In episode 23 of Networking with Michelle, Michelle Ngome interviews Dr. Matt Motil on teaching us how to be real estate badasses. He gives his story how he went from engineer to real estate agent and investor.
Michelle Ngome is a Connection Strategist who helps professionals click with others online and offline so they can benefit from more opportunities, more clients, more influence and more money.
Her vision is to be a generous connector that people may have the relationships and resources they need to achieve their success.
“Success is nothing more than a few simple disciplines practiced everyday…”
Let’s get started…
Michelle Gnome “Networking with Michelle” Episode 23 with Dr. Matt Motil
1. How Did You Get Started?
Dr. Matt Motil received a mechanical engineering degree at the University of Toledo.
When he was a student, he read the book Rich Dad, Poor Dad. This was almost like the gateway drug for real estate investing.
A majority of the people Matt talked to got started in the same way.
It gave a message on how you are able to live the life you wanted to while building massive wealth and passive income by leveraging real estate.
This got him into reading more and becoming more interested in real estate investing. He loved the idea of owning property, and owning something tangible.
He ended up in construction like his dad, and always did real estate as a side hustle.
Matt started with buying houses that needed work, would fix them up, and then sell them.
He created a concept called “liveNflip,” where he would buy the property, live in it, fix it up, and then sell it in 1-2 years for profit. Matt would then roll the equity into a new property. This worked successfully until the market crash in 2008.
2. What Was the Time Frame That You Started Project Management, LiveNFlip, etc. Up to 2008?
Matt graduated with a mechanical engineering degree in 2002.
He bought his first house within 9 months of graduating in the St. Louis Area.
He did it with FHA, which allows you to put very little amount down.
3. Speak Upon How Important it is to Save Up Money and the Importance of Cash Flow..
There’s two ways to do save up money.
The first being, buying either a multifamily or single family home that needs work and you do the liveNflip. You are able to do this with using owner occupant financing.
Cash reserves are super important! If you plan on going to a property that needs work, you are going to need the cash reserves to cover the rehab.
Or… the FHA 203K Loan.
There is a FHA 203K loan program, which is basically renovation loans that are government sponsored and/or insured.
You have to put 3% down of the overall purchase price. Then you get contractors in who will provide a quote. The lender will give you money to cover the rehab. You are allowed to borrow all of the money for the purchase price and rehab with only having to put 3% of the total down.
So say there’s $30K of rehab, you would only spend $1,000 out of pocket.
The requirements include the contractors have to be 203K certified and you must stay in the property for at least a year, and you can only have 1 FHA loan at a time.
To avoid only having 1 FHA loan at time, you must get a refinance loan on the original loan, and then put it into a conventional mortgage.
4. When it Comes to Real Estate When Do You Officially Make This a Business? Do you get an LLC?
Dr. Matt Motil’s approach to any business opportunity is go all in.
If you want to get an LLC, you need to run your business like an LLC. You miss out on the asset advantages that gives you asset protection.
For personal, a monster insurance policy.
5. How Many Properties Do You Currently Own?
Dr. Matt Motil currently owns 20 properties.
6. What’s Your Take On AirBnB and Buying a Rental Specifically for AirBnB?
Matt believes if its done the right way, it can be incredibly lucrative.
He says you need to factor in 20% vacancy loss (based on his market), which means 20% of the year there will be vacancy in the property.
Short term rentals run like hotels, so you need to factor in cleaning each rental after each stay.
Matt hosted a webinar with Brian Page about using other people’s properties to make monthly cashflow with the AirBnB model. Click here to check it out!
7. Thoughts On Tenants, and Background Checks…
Matt recommends doing three things before choosing whether or not you have a “good” tenant…
- Do a credit check
- Do an eviction check
- Do a background check
It varies it every state.
If you have a tenant that knows the eviction process, it can really hurt you.
As for the credit check, it helps you see the stuff the tenant didn’t tell you on their application.
8. Tell Me About Your Book…
Dr. Matt Motil wrote a book because he felt like it was his own personal journey, and thought other people could find some value in it. It’s basically “his story.”
He mentions while doing his undergrad, he felt this momentum of “taking over the world..”
When he became an employee, he soon realized that no one cares what you did in college and no one cares what you think. You just get plugged in and it took away that momentum.
He started thinking maybe he would never do the things he wanted to do. He felt like an outcast.
When Matt was 30, he was diagnosed with cancer, and it truly changed his life.
In that time, he figured out he was a horrible employee, and needs to become his own boss.
He coined the concept, “middle-class trap,” where he felt like he couldn’t get out of debt (student loans, car payment, mortgage, etc.) and it held him back from doing what he wanted to do. He was forced to stay in a job he hated, just to survive!
He felt he couldn’t switch careers, but eventually overcame the middle-class trap.
9. How Do You Define a Closet Entrepreneur?
Matt defines a closest entrepreneur as anybody who would sit there and think they aren’t satisfied with being an employee.
Someone who thought something was wrong with them and that’s why they weren’t satisfied.
Someone who knows deep down their life hasn’t reached it’s potential yet.
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