Interview with J. Massey of Cash Flow Diary

My favorite people to have on my Ask Christina First Radio Show are those who are experts in their field and who steward forward freedom, transformation, and abundance. J. Massey embodies the soul of that type of person, and it was my pleasure to interview him again about him and his work. J's Cash Flow Diary podcast recently hit 2 million downloads and he is adamant about getting people to understand that we all have the opportunity to take action and become the greatest version we're supposed to be. 

J and his wife started in real estate the same way so many others have, with no experience and lots of mistakes, one being purchasing a condo in Anaheim, California using the incorrect type of financing. J was a financial planner, his wife was a recruiter, and when she was pregnant she fell ill. J stopped working to take care of his wife and relieved the stress of that situation by going to play volleyball, where he fell, punctured his lung, was given the wrong medication and was left unable to walk and talk. Someone approached J during this time and told him to become a real estate investor. J says his credit score was 398 when that conversation happened and he says his story and condition, which eventually led to a profitable and successful business, should prove you too can overcome and succeed.

I had J on to discuss how to use real estate to breakthrough to financial freedom, abundance, and transformation. Specifically, I inquired about his recent success with short-term rentals. J said a lot of people fail to learn how to use or leverage other people's money and therefore don't understand that their perceived barrier to entry into real estate doesn't exist. J says people often have the mindset of, "I'm not enough, I don't know enough, I don't have enough time" but that short-term rentals are a way to crash through those barriers. 

J spoke on the willingness to transform one's portfolio and he had the following to say:

"Real estate is a game of offense and defense where you need the ability to read the plays, see what's coming in the market and economy, and respond. There's been a shift in ownership, people are now saying, 'How can I use something as simple as a camera, without actually owning the camera?' We need to be aware of these shifts." I agreed with J as I recognize the mindset of the millennial generation is, how can I have or use something for the amount of time I need it and not own it. 

J: "The value proposition has changed. I value my ability to be free or feel free of obligations or things that might tie me down. Real estate is one of the slowest industry's to change-- so is the banking and financial industry--but the change is coming, the impact of the internet and technology is coming. We're currently used to real estate transactions taking months just to close but that's going to change, it's going to get faster. We as landlords need to think about our customer and how we're going to serve. Right now, as landlords, we sell the lazy way, meaning we sell our entire year worth of inventory (time-365 days) at once to one customer for one unit. What if there was a system where you can earn and control a system that allows you to sell each day individually in an effective manner. Short-term rentals aren't a new concept... technology has made it possible for someone with a property and someone who needs a place to stay to find each other in an efficient manner. How people search for places to stay, for one day, 30 days, and multiple years, is changing. We get inquiries for people who want to stay at a rental for a year while they're on an assignment and the fee is considerably more than the current market price. Certain industries have needed this kind of housing for years."

I agreed with J because I know from 17-25 I moved every year because I had to sign a one-year lease. That lifestyle is true of that age range for various reasons and we're just now in a time where it's easier to do. 

J spoke on the profit structure of short-term rentals: "I shifted my portfolio when I understood the numbers. Take whatever you're currently getting for rent, double that and increase your expenses by 10%. For those of you in the equity-building stage, you'll be able to pay your mortgage off between 5 and 7 years and sometimes faster and that works up to about a 20 million dollar property. For those in an accumulation stage, you have the ability to do maintenance on your property and earn money instead of having to choose between the two. Even with seasonality, you can expect a net profit of between 15%-20% on your investment. To put that into perspective, grocery stores earn a 1% net profit.

Imagine you use $50,000 to buy a property. How long is it going to take before that $50,000 comes back with you holding the property? A long time. Instead of taking that $50,000 and putting it into one property, take it and put it into four or five short-term rentals. You'll have that money back within 10-18 months and you can double your portfolio."  

In California, there is currently legislation being passed against short-term rentals and I asked J to explain why that doesn't stop us.

"We want it [legislation]. Legislation will get rid of the bad actors. Cities make monies, neighborhoods improve, and there need to be controls because most of the people who are out there have never learned how to screen tenants nor manage properties. It does mean the opportunity will change but it's not something to be afraid of." 

J teaches systemization. Imagine being able to do a move-in/move-out inspection in a proper manner without you ever having to be there. He teaches people how to leverage technology to do such systems and you can start with a free training at www.cashflowdiary.com/star.