E45: The Passive Income Lie Nobody Talks About

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Real estate investing and passive income are often marketed as effortless paths to financial freedom, but in Episode 45 we unpack the truth about rental properties, value-add real estate, property management, cash flow, and what it really takes to build wealth.

Joshua and Lauryn dive into the misconception that real estate is passive from day one. Whether you’re buying rentals, flipping homes, managing apartments, or scaling short-term rentals, the early stages are rarely hands-off.

They share real-life examples from their own portfolio — renovation delays, sewer backups, contractor issues, property manager challenges, and the reality of being house rich but cash broke.

Key themes in this episode:

• Why passive income requires upfront effort and risk
 • The difference between buying assets and building systems
 • Why even managed properties require decisions
 • The stress behind value-add investing
 • The loneliness of building wealth differently
 • Raising kids while managing renovations and rental properties

Joshua explains that passive income becomes more passive over time as systems, automation, and teams take over. But in the beginning, it demands time, energy, capital, and resilience.

If you’re building a real estate portfolio and chasing financial freedom, this episode offers an honest, grounded look at what the journey really involves.

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Transcript

SPEAKER_00 0:00

I mean, I feel like if someone says that passive income is passive from day one, that they're lying to you or they've never done it.

SPEAKER_02 0:08

If you're talking about real estate in terms of like buying a house, renovating it, renting it, holding it, and things like that. Yeah, absolutely. There's really nothing passive about that.

SPEAKER_00 0:16

Nothing. Because before it's passive, it's stress, it's risk, it's, you know, you're crunching numbers, like you're out of cash, you're late nights when everyone else is sleeping.

SPEAKER_02 0:24

You know, people even think like, oh, well, that's because you don't have a property manager you're self-managing. Like we have properties that we've never even been to, we've never even seen, and we have property managers, and they still stress us out. There's still decisions we have to make. There's still, you know, renovations that we've got to, you know, figure out budgets on, and we're still, it's still not passive.

SPEAKER_00 0:41

So is that not us not having the right property manager, do we think? Or I mean, personally, I think no. I think that that's there's gonna be decisions and things that happen regardless that we have to, you know, have our hands in. But then it's also finding the right property manager too, because we've had experience that we've talked about in the past of not having the right property manager. Like it's just there, there is no part of it that is passive.

SPEAKER_02 1:01

Yeah, property managers only one part of it though. You've also like the properties that we buy are value-add properties. So, you know, the apartment building we bought was a value-add play. So we're looking to build equity. So there's a lot more that goes into a project like that. So if you're managing a project and the stress of these projects, I mean, we know flippers that have been just stressed out on projects that they didn't carrying costs are huge, and then the market turned and it's not selling, and it's sitting on the market, and they're stressed out because they're making payments each month on these large construction loans.

SPEAKER_00 1:29

I mean, we're not flippers, but we're feeling the stress of that. So Welcome back to The Broke Billionaires, where we document our daily struggles in building wealth while raising a young family. Join us as we talk creative wealth building for everyday people and couples that are struggling in a down economy. I'm Lauren.

SPEAKER_02 1:46

And I'm Joshua Masari, and we'll be your hosts.

SPEAKER_00 1:50

Welcome back.

SPEAKER_02 1:52

Casual Tuesday.

SPEAKER_00 1:54

Gonna say Friday, but it's definitely not Friday.

SPEAKER_02 1:57

Definitely not.

SPEAKER_00 1:58

Kind of wish it was. We are casual today. Yeah. Sometimes we we've been dressing up lately, but it's kind of nice to get back into.

SPEAKER_02 2:06

Well, the setup for me is like running around and well, it's just it's easier to, I don't know. I'm still trying to get it all figured out.

SPEAKER_00 2:12

Yeah. I like dressing up. It's the only time I get out of my my mom uniform of workout clothes, but it's fine. Don't I look good every day when you come on?

SPEAKER_02 2:24

Yes, absolutely. Good answer. Thank you. You look great.

SPEAKER_00 2:31

Thank you. I appreciate it. Okay. You don't look so bad.

SPEAKER_02 2:34

Moving along before I get myself in trouble.

SPEAKER_00 2:37

What updates do we have?

SPEAKER_02 2:39

Oh, it seems like there's always fun updates that we gotta talk about. So I feel like this week we have our three main properties. We've got something pretty major going on this month that has to happen in the next couple of weeks. So it's a little bit of a crazy time right now. Um the first one, probably the most pressing well, they're all pressing, but the biggest dollar amount thing that we're trying to figure out is the construction loan on the project that we finished up this uh this last summer. We talk about that a lot in the past episodes. We finished that about six months ago, and it's been renting as a midterm rental since then. Uh, has great occupancy rate. It's been a great rental. Um, the renovation on that, beautiful home in a great neighborhood. Uh, so that one couldn't have come out better. We're very pleased with the way that one came out. However, now it's time to, now that it's completed, we now have this construction loan. The reason we got a construction loan is because when it was all demolished and half tore apart, you the banks don't, you can't get a normal loan on that. You've got to do a construction loan, which is, you know, we did a private loan on that, and it's a much higher carrying cost. It's a higher risk for the lender, but it's a much higher carrying cost for us. We're paying 14% on that. So we need to get rid of that loan. So right now we're looking at uh options to be able to take that loan out and refinance it. The original plan was to get it renting and then just do a DSCR loan and refinance the first and this loan into one. The thing that we're running into, lots of things we're running into, but one of the big ones is that the loan on the first position is at 6% interest only for five years. We still have three years left on that. So we don't actually have to refinance that one, but it's the second position that we've got to get figured out. But if we refinance everything right now, rates are still higher than 6%. So we're gonna be paying our interest, it's gonna go up on the first, and that's a much larger chunk. So it's just kind of like I don't really want to refinance the better loan. It doesn't make a lot of sense, but there's not a lot of options. So we're trying to get a little more creative now, uh, looking at some more creative loan options that will refinance that second position, whether it's a HELOC or it's uh um just a bridge loan to get us a few more years. We're also exploring doing a home equity agreement, which we've done on some of our other properties before. Uh, and basically a home equity agreement is where you sell off a portion of the equity. Um basically you own your home 100%. Uh, say you sell off 20% of the home, and and an investor or a bank will give you a lump sum of cash to own that 20% of your property. And usually it has a little bit of a an additional uh writer on it or bonus on it, I guess. I don't know what you would call it, but they get an extra couple percent uh as a hedge in case the value for some reason drops. Like we're in a market that goes backwards, they've got a little bit of extra so that way they're hedging in case the draw the value drops a little bit, but they're also getting instant equity. So the day that they sign the paper, they've got that extra couple percent right on the front end. So if you were to sell or refinance the next day, they're also getting their money back. So it kind of guarantees some sort of profit if you exit early. So that's what we're looking at. Um, but we're having to get a little more creative as usual, because the larger banks that do these type of loans, uh, they're not really loans, they're investments, but they only do them for like 10 or 20 years. And they won't do a 10-year loan or a 10-year investment when you have a an underlying lien that's due in three years, because it would have to take them out and then they wouldn't get all that appreciation over 10 years. So that's what we run into with the larger banks that we've tried to do this with. So now we're looking at uh doing taking a private investor to do the same type of structure, but doing on a shorter term. So do something like three or four years to where it covers the three-year loan that we have, and then we'll have to refinance everything at that point. But hopefully, hopefully rates will be a little better at that point. So it makes a little more sense. But at least we're not giving up now and having to pay a higher interest for the next few years.

SPEAKER_00 6:59

So for someone who is interested in finding a private investor like that, what would you like, how would you go about doing that?

SPEAKER_02 7:08

Well, it's not easy. It's not something where you just pick up the phone book and call Mr. Private Investor that's first on the list. It's not, it doesn't really work that way. Um, I mean, there's a lot of of people in the industry, but you just kind of have the connections one, or there's a lot of brokers that deal with these type of, you know, hard money lenders, private lenders, where it's more, you know, not your conventional bank. So it's more out of the box. And that's designed more for people that are doing flips. Um, you know, we're doing flip and hold or fix and hold, which is a little a little unusual, not as commonplace, but they still do those types of loans. And these are the type of lenders that that do it. So they're getting a higher interest rate. They're getting higher points when they write the loans, they get a higher carrying cost. And so it's not something you want to carry on for several years. So it's something you want to get in, get the property fixed, while another bank's not gonna finance that property because it's you know under renovations. But once the project is completed, then you exit that by refinancing. So we're kind of at that point, we're just trying to figure out what makes the most sense. We just happen to have this first position uh lien that's this loan and that's a really good seller finance that we were able to structure. And we it just doesn't make sense to give that up and pay more interest for no reason, other than that's what we decided to do. So just trying to balance out what makes the most sense. So so right now, you know, we're we're going out and talking to investors and you know, we're floating this idea because we're actually structuring this ourselves on this property to be able to go to a private investor versus going to a bank and and get this kind of in-between shorter term that we're looking for to bridge it for us. So what happens is we can pull that money out tax-free because it's it's basically a loan, looks like a loan. It's not, you're not selling the property. So you don't pay taxes on that, that money that comes out and there's no payment on it. Somebody owns a portion of the property and they don't own, so they don't get rent income. They don't, but they're also not responsible for insurance and taxes. You you do it like it's your own property. They just own the equity portion. So when you sell or when you refinance, then they that's when they collect on their portion.

SPEAKER_00 9:16

Makes sense.

SPEAKER_02 9:17

So out of the box as usual, but it's a creative way to one, help us get this other loan refinanced and figure that out. Uh, but also we would have no payment on that. It still accrues because you're you're giving up, you're just giving up in future equity, but it helps us with the cash flow. So we're not having to pay you know a higher interest rate on that portion, which we are right now. And it just helps to stabilize the asset, helps you build up your reserves. And when you go to refinance everything into a DSCR, the financial picture just looks a lot stronger to the banks. So that's that's the idea and the play there. So fun stuff.

SPEAKER_00 9:52

Hopefully, hopefully we'll be able to find someone that is.

SPEAKER_02 9:55

Yeah, we'll see. I mean, we've got a lot of avenues that we're looking at, but uh we'll update you once we figure that one out.

SPEAKER_00 10:02

So that's one of the properties. Then we have our property prior to that that we've been talking about, the solar, that whole issue.

SPEAKER_02 10:11

Yeah, and a quick recap. It's not not that we're getting solar because we want solar, we need a roof because we have this old cedar shake roof. It's actually not even that old, it's only 15 years old. But after the the Palisades fires, insurance cut us off and said we're not going to insure cedar shake roofs anymore, and no insurance company will touch it. So we are currently using what's called a non-admitted carrier, meaning they are not admitted into the state of California, basically just meaning that that this insurance company isn't licensed in California or isn't. I'm not really sure what it exactly means. I just know that they're not a California insurance carrier. So it's an out-of-state insurance company that insures it. It's a lot higher risk for them because they're not in California with a bunch of properties to spread out the risk. They're just insuring ours. So if there's a fire, they're responsible for the whole thing and they don't have all these other premiums they're collecting from people to spread out that risk. So that's why it makes it a lot higher. And we we went from paying $2,400 a year to 14 over $14,000 a year because of that high risk. So we had to do it. So right now we're getting a solar uh um program or a solar system put on, and part of that is the roof, and it's all kind of financed into the whole package. So we're able to actually lower our expense on our power, or it's probably about the same, maybe a little less, but we're getting a roof out of it. Uh and then over time it'll probably save us money as as rates go up on power. Ours is gonna be it's kind of like a set incremental. So it will probably save us more money in the long run as well. And this is a furnished rental, we pay all the utilities. So with solar, there's less concern about people running up the AC bill in the in the summertime.

SPEAKER_00 11:45

Yeah, that'll be helpful for sure.

SPEAKER_02 11:47

Be kind of nice. And we just have a set, so it'll be the same monthly payment every single month throughout the year rather than going up in the summer, down, and then up in the winter when the heat's being used. So it'll help kind of just stabilize our cash flow on that as well.

SPEAKER_00 11:58

Yeah. And then we've talked a little bit about the current house that we're in, that um that fun lien. Is that what it was that was on the property? No, not a lien. Um, it was the owner.

SPEAKER_02 12:10

It was a previous owner from 30 years ago that didn't sign properly on the when they sold it. It was their their portion, it was a fractional ownership. They owned a portion of the property, 25%. It was in a trust. And when they signed it over when the property was sold, they signed as an individual, not as the trustee. So someone flagged it from 35 years ago that it was an ineligible signature, and they got put back on title. So title company, our title insurance company has been fighting this for the last over two years now. Going to court on Friday to go and testify that I bought the house not knowing this, and I am the owner, and yada yada. And so hopefully we'll close this out. And by the time this airs, we'll know.

SPEAKER_00 12:53

Do we know? Is this something that happens often? Like that feels like such a crazy mistake or like something to miss that because it you didn't purchase the house from them, right? Wasn't it? There was multiple owners in between then.

SPEAKER_02 13:07

So this goes back like the chain of command goes back to three, four previous owners before me, and it got missed all the way through and has changed hands as 100% each time. And so it's just one of those fluke things that just got overlooked and missed. And I don't know who went back to the records and and went and found this, but somebody at the county had nothing better to do than just start looking at signatures to make sure they were, you know, T's were crossed and I's were dotted. I I don't know how they how someone finds this.

SPEAKER_00 13:32

That's what that was gonna be my question. Is was there any other way that this could have been triggered? Or like how do you even find that?

SPEAKER_02 13:39

I just maybe some intern that was like trying to rack up ours and just was like trying to find stuff. I don't I have no idea how this gets flagged and how this like came about. No clue, but it happened and we're dealing with it.

SPEAKER_00 13:51

It's been it's been a headache for the last couple of years.

SPEAKER_02 13:53

So hopefully we can well, and this is our next big project, and we can't do anything. We can't do any refinancing on it. We can't, you know, we couldn't sell it if we wanted to right now. We don't own it. So we can sell it, we can't refinance, we can't pull money out to fund the project that we're trying to do. I mean, we're not even gonna start doing anything until we get this cleared because it's not technically our our house on paper right now.

SPEAKER_00 14:12

So it's kind of holding everything up, which is unfortunate, but and the person is being completely reasonable and understands, right? It's not like they're trying to fight it.

SPEAKER_02 14:23

The person's been dead for like 30 years or 20 years. The family that's oh, I don't know if they even have made contact with I thought there was still family.

SPEAKER_00 14:29

Oh my god.

SPEAKER_02 14:30

There might be. I have no idea.

SPEAKER_00 14:31

Nobody's literally just the signature. It's not that there's a person.

SPEAKER_02 14:35

Yeah. I mean, there may be, I don't know, but they had to like advertise like it's like so far removed in generations ago that like this person's been like passed away I don't know, long time ago. And so it's just one of those things like it's just like a little technical error, but it's caused a very significant inconvenience for us. It's so crazy.

SPEAKER_00 14:55

Oh my gosh. Well, those are our our property updates. Like you said, lots going on all at once in all this month. So hopefully we'll have some some positive outcomes for all of the positivity, remember? Um, some positive outcomes for those in the coming weeks. Um, you also told me, this is off topic now, but you told me about a house you saw for sale for $10,000 in San Diego. Yes, yeah.

SPEAKER_02 15:24

So one of my buddies, Freddie, actually sent this this morning as kind of crazy. There's a a property in San Diego, currently listed right now as of the recording. Um, it it's been listed since last summer. And it looks like someone was doing a flip or something because it looks like it's nice, pretty well done, and it's it's all furnished and and they just haven't been able to sell it for whatever reason. And they, you know, kind of kept lowering the price. I think it started like around 1.5 or something, 1.5 million. It was most recently at 1.2 million, and then today or just read this week, they just slashed the price to 10,000.

SPEAKER_00 15:57

So do you think that's a typo and they were supposed to be a million?

SPEAKER_02 16:00

Like they were You would think so, but it says in the very first line of the listing, the price is not a typo.

SPEAKER_00 16:08

Oh, okay.

SPEAKER_02 16:09

So it's very intentional. So obviously they're very motivated to sell and they're just trying to generate some buzz and obviously get a bid back up. You know, they're not gonna sell it for 10. What if nobody actually comes to the offer? Like, do they have to sell their advertising at 10,000 if nobody else comes at the well that was gonna be my question?

SPEAKER_00 16:31

Do we need to make a call to try to buy a house in San Diego for 10 grand right now?

SPEAKER_02 16:34

Like, should we push pause on this recording and go Well you should just not air this until after the if that's the case? But I yeah, I that's kind of crazy. What if nobody what if there's a reason that nobody wants to buy? What if it's like because of the area there's a like a condemned house or like something probably not condemned house, what if it's like close to a power plant or something that people like nobody wants to live there? Maybe that's the problem. Like, what if nobody actually gives you an offer that goes over a million and you're stuck selling it for the highest price? All right, you need to send me to the same thing. Like, can you say, can you advertise at 10,000, get an offer at say like up to 50,000, and then say no, you don't want to sell it because it's worth more? Like, how does there's gotta be some sort of liability for advertising it, right?

SPEAKER_00 17:13

I mean, you can always say no to an offer though, right?

SPEAKER_02 17:17

Right, but you can't if if you have no other offers and they're you're just saying no because you don't want to sell at the price that's above what you're you're asking, like there's gotta be some sort of, I don't know, any realtors that knows the answer to that just because I've never seen this situation before. I'm just curious if they don't get an offer that's higher than what they owe on it, for example. Let's say they owe 1.1 on it, how like they can't, what are they gonna do to you know, I mean, either take the loss and come up with a few hundred thousand dollars, or like what if the 500,000 is the highest offer they get? Do they have to take that? Are they like obligated to take the highest offer at that point?

SPEAKER_00 17:51

Oh, I'll have to look into that. I don't know. That's yeah, that is interesting.

SPEAKER_02 17:55

Interesting. Up for debate.

SPEAKER_00 17:59

All right. Um co-host outreach.

SPEAKER_02 18:05

Yeah, so we have been doing, you know, we our last episode that we did was um I shouldn't say our last episode, the last one that dropped, but a couple episodes ago. We did an episode on on co-hosting and how we do that and how we kind of get our leads and and run our co-hosting business for for midterm rentals. And I've been doing outreach uh with local in our market with local realtors. We're actually going to be going on a podcast pretty soon with one. Um, and we uh just reaching out to other other realtors that we know and we we work with and have a relationship with, just offering our services as a resource. Like, hey, you know, if you have investors that you guys have that are clients and are don't know about the midterm model and want to learn more, or realtors in your office and you guys want to know more about this to be able to educate your buyers if they are looking to buy rental properties, like you know, we're happy to come in and do like an education series and and teach everybody what we know and what we what we do because we know the local market pretty well. So we we have a lot of expertise in our local market, but just kind of getting the word out there and you know, in turn, hopefully that will help us get some co-host leads on people that that that need a co-host. Hopefully, you know, if they are looking for someone to help them out with that, we would be in consideration. But, you know, just trying to educate our local market on that.

SPEAKER_00 19:19

Yes. I'm really liking the co-hosting. I'm I'm excited to to grow that.

SPEAKER_02 19:25

Yeah, so we are actually contracting right now. We are realizing that for us, it makes a lot more sense to stay local.

SPEAKER_01 19:35

Yeah.

SPEAKER_02 19:36

In our local market. So that's what we know the best. That's where our most of our leads are, that's where we are. So we're not having to drive all over Orange County. So we are actually kind of contracting and looking to like refer out some of our stuff that's a little farther away and just not taking on more properties that are farther away. So we're just focusing on our core market right now.

SPEAKER_00 20:00

I think we've found what works really well in terms of a house size, a bedroom count-wise with at least our network. And I think that just focusing on those houses is going to be the most beneficial right now. Yeah.

SPEAKER_02 20:13

I think that makes the most sense to really get really good at our market and what we know best. Um, maybe we will branch back out later on, maybe once we have a bigger team in place to be able to handle that. But right now we're just trying to focus on making things a little more manageable and get really good at the micro of the business. Yeah. Yeah. Just a quick disclaimer. The information shared on this podcast is for informational purposes only and should not be considered as financial, tax, or legal advice. Always consult with a qualified professional before making any financial decisions. Your individual circumstances may differ and require specific strategies not discussed here. Now let's get back to the show.

SPEAKER_00 20:53

What are we talking about today?

SPEAKER_02 20:55

Well, so today we are talking about something that I've actually seen a lot uh online about, like on Reddit and articles and just forums and people talking about how passive income is not passive income, or in the sense that a lot of passive uh like r traditional passive income, real estate investing and things like that are not truly passive income. Um and you know, passive income is you're not doing anything. And I think there's a misconception about real estate. There's obviously different parts of real estate, but you know, I don't know. Why don't you tell me what you know about this now that we've been involved in it for the last few years.

SPEAKER_00 21:34

I mean, I feel like if someone says that passive income is passive from day one, that they're lying to you or they've never done it. Don't you think?

SPEAKER_02 21:44

Yeah, I would agree. If i i if you're talking about real estate in terms of like buying a house, renovating it, renting it, holding it, and things like that, yeah, absolutely there's there's really nothing passive about that.

SPEAKER_00 21:55

Nothing. Because before it's passive, it's stress, it's risk, it's you know You know, you're crunching numbers, like you're out of cash, you're late nights when everyone else is sleeping. Like it's it's not no, it's just not that easy.

SPEAKER_02 22:08

You know, people even think like, oh, well, that's because you don't have a property manager, you're self-managing. Like we have properties that we've never even been to, we've never even seen, and we have property managers and they still stress us out. There's still decisions we have to make. There's still, you know, renovations that we've got to, you know, figure out budgets on, and we're still it's still not passive.

SPEAKER_00 22:26

So is that not us not having the right property manager, do we think? Or I mean, personally, I think no. I think that that's there's gonna be decisions and things that happen regardless that we have to have, you know, have our hands in. But then it's also finding the right property manager, too, because we've had an experience that we've talked about in the past of not having the right property manager. Like it's just there, there is no part of it that is passive.

SPEAKER_02 22:50

Yeah, property management is only one part of it, though. You've also like the properties that we buy are value add properties. So, you know, the apartment building we bought was a value add play. So we're looking to build equity. So there's a lot more that goes into a project like that. If we were buying, say, a brand new apartment building that just got completed and we're not looking for, we're just looking for wealth preservation. So maybe later in life and we're just looking to put money into an asset that just kind of maintains that and also also builds over time, but maybe not as much, doesn't have the value add and the quick equity appreciation that that we're pushing. Like we're not able to push appreciation on it because it's a brand new property. So in that case, you might be a little more passive, but you're still gonna have things that happen, even in the brand new buildings. You still have situations that arise that property managers gonna need you to get involved in. So no matter what, you're still gonna have to make decisions. Now, unless, unless you're just so far down the down the journey that you've got people in place to handle that, right? So you've got, you know, asset managers that are handling all those decisions for you and nothing makes it up to you. You know, maybe when you get to that, you know, maybe when you're a grant card own, you don't have to deal with all those decisions. You're just lying around in your jet and talking.

SPEAKER_00 23:58

But well, do you think that that's like when you see it on Instagram, like the Instagram description of passive income, do you think it's people who have already made it that far? Or like what do you think? Because you see that a lot, people talking about passive income on Instagram. Like, what do you think?

SPEAKER_02 24:13

So I think it's two things. One, I think it's a a social media lie. I think you see a lot of like, oh, invest a you know, passive income, this and that, and you don't have to do anything. And like buy our course. It's all these good, like, right, trying to get you excited about something that's passive. And you I see all the ones that are always like, oh, buy Airbnbs, do the Airbnb, you know, get a short-term rental, out of state, short-term rental, and you're not you're not even in state. Like, there are gonna be so many issues that arise within out of site. I we're dealing with it right now. We've got on our midterm uh furnished rentals, and we have on site managers, and it's still headaches still come to us. So there's that's just a lot of headache. Uh like the the way that they paint that picture, and I there's no, there's no amount of like you know, SOPs and like all your processes and and people that you have in place that's going to manage all of that for you. That's going to come back to you where there's decisions that you have to make and you have to get involved. And I just think that that's a really like fairy tale picture that's not real in real life.

SPEAKER_00 25:15

I agree. And again, this is related to real estate, obviously. So maybe there are other industries that are truly passive.

SPEAKER_02 25:22

Well, so if you're so real again, real estate has a lot of different ways of investing in it, right? So if you're talking about owning the properties, there like there's really not a lot of passive ways of do that. Now, if you're a lender, you can come in as a lender, kind of like the what we were talking about earlier, selling a portion of our equity. That investor that comes in and buys that equity, that is very passive because they have nothing to do with operations. They're, they don't have no responsibility on expenses on the property. They are just buying part of the equity, they're just letting it sit and letting it do its thing, letting us operate it and and you know, stabilize the asset, move forward through time and allow it to appreciate. And that is a truly passive investment. Now, you could say, well, you could, you know, end up in a situation where something happens and that person has to foreclose on the property or something like that. So in that, and I've heard that argument. So in that sense, it's no longer passive. So you do have that side of things where you know it could become where it's not passive, but it's still, you know, if you're on the lending side, for the most part, you're gonna be in a passive play, but you're not getting your hands dirty, you're not doing any operations, you know. So there is that side of real estate that is more passive. You know, another option is um, and I don't know if we've ever talked about this. I've done this before, but uh investing in tax liens. So at the end of the year, uh, like Arizona's one, where everybody that's late on their property taxes, they will, instead of the state carrying out, or instead of the county carrying those delinquent taxes, they sell that to investors for up to 16%. They let investors bid on it. So it starts at 16% and then it gets bid down by investors and the lowest bid wins. But the uh property owners are paying 16%. So when they finally pay their taxes, it's already been paid. The county's already collected their money. So they weren't floating it. It was the investors floating it. And then they get the interest that was on that. But that's a pretty solid passive investment because you're gonna get your money one way or another. Now there's always the, but if they don't pay for five years, do you then have the option to foreclose on their property? At that point, it's no longer passive because you have to go put a notice on their door and you have to go through all the steps to be able to take possession of the property. Um, and there's some you know, legal stuff you probably have to go to court. So at that point, it's no longer passive, but you're getting a property that you bought for 600 bucks or whatever. So um, so really there's not a lot of real passive investments, you know, unless it's just something that's, I guess, with real estate, it it always has the uh the potential to not be passive.

SPEAKER_00 27:55

Yeah. I think we did do an ep not a full episode on that, but we definitely touched on that specific topic. The tax liens. The tax liens. I will have to find in the show notes and add that in. Um, and you kind of answered like what I was gonna go into next is just like the reality of passive income and what that looks like. But kind of, I mean, at least in our situation with I think it's also so different having a family. You know, we have we talk about that a lot too. Like this would be so much easier building it just the two of us, but having a family adds a whole nother level. Like, what's the reality of that?

SPEAKER_02 28:32

I mean, you know, we do this a little differently because we are moving into a lot of these properties and buying them as a primary. So it's a little lot more moving parts, and I would say way less passive. But even if you're just doing flips or you're buying properties and you're not living in them and you've got a family, there's still a lot of work. Even if you're hiring contractors to do everything, you're still having to go and manage the project and check on it. So it's still taking you away from family time. It's still, it's still pulling you away no matter what. So if you're managing a project and the stress of these projects, I mean, we we know flippers that have been just stressed out on the on projects that they that they they did and the carrying costs are huge, and then the market turned and it's not selling and it's sitting on the market and they're stressed out because they're making payments each month on on these large construction loans.

SPEAKER_00 29:18

I mean, we're not flippers, but we're feeling the stress of that. So right.

SPEAKER_02 29:23

But I think that we feel that a little less once the property's done because we start running it right away. And we're running it to cover the cost. Our properties cover themselves. You know, our property's cash flow and the extra cash flow is what's carrying us through right now. Yeah. So, you know, uh because the way that we do it, yes, they have we have high carrying costs and we're paying way more interest than we should be right now, which is why we're trying to stabilize. But but the property, the assets themselves are still covering that. So once we get that stabilized, get that into a better loan, they'll cash flow even better. So the properties themselves, you know, we're not having to continually come up with this money each month.

SPEAKER_00 29:59

So like you said, building, building those reserves so we don't have that stress of, you know, thankfully we've been very lucky and have not had any months where we've had vacancies and had to worry about it. But that's always, you know, we want to be smart and prepared for that. And so having those reserves built up is something we we would like to be getting to.

SPEAKER_02 30:20

Yeah. No, absolutely. So it's definitely a financial stress factor that comes into play um with these properties. So, you know, like we've talked about before, we're we are asset rich or house rich and just cash broke, like just just the cash flow. Um but everything's covering itself right now and it continues to appreciate. And you know, like we like we've said last year, our our wealth increased even with the struggles that we faced. So that's a testament to the what we're doing that works, but we just gotta get the cash flow a little more stabilized and make things a little easier.

SPEAKER_00 31:02

Yeah, that would be nice. Get to a point where the cash flow is flowing. Agreed. It is easier. That's the goal, right?

SPEAKER_02 31:12

Yeah. And I think also like you see a lot of you know, the t HG TV shows and like kind of glorifying the flipping, and they they show some of the bad stuff, but they they really make it look a lot easier than it actually is. You know, those shows that there's a 40-minute show or 30-minute show or whatever, that's a a lot of those take like we've figured like some of those take over a year. Like they don't show you all the stop and go and waiting on inspections and the carrying costs that they're having to pay on the interest for that whole time starts to add up really fast. So that's something I think a lot of people don't realize in these flip situations, is these aren't just cash investors that have cash. I mean, maybe some people, but very few of them. The majority of people doing these, even the ones on the shows, you know, they're they're not, it's not their own money in this. These are these are loans that they have on these properties and they're making monthly payments that are high interest loans. So the longer it takes to get something flipped and sold, the the the less you make because you just it starts eating up your profit.

SPEAKER_00 32:08

I think some a couple of them do kind of touch on that, and you can, and they're more open about the length of time, obviously. But yeah, I agree that a lot of them are just very much glorified and just showing the renovation portion of it is what they they focus on more, I think. Yeah. Than the actual financial side of it.

SPEAKER_02 32:27

Yeah. And I think I think just no one talks about like the emotional stress side of it.

SPEAKER_00 32:34

Oh, I could talk a lot about the emotional side of it. How much time do we have?

SPEAKER_02 32:39

We do. That's why we started this podcast, right?

SPEAKER_00 32:42

Uh uh yeah.

SPEAKER_02 32:44

It's I everyone always talks about, oh, I bought this house for this and you know, put this into it and sold it for this. But everybody that has that exit, it's it feels great and they get out of it. But how many people have we talked to on our shows all already that have have done a some sort of of flip that they were really stressing out about? Like look at our first guest, Nick and Aja, like Nick, the first uh that that large deal that he did, um, where he uh it was I can't remember, it was a commercial building they sold to a school and he double closed it as a wholesale. But in the in between, he was like really stressing out because he was on the hook for a lot of money. And so, like the stress of that deal not going through, it would have been detrimental. Uh, and then you know, Luke had another one where there was a big, it was a big development that he was selling to uh an investor client of his and they ended up backing out for whatever reason. And he saw the value in there and wanted to take on the deal and said, Hey, I'll I'll take it over, I'll take the deal. And, you know, he ended up walking away with like I think $470,000 on that one deal. But he had a lot of sleepless nights and just trying to get that across the the, you know, the finish line. He talks about coming home and just trying to be present for his family while he's got this in the back of his mind. Like, I'm about to lose a lot of money if this deal doesn't close. So just the emotional stress of some of these deals can be very, very heavy.

SPEAKER_00 34:06

I could not agree more with you. I think um it's kind of like giving birth. I think in the stay with me for a second while I explain this. Because the moment, like while you're in the moment of that of having the baby, even like leading up to having a baby, it's so much on your body. And like usually people give birth and like, I never want to do that again. Then a few months later, you're like, I can't wait to have another baby. Like you forget it. You forget that part, and that's why you have another baby, is your body puts up like stress blockers? That that's not the technical term. But it, I mean, that is true. There, your body makes you forget what you just went through so that you can do it again.

SPEAKER_02 34:48

So are you saying that when you get that payday or you stabilize the asset, it's so such a relief that your body or your mind blocks out the stress.

SPEAKER_00 34:57

That is exactly what I'm saying. Interesting.

SPEAKER_02 35:00

Probably true.

SPEAKER_00 35:01

Yeah, I think I think it is.

SPEAKER_02 35:03

I think if you get that payday, but if you don't, then you you probably aren't never gonna want to do it again, or it would be really hard to get back in into it and and want to do another deal.

SPEAKER_00 35:13

Okay, true. I yeah, I do agree with that. Yeah, I think if you if you get burned or lose a lot, then you're in you're probably that's in that's ingrained in you for sure. I mean, I think yeah, I think so.

SPEAKER_02 35:25

Okay, yeah, so I think like when it comes down to it, some of the things that people don't talk about are like costs. Like one, we talked about the carrying costs. People don't think about, oh, I paid, you know, $500,000 for this property, but they don't talk about it's costing me $1,500 a month in carrying costs. And the longer you go, the more expensive that gets. And so that starts to eat your profit up. And it's one of the like unspoken things, or like you say, one of the unsexy things about real estate investing is just that additional cost that starts to accrue. Things go wrong. Things happen.

SPEAKER_00 36:02

I was gonna say it, I think the unsexy things for me would be like the unexpected costs that come up, right? Like you have a plan, you have a budget, you're being conservative with that budget, you're allowing room for things and errors and things to come up, but you have something massive come up and you're not prepared for that.

SPEAKER_02 36:19

Yeah, we had that happen on our last project. You know, we had two things actually happen. One, we got down, we were doing the um the bathroom where we were, we took one bathroom and basically turned it into about one and a half, did like a powder room. But when we dug out, we had to break through the concrete, dig out about four feet down to reroute all the sewer lines. And the original sewer line that we had had cameras scoped before buying the property and said that it was fine, collapsed. Like once that dirt was pulled up, the whole thing just collapsed. So then that was a $15,000 expense that we were not expecting because now we had to replace the whole sewer line. We ended up doing a liner, which was cheaper than doing a full replace, but still that was just not something we were expecting. You know, then we got everything put back together. The house was had just baseboards had just been painted, interior just finished painting, and that sewer line that we just paid for backed up and flooded the whole house and with sewer water. And we had to start all over. We had to tear out two feet of of drywall in half of the house and flooring and and start. We were so close to being done, and we had to start all over. Yeah, that and that put us back. That put us back probably a good four or five months.

SPEAKER_00 37:30

That put us back. Time that put us back financially, that put us back a lot emotionally again, like moving. Yeah, that was not a fun time.

SPEAKER_02 37:42

Yeah, we were definitely in the trenches at that point.

SPEAKER_00 37:45

Like truly in the trenches. I actually have a picture of the kids like it all. Like Yeah. I also think too, it's it kind of comes back to you always hear people say like like a house poor, right? Like your your house rich but your cash poor, which I'd like to say like cash broke. Don't you think?

SPEAKER_02 38:07

That's the name of the show. It truly is. You can't get any can't nail can't hit the nail on the head any harder than that. Let me ask you this. Why do you think that what we're doing like feels so lonely at times?

SPEAKER_00 38:22

Because we don't know anyone. Well, okay, a couple things. I think one is not something that people talk about often if they're in like a financial situation like this where where they are so strapped. Um and I think we don't know anyone that's doing exactly what we're doing or even like close enough to it, no one that we're like really close with. I think as we've had this show and as we're networking more and getting to know more people, I think we're starting to meet people not necessarily in the same industry, but doing you know, other things that are in a similar situation, which is helping, but it can feel lonely when you can't you can't do things with your friends and your friends don't understand because you're cash broke. Right?

SPEAKER_02 39:12

Yeah, no, absolutely. I mean, it's something that you know I know you struggle with maybe more than I do at times. Um I tend to stay a little more positive, whether I'm actually feeling that way or not. I gotta portray that. But it's definitely not easy. And it's uh I I mean it's it's worth it in the end, but when you're going through it, it really makes you question is this really worth it? Like even if we weren't living in these houses and we were just doing it as an investment, like it's still there's a lot of financial risk, there's a lot of time that goes into it. When we get it done and we get it pictured, I feel like that's that relief moment. And it starts renting, it's like it's working. It's working. It's it like it was all worth it. And now we have this asset that we just doubled, almost doubled the price of. Um, and we have something that people want to live in, and so there's a lot of demand for that asset. I think that that kind of makes, like you said earlier, it kind of blocks all the stress out and makes you kind of forget about it.

SPEAKER_00 40:13

I think so. And I but I think that it still doesn't make the day-to-day easier necessarily. I mean, there's still like big things we've missed. Like when we talk about the sacrifice, we've, you know, that's the part that I think gets really hard that I think that's why it can be lonely is people don't uh don't understand why we would put ourselves in this situation in a sense, why we would choose to make these sacrifices, why would we make things so difficult and like struggle each month to get by and miss family weddings and very close friends' weddings, like yeah, but that has nothing to do with the real estate.

SPEAKER_02 40:48

I would argue that that doesn't have anything to do with our like our personal financial situation, doesn't actually have anything to do with the real estate. That's a kind completely separate business. Like that's we don't income. That has nothing to do with it. We actually, because of the real estate, we actually have a little bit of income. So that's actually helped us, but that doesn't really have anything to do, I would say, with what we're going through on the financial side. Yeah, that's true. You know, and there's additional costs too that people don't don't think about. Just, you know, self- we self-manage our local properties. So, you know, that's that's time. Uh almost every day we're doing something or going somewhere to attend to a property. Like, you know, it's it's it takes time and there's a cost to that.

SPEAKER_00 41:24

Yeah. I mean, I would say, you know, once we finished the that last property, I was obviously so excited for you to be done with like the physical labor of that house because that was taking you away. But I would almost argue that there's still things with these local properties that even though you're physically at the house and like you're in your office, but you're still on calls, you're still, you're still doing, I would argue, almost as much as you were physically.

SPEAKER_02 41:53

It's just not physically like in digging the trenches or swinging a hammer. But yeah, it's still definitely a lot of work. So there's there's definitely that to consider. And then also, you know, an additional cost that because we do midterm rentals, one, it cash flows these properties and makes them a lot, you know, more profitable and and actually makes them make sense and pencil better. But one of the things that people don't think about or that we have to like factor in additionally on top of the renovation budget is furnishings. You know, we had to get it the last one because we used all of our cash on trying to get that across the finish line. We had to take out a private loan just to get all the the furnishings completed. Um and we I I want to say it was like $30,000 to $40,000 to to furnish it. So it's it's just one more expense and you don't make that money back that quickly. No. You know, maybe over a couple of years it makes sense. But you know, overall the asset, it makes sense, but it's not like you're getting that money right back right away because you've got a mortgage payment that you're paying.

SPEAKER_00 42:52

So and like we've talked about on, I mean, we've talked about how we furnish these homes. Like we are not going out buying expensive pieces. We try to make it look as high-end as possible, as budget friendly as possible. Um, but that would, I mean, it was a five-bedroom house. So it's it's a good size house. It was a lot to furnish and it adds up quick.

SPEAKER_02 43:13

Yeah. And then I would say just the cost of all the mistakes that we've learned along the way, you know, those are expensive. Some of them are very expensive.

SPEAKER_00 43:20

Which one would you say is your favorite mistake?

SPEAKER_02 43:23

Let's not go into the favorite mistake.

SPEAKER_00 43:25

That's a whole nother episode. Okay.

SPEAKER_02 43:26

But yeah, and going back to the passive, I would just say like, you know, even once the property's completed and we're renting it, if your phone is still ringing because of the asset, it's not really passive. You know, you're we we've constantly got calls from guests and and we're since we're self managing too, uh, what we do, I would say is definitely not self. Like I would never tell anybody that our strategy with real estate is passive because there's very there's really nothing passive about it. I'm constantly the phone's constantly r ringing for one property or another. Or whether it's an issue or just a placement uh with a a placement provider or whatever it is. So the phone is always ringing.

SPEAKER_00 44:08

So do you think we we personally will ever be in a point where we have truly passive income with what we're doing?

SPEAKER_02 44:15

No, not from the asset, but I think we'll be able to have people in place that are answering that phone. So we're not having to do that. So for us, it may feel more passive, but the actual asset or the strategy itself is not as passive because you're having to pay somebody now to manage it. But I think we'll get to that point where we've got a team that kind of handles everything for us, but you still have a team that's you're paying to manage it. So it's not at that point, it's not passive.

SPEAKER_00 44:36

And you're managing the team, which is still another layer to that as well.

SPEAKER_02 44:41

Yeah, that's true. Let me ask you this. With the deals that we've done since we've been married, which one is the one that stressed you out the most?

SPEAKER_00 44:51

Wow. Um I think that gosh, that's hard. Um, I think the first one in the sense of just not knowing what to expect and having our first baby and like not kind of building up that like tough skin, I think that had a lot of stressful moments. Living in the construction site with babies, I think that was hard.

SPEAKER_02 45:17

Well, and that was your first experience doing this. So I had kind of gone through it a little bit, but that at that point, that was probably my most extensive renovation all at once because we were trying to get as much done as we could before we moved in. Uh, and we had a young baby, so we didn't want like the dust, you know. So we we got a lot of the the heavy, heavy lifting stuff done first, just demo and you remember that there was brick, the entire downstairs was just brick, like it was not brick-looking tile, it was actual brick that these people had. They loved brick so much that they had it as the floor. Yes. It was insane. It was two-inch brick on the floor.

SPEAKER_00 45:54

Yes. We'll have to like put a video or picture of it somehow, because it's unreal how much brick was in this house.

SPEAKER_02 45:59

So that you know, we we brought in the demo crew and jackhammered the whole downstairs of living room kitchen. There's just giant, like we have pictures where it's just like giant, you know, brick, like sections of brick just all broke up. And I remember walking in there when they weren't working and I had to go do something. And I walked in there and I just looked around and I was like, I had like that kind of freak out moment. I was like, what did we get ourselves into? Like, we're supposed to move in here in three weeks, and it's literally a pile of rubble. It looks like a junkyard, and it was a little overwhelming. But we pushed through, we got, we got moved in, we were supposed to move in, and it was not complete, but it was complete-ish, or it was livable and in the sense of like we weren't walking on brick and dirt, like it was we had flooring in, we had working bathrooms, we had did not have a working kitchen.

SPEAKER_00 46:50

No, we were doing dishes in the bathroom sink.

SPEAKER_02 46:54

We were uber eating a lot at that point in time.

SPEAKER_00 46:57

I don't know. That's a really hard question because I I feel like, like you said, like that was hard because we hadn't done it before, but then the next one we had a lot more kids and I was pregnant through a lot of it.

SPEAKER_02 47:09

Well, do you if you remember when we moved into that one, it also was not finished. It was more finished than the other one in terms of like the overall project, it was a much bigger project, but some of the finishing stuff wasn't done. For example, we didn't have a kitchen. Again, it's always seems to be the last thing. So we didn't have a kitchen, and we did not have we had working toilets, but we did not have a working shower or bath. Oh my gosh. Uh yeah. Okay. So you were taking the kids down to your parents' house to like bathe them a couple times a week because it was this was like a two or three-week thing. And we had um, we would we had a camping shower. I I ordered one of those from Amazon, like the the bag, the bladder bag. I would fill it with we didn't even have We had no hot water. So to start with it, the first week, this was only like the first week, the first weekend, I think. We did not the water heater hadn't been put back in yet. And so we were waiting for the gas line to get signed off because we couldn't turn on the water heater until the gas line had been signed off by the inspector and it was okay to hook up. So I didn't know that. That's what that was a lesson learned. I did not know that you couldn't hook the gas appliances up until you had uh sign off because they want to make sure that everything was put back together and there's nothing leaking, make sure all the pressure test was good. So we we did not have we had water, but we didn't have hot water. So I had to buy this bladder, and I would first thing in the morning, I would fill it up. I would go stick it outside. Luckily it was summer.

SPEAKER_00 48:34

I would let it not do anything. It did not matter that it was.

SPEAKER_02 48:37

Oh, it helped. That was real cold water. It helped. It would sit in the sun all day, and then we would hang it up on our back patio on the rafters at night and take the fastest showers with this little hose thing that we had that was dangerous.

SPEAKER_00 48:50

But do you remember the hose you had to like get low because if you lifted the hose up to you, it would like kink it and knock them out. So the kids loved that though. They they showered a little bit. Oh yeah, we had a little cardboard.

SPEAKER_02 49:01

We had like a little cardboard stall hanging from the the ceiling out in this patio so that the neighbors couldn't get a free show. But yeah, that was it was interesting.

SPEAKER_00 49:10

We also do remember, okay.

SPEAKER_02 49:11

I think the thing that I was So when we say that we sacrificed that we make sacrifices to build these houses, we we were making sacrifices.

SPEAKER_00 49:19

Like I come back to nobody better ever tell us we are lucky. Um the other thing that really stressed me out about that house is there was no um railing on the stairs. You had to make shift the railing. The stairs weren't just plywood, remember? Yeah. And we had to like makeshift a railing for the a very long time that was like that till we almost moved out. Um so what was your hardest scenario house? Question going back to you. Which one do you think was the hardest?

SPEAKER_02 49:54

Uh that's a good question. I think probably the second one, not not because of the house so much, but more because we had a larger family. And so trying to create a comfortable living environment for you and the kids was I know emotionally draining on you, and then me just trying to get everything across the finish line so we could have, you know, pushing the tile contractors to like the get the tub. I'm like, we just need a tub. Don't I don't care about the shower, get the tub done. We gotta get, you know, we gotta bathe the kids, like just get the tub done.

SPEAKER_00 50:25

Well, it's and it's one thing chasing around one kid in a house that is like dangerous and like not set up well and containing them and containing the mess. But when you have three, that's a whole other you know, you have a baby that's learning to crawl. You have it's yeah, trying to to keep eyes on and keep safe three kids in a house like that is a lot more work.

SPEAKER_02 50:51

Yeah. So coming back to the passive income, you know, again, what we do is not really passive, but I also think that, you know, passive income is not something that you buy into. I think it's something that you build into. And what I mean by that is, you know, you're not gonna just invest in into a, you know, even a business, invest into a business or a you know, real estate or some sort of asset that you're buying and have it be passive. It's the systems that you put in place that make it passive. So, like we're building up our co-hosting, like we're going to have a team, we're building up our systems right now, all of our standard operating procedures and kind of building out what that looks like so that we can hand that off to somebody else to be able to manage everything. And then for us, even though we still have to make decisions, the day-to-day, the phone ringing, it starts to become more passive as we step back and and have those systems in place for somebody else to be able to take the reins and run with it. And I think it's the same thing with with real estate. You know, you can get your systems in place to run more efficiently and to automate with AI. Can you can automate a lot of things these days? You know, our screening process is all automated now. Somebody books on Airbnb and all all of our systems take, you know, kick in and does all the screening and does the lease and all this stuff does is automated. So we're not having to go back and forth with it. So there's a lot of systems that you can put in place to make it feel more passive and take up less time.

SPEAKER_01 52:16

Yeah.

SPEAKER_02 52:16

I don't want to scare people away from this stuff, but we also want to talk about the ugly truth of real estate investing and you know, owning a business and just anything that pe you know, there may be a misconception out there that it's passive when it's really not that passive.

SPEAKER_00 52:31

I was gonna say, do you have any advice for someone who's wanting to be at that point where they have passive income?

SPEAKER_02 52:40

Well, I think if you really want to be passive, you you gotta get to the point where you're not taking risk. Um, you're you're investing in gold, you know, silver bonds. Those are true passive investments that don't require anything. But the returns aren't there. So, you know, we're in our at our point in our wealth building journey where we're building and we're not just trying to preserve our wealth. So I think while you're building, you're really not going to be in that full passive investing. You know, it doesn't matter if you're doing stocks, like you can do trading uh options, which I've done, and we actually have somebody coming on soon to talk more about that, which is a another uh uh interesting strategy. Um, but it's not, it's not passive. Again, you're still having to make trades, you're having to pay attention to things. Like there's just not really anything that's passive until you just put your money and set it. You know, you you buy into a company a stock and you just set it and forget it. And your gains are gonna, you know, maybe you get lucky, you know. Obviously, there's people who have put money into, you know, Bitcoin and forgot they had it, and then 10 years later they're they've got multi-million dollars and it's sitting there in Bitcoin, um, just as a fluke thing. So yeah, it can happen, but it's not something that you it's not something that everybody can replicate. Like you get lucky here and there, but I think that just knowing that while you're building, you're gonna be more passive and work on building. And then as you get older, closer to retirement, closer to just wanting a stress-free life, at that point you move it into those more passive investments and just it's more about wealth preservation at that point.

SPEAKER_00 54:08

I agree. I feel like if you're in the messy middle, you're not really doing it wrong. You're just early.

SPEAKER_02 54:16

Yeah. Yeah. Cause it's like a stage thing. So, you know, as you stabilize assets, you know, your business, you get people and systems in place, it becomes more passive. But at the beginning, you know, you start a business, there's nothing passive about starting a business. You're up late, you're working long hours, like you're trying to get that thing off the ground. And so it's it's very far from passive, but it can become way more passive as you as you grow it and uh as you get further down your your journey on that that business. So so yeah, so just early on, you're not gonna have that that passive feeling, but you can definitely get there with systems and and people to be able to make it more passive for you.

SPEAKER_01 54:52

Yeah, absolutely.

SPEAKER_02 54:53

Absolutely with that. It's good.

SPEAKER_00 54:55

All right. Anything else on No, that's pretty good.

SPEAKER_02 54:59

I mean, we haven't really touched on that, and I know that that's that's a real hot topic these days is is it truly passive? Is it not? So I think, you know, just again, passive income is gonna be, you know, stocks, gold, bitcoin, if you're just leaving it, forgetting it, something that doesn't actually require you to do anything, but you're not gonna have those returns and and build. I mean, I shouldn't say you're not going to because you could get lucky, but it's more of a luck versus a sweat. Yeah, at that point. Yeah, I would agree with that. But there you go, that's the same, there's a lot of risk too. You can also lose a lot of money in those those scenarios. So, you know, if you're doing uh maybe gold or like bonds like that are that are super safe, that's a real good wealth wealth preservation type passive income. Yeah. So don't get all hung up on those social media reels that say, buy 20 Airbnbs and it's passive income out of state, and you don't have to do anything. Like you're gonna have some restless nights and you're gonna have some decisions to make and you're gonna have some losses that you've gotta figure out.

SPEAKER_00 55:59

So absolutely.

SPEAKER_02 56:01

Yeah.

SPEAKER_00 56:02

Have you been reading any books lately? We've been we've been up and not sleeping much with our two of our children.

SPEAKER_02 56:08

So I don't know if you've had time to read, but I finished The Wealthy Way by Ryan Paneda, and that was actually really good. I really liked that. Um love to get him on the show.

SPEAKER_00 56:15

Oh my gosh, that would be amazing.

SPEAKER_02 56:17

He he he was a he was a couch flipper. He was uh an OG couch flipper around the same time that we were. So I'd love to get him on the show and and talk about uh couch flipping one of these days.

SPEAKER_00 56:26

I would love to know. Yes, I want to hear his story about the couch flipping. Like because like you said, it was around the same time you guys were doing it, right? Yeah. Just hear the differences and yeah, that'd be cool.

SPEAKER_02 56:37

Um I just started reading uh another book called The Lords of Easy Money. It's um it's about the Federal Reserve and uh 2008 crash and how they were navigating that and trying to curb infl inflation or prevent inflation, but get us out of the mess that we were in. So just started that book, but uh we'll see. We'll see where that goes. Just learning about the I would say behind the scenes of money in the US and how the Federal Reserve controls everything.

SPEAKER_01 57:09

Yeah.

SPEAKER_02 57:10

Yeah.

SPEAKER_00 57:11

Love it.

SPEAKER_02 57:12

All right, that's it for today. Anything else? Last words? No. Okay. Uh like and subscribe. We're on we're doing YouTube now consistently. So if you prefer to watch on on YouTube, check us out. We've also got a lot of uh short reels and we're doing some other informational uh videos on there as well. So we've got quite a few videos uh that we're we're putting out there and building an audience there as well. Um as always, you know, like leave a comment uh a review if you have a few seconds.

SPEAKER_00 57:41

Rating at least.

SPEAKER_02 57:42

But if you don't have a few seconds, leave a rating because it literally takes half a second. You just tap that five star, and that's all you got to do. Uh we also have um our community that we're we're launching. If you're interested in that, you can check that out. We do have a website that just went live uh that's got some information on that. And you can you can book a call in there with us to learn more about that. It is BM for broke millionaires, so bmlegacywealthbuilder.com. And we're also gonna be doing probably some webinars coming up. Uh, so we'll do like some masterclasses on some of the stuff that that we talk about, some of our strategies. So we'll be putting those out and letting everybody know about that. And also, oh, we are launching our newsletter. We probably should have done this a long time ago, but we are gonna be doing a newsletter. We'll put that in the show notes, but you will be a link where you can sign up. But just uh keeping you up to date on our on our episodes and our guests and and just other strategies and you know, creative tax you know, things that come up because that's always changing with, especially with I feel like Trump in office. It's like every every week there's some new something he's trying to do, or every week, you know, whether it's for taxes or with real estate. So there's all kinds of stuff that's that's changing all the time. But we'll be sending out the the the Lou newsletter. So if you want to sign up for that and stay in touch that way, you can do that. And that's pretty much it. All right. Get out there and make it happen.

SPEAKER_00 59:05

Thanks for listening. This has been a production of Rebuilding the Dream Studios.