The IDEAL Investor Show: The Path to Early Retirement

Episode 67: How to Balance 9 to 5 Life and Real Estate Secrets from Dustin Heiner

February 01, 2023 Axel Meierhoefer Season 1 Episode 64
Episode 67: How to Balance 9 to 5 Life and Real Estate Secrets from Dustin Heiner
The IDEAL Investor Show: The Path to Early Retirement
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The IDEAL Investor Show: The Path to Early Retirement
Episode 67: How to Balance 9 to 5 Life and Real Estate Secrets from Dustin Heiner
Feb 01, 2023 Season 1 Episode 64
Axel Meierhoefer

More on YouTube? Check the video version on Youtube

Who is the Guests?

Dustin Heiner is the founder of Master Passive Income, Real Estate Wealth Builders Conference (REWBCON), and Successfully Unemployed.

He is a real estate investor who was able to make enough passive income from his business to quit his job when he was 37 years old.

With his podcast, Youtube channel, books, courses, and coaching, he now helps other people quit their job by investing in real estate rental properties to live their dream life.


Visit Him at: 

Youtube https://www.youtube.com/c/masterpassiveincome

Instagram https://www.instagram.com/thedustinheiner/

Facebook https://www.facebook.com/dustinheiner


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Show Notes Transcript

More on YouTube? Check the video version on Youtube

Who is the Guests?

Dustin Heiner is the founder of Master Passive Income, Real Estate Wealth Builders Conference (REWBCON), and Successfully Unemployed.

He is a real estate investor who was able to make enough passive income from his business to quit his job when he was 37 years old.

With his podcast, Youtube channel, books, courses, and coaching, he now helps other people quit their job by investing in real estate rental properties to live their dream life.


Visit Him at: 

Youtube https://www.youtube.com/c/masterpassiveincome

Instagram https://www.instagram.com/thedustinheiner/

Facebook https://www.facebook.com/dustinheiner


Start taking action right NOW!

Connect with us through social! We’d love to build a community of like-minded people like YOU!

Support the Show.

Axel Meierhoefer:

Hey guys, welcome to another episode of The IDEAL Investor Show today we have a great guest. And by the way, if you're not subscribed already, please subscribe to the channel so that you can help us out the algorithm find other clients and other people that are interested in it. But our guest today is Dustin Heiner. And he is very well aligned with what we are doing. He has basically developed a portfolio of real estate so that he can basically tell other people how you can unemploy yourself, and we will have a great conversation where we touch on how can you get into this if you feel that you don't want to work forever, you don't want to do the same thing forever and you want to unemployed yourself. Then let's have a listen into our podcast today. Hello, everybody, here we are again. Happy New Year 2023. And we have a great guest. We have known each other for quite a while Dustin Heiner is with us today. And he is the inventor, so to speak, at least the living example of successfully unemployed people and Dustin Welcome to the show.

Dustin Heiner:

Hey, Axel, thank you so much for having me on. Yeah, I love being successfully employed in the practice. The real estate investing that got me to be able to not work for somebody else will still be able to provide for my family. And now everyday, you know, I go to the gym, hang up my family, come on podcast and talk to great people like you. So thank you so much for having me on.

Axel Meierhoefer:

Yeah, and obviously it works better since you have two monitors in your background. So, you know, go make the claim that people that can afford two TVs, they must be successful. Tell us a little bit. How did you actually get into this? What's the story about becoming successfully unemployed?

Dustin Heiner:

Yeah, totally. So I'll go to the beginning. But I'll go right back to the or go to the end. But I'll go right back to the beginning. So when I was 37 years old, I was blessed to be able to quit my job, you know, I had enough properties, enough rental properties, making the money so that I didn't have to work a job. So 37 years old, quit my job, never need a job again. But from the very beginning, I was following the same path that everybody had been following. We're all taught this, that we go to school, get good grades, and then you take those good grades, you go to college or university, you get in 1000s and 1000s of dollars into debt, you get a degree and then you go to other businesses and try to get a career there and hopefully, get a career worked 40 plus years your life and eventually retire you're 6570 or older, and hopefully to live on what you manage to save that entire time. And so I was following that exact same path. But I've always been entrepreneur oh two, I loved the idea of having a business. In fact, when I was 13 years old, I had a newspaper out most people don't know what a newspaper is anymore. But you're right on a bike at 5am and throw a newspaper at 5am bringing them on garage doors, waking people up. And I even had a graphic and website design company. I had a skateboard manufacturing business. I even had a pizzeria and a convenience store all from the ground up just built all these companies, but at the same time working that nine to five job. So all these businesses were okay, they weren't making me enough money, but I bought one rental property. And that one rental property made me I remember that first paycheck or a paycheck that was above my expenses. So this is all my profit $317. And I was like, oh my goodness, at one month, I made three to $70. I didn't do any work because I had other people doing the work. I need to be an investor, I need to do this full time. But you know what happens? So life started getting in the way. So I was working at the local county government in California, the most stable, secure, risk free job ever. California is not going away. The government in California is definitely not going away. And technology is not going away. So I got the most stable job possible. And my wife and I started having kids, one kid after another eventually we had our fourth child and this is what really shoved me or catapulted me into being a real estate investor. So after my wife had her fourth child, I went off paternity leave. That's where it mom stays home or sorry, the dad stays home with the mommy changes poopy diapers and bonds with the baby and all that good stuff. And it was about two weeks and then I go back to work. And in that week I go back to work. I have a regular sit down desk job. In that week. I go back to work on a Friday at 330. In the afternoon, I get a call from my boss's boss's boss's Secretary like the top dog and she says Dustin, would you please come to the office? And I said, Sure. And I hung up the phone I paused for a second I thought why in the world are they call me in the office like this isn't normal. And I've seen plenty of movies Friday at 330 in the afternoon is not a good time to get a phone call. So as I'm sitting there, I started thinking back a couple months before I went on maternity leave. There were some rumors surrounding going on that there could potentially be layoffs in the county. And I immediately shrugged that off. I said there's no way I've got so much in your 1314 year seniority here on my bus ticket to a great job. So I shake it off. I get up and then I walked to my boss's office and as I'm walking to his office, I'm walking down this hallway. It's not a very long hallway. In fact, it's kind of short, but every single step that I take Take, it feels like my feet become lead bricks, and it feels like the hallway gets longer and longer and longer, because the weight of potentially losing my job is just starting to rain down on me. Well, I get through the hallway and I turn the corner, I see my boss's door, his doors closed. And I see a secretary there, his secretary, super sweet, nice old lady. And she says, Dustin, would you please have a seat? So she's also trying to console me with her eyes and try to sheepishly grin at me because she knows everything about what's going on. I know nothing about what's going on. So I go, and I take my seat and I sit down. And I think about my life, everything that I've been taught, if I lose my job right now, I get laid off. Did I just waste my life following this plan? And then I realized, Oh, my goodness, we just had our fourth child. If I can't make money to feed my family, does that make me a failure as a father? Does that make me a failure as a husband as a man trying to provide for his family? Well, as I'm sitting in my hands get all clammy like boy gets all sweaty because the nerves is just crushing me. While the door of my boss's office opens up, an owl walks a co worker of mine, a lady, coworker, super nice lady, and she walks away with a piece of paper on her hands, she is noticeably distraught, noticeably upset, she's not necessarily crying, but you could tell her world has been rocked. So she passes by me and my boss says Dustin, would you please come in the office. So I get up and I go into his office, and I get laid off. And remember, this is the government, nobody gets fired or laid off from the government. But I did. And there is a reason why I tell the story because I want you to learn from this. So I take that layoff notice. And I go back and I sit down at my desk, and I realize two things. Number one, I need to get another job I need to be able to provide for my family. So I was really blessed crazily to find another job in the same county, a different department wasn't having the same issue. So check, got that taken care of the second thing sitting there in my desk, after just been laid off, I realized that I need to make sure that this never ever happens to me. Again. I didn't make sure that nobody has the ability to take away my ability to feed my family. So right then in there, I realized that every time anybody would ask me the question, Dustin, what do you do? Everybody gets that question. I would reply, that, Oh, I work for the county and I do technology. Well, I'm basically replying that my value in myself, I'm projecting it out that comes from my job, my value doesn't come from my job, my value comes from my God and from myself from my family. So right then and there. I said no longer Well, I would reply that way. I will now tell everybody, I am an investor. Now it may so happen that 100% of my money comes from my job. And that's now my part time job. I'm a full time investor. So quickly fast, where the story started buying property after property after property, each one making me$250 or more in passive income. Eventually, I have 30 plus properties, like why in the world am I still working here? Even though I'm making $75,000 a year US for my job, I'm losing money. So last part of the story. I went to my new boss, great boss, and I said, Hey, boss, here's your two weeks notice. And you know, we laughed a little bit and, and he says, Dustin, what are you going to do, and I don't have to do anything. I own real estate. It works for me without me even working. So the last part of the story, I walk to my car, it was a mile and a half walk, I'm frugal. So I didn't pay for parking. I've taken this walk 1000 times. And if you remember that short hallway, they got longer and longer, longer, and my feet became like lead bricks. This walk was the best walk in my life. I felt like I was walking on clouds, because I knew I would never ever need a job again. And the reason why was because the real estate investing in everybody, you need to hear this, that you will never be paid what you are worth, you're worth so much more than anybody could ever pay you necessarily, you know, your bosses paying you just enough to keep you working without quitting, but not so much money that takes money out of their pocket. If they did that they would go out of business. So what you need to do is figure out a way to I suggest invest in real estate, build businesses, do something outside of this normal being a cog in a machine, keep moving forward, just being employee, start creating passive income and make money while you sleep. So I'll pause this right, because you've probably got plenty of questions.

Axel Meierhoefer:

Yeah, absolutely. For one, I want to thank you for describing that and being so open about your own history and what you went through and how you came out in a good way. On the other end, couple of things that I think may be interesting and important to touch on with the audience. Number one, I want to reiterate this point that you just made about people being just paid enough to stay but not really enough for their world. I think that is part of why we have seen recently in the last few years that a lot of people said when I really sit down and be quiet, maybe because the government lock me into my apartment or something like that. And think about how much am I actually providing in value to the organization I'm working for versus what I'm actually receiving back then. So many people actually came to the conclusion at least get a sidekick or gig or some little more brave so it's I would say said well, I You know what I'm doing, I can do this for my own money, you know, for my boss and make the profit mindset, right. And the sidekick can initially be the real estate. So I would say it was probably for you and then transition more and more. One thing that I believe because of where we are in kind of like the cycles, I think it will be interesting to put a little bit of a timeline and you said, Okay, you were in this first situation when you walk that short hallway that felt so much longer than it is, what are we talking about? When was that? How long ago.

Dustin Heiner:

So when I first started that thing was in 2006, I bought my first rental property in 2006. So before the crash in the United States had a big crash in 2008. And so I started investing then. And the time that I life got in the way, like I said, and I had other businesses. So I think I got laid off. And it was either 2009 or 2010, like one of those two, like it was right when everything was going bad people were getting laid off all over the place. And so I was one of them. But then from that point forward, getting that next job, I realized I need to fast track and like I need to figure out a way to scale this investing business faster by buying more properties faster. So you know, recycling money by refinancing and all that great stuff. But that was what I 2010. But it was all through from like 2009 10, all through 2000, maybe 16. I just bought as many properties.

Axel Meierhoefer:

And I think this is an important thing to put it in context, because I like for our show. And when we have a great guest, I'd like you to also reflect a little bit on how is the current environment shaping up. And I'm normally not necessarily a big believer or follower of what the media is trying to let us believe. But there are certain people who I respect, and we have a long track record of investing and handling money and stuff like that. And when pretty much everybody in different areas that bond investors, the stock investors, the bankers, everybody is basically seeing we are entering or may already be in a time. And I don't want to put it economically, I want to put it into your story at a time where what you described with your feeling more and more like they have let breaks and you're basically getting sweaty about what's going to happen. There are just too many people in my view, that have credibility, saying, it may not have happened yet. But it's most likely going to happen at some point in 2023. More and more until we come out hopefully similar to you. And sun shining again, I think is what Elon has said after the recession is over at some point, nobody knows exactly when that will be. But this little scene that you so beautifully described about being asked into an office to be toys that you are one of the fill in the blanks, number of people who are being let go, is most likely going to happen to quite a few people. And it is not necessarily nice news or anything like that. But I think both our messages, I hope, at least you agree is yes, on the one hand that it sucks like hell. On the other hand, it also potentially creates an opportunity to repeat the story that you just told us, yes, you want to find something. And it's kind of with the mindset of intermittent employment to really become independent, or as we call it, and it Wesco working towards your time freedom point, like you have just reach the point to have the freedom to decide do I want to keep working in this county job? Or do I want to do my own thing? Right? So what's your take on where we are in the cycle? And what's coming? Because I mean, we're still in that kind of like resolution of the year, so to speak, kind of wondering what your thoughts are.

Dustin Heiner:

So yeah, 100%, right, let me speak to the opportunity of like being laid off and have this problem. And then I'll definitely talk about the economic cycle, what I'm seeing now in my real estate investing and all my students that I coach, so 100%, right, that when there's, let's say something tragic, like losing your job. And that's pretty tragic, when you have the possibility of not being able to feed your family that's rough, that's horrible. But at the same time, I love the quote, that necessity is the mother of invention. As well as like this is this was a fantastic opportunity for me to wake myself up and realize, stop living this comfortable life. Because I realized after getting laid off, that it was more risky to work for somebody else putting my life and my family and my children, we have four children, all of our lives in somebody else's hands so that I can feed my family because they say I can because I still have a job instead of doing that. Now I put it in my own hands where I'm actually independent, where everything I have created and all my businesses that I literally have for businesses that make me money now including the real estate investing and other ones that just keep making me money because now my value instead of going into somebody else is now all about what I do for myself and it just keeps compounding on that so if anybody has this come in your life, try to use this as a I wouldn't say necessarily a wake up call, but something to really alert you that it is time to make it change. And so I'm telling that story so that you don't have to go through what I went through that you're prepared. So with that the economic uncertainty of right now, so I could definitely speak of how or what I'm seeing and what my students are seeing in the in the United States. So right now, we are still buying really great rental properties. Now, we buy properties that make us $250 or more in passive income. That's what we shoot for. And I did this in 2006. Because I wanted to quit my job, I wanted to have passive income. But I didn't realize in 2008, when the crash happened, everybody was telling me before investor appreciation, invest for appreciation, but like, I can't spend depreciation to feed my family. So I need passive income. That's why I only went for passive income. And then I thought, I can give these properties to my kids. This is generational wealth. So I was just focusing on passive income, which worked out to my benefit people that are going for appreciation, getting over leveraged, all that sort of stuff, they went bankrupt, I literally made more money, because when people didn't have money to pay for their mortgage, that is when they became renters, because sadly, they have to lose their homes. So my rents went up. But with that I'm creating generational wealth. So no matter if the market goes up, or if the market goes down, or sideways, I'm still making money from every single month from every property. Now, what I'm seeing right now, I am seeing the very same thing, as in 2006, seven and eight. It feels to me like right now I could talk about like the dynamics of why I see this, but I'll tell you a big broad overview, it seems like right now is like 2008, beginning of 2008, where, right before the crash happened, there was so many things turmoil and stuff, in fact, in 2007 2006 207, into 2008, before the crash into it in the United States, what happened, people were saying, You better buy real estate now, or you'll never be able to buy it ever again, because it'll be too priced out. So that was what they were saying in 2020. And 2021, they were saying the exact same thing. When you have people have no clue about real estate investing, trying to tell you to Oh, you better invite now. That's the worst time to buy. I like buying when everybody's selling I like selling when everybody's buying. So what I'm seeing right now is 2023. And on for the next foreseeable future is going to be one of the best ever times to invest in real estate, just like 2008, it might even be better than that everything from interest rates going up. I mean, with interest rates going up, prices must come down because people can't afford that house, let's say just give you an $1,800 mortgage in America, that would be either rent or mortgage, you could buy a $450,000 house at 3% interest rate. But now it's 7% that only goes maybe $225,000 house, so they're priced out of the market. That's number one, interest rates going up helps us as investors, I'm excited. Number two inflation, it has not really sunk in to the American people. So I'm obviously I'm speaking for how I see in America, but it hasn't really sunk in to the American people. How much everything is costing now in America, we can't even buy eggs. It's so expensive. Now, it is everything's getting worse. Now people are realizing they're actually having to spend their savings in order to live. So that hasn't caught up with that. On top of that, in the regular economic cycles in the world. Every seven to eight years. There's an uptick or like it like a climb and then a small recession, then a climb and a small recession. It's just a cycle. We haven't had a recession since 2008. What is that, that's 15 years now, that is double the amount of time that it normally happens. It just seems like that's going to lead to a crash. On top of that I say crash I a correction for sure. Price is going to come down. But if there's gonna be a crash, I'm excited. On top of that the Federal Reserve has been printing money devaluing the United States dollar so much for years, billions and trillions of dollars being printed up. So all this is coming to a head in my opinion, to where it's going to be a fantastic time for us as investors if we're ready. So here's the big the final takeaway that I would say everybody needs to think of, if you go surfing in an analogy, you're gonna go surfing, you know, you get a board and you try to catch a wave. Well, you do not paddle after the wave passes you to try to catch the wave, you would not catch the wave and ride it in. No you paddle before the wave gets to you. So you can catch the wave and ride it all the way. And same thing with real estate investing. If you don't know how to invest, talk to Axel, he's going to help you. If you haven't even built your business. If you don't have your first property if you don't know where you're gonna invest, how you're gonna invest, you're not even paddling yet. Then when the wave comes, you're like, oh, man, this is the best time you're not even ready. It's going to take that much more time you're paddling after the fact. So my suggestion, it's going to be fantastic time to invest it's going to hurt a lot of people sadly, but if we're ready if we're paddling now start working with Axel started listen to you keep listeners podcast, you're going to absolutely do a fantastic job in your real estate investing.

Axel Meierhoefer:

Yeah, I totally agree with you. And actually I like to jump on that surfboard and continue that analogy for a moment because the part of the paddling is for those who are not yet in this situation and hopefully never get into that situation where they have to have this meeting that you mentioned and be told that they are fired If they haven't yet, paddling is also like I always say, In analogy to the richest man in Babylon, to put 10% of what comes in a site. And as soon as it accumulates was something enough to buy a property like you and I have been preaching so to speak, then do that with the head, your head, my head, to make that happen, and keep doing that. And if you're lucky, or if you're really good in what you're doing, and you're being retained in your company, you can keep doing this throughout this whole cycle. And so then you have basically gotten ready for a really big wave, which I agree is probably occurring. And the biggest wave, most people I believe, haven't even talked about is yes, you're right. And we can be excited about the increase in interest rates and making properties more affordable. But there will be I think the ultimate wave that you and I are kind of hoping to see and waiting to see is when the enormous printing that you alluded to, that the Federal Reserve has done. And the efforts to basically bring inflation back to anything reasonable, like two or 3% have taken hold in some way with these layoffs and other things that are most likely to happen. But in the process, one thing that I believe people totally disregard nobody, very few people, I wrote an article about it, but very few people say, Okay, we have $31 trillion in debt right now, by the time the really biggest wave is going to come, that will be probably something like $35 trillion in 18 months or 24 months. But because these extremely increased interest rates are five or 6%, they don't just make the affordability of the houses much, much less, they also mean the government cannot afford the debt any longer, which means the Fed will have to make a choice, either they're gonna say, Okay, we have to bring the rates down, so that the government is back to paying one or 2% interest rate on this huge, huge man, no debt, or we have to retire the dollar and come up with something as an alternative, which is not really very likely for reserve currency. But those are really the only two options, I believe, not really in my imagination that the dollar will be retired. So then the only other option is to bring the rates dramatically down again. And then we are in this kind of short window, I guess it's probably be away for a year, where prices haven't caught up, very few people are going to be in a position to really do much, but because interest rates are now suddenly down again, we can finance much much more affordably can refinance all the properties that we have acquired until then, and really have headed our ways to basically ready for the biggest wave ever. And then kinda like I guess what we both doing is, in a way retire after we wrote that wave to the beach. The one thing I wanted to say, and I know that you probably agree, even though you said it in a slightly different way there is there's one thing that I want our audience to be aware of that I've always been pointing out, Hey, where are you very, very much agree with you, Dustin, that we are both preaching forecasts of income, long term legacy, generational wealth, but I also want to make sure that people understand those who at least in the past have focused more on appreciation. And we have to admit that the last four or five years actually were reasonably good for people with appreciation, you said, you can't really spend that income, which is in a sense, true, but I believe we shouldn't disregard that you can get like an equity loan on that appreciation without having to sell your house and then add more properties. Even if interest rates are high. To take advantage of what you were just saying, I think what is important for the audience for us in mind to realize is you don't want to spend the appreciation outright, you can make that money, that equity that has grown on the properties that you bought for cash flow, or for appreciation, work for you even more. And if we phrase it that way, then it's a beautiful thing to have cash flow 250 300 $350 class appreciation, if possible. And now we are getting in a phase where that's probably not very likely. So we have to be a little content with 250 and $300 a month cash flow, but it might be coming back. And one last thing I want to ask you about because I think our audience is a little bit Okay, excellent. Dustin Gangu about this real estate stuff and great wave coming and taking advantage. One of the things that I hear is how are we going to actually maintain the cash flow when interest rates are so high? And I would like to hear your opinion about I think most people have not quite made the connection between not having really seen appropriate wage increases in relation to inflation of the last two years and currently and what that does to rent income. Can you say a little bit about that?

Dustin Heiner:

Yeah, totally. So I will also add to what you were saying about the home equity. I love of utilizing hook equity, but I'm not going to use that to buy a car, I'm not going to use that to feed my family, I'm going to do exactly what you said, we use it to make more money on it. So 100%, when I say, we're not going to use the equity in the property, I'm meaning we're not going to use it to feed our families, we're not going to use it to, like I said, buy a car, we want to make more money from that. And the biggest thing that I believe is we need to build a business that actually owns the real estate. And on top of that, we look at real estate as inventory. So what just like if we were to buy a candy bar, we're gonna buy a candy bar for 50 cents. And we know without a shadow of a doubt, we can sell it for $1 like that every single day, all day, every day, we can do that. Well, man, great. If we had 50 cents, we do it all the time. But what if you didn't have that 50 cents, it cost you 25 cents to borrow that money? Well, you'd still it'd be 75 cents for all in for that candy bar, and you could sell it for $1, you still make 25 cents, exact same thing, we just build a business that actually owns the inventory. And so when we build the business, when I say build a business by having everything in the business before you buy any properties, the experts on the ground because we invest all over the country. In fact, I have many people from out of the country out of the United States investing in America, I just show them how to do it, because it's really simple. It's just systematic, we just have to do it, building the business first. And then that business owns the inventory. Our property is not a business, our business owns properties, that property is our inventory that we put into our business. So what it looks like is we then have a business that buys inventory with our home equity line of credit, or, you know, however, we need the line of credit or do a cash out refinance, we can buy that next piece of inventory that we put into our business to make us more money in passive income. Now getting to your thought of okay, if there is some economic turbulence, turmoil brains have to go up or rents sorry, wages have not gone up, but you have high interest rates. So how we combat the high interest rates is a couple things. Well, number one, actually, you'll definitely understand this, I don't pay my taxes on my at my properties that I own as investments. I don't I don't pay my mortgage, I don't pay my insurance, I don't pay for my property manager, I pay for my my repairs, I don't pay any head stuff. Like I don't have to get a job to pay that. My tenants pay for all that because I built a business, that money comes into me and I pay out all the bills. But I don't have to get a job. Just like managing the property having a property manager manage it, I make sure that that expense for the property manager is in the business before I even buy the property. Now here's what it looks like getting all back to how do we make sure it continues to make passive income, we calculate all our expenses. And I'm going to pause that most people think the value of a property is the comparable sales because that's what Realtors tell us the comparable sales of the like properties in the same area, mile radius, two mile radius, whatever it might be. That's what they tell us. This is the value of the home. For us as investors, we disregard that we put that in our brain of what it could potentially be worth. But what we pay for it, it only is a business. I'm not going to buy a candy bar for $1.25. If I can sell it for $1 I'll lose money. There's no reason to even do that. So how do we combat the higher interest rates, lower wages and all that sort of stuff. Let's say we calculate all our expenses. Getting back to the original thought. We calculate our expenses, and then we figure out how much we could rent it for by asking our experts remember we build the business first. We have the experts on the ground like Realtors property managers telling us okay, here is how much you could rent the property for Zillow was telling Zillow is not expert. Zillow was saying we could rent it for 1400. But we know because we have a property right around the corner, it can only get $1,300. So if we would have ran from Zillow, you know, gone with Zillow, we'd be losing money. So we have extra information, say $1,300. Now, let's say your expenses are$1,400. Well, you wouldn't buy it because you'd be losing $100 every single month. What you would do, though, let's say you have the $1,300 a month in total rent that you could bring in, you know, you need to get that down. And my suggestion is $250 or more in passive income from every property, we lower our offer price. That's how we know how much we can pay for our property. We calculate all of our expenses, including mortgage vacancy factor and everything like capital expenses, all that sort of stuff, we calculate all these expenses and figure out how much we could rent it for. And then if we don't hit that to my suggestion to to $50 in passive income, then we lower the purchase price or the offer price. We keep lowering it until we get to that point where we get that passive income. We're not going to twist their arms to say you must sell it to us they can't wait we can't do that. But we will have an even my students right now even in the most seller's market ever. In the last one one or two years here in America. It was the most seller's market ever. But I still had students buying properties because we have no idea who which property which seller is like really needed to sell it or it's just hey, I'm getting a divorce. I hate this woman. Take this house. We have no clue. We're just putting on offer if we can help them with our price. We will buy it from Then if we can't, if we can't take care of them with the price that they want, then we move on to the next property. That's how we make sure we make passive income once we buy it right, and the expenses and the rents tell us how much we get by four. Does that all make sense?

Axel Meierhoefer:

Yeah, absolutely. And I can only attest to that because my I call them the tribe or our clients who call them students. And myself, we have kept buying properties throughout the last few years, even though prices for the properties according to the media and in reality have gone up. But it's all a balancing act like you were just saying, and when you know, I have a go number, you can basically do simple math and figure out what the relationships of the fingers need to be. What I want to add to that in the context of your analogy with you know, getting ready to ride the wave with our surfboard is I believe, if I look at the current economic situation, that for many years, employees and companies, regardless whether it's government, like you were or regular businesses gotten used to get somewhere between three and 5%, raises year over year, if everything else is fine, they did a reasonable job. And only basically at the end of 2021, did they start realizing okay, like you said, it gets more expensive to buy eggs to buy basic to buy in just general things. And now where we are at the beginning of 23, that has gotten much, much worse. Now your employer comes and said, okay, just you know, whatever the name of anybody in employment might be, we're giving you the same three, four or 5% Raise that you have gotten every year, because you did a good job again, that is just not going to cut it. Right. So I believe we all have realized by just going to the grocery store that even what the government says though, 789 percent inflation is not really true, it's much more like 15 or 17, or 20%. In some cases, I've got x is like more like 30% Actually, guess if you think about it for a while it was almost 100%. You know, so those kinds of things, airline tickets in all kinds of stuff got way more than the 789 percent, but what I'm getting at is, so people will ultimately say, if it's true, then I did a good job, I need to at least retain the buying value of what my income is doing or has been doing. So if inflation is 789 percent or 10%, even if I can convince my employer that it's more than what the government says my raise should be at least what the government says the increase was, and not the Oh 345. Because that also in my view, means the public is in a sense, being trained by the Federal Reserve, by the media by the government, that higher prices are here to stay, I don't know of anybody who has ever really lived to any significant period of time where stuff that one's gotten more expensive, is gotten really significantly cheaper. Okay, so for us as investors, so for anybody listening, yes, interest rates are higher. But what we can reasonably assume is that people will in the next few years just have to get higher wages, which brings the relationship of how much am I making, and how much of that do I actually put into rent back into where it was like 2020 2021, which for us means we are not doing something evil by saying our costs increase as well as landlords. So we increase our rent, because this is what the proper relationship, the value that we are basically providing with these property is worth. And, as you said, so beautifully, Dustin, because we do this cost calculation upfront, if we can start out with 200 250 $300 cash flow to begin with, it's only nominal numbers. I know, it's not necessarily value of money. But normally, as rent increases, the beauty of real estate investing is that your costs don't typically increase your mortgage payment will be the same, your property tax is most likely going to be pretty close to the same and your insurance is going to be the same. You have vacancy and capex and those kinds of reserves don't really change. So what typically really gets the biggest impact from increases in rent is your cash flow. Right. And so that's I think, important because you have two opportunities in the future, if you believe me, or I believe, Dustin that this is a great time that we're getting into, if you can make it work for 20 $50 A property now we're seven and seven and a half percent interest. And then let's say three years, the interest rates come down, you will immediately jump in cash flow on every one of those properties when you refinance. And until then it is very likely that you will reasonably be able to increase the rent. So when your starting point is 250 a month, in two years, it's probably closer to 400 a month, right? So those two things should be kept in mind when you say okay, does this really make sense? And then the other thing I have to say before I give you a chance to say how people can get a hold of you. There is no better game in town. If anything has happened in the last 15 months, I would say 18 months. Maybe it You look at the stock market, you got crushed. You look in the crypto market, you got crushed. You look into the commodities market, you had to be a super good picker to pick the right thing at the right time. And even things like gold, silver, and those kinds of always like long term commodities, they didn't really move much. Everybody said, when we got this kind of inflation goal, it would be $5,000 an ounce, but it's 1800. So it didn't do what everybody expected. Guess which market just kept chugging along, as if nothing happened is realistic. And it will always do this. My last point before I want you to tell the audience how to get in touch is if you really think about since that point in time, Dustin, when you bought your first property 2006 And then more nine and 10, the Vedas the contractors of this country have been afraid to bid or the banks haven't given them the money. So I'm not sure what the exact correct numbers, but I would say it's probably somewhere between seven and 10 million units missing for the populace. And it's no way especially in an inflationary environment that anybody is going to bid these very quickly. So anybody who says the real estate market is really really going to crash like 2008 is disregarding that at that time, we had an oversupply and now we have a massive massive under supply. But yes, prices were correct some from the crazy highs, but it's not gonna like be like the bottom falls out, because it's just too much demand and the demand I believe, I think you believe too, is going to be more and more into rent, because people don't qualify to find it. So that's just my little kind of economic view on this now I know other than I am doing the mentoring even though this who listen to our podcast regularly, I think what you do beautifully I haven't figured it out but I know you're doing very well so people should take you up on it. You teach people you approach so if they are intrigued they like what you said they're like how you surf the waves and stuff like that. How can they actually become your students and how can they get in touch?

Dustin Heiner:

Yeah, I appreciate that. Yeah, so I actually have a free course I just love giving out do you mind if I share that with everybody?

Axel Meierhoefer:

Absolutely. That's why you're here.

Dustin Heiner:

Awesome. Yeah. So if you have a US based number you can text the word rental r e n t a l rental to 33777 rental to 33777 or you can go to master passive income.com Ford slash free course all one word for us is free course master passive income.com Ford slash free course I will give you everything that I literally talked about building the business first finding anywhere in the country to invest we love messing get out of state how to build the business how to scale the business so you can quit your job and so I'll let her give that to you for free. You can also check me out I have my own podcast the master passive income podcast it's usually just a show show me just sharing all the stuff you know like when your success we have a point yet plenty of extra time so like well let me just go ahead do what I love and what it really came down to I realized after I started coaching so many people I really really enjoy this in fact, I was coaching people before I even created master passive income because I had friends and family just like you Axel asked how did you do it? Show me and so that's why I wrote a book created master passive income. So check me out master passive income podcast. Same thing on YouTube master passive income. You can find me on Instagram as well. So the handle that I have is the Dustin Heiner THG. Dustin Heiner, I'm not that arrogant, it's the only handle I could find for myself. So the Dustin Heiner, I also if you want to come hang out with me, I just like Axel have a bunch of students. And I created a conference a real estate investor conference called The Real Estate Wealth builders conference, Rukh Khan for short. So our EWB co n.com. And that's a conference that's gonna be here in Phoenix. I live in Phoenix, in May 4 through the sixth of 2023, and 24. It'll probably be on the East Coast, we're going back and forth between the east and west coast. But we have a real estate investor conference, and it's not one of those sales pitch, hey, run to the back and give us money. It's not that it's just like Axel and myself, just being friends. And we're here to help you to invest. I have 35 other speakers that are teaching on everything from apartments to land deals to Airbnb, everything above. So it's going to be a great time so you can get your tickets there. And if you want to get 10% off your ticket, type in the word podcast, I'll know you came from Axel but use promo code podcast to get 10% off but it's been great. I really love seeing people just invest in real estate. That's why Axel and I do this is because we just love seeing the change in people's lives. So Axel, thank you so much for having me on the show. Yeah,

Axel Meierhoefer:

absolutely. And for our audience, all those links and all this stuff is going to be in the show notes. And one thing I want to encourage everybody to do is a little bit of a lesson learned and maybe it helps you to and for your podcast, Dustin, that those that have somehow the power in podcasting has determined that the way to basically rate what is a good podcast, what's not such a good podcast is by how many downloads the show actually gets. I always thought well I want people to listen or if we put it on YouTube. I want them to watch. And listen, I never realized until late last year that the real accounting thing is the download. So I want to encourage everybody who listens to us. Anybody who checks out Dustin, download his podcast, please download our podcasts as many times as you can. I want you to listen and I want you to watch but if you can do us that one favor both of us to download our episodes and we really help us because that way we can produce more shows and more information like this. So thank you Dustin for being on the show. And I hope we can do it again sometime soon.

Dustin Heiner:

Absolutely. Thank you so much Axel.

Axel Meierhoefer:

Thanks for listening and I hope you enjoyed today's episode of the The IDEAL Investor Show more info and the links we mentioned during the show in the show notes or you can go to our website at Idea wealth grow a.com and sign up for the Apple podcast link. And if you'd like to talk to me sign up for strategy call. Hopefully you want to share what you learned with your network and bring more people in we're really eager to hear your comments and until next time, be well stay safe and ciao.