The big challenge is this: How are investors like us who are not backed by a billion hedge fund who are investing money from our own pockets? How do we buy, sell, and invest in the properties we believe in, yet still make a profit without risking all of our own money? That is the challenge. In this podcast, we'll give you the answers. My name is Nate Armstrong and welcome to the social media blueprint.
Ladies and gentlemen. Welcome back to the social media blueprint podcast. Today. I've got a special guests. This is a one of a kind, kind of opportunity for you to be here today. Listening in on a conversation about to have with mr. Chris Haskins, and in case you haven't met Chris yet, you probably have somewhere if you've been around the YouTube land, but in case you haven't met Chris yet, I had the pleasure of bumping into him from a mutual friend, Jay who introduced me. And this guy, Chris is doing some amazing things with financial literacy. So if you're ready to start expanding your mind and get outside of just traditional real estate and start learning what you should be doing with your dollars and how you should be investing. And you're going to really want to pay attention to this, Chris, thank you. And welcome. Thanks for joining the show, man.
(01:18): What up Nate? How you doing bro? Good, good,
(01:22): Chris. I know you've got a bigger mission than just financial literacy and I don't want to do any injustice to it. If you could take just a minute or two and explain a little bit about who you are and what you're about. I would love that man. Our listeners would love it too.
(01:34): Yeah, that's cool. It's an honor to be in your presence, Nate. Anytime I can talk to you, man, I'm just, I'm just honored. You know, I know you're busy as all get out. Yeah. Well, my mission to raise your financial literacy, it took me 40 years to get, but it's deeper than that, than that first thing was. I didn't want to be broke. You know, I got to figure out what to do. And then after that I noticed that a lot of people around me were broken. I'm like, listen, why people in the word? I don't want them to be broke. So I'm like, I'm just sick of meeting, broke people. So the mission was born and I'm like, as much as I can spread the word and real estate and helping people to kind of get out of that rat race and just overcome being a slave to the dollar Nate kind of is it's kind of fire. That drives my passion.
(02:13): Yeah. Yeah. And last time that we got to talk, Chris too, you told me the story that still sticks into my head. And you had mentioned watching the landlords walking around and you've told it in such a funny way, but do you remember the story you told me? Like you saw it, what made you actually get into investing? What made you get into real estate? You saw these guys walking around with briefcases, something like that.
(02:34): Oh yeah. Well, when I got started back in 2004, there was very few investors that looked like me. Really. I went to the local real RIAs, you know, and it was like, man, nobody can necessarily look like me. You know? So I'm like, you know, why can't we get into this business too, and kind of move around and make real estate. Cool. So I'm like most of the guys that I met back then were yeah, the older white dudes would suitcase suits and ties and briefcases to the foreclosure steps. Now it's kind of changed the demographics some, but you know, I think that this financial literacy is for all, as opposed to just a niche market. However you want to say it. Yeah. Yeah.
(03:10): And ladies and gentlemen, Chris has made this cool. If you haven't checked out Chris Haskins yet it's Kris with a K and he's got a really great YouTube presence. Like the stuff that you'll find there, it's entertaining, engaging and enlightening. So you'll definitely want to go there. Chris, you have done something really cool on a topic that I actually have a pain point on right now. So in the midst of this whole recent crash, I lost 25% of my IRA. Boom, like overnight. It was a course of like eight or nine days. It just kept going down, down, down. And I just stopped looking. And I said, okay, I give up this stock work at IRA stuff. I don't know a dude, but then I poke you with a message and I'm like, Chris, Hey, can you talk about this? And you fire back. And you're like, yeah, I just did this really smart thing. And I would love to know what that smart thing was. And I want everyone else to know too. Can you teach us
(03:59): You too generous, man. You're like, you are definitely one of the smartest cats I've met, but I've preached you even listen to this stuff. When they first, I want to ask you what type of IRA do you have if you don't, if you care to share. Yeah,
(04:13): Typically self-directed but I left it with my financial planner and he's at Northwestern
(04:18): And he put it into
(04:20): Mixed mutual funds essentially that are in the store,
(04:22): Whatever. Yeah. Whatever is in the market. I mean, it doesn't matter what it is. It's in the market. Yep. Okay, cool. So Nate, here's the thing for me. I dunno if it's a gift or a curse brother. When I got in the business and no four, I was able to meet once again. And I always say, you gotta have the rich white dude in the background. Lanny Scruggs, Lottie Scruggs, my mentor. He was a guru doing mobile homes. He owned four mobile home parks at the time. And I sit, I said, I take him to breakfast with it. He paid all the time. I'd just meet him and eat breakfast with him. And he say, Chris, I'm gonna tell you about this self-directed Roth IRA. This was in 2006, Chris, this should be illegal. That's what he told me. Okay. Dude, tell him it's illegal.
(05:02): I'm doing this to death. Is the man. I'm like, you know what let's do that. He said, they're going to iron out all this stuff. So, so self directed Roth, IRA. I say that to say, give to Chris, Nate, I don't know anything about traditional Roth stuff. You know, I was born and raised on self-directing my IRA. So it hasn't lost any value ever. You know, it just can't necessarily lose value because my tenants rents go into there and we loan it out. And do, did we buy so houses out of it? So it's not like it's tied to any index, so to speak. So we kind of live outside of that world. So a company
(05:37): Filing bankruptcy because of the whole crisis. Doesn't like devalue your position in your IRA.
(05:44): Oh wow. JC penny. Wow. That's something that's unbelievable. Isn't it? It is
(05:49): Like an iconic childhood brand of mine. Like that was back to school, shopping, JC Penney. We're going and to see it hit their knees like this, like it's a different time we're living in.
(06:01): There's something that I feel for people that had stopped. I don't know whether it's doctors now, but no doubt. It's, it's gone. You know, it's just plummeted. I don't, I don't know. But you can still, if you have a self directed Roth IRA, Nate, you can buy stock and do mutual funds and do everything we just decided to, because my skill was real estate. It just decided to just do it with real estate, you know, was all I know.
(06:20): Yeah. So you do a couple different things. It sounds like. Sounds like you're tapping into some private lending with it. You lend funds out a little bit. You buy houses and collect rents. Okay. And now this cool new thing, like this is the big thing you did some kind of withdrawal or loan or something from him. Well, what does that mean?
(06:41): Yeah. So there's two that they have the IRS. Thank you to the IRS gods that have given us some color, the Corona distribution, Corona related distribution. So I guess, I don't know the exact term. I could pull it up, but you can just Google it and see they've given us a hardship for me. My hardship is my Airbnb. I'm losing about 5,000 a month from Airbnb. I'm just getting burned. I don't no doubt you're losing two, but yeah. So I decided they gave us a one time penalty slash tax free withdrawal, early withdrawal on your self directed IRA. And they're allowing you to borrow on your 401k, which I do not have a 401k 401k. Self-Directed 401k doesn't even exist. When I got into business, they came along later. Okay. So you've got Iris
(07:28): Self-Directed Roth IRA. And then along comes this bad virus. You get hit on your Airbnb property. And now you're allowed to do a withdrawal or a small tax penalty withdrawal from it.
(07:42): No tax is it's 100% penalty free. 100% tax free, bro. Aww. I don't take my word on this. I'm not an accountant, but I did. I've got several emails from two accountants before I took this money out. I'm like, I'm not, you know how it is Nate? You think you got it right? Then you do it. And then, Hey, you got five grand grandparents.
(07:59): Yes, yes. Yup. The one year I got audited, I listened. I, I had the same CPA for like a decade. And then I moved to a new city and this CPA that I met, nice guy and all, but he says, Oh, you know, you can do this and this and this. And I'm going to save you so much in taxes, switched to me. And so I switched to him. And then after a year, like it was totally gave me a headache with the switch. So I switched back to my good old trusty CPA. And I've been with them ever since. But guess what? The one and only year that I get audited, it's the year that I go with the crazy stuff. Yes. Bang like, Oh, did you have to pick that year? Come on. Oh my year before the year after
(08:38): I feel your pain, those audits will keep you up at night while there bro.
(08:42): Yeah. Yeah. And I've got trustee CPA navigating me through the audits, but it's still, yeah. You don't want to go down that path. It's not fun.
(08:49): No, you don't. I've been through to my friend. I know where you're coming from.
(08:53): Okay. So you got good professional advice from two people that this is the way to go. You can do this. Tax-Free et cetera. And we're not holding you to that, but that's what they told you.
(09:03): Okay. Yeah, man, I got it in writing. I got an email. I want to know. Cause I said, if I take out X, are you telling me there's no penalty and no income tax? Cause I was worried that if I took it out, generally speaking. Okay. Generally when you do a withdrawal on your IRA, you got to pay the penalty, which is 10%. So let's just say 30,000 is 3000 just given away federal. And then you got state and you've got to pay income taxes on the money. So I'm going to get talking about it with 30%, 40% who knows? I mean, it could be half the money you're taking out Nate. Yeah.
(09:36): Yeah. And, okay, so let's say I pull this money out or maybe you have a real example you want to go through where's the seat. I'm not putting it back in the market. Like I'm market scared. Like what's the smart thing to do.
(09:48): Well for me, once again, I'm just always trying to just think and thinking for me. Okay. So let's just think about this right. Debt for me. I'm debt averse, right? I'm 44. I've been in debt for the majority of my life. Right? So I'm like, ah, I've learned that the power of paying down an extra principal really catapulted my career. So I'm looking at some debts that I have right. There were debts out there, whatever it is. Let's just take 30,000 for instance. So I had a old 30,000 on the house. I'm just making it round numbers for you later. Let's say my payment is $600 a month, whatever, $500 a month. I know that payment is going to come out of my bank account for the next X years. I know I'm going to pay that loan. Yeah, no matter what, I'm gonna have to pay the loan on this money.
(10:31): So when the IRS with the cares act, it's called the coronavirus beta relief. I can't remember the name of the carer is active with the government put out. I said, you know what? If I can borrow from myself technically, but it is, it's a withdrawal, but I'm gonna in my mind categorize it as borrowing from myself. So I had that same 30,000. I could take out penalty, free tax, free, pay off this debt, this other 30 that I'm paying on, on a loan. And then I got the same five, $600 coming out of my bank account every month to pay this loan back, buy now, pay back the interest, bearing loan, pay it off and just pay myself back over the next three years. Yeah. I still get I'll come out of my pocket. I'm still making a payment either way.
(11:17): Yeah. Fantastic. Okay. So now you're collecting all the interests. You're the guy Pat and your bank account essentially back to your IRA, I assume.
(11:26): Yeah. Well, I'm not sure if you can pay yourself interest, but I'm literally just thinking about the print for me. It was just principle. Okay. Just to sort of, you take out 30, pay off long, 30, pay back the 30 to yourself over time. It has to be paid off in three years. That loan that you take out of your IRA okay. Has to be paid off for three years so you can amortize it principal only. So in essence, I literally just cut out $10,000 worth of print, worth of interest that I would be paid on this long. Beautiful. Beautiful. Is
(11:54): There any limit or cap to the amount that someone could take from there? There is. Okay. Yeah.
(11:59): From what I read on the IRS website is a hundred thousand. Okay. Got it. Got it. Beautiful moves. They knew they didn't want guys too. Nice. Nice. So it's trying to figure out for me, man. My thing is in the Richard band in Babylon, the five rules of goal, only one of them are dedicated to earning the other four are dedicated to managing and manage what you get. What are those four? I can go get the book if you want my friend.
(12:24): No, it's okay. It was like 10 years ago when I read that book and now you're just sparking a seed. I want to go get the book and I want to pick it up. Yeah. Yeah. But it's all about the management. Yup. Chris, what opportunities are you looking at today? What do you see out there? Like I know that there's kind of doom and gloom and there's a cloud still hanging out there, but where's the silver lining. What opportunities are you seeing out there that you're pursuing now in the, regarding the real estate side? Yeah. Either your IRA or real estate in general or investing in general
(12:54): Real estate. Okay. Well, let's start with the investing. So still buy and sell, buy low, sell high. Hopefully it will still have a high, you know, cause we buy the discount like you do. I still have a finance local car dealers. So we have a, a like my IRA would just finance. For instance, they have a car lot. Like we'll finance different cars on a lot of we'll take a piece of that with real estate side of would ramp it up. Section eight, teaching a lot of section eight stuff is one of my favorite. I love section eight. That's actually, what's called the housing choice voucher program where your rent is guaranteed. So I haven't had a blip in rents since the crash. I mean, no, no problem. Sex. The government still prints the money and we still get it. But section eight is where I'm really focusing. Okay. Okay.
(13:39): This car thing sounds interesting. So you're literally like the lender on cars, like a warehouse line of credit. The bank would call
(13:45): Warehouse line of credit and then floor plan. If you will, the card, the Darryl calls me up. He says, Hey, you need 20 grand to buy a car today. We wired the money or whatever they buy the car, they sell it. We just get a look. Every car it's nothing big, but it kinda keeps the money moving.
(13:59): Yeah. That's awesome. The money's working for you instead of you working for it.
(14:02): Yeah. But you got it, man. If you don't have that skill, bro, you always be back to square one. Okay.
(14:06): Okay. And then on the section eight or used to call it a much fancier name than section eight, but the house voucher system, those opportunities, are you finding those houses or is this maintaining your existing portfolio?
(14:19): Maintaining and still acquiring, right? You got to get your money working. I still do lease options, but I don't know. My gut is, I mean, presumably options will still be good over the next few months, Nate. I mean, you're mastered that too. I just can't predict whether I'm going to have 10, 20, $30,000 down payments from people.
(14:37): Yeah. Yeah. People are a little more, I don't know. Yeah, you're right. People are nervous. So they're holding cash more than spending it right now. And I think it'll be that way until the economies turn turning again. And I know that this next question going to be a little bit like crystal ball talk, but you're an expert. So many people look to you for expertise and I consider you to be a mentor to Chris. What is the safe play in real estate? I mean, we could do what you're preaching, which is subsidized housing. Like that's sounds like a safe play. You keep getting your rent. Would you tell that to somebody that's sitting on the sidelines right now thinking about getting in or what would you tell them?
(15:12): Yeah. Cause man, I would just hate to advise somebody to get in and buy low in the market. I mean, I just, matter of fact, Nate, the market is doing extremely healthy where I live in the Hampton roads area of Virginia. Yeah. I mean it's extremely healthy. I just don't know. I mean, you know, next month you've been around me. I have seen markets turned quick from buyers to sellers and then people bring in money to close. Even I've been there at bringing $5,000 to get out of a house. You know, you just don't want to do that. Yeah. But if you bought low enough, you can always convert it over, you know?
(15:45): Yeah. We're in the middle of one right now where the Nashville, Tennessee, the seller on it, she's actually the seller. I just learned this, but she's actually the seller via a lease contract, lease option essentially in, she thought she had actual title, but she doesn't. But anyways, she's in a position right now where she's been paying on it for the last five years and because of the market and the condition that the is now in, she's actually in a spot where the equity, she thought she was and it gets just not there. And so we're trying to push our buyer up we're wholesaling and on the backside, we're trying to push our buyer up to help her. But I mean it's tight. Sometimes that happens in markets. If she would've sold it last year, she probably would've got more. But with this whole virus thing, it's tightened a little bit there.
(16:28): The market where you are, is that an in one of your, your that's a real life example of a market that you're in Nate,
(16:34): Real life market. My wife and I go after usually just lease option properties there that we can turn on a lease option. And then we do Sarasota, Florida and Milwaukee, Wisconsin.
(16:45): Well, so you're doing no risk stuff. If you're not getting it at Nate, you're just kind of getting rid of the contract. So I mean, you can't lose on that. Yeah.
The wholesale world, that's 75 to 90%, depending on the month of our deals are wholesale deals. And then we'll keep one out of five, roughly that ended up being a long term property and we do take it seller finance. And then we lease option on the back end.
(17:07): Can't lose it. That man, you can build an empire. That's called building an empire the right way.
I would have had your advice like a decade ago. But I had to go through the pain school of hard knocks first. Now I get it. Now I know
(17:18): That's cool, brother. We all got to live and learn, right?
(17:21): Yeah. Chris, dude, I value your time. I know that it's precious to you. I appreciate you man. And congrats to you and your wife on the new baby. Where can people go to connect with you if they want to connect with you? How do I put them?
(17:32): Yeah, the best place for me, man. Just come on over, come on over to Chris. That's K R I S Haskins on YouTube or instant real YouTube. I'm all on that thing all day. If you send me a comment on one of my videos, we can talk all day on that stuff.
(17:46): Ladies and gentlemen, take them up on that. It's Chris haskins.com or find them on YouTube. The guys seriously hilarious. It's like watching his own reality TV show. But the thing is, is that he's legit out there on the street doing what he's preaching right now. So I highly recommend you checking them out. Okay, Chris. Thanks again man. Appreciate you. Alright guys. Okay. I hope that you enjoyed that episode with mr. Chris Haskins. Chris is awesome, man. This guy's legendary in the real estate world and just a totally chill. Cool dude. So here's the thing. Next episode, we've got a really special guest coming on to talk about the ethics of this whole business. A lot of people will ask, well, Hey, is real estate investing ethical? Is it not ethical? And we're going to talk about that. We've got a guest coming on for it and make sure you jump onto that episode. So you can see how this business works in real life. Not from my mouth, but from someone that's actually doing this every single day at an extremely ethical level, taking care of sellers left and right. So I'll see you on the next episode. Okay.
(18:48): Bye. Hey cold calling can't stand direct mail. Wish there was a way to have sellers coming to you instead of having to chase them down. Now there is it's called the social media blueprint and you can get it absolutely free when you go to www.social media, blueprint.com/podcast.