Probably one of the greatest problems employees face is having a 401(k) but not realizing how it can generate a stream of income after retirement. The 401(k) savings plan (or any other savings plan), will only generate so much money that will easily be depleted when an employee doesn’t know how to invest, how to spend, and how much needs to be saved. Thankfully, we’ve got Eric Martel to share with us investment opportunities and how to make money work in your stead. Eric Martel of Martel Turnkey is well-versed in risk assessment having worked as an actuary before diving into 25 years of project management and business consulting. Eric’s experiences have allowed him to see where the average employee makes mistakes when it comes to managing their finances, and how he can help them achieve financial freedom. What investment vehicles should people consider? What makes turnkey properties a great investment option? What other key factors get you closer to financial freedom? Tune in to learn more about the hottest and most relevant information on real estate investing! Tune in to learn more about the hottest and most relevant information on real estate investing! Grab Eric's book Stop Trading Your Time For Money https://www.amazon.com/dp/B08KWM5PW1 Thank you all for listening and I will see you on the next episode. When you are ready head on over to https://billyalvaro.com or go grab your tools to help you at https://billyssecrets.com
Probably one of the greatest problems employees face is having a 401(k) but not realizing how it can generate a stream of income after retirement.
The 401(k) savings plan (or any other savings plan), will only generate so much money that will easily be depleted when an employee doesn’t know how to invest, how to spend, and how much needs to be saved.
Thankfully, we’ve got Eric Martel to share with us investment opportunities and how to make money work in your stead.
Eric Martel of Martel Turnkey is well-versed in risk assessment having worked as an actuary before diving into 25 years of project management and business consulting.
Eric’s experiences have allowed him to see where the average employee makes mistakes when it comes to managing their finances, and how he can help them achieve financial freedom.
What investment vehicles should people consider? What makes turnkey properties a great investment option? What other key factors get you closer to financial freedom?
Tune in to learn more about the hottest and most relevant information on real estate investing!
Grab Eric's book Stop Trading Your Time For Money https://www.amazon.com/dp/B08KWM5PW1
Thank you all for listening and I will see you on the next episode. When you are ready head on over to https://billyalvaro.com or go grab your tools to help you at https://billyssecrets.com
[00:00:00] BILLY: What's going on everybody. This is Billy Alvaro episode, 50 unstoppable REI wealth. Could you believe 50 episodes in 50? I still feel like I'm a damn Virgin to this stuff. Anyway, today on episode 50, I'm interviewing Eric Martel author of stop trading your time for money. And in the book he goes into how to start buying single family homes, turnkey, single family homes to build up your wealth and your cashflow. He's the owner of Martel Turnkey he's out of California and he's investing virtually in four different states. Him and his son have built up the company where they're doing, uh, just over 150 turnkeys a year. Plus he's an apartment investor. He's an entrepreneur has multiple other businesses that he owns. You're going to enjoy this. He really pulls back. The curtain gives some really good information on his business operations, how he acquires the properties, how he runs these deals virtually and how you could start putting your money to work with him in his business and start earning some passive residual income [00:01:00] with turnkey, single family homes. I hope you enjoy the, the show.
[00:01:03] Welcome to unstoppable real estate investing wealth. My name is Billy Alvaro, AKA the unstoppable VA 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.
[00:01:43] Welcome back to another episode of unstoppable REI wealth. I'm your host, Billy Alvaro, with you today with another episode, and I have a gentlemen on the line from the west coast, Eric Martel, Eric, welcome to the show today.
[00:01:55] ERIC: Oh, well, thank you very much. Thank you for having me really appreciate it.
[00:01:58] BILLY: Awesome, awesome brother. [00:02:00] So Eric, give us a little background of who you are and what you do
[00:02:04] ERIC: well, so I, uh, basically I'm a owner of Martell turnkey, so we, uh, we started to do it. we are basically a turnkey provider, but, uh, the way that I started, it's kind of like a, kind of a long journey. To get there. And that was never really kind of like a, the intention, but, uh, basically based on what we had seen in the market, like we decided, okay, well, this is, there's a real need here for us to, to do turnkey, uh, single-family rental for people that want to achieve financial freedom
[00:02:34] BILLY: I love it. And where's your so turnkey, just so people that are listening, if they're new turnkey what?
[00:02:40] ERIC: Turnkey means that we're basically doing everything that we need to do for the customer. And then the end product is basically ready to go for our investors and our, so basically cash flowing from day one. Uh, so that means that we've bought the distress property. We rented it out, we renovated it, rented it out. We're [00:03:00] connecting to new, uh, the new investor with the lender with the property management company, with the insurance company. And literally when they sign, when we close the deal, everything is ready to go and it's cash flowing. So that's what we mean by turnkey.
[00:03:14] BILLY: I love it, So I want to get into, into this thing. So you're in the single family space, do you do apartment or just single family?
[00:03:20] ERIC: That's correct. Really single family. We find we also do a apartment buildings, but really, I think the focus for a lot of the people that are getting started, it's a little bit of a jump to go from W2 job to. Apartment buildings. That's what a single family rental is a, is a great space for people to get their feet wet. Get started to build a little bit of a portfolio, uh, and see if that's the kind of thing they want to do. And then they can move on to the apartment building
[00:03:49] BILLY: all right. So let's talk about how you go about sourcing your deals. What does that look like?
[00:03:53] ERIC: So we, uh, we actually have a couple of people that are responsible for the acquisition, but really if [00:04:00] we look, if we step back how we selected the markets, I think that was also something that was very unique because you can imagine that finding cashflowing properties in the United States.
[00:04:11] It doesn't happen everywhere. Yeah. As you mentioned earlier, I'm on the west coast, so,impossible while you can, but you just basically I have to buy the thing gas and then your return is just, uh, your cash on cash return is horrible. So. We had to find other markets to do that. Then we kind of went to the white board and say, okay, what are some of the criteria is what are other investors doing? What? And, uh, so that's when we came up with, uh, Memphis St. Louis, Cleveland and Detroit. So these are the four markets that we're in right now. And. We work with a team on the ground. So we're working, we're working with people that have been there, like realtors, uh, the, basically one key realtor in each of the market that is really on the pulse of what's happening in the market. And they're telling us, they're guiding us and telling us that this neighborhood is up and coming. This is [00:05:00] the neighborhood you want to be in. This is low crime, blah, blah, blah. And then we capture all of that. Then we invest very specifically key neighborhoods where they're going to be cash flowing. BNC class. And then we know that the school is going to be good crimes relatively low. So that's kind of where we invest. And then we have two acquisition people that, uh, analyze all the deals. And we normally source them from MLS. About half of our deals come from element us order of the deals come from pocket deals from the realtor. And then that our quarter comes from wholesale.
[00:05:33] BILLY: So you're finding properties on the MLS that are going to be cash flowing at a decent price, especially in this market now. I mean, that's pretty, pretty impressive.
[00:05:45] ERIC: Yeah. Yeah, Yeah Most of our deals actually come from MLS.
[00:05:49] BILLY: And so, all right. So you're going out, what song about how you decided on the four markets, dream and what did that look like? How did you go about determining like, okay, these are the four markets we narrowed it down to. You said you whiteboarded it. Yeah, you [00:06:00] actually measure, look at what key indicators you look at.
[00:06:03] ERIC: So there our key element was a landlord friendly. So that basically knocked out like almost half of the states right there. Right. So, because we knew what it was like in California, we knew what it was like in other markets. And now in California, they have like you know you know, statewide rent control, basically. So we knew we didn't want to be in that, in that state. So that was our first criteria. Then after that, you kind of have to figure out kind of like the 1% rule, but kind of like at a high level at, at an economic level so you would look at the median house value, you would look at the median, uh, rent, and then you would look at the house affordability index too. We calculate it for us, like live, we have the formulas, we doing it there, and these are the key things, but then we also don't want to, um, we don't want to have a hotter market right than, and a hog market typically would have like, very high High growth, business growth. They would have [00:07:00] also like a lot of population growth as well. So we kind of stay away from those cities and we stick to the ones that have about like 1% population growth, about two or 3% of business growth. And then, um, kind of like GDP growth for the city. There are DMSA and that's kind of give us a good indication that, okay, well this is drawing, but it's drawing at a sustainable rate. And that means that there's no, it's not an exuberant market where everybody's going crazy, trying to find an apartment like in San Francisco or the bay area, or, um, you know, others like in Arizona, for example, where everybody's scrambling to find a place to live because the population is growing so rapidly, they can't build enough to supply the demand for the housing. So that's, uh, that's how we determined these marks.
[00:07:47] BILLY: That's incredible. And what are the four markets you said in Memphis? And what are the other three?
[00:07:51] ERIC: Memphis, Memphis, Cleveland St. Louis and Detroit. And the first house that we bought actually, was it wasn't Memphis. [00:08:00]
[00:08:00] BILLY: You said Detroit?
[00:08:03] ERIC: Yeah, it's on the outskirt of, uh, of Detroit. So it's not exactly like it's not the core. Detroit is kind of like on a little bit on the suburb area of Detroit. It's a very up and coming area, very clean, uh, very, uh, low rate for new schools and all of that. Yeah. So when you go there, it was very nice. You feel very safe Let me just say.
[00:08:26] BILLY: Give, give the listeners an idea in Detroit, what would be the average purchase price of a property in that area? And this is turnkey absence. Been renovated, completed the whole nine yards.
[00:08:37] ERIC: After it's been renovated, you could get a turnkey rental for about a hundred, to a hundred twenty five thousand dollars. And that
[00:08:45] BILLY: about a thousand to twelve fifty?
[00:08:48] ERIC: Yeah, exactly. Yeah. And then you would cash to about $300 a month on that property. So after you've paid the property management to everything, all your expenses and your principal and interest for the mortgage
[00:08:59] BILLY: [00:09:00] and in these areas, um, Eric, I'm assuming you don't have your own management team there. You're outsourcing the management of the property management?
[00:09:08] ERIC: That's correct. Yeah. We feel that a is better. If we had our own property management company, we feel that it would be some kind of conflict of interests because, um, you know, like we could like kind of like not do as good a job let's say on the, on the renovation, because we know we would get paid in the back end from, uh, from the customer. Right. So we shelved, like when we were looking at other turnkey providers and how they did business, we didn't like that fact that a lot of them were. The property management at the backend as well. So that's why all these property management companies are third-party property management company and they actually do their own quality check before we put them up for it.
[00:09:48] BILLY: So what about in these areas? You pick these properties up, you said 50% of the MLS 25% pocket, and you have 25% wholesale do you have your own construction teams in these [00:10:00] area? Or do you have project managers that are on your team exclusively? What does that look like? on the re up side?
[00:10:07] ERIC: Yeah. So we have project managers on the onsite and then we have contractors. So all the contractors are, um, they're independent contractors that are working on these projects. Uh, for example, in Cleveland, we have about 15, uh, construction crews. Uh, and then we have a bunch of project managers that are on top of that. And then we have kind of like the realtor. That's also keeping an eye on this whole thing being kind of like, uh, the oldest CEO of the market, you know, so, and we were doing that for, uh, in Memphis a little bit similar as well, but I also have my son that's, uh, in Memphis as well. That's handling the construction projects there. And, um, but again, independent contractors that are doing the projects for us and renovating them
[00:10:49] BILLY: and your pM's that they work exclusively for you or they are, they outsourced as well. They work it for other people.
[00:10:55] Well, technically
[00:10:56] ERIC: they can work for other people, so they're outsourced, [00:11:00] but we keep them busy. We do 150 houses sell 150 houses a year. So that's, that brings us to about 10 to 15 houses a month that we are going, that are going through. Currently we have about a hundred projects that are in different stages of development. So we keep them busy is my point. And then a technic, technically they can go in and work. They're independent. They can work for other people, but, uh, yeah, there's no point in us doing that and we keep them busy.
[00:11:28] BILLY: How are you going about managing the projects? What system or process are you utilizing on the construction side? Because you're in four geographic areas. You have multiple hundred units at one phase or another that are in the process of getting. How do you manage that? What's the software was the tools that utilize to do that.
[00:11:47] ERIC: Yeah. So the, uh, project manager on site and the, uh, the property management company also is often involved in that. They have their own tool to manage that, and they're basically giving us a status report on a weekly [00:12:00] basis, or sometimes on a daily basis about the progress of each of the project. Uh, they send us pictures and videos of the property to progress, and then we can monitor ourselves what happens.
[00:12:15] BILLY: Your standard procedure is like a Dropbox or a Google drive. That your PM will upload So they have their own construction software, some form of it. Each one has their own different process, but you've standardized it to where. So what is it going into Google drive Dropbox? How do you get reported to?
[00:12:31] ERIC: Well, some of them did do it. They do Dropbox. And then we look at the Dropbox. Other people are using a software called company cam so that's what they're using in Memphis for that contractor. So, yeah. So then we, if we need the pictures, then we would put them in our Google drive, but yeah, typically it just stays on, on their system. And then we can, we can look at that. And there's also inspection, like property inspection that happened when, especially when we're selling the property to the vendor, there's additional inspections that are going on. And the property management company is also doing a [00:13:00] quality check on the properties. So we have a few different,
[00:13:04] BILLY: are they doing that as they're actually doing the renovation or after the fact when it's probably safer?
[00:13:08] ERIC: After the fact once, when no, AF after the fact when the renovation is complete and before we, uh, we actually rented out. Right. So that's another pair of eyes really that are there looking at the property, making sure that it's good and ready to go for a tenent
[00:13:23] BILLY: so, so Eric, I mean you're west coast originally from Canada, you're doing four geographic areas. I'm assuming this company's basically virtual. Is that an accurate statement? So all your inventory is coming to you. Computer-wise online. What's the structure inside your office. Who's doing the analysis. And what does that look like? How you analyze your deals. This is a deal we want to take down.
[00:13:46] ERIC: Yeah. So, uh, we have like two people that are responsible for the acquisition. So they basically have, you know, they, they have the model, they have our buy box, they know exactly what it is and then they go and do they do their research. And [00:14:00] eventually they also look at taxes where the taxes is going to be. They look at. With the market trends should be wed. The after repair value should be. And then they determined kind of like, what is the price that we can sell it at? And does it make sense for our customers because we're, we're trying to get them a good return on their investment as well. So we feel that we can sell it at this price and then this is the rent. And then this is, you know, we do all the calculation for them to kind of hit the about like 10 to 12 or sometimes 15% cash on cash return. So that's our goal, you know, we really analyze the exit and then we kind of backtrack it to, what should we buy to deep property at should we buy to property at all? And then when's the decide that it's time to move forward. You put the house under contract, and then it goes to our process and system. Eventually it hits our CRM. We have a customer relationship management software, and then, then we keep track of the whole flow after that from completion of the acquisition, the construction and [00:15:00] the sale at sales process associated with that and the closing.
[00:15:03] BILLY: This is interesting. How many looks, how many leads do you guys have to look at in order to take down 150 properties a year?
[00:15:13] ERIC: So we have a lot of repeat business. So a lot of our people are the customers that we sold to. They want to build a portfolio of rental properties.
[00:15:21] BILLY: Yeah but I'm talking about the front end so how many leads you have to look at to convert
[00:15:25] ERIC: to convert our conversion rate from the lead intake to this it, to the actual customer, somebody buying is about is 2.3%. Right?
[00:15:34] BILLY: You got it down Perfect.
[00:15:35] ERIC: Yeah. Yeah.
[00:15:36] BILLY: So out of how many Units. You're looking at your you're closing 2.3
[00:15:41] ERIC: yeah. Yeah.
[00:15:42] BILLY: What's your average profit and your margin on each deal that you look to achieve? as a company
[00:15:47] So it's,
[00:15:48] ERIC: it's a, the, the gross profit margin is about 15%. And then, uh, then we ended up, you know, uh, around the five to 5% on the net profit margin when [00:16:00] everything is, uh, is, uh, is done. So it's pretty yeah, it's a pretty slim margin. The 15% gross profit margin. Is pretty standard. The net profit margin is, is also pretty standard. It's a pretty slim business. You know, our profit is not that that set a big number, but, and we have to do a lot, a lot of those to uh, to make it. So it's very, it's highly transactional.
[00:16:23] BILLY: It's a very big, big time transaction. Is this, do you and your family have your own rental portfolio?
[00:16:28] ERIC: Uh, yes, we do. Yeah. Yeah. So we have a, we actually have apartment buildings, but, um, we are really on the single family side. We kind of, this is, we don't keep any, any single family right now. We started that. That's how we started in this business. We started by, we had no intention of doing a turnkey becoming a turnkey provider. We were just building our portfolio. We bought our first house in Memphis and then our friends and family decided the, they were wondering what we were doing. And it was just like, okay, well this you investing in where, where Memphis, why Memphis? [00:17:00] And then you end up having the All these conversation and said, well, I want, I want to invest in Memphis. I want to do this and I want to invest with you guys, I want to have a rental and that's kind of how we got started and the
[00:17:11] BILLY: That's always the way in right? realistate is the sexiest business out there. Everybody wants to get involved and get the returns.
[00:17:17] ERIC: Yeah, exactly. But yeah, when we tell them what, uh, what kind of returns we're getting and some of them invest in California or were investing in California. well your returns are way better than mine and you know, so, yeah.
[00:17:29] BILLY: So out of curiosity, do you, cause I know your primary business is the turnkey piece, but do you have a section of your, of your business. That's acquiring multi-family?
[00:17:39] ERIC: Uh, yes. That's. Yeah, that's right. But, and then actually some of these, uh, some of these apartment buildings, we had like five apartment buildings in Memphis, Midtown, Memphis, and actually we've sold three of them. Cause we finished our construction and we kind of like bring, brought them up to market, uh, in about like 18 months to two years, each so great returns [00:18:00] on those things. And then the fourth one is going to be, we're actually closing on Friday on our fourth one. And then the fifth one we're going to. Finalize the construction in the next year or so. And then we're probably going to, I'm not sure what we're going to do with that when this one is in a prime location, so we might sell it though. We might, uh, refinance it. I'm not sure exactly, but in the end, I mean, we always look at the numbers. We always look at the returns and then, so we have a pretty unique situation is that we're looking at the returns on our business, our cash on cash return for the turnkey business. And then we're saying about know these returns. Are better if they're better than what we were getting on the apartment building, if we were just to let it cashflow. So that's where we sold some of these apartment buildings, because we can get a much better return for our money on the turnkey side. And it helps grow the business right yea.
[00:18:51] BILLY: Absolutely. Oh, just out of curiosity, on the apartment side, are you syndicating or you is it all family money?
[00:18:58] ERIC: Two of the buildings were just family, [00:19:00] family money. And this is actually how I became financially free. I sold my primary residence and invested in, uh, got the equity and bought the apartment buildings and invested in Martel turnkey. And then that's kind of how I was able to say get off the W2 jobs and then just spend my a hundred percent of my time on the real estate side. So the other ones we have, I wouldn't call it a, it's a, it's a, somewhat of a syndication. We call it more like a joint venture. We have a joint venture agreement with these individuals and it's just like two or three other investors that are in these buildings. So we just signed a joint venture agreement and the property is owned by a manager, managed LLC. And that's kind of how, how we're doing it. These are people that. A good relationship with them. They were investing with us on the turnkey side and then they had extra money. And uh, I said, Hey, do you want to join us on this one? And then we moved them to the, uh, the apartment,
[00:19:57] BILLY: put the frigging money to work, man, put the [00:20:00] money to work
[00:20:00] ERIC: exactly. Yeah. You're preaching to the choir here because to me that's the same thing. I mean, when I look at people, look at their bank accounts and they see a big number, a big number, and then they think, oh, this is good. I feel good about it. That big number. And for me, like, it's just like, why is that money sitting there? And this needs to go to work. I have, we have a safety, like kind of like a safe zone where we try not to go below, but yeah, I mean, every penny is going out and, uh, we make sure that it's being invested. Otherwise it doesn't work out. Yeah. And that, yeah, the trick to that is that you really have to have a very good handle on your cash flow. So we actually developed a tool, a pretty unique tool. That's looking at all our pipeline. It's looking at all our outsoles, like the rehab bid and stuff like that. How much we've paid out on the rehab bid and where things stand in terms of development and we're predicting, or we're projecting kind of like the cashflow for the next two [00:21:00] months. And then we know kind of like, where are we going to be? You know, what do we need to do? Do we need to push some closing? Do we need to, uh, closing in terms of acquisition? How do we need to handle if we have a cashflow issue? So that, that is absolutely critical for us to make sure we always afloat. We never have any cashflow problems, any casual problems.
[00:21:22] BILLY: Is your background or what's your background? Are you a accountant, CFO?
[00:21:27] I'm a, I
[00:21:27] ERIC: used to be an actuary. That's what I used to be. So that was the, the math of financial risk. And I worked as an actuary for probably six years, I think, six, seven years, uh, back in, in Canada. And then every, every day or every week, I would just kind of close down corporate pension plans. And convert them into like 401ks, basically savings account. And it was not pleasant and yeah, cause that's really like that's shifting their risk of a lot of people that the risk of retirement that's shifting it from the [00:22:00] employer. The employer was guaranteeing them a certain amount of retirement income. And now it's falls right on the shoulders of the employees who doesn't know how to invest, doesn't know how much they need to save. They don't, you know, that's not, and they're working full-time and then they expected to figure out how this, uh, 401k money is going to be converted into a stream of income at retirement it's unrealistic. And this is why I wrote the book basically to help people achieve financial freedom.
[00:22:27] BILLY: And what is the name of that book?
[00:22:29] ERIC: Stop trading your time for money?
[00:22:31] BILLY: Well said exactly and where can you buy iy? Amazon?
[00:22:34] ERIC: Amazon. Yeah.
[00:22:36] BILLY: I love it. Good stuff with that. Yeah. Good stuff. You know, you mentioned about the cashflow piece. We brought in a CFO fractional CFO about a year ago, and it's transformed the way we do our business because I can, I'm looking back over the last eight years on the investing side. And we had a handle on our books. We, you know, we knew the profitability. We knew what the balance sheet was like, put the [00:23:00] forecasting pieces, what we were missing and will you have somebody come in that can really start forecasting cash flows and where you're going to be. And six months, a year, a year and a half out based on what the pipeline is and based on what your conversion rate is, it can and will transform your business because then, you know, Eight months from now, we should be sitting on an excess of seven figures, million million to what can we do with that money? How can we deploy it? What assets can we put it into? So you might be cash poor in the bank, but you're going to be having assets where you get the right down. Then you have the cash flow coming in. So extremely important. When you start building your business to understand where you guys positions in the beginning, a lot of entrepreneurs don't look at it. They look at it only look at their bank statements. They don't even look at a P and L. You know
[00:23:44] ERIC: it's scary. Yeah. That's very scary. I mean, the PNL is important. I mean, we actually do like a project by project profitability analysis and we're looking at that on a quarterly basis. And then, so, and we compare what we expected versus what we actually did, and then we kind [00:24:00] of figure it out that way. So that's good. We also look at the overall profitability once we take into account, like the op operating expenses and all of that, but yeah, you're absolutely right. I mean, the cashflow understanding that. You know, you have maybe you're cash poor right now, but I know that I have, you know, especially when you do 150 transactions a year,
[00:24:20] BILLY: You have a lot of money to by it off in deals..
[00:24:21] ERIC: Yeah, exactly. And then you don't, if you have like 10 or 20 the right now, I know that I have like about like 15 deals that are going to close early in December. So my cashflow it looks like. And then, yeah. So, you know, then I know that, okay, I can still acquire, because I know that this money is going to come in in December. Like, so knowing that kind of tells you, uh, can I push on the accelerator or you got to put up, I have to push on the brake. So this is absolutely critical. And that's, that's what moves your company. And you can be, uh, if you know that information. Then that really helps you kind of make decisions and kind of like, again, [00:25:00] pushing on the gas, improving your profitability or stopping, and, and then making sure that you have the money into pay contractors. for some projects,
[00:25:09] BILLY: knowing that information is power in and of itself. And if you utilize it the right way, you could get yourself out of a jam because you could be overspending or over-investing and not realize holy. I'm going to have a cashflow crunch in four months. If I keep doing what I'm doing. So just the information is extremely valuable. I can't tell you enough. The small business. You don't have to go out and hire a full-time CFO. We have a fractional CFO, and we pay him very well, but he is worth his weight in gold. We meet every two weeks for a couple of hours. And then once a month we have a, a larger meeting. Once a quarter. We have the planning session. Twice a year, we're going over things. So it's like, I don't know how we, I actually did it for the seven or eight years prior to, I mean, we, we were very good. We were very profitable, but the forecasting piece is the most important piece that a company needs. And without that, like, you're kind of [00:26:00] flying semi blind. You always looking driving forward, but you're looking in the rear view mirror. Like you're looking at what you did, but not what you're going to do. What's coming up next.
[00:26:08] ERIC: Yeah. Yeah, exactly. And then you're looking at it and then you either take it very, very safe. And then you have too much money in the bank that just, you look at your bank account and it's like, I have a lot of money. What do I do? Or you end up in a situation where, you know, you get bills from contractors and then say, well, okay, well, hold on. I'm not, I can't pay. Right. And they say, well, where's the money gone? I've been making all this profit. Where's the money gone? Well, the money's tied up into projects now. And, um, so. No, you can't pay your contractor. You cant sell.
[00:26:40] And
[00:26:40] BILLY: if you can't pay your overhead, your operating expenses, you're out of business.
[00:26:43] ERIC: That's right. Yeah.
[00:26:45] BILLY: Low Key. Tell us, let's talk about now we went over acquisitions. We went over your process of how you're doing is virtually on the, on the rehab side. Let's talk about an important aspect, which is your buyers, right? Because these are not one offs. These are people who are creating wealth with you [00:27:00] and they're buying properties consistently over time. Let's first break down. How do you go out and find these individuals to bring them into your network? And what does the education look like that you have to give them to get them to believe. In the Martel method, if you will. Yeah.
[00:27:15] ERIC: Yeah. So, I mean, we're, we're out there. My, my son and I, and, um, you know, we're out there and having YouTube podcasts, we, uh, I wrote a book that my son Antoine also wrote a book and we're out there. Talking to People educating. I actually came back from, uh, Antoine and I my son, uh, came back from the, uh, the real estate domination conference in Vegas. And then, so we, we go on there. We, we present, we, uh, we go to meet ups and educate people, but that's my goal. That's why when I wrote the book, I just wanted to, I wanted to give almost all the information that I can to make people successful so that they can do the transaction on their own using the book. Some people need a mentor and all of that. And I said, well, you know, can find [00:28:00] somebody that, you know, that can mentor. You can mentor you in all of that. And I think that's one of the, uh, one of the key tool, as well as that people need to realize that what they can, what they can do, what kind of resources do they have that's available. And that's what I talk a lot about, about that. Then I say, well, people, everybody wants to do something super sexy. I wanna do Uh, this great office tower in downtown Detroit or whatever, but, okay, well, you don't have the resources for that. You don't have the money for that. You don't have the time to do this. You're working full time. So let's be realistic here. Where, where do you want to go? What are the right, the strategy that really fit your, your time and resource criteria? So that's what we talk a lot about that because we, we want to help people. People are just kind of like going around all over the place, uh, looking for one shiny object after another, instead of focusing on one particular strategy that will work for them guarantee. And, um, it's going to take a little bit of time and [00:29:00] that strategy. Single-family rental. Uh, and that that's the, that's the ideal way. And that's what we're kind of pushing or promoting. We don't care if they buy from us. We just think that it's important that the people start investing in uh in-depth.
[00:29:15] BILLY: Yeah. You know, it's, it's a shame because the buy and hold part of this business is by far the most important way to create wealth, but people are drawn to the quick buck, the fix and flip. Let me get those chunks of cash in and they don't realize that the wealth has really built. The cashflow is really built on the back end when you start buying it whole but it's not sexy, right? Nobody wants to talk about Buying a single family house to make the trade. Nobody, everybody wants to talk about, let's fix a property, flip it over. And I just made 80 grand. And what good is waiting? And like, you know, like you, I like to educate the younger and the middle aged people that want to invest and look fixing and flipping and wholesaling is an end to the means to. It's meant to take the cash. It's not [00:30:00] meant to build your business and only do that. It's meant to take the cashflow from that that's chunks of cash and put it in investments. Like you're saying single-family cashflow score, apartment buildings or something that you're going to put their money to work. So they no longer have to. And just, you know, I see a lot of guys get caught up in this rat race and it's great to speak about how much money you're making, but what do you actually have for your future? Where's the wealth. What's your net worth? Right.
[00:30:24] ERIC: Absolutely. So I couldn't agree more. And I think that, uh, Listen what's really important is that people need to figure out the time is the real, uh, asset or their real wealth. This is what you want to get. You want to get more and more of that. And if you're working on the W2 job, I mean, you're basically selling your time away to somebody else. You want to get in a position where you can get into and buy your time back so that you can really do. If you're really interested in doing some kind of a very special type of investment that takes a lot of effort, then get your passive income in gear and then after that, once [00:31:00] you have your passive income is paying for your living expenses, then quit your job and then spend your time doing this other strategy. But until then focus on a strategy. That's very, very passive. And, um, the other thing too, that I see is a lot of people are, yeah, like you mentioned, right? Somebody is looking at say, oh, I made $80,000 profit. And then I talked to them and I say, well, you know, you can buy this rental property and you can make $250 a month in cashflow and then they're looking at me like what? That's not worth it. That's $250 a month. Like I'd make more than that in a, I mean, more than, than the day, for sure. I make that then in a morning. So why the hell would I spend my time doing that?
[00:31:41] BILLY: The question is why, why should they spend the time doing that
[00:31:44] ERIC: exactly? Yeah. People don't look at relative they don't they also don't forget the relative. Everything is relative. So $80,000, if you had to invest $2 million or $800,000 to get that, I mean, this is a specific return. That's 10% [00:32:00] return, but if you go into. $20,000 down. And then you end up getting $250 a month or $300 a month. Then you end up into the 12 or 15% return, right. Or if you had to go, you have to look at the return of your cash on cash return on these things, and then to maximize that. And in fact, $80,000. On $800,000 in California. You're not going to see that the typical return here is more around like 3% and people are good with that because they look at the numbers is, oh, I made a hundred thousand dollars or $200,000 profit, but how much effort, how much risk did you take in order to do that? And you put a lot on money at risk you have to get a hard money lender and all of that. And if your project is delayed, By two months or three months then that's it where you were into green at 3%. And now two months later now you're in the red at 5%.
[00:32:51] BILLY: I couldn't imagine doing deals like that. I mean, the 250 thousand dollars seems great. But when you're talking 2 3% margin, no way. [00:33:00] That's crazy. Yeah.
[00:33:02] ERIC: And yeah, that's why we moved out. That's why we moved out of here because it didn't make sense. Like, uh, yeah, we can make enough return and it was just like might as well just stay in a, put it somewhere else that happened less, less risk and a little bit.
[00:33:16] BILLY: So the, the, uh, getting back to the end buyers. Right. So how many units on average, do you, I'm sure you calculate calculated. Does your average buyer have that they purchase from you over the lifetime that they've been with you? I don't know if you know, what does that look like?
[00:33:31] ERIC: Yeah. It's about three. it's 2.7, 2.7 houses. So that's kind of where we are. So 3, 3, 3 houses per person, but then it's very interesting. I mean, it takes a while for people to nominate. Like $30,000, 25 to $30,000 to, for the down payment and closing costs for them to buy the house. So it's, sometimes it takes a for some people, it takes a little bit longer. Come up with that cash to buy, buy the property. Other people, [00:34:00] you know, they can do a little bit faster obviously, but yeah. That's um, so it's nice when you see somebody that has bought a house and now they're buying a second one. And so they're kind of on, on track and it's very nice when you're talking to someone that is in. They're 25. They there's one guy in particular that I talked to him about real estate than you as actually in the construction business. And he was just like, okay, so how many houses do I need? Like Paul? I said, what's, what's your, what's your expense? Like how much do you spend? How much do you need to live on, uh, per year and said, well, I need like, you know, $5,000, let's say, or $3,000. I said, okay, well, so this, if you have like a house that's making $250 a month in net cashflow, while you need 20 houses. So that means, like I said, that's it only 20 houses and then I'm financially free. This is unbelievable. So now he's like very motivated to get there.
[00:34:55] BILLY: Yeah. You're, you're tapping into their brain. You're opening them up because they just don't teach this stuff in [00:35:00] school. And it's a shame. Like the school systems don't teach financial freedom, financial wealth. They don't teach anything about how to better yourself financially. And like this stuff is not rocket science, but to many it is. And, you know, with your book and with your teachings and going out there and just opening people's minds, you're changing their frigging lives. Like you're putting them on a completely different path. Good. Good for you and your son for doing it. It's good stuff.
[00:35:24] ERIC: Thank you, Yeah, well, I figured I'd destroyed enough. Corporate pension planners. The least I could do is help. That's my fault. It was just a job. You know, my job. You do what your boss say.
[00:35:40] BILLY: Yeah, that's great. Listen, Eric, first of all, let's talk about the they can find your book, the name of the book. Again, want to give it a plug and it's on Amazon. What is it stop
[00:35:48] ERIC: Yea sto[ trading your time for money go get the
[00:35:51] BILLY: book, guys. I'm going to put a link in the show notes to that as well. And then if they want to find out about investing with you and your company on buying some good turnkeys, how do they [00:36:00] go about finding you guys?
[00:36:01] ERIC: So maybe the best way is to start a conversation with me on Instagram E underscore Martell. And you can also find me on Facebook, uh, Eric dot Martel dot CA so that's a good way to do that. My company website is Martel turnkey.com. So
[00:36:16] BILLY: perfect.
[00:36:16] ERIC: All these places
[00:36:18] BILLY: all over the place. Well, listen, man, you have. Very good interviewing on the show. You're a Canuck now living in California, I love it man you've been
[00:36:28] ERIC: no more snow, no more snow
[00:36:30] BILLY: No you are done with the snow. now you just have high taxes that's it.
[00:36:33] ERIC: Yeah, that's right. So that's the next problem?
[00:36:36] BILLY: California is crazy with the tax basis, man.
[00:36:38] ERIC: Yeah. I mean, we're, we're looking at that, but I'm, I'm pretty good because I have other businesses too, that I'm doing and I can actually, like, I have a trucking business, for example. So I'm on the road trucking. So I use that. So when I buy trucks, then I can do like bonus depreciation on that. So that helps. I also launched an endowment fund this year. So that's also another way [00:37:00] where we are, um, saving money. Um, so yeah, it's a few different things like that, that, uh, that we're doing. Minimize our tax tax footprint.
[00:37:10] BILLY: And the biggest one is real estate.
[00:37:12] ERIC: Yeah, that's fantastic. Yeah. Yeah. All the apartment buildings. Yeah. We always did like a cost segregation and then bonus depreciation on those. So
[00:37:20] BILLY: yeah, you get massive write downs with that.. Eric it's been wonderful. Thank you so much for joining me today, sir. I appreciate your time.
[00:37:27] ERIC: Thank you, Billy.
[00:37:28] BILLY: Thank you.
[00:37:30] Thank you so much for listening to today's episode of unstoppable real estate investing wealth. My mission is to give you my listeners, the blueprint for success inside the secrets for starting growing and scaling. Real estate investing business, So you could experience and live unstoppable lifestyle. I've made it simple for you to catapult yourself to success. Go to Billys secrets dot [00:38:00] com@thebillyssecrets.com. There you will find every single tool. Trick strategy system. And you used to make millions of dollars as real estate. Everything my team uses and my guest views all in one place for you to tap into, you could start, grow and scale the real estate investment business. I really hope you implement what you're learning. I hope you utilize these tools, tips, tricks, strategies, and secrets, and I hope to see you on the next episode god bless. Bye-bye.