How to Achieve Financial Independence Using Real Estate With Dustin Heiner

Transcript:

On this episode of the Personal Finance Podcast, how to achieve financial independence using real estate.

What's up everybody, and welcome to the Personal Finance Podcast. I'm your host Andrew, founder of Master money.co, and today on the Personal Finance Podcast. We're gonna be talking to Dustin Heiner about how to achieve financial independence with real estate. If you guys have any questions, make sure you join the Master Money Newsletter by going to master money.co/newsletter.

And don't forget to follow us on Spotify, apple Podcast, YouTube, or whatever podcast player you love listening to this podcast on it. If you want to help out the show, consider leaving a five star rating and review on Apple Podcast, Spotify, or your favorite podcast player. Now on this episode, Dustin and I are gonna be going through how to achieve financial independence and replace your job with real estate.

And what would your life look like if you never had to work another day for money? That's exactly the question. Dustin Heiner asked himself at 37 years old and then he did something about it. So in this episode, we're gonna break down how Dustin built financial independence through real estate investing starting from zero.

We're gonna talk through the simple math to work backwards from your freedom number, how to create consistent cash flow through rentals and why financial independence doesn't have to be a far off dream. And if you've ever thought I'd love to build passive income, but I don't know where to start, this is going to be a great starting point for you.

Now we're gonna talk about some of the first steps in strategy. We're gonna have Dustin share his own story. We're gonna break down some of the numbers and we're gonna give you some additional tactics as well. But one thing I love is Dustin also talks about why he invests in markets, even when the market is up, when the market is down, or when the market is going sideways.

Where a lot of people come to me right now and they say, I can't find deals in real estate. I'm not able to find cash flowing assets. Well, Dustin is gonna talk through why he likes to invest in real estate in various markets. Now, all of these are gonna be really powerful lessons for you, especially if you're interested in investing in real estate.

Now this is gonna be part one in a couple of weeks. Make sure you're following this podcast because we're gonna have a part two where I'm gonna have Dustin actually coach me live on my situation as I am going to ramp up some of my real estate investing over the course of the next couple of years. And so we're gonna have a part two in a couple of weeks where he is literally gonna coach me live in part two.

Uh, so make sure you are subscribed to this podcast. So this is one I'm really excited about. So without further ado, let's welcome Dustin to the Personal Finance Podcast. So Dustin, welcome to the Personal Finance Podcast. What's up, Andrew? Hey, thank you so much for having me on the show. Yeah, I love talking about personal finance, financial independence.

In fact, I make my money through real estate. I just started buying 2006, just started buying property after property, each one making me cash flow. Eventually I had enough properties so I didn't have to work anymore. Quit my job in 2016, 37 years old. So very blessed to not have to work, but I'm so glad to be on your show.

Thank you for having me on. I am so excited to have you here as well, because that's what we wanna talk about today, is we wanna talk about how to create financial independence with real estate. And it is one of those formulas that really you can work backwards and figure out this formula pretty easily.

And I think a lot of people out there now when you look on social media or people start. Posting about real estate and kind of chatting through real estate and how many properties they own and how many homes they own. It becomes one of those things where I've seen on social media where people don't truly believe it.

And I think this is gonna be the episode where we're talking through. No, you can definitely create financial freedom through real estate and it is one of the most powerful mechanisms I think that we can utilize in order to create freedom. And one thing that you and I were talking about even prior to this episode starting was, you know, AI is something where a lot of people are worried about AI and AI taking their jobs, those types of things.

And so we're gonna talk through today how you can actually create financial freedom through real estate. So just to start this off, what do you think about, you know, this AI revolution and how can we actually utilize real estate as a solution to that problem if we are worried about AI taking our job?

Yeah, it's just crazy where AI is now, but then it. Compounds. Like it gets so much faster and faster in life changing things that AI does. And so I was listening to the guy over, um, open ai. He said, if there's any job that will 100% get taken away is customer service. That's by far like he knows without a shout up doubt that's gonna happen.

I'm like, ah, I could easily see that now. But you think about so many other jobs or things that people do to make money to provide from the Sullivan, her family. Could and probably will get taken away. This definitely is not the show. I'm not the guru on ai. I am like, what's possible? But what I'm seeing coming is there's something that will happen that a lot of people are gonna get hurt.

Sadly, they're gonna lose their jobs. And so I start to share how, what I realized was I could get fired at any given moment. Anybody, in fact, I love the idea or the quote, that it's not if you get fired or laid off from the job, it's when. Just bound to happen. And so instead of being reactive, like, okay, all of a sudden you got fired, or all of a sudden AI takes over your job and then trying to scramble, why not instead be proactive.

Let's start making income now. And so for me, I just wanted to make sure I'm having cashflow coming in, but honestly, in the end, what I'm seeing, ai, I have, I have some really good friends. That are really big in the AI space, like they love ai. They're doing it so much like it runs their businesses for 'em.

It's pretty amazing. They don't pay other people now because AI's taken over things. Think about just you and I. We even go to a conference called the FinCon, the Financial Content Creators Conference where. People who write blogs or write about personal finance, like they're writing, AI has taken over writing.

When you put your mind to what AI can do, honestly, any job can probably be taken just about any job. Now, I find that real estate AI is not gonna be able to, you know, build a house yet. I mean, eventually it might, but you still have to own the house. Somebody has to own the house. But yeah, so that's my perspective is when you are, there's.

Any possible way for you to not be able to feed your family, then we gotta figure out a way to work around that where we have money outside of our, and I like calling it JOBA job is you're living just over broke when you're working for somebody else. Exactly, and I could not agree more. And really, when you have a job and you're working for someone else, you are just one person's decision away from having zero income coming in.

And I think this is one of those concepts where if you can create a way for you to have income coming in, have cash flow coming in, then why not pursue that? And I think that's one of the most powerful things that real estate can do. And so as we go through this, I think we are thinking through real estate, and you and I are kind of on the same boat when it comes to this, is we're thinking through real estate as, hey.

First of all, this is a recession proof business, meaning this is something that everyone has to have somewhere to live at some given point in time. And so there's gonna be housing that needs to be available. And so this is something that you can utilize in order to help replace your income, create financial freedom.

Now, most people listening to this podcast, their entire goal is to use money as a tool to create financial freedom. And so that's what we're gonna get kind of talk through as we go through this. So why did you choose real estate? Why do you believe real estate is one of the most powerful ways to replace your income?

So I started. Many businesses in the past. I had a convenient store that I started from the ground up. I had a skateboard manufacturing business. Um, I even had a paper route when I was really, really little. I had a couple other businesses and I always realized like when you work for somebody else, you are getting active income.

You work one hour, you get paid for an hour. Well, instead you want to try to figure out a way to make more money outside of being active, maybe having a business, having employees. And then I bought one rental property and. All the other businesses that I own and working for somebody else. The real estate was the easiest money I had ever made.

In fact, my real estate, that's what worked like the property that I owned. When I bought my first property in 2006, I got my first check. It was like $317. It's like ingrained in my brain like this works. Oh my goodness. I got a check for my property. This is 2006. Now, this property, I still own it. It makes me, I think, double or triple what I was making back then.

It's the easiest money I've ever made. But at the same time, I also did it wrong and meaning my property manager started stealing from me within six months. 'cause I didn't know what I was doing. But eventually I had to realize there's a right way to do it. There's a way to build a business, which I love sharing how to do this.

We make sure that we are making income every single month. We don't hope for appreciation, but for me, out of working for a job. Oh my goodness. You're working your life way. 40 plus hours. If you have a business, same thing. You're working really, really hard. You're trying to get employees in there. When you have your employee be your property, a piece of real estate that just sits there and then you, hi, here's a key.

Hire experts to do all the work for you. You don't have to work. In fact, I like the book Four Hour Work Week. The premise of the book is Make your Life so that you only have to work four hours a week. Well, honestly. I think working four hours a week is for suckers. I don't wanna work four hours a week. I don't even work four hours a month, maybe 30 minutes a month, looking at all my property management statements, make sure everything looks good, and then put it away and go back to play with my kids, going to the gym and doing all the good stuff.

But what I found. That real estate makes me money without working my property works for me and 'cause I want you to jump in. There are six ways that you make money when you buy one property. The first way is passive income or cash flow. You make sure that all your expenses are covered and then you make cash flow on top.

So that's a profit that you make, number one. Number two, when you buy the property, you buy it for less than it's worth. We're not homeowners. We don't overpay for properties. We don't fall in love. Oh, this is a beautiful house. No, no. We buy it for less than it's worth. So we hopefully capture. 10, 20, $30,000 in equity.

Then forced depreciation. We put money into it. Let's say we put $5,000 into it and then it, it might be worth $15,000 total more. Well then we captured $10,000, you know, forced depreciation up. Next one. Here's an amazing one fifth. Teen years, every 15 years, real estate doubles. That's market appreciation.

It's proven. You see the graph, you see the history. Every 15 years, real estate doubles. And so 30 years you have your mortgage paid off. It's doubled twice. So that's another one. Market appreciation. Another one is tax benefits. I pay almost no money in taxes because the tax code is written by wealthy people who own what.

They own real estate, and so they made the codes to benefit them. One last one is, I love this. If I buy a house for, let's say $200,000 and I put 10% down, which yes, you can do that 10% down $20,000 outta my pocket, I still owe 180,000 in principle and the interest and taxes, insurance, like all that good stuff, but I don't pay that.

The tenant pays me the money and then it goes out to pay all the bills. So it's $180,000 that the tenant's paying off the rest of the property. So it's six ways that you make money. All so many other great things like with inflation, rents go up over time. In fact, I don't even worry about inflation because my rents go up, so I stay the same.

I just buy more and more properties. Does that all make sense? It completely makes sense. And I think overall, this is one of the biggest things I think people need to understand with real estate is the amount of benefits that are available there. And thinking through what Dustin is saying here, one of the coolest things is that somebody gets up every single day, they drive through traffic to work, they get to their day job, they work at their day job, they drive through traffic to get home again, all to start paying off your property.

And I think there is no way out there where you're gonna find leverage like that, where someone can come in and you know, you are literally having somebody else pay. Off your property just by understanding how all of this works. And I think that's one of the most powerful lessons for people to understand, especially when you're prioritizing cash flow, like you're saying, you're not a prioritizing trying to figure out what appreciation is gonna be.

'cause that's something we can't predict. What we can predict though, is figuring out what those cash flows are gonna be and then we get. All these other benefits because of that. And I think that is one of the most powerful things that you could do. So can you kind of talk through and share your story? I want to hear kind of how you got started, uh, thinking about this and replacing your job and really getting integrated into real estate.

Yeah, so I appreciate that question. And the reason why is because there's something happened to me that shoved me that got me so into real estate investing. I couldn't look back well. I just like everybody, we're all taught this same path. You go to school, you get good grades, and you take those good grades.

You go to college or university, get in 10, 20, 30 plus thou like thousands of dollars into debt, and you get a piece of paper and you take that piece of paper, call a degree, and you go to different companies and you try to find a quote unquote career, and then you work 40 plus years of your life. Retire it.

65, 70 years old, and then hopefully live on 40% of what you made that entire time working. A-J-O-B-I call it a just over broke job. Well, I'm doing the exact same thing. In fact, I get the most stable, secure job you could ever think of. I'm working for a local county government in California doing it well.

California's not going away, technology's not going away, and we know government is definitely not going away. So I get the most stable, secure job because that's what I believed in. I need risk-free work. Well. Then I bought one property. So I started working around 2000 ish. Uh, 2006 I bought my first rental property, and then I realized, oh my goodness, this much money coming in without me working.

I needed to be an investor. But you know what happens? Andrew Life started getting in the way. My wife and I started having kids soccer practice and all that good stuff. Well, this is really what shoved me. To become an investor. So when my wife had her fourth child, I went on paternity leave. That's where the dad stays home with the mom, changes, poopy diapers and all that good stuff, and bonds with the baby.

After two weeks of being on paternity leave, I get back to work and on a Friday at three 30 in the afternoon, I get a call from my bosses bosses. Bosses secretary, like the top dog, and she says, Dustin, would you please come to the office? I said, sure. And then I hung up the phone. I thought, why in the world are they calling me to the office?

Like, this is not normal. I've seen plenty of movies. Friday at three 30 is not a good sign. And I started thinking before I went on paternity leave, there were some rumors that there was some budget issues in the county and it was a potential layoffs. And I said, there's no way. I tell myself I get raises all the time.

I got great seniority. No way. I'm gonna get laid off. So I get up. I start walking down the hallway to my boss's office. Well, this hallway isn't very long. In fact, it's kind of short, but every single step that I took, it felt like the hallway got longer and longer and longer, and it felt like my feet became lead bricks because the thought of potentially losing my job was starting to crush down on me.

Well, I get down the hallway. And I turn the corner. I see my boss's door, his door's closed, and I see a secretary there. Super sweet, nice old lady. And she's kind of sheepishly grinning at me trying to console me with her eyes because she knows everything about what's going on. I know nothing about what's going on.

And she says, Dustin, please take a seat. So I go and I take a seat and I start thinking about my life if I get laid off right now. This entire plan that I've been told by somebody else, did I just waste my life doing this? And I thought, oh my goodness, we just had our fourth kid. Majority of my money comes from my job if I lose my job.

Does that make me a failure as a father? Does that make me a failure as a man trying to provide for his family? Well, as I'm sitting there, my hands get all climbing. My forehead gets all sweaty because of nerves are just crushing me. Then the door to my boss' office opens up. Out walks a coworker of mine with a piece of paper in her hands, noticeably distraught, very upset.

She's not necessarily crying, but you could tell her world has just been devastated. She passes by me and my boss says, Dustin, would you please come to the office? So I get up and I go into his office and I get laid off. And remember, this is the government. Nobody gets fired or laid off from the government, but I did.

And this is the reason why I tell the story. So just getting laid off. I take that layoff notice and I go back to my desk and I realize two things. Number one, I need to get another job. I need a way to provide for my family. So I was really, really blessed. Praise the Lord to find another job in the same county.

A different department was not having those issues, so check, got that done. Second thing, sitting there in that desk, I need to make sure that this never, ever happens to me again. I need to make sure that nobody can take away my ability to feed my family. So right then and there. Even though majority of my money came from my job, I realized that's now my part-time job.

I am a full-time investor. So whenever I got asked the question, what do you do, we normally reply, I did just like everybody else with my job, oh, I do technology for the county. Now I started telling every single person, I am an investor. 100% of my money is now not focused on my job. It's now my business, my real estate.

So I'll fast forward the story. Started buying property after property after property, which will make me 4, 500, 600. Or more, $800 a month in passive income. Eventually at 30 plus properties. I thought, why am I still working here? Like this is a waste of time. So last quick part of the story, I went to my new boss, good boss, and all, I said, I'm laying you off.

And he said, what are you gonna do? I said, well, I own real estate. It makes me money without working and I don't have to work ever again. So last part of the story, I would walk to and from my. Car to my job a mile and a half every day, both ways. And I've done it a thousand times. This last time I felt like I was walking on clouds.

I was walking on clouds because I knew I would never, ever need a job again. 'cause for you listening, I want you to realize this. You're not getting paid what you're worth. You are worth so much more than anybody could ever pay you. And this is all y'all know. Your boss is paying you just enough to keep you working without quitting, but not so much money that takes money out of their pocket.

Paid you what it were worth, they would go broke. So instead, what I believe and what Andrew and I both believe is that not just real estate, but just in general, we need to take life into our own hands. We need to make sure that we are independent as opposed to dependent on somebody else. So my suggestion is if you find a way to make passive income or cash flow from real estate, then if you quit your job, you have 40 plus hours of your life back where you don't have to work for somebody else.

You can go play with your kids, you can go travel the world, or what I love to do is I do both of those. And I start businesses that make me even more money. So I'll pause the story 'cause you probably got plenty of questions. That is incredibly inspiring and I think one of the best things that you did overall is when you felt the pain of kind of getting laid off.

And luckily you like started to invest, you know, early on, and were trying to kind of create some financial freedom early on. But when you felt that pain of getting laid off, you realize very quickly. I need to focus on the things that I can control. And I think that's one of the most powerful things that someone can do, is once they realize, they focus on the things that they can control, and you became a full-time investor and became a part-time, you know, worker for the county or the city.

And I think that's one of the most important things that you can do. Is taking control of your life. And so once you got started there, you began investing in real estate. So what are some of the kind of the steps and things that you did early on? You know, how many properties did you have when you kind of left your job?

And then what are some of the steps that you took in order to try to scale that portfolio? Yeah, I lo, and you use, the key word is scale. So most people can buy one property, maybe two or three. But to scale you have to have a different perspective. For me, when I first got started, if you remember I said at the very beginning of the show, my property manager started stealing from me within six months.

'cause I had no clue what I was doing at the very, very beginning. Now, if I would've let that stop me and just hang my head and say, oh, it just doesn't work, that I wouldn't be here today. But what I did realize was that. Other people had done in the past. I just need to figure out the right way to do it.

And remember, I shared how I started businesses in the past, so I realized, my goodness, I was approaching this from the wrong way. In fact, this is 2006. And so instead of TikTok, there was these infomercial gurus that would come on TV late at night. Hey, we're come to your town free two hour seminar, all hype sales pitch, run to the back.

It's normally a million dollar. Anyways, I got suckered into that, and so I started doing what they were telling me. Well. Essentially makes sense, but it's actually wrong. I'm not saying they're not investors. I'm just saying I've learned as an investor to do it right. Here's the right, right way to do it.

So the right way is not following the Instagram or TikTok gurus that just tell you to do stupid things, but this is the right way to do it. The right way to do it is you build a business first. So when I realized that my property manager was stealing from me, I realized that I did not do everything I needed to do to start a business that could run itself.

I talk about building a business. First is we don't want to be just an investor, like we invest our money in a stock market. We just put our money there and just, well obviously hope and pray that it goes up, but you're trusting that this company is gonna be doing worthwhile stuff to make the stock rise.

You just kind of set it and forget it. Real estate's not like that. What we need to realize is we don't invest for appreciation. Like I don't care if the value goes up. Like it's not how I invest. When it does go up, it's great. I take the cash out in a tax free loan and then buy more properties. That's how I scale.

The word scale comes up, but the only reason why or uh, yeah, only way that I can do this. It's because I built a business that then owns inventory. And let me show you how that works. If you're gonna start a convenience store that's, you know, candy bars and soda machines, all that good stuff, well, you would not sign a lease on a location, open the doors and set a box of candy bars in there on the ground.

You wouldn't do that. You go outta business in two seconds. But what you would do is you would build the business first. You get the gondolas, those are shelving and it's all the candy bars go on the countertops, cold storage, bank accounts, cash registers, insurance employees, like everything in the business.

Before you buy any inventory. Then once you have everything built and the business built, that's when you buy the inventory and put it into your business. Every property that I own, I have 30 plus properties. Now when I quit, my job is around 19, but I have 30 plus properties now. And then I also have, uh, two large apartment complexes total of almost 800 units.

But every piece of property that I own is a piece of inventory that my business runs. Now, one other quick thing that I have to share, because a lot of people. When they invest in real estate, and this was back in 2006 when I first started investing, everybody was saying, you better buy now because if you don't, you'll never be able to buy.

And they're saying that right now, which I'm not saying there's gonna be a crash. I'm just saying I've heard all this before. I've been since 2006. Well, it did eventually did crash and I bought a lot more properties. But here's the amazing thing, no matter if the market goes up. If the market goes down or if the market goes sideways, I make money because I invest for cash flow.

Now the appreciation will be there. Remember every 15 years real estate doubles, it'll go down, up, down, up, down, up. But because I invest for cash flow, if the market goes up, I make money down or sideways. In fact, I make more money if the market crashes. Let me tell you this 'cause I want you to jump in, but I gotta share this.

One quick last thing. When you build the business, you have cashflow coming in. Sadly, in 2008 when everybody was getting laid off, fired or whatever, they were losing their homes, which is very sad. Very sad for them, but, but they had to foreclose. But instead of owning their homes, what does that do? The demand of real estate for rentals, it skyrocketed.

So I made more money because rents went up because there were so many more people wanting to rent my properties. And so because of that, what I suggest in order to do it right, and then in order to scale to 10, 20, 30 plus properties. We build a business first, we find the experts. This is key. We find the experts, and I do this all different states.

I gotta jump and quickly say, I don't do this in my own area. I invest in Ohio, Texas, Arizona, Tennessee, and Indiana, and everywhere that I go and all the thousands, I've coached thousands of students. Now how to do this. What we do is we build a business no matter where we are, and we make sure we hire the experts in those cities and states that we invest in, and we hire the experts who are the experts.

Property managers, contractors, inspectors, mortgage brokers, roofers, plumbers. You think of anybody, and realtors, obviously, I'll put them in there, but they're one of the last ones there. Finding the property is easy, is really easy. What we wanna make sure is we're gonna make money every single month, and that's through property management, maintenance, contractors, plumbers, roofers, and handyman, all that sort of stuff.

Does that make sense? Like we wanna build a business and make sure the business is making us money and hire experts to do all that work. And I, I love that because really overall what you're doing is you're creating a system. This is why you don't have to work so many hours in your business because you're putting that system into place and then you're allowing the system to work.

And so I wanna talk through this system and how you're kind of doing this. 'cause I think it's really, really important for people to understand that real estate isn't. You know, you just wander out and you go find a property and see, you know, does that property actually cash flow more than the mortgage?

No. You probably lose money if you, you were running the numbers that way. And so this is something where you are systematizing this entire process and you don't even have to invest in your local area. You can invest to outta state. So I wanna kind of dive into some of these things that you are doing.

'cause I think it's really, really important. So if we're starting off and we're trying to think through. I wanna do this too. I wanna replace my income with real estate, and I want to be able to have this financial freedom that Dustin has. Dustin accomplished it, you know, early on in life in his mid thirties, and this is a really, really powerful thing that I want to test out too.

If they wanted to build that business and they first wanted to build out. Their team, how would you kind of coach them or have them look at this in terms of building out that team? Would this be something that you would go out and try to, you know, find the property manager first? Would you just try to find those deals first and then find the property manager, or how would you think about that?

Yeah, let me give you the step by step of how I coach everybody. So. Actually I'll, I'll start it this way. Before I get into this step by step, what most people think, and I did this, every single real estate investor or people that want to get into it, we realized that we're missing two things, but honestly, these two things that I'm gonna tell you, you're gonna be thinking, oh yes, I'm missing those.

But I would also, what I'm helping you to understand, because I'm an investor, I've coached thousands of people now how to do this. These are the easiest parts of the investing. The first two, or the first one out of the two is people immediately start thinking, I don't have any money. I don't have any money to invest.

Well, I kid you not. I've used at least 20 different ways to get financing, creative financing to get properties. So when you think about money being your problem, I don't have money. I have bad credit, all that sort of stuff. Trust me, that is not the problem. Your problem is lack of options, your lack of knowledge of all the different ways to get financing or I like using the terms access to capital.

Capital, meaning money doesn't have to be your money. You work for 30 years to save up your life or a life savings to buy your first property. No. So that's number one is funding and we can crush that. I'll help you to crush that, but I wanna jump into the second one that most people also jump right to. I don't have any deals, like I get money to buy the deals.

That's number one. Number two is how do we find the deals? I kid you not, those are the easiest. Parts and on my podcast or my YouTube channel or whatever, those are usually the highest downloaded or highest viewed is because people immediately write to that. But the harder part, which you started asking the right question is, number one, how do we find the right area to invest?

But number two, how do we make sure that we're making money every single month that our property managers not. Dealing from us that we could continually make money over and over again. And so the reason why I wanted to bring that up is to crush those that we will definitely jump into those meaning how to get financing easy.

Trust me, I'll take care of that. And how to find, I'll sh trust me, I'll help you take care of that. But then now that we got that covered, those are easy. Done. Put those outta your brain. Now we gotta figure out where we invest and how do we make sure we get the experts. So this is a step-by-step process.

Once we got those first two out of our brains, and we're not gonna think about it first, we gotta figure out. Where are we gonna invest? Because just like any business, you have to figure out what's the best market for your type of business you're investing. Now, here's what I, what I do. I help my students find a great state and then we narrow down to the city.

Remember, we gotta find a good location that we're gonna build our business. I'll give you a couple examples that are great. Right now, Memphis has been really, really hot. Um, Birmingham, Alabama is really good, but just think about like Midwest. Midwest has been just lower priced homes. Higher price rents, which are phenomenal.

So we're finding a city. We narrow down from the state, we narrow down into the city. What I look for, what I teach all my students, is we look for inventory. How many properties in a city that we can continually scale our business. If you find one property in one town that has like five people population, more than likely that's only one property you're gonna be able to buy.

More than likely you're not gonna find any property managers, very few contract, like it's gonna be really hard to do business. But if you find a big city that has lots of inventory, which means you're probably gonna have lots of people that want to rent your properties, a lot of people that want to manage your properties, property managers.

So first we start with the inventory. The cities. Like I said, Memphis is really good. Um, uh, Birmingham, Alabama, Atlanta's been decent. Um, Ohio, Ohio's got some great places. Indiana has some really great places, but okay. We find a city that has good inventory, lots of properties that we would want to buy, give you quick cookie cutter type home that we love.

Three bedroom. Two bath, 1200 to 1700 square feet, not too small, that families don't wanna live there. Not too large that you're gonna have extra walls to paint, extra toilets to fix and all that sort of stuff, but you're gonna get great rents for those. Once we find those a good city that has good properties, then we stop looking for properties, meaning.

Those properties probably won't be there. By the time we get done building the business. It might be sold, but at least we know this is a good city. Then we start building a business, finding the right people. I'll start with or how I always tell my students, we interview multiple, many property managers.

That's the quarterback. Of your team. I don't wanna manage my properties. I've got 30 plus single family homes. I got apartment complexes. I don't do any of that work because I wanna hire a good property manager, contractors, plumbers, roofers, inspectors, mortgage brokers, like you think of anything in the business.

We do all of that billing. We find the right people first before we buy the properties. Does that all make sense? It does. And I think that is, that is a huge portion just to get started, is to think through, okay, well we need to you, what you're saying is true. That's the number one question that we get whenever we talk about real estate too, is, Hey, how do I find deals?

Which is why I wanted to have you on here, 'cause I think you are better at this than most people out there is, is finding deals, finding that financing, which is really important, which getting creative in real estate is one of the most powerful things. And then we're building out this team and working on this team.

I think one thing that you're noting here is that you're trying to choose a location. It doesn't have to be your local area. That's where I think a lot of people get stuck too, is they think, okay, my local area, you know, everything is expensive in this area. All the houses are, you know, maybe there, there's some bigger houses in their area and they just can't figure out exactly where to invest.

But you're kind of breaking, uh, the mold there and showing, Hey, you can invest out of state, you can find these additional locations, and we need to build a team surrounding this so that we're not spending all of our time. So even if we have a full-time job right now. We can utilize this team. This team is helping us manage these properties, especially since we don't live in those locations.

And so as we go through this and think through this. How are you kind of like analyzing these deals and how are you kind of thinking through that process? What I love about this is you have the mold of house that you wanna have in place. And this is kind of how I invested in real estate too, is I had these very specific parameters and I almost felt like sometimes my parameters were too specific 'cause I was looking at some of these deals and then all of a sudden some of the deals that I should have bought I didn't buy because they didn't fit in my little mold here.

And so when you're kind of analyzing deals and looking through this, you know, how do you figure out, hey. How do these deals? Cash flow number one, and then two kind of how do you choose your properties? 'cause you said it's a lot easier to find these deals. So are you looking like on Zillow or are you looking off market, or how are you thinking about that?

So lemme tackle it in a couple of, I guess, segments or parts. So we'll jump into the finding the deals like Zillow or something like that. You just ask that question, but then we'll jump into the first part of it. So honestly, in finding deals, I find deals. Actually, lemme say it better, people send me deals.

I don't find the deals, the deals come to me. And the reason why, since 2000 and what, when I first started 2006, I started telling every single person that I'm a real estate investor. So everybody knows me as a real estate investor. And so guess what? If somebody has money that they want to invest, they might call me up, Hey, Dustin, wanna invest some money in real estate?

Can I invest with you? I'm like, okay, let's talk about it. So, because people know me. As an investor, just like if I wanted to become a famous singer, if I don't tell anybody that I sing and if I never practice sing, I never do anything. Will I ever become a singer? Probably not. Instead, what I do is I tell every single person that I'm a singer right now.

Like I said, I tell everybody, I'm an investor, so every single person I meet, either another investor, a property manager, uh, Facebook group, so like you name it. Everybody in the cities that I invest know me, so they send me deals. So realtors will send me deals, wholesalers, those are people kind of like realtors.

They find the deals and they wanna send me deals. I've had property management companies send me deals. I've even had title companies send me deals because, hey, this one fell through, would you want it? And so I look at it. And so the number one thing is. If we're going to be an investor, we wanna have multiple ways that we get financing or finding properties.

We want everybody to be sending us deals. Now we also do, I've done direct mail where I send postcards. If you own a home, you've probably seen it, Hey, we buy houses for cash fast and all that sort of stuff where you see the bandit signs of the ones on the streets and everything like that. Well, I've done those too.

Those get people to call who might not normally be interested in selling, but like, you know what? I might wanna sell, or, oh my goodness, I'm getting a divorce. I wanna stick it to my wife. I gotta sell it fast. Let me get it to something that's happened before. And so crazy things have happened. So in finding the right properties, what we do is we tell everybody that we're an investor and they send us deals.

Now, if I'm gonna find properties on my own off market, meaning they're not on the MLS, which I buy properties on MLS, I buy properties, off market, all these sort of things. There are many ways to do it, but the biggest one is if you're gonna remember anything, tell every single person that you're an investor, everybody person you talk to.

So does that cover the finding for you? It does, and I think that is super helpful because it's one of those things where you just gotta have that megaphone out, telling everybody that you're an investor and a lot of times deals will start coming to you. So I think that's perfect. Awesome. Now let's start talking through the other part.

A lot of people sell me, well, Dustin, how in the world am I gonna be investing? I can't drive there. I'm not gonna fly there. Every time the toilet gets broke, I'm like, yes, you don't wanna do that. You wanna hire the other people. 'cause your time's so much more valuable than spending it flying someplace to fix a toilet or something like that.

So we're talking about building a business. Before I get into building the business, what I wanna do is quickly jump into the financing. That helps people to realize why we do financing in order to scale their business. So lemme quickly explain what it looks like. 'cause you also asked, you know, how do we make sure we get financing for financial independence?

So what we do is we calculate all your expenses. So when you're trying to figure out is this a good deal or not, we calculate all of our expenses. That is mortgage taxes, insurance, property management fees. In fact, one quick thing, side note. Some people ask me, Dustin, how do you afford a property manager?

I said, I don't afford a property manager, meaning I don't have to get a job to pay for my property manager. I make sure that expense is paid for before I buy the property. So you add up all those. Even vacancy factor, like how often will it be vacant? Well, 5% of the year I might be vacant. So let's add that in there.

Repairs, capital expenses, like if a roof goes out. So you add all expenses. Most people wouldn't tell you this or they don't think to do this, but there's a thing called Profit first. Well. Profit First is a great book. I was doing this back in 2006 'cause I said, I do not want to buy a property unless I'm making X dollars in passive income cashflow every single month.

So this is what we do. Just like all of your other expenses, your cashflow, how much you wanna make, you do not wanna guess. Ah, I hope I'm gonna make a hundred dollars. I hope I'm gonna make $50 a month. No, no, no. We make sure that's an expense line item. Just like you know, your mortgage, let's say it's a thousand dollars.

You put your expense of your profit or your cashflow. I want $500 a month, so I make sure that that expense is in there as well as all the other expenses, and then I can rent it for more than all of those expenses. Then I know I'm going to be doing well. Now you might be, some people might be thinking, well, Dustin, how do you do that with, you know, long-term properties?

What I like to share or tell all my students is we do buy and hold, not necessarily 12 month leases. We can do 12 month leases, but with buy and hold, we're gonna hold on these properties perpetually. In fact, my kids, you could probably see 'em in the back if your watch is on YouTube. I have four kids there in my picture, but I have five kids.

Now, I'm gonna give all these properties to my kids, like literally generational wealth, giving it to them. But what I do is I make sure that it's cash flowing from day number one, making me $500 a month. Every single month. That's $6,000 a year. Now, if you want financial independence, I love that. It's just easy arithmetic.

Like I'm not that smart. More than likely, you listening are much smarter than me. So $500 a month at one property is $6,000 a year. 10 properties, that is $5,000 a month. $60,000 a year, 20 properties is $10,000 a month. $120,000 a year. More than likely, every single one of you listening, you're gonna be able to quit your job if you had 20 properties.

At $120,000 a year in passive income. So what I love to do when I analyze deals, I make sure that all the expenses are covered and then. Make sure that expense of passive income or cash flow is in there and then it's covered as well. So we will do long-term short-term midterm. So short term, you know, Airbnb, VRBO, we do midterm, which is 30, 60, 90 days.

Traveling executives, you know, businesses and traveling nurses. We also do co-living, co-living, rent out per room. That is gonna explode. Trust me, it's gonna explode. Co living's gonna be really amazing 'cause your house is so unaffordable for most people. And younger people don't even want to own the home.

So that's what we do. We buy and hold long term, short term, midterm, and even co-living and give these to our kids, but we make sure we're making cash flow every single month. All the 30 plus properties that I own that are sify me home, I still own 'em. I've only seen one of them before. I bought 'em, all of them, literally.

I just have other people send me pictures. I don't go to 'em because I don't need to. I hire the experts. They're the ones that do all the work for me. And I think that is just one of the, the most powerful parts is having those experts in place so that you don't have to do the work. Because I remember when I first started, for example, and we could talk through this, I know we're gonna do a second episode just so everybody knows where we're gonna be doing some coaching stuff and going through this.

But when I first started, one of the things that I did is I was the sweat equity partner. So I had partners who were cash partners. I was the sweat equity partner, and when I would do deals, you know, I would be getting all the phone calls, I would be getting all the tenant phone calls and kind of working through this process of, you know, hey, my toilet is, you know, flooded.

I got to go over there and, and figure out a plumber like in the middle on a Saturday night, middle of the night. Uh, and so there was all these different things that I do know. I knew I could have a property manager in place, but in this situation, I was the property manager because I was the sweat equity partner for these deals.

And so it's one of those things that I love to hear, kind of some of the parameters that you have in place, and you're focusing on your time because your time is the most valuable asset that you have. And so getting that time back is what the entire goal is. Now, one thing that is very interesting to me is that you have these parameters around cash flow stating, Hey.

I want $500 per month. Because I think one of the, the big misconceptions for a lot of people is they think the only way I can invest in real estate right now is either, you know, having a, making a hundred to $200 per month in cashflow. And if one thing goes wrong with my property or I have to replace my air conditioning unit, or, or something along those lines, all my cashflow gets wiped out if I did not plan for some of these things.

And so. For a lot of people out there, that is a hurdle that they try to kind of get over or they, they can't get over a lot of times when they're thinking about investing in real estate. And so are you finding deals right now that have that $500 per month cashflow? And is it because you're investing in outta state or how are you thinking about that?

I'd say yes to both. So you can find in certain areas, obviously somebody's living in San Francisco, it's gonna be a little bit harder. Or New York City, you know, it's gonna be a little harder to be able to buy these properties and, uh, get good cash flow. Um, but at the same time. Well, lemme say it this way, a lot of people ask me, Hey Dustin, interest rates are high.

Prices are high. It's, it's a bad time to invest in real estate. My suggestion or my opinion is it's never a bad time to invest in real estate. Meaning you do not wait to buy real estate. You buy real estate and then you wait. Just over time, you're gonna make more and more money. Your mortgage gets paid off, which is amazing as well as you make all that cash flow, you get all the benefits, the six different ways I told you, make money with the real estate.

So there's never a bad time. To invest in real estate. There are only bad deals, so if interest rates are high and prices are high, you're still gonna find bad deals. They're still gonna find good deals. If interest rates are low and prices are low, you're still gonna find good deals. You're still gonna find bad deals.

My suggestion is, and you've mentioned this just a little bit ago, that your buy box or what you were looking for was. A certain direction or a certain way, and then a deal would come that you should have bought, but you weren't really looking for it. I get students all the time say, Dustin, I have X, Y, and Z.

Like I have this much cash. This is what I'm looking for. Should I do this or this or this? And all the students, they have that in their brain, like the word or I'm like, no, it's not the word. Or you need to get that out of your mind. It's not or it's And meaning. Yep. You look at every single deal that comes your way.

'cause if you're dead set, I'm gonna buy a duplex. That's what I'm gonna buy. I know I'm gonna buy it. And you pass up deals that are gonna be fantastic. Home runs, well you're messing deals. So we, we do is we look for deals that are gonna be cash flowing us. Making sure we're making passive income now.

Right now what I'm finding is that yes, it's harder to find these deals. Back in 2010, oh my goodness, you could trip and find a property and make a lot of money just 'cause it's, it's a different market. I think eventually might come back to that. Um, I don't think it always goes up. In fact, when people, I remember 2008 they were saying, you better buy now.

'cause if you don't buy, you're never gonna get to buy. Prices are only gonna go up. Well, I've heard that before and they're saying that now. So we'll see. We'll see what happens. But I don't wait. To buy real estate because when you do. Just imagine if I stopped in 2008. Oh, I'll just wait. 2009, 10. I just kept waiting.

In fact, uh, one of my students started coaching with me in, uh, 2020, like right when 2020 happened, COVID happened and he was like, should I wait? I'm like, I wouldn't. I would keep buying. That's what I'm doing. Just keep buying. Well, in three years he now has 29 units. He just been doing a great job scaling, getting private money, investors, all that great, doing a really great job.

But what we do. We make sure we build that business. When we build a business, we get financing to buy the properties. Let me share it this way. One other quick thing. I don't invest for appreciation. I invest for cash flow. Let me give you example what that looks like. Let's say you can buy and sell a candy bar all day every day.

You can buy it for 50 cents and sell it for a dollar. Well, you would think, how can I buy more candy bars? 'cause I know I can make 50 cents every single time. What you would not do is buy it for a dollar and hope in. Six months or two years, or however long that you're gonna sell it for a dollar 50. No, you wouldn't go into business.

You go outta business. Like that's what we need to do is realize when we become quote unquote investors, we're not necessarily investors. We're business owners. When we're investor, we set it, forget it. Don't do that. When we're a business owner, we're investing for cash flow. So if you can buy a candy bar for 50 cents and sell it for a dollar, you're making 50 cents every single time.

Now, the great thing about real estate investing, let's say you did not even have 50 cents. You didn't have that 50 cents to buy it, but it cost you 25 cents to borrow 50 cents. You're out of pocket, 75 cents. You still sell it for a dollar. You're making 25 cents every single month. That's why I love the term.

Becoming an income builder. So we're business owners and we build income into our lives, so we have cash flow coming in every single month so that all of our expenses are covered. That's why I love the term successfully unemployed because I used to tell everybody I was retired and they, they would've this.

Puzzled look like you're too young. Like what do you do with your life? And I realized that, oh, I gotta change it. So my wife helped me come up with a term successfully unemployed, meaning I found another way to provide for myself and my family without working a JOB that just over broke job. And now I just hang out with my family, talk to great people like you and don't work a job.

That's, I love that term. And you always, every time I see you have a shirt that says successfully unemployed, which I absolutely love. 'cause I think it's your kind of go-to slogan too, which is fantastic. And I wanna kind of wrap this specific episode up with one last question. 'cause I think there's a, there's a tactical thing that we can look at here.

'cause this has been so incredibly valuable and I'm really excited for people to hear this one. And. I guess if someone is deconstructing their life and they're looking at their income and how much income they have coming in, how can they think about, you know, replacing their income with real estate? The math seems pretty simple, so you said, Hey, I'm trying to cashflow $500 per month.

You kind of reverse engineer this. How would you tell them to kind of think about this and put together that plan? Yeah. For me, the plan came when I asked my wife back in, I think it was like 2006 when I seven-ish. I said, Hey honey, what are our expenses? Like how much does money comes out of our pocket every single month?

And I remember the number, play it as day. It's like it's ingrained in my brain. $4,200 back in 2006. $4,200 is what we needed for mortgage insurance, you know, for the family food and all that sort of stuff. I said, okay, if I bought a property, each one making me $500 a month, and I just went through the scenario.

So you know, at 10 properties. Then I have $5,000 a month. My expenses are covered. Now here's one key thing. Let's say you're sitting here, I need $6,500, Dustin. Well, okay, well, $6,500. We just work our way backwards. We figure out how many properties that we need in order to get that $6,500 in cash flow.

Now, but here's the key thing. There's the reason why I say it was key. When somebody buys their first property. More than likely they are gonna do it wrong, and they eventually become a quote unquote, property management landlord slash landlord. Like they manage a property, they're so worried about the property.

They're the ones fixing the toilets, they're, it has to be in my area. I have to know everything about what's going on with it. Then they get to two or three properties and then they start thinking like, oh my goodness, I don't have enough time anymore. Like then they get to six, seven proper. More than likely somebody that goes that direction of being a mom and pop, I like calling 'em a mom and pop landlord.

They start pulling their out because they don't have enough time. Well, you said it's the very beginning. How do we scale? How do we scale to where we have financial independence? Where we could get that $6,500 every single month in passive income is we need to scale the business by having. Other people do the work for you.

So instead of being a mom and pop where you're saying, oh, I'm trying to save money, like I want to quit my job. So I'm, instead of paying for a property manager, I'm doing the management myself. I'm like, Ooh, in the end, you're gonna be paying it one of two ways. Paying for somebody else's time or paying with your own time.

And that's the most expensive commodity you're gonna spend is your time. So what I suggest instead, if you've been listening to what I've been telling you and you do what I've shared with you, where you build the business, you get the experts doing the work for you, and even find mortgage brokers or.

Private money, like you get other people that are gonna lend you money, then you can scale it because you have other people running your business. You have other people funding your business, and you have other people sending you deals and then you can scale. 'cause what you don't want is be where you have 3, 4, 5, 6 properties and then you're pulling your hair 'cause you're doing all the work and then you're gonna give up.

I've had a lot of people give up and sell me their properties, which I don't want that to be you. I want you to do it right the first time and then be able to scale. I think that is the most powerful lesson of all is, is having the ability to scale by making sure that you have other people and you have these systems in place and you have these parameters in place that kind of help you, uh, be able to do that.

Well, Dustin, we're gonna do a part two, you and I, where we're gonna talk through some tactical stuff and, and coaching and now all that kind of stuff. But if somebody is listening right now and they wanna find out more about you and everything that you're doing right now, let 'em know where they can find you.

Awesome, awesome. So my goal is to help a million people to invest in real estate. Can I just give everybody a free course completed for free? Absolutely awesome. So I want you to invest, like I said, my goal is to help a million people to invest in real estate. 'cause I make my mind through real estate.

This is just fun, but hopefully you can share like it comes across. I just love talking about this stuff, so get my real estate investing course completely for free. You could text the word rental, REN. TAL rental. 2 3 3 7 7 7. Rental to 3 3 7, 7 7 or go to master passive income.com/free course. All one word slash free course.

Get it. I've had so many people just get investing just by that. You can even find me on my podcast, the Master Passive Income podcast, which Andrew, I'm gonna have you on talking about all your real estate. So. Just like your show that show my show Master Passive Income is a solo show. I rarely do interviews.

It's me just coaching, just teaching. I've been doing it since 26, 15, 20 16, couple million downloads now. So it's really fun for me now. So check out that podcast YouTube as well. But one quick thing, I've actually been getting a lot, having a lot of fun on Instagram, and so I'm at 240,000 followers now on Instagram.

I've done it all organically. I didn't buy any, no bots whatsoever. Incredible. All organically, but you could find me on there, the Dustin Heiner, THE, Dustin Heiner, reach out to me, say, Hey, I, I listened to you on Andrew's show, and I would love to chat and help you out as much as I can. But man, Andrew, it's been great.

You have amazing questions and I can't wait for part two. This has been absolutely incredible and so valuable to us as well. So we'll link all of that stuff up in the show notes down below so everybody can check that out as well. And Dustin, thank you so much. In a pump for part two.