The Passive Income Guide

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Dustin Heiner – Master Passive Income

 

 

Podcast Overview:

00:00 Traditional Career Path Critique
05:08 Awaiting News: Anxiety in Office
12:20 Avoid Property Management Pitfalls
18:26 “Understanding Financial Independence How-Tos”
22:23 “Slow Hiring, Fast Firing Strategy”
27:01 Understanding Property Financing Options
33:58 “1% Rent Rule for Purchases”
41:40 Real Estate Tax Strategy Insights
47:13 Real Estate: Unlocking Business Benefits
48:30 Out-of-State Real Estate Investing
56:54 “Free Real Estate Investment Course”
58:58 “Debt-Free Investing Foundations”
01:04:49 Supporting Others’ Success

Podcast Transcription:

Dustin Heiner [00:00:00]:
I get a call from the boss’s bosses, boss’s secretary, like top dog. And she says, Dustin, would you please come in the office? And I paused for a second. Sure. I hung up the phone. I said to myself, why are they calling me the office? Like this isn’t normal. If I get laid off, does that make me a failure as a father? The last time I walked to my car, I felt like I was walking on clouds because I knew I would never ever need a job again. If you build the business first, then you have the experts that are doing it as opposed to you hoping that you’re doing it right. Especially if you’re investing out of state.

Dustin Heiner [00:00:27]:
Anybody that you hear, let’s say Instagram or TikTok, the people that have been around since 2020, 2022, they started, oh, I bought three properties and I’m a millionaire, blah blah blah. I’ve now taught my 16 year old daughter to buy her first property. So she bought her first property three months ago. It’s an active loss for you, so you can depreciate. $100,000 is what I did. Everything around real estate, I figure, well, shoot, what else can we do? Well, people need homeowners insurance, maybe I might go down that route. Do you mind if I just give everybody my course for free?

James Kademan [00:00:54]:
You have found Authentic Business Adventures, the business program that brings you the struggle stories and triumphant successes of business owners across the land. Downloadable audio episodes can be found in the podcast link found at https://drawincustomers.com. We are locally underwritten by the Bank of Sun Prairie Calls On Call Extraordinary Answering Service as well as the Bold Business Book. And today we are welcoming slash preparing to learn from Dustin Heiner, the founder of Master Passive Income. And today with Dustin, we’re talking two of my favorite subject, business and money. So Dustin, how is it going today?

Dustin Heiner [00:01:29]:
James, I’m blessed man. Thank you so much for having me on the show. Yeah, it’s great business and money. I find it’s almost a game. Like if you play well, you’re rewarded by making money in business. And so I invest in real estate, have lots of properties, apartment complex and all that sort of stuff. And with that I have cash flow that allowed me to quit my job and I like the term successfully unemployed. And now I use the rest of my time to build businesses.

Dustin Heiner [00:01:55]:
I love building businesses. One of my favorite things, like it’s a game. So I just keep trying to keep trying to do better at that game. But thank you so much for having me on the show.

James Kademan [00:02:03]:
Yeah, super cool. I appreciate you being on here. It’s interesting because I wrote in my book about how money is just a way, one way to keep score. That’s all just a game. Money’s a tool and it allows you to do certain things that people without money just can’t do. So besides time and effort, I guess money is the other tool. So time is finite money, there is no ceiling. So away we go.

James Kademan [00:02:29]:
But let’s get started talking with you about how you got started. You’re in a position now where a lot of people are fighting to be ant. So how did you get there?

Dustin Heiner [00:02:38]:
Yeah, yeah. So I started just like everybody we’re taught from, you know, when we’re born, you, you go to school, you get good grades and you take those good grades, you go to a college or university and hopefully, you know, get a degree and get in thousands and thousands of dollars into debt. And then you take that degree and you go to companies or you know, other places, organizations to try to get a quote unquote career there. Then you work 40 plus years of your life and then retire at 65, 70 years old on 40% of what you managed to save that entire time working that job, that just over broke job I call it when you work at a job. So I’m doing the exact same thing. In fact I get the most stable, secure job you can ever think of. It’s I’m working in California for a local county government doing technology. But California is not going away.

Dustin Heiner [00:03:27]:
Government’s definitely not going away. And technology so stable, secure job. But then I bought one rental property back in 2006 before the crash, bought one rental property and that property made me money without me working because my property did all the work. And I realized I needed to become an investor. But you know what happens, James? Life just got in the way. My wife and I started having kids. Eventually this is what happened that shoved me to become a real estate investor and a business owner was when my wife had our fourth child, I went on paternity leave. That’s where the dad stays home with the mom, changes poopy diapers and all that good stuff and you know, bonds with the baby.

Dustin Heiner [00:04:05]:
Well, after about two weeks I go back to work and in that same week I go back to work on a Friday at 3:30 in the afternoon, I get a call from the buses, buses boss’s secretary, like the top dog. And she says dustin, would you please come in the office? And I paused for a second. Sure. And I hung up the phone. I said what to myself, why are they calling me the office? Like this isn’t normal.

James Kademan [00:04:25]:
Give you a raise?

Dustin Heiner [00:04:26]:
Yeah, hopefully. But I. But It’s Friday at 3:30 and I’ve seen plenty of movies and that’s never a good sign. And I started thinking a couple months before I went on paternity leave, there was rumors or some rumbling going on that there could potentially be layoffs because the county was having trouble. I immediately shook it off. I said, there’s no way. I have great seniority here. My boss isn’t going to do a great job.

Dustin Heiner [00:04:46]:
So I shake it off. But then I get up and I walk down the hallway to my boss’s office. Well, this hallway isn’t very long. In fact, it’s kind of short. But every single step I took felt like the hallway got longer and longer and longer. And it felt like my feet became lead bricks because the weight of potentially losing my job was starting to weigh down on me. Well, I get down the hallway and I turn the corner and I see my boss’s door. His door is closed.

James Kademan [00:05:08]:
And.

Dustin Heiner [00:05:08]:
And I see a secretary there. Super sweet, nice old lady. And she says, dustin, would you please have a seat? 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. Well, I go and I take my seat and I start thinking about my life. Like, oh my goodness, if I get laid off now, this entire plan that other people told me to do, did I just waste my life doing this? And then we just had our fourth kid. If I get laid off, does that make me a failure as a father? Does it make me a failure as a husband? As a man trying to provide for his family? Well, as I’m sitting there, my hands get all clammy, my forehead gets all sweaty because the nerves are just crushing down on me. Well, then a door in my boss’s office opens up and out walks a co worker of mine with a piece of paper in her hands.

Dustin Heiner [00:05:53]:
She’s devastated, you can tell. And she passes by me and 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 back and I sit at my desk and I realize two things. Number one, I need to get another job.

Dustin Heiner [00:06:17]:
I need to have another way 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. Got that. Then the second thing I realized sitting in that chair, I need to make sure that 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 in there I knew I needed to be an investor.

Dustin Heiner [00:06:40]:
But life kept getting in the way. I said, no longer will I let life get in the way. And even though I had 100% of my money coming from my job, I realized that’s my part time job. I’m now telling every single person I am a full time investor. And I, I realized whenever I would get asked the question, we all get asked this question, what do you do? Well, whenever we reply, we’re replying with the value that we put on ourselves. I would reply, with our job. That’s what most people do. I’d say, I work for the county doing technology.

Dustin Heiner [00:07:08]:
Well, I’m projecting out to the world that my value comes from my job. No, my value doesn’t come from my job. My value comes from myself and from my God, for my family. So right then and there, started telling everybody investor, so I’ll fast forward the story. Started buying property after property after property, each one making me 300, 400, 500, $600 a month in cash flow, passive income because I bought for cash flow back in 2006. Eventually I had 30 plus properties and I realized, my goodness, I’m losing money here so quick. Last part of the story, I went to my new boss, good boss and all I said, I’m laying you off. And you know, jokingly, we both laughed.

Dustin Heiner [00:07:43]:
And he said, well, what are you going to do? I said, I own real estate and I don’t have to do a thing. So the last quick part of the story, I would walk to and from my car to my job every day, thousands of times now a mile and a half each way because I was too frugal to pay for parking. It was in downtown. The last time I walked to my car, I felt like I was walking on clouds. Because I knew I would never ever need a job again. Because I figured out that I am more valuable than anybody can ever pay me. And so for you listening, you need to realize this as well, that you are more valuable than anybody could ever pay you. In fact, so much more so that they will never pay you what you were worth.

Dustin Heiner [00:08:22]:
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 pocket. If they paid you what you were worth, they’d go broke. So instead, I found a way to make cash flow passive income, which I love. You work one time, get paid over and over again. For me, that’s real estate investing. I build a business that owns the real estate and then I now have 40 plus hours of my life back every single week to build more businesses, to help more people. So I’ll pause the story because you probably got plenty of questions.

James Kademan [00:08:52]:
Yeah, I’m interested. How long were you at that second job?

Dustin Heiner [00:08:56]:
I want to say it was four years.

James Kademan [00:08:59]:
Okay. Four years ago. In that time you knew when you got laid off that first time, you knew like, hey, we got to set up a different game, but we also need some Runway, right? You’d be like, I’m a real estate investor. I have two pennies going to be a little bit of a challenge. Not impossible, but a challenge. So you had to build up something so that you actually had down payment money and stuff like that. Can you talk to us about how you went and made it from like, hey, I got this one rental unit to I got enough to actually sustain me, pay the bills, feed my family, all that jazz?

Dustin Heiner [00:09:32]:
Yeah, that’s a fantastic question. And the reason why I think it’s a great question is because most people don’t think that there is a different. Not different. It’s hard to then scale. Honestly. Just about anybody can buy one property, they might be able to buy three or four. And then they’re pulling their hair out because they’re doing all the work, what you need to do. And this is every business.

Dustin Heiner [00:09:54]:
You need to learn how to scale the business. So what I did was I bought my first property. And then I realized I need to have a business around this. Now, quickly, before I get to the business, what happened when I bought my first property? I was listening, it was 2006. So I was listening to those late night infomercial gurus. They say, well, come to your town. It’s free two hour seminar. Teach you how to invest in real estate.

Dustin Heiner [00:10:15]:
That’s great. So I went to that two hour seminar. It was horrible. All hype, all sales pitch. And they said, now run to the back. It’s normally a million dollars, but it’s, you know, $10,000 today. So I did that.

James Kademan [00:10:24]:
I love it. I love it.

Dustin Heiner [00:10:25]:
You know? Exactly.

James Kademan [00:10:27]:
Yeah. It’s funny, just side tangent here. I went to one of those and I Offered to this guy that I know that that does real estate investing. Like, he gives classes and stuff like that locally here. I’m like, hey, man, do you know about this? You want to go? And he’s like, I’m sure you’ll learn something. Leave your wallet at home. And I was like, I didn’t get talking about. And I go there and it was just like you said, head to the back, super deal, we’re going to change your life, blah, blah, blah.

James Kademan [00:10:54]:
Yeah, I get.

Dustin Heiner [00:10:55]:
I. Nobody told me that. I just went to it. I was like, yes, here’s credit. I was horrible. So I took what little they talk is very little that they taught me. I mean, you spend thousands of dollars but get like $500 worth in value. It was terrible.

Dustin Heiner [00:11:11]:
But what little they taught me, I went out and implemented. I bought my first property. And they’re gurus, so they get. They make their money. They might invest. But it proves to me because it seems like they make their money off of coaching or getting people to pay them for it, because I did and implemented what they told me. And my property manager started stealing from me within six months. It was.

Dustin Heiner [00:11:33]:
It was horrible because I didn’t know what I was doing. I was following what somebody else said, it was the right way to do it. But then if I would have hung my head and said, oh, this just doesn’t work, I would not be here today. I realized this. I’m not. I’m not the first person to ever do this. There has to be a way to do it. And I realized, because I’d always been entrepreneurial, got a degree in entrepreneurship.

Dustin Heiner [00:11:53]:
And so I said, let me approach this from a business mindset instead of an investor mindset. And so what I’ll tell everybody right now, and you won’t hear anybody else that’s, you know, talks on podcasts or any say, this. Stop being an investor. That’s one thing you. Even though at the beginning I said I became an investor, we need to have a mentality instead of being an investor. We need to be a business owner. We need to be a business owner that owns inventory. Let me share how that works out.

Dustin Heiner [00:12:20]:
So if you buy a house and then do all the work and then try to find somebody to manage the property, this happens all the time. I get people say, hey, Dustin, I did all that and I went, I found a tenant, tried to get a property manager, manager, property. I called them all up and they all said, no, they would not manage it because they’ll get shot there. Like, oh, you no longer have an asset, you have a liability. Instead, what you would do is you would build a business and you have the experts know and help you to do it right. Let me give you a quick example, really tangible example. Let’s say you’re going to start a convenience store. You know, candy bars and soda machines, all the good stuff.

Dustin Heiner [00:12:54]:
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. Now, you wouldn’t do it. You go out of business in like two seconds. But what you would do is you’d build the business first. You get the gondolas, so there’s shelving units and all the candy bars go on. The countertops, cold storage, bank accounts, cash registers, insurance, employees, everything in the business before you buy any inventory. Same thing with real estate investing. We find everybody.

Dustin Heiner [00:13:20]:
We build the entire business in every city that we invest. I invest in five states now, and we invest out of state. We love doing that. But you build a business and then you find these experts that are doing the business that are going to help you to make sure you’re finding the right property. Buying the right property, they’re going to manage it, they’re going to take care of it, they’re going to fix it up. Instead of calling up, hey, property manager, I bought this property. And they say, no, they won’t manage it. You got a liability.

Dustin Heiner [00:13:41]:
Now you say, hey, property manager, I’m looking to buy this property. How much will it rent for? What’s the vacancy factor? How much repairs are going to be? Will you manage it? And if they say no, then you don’t buy it. You don’t waste your time and effort. But if they say, yes, this is how much it’ll rent for, this is how much it will cost to repair. You have your numbers just like any business. Does that make sense?

James Kademan [00:14:05]:
Yeah, absolutely. I love it. So you’re getting the stuff prepared so you can then actually do the thing and. Yes, sticking your neck out and then finding no one actually do the thing.

Dustin Heiner [00:14:17]:
Exactly. And that gets to your. Your. Your question was, how did you get to the next step where you had multiple properties? And that is how you scale. Because anybody could just buy one property and manage it themselves. Honestly, there’s a lot more software out there now where you can manage a property yourself, but there’s only so many hours in the day you can’t replicate yourself. What you need to do is build a business. And if you build the business first, then you have the experts that are doing it.

Dustin Heiner [00:14:41]:
As opposed to you hoping that you’re doing it right, especially if you’re investing out of state. Like I said, I invest in five states now. Texas, Ohio, Arizona, Tennessee and Indiana. And my, my students, we, I coach thousands of students now. We invest all over the country. And what we do is every time we go to a new city, we build a new business, getting the right people, the right experts that are going to do all the work for you. But here’s one other quick key, because your audience is business owners, entrepreneurs, people that are, they’re not a nine to five person. They’re not just, you know, drudging through that, which is horrible.

Dustin Heiner [00:15:15]:
So my kind of people, and here’s the thing, a lot of people who call themselves investors, they don’t invest the right way. And this is exactly what, how, how I’ll explain it. When they invest the wrong way, like in 2008 when there was a crash, then lots of people, sadly, who were investing for appreciation, they wanted the value to go up. Oh, I don’t need to worry about cash flow because the value go up and I’ll sell it in two years. Well, there were so many real estate investors that went bankrupt. I didn’t. I made more money every single month because sadly, people lost their homes in foreclosures. I bought them up, but they lost their home in foreclosure.

Dustin Heiner [00:15:54]:
But they need someplace to live, so they’re going to become renters. So supply and demand. You had much more demand, and so rents went up. And so what I do, because I invest for income. This is the thing. So be a business owner. But the other thing that you must do, just like any business, is become an income builder. You want to build income where every single month you’re making money.

Dustin Heiner [00:16:16]:
And a quick example, let’s say you’re building a business where you’re selling candy bars. You could buy a Candy Bar for 50 cents and you knew all day, every day you could sell it for a dollar. You’d be thinking, man, I’m going to buy as many candy bars as I can, because all day long. All day long. But here’s the thing. You would not buy a candy bar for a dollar and hope that you could sell it for $2. But let’s say worse, you buy it for $2, but you could only sell it for a dollar. You lose money every single time.

Dustin Heiner [00:16:43]:
We want to be business owners and income builders. And so when you invest for real estate, if you invest for income, which means monthly, every single month, cash comes into your pocket that you could feed your family with, then you will always get wealth, you will always get income into wealth and appreciation because just over time the values go up. So when you build the business, get the experts, invest for income, being an income builder, then you’re able to scale because you have the people in place and you have the cash flow coming in to then buy more properties.

James Kademan [00:17:17]:
I love it. I love it. So when you first started out with that first property, so you go to the real estate class and you’re like, hey, you guys are crazy, but I want to get my first property. Were you, let me ask, were you married at the time?

Dustin Heiner [00:17:30]:
I was, I was. Just got married like three months prior.

James Kademan [00:17:34]:
All right. And you’re like, hey, funny story, baby. I went to this class thing, they tried to sell me a bunch of junk. I didn’t buy that, but I did.

Dustin Heiner [00:17:41]:
I did buy it.

James Kademan [00:17:42]:
You did buy it.

Dustin Heiner [00:17:43]:
Okay, so that didn’t go over very well.

James Kademan [00:17:46]:
Oh, that’s funny. So did you get together with her and say, hey, here’s our down payment to get the program?

Dustin Heiner [00:17:56]:
So she had saved. She was taught to save. Very risk averse person. Her dad was a teacher, her mom was stay at home mom. So they’re very risk averse. And I wasn’t taught to save. I was taught not to go into debt, but I was not taught to save. So I didn’t have any savings and my wife did.

Dustin Heiner [00:18:10]:
She had like $15,000. This is back in 2006. And so I bought our first property. I had to convince her to let me take the money that she saved.

James Kademan [00:18:17]:
Right. I guess that’s what I’m asking. How did that conversation go where you’re like, hey, you saved a lot of money. I did not. Trust me, I’m good with cash. Let’s make this happen.

Dustin Heiner [00:18:26]:
It was more so where I had to help her to understand how, not the why. She understood the why. I want financial independence, but it was the how. How are we going to make sure we’re not going to lose money? Number one, how are we going to make sure we’re going to keep making money? Number two, and how do we make sure, number three, that we can then make sure somebody else is doing all the work so that I don’t have to do it. And so I had to figure all this out so I can explain it to her. Then we bought the first property. But remember, like I said, my property manager started stealing from me in six months because I didn’t do the right way. But eventually I had to figure out the right way.

Dustin Heiner [00:18:58]:
And that was what got the catalyst to help me realize I need to build the business first. Because anybody that you hear, let’s say Instagram or TikTok, the people that have been around since 2021, 2022, they started, oh, I bought three properties and I’m a millionaire, blah, blah, blah, they’ve only done it in a booming economy. Try it in a down economy. And what I will say, if you invest by building a business, becoming an income builder, where you’re making money every single month, if the market goes up, down, or sideways, you’re always making money.

James Kademan [00:19:29]:
I love it. I love it. Tell me the story about the property manager that was stealing from you. One, how did they steal from you? And then two, more importantly, how did you catch them?

Dustin Heiner [00:19:41]:
I’ll start with a catch them. How did I catch them was things weren’t lining up. Just like if you have a. You have a business and you have somebody managing it or an employee that has a cash register, you’re adding it up. And, hey, that’s just not adding up. The receipts, the money, it’s not adding up. And so you need to make sure that just like any business, remember, real estate investing is just another business. You have to have that perspective.

Dustin Heiner [00:20:03]:
And when you build income, become an income builder. In any business, you need to inspect everything that goes through. Can’t just trust and blindly trust. So I found that the property manager was sending me an invoice that looked handwritten by her or somebody else. It just didn’t look right. And then the property management statements that have everything listed out for the entire month, all the different expenses, those weren’t adding up. Like, the math wasn’t even, like, calculating properly to where it’s like, wow, it’s like something as simple as the property management statement not adding up or getting a. Without knowing, oh, I had to replace this main drain that, you know, the, the septic that drains out to the main line.

Dustin Heiner [00:20:45]:
I had to replace that as a thousand dollars. Like, you didn’t tell me. Like, it was just little yellow flags that turn into red flags. And then I’m. Now that helped me to realize as soon as yellow flags start popping up, I just start. I don’t put them down. I say, let me look, dig deeper into that.

James Kademan [00:21:02]:
So how did that conversation go when you confronted her and said, hey, funny story, something just ain’t making sense here.

Dustin Heiner [00:21:09]:
So every time she would have an excuse, have a reason, and eventually I just knew I can’t trust her anymore. So what I’m going to do is I’m going to find another property manager I can trust and then hire them. And then the next day, as soon as they’re ready, call the property manager, say, hey, I got a new property manager. Taken over getting the keys right away. Like, you’re done, done, done.

James Kademan [00:21:30]:
All right. And is that. Was she cool? She just went away. Yeah.

Dustin Heiner [00:21:35]:
I haven’t heard from her since.

James Kademan [00:21:36]:
Okay.

Dustin Heiner [00:21:37]:
That was in 2007 or 8.

James Kademan [00:21:40]:
Okay. It’s been a while.

Dustin Heiner [00:21:42]:
Yeah, it’s been a little while, but no. So the biggest thing was, well, now I have multiple property managers because I invest in many different cities all over the country. And these property managers, the hardest part for anybody, because I’ve coached lots and lots of students, thousands of students. Now, the hardest part of finding the right property manager.

James Kademan [00:21:59]:
I was just gonna ask, how do you find a good property manager?

Dustin Heiner [00:22:02]:
So the easy part is finding the property, and the easy part is finding the money. People might think, and I did, too. It’s like, oh, how do I find properties? Because I don’t have those. And how do I get money to buy those properties? I don’t have that either. Honestly, I kid you not. Those are the two easiest parts. When you do it right, you build the business, you get people around you. Those are the easy things.

Dustin Heiner [00:22:23]:
The harder part is how do you make sure you’re going to run the business every single month that you’re going to make money and not have somebody steal it from you? How are you going to make sure you’re not going to get repair bills that are 10 times what they should be? Well, what we do is we hire slow and fire fast. This is every business you need to do this. You hire slow, which means you hire very, very slowly. By interviewing many people and interviewing them many times, especially key positions that like a property manager, realtor, they’re dime a dozen, Literally a dime a. There’s so many people, property managers, they are a diamond in the rough. There are a lot of property managers that say they’re property managers and they’re horrible. So you don’t want to hire them. But what we do is we hire slow, which means we interview many different property managers.

Dustin Heiner [00:23:07]:
And I give all my students 20 plus questions and answers of how they should answer that when they’re talking to a property manager, they can vet them and interview them multiple times. And so when you do that, you’re able, just like interviewing for that convenience store, the manager, the person that’s actually sounding the best that you gravitate to, that you don’t hate talking to on the phone that answers your calls, that seems trustworthy. I think everybody has a decent sense of character. Meaning you talk to somebody on the phone and if you listen to them for five minutes, you’re like, oh, I just, there’s something off. Then I trust that. I just say that everybody, like be intuitive to that. But in the end, you create a list of all. Let’s say you do six property managers and you rank them in order.

Dustin Heiner [00:23:51]:
I like number one, then number two, number three, number four, and then you start with number one and if they work out, great. If they don’t, you have backup number two and so on.

James Kademan [00:24:00]:
Gotcha. Are you, when you go into these different states and different areas, are you buying properties that have 4 units, 8 units, 12 units, or are you getting the single family houses and stuff like that?

Dustin Heiner [00:24:11]:
I like the term residential. So four units and below that. That is honestly, it’s the easiest property to buy. Four units and below. And it’s the easiest financing. In fact, you can get conventional financing. Just like you got your own primary residence that you live in. 30 are fixed now.

Dustin Heiner [00:24:28]:
I have 750 apartment units, two big complexes, 350 units, 325 units. And so with these properties, that’s a different loan. It’s a commercial loan, five years. Anyways, let me get back to. Residential is by far the easiest and simplest way to get started. But here’s what you do. Everybody hopefully has heard of or played the game Monopoly growing up. You start by buying land.

Dustin Heiner [00:24:56]:
And you don’t necessarily have to do buy land now because you just have houses on them, but you get house, you buy the property and you get house after house. Eventually you go up to multifamily. That’s the same thing with real estate investing. And that’s the key in scaling is making sure that we’re buying the properties that cash flow that make us money. Because remember, if somebody lands on your property, you make money. And that’s how you win the game is by getting more properties and making more money. And what we do is we then scale to where we have multiple properties. I have 30 plus properties now, multifamily, you know, 750 units.

Dustin Heiner [00:25:29]:
I have hotels I invest in as well. And so it’s a game that we’re trying to play, just like Monopoly. Buy one house, save up. Or when I say save up, you don’t have to save your own money. It’s access to capital. Because the next question everybody always asks is, how do I get money to pay for these Properties. Well, I kid you not, there are at least 17 or 18 different ways that I’ve personally used to get money to buy properties. Give you a quick example, one of my students, his name is Benjamin, he’s a pastor up in Sacramento.

Dustin Heiner [00:25:59]:
He knew that. He knows he can’t work as a pastor forever. And so he said, I want to invest in real estate. He didn’t have any money. We know pastors don’t have any money, but. And I, as I was coaching him, okay, you have a house, you have about 125, $150,000 in equity. Let’s use that. So he got a home equity line of credit on that property, took out as that cash loan, bought a house in Atlanta, Georgia, free and clear.

Dustin Heiner [00:26:24]:
Now that property is free and clear, got it fixed up, got it rented, refinanced it, pulled that cash back out, paid off his home equity line of credit. Now he has this property that has a mortgage on it that he has none of his own money into that property, and it’s making him money. And now he has his home equity credit to do it all over again and do it over and over again. This is just one of 16 different ways to get access to capital is the word. Like you want capital so that when a deal comes, you can buy it and then we refinance and pull the cash back out to pay that off. Does it all make sense?

James Kademan [00:26:53]:
It does, yeah. Do you. Can you share with me a few, or I should say, can you share a few other examples?

Dustin Heiner [00:26:59]:
Yes, I sure can.

James Kademan [00:27:01]:
Yeah.

Dustin Heiner [00:27:01]:
Well, let me go over a list of a few so that you can kind of get your mind going. Because honestly, when I’ve coached, I guess, a thousand students now, and usually it’s lack of options or knowing what options are out there is the hardest part. And so when they come for coaching, but, um, the, the group coaching the courses, when they come to see this, they get exposed to all the different options out there. It’s kind of like a tool in your tool belt. You know, a carpenter has a tool belt, plumber has tool belts. Every single tool is for a different case. Every property might need a different type of financing or a different type of loan or whatever it might be, but obviously all cash. But it doesn’t have to be your cash if you’re going to buy a property.

Dustin Heiner [00:27:41]:
Could be private money. Let’s say you have friends or neighbors or family members. You just let everybody know that you’re an investor. Just like I did when I lost my job. I started telling everybody I’M an investor and so people wanted to lend me money eventually after I proved that I was actually really good at it. So that’s one. Hard money is another. It’s a, it’s like a loan, but from a bank.

Dustin Heiner [00:28:01]:
But it’s one to two years at most. It’s a very short term loan to get you into the property and then refinance and pay off the home. Equal line of credit. And then you have a 30 year fixed, a signature loan. You just walk into a bank and say, I want an unsecured line of credit. I’ve done that. Your home equity line of credit. You can even do a home refinance.

Dustin Heiner [00:28:18]:
I’ve done this at least four or five times. When the interest rate kept going lower and lower and lower, I kept refinancing because my value kept going up and the equity kept going. I get bigger and bigger. So I would refinance the entire Property, pull out 60, 78, 100 grand and then buy properties with that. Those are just a few. There’s business lines of credit. Literally if you have a business, you can go to a bank and say, I want a line of credit on this property, on this business. And they’ll say, here you go.

Dustin Heiner [00:28:45]:
So, but here’s one question that usually comes up. Well, Dustin, what about the interest rate? You know, business line of credits, it’s going to be a higher interest rate. I’m like, I 100% agree. But get this. On any of my properties, I don’t pay my mortgage, I don’t pay my taxes, I don’t pay my insurance, I don’t pay for my property manager, I don’t pay for repairs. I don’t have to get a job to pay for that. What I do is I make sure that cost is accounted for before I buy the property. Quick little example.

Dustin Heiner [00:29:12]:
Remember that candy bar analogy? Let’s say you can buy it for 50 cents, but. And you could then sell it for a dollar. If you could sell it for a dollar, you make 50 cents. But let’s say you don’t even have 50 cents. It costs you 25 cents to borrow 50 or you’re out of pocket 75 cents. You sell it for a dollar, you still make 25 cents every single month. This is what we do in real estate investing. We make sure we account for every single line item expense and we make sure our profit or cash flow is a, an expense line item as well.

Dustin Heiner [00:29:42]:
So if I want to make like, okay, I’m buying this property, I know that I need to make $400 a month in passive income or cash flow. Every single month. I just make sure that I buy the property low enough that increases my cash flow. So I’m not guessing if I’m going to make money. I know I’m going to make money.

James Kademan [00:29:59]:
Nice. Tell me. You answered a lot of things there. So I just want to. I guess it brings up a question. When you go into your friends and family or they’re coming to you saying, hey, we want to lend you some money, because presumably they want to turn their money over, make some money off it, what are you giving for interest to your friends and family?

Dustin Heiner [00:30:17]:
Yeah.

James Kademan [00:30:18]:
So every equity, or is it cash? I should say, is probably a better question.

Dustin Heiner [00:30:22]:
It really depends. It really depends. And every single person that you talk to has different risk tolerances, different goals, different financial situations. And let’s say you’re borrowing it from your dad, who’s borrowing it from his 401k and there, or his insurance or whatever, he’s borrowing it. And his minimum interest that he has to pay is 6%. Well, if you just pay 4%, he’s gonna be losing money. He’s like, why would I do that? Meaning every situation, every person that might be lending you money for your business, everything is going to be negotiable. So you figure out what terms are best that fit them.

Dustin Heiner [00:30:54]:
And the best way to do that is. And this goes for any sales, any. Anything in business. You ask as many questions as possible. So you can figure out, how can I help this person? How can I help them get what they want? Because if I can get them what they want, then I can get what I want. Now if I can’t, then we move on, but it’s okay. But in the end, they. If you want to, it’s usually I prefer not giving somebody equity in a house.

Dustin Heiner [00:31:19]:
Give me example. I buy a house and then I have a private money person, whoever it is, uncle, whatever, and they want to have equity in the property as opposed to a loan. I don’t want to give equity because I want to own it, because eventually I refinance it and pay off that loan so I have it free and clear instead of trying to buy somebody out, which you have to agree. So loan is really, really great. But this is just one of, like I said, 16 different financing strategies.

James Kademan [00:31:44]:
Nice. When you. I guess with the friends and family thing, that’s always. That gets me anxious because I always think, oh, Thanksgiving dinner is going to be super awesome or less than great. Right. We had some renters that did some Bad things or it’s empty or something of that nature. And like funny story. So is it, is it typically cheaper money for you through friends and family or is it easier to get so therefore it’s easier to get more expensive money?

Dustin Heiner [00:32:14]:
Yeah, yeah, usually it’s easier to get. I’ll give you example. Just refinance one of my property and even now, which interest rates are pretty high, they dropped dramatically. I get a 15 year loan on this house that I’m currently living in. It was an Airbnb bought it. Airbnb, but now I’m living in it until we find somebody else else. But I refinance it got four and a half percent. Four and a half percent is in a 15 year note.

Dustin Heiner [00:32:38]:
It’s going to be amazing to be able to pay it off fast. But it’s low interest rate. But it cost ten grand to get that loan and it took a lot of work, a lot of like proving of income and. But if you’re having a private money lender, all they do is they get a note. You give them a note and they know you because that’s the thing. Only people that trust you are going to give you money in a private lending. They trust you or they put a huge lien on the property so that they’ll take it if you don’t pay. Which, you know, it’s understandable because you got to hold them.

Dustin Heiner [00:33:08]:
But like, yeah, like you said, like Thanksgiving, you got to make sure that your business is viable before you do you buy any inventory. Like if your business is not going to make money, don’t do the business.

James Kademan [00:33:20]:
Fair. Totally fair. So we got the money thing figured out. Tell me about finding the property. Because you’re looking at hundreds, thousands, maybe dozens of properties. But I imagine you have your area that you’re aiming for, so you whittle it down. You’re looking for four unit or less, so you whittle it down. Does that include single family?

Dustin Heiner [00:33:39]:
Yes.

James Kademan [00:33:39]:
Okay, so it includes single family. So you know roughly what rent is going for for one bedroom, two bedroom, three bedroom, whatever. And so you know, hey, for this to cash flow, are there some quick and dirty rules that you use when you’re looking at a property to just say like yes, yes, or I’m sorry, no, no, no, no, no, no. Yes. Let’s look into this deeper.

Dustin Heiner [00:33:58]:
A quick easy rule. Let’s say you’re looking on realtor.com or zillow if you can see how much you could rent for. Because Zillow actually will tell you usually how much it’ll rent for. And then you can look at the purchase price. A quick rule of thumb is will it rent for 1% of the purchase price? So let’s say if it’s selling for $150,000, will it rent for $1500 a month? If it only rents for $900 a month, you’re going to be way off and you’re going to be losing a lot of money. It’s just a rule of thumb for it to help you get into more, I guess detailed, oriented into the due diligence of that property. Will it be viable? Do I talk to my property manager? Have they look at the property and. But those are quick little rules of thumb or that’s one quick little rule of thumb.

Dustin Heiner [00:34:42]:
But at the same time, how I find properties is analyzing them. That’s one thing. In fact, I created a software called Income Builder that you just put in the address and how much it rents for and it calculates a lot of your expenses for you and then it pops out how much you should be making in cash flow. And I mean it’s a fantastic piece of software and but with that. So analyzing properties is actually very simple. I made it simple as best I can for all my students. So they just put all that information in it, pops it out and then finding the property is even it’s not more simple because do you know the technology does it for you? But when you find properties, just like finding money, you have to have access to capital, have different options. I don’t go find properties anymore.

Dustin Heiner [00:35:25]:
So many people know me as investor. Everything from property managers, other investors, title companies, even realtors. People send me deals all the time. In fact, one of my, I think was like last week I was talking to another investor, just met him and he was like, man, I have this property I need to sell. It’s like, oh great. I was actually going to buy it. But I knew one of my students really wanted to get a property in the area, so I pass it on to him. And so as long as people know you and that you’re buying real estate, that you’re an investor, deals are going to come so often.

Dustin Heiner [00:35:55]:
In fact, when coaching students, usually with without me, it’ll take them a long time to eventually get their first property. But maybe they do. But when they do work with me, usually it takes about one to two months before they build a business adequate enough and start putting in offers. And by the second month they should have a first property under the belt. But this is the crazy thing because we Build a business because more people know us as investors. The second property usually comes within a month later, like it’s. It’s clockwork, because we do all the work legwork up front, that finding the property, finding the money for the property, people managing the property, insurance and all that sort of stuff is all done. That as soon as we find another piece of inventory, we just buy it and put it into our business.

Dustin Heiner [00:36:36]:
And one quick. I want to share that. A quick way that I realized that I could quit my job was when my income from all the properties exceeded my expenses. And people might be thinking, well, how do I make sure that I can, you know, like you asked this a little bit ago. But how do you make sure that you have enough money stabilized. That’s a key word, Stabilizing any business, stabilizing it to where money’s constantly coming in. So what I did was I realized, because I asked my wife, how much money do we need every single month? That are our expenses to 90 cover. And I remember the number as plain as day because it just.

Dustin Heiner [00:37:09]:
It was. It hit me and I. It was a number always on my brain. $4,200, you know, mortgage, food, all that sort of stuff. And I thought, okay, it’s just a numbers game. If I want buy one property, that makes me $500 a month, that’s $6,000 a year. 10 properties, that’s $5,000 a month, that’s $60,000 a year. Like, oh, my goodness, if I get to 20 properties, that is $10,000 a month, that’s $120,000 a year.

Dustin Heiner [00:37:36]:
I just thought, Mike, it’s just a scaling thing that I need to do to build this business. And as long as I account for all my expenses, I have experts doing the work for me, building the business first, then I can buy the inventory. That’s how I scaled so fast. I think it was like four years, maybe five. Getting into five years from getting that new job and then just constantly buying more and more and more properties.

James Kademan [00:37:57]:
Nice. So while you had that second. The second job after your. If you got laid off, you were doing the. The transactions and the deals essentially in the back end, moonlighting as an investor, essentially knowing that you’re going to leave that gig, the W2 job, and move on. Straight on investor.

Dustin Heiner [00:38:16]:
Yes.

James Kademan [00:38:17]:
That’s cool. That’s super cool. Did you.

Dustin Heiner [00:38:18]:
Here’s. Here’s a great thing, because once you build the business and you get the experts doing the work for you, they are sending you the information and you just respond how they you want them to proceed. Like if somebody sends you a property, well, do I want to send my realtor out there to take a look at it or do I, you know, the property manager saying, hey, this property is vacant now. We got to get it fixed up. Okay, go ahead and move forward. So there’s so much less work on my end. In fact, a lot of people have heard of the book, the four hour work week. You know, good book.

James Kademan [00:38:44]:
See it in the background there?

Dustin Heiner [00:38:45]:
Yeah, exactly. It’s premises. Have, have your life developed to where you can only have to work four hours a week. Well, it was, it’s, it’s a good book, but I think working four hours a week is for suckers. I don’t want to work four hours a week. I don’t even want to work for four hours a month. In fact, maybe 30 minutes a month that I would work on my real estate because I have other people doing the work for me. And I’ll say the one quick last thing.

Dustin Heiner [00:39:08]:
I’ve now taught my 16 year old daughter, my oldest daughter, 16 year old daughter to buy her first property. So she bought her first property three years ago. Three months ago. Nice. Yeah, her savings. And I coached her just like I coach everybody else. And she bought her first property and I taught her how to do all the. It’s not necessarily accounting.

Dustin Heiner [00:39:25]:
It’s just making sure all of the numbers are put into our accounting system, which is very, very simple. It takes her 5, 10 minutes. We make sure everything looks good. And if I need to call the property manager, say, hey, what’s going on here? What’s going on there? I taught her how to do it and she does it all for me. So now I don’t even work 30 minutes a month. She takes care of that.

James Kademan [00:39:40]:
Ah, that’s awesome. Setting them up for life. That’s super cool. Tell me a story about. Well, I got a couple avenues here, but let’s just talk taxes first. Because a lot of people that are in the entrepreneurship, they own their own business, plumbing, whatever it is they’re doing, haircutting, who knows, they’re doing the thing. They under. They’re starting to understand taxes and all that.

James Kademan [00:40:01]:
Jazz real estate game. I just heard this quote recently, it was, if you’re paying, how did it go? If you’re paying too much in taxes, that simply means you don’t own enough real estate. Tell me a little bit about that.

Dustin Heiner [00:40:14]:
It’s a great, great saying. So here’s the amazing thing. And it’s even more amazing when you become a Real estate, professional tax strategy or tax bracket or, you know, classification, then every single penny that I make in any walk of life, from businesses that I own to everything, it all is a write off from my real estate. My real estate can write off all the depreciation. So absolutely what I found, Depreciation is amazing. 1031, Strange is great, don’t get me wrong. Like you don’t want to, you know, pay capital gains tax, but I never sell. I made a mistake.

Dustin Heiner [00:40:50]:
A couple years, a couple years into my real estate investing, I sold the property and I realized, oh, I wish I would never have sold that. In fact, you talk to any real estate investor, they will tell you, yes, I regret selling any of my properties of the past because just over time it goes up, you make money.

James Kademan [00:41:04]:
And so I borrow, die, right?

Dustin Heiner [00:41:07]:
Yes, exactly. I just keep refinancing. In fact, I just did a refinance of five properties altogether, took 500 grand out, bought that 325 unit apartment complex with some other three other partners of mine. But anyways, so what I love is that depreciation alone eats up so, so much of your taxes. If you make a profit, if you’re a real estate professional, you make a profit. Let’s say you have a land, a lawn mowing business, you make a profit there. Well, the depreciation can write off, or at least this is what my accountant tells me. You, everybody needs to check with your own accountant and lawyers and all that sort of stuff.

Dustin Heiner [00:41:40]:
I’m just sharing what they’ve told me. But I pay so little in taxes because of how much real estate I own. Here, let me give you one quick example too. So I’ve coached so many people to do this. Let’s say they have a lot of money coming in. Let’s say they’re a doctor, lawyer, what do you know, they have an engineer, they have a lot of money coming in and they realize I need to put that money someplace that I can get a tax break and create generational wealth and cash flow. Well, if you’re not a real estate professional, tax status like I am, and you’re just a regular employee, W2 employee, then what you do is you buy a property, you turn it into an Airbnb property. So let’s say you, well, I’ll give you a prime example.

Dustin Heiner [00:42:20]:
One of the properties I bought, I bought it for $420,000 and it cash flows, I don’t know, $500,000 a month in passive income. And I did a cost segregation study on it. That’s where I accelerate, which means make it faster. My depreciation from. It’s usually almost 30 years. Condense it down in three years. And so instead of depreciating it out over 30 or 27 and a half years or however long it is, it’s now over three years. So the first year, I got $100,000 tax write off in the first year.

Dustin Heiner [00:42:50]:
And this is something anybody. You don’t have to be a real estate professional like I am, because the IRS sees the Airbnb as an active business. It’s an active loss for you. So you can depreciate $100,000 is what I did. And so this is there. There’s so many strategies that if you own real estate, it’s going to take care of so much of your investing or, sorry, so much of your tax burden.

James Kademan [00:43:15]:
Yeah. It’s interesting that you mentioned the cost segregation thing. I own property and I learned about the cross segregation thing. So I go to my accountant way back when and I’m like, hey, man, cost segregation, Is that something I should do? He’s like, ah, you could, but they’re expensive. And I’m like, well, how expensive? And what is the return? He was looking at it like, you got to pay. I end up paying, I think, $3,000 for the, for the study. But it ended up saving. I think it was that specific one, I think was saving me in the neighborhood of $15,000 in taxes done.

James Kademan [00:43:51]:
I’m like trading three grand for 15 grand. I’ll make that trade all freaking day.

Dustin Heiner [00:43:56]:
Yes.

James Kademan [00:43:57]:
And I’m like, are you sure you’re an accountant? Because he was afraid. He was like, ah, $3,000, that’s a lot of money. But I’m like, whoa, whoa, whoa. This is investment. So we’re getting a return on that. And that’s a hell of a return.

Dustin Heiner [00:44:10]:
Oh, my good. Well, I mean, it’s. It’s 12 grand in your pocket, you know, three minus 15. It’s 12,000. Why would I not do that? Now, here’s also another great thing. So I’ve done it before, too. Cost segregation study. And it’s great.

Dustin Heiner [00:44:22]:
But I got that report and so now I’m having AI build an app that anybody can do a cost segregation study. And it’s going to populate it just like it would. Like some big fancy firm did it. And I think I haven’t even figured out how much I’m going to charge for it, but it’s going to be so much cheaper than I think three grand is just ridiculous.

James Kademan [00:44:43]:
It’s a lot of money for what it was.

Dustin Heiner [00:44:45]:
Yeah. You know, I agree. And that’s how much used they are. And so it’s just if you put into a calculator that spits out the information and. And makes it itemized out so it looks right for the irs, then it’s so much it. You save so much money than Uncle Sam taking it.

James Kademan [00:44:59]:
All right, right. Yeah. It’s interesting because I learned this, I guess, watching YouTube and stuff like this, trying to save money on taxes. And I was learning all these things that I was never told, and I felt like I was paying my accountant enough money that I should have been told. And he’s like, you never asked. And I was like, I don’t even know what to ask. I want to. The question is, how do I lower my tax bill? I don’t need to be more specific than that when I’m paying a Pro.

Dustin Heiner [00:45:29]:
Right, you’re 100. Well, what they’re going to say, too, is they’re going to say there’s. What is it? End of the year tax filing, that’s one thing. But all year there’s. Shoot, I can’t remember. It’s off the tip of my brain. But tax planning, tax preparation, like, yes. How to make sure you’re spending the money at the right places and all that sort of stuff.

Dustin Heiner [00:45:49]:
And you’re gonna have to pay extra for that. But honestly, it’s worth its weight in gold because what you’re gonna get is a lower, much, much lower tax burden.

James Kademan [00:45:57]:
Yeah, yeah, absolutely. I didn’t even know that that was a thing, but apparently most of the rest of the world did, or I was certainly. People that are deep into real estate investing, I’m certain that they have learned, because that. That seems like that’s a good portion of the value right there.

Dustin Heiner [00:46:14]:
Oh, my goodness. Yeah. I mean, so we make money every single month. We capture equity when we buy it. Like, I don’t pay top dollar. In fact, this is the six ways that you make money. If you buy just one property, you capture equity. So we’re investors, so we don’t pay top dollar.

Dustin Heiner [00:46:28]:
We actually try to get 10, 20, maybe even 30% discount on the value. So you’re capturing that equity passive income every single month. You want to make money. Market appreciation just over time, actually, it’s proven every 15 years. Real estate doubles in value every 15 years. That’s just amazing. And then you also have forced appreciation. You put $5,000 into it.

Dustin Heiner [00:46:49]:
Hopefully it’s worth now the $20,000 more. So you make that go up. You also have mortgage buy down, which means the tenant is paying your mortgage. That’s why I say I don’t pay my mortgage, my tenant does. Now the money comes into me and I out to the mortgage. But I don’t have to get a job. So if I get a loan, all that interest, all that principal is paid for by the tenant. And then the last one Is tax benefits, 10th or exchange deferred depreciation.

Dustin Heiner [00:47:13]:
You also have, it’s a business. So you can write off your cell phone and your travel. If you’re going to try to Hawaii, travel to Hawaii, hopefully you look at some properties, you make it a business expense, you can write off a portion of that. There’s just so many amazing things about real estate that if you just get one property, you’ll see the benefits and you’re going to want to get more. Because eventually what I love is I now have freedom in my life. I have 40 plus hours in my life. All the businesses that I own, I own three other businesses. I if they don’t make me any money, I’m not worried because I have real estate that comes in like clockwork.

James Kademan [00:47:45]:
Nice. I love it. Let’s talk. I got a couple more questions about real estate and then let’s delve into your other ventures, let’s call them. You mentioned real estate investing in other states and I’m guessing you’re not traveling to the other states to check out the properties that you have people boots on the ground that are showing you the stuff.

Dustin Heiner [00:48:04]:
Good question. So I never travel anymore. The first time in 2006, I traveled to Ohio. I was in California at the time, traveled to Ohio, found the property manager, found the realtor, and. But now I realize I never do anymore. In fact, on my podcast, the master Passive Income Podcast, it’s really just a solo show, 90% solo. Showed me just teaching how to do this. And on that I’ve documented how we don’t even need to go to an area, brand new area.

Dustin Heiner [00:48:30]:
In fact, I invest in five states. I’ve only seen one of the properties before I bought it. Because when you hire experts, they’re going to send you pictures now, pictures. And I’m gonna say physically, I don’t even go to the states that I invest in. Like I’ve never been to Indiana. I might eventually go there, but I’ve never been there. But when you do it right, when you build a business, those experts are going to inspect the property, they’re going to make sure that the comps are right, you’re paying a decent price for, you know, they’re not, not too much that they’re going to be able to manage it and all that sort of stuff. And so when you’re investing out of state, what you do, especially out of state is.

Dustin Heiner [00:49:02]:
And I would even say if you’re even in your own state or in your backyard, if you do it right, you can make it automatic because you have other people doing all the work for you. But every single state that you invest in, or I would say city, every city that you invest in, when you have to build up another business, property manager, inspector, let’s say insurance company, like all that different stuff, we build that entire business up so that it runs on its own.

James Kademan [00:49:28]:
Nice. How do you decide what state or area you’re going to invest in?

Dustin Heiner [00:49:33]:
I like two things, inventory and price. So inventory member a house is a piece of inventory. And I like making sure there’s a lot of inventory in a city that I would eventually be able to buy. So if I find a city that has two homes for sale, like oh hey, this price is a rent, it might work out. That might be. That might work out well. But when there’s a city that has very low inventory, you’re going to have very few property managers to pick from. It’s going to be tough.

Dustin Heiner [00:49:58]:
And then once you have that built, how are you going to buy the next property and the next property because there’s not that many properties. So I look for inventory. Is there going to be good inventory in that city for me to continually buy more properties? Check then number two, the price to rent ratio. Am I going to be able to rent it and make cash flow at the prices? Give you example, there are lots of properties in San Francisco or Washington D.C. or wherever. Lots of, lots of properties for sale. But it’ll be very hard to make cash flow on those. So I don’t buy in those areas.

Dustin Heiner [00:50:28]:
I love the Midwest right now, down into the Carolinas, into Florida, even has some really good areas. My students were invited. We’re predominantly in that area right now. Now we do invest outside of those areas, but predominantly just for cash flow and to scale a business you have to go in places where you can buy a lot of properties and make a lot of money on those from the rents.

James Kademan [00:50:51]:
Gotcha. Fair. And is there software or how are you finding that? Us is a big country. So to know like this little pocket is good, this little one is bad or not ideal.

Dustin Heiner [00:51:02]:
Yeah, two different ways or sites that are decent right now. Zillow’s been great for a long time. You see a little bunch of dots. You know, when you search in a city, you see a bunch of dots pop up. You can put your criteria in. And so I just look for as many dots and then I drill in. If there’s a lot of dots, I’ll drill in to see what the price is like on those properties, what the, you know, the neighborhood looks like. But once I find a good city with good inventory, then I stop looking at properties and go to find property manager.

Dustin Heiner [00:51:27]:
In fact, a lot of my students, they’ll say, dustin, I found a great city and I’ve already got five realtors sending me deals. I’m like, oh, stop, stop. If you bought one of those properties, how are you going to manage it? Oh, yeah, yeah. So we find a property manager first. Realtors are absolutely the last step. So we find the right people that are going to manage it first. They’re going to tell us, don’t buy this house or no, I won’t manage it because I’ll get shot.

James Kademan [00:51:51]:
Yeah, nice. Let’s shift gears into the other ventures you have going on. What have you delved into?

Dustin Heiner [00:51:58]:
Yeah, so since I. Well, I love the idea of reselling your sawdust. Basically you have a lumber mill and you have byproduct, you know, things that come out of it. Well, that might be useful for somebody. And so as I was quitting my job Back in 2016, I was 37 years old, I had a lot of people asking me how to invest and I, I started teaching them one on one just for fun because I enjoyed it and I had extra free time. So I realized I like doing this, I like helping people and I don’t need to worry about money. I get money coming in. So I wrote a couple books.

Dustin Heiner [00:52:27]:
One is how to quit your job with rental properties. Very non creative title, straightforward to the point, and started giving that away. So here you go. Here you go. You have good questions. These will answer the majority of the beginner questions. When you’re done, come back to me and then I’ll coach you the rest of the way. Then started a podcast back in 2016, Master Passive Income podcast, where, like I said, just me giving out all this information on how to invest.

Dustin Heiner [00:52:51]:
So that has then turned into coaching because people, you know, all the free content. I literally, I have a free course, get my course completely for free. And people have invested just from that. They’ve listened to my podcast and invested just from that. But sometimes people want a little more hand holding. They Want to. They’re not completely sure. And so people started saying, hey Dustin, can I have your time? And at first I asked my wife, I said, hey honey, should I just start coaching people for free? And she goes, no, if you’re going to do that, stay home and help me homeschool the kid.

Dustin Heiner [00:53:19]:
We have five kids and my wife homeschools, homeschool the kids and be around the house. I’m like, okay, I better. I guess I should charge for my. But fast forward now we got courses. I have now lots of students that have now become coaches. So I’ve coached them. They now coach their students or students that come in. So that is one business is the coaching arm.

Dustin Heiner [00:53:39]:
If anybody wants help. You get all of my free stuff? Yeah, I’ll get like I’ll literally send you my book for free, my podcast, YouTube channel, all that stuff’s for free. You can literally earn it. But if you want a little bit more, then we’re there for you. So that’s another one is the master of passive income. The podcast, YouTube channel, all that sort of stuff.

James Kademan [00:53:54]:
Nice. And is there, is there anything. We’re talking coffee shop or just some crazy. You start bottling your own wine or something crazy that you went, oh, just for fun.

Dustin Heiner [00:54:04]:
You remember, it’s reselling your sawdust. And so real estate is my main, like, you know, I’m lumber mill. That’s my main product is real estate. And then I realized there are other things that we can do to help people that are in the real estate realm or other things we could do. So coaching was one getting people in in person events. So I have another conference or another, another company that we get people together in an in person conference. And it’s not those sales pitch run to the back. It’s like let’s just get investors together.

Dustin Heiner [00:54:33]:
So that’s another company all around real estate investing. I have another company that’s a mastermind. So if people want to get even deeper, they’re higher level, let’s say they’re, you know, they’re already scaling. They’re, they’re, they make a lot of money. They want to get around higher level. Not beginners, but higher level people. I hit that business as well. So it’s, everything is revolving around real estate.

Dustin Heiner [00:54:53]:
And another one is our software. The software that helps you analyze the deals in the future on the roadmap for the software they’re creating. It’s called Income Builder. Income Builder IO is the site. It’s going to even help you find properties on there. Getting a List of off market properties, putting in offers and even making money. And so everything around real estate, I figure, well, shoot, what else can we do? Well, people need homeowners insurance. Maybe I might go down that route.

Dustin Heiner [00:55:19]:
When they need mortgages, maybe I might go down that route. And the great thing about, since I’ve been doing this for so long now and so many students now I’ve got, I would say dozens and dozens of people that are working with me in Master Passive Income. In fact, Master Passive Income Network, it’s my podcast network. We’ve got seven other shows under there because I have so many students that said, Dustin, I want to help you in what you’re doing. My goal is to help 1 million people to invest in real estate. They said we want to be a part of or I want to be a part of it. And so they, they become a student. Yeah.

Dustin Heiner [00:55:50]:
And they start coaching people. I said, you need your own show. And like, yes, because they find me through the podcast. In fact, we have 2.2 million downloads now if you search real estate investing on Apple, I’m number one on there above all the other real estate investing ones. But they find me there. So we, they get their own podcast show. And so that’s another route of income because people want to sponsor our shows. And so it’s how do I use real estate to help many, many people and what other things can I develop that’s going to help them be successful?

James Kademan [00:56:21]:
That is super cool, man. That’s a lot, that’s a lot going on. So it sounds like the real estate world all good.

Dustin Heiner [00:56:29]:
Oh yeah. Well, real estate.

James Kademan [00:56:30]:
So as far as first step that you would recommend for someone that was interested in getting into investing in real estate, you just walk us through what you would recommend that to be.

Dustin Heiner [00:56:40]:
Well, very, very first. If you do it the wrong way, you’re going to, you’re going to get hurt. I mean, it’s just, I mean I got hurt. Everybody gets hurt if they don’t do it the right way. So do you mind if I just give everybody my course for free?

James Kademan [00:56:51]:
No, by all means, yeah. Happy? Yeah, yeah, yeah.

Dustin Heiner [00:56:54]:
I want, I want. I’ll literally show you how to invest anywhere in the country, how to buy the right properties, build the business first scale to become financially independent. If you text the word rental, R E N T A L rental to 33777 rental to 33777 or you can go to master passiveincome.com forward/free course, all one word for free course. I’ll give it to you completely for free. I have so many people thanking me just for that free course because it helped them to get over that. So that’s, number one, is you need to have the right plan that’s going to help you to make sure that you’re making money and skip over those hurdles. Because honestly, there’s so many TikTok and instant Instagram gurus in the last two or three years that think they know what they’re doing now. They’re doing fine, but they have not gone through cycles.

Dustin Heiner [00:57:41]:
It’s only been a booming economy since then. And so you’re going to find a lot of them saying, oh, Yeah, I bought three properties, Airbnb, I’m making $5,000 a month on each one. But yes, that’s until something bad happens. Because there will eventually. I’m not saying it’s going to happen today or a week or a year from now. Eventually there’s always going to be a correction in the market. And so what we do is we make sure we make money if the market goes up, down or sideways. So, number one, get educated.

Dustin Heiner [00:58:06]:
Number two, you want to make sure, if you’re going to start investing, you want to get around people that are doing it. Get around people. That’s why I have my conference. It’s called Income Building Live Conference. The reason why I have the conference, because I want people to meet other investors. I get so many deals, properties sent to me because I know so many people. I get people wanting to lend me money. I get mortgage brokers reaching out to me and say, hey, I have this great interest rate, this great that.

Dustin Heiner [00:58:31]:
Because I know so many people, or better way to say that more people know me, more people know me as a business owner, as an investor, so they want to work with me. So that’s the next thing. Go to a local real estate investor meetup. You know, in your city, look, look for investor meetup there. Meetup.com is a great way to find other events, things that you can hang out with people and so go to events to be around people. That’s number one. So education, number one. Number two, get around people that are doing it.

Dustin Heiner [00:58:58]:
And number three, if you are looking to get, get into investing, you want to make sure you have access to capital. So if you’re in debt up to your eyeballs, you need to start working your way out of that. Follow Dave Ramsey. A lot of people know Dave Ramsey, but follow him, get out of debt, stop going worse into debt. But you want to have financially a good stable foundation. So that when you do buy your first property, it’s actually going to be making you money and you’re not going to actually be hurt because in the end, let’s say you have a lot of debt, you buy a house, and you’re even worse off. You have a month without a mortgage or without rent coming in, and then you’re hurt. So those are my key steps.

Dustin Heiner [00:59:33]:
And then if you want to get even further into it, take the free content that you’ve got, like from my course, the podcast, and all that sort of stuff, and then implement it. But then if you need more help, then obviously we have the coaching. My students are now coaches. They’re coaching people. We have group coaching and all that sort of stuff.

James Kademan [00:59:48]:
Nice. I love it. I love it so much. This real estate investing thing, it’s pretty cool. It’s impressive. And I feel I’m a little jaded, I guess, because I feel like when I was a kid, you’re going through school and stuff like this, and there you were told, it sounds like you and I are in a similar generation where they’re told you, like, go through school, get your good grades, go off to college, get your debt, find a job, and good luck. And there wasn’t. There wasn’t a whole lot of talk about one, anything outside of college.

James Kademan [01:00:23]:
There wasn’t talk about starting your own business. There wasn’t talk about inventing your own thing, real estate investing. All these other opportunities that I would argue pretty strongly are, they’re more fun and the ceiling isn’t so low. I could argue that there’s not much of a ceiling at all. So I’m like, what.

Dustin Heiner [01:00:46]:
What did.

James Kademan [01:00:47]:
What happened here?

Dustin Heiner [01:00:48]:
How come I realize I make so much more money now that I stopped working for somebody else? And when you realize school is just to make you an employee, it makes you to follow rules. And your company that you’re gonna work for is gonna give you rules to follow. And as long as you follow them, you’re gonna get your grade, you know, A plus or your paycheck. And so we’re never taught any of this stuff. That’s why I’m so glad great podcasts like yours are out there. People that are trying to help people wake up out of this coggin, a machine. You know, from the industrial revolution to now, it’s just like you’re supposed to just work your life away. Like, no, there’s so much better.

Dustin Heiner [01:01:22]:
In fact, I quit my job at 37 years old because I have so many properties now, and I just keep Buying more and more. And I just got back from Japan. I took my wife and my five kids and my dad to Japan. Three weeks, we traveled 3, 500 miles, drove around the island.

James Kademan [01:01:35]:
That’s awesome.

Dustin Heiner [01:01:36]:
Yeah. And I didn’t even worry about my properties because I have other people doing all the work and the money’s coming in without me doing anything.

James Kademan [01:01:44]:
That is incredible right there. That’s. That’s, man, nothing shy of awesome right there. That is cool. Well, what I wanted to ask you. Oh, my gosh, it’s escaping me. I had tip my tongue. Oh.

James Kademan [01:01:56]:
I just wanted to let you know from, I guess talking about the financial literacy and all that jazz, I give my. All of my employees, we do this little brain quiz thing. This last week. I gave him a financial brain quiz I just found online. It was seven questions. I consider them super easy because the question, one question was like, if you throw your money in a savings account and it gives you 1% interest, but the inflation rate is 1% at the end of that year, what is the value of your money? Has it gone up, down? Stayed the same? Anyway, seven questions like that half of my employees got worse. Got a four out of seven or worse.

Dustin Heiner [01:02:39]:
Oh.

James Kademan [01:02:40]:
And I was like, whoa, whoa, whoa, whoa, whoa. You’re human. In a capitalist country, you should probably be able to get at least six out of seven. So that made me focus. Like, I understand. I want you for employees. And as an employer, my job essentially is to pay you the least amount of money if you do the most work. Your job as an employee is do the least amount of work and get paid the most.

James Kademan [01:03:04]:
So we have to find the crossroads there. I totally understand that. On the flip side, I want you to be a successful person. So if I have to take a little bit of time to teach you how to be financially intelligent, I’m happy to do that just because I don’t want you wondering where your next page or where your, your next meal is going to come from, even though you have a full time job. So it’s just one of those, like, whoa, how. What happened?

Dustin Heiner [01:03:32]:
Well, I mean, we’re never. You’re not taught. You can’t even. You’re not even taught how to balance a checkbook or, you know, make sure things are accounted for, like, not at all. You’re not taught any of this stuff. And even now, we have so much stuff on the Internet of people coaching or showing financial literacy, Dave Ramsey and all that sort of stuff. Even schools still don’t do that. They still don’t.

Dustin Heiner [01:03:53]:
Mm.

James Kademan [01:03:53]:
Yeah. It’s bizarre, sad. I mean, on flip side, I understand what you’re saying. Essentially what they’re doing is catering or guiding people to become employees.

Dustin Heiner [01:04:03]:
That’s what it is.

James Kademan [01:04:04]:
Which as an employer, I’m like, well, that’s not all bad. But on the flip side, I don’t want just a bunch of stupid minions working for me. I would rather have somebody that was smart and help me grow the business, you know what, make more money, have more fun kind of things. So totally, It’s. Yeah. Anyways, that’s where we’re at. Hopefully people can learn something from this. And it’s kind of one of those things where it’s the challenge of having that super awesome employee that’s like, hey, James, I watched one of your podcasts, I’m leaving because I’m going to invest in real estate, where part of me would be like, you know what? You’re a kick ass employee.

James Kademan [01:04:42]:
I don’t want to lose you. But on the other side, kind of proud of you. So let me know how I can help kind of thing.

Dustin Heiner [01:04:49]:
Yeah, that’s how you get people who are going to be loyal is if and when they do come to you and say, hey, I have a great opportunity over here, I’m gonna take it as an employer. And I learned this. I’m a Christ follower. I’ve been, I’ve been a pastor in the past and didn’t want it, but I just, you know, stepped in for a little bit, started many ministries and whenever anybody would come to me and say, hey, Dustin, I feel God’s calling me to do this over here. Now my ministry or the ministry that I’m overseeing is going to lack because we had that person taken over volunteering, running that. First thing I would say is, praise the Lord, how can I help you succeed in this new place? They would beam ear to ear because they were sad, because they don’t want to leave. They love being with me. But when I set them up for success and I am encouraging them because I said, what God’s telling you, we have the same God.

Dustin Heiner [01:05:38]:
So if God’s telling you to leave, it’s the best for you and the best for us, so let’s work on this. But then I took that into the business practice. Everything I do in business, if somebody wants to leave and if they say, hey, Dustin, I’m going to take everything that you’ve taught me and I’m going to go coach other people, I’m like, how can I help you? How can I help you do this? Because there’s so much to go around in the end.

James Kademan [01:05:55]:
Oh, my gosh. Endless.

Dustin Heiner [01:05:56]:
Yeah. The more I serve people, this is the reason why my goal is helping 1 million people to invest in real estate and hopefully become financially independent. The more people that I serve, the more money I make and the more money they make and everybody’s life wins. And so when you have an abundance mindset, as opposed to a scarcity mindset, abundance mindset, you start realizing that there’s so much out there with scarcity. You have such a narrow focus and it’s just sad. Exactly.

James Kademan [01:06:22]:
Yeah. Totally get it. Totally. Dustin, thank you so much for being on the show. Can you tell us that website one more time?

Dustin Heiner [01:06:29]:
Yeah, absolutely, James, thanks for having me. If you go to masterpassiveincome.com/freecourse all one word, free course. I’ll give you that course. But masterpassiveincome.com and then. Oh, one thing. You mind if I share my Instagram? Because.

James Kademan [01:06:44]:
No, by all means.

Dustin Heiner [01:06:44]:
Yeah, yeah. Appreciate it. And so I love hearing when somebody listened to your, like your show and they say, hey, does that. I listen to James the show and I heard you. So anyways, you can reach out to me on Instagram. @TheDustinHeiner. The Dustin Heiner. Send me a quick dm.

Dustin Heiner [01:06:59]:
Love to see if you’re, you know, growing in your business. If anything I could do help you. But in the end, if we just all have an abundance mindset, honestly, I think everybody’s lives get better and better.

James Kademan [01:07:09]:
Oh, a true story a thousand times over. I love it. This has been Authentic Business Adventures, the business program that brings you the struggle stories and triumphant successes of business owners across the land. My name is James Kademan and Authentic Business Adventures is brought to you by Calls On Call, offering call answering and receptionist services for service businesses across the country. On the web at https://callsoncall.com and of course, the Bold Business book, a book for the entrepreneur and all of us available wherever fine books are sold. If you’re listening or watching this on the web, if you could do us a huge favor, give it the big old thumbs up, subscribe and of course, share it with your entrepreneurial friends and those friends that may be interested in getting a little bit of passive income so they can quit the daily grind and man, go to Japan for three weeks. That doesn’t sound terrible. I would say not right? We’d like to thank your wonderful listeners as well as our guest, Dustin Heiner of Master Passive Income.

James Kademan [01:08:03]:
Dustin, can you tell us that website one more time?

Dustin Heiner [01:08:06]:
Yeah masterpassiveincome.com/freecourse and you can also find me on my podcast Master Passive Income. Like I said, just coaching people, giving all this free advice. So hopefully you’re going to change your life.

James Kademan [01:08:15]:
Nice. I love it. Past episodes can be found morning, noon and night at the Podcast link found at drawincustomers.com thank you for joining us. We will see you next week. I want you to stay awesome if you do nothing else. Enjoy your business.