Cash Flow Guys Podcast

Recently I sold a property and prior to listing it for sale, I searched for sold properties in MLS and public records.  I prefer to keep tabs on what’s happening in this ever-changing market to be sure I am capturing the most up-to-date data available.  My searches did not reveal any other recent sales that were comparable to the home I was selling. The seller got an appraisal which came back at $320,000, we then listed it at that price. The same day as listing it, I began my paid Facebook ad campaign.  A Facebook friend of mine saw the ad and messaged me that he has just bought the house across the street from the one I was selling and sold it for $55,000 MORE than we were asking. Needless to say, the seller wanted the price raised, which we did, and subsequently sold the home for $370,000 even though it was smaller than the other house. Stories such as this remind me of how powerful a network can be.  Had my Facebook friend not offered up this otherwise unavailable information, we could have wound up selling the home for $50k less. This is why I continually stress the importance of building a database and a local network in the area you plan to focus on.  Ignoring this advice could likely cost you much more than $50,000… In today’s times, you can hire someone quite reasonably to help you build an online and local network.  Attending networking events of all kinds, not just real estate ones goes a long way towards building that ever-important local network.

Do you have the courage to crash? While watching a seabird hunt recently I watched him take action to go in for the kill on his next meal. He tucked his wings to reduce wind drag and slammed himself into the ocean (head first) to capture his dinner.    The seabird spends much of his day flying around as opportunistic feeders do, but, when he sees the opportunity he does not think much about it, instead, he tucks his wings and splash!   This is how he eats each and every day.   Sometimes he misses, storms arrive, and churn up the water which hides his meal from him...does that mean he should go home? Nope! He simply keeps looking by flying around and when the right meal is caught he swallows it.   So what’s stopping you from doing the same? Are you looking for opportunities each and every day? Are your actions intentional?   It's easy to say everything is overpriced, or complain about how "hot" the market is, but know this...there are still plenty of deals out there for those who are willing to do that work.   In this episode, I explore ways to help you build the courage to be like the seabird and CRASH!

In this episode, I interview Mike Marino who recently realized a $288,000 Tax-Free Profit earned from his real estate activities.  Many don’t realize that if you take the time to educate yourself on financial matters, the benefits can far exceed your wildest imagination.  By surrounding yourself with a team of people who have expertise in subjects you do not, unimaginable wealth is possible.  In this episode, Mike breaks down the under-the-radar strategies he has employed to supercharge his wealth-building results.

There was a time where I thought it was best to do just about everything myself, partly because I lacked the patience to invest the time to find good people to handle specific tasks for me on a regular basis. There was also a time where I mistakenly thought of some of the experts in the real estate industry to be a thorn in my side or worse...deal killers.  This was a clear example of a misguided mindset holding me back. Once I began to realize that bringing in the experts meant that insure my business against losses everything changed for me.  You might be wondering what losses I am referring to, those I discuss in this week’s episode.

As many of you know I have moved to Key West this year as a full-time resident.  I decided to ramp up my business as a Realtor down here in paradise because….why not, it’s hard to say no to the commission on the sale of million-dollar houses. Moving down here meant starting from scratch for the most part. None of my Realtor marketing applies down here because I am now needing to target a completely different type of client. As a Realtor, I focus my marketing dollars on attracting sellers. This same approach is what I have used for years to find motivated sellers. But moving to a new market means I have to learn this market just like I did the Tampa Bay Market. What does that mean? First, every day I walk, ride my bike, or drive down a different street. Every day I do this when I leave the house, never taking the same way home twice if possible. I do this to discover the nuances of my new home city. Often I meet new people when walking or riding my bike which is why I prefer those methods over driving. By walking I get to see everything that I would miss if I was driving. The other day Jill and I celebrated our 13th wedding anniversary and decided to spend the day on a walkabout. We walked down the street to breakfast at a new place we have never been to.  We walked the shops and galleries and low and behold met someone who knew of me because of a mutual friend. This person’s parents are selling a home on the island which is listed by a friend of mine. Ironically, I met the parents a week prior while my fund partner Mike and I were out property shopping. Long story short she is going to be getting her real estate license which means perhaps she will join my team down here in Key West as a buyers agent. During our day out and about I identified about a dozen properties that need my help which I plan to skip trace and begin marketing to. You see, these are opportunities that I have driven by for years, as has everyone else, and likely nobody has put much effort into trying to solve these problems. Last week I went down to the code enforcement meeting and sat through it. Why? Because I wanted to learn who the code enforcement officers are as well as their mannerisms. I also had the opportunity to hear the staff from the planning commission address issues and watched them work with the residents. If you are looking for problems to solve, code enforcement is a great place to start. Hint: These days most meetings are recorded, you can listen to the recordings while you do other things and listen for the addresses and case numbers, you will also learn who the movers and shakers are in town. This week I dropped over $10,000 on a youtube video ad agency to find motivated home sellers in Key West, the plan is to saturate the market with my marketing to outspend all other Realtors in key West. The one person who willing to spend the most to get and close a lead wins.

Many say that inflation estimates are unreliable. This theory can be proven by simply watching just about any press conference involving Fed Chairman Jerome Powell as he struggles not to squirm when asked questions relating to inflation. The US Department of Labor recently reported a 4.2% increase in the annual consumer price index which means the cost of goods we purchase has increased by almost 5%. That's ninja super secret code for INFLATION A recent Wall Street Journal article mentioned that economists feel that during inflationary periods, real estate far outperforms the stock market since its a known fact that stock valuations often suffer as inflation increases (which may be why Washington is supporting Wall Street Denial). The problem is that far too many landlords are afraid to raise their rents because they feel they will lose a tenant if they do. When a tenant leaves it means rehab is needed between tenants and for cash-strapped landlords, this presents a real problem. The reality is that if you don't raise rents to outpace inflation, you will likely become a victim of inflation. Being a landlord is tough enough, so why make it harder on yourself? One strategy that's becoming popular is a change of use. This means changing the type of tenant you serve which most commonly means conversion from a long term to a short term tenancy. Opportunities to accomplish this exist in virtually every market across America. Some properties can be converted from commercial to residential if the market supports them. Previous warehouses, mills, and other such commercial assets are being converted to multi-family niche housing in many markets. Robert Kiyosaki teaches that there are three sides to every coin...Heads, Tails, and the edge...Learn to examine all sides. Are you an accredited investor interested in growing your nest egg? If so head on over to KeyWestCashflow.com/Call to schedule time with Michael Marino and I as we build our Key West Investment Syndicate.

It’s not new news that we are still in a seller’s market and very likely will remain like this for a while yet. Some choose to sit on the sidelines, allowing their money to get swallowed up by inflation instead of taking steps to buy property despite market conditions.   As most of you know, I’m not a believer in named markets, because there is always more than one way to accomplish a goal, especially if it’s buying a house.  In this episode, I discuss a few little-known tips to help real estate buyers get their offers accepted.

Over the last several years many people have asked and wondered how I specifically earn my income.  Was I a drug dealer?  Did I have rich parents?  Nope! In this episode, I peel back the curtain for everyone to learn where my income comes from. What's important about this episode, in particular, is that you understand that it's because I have multiple streams of income that I don't have to ever go back to work. By focusing more on several smaller streams instead of one larger one I bet insulate myself from sliding backward financially because if one income stream suffers, the others continue to produce. The same is true in real estate, it's not a bad idea to spread yourself out a bit, perhaps by investing in different types of assets or deals while also doing some passive and active investing. As you see an opportunity, capture it, add it to your portfolio and then go out and get another.

Early on I learned from my Dad that if you want something in life you better go get it because nothing will ever be handed to me.   He also taught me the importance of “going for the close” also known as asking for the business. Humans tend to spend a great deal of time thinking about what they want and more time coming up with reasons they cannot get what they want. Such thoughts often lead us down a rabbit hole of doubt which eventually leads to our belief that whatever we want is behind some sort of roadblock that we won’t be able to overcome. Here are a few examples of what I am referring to: Not applying for deal funding because you don’t feel you will be approved. Not wanting to answer the phone when a potentially motivated seller calls because you don’t know what to say to them. Being resistant to spend any time with a seller in fear you will look stupid by asking questions or not feeling like you know the right questions to ask. Refusing to make offers in fear of being rejected. Feeling that a larger valued deal is “too big” or “too expensive” for you to handle. Fear of being rejected by a seller or Realtor because you “can’t afford” to buy anything worth having. What I just mentioned only scratches the surface as you might imagine. Here’s the reality of what’s happening in the seller’s mind: Did I overprice this property? Will people heckle me or be mean if I overprice my property? What if I put a sign-out and nobody shows up? Well, I could drop the price but then I’d be admitting I overpriced the property to begin with and therefore look stupid for sure! How do I really know I am getting a fair price for my property? What if I sell it too cheap? If it sells too fast doesn’t that mean I sold it too cheap? If I think I sold it too cheap can I back out of the deal? What if buyers bring Covid into my home I don’t have the energy to clean up or organize and buyers coming through will judge me as a nasty mess for not being clean. How do I know if I picked the right Realtor? Should I even hire a Realtor or do it myself and “save the commission” What if we are not yet at the top of the market, I wonder if I should wait a little longer? Landlord Sellers think: Buyers walking through my units will anger my tenants If my tenants know the property is for sale they will all move out suddenly What if the new landlords make my tenants move out suddenly? All of this leads up to one thing...STRESS!! Now that we covered all that, I think it is fair to say that both buyers and sellers are under tremendous pressure when trying to complete a real estate transaction. Regardless of the current market conditions, the most effective way to overcome the majority of these issues is to position yourself as transparent. Be approachable, be willing to sit down with your fellow human, look them in the eye and work through the process. No matter how hot or cold a market is, there will always be buyers and sellers with problems to solve. In 2021 face to face has become a less popular option but services like Zoom and other apps make it easy to communicate with others via video or audio. Use these services, open up dialogue and talk things out. When I am brokering a property sale transaction for a buyer or seller, I encourage all parties to get on the phone or meet in person to negotiate the transaction. I want active participation from all parties. It’s these meetings that bring forth the best results for all parties in most cases. I realize that for many the thought of sitting down face to face with “the other side” as they say may be terrifying. I assure you that if you give it a try you will likely be pleasantly surprised by the end results. I also realize that many people simply won’t agree to an open discussion or negotiation due to the crippling fear of confrontation. Regardless I ask you at least try by asking for a meeting, the worst thing that can happen is the other party would say no. Please know that the other party is as scared or nervous as you are.

For the last several years, many have enjoyed the rewards of investing in various forms of cryptocurrency under the assumption they could avoid the prying eyes of the government.  Some bragged about being able to conduct business and earn capital gains free of the worry of taxation. Those days are over… Last week I was listening to an episode of Rich Dad Radio titled “The IRS Versus Bitcoin” where I stumbled upon some shocking news reported by CPA Tom Wheelwright, a Rich Dad advisor. Tom warned listeners by saying that anytime you use or trade cryptocurrency, it becomes a taxable event!  He went on to say that if in 2020 you did ANYTHING besides buying cryptocurrency you must declare it to the IRS when filing your taxes, if you don’t, it’s a FELONY. It seems that any transaction except buying bitcoin is subject to a tax beginning at a rate of15% for both the user of the bitcoin and the receiver.  There is also capital gains tax that will apply to many transactions. So much for bitcoin being unregulated! We will have to wait to see if the IRS can gain any traction in regard to enforcement…but that never really stopped them in the past. That got me thinking…in today’s brave new world it seems our elected leaders have the ability and the gall to pass just about any legislation they are paid to make into law.  These policies and laws are often created without much thought to how they will impact everyone they represent. It’s been said many times that if you simply pay attention to what the government wants you to invest in, you can enjoy a relatively tax-free or at least tax favored lifestyle.  Those that complain about how things are an attempt to circumvent the system are often found out and severely punished. Before your mind goes down a political rabbit hole, you must understand that the IRS does it’s thing regardless of who is in office, yes, the IRS’ activities are influenced by the White House, Congress, and Senate but that doesn’t change the fact that in a basic sense, taxation, for the most part, can be avoided. Here is a stackable nugget of what I have learned thus far which has helped me legally reduce my tax obligation year over year, while never having to sacrifice my lifestyle to accomplish it. The Government does not like you flipping anything, houses, apartments, businesses, whatever…they want you to earn in streams of income, not piles. The Government wants you to provide housing, not buy and flip it and by doing so decrease affordability. The Government these days wants you to invest in renewable energy sources, soon, expect the tax benefits of investing in oil and gas to be reduced or 67disappear. When you generate piles, they are easy to see and discover, yet nobody is looking for streams to steal. Many say that taxation in and of itself is a crime.  So if you were a criminal looking to steal money, wouldn’t you gravitate towards looking for the easy to see and easy get piles to steal from? Of course, you would. I’m not suggesting you hide income from the government, they will find it eventually so why hide it, instead, structure your affairs such that you mostly earn streams, and can turn piles into streams.