How to Invest in Real Estate Like a Badass Genius | 355

How to Invest in Real Estate Like a Badass Genius | 355

invest in real estate

If you’re just starting to invest in real estate, you’re probably beginning to realize how much there is to learn. Between choosing an asset class, finding deals, and finding strategies to execute once you finally HAVE deals, you might feel a bit overwhelmed.

Today, The Epic Real Estate Investing Show teaches you everything you need to invest in real estate like a badass genius. Matt shares his 5 hot principles for gaining confidence and success in your real estate investing. Learn the secret behind choosing an asset class, the best method to determine your minimum deal standard, the three separate exit strategies that will bring you the highest profits, and more!

invest in real estate

What You Will Learn About How to Invest in Real Estate Like a Badass Genius:

  • The common factor between Matt’s successful students
  • Specific methods for how to be less overwhelmed in the world of real estate investing
  • The secret to choosing an asset class
  • How to avoid “shiny object syndrome”
  • The 2 numbers you need to know to determine your minimum deal standard
  • What your first intent should be for any deal
  • Why finding the deal should be your first sole focus
  • What to do once you’ve found a deal
  • The danger in overdoing investigation before getting a deal under contract
  • A checklist of what to check once you have a deal under contract
  • How not analyzing for multiple exit strategies can hurt you financially
  • The difference between the flip, hold, and finance exit strategies
  • How your immediate situation helps determine which exit strategy is right for you
  • How to call the shots and no longer operate out of fear when finding deals

Recommended Resources:

[content_block id=2030 slug=recommended-resources]


Thank you so much for joining us on this episode of the Epic Real Estate Investing podcast!  Please subscribe to the podcast so that you will get instant access to our new episodes.

If you found this podcast helpful, please take a few minutes to leave us a positive review in iTunes.  Your reviews help to improve our search rankings so that we can spread the love.  Thank you!


Speaker 1: This is Theriault Media.

Matt Theriault: Yeah. Welcome to the Epic Real Estate Investing Show. So glad that you found us. Epic Intensive coming up, the Cash Flow Conclave. Tickets are selling really fast. I don’t know what’s in the air. I don’t know why this event is different, but we have more people registered right now than we had attended the last event, so I’m very excited. We got plenty of room for you though. We actually have just made some adjustments to our venue so we can accommodate you all. The more the merrier. Well, I don’t know if we can accommodate you all, but more than we were expecting just because the excitement around this one has been so great so quickly.

What we’re going to be doing there at this event, we’re going to be revealing the secrets of creating cash flow with real estate. The last Intensive I had two of my students join me to share their rat race escape stories and their rat race escape strategies, Josh and Corey, and the crowd went nuts. I want to duplicate that. I want to recreate that for you. If you were unable to attend the last one, you’ve got another shot.

At this Intensive, I’ve got three different students joining me to do the exact same, Parker, Russell and Greg. They will be there to share their rat race escape stories and share their rat race escape strategies. Tickets are available at the epicintensive, not theepic, it’s, Hold on just a second.  iTunes is jumping up and down trying to flag me to tell me something in the middle of my recording here. All right, so it’s done.

Another killer week inside of the Epic Pro Academy’s private Facebook group. Anita, David, River back on track, Tim, Josiah, all great weeks. Lots of credit being doled out to the daily success report. It’s amazing how that works. Russell reporting his score consistently doing remarkably well as he’s recommitted to his business. Fantastic. Mora asked to actually have her marketing turned down inside of the RA Ace group. She says, “Turn it down. Too many calls. I’ve got six appointments coming up this week. I can’t handle it all.”

Parker Peterson’s got two new deals under contract. Phil’s taking appointments, honing in his negotiating chops. Josh and Jack setting an appointment and negotiating contracts. Brad [Helmolst 00:02:42] in the mix. We’re seeing all of this activity when so many people outside of this community are complaining about shifting markets. They’re complaining about the shrinking inventory. They’re complaining about there’s too much competition. They’re complaining about my market doesn’t work. They’re complaining about my marketing responses all falling.

Listen, consistency always wins. When you’re consistent with the right activities, you will always get the results that you’re looking for, regardless of competition. So nice work to you all, keep doing it. Keep implementing, keep asking for help and keep sharing those wins. It’s the Epic formula for success.

Today, I want to Talk about how to invest in real estate like a badass genius. Because I know it can be frustrating out there. You don’t know which asset class to pursue. You don’t know how to find the deals. You don’t know how to find the discounted real estate. You don’t know which strategy to execute once you found that deal. That ultimate fear is just really, “Gosh, I’m never going to get started.” A confused mind does nothing, and it can be frustrating when you’re confused and you don’t know which way to go. There seem to be so many different ways to choose and you’re just never going to get started and you’re afraid that if you don’t get started, nothing’s ever going to change.

But when you get this part right, you’ve got a simple, clear and easy asset class to pursue, a simple path to follow. When you do this right, you’re finding discounted real estate, you’re finding opportunity, you’re creating opportunity, you’re making it happen, and you’re involved in the best strategy for you. Ultimately, you can get started today and move forward with confidence and never really have to look back, knowing that you are down the right. When you get this part right, that’s what’s available to you.

What makes me talk about this today is I think of a lot of our big success stories right now. We’ve got a lot of them. I’ve talked about that. I’ve been sharing them with you. I’ve been sharing their stories and calling out their names and congratulating them.

I’m really proud and I see what they all have in common. Not all of them, but a good chunk of them, they’re past students from other programs. They’re students that have already made large investments into their education. They’ve gone out and they went to the latest multi-family workshop and made an investment there, and got a little frustrated with their results. Some have pursued the new trend in storage facilities and they made an investment there, or they made a large investment in this general education, and the education was good and they feel smarter, but they still really don’t have anything to show for it.

What we do a lot different over here, and the reason that this subject is resonating with me at the moment is I’m looking at all the success and the education, it’s out there. It’s abundant. It’s everywhere. Whether you pay for it or you just kind of go and do your research through YouTube and start googling blogs, all the information is there, just shooting the number of podcasts out there. We give everything away here for free.

There’s no shortage of information. It’s just when it comes down to the implementation, is where the difference is really made. So today I’m going to share with you how to invest in real estate like a badass genius.

I’ve got five key points, hot principles for you. One is any class will do. They all require work, just choose one. Point number two, know your definition of a deal. You’ve got know what a deal is. If you don’t know what a deal is, you’re not going to find it because you’re not going to recognize it when it shows up. Three, you’ve got to focus on finding the deal. That’s the focus, not the asset class, not the strategy. You’ve got to find the deal first.

Number four, once you found the deal you’ve got to secure that deal before you put too much time and energy into your due diligence. Real estate out there, I feel there is enough opportunity out there for everybody. It’s still a game of speed, you’ve got to move quickly. So secure that deal under contract, and once you got under contract then go do your due diligence, then take your time to do your investigating.

And then point five, you want to analyze for multiple exit strategies. If you are a one trick pony and you consider yourself a wholesaler, or you consider yourself a lease-optioner, or you consider yourself a wholesaler of lease-options, whatever that strategy is don’t do that to yourself. You’re really cutting off your opportunity and cutting off your potential. We’ll talk about that, but those are the five.

Let’s talk about one, any class will do. Lots of different types of real estate. There are multi-family, which is extremely hot right now. The storage facility is really appealing because now you don’t have to deal with real tenants. Doing notes, mobile home parks, single-family like we do here a lot. Any class will do. Understand, regardless of which one you just heard about, or what your friend is doing, or what’s the last workshop or guru that came to town, it can all sound really sexy and it can be really distracting.

We talk about the shiny object syndrome, like, “I’m going to try that and I’m going to try this and I’m going to try that.” What we find is, you choose one that you really like, that speaks to you, and you go out and you’re like, “Wow, this actually works.” So you’re like, “Okay, let’s go try this other one, because that one seems to be more effective over there for that person, so let me go try that.” You go over there and you dig into that and you get all excited about it, and once you dig into it a little bit you’re like, “Wow, this is work.”

And then the next workshop comes to town, the next free event comes to town, “Let’s go do that,” and that’s a guy’s a really good eloquent speaker and he makes it sound super easy. “Boy, this guy’s got a boat and he’s got a big house and he takes giant long vacations with his family. I’m going to do that.” You dive into that and you’re like, “Wow, this is work.”

They’re all work, okay? Anything that’s going to pay you anything that you would aspire to, that has a high-income potential, it’s work. There’s no shortcuts, okay? So just understand that they’re all work, and so choose one. Choose one and get to work.

When it comes to the asset class or what you want to pursue, whether it’s multi-family, whether it’s storage facilities or mobile home parks or single-family, whatever it is, just choose one and focus. Go deep with it. Understand it’s going to take work, so put in the work. That’s number one.

Number two, know your definition of a deal. I was just communicating back and forth on [inaudible 00:09:58] with one of the clients. She was a little stuck because she’s got these appointments set up for this week and he partner’s going out and they don’t really know what their minimum deal standard should be. What is a deal to them?

What I shared with here, it’s going to be different for everybody. The thing I like to suggest or have you look at is one, make cashflow your intent. Look for the stream of cash. Make that always your intent. It doesn’t mean that every deal is going to be a buy-and-hold situation for you or some sort of cash flow situation for you, but have that be your first intent. That’s going to be your fastest way. That’s the best deal for you because it’s going to be the fastest way for you to reach your financial independence.

So understand that the cash flow is going to get you there much faster than the pile of cash, really, regardless of how big that pile of cash is going to be. That’s another episode, another conversation for another episode. We’ve talked about that ad nauseam in the past. Just understand, cashflow always. Even if it’s a small little cash flow compared to the big giant pile of cash that you could get, that small little stream of cash flow is going to get you to your financial independence the fastest. That’s going to get you to your freedom the fastest, even if it doesn’t feel like it, always pursue the cash flow first.

Now, having said that, not every deal is going to be something you’re going to want in your cash flow and portfolio. So how do we know what is a good deal? I like to have two numbers. One is what’s the minimum amount of cash that I am going to accept that would warrant me getting out of bed and doing all this work? That deal, I don’t know maybe it’s five grand, 10 grand, 15 grand, depending on what market you’re in or how long you’ve been doing this, how good you are at what, how much experience you have and how good you are at what you’re doing right now.

Have that number. Like, “I’m not even going to process the paperwork for less than $10,000.” A flip for 5,000 bucks, it’s not worth to me. That’s not a deal to me. Now, if it’s your first deal, five grand that might be more money that you made in the last three months combined, that looks really good. That’s fine. It doesn’t make one right or wrong, good or bad. Your definition of a deal is going to change over time. But at least have that number in place, like, “I’m not going to do this deal unless I at least make $3,000.” “I’m not going to do this deal unless I make at least $30,000.”

Have you cash number. Then, have your cash flow number. What’s a good cash-on-cash return for you? We measure that informs of percentage, or you could measure it in the forms of the actual cash amount. So, do I want a 13% cash-on-cash return? Or I could define my deal by, “I want at least $300 a month of cash flow.” You could define it, either way, your choice.

What’s a good number? What’s a good return? What I like to do first, the starting point is what is your money currently doing for you at the moment? For example, if you have a bunch of money in the stock market or in a mutual fund, what was your return there last year? What kind of return did you get? 6% or 7% mutual fund? That’s not too shabby, right?

So what would it be worth you liquidating that mutual fund to put it into the next deal because it would work harder for you somewhere else? If you say you’ve got 7% in your mutual last year or the last six months, then you probably don’t want to deal less than 7%, right? You don’t want it to work less and then to go through all the hassle and liquidate and go buy. 8% probably isn’t going to be worth all the trouble, so maybe it’s 9% or 10% that might be your minimum cashflow cash-on-cash return.

To calculate that really quickly, it’s your annual cash flow divided by how much money you put into the deal. Your annual cash flow, so you make $200 a month of cash flow that’s going to be $2,400, $2,400 for the year, and say you had to put $20,000 down. So that’s, let me [inaudible 00:14:21] the calculator real quick. We’ve 2,400, there’s your cash flow for the year, divided by the $20,000 you put into the deal. That’s going to give you a 12% cash-on-cash return. That’s how I like to measure my deals. I like to go by that percentage rate. That 12%, that would be better than your 7% in your mutual fund, so that could be a really good deal for you.

The other, if you don’t have any money out there working for you, you can go to just about any turnkey operation right now and use leverage and get somewhere between 7% to 8% on the low side, to 10 to 11 on the higher side, of cash flow. So even if your mutual fund is doing 7% and you know that there’s deals out there readily available to a turnkey operation that could pay you 10%, then that could be your low mark right there. So if you’re going to go out and find a deal on your own and you’re going to negotiate those price and terms, you probably … You know, 10% 13% might be a low mark for you.

I just thought out loud and walk you through my thought process of how you calculate your minimum deal standards, like what’s your definition of a deal. Once you get a bunch of those under your belt and now you’ve got five or six properties all doing 14, 15%, the next time you go out you don’t really want a deal that’s going to pay you less than that, because you want to keep elevating the performance of your portfolio. So now, your definition of a deal could change and now it’s like, “Hey, it’s 16 or 17%. That’s what it’s going to take for me to go ahead and do the work and acquire this and absorb this into my portfolio.” Got it?

All right, so know your definitely a deal, and I just walk you through various ways of how you can define that for yourself. That’s for you. It’s a personal question, okay? So it’s what’s good to you, and once you define that deal. Now stick to your standards and measure every deal that you come across up against your standards. Now you know whether it’s a deal or not. You know your definition of a deal.

All right, next, point three. Focus on finding the deal first. Don’t worry about who’s my buyer going to be? Am I going to wholesale this? Or, am I going to fix it before I flip it? Or, am I going to acquire it can clean it up and put it on the MLS? Or, am I going to hold this? Or, am I going to sell it to a buy-and-hold investor? Don’t think about that part. Don’t think about that part because you’re finding the actual deal.

Finding the deal is probably the hardest part of the whole equation. Focus all your energy there. Once you’ve found the deal, boy, you’ve got so many other options after that. Don’t worry about where you’re going to get the money. Don’t worry about who’s going to be the buyer. Don’t worry about who’s going to manage your property, if you decide to hold onto it.

Find the deal first and boom, next point secure the deal. Get it under contract. Don’t do too much due diligence. Don’t do too much investigating prior to getting that deal under contract because if you investigate it too much, someone’s going to come along and someone’s going to take it from you, and now you’ve done all of that work upfront for nothing. Now you’ve got to go find another deal.

Get the deal under contract. Once you know your minimum deal standards, the definition of a deal, get it under contract as close as you can to those deal standards of your own. Once you’ve got it under contract, now you can go and confirm all those numbers. Now you can go and confirm, what’s the physical inspection going to look like? Is the foundation in place? Is the plumbing? Is electricity? How’s the roof?

Let me go in and analyze the expenses of the property. What’s property management going to look like? What is everything else like this deal selling for? Is it something I might want to sell and take this cash to go, so I could go buy a better cash-flowing property that I’d rather have in my portfolio or something like that?

You can answer all those questions with time on your side. Not necessarily time on your side, but the urgency has been removed because now you know no one can come in and steal it from you. So get the deal, know your definition of a deal, go find a property that fits that definition, and boom, get it under contract as close as you can of that price and terms of your definition of a deal. Got it?

Now, once you’ve got it under contract, you’re going to go ahead and you’re going to run your title search, make sure title is clean. You want to see if there’s … You want to check the physical inspection of the property, and then you want to go ahead and maybe you’re going to look at the crime in the area. What kind of school system we in? What is the potential for the area? Is it growing?

You can do all of that kind of investigating for yourself, and that’s your right to do that, and you should that before you actually close. But the other thing that I want you to look at is, I want you to analyze for multiple exit strategies. Multiple exit strategies, this is why I talk about being the one trick pony can really hurt you. If you’re only wholesaling, if that’s your only exit, you’re going to be doing this business for a really long time and you’re likely going to burn out. Because there’s not an end in sight if you’re consistently just wholesaling. You’ve got to position yourself in a way that you can create cash flow, or cash and cash flow, with every deal.

I want you to analyze for three different strategies. One is a flip. Can I flip the contract or flip the property? How much am I going to get there? How quickly is it going to take me, or how quickly can I do that? How long will it take me to actually actualize that profit? Always factor the time into your flips. A $10,000 flip is good if it takes me a week, or 30 days or less. A $10,000 flip that takes me six months to get money, not good. Always think about the time and the effort it’s going to take for you to actualize your profit there.

Second is, analyze for hold. How can I hold this? Ask us that actual question, how could I hold it? What are the different scenarios? And, if I do hold it, what is my return going to be? And then the third thing would be, how can I potentially finance it? Could I increase my cash flow? Could I increase the amount of cash? Can I get the best of both worlds if I were to find the finances to hold onto the property, acquire it, and then resell it with seller financing?

Analyze every single deal for those three scenarios. Which path you actually choose, it’s going to be dependent on two things. One, your actual situation at the moment. You might need some cash right now. Like, “I’ve got to pay rent. I’ve got to eat,” or, “I have to fire up my next marketing campaign,” or, “I got payroll.” It could be anything that you need the cash for.

But then there’s going to be other situations where “I’m cool. I’ve got cash. I’ve got some money in the bank. My expenses are covered for the next few months. I really need to start building up my cash flow because I know that’s going to be my fastest path.”

Your situation might be a difference at the point. “How can I hold this property?” Or, you’ve got some cash, you’ve got some cash flow. Things are going well for you and you’re like, “Okay, how can I really accelerate this? Maybe actually becoming the bank in this particular situation is going to give me a higher return on my cash and it’s going to create a higher cash flow and it’s going to create less headache and management issues for me as well.”

You need all three of them to be working for you to have a complete engine running, to be a total genius. This is how a genius is going to invest in real estate. They’re going to be an investor. They’re not going to be a flipper. Their job is to go out and find the deal, to find that opportunity, to secure that opportunity, and then exit in the best way that’s going to get them to where they want to go the fastest. I’m just going to assume for most of you, you would love to have some passive income coming in each month that at least covers your expenses. You would at least like to have the option of getting up in the morning, or not. Right? “I don’t feel like working today. No worries, I’m not going to because I know my essentials are covered.”

I think that’s what most people want. I’m going to assume that’s what you want. That’s what we talk about here because once you hit that position you’ve really got options in life. You can really call the shots. Your negotiations and your conversations, they go a lot differently because now you’re not operating from a place of scarcity, you’re not operating from a place of fear, or need. You might want stuff still, but you’re not in a place where, “I need stuff now and I have to do this deal,” all of a sudden you start compromising your own standards, you compromise your own morals and values because you need something and your fear of losing something.

My whole point being, analyze for cash flow on every single deal. Analyze for cash flow. Make your intent to hold every single deal. You don’t have to, that’s just the initial intent, “How can I hold this?” Because the more that you hold, the faster that you hold, the quicker you’re going to escape the rat race. I don’t care how big that flip is, it’s not going to get you there faster.

We’ve talked about that math before and I’m sure we’ll talk about it again. Just trust me on this episode, but I just want to talk about how you can do this like a real badass genius, and a badass genius escapes the rat race. They get up and go to work and do their real estate because they want to not because they have to. That’s what I want for you. Okay?

So get started. The information, as I said, is free. Go back and listen to all the episodes that we’ve had. We just started our ninth year, very going to for you. There’s plenty of information right here on this podcast for you to get the results that you want.

Anita has proved. Ryan [Bagley 00:24:30] has proved it. Joe has proved it. Larry has proved it. Cynthia has proved it. People that have never given me a dime but have shared their amazing success stories with me, just because of the information they’ve learned in on the podcast. The information is free. Now you’ve just got to apply it.

If that’s the sticking point, you applying it and implementing. If you’d like for us to do the work for you so you can get up and go, so you’re like Mora who says, “Please turn down my marketing, it’s too much right now.” She had her business set up within 40 hours and from seven days of her leaving the office she’s doing deals, she’s setting appointments.

Or like Parker Peterson, they’re doing deals almost implement. Or Josh and Adam. If you’d like and just because you want to accelerate the process, you don’t have the time to go out and do it and you just want to work right away, you can go to I can’t take everybody but you can apply there and if it’s a good fit and we feel like we can get you the results, then we can have that conversation.

It’s up to you. Let’s do a little recap. One, understand any class will do. They all require work, so just choose one and get going. Number two, know your definition of a deal. Get really clear on that, the best investors are shoppers of deals, and you can’t shop unless you know what you’re shopping for. Don’t be a buyer of real estate, be a shopper of deals. You can only do that if you know your definition

Number three, focus on finding the deal. That’s where all of your energy should be. That is the most valuable skill of a real estate investor, it’s finding the discount, finding the discounted real estate. Once you’ve found it, get under contract. Secure it, control it, block out your competition. Secure the deal before you do a bunch of due diligence. You have plenty of time to do that after you’ve secured the deal. Don’t waste time and miss out on an opportunity by doing all your due diligence and investing before you’ve got the deal under contract.

The last one, number five, is analysis for multiple exit strategies. You are an investor and you are in search of the highest and best profit for you in your specific situation at that moment, and that’s going to change from day to day. To analyze for multiple exit strategies, make sure you’re always moving forward every time you get paid from a deal. You don’t want to be standing still, you don’t want to be moving backward. You want to always be moving forward. Got it?

Now you know, time to do. That’s it for today. God bless to your success. I’m Matt Theriault, living the dream.

Matt Theriault

Real estate investor and educator.