16 months to financial freedom in Netherlands with Martijn Van den Berg

16 months to financial freedom in Netherlands with Martijn Van den Berg

Ney Torres:                        [00:00:00] Today we have an interview with another real estate investor, Martijn Van den Berg. Welcome Martin.

Martijn Van den Berg:   [00:00:08] Thank you very much. Thank you for having me here.

Ney Torres:                       [00:00:11] Also with me is Ms. Veerle Van den Berg. She's going to help me today to run the interview because I'm a little sick and my throat, it's really hurt. So, thank you for your time. And also, I would like to ask you Martijn, how did you start? What is your story? How did you end up in real estate?

Martijn Van den Berg:   [00:00:36] Well, it's a pretty long story, but I heard me have sometimes so I will give a summary of how it all started. I think like many of us, I didn't got any proper financial education when I was younger from my parents.

[00:00:50] My father had a very decent job. He was like proper, like middle class working for the national Dutch bank, but wasn't into being an entrepreneur or how to make money. Not to mention passive income, financial freedom, those kinds of things.

[00:01:09] And also in high school or primary school, of course, I just got normal economy classes, but not lessons about money and how money can work for you. I was always pretty good in making money but I was even better in spending money. I have quite a big… yeah. We say in Dutch, [foreign language]. I was spending more than I was making.

[00:01:38] As a result, I had quite a serious debt after my studies, so about 30,000 euros. I thought finally to do the right thing. Also, my, at that time, girlfriend, said like, “Okay. Before we're going to get married, before we're going to build a future together, I want us to get rid of that debt.”

[00:01:59] So that's basically when I started seeking for help and trying to come up with smart ideas how to get the rid of the debt as fast as possible.

[00:02:11] There wasn't yet with like investing in real estate, but I met a Dutch guy while I was living in Prague and he turned out to be a financial advisor. I didn't know at the beginning. We had a proper relationship. We built trust pretty fast, and the fact that we are both actually living abroad helped a lot.

[00:02:33] Yeah, he said he had the solution for me, the perfect product. We started investing 900 euros a month in that. We would do that for a certain amount of time. He knew my situation. After 15 months, the idea was to take the money out and there was a product that would make more interest than the loan that I had, my study debt was costing me.

[00:02:59] So, I thought this was a smart idea so I would get out of debt faster. But after the 15 months, I wanted to take out my money and he was busy. He made some promotion and I was like, “Hmm. Something's not right here.” It turned out that he falsified my signature seven times and that he made a big fraud. Basically, at that point, I lost 10,000 euros. That was my wake-up call, my aha-moment, like what you mentioned.

Interviewer:                      [00:03:29] Yeah. So how did you go so fast?

Martijn Van den Berg:   [00:03:35] Well, so this was what was leading up to the fact that I was like, “Martijn, you need to educate yourself. You need to put time and money in educating yourself and becoming aware of money and finance. Not only how you can work for money, but how money can work for you.”

[00:03:59] Yeah. At that time, my whole world was falling apart. I even called my girlfriend. “I don't know if you still want to marry me.” Luckily, finally she did and we are married now for almost five years.

[00:04:17] Yeah. So, this was my big wake up call. Now, looking backwards, I really would like to see the Dutch guy again and then not to kill him this time, but to thank him because he really opened my eyes.

[00:04:31] From that moment on, we started going to seminars, events. I started to read books like Rich dad, Poor dad. Yeah. And pretty soon we found out that real estate was historically the best way to build wealth and to get out of the rat race. We also figured out that the idea that a lot of people have with real estate is that you first need to have a fortune, which you then invest in real estate. But we actually found out that nowadays with the internet, with crowdfunding, and so on, they can also build your fortune with real estate if you're in an upward market, and if you use leverage.

Interviewer:                      [00:05:18] Yeah. So, how did you get the house and how did you find them.

Martijn Van den Berg:   [00:05:24] Well, the first property we got was from Findar. It's not the way I actually like to buy real estate. It’s a big real estate website in the Netherlands where most of the real estate is being offered by private sellers. So that one we got from Findar, but despite the fact that it was like a normal market, so to say, we've got it for below the asking price, and it was turn key so we didn't have any work with it. So actually, that was pretty good.

Interviewer:                      [00:06:07] Like a perfect first deal.

Martijn Van den Berg:   [00:06:10] Yeah. Looking backwards, actually, I think that was one of the nicest deals, yeah. Because despite the fact that it was not off market, it was below market value. It was turn key. It was very easy. And that's also what I now teach my pupils that come to my courses is to keep it simple in the beginning. Right? Just to get into the game and to understand it and don't start with big flips and reconstructions and those kinds of projects.

Interviewer:                      [00:06:40] How did you get so many properties so fast? Because you have multiple properties now and you did it in a short time span. You started and now you have more. How was that process for you?

Martijn Van den Berg:   [00:06:55] I think I can summarize that in one word, in this mindset. That's also why I always say it's not about like people, when they think about real estate, they think deals, they think money. And of course, those are like crucial elements in doing real estate. But I think if you have the knowledge, if you take action, and if you have the right mindset, if your why is clear, like why you are doing it, why do you want to become financially free? Why do you want to do real estate? Then the deals and the money, you will find them. It will come automatically almost. Especially in this market in the Netherlands also, like money is almost everywhere.

[00:07:40] There's a lot of people out there who are fed up with the fact that they don't get any interest when they have their money sitting on their bank account, who want to make a decent return on investment. Deals are a little bit harder to find at the moment, but also not impossible when you have the right network.

[00:07:59] So, yeah. For me, it was just this mindset, and the situation, the pain was pretty big. The fact that financial advisor screwed me over, so to say, and yeah. It was just very clear why we were doing it. We want to become financially free as soon as possible. And, yeah.

Interviewer:                      [00:08:21] So how fast did you become financially free?

Martijn Van den Berg:   [00:08:28] We bought our first property in June, 2018. We became financially free after 16 months.  Yeah.

Interviewer:                      [00:08:40] That's rather quick.

Martijn Van den Berg:   [00:08:43] Yeah, it's pretty quick. And for us, I don't know what your definition of financial freedom, but for us it means that our monthly expenses with our current lifestyle are covered with passive income from real estate, from rental income, which in our case meant about 3200 euros a month.

[00:09:05] So yeah, that was pretty quick. I mean looking backwards with the knowledge that I have now, I could do it in a couple of months but still it was like 16 months definitely. It was definitely really fast. Yeah.

Interviewer:                      [00:09:21] So you were talking about getting multiple properties. You told me you use Finder for your first one. How did you get your other properties and what were the things you learned when you purchase those properties? And what were then the negative sides of this?

Martijn Van den Berg:   [00:09:41] Well, that's like three questions in one. Well, how we got the other properties. I started using the flyer. I used the flyer method and that, that has been extremely successful for us.

[00:09:55] It's not working in every city. I mean, there are some cities where people receive a lot of flyers and they can make a wallpaper in their living room from the flyers. But like, the area where we are buying are certain buildings. It worked really great.

[00:10:14] Usually they say that from 100 flyers, you get like one response. But in our case, the, there was much higher. We bought a lot of real estate through the flyer off market. I really loved that because you are much more in control over the whole process. There's no real estate agent in between. You're going to look at the seller right into the eyes and see what they really want. Like what's their situation, what's their problem, and how you can solve that and how you can create a win-win situation so that everybody is happy in the end.

[00:10:57] Yeah, so we've got a lot of real estate through the flyer and also sold a lot of deals through to other people that we've got from the flyer because obviously we can't buy everything. Even if you wanted, there's just not enough time to take every deal. And some deals are good, but not good enough maybe for yourself. So, you just pass them on.

[00:11:22] Other ways, we've got like a lot of tips as well through the [foreign language]. It’s like the association also of the owners of big apartments, buildings, complexes. But there was another way. Or from real estate agents, but then they’re not like proper looking real estate that they're proudly presenting on their website, but like some ugly house that needs to be sold fast. There's many different way. For me, it all comes down to your network.

[00:11:58] Everybody can be sourcing deals for you. It can even be your own tenants. Yeah. Talk to people in the market, in the bar, in the supermarket. Do flyer-ing, real estate agents. There's many different ways.

Interviewer:                      [00:12:20] So, what kind of deals do you look for? What are your criteria?

Martijn Van den Berg:   [00:12:27] My criteria. Well, ideally, of course, I would buy off market and below market value because that's where your first profit is when you buy or when you sell. It's like a cliché, but it's very true. That’s in an ideal situation and we are in a quiet tough market at the moment.

[00:12:47] Really like a sellers’ market. In the end of the day, it's all about the return on the investment. How much money do you make with the money invested? If I know that they have a very good tenant and a very good return on investment on the property, then I'm not going to pass the deal because I can buy it below market value at this stage.

[00:13:13] But usually I will be looking at a yield of like at least 9%. 9%, 10% ideally. Ideally more. Apartments or like single houses from let's say 60-70 square meters. And I tried to buy around… Well, it's getting harder and harder, but around 150,000 euros at the moment.

Interviewer:                      [00:13:44] In the first three questions that I was asking about how do you get your financing for these properties, where do you find it?

Martijn Van den Berg:   [00:13:54] The financing for the properties? Well, yeah. Because of my mindset, I did basically whatever it takes. I have normal mortgages with banks. We did two projects with crowdfunding through micro website in the Netherlands. I did join venture deals with two people.

[00:14:19] So like, I basically. Own real estate now for 50%, with not a single Euro of my own money in. Loans with family and friends. Yeah. Basically, everything I could imagine like everything that was necessary to become financially free. Some people when they hear that, they might consider it risky that I used a lot of leverage, but it definitely was a calculated risk. There is a plan behind it. I'm like, “I'm young. I have big goals. I want to become financially free as soon as possible. The market is good now.” Yeah, let's get the ball rolling and let's get as many properties as soon as possible, so that we also have benefits from the value increase with the equity.

[00:15:17] And now, of course, like when we are financially free and we have nine properties now and more than 5,000 Euro cash flow every month, we use that money to pay off the mortgage, to pay off the loans, and to basically stabilize our portfolio and to get ready for the next crisis to come.

Ney Torres:                        [00:15:38] So, I wanted to ask you something. There's something I always say in the bulk as is, and it's that when you say the nice things you are selling, but when you say the bad things about something, you're educating. Will you share with me a couple of horror stories about real estate that you may have had where a lesson was learned.

Martijn Van den Berg:   [00:16:00] Yeah, you're right. Making mistakes is great. I'm a really big fan of making mistakes because that's when we really learn. And I have to say that luckily, because I invested quite a lot of time and money in educating myself first, even though it was just within a couple of months, but I tried to go through every course or every event that I could find. I was really like a sponge, sucking in all the knowledge and, and trying to figure out, okay, what's your strategy? How did you do it? And how am I going to do it? So luckily, I didn't make like huge mistakes, but of course I made a few along the way.

[00:16:41] I think the first one was with our second property. The first one, everything went actually according to the book. But the second one, we bought without financial condition because we were really sure that we would get the more of it. Right. And of course, it's a big advantage especially in this market when you can give certainty to a seller that you don't have the financial condition that if you don't get the money, you can still pull out from the deal.

[00:17:12] However, a couple of weeks before we were supposed to go to the notary, we heard that we were not getting the mortgage. So that was pretty, pretty stressful. Luckily in the end, everything turned out well. I found the money somewhere else. I could borrow it temporarily from a friend. But that was pretty stressful.

[00:17:34] Other things that happen. Yeah, I think we bought like a property with a F box. I don't know the word in English, but basically that you're not owning the land where the house is, where the real estate is. And you have two types. You have in cities like Amsterdam. You have the F bathroom, the town hall, which is pretty fine, but you also have private... So basically, it's a loan from a company that you have to pay off. We were aware of it, but we were not really aware of the consequences in terms of like the impact that it could have on the financing.

[00:18:20] Luckily, we were anyway planning to crowdfund that property, but if we weren't, then it would have been quite hard to get it financed with a regular bank.

Ney Torres:                        [00:18:41] Do you have another one?

Martijn Van den Berg:   [00:18:43] Yeah, I have another one. That was basically in the Netherlands. In order to be able to rent in the industry sector as we call it, you need to have a certain amount of points. We bought a property that was pretty small in terms of square meters. But we thought we would figure out a way how to collect more points and how to get it into the free sector so that we could get a good return on investment that we were looking for.

[00:19:16] However, after we made the deal, we found out that whatever we would do, it would be impossible to get that property into the free sector. So, yeah. But luckily, we bought it off market also through the flyer and way below market value. We made a fix and flip out of it and we made, I think, 20k profit on it. I take those kinds of mistakes any day.

Ney Torres:                        [00:19:43] Yeah, you're right. So, a margin of safety. That's how we call it here. You need a margin of safety when you are bidding for properties. I was wondering, how does a day in your life looks for you? 

Martijn Van den Berg:   [00:19:56] Well, I'm lucky enough to now do real estate full time since last October. I quit my job. I had a great business. I was organizing dance events, flying around the world to organize massive parties, which was great.

[00:20:17] But waking up every morning, I was looking forward more to doing real estate. So, real estate now is like my full-time job in terms of… Yeah, I started giving courses. And then now I am financially free. Now, my mission is to make as many other people as possible, financially free in the Netherlands, and to help and inspire them.

[00:20:42] Most of my time nowadays goes into like creating marketing materials, preparing for workshops that I'm giving, spending time with my mentees in our Facebook group. We're doing coaching calls with them.

[00:21:00] Yeah. And when I have some free moments, educating myself in real estate with reading books or watching movies, and of course, trying to make some deals here and there for myself as well, because I'm all about practice what you preach.

Interviewer:                      [00:21:18] Yeah, that sounds great. What would you say to people who are starting out in this day? Any advice you want to give them?

Martijn Van den Berg:   [00:21:31] That's a good question. Yeah, I think it's really important that you know why do you want to do real estate. I mean for most people it is just a tool, a vehicle to get where they want to go. I think if you are clear enough, what is the dream life actually that you want to have, how does it look like?

[00:21:59] The more specific you are about it that you can really clearly see it and describe it or visualize it. If you’re driven and your why is enough, you will find your how. If you just do it only, on the other hand, for the money, I'm not sure if you're really going to become really big and successful in it.

[00:22:23] A lot of people in the Netherlands or internationally talk about passive income but I call it like a passion income. I think it's really great if you can have a passive income from something that's your passionate about. Yeah.

[00:22:42] For me that's real estate but for somebody else, it might be stock, or crypto. I think it’s important if you want to become financially free that you choose the right vehicle for yourself or a combination of all of them.

[00:23:01] Invest in yourself. You're the biggest asset that you have so invest time and money in your knowledge and educate yourself. I'm sometimes really mind blown that people, without thinking about it, they spend like over a thousand euros or dollars on the newest iPhone. But then if you ask them to invest a similar amount in their own education that can set them free for life, they consider it like a lot of money and it's like, “Oh no, I will figure it out myself.” “And there's like books. I can find some movies online.” You’re right. I mean there is a lot of information out there nowadays for free or that's cheap. But I think it's really important to always keep educating yourself and also that you become part of some groups and some networks because they will help you a lot and motivate you when you have some obstacles or when you're facing some difficulties.

Interviewer:                      [00:24:02] Yeah. That's also my experience with starting out. You need to find like-minded people around you to really expand yourself and going out there and get the support you need.

Martijn Van den Berg:   [00:24:15] Yeah, exactly. So, find yourself a mentor. Find somebody who is already doing what you want to do, or who already is where you want to go. Yeah. I also hired a real estate mentor myself and together with my wife. It cost us 20k for one year, which is a lot of money. But on the other hand, he taught me. JV deals and how to buy real estate without any own money. I mean how does that compare to the 20k? What's the real value of that? Yeah.

Interviewer:                      [00:24:53] I have one last question. What would you have said to your younger self when starting out?

Martijn Van den Berg:   [00:25:02] Wake up! No. Sometimes I don’t know. Like I have the feeling of really like I was sleeping. Like nowadays I've gotten messages from 14-year-olds who want to go in real estate, and I was like, “Really?” Like, what was I doing at that age?

Interviewer:                      [00:25:20] That sounds crazy that they want to start when 14, 15.

Martijn Van den Berg:   [00:25:24] Yeah. I love it. And I have to say nowadays, like in the past, I was really looking up to older people because they have more life experience, and it's quite normal. I think that when you're younger, you look up to people who are older. But nowadays I get so much inspiration and motivation from the new generation, from these kids nowadays who are full of ambition and plans. They take action and are successful eCommerce entrepreneurs or like doing a lot of lot of stuff. So, that’s really cool.

[00:26:03] Yeah, I find it hard to say what I would have said to my younger self because I do think that things come in the right moment. When you're ready for it, and of course, I would have been very happy when I would've started with real estate when I was like 20 because the sooner you start the better, right? Like, with any type of investment, there's one thing that you can’t get any more and that's time. The factor of time is a huge advantage in any kind of investment.

[00:26:38] But on the other hand, I'm happy that I woke up, even though it was a bit later because the majority of the people will never wake up. And that's maybe also a piece of advice for your listeners. Please wake up. There's nobody going to look after you. No government. No boss. You have to take care of yourself and please make sure that you educate yourself financially and take action. You deserve it to become free.

[00:27:07] I really believe that financial freedom has nothing to do with money. It might seem like that, but once you're free from the rat race and you can work because you want to and not because you have to, then you can really start living from your passion. I'm sure that if money will be no issue for anybody in the world and everybody could live from their passion and follow their purpose, that the whole world will be a much better place than it is today.

Interviewer:                      [00:27:39] Well, thank you for that very good final statement that you gave us. So, where can people find you?

Martijn Van den Berg:   [00:27:48] People can find me on Facebook. Martijn Van den Berg. They can find me on LinkedIn as well. I do have some websites as well already registered, but they are still under construction. [unclear 28:05].

Interviewer:                      [00:28:14] And don't worry English native speakers. We'll put it in the notes underneath the podcast. Very well, Martijn, we want to thank you for being on our podcast.

Ney Torres:                        [00:28:27] and, um, this is a very inspirational story and I really thank you. Also, I want to thank Veerle for being here. My throat is a little hurt and I really appreciate it. Thank you so much. See you next time.

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