In this captivating episode, host Billy Alvaro dives into the world of real estate investing with guest Matt Saunders. Discover Matt's inspiring journey and the secrets behind his remarkable success in building a cash flowing real estate empire. Gain invaluable insights into the strategies that has allowed Matt to get to a point of earning over $95,000 in recurring monthly passive income. Get ready to be inspired and learn how to achieve financial freedom through real estate. Tune in now!- Matt Saunders' real estate journey and success (flipping, wholesaling, cash-flowing)- Importance of long-term vision and setting achievable goals- Generating active income to support real estate investments- Marketing strategies for finding deals- Creative financing options and their benefits- Scaling challenges and finding the right size for a business- Importance of adapting to market conditions and adjusting business plans- Importance of saving and building a "golden parachute" fund- Excitement for future meetings and a yacht dinner Head on over to... https://easysell411.com https://billyalvaro.com https://billyssecrets.com Who knows maybe you will be our next partner? To get some neat (and FREE) Tools | Tips | Tricks to help you in REI!
In this captivating episode, host Billy Alvaro dives into the world of real estate investing with guest Matt Saunders. Discover Matt's inspiring journey and the secrets behind his remarkable success in building a cash flowing real estate empire. Gain invaluable insights into the strategies that has allowed Matt to get to a point of earning over $95,000 in recurring monthly passive income.
Get ready to be inspired and learn how to achieve financial freedom through real estate. Tune in now!
- Matt Saunders' real estate journey and success (flipping, wholesaling, cash-flowing)
- Importance of long-term vision and setting achievable goals
- Generating active income to support real estate investments
- Marketing strategies for finding deals
- Creative financing options and their benefits
- Scaling challenges and finding the right size for a business
- Importance of adapting to market conditions and adjusting business plans
- Importance of saving and building a "golden parachute" fund
- Excitement for future meetings and a yacht dinner
Head on over to...
Who knows maybe you will be our next partner?
To get some neat (and FREE) Tools | Tips | Tricks to help you in REI!
Billy Alvaro
00:00:17
Welcome to Unstoppable real estate investing wealth. My name is Billy Alvaro, aka the Unstoppable BA, former billion dollar mortgage banker gone bankrupt, turned professional real estate investor, where each week you'll learn the tools, strategies, systems, and secrets myself and other highly successful real estate investing entrepreneurs use to start, grow, and scale their businesses, creating massive profits and how you can too. And we'll teach you how to put those profits to work so you no longer have to get ready to finally experience financial freedom and generational wealth. Now, let's get started. What's going on, everybody? This is Billy Alvaro, back again, unstoppable rei wealth today. I have a friend on. I like to call him a friend because he is just that, a friend. Mr. Matt Saunders from Virginia Beach, Virginia. Matt's been investing for years, and I got to tell you, he's not going to brag about himself because that's not the type of individual he is. Matt, you're on mute. Just so you know, that's not the type of individual he is. But Matt, I look at him about the same age. This gentleman, has the lifestyle of lifestyles. He set his business up, to where he has cash flowing, cash flowing real estate, a lot of it free and clear. He did it the right way. He was taught the right way. He executed the right way. If you guys are fixing and flipping and wholesaling, I want you to pay special attention to this episode because we're going to get in with Matt on how he built his empire in the Virginia Beach area. Matt, welcome to the show, brother.
Matt Saunders
00:01:54
Hi there, Billy.
Billy Alvaro
00:01:56
Coming from your beautiful boat out in West Virginia. I love it. I love the I You and I met CG a while ago. We started getting really friendly about a year and a half, two years ago, smoking cigars and hanging out and really brainstorming about business and life and psychology and about the body and just getting to know you. This is no bullshit. Like you're a down to earth, solid human being, good natured, great values. And on the business side, I'm looking at you and saying you could be my mentor on the business side for what you've built. In regards to your cash flowing business, you have. How many years, Matt, have you been doing this?
Matt Saunders
00:02:34
Um, the first house ever flipped was March of 2004. So actually 19 years. Not an overnight success.
Billy Alvaro
00:02:48
19 years. I love it. And did you have the mindset from the beginning, Matt, of coming into this and owning cash flowing businesses? Or what did it start off? And were you a fix and flipper wholesale type guy?
Matt Saunders
00:03:01
I was definitely the first, what you just said. I got into real estate so that I could get a number of properties. At that time, my vision was all on 15 year money. And then in 15 years have enough that I don't have to work so that's actually what started me in real estate, was just the idea of buying things that make sense financially on, ah, 15 year money. And then 15 years later, it's all paid off. The first rental property I bought was September 2002. And the first flip I bought was March 2004. So call it two years yeah. Flipping houses is active income has nothing to do with wealth.
Billy Alvaro
00:04:00
Correct.
Matt Saunders
00:04:01
Is what's left over after your active income that you then invest for future growth. And I think that's where people, get really confused. And it's normal because you see all the commercials and all this association. I call it all flash, no cash. People are brought up to think, like, big cars, big houses, big boats, I'm rich. But none of that is really wealth, because it all is just money going out.
Billy Alvaro
00:04:36
you set your lifestyle up. Exactly. I don't know if it's exact, but your vision in 2001, two, three, when you started with this, you've basically reached your vision, Matt. I mean, you have a lot. I don't know the number, but you have a lot.
Matt Saunders
00:04:51
You're going to laugh. let me just tell you what the vision was then. Okay? I started my first company in 26. It was basically an advertising sales company. I'll say fax advertising, but most of the people listening here won't even know what a fax is. But, the bottom line is, I was busting my ass with a dozen employees, typically netting out about 150 to maybe 180. But it was so much work. I'm talking, like, in the office at 730 in the morning, out of the office at 630. Just cooked and I was like, Man, I got to get out of this rat race. So I basically wanted ten paid off rentals that would give me $10,000 a month after expenses 2000. And 215 years later is 2017. I don't know how many I had then, but we're in 2023, and our paid off rent roll is $95,000.
Billy Alvaro
00:06:06
I want you to repeat that. That's not $95,000 a year. That's $95,000 a month.
Matt Saunders
00:06:11
Right. And that's how come I could do something that's as financially irresponsible as being this 58 foot boat.
Billy Alvaro
00:06:19
Because let's call it what it is. It's a yacht.
Matt Saunders
00:06:24
Matt.
Billy Alvaro
00:06:24
Look, I watch you on Facebook. You got this magnificent lifestyle. You have a plane, you're a pilot. You fly to a lot of the events that we go to. Like, where's Matt? Oh, he's flying in in a half hour. And I see a video recording on Facebook. When you started off with your ten property vision, how did this propel into $95,000 a month? Give the listeners some insight as to what you did, because there's a lot of guys out there who think it's impossible, right? They have the vision, they have the drive, they have the desire. But because they don't know how to. They kind of like, I don't know if it's real. I hear about these guys doing it, but how do I actually go about doing this?
Matt Saunders
00:07:05
Okay, this is some of the topics I just love talking about. So thank you for asking okay. I just love helping people get some type of vision that's meaningful to them. And then you don't have to be a business whiz to put numbers on it. So what I often tell people is, like, what to you would mean something worth working for. And to me, back then, it was, man if I can just get the $10,000 a month in today's dollars, which is a side note, rental property goes up with inflation, so you're always going to be in today's dollars even if you're out there in the future because the rents are higher. But in today's dollars, $10,000 a month, I can at least get by without working. so that, to me, was worth whatever pain I had to go through in learning, thinking, and taking action. So going back to advice is I'd start with some type of vision that has a timeline in the future that you can buy into as being achievable. So, like, if someone had told me in 2002, oh, no, Matt, don't have that small vision go for, like, $80,000 a month, my brain wouldn't have bought it. Billy so if you can't believe it, you heard it, you can't believe it, you can't achieve it. But what I could believe is like, okay, if I can get, like, ten and make them fit these numbers, I could believe that happening. Okay. so that's the first thing is I'd say a meaningful goal, and the second thing is a time horizon. That's believable. And then, like, any goal, okay, break it down to one at a time. And for me, back then, I didn't know anything about this type of business. I just read a couple of books on rental properties and, knew that if I put 10% down and could rent it for about $100 a month and really, it should be more than that, more than the 15 year note. I would beat any 15 year segment in the stock market without even adding appreciation.
Billy Alvaro
00:09:28
Yeah.
Matt Saunders
00:09:29
Then I was just, like, locked on because I'm like, okay, I'll not use cuss words, but I really want to forget.
Billy Alvaro
00:09:39
Listen, I'm a New Yorker, so curse as much as you want.
Matt Saunders
00:09:44
Like, fuck all these financial salesmen that tell me I don't want rental property. If I could have, stopped the March of 2000 drop by CEOs calling me at two in the morning, I would have stopped it because I lost 200,000. I lost almost 50% of what I had in March of 2000. Being in the, equities market anyhow, I'll ramble sometimes and lose my place. Where were we? We're basically saying, believe it a segment you can believe, like, something you can buy. And I could buy the idea ten properties, one at a time. I didn't know how going about it was. I set the goal, bought a couple of books, ripped through them, and realized if I could put them on 15 year notes with 10% down and they rent more than the note P-I-T-I, would beat any 15 year segment in the stock market, period. They need to appreciate zero appreciation. And so to me, there's a.
Billy Alvaro
00:10:52
Lot of people, Matt, who would say, man, $100 a month or $200 a month. See, this is the mind frame where fix and flippers. It's the flash versus the long, hard road of building wealth. Talk to the audience about, one, two, $300 a month where you could have flipped the property. You could have made a quick 2030 or $40,000 in cash. What kind of discipline did it take you to keep yourself in check to make sure you were going towards the guidelines of your plan? So in 15 years, you have the lifestyle that you have now.
Matt Saunders
00:11:25
Yeah. super question, Billy. Because you're not making one or 200, you're making zero. Like, you rent it out for more. You are making zero. And when you look at maintenance cost back then, I was new. It really needs to be like 300 a month more, because maintenance cost and vacancies and things like that over a big period cost more. So, the answer to your question is it goes back to the first thing, what's some vision that you can buy into and is meaningful to you. And to me, that vision of 10,000 a month and that if I'm stressed out and don't want to work anymore, I can at least get by. That was worth sacrificing any now money. Now, that being said, I believe in now money. I'm just not going to take my, let's just call them like animals that are supposed to lay eggs, golden eggs, and slaughter them today for more money. I'm going to go out and hunt a deer or something that isn't laying golden eggs and eat. So, like, I believe in now making now. I just, um, separate the and conceptually, too. There's an idea of Matthew inc or Billy inc? Which has nothing to do with any of your companies at all. And I bought this idea so long ago. I think Charles Givens, m boy, now we're really getting old. He was old.
Billy Alvaro
00:13:01
That's an old name right there, man, back in the day. Charles Givens.
Matt Saunders
00:13:07
Yes. I think I bought something of his. And he was know, you pay yourself first and then you pay everything else. And I bought that idea because I'm like, separate from my companies, separate from anything is the Matt Inc. Investment portfolio. So Matt can just say, I'm done with everything. I'm going to go smell the flowers, do whatever. I don't have to work. So circling back to your question. you just have to have a desire and a vision that you can buy. And really, Billy, the end of the day, if you're not willing to sacrifice today for tomorrow, tomorrow will be the same as today. There's a good thing. And that is, people give up what they want most for what they want now. it's immediate gratification versus long term.
Billy Alvaro
00:14:14
And this is the world we live in. Everybody wants things now. Nobody wants to wait. Very few people want to wait. Very few people are disciplined. Very few people have the mindset to be like, you know what, I hate to use the word suffer, but I'm going to suffer for a period of time until I come out the other end. Now, your life would have been completely different, Matt, if you would have just fixed and flipped and wholesaled and lived high in the hog and spent the money that you were bringing in on bullshit. Whether it's second houses that aren't producing income or boats that aren't producing some.
Matt Saunders
00:14:52
Hole in the water like this. I could have bought something like this 20 years ago with my active money. Wouldn't have been able to do what I did on the other end.
Billy Alvaro
00:15:00
Correct.
Matt Saunders
00:15:01
And then when you get older and this is what I want to really impress upon younger people, you get really fucking tired, okay? I want you to hear that if you're out there in your 30, you will be really fucking tired at some point in your life when most people think about retirement, okay? It's very difficult to accomplish at that point.
Billy Alvaro
00:15:31
when you were doing this, obviously you didn't have a regular job. You went into this field full time. So did you have any type of process or formula where you're like, you know what, I'm going to flip one, I'm going to hold two, because you need that active income, right? You're not going to survive in a couple of month as you're buying these properties. So how did you, as you were building your wealth, talk to the audience on how you actually also had active income that you were able to live off of. Pay your bills so you can keep the thing flowing and keep your vision of 15 years out in the future actually happening.
Matt Saunders
00:16:08
It's just like you said, Billy, these numbers changed over time. But when I got started, I wanted to do like buy three, keep one, like by four.
Billy Alvaro
00:16:27
Keep.
Matt Saunders
00:16:31
25% of them, and the market shoot. Okay. There you are. I'm waiting. Cause unstable internet.
Billy Alvaro
00:16:43
You're good?
Matt Saunders
00:16:44
Billy, are you back on? Yeah, you're good.
Billy Alvaro
00:16:46
So I heard you say that you were holding on to 25%. Is that what I heard you say?
Matt Saunders
00:16:52
That was the goal, but the reality was that, say, by 2005, real estate prices had gone so high that it did not make financial sense to rent. Because if I'm buying something that I'm paying 150 for, and I can get 250 for it, and I can get $1,200 in rent. The numbers just don't make sense, right. So it was only when certain things would come across my plate in the boom back then that I would keep, so it was probably closer to like one in five, or one in six, or one in seven. But after 2010 or eleven, it definitely went more like one in four. Because you could pick up deals where the rental value made black and white good sense.
Billy Alvaro
00:17:48
Matt, when you started doing this, and I don't want to talk about now, because I know you have a different model now with what you're doing. But in the early stages, and I guess from beginning to like five, eight years in, were you marketing for deals? Were you cherry picking deals off the MLS? What was your process to bring the deals in?
Matt Saunders
00:18:08
it was always marketing, um, with the exception of back then, pay per click and Direct mail. We did some signs, but signs got to be very stressful because you're hiding from the zoning enforcement. I just decided I didn't want to do it that way so yes, internet, pay per click back then. And then it became where you couldn't even make money, because out of 1000 leads, 1000 owed more than the property was worth, because they had refinanced ten times in the last month.
Billy Alvaro
00:18:50
Around there, 8910.
Matt Saunders
00:18:51
Ah, yeah. And that's when I started looking to after the crash, there was like a year where I did very little business. I tried a lot of short sales and stuff. I made like 75,000 that year. That's how working my ass off too but then after the market crashed, I went all on, MLS in the HUD home store. And that worked really good for about two years, maybe longer, but two years for sure. And then everyone knew about it. And once everybody knows about something, there's too much competition, prices get up too high, you know how the deal goes. So that got me direct marketing. So yeah, with the exception of two or three years, have always been direct marketers. Yeah.
Billy Alvaro
00:19:41
So this is important for you audience to hear. I want to underscore it, because every great business is built from marketing. From great marketing. If you want to scale, if you want to have any type of real business, you have to have a process to drive in leads. And that process is generally either direct marketing or referral marketing, or depending on where the market's going. To your point, if the market changes, we have another crash. And then there's an, abundance of deals that are on the MLS that you can cherry pick off. By all means, you're going to shift your marketing process to now driving these leads that are going to cost you very low. And then to Matt's point again. Once everybody jumps on the bandwagon and the margins start to get compressed and it's really competitive, you need to switch gears. So the thing is, with entrepreneurs like us, in order to make money and to grow, you need to be versatile. You need to shift gears quickly depending on market conditions. And Matt, you've been doing that for the last 20 plus years talk to the audience on as you were growing your wealth, whether it's on the wealth side with the buy and hold or the fix and flip. How did you go about the financing? What did that look like in the early days and what does that look like now?
Matt Saunders
00:20:49
Okay, well, in the early days, I, um, went to a local bank. And I'm going to give you my story, but I don't want anyone to be discouraged and say, oh, that doesn't work for me. I started out at 24, like, determined to have enough money that I didn't have to work. But at that time, I believed in equities. And I don't not believe in equities, by the way. it's just not the best path and definitely not the best path for me. So anyhow, bottom line is when I turned around and went to banks, I already had 300, 400,000 in different investments. And that had dropped a ton because March of 2000, but, I mean, it was still 300 drop. So I went there and also a decade of showing PNLs from my fax advertising company. So I guess what I'm saying is, if a bank was going to take a risk on somebody, it would be me. But I called about ten banks, which is a total waste of time unless you're going to a local community bank and have a decision maker, which is what I ended up with. so that's how I financed them, local community banks. Some, of them were better than other ones, but, at the end of the day, that's how I did it. However, nowadays, as you know, Billy, there are tons of lenders out there that lend in this space, and they were not in the early 2000s. You have a lot of yeah, I mean, kabali or whatever. I don't know what the lenders are because I have such cheap, money, or as cheap as money gets nowadays that it doesn't make sense to talk to those guys. But nowadays you can get a hard money loan that isn't even hard money.
Billy Alvaro
00:22:50
No, it's cheap money. People look at it like, how could you pay 9% or 10% if you're fixing and flipping? Or 8% if, it's a rental property. Yeah. If the property cash flows, the property is going to make you money.
Matt Saunders
00:23:06
And that's an important point, is, like, you can't get lost in the small picture. You got to look at the big picture. Yeah, I agree.
Billy Alvaro
00:23:18
Have you ever done any type of.
Matt Saunders
00:23:22
When you look at the big picture over 15 years or 20 years. Appreciate I mean, even in eight, we're past eight values. The eight crash. Okay? So we're in 2020, 315 years out, and the values are higher than that crash. So even if you had bought at the peak in eight, you are now better off 15 years later.
Billy Alvaro
00:23:48
It's crazy. Real estate is the number one way to build wealth. Without a doubt. No doubt about it. Owning your own business and investing in real estate, I should say those two is the pathway to wealth.
Matt Saunders
00:23:59
I agree.
Billy Alvaro
00:24:01
Have you ever done any type of creative financing, subject to lease options, anything like that, or it's always been regular, simple deals.
Matt Saunders
00:24:10
everything you said. obviously if you're buying a foreclosing property, someone that's going to, in the future be in foreclosure, be it a week from now or ten weeks, very easy to get subject to deals because their credit is already not good and you're going to make payments on time and that's going to help anyhow. So, yeah, subject to deals, we still do them, even if we've got credit lines that are, like, as easy as writing a check out of your checkbook. But I'd still rather do a subject to deal because it's not on my credit line. I love subject to owner finance, if anything, that's something we haven't done well. but need to meaning when you're talking to a landlord and someone that has a paid off property working a deal that's owner financed versus just making it about money, because when it's just a price, it's, hey, I need it at 80. He wants 120. Well, we're 40K apart. But if you're like, hey, if I give you 120, can I pay you over the next 120 months and you get your price? And if like, yeah, well, that's awesome. I think I've only done one deal that was like that. And I do remember a good tip. It was, reference monthly amount and then say what you'll pay for interest. So, in other words, hey, Billy, I'll give you $1,000 a month for the next ten years for this property. Okay so whatever the math is on that, what is that, 120 grand? and for interest, on that, $1,000. I'll put $100 on every payment. So you get $1,100 and you're like, hey, that's 10%, right? It's 1% because you're referencing the actual monthly payment and, uprincipal, 100% principal, and then putting $100. So it sounds like 10%. But on $120,000 loan, you've only paid $1,200 for the year in interest. That's insane. And most people sounds good. That sounds good to me.
Billy Alvaro
00:26:36
Yeah. I did one of the deals recently. I did a 0%, interest rate loan on a deal that we bought down at the shore. I turned it into an airbnb, and it was magnificent. The lady just I gave her the price she was looking for and in exchange, she gave me seller financing, and we did it at 0%. When it went to her attorney, her attorney did the old. According to the federal guidelines with IRS, you have to impute a certain percentage of interest rate. So we ended up decreasing, the loan amount that I was borrowing from her imputed the interest rate, which I think was like one seven five or something to that effect. So, it turned out to be the same amount I bought the property for, except we busted out a portion of it for interest, the rest for principal. She got the money she wanted, which was $1,000 a month. I got the deal, we'renting it out, and it's making us, a nice little nut each month on the airbnb. Yeah. Creative stuff is fun, man.
Matt Saunders
00:27:29
I love doing how many years was that loan?
Billy Alvaro
00:27:33
That loan is I think it's like an eleven year loan. Twelve years, three months. It's like a weird number.
Matt Saunders
00:27:41
Well, that's okay. It's a decade or longer. I just love it, because if you're just paying principal, which is what you're paying, over eleven years, I'd have to get a calculator to give you the present value of what you actually just bought. But it is far greater than what it appears on the, 100%.
Billy Alvaro
00:28:09
For sure. Matt, what is your business today? So you got your son involved, right? Tell me what your business looks like today in 2020.
Matt Saunders
00:28:18
Yeah, absolutely. So I have my main acquisition guy, Garrett, who is essentially a partner. He's a profit partner.
Billy Alvaro
00:28:30
Oh, shit. We just lost him. We just lost matt.
Matt Saunders
00:28:37
Can you hear me?
Billy Alvaro
00:28:38
Yep. You're on? You're back in.
Matt Saunders
00:28:41
Yeah. So, basically, I essentially have, like, a partner, and he's in charge of acquisitions. And, then my son works in acquisitions, and we now have him focused on a section of acquisitions that Garrett, the other acquisitions guy, never touched. So it's just new money. so that's what acquisitions looks like. Staff wise, we have two, ah, full time transactional coordinating people, property managers, this type of thing. And then we have two part time bookkeepers, one construction manager, and, my wife lists all our properties.
Billy Alvaro
00:29:26
So you're running a tight business. Running a super tight, efficient business.
Matt Saunders
00:29:33
Literally. Revenue, uh, wise, over 50% of the revenue is profit. If you take salaries. When I say profit, because Garrett gets a percent of the profits, I include him, in with that statement. Yeah. So, my business philosophy, what I love about entrepreneurship, whatever the right size is for you, is the right size. so you could be a solo flipper and have rental property. Eventually you need a property manager and do great, as long as that's what you want to do. You'll need an assistant. But, I mean, there's guys that have an assistant, a property manager, and probably knock down 800, 900,000 a year and no employee headaches. Now they're working a lot, but oh, well, what else are you going to do? Totally. But at the end of the day, let's be real. Idle time is not good for people that are driven, like collective genius that have 100 employees. And I just want to puke at that idea. Squeeze for the juice. That's what I call it. What's? Just enough chaos for the money. And then beyond that, I just don't want more chaos for more money.
Billy Alvaro
00:31:10
It's chaos. It's a large dynamic. It actually erodes your margins.
Matt Saunders
00:31:15
Right?
Billy Alvaro
00:31:15
I mean, when I was a lot smaller in this business, my margins were exceptionally high. And as we've grown, still very profitable. But on the margin side, the margins are a lot less. Man you're not talking 50% margin, you're talking 30, 32% margin. And sometimes it drops down below 30. And it's like if you want to scale. So it's a balance, right? Like I'm going through in the last year and a half, we've been scaling heavily. And in the business where I'm at geographically, our cash conversion cycle is just so damn long. Matt that the money we invested last year, we're not seeing for another four or five months. That's how crazy it is here.
Matt Saunders
00:31:57
Wow.
Billy Alvaro
00:31:58
That's a long cash conversion cycle.
Matt Saunders
00:32:02
Does permits take forever? Why is it so long?
Billy Alvaro
00:32:06
Yeah, so, um, because we're in an attorney state, getting them in the contract takes a long ass time. Number one, if we're going to renovate, we turned over to doing a lot of renovations this past year and a half. So on the renovation side, the permitting process is extremely long. Then on the back end, just the way the market flew, it was really in our favor. Values are going up, but because rates went up so high, a lot of the people on the buy side, when we were buying, we got them to accept terms, but then they couldn't move because they had nowhere to find and move into. They couldn't find a rental, they couldn't find another property to move into. So everything, instead of us compressing this year, the cash conversion, our cash conversion cycle actually has morphed. It's gotten really long and it really put a hammer in our process because we're like, holy shit, we actually need to start flipping. We had this plan to do a ton more renovations, but we had to turn it over. We had to be dynamic. We had to see what was going on in our own market. And we actually started turning back over to wholesale to get the cash back in quickly. Because the cash on the wholesale side happens a lot. The velocity happens faster than on the fix and flip side. But the reason I'm bringing this up is I want people to heed caution when you're trying to scale in this business, there's so many different variables that you need to look at. And it's such a dynamic business that you really have to. Have your eye and your finger on the pulse, on everything, on all your key performance indicators. And I'm not talking just marketing with your cash conversion cycle. Most important, if you're going to go from wholesale to fix and flip or add the Novations in, you really need to understand your cash conversion cycle. Well, what are you doing there? You got an oxygen mask.
Matt Saunders
00:33:53
Exactly. I mean, you make your plan, and then it is what it is, and you got to deal with the reality of the situation. Yeah. Let me see here. I'm plugging myself in before I run out. Billy, can you hear me?
Billy Alvaro
00:34:06
Okay, you're good. You're a little choppy, but you're all right.
Matt Saunders
00:34:12
Billy? Yep. Okay. There you are. Can you hear me?
Billy Alvaro
00:34:14
Okay, I got you.
Matt Saunders
00:34:16
You're good. Could you hear me? My phone was about to run out of juice, so I had to go plug it in here in the kitchen.
Billy Alvaro
00:34:22
Well, look, we're just about anyway, man.
Matt Saunders
00:34:25
Yes, I can. But your point, though, about having to switch gears? Go ahead, I'm listening.
Billy Alvaro
00:34:33
No, go ahead. There's a lag in the speaking.
Matt Saunders
00:34:38
Okay. You were saying, though, that you had to switch plans and wholesale more because the cash conversion was taking so long, and I guess all I was chiming in on is, hey, that's business. We make our plans, but then we adjust to the reality of what's happening 100%.
Billy Alvaro
00:34:58
It goes back also to the people on your team. If I didn't have a really strong CFO who was bringing this stuff to our attention and being like, look, here's what we had plan wise, and you're hitting your milestones for new deals coming in, but your conversion is starting to spread out. We need to modify what we're doing internally in the business because it's not sustainable to keep on doing all these rehabs simply because of the cash conversion cycle. So we quickly saw it. We made a pivot. We got everything working again. But the plan to scale needs to happen slow and steady, in my view. And it's not all what it's cracked up to be. To grow to 100 employees. I had, when I had my mortgage company, 900 employees. Not something I ever want to go back. Yeah, throw up. Exactly. It's just a lot of employees, a lot of headaches, a lot of BS. And at the end of the day, it's about lifestyle, and it's about what you can do with yourself when you're here as you're growing the business. I don't need the stress and the aggravation.
Matt Saunders
00:35:56
Yeah, go ahead.
Billy Alvaro
00:36:00
Three years ago, I wanted to scale. I saw me scaling this business to a huge level. And as I started going, I'm like, you know what? I don't want the same problems. I want to have a really healthy company, and I want to scale in the certain markets, but I don't want the massive overhead, the 50 employees. I just don't want to do it.
Matt Saunders
00:36:16
Well, in Billy, one of the quotes you've heard a million times, and I used to always throw up on my presentation in CG is comparison is the thief of joy.
Billy Alvaro
00:36:28
Yeah.
Matt Saunders
00:36:29
And when we're at CG, at least this is my opinion, it's like everyone's like, scale, scale, scale, bigger, bigger, bigger, bigger. And for, some people, that is the right choice. But just because other people are doing it and then you feel compelled to do it, not you. I mean, whoever, a person really is going to be best when they figure out what it is they want without regard to the guy over there saying he's got a bigger one than you. Let's be real great.
Billy Alvaro
00:37:11
Matt, listen, I thoroughly enjoyed the conversation today. You gave some really good value. The guys and girls who are listening that are doing the fix and flip and the wholesaling listen, if you want to build wealth, you have to mix in first. Do what Matt said, create a plan. Get disciplined on that plan. Doesn't mean you have to forego any type of active income today. You're going to need that active income to keep yourself going. But if you're not planning for the future, you're never going to end up with $100,000 a month in passive income just by it happening. You have to plan for that to happen.
Matt Saunders
00:37:40
And Billy, on that note, too, um, what I would encourage someone to do that's, like, oh, there's no way I can save 20% of my income. I would say, okay, what are you making right now? And let's just pretend they said 100 grand. And I said, okay, now everything over 100 grand. Save 65% or 75% of that way. You still enjoy making more money because you have more to spend. But a huge amount of that additional is going to, um, what I call you inc your private parachute fund. Golden parachute fund. Because it's very hard to go, hey, I'm spending 150 grand. I'm going to save 50. That's painful. But to say I'm spending 150, I'm going to make 200 by doing these things and 75% of that I'll invest. Or if you're really weak, half of that, whatever. I'm just saying, like, if you take it off of gross income, it's much easier.
Billy Alvaro
00:38:43
It's the concept you're saying is very similar to Profit First, that book that came out. Yes, extremely similar to that. Profit, that book. And so paying yourself first and then paying out everything else is the way to do it. It's really the only way to do it.
Matt Saunders
00:38:58
And that's how you have your own golden parachute. And just like the compound effect, you start doing that and yeah, the first year or two, you're like, yeah, it's not so much. And next thing you know, three or four years later, you're beginning to get excited about seeing your wealth grow. And then you wake up 20 years from now and you're like, holy shit, I'm so glad I did that.
Billy Alvaro
00:39:19
Yeah. it's a grind, brother. But it's a long term game. It's a long game. It's not a short game. Everybody out there.
Matt Saunders
00:39:27
Amen.
Billy Alvaro
00:39:28
This was a, uh, great interview, man. I'm glad that you had the time on your beautiful boat today. I'm sorry I'm not going to see you in two weeks, but we definitely have to stay in touch. I want to get together with you. Maybe come down to Virginia Beach.
Matt Saunders
00:39:41
That'd be awesome.
Billy Alvaro
00:39:42
Yeah, we'll down, me and my girl. We'll have some dinner with you guys, and it'll be nice.
Matt Saunders
00:39:46
And we'll go out yacht.
Billy Alvaro
00:39:52
Fantastic. Good seeing you, pal.
Matt Saunders
00:39:54
All right, guys.
Billy Alvaro
00:39:55
Thanks so much. Bye.