"Fear is what prevents things from taking place in people’s lives and for change to happen"
Matt Recore (or “Matty” as I call him) is one of my best friends in the world. We met in 1999, our connection was instant, and we stayed up talking like schoolgirls until three o’clock in the morning. :^D
Since then, we’ve developed an extraordinary friendship. He was a groomsman in my wedding, I became an ordained reverend to perform his and his wife’s marriage ceremony, he was by my side in both hospitals, during my car accident and my cancer journey, and we both happen to be mildly obsessed UFC fans. :^)
Matt was also always financially ahead of everyone else I knew. He became a millionaire and figured out how to build wealth at a young age, and has kept it going—and growing—ever since. Everyone wants to achieve financial freedom to live the life they want, and today Matt joins the podcast to share not just how he did it, but how you can do the same.
He also introduces his new book, How to Purchase Real Estate at 0% Interest: To Help Sellers Get What They Want and To Accumulate Paid Off Houses Faster For Your Retirement, in which he shares stories of how he exploded his net worth.
- Why seeing me in the hospital, both after my accident and my diagnosis, are among Matt’s favorite memories of our friendship.
- How Matt started his journey to financial freedom without a traditional education – and the moment he knew he didn’t want to rely on others to guarantee his financial well-being.
- Why fear stops people from achieving their goals more than anything else – and you have to act despite fear in order to succeed.
- The 10 reasons Matt chose real estate as his vehicle to build long-term wealth – and where someone should start if they want to get into it.
JOIN THE CONVERSATION
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Hal: Goal achievers, welcome to another episode of the Achieve Your Goals podcast. This is your friend, Hal Elrod, and I am about to bring my friend on here in a minute. Today, it really is my pleasure to introduce to you someone who, well, first and foremost, we’ll say actually this is not first and foremost. This is second and second most or whatever the word is but he’s someone who really figured out how to build wealth and become even a millionaire at a relatively young age and he’s someone that I’ve looked up to as a close friend of mine, one of my best friends in the world. I’ll tell you more about that in a second. But financially, he was always ahead of the rest of our peer group on the journey up. In his 20s, he was earning more than us. In his 30s, he just was always the leader on that front. And so, as somebody who really figured out the financial game at a young age, figured out how to build wealth at a young age and keep his wealth and keep it growing, I’m going to ask him to share with you not only how he did it but the advice and the steps that he can give to you so that you can do the same.
Now, I mentioned he also happens to be one of my best friends in the entire world, Matthew Recore or Mattie as I call him, but we met in 1999. I was opening up a Cutco office in Sacramento, California and he was roommates with the other Cutco manager in Sacramento and he happen to come home to this apartment. I was staying the night on the couch and he and I just stayed up until like 3:00 in the morning talking. We had never met before and it was just like one of those instant bromances I think as they call it. We totally hit it off, talking until 3:00 in the morning then he actually became my – even though he had a great job. He didn’t need an extra income but just to support me, he became my assistant manager and help me run my office that summer.
Matt was there when I was in my car accident. He was in the hospital by my side as much as anybody else, as much as my family was. He was there loving me and supporting me, and Matt was in my wedding. Then I went on to marry Matt and his wife. Let’s see what else. Recently, I went in my cancer diagnosis. Matt and his wife, Pria, flew out and they were by my bedside once again. So, he spent a lot of time with me in the hospital and one of our shared passions is the UFC, Ultimate Fighting Championship, and when I got to go to Madison Square Garden here a few months back for the UFC event for my Front Row Foundation experience I got to choose a very small number of friends and family to go with me and of course Matt was one of those friends because we go to UFC events. That’s like our thing, our passion.
And here’s the reason I’m bringing him on today is one goal that I think almost everybody has is around earning money or specifically financial freedom. How do you get to a place where you earn enough money to have freedom where you’re not living paycheck to paycheck and you have the freedom to live the lifestyle that you want? It’s a cliché, you can call it the life of your dreams, but Matt’s done that like at a very high level and he did it very young and he’s very smart about it. He’s very intentional about it. I am much less intentional about it. I’m much more by the seat of my pants, keep moving forward, make a bunch of mistakes and figure out and he’s much more intelligent in his approach to building wealth. So, it is my honor and my pleasure to introduce to you Matthew J. Recore or as I call him, Mattie. You there, buddy?
Matt: Yes. What’s up, Yo Pal?
Hal: What’s up? That’s how like every one of our conversations starts. I yell, “Mattie.”
Matt: Every one. Every phone call.
Hal: And then you come back with Yo Pal. It’s funny, man. I was a DJ on the radio I think everybody listening most probably know but my nickname was Yo Pal Hal and it just stuck and you’re like my closest friend. You being probably the primary friend, you call me Yo Pal more than you call me Hal or anything else, man.
Hal: So, man, this is an honor. I’m fired up just to have you here. I love spending. We’re just talking before we started recording. I love spending time with you. I’m probably doing a mastermind that you’re in. I said, “I just want to have another excuse for us to hang out more.” So, we really have a deep love for each other and we’ve shared a lot of memories, a lot of history. In fact, do you have a favorite? Like, anything come to mind as a favorite memory of ours?
Matt: Wow. There’s so many. There are so, so many. Probably can’t narrow it down to just one.
Hal: Man, I’ll give you two. You give me two.
Matt: Two? Two. Okay. Well, one of them is combined into one. I’ll combine the first into one. It’s the hospital both times. After your accident as well as when you were starting chemo, just the attitude that you had both times, just super playful, positive, focused on having fun and literally you were bringing up the room, bringing up the room next to you, bringing up the nurses, bringing up the doctors that were coming in on both occasions. And the challenges that you were facing at that time, both times, the first time, you weren’t sure if you were going to be walking again. The doctors were saying that it might not be possible because of your femur injury and hip injuries and your pelvis injuries. And then the second time you were facing having poison put in your body. Actually, even starting right then you were starting with the chemo and the challenges that were to come from that and just how positive and uplifting you were and playful. It was just so much fun to be a part of and so that’s always going to be a memory of mine.
Hal: I appreciate that.
Matt: Yeah. Those were special times even though it was really challenging times. We had lots of them. And then I think one of the other memories was you always had this dream to put on your first event like, “I want to put on an event and just one day I’m going to put on an event,” and then you just decided you put on the calendar one time. I think it was probably like around April or May when, remember, we’re talking in the phone. You’re like, “I’m putting on the calendar and I’m going to run an event at the end of the year,” and then I was there with you at the event and the entire time it’s like you had tears of joy running down your face as the event was going on. You’re just like, “Yeah. Oh my gosh, it’s happening. It’s happening. It’s happening.”
Hal: Yeah. Man, I’m glad I asked you that question. Those are beautiful. I’m getting all choked up for both but, yeah, that would be our first Best Year Ever Blueprint and that was – yeah, man. I rented a room. I did not know how to fill an event. I was like – but I put it off. Here’s a little bonus lesson for everybody is those things you’ve been putting off, put them in a calendar, make an announcement. That’s what I did. I was just like I don’t know how to sell an event. I don’t know how to put on. I don’t know how to do any of it, but I like put in a date and then I announced it in the Miracle Morning Facebook Group. I just said, “Hey, everybody. Mark your calendar.” I picked the location, the city, not the actual hotel. I said, “San Diego, California. This weekend, December. Our first ever live event as a community we’re coming together.” Yeah, man. And then when you do that, you force the commitment then you had to figure it out. You had to figure and now, gosh, this year December 7 through 9, 2018 will be our fourth I think, fourth or fifth. I don’t know. One of those.
Hal: And you came, dude. It was cool. You came, and you brought your wife, Pria. That was all fantastic.
Hal: Beautiful man. Thanks for sharing those. I appreciate that.
Matt: You’re welcome. What’s your favorite memory of ours?
Hal: Yeah. Again, there’s so many. It’s funny. My mind whenever I think of you like UFC is our shared passion that we get all fired up on so my mind goes there. But, honestly, I think there are two really meaningful moments in your life that I got to share, and one was marrying you and Pria. I was the reverend. I think that’s the right term and, dude, I don’t think you know. I mean I couldn’t tell you because you were dealing with your own nerves, but I was so nervous like I was so nervous because it’s like it needed to be word for word. So, oh man, I was so nervous, but it was just special to stand in the front like right in the front and look out at all your friends and family and share that moment with you guys and be a part of that moment was special.
Matt: You did so great too. You just took it on. There were so many aspects to it and you did them all. You’re incredible.
Hal: Yeah. We had a lot of different – your wife’s culture. There’s a lot of different traditions. We were lighting fires and candles and stuff that everybody is doing. Yeah.
Hal: And then the other is kind of somewhat related which is just recently when I met your twin girls for the first time and I think that was so meaningful for me because as I love you so much and when I got to have kids and I think I’m like, “Matt, get Pria pregnant like have kids. Trust me, it’s going to change your life. You’re going to like it.” Oh, I was so excited for what I knew that experience would do for you in terms of just your growth and your fulfillment and I knew you’d be such a great dad. And so, it was like when I finally heard you’re pregnant or Pria was pregnant I was so excited and then when I got to actually meet you and to see you with the girls and be like, “Oh, Mattie!” Watching you enjoy fatherhood was special, man.
Matt: Nice. Well, thanks for encouraging that. I didn’t need the encouragement but thank you. It was and has been very special. A double blessing for us.
Hal: Yeah. And a lot of work. I mean, I always said I’m like, “Oh, man you’re having twins? That’s amazing.”
Matt: Yeah. We’ve learned that one plus one does not equal two. That’s for sure.
Hal: That’s true. We relate it to your financial like compound interest or something like that, right? There’s some pretty correlation there.
Matt: The first compound. Yeah. So, we’ll talk about compounding and the power of it.
Hal: Yeah. Yeah. So, let’s dive in. I mean, the topic today, it’s fun to reminisce with you, man, but the topic today is really around financial freedom and I think that I haven’t thought of the top or the title of the call today or the podcast or conversation but I think it’ll be probably around financial freedom or building wealth of real estate or something along those lines but let’s just start with a really overarching question which is how would you say, how did you become financially free?
Matt: Wow. I think I’ve always just wanted it. I’ve always just wanted it and I think I just decided to be. I didn’t take the traditional route and go to college and things like that, so I really took the path of self-educating via books and tapes and seminars and I went to work on myself and decided to learn everything that I could to help me get to financial freedom. And I had a job at the time working as an engineer and I actually hate it. I literally hated working for someone else and I always wanted to find…
Hal: That was with Cisco?
Matt: That was with Cisco Systems. Yeah. And while it was a good paying job, I knew there was more for me and I knew that I just wanted to be more in charge of my own destiny especially as I saw the industry go through some shifts and some changes and saw some friends and colleagues of mine be on the short end of a stick of those changes and I had to deal with a lot of myself in that way too. So, I didn’t want to rely on someone else as I got in my 30s and 40s and I wanted to begin to plan to be more in control of my destiny.
Hal: If you don’t mind me asking, what age were you when you started at Cisco? And then when you left Cisco, what was your annual salary?
Matt: I was the youngest engineer at Cisco, the youngest sales engineer. I was 21 years old when I got the job.
Hal: Oh, wow.
Hal: And your college was like in your 30s, 40s, 50s, right?
Matt: Yes. Yes.
Hal: You’re like the Doogie Howser of Cisco.
Matt: I was at the time. I was. And they actually called me embryo was my nickname in the company because I was like a little baby, I mean, younger than baby to them. So, yeah.
Hal: What’s your annual salary?
Matt: My annual salary was 100K paying, something like a 40K bonus. So, at the age of 21 I was making 140 a year and so it was definitely it could’ve been a comfortable life for sure, but I think at the time I knew there was more. I knew there was more that was possible, and I didn’t like to rely on somebody else, I guess, to create it. Especially when there’s a recession that hit and I saw how when the recession hit, how literally everything changed like what you thought was stable wasn’t and that can happen in any industry. Some block can come along, some change can happen, and everything can be turned around. So, I didn’t want that for myself in my 30s and 40s and luckily, I was 21 and I can plan ahead to not have that be the case for me. And luckily so, I got hit with twins this year and my wife and I did and luckily, I’d saved over these years to be able to make things easier on us so that we weren’t struggling as much, and I had a business that was sort of on autopilot and I can step away and I can also provide help that my wife needs to be able to and for us to be able to provide the level of care we want to provide. So, getting to financial freedom really helped in that way too and so many other ways too.
Hal: Yeah. Let me just highlight that for everybody listening that Matt was, one, you’re 21 and you’re earning roughly $140,000 a year which is a phenomenal salary for anybody, but you saw that you still would be a slave to your job and you wouldn’t, you couldn’t scale that, you couldn’t grow that, and that you were not in control of your destiny so to speak because if Cisco is sort of laying off sales engineers, you as embryo might be the first one to go.
Matt: You’re right.
Hal: So, I love that. For anybody listening too, yesterday I was interviewed by Geoff Woods. Mattie, he runs the company, The ONE Thing, which is based on the book, The ONE Thing, so he works with Jay Papasan and Gary Keller and he shared a great philosophy from Gary, real simple but he just said, “Gary always says that we are only five years away from anything,” I’m butchering the quote, but it was something like, “We’re only five years away from anything that we want for our lives, like anything.” Like, within five years you could become a millionaire, you can go from broke, you could do and change anything in five years. And so, for anybody listening I’d love for them to consider like whatever age you are, doesn’t matter if you’re 21 or 51 or whatever, if you’re in a spot where you’re going, “Man, I am in like the next five-year path on the journey that I’m on now and the job that I’m in.” Maybe it’s because it’s not earning the amount of money you need or maybe it’s because you’re not fulfilling that job and you’re going to be miserable for the next five years realize that if you do what Matt did, if you pivot and I know, Matt, you’re going to give specific steps on this today what to do and how to do with real estate, but you have to pivot. Literally, five years from now you can be financially free. Think about that. Five years from now you can be financially free. It might even happen sooner but, yeah.
So, what do you think holds people back from becoming financially free? Because it’s a goal that every single one of us has. It’s something that everybody wants. Like you said it, you wanted it, but then you followed that up with, “I decided,” like, “I made a decision and I started educating myself on what I needed to do to become financially free.” What do you think prevents most people from getting there?
Matt: I think the biggest thing really there’s two things, but I think the biggest thing is fear. Fear is what’s stopping people. Fear is what prevents things from taking place in people’s lives and for change to happen. And so, fear takes on multiple different faces and shows stuff in different ways. So, the fear of failing, for example, the fear of leaving that current job or industry. The fear of rejection, maybe not making the calls or making offers on things that could create financial freedom for you. Or the fear of changing who you currently define yourself to be. So, a lot of people have an identity for who they are and what they are and the identity of being financially free or even pursuing that is a huge jump for them and they just don’t see it as a huge need to do to go in that route and to do that.
Hal: So, I think they got to have… Oh, go ahead. Sorry.
Matt: Go ahead. Yeah. It’s just not a must. I would say it’s more of a nice to have but it’s not a must to have right now.
Hal: So, that’s the second reason so it’s fear but then also that it’s not a must for people.
Matt: Yeah. It’s not a must. Like, they’d rather be maybe playing video games or watching Netflix rather than reading a book on building wealth or thinking about how others are so privileged or lucky or have it easier and use that as an excuse for not doing what is necessary for them to have that or to create that.
Hal: So, I think we all have fears, right? We all have fear of failure. All the fears that you listed, fear of failing, fear of rejection, fear of change. I think you said changing your identity or changing who you are like we all have those fears so would you say the difference is that you just do those things even though you’re afraid of them. Is that what sets people apart that either let their fears dictate their actions or they just do the things then overcome the fears?
Matt: Yeah. Acting despite of fear. Act. The key is action. So, maybe it’s not the right action but it’s taking action but definitely getting a strategy or getting a coach or someone that’s been down the path that you want to go down or is where you are, that definitely can compress the learning time or help you to avoid mistakes as you take action and move in that direction.
Hal: Got you. What about related to creating financial freedom? What about avoiding what causes someone to go broke or to, I guess, you could say live above their means to where they never get ahead, and they never create financial freedom?
Matt: Yeah. Well, I’ve seen that many times. I think we had some shared friends as well that they make enough money to be financially free but there are things that get in their way and I love Charlie Munger’s quote on this and Charlie said, “There are three things that cause a person to go broke.” He said liquor, leverage, and ladies that cause a person to go broke. Well, that’s very direct but I translate that to vices, debt, and getting in the habit of impressing others with things you don’t necessarily need. So, that can also definitely deter or kill the progress towards financial freedom: vices, debt, and impressing others.
Hal: That makes sense. And those are things that I think we have to put ourselves in check and be aware. I think working on ourselves helps like when I used to before I read a bunch of books on spirituality and enlightenment, I used to be very ego-driven and I was trying to impress others. That was like a real driver. And I know you and I were both that way when we were younger. When we met, we were 20 when we met, and I think we’re both in that realm, but I think working yourself in overcoming that and realizing that there’s more to life than the car you drive or the house or just more to life than impressing others. I want to ask then. I know you have ten reasons that you believe real estate is one if not the best vehicle to build long-term wealth. Before I ask you that, I want to ask you this. When I met you or not when I met you, when I moved in – actually when I met you, but I think when I moved in with you in 2004 I lived with you.
Hal: I was renting a room from you. Then you were a stock trader. You were up every morning like 4:00 in the morning or 6:00 in the morning or whatever and you were day trading and you did really well. You grew a lot of wealth that way. Why did you switch? Because I think a lot of folks think, “Well, I could make money in the stock market or maybe in real estate,” or maybe they’re not sure which is better. Why did you switch from stock trading which I don’t think you do much of anymore to real estate?
Matt: Well, I was doing both at the same time, but my flipping and my real estate business was very different than it looks like now. Why did I switch? I think I switched because honestly, real estate is easier and…
Hal: Whenever you’re saying that it was just so that it was a stressful life because you wake up every day, marquee goes up. It’s a good day. Marquee goes down. You’re depressed and you’re freaking out.
Matt: Yeah. So, the market is manic-depressive. It’s often down and literally, if you allowed yourself to ride those swings, you can become that too. It takes a very strong emotional center and principles and really focusing on the fundamentals of a business to be able to be the only person who is able to think rationally when everyone is thinking emotionally about a particular business as an example and know that that business is a solid business and because you’ve read the annual boards you know the business, to be able to act despite in just completely opposite of what everyone else is saying. And so, sometimes it takes a long time to be right and to show that over time. So, just from my personality and for where I want to go and for just results that happen for me, investing in real estate just made a lot more sense and you can understand the timing aspect of real estate as well. There are different ways that you can understand timing, when to get in, when to get out, and use that to really, really accelerate your wealth as well with real estate.
Hal: Got it. So, I want to get some tips from you on for somebody listening that’s never and I want to do these 10 reasons why real estate first but then I want to actually ask you about like what your advice is for someone that’s never invested in real estate. I want to ask your advice on where they should start. Should they just start saving and wait for the next downturn? Like so, if you want to kind of marinate that while you’re sharing. So, what are the ten reasons why real estate you believe is one of the, if not the best, vehicle to build long-term wealth?
Matt: Okay. Well, I think the first reason is because you can start learning and investing part time around your current job or whatever you’re doing, there are money right now, and in most cases your employer will not think it’s a conflict of interest to learn and to explore real estate investing as a business on the side or doing it on the side, whatever you’re doing. Whereas if you start in MLM or work in an MLM or let’s say you start another business, a carwash business or something like that, they may say, “Well, that’s a conflict of interest,” so you can really learn and grow around what you’re doing full-time and I think that’s huge because you can take baby steps into it. And so, the other thing though is your knowledge is cumulative. So, what you learn today you may not apply for six months or a year. Like, as an example, something I learned about buying properties at 0% interest I didn’t apply until 10 years after I’ve learned it for the first time. And so, I’ve since bought like six houses at 0% interest since then, but it took me 10 years from the first time that I learned that concept to really understand the power of it and then to actually apply it.
And then I think like huge, huge reason to invest in real estate is the wealth that can be created through amortization. That where a lot too don’t know what it means but it’s literally just it’s the wealth that’s built from the paying down of the mortgage over time and this is really powerful because like a low-interest loan over a short period of time like 15 years or 0% interest loan. The principal paydown is huge and that acts as a really big savings account and the wealth building account for you too. It really explodes your net worth over time. And so, the fourth reason too is appreciation and so demographics really, really impacts appreciation and the market that you’re in really impacting and the timing, a lot of other things but appreciation can be huge especially on the bigger numbers. So, if a market goes up by 10% and you own four houses in that neighborhood, those four houses may be worth $1 million total. That 10% gain is $100,000 and net worth it. It just showed up.
Hal: Now, with appreciation just based on timing and actually this will probably maybe answered in the next question and ask about what should somebody start doing now to invest or prepare to invest in real estate? In terms of appreciation, where are the markets at right now? Somebody’s listening to this in 2018. What’s your prediction? What are your thoughts? The next crash? You predicted, you’re a ninja like you called me. It’s when you called me, you’re like, “Hal, there’s this new neighborhood. You should like check out houses and buy a house here.” It’s like 2005 or I think, yeah, ‘04 or ‘05. I’m like, “Okay.” And I went and like I just bought a rental here and I went down to this awesome house, bought the house, loved it.
And then you called me in like a year, a year-and-a-half later and you go, “Hal, you need to sell your house.” And I go, “But, dude, what do you mean? I just bought it. I love it. I’m not selling it.” You go, “The market is going to crash.” And you said, “I’m selling all my rentals in your neighborhood,” and I went like emotionally I couldn’t do it, right, which is I think a big problem for people to get emotionally attached. They’re residents. They’re real estate and I didn’t do it. I didn’t take your advice unfortunately and I bought a peak to the market or close to it. I refinanced the peak and the market crashed and I had to sell my house for 50% of what it was worth at that time. My credit went from like almost 800 to I think about 500. So, being that you are Nostradamus a little bit here and you predict really well, in terms of appreciation, what would you share? What do you think the future of the market is like when do you think the next crash is coming? Is it coming in the next six months, in the next year or two years? What do you think is going to happen generally speaking?
Matt: Well, that’s a tough question because there could be a listener right now in Florida and Florida’s market is very different than let’s say a different part of California or Austin or DC is different than Seattle. So, all real estate is local so it’s going to vary depending on many different factors, but I would say Florida has a lot of room to grow because they have a different foreclosure process and they’re like what California was in 2012, 2013 so they’ve got a lot of room to go up still. But and there’s other markets that they may not have as much room to go up. So, all real estate is local, so you got to definitely keep that in mind in your planning process. So, I run my business really conservatively. I’m at a really competitive hot market in northern California and I don’t think we’re maxed out here based upon incomes have grown a lot since 2005 to now 2018 and we’re still not at a peak price back in 2005 that people make substantially more on a median income basis than they did in ’05 or ’04, not substantially, maybe 20% or so. So, we’ve got some room here and interest rates are lower, so a lot depends on interest rates and where those go.
Hal: So, there’s a lot of factors and it’s not…
Matt: There’s a lot in there.
Hal: There’s no simple answer. I got it.
Matt: There’s no simple answer. It’s all local and just the key is to get started though, really get started.
Hal: I interviewed David Osborn the other day or two weeks ago and David is a friend of ours and that’s what he was saying. He’s like, “Get started,” and you’re proof of this, right? He said, “There are always deals and you just have to get – you just have to bear down and get really start looking,” and he said, “There are always deals in every city, in every economy. You just have to find the deals.”
Matt: That’s right.
Hal: All right. So, what’s the fifth reason that real estate is the best investment or best vehicle to build wealth?
Matt: Something called depreciation. It is a tax benefit and deduction just for owning rental real estate. So, it’s not an expense that you pay but it’s a credit that you get on your taxes and so it is absolutely beautiful. So, depreciation. And then instant equity. Every house that I purchase I walk into instant equity with some 50,000, some 100,000, some 150,000, some much more, some a little more than that. So, every property right off the bat I’m walking into instant equity and if you buy right, you definitely can have that. And then cash flow and you can also intelligently leverage and you also can unintelligently leverage too but that intelligent leverage can create a lot of growth when it comes to appreciation. And then you can put very little down to get in and to get started and you can really start small and you can grow bigger and bigger and bigger every year and grow really, really big. I’m starting really small and back to your five-year analogy and in five years your life could be radically different than it was five years prior.
Hal: Yeah. That’s so inspiring I think for anybody. If you’re not where you want to be, if you’re feeling helpless, we’re never hopeless. It’s just a matter of changing your strategy and learning from people that have come before you. In fact, I definitely want to mention you wrote a book. We’ll get in a second but right now to get people some advice, if someone’s listening and they never invested in real estate, what should they start doing right now either to invest or if they don’t have money saved to start buying and I know your book is about buying with 0% interest or there may be some strategies obviously there but what would they do now to prepare? Like for me, I was always saving or waiting for the next economic crash, saving so that I could invest in real estate when the economy crash. So, would you recommend counting toward saving a bunch of money for it or are there ways now to go get a loan and get a property in the next month after they’ve done the research?
Matt: Great question.
Hal: Yes. So, what do somebody do? To invest now or prepare to invest in the future?
Matt: I think the first step before you take action is knowledge, so you got to have some knowledge. So, Amazon, Google, these sources will allow you to get that. There are also some great mentors that offer their services that some charge a little bit of money, but you can get started by learning from them. There’s a lot and there’s a lot of people teaching different strategies online so try to find someone. If you can, vet them and seek them out, make sure that they have a ton of integrity. That’s the most important thing that you’re going to want to vet through. So, anyone that you learn from, make sure that they’re a very high integrity person and they’re actually doing what they say. So, I would say get started by learning and then start talking to sellers, start talking to property owners and that’s 99% of my deals have come from a seller, a private seller, and negotiating a deal with that seller.
Hal: Okay. Now, you say you, step one, is learn which I think that’s a great point. Don’t just dive into to something. So, who have been your influences when it comes to in the case of anybody listening who wants to go, “Okay. Well, Matt, you’ve obviously you’ve gone before me. You’ve learned how to do this business and how to make money and build wealth in real estate,” so who have been your influences?
Matt: My biggest influence in terms of real estate has been this guy named Bruce Norris at Southern California who has become a friend of mine now and he’s had a huge impact on me and someone that he’s interviewed a few times. a guy by the name of Mike Cantu has had a huge impact on me. And then just in terms of understanding investment philosophy, Warren Buffet and all these annual letters to shareholders, he’s had a huge impact on me and going to a few of his meetings. And then, of course, Tony Robbins that’s had a big impact over the years and lots of different special and inspirational ways.
Hal: I went to my first Tony event with you in 2000 I think, dude.
Hal: Where we met Adel, the world champion in memory.
Matt: Yeah. He’s incredible.
Hal: Another good memory.
Matt: Yeah. And then you, Hal. You’ve been a big influence too I mean just in terms of a friend.
Hal: Thanks, brother. Thank you. So, you wrote to – you have a book. This is your first book which I’m so proud of you as a fellow author of its How to Purchase Real Estate at 0% Interest and the subtitle is To Help Sellers Get What They Want and To Accumulate Paid Off Houses Faster For Your Retirement. Why did you write this book and what’s going to do for people?
Matt: I wrote the book because no one was teaching it. Literally, there is nothing out there. I learned the strategy many years ago and it took, like I said, about 10 years to apply it. No one was really teaching it, so I was like, “Well, let me put down the stories of my six 0% interest deals and show that it’s not a fake thing that it can be done. It can be done by anybody. And let me share exactly how I did it.” So, there’s not much fluff in there. There’s not much mindset which is very important though. There’s not much mindset stuff in there on building wealth. There’s really just six different stories of my deals and it gets right in that nitty-gritty and why each seller did it. Why would a seller sell with 0% interest? It sounds like, well, that’s not a smart thing to do. But each one of these people were multimillionaires and not, well, not each one.
Matt: Almost all of them. All of them and they created it themselves and they made sense for them for different reasons and I help them to see how it would make sense of course. You’re not going to get a call from anyone saying, “Hey, I’d like to sell my property to you at 0% interest.” That’s not going to happen. You’re not going to make offers on MLS at 0% interest and get those accepted. But part of what this book will teach you and this book will teach you is how I will go about doing that with each one of these sellers and how they realized and still realize it was a great thing for them to do and I’m still on great terms with each one of these sellers. And so, it only takes one or two 0% interest deals to really explode your net worth into five years like we’re talking about because every payment goes to principal and there’s no interest. So, really, really it explodes your net worth over time. And so, I’ve done six deals now that totaled over $1 million in 0% interest loans all in a very competitive market in Northern California with very high prices and a lot of competition and each one of these sellers could’ve sold to anybody else and taken a cash offer, but they chose my 0% interest offer.
Hal: The advantage of that is that, like you said, everything is going toward principal so you’re building equity much faster, you’re building your net worth. You’re not throwing money away if you will, right, toward interest?
Matt: Right. Right.
Hal: I mean, I was showing my wife the other day our mortgage statement and she’s like, “Only that? What? Just like that’s all just going to interest?” And I explained to her how it all – not that I could explain to her very well, but I said, “Sweetie, the more we pay off, the more will go to our principal,” and I’m like, yeah, but it sucks.
Matt: The amortization schedule on a 30-year loan, that’s something really steady and the bank really wins the first 10 years and you’ll notice you get a lot of refinancing offers after your 10 or 15 years in to a mortgage because they really want you to get back into a 30-year mortgage because the benefit to the investor or the benefit to the homeowner is in the last 20 years or in the last portion of the mortgage in a huge, huge way. That’s where the majority goes to principal towards the end.
Hal: Yeah. For anybody listening, amortization and correct me if I’m wrong, Matt, but it’s where the majority of or a much larger amount goes towards interest just to kind of thrown away if you will in the tax deduction that you get in the beginning and then it just gradually over time each payment slightly more goes toward principal, each payment each month but, yeah, in the beginning you’re just paying the bank. It’s just, “Hey, thanks for the loan. Here’s a ton of money that I’m just going to pay you and a little bit on my house,” but yeah. So, what is your real estate business and what does it look like right now? I guess, this to me is important which is for our listeners, what is the lifestyle for you in terms of now that you have twins and you’re a super involved dad, you’re up with those girls all night long. So, it’s so funny, like the first six months I’m like, “How are the girls? How’s being a dad?” And you’re just like, “I can’t.” Like you’re just exhausted. You’re like, “I’m not getting any sleep. I love them but I’m not getting any sleep.” So, anyway, because that’s why the point of doing this, the point of reading Matt’s book, the point of investing in real estate isn’t to be a real estate investor. It is to create financial freedom. It is to create enough income that your income exceeds your expenses and then you work when you need to work, when you want to work, and it’s not where you’re having to work. So, what’s the real estate business look like right now and what type of lifestyle is that affording you?
Matt: Wow. I think that’s one of the biggest advantages of real estate is the lifestyle. It allows me to work when I want and however much I want but it happens to be so much fun that I’m working a good amount right now but, yeah, so it’s helped me to be able to pay for help for example with our girls and we do have night helps still because it’s tough in the night. For each girl woke up like four times each last night and they’re not at the same time. So, my wife is a gem and she’s working her butt off and still breastfeeding. She’s incredible. So, my business right now is I got a great team and we buy between four and eight houses per month and one to two of those properties per month are kept as long-term rentals for me and the other one to two are kept as medium-term rentals and usually during that medium term we’re solving a problem with the house or with a tenant maybe and the tenant hasn’t paid in a long time and we’re helping out that seller to get that tenant out so we’re purchasing the property with the tenant in place and we’re going through the eviction for them. It’s a family member and they don’t want to be the bad guy, but they want us to be the bad guys, so we take over that situation for them. And then the other two to four, fix and resold within about six months. And so, there’s a cash generation part of the business and then there’s also a long-term wealth generation part of the business. It involves holding the seller financed space rentals while those rental loans pay down over time. So, I could stop working but I’m having fun.
Hal: Yeah. You’re like me. You’re a workaholic so we enjoy our work, right?
Hal: So, I remember you told me a long time ago that you’re – and I think you’ve exceeded this. In fact, I wanted to get the number of rentals that you have now but when you first were kind of starting in real estate investing, I believe you had said, “My goal is to,” I think it was to purchase 20 rentals, pay them off over the next 10 years and then have the cash flow from 20 completely paid off rentals getting rent every month that will support your lifestyle for the rest of your life and not to mention they’ll appreciate. You could sell them off if you need a chunk of cash or whatever. So, I know that was the goal. Have you exceeded that goal or is that still the goal? Where are you at now?
Matt: And the goal is similar to that. The goal is more rentals though and definitely having them all paid off. And the key is also A and B neighborhood rentals as well. So, I want to…
Hal: What does that mean?
Matt: The rental. I want the rentals to be in great neighborhoods.
Hal: Got it.
Matt: A and B neighborhoods and be positioned for long-term appreciation. So, that’s the goal and, yeah, many paid off houses.
Hal: My goal is that we buy a house in Austin, Texas and live happily. That’s my goal.
Matt: That’s my goal too. One day I would love to live close to you. That’d be beautiful.
Hal: I know. So, our lives are perfect. We got our families, we got our babies except for we are too far away from each other. That’s the only thing.
Hal: Awesome, man. Well, I’m excited so the book, everybody listening, it is How to Purchase Real Estate at 0% Interest: To Help Sellers Get What They Want and To Accumulate Paid Off Houses Faster For Your Retirement. If you want to build wealth, if you want to have your financial future five years from now be radically different than now or radically better if it’s already great but you want to be financially free, Matt has done it. He’s done it consistently for, gosh, I’ve known you for 19 years now and you’ve been doing it and growing and learning and contributing. One thing I forgot to mention by the way. This is probably in the memory bank, but that Matt leads the Basket Brigade every year where for years and how many years have you done the Basket Brigade?
Matt: Many, many years. I think now for…
Hal: For a decade probably?
Matt: 17, 18 years now.
Hal: Oh, my goodness. So, yes, so we deliver turkeys in Sacramento to poor families or lower-income families and we just surprise them at the door with a full Thanksgiving meal and we meet in the morning at the Safeway and Matt and his team of people of friends that he recruits to support and we all go in and we buy a bunch of Thanksgiving meals and then we go around and get back. That was Tony Robbins inspired, right? That’s something that he…
Matt: Yes. Yes. Yeah.
Hal: Yeah, man. You’re a good man, Matt Recore.
Matt: You are too, Hal. I love you so much and my phone is about to die. It’s on 1%. Poor planning on my part.
Hal: Perfect timing. We just wrapped up. Cool. Thank you, brother. Well, goal achievers, thank you for tuning in. If you want to meet me in person and spend some time together, I’d love to spend a few days with you, go to BestYearEverLive.com. As Matt mentioned, one of his favorite memory that was cool for him to share was our first ever Best Year Ever Blueprint where tears were running. I was just crying. I was like in the back of the room just choking up because it was a long time coming. I mean, every year they just get better and better and better and Jon Berghoff helps to make that happen but yeah. Well, alright, brother, I love you. I hope we go to a UFC event soon.
Matt: I love you too, Hal. Yeah. Looking forward to it.
Hal: And, goal achievers, thank you for tuning in. check out Matt’s book on Amazon and I love you and I will talk to you soon.