s so simple that most people will disregard their importance and not do it at all. Do not, ladies and gentlemen. Do not underestimate the power of setting clear goals, more specifically, a timeline. It will absolutely help you keep your eye on the prize. If you get on the phone with myself, or one of us here, we will surely hold you accountable. At the end of the day, ladies and gentlemen, when you set a goal, and you set a finish line to the goal, accountability and an accountability partner is key to help you achieve those goals.
Okay, Rule number three, basic number three. Cashflow is king. It’s no secret. We say it all the time. Cashflow is king. More often than not, the most predictable and reliable real estate investments are those that generate positive cash flow. We talk about it on the show all the time. Matt references it all the time. You know, I want to share a personal story because it took me a while, a minute, a long minute, a couple of years, actually, to understand the importance of cash flow.
You see, when I started my real estate investing career, I actually started in the world of finance. I used to work for a subprime bank. That’s where I learned the importance of leverage. I worked for the bank, and I would watch people buy properties, and in turn, do a cashout refinance to buy more properties. I didn’t really understand the concept. Let’s face it, I was the one behind the desk doing the loans. It became very easy for me to become a fix and flipper because I was living, I live, in Southern California. The piles of cash that you make from a flip are pretty good. I’m not going to lie. I became blind to that.
When I started investing, I was a fix and flipper. Let’s face it, there are very few woman fix and flippers in the industry. That set me apart. What I did after I left corporate America, I created another job for myself. Yes, I would buy a house, I would fix it up and sell it for a profit. At the end of the day, I had to go find another property because I needed then to make another profit because there were no more profits coming in after I sold that property.
In turn, at the same time, Matt was buying and holding. He would do a few wholesalers and buy and hold. Now, everything that Matt was buying was creative financing. It’s no secret that when he started investing, we didn’t have a whole lot of money. We didn’t have credit at all. He was buying and holding a lot of it creatively. This is before Matt and I ever got together as a couple. I would watch him do these wholesales and then, every few properties that he would wholesale, he’d buy and hold. At the time, I thought it was kind of absurd because in California it was very common for me to profit $80,000 on a fix and flip, while Matt was over here making $150-$200 a door in cash flow.
Then, as he started to grow his portfolio, two properties became four. Four properties became ten. Ten properties became 20. Then, I started seeing Matt not working as hard, so to speak. He had developed cash flow. He had developed residual income. It took me two years to finally get, “Oh, wait a minute! Matt now has 50 doors, 50 properties, all cash flowing $200 a door. Now I get it.” It took me about two years to really get it. I had to see it for myself. In the interim, the market flipped. I was struggling to do fix and flips. Matt was like, “Yeah, well, I don’t have to work for a paycheck because I acquired all of this cash flow buying and holding properties.”
It was then that it dawned on me, “Holy Cow! Cashflow is king.” I share that story because it took me about two years to get it, when I was watching somebody in my own circle do it, do it for real. You know, my thought process was like, “Matt, what am I going to do with $100 in cash flow a month?” He’d just look at me and laugh and would say, “Watch!” He always had his eye on the prize. Cashflow, I mean, we know there is all types of real estate that can be done. We understand that some investors are really good at wholesaling. Other investors make piles of cash doing fix and flips like I once did. That’s okay. Everyone should do what they do best. Everyone should make money in real estate investing in the methods that suit them best.
For those people who eventually want to take their foot off the gas and want more time to do the things that are important to them, and those people that really don’t like their job and want to exit the rat race, you want to build an investment portfolio that will produce streams of passive income that will build over time. Buying and holding for cash flow is the answer. That’s the answer to cash flow. I’m not even talking about what equity is building and what tax deduction and tax benefits you’re acquiring. It all comes together with buying and holding. All that starts with building cash flow.
It really comes down to what you want your time and your energy to be. You know, do you want to haggle with contractors and wrestle with sellers constantly? Or, do you want to kick back on the beach while your property manager is managing your properties and sending you your passive monthly cash flow? Owning a portfolio that includes passive income properties. That is the quickest and surest way to financial freedom.
Ladies and gentlemen, I have lived it. I learned the hard way. In fact, I always say it, cash flow is king. Matt always says that real estate investing and cash flow is the final frontier where the average person can actually attain financial freedom. That, ladies and gentlemen, is forgotten secret number three.
Number four, diversify your portfolio across markets. That seems like a no-brainer. You’d be surprised how many people own all of their real
… real estate in one market. Not too smart. I think it’s too much of a risk and I talk about this often, diversify. Diversify your portfolio, diversify property price points, diversify markets. Specifically, diversify markets, because what happens when a local factory gets moved out of a state or when there’s an economic downturn and when the local market shifts? Or what happens when winter hits and pipes freeze over or there’s a snowstorm in a market and you can’t get out of your house for 10 days and people can’t go to work?
Here’s what you do. You research your markets and you pick a few. Then, you start shopping. There’s nothing wrong with picking up a couple of properties in one market and then pick up a couple of properties in another. That, in my humble opinion, is a great strategy. Don’t put all of your eggs in one basket. Don’t let your basket of eggs get too big and before you start to realize, holy cow, all my eggs are in one basket. Because, if one thing happens to that one basket, you are screwing yourself.
Diversification across several states, among several price points is important. It’s important to reduce the risk in any market that you’re in. Spreading across different economic centers, it just makes sense all the way around and it should keep your portfolio as a whole. Cool? The U.S. is a massive country with a hugely diverse range of local real estate markets.
Each market moves up and down independently due to all sorts of conditions. Diversifying your portfolio across markets would help you in any which way and form if one specific market dips. Or even the nation, as a whole. If you’re well diversified, you’re not going to suffer as much. Okay? You’re not even going to suffer if you diversified well enough.
Last but not least, forgotten secret number five and, in my opinion, one of the most important secrets. Property management. Obvious, right? But, not so obvious to do-it-yourselfers. I cannot tell you how many people fail in real estate because they tried to manage their own properties. People that suffer from analysis paralysis and my do-it-yourselfers, those are the ones that have the most headaches.
In fact, last week you heard me interview friend of the show Alex. He is an LAPD cop. He spoke to me and then, five years later, he says, “I’m going to go do it myself,” and he did it himself. At the end of the interview, I asked him, “What’s the one thing that you learned?” He’s like, “Property management is a nightmare.” He would get these calls at 3:00 in the morning or he would get calls when the roof leaked or when the toilet got backed up. At the end of the day, property management is everything.
See, the whole idea of passive income is that you, as the investor, are taking a passive role in the organization. You’re supposed to invest your capital in a property and then tenant it and managed by a professional so that you can do everything that you want to do with your time and energy and collect checks that are collected by your property manager. Now, sure, you’re going to have to make an occasional decision, but you’re not going to have to do the butt of the work.
Certainly, you should be involved in property management, but your job is to manage the property manager. Leave it to the professional that’s great at dealing with that. You have better things to do and there are so many more benefits and much higher and better use of your time than to manage your investment property. That’s where the money is made, ladies and gentlemen. I say it often.
It doesn’t matter how beautiful your property is or where your property is located, if you don’t have a strong legit property management team on the ground, you’re doomed. How you keep your money from coming in through property management, you want to do as much due diligence on your property manager as you do on your property. You may need to do some serious digging into your property manager.
Our property managers, I have taken them to the extremes of property management. I not only interviewed them ad nausea, I speak to their tenants, I speak to other fellow investors, I dive deep with my property managers. The reason I have the most elite teams across the nation is because the bad property managers couldn’t handle my due diligence process. I am wicked when it comes to it because I understand the importance of property managers.
You may need to do some digging and you may need to go through a couple of companies before you find that perfect fit, that best fit for you, but it’s worth a little bit more legwork early on in your process to find the property management company than to deal with the headaches when you’re already into the process of a tenant in place not paying their rent.
So, a quick recap of the five forgotten secrets of cashflow real estate investing. Number one, knowledge is power. Critical. The more you know, the more educated decision you’re going to make when it comes to your financial freedom. Number two, set clear and concise investment goals. Be real with yourselves, be real with your time, how much assets you have, how many resources you have at your fingertips. If you don’t have them, that’s okay.
Seek the professionals that are going to help you achieve your goals. And always set a definitive timeline for your goals. Key to understanding your goals. Number three, cash flow is king. Don’t be a dummy, guys. Don’t do what I did. Don’t wait two, three, four years to realize that even $100 a month in passive income is better than a pile of cash. So, number three, cash flow is king.
Number four, diversify your portfolio across markets. Critical. Do not put all of your eggs in one basket. Diversify your markets just in case there is a shift in the market or there is a downturn in one specific market that you’re in. Number five, use property management. Do-it-yourselfers, do not do it yourself. Property management, leave it to the pros. All you want to do is acquire enough assets to be able to buy an investment property and give it to a property manager that understands the importance of property management.
Wait, I’ve got a bonus secret for you from… I’ve got bonus cash flowing investment secret for you, and that’s leverage. You all know, I am a huge fan of leverage. Leverage other people’s everything. Other people’s experience, leverage other people’s efforts, leverage other people’s deal flow, and knowledge. Use me and my team for example. If you don’t know what to do or where to get started, leverage our knowledge, leverage our expertise.
If you want to do what I did, go to cashflowsavvy.com. Now, that’s savvy with two Vs, and download the Frustrated Investor’s Guide to Passive Income. Guys, I created a step-by-step instruction on how to escape the rat race. How Matt and I were able to do it. It’s no magic, it’s no tricks, my friends. It’s a basic plan and tools to assist you in setting concise and clear goals for yourself and really to get it done.
Ladies and gentlemen, don’t think about it anymore, just do it. That’s it for today, my friends. I will see you on another episode of Turnkey Tuesdays where cash flow is king.
Matt: Your portfolio has seen better days. But, this too shall pass, and the best for you is yet to come. Together, we’ll get you there faster. We’re Cash Flow Savvy and we’d like to share some information with you that’ll show you how you can take control of your financial future and accelerate its arrival. Go to cashflowsavvy.com. More building, let waiting. Cashflowsavvy.com.