If I started from Scratch again, I’d do this | Real Estate Revolution Podcast Episode 10

Coming up on this episode of the Real Estate revolution.

I have 36 acres and I had thought about doing stuff on the property there. Again, my mindset is these questions were written down when I was thinking about passive income to make that land to make money. And after that mastermind, I thought, well, there's this section over there that I won't see when I build my house, so why not put a couple mobile homes over there to rental?

This episode is so full of great questions and great strategies. You are not going to want to miss this. Make sure you listen till the end. Welcome back to the Real Estate Revolution podcast. I'm your host, Steve Ballantyne. Today I have Wendy Steck. She is with Real Brokerage in Texas, near Dallas, and we're talking about a plan. And one of the interesting questions she has if I was going to start over, where would I start in my real estate career and building passive income and what would I look for? Wendy, thank you so much for joining us and showing up. I'm super excited to do this. We recently met in one of the real brokerage masterminds on Workplace and we were talking about seller carry and I think it kind of spurted some questions. And so here we are two days later. So thanks for coming on and doing this.

Thank you. Thank you for the invite. I'm excited. I got a list of questions here. Let's go.

Oh boy. Let's go, let's go. I can't wait.

So do you want to answer that first one that you used, your intro?

Yeah, go ahead and. Go ahead and ask me. Yeah, so go ahead and ask the question.

If you were to start over as an agent to go and build passive income, knowing what you know now, how would you start and go about it in an intentional way?

So that is a great question. So if I started over, you, you know, where would I start to start creating the passive income journey? I think the one thing that's really important is that as we start in real estate, we have to understand that it takes a lot of money typically to generate passive income, you know, down payments, things like that. Until you understand the creative side of real estate with wraps and seller carries and some of the different things and all the markets are different. So if I was going to start over, I would have taken the first two years with my dad and really understood the traditional side of the business and then I would have started focusing on the investment side and the creativity side and understanding how all that flows and works so that I could eventually be a problem solver. For my clients, because when you're a problem solver, you have more opportunities provided to you. And I think this is where the fine line with newer agents, you've been in the business six years is there's this fiduciary line that everybody thinks they can't cross, but they really don't understand it. And our fiduciary responsibility is to provide the options for somebody, guide them through the best option that is going to work for their current situation. So it always amazes me how we put houses on the market that are messes and we tell the client, like, yeah, we got to put it on the market and go through this, and we're willing to go and find a buyer for it, but we're not willing to go find the money to purchase the opportunity. Right? And so there's a. Where I'm at now is really connecting the dots, right? So I've learned and understood about money and rates of return and how that works so that I can work with private individuals that gives me capital in order to capitalize on opportunities as I see them. So I think you had mentioned it when we were offline, where a lot of agents get. Get stuck in the first couple of years of the shiny objects of, well, I want to be a top producer and I want to go down this road and I want my name in lights and rainbows. And the reality is, is that most agents in that position, I can guarantee you that they look really good on paper, their transaction count is really high, but their net worth is very low. And because they're not investing in what they know, does that make sense?

No, it makes total sense. And that's what I was saying offline is that, you know, I became. Became a real estate agent with the intention of learning what I could learn and doing things to build the income passively for me and my family. And then I just got caught up. You know, I hit those benchmarks. I did. But I wasn't the agent that went out and bought a new house and a new car every two years and did this and spent it. Like, I literally saved a lot of it outside of vacations. So I have, in the back of my mind, my goal was still there, and now I'm ready to take action to make more happen, which is why we're doing this right now. I'm just, I'm excited about it. So. But, and so when you were just answering that question, it made me think. I mean, I see opportunities in the past that I could have been created because creative and solving the problem for them in the best way for them, and still benefited passive income for me in the long run. But they would have loved the idea, but it wasn't in my head yet, like right there. Again, fiduciary duty. And I love the. I don't know if it was on that mastermind the other day or whether I was a YouTube video or what, but I love the idea of being become known as a problem solver, a creative problem solver for people. Which leads me to my next question.

Before you ask that next question, one thing that I think is really important as you're starting out in real estate is to think about a goal, right? So we get tripped up in the initial goals in real estate as we become agents, which is what are your transaction goals and what is your commission income goals and those types of things. But rarely have you heard somebody ask, hey, in real estate, what is your passive income goal and what is your net worth goal and how do you want to increase that every year? And I think those are two goals that need to be added to your list no matter where you're at in the business. Like, those are very, very important goals to consider and think about.

No, and I agree. And outside of Real Broker, because I just joined them in October or November of 22, so I'm pretty new.

Welcome.

Yeah. And I actually caught a snid bit of you in San Antonio at the conference. I didn't make your whole thing. I wasn't even an agent then. I joined after that.

Got it, got it, got it.

But you know the one part about my question that because I quit reading it and started looking at you, because I knew, like, I know I have some passive income and it's growing a little more with Real Broker from that aspect of it. But for the first two years, I want my passive income to be $10,000 a month, passively. That's what I want. And I want to, I want to double it the next two years. Like, you understand? Like, I know, like I've been looking at my numbers. That's not what I need to be financially independent. And then I'm doing real estate more freely, more fun, more easy going. Not like I have to hit this number and I have to hit this, you know, every year. And I know. No, no, no, no, no. Okay. So with, with the, with being you're known, you've got a reputation, People come to you because they know you're a problem solver. Right? Okay, so if you didn't have that. Because I'm not known as that I'm known sure as a realtor, a mom then that the kids second mom you know all over town like I known for me until I'm known for that. What other creative ways could you would you seek out to find different properties?

Well if you didn't know I've released my first book and published it is available on Amazon. Limitless Real Estate Strategies. I wrote this for anybody in the real estate business. I don't care if you're a real estate agent, lender, wholesaler, investor. This will help you change and break some myths that you think are out there. It will also change your life, change your legacy and ultimately help you build wealth while creating win win strategies. So pick it up on Amazon today. Well there it goes back to some of the things that you had mentioned before, which is you had stopped doing some lead generation thing and when we first started into the business. Lead generation is important unless you've got a big sphere of influence. Right, but let's just say we're not buying lead gen and you're talking about where you're involved in school and where you're involved with your kids and anything else that you're involved in. Are you selling yourself as a realtor, which we all know when you do that right. People tend to run because they know 12 people that do it. Right. But can you start to have the conversations of well, I'm a problem solver. Well, does that open the conversation? What do you mean you're a problem solver? Well, real estate has many variables and I like to show people all the variables and all the possibilities with their home when they're considering selling or buying. So for instance, you know, with my first time home buyers, they are always first time investors and I change their mindset to understand that, hey, when you want to retire, how much passive income do you want to have? You're 25 now at age 55, do you want to have 4, 5, $6,000 a month in passive income? This is how we're going to get there, Right. So I show the clients and we look at houses from an investment standpoint rather than an emotional standpoint of hey, this is what this would rent for once you keep it for a year and then we're going to refinance and we're going to move on and we create a strategy around it. Right. So we're moving them through those things. Now you asked about opportunities of where to find those properties. Well, to be honest with you, it, it's twofold. You're a real estate Agent. So if people, if other agents don't know that you can buy properties and you can solve the problem, they're not gonna bring you their problems. Right. So you have to be prepared for opportunity, which means it's gonna take capital or hard money relationships or something of that nature to where you do have the capital to solve the problem. Okay. So that is one thing. And then. So agents are a great source. I would say about 50% of the problems that we solve come from other agents in pho because they're not at that level or they just started or they don't want anything to do with it. Right. They just want to make a commission, solve the problem for their client and move on. And, you know, for you as well, that serves dual purpose. So if you're creating relationships with agents, it serves dual purpose. Right. Can you help them solve the problem and does it lead down the road of potentially them coming to work with you at real. Right. Which is another passive income source down the road of, you know, the payouts for it? So want to look at those two things. The other source is, you know, the other source is really, you know, going back to any sort of lead gen source because you're newer in the business and you may not have the reputation that I've built over time. You may want to do some lead generation, but in a different way. Right. So it's, you know, using the term strategy and talking to people or maybe doing some farming. You know, if you sent out mailers to a neighborhood and said, have you thought about keeping your home as a rental and buying a new one, that's different than I just sold the house in your neighborhood postcard. Right. So how do you capture some of those and market from the standpoint of where you really are trying to solve the problem and help that person potentially build their wealth? Some people want to, some people don't. But those are a couple of options that I might utilize as I started new in the business is just changing what we see and doing it differently from that marketing standpoint.

Yeah. Making it just small little adjustments in the conversations that we do have. I agree. Would make a huge difference. And I didn't even think about other agents. You're exactly right. They don't want to touch it. They just. They just don't.

No, they want to collect a commission. Yeah, yeah, go ahead. And here's the deal is that, you know, there's agents that are wanting to move to that point, but they're not quite there. So they need to have somebody that can Step in and solve it. And if you're always the answer to that problem, then they're going to call you every time they have one. And it creates a great deal flow as far as buying homes off market, those types of things, and it helps them as well. And eventually they'll get to that point that they're doing it themselves. And so that's why creating ongoing relationships with agents is really important. And it also, it betters our industry because it's a win win. And I have a joke that I go on more listing appointments with other real estate agents as the buyer than I do on my own. Like, hey, I'm going on this listing appointment and I know that it's trash. Do you want to go take a look at this with me? When I go for it, I'm like, yeah. And then a lot of times I end up buying the house right there on the spot.

Really? That's awesome. That's awesome. Well, to go back to something, I think we said it off air, I mean, what's your take on Airbnbs? And, and by that I say somebody was telling me that they long term rent properties and then they Airbnb them out and they're like the best tenant for that, for that property owner because it stays clean and their profit margin is big. And I know this isn't like in true real estate, so if you want to scratch that question, we can scratch it. I just want.

No, no. Everybody has a different take on vrbo. So from my opinion, I don't do a lot of vrbo. I have in the past. I've owned them, we've leased them, we've done all that stuff. It depends on the market you're in and how much access you have to people to service the vrbo, your cleaners, your handyman, those types of things. Because a VRBO is work. You're either trading time for money or you're trading money for time. And what I mean by that is like you might hire a property manager to manage the vrbo, which is going to create less passive income but give you more time. Or there is the, okay, I'm renting it out, but I'm taking the applications and I'm managing it and I'm doing it myself. And, and there's a lot of automated processes and things like that. One of my great friends, they do a podcast called Get Investing G H E T Investing on Instagram. And they have had their students of mine and I've mentored them through a bunch of different processes and he was a dentist and now he's a real estate agent investor. And they're having tremendous success on their VRBO stuff, but that is their bread and butter and that's what they're working. So he has the time. We have a brick and mortar business where, you know, when you look at, okay, you know, you made the mention about creating passive income. Well, I think it depends at what time you want to create passive income. Right. As much as I want to create passive income right now, it's not my priority. My passive income is going to come when everything is paid off and I'm done working the business. And it's more about time. So I'm gonna trade time for money or money for time, and let somebody else manage the asset so that I can keep doing the things. Because think about this for a second. Let me give you an idea. If you are paying $10,000 a year for a VRBO management company and you don't have to touch anything on that, that vrbo, but you're not cash flowing very well on it, maybe you're negative, maybe you're positive. Whatever the case may be, somebody's paying the asset off. But how much time do you have? And do you think you can create $10,000 of income in that year with that time? So if it costs you four hours a month, which is, what is that? 48 hours a year, which is an entire workweek that you manage The VRBO for 10 grand, do you think in that 48 hours a year you could find something else to make $10,000? Yeah, it's, it's a mindset thing. It's, it's really. But you're, you're just at the beginning stages of it. So again, I'm going to try to help shift your mindset around what you're doing and understanding that trading time for money. Because my mindset right now is the 80 plus properties we own, some of them cash flow and some of them do not. And I, it's not a priority to me right now. We're making really good income. And by the way, if I'm focused on that and I'm not focused on the problem solving, and I can go, you know, this morning, solve a problem for somebody, connect the dots, and make $15,000 in, you know, 30 minutes for connecting the dots because I solve their problem, is my time better served in that arena than it is managing a vrbo?

Oh, absolutely.

Right. So if you're spending more time, if you're spending more time finding a house to flip or a Creative financing deal versus managing an asset, even though you're making less cash flow on it, you gotta equate the time that you're spending on something that makes more money and let somebody else help you get that asset paid off and free and clear. Because that's where the passive income starts.

Right. So it's basically a mind shift. Shift of focusing on net worth versus monthly cash, 100%. All right, so hypothetically, because this is something, I have 36 acres and I had thought about doing stuff on the property there. Again, my mindset is these questions were written down when I was thinking about passive income to make that land, to make money. And after that mastermind, I thought, well, there's this section over there that I won't see when I build my house, so why not put a couple homes over there to rent them and okay, you know, all these different things. But in East Texas, raw land is expensive, like where I'm at. Of course, my land is paid for free and clear, so. But if I wanted to buy that same property right now, it'd be a half a million dollars or more.

Okay, so. So let's. Let's go down this rabbit hole because this is where it's going to get really fun. Are you ready? Okay.

Yeah.

So you own a parcel that's 36 acres. And do you have a home on it right now?

No, just my cows raise cattle too.

Just your cows. I love it. I love it. Okay, so we have 36 acres that you pay taxes on for the cows to eat.

Yeah.

So is that. So tell me about the 36 acres. Is it splittable?

No, it is. And it's ag exempt, So I pay $300 a year in taxes and the farm gives me a great tax deduction. It's been amazing during my real estate career where I was making a lot of money.

Now what'd you pay for that?

Huh?

What'd you pay for the land and how long ago?

I don't know. It was a long time ago, probably 15 years ago. I'd have to go back and look. Long time. I have the mineral rights too, which is crazy. I didn't even know I had them until oil people started, like, sending me, like, stuff to sign in the mail. I was like, no, I'm good. No, you can't put anything on here. Okay. So it's got a lot of potential. It's got a spring on the back, it's got a tank in the front. It's only got about three acres of wood, so it's perfect. For the cows. But I wanted to build a house on it. But there's so many other ways that that land could make. Could turn a profit for me, and I just want to do it. And if I don't build on it, it's got to make enough money to want to keep property somewhere else I can build on.

So tell me about location of the land. Like, are there people in that area that are renting, looking for places to live, looking for places to purchase?

All the above? It is in between the community I live in and then the northern community. It's. There's subdivisions being built in the neighboring town. They're just really small. Rental properties are hard to come by. Like, I could put a freaking RV on that land and probably rent it.

Okay, so let's. Let's go down the rabbit. Let's go down. Let's go down the rabbit hole. Okay, so you have 36 acres. If you're going to build a house, what section of that land? Let's say you cut out. So I'm just going to give you my opinion of it. And, and you can kind of shift it however you want to. Is it. Is it minimum 1 acres or is there a certain specification on. Specification on splitting it? Okay, 36 acres is a lot of freaking land. Okay. So if you think about it, you could go in and go, okay, I'm going to take 15 acres and I'm going to create a mobile home subdivision and I'm going to put manufactured homes on it and I'm going to rent all these things out. Now you're talking about like, yes, there's planning and you probably need a partner to help you go down that road. But if you can only do so much yourself, how much faster can you do it with a partner? Which is like, okay, if I took five acres and I could figure out how to place manufactured homes and create my own manufactured home or mobile home community, what does that look like in the long term? Right, because you don't have to split the lots. You just have to place the homes and you have to put utilities and all the other things to it. Right. So you have a parcel that you say needs rentals, needs things. Well, you already own the land. Okay, well, I can tell you which I'm imagining it's the same price out there, and you probably don't need as fancy, but you can probably buy single wide manufactured homes, probably in the 70 to $80,000 range.

Yeah.

Okay. So I mean, I explained that I just bought my first one and we're Going to do more of them. Because the one that I bought was a double wide and it's manufactured, it's beautiful. It's got a little white picket porch and it looks like a house. And we paid 127 grand for it. We put it on a small lot. I think my lot is like 6,000 square feet. So nothing like yours. And that house, when we're all said and done, we're into it for 220, it's worth 310 and it's rented for $1,900 a month. Okay. So we start looking and dreaming of, there's nothing outside my limits. But if I could put 20 manufactured homes on my land and create subdivided out as far as cutting off the land and saying, how much land do I need to do this? Creating your own little miniature RV park, maybe it's 10 homes with the room to expand. So we kind of look at future, right? So we're going to do it small and then we're going to expand and what's it gonna cost me to do this and how do I finance it, right? So now we're getting really creative and really outside the box. So let's say all of a sudden, what do you think? What do you think a thousand square foot home that's a two bedroom or three bedroom, two bath would rent for out there right now?

Probably $1,000 a month or so. Okay.

Let's just say a thousand bucks more than that.

My little two bedroom, one bath that I had, that I sold, that I told you on the mastermind, I rented it for 850amonth and it was a little bit house, okay. And this, I'm not really in the rental market, so I just know people come to me all the time asking.

So you want to be, you don't need to go be a property manager or a landlord. I mean, I know that you own some stuff, but you do need to experience and learn the rental market out there because this is going to be important to your success. Because if you're telling me supply and demand is an issue for rentals, then you know, you need to go create the supply, right? If there's a demand and people can't find rentals, that means you're getting higher rents and there's demand for it. So now you can start looking at it going, okay, If I finance one manufactured home for 70 grand, your 30 year mortgage is $419 a month, okay? If it rents for 850, expenses, land, whatever, all those things, right? Because you're going to have some infrastructure costs, some other things.

Yeah.

Let's say you're cash flowing $200 a month. You said at the beginning of the call, I want to create $10,000 a month in passive income. Well, guess what, it's, how many homes do you need to get to that $10,000 a month. And oh, by the way, the money that's being paid is paying this stuff off. So let's say you're cash flowing $200 and you want to create $10,000, you need 50, $70,000 manufactured homes that cash flow at $200 a month. Now think about this. That is, that's $5 million. It's a little bit less than $5 million worth of real estate owned. And you could do it one at a time because you own the land, you just have to get creative with it. Right. And the manufactured home, you're not managing contractors, you're not managing like you've got one contractor that installs it and you're ordering one. And so if you ordered one a year and said, this is what I'm going to do or, or I'm going to get a partner involved in it and I'm going to split equities or whatever the case may be, it's thinking outside the box. And that's what I had to do, was get out of my own way and go, I need to break the myth that there's no way I can do this because I don't have money and have the mindset of I can absolutely do this if I can find partners to do it with and how am I going to create it? Right. So here's what happens. I challenge everybody. Now I'm going to challenge you on this call. Do you think that, you know five people that have more than $100,000 in liquidity, you know, any wealthy people, they're not going to be super wealthy.

Yes.

Do you think if you came to them with a proposal of, hey, this is what I'm doing, here's my plan, I'm going to put these homes on. Would you loan me short term money for probably a year less to buy this manufactured home, get it placed and then refinance it and I'll pay you 8% interest on your money and it's going to be secured by real estate. Would you be willing to do that? If you could get five people to do that tomorrow, you could order five manufactured homes tomorrow and start the process. And then, you know, their, their money is kind of like bridge financing. So it's a Little bit expensive up front, but it allows you to start moving the process faster. And then once they're rented and they're creating cash flow, then you can go refinance it. You could potentially do commercial. Now this one's a little bit more complicated because we're not doing single lots unless you wanted to. If you looked at the long term future and said, hey, I could do this one of two ways. I could have 50 lots that are little, little 4,000 square foot lots and I'm going to do this over time, which means I can sell these individually or which it also makes it easier to finance because you're not into commercial financing. You're financing one at a time. So every time you place one and get it rented, you can turn around and go to a regular bank or do a debt service ratio coverage loan where they're like, oh, it cash flows, it's worth X amount. We will loan you the money with almost nothing down because you're technically refinancing it. And you could do that over and over again and, and figure out how to cut that up.

Well, let me ask you this. What. Because I have an opportunity presented to me. I have a past client whose wife passed away about a year and a half after I sold them multiple properties in East Texas. And his dad passed away a couple months ago. So he's, he had already moved last year. So he's wanting me to. He just doesn't want any more property in East Texas. One of those properties is there again, a 36 acre track that he bought three years ago. And it's in a better location for this and it has highway frontage and county road frontage on, you know, so two sides are road front. And I was thinking, well, if I can get him to sell it because he doesn't want to go through the process. Like he's already said somebody wants to buy it. And I told him I would owner finance it. Wendy, I don't want to go through this. I said, well, don't do that just yet. Let you and I talk. This was last week. And so I thought about on one end of it can be storage buildings and on this over here can be, you know, this and this over here. And so that 36 acre track could make a crap ton of money. But then I've got to buy the land, you know.

Okay, and so how much is how much? What's the value of the land?

I've been running comps on it. It's probably running about 14, probably 12, 14,000 an acre. Okay, so hold on just a second. I haven't fully put him a CMA together because he keeps changing us.

It's about 400,000 between 4 and 450 for the 36 acres.

Okay, but remember, I know what he paid for it and he doesn't really, I mean he wants to make money on everything because he's a businessman obviously and he bought property and sold property. But he would probably like work with me on this and owner finance it and he would probably actually do it in sections for me. Like I got by a section of it at a time and I don't know if that would be beneficial or not. I'm trying to come up with a proposal to go to him with because he bought this property to put George Bill. Got it.

Okay, so let's cut this one up for a second because this is, this is where as a real estate agent being prepared for opportunity and going oh yay. This is a listing. And I'm looking at it going, this is opportunity. I'm not going to make any money right now but I'm going to build the shit out of my wealth. Right? And there's opportunity here, there's opportunity for creative financing, there's opportunity for partnership. There's opportunity all over the place with it. Right? And you sold him the land. It doesn't matter what he paid for it. But what does matter is, hey Mr. Seller, here's the two questions. Do you want to sell this outright? Because you're going to have to pay capital gains tax on it. So what did he pay for it?

85.

Okay, so let's say he's going to make 200 grand. Okay. This is where it's really important to understand taxes and money, right? Because if we understand this that we can guide our clients better when it comes to these sales because right now he's owned it, it's been investment property. He has one of two choices. He can sell it for cash, which he's going to pay a 20% long term cap gains tax on it, right? So if he makes 200 grand he's going to pay $40,000 in taxes. He could 1031 exchange it. But it sounds like he's kind of out, he just wants to liquidate. Right. He can also turn the money into a bank or the land into a bank. What I mean by that is like let's say it's worth 450. You're like hey you know what, give you 450 for it minus cost of sale, which is, this is what it Would cost you to sell the land. So let's say it's 25 grand. And so I'll give you $400,000 for it. And I'm going to show you how to create income because you're going to sell or finance it at 6%. And so now you're like, okay, I just paid $400,000. At 6% interest only is about $2,000 a month in payment for you, but it's income for him. And when somebody. So listen up. When somebody finances 100% or 90% of the investment, they're not subject to pay any of their capital gains tax until they collect more than 20% of the principal. You just had an aha moment. I saw it.

No, I didn't know that.

Yeah. So he technically could kick his tax liability down the road for a decade if he wanted to. So you could collect, he could collect interest only payments on that, which means every year he's making 24 grand in interest, which is passive income. It's taxed differently than ordinary income. And he's not paying capital gains tax until he collects, until basically it's paid off or somebody reduces the principal by 20%. So if he just wants to get rid of it and collect income, he's basically turning that land into a bank. And you know, if, if somebody fails on it, he gets the land back. But if you have plans for it and you can do seller financing now you've secured something, say. So that's, that's phase one. Phase two is, okay, what is the possibility with this land, which, this is where it costs you a little bit of money, is there are people out there that will look at it and go, this is the highest and best use for this 36 acre parcel. We can chop off the highway frontage and make it this. We can go into the back, back part of the lot and do this with it. This is the highest and best use of this land. I mean, with 36 acres on highway frontage. Yeah. You could build a storage facility and then go through. And you don't have to build the storage facility. There's all kinds of people out there that will partner with you to build the storage facility and create passive income from that standpoint. Right. Doesn't cost you anything. I have the deal, I have the land. I want to partner with you to create this. Then you look at, you know, can I create, Is there enough supply or is there enough demand for rental properties to create my own manufactured home park?

Right.

What is it going to look like? What does it need. Do I want to do a manufactured home park, or do I want to cut this up and make it a miniature subdivision that's all single wides or double wides? Do I want to lease the land and let somebody bring their own stuff in? You see, like, how many options there are available of this?

No. And the more you. The more you start. And by the way, I love that book, the one you recommended. I. I keep rewinding and going back and look, listening to it again, different chapters of Road Less Stupid.

Oh, the Road Less Stupid. Yeah. It is one of my favorite.

Oh, my gosh, I gotta go back and listen to that chapter again. Yeah, I practiced my first thinking time this morning. Or tried to.

Well, good, good.

But no, the more you think creatively and the more you really sit and pay attention to it, more stuff keeps coming, and it's like a. Opens a spider web. You called it a. Would you call it a rabbit trail.

Or would you call it rabbit hole? Rabbit hole. Let's go down the rabbit hole.

Rabbit hole, spider web, or whatever you want to call it. It's just one thing triggers another idea, which. So there's. You're right. I mean, I could really go into this with somebody partnering on this part of the parcel for buildings and this part of the parcel for this. And then y. I'm making a $2,000 a month payment.

Right?

Who cares?

When you. When you look at the long term, this is. This is where it's fun. So I love the conversation because I think what you're seeing is that the more I look at things that I don't see, the more it triggers other things. Right. So the more I practice being an investor, even if it doesn't come to fruition, the more it triggers me for something else. And it's like, it's crazy when I tell people, like, if your mindset is about being prepared for opportunity, you might be showing homes to a client, and a home will trigger something on the investment side, you might be doing comps for a client and go, oh, what is that? Like, there's an opportunity there. You're not just looking at comps anymore. You're always looking at the mindset of, like, there's opportunity everywhere. I remember actually Keisha and Cena, which I was talking about earlier, I showed the house down the street to a client that morning as an owner occupant. And as I did the comps, there's a model match that wasn't renovated down the street. The house I showed was 700,000 and it had multiple offers at the time. The house down the street was a model match at 400,000. So I called my assistant. I'm like, write an offer on this $400,000 house. We're buying it because there's freaking opportunity here. Let's go. Right?

Yeah.

So in that day, I never sold the other client to $700,000 house. We made an offer on it. But we did buy that $400,000 house, and it was a great investment and opportunity, and I ended up selling it to a different investor. But that's what happens when you start seeing, like, God, there's opportunity everywhere. If I would just learn to look at it differently.

And it's all about a mind shift, a mindset shift and paying attention, that's all. That same client has a lake house that he wants me to list, too. And it's a one and a half acre lot on a lake, a great house. And I'm like, I don't see a whole lot of opportunity there yet. But before we list it, I'm thinking on it.

Okay, so let's talk about that one. This is where we get into strategies, right? What does this client want to do? He's like, you know what? I don't want to own this stuff anymore. I'm not using it. It's costing me money, but I want to make money. So my first question to them always is, hey, if you sell this for cash, what are you doing with your money? Where are you going to put it? Is it going to the stock market? Is it going into money market account? What are you doing with your money? Because if they have a plan for.

I need to ask him that question. Because, see, like, he bought all these, but he bought three properties with me in a month and a half, I think. And it's because he sold a business, okay, in Midlothian, or that's where he lives is Midlothian. And he needed to put his money somewhere. So my. My whole thought is, well, where are you going to move this money? And I don't know why I hadn't asked him. Right, so not ask that question, Steve, because.

Because we're not trained to ask that question. Because we're not financial advisors. And typically, as a real estate agent, we don't give a shit. We're like, okay, it's a listing. I want to know what's next. Because. And I think we should all want to know what's next, because this is given me, and it's going to give you the opportunity to potentially raise capital. The One of the number one questions I asked is like, where do you get money? Like, how do you raise capital? I'm like, one relationship at a time by asking the question. When somebody owns something free and clear, what's next? And they're like, oh, I don't know, I'm probably just going to go stick it at a money market or something. If I can show you a way to create money out of this, are you willing to do it? Can I show you that? Well, yeah. Tell me more. This is where seller carries come from. This is where seller financing comes from. And if they do sell it and they don't want to sell or carry, let's just say the lake house they want to put on the market, they're like, no, we don't want to sell or finance. Cool. What are you doing with the money? Well, we're not really sure. Well, would you be willing to invest it with me? Because let's say I'm going to give you a great example. Let's say that owner doesn't own the 36 acre parcel, okay? And it's 450 grand. This owner wants to sell his lake house. So you're like, okay, I've got this opportunity over here, but I need money to pay for this. This guy's going to sell his lake house. He doesn't know what he's going to do with the money. And I'm like, hey, you know what? When you sell this, would you be willing to loan the money in a first position note and deed of trust at 7% interest? Because I have an opportunity to buy this 36 acre parcel that I have some ideas and some plans with. When we sell this, would you be willing to be my lender? Wait, you're gonna give me 7%? Well, yeah. Well, that's double what I can get in the market right now. And by the way, it's no risk in being in the stock market. You're not gonna wake up tomorrow. It's guaranteed mailbox money and it's secured by real estate. How great of an investment is that?

That's brilliant.

This is, this is what I do all day, is connect the dots. Like, hey, you want to go from here to here? Cool. Let me move that around. And then, you know, usually my CFO looks at me like I have 12.

Heads, but you're right, I'm sorry. Like, you get stuck. And I've only been doing real estate for six years and you get so stuck that this is the line. You don't cross this line like you Stay in this little box about the size of your phone and don't go outside of it and you'll be just fine.

It's a, it's a buy, sell world that, that's the world that, that traditionally people live in. I don't want to live in that world because it's, I mean, I do. It's no problem. I can do it. You know, we're still putting houses on the market and we're still doing traditional business, and I have the small team to do it. But people want, tend to. This is probably one of the best pieces of advice that I have for everybody is that I hear people go, well, I don't want to do traditional real estate anymore because I just want to be an investor. I'm like, hey, if you're not doing traditional real estate, you're foregoing all the opportunities that come to you because people invite you into their living room and that's where the conversations happen. That's where the creativity happens. And when your opportunity mindset, all of a sudden you're like, oh, well, hey, if we sell this over here, we can do this over here, or let me show you this. And then the sellers are like, nobody's ever said that before. You're like, yeah, because I'm not nobody, Right? And so you get to start leading them down the road. And what it does is it helps you start to build and expand what your services are to people. And now you're connecting the dots all the time, every time.

That's. This is awesomeness. Okay, let me think, because I know we're almost out of time. I know you learned a lot of this by being with your dad, in business with them. Like when it comes to doing these creative solutions and all this stuff, when you've got this and it's not traditional real estate, what's the best avenue to. To learn? I know experience is everything, and I'm all about getting in there and doing it, but I'd really rather have a resource to learn how to do some of it versus making the mistake and that I didn't have to make.

This is, this is the fun part. The stuff that I do and I've learned to do, the philosophy and the mechanics of it works anywhere in the country, probably, except for New York, because they're crazy up there. And I can say that because I bought a house in New York and I will never do it again. But here's the deal. If you came to me with these things and let's say the lake house, he wants to sell it. And we've had these conversations. Would you be willing? This is where I work with agents on the partnership side of, hey, no matter what happens with this deal, I'm gonna pay a referral fee for the coaching on it. So then I get involved and go, hey, here's the conversation. I'm gonna be on the phone with you with the seller, having the conversation so you can hear it, and I'm involved in the background and the mechanics of it. Then if we're talking about the seller, carry over here. Same thing, right? So what we do is we kind of work through, and you're like, hey, I've got a deal that I need to work through. Will you work through it with me? And here's the percentage you get on that deal. So it's kind of like paying for coaching when there is a deal. The only difference is that it's live coaching and it's scenario coaching. And it's not just theory, right? I can tell you all day long and sit on a zoom call the theories that I've used, But until you see it in action, it's hard to comprehend, because I did group coaching for a while, and it was great. But what I realized is that until they're knee deep into it, it's just kind of like, oh, God, what is happening here? Like, what did he just do? I can't follow. You follow better by learning. So it's being willing to give up a certain portion of potentially commission whatnot for that investment into how to do it, because eventually you're not going to need me, right? You might want me to be involved as a partnership or something of that nature, but that's how we can work together on that stuff. So if you're like, hey, this seller has this land and this lake house, I would like to do a call with the seller and yourself. And so the way you say that is like, hey, Mr. Seller and I have a partner who is a real estate strategist, and I would like to do a call with him, discuss all of our options before we execute on something. Are you cool with that? Then we get to ask the questions, we get to go through it, we do it on a zoom call, and everything unfolds right in front of you, and it's us working together. And it's really a beautiful thing at the end of the day because it's not making you look different. Because, yes, I'm a real estate agent, but I'm a strategist, right? So it's like, hey, I want to do something for you, Mr. Seller, because there's some great things here and I want to discuss the options. So do you mind doing a call with my partner? And then we're gonna go through it, we're gonna walk through it until he has an idea of, I think I want to sell this one. I want to sell or carry this one. And so you're not learning by the braille method and you're not maybe leading them down the wrong path, but we actually have that call together and then we find the solution, we solve the problem together, and everybody wins. At the end of the day.

I love that idea. I love that idea. He's a great guy too. He's a guy.

It sounds like it.

I've got commercial buildings of his listed right now. Do you? And I wonder.

Yeah. So, you know, this is a guy that potentially could be your bank if you have the right conversation with him.

Like what I did on the land. Because he won't be able to contain himself.

Right. And that's what's awesome about it. It's like those people that have been successful love to teach and share with other people. It's one of the reasons I love having these conversations because I'm like, God, I want you to do the thing. I want you to create that 10 or $20,000 a month in passive income. I want you to be that problem solver in the market. Right. And if you'll trust the guidance that I have and realize, like, hey, this is going to be an investment and I'm okay with it if I can get from point A to point B. And the crazier thing is what happens when we're willing to trust and let go is the bigger things that actually come from it. Right. I was tired. I just had a conversation this morning with, I'm involved in Chris Harder's mastermind, and I've been in it for seven years. The relationships and the things that have come from that investment and being willing to let go are beyond, beyond comprehendable of what the return on investment is like. You just can't even comprehend it, right? You're like, if you know how to do these things from this 30 or 45 minute call, what does it look like for the rest of your life in your career? Right?

Yeah.

Who else in your market is doing anything like the things that we're talking about? There might be a few people under the radar, but if you come out.

Of the gate, one guy does. It's always listing all this land. And I'm like, I think he's like going like, and knocking on doors or something. I'm like, what are you doing?

Could be.

And then he buys it and then he just list it. And I think he owned our finances. He's basically flipping land.

Yeah, yeah, he's basically. And there's, there's a whole nother, you know, concept of flipping land where if you have the right money, you can engineer like we talked about, the highest and best use for the land. There are guys out there that have bought land and had a six month inspection period and they have spent the money to engineer it and cut it up the minute it closes. They have already like flipped it for an extra half a million dollars because they spent the money up front. So there are all kinds of different things when it, when it comes down to this type of real estate. And it sounds like you have a great client to start with these strategies and go, hey, let's talk about all the different things you want to accomplish. Because here's the main thing. If we don't ask the question of our client, like what is your end goal? Is it income? Is it the cash out? Is it peace of mind? Then we can't really guide them other than just selling their house. And by the way, they don't always know what they want. And if we can help guide them to what they really want because we ask the questions, it changes everything. It changes the relationship, it changes the referrals, it changes your business by changing that mindset.

Absolutely, absolutely. I know we're out of time.

Really, you're totally good. You got, you got a couple more questions.

I do. I wanted to touch on the topic of whole whole life policies. Oh yeah, I wanted to touch on that. I do have properties paid for. I do have money set aside to invest with because I just kind of have had this mindset of like not debt free but little debt. I know some debt's good, but just to not be in this position, if something was to happen where I was like in debt, out the ears, but the whole life policies, like what referral of a company could you give me? Like what would be a referral basically like, or advice or something.

Okay.

Because I know very minimal about it.

Okay. I'm going to give you a couple of different things as to how I structure this and yes, I will give you the referral. Okay. This is going to be long winded. You're going to want some notes on this. The good news is it's recorded so you can go back to it. So here's the deal. I had a good friend of mine recommend this to me and I didn't quite understand the investment until I started realizing the long term benefit. You said you have a senior in high school, right?

He's a senior next year. He's a junior right now. Yes, he'll be a senior.

I'm going to give you the first part of this because you're a single mom and you have a son that's 17 or 18, whatever it is, and you have, you're an entrepreneur, real estate agent, you run your own business, okay? So we have whole life policies, not only ourselves, but we also have them on our kids. The reason being is that they're extremely cheap to insure right now in the whole life policy. It's also building an investment for themselves and it's a family asset. So the way ours is set up is that the kids life insurance is the beneficiary, is the family trust. Okay? And by the way, let me do the disclaimer thing. I'm not a CPA or a financial advisor or any of that other stuff. You want to research all this stuff. This is just what we have done. So the boys will forever have life insurance forever. I have a friend of mine that cannot get life insurance at age 27 because she had heart complications early on. And think about it, if her parents had insured her through this and just kept that investment going, realizing that it's a family asset, right? That's one piece. It's also something for my boys, which I've showed them. Hey, we have these life insurance policies. If you decide to start a business or you want to do something, you, you can borrow against it, okay? So you can pull money out of the insurance policy to start a business, you need to pay it back, okay? Because it's just an ongoing investment. Now Wendy and I have multiple life insurance buckets, and that's what I call them as buckets. So I'm going to give you the greatest example. Two years ago we had to write a six figure check to irs. And before I wrote that six figure check, I called my insurance guy and I'm like, explain how the whole life insurance policy works because I've just kind of gotten it and we did something called front loading a policy where we put six figures into this policy. It created a massive life insurance policy. And I could pull out somewhere around 90% of the money I just put in as a loan, like within 10 days of starting the policy. So we put the money in there, we pulled it back out, we sent the check to irs. Then the money that we save every month for taxes pays that loan back in that policy. So when it's paid back at the end of the year when taxes are due, we draw again, we pay irs. We put our money back in this tax savings account, which is a life insurance policy. And it continues to grow because it's also an after tax growth. So there's no tax inside that growth and there's a guaranteed minimum maximum growth inside that policy. And it works phenomenal. So what we've done is we've set up 10 buckets. This is where we keep all of our reserves. Because it's still liquid, I can go get that money, but it's not sitting in the bank and it's getting a guaranteed rate of return inside the policy. It also creates a substantial death benefit. So it serves as multiple vehicles for your investment and your opportunity. It also is a great vehicle for your children if you want something to where, hey, I not only want to insure them and give this to them, but I want to make sure that it's an investment vehicle for our family. And so. And you can start like all kinds of different things. Like I think the boys policy that we do right now I think created like a half a million dollar insurance policy and I think we pay $400 a month for it, but it's also growing and they can borrow against it. So I'm a huge fan of this and it's Devolve Financial is who we utilize for this and they're very, very knowledgeable in this and I will connect you with them. This will also be in the show notes as well. But I'll do a personal connection with jp, my financial advisor on this stuff. But we have loved the policy so we actually took. So this might be a strategy for you, maybe a little different with where interest rates are right now. And I understand that you don't like debt, but I'm going to challenge you on this. Let's talk about the properties you own free and clear. How many do you own and what are they worth?

Probably close. Probably close to a million.

Well that's phenomenal for a single mom. If you guys didn't hear that Wendy's a single mom, she owns a million dollars worth of properties free and clear. Like hats off to you. That's amazing. You've done really well. So now while some of that creates cash flow and passive. Are you growing as fast as you want to by having all that free and clear?

No. Nor am I doing it by having money sitting in A money market account, like that's dumb.

No, but the money market account, I mean, you can shift over to a whole life insurance policy and still have it liquid. You also have the ability, let's just say. Let's say that million dollars free and clear real estate. You could lend on it, or you could get loans on it. Let's say of a half a million dollars, 50% loan to value, okay? And it's at 6 or 7% right now. It's going to cut your cash flow in half. But could you go and expand your portfolio by having that half a million dollars? Does it prepare you for opportunity? Because right now, if I asked you, hey, if you had a deal in your market right now that you could buy for 50 cents on the dollar, it's a $200,000 house that you can buy for $100,000. Can you buy that right now?

Me? Yes.

Well, don't be so modest about it.

Well, you wanted me to be honest. I mean, I could.

Wendy is the above average on this podcast, without a doubt, so she's done very, very well. I should be asking her questions how she got there. But let me ask you a question, Wendy. If you think about, like, hey, I've got a million dollars with a free and clear property, and I have enough. I have $100,000. I could buy something right now. What if you had put all that capital to work over the last couple of years? What if you had bought. What if you leveraged those. That money and you had bought 10 homes and you were leveraged to the hilt in 2018 before COVID What would it look like right now?

I kicked myself in the tail.

Okay.

Okay. But I hate my. My decision. No, no. I have to love where I was. Because you don't know what you don't know.

No regrets. Yep. No Reg Regrets.

You don't know what you don't know.

But you don't know what you don't know. Right? So now we look at this and go, hey, I love it that I have these things free and clear, but this is slowing my growth down. How do I do it safely without a ton of risk? But how do I start to grow? Well, you grow by leverage, right? And you're leveraging things that somebody else is still paying for. It's kind of like the. It's kind of like your son, right? Is he going to college?

Yes.

Okay, so he's going. He's going to college. So if you were a single mom and you're like, oh, you know what? I'm Putting money away in College for a 529B plan. If you had taken the same amount of money in a 529B plan over a 20 year period of time and bought a house when he was 1, and where would it be at now? And you could refinance and pull the equity out and pay cash for college while the tenant is still paying for his college. That's what that looks like. Like, that's the power of it. Everything that you're talking about has nothing to do with kicking yourself. It has to do with an adjustment and mindset that I want to grow, I want to be here and I want to get here. And this is how we're going to do it. And a lot of times it happens with leverage. Now, some people are not a fan of it. If you look at the big gurus, right, if you go down the Dave Ramsey rabbit hole, it's, you know, you don't want to leverage anything. You want to own everything free and clear. And I go, that's great. But if I needed to own everything free and clear, I might own three properties, but instead I own 80, right? And I get the tax, I get the tax benefits of owning 80 properties. I get the depreciation. And by the way, I have 80 people paying off my retirement right now. That's, and I have 80 people that are living in a great house. They're not in jeopardy of being forced to move and they're rental properties, right? So it's solving multiple, multiple solutions or multiple problems for people. And that's where we want to get. And so Wendy, you are, you're so structured. We're going to have to go a little bit deeper on some other things. But I love this call and I think that this, you know, this show is very encouraging for people to know all the things that are possible. And so if you're out there and you're like, Wendy, you're like, I just don't know, like, what should I be doing? And by the way, Wendy, like, we connected through real brokerage and that mastermind call, but if we hadn't, by the way, congratulations because you took an hour out of your day to jump on a zoom call and listen to me talk to myself, you know, for an hour. Where do you go for this type of advice? Where do you go for this strategy?

I, I don't know. I, I, I looked into some coaching on this. I don't know, it just seems like a rabbit hole there, you know, this particular coaching group and I honestly feel like it was just a great timing thing for me to see you. There's so much wealth and knowledge and I thank you so much for doing this. When he said, when you said on that Mastermind, oh, yeah, we can definitely connect. Just sign up on this calendar link and we'll just do it live. I was like, okay, yes, I am not that out there in front of people. But I was on there before the end of the Mastermind and signed up for the first time available because I.

Want to know, here's the awesome thing, you were the only one to do it. And by the way. Yes, you're the only one to do it. By the way, I charge $2,500 an hour for strategy sessions and this is the way I give it back to you free.

This is amazing.

And so that's of course. But here's the cool thing. You asked these questions, your personal, raw and real. And here's the awesome thing, the amount of people you have helped open their eyes by asking these questions and realize like, oh, there's more to this. So I'm grateful that you were willing to jump on and share the journey and ask the questions. And offline, we're going to do some more stuff too. I've got some other things I want to get to you. There's going to be some other things in show notes. So thank you so much for jumping on this. We definitely are going to keep connected and keep moving, you know, on some strategies with some stuff. So thank you for being here. Is there, is there any last questions that you want to ask?

No. Other than do you have just like in talking with me in this hour or whatever, how long it's been if you had another book recommendation for me, like a book that comes to mind after this conversation for me to pick up and read, what would it be?

Oh, I love Ed Mylett's book called the Power of One More. That is one book that I've read, my kids are reading and it's about doing one more. So one more phone call, one more appointment. It's just, it kind of goes into like when you think about the gym routine, if you did one more rep on your biceps every time you worked out 365 days a year, it'd be an extra 365 reps. Do you think that would make a difference? Right. It also goes back to that 1% better every day. If you're getting 1% better every day, how does it improve what it is? So that, that is one of my great recommendations as well.

Perfect.

So if I asked you a question, now my turn to ask one. Will you share, comment, like, and give me some raving reviews on Instagram? I would appreciate that. And same thing in real brokerage. Two, do you want to be part of my community?

I would love to be part of your community.

So it's new and we're starting it up and I'm really excited about it because of the value that we're going to give. So it's a huge investment of $99 a month and we've got free group calls. My wife is going to join us. She's the general contractor. She's going to be doing some stuff and we're going to add all kinds of value. So are you in?

I'm in.

Okay. Awesome.

Thank you so much. This is awesome.

Absolutely. Absolutely. Well, we've got. We're not done yet. Like, this was just the start. So we got more stuff to do and it's going to be fantastic. And I will connect you with email on offline with a few referrals. And if you want to do a strategy call with that seller, let's make it happen.

Perfect. Thank you, sir.

Thanks, Wendy. That was an amazing episode with Wendy Stack in Texas. I hope that you guys got as much value out of that as I did and that Wendy did. Wendy and I are going to connect offline, but I do want to invite you to my community, the Limitless Circle. It is a great community where I'm adding value and serving you guys at a very high level for a very low investment. And I want you to join that. Keep following me here. If you love this episode, we'd love for you to, like, subscribe. Whatever it is in there, give me some love, please, and share it. Share it on your Instagram stories. Make sure you tag me Eve D. Valentine on Instagram. I would love your support on that. And hey, I also want to let you know that come June 13th, my book Limitless Real Estate Strategies is launching and being released. And I hope that you will read it and check it out. It is a deep dive into all the things that we have have done over the years. The crazy stories from cows falling into the pool, how we got started, where we got started, and how we changed our outlook on real estate. So I am loving what we're doing. Thank you for being here and I'm looking forward to connecting with you soon.