How to Invest Remotely While Traveling The World with Michael Albaum - 505

We can't just have a situation where something didn't go according to plan and then we say, okay, that thing is bad. I'm swearing it off forever without taking a look around the facts surrounding why did it happen and is there something we could have done differently? And 9 times out of 10, Allen, there was. It was, I bought a deal because my buddy bought a deal, but I didn't know how to analyze it. Or I used no money down and the loan ate me— a variable rate loan and ate me alive.

Right.

There's usually a kind of a silver bullet we can point to, or smoking gun rather, that we can point to.

Welcome to Streams to Impact and be inspired to engage passionately in the work of your calling while achieving financial prosperity through multiple streams of high-yield returns on investment to bring your dream of making a meaningful impact to reality. I'm your host, Dr. Allen, and I am delighted that you are joining us today. If you haven't yet, get a complimentary copy of our exclusive guide, High Yield Investment Blueprint: Secure 18%+ Returns in 60 Days. Go to our website, highyieldblueprint.com. That is www.highyieldblueprint.com.

www.highyieldblueprint.com.

Just provide your email address, and we'll send you a copy today. So, Michael, your journey, much like Equus, has been one of transcending boundaries and inspiring others through your work. So can you share with us really the moment in your life and your experiences that spurned your passion to go into your aspect of real estate investing?

Yeah, absolutely. And I love the question. And frankly, it's burned into my mind this moment in time incredibly clearly. And so it was after I'd done my first deal, my very first deal ever, a little over a decade ago. And I was working at my W-2 job and I happened to be in the office that day. I was typically a remote worker in the field, but this day I happened to be in the office. I had done the deal 4 or 5 months ago, and so I was generating cash flow every single month. In, in my bank account. And I'm looking around and thinking, I wonder how many other people are doing this. Like, I can't be the only one. And so I started kind of floating the idea out there because I didn't really want people to know about that I was doing this. But I started floating this idea out there about investing in real estate. And everybody was like, no, I'm not, or never thought about it. Or yeah, it's always sounded interesting, but I never have. And it turns out that I was like the only one doing it. And I was like, wait a minute. What do they know that I don't? What, like, did I screw up here? Did I make a big mistake? Because I was really excited at first. And then I realized, no, they just weren't aware, didn't have the opportunities, didn't have the— whatever the reason for each individual was for not investing, it just wasn't important to them enough to do so. And so I was like, all right, this is going to be something that I'm going to do. And I want to help anybody who does want to do this as well, because if I can do it, literally anyone can.

Well, thank you, Michael, for sharing that moment of inspiration there. And I think it speaks to a lot, a lot of people out there that I run into and that you have run into. They go, yeah, I've heard of real estate investing, it sounds kind of interesting, but no, I'm not into it, not really interested at this moment in getting into that. I have some ideas as to what that's all about, but what are your perceptions, especially now that you have left that W-2, you're into this full-time, and so— and your inspiration really is, as you continue investing in yourself, you also— your big inspiration is actually educating other people.

Yes.

And so what is it that you have run across that Puts people in that position that, yes, I know about real estate investing, but nah, it's not for me.

It's, from my experience, Allen, it's one of two things. It's one, it's my parents got burned, or I've been burned. I invested in '07, '08 and got burned, or I saw my parents lose their house, and so I know, I don't know much about real estate, but I know real estate equals bad, real estate equals dangerous. Or two, real estate investing is only for rich people, and I don't consider myself a rich person, and so therefore, I don't have the money to invest. I don't have $1 million to go invest in an apartment building. Therefore, I cannot invest in real estate. So, it's perception of risk, and I think it's perception of barriers to entry are really the 2 ways to surmise the limitations that people put up for themselves.

Yeah. I mean, that's what I have found, that it's that fear factor. And oftentimes, yes, they have been burnt in a number of different ways. You know, primarily with passive investors who still are really quite invested in their professions. But oftentimes I see the same thing. Many of them have had passive investing in the past and they didn't provide the tax benefits that they were promised. They didn't provide the returns that were projected. And so it just leaves a bad taste in their mouths.

Yes.

For a number of, you know, and for very valid reasons. I feel the same way myself. So, in working with people, it's unfortunate that they've had those bad experiences. I could go on all day about my bad experiences.

Me too.

But because— so they certainly are there, but the rewards have just been so plentiful that, you know, as time goes on, you— you know, I put those bad experiences in, you know, in the background and just chalk them up to, well, it's just part of education.

Well, and to that end, I mean, imagine if somebody who had a bad experience in a car maybe gets in a car accident, said, I'm never going to get in a car again. Like, that would be a really— so I think if we can just shift the mindset a little bit of like, yeah, bad things happen, but as long as you understand the risks and are informed about them, okay, well, that's a calculated risk you're willing to take then. And we do that every single day.

Yeah, absolutely. So how do you, how do you get over that hump with people to actually get to the point where they go, okay, well, Let me take another look at it here. How do you, how do you get them to that point?

I think it's in part sharing my own personal experiences and my own trials and tribulations and hurdles that have been overcome and experiences where I've got my lunch eaten and gotten punched in the face by this business. But I'm still here. I'm still doing it because of everything you mentioned, because I believe in the power of real estate investing and I've seen and experienced it firsthand. And so I think when you start to explain to folks, look, the way what happened to you happened for reason A, B, and C, and we can kind of do a postmortem. And we do do that and explain and look to understand, okay, well, why did that happen? We can't just have a situation where something didn't go according to plan. And then we say, okay, that thing is bad. I'm swearing it off forever without taking a look around the facts surrounding why did it happen?

Mm-hmm.

And is there something we could have done differently? And 9 times outta 10, Allen, there was. It was, I bought a deal because my buddy bought a deal, but I didn't know how to analyze it. Or I used no money down and the loan ate me, a variable rate loan, and ate me alive. So like there's, there's usually a kind of a silver bullet we can point to, or smoking gun rather, that we can point to. And once we build the framework around, okay, well that was that experience. This is still real estate investing, but this is the framework that we're going to use and operate within so that that doesn't happen again. People usually can get over that bad experience. Okay, well, now I've got someone who's holding my hand, who's taking me through this whole process in a very methodical and scientific way. I can now apply logic and reason to the situation. I'm feeling better about it. But I mean, there are folks that just say, nope, I'm never touching real estate again with a 10-foot pole. And I say, hey, that's okay. It's not for everyone. I believe it can be for everyone. But if somebody has a personal experience, or trauma or an experience that says, you know what, that doesn't allow me to get there, that's okay. I'm not here to force anybody into anything they don't want to do. I'm simply here to educate those who are willing and open to listening.

Well, yeah, I agree with you totally that anybody can do it, and there's really no reason for everybody not to be doing it. And at the same time, just like you, I'm not going to force people into it who don't don't have an interest and don't want to. But to that point that anybody can get into that, we actually— you and I, it would look like in a lot of ways that we're in competition with one another, but actually I don't look at it that way at all because there's so many different avenues into real estate investing. And where I'm— my focus is Working with professionals who definitely want a passive investment and they want to continue pursuing the development of their careers. You provide a very different entry level. And so talk to us about your program and your particular entry program. My entry program is going to take about $50,000 dollars in assets. Your program, they can start at a much lower level. It's just a little bit more active. So talk to us about that.

Yeah, well, I appreciate you asking. So it's called MyFI Academy, and it stands for My Financial Independence Academy. So myfiacademy.com. And it's really a program designed to help beginning investors get off the sidelines and actually get into real estate, or help those folks that are— have maybe gotten into real estate already but are having difficulty scaling to that next level, whether that's That's their second property or their fifth property or their seventh property, or get into a different asset class. Maybe they've gotten really good at single-family but haven't yet taken the dive into multifamily. So it's a self-paced online curriculum. There's some coaching available if folks need the one-on-one help. But basically what I've seen, Allen, and it sounds like you have as well, is there's so much content out there. And a lot of it's really great and a lot of it really isn't. And so it can be totally overwhelming and so easy to get lost in, I don't know what I'm doing. And so therefore, I don't know what questions to ask and I don't know who to believe. And so I always say the proof is in the pudding. Go, go learn from and go listen to the people that have done what it is you're looking to do and listen to them because they're, they're on the path or they can help you get on the path. And so I just let my experiences speak for themselves. There are so many folks out there educating people, and I think it's really exciting. Some are better than others, as you and I both well know. And so I just said, hey, this is my resume. Anyone who's interested in doing this, Come along, I'll show you how to do it and I'll help you do it. And so it's really, again, for that kind of beginning investor or somebody who's looking to scale their portfolio. If that's you or that sounds like someone you know, would love to chat more. Come check us out at myfiacademy.com.

Exactly. I mean, there are, there are all kinds of real estate gurus out there, one behind every tree out there.

Yes.

And we got a lot of trees here in Appalachia.

Yeah.

So the fact that there is a huge variance in terms of the quality of the programs and in terms of the cost of the program is enormous. And so suggestions, what suggestions do you have for helping people to ferret out what's a good program and what is not?

Yeah, I would say look at the track record of the person who's teaching the program or who's built the program. And I would look to make sure that they are still actively doing the thing that you're looking to do. And so, if you're interested in a passive investing program, make sure the person teaching it is actually actively investing in a passive investment program. Or if you're looking for somebody who wants to teach you how to invest in short-term rentals, make sure that they are investing in short-term rentals and not just someone who did it 10 years ago and now, Wrote a program and says, okay, I'm gonna ride my coattails. The market changes and it's an ever-evolving being. It's very fluid. And so if somebody isn't actively in it with you, you're like, they're gonna miss. There are all kinds of things that don't work today that worked a couple of years ago, strategies, tactics, ideas, that if you're not evolving, you're not staying up to date. So that's first and foremost. Secondly, I would say look at the cost. If somebody is trying to charge you an arm and a leg and there's constant upcharges or next level or this and that, it's like, man, just give me the information I need to know to go do the thing I'm trying to do. And so that was how I designed my program. It's a one-time cost, or you can pay monthly and you get access to all the stuff. There's no secrets, there's no hidden stuff, there's no paywalls. And I wanted to make it really approachable for folks because I think there is this misnomer that real estate investing is only for the ultra-rich or only for really wealthy people. And so I said, no, let's kind of break down these barriers. Let's make it approachable. And so I've gotten the question, it's like, okay, if you're so altruistic, why isn't it free? And I said, well, because people aren't going to pay attention if it's free. There's tons of free content out there. Go consume that. I highly encourage everybody to go look at the free stuff before ever coming to a paid program. Once they've exhausted or once they've gotten themselves so confused, I say, hey, come pay attention to a paid program. And I know you're going to pay attention because you're investing dollars in it. And so I'm not really willing to work with someone that's just kicking the tires that wants to say, oh, you should give me this for free because I deserve it. No, come pay for it. Come pay attention. Then go use the stuff out there and go do the thing that you're trying to do. That's always kind of been my 2 cents.

Yeah. Well, yes, there is a lot of free information out there and you can learn a tremendous amount out there. But I mean, with your program and with my program, it's, you know, there's a mentorship involved in there. That's my time. That is your time.

Yeah.

And I mean, would you have any respect for me if I didn't have respect for myself? Probably not. And, you know, my time is valuable. My— it's not just my time that's valuable. It's my knowledge, my expertise. There's value in that. Well, I'm just not going to just give that away for nothing.

Right, right. You had to pay taxes on getting that knowledge, right? The dumb tax, as they call it, right? Go hit those hurdles and trip up. So absolutely, that's absolutely worth something.

And I'm sure, like with you, it's not— they're not just paying for my knowledge, my expertise, and my one-on-one mentoring, they're paying for a network that took me years to develop. And not— it didn't just take my time, it took money for me to develop that network.

Absolutely.

So yes, I deserve a return on that investment, as, as to you as well.

Absolutely.

You know, depends on what you want. If you want the free stuff, and I'm like you, I suggest everybody start with the free things that are out there. Yeah, there's lots and lots of free information. That's— I certainly began there, but I didn't really start developing my wealth until I go, I need to put some money into this education with folks who really know what they're doing.

Mm-hmm.

And when I started doing that, it was the— my network really started firming up, the network that is critical to not only to me but to those who are investing with me.

Yep, absolutely.

Yeah, so that makes a difference. Well, take us on just a bit of a journey. You talked a little bit about your first deal and how that was going so well for you, and you looked around and nobody else was doing it. Tell us about the deal and then the transformation from that first deal and that point in place where you were able to take your investment income and replace the W-2 opportunities?

Yeah. So that first deal was in— so I grew up in California, in LA, and this deal was about 4 hours south of where I grew up. And that happened to be about 7, 8 hours south of where I was living at the time. I was living up in the Bay Area and I— my dad owned some raw land with a couple of small outbuildings down in this market. And so we had a property manager who was also our agent, our real estate agent. And so he said, hey, let's, let's start here because we know this person already. And I said, okay, that sounds great. The idea, this idea of remote investing was not on my radar. It wasn't part of my vernacular. And so I said, okay, this was my purview, right? This was all I knew. And so we went down there and I had this idea of, okay, this is my budget. I'm going to invest. I'm going to buy a property for $200,000. And if it rents for about this much, that should cash flow. And I had my spreadsheet, my calculator, and I said, okay, this is, My budget. It's like when you go shopping for a car, you know, you say, okay, this is my budget, I'm sticking to it. Well, none of the properties she showed me were anywhere close to being in my budget. And they were all at the bottom tier of the price range for this particular market. So I was like, oh crap, I guess I'm not investing here. And my dad sat me down. He says, look, well, what do you— what's tripping you up? What are you worried about? And I said, well, it's got to rent for this. And, you know, this is the price it's got to be. And these— so these numbers here don't make sense. And he said, well, what about on a monthly basis? I was so focused on the sale price, the big number that the mortgage was, that I lost sight of the monthly expenses. And I said, well, there's like a $600 delta between the price point where I wanted to be $200,000 and all the properties I was seeing, which were at $300,000. And so it ended up being like $600 difference. And I was like, well, I could cover that. if something went sideways, I could totally cover that. I have a job. I was earning a strong salary. I was living well below my means. And so I was like, I could do this. I could do this. And he goes, and the expenses on a monthly basis that you're locking in today are going to move a little bit. Taxes in California are fixed at the purchase price, which is kind of a nice thing. They increase a couple of percent every year, but not— they don't get reassessed until the property is sold. The debt is fixed. Insurance is, of course, going to change. And we're seeing that drive a lot of decisions now. But on single-family homes in Southern California, it wasn't crazy. So the other variable costs weren't likely to change in a big way. And so I said, okay, well, if those are relatively fixed, but the rent should grow rather significantly over time, I said, well, this investment is like a fine wine, is likely only to get better with time. And so I said, okay, I'll do this. Let me do this. And so I jumped in and did it and found out that my assumptions were true. that the expenses grew at a much slower rate than the rent did. And so, it threw off cash flow every single month while I owned it. And I was like, this is amazing. And so, my goal, Allen, was to do this 10 times, once a year for 10 years. And then I would have 10 properties. And that sounded great. And so, I did it for 2 years. I did the first property and the second deal, both in the same market in Southern California. And then I was traveling a ton for work. My territory was the western U.S. And so, I was traveling all over the country. And wherever I happened to be, I would look on Zillow because now I'm a big, bad real estate investor and that's what we do. So, what I started to realize was that out-of-state properties would sell for the same price for what I paid, but would have multiple units and would have 2.5 to 2.7x the rent. And so, I was like, well, wait a minute, these numbers make way more sense outside of California. And so I just started doing research in these markets where I happened to be in, and I was gobbling up properties as fast as I could. Very inexpensive properties, mind you. But wherever I happened to be, because I was living well below my means, I had a job that was paying for most of my living expenses. So I was able to turbocharge my savings. I had roommates. I did the whole like continued my college lifestyle in terms of expense and cost well after college. So I was saving a ton of money and so I was dumping everything I could into real estate investing. And that's when I figured out, okay, I could do this remotely. It doesn't matter where I live and it doesn't really matter where the property is. As long as the numbers made sense, I'm good with it. And so I was like in 6 different markets and I thought, oh, I'm such a genius. I'm so well diversified. But it got to a point where I was making 6 different property management calls to find out about 6 different properties and it was just way overwhelming. And so a buddy of mine, he's like, dude, like press the pause button, go focus on 1 or 2 markets maybe. and get laser-focused and go hit those hard and watch what happens. It'll blow your mind. I was like, I don't know, that's kind of counterintuitive to this whole diversification idea, but you're way more experienced than me. And so, kind of getting back to what I was saying earlier, listen to those people that have done what it is you're looking to do. And this buddy of mine was well on his way to doing exactly what I was trying to do. So, I said, okay. So, I got laser-focused, focused on 1 or 2 markets and And just hammered those as hard as I could. And he was right. The results blew my mind. I was able to learn so much deeper about a particular market as opposed to having to get set up with a new team and new market diligence in every particular market that I wanted to operate in. And again, that's not good, bad. That's not good or bad. But those are just the facts of the matter.

If you're—

every new market you go into, you got to set up with a new team. You got to understand the market, what drives it. And so I was fine to do that for the first 6 times. But then after a certain point, I said, no, no, no, let me go do this once. And it was just this total unlock of, okay, let me go deep, let me understand this market. And I can diversify within a particular market in terms of asset classes, in terms of neighborhoods and submarkets. And so I was able to get my head around that because I come from the insurance world. So risk mitigation is my bread and butter. And so I was like, I don't know, but I was able to really diversify within a particular market. And it's been amazing. And it just hit this point where my dad had passed away and I asked work for— I said, I was like, I need 6 months off unpaid. I said, I don't need you to pay me, but I need you to hold my job. I love the job. I like the company. 6 months. And they said, oh, we can't do that. And I said, okay, well then I'm not— I don't need this job. So, my wife and I left and went and traveled abroad and she was still working full-time remotely. But our real estate portfolio was throwing off enough income that we were able to live quite nicely abroad because of that fact. We were earning rents and income in US dollars and then spending money in pesos or colones or whatever currency we happened to be in with a great exchange rate. And so, we're like, this is amazing. Fast forward, pandemic hit. We ended up coming home, did a bunch of other stuff in real estate too at the time, ended up going back to work, had a project go totally sideways, which we can get into if you and your listeners would like. Had 2 fires in a building. One week apart. Insane time in my life. But it was just, I just realized like right then and there, okay, if you, if you set this up properly and you really maintain a strict living expense or cost of living, this is totally doable. Hmm.

Well, you just mentioned, you know, just a whole lot of things that I recommend to, to everybody, and that is spend less than, than you earn and no consumer debt. And, uh, and invest wisely. And you have just given us a perfect example of, of how you can do that. And you just laid out a perfect path, uh, that people can do it with minimal assets, minimal capital, and can begin their, uh, their investment journey in a very smart way. And, uh, and the other thing that That I think that I would like to point out is that you were doing a lot of things that were less than productive, and that's because you were flying by the seat of your pants. You didn't get the education that you needed there.

Yes.

You were investing in properties all over the country, and you had all of these various different property managers that were working for you. And I can't imagine the hours that you had to spend just keeping track of your property managers. But with experience, with a friend's advice, you consolidated that into, into one area. And another thing you mentioned, when you decided to really concentrate and focus on that one area, your— Knowledge and understanding of that area grew exponentially.

Yes.

And you knew that market, and you knew the submarkets, and you knew it inside and out. Uh, those— that's just valuable, valuable knowledge, uh, for, uh, an investor.

Yes.

And so, uh, Michael, we're Out of time here. So tell us about one of your most difficult experiences in real estate and how did you face that? How did you come through that? And what did you learn from that?

The most difficult thing I think I faced in real estate was, was these 2 fires that I had in a building that I was developing. And it was in the middle of the course of construction and it was the middle of the pandemic. And I got locked into this 3-year insurance battle and I was like, oh my God, I've just tethered myself to this sinking ship. And oh, by the way, it's on fire, literally and proverbially. And there was nothing I could do to get off it for a couple reasons that I don't need to get into. But I couldn't get out from under it. And I said, okay, here we go. Like, I have to make this work. And so, I pulled on a bunch of different levers that were available to me. Thankfully, I had spent the last decade building up a real estate portfolio that had some equity in it and was able to right the ship. Extinguish the fires. And so a couple of things I recognize is, first and foremost, don't let your ego drive your investing because I was— this was absolutely an ego investment. I saw pie in the sky, look how much money I could possibly make, and I didn't understand the downsides and got way too over my skis. Secondly is, if you're in the middle of an insurance claim, a public adjuster is likely going to be your best friend and biggest ally in this because us as individuals, I hate to say it, don't stand a chance against insurance companies. So we have to have somebody in our corner being an advocate for us. And that wasn't something that I realized until a little too late in the process.

Right.

So I was behind the 8-ball playing catch-up. So I think you've got to understand those 2 things first and foremost, if you're going to get into real estate investing, because I, as a testament, can show you that these things can happen. Right. And I think that's so important to understand and not just think it's all going to be Rosebuds and Tinkerbell. Things can go sideways, and when they do, they can go sideways quick.

Yeah, absolutely. Certainly, I have been there myself. Michael, it's been wonderful having you with us. And tell us one more time, how do we find you and your educational program?

Thanks again for having me on. This was a ton of fun. You can find me at myfiacademy.com, M-Y-F-I academy.com. Folks can find me on Instagram. I'm @MyFiMike. On Twitter, I'm @MichaelAlbaum. I host a podcast called The Remote Investor on all the, all the podcast platforms. You can find me there as well. Would love to hear from any of your listeners. Come say what's up. Don't be a stranger.

And we'll have all of that information in the show notes as well. So, enlightened investors, thanks for being with us on Streams to Impact. And I hope you've been inspired and like the EQUAs that you fly, across the terrain and create new and wonderful opportunities for yourself. Please take a moment to like, share, and subscribe, and I'll see you in our next episode.

Thank you for tuning in to Streams to Impact, brought to you by Steed Talker Capital, a company empowering passionate professionals like you to develop multiple streams of passive income built on solid passive real estate investments. As a significant part of our endeavors to make a cosmic and meaningful impact for this world, Steed Talker Capital contributes significant portions of our profits to activities and organizations committed to better understanding the equine. These endeavors attempt to enhance the treatment of horses worldwide. Steed Talker Capital, working for a world where all creatures great and small flourish abundantly. If you are ready to learn how our passive investors have earned an average 33% annual return on their investment, Schedule your complimentary Passive Income to Prideful Impact consultation. Obviously, we cannot continue indefinitely to offer these valuable consultations for free, so grab your Passive Income to Prideful Impact consultation while you still can. Go to steedtalker.com/passive.