Here’s The ‘Matrix’ I Use On Every...

matrix Hey, it’s Cody Sperber here...

So, you guys are familiar with me, have read many of my lessons and heard my training calls, but one topic you can’t seem to get enough of is my fast cash profit matrix. The greatest benefit from this tool is that I’m more equipped to construct deals that meet the seller’s needs, while at the same time, fit perfectly into both my short-term and long-term business plans at any given time.

The reason I get such a positive response from this topic is that once I explain it to my students, a light bulb seems to go off in their head and they have a complete “A-Ha” moment.

So are you ready to shed some light on real estate investing? Let’s get to it.

The Four Transaction Baskets

So, for starters, the way I see it you can take any potential deal that comes your way and drop it into at least one (maybe more) of four different “transaction baskets.” These baskets are:

Wholesaling
Buy, Fix, and Flip
Creative Real Estate
Buy and Hold

Here’s a graphical look at the matrix I’m talking about:

graph

Each of the four quadrants of this matrix represents one of the “transaction baskets.” And as you can see, each one is a type of deal structure that ultimately creates an entirely different experience and net benefit for you.

But Which Basket Do I Put My Nest Egg In?

If you are a newer investor, I strongly encourage you to set both short-term and long-term goals for your business right from the start. And of course, these goals should take into account the type of income you’re aiming for (fast cash vs. cash flow), as well as your current available resources components, which you can see represented above and beside the matrix.

So you’ll be asking yourself these 4 questions:

Am I all about chunks of cash? If so, then you are all about transactional income.

Or…

Is cash flow more my goal? If so, you’re all about residual income.

And…

Do I have access to cash/credit to leverage? If not, can you get it?

Or…

Am I basically cash/credit broke? If so, consider this only temporary.

Now…

If you hold up to the matrix pictured above your honest answers to these questions, you can tell pretty fast which basket(s) will be the best fit for you to focus on primarily, right? Be aware that I always encourage you to keep an open mind, because any lead could take on a life of its own.

choose I’m a big fan of outside-the-box thinking and highly recommend. In fact, I prefer presenting more than one offer to a motivated seller whenever possible – maybe one cash, one terms and one that’s a combo of the two. Because the fact is you never know what kind of opportunity you can open up for yourself with a little creativity.

But generally, your short-term goals and resources will chiefly determine which of the four baskets your lead ends up in – or at least which basket you’ll strongly favor.

Basket #1: Wholesaling

I would say wholesaling is the ultimate no money down investing strategy… and you need to learn how to wholesale real estate. It’s very low risk. You don’t need a lot of resources. You do need a little money but not much at all. Basically, you need a phone, a computer and, ideally, the ability to do at least some marketing, even if it's cheap guerrilla marketing.

In its simplest form, wholesaling is putting a piece of real estate under contract at a significant discount, then turning around and flipping that contract.

Basket #2: Buy, Fix and Flip

For many, the next natural step seems to be trying your hand in the fix and flip basket. You still get to enjoy the cash-now aspect, but it also takes a little more in the resources department – specifically you’ll need access to cash/funding. There’s also a higher risk, though your paydays will tend to be much fatter than your wholesale deals – as in slower dimes vs. fast nickels.

Truth be told, the fix and flip arena is rich with opportunity – you can make a stinking fortune honestly. But it requires a different set of skills and mindset than wholesaling – a factor most don’t really tend to consider before jumping in.

Dropping deals in the fix and flip basket means you’ll be managing contractors, drawing schedules, dealing with Realtors, commissions, hold times, market shifts, etc.

But you should really just go in fully aware that it’s a whole different game than wholesaling and be prepared to learn about it.

Basket #3: The Creative Real Estate Basket

At some point, investors often find themselves getting the itch to try something a little more creative. And thus enters the basket of Creative Real Estate Investing. The world of creative real estate investing is just that – very creative. Also very deep and very wide…

Seriously, you just have no idea how many different ways there are for you to skin a real estate cat until you start dipping your toes into these creative waters.

This is the realm of the transaction engineer. You’re using your creativity (rather than just cash) to think outside the box and work your way into or out of transactions. Through creative paperwork and concepts, you position yourself to profit nicely from deals most “normal” investors wouldn’t even recognize if it hit them in the face.

There are so many different ways you can do this, we could literally spend all day breaking down each individual technique. But here’s a few to think about:

Lease options
Sandwich lease options
Wrap-around mortgages
Creating and buying/selling notes…
Subject-to investing…

What you really need to understand is, in light of the matrix, the creative world typically favors those who like to get into a deal with little-to-no cash/credit involvement, and it also tends to be a great place to create streams of cash flow income.

Make no mistake – you can definitely score cash chunks in the creative realm too. I think it’s the most diverse and option-full of all the baskets. But the cash flow opportunities are rich and plentiful. Also the creative basket is often a good bit more involved and in-depth than the others, which can sometimes mean a little higher learning curve. But it can also be extremely worthwhile when you find yourself being able to craft creative, profitable deals seemingly out of thin air.

Basket #4: The Buy, Fix and Hold Basket

Then the final frontier for most investors is typically building long-term wealth, right? That’s maybe even why we got involved in real estate in the first place. We all said to ourselves we want to get rich through real estate.

And often, before we even know about things like wholesaling or creative real estate investing, we automatically think of either fixing and flipping or having huge portfolios. The great news is if you can structure a wholesale deal or a seller financing deal, then you are already in a great position for the buy, fix, and hold deal.

The key to creating long-term wealth and owning a portfolio is that you make your money when you buy, right? We’ve all heard it before, but it’s just plain true. So if you can structure a good buy price or some really great creative terms, then you’ll be in a really great position to buy, fix, and hold.

Pulling It All Together (Beyond Linear Thinking)

Now, as I said before, generally your short-term goals and resources will chiefly determine which of the four baskets any given lead will typically end up in – or at least which basket you’ll strongly favor.

puzzle And especially for newer investors – you can’t learn everything at once and you shouldn’t try. You should start off focusing on the one basket that best fits your situation right now.

But at some point, you can and should mature and expand...

And my advice is to start considering a number of different ways to present offers, so you can see how many of these "transaction baskets" any given deal might fit into. Then you can choose from multiple options what you want to do with the property to get either a chunk of cash today, long-term cash flow over time or maybe even both.

Lemme Hear From You

I hope this gave some of you a moment of clarity and that you guys start using this matrix. If you have any questions, comments or something you’d like to add, give us a shout-out below.