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Welcome to the Passive Income Life Podcast.

We're breaking down the mindset, strategies and actions to break you out of financial dependence of your job or business and into the life of financial independence where you choose how you get to spend each day.

So live on four weeks of vacation per year or flip the script and live on 48 weeks of living per year.

What you gonna do?

What you going to?

Welcome to the Passive Income Life show where we guide you to a seven figure income with a special focus on making passive income so you can live the dream life.

And now here's your host, Zach Zimmer.

All right, welcome everyone.

Hey.

It has been a while.

I have not provided, you know, live current content in a good, I don't know, six, eight weeks and that's, that's all on me.

I've just been, I hate to call it lazy, but yeah, I've kind of been just living the passive life and haven't had the itch to come out here and talk to no one, which isn't that enjoyable.

I like, like interviewing, I like being interviewed, talking to folks.

That's what I was after with this.

Not, I'm not sitting in front of doing a whole bunch of solo shows.

I just haven't put the time to do it.

There's quite a few things that I thought were worth putting together and talking about so back here in front of you guys.

But yeah, I've just been kept keeping busy with the golf season wrapping up with the Florida season starting.

So I've been going down to my place in Florida, family and friends down there and some good golf down there after the storms.

And yeah, my place is in St.

Pete so it did get back to back hurricanes and it was upsetting, certainly devastating for the area.

I was down there the week before the first hurricane, having a great time on St.

Pete beach and then went back the week after the second hurricane and saw the devastation of all the beach bars and restaurants along that whole, I mean, strip of St.

Pete beach all the way up to Clearwater, mostly devastated.

It was very eye openening to see the amount of destruction, the debris.

I mean you're talking miles and miles and miles just in my area of St.

Pete that look like complete eviction set outs on every street, every residence.

You have just all their household goods, all their appliances, the drywall, furniture.

I mean when saltwater touches any of that, it's basically done.

So it was, I mean, pretty, pretty hard to see.

Just, you know, probably a one Day occurrence that generated probably six months worth of waste and trash and where that's all going and how that's being handled.

But fortunately our place was fine.

We're on a man made island right offside St.

Pete Beach.

So higher seawalls, higher protection, a lot of boats got thrown over the seawall and are sitting in the the landscaped areas and on land that'll get taken care of.

But our island mostly as a whole doing well.

So yeah, it's been good to be getting down there and that our place made it.

But yeah, even up here that's just been a lot of just, you know, enjoying life.

I've had a couple turns and so it's working with folks, you know, to get those turned around, very little issues and get new folks in and nice rent raises pretty much on anything every year here lately.

And so that's been good.

And then fincon, so two weeks ago was the financial influencer, I think they call it a money nerds conference.

And so this is all folks in different areas of finance, not just real estate.

So in debt, in saving, in credit card and mileage hacking.

It's one of the longer running conferences.

This was year 14 I believe.

So it's been around quite some time.

Big falling, I think there was 13, 1400 people.

And it was in Atlanta which was a lot to be desired there, good food.

But yeah, not, not the city I could see myself spending a lot of time in.

But no, it was great, great people.

And one of the things I was really after with that conference, certainly supporting my great friend Dustin Heiner and Master Passive Income as they were a sponsor.

So talking to folks about real estate and coaching courses and understanding all sorts of other areas of people who are renting, you know, by the bedroom and there are all sorts of other real estate investors there.

But one thing I wanted to vet out for myself was this whole quote unquote influencer space and is that something I really want to press more into and, and I thought going into that I'm either going to come out full bore as I want to create more content and grow a larger network and start tick talking and YouTubing and Instagramming and reels and all these things or I'm going to come away like, nope, it's not for me and what am I doing with this time and creating content here with the podcast.

And what I found there, yeah was that these, most of these folks in any of these spaces are spending the large, large majority of their time on sales and marketing.

Unfortunately, unfortunately, whatever but you have to, you can create something, but you have to constantly sell and market and brand to grow people to come in.

Whether you have affiliate relationships that you get paid on by them clicking on your sponsors and affiliates and buying things, or whether you're selling courses and coaching, you have to constantly be selling that.

And that's not what I want to do.

I am not a salesman.

I don't like any of the creating a content to sell or brand.

I don't even really have anything to sell yet, so why would I spend time doing sales and marketing?

But you know, they're only spending 10, 20% of their time actually doing the thing, if that, or actually coaching.

If they're coaching, they're spending a large majority of their time selling.

And that's not for me.

I mean, I'm good friends with a lot of those folks and made new friendships there and really enjoy some of them.

They're, they're all driven people.

But I'm not a salesman, so.

So at least coming out of that, I know this is not what I want to really spend my time doing, to become some influencer.

And when I came back, what have I done?

I immediately got three more properties under contract here in the last week.

So completely went the other way back to aggressively doing rather than building the content to teach, coach, sell.

So, yeah, it's been, it's been very motivating.

You know, I feel like I'm really back to 20, 2016 again in hardcore production, finding good deals, getting out there, hustling, getting three more properties that are each going to cash flow over a thousand dollars a month until I would put debt on them and grow net worth, you know, six figures each one as they continue to get paid down by the tenant and appreciate.

So I mean, boom, great hits there.

All three of these, excited about that.

And you know, one thing that I wanted to talk about that, that had me thinking here yesterday was linear versus exponential.

So linear growth versus exponential growth.

And this is something that was talked about, right, when I was in engineering school and working in continuous improvement and when I was building my models in real estate, right.

I'm obsessed.

And if we go back to some ones that I did on YouTube, I should be able to see my charts and graphs and master spreadsheets, the pull in data and you'll see, you know, my monthly net income, I was very focused on linear growth and looking at that monthly cash flow.

Every property I added after it had debt service or whether I bought it with debt, okay, I'm clearing $400 a month.

3, 3, 400amonth.

And I'm going to buy 10 houses this year.

15 this year.

Okay.

I'm adding 4,000amonth to net income, 6,000amonth to net income.

And I could draw, as I would stack my year by year bar chart, right.

I could draw that line that was very linear and I loved, right.

Having a fit line across those charts and then making sure each year would beat where I should have been.

Right.

And one thing I wasn't thinking about, I would, I knew, but I didn't really think about was the other ways that I was getting paid.

And we've talked about this before, how many ways real estate pays you other than just cash flow, which is what is the easiest to see, the easiest to think about.

But we're also getting paid in debt, pay down, right.

As our tenant pays down our debt, we're also getting paid in appreciation, right.

The property is growing in value.

We're also getting paid in tax free income and depreciation.

We get to write that off.

So we get tax free income and the time value of money, right.

We've frozen that loan in as the property appreciates as it gets paid down and.

Right.

It's kind of complex to model what that looks like.

So it's more in feeling what that looks like.

And that's the crazy thing.

So as I've been focused in understanding this linear growth path again, now it's more like 5 to $600 in net cash flow per property after all debt services is pulled out of it or after it has full debt service on it rather, and I have no cash left in it.

But this other thing that's been growing vastly exponentially is true equity net worth.

And you know, it's, it's probably more than what I've pulled in in cash flow in the 12 years I've been doing this because the properties are getting paid down, right?

They're, they're becoming worth more into my pocket through the tenants paying down the mortgage as well as the property appreciating.

Right.

So it's grow, growing almost in two ways.

The debt paying it down is making it grow and appreciation is making it grow.

And the more properties you have, right.

And that, okay, we could have planned for like a 2%, 3%.

You know, this isn't a crazy growth area.

You generally don't have great growth and great cash flow in the same area.

Right.

You can have great planned appreciation in a highly desirable.

Right.

Coastal area or a big city.

But generally it's not going to cash flow as well.

Right.

It has higher owner occupant demand, so it's harder for investors to hold those properties.

So it's been, you know, we've gotten our cherry on top here through Covid and the shortage of housing and the printing of trillions of dollars that our properties in a great cash flow area have also appreciated like crazy the last five, six years to where you know, these RTO contracts that I was writing pre Covid 2019, I was writing RTO contracts for tenants to buy the houses at 65,000.

Right.

Properties that I was all in for 40 that were renting for 900.

And these are blue collar, right?

Yes.

C plus, B minus area houses.

Those properties today, right here we are five years later are double.

Those properties are writing new contracts for 125 or $130,000 purchase and they're renting at 1300.

Right.

So from 9 to 1300 in rent, from a 65 to a 130 purchase price while debt's being paid down.

And so that's that exponential, that's that you, you weren't even planning on or understanding and it's just happened to watch my net worth grow like crazy as the debt's being paid down, the properties are appreciating.

So that's, that's something, you know, to think about.

And I know these, I call them the looney west coast investors that are buying up, competing with my properties here and they're paying well more double what I'm willing to pay.

I know that's what they're thinking about, right.

That's how they're justifying buying these single families at 7%, 6% cash on cash returns.

Because they know debt pay down, they know appreciation, they know it's going to take them from a 6 or 7% to a 13%, it's going to take them into double digits and they can't touch anything like that returns out west.

It's a good diversification from mutual funds or bonds or whatever they might have these funds in.

And so that's how they're justifying.

And it's, it's unfortunate that they're thinking that way because I won't touch any of these things in the single digits.

I want my cash on cash where they want their total returns.

And so that's why it's tough to compete with these guys.

But it's something you definitely need to think about if you are just looking to diversify into real estate versus trying to reach fi through real estate.

Right.

These, these Guys in the West coast paying 130, 140,000 for these same single families that I'm all in, in the 60s.

Now, they're never going to reach Fi through owning those properties, right?

They're cash flowing 150, 200amonth.

Right.

So they will never hit Fi, but they are creating good wealth building and diversification investments in their portfolio.

So it's the things you gotta think about like what are you going into real estate for?

Are you going in for divers and some wealth building then buying everything, brand new turnkeys with good property management in place and paying that, you know, getting that 1% rent, a price, you know, paying 130 for something that's renting for 1300, if it's in a solid area, then that's, that's good diversification.

That's probably a good investment.

If you are looking to get to fi, right?

Financial independence, that's, that's not a good investment, right.

You've got to somehow find some better strategies than just buying higher end turnkey rentals through a provider that's getting you up into that 1% rent to price, right?

That's not going to get you there.

So the other thing I wanted to talk about is taking action.

We hear this all the time and you just got to do it.

You got to take action.

And Cardone is great at motivating, right?

That was the book 10x and then his follow up, Boba Be Obsessed, Be Average.

I've talked about him 20, 14, 15.

Those two books really got me to take enormous action and not stop taking action at the right time in my life, at the right time, time in the market.

And yeah, as you become wealthier, as you become satiated in what you're doing, it becomes harder to get yourself motivated to take that action.

And yeah, I mean, honestly, I've not been motivated.

I came back from the conference and got there, but.

So I came back from the conference, I got two properties.

Another one came out by a wholesaler in an area I wasn't so sure about.

And so I tried to get a buddy of mine, a good, good friend that I've been helping invest, tried to get him interested.

Hey, you know, I scheduled an appointment to see this, but I don't really want to.

I just got two under contract here, why don't you go see this?

I think you should buy this.

And he couldn't do it.

He couldn't fit it in his schedule.

And I was like, well, I don't want to go out there and see this, but all right, let's, let's go.

The wife and kids were busy doing something, so I was like, I'll go up to this appointment now, meet the wholesaler and create a relationship and you know, we'll see, we'll see where it goes.

Maybe I'll get some better deals or better areas, more so in the future from him.

And I went up there and got there.

I didn't see anybody waiting for me like normal.

And go up and knock on the door and nobody answers.

And I'm getting a little upset.

Okay, I call the wholesaler because I hadn't checked with him that morning.

Hey.

Making sure we were still on and called him, nobody answered.

Ring the doorbell.

Finally this price 70, 75 year old gentleman answers the door.

And I said, hey, I'm Zach, I'm here to see the property.

And he said, oh, I canceled this, Sean, we got to push it off.

And I was like, are you kidding me?

I drove up here on a weekend and didn't want to come to begin with and come up there and can't even see the house.

And he said, no, no, you can come in still.

I just, I wanted to push it off.

But yeah, you're here already, you can come through.

And I mean, the house is great, right?

The height.

I don't know how long he'd been living there, maybe 20, 30, 40 years could be.

But just house is great.

He added a bedroom into the basement, a full bath in the basement, nice garage, covered patio in the back.

House was better than the pictures and everything's great to really just turn this thing around.

And had a good conversation with him and came out and saw a text from the wholesaler.

Finally he needed to push it out.

He called us last night, sorry.

And I called and lit up the wholesaler for supposedly wasting my time.

And then I told him no.

He's showed me in any house and ended up getting it under contract for about a thousand less than what we had talked about prior to going up there.

And really, really great deal, nice neighborhood, good turnkey property.

And yeah, I mean I was just, I was jacked up after that afternoon coming home, got third one and three or four days under contract and, and it just kind of reflects on me like taking action.

I didn't, I didn't want to.

I was being, you know, just kind of, hey, I already got two.

Why do I need to go up there?

Don't know this area.

And took action and got one of the best deals and you know, probably in the last year to Just by going after.

Right.

Tennis and keep.

Don't stop because I already got some and I don't know the area or I don't want to go up on a weekend.

I want to stay home.

And it'd be amazing the things that can happen, just keeping at it and putting aside any of your doubts and things that you don't want to do, just to keep going.

So that was motivating.

I'm.

I'm getting energized again to.

I don't know, I don't know if I'll blow this back up to another 70 or 80 single families or if we'll stop here.

I'll be up to 50 again here pretty soon and will not make the mistake of selling off 10, 15, 20 of them and going into private equity to, to lose another million dollars there.

So just definitely back building this up and you know, maybe, maybe dabble back into apartments again, only with an expectation to flip them around.

These west coast buyers.

I don't, I don't see ever holding apartments again long term, at least in this area.

And I know a lot of folks.

Right.

Apartments scaling, right.

Why aren't you doing apartments in scaling?

Everybody talks about how they got out of single family homes and went into apartments.

Well, you know, I'd be interested to hear guys in my type of an area that truly walked away from the cash cow single family game where there's such a big difference in returns between single families and apartments here in terms of cash on cash cap rates.

All the different ways you want to look at it, not all the different ways.

I mean, certainly an appreciation and wealth building apartments are going to be as good or better, but the returns here on single families just.

It does not make sense to try to compete and scrap along with these high transient apartment buildings.

And the one that we had before that did very well flipping it around was, was a bear to hold and deal with the transient tenant turnover and the tenant issues we had.

But it did very well to reposition and sell that for more than double our all in 18 months.

So we definitely want to get back into that.

But yeah, that's.

I think that is about all I wanted to talk about or had to talk about here today.

Taking action, thinking about that exponential growth that's happening in the background, you know, and just, you know, keeping at the whole, what your plan is for, why you want real estate.

Is it fi or is it just diversification?

So that's about it.

I want to hopefully soon be getting some turnkey providers on to talk about turnkeys here in Northeast Ohio.

Is that a big market that will provide some good investment diversification?

So I have a couple friends that are both in that space I want to get on here to talk about.

And yeah, so you guys can know what kind of opportunities might be out there for diversifying into turnkeys here in our area.

So.

All right.

Well, thanks for joining me today.

As always, you can reach out@realzackzimmer.com with your thoughts on today's episode, what you want to hear more of.

You can also text TPL for the passive life.

Text TPL to 33777 for my top five strategies to seven figure passive income.

And as always, thanks for joining me.

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