691: 10 Year Path – 1 House A Year: Your Simple 10-Year Path to Financial Flexibility

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0:01:06 And now, on to the show.
0:01:11 Your simple 10-year path to financial flexibility.
0:01:12 I don’t want to oversell it.
0:01:17 Maybe not completely financial freedom, but a roadmap to build time-leveraged cash flow and
0:01:18 long-term wealth.
0:01:19 So here’s the game plan.
0:01:22 Buy one profitable investment property per year.
0:01:24 Do that for 10 years.
0:01:28 Maybe easier said than done, which is why today we’re going to learn how to get it done with
0:01:30 a longtime friend and friend of the show.
0:01:35 He retired early from the cash flow from his rental properties and now helps other people
0:01:36 do the same.
0:01:37 At MasterPassiveIncome.com.
0:01:40 Dustin Heiner, welcome back to the Side Hustle Show.
0:01:41 What’s up, Nick?
0:01:41 Hey, man.
0:01:43 Thank you so much for having me on again.
0:01:44 I absolutely love your show.
0:01:46 And I’ve done side hustles my entire life.
0:01:47 Thank you so much for having me on.
0:01:48 You bet.
0:01:51 You are a practitioner as well as a preacher.
0:01:51 So we’ll get into that.
0:01:53 But paint the picture for us here.
0:01:54 This 10-year plan.
0:01:59 If you’re done, do this right, you’ve got a million-dollar portfolio at the end of those
0:02:03 10 years and hopefully have some positive cash flow from that too.
0:02:04 But lay the groundwork for us here.
0:02:08 So I started investing back in 2006, bought my first property.
0:02:10 It made me money in cash flow every single month.
0:02:10 I said, great.
0:02:11 I got to get 10 of those.
0:02:17 So if I make it $300 a month with one property, then that’s $3,000 a month with 10 properties.
0:02:18 That’s great.
0:02:21 Just like if you find a good side hustle, you just replicate that same thing over and over
0:02:21 again.
0:02:24 So fast forward now to where we’re at now.
0:02:27 I have over 30 properties that are making me money.
0:02:29 I still own the ones that I bought back in 2006.
0:02:33 First property is always the hardest because you got to prove it to yourself that it works.
0:02:34 You got to get the money.
0:02:36 You have to build the business, all that sort of stuff.
0:02:39 Coach, I don’t know, maybe over a thousand students now, how to invest in real estate.
0:02:45 And like clockwork, they get their first property and we can go into the entire business building
0:02:48 process to where it can scale, where you can get to 10 properties in 10 years.
0:02:52 And I think, honestly, even faster because you do all the work on the front end, just like
0:02:56 building a side hustle, the second property comes so much faster because all that work
0:02:58 is paying off in the future.
0:03:03 So my daughter, she’s 16 years old, just bought her first property three months ago.
0:03:05 It’s making $300 a month.
0:03:06 And this is the plan that I have for her.
0:03:08 Buy one property.
0:03:11 Get that passive income coming in every single month, $300.
0:03:12 Do not spend it.
0:03:15 Like, do not go out and buy this or buy that or, you know, whatever.
0:03:18 That’s maybe the discipline part of this.
0:03:22 Like, oh, I’ve got some of this cash flow and I’m going to parlay that into the next thing.
0:03:22 Absolutely.
0:03:28 And so every year we focus on buying at least one more property.
0:03:34 And then over 10 years, if you do that 10 years, you have 10 properties and hopefully each one
0:03:37 are making you $300, $400, $500 a month or more in passive income.
0:03:38 Yeah.
0:03:43 Let’s look at it through the lens of your daughter and maybe her 10-year plan here.
0:03:49 So first of all, we see all these charts where, you know, housing affordability is at an all-time
0:03:53 low or, you know, it’s unaffordable, interest rates are high.
0:03:56 Like, where are you finding cash flow?
0:04:00 I mean, in our neighborhood, it would cost you half as much to rent as it would to buy with 20%
0:04:01 down right now.
0:04:02 And so it just doesn’t pencil.
0:04:04 So where should we even begin shopping?
0:04:09 If you were to get outside of like the West and East Coast, because the coastlines definitely
0:04:10 the prices are much, much higher.
0:04:14 Where my daughter found her first property was in Ohio.
0:04:15 In Ohio.
0:04:19 So Mazin, Ohio is the city that she bought her first property in.
0:04:22 And completely honest, I have my own properties there too.
0:04:25 So I obviously coach lots of people and coach my daughter through this entire process.
0:04:31 So she went through my entire course, just like all the other students learned everything.
0:04:33 And so we went through the process together.
0:04:36 It was Mazin, Ohio, which is really close to Canton, Ohio, Akron.
0:04:40 And it’s kind of right between there and bought it for $125,000.
0:04:42 Now she didn’t have $125,000.
0:04:45 She didn’t have that cash that she could just buy it for cash.
0:04:48 But what she did was she had savings that she saved up.
0:04:52 I want to say it was like she had $2,000 that she saved of her own money.
0:04:55 And then we had been putting aside money for college.
0:04:56 And so I think it was like 10 grand.
0:05:05 So we got $12,000 total and got a DSCR loan, a debt service coverage ratio loan.
0:05:10 When you buy a house to get a mortgage, you normally make sure that the bank says,
0:05:12 hey, do you have a job that you could pay off the mortgage?
0:05:12 Right.
0:05:13 Yeah, you’re 16.
0:05:16 You’re like, well, even if I do have a job, I’m working at McDonald’s or something.
0:05:16 Exactly.
0:05:19 So this type of loan is a commercial loan.
0:05:22 So it doesn’t depend on your income.
0:05:27 It depends on the property’s income, how much money will that property make in cash flow
0:05:28 from the rents.
0:05:32 And if it’ll cover the mortgage, cover taxes, insurance, all the normal things, and then make
0:05:34 passive income on top of that, they’ll lend you the money.
0:05:37 And obviously, being 16 years old is going to be harder for her.
0:05:39 So I co-sign because I’m dad.
0:05:40 I’m going to do that.
0:05:43 Plus, I’ll just take over the property if she stops paying for it.
0:05:47 But in the end, you don’t have to have a lot of money.
0:05:48 Now, you might be thinking, I don’t have $12,000.
0:05:50 Completely understand.
0:05:52 10% of $125,000.
0:05:53 That’s, you know, $12,500.
0:05:56 I even have, yeah, mortgage brokers, 5% down.
0:06:03 I even know of, you can get a FHA loan, 3.5% down to buy a property.
0:06:04 Now, you got to live in there a year.
0:06:05 But that’s a great way to do it.
0:06:08 We live in Tennessee right now and bought in Ohio.
0:06:12 And we hire experts to do all the work for us.
0:06:14 And here’s one quick caveat.
0:06:18 We don’t just hire them after we’re all done buying the house.
0:06:20 In fact, I have lots of students.
0:06:22 What they do is say, hey, Dustin, I bought a house.
0:06:25 I did all the things those TikTok gurus told me to do.
0:06:28 Found a property, spent thousands of dollars to buy it, thousands of dollars to fix it up.
0:06:31 Then found a tenant and then tried to find a property manager.
0:06:37 Well, then I called property managers and they all told me they wouldn’t manage it because they get shot there.
0:06:39 I’m like, oh, yeah, but you don’t have an asset anymore.
0:06:39 You have a liability.
0:06:45 Instead of doing that, instead of saying, you know, property manager, I just bought this.
0:06:45 Will you manage it?
0:06:48 You called your property manager and you found them before.
0:06:52 We build an entire business that then is a system that we put in place.
0:06:54 And we talk to the property manager beforehand.
0:06:55 Say, hey, property manager.
0:06:57 You don’t say, I bought this property already.
0:07:00 You say, I’m looking to buy this property.
0:07:04 If they say they won’t manage it, then you don’t waste your time, energy, and money to buy the property.
0:07:08 What you do is you ask them, you know, how much will it rent for?
0:07:12 What’s a vacancy factor, which means how often will it be vacant type of clientele?
0:07:13 Will you manage it?
0:07:13 All those good questions.
0:07:16 They say, yes, they’ll tell you how much it rents for, too.
0:07:18 So you calculate all your expenses.
0:07:22 You make sure your income is also tacked on as expense.
0:07:24 $300 is what I suggest minimum.
0:07:28 And then as long as it rents for that total expense and you still make passive income,
0:07:33 then that’s a worthwhile property that you put into your business that makes money for you.
0:07:34 Does that all make sense?
0:07:38 So what’s the rent in this example on the $125,000 Ohio house?
0:07:39 $1,350.
0:07:40 Okay.
0:07:43 There are still, they talk about the magic, you know, 1% rule where it’s like,
0:07:47 if I have a $100,000 house, I wanted to rent for $1,000 a month.
0:07:48 That’s the 1% rule.
0:07:49 And it’s like kind of a unicorn.
0:07:51 In some markets, it’s really hard to find.
0:07:55 But you say, okay, these opportunities are still out there if you know where to look.
0:07:57 The Midwest has been really, really good.
0:07:58 I have some students investing in Indiana.
0:08:00 I own property in Indiana.
0:08:01 Tennessee’s not bad.
0:08:04 Memphis is a little more aggressive of a place because
0:08:05 a little more crime there.
0:08:07 But at the same time, a lot of investors are going there.
0:08:09 Alabama’s been really good.
0:08:09 Okay.
0:08:14 As I was building out my business, I invested in Ohio, Texas, Arizona, Tennessee, and Indiana.
0:08:18 All these different states, you don’t have to invest in your backyard.
0:08:22 You live in Seattle or you live in, you know, San Francisco or really expensive places.
0:08:23 Yeah.
0:08:28 You do not have to invest in that city as long as you do it right, which means I suggest building
0:08:33 a business, finding the experts before you buy the property and them tell you if it’s a
0:08:36 bad property, if it’s a good property, how much it would rent for, how much it would cost
0:08:37 to fix up, all of that.
0:08:41 Then you buy a good property in the right areas.
0:08:46 It sounds like there’s a two-tiered approach for people just starting out.
0:08:51 Number one is the database of, you know, Redfin houses for sale, like across the whole Midwest.
0:08:54 Like that’s a huge spectrum to try and search and narrow it down.
0:08:58 And then the second angle is this, well, I’m going to find property managers who are already
0:09:00 on the ground, who already know the market.
0:09:01 They know the rents.
0:09:07 They know the neighborhoods and trying to pair those two together and find and find this
0:09:08 unicorn and find that match.
0:09:14 But it still seems really, really daunting without some more, some more constraint.
0:09:19 Is there any filters or resources that you like to even narrow down that search a little
0:09:19 bit?
0:09:20 Absolutely.
0:09:21 Absolutely.
0:09:23 And so here’s how I would explain it.
0:09:27 I tell everybody that can hear me, stop being an investor.
0:09:31 Because when you think like an investor, meaning quote unquote investor, you think of a
0:09:34 appreciation, you think of all these different things that are not what you should be doing.
0:09:37 What you need to be is an income builder.
0:09:42 You need to build income every single month instead of trying to get for, you know, hey,
0:09:44 I’m going to get equity in 10 years or 20 years.
0:09:45 It’s going to be worth, you know, double.
0:09:47 You never know if it will.
0:09:47 It might crash.
0:09:51 But if you invest for income every single month, then it’s going to go well.
0:09:52 So here’s what you do.
0:09:56 You in any city or let’s say you just pick a state.
0:09:57 Let’s say, you know, I said Ohio.
0:10:00 You’re going to look at Ohio and Redfin or Trulia or Zillow.
0:10:02 You’re going to see a bunch of red dots everywhere.
0:10:04 All the for sale properties.
0:10:09 Build your business in a city that has a good amount of inventory that you can buy.
0:10:15 Now, when I say inventory, that means every single property that you buy, don’t look at
0:10:15 it as a home.
0:10:18 Look at it not even as a house.
0:10:23 Look at it as a piece of inventory that you put into your business so that you hire the
0:10:25 experts to do all the work for you.
0:10:30 So if I’m looking at Ohio and you can even just pick Alabama, you can pick Tennessee,
0:10:34 you can pick Indiana, you can pick all these different cities or sorry, states, and then
0:10:35 you’ll see all those red dots.
0:10:37 You know, I’ll give you the criteria that I give all my coaching students.
0:10:42 We want the type of property that everybody either wants to rent or buy.
0:10:45 Because if you ever want to sell it, you want to have a property that sells pretty quickly.
0:10:47 Here’s the criteria that we look for.
0:10:53 A three bedroom, two bath, 1,200 to maybe 1,600 square feet.
0:10:55 You don’t want it too small that families don’t want to live in there.
0:10:59 You don’t want to be too big where extra walls to paint and toilets to fix and all that sort
0:10:59 of stuff.
0:11:06 So you want a cookie cutter type home that other people are going to be looking for to
0:11:06 rent or buy.
0:11:10 And so when you’re doing your filter, Zillow, Redfin, Trulia, put those in.
0:11:13 Three bedroom, two bath, 1,200, 1,700 square feet.
0:11:14 You’re going to do great there.
0:11:17 Then once you start looking, you’ll see the red dots.
0:11:21 And then we’ll look for cities that have good inventory.
0:11:23 You don’t want a city that has like three homes.
0:11:27 You build a business, you find all the right people, but you only have three homes to buy.
0:11:28 Then you’re done.
0:11:29 Then you can’t scale.
0:11:33 Indianapolis has really Memphis has a lot of, um, uh, Birmingham has a, you can even just
0:11:34 start those cities, but here’s what you do.
0:11:40 Here’s, here’s the secret sauce that I at master passive income coach on my podcast that I constantly
0:11:42 teach is we build a business first.
0:11:46 Cause if you start looking and calling realtors, this is a sad thing.
0:11:49 I get students, they’ll say, Hey Dustin, I found a great city, lots of inventory.
0:11:52 I have five realtors already sending me deals.
0:11:53 I say, whoa, whoa, whoa, whoa.
0:11:55 Well, do you have a property manager?
0:11:56 Uh, no.
0:11:57 Do you have a contractor?
0:11:58 No.
0:11:59 Do you have an inspector?
0:11:59 No.
0:12:02 You don’t have any of these things and you already have deals coming.
0:12:05 What happens if you bought a property and it’s the wrong area?
0:12:07 Cause there’s, it’s a big city.
0:12:08 Indianapolis is a big city.
0:12:10 There’s bad areas that you might not want to rent.
0:12:13 That doesn’t get good rents or has crime or whatever.
0:12:15 So what we do, here’s the key thing.
0:12:18 We find a city has good inventory, lots of properties to buy that we want.
0:12:19 That’d be great.
0:12:22 That could rent for more than our expenses, which would be great.
0:12:24 Then we stop looking for properties.
0:12:25 This is key.
0:12:27 You’re not going to hear very many people talk about this.
0:12:29 We stopped looking at properties.
0:12:32 The next thing we do is we find our property manager.
0:12:36 We find our property manager cause they’re the ones going to be managing it for the longevity
0:12:39 of the entire time you own it.
0:12:40 Yeah, this is, this is interesting.
0:12:46 I have, uh, I’ve got Redfin open, uh, outside of Canton, Ohio, and there are some properties
0:12:54 in the, you know, call it 85 to $130,000 range that actually look decent from the outside.
0:12:58 And under that, like you’ve got some, if you want to take on a big rehab project, there’s
0:13:04 some even less than like sub $50,000, which is really kind of unheard of from, from West
0:13:07 Coast real, real estate, uh, you know, uh, jaded Nick.
0:13:12 But at this point you say, okay, stop shopping, start looking for a property manager.
0:13:15 What’s what makes a good property management company in your, in your eyes?
0:13:18 Here’s what we do when we’re looking for a property manager.
0:13:22 You hire slow, which means you interview many different property managers.
0:13:25 You interview them many different times, ask them many different questions.
0:13:32 In fact, I have a list of 22 questions and answers that I give my students that this is
0:13:36 the question you should ask and here are the answers that you should be getting or somewhere
0:13:36 around there.
0:13:40 And you know, if you want to deviate from that, it’s your own risk tolerance.
0:13:45 If you’re okay with deviating from that, but at minimum, we interview six, six different
0:13:45 property managers.
0:13:49 Google search is probably one of the best ways to find chat GPT started to come out to where
0:13:51 they’re finding property managers for you, which is interesting.
0:13:52 AI is doing that work for you.
0:13:56 But once you get a list of six, you call each one of them three different times.
0:14:00 Let’s say on a Monday, you call the first call, second call you call on Wednesday and the
0:14:01 third call you call on Friday.
0:14:09 The reason why is I hate when property managers cannot call you back within 24 at most 48 hours,
0:14:14 because if you’re trying to hire a property manager and they don’t call you back and this
0:14:16 is before they have your money.
0:14:19 Imagine when they have your money, are they going to call this guy again?
0:14:20 I don’t want to talk to him though.
0:14:26 So you want a good reputable company because be completely honest, it’s very easy for somebody
0:14:30 to get a hat, put it on, meaning I’m a property manager and they’ll put that property manager
0:14:31 on.
0:14:34 It’s very simple to do that, but it’s very hard to be a good property manager.
0:14:39 So we interview them three different times on Monday, Wednesday, Friday, each time we interview
0:14:40 them or call them and just chat with them.
0:14:44 It’s when I say interview, it’s talking to them just as a normal human being, just see their
0:14:45 business.
0:14:48 Each one gets very short or shorter and shorter.
0:14:51 First one should maybe be about 20, 30 minutes because you’re asking good questions.
0:14:56 And then after you go through all six, then you take those and you rank them.
0:14:58 Hey, this was number one.
0:14:59 I really liked this company.
0:15:01 Number two, this is second best, third best and all the way so forth.
0:15:03 Wednesday, you call them again.
0:15:05 You maybe do 15 minutes, 10 or 15 minutes.
0:15:10 And then you re-rank after you ask those questions on the Friday, the last call, last five minutes,
0:15:14 you call the top three and you just verify that they’re going to call you back, that they
0:15:14 answer.
0:15:18 Anybody could have a good call at the beginning, you know, the first call, they’d sound good.
0:15:21 This is the longevity.
0:15:25 You want to make sure you have somebody that you can trust with your money, with your property
0:15:28 and never talk to them because they’re sending you money over and over again.
0:15:32 So that’s what we do is we hire slow and fire fast.
0:15:36 More with Dustin in just a moment, including other key members of his on the ground team,
0:15:43 his revised take on so-called turnkey rental agencies and six ways investors are making money
0:15:45 right after this.
0:15:53 Hey, you’ve reached Nick at Side Hustle Nation.
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0:18:06 Okay, so you find your winner based on who has impressed you in these interviews, and
0:18:07 then you start floating property.
0:18:10 I’m thinking of, I’m looking at this place, at this address.
0:18:11 What do you think?
0:18:12 What do you think of the neighborhood?
0:18:13 What do you think it would rent for?
0:18:14 That kind of stuff?
0:18:15 Absolutely.
0:18:16 So another key tip I’ll give you.
0:18:21 So property managers are paid to manage properties, not to go look at properties.
0:18:27 Honestly, like this is one-on-one coaching video because a lot of students have ran a property
0:18:28 manager ragged.
0:18:29 Hey, go check out this property.
0:18:29 Go check out this property.
0:18:30 Go check out this property.
0:18:31 They don’t get paid to do that.
0:18:33 Realtors get paid to look at properties.
0:18:37 So you don’t want to get fired by your property manager by having them run around everywhere.
0:18:39 Have them look online.
0:18:41 Just give them a list of five and say, hey, these are the five properties.
0:18:43 Tell me, just look online.
0:18:44 How much will I rent for?
0:18:44 Will you manage it?
0:18:45 And just the area.
0:18:48 And then you have your realtor go over there and take them out.
0:18:48 Okay.
0:18:52 So there’s another piece of the pie is where I want to find a local real estate agent who
0:18:52 knows the market.
0:18:53 Absolutely.
0:18:55 So, well, no, no.
0:18:56 Let me take that back.
0:19:00 No, I never use a quote unquote buyer’s realtor anymore.
0:19:06 I find the properties through Redfin, Trulia, Zillow, and I find the seller’s realtor.
0:19:06 Here’s a big tip.
0:19:08 This is what we investors do.
0:19:09 I find the seller’s realtor.
0:19:14 The seller’s realtor, because I already found the property, the seller’s realtor, I’m going
0:19:15 to have them represent me.
0:19:17 So they’re going to get both sides of the commission.
0:19:22 They’re really going to want me to buy the property as opposed to anybody else because they’re
0:19:25 getting full commission and I’ll get a little bit more insights and they’re going to go to
0:19:25 bat for me as well.
0:19:27 But that’s a conflict of interest, right?
0:19:32 The seller’s agent can’t have the buyer’s best interest in mind when their role is to get
0:19:33 the highest price.
0:19:36 Like there is kind of a natural issue with dual agency.
0:19:38 There’s nothing illegal about it.
0:19:38 No.
0:19:39 And there’s nothing unethical.
0:19:43 They have to tell both, hey, I’m representing the buyer now and I’m representing the seller.
0:19:47 So as long as you do that, then you’re completely on the up and up.
0:19:48 All right.
0:19:48 So finding a seller.
0:19:52 So just basically whoever is the listing agent on the property.
0:19:53 Correct.
0:19:54 So here’s a big thing too.
0:19:56 I don’t just try to find my properties.
0:19:58 I have other people send me deals.
0:20:00 Remember, I want it to be hands off.
0:20:03 And just like you, I love having my free time.
0:20:06 So I have so many people sending me deals.
0:20:10 Wholesalers, those are people that are like realtors, but they’re not necessarily, you know,
0:20:11 they send you, sell the deals to you.
0:20:13 Other investors send me deals.
0:20:14 Property managers send me deals.
0:20:21 A title company said, everybody knows that I’m an investor and I get deals sent to me because
0:20:22 I tell them I’m an investor.
0:20:26 You find the property manager first, but then we also let other people, like all of our fishing
0:20:27 poles, our lines in the water.
0:20:30 Everybody is trying to look for properties for us.
0:20:30 Okay.
0:20:31 That’s fair.
0:20:32 Okay.
0:20:34 So we’ve got the pieces of the, of the puzzle in place.
0:20:36 We found the property manager.
0:20:37 We found this property.
0:20:39 We’ve kind of gotten their green light.
0:20:40 Yeah, it seems legit.
0:20:42 Here’s what we think it’s going to rent for.
0:20:48 It matches our, you know, cashflow criteria based on our, what we project our debt service
0:20:48 is going to be.
0:20:51 And now we go out and look for, look for financing.
0:20:54 Like what, what do you think is the next step here?
0:20:55 Financing is the easiest.
0:20:56 Honestly, it’s very easy.
0:21:01 I’ve got, I want to say 18 different ways to get financing to buy properties.
0:21:04 But like, if somebody’s, if you’re on a call or if you’re sure you’re listening to this and
0:21:07 you’re, you’re thinking, man, Dustin, I don’t have very much money.
0:21:12 It’s like, honestly, you don’t need a lot of money, but the financing, you need to just
0:21:17 quote unquote, know that you can get financing in one or two ways.
0:21:22 So here’s what I would suggest when you’re starting, you’re building your entire business,
0:21:25 finding your property managers, finding the inspectors and all that sort of stuff.
0:21:30 You find a couple of good mortgage brokers in that state, that entire state.
0:21:32 Cause some mortgage brokers don’t go from state to state.
0:21:33 There are only might be in that state.
0:21:39 In fact, my students, I’ve got a list of like 20 different mortgage brokers that my students
0:21:43 have used, got great interest rates, great everything and fees.
0:21:48 And so we call up one or two mortgage brokers and just tell them our situation.
0:21:49 Here’s our credit.
0:21:50 Here’s where we’re at.
0:21:53 I want a DSCR loan, a debt service coverage ratio loan.
0:21:57 And they help you to understand how much money you can afford.
0:21:59 If you’re going to buy a property, does that all make sense?
0:22:03 So we’re building that first so that we understand the parameters that we’re going after.
0:22:08 I imagine they’re still going to want to know your own credit worthiness, your credit history,
0:22:10 your income, that kind of thing.
0:22:15 But they’re going to base the loan off of, hey, the projected rent is $1,200 a month.
0:22:19 The projected expenses for this is $800.
0:22:21 So we have this, you have this margin to play.
0:22:25 And so we can, we can lend against that and the equity in the home or the value of the property
0:22:28 versus purely based on your income and your ability to repay.
0:22:30 They don’t always run the credit.
0:22:32 I’ll give you an example.
0:22:38 So I bundled, and this is another creative and crazy way that you can get financing.
0:22:44 So I had six properties that were owned free and clear over in the Ohio area, and I bundled
0:22:46 them together in a DSCR loan.
0:22:50 The DSCR loan, they did not even look at my credit.
0:22:51 It wasn’t even a credit pool.
0:22:55 It was on the business because I have a business that owns the properties, which I teach all my
0:22:59 students how to make sure we have the right LLCs, the right trusts, all that sort of stuff set up.
0:23:04 And they did not pull my credit, and it’s not even on my credit.
0:23:07 So we have, I borrowed, I pulled out 500 grand, no, $550,000.
0:23:14 And so I put, you have invested in my apartment complexes, and I took that money out of the equity
0:23:17 out of the properties, and I put that in my new apartment complex that we buy.
0:23:20 And so I now have a tax-free loan.
0:23:21 I didn’t have to sell the property.
0:23:23 It still makes me money tax-free.
0:23:26 And I put it inside there, and my tenants, obviously, because the rents are going to
0:23:27 pay off the mortgage.
0:23:29 But here’s the great thing.
0:23:35 Their sales pitch for DSCR loans is, when you go and buy another primary residence, this
0:23:38 loan, a $550,000, is not going to come up on your credit.
0:23:42 It’s not even going to be a credit pool because we’re looking at the properties.
0:23:43 We’ll just take the properties.
0:23:44 Does that all make sense?
0:23:46 Yeah, I’m starting to see the light here.
0:23:52 You know, I’ve always been a little, and maybe just from the standpoint of, if you already
0:23:54 won the game, why take additional risk?
0:23:58 Like, from my perspective today, 20 years into my working career, right?
0:24:03 But if I’m early on in my career, I see this as an accelerated path.
0:24:06 And it’s a unique one because it’s like, I see three paths, right?
0:24:08 I see the traditional investment path.
0:24:13 Hey, just go buy the S&P index and be happy with your 8% and lather, rinse, repeat for 20
0:24:18 years, assuming a decent level of personal profitability, and you’re going to be good to go.
0:24:19 But it’s still 20 years, right?
0:24:21 Here’s an accelerated path.
0:24:23 And then path three is the entrepreneurial path.
0:24:24 Go invest in yourself.
0:24:24 Go build a business.
0:24:30 Go do something where maybe it’s higher risk, higher reward, but you can accelerate that maybe
0:24:31 even a little bit further.
0:24:34 But I did want to touch on the turnkey option.
0:24:42 So these are properties that have been theoretically pre-vetted, pre-rehabbed, pre-leased in a lot of
0:24:42 cases.
0:24:44 Hey, we’ve already got tenants in place here.
0:24:49 We just need an investor, usually an out-of-state investor to come in and we’ve got property
0:24:50 management in place.
0:24:51 Like what’s your take on these?
0:24:54 Are there any that you like or what’s going on here?
0:24:59 So if you remember our time that I was on your podcast, we talked about turnkey and there
0:25:03 were two major downfalls with turnkey, but we’re going to help you understand a bigger perspective
0:25:07 because before this last year, I bought two turnkey properties.
0:25:10 In fact, my daughter, the property she bought was a turnkey property.
0:25:12 So let me get into it.
0:25:15 So number one, you listening, don’t know what a turnkey company is.
0:25:20 They buy the house, then they fix it up and they make it really, really nice.
0:25:24 And they hopefully get a tenant in there, get it renting, and then they sell it to you.
0:25:27 Now, the downside is they capture that equity.
0:25:31 So the house that my daughter bought, they bought it for like 60 grand, man, put 30 grand into
0:25:31 it.
0:25:33 So it’s up, it’s $90,000 total.
0:25:34 She paid 125.
0:25:37 So, you know, she paid them basically what?
0:25:39 $35,000 on top of that.
0:25:39 Yeah.
0:25:41 They’re making a nice margin on it right away.
0:25:44 And then they also manage the property.
0:25:45 So they’re making money on the back end.
0:25:47 So that’s the whole picture of what turnkey is.
0:25:53 Now, a couple of downsides are, number one, are you going to be getting a good property management
0:25:54 company in the end?
0:25:55 Are you going to be getting good tenants?
0:25:59 Or are they just trying to sell these, pump these out and make money?
0:26:00 So that’s number one.
0:26:02 So vetting a turnkey company is very hard.
0:26:03 There’s been a lot of problems.
0:26:08 And if you go to other websites and you see, you know, forums and stuff, you’ll see people
0:26:10 saying, oh my goodness, like this turnkey company was horrible.
0:26:11 I lost as much money.
0:26:13 So that’s number one, vetting.
0:26:15 But number two, they capture that equity.
0:26:20 Like you said, you know, if they bought it for 60 grand and then fixed it up for 20, $30,000,
0:26:22 out $90,000.
0:26:25 And then it’s reselled for 130, they captured equity.
0:26:26 They forced the appreciation.
0:26:28 Those are the other two things.
0:26:32 Forced appreciation up, put money into it and make it worth double what you put into it.
0:26:35 So those are the two major, three major.
0:26:36 So you miss out on equity capture.
0:26:38 You miss out on forced appreciation.
0:26:41 And you also don’t know exactly what the good company.
0:26:45 But here’s the, well, before I get to like my ideas of why I’ve changed a little bit and
0:26:47 why I actually bought one, do you have any questions on those?
0:26:51 Any specific ones you think listeners should put on their shortlist?
0:26:53 Oh, of companies to use?
0:26:53 Yeah.
0:26:54 Got it.
0:26:55 I’ll give you those in just a minute.
0:27:00 Let me flesh out the reasoning why you should at least consider it, especially if you have
0:27:03 some, if you have a little bit extra money, especially if you’re in a DSCR loan, you know,
0:27:08 a 10%, if you have $12,000, you can buy one of these homes and it should hopefully be cash
0:27:10 flowing 250, 300, 350, something like that.
0:27:14 Good turnkey companies, what they do is they go through the entire house.
0:27:16 They gut the entire house.
0:27:18 They rip off the roof.
0:27:20 They put a new furnace in there.
0:27:25 Now, this is obviously if it’s needed, but these lower priced homes, they’re like 80 years
0:27:25 old.
0:27:28 And yes, they’re going to need even electrical.
0:27:30 So they rip everything out.
0:27:32 And Nick, I know you’ve looked into this.
0:27:40 So there’s an expense line item that you have to account for and also give you a quick resource.
0:27:47 If you go to IncomeBuilder.io, IncomeBuilder.io, you can get a free account and you can analyze
0:27:49 properties and it’ll do this for you.
0:27:52 But you need a capital expense reserve.
0:27:57 That means big ticket items, huge, large ticket items like a roof.
0:28:00 That’s going to be five, 10, 20 grand.
0:28:02 You never know how much it’s going to cost to get fixed.
0:28:03 A furnace.
0:28:06 A furnace is going to be five grand, probably three to five grand.
0:28:07 Yeah.
0:28:10 This is already all going to be repaired if you have a good company.
0:28:13 And Nick, I think, you know, we’ve known it long enough.
0:28:14 You should be buying properties.
0:28:16 I just, you should have your own properties.
0:28:17 You can give them to your kids, all that good stuff.
0:28:21 But you don’t have to worry about the capital reserve.
0:28:26 So for five years, my daughter’s property, we would normally budget, let’s say out of 1300
0:28:32 bucks, we’d probably budget 50 to $100 every single month, set it aside to take care of,
0:28:34 hey, if the roof goes bad or the furnace goes out.
0:28:38 Well, for at least five years, we’re not going to need to worry about that because this is
0:28:39 brand new stuff.
0:28:43 And then also on top of that, here’s an amazing thing.
0:28:48 You get better clientele because it’s top-notch for, you know, cabinets are ripped out.
0:28:49 It’s a brand new kitchen.
0:28:50 Everything’s fresh.
0:28:52 It feels like almost a brand new house.
0:28:57 So those are a bunch of amazing reasons why you should get a turnkey company.
0:29:01 Now I will say though, even though I’m giving you all these reasons why to do it, I bought
0:29:05 a home for $68,000, just like a turnkey company would.
0:29:11 I got my contractors 20 grand to get that place tip-top chafe.
0:29:14 I got it tipped out, what, close to $90,000.
0:29:15 It’s worth 130.
0:29:18 I’m renting it for $1,250 or $1,300.
0:29:21 So you can do it yourself as long as you’re in the game.
0:29:25 So the company that I’m going to give you, if you want to use the turnkey, and Nick, I
0:29:30 definitely think you should give them a call and at least talk to them, is Akron Turnkey.
0:29:36 Just easy enough, write in Akron Turnkey and tell them you came from me, Dustin, at Master
0:29:37 Passive Income.
0:29:40 And they’ll give you a couple thousand, I think maybe, I want to say it was even like
0:29:44 $1,500 or $2,000 off of it because they’re cutting out the middleman, just going right
0:29:45 to them.
0:29:48 But this is a good company that my students are buying from.
0:29:51 And I bought three homes from them.
0:29:57 Let me try and push back a little bit because I do see the light.
0:30:00 I’ve obviously have known lots of people who have gained financial independence through real
0:30:03 estate, through the FinCon community, through bigger pockets.
0:30:04 Like it’s definitely a thing.
0:30:12 But here, if I’m at $250 a month in positive cash flow, I’ve got $3,000 a year, call it.
0:30:16 And maybe I spent $10,000 down to get this property.
0:30:17 Maybe it was more, maybe it was less.
0:30:21 Okay, so it pencils out 30% cash on cash, like that’s really strong.
0:30:28 But at the same time, you just mentioned roofs, furnaces, like that $3,000, like doesn’t seem
0:30:32 like a lot of, a lot of breathing room for some of these capital expenses that are going
0:30:32 to come up.
0:30:35 Like these properties don’t magically maintain themselves over time.
0:30:39 There’s going to be other stuff that, that comes up here and there’s going to be vacancies.
0:30:40 There’s going to be problems.
0:30:42 So I’m glad you’re pushing back.
0:30:47 And it got me thinking, I did a workshop for my students recently where I walk them through
0:30:50 the, and you have to talk about this on your last episode, but I got it even more dialed
0:30:51 and I got the numbers.
0:30:52 I just pull them up.
0:30:56 So the six ways you make money investing in real estate and all those things that come
0:30:56 up.
0:30:57 Can I, can we, can we pause?
0:31:00 Like I’m impressed you remember anything from this episode five years ago.
0:31:01 This is like episode 387.
0:31:03 It was like 300 episodes ago.
0:31:06 I don’t know why I just remember talking about it.
0:31:11 I remember you having good questions as I was like, Oh, let me, so the six ways that you
0:31:16 make money when you invest in real estate and I’ll jump right into the first one.
0:31:17 The best one is cashflow.
0:31:19 Now you said, okay, you know, $250 a month.
0:31:20 Yeah.
0:31:21 I mean, that’s a lot of money putting.
0:31:26 So if you put 1250 down there to 12,500 down to buy this house.
0:31:31 Now I can see, since we’re talking about the 10 year plan, if I’ve got 10 of these and now
0:31:36 it’s 30 to $50,000 a month because of, you know, rent appreciation and everything like
0:31:39 all of a sudden, or sorry, 30 to $50,000 a year.
0:31:44 And I, and I have some level of diversification where I can, I can weather a vacancy.
0:31:47 I can weather some expense over there.
0:31:52 So if you have this long-term view of it and think of it as a portfolio business, then absolutely.
0:31:56 But it’s like, it’s a little bit harder to stomach when it’s just one or two properties.
0:31:57 I’m a hundred percent with you.
0:31:58 And that’s why you got to scale and grow.
0:32:03 So the six ways you make money investing in real estate, and this is, I’m going to give
0:32:04 you easy, simple numbers.
0:32:12 If you buy a house that’s worth $150,000 and you buy it right now, $150,000, and let’s say
0:32:16 it’s cash flowing you three, four, $500 a month, whatever it might be.
0:32:21 You buy it cheaper, like the house that I bought for $68,000, fix it up for $20,000, and then
0:32:23 now it’s worth $130,000.
0:32:26 Well, I’m making $550 a month in passive income.
0:32:31 So if you bought one property, the cash flow over 30 year time, a 30 year period.
0:32:33 Now, I know, remember we talked about 10 years.
0:32:37 We can just, you know, figure this out afterwards, but let me walk you through this.
0:32:37 Okay.
0:32:44 Over 30 years, that $150,000 property, and that you put $15,000 down, 10% down payment,
0:32:50 cash flow over 30 years, that’s if rent does not go up, which it does, but just over 30
0:32:51 years, that’s $180,000.
0:32:56 And we’re also accounting for the things you all talked about, like repairs, furnaces going
0:32:57 out.
0:32:59 That’s already accounted for in our expenses.
0:33:03 That’s not dipping into our income of $180,000.
0:33:04 So that’s number one, cash flow.
0:33:10 Next one, if you buy it yourself, and you don’t use a turnkey company, I captured, was
0:33:13 it $60,000 in equity when I bought the property?
0:33:16 Well, that’s $60,000, forced appreciation.
0:33:21 I put 20 grand into it, and that made it worth, I think, another $30,000 more.
0:33:23 And then, so that makes value go up.
0:33:24 Market appreciation.
0:33:29 And I kid you not, I had to double check this, because it sounds weird, but it’s true.
0:33:35 Every 15 years, your property doubles in value.
0:33:40 So in 15 years, it’s going to be $150,000 to $300,000.
0:33:42 And then after that, it doubles again.
0:33:45 It’ll be $600,000 after that, 15 years after that.
0:33:46 So 30 years, you’re going to have a lot more money.
0:33:48 The mortgage buy-down.
0:33:48 Here’s the great thing.
0:33:54 Your tenants are paying for the taxes, insurance, your mortgage, everything.
0:33:57 So even your principal and interest, they’re paying for that.
0:33:59 So the mortgage is going down.
0:34:02 They’re paying, and the interest is going down on top of that.
0:34:03 And then the tax advantages.
0:34:06 I pay almost no money in tax advantages.
0:34:12 And in the end, $15,000 of your money right now for just one property, without even accounting
0:34:18 for rent increases, you’re over $650,000 that you’re going to pocket in this one transaction.
0:34:23 And again, all those expenses are accounted for from repairs and all that sort of stuff.
0:34:24 That’s just one property.
0:34:26 And then we scale it, and we do it over and over again.
0:34:27 So push back.
0:34:28 Where am I missing here?
0:34:30 No, this is good.
0:34:37 You paint this good picture, but the road to real estate wealth is paved with burnt-out
0:34:42 landlords, people who have had their tenants changing the oil of their motorcycle on the
0:34:43 carpet in the living room.
0:34:50 A friend of mine, my former accountant, Josh from CPA on Fire, he posts these pictures of
0:34:54 these trashed houses, and he’s like, well, this is what I woke up to this morning.
0:34:59 Here’s a text, or the SWAT team is outside the apartment today.
0:35:02 And so it’s like, that kind of stuff happens.
0:35:08 And so what separates you and your students from everybody who is like, dude, I tried it.
0:35:13 And for whatever reason, the tenants that I attracted, the market, the neighborhood, the
0:35:19 hurricane that came through, like bad stuff happens where it’s like, if I could just, you
0:35:25 know, buy a portion of the 500 largest companies in America and just let those CEOs go do their
0:35:28 thing, then, you know, that’s, I sleep a little easier at night.
0:35:33 But there’s, there’s two sides to it, because it’s like higher risk, higher reward.
0:35:37 And I think you mentioned the leverage and the tax advantage and all this stuff that goes
0:35:37 into it.
0:35:38 But what breaks this plan?
0:35:40 What breaks landlords down here?
0:35:46 Dustin’s response, plus his take on whether or not we’re in a real estate bubble, coming
0:35:47 up right after this.
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0:38:06 Awesome.
0:38:08 No, that’s an amazing question.
0:38:14 And I’ll even say, even like your S&P idea, that’s great, but you have to have a lot of
0:38:16 capital in order to live on it.
0:38:22 What I’m saying is with 10 properties, you can live on that income and you get equity growth
0:38:23 on top of that.
0:38:28 But here’s what breaks landlords is they buy their first property and they start pulling
0:38:29 their hair out because they’re not doing it right.
0:38:32 They’re not hiring the right people or getting the right people to run the business.
0:38:35 They’re finding wrong tenants that are not going to take care of their property.
0:38:38 They might even buy in a place that nobody’s going to manage.
0:38:39 So that’s number one.
0:38:39 Okay.
0:38:44 We build the entire business, get the experts like Redfin’s not an expert, Trulia, Zillow.
0:38:45 Those are not experts.
0:38:47 Who are experts?
0:38:50 It’s the people that live there on the ground in that city.
0:38:54 They’re the experts going to be talking you through which areas are great.
0:38:56 And so far, this is all sight unseen.
0:39:00 Like your daughter’s house, like did you guys fly up there to do a final walkthrough or anything?
0:39:01 It’s all remote.
0:39:02 Not at all.
0:39:05 Out of the 30 plus properties that I own, honestly, even the two apartment complexes.
0:39:08 So the 30 plus properties, I’ve seen one of them before I bought it.
0:39:10 I haven’t seen the other ones.
0:39:12 I just, I see pictures and I have experts.
0:39:14 The other apartment complexes, I have experts.
0:39:17 Now I did walk through one of them because I live in the city.
0:39:17 So I walked through it.
0:39:19 So, hey, that’s a great property.
0:39:23 But for single family homes, especially now, in fact, I’ve coached thousands of students.
0:39:30 I want to say I know of maybe a dozen students that have flown to the city in order to look
0:39:32 at the properties because here’s what we do.
0:39:38 Just like you build any business, any side hustle, you get the experts doing the work for you.
0:39:39 And here’s the key thing.
0:39:45 Remember, if you’re a beginner, you don’t build a business if you don’t follow what I, most people
0:39:47 just buy a property and they try to hope it works out.
0:39:53 But what I teach all my students to do, we build the entire business first and then we have multiple people
0:39:56 check each other’s work.
0:39:58 We don’t just say, you know, oh, we got a contractor.
0:39:58 Okay, good.
0:39:59 And here’s your money.
0:40:01 And then they run off and they didn’t do any work.
0:40:07 No, we have multiple people analyze everything that’s going on touching that property.
0:40:08 Now, they send you pictures.
0:40:09 They give you explanations.
0:40:13 I double check what they say with other people, even my property manager.
0:40:15 I have, let’s say, a realtor.
0:40:17 Hey, realtor, can you go by and check this out?
0:40:20 I’ll pay him, you know, 50 bucks or whatever, or an inspector.
0:40:22 So we always have everybody check.
0:40:26 So the first one, if you’re starting, the roadblock or the problems will come and you’ll pull your
0:40:29 hair out and you’ll give up if you don’t build a business first.
0:40:30 Now, here’s the next step.
0:40:32 Here’s where the next roadblock comes.
0:40:37 It’s when somebody goes from a beginner and they get three or four properties and they have
0:40:40 not built the business like I’ve told them to.
0:40:44 And they have, let’s say, four or five, maybe even eight properties.
0:40:46 And they really don’t have time.
0:40:48 Maybe they might find the right properties.
0:40:50 Maybe they might be making some money.
0:40:51 They’re a mom and pop.
0:40:53 They’re running the business themselves.
0:40:54 They’re finding the tenants.
0:40:56 They’re collecting the rents.
0:40:57 They’re managing the repairs.
0:41:02 They’re doing all this on top of having a family, on top of having a job, maybe even a
0:41:03 great side hustle.
0:41:06 And so they’re running ragged because they don’t have the time.
0:41:08 Here’s the next, that’s the next roadblock.
0:41:09 But how do you get past that?
0:41:11 We have to learn how to scale.
0:41:15 And that is by, when you do it right the first time, by building the business, getting the
0:41:21 right people, then we implement the right systems, procedures, and processes in place
0:41:26 that are going to make sure that we can scale because we’re not taking our time to run the
0:41:26 business.
0:41:27 You know, this is good.
0:41:32 So it sounds like the, maybe the biggest mistake that people make is just not having
0:41:37 the right team members or the right experts in place, the boots on the ground to help you out
0:41:40 when things go wrong or to prevent things from going wrong in the first place.
0:41:41 A hundred percent.
0:41:42 To make sure that you don’t get bad tenants too.
0:41:45 There’s just a key piece of the process.
0:41:49 Well, I just said the word systems, procedures, and processes.
0:41:53 We have to have those, any business, your side hustle business, you have that as well.
0:41:54 Same thing with a real estate investor.
0:41:58 We need to stop being an investor, become an income builder, which means we’re making
0:42:01 money every single month and have that business run itself.
0:42:03 And so we find good tenants.
0:42:05 I hate it when my rent’s late.
0:42:06 I hate that.
0:42:08 So I don’t treat anybody differently.
0:42:10 I treat everybody the exact same.
0:42:12 This is a process that you put in place in your business.
0:42:17 Rents due on the first, late after the third, on the fourth, we put a three-day notice on their
0:42:18 door.
0:42:18 This is legal.
0:42:19 You have to do this.
0:42:23 And then after the third day, if they have not, after three-day notice, that’s like day
0:42:25 six, I think six or seven.
0:42:30 If they have not paid the rent, you add on with that three-day notice, you add on the
0:42:30 late fee.
0:42:32 But if they have not paid the rent, we start the eviction process.
0:42:36 Just as cookie cutter, as straightforward as possible.
0:42:39 Number one, that gets them to pay the rent.
0:42:41 Number two, it helps them to be on time and regular.
0:42:45 Number three, if they’re not going to pay the rent, you get them out as fast as possible.
0:42:48 And number four, you just stop paying your mortgage.
0:42:50 Will the bank say, hey, you call up your bank.
0:42:52 Hey, this is what I’ve got this before.
0:42:53 You call up your bank.
0:42:55 Hey, bank, my son got arrested for the second time.
0:42:57 I had to use the money for bailout for the mortgage.
0:43:00 Would you not start the foreclosure process?
0:43:01 Because I don’t have the money.
0:43:02 No, you wouldn’t.
0:43:04 The bank would say, no, we have to start it.
0:43:09 So what we do is we put in systems, procedures, and process, treat it and run it like a business
0:43:11 and just start the eviction process.
0:43:12 You’re still going to get some outliers.
0:43:13 We’re going to have problems.
0:43:16 But usually all my tenants, they just move out when it’s time to move out.
0:43:17 I don’t have to evict them.
0:43:21 I don’t have holes in the walls, dog poop everywhere, which has happened to a lot of people.
0:43:26 So we find the right people and then we treat them well, take care of the property,
0:43:29 but we let them know, hey, we’re taking everything seriously.
0:43:34 Get out your crystal ball and I want to ask if we’re in a housing bubble right now.
0:43:36 Ooh, okay.
0:43:39 So here is what I’m seeing.
0:43:45 The commercial real estate, which is apartment complexes, especially office complexes, that’s
0:43:48 definitely, that’s going to come to a head now because a bubble happened.
0:43:50 I’ll get to residential in just a second.
0:43:55 But the commercial, like a large apartment complexes, syndications, which is basically
0:43:59 somebody reselling somebody else’s deal, just trying to raise money.
0:44:00 And they don’t even invest their own money.
0:44:01 It’s not even their own deal.
0:44:03 They’re just trying to take part in the action.
0:44:07 Well, what happens with those apartment complexes, somebody bought it and then five years later,
0:44:08 they have to sell it.
0:44:11 They have to because of financing and then five years later, they have to sell it again.
0:44:12 Five years later, they have to sell it again.
0:44:15 And so they were, this is the bubble.
0:44:20 What happened is they were bidding up properties and now they’re stuck.
0:44:23 So they’re not giving money to their investors and they’re not, and they might be taking more
0:44:23 money.
0:44:24 I don’t know.
0:44:28 That’s why the deals that you and I have been in, in these apartment complexes, we’re getting
0:44:32 60% of the market value because these people are getting hurt and they have to sell.
0:44:37 So I think commercial real estate is definitely a bubble because of how it’s been bought up.
0:44:40 Here’s the next bubble when it comes to real estate and residential.
0:44:42 So this is my prediction.
0:44:44 My crystal ball.
0:44:45 Here’s where the bubble is.
0:44:48 Airbnb, short-term properties.
0:44:58 In Arizona alone, there is 70,000 short-term rental properties in Arizona, 70,000.
0:45:07 And keep in mind, these are homes that were long-term rentals or primary residences for somebody
0:45:07 to live in.
0:45:08 Those are now off the market.
0:45:11 That’s why rents skyrocketed because there were no properties.
0:45:17 Now, here’s the thing, with that many properties, the amount of money, and these people, they
0:45:19 were following these TikTok gurus on there.
0:45:20 Hey, I got three properties.
0:45:23 I make 80 grand a month and all these fancy things.
0:45:28 Well, what’s happening, because there’s everywhere, this is happening everywhere, Airbnb is having
0:45:34 trouble, is the prices are coming down on every property that’s for rent on Airbnb.
0:45:36 They can’t get what they hoped they would.
0:45:41 So they were, let’s say, you know, let’s say about a $500,000 home, and it’s normally
0:45:45 $500,000, they paid $550,000 because they knew, oh, I could rent it on Airbnb, I’ll make
0:45:45 all this much money.
0:45:49 So they way overpaid, the price went up on the property.
0:45:53 Well, as the price went up, they eventually have this huge mortgage that they’re going
0:45:59 to have to pay, and if they can’t rent it, meaning for, let’s say, people, the economy
0:45:59 goes down.
0:46:04 We see the economy slowing down, inflation, everything’s hurting people, so people travel
0:46:04 a lot less.
0:46:06 That, as well as supply.
0:46:11 There’s way oversupply of properties that makes the amount of money they can make per
0:46:14 month in rent from the short term, it’s going to be hurting them.
0:46:16 So they’re going to have to have this mortgage payment.
0:46:20 So I think eventually, in the next year or two, we’re going to see a lot of properties
0:46:25 foreclose because these Airbnb properties were way overpaid, and they’re not making money,
0:46:26 and it’s going to hurt the economy in the long run.
0:46:28 So that’s my prediction.
0:46:29 Commercial real estate, definitely bubble.
0:46:33 Yeah, particularly in like tourist areas, like high travel areas.
0:46:36 I guess, and I would say, well, I’ll give you an example.
0:46:40 I have an Airbnb in Murfreesboro, Tennessee, which is just south of Nashville.
0:46:42 I was going to ask if you had any short-term rentals.
0:46:46 Yeah, I have short-term and mid-term, but predominantly long-term.
0:46:51 I love boring, old, long-term, and I just make money without even thinking, without worrying
0:46:53 about my turnover and the properties.
0:46:53 Yeah.
0:46:55 So Nashville, a glut.
0:46:58 There’s so many in there, and it’s just, it’s terrible.
0:47:00 It’s hard to break into that market.
0:47:01 And so eventually something’s going to happen there.
0:47:04 But Murfreesboro is like 40 minutes south of it.
0:47:09 And so people still, like it’s a big city, 130,000 people here, people still have weddings.
0:47:11 There are still deaths.
0:47:12 There are still graduations.
0:47:14 There are still reasons to come into town.
0:47:18 And so, you know, if you’re getting a short-term property in like, you know, a town that has maybe
0:47:20 10,000 people, that’s going to be a little harder.
0:47:25 But these outlying cities that people overlooked, you can buy some good properties.
0:47:26 Okay.
0:47:26 Cool.
0:47:30 Well, I appreciate you sharing where the market might be headed and some of these bigger
0:47:34 macro forces, because of course, at a certain point, as we’ve seen in a lot of cities, the
0:47:38 municipalities come in and say, hey, we’re going to put a stop on this short-term rental
0:47:40 game because you’re taking up all our housing supply.
0:47:43 That’s not great for the people who actually, you know, want to live here long-term, but
0:47:43 absolutely.
0:47:44 Very cool.
0:47:45 Dustin, this has been awesome.
0:47:50 I really appreciate you kind of sharing this roadmap for year one, year two, and beyond
0:47:55 what you can do with some systems and processes and team in place on the real estate
0:47:57 side, on the rental property side.
0:47:59 What’s next for you?
0:48:01 You’ve got masterpassiveincome.com.
0:48:02 You’ve got the podcast over there.
0:48:07 I want to encourage people to check out Dustin’s free real estate investing starter course.
0:48:08 We’ll link that up in the show notes.
0:48:13 And you’ve got your own conference, probably on year three or four of RubeCon, real estate
0:48:15 wealth builders conference, if I’m getting that correct.
0:48:18 What’s got you excited for the rest of this year?
0:48:19 You sure are.
0:48:20 You got everything correct, man.
0:48:20 Good job.
0:48:20 Yeah.
0:48:25 So my goal is to help 1 million people to invest in real estate because I quit my job
0:48:26 in 2016.
0:48:30 And then as I started coaching people, because they were just asking me, so friends and family
0:48:34 members, I started coaching people and then realized how much fun it was, number one, because
0:48:35 I enjoyed just talking to people.
0:48:38 Hopefully it comes across on my, you know, I get excited talking about this stuff.
0:48:41 But then I had plenty of free time, you know, 40 plus hours of my life back.
0:48:48 And so what’s up next for me is getting even bigger into my own personal rest, real estate
0:48:48 investing.
0:48:52 I, I, building master passive income coaching people just took up time.
0:48:53 So I, and I had plenty of properties.
0:48:55 I didn’t really, so I’m going to be buying more properties.
0:48:56 When is enough enough?
0:48:58 Like, do you struggle with this too?
0:48:59 Like the goalposts keeps moving.
0:49:01 You’re like, oh, I got 30 doors.
0:49:02 Let’s get to 50.
0:49:03 Like, but why?
0:49:05 Like, if you don’t need it, why, why go through it?
0:49:06 So great point.
0:49:12 So for me, once I got to 30, I think 33 or something like that, I had enough money coming
0:49:13 in and it wasn’t a drive.
0:49:16 Like it wasn’t driving factor, but here’s, here’s an amazing thing.
0:49:21 I started realizing I should buy more properties, but I didn’t really need to.
0:49:23 But then I realized, oh my goodness, I got five kids.
0:49:25 Why don’t I help them to buy?
0:49:30 Or why don’t I buy more so I can either give them, give to them or just help them to buy
0:49:33 their properties and go that route.
0:49:38 So now it’s growing because I have five kids to be able to make sure that they have,
0:49:39 you know, 10 properties each.
0:49:42 That’d be another 50 properties that we’re all working together to buy.
0:49:42 Yeah.
0:49:43 Okay.
0:49:43 Yeah.
0:49:45 What a, what a legacy to leave behind.
0:49:45 Yeah.
0:49:51 And we, we kind of just touched on it briefly, but kind of recycling the equity where it’s
0:49:55 like, you know, at a certain point plus appreciation, now I can get a loan against this existing
0:49:56 property and put that into the next thing.
0:50:01 And at a certain point, there’s a flywheel that starts to spin.
0:50:04 And I, I get the sense that it’s kind of, um, you get a kick out of it.
0:50:05 It’s a fun game for you.
0:50:07 And this whole legacy factor too.
0:50:07 Absolutely.
0:50:09 It’s so much fun.
0:50:09 Yeah.
0:50:11 Uh, but one other quick thing I want to share with you.
0:50:12 I don’t think I told you about it.
0:50:19 So, and I just mentioned it earlier, incomebuilder.io, incomebuilder.io is my new software that I’m
0:50:19 creating.
0:50:21 That is right now it’s free.
0:50:25 So for right now, for a limited time, you can get in there for free and I’m building this
0:50:30 out because I realized not that there wasn’t any good software because there are plenty
0:50:30 of good software.
0:50:32 So it’s like a deal analyzer tool.
0:50:33 So it’s even more than that.
0:50:33 Yeah.
0:50:34 That’s it.
0:50:39 So right now it’s, we started with analyzing deals because that’s the number one thing that
0:50:43 is easy to jump into and it helps people to make sure they’re getting wins.
0:50:48 And so it’s green light deal analyzer is basically what it’s called where you have, if it fits
0:50:50 this criteria, it’s going to have a green light.
0:50:51 If it doesn’t, you’re going to have a red light.
0:50:55 We’re going to have AI to kind of walk you through how to actually make sure you’re getting
0:50:56 all green lights.
0:50:59 But that’s number one, but here’s a, you’re just analyzing.
0:51:00 That’s just the tip of the iceberg.
0:51:07 All my students, I coach them how to find properties, how to analyze properties, how to finance properties,
0:51:11 how to get insurance for properties, how to manage the properties, how to do accounting
0:51:11 for your properties.
0:51:16 And I thought, I want a software that walks a property, not the person, but the property.
0:51:21 So if you have, you’re a user, you, you create a property, you find a property through
0:51:24 my software, you analyze it, but it’s a portfolio.
0:51:27 I’m trying to gamify it too, where it’s like, you don’t need to go from me for coaching.
0:51:28 You just follow the steps.
0:51:29 Like what’s the next step.
0:51:30 Here’s the next step.
0:51:34 Cause again, like I said, I created a system, a business that I created over and over again.
0:51:39 So we’re going to have it to where you even collecting rents, you’re managing your portfolio
0:51:40 in this app.
0:51:43 And my goal is to help people become an income builder.
0:51:43 Yeah.
0:51:43 Yeah.
0:51:43 Yeah.
0:51:45 You get that flywheel spinning for sure.
0:51:47 Um, well, this has been really cool.
0:51:53 You definitely got me, um, thinking harder about, uh, adding some direct real estate ownership
0:51:54 back into the portfolio.
0:51:55 It’s been a long time.
0:52:00 So there’s, I’ll chalk that up as a, as a win for, for Dustin, not that we were trying
0:52:04 to have any sort of debate here, but let’s, uh, wrap this thing up with your number one
0:52:08 tip for side hustle nation 2025 edition does not have to be real estate related.
0:52:09 You got side hustles on side hustles here.
0:52:16 Number one tip I would give everybody is to honestly, it’s never give up.
0:52:18 If you give up, then you fail twice.
0:52:22 Like, let’s say you buy a house and you do it wrong, or you start a side hustle and you
0:52:25 do it wrong and you fail once, which means you did.
0:52:26 It didn’t work.
0:52:27 Well, you failed twice.
0:52:27 You ultimately fail.
0:52:29 If you give up, you didn’t learn from it.
0:52:30 You didn’t get better.
0:52:36 My suggestion is definitely figure out, like use the failure as a way to learn so that
0:52:40 you can grow and not fail a second time, but never give up.
0:52:41 Very good.
0:52:42 Never give up.
0:52:43 Learn what works.
0:52:45 If somebody else is doing it, Hey, why them?
0:52:46 Why not me?
0:52:48 I love that kind of, kind of a mentality.
0:52:49 Like if they figured it out, I can figure it out.
0:52:53 We’ll link up all of Dustin’s resources in the show notes for this episode.
0:52:57 All you gotta do is click the show notes link in the episode description, and it’ll get you
0:52:58 right over there.
0:53:02 A couple of takeaways for me before we wrap, obviously this long-term mentality.
0:53:07 The more properties you can stack, the more systems you have in place, the better off you’re
0:53:07 going to be.
0:53:10 You’re going to be able to weather some capital expenses that might come up or some problem
0:53:11 tenants that might come up.
0:53:15 I was kind of reminded of the Warren Buffett line when you’re talking about captured equity.
0:53:17 You kind of like, you make your money when you buy, not when you sell.
0:53:20 It’s like, you know, trying to buy right, not trying to buy at inflated prices.
0:53:25 And then building the team, putting the team and the systems in place so that you can really
0:53:26 be the income builder.
0:53:32 You can really be the owner investor rather than the person who’s getting calls from tenants
0:53:32 at three in the morning.
0:53:33 Hey, the toilets leak.
0:53:34 It’s stuff like that.
0:53:38 But Dustin, big thanks for coming by, sharing your insight once again.
0:53:41 Thanks to our sponsors for helping make this content free for everyone.
0:53:46 Side hustle nation dot com slash deals is where to go to find all the latest offers from our
0:53:47 sponsors in one place.
0:53:49 Thank you for supporting the advertisers that support the show.
0:53:51 That is it for me.
0:53:53 Thank you so much for tuning in.
0:53:57 If you’re finding value in the show, the greatest compliment is to share with a friend.
0:54:00 So fire off that text message and help spread the word that way.
0:54:03 Until next time, let’s go out there and make something happen.
0:54:06 And I’ll catch you in the next edition of the Side Hustle Show.