Just Start with 4 Rental Properties | Investing for Beginners

by your goal in real estate investing should be to get to four rental properties that's it you don't need 50 you don't need a hundred just for that's today's episode let's dive into it [Music] here we are our very first rental property hey I'm on a plate Morris longtime real-estate investor this is the channel where we really try to help you build financial intelligence the things that you weren't taught in high school about wealth building I think in my high school I was taught how to balance a checkbook and that's about it most people are taught get a job get a 401k this is the channel that flips all of that on its ear now I've been doing real estate investing for a number of years and I started with just two rental properties and have those two rental properties for a long time and they were producing each about $900 a month in cash flow imagine just adding two more to that how would your life look any different imagine would that be able to get you out of the rat race a nine-to-five job well I've got a special guest on the show today to talk all about this topic and he has really zeroed in on the idea of the for rental property paradigm my guest is Michael Zuber he is the author of one rental at a time he's been a guest on the show before you know go back and we deep dived this episode before what we talked about Michael's book Michael welcome back to the show thank you clean it's always fun to be here well real pleasure to have you and I like talking to real investors I like the other day I read a quote in a newspaper article from some professor who was talking about real estate investing and he clearly clearly had never bought a property in his life but he wanted to weigh in on what he knew about investing and people then are guided by that kind of intelligence out there that exists in newspaper articles and schooling so I love being able to talk to real investors like yourself who know what they're doing who've been gone through have the cuts and scrapes and and bruises to prove what you've done so Michael for our our audience that doesn't know about you take us a little bit backward here and tell us your story how did you get involved in real estate investing so it all started on my 30th birthday huh I don't know the 30th birthday was one of those numbers for me where I had to kind of self you know self assess where I was and where I really got to is I spent my 20s making a decent income but frankly wasting what I wasting I'm in that money I was a burned-out stock market investor happen to turn thirty right there in the come crash where you're speeding that I would seemingly a stock market wizard and you know you know I reported double your income of over a hundred grand in day trading profits and you know it was taxed accordingly and then suddenly I lost all of that you know and suddenly I know what it means to write off three thousand dollars a year for seemingly forever because that's what you're limited in your losses but they take all your profit so that the IRS gets theirs for a long time so I realized I had to do something different I realized I could not continue working as hard as I was in my 20s when I was older I took this time to look up my org chart I happened to be in a sales career that was 90 days driven you could make it nice if you were good at it I was this one and I looked at people that were you know 10 15 20 years older than I was they were in most cases overweight they were seemingly very unhappy they were on their second or third marriages and I looked at that going I don't want to be them and so I had a I had to figure it out so I remember going to a bookstore and trying to figure out how can I do something so what I found was real estate very quickly I ended up buying seemingly every book on the planet you know well over a hundred books and because I travelled so frequently and I had a crazy life I read books on airplanes so I had you know seemingly twenty to thirty hours of reading I could get done a week and you know that's that's where I was right so I decided the landlording buy-and-hold was going to be my thing I wasn't in the flipping wholesaling was not a thing back then I just wanted to buy one rental at a time because I believed the story that someday somewhere I would be the the day job I didn't know but winds I didn't have a plan I just knew that it could work so that's what we did we we ended up finding a market two and half hours away and we started buying that one rental at a time so I was busy you know I had family responsibilities I didn't have a lot of money to start but my why was really really strong and I just didn't want to beat what I saw above nor chart and I had to find a way out well that's inspiring and there's a lot of people watching right now who were in that same position I hear I heard from a hope he doesn't mind my telling the story but a police officer in a big city in this country served for a lot of years has a few years left to get his pension but he's got a bunch of rentals he has four rental properties and he's like I'm right there he's actually asked me the question should I quit my job and that's a lot for you know I said look I can't give you that advice that's a very personal personal question that you need to grapple with because there's a lot of things at play here and if you're that close to your pension you know you want to stick around for another 7 years it's it's a tough one what would you say to him I I kind of said look you have to really make that determination maybe you could add asset another or even another rental property if that you feel like you're just you're right there but you're not quite over that hump yet and you live in an expensive city also yeah you know like like if you're a policeman or public servants or in the military and you're 15 years into the twenty which again that if you don't know you know you earn the epital 20th year I be I'd be like you I'd be like oh I'm not really sure I want to answer this because myself I'd be like I'm out right I know what it's like to be out of the rat race but also I never spent 15 years of a 20 year journey and you're on that last lap and again if you get to that 20th year the rewards are pretty cool right they basically pay you a salary for the you know 80% of your highest income year for the rest of your life that's some pretty good money to walk away from I get it so I would be like you I'd be like oh I'm not sure I can do this I know and I don't know what it's like to put my life on the line right I mean right I mean that's the other part of the right you know every day you're getting up and protecting people and you know it can be scary so every day you know your wife might be saying hey I really wish you would you'd retire you know and I was out there in that line of fire and and so yeah that's it that's a tough one and you know at the end of the day to seven years is a long time so if you're thinking well I'm gonna just stick it out for another seven years for this pension seven years is a long time to wait to you can be doing a lot of other things in seven years and I think a lot of people get held back by these quote unquote golden handcuffs whether they are retired plan a pension plan etc so but that's a topic for another day I guess but let's talk about the four rental property paradigm I mentioned at the top of the show I mentioned the police officer who I believe has four properties why did u zero in on that number and why do you think four rental properties kind of does it for people yeah so I think there's a couple answers of that and it really goes back to I'm sure you can experience when we get invited out to speak at real estate of then we get interviewed on unch analyst like this or others it's often about tell me your story right tell me your financial freedom story and well that's a 15 year journey it involves you know 175 units and what happens there is people smile if you're in person they want to take a picture with you a selfie they're really excited but what I've learned over the years when you pay attention is this is what happens right so the person up shakes your hand takes a selfie with you post it on social media they go back to their car they look at their significant other and go wow I wasn't that we can't do it we we can't do it they just don't see going from zero to financial freedom right so that's the first thing right and as someone who does this people I fight you get very frustrated I'm excited I can get them energized but I can't get them to take action so that's a failure on my part right I sort of internalized that as well okay my story's not resonating Nikki but they don't do anything and if you don't do anything I don't know why I'm wasting my time right because I want to inspire a thousand people to do something so what I've realized is you have to have us better store so what I what I zeroed in on when I kind of self reflected in like how can I fix this is um I got to for and I got to for for a couple of reasons first and foremost is you know Clayton the easiest bordick easiest rental properties to get invested or the first four right it still fits it fits Fannie and Freddie it's it you can you know you don't need your reserves you don't need seasoning it all that stuff that's for and the other thing is it simple right you can count them on one hand and the last thing is the most important thing it gets a moss zero zero is the hardest number to move people and if I couldn't move people talking about zero to financial freedom now I'm focused on if I can just get you the full four and I can get you to believe how to get to four then once you're there we can have a different conversation the conversation at four is what do you think do you like it or driving you crazy right if it's driving me crazy just be done right four is gonna will may not make you financially free but I guarantee you it'll change your financial future and if I could just get people to four and then realize that landlording is not for them I still think I've done my goal because I got you off zero in for free and clear properties in fifteen to thirty years will change everybody's life because they'll appreciate they'll provide tax benefits while you're holding them and life is good but if you do like landlording and you get to four cool because now we can talk about getting to ten which is the next financing hurdle so I find it's far more I get a lot more action from people when I go hey don't think about financial freedom that's that's an end-all be-all goal let's talk about how sooner I can get you to four and usually that's two years or less most people go well I think I can buy one every six months or maybe they go I can buy one every year well great in for yield this business rule and I've gotten you off zero it's very frustrating putting all of your passion on trying to help people this one rental at a time idea and then they don't take action and I and as the person talking about it I I put that on myself that my story or my you know my my yeah story is not resonating is not taking action and that's a mistake and that's on me not on them yeah no I love that idea the idea that well only four properties and it's attainable for a lot of people because I think so many people think that they have to get to a hundred properties and they hear all these real estate gurus talking about thousands of doors and all this stuff honestly for most people when I ask the question what is your freedom number for a lot of people it's very minimal it could be under ten it can he eat it could be seven properties that it could take for you to achieve financial freedom I know for me I buy it you know in the Midwest so in you know Indiana and Michigan and I have some in Florida and Pennsylvania and those areas and it didn't take me very long to achieve financial freedom and it was not a huge number and I think that's a really compelling point to make because if you think about even four properties let's just take I don't know what it what are your typical properties cash flow what something like a monthly cash flow for you I would say my houses are at least three hundred dollars a month at least three hundred dollars a month and that's net so if you've got leverage on them or otherwise you know I've got four hundred dollars up to nine hundred dollars up to a thousand dollars a month in cash flow so imagine how would that change your life you know if you've got four of those properties what would that look like for you and how could that possibly change your life for a lot of people they don't need to be a millionaire right yeah no I again and I think yeah so a couple things first off I think being a millionaire is the wrong goal I think we have been sold a bill of goods from the financial services industry think about a million put a little bit away this 4k thing is a joke to me why would I want to do something put a little bit of money away for 40 years and hope that life is a future when instead I could do real vesting in five 10 15 years fundamentally changed my life and the key is don't think about being a millionaire millionaire I don't pay my bills because my net worth is a million all right idols on income so if I have my income up having rental properties at somebody some other people pay for is key and when I answered the cashflow question that was that was after full leverage right that's seventy seven twenty five percent leverage that's flowing three hundred bucks a month but if you take those four and that's all you get and then you pay them off right with a 15-year note or thirty again your call is the investor right cash flow jumps to eight or nine hundred a month and again life is good so when I talk about getting people off zero I mean it all right if you just get to four I promise you your financial future will be different it may not be your freedom number but again when you're done and you have for free and clear houses that are paid off they what do you think a house is worse than 30 years it's probably double or triple what it is today your net worth is gonna skyrocket you'll have income coming in over and beyond Social Security or any pension or anything so I feel really good if I can inspire people just to go from zero to four I will count that as a win and then when you get to four you're gonna know if this business is for you or not and if you want keep going go for it cuz you'll know but if you don't I don't feel bad right you got two four your life is better I feel like I've done my job you talked about speaking to people I have the same experience you speak in front of an audience or you're speaking to your YouTube audience or podcast and people saying you know I've taken two years I still haven't taken action I haven't I haven't dove into it yet how do you move what do you do you notice like a common denominator for people that sort of still sit there and don't take action versus the people that do is there something that you could illuminate us about about the type of person that actually does take massive imperfect action to achieve something even if they're gonna get some cuts and scrapes along the way yeah so I've boiled down after many many many like years of conversations to people to asking one question because I think I you know talking to people my whole life which is what my career has been I realized that you have to steal if I think so when I have somebody stuck in analysis paralysis or two years of doing nothing the only question I ask is what you're buying criteria it's that simple and then I sit I shut up I wait I wait for the answer because if the answer is some convoluted little story that's where that's what we need to fix you don't have a buying criteria you're looking for a shiny object you're looking for a unicorn you don't have a buying criteria but if you can say I'm looking for $300 a month or I'm looking for a 5% yield on my cash or an 8% or what if Tiye whatever it is um then we can have a relationship because you need to know your buying criteria I'm fine creating a box right create that boxes your buying criteria but once something enters that box you have to write an offer so if the first answer is some long convoluted answer I tell them stop stop looking at real estate you don't know what's going on go away in a quiet room and think about your buying criteria if they do have a decent find criteria I'm like no you don't because you've seen stuff that hits it and you're not taking action for whatever reason let's talk about that what is holding you back is it fear is it stories from a significant other is it your what your mom or your daddy or uncle your cousin giving you some negative information right so we have to figure out is network poisoning the well or what's going on but the the answer is that I have found multiple lists ago what it is you're buying area and then she's been waiting to see what people say right I mean you could listen to us you and I did a story back during Halloween you and I did landlord horror stories and so many people want to tell them tell them stories about you to real estate investing it's like I hear hoarse horror stories from people in the stock market I hear horror stories from people that invested in crypto either there's gonna be horror stories all the time you you had some horrible stories that you shared on that episode of the landlord horror stories episode I had some horrible stories that I shared about a company that we worked with that lied to us about renovations that they had completed and rent payments that were fake or you know they were giving us differentials in rent that weren't accurate according to a lease I mean and that could have you know I could have thrown in the towel I could have thrown in the towel so I'm never investing again because of this one company that lied to us well guess what then then you're out of the game I mean so people said on the you know sit on the couch all the time and they hear these stories and like I'll never do and that uncle Danny had a bad experience one time uncle Danny exactly yeah it's I don't know it's again you and I talk all the time to different investors and I'm finding a trend the the horror stories are infrequent right you and I talked about stories that happened over decades and yeah there they're gonna think about now but trust me they were horrible to experience you know we should do another show about all the great things and let's just be clear right I bought two days of freedom I retired at 45 where a lot of my peers who made more money than me won't be done until they're 65 my quality of life I would dare say is higher doing what I want when I want than somebody who has to chase a quota for the next 20 years so you know there's lots of great stories but they're not talked about enough right they get lost in the noise I guess it's just the trend that people like make it or I don't know if they like it but if it sells better or know what it is well look I came from the press world you know there's a reason that you don't read newspapers and there's good you know feel-good stories I mean they're buried in the back of news papers I worked for a news director in Philadelphia one time who said you know I was hired as like the fun morning show guy and he said we're not gonna renew your contract cuz we want to take the show in a hard news direction where we're gonna kind of off the top of the show it's murder violence you know this that and the other thing so when you read newspapers that's what it's all about that's what sells unfortunately yeah so you know it's guys like you and I that are trying to change that we're trying to be a single voice in a hurricane but our consistent effort you know I've seen you've been doing this a long time very successful I'm trying to follow in your foot we're just gonna keep doing it and slowly but surely people will see the goodness I think we need to do up right I think talking about for rentals is part of it because I think people get lost in the financial freedom story right they think it's the step too far for there's some special circumstances that doesn't work for them which is wrong everybody can do this business that's the beauty of real estate you can do it at any age at any time in any sex in any income and you know we just have to keep talking about it being possible keep keep keep keep telling our stories and do a better job when it's not resonating right if if talking about financial freedom doesn't cause action well shame on us we need to change our story let's cause some positive action and right now my feeling is talking about getting the four rentals is that positive action because people can see going from zero to four and then you and I in a year or two we'll talk about okay well great now you got two four let's talk about getting a ten and you know that'll be a different conversation well awesome stuff I love it the his book if you want his story deeper dive on other topics check out his book one rental at a time you can find it on Amazon my guest has been Michael Zuber who quit his nine-to-five job his goal is to help a thousand people take the move and actually get this in the right direction and get out of the rat race and start investing just start with four properties that's all you need to do Michael great to see you thanks so much for joining us again I really appreciate it Thank You Clayton and thanks to all of you for subscribing and downloading please share this with someone who you believe in your family could use financial intelligence and who could take that step maybe this is the episode that you need right now you could to a family member to somebody else who could actually move you in the right direction this could be the kick in the pants that you need to get off the couch like what Michael and I were just talking about I hope it is love I would love to hear your comments in the thread below about taking action of what is holding you back from financial freedom we'll see you next time here on the show now go out there take action and become a real estate investor I believe it's the number one way to build wealth we'll see you next time

Channel: Morning Invest

Views: 373,836

Rating: 4.8506384 out of 5

Keywords: financial independence, Financial freedom, Pay off debt, Morris invest, Clayton morris, real estate investing for beginners, Just Start with 4 Rental Properties, rental properties, one rental at a time, real estate investor, landlord, turn key real estate, four rental properties, passive income, real estate, take action, setting goals, how to buy real estate, rental property, investing for beginners

Id: KaMwnQlVoMI

Length: 20min 39sec (1239 seconds)

Published: Mon Dec 23 2019