Dustin Heiner is a real estate investor and Founder of MasterPassiveIncome.com, which he started from his home in 2015 while working full-time, married with 5 children, and owning and operating 2 other businesses.
Dustin became Successfully Unemployed at 37 years old by investing in real estate rental properties. Since then, he has helped thousands of others start investing in rental properties as well.
Charles:
Welcome to another episode of the Global Investors Podcast; I’m your host, Charles Carillo. Today, we have Dustin Heiner. He is a real estate investor and Founder of MasterPassiveIncome.com, which he started from his home in 2015 while working full-time, married with 5 children, and owning and operating 2 other businesses.
Dustin became Successfully Unemployed at 37 years old by investing in real estate rental properties. Since then, he has helped thousands of others start investing in rental properties as well. Dustin, thank you so much for being on the show today.
Dustin:
Charles, thank you so much for having me. I really appreciate it. I love real estate and more so of what it affords me to do in my life. Like I go to the gym. I don’t work at dead end J.O.B. is what I like to call it because you’re living just over broke and I’m successful unemployed and I get to come on podcast and talk to great people like you. So thank you so much for having me on.
Charles:
Yeah, well, thank you for that and thank you for coming on. And one of the things I always like to start off with is tell us a little bit about yourself, both personally and professionally prior to getting involved in real estate investing.
Dustin:
Yeah. So, well, right now I’ll start where I’m at now. Five kids. I’m very blessed to have five kids, been married 20 plus years now. And so that’s what I love is now I have real estate that now allows me to not work at dead end J-O-B. And what’s great was I started just like everybody starts. You know, we start, go to school, get good grades, and then you get thousands and thousands of dollars into debt, going to college, you get a piece of paper, like a degree. So I’m doing that exact same plan that everybody else has, you know, the plan that somebody else gives you. And so you go to college, you get in 10, 20, $100,000 of debt or more. And then you get a piece of paper. And then you go to hopefully a company or an organization try to get a dead end job is what I call it a J O B. And then I’m doing that exact same plan. And I started working for a local county government in California doing it, you know, technology. And that’s the most stable, secure job you could ever think of. So government’s not going away. We know that. Taxes are not going away. California is not going in. IT is not going away. So I’m like, set. But I bought one property in the middle of all, you know, working a job and everything. I bought one rental property. This was in 2006 when I bought my first property before the crash 2008. And I was living in California at the time. And I bought my first property in Ohio, of all places. I just ran them. I didn’t know what I was doing. And so I bought one property in Ohio, that started making me cash flow. I remember the check. As plain as day, $317 in my hands. I’m looking at it. I’m like, for my property manager, I’m like, oh my goodness, that the easiest money I ever made And I thought did I just master passive income That why I have the brand Master Passive Income because I want to show people how do you master passive income You have a property make you money every single month over every single year And then eventually, if you accumulate enough properties, you won’t have to work a job. So that’s now I have 35, 36 properties. We’re buying a portfolio of nine properties right now. I have over a thousand apartment complex units, three large apartment complexes, investor hotels. And so now I just, all my money comes in through real estate and I don’t have to work in dead end JLB, but that’s that big, broad picture of where I started and where I’m at now.
Charles:
That’s awesome. Yeah. That, that, so there’s always that, um, the first property where there’s proof of concept. And for me, it was really my second property because the first one I was house hacking. So it was like a three family, but the second three family I bought, um, that one I bought in 2008. And when I bought that one, that was, um, yeah, that was like, I was like, Oh, this is, this is how it’s supposed to work. Cause the first one, I didn’t really know what I was doing. The second one knew a little bit more.
Dustin:
Same for me when I bought that first property, that first check was great. 6 months later, because I was doing it wrong. And so back when I was investing, it was the infomercial gurus. Now it’s TikTok gurus. I call it TikTok, giving them a hundred thousand dollars to help teach you how to. And so I did that. And my property manager started stealing from me within 6 months because I didn’t know what I was doing. But if I would have hung my head and said, oh, this doesn’t work, then I wouldn’t be here today. I said, you know what? There has to be a way. I’m not reinventing the wheel. There has to be a way. So I decided to start a business, meaning like instead of just hoping that things work out, do things before I buy the property. And that’s when, just like you, the second property started rolling so much better.
Charles:
When you had that first property manager that stole from you, what was the reason? Were you not watching it close enough? Were you not checking bank accounts? I mean, what were the mistakes you made there that you’ve since changed?
Dustin:
The stealing was in creating phantom expenses or create like a fake receipt and say, hey, the main sewer line, the main line that goes out to the sewer, we had to repair that. It was $900. I’m like, what? You didn’t even tell me about that. So things weren’t adding up. And after probably two or 3 months, my wife said, you got to get rid of her. This is not right. I’m like, well, but I was being a pushover. And then eventually I just had to say, you know what? There is too much money coming out, meaning my checks should be a lot higher than they are. And so this is not good that now, because I was watching it. But at the same time it hard when I in California I in California and investing in Ohio So it hard to just go over there and view it And so because of that I had to be I since learned I’ve since learned, in fact, now invest in Ohio, Texas, Arizona, Tennessee, and Indiana. Invest all over the country. Because once you have a system or a business, I like to say you build a business first. But once you have a business that has everything worked out for you, meaning systems, procedures, and processes in place and the right people, the experts, and you don’t just pick somebody off the street and say, hey, you got a pulse, come do everything, manage my business and everything, which is what I did the first time because that’s what those TikTok gurus, like I said, it was the infomercial gurus back in 2006. But it was because I didn’t select the right people and I didn’t know how to select the right people.
Charles:
Yeah, that’s crazy. The expenses is even harder to track down on your end. If it was, obviously you only had one unit, but the times I’ve heard property managers, I’ve never had one steal from me per se, but it’s on the income side. You know what I mean? Years back when there was a lot of cash. Now that’s not as easy, but that was something and you could go and you could count your vacant and your occupied units and that’s a little bit more straightforward. But obviously, if it’s something intricate where they’re on expenses, that’s a little harder, you know what I mean, to verify. But at least, I mean, only 3 months. But Changing property management is a pain. I mean, no matter how big or small the property is, it is a lot of work. And it’s not just done in a few hours. You know what I mean? It takes many months for it to go.
Dustin:
And you want somebody that you don’t have to, well, this is how I do it. I don’t ever want to talk to my property manager. I just want them to make me money and make sure it’s done right so I don’t have to do anything else. And so it’s in the setup beforehand. And that’s one thing. But what shoved me to get into real estate investing. Like I’m working at what I call now a dead end J-O-B, but I didn’t know it was a J-O-B living just over broke. And I bought one property and I started, I just kept doing my job thing. And so what I realized was I needed to do everything the right way, but I didn’t know. In fact, I didn’t really get full into it until something happened that shook up my life that made me realize and wake up and say, oh my goodness. even though I thought my J-O-B, my job was stable and secure. Now it’s actually more risky working for somebody else.
Charles:
Isn’t it interesting, just as a side note, when you’ve had, or when I’ve had these before as a lifelong entrepreneur these changes these issues that have happened in your life that have felt like a issue at the time but have turned out when you look back many years as being a blessing. It’s really funny how that works out. And it’s difficult to tell people during that time that they’re going through it. But when you look back on it, you’re like, oh, wow, that actually was like a good catalyst for me to kind of catapult what I’m doing into another dimension.
Dustin:
You’re 100% right. I love the saying necessity is the mother of invention. Like if you have something you have to take care of, it’s going to make you figure out a way to do it. And you might have, I tell a quick story of what really shoved me into investing.
Charles:
Yes.
Dustin:
This is what really got me to investing. So I bought one property in 2006 before the crash of 2008. And I told myself, I need to be an investor. Like I need to do this, but you know what happens? Life starts getting in the way. My wife and I started having one, two, three, and four kids, but this is really what shoved me into it. So when my wife had our fourth kid, she was born and I went on paternity leave. That’s where the dad stays home with the mom, changes poopy diapers and all the good stuff and bonds with the baby. Well, I go back to work after about 2 weeks. And on a Friday at 3.30 in the afternoon, just getting back from the paternity leave, I get a call from my boss’s boss’s boss’s secretary, like the top dog. And she says, Dustin, would you please come to the office? I said, sure. And I hung up the phone and I thought for a second, why in the world are they calling me in the office? I was like, this is not normal. And I’ve seen plenty of movies. Friday at 3.30 is not a good sign. And so I started remembering before I went on paternity leave, there were some rumors that there were some budget issues in the county, the department I was working in. I immediately shook it off. I said, there’s no way I’m getting laid off. I got great seniority, working 12, 13 years here. My boss is saying I do a great job. Shook it off. Then I get up and I walk down the hallway to my boss’s office. Now, this hallway isn’t very long. In fact, it’s kind of short. but every single step I took, it felt like the hallway got longer and longer and longer. And it felt like my feet became lead bricks because the thought of potentially losing my job was just crushing down on me. While I get down the hallway and I turn the corner and I see my boss’s door, his door’s closed and his secretary is sitting there and she’s kind of sheepishly grinning at me, trying to console me with her eyes because she knows everything about what’s going on. I know nothing. And she says, Dustin, would you have a seat? So I go and I take a seat. I start thinking about my life. It’s like, oh my goodness, this entire plan that other people told me to do, if I get laid off right now, did I just waste my life doing this? And it also hit me, we just had our fourth kid. If I can’t work a job, did that make me a failure? as a husband? Does that make me a failure as a father, as a man trying to provide for his family? Well, as I’m sitting there, my hand gets all clammy. My forehead gets all sweaty because the nerves are just crushing me. Then the door to my boss’s office opens up and out walks her coworker of mine with a piece of paper in her hands. She’s noticeably distraught, very upset, not necessarily crying, but you can tell her world has just been rocked. Then my boss says, Dustin, would you please come in the office? So I get up and I go into his office and I get laid off. And remember, this is the government. Nobody gets fired or laid off the government, but I did. And this is the reason why I tell the story. So I take that layoff notice and I go and I sit down at my desk and I realized two things sitting right then and there. Number one, I need to get another job. I need to be able to provide for my family. So I was really blessed, praise the Lord, to find another job in the same county, a different department wasn’t having those issues. So check. But then sitting in that desk, I realized the second thing. This is exactly why I want everybody to hear this. I realized I need to make sure this never, ever happens to me again. I need to make sure that nobody can take away my ability to feed my family. So right then and there, I realized whenever I would get asked the question, we all get asked this question, what do you do? I would reply with my job. Oh, I work for the local county government doing IT. Well, when we ask or answer that way, we’re projecting out to the world what we think we’re valued or how we’re valued. I realized my value doesn’t come from my job. My value comes from my God and from myself and my family. So right then and there, I started telling every single person that I am an investor. Now, it may so happen that almost all of my money comes to my job. That’s now my part-time job. I’m a full-time investor. So I’ll quickly fast forward the story. Start buying property after property after property. Each one I’m making $500 a month, $607. I have now properties make me $3,000 a month. And the last quick part of the story, after working at this new job that I got, I went to my boss and I said, I’m laying you off. You know, I gave him my resignation. But we laughed. And he says, what are you going to do? I said, I don’t have to do anything. I own real estate that makes me money without working. And the last quick part of the story, I would walk to and from my job every single day, a mile and a half. I’m too frugal to pay for parking closer because it’s downtown. I took that walk a thousand times or more times. This last time I felt like I was walking on clouds because I knew I would never, ever need a job again. For you listening what I want you to realize is I got the most risk adverse job but that got taken away from me And now I realize that real estate when you know what you doing when you build a business when you have the experts find the right people, get the experts who are good at their job, have them do all the work. Then you have passive income coming in. And for you listening to once you realize this, you’re working a JLB. I said a couple of times, you’re working just over broke. And this is how you’ll know your boss is paying you just enough to keep you working without quitting, but not so much money. It takes money out of their pockets. If they paid you what you were worth, they would go broke. So instead, what I suggest is build a business, have your inventory, which is your properties. It’s not a home. It’s not a house that you’re, it’s inventory. If you look at it like a business, if you build a business, get the right people, make sure you’re making money every single month and then buy the property. That’s now your inventory. Is this all making sense?
Charles:
Yeah, definitely makes great sense. Thanks for sharing that with us.
Speaker 3:
Do you have money sitting in the stock market and you’re worried about it, or worse, you have money sitting at the bank, not keeping up with inflation? My name is Charles Carillo, founder and managing partner of Harborside Partners. And since 2006, I’ve been investing my money and my family’s money into income producing properties. These are real assets, real properties with real addresses that produce real cashflow. At Harborside Partners, we provide passive investors who love real estate with a turnkey investing solution. If you want to put your money to work in real estate, but can’t find deals, don’t have the time to get funding, and the last thing that productive people want to do is manage real estate. We find the deals, we fund the deals, and we manage the tenants, the termites, and the properties. Partner with us at investwithharborside.com. That’s investwithharborside.com. Go to investwithharborside.com. If you love real estate, you like the idea of passive income and believe that income-producing properties will appreciate over time, go to investwithharborside.com. That’s investwithharborside.com.
Charles:
One of the things is when people are buying properties, can you tell us a little bit about your path to financial independence. And you went over it briefly in the sense of the real estate investing portion of it. But what type of properties did you focus on purchasing during that time? And yes, the first few properties, especially when you have a job, are pretty easy if they’re one to four unit properties, right? Because it’s residential, banks throw money at you because you have income from a job and all this stuff. The issue is that how are you funding the down payments in kind of, um, and getting approved for those mortgages, how you’re handling financing as you were building this. Cause that’s usually a pushback today.
Dustin:
Yeah. I’ll jump to today how it is now which I wish it was back when I was investing I wish it was like it today So there the best ever loan you could ever think of It called the DSCR loan a debt service coverage ratio loan And you just need a down payment, which I’ll get to in just a second. But back when I was investing first started, once you got to three to four properties, bank are like, I don’t want to lend you any more money. So you got to get very creative. Now for the down payment, the down payment, I got private money from my dad. I said, Hey dad, I really want to buy this property. Another one, when I just got married, um, 6 months into getting married, I said, Hey honey, I didn’t save any money, you know, uh, to bring to the marriage. I didn’t bring debt, but I didn’t save any money. You saved 17,000. I remember the number $17,000. Can I use that money to buy real estate? And she was like, what? No. Anyways, I eventually, she got used to the idea, helped her to realize that we can continually recycle money over and over and over again. So we use money for down payment to buy our first property. And in 2006, the values kept going up. And so I would refinance properties, pull cash out of those properties, do a cash out refinance, and then buy more real estate. And then I had to get more creative. It’s like, okay, now I have 10 properties. How do I get more creative on buying properties? Like, well, why don’t we look at other and honestly, I do know 20. And I say no, I’ve used 20 different ways to get financing for properties. A lot of people think, how do you buy a property? You find a realtor and a mortgage broker and you put them together and you buy a property. That’s just one of at least 20 different ways. So in order for me to continue to grow, I took a little bit of money I had. I even got private money. Like I said, my dad had money. I even got hard money lenders. I’ve even used, I literally use a signature loan. I went into a bank and I said, hey, can I just get an unsecured line of credit? And it’s all these loans are tax free. Remember this. If you do a cash out refinance on a property, it’s like you’re selling it, but you’re not. You still have the income. You still have the property, still appreciates. And you get that cash tax-free in your pocket to buy more real estate. And this is just touching the tip of the iceberg of all the different creative ways to get financing. But as I did that, I just kept recycling the money over and over and over again. And eventually, people were saying, hey, can I invest with you in your deals? Like, well, yeah. If you want to lend me money, I’ll give you, let’s say, an 8% loan. or you give me an 8% loan and I buy real estate and I pay it off and then eventually, like this is, hopefully I’m just, I’m helping you understand, I’m touching the tip of the ice here. Oh I give you one more This is an advanced strategy just like a signature loan Advanced strategy you have to know your business meaning you have to know your business is gonna make you money I even used a credit card a cash out credit card It was like 14% or something like that. I signed it, got that, but I knew my business model that that credit card now is gone and paid off and I still own the property that’s making me $500 a month. Now, quick one last thing, because I want you to jump in. The last thing is, I knew that I wanted financial freedom. I knew I wanted to not have to work for a job And I wanted to make sure nobody could take away my ability to feed my family So I just started doing simple math and for you listening More than likely you’re 10 times smarter than me. I’m not that smart. I just know a little Arithmetic addition subtraction and multiplication. This is what I realized. All I need to do was make sure I cover all my expenses Calculate all my expenses and then I make sure that I could rent it for more and I add my profit inside there That’s another expense light on him. If I know I need to make $500 a month from this property I make sure I reduce my expenses by getting the purchase price lower Hopefully that makes sense. You purchase price lower mortgage goes lower And so what happens is this is what I did I said I knew if I bought one property that made me $500 a month This is profit total profit after all the expenses Then that is 6,000 dollars a year. I said that’s terrific If in simple addition and multiplication if I had 10 properties at $500 a month, that’s $5,000 a month in cash flow. That is $60,000 a year without working 20 properties. That is $120,000 a year, $10,000 a month. And I just knew I, my, my wife said, we need $4,800 a month, you know, medical bills, mortgage, insurance, food, all that sort of stuff. I said, okay, all I need is 10 properties. Okay. I can work my tail towards that. And that’s how now I’ve coached thousands of people now how to invest in real estate, we have that picture in our mind is like, the goal is whatever it is, if it’s financial dependence, if it’s more time to travel, whatever your goal is, we need to build that into our life. And I call it becoming an income builder, because I don’t buy a property hoping I make money. I buy a property knowing I’m going to make at least $500 a month or more. I have some properties making me $1,000 a month. So I even have multiple properties that make me over $3,000 a month. The longer you hold real estate, the more money you make, the more tax advantage you get. Real estate doubles. And I know you know this, Charles. Real estate doubles in value every 15 years. So $150,000, home. 15 years later, it’s worth $300,000. Then 15 years later, it’s worth $600,000. Now it’s worth $600,000 and the mortgage is paid off and you have all that rent coming in. So I’ll pause because I could just keep going.
Charles:
No, that’s fantastic. One thing about holding the properties longer, I totally agree with. I met this old real estate investor decades back and I remember him telling me it’s like the law of 10 years pretty much. And he was like, if you can hold the property for 10 years, the chances of you losing money, even if you bought at the height of a bubble, you’re most likely not going to lose money. It’s all about 10 years. So I think about that when you’re buying properties. You have a lot of business plans that people come like, oh, we’re going to refinance and sell it in 24, 36 months, all this type of stuff. And that just adds to the risk because you’re getting short-term debt. It’s an aggressive business plan. Everything has to really work out to make money. Whereas if someone’s like, these are going to be high single-digit returns, something like this, but we’re going to hold it for 10 years. We have 10 year debt on it. You’ve really, you’ve really minimized your downside so much that it would take something majorly wrong at the property or with management to drive that into the ground. So I totally kind of subscribe to holding properties longer because that’s where you’re going to make the real money.
Dustin:
So I a hundred percent agree with you and I’ll add a little caveat to that. So the people, and cause I know you didn’t say this, but I want to make sure people understand this. Back in 2008, when the crash happened, there were so many, I mean, thousands of that, almost every single real estate investor, they went bankrupt. Every single one, because what were they doing? They were hoping for appreciation. They thought it was always going to go up and they were not banking on the cash flow. Remember, I’ve been talking about income. We want to be an income builder into our lives. And so I don’t invest for appreciation anymore. Like it’s great. Don’t get me wrong. It’s it’s literally the icing on the cake, which is great All these properties. I will literally give these to my kids. I got five kids If you’re watching this on youtube, I got five kids i’m gonna give these properties my kids But here is the key if you’re gonna remember anything in this entire episode I know you come back all the time listen to charles every single week But I want you to also grab this so that you can in the future think Whenever I buy a piece of property, I need to make money every single month Let me break it down as simple as it is Let say you had a candy bar business you know you can buy and sell candy bars and you knew all day every day You can sell it for a dollar You would not buy it for a dollar and hope to sell it in a year for No why would you get into that business You would not If you could buy it for 50 cents and sell it for a dollar, you’d be thinking, how do I do this as much as possible? But here’s the great thing. Think of that as real estate. Here’s the amazing thing about real estate. If you don’t even have 50 cents to buy that candy bar, but it costs you 25 cents to borrow 50, you’re out of pocket 75 cents you still sell it for a dollar you make 25 cents think of that as real estate and one quick last thing i want to add so i don’t worry about appreciation because it will come remember it doubles every 15 years but it’s that cash flow that you’re going to be able to feed your family on it’s that cash flow it’s going to help you to not work a job if that’s your goal or travel the world but here’s one quick thing i also want to add because i i love how you also ask questions about like business building a business and that thought process here’s what happened when I was following those Instagram and it was Instagram and TikTok gurus now, but like back then it was the infomercial gurus. Um, my property manager started stealing from me because this is what they taught and they still teach this. These people that are on Instagram and TikTok, they say, find a property anywhere in the country, spend thousands of thousands of dollars to buy it, spend thousands of dollars to fix it up and then try to find a tenant and then try to find a property manager. Well, I’ve had so many people that go that route. That’s what I did. And that’s, it was the wrong way. Then I would call, like, sorry, this is people, I bought properties off people and students have said, you know, I did everything those TikTok gurus said. And I called up a property manager and they said, would you manage this property? They said, no, I’m not going to manage them. I’ll get shot there. Well, you know, you no longer have an asset. You have a liability. So instead of buying and doing all that stuff, instead, this is the key. On top of passive income or making money, being an income builder. Remember that you want to be an income builder every single month. But here’s the key. I do not buy any properties unless my experts that I pre-vetted way beforehand in the business that I built, they sign off on every bit of it. So instead of calling a property manager, hey, property manager, I just bought this house, you know, number one, happy street. And I want you to manage it. They say, no, well, that’s, you’re going to be, like I said, have a liability. Instead, you call up your property manager and say, property manager, I’m looking to buy this property. I haven’t bought it yet, but I’m looking to buy it. Tell me how much it would rent for. What’s the vacancy factor? What’s the clientele like? Will you manage it? If they say no, they won’t manage it, then you don’t waste your time and effort buying it. If they say yes oh this is even better If you have a good property manager they going to say something like you know what I know that street In fact we have a property that was right around the corner that is right around the corner And Zillow Zillow was trying to tell us we can get for it We tried for 6 months and we couldn’t. So we had to lower it to $1,700. And that’s when they got rented. That is expert information, is people that live there on the ground like Zillow, Redfin, Trulia. Those are not experts. That’s just databases. And so what I suggest, we build a business and then we build income into our property, into our business for every single property. And then we have experts do all the work for us.
Charles:
Yeah, no, that makes perfect sense. Yes. It differs a lot when you’re doing your rent comps. You really have to get a plethora of different information. I think some of those databases might be a little accurate. But if you’re actually going to the property and you actually see the product and the vintage and everything like that, that’s how you make your decision. It’s very difficult just to go, oh, there’s something for rent, same two, two, three blocks away. And so this is what it goes for. And you can’t do that because there’s so many different variables that you don’t even know. I had one property that was literally like, it was like a par three hole from one another, right? You’re talking just like three or 400 yards, right? And one of them, I couldn’t keep tenants. I just couldn’t keep tenants for, I don’t know, for more than a year and a half or something like this. The other one, I would have tenants in there seven, eight, 10 years. And it just goes, it’s literally the most local business. I mean, how it differs on where you keep tenants and pretty much similar streets and stuff like this. But it was just, that’s how, I mean, how different it was between those different areas. And I mean, it only takes when you’re using professionals, whether it’s you and your team, those are the ones that are going to know it because they’re going to wait to sell that to someone that didn’t do that research, didn’t talk to those professionals, that was listening to someone, like you say, one of the influencers.
Dustin:
I’ve bought so many properties off of people who are pulling their hair out because they do not know how to run a business. And here’s also another thing I’ll tell you, like a principle that I teach all my students and I ascribe to. So if you’re an investor, think of like you invest in stocks or mutual funds. You just put your money in there and you just hope it goes up over time. You might get a little bit of dividend, but it’s really nothing. Nothing you can live on, that’s for sure. But you hope it goes up. So this is what I tell you 100%. So if you’re listening to this, stop being an investor. That a big key Instead of being an investor don look at yourself as an investor I had to change my perspective because I used to tell everybody that I an investor but now I tell everybody I a business owner So I a business owner that invests in real estate because I a business owner. That now mindset now is instead of having that idea that I just set it and forget it. No, no, if you do that, if you, if you had a candy bar business and you just try to set it and forget it and just hire other people and quote unquote, hire other people, then who knows, you might get things bad happen to you. So what I suggest is become a business owner. When you’re a business owner, you invest properly, as opposed to just throwing your money and hoping that things work, because I’ve bought so many properties off of people that have done that. Also, my students, they come to Dustin, I’ve got four properties, and I can’t take it anymore. Like I need you help me to now scale my business so that I’m not doing the work. And that’s what I love to do is and I I would help my students. Number one, let’s say they had four properties. I help them to get that foundation right. Let’s do everything right now. Even you already have the properties. Let’s fix things so that you don’t even have to do any of the work. And then we now start scale, which goes back to one of your first questions, how to get financing, how to make sure you keep getting money over and over again. Like I said, 20 different ways to get financing that I’ve done that I now just coach my students because in the end, it’s all about options. It’s all about different options, how to find properties. You need to have lots of options to find them, even apartment complexes. If you don’t have people sending you deals, if you don’t have many different ways to find the properties, then you’re going to be it’s going to be really tough. Same thing with financing. If you don’t have lots of different ways to get financing for the properties, meaning all these options out there, then you’re going to be stuck because I only know of this way. That’s one thing I love to help my students is I these are all your options is what I’ll tell them. X, Y, Z or, you know, however, 15 different options. And this is what’s going to happen if you go this route. This is going to happen. Go this route or that route. So I present the options and I tell them the scenario and they make the best decisions for their risk tolerances, their goals, their understanding of where they want to go. And I just paint the picture for them and they make the best decisions.
Charles:
That’s great. So talking about building a team, what would you say for someone that’s starting out in rental real estate, maybe with smaller multifamily properties or maybe a single family rentals? What are the kind of the basis that they need as their first line of their team? And how would you go about over all the years of doing this, like finding and vetting those people and property managers? Because I imagine that’s one of the largest team members you’re going to have.
Dustin:
Yeah, you’re 100% right. Now, imagine this. Let me get so building the business. This is a huge key of everything that we do here at Master. passive income. So think of this. Let’s say you had a convenience store, you know, candy bars and soda machines and all the good stuff. Let’s say you wanted to start a convenience store. Well, you would not sign a lease on a location, open the doors and set a box of candy bars in there on the ground. You wouldn’t do that. You go out of business in 2 seconds. What you would do is you would build the business first. You get the gondolas. Those are shelving units. All the candy bars go on countertops, cold storage, bank accounts, cash registers, insurance, employees, everything in the business before you buy any inventory. And every single piece of property that you buy is a piece of inventory in your business. Now, going to the idea of your team, I think of it less as like a team. And that’s like a buzzword now that property managers, contractors, realtors, they’re going to like, oh, you’re trying to build your team. You just listen to those TikTok gurus. I say I am buying real estate and I want to make sure that you are a good property manager. But this is the number one thing. We find it anywhere in the country. We look for a great city that has lots of inventory. Remember, I talk about building a business, lots of inventory, types of homes that we want to buy. I suggest three bedroom, two bath, 1,200 to 1,700 square feet, not too small that families don’t want to live there, not too large that you’re having extra bathrooms and extra walls of paint, electrical outlets, all that sort of stuff. But cookie cutter type home that everybody wants to either rent or buy. There are so many of those out there. And once you find a good city that has good inventory, right price, right rent, then you pause looking at properties. Do not even call realtors. In fact, I get some students say, Dustin, I found a great city. I’ve also already have six realtors sending me deals. I’m like, no, no, no, they’re not sending you deals. They’re not. That’s the last step is finding the properties. If you bought a property right now, who’s going to manage that? Who’s going to make sure that you’re making money every single month and not losing money? They’re like, I don’t know. I said, the first thing you do, once you find a city that has good inventory, The next step, literally the next step is make sure that you can invest there by finding your quarterback of your team or the quarterback of your business is your property manager. They’re going to help you make money, save money, protect your asset and make sure things are done right. So you can go literally play with your kids or do whatever you want. And so we find city, good check, inventory, check. Then we interview many property managers. Now, that’s the key to in finding the experts. we don’t just interview one and say, oh yeah, you got a pulse. Come in here and manage my entire business. No, no, you don’t do that. You have to just imagine you started a whole convenience store You would not see somebody walking across the street and say oh yeah come on and manage my money inventory customers You wouldn do that You would hire them very slow by interviewing them multiple times and then getting many different applicants Same thing with a property manager. So once you have that dialed in, you find, I love having at least one, two, and three different property managers. I’m like, my number one, this is one I’m going to go with. And then if they fall apart, I got a backup. And then I got a backup there. this I hammer this home because you’re you will be pulling your hair out if you do not have a good property manager and if you don’t have a backup then you’re scrambling so from there you want to find contractors I love handymen handymen are absolutely amazing and as well as you want to make sure you get the financing in order I have at least three or four different financing companies that I can go to right away and all my students go to because I pre-vetted them but you want to make sure that everything is done before you even buy the property and then like I said you when you see a good property, you analyze it. And in fact, I give all my students an analyzer, but they analyze a property. And if it’s a good property, they now tell the property manager, tell me about this property. Will you manage it? How much do I rent for it? All that. Because once you get the experts doing the work for you, it makes everything so much more simple.
Charles:
That’s great advice. How do you, how does an investor incentivize a property manager?
Dustin:
Incentivize. I do not give them anything more. In fact, I take things away. Let me explain what that means. So every property manager, they’re going to have their own terms, their own criteria. They’re not criteria, but like their, their, their, um, agreement, property management agreement. And I look for good company or a good property manager that I know I can count on. And I interview them with many, many questions and I see, okay, well, Hey, this fee that you’re charging, like, so I’ll give you example, some property managers, they charge if it’s not rented, like a minimum fee of like a hundred a month. I’m like, no, no, I’m not giving, if I’m not making money, you’re not going to make any money. And so if they say, no, it’s still a charge, like you’re scrubbed off the list. I don’t care how good they are because that just indicative in my mind that they are now going to be nickel and diming me. And at the same time, I don’t know how much, how appreciative they’re going to be with my property. That’s giving you an example. There’s so many more we go through. In fact, I have a list of like 25 questions and the answers, what they should be looking for for all my students. And it’s like that is like, I take away things. And what the incentive is, I’m an investor, obviously a business owner, but think of they understand investor. I’m an investor, I’ve got 15 properties, or I’m by I have five different cities that I’m investing in, or you might be thinking I haven even invested doesn matter you an investor and you going to be buying a lot of properties and you going to be going through them That is the incentive is that you going to get a lot more properties that they going to be managing because you’re buying properties.
Charles:
No, that makes perfect sense. So as we’re kind of wrapping up here, what would you say is the best and worst advice you’ve ever heard around investing real estate?
Dustin:
Okay, so the worst advice, I had already explained it. Well, no, I’ll give one more. I’ll give one better one. these TikTok gurus that have come on since 2020, they bought, let’s say they were, let’s Orlando and they’re, they’re by Disney. They bought two homes back in 2022 and now they’re Airbnb-ing it. And they’re saying, I am financially dependent with just these two homes. You can do the same thing. Give me a hundred thousand dollars and I’ll teach you how to do that. Well, they make money until they don’t. Meaning I’ve invested through, uh, 2006, the first crash in 2008. And then I’ve seen this run up. It’s very easy. In fact, it’s simple. In fact, it’s almost hard to not make money doing it the right way or doing it anyway, just by buying real estate. So the single family homes that are now Airbnbs, they’re now getting hurt. There’s gonna be so many foreclosures coming very, very soon. So you do not, here’s the, here’s the bad advice, buy a short-term property. That’s bad advice, but here’s how you fix it. You do not buy a short-term property unless you could long-term rent it and still make money. And then the short term is just icing on the cake.
Charles:
No, I totally agree with that. The short term, I feel it’s gone through a bubble with everybody doing it over the years. And it’s also one thing too, if it’s not penciling or if you don’t have, people aren’t traveling or whatever the issue might be, or there’s too many of them. Problem also is you deal with a lot of issues with the government, you know what I mean? With these properties where with the stroke of a pen, they can outlaw them, they can limit them. that’s, I mean, no one’s going to limit apartments, right? Or anything or housing like this. There’s such a limited stock of housing and we always need more. But they will, if people are taking those houses and making them the short term, they’re going to start then, you know, putting limits on that. And that can happen without you even knowing it. You know what I mean?
Dustin:
And supply and demand too. There’s so much, there’s such a glut of short-term properties. That’s why my rents have went up. Just think about that. A property that was a long-term property that people would buy and live in or rent are now so many more short-term properties. That why rents have skyrocketed because there so little long properties for rent And there so many short properties out there that properties are sitting on the market for so long and not getting rented because there so much and everybody having to lower the prices which if they follow as TikTok gurus they have a let say a a month mortgage that they have to cover when they’re having a hard time doing that.
Charles:
So Dustin, one more question before we learn more about your business. What has compounded the most for you over your career?
Dustin:
Compounded. I would say multiplying how many properties I have by far. I mean, if you think about the six different ways you make money when you buy real estate, And this is one property cashflow. We talked about that build income into your life and then equity capture. We buy it less than it’s worth. We usually capture 20% of the price by negotiating and getting the price down. That’s equity capture forced appreciation. You fix it up, you fix it up and you make it worth at least double or triple how much you put into it. Market appreciation. It doubles every 15 years, which is amazing. mortgage buy-down, which means the tenants are paying your mortgage. Tenants pay your taxes, your mortgage, your repairs. They pay all of that as well as tax benefits. I pay. It’s great for me, but just the way it is, the way of the world, the politicians are rich people. They get into politics to make laws for themselves to benefit them. So if you just learn the rules that they play by, I pay almost no money in taxes, which is amazing. So that’s the compounding effect. Now with 30 plus properties, think of that first one like a snowball. It’s a tiny snowball. You just make it a small one in your hand. You start rolling down a hill and then you take that cash flow. You don’t spend it. You don’t buy a car or anything. You turn that into the next one. And then that next one, let’s say $300 now turns into $600. Or like I told you, the multiplication, $500 times 10 properties is $5,000. But then over 20 years, oh my goodness, your life changes. One quick last thing I’ll share. for you listening, when is the best time to plant a tree? Well, it was 20 years ago. The next best time is literally today. And so I know you’ve been listening to Charles’s podcast. I listen every week and you do not want to be 20 years from now thinking, I wish I would have taken action. I was listening to Dustin and Charles on his podcast and I should have taken action then. No, you do not want to be thinking that 20 years from now. 20 years from now, you might be thinking, I’m so glad I listened to Charles’s podcast and I took advantage of all of that and I bought my first property. I started in 2006. Now it’s 2026. 20 years now, I’m telling you, by far, I lived out that proverb. I’m so glad I planted that tree 20 years ago.
Charles:
Yeah, no, that’s fantastic. Great advice. So Dustin, how can we, our listeners, learn more about you and your business?
Dustin:
Absolutely. Well, my goal is to help a million people to invest in real estate. I make my money through real estate. Do you mind if I give everybody a course completion? for free?
Charles:
Sure.
Dustin:
So I’d love to just get this course. It’ll show you everything, how to find an area of the country to invest, how to build income, how to make sure you’re making money for financial freedom. If you text the word rental, R-E-N-T-A-L, rental to 33777, rental to 33777, or go to masterpassiveincome.com forward slash free course. I’ll give you my course completely you for free. And then you can get started investing another couple of quick things. So master passive income is my podcast. I’ve been doing since 2015. It’s a solo show. I just literally just keep coaching. I just talk. I’m a talker. So I just keep talking. And people have invested just from getting that course and change their life. They listen to just the podcast, and they change their life. So look at master passive income. It’s on YouTube as well. But one quick last thing. I’ve actually had a lot of fun on Instagram. So I’m over 300,000 followers now on Instagram, didn’t buy anyone. It’s just hard work building up this content. So you can find me, even reach out to me, say, I listen to Charles’s podcast every single week. I heard you on there, the Dustin Heiner, T-H-E Dustin Heiner. I’d love to chat with you. I’d love to know that you listen to Charles’s show every single week. Just keep coming back because you’re just going to get so many gold nuggets like this. But yeah, so that’s it. Master Passive Income. Reach out to me on Instagram at the Dustin Heiner.
Charles:
Okay. That sounds great. We’ll put those links to the show notes. Thank you so much for coming on and looking forward to connecting with you here in the near future.
Dustin:
Thanks, Charles.
Charles:
Hi, guys. It’s Charles from the Global Investors Podcast. I hope you enjoyed the show. If you’re interested in getting involved with real estate, but you don’t know where to begin, set up a free 30-minute strategy call with me at ScheduleCharles.com. That’s ScheduleCharles.com. Thank you.
Dustin Heiner is on a mission to help 1,000,000 people to invest in real estate for financial freedom. He is a real estate investing expert and Founder of MasterPassiveIncome.com, the amazing software for investors, IncomeBuilder.io and the live conference with hundreds of investors, IncomeBuildingLive.com
Being Successfully Unemployed at 37 years old by investing in real estate rental properties, he is now on a mission to help 1 MILLION people to invest in real estate and achieve financial freedom.
Coaching thousands of investors at MasterPassiveIncome.com, Dustin Heiner has become one of the leading real estate rental property experts.
Dustin started MasterPassiveIncome.com from his home in 2015, while being a full-time employee, married with 5 children, owning and operating 2 other businesses, and being a full-time investor. He is very passionate about his mission to help others become successfully unemployed and never need a job again.
Since then, Dustin Heiner has helped countless numbers of others to start investing in real estate rental properties. Even if his students live in very expensive cities, he shows them how they can invest all over the country.
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