Cash Flow Guys Podcast

Getting started is the most important step.  You can plan all you want but until you start, planning is futile because everyone finds that the plan needs constant tweaking. Begin with a budget:  There is no such thing as a free lunch.  To build any business a financial investment is required at some point. Below is a list of some of the things to be considered when writing out a budget.  This is good practice for once you have an asset to manage. Typical Expenses: Direct Mail - how many pieces? letter, postcards, cards, etc.  There are many schools of thought here, but remember that as the saying goes “Everything works, nothing doesn't”.  To me this means that we must take action on getting our word out there so people know what we are looking for.  We need to use our marketing to educate the marketplace on our needs in regard to money, deals, team etc. Business Cards-  People spend a ton of time getting caught up on business card designs.  My best advice is to keep it simple and remember that the purpose of a business card is to provide someone your contact details.  Don’t try to make it something it isn’t (a billboard).  You should use your meeting with the person you are providing the card memorable enough to make a billboard unnecessary. Bandit Signs / Other Signage - depending on your marketing strategy, these may or may not be necessary.  Regardless, prepare for many of them to get stolen or confiscated by code enforcement, therefore budget for replacements. Facebook / Instagram / YouTube - Google Adwords - A good ad agency should be able to help you determine the budget for ad spend.  Take their advice, this money isn’t going to them, its going to Facebook. Entity Creation (only if deemed necessary) DIY or Lawyer?  I vote to use a Lawyer, BUT not until you actually NEED an entity.  Don’t get sucked into elaborate asset protection setups when you don’t have any assets to protect.  It would be a shame to set up a structure only to have to change it later.   Equipment / Supplies budget (think minimalistic) Laptop, cell phone with wide angle camera lens, don’t go crazy here and keep it simple.   Virtual Tools: It’s easy to rack up a small fortune in outbound recurring payments with all the services available to us these days.  Carefully examine the necessity and value of a specific service before shelling out your hard earned money.  Some great tools are:   Rentometer.com/Pro RealEstateTools.com CallRail.com Investor Fuse RealtyJuggler.com Mojo Dialer Mailchimp Constant Contact Drip Active Campaign Clickfunnels   If you setup your spending ahead of the actual spending you will be better able to focus on building your business and not having to worry about money as much.  Taking the time to write out a solid budget and then sticking to it is most likely the most important thing you can commit to as a new investor.   Lastly, DO NOT build your business with a credit card!  

Today's episode is supported by our friends at Rentometer. Rentometer is your source for up-to-date rent information anywhere in the U.S.; double-check current rents or research property investment opportunities. Rentometer has a Free Trial that gets you immediate access to all their PRO features like zip code and Neighborhood searches, and their Google Street View integration. Check out rentometer.com/pro. Now...let’s get to it shall we? Reliable tenants make life a lot easier for a landlord. Taking steps to keep yours will save you a lot of money and headaches in the long run. The national average cost of turning over a unit after a tenant leaves is $2,500. Reliable tenants make life a lot easier for a landlord. Taking steps to keep yours will save you a lot of money and headaches in the long run. The following tips will help you hold on to your best tenants. Keep them in mind to make your job significantly less difficult. Respond Promptly Don’t drag them out hoping the situation will correct itself because it won’t, address issues swiftly.  Be sure to provide all tenants with multiple contact methods to reach the property manager.  A professional management team should be easy to reach. Make Upgrades Tenants want comfortable homes. Set it up so they take mental ownership.  If you are a slumlord, you will be treated as one. Certain additional amenities, such as parking spots, pools, and fitness centers have also been shown to dramatically boost tenant retention rates. Consider Rewards Management companies that implement rewards programs don’t merely keep their best tenants: they also attract more quality tenants when filling vacant units. Rewarding good behavior shows you value your relationship with the building’s occupants. They’ll appreciate the gesture and be much less likely to move out as a result. Reach Out Early for Renewals Don’t wait until the last minute to contact tenants about renewing a lease. Contacting them 90 days ahead of time is smart for several reasons. First, it gives you more opportunities to learn if certain factors are making them consider moving out. That means you can address those factors beforehand. If there’s nothing you can do to convince a reliable tenant to stay, reaching out early at least gives you more time to find an equally good replacement tenant quickly. Train Everyone Accordingly Do you have several staff members? Making sure they treat tenants with the respect they deserve is just as important as making sure your own behavior is respectful. Train all staff members accordingly. When someone besides you interacts with your tenants, you want to know they aren’t making the wrong impression. Charge Fair Rent Tenants don’t want to spend more money than they have to on rent. As a landlord, make sure you’re constantly researching average rent costs in your area. Charging a fair market price is key to avoiding turnover. All landlords know reliable tenants aren’t always easy to find. If you already have them, you want to do everything you can to keep them. These tips will help.      

In this week’s episode, I interview Brett Burky from Paperstac about exactly How To Buy a performing or non-performing note for investment.  Paperstac.com is an online platform that helps note buyers and seller connect and complete note investing transactions online. During this episode, Brett discusses how the Paperstac system works as well as the many benefits to both buyers and sellers of notes.  “Back in the Day” note investing wasn’t a very efficient process.  The industry was essentially closed to the “little guy” and was a playground for the corporate banking elite.  With services like Paperstac, the average person can go online, research an investment opportunity, have the ability to fully screen the investment and make a purchase all from the comfort of home. The service adds much-needed transparency to the note buying and selling business, while making it easy to complete a transaction.  Being able to verify data is a critical requirement for any investor in order to help them make logical decisions with their investment capital.  You can also use services like our sponsor Rentometer to verify rents of properties found on Paperstac which will help you accurately underwrite each opportunity and establish exit strategies that make sense. When we consider buying a note secured by real estate, we look at the asset’s feasibility as a rental in the event we wound up with the property and decided to keep it as a rental.  Rentometer allows us to see the current rent amounts in the area where the property is located.  By using the Google Street View integration included with the Rentometer service I can quickly see what the neighborhood rentals look like and get a good feel for the area I am buying into.  Be sure to visit Rentometer.com/Pro and sign up for a free trial today!

Setting the rent amount for your property can be a daunting task, in fact one small mistake can cost you a year or more of lost rental income.  There are many methods available to determine what fair market rent can and should be and in this episode we cover several of the most popular.    5 ways to set fair market rents Stay Current with economic and business conditions in the area:  Knowing what is going on in your market will serve you well, for instance, in my small town developers are building a large multi family development.  Its my feeling that in the short term this could increase rents as the developer fills up newly built apartments.  the down side of this is that during a recession, the larger apartment communities are often first to drop rents in order to maintain occupancy levels.  Soon, small investors follow suit which I am not keen on. Use Rentometer and Craigslist to stay up to date on comps:  our show sponsor Rentometer is our go to source for finding comparable properties that have been rented recently.  By using factual historical data we glean a good picture of what’s happening in our local market.  What I like about Rentometer the most is the ability to separate the results based on whether the property is a house or an apartment.  I find this very helpful in determining a more accurate result. Talk to property managers and appraisers:  These practitioners are a valuable resource because they are immersed in the rental arena every single day.  The rental amounts they give are often conservative, in order to make it easier for them to rent your place out.  I usually add a little to what they say to arrive at a more reasonable rent amount that allows me to also properly maintain the property. Section 8 Rental Amounts:  I know what you are thinking..”NO WAY” but I am here to tell you that Section * rents are often above market rents in many markets across the area.  This is a great data point to use to show a tenant that your rent is fair if slightly below Section 8 standard rates.  To find the rates for your area, visit your local housing assistance office and even better, have your property “Section 8 Qualified” to obtain a more accurate figure.  My personal belief is that these tenants can be a hassle free solution to many landlords provided they are good landlords that take good care of the property and better care of the tenants.  if you treat any tenant poorly, you can expect a less than satisfying relationship so simply be good to your tenants Check statistical resources: Markus Millichap, etc, look at for sale listings of like kind properties that often provide demographic data.  I often look at listing on loop-net and from deal sourcing that my team does to see what research the brokers have done to determine the fair market rents.  Even if they embellish on the rents, they will often include their data source which allows my team to use the same sources, even if we come up with a different end result that is more accurate.  

First, get over to Rentometer.com/pro and get signed up today to learn about what is happening in YOUR rental market. As landlords and property managers you have many things you are responsible for when it comes to your property. There are some things that fall under the care of your tenants. Here are seven things that tenants are responsible for when it comes to maintenance within your property. Note:  I am not a lawyer and the items mentioned are not necessarily required by law. Mold prevention If there is mold on the property caused by a faulty water line or plumbing you (as the landlord) are responsible for any mold that develops from those conditions. If, however, the mold occurred because there was not proper ventilation in the bathroom while your tenant was showering, they are responsible for any mold or mildew.  Likewise leaving piles of damp and dirty clothes in a corner can also lead to mold or mildew that the tenant is responsible for cleaning up. If mold or mildew occurs on your walls or furniture because of poor ventilation it is up to the tenant to clean it off. Bugs When a tenant moves in it is up to you to have the house bug and pest free. Once they have moved in it is your tenant’s responsibility to keep it that way. If your tenants have poor hygienic conditions which cause pests they could be held responsible financially for ridding the house of the pests. This is something that you want to be sure is in the lease before anyone moves in. Painted walls If you are planning on letting tenants hang pictures or other objects on your walls you may want to specify in the lease how you want those holes repaired when the tenant moves out. They are responsible for taking care of the walls however they may think that patching them is enough. In my units, the lease states that the repairs must be made to the satisfaction of the property owner or my representative.  This means painting walls to match the current colors also. Prompt Notification For things that tenants are not responsible for it is up to them to contact you in a timely manner. If they do not contact you any other damage caused by the original problem can be deducted from their security deposit. You need to make sure the lease specifies what you consider a timely manner. Also if your tenants cannot get a hold of you they may repair the problem and expect a reduction in rent for the month or their money back for any repair costs. If you do not want your tenants making repairs you must specify that in your lease also.   Garbage You must decide if you are going to pay the waste disposal fee or if you are going to include it in your tenant’s rent. Either way, they are responsible for disposing of garbage on the property. It is important for hygienic reasons to maintain adequate garbage control. Make sure you let your tenants know when and where to dispose of their waste products. Lawn Work If the lease states that lawn work is the tenant’s responsibility then any ordinances that they violate will fall under their responsibility. They must take care of any landscaping needs and make sure the property is free of hazards. If they want to plant a garden, they must make sure it does not violate any state or local ordinances.  If the property is fined because of failure to maintain landscaping your tenant will be responsible for paying the fines. Septic systems You must include a clause in your lease regarding your septic system. Proper maintenance will help the system last a long time. If the septic system is damaged because of roots or other natural causes it is your responsibly to take care of the maintenance fees. If you have listed items that should not be put into drains and listed them in your lease and your tenant has ignored this list it will be the responsibility of your tenant to pay the bill for any damage caused to your septic system. Any damage to pipes or other parts of the system caused by pouring things down the drain that were not supposed to be there or hair clogs is the tenant’s responsibility. As a landlord or property manager, you need to be aware of your rights when it comes to repairing things around your property. Including maintenance items and preventative measures in your lease will help to draw the line when it comes to repairs and upkeep for your property. Be sure your tenant knows what is expected of them before they move into the property.  

This week I want to tell a brief story of a courageous man I witness complete a very difficult task recently.  I won’t spoil the episode by spilling it out here, however, I will use this witnessed event as a transition to discuss the topic of courage. Regarding courage, the waiting list to be notified of the release of my Brand NEW Mailbox Money 101 Fast Start Program, go to http://CashFlowGuys.com/MailboxMoney101 Courage is defined as “the ability to do something that frightens you” and is also defined as “strength in the face of the pain of grief” and I am here to tell you it takes a ton of courage to succeed in Real Estate investing.  Let’s cover a few common things that require a great deal of courage to accomplish: The courage to make offers:  "Oh geez, what if my offer gets accepted?”  "What if the seller gets mad at me because my offer is too low or too creative?” Both of these situations can be overcome by simply having the courage to be different than everyone else in how you approach the situation.  Instead of blindly sending over an offer via email, direct mail or even fax, take time to learn about why the seller is selling.  Learn what they plan to do with the proceeds of the sale. Fear in offers getting accepted: Surprisingly this is a very common thing, and the courage to overcome it can sometimes feel impossible unless you are carrying a suitcase of cash!  If you follow the steps above and take time to get to know the seller, you should feel better about the situation and be better prepared to have the courage to push through the process of funding the deal.  Funding the deal could mean the seller accepting payments for their equity (which is more common than you might think), obtaining a bank loan and/or raising private capital for all or part of the monies needed to close on the property. If you are anything like me, you disdain disappointing people.  The reality is that it takes courage to get good at saying no when presented with an opportunity that simply does not meet your criteria.  This can mean saying NO to a seller, a wholesaler or a Real Estate Broker.  Although uncomfortable, its critical to have the courage to walk away because you know deep down this is the right thing to do.  As Robert Helms says “Do the math and the math will tell you what to do”.  That statement means that you must do ALL the math and use factual data to support your calculation in order to keep from losing money.  Investing is about earning returns, not taking losses, by slowing down and applying logic, confidence in your decision to proceed or walk away will be easier to achieve. Lastly, registration is open for the next 12-week Mailbox Money Group Coaching program, you can learn more about that at http://MailboxMoneyCoach.com   To get on the waiting list for the brand new Mailbox Money 101 course go to http://Cashflowguys.com/MailboxMoney101 to be notified the minute the course is available.  

In this episode, I discuss a weird situation that occurred while networking at the event regarding the discussion I had with another investor. I watched this person wander around the room throwing himself at anyone who would have them. His strategy was to ask your name and then demand to know the exact size of your portfolio in the second sentence! This guy didn’t even introduce himself first, it was like this, HI, Who are you? How many doors do you have? Just like that. I really felt sorry for him, clearly, he has little to no networking experience whatsoever. The next thing he said was "I own 600 doors" (he shared this without me asking any questions).

This week I speak with Larissa Green who is the Education Director at Advanta IRA.  Advanta is a Self Directed IRA Administrator whose primary mission is to be a custodian of records for those who choose to have a self-directed IRA. A Self Directed Retirement Account allows the account holder to control their own retirement plan via the self-direction model.  In short, with a SDIRA you can pick what your account invests in.  The list of things you cannot invest in is very short and usually tied to some types of currency, antiquities, and insurance products/investments.  Everything else is pretty much fair game (as long as it's not illegal). During this episode, we discuss lots of creative examples that people have invested in over the years to grow even tiny balance IRA’s into respectable amounts.  By self-directing your retirement funds you eliminate lots of fees and commissions that are common to stockbrokers and financial planner supervised investments.  Imagine the possibilities of what you could do with all that extra money? Another huge benefit is that companies like Advanta keep us compliant with IRS regulations and also help monitor the progress and valuations of our investment accounts.  Additionally, they help keep us in check by providing a baked in system of check and balances that are required in order for your funds to be dispursed. This episode is a goldmine of information so buckle up, grab a notebook and enjoy! Want to brainstorm with me on ideas to supercharge YOUR Self Directed IRA?  Let’s get on call and discuss tons of creative investment strategies available to you in addition to what is considered common in Real Estate.  Use the opportunity to get on a call with me to boost that low balance to one that will soon be able to invest in bigger deals, while maintaining control over every penny the whole time!  You can book a slot on my calendar at http://CashFlowGuys.com/AskTyler

In this episode, I discuss limiting beliefs that hold good people back from accomplishing great things.  As Jim Rohn says “we get paid for bringing value to the marketplace”.  This applies to EVERY business all over the world, not just real estate investors. Having the proper focus and mindset geared toward solutions instead of problems is one element that separates allows us to see, feel and experience success.  I mention several examples of people who are bringing value to the marketplace and also offer suggestions about how you can accomplish the same.  In order for anything to get accomplished, we have to decide that we won’t accept the status quo, instead, we need to innovate, to decide that things will happen for us and then execute the tasks necessary to get us over the finish line. One of the first things that hold us back is believing that we need to save our own money to buy assets.  This might be true if you were getting started in the stock market, but in real estate, you can use OPM or “Other People’s Money” to acquire assets. Some folks feel that they must start as a wholesaler or house flipper before they earn the right to buy property and keep them.  Others feel a real estate license is required, not true!  What IS required is a huge amount of focus, determination and drive to make it happen. The biggest reason most people succeed is that they are first willing to “get uncomfortable” and remain uncomfortable in order for them to accomplish what they needed with the proper amount of focus to stay on track.  When we are comfortable, we generally lack motivation, and I don’t need to explain to you how that works out! If you are having trouble getting centered in life to get rolling in real estate, let’s get on the phone and discuss it!  You can book a slot on my calendar at http://CashFlowGuys.com/AskTyler to discuss how you can organize your thoughts and get focused on your financial future.  If you want to get on the waiting list for the new course go to http://CashFlowGuys.com/MailboxMoney101

You can’t FIND a deal.. it is not possible, you gotta create them, for that to happen you must be direct to the decision maker.  Stop bitching about the price of what is for sale and start learning how to solve problems..its really that simple. Is real estate investing “easy”? Heck NO..but it IS simple (if you allow it to be) In today’s society, humans tend to make things far more difficult than they need to be.  We read into everything and try to find things hidden between the lines that don’t exist.  We allow fear to tell our brains to stay safe and take the easy road, heck, we even invested an actual Easy Button! Remember this..you will not be able to borrow your way to wealth, banks won’t let you, they cut you off and soon will cut most people off as the economy turns.  This means you must learn how to use other people’s money if you plan to truly achieve wealth.  The stock market requires you to use your own cash in most cases (unless you are a stockbroker), insider trading is illegal on Wall Street. In real estate, we encourage you to use other people’s money and insider trading is encouraged instead of illegal.  Insider trading means learning how to discover problems and provide solutions to them while the other “investors” are busy hearing some wholesaler talk about “ARV”.  That said, leverage responsibly, avoid high-cost debt at all costs, especially teaser rates and loans. You will never make any money in real estate without learning how to market yourself effectively, in our Mailbox Money group coaching program Jill and I teach you how to raise the capital you need and also teach you how to effectively market yourself in order to attract leads for opportunity and capital.  For more info on that, go to http://MailBoxMoneyCoach.com Don’t think that you don’t need to market yourself as a buyer, buying off the shelf will NOT build wealth, it will only fatten the wallet of the people helping you buy.  Being one of those people that help you buy (a Realtor) understand that the person representing the seller could care less about you “getting a deal”.  Only you care about getting you a deal, therefore negotiations is a skill that must be learned and mastered.  If this is an overwhelming challenge for you then get on the phone with me and learn some tips to make negotiation easier for you.  This can be done at http://CashFlowGuys.com/AskTyler