Alan Corey (00:04:10):
And so the way to get on reality TV is, honestly, if they’re casting reality TV, they come to the comedy clubs to cast the men, and they go to the modeling agencies to cast the women. At least back when I was doing this about 13, 15 years ago. And so they knew we would make good TV. We would be funny, we’d be willing to be engaged, and we would talk, and then the girls looked pretty. That was the formula when I was bopping around to the six or seven different reality TV shows that I got on. And so that was great. I got on TV, but then what I realized is you don’t get paid to be on reality TV, so you have to have a product with you. Which is why every… Like the real housewives of whatever city, they’re always selling a cookbook, or fashion line, or some sort of alcoholic beverage, or a record.

Alan Corey (00:04:57):
That’s how you make your money. You’re basically getting a commercial on network TV, I was like, “Oh, I need to get a product if I’m going to keep doing this, and also I need to leave my day job.” Because I wasn’t getting any sleep, or taking all my vacation days to be on reality TV. So all of this was a winding path to saying, “Well, hey, if I start investing in real estate, I could be a landlord, I would have some passive income. I could leave my day job, and I could focus on comedy, or focus on reality TV.” And what happened was, once I made that mental switch, and I bought a few properties, I was like, “Wait a minute, I don’t care about comedy. I don’t care about reality TV. I really love this real estate stuff, and it pays way better.” And so then I went all-in on real estate, and that’s led to three book deals at this point.

Robert Leonard (00:05:45):
How did you go from being a comedian and the reality TV shows to real estate? What was the connection there? Did you find a book? Did you stumble on BiggerPockets? Did you read Rich Dad Poor Dad? What was the connection to real estate?

Alan Corey (00:05:58):
I was in New York City. I was living in the projects. Spanish Harlem projects. The only person there that didn’t speak Spanish, but it was the cheapest place I could find. And it was an illegal sublet renting a bedroom from some roommates that were there. But everywhere I walked around New York, it was like people are in fancy cars, people are dining in these awesome restaurants, wearing the nice suits as I was walking around. And I was like, “How do I get to that? How do I get there? What am I missing?” Because I came from the suburbs, and I’ve never been in a really big city. And I thought all I had to do was go to college, and I’d make a lot of money. And I graduated college and I was working a $40,000 job, tech support during the day.

Alan Corey (00:06:39):
And so I just devoured every book I could. This was 2000, 2001, before the YouTube, and podcasts, and all that stuff. So I literally just went to the library, got every single book in financial planning, and investments, and real estate, stocks, everything. Anything that had anything in the business section and the investing section. I was like, “I’m going to learn this stuff. I don’t have a mentor. I don’t have any rich person in my life. I’ve never had that person, so I’ll just have to teach myself.” And I just devoured every book. And yes, Rich Dad, Poor Dad was one of them. But I also read like 100 of them.

Alan Corey (00:07:13):
But what stuck with me was, okay, I can invest in stocks. And I don’t have much control. It’s like, yeah, I should be doing this, and 401k, and IRA. I can get some tax savings. But at the end of the day, I can’t go into a CEO’s office and say, “Hey, fire this person and change this in your product.” I had no control. Just like at my day job, I felt like I didn’t have any control. Someone was controlling my income, I could only work so hard, there was no loyalty. But with real estate, I had control of everything. I could purchase it. I get to control the renovations. I get to control the tenants who I want to allow in there or not, to some extent. When I want to sell it, how much I want to rent it for.

Alan Corey (00:07:55):
I was in control of everything. And that’s like, “Okay. That’s it. If I could just control everything, then I feel comfortable investing in it, and putting a lot of money into it because it’s going to be my time and money.” And it just made sense. I had lived in a house, had lived in an apartment. I know what that’s like, I know what people expect. They just want something safe and comforting. And so I was like, “I can do that.” They’re like, “Every landlord I’ve ever had in my life was a complete idiot.” And I was like, “That’s the bar I have to hit. I can hit that bar.” Just it’ll take a few books, and then I’ll wing it, and no one will know that I’m winging it, because every other landlord I’ve had is an idiot.

Alan Corey (00:08:29):
And so from there, I came up with a plan, and I said, “If I could just buy one property a year for five years in a row, I would have enough money to replace my day job.” And so I had an exit plan at 22, I was like, “I’m going to leave my day job at 27. All I need to do is five years, five properties. If I’m cash flowing two, 300 bucks on each of these properties that’ll be what I was getting paid at work after taxes.” And so that that became my plan and I went all in on that. And then I was like, “Then I can focus on comedy, then I can focus on TV.” And I was like, “Well, wait, no, no, I just want to focus on real estate.” And now we’re here talking on your podcast.

Robert Leonard (00:09:07):
You mentioned that you were in New York City. You saw all these people in these fancy restaurants, fancy cars, having nice houses or apartments in these big skyscrapers, did you see those wealthy people and then realize that they were in real estate, or some of them, or a lot of them were in real estate, and so that gave you the itch to read a little bit about real estate when you got to that library? Or was it just literally, that investing section at the library had some real estate books, and you just got into it, and it made sense? Or how was that?

Alan Corey (00:09:36):
Yeah. No. I mean everyone that I asked what they did, they were in hedge funds, and Wall Street investing. Those were the wealthy people that I would be like, “What do you do for a living?” And then I’d look into that and be like, “Oh, I’ve got to go to Ivy League college. I’ve got to be super connected through private schools and high schools that I didn’t go to. I need to have grown up in New York or Connecticut.” And I didn’t do any of those things. And so I just skipped over that, and was like, “I don’t have that background. I don’t have that privilege.” And then with stocks, it was like, “Okay, this makes sense. I can be a retail stock trader, and make my own trades. But again, I’m not in complete control.”

Alan Corey (00:10:14):
But real estate, I didn’t need any education, formal education. I didn’t need any networking, I didn’t need any license. I wasn’t a broker or anything, I was just an investor. And so the bar of entry was so low, I was like, “I have to do this.” I was like, “I can’t do any of these other huge wealth creation type of occupations. This is all I’ve got, and so let’s make this work.”

Robert Leonard (00:10:39):
But I feel like there may be an elephant in the room here, and that is, you didn’t have any money. So how do you invest in real estate? With the stock market, you’re right, you don’t have control, but you could go buy a share of a company for $10, or $20, or $50, or whatever. And now you’re already an investor. Whereas with real estate, you’re right, you don’t have all these… It’s a low barrier to entry, like you said, but it takes more money typically than a stock does. So what did you do about getting into real estate with no money?

Alan Corey (00:11:07):
So this was my first book A Million Bucks by 30. I went extreme on my savings. And I don’t necessarily recommend this for everyone, but at the time I had this goal, I wanted to have a million bucks by 30. I’m just going to do it. And because I didn’t have that high income, I had to save as much as I could from my $40,000 salary, so that I could go invest it. And so what I did was while I was living in Harlem projects paying 400 bucks a month in rent, which everyone else, all my friends in New York, the cheapest they were paying was maybe 1,200 bucks. So I was already cutting down there. I took a bus everywhere, and a subway pass. I never took a taxi cab, everyone else was doing that. I ate way too many ramen noodles, because I could buy them in bulk at the bodega for 13 cents each. And that was my lunch.

Alan Corey (00:11:52):
I drank water when I went out with my friends instead of shots and stuff like that. But I still partook in those things. I still went to the birthday parties, and the events and stuff. But also I was performing in the clubs most nights. So a lot of the entertainment, I was providing entertainment, rather than spending money on being entertained. But that was my nightlife, and that was my scene. And all my friends were comedians who don’t have money either a lot of times too. So I just went really, really extreme in my savings. And basically, I was able to save 61% of my income. And what I told myself was, “I’m going to put all these savings…” I went to my HR at my day job, and I said, “Put 50% of my salary into this bank account that’s across town in Manhattan.” I don’t have a bank card there. This is before all the online stuff, so I had to physically be there.

Alan Corey (00:12:41):
And then I say take 50% and put it in this account, which is my daily spending account. But also from that 50% take out money for automatic withdrawals, for the 401k, and the IRA, and everything like that. So I was living off 19% of that $40,000 salary at the end of the day. And what I told myself is, “I’m just going to live, spend the money that it’s in my accessible account.” That was it. I just basically forced myself in some sort of small level of poverty. And I said, “At January 1st of every single year, I’m going to walk across town to that other bank, see how much money I’ve been able to save. And however amount that is, that’s my down payment on a real estate property.” So if there was $5,000, then I got to find a way to spend $5,000. If there was $15,000, then I would just spend $15,000.

Alan Corey (00:13:31):
That first year, after my first year of extreme saving, living below my means. It didn’t feel like I was living below my means because it was just, this is what’s in my checking account. I walked in January 1st, it was $10,000. And I was like, “Great.” $10,000, that’s 10% on $100,000 property. Even back in 2001, there was no properties for $100,000. But I didn’t give up, I was just looking, I was scouring websites. And eventually, I found one apartment in Brooklyn. I had never been in Brooklyn before, and this was before anyone was interested in going to Brooklyn. And it was listed for $110,000. I went and I just decided I’m going to buy this property no matter what. This is the only thing I’ve close to a 10% down payment on.

Alan Corey (00:14:12):
Put in an offer of $100,000, they ignored it. Followed up two weeks later, put it off for $100,000, they ignored it. Followed up two more weeks later. I said guys, “Let’s make this work. Here is a $100,000 offer.” And finally, they accepted it. And from there that was my entry into real estate. And it was house hacking, it was a one-bedroom apartment. I moved in, I took this very heavy curtain, and basically siphoned off the living room, and called that a second bedroom. Got a roommate to pay to live in that bedroom, which basically covered my mortgage payment. And I just stayed on that same track. Whatever I could save in that hard-to-reach… And it’s even hard to reach now because I was living in Brooklyn and this bank was still in Manhattan.

Alan Corey (00:14:57):
But this was year one, and year two, I’m going to do the same thing. So year two, I was able to save a little bit more because I wasn’t paying mortgage or rent, and I had $15,000. And so I was like, “Okay. Well, what can I go buy for $15,000.” And in my neighborhood, I walked down the street, and there was this boarded-up duplex for sale. And it was $450,000, and I was going to try to buy it with a primary residence loan. And at the time, the products have changed now, but at the time, they’re like, “Okay. We can do this for 10% down.” But I only had $15,000. So I created this spreadsheet, and I was like, “Guys, all I needed is $30,000.” And I went to my friends, I went to my family. And I said, “Here is this spreadsheet. If I can buy this house, I can rent this room for $500, I can rent this room for $500, I can rent this for $500.”

Alan Corey (00:15:48):
And it was basically a six-bedroom house because it was a three-bedroom duplex and a three-bedroom duplex. And I just presented the spreadsheet to all my friends who basically had those good jobs. And I was like, “I just need to borrow $5,000. I need to borrow $5,000.” And I went to six friends, got $5,000 each, and I presented them this plan on a spreadsheet. I didn’t know what I was doing. I was just like, “Guys, this makes sense. I want to borrow $5,000 from you, but I’m going to pay you back $7,000 in a year and a half, just look at these numbers.” And they all took a chance on me, thankfully. I don’t know why, I think the math convinced them. And that’s exactly what happened. I paid them all back within a year and a half. They got 50% return on their money. And then from there, I had all my bills paid. I also moved into one of the… I moved out of my Brooklyn apartment, and moved into the duplex, and then… We called it the house of clowns. I had five roommate comedians.

Alan Corey (00:16:39):
And from there I was, pretty much, you would call that now, today, lean FIRE. The FIRE movement didn’t exist back in 2001, 2002. But FIRE stands for financially independent retire early. And that’s basically, you’ve reached the point where you can live off your savings, or live off your income indefinitely. And I hit that point, and it was great because then I can leave my day job. But what I realized is, “Wait, I want to do this again. I want to buy my third property in year three, and I need to have a day job. I need to have some sort of employment in order to get approved for the mortgage.” So I actually kept my day job for another four or five years, not because I needed the money, but I needed to have employment in order to get approved, and I just kept roller coasting on there. And from now I’ve got over 200 properties, and I’ve just never stopped. So instead of buying one a year, I’m buying 10 a month kind of thing.

Robert Leonard (00:17:32):
How did you plan to pay those people back?

Alan Corey (00:17:34):
The rent itself. The numbers were like I said here, what was it? Like 600. I was basically making $3,000 rental income on that house, my mortgage payment was going to be about $2,200 or something. I don’t know the exact numbers, it’s in the book. But basically, I was like, “There’s an $800 profit right there.” $800 profit, plus my day job income, I can combine this all and pay everyone back. So the house, the duplex, paid them back. I didn’t have to come out of pocket, the income that it generated paid everyone back faster than I thought. And then I just went from there.

Robert Leonard (00:18:10):
So did you have to use any of your W2 income to help fund some of that, or was the 800 a month in profit enough to cover it?

Alan Corey (00:18:16):
If we’re going back 15 years, I want to say that I might have gotten a $5,000 bonus at work, or I was able to raise the rent on my Brooklyn apartment, and get more than what I was paying on that mortgage there. But I know I had a plan going in that I’d pay them all back within three years, and I ended up paying them all back in a year and a half. So I paid ahead of schedule. But it was one of those things where I wasn’t worried, because this is an ATM machine, and it’s spitting out money, and I’m just going to give you this money until we’re all even kind of thing. And then what’s great, is what happens, is if you do that, everyone gets paid back, and they made a lot of money. They all say, “Alan, I want to invest again.” Then you’re like, “Yeah. I want to buy more too.” And so we just kept going and rolling with it.

Robert Leonard (00:18:59):
Assuming that you probably hadn’t thought of this, or considered it too much back then because we’re relatively new in real estate, but what did you think about maintenance and repairs? Because obviously, the delta just between your rent and your mortgage isn’t necessarily pure profit. I mean we got to put some aside for maintenance and repairs. But I’m thinking you didn’t think of that back then, so how did you manage that piece of it?

Alan Corey (00:19:18):
Yeah, you’re right. Now before I buy a property, I’ll say, “Well, 10% of this income is going to go repairs, 10% is for a property manager, 10% for vacancy.” At that time, the way I looked at it was, “Hey, if I was one of my friends and paying 700 bucks a month in rent, or paying $1,000 a month in rent, I’m saving that because I’m also living in this house too.” So in my head I was like, “I should earmark as if I am paying rent somewhere.” And then also I still maintained that other bank account across town. So that was going to be what am I going to invest every January 1st. But also, hey, if things go south, I don’t know how much money is in that account across town, but it’s probably going to be enough to get me through any extreme situation. And I’ve credit cards, and I’ve got all the other tools that people get into problematic debt with, those are all options too. But I probably was more optimistic than I should, but it worked out.

Robert Leonard (00:20:12):
You mentioned that you put 10% down on these first two properties. Is that just the products that were available back then? I mean we don’t see that today that often. So was that just the type of mortgage products that were available back then?

Alan Corey (00:20:23):
Yeah. Well, so they do exist now because these were owner-occupied. I was living in the property. So you can actually go buy owner-occupied rentals-

Robert Leonard (00:20:30):
For less than 10% today.

Alan Corey (00:20:32):
Yeah. For 3%. Right now, or 0% if you’re a VA loaner. Yeah. So at the time, it was fast and loose. I bought the $100,000 apartment, that duplex was $450,000. So giving someone basically a loan on $450,000, and they make 40,000 at work, that may be a little bit tricky now. And collecting money from friends, I think that’s a little bit more regulated. But I didn’t know there were other products. I don’t even know why I thought I had to have 10% down. But I think that’s maybe how the numbers worked a little bit on my spreadsheet as well.

Robert Leonard (00:21:05):
I was going to ask you about. How you were able to collect the money from friends to use that for the down payment? Because that’s really a big no, no, today, at least, for the most part. I mean you could get gifts here and there, but for the most part, it’s hard to get financing by taking money from friends.

Alan Corey (00:21:18):
I think it was because this was right after three or four years after college, all my friends have the first professional day job, and they’re basically being an adult for the first time. And I think we all looked at each other and we’re like, “Wait a minute, I don’t have kids yet. We’re still having roommates and sharing things. But I’ve got $5,000, I know I should invest it in something, should it be stocks, should it be real estate.” And I don’t know, I guess I’m that trustworthy friend who has always followed through. I’ve always been very entrepreneurial, and I’ve always talked to money. And they saw all the sacrifices that I was making too. I was going to take the bus, and we’re going to take the cab, and we’ll see you in 20 minutes at the party. Okay, no problem. So I think I validated that I’m not going to just crazily spend their money either.

Robert Leonard (00:22:00):
Do you still own those two properties today?

Alan Corey (00:22:03):
No, but it made me a millionaire. So the first property that I bought for 450, I sold about three years ago for $2 million, and the other one I sold for $180,000 about two years after I bought it. So I made $80,000 profit tax free, which capital gains tax benefit. So selling that broken apartment for 180, I had $80,000 cash, that I was able to accelerate, and buy more property from there.

Robert Leonard (00:22:29):
I’m glad that you held one of them until… I mean even three years ago, that’s pretty recent. I’m glad because I was curious to know what those were worth today. I mean we know what New York City real estate is like. It’s some of the most expensive in the world, so I was curious to hear what 100,000, or even $450,000 property back then would be today. And like you said, you sold one for two million just three years ago. That’s a big gain.

Alan Corey (00:22:51):
This is part of my book, and House FIRE, financial independence, retire early. Properties come with, I’d say, imaginary lottery tickets. I didn’t buy that property because I thought it would be a $2 million property. I bought that property because it made me 500 bucks a month after all expenses were made. That’s why I bought a property. And then I would go buy another property because that made me 200 bucks a month. And what happens is, if you spread out all your investments, it’s like investing in a mutual fund, if one claps the other ones are going to support it. But if one takes off, then great, you benefit from there.

Alan Corey (00:23:24):
I was investing in Brooklyn, again, because when I was investing in Brooklyn, it was 99 cent stores, liquor stores on every corner, vacancies. And then when I left Brooklyn, I’m in Atlanta now, I had sold my houses to celebrities. There was Chipotle, there was Starbucks, there’s the Brooklyn Nets Stadium. The neighborhood has changed. I didn’t bank on that. But everyone was like, “Alan got lucky in real estate.” And it’s like, well, I put myself in this position to get lucky. And it wasn’t that I was buying it because I saw this payday. It was I wanted these little small ATM machines, and they add up collectively to replace my day job income. And then, wow, I really benefited.

Alan Corey (00:24:03):
And this time it goes back to good debt and bad debt. If you don’t mind, I’d like to talk about this a lot. Because when I was growing up, I heard the Dave Ramseys, I heard the Suzy Orman, those were the talking heads. And they’re all about not using debt and paying off things. And what I’ve learned now, now that I’m older. I’m 43 now. All that education is great if you want to go from negative net worth to zero net. Those are the steps you have to go through to go from negative net worth to zero net worth. My philosophy, and my way of teaching money, which I put in House FIRE, is how you go from zero net worth to crazy generational wealth network, and that is using debt.

Alan Corey (00:24:44):
And I’ll give you a quick example what I mean by that. So let’s say someone has $100,000 to invest, and they buy one rental property, one house. And they rent that out for $1,000 a month, there’s no mortgage, maybe there’s some repairs, or whatnot. Let’s just make the numbers easy, they make $12,000 at the end of the year. $1,000 a month and is paid off rental. And let’s say the property increases in value by 10% in five years or whatnot. Okay, great. It’s now $110,000 property. They made $10,000 on this property, and not a bad investment. What could they have done better? Well, they could have taken that $100,000, and bought five properties with today’s loan products. That’s $20,000 down payment on five different $100,000 properties.

Alan Corey (00:25:28):
What we get from there is, after the mortgage payment, and expenses, and everything like that, each property is only producing $200 in income, instead of 1,000. But 200 times five is 1,000, so it’s the exact same thing. I’m making $1,000, I’m making $1,000 with my one house, or I’m making $1,000 with five homes. Now, let’s say the property goes up in value 10%. The real estate market value typically goes up about 3% a year, inflation goes up about 2% a year, so a house goes up about one and a half percent a year in value. But let’s say 5, 10 years from now, this house goes up in 10% in value. Well, you got five of them, so now you made $50,000. So with that same $100,000, I could have been super safe, put in one house, and it went up in value $10,000. Or I’d it spread across five houses, and it goes up $50,000.

Alan Corey (00:26:22):
But it goes further than that, if I do nothing else, and just pay off the mortgage, let’s say all five of these homes have 30-year mortgages. In 30 years, let’s say the house prices double, which isn’t unreasonable. If you buy $100,000 house in 30 years, it’s probably going to be worth $200,000. So if you did plan A, well, great, you doubled your money. You now have $200,000 net worth. But if you did plan B, you’ve doubled the five homes in value from 100,000 to $200,000, you’re now a millionaire. You made a million dollars. Not only that, you’re reducing risk at the same time, because it’s the same concept. If that one house that you have burns to the ground, you lost $100,000.

Alan Corey (00:27:04):
But if you have five houses that you only put $20,000 down payment into, and it burns to the ground, you only lost $20,000. If you have one vacancy in that one house, you make $0. Maybe it’s vacant for three months. But if you have one vacancy across the five home portfolio, you’re still profiting because those four other homes are kicking off $200 each, and that will probably cover the mortgage of that fifth house. So you’re also buying five lottery tickets. Maybe one of these, there’ll be a new park that opens up, maybe there’ll be a charter school that opens up in one of these five homes. I have all my eggs in one basket if I put it in one house.

Alan Corey (00:27:41):
So that’s what I teach in my book House FIRE, financial independence retire early through houses, is that you actually reduce your risk by getting mortgages. And this is what I mean by good debt. And it also can 5X your income, if just your properties go up in value 10%, I’ve made $50,000 instead of $10,000. So that’s the way to look at it. I didn’t get taught that by Suzy Orman or Dave Ramsey. I had to learn that on my own, and building my own spreadsheets and investing. And things happened to me and be like, “Wait a minute, why is this happening? Why did this happen? Why did that happen? How come I’m creating more wealth than this all-cash investor?” And I really dug in deep, and this is what I learned.

Robert Leonard (00:28:21):
I really, really like that a lot, because that’s exactly my philosophy. I think we are perfectly 100% aligned on that. That is exactly how I invest myself. That’s what I believe is the right way as well. And people that listen to the podcast for a while know that I tend to be a little bit harsh of Dave Ramsey and on social media a little bit too. And I think he’s a good guy. I don’t think he has any misintentions. And like you said to go from negative to zero net worth, he’s great. His strategies honestly work for a lot of people. I think they’re probably right for a lot of people. But if you’re really somebody like you and I, and probably most people listening to the show that really want to build actual wealth, you don’t have to be a billionaire, but just build real wealth, you have to use debt. You have to use good debt, and buy rental properties like you said.

Robert Leonard (00:29:05):
I’m curious to hear your opinion on this, because this is my other strategy that I wasn’t taught from anybody. Like you, you just stumbled on it. And so this other strategy that I use from time to time is something that I just stumbled on. And that’s when, I have a lot of people come to me and say, “I have $50,000, I want to buy a property, or if I was in that situation, how much money should I put down?” And my personal opinion is that they should always put down the smallest amount of money possible. And the reason I think that is, let’s just say you’re going to go buy a property, you have $20,000. You say, “All right. I can put this whole $20,000 into this property.” Great. But now you have no money if anything goes wrong.

Robert Leonard (00:29:43):
And so what I think people should do, and what I do myself is, I put the absolute lowest money down that I can, and then I put the other money that I would have put into the deal, that I was willing to put into the deal into reserves. And now I say, “Okay. I can cover this mortgage for the next 12 months, or six months, or whatever with those reserves.” So really what is the downside of having a little bit more leverage? I don’t see it. I think you’re really derisking yourself by keeping that money in reserves rather than putting it all in the deal. Because if you put it all in the deal, now you have nothing to cover that mortgage if something happens. But if you keep the money in reserves, now you have six to 12 months of leeway to cover that mortgage just from those reserves.

Alan Corey (00:30:22):
100%, put as little money in every deal, but make sure that deal still is positive cash flow. You don’t want to put 3% down, and then you’re losing 500 bucks a month. Put putting 5% down, and 10% if you can, or 15, or 20, instead of 25, 30, 100%. I’m going to piggyback off other reasons why this makes sense. So right now, everyone’s worry is inflation. So what is inflation? Inflation is the cost of goods going up. I’ve seen ice cream signs that used to be a nickel like in antique shops, and now ice cream is like $3. So let’s take an example, [the] cost of goods always go up as the country prints more money through stimulus packages, there are more dollar bills out there, so your dollar bills aren’t as rare, which means they’re worthless.

Alan Corey (00:31:05):
So let’s take an example. And this, I promise you, comes back to why you want the biggest mortgage as possible on all your properties. Let’s say you find a Sacagawea coin on the ground right now. It’s worth $1, and no one keeps those things in their pocket or their wallet, and you just seem to find them on the ground, or at least I do. So I have $1, and so I’ve got two options. I can take this $1, mail it to my mortgage company, and reduce my mortgage balance by $1. I paid an extra principal of $1. Or I can go walk into the candy shop and maybe get a bag of candy, maybe get a Snickers bar for $1. I don’t know. A sale going on. Okay. I had one coin equal to one bag of candy, equal $1 principle reduction on my mortgage. That was my thought process.

Alan Corey (00:31:55):
Now let’s fast forward 15 years in the future. And we’re in a cashless society, and everyone is driving Teslas, and unearth the same coin, another coin like, “Oh, this is $1 coin, we used to have these things 15 years ago.” And then I have the exact same thought process. I could either go in to the candy store, and go buy Snickers. But when I go in there and Snickers are now $2. So this coin is only worth half a Snicker bar. Or I can mail in this coin to my lender, and it’s still worth $1 reduction in principle. So that means I need to pay in tomorrow’s dollars. So the longer it takes me to pay back these debts, my money is stronger. And so why would you ever prepay your mortgage? Why would you ever put 20 extra bucks on your mortgage payment? Which is what all the talking heads tell you to do on TV. It doesn’t make sense.

Alan Corey (00:32:56):
Spend that $20 on something, or invest it in real estate, invest it in stocks. Go invest that $20 now or buy things. Go buy 20 Snicker bars with it, because in the future you’re only going to buy 10 Snicker bars, but that debt is going to be constant, that debt is always going to be the same, your mortgage payment doesn’t change when inflation goes up. And so that’s another reason why put as little down as possible, get a 30-year mortgage, if you get a 40 year, 50-year mortgage even better. Because money is just going to get cheaper and cheaper, those payments are going to get cheaper and cheaper. And they’re going to feel like it’s cheaper and cheaper, and it’s actually is going to get cheaper and cheaper in the future. Which is why the US national debt is never going to be paid off. We owe, whatever, $80 trillion. But if we wait to pay it off in 10 years, it’s really going to be about $50 trillion. So never pay off these debt, just refinance and kick the can down the road.

Robert Leonard (00:33:46):
Plus, a lot of times these interest rates are super low. One of mine is 2.25% for a 30 year fixed. I’m just like, “I will never pay an extra dollar on this property. It is so cheap. Why would you ever do that?”

Alan Corey (00:33:58):
Right. So yeah, we didn’t even get into that. But yeah, you can borrow money, basically, at 2% and put it in the stock market, and historically you’ll make 7% or whatever. So yeah, why wouldn’t you do that all day, just leveraging money. Now, these are the things that that Wall Street firm do. This is the stuff that all these rich people learned in Ivy League school, and get trained, and all their networks paid for it. I’m learning this on my own 20 years later.

Robert Leonard (00:34:23):
I’m really enjoying the conversation because it sounds like you and I have a lot of the same philosophy. It sounds like we’ve come across it the same way. Nobody in my family has ever made any investments. I think I’m the first one in my family to ever make any sort of investment. So I didn’t have any mentors or rich people to lean on either. I just figured it out like you. Now, because I have a podcast, I’m connected with some other, I guess, you could call financial influencers across social media, whatever you want to call it. People that are just interested in teaching other people about finance. And there are some two or three of them, a couple that I’m relatively good friends with, as good a friends you can be with somebody through a computer.

Robert Leonard (00:34:57):
And one of them very, very, very strongly believes in paying off his mortgage. And I forget exactly how much his mortgage was, maybe 300,000 or so for his primary residence. And he has been absolutely gangbuster paying this thing off. And honestly, kudos to him, it’s pretty amazing. He’s paying it off in five years, he’s got like 10,000, or $20,000 left. Which is honestly pretty amazing that he was able to do that himself. But being a believer of the philosophy that we just had, I just don’t agree with that decision personally, mostly from a quantitative perspective.

Robert Leonard (00:35:29):
But what he always argues when we talk about it is that it’s not about the numbers. He said, “I don’t care about that side of it. I care about the psychology. I care about, I’m going to be living in a house that I don’t owe anybody anything on, and I feel super secure about that.” And I think this comes back to the Dave Ramsey approach where it gives a lot of people that peace of mind, and I think a lot of it is more psychological than it is quantitative. How do you balance that dynamic of what’s right from a numbers and financial perspective, versus what makes people feel good, or what’s right from a psychology standpoint?

Alan Corey (00:36:01):
So I did the same thing, I paid off my mortgage thinking I was going to have a great night’s sleep, and I couldn’t sleep for a month because I was like, “I could be making more money.” I felt like I was losing money every night that I did not have a mortgage. And my wife was that way, and I was like, “Listen, honey…” I always come out with the spreadsheet. I said, “Listen, we don’t have a mortgage, and I know this makes you sleep well at night. I can’t sleep well at night. But if we do a cash out mortgage, I can take this money, and buy this property, and that property would pay for our mortgage payment and more. So I’ve got two.”

Alan Corey (00:36:37):
And so with math and spreadsheets, I’ve always won over the arguments. I’m like, “Here it is, I’m not making this up.” And of course, it just happened that was another property that doubled in value. So not only did that rental property pay for our mortgage, but it appreciated not because I had any insight, it was in an appreciating neighborhood and doubled in value. So I basically, because I didn’t have a mortgage, I was able to double the value of my house to get that mortgage, and that rental property paid for my mortgage payment. So again, it comes back to wealth, in 30 years, sure, I have two mortgages, but in 30 years I’m going to have two paid-off houses.

Alan Corey (00:37:15):
So instead of whatever the numbers are, let’s say they’re both $500,000 houses, in two years I’m going to have a paid off million dollar assets, instead of just one paid off asset of $500,000 that I paid off 27 years ago. The only way I see that it makes sense maybe for your friend is, if you own a house that’s maybe under $250,000. Because I think at that stage the returns are going to be marginal. You’re still probably paying off some school loans, or other car debt, and other things, and you might not be negative net worth, and you might not be zero net worth. But you’re probably in that 100 to 250,000 net worth. But once you get past that $250,000 net worth, I went through this at least, your mindset completely changes. And you’re like, “Wait a minute. I went from negative 50,000, or negative 100,000…” Whatever your situation is, to zero to 250. That’s like a $500,000 spread, depending on where you started, or how big of a hole you started.

Alan Corey (00:38:12):
Then you start thinking differently, and you start confident in yourself. Because to get to that period, you’ve had to do the reps, the financial reps, the negotiation on cell phone contracts, the eating ramen noodles. You have control of your money, you have control of your investments, you have control of your bills, you’ve learned all that. And then at 250, I think you have enough confidence that “Oh, if things get tight. I can live below my means. I know how to ride a bike instead of taking the car, or whatever it takes.” And then that’s when your growth is going to accelerate. But if you’ve got a $500,000 house that you’re paying off, the money you can make just by putting it in the stock market that’s thousands of dollars a year. If you put that into real estate, that’s hundreds of thousands of dollars a year. So it’s a little bit different than earning incremental money on $20,000 than it is $200,000 kind of thing.

Alan Corey (00:38:58):
So that’s my personal line of why I wouldn’t talk someone out. But I don’t know, a lot of people in the financial advisement community, they love math. Everything comes down to math. But whatever it is, with mortgages they don’t love math. They ignore the math. And it’s like, why are we all trusting in math across the board everywhere, but in mortgages and real estate we’re like, “No, psychology.” I mean psychology, I feel good when I go buy new sneakers, and I go buy a new wardrobe. Psychology, I feel great, I going to invest wisely everywhere else in my life. But psychology-wise, I’m going to run up this credit card bill. I don’t ever see eye to eye, it doesn’t make sense. Either we’re all in on math or not. Why do we pick and choose math?

Robert Leonard (00:39:43):
You’ve mentioned a couple of times that you’ve benefited from appreciation. And that reminds me of one of my favorite quotes and that’s, “The harder I work it seems the luckier I get.” And I completely agree. I think you’re right. Yeah. There is a little bit of luck there, but luck is manufactured. Sometimes there’s luck that you just, you get lucky, and you didn’t really do much to deserve it. But there are a lot of times, I’m a firm believer that luck isn’t created, and you put yourself in those situations to create that luck. And so I don’t want people to hear the show and think that you just got lucky on all these.

Robert Leonard (00:40:14):
But in terms of paying things off, yeah, I completely agree. You and I are 100% aligned. These other arguments that a lot of people make just don’t really make a lot of sense to me, personally. Being into the spreadsheets like you are, have you done an analysis or any math around this next situation that I’m going to explain? Because this is oftentimes another argument that people will make is, I’m going to go five years pay off my house. And then after that, I’m going to take all that extra money that I was paying to my mortgage, and then I’ll start investing it. And then I’ll still have my paid off house, and then I’ll start investing. Of course, there’s that opportunity cost of five years or 10 years, however long it takes to pay off your mortgage. But you do have significantly more money to start investing. So have you done any math on that, and if so, what do the numbers look like?

Alan Corey (00:40:58):
Yeah. So this is a big part of my book as well, in House FIRE book. I wish I had the exact numbers. But let’s say, I think was something like, the average car note is $25,000. And the average payments, maybe, on that car note, maybe, let’s say 400 bucks a month. Okay. So I’m a real estate investor and a real estate adviser, I’m a licensed realtor as well, so people come to me for this sort of advice all the time. And they say, “Hey, I’ve got five years left in my car note, when I pay that off, I’m coming to you and we’re going to go buy an investment property.” And I said, “Okay. Well, that sounds like a terrible decision. Come to me now, and let’s go buy a real estate property.”

Alan Corey (00:41:32):
Because if you’ve got $25,000, instead of paying off that car note, we can go buy that $25,000, put it down as a down payment on $100,000 house. That $100,000 house, we’ll find you one, maybe it’s a duplex or triplex, and maybe it’s out of town and we have to have a property manager. We can find one for you that’s $100,000 regardless of where you live. That probably will cash flow you 300 bucks a month. So you have a car note right now that you just going to pay off, it’s costing you $300 a month, it’s going to cost you $25,000. Or we can buy a rental property that costs $25,000, that spits off a cash flow of $300.

Alan Corey (00:42:11):
So what happens? Well, that house just burned up the car note. Because the $300 over here is going to pay for that $300 over there, so you’re killing your bills, you’re burning your bills through house FIRE, sort of my philosophy. And the benefits of this is, “Hey, well, what about my car note?” Okay. Well, let’s fast forward five years. Five years from now, you have a paid-off car, and you have a house that is appreciating, most likely, but also that $300 that was paying your car note now goes to you. You can spend that $300 however you want. You could apply it to another bill, but you wouldn’t have been in this situation if you waited five years. Because if you waited five years to pay off that car note, well, now you don’t have $25,000, because you’ve been throwing $5,000 a year at that car note. And that $100,000 house is probably $110,000 now.

Alan Corey (00:43:02):
And so you just missed out on five years of gain. That car note that goes back to the Sacagawea coin is locked in rate for five years. Take advantage of it, don’t pay that off. Find an asset, a cash-flowing asset that will pay that off. And so that’s what I did. And so if any of your listeners follow the FIRE movement, they do the math that they trust so much, this math. Let’s do the math. And what they do is take every single bill in your life and multiply it by 25, the annual bill. So let’s take an example. I had $150 internet bill, and I knew I would never get rid of this bill for the rest of my life. I can’t go to Costco and buy internet access in bulk, which is the FIRE movement like, “Start there first.” Kind of thing. That wasn’t a possibility.

Alan Corey (00:43:46):
So the FIRE movement says, we’ll take a year’s worth of internet bills, and I think that’s $12,000, and multiply that by 25, which is… Multiply that by 25 years worth of savings, and that’s $45,000. And then that’s just the internet bill. But then you do that for your phone bill, your utilities, your rent. And that’s how you get your FIRE number. Your annual expenses multiplied by 25. As long as you have that in savings, you’re financially independent, and you can retire early, and you just do a 4% withdrawal rate off everything. So that’s great. So I have to save $45,000 right now before I can “retire” to pay just that one internet bill. But I’m in real estate, I do this all day. I’m not saving up $45,000, it’s going to take me 10 years. I got to stay at my day job for 10 more years, let’s cut that in half, $22,500.

Alan Corey (00:44:39):
So I can go put that as a 20% down payment on a house, $2,500 of closing costs, that’s going to cash flow me $150 a month. Boom, that house now pays for my internet bill for the rest of my life. I didn’t have to save $45,000, I only had to save 22,500. Half the FIRE number. So all these people who are like, “Save, save, save, save.” They basically have to be millionaires in stock holdings, but then they can’t live like a millionaire. Because now they’re on a constrained budget for the rest of their life. My way is, if you do it through House FIRE, I get to live larger every year because every year my mortgage payment gets paid off by the tenants, rental income typically goes up every single year. So the earlier I get started on this House FIRE path, the larger and larger I get to live in retirement. I don’t have to be on a constrained budget as I collect these properties by one a year, you don’t have to be a real estate mogul.

Alan Corey (00:45:30):
All it takes is five, which I explained in my book. Just do five, five properties in five years, and sit back and wait. It’s half the money of typical FIRE advice, and you’re going to live larger and larger in retirement. And who wouldn’t want that path? It seems crazy to me. But then anyone who’s not in real estate, the psychology of paying off a mortgage. And I’m like, “Well, if you understood money, you wouldn’t be able to sleep at night, because you’re losing money every single night.”

Robert Leonard (00:45:57):
You and I are literally perfectly aligned on this. I couldn’t agree more. Because you’re so right, people bring that psychological argument in, and I’m like, “I get it.” But I feel worse if I knew that these things were paid off. I feel psychologically better following the strategy that you and I are talking about today. And again, this is something that you can’t really… Other than your book, not a lot of books talk about this. You don’t get taught this in school. Not a lot of people really talk about this, so it’s something you just have to learn on your own unless you’re listening to podcasts like this.

Robert Leonard (00:46:24):
And so I just stumbled upon it. I went through the exact same situation as you mentioned with the cars. At the time, when I bought my first rental property, I had a car note, and it was not that much money, it was like 10 or $15,000. Total payment was 250 bucks, or something like that a month. But when I got the loan, I had actually worked at the credit union that I got the loan at. So the rates were 1.24%, and I got a half percent discount, so my auto loan was 0.74%. And I’m like, “Okay. Do I take this money and buy a rental property? It’s going to cash flow me like $400 a month. Or do I pay off this loan?” And I’m like, “It just clearly makes so much sense to me to just buy this rental property, and keep this note.” One, the interest rate is so low. Two, the mortgage is going to cover it, and everything else you explained holds true.

Robert Leonard (00:47:12):
And so I ended up taking that even a little bit further with student loans. And everybody listening to the show is probably familiar with the idea of house hacking. And so I like semi coined this idea of student loan hacking, where rather than rapidly paying down your student loans, assuming that they’re not exorbitant rates, assuming that they’re relatively normal low rates. Mine are at 4%. So rather than taking that money, and paying off the loans, I bought rental properties, now my rental properties cover my student loans. And I just call that student loan hacking.

Alan Corey (00:47:45):
You got it. And I would take this further, if you can go get 0% down car loans, I would go buy five cars today, and put them all up on Turo. I just spent 30 days in Hawaii, I paid $250 a day on Turo because there are no rental cars. I was paying more for my car than I was for my lodging. And I just see an opportunity. I need to go buy as many cars as I can, and put these up on Turo and make $4,000 a week off these things. And this will rapidly pay off all those car notes, and then in two or three years when the car shortage is over, you’ve got five paid-off cars. It’s the same concept as real estate investing just on a smaller scale if you don’t have the money to invest in real estate right now.

Robert Leonard (00:48:26):
You’re not going to believe this, but I literally bought an RV yesterday to do this exact thing, to rent it out.

Alan Corey (00:48:33):
Oh, cool. Yes.

Robert Leonard (00:48:35):
Because I had a guest on the show a couple of months ago. He’s pretty big into real estate, and he just said that he got into RV rentals because it’s the same idea. There are so many people that want to rent our RVs, the rates are ridiculous. I would never pay it, but a lot of people do. And the financing is amazing on them, and it’s the exact same thing you just mentioned with Turo, but with an RV. And I get to use it myself too when it’s not rented, and it’s awesome.

Alan Corey (00:48:58):
Yeah. And people are renting U-Haul trucks now because there are no options for rental cars. And this actually reminds me, 10 years ago I had a similar concept where I learned somehow that you have to retire a school bus after 100,000 miles. The government pays for the public school buses, you’ve got to get rid of them after $100,000 just for safety reasons. But also these school buses are very well kept up because you’re transporting children, so they’re inspected constantly. So they’re in really good shape even at 100,000 miles. And so I wanted to do in the realm of my budget living, I wanted to do a cross country trip, and I didn’t have a car, I didn’t have a plane ticket, didn’t want to take a bus. So I bought a school bus, a retired school bus, it one of the short buses for 1,300 bucks, and drove it cross country and back.

Alan Corey (00:49:46):
And when I got back, I was able to sell it for 1,500 bucks. And I was like, “Oh, this worked out really great.” Because there’s an aftermarket for these things for RV rentals. People convert them. There’s an aftermarket for private schools that buy these buses. There’s an aftermarket for just transportation people, airport shuttles, and stuff like that. So there are always opportunities. It doesn’t have to be real estate, but it’s finding that opportunity, leveraging it. And I basically got paid to travel cross country and back kind of thing this way. I always try to find a way, how can I get an asset to pay for whatever I want to accomplish in life? And you’re doing it, that RV is awesome, that’s a great story, and I know you’re going to have about 15 future podcasts like, “I can’t believe how much money I’m making with this RV.”

Alan Corey (00:50:26):
And then what’s going to happen is everyone is going to comment on your podcast, “Robert is so lucky, because the RV market, he’s just the luckiest guy.” And it’s like, “No, we’re talking right now. Go buy your RV.” Robert was the person who did it. You know that you should go do it, but you sit on your butt and you don’t invest. You keep doing the same things, your life is not going to change, but the people are taking those chances, doing [an] activity, great things happen to, and then you try to discount it by calling it luck. And you’re not lucky, you’re an entrepreneur. You’re managing your finances, you’re talking about money, you’re doing everything right.

Robert Leonard (00:50:58):
And the craziest part is, it takes 0% down. I did not put a dollar down to buy that RV, and it was a $70,000 RV. I didn’t have to put any money down.

Alan Corey (00:51:08):
Yeah. So non-wealthy people look at that and be like, “Oh, $70,000 is wealth.” I look at that, and I’m like, “You just got a free ATM machine.” Because you got to put that on Turo, it’s going to rent in a week. I don’t know the going rates of RV. What is it? Like at 500 bucks a day, $1,000 a day.

Robert Leonard (00:51:23):
So listen to this, you’re going to be amazed. I don’t know exactly the nightly rates, I have to look it up. But it’s somewhere between 200, $400 depending on the week. 4th of July, of course, is going big one, et cetera. But when we found this out, and so we didn’t want to just dive in. We like to do our research and get involved. So we found that about 45 minutes from my business partner, whom I buy rentals with. About 45 minutes away there’s a dealer who sells them now, but for 40 years, all they did was rentals. They didn’t sell them. They made so much money from rentals. They have like 40 or 50 fleets of RVs, and all they do is rent them.

Robert Leonard (00:51:57):
I went there. It’s a little mom-and-pop shop. We went there to look at some, see what we wanted to buy. And so I just so happened to talk to the owner, and it’s a mom-and-pop shop. She was super cool. She literally gave me a 25-page book of their basic standard operating procedures, walked me through their entire model. And she was literally showing me these invoices. This guy paid over $5,000 for a 10-day trip. And it’s like… I don’t know.

Alan Corey (00:52:23):
I mean, four-door sedan in Hawaii, I was paying $4,000 a week. I mean I had no other option. And so I can’t imagine RV. Typically, you’re not going to take an RV for a day or two, but you’re going to take a week-long trip. So what’s your note payment every month?

Robert Leonard (00:52:36):
$430.

Alan Corey (00:52:38):
You basically rent it one day out of a month, then you’re fine. And no one rents an RV for one day. And let’s assume you rented one weekend out of every single month. You have 30 days in a month, but let’s say you rent it for a three-day weekend, you’re going to make 1,500 bucks. You’re making $1,000 a day, that’s house FIRE. Let’s go to your bills, Robert, what do you spend $1,000 a month on?

Robert Leonard (00:53:00):
I house hack, so my portion of the rent is 600 bucks, so it’s not a lot. And the crazy piece is we rented for one week. Like let’s just say we got one week for 5,000, maybe it’s 4,000, maybe it’s 6,000. But let’s just say somewhere in that realm. The total cost of our note for the whole year is 4,800 bucks, $5,000. You rent it one time for one week, and you cover the assets mortgage payment for the whole year. And then you can use it all you want, or you can continue to rent it, or whatever. And I race dirt bikes, and a lot of times RVs are one of the best solutions to go to the races. So my plan is to rent it out, and then when I want to use it, I just use it whenever I want to go to the races, and it’s perfect.

Alan Corey (00:53:34):
Yeah. This is great. Real estate investing is this exact same concept, just on a higher scale. I guess the one catch would be, I don’t know if a $70,000 RV, you’d be able to sell it for $100,000 in three years, but it doesn’t matter, you’re going to be making $1,000 a month minimum probably more for the rest of your life. And if you get three, then you got $3,000 coming in, that probably is going to cover all your expenses, and you’re fired, Robert. But at that point, you’re financially independent, you’ve retired early. You’ve got assets that are cash flowing, covering all your bills in your life.

Alan Corey (00:54:04):
And then you start making up payments. That’s what I do. I’ve got all my bills covered, let me go buy a house, so I can go spend a month in Hawaii. Let me buy a house that’s going to pay for this ridiculous Turo rates for my car rentals. So everything feels free now. Because anything I want to do in my life, I buy an asset that pays for it. And I’m going to have to look into RVs now. Sorry, I might be your competition.

Robert Leonard (00:54:26):
That’s okay. So there are so many things that I want to mention that you just talked about. I don’t mind the competition. And the guy that I talked to about it said the same thing. He’s like, “Listen, I’m giving you my whole story right now. I don’t care. You live all the way on the East Coast, I live in California, and we’re not competing.” Abundance mindset. And you’re down in Georgia, that doesn’t bother me. And so in real estate, it’s the same idea. I invest solely long distance, and people ask me all the time what that city is. And I’ll tell anybody that asks. I talk about on the podcast, hundreds of thousands of people hear this every month, and they’re like, “Why would you ever tell anybody that? You’re increasing your competition.” And I’m like, “Abundance mindset.”

Robert Leonard (00:55:00):
I don’t care because of that. But also, you know how many people are actually going to take action on this? Pretty much nobody. So I’m really not increasing my competition. I’m not really that worried about it. You did mention two other things. You mentioned that the RV is not going to appreciate. And you’re 100% right, that is one of the downsides. And the other downside is, in poor economic times, let’s say we enter a recession, it’s probably not going to be a lot of demand for an RV rental. But I’m not overly concerned about that because the mortgage or the note on it is $440 a month. I mean it’s not a ton of money. We’re not talking $4,000 a month. It’s something that I could probably cover with my emergency fund for quite a while if I needed to. And so I don’t see it as a huge risk.

Alan Corey (00:55:38):
Here’s your worst-case scenario, that happens, you park it on a mobile home lot, and you rent it out for $400 a month. I mean it’s no different than a mobile home. It might be the smaller one. But that’s the going rate for the cheapest mobile home lot is 400 bucks for a trailer. But at that point, I would imagine you would have made your $70,000 back. And even if you throw the car away, no harm done. That’s like what a cash-out refi is. And the people are always like, “Oh, I want to pay off my mortgage.” But let’s say you bought a house for $200,000, and now it’s worth $400,000. And they’re like, “Oh, I’m so close to paying off my mortgage. I can’t wait. I can’t wait.”

Alan Corey (00:56:15):
And I’m like, “No, do a cash-out refi, pull out $300,000.” And they’re, “No, why would I do that? 30 more years.” I was like, “Well, you bought it for $200,000, and you’re pulling out $300,000.” You get $100,000 tax-free. At this point, there’s absolutely no risk on that home. If it burns to the ground, you win kind of thing, because you already got your money out. And even if you do that cash-out refi, and you’re still renting it, and you’re probably cash flowing each month. But you got money in hand, you got no risk. And so I tried to do that at all my properties. I try to improve them and do a cash-out refi, so I actually have $0 invested in all those properties. I just pull all the money out, reinvest it, wait for it to appreciate, cash-out refi, pull that money out.

Alan Corey (00:56:55):
And so sure, I’ve got 50 single-family homes, but I have no dollars in them because I’ve already pulled out all the money I put into it, and they’re risk-free, and they’re still cash flowing. So there are all these different scenarios if you just use debt as leverage to grow your wealth. And I think people maybe are just scared of taking those jumps. But again, I have to put it in a spreadsheet to convince my wife, but maybe that’s what we got to do to all these other podcast listeners who think we’re crazy, but it just makes sense.

Robert Leonard (00:57:23):
And like with the RV, a lot of people are like, “Well, it’s a depreciating asset.” And you’re right, it somewhat is, but it’s not a car. And if you look at the market, let’s just say 15 years from now, it’s not brand new, but it’s pretty close to new. So 15 years from now, it’ll be like 15, 16, 17 years old. These still hold their value pretty well. If I had to guess that even in 15 years, it will probably be worth roughly 20,000, 25,000 if I had to guess. It’s only lost half its value, and I’ve made a ton of money in cash flow from it. Definitely going to be net positive by a lot. And two, it’s just other people are paying that note. It’s not something that I have to pay, so I just don’t see it as a massive risk.

Robert Leonard (00:58:00):
And you mentioned the spreadsheet piece. And I think I put a poll out on Instagram the other day, and I said, “Do you prefer to be slightly above average, or do you prefer to be the best that you personally can be?” And I think that’s the disconnect between Dave Ramsey, and what we’re talking about. I think if you follow Dave Ramsey, you will be better than average, and even quite a bit better than the average person when it comes to personal finance and wealth. But if you do what we’re talking about, you’re going to achieve exponentially even more than that, and you’re going to become the best version of yourself that you can personally be. And I think you just have to decide for yourself, which is the path do you want to go down. And I don’t think there is a right or wrong, it’s whoever you are.

Alan Corey (00:58:37):
Yeah. I mean you have to be interested in this stuff, you have to be excited about it. I get excited by the deal. I get excited by the opportunity. But if you can’t bother to read one book on whatever you’re interested in, or listen to one podcast of whatever you’re interested in, then you’re not going to achieve any things that you want kind of thing. But yeah, that all makes sense. But also to come back to your point on that, let’s say you bought this RV for 70,000, and over time it’s worth $50,000, but someone has paid down $40,000 of it, you still have a $30,000 RV that’s worth $50,000, so there’s a spread there. But also you’ve got a vacation, you’ve got built-in vacation. If the economy is that bad. “Oh, it is so nice that Robert has an RV to travel all around the country when we’re all struggling.” He’s struggling too, but he bought this asset that other people paid off, and now he gets to even benefit from using the RV in personal reasons.

Robert Leonard (00:59:26):
I don’t think a lot of people will appreciate it, but I think you will, is you can rent the RV on Airbnb. So I can leave it parked in my driveway at my house, and Airbnb will allow you to list it on Airbnb. So we can rent it as a come drive it away and take it as a rental, or rent it as a rental unit in my driveway on Airbnb. And the third piece, I think this is creative, I’m proud of this strategy that I thought of. But this is, I have a duplex, I house hack, I rent out one side, and I live in the other. But I’m taking it even a step further, and I’m going to Airbnb my unit, not all the time, but sometimes. And if it’s Airbnb-ed, I’ll stay in the RV in my driveway. And if it’s not Airbnb-ed, I’ll stay in the house and rent out the RV. So it’s like so many opportunities to make money just from this one asset.

Alan Corey (01:00:11):
Yeah. That is genius. I mean I had someone rent one of my triplexes once. She rented all three units in the triplex, put them all up on Airbnb, and then she would just live in whatever unit wasn’t rented that night. And she would just follow stuff in every single unit and just her go-bag. And you’re doing the exact same thing. You’ve got one side, long-term tenant rental, or one side Airbnb, one side RV. And if one is booked, then you live in the other one. And, yeah, you’re going places. That’s the mindset you need. That’s amazing. That’s going to be awesome. So when is your book going to be coming out, because you’ve got some good stuff to share here?

Robert Leonard (01:00:44):
I really appreciate that. It means a lot coming from you. We chatted before the show, we mentioned that we had talking points, a bunch of things we wanted to go through. We mentioned that it would probably be a three-hour episode if we touched on them all. And you were definitely right, I think we have a lot more to talk about. I don’t think we even touched on too many of the talking points, which is fine because we had an amazing conversation. So we’ll have to have you back a second time, and probably even a third time. Before we give a handoff to where people can find you, I like to wrap up the show by turning the tables for a second and letting the guest ask me a question. So what question do you have for me?

Alan Corey (01:01:18):
So I’m new in the podcast space. I just launched a podcast for real estate agents called Agent Upgrade. I’m about to launch a podcast about this House FIRE concept as well. So what advice would you have as a beginner podcast for me to grow an audience?

Robert Leonard (01:01:32):
Well, it depends if you want to grow an audience. So I think the first thing is, define what your goal is with the podcast. If you’re doing it as podcasting as a business itself, very, very, very, very, very hard to do. The economics just don’t make a lot of sense. Now, you can turn it into a business if you sell something else. Keep the podcast not necessarily as the product or service, but sell a course, or a book, or some sort of thing that goes along with it. But if you’re just going to purely monetize the podcast via advertising, you have to be in the top 1% of the world to even make it somewhat close to being worthwhile.

Robert Leonard (01:02:08):
And so really define what you want the podcast to be. Do you want it to be a lead funnel? Do you want it to be… What exactly do you want it to be? And so from there in terms of growth, that depends, depending on what your goal is. If you want to grow it as a product or service that generates revenue itself, you have to do some growth hacking things, you have to go on a lot of other podcasts, you need to get good guests, you have to get the right guests, not necessarily big guests. So that’s a huge misconception that podcasters have, is that you have to have the bigger names. I think that’s absolutely wrong.

Robert Leonard (01:02:39):
But if you want it to sell your books, or your courses, or whatever else, other products and services that you have, you don’t necessarily have to have a big audience. You just have to have 500 to 1,000 listeners per episode, maybe. And you really want to just focus on building trust and quality and making sure that those people feel like they know you, and they can trust you, and things like that. So depends on your goal and your strategy, but that’s always how I think about it.

Alan Corey (01:03:03):
That makes sense. Someone told me that a successful podcast is one that you would do for free. I think that’s fair. Like you enjoy the topic, you’re excited about it. It’s not a business. It’s like, “Hey, I would do this in my free time.” He’s like, “If you keep that mindset, good things will come.” And that aligns with what you’re saying. So thanks for that.

Robert Leonard (01:03:21):
Yeah. Absolutely. Where can the audience go to connect with you, and find you on the internet, and find your book, your products, your services, anything else you got going on?

Alan Corey (01:03:30):
Sure. My name is Alan Corey, but my friends call me AC. And so I do everything from my house, so everything is branded The House of AC on social media. I’ve YouTube videos. If you go to the thehouseofac.com. If you google The House of AC, you’re going to learn a lot about air conditioning, and that has nothing to do with me. So possibly my branding needs some improvement. But for now, I’m thehouseofac.com.

Robert Leonard (01:03:52):
I will put a link to all of Alan’s resources in the show notes below. I’ll also put links to a bunch of the different stuff that we talked about throughout the episode that you guys will find relevant and useful. Alan, thanks so much for joining me. This was definitely hands down one of my favorite conversations. I already can’t wait to do it again soon.

Alan Corey (01:04:10):
Yeah. This was fun. Thanks for having me. Great time.

Robert Leonard (01:04:13):
All right, guys. That’s all I had for this week’s episode of real estate investing. I’ll see you again next week.

Outro (01:04:19):
Thank you for listening to TIP. Make sure to subscribe to We Study Billionaires by The Investor’s Podcast Network. Every Wednesday, we teach you about Bitcoin, and every Saturday we study billionaires and the financial markets. To access our show notes, transcripts, or courses, go to theinvestorspodcast.com. This show is for entertainment purposes only, before making any decision consult a professional. This show is copyrighted by The Investor’s Podcast Network. Written permission must be granted before syndication or rebroadcasting.