Transcript:
On this episode of the Personal Finance Podcast, how to make 10 K per month in cash flow 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 diving into how to create $10,000 a month. In cashflow with real estate. If you guys have any questions, make sure you join the Master Money Newsletter by going to master money.co/newsletter.
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If you go to master money.co/join, you can get more information on Master Money Academy and you can get live coaching from me now today. We're gonna be diving into part two with Dustin Heiner. And what we're gonna do in this episode is I thought it would be a fun idea to have him coach me live on the podcast.
So I'm gonna be investing more into real estate over the course of the next couple of years as one of my goals and. I talked through with this with Dustin live on the show and I said, Hey, I want you to come up with a plan for me to be able to make $10,000 per month with real estate investing because I think a lot of you out there, that's the number you always come up with when I ask you, Hey, if you could make more money in real estate investing, how much would you need to make?
And everybody comes up with a round number of $10,000 per month. So I thought this example would be a fantastic session where you can hear how Dustin actually coaches people to get started in real estate investing. And so what we talked through is what if you could turn your money into $10,000 a month in cashflow over the next decade?
And that's exactly what we're gonna map out here with Dustin who left his nine to five at 37 by building steady rental income. So in this episode, I bring Dustin into a real scenario. I have $250,000 available to get started, and my target is $10,000 per month within 10 years. Now, Dustin is gonna give a step-by-step plan to reverse engineer that goal, choose the right mix of properties and pace acquisitions so the numbers actually work.
Now, a quick primer for you all before we dive in. We're gonna talk through three different type of rentals, and we dive into this a little bit in the episode, but we're gonna talk through short-term rentals, which are typically about 30 days and the highest income per night, but they need active management cleanings, and consistent bookings.
You're gonna hear me say this in this episode. I just don't like short-term rentals long-term, if there is a recession or something else going on. Then we talk through midterm rentals, which run about one to six months. And these are great for people like traveling nurses or corporate stays. They have fewer turnovers than short term and are usually furnished and have more stable income.
And then long-term rentals are 12 month leases or longer, and they're the most predictable and hands off with lower cash flow per unit. But they have solid s. And so we're gonna use these three to design a realistic path to $10,000. And there's gonna be simple math that we're gonna walk through. If you net $300 per door, you need roughly 34 per doors.
If you net 500, you need about 20. And Dustin is gonna show us how to blend short and long-term rentals to raise average net cash flow per unit, reduce vacancy risk, and keep management sane. So we're also gonna dive into a number of different things on how to go higher and find a property manager, and he gives us some golden nuggets on that as well.
So grab a notebook because by the end of this, you're gonna know how to work backwards from your freedom number and build a 10 year roadmap to $10,000 a month in real estate cash flow. So I am really excited for this, and if you are ready for it, let's welcome Dustin back to part two on the Personal Finance Podcast.
So Dustin, welcome back to the Personal Finance Podcast. Thanks, Andrew. Super pumped to be back on and thank you so much for having me on for last week's episode. Super great questions and I just hope that people realize that investing in real estate's actually very, very possible that anybody can do it, and hopefully they can too.
Exactly. I highly encourage every single person out there, if you haven't heard part one, go listen. 'cause that's gonna be kind of the baseline of what we're talking about today. And we're gonna talk through some of the things that I am personally thinking through when it comes to real estate today. And then we're gonna tactically have Dustin kind of show us and talk through some of these lessons that we talked about in part one and show some of the tactics and the things that we can try to tackle here as we go through this process.
So Dustin, I'm gonna lay out, uh, everything to you here, and then I want you to kind of. Ask me questions and we'll go through this entire process. So I just sold a business. For those of you listening out there, some of you may know that I owned, uh, pickleball facilities and we sold the business to one of our partners.
And so now one of my big goals is to figure out a way to get back investing into real estate. So in my past, I invested in real estate with two cash partners and we would, uh, buy single family houses and small multifamily. So the small multifamilies, I'm talking. Duplexes, triplexes, quadplexes, everything that was considered, you know, uh, very small multifamilies and that's what we purchased.
And we would do, you know, one at a time, really, really strict deal parameters in terms of the way that I structured these deals. And in the end, when we decided to, Hey, we're gonna just go and invest, you know. In part ways. We ended up selling the portfolio because we had these partners together and I figured, Hey, I can go do this myself.
Well, since then, once I sold the portfolio, I started to kind of buy businesses and I haven't gotten back into real estate yet. So one of my big goals is I already have experience in real estate in terms of kind of investing. And so one of my big goals is to think through this process now, a hurdle that I have in place.
Is that locally, and this is what you and I talked about last episode, but locally, I am having a hard time finding deals. So I'm in the Tampa area, which is a hot market because a lot of folks from all over the country kind of moved down here during COVID. And so real estate prices increased and so now they're kind of at a flat rate right now.
But I have not been able to find deals, uh, in my specific area and probably haven't looked hard enough yet, to be honest. But that is just one thing that. Is one of the hurdles that I have to jump over. And so you mentioned in the last episode that you kind of invest out of state and you invest in different areas, which is something I've always, always been interested in.
And so looking at this, how would you first, if you were in my situation, how would you think about maybe some of the properties that you were looking for? 'cause I've also considered commercial and kind of thinking through that process, but I do have experience and all my experience is in residential.
And really I wanna invest for cashflow. So I'm gonna give you a number. I'm gonna try to think through this. 'cause hey, this is maybe, uh, good for the title too. But let's just say somebody wants to make me specifically, I wanna make $10,000 a month in cashflow. Okay? And because I wanna make $10,000 a month in cashflow, I want to kind of put a plan together in order to do this.
Uh, and let's. For argument's sake. 'cause this is also true. I have $250,000 that I want to start investing into real estate. And so this is the starting point for me if we need to do down payments or if we need to do creative financing, some of those types of things. And so I wanna build up this portfolio over the course of the next decade in order to produce at least $10,000 a month in flow.
And probably my, you know, my parameters always change, where I always just kinda. The ball just keeps kind of moving higher in my court, so I always just kind of increase that stuff all the time. But let's start at that point in time and tell me kind of what your thoughts are there. Yeah, so whenever I work with any student, the first thing we have to realize are a couple things or not realize, but like help the student to come to understand, number one, the risk tolerance.
Are they okay with investing outta state number one, getting, um, leverage or using, using, getting financing, which we've covered just a second. Um, but then also their goals. And so I definitely appreciate the goal of being able to make $10,000 a month. It's definitely something that's very doable, especially we, you're starting at $250,000.
In fact, I've had students that, like, I'll give you one quick example. Um, a pastor in Sacramento. Didn't have any money. You know, pastors don't make much money. Yeah. And so he didn't have any savings, but he said, Dustin, I know I'm not gonna be able to work forever, so help me to invest in real estate. So what we did was I helped him get a heloc, a home equity line of credit on his house.
He tapped into that. It's 'cause he owned it since 2017. So he has a good amount of equity and then. He had $250,000 that he has now access to capital, or don't you remember those term, those, those words, access to capital doesn't have to be your money that you slaved away for and saved and, you know, got half a percent or less in his savings account.
So his property worked for him, took that cash, bought a property in Atlanta, Georgia, that now property is free and clear. 'cause he used his home economic credit. Well, he may might be thinking, well he's got a payment, right? Yes he does. But that new house that he bought, he then got it fixed up, got it rented out.
Got it managed, and now I think it was, I can't remember how much he, like 600 bucks or something like that. A month of passive income. He refinanced it, pulled that cash out of that Atlanta property, then paid off his eloc. Now he has that eloc to do it over and over again. So here's reason why I brought up that story.
I. It's having access to capital. So for you listening, let's say you might have an IRA, well, we can do a self-directed IRA. If you have a HELOC or a home that has a little bit equity, we can utilize that. There are countless ways to get financing, but Andrew, where you're starting at $250,000, I'm gonna give you one piece of advice that you'll probably never hear anybody on Instagram or TikTok tell you this, that coaches how to people, how to invest in real estate.
What I'm gonna tell you is it's very easy. To have a perspective of, okay, I get that I could save a little bit of money if I paid a little bit more for this property. Well, I don't want you to do that because I don't want you to waste your money. Let's say, lemme switch it. Let's say you only had $2,500 to invest in real estate.
You're not gonna be just able to suspend willy-nilly. Oh, let me do that. We can just overspend or we can just over. I want you to think of it like you are a business owner. As a business owner, we don't overpay for things. We don't waste our money on things. In fact, we fight for every penny. So, Andrew, that's where you're at.
If you have $250,000 or even more, if you have a hundred thousand dollars, it's easy. Just say, ah, let's just throw money at it. No, don't do that because I want you to build in great investing principles so that you're then going to capture equity. Give you a quick example before I get to that example. We were talking about risk tolerances and goals.
You already showed me your goals in last episode. So if you haven't listened to last episode, definitely go back and listen to last episode. I know Andrew has some risk tolerance that he can tolerate getting a loan. Um, he obviously, you just heard he sold his businesses, which is amazing, so we got that.
Now he won his goals, which is $10,000 a month. Now, one other quick question. Question Before I get to that story, Andrew, what excites you about real estate? Is it commercial real estate? Is it like a short term type of property? Is it long term or is it the cash flow that you're looking for and you're open to any deals?
I think the cash flow is what I'm mostly looking for, and I'm. Pretty much open to any deals. 'cause you know, my risk tolerance is pretty high. I'm willing to go outta state. I'm willing to kind of go anywhere at this point in time. So I am willing to kind of go whatever cash flows is what I'm willing to go after.
Um, I think the one area that I would be less bullish on, and this is just me, probably just my opinion to be honest, but I'd be less bullish on vacation rentals. I'd rather it be something that's recession proof long term. I a hundred percent wholeheartedly. A hundred percent agree. Okay, so a follow up question to that is, okay, so we want cashflow, which is absolutely right.
Follow up question, have you ever played monopoly? My favorite board game of all time by far. Exactly. Same here. Same here. Awesome. My kids, literally, uh, about an hour ago, we're playing it. Do we homeschool the kids? And so they were downstairs playing, uh, monopoly. Okay, so I love commercial real estate, but in Monopoly, how do you win?
Where do you start? You start with just the single family houses. Correct. You get the land, you put houses on there, and eventually you build up to where you get to commercial real estate. Now you're gonna hit other here. Other people tell you, oh yeah, you know, commercial real estate, like large apartment complexes is so easy.
If you could buy a single family home, you could buy a large apartment. I'm like, no. That is the dumbest advice, trust me. No, absolutely not. It's so easy to get a 30 year fixed. Mortgage, find a realtor or find somebody that wants to sell you a property and buy the house and make cash flow and have money coming in every single month.
When you buy in a large apartment complex or a large commercial facility, there's so many moving parts that earth's just, you don't even think of like, oh my goodness, how old are those stairs? And will I actually get a violation from the city if those stairs, like you wouldn't normally think about that sort of stuff or that boiler for.
So just like playing a monopoly. I suggest that you start with single family homes. It could be, and when I say single family, it's four units and below. When I say commercial or multifamily, it's five units and above because that's the way. Mortgages are looked at four units and below. You can still get a amazing 30 year fixed mortgage on.
That's why I love 30 year fixed. 'cause after 30 years it's paid off and it's lower interest rates, all that sort of stuff. But four units. So whenever I say single family home, realize this, Dustin is saying four units and below. So check. That's what we do. We start there. Now, one quick last thing, 'cause I want you to share.
I'm gonna add another question for you. Um, so I've talked to a lot of quote unquote. Multifamily investors, they're called syndicators. They basically just syndicate a deal. They're flipping multifamily. That's all they do. It's really, really sad. Somebody I was talking to, they had four. Thousand units for, remember, I have had 30 single family homes.
I do have 800 apartment complexes, but that's not my apartment complex is units. That's not what makes me financially independent. What does make me financially independent? My 30 single family homes. Now, when you look at the property that this person said they had 4,000 units, I asked them, how long ago were you financially independent?
Like, when did you become financially independent? And she says, oh, I'm not. I still gotta work a job. I'm like, wait. You've got 4,000 headaches that you have to deal with and you're not financially independent. What's going on? So here's what I say, this is my perspective. If you want cash flow, nothing better than single family homes.
If you want to have, uh, generational wealth, nothing better than single family homes, if you want to scale, then there's nothing better than single family homes. When you play Monopoly, you start with single family homes. Eventually you get to multifamily. It was only after I was financially independent for like, I don't know, 10 years before I finally said, okay, let me go ahead and get into the apartment complexes.
Now, don't get me wrong. Apartment complexes are great, that eventually you'll have to pay off, but you don't get cash flow. Does this all make sense? It a hundred percent makes sense. And I will tell you upfront that I, and I've said this in the podcast before, single family homes were by far my favorite place to invest.
Why? Because, A, the tenants usually were just better tenants overall, and B, they had less headaches, which obviously isn't gonna be my problem as we start to talk through this in a second. But see, they would stay longer. They would stay, you know, 5, 6, 7 years some of the times. And so, uh, I really loved single family homes for that purpose.
Yeah, so what I love is if you are investing not in your area, but you're investing outta state, the reason why I love investing outta state is because I'm a doer. If there's a property like in my city that's somebody's all the clogged toilet, I'm gonna go there myself and do it. But because it's outta state.
I don't have in, in my brain. Like it's not in my brain to ever go do I think. So I make sure that I afford, or how I say it, all the expenses are covered for any repairs, so that if there's ever a repair, I don't have to think, oh shoot, can I afford this? No, no, no. I've already covered those expenses ass every single time.
Um, I bought the property and then every single month I get cash flow coming in and I could also pay for repairs. Now, in thinking about single family homes, if you are looking okay, I wanna get. $10,000 a month in cash flow, then we're probably looking at close to 20 single family homes that are making $500 a month in passive income.
Now to get there, it's hard to go from one property to 20 if you don't start right. So definitely go back everybody. I want you to go back and listen to last week's episode where I talked to you about how to build the business, right? How to start with building a business. 'cause if you build the business first.
Then you can scale. Because if you are managing your properties on your own, Andrew, you know you're gonna be pulling your hair out. Eventually you're gonna be like, oh my goodness, I have so many calls. I have, I have six properties and there's six problems going on at one time. I have my businesses got, I got my kids.
You don't want that. You want somebody else's business to run that. So. What I'm suggesting is if you wanna get $10,000 a month, first, we build a business, which means we find a good city to invest in. Has a lot of inventory. Three bedroom, two bath, 1200 to 1700 square feet, and I explained more in the last episode, so definitely go check out last episode.
I. But what we do is we find that one property, and here's my suggestion, if you really want to hit the $500 or more a month, is we're gonna be looking for midterm properties, okay? Co-living is great, don't get me wrong. Co-living is great. You're gonna make a lot of money, but there's a lot more moving parts, a lot more leases.
That's where you rent out each room. But if you want the best of both worlds long term. As well as short term. Short term, you have higher rent or they rent up per day, so you make more money. But there's a lot of turnover, a lot of wear and tear on the property. When you do long term, it's so much easier.
It just does work for you. You have the people take care of the property, but you make less money. Here's a medium one, I think I would love to see you invest not in a really rundown C, like a D area, but like a c plus area, okay? And you're gonna take that $250,000. We're gonna start scaling by buying a first property with a down payment, where we're gonna be making a midterm or making that property into a midterm property.
Let me give you an example. So I have one property in Peoria, Arizona, just next to Phoenix, and I could rent it for $2,000 a month long term, but I just put furniture in it. And then I pay for the, um, utilities as well as internet. I'm renting it now for $3,600, so 2000 to 36, $1,600. Now my expenses are maybe four or $500 a month at most.
That's like the highest hottest part of the year when it's the highest, uh, electrical rate. So I'm at least making a thousand dollars more in my midterm rentals on the bad months, on the good months, I'm making like $1,300 more. So that's my suggestion is we look for cities that are like Nashville would be a little harder, like the big metropolitan areas.
Really priced high. What we want is outlying areas, tertiary markets that are like cities that are like 20 minutes away. People still live there, they're still, um, you know, businesses there, there's still nurses and all that sort of stuff. Midterm property is gonna be the fastest way to get where you want to go.
How do you feel about midterms in terms of like long-term and the longevity of those? Have they been around forever? How do you think about that? So the great thing about midterm, actually no, lemme say it this way. What I love is to teach my students, we do not buy a property unless we can rent it for long term.
Where we're still making cash flow, like that's our fallback. If everything falls apart, well we could long-term rent it and not lose money. So if you're gonna bare minimum $250 a month, like that's worst case scenario. I have long-term property, we could rent it for two $50 a month. But then again, you think in five years rent's gonna go up.
10 years, rents are gonna go up. So you're gonna be better off buying it now than waiting. So that's number one. I tell all my students, we buy a property and we don't buy it unless we get long-term rented, then we have an option to do midterm rentals. The reason why I love midterm rentals is you're not gonna have any regulations from the city or the county.
They're not gonna stop you from renting over 30 days. They will stop you for one to two days. 'cause hotels, they're losing money, so they're lobbying, you know, get all these regulations in and stuff like that. So if you do 30, 60, 90 days or, um, instead of a 12 month lease, I personally think, and I have not, let me, I'll say it this way to help you to understand my perspective.
Midterm has not been around for since 2008. In fact, it started coming around 2016. 17 people had been doing it, but now it's coming more mainstream where a lot of people are doing it, a lot of nurses. And so they're still out there. And so I have not seen a down cycle. Midterm. Now, when COVID happened, midterms were still fine, but short-terms, they were struggling because people weren't traveling.
So people still have to work someplace. So when they're short-term, they're traveling for a vacation, uh, or a wedding or something. So those can go by the wayside, but somebody who's going there for work. Traffic executives, nurses and stuff, they have to be there. And the government's not gonna shut them down for being able to live.
No, but I have to live there. So that's where I'm a little caveat is I have not seen a huge down cycle like 2008 with midterm, but I am a hundred percent in with midterm rentals as well as my long-term, short-term are great, don't get me wrong. But in the downturn, they're gonna be hurting really, really bad.
Perfect. And I think that's something for sure because of the cashflow differential. I think it's definitely worth it. And if you have that downside protection of being able to rent it out for long term, I think you're still gonna get the same cash flow as you would with any other long term. So I think that's great.
Absolutely, and if you're gonna be finding homes, like thinking about like your perspective where you're going with $10,000 a month in passive income, $250,000, starting with, as well as you're okay with a little bit of leverage, you know, getting loans on this property. As long as you are making money every single month from that property, that's gonna be putting cash in your pocket, then.
I can't think of any specific city right now, but if you think of any big metropolitan area, Nashville's one, Orlando's another. Um, let's see, other big ones, Indianapolis. Um, you think of like big cities go outside of those cities that are maybe, like I said, 10 minute drive, 20 minute drive outside, let's say 20 miles.
Outside of that. The reason why we like those markets is there's still a lot of people that live there. There's still a lot of people that travel there for, like I said, weddings or graduations or funerals or you name it. There's a reason why hotels are everywhere. So think of that. And so with midterm, you still have a good city that has a lot of people, nurses.
The one that I have was amazing in uh, Peoria. This company found me on Airbnb. I was renting it for 30, 60, 90 days and they booked it for 90 days, which was great. And then in the middle of it, they said, Hey Dustin, we want to rent it for 12 months at the same lease. We're, it's gonna be a long-term lease, but we're gonna pay the same rate.
I'm like, please, absolutely. So I got 3,600 bucks for 12 months. Yes, we could. I'll lock it down for you. And so what I find is. Like I said, so Phoenix is a pretty big area. Peoria is a smaller area, but it's still still pretty big. So what I'm suggesting for you is we want to get accumulate. If we get to 10.
Midterm rentals, more than likely. And one quick thing, you're gonna find property managers that will manage it. You don't have to do this all yourself. So trust me, we'll be able to take care of that where you're not doing all the work. But if you get to 10 rentals that are midterm, more than likely, you're easily gonna hit that 10 grand if you get 10.
Now, these have to be in good areas that are, you know, people are traveling to and all that sort of stuff. But honestly, if you take that $250,000, I don't think you're gonna be able to take that 250 to buy all 10. But over three, four years by, you know, markets going up, you could refinance, pull some cash out, save that cash flow to buy more properties.
That's one thing I try to tell everybody. This is not a get rich quick scheme, but this is a get wealthy plan. Just little by little we just keep buying and buying. So in the first year, I could see you at least getting two or three in the first year in the same city. You start accumulating it, you get a property manager.
So I could easily see you start doing that. Absolutely. And I think that's a perfect starting point. 'cause I think overall we're looking at this and we want to just because that's the way I am. I want to go, you know, I like base hits over and over and over again. I don't try to swing for the fences every single time.
And so I think if we can find them, you know, somewhere in, in a tertiary area that's right outside that big metropolitan area, and we can get this ball rolling. I think that's the great starting point now to find some of these deals when we wanna go through that process. Is there something you recommend.
Is outta state. This isn't something that's local. Like I know everybody in the local area here. Um, but if, because it's outta state, how do you kind of think about that when you find those deals? Uh, you know, you're talking about finding Exactly. So like, if I wanna go, say I wanna get started, like say I choose a location, let's just say, um, you know, we, we look for a location.
Let's just use the Phoenix area as an example, and it's right outside the Phoenix area. We wanna find some of these midterm rentals, how would you go about looking for those if it is a new area that you've never invested in before? Got it. So the number one thing is I do not look at properties. I do not have anybody send me deals until I know there's gonna be somebody that can manage a property, like for months and months and years and years and years.
So I've even flown to, and this is, I don't fly anywhere anymore. This is back when I first got started, I flew to a city. To try to start finding properties and find a property manager. I couldn't find a good property manager that I liked, like meaning this was Springfield, Illinois. There probably were are some great property managers, but I couldn't find any that I thought I would wanna work with.
So I didn't invest there. The reason why is I might have find a great property, but I don't want to manage a property. So what we do, let's say if it's Phoenix or the Phoenix area, 'cause it's a very, very big area. What I would start doing is. Looking for property managers that manage midterm and long-term.
And if they manage midterm, they're definitely gonna manage short term. Um, but if they're management for long-term, they might not do midterm or short term. They're just long-term managers. So if you find somebody who does short term, they will do long-term so, or long-term and midterm so. Here's what I would do, Phoenix.
I'm gonna get a list of 10 of the best property managers that I find on Google or Yelp or whatever. I try to find the 10 best property managers. Then I would interview them and I would interview them many times, just like if you're Actually, I said this on the last episode. Again, go back and listen to it.
But I share this analogy of starting a convenience store where you build up a business, you would not build up an entire business convenience store lots of money, thousands and thousands and hundreds of thousand dollars into the business, and then see somebody walking across the street and say, Hey, you got a pulse?
Come in here and manage my property, manage my company, manage my inventory, business and money. No, you wouldn't do that. You would interview very, very, a lot, a lot of people and a lot, lot of times. And so what I would suggest. You find a good city like Phoenix, the next step. Literally don't do anything else.
Don't look for realtors. In fact, I get students say, I've coached thousands of students now. A lot of 'em say, Hey Dustin, I found a great city to invest in. I've already got six realtors setting me deals. I'm like, oh my, no, no, stop. If you bought one of those properties, who would manage that deal? And I said, uh, nobody.
I'm like, okay, you're putting the cart before the horse. And in the last episode, I shared the financing. Getting money to buy the property is very easy. In fact, if you're worried about money, trust me, or credit, trust me, those are not hard. I will, I'll blow your mind of how many ways that you can get financing, so don't worry about that.
And then finding, finding is very, very simple to find the properties. What we need though is somebody that can manage these long-term, then making money for us. I don't wanna talk to my property managers. In fact, I just wanna check. I want them to run the business and send me a check every single month.
If I have to talk to a property manager like once or twice a month, I'm like, what am I hiring you for? I might need to find somebody else 'cause I don't wanna talk to you. I just want you to send me money. Does that all make sense? It does. And I think that's the big key component. So when you start to have those conversations with them, is that something where you're saying, Hey, I'm gonna invest in this area, and you want to start to interview them based on that?
Or how do you get them to talk to you without them thinking you're wasting their time? Fantastic question. And here's another thing that I try to, to help my students to realize. So when my students start calling property managers. They will sound like new investors. This is what they'll sound like. Uh, hi, property manager.
Um, I'm, I'm gonna start investing in real estate and I, I'm building my team. And you've used this word too. I'm not, uh, you know, looking down on it, but that's a buzzword for property managers. 'cause everybody's talked about teams and when a property manager or even a realtor, that's the first. Thing that they hear like, oh, here's a newbie.
Oh, I don't wanna work with, that's literally what's gonna happen. Now, if you're the property manager, Andrew, this is what I would do if I were an investor talking to you as a property manager. This is literally I get on the call if I'm gonna find a hi property manager. My name's Dustin Heiner. I invest in real estate.
I'm looking to find a good property manager. Tell me about your services that you have. Do I give any clarifying about me or any No, no, no. It immediately puts them on, oh, I have to share like about me. And I, I ha like, that gets 'em excited. Oh, this might be a good prospect. They're, they're not thinking, oh my goodness, I gotta help this newbie invested.
Right? So that's the way to do it. And then you just start talking to them, drawing information out of them, as opposed to, 'cause usually what we try to think is, I have to prove myself to this person that I'm good. No, no, no. Don't do that. You just literally go straightforward and be straightforward and to the point.
Awesome. That's super helpful. So let's say we find that that manager, that manager's in place, what else would you do next? Next up is absolutely finding the financing. Now I'm not saying go to Bank of America or you know, big, big bank and that's where you get a financing. In fact, I've used over 20 different ways to get creative financing.
When I talk about creative financing, it means I didn't have to work my life away. Save up for 20 years to then borrow money that, you know, use my savings for a down payment and then borrow money. Um, I didn't have to do that. What I did was I recycled my money over and over again with getting other people's money.
OPMI love that term, using other people's money. You give them a great return on their money, they're happy, and then you get your property and you're happy. It could be private money lenders, hard money lenders. Obviously we have, uh, regular conventional loans. Uh, commercial loans. A-D-S-C-R loan is amazing.
A debt service coverage ratio loan. It's a commercial loan set in conventional terms, meaning a 30 year fixed, which is amazing, but it, the property is what guarantees. The mortgage, not you working a job. If you go and buy a single family home that to live in at primary residence, the mortgage broker is gonna say, do you make enough money?
And I have a proven track record to pay me back and then I'll borrow the money. No DSCR loan doesn't worry about that. It looks at the property. Is the property good enough? Are you buying it for a low amount? Are you gonna be able to rent it for us to make money? And that property gonna cover it then.
Great. We'll give you a loan. So, and, and home economic credit. Self-directed IRA, you name, I hesitate to share this 'cause it's an advanced strategy. I do these two things. Number one, I've used a signature loan. That's where you walk into a bank and get an unsecured line of credit to buy real estate. I've done that.
I've even used, this is the second one, a credit card. I used a credit card cash advance to get cash to buy the real estate, but here's the reason why I could do it. It's access to capital and there's a cost for that capital, and I accounted for that cost before I bought the property. I knew if I borrowed this money, my business, remember we're building a business, go back and listen to the first episode.
We talk all about that, but my business is accounting for that expense. Just like analogy I gave. If you could buy a candy bar for 50 cents. Sell it for a dollar, you'd be thinking, how do I get more 50 cents to buy more candy bars and sell it for a dollar? Well, if it costs you 25 cents to borrow 50 cents, it doesn't matter.
It costs 25 cents. You're still out of pocket 75 cents. Somebody else is paying you a dollar. You're pocketing 25 cents. So hopefully I'm breaking the idea in your head that you need money to invest in real estate. There's so many different ways to get the money to invest in real estate. Absolutely. I think that's one of the most powerful things is how creative you can get with your financing and just, there's so many cool ways that you can do that.
So we have the financing in place and say for example, you know, we have our property manager, then we get the financing, then what would you kind of consider to do next? What are the next big, you know, final steps so we can start to actually buy and find deals? Yeah, so once you have the property manager.
They're gonna be the ones verifying that you're buying the right property. So that's why we go property manager number one. So I've had lots of people come to me, say, Dustin, I did everything those TikTok gurus told me to do, and I tried to find a property manager and every property manager I called, they told me they would not manage it.
Could they get shot there? They said, oh, you don't have any, you don't have asset anymore. You have a liability. What we do instead, instead of. After you've bought the property, spending thousands of dollars to buy it, thousand dollars to fix it up, and then finding a property manager instead of that, what you do is you find the property manager first and say, instead of, I already bought this property.
No, you don't say that. You say, I'm looking to buy this property. Tell me how much will it rent for? Will you manage it? What's the clientele like? What's the vacancy factor? And all that sort of stuff, and what we're talking about. The 30, 60, 90 days, the, um, uh, midterm rentals. You ask them about that, would this be a good 30 day rental?
Oh yeah. There's a hospital that's like, you know, three miles away that would probably, and there's a bunch of commercial buildings that are right here that they, they need a lot of employees, so their employees fly. They're gonna know that sort of stuff. So what we do is we find the right property manager and then we ask them, is this a good property for us to buy?
And here's one thing I give this in, in the private coaching, but I'll give it to you and all the students. So number one question you need to ask every single property manager, even the ones you're not gonna work with. You just need to know, get a idea. You wanna ask this question. If you were to invest your money.
Right now in the city that you manage, where would it be? Because they're gonna give you gold. They're gonna tell you exactly where that you should invest, and then you just piece it all together. So once you find the good city, make sure you find the right property manager. Then you find your mortgage broker, you find financing.
And we could cover all that, um, in a later thing. But make sure you can buy the property, which is very simple. We can take care of that. But then when you're looking at properties, you wanna make sure that the property manager. Signs off on every single property before you even put in contract in, because they're gonna make sure you buy the right property.
Does that make sense? It does, and I think that is probably one of the most valuable questions that you can ask is especially in an area that you're, you know, you're newer to, uh, is making sure that you, you have somebody in your corner who can help you through that process. And really, it, it's not someone like a realtor, it's someone who actually knows the rents and who knows and understands how, you know, rental properties work.
And I think this is really, really important. A lot of people make the mistake of like trusting in their realtors or. Some of them are knowledgeable, but most of them, uh, are not thinking about it in the same way that you are. And I think that's really, really important, uh, overall for most people to understand.
So this has been super, super helpful, Dustin, and I think as we start to go through this, is there anything else that you think I should be doing as we kind of progress through this? Yeah. As you, as you go through it. So what you realize is, and you said this at the very beginning of the first episode, is how do we scale?
That's the number one thing that we need to realize as business owners. You know, if you're a mom and pop. You're not gonna scale just, it's just the way it's gonna be because you don't have time. You literally don't have enough time in the day for school, if you're gonna school for work, uh, for your kids, whatever it might be, and then to manage the properties and take care of all that.
So what I want you to be thinking about is how do I then scale the business? How do I make sure that I have deals or properties coming to me? And I talked about this in one of the last episode. We tell every single person that we're an investor, so deals come to us. Then how do we get. Unlimited financing.
I love teaching my students. I have 20 different ways to get financing, but unlimited financing for your real estate. We start putting in place all these different aspects of do we have this contact for mortgages? How about private money or hard money lenders? Do I have a home that I can get HELOC on now?
Do I need to get a, a self-directed IRA set up so I can keep everything in my IRA? There's so many different things, so we start working down that path and then what we do is. After we have everything you're gonna realize, when you get your property under contract, your property managers are already signed off.
You know how much you're gonna rent per month. You know, you already know everything because they're gonna tell you all that good stuff. But then you need to have inspections, making sure that the home's inspected. Then you need to make sure how much it's gonna cost to fix up. There's so many, you know, we can go down that rabbit trail of before you buy the property, but once you buy the property, you close on the property.
Send your money in, they give you the deed and you take over the property. That's when you get all of your team to work. You don't go there and fix it up. You get everybody else, like your property manager, if they're the contractor too, get them to fix it up. If you hired a separate contractor, you get them to start working on it, but then right away you get your property manager realizing we're gonna list this very, very soon.
In fact, we should probably. Be fixed up in two months. At most two months, maybe two weeks. Like it just depends on the property. It depends on how long, how long it takes to get the furnishing and all that sort of stuff. Get ready to take pictures. 'cause I don't want you to be waiting because if you act, oh, I, I can't get there for another week.
Like I told you two months ago, we're gonna be ready at this date. You be ready. And then you list it on, let's say if it's midterm, I love furnished finder.com. Get an account set up there. That's where lots of. Traveling executives, traveling nurses, they look for properties there. Um, as well as you put it on Airbnb as a 30, 60, 90 days, like the minimum is 30 days, then you're gonna find good properties.
Uh, or for, for, sorry. Good. People, tenants to come and, and rent your property. But that's really it. Then we start letting the team, or our business work for us, getting the people inside those properties as well as if you find a good property manager, you're not even gonna have to put it on Airbnb or A-V-R-B-O or furnished, finer.
They're gonna be the ones finding the tenants for the midterm. In fact, I have one property that I was gonna go with the property manager and it didn't because I already got it rented. It was great, so I didn't have to worry about it. But anyways, long story short, um, he was gonna find all the tenants for me.
He was gonna take care of everything, like all the turnover, like I, it's just set it and let that business run and you just verify everything's working. That's the, I think the huge key is overall, that's what I'm looking for too, is I think overall I want it to be a set it and forget it type thing where obviously they're just checking in with me when I need them to and, and making sure that we are, uh, have on the same page on all this stuff.
But setting up those parameters and putting those systems in place so that your business can run itself. I think that is one of the most powerful lessons that you are teaching. To all of us as we start to invest in real estate is taking yourself outta the equation and making sure that you can automate the process so that you don't have to spend your valuable, valuable time learning how to, you know, just do all these other various things that a property manager could do for you.
So I think that's super, super powerful. Then all you gotta do is manage the property manager, uh, as time goes on. So that's one of the best things overall. Well, Dustin, this has been so incredibly helpful. Thank you so much again for being in this part too. And for people who have not heard about you or the stuff that you do, where can they find out more about you?
So last time I gave away my free course. Do you mind if I share that one more time? Sure, go ahead. Awesome. So I just wanna help 1 million people. My goal in life is helping a million people to invest in real estate. Get my real estate investing course completely for free. Show you how to find an area of the country to invest, how to build the business, how to scale it, to quit your job.
If you text the word rental, R-E-N-T-A-L. Rental to 3 3, 7, 7 7. Rental. 3, 3 7, 7 7 or go to master passive income.com/free course. All one word, but I'll give it to you completely for free. I even have my podcast with Andrews coming on and sharing about his real estate investing. It's basically a solo show, it's called Master Passive Income, and I've been doing since 2016, just giving out all this coaching.
I just, it's like this is so much fun for me to be able to give all, so go check out Master Passive Income. I've had students literally. Binge the entire 400 episodes I have. We have 400 plus now, but it's just mostly a solo show. But they listen to all of it and they realize, oh my goodness, I can invest.
Yes, this is what I have before, but YouTube find me. I got a bunch of coaching on there, but one of the quick one was, uh, Instagram's getting a lot of fun getting 240,000 followers now just. Didn't buy any of those. No bots whatsoever, just literally hard workeded. Uh, but yeah, the Dustin Heiner, THE, Dustin Heiner love to connect with you to say, Hey, I was listening to you on Andrew's, uh, personal finance, uh, show, and I'd love to connect with you, but that's my goal is just to help as many people as I can to invest in real estate.
But thank you so much for having me on, and thank you so much for being here again. This was so incredibly valuable. We appreciate you so much.
