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In this conversation, Michael Vallee shares his extensive experience in real estate, emphasizing the importance of passive income and strategic investment. He discusses his journey from a corporate job to becoming a successful entrepreneur, highlighting the significance of mentorship and networking. Michael provides insights into effective strategies for new investors, the role of automation in real estate, and the necessity of adapting to market changes. The discussion concludes with Michael’s contact information for those interested in learning more about his work.

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Investor Fuel Show Transcript:

Michael Vallee (00:00.569)
Good.

Dylan Silver (00:00.77)
Hey folks, welcome back to the show. I’m your host, Dylan Silver. And today on the show, I have Michael Vallee in Flagstaff, Arizona. Michael is a seasoned entrepreneur with an extensive background in real estate, both as a successful agent and a savvy investor with thousands of deals under his belt and over 50 personal property deals completed. Michael has honed a deep understanding of the market. He’s also a published author sharing his insights and expertise with a broader audience. Michael.

Welcome to the show.

Michael Vallee (00:32.277)
Thanks Dylan, I really appreciate being on the show. Glad to be here.

Dylan Silver (00:36.598)
It’s a pleasure to have you. I like to start off at the top. When people talk about the real estate space, a lot of people aren’t sure how to get in. A lot of people feel like it has to be in your blood. For me, I was working in the automotive space and I just knew if I don’t beat them, how am I possibly going to get ahead? Everything is going up. I might as well figure out a way to get into the real estate space because these homes are so darn expensive. What was your entry point into the real estate space like?

Michael Vallee (01:03.979)
OK, well, basically I grew up down here with my dad, same job, this whole career. No real estate investment other than our private house. And all my buddies, guys I did sports with and all this stuff, were basically real estate investors, business owners, salesmen. And so I saw at an early age the lifestyle that it could provide. And so I basically went out and sought out that mentorship.

And you know, I always believe that you sit next to the smartest kid in class if you want to learn about the topic. And so I learned that at an early age. And so I picked these guys’ brains when they’re out playing poker and stuff like that when I was over at my buddy’s house. So that’s what really inspired me.

Dylan Silver (01:47.854)
That’s the best way to do it. I tell people, if I could have swapped out all the time that I spent trying to get the X’s and O’s of real estate and instead, or really anything for that matter, instead spent my time and effort networking and meeting people or trying to get in those rooms, then I probably would have gotten to where I’m at sooner and faster and a whole host of other things.

But what I really wanted to talk about on this show, and we talked about it before hopping on here, is the general theme of having a passive income.

Michael Vallee (02:23.501)
Yeah, well absolutely. I am a purveyor of passive income. And so my real estate strategy, you have a lot of guys that are like some are really good into notes or hard money or fix and flip, what have you. I would say that I’ve probably done, checked all those boxes in my quest towards passive income. Generating passive income has been the

the overall vision and the know the mantra the that has guided me through all of it and originally it was to get out of the corporate rat race you know because if you generate enough passive income to cover whatever your monthly expenses are then you can be free you know and it wasn’t to amass uh 30 300 doors or 3 000 doors it was it wasn’t about that it was about just becoming free and so uh i

Dylan Silver (03:08.75)
Yep.

Michael Vallee (03:21.991)
you know, pick the brains of people that own their own time and followed a simple formula. I actually had to follow it twice because I built it up once, had a divorce, and so some of that went, I got backtracked a little bit and then I was able to rebuild it better and stronger to generate passive income and I was able to leave my job ten years ago, the corporate world. I was able to step away from a six-figure job through real estate and through some

other passive income vehicles.

Dylan Silver (03:54.582)
curious to get your perspective on when people intend to do real estate.

But they’re looking at it from a passive perspective. they don’t want to be in the business. They want the business to work for them. Do you think there is a way for them to go about that that you would recommend or would you tell people, there’s so many different avatars within the real estate space. You have to do what you do best and scale and then detach yourself from the business and hire the right people to run it for you.

Michael Vallee (04:26.241)
Well, the most passive way is just to be a real estate investor. if you have money, if you have cash, you could always lend it into a private equity, know, a hard money guy. He’ll give you like, say, 10%. He rents it out. He’ll loan out that money for 12%. So that’s the, or you could do a syndicate. You could do a real estate, you know, a re, you know, you could be a real estate investor technically without swinging a hammer.

But if you have more time than you do money, there are ways to get into the business and create equity right away. So real quick, my mentor, it’s a very simple formula that he’s taught me that I’ve done twice. So I know what I’m talking about and it’s created multimillion dollar portfolio is basically you just start by

You this is a great entry point for anybody getting into real estate. You start with the smallest property possible. So like a condo, like a studio. Okay, you move into it. The banks love it when you own or occupy, so you’re creating an incredible amount of leverage right there. The banks lease money out of pocket, you put some sweat equity into it, then you buy the next biggest place. So I wouldn’t do anything below a condo, not mobile homes, not land, but I’d stay in a condo as the smallest form.

of asset.

and then you buy a one bedroom and you rent out the one before you. Now all of a sudden you’re a real estate investor, you’re a landlord. And so you’re learning all of your forms, your how to get tenants, how to market your property, how to manage your property. You you’re learning some of these things and then you just keep stacking those up as you go. And by the time you get to eight, nine, 10, the beginning ones have got great equity and then you’re cashing those out into maybe some smaller apartment commercial types

Michael Vallee (06:22.315)
plays but you’ve learned along the way and it’s a lot it’s much better to make a mistake and you will on a small property than it is a big investment because a lot of people want to start off with four plexes and duplexes and you you screw that up and you might not recover.

Dylan Silver (06:38.786)
That’s 100 % right. I think there’s a lot of chatter about bigger is better and buy a bunch of doors. There’s an argument for that, but there’s also an argument for, well, you’re going to start out with leverage and you’re going to dig yourself a hole.

Michael Vallee (06:53.785)
Yeah, you want to make sure those properties are cash flowing and I find that the smaller the property the more that a cash flows the larger the property you know you’ll see it some maybe some better appreciation So yeah, it’s a it’s a very manageable model. I think that literally anybody could do it

Dylan Silver (07:11.426)
When I think about passive, this is really my dream, my aspiration and my goal. And I’m trying to make it happen as soon as I can. talked to you about, before we hopped onto the show here, I plan to move to Santo Domingo at the end of this year. And in talking with lot of investors here in DFW, I get mixed sentiment. Some people telling me that’s unrealistic for you to think that you could do this.

you know, remotely, and then a lot of people telling me if you hire the right people, if you have the right processes, you can. I’m curious, Michael, what your thoughts are.

Michael Vallee (07:48.781)
Well, I think that however big or small that you can start stacking up passively and start growing that ledger, because when that becomes higher than your expenditures on your monthly basis, you are free. And freedom to be with who you want, when you want, and where you want, whenever you want.

I think that life’s greatest gift, know as far as because I think that there’s so many people that are doing things are stuck in the rat race do you know They are subjected to somebody else’s opinion of them. They’re appeasing their role And if somebody’s actually truly honest with themselves, you know, the good stuff in life is not You know working it’s it’s the relationships and doing the things that we we like to explore and stuff well

we still have the health to do them.

Dylan Silver (08:43.886)
selfishly want to say that if there’s a way for me to be working on the beach, then that is the beach that I want to be on.

Michael Vallee (08:51.479)
There you go. Yeah, this all started with the book Tim Ferriss, Four Hour Workweek, was when I originally read this. I read it in my, I think it was in my 30s. And he was just talking about how you were 80-20ing Pareto principle on everything. So making sure that you’re always staying in your strengths.

and sending out your weaknesses. So that can apply to business, but in real estate, having $500 or $300 coming in off of your studio plus the tax deductions and stuff, it’s pretty manageable from a passive standpoint. And you start stacking that, and you’re just looking for any way, anything that you can do to create income, maybe work hard for a little bit, where it will kick off.

income to come in later on. So residual.

Dylan Silver (09:47.168)
In your journey, was there a point or a moment in time where you identified that I want to not be as time intensive? Was it the Tim Ferriss book or was there a specific point when you had a certain number of properties or was it kind of a slow burn over time where you realized, hey, I have the ability to not be doing this every minute of every day?

Michael Vallee (10:10.925)
Well, I always saw the…

the toll and the, you know, we’re giving this story to, you know, get a good education, get a good job and, you know, you’re gonna have all of life’s desires. And when I actually looked into that, dug into that deeper, is that’s actually a fallacy? And you, what, do you wanna go water skiing when you’re 65? You know, like you physically can’t walk around the hills of Europe, of Spain or Italy or Portugal when you’re, you know, 65 and later on, right? Like I think that the new rich,

Dylan Silver (10:39.32)
You can’t.

Michael Vallee (10:43.547)
are doing, they’re traveling when they want, they’re traveling young and that freedom of movement is the new currency. And so I literally had that epiphany when I was reading that book that, you know, what can you sub out?

you know, that we’re all limited by the hours in the day. And so just like all the great wealth creation has happened through leverage, Bill Gates, know, Jay Paul Getty, Henry Ford, they have leveraged through that because one man doing one thing is still limited by the hours in the day. I forget who said it was like, I’d rather have 1 % of 100 persons efforts than 100 % of ones. So maybe it’s…

Dylan Silver (11:27.694)
When you were reading that book, was it like completely mind-changing, like shifting? Because I’m hearing a lot of references to that book. I’ve seen the book, if I’m thinking about it correctly, it’s the one with the orange cover and the red on the bottom. And I’ve never read the book, and now, Michael, I’m like, I have to read this book because it changed this man’s life and I gotta read it. Yeah, that book.

Michael Vallee (11:42.893)
Yeah, yeah, probably have it.

Michael Vallee (11:52.279)
This book, it’s a little bit dated, and it’s a little bit worn out, but it’s a powerful reference. And maybe some of the references are a little bit dated, but the concept is a truth that has stood the test of time. So yeah, that led to a lot of different things. It actually led to me.

Dylan Silver (12:10.094)
Mmm.

Dylan Silver (12:13.912)
Were you in corporate when you were reading that book?

Michael Vallee (12:18.905)
My sales job, my last sales job, they were requiring me to do a certain amount of activity. And so I applied those principles and I basically found this tool that helped me do lead generation in an automated form.

just happened to be on LinkedIn. And what happened was is I went from two appointments per week to two per day and I was crushing it in my job. My boss was like, wow, what are you doing? You’re so effective, you’re so awesome, and you’re winning all these new business awards and accolades and all that stuff. And then I realized that I don’t need to be doing what I was doing in my sales role. I need to be selling this because I recognize that there are other people

that have that same pain point. So if I can put two hours back in everybody’s day that they’re spending, you know, doing lead gen manually or linkedin manually and fulfill that with automation so that they can have a higher level conversation at the time somebody’s looking for a solution to whatever problem they can solve is powerful. And so I’ve created hundreds of thousands of dollars off of that tool. I still make residual income off of that same agency and concept.

Dylan Silver (13:31.948)
curious pivoting a bit here, Michael, we’re living in a time where automation is more possible than ever. And as a real estate agent myself, without getting too deep into the nitty gritty, I see that there’s this just tremendous amount of innovation that is possible in real estate, but then also using kind of the same thought process of real estate entrepreneur in so many fields, so many fields, I forget what I was doing the other day.

Michael Vallee (13:34.797)
Thank

Dylan Silver (14:03.468)
It was either going, my car got damaged in a tornado out here in Denton, that was crazy, but it was either going to go book an appointment for a collision center or I was looking for like physically where the collision centers were laid out at in my area, one of the two. And they were closed. And so it was tricky with some of the places to go and book myself because it was a Saturday at like 3 p.m. and I couldn’t find anywhere.

Michael Vallee (14:08.866)
wow.

Dylan Silver (14:32.289)
And remember thinking, this was just last week, I remember thinking there should be no reason why just because there’s no humans there that I can’t book an appointment with somebody at 3pm on a Saturday.

Michael Vallee (14:42.585)
Absolutely.

Dylan Silver (14:43.948)
You know, and so right now in real estate, I’m a real estate agent. I’m a wholesaler by background. You know, I have this wristband that I got at a conference that says hybrid agent. like agent investor. And I think about if I’m not able to pick up the phone because I’m on a podcast and someone texts me and wants me to make a cash offer on their property. Well, I just cost myself a ton of money. So now with all the automation that’s available with AI, that’s no longer should be a reason that I’m losing out on deals.

What’s your perspective on how not just real estate people, but how people in general can can gain access to automation in their lives?

Michael Vallee (15:24.601)
Well, I really think that we are ultimately heading towards our cloned self as an avatar chatbot that is a real-time video responses that we have prompted that basically follows. It can go to all of our social media profiles and scrape that and take our personalities, look at all of our content, look at all of our videos. can literally replicate ourselves. Like I literally think that we’re headed towards that.

Dylan Silver (15:53.784)
Yeah.

Michael Vallee (15:54.073)
Right? And I mean, you can, I mean, why not just go to ChatGPT now or I like a tool called Perplexity and just ask what it is that you, what can I do to automate my business that would make the biggest impact? Like what, I just love it because I’m a lifelong learner and I will literally wake up in the middle of the night sometimes because I just have a question. any question you ever had has an answer. And so, and they’re,

Dylan Silver (16:21.112)
Yeah.

Michael Vallee (16:22.977)
I’m very impressed with how tailored they are and specific. And then also if you are educating your own chat jpt profile for instance as it’s the most popular.

It comes back with some very intuitive responses that are literally tailored for you. And sometimes that mind gets tripped up because I do do a few different things. I’m like an entrepreneur that just so happens to be a realtor as well as a mortgage loan officer. So it’ll get some of my different areas of expertise crossed up. So I have to make sure I keep an eye on.

Dylan Silver (17:05.462)
very interested in that. That’s a separate podcast, being a mortgage officer and a real estate agent. But my passion, and I think a lot of people who are looking at real estate, they might not think, hey, I’m not necessarily someone who’s gung-ho on listing a bunch of homes, and that might not be me. And I don’t think it is for me, although I may end up doing that. But I’m super passionate about

Michael Vallee (17:09.09)
You

Dylan Silver (17:30.624)
networking and learning about these these different opportunities that that people are coming across and when I meet someone like yourself Who’s talking about doing this? Passively and it peaks my interest because that’s effectively what I want to be doing with my life and not just as like a sound bite But like here’s how you actually do it. That’s really intriguing my my perspective kind of selfishly but also I think just based on my life experiences is that

We need more people to be aware of how they can automate their lives. And also we need more people who are going to be entrepreneurial. I’m not saying leave your job because that that might not be something that you want to do or it might not be feasible for everybody. But if you have an idea because of AI because of automation you don’t need to devote all your hours to figuring out how to make that idea a reality. You can find you know let’s call it 30 minutes every other day and help

The machine will help you.

Michael Vallee (18:28.249)
Yeah, yeah, like right now we’re going through an economic shift with all the tariffs and stuff and with the offshore manufacturing being more onshore. Huge opportunities. Anytime that there is turbulence in the market, there is opportunity.

Dylan Silver (18:43.616)
Absolutely. You know, I think about right now where I’m in Texas, right? So you’re in Arizona. You know, we’re close by here. Texans like to think this is the especially people in DFW like to think this is the number one single family home investment market in the country. But at the same point in time, there’s a lot of fix and flippers all throughout the country and definitely here in DFW where the margins are lower. Right. So you have the thing that I’ve seen more than anything else. Well, there’s really two things. Number one.

Michael Vallee (18:44.824)
Yeah.

Dylan Silver (19:12.568)
from hosting this show is I’ve seen I’ve got to be networking and people who are like how do I get into whatever it is you have to be networking because that’ll supercharge what you’re doing and then the second thing I would say is you have to be willing and ready to pivot because you could be a fix and flipper you might love those sites you might love talking with your guys you might love going to Home Depot you might love doing the rehabs and tomorrow you got to be a hard money lender because the market shifts and if you’re not spiritually ready

as well as, you know, from a core competency level, level ready, you’re going to be just like Blockbuster. You’re going to be the thing of the past.

Michael Vallee (19:50.445)
I couldn’t agree with you more. Successes where opportunity and preparedness meet. And so, like during COVID, we literally crushed it in short-term rentals, you know, and I got sick of everybody, not sick of, but I had a lot of people asking me questions, questions, how are you doing it? How are you doing it? So I finally put together that book just to be able to reference. But following when this interest rates went up,

the inconsistency of the market, you talked about, you you have to be able to pivot is that when we looked at the overall model, even though we crushed it like during COVID because everybody wanted to be isolated, we remodeled houses, I built pools, set this up, my wife did all the decorations, furnishing all that stuff. And it was worth, the model was working phenomenal. But.

After the other options opened up the ability to travel the going back to hotels being around people It’s softened the demand and we experienced a lot of seasonality here in Arizona. So in this in the summer months you were Competing on price and it also brought a certain type of tenant that we you know We didn’t want to sit there and bid around Against everybody down to get just to fill the place and cover

you know, the monthly mortgage. So we actually shifted to now that rents, interest rates went up, traditional rentals, we went back to a traditional rental model because it’s consistent. I mean, we’ve got 3 % money on these things during that last refi and now rents are, you they might cost $2,000 and we’ll rent them for $4,000 per month. And they’re all obviously very well done because they came out of the short-term rental.

Class of house and so that’s all working. Well very consistent lower maintenance less management so much better

Dylan Silver (21:48.654)
We have to stay in touch here, Michael, because you’re talking about all the things that are my language. Passive income, being able to pivot, you got the neon sign in the background, and you’re living in Arizona. I tell people the only place nicer than Arizona is South Florida, and I’m not there yet. I’m not ready to move and jump out there to South Florida just yet, although maybe here sometime soon. Michael, we are coming up on time here. Where can folks go to get ahold of you?

Michael Vallee (21:57.849)
you

Michael Vallee (22:14.881)
You can reach me at ValleeReality.com. V-A-L-L-E-E-Reality.com is a great site. I’m on LinkedIn. I have a big presence there. Yeah, so those are good.

Dylan Silver (22:30.606)
Michael, thank you so much for coming on the show here today.

Michael Vallee (22:35.639)
Yeah, it’s been a pleasure. It’s been a fun conversation.

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