Quick Start Guide: Lesson #1
Hey, welcome friends. So you are now a member of the Russ Whitney membership site. And our site and these trainings are - they start real estate centric because a lot of you are interested in real estate investing. However you are being misled when you watching HGTV. Not that they're not fun shows and good shows, but they're meant to sell network advertising, not train you on real real estate investing. And our membership site, and if your a member now you've gone through it, two things; You're going to see there's hundreds and hundreds of audios, there's hundreds of videos, hours and hours of training. Obviously you can't consume that all at once. But what I want us to do is start you at the beginning today and I'm going to start you with, this is what we call our Quick Start Guide. And I'm going to just give you an idea on the content.
If you had to get it, if you were to get it in hard copy, you would have a complete manual here. There is two hours of audio from me in here. And then there's some confidential reports as well. Very comprehensive course. Now, let me tell you why I put this particular course together. We were going to actually sell this or offer this on an infomercial. And so what I wanted to do was reduce the price as low as I could reduce it and take all the fluff and all the bull crap out of it, you know, and get to the meat of the matter. And the quickest way I can say that is this method I'm going to show you that we've done for years. Okay? And it is how to get your first property under contract within three days or less.
Now, let me clarify that because when I say in three days or less, if I were to go out right now is I know how to make the phone calls, cut through the crap, uh, see where the buyer is, whether they're willing to hold the financing, little or no money down. So in other words, I can cut through the crap. What am I going to do is show you how to do that and we're going to do this in increments. Now I have here, just want to show you, they also have an outline. I want to keep this in order and not be all over the board. This probably this part right here that you could see that first part, I can probably take two or three hours on that part. So we want to do this in shorter increments so you're not stuck, you know, for hours, hours without being able to get out of it.
I'd like you to be able to get in and out and do it at your leisure. So this is based on a training we call our millionaire U training. And the way this training got started was years ago I would travel around doing the seminars on real estate investing and always get people asking me, oh well how many of your people are really successful? It's hard to say and I'll tell you why it's hard to say, I think what their thing is or how many of you are students really become a millionaires. Well that that's hard to track. And that's not the purpose of these trainings, these trainings are designed to take you at your pace. And let me just give you an example. I've had many people come through the training starting in real estate and, and we're talking over 20 or 25 years now.
It's not new at this and I know exactly what you need to get you where you want to go. But, when I came up with my Inner Voice book, which is on the membership site as well, we did what we call it influencer meetings. So we did these all over, not all over the country. Beverly Hills, we did them in specific spots. One in Manhattan, New York, the other one is down in San Diego. And we had high end people come in because Inner Voice is more of a personal development and a spiritual program. However, I'll tell you this is not a religious book, but it doesn't, it doesn't, it doesn't conflict with any religion. All it does is enhance. It's not a book about how to make money and success, but if everything about money and success and I, and I'll tell you, usually when you go out to somebody how to make money, seminars, all about money, money, money, money, money, that's not what stops people most of the time from success.
What stops them is relationship problems, work problems, money problems, kid problems, fear, doubt, anxiety, frustration. Those are what stopped. Those are the things that we really have to work on getting rid of and there's a step by step plan for that as well. Once we get their head right, the rest comes automatically. So I just want you understand there are, there is a whole design for life success in our membership site. A not just a real estate strategy. However, we've got to start somewhere. So I'm going to start with this and, and know it's a Quick Start Guide. You should have that lit up on your membership site. And um, I think that if I take you through this, there'll be some ad libing. You know, your manual is your manual, but I'm going to take and go further on that. So, uh, let's start with this and the training in the first training.
First question is, how do I get started investing in real estate? How do I make enough money to live the life I've always dreamed of? And these are probably the biggest question. How do I do something bigger and better? Now, some of you in our membership site are beginners or intermediate, having even bought your first property yet, some may have three to five properties. Some of you might be a doctor, a lawyer, or what have you. Maybe you don't have the time for investing. Well, we also have had done for you program where we can invest in properties with us as well. But let's address these first two. How do I get started in real estate investing? How do I make enough money to live the life I've always dreamed of? Well let's start with this. First of all, weve got to set a goal. All right?
So the first goal would be financial independence. When you go out to a seminar, you read a book and they talk about how you can become a millionaire and you go out and you buy your first duplex that is so far away from a millionaire. I think it discourages people because it's true. It's just not how it really works in the real world. And so, so let's start with what should my first goal, my first goal that I achieved, achieved in, really realized that it was a goal as with many of our students all over the country, all over the world for that matter. I achieved financial independence at 23 years old. I started at 20 broke, no money, no credit, and I didn't have bad credit. I just didn't have any. I went out and I, first of all I read a book and the book said, if you want to be successful in real estate, here's how you do it.
You've got to go to an area of town and look for properties that are in rundown, beat up shape, not like hgtv though, where you're ripping out walls. or you going to put on new roofs or foundation issues? You want the least amount of work that's going to give you the most amount of cosmetic improvement. And so, so you're looking for paint, clean, clean up, maybe carpet, putting in a new carpet or countertop or something like that. Nothing major, especially as a beginner. Now we have other trainings from major rehab work as you get more experienced, but the, this is for the beginner, the intermediate, and even a veteran you're going to learn a lot from this. All right, so there's three kinds of properties you can buy. There's low income, middle income and upper income properties. Now, in the low or moderate income, I'm not talking about where you've got to collect your rent with a gun.
We're looking for a working area of town. Where does the sheet rockers and the carpenters, the bartenders, uh, the police, the policemen the nurse. Where do they live? And what we're looking for is the worst looking property on that block. However, all we want, again, is cosmetic improvements, and we'll get into more detail with that as we go on. Now, low income, you're going to be able to buy them for less than market value. And there's a logical reason for that because they're in run down, beat up shape. Okay? And so now we do is we paint, we cleaned up, we force the value of the via improvements. This is called forced appreciation. And there when we're not sitting around hoping the market goes up, we're making the market go up on that property. I hope that's making sense to you.
And then the next thing we're gonna do is we're going to figure out whether or not the property makes money or not before we have a buy it. So where we want to start as multi-unit residential properties, not single family houses. Now if there's a deal that comes along on a single family house and it's a great deal and you can make money, fine. However, when you're buying a duplex, what we're not, what we don't want to do is get stuck in the Rut of I buy this property, I got to resell it and flip it fast because if it doesn't sell now you got cost and expense in it. If you're not renting it, what to buy is start with a duplex or triplex or a four unit building. Okay, and so we're still going to buy cosmetic distress. You should be able to buy that 20 to 30% below value because of the rundown beat up shape also in a of a cosmetically distressed property.
You have a much better chance of getting what we call "seller financing". Now you don't have to use a bank or a mortgage broker, you're asking the seller to hold the financing and in many cases a bank isn't going to want to finance a run down beat up property inless you have contracting experience and so then the seller wants to sell it, he's got to hold the financing. That means you can come up with much less of a down payment. A, the sellar holds the financing. So instead of paying the bank, you're, you're basically paying the seller. That is the best way to amass the most amount of property and cashflow in the least amount of time. So we want duplex, triplex, we want to four unit, 10 unit growing to a 20 unit building. Now here's the mathematical formula we're going to do is we're going to add up the rents.
What are the rents now and what are the projected rents, once I fixed the property up? So the bottom line is this. Let's assume you have a duplex and each side rents for 1000 bucks, okay, now you've got 2000 in cashflow. There's a whole formula in this guide on the membership site for you to follow. We're going to do now is then we deduct, the projected expenses, taxes, insurance, water and sewer, maintenance, vacancy ratio, which in low moderate income is usually around 5%. For your area if you want to be sure, simply go to the, the board of realtors and you should be able to get what the average unit is vacant for in a year. So generally about 5%. Okay. Now what we want to do is we want to hit up the rest of deduct the expenses and see if there's positive cashflow left.
Alright. Alright. Um, so folks, I want to keep these, you know, tight so you can grasp the info. I said I want to go much more than 10 or 15 minutes on these trainings. The other thing I'd like to mention to you, you know, it's nice that we can just talk to each other right here. The other thing I'd like to mention to you is this, if you're missing something or there's something you think I could add to help you out, simply write email to support at Russwhitney.com, email@example.com. Shoot us your questions. If you have any tips on how you think this training might be better, shoot those to firstname.lastname@example.org as well. All right, so now, now we're on to duplex, triplex. Now let's just assume you've got a property, uh, that, that you buy.
You add up the rents, you deduct the expenses, and there's $80 a month in positive cash flow. Well, that's $1,000 a year obviously. So what we do is we take the downpayment and, Oh, I'm sorry, we take the cash flow divided into the down payment. Okay? Again, it's simple form is right in the manual on your membership site. And then we see the rate of return, were looking for at least a 20% cash on cash return. Now there are four other, there are four other returns in real estate. So you have depreciation, which we'll go over in a future training, appreciation, how much the property goes up in value. You have your cashflow return and then you have forced appreciation. So if I buy, let's say I buy a duplex for, call it $100,000, and I can put in $5,000 worth of paint cleanup at jazz and make it worth 125,000 bucks.
There's another 25 or 30%. So where I'm thinking I'm getting a 20% return. When you add in those other returns, which you get automatically, you're really at about a hundred percent return on your money. Now, in this series, we'll cover compounding as well. What is compounded, compounding is the most critical, important, formula that you need to know in order to hit millionaire status. How to compound your returns. All right? So we now know we want to be multi-unit residential properties. Oh, let's set a goal for financial independence. Okay. That's our first goal now. So how, what is the formula need to get where I gotta go? I told you earlier, I hit financial independence at 22 years after I started without really knowing what I was doing. There was no step by step training like we're doing right here.
And so financial independence, it means this. I had enough money coming in from my rents to pay my mortgage payment, my car payment, put food on the table for my family and have enough money leftover without having to go to a full time job. So the first thing I want to do is I want to give up my job. You know, you don't want to give up a bird-the-hand for one that may or may not be in the bush. You want to do this part time and, and you can make plenty of progress doing it part time while you're keeping your job that way you stay safe. So, the first step would be how do I get enough money coming in with net rents, cash rents that come in every single month so I can pay all my bills and don't have to go to the job.
Now, you know, in some seminars, so a little different because if I had you write in a room, I could be asking you questions and I could read your energy and so forth. Um, we're just gonna have to do it. How we do it here. If I was sitting in a room and I said, if I could show you a way where you can get $3,000 to $5,000 a month coming in every month that you knew you could count on three to 5,000 every month, you knew you could count on how many people would be able to quit their jobs. And a majority of the room would raise their hand and say, yeah, I could do it with that. Now I'm not saying that's all the money you want, you know, you want to have bigger goals probably, but that's where we start.
Cause that's achievable. That's believable. And you know, you know, in the great book, Think & Grow Rich, Napoleon says this, and I love these cliches that you're going to hear from me throughout these trainings. "Whatever the mind can conceive and believe it can achieve". So if in your mind you see yourself with three or four duplexes, we could buy them for little or no money down. Now you're making cash flow. If you could see, wow, yeah, I think I could do that, then you can do that. God would never put that thought in your brain if you couldn't achieve it. And I can tell you there's probably many people, there are many people who have gone to our facebook ad. They click on it and they see me talking about this tremendous value of $50,000 worth of training for $29 a month. And of course the first thing they're thinking is, oh, that's way too good to be true.
Well, it's not to good to be true. The reason I can do that is we've created all these trainings over the years and I elected to get out of the seminar business. And the reason is it's expensive. You've got to put people on a plane, you got to lock down a hotel, a ballroom. We got to pay for their rooms while they're there. It's way expensive. And that's where you go to the, these three day trainings out there are, these are these one day trainings and you get two hours and then they sell you into a high price, three day seminar. Then when you get to that three day, they try to sell you into $10,000 to $50,000. Well, you know what, I invented that template years ago. And it's antiquated. You know, this whole industry, the whole training industry in personal development, real estate, invested in building a business, scaling a business, all the things that we're going to discuss throughout these trainings I created most of it.
And this industry follows me, and I'm not bragging, but I have a very big name in the industry that's cause we delivered. And so what, what I'm saying now is we don't have to charge people 10 to 50 grand. I can deliver this right like I am here. You can, you can attend this training on your mobile phone. You're attending this training in your living room, which is why I can do it for $29 for you. And I've had many of our members, I'm gonna tell you right now, for many of our members, call in or write in to support@RussWhitney.com saying, holy crap, I can't believe I got on this site, I learned more in listening to three hours of your audios that I have in five seminars spending thousands of dollars. That's why I want to start you with a step by step program.
So the bittable piece we need to have right here is we want multi-unit residential. That's the easiest to buy. And why? Well, this country was built on home ownership and property ownership and 60, probably 66, 67% of the u s owns their own home. So if you get an edge and generally the, the, the biggest investment you'll ever make in your life, you buy it for $100,000 and you pay it off over 20 or 30 years and now it's worth 300 grand. You sell it, that 300,000 thousand is probably the biggest amount of amount of money you'll ever put your hands on in a lifetime. And so, if you could buy one, why not two, why not three? It's simply a matter of learning wealth strategies that the rich people use. And one of the things you can see here, I'm very big on that's feeding your mind.
That's what you're doing right now. Feeding your mind is like feeding your body. You eat everyday because if you don't eat, you're starving and you'll dehydrate. Now if you, if you eat bad things or bad things happen to your body, what about the mind? What if you are listening to all the negative people who say, Oh, you can't do it. It can't be done. Oh, that's just a scheme that doesn't work well. Well that's just not true. Because I can point you to hundreds of thousands of people who have gone through our training and have achieved incredible levels of success. Let me, let me just tell you a story about a couple of them. One of them is a guy named Mike Filsaime, if you've ever heard of 'em, but what is his, uh, Webinar Jam, Webinar Jam, thats big selling all over - makes millions of dollars with it.
Well, he came to a real estate seminar one of my 20 years ago and he went out, he bought a duplex triplex or what have you, like I'm telling you to do. And it made money for him, but he realized that he had more interest in the internet marketing stuff or whatever it was. And so what he got from the training that we did just like you will, is he got confidence because when you buy a duplex, you're going to deal with the seller. You're going to talk to some bankers, whether you use one or not. You know, you always want to opt for seller financing. You have to learn how to do a p and l profit and loss. They add up rents and deduct expenses. See if there's money leftover. That's the formula for figuring out whether you can make money on a property or not before you ever buy it.
Well, that's eighth grade math. That's not too difficult. Remember I told you before, the real estate part is simple, not easy, making money, simple, not easy. What generally screws people up is the fear of failure. Mom, dad, brother, sister, preach, teacher tell you can't do it, can't be done. That's why it's incredible. Feeding the mind is like feeding the bodies. You want to hang around with people who are successful. People have made it. When I went out after my first three weeks and I made $11,000 on a real estate deal, there was a guy that I was working with, Harry Morgan, another story and I was back then negative. I grew up in a blue collar background, so I wasn't the epitome of positivity and energy. And I remember him telling me, you know, when I was bragging to him about me quitting my job, you know, and I'm financially independant with real estate.
You know what he told me, he said, Russ. Son, he called me son. I was a kid, he was 55 years old. He said, son, you got a built in governor. I said, a built in governor. Now we all know a governor on a car slows it down or it stops it. And he said, yeah, he said, you, you're just a negative your down. You have no positive energy. And that threw me because I wanted to be a millionaire badly. And I didn't, I didn't want to be a millionaire necessarily for the money. Of course I wanted the money. I wanted to show everybody who said I was nobody and nothing that I was somebody and I thought 1 million bucks would do that. And I'll tell you what, if I did not learn the principles in Inner Voice, if I did not start feeding my mind with good positive things.
I'd probably stopped right, right at that place where I had quit my job and it was less, way less than $3,000 a month. By the way, today, today we have a whole different program for you. So financial independence is going to be the first thing that I'm shooting for with you. This is now we're starting to run a little long. I don't want to do too much. I want this to be bitable pieces for you. All right? So setting a goal, financial independence. The next thing is determine a strategy. Invest in multi-unit residential properties that are cosmetically distressed. Those are the ones that'll generate income month after month. So I can tell you right now, if I'm in Europe, those tenants still pay the rents every single month when they pay the rent. That's paying the principle down every single month. So I owe less and less.
or you all less and less on that property? You're getting the tax benefit out of that property. You don't have to be there eight hours a day. Once the property is up and running in good shape and rented, you may want to check on it once a week you get five, six, or seven. You, you can put it to a management company and let the management company, manage it. As long as you've got the cashflow formula set, the way I tell you how to set it. All right. follow this system. Now this, this is the first segment of, I don't know how many, we may do 30 of these things. Now in the manual, if you want to, if you want to study ahead in a manner which is on the membership site, you can go ahead if you want to study up a little in advance.
So you're ready for the next training. You want to find the best properties which to invest in. That's in the first chapter. How to fund your investments. How do you get to seller financing? How do you bring investors in? You know, when I bought my first three or four properties, I ran out of money. And so there was a property that came up for sale that was a six unit building. It was all run down, beat up in an area where I was buying the other properties and the owner lived out of state. And so the property is getting more and more rundown. What will I found the property owner's name on the tax rolls and I called him and asked him if he's interested in selling. He said yes, and I explained that, didn't have a lot of money, but I had a couple of other properties that I had already fixed up and I asked him would he be interested in me buying.
Okay, at a higher price, but I would earn my 50% in equity by doing all the work. I'd managed the properties, I do all the cosmetic improvements. Now I'm not handy. I don't do plumbing work. I don't do electric work or things like that. But I can paint, I can clean, you know, I, I can do the landscaping work. Now I don't do that anymore. Obviously, you know, today I'm into multimillion dollar deals, which we'll get into further on in the training. But I did all that initially it and it just made me that much more money. If you're not handy, you don't want to paint and clean up, that's up to you. But I think it's a good way to start because that what you learned how to manage the people who are doing the fix up on your property.
All right. And then how to fix the properties with minimal effort and fill them up at a healthy profit. So you can go and read a little more ahead in this, in the manual on that if you want, which is on the membership site. And, I think that's enough right now. I don't want to boggle your brain was too much Bologna here and confuse you. So, we're going to end this and then I'm going to prepare for the next training. So stay tuned, watch your inbox and watch the membership site for more info on the next training.