How to Invest in Commercial Real Estate

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Episode #096 - "Successfully Unemployed" with Special Guest Dustin Heiner!

by Criterion, Braden Cheek, Brian Duck
February 20th 2023

Today hosts Braden Cheek, Brian Duck and Joel Thompson discuss the life and career path of a real estate success story who became financially free at the age of 37.

Time Stamps: 0:00 - Intr... More

Well, how is it going guys? And welcome back to how to invest in commercial real estate. And we are back with another exciting episode and today we have a guest with us, Dustin um Dustin Heiner, did I pronounce that correctly? You sure did Dustin Heiner? And he has been investing in real estate for quite some time and we thought we would have him on the podcast and kind of tell his story. I know Joel kind of says it best. Um Say what, say what you kind of said. Ok, well, what we're, you know, everybody gets to listen to us talk all the time and they've heard some of our story of how we went from day jobs to retiring early or whatever it is. Uh But Dustin's done that he's doing some exciting things, he was able to retire early. And so we know the listeners want to hear his story on how he did it. Awesome. Well, Dustin, let's kick it over to you, introduce yourself. Tell us how you got started and, and we'll go from there. Yeah. Thank you so much guys for having me on the show. Yeah, I am a real estate investor. That's literally what I do. In fact, I was blessed to be able to quit my job or I like the term successfully unemployed. Basically, I found a way to make money to provide for myself and my family without work that dead end job or that just over broke job.

And so I go to the end. So when I was 37 years old, I was blessed to be able to quit my job because I had enough rental properties, long term buy and hold rental properties and other investments that made me money in passive income every single month. Now, I didn't start out that way. In fact, I did start out with just like everybody else. We're all taught this same thing. We're taught to go to school and get good grades. This is the plan that we're all taught, get good grades and then you go to college or university and you get even more good grades and getting thousands and thousands of dollars into debt and you get a piece of paper. It's called a degree. And you go to different companies, you try to get a quote unquote career there and then work 40 plus years of your life and then retire at 65 70 years old and live on what you managed to save that entire time of working that just over broke job. Well, I'm doing that exact same thing and I got, well, actually one of the most stable secure jobs I could ever think of. It was in California working for the local county government doing it. So California is not going away. Government's definitely not going away and same thing with it. So I'm doing that. But at the same time I was always been entrepreneurial in my life.

So I had like a newspaper out, you know, not a, not let people know the newest paper routes are now, but I would ride on my bike and throw newspapers at 5 a.m. and bang them on garage doors, waking people up. I had a graphic web. Um I had a graphic a website design company, skateboard manufacturing business, uh convenience store and a pizzeria started this all from the ground up and it was enough to quit my job. But I had extra money coming in a little bit and I bought one rental property at the time. This is 2006 when I first started investing and I remember that check that I got from my property manager. So all the expenses subtracted out the from the income. It was $317. And I thought my goodness, I need to be an investor. This is amazing. But you know how it happens. Life started getting in the way my wife and I started having Children and the career just kept on going. Now here what really shoved me catapulted me to be a real estate investor. So after my fourth child was born. I want opportunity leave. That's where the dad stays home with. The mom changes, poop diapers and all that good stuff and, you know, Bob with a baby. And so I'm off for a couple of weeks and then I go back to work and in that week I go back to work on a Friday at 3 30.

In the afternoon, I get a call from my boss's boss's boss's secretary like the top dog. And she says, Dustin, would you please come to the office? And I said sure. And I hung with the phone and I paused for a second. I thought why in the world they, they call me the office like this isn't normal and I've seen plenty of movies. Friday at 3 30 is not a good time to get called to the maid boss's office. And I started remembering a couple of months before I went at paternity leave. There were some rumors or some running going on. There could potentially be layoffs in the county, but I immediately shook that office and there's no way that's for me. So I get up and I go down the off down the hallway to my boss's office and I get down this hallway and it feels like the hallway gets longer and longer and longer because the weight of potentially losing my job is just weighing down on me. And I feel, feel like they're lead bricks. Well, I get down the hallway and I turn the corner and I see my boss's door, his door closed and I see a secretary there. Super sweet, nice old lady. And she says, Dustin, would you please have a seat? And she's kind of sheepishly grinning at me trying to console me with her eyes because she knows everything about what's going on. I know nothing about what's going on. So I go and I take my seat and I started thinking about this life that I've been this plan that people told me.

Well, if I lose my job right now, did I just waste my life doing this? And then I realized, oh my goodness, if I don't have a job, how am I going to feed my family? Does that make me a failure as a, as a father does that make me a failure as a man trying to provide for his family? Well, as I'm sitting there, my hands get all clammy, my forehead gets all sweaty because the nerves are just crushing out of me. Well, the door to my boss's office opens up and out walks a lady, a coworker of mine with a piece of paper in her hands. She's noticeably distraught, not necessarily crying, but her world has been rocked and she passes by me and my boss is Dustin. Would you please come in the office? So I get up and I go into his office and I get laid off and this is the government. Remember, nobody gets fired or laid off from the government. But I did. And the reason why I tell this story is so that you can learn what I learned. So I took that layoff notice and I went back to my desk just getting laid off. And I sat down and I realized two things. Number one, I need to get another job I need to be able to provide for my family. So I was really blessed, praise the Lord to find another job in the same county. A whole another department wasn't having issues. So check, I got that.

Now, the second thing that everybody needs to realize this is what I realized was that I need to make sure that this never ever happens to me again. I didn't make sure that nobody has the ability to, to take away my ability to feed my family. So right then and there I told myself whenever anybody would ask me the question, we always get everybody gives this question. What do you do? I would always reply. I work for the county. You know, I do technology for the county. Just I'm projecting the value that I put on myself as coming from my job. No, my value doesn't come from my job. My value comes from my God, for myself, for my family. And so right then and there I told myself every time I would always reply, I am an investor. Now it may so happen that 100% of my money comes from my job. That's now my part time job. I'm a full time investor. So fast for the story started buying property after property after property, each one making me a minimum of $250 a month in passive income. Eventually, I had 30 plus properties and I realized why am I working here? I'm wasting my life here. So the last part of the story, I walked away from my job for the very last time. It's a mile and a half walk.

I'm too frugal to paper parking. We worked at downtown. I felt like I was walking on clouds because I knew I would never ever need a job again. And everybody listening to this, you need to realize that nobody will ever what? You will never get paid what you're worth. In fact, your boss will never pay you what you are worth. And this is how you'll know this. Your boss is paying you just enough to keep you working without quitting, but not so much that keeps, that takes money out of their pocket. If you got paid with what you're worth, they'd go broke. So instead investing in real estate for me or starting businesses, investing in commercial real estate, uh syndications, land events, if you start taking your life in your own hands, so you become financially independent, then you're able to make sure that nobody's able to take your ability to feed your family. So I'll pause the story because you guys probably got plenty of questions. That's great. Um, a great story. So, uh, where you said you bought your first house in 2006, um, and then you were able to retire, uh, what year? Uh, 2017 is when I was finally able to retire.

It's 2016 to December is when I was getting my layoff notice. But, you know, a couple of weeks it was January 2017. I love that because that's practical. Yeah. And it's interesting. I mean, we, we might be the same age. I, the story is marrying my own. Uh, I retired from my day job at 37 and I think it was in 2016. Uh, I started investing. Yeah, I started investing. I bought my first house, I believe in 2003 or four. Uh, so really, really similar. Um, so you had your first house but then you said that with the, the layoff, uh, that you got, it sparked you to buy more real estate. Uh, what was the plan? How did you go about acquiring more real estate? Because that's what people will be interested in. Hey, how did you go start buying all these houses? That's a great question. And, well, I'll tell you the wrong way that I did. And so in 2006, everybody has probably seen these, I was watching TV, late at night, I didn't have anything other than a job and a couple of other things going on. But I was watching TV, late at night and when those late night infomercials came on and they said, hey, we're gonna come to your town. We have a free two hour seminar to teach you about real estate. And I was so excited.

I was like, that's great. Let me go ahead and do that. So I went to that two hour seminar. It was horrible. It was all hype, all sales pitch and they said now run to the back and it's normally $50,000 but it's $1000 today. So I was like, yeah, I ran to the back, I just got a sucker for that. So I ran to the back. Spent $1000. There was a two day seminar. All more hype and more sales pitch for an $80,000 course. 100,000. It was, it was bad. But I took what little they told me and I implement that. And the sad thing is my property manager started stealing from me within six months because they, they didn't really, I my my belief now is that they just regurgitated what other people say. Well, now I realized how to do it, that what's the wrong way, which is what happened? And I'll quickly give it the wrong way, but I give you the right way of how I then scaled the business. Now the wrong way. What the quote unquote gurus will tell you is you find a property anywhere in the country you run the numbers, which means you make sure your expenses are lower than your income from your rents by like $25. But they remember this is 2006. So saying, and you'll get appreciation, which is what you're investing for, which I'll pause this. I don't invest for appreciation.

I am literally getting generational wealth. I will give these properties to my kids. And I still make money like the homes I own. Since since 2006, I still make money. In fact, they're making me 506 107 $100 a month. Well, then I said, once you run the numbers, then you spent thousands of dollars to buy the property, then spent thousands of dollars to fix up the property and then find a tenant and then try to find a property manager after all done. Well, I did that and my property manager started stealing from me because I didn't do it the right way. In my opinion, that's just about backwards. Let me quickly give you the, the right way and show you how I scaled it because from that one property to eventually get 30 plus properties before I quit, I had to scale it fast because I wanted to get out of that job. So here's what I did. I realized that it takes not a property that is your business, which is what the gurus will tell you. It's your business owns inventory. So, here's what it looks like. If you're gonna start a convenience store, you know, it can be sort of candy bars and soda machines and all that good stuff. Well, you're not gonna sign a lease on the locations, open the door and set a box of candy bars in there on the ground.

No, you wouldn't do that. You go out of business in two seconds. What you would do though is you would build the business first. You get the gondola. Those are the shelving units that all the candy bars go on the cold storage, the countertops, the bank accounts, cash registers, insurance employees, everything in the business before you buy any inventory. Same thing with real estate investing, all types of real estate investing. We build the entire business first and then we buy a property and that property is our inventory and that's how we put it into our business. Now, what I did was once I figured out the wrong way I started implementing because remember I've always been entrepreneurial. I said, let me approach this from a business mindset if I would have hung my head and said, oh, this doesn't work. I would not be here today, but I realized it does work. I just need to figure out. So what I did was created an entire business. Had experts on the ground. I invest all over the country. I don't, I invest out of state. I love investing out of state, but I have experts on the ground. Zillow is not an expert, Redfin truly have. Those are not experts who are the experts. It's the property managers, the contractors, the roofers, the plumbers, the, the handyman, the realtors and everybody in the business before you buy any properties.

Once you have that business built, they are gonna help you to make sure you do it right. And that's how you scale the business is. You then just buy the next piece of inventory and put it into your business. Does that all make sense? Absolutely. Yeah. Yeah. I mean, do you focus on like a, a few key cities because obviously you can't have all of those, those people as part of your business, but they're advisors in, in a particular market that you say you're gonna maybe go after. Love it. Yeah. Absolutely. So, every city that I invest in, I think I'm in five cities now personally. And all my students that I coach were all over the country. But what we do is every city they go to. It's almost more like the, every county. So usually, um, one property manage will, you know, cover the entire county, but it just depends on the area. So, let's say, and here's remember, we're starting a business, you would not start a business that you could not buy any inventory for. What you would do though is you'd make sure there's inventory. So, what I do every city that I go into, I make sure that there's good inventory, the types of homes that I want to buy. And here's my suggestion, cookie cutter type homes. These are homes that everybody either wants to rent or buy three bedroom, 22 bath, 1200 square feet to 1700 square feet.

Not too small that families don't want to live there. Not too big that there's extra walls to paint and carpet and everything like that. But we make sure that there's inventory in that city from that we make sure that we're gonna make. And here's my suggestion, this is how I was able to scale my business to quit my job. I try to make sure that I'm always making $250 or more in passive income from every single property. And in doing that once I have the inventory, then I build the business. So I have all the people in the ground on the ground running the business. And here's an example of how you would know you have great right people. So let's say you do all the wrong ways that the gurus tell you, you know, eventually the last step is finding a property manager and count I kid you not. This happens all the time. I talk to investors and say I did that and I tried to call property managers and then property manager would say I won't manage that property because I'll get shot there. Well, you no longer have an asset. You have a liability. So what we do is instead of calling a property manager first and, or at last and say I have this property, would you manage it? I've already spent thousands of dollars. Instead, you say property manager, I'm looking to buy this property.

Tell me about it. Will you manage the property? How much will it rent for? What's the vacancy factor? What type of clientele would I have? Tell me more about the property. A good property manager say, oh, I know that area. In fact, I have a house two blocks away. We were trying to get $1400 for Zillow. Set $1400. We couldn't get that. We could only get $1300. That's expert information. So that's what I do every single city that I go to and invest to get back to answer your question. I build an entire business in that city of all the people that need to run my business. And what I do then is I give them systems and procedures and processes so that they run the business. I don't do anything in my business. In fact, I maybe work 30 minutes a month on all my properties. I just grab my property management statements, make sure everything looks good and then put it aside. So, so you have people in these cities that you've chosen, uh and you have property managers already established there. You have people who are finding the properties for you then, and they're, and then they sort of analyze them for you and then they ask you, OK, is this one you want, is this a, is this a home you want to buy? So I have, and a great question because as investors, there's no one way to really do anything.

And so finding properties, I don't want to find properties. I don't want to go, like you're saying, I don't want to go out and like, you know, hunt for properties. I have realtors, wholesalers, other investors, even property managers sending me deals, land or title companies. I let everybody know. Remember at the very beginning, I, I started telling everybody I'm an investor. So I tell everybody that I, I'm an investor. So all these deals come to me now I have as best I can. It just made it so simple in my business. And it usually takes me about a minute to do all the ana analysis on a property to know how much I can pay for it and how much passive income I can make and all that sort of stuff. But I have all these deals come to me because think of it like a tool belt, I have lots and lots of ways, lots of tools of ways that properties come to me from, like I said, realtors, wholesalers, other investors, you know, all run the gamut. So we, I try to do as little work as possible and have other people do the work. I love wholesalers, wholesalers are fantastic. They work their tail off and they make sure that I get what I need.

If I, they don't have what I need, then I don't buy from them, but I buy from the companies, the people that actually can make me money in passive income. I don't mind giving them, you know, commission or anything like that. But yes, I try to find lots of people to send me deals. So I, I love this because it should sound overwhelmingly familiar to everything we've talked about on the podcast. There are so many people in Tulsa that, that come up and approach us and say, how are you guys buying things in Ohio or how do you even buy a deal in Vegas or how, how are you building this deal in, in Dallas or, or something like that? And uh I mean, Dustin said it absolutely perfectly and I love that. It, it transfers over asset classes because that's the same for a house. That's the same for an apartment complex. It's the same for a shopping center. It's the same for any piece of real estate or, or almost any business. We're identifying markets and we're getting our inbox and our email and and getting all of these deals sent to us. Right. Exactly. Like you're talking about people, people know we are buyers in that market, they're finding them, they're sourcing them.

We plug it into a model and then we can go in and employ that amount of money because we built our business. Like you're saying, we went and got a local leasing agent, we went and interviewed property managers. Exactly. And then very similar, like you said, we end up uh it's a little more intensive. We handle lease renewals and some of the other things with the properties. But at the end of the day, you really are just opening a monthly report and seeing, ok, it it's a variance report. We set a budget. Here's where it should operate, here's where it's normally gonna operate. So you're looking at variances and then most of the time if you bought good things are, are pretty, pretty steady. Right? Dustin? Is it all a single family? So my bread and butter is single family, so residential. I when I call single family residential, four units and below, that's my bread and butter. I literally do it in my sleep. I literally dream like, oh, I just bought a house. Oh, wait, I woke up and so I do it all the time and I coach that. But I also because of my bread and butter, I have a, I'm blessed to have lots of cash coming in from all my properties. And so now I take that and invest in an apartment complex. I recently just got into hotels, which is a lot of fun, you know, play monopoly as a kid.

I'm like, oh, now I get in hotels so I love all asset classes and here's the great thing like I specialize in residential for, you know, some blow all over the country. But there are other awesome people that, let's say commercial buildings or multifamily or land investing or storage units. They're awesome people and it doesn't have to be where I win and you lose or somebody else loses. We can all help each other out. And so what I love to do is now no one say partner but work with other awesome investors to help them and they help me. And so I love all types of asset classes. Excellent. So um tell us a little bit about your equity structure. We talk a lot about raising money and how we raise money and, and just forming that entity and, and how to set up your offering, how to set up your returns. Are you currently doing any sort of syndications or taking on limited partners or are you just using your own money to source and fund all of these deals? Usually it's my own money, but at the same time as deals come up, I would do some sort of some sort of a syndication, not necessarily a full syndication like you see, with multifamily, you know, 203 100 unit apartment complexes where the, the, the goal is to get out in 3 to 5 years.

Now, my goal is to then get into a property with my investors. I got a laundry list of investors. I like again, I've been telling everybody for many years that I'm an investor. So everybody wants to, you know, they say, hey, I would like to mess with you. But what I would do is buy the property and then use it at like let's say syndicate, but bring all that money together and then in three or five years refinance and paid them off. So I would then own it um uh outright. Now all the residential, literally all mine. It's so simple and meaning all my money to buy these because residential for a below, it's really not that hard. There's great financing options. But here's another thing I've literally used creative financing and I counted 15 different ways to get financing to buy these properties that I don't really necessarily need, you know, anybody else, anybody else's money. I could just borrow it down a loan, private money, um uh commercial loans to um home equity loans, all these sort of sort of things. These are all just tools that we use to get whatever deal we is in front, in front of us to take that deal down. And so because of that, I just have lots of tools to make sure, hey, here's a deal that came in from somebody. Can I buy it or does it fit my criteria?

And then what type of funding can I put into that property? I love that. So, um I, I have one last talking point here. I see you have a note on starting online businesses and I've, I've heard you throughout the entire interview kind of refer to your students and some of your coaching briefly kind of walk us through how you got into that and, and what that looks like now and, and kind of what you're offering and then we'll probably close it out. Yeah, that's so much fun. So, here's the great thing. If everybody realizes if you're listening to this and you realize how much your boss is not paying your number one, you're not getting paid for your value. But at the same time, how much time you're giving to somebody else, another organization or something else. That's 40 plus hours of your life back when I was in getting your question. Absolutely. I was quitting my job and I was telling people, hey, I'm about to quit, I'll quit in like six months. And I said, well, what are you gonna do? And I said, I don't have to do anything. I own real estate. And the second question always came so fast. Well, can you show me, I'm like, yeah, sure. You know, friends and family members and coworkers and stuff. And so I'd be teaching them and I realized I enjoyed it.

The second thing I realized it was really, really hard teaching them one on one. It took a lot of time. So what I did was I wrote a book. I said, here's my outline of what I do in my business. I'll just give it to you. And then when you're ready, we'll have better questions that fit you so fast forward from there. I realized I enjoyed it. Then I had 40 plus hours of my life back and I realized, man, I really want to be able to help more people. So I started a podcast, started a youtube channel coaching and courses. And now I even started a conference. I have a conference called the Real Estate Wealth Builders Conference, all types of investing from syndications to commercials, to land investing storage units, all that good stuff. But this conference now is basically my entire audience. I bring in like at least 100 people from my audience, but I have 43 other speakers that are friends of mine that have their own podcast, their own students and everything just like me and we're all coming together to help more people out. But that's what I love is that when you have your life back, 40 plus hours of your life back, you can build businesses, get investments. And then I love to look at generational wealth like you can't give your job to your kids.

You can't do that. But what you can do, build businesses, buy real estate, buy precious metal, buy things that are tangible to then pass them down to your kids. And it just keeps making money over and over. Same, same thing with online businesses. All my online businesses. I will lit, I do literally have my kids work into my business. In fact, my daughter, she's 14, oldest daughter, she's 14. I have a podcast, my own podcast called Master Pass of Income. She edits it. She, I have her edit, I pay her fun money to, to edit the episodes. So that's the thing I love to be able to do. Bring my kids in. I have more time to spend with them because now I have the money that there's four things that we should strive to leave in our life or have in a life, the legacy of money, so we can buy whatever we want. Then the leg that leads into the legacy of time. So we can do whatever we want with our time, that legacy leads into the relationship, legacy. I'm blessed to have got 33. So the relationship I now have more time to develop into my family. The last one where I'm at now is the service legacy. Everybody should strive to get to the service legacy because I found the more people that I help invest to have great properties to rent or even just coaching them, whatever it might be, the better my life gets and the better their lives get.

And the great, great thing about this is I'm now seeing my students, I've literally, I think I've got like thousands of students now, but I'm seeing my students retire. I, it took me about 10 years to retire and, and become successful and employed. They're doing like two or three years because they're just, they're seeing what I've done and I'm helping them skip over the problems that I have the loss of money and all that sort of stuff and now they're being successful. So imagine 40 plus hours of your life back developing to yourself and your own businesses, guys, uh successfully unemployed, go check him out, get his book. Uh It's so good to hear other success stories. Each time you hear a success story you have something to rely on in your brain. It goes to work on. How do I solve my problem of becoming financially independent and great examples like Dustin's will help you, Dustin. Thank you so much for coming on the show today, man. Yeah, we're, you know, congrats on the success for sure. Thanks guys. Hey, I, I do have a free course. I just love to give out. Just get people started. Do you mind if I share that with everybody? Absolutely awesome. So I have a free course, literally walk you through everything, the blueprint of everything and people have actually invested with just that.

If you text the word rental, you're already on your phone. Listen to this text the word rental. RE NTA L 233777. Very simple rental to 33777. I'll show you, I'll give it to you. Show you how to find an area in the country, anywhere to invest, how to build the business, how to scale the business to quit your job. You can even go to master passive income dot com forward slash free. Course, word for slash free course, I'll give it to you. You can even find me on my podcast, the Master Passive Income podcast. Love. It's really a solo show. I just give out all this content, just try to give it out for free. But then also if you want to find me on Instagram, I like Instagram. So you can D me DM me on there. I'm the Dustin Heer. So the Dustin Heiner and guys, I'm not that arrogant. It's the only handle I could come up with, but find me on the Dustin Heiner and um I'll, I love helping people out. Awesome, man. That's great. Awesome. Thank you so much, Dustin and everyone else. We will catch you next week on how to invest in commercial real estate.

Episode #096 - "Successfully Unemployed" with Special Guest Dustin Heiner!
Episode #096 - "Successfully Unemployed" with Special Guest Dustin Heiner!
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