How to Get to $10K a Month in Cashflow With Dustin Heiner

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0:47Plus, buy online and pick up at your favorite rack store for free. Great brands, great prices. That's why you rack. on this episode of the Personal Finance Podcast, how to make 10K per month in cashflow using real estate.

1:20What's up everybody and welcome to the Personal Finance Podcast. podcast. I'm your host, Andrew, founder of mastermoney.co. And today on the personal finance podcast, we're going to be diving into how to create$10 ,000 a month in cash flow with real estate. If you guys have any questions, make sure you join the master money newsletter by going to mastermoney.co slash newsletter. And don't forget to follow us on Apple podcast, Spotify, YouTube, or whatever podcast player you love listening to this podcast on. And if you want to help out the show, consider leaving a five-star rating and review on Apple podcast, Spotify, or your favorite podcast player.

1:57Now, if you want to get personalized help from me and you want to learn how to transform your finances, make sure you join Master Money Academy. If you go to mastermoney.co slash join, you can get more information on Master Money Academy and you can get live coaching from me. Now, today we're going to be diving into part two with Dustin Heiner. And what we're going to do in this episode is I thought it'd be a fun idea to have him coach me live on the podcast. So I'm going to be investing more into real estate over the course of the next couple of years as one of my goals. And I talked through with this with Dustin live on the show.

2:30And I said, hey, I want you to come up with a plan for me to be able to make$10 ,000 per month with real estate investing. Because I think a lot of you out there, that's the number you always come up with. When I ask you, hey, if you could make more money in real estate investing, how much would you need to make? And everybody comes up with a round number of$10 ,000 per month. So I thought this example would be a fantastic session where you can hear how Dustin actually coaches people to get started in real estate investing. And so what we talked through is, what if you could turn your money into$10 ,000 a month in cashflow over the next decade?

3:02And that's exactly what we're gonna map out here with Dustin, who left his nine to five at 37 by building steady rental income. So in this episode, I bring Dustin into a real scenario. I have$250 ,000 available to get started, and my target is$10 ,000 per month within 10 years. Now, Dustin is gonna give a step-by-step plan to reverse engineer that goal, choose the right mix of properties, and pace acquisitions so the numbers actually work. Now, a quick primer for you all before we dive in. We're going to talk through three different types of rentals, and we dive into this a little bit in the episode.

3:33We're going to talk through short-term rentals, which are typically about 30 days, and the highest income per night, but they need active management, cleanings, and consistent bookings. You're going to hear me say this in this episode. I just don't like short-term rentals long-term if there's a recession or something else going on. Then we talk through midterm rentals, which run about one to six months. And these are great for people like traveling nurses or corporate stays. They have fewer turnovers than short-term and are usually furnished and have more stable income. And then long-term rentals are 12-month leases or longer.

4:03And they're the most predictable and hands-off with lower cashflow per unit, but they have solid stability. And so we're going to use these three to design a realistic path to$10 ,000. And there's going to be simple math that we're going to walk through. If you net$300 per door, you need roughly 34 doors. If you net 500, you need about 20. And Dustin is going to show us how to blend short and long-term rentals to raise average net cash flow per unit, reduce vacancy risk, and keep management sane. So we're also going to dive into a number of different things on how to go higher and find a property manager.

4:35And he gives us some gold nuggets on that as well. So grab a notebook because by the end of this, you're going to know how to work backwards from your freedom number and build a 10-year roadmap to$10 ,000 a month in real estate cashflow. So I am really excited for this. And if you are ready for it, let's welcome Dustin back to part two on the Personal Finance Podcast. So Dustin, welcome back to the Personal Finance Podcast. Thanks, Andrew. Super pumped to be back on. And thank you so much for having me on for last week's episode. Super great questions. And I just hope that people realize that investing in real estate's actually very, very possible that anybody can do it.

5:12And hopefully they can too. Exactly. I highly encourage every single person out there. If you haven't heard part one, go listen, because that's going to be kind of the baseline of what we're talking about today. And we're going to talk through some of the things that I am personally thinking through when it comes to real estate today. And then we're going to tactically have Dustin kind of show us and talk through some of these lessons that we talked about in part one, and show some of the tactics and the things that we can try to tackle here as we go through this process. So Dustin, I'm going to lay out everything to you here.

5:37And then I want you to kind of ask me questions and we'll go through this entire process. So I just sold a business. For those of you listening out there, some of you may know that I owned pickleball facilities and we sold the business to one of our partners. And so now one of my big goals is to figure out a way to get back investing into real estate. So in my past, I invested in real estate with two cash partners and we would buy single family houses and small multifamily. So the small multifamily is I'm talking duplexes, triplexes, quadplexes, everything that was considered, you know, very small multifamilies.

6:10And that's what we purchased. And we would do, you know, one at a time, really, really strict deal parameters in terms of the way that I structured these deals. And in the end, when we decided to, hey, we're going to just go and invest, you know, in part ways, we ended up selling the portfolio because we had these partners together. And I figured, hey, I can go do this myself. Well, since then, once I sold the portfolio, I started to kind of buy businesses and I haven't gotten back into real estate yet. So one of my big goals is I already have experience in real estate in terms of kind of investing.

6:37And so one of my big goals is to think through this process. Now, a hurdle that I have in place is that locally, and this is what you and I talked about last episode, but locally, I am having a hard time finding deals. So I'm in the Tampa area, which is a hot market because a lot of folks from all over the country kind of moved down here during COVID. And so real estate prices increased. And so now they're kind of at a flat rate right now, but I have not been able to find deals in my specific area. And probably haven't looked hard enough yet to be honest, but that is just one thing that is one of the hurdles that I have to jump over.

7:05And so you mentioned in the last episode that you kind of invest out of state and you invest in different areas, which is something I've always, always been interested in. And so looking at this, how would you first, if you were in my situation, how would you think about maybe some of the properties that you were looking for? Because I've also considered commercial and kind of thinking through that process, but I do have experience and all my experience is in residential. And really, I wanna invest for cashflow. So I'm gonna give you a number. I'm gonna try to think through this because, hey, this is maybe good for the title too, but let's just say somebody wants to make me specifically, I want to make$10 ,000 a month in cashflow.

7:38Okay. And because I want to make$10 ,000 a month in cashflow, I want to kind of put a plan together in order to do this. Uh, and let's for argument's sake, cause this is also true. I have $250 ,000 that I want to start investing into real estate. And so this is the starting point for me, if we need to do down payments or if we need to do creative financing, some of those types of things. And so I want to build up this portfolio over the course of the next decade in order to produce at least$10 ,000 a month in cash flow. And probably my, you know, my parameters always change where I always just kind of the ball just keeps kind of moving higher in my court.

8:12So I always just kind of increase that stuff all the time. But let's start at that point in time. And tell me kind of what your thoughts are there. Yeah, so whenever I work with any student, the first thing we have to realize are a couple things or not realize, but like help the student to come to understand, number one, the risk tolerance, you know, are they okay with investing out of state number one, getting leverage or using using getting financing, which we'll cover just a second, but then also their goals. And so I definitely appreciate the goal of being able to make$10 ,000 a month. It's definitely something that's very doable, especially where you're starting at$250 ,000.

8:42In fact, I've had students that, like, I'll give you one quick example. A pastor in Sacramento didn't have any money. You know, pastors don't make much money. And so he didn't have any savings, but he said, Dustin, I know I'm not going to be able to work forever, so help me to invest in real estate. So what we did was I helped him get a HELOC, a home equity line of credit on his house. He tapped into that because he owned it since 2017. So he has a good amount of equity. And then he had$250 ,000 that he has now access to capital, or if you remember those words, access to capital. It doesn't have to be your money that you slaved away for and saved and got half a percent or less in a savings account.

9:18So his property worked for him, took that cash, bought a property in Atlanta, Georgia, that now property is free and clear because he used his home Atlanta credit. Well, you might be thinking, well, he's got a payment, right? Yes, he does. But that new house that he bought, he then got it fixed up, got it, rented out, got it managed. And now I think he was, I can't remember how much he was, like 600 bucks or something like that, a month of passive income. He refinanced it, pulled that cash out of that Atlanta property, then paid off his ELOC. Now he has a ELOC to do it over and over again. So here's the reason why I brought up that story.

9:50It's having access to capital. So for you listening, let's say you might have an IRA. Well, we can do a self-directed IRA. If you have a HELOC or a home that has a little bit equity, we can utilize that. There are countless ways to get financing. But Andrew, where you're starting at$250 ,000, I'm gonna give you one piece of advice that you will probably never hear anybody on Instagram or TikTok tell you this, that coaches people out of investing in real estate. What I'm gonna tell you is it's very easy to have a perspective of, okay, I get that I could save a little bit of money if I paid a little bit more for this property.

10:23Well, I don't want you to do that because I don't want you to waste your money. Let's say, let me switch it. Let's say you only have$2 ,500 to invest in real estate. You're not gonna be able to just spend willy-nilly. Oh, let me do that. We can just overspend. We can just over. I want you to think of it like you're a business owner. As a business owner, we don't overpay for things. We don't waste our money on things. In fact, we fight for every penny. So Andrew, that's where you're at. If you have$250 ,000 or even more, if you have$100 ,000, it's easy to say, ah, let's just throw money at it. No, don't do that because I want you to build in great investing principles so that you're then going to capture equity.

10:59Give you a quick example. Before I get to the example, we were talking about risk tolerances and goals. You already showed me your goals in last episode. So if you haven't listened to last episode, definitely go back and listen to last episode. I know Andrew has some risk tolerance that he can tolerate getting a loan. He obviously just heard he sold his businesses, which is amazing. So we got that. Now he won his goals, which is$10 ,000 a month. Now, one other quick question before I get to that story. Andrew, what excites you about real estate? Is it commercial real estate? Is it like a short-term type of property?

11:31Is it long-term? Or is it the cash flow that you're looking for and you're open to any deals? I think the cash flow is what I'm mostly looking for. And I'm pretty much open to any deals because my risk tolerance is pretty high. I'm willing to go out of state. I'm willing to kind of go anywhere at this point in time. So I am willing to kind of go whatever cash flows is what I'm willing to go after. I think the one area that I would be less bullish on, and this is just me, probably just my opinion, to be honest, but I'd be less bullish on vacation rentals. I'd rather it be something that's recession proof long term.

12:00I 100 % wholeheartedly 100 % agree. Okay, so a follow up question to that is, okay, so we want cash flow, which is absolutely right. Follow up question. Have you ever played Monopoly? My favorite board game of all time. Exactly. Same here. Same here. Awesome. My kids literally, about an hour ago, we're playing at Downs, we homeschooled the kids. And so they were downstairs playing Monopoly. Okay. So I love commercial real estate, but in Monopoly, how do you win? Where do you start? You start with just the single family houses. Correct. You get the land, you put houses on there, and eventually you build up to where you get to the commercial real estate.

12:40Now you're going to hear other people tell you, oh yeah, commercial real estate, like large apartment complexes, it's so easy. If you could buy a single family home, you could buy a large apartment. I'm like, no, that is the dumbest advice. Trust me. No, absolutely not. It's so easy to get a 30-year fixed mortgage, find a realtor or find somebody that wants to sell your property and buy the house and make cash flow and have money coming in every single month. When you buy in a large apartment complex or a large commercial facility. There's so many moving parts that are just, you don't even think of like, oh my goodness, how old are those stairs?

13:18And will I actually get a violation from the city if those stairs, like you wouldn't normally think about that sort of stuff or that boiler for it. So just like playing Monopoly, I suggest that you start with single family homes. It could be, and when I say single family, it's four units and below. When I say commercial or multifamily, It's five units and above because that's the way mortgages are looked at. Four units and below, you can still get an amazing 30-year fixed mortgage on. That's why I love 30-year fixed because after 30 years, it's paid off and it's lower interest rates, all that sort of stuff.

13:51But four units. So whenever I say single family home, realize this. Dustin is saying four units and below. So check. That's what we do. We start there. Now, one quick last thing because I want you to share. I'm going to add another question for you. Um, so I've talked to a lot of quote unquote multifamily investors. They're called syndicators. They basically just syndicate a deal. They're flipping multifamily. That's all they do. It's really, really sad. Somebody I was talking to, they had 4 ,000 units for, remember I had 30 single family homes. I do have 800 apartment complexes, but that's not the, my apartment complex is units.

14:25That's not what makes me financially independent. What does make me financially independent, my 30 single family homes. Now, when you look at the property that this person said they had 4 ,000 units, I asked them, how long ago were you financially dependent? When did you become financially independent? And she says, oh, I'm not. I still got to work a job. I'm like, wait, you've got 4 ,000 headaches that you have to deal with and you're not financially independent. What's going on? So here's what I say. This is my perspective. If you want cash flow, nothing better than single family homes. If you want to have generational wealth, nothing better than single family homes.

15:01If you want to scale, then there's nothing better than single family homes. When you play Monopoly, you start with single family homes, eventually you get to multifamily. It was only after I was financially independent for like, I don't know, 10 years before I finally said, okay, let me go ahead and get into the apartment complexes. Now, don't get me wrong. Apartment complexes are great that eventually you'll have to pay off, but you don't get cash flow. Does this all make sense? It 100 % makes sense. And I will tell you upfront that I've said this in the podcast before, single family homes were by far my favorite place to invest.

15:28Why? Because A, the tenants usually were just better tenants overall. And B, they had less headaches, which obviously isn't going to be my problem as we start to talk through this in a second. But C, they would stay longer. They would stay, you know, five, six, seven years, some of the times. And so I really love single family homes for that purpose. Yeah. So what I love is if you're investing not in your area, but you're investing out of state. The reason why I love investing out of state is because I'm a doer. If there's a property like in my city that somebody's all the clogged toilet, I'm going to go there myself and do it.

15:57But because it's out of state, I don't have in my brain, like it's not in my brain to ever go do anything. So I make sure that I afford, or how I say it, all the expenses are covered for any repairs so that if there's ever repair, I don't have to think, oh, shoot, can I afford this? No, no, no. I've already covered that was expensive every single time I bought the property. And then every single month, I get cash flow coming in, and I can also pay for repairs. Now, and thinking about single family homes, if you're looking, okay, I want to get$10 ,000 a month in cash flow, then we're probably looking at close to 20 single family homes that are making$500 a month in passive income.

16:37Now to get there, it's hard to go from one property to 20 if you don't start right. So definitely go back, everybody, I want you to go back and listen to last week's episode where I talked to you about how to build the business right, how to start with building a business. Because if you build the business first, then you can scale. Because if you are managing your properties on your own, Andrew, you know, you're gonna be pulling your hair out eventually, you're gonna be like, oh my goodness, I have so many calls. I have six properties. And there's six problems going on at one time. I have my businesses I got out, I got my kids.

17:08You don't want that. You want somebody else's business to run that. So what I'm suggesting is if you want to get$10 ,000 a month, first, we build the business, which means we find a good city to invest in has a lot of inventory, three bedroom, two bath, 1200 to 1700 square feet. And I explained more in the last episode, so definitely go check out last episode. But what we do is we find that one property. And here's my suggestion. If you really want to hit the$500 or more a month is we're going to be looking for midterm properties. Co-living is great. Don't get me wrong. Co-living is great. You're going to make a lot of money, but there's a lot more moving parts, a lot more leases.

17:44That's where you rent out each room. But if you want the best of both worlds, long-term as well as short-term, short-term you have higher rent or they rent up per day. So you make more money, but there's a lot of turnover, a lot of wear and tear on the property. When you do long-term, it's so much easier. It just that does work for you and the people take care of the property, but you make less money. His immediate one, I think. I would love to see you invest not in a really rundown, like a D area, but like a C plus area. And you're going to take that$250 ,000. We're going to start scaling by buying a first property with a down payment.

18:19We're going to be making a midterm or making that property into a midterm property. Let me give you an example. So I have one property in Peoria, Arizona, just next to Phoenix. And I could rent it for$2 ,000 a month long term. But I just put furniture in it. And then I pay for the utilities as well as internet. I'm renting it now for$3 ,600. So 2000 to 36$1 ,600. Now my expenses are maybe four or$500 a month at most that's like the highest hottest part of the year when it's the highest electrical rate. So I'm at least making$1 ,000 more in my midterm rentals on the bad months. On the good months, I'm making like$1 ,300 more.

18:58So that's my suggestion is we look for cities that are like Nashville would be a little harder, like the big metropolitan areas, really priced high. What we want is outlying areas, tertiary markets that are like cities that are like 20 minutes away. People still live there. There's still, you know, businesses there. There's still nurses and all that sort of stuff. Midterm property is going to be the fastest way to get where you want to go. One thing I've learned from running multiple businesses is there's usually a gap between how you think work is getting done and how it's actually getting done.

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22:09That's Indeed.com slash podcast. Terms and conditions apply. Need a hiring hero? This is a job for Indeed sponsored jobs. How do you feel about midterms in terms of like long term and the longevity of those? Have they been around forever? How do you think about that? So the great thing about midterm, actually, no, let me say it this way. What I love is to teach my students we do not buy a property unless we can rent it for long term Where we're still making cash flow like that's our fallback if everything falls apart Well, we could long-term rent it and not lose money. So if you're going to Bare minimum 250 a month like that's worst case scenario.