Change your Life with Rental Property and Real Estate Investing with Dustin Heiner
"I think the first place to get before you can automate before you can even do anything is to make the decision in your brain that you are more valuable than your job. I want everybody to realize that the value is in you, not in your job. And so if I could do it, you can do it."
Dustin Heiner is from the great state of Arizona. He also spent some time in Fresno. He is the host of Master Passive Income, a blog, and podcast about investing in real estate and rental properties. It's his desire to help you heal and help you succeed in investing in real estate rental properties. Master Passive Income is committed to helping you on your business journey by sharing insights into how to be successful real estate investing in rental properties.
Dustin Heiner's desire is to give away as much free information as possible through his blog to help as many people as possible. He wants to help people quit their jobs and replace their income with passive income from rental properties.
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Change your Life with Rental Property and Real Estate Investing with Dustin Heiner
Brett:
Our next guest is out of the great state of Arizona. He also spent some time in Fresno. I'm in Sacramento, for those who are wondering as well. He is the host of Master Passive Income Podcast, a blog, and podcast about investing in real estate and rental properties. It's his desire to help you heal and help you succeed in investing in real estate rental properties. Master Passive Income is committed to helping you on your business journey by sharing insights into how to be successful real estate investing in rental properties, and so much more. Please welcome to the show with me, Dustin Heiner. How are you doing, sir?
Dustin:
I am doing excellent, Brett, thanks for having me on the show. I really appreciate it.
Brett:
Absolutely. A pleasure to have you. For our listeners to get to know you for the first time, would you give us a little bit more about your story and your current focus?
Dustin:
My whole idea of life was working a job because I was told that when I go to school, I get a job. And then I retire you know, 40, 50 years later and eventually just retire and move on from working. And I thought you know what, I'd rather retire sooner. So what I decided to do was start investing in real estate rental properties and buy one property after another. And now, at 37 years old, I was able to quit my job. And now I have 30 plus properties. Now I literally don't need to work and a lot of people might have heard the book, The 4-Hour Workweek, well, I don't mind that. But I don't like working that much. I only work 30 minutes a month. And that's literally you heard me right 30 minutes a month. And that's just getting my statements, reviewing them, making sure that everything's looking good. And then put it away because I have my business run itself. And now all I do is buy more properties so that I can have more properties to eventually pass down my kids. We live on that passive income. And so that's what we do now invest in single-family homes, it's like fourplex, triplex, duplex, and a single-family home. So any one of those once you get into five units that's multifamily apartment complexes and stuff like that. But yeah, multifamily is great. But we love, I love here at Master Passive Income, single-family homes that really just get us passive income and cash flow every single month.
Brett:
Beautiful, I love that you focus on a niche. And we'll get into those secrets here about how to automate and build six-figure real estate investments with four units and below. But before they go, Dustin, I want to dive in a little more to your story. You know, I believe that we are all given certain gifts in this life. And these gifts are given to us to be a blessing and help to others. So it's a picture, you may have your high school days, your university days when you're a younger lad before your 37 and retired self which is amazing. By the way, congratulations. And I want you to think about maybe there are one or two strengths, and we will call them superpowers again, I think their blessings and gifts to us to be a gift and a blessing to others. So what are those one or two that you believe you've been given and how does that help you help and bless people today?
Dustin:
I think one of them would be that I'm very driven, not necessarily driven towards money or anything like that. When I see something that needs to get done, I move forward. And I guess I get focused on doing that. And so with that, that helped me to build my business to get out of work in the job with some for somebody else. The other one that I really love to do is I really just love to serve other people. And I found the more people that I serve, the better my life gets, and I feel better I make more money, other people make more money, other people's lives get better just because I serve more. And so what I try to do now is you know, combine both of those where I say, you know what, I'm really driven to just do things to be active and really enjoying life. And with that, on top of that adding inserting others, it's just been much better. As I've realized instead of working for somebody else, working a job and just making either my boss rich or working for some organization. Instead, if I was on my own, I can help more people in the way that I want to help them so those two things really couple together have I guess helped me to be better at helping people and making other people's lives better.
Brett:
It's awesome. Love it. Driven, focus on getting things done, and love to serve others. That's a great gift to have. Moving into the subject at hand automating your six-figure real estate investment business. What's the first secret, Dustin, to getting your business to automate to a six-figure real estate investing business?
Dustin:
So that's a great, great question. I'm thinking about it, I'm going to take one giant step back. So automating is one, we absolutely want to automate. But let me give you a story about how I got to the point where I was able to know that I can do it because I can teach anybody how to invest in real estate, I literally can, but getting somebody over that hurdle to say, Dustin can do it, Brett can do it. Like, I can do it. So I want to share a story. Now, this story dates back a number of years ago, and I have four kids. So if you're watching this, you can see my four kids in the picture behind me. So I have four kids, but on the birth of my fourth child, I was working for the county government over in Fresno, California, it was a good job. And I was working just like everybody else was, and I'm working for the county government put in 40 plus hours a week. And so I went on paternity leave after my fourth child was born. So she was born with paternal leave. That's where the dad stays home bonds with the baby helps the mommy out change diapers and stuff. So I did all that. And then I come back to work. And I'm back to work for about a week. And I get a call a phone call at 3:30 in the afternoon on a Friday. So I answered the phone and at my work, I get a call from my boss's secretary. So the top person in the department said, Dustin, would you please come to the boss's office? And I said, I'll go ahead and do that. So I hang up the phone and I sit there and I pause for a second because thinking why are they calling me to the office? So I sit, as I'm sitting there, I'm realizing that there was something that before I got one opportunity to leave, there were some rumors or some rumblings that there were potentially layoffs coming like the department was running out of money. So as I'm sitting down, but no, that's not me, I have so much in your body. My bosses love and I do get raises all the time, so I immediately dismiss them. So I get up out of my chair, and I start walking down the hallway to my boss's office. Now it's not that long of a hallway. But as I walk, it gets longer or It feels like it gets longer and longer. And my feet start feeling like their lead bricks like walking down the hallway with lead bricks on my feet because it starts to dawn on me. This could potentially be the time that I get laid off. And I just had my fourth child. We have four kids, how am I going to provide for my family. So as I'm walking down, it gets heavier and heavier. But I turned the quarter to my boss's office, his doors closed and I see the secretary, a really nice, really sweet lady. And she says Dustin, would you please have a seat? And sheepishly, she grins at me because she's trying to console me with her eyes because she knows everything that's going on. I have zero clues of what's going on. So I turn and I sit down in the chair waiting for my boss's door to open. And from there. I'm sitting there and thinking, what have I done my entire life to this point to where now I'm might be getting laid off. So my hands start to get all clammy. I started sweating, thinking, am I a failure as a father? Am I a failure as a husband? Like all these years, 10-15 years working in this county department? Is it all gonna be taken away? Well, the door opens to my boss's office, and out walks a lady with a piece of paper in her hand. She's noticeably distraught, she's noticeably upset, her world's been rocked. She's not necessarily crying, but you can tell there is something going on. And she leaves and the boss ushers me into his office.
Lo and behold, I actually get laid off and remind you, this is the government, nobody gets fired or laid off from the government. But I did. So it can happen to many people. And as I'm walking back to my office, I realized two things. Now I just got laid off, I need to do two things. Number one I need to provide for my family. That's the number one thing to do. So I need to get a job right away to get money to put food on the table. And so I went to work on that. The second thing I realized, as I'm sitting at my desk, is I need to do whatever I needed to do to make sure this never happens to me again, or nobody has that amount of power over me. And so at that point, then in there, I realized and this is what I want to do rounding up everything that you're asked, but I think the first place to get before you can automate before you can even do anything is to make the decision in your brain that you are more valuable than your job. Because what I used to do is I used to say, you know what, somebody asked me the question, hey, Dustin, what do you do? And that's basically like, what value do you put on yourself? And normally, I would say, well, I work for the county government, I do work for the county government. And no longer did I ever say I made my decision right then and there. My value is in myself. It's in my God, it's in my family. And so what I decided to do was from that point forward, I'm telling everybody, I'm an investor, I invest in real estate, even though 100% of my money comes from my job. That's my part-time. That's my side job. My number one business is that I'm an investment. So everybody listening to this, this is something you need to realize is that your value is so much more than anybody can ever pay you. In fact, your boss is only paying you just enough to keep you working and not quitting, but not so much as taking money out of their pocket. Now I'm going to round out the story to fast forward to the very end, about six, seven years later, after I made the decision, I bought property rental property after rental property after rental property. And then I had 30 plus properties. And I said, even though I'm making $75,000 working here, I'm losing money. So I made the decision to actually quit now to round everything out the last thing, as I'm walking to my car, remember, I'm working in the county government downtown, so I have to park two blocks away, maybe it might even be a mile away. And so I was walking home like I do every single day to my car takes about 20-minute walk. Well, if you contrast, the walk to my boss's office felt like my feet were lead bricks. This time, I felt like I was walking on clouds because I would quit my job, never needed a job again because I have passive income. My business is automatic now, which we'll get into. And I'll literally walk you through the entire process and how to do it. It's automatic, I make money every single month, whether I work or not, in fact, the less I work, the more I just make money because I don't do any work. Other people do the work for me. So I want everybody to realize that the value is in you, not in your job. And you can do it just like, I'm just a normal guy. And so if I could do it, you can do it.
Brett:
Amazing. I love that count from county job in Fresno, California, to retirement at 37. From big lead feet, very scary, you know fearful stuff, when you have to be right for your family, to walk in on the clouds and being able to help more people do it. Now that's an amazing story, Dustin. So let's dive right into the first secret or first step to automating your six-figure real estate investments.
Dustin:
The biggest secret or biggest step I will tell you is you need to build the business first. Now a lot of people who teach real estate or tell you how to invest in real estate, say what you need to do is find a property, make sure you run the numbers, make sure you're making, I don't know $50 to $100 a month in passive income. And then after you find that property, you find somebody to actually buy the property, you find a realtor, then you buy the property, then you find somebody to fix it up, then you find somebody to manage the property, then you find somebody to rent out the property. In my opinion, that's literally all backward. We don't do that. In fact, if you're gonna do that, it's rather sad. But I love buying properties off of people that do it the wrong way, which is that way, they do it the wrong way because they get set up because they didn't do it right. The number one secret that you must do is build the business first. And let me explain what that actually means. I'll give you an example of what it means. So if you're going to start a convenience store, and everyone knows what a convenience store is, I mean, it's basically fountain machines and candy bars and stuff like that. So if you're going to start a convenience store, you're not going to lease a space, open the doors and put a box of candy bars in there. If you do that, you're going to lose money, you're going to lose your business, it's not going to go well. No, instead, what you're going to do is you're going to get everything inside the business from the gondolas, which are the shelving units at the candy bar is going to countertops, fountain machines, cold storage, bank accounts, cash registers, employees, you're going to set everything up before you buy any inventory, to put it into the business. So you build the entire business, then you put inventory into it, just like that in real estate, you need to do the exact same thing, just like that you built the entire business first, then every piece of property you buy, that property is not your business, your business has inventory, which is your property. So every single 30 plus property I have now, I view those as inventory goes up, inventory goes down, but I build the business first so that it runs on its own. I'll literally walk you through all that how to do it. But you do that first. That's the secret is you build the business first. So everybody that you hire is an expert in that city. I started investing when I was in Fresno, California, invested in Ohio, of all places. And this is 2006 before the crash, so I started investing there. But I had experts, I hire experts in every single city that I invest in all my students, we do that too. We hire the experts in the area so that they are the ones that make sure that we run the business right or they run the business right. So that's the number one key, Brett or the number one secret Brett, is to build the business first by finding property managers, by finding realtor's, contractors, wholesalers inspectors, plumbers, roofers, like anybody in everybody, you find all those for the business, then once you have the entire business setup, that's when you look for inventory. That's when you buy inventory. That's when you put that inventory into your business.
Brett:
Amazing. So that's number one, build the business first, makes perfect sense. So what would be step number two?
Dustin:
Step number two is to as you're building the business, want to make sure that you're making $250 a month in passive income. Now walking through the entire process of building a business. There's a lot to do that but keep that locked in your brain right now. The second thing that you need to do is making sure that you'll be making money as a business. If a business isn't making money, it's not a business. In fact, it's a failing business, it's going to go out of business very quickly, you want to make money. So the second secret that you need to do is make sure that you're making $250 or more every single month from every rental property that you make. And so $250 a month, well, that's $3,000 a year in passive income. Now, remember, this is passive income, this is all of your expenses, you add all your expenses up from your, your tenants, your sorry, your mortgage, your property, taxes, all that sort of stuff, you add all that up, and then you make sure you can rent it for more $250 or more every single month. And this is what I share with all my students. And this is what I do, I make sure I can make $250 a month in passive income. And here's a funny thing, and really interesting is, I personally don't pay my taxes, I don't pay my property management fees, I don't pay my insurance, I don't pay my mortgage, I don't pay any of that stuff, my tenants pay for every bit of that. And all that is accounted for before I buy the property. So I know going into it with a 99% chance of certainty that I'm going to be making $250 or more in passive income. So you add up all your expenses, you add $250 or more whatever you can get for it, whatever the rents are, and that difference is your passive income. Now, some people might say, like I said, in the beginning, some people might teach you, just make sure, again, $50 a month in passive income, or $100 a month in passive income, well, let's just be generous and say they say $100 a month in passive income. Well, that's only $12,100 a year in passive income. I know $12,100 goes a long way, it's really, really good. But imagine, something happened, you didn't account for like the furnace goes out, that's another three $4,000 hit, there goes all your profit that's eaten up. Even if you have a reserve, that's all eaten up. So the reason why we shoot for $250 a month is that we have a buffer, not just the passive income because that's how we put a roof on my I personally put a roof over my head with my kids, I feed my kids and we do everything that we want. Because we have that $250 a month coming in, that's $3,000. Well, if you had 10 properties, that's $20,500 a month in passive income. And what that's again, passive income, you're not doing anything. That is instead of having $20,500 a month, that's $30,000 a year if you add all those months up, if you add 20 properties, that's $60,000 a year and that number, that's the minimum of $250 a month in passive income, I have some properties I'm making me $500 or $600 a month in passive income. So that's the second key. Number one, build the business first, make sure you have experts who are on the ground doing the work for you. The next thing, when you're buying the property, don't settle for $100. People might say, Dustin, right now the market is so crazy, which it is. But we find properties where we even save money when we buy the property not only get passive income every single month but also let me give you a really quick example of how we make money as real estate investors buy and hold real estate investors, we make money in six different ways. Number one, we get the equity capture. We buy it for less than it's worth, we capture all that equity. Number two, we also get passive income, which is just talked about $250 a month or more. Number three, you got appreciation, regular market appreciation value goes up. You also have force appreciation, we get in there as investors we fix it up, we make it look better, it could be better, and it's worth more. Another one I love this is tax advantages. Obviously, we know a lot about tax advantages here on the show. On top of that, this is so awesome. Like I said, my tenants pay for the mortgage, that's interest and principal, they pay for all that. And so imagine if I buy a house for $100,000. You can buy houses sale for $100,000. even less than that. But you only put, let's say $10,000 down $90,000 left, your tenant pays the rest of that $90,000 and every bit of interest. So as you're building your business, making sure you're shooting for $250 a month in passive income, you can scale that up to where you can quit your job and be successfully employed.
Brett:
Absolutely love it. So we want to build your business, you want to make sure you get some margin. Folks, make sure you're buying with at least 250 a month that's after everything - taxes, insurances, and the mortgage payments. Dustin, what's the next step?
Dustin:
So I know, I'm gonna say never because I have sold properties. But once I own a property, it's very hard for me to sell it because I make so much money by literally doing nothing. And on top of that, I can literally pass down my properties to my children. Number one, I could teach them how to do this exactly like I teach all my students. I am teaching them how to do this. But I literally will give these properties to them so that they will have them on top of everything else. So when I'm thinking about the properties that I own, if I'm making $60,000 a year, 80,000 $90,000 a year, $120,000 a year, whatever it might be from these properties. If I sell it then I don't make money and I can't pass it down. Now I might. I might make do it. Like, let's say I'm gonna make $100,000 if I sold One house-made $100,000, I might do that. But at the same time for the longevity of the entire span of the life that I own and my kids on it will probably make more than $100,000. Give or take. It just depends on how now here's what I think the third tip that you need to know. The third thing that you need to do is make sure that you are running everything through your experts on the ground. This is how I automate it. So first one, we build the business, we find all the right experts. And that's tricky to do, but we can do it. The second one, we make sure we're buying the right properties that are making us $250 a month or more every single month. And the third thing that we do is we do not buy a property unless our experts say they have basically checked off or signed off on saying, Dustin, this is a good property. I really think this is a good property, or I don't think this is a good property. The last thing you want to do, remember when I said earlier that I love buying properties off of people who did it wrong, and they bought the wrong property or they didn't know what they were doing. And I buy it for a discount because there's a so tired of like, I'm fed up, take the property I don't want anymore. I'm tired of tenants, I don't want you anymore. Well, I love buying properties for people like that sad to say that it happens. But it does when they don't do it right. But what we do is we make sure that our experts sign off on the property saying, hey, Dustin, this is a good property. Now the sad thing is if you bought a house without knowing your property manager, you bought a house you got to fix up and then you try to find a property manager, and literally every single property manager comes to you and says, I can't manage this property. It's in a bad area. I'm like I'm literally afraid for my life and he just spent 150,000 $200,000 on the house fixing it up. We don't want to do that we want to have our experts tell us because they're the boots on the ground. I don't even care about databases like Zillow or online things. Those are good. Those are really good tools. But I care about the experts on the ground. They're the ones that automate the business and make sure that I don't screw up.
Brett:
Amazing, Dustin. By the way, you can learn more about Dustin Heiner at masterpassiveincome.com. So, Dustin, we are running out of time. So are you ready for the lightning round?
Dustin:
Let's do this.
Brett:
Alright, knowing what you know now if you go back to your 25-year-old self, what is the one Golden Nugget, make sure you tell yourself to do?
Dustin:
I would say, absolutely go after passive income. Now it could be rental properties. It could be other things. I love rental properties. But there are so many other ways to get passive income. Personally, from an online business, starting a podcast, YouTube channel prep, I just love the idea of not working for somebody else so that I could work for myself to get paid for the value that I bring not for the hours that I spend. So it's passive income just go after that.
Brett:
What's the one book you've recommended or give the most in the past year?
Dustin:
I absolutely love the book, Richest Man in Babylon by George S Clason. Very great. It's a fictional story, but it teaches really good principles on finance and purpose investing, and everything really good.
Brett:
What is the biggest frustration with capital gains tax deferral or the 1031 exchange?
Dustin:
It's not long enough. Because I find a lot of my students and myself, we buy or we were selling a property, we have to settle on a property as quickly as possible to put our money into. That's usually the biggest gripe that we have.
Brett:
Yeah, we call it the shotgun wedding. Right? You got to get engaged in 45 days and married 180. Most people don't like that, especially if there's not a lot of inventory and prices are so high. So we do have a solution for that, folks, if you're wondering, it's called Deferred Sales Trust, you can save failed 1031, it works for cryptocurrency, primary homes, businesses, million or more and gain a million or more in net equity. You can learn more about that at capitalgainstaxsolutions.com. Next question, what are you most curious about right now, Dustin?
Dustin:
I’m curious about how I can serve more people. I'm just like, I started my YouTube channel, so I have my podcast where I teach literally, it's just me talking about real estate, how to invest in real estate. And then I was like I can help more people if I go on YouTube. So I started my YouTube channel Master Passive Income on YouTube. And so I have just been putting out lots of just free content literally saying, this is how you invest because like I said, I could teach anybody how to do it, getting them over that hurdle to say that they can do it. That's the bigger thing that they need to get over. So, I just give as much content as way as possible.
Brett:
Amazing. Last question, how do you stay centered in your values and encouraged to reach for new heights?
Dustin:
So I haven't done this before. But I have on my desk, if you're looking, this is the Bible. I read this literally every day. I read it to my kids, literally every day, if you ask me how to get centered, that's literally how I get centered and stay centered as well as my kids. So if I'm doing anything against the Bible, I change, if I do anything that's with the Bible, I just stick with it.
Brett:
Beautiful. Likewise. I have five kids, by the way, our kids should meet someday. And that's about the similar ages as well. That's really cool. That being said, Dustin, for our listeners who want to get in touch with you, will you remind them one last time and how they can find you?
Dustin:
I really appreciate being on the show. So I have my podcast, Master Passive Income Podcast. Just look that up. Same thing, masterpassiveincome.com. Find me there, you can contact me through there. I hope that people can realize that they can do it if I can do it, I'm just your next-door neighbor. If I can do it, you can do it.
Brett:
If Dustin can do it and Brett can do it, you can do it. So go to masterpassiveincome.com. Dustin, I want to thank you for being on the show sharing a bit about your story. So much wisdom, I want to encourage you to keep being driven focus on getting things done, and loving serving others so they can create and preserve more wealth in real estate investing. And also want to thank our listeners for listening to another episode of the Capital Gains Tax Solutions Podcast as always, we believe most high net worth individuals and those who help them may struggle to clarify their capital gains tax defer options not having a clear plan is the enemy and using a proven tax deferral strategy, such as the Deferred Sales Trust the best way for you to sell, defer capital gains tax on the sale of primary homes, businesses, invest in real estate, cryptocurrency Ethereum is going crazy today people, look at that number. Defer tax, create and preserve more wealth in real estate or other investments. Please go to capitalgainstaxsolutions.com to learn more about that it's capitalgainstaxsolutions.com or if you're a business professional, you want to learn how to use this to help your clients. You go to experttaxsecrets.com. Please rate, review, subscribe. We appreciate you. Thank you.
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