Welcome to the BoomX Show, laws of money podcast. I am in Dallas, Texas, no longer in Puerto Rico, at least for this week. I'm in a very cool HubSpot podcast studio with a guest who is going to teach us what we need to know, or at least introduce us to the idea of investing real estate in something other than REIT.
I'm talking actual real estate dirt on the ground in a way that could change your retirement, start a new business, give you opportunities that you never thought possible.
Welcome, Boom,Xers. Let's throw out the old playbook. It's time to tear down the traditional way of looking at your life and money and leverage the laws of money to our advantage.
That's right. There are actually laws of money and those who learn them and leverage them, win.
Stay tuned as asset protection attorney Darol Tuttle, educator, and leader of the BoomX Nation shows us how.
Okay. Welcome back. We have a great show. There's so much to talk about. I'm so excited. I like to introduce my guests. In fact, I'm gonna have my guests introduce himself.
Yeah. My name is Dustin Heiner. I'm a real estate investor and I was blessed to be able to quit my job when I'm 37 years old and not work a job because I bought real estate that makes me money every single month. That's how I'm able to afford my bills and then was able to fire my boss and become successfully unemployed. I like that term. And with that now I just get to, go to the gym, hang out with my family and come on podcasts and talk to great people like you.
So it's a blessing.
I'm curious, so you're 37 years old. I'm always interested in young entrepreneurs because candidly, I got a late start. So how is it that a man, when did you first get the notion? 37 years old, so where do you live? Tell me that let's start there.
Yeah, so I live in Phoenix, Arizona. Oh, wow. Okay. When I first started investing, that was in 2008 and I lived in California and I couldn't buy properties in California and make money. Cuz my goal was to make passive income. Right. Buy one property, make money on top of the expenses by the rent, but I couldn't buy in California cuz it was so expensive, like in 2008.
And so I went to Ohio and I started buying properties in outta state. So now I invest in Texas, Ohio, and Arizona.
Wow. Is real estate like the first place you started or did you, no, no stocks, bonds mutual funds.? Yes, and at the same time starting businesses.
So let me give you a quick story of what, like catapulted me, or shoved me into becoming a real estate investor. So, the fast forward, the end is where I quit my job when I was 37 years old. And, but before that, I've always been entrepreneurial. Starting businesses, that type of thing. And so I even had a newspaper route, that's where you ride bikes and newspapers aren't around anymore, but you would take newspapers and throw 'em at 5:00 AM and bang 'em on garage doors.
And I did that. I had a graphic and website design company. I even had a skateboard manufacturing business that I started from the ground up. I even had a convenience store and a pizzeria . So I started all these businesses, but at the same time, I was also working a, I call it a dead end, J.O.B., a just over broke job, but I'm following the path that we are all taught.
So we're all taught this same path. So you go to school, you get good grades, then you get those good grades. You go to college and you get good grades again, and you get thousands and thousands of dollars in debt. Then you take that piece of paper that you get that degree, and then you go and try to find a job at another company and work there 40 plus years, and then retire when you're 65 and try to live on what you managed to save that entire time, working that just over broke job.
So I'm doing that exact same thing because that's the only thing I know, but I'm also trying to businesses. They weren't making much money, but at least I was trying. So all of this, I'm doing this entire thing. I started working at a local county government in California and this local county government doing it work like the most risk averse job, local county government in California, I.T. or technology, you know that's not going away.
And so I'm doing that work in 9-5 and it was a good job and all, and so at the same time I bought one rental property. How old are you at this point? That's what I wanna know. Yeah. Good question. I wanna say I was 27, 27, maybe 26 or 27.
Okay. Before you go on, how old were you when you did the web design company?
Oh, that was in college. So I was probably about 19. How many businesses had you actually started by the time you started this government job? I wanna say I probably started at least two, no, three companies before the government job, if not a fourth one, but I'm good at starting businesses.
I love doing that. Yeah. And so I realized that I need to start getting more full into something specifically. And so I started a brick and mortar business, like a convenient store when I was a little older like 25, but buying that first rental property. It was passive. I bought the property and I made, I remember that first check was like $318 or something like that from the difference from the expenses and the income.
That difference is passive income that comes to me. And I said, I need to buy more of these. And I need to become an investor, but here Darol, like literally life got in the way my wife and I started adding kids work was getting more busy and all that sort of stuff. And so even though I knew I needed to be an investor, I put that off, but here's the story that really catapulted me into becoming an investor.
So,I was working reg regular nine to five job, my wife and I started having kids, many kids, and we got to our fourth child and I went on paternity leave. That's where the dad stays home with the mom, changes poopy diapers and bonds with the baby and all that good stuff. And so I am there for two weeks and then I go back to work.
And that week that I go back to work on a Friday at 3:30 in the afternoon, I get a call from my boss's secretary, like the top dog. And she says, Dustin, would you please come to the office? And I said, sure. And then I hung up the phone and I thought it, yeah. I was like, uh oh, what's going on?
Yeah. Number one, like this isn't normal. What's going on here? And then I've seen plenty of movies getting a call at 3:30 on a Friday isn't very good. And then as I'm sitting there, I pause and I remembered, about two months before I went on paternity leave, there was some rumors there, some rumbling going on that there could potentially be layoffs in the county because, or my department, because they were running low on funds.
And I immediately shook that off. I said, there's no way, I've been here 12, 15 years. I've so much seniority my bosses think I do a great job. So there's no way. Then I get up and I start walking down the hallway to my boss's office. Now this hallway isn't very long, but it's actually short, but every single step that I took, it felt like the hallway got longer and longer. Like one of those hitchcock leg, and longer.
Yes, exactly. And it felt like my feet became lead bricks as I, because it was just starting to weigh on me, then I could potentially lose my job. Well, I get down the corner or down the hallway and I turn the corner and I see my boss's door. His door's closed and his secretary looks at me. She's super sweet, nice old lady.
And she sheepishly grins and said, Dustin, would you please have a seat? And so I go and take my seat. She's trying to console me with her eyes cuz she knows everything about what's going on. I know nothing about what's going on. So I go and I take my seat and I start thinking about, oh my goodness. If I lose my job here, all that plan that I've been told, go to school, get grades and get a career.
If that's taken away from me, did I just waste my life on this? And then I thought, oh my goodness. If I can't make money, how am I gonna feed my family? I have four kids now, how am I gonna feed them? Does that make me a failure as a father? Right. Does that make me a failure as a husband, as a man trying to provide for his family?
Well, as I'm sitting there, the weight of everything is crushing down on me. My hands get all clammy. My forehead gets all sweaty, cuz it's just getting so much nerves coming up. And then the door to my boss's office opens up and out, walks a lady, a coworker of mine with a piece of paper in her hand. She's noticeably distraught. She's noticeably upset.
You could tell her world has been rocked. He's not necessarily crying, but it's bad. You can tell it's coming. Right. It's coming. Yeah. She passes by me and my bosses. Dustin, would you please come into the office? And I said, okay, I get up and go into his office and I get laid off and Darol, remember. It's not funny.
It's not funny, but no, this is the government. This is the government. Nobody gets fired later from the government, but I did. And so if it happened to me, it can happen to every anybody. And this is why I'm telling a story. So I walk back to my desk after getting laid off and I sit down and I realized two things sitting there at my desk.
The first one was that I need to get another job. I need to be able to provide for my family. So I was really, really blessed. Praise the Lord to find another job in the same county, a different department. They weren't having the same troubles. And so I was blessed check, got that one, but sitting in that chair, the second thing that I realized, this is what I'm trying to, this is reason why I'm telling this story is that I need to make sure that this never ever happens to me again.
I need to make sure that nobody has the ability to take away my ability to feed my family. So right then and there sitting there in that chair, I realize that now I am, I need to be an investor, cuz remember I wanted to be an investor, but life got in the way.
Now I said, I'm gonna change. If anybody ever asks me the question, cuz we all get the same question. What do you do? I say, Dustin, what do you do? I would normally say I work for the local county government. I do IT work for the local county government. I'm basically projecting my job as the value that I put on myself.
My value doesn't come from my job. My value comes from my family, from my God and for myself. So right then and there sitting in that chair, just getting laid off I said, every single time somebody asked me the question, what do you do? I will always respond, I am an investor. So I'll quickly fast forward the story I started this new job started working there and then I started buying property after property, after property telling everybody that I am an investor.
And then eventually I had 30 plus properties and I was like, my goodness, I can move on. And so I went to my new boss after having 30 plus properties, took me about six years to get there. And when I was 37 years old, I said, Hey boss, I'm laying you off. And he goes, Dustin, what are you gonna do?
And I said, I don't have to do a thing. I literally own real estate. It makes money for me without working and now I will never need a job again. So I ran out the story by saying, if you remember that short hallway that I walked down that got longer and longer. I walked away from my job for the very last time I worked in downtown, it was a mile and a half walk, done it a thousand times.
I felt like I was walking on clouds because I knew I would never, ever need a job again. And everybody here listening, you need to realize that your value is so much more than anybody could ever pay you. And this is how you'll definitely know this. Your boss is paying you just enough to keep you working without quitting, but not so much money is taking money out of their pocket.
So if you got paid for how much you're worth or how much your value is, they'll go broke. And so what I decided to do and why I'm encouraging everybody now is to realize there are other ways to make money for yourself and your family. For me, it was real estate. Eventually I had 30 plus properties making me a minimum of $250 a month for each property.
Eventually 30 plus properties. I'm like, I don't need to work anymore. So I was able to quit. So I'll pause the story, cuz you probably got plenty of questions.
I do, the thing that I was thinking about as you were telling the story is yeah, but I'm gonna push back because that's what lawyers do.
Right. But you're an entrepreneurial guy. Like you're paying the story as if you're a government employ employee, which you were and there are tons of my listeners. In fact, most of my listeners, by the way, have a different time horizon than you do a timeframe because they are already retired.
And I can tell you that the lion share of them worked that career for 40 years. And now a lot of them have saved quite a bit of money. And the thing that interests me and how I can benefit my audience is to throw out the radical concept that it doesn't have to be what your financial advisor says for your IRA.
And we'll talk about the law of self-directed IRAs here in a minute, but do you think that this is something a person could do in retireent? Who just doesn't really look at themselves as having that entrepreneurial zeal? Like your personality clearly has that so what do you think?
Well, yes, I'll say two things. Totally, yes. 100%. And the second thing to add to that, I've coached many people who have already been retired. They say, I wanna make sure that I have generational wealth that I could pass down to my kids. Not necessarily they need it right now. But they know that eventually they're gonna pass on and they would love to be able to give something to their kids.
And so I've literally coached hundreds if not thousands of students now. And they start from, you know, somebody wants to quit their job to they're already retired and they know that, Hey man, inflation is going up. I need to start making more money somehow. And so I need to start having money coming in.
So all the above. 100%. Yes. And, but thinking about the entrepreneurial type of attitude, it is not necessary that you need an entrepreneurial attitude at all. It is risk tolerance. I'll give you example. And obviously I just gave the story. So I realized after I got laid off, it was more risky working that job at a local county government in California, doing IT work.
It's more risky doing than putting my life in something like real estate investing that I can control. I can make sure that I buy the right properties, cuz we could definitely get into how to make sure you're buying the right properties, making a minimum of $250 a month in passive income from every property.
And from there being able, if you want to quit or if you wanna give it on to your kids, you can. But what I was able to do was to build a business or build the ability to make money without working for somebody else. So when I answer this idea of entrepreneurial versus you're working, retire or anything like that.
What it really comes down to is what is your idea of risk? My idea of risk is giving somebody the ability to take away my ability to feed my family. So fast forward now, anybody and everybody can invest in real estate. It's really simple. Like I'm not that smart. You're 100 smart, 100% smarter than me and everybody else on your podcast listener is 100% smarter than me.
I just figure this out. And Darol, this is so awesome. I love this. So I just said I'm not that smart, which I'll explain why numbers literally go in my brain and they'd flutter away. They'd disappear. It's just how my brain works. It's sad. But real estate investing is so simple.
All it comes down to is addition, subtraction, and a little bit of multiplication. So addition you add up all your expenses. So I do not buy a property if it's gonna lose me money every single month in passive income. So I add up all my expenses from your mortgage to your insurance, to your taxes, so they can see factor, repairs, capital expenses, like all these things.
We add all those up and we do not buy the property unless we could rent it right then the very, very first day that we take ownership of that property. We do not buy it unless we can make $250 or more in passive income. So in 2008, I bought my first property. No, 2006, I think, bought my first property, started investing through 2008.
The great thing about investing in real estate is that because I have been able to now buy properties and make sure that I'm making money every single month in passive income, whether the market goes up, whether the market goes down or the market goes sideways, I still make money because I invest for a passive income, not for appreciation.
Back in 2008, when the crash happened, there were so many real estate investors that literally went bankrupt. I didn't, I made so much more money because that, like I said, it's addition, subtraction, and a little bit of multiplication. Add up all your expenses then you talk to your experts, your property manager, and say, how much can I rent it for? And if you could rent it for $250 or more in passive income, then you buy it.
And then the multiplication is just a little, you know, subtract the difference. Then the multiplication's super simple. If you could buy one property, it makes you $250 a month in passive income. That's $3,000 a year without working. If you buy 10 properties. That's $2,500 a month in passive income, $30,000 a year without working 20 properties, $5,000 a month, $60,000 a year without working.
And it's a system that you need to put into place. And once you have this business built, you just buy more properties and put into the business.
Okay. So let's do a shout out real fast. Cause I don't wanna forget. You're you're getting excited. You're very very quickly. I love it. It's like sipping water from a fire hydrant though. That's my style.
Yep. Let's stop about what is the resource before we go any further, it sounds like you're also doing an online academy where my listeners can tap the brakes after this is over and say, okay, I wanna learn about this before I jump into it. I'm assuming like you have templates and spreadsheets that they figure out how to do it.
100%. Infact, I do coaching. I have group membership or courses and group coaching where I coach lots of people at one time. But even before you get in there, I want to give all your listeners a free real estate investing course. I will show you everything from building the business to buying the right properties, making money every single month.
So if they text the word rental, R E N T A L, rental to 33777. Rental to 33777, I'll give it to you. I'll show you how to find an area in the country to invest anywhere in the country. Is that the domain name? No, just text. Oh text. Yeah. Yeah. Okay. But yeah, you can also go to masterpassiveincome.com, that's my website, forward slash free course. Masterpassiveincome.com/freecourse, I'll literally give it to you, show you how to build the business first, how to buy the right properties that make you $250 a month, how to scale your business so that they can also give it to their kids, quit your job, whatever it might be.
And with that, what you're gonna do is you're gonna be able to make sure that you have a business that makes you money every single month in passive income.
But yeah, text word RENTAL to 33777. Okay. So I'm gonna do that myself. So if you are BoomX listener and you're thinking about it, don't even scare yourself to say like, this is something I want to do because that might be too much of a leap for you, right at this particular minute, I can, will concede.
And I will admit that I am interested in doing this for myself, but the idea of where I am in my life right now to actually go out and buy real estate, it's frightening to me actually. Here's what I like about it. I can at least learn something for free. I'm gonna invest in myself for sure.
And I think my listeners, most of them are in the BoomX Academy. They're already spending 44 bucks a month for weekly office hours. And they're taking the courses and whatnot on topics related to asset protection but this is a free course. Totally. Like to get introduced to the idea so at least for no other reason, just to have it in your data bank of conversation in financial and even legal literacy.
You took the course and you know it now. Now one thing that I what I don't like about what's going on in the market today and in the retirement industry is financial advisors make money based upon assets under management. And so they have a builtin incentive to tell their clients stay in the market even when there's an adjustment going on right now, right? Like the stock market's down like Bitcoin, the Bitcoin guys, they're like down 55% and they're still, they're still trying to tell you, go back into it. I know. So now what I do though, cuz I've lost plenty of money in the stock market.
I've lost plenty of money in crypto. But what I do not lose money in is my real estate investing because remember what we're doing is we're creating a business that makes us money. Let me give you a quick example, cuz I'll, if you listen to my podcast, either my YouTube channel or anything like that.
You'll hear me say this over and over and over again. We need to build the business first. Now, let me give you a quick example of what that means or what that looks like when you're investing in real estate. So if you're gonna start a convenient store, you know, candy bar, soda machines, and all that good stuff, you're not gonna sign a lease on a location, open the doors and set a box of candy bars in there, on the ground.
No, you wouldn't do that. You go out of business in two seconds, but what you would do is you would build the business first, you get the gondolas, those are just shelving units and all the candy bars go countertops, cold storage, bank accounts, cash registers, employees, insurance, everything before you bought any inventory.
Same thing with real estate investing, we build the entire business first have experts that run the business for us, and then every property that we buy, that is a piece of inventory that you put into your business. That's how I was able to scale it so fast. Cuz I had a business and it's not that hard, even though I keep saying it's a business, I'll show you like you can get my free course.
I'll literally show you how to do it. But when you build that business, find the right experts. Zillow's not an expert, truly a Redfin, like all those websites. They're just databases. They're companies that are just trying to sell this information and get ads. We hire. This is what it looks like building business. We find a good area of the country anywhere in the country that has good properties that we wanna buy and that make us good money and passive income. Then we find the right property managers, the people to manage a property. It'd be like if you find any property manager, it'd be like setting up your own convenience store, do all that work and just grab somebody off the street and say, Hey, you have a pulse, come manage my money, come manage my inventory, come manage my customers, come manage everything. No, you wouldn't do that.
You would actually interview lots and lots of people before you picked somebody. Same thing with real estate investing. Your property manager, that's your manager of your company. That's like the quarterback of your entire team. Then we make sure we get funding or mortgage brokers to hard money lenders, private money lenders, all these different ways. I know four, I've literally done 14 different ways to get financed into buy properties. And then from there we find handymen, contractors, insurance agents every like literally every single person in the business before we buy any properties, because they are the ones that are gonna tell us, you're doing this right.
You're doing this wrong. Don't do this. If a property manager comes to you and says I'm not going to manage that property like after you bought it. Cuz if you listen to the other quote, unquote gurus out there that teach you how to invest in real estate, what they'll do is they'll say, find a property anywhere and you run the numbers. Basically you make sure you make a little bit more money in passive income, like $50 or so they might even say you don't even need that. You get appreciation, which we don't invest for appreciation.
I tell you that right now, I'm gonna give these properties to my kids. So with that, you've run the numbers, make sure you make a little bit of money in passive income. Then you spend thousands of dollars to buy the property. Then spend thousands of dollars to fix up the property. And then you find a tenant to live in there.
And then you find a property manager. In my opinion, that's just about backwards. What we do is we start with a city that has good inventory. Then we find the right property managers, this is what happens. I get a lot of students come to me. And say, Dustin, I bought a house. I didn't know what I was doing.
And I bought a house and I did everything the guru said. And then I went to find a property manager and all the property managers said, I'm not gonna manage that property. I'll get shot if I go there. You no longer have an asset anymore. You have a liability. So what we do is we build the business first and the property managers, not your realtor. Your realtor just wants to make a sale.
Now, if I affect or insulted the realtors, you just gotta take it because this is literally how it comes across and I've talked hundreds and hundreds and my students have. If you look out for the best interest of the investor, that their long-term goal is to hold onto these properties and protect them to make sure that somebody's gonna manage it.
You're gonna do so much better with investors like me. I buy properties off good realtors who actually give me good properties in good areas that make sure I'm gonna make money. So quickly getting back to building the business, what we do is we build the business and every property that we buy is a piece of inventory that we put into the business.
And if we do this, it runs itself. I don't want to work at all. In fact, there's a book called a four hour work week. I think working four hours a week would be good for most people, but I think it's also working.
It's for suckers. I don't wanna work four hours a week. I don't wanna work four hours a month. I basically maybe work 30 minutes a month on all of my 30 plus properties because I just grab the property management statements, make sure everything looks good, then put it away because I've given my property managers, business processes and systems and procedures to follow that they already follow.
And I've already been doing it for 15 years now. And now I just go back to playing with my kids because I have everything running on its own.
Okay. The name of the podcast is BoomX Show, but the sub-headline is laws of money. And so you and I are gonna come up with a law of money related to your business rental properties that we can describe in one, possibly two sentences.
And here's what I think it could be. Talk to me about the role of a real estate agent. Is there really a need for engagement with a real estate professional? Now I understand the seller most likely has an agent and most likely the commission that's being paid is coming from the seller. Is that correct?
Yes. Right. So we're not really worried about it very much really because we're buying. One thing that bothers me is just in a hot market. We should talk about the market, but that aside let's just put that on the table, the back burner. Do we really have to worry about the contract or the transaction or the close considering the fact that we're basically just using model forms?
You're getting on the right track in the right question. So with realtors, absolutely not. I bought so many properties without realtors. In fact, I prefer not using a realtor because I know number one, I know what I'm doing, but if you really realize what a realtor does, all they do is pair up a buyer and a seller.
That's really what they do. And they facilitate a contract, which you can do yourself. And all they do from there is they give it to a title company, which the buyer and seller pays the title company to do all the work, the realtor's done. That's all they did. And so now what, here's a tip for anybody that wants to save money and make money on top of when you buy the house, what we do is I work directly with the sellers' realtor.
I say, Hey, sellers' realtor, you're already getting 3% from them. How about instead of getting 3% from me, why don't I work with you as the buyer realtor? And from that, I'll give you two and a half percent. Let me keep one half or half a percent so that I can, repair usually they'll say yes, cuz they're getting five and a half percent.
But anyways, all that to say, realtors are just one way to find properties. I find properties through other investors, through title companies, my property manager, other investor groups. Realtors, they're a dime a dozen. And so I have so many different ways to find properties on top of using realtors.
Is the buyer obligated to pay a commission to the realtor?
No, but there is a buyer commission. If you want to buy a property, you can use your own personal buyer's realtor. But I usually don't, unless a realtor brings it to me. Right. Which I have integrity, if they bring it to me, I'm like, great.
You did a great job. Let me make sure that I buy it for you. But if I find it, I'm not gonna go find a realtor to then represent me. No, I'm an investor. I know what I'm doing. And it's so easy to become a realtor, like literally a school teacher. I'm not saying anything bad about this. A lot of realtors are school teachers.
Yeah, exactly. Like, oh, let me make a little bit extra money being a realtor. It's so easy to do that. Right.
Okay. Now, how about this, most of my students have pretty substantial retirement accounts. And one of the things I'm curious about is how am I gonna finance this?
Like what assets are the best assets to use to purchase in real estate? And can I use my retirement account
to do that? 100%. So I'll give you a couple different examples of how to use a retirement account. So what I personally did, cuz you know, I was like, what? 35 years old, 32, somewhere around there.
I cashed out my entire retirement account because even with the taxes and penalties and stuff like that, I make so much more money in real estate. So I didn't care. It literally is like, oh, it's just a, oh I just have to do that. It's silly for me for putting it in there, pull it out. That's one way.
Another way is instead of pulling it all out at once, what I teach my students is, another two other great options. One, if you wanna just pull it out a little at a time per deal, let's say you have $300,000 in your retirement account and you find a house that maybe $120,000. We'll just pull out that little bit that you know, 120 to buy that house, then refinance it.
Cash out, get that cash back out, cuz you know, you use cash to buy it. Then you refinance that house cuz there's no note or no loan on it. Then you pull that cash back out and then you, pay taxes or whatever it might be. The other way is a self-directed IRA that I think is fantastic especially if you're getting really close to retirement age, don't get that penalty and you're already, hopefully making money.
You have other ways to make money. Cuz I did this quitting my job. I only needed to feed my family. So I needed that money right now. You might need it like three or four years from now. You'd be like, I just want to do a self-directed IRA. And all that really means is, you are the person making sure that money is being invested in a certain way.
If you do a 401k IRA, what they're gonna do? You give it to somebody and they buy stocks, they buy mutual funds or whatever it might be. They buy other things. But with a self-directed IRA, you don't have to hire somebody to actually manage your money. You buy a property. It makes you money in passive income.
Now the whole caveat is you can't personally touch the money. It has to go back into that same account that self-directed IRA account. It's just growing inside of there. So when you come the age to pull out, then you have that much more money. That's tax free. If it's obviously, if it's a Roth, but what you've done is if you utilized this to make sure that you're growing your wealth and in the future, when you are able to retire, you have so much more money.
So like with the stock market, like we, I believe the stock market's gonna keep going down. It's not looking very good. And so if you were able to cash it out right now, or put, move it from the stocks, cash out the stocks, leave it in the IRA, then get a self-directed IRA where you move everything over and start buying real estate.
I honestly, I Darol I gotta say this because we can perceive that the real estate market's gonna be pretty bad. Like right now it's rough, but it's been a seller's market and like, oh, what's gonna happen with interest rates and all that sort of stuff. I gotta say, as an investor, I started investing back in 2006.
I am so excited about this new change in what's gonna happen in the market. I'm gonna buy so many properties back in 2010 was the best time in recent history ever to buy real estate. Things were a fraction of what they should have been. I think in the next one to two years, it's gonna start heading, I don't know if it's gonna be as bad, but it's gonna start heading in that direction where if you're ready.
If you already have everything in place and the knowledge, let's say you have your self-directed IRA or you have, funds or cash to be able to buy the property, you're gonna make so much money investing real estate.
And the big thing is, make sure you do it right. That's the big thing with education, but I am so excited for this next couple years for real estate investing.
Okay. So I'm assuming that what you're trying to say is the market's going to start flipping to a buyer's market. Is that, 100%?
Well, I gotcha. Okay. Yes. Okay. Now, so on the IRA thing many of my listeners do not know, and they've never heard that the tax code does not disallow you from investing in anything except for life insurance policies, alcohol.
You can't buy alcohol with your IRA. And if you're like, well, of course in particular, what people were doing is they were buying wine collections that were in their wine cellar.
Like this is the IRA part of the, and the IRS is like, no, no, because there are thing, there is a rule you can't invest in real estate, or life insurance, you can't invest in collectibles. Some weird collectibles. You can't invest in alcohol. Pretty, other than that, I think that's the only thing that's prohibited.
You can absolutely invest in anything with your IRA with some certain rules. I think this will be the law of money that we come up with Dustin, but for example, I meant to ask you, when are you flying out?
Tomorrow morning.
Okay. So what are you doing tonight?
I don't have any plans.
Okay. So I'm gonna make a pitch. The Seattle seahawks are playing Dallas. 20 miles from here right now. I actually met a dude that bought and sold tickets, sporting event tickets with his IRA money. Whoa. Wow. Yeah. And I thought, okay, how's that gonna work? As long as it's not a prohibited transaction, it's perfectly fine.
It can't be like, you can't sell your box seats. But it's just an asset. You can, anything that you can buy for price A and sell for price. That's an investment. And so real estate is allowed. You can purchase real estate with an IRA money. Now the difficulty is the custodian plan administrator.
Yes. And so let's talk about that for a minute. There's not, my knowledge is only like three or four in the country.
Oh, I know there are a number of 'em. Oh, okay. But one that I personally suggest my students use is rocket dollar. They've been really good for all of my students and they handle everything.
They say it's like a checkbook style IRA where you can, write checks out, cuz you have to pay expenses, pay your property manager or whatever it might be. But you gotta put that money back in, but I really like rocket dollar. They've been working out really well for my students.
Can you summarize the prohibited transaction role if you know it for the listeners?
No I don't know it. I just know that real estate investing is one that you can, it's not prohibited, but then rocket dollar, they will tell you there's so many other, like you can invest in crypto with your self-directed IRA, obviously real estate.
You can invest in other people's businesses too. You literally can't, there's so many other things. And like I said, rocket dollar, they actually have so much education because there's not a whole ton out there. And like you said, there's not a lot of companies doing this, so they try to educate their people very, very well.
So it's basically on autopilot in terms of the rules, prohibited transactions orbit around this idea that you're not personally benefiting in a way that's inappropriate, that it has to be saved for retirement. And like retirement accounts have strict rules, number one about its purpose. But number two, that you know, and you're not losing your IRAs status because you did something wrong.
And most the transactions that I've seen that real estate isn't owned by a limited liability company. And that transactions I've, as we pointed out on the BoomX Show laws of money podcast, and in the academy changes the real estate or changes what you own from real estate to personal. Just by that transfer, real estate into a LLC, the law says, oh, you used to own dirt.
Now you own intangible personal property. It's very cool. It's like magic and just that one filing and then the plan, that trust I misspoke. The IRA is actually the shareholder of the LLC. Yes, it is. Yes. That's how you do it. And as long as you're not like renting outta spare bedroom in your own home, Then you won't trip on the prohibited transactions.
It sounds like, rocket, I was gonna say rocket dollar, rocket dollar. Yes. Isn't gonna let you do that anyway. So
that's awesome. Definitely help you out through that. And the reason why we love using the rocket dollar or just really the self-directed IRA is we already have the goal of getting to that point.
So what I do love doing with my students, I love giving them all the different options that are out there. Cuz I'll give you a quick example of an option that you can do. So a lot of people think in order to buy a rental property, we need to find a realtor and a mortgage broker and put 'em together and buy a house.
Well, that's just one way. There's so many other ways to do it. And so what I love to do is give all the options for my students. Everything from, I have 14 different ways that I've gotten financing to buy properties, how I can actually make money when I buy the property, make money, while I'm own the property, how I can make money, pulling cash out to actually buy the next property.
There's so many different options out there. And so what I'd love doing with my students, I give them, Hey, here are the options. Here are the outcomes of what's gonna happen, cuz I've literally done 'em all. And I've coached a lot of people how to do it as well. And so with that, the person, my student, they're the ones that have their own risk tolerances, their own goals, their own situations.
And so they need to make the best decision. I just give them the big, broad picture of all the different ways and they make the best decision. So if their best decision, what they want, and their goal is to, Hey, in four years, I can pull out my. And so how can I grow it now in my self-directed IRA, so I could then pull on four years.
Let's do that. Other students, I literally have students that are like, let's like 24 years old and they're like, man, I have this IRA of $50,000 in there. I want to use it now and I want to make money from now. I said, whoa, what I did is I cash it all out and I bought properties with it.
We can do that too. We could even use here's another creative way. We could even use your home equity in your property, the home that you live in to buy another property. I'll give you a quick example of what this looks like. So I have one student he's a pastor in Sacramento, California, doesn't make much money, but he owns a house and it's appreciated plenty.
And so he has like a $200,000 equity, maybe even more like 300,000. So we, I helped him to get a home equity line of credit on that house. Then he took that money, bought a house. So because we're an investor, we buy it for cheaper than it's worth. So they were asking like $120,000. We got it for $70,000, which is great.
He put about $20,000 into it. Got it rented $90,000 total and then had it re-appraised. And bought it or not bought it up, had to reappraise. It was $150,000 reappraisal. It's renting, it's making a money. So remember he bought it with his home equity. So this new house doesn't have a mortgage. Now he has his home equity.
He's paying on his own house. But now what we do is we refinance this rental property, pull the cash back out, pay off of your home equity line of credit. You're still making money on this first one. Now this rental property, your home equity line of credit's gone, or it's paid down and you have this property that's making money in passive income and you have all that money to do it all over again.
So he's doing it over and over on a pastor salary. Man, that's amazing. By building up his generational wealth,
that's leveraging money. That's owning your money, having your money work for you. I love it. Listen we need to wrap it up.
Do not worry. BoomX listeners, everything that he said, all the links will be in the show notes. You can just click the button before, but in case you're in your car and we don't want you driving into the Mac truck in front of you. What was the website again?
Masterpassiveincome.com/freecourse, just type, see, there you go.
All one word, free course. Yeah. Forward slash free course. All one word. I'll literally give it to you. I wanna see you get started. I've had so many people even just so I have a podcast called master passive income, which just me teaching. I don't really do interviews. It's just, solo, just teaching how to do this.
And I've even just yesterday, I got a message from a lady she's, I don't know, maybe 30 years old. She said, Dustin, just from listening to your podcast, I bought my first property. We're in a contract and it's gonna make us X amount of money in passive income. And people that get my course, the free course, I get messages all the time, just because of your free course, I've got started investing.
So I'll be completely honest Darol. So I don't really necessarily need to do any of this because I have my real estate. This is how I make my money. And all of this is just fun. Like, oh, hopefully it comes across. Like this is enjoyable for me. And then seeing my students buy their first property. It feels like I bought my first property all over again.
And then them quitting their jobs and cuz that's their goal. Cuz other people have different goals, but their goal, some of 'em are to quit their job. I get so much more. I'm like, I feel like I quit my job all over again. And so my goal is to make sure that all of my students, like we see their goal and we try to help them reach that goal with whatever risk tolerances and everything that they have.
But when we do that, it changes everything. So yeah, I love talking about this. I have my YouTube channel Master Passive Income, same thing with a podcast Master Passive Income as well. If you're listening to the podcast version, you can't really actually see it. If you're in the YouTube version, he's like bouncing, literally bouncing out of his chair.
He's so excited about it. So I just had to make sure I got that on video. But it's been a pleasure having you on the show. You'll definitely come back. We've got a lot to talk about and finish. Thank you so much. Thank you, Darol.
I appreciate it.
Okay. That's it for now.
We'll see you next time on the BoomX Show, Laws of Money Podcast.
That's awesome. Wait, wait,
wait, wait. Hi, this is Darol Tuttle again, and this is what they call the outro.
Thank you for listening. I hope you liked to show if I said something too quickly, you can go to boomxshow.com to check out the episode page, the notes, resources, all kinds of things. Check it out. Boomxshow.com.
Okay. Okay. Now you can do the music.
Yes now.
I don't know. I thought that was good. I think that was good. All in one take,
not bad. Oh, yeah. Where did everybody go?
Hello? Alone again.
