Debug Information

Processing Details

• VTT File: YAP2066926358.vtt
• Processing Time: September 11, 2025 at 01:23 PM
• Total Chunks: 2
• Transcript Length: 90,155 characters
• Caption Count: 908 captions

Prompts Used

Prompt 1: Context Setup

You are an expert data extractor tasked with analyzing a podcast transcript. 
I will provide you with part 1 of 2 from a podcast transcript. 
I will then ask you to extract different types of information from this content in subsequent messages. Please confirm you have received and understood the transcript content.

Transcript section:
[00:00:00.240 --> 00:00:06.240] Look, adulting can be a challenge, but there is an easy button for at least one item on your to-do list.
[00:00:06.240 --> 00:00:15.280] Our partner, Policy Genius, makes finding and buying life insurance simple to make sure your loved ones have a financial safety net in case something happens to you.
[00:00:15.280 --> 00:00:23.120] With Policy Genius, you can find life insurance policies starting at just $276 a year for a million dollars in coverage.
[00:00:23.120 --> 00:00:27.200] It's an easy way to protect the people you love and feel good about the future.
[00:00:27.200 --> 00:00:36.560] How it works is Policy Genius lets you compare quotes from America's top insurers, complete with coverage amounts, prices, and terms, all in just a few clicks.
[00:00:36.560 --> 00:00:44.160] No games, no guesswork, and with thousands of five-star reviews on Google and TrustPilot from customers who found the best policy fit for their needs.
[00:00:44.160 --> 00:00:48.160] Policy Genius is the country's leading online insurance marketplace.
[00:00:48.160 --> 00:00:50.880] Secure your family's future with Policy Genius.
[00:00:50.880 --> 00:00:57.440] Head to policygenius.com to compare free life insurance quotes from top companies and see how much you could save.
[00:00:57.440 --> 00:01:00.000] That's policygenius.com.
[00:01:00.000 --> 00:01:02.480] And now, onto the show.
[00:01:02.800 --> 00:01:06.480] Your simple 10-year path to financial flexibility.
[00:01:06.480 --> 00:01:07.440] I don't want to oversell it.
[00:01:07.440 --> 00:01:13.360] Maybe not completely financial freedom, but a roadmap to build time-leveraged cash flow and long-term wealth.
[00:01:13.360 --> 00:01:18.080] So here's the game plan: Buy one profitable investment property per year.
[00:01:18.080 --> 00:01:19.280] Do that for 10 years.
[00:01:19.280 --> 00:01:25.280] Maybe easier said than done, which is why today we're going to learn how to get it done with a longtime friend and friend of the show.
[00:01:25.280 --> 00:01:32.800] He retired early from the cash flow from his rental properties and now helps other people do the same at masterpassiveincome.com.
[00:01:32.800 --> 00:01:35.520] Dustin Heiner, welcome back to the Side Hustle Show.
[00:01:35.520 --> 00:01:36.240] What's up, Nick?
[00:01:36.240 --> 00:01:38.160] Hey, man, thank you so much for having me on again.
[00:01:38.160 --> 00:01:41.360] I absolutely love your show, and I've done side hustles my entire life.
[00:01:41.360 --> 00:01:42.720] Thank you so much for having me on.
[00:01:42.720 --> 00:01:43.120] You bet.
[00:01:43.120 --> 00:01:46.080] You are a practitioner as well as a preacher.
[00:01:46.080 --> 00:01:47.040] So we'll get into that.
[00:01:47.040 --> 00:01:48.480] But paint the picture for us here.
[00:01:48.480 --> 00:01:49.920] This 10-year plan.
[00:01:49.920 --> 00:01:58.400] If you do this right, you've got a million-dollar portfolio at the end of those 10 years and hopefully have some positive cash flow from that too.
[00:01:58.400 --> 00:01:59.960] But lay the groundwork for us here.
[00:01:59.960 --> 00:02:03.320] So I started investing back in 2006, bought my first property.
[00:02:03.320 --> 00:02:05.080] It made me money in cash flow every single month.
[00:01:59.680 --> 00:02:06.600] I said, Great, I got to get 10 of those.
[00:02:06.840 --> 00:02:12.680] So if I'm making $300 a month with one property, then that's $3,000 a month with 10 properties.
[00:02:12.680 --> 00:02:13.320] That's great.
[00:02:13.320 --> 00:02:16.920] Just like if you find a good side hustle, you just replicate that same thing over and over again.
[00:02:16.920 --> 00:02:19.480] So fast forward now to where we're at now.
[00:02:19.480 --> 00:02:22.200] I have over 30 properties that are making me money.
[00:02:22.200 --> 00:02:24.760] I still own the ones that I bought back in 2006.
[00:02:24.760 --> 00:02:28.440] First property is always the hardest because you got to prove it to yourself that it works.
[00:02:28.440 --> 00:02:29.320] You got to get the money.
[00:02:29.320 --> 00:02:31.160] You have to build the business, all that sort of stuff.
[00:02:31.160 --> 00:02:35.240] Coached, I don't know, maybe over a thousand students now how to invest in real estate.
[00:02:35.240 --> 00:02:43.800] And like clockwork, they get their first property and we can go into the entire business building process to where it can scale, where you can get to 10 properties in 10 years.
[00:02:43.800 --> 00:02:48.680] And I think honestly, even faster because you do all the work on the front end, just like building a side hustle.
[00:02:48.680 --> 00:02:53.400] The second property comes so much faster because all that work is paying off in the future.
[00:02:53.400 --> 00:02:58.600] So my daughter, she's 16 years old, just bought her first property three months ago.
[00:02:58.600 --> 00:02:59.960] It's making $300 a month.
[00:02:59.960 --> 00:03:02.280] And this is the plan that I have for her.
[00:03:02.280 --> 00:03:07.080] Buy one property, get that passive income coming in every single month, $300.
[00:03:07.080 --> 00:03:07.880] Do not spend it.
[00:03:07.880 --> 00:03:11.080] Like, do not go out and buy this or buy that or, you know, whatever.
[00:03:11.080 --> 00:03:13.000] That's maybe the discipline part of this.
[00:03:13.000 --> 00:03:17.240] Like, I got some of this cash flow and I'm going to parlay that into the next thing.
[00:03:17.240 --> 00:03:18.360] Absolutely.
[00:03:18.360 --> 00:03:24.360] And so every year we focus on buying at least one more property.
[00:03:24.360 --> 00:03:28.360] And then over 10 years, if you do that, 10 years, you have 10 properties.
[00:03:28.360 --> 00:03:33.080] And hopefully each one are making you three, four, five hundred dollars a month or more in passive income.
[00:03:33.080 --> 00:03:38.600] Yeah, let's look at it through the lens of your daughter and maybe her 10-year plan here.
[00:03:38.600 --> 00:03:48.720] So, first of all, where like we see all these charts where you know, housing affordability is at an all-time bill low, or you know, it's unaffordable, interest rates are high.
[00:03:48.880 --> 00:03:51.120] Like, where are you finding cash flow?
[00:03:51.120 --> 00:03:56.080] I mean, in our neighborhood, it would cost you half as much to rent as it would to buy with 20% down right now.
[00:03:56.080 --> 00:03:57.600] And so, it just doesn't pencil.
[00:03:57.600 --> 00:04:00.240] So, where should we even begin shopping?
[00:04:00.240 --> 00:04:09.680] If you were to get outside of like the west and east coast, because the coastline's definitely the prices are much, much higher, where my daughter found her first property was in Ohio.
[00:04:09.680 --> 00:04:14.240] In Ohio, so Mazda, Ohio is the city that she bought her first property in.
[00:04:14.240 --> 00:04:17.120] And completely honest, I have my own properties there too.
[00:04:17.120 --> 00:04:21.040] So, I obviously coach lots of people and coached my daughter through this entire process.
[00:04:21.040 --> 00:04:26.480] So, she went through my entire course just like all the other students, learned everything.
[00:04:26.480 --> 00:04:28.400] And so, we went through the process together.
[00:04:28.400 --> 00:04:31.200] It was Mazda, Ohio, which is really close to Canton, Ohio.
[00:04:31.200 --> 00:04:36.080] Akron is kind of right between there, and bought it for $125,000.
[00:04:36.080 --> 00:04:38.000] Now, she didn't have $125,000.
[00:04:38.000 --> 00:04:40.880] She didn't have that cash that she could just buy it for cash.
[00:04:40.880 --> 00:04:43.440] But what she did was she had savings that she saved up.
[00:04:43.440 --> 00:04:47.920] I want to say it was like she had $2,000 that she saved of her own money.
[00:04:47.920 --> 00:04:50.480] And then we had been putting aside money for college.
[00:04:50.480 --> 00:04:52.080] And so, I think it was like 10 grand.
[00:04:52.080 --> 00:05:00.800] So, we got $12,000 total and got a DSCR loan, a debt service coverage ratio loan.
[00:05:00.800 --> 00:05:07.200] When you buy a house to get a mortgage, you normally make sure that the bank says, Hey, do you have a job that you could pay off the mortgage?
[00:05:07.200 --> 00:05:07.360] Right.
[00:05:07.600 --> 00:05:08.320] Yeah, you're 16.
[00:05:08.400 --> 00:05:11.680] You're like, Well, even if I do have a job, I'm working at McDonald's or something.
[00:05:11.680 --> 00:05:12.240] Exactly.
[00:05:12.240 --> 00:05:14.960] So, this type of loan is a commercial loan.
[00:05:14.960 --> 00:05:17.200] So, it doesn't depend on your income.
[00:05:17.200 --> 00:05:19.440] It depends on the property's income.
[00:05:19.440 --> 00:05:23.360] How much money will that property make in cash flow from the rents?
[00:05:23.360 --> 00:05:29.520] And if it'll cover the mortgage, cover taxes, insurance, all the normal things, and then make passive income on top of that, they'll lend you the money.
[00:05:29.520 --> 00:05:32.440] And obviously, being 16 years old is going to be harder for her.
[00:05:32.440 --> 00:05:34.520] So, I co-signed because I'm dad.
[00:05:35.080 --> 00:05:35.800] I'm going to do that.
[00:05:29.840 --> 00:05:39.240] Plus, I'll just take over the property if she stops paying for it.
[00:05:39.240 --> 00:05:42.040] But in the end, you don't have to have a lot of money.
[00:05:42.040 --> 00:05:44.280] Now, you might be thinking, I don't have $12,000.
[00:05:44.280 --> 00:05:45.320] Completely understand.
[00:05:45.320 --> 00:05:49.000] 10% of $125,000, that's $12,500.
[00:05:49.000 --> 00:05:51.880] I even have, yeah, mortgage brokers, 5% down.
[00:05:52.200 --> 00:05:58.040] I even know of, you can get a FHA loan 3.5% down to buy a property.
[00:05:58.040 --> 00:06:00.920] Now, you got to live in there a year, but that's a great way to do it.
[00:06:00.920 --> 00:06:08.120] We live in Tennessee right now and bought in Ohio, and we hire experts to do all the work for us.
[00:06:08.120 --> 00:06:13.720] And here's one quick, quick caveat: we don't just hire them after we're all done buying a house.
[00:06:13.720 --> 00:06:14.920] In fact, I have lots of students.
[00:06:15.000 --> 00:06:17.480] What they do is say, Hey, Dustin, I bought a house.
[00:06:17.480 --> 00:06:26.920] I did all the things those TikTok gurus told me to do, found a property, spent thousands of dollars to buy it, thousands of dollars to fix it up, then found a tenant, then tried to find a property manager.
[00:06:26.920 --> 00:06:32.040] Well, then I called property managers, and they all told me they wouldn't manage it because they get shot there.
[00:06:32.040 --> 00:06:35.480] I'm like, Oh, you have a you don't have an asset anymore, you have a liability.
[00:06:35.480 --> 00:06:40.920] Okay, instead of doing that, instead of saying, I, you know, property manager, I just bought this, will you manage it?
[00:06:40.920 --> 00:06:43.320] You called your property manager and you found them before.
[00:06:43.320 --> 00:06:47.640] We build an entire business that then is a system that we put in place.
[00:06:47.640 --> 00:06:53.000] And we talk to the property manager beforehand: say, Hey, property manager, you don't say, I bought this property already.
[00:06:53.000 --> 00:06:55.400] You say, I'm looking to buy this property.
[00:06:55.400 --> 00:06:59.640] If they say they won't manage it, then you don't waste your time, energy, and money to buy the property.
[00:06:59.960 --> 00:07:03.160] What you do is you ask them if they, you know, how much will it rent for?
[00:07:03.160 --> 00:07:06.520] What's a vacancy factor, which means how often will it be vacant?
[00:07:06.520 --> 00:07:07.400] Type of clientele.
[00:07:07.400 --> 00:07:08.120] Will you manage it?
[00:07:08.120 --> 00:07:09.240] All those good questions.
[00:07:09.240 --> 00:07:11.880] They say yes, they'll tell you how much it rents for too.
[00:07:11.880 --> 00:07:17.120] So you calculate all your expenses, you make sure your income is also tacked on as expense.
[00:07:14.760 --> 00:07:19.440] $300 is what I suggest minimum.
[00:07:19.760 --> 00:07:28.400] And then as long as it rents for that total expense and you still make passive income, then that's a worthwhile property that you put into your business that makes money for you.
[00:07:28.400 --> 00:07:29.520] Does that all make sense?
[00:07:29.680 --> 00:07:33.360] What's the rent in this example on the $125,000 Ohio house?
[00:07:33.360 --> 00:07:34.400] $13.50.
[00:07:34.720 --> 00:07:35.120] Okay.
[00:07:35.120 --> 00:07:42.080] There are still, they talk about the magic, you know, 1% rule where it's like, if I have a $100,000 house, I want it to rent for $1,000 a month.
[00:07:42.080 --> 00:07:43.200] That's a 1% rule.
[00:07:43.200 --> 00:07:44.640] And it's like kind of a unicorn.
[00:07:44.720 --> 00:07:46.000] In some markets, really hard to find.
[00:07:46.000 --> 00:07:50.400] But you say, okay, these opportunities are still out there if you know where to look.
[00:07:50.400 --> 00:07:52.240] The Midwest has been really, really good.
[00:07:52.240 --> 00:07:54.000] I have some students investing in Indiana.
[00:07:54.000 --> 00:07:55.280] I own property in Indiana.
[00:07:55.280 --> 00:07:56.080] Tennessee is not bad.
[00:07:56.080 --> 00:08:00.880] Memphis is a little more aggressive of a place because a little more crime there.
[00:08:00.880 --> 00:08:02.880] But at the same time, a lot of investors going there.
[00:08:02.880 --> 00:08:03.840] Alabama's been really good.
[00:08:04.560 --> 00:08:10.320] As I was building out my business, I invest in Ohio, Texas, Arizona, Tennessee, and Indiana.
[00:08:10.320 --> 00:08:11.280] All these different states.
[00:08:11.280 --> 00:08:13.120] You don't have to invest in your backyard.
[00:08:13.360 --> 00:08:17.840] Like you live in Seattle or you live in San Francisco or really expensive places.
[00:08:18.240 --> 00:08:33.440] You do not have to invest in that city as long as you do it right, which means I suggest building a business, finding the experts before you buy the property and them tell you if it's a bad property, if it's a good property, how much it would rent for, how much it would cost to fix up, all of that.
[00:08:33.440 --> 00:08:36.240] Then you buy a good property in the right areas.
[00:08:36.240 --> 00:08:41.360] So it sounds like there's a two-tiered approach for people just starting out.
[00:08:41.360 --> 00:08:49.680] Number one is the database of Redfin houses for sale, like across the whole Midwest, like that's a huge spectrum to try and search and narrow down.
[00:08:49.680 --> 00:09:03.720] And then the second angle is this: well, I'm going to find property managers who are already on the ground, who already know the market, they know the rents, they know the neighborhoods, and trying to pair those two together and find and find this unicorn and find that match.
[00:09:04.040 --> 00:09:09.400] But it still seems really, really daunting without some more, some more constraint.
[00:09:09.400 --> 00:09:15.000] Is there any filters or resources that you like to even narrow down that search a little bit?
[00:09:15.000 --> 00:09:15.640] Absolutely.
[00:09:15.640 --> 00:09:16.280] Absolutely.
[00:09:16.280 --> 00:09:22.840] And so, here's how I would explain it: I tell everybody that can hear me: stop being an investor.
[00:09:22.840 --> 00:09:30.280] Because when you think like an investor, meaning quote-unquote investor, you think of appreciation, you think of all these different things that are not what you should be doing.
[00:09:30.280 --> 00:09:32.600] What you need to be is an income builder.
[00:09:32.600 --> 00:09:39.560] You need to build income every single month instead of trying to get for, you know, hey, I'm going to get equity in 10 years or 20 years.
[00:09:39.560 --> 00:09:41.080] It's going to be worth, you know, double.
[00:09:41.080 --> 00:09:42.040] You never know if it will.
[00:09:42.040 --> 00:09:42.840] It might crash.
[00:09:42.840 --> 00:09:46.520] But if you invest for income every single month, then it's going to go well.
[00:09:46.520 --> 00:09:51.000] So here's what you do: you in any city, or let's say you just pick a state.
[00:09:51.000 --> 00:09:52.440] Let's just, you know, I said Ohio.
[00:09:52.440 --> 00:09:55.800] You're going to look at Ohio and Redfin or Trulia or Zillow.
[00:09:55.800 --> 00:09:59.400] You're going to see a bunch of red dots everywhere, all the for sell properties.
[00:09:59.400 --> 00:10:04.920] Build your business in a city that has a good amount of inventory that you can buy.
[00:10:04.920 --> 00:10:11.240] Now, when I say inventory, that means every single property that you buy, don't look at it as a home.
[00:10:11.240 --> 00:10:13.560] Look at it, not even as a house.
[00:10:13.560 --> 00:10:20.360] Look at it as a piece of inventory that you put into your business so that you hire the experts to do all the work for you.
[00:10:20.360 --> 00:10:30.040] So if I'm looking at Ohio and you can even just pick Alabama, you can pick Tennessee, you can pick Indiana, you can pick all these different cities or sorry, states, and then you'll see all those red dots.
[00:10:30.040 --> 00:10:33.080] And now I'll give you the criteria that I give all my coaching students.
[00:10:33.080 --> 00:10:37.640] We want the type of property that everybody either wants to rent or buy.
[00:10:37.640 --> 00:10:41.000] Because if you ever want to sell it, you want to have a property that sells pretty quickly.
[00:10:41.000 --> 00:10:48.160] Here's the criteria that we look for: a three-bedroom, two-bath, 1,200 to maybe 1,600 square feet.
[00:10:44.680 --> 00:10:50.480] You don't want it too small that families don't want to live in there.
[00:10:50.560 --> 00:10:54.560] You don't want to be too big where extra walls to paint and toilets to fix and all that sort of stuff.
[00:10:54.880 --> 00:10:55.600] So you want.
[00:10:55.840 --> 00:11:01.760] a cookie cutter type home that other people are going to be looking for to rent or buy.
[00:11:01.760 --> 00:11:05.520] And so when you're doing your filter, Zillow, Red Fentrulia, put those in.
[00:11:05.520 --> 00:11:08.720] Three bedroom, two bath, 1,200, 1,700 square feet.
[00:11:08.720 --> 00:11:09.920] You're going to do great there.
[00:11:09.920 --> 00:11:13.040] Then once you start looking, you'll see the red dots.
[00:11:13.040 --> 00:11:16.640] And then we'll look for cities that had good, that have good inventory.
[00:11:16.640 --> 00:11:18.640] You don't want a city that has like three homes.
[00:11:18.640 --> 00:11:23.040] You build a business, you find all the right people, but you only have three homes to buy, then you're done.
[00:11:23.040 --> 00:11:24.080] Then you can't scale.
[00:11:24.080 --> 00:11:26.080] Indianapolis has really, Memphis has a lot of them.
[00:11:26.480 --> 00:11:27.440] Birmingham has a lot.
[00:11:27.520 --> 00:11:28.960] You can even just start those cities.
[00:11:28.960 --> 00:11:29.840] But here's what you do.
[00:11:30.160 --> 00:11:37.040] Here's the secret sauce that I at Master Passive Income coach on my podcast that I constantly teach is we build a business first.
[00:11:37.040 --> 00:11:41.120] Because if you start looking and calling realtors, this is a sad thing.
[00:11:41.120 --> 00:11:42.080] I get students.
[00:11:42.080 --> 00:11:44.000] They'll say, hey, Dustin, I found a great city.
[00:11:44.000 --> 00:11:45.040] Lots of inventory.
[00:11:45.040 --> 00:11:47.360] I have five realtors already sending me deals.
[00:11:47.360 --> 00:11:48.800] They say, whoa, whoa, whoa, whoa.
[00:11:48.800 --> 00:11:50.960] Well, do you have a property manager?
[00:11:51.200 --> 00:11:51.840] No.
[00:11:51.840 --> 00:11:52.960] Do you have a contractor?
[00:11:52.960 --> 00:11:53.280] No.
[00:11:53.280 --> 00:11:54.240] Do you have an inspector?
[00:11:54.240 --> 00:11:54.560] No.
[00:11:55.200 --> 00:11:57.600] You don't have any of these things and you already have deals coming.
[00:11:57.680 --> 00:12:00.800] What happens if you bought a property and it's the wrong area?
[00:12:00.800 --> 00:12:02.320] Because it's a big city.
[00:12:02.320 --> 00:12:03.600] Indianapolis is a big city.
[00:12:03.600 --> 00:12:08.480] There's bad areas that you might not want to rent that doesn't get good rents or has crime or whatever.
[00:12:08.480 --> 00:12:10.800] So what we do, here's the key thing.
[00:12:10.800 --> 00:12:13.600] We find a city that has good inventory, lots of properties to buy that we want.
[00:12:13.600 --> 00:12:14.240] That'd be great.
[00:12:14.240 --> 00:12:17.760] That could rent for more than our expenses, which would be great.
[00:12:17.760 --> 00:12:19.840] Then we stop looking for properties.
[00:12:19.840 --> 00:12:20.960] This is key.
[00:12:20.960 --> 00:12:23.040] You're not going to hear very many people talk about this.
[00:12:23.040 --> 00:12:24.160] We stop looking at properties.
[00:12:24.160 --> 00:12:28.160] The next thing we do is we find our property manager.
[00:12:28.160 --> 00:12:34.200] We find our property manager because they're the ones going to be managing it for the longevity of the entire time you own it.
[00:12:29.840 --> 00:12:35.560] Yeah, this is interesting.
[00:12:35.960 --> 00:12:40.680] I have got Redfin open outside of Canton, Ohio.
[00:12:40.680 --> 00:12:49.560] And there are some properties in the, you know, call it $85,000 to $130,000 range that actually look decent from the outside.
[00:12:49.560 --> 00:13:02.840] And under that, like you've got some, if you want to take on a big rehab project, there's some even less than like sub $50,000, which is really kind of unheard of from West Coast real estate, you know, jaded Nick.
[00:13:02.840 --> 00:13:07.720] But at this point, you say, okay, stop shopping, start looking for a property manager.
[00:13:08.120 --> 00:13:10.840] What makes a good property management company in your eyes?
[00:13:10.840 --> 00:13:13.400] Here's what we do when we're looking for a property manager.
[00:13:13.400 --> 00:13:17.880] You hire slow, which means you interview many different property managers.
[00:13:17.880 --> 00:13:20.920] You interview them many different times, ask them many different questions.
[00:13:20.920 --> 00:13:28.280] In fact, I have a list of 22 questions and answers that I give my students that this is the question you should ask.
[00:13:28.280 --> 00:13:31.880] And here are the answers that you should be getting, or somewhere around there.
[00:13:31.880 --> 00:13:36.840] And, you know, if you want to deviate from that, it's your own risk tolerance, if you're okay with deviating from that.
[00:13:36.840 --> 00:13:40.760] But at minimum, we interview six, six different property managers.
[00:13:40.760 --> 00:13:42.360] Google search is probably one of the best ways to find them.
[00:13:42.360 --> 00:13:46.120] Chat GPT started to come out too, where they're finding property managers for you, which is interesting.
[00:13:46.120 --> 00:13:47.800] AI is doing that work for you.
[00:13:47.800 --> 00:13:52.120] But once you get a list of six, you call each one of them three different times.
[00:13:52.120 --> 00:13:57.240] Let's say on a Monday, you call the first call, second call you call on a Wednesday, and the third call you call on a Friday.
[00:13:57.240 --> 00:14:13.080] The reason why is I hate when property managers cannot call you back within 24, at most 48 hours, because if you're trying to hire a property manager and they don't call you back, and this is before they have your money, imagine when they have your money.
[00:14:13.080 --> 00:14:15.920] Are they going to call, oh, this guy again, I don't wanna talk to him?
[00:14:14.600 --> 00:14:26.080] So, you want a good, reputable company because be completely honest, it's very easy for somebody to get a hat, put it on, meaning I'm a property manager, and they'll put that property manager house.
[00:14:26.160 --> 00:14:29.440] It's very simple to do that, but it's very hard to be a good property manager.
[00:14:29.440 --> 00:14:33.040] So, we interview them three different times: a Monday, Wednesday, Friday.
[00:14:33.040 --> 00:14:36.000] Each time we interview them or call them and just chat with them.
[00:14:36.000 --> 00:14:40.560] It's when I say interview, it's talking to them just as a normal human being, just see their business.
[00:14:40.560 --> 00:14:43.600] Each one gets very short or shorter and shorter.
[00:14:43.600 --> 00:14:47.520] First one should maybe be about 20, 30 minutes because you're asking good questions.
[00:14:47.520 --> 00:14:52.080] And then, after you go through all six, then you take those and you rank them.
[00:14:52.080 --> 00:14:52.960] Hey, this was number one.
[00:14:52.960 --> 00:14:54.000] I really like this company.
[00:14:54.000 --> 00:14:56.720] Number two, this is the second best, third best, and all the way so forth.
[00:14:56.720 --> 00:14:58.640] Wednesday, you call them again.
[00:14:58.640 --> 00:15:09.680] You maybe do 15 minutes, 10 or 15 minutes, and then you re-rank after you ask those questions on the Friday, the last call, last five minutes, you call the top three and you just verify that they're going to call you back, that they answer.
[00:15:10.000 --> 00:15:13.920] Anybody could have a good call at the beginning, you know, like the first call, they sound good.
[00:15:13.920 --> 00:15:16.800] Yeah, but this is the longevity.
[00:15:16.800 --> 00:15:23.520] You want to make sure you have somebody that you can trust with your money, with your property, and never talk to them because they're sending you money over and over again.
[00:15:23.520 --> 00:15:27.520] So, that's what we do: we hire slow and fire fast.
[00:15:27.520 --> 00:15:40.640] More with Dustin in just a moment, including other key members of his on-the-ground team, his revised take on so-called turnkey rental agencies, and six ways investors are making money right after this.
[00:15:40.960 --> 00:15:52.560] Years ago, this is probably 2009, I'm sitting in this conference in Santa Barbara, and the presenter asks this question: Are you working on your business or are you working in your business?
[00:15:52.560 --> 00:16:00.360] I saw myself as this full-time entrepreneur, but it was this moment of clarity that, no, I was still very much working in the business day to day.
[00:16:00.360 --> 00:16:03.640] So, when I got back home, that's when I made my first full-time hire.
[00:16:03.640 --> 00:16:13.720] It was the first in a long series, in an ongoing series of steps in trying to take control by being okay of letting go of certain tasks.
[00:16:13.720 --> 00:16:20.520] Now, when you find yourself in that position of needing to hire like yesterday, you need our sponsor, Indeed.
[00:16:20.520 --> 00:16:24.760] Plus, Indeed's sponsored jobs help you stand out and hire fast.
[00:16:24.760 --> 00:16:29.640] There's no monthly subscriptions, no long-term contracts, and you only pay for results.
[00:16:29.640 --> 00:16:32.600] That's why for my next hire, I'm using Indeed.
[00:16:32.760 --> 00:16:41.800] Side Hustle Show listeners get a $75 sponsored job credit to get your jobs more visibility at indeed.com/slash sidehustle show.
[00:16:41.800 --> 00:16:49.560] Just go to indeed.com/slash sidehustle show right now and support our show by saying you heard about Indeed on this podcast.
[00:16:49.560 --> 00:16:52.440] Indeed.com/slash sidehustle show.
[00:16:52.440 --> 00:16:54.040] Terms and conditions apply.
[00:16:54.040 --> 00:16:56.760] Hiring, indeed, is all you need.
[00:16:56.760 --> 00:17:07.880] You know, when you're shopping online and you see that little purple shop pay button at checkout, that's a sign that the store you're on is one of the millions of businesses powered by our partner, Shopify.
[00:17:07.880 --> 00:17:11.480] Shopify makes it incredibly easy to start and run your business.
[00:17:11.480 --> 00:17:13.800] For starters, you don't even have to start from scratch.
[00:17:13.800 --> 00:17:22.120] They've got hundreds of beautiful, ready-to-go, proven-to-convert templates that you can adapt to your brand's style without needing to know how to code.
[00:17:22.120 --> 00:17:30.200] You can tackle all your most important tasks in one place, from managing your inventory to tracking payments to analytics and more.
[00:17:30.200 --> 00:17:37.800] Plus, Shopify helps you make sales with built-in marketing and email tools to go out and find new customers and keep the ones you've got.
[00:17:37.800 --> 00:17:42.680] If you want to see less carts being abandoned, it's time to head over to Shopify.
[00:17:42.680 --> 00:17:49.200] Sign up for your $1 per month trial and start selling today at shopify.com slash sidehustle.
[00:17:49.200 --> 00:17:52.560] Go to shopify.com slash sidehustle.
[00:17:52.560 --> 00:17:56.160] Shopify.com slash sidehustle.
[00:17:57.760 --> 00:18:04.560] Okay, so you find your winner based on who has impressed you in these interviews, and then you start floating property.
[00:18:04.560 --> 00:18:07.600] I'm thinking of, I'm looking at this place, at this address.
[00:18:07.840 --> 00:18:08.320] What do you think?
[00:18:08.320 --> 00:18:09.200] What do you think of the neighborhood?
[00:18:09.200 --> 00:18:10.160] What do you think it would rent for?
[00:18:10.160 --> 00:18:11.120] That kind of stuff?
[00:18:11.120 --> 00:18:11.760] Absolutely.
[00:18:11.760 --> 00:18:13.680] So another key tip I'll give you.
[00:18:13.680 --> 00:18:17.920] So property managers are paid to manage properties, not to go look at properties.
[00:18:17.920 --> 00:18:24.480] Honestly, like this is one-on-one coach I can give you because a lot of students have ran a property manager ragged.
[00:18:24.480 --> 00:18:25.440] Hey, go check out this property.
[00:18:25.440 --> 00:18:26.320] Go check out this property.
[00:18:26.320 --> 00:18:27.120] Go check out this property.
[00:18:27.120 --> 00:18:28.000] They don't get paid to do that.
[00:18:28.000 --> 00:18:30.480] Realtors get paid to look at properties.
[00:18:30.480 --> 00:18:34.560] So you don't want to get fired by your property manager by having them run around everywhere.
[00:18:34.560 --> 00:18:38.400] Have them look online, just give them a list of five and say, hey, these are the five properties.
[00:18:38.400 --> 00:18:39.520] Tell me, just look online.
[00:18:39.520 --> 00:18:40.560] How much will it rent for?
[00:18:40.560 --> 00:18:42.320] Will you manage it in just the area?
[00:18:42.320 --> 00:18:44.720] And then you have your realtor go over there and take them out.
[00:18:44.720 --> 00:18:45.040] Okay.
[00:18:45.040 --> 00:18:49.520] So there's another piece of the pie is why I want to find a local real estate agent who knows the market.
[00:18:49.520 --> 00:18:50.560] Absolutely.
[00:18:50.560 --> 00:18:53.040] So, well, no, no, let me take that back.
[00:18:53.040 --> 00:18:57.440] No, I never use a quote unquote buyer's realtor anymore.
[00:18:57.440 --> 00:19:02.640] I find the properties through Redfin, Trulia, Zillow, and I find a seller's realtor.
[00:19:02.640 --> 00:19:03.600] Here's a big tip.
[00:19:03.600 --> 00:19:04.960] This is what we investors do.
[00:19:04.960 --> 00:19:06.560] I find the seller's realtor.
[00:19:06.560 --> 00:19:12.480] The seller's realtor, because I already found the property, the seller's realtor are going to be, I'm going to have them represent me.
[00:19:12.480 --> 00:19:14.480] So they're going to get both sides of the commission.
[00:19:14.480 --> 00:19:22.480] They're really going to want me to buy the property as opposed to anybody else because they're getting full commission and I'll get a little bit more insights and they're going to go to bat for me as well.
[00:19:22.480 --> 00:19:24.000] But that's a conflict of interest, right?
[00:19:24.000 --> 00:19:29.720] The seller's agent can't have the buyer's best interest in mind when their role is to get the highest price.
[00:19:29.720 --> 00:19:33.240] Like there is kind of a natural issue with dual agency.
[00:19:33.240 --> 00:19:34.520] There's nothing illegal about it.
[00:19:34.520 --> 00:19:34.840] No.
[00:19:29.520 --> 00:19:35.960] And there's nothing unethical.
[00:19:36.520 --> 00:19:40.680] They have to tell both: hey, I'm representing the buyer now and I'm representing the seller.
[00:19:40.680 --> 00:19:44.200] So as long as you do that, then you're completely on the up and up.
[00:19:44.200 --> 00:19:44.440] All right.
[00:19:44.440 --> 00:19:49.320] So finding a seller, so just basically whoever is the listing agent on the property.
[00:19:49.320 --> 00:19:49.880] Correct.
[00:19:49.880 --> 00:19:51.640] So here's a big thing too.
[00:19:51.640 --> 00:19:53.480] I don't just try to find my properties.
[00:19:53.480 --> 00:19:55.000] I have other people send me deals.
[00:19:55.000 --> 00:19:56.920] Remember, I want it to be hands-off.
[00:19:56.920 --> 00:20:00.040] And just like you, I love having my free time.
[00:20:00.040 --> 00:20:02.600] So I have so many people sending me deals.
[00:20:02.600 --> 00:20:08.440] Wholesalers, those are people that are like realtors, but they're not necessarily, you know, they send you, sell the deals to you.
[00:20:08.440 --> 00:20:09.880] Other investors send me deals.
[00:20:09.880 --> 00:20:11.400] Property managers send me deals.
[00:20:11.640 --> 00:20:18.920] Title companies set everybody knows that I'm an investor and I get deals sent to me because I tell them I'm an investor.
[00:20:19.080 --> 00:20:24.600] Find the property manager first, but then we also let other people like all of our fishing poles, our lines in the water.
[00:20:24.600 --> 00:20:26.760] Everybody is trying to look for properties for us.
[00:20:26.760 --> 00:20:27.240] Okay.
[00:20:27.560 --> 00:20:28.200] That's fair.
[00:20:28.200 --> 00:20:28.440] Okay.
[00:20:28.440 --> 00:20:31.080] So we've got the pieces of the puzzle in place.
[00:20:31.080 --> 00:20:33.000] We found the property manager.
[00:20:33.000 --> 00:20:34.120] We found this property.
[00:20:34.120 --> 00:20:35.560] We've kind of gotten their green light.
[00:20:35.560 --> 00:20:36.680] Yeah, it seems legit.
[00:20:36.680 --> 00:20:39.080] Here's what we think it's going to rent for.
[00:20:39.080 --> 00:20:45.400] It matches our cash flow criteria based on what we project our debt service is going to be.
[00:20:45.400 --> 00:20:48.520] And now we go out and look for financing.
[00:20:48.520 --> 00:20:50.600] Like what do you think is the next step here?
[00:20:50.600 --> 00:20:51.720] Financing is the easiest.
[00:20:51.720 --> 00:20:53.240] Honestly, it's very easy.
[00:20:53.240 --> 00:20:58.120] I've got, I want to say 18 different ways to get financing to buy properties.
[00:20:58.120 --> 00:21:04.040] But like if somebody's, if you're on the call, or if you're sure you're listening to this, and you're thinking, Man, Dustin, I don't have very much money.
[00:21:04.040 --> 00:21:06.920] It's like, honestly, you don't need a lot of money.
[00:21:06.920 --> 00:21:13.960] But the financing, you need to just quote unquote know that you can get financing in one or two ways.
[00:21:13.960 --> 00:21:29.200] So, here's what I would suggest: when you're starting, you're building your entire business, finding your property managers, finding the inspectors, and all that sort of stuff, you find a couple good mortgage brokers in that state, that entire state, because some mortgage brokers don't go from state to state.
[00:21:29.200 --> 00:21:30.640] There only might be in that state.
[00:21:30.640 --> 00:21:40.400] In fact, my students, I've got a list of like 20 different mortgage brokers that my students have used, got great interest rates, great everything and fees.
[00:21:40.400 --> 00:21:45.040] And so, we call up one or two mortgage brokers and just tell them our situation.
[00:21:45.040 --> 00:21:46.400] Here's our credit.
[00:21:46.400 --> 00:21:47.360] Here's where we're at.
[00:21:47.360 --> 00:21:50.640] I want a DSCR loan, a debt service coverage ratio loan.
[00:21:50.640 --> 00:21:55.360] And they help you to understand how much money you can afford if you're going to buy a property.
[00:21:55.360 --> 00:21:56.160] Does that all make sense?
[00:21:56.160 --> 00:22:00.480] So, we're building that first so that we understand the parameters that we're going after.
[00:22:00.480 --> 00:22:06.880] I imagine they're still going to want to know your own credit worthiness, your credit history, your income, that kind of thing.
[00:22:06.880 --> 00:22:12.400] But they're going to base the loan off of, hey, the projected rent is $1,200 a month.
[00:22:12.400 --> 00:22:15.760] The projected expenses for this is $800.
[00:22:15.760 --> 00:22:17.520] So, we have this, we have this margin to play.
[00:22:17.520 --> 00:22:25.760] And so we can lend against that and the equity in the home or the value of the property versus purely based on your income and your ability to repay.
[00:22:25.760 --> 00:22:27.600] They don't always run the credit.
[00:22:27.600 --> 00:22:29.040] I'll give you an example.
[00:22:29.040 --> 00:22:35.360] So, I bundled, and this is another crazy, creative and crazy way that you can get financing.
[00:22:35.360 --> 00:22:43.040] So, I had six properties that were owned free and clear over in the Ohio area, and I bundled them together in a DSCR loan.
[00:22:43.040 --> 00:22:46.640] The DSCR loan, they did not even look at my credit.
[00:22:46.640 --> 00:22:48.000] It wasn't even a credit pool.
[00:22:48.000 --> 00:22:56.640] It was on the business because I have a business that owns the properties, which I teach all my students how to get, make sure we have the right LLCs, the right trusts, all that sort of stuff set up.
[00:22:56.640 --> 00:23:00.760] And they did not pull my credit, and it's not even on my credit.
[00:22:59.760 --> 00:23:04.040] So we have, I borrowed, I pulled out 500 grand, now $550,000.
[00:23:04.440 --> 00:23:08.680] And so I put you have invested in my apartment complexes.
[00:23:08.680 --> 00:23:14.360] And I took that money out of the equity of the properties and I put that in my new apartment complex that we buy.
[00:23:14.360 --> 00:23:16.840] And so I now have a tax-free loan.
[00:23:16.840 --> 00:23:18.280] I didn't have to sell the property.
[00:23:18.280 --> 00:23:20.280] It still makes me money tax-free.
[00:23:20.280 --> 00:23:21.160] And I put it inside there.
[00:23:21.160 --> 00:23:24.680] And my tenants, obviously, because the rents are going to pay off the mortgage.
[00:23:24.680 --> 00:23:35.320] But here's the great thing: their sales pitch for DSCR loans is when you go and buy another primary residence, this loan of $550,000 is not going to come up on your credit.
[00:23:35.320 --> 00:23:39.320] It's not even be a credit pull because we're looking at the properties.
[00:23:39.320 --> 00:23:40.200] We'll just take the properties.
[00:23:40.200 --> 00:23:41.320] Does that all make sense?
[00:23:41.320 --> 00:23:43.320] Yeah, I'm starting to see the light here.
[00:23:43.320 --> 00:23:50.840] You know, I've always been a little, and maybe just from like the standpoint of if you already won the game, why take additional risk?
[00:23:50.840 --> 00:23:55.400] Like from my perspective today, 20 years into my working career, right?
[00:23:55.400 --> 00:23:59.720] But if I'm early on in my career, I see this as an accelerated path.
[00:23:59.720 --> 00:24:03.000] And it's a unique one because it's like, I see three paths, right?
[00:24:03.000 --> 00:24:04.520] I see the traditional investment path.
[00:24:04.520 --> 00:24:15.160] Hey, just go buy the SP index and be happy with your 8% and lather rinse repeat for 20 years, assuming a decent personal level of personal profitability and you're going to be good to go.
[00:24:15.160 --> 00:24:16.440] But it's still 20 years, right?
[00:24:16.440 --> 00:24:17.880] Here's an accelerated path.
[00:24:17.880 --> 00:24:19.720] And then path three is the entrepreneurial path.
[00:24:19.720 --> 00:24:28.040] Go invest in yourself, go build a business, go do something where maybe it's higher risk, higher reward, but you can accelerate that maybe even a little bit further.
[00:24:28.040 --> 00:24:30.840] But I did want to touch on the turnkey option.
[00:24:30.840 --> 00:24:39.000] So these are properties that have been theoretically pre-vetted, pre-rehabbed, you know, pre-leased in a lot of cases.
[00:24:39.000 --> 00:24:40.760] Hey, we've already got tenants in place here.
[00:24:40.760 --> 00:24:44.960] We just need an investor, usually an out-of-state investor to come in.
[00:24:44.600 --> 00:24:46.400] And we've got property management in place.
[00:24:46.480 --> 00:24:48.320] Like, what's your take on these?
[00:24:48.320 --> 00:24:50.720] Are there any that you like, or what's going on here?
[00:24:50.720 --> 00:24:57.840] So, if you remember our time that I was on your podcast, we talked about turnkey, and there were two major downfalls with turnkey.
[00:24:57.840 --> 00:25:04.160] But we're gonna, I'm gonna help you understand a bigger perspective because before last year, I bought two turnkey properties.
[00:25:04.240 --> 00:25:07.440] In fact, my daughter, the property she bought was a turnkey property.
[00:25:07.440 --> 00:25:08.480] So, let me get into it.
[00:25:08.480 --> 00:25:12.000] So, number one, you listening don't know what a turnkey company is.
[00:25:12.000 --> 00:25:20.800] They buy the house, then they fix it up, and they make it really, really nice, and they hopefully get a tenant in there, get it renting, and then they sell it to you.
[00:25:20.800 --> 00:25:23.760] Now, the downside is they capture that equity.
[00:25:23.760 --> 00:25:28.240] So, the house that my daughter bought, they bought it for like 60 grand, man, put 30 grand into it.
[00:25:28.240 --> 00:25:30.560] So, it's up, it's $90,000 total.
[00:25:30.560 --> 00:25:31.920] She paid $125,000.
[00:25:31.920 --> 00:25:35.680] So, you know, she paid them basically what, $35,000 on top of that.
[00:25:35.680 --> 00:25:37.760] Yeah, they're making a nice margin on it right away.
[00:25:37.760 --> 00:25:38.560] Totally.
[00:25:38.560 --> 00:25:40.720] And then they also manage the property.
[00:25:40.720 --> 00:25:42.400] So they're making money on the back end.
[00:25:42.400 --> 00:25:44.640] So that's the whole picture of what turnkey is.
[00:25:44.640 --> 00:25:50.880] Now, a couple downsides are: number one, are you going to be getting a good property management company in the end?
[00:25:50.880 --> 00:25:52.240] Are you going to be getting good tenants?
[00:25:52.240 --> 00:25:55.840] Or are they just trying to sell these, pump these out, and make money?
[00:25:55.840 --> 00:25:56.640] So that's number one.
[00:25:56.640 --> 00:25:58.720] So vetting a turnkey company is very hard.
[00:25:58.720 --> 00:26:00.400] There's been a lot of problems.
[00:26:00.400 --> 00:26:07.360] And if you go to other websites and you see, you know, forums and stuff, you'll see people saying, oh my goodness, like this turnkey company was horrible.
[00:26:07.360 --> 00:26:08.480] I lost as much money.
[00:26:08.480 --> 00:26:09.920] So that's number one, vetting.
[00:26:09.920 --> 00:26:12.400] But number two, they capture that equity.
[00:26:12.400 --> 00:26:22.240] Like you said, you know, if they bought it for 60 grand and then fixed up for $20,000, $30,000, out $90,000, and then it's resell for $130,000, they captured equity.
[00:26:22.240 --> 00:26:23.520] They forced the appreciation up.
[00:26:23.520 --> 00:26:24.720] Those are the other two things.
[00:26:24.720 --> 00:26:28.880] Force depreciation up, put money into it, and make it worth double what you put into it.
[00:26:28.880 --> 00:26:31.320] So, those are the two major, three major.
[00:26:31.800 --> 00:26:37.800] So, you miss out on equity capture, you miss out on forced appreciation, and you also don't know exactly what the good company is.
[00:26:37.800 --> 00:26:43.880] But here's the well, before I get to like my ideas of why I've changed a little bit and why I actually bought one, do you have any questions on those?
[00:26:43.880 --> 00:26:48.280] Any specific ones you think listeners should put on the shortlist?
[00:26:48.280 --> 00:26:49.880] Oh, of companies to use?
[00:26:49.880 --> 00:26:50.760] Yeah, got it.
[00:26:50.760 --> 00:26:51.960] I'll give you those in just a minute.
[00:26:51.960 --> 00:27:01.160] Let me flesh out the reasoning why you should at least consider it, especially if you have some, if you have a little bit extra money, especially if you're in a DSCR loan, you know, a 10%.
[00:27:01.160 --> 00:27:07.000] If you have $12,000, you can buy one of these homes and it should hopefully be cash flowing $250,000, $300,000, $350,000 like that.
[00:27:07.000 --> 00:27:16.920] Good turnkey companies, what they do is they go through the entire house, they gut the entire house, they rip off the roof, they put a new furnace in there.
[00:27:16.920 --> 00:27:25.560] Now, this is obviously if it's needed, but these lower-priced homes, they're like 80 years old, and yes, they're going to need even electrical.
[00:27:25.560 --> 00:27:27.320] So, they rip everything out.
[00:27:27.320 --> 00:27:29.480] And, Nick, I know you've looked into this.
[00:27:29.480 --> 00:27:36.920] So, there's an expense line item that you have to account for and also give you a quick resource.
[00:27:36.920 --> 00:27:46.680] If you go to incomebuilder.io, incomebuilder.io, you can get a free account and you can analyze properties and it'll do this for you.
[00:27:46.680 --> 00:27:49.480] But you need a capital expense reserve.
[00:27:49.480 --> 00:27:54.360] That means big ticket items, huge, large ticket items like a roof.
[00:27:54.360 --> 00:27:56.920] That's going to be 5, 10, 20 grand.
[00:27:56.920 --> 00:27:59.240] You never know how much it's going to cost to get fixed.
[00:27:59.480 --> 00:28:00.360] A furnace.
[00:28:00.360 --> 00:28:03.240] A furnace is going to be $5,000, probably $3 to $5,000.
[00:28:03.200 --> 00:28:06.600] Yeah, this is already all going to be repaired if you have a good company.
[00:28:06.760 --> 00:28:10.040] And Nick, I think we've known each other long enough.
[00:28:10.040 --> 00:28:11.160] You should be buying properties.
[00:28:11.560 --> 00:28:12.760] You should have your own properties.
[00:28:12.760 --> 00:28:14.600] You can give them to your kids, all the good stuff.
[00:28:14.600 --> 00:28:17.760] But you don't have to worry about the capital reserves.
[00:28:17.760 --> 00:28:28.720] So for five years, my daughter's property, we would normally budget, let's say out of $1,300, we'd probably budget $50,000 to $100 every single month, set it aside to take care of it.
[00:28:28.720 --> 00:28:31.040] Hey, if the roof goes bad or the furnace goes out.
[00:28:31.040 --> 00:28:36.240] Well, for at least five years, we're not going to need to worry about that because this is brand new stuff.
[00:28:36.240 --> 00:28:43.200] And then also, on top of that, here's an amazing thing: you get better clientele because it's top-notch.
[00:28:43.600 --> 00:28:45.120] You know, cabinets are ripped out.
[00:28:45.120 --> 00:28:46.400] It's a brand new kitchen.
[00:28:46.400 --> 00:28:47.360] Everything's fresh.
[00:28:47.360 --> 00:28:49.360] It feels like almost a brand new house.
[00:28:49.360 --> 00:28:54.240] So, those are a bunch of amazing reasons why you should get a turnkey company.
[00:28:54.240 --> 00:29:02.640] Now, I will say, though, even though I'm giving you all these reasons why to do it, I bought a home for $68,000, just like a turnkey company would.
[00:29:02.640 --> 00:29:11.280] I got my contractors $20,000 to get that place tip-top shape, got it tipped out, what, close to $90,000.
[00:29:11.280 --> 00:29:12.560] It's worth $130,000.
[00:29:12.560 --> 00:29:15.360] I'm renting it for $1,250 or $1,300.
[00:29:15.360 --> 00:29:18.240] So you can do it yourself as long as you're in the game.
[00:29:18.240 --> 00:29:27.520] So, the company that I'm going to give you, if you want to use the turnkey and Nick, I definitely think you should give them a call and at least talk to him, is Akron Turnkey.
[00:29:27.520 --> 00:29:34.080] Just easy enough, write in Akron Turnkey and tell them you came from me, Dustin, at Master Passive Income.
[00:29:34.080 --> 00:29:35.280] And they'll give you a couple thousand.
[00:29:35.280 --> 00:29:42.160] I think maybe I want to say it was even like $1,500 or $2,000 off of it because they're cutting out the middleman, just going right to them.
[00:29:42.160 --> 00:29:45.280] But this is a good company that my students are buying from.
[00:29:45.280 --> 00:29:48.160] And I bought three, three homes from them.
[00:29:48.160 --> 00:29:48.560] Okay.
[00:29:48.880 --> 00:29:53.440] Let me try and push back a little bit because I do see the light.
[00:29:53.440 --> 00:29:59.520] I've obviously have known lots of people who have gained financial independence through real estate, through the FinCon community, through bigger pockets.
[00:29:59.520 --> 00:30:01.160] Like it's definitely a thing.
[00:30:01.400 --> 00:30:08.680] But here, if I'm at $250 a month in positive cash flow, I've got $3,000 a year, call it.
[00:30:09.000 --> 00:30:12.680] And maybe I spent $10,000 down to get this property.
[00:30:12.680 --> 00:30:13.320] Maybe it was more.
[00:30:13.320 --> 00:30:13.960] Maybe it was less.
[00:30:13.960 --> 00:30:16.440] Okay, so it pencils out 30% cash on cash.
[00:30:16.440 --> 00:30:18.680] Like, that's really strong.
[00:30:18.680 --> 00:30:28.920] But at the same time, you just mentioned roofs, furnaces, like that $3,000 doesn't seem like a lot of breathing room for some of these capital expenses that are going to come up.
[00:30:28.920 --> 00:30:32.440] Like these properties don't magically maintain themselves over time.
[00:30:32.440 --> 00:30:35.240] There's going to be other stuff that comes up here.
[00:30:35.240 --> 00:30:36.280] And there's going to be vacancies.
[00:30:36.280 --> 00:30:37.480] There's going to be problems.
[00:30:37.480 --> 00:30:38.600] So I'm glad you're pushing back.
[00:30:38.600 --> 00:30:40.040] And it got me thinking.
[00:30:40.040 --> 00:30:47.240] I did a workshop where my students recently where I walked them through the, and we talked about this on your last episode, but I got even more dialed in.
[00:30:47.240 --> 00:30:47.800] I got the numbers.
[00:30:47.800 --> 00:30:48.680] I just pulled them up.
[00:30:48.680 --> 00:30:52.840] So the six ways you make money investing in real estate and all those things that come up.
[00:30:52.840 --> 00:30:53.960] Can I, can we, can we pause?
[00:30:53.960 --> 00:30:56.840] Like, I'm impressed you remember anything from this episode five years ago.
[00:30:56.840 --> 00:30:58.280] This is like episode 387.
[00:30:58.280 --> 00:31:00.440] It was like 300 episodes ago.
[00:31:01.240 --> 00:31:01.960] I don't know why.
[00:31:01.960 --> 00:31:03.160] I just remember talking to you about it.
[00:31:03.160 --> 00:31:05.960] I remember you having good questions as I was like, oh, let me.
[00:31:05.960 --> 00:31:10.200] So the six ways that you make money when you invest in real estate.
[00:31:10.200 --> 00:31:12.520] And I'll jump right into the first one.
[00:31:12.520 --> 00:31:13.640] The best one is cash flow.
[00:31:13.640 --> 00:31:16.280] Now, you said, okay, you know, $250 a month.
[00:31:16.280 --> 00:31:18.120] Yeah, I mean, that's a lot of money putting.
[00:31:18.120 --> 00:31:23.160] So if you put $1250 down, $12,500 down to buy this house.
[00:31:23.160 --> 00:31:36.200] No, I can see, since we're talking about the 10-year plan, if I've got 10 of these and now it's $30,000 to $50,000 a month because of, you know, rent appreciation and everything, like all of a sudden, or sorry, $30,000 to $50,000 a year.
[00:31:36.200 --> 00:31:41.400] And I have some level of diversification where I can weather a vacancy.
[00:31:41.400 --> 00:31:43.720] I can weather some expense over there.
[00:31:43.720 --> 00:31:52.800] So if you have this long-term view of it and think of it as a portfolio business, then absolutely, but it's like, it's a little bit harder to stomach when it's just one or two properties.
[00:31:52.800 --> 00:31:53.680] I'm 100% with you.
[00:31:53.680 --> 00:31:55.360] And that's why you got to scale and grow.
[00:31:55.360 --> 00:31:58.080] So the six ways you make money investing in real estate.
[00:31:58.080 --> 00:32:01.360] And this is, I'm going to give you easy, simple numbers.
[00:32:01.360 --> 00:32:12.640] If you buy a house that's worth $150,000 and you buy it right now, $150,000, and let's say it's cash flowing you three, four, $500 a month, whatever it might be.
[00:32:12.640 --> 00:32:17.920] You buy it cheaper, like the house that I bought for $68,000, fix it up for $20,000.
[00:32:17.920 --> 00:32:20.160] And then now it's worth $130,000.
[00:32:20.160 --> 00:32:23.120] Well, I'm making $550 a month of passive income.
[00:32:23.120 --> 00:32:28.160] So if you bought one property, the cash flow over 30-year time, a 30-year period.
[00:32:28.160 --> 00:32:30.160] Now, I know, remember, we talked about 10 years.
[00:32:30.160 --> 00:32:32.560] We can just, you know, figure this out afterwards.
[00:32:32.560 --> 00:32:33.600] But let me walk you through this.
[00:32:34.000 --> 00:32:48.640] Over 30 years, that $150,000 property and that you put $15,000 down, 10% down payment, cash flow over 30 years, that's if rent does not go up, which it does, but just over 30 years, that's $180,000.
[00:32:48.640 --> 00:32:53.520] And we're also accounting for the things you all talked about, like repairs, furnaces going.
[00:32:53.840 --> 00:32:56.080] That's already accounted for in our expenses.
[00:32:56.080 --> 00:33:00.160] That's not dipping into our income of $180,000.
[00:33:00.160 --> 00:33:01.760] So that's number one, cash flow.
[00:33:01.760 --> 00:33:10.400] Next one, if you buy it yourself and you don't use a turnkey company, I captured, was it $60,000 in equity when I bought the property?
[00:33:10.400 --> 00:33:11.840] Well, that's $60,000.
[00:33:11.840 --> 00:33:13.040] Forced appreciation.
[00:33:13.040 --> 00:33:14.880] I put $20,000 into it.
[00:33:15.040 --> 00:33:18.320] That made it worth, I think, another $30,000 more.
[00:33:18.320 --> 00:33:20.160] And then, so that makes value go up.
[00:33:20.160 --> 00:33:21.200] Market appreciation.
[00:33:21.200 --> 00:33:26.800] And I kid you not, I had to double-check this because it sounds weird, but it's true.
[00:33:26.800 --> 00:33:32.120] Every 15 years, your property doubles in value.
[00:33:29.680 --> 00:33:36.840] So in 15 years, it's going to be $150,000 to $300,000.
[00:33:37.160 --> 00:33:38.680] And then after that, it doubles again.
[00:33:38.680 --> 00:33:41.720] It'll be $600,000 after that, 15 years after that.
[00:33:41.720 --> 00:33:43.400] So 30 years, you're going to have a lot more money.
[00:33:43.400 --> 00:33:51.000] The mortgage buy down: here's the great thing: your tenants are paying for the taxes, insurance, your mortgage, everything.
[00:33:51.000 --> 00:33:53.800] So even your principal and interest, they're paying for that.
[00:33:53.800 --> 00:33:55.800] So the mortgage is going down.
[00:33:55.800 --> 00:33:59.080] They're paying, and the interest is going down on top of that.
[00:33:59.080 --> 00:34:03.480] And then the tax advantages, I pay almost no money in tax advantages.
[00:34:03.480 --> 00:34:15.960] And in the end, $15,000 of your money right now for just one property without even accounting for rent increases, you're over $650,000 that you're going to pocket in this one transaction.
[00:34:15.960 --> 00:34:19.640] And again, all those expenses are accounted for from repairs and all that sort of stuff.
[00:34:19.640 --> 00:34:20.760] That's just one property.
[00:34:20.760 --> 00:34:23.080] And then we scale it and we do it over and over again.
[00:34:23.080 --> 00:34:24.280] So push back.
[00:34:24.520 --> 00:34:25.720] Where am I missing here?
[00:34:25.720 --> 00:34:26.680] No, this is good.
[00:34:27.000 --> 00:34:40.520] You painted this good picture, but the road to real estate wealth is paved with burnt-out landlords, people who have had their tenants changing the oil of their motorcycle and the carpet in the living room.
[00:34:41.480 --> 00:34:51.400] You know, a friend of mine, my former accountant, Josh from CPA on Fire, he posts these pictures of these trashed houses and he's like, well, this is what I woke up to this morning.
[00:34:51.640 --> 00:34:56.200] Here's a text, or the SWAT team is outside the apartment today.
[00:34:56.200 --> 00:34:58.920] And so it's like that kind of stuff happens.
[00:34:58.920 --> 00:35:05.320] And so what separates you and your students from everybody who is like, dude, I tried it.
[00:35:05.320 --> 00:35:25.040] And for whatever reason, the tenants that I attracted, the market, the neighborhood, the hurricane that came through, like bad stuff happens where it's like, if I could just, you know, buy a portion of the 500 largest companies in America and just let those CEOs go do their thing, then I sleep a little easier at night.
[00:35:25.040 --> 00:35:29.760] But there's two sides to it because it's like higher risk, higher reward.
[00:35:29.760 --> 00:35:34.160] And I think you mentioned the leverage and the tax advantage and all that stuff that goes into it.
[00:35:34.160 --> 00:35:35.440] But what breaks this plan?
[00:35:35.440 --> 00:35:37.440] What breaks landlords down here?
[00:35:37.440 --> 00:35:44.800] Dustin's response, plus his take on whether or not we're in a real estate bubble, coming up right after this.
[00:35:45.120 --> 00:35:47.840] I'm excited to partner with OpenPhone for this episode.
[00:35:47.840 --> 00:35:57.360] OpenPhone is the number one business phone system that streamlines and scales your customer communication for both calls and texts, all in one easy-to-use centralized hub.
[00:35:57.360 --> 00:36:02.160] But before OpenPhone was sponsoring podcasts, they took a more guerrilla marketing approach.
[00:36:02.320 --> 00:36:03.760] You probably don't remember this.
[00:36:03.760 --> 00:36:11.040] This is a while back, but when we just started OpenPhone, one of the ways that we got our first customers is through Facebook groups.
[00:36:11.040 --> 00:36:14.000] And I joined a bunch of Facebook groups, including yours.
[00:36:14.240 --> 00:36:28.960] Thank you for not kicking me out, but I posted a couple of times and I actually remember seeing there were some of your listeners and folks in your community interested in solving the problem we solve, which is not using your personal phone number for work.
[00:36:28.960 --> 00:36:32.720] And those posts got us some of our first customers.
[00:36:32.720 --> 00:36:33.520] So thank you.
[00:36:33.520 --> 00:36:35.200] It's a full circle moment.
[00:36:35.200 --> 00:36:36.240] Oh, that's super fun.
[00:36:36.240 --> 00:36:36.960] Very cool.
[00:36:36.960 --> 00:36:39.120] That's Doreena, the co-founder of OpenPhone.
[00:36:39.120 --> 00:36:41.360] And sure enough, her posts are still there.
[00:36:41.360 --> 00:36:47.600] OpenPhone is offering Side Hustle Show listeners 20% off your first six months at openphone.com/slash sidehustle.
[00:36:47.600 --> 00:36:52.960] That's O-P-E-N-P-H-O-N-E openphone.com/slash sidehustle.
[00:36:52.960 --> 00:36:58.080] And if you have existing numbers with another service, OpenPhone will port them over at no extra charge.
[00:36:58.080 --> 00:37:04.280] With our partner, Mint Mobile, you can get the wireless coverage and speed you're used to, but for way less money.
[00:36:59.840 --> 00:37:06.280] I think that's a win we could all use right about now.
[00:37:06.600 --> 00:37:08.200] And you can keep your same phone number.
[00:37:08.200 --> 00:37:17.000] Plus, for a limited time, Mint Mobile is offering Side Hustle Show listeners three months of unlimited premium wireless service for just 15 bucks a month.
[00:37:17.000 --> 00:37:24.120] All Mint plans come with high-speed data and unlimited talk and text delivered on the nation's largest 5G network.
[00:37:24.120 --> 00:37:27.320] I've been a customer since 2019 and haven't looked back.
[00:37:27.320 --> 00:37:30.280] This year, skip breaking a sweat and breaking the bank.
[00:37:30.280 --> 00:37:39.560] Get this new customer offer and your three-month unlimited wireless plan for just $15 a month at mintmobile.com slash sidehustle.
[00:37:39.560 --> 00:37:43.240] That's mintmobile.com slash sidehustle.
[00:37:43.240 --> 00:37:47.240] Upfront payment of $45 required, equivalent to $15 per month.
[00:37:47.240 --> 00:37:50.680] Limited time, new customer offer for first three months only.
[00:37:50.680 --> 00:37:54.440] Speeds may slow above 35 gigabytes on unlimited plan.
[00:37:54.440 --> 00:37:55.960] Taxes and fees extra.
[00:37:55.960 --> 00:37:58.920] See Mint Mobile for details.
[00:38:00.200 --> 00:38:00.840] Awesome.
[00:38:00.840 --> 00:38:03.000] No, that's an amazing question.
[00:38:03.000 --> 00:38:10.600] And I'll even say, even like your SP idea, that's great, but you have to have a lot of capital in order to live on it.
[00:38:10.600 --> 00:38:17.640] What I'm saying is with 10 properties, you can live on that income and you get equity growth on top of that.
[00:38:17.640 --> 00:38:23.880] But here's what breaks landlords: they buy their first property and they start pulling their hair out because they're not doing it right.
[00:38:23.880 --> 00:38:26.760] They're not hiring the right people or getting the right people to run the business.
[00:38:26.760 --> 00:38:30.280] They're finding wrong tenants that are not going to take care of their property.
[00:38:30.280 --> 00:38:32.920] They might even bought in a place that nobody's going to manage.
[00:38:32.920 --> 00:38:33.880] So that's number one.
[00:38:33.880 --> 00:38:34.280] Okay.
[00:38:34.280 --> 00:38:36.600] We build the entire business, get the experts.
[00:38:36.600 --> 00:38:38.040] Like Redfin's not an expert.
[00:38:38.040 --> 00:38:40.520] Trulia, Zillow, those are not experts.
[00:38:40.520 --> 00:38:41.640] Who are experts?
[00:38:41.640 --> 00:38:45.440] It's the people that live there on the ground in that city.
[00:38:45.440 --> 00:38:48.960] They're the experts going to be talking you through which areas are great.
[00:38:44.840 --> 00:38:51.040] And so far, this is all side unseen.
[00:38:51.120 --> 00:38:54.800] Like your daughter's house, like, did you guys fly up there to do a final walkthrough or anything?
[00:38:54.800 --> 00:38:56.000] It's all remote.
[00:38:56.000 --> 00:38:56.640] Not at all.
[00:38:56.640 --> 00:39:00.320] Out of the 30-plus properties that I own, honestly, even the two apartment complexes.
[00:39:00.320 --> 00:39:02.880] So the 30-plus properties, I've seen one of them before I bought it.
[00:39:03.200 --> 00:39:04.480] And I haven't seen the other ones.
[00:39:04.480 --> 00:39:06.480] I just see pictures and I have experts.
[00:39:06.720 --> 00:39:08.960] The other apartment complexes, I have experts.
[00:39:08.960 --> 00:39:11.520] Now, I did walk through one of them because I live in the city.
[00:39:11.520 --> 00:39:12.160] So I walked through it.
[00:39:12.240 --> 00:39:13.840] Saw that, hey, that's a great property.
[00:39:13.840 --> 00:39:17.680] But for single-family homes, especially now, in fact, I've coached thousands of students.
[00:39:17.680 --> 00:39:27.280] I want to say I know of maybe a dozen students that have flown to the city in order to look at the properties because here's what we do.
[00:39:27.280 --> 00:39:33.120] Just like you build any business, any side hustle, you get the experts doing the work for you.
[00:39:33.120 --> 00:39:34.640] And here's the key thing.
[00:39:34.640 --> 00:39:42.080] Remember, if you're a beginner, you don't build a business if you don't follow what I most people just buy a property and they try to hope it works out.
[00:39:42.080 --> 00:39:50.800] But what I teach all my students to do, we build the entire business first, and then we have multiple cheap people check each other's work.
[00:39:50.800 --> 00:39:52.800] We don't just say, you know, oh, we got a contractor.
[00:39:52.800 --> 00:39:53.280] Okay, good.
[00:39:53.280 --> 00:39:54.160] And here's your money.
[00:39:54.160 --> 00:39:56.480] And then they run off and they didn't do any work.
[00:39:56.480 --> 00:40:01.600] No, we have multiple people analyze everything that's going on touching that property.
[00:40:01.600 --> 00:40:04.400] Now, they send you pictures, they give you explanations.
[00:40:04.400 --> 00:40:08.160] I double-check what they say with other people, even my property manager.
[00:40:08.160 --> 00:40:09.840] I have, let's say, a realtor.
[00:40:09.840 --> 00:40:11.920] Hey, realtor, can you go by and check this out?
[00:40:11.920 --> 00:40:14.960] And I'll pay them, you know, 50 bucks or whatever, or an inspector.
[00:40:15.280 --> 00:40:16.800] So we always have everybody check.
[00:40:16.800 --> 00:40:23.600] So the first one, if you're starting, the roadblock or the problems will come and you'll pull your hair out and you'll give up if you don't build a business first.
[00:40:23.840 --> 00:40:24.880] Now, here's the next step.
[00:40:24.880 --> 00:40:27.440] Here's where the next roadblock comes.
[00:40:27.440 --> 00:40:35.560] It's when somebody goes from a big beginner and they get three or four properties and they have not built the business like I've told them to.
[00:40:35.560 --> 00:40:41.560] And they have, let's say, four or five, maybe even eight properties and they really don't have time.
[00:40:41.560 --> 00:40:43.400] Maybe they might find the right properties.
[00:40:43.400 --> 00:40:44.920] Maybe they might be making some money.
[00:40:44.920 --> 00:40:45.960] They're mom and pop.
[00:40:45.960 --> 00:40:47.640] They're running the business themselves.
[00:40:47.640 --> 00:40:49.080] They're finding the tenants.
[00:40:49.080 --> 00:40:50.440] They're collecting the rents.
[00:40:50.440 --> 00:40:52.120] They're managing the repairs.
[00:40:52.120 --> 00:40:58.280] They're doing all this on top of having a family, on top of having a job, maybe even a great side hustle.
[00:40:58.280 --> 00:41:01.160] And so they're running ragged because they don't have the time.
[00:41:01.160 --> 00:41:03.080] Here's the next, that's the next roadblock.
[00:41:03.080 --> 00:41:04.520] But how do you get past that?
[00:41:04.520 --> 00:41:06.440] We have to learn how to scale.
[00:41:06.440 --> 00:41:21.400] And that is by when you do it right the first time, by building the business, getting the right people, then we implement the right systems, procedures, and processes in place that are going to make sure that we can scale because we're not taking our time to run the business.
[00:41:21.400 --> 00:41:22.040] No, this is good.
[00:41:22.040 --> 00:41:34.920] So it sounds like the maybe the biggest mistake that people make is just not having the right team members or the right experts in place, the boots on the ground to help you out when things go wrong or to prevent things from going wrong in the first place.
[00:41:34.920 --> 00:41:35.560] 100%.
[00:41:35.560 --> 00:41:39.880] To make sure that you don't get bad tenants too, there's just a key piece of the process.
[00:41:39.880 --> 00:41:41.240] Well, I just said the word.
[00:41:41.240 --> 00:41:43.960] Systems, procedures, and processes.
[00:41:43.960 --> 00:41:45.480] We have to have those any business.
[00:41:45.480 --> 00:41:47.800] Your side hustle business, you have that as well.
[00:41:47.800 --> 00:41:49.160] Same thing with a real estate investor.
[00:41:49.160 --> 00:41:56.040] We need to stop being an investor, become an income builder, which means we're making money every single month, and have that business run itself.
[00:41:56.040 --> 00:41:58.280] And so we find good tenants.
[00:41:58.280 --> 00:42:00.200] I hate it when my rent's late.
[00:42:00.200 --> 00:42:01.400] I hate that.
[00:42:01.400 --> 00:42:03.240] So I don't treat anybody differently.
[00:42:03.240 --> 00:42:04.760] I treat everybody the exact same.
[00:42:04.760 --> 00:42:07.000] This is a process that you put in place in your business.
[00:42:07.000 --> 00:42:09.800] Rent's due on the first, late after the third.
[00:42:09.800 --> 00:42:12.520] On the fourth, we put a three-day notice on their door.
[00:42:12.520 --> 00:42:13.160] This is legal.
[00:42:13.160 --> 00:42:14.040] You have to do this.
[00:42:14.040 --> 00:42:20.320] And then after the third day, if they have not after the three-day notice, that's like day six, I think, six or seven.
[00:42:14.840 --> 00:42:24.960] If they have not paid the rent, you add on with that three-day notice, you add on the late fee.
[00:42:24.960 --> 00:42:27.760] But if they have not paid the rent, we start the eviction process.
[00:42:27.760 --> 00:42:31.520] Just as cookie-cutter, as straightforward as possible.
[00:42:31.520 --> 00:42:33.520] Number one, that gets them to pay the rent.
[00:42:33.520 --> 00:42:35.840] Number two, it helps them to be on time and regular.
[00:42:35.840 --> 00:42:39.920] Number three, if they're not going to pay the rent, you get them out as fast as possible.
[00:42:39.920 --> 00:42:42.960] And number four, you just stop paying your mortgage.
[00:42:42.960 --> 00:42:46.880] Will the bank say, hey, you call up your bank, hey, this is what I've got this before.
[00:42:46.880 --> 00:42:50.000] You call up your bank, hey, bank, my son got arrested for the second time.
[00:42:50.000 --> 00:42:51.840] I had to use the money for bailout for the mortgage.
[00:42:52.240 --> 00:42:54.720] Would you not start the foreclosure process?
[00:42:54.720 --> 00:42:55.840] Because I don't have the money.
[00:42:55.840 --> 00:42:56.800] No, you wouldn't.
[00:42:56.800 --> 00:42:58.720] The bank would say, no, we have to start it.
[00:42:58.720 --> 00:43:05.760] So what we do is we put in systems, procedures, and process, treat it and run it like a business and just start the eviction process.
[00:43:05.760 --> 00:43:07.040] You're still going to get some outliers.
[00:43:07.040 --> 00:43:08.320] We're going to have problems.
[00:43:08.320 --> 00:43:11.120] But usually all my tenants, they just move out when it's time to move out.
[00:43:11.120 --> 00:43:12.000] I don't have to evict them.
[00:43:12.000 --> 00:43:16.480] I don't have holes in the walls, dog poop everywhere, which happened to a lot of people.
[00:43:16.480 --> 00:43:23.760] So we find the right people and then we treat them well, take care of the property, but we let them know, hey, this is, we're taking everything seriously.
[00:43:23.760 --> 00:43:24.080] Yeah.
[00:43:24.080 --> 00:43:29.440] Get out your crystal ball and I want to ask if we're in a housing bubble right now.
[00:43:29.440 --> 00:43:31.120] Ooh, okay.
[00:43:31.440 --> 00:43:34.000] So here is what I'm seeing.
[00:43:34.000 --> 00:43:42.640] The commercial real estate, which is apartment complexes, especially office complexes, that's definitely, that's going to come to a head now because a bubble happened.
[00:43:42.800 --> 00:43:53.520] I'll get to Resident Natural in just a second, but the commercial, like a large apartment complexes, syndications, which is basically somebody reselling somebody else's deal, just trying to raise money.
[00:43:53.520 --> 00:43:55.040] So, and they don't even invest their own money.
[00:43:55.040 --> 00:43:55.920] It's not even their own deal.
[00:43:55.920 --> 00:43:57.920] They're just trying to take part in the action.
[00:43:57.920 --> 00:43:59.840] Well, what happens with those apartment complexes?
[00:44:00.120 --> 00:44:02.760] Somebody bought it and then five years later, they have to sell it.
[00:44:02.760 --> 00:44:04.200] They have to because of financing.
[00:44:04.200 --> 00:44:05.720] And then five years later, they have to sell it again.
[00:44:05.720 --> 00:44:07.400] Five years later, they have to sell it again.
[00:44:07.400 --> 00:44:09.560] And so they were, this is the bubble.
[00:44:09.560 --> 00:44:14.360] What happened is they were bidding up properties and now they're stuck.
[00:44:14.360 --> 00:44:17.960] So they're not giving money to their investors and they're not, and they might be taking more money.
[00:44:17.960 --> 00:44:18.360] I don't know.
[00:44:18.360 --> 00:44:27.320] That's why the deals that you and I have been in in these apartment complexes, we're getting 60% of the market value because these people are getting hurt and they have to sell.
[00:44:27.320 --> 00:44:32.200] So I think commercial real estate is definitely a bubble because of how it's been bought up.
[00:44:32.200 --> 00:44:35.400] Here's the next bubble when it comes to real estate and residential.
[00:44:35.400 --> 00:44:38.920] So this is my prediction, my crystal ball.
[00:44:38.920 --> 00:44:40.600] Here's where the bubble is.
[00:44:40.600 --> 00:44:43.560] Airbnb, short-term properties.
[00:44:43.560 --> 00:44:52.040] In Arizona alone, there is 70,000 short-term rental properties in Arizona.
[00:44:52.040 --> 00:44:53.240] 70,000.
[00:44:53.240 --> 00:45:02.200] And keep in mind, these are homes that were long-term rentals or primary residences for somebody to live in.
[00:45:02.200 --> 00:45:03.240] Those are now off the market.
[00:45:03.240 --> 00:45:06.120] That's why rents skyrocketed because there were no properties.
[00:45:06.120 --> 00:45:07.320] Now, here's the thing.
[00:45:07.320 --> 00:45:13.640] With that many properties, the amount of money, and these people, they were following these TikTok gurus on there.
[00:45:13.720 --> 00:45:14.840] Hey, I got three properties.
[00:45:14.840 --> 00:45:18.360] I make 80 grand a month and all these, they do all these fancy things.
[00:45:18.360 --> 00:45:22.120] Well, what's happening because it's everywhere, this is happening everywhere.
[00:45:22.120 --> 00:45:29.160] Airbnb is having trouble is the prices are coming down on every property that's for rent on Airbnb.
[00:45:29.160 --> 00:45:31.400] They can't get what they hoped they would.
[00:45:31.400 --> 00:45:36.200] So they were, let's say, you know, let's say bought a $500,000 home and it's normally $500,000.
[00:45:36.200 --> 00:45:39.240] And they paid $550,000 because they knew, oh, I could rent it on Airbnb.
[00:45:39.240 --> 00:45:40.520] I'll make all this much money.
[00:45:40.520 --> 00:45:41.720] So they way overpaid.
[00:45:41.720 --> 00:45:43.800] The price went up on the property.
[00:45:43.800 --> 00:45:48.640] Well, as the price went up, they eventually have this huge mortgage that they're going to have to pay.
[00:45:44.840 --> 00:45:54.240] And if they can't rent it, meaning for, let's say, people, the economy goes down.
[00:45:54.480 --> 00:45:57.600] We see the economy slowing down, inflation, everything is hurting people.
[00:45:57.600 --> 00:45:59.600] So people travel a lot less.
[00:45:59.600 --> 00:46:09.120] That, as well as supply, there's a way oversupply of properties that makes the amount of money they can make per month in rent from the short term, it's going to be hurting them.
[00:46:09.120 --> 00:46:10.720] So they're going to have to have this mortgage payment.
[00:46:10.720 --> 00:46:21.440] So I think eventually in the next year or two, we're going to see a lot of properties foreclose because these Airbnb properties were way overpaid and they're not making money and it's going to hurt the economy in the long run.
[00:46:21.440 --> 00:46:22.640] So that's my prediction.
[00:46:22.640 --> 00:46:24.640] Commercial real estate, definitely bubble.
[00:46:24.640 --> 00:46:27.760] Yeah, particularly in like tourist areas like high travel areas.
[00:46:27.760 --> 00:46:28.240] Yes.
[00:46:28.240 --> 00:46:30.640] And I would say the, well, I'll give you an example.
[00:46:30.640 --> 00:46:35.600] I have an Airbnb in Murfreesboro, Tennessee, which is just south of Nashville.
[00:46:35.600 --> 00:46:37.440] I was going to ask if you had any short-term rentals.
[00:46:37.440 --> 00:46:41.040] Yeah, I have short-term and mid-term, but predominantly long-term.
[00:46:41.040 --> 00:46:48.160] I love boring, old, long-term, and I just make money without even thinking, without worrying about turnover and the properties.
[00:46:48.160 --> 00:46:48.640] Yeah.
[00:46:48.640 --> 00:46:50.400] So Nashville, a glut.
[00:46:50.400 --> 00:46:53.120] There's so many in there, and it's just, it's terrible.
[00:46:53.120 --> 00:46:54.800] It's hard to break into that market.
[00:46:54.800 --> 00:46:56.320] And so eventually something's going to happen there.
[00:46:56.320 --> 00:46:59.600] But Murfreesboro is like 40 minutes south of it.
[00:46:59.600 --> 00:47:03.360] And so people still, like, it's a big city, 130,000 people here.
[00:47:03.360 --> 00:47:04.640] People still have weddings.
[00:47:04.640 --> 00:47:05.520] There are still deaths.
[00:47:05.520 --> 00:47:06.800] There are still graduations.
[00:47:06.800 --> 00:47:08.960] There are still reasons to come into town.
[00:47:08.960 --> 00:47:15.600] And so, you know, if you're getting a short-term property in like, you know, a town that has maybe 10,000 people, that's going to be a little harder.
[00:47:15.600 --> 00:47:20.400] But these outlying cities that people overlooked, you can buy some good properties.
[00:47:20.400 --> 00:47:20.880] Okay.
[00:47:20.880 --> 00:47:21.200] Cool.
[00:47:21.200 --> 00:47:25.360] I appreciate you sharing where the market might be headed and some of these bigger macro forces.
[00:47:25.360 --> 00:47:34.360] Because, of course, at a certain point, as we've seen in a lot of cities, the municipalities come in and say, hey, we're going to put a stop on this short-term rental game because you're taking up all our housing supply.
[00:47:34.440 --> 00:47:37.240] That's not great for the people who actually want to live here long term.
[00:47:37.240 --> 00:47:38.600] But very cool.
[00:47:38.600 --> 00:47:40.040] Dustin, this has been awesome.
[00:47:40.120 --> 00:47:52.200] Really appreciate you kind of sharing this roadmap for year one, year two, and beyond, what you can do with some systems and processes and team in place on the real estate side, on the rental property side.
[00:47:52.200 --> 00:47:53.560] What's next for you?
[00:47:53.560 --> 00:47:55.800] You've got masterpassiveincome.com.
[00:47:55.800 --> 00:47:57.080] You've got the podcast over there.
[00:47:57.080 --> 00:48:01.400] I want to encourage people to check out Dustin's free real estate investing starter course.
[00:48:01.400 --> 00:48:03.240] We'll link that up in the show notes.
[00:48:03.240 --> 00:48:10.360] And you've got your own conference, probably on year three or four of RubeCon Real Estate Wealth Builders Conference, if I'm getting that correct.
[00:48:11.160 --> 00:48:12.760] What's got you excited for the rest of this year?
[00:48:12.760 --> 00:48:13.400] You sure are.
[00:48:13.400 --> 00:48:14.440] You got everything correct, man.
[00:48:14.440 --> 00:48:15.000] Good job.
[00:48:15.000 --> 00:48:15.240] Yeah.
[00:48:15.240 --> 00:48:21.000] So my goal is to help 1 million people to invest in real estate because I quit my job in 2016.
[00:48:21.000 --> 00:48:28.360] And then as I started coaching people, because they just asking me, so friends and family members, I started coaching people and then realized how much fun it was.
[00:48:28.360 --> 00:48:30.120] Number one, 

Prompt 2: Key Takeaways

Now please extract the key takeaways from the transcript content I provided.

Extract the most important key takeaways from this part of the conversation. Use a single sentence statement (the key takeaway) rather than milquetoast descriptions like "the hosts discuss...". 

Limit the key takeaways to a maximum of 3. The key takeaways should be insightful and knowledge-additive. 

IMPORTANT: Return ONLY valid JSON, no explanations or markdown. Ensure:
- All strings are properly quoted and escaped
- No trailing commas
- All braces and brackets are balanced
Format: {"key_takeaways": ["takeaway 1", "takeaway 2"]}

Prompt 3: Segments

Now identify 2-4 distinct topical segments from this part of the conversation.

For each segment, identify:
- Descriptive title (3-6 words)  
- START timestamp when this topic begins (HH:MM:SS format)
- Double check that the timestamp is accurate - a timestamp will NEVER be greater than the total length of the audio
- Most important Key takeaway from that segment. Key takeaway must be specific and knowledge-additive.
- Brief summary of the discussion

IMPORTANT: The timestamp should mark when the topic/segment STARTS, not a range. Look for topic transitions and conversation shifts.

Return ONLY valid JSON. Ensure all strings are properly quoted, no trailing commas:
{
  "segments": [
    {
      "segment_title": "Topic Discussion", 
      "timestamp": "01:15:30",
      "key_takeaway": "main point from this segment",
      "segment_summary": "brief description of what was discussed"
    }
  ]
}

Timestamp format: HH:MM:SS (e.g., 00:05:30, 01:22:45) marking the START of each segment.

Prompt 4: Media Mentions

Now scan the transcript content I provided for ACTUAL mentions of specific media titles:

Find explicit mentions of:
- Books (with specific titles)
- Movies (with specific titles)  
- TV Shows (with specific titles)
- Music/Songs (with specific titles)

DO NOT include:
- Websites, URLs, or web services
- Other podcasts or podcast names

IMPORTANT: 
- Only include items explicitly mentioned by name. Do not invent titles.
- Valid categories are: "Book", "Movie", "TV Show", "Music"
- Include the exact phrase where each item was mentioned
- Find the nearest proximate timestamp where it appears in the conversation
- THE TIMESTAMP OF THE MEDIA MENTION IS IMPORTANT - DO NOT INVENT TIMESTAMPS AND DO NOT MISATTRIBUTE TIMESTAMPS
- Double check that the timestamp is accurate - a timestamp will NEVER be greater than the total length of the audio
- Timestamps are given as ranges, e.g. 01:13:42.520 --> 01:13:46.720. Use the EARLIER of the 2 timestamps in the range.

Return ONLY valid JSON. Ensure all strings are properly quoted and escaped, no trailing commas:
{
  "media_mentions": [
    {
      "title": "Exact Title as Mentioned",
      "category": "Book",
      "author_artist": "N/A",
      "context": "Brief context of why it was mentioned",
      "context_phrase": "The exact sentence or phrase where it was mentioned",
      "timestamp": "estimated time like 01:15:30"
    }
  ]
}

If no media is mentioned, return: {"media_mentions": []}

Prompt 5: Context Setup

You are an expert data extractor tasked with analyzing a podcast transcript. 
I will provide you with part 2 of 2 from a podcast transcript. 
I will then ask you to extract different types of information from this content in subsequent messages. Please confirm you have received and understood the transcript content.

Transcript section:
eciate you sharing where the market might be headed and some of these bigger macro forces.
[00:47:25.360 --> 00:47:34.360] Because, of course, at a certain point, as we've seen in a lot of cities, the municipalities come in and say, hey, we're going to put a stop on this short-term rental game because you're taking up all our housing supply.
[00:47:34.440 --> 00:47:37.240] That's not great for the people who actually want to live here long term.
[00:47:37.240 --> 00:47:38.600] But very cool.
[00:47:38.600 --> 00:47:40.040] Dustin, this has been awesome.
[00:47:40.120 --> 00:47:52.200] Really appreciate you kind of sharing this roadmap for year one, year two, and beyond, what you can do with some systems and processes and team in place on the real estate side, on the rental property side.
[00:47:52.200 --> 00:47:53.560] What's next for you?
[00:47:53.560 --> 00:47:55.800] You've got masterpassiveincome.com.
[00:47:55.800 --> 00:47:57.080] You've got the podcast over there.
[00:47:57.080 --> 00:48:01.400] I want to encourage people to check out Dustin's free real estate investing starter course.
[00:48:01.400 --> 00:48:03.240] We'll link that up in the show notes.
[00:48:03.240 --> 00:48:10.360] And you've got your own conference, probably on year three or four of RubeCon Real Estate Wealth Builders Conference, if I'm getting that correct.
[00:48:11.160 --> 00:48:12.760] What's got you excited for the rest of this year?
[00:48:12.760 --> 00:48:13.400] You sure are.
[00:48:13.400 --> 00:48:14.440] You got everything correct, man.
[00:48:14.440 --> 00:48:15.000] Good job.
[00:48:15.000 --> 00:48:15.240] Yeah.
[00:48:15.240 --> 00:48:21.000] So my goal is to help 1 million people to invest in real estate because I quit my job in 2016.
[00:48:21.000 --> 00:48:28.360] And then as I started coaching people, because they just asking me, so friends and family members, I started coaching people and then realized how much fun it was.
[00:48:28.360 --> 00:48:30.120] Number one, because I enjoyed just talking to people.
[00:48:30.360 --> 00:48:33.240] Hopefully it comes across on my, you know, I get excited talking about this stuff.
[00:48:33.240 --> 00:48:36.520] But then I had plenty of free time, you know, 40 plus hours of my life back.
[00:48:36.520 --> 00:48:43.000] And so what's up next for me is getting even bigger into my own personal real estate investing.
[00:48:43.000 --> 00:48:46.600] I, I, building master passive income coaching people just took up time.
[00:48:46.600 --> 00:48:48.120] So I, and I had plenty of properties.
[00:48:48.120 --> 00:48:50.040] I didn't really, so I'm going to be buying more properties.
[00:48:50.040 --> 00:48:51.320] When is enough enough?
[00:48:51.320 --> 00:48:52.840] Like, do you struggle with this too?
[00:48:52.840 --> 00:48:54.200] Like the goalpost keeps moving.
[00:48:54.200 --> 00:48:55.640] You're like, oh, I got 30 doors.
[00:48:55.640 --> 00:48:56.520] Let's get to 50.
[00:48:56.520 --> 00:48:57.480] Like, but why?
[00:48:57.480 --> 00:49:00.280] Like, if you don't need it, why, why go through it?
[00:49:00.280 --> 00:49:01.400] So great point.
[00:49:01.400 --> 00:49:09.000] So for me, once I got to 30, I think 33 or something like that, I had enough money coming in and it wasn't a drive, like it wasn't driving factor.
[00:49:09.000 --> 00:49:15.680] But here's an amazing thing: I started realizing I should buy more properties, but I didn't really need to.
[00:49:14.840 --> 00:49:18.160] But then I realized, oh my goodness, I got five kids.
[00:49:18.480 --> 00:49:20.240] Why don't I help them to buy?
[00:49:20.240 --> 00:49:27.920] Or why don't I buy more so I can either give them, give to them or just help them to buy their properties and go that route.
[00:49:27.920 --> 00:49:33.520] So now it's growing because I have five kids to be able to make sure that they have, you know, 10 properties each.
[00:49:33.520 --> 00:49:36.720] That'd be another 50 properties that we're all working together to buy.
[00:49:36.720 --> 00:49:37.120] Yeah.
[00:49:37.120 --> 00:49:37.760] Okay.
[00:49:37.760 --> 00:49:38.160] Yeah.
[00:49:38.160 --> 00:49:39.920] What a, what a legacy to leave behind.
[00:49:39.920 --> 00:49:40.240] Yeah.
[00:49:40.240 --> 00:49:51.280] And we, we kind of just touched on it briefly, but kind of recycling the equity where it's like, you know, at a certain point, plus appreciation, now I can get a loan against this existing property and put that into the next thing.
[00:49:51.280 --> 00:49:55.840] And at a certain point, there's a flywheel that starts to spin.
[00:49:55.840 --> 00:49:58.800] And I get the sense that it's kind of, you get a kick out of it.
[00:49:58.800 --> 00:50:01.680] It's a fun game for you and this whole legacy factor too.
[00:50:01.680 --> 00:50:02.240] Absolutely.
[00:50:02.240 --> 00:50:03.680] It's so much fun.
[00:50:03.680 --> 00:50:04.240] Yeah.
[00:50:04.240 --> 00:50:05.840] But one other quick thing I want to share with you.
[00:50:05.840 --> 00:50:07.280] I don't think I told you about it.
[00:50:07.280 --> 00:50:11.120] So, and I just mentioned it earlier, incomebuilder.io.
[00:50:11.120 --> 00:50:15.440] Incomebuilder.io is my new software that I'm creating that is right now.
[00:50:15.440 --> 00:50:16.000] It's free.
[00:50:16.000 --> 00:50:18.880] So for right now, for a limited time, you can get in there for free.
[00:50:18.880 --> 00:50:24.960] And I'm building this out because I realized, not that there wasn't any good software, because there are plenty of good software.
[00:50:24.960 --> 00:50:26.720] This was like a deal analyzer tool.
[00:50:26.720 --> 00:50:27.840] So it's even more than that.
[00:50:27.840 --> 00:50:28.480] Yeah, that's it.
[00:50:28.560 --> 00:50:37.760] So right now it's, we started with analyzing deals because that's the number one thing that is easy to jump into and it helps people to make sure they're getting wins.
[00:50:37.760 --> 00:50:44.720] And so it's green light deal analyzer is basically what it's called, where you have, if it fits this criteria, you're going to have a green light.
[00:50:44.720 --> 00:50:46.160] If it doesn't, you're going to have a red light.
[00:50:46.160 --> 00:50:50.800] We're going to have AI to kind of walk you through how to actually make sure you're getting all green lights.
[00:50:50.800 --> 00:50:51.760] But that's number one.
[00:50:51.760 --> 00:50:53.760] But here's the thing: you're just analyzing.
[00:50:53.760 --> 00:50:55.440] That's just a tip of the iceberg.
[00:50:55.440 --> 00:51:05.960] All my students, I coach them how to find properties, how to analyze properties, how to finance properties, how to get insurance for properties, how to manage the properties, how to do accounting for your properties.
[00:51:06.360 --> 00:51:11.160] And I thought, I want a software that walks a property, not the person, but the property.
[00:51:11.160 --> 00:51:18.600] So, if you have, you're a user, you create a property, you find a property through my software, you analyze it, but it's a portfolio.
[00:51:18.680 --> 00:51:21.960] I'm trying to gamify it too, where it's like, you don't need to go for me for coaching.
[00:51:21.960 --> 00:51:23.080] You just follow the steps.
[00:51:23.080 --> 00:51:24.200] Like, what's the next step?
[00:51:24.200 --> 00:51:25.080] Here's the next step.
[00:51:25.080 --> 00:51:29.400] Because, again, like I said, I created a system, a business that I created over and over again.
[00:51:29.400 --> 00:51:34.920] So, we're going to have it to where you're even collecting rents, you're managing your portfolio in this app.
[00:51:34.920 --> 00:51:37.480] And my goal is to help people become an income builder.
[00:51:37.480 --> 00:51:38.040] Yeah, yeah, yeah.
[00:51:38.120 --> 00:51:39.800] You get that flywheel spinning for sure.
[00:51:40.120 --> 00:51:41.800] Well, this has been really cool.
[00:51:41.800 --> 00:51:49.240] You definitely got me thinking harder about adding some direct real estate ownership back into the portfolio.
[00:51:49.240 --> 00:51:50.040] It's been a long time.
[00:51:50.040 --> 00:51:51.800] So, there's that.
[00:51:52.040 --> 00:51:54.440] I'll chalk that up as a win for Dustin.
[00:51:54.440 --> 00:51:56.120] Not that we were trying to have any sort of debate here.
[00:51:56.120 --> 00:52:00.440] But let's wrap this thing up with your number one tip for side hustle nation 2025.
[00:52:00.440 --> 00:52:02.440] Edition does not have to be real estate related.
[00:52:02.440 --> 00:52:04.440] You got side hustles on side hustles here.
[00:52:04.440 --> 00:52:10.760] The number one tip I would give everybody is to honestly, it's never give up.
[00:52:10.760 --> 00:52:12.840] If you give up, then you fail twice.
[00:52:12.840 --> 00:52:20.600] Like, let's say you buy a house and you do it wrong, or you start a side hustle and you do it wrong and you fail once, which means it didn't work.
[00:52:20.600 --> 00:52:21.480] Well, you fail twice.
[00:52:21.480 --> 00:52:22.840] You ultimately fail if you give up.
[00:52:22.840 --> 00:52:23.800] You didn't learn from it.
[00:52:23.800 --> 00:52:24.840] You didn't get better.
[00:52:24.840 --> 00:52:35.320] My suggestion is definitely figure out, like, use the failure as a way to learn so that you can grow and not fail a second time, but never give up.
[00:52:35.320 --> 00:52:35.880] Very good.
[00:52:35.880 --> 00:52:36.600] Never give up.
[00:52:36.600 --> 00:52:37.560] Learn what works.
[00:52:37.560 --> 00:52:40.120] If somebody else is doing it, hey, why them?
[00:52:40.120 --> 00:52:40.840] Why not me?
[00:52:40.840 --> 00:52:42.680] I love that kind of mentality.
[00:52:42.680 --> 00:52:44.200] Like, if they figured it out, I can figure it out.
[00:52:44.200 --> 00:52:47.280] We'll link up all of Dustin's resources in the show notes for this episode.
[00:52:47.360 --> 00:52:52.880] All you got to do is click the show notes link in the episode description and it'll get you right over there.
[00:52:52.880 --> 00:52:54.880] A couple takeaways from me before we wrap.
[00:52:54.880 --> 00:53:01.520] Obviously, this long-term mentality: the more properties you can stack, the more systems you have in place, the better off you're going to be.
[00:53:01.520 --> 00:53:05.760] You're going to be able to weather some capital expenses that might come up or some problem tenants that might come up.
[00:53:05.760 --> 00:53:09.920] I was kind of reminded of the Warren Buffett line when you're talking about captured equity.
[00:53:09.920 --> 00:53:12.320] You kind of like you make your money when you buy, not when you sell.
[00:53:12.320 --> 00:53:15.520] It's like, you know, trying to buy right, not trying to buy at inflated prices.
[00:53:15.520 --> 00:53:21.200] And then building the team, putting the team and the systems in place so that you can really be the income builder.
[00:53:21.200 --> 00:53:27.120] You can really be the owner investor rather than the person who's getting calls from tenants at three in the morning.
[00:53:27.120 --> 00:53:28.960] Hey, the toilet's leaked, stuff like that.
[00:53:28.960 --> 00:53:32.880] But Dustin, big thanks for coming by, sharing your insight once again.
[00:53:32.880 --> 00:53:36.000] Thanks to our sponsors for helping make this content free for everyone.
[00:53:36.000 --> 00:53:41.840] SidehustleNation.com/slash deals is where to go to find all the latest offers from our sponsors in one place.
[00:53:41.840 --> 00:53:44.720] Thank you for supporting the advertisers that support the show.
[00:53:44.720 --> 00:53:46.480] That is it for me.
[00:53:46.480 --> 00:53:47.920] Thank you so much for tuning in.
[00:53:47.920 --> 00:53:51.600] If you're finding value in the show, the greatest compliment is to share with a friend.
[00:53:51.600 --> 00:53:55.040] So fire off that text message and help spread the word that way.
[00:53:55.040 --> 00:53:57.760] Until next time, let's go out there and make something happen.
[00:53:57.760 --> 00:54:00.720] And I'll catch you in the next edition of the Side Hustle Show.
[00:54:00.720 --> 00:54:01.360] Hustle on.

Prompt 6: Key Takeaways

Now please extract the key takeaways from the transcript content I provided.

Extract the most important key takeaways from this part of the conversation. Use a single sentence statement (the key takeaway) rather than milquetoast descriptions like "the hosts discuss...". 

Limit the key takeaways to a maximum of 3. The key takeaways should be insightful and knowledge-additive. 

IMPORTANT: Return ONLY valid JSON, no explanations or markdown. Ensure:
- All strings are properly quoted and escaped
- No trailing commas
- All braces and brackets are balanced
Format: {"key_takeaways": ["takeaway 1", "takeaway 2"]}

Prompt 7: Segments

Now identify 2-4 distinct topical segments from this part of the conversation.

For each segment, identify:
- Descriptive title (3-6 words)  
- START timestamp when this topic begins (HH:MM:SS format)
- Double check that the timestamp is accurate - a timestamp will NEVER be greater than the total length of the audio
- Most important Key takeaway from that segment. Key takeaway must be specific and knowledge-additive.
- Brief summary of the discussion

IMPORTANT: The timestamp should mark when the topic/segment STARTS, not a range. Look for topic transitions and conversation shifts.

Return ONLY valid JSON. Ensure all strings are properly quoted, no trailing commas:
{
  "segments": [
    {
      "segment_title": "Topic Discussion", 
      "timestamp": "01:15:30",
      "key_takeaway": "main point from this segment",
      "segment_summary": "brief description of what was discussed"
    }
  ]
}

Timestamp format: HH:MM:SS (e.g., 00:05:30, 01:22:45) marking the START of each segment.

Prompt 8: Media Mentions

Now scan the transcript content I provided for ACTUAL mentions of specific media titles:

Find explicit mentions of:
- Books (with specific titles)
- Movies (with specific titles)  
- TV Shows (with specific titles)
- Music/Songs (with specific titles)

DO NOT include:
- Websites, URLs, or web services
- Other podcasts or podcast names

IMPORTANT: 
- Only include items explicitly mentioned by name. Do not invent titles.
- Valid categories are: "Book", "Movie", "TV Show", "Music"
- Include the exact phrase where each item was mentioned
- Find the nearest proximate timestamp where it appears in the conversation
- THE TIMESTAMP OF THE MEDIA MENTION IS IMPORTANT - DO NOT INVENT TIMESTAMPS AND DO NOT MISATTRIBUTE TIMESTAMPS
- Double check that the timestamp is accurate - a timestamp will NEVER be greater than the total length of the audio
- Timestamps are given as ranges, e.g. 01:13:42.520 --> 01:13:46.720. Use the EARLIER of the 2 timestamps in the range.

Return ONLY valid JSON. Ensure all strings are properly quoted and escaped, no trailing commas:
{
  "media_mentions": [
    {
      "title": "Exact Title as Mentioned",
      "category": "Book",
      "author_artist": "N/A",
      "context": "Brief context of why it was mentioned",
      "context_phrase": "The exact sentence or phrase where it was mentioned",
      "timestamp": "estimated time like 01:15:30"
    }
  ]
}

If no media is mentioned, return: {"media_mentions": []}

Full Transcript

[00:00:00.240 --> 00:00:06.240] Look, adulting can be a challenge, but there is an easy button for at least one item on your to-do list.
[00:00:06.240 --> 00:00:15.280] Our partner, Policy Genius, makes finding and buying life insurance simple to make sure your loved ones have a financial safety net in case something happens to you.
[00:00:15.280 --> 00:00:23.120] With Policy Genius, you can find life insurance policies starting at just $276 a year for a million dollars in coverage.
[00:00:23.120 --> 00:00:27.200] It's an easy way to protect the people you love and feel good about the future.
[00:00:27.200 --> 00:00:36.560] How it works is Policy Genius lets you compare quotes from America's top insurers, complete with coverage amounts, prices, and terms, all in just a few clicks.
[00:00:36.560 --> 00:00:44.160] No games, no guesswork, and with thousands of five-star reviews on Google and TrustPilot from customers who found the best policy fit for their needs.
[00:00:44.160 --> 00:00:48.160] Policy Genius is the country's leading online insurance marketplace.
[00:00:48.160 --> 00:00:50.880] Secure your family's future with Policy Genius.
[00:00:50.880 --> 00:00:57.440] Head to policygenius.com to compare free life insurance quotes from top companies and see how much you could save.
[00:00:57.440 --> 00:01:00.000] That's policygenius.com.
[00:01:00.000 --> 00:01:02.480] And now, onto the show.
[00:01:02.800 --> 00:01:06.480] Your simple 10-year path to financial flexibility.
[00:01:06.480 --> 00:01:07.440] I don't want to oversell it.
[00:01:07.440 --> 00:01:13.360] Maybe not completely financial freedom, but a roadmap to build time-leveraged cash flow and long-term wealth.
[00:01:13.360 --> 00:01:18.080] So here's the game plan: Buy one profitable investment property per year.
[00:01:18.080 --> 00:01:19.280] Do that for 10 years.
[00:01:19.280 --> 00:01:25.280] Maybe easier said than done, which is why today we're going to learn how to get it done with a longtime friend and friend of the show.
[00:01:25.280 --> 00:01:32.800] He retired early from the cash flow from his rental properties and now helps other people do the same at masterpassiveincome.com.
[00:01:32.800 --> 00:01:35.520] Dustin Heiner, welcome back to the Side Hustle Show.
[00:01:35.520 --> 00:01:36.240] What's up, Nick?
[00:01:36.240 --> 00:01:38.160] Hey, man, thank you so much for having me on again.
[00:01:38.160 --> 00:01:41.360] I absolutely love your show, and I've done side hustles my entire life.
[00:01:41.360 --> 00:01:42.720] Thank you so much for having me on.
[00:01:42.720 --> 00:01:43.120] You bet.
[00:01:43.120 --> 00:01:46.080] You are a practitioner as well as a preacher.
[00:01:46.080 --> 00:01:47.040] So we'll get into that.
[00:01:47.040 --> 00:01:48.480] But paint the picture for us here.
[00:01:48.480 --> 00:01:49.920] This 10-year plan.
[00:01:49.920 --> 00:01:58.400] If you do this right, you've got a million-dollar portfolio at the end of those 10 years and hopefully have some positive cash flow from that too.
[00:01:58.400 --> 00:01:59.960] But lay the groundwork for us here.
[00:01:59.960 --> 00:02:03.320] So I started investing back in 2006, bought my first property.
[00:02:03.320 --> 00:02:05.080] It made me money in cash flow every single month.
[00:01:59.680 --> 00:02:06.600] I said, Great, I got to get 10 of those.
[00:02:06.840 --> 00:02:12.680] So if I'm making $300 a month with one property, then that's $3,000 a month with 10 properties.
[00:02:12.680 --> 00:02:13.320] That's great.
[00:02:13.320 --> 00:02:16.920] Just like if you find a good side hustle, you just replicate that same thing over and over again.
[00:02:16.920 --> 00:02:19.480] So fast forward now to where we're at now.
[00:02:19.480 --> 00:02:22.200] I have over 30 properties that are making me money.
[00:02:22.200 --> 00:02:24.760] I still own the ones that I bought back in 2006.
[00:02:24.760 --> 00:02:28.440] First property is always the hardest because you got to prove it to yourself that it works.
[00:02:28.440 --> 00:02:29.320] You got to get the money.
[00:02:29.320 --> 00:02:31.160] You have to build the business, all that sort of stuff.
[00:02:31.160 --> 00:02:35.240] Coached, I don't know, maybe over a thousand students now how to invest in real estate.
[00:02:35.240 --> 00:02:43.800] And like clockwork, they get their first property and we can go into the entire business building process to where it can scale, where you can get to 10 properties in 10 years.
[00:02:43.800 --> 00:02:48.680] And I think honestly, even faster because you do all the work on the front end, just like building a side hustle.
[00:02:48.680 --> 00:02:53.400] The second property comes so much faster because all that work is paying off in the future.
[00:02:53.400 --> 00:02:58.600] So my daughter, she's 16 years old, just bought her first property three months ago.
[00:02:58.600 --> 00:02:59.960] It's making $300 a month.
[00:02:59.960 --> 00:03:02.280] And this is the plan that I have for her.
[00:03:02.280 --> 00:03:07.080] Buy one property, get that passive income coming in every single month, $300.
[00:03:07.080 --> 00:03:07.880] Do not spend it.
[00:03:07.880 --> 00:03:11.080] Like, do not go out and buy this or buy that or, you know, whatever.
[00:03:11.080 --> 00:03:13.000] That's maybe the discipline part of this.
[00:03:13.000 --> 00:03:17.240] Like, I got some of this cash flow and I'm going to parlay that into the next thing.
[00:03:17.240 --> 00:03:18.360] Absolutely.
[00:03:18.360 --> 00:03:24.360] And so every year we focus on buying at least one more property.
[00:03:24.360 --> 00:03:28.360] And then over 10 years, if you do that, 10 years, you have 10 properties.
[00:03:28.360 --> 00:03:33.080] And hopefully each one are making you three, four, five hundred dollars a month or more in passive income.
[00:03:33.080 --> 00:03:38.600] Yeah, let's look at it through the lens of your daughter and maybe her 10-year plan here.
[00:03:38.600 --> 00:03:48.720] So, first of all, where like we see all these charts where you know, housing affordability is at an all-time bill low, or you know, it's unaffordable, interest rates are high.
[00:03:48.880 --> 00:03:51.120] Like, where are you finding cash flow?
[00:03:51.120 --> 00:03:56.080] I mean, in our neighborhood, it would cost you half as much to rent as it would to buy with 20% down right now.
[00:03:56.080 --> 00:03:57.600] And so, it just doesn't pencil.
[00:03:57.600 --> 00:04:00.240] So, where should we even begin shopping?
[00:04:00.240 --> 00:04:09.680] If you were to get outside of like the west and east coast, because the coastline's definitely the prices are much, much higher, where my daughter found her first property was in Ohio.
[00:04:09.680 --> 00:04:14.240] In Ohio, so Mazda, Ohio is the city that she bought her first property in.
[00:04:14.240 --> 00:04:17.120] And completely honest, I have my own properties there too.
[00:04:17.120 --> 00:04:21.040] So, I obviously coach lots of people and coached my daughter through this entire process.
[00:04:21.040 --> 00:04:26.480] So, she went through my entire course just like all the other students, learned everything.
[00:04:26.480 --> 00:04:28.400] And so, we went through the process together.
[00:04:28.400 --> 00:04:31.200] It was Mazda, Ohio, which is really close to Canton, Ohio.
[00:04:31.200 --> 00:04:36.080] Akron is kind of right between there, and bought it for $125,000.
[00:04:36.080 --> 00:04:38.000] Now, she didn't have $125,000.
[00:04:38.000 --> 00:04:40.880] She didn't have that cash that she could just buy it for cash.
[00:04:40.880 --> 00:04:43.440] But what she did was she had savings that she saved up.
[00:04:43.440 --> 00:04:47.920] I want to say it was like she had $2,000 that she saved of her own money.
[00:04:47.920 --> 00:04:50.480] And then we had been putting aside money for college.
[00:04:50.480 --> 00:04:52.080] And so, I think it was like 10 grand.
[00:04:52.080 --> 00:05:00.800] So, we got $12,000 total and got a DSCR loan, a debt service coverage ratio loan.
[00:05:00.800 --> 00:05:07.200] When you buy a house to get a mortgage, you normally make sure that the bank says, Hey, do you have a job that you could pay off the mortgage?
[00:05:07.200 --> 00:05:07.360] Right.
[00:05:07.600 --> 00:05:08.320] Yeah, you're 16.
[00:05:08.400 --> 00:05:11.680] You're like, Well, even if I do have a job, I'm working at McDonald's or something.
[00:05:11.680 --> 00:05:12.240] Exactly.
[00:05:12.240 --> 00:05:14.960] So, this type of loan is a commercial loan.
[00:05:14.960 --> 00:05:17.200] So, it doesn't depend on your income.
[00:05:17.200 --> 00:05:19.440] It depends on the property's income.
[00:05:19.440 --> 00:05:23.360] How much money will that property make in cash flow from the rents?
[00:05:23.360 --> 00:05:29.520] And if it'll cover the mortgage, cover taxes, insurance, all the normal things, and then make passive income on top of that, they'll lend you the money.
[00:05:29.520 --> 00:05:32.440] And obviously, being 16 years old is going to be harder for her.
[00:05:32.440 --> 00:05:34.520] So, I co-signed because I'm dad.
[00:05:35.080 --> 00:05:35.800] I'm going to do that.
[00:05:29.840 --> 00:05:39.240] Plus, I'll just take over the property if she stops paying for it.
[00:05:39.240 --> 00:05:42.040] But in the end, you don't have to have a lot of money.
[00:05:42.040 --> 00:05:44.280] Now, you might be thinking, I don't have $12,000.
[00:05:44.280 --> 00:05:45.320] Completely understand.
[00:05:45.320 --> 00:05:49.000] 10% of $125,000, that's $12,500.
[00:05:49.000 --> 00:05:51.880] I even have, yeah, mortgage brokers, 5% down.
[00:05:52.200 --> 00:05:58.040] I even know of, you can get a FHA loan 3.5% down to buy a property.
[00:05:58.040 --> 00:06:00.920] Now, you got to live in there a year, but that's a great way to do it.
[00:06:00.920 --> 00:06:08.120] We live in Tennessee right now and bought in Ohio, and we hire experts to do all the work for us.
[00:06:08.120 --> 00:06:13.720] And here's one quick, quick caveat: we don't just hire them after we're all done buying a house.
[00:06:13.720 --> 00:06:14.920] In fact, I have lots of students.
[00:06:15.000 --> 00:06:17.480] What they do is say, Hey, Dustin, I bought a house.
[00:06:17.480 --> 00:06:26.920] I did all the things those TikTok gurus told me to do, found a property, spent thousands of dollars to buy it, thousands of dollars to fix it up, then found a tenant, then tried to find a property manager.
[00:06:26.920 --> 00:06:32.040] Well, then I called property managers, and they all told me they wouldn't manage it because they get shot there.
[00:06:32.040 --> 00:06:35.480] I'm like, Oh, you have a you don't have an asset anymore, you have a liability.
[00:06:35.480 --> 00:06:40.920] Okay, instead of doing that, instead of saying, I, you know, property manager, I just bought this, will you manage it?
[00:06:40.920 --> 00:06:43.320] You called your property manager and you found them before.
[00:06:43.320 --> 00:06:47.640] We build an entire business that then is a system that we put in place.
[00:06:47.640 --> 00:06:53.000] And we talk to the property manager beforehand: say, Hey, property manager, you don't say, I bought this property already.
[00:06:53.000 --> 00:06:55.400] You say, I'm looking to buy this property.
[00:06:55.400 --> 00:06:59.640] If they say they won't manage it, then you don't waste your time, energy, and money to buy the property.
[00:06:59.960 --> 00:07:03.160] What you do is you ask them if they, you know, how much will it rent for?
[00:07:03.160 --> 00:07:06.520] What's a vacancy factor, which means how often will it be vacant?
[00:07:06.520 --> 00:07:07.400] Type of clientele.
[00:07:07.400 --> 00:07:08.120] Will you manage it?
[00:07:08.120 --> 00:07:09.240] All those good questions.
[00:07:09.240 --> 00:07:11.880] They say yes, they'll tell you how much it rents for too.
[00:07:11.880 --> 00:07:17.120] So you calculate all your expenses, you make sure your income is also tacked on as expense.
[00:07:14.760 --> 00:07:19.440] $300 is what I suggest minimum.
[00:07:19.760 --> 00:07:28.400] And then as long as it rents for that total expense and you still make passive income, then that's a worthwhile property that you put into your business that makes money for you.
[00:07:28.400 --> 00:07:29.520] Does that all make sense?
[00:07:29.680 --> 00:07:33.360] What's the rent in this example on the $125,000 Ohio house?
[00:07:33.360 --> 00:07:34.400] $13.50.
[00:07:34.720 --> 00:07:35.120] Okay.
[00:07:35.120 --> 00:07:42.080] There are still, they talk about the magic, you know, 1% rule where it's like, if I have a $100,000 house, I want it to rent for $1,000 a month.
[00:07:42.080 --> 00:07:43.200] That's a 1% rule.
[00:07:43.200 --> 00:07:44.640] And it's like kind of a unicorn.
[00:07:44.720 --> 00:07:46.000] In some markets, really hard to find.
[00:07:46.000 --> 00:07:50.400] But you say, okay, these opportunities are still out there if you know where to look.
[00:07:50.400 --> 00:07:52.240] The Midwest has been really, really good.
[00:07:52.240 --> 00:07:54.000] I have some students investing in Indiana.
[00:07:54.000 --> 00:07:55.280] I own property in Indiana.
[00:07:55.280 --> 00:07:56.080] Tennessee is not bad.
[00:07:56.080 --> 00:08:00.880] Memphis is a little more aggressive of a place because a little more crime there.
[00:08:00.880 --> 00:08:02.880] But at the same time, a lot of investors going there.
[00:08:02.880 --> 00:08:03.840] Alabama's been really good.
[00:08:04.560 --> 00:08:10.320] As I was building out my business, I invest in Ohio, Texas, Arizona, Tennessee, and Indiana.
[00:08:10.320 --> 00:08:11.280] All these different states.
[00:08:11.280 --> 00:08:13.120] You don't have to invest in your backyard.
[00:08:13.360 --> 00:08:17.840] Like you live in Seattle or you live in San Francisco or really expensive places.
[00:08:18.240 --> 00:08:33.440] You do not have to invest in that city as long as you do it right, which means I suggest building a business, finding the experts before you buy the property and them tell you if it's a bad property, if it's a good property, how much it would rent for, how much it would cost to fix up, all of that.
[00:08:33.440 --> 00:08:36.240] Then you buy a good property in the right areas.
[00:08:36.240 --> 00:08:41.360] So it sounds like there's a two-tiered approach for people just starting out.
[00:08:41.360 --> 00:08:49.680] Number one is the database of Redfin houses for sale, like across the whole Midwest, like that's a huge spectrum to try and search and narrow down.
[00:08:49.680 --> 00:09:03.720] And then the second angle is this: well, I'm going to find property managers who are already on the ground, who already know the market, they know the rents, they know the neighborhoods, and trying to pair those two together and find and find this unicorn and find that match.
[00:09:04.040 --> 00:09:09.400] But it still seems really, really daunting without some more, some more constraint.
[00:09:09.400 --> 00:09:15.000] Is there any filters or resources that you like to even narrow down that search a little bit?
[00:09:15.000 --> 00:09:15.640] Absolutely.
[00:09:15.640 --> 00:09:16.280] Absolutely.
[00:09:16.280 --> 00:09:22.840] And so, here's how I would explain it: I tell everybody that can hear me: stop being an investor.
[00:09:22.840 --> 00:09:30.280] Because when you think like an investor, meaning quote-unquote investor, you think of appreciation, you think of all these different things that are not what you should be doing.
[00:09:30.280 --> 00:09:32.600] What you need to be is an income builder.
[00:09:32.600 --> 00:09:39.560] You need to build income every single month instead of trying to get for, you know, hey, I'm going to get equity in 10 years or 20 years.
[00:09:39.560 --> 00:09:41.080] It's going to be worth, you know, double.
[00:09:41.080 --> 00:09:42.040] You never know if it will.
[00:09:42.040 --> 00:09:42.840] It might crash.
[00:09:42.840 --> 00:09:46.520] But if you invest for income every single month, then it's going to go well.
[00:09:46.520 --> 00:09:51.000] So here's what you do: you in any city, or let's say you just pick a state.
[00:09:51.000 --> 00:09:52.440] Let's just, you know, I said Ohio.
[00:09:52.440 --> 00:09:55.800] You're going to look at Ohio and Redfin or Trulia or Zillow.
[00:09:55.800 --> 00:09:59.400] You're going to see a bunch of red dots everywhere, all the for sell properties.
[00:09:59.400 --> 00:10:04.920] Build your business in a city that has a good amount of inventory that you can buy.
[00:10:04.920 --> 00:10:11.240] Now, when I say inventory, that means every single property that you buy, don't look at it as a home.
[00:10:11.240 --> 00:10:13.560] Look at it, not even as a house.
[00:10:13.560 --> 00:10:20.360] Look at it as a piece of inventory that you put into your business so that you hire the experts to do all the work for you.
[00:10:20.360 --> 00:10:30.040] So if I'm looking at Ohio and you can even just pick Alabama, you can pick Tennessee, you can pick Indiana, you can pick all these different cities or sorry, states, and then you'll see all those red dots.
[00:10:30.040 --> 00:10:33.080] And now I'll give you the criteria that I give all my coaching students.
[00:10:33.080 --> 00:10:37.640] We want the type of property that everybody either wants to rent or buy.
[00:10:37.640 --> 00:10:41.000] Because if you ever want to sell it, you want to have a property that sells pretty quickly.
[00:10:41.000 --> 00:10:48.160] Here's the criteria that we look for: a three-bedroom, two-bath, 1,200 to maybe 1,600 square feet.
[00:10:44.680 --> 00:10:50.480] You don't want it too small that families don't want to live in there.
[00:10:50.560 --> 00:10:54.560] You don't want to be too big where extra walls to paint and toilets to fix and all that sort of stuff.
[00:10:54.880 --> 00:10:55.600] So you want.
[00:10:55.840 --> 00:11:01.760] a cookie cutter type home that other people are going to be looking for to rent or buy.
[00:11:01.760 --> 00:11:05.520] And so when you're doing your filter, Zillow, Red Fentrulia, put those in.
[00:11:05.520 --> 00:11:08.720] Three bedroom, two bath, 1,200, 1,700 square feet.
[00:11:08.720 --> 00:11:09.920] You're going to do great there.
[00:11:09.920 --> 00:11:13.040] Then once you start looking, you'll see the red dots.
[00:11:13.040 --> 00:11:16.640] And then we'll look for cities that had good, that have good inventory.
[00:11:16.640 --> 00:11:18.640] You don't want a city that has like three homes.
[00:11:18.640 --> 00:11:23.040] You build a business, you find all the right people, but you only have three homes to buy, then you're done.
[00:11:23.040 --> 00:11:24.080] Then you can't scale.
[00:11:24.080 --> 00:11:26.080] Indianapolis has really, Memphis has a lot of them.
[00:11:26.480 --> 00:11:27.440] Birmingham has a lot.
[00:11:27.520 --> 00:11:28.960] You can even just start those cities.
[00:11:28.960 --> 00:11:29.840] But here's what you do.
[00:11:30.160 --> 00:11:37.040] Here's the secret sauce that I at Master Passive Income coach on my podcast that I constantly teach is we build a business first.
[00:11:37.040 --> 00:11:41.120] Because if you start looking and calling realtors, this is a sad thing.
[00:11:41.120 --> 00:11:42.080] I get students.
[00:11:42.080 --> 00:11:44.000] They'll say, hey, Dustin, I found a great city.
[00:11:44.000 --> 00:11:45.040] Lots of inventory.
[00:11:45.040 --> 00:11:47.360] I have five realtors already sending me deals.
[00:11:47.360 --> 00:11:48.800] They say, whoa, whoa, whoa, whoa.
[00:11:48.800 --> 00:11:50.960] Well, do you have a property manager?
[00:11:51.200 --> 00:11:51.840] No.
[00:11:51.840 --> 00:11:52.960] Do you have a contractor?
[00:11:52.960 --> 00:11:53.280] No.
[00:11:53.280 --> 00:11:54.240] Do you have an inspector?
[00:11:54.240 --> 00:11:54.560] No.
[00:11:55.200 --> 00:11:57.600] You don't have any of these things and you already have deals coming.
[00:11:57.680 --> 00:12:00.800] What happens if you bought a property and it's the wrong area?
[00:12:00.800 --> 00:12:02.320] Because it's a big city.
[00:12:02.320 --> 00:12:03.600] Indianapolis is a big city.
[00:12:03.600 --> 00:12:08.480] There's bad areas that you might not want to rent that doesn't get good rents or has crime or whatever.
[00:12:08.480 --> 00:12:10.800] So what we do, here's the key thing.
[00:12:10.800 --> 00:12:13.600] We find a city that has good inventory, lots of properties to buy that we want.
[00:12:13.600 --> 00:12:14.240] That'd be great.
[00:12:14.240 --> 00:12:17.760] That could rent for more than our expenses, which would be great.
[00:12:17.760 --> 00:12:19.840] Then we stop looking for properties.
[00:12:19.840 --> 00:12:20.960] This is key.
[00:12:20.960 --> 00:12:23.040] You're not going to hear very many people talk about this.
[00:12:23.040 --> 00:12:24.160] We stop looking at properties.
[00:12:24.160 --> 00:12:28.160] The next thing we do is we find our property manager.
[00:12:28.160 --> 00:12:34.200] We find our property manager because they're the ones going to be managing it for the longevity of the entire time you own it.
[00:12:29.840 --> 00:12:35.560] Yeah, this is interesting.
[00:12:35.960 --> 00:12:40.680] I have got Redfin open outside of Canton, Ohio.
[00:12:40.680 --> 00:12:49.560] And there are some properties in the, you know, call it $85,000 to $130,000 range that actually look decent from the outside.
[00:12:49.560 --> 00:13:02.840] And under that, like you've got some, if you want to take on a big rehab project, there's some even less than like sub $50,000, which is really kind of unheard of from West Coast real estate, you know, jaded Nick.
[00:13:02.840 --> 00:13:07.720] But at this point, you say, okay, stop shopping, start looking for a property manager.
[00:13:08.120 --> 00:13:10.840] What makes a good property management company in your eyes?
[00:13:10.840 --> 00:13:13.400] Here's what we do when we're looking for a property manager.
[00:13:13.400 --> 00:13:17.880] You hire slow, which means you interview many different property managers.
[00:13:17.880 --> 00:13:20.920] You interview them many different times, ask them many different questions.
[00:13:20.920 --> 00:13:28.280] In fact, I have a list of 22 questions and answers that I give my students that this is the question you should ask.
[00:13:28.280 --> 00:13:31.880] And here are the answers that you should be getting, or somewhere around there.
[00:13:31.880 --> 00:13:36.840] And, you know, if you want to deviate from that, it's your own risk tolerance, if you're okay with deviating from that.
[00:13:36.840 --> 00:13:40.760] But at minimum, we interview six, six different property managers.
[00:13:40.760 --> 00:13:42.360] Google search is probably one of the best ways to find them.
[00:13:42.360 --> 00:13:46.120] Chat GPT started to come out too, where they're finding property managers for you, which is interesting.
[00:13:46.120 --> 00:13:47.800] AI is doing that work for you.
[00:13:47.800 --> 00:13:52.120] But once you get a list of six, you call each one of them three different times.
[00:13:52.120 --> 00:13:57.240] Let's say on a Monday, you call the first call, second call you call on a Wednesday, and the third call you call on a Friday.
[00:13:57.240 --> 00:14:13.080] The reason why is I hate when property managers cannot call you back within 24, at most 48 hours, because if you're trying to hire a property manager and they don't call you back, and this is before they have your money, imagine when they have your money.
[00:14:13.080 --> 00:14:15.920] Are they going to call, oh, this guy again, I don't wanna talk to him?
[00:14:14.600 --> 00:14:26.080] So, you want a good, reputable company because be completely honest, it's very easy for somebody to get a hat, put it on, meaning I'm a property manager, and they'll put that property manager house.
[00:14:26.160 --> 00:14:29.440] It's very simple to do that, but it's very hard to be a good property manager.
[00:14:29.440 --> 00:14:33.040] So, we interview them three different times: a Monday, Wednesday, Friday.
[00:14:33.040 --> 00:14:36.000] Each time we interview them or call them and just chat with them.
[00:14:36.000 --> 00:14:40.560] It's when I say interview, it's talking to them just as a normal human being, just see their business.
[00:14:40.560 --> 00:14:43.600] Each one gets very short or shorter and shorter.
[00:14:43.600 --> 00:14:47.520] First one should maybe be about 20, 30 minutes because you're asking good questions.
[00:14:47.520 --> 00:14:52.080] And then, after you go through all six, then you take those and you rank them.
[00:14:52.080 --> 00:14:52.960] Hey, this was number one.
[00:14:52.960 --> 00:14:54.000] I really like this company.
[00:14:54.000 --> 00:14:56.720] Number two, this is the second best, third best, and all the way so forth.
[00:14:56.720 --> 00:14:58.640] Wednesday, you call them again.
[00:14:58.640 --> 00:15:09.680] You maybe do 15 minutes, 10 or 15 minutes, and then you re-rank after you ask those questions on the Friday, the last call, last five minutes, you call the top three and you just verify that they're going to call you back, that they answer.
[00:15:10.000 --> 00:15:13.920] Anybody could have a good call at the beginning, you know, like the first call, they sound good.
[00:15:13.920 --> 00:15:16.800] Yeah, but this is the longevity.
[00:15:16.800 --> 00:15:23.520] You want to make sure you have somebody that you can trust with your money, with your property, and never talk to them because they're sending you money over and over again.
[00:15:23.520 --> 00:15:27.520] So, that's what we do: we hire slow and fire fast.
[00:15:27.520 --> 00:15:40.640] More with Dustin in just a moment, including other key members of his on-the-ground team, his revised take on so-called turnkey rental agencies, and six ways investors are making money right after this.
[00:15:40.960 --> 00:15:52.560] Years ago, this is probably 2009, I'm sitting in this conference in Santa Barbara, and the presenter asks this question: Are you working on your business or are you working in your business?
[00:15:52.560 --> 00:16:00.360] I saw myself as this full-time entrepreneur, but it was this moment of clarity that, no, I was still very much working in the business day to day.
[00:16:00.360 --> 00:16:03.640] So, when I got back home, that's when I made my first full-time hire.
[00:16:03.640 --> 00:16:13.720] It was the first in a long series, in an ongoing series of steps in trying to take control by being okay of letting go of certain tasks.
[00:16:13.720 --> 00:16:20.520] Now, when you find yourself in that position of needing to hire like yesterday, you need our sponsor, Indeed.
[00:16:20.520 --> 00:16:24.760] Plus, Indeed's sponsored jobs help you stand out and hire fast.
[00:16:24.760 --> 00:16:29.640] There's no monthly subscriptions, no long-term contracts, and you only pay for results.
[00:16:29.640 --> 00:16:32.600] That's why for my next hire, I'm using Indeed.
[00:16:32.760 --> 00:16:41.800] Side Hustle Show listeners get a $75 sponsored job credit to get your jobs more visibility at indeed.com/slash sidehustle show.
[00:16:41.800 --> 00:16:49.560] Just go to indeed.com/slash sidehustle show right now and support our show by saying you heard about Indeed on this podcast.
[00:16:49.560 --> 00:16:52.440] Indeed.com/slash sidehustle show.
[00:16:52.440 --> 00:16:54.040] Terms and conditions apply.
[00:16:54.040 --> 00:16:56.760] Hiring, indeed, is all you need.
[00:16:56.760 --> 00:17:07.880] You know, when you're shopping online and you see that little purple shop pay button at checkout, that's a sign that the store you're on is one of the millions of businesses powered by our partner, Shopify.
[00:17:07.880 --> 00:17:11.480] Shopify makes it incredibly easy to start and run your business.
[00:17:11.480 --> 00:17:13.800] For starters, you don't even have to start from scratch.
[00:17:13.800 --> 00:17:22.120] They've got hundreds of beautiful, ready-to-go, proven-to-convert templates that you can adapt to your brand's style without needing to know how to code.
[00:17:22.120 --> 00:17:30.200] You can tackle all your most important tasks in one place, from managing your inventory to tracking payments to analytics and more.
[00:17:30.200 --> 00:17:37.800] Plus, Shopify helps you make sales with built-in marketing and email tools to go out and find new customers and keep the ones you've got.
[00:17:37.800 --> 00:17:42.680] If you want to see less carts being abandoned, it's time to head over to Shopify.
[00:17:42.680 --> 00:17:49.200] Sign up for your $1 per month trial and start selling today at shopify.com slash sidehustle.
[00:17:49.200 --> 00:17:52.560] Go to shopify.com slash sidehustle.
[00:17:52.560 --> 00:17:56.160] Shopify.com slash sidehustle.
[00:17:57.760 --> 00:18:04.560] Okay, so you find your winner based on who has impressed you in these interviews, and then you start floating property.
[00:18:04.560 --> 00:18:07.600] I'm thinking of, I'm looking at this place, at this address.
[00:18:07.840 --> 00:18:08.320] What do you think?
[00:18:08.320 --> 00:18:09.200] What do you think of the neighborhood?
[00:18:09.200 --> 00:18:10.160] What do you think it would rent for?
[00:18:10.160 --> 00:18:11.120] That kind of stuff?
[00:18:11.120 --> 00:18:11.760] Absolutely.
[00:18:11.760 --> 00:18:13.680] So another key tip I'll give you.
[00:18:13.680 --> 00:18:17.920] So property managers are paid to manage properties, not to go look at properties.
[00:18:17.920 --> 00:18:24.480] Honestly, like this is one-on-one coach I can give you because a lot of students have ran a property manager ragged.
[00:18:24.480 --> 00:18:25.440] Hey, go check out this property.
[00:18:25.440 --> 00:18:26.320] Go check out this property.
[00:18:26.320 --> 00:18:27.120] Go check out this property.
[00:18:27.120 --> 00:18:28.000] They don't get paid to do that.
[00:18:28.000 --> 00:18:30.480] Realtors get paid to look at properties.
[00:18:30.480 --> 00:18:34.560] So you don't want to get fired by your property manager by having them run around everywhere.
[00:18:34.560 --> 00:18:38.400] Have them look online, just give them a list of five and say, hey, these are the five properties.
[00:18:38.400 --> 00:18:39.520] Tell me, just look online.
[00:18:39.520 --> 00:18:40.560] How much will it rent for?
[00:18:40.560 --> 00:18:42.320] Will you manage it in just the area?
[00:18:42.320 --> 00:18:44.720] And then you have your realtor go over there and take them out.
[00:18:44.720 --> 00:18:45.040] Okay.
[00:18:45.040 --> 00:18:49.520] So there's another piece of the pie is why I want to find a local real estate agent who knows the market.
[00:18:49.520 --> 00:18:50.560] Absolutely.
[00:18:50.560 --> 00:18:53.040] So, well, no, no, let me take that back.
[00:18:53.040 --> 00:18:57.440] No, I never use a quote unquote buyer's realtor anymore.
[00:18:57.440 --> 00:19:02.640] I find the properties through Redfin, Trulia, Zillow, and I find a seller's realtor.
[00:19:02.640 --> 00:19:03.600] Here's a big tip.
[00:19:03.600 --> 00:19:04.960] This is what we investors do.
[00:19:04.960 --> 00:19:06.560] I find the seller's realtor.
[00:19:06.560 --> 00:19:12.480] The seller's realtor, because I already found the property, the seller's realtor are going to be, I'm going to have them represent me.
[00:19:12.480 --> 00:19:14.480] So they're going to get both sides of the commission.
[00:19:14.480 --> 00:19:22.480] They're really going to want me to buy the property as opposed to anybody else because they're getting full commission and I'll get a little bit more insights and they're going to go to bat for me as well.
[00:19:22.480 --> 00:19:24.000] But that's a conflict of interest, right?
[00:19:24.000 --> 00:19:29.720] The seller's agent can't have the buyer's best interest in mind when their role is to get the highest price.
[00:19:29.720 --> 00:19:33.240] Like there is kind of a natural issue with dual agency.
[00:19:33.240 --> 00:19:34.520] There's nothing illegal about it.
[00:19:34.520 --> 00:19:34.840] No.
[00:19:29.520 --> 00:19:35.960] And there's nothing unethical.
[00:19:36.520 --> 00:19:40.680] They have to tell both: hey, I'm representing the buyer now and I'm representing the seller.
[00:19:40.680 --> 00:19:44.200] So as long as you do that, then you're completely on the up and up.
[00:19:44.200 --> 00:19:44.440] All right.
[00:19:44.440 --> 00:19:49.320] So finding a seller, so just basically whoever is the listing agent on the property.
[00:19:49.320 --> 00:19:49.880] Correct.
[00:19:49.880 --> 00:19:51.640] So here's a big thing too.
[00:19:51.640 --> 00:19:53.480] I don't just try to find my properties.
[00:19:53.480 --> 00:19:55.000] I have other people send me deals.
[00:19:55.000 --> 00:19:56.920] Remember, I want it to be hands-off.
[00:19:56.920 --> 00:20:00.040] And just like you, I love having my free time.
[00:20:00.040 --> 00:20:02.600] So I have so many people sending me deals.
[00:20:02.600 --> 00:20:08.440] Wholesalers, those are people that are like realtors, but they're not necessarily, you know, they send you, sell the deals to you.
[00:20:08.440 --> 00:20:09.880] Other investors send me deals.
[00:20:09.880 --> 00:20:11.400] Property managers send me deals.
[00:20:11.640 --> 00:20:18.920] Title companies set everybody knows that I'm an investor and I get deals sent to me because I tell them I'm an investor.
[00:20:19.080 --> 00:20:24.600] Find the property manager first, but then we also let other people like all of our fishing poles, our lines in the water.
[00:20:24.600 --> 00:20:26.760] Everybody is trying to look for properties for us.
[00:20:26.760 --> 00:20:27.240] Okay.
[00:20:27.560 --> 00:20:28.200] That's fair.
[00:20:28.200 --> 00:20:28.440] Okay.
[00:20:28.440 --> 00:20:31.080] So we've got the pieces of the puzzle in place.
[00:20:31.080 --> 00:20:33.000] We found the property manager.
[00:20:33.000 --> 00:20:34.120] We found this property.
[00:20:34.120 --> 00:20:35.560] We've kind of gotten their green light.
[00:20:35.560 --> 00:20:36.680] Yeah, it seems legit.
[00:20:36.680 --> 00:20:39.080] Here's what we think it's going to rent for.
[00:20:39.080 --> 00:20:45.400] It matches our cash flow criteria based on what we project our debt service is going to be.
[00:20:45.400 --> 00:20:48.520] And now we go out and look for financing.
[00:20:48.520 --> 00:20:50.600] Like what do you think is the next step here?
[00:20:50.600 --> 00:20:51.720] Financing is the easiest.
[00:20:51.720 --> 00:20:53.240] Honestly, it's very easy.
[00:20:53.240 --> 00:20:58.120] I've got, I want to say 18 different ways to get financing to buy properties.
[00:20:58.120 --> 00:21:04.040] But like if somebody's, if you're on the call, or if you're sure you're listening to this, and you're thinking, Man, Dustin, I don't have very much money.
[00:21:04.040 --> 00:21:06.920] It's like, honestly, you don't need a lot of money.
[00:21:06.920 --> 00:21:13.960] But the financing, you need to just quote unquote know that you can get financing in one or two ways.
[00:21:13.960 --> 00:21:29.200] So, here's what I would suggest: when you're starting, you're building your entire business, finding your property managers, finding the inspectors, and all that sort of stuff, you find a couple good mortgage brokers in that state, that entire state, because some mortgage brokers don't go from state to state.
[00:21:29.200 --> 00:21:30.640] There only might be in that state.
[00:21:30.640 --> 00:21:40.400] In fact, my students, I've got a list of like 20 different mortgage brokers that my students have used, got great interest rates, great everything and fees.
[00:21:40.400 --> 00:21:45.040] And so, we call up one or two mortgage brokers and just tell them our situation.
[00:21:45.040 --> 00:21:46.400] Here's our credit.
[00:21:46.400 --> 00:21:47.360] Here's where we're at.
[00:21:47.360 --> 00:21:50.640] I want a DSCR loan, a debt service coverage ratio loan.
[00:21:50.640 --> 00:21:55.360] And they help you to understand how much money you can afford if you're going to buy a property.
[00:21:55.360 --> 00:21:56.160] Does that all make sense?
[00:21:56.160 --> 00:22:00.480] So, we're building that first so that we understand the parameters that we're going after.
[00:22:00.480 --> 00:22:06.880] I imagine they're still going to want to know your own credit worthiness, your credit history, your income, that kind of thing.
[00:22:06.880 --> 00:22:12.400] But they're going to base the loan off of, hey, the projected rent is $1,200 a month.
[00:22:12.400 --> 00:22:15.760] The projected expenses for this is $800.
[00:22:15.760 --> 00:22:17.520] So, we have this, we have this margin to play.
[00:22:17.520 --> 00:22:25.760] And so we can lend against that and the equity in the home or the value of the property versus purely based on your income and your ability to repay.
[00:22:25.760 --> 00:22:27.600] They don't always run the credit.
[00:22:27.600 --> 00:22:29.040] I'll give you an example.
[00:22:29.040 --> 00:22:35.360] So, I bundled, and this is another crazy, creative and crazy way that you can get financing.
[00:22:35.360 --> 00:22:43.040] So, I had six properties that were owned free and clear over in the Ohio area, and I bundled them together in a DSCR loan.
[00:22:43.040 --> 00:22:46.640] The DSCR loan, they did not even look at my credit.
[00:22:46.640 --> 00:22:48.000] It wasn't even a credit pool.
[00:22:48.000 --> 00:22:56.640] It was on the business because I have a business that owns the properties, which I teach all my students how to get, make sure we have the right LLCs, the right trusts, all that sort of stuff set up.
[00:22:56.640 --> 00:23:00.760] And they did not pull my credit, and it's not even on my credit.
[00:22:59.760 --> 00:23:04.040] So we have, I borrowed, I pulled out 500 grand, now $550,000.
[00:23:04.440 --> 00:23:08.680] And so I put you have invested in my apartment complexes.
[00:23:08.680 --> 00:23:14.360] And I took that money out of the equity of the properties and I put that in my new apartment complex that we buy.
[00:23:14.360 --> 00:23:16.840] And so I now have a tax-free loan.
[00:23:16.840 --> 00:23:18.280] I didn't have to sell the property.
[00:23:18.280 --> 00:23:20.280] It still makes me money tax-free.
[00:23:20.280 --> 00:23:21.160] And I put it inside there.
[00:23:21.160 --> 00:23:24.680] And my tenants, obviously, because the rents are going to pay off the mortgage.
[00:23:24.680 --> 00:23:35.320] But here's the great thing: their sales pitch for DSCR loans is when you go and buy another primary residence, this loan of $550,000 is not going to come up on your credit.
[00:23:35.320 --> 00:23:39.320] It's not even be a credit pull because we're looking at the properties.
[00:23:39.320 --> 00:23:40.200] We'll just take the properties.
[00:23:40.200 --> 00:23:41.320] Does that all make sense?
[00:23:41.320 --> 00:23:43.320] Yeah, I'm starting to see the light here.
[00:23:43.320 --> 00:23:50.840] You know, I've always been a little, and maybe just from like the standpoint of if you already won the game, why take additional risk?
[00:23:50.840 --> 00:23:55.400] Like from my perspective today, 20 years into my working career, right?
[00:23:55.400 --> 00:23:59.720] But if I'm early on in my career, I see this as an accelerated path.
[00:23:59.720 --> 00:24:03.000] And it's a unique one because it's like, I see three paths, right?
[00:24:03.000 --> 00:24:04.520] I see the traditional investment path.
[00:24:04.520 --> 00:24:15.160] Hey, just go buy the SP index and be happy with your 8% and lather rinse repeat for 20 years, assuming a decent personal level of personal profitability and you're going to be good to go.
[00:24:15.160 --> 00:24:16.440] But it's still 20 years, right?
[00:24:16.440 --> 00:24:17.880] Here's an accelerated path.
[00:24:17.880 --> 00:24:19.720] And then path three is the entrepreneurial path.
[00:24:19.720 --> 00:24:28.040] Go invest in yourself, go build a business, go do something where maybe it's higher risk, higher reward, but you can accelerate that maybe even a little bit further.
[00:24:28.040 --> 00:24:30.840] But I did want to touch on the turnkey option.
[00:24:30.840 --> 00:24:39.000] So these are properties that have been theoretically pre-vetted, pre-rehabbed, you know, pre-leased in a lot of cases.
[00:24:39.000 --> 00:24:40.760] Hey, we've already got tenants in place here.
[00:24:40.760 --> 00:24:44.960] We just need an investor, usually an out-of-state investor to come in.
[00:24:44.600 --> 00:24:46.400] And we've got property management in place.
[00:24:46.480 --> 00:24:48.320] Like, what's your take on these?
[00:24:48.320 --> 00:24:50.720] Are there any that you like, or what's going on here?
[00:24:50.720 --> 00:24:57.840] So, if you remember our time that I was on your podcast, we talked about turnkey, and there were two major downfalls with turnkey.
[00:24:57.840 --> 00:25:04.160] But we're gonna, I'm gonna help you understand a bigger perspective because before last year, I bought two turnkey properties.
[00:25:04.240 --> 00:25:07.440] In fact, my daughter, the property she bought was a turnkey property.
[00:25:07.440 --> 00:25:08.480] So, let me get into it.
[00:25:08.480 --> 00:25:12.000] So, number one, you listening don't know what a turnkey company is.
[00:25:12.000 --> 00:25:20.800] They buy the house, then they fix it up, and they make it really, really nice, and they hopefully get a tenant in there, get it renting, and then they sell it to you.
[00:25:20.800 --> 00:25:23.760] Now, the downside is they capture that equity.
[00:25:23.760 --> 00:25:28.240] So, the house that my daughter bought, they bought it for like 60 grand, man, put 30 grand into it.
[00:25:28.240 --> 00:25:30.560] So, it's up, it's $90,000 total.
[00:25:30.560 --> 00:25:31.920] She paid $125,000.
[00:25:31.920 --> 00:25:35.680] So, you know, she paid them basically what, $35,000 on top of that.
[00:25:35.680 --> 00:25:37.760] Yeah, they're making a nice margin on it right away.
[00:25:37.760 --> 00:25:38.560] Totally.
[00:25:38.560 --> 00:25:40.720] And then they also manage the property.
[00:25:40.720 --> 00:25:42.400] So they're making money on the back end.
[00:25:42.400 --> 00:25:44.640] So that's the whole picture of what turnkey is.
[00:25:44.640 --> 00:25:50.880] Now, a couple downsides are: number one, are you going to be getting a good property management company in the end?
[00:25:50.880 --> 00:25:52.240] Are you going to be getting good tenants?
[00:25:52.240 --> 00:25:55.840] Or are they just trying to sell these, pump these out, and make money?
[00:25:55.840 --> 00:25:56.640] So that's number one.
[00:25:56.640 --> 00:25:58.720] So vetting a turnkey company is very hard.
[00:25:58.720 --> 00:26:00.400] There's been a lot of problems.
[00:26:00.400 --> 00:26:07.360] And if you go to other websites and you see, you know, forums and stuff, you'll see people saying, oh my goodness, like this turnkey company was horrible.
[00:26:07.360 --> 00:26:08.480] I lost as much money.
[00:26:08.480 --> 00:26:09.920] So that's number one, vetting.
[00:26:09.920 --> 00:26:12.400] But number two, they capture that equity.
[00:26:12.400 --> 00:26:22.240] Like you said, you know, if they bought it for 60 grand and then fixed up for $20,000, $30,000, out $90,000, and then it's resell for $130,000, they captured equity.
[00:26:22.240 --> 00:26:23.520] They forced the appreciation up.
[00:26:23.520 --> 00:26:24.720] Those are the other two things.
[00:26:24.720 --> 00:26:28.880] Force depreciation up, put money into it, and make it worth double what you put into it.
[00:26:28.880 --> 00:26:31.320] So, those are the two major, three major.
[00:26:31.800 --> 00:26:37.800] So, you miss out on equity capture, you miss out on forced appreciation, and you also don't know exactly what the good company is.
[00:26:37.800 --> 00:26:43.880] But here's the well, before I get to like my ideas of why I've changed a little bit and why I actually bought one, do you have any questions on those?
[00:26:43.880 --> 00:26:48.280] Any specific ones you think listeners should put on the shortlist?
[00:26:48.280 --> 00:26:49.880] Oh, of companies to use?
[00:26:49.880 --> 00:26:50.760] Yeah, got it.
[00:26:50.760 --> 00:26:51.960] I'll give you those in just a minute.
[00:26:51.960 --> 00:27:01.160] Let me flesh out the reasoning why you should at least consider it, especially if you have some, if you have a little bit extra money, especially if you're in a DSCR loan, you know, a 10%.
[00:27:01.160 --> 00:27:07.000] If you have $12,000, you can buy one of these homes and it should hopefully be cash flowing $250,000, $300,000, $350,000 like that.
[00:27:07.000 --> 00:27:16.920] Good turnkey companies, what they do is they go through the entire house, they gut the entire house, they rip off the roof, they put a new furnace in there.
[00:27:16.920 --> 00:27:25.560] Now, this is obviously if it's needed, but these lower-priced homes, they're like 80 years old, and yes, they're going to need even electrical.
[00:27:25.560 --> 00:27:27.320] So, they rip everything out.
[00:27:27.320 --> 00:27:29.480] And, Nick, I know you've looked into this.
[00:27:29.480 --> 00:27:36.920] So, there's an expense line item that you have to account for and also give you a quick resource.
[00:27:36.920 --> 00:27:46.680] If you go to incomebuilder.io, incomebuilder.io, you can get a free account and you can analyze properties and it'll do this for you.
[00:27:46.680 --> 00:27:49.480] But you need a capital expense reserve.
[00:27:49.480 --> 00:27:54.360] That means big ticket items, huge, large ticket items like a roof.
[00:27:54.360 --> 00:27:56.920] That's going to be 5, 10, 20 grand.
[00:27:56.920 --> 00:27:59.240] You never know how much it's going to cost to get fixed.
[00:27:59.480 --> 00:28:00.360] A furnace.
[00:28:00.360 --> 00:28:03.240] A furnace is going to be $5,000, probably $3 to $5,000.
[00:28:03.200 --> 00:28:06.600] Yeah, this is already all going to be repaired if you have a good company.
[00:28:06.760 --> 00:28:10.040] And Nick, I think we've known each other long enough.
[00:28:10.040 --> 00:28:11.160] You should be buying properties.
[00:28:11.560 --> 00:28:12.760] You should have your own properties.
[00:28:12.760 --> 00:28:14.600] You can give them to your kids, all the good stuff.
[00:28:14.600 --> 00:28:17.760] But you don't have to worry about the capital reserves.
[00:28:17.760 --> 00:28:28.720] So for five years, my daughter's property, we would normally budget, let's say out of $1,300, we'd probably budget $50,000 to $100 every single month, set it aside to take care of it.
[00:28:28.720 --> 00:28:31.040] Hey, if the roof goes bad or the furnace goes out.
[00:28:31.040 --> 00:28:36.240] Well, for at least five years, we're not going to need to worry about that because this is brand new stuff.
[00:28:36.240 --> 00:28:43.200] And then also, on top of that, here's an amazing thing: you get better clientele because it's top-notch.
[00:28:43.600 --> 00:28:45.120] You know, cabinets are ripped out.
[00:28:45.120 --> 00:28:46.400] It's a brand new kitchen.
[00:28:46.400 --> 00:28:47.360] Everything's fresh.
[00:28:47.360 --> 00:28:49.360] It feels like almost a brand new house.
[00:28:49.360 --> 00:28:54.240] So, those are a bunch of amazing reasons why you should get a turnkey company.
[00:28:54.240 --> 00:29:02.640] Now, I will say, though, even though I'm giving you all these reasons why to do it, I bought a home for $68,000, just like a turnkey company would.
[00:29:02.640 --> 00:29:11.280] I got my contractors $20,000 to get that place tip-top shape, got it tipped out, what, close to $90,000.
[00:29:11.280 --> 00:29:12.560] It's worth $130,000.
[00:29:12.560 --> 00:29:15.360] I'm renting it for $1,250 or $1,300.
[00:29:15.360 --> 00:29:18.240] So you can do it yourself as long as you're in the game.
[00:29:18.240 --> 00:29:27.520] So, the company that I'm going to give you, if you want to use the turnkey and Nick, I definitely think you should give them a call and at least talk to him, is Akron Turnkey.
[00:29:27.520 --> 00:29:34.080] Just easy enough, write in Akron Turnkey and tell them you came from me, Dustin, at Master Passive Income.
[00:29:34.080 --> 00:29:35.280] And they'll give you a couple thousand.
[00:29:35.280 --> 00:29:42.160] I think maybe I want to say it was even like $1,500 or $2,000 off of it because they're cutting out the middleman, just going right to them.
[00:29:42.160 --> 00:29:45.280] But this is a good company that my students are buying from.
[00:29:45.280 --> 00:29:48.160] And I bought three, three homes from them.
[00:29:48.160 --> 00:29:48.560] Okay.
[00:29:48.880 --> 00:29:53.440] Let me try and push back a little bit because I do see the light.
[00:29:53.440 --> 00:29:59.520] I've obviously have known lots of people who have gained financial independence through real estate, through the FinCon community, through bigger pockets.
[00:29:59.520 --> 00:30:01.160] Like it's definitely a thing.
[00:30:01.400 --> 00:30:08.680] But here, if I'm at $250 a month in positive cash flow, I've got $3,000 a year, call it.
[00:30:09.000 --> 00:30:12.680] And maybe I spent $10,000 down to get this property.
[00:30:12.680 --> 00:30:13.320] Maybe it was more.
[00:30:13.320 --> 00:30:13.960] Maybe it was less.
[00:30:13.960 --> 00:30:16.440] Okay, so it pencils out 30% cash on cash.
[00:30:16.440 --> 00:30:18.680] Like, that's really strong.
[00:30:18.680 --> 00:30:28.920] But at the same time, you just mentioned roofs, furnaces, like that $3,000 doesn't seem like a lot of breathing room for some of these capital expenses that are going to come up.
[00:30:28.920 --> 00:30:32.440] Like these properties don't magically maintain themselves over time.
[00:30:32.440 --> 00:30:35.240] There's going to be other stuff that comes up here.
[00:30:35.240 --> 00:30:36.280] And there's going to be vacancies.
[00:30:36.280 --> 00:30:37.480] There's going to be problems.
[00:30:37.480 --> 00:30:38.600] So I'm glad you're pushing back.
[00:30:38.600 --> 00:30:40.040] And it got me thinking.
[00:30:40.040 --> 00:30:47.240] I did a workshop where my students recently where I walked them through the, and we talked about this on your last episode, but I got even more dialed in.
[00:30:47.240 --> 00:30:47.800] I got the numbers.
[00:30:47.800 --> 00:30:48.680] I just pulled them up.
[00:30:48.680 --> 00:30:52.840] So the six ways you make money investing in real estate and all those things that come up.
[00:30:52.840 --> 00:30:53.960] Can I, can we, can we pause?
[00:30:53.960 --> 00:30:56.840] Like, I'm impressed you remember anything from this episode five years ago.
[00:30:56.840 --> 00:30:58.280] This is like episode 387.
[00:30:58.280 --> 00:31:00.440] It was like 300 episodes ago.
[00:31:01.240 --> 00:31:01.960] I don't know why.
[00:31:01.960 --> 00:31:03.160] I just remember talking to you about it.
[00:31:03.160 --> 00:31:05.960] I remember you having good questions as I was like, oh, let me.
[00:31:05.960 --> 00:31:10.200] So the six ways that you make money when you invest in real estate.
[00:31:10.200 --> 00:31:12.520] And I'll jump right into the first one.
[00:31:12.520 --> 00:31:13.640] The best one is cash flow.
[00:31:13.640 --> 00:31:16.280] Now, you said, okay, you know, $250 a month.
[00:31:16.280 --> 00:31:18.120] Yeah, I mean, that's a lot of money putting.
[00:31:18.120 --> 00:31:23.160] So if you put $1250 down, $12,500 down to buy this house.
[00:31:23.160 --> 00:31:36.200] No, I can see, since we're talking about the 10-year plan, if I've got 10 of these and now it's $30,000 to $50,000 a month because of, you know, rent appreciation and everything, like all of a sudden, or sorry, $30,000 to $50,000 a year.
[00:31:36.200 --> 00:31:41.400] And I have some level of diversification where I can weather a vacancy.
[00:31:41.400 --> 00:31:43.720] I can weather some expense over there.
[00:31:43.720 --> 00:31:52.800] So if you have this long-term view of it and think of it as a portfolio business, then absolutely, but it's like, it's a little bit harder to stomach when it's just one or two properties.
[00:31:52.800 --> 00:31:53.680] I'm 100% with you.
[00:31:53.680 --> 00:31:55.360] And that's why you got to scale and grow.
[00:31:55.360 --> 00:31:58.080] So the six ways you make money investing in real estate.
[00:31:58.080 --> 00:32:01.360] And this is, I'm going to give you easy, simple numbers.
[00:32:01.360 --> 00:32:12.640] If you buy a house that's worth $150,000 and you buy it right now, $150,000, and let's say it's cash flowing you three, four, $500 a month, whatever it might be.
[00:32:12.640 --> 00:32:17.920] You buy it cheaper, like the house that I bought for $68,000, fix it up for $20,000.
[00:32:17.920 --> 00:32:20.160] And then now it's worth $130,000.
[00:32:20.160 --> 00:32:23.120] Well, I'm making $550 a month of passive income.
[00:32:23.120 --> 00:32:28.160] So if you bought one property, the cash flow over 30-year time, a 30-year period.
[00:32:28.160 --> 00:32:30.160] Now, I know, remember, we talked about 10 years.
[00:32:30.160 --> 00:32:32.560] We can just, you know, figure this out afterwards.
[00:32:32.560 --> 00:32:33.600] But let me walk you through this.
[00:32:34.000 --> 00:32:48.640] Over 30 years, that $150,000 property and that you put $15,000 down, 10% down payment, cash flow over 30 years, that's if rent does not go up, which it does, but just over 30 years, that's $180,000.
[00:32:48.640 --> 00:32:53.520] And we're also accounting for the things you all talked about, like repairs, furnaces going.
[00:32:53.840 --> 00:32:56.080] That's already accounted for in our expenses.
[00:32:56.080 --> 00:33:00.160] That's not dipping into our income of $180,000.
[00:33:00.160 --> 00:33:01.760] So that's number one, cash flow.
[00:33:01.760 --> 00:33:10.400] Next one, if you buy it yourself and you don't use a turnkey company, I captured, was it $60,000 in equity when I bought the property?
[00:33:10.400 --> 00:33:11.840] Well, that's $60,000.
[00:33:11.840 --> 00:33:13.040] Forced appreciation.
[00:33:13.040 --> 00:33:14.880] I put $20,000 into it.
[00:33:15.040 --> 00:33:18.320] That made it worth, I think, another $30,000 more.
[00:33:18.320 --> 00:33:20.160] And then, so that makes value go up.
[00:33:20.160 --> 00:33:21.200] Market appreciation.
[00:33:21.200 --> 00:33:26.800] And I kid you not, I had to double-check this because it sounds weird, but it's true.
[00:33:26.800 --> 00:33:32.120] Every 15 years, your property doubles in value.
[00:33:29.680 --> 00:33:36.840] So in 15 years, it's going to be $150,000 to $300,000.
[00:33:37.160 --> 00:33:38.680] And then after that, it doubles again.
[00:33:38.680 --> 00:33:41.720] It'll be $600,000 after that, 15 years after that.
[00:33:41.720 --> 00:33:43.400] So 30 years, you're going to have a lot more money.
[00:33:43.400 --> 00:33:51.000] The mortgage buy down: here's the great thing: your tenants are paying for the taxes, insurance, your mortgage, everything.
[00:33:51.000 --> 00:33:53.800] So even your principal and interest, they're paying for that.
[00:33:53.800 --> 00:33:55.800] So the mortgage is going down.
[00:33:55.800 --> 00:33:59.080] They're paying, and the interest is going down on top of that.
[00:33:59.080 --> 00:34:03.480] And then the tax advantages, I pay almost no money in tax advantages.
[00:34:03.480 --> 00:34:15.960] And in the end, $15,000 of your money right now for just one property without even accounting for rent increases, you're over $650,000 that you're going to pocket in this one transaction.
[00:34:15.960 --> 00:34:19.640] And again, all those expenses are accounted for from repairs and all that sort of stuff.
[00:34:19.640 --> 00:34:20.760] That's just one property.
[00:34:20.760 --> 00:34:23.080] And then we scale it and we do it over and over again.
[00:34:23.080 --> 00:34:24.280] So push back.
[00:34:24.520 --> 00:34:25.720] Where am I missing here?
[00:34:25.720 --> 00:34:26.680] No, this is good.
[00:34:27.000 --> 00:34:40.520] You painted this good picture, but the road to real estate wealth is paved with burnt-out landlords, people who have had their tenants changing the oil of their motorcycle and the carpet in the living room.
[00:34:41.480 --> 00:34:51.400] You know, a friend of mine, my former accountant, Josh from CPA on Fire, he posts these pictures of these trashed houses and he's like, well, this is what I woke up to this morning.
[00:34:51.640 --> 00:34:56.200] Here's a text, or the SWAT team is outside the apartment today.
[00:34:56.200 --> 00:34:58.920] And so it's like that kind of stuff happens.
[00:34:58.920 --> 00:35:05.320] And so what separates you and your students from everybody who is like, dude, I tried it.
[00:35:05.320 --> 00:35:25.040] And for whatever reason, the tenants that I attracted, the market, the neighborhood, the hurricane that came through, like bad stuff happens where it's like, if I could just, you know, buy a portion of the 500 largest companies in America and just let those CEOs go do their thing, then I sleep a little easier at night.
[00:35:25.040 --> 00:35:29.760] But there's two sides to it because it's like higher risk, higher reward.
[00:35:29.760 --> 00:35:34.160] And I think you mentioned the leverage and the tax advantage and all that stuff that goes into it.
[00:35:34.160 --> 00:35:35.440] But what breaks this plan?
[00:35:35.440 --> 00:35:37.440] What breaks landlords down here?
[00:35:37.440 --> 00:35:44.800] Dustin's response, plus his take on whether or not we're in a real estate bubble, coming up right after this.
[00:35:45.120 --> 00:35:47.840] I'm excited to partner with OpenPhone for this episode.
[00:35:47.840 --> 00:35:57.360] OpenPhone is the number one business phone system that streamlines and scales your customer communication for both calls and texts, all in one easy-to-use centralized hub.
[00:35:57.360 --> 00:36:02.160] But before OpenPhone was sponsoring podcasts, they took a more guerrilla marketing approach.
[00:36:02.320 --> 00:36:03.760] You probably don't remember this.
[00:36:03.760 --> 00:36:11.040] This is a while back, but when we just started OpenPhone, one of the ways that we got our first customers is through Facebook groups.
[00:36:11.040 --> 00:36:14.000] And I joined a bunch of Facebook groups, including yours.
[00:36:14.240 --> 00:36:28.960] Thank you for not kicking me out, but I posted a couple of times and I actually remember seeing there were some of your listeners and folks in your community interested in solving the problem we solve, which is not using your personal phone number for work.
[00:36:28.960 --> 00:36:32.720] And those posts got us some of our first customers.
[00:36:32.720 --> 00:36:33.520] So thank you.
[00:36:33.520 --> 00:36:35.200] It's a full circle moment.
[00:36:35.200 --> 00:36:36.240] Oh, that's super fun.
[00:36:36.240 --> 00:36:36.960] Very cool.
[00:36:36.960 --> 00:36:39.120] That's Doreena, the co-founder of OpenPhone.
[00:36:39.120 --> 00:36:41.360] And sure enough, her posts are still there.
[00:36:41.360 --> 00:36:47.600] OpenPhone is offering Side Hustle Show listeners 20% off your first six months at openphone.com/slash sidehustle.
[00:36:47.600 --> 00:36:52.960] That's O-P-E-N-P-H-O-N-E openphone.com/slash sidehustle.
[00:36:52.960 --> 00:36:58.080] And if you have existing numbers with another service, OpenPhone will port them over at no extra charge.
[00:36:58.080 --> 00:37:04.280] With our partner, Mint Mobile, you can get the wireless coverage and speed you're used to, but for way less money.
[00:36:59.840 --> 00:37:06.280] I think that's a win we could all use right about now.
[00:37:06.600 --> 00:37:08.200] And you can keep your same phone number.
[00:37:08.200 --> 00:37:17.000] Plus, for a limited time, Mint Mobile is offering Side Hustle Show listeners three months of unlimited premium wireless service for just 15 bucks a month.
[00:37:17.000 --> 00:37:24.120] All Mint plans come with high-speed data and unlimited talk and text delivered on the nation's largest 5G network.
[00:37:24.120 --> 00:37:27.320] I've been a customer since 2019 and haven't looked back.
[00:37:27.320 --> 00:37:30.280] This year, skip breaking a sweat and breaking the bank.
[00:37:30.280 --> 00:37:39.560] Get this new customer offer and your three-month unlimited wireless plan for just $15 a month at mintmobile.com slash sidehustle.
[00:37:39.560 --> 00:37:43.240] That's mintmobile.com slash sidehustle.
[00:37:43.240 --> 00:37:47.240] Upfront payment of $45 required, equivalent to $15 per month.
[00:37:47.240 --> 00:37:50.680] Limited time, new customer offer for first three months only.
[00:37:50.680 --> 00:37:54.440] Speeds may slow above 35 gigabytes on unlimited plan.
[00:37:54.440 --> 00:37:55.960] Taxes and fees extra.
[00:37:55.960 --> 00:37:58.920] See Mint Mobile for details.
[00:38:00.200 --> 00:38:00.840] Awesome.
[00:38:00.840 --> 00:38:03.000] No, that's an amazing question.
[00:38:03.000 --> 00:38:10.600] And I'll even say, even like your SP idea, that's great, but you have to have a lot of capital in order to live on it.
[00:38:10.600 --> 00:38:17.640] What I'm saying is with 10 properties, you can live on that income and you get equity growth on top of that.
[00:38:17.640 --> 00:38:23.880] But here's what breaks landlords: they buy their first property and they start pulling their hair out because they're not doing it right.
[00:38:23.880 --> 00:38:26.760] They're not hiring the right people or getting the right people to run the business.
[00:38:26.760 --> 00:38:30.280] They're finding wrong tenants that are not going to take care of their property.
[00:38:30.280 --> 00:38:32.920] They might even bought in a place that nobody's going to manage.
[00:38:32.920 --> 00:38:33.880] So that's number one.
[00:38:33.880 --> 00:38:34.280] Okay.
[00:38:34.280 --> 00:38:36.600] We build the entire business, get the experts.
[00:38:36.600 --> 00:38:38.040] Like Redfin's not an expert.
[00:38:38.040 --> 00:38:40.520] Trulia, Zillow, those are not experts.
[00:38:40.520 --> 00:38:41.640] Who are experts?
[00:38:41.640 --> 00:38:45.440] It's the people that live there on the ground in that city.
[00:38:45.440 --> 00:38:48.960] They're the experts going to be talking you through which areas are great.
[00:38:44.840 --> 00:38:51.040] And so far, this is all side unseen.
[00:38:51.120 --> 00:38:54.800] Like your daughter's house, like, did you guys fly up there to do a final walkthrough or anything?
[00:38:54.800 --> 00:38:56.000] It's all remote.
[00:38:56.000 --> 00:38:56.640] Not at all.
[00:38:56.640 --> 00:39:00.320] Out of the 30-plus properties that I own, honestly, even the two apartment complexes.
[00:39:00.320 --> 00:39:02.880] So the 30-plus properties, I've seen one of them before I bought it.
[00:39:03.200 --> 00:39:04.480] And I haven't seen the other ones.
[00:39:04.480 --> 00:39:06.480] I just see pictures and I have experts.
[00:39:06.720 --> 00:39:08.960] The other apartment complexes, I have experts.
[00:39:08.960 --> 00:39:11.520] Now, I did walk through one of them because I live in the city.
[00:39:11.520 --> 00:39:12.160] So I walked through it.
[00:39:12.240 --> 00:39:13.840] Saw that, hey, that's a great property.
[00:39:13.840 --> 00:39:17.680] But for single-family homes, especially now, in fact, I've coached thousands of students.
[00:39:17.680 --> 00:39:27.280] I want to say I know of maybe a dozen students that have flown to the city in order to look at the properties because here's what we do.
[00:39:27.280 --> 00:39:33.120] Just like you build any business, any side hustle, you get the experts doing the work for you.
[00:39:33.120 --> 00:39:34.640] And here's the key thing.
[00:39:34.640 --> 00:39:42.080] Remember, if you're a beginner, you don't build a business if you don't follow what I most people just buy a property and they try to hope it works out.
[00:39:42.080 --> 00:39:50.800] But what I teach all my students to do, we build the entire business first, and then we have multiple cheap people check each other's work.
[00:39:50.800 --> 00:39:52.800] We don't just say, you know, oh, we got a contractor.
[00:39:52.800 --> 00:39:53.280] Okay, good.
[00:39:53.280 --> 00:39:54.160] And here's your money.
[00:39:54.160 --> 00:39:56.480] And then they run off and they didn't do any work.
[00:39:56.480 --> 00:40:01.600] No, we have multiple people analyze everything that's going on touching that property.
[00:40:01.600 --> 00:40:04.400] Now, they send you pictures, they give you explanations.
[00:40:04.400 --> 00:40:08.160] I double-check what they say with other people, even my property manager.
[00:40:08.160 --> 00:40:09.840] I have, let's say, a realtor.
[00:40:09.840 --> 00:40:11.920] Hey, realtor, can you go by and check this out?
[00:40:11.920 --> 00:40:14.960] And I'll pay them, you know, 50 bucks or whatever, or an inspector.
[00:40:15.280 --> 00:40:16.800] So we always have everybody check.
[00:40:16.800 --> 00:40:23.600] So the first one, if you're starting, the roadblock or the problems will come and you'll pull your hair out and you'll give up if you don't build a business first.
[00:40:23.840 --> 00:40:24.880] Now, here's the next step.
[00:40:24.880 --> 00:40:27.440] Here's where the next roadblock comes.
[00:40:27.440 --> 00:40:35.560] It's when somebody goes from a big beginner and they get three or four properties and they have not built the business like I've told them to.
[00:40:35.560 --> 00:40:41.560] And they have, let's say, four or five, maybe even eight properties and they really don't have time.
[00:40:41.560 --> 00:40:43.400] Maybe they might find the right properties.
[00:40:43.400 --> 00:40:44.920] Maybe they might be making some money.
[00:40:44.920 --> 00:40:45.960] They're mom and pop.
[00:40:45.960 --> 00:40:47.640] They're running the business themselves.
[00:40:47.640 --> 00:40:49.080] They're finding the tenants.
[00:40:49.080 --> 00:40:50.440] They're collecting the rents.
[00:40:50.440 --> 00:40:52.120] They're managing the repairs.
[00:40:52.120 --> 00:40:58.280] They're doing all this on top of having a family, on top of having a job, maybe even a great side hustle.
[00:40:58.280 --> 00:41:01.160] And so they're running ragged because they don't have the time.
[00:41:01.160 --> 00:41:03.080] Here's the next, that's the next roadblock.
[00:41:03.080 --> 00:41:04.520] But how do you get past that?
[00:41:04.520 --> 00:41:06.440] We have to learn how to scale.
[00:41:06.440 --> 00:41:21.400] And that is by when you do it right the first time, by building the business, getting the right people, then we implement the right systems, procedures, and processes in place that are going to make sure that we can scale because we're not taking our time to run the business.
[00:41:21.400 --> 00:41:22.040] No, this is good.
[00:41:22.040 --> 00:41:34.920] So it sounds like the maybe the biggest mistake that people make is just not having the right team members or the right experts in place, the boots on the ground to help you out when things go wrong or to prevent things from going wrong in the first place.
[00:41:34.920 --> 00:41:35.560] 100%.
[00:41:35.560 --> 00:41:39.880] To make sure that you don't get bad tenants too, there's just a key piece of the process.
[00:41:39.880 --> 00:41:41.240] Well, I just said the word.
[00:41:41.240 --> 00:41:43.960] Systems, procedures, and processes.
[00:41:43.960 --> 00:41:45.480] We have to have those any business.
[00:41:45.480 --> 00:41:47.800] Your side hustle business, you have that as well.
[00:41:47.800 --> 00:41:49.160] Same thing with a real estate investor.
[00:41:49.160 --> 00:41:56.040] We need to stop being an investor, become an income builder, which means we're making money every single month, and have that business run itself.
[00:41:56.040 --> 00:41:58.280] And so we find good tenants.
[00:41:58.280 --> 00:42:00.200] I hate it when my rent's late.
[00:42:00.200 --> 00:42:01.400] I hate that.
[00:42:01.400 --> 00:42:03.240] So I don't treat anybody differently.
[00:42:03.240 --> 00:42:04.760] I treat everybody the exact same.
[00:42:04.760 --> 00:42:07.000] This is a process that you put in place in your business.
[00:42:07.000 --> 00:42:09.800] Rent's due on the first, late after the third.
[00:42:09.800 --> 00:42:12.520] On the fourth, we put a three-day notice on their door.
[00:42:12.520 --> 00:42:13.160] This is legal.
[00:42:13.160 --> 00:42:14.040] You have to do this.
[00:42:14.040 --> 00:42:20.320] And then after the third day, if they have not after the three-day notice, that's like day six, I think, six or seven.
[00:42:14.840 --> 00:42:24.960] If they have not paid the rent, you add on with that three-day notice, you add on the late fee.
[00:42:24.960 --> 00:42:27.760] But if they have not paid the rent, we start the eviction process.
[00:42:27.760 --> 00:42:31.520] Just as cookie-cutter, as straightforward as possible.
[00:42:31.520 --> 00:42:33.520] Number one, that gets them to pay the rent.
[00:42:33.520 --> 00:42:35.840] Number two, it helps them to be on time and regular.
[00:42:35.840 --> 00:42:39.920] Number three, if they're not going to pay the rent, you get them out as fast as possible.
[00:42:39.920 --> 00:42:42.960] And number four, you just stop paying your mortgage.
[00:42:42.960 --> 00:42:46.880] Will the bank say, hey, you call up your bank, hey, this is what I've got this before.
[00:42:46.880 --> 00:42:50.000] You call up your bank, hey, bank, my son got arrested for the second time.
[00:42:50.000 --> 00:42:51.840] I had to use the money for bailout for the mortgage.
[00:42:52.240 --> 00:42:54.720] Would you not start the foreclosure process?
[00:42:54.720 --> 00:42:55.840] Because I don't have the money.
[00:42:55.840 --> 00:42:56.800] No, you wouldn't.
[00:42:56.800 --> 00:42:58.720] The bank would say, no, we have to start it.
[00:42:58.720 --> 00:43:05.760] So what we do is we put in systems, procedures, and process, treat it and run it like a business and just start the eviction process.
[00:43:05.760 --> 00:43:07.040] You're still going to get some outliers.
[00:43:07.040 --> 00:43:08.320] We're going to have problems.
[00:43:08.320 --> 00:43:11.120] But usually all my tenants, they just move out when it's time to move out.
[00:43:11.120 --> 00:43:12.000] I don't have to evict them.
[00:43:12.000 --> 00:43:16.480] I don't have holes in the walls, dog poop everywhere, which happened to a lot of people.
[00:43:16.480 --> 00:43:23.760] So we find the right people and then we treat them well, take care of the property, but we let them know, hey, this is, we're taking everything seriously.
[00:43:23.760 --> 00:43:24.080] Yeah.
[00:43:24.080 --> 00:43:29.440] Get out your crystal ball and I want to ask if we're in a housing bubble right now.
[00:43:29.440 --> 00:43:31.120] Ooh, okay.
[00:43:31.440 --> 00:43:34.000] So here is what I'm seeing.
[00:43:34.000 --> 00:43:42.640] The commercial real estate, which is apartment complexes, especially office complexes, that's definitely, that's going to come to a head now because a bubble happened.
[00:43:42.800 --> 00:43:53.520] I'll get to Resident Natural in just a second, but the commercial, like a large apartment complexes, syndications, which is basically somebody reselling somebody else's deal, just trying to raise money.
[00:43:53.520 --> 00:43:55.040] So, and they don't even invest their own money.
[00:43:55.040 --> 00:43:55.920] It's not even their own deal.
[00:43:55.920 --> 00:43:57.920] They're just trying to take part in the action.
[00:43:57.920 --> 00:43:59.840] Well, what happens with those apartment complexes?
[00:44:00.120 --> 00:44:02.760] Somebody bought it and then five years later, they have to sell it.
[00:44:02.760 --> 00:44:04.200] They have to because of financing.
[00:44:04.200 --> 00:44:05.720] And then five years later, they have to sell it again.
[00:44:05.720 --> 00:44:07.400] Five years later, they have to sell it again.
[00:44:07.400 --> 00:44:09.560] And so they were, this is the bubble.
[00:44:09.560 --> 00:44:14.360] What happened is they were bidding up properties and now they're stuck.
[00:44:14.360 --> 00:44:17.960] So they're not giving money to their investors and they're not, and they might be taking more money.
[00:44:17.960 --> 00:44:18.360] I don't know.
[00:44:18.360 --> 00:44:27.320] That's why the deals that you and I have been in in these apartment complexes, we're getting 60% of the market value because these people are getting hurt and they have to sell.
[00:44:27.320 --> 00:44:32.200] So I think commercial real estate is definitely a bubble because of how it's been bought up.
[00:44:32.200 --> 00:44:35.400] Here's the next bubble when it comes to real estate and residential.
[00:44:35.400 --> 00:44:38.920] So this is my prediction, my crystal ball.
[00:44:38.920 --> 00:44:40.600] Here's where the bubble is.
[00:44:40.600 --> 00:44:43.560] Airbnb, short-term properties.
[00:44:43.560 --> 00:44:52.040] In Arizona alone, there is 70,000 short-term rental properties in Arizona.
[00:44:52.040 --> 00:44:53.240] 70,000.
[00:44:53.240 --> 00:45:02.200] And keep in mind, these are homes that were long-term rentals or primary residences for somebody to live in.
[00:45:02.200 --> 00:45:03.240] Those are now off the market.
[00:45:03.240 --> 00:45:06.120] That's why rents skyrocketed because there were no properties.
[00:45:06.120 --> 00:45:07.320] Now, here's the thing.
[00:45:07.320 --> 00:45:13.640] With that many properties, the amount of money, and these people, they were following these TikTok gurus on there.
[00:45:13.720 --> 00:45:14.840] Hey, I got three properties.
[00:45:14.840 --> 00:45:18.360] I make 80 grand a month and all these, they do all these fancy things.
[00:45:18.360 --> 00:45:22.120] Well, what's happening because it's everywhere, this is happening everywhere.
[00:45:22.120 --> 00:45:29.160] Airbnb is having trouble is the prices are coming down on every property that's for rent on Airbnb.
[00:45:29.160 --> 00:45:31.400] They can't get what they hoped they would.
[00:45:31.400 --> 00:45:36.200] So they were, let's say, you know, let's say bought a $500,000 home and it's normally $500,000.
[00:45:36.200 --> 00:45:39.240] And they paid $550,000 because they knew, oh, I could rent it on Airbnb.
[00:45:39.240 --> 00:45:40.520] I'll make all this much money.
[00:45:40.520 --> 00:45:41.720] So they way overpaid.
[00:45:41.720 --> 00:45:43.800] The price went up on the property.
[00:45:43.800 --> 00:45:48.640] Well, as the price went up, they eventually have this huge mortgage that they're going to have to pay.
[00:45:44.840 --> 00:45:54.240] And if they can't rent it, meaning for, let's say, people, the economy goes down.
[00:45:54.480 --> 00:45:57.600] We see the economy slowing down, inflation, everything is hurting people.
[00:45:57.600 --> 00:45:59.600] So people travel a lot less.
[00:45:59.600 --> 00:46:09.120] That, as well as supply, there's a way oversupply of properties that makes the amount of money they can make per month in rent from the short term, it's going to be hurting them.
[00:46:09.120 --> 00:46:10.720] So they're going to have to have this mortgage payment.
[00:46:10.720 --> 00:46:21.440] So I think eventually in the next year or two, we're going to see a lot of properties foreclose because these Airbnb properties were way overpaid and they're not making money and it's going to hurt the economy in the long run.
[00:46:21.440 --> 00:46:22.640] So that's my prediction.
[00:46:22.640 --> 00:46:24.640] Commercial real estate, definitely bubble.
[00:46:24.640 --> 00:46:27.760] Yeah, particularly in like tourist areas like high travel areas.
[00:46:27.760 --> 00:46:28.240] Yes.
[00:46:28.240 --> 00:46:30.640] And I would say the, well, I'll give you an example.
[00:46:30.640 --> 00:46:35.600] I have an Airbnb in Murfreesboro, Tennessee, which is just south of Nashville.
[00:46:35.600 --> 00:46:37.440] I was going to ask if you had any short-term rentals.
[00:46:37.440 --> 00:46:41.040] Yeah, I have short-term and mid-term, but predominantly long-term.
[00:46:41.040 --> 00:46:48.160] I love boring, old, long-term, and I just make money without even thinking, without worrying about turnover and the properties.
[00:46:48.160 --> 00:46:48.640] Yeah.
[00:46:48.640 --> 00:46:50.400] So Nashville, a glut.
[00:46:50.400 --> 00:46:53.120] There's so many in there, and it's just, it's terrible.
[00:46:53.120 --> 00:46:54.800] It's hard to break into that market.
[00:46:54.800 --> 00:46:56.320] And so eventually something's going to happen there.
[00:46:56.320 --> 00:46:59.600] But Murfreesboro is like 40 minutes south of it.
[00:46:59.600 --> 00:47:03.360] And so people still, like, it's a big city, 130,000 people here.
[00:47:03.360 --> 00:47:04.640] People still have weddings.
[00:47:04.640 --> 00:47:05.520] There are still deaths.
[00:47:05.520 --> 00:47:06.800] There are still graduations.
[00:47:06.800 --> 00:47:08.960] There are still reasons to come into town.
[00:47:08.960 --> 00:47:15.600] And so, you know, if you're getting a short-term property in like, you know, a town that has maybe 10,000 people, that's going to be a little harder.
[00:47:15.600 --> 00:47:20.400] But these outlying cities that people overlooked, you can buy some good properties.
[00:47:20.400 --> 00:47:20.880] Okay.
[00:47:20.880 --> 00:47:21.200] Cool.
[00:47:21.200 --> 00:47:25.360] I appreciate you sharing where the market might be headed and some of these bigger macro forces.
[00:47:25.360 --> 00:47:34.360] Because, of course, at a certain point, as we've seen in a lot of cities, the municipalities come in and say, hey, we're going to put a stop on this short-term rental game because you're taking up all our housing supply.
[00:47:34.440 --> 00:47:37.240] That's not great for the people who actually want to live here long term.
[00:47:37.240 --> 00:47:38.600] But very cool.
[00:47:38.600 --> 00:47:40.040] Dustin, this has been awesome.
[00:47:40.120 --> 00:47:52.200] Really appreciate you kind of sharing this roadmap for year one, year two, and beyond, what you can do with some systems and processes and team in place on the real estate side, on the rental property side.
[00:47:52.200 --> 00:47:53.560] What's next for you?
[00:47:53.560 --> 00:47:55.800] You've got masterpassiveincome.com.
[00:47:55.800 --> 00:47:57.080] You've got the podcast over there.
[00:47:57.080 --> 00:48:01.400] I want to encourage people to check out Dustin's free real estate investing starter course.
[00:48:01.400 --> 00:48:03.240] We'll link that up in the show notes.
[00:48:03.240 --> 00:48:10.360] And you've got your own conference, probably on year three or four of RubeCon Real Estate Wealth Builders Conference, if I'm getting that correct.
[00:48:11.160 --> 00:48:12.760] What's got you excited for the rest of this year?
[00:48:12.760 --> 00:48:13.400] You sure are.
[00:48:13.400 --> 00:48:14.440] You got everything correct, man.
[00:48:14.440 --> 00:48:15.000] Good job.
[00:48:15.000 --> 00:48:15.240] Yeah.
[00:48:15.240 --> 00:48:21.000] So my goal is to help 1 million people to invest in real estate because I quit my job in 2016.
[00:48:21.000 --> 00:48:28.360] And then as I started coaching people, because they just asking me, so friends and family members, I started coaching people and then realized how much fun it was.
[00:48:28.360 --> 00:48:30.120] Number one, because I enjoyed just talking to people.
[00:48:30.360 --> 00:48:33.240] Hopefully it comes across on my, you know, I get excited talking about this stuff.
[00:48:33.240 --> 00:48:36.520] But then I had plenty of free time, you know, 40 plus hours of my life back.
[00:48:36.520 --> 00:48:43.000] And so what's up next for me is getting even bigger into my own personal real estate investing.
[00:48:43.000 --> 00:48:46.600] I, I, building master passive income coaching people just took up time.
[00:48:46.600 --> 00:48:48.120] So I, and I had plenty of properties.
[00:48:48.120 --> 00:48:50.040] I didn't really, so I'm going to be buying more properties.
[00:48:50.040 --> 00:48:51.320] When is enough enough?
[00:48:51.320 --> 00:48:52.840] Like, do you struggle with this too?
[00:48:52.840 --> 00:48:54.200] Like the goalpost keeps moving.
[00:48:54.200 --> 00:48:55.640] You're like, oh, I got 30 doors.
[00:48:55.640 --> 00:48:56.520] Let's get to 50.
[00:48:56.520 --> 00:48:57.480] Like, but why?
[00:48:57.480 --> 00:49:00.280] Like, if you don't need it, why, why go through it?
[00:49:00.280 --> 00:49:01.400] So great point.
[00:49:01.400 --> 00:49:09.000] So for me, once I got to 30, I think 33 or something like that, I had enough money coming in and it wasn't a drive, like it wasn't driving factor.
[00:49:09.000 --> 00:49:15.680] But here's an amazing thing: I started realizing I should buy more properties, but I didn't really need to.
[00:49:14.840 --> 00:49:18.160] But then I realized, oh my goodness, I got five kids.
[00:49:18.480 --> 00:49:20.240] Why don't I help them to buy?
[00:49:20.240 --> 00:49:27.920] Or why don't I buy more so I can either give them, give to them or just help them to buy their properties and go that route.
[00:49:27.920 --> 00:49:33.520] So now it's growing because I have five kids to be able to make sure that they have, you know, 10 properties each.
[00:49:33.520 --> 00:49:36.720] That'd be another 50 properties that we're all working together to buy.
[00:49:36.720 --> 00:49:37.120] Yeah.
[00:49:37.120 --> 00:49:37.760] Okay.
[00:49:37.760 --> 00:49:38.160] Yeah.
[00:49:38.160 --> 00:49:39.920] What a, what a legacy to leave behind.
[00:49:39.920 --> 00:49:40.240] Yeah.
[00:49:40.240 --> 00:49:51.280] And we, we kind of just touched on it briefly, but kind of recycling the equity where it's like, you know, at a certain point, plus appreciation, now I can get a loan against this existing property and put that into the next thing.
[00:49:51.280 --> 00:49:55.840] And at a certain point, there's a flywheel that starts to spin.
[00:49:55.840 --> 00:49:58.800] And I get the sense that it's kind of, you get a kick out of it.
[00:49:58.800 --> 00:50:01.680] It's a fun game for you and this whole legacy factor too.
[00:50:01.680 --> 00:50:02.240] Absolutely.
[00:50:02.240 --> 00:50:03.680] It's so much fun.
[00:50:03.680 --> 00:50:04.240] Yeah.
[00:50:04.240 --> 00:50:05.840] But one other quick thing I want to share with you.
[00:50:05.840 --> 00:50:07.280] I don't think I told you about it.
[00:50:07.280 --> 00:50:11.120] So, and I just mentioned it earlier, incomebuilder.io.
[00:50:11.120 --> 00:50:15.440] Incomebuilder.io is my new software that I'm creating that is right now.
[00:50:15.440 --> 00:50:16.000] It's free.
[00:50:16.000 --> 00:50:18.880] So for right now, for a limited time, you can get in there for free.
[00:50:18.880 --> 00:50:24.960] And I'm building this out because I realized, not that there wasn't any good software, because there are plenty of good software.
[00:50:24.960 --> 00:50:26.720] This was like a deal analyzer tool.
[00:50:26.720 --> 00:50:27.840] So it's even more than that.
[00:50:27.840 --> 00:50:28.480] Yeah, that's it.
[00:50:28.560 --> 00:50:37.760] So right now it's, we started with analyzing deals because that's the number one thing that is easy to jump into and it helps people to make sure they're getting wins.
[00:50:37.760 --> 00:50:44.720] And so it's green light deal analyzer is basically what it's called, where you have, if it fits this criteria, you're going to have a green light.
[00:50:44.720 --> 00:50:46.160] If it doesn't, you're going to have a red light.
[00:50:46.160 --> 00:50:50.800] We're going to have AI to kind of walk you through how to actually make sure you're getting all green lights.
[00:50:50.800 --> 00:50:51.760] But that's number one.
[00:50:51.760 --> 00:50:53.760] But here's the thing: you're just analyzing.
[00:50:53.760 --> 00:50:55.440] That's just a tip of the iceberg.
[00:50:55.440 --> 00:51:05.960] All my students, I coach them how to find properties, how to analyze properties, how to finance properties, how to get insurance for properties, how to manage the properties, how to do accounting for your properties.
[00:51:06.360 --> 00:51:11.160] And I thought, I want a software that walks a property, not the person, but the property.
[00:51:11.160 --> 00:51:18.600] So, if you have, you're a user, you create a property, you find a property through my software, you analyze it, but it's a portfolio.
[00:51:18.680 --> 00:51:21.960] I'm trying to gamify it too, where it's like, you don't need to go for me for coaching.
[00:51:21.960 --> 00:51:23.080] You just follow the steps.
[00:51:23.080 --> 00:51:24.200] Like, what's the next step?
[00:51:24.200 --> 00:51:25.080] Here's the next step.
[00:51:25.080 --> 00:51:29.400] Because, again, like I said, I created a system, a business that I created over and over again.
[00:51:29.400 --> 00:51:34.920] So, we're going to have it to where you're even collecting rents, you're managing your portfolio in this app.
[00:51:34.920 --> 00:51:37.480] And my goal is to help people become an income builder.
[00:51:37.480 --> 00:51:38.040] Yeah, yeah, yeah.
[00:51:38.120 --> 00:51:39.800] You get that flywheel spinning for sure.
[00:51:40.120 --> 00:51:41.800] Well, this has been really cool.
[00:51:41.800 --> 00:51:49.240] You definitely got me thinking harder about adding some direct real estate ownership back into the portfolio.
[00:51:49.240 --> 00:51:50.040] It's been a long time.
[00:51:50.040 --> 00:51:51.800] So, there's that.
[00:51:52.040 --> 00:51:54.440] I'll chalk that up as a win for Dustin.
[00:51:54.440 --> 00:51:56.120] Not that we were trying to have any sort of debate here.
[00:51:56.120 --> 00:52:00.440] But let's wrap this thing up with your number one tip for side hustle nation 2025.
[00:52:00.440 --> 00:52:02.440] Edition does not have to be real estate related.
[00:52:02.440 --> 00:52:04.440] You got side hustles on side hustles here.
[00:52:04.440 --> 00:52:10.760] The number one tip I would give everybody is to honestly, it's never give up.
[00:52:10.760 --> 00:52:12.840] If you give up, then you fail twice.
[00:52:12.840 --> 00:52:20.600] Like, let's say you buy a house and you do it wrong, or you start a side hustle and you do it wrong and you fail once, which means it didn't work.
[00:52:20.600 --> 00:52:21.480] Well, you fail twice.
[00:52:21.480 --> 00:52:22.840] You ultimately fail if you give up.
[00:52:22.840 --> 00:52:23.800] You didn't learn from it.
[00:52:23.800 --> 00:52:24.840] You didn't get better.
[00:52:24.840 --> 00:52:35.320] My suggestion is definitely figure out, like, use the failure as a way to learn so that you can grow and not fail a second time, but never give up.
[00:52:35.320 --> 00:52:35.880] Very good.
[00:52:35.880 --> 00:52:36.600] Never give up.
[00:52:36.600 --> 00:52:37.560] Learn what works.
[00:52:37.560 --> 00:52:40.120] If somebody else is doing it, hey, why them?
[00:52:40.120 --> 00:52:40.840] Why not me?
[00:52:40.840 --> 00:52:42.680] I love that kind of mentality.
[00:52:42.680 --> 00:52:44.200] Like, if they figured it out, I can figure it out.
[00:52:44.200 --> 00:52:47.280] We'll link up all of Dustin's resources in the show notes for this episode.
[00:52:47.360 --> 00:52:52.880] All you got to do is click the show notes link in the episode description and it'll get you right over there.
[00:52:52.880 --> 00:52:54.880] A couple takeaways from me before we wrap.
[00:52:54.880 --> 00:53:01.520] Obviously, this long-term mentality: the more properties you can stack, the more systems you have in place, the better off you're going to be.
[00:53:01.520 --> 00:53:05.760] You're going to be able to weather some capital expenses that might come up or some problem tenants that might come up.
[00:53:05.760 --> 00:53:09.920] I was kind of reminded of the Warren Buffett line when you're talking about captured equity.
[00:53:09.920 --> 00:53:12.320] You kind of like you make your money when you buy, not when you sell.
[00:53:12.320 --> 00:53:15.520] It's like, you know, trying to buy right, not trying to buy at inflated prices.
[00:53:15.520 --> 00:53:21.200] And then building the team, putting the team and the systems in place so that you can really be the income builder.
[00:53:21.200 --> 00:53:27.120] You can really be the owner investor rather than the person who's getting calls from tenants at three in the morning.
[00:53:27.120 --> 00:53:28.960] Hey, the toilet's leaked, stuff like that.
[00:53:28.960 --> 00:53:32.880] But Dustin, big thanks for coming by, sharing your insight once again.
[00:53:32.880 --> 00:53:36.000] Thanks to our sponsors for helping make this content free for everyone.
[00:53:36.000 --> 00:53:41.840] SidehustleNation.com/slash deals is where to go to find all the latest offers from our sponsors in one place.
[00:53:41.840 --> 00:53:44.720] Thank you for supporting the advertisers that support the show.
[00:53:44.720 --> 00:53:46.480] That is it for me.
[00:53:46.480 --> 00:53:47.920] Thank you so much for tuning in.
[00:53:47.920 --> 00:53:51.600] If you're finding value in the show, the greatest compliment is to share with a friend.
[00:53:51.600 --> 00:53:55.040] So fire off that text message and help spread the word that way.
[00:53:55.040 --> 00:53:57.760] Until next time, let's go out there and make something happen.
[00:53:57.760 --> 00:54:00.720] And I'll catch you in the next edition of the Side Hustle Show.
[00:54:00.720 --> 00:54:01.360] Hustle on.