Cash Flow Guys Podcast

Rod Khleif is a man that needs little to no introduction, he is the host of the #1 Real Estate Podcast "Lifetime Cashflow Through Real Estate Investing Podcast" that has an audience of over 5 million. In this incredible episode, Rod pulls back the curtain and discusses the Psychology of Success and how it has changed his entire life’s trajectory. Coming from modest means after immigrating from Holland and settling in Colorado, Rod embodies the spirit of entrepreneurship as he negotiated the obstacle course that we all know as life.

Jude Mendonza (besides being a buddy of mine) is the host of the Freedom Experience Podcast. His show is designed to help people get past their internal struggles and then get focused on winning. Jude is a true rags to riches story that is a must-listen for anyone who feels they are not happy with their current situation. Jude’s resume has clearly lead him to have the insight he has today and helped him become a mentor to many.

In this episode, I interview Asset Protection Attorney Scott Smith from Royal Legal Solutions about Series LLC’s.  I first learned of these by doing business with Paige Panzarello in the note investing space.  One of the big reasons they became popular over the years is to help California residents avoid paying ridiculous taxes levied by the State of California. We went on to discuss the differences between asset protection and anonymity and the benefits of having a blended approach to best protect your holdings from prying eyes.  Scott also covered Land Trusts as Larry Harbolt teaches and shed light on other strategies that investors can use to best protect themselves from unfair lawsuits.

The facts are that far too many people are having trouble getting to the finish line when doing a flip these days. Granted, this does not apply to everyone, but it does apply to a large number of flippers. Some say the sky is falling, others blame the President, the weather, the Realtors or Wholesaler that sold it to them, but what really matters is a market correction is going to happen, and you need to be diligent.

Everyone is in fear of missing out, even though the talk on the street is that a real estate market correction is imminent.  By now I would think people have gotten the message and would not keep getting caught up in the same hype.  FOMO (Fear Of Missing Out) remains alive and well in the real estate investing space due to tons of careless buyers not doing the math before they buy.  They trade basic financial logic for the thrill and excitement of buying an over-valued property.  To some degree, the Brokers and Wholesalers share part of the blame by providing inflated estimates of value and inaccurate income and expense information to potential buyers.  If a buyer is naive enough to believe the data presented as accurate without further verification, they must be willing to accept the majority of the blame (if not all) “Off Market” is a LIE, Off-Market often stands for “it costs more” because off-market lacks the checks and balances.  Let’s be honest with ourselves, if it’s For Sale, it is On Market. OFF Market is unregulated, unsupervised, the Wild Wild West if you will, this is what I mean by lacking checks and balances.  Off market properties generally seek cash buyers thus no appraisal is required.  When an appraisal is not part of the equation the market value is determined by what the buyer believes it to be, which is often influenced by the seller or their broker or wholesaler. The good news is, overpaying can be avoided.  First, remember to be direct to the seller not some wholesaler pretending to be using confusing terms to mislead you into thinking they are part owner.  If a Realtor tells you they have a “Pocket Listing” you can pretty much assume they are holding it away from the attention of the market for a reason, sometimes that reason is so that they can make a higher payday when selling it to you.  Ask yourself this question, why would a seller hire a Realtor and then tell them to not place it on the MLS in front of the largest number of buyers? Sometimes, sellers want the fact they are selling to be held confidential in order to maintain their privacy for very reasons which is a legitimate reason for a pocket listing.  A seller can choose to avoid the exposure of the MLS.  Quite often though, the seller is not aware that the Realtor who has their “pocket listing” is holding it off the MLS.  Because of this, many Multiple Listing Services now require the Realtor to have the seller sign a form stating they don’t want the property on the MLS. Buyer Mindest is a huge factor in overpaying for properties.  Some of the most common mindset flaws are “The Seller let me finance it” or "The Seller let me buy it" or "I won the multiple offers round".  If you are the one willing to pay the most for an investment, are you really the “winner”? Here are three interesting examples of recent small multi-family sales as found on Zillow in the Tampa Bay area: 1022 Commodore St Clearwater, FL / Duplex sold for $549,900 (seller finance 15 years @ 5% int) Monthly Rent Income $2,720 - $1360 Monthly Expenses - $3,044 Debt Service (mortgage payment) = -$1,684.00 per month LOSS 900 San Christopher Dunedin, FL / Fourplex Sold $274,000 in 2015 and again at $460,000k Cash in 2018 $3,326 Monthly Rent Income - $1668.12 Monthly Expenses - $1728.57 Debt Service = -$70.69 or 4% Return 56 B street Maderia Beach, FL / Fourplex Sold for $405,650 (all 1 bedroom) $3,000 Montly Rent Income - $1500 Monthly Expenses - $2188.52 Debt Service = -$688.52 LOSS Going broke when purchasing a rental property will not impress your friends.  Rushing your way to the closing table will lead to certain financial failure. Do ALL the math, this means allowing for all of the expenses and basing your purchase decision on actual numbers, not projected, proforma, estimated or any other “guesses”. Here is the simple formula: Actual Rent minus Actual Expenses minus Debt service equals cash flow.  You can’t fudge the expenses or the income, you can only adjust the purchase price or terms to “make” the numbers work. Don’t get caught up in trying to make the numbers work by tweaking the income and expenses to force a deal to look good on paper.  This holds especially true when you are using other people’s money in the deal, tweaking the numbers could be viewed as deceptive or even fraudulent.  Instead, do your homework, complete your due diligence and if provided false or inaccurate information, insist on renegotiating if need be. In the Mailbox Money Group Coaching, our students learn how to analyze deals in order for them to turn a steady profit over many years to come.  The Mailbox Money system is an insurance against being taken advantage of by unscrupulous sellers and practitioners.  As an educated investor, you remain a profitable one.  Lessons are cheaper to learn in the classroom as compared to being learned in the field.  To learn more about the program, head on over to http://MailboxMoneyMastermind.com

The only way to get the best deals is to be direct to the decision maker, that's the reality, love it or hate it we cannot argue the facts.  In this episode, I discuss why this is true and how you can better position yourself to negotiate with sellers and service providers.  When we are stuck dealing with a gatekeeper we lose the ability to solve problems.  The ability is lost because we simply do not have all of the data we need to provide a solution, thus all that’s left is to compete for the highest price. What if the highest price isn’t what the seller really needs to solve their problem?  What if they only need $10,000 right now, and need a stream of income after that?  We know that in most cases a lump sum of cash in a seller's hands will get spent rather quickly.  Instead, what if we could provide them with a stream of income over time? Many rookie investors won’t consider this because they themselves would not go for it.  The problem is that they wind up shortchanging a seller out of a solution that could have been the exact right solution for them. Time is by far your most valuable (and expensive) commodity.  When you invest time dealing with a gatekeeper and not solving a seller’s problem time is often wasted. Realtors do have a place in the market as do Wholesalers, (serving retail and flippers), however, anyone seeking creative acquisition needs to be direct to the seller whenever possible, or employ someone to act on your behalf if you must. Wholesalers want all cash buyers to allow for them to make a quick buck..I don’t blame them.. Realtors want Cash Buyers and Pre-Approved Buyers because everything else is illegal..sigh.. The reality is that intermediaries (gatekeepers) don’t often solve problems, in fact, they often create them. 100% of the relevant facts are not known with a gatekeeper in the middle when a story moves from person to person, the details change, that’s reality.  Spend some time watching the news if you ever question this fact. Only lousy deals are advertised, the good ones are heading to the closing table, you won’t know of them until you search the public records. If you are serious about changing the game and learning how to get direct to the sellers, raise the money you need and learn how to build your real estate business, now is the time to visit http://MailBoxMoneyMastermind.com    

As many of you know from listening to the show, I LOVE passive income in the form of Mailbox Money.  In fact, it’s that mailbox money that helps me sleep so good at night. Y'all can keep your house flipping and wholesaling garbage, I am all about slow and steady wins the race.  Speaking of which, I am opening the books on registration for the Mailbox Money Group Coaching program.  I am opening the doors for a short time to allow people inside who are willing to be brave enough to learn how to escape the rat race once and for all. To get started, head on over to MailBoxMoneyMastermind.com right now.. This group coaching program is about cutting out the fluff and getting right to the meat of what you need to learn (and do) to build your real estate business into a recession-proof machine.  This program applies to both single and multi-family investors, note investors, and those who wish to invest in vacant land or commercial property. We have a payment plan available to allow you to take advantage of this limited time opening, please don’t be like the people who missed out last time after we slammed the doors closed, those people are still punching a clock somewhere... Now, let’s get down to the dirty details of how I earned my latest $150k tax-free bonus money….in case you forgot, back in 2014 my wife and I bought little four-unit apartment building (all by ourselves) using VA mortgage which means no down payment required. No down payment does NOT mean no closing costs, I had to get creative, which I did...so as not to spoil the episode you will have to listen in to hear the “rest of the story” Enjoy..

Wikipedia defines a retrade as the practice of renegotiating the purchase price of real property by the buyer after initially agreeing to purchase at a higher price. Typically this occurs after the buyer gets the property under contract and during the period that it is performing due diligence. The buyer may raise a due diligence issue and demand a purchase price adjustment to a lower re-trade price. The seller can be left in a bad situation where it must either accept the lower price or lose the sale and re-market the property. Moreover, loss of the sale can affect an entire chain of related transactions (such as when the sale is a down-leg in a tax-deferred "1031" exchange), thereby increasing even further the pressure upon the seller to accept the lower price in order to salvage the related transactions and avoid a ripple effect. Here’s the deal, as a buyer, you have a RIGHT to renegotiate a contract when the details of what was presented to you change.  Let's keep in mind that doesn’t mean you need to nickel dime the seller, after all, you aren’t buying a “new” property. In the past, a few unscrupulous people abused the ability to renegotiate, by intentionally going under contract at a price they knew they would not buy at, in favor of renegotiating later.  This, ladies and gents is not a good idea, and frankly, its unethical. When buying a property, it is important to perform your due diligence to be sure what you are buying is as you expect prior to arriving at the closing table.  During this process, you will have all of the important systems and structures inspected, and the books audited by you or a member of your team for accuracy and alignment with the figures you were provided when making your offer.  Don’t be shocked if you find discrepancies, however how you deal with the differences can (and should) make or break your deal. We deep dive into this topic during the Mailbox Money Course so that our students can buy safe and know how to look out for their investors.  If you want to learn more about that, please visit http://MailboxMoneyMastermind.com

Today’s guest is Adam Adams, known on Facebook as Adam “Triple A” Adams, he is the host of the Creative Real Estate Podcast and CEO of Blue Spruce Holdings. Adam was raised by a real estate investor and got started himself back in 2005 in the tax deed space, then in 2007, he got involved in apartment investing as a property manager who managed a complete reposition of a multifamily property and doubled its value in only 12 months. A year later he bought his own multifamily property and since then has grown his portfolio to over 500 multi-family apartments, a number which is soon to explode.  Adam talks about a few of the biggest challenges that multifamily investors run into and provides solid advice on how to overcome those challenges. Adam is also sponsoring a Raising Private Capital Summitt this month of which more details can be found at RealBlueSpruce.com/opm

Seth Williams is a land investor and residential landlord, with nearly a decade of experience in the commercial banking industry. He is also the Founder of REtipster.com - a real estate investing blog that offers real-world guidance for real estate investors. On this episode of the Cash Flow Guys Podcast, Seth shares how making offers to unmotivated sellers generally proves to be a huge waste of time, He also offers a refreshing approach to some of the pitfalls associated with Seller Financed deals.