Today’s guest is Eddie Martini.
Eddie was born and raised in Northern California. Last summer, he and his family liquidated all their California assets, packed up their two Labradoodles and mountain bikes, and embarked on a tour of the USA in a 5th wheel. Along the way, they discovered some wonderful corners of America and ultimately decided to settle in middle Tennessee. The trip could not have made that a successful experience without proper planning and financial strategies.
“There is nothing accidental when it comes to building sustainable wealth. Having the right team in place will help you plan, build, manage and protect your wealth. I am the head coach of your team helping to guide you and empower you as the team captain.” – Eddie
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[03:33] – [08:51] Financial planners vs real estate
[08:52] – [13:57] Climbing out of debt
[13:58] – [15:49] Financial education
[15:50] – [20:08] Network of trusted professionals
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Connect with Eddie:
Social Media: @martinilegacy, @eddiemartini
Website: http://www.MartiniLegacy.com
Connect with Sam Wilson:
I love helping others place money outside of traditional investments that both diversify a strategy and provide solid predictable returns.
Facebook: https://www.facebook.com/HowtoscaleCRE/
LinkedIn: https://www.linkedin.com/in/samwilsonhowtoscalecre/
Email me → sam@brickeninvestmentgroup.com
SUBSCRIBE and LEAVE A RATING. Listen to How To Scale Commercial Real Estate Investing with Sam Wilson
Apple Podcasts: https://podcasts.apple.com/us/podcast/how-to-scale-commercial-real-estate/id1539979234
Spotify: https://open.spotify.com/show/4m0NWYzSvznEIjRBFtCgEL?si=e10d8e039b99475f
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Want to read the full show notes of the episode? Check it out below:
[00:00:00]:00 – [00:00:30]:23
Eddie Martini
We have already formed a strong savings habit, which I think a lot of people try and skip. They think that, Oh, no, I got to get my money to work. I’ve got 100 bucks. It’s got to be 200 bucks by next month. And while there are other people out there that yes, I’ve successfully done that, I’ve found that for most I just caused actually more stress in my tagline is creating financial peace. That’s why I’m here to help people. Do I really think if we can sleep well at night and get ourselves a firm foundation, we will make better financial decisions. And the better financial decisions we can make, the better people will become in society.
[00:00:31]:08 – [00:00:50]:18
Intro
Welcome to the How to Scale Commercial Real Estate Show. Whether you are an active or passive investor, we’ll teach you how to scale your real estate investing business into something big.
Sam Wilson
Eddy Martini will help you plan, build, manage and protect your wealth. Eddy, welcome to the show.
[00:00:51]:18 – [00:00:54]:00
Eddie Martini
Good morning, Sam. Good to see you.
[00:00:54]:00 – [00:01:04]:05
Sam Wilson
Absolutely. You as well. Eddy, there are three questions I ask every guest who comes on the show in 90 seconds or less. Can you tell me where did you start? Where are you now and how did you get there?
[00:01:04]:05 – [00:01:47]:22
Eddie Martini
Absolutely. Yeah. So I think I started with most with residential buying my buy, my first home in Lincoln, California, right before that area had really started its big boom. I was back in 2002 and from there we graduated into really more sold land development building custom projects and those type of roles had aspects. And then we eventually got into commercial, which was a really big step for us, allowed us, you know, took some time to get some means together to build, to step up to those bigger purchase prices. But the gains were also coinciding with that. So never really looked back once we kind of got our feet wet there, I still touch all aspects of real estate, but definitely a big fan of that being a major part of my portfolio.
[00:01:48]:17 – [00:01:59]:08
Sam Wilson
Got it. So you’re still you are actively involved in real estate, but I think we talked about this maybe before we started recording. You’re also a wealth coach. How did those.
[00:01:59]:08 – [00:01:59]:19
Eddie Martini
Yes, sir.
[00:02:00]:03 – [00:02:03]:14
Sam Wilson
How did those two kind of become what they are today?
[00:02:04]:19 – [00:03:11]:16
Eddie Martini
Absolutely. I appreciate asking. So, yeah, being being in the industry, I just really noticed there were some serious voids that were that I found being a realtor and trying to help people accomplish their financial goals. And one of those largely is as a realtor. And even when I was a lender, I just didn’t really have the time that was needed in a lot of cases to really help coach people along on understanding the power of money. And a lot of people came to me looking to try and get into real estate investing, but they had outstanding credit cards they’re paying 18 or 22% on. So I just felt like they kind of had their finances backwards and I really wish I had the time and energy back then to dedicate to it. And now that’s where I focused my time on since 2020 is really being able to take that necessary time to break down personal finance, separate the difference between good and bad debt. Then once we can understand that how to get on the right side of compound interest or we’re earning it instead of paying it, and through strategic savings, we can put some money away on four or 5% compound guaranteed rates return and then leverage those savings to invest in things like real estate.
[00:03:11]:16 – [00:03:33]:19
Sam Wilson
Right. That makes that makes a lot of sense. There are there’s some probably tension, I think even in my own self, maybe I’m projecting this, but tension between the traditional financial planners that, you know, hey, we’re going to you know, we’re going to clear up your debt and then we’re going to invest in the stock market. And then there is the real estate investors that are like, man, it’s only real estate.
[00:03:33]:19 – [00:03:55]:11
Sam Wilson
That’s all there is to it. And it sounds like maybe you think there’s a blend of several different approaches, like maybe maybe whole life insurance is part of that, if I’m understanding kind of what you’re saying there as part of that strategy. So tell me kind of what you’re what the whole view looks like, I guess, for you, as you maybe even in your own portfolio or what you would recommend to people today?
[00:03:56]:07 – [00:08:31]:14
Eddie Martini
Absolutely. So, yeah, I follow a four tier hierarchy of wealth chart, which I do have available. What’s anything you’d like me to share? But I really think it’s important to start with a firm foundation of guaranteed rates of return. I think typical financial planners like you were mentioning, they’re really quick to get people involved into what I consider a Tier four asset class, which is on collateralized high risk, maybe high return type asset classes.Those are things like or even your traditional 41k or Roth IRAs, they’re still playing in that same game stocks, bonds, cryptocurrencies, these are all things that don’t have a collateralized asset behind them. You’re kind of buying into ideas and oh yes, I hope this is what things are going to come out to. Instead, I think if we can build a foundation again of not only create an emergency fund because the first thing we have to do, we have to separate ourselves from an emergency. And so we have to do that with some cash reserves. Then we want to create an opportunity fund is our next tier. That’s really an opportunity to invest in ourselves. And Sam, I’m sure you can agree we are our number one asset. At the end of the day, there’s not going to be one investment out there that ever outperforms what we do cumulatively. And really even that top performing asset that’s still credit to you and I, because we’re the ones that made the decision to pursue and take advantage of that investment opportunity. But a lot of times it takes skill sets, it takes joining mastermind groups, people that are already doing it. And to do either of those things, it takes means to be able to invest in ourselves. So once we get our tier one established, which is our emergency fund, I think if you’re employed, you want to have at least a three month pad just in case stuff hits the fan. You can regroup, can get some wind back in your sales and move forward. If you’re self-employed, you should actually set your goal a closer to 12 months. The Reserves. Things happen when you’re self-employed into the extra time to breathe. Once we get into Tier two, we establish opportunity fund to get where we can invest ourselves, maybe invest in a business we already have going. We might need to get some new equipment, new machines, or again, develop new skill sets, hire new people, whatever that may be. All of those things take me inside. So instead of locking our savings away again, like we mentioned, those previous asset classes, 41k Roth IRAs, which really those are set for long term way down the road. I think we need to empower ourselves, maintain access to that cash flow, to, again, invest in ourselves and things we understand. Once you develop those skill sets and we’ve we’ve got ourselves feeling really confident and hey, we can actually move forward with investing. And we’ve already formed a strong savings habit, which I think a lot of people try and skip. They think that, Oh no, I got to get my money to work. I’ve got a hundred bucks, it’s got to be 200 bucks by next month. And while there are other people out there that yes, I’ve successfully done that, I’ve found that for most that just caused actually more stress. In my tagline is creating financial peace. That’s why I’m here to help people. Do I really think if we can sleep well at night and get ourselves a firm foundation, we will make better financial decisions and the better financial decisions we can make, the better people we become in society. And that’s when we can finally enter into Tier three. And that’s where you and I find our sweet spot. Those are collateralized assets. Things like real estate, maybe doing some private note lending with people where you still have a piece of real estate behind it that allows you to feel comfortable lending money to people, knowing you have the ability of recapturing that asset if and when maybe payments don’t start coming back in. And then even things like commodities, like investing into oil, natural gas, those have some great tax advantages, very similar to real estate. And that’s what I’m all about. I want us to really think outside the box and start saying, Okay, that’s great. I have my ordinary income warrant for kind of getting taxed to heck right now on those dollars. What are some other streams of income that I can add? There may be more tax favored, and that’s where I love these tier three assets. Things like real estate, especially commercial real estate. We have 39 years of depreciation that you can write off and it’s just an amazing, amazing asset class to get yourself into. And like I said, those commodities, you invest $100 into a new prospect for developing oil and collection of oil. Awesome. You’ve got 100,000 bucks now you can put against the income that’s coming off of that asset. So when we start seeing ways of having great tax planning in place, as well as combined with some great estate planning, we can start seeing that we can get into a position of owning nothing but controlling everything. And that’s what I like to get people in to me.
[00:08:31]:14 – [00:08:51]:21
Sam Wilson
And that’s I love the I feel like you’ve given this talk before. That’s really good. That’s really, really good. It was clear. I appreciate that, too. It’s like these are these are the four, four steps you can move through. I think for many people and correct me if I’m wrong, but these these steps, they feel daunting when you look at it.
[00:08:51]:21 – [00:09:06]:22
Sam Wilson
You’re just like, my gosh, like most people, you know, the kids are screaming at them, they’re busy at work. They’re this or that. The other. Like finding a way to carve out the time to create this plan is almost a hill too high to climb for most people. How do you overcome that?
[00:09:08]:05 – [00:13:19]:12
Eddie Martini
Indeed, and I’ve been there and done that. And I remember at the very beginning of my journey and trying to climb out of major consumer debt when I was really just began playing the money game wrong. I did it understand a little bit being in real estate, the power of leverage, but I still was leaving myself exposed to liability with carrying credit card and other consumer debts. So once we can get ourselves understanding that there is a difference between good and bad debt, I like to actually utilize a lot of Dave Ramsey type of solutions there in getting that initial momentum developed. So I am a Ramsey certified master coach and so I love the basics of what he teaches. I just think there’s a certain point where he falls a little bit off my radar and I like to shift gears a little bit in that I do appreciate the value of leverage, and I think it’s great. Yes. If you could spend 100%, 400%, I should say, on a piece of real estate. Good for you. However, I think if you take a step back and understand that, well, I could take those same dollars and 4 to 5 x my efforts here. I think at the end of the day you’re going to see that there’s be a lot more wealth accumulated by taking different steps there. But the initial steps that get that momentum built and so things like getting your credit cards in order of your lowest payment to highest payment, not even worry about interest rate, just lowest payment, the highest payment that allows you to get that initial momentum going. And once those debts are cleared, it’s amazing to see people go, wait a second, I do have four or 500, maybe even $1,000 per month that I was throwing away. The now of these past few months, I was able to scrub down. I get cleared. I do have some money to put away in savings and then they can start to see, okay, cool. After your one year or two year, three or four, this is what compound interest looks like. Wow. I’ve never been on this side of the fence. This is cool. Now, once those have grown. Now let’s go back to our wealth coach and say, okay, now how do we really make some money? And that’s, again, where we start taking steps of. All right. Well, now, actually, that you’re talking about this, let’s get some other things in place. And so I’m sure you can agree that estate planning, tax planning play a major role in our success when it comes to all types of investing in all types of business. So we have to get those plans in place, understand that you do need a will put in place. You need to take that stress off of you and understand where things are going, where your children are going, all of that good stuff if and when you pass. And the next layer to that is developing a living trust. And that’s what I mentioned before, where we could own nothing but still control everything. And it’s a beautiful puzzle. What we all these pieces put together that does appear and it get it takes a lot of pressure off us because we’re talk about money daily with our spouses. We’re talk about money daily with our children, which are things that are not happening in American households on average. So we need to break that mold. I’m here to dispel the whole myth of trust fund babies. I think all of us should take a step back and figure out some sort of planning to put in place or there’s going to be something left. I don’t care if it’s a $5,000 check or $5 million check to leave it behind. There should be something to show your children and our grandchildren that listen. My elders took time to make sure that not only did I pass along, did they pass along property value, they pass on human life value to me. And that’s how we can dispel that myth and all those little steps from paying off the debt, starting to save, starting to see compound interest to close in your first deal. All of that was just a snowball effect, but you had to take that first step of saying, Hey, I need to reach out. What I’m doing today is not getting me where I want to go. So if I want to do something different about tomorrow, I need to make some changes. Where do I start? And so I actually offer free complimentary consultations to people. So there is no cost to really get that first initial conversation going and stirred up. And then from there, as long as we both both parties agreed there’s value to be added, we can move forward and some one on one coaching sessions. And I work with a three phase system. It’s super simple. And again, that first phase is free. Phase two is where we really master personal finance and then phase the reason we get really excited is we start building wealth, gets in estate and tax planning together and, and things go really well from there.
[00:13:19]:12 – [00:13:57]:00
Sam Wilson
I like the idea of, of focusing in on the estate and tax planning side of things. I think that’s for so many people, it’s an overlooked step, even for friends and family of mine that are very high income earners. The idea of either having income producing real estate that produces paper losses and we were talking about this yesterday. You know, I was talking to somebody yesterday about this and it’s like, well, you’re going to get your K one this year. You know, we’ll show a, you know, gosh, with with bonus depreciation last year, the last of your bonus depreciation, I’m sure bonus 100% bonus depreciation is like, okay, so you put a hundred grand on the deal.
[00:13:57]:22 – [00:14:21]:24
Sam Wilson
You’re going to get like a $90,000 write off or something like that in year one, which was crazy. And they’re like, Well, yeah, I’m not quite sure. I’m not sure I understand all that. I’m like, Wow, you’re this far along. And the idea of passive losses against an income producing asset is somehow eluded you. And it just goes to show the lack of education, I think, overall. What do you think about that?
[00:14:22]:22 – [00:15:22]:01
Eddie Martini
Oh, absolutely. 100%. I mean, a little known fact is people that are out there that are actual financial advisors, it is not a pre wrote requisite when they’re earning that degree. It’s even for them to take a personal finance course. So the whole system, I think, is super backwards when it comes to this. You know, they kind of go through their schooling in education. And then, of course, at the end of the day, they’ve got people behind them that are saying, hey, push this, push that, this is what’s going to make the income. And I’m not saying that people are out there doing anything ill willed. It’s just these are the tools that they have in front of them. And so they’re basing things off average rate of returns instead of actual rate of returns. Most financial advisors don’t even know what internal rate of return means. They don’t they don’t love they want they don’t want to talk about that because then also you have to factor in their management fees. It factor in tax implications and all of a sudden that S&P 500 average rate of return of 9.98 turns into maybe six. And I’m sorry, a maybe six is not going to cut it for most of us when it comes to retirement.
[00:15:22]:12 – [00:15:49]:09
Sam Wilson
No, it’s not going to cut it for for retirement or even living expenses today, unless you just have an enormous sum of money earning that 6% of year. It’s it’s still not going to not going to move the needle in any really meaningful way. It sounds like from all the different things that you’ve got going on here from, you know, collateralized assets, on collateralized assets, that opportunity funds getting, you know, you’re setting up your base of guaranteed rates of return.
[00:15:49]:09 – [00:16:06]:13
Sam Wilson
There’s a lot of different. And then getting into your estate and trust planning and things like that, you have to incorporate a lot of other industry professionals alongside of you to get this kind of picture all put together for somebody. How have you vetted and found those people that you like to work with?
[00:16:07]:17 – [00:19:52]:20
Eddie Martini
Oh, absolutely. That’s such a great point. Sound. Yes, this is definitely nothing I’m doing on my own. I consider myself as a wealth coach, kind of more of a hub. So I’m your central spoke there that all the outer spokes are going to be connected to and it’s just a great to have me. I’m kind of your backboard so you’re going to bounce ideas off me. We’re going to talk about things, talk it through. And then once an idea actually comes together and we do some math behind it and get through some truth concept software and really see, hey, what does this deal look like when a stand on its own two feet and they say, yes, we want to proceed forward? Absolutely. So we need to have people we need have trusted lenders in place. That’s really the first step. And then you get connected to say they know, all right, what is this really going to cost me to build to finance these transactions? Next thing you need a real estate professional. You need someone that whatever type of asset class you’re pursuing that that person does this all day, every day. And luckily with me being in both of those industries for over two decades, I know the questions to ask. And so I can actually help with that vetting process. So a lot of clients come to me and they say, Hey, I already have a realtor friend or family member. I said, That’s great, let’s get connected and make sure that they’re on par with what we need here. Sometimes it might just be a residential specialist. They’ve never even touched a piece of commercial real estate. And I’m not knocking giving a family member a shot. I’m just letting everybody know there’s in the day this is a business transaction and you really have to try and set personal stuff aside. So sometimes what I can do is connect that friend or family member with a vetted commercial realtor and they’ll love that and participate and learn along the way and even share in some of the commissions, which really is a win win for everyone, because they now just help that family member get into a whole new, exciting aspect of real estate and in a business that they’re already involved in. So that works out really, really well. And again, the next thing to talk about, there is a difference between a CPA and a tax planner. So you have to have both on deck and they need to be able to communicate well together. And so I have my network really across the nation and even into Canada to make sure that these vetted pros are available, to have these in-depth conversations. And again, there’s a big difference. There are a lot of CPAs stand for can’t protect assets, not certified public accountant. So you really have to take time to ask them the right questions. And that’s what really helps having a wealth coach is we can do some role play together. We can say, okay, great, you’re the tax person. I’m going to ask you some questions and it’s going to be recorded calls. You can go back and write these things down. You can have our session on the background when you’re vetting the CPA over the phone or again, if you to do it together, great. We could spend time doing that together. And so it’s really important to have all those as well as an actual estate planning attorney. So that’s kind of the final piece of the puzzle is saying, hey, listen, we’ve got all these other professionals. We’ve found some properties we want to secure and they even come to me, they already have some properties secured in their possession. Great. I explaining to them the liability exposure that’s now in place and some steps we can take to get rid of that liability exposure. And that gets back to the point of owning nothing and controlling everything. So all of these kind of come together. And so a really cool synergy and it’s really powerful. And the more transactions you do, the more often you’re talking to these people. And it’s just like when we start, you didn’t even talk with your spouse about the monthly bills or the budget. Now all of a sudden you’re in a completely new person, you’ve shed your leaf and you’re just like, Yes, this is what I do now. I talk about money because the more I talk about more comfortable and with it, and I love talking to people because guess what? When I’m on the phone with my real estate planning attorney, that means things are happening. I love having these calls now, I don’t mind that, you know, they’re on retainer for 250 an hour. That’s a good 250 to spend per hour, because I know I’ve got something on deck that’s going to be 10 to 20 up now.
[00:19:52]:20 – [00:20:08]:22
Sam Wilson
This is awesome. Eddie, thank you for taking the time to come on the show today and really just break down for us. Your whole strategy, your approach, your thoughts on how to organize our finances both personally and also inside of the real estate side of things as well. This has been a lot of fun having you. Come on.
[00:20:08]:22 – [00:20:14]:01
Sam Wilson
I learned a lot from you here today. If our listeners want to get in touch with you and learn more about you, what is the best way to do that?
[00:20:15]:04 – [00:20:38]:03
Eddie Martini
You bet they can visit Martini Legacy.com They’ll take him direct to the website there and and they can learn a little bit more about my past and history. There’s also a calendar on their weekend schedule, that complimentary consultation. And if you’re on social media, just look up at Martini Legacy. I’m all over the place and then myself personally at Eddie Martini and I try to put content on both of those to make sure people, you know, can access that as needed.
[00:20:38]:16 – [00:20:41]:08
Sam Wilson
Awesome. Eddie, thank you again. I certainly appreciate it.
[00:20:42]:06 – [00:20:44]:12
Eddie Martini
Pleasure, Sam. Thank you for having me on. Look forward to talking to you soon.
[00:20:45]:02 – [00:21:06]:12
Sam Wilson
Hey, thanks for listening to the How to Scale Commercial Real Estate Podcast. If you can do me a favor and subscribe and leave us a review on Apple Podcasts, Spotify, Google Podcasts, whatever platform it is you use to listen. If you can do that for us, that would be a fantastic help to the show. It helps us both attract new listeners as well as rank higher on those directories. So appreciate you listening. Thanks so much and hope to catch you on the next episode.
