Have a podcast in 30 days

Without headaches or hassles

In this episode, you’ll discover:

  • Want to quit your job with real estate? Take the first step with the “freedom number”. (1:31)
  • “Passive income” is fake, but here’s how you can almost quit working. (1:42)
  • How rentals make you rich while most investors apply for office jobs. (2:41)
  • Why you should worry when your bank account is flush with money. (2:52)
  • How to create money “out of thin air”. (4:58)
  • How to control your cash flow so you never run out of capital again. ( 6:48)
  • The 1937 regulation that lets you buy high-performing assets with a small pension. (8:25)
  • Why most rentals suck—and the 3 things you need to get rich with them. (9:44)

Hey! Do you want to do a deal? Need my help with something? No cash to make an offer? Send me a quick text at 440-389-3883 and we’ll work together to get you the deal.

Read Full Transcript

Welcome to Cleveland real estate investor. On this podcast, you'll hear about every aspect of the real estate investment business. You will talk to your rockstar investors about their businesses, how they built them, where they came from, and where they're going. Who am I? I'm Joe Lieber and I've made millions of dollars from the real estate investment business over the last 20 years. If you're ready to hear the good and bad from a guy who's learned this business from the school of hard knocks and get educated by some bad ass entrepreneurs, then put your helmet on, strap on your chin strap. Let's ride.

(00:34): Yo, what's up everybody? Thanks for tuning in to another episode. Hey, this is going to be a fun one for me. I'm calling this episode. Glad I have rentals. Holy smokes. I'm glad I have Reynolds. Let me just tell you, I just want to talk to about what's going on. Just get real, real with you here for a minute. So look, the market's constricting. It's getting hard to get deals right? It's getting hard to get this stuff and when the going gets tough to talk gotta get going, right? Well, what happens if the margins are too tight and you're like, dude, I'm out laying out 60 grand in this deal to make 5,000 bucks. What happens when you're, you're fighting tooth and nail for wholesale deals and there's no margins in them. Maybe you just want to chill out a little bit, right? You know, I'll take six months off.

(01:11): See what happens. Let me tell you something. If it wasn't for these rental properties I have, I hope me taking any damn time off will be none of that going on me be fighting Claunch I get my next deal. Maybe going back to the old gangster days selling real estate as a broker trying to make ends meet, not cool mean, isn't that why we all get into this business? Passive income freedom, a freedom number. What is a freedom number? Freedom number is a number. You need to come and pass them every month to cover your bills, your nut without having to do too much work, right? I mean, look, real estate is not a passive passive investment. It's an active passive investment is what it is, but active, passive. What does that mean? It means you're not recreating. See, I hate recreating. I hate like a mortgage guy or a real estate agent.

(01:53): They have to recreate every month. No one's goes to the last sale and that sale is done, bro. You got to get back on it, man. Get another one. But when you have rental property, you don't have to recreate. Yeah, the maintain, don't get me wrong. I mean there's some jockeying. There's some coaxing, Hey, you got pay your rents seventh what's going on man? Hey, the water bill is too high. You know, you must have a leak. There's things which y'all have to recreate. The cashflow is a steady man. I am glad I have some rentals. I mean, look, I'm not the guy to educate you. I'm not the educator. By the time you've gotten to me, you're already educated. You've already listened to Robert Kiyosaki. You've read rich dad, poor dad 10 times you heard it somewhere else. Robert Allen, I don't know. There's a lot of guys out there to get you excited about real estate.

(02:36): I don't get you excited. Yeah. I just reiterate what the truths are and the truth is, if it wasn't for these damn rental properties at certain points during the certain market cycles, you'll be talking to yourself. What good is a bunch of cash in the bank? Really? I'll tell you, I'm nervous. If I look down, I see a lot of money in my bank account. That's a problem. It means I got sleepy money. My money's not working. I don't want to work on my money to work. I actually had this vision like five years ago, came to me in a dream. Not even kidding. I visioned my money in a bank of vault, right, and they're sitting in there and this little money and they got little arms and feet and they're sitting around a bank vault. In my mind, a calc like to sit around like a spa, like a steam room or something and it's my money and it's sitting there and the money's a smoking cigarettes or sipping martinis.

(03:27): They're gone. A look at Joe, look at, I'm out there working, running all over town today. We're chilling. We got it made. We're in a bank, false martinis. This came to me in a dream. Not even kidding. It sounds funny but I'm like hell no. I'm going to get my money up, marches ass out the front of this bank vault. It goes to work every day and I'm going to sit here and chill. Just kinda manage it right. And when I realize things like that, that's what really has to happen. And when I see money in my bank account, I honestly get nervous cause I know it's at 0.0001%. I mean how many times we walked into the bank, you're waiting in line with your, for the teller, you look over and it's like get a CD today. It 0.6% for 24 months. What the hell is that going to do?

(04:10): What is that going to honestly do? Right. And then they have the nerve that's handy. A 10 99 I at the end of the year for any money, any interest you did get. Holy smokes. See if you have money at once. You burn that principle, you're ski rude, right? Get a million bucks in your account and you start burning a principal eight grand a month. You look back in three years, you're like, Holy smokes man down the 700 just nervous. Yeah, I would get nervous. Gotta live off the interest or it to live off the cash flow from rental property or lending. Lending's real good too. Well that's a whole nother episode. But private lending is this sweet man. It is the ultimate passive game. Private lending. If you have money, no I have. Money is different. You've got to create money out of thin air. That's how I built my portfolio.

(04:55): Honestly, I never had any money. I created equity and cashflow out of thin air. I'll tell you what I mean by that. So I would buy houses and short amortizations where they wouldn't cash flow cause there's a ramp up time. I was lucky. It was a good time. It was 2008 nine 10 11 you could buy a house for nothing. Put it on a five year am over. Pay a private investor 10 12% and let it break even or cashflow a little bit, but I knew they were short term AMS so you could pay them off quickly and you can still do that. Now. They call it a snowball effect where maybe you'll do a 15 year mortgage and take pay one off that castle from that and pay another one off. It works. Look, there's a ramp up time you and it's going to start in this business and then tomorrow morning you're like, ah dude, I'm rich.

(05:38): It doesn't work like that. I had a friend tell me once, he is an orthopedic surgeon. It's like, dude, this ramp up time. It's like, look at us doctors. Holy shit. You know, we go through dude, undergrad medical school residency, then work in the hospital for 10 years. Then you become a surgeon when you're like 40 he's like, that's ramp up time, bro. It's like you wait five, 10 years, you're basically retired or you could retire. I'm not built like that. I am super glad I have rental property today. That cashflow is serving me very well. Even when I was going through it and you hit the question yourself like, man, I'm going through this man and the cashflow. I'm trying to pay off loans. One's ever going to come to fruition. Guess what it does and things change. You'll jockey, you'll change things.

(06:16): I remember one time, bear with me, I'm making these numbers up kind of, but I might've had loans on say 10 houses, right? And they were going down rapid pay down, but I wanted to increase cashflow, man. I wanted to increase the cashflow. There was a reason I think I wanted to buy a car or something, take out a lease on something. I was like, I've got to get my cash flow up quick. I sold two or three of those houses and paid off the debt on the remaining seven. So then just like that sold three, but because the loans were going down the amortization, I took that and paid off those seven houses and boom, instant cashflow. Right? So that's a play. You can always play with the numbers. You just got to have the assets. You've got to have the assets. I've got another story for you guys, this going on.

(06:58): Hopefully you'll stay on if you really want to hear this. For those of you that might know me well or maybe you heard me talk about this on another episode or I had my grandparents start buying houses 15 years ago after they're retired, the new one day would serve them well. Well, we have a situation going on right now where grandma's gear, when you go into assisted living, I'll tell you guys what, that stuff is expensive. No, I dunno. This is my first time dealing with someone going into an assisted living situation and it's an experience you learn, you know what a Medicaid facility is, you know what a not Medicaid facility is. Then you start going out there and looking around, you're like, Holy shit, I ain't going in there. I ain't putting grandma there. But grandma's pensions 2200 a month and these things cost 5,700 a month.

(07:42): The good ones, the hell. Do you do mic? It's real quick. So I'm grateful. Grandma has a rental property. I manage all her properties and she doesn't have a ton. Hell, she's up high. Even have some mortgage on one or two of them. I'm not sitting here boasts in like, Oh, that's enough cash flow coming in. It's going to cover grandma. It's not, but I'll tell you what I am going to do. I'll tell you what, I'm going to do that $5,700 a month. We've got to crack for grandma's assisted living. We're taking her 2200 bucks. Her pension, we're taking the cash flow from the couple houses she has just three and there'll be repairs and this and that and it still doesn't cover the 5,700 which has got a little bit of cash. When I say a little bit, I mean I'm talking sub 100,000 okay, but you can still go out there right now and get high performing assets.

(08:29): Section eight by the ways, it's a dream deal right now. Section eight is a dream deal. They're paying landlords very well. They're trying to get people excited about the housing choice voucher program. Again, because it's had such a bad rap over the years. And we're going to take the little bit of cash grandma has, we're going to go buy another house or two on section eight. So you had that nice steady Eddy. It's like damn near guaranteed, right? And it will cover grandma's expenses at that assisted living facility, pouring it to breakeven. So that went, not bleeding grandma's principle. Cause what's the option? Take her a hundred thousand dollars for say and drip out of that three grand a month to cover the arbitrage, the difference deficit, whatever you want to call it. And then what? Then three years, I'm sitting there talking to myself going, Holy shit. What do I do now, man?

(09:14): No, no, no, no. You can't do that. You can't. You have to invest these things in assets and that's what we're going to do. Dang, that's it. We're going to do, I can get some real high performing Nader's. We're gonna offset that arbitrage. And then upon grandma's death, the assets still sit there, right? So there'll be inherited by my mom or whatever, but the asset remains. So the principle remains right. You're never going to lose the principal cause it's spitting off cash. But if you burn that principle, your ski rude. So just another quick story about why I'm grateful to have rental properties. They work. It's a pain in the ass though. It is. Nothing is easy. I want to paint a picture like it is. It's not, they're tough. You guys had the right systems, the right processes, the right people. You know, you have to be a little bit flexible and not so hard line.

(10:00): I see people do stuff like that all the time too. You know I didn't pay by the eighth get 'em out. I call that hard ass. Great job. Hard ass. You want hardasses do they write checks? That's what I say. You can go be a hard ass. So that working with people and trying to make it work and jockeying a little bit and play in the game, be a hard ass. You open your checkbook. Hard-Ass is open their checkbook. You can do as much as you want. You want to sit on the barrel of a four or five, $6,000 rehab the hard-ass or be cool. Chill out a little bit. Try to work with someone just a little bit. I'm not saying get over on you, but I'm saying, jeez, man, she allowed whole nother podcast talk. Okay, that's it for the day. Thanks for tuning in and I’ll catch ya on the next one.

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