[RWS #729] Cash Flow: Building Wealth One Rental at a Time

Picture of woman writing in notebook with coffee for Real Wealth Show Podcast Episode #729

This Family is On a Mission!

We talk a lot about building wealth through real estate here on the Real Wealth Show. But there are lots of ways of defining wealth. 

At RealWealth, we define Real Wealth as having both the time and the money to live life the way you want to, with the people you want to be with.

Our guests today have their own definition of wealth. 

Suzanne and Joel want to become financially free so that they can do what they loved to do the most — to support a mission they love and to add value to the lives of others. 

Their goal is to have 10 properties by 2023, and they are well on their way. If you DESIRE to have income producing real estate, do your due diligence with FAITH, and take ACTION.


Podcast Transcript

Kathy Fettke: Suzanne and Joel, welcome to the Real Wealth Show.

Suzanne Almosara: Thank you for having us.

Kathy: You bet. I would love to hear what inspired you to invest in real estate.

Inspired by Robert Kiyosaki

Joel Almosara: Well, I don’t know if you know, I’m in the military, been in the military for over 30 years and we’ve traveled a lot overseas and stateside. In the ’90s, that’s when I got really interested with investing and that’s because of Robert Kiyosaki. I was reading his Rich Dad, Poor Dad book. Since I’m in the military, I just read a lot of information about financial freedom.

Suzanne: Just let me say not only did we read the book, but we listened to him on cassette tape if anybody knows what those still are.

[laughter]

Kathy: I still have some, I think somewhere.

Joel: That sparked interest in my mind to become familiar with investments and be on my own. However, because I’m in the military, I really didn’t have any chance or opportunity to do that until 2012 where we moved to Hawaii and really got started by listening to webinars and podcasts. Then I stumbled around the investing and turnkey operation, that’s where I first heard about turnkey operation and really didn’t understand what it is, just let it go until it became so popular later on.

I was able to listen to different individuals that have their own podcast, and then, all of a sudden, I stumbled… I googled your RealWealth and found out about your story and Rich’s situation. I just got intrigued and I talked to my wife about it.

Suzanne: It just was really inspiring and it helped us to realize that we could do something like that too. We just have to step out of the comfort zone and do it.

Taking the First Step into Real Estate

Kathy: You weren’t afraid when he brought this idea to you?

Suzanne: Well, originally, I can say honestly, not really. I think I was more excited, but then you have to go back to when we were in Hawaii and just driving around looking at the properties and thinking, “My goodness, there’s a lot of wealth going on here. What’s to keep us from being a part of that?” Those thoughts were always milling around in our conversations as we would drive around and over the years. Then finally, I guess it’s almost like a blister that’s ready to break me.

When he finally got in contact with your network and with you, I think it was ready to break and I think he just needed for me to say, “Just do it, for goodness sake. Let’s just do it.” Every day I would come into the den and say, “Did you sign up? Did you do it? Did you do it? Are we in?” It was something that was going to happen sooner or later but, you just have to step out, like I said.

Joel: Not understanding real estate, we started in ’93 when we moved to Texas. We bought a house there, and then–

Suzanne: To live in as our family home.

Joel: …to live in it as a family home of a young military person, and then when we move out of there, we can’t sell it.

Suzanne: We didn’t have any equity in it, it was still rather new, and the market was moving very fast.

Joel: At that time, the property value never really gets to where you can sell it in three years because we moved every three years. We ended up renting it. Since then, it’s been rented and giving us cash flow, but I didn’t understand all of that. We’re just saying, “Hey,” but the renter is paying for the mortgage.

Suzanne: Every year we would think, “We need to sell this. We just have to try to sell this,” but the market never allowed us to do that. I’m really glad that it didn’t because it made us hang onto a property that turned out to be our great investment.

Joel: What we used for our later investment. Then we moved to Alabama, the same thing, we bought a house there through VA loan, and we thought that would be our retirement home but it ended up we move again several places. The same thing, we didn’t sell it. We ended up renting it and giving us another cash flow. It just sit there and they are paying by itself but I’m not really counting on what I’m earning from it because it really didn’t dawn on me that it’s already happening until I heard you guys talk about turnkey and so —

The Benefits of a VA Loan

Kathy: Yes, you’re like already doing it, forced but you had to figure it out. When those markets that are more linear markets that just don’t go up in value, you can’t go in and out of them, you got to hold them. The strategy is different, it’s cash flow, and it’s a loan paid down and tax benefits. Trying to sell it is generally more difficult to do. How great that you were able to figure out a solution there and that solution worked. If you’ve used a VA loan to get a primary and then you rent it out, are you allowed to get another VA loan?

Joel: Well, there’s some limit, 484,000 is the limit. My first house and the second house were able to use up those limits. We were able to buy two homes without down payments or without PMI. It’s pretty easy and pretty nice, one benefit of the military that we were able to utilize.

Suzanne: Understanding that Texas and Alabama were, it’s just easier to get a good value home for a lower price than you would in other places. That was really beneficial for us.

Kathy: Your total amount borrowed from the VA is 480, but it could be several properties?

Joel: The total value of my property when we bought it was about 345. I still have extra, over 100,000.

Wealth Goal with 10 Properties

Kathy: Interesting. That’s good to know.

Joel: Now that when I registered in the RealWealth website, Aristotle Kumpis called me and gave me a little interview, and then talk about the strategy. By then, I already heard you talk about acquiring 10 properties to reach your wealth goals. I’m retiring this December and my goal is to acquire 10 properties by 2023. This year, after my wife really pushed me hard, we ended up buying two properties from Alabama, Birmingham area. Then one property, again, I listened to the webinar on Detroit, and my wife is from Detroit. We ended up buying a house property investment in Detroit.

Suzanne: That’s a lot of properties altogether. Now starting out, we bought four. We’re that much closer to the goal.

Joel: We used the equity that we have in one of our properties in both these two houses.

Kathy: You refinanced the Texas property?

Joel: I took an equity loan so I can buy those two properties and then I’m ready to buy another two property before the end of this year.

Sharing the Wealth

Kathy: That’s incredible. Now, why? If you’re just about to retire, I’m guessing you get a pretty good pension with the military. Why start now?

Joel: We have a goal. Our goal is to support an outreach ministry for our church in the Philippines. I grew up, was born and raised in the Philippines and I know I can help other countries, and I have pastors that are not paid pastors. They work by their own calling, and they work at the same time so they can serve the Lord and serve the people. Both my wife and I, the goal is to support some of those pastors that are really working to reach the unreachables in the Philippines. That’s our goal. If I can make 10,000 or 20,000 or 25,000 a month, that’s a lot of money that I can use for the ministry.

Kathy: That’s so beautiful. I met somebody once who had decided exactly how much he needed to live on and everything else would go to charity. I just was very inspired by that. That’s a beautiful goal and so important to have a reason to invest in real estate because it’s cash flow, but it’s not passive by any means. There’s work you have to do. Checks do come into your — It’s mailbox money, for sure, but there’s some time that is involved. Let’s talk about that. Even when investing through our network where a lot of the work has been done for you, there’s still work, what would you recommend that people understand about how much time they need to invest in this portfolio building?

Joel: You have to balance your time. Like I said, I’ve been working in the military for a long time and I commanded several units. Time is so valuable that you need to really be disciplined to follow it. In this case, while in the military, I usually have two hours, three hours every week that I use to look at my portfolio and also studying and reading about real estate. I think the hardest part was when you start acquiring the property because that’s when you put in a lot of work working with the company, mortgage company, and their property company.

It takes a lot of time getting the information, gathering all the documents and working with them. After that, it goes by itself. It’s really a turnkey at that time.

Suzanne: I think an important thing to remember is if you’re just getting into this and you’re married, it’s really important to get your spouse involved in the excitement of it right from the beginning. It can cause a little anxiety if only one person is really adamant about making this happen. To have support is very important because there are times when he comes home from work and he’s set up at his desk for several hours. If I weren’t on board or excited about this whole operation, I could become unhappy very quickly.

If you’re like-minded, I think it makes things a lot simpler. One way to become like-minded is to sit down and talk over your goals and to support each other and understand the things that hold you back or the things that excite you about this kind of an opportunity. When he comes home from work and he’s got to sit down and do that work, it takes time, but I completely respect that because I know we’re in this together.

The joy that we get from it just increases every time and the excitement about finding new properties. Not only the good times, there have been tough times in the past before we’ve even come into this network when our house in Texas we had a renter in there that destroys the entire house. We had to come up with 10,000 to just fix the walls and the floors. I think being a support to each other and knowing that those tough times are just little obstacles in the way, but you need to hurdle those together and get on with it so that you can see the bigger picture. Otherwise, you’ll get trapped behind it and just give up. Support is number one, I think.

Joel: Adding to that, my wife is always my number one fan, in the military and in the investment that we’re working on. She really was my inspiration when I really stepped out of my comfort zone because it’s kind of scary while still in the military and engage in investment, but she gave me a lot of support and comfort. That’s why we launched.

Investing with Your Spouse

Suzanne: Yes, I think that’s the importance of being on the same page, making sure you get on the same page if you really going to pursue it. Take the time and take the effort to get on the same page without pushing forward until you are there.

Kathy: I love that and it goes on both sides. If you’re the person who’s scared, then it’s your job to look at the things you’re afraid of and research it. I just did that in the presentation at last weekend’s event. Fear is the number one thing that keeps people back. What are you afraid of? Are you afraid of lawsuits? Well, guess what? Look into that. It turns out there’s insurance and there’s asset protection that can cover you.

You should be afraid of losses because they do happen, but if you’re adequately protected, either your insurance is going to fight for you or they’re never going to get to your assets, because it’s in an LLC, and it’s protected.

Both people have to do their job. If one person wants to move the family forward and the other one doesn’t want to, that’s an impasse, right? The person who wants to move needs to make sure the other person’s fears are addressed and concerns are addressed, and the person who has the fears needs to at least look at things and learn.

Suzanne: Absolutely. I think it comes down to a really basic tenet that you were speaking about, about fear is that as Vikram Chowdhry said, who is a famous yogi, he said, “What are you afraid of you? You don’t have anything to lose because you never had anything, to begin with. You come into this world with nothing. We can’t take anything out of it, so just go ahead and go for it.”

[laughter]

Kathy: I love that. Yes, we hold on so tightly.

Suzanne: We do.

Kathy: Yes, and if you do, it sounds like you’re very faith-based. My mantra is that I am guided and I’m cared for and loved.

Suzanne: Absolutely. Absolutely. That’s a good reminder. Thank you.

Kathy: [laughs] Then this morning, I added on to that and it was like, “I will be guided to the right people that will help me.”

Suzanne: It’s like you’re wasting no time, right? The rest of them you don’t need to deal with. Always looking at a positive direction.

Help from Educational Programs

Kathy: Yes, exactly. Very good. Okay. Well, you said that the educational programs at RealWealth really helped you? What specifically? Did you watch the weekly webinars? We found that a lot of new members are just not watching the videos that we produce, and I don’t know, we’re going to start making shorter ones. What really stood out in the educational process that helped you move forward?

Joel: The one that helped me a lot was when you put messages that says, “We’re going to have a webinar for the properties in Detroit or Cincinnati.” It gives me a big-picture kind of story of why do I want to go there? Why is that important to me? Why do I want to invest there? It gives me that freedom to really see without really seeing the place because you guys did it for us.

Also, I listened to your webinar, if there’s a — Like the one that you just did, your wealth, real wealth. I like to listen to you and Rich’s updates. You have a lot in your website that I just browse and listen to and so it just helps me a lot. You have a webinar on taxation.

Kathy: Yes, once you watch that webinar, it’s hard to hold people back from investing. [laughs] It’s like, “Oh, man, I would rather have my money go towards these investments than to the IRS.”

Joel: [crosstalk]

Kathy: Yes.

Suzanne: Absolutely.

Joel: Yes, of course. Actually, I was going to ask you, if you have any — I think you do have a list of CPAs that understand taxes for real estate investors, but I don’t have one there yet.

Kathy: Yes, on our resources tab, at realwealthnetwork.com, you’ll find a list of CPAs. When Rich and I started, we worked with a CPA who seemed to understand investments, but he messed some things up and he recommends– Sometimes CPAs will recommend investments, and he was recommending some not so great investments. Then he gave some friends of ours some poor advice that we had referred to him.

I can’t tell you how important it is to have an accountant who really understands real estate investing and specifically rental property, because the write-offs are incredible but your CPA has to know about them. If you have two conservatives of a CPA, or– Sometimes you got accountants who are just terrified of real estate in general, and they’ll just discourage you from it. That’s not the advisor you want.

Suzanne: Well, that’s excellent that you have all the resources listed there. We’re going to be definitely perusing those and making sure we get the right accountant for our needs at this point. Thank you for offering all that.

How Rentals Changed Our Lives

Kathy: You’re welcome. How do you see these rentals changing your life now or in the future?

Joel: It’s so bright we have to wear sunglasses.

[laughter]

Kathy: I love it. What is that? What’s so bright?

Joel: Well, like I said, our goal is to have 10 properties by 2023 and the goal is to pay off all of them. If I can pay off everything, those are 10 properties that can generate me at least 10,000 a month. With my retirement pay and other financial sources, I think we’re going to meet– Not that I think, we’re going to meet our goal of supporting our faith-based mission.

Suzanne: What’s exciting about that is that before we even got into this and were introduced to you in your methods and things, we didn’t know we had choices. We just thought, “Well, we’re going to retire on his retirement pay and we’re just going to sit on it and hope that it lasts us until we decide to die or God wills us to go earlier, whatever, and just try to live out that type of existence.” Then this opened our mind to the fact that you can either sit on that wealth or you can actually do something with it that’ll make a difference in someone else’s life.

Joel tells me all the time, “This is great. We’re going to get another house so that another little family can move in and have a wonderful place to live.” We just really like that. Knowing that those little families moved in there, that they’ve got a safe place, they’ve got running water and they’ve got things that work and a house that’s comfortable, that just means a lot to us.

This type of investing is really important for us because it just– If you can be comfortable, that’s one thing, but if you can espouse hope and joy in other people, that’s eternal. That’s not just earthly, that’s eternal. I think that’s what brings us so much joy in all of this.

Setting Goals that Help Others

Joel: It reminded me of– Before I retired, before we even looked into this, my goal was to retire and just retire. I had no more aspirations to do anything else, but since we got into this, my passion went doubled or tripled to do something else better. I’ve achieved my goals in my career, in my successes. Now that I achieved those– I define success as when I reach what I want to do, that’s success.

If I put a goal and I achieved it, that’s success, but now I want to be significant, significant to others. Now that I achieved my goal and for me to be of significance to others, add value to others and help other people. Just like Suzy said, our goal is to provide, especially those young families who aspire to have a decent living, decent family, to have a decent home with reliable appliances, reliable heat and electric so they can live comfortably–

I’ve been in the military and I have led a lot of young millennials and young airmen that they deserve a better life so that they can become leaders of tomorrow because my air force– I’m leaving my air force and I’m developing young airman to become the leaders of my air force in the future. That’s how we look at this investment. We want to produce a property that has all the necessities in life that they can use to raise their family and become a better person, become a better producer part of the community. Like I said, it’s for us now, our goal is to inspire other people, inspire other young people, young investors and help them out.

Like how we felt when we started, very afraid, I think we can definitely say that or mentor other young investors to, “Hey, it’s okay. Being afraid is okay because that means you’re stepping out of your comfort zone. Once you step out of your comfort zone, you realize that you are in the right track.”

Kathy: I love that and I couldn’t agree more. When you have the right intention like that where it’s not just an asset that’s spewing off cash flow and just making your retirement better– I mean that’s all good, but when you look at it from that angle, like you’re really providing a home for people, and it’s a home that you wanted to ensure was renovated to very high standards that they could raise their family, and you chose that home in a safe neighborhood near good schools, it is extremely fulfilling to know that you’re doing that for a family.

Then, to add on to it that the wealth that’s created from that you’ll be helping other families with it, it’s beautiful. It makes the tough part of investing which is the repairs and the vacancies and the things that happen– Like you said it’s just a little piece in a big picture. In several years, you won’t even think about that when the properties are worth more and they’re paid off.

Suzanne: Absolutely.

Kathy: Very good. Well, thank you so much for sharing your wisdom here. Any last tips you would give to our listeners that you’ve learned from this experience?

Suzanne: Well, gosh, there are so many, but my tip would be once you’re on the same page– My tip as coming from the spouse of someone who– he’s the income-maker, he’s the one who goes out to work every day. I’m a supporting spouse, and so my tip would be try to get on the same page and when you are, just step out in faith and just go ahead and do it. Nothing easy is ever worthwhile but, for goodness’ sake, don’t let fear hold you back because it’s too exciting out there and it’s too joy-filled to hold yourself back. Just let go and get informed, get on the same page and go for it.

Kathy: I love it.

Joel: In my case, I know it’s so difficult to step out of your comfort zone, but once you step out of the comfort zone, like John Maxwell said, “Jump and while jumping, spread your wings.” Don’t listen to negativity out there, listen to the people that like-minded, and increase your knowledge and passion and desire to achieve your goal, because your vision, your purpose and your desire will become into reality. That’s how we made it happen for us.

Suzanne: Your company has helped us do that, so we’re so appreciative. Thank you so much to the RealWealth and to you, Kathy.

Joel: Yes, thank you for you and Rich. Your story just inspired us.

Suzanne: Truly inspiring.

Kathy: Thank you so much. That means so much. All right. Well, you have a wonderful rest of your day and thank you so much for sharing your story and your tips and advice to our listeners. Really appreciate it.

Suzanne: Thank you, Kathy.

Joel: Thank you.

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