(Voice Over): Epic Real Estate Investing Podcast Episode 2. (music playing) You’re about to meet a man that can show how he took control of his life and financial future. And how you can do the same. He’s never been on TV. He’s not a millionaire and he doesn’t know Donald Trump. He is a full time real estate investor, newly discovered author, and family man.
He does not report to a boss. He creates his own schedule and takes his family on a few vacations every year. He got started investing in real estate with almost no money and a really crummy credit score.
And he’s going to show you exactly how he did it and how he continues to do it. You will have to work. You will have to be responsible. However, laying the beach, sipping fruity drinks is a reasonable goal. Without further delay, your guru. Sorry. Your guide to a better life, the real estate investing, Matt Theriault.
Matt Theriault: Hello and greetings from Epic Real Estate Investing Podcast. The podcast that will show how to create wealth through conventional and creative real estate investing. So you will have the option to realistically retire in the next 10 years or less. And enjoy the good life while you’re still young enough to do so.
My name is Matt Theriault, author, full time real estate investor and family man. If this is your first time listening to the show. You want to do two things. One, go back and listen to episode one. Episode one is going to give you the gist of what the show is about and why it’s here.
I mean everything that we discussed is going to make a lot more sense if you do that. And two, download the free real estate investing course on how to deals, no money required. And you can get at freerealestateinvesitngcourse.com.
It’s a step-by-step course of which I reveal everything that I do, everything that I say, everything that I use including the documents and contracts. Everything that you are going to need to invest in real estate using no money or credit. And that’s yours for free at freerealestateinvestingcourse.com.
So, over the next few episodes, I’ll be laying the foundation for you to succeed in real estate investing. I’m helping you create a game plan to get you up and running as soon as possible. I mean you certainly you heard the expression that time is money.
In real estate, that couldn’t be truer so let’s begin by creating a plan that will work. We probably want one that work fast but that’s going to be mostly up to you on how it works. And then we will move through the process and work that plan. So we are going to plan the work and then we are going to work the plan.
Because in real estate investing as with anything worthwhile, a plan is an integral of what type of results you are going to produce. And in a nutshell, I’ve come to know and unfortunately the hard way a few times. Yes. I said a few times. If you fail to plan, you plan to fail.
Don’t make the same mistakes I’ve made. Learn from my mistakes. Don’t underestimate the value of a plan. I said that 2020. I’m sure you will agree so I invited to take my hind sight and use it as your fore sight.
By doing so, your journey to real estate investing success will be surely faster than mine but you got to take action on what you hear if you ever expect to experience any results. Let alone success. Knowledge is not necessarily power. Knowledge is not power. It is potential power.
You will have to take action and put your knowledge to work, for your knowledge to be powerful. You see, people love to learn how to do things but most don’t love to do things.
Don’t be among the most. That’s my request. Look at what everyone else is doing and do the opposite. That’s a time-honoured formula for success. And this is what I mean. You’ll hear me say this every now and then. If you do for the next 2 years what most people won’t do, you’ll be able to do for the rest of your life what most people can’t do.
All right? So let’s begin. My goal to being a real estate investor is to receive $ 1 Million a year of passive income. Now, I’m assuming you’re here to learn on how to do the same or something similar.
Maybe you want more than a million or maybe you’re okay with a fraction of that. It doesn’t matter to me. It’s your life. It’s your goals. But regardless of what your goals are, you’ll want to identify what that number is for you.
The fight of the commercial for ING, I laugh every time I see this commercial. There’s a guy walking in the neighbourhood holding his number under his arm. The exact number he is going to need to retire. And he walks up to his neighbour who is trimming the bushes and sitting on top of the bushes is his number. His number reads a gazillion. The guy asks his neighbour. How do you plan to reach that?
And then the neighbour responds as he chuckles, “oh, I’m just going to throw money at it and hope something good happens.” And the neighbour admits while he was still chuckling but now obviously chuckling in a way to mask his pain that neighbour admits that he doesn’t really have a plan.
Now that’s a guy that is going to fail because he has failed to plan. He doesn’t know what his number is. The gazillion is not a real number. You’ve got to be specific. If you’re not specific, it’s really difficult to make a plan. So now, the number I’m speaking of is not just a number though. It’s a number followed by the term “passive income.”
Now if you’re unclear as to what passive income is or why you want it, allow me to explain as it is. One of the most important concepts you must understand as a real estate investor or for any one whoever expecting that he or she achieved true financial freedom.
You see, most of Americans is raised in a household where the road to wealth and success is paved with an ideology of going to school, getting good grades, graduating, and getting a good job.
I mean if you’re raised differently than that, it’s my guess you were probably raised in wealthy household and you probably already have a good grasp on how to create wealth. However, stay with me. You’ll never know what you don’t know.
As well, most of us have grown up knowing a person described as wealthy as having a lot of money in the bank or a high net worth. Regardless of how much money you have, unless that money is working for you, it has an expiration date. That money has to be working for you for that money to support you indefinitely.
Besides, saving a lot of money is a rather antiquate way of creating wealth of which very few are ever capable of doing. In fact, many experts are said the new economy that savers will be losers. There is another way to create wealth. You’ll probably like to know that it is easier. It’s faster. It’s more secure for the long term.
Too good to be true? Well stay with me. You see most people with a lot of money are able to put their money to work for them. Therefore, it doesn’t expire. The reason however why so few are able to create wealth in this way is they strive to make and save al to of money before they actually put it to work.
Making and saving, for example, $1 million for the average person. That’s extremely difficult to do. It takes a considerable amount of discipline not to mention time. For many of the few that actually do it, it takes a lifetime. So then I ask you to modify the definition of wealth, as you know it.
The definition you’ve likely known your entire life. From having a lot of money in the bank to having enough money to pay your expenses every month whether you go to work or not. That’s your new definition. Wouldn’t that definition of wealth give you the same time freedom that traditional definition of wealthy would?
I mean that really is essentially why we all strive to create wealth. Isn’t it? Being wealthy is going to allow us the time to do what we please, when we please, and with whom we please. It’s not really the money that we want. It’s what the money will allow to do with. That’s what we want.
So imagine your monthly expenses amount to $10,000 a month, what would allow you to manage those expenses more easily? $ 1 million in the bank? Or $ 10,000 showing up on your mailbox on the 1st of the month every month for the rest of your life?
I mean which one would allow you to manage your expenses the longest? Which one sounds easier to create? $ 1 million of cash? Or $10,000 a month in cash flow?
Or passive income? Now, you know, your situation better than I do but $10,000 a month of passive income not only sounds achievable. It will allow me to manage my expenses forever. Meaning my lifetime, my children’s lifetime, and my children’s children lifetime.
The $1 million has an expiration date. The passive income does not. As long as managed and maintained responsibly, it does not have expiration date. So if it’s easier and will last forever, why don’t more people set out to create wealth in this way? Well for the most part, I just think most people don’t know about it.
They don’t know anyone that has ever done it. So why would they even think of doing it. How can you even ask a question about something you don’t know that you don’t know? So that’s the answer for the masses.
But even for the sector of the population that is in the know, so to speak, why don’t they do it? Earlier, I pointed out how most people think they have to save a lot of money before they can put their money to work for them.
Not true. Not true at all. There are plenty of passive income vehicles available. Even in today’s economy of which you could invest $ 10,000 to produce $ 200 a month in passive income.
The issue is most people won’t do it because tying $10,000 in exchange $200 a month, that doesn’t sound like a real life changer. And it doesn’t on the surface. I mean for most, there is no appeal to $200 a month. There is nothing sexy or fun about $200 a month.
Most people would rather use that $10,000 for a family vacation, a new wardrobe, a new 3D TV, jet skis. Now that’s sexy. Right? Vacationing and enjoying the jet skis. That’s fun. Whatever it is for you to do those things have more appeal than investing the $10,000 to create $200 a month.
Here’s most people miss the point. It can be a devastating overset. Most people confuse $200 in cash with $200 of monthly cash flow. They’re not even remotely the same. I agree. $200 in cash has very little value today.
I mean it’s a pair of Air Jordan or it’s a nice steak dinner and a bottle of wine for two. But $200 of monthly passive income, however, has tremendous value. It will make the difference in you creating wealth or not.
Here is what I mean, as I’m recording this podcast. The financial institution ING that I mentioned a little earlier, they are advertising a 1.1% return for their money marketing count. You get a 1.1% return on the money that you deposit into that marketing account.
How much would you need to deposit into that ING account to generate $200 of monthly passive income? That ING money marketing account balance would have to be $218,000. That’s how much you would have to deposit to generate $200 of monthly passive income.
So $200 in cash is worth $200 in cash. But $200 of monthly passive income in today’s market, that’s worth $218,000 sitting in a bank account and sitting in the most liberal and aggressive interest bearing bank account that exist today.
So sticking with this example, one could invest $10,000 twice a year and achieve their financial freedom of $10,000 of monthly passive income in about 25 years.
If one were to deposit that same $10,000 a month into money marketing account instead. Do that twice a year. It would take twice as long as 50 years to save $1 million.
That example alone demonstrates it takes twice as long to create wealth per hour traditional definition of what it means to be wealthy. Or does it? What the example does not demonstrate is that the money marketing account would have to have a balance of over $9 million to generate $10,000 of monthly passive income is our new definition of wealth.
So although it would take 50 years to create wealth and become a “millionaire,” the traditional way it would take 461 years for that method to pay you $10,000 a month of passive income.
It’s 25 years per our new definition versus 461 years per hour traditional definition. Now you choose the fastest path to creating wealth. It’s pretty clear. Isn’t it? In order to keep this example simple, I didn’t factor in fluctuating interest rates. I didn’t factor in taxes or inflation. But the results are relative.
I mean in the same difference would essentially apply regardless of those economic factors. There are factors in of real estate that would enable to achieve that $10,000 a month of passive income much quicker than 25 years.
We will get to that later but the point I’m trying to make right now is that people will put off building their passive income streams the easier and faster and smarter o creating wealth because $200 of monthly passive income isn’t enough incentive to get them started.
There’s no appeal on such a small monthly amount. Hopefully you would understand how significant that small amount is to creating your wealth. You got to get started. A great deal of the credit of my own success on investing and creating wealth belongs to my new understanding of money and how it works.
Don’t wait to save the bunch of money to start putting money to work for you. Don’t wait to start creating a wealth. Create wealth by investing what you have right now.
The road to wealth is shorter and easier through building passive income. The sooner you get started, the sooner you would get there. Although there is multiple way of generating passive income, real estate is the fastest and safest way for the average person.
There isn’t another vehicle that I know that allows the financially educated investor so much control over their investment than real estate. I don’t know about you but I like control of my money. I’m not going to send it to somebody and hopefully they do it right.
I like clarity around my finances. Real estate gives me that. Stick around and I’ll give you that too. Now regardless of what your number is, the amount of monthly passive income that you want the life that you want? We all have to take the same steps to get there. For the sake of this last and our for the sake of this podcast and just to make it easier, I’m going to use a nice number of $1 million. Anytime you hear me say $1 million, just insert your number.
Now in order to get to your million dollars, you are going to have to move through the natural progression of becoming a millionaire real estate investor. One, you got to think like a millionaire investor. Two, you have to buy a million dollars of real estate. Three, you’ve got to own a million dollars of real estate. And four, you get to receive a million dollars of cash flow from your real estate.
That’s the ultimate goal. Now I borrow this progression from Gary Keller’s book “Millionaire Real Estate Investor.” I’ve spent tens of thousands of dollars on my real estate investing education. I’ve never stopped investing in my education. I am the consummate student. I’m always investing in a new book, a new seminar, and a new course. I mean it keeps me abreast of what’s going on in my industry.
It keeps me sharp. But Gary Keller’s philosophy in his book “Millionaire Real Estate Investor.” It seems to wrap everything in a nice little package for me. So I tend to use it as a reference when I invest and when I teach. So if you haven’t read the book, it’s highly recommended reading.
Now in today’s dollars at today’s home appraises, just using basic national averages and very conservative returns. In order to skip the first three steps of this progression, I mean in order for you to just avoid the progression and jump to step 4 and start receiving your annual passive income. You’ll need $13,888,888 to acquire enough real estate to generate a $1 million of annual cash flow.
$13,888,888 by today’s average costs such as average house price, average return on that house. Now if you have that $13 plus million in the bank right now, I mean you can stop listening to this show and simply your local real estate agent and poof! You’re done.
You do not need me. But I’m going to out on a limb here and assume you don’t have $13 plus million. In that case, what we’ll need to do is to start working our way towards that. Which means we would have to go to the four stages of becoming a millionaire real estate investor. That’s the foundation of the plan.
One, think like a millionaire real estate investor. Two, buy a million dollar of real estate. Three, own a million dollars of real estate. And four receive a million dollars of annual cash flow from your real estate.
Now my current journey has me sitting somewhere in between in steps 2 and 3. I continue buy and sell real estate of which generate big chunks of money that I used to buy and hold real estate. I do the buying and selling here in California and then I do the buying and hold in the Midwest. That’s just been my strategy. It’s working pretty well.
I’ve gotten to where I am without using any of my own money and the really crying credit score. Using what I’ve dubbed that “Epic Approach.” I still use that primary approach to real estate investing today. And after 60 plus transactions in the less two years, I still yet to use one dime of my own money or 1 point in my credit in any transaction.
That’s the approach that I will continue to reference on this podcast unless you know if something more efficient comes along. But I can’t foresee anything like that; I mean it’s working really well. But hey, I’m open. I’m always open new ideas and opportunities.
What is the epic approach? Don’t worry if you don’t get this right away. It’s new to you. It’s unfamiliar. That’s exactly every learning experience begins. Right?
We will be covering every step in great detail. You become more familiar as we progress. There are many real estate investing strategies to choose from. There are tons (laughing) speaking of more of an approach than a strategy.
Regardless of what real estate investing strategy you choose to embrace and implement. I mean whether least options or fix and flip or short sales or multi-family seller finance. No. I don’t know what probates tax deeds, tax leans, foreclosures, pre-foreclosures. Regardless of what strategy you choose, they all have four things in common.
There are four steps that are unavoidable. These steps are inescapable. One, you got to find the deal. Two, you got to analyse the deal. Three, you got to secure the deal. And four, you got to find the money.
That’s essentially the epic approach. We will break down those steps to strategically flow like this. E, the value with the deal and site. P, present the offer and get consent. I, investigate and negotiate. C, come in with cash and close. That’s our epic acronym. That’s the per size order of events.
If you follow the steps in that order, you will position yourself to win every single time while virtually eliminating the risks from your investing. I know that’s a bold statement right now. And it might bring up some emotions of scepticism for you. That’s okay. I understand.
As we go, however, you will come to understand what I’m talking about. And slowly realize that that statement is not so bold after all. All right. Let’s get back to the epic approach.
Here is a big pitch fall that most investors make. I don’t want you to make this mistake. They focus on the C of our epic approach, come in with cash and close. Because they don’t have the cash nor do they where they are going to get the cash. They never take step one. They never go out to find deals or evaluate them. Don’t do that.
You’ll never get started if you do that. Or you’ll significantly limit the amount of deals that you do. Most investors but experience investors alike, even I fall into this trap today. I mean I teach this approach and every once in a while I have to slap myself around a little and wake myself up to get back on track.
But most investors, none of them are immune to it. None of them are exempt. They try to secure finance before they ever try to find a deal. And what’s so many don’t realize, I mean even those that do realize what they frequently forget is that the money or financing is infinitely easier to find.
Once you have located a deal and more specifically once you’ve secured the deal. It means having a deal under contract. Now, if you ever get a good deal under contract. The money will essentially find you. Again, I feel the sceptical alarm going off in you. Hang in there with me. You’ll get it.
If you have a good deal under contract, the money essentially finds you. I mean, who doesn’t want to be a part of a good deal. You see this is a big reason why so many fail at real estate investing. They’re so scared of what’s down on the road or mile meaning they don’t know where the money is going to come from.
They’re so scared that they never travel the first 200 feet. They never even look for deals. Or maybe they look for deals but they got no real intent of doing anything about the deal if they were to find one.
This is a very limiting approach. If not an overall approach leading to frustration and discouragement and failure so don’t do that. Travel those first 200 feet. When you get there, you will see further.
I mean how ridiculous would it be if you’re parked in the driveway in the morning, getting ready to go to work, and you waited for every light between your home and the office to turn green before you ever pulled out of your driveway.
I mean you would never get to work. Would you? And that’s how most people conduct their real estate investing. Most people wait for every light to turn green before they ever make the first move.
The lights will never go all be green at the same time. I promise you. Travel as far as you can see and when you get there, you will see further. And then you too will be travelling that route to becoming a millionaire real estate investor.
From this episode today, here is what you want to get. What’s the monthly passive income you will need that will allow you to live the life that you want? A quick and easy to figure that out is to add up your monthly expenses meaning your bills. Make sure all your responsibilities are taken care of. Then add up the amount of money you would need to enjoy some of the other finer things in life.
Maybe you want a monthly clothing allowance. Maybe a monthly dining out allowance, maybe a monthly weekend getaway allowance, maybe you want that twice a month, maybe a discretionary allowance or the money you can blow on whatever you want, whenever you feel like it.
Maybe an allowance for tites or charity. Maybe an investment allowance for you or your children. Remember the college fund. Whatever it maybe for you.
Imagine an ideal month for you and your family then add up how much that ideal month would cost. And now what put you pretty close to what your number is, with the intent of one’s hitting that monthly passive income number. You can live that ideal month every month.
So first, come up with your number and second commit to moving at the speed of instruction. Focus on the first 200 feet and have faith that once you travel those 200 feet, you will clearly see the next 200 feet.
Don’t let the unknown that exist a mile down the road stop you. All of the lights will never be green at the same time. Okay?
Come up with your number and commit to moving at the speed of instructions. On the next episode, we will take that information and cover the most important element to your real estate investing. I mean without it, you just don’t have a chance. Because it’s that important, we are going to cover right in the beginning. We will cover it next.
So until next time. As a very wise man once said, “intellectual growth should commence at birth and seize only at death. Never stop learning.” To your success, I’m Matt Theriault. Living the dream.
(Voice Over): Thank you for this time with Matt Theriault and the Epic Real Estate Investing podcast. When you have time, stop by iTunes to leave your comments and let us know what you think of this show. And if you haven’t done so already, get started investing today by visiting FreeRealEstateInvestingCourse.com to access Matt’s free course on how to deals, no money required. Until next time. To your success, to your success, to your success.