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How a government worker side hustle his way to an early retirement and how you can follow his lead. What's up? What's up Nick? A little bit here. Welcome to the side hustle show because the rat race doesn't need anymore rats. This week I'm excited to introduce you to a friend of mine who followed a systematic approach to building his side hustle and retired at the ripe old age of 37.
Today Dustin Heiner is living off and supporting his family from the mostly passive cash flow from his empire of 30 plus single family rental properties. Dustin is a serial side hustler and even at one point was running a convenience store before going into his day job in the morning.
But realized the benefit of getting paid over and over again from work he did once that was something real estate would allow him to do that his day job and his other side hustle ventures did not stick around in this episode here Dustin's all call it backward approach to property sourcing the six ways he makes money in real estate and his advice for those looking to replicate his success.
You can check out Dustin's real estate content at master passive income.com and with all his new found time as a retiree he also hosts a fun podcast over at successfully unemployed dot co notes and links for this episode along with the free PDF highlight real of our conversation are at side hustle nation.com slash mp i for master passive income or if you're in the US just text Dustin tips to three three four four four and I'll send it right over.
I'll be back with my top takeaways from this chat with Dustin after the interview now one investment property does not an early retirement make but that's where the story starts ready let's do it.
I thought my first property living in California in 2006 but the downside was there was no properties in California that would cash flow and I say cash flow that is you have your income which is let's say $1500 but you have your expenses which is like $1,200 that difference there is $300 and that's passive income come in your pocket California you couldn't do that because prices are so astronomically high and rents were so low so I actually flew to Ohio of all places.
I was in and found a property found a property manager didn't know what I was doing bought that first property now I still own that first property in since 2006 even though the value went down and you know had the crash in 2008 all that sort of stuff even though that's the case I still make money every single month from that day I first bought it to now I I made at least $300 and then that first paycheck with literally doing nothing was amazing I look at that paycheck not paycheck rent.
Check it was the difference like I said the income expenses just the difference there it was like $350 I said oh my goodness number one it's really not that hard to calculate you got your income and your expenses you don't have to know you need addition and subtraction the other thing is multiplication see like I'm not that smart but I figured out this is so easy addition and subtraction that gives me $300 now if I were to multiply that out one property $300 10 properties oh my goodness that $3,000.
$1,000 a month that is $36,000 a year I need to keep doing this on full like I need to make sure that this is my full time business or my side hustle can eventually take over and I can be a full time investor so I bought that first property started making that money every single month.
So I think I'm going to have to pay for the cash purchase or finance to deal it was a cash purchase and the properties that actually the area think of like Detroit back in 2008 it's very similar it was a very very economically depressed market and so I got up a total of $17,000 and it was a cash purchase for $17,000 now you're not going to be able to find many of those properties now you will find like they're selling for a $6,000 $7,000 but you're going to need at least $30,000 worth of work or a letter to
the property and a lot of other properties but yeah it was all cash and so it was like I said $350 coming in. Yeah that's a nice $17,000 for a house. What gave you the confidence to invest in that depressed area like if jobs are vacating if the population shrinking that seems like not necessarily a great place to park your money.
So you're assuming actually thought about all that stuff like I said I did everything wrong but since then doing it for what I don't know what is that 12 14 years now or something like that I have basically developed the system that said okay you got to build the business first and we can get into all that but build the business first find the right people to run the business before we even think about buying any property and then we can buy the property.
Yeah because it's easy to go on roof stock or even like a Memphis invest and curious to get your take on those types of services for you know out of state investors but they make it very easy to go shopping but you're suggesting like look before you go shopping you're going to want to have some infrastructure on the ground there so what would be critical to have for somebody before they even start looking for a property.
The way to start is to number one find which state you're going to invest in and then zoom into which city you're going to invest in and the way you do that is I usually use Zellos Elos a great site to get big broad picture actually it's a start as we look through that it's a tool for us to do more due diligence and that's basically just making sure we're making a right investment but you looking at the entire state look for population areas that have a lot more properties than not and use zoom into that city and you get even closer and closer.
And you're going to look at all the different properties in that specific city to see if they meet your criteria how much money you have to invest the type of properties that you want and how much rent it's going to make so you're making and here's here's a principle for everybody listening.
You want to buy for $250 or more in passive income after every single expense that goes into your pocket because that's how I provide from my family I 30 plus properties now and so we literally live off of a real estate the next thing we do is build the business finding the right people to actually run the business for us without us doing any work as with all my properties I literally only work 30 minutes a month 30 minutes a month for every single one of my properties and other people do the work.
Because I built the business now let me give example of what building the business looks like if you're going to start a convenience store you're not going to just get a location open door put a box of chocolate candy bars in the center and hope to run a business that's essentially what you're doing if you just buy a property anywhere without building the business.
No you're not going to do that you're going to get the gone dollars which are the shelving units you're going to get the counter tops you're going to get the fount machines the cold storage the cash registers bank accounts employees you're going to build the entire infrastructure.
Before you put one piece of inventory into that business and when you're doing that you now have a solid business every piece of property with my 30 plus properties now I literally view them as inventory it's not at home to for me to live in it's a piece of inventory just like a candy bar so once I have the business built every new property is like another box of candy bars inside my business and I could just keep adding and adding and adding into that business.
Does that make sense? Sure so this is you're talking about like the team being the property management the realtor perhaps the handy person to come out and fix stuff when it breaks like is that what you mean.
Your number one person's your quarterback and that is your property managers you what I suggest is I literally have all my students interview six different property managers because you're going to make sure that this is the number one person you're going to work with is so much to talk about which we can't go into that right now but your other people you're going to get are.
Many wide receivers are running backs if you know football analogy so these are the people that are going to be making plays for you and these are real it's these are wholesalers wholesalers are basically like real it's but they're not license they find sellers and they find buyers and put together you're going to find other investors that are willing to sell you're going to find other ways to find properties sell or financing and all that sort of stuff you're going to get somebody on your team that's going to be doing your insurance you're going to get somebody that's all your team that's going to be doing your finances you're not going to find the money.
You're not just finances by funding give me to get more gauges and things like that right and even handyman contractors roofer's plumbers you're going to get all this stuff developed and know that you will absolutely have a business built before you buy that property because I'll give you an example of a big reason why I never fly anymore is I flew to Illinois I went to springfield Illinois a great town great place but I literally could not find a good property manager and I thought man I flew all the way out here and I thought that's it.
out here and I can't find a property manager. I can't buy a property because nobody's going to manage it or at least I could not find somebody all this time and everything was wasted. So now I literally do everything remotely through the phone, through internet and all that sort of stuff. And I found there's no need to actually fly to another city ever again to even start a brand new place. And especially all my students have really literally
done that as well. So yes, building the business is getting your team, getting the infrastructure of your business so that it runs for you automatically and makes you money every single month. What are you listening for as you're interviewing those property managers?
There's quite a few things. Number one, there's a lot of questions that you need to ask and you need to know the answers of what is a good property manager, what they would actually say and how much they would charge, what they would do in a certain situation, all these other ideas to understand if they're going to be a good property manager. But if you're thinking about what you're listening for, number one, can you actually talk to
the person on the phone and not cringe even before you have business with them? Like if if your personality just don't work, you're going to hopefully be working with this person for five, 10, 15 years, like changing property managers is not fun. You don't want to do that. You want to get the best person. So you want to make sure you can talk to him on the phone. Number two, you want to make sure that they're trustworthy. As you're talking to them, most
people are a decent, not great, but decent judge of character. If they sound a little shady or questionable or possibly untrustworthy on the phone, trust your gut. That's my opinion. Absolutely trust your gut and go with that. On top of that, not just trustworthy this, but communication ability. Not just can they talk on the phone, but are they going
to call you back? And so if you are trying to get somebody to be your employee or your contractor, basically your property manager, before they even have your business, if they are bad at calling you back, like if it takes some two days to call you back or four days or longer before they have your business, how bad do you think it's going to be when they actually do have your business? Like, I'm still making money. I don't need to call
them back. So those are three main, huge ones that we need to look for in a property manager. Are you struggling to close deals? B2B selling is tougher than ever. And that's why I'm excited to partner with LinkedIn Sales Navigator for this episode. LinkedIn's Sales Navigator is a sales intelligence platform that helps professionals effectively prospect
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apply need to hire you need indeed. Okay, so you've interviewed a handful of different property managers. You got a good sense for this person or this company might be somebody good to work with. And it's this fully like speculative like I'm thinking about buying property in your city. I would love to have you on my team if and when that happens, what happens next next is you then start analyzing properties. You really need to know the area
while pausing that analyzing properties in talking to these property managers. My huge suggestion of big pro tip is literally asking them if you were to invest your money right now in this city, where would it be like where would you buy those are great key areas of
where you should start looking. So now as you are starting to look at properties, you really need to analyze it and find properties that are going to make you and here's a big pro tip, make $250 or more on every single property because I've had people tell me well, I make $50 or $100. I'm like my whole goal is to make $100 every single month on a property. And I say to me, that's just way too little. If you extrapolate that out, $100
a month is literally $1200 a year. If you have one bad thing like a roof go out, there goes your entire profit or if you have the furnace go out or if you have whatever it might be, that's only $1200. Now we do save for expenses for repairs, capital expenses and all that sort of stuff. We do save for that, but we don't have a ton of money that we can also live on. $100 per property, you're going to have a lot of properties. You need to buy a
lot of properties in order to be able to quit your job. If you have the principle of saying, I'm going to buy only properties that make me $250 or more on every single property that's including every expense like they can see factor. You have capital expenses, repairs, property management fees, literally everything accounted for and you make $250 or more, then you literally have a life changing business model. Is there a calculator that you like to
estimate that monthly cash flow? Absolutely. So actually on my website masterpassiveincome.com, I have a link for the resources and I have a calculator that I actually created. There's probably a quick link to it. But anyways, just go to masterpassiveincome.com, go to resources towards the bottom. I have all the calculators for free to use and you literally just go
with step-by-step. All the expenses are lifted at list out, all the income. If you have a mortgage, vacancy factor, literally everything is in there and the insurance and taxes get in there and then once you fill out everything, it's going to give you the passive income that you're going to make. So what you want to do is you want to make sure you're making $250 or more. Now, if you're making $250 or more on a property, that is $3,000 a year per
property that's in your pocket as profit and it's a huge buffer. Now, here's the thing. Right now, we're looking at in the current economy in the market right now, you're seeing people might not be able to pay their rents because of the lockdown and COVID-19 and all that sort of stuff. And here's the thing. If you do not pad in your expenses or you're basically making enough money in income, if you're only shooting for $50 or $100, it's going to be
really hard for you to weather this storm. If you're shooting for $250, then you can. I'll give you an example just literally last week. No, it was this like three days ago. My property in Houston, Texas, my tenant, we have the septic system, which I'm, oh, well, it has a septic system. You kind of got to deal with it. But they were flushing not just toilet paper, but for some reason, actual paper, paper going into the septic system.
That doesn't help. And they're basically dumping Greece, which does not dissolve. It doesn't go anywhere. It just clogs everything $3,600 bill. Now, I'm going to have them pay for something a bit because that literally agrees. That's literally a fault. They know they're not supposed to do that. And the paper, like who flushes paper, not toilet paper, but paper down the toilet. Anyways, so they're going to pay for something. But that's $3,600. If
you're only making $1200 a year on that property, you're going to get destroyed. You're like, oh, man, there goes three years of my profits. You can't eat on that. You can't live on that. And even 250 seems like a tremendous amount of risk and liability and the stuff that you're just talking about for not a lot of monthly cushion and I guarantee, I mean,
there's other real estate benefits, you know, appreciation and tax benefits. But that doesn't seem, it seems like I've taken on a lot of liability for a couple hundred bucks. Sure. Sure. But here's where the economy is. A scale come in. So I literally have not paid any money for my properties out of my pocket. I don't say in 10 years because I have so many properties now that make me so much money. If there are any issues with any of these
properties, that is coming out of the rents that I'm getting from this next month. So my property managers work. They just deducted out the next month's rent. And so I still make money. So I completely understand when you're thinking about liability, well, it's a cost to do a business. So like one property, it's almost like diversification in the market, right? Like I don't want to buy one company. I want to buy a lot of companies and over
the aggregate, I can do okay. But that one property, then you have all your liability and one basket. Is that what you're getting at? Definitely. Definitely. Now Warren Buffett does say, you know, Warren Buffett is a stock guy. Wait, one of the richest men in the world. He says that diversification is only for people who don't know what they're doing. So when he says that, he's thinking about raising my hand. Me too. Absolutely horrible
stocks. That's why I cashed out my 401k, my IRA, I cashed out my retirement, I cashed out everything, bought properties and make so much more money every single month and rental properties. I want to also touch on the six ways that you make money in real estate, which I'll get to in just a second. But to finish out the Warren Buffett thought with
Warren Buffett says that people who differ, one's that don't know what they're doing. Like buying different sectors and different areas, you're just making sure you're mitigating your losses. Well, what we do in real estate is we're diversifying not in real estate and stocks and mutual funds and bonds and this, no, we're full in because we know this business.
We know this business. I make money hand over fist from my properties. And so my diversification, like you said, exactly now on the head, different properties, but then at the same time, different areas of the country. I have properties in Texas. And so with the Houston hurricanes that came last few years, well, all the floods, I encased that and I'm really blessed my
properties did not get flooded. And we had a really good spot. If that did happen, I had other properties in other areas of the country, which made me money every single month. But I do want to also touch on the six different ways that you make money when you buy a rental property. And you understand these, but let me really paint these out for you. So number one is absolutely the passive income that you make every single month. And
that's what my family lives on. That's what we feed the kids and put the roof over her heads and electricity and all that sort of stuff. Are you comfortable sharing what that ballpark average month looks like for you today? It's about $15,000. It fluctuates. 20 is a little high because there's expenses. Things happen. But it's about 15, 16,000. Okay. So what happens if somebody one of these places needs a roof and now of a certain
year, 15,000 goes to zero and you're like, well, I still need to eat. I mean, you have savings and stuff. But it's like a big capital expenses. Can you race so many months of cool passive income in a hurry? Well, I could absolutely understand what you're saying. Other than I've not experienced that a roof that I have had to replace. I've had to replace many roofs, maybe about $4,000 and most. And so I still have plenty of money coming in.
But at the same time, I personally did not quit my job until after I had an adequate amount. I think $100,000 saved up literally for any problems in the future and for future investing. And so even right now with everything going on with people possibly not being able to pay the rents, I'm going to be totally fine. I was really thoughtful in making sure
I have enough money. Okay. Thank you for sharing that. Like do not spend down to your last dollar to acquire a property because you never know what surprises are down the road. Oh my goodness. So I was doing that when I had a job because I had the buffer of the job. And so every bit of our money, our savings went to buy the next property because I really want to quit my job as fast as possible. But with that, I was able to build that adequate
buffer. And so we have plenty of money now and we literally own our entire house. So I don't have a mortgage on that. So I really, like you and I were really, really frugal. And so we eat out at Penn Express as opposed to going to Ruth's Chris. Even though we have lots of money, that's just how we are. We don't live. I think I might have told you I didn't say on the show, but I'll say it right now. One of my tennis were moving
out of Arizona, one of our properties in Arizona. And we're in California and we want to move to Arizona because my in-laws are here. And so they're moving out. It's a 1,250 square foot house, three bedroom. We have four kids and my wife and myself. And we're fine. Hey, you know, I don't have a mortgage. I will eventually buy another property or a house to live in once the I see the market change and things get cheaper. But we're fine right
now. So what are you telling your students to sit on the sidelines until market conditions change or there's still pockets in the country where it does make sense to invest today? Yes. So here's the reason why I say yes. Number one, you wait for big expenses of $300,000 house. If it crashes, if everything crashes like it did in 2008, it's literally going to cut down in half and you're going to lose $150,000. That's going to be really rough.
Now eventually go back up like one of the six ways that you make money is just regular market appreciation. We know it goes up. And so the properties that I bought in 2006 that were cut in half in value. Now they're back up and above where I bought it. So if I ever sell, I know I'll wait until I can sell the property for a profit where I make a good profit. Other than that, I'll just keep and keep making money. So buying a home to live
in. I'd say absolutely wait. But buying income producing assets, those income producing assets are going to make you money every single month. So all those properties I bought in 2006, 2007, 2008 that were before the crash made me money all through the crash. And that's how this crash is going to come eventually. I don't think it's going to be right now personally. I don't think it's going to crash right now. But when it does, I have plenty
of money on the sidelines that I'm going to be literally gobbling up everything. Like it's going to be half up. It's got like fire. So I'm like, okay, I'll buy it. Okay, I'll buy it. Okay. I'll buy it because it's going to be great sale. But right now you absolute, my students are literally finding properties that they're going to be making. They're making at least $250 or $350 or even $400 a month. And because we're buying lower price point
homes. That's why I say yes, both wait and keep buying in certain areas of the country, like the Midwest getting down to the southeast and the Florida and stuff. There are some great properties that you can buy for $40,000 to $60,000, maybe even $75,000. But a $40,000 house that gets dropped in half, it's only $20,000, only lose $20,000, but you're still making passive income. So you can weather that storm. Does that make sense?
Gotcha. So you've limited downside risk on going after the lower end of the market there. And remember, these properties are inventory. It's inventory. Now we provide good housing. We make sure that the housing is really, really good. Obviously they're bringing it on furniture, but we're making sure everything works right. Everything looks nice. You know, we're not making it like a pearl on a street that is full of just trash. We're
not going to put granted countertops when it's not necessary. It's just a waste of money. But we're making sure everything looks good. And people always need a place to live. Now most people who have the question or the thought, well, shoot, if the market goes down, how are they going to pay their rent? Well, here's what's going to happen. People that can't pay their mortgage. Forget about rent for just a second. People that can't pay their
mortgage, what happens to them? They get kicked out of their house for closure. Then they have to rent everybody needs a place to live. And eventually they're going to start renting. So the pool of renters goes up. It's skyrockets up. And so I saw rents actually go up during the crisis or the recession back in 2008, 2009, 2010, because there were so many more renters. It'd be on the market for maybe like three days. And I already said I had another renter.
So you will absolutely do fine. Now they might go down a little bit, but eventually because there's so much more demand, your prices will stay right where they're at. I never thought I'd say this, but another spreadsheet of mine has bit the dust. It was my net worth and investment tracking spreadsheet where I would do tofully log into a dozen different accounts every month to update it and see where we were at as a family. And you know what
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That's a question that will actually bring in the idea of making money six different ways. So you make money six different ways when you're investing in real estate. Number one is the passive income that we definitely covered. Next one is the equity capture. When you buy a property, we're investors. We don't pay full price. In fact, one thing I love teaching my students, actually coaching them and they've even taken my email like
what I email them, how to negotiate something. They'll even copy and paste what I say and put it in. I've had one student, literally say or, yes, save himself $6,000 just by copying and pasting one sentence. You've got the seller to come down. Equity capture is where we're investors. If the property is worth $100,000, we're going to offer $78,000 and then work our way to where we're probably going to be settling for
$85,000, $88,000. So we're getting the value down. The next one is forced appreciation. Force appreciation is basically you put $5,000, you get into the property, you get the new paint, you put new flooring in, you make sure your lighting fixture looks good and you put $5,000 in. But that increases the value of total of $15,000. That's an extra $10,000 on top of the amount of money you put into it. So you increase on their $10,000. On top
of that, there's also regular market appreciation. We know just over time with inflation, demand, everything, interest rates, market just goes up. We've seen it just keeps going up. So that's another way. Another great way is tax advantages. There's so many tax advantages with owning real estate. In fact, I only get tax at the lowest rate, which is like 15% for all my properties, I suppose a 30, 40, 50% with earned income. The last one is almost
up there as good as passive income. The last one is one of my favorites, second favorite. And it is mortgage buy down. I don't pay my insurance. I don't pay my taxes. I don't pay my property manager. I don't pay my mortgage. My insurance, anything, my tenants pay that. And so that's mortgage buy down. So when you think of how you are now making money so many different ways, when you realize if you go and find a turnkey company, you're only
making passive income. And more than likely $100 a month, the margins are so thin for them. They have to make their money basically on selling the property to you, not just that you make very, very little money. And all those six different ways, you only make it the one way with turnkey companies. This other part is you're getting somebody else's business that they've already built. You have no clue if it's good or bad. I've had
so many people, investors work with me. And they've had bad turnkey experiences. Like, man, I just really need to do it right. Like, okay, well, you're still capturing, you're still capturing your cash flow. Maybe you're not capturing this forced appreciation because
they've theoretically already done these cosmetic upgrades. You're probably not getting equity captured because you're just buying it off the shelf, but you're still going to take advantage of market appreciation, tax advantages and tenant pay not for mortgage every month. You sure do. You're absolutely right. But the big thing is not knowing the business that you're getting more than likely they have a property manager set up. And that's why
they call it turnkey. They already have a tenant in there. But you never know what you're getting. And so like I said, I like buying properties that I am as risk free as possible, or as I can be is what I'm saying, as risk free as I can be because I've already built the business myself. I'm not inheriting it at from somebody else. I've already picked the and selected the right tenants. They've already done my criteria gone through my criteria,
background checks and all that sort of stuff. And see, the skeptic and me is like, well, they're the professionals. They've got to know what they're doing better than me coming out of from across the country. But that's as a good perspective to say, like, look, at least I'm going to be responsible for building my own team. I'm going to know what I'm getting into. I want to dive into your kind of rapid acquisition phase, like going from this first
property to going to 19 properties over the course of the next six years. What that looked like in terms of financing in terms of geography. Just like walk me through that, like, okay, I'm plowing every spare dollar personal savings into building this empire. Being frugal definitely helped a ton because every penny that went to something else did not go to buy that next property. So being frugal was huge. Geography wise, I stuck in
the same city until I realized, man, I have eight properties, nine properties. I kind of feel like I have my eggs in one basket. I already have this business setup. I don't have to do a lot of work. It takes me maybe three or four hours to find a property and buy it and then have my property manage to do the work. Let me find another city. So I branch out to another city, then branch out to another state and just start branching
out. Now funding, here's the thing. A lot of people think when I'm an invest in real estate, I find a realtor and I find a mortgage broker. I put them together and I buy a house. There are so many other ways to actually do this business that you don't necessarily need that. That's one of them. But there's at least 10, 15, 20 other ways to have a combination of funding and finding properties, even doing seller financing where the seller is saying,
you know what? I'm fine with taking payments over time. I'll sell it to you. I bought three single family homes and a duplex, often investor. I gave him $25,000 down and then gave the rest in a seller financed note. So the rest of the time, the tenants are paying off that note and I am making money every single month from those properties. And so once that seller finance note is off, I didn't have to worry about a bank. I didn't have to worry about
credit check or anything like that. He could deliver it, just take the property back. And so that's another so many great ways to do this business and scaling your business is being creative, putting all these different options together. And something I just absolutely love helping my students to figure out. So it wasn't necessarily a case of saving up for that next 20, 25% down payment could
be in the case of $100,000 property, 25 grand. And it might take a long time to save that amount of cash and to be able to build the business faster, you're saying you got to get a little bit creative here. Definitely. If you have the ability to just keep putting 20% down, then that's fantastic.
Go ahead and do that. But then what I'm thinking is, if I buy a house and I don't use any money out of my pocket because I've been creative in getting financing from either using other people's money, seller financing, like combination of even hard money, that's another hard money, another advanced strategy, utilizing all of these together, I can literally have no money in the deal. And then my return is infinite. Like I don't have any pennies of
my own money in the deal. So my return is just skyrocketing. Eventually, I own the property in that, like you said, the tenants eventually pay off all of that. So there are some great strategies out there. And there's just so many that you just piece them together, you get creative and you scale your business. That's how I went to, so I think it was in six years,
I had 19 properties. And then by the time I quit my job, which was like year eight to year nine, once I first started, I think I had like 26 properties, 27 properties, something like that. And then since then, just keep buying more. And yeah, it's just being as creative as possible. And just knowing the options out there, that's one of the hardest things. Yeah. What appeals to me about this side hustle is it's kind of a known game, right?
It's like people have been renting out properties for thousands of years, probably. It's one of the oldest side hustles in the books. And it's like follow a systematic approach to it, build this cash flow. Here's my buying criteria. And it's like, yes, it's not going to be quit your job tomorrow money, but over the course of like you said eight or 10 years, you can build this into an income stream that is robust enough to survive a downturn and
support family at the same time. So I do really, I do really like that. On the creative financing front, we have a whole episode about this. This is episode 292 called free houses where my guest had built a million dollar portfolio with none of his own money out of pocket. So definitely recommend checking that one out as well. Lots of fun stuff in there. Tell me about the moment that you felt comfortable walking away from the day job.
In order to do that, I mean, walk you through a situation that happened to me. So I bought maybe two or three properties. And I was really enjoying it. But at the same time, I was working a great job. I was working for the county government. And then I'm working from Monday to Friday, just one week back after my my fourth child was born on Friday at 330 in the afternoon. I get a call from my bosses, bosses, bosses secretary like the top dog.
His secretary gave me a call and said, Hey, Dustin, the boss needs to see you, see you come to the office. I said, okay, and hung up the phone. And I sat there for a second. Like, what is what? Why are they calling me? And then as I'm sitting there, I start to think, what could be the calling about? And oh, my goodness, back before I left, I heard some rumors or some rumbling throughout the entire office about possible layoffs because
there wasn't much money. And this was like 2009, you know, right? The crash eventually trickled down to the government. I'm me working for the government. I'm like, I'm should be fine. I have plenty of seniority. I'm doing really well. They've always gotten raises. And so I get up and I start walking down the hallway to the boss's office. It feels like it's a mile long because I'm just thinking, what am I going to do if I get laid off? And
as I'm walking, my feet feel like lead bricks. Like I just, it's hard to take that next step. And each time my heart started pumping a little more because I started realizing my goodness. I have four kids. How am I going to feed them? How am I going to put a roof for my head? And I get to where my boss's office is, his door is closed. I turn the corner and I see the secretary. She, basically, she looks at me and kind of grins and says,
Dustin, would you please have a seat? She knows exactly what's going to happen and what is happening. I don't. And she's trying to console me just by, you know, her eyes and her smile. She can't tell me. So I sit down. And as I'm sitting there, I'm feeling, I get pitted my stomach thinking, oh my goodness, this is probably it. And I started realizing or thinking, am I a failure as a husband? Am I a failure as a father? Even as a man?
Am I a failure? And as I think more and more, it's like, like, like 30 seconds or a minute, just sitting there, I start to sweat on my forehead and my hands get all clammy and then opens the door to my boss's office. And now walks a lady with a piece of paper. She's noticeably distraught, almost crying, but she's not really not saying anything, holding this piece of paper and walking out in the my boss's dust. And would you please come
into my office? And so I get up and go in and lo and behold, I get laid off. And who gets laid off from the government? Well, I did. I absolutely get laid off from the government. And so I take that piece of paper, I go back to my office and I realize two things. Well, number one, I realize that I need to provide for my family and everything that I need to do from this point forward is to be able to provide for my family, my four kids, my wife.
And so I was blessed within maybe like a week later, I was able to find another job in the county because I had a good reputation. So I got that, that was the number that my job was to find a job. And I did that, which is the first goal. The second thing was I needed to never, ever let this happen to me again outside forces, causing me to not be
able to provide for my family. So what I decided to do was that point, what as I'm literally sitting in my desk right after I got laid off the second thing I realized I am now an investor. Even though I had two or three properties, I was just a side hustle. I realized I am now an investor, even though like 98% of my income comes from my side job, it's now my side
job. Even though 98% of my money comes from it, my value is in what I give myself. And so what we usually say and what I would always say if somebody says, Hey, Dustin, what do you do? Basically, what do you put value in? I would always say I work for the county government doing IT work of the county government no longer did I ever say that after that. I said, I am an investor in real estate rental properties. So from there, I worked every single
penny into another property. I was frugal. We only took one vacation a year, which was driving from California to Arizona to see the in-laws for Christmas. That was the only vacation we didn't eat out. And so in making that transition, this was my goal. I said, no longer am I ever going to let this happen to me. And so I strove every single day, every
single week to get that next property and that next property and the next property. So to actually taking that leap, honestly, it was a little hard to leave that W a lot of hard to leave that stable W2 job once I had it. But once I realized I am losing money here, my value is so much more than this. And I'll be honest now that I quit my job, it
was so amazing to see how much more money I can make when I work for myself. So for everybody listening, that's my process is I had to change my value in myself no longer am I working for the government. No, I'm an investor with a side job. Same thing with you. You're a side hustle. What if your side hustle is, if you want to turn that into your job and you want to make take that leap, literally change your vision and your value of yourself
and that's what got me to where I am today. Yeah, this is like the identity, have it. This really powerful thing that subtle shift from I'm a worker first to I'm an investor first. So I appreciate you sharing that. Dustin, I'm curious during this acquisition time of buying a bunch of stuff and the creative financing, everything, who is feeding you these deals or how are you sourcing these properties to even consider? There are so
many different ways to do that. Like I said, it's not just a realtor and looking on the less or even looking on Zillow. There are so many ways I've bought and so one of my favorite I love realtor's, realtor's are great, but I even more so love wholesalers. They give me just an example of one of many different ways to find properties. Wholesalers are fantastic.
More than likely you've driven around anywhere in the city that you live or any city that you visited literally anywhere, you will see signs that say I buy houses cash or I offer is on houses or these bandit signs, these little cardboard signs or whatever they are that are on the phone poles. Those are wholesalers. Call them up and say I'm a buyer. I'm an investor. You might not have any properties, but literally just you're, remember, you're
now an investor. I'm an investor. Put me on your buyers list. They will love that. Yes, I will absolutely put you and they will email you over and over again because they work hard acquiring the deals and then they present them to all their investors. And like I said,
every morning I wake up, make a pot of coffee, drink my coffee, open up my emails. Okay, let me look at all the properties that somebody has sent me or all my wholesalers, all my realtor's and investors have sent me and just figure out which one I want to buy. Okay. If you're doing this out of state, like is that Google Earth looking for these signs somehow or like how do you find it? So you got to be a little more creative craigslist
is probably one of the best ways. If you type in, go to craigslist and whatever city that you're going to be looking at, type in buy houses or make it as simple as possible. Instead of writing I buy houses fast cash or something like that, just write I buy houses or wholesaler or wholesaling use different terminology that could help you to find these
ones. But those are wholesalers and they absolutely list on craigslist. Even I think on Facebook marketplace, you can probably find some but craigslist is a huge way to find them. Okay, so add me to your buyer's list then they can proactively bring you deals as they find them and you can say, yeah, you're nay depending on what kind of work the plaits needs. Well, you don't even have to reply. I mean, you literally don't, like I
just say it. Okay, I'm going to move on. But here's a big tip. If you are a wholesaler, me as an investor, I'm going to tell every single wholesaler if you're listening out there, do not take anybody off of your buyer's list if they have not even replied to you for a year or two years unless they tell you stop emailing me, keep emailing because I love getting them. I just don't reply. And so if they stop sending me, I won't see them anymore.
Unless I literally tell them, take me off your list, keep sending them because eventually there's going to be one that's a good fit. I'm going to buy it. Okay. Yeah, one of the meets all your criteria for cost of acquisition and monthly cash flow and everything else. And you've got your property management already in that city and you're ready to go. Yep. Are you actively building the empire at this point or you say, look, I've got my 30 places,
I'm good. I'm making the cash flow for my family or you trying to get to 100 doors or something. Have you ever played the game, Nobli? All the time as a kid. Yeah. Monopoly is fantastic. It's the greatest way to build wealth. And this is generational wealth. I'm literally able to pass this down to my kids. And obviously, being as frugal as I am, I'm raising them to not be brats and not be wealthy brats. We're delivering a 1250 square foot of house.
So four of us. So, you know, long story short, Monopoly is a great game because it teaches us the foundational principles. Real estate's been around forever, like literally forever. And people have made making money just as long as the real estate's been around. And so, what we do is we go from land in Monopoly to one house, then you build up to multiple houses. And then you put a hotel or basically got like an apartment complex. So now currently,
I'm blessed. My expenses are literally like $3,000 a month, but I make 15. So, I'm able to sock that away. And now what I'm doing is getting into multifamily, which is 50, 60, 70, 100 unit apartment complexes because I feel like it's time for me to move up to because what happens when you buy per unit or per door as opposed to the house entire house, you're buying a business model that makes more money. So you're making more money per door as opposed to per property.
So what I'm saying is now I am not in the building phase. I'm in the waiting phase for the next market turn because I don't need the money. It's not like I need to, when I only had like 10 properties, I'll say I got to buy the next one. I got to buy the next one. I was really going, oh, now I'm like I'm sitting back because I don't need it. And I'm just waiting for a correction so I can jump in because I get plenty of money saved up on the sidelines. Once there is a correction,
boom, I'm jumping into apartment complex. But single family homes, there are so many of them that make passive income that you can, you can continually be doing that right now. For your students, is there a cash on cash metric that you advise them to shoot for? So I'm definitely not a numbers person. My wife see it counten. So when you talk about numbers,
they just get lost in my head like I think I'm already said this, but I am not smart. I just figured out in, like let me back that up then because it's like, okay, $250 a month in positive cash flow is okay. But if you're spending a hundred grand out of your pocket to get it, it becomes less attractive. Does that make sense? Completely does. And I don't want to sound like a jerk, but I was eventually going to get that. So even though I'm not that smart, when you look at
the numbers, you can actually say like 8% 10% cash on cash return, all that sort of stuff. I understand it. It's just I don't like talking like that. What I like to talk is, or how I like to say is as remedial as possible is try to spend as little money as possible to make as much money every single month. So that's the basic principle. So if that translates out to 8%, 10% all that sort
of stuff, yeah, that works out great. But here's my thought. Remember when I said in the very beginning, the $300,000 house is you should not be buying right now because if they get cut in half, that's $150,000 is cut in half on top of that. How much money in a 20% down payment? That's $60,000. You got to put down. No, why not buy a, I don't know, $60,000 house. If it gets cut in half, you're only down 30,000. That's not that bad. You still make a passive income, but your down payments
only $12,000 if you only, if you need to put 20% down. Now, if you get seller financing, if you're able to use hard money, there's so many other ways to do it. But that's what I'm saying. Is the cash on cash return is principle as little money out of your pocket. I've had students buying properties with no money out of their pocket, giving somebody a loan, or they're getting
a loan from somebody, and they're giving that person interest and principal payments. They're literally, and they get a bank mortgage, they have a, somebody given the down payment, they're paying interest to both of those companies or the person and the company, the bank, but they're not doing it. It's the tenant. So it's as little money as possible for as much high of a return as possible.
All right, fair enough. Well, you have done a pretty good job of convincing skeptical or nick over here that maybe I ought to give a direct ownership in rental properties. Another look as for the last several years, my real estate exposure has been limited to some online REITs and a little kind of private lending setup and some publicly traded REITs. But hey, maybe, maybe this is another diversification play because during this recent market crash, those,
at least the publicly traded stuff got hammered. So in any case, diversification play, cash flow play, long term wealth building play, lots of advantages to the real estate game. Check Dustin's free course out over at master passive income.com slash free course. It'll expand on everything that we talked about here. And of course, check out the successfully unemployed podcast. Dustin, man, thank you so much for joining me. And let's wrap this thing up with your
number one tip for side hustle nation. My number one tip would have to be, and I did discuss it,
putting your value in yourself as opposed to letting somebody else give you your value. So whenever you talked to anybody, no matter what you're doing, if you're an investor, if you're an Amazon seller and that's your side hustle, whatever it might be, tell them that because what I found, the more people I tell that I'm an investor, the better my business does, because I have so many people wanting me to buy properties off them or renting out my properties,
or giving me money to invest because more people know that this is my business. So my number one tip is whatever you're doing in any side hustle, you need to put the value on whatever it is that you value that you want people to know. And if it's your side hustle, absolutely do that. And you can scale it by utilizing other people because now they know that that's your side hustle. Yeah, I like that. If you don't tell anybody, how's anybody going to know? So that's that's
really important stuff and this value in yourself, this identity habit. Dustin, enlightening stuff, really appreciate you stopping by the side hustle show and we'll catch up soon. All right, my top three takeaways from this call with Dustin. Number one is to build that portfolio. It's hard for me to look at rental property without seeing an expensive, illiquid liability that might be filled with people who think it's a good idea to flush paper
down the toilet. Others look at real estate through completely rose colored glasses. And it sounds like Dustin is somewhere in between those two spectrums, right? He recognizes the risks and costs associated, but has taken steps to limit his exposure and he's got a portfolio of cash flowing properties now that can absorb an unexpected expense or two or three. And this is actually
consistent with other investors we've had on the show. It's a bit of a volume game. You probably need multiple properties to make a meaningful income, but real estate has the advantage of leverage, meaning you can borrow money. In that sense, it can be a faster path to cash flow than other forms of investing as long as you're committed to building the business behind it and then building
that portfolio. So contrast that with my real estate strategy over the last several years, which has mostly been to buy REITs or real estate investment trusts, that definitely checks the diversification box, but not necessarily the leverage box. If I put in 20 grand, I can buy 20 grand worth of shares. Whereas if Dustin has 20 grand to invest, he can buy a couple of $50,000 properties or maybe even more with creative financing. Let's take point number one for me is recognize
it's a bit of a volume game and build up that portfolio. Take away number two is to mind your margins. Dustin recommended starting with an area of the country that looks compelling based on broad market data and then finding several property managers locally to interview, but businesses need profit to survive and to whether any downturns. Like if you're skating by on narrow margins when times are good or having a little bit of a business lifestyle creeps starting to live up
to your means, right? All of a sudden you're in a risky position if unexpected expenses come up or you have a vacancy and this is true in online business too. I've lost several affiliate partnerships this spring and I've had others cut back, but because I run really lean, it isn't impacting my ability to make ends meet and this is true in life in general. Consider your personal profitability. This is the single most important metric on your path to financial independence.
From every dollar that you earn, how much do you really keep after all your expenses? The average for the US at least is like something like 5%, but I'm confident that you can do better than that. Mind your margins and real estate in business and life. That's takeaway number two for me. And takeaway number three is to make it your identity. I think this may have been the most important thing that Dustin said in this call when he decided to start calling himself a real estate
investor, even if the income wasn't there yet. That's something that we can all apply. And I genuinely believe if we can convince ourselves of this new identity supporting actions naturally follow. I'm an author like I'm a podcaster or I'm an Amazon ads specialist or I'm a vegan athlete. I'm at least two of those things, but like Derek Deppker said in our episode on willpower, actions often follow identity. So if you can convince yourself that you have this identity actions tend to
follow. So it was really powerful for Dustin to say he was a real estate investor even before he really probably felt it deep down because that drove his actions from that point forward. That's takeaway number three for me to make it your identity. Note some links for this episode along with the free PDF highlight reel of our conversation are at side hustle nation.com slash
mp i for master passive income. Remember you can find Dustin over at master passive income.com and if you're in the US and text Dustin tips to 3 3 4 4 4 I can send that highlight reel right to your inbox. That's Dustin tips to 3 3 4 4 4. That is it for me. Thank you so much for tuning in. Until next time let's go out there and make something happen and I'll catch you in the next edition of the side hustle show where you'll meet the listener who learned a new skill started
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