Alex Martinez – Fearlessly Find It, Fix It, Flip It . . . But Learn First
2 years ago · 1:13
We call this episode “Fearlessly Find It, Fix It, Flip It . . . But Learn First” because our guest Alex Martinez has no fear. Now just 26 years old, Alex has made a career as an entrepreneur in the real estate industry, by becoming a master at acquiring “deals”.
But Alex’s most powerful skill is his fearlessness. As you’ll hear from his story, the death of a close family friend in college triggered a change in Alex’s mindset. He didn’t want to miss opportunities and end up with regret. Alex “figured this out” at a surprisingly young age. In college, he won business plan competitions and was an founding member of the Entrepreneur Society at SDSU. While still in school, he took a job with the founders of the hit TV show “Flip This House” and took the opportunity by the horns to secure dozens of new acquisitions for the company in his first year.
His experience learning how to source, negotiate and acquire real estate kickstarted a young career as both a real estate investor and entrepreneur. In recent years, Alex has founded his own real estate business, as well as an education business that teaches people how to get started as real estate investors.
It’s great to get an episode that talks a lot about real estate, because owning real estate is a key pillar in what we call the Opt Out Life.
Note that Alex is our youngest guest to date, but that should tell you something . . . this kid has it figured out. We both have a ton of respect for his work ethic, attitude, and knowledge. Listen to Alex’s story to get reinvigorated about your own ventures, and to pick up some actionable tips on how to acquire and finance real estate deals.
Highlights from Episode 6 with Alex . . .
Telling us about his first “big win” as a 20-year-old. . . “I didn’t know anything about real estate investing, I’m 45 days to my first deal, and that deal was something called a wholesale. Essentially, you get a property under contract and then you sell the rights to that contract to another investor, who then wants to renovate it. That’s called a wholesale. You essentially sell the contract. What I was able to do, I did on this specific deal about eight hours of work and profited $22,000 for the company essentially by myself. I negotiated the contract, get it under contract, and that was a huge, huge win for me.”
On the value of seizing opportunity to work with people who are successful, and building relationships . . . “I made a lot of friends through business, which is cool because people get to see how hard you work, and they see you every single day. You have this different relationship with people, so those people that I’ve all worked with when I was 20 years old, I’m really, really good friends with all of them still and I still work with them. A lot of them. That was a cool thing to learn when you’re young. If you have an opportunity like that, to work for someone else, just absolutely crush it and it’s going to pay off dividends for years to come.”
Breaking down how simple – and profitable – a real estate wholesale deal can be . . . “What’s cool about internet marketing is you can send an email and make money. What’s cool about real estate is you can make a phone call and make money. I was at Coachella two years ago having fun with my friends, and I got a phone call on a wholesale deal that I had just sent out an email that week. This guy said you got it at the price we want. I said, “Cool, let me make another phone call.” Made another phone call and that turned into a $10,000 deal while I was at Coachella.“
Nate Broughton: This episode of The Opt Out Life podcast recorded here in San Diego, California is the Opt Out Life Story of Alex Martinez.
Speaker 2: Welcome to the Opt Out Life Podcast, the no BS guide to living the modern good life hosted by subversive millionaires Dana Robinson and Nate Broughton. The Opt Out Life Podcast explains exactly how creative hustlers are turning side gigs into real income and taking back control of their time. From their studio in sunny San Diego, the Opt Out Life welcomes guest who are solopreneurs, entrepreneurs, travelers and creatives who are proof that you can choose a lifestyle over money but still make money too. If you feel like you’ve been chasing your tail, running the rat race, or stuck in a system that’s rigged against you, we’d like to offer you an alternative here on the Opt Out Life Podcast.
Nate Broughton: Alex Martinez entered the real estate industry with a company called CT Homes while still in college at the age of 19. It was an early break where Alex learned how to acquire deals firsthand from the partners of the famed reality show, Flip This House. He jumped headfirst into the opportunity, and his go for it attitude helped him land dozens of deals in his first year. This experience set the groundwork for him to become a true expert in the world of real estate deals even before he could legally drink.
Dana Robinson: Alex went on to found his own investment group that completed wholesale deals and house flips all around southern California. At age 26, he is our youngest guest to date, but as you’ll hear, Alex is wise beyond his years in the ways of the Opt Out life. He owns his businesses, both as an active real estate investor and as a coach and educator, operating multiple online courses and coaching groups where he shares his experience and teaches other how to break into the game of real estate investing.
Nate Broughton: Income property is an important component of the Opt Out life. It’s a way to get ahead financially in the short term, but it’s also one of the best long term plays to get the freedom to do what you want when you want. Many of our guests have made their money with side gigs and businesses, but real estate is the third income pillar so we’re excited to talk about it with Alex. Let’s listen and learn from Alex.
Nate Broughton: Today on the Opt Out life, we are joined by youth incarnate, our first guest who is younger than both of us actually.
Dana Robinson: Yes, I think they’ve all been younger than me, but now we’re reaching out.
Nate Broughton: Noticeably younger than me this time so very excited to have Mr. Alex Martinez down from the bay, back in his rightful land of San Diego. Welcome, sir.
Dana Robinson: Welcome, Alex.
Alex Martinez: Thank you. Glad to be here guys in my natural habitat.
Nate Broughton: He has informed us that he … Well, he came in here with a bag full of clothes, which was kind of vagabond-y, but informed us that he-
Dana Robinson: A grocery bag full of clothes.
Nate Broughton: Right.
Alex Martinez: Trader Joe’s.
Nate Broughton: We’re using a little Trader Joe’s bag, but he also said he does not have a return flight home, which is very, very Opt Out.
Dana Robinson: Congratulations, sir. You win the Opt Out prize for the first interviewee who has showed up with a one-way ticket.
Alex Martinez: Thank you, guys. I’m honored. Honored to be here.
Nate Broughton: Well, we are very excited to have you here. I particularly am because there are some very good stories, I think, that exemplify the Opt Out life and some of the things that we’ve tried to preach … I say that word too many times, but preach and teach … here on the podcast that have been stories between you and I. The first one is how you and I met, actually. There’s been a few episodes recently where we talked about what we’re calling the audacity to reach out. That’s something that I know that you believe in, and have your own personal stories around, but you and I actually met at the Scottish Rite Center in Mission Valley, which is an interesting place, at what I believe was a San Diego creative investor’s event.
Alex Martinez: Exactly.
Nate Broughton: Or, something like that.
Alex Martinez: SDCIA.
Nate Broughton: SDCIA, which is littered with mostly gentlemen, some ladies, in Hawaiian shirts and floppy shorts and floppy shoes and floppy hair. You get to recite the Pledge of Allegiance before the meeting begins. It’s not really our natural habitat, not really our natural scene, but I think it’s a really cool story to open with because it is where you and I met. It was where you were at the ripe age of 20?
Alex Martinez: 20, yep.
Nate Broughton: 20 years old working for a company that I’m sure we’re going to hear a lot about and experience that you had there, but in the real estate industry sourcing acquisitions for CT Homes. My partner Brandon and I, at the time, were getting into real estate investing. I didn’t actually know about it. Brandon, I think, was born with tenants, a tenant roll sheet, and the idea that he wanted to be a real estate mogul, but he dragged me along with it. Me, being into entrepreneurship and also passive income, I thought that’s a cool thing to learn about and I’d like to try that out. It was part of my foray into learning about, so I was like let’s go to this San Diego Creative Investor’s event. 10 minutes into it, I’m like this is a messed up ass place. Two weeks ago, we were doing [socally 00:04:59] on the hill in La Jolla, got Mazda’s and Lambo’s in the driveway and 100 people hanging out on the roof with a pool, and now I’m hanging out with all these people at this creative investor’s event.
Alex Martinez: It’s a little different.
Nate Broughton: I spotted a young man across the room, and it turned out to be you, and I was like this guy seems like a normal guy. What is he doing here? You were very gregarious and right away I could tell that you were interested in talking and learning about what we were doing. I think we might have mentioned internet marketing or something like that, and I was just interested in learning what you were doing because you were so young, but it sounded like you were doing a lot of deals and working for a cool company. That was how we met. It’s a good example of why you should be willing to put yourself in awkward situations and awkward locations, especially if you’re getting into a new industry and trying to learn something because you never know who you’re going to meet.
Alex Martinez: Yeah, you’re exactly right. To touch on that, those meetings, SCDIA, they’re fun. Yeah, it was a real estate investing association event. I remember going there and you can network, I think, for half an hour beforehand. It was post Pledge of Allegiance, I think I did my networking and I had something to do afterwards. I wanted to network, get to meet people. 20 years old at the time, flipping houses, wholesaling property. As I’m starting to walk out, I think we made eye contact, or I see these two other young guys in the room. I’m just like Nate said, “Yeah, they look a little normal. Let me go talk to them.” We went over there and we just hit it off. I think a week later, you said let’s grab some lunch and that’s how our relationship started.
Alex Martinez: I was thinking today, I was just like man, how do you get lucky? It’s like when preparation meets opportunity. I was a young 20 year old just hungry, and that’s how I came to CT Homes, and working in real estate, I just took an opportunity and grabbed it by the horns. I think our relationship, I was in this spot on life where I was like man, I was just gung ho. I wanted to learn. I still do want to learn and always will, but we both hit it off because we both have that mindset of always learning and moving forward. It’s funny how that led to so much more, a bunch of friends working for your companies and a lot of good times as well.
Nate Broughton: Yeah, it led to a lot for both of us. From my side, selfishly, I was intrigued to meet another young hustler because I found it’s always paid off for myself … I really value the relationships and the energy, but also I’m always looking for ways to connect to people like you. It spawned off into this one to many connection to all these different people at SDSU and the Lavin Entrepreneur Program, which we should talk about a little bit because it’s a fantastic program. There’s probably 10 or 15 other entrepreneurs now who are in their mid to late 20’s that I know just because of you. I don’t know, you’re like the ringleader of all of them, right? How did that happen? You were 20 years old. You mentioned you were looking for opportunities pretty hard, and opportunities to learn but also get practical experience. You get into the Lavin Program at SDSU right around also the same time of finding CT Homes. How did both of those things happen?
Alex Martinez: Yeah, I think if we go back to how I came to San Diego is probably a good little point. I was actually originally going to a city college called Grossmont for my semester down in San Diego. I knew I wanted to go to San Diego State University but I just didn’t even apply. It was crazy. I didn’t take the time to even apply to SDSU. I was just like I’ll save money, I’ll go to a community college, go to Grossmont for two years and then transfer. Well, I get to Grossmont a week later, I’m like I got to go to SDSU somehow. How do I get into SDSU? Man, it’s weird, but every night … That was my next goal in life. Okay, I want to go to SDSU.
Alex Martinez: Every day, it sounds weird, but I’d go to bed and I’d envision myself in a San Diego State sweatshirt. Every night. I was like I really want to go there. Well, let’s go. Lo and behold, the universe is crazy, but there was this school grant going on from SDSU and they were accepting early transfers for the first time ever in one semester. I was able, instead of the usual route where you have to take two years … They accepted a bunch of early transfers. Next semester I was in SDSU. In that time period, that one semester, I met this guy. He was in the Lavin Entrepreneur Program. I came down to San Diego, and was always into entrepreneurial stuff. I knew I wanted to be my own boss. That’s just one thing I learned.
Alex Martinez: I saw he was in this program. I was like this program sounds amazing. It’s headed by a billionaire, Larry Lavin. He started the Alberto Culver Company. They take 10 to 15 students in each class going through SDSU. It’s a two year program where you get to meet with weekly business leaders, entrepreneurs. You get thrown in the business plan competitions. It’s just this hot bed, this hot mess, of business and entrepreneurship. I knew I wanted to be in that program so the goal was SDSU. Got it. Next goal at SDSU was get in this program. What the heck do I do? Before I was even in the program … It was a two year program. You can join it when you’re a junior. I was like okay, I want to be an entrepreneur. I want to do these things so what do I need to do to get there?
Alex Martinez: I asked the director of the Lavin Entrepreneur Program what do you do to get in there? He’s like, “Do a business plan, start your own business, do these competitions.” Lo and behold, that’s how I started doing it. You just meet these really cool people along the way. I was one of the first five members of the Entrepreneur Society at SDSU, which is just a student organization. Man, we grew that organization from five students when I think I was a freshman or sophomore to 100 plus paying members. From nothing to something really big. I just fell in love with connecting with people and meeting with people and finding commonalities among people. Someone’s always passionate about something, so it’s super cool figuring out what they’re passionate about and then helping them get there. That was just something I fell into.
Alex Martinez: I wouldn’t say I’m a ringleader, per se, but I like connecting people a lot, and I like meeting a lot of people. Here’s the thing, too. I was in college and Nate, we’re friends, and you’re like, “Hey, I need help.” I was like how do I help my buddy, Nate? He’s super cool. I don’t got money. I’m a broke college kid. I’m 20 years old at the time, or I’m 19. Whatever it is, but I do have human capital. I have friends that want to work, that want to learn, that are hungry so I’m going to refer the best, the best that I know, to you, Nate, so that everyone helps.
Alex Martinez: You’re learning. You’re super cool. Just connect cool people with cool people, and everyone’s just genuinely trying to live the best life you can. I think that’s why we’re all here in this room, too, at the end of the day. That’s just how it kind of all started.
Nate Broughton: All right. Let’s break in for the first time to ours and Alex’s conversation right here. Alex is telling these stories about coming down to San Diego and starting at a different college, and then deciding he wants to go to San Diego State, and finding a way to get in there pretty quick. Then, discovering the Lavin Entrepreneur Program, figuring out a way to get in there pretty quick. He tells an anecdote about meeting the director of that program and asking how he can get in, and then starting to take the steps to do those things. It’s hard for me to put into words what this makes me think about, Alex, and how I see this as a skillset because the way he talks about it is so happenstance.
Nate Broughton: He’s like “Well, I got down to San Diego, and I wanted to go to San Diego State. I wanted to get in the Lavin Program. Then, I wanted to start an Entrepreneur Society, and we grew that to 100 people. I’m just connecting good people with good people.” It seems just so causal, but for someone who’s 19 years old at that time, 20 years old at that time, to do those things and not have distractions or confusion about steps to take, or fear holding back, it’s really impressive to me. It impressed me at the time when I met him. He just seems to just do it.
Dana Robinson: Yeah, and think about the fact that he’s here on the podcast at age 26. As I listen to this again, the recurring theme to me is maturity. So many people at age 19 have this sense that ambition should be channeled entirely into say getting good grades, or doing what the parents have told them to get ready for college. What we have with Alex is this ambition to use college as a tool to achieve what he wants to achieve. I don’t think he’s a road scholar. I don’t think that he came into this 4.0 or a bunch of AP classes. He just simply said I want to do these things, and then he did. He took action. That’s remarkable.
Nate Broughton: Yeah, I think it’s very opt out-y. I think that’s maybe even what I admire about him most. It takes so many of us so long to figure out that maybe the path we’re on wasn’t our choice, or the conventional path that we’re on isn’t going to get us what we want. It seems like he’s known since the beginning of time basically, since he was an adult coming out of high school, what he wanted to do. Even if it’s something that just comes down the pike, and he’s like, “Oh, there’s this program here at SDSU that seems really cool” he realizes that it’s something that can be valuable to him, and there’s no fluff to it at all. He just starts taking action and makes it happen.
Nate Broughton: If there was one person on the planet who I felt like I could give a task to, and rely on them to get it done, I feel like it’d be Alex. That comes through in this conversation and that’s a trait that trumps any degree or pedigree or career path in my mind.
Dana Robinson: Yeah, I think this is a great podcast for young people because you have an example here of somebody that gets shit done, reaches out. A theme that you’ll find with a lot of people in the Opt Out Podcast is that they’ve got this audacity to reach out, and Alex certainly has that. It’s how he met you. It’s how he got into the programs that he got into, and that’s an encouragement that I think just because you’re young doesn’t mean you can’t do things.
Nate Broughton: You flew down to San Diego from the bay area very driven, and also, when you find something that you want, no obstacle’s going to stand in the way. You do these really practical steps that you’re describing that other people seem to not think to even do. Why? Why? Why?
Alex Martinez: To answer your question, two distinct things stick out for me. The first thing is how’d you become an entrepreneur, whatever, but just the first entrepreneurial endeavor ever was me and my buddy, Adam, were really young and it actually was lemonade. We decided to start selling lemonade, but here’s the thing. We ran out of lemonade, so that’s when really our thinking caps went on. The next best thing was, “Hey, man. What can we sell?” We walked to this park and we find some rocks. We’re like, “Dude, we can sell pet rocks.” We get all these rocks and we put it all on the table, and we started pitching pet rocks. Man, we only sold one, I think. I think we only sold one, but selling a pet rock for a buck, or something like that, that just triggered something in my head believe it or not.
Alex Martinez: Whether it was perceived value, I didn’t really understand at the time, but there’s something there where you can create value. You can go out and just create value somehow. I don’t know. It just triggered something in me. That was the first entrepreneurial experience. It was cool. It was cool. The second distinct thing, what really drove me when I went to college, and what really changed my life was my best friend’s family there was a tragic death. Someone died really, really young. Like in their young 20’s. Man, that just made me think. I went through a hard time because I was really close to this individual. It was just hard.
Alex Martinez: When he passed away, it was right before finals at Grossmont. I think at the time I knew that hey, if I do really well on these finals, I can potentially go to San Diego State University, the transfer thing. It was one of the hardest weekends of my life because it happened before the weekend, and then I had to take these finals just going through that state. Really, after mulling over that situation that happened, I started thinking what am I doing with my life? I think I was 18 or 19 at the time. I was like looking back, am I happy with what I’ve accomplished and have I really gave it my all?
Alex Martinez: That’s when stuff changed for me, man. I was like you know what? You get one life. You don’t know if you walk out on the street outside, eating an ice cream, you get hit by a car and you die. I’m not trying to sound pessimistic or negative, but you just never know. I want to wake up each day, and when I’m on my deathbed, I want to look back and be like dude, I gave it my all.
Nate Broughton: Okay, right here Alex gives us a little bit of insight to what drives his motivation and his mentality. He mentions a family friend who passed away suddenly at a young age, and that affecting him and maybe hardening his mindset to this no regrets, no fear approach to life. It’s not just lip service with him. A few minutes ago, we were talking about how it’s impressive that someone at this age can filter out all the BS and set himself on a path and take the actions to get there, but it’s definitely an Opt Out theme. This lack of fear, this entrepreneurial drive to take a chance, and Alex is doing it right here.
Dana Robinson: Yeah, unfortunately this brings me back to my bad tattoo.
Nate Broughton: How many times do we need to talk about this? I like this, man.
Dana Robinson: Well, you’re right. It’s a reoccurring theme for people that are taking chances is the idea that they don’t want to look back on their deathbed and think what could I have done? Did fear hold me back? Fear of failure. Does failure hold you back? Not just fear. You’re going to fail, my mantra is no regrets. It doesn’t mean I don’t regret things. I certainly make mistakes and regret things that I’ve said or done, but I don’t want to look back and think I should have taken that shoot. Alex has got that at a very young age, and that gets under his skin and gives him the oomph that he needs to take chances and do the things that he’s done.
Nate Broughton: Yeah, and I think he’s on this podcast and we, people who are so much older than him, have genuine admiration for him because like I said it’s not just lip service. I think a lot of people read a post on Facebook about quotes from people on their deathbeds and talk about how they want to live with no fear and no regret, and that can mean different things to different people but I think a lot of people don’t actually do that. I can’t imagine knowing Alex’s history that he has too many of those.
Alex Martinez: I took opportunities. I challenged the question, “What if I tried that?”. I don’t want to wonder that question, “What if?”. I want to attack that question. I’m not afraid to make mistakes, and that becomes a better habit as I go on, and I’m less and less scared to make mistakes, but always learning that hey, those mistakes you learn, you get closer to it, dude. You get closer to what you want. That’s something I learned in my 20’s because probably growing up in high school, I was afraid to make mistakes in a way. I didn’t really understand that hey, the more you work at something and practice and make mistakes, the better you’re going to get. I didn’t really get that til I hit college. I think some people or some parents instill that in their kids, but that’s something I learned right in college. I’m like oh dude, I found the ultimate life hack.
Dana Robinson: Fail.
Alex Martinez: Fail.
Nate Broughton: Fail, right.
Alex Martinez: Fail.
Nate Broughton: You’re figuring it out at a pretty young age. Are you 27 now?
Alex Martinez: Just turned 26.
Nate Broughton: 26. Okay, just turned 26. I mean, you don’t have a very long experiential framework to draw back against compared to most and you figured all this shit out and can look back on it and think about it at that age. I find that pretty impressive.
Dana Robinson: Remarkable.
Alex Martinez: I can’t take all the credit because I learned a lot from so many other people. Just you guys in this room, and even going back, I remember talking to this guy who did a business plan competition. I was like, “Yeah, I’m doing my first one. How’d it go?” He didn’t actually do one. He was like, “You know what? I regret never doing one.” He was like, “Go out there and go do it.” I was 19 and I was like dude, I want to do it. I don’t want to be that kid who’s 22 saying, “Man, I wish I did a business plan when I was 19 because that would have set me up for something in the future.” I just started doing those things, so I’ve learned from a lot of other people. That’s what I always try to do. Sometimes, I’m naïve and people tell me things and I still go against what they say, but sometimes I have to learn some things for myself, I guess.
Dana Robinson: Talk about some of the things you’ve learned the hard way. If failure is a great teacher, and you’re full of wisdom, there have to be a few great failures in the life of Alex.
Alex Martinez: First thing that comes off the bat, I won a few business plan competitions at San Diego State University. One was a natural cognitive enhancer for college students because I did some surveys on campus, and over 50% were abusing Adderall and Ritalin. I surveyed 200 plus students, won this competition and then, I won it, even had people willing to invest money in it. I was like you know what? I don’t really want to build a cognitive-enhancing supplement company. At the time, what I was thinking was if you start this business, you’re a cognitive-enhancing supplement guy for 20, 30 years to come, but that’s not the reality. I could have built that business for two years, sold it and been on to the next one. I think there’s a lot of opportunities I didn’t jump on in the beginning, and looking back now, I’m like man, when you have something that’s hot, when you have momentum, ride it out.
Alex Martinez: You don’t go to do it forever. You don’t have to put yourself in a box and just be the Crossfit guy, or be the real estate guy, or be the musician. You can do all these things, and you don’t have to do it forever. I definitely left let’s say money on the table, or opportunities on the table when I won these competitions. Money’s on the table and I’m like, “Nah, I’m good. I’ll go on to the next thing. Start from scratch.”
Nate Broughton: Interesting.
Dana Robinson: What about the successes? What was your first thing that you got into a groove, you hit a stride on?
Alex Martinez: Yeah, first thing, man. Okay, when I was 20, that’s when I started working at this company called CT Homes.
Nate Broughton: All right, quick note here. Alex mentions that he takes a job at CT Homes while still in college. He’s 20 years old here in San Diego. He lucked into that situation because you may know those guys. JD Esajian is one of the partners. There’s a couple other fellows in there, but they were the first generation of Flip This House and House Flipper TV on A&E. Some of you who are in to those shows might recognize those guys. They moved to San Diego after hitting it big on the TV circuits so to speak, but they kept running their business. It’s one thing that I still admire about them. They really did the work and we’re still flipping houses by the dozens here in San Diego. Alex gets a job there, kind of through happenstance, lucks into the situation and falls in love with the real estate world.
Nate Broughton: What I really like about what he does, and this mirrors things that we’ve talked about on other episodes, is he takes this job by the balls and works really hard for these guys at the ripe age of 20. He knows he’s got human capital. He ends up doing 20, 30 deals for them in his first year. That’s pretty impressive, and I know if I owned that company, I would love him.
Dana Robinson: Yeah, a lot of people might listen to this and think, “Wow, it’s pretty sexy to get to work for some reality show person, somebody that’s famous.” That’s cool, but what he did right was find someone that knew how to do something really well that would give him the freedom to touch and do everything. In a year, he’s gained an expertise that will be with him for the rest of his life. A lot of people are like how do I get a job or how do I get skills after college, or how do I break into business? You got to become good at something. How do you do that? You have to do it. How do you get those skills? You find somebody who’s doing it, and doing it well, and you say I want to do this with you. He did that. Regardless of whether they’re famous or not, this is a great model for anybody out there.
Alex Martinez: CT Homes, for those of you that don’t know the company, they’re on the TV show, Flip This House on A&E. They did lots and lots of property flips in Connecticut. They’re on the TV show, so if you ever heard of Than Merrill, Paul Esajian, JD Esajian, they’re the owners of the company. When I was 20, they actually moved from Connecticut to San Diego. Anytime a company relocates, there’s new systems. It’s a different real estate market. There’s just different things that take place in different areas for real estate, different ways to acquire deals, stuff like that. When I came into the company, I decided to go all in on this real estate thing and just learn the flipping business. I learned that this opportunity was on my hands, so I went all in on real estate investing. I was the first one to the office, I was the last one to leave. I was reading books 24/7, asking as many questions as I could, and within 45 days of joining that company, I did my first deal for the company.
Alex Martinez: I didn’t know anything about real estate investing, I’m 45 days to my first deal, and that deal was something called a wholesale. Essentially, you get a property under contract and then you sell the rights to that contract to another investor, who then wants to renovate it. That’s called a wholesale. You essentially sell the contract. What I was able to do, I did on this specific deal about eight hours of work and profited $22,000 for the company essentially by myself. I negotiated the contract, get it under contract, and that was a huge, huge win for me. Opened my eyes, changed my life because I understood. I did the math. I was making $2750.00 per hour if you broke it down for how much profit came in on the deal and how many hours I put into it. That was another turning point in my life, another big success of wow, this thing of being successful, it’s a real thing. It’s not some illusion. Alex, you’ve been pushing yourself to get this taste of something and now you just tasted it and now’s the time to go hard. Now’s the time to keep going.
Alex Martinez: That was my first big success, I’d say. Then, that year, I personally brought in over 33 deals that we renovated, we flipped, we wholesaled. My acquisitions brought in over a million dollars of profit. Not revenue, profit. I was doing this at 20 years old. That was another big success looking back on that, and that’s once again, I haven’t tried to slow down since then, but just that whole experience of doing tons of deals and bringing in people under me, being an acquisition’s manager and having a team where we collectively did over 55 deals. From knowing nothing from real estate and then being on a team that had 55, that was a big success for me.
Nate Broughton: You know, we look at you. We bring you in here, we say, “Alex is an entrepreneur. He’s been entrepreneurial since at least the age of 18 …” Well, no. Since-
Dana Robinson: Since the lemonade and pet rock.
Nate Broughton: Since the pet rock. Born entrepreneur, right? Alex is an entrepreneur, but like we’ve seen in a few other conversations, the juices really get going when you take a job somewhere, at a young age, and you take that job by the balls. You do a really good job, and it gets you excited. You see the profit that you create for someone else, and it becomes a springboard into future endeavors for yourself, right? You didn’t walk in there with any pretension about I want to be an entrepreneur, I am an entrepreneur, I need to be working on X task. You did the most menial sales task that could be done for that company. You created a deal from scratch. You made them a bunch of money. The rest is history, right?
Alex Martinez: Yeah, the rest is history. One thing I’ve learned is … Well, one quote I’ve heard is you can do business with friends, or you can make friends through business. In that company, I made a lot of friends through business, which is cool because people get to see how hard you work, and they see you every single day. You have this different relationship with people, so those people that I’ve all worked with when I was 20 years old, I’m really, really good friends with all of them still and I still work with them. A lot of them. That was a cool thing to learn when you’re young. If you have an opportunity like that, to work for someone else, just absolutely crush it and it’s going to pay off dividends for years to come.
Dana Robinson: Right. You weren’t asking for more money. You were looking for the tools that would carry you through the rest of your life and the relationships?
Alex Martinez: Exactly. Exactly. You could put a price tag on how much money I made, but I really think that education, that experience, was priceless. I get to call San Diego my home. I feel like that large part of that. Great way to make money. This was happening when I was going to college. I was still going to school.
Nate Broughton: I wanted to qualify that with you’re still a full-time student during all of this, right?
Alex Martinez: I was a full-time, and then I went to part-time, and then I went to dropping out. That’s kind of how it went, but since then, I left the company a little after a year. I went to a trip to Barcelona, Spain. I was 20. I look back on my year and said, “Wow, this was a heck of an experience and you’ve done a lot.” Honestly, I sacrificed a lot. I sacrificed friendships. I sacrificed going to college and my classes, and even my own health. I was 20 pounds heavier. I’m a 165 now, but I was weighing 185. When I went to Spain, I was able to have a three week break, look at how much I’ve accomplished, and I said to myself, “You know what? This knowledge you have, it’s not going anywhere. It’s not just going to float out of your mind.” I was also in the Lavin Entrepreneur Program at the time. I was like Alex, you have a hell of an opportunity in this entrepreneur program to keep on networking and rubbing elbows with top business leaders in San Diego.
Alex Martinez: They keep just pouring in, these entrepreneurs, every single week who talk and tell us their business stories. I’m like you can’t drop out of school yet. What I did was I left CT Homes and I went back to school to fully embrace that Lavin Entrepreneur Program. That was the reason why I stayed in school.
Nate Broughton: That was smart. That was really smart, actually, because the born entrepreneur would probably think that school is a waste of my time, but it’s an environment for you to be connected to all these people. SDSU’s program is pretty unique, and I say that having spoke at, I don’t know, six or seven different universities, both here and in the Midwest. I’ve seen a handful of them, and the funding for the program, the people that they bring in, it’s fantastic. I think it’s smart for you to realize that that was an environment that you should stay in because you can’t be in that environment forever. We’ve talked about college being an opportunity to fail with really no repercussions. That’s one thing that entrepreneurs should think about when they’re there. It’s also a bringing together of people that you’re never going to be able to replicate no matter how many socally’s you start, and how many elite retreats you go to.
Nate Broughton: You’ve talked about how your network has carried forward from there, not just with professionals from the community but a lot of the other entrepreneurs, young entrepreneurs, that you were surrounded with at the time. I think that was a really smart move for you to stick around, at least for a while.
Alex Martinez: Thank you. We may have had a chat or two about it at the time [crosstalk 00:30:28] said stay in school.
Nate Broughton: I’m glad I said that.
Alex Martinez: We definitely had chats about that. I graduated from the Lavin Entrepreneur Program, but like we talked about, I really wanted to go to SDSU to be in that program. Once that program was done, that was the next semester I dropped out. I got my certificate from that program, and I’m not here to bash school or college and like you said, it was an awesome environment of the Lavin Entrepreneur Program, but also just the student organization of entrepreneurs society. All these young kids trying to figure out life, trying to figure out business. I found some of my best friends through that environment today. For people listening, if you’re thinking about dropping out of college, make sure you extract the resources out of it, and don’t just take college just because it’s a cool thing to do. Go there, get what you need out of it, but you may not need that degree to be that entrepreneur if that’s something you want to do.
Nate Broughton: Yeah, you’re paying to be there. Don’t sit there. You need to order off the menu, basically, is the fucking advice. They’re going to try to feed you Marketing 1400. That’s a fucking joke. Figure out where the cool people are, and the resources are, that are actually going to benefit you while you’re there and take advantage of them. Don’t blame the institution. You should be blaming yourself because there’s a lot of people who hack it for their benefit … There you go.
Dana Robinson: We’ve talked about the Opt Out approach to education. You’ve got to evaluate what’s being sold to you. Are you going to go spend $200,000 and graduate with a degree, and have nothing you can do with that except complain about your student loan debt or are you going to leverage what resources you can find, get the education you need to get out of it for the price that you feel is fair for that and graduate, or not graduate, with those experiences and go on and use those in your life? That’s the Opt Out approach to education. It’s not about following the rules that are set out, and I think that’s where people get ripped off.
Nate Broughton: Yeah, the majority. Your .edu email address and your position as a student are huge advantages to you to do the audacity of reaching out. People will respond to students. It seems like there’s less risk in responding to a student. There’s less obligation in responding to a student. Business owners are willing to talk to you. They’re willing to let you work there. Work there for free. You may not have a lot of capital to give at the time, but you have human capital, and you have human capital in your relationships with other students. You could come in and be like, “I’m really stupid, but I know a lot of smart people.” I’d be like welcome to the organization. It’s hard to find good people, especially the entrepreneurial path in a world that exists here in San Diego, and in general. We’ve talked about the ones I was around in Missouri.
Nate Broughton: We love young, energetic college students. I don’t really care what your degree’s in, or what you’re really interested in as long as you’re interested in hustling and learning. It sounds like we’re going to be preaching that a lot on this podcast, but Alex is one of the shining examples of how to do education the Opt Out way, and the right way.
Dana Robinson: All right, every episode of this podcast has got to have at least one shameless plug for my book. One of the components of the Opt Out life is to eventually get some real estate. That sounds scary for a lot of people. It sounds expensive for a lot of people. I try and bust some of those myths in the chapters where I cover real estate, but what I like about Alex is he’s got a lot of real estate experience at a young age, so I’m about to pop the question and get him talking about it. You’re going to learn more from Alex in the next 10 minutes than you might learn from those chapters in my book, including some really cool ways to get what I call a chip at the table. How do you first get into this game when you got nothing? If you’re interested in really getting into the Opt Out life, and learning about real estate, listen closely to the next section.
Dana Robinson: I want to talk about real estate.
Alex Martinez: Let’s do it. I’m into it.
Dana Robinson: I talk a lot about real estate in my book, and we’ve had some amazing interviewees. Some of the guests we’ve had have been wildly successful with side gigs, living amazing lives, and not a lot have dabbled in real estate. All of us here have. Nate has, I have, and you have. I want to get some input from you. Walk us through your experiences in real estate, deals you’ve done, how you’ve made money, how maybe you’ve lost some money. I know I have.
Nate Broughton: I definitely have.
Dana Robinson: Let’s talk real estate.
Alex Martinez: Real estate. There’s something I like to call the evolution of a real estate investor for the path that I went down. First, we started out with wholesaling, like I talked about in my first deal as a wholesale. That’s how I learned real estate. Okay, I can flip property. I can flip a contract and make money in two weeks from eight hours of work. From there, then there’s fixing and flipping real estate. That’s when you borrow capital to then invest in a property, renovate it, and resell it for a profit. That’s fixing and flipping. Then, the next part is buying and holding property. That’s how you build long term wealth. This is just something that through taking action and looking back on the years, that’s the path I followed. Now, what I’m focused on are some bigger land deals and multi-family apartment buildings that I’m looking at domestic growth markets across the US to really buy and hold property so that I can then get monthly passive income. I think that’s truly the Opt Out way.
Alex Martinez: Passive income is something that’s huge where you have your money work for you, coming to you on a monthly basis, whatever it is. Let’s talk about deals, I guess. That’s the path to evolution of a real estate investor. Deals, a lot of flips, a lot of renovations. One of the biggest deals I’ve been a part of, a flip, was actually here in La Jolla. A house on Desert View, which was a really cool one. I was able to acquire it. It was $284,000 of profit, so it was a nice flip. Beautiful views. 20 at the time, really cool to be able to do something like that. Then, also that same year … I’ve only lost money really on one deal, and that was one where we lost $26,000 on it that same year, too. That was a great learning experience because when you’re riding high and you think things are going good, and then you lose $26,000, you’re like okay. It puts you in check.
Nate Broughton: How did you end up losing that money? Did the renovation cost too much? Was it on the market too long and you had to sell for a discount? What bit you?
Alex Martinez: I think we thought it was going to sell at $525,000. We thought it was going to sell higher than it actually did. It sold at $505,000. We thought repairs were going to be $50,000. Repairs went up $25,000. When the sales price decreases and the repairs goes up, that eats directly at your bottom line. Then, on top of that, you’re borrowing capital to flip property. That’s how you do it without using all of your own cash. You’re borrowing capital, you’re paying an interest rate, so every single month that property goes on when you’re flipping a property, you’re losing money in interest. It extended an extra few months than was anticipated and then, it was just on this weird spot of a street, on a corner. We thought it wasn’t going to be an issue. All those things, all those flags, they add up.
Alex Martinez: That was a big learning experience because now if I ever do a flip, I say what’s the worst case scenario if repairs does increase $20,000? If we find it actually needs a whole new HVAC, or we need to put a whole new fence in, whatever it is, if that goes up $10,000, if the sales price goes down $10,000, $20,000, can we still make money? I’ve learned to analyze things much, much more conservatively from that one scenario.
Nate Broughton: You have to be willing to walk away from a deal, right? If it doesn’t pencil out, the wise move is to not risk it.
Alex Martinez: Absolutely. One of my mentors, JD Esajian, says the best deal he’s ever done is the one he never did because you save a lot of time, a lot of money, when you can just walk away and when you can be rational. Rational and conservative. When you start getting emotionally invested into deals, when you bring emotion into it, that’s when bad stuff happens. You start thinking irrational. You start thinking it’s going to be a way better deal than it is. You convince other people it’s going to be a better deal than it is. Really, if anyone’s interested in real estate investing, get third party opinions. People who are invested into the deal. If you know agents, or anyone else, have someone else who has a fresh set of eyeballs look at it that’s professional and take their advice, and analyze it and then come back to the table. A lot of beginners, they get emotionally invested into the deals.
Alex Martinez: If they’re learning real estate investing on their own, flipping houses, the first deal they find they may really want to do it because it’s the first deal they find, and they have this scarcity mindset. I had this one kid I was talking to I met at a real estate event, and he was working with this one agent. Basically, this agent said, “Oh, this house. You buy it, it’s going to sell at 1.2 all day. All day. It only needs $100,000 worth of repairs.” The purchase price was $770,000. He ran the number and he was like, “Dude, I’m going to make $300,000 if I flip this property after all expenses.” It was like $300,000 or $250,000.
Alex Martinez: I analyzed the property for him, realized that, “Hey, this property you’re in, man, the comparable properties, to understand the sales price, you’re looking at properties that are in a gate, private community and the property you have is outside of that. That property is only going to sell at $900,000. Those repairs of $100,000? Those are actually like $150,000. I’m sorry, but your agent doesn’t really know what he’s talking about. If you do this deal, you’re going to lose $200,000.” He had three days left on his inspection contingency, and ended up canceling out of the deal, but he was gung ho before ever talking with him. I just wanted to share that story because some people do that, and they lose $200,000 on their first deal and it hurts them for a long, long time.
Nate Broughton: The path to real estate flipping profits is littered with more landmines than probably just about anything that intrigues people as a potential entrepreneurial endeavor or investment opportunity. I mean, you have these TV shows that are showing all these deals, and throwing out numbers. I’m curious to get your opinion on the contrast between what’s shown on TV, because you’ve worked with guys who have had a TV show, teach this stuff and still do this stuff. We’ve got to think about the people that are listening to this that haven’t done real estate investing, what they’ve seen and what the reality is. I get what you’re saying as far as a logical path to go is wholesaling to flipping to bigger land deals and buying holds. That’s, I think, fast forwarding through the path that someone can take. For the beginner, and all they’ve got is those things on TV, what’s the reality of a first couple steps that they can take, and a couple things that they really need to watch out for?
Alex Martinez: As a beginner, I think the first thing to do is bust some misconceptions about real estate investing. One misconception is that you need to be licensed to invest in real estate, which isn’t true. My first few years of investing in real estate I wasn’t licensed, and you can do that legally. You don’t need to get licensed, so that’s not a barrier. That’s the limiting belief I hear a lot. People are like, “Oh, I need to get licensed.” The next one is, “Oh, you need a lot of money. I need my own money to do it.” That’s not true. I borrowed capital before from people who have money, and that’s what a lot of fix and flippers do to do these deals. The third one is that you need a lot of experience to do these deals, as well. You do need to get a good amount of experience, but like I said, I did my first deal in 45 days.
Alex Martinez: It’s about getting the right knowledge and the right experience. First logical steps if you want to do a real estate deal is getting educated. There is a lot of fluff out there, a lot of people repeating the same things over and over. That’s actually why I do consulting, and I actually have a program I’m releasing as well called Pro-Wholesaler, so that people who want to start down the path of the evolution of a real estate investor, they can actually start wholesaling, which is where I recommend starting as a real estate investor if you want to fix and flip and make a career in investing, and make capital, quick capital. When you wholesale a contract, you’re not buying a property. You’re getting it under contract, and you’re selling that contract. You’re not borrowing $500,000 and then an additional $50,000 to renovate it and hope you sell it at $900,000. You’re just getting it under contract, and you’re essentially getting something called a wholesale fee, which is like a finder’s fee for getting that deal.
Alex Martinez: That’s how you can make $10,000, $20,000 in two weeks, four weeks, whatever it is. That’s what I’ve done repeatedly so when I started my own real estate investing company, to first get money through the door in 30 days, we did a wholesale deal. That’s how we got the initial capital for the company. The reason why I’m explaining all this is because if you want to get in real estate investing, I recommend start wholesaling so that you don’t borrow a half a million dollars and if things go south, then you’re not in the hole and you’re not in debt a lot of money. What I recommend is starting to learn how to wholesale and then when you a wholesale a deal to a fix and flipper, you can learn the whole entire process from that fix and flipper. They’ll pay you maybe $10,000 for this deal, and then just stick by their side and they’ll be like your quasi-mentor. As you want to progress as a real estate investor, and learn what they actually do on the TV shows, you can actually do that by learning from someone who’s actually doing it.
Nate Broughton: That’s ProWholesaler.com.
Alex Martinez: ProWholesaler.com, yep.
Nate Broughton: /OptOut, you’ll get your first month free.
Alex Martinez: The big reason why I started that program as well is because there’s a lot of people who have a lot of questions, and a lot of people with bad advice. I’ve had multiple people reach out to me who are sending offers on properties with no contingencies and have no idea what they’re doing.
Nate Broughton: All right, listen up right here. Let’s break in and make a few points, because Alex is giving us some good hard examples of mistakes that newbies make in real estate. He’s actually moved a piece of his business into educating people online and through the courses that he’s created about how to do what he does. A little plug for Alex there, but it’s important. I came to appreciate it even more as he’s telling these stories because I’ve invested in real estate. Dana’s invested a lot in real estate. We have our war stories, but partially because of the TV shows out there and partially because it’s just a well known way to try to build wealth, there are a lot of people that come into to that real estate investing end up getting burned because they’re not educated and they don’t know what they’re doing. This is not like starting a website. We talk a lot about that on the Opt Out life, too. Internet marketing and all that stuff.
Nate Broughton: For me, the contrast is significant. There’s a lot more ways to get burned in real estate that can affect you long term than if you start some goofy little website and throw it up and loose $100.00. This can be some real money involved, and there’s a lot of legalities and contracts that aren’t there when you’re just trying other side gigs, so this is one where you really want to learn what the hell you’re doing, get advice from an expert and/or work with an attorney or an agent, right?
Dana Robinson: Right. There’s a lot to learn. Not to say it’s unattainable. You don’t need to be a lawyer. You don’t need to be a broker to do good real estate deals. In fact, some of the best investors are people who understand the deal from the business standpoint and are not necessarily technically inclined, or legally inclined. There are a lot of great books. We have a few recommendations that we’re going to put on Alex’s bio and on the website, so we really recommend people get a sense of what they’re doing, learn from some other people, listen to what Alex has to say, attend some seminars. Avoid the hype. There’s a lot of people that are going to tell you how to become a millionaire in real estate. There are good books, and they have sexy titles like that, and you should definitely read those, but understand that the risk/reward here is really dramatic.
Dana Robinson: You have the potential to make hundreds of thousands of dollars very quickly, and you have the potential to lose everything really quickly as well.
Alex Martinez: When you send an offer with no contingencies, this essentially means you’re going to buy it no matter what. When you’re talking about $100,000, $200,000 property, and you’re 20 years old, you don’t want to do that. What you want to do on every single deal, what I recommend especially as a beginner, you have contingencies on your contract which say, “Hey, if this property doesn’t pass my personal inspection, I can legally back out of the deal.” I’ve seen people be educated the wrong way, that are learning the wrong way, and trying to scrape it together. That’s really why I created this program because people need help and they want to learn the right way. I don’t want people to be hurt. I don’t want someone to reach out to me six months down the road saying Alex, can you help me out with this situation? The seller’s trying to sue me. I say, “Let me see the contract” and it’s just a horrible contract that they shouldn’t be using. It’s a scary thing.
Alex Martinez: That’s why I like to help people do it the right way. It’s not hard. Just including one contingency on a contract can save you from six months, 12 months of headache and a little lawsuit.
Dana Robinson: Now, you’re saying someone with almost no money can learn real estate by finding a good deal, putting it under contract with contingencies, and then selling that to somebody?
Alex Martinez: Absolutely.
Dana Robinson: Do they need to put the initial deposit down?
Alex Martinez: In California, usually you have to put a deposit within 72 hours. If you can wholesale a deal within 72 hours, you don’t have to put it down.
Dana Robinson: Otherwise, you’re going to need some capital, but that number is any number. You could pay $1,000 and you’ll get that back from whoever buys it from you, right?
Alex Martinez: Exactly, yep.
Dana Robinson: It depends on what the seller’s willing to take for your proposed initial deposit.
Alex Martinez: Mm-hmm (affirmative), exactly. The deposit’s refundable, so if you put the deposit down and then the deal doesn’t work out, and it doesn’t pass your inspection, you can legally back out of the deal.
Nate Broughton: Sometimes it’s not refundable, right?
Alex Martinez: You have to clarify that it’s refundable. Now, in the California Association of Realtor’s contract, which is a pretty solid contract, it’s refundable by nature in that contract. The contract is always the law of the land, and I think that’s what people who are getting into real estate investing need to understand. Whatever’s on that contract that you sign with the seller, that’s what’s going on. If anything goes to court, anything like that, that’s what you refer to. A lot of people, they sign a contract and they ask questions afterwards. They ask me questions, I’m like, “Well, what’s on your contract?”. On the contract, it’s usually refundable if you’re using the California’s Association of Realtor’s contract, but for anyone listening, always read your contract. Understand what’s on there, and I recommend doing refundable deposits. It’s pretty common.
Nate Broughton: If I’m a newbie, Alex … We’re talking about contracts. Contracts are the law of the land, both figuratively and actually. I’m a real estate broker. Dana’s a real estate broker and an attorney. We have access to these contracts. If I’m getting into this thing, I’m one of your students, how do I get access to these things?
Alex Martinez: I have contracts, and they can be used as samples and examples, but also teaming up with agents or brokers in your area. They all have state approved Association of Realtor’s contracts that you can use, and that’s what I really recommend.
Dana Robinson: You know, there’s the forms, too. You can go buy them physically. The non-licensee’s can go to Ronson Road in San Diego and just by the car forms. Paper.
Alex Martinez: Perfect. Awesome.
Dana Robinson: You can’t get their digital forms unless you’re licensed.
Nate Broughton: Sounds like a real estate association.
Alex Martinez: There you go. One thing I do that’s a little different than other investors as well is I like to take offensive marketing strategies-
Nate Broughton: Dana, you’ve done a lot of real estate investing, much more than probably Alex and I combined just over the past three decades. You’re a licensed real estate broker. Alex has obviously turned this into a business. It’s been his focus. It’s probably going to be his career for a while. Not forever, but maybe for a while. He’s got these processes down. He’s very experienced in this, but you’re more of a casual real estate investor. How do you get deals?
Dana Robinson: Almost all the deals I do are for my own benefit. I got licensed as a broker 2001 to not have to pay brokers, but that also meant that I had to learn everything brokers do. It was easy enough to pass the test. To be honest, those of you out there that are worried about this licensing process. It is completely doable. People that have good retention will walk in after study and just pass it, but for a person that’s a little afraid of it, you take a course and you’ll pass it. You got to learn. Once you have that license, you got to learn the business. That means hanging out with some realtors, and working on some other people’s deals. For me, I just started looking for deals that I wanted so I could cut out the broker and save $25,000 that I would keep for myself.
Nate Broughton: You’re leveraging your MLS access that comes along with that brokerage?
Dana Robinson: Absolutely. [crosstalk 00:50:58]. I’m looking for those deals on the MLS. I set up watches to myself as a client, so every day, I get some notices with the zip codes I’m watching. I watch for years before I buy. I was looking for a fourplex while I was in Bali the entire time. I spent 2015, part of 2016 in Bali not ready to buy, but I triggered the zip codes I wanted for two to fourplexes, and I was getting emails the whole time so I could watch the trends, see what sold, see what didn’t. That way when I entered that market, I had some knowledge of what a fair price would be. I would know it when I saw it. In fact, not long after being back from Bali, I found an excellent fourplex. I had to be watching. I got it on the first day within hours of the listing. Had it under contract and bought that. It’s a cash-flowing, $2,000 a month in excess of its expenses a year and a half later.
Dana Robinson: Then, if I have friends or family that say, “Hey, I would like to do a deal and I want to use you as a broker” in some cases, I will. I’m careful because I’m not the realtor that’s going to drive somebody around in a minivan and show them all the houses in town.
Nate Broughton: You mean in a 3 series. At least, 3 series.
Dana Robinson: Yes, there’s only one seat in the XL500 right next to me. I have brokered deals for friends, business partners and family. I’ve tried to leverage my expertise if I think I can help them. If I can’t, then I’ll send them to another realtor.
Nate Broughton: Do you get hit up by wholesalers? Have you ever worked with a wholesaler?
Dana Robinson: I haven’t. Nope, I haven’t done any deals with wholesalers.
Nate Broughton: I think the point there, perhaps, is Dana’s a real estate investor but he’s more of a personal real estate investor. He’s not doing this as a business. I think most wholesalers will typically work with … I don’t want to say habitual buyers, but real estate flipping companies. If you’re looking to wholesale deals, you probably want to hook up with somebody who’s doing this at scale and not a Dana.
Dana Robinson: I’m buying and holding so I’m past the point … I totally agree with Alex’s strategy. If you’ve got nothing, you don’t have a dime to rub together, and you want to get into real estate, you start wholesaling, you’ll get your first $20,000. Keep your day job. Now, take that and start looking for how to leverage that to get yourself a deal that you can fix and flip. That might make you $100,000. Now, you’ve got the chip at the table. I’ve already got chips at the table, so I’m a buy and hold investor. I would leverage my real estate knowledge, and my broker’s license, and the MLS access and all the forms so that each deal I do, each million dollar deal, is $25,000 to $35,000 that I’m keeping.
Nate Broughton: I enjoy that as well. That’s why I did it.
Dana Robinson: Exactly.
Nate Broughton: I mean, the main reason. If you’re interested in real estate, I can also speak from experience to say that it can be worthwhile to get a license. Depending on what state you’re in, I also have a real estate broker’s license in Missouri and it was a little bit easier even there to get it than California. Surprise, surprise. Check it out because you can leverage it off and on for access to the MLS to deals. It also puts you in the conversation with wholesalers and other investors, and it’s something that you can leverage for them. Alex and I have done some deals together on the wholesale side where we’ve been able to get the relist … Basically, we go off and sell the house after the flip is completed, and you got a chance another bite at some commission there. It’s another thing that can be a part of your toolkit if you’re looking to invest and you’re not really sure where it’s going to go.
Nate Broughton: I think it’s a smart thing to invest a little time in because not only can it increase your options going forward, and maybe lead to deal opportunities, but it’s also a way to educate yourself in a way that doesn’t necessarily cost a lot of money. Forcing yourself to go through the academic process of studying for the test and taking any courses you might have to do, it’s not a bad thing to spend your time on if it interests you. How does real estate investing … I’m going to bring it back to the Opt Out life. How does it play into the mix? Dana, you mention real estate investing in a few chapters in your book, the Opt Out book, but also just in general. Let’s talk about the lifestyle that it affords, and also just the general concept of passive income and things like that. Real estate is definitely one of those pillars that should be discussed and that’s probably going to be a part of just about anybody’s opt out strategy in one way, shape or form, right?
Nate Broughton: It’s a great side gig. It’s a great investment vehicle for various reasons. Let’s bring it back to the opt out.
Dana Robinson: Alex, I’ve got two questions for you. One is is real estate empowering you to live the opt out life now? The other is how do you envision real estate empowering you to continue to leverage that to live a life you want to live?
Alex Martinez: Yeah, 100% it’s empowered me to get me where I am today. What’s cool about internet marketing is you can send an email and make money. What’s cool about real estate is you can make a phone call and make money. I was at Coachella two years ago having fun with my friends, and I got a phone call on a wholesale deal that I had just sent out an email that week. This guy said you got it at the price we want. I said, “Cool, let me make another phone call.” Made another phone call and that turned into a $10,000 deal while I was at Coachella.
Dana Robinson: Which almost pays for Coachella.
Alex Martinez: Which almost does, yeah. I’m still about five grand in the hole.
Nate Broughton: Call back to the Bryan Rahn ticket episode.
Alex Martinez: Things like that, you can set yourself up through real estate to build these relationships that, as you grow as a real estate investor, you can leverage these relationships that you’ve already invested a lot of time into and you took a lot of time to build and make a lot of capital from it. It’s empowered me to get to where I am today, live a great life.
Dana Robinson: Do you work for anybody right now?
Alex Martinez: I work for no one. I work for myself, and I enjoy that. I love that. I love being in control of my own destiny. I love carving my own destiny, and it has empowered me to live the Opt Out life. Just like we were talking about, I booked a one way ticket here. I think I came here originally thinking I was going to be here for a week, but I’m going to be here a little longer. Maybe three. Also, as I progressed down this path as a real estate investor, just like we talked about, I’m analyzing, looking at a 2.4 million dollar deal in South Carolina with one of my business partners, Stan [Gemlin 00:56:52]. If I’ve never went down this path, I wouldn’t have been able to do this. The estimated profit on this deal is a million dollars. It may go through. It may not, but doing stuff like that, all it takes is one deal to really set you up for years to come.
Alex Martinez: On top of that, these buy and hold properties where you can play almost real life Monopoly and rent out your properties and get $20,000 per month by having a portfolio of 25 properties, that’s a real thing that you can do and that you can set up.
Dana Robinson: Alex here is talking about going big on some deals. This is perfect for Alex, because he spent years wholesaling property, doing some flips, making some money and now he’s trying to parlay that into some real cash. He’s talking about million dollar deals. He’s talking about long term holds that accumulate to the point where you’re making $20,000 a month. This is definitely the Opt Out life. This is where you want to reach when you can, but I want to be sure that people don’t perceive that real estate’s unattainable, either. I have a specific example of a pretty fancy house in the very neighborhood where our studio is here in Mission Hills, San Diego. A very close friend of mine was looking for a condo. I convinced her to start looking for two, three and fourplexes instead, where she could live in one unit and rent the other units. She found a great property in this neighborhood that she bought for $660,000 with $30,000 down on FHA financing.
Dana Robinson: You could borrow that from your 401k. You could borrow that from family or have that gifted to you from family. There’s a lot of ways to get into real estate that is income property, that’s generating rent, with very little down, and then you get a chip at the table that way. Even though we all aspire to the goal Alex aspires to, and you should to, getting in and getting started can be really affordable.
Nate Broughton: That even reminds me I own some real estate back in Missouri where I’m from, and the numbers in San Diego, even though we brought that down a couple notches, might still seem kind of high to some people there. I knew guys back in college who were buying duplexes and fourplexes with just a couple thousand dollars down, I think. The FHA 203K program is available, and like Dana mentioned his example of someone using the FHA loan program. Figure out what you might qualify for through that program if this interests you because you might be able to get into a property that is very cheap for you on a monthly or initial outlay. Live in one unit and have the person in the other unit, or the person in the other three units, pay down your mortgage and live for free. That’s definitely a good hack for beginning real estate investors.
Dana Robinson: Right. You mentioned that 203K program. That’s an FHA loan where you still only put down three and a half percent and the loan will include rehab money. You can buy something that needs work and the bank will build that in to the financing. You could buy a fixer-upper two, three or fourplex. Live in a unit. Once they’re rehabbed, the loan kicks into a normal loan. It’s a pretty fantastic way to enable hustlers to get into real estate.
Alex Martinez: What I find really amazing for entrepreneurs about real estate is you can see the path if you keep going down it. Okay, I understand if I can buy this property in this state, put 20% down on it, and keep doing that over and over and over again, I can build a portfolio where that scene of sipping a pina colada on the beach, that’s not too far away. Dana, you were just in Bali probably sipping something on the beach.
Dana Robinson: Yeah, actually, the drinks are expensive in Bali. That’s the only thing that was expensive in Bali, but I did. I sipped on plenty of drinks in Bali.
Nate Broughton: Part of the reason you were able to make that trip was because of your real estate [inaudible 01:00:27].
Dana Robinson: Yeah, absolutely.
Nate Broughton: I’ve come to find that a lot of us who are entrepreneurs, and that probably overlapped a decent amount with the Opt Out crew in life, we’re all doing a little bit different thing right now to make cash flow, to have short term wins, and also base hits where we make six figures off of a deal, or something like that. Most of our long term plan is faceless landlord, right? It’s like sitting somewhere, not getting bothered, and having a bunch of rent checks being deposited somewhere. I feel like that’s almost what all of us are going toward.
Dana Robinson: Yeah, I’ll use one of my properties as an example of the long term purchase. Fourplex. When I purchased it for a million one fifty, it needed about 80 grand in work. Then, I was renting it for … Let’s see. Rents were $5500.00 a month. After my rehab, total rents were $7500 a month. The costs are $5500 a month, so I’m $2000 positive. If I put that $2000 back into principal reduction, in about 15 years the property will be paid off. Now, whatever inflation adjusted rent that is, it’s $7500 in today’s dollars, and most people could figure out a way to live on $7500 in retirement money. In fact, most people don’t retire with that kind of money. If you had all your money in your 401K, and you had a million dollars in your 401K at retirement, you probably aren’t still going to make $7500 a month.
Dana Robinson: That’s just one property. If you accumulate two or three … You use leverage to do this because you’re borrowing at a time when you’re earning other money so you’re able to leverage to the banks and finance these, and then have the renters pay them off for you, so in 20 years, in theory, we’re sitting on the beach collecting rent checks.
Nate Broughton: Yeah, and we live this life where we’re definitely not going to be getting a pension from anywhere. We’ve talked about how the eight figure exit is always a potential goal, but that doesn’t really happen to most of us.
Dana Robinson: Base hits with most of the people that we’ve had in for the podcast are successful by any measure, and none of them feels like they’ve made a home run. Everybody’s progressing toward their goal, living the life they want, making base hits.
Nate Broughton: The logical, most realistic, most accessible path to passive wealth building that will pay off in retirement is exactly the story you just told, which is real estate investing.
Dana Robinson: Do you have any side gigs?
Alex Martinez: I feel like everything I’m doing is a side gig now.
Nate Broughton: Say that into the mic. [crosstalk 01:03:02]
Dana Robinson: We try and drill down into specifics because if we’re trying to tell someone how to create a side gig that makes them $1000 a month, or some guys $10,000 a month, or whatever, we want to empower our listeners to get ideas and be like, “Oh, well, I could do this thing and it makes a little extra side money.” I feel like most people hustling real estate, it’s all side gigs. It’s teaching real estate, it’s brokering for someone else, it’s buying as a principle, it’s buying as an investor with others. It sounds like your life is that quilt. The patchwork of all things real estate.
Nate Broughton: Yeah, and I would say that if you asked me what is Alex really good at, my mind doesn’t necessarily go to real estate wholesaling. I think that’s a practical skill that you have. It’s not a quality that defines you, perhaps, but you develop that skill, again, by working a job in a very short time where you’re really just dedicated to this job that you got in college and you developed this basic skill that’s led to all these things. I think that people should look internally a little bit. If you’re sitting at a job that you’ve been at for any amount of time, there has to be some basic skill that you have. Maybe it’s hard for you to conceptually think about what would my mom say is the thing that I’m good at. I don’t even know if my mom would say anything of value to that, maybe she would.
Dana Robinson: She probably still doesn’t even know what you do.
Nate Broughton: Right, right. She knows I have a podcast. I’m a podcaster, right?
Dana Robinson: You finally have a title that she can appreciate.
Nate Broughton: Yeah, my son runs a podcast. If you’re working in a traditional office job, maybe you’re running an email campaign for your company, maybe you know a bunch of Microsoft Excel hacks that other people don’t know that you’ve pulled together over the last year or two. Everyone is doing something at their job, that they hate, that they can do as a little Opt Out side gig if they just think about it. Maybe go out and look on Upwork, go on places … Fiverr, where people are doing freelance things and connect the dots between what you know how to do and what people are actually paying for.
Alex Martinez: One big realization I had just to bounce off that, a limiting belief I had was no one wants to learn this what I know, or what I’m really good at … If you know how to run an email campaign, or whatever that thing is, but honestly, with the internet, you can reach what? Billions of people now through the internet?
Nate Broughton: I hear there are billions of people.
Alex Martinez: I hear there are billions of people-
Nate Broughton: Using the internet.
Alex Martinez: There’s so many people, there’s so many variables, you can find those people that are interested in what you have to offer. Crush that limiting belief and you can find those people that want to pay you for these gigs, for these side gigs. You just got to do the right looking and find the right people.
Nate Broughton: People would say, “What are you good at?” It’s like well, I’m good at traveling with my kids. That’s pretty impressive, right? How do we monetize that because that’s not a practical skill that you would ever expect someone to think of as a way to make side income money, but maybe it is. Maybe it is.
Alex Martinez: How to travel with your family with all smiles, man.
Nate Broughton: That’s right. That’s right. How to live this life.
Dana Robinson: I see an eBook coming.
Nate Broughton: I do think I need to specifically write about that on the site, or a little bit of a course, right? Follow us around with the madness at the check in counter, and the TSA hacks, and what to pack and how to keep the kid occupied while you’re on the plane. We’ve got it figured out, man.
Alex Martinez: That’s valuable, man.
Nate Broughton: Yeah, yeah. It’s stressful if you don’t know what to do.
Dana Robinson: Right? A lot of people don’t travel because of it.
Nate Broughton: Yeah, terrible. Terrible that that’s happening out there right now. Maybe one other thing that we could try to talk about because you are so young relative to us and other people that we’ve had on, you’ve set up a great lifestyle right now. You’re living the life you want right now, which we commend and we try to encourage people to do. You’re not working towards something that’s going to pay off when you’re 50. You’re also single right now. You’re young. You don’t have a lot tying you down. You’re also someone who you take a step back and think ahead of where am I going, what am I doing right now? All of you guys from SDSU seem to think about all this shit that I’m like how do you even think about that at this age? I’m curious if you’ve thought about the obstacles that might come along, social pressures, personal situations that may happen if you want to start a family or get married, and how those might affect your career or your ability to live the Opt Out life?
Nate Broughton: I don’t know exactly what I’m asking but I’m curious if you’ve thought about that stuff because there are landmines ahead, my friend. It’s going to get harder, but I think you’re going to make it work.
Alex Martinez: Thank you. It’s definitely a lot easier when you’re single. The only person I have to make sure is happy is me. I don’t have everything figured out. I’m always trying to figure things out. What do they say about entrepreneurship? You work seven days a week so you don’t have to work for someone else five days a week. Something like that. That’s the truth. I’m always working a little bit here and there, but I get to pick where I want to work, and I’m always thinking about what I want to do. Living the Opt Out life, it’s something I’m learning to do every single day, too. It’s not I’m just like this. I have to take that conscious step back to actually evaluate where I’m going, what am I doing? One realization I had is I had a lot of stress and overwhelm in my life, and this was like three months ago.
Alex Martinez: I, once again, took a step back. I’m like, “What’s going on?” I’m like, “Dude, you’re causing all this stress. You’re working for yourself, and you’re working yourself to the ground.” I’m like oh yeah, you’re doing this so you can live the Opt Out life so you can live a life that makes you happy, so you can build a legacy for your family so your family doesn’t have to worry about what they’re ordering on the menu. That’s why I do what I do. I’m really putting in the work now, living the lifestyle I want to live but also a big part of what I’m doing is setting it up for my family in the future so I don’t have to spend a lot of time working and things like that. Have I thought about it? Yeah, that’s why I’m gung ho right now, too. Doubling down, tripling down on everything that I can and working my butt off, having a good time doing it. A big why for me is, like I said, setting up that legacy for my family so they don’t have to worry about money.
Nate Broughton: You hint on a little bit, too, that it’s a constant struggle. I think that we always put forth, and we’re going to be putting forth, that we’ve got it all figured out and we’ve got these sexy pictures on Instagram … Both of us doing that, I guess … but yeah, just three months ago you said that you were struggling with how much you were working and wondering why you were stressed out. This is a constant battle to maintain the charade I say of the Opt Out life. It’s not always easy. It’s just interesting to hear you say that towards the end of the conversation here because it affects us all, and it’s been brought up by every single person where it’s like you’ve come to appreciate what’s really going on behind the scenes, whether it’s the risk that they’re taking, the time that they’re putting in or just the emotional ups and downs that can be there for people who have made it to the point that they’re getting invited to be on their podcast. It’s still not easy.
Dana Robinson: Yeah, just because you have the freedom to do what you want, when you want, how you want, which I think is the defining Opt Out life theme doesn’t mean that you don’t find yourself working twice as hard as you might need to, facing burnout, having to manage your own stress levels. These are all human responses to the situations we find ourselves in. We’re trying to help people reach this life. It still comes with those stresses.
Nate Broughton: That’s why it’s the no BS guide.
Dana Robinson: That’s right.
Alex Martinez: It’s the real deal.
Dana Robinson: Right. We can go spend a year in Bali if we want, but there’s still some shit to work on.
Alex Martinez: For sure.
Nate Broughton: All right, boys. Anything else? Any questions for the panel from the guests?
Alex Martinez: Oh man. Here’s a good quote. You miss 100% of the shots you don’t take. Wayne Gretzky. That one’s been resonating in my head. It’s like take action, fail fast. Gretzky, he shot over 5,000 times and he made like 17% of his goals, so he knew he was going to miss four out of five times. I think about that some times.
Dana Robinson: That’s brilliant.
Alex Martinez: That’s pretty cool.
Nate Broughton: Another one that his dad allegedly said was he told him to go where the pucks going, not where it’s been, which is actually pretty useful if you want to play hockey well coming from a former hockey player, but then also very useful in business and life to not mimic what’s working now but to keep an eye out for upcoming trends and also to know that things are going to change. In real estate investing, I think that’s a very good thing to keep in the back of your mind as well.
Dana Robinson: [inaudible 01:11:12].
Nate Broughton: First time we’ve worked a hockey reference in. Took seven episodes. That one’s for the fan back at home, the Broughton clan. Well, Alex, cheers. I’ve got your mug here. The Zero Fucks Given mug, which you sent to me just to be nice with a lovely, nice little note, which I loved, and was actually the first post on Opt Out Life Instagram, so it will live in infamy. We’ll get a picture of you with this right out there on that wall so we can post it when this goes live, but thank you for taking the time. I was very excited to have you come in here. I can almost guarantee that you’re going to be on this show again some time, and hopefully that return flight to the bay area never happens. Welcome back to San Diego, my friend.
Dana Robinson: Welcome home.
Nate Broughton: Thanks for being here.
Alex Martinez: Thank you, guys.
Dana Robinson: Thanks for being on the show.
Alex Martinez: Thank you.
Nate Broughton: Thanks again for listening to the Opt Out Life Podcast. Visit our website at OptOutLife.org, enter your email address, get on our email list. We’ll send you updates on new podcast episodes as they come out, exclusive content that we’re publishing every week, access to books and mini-books written by Dana and myself, and information about upcoming events hosted by the Opt Out Life. Follow us on Instagram at Opt Out Life. We’re trying out that whole Instagram thing. Opt Out out.