PODCAST

Alternative Wholesaling

Mitch Stephen|By January 5, 2017

Episode 44:

Matt Theriault is a USMC “Desert Storm” Veteran who enjoyed 15 successful years in the music business as a record producer and label owner. When the digital download killed the record store, he found virtually everything that he had built become obsolete in a matter of months. The demise of his music business was swift and unforgiving to the point that Matt was forced to start life, personally and professionally, from square one at the age of 34. The transition from a 7-figure year to $7 an hour bagging groceries is a humbling one to say the least.

When the most unlikely of mentors, the grocery store manager, shared with Matt the wisdom “Real estate is the final frontier where the average person has a legitimate shoe at creating real wealth,” he embraced it, ran with it and hasn’t looked back.

Theriault, now an accomplished real estate investor and coach has built a cash flowing real estate portfolio of 100+ units over the last 10 years, is enjoying his financial independence, continues to build his portfolio and has discovered a new passion for creating systems and showing others how to replicate his results.

You will find that his approach to real estate investing is conservative, simple, to the point and efficient. Matt credits his success to performing as much, if not more, due diligence on his real estate team as he does the market and properties themselves.

What you’ll learn about in this episode:

Matt’s story of how he started his life over
Why you can’t wait for someone to rescue you
Why where you are is exactly where you chose to be — and why you can always choose somewhere else
Why going to college isn’t always the best avenue for learning anymore (at least for business)
Alternative wholesaling: how this technique can help you to achieve financial freedom
Moving at the speed of instruction
The countless people that Matt has helped gain financial freedom with real estate
Why you shouldn’t use their own money
How Matt helps people find deals in his program
Working with people when they bring you a deal that isn’t your specialty

Resources:

Transcript:

Mitch Stephen: This is Mitch, and welcome to the Real Estate Investor Summit Podcast. I am your all-knowing and wonderful host as always, gracious, smiling, laughing, and teaching you how to make money. I have Matt Theriault on the line, but first let’s give a little time to our sponsors. We’ll be right back.

Our sponsor of today’s show, Fund And Grow. My friends at Fund and Grow, Mike Banks and Ari Page are doing a fine job helping my students find funding for their deals. So I want you to go to 1000houses.com/grow and listen to how they’re getting my students zero percent interest money and/or very, very affordable bank lines of credit.

Now we want to remind you that yours truly has interviewed Mike and Ari personally on this podcast so you might want to go back and catch that. Here’s the link to it: https://1000houses.com/private-funding-sources-mike-and-ari/

But I also want to tell you that to date 60 of my students have raised a combined six million dollars in credit that is tailor made for the creative real estate business that we’ve been talking about.

Don’t have good credit? Well let me tell you about that. I have another 20 or 30 students that are working on their credit and my friends at Fund and Grow can help you with that as well. So I want you to go to 1000houses.com/grow and check it out. The right funding source can change everything. There you have it.

Thank you Fund and Grow for sponsoring today’s show.

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Mitch Stephen: All right. Let me tell you a little bit about Matt Theriault. He is a USMC, a United States Marine Corp Desert Storm veteran who enjoyed 15 years in the music business as a recording producer and label owner until the digital age came and just ruined everything he built. He went from doing well to doing zero overnight.

The demise of his music business was swift and very unforgiving to the point that Matt was forced to start over his personal life and his financial life from zero at age 34. So if anyone’s been through a transition like that, you know how tough it is. One of the most unlikely mentors of all, a grocery store manager turned Matt on to the power of real estate. And told him that real estate is a final frontier where the average person has a legitimate chance to create legitimate wealth. And so he embraced that, and he started looking at it.

Today, Matt has over 100 plus units and in the last ten years he’s built substantial cashflow machine. He is financially independent and continues to build his portfolio. And has discovered his new passion for creating systems and showing others how to replicate his results. Systems are really important, guys unless you want to have a J.O.B. and work at this the rest of your life, you’ve got to have systems.

So I think you’re going to find that Matt’s approach to real estate investing is very conservative. I think you’ll find it to be simple and to the point, and very efficient which is why he’s on the show. This man knows his stuff. So without any further ado, how are you, Matt Theriault?

Matt Theriault: I am fantastic, Mitch. Thanks for having me. Yep congrats on the success of your new show. This is awesome.

Mitch Stephen: See, we’re doing really good. We’re gaining new ears every day and most of it’s because I have really great people on the show like yourself. So talk to me just a little bit about how dark that place was, when at 34 you thought you had it going on and then all of the sudden you kind of went the way of the dinosaur. And you couldn’t get any air and you couldn’t get any light and you had to move on.

Matt Theriault: Yeah. Wow, you’re talking like you were there.

Mitch Stephen: I’ve been there. I have been there, brother. I know what you’re talking about. I was just a different dinosaur.

Matt Theriault: Right. Yeah, I was in the music business. I had a small, little record label. I had major label distribution. We were doing very well for ourselves. Each year was better than the previous, and I mean we had a really nice formula. We had a really nice system for releasing the small little records. They’d just sell 30-40,000 units each month. And we’d have a new release each month. And so all through my late 20s/early 30s it was seven figure years. Made a couple hundred thousand bucks a month. It was just a life.

And then, one month, I noticed specifically, “uh oh, the formula didn’t work.” Then the next month the formula worked a little less so we threw some more money at it, and it worked a little less so we threw more money at it. Then it worked even less and it just ran the whole thing into the ground. And at the time we had absolutely no idea what was going on. In hindsight though it’s crystal clear. It was the advent of the digital download. How the consumer consumes music now. And it turned everything upside down overnight.

I found myself bankrupt and divorced all within essentially a six month period. At that time the music industry was laying off tens of thousands of people. That’s not an exaggeration, it was tens of thousands of people. Both Sony did it, and then Universal music did it twice. There was tens of thousands of people out there looking for work. And there was very little demand for unemployed music entrepreneurs. After going through insurance and multi-level marketing, and looking at car sales and just trying to do whatever I could to make ends meet and be able to feed myself. I ended up bagging groceries. That’s kind of where I ended up. I was just like, “okay let me sit down here and rest for a second.” At 34 years old, bagging groceries with sixteen year olds and taking your lunch breaks with them. That’s a pretty humbling experience when just, eight months before you were having six figures a month was your normal income. And now I’m making seven dollars an hour.

I was pretty bitter. I wasn’t a fun person to be around. I blamed each and every other person that I could possibly blame other than myself. I blamed everything. I blamed the system. It was just completely unfair. After about six months of that I kind of woke up and was, “wow nobody’s coming along to save me.” Because up to that point, life was pretty darn easy. I had great relationships in the music business and it was a business of favors. It was a business of networks. Right now my network was kids that were coming to work after they got out of high school. That wasn’t a very powerful network at least compared to what I was used to.

So that was pretty dark and I remember the one day when I was sitting there bagging groceries and my ex-girlfriend from high school came through my line. I’m sitting there. I had to look her right in the face. That was probably the most humiliating, humbling, terrible experience of my life. I never forget that. That’s really what keeps me driving and keeps me going today is I never want to go back there.

Mitch Stephen: Yeah, I think one of the biggest things that you said in that story, Matt, was that you were blaming everyone else. And no one was coming to rescue you. When did you finally get the insight that you needed to take personal responsibility for what happened?

Matt Theriault: It was a day where they were short, the grocery store was really busy. They were short on checkout clerks and so they needed someone to fill in. I was able to fill in that day. I got to scan the groceries instead of bag the groceries. I remember a lady came through the checkout line, a very typical yuppie soccer mom. I mean she was in the perfect little workout outfit like she just got back from tennis practice or something. She had her five hundred dollar stroller. She had the kid in there and she was on the phone. She was too busy for me. And when I told her the total for her groceries, she opens up her wallet and out falls her ATM receipt.

I remember that ATM receipt so vividly and I couldn’t help but sneak a peek. I looked at the balance and she had like $256,000 in that account that she was about to pay with. I just looked at that and I was like, “I remember.” That number was really significant to me, because I remember when that number would hit my bank account. That’s what triggered a transfer from my bank account. And I was like, “wow, it’s been almost a year since I’ve seen that number in my bank account. And if I continue to do what I’m doing right now I will never, ever see that amount again. I’ve been here for six months. This is where I’m going to be. This is it.”

I even found myself falling into small conversations and like, “which wine am I going to take home tonight? I can’t afford that fifteen dollar bottle. I’m going to have to do with a nine dollar bottle.” I just found myself in these weird conversations that were so unfamiliar to me, but I found myself sinking into this new life, and this new environment for myself. I’m like, “wow, I’ve got to get myself out of here.” I remember dismissing myself from my job and I walked out to the parking lot and I just put my head on the steering wheel. I started crying. I was just like, “Lord, send me a signal. I need help. I am so much better than this. I know this isn’t what you had planned for me.” After I got all those tears out, I came walking back in to resume my shift and the grocery store manager saw me walk in. He knew there was something wrong. Ironically, he was the same age as me. I’m bagging groceries at 34, he was managing the store at 34.

He put his arm around me and he said, “Matt, what’s up?” And I was just like, kind of broke down again. He pulled me up to his office. I told him the whole story, basically what I just told you and he said, “Matt here. If you want your money back this is how you’re going to get it.” He reaches behind his desk and he pulls out this three ring binder. He pulled it out and he lays it out. He says, “this is my portfolio. I only have three more years here before I can pull my pension from the grocery store. While I’ve been here I’ve been able to buy these six apartment buildings. My cashflow right now already exceeds my paycheck. Real estate, really.” And that’s where the quote came from, “it’s the final frontier where the average person has a legitimate shot at creating real wealth.” And I was like, “wow did this just happen five minutes after I asked God for a sign?

I wouldn’t call myself a religious person, but that was just like … I could not help to recognize, “wow, this is my moment. If I want my money back, the type of money I had during the music business, this was going to be it. If more people have created wealth this way than any other investment vehicle or industry, then this must be the easiest way to do it. This is where my chances of creating it are the greatest.” And that’s what led me into real estate. That night I grabbed a bottle of wine. I went home, started Googling everything I could real estate and found an estranged aunt that I hadn’t talked to in probably 15 years. She was over just one city over and she had been the number one real estate agent there for 27 years. I had no idea, so I just fired off an email to her and in the morning she responded back. We had lunch that day and within 24 hours I was in getting my real estate license. I thought that’s where you were supposed to start.

If real estate is the final frontier where that wealth is, then you’ve got to get a real estate license, right? So I mean that just seemed logical for you.

Mitch Stephen: Wrong answer.

Matt Theriault: Yeah, totally. So, I figured that out the hard way after four years of working as an agent. I was like, “wow, if this is where all the wealth is at, I think I’m sitting on the wrong side of the desk.” I had a couple clients that were very successful investors and they were the best clients I had. While they’re out having fun on the weekend I’m holding their houses open.

Mitch Stephen: Before you get too far down the road, I want to share with you. I don’t know. Some people have read maybe my first book, My Life In a Thousand Houses: Failing Forward to Financial Freedom. The lowest point I was in my life, I was doodling on my desk pad. You know the calendar that sits down on your desk? Your desk calendar, but it’s a really big one. I was doodling on that, and I was writing down exactly the number 45,000. I needed to make $45,000 and I would have extra money to save. I would be saving money because I had very low overhead. This is in the early 80s right? I had about a $2,000 overhead. I closed my eyes and I asked God. I said, “show me a way to make 45,000 bucks and I’ll do whatever it is. As long as it’s legal and I’m not selling my body.” I didn’t figure God would show me that path anyway, so. And then right after I finished that prayer …

Matt Theriault: Well that probably wouldn’t have been an option either, Mitch.

Mitch Stephen: Yeah, probably.

Matt Theriault: I don’t know who would pay you for it.

Mitch Stephen: Yeah, I could get $1.50. And then I circled it, circled it, circled it in doodle fashion. Round and round and round. Then I got up and went to coffee room. Then over the paging system said, “Mitch Stephen: Line one.” I picked it up, and one of my friends said, “I heard things aren’t going too good for you.” I just lost the love of my life. I was sucking at car sales. I couldn’t sell a car to save my life. I was on the showroom floor where this is all happening. I was just going broke and I was heartbroken. The whole thing was bad. I’ve never been in a worse position ever. Got that phone call and he says, “I heard things aren’t going very good.” And I says, “yeah, I couldn’t sell water to a man on fire. I couldn’t sell it to him.” He says, “well you want to get out of town and make some money?” And I says, “I’d love to what are we doing?”

And he told me about this job that I had to be on the road every day for 90 days in a different hotel every night. It wasn’t me, it was electricians. It was wires. It was tools. It was tool pouches. It was everything I’ve never touched and that I don’t know anything about. I said, “I don’t know Steve. I don’t know anything like this. What can a guy make?” He says, “you can make between 40 and $50,000 maybe a little bit more.” So I wrote down 40-50 on the back of one of my business cards. I said, “okay well let me think about it.” I went back and I sat down in that chair right in front of that pad where I was doodling and I flicked that card on to the desk like a blackjack dealer. I just flicked it on the desk. It landed backside up where I’d written 40-50,000. I had just asked God for 45 and there it was. It was right exactly the number I asked for. He said between 40 and 50,000. The thing about that job was it didn’t have any overhead. They paid for your car, your phone, your hotel room and your food.

You saved the 45,000, all of it if you had any discipline. So I had that moment too. I’m not a religious zealot, but at that point I couldn’t say no. I had asked God for a number and he gave me exactly the number within 15 minutes. Within 15 minutes the exact number and so I said, “I have to go.” I picked up the phone and I said, “okay, I’m taking the job. What do you do?” He goes, “when can you leave?” I said, “how about today?” He said, “I thought you were going to do this. I’ve already been looking at the deals. There’s a plane leaving in four hours.” I said, “I’ll take it what’s the airline?” He said, “Delta.” I said, “what’s the flight number?” He gave me the flight number. I said, “okay I’ll be there. I’ll be there and I’m going. I’ll be on that plane.” He goes, “oh well wait a minute. Do you want to know where it’s going?” I said, “doesn’t matter, don’t matter where it’s going.” I found out where it was going when I got there. When your prayers get answered …

I thought to recant my prayer. I thought to say, “I really meant in town, God. I really meant where I didn’t have to travel.” But I wasn’t smart enough to put that in my prayer, so I didn’t get that. But I got what I asked for. I explicitly said, “I’ll do whatever you tell me to do.” Well he told me. And so I went on that journey and my whole life changed on that journey. I was on the road and I knew that I couldn’t stay on that road forever. I had a lot of downtime in that car seat. I listened to everybody in real estate and self motivation and all of that stuff. I found my life in real estate in that van going to every mall in the United States many times.

I thought I would put out … I noticed the similarity, man. I don’t know if we’ll even get to what we really plan to talk to. This is good stuff because there’s a lot of people out there hurting. I see it. Do you see it?

Matt Theriault: Oh, I see it daily. I’ve got a podcast of my own and I have a lot of interaction and exchange a lot of correspondence with my audience. Some of the desperate questions come in from that exchange or that relationship. They’re heartbreaking. I get it because I was there.

Mitch Stephen: Well maybe this is a topic we’re supposed to talk about today. Not the one that we thought. What do you tell people who are down and out that have got their back against the wall? They’ve got a glass ceiling or a ceiling just because they don’t have a college degree? Or they weren’t the brightest guy in the classroom? What do you tell that guy? I know what I would tell him. What do you tell him?

Matt Theriault: Well, I was told something awhile ago. I didn’t really believe it or … Whatever you have right now in your life is a result of all the decisions you’ve made up to this point. If you don’t like what you have in your life there’s no one to blame out there but yourself. You have to take responsibility for that. You are here because of the decisions that you made. You had choices along the way and you chose to be here.

When I first heard that they were just words, but then when it really sank in I thought about what I have and how I made the decisions to be here. It was very … It was a little scary. Like, “oh my god, I did cause this.” But then in an instant it was very much empowering as well. Like, “wow, if I chose this, then what if I chose something else? Can I really control it? Can I really take responsibility and manipulate that outcome.”

Mitch Stephen: That’s a cool thought. Yeah if you choose something else it … I mean if I choose this and this is where I go, what if I make different choices? I’ll be responsible for some other outcome. Don’t know exactly what it’s going to be right? But hopefully you’ve got an inkling of where …

Matt Theriault: And then the other aspect of that, and it’s something that happened around the same time. Not back to back, day to day, but around the same time where, I guess when I got into the music business I had started to put on weight just because I could go out and eat and drink every night. So I’ve always had this conversation about how to lose weight, or I want to lose weight. I went through this whole yo-yo thing and I try, and I try, and I try, and I try. I remember complaining to somebody who actually was one of my real estate mentors that I was complaining to this about at the time. I said, “I’ve just got to lose weight.” He said, “Matt, there’s only one reason you haven’t lost weight.”

And this is something I’m totally obsessed with. He said, “you haven’t lost weight because it’s just not that important to you.” I was so offended. I was like, “how can you say this isn’t important to me? Because this is all I do. I make my food. I exercise and I do this and I do that. How can you say, ‘it’s just not important enough to you’?” What I took from that lesson was, whatever you have in your life that you say that you want. Probably a lot of people that we’re talking to right now are looking for deals. They’re looking for wealth or money or riches in real estate. If you don’t have it, consider it’s just not that important to you. What that means is when you’re faced with a decision to watch your TV show or dial FSBOs, or whatever your lead generation of choice is, and you choose the TV, just consider that wealth isn’t as important to you at that moment.

Being comfortable and relaxing and watching TV and wasting time. That’s more important to you, because you chose it. A great way to look at that is, we all remember that first time we go out on a date, right? We’ve met that hot new girl, the hot new guy, and you’re getting ready and you know you’ve got this date coming up. You’re busy. You’re still working your full-time job. You’ve still got everything else you’ve got going on in your life. You know what, somehow you manage to get your clothes to dry cleaner. Somehow you manage to go get your hair cut. Somehow you manage to go to the ATM and pull out cash. And you manage to create reservations. You got your car washed and you make sure everything was right. You got the flowers. You got the candy. If you were able to do all of this stuff, because that date was important to you.

I don’t think anyone is really going to get what they want until they get to the point that what they think they want aligns with what actually is what they want. Does that makes sense?

Mitch Stephen: Yeah. I think one of the turning point in my life was when I read a book called Self-Made in America. Which is along the lines of what you’re talking about. It was written by John McCormick. I don’t think it’s any longer in print, but you could probably find it somewhere. Self-Made in America by John McCormick and he posed a question, “how is it that immigrants can come to this country and don’t even know the language much less the culture. They end up being financially independent and own their own businesses and are financially free within six, seven, eight, nine, ten years? When we Americans live at the corner of prosperity and opportunity, right on the corner and we can’t figure it out our entire lives?” The answer was, those … Number one, those immigrants recognized that this country was the perfect atmosphere to live all their dreams. It had all the infrastructure. It had law. It had a reasonable state of justice. They saw the United States as a place of milk and honey.

They could see the opportunity where I think we’re raised so close to it that we don’t see it. We take it for granted. Would you agree that most Americans take it for granted where we live?

Matt Theriault: Absolutely. One of my schoolteachers when I was in elementary school, she was an immigrant. She was born in a third world country. I remember this. I was maybe sixth or seventh grade and I’ll always remember this conversation. She had said that what immigrants have to do, or what people outside of this country have to do … For example where she was from just to be able to get an envelope, get a piece of paper, get a pencil to write a letter. Then to put a stamp on that letter and then get it to a post office, it takes more to do that than what it takes to become wealthy in this country from her perspective.

Mitch Stephen: Well, the second thing that was pointed out in the book was, that these immigrants are willing to sacrifice at a hugely higher level than we are able to do. One of the immigrants I remember from Vietnam, they went and got a job at the food court in the doughnut and coffee shop. At the end of the day they’d roll the doors down and they’d get real quiet because they didn’t leave. As the security guard made his last rounds and locked everything up, they laid down on the floor on their rice mats and just were quiet for awhile and rested. Then after they were sure everyone was gone they got up and they drank the old coffee, ate the old doughnuts and lived, took their shower in the sink with towels and bathed. They lived that way until they owned the store.

Do you know any Americans that would do that? I don’t’ know any.

Matt Theriault: No, and I think a marriage between that story and the one I just shared is, when they get here they’ve already been doing that in their country. So it’s not as much of a sacrifice. We perceive it as a huge sacrifice, but they have already flexed that sacrifice muscle and they’ve been working that muscle for life. When they come here and exercise that exact same muscle it wields so much more power than we can that haven’t exercised that muscle before.

Mitch Stephen: No doubt. They were used to sleeping on the floor like that. That wasn’t a hardship. Sleeping on the floor wasn’t a hardship. Not having anything wasn’t a hardship for them, because they didn’t have anything where they were at. They had dirt floors. As a matter of fact this was a step up, because where they probably slept had dirt floors. You know?

Matt Theriault: Right.

Mitch Stephen: And this had concrete which they might have preferred the dirt. I supposed it’s warmer. Anyways, I decided to start looking at myself like an immigrant. That I’m going to be an immigrant. No one owes me anything. I don’t know anything. I’m dumber than a box of rocks, and I need to look around this world like a person who’s never had anything and see how much abundance there is and start getting some of it. Figure out how to get it.

I also set aside what my peers were going to think of me. I told myself, “I don’t care what they think of me.” I was almost glad when I went on the road that I was away from all my friends. I didn’t want them to see me. I was sleeping in a van half the time. I didn’t want them to see me. I didn’t want my parents to see me. I had made up my mind, “I’m going to go as far back or as low as I have to go to start where I can handle it. If that means in a little bitty shack somewhere or in a van somewhere. If that’s all I can handle, then that’s where I’m going to go. I’m going to work my way up from there. I’m never taking a step backwards again. Never, ever. I’m never going backwards again. If I take a step, it’ll be a solid step and I’m going to hold it. I’m going to hold it and hold it. Until I can take another step.”

I decided not to go backwards, and I also decided that, I kind of figured that no woman would ever put up with that or would have anything to do with that. Lo and behold I found someone to sleep on the floor with me and it’s been 27 years. She’s quite a wealthy lady right now.

I kept thinking, “she’s going to leave any day now. This floor is hard. I mean she’s bound to go.” She never left. It’s been 27 years.

Matt Theriault: That’s a great story, great story.

Mitch Stephen: You know what’s really cool about this day and age is the internet. Man, I’m starting to really doubt the validity of college degrees these days. Not if you want to be a doctor or a lawyer, I kind of understand it. Or a scientist or something. I mean if you just want a business degree. I don’t know that going to college is the best thing. What do you say about that?

Matt Theriault: Shoot. I totally concur. I just signed on a new coaching client who went through and had his four year degree, came out of school and was making not much more than what his buddies were making that did not get the college degree. He went back to get his MBA and he only got a five percent raise at that same job. So yeah, I don’t think the college degree equates to financial success or financial freedom like it might have once. I think we live in a totally different world. I think the industry is changing. The way we work is changing.

Mitch Stephen: The cost of that degree is changing.

Matt Theriault: Yeah, that’s for sure. One thing that really opened my eyes, I saw a documentary about the textbook industry. On how that is just this giant racket of people that that’s where all the money is really made in the college university. See I went to college too because I’m calling it a college university. That we put all these people in the school and then we sell them these textbooks that are so expensive. Then we force them to buy new ones every single year, because they’ve got to have the new edition for the new class. It’s just that racket that I saw this show run it down. It’s a business. It’s not a …

Mitch Stephen: A good history book we should still be buying the same one from ten years ago, because history didn’t change.

Matt Theriault: Right, but there is a new edition every single year. And now you have to buy the new $130 history book, exactly.

Mitch Stephen: Imagine how much money. What does it take to do a college degree these days? 150,000 at least? Or 200,000 or what? I don’t even know.

Matt Theriault: I have a friend who just graduated from USC and it was about $225,000 for the four years.

Mitch Stephen: Could you imagine if you did $225,000 worth of mentoring courses in real estate? I don’t think you could spend that much. For one you wouldn’t get too far down the road and you’d be making money from the knowledge. You know what I mean? Instead of have to wait until you spend it all before you go out and make any money. You could be on the job training. You could go out and make yourself an extra … You might have an excess amount of money in your bank account after a four year internship with a great mentor. You’d probably make more than you spent. That would be the ideal, right?

Matt Theriault: Yep, and I see all the balkers out there talking about the price, the exorbitant price of real estate investing education. Two perspectives on what we just talked about. So you think you’re being scammed by $100,000 real estate education but spending $200,000 on getting a business degree that’s going to allow you to make $50/60,000 a year that’s a good investment.

The other side of that is if once you get out into the real world if you’re not educated, losing a hundred grand is a really easy thing to do so you can choose your education. You can be proactive or you can be reactive about it.

Mitch Stephen: Yeah that street’s going to get it’s money if you don’t get some education, right? I call it the street. The street’s going to get your money. The street will kick you up and down.

It doesn’t have to be just real estate, Matt. There’s guys making $150,000. I know my air conditioner man makes $200,000 a year. I know he does. I mean if he makes a dime, I bet he makes $200,000 a year net. You could go to one of those schools. You could go to heating & air conditioning. There’s places where you get a little education. You learn what you’re doing, and you open up your little shop. Or you get your own gig going.

I’d prefer the real estate business just because of a lot of different reasons. I think for a lot of people, the tradition of wanting your kids to have college degrees. Probably some parents are going to get really mad at me when their kids hear this.

I don’t think it’s for everybody. Certainly wasn’t for me. You went to college, right? Or you didn’t?

Matt Theriault: I did a semester and a half and then, no. I did not.

Mitch Stephen: Oh I beat you by half a semester. I did two semesters.

Matt Theriault: Did you? Yeah.

Mitch Stephen: You know what? One of the turning points there was, I found out that my professor, this was in the 80s, I found out my professor made $60,000 a year. I said, “I’m not listening to him. I’m not listening to a guy that makes $60,000 a year.” I’d listen to him, but I don’t want to have to pay to listen to him. Come on, man. If we’re going to pay to listen to somebody. They better be making a million dollars at least and that was in the 80s. Today it’s more like two million bucks or three million bucks. I don’t know how the erosion’s been.

I think this is a great topic. It’s a topic that no one else is wanting to talk about. We didn’t plan to talk about this topic. I think number one, if your down and you’re out, you’ve got to change what you’re doing or you’re going to keep getting the same results. Matt brought that up. You’ve got to change the decisions you’re making. You’ve got to change everything.

Then I think you’ve got to take personal responsibility for everything that’s happened in your life before. Then you’ve got to start taking responsibility for everything that’s about to happen in the future. Then look in the mirror. There’s no one else to blame even if you get ripped off. You should have known to lock the door. You shouldn’t have had that stuff sitting out. You shouldn’t have told people you had that stuff.

My daughter had a safe broken into because it was sitting in the front living room. I said, “you know the only thing a safe makes people want to do is get inside it.” The perfect safe is the one that no one knows you have. As soon as you start showing a safe, then you can bet it’s going to get drilled by somebody sometime.

Get out there and then you’ve got to change your education level. Become an expert at something, anything. I mean an expert.

I’m going to mess this up a little bit, but don’t split hairs with me. Just understand the theory. If you were to take a topic. Let’s just take the civil war. And you threw all the books about the civil war in your backyard in a big, heaping pile. Then every morning you just ran out the back door and you dove into the middle of that pile. While you’re in that pile of books, you grab any book. You open it to any page, and you went down on the porch. You sat down and you read for a half hour. Any page in any book. Start reading for a half hour. And you did that every day for a year, if you had any retention at all you would be classified as one of the world’s authorities on the Civil War in a year.

Just by reading, taking it in and absorbing it. Pick a subject that you want to become an expert in. If you want to become an expert at real estate, then pick that subject. You probably don’t want to go too long until you pick a specific strategy and start drilling down. At that point when you’re sure, find a mentor who’s gone all the way with that strategy. Try to hook your horse to that carriage. That would be my advice. Have you got anything to add to that?

Matt Theriault: No, I think that’s all really great advice. Probably the best words of advice, when I got started in real estate was travel as far as you can see. When you get there you’ll see further. Meaning that you don’t need to know it all to take that first step. That’s what you’re talking about is, get educated and take action on what you’ve learned. The next day read that 30 minutes of the book, then take action on what you’ve learned. What you’ll find is that what seems like such a mystery, and it’s such a puzzle right, say step four is such a puzzle. How would I every do that? How am I ever going to raise a million dollars? Because you don’t know how you’re going to do that, you don’t even take step one. What you’ll find when you take step one, two, and three. When you get to step four, if that step four is to raise a million dollars for you. Because you’ve taken steps one, two, and three, all of the sudden step four is actually rather easy. It’s not the mystery that it was before you even took step one.

We have a saying over in our world of Epic Real Estate is, moving at the speed of instruction. So, don’t wait to learn it all before …

Mitch Stephen: Moving at the speed of instruction.

Matt Theriault: Exactly. Don’t wait to know it all before you start taking those steps. You’re going to find that the steps that seem so blurry and so unclear to you right now won’t be once you take that first step. The other saying is, ‘you can’t steer a parked car’. So you’ve got to step on the gas a little bit before you can actually steer that car in the direction that you want it to go.

Mitch Stephen: Man, that’s good stuff. Let’s get down to where the rubber meets the road now that we’re on that analogy. How many people have you witnessed or taken personally from zero to, at minimum, a great standard of living? How many people have you seen do that? Or done it with yourself.

Matt Theriault: There’s a bunch. It’s countless really. The reason I say that inside of my formal education, I’ve got almost 900 students. I’ve got probably 40 or 50 really awesome success stories that I know about. Because of the podcast, we’re approaching five million downloads now. I get an email at least once a week from someone that has never invested a dime with me saying how the podcast has impacted their life. It’s changed them. They’ve quit their job. They’ve done this. I wish there was a way to actually measure that, but it’s countless. I’m happy to say it’s countless. If I could count them … If I said, “hey, Mitch. Four. I took four from zero to total wealth.” That would be a failure in my book. The fact that I can’t count them is a testimony to, real estate works. It’s not as difficult as people think it is. It’s very simple.

It takes some fortitude. It takes some commitment. The process is actually rather simple. If you stick to it I think anybody is capable. Shoot, Mitch. If you and I can do it …

Mitch Stephen: We’re pretty simple guys.

Matt Theriault: Yeah, as far as our vocabulary and storytelling has been on this episode we’re a testament that this thing works, right?

Mitch Stephen: Yeah, yeah, and so what do you say to people that say, “well I just don’t have the money to be a real estate investor.”

Matt Theriault: I love that question. It’s not about the money. Even if you have money and you’re just getting started, I’m going to forbid you from using your money until you learn how to find a deal. What people do when they have money, they spend it. When people don’t have money, they find better deals. When you find better deals, all that money is going to appear for you. It’s going to show up. Find the deal, and the money will find you. Most people will not get that. That will not sink until the very first time it happens. Then, boom, it’s going to click. Don’t focus on money. Focus on your intellectual currency, not the actual currency that you have or don’t have. Focus on that first. Your number one skill as a real estate investor is finding deals. There is no shortage of money for good deals. The better deals you find, the better your reputation is going to be, the more money that’s going to attract to you. It’s going to result in referrals and just an abundance of money.

So focus on the deal first. This is what we were just talking about. That third step or fourth step, I don’t have any money. Well that step where you need money, that is the fourth step. You don’t need any money to take those first three steps. If you take those first three steps, that fourth step of where you find the money all of the sudden is so much easier and so much clearer. In fact it’ll fall right in your lap. I guarantee it.

Mitch Stephen: Yeah exactly, so step three is okay, you’ve papered up a great deal of $150,000 house that you’re buying for $75,000. You’ve done really good on step three, you’ve got it papered up. You’ve got 60 days to close. Now we’ve got to go find the money. All of the sudden it’s just not that hard. Who doesn’t want part of a deal that has $75,000 profit in it? There’s not anybody I know that has any brains at all that doesn’t want part of it? The question should be, “well what do I got to do to get part of it?” Everybody wants to know, “how do I get in on that?” And your answer at the time will be, “bring the money.” So you find someone who can do it. It’s a really easy thing for my lips to say and for the listeners’ ears to hear. is that you don’t need money to become successful in creative real estate investing. It is a difficult concept to own in your heart, right? It takes a little while to own the concept in your heart. Did you struggle with it for awhile? I did. I struggled with it for six years.

Matt Theriault: Yeah. Totally, shoot. When I was in the music business and I had six figures in my bank account of cash at all times, I didn’t even realize that I could afford to buy a house. That’s how ignorant I was to the concept of real estate. Then when I was as real estate agent for four years, that natural protocol is that you have to go talk to a lender. You have to get pre-qualified to make sure that you actually have the money or you’re going to have the money to close before you can go find a deal.

I came from that very small, ‘in the box’, thinking. Not until I got out, went and took that first educational program. They told me. Just go find a deal and bring it back here. We’ll take care of the rest. Just go out and get this thing under contract and bring it back here. When I did that and I got it under contract, I came back. There was people lined up. I only had to talk to three people before I found all of the money and the contractor that all wanted to partner on the deal.

I was like, “wow, I can go do this again, and again, and again. Here’s the thing that I really started to think back when I was a real estate agent. Whereas thinking you had to have the money before you could go shopping. No, it’s the other way around. That bank is not going to give you the money until you’ve identified the deal that’s going to meet their standards, that’s going to appraise. Even in the conventional world, it’s still the exact same thing. You still have to find the deal first. You still have to find the property first before anyone is ever going to give you the money.

Mitch Stephen: The other day, I think it was at the beginning of the month, I had 18 houses to close or 18 deals to close. The way it worked out was, my daughter calls me. She’s in a panic. She says, “hey, we’ve got 18 deals to close.” I said, “what’s the problem?” She said, “well, I’m a little bit worried about it.” I said, “well what are you worried about?” She said, “it’s $973,000.” I said, “Okay, so what’s the problem?” She said, “it’s $973,000.” I said, “you’re worried about if I can find all the money?” She said, “yeah, little bit.” I said, “okay, call the folks and tell them I’m going to be down there in an hour.”

I went down there on purpose to show the core group down there. I said, “all right, you’re in the office. Here how much money do we need? $973,000. All right give me the phone.” I called three people and I had the money. Because of a reputation and the deals all meet the same criteria.

They’re under 65% of value. I average 52% of the owner financed value. I average buying houses for 52% of what I can owner finance them for. I just had to let everybody know who was daddy down there still.

Matt Theriault: Mitch, I bet your conversation wasn’t, “hey can I borrow some money?” No it’s, “hey do you want a part of this deal?”

Mitch Stephen: I wasn’t begging for money. I was saying I was doing them a favor.

Matt Theriault: No, that’s what I’m saying. When people are looking for money they’re like, “who’s going to loan me the money?” Well you’re already starting off wrong in the first place because you’re asking for a loan. You’re asking to borrow. You’re asking for something. No, you need to transform your mindset, have that paradigm shift. Offer to give something. What you’re giving is a piece of this deal.

Mitch Stephen: I’ve got a part of a deal you’re going to want to get in on. This house is worth $150,000 and we’re picking it up for 75. This is a really protected position. I thought of you first, man. You want to do the same thing we’ve been doing last time? They say, “yeah”. I say, “I’ve got some more deals. I’ve got up to 970 … how much of it do you want?” They’re just like, “well I’ll do 300,000, send them over.” No one gives you a million dollars in your bank account. If someone wants to give out $500,000 you send them one deal at a time and they send the money over to the title company. Until you’ve spent about $500,000. No one hands you $500,000.

Here’s one I need a hundred on. Here’s one I need 75 on. Here’s one I need … and you work your way up until you get to where the person’s tapped or doesn’t want to do anymore. Then you still ask them, “hey you know anybody else that can help with this eight percent? Who else do you? Who can we help?” Then that’s when you get someone else, but it’s always like, “who can you help?” Not, “do you know someone else that wants to lend me money?” No, no, no, no, no. Like Matt said, “hey who else can we help? Who are your friends?”

I have so much private money from people that I had to start a hard money loan business to loan it to my competitors in town when they found deals before I did. I found if I leave my money with the people that made the money, they lose it. When they tell me they have some money I get it out one way or the other, so it’s out of … They can’t mess with it. I keep it safe. Do you have something like that? How’s your world work? I know you have more money than you can spend.

Matt Theriault: I had a similar problem to where I was opening up … I’d find somebody that wanted to give me money for the deals. We’d create a new LLC. We had to open up a new operating agreement. We’d have to open up new books. We’d have to set it up with a CPA and everything. After about seven or eight of those things, that was a very tiresome task. It got to the point where, “hey I’ve got some more money.” Or, “I’ve got a partner that wants to do this”. I was like, “no, I can’t do that right now.” It just became a bookkeeping nightmare and the protocols for making that happen. I didn’t enjoy it.

What I did was I transferred everything over into a fund structure. Where now when private money comes my way they can just buy shares of our company or shares of the fund. Then they can collectively benefit from the profits. We go ahead and invest in distressed property. Then we share the profit with our shareholders. That’s a little different structure than you probably do, but that’s how we do it.

Mitch Stephen: Yeah, you set it up like straight up and down business owners, stock really I guess is what it is, huh?

Matt Theriault: Yeah, it works very much like a stock. It’s just an off-market, off Wall Street private stock, yeah.

Mitch Stephen: So tell me a little bit what you do for your students. I’m going to give out a link here, it’s 1000houses.com/matt, matt all lowercase. That’s 1000houses.com/matt. Matt’s known for being compassionate and full of passion in helping his students achieve their goals. Tell us about your program, and what you do for students that come that want to learn the real estate business.

Matt Theriault: Sure, well there’s a lot of people out there that will teach you how to do deals. They’ll teach you how to invest in multi-family. They’ll teach you how to do storage units, or mobile home parks, even single families. There’s very few people that teach you how to find the deal. Regardless of which strategy you choose, whether you’re doing land, you’re doing notes, you’re doing multi-family, you still have to become very, very good at finding that deal first before you can even implement and practice that exit strategy or that investment strategy.

Inside of the Epic Pro Academy we have a heavy focus on finding deals. We’re up to 15 different, very creative ways. Probably five of them most people have heard of, but then there’s another 10 that I don’t know anybody else that’s talking about them. How we actually find deals. How we connect directly to the source of motivated sellers, people willing and able to sell you their property at a discount.

That’s where we focus. Once we have it under contract, now we get to decide what we want to do with it. Do you want to hold it? DO you want to quick flip it? Or wholesale is the common word these days. Or do you want to fix and flip it? Or do you want to lease option it? What do you want to do with it? Not until you get that property under contract do you actually have the benefit of executing that investment strategy of choice. We have a heavy emphasis on actually finding the deals. Then we go ahead and analyze that deal in four different ways to determine which way is going to be maximum amount of profit that is going to move you towards your financial goals the fastest.

It’s a little bit different approach than most people go about it. I think it’s the most efficient. What we were going to talk about today … What we had planned about talking about today is, “what do you do with every deal that comes your path?” When you start marketing for deals, and there’s a lot of different avenues to do that. Some of them are very expensive. Those deals that you bring in don’t match your exact exit strategy, do you just throw it away and go on to the next deal? No there’s money to be made on each and every one of those deals.

So that’s how we go ahead and we analyze those. We find those deals and then we analyze them for that. Then pick the exit strategy that’s going to give us the maximum profit.

Mitch Stephen: Okay, so let’s talk about this. Let’s say I’m a owner financed guy. I’m looking for the perfect house to owner finance. Then along comes a guy and he wants to sell an eight-plex. What do I do, Matt? What do I do? I’m not in the eight-plex business. Do I just? My inclination is, “I don’t know anything about eight-plexes or apartment complexes. I’m just going to walk. Are you going to get the cane out and going to drag me back onto the stage?”

Matt Theriault: Yeah, so Mitch why do you want to sell this eight-plex? Tell me about your situation. Why me, why now? Why are you calling me? That question right there will get down to their motivation. My next question after I listen to them, I’ve built a rapport. I’m like, “okay, that’s fantastic. I got it. Okay, that’s too bad. I see your situation. Now that we’re talking and you shared with me what’s going on, what exactly do you want to have happen?” And then I just shut up and I wait for them to give the answer.

They’re going to tell me, “I need to sell it. I need to sell it fast. I want …” whatever it may be. Whatever they want to have happen, they’re going to tell me. I don’t want to go in assuming that I know what they want to do. Once they tell me what they want to have happen, then I go out and try to make that happen for them.

The next question will be, “if I could make that happen, how soon would you be ready to sell?”

Mitch Stephen: Yeah, but at this point in the conversation, Matt, what they want to have happen it’s always, “well I want to sell this and I want to make some money.” That’s not really what they want to have happen. They want the money for a reason. There’s where you figure out where their ‘why’ is. Okay when you get the money, what are you going to do? Now I know what they want. You know what I mean? Everybody’s trying to sell the place for the money. Everyone thinks well they want the money.

Well, yeah, they want the money. What do they want the money for? You’ve got to figure out what their ‘why’ is so you can sell to them the best you can. You have to know what the end result is for the money. “why do you want the money?” “well, I want to go on a vacation”, or “I want a car”, or “I’ve got to get my kid out of jail.” Whatever it is, you need to find out. Some of those things have really big deadlines like, “I need to get my kid out of jail.” Or “pay child support before the twelfth of the month or I’m going to prison for ten years because I’m $20,000 behind on child support.”

Well okay, now we’ve got a different kind of motivation.

Matt Theriault: No, totally. I think we’re saying the same thing. We just have a little bit different of a sequence of how we go about it. Absolutely, you’ve got to get to the motivation. The foundation of every deal lies within that seller’s motivation to sell. You’ve got to get there. That’s where we go with that very first question. “why me? Why now? Tell me why you’re calling me. How can I help? There’s a reason you called me, what can we do about it?” That leads us down to that motivation.

Mitch Stephen: I’m not really in the apartment business, but maybe we just get the numbers. Sometimes when you look at numbers, you might not know a lot about apartments, but you’re looking at apartment complex. You’re looking at the cashflow of this apartment complex and you go, “man, that seems like a pretty good number.”

My point was, if you’re not in the apartment business, maybe you just find the people in your community that are and get as much information as you can from the buyer and the seller. You don’t have to take this apartment complex down. Just get in the middle and pass it on to someone and take your percentage.

If I’d have known not to walk on a lot of stuff earlier. I figured it out. I’d be a lot better off today. I, over the years, have made it a point now when someone says, “well I do apartments.” I used to go, “okay, that’s great.” I’d leave. I said, “let me have your name and number. I’m putting you in my phone. This guy does apartments.” I put a tag on it. They keyword is apartments. When I’m looking for someone to buy an apartment complex, I can now put the word apartment in my phone. There’s like 15 guys that come up. One of them is going to buy it if it’s any good at all one of them will buy it.

That’s where I was going with my, “don’t let these leads that are not in your niche pass you up.” When you’re talking to people in these real estate businesses and they’re in different niches than you, write their name and phone number down. Put the keyword of their niche in there whether it’s subject two or apartment complexes or mini-storage, or industrial parks, or mobile home parks, or whatever it is. Put the keyword in there. You’ll be surprised how fast your network gets up there. You can capitalize on just about anything that looks interesting that is truly a deal.

How long do you stay with your students when you’re teaching them this stuff, Matt?

Matt Theriault: As long as they need my help, really. I’ll stay with them indefinitely. I’ve got a few guys that have been working with us for three years. They’re really good friends. They come over for holidays. They come over for Super Bowl. We’ve become really close and we still work together. In fact I’ve got a call right after we hang up here with one of them. Some people they come in and it clicks right away for them in six to eight weeks. Boom, they’re off and running. I’ve got one guy who I think is actually to the point where I think he makes more money than me now.

Mitch Stephen: That’s wonderful. That’s wonderful.

Matt Theriault: It is. It runs the gamut, so there’s no set or defined time that I spend with people. It’s as long as they need the help.

Mitch Stephen: Yeah, yeah. I agree. I become friends with everybody too.

I know that you’ve got a hard deadline. You’ve got to talk to some folks. You guys, if you want to learn more about Matt Theriault and his programs to lead you to success, go to 1000houses.com/matt. Matt all lowercase. That’ll get you there.

Matt, I want to thank you for being on the call. I’m sorry we got a little sidetracked on what we wanted to talk about. We were going to talk about alternative wholesaling. We touched at it here on the end. Not letting any lead go. Every lead has to pay if it’s possible. Follow that link. Matt’s going to be able to post anything he wants up there. I’m sure we’ll have some giveaway stuff or some stuff that you’ll find very interesting. He’ll also have dates of events or whatever he’s doing. It’ll all be there at the show notes, so just follow that link. 1000houses.com/matt.

Matt, I appreciate your time.

Matt Theriault: You bet, Mitch. It was a pleasure again. Take care.

Mitch Stephen: All right, thank you. This is Mitch and we’re out of here.

You’ve been listening to the owner financing master, Mitch ‘Be the Bank’ Stephen on the Real Estate Investor Summit Podcast. Let us now blatantly, without apology drive you towards financial freedom by offering you a whole bunch of free stuff. Go to 1000Houses.com and get you some. And you all come back now, you hear?