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Feb. 17, 2022

Ep 119- Running A Profitable Business First With David Richter

Ep 119- Running A Profitable Business First With David Richter

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Transcript
today we're here with
david
he's our guest today and i have my
co-host matt rogers here from the hive
mind david richter is
interesting person so we went to high
school back together uh went to high
school together years ago
um
it's been 12 years now yeah a lifetime
ago a lifetime ago about a third of our
life ago
right
a third of our life ago we went to the
same school and it's just been uh
interesting coming circling back into
the same kind of people so it's
interesting it's very interesting so
um
have you always been an entrepreneur
i guess not no because i started out
working in college at just a normal you
know normal job i was
at a warehouse you know doing
doing things there as a machinist and as
an operator as a you know operating
forklifts and stuff so no i wasn't
always an entrepreneur but read the book
rich dad poor dad in college too so a
friend of mine gave me that book so it's
kind of what unlocked like oh wow
there's a whole nother world out there
and another a whole nother way of
thinking than what i've thought of to
this point so that's kind of what kicked
me off on the entrepreneurial journey
gotcha gotcha so i always i always like
asking that question because some people
there's just different varying
backgrounds yeah kind of go any
direction and so i'm like and i i didn't
know like i said a lot of people work at
the at different places and call centers
and such back in the day that's where i
came from the call center right here
i mentioned that one i was like i'm a
truck driver
right
so
um
one thing
i'm curious about so how long you've
been in real estate so you got into real
estate right after college yeah during
college it was 2012 so
about 10 years now
when that was when i bought my first
deal so i read the rich dad poor dad and
said i got to do something with this
knowledge so i actually used a realtor
in the local area when there was deals
everywhere and so cherry picked one off
the mls it was a hud foreclosure
property
fixed it up and
uh actually rented it for a while so
cash flowed it had pretty good cash flow
back in the day and then also lived in
it once i first got married so that was
the first house i lived in then
eventually we moved out of that house
and i lease option that property and put
a lease option tenant inside there and
then that tenant cashed me out six
months later so that was a fun first
deal for me so that's kind of how i got
started into it and did a couple
different things with that property and
from there did a lot of deals with a lot
of investors up there in northwest
indiana where we were
was part of a company there where we
took it from five deals to 25 deals a
month doing wholesale fix and flip
turnkey lease options rentals like any
everything in between so seen a lot in
the last 10 years in the real estate
world and done a lot of different types
of deals and sat in a lot of different
seats as a real estate investor
man that is awesome so i i think it's
funny because you actually lease option
your first property i did the same thing
too at least
i'm still waiting for him to
buy me out but if i would have sold it
with a realtor i would have only made
like 20k and i got 30k down i make 500 a
month for two years and then whenever he
cashes me out i should make like 60k on
it right nice there you go that's the
way to do it so i'm like i'm like yes
please option for the win i'm gonna
leverage my own mortgage there it is
it's good stuff
no that's awesome so one thing i'm
really curious about so i didn't know
you're in there for 10 years because i
think um you said you've done over like
700 transactions
over 850 so between
between being with that company and the
deals i've done because i've done fix
and flips or wholesale and then also i
had a little rental portfolio too but
yeah i've been a part of over 850 deals
up to this point
wow
that's crazy i mean 10 years is a long
time too
it is it looking back on it yeah it
feels like it's been like i can't
believe it's only been 10 years since
you know like i bought that first house
um but it's also like wow a lot has
happened in the last 10 years you know
got married have a daughter now you know
lots of lots of life changes moved from
that area now in florida so
yeah it's a lot can happen in 10 years
so if you're listening to this now and
you're like i'm just starting out
five ten years can change a whole lot if
you start listening to good people like
daniel and matt here and taking their
advice and getting on hive mind
so david you know for the newer
investors who maybe haven't done their
first deal or have done a couple and are
looking to
get more of a foothold in the industry
can you talk about your first year or
two in the business you know it sounds
like you're able to find a great deal on
the mls back when those were very kind
of easy to find and prevalent what steps
did you take after that to start
ensuring that you're able to to source
great deals and be able to to do the
things that you're able to do now
so i found a local investor in the area
and basically instead i'll work for free
you know like uh i've got a day job but
i'll work nights weekends whatever so i
did that with that investor for about
eight months learned a lot during that
time and then after eight months he
offered me a you know position there so
i was like heck yeah because i like want
to work in the business and i want to do
more of these deals so that's where i
got into it and started learning i not
only was now learning how to acquire a
property the bigger thing now was i was
learning how to run a business what to
do what not to do how to grow it you
know like there was just so much more
because they had when we like when i
said when we started they were doing
about five deals a month and they had
about five people but then we started
growing and started doing other
transaction types so that whole it was
basically pay to play because i was
getting paid to
you know to pay to play the game and
also to help provide value to them you
know and to and then i eventually bought
a couple deals from them as well too and
as well as sourcing my own but
that to me was the quicker path to
success than me just saying okay let me
dump some money into marketing and like
let me get it set up so i kind of wanted
to learn the business at that time
before i you know jumped in with both
feet and it was a it was an awesome
working and learning experience during
that time was there for five years and
you know built a little side portfolio
as well too sourcing deals from you know
the company and from other places as
well so it was a good ride and i learned
a lot of good lessons but
i would say if someone's starting out
first it's getting around people like
you guys you know like listening to the
content you put out listen you know like
what value can you bring to them like do
you have a certain set of skills because
like me daniel probably knows you know
like in school i was pretty studious you
know i was like more operational you
know so that into the business world
that translated into more like i could
help you with your systems your
processes you know that type of stuff
and that was what i went in there to
help them with and so so started helping
them like let's get the acquisition set
up so i did acquisitions you know and
like direct to seller moved to
dispositions and selling the property
got that set up and started then i moved
to the
um transaction coordination did that did
project management in the flips got that
star property management when we started
getting more deals and then eventually
the finance seat and accounting seat as
well too so i was kind of like though go
in
you know get the process down and then
do that so that's kind of the skill set
i had so if you're listening and you're
just starting out what skill set do you
have are you good on the phone if you're
good on the phone you're going to eat
well anywhere in any real estate company
because that's the people that they're
always looking for it's like if you're
good on the phone and can close deals
but yeah that's how i got started and
you know i would just say if you can
provide value to someone you'll you're
going to get that value back
now daniel this is this is the second
time that we've heard this from from our
last two guests
you know suggesting that hey you know
instead of going out alone
get a job with a company and learn their
ropes from inside and like david was
talking about paying to play you know
you get paid to play and i think that is
that's a huge point to learn on the job
and and not have to you can make the
mistakes
i don't want to say on someone else's
dime but you have a little layer of
cushion and protection to make to learn
and grow and not feel like the way the
world's on your shoulders to you know
have to uh you know go out and hunt and
do everything on your own yeah and
that's where uh that book that's come
out in the last few years who not how it
was like that's kind of the who that i
was searching for at that time with
before the book was coming i was like
this was what my path what i wanted it
to look like and how i thought i could
get there faster and it was a great
warrant like i said great learning
experience now starting a couple
different businesses over my lifetime
now and like what to do what not to do
and just you know getting those that
real hands-on experience of seeing a
small company grow into a little you
know doing 25 30 deals a month and 300
deals a year so it was a it was a lot of
fun and like you said getting to be
around those people and really learn
from them
so i have a question
so
you're integrators so integra i feel
like integrators sometimes struggle to
find their right
yang to their yin
and um i found mine and it works out
very well there's a i know a lot of
integrators that struggle to find their
place in business just because they
don't really they don't they might not
be good on the phones they might not be
good at negotiations they might be good
in person like
and i'm even even alluding to now like
now you've kind of
maybe hired that position
right
now i've gotta talk now that i have my
own business and all that i
i have a lot of visionary inside of me
too but that's where i have to make sure
i have the right integrator got a great
guy on our team that is an absolute and
absolute he's the epitome of an
integrator type operator and is really
good at our cfo direction and making
sure we have everything for our
operations team so yes it is finding
those right people and i'm no i'm not
the best sales person so that's where
it's like i have to have the right sales
person i have to write to have the right
finance person i my specific skill set
is business development i like that a
lot i like finding the key players the
culture the people the numbers like the
job of a ceo so that was where once i
started my own business it was like i
can't just be the hunter gatherer and
like killing the deals and taking them
down i now have to learn how to be that
leader and that developer of other
people because i need other people to do
that so i'm not always doing that so i
can focus on how do i grow this business
how do i expand it how do i have how do
i triple you know the team member base
and how do i triple the client base
instead of just like going out there
hunting one at a time so yeah it's been
definitely been a journey a growing
journey and yeah finding those right
people it is it is hard it's for that
yen to your gang you know type thing the
integrator visionary and really making
sure that it's someone that fits your
core values it fits the you know all the
things that you need to make sure that's
going to make you successful over a long
period of time so it's definitely
something that
as you start your own business something
to start working on right away becoming
more of that leader attracting the right
people and really always always
you know it's like always be closing
it's like always have your eyes open for
that person because they're out there
they are out there right now that yen to
your yang is out there and it's like you
have no idea where they're going to come
from so that's just like always have
your eye open for the good people you
can bring on your team
man that was good and i read i i think i
think we knew resonate in the same part
because like i think i think we're on
we're on the same level probably yeah
but it's kind of interesting though
because i can i can play both sides too
because i'm running my own businesses
out to be the visionary in those cases
but
in hive minds case i'm the integrator
so
i play bo i play i play my hats right
yeah well we do we wear a lot of
different hats especially if you have
different businesses like that it's like
sometimes you have to be sitting in that
seat in one you know the integrator
operator but then in the other ones
you've got a good team around you so you
can be more the visionary and like
here's the direction here's where we're
going
here's the accountability you know that
i'm going to hold you to and then
run you know run as fast as you can
so let's kind of dive into what you're
doing now so you said you worked for
five five years for that company kind of
split off did your own thing
that's been seven years now so what do
you what what kind of businesses are you
running now sure so once i left there i
had sold a lot of my holdings to at that
time which allowed me to travel do
whatever so i moved across the country
to work with another investor because i
like partnering up you know it's like i
like that type of deal because honestly
too i don't want to just build anything
from the ground up so that's where i
started working with another investor
and the first thing was i started with
the finances because i'm like the
numbers don't lie after sitting in that
seat and knowing how the numbers
influenced everything you know from
marketing and knowing my returns on
investment to selling the properties and
making sure that this is what we had
into the property and this is what we're
selling it for to make the true profit
here on this property you know like
getting that education and sitting in
that seat when i went to somewhere else
it was like the first thing i don't care
what you tell me about your business
show me your numbers like i need to see
your numbers and see if this is a
legitimate operation so i did a dove in
and there weren't numbers you know like
there wasn't a lot there was stuff set
up but it like wasn't in the right place
or whatnot so i went in and said hey we
gotta fix this we got to have clear
metrics here so we can hold ourselves
accountable and hold our team members
accountable so we went in cleaned up
their financials over three months and
then from there was able to see that
this investor i was working with he had
a portfolio and he was very under
leveraged like he had like 30 percent
loan to value on his property so only
had a 30
mortgage you know on the total
investment on his property or what the
property was worth so he said yeah i'd
love to be at like 50 or 60 i'm
comfortable at you know 50 or 60 percent
loan to value so then he was able to
pull out a bunch of cash and then he
said something to me which started this
next business he said
knowing the numbers has given me more
clarity more confidence and this has
changed my life like going through this
process so to me that was a huge light
bulb of like i bet you a lot of
investors are good at making the money
but like don't necessarily spend a lot
of time on the financial side to see
what the levers are that can really
turbo charge their cash holdings their
business their you know their leverage
their you know their profitability so
that's where i started calling mentors
and was like hey what do you think about
me starting a business of you know like
helping investors with their financials
from someone who's been in real estate
investing and can actually speak both
languages real estate and the numbers
and they were all like yeah i think that
would be great i'd have a bunch of
people to you know that could help you
know you could help with that service
and one of my mentors gary harper he
told me like hey have you read profit
first and so i was like no i've never
read profit first so i i downloaded that
book by mike mccowitz read it in one
evening took 10 pages of notes and said
this is a great framework for the cash
flow management piece of businesses so
that's where i kind of got the profit
first bug and you know of saying like
okay we gotta at least manage the cash
you know that's one of the big pieces
that's missing and one of the biggest
pieces in real estate like come on i
mean up and down all the time if you're
wholesaling flipping you know you'll
have a two hundred thousand dollar a
month and then you'll have like a fifty
thousand dollar or a ten thousand dollar
month it's like the roller coaster is
real so that's where i was like okay i
wanna start this put this framework in
place so that's where i started a
fractional cfo company to help investors
with their finances to have kind of a
different person than a bookkeeper who's
more transactional cpa who more works
for the irs and making sure your ducks
are in a row for them the cfo is that
business strategist they're the
financial business strategists on the
team coordinating all that and making
sure you actually have profitability so
that's where i started that company to
be able to do that and implement profit
first and give people clarity and
confidence in their numbers
that's a valuable resource too for for
investors and those who like you said
before know how to make the money but
maybe struggle to know how to hang on to
it or where to allocate it are there a
couple of things you see over and over
again when you work with investors that
make um
maybe some of the same common moves that
you see that you can go in and clean up
is there anything that kind of sticks
out that happens over and over again you
see sure so the biggest thing that i see
as a mistake is a lot of investors work
and just business owners in general
have one big bank account where
everything goes in and everything goes
out of including personal but that's a
whole nother story co-mingling let's not
go down that rabbit hole but where you
have one big bank account everything
goes in and out one day you feel like a
cane especially in real estate king or
queen because you've got a you know
hundreds of thousands of dollars in
there from your private lenders and all
those people supplying your money from
you know for your deals then the next
day it all goes out for all the rehab
projects you got payroll run and
marketing running and all those things
running out and then the next day you
feel like a proper because you've got
like a thousand dollars in there so
that's where you know that's where we
see a lot of people they have that one
bank account it gives them no clarity
it's like i where'd all my money go you
know that's the the most common question
that i get when people are describing
their finances is i don't know where my
money is going you know i feel like i'm
making a lot but i have no idea where it
goes and that one of the biggest reasons
and mistakes that people can make is
that having that one big bank account so
that's where the premise of profit first
comes into play because it's all about
separating it out getting clarity
getting around that but that's one of
the biggest ones the second one is just
sticking their head in the sand like
once they go down this road and start
making some money on some deals they're
like i'll get to bookkeeping later or
i'll get to the finances later and then
it's like three years later they're
coming to me and they're like i have
nothing set up help me and it's like
well now you're growing so fast that
it's like we got to put some foundations
in place first of just getting the
numbers in there and like helping you
get to just square one of knowing that
we can't even do like the fun stuff yet
of like analyzing those numbers and like
forecasting out where you're going to be
and like what do you want to invest in
or what do you want to take home for
your pay or whatnot so that's where
don't put your head in the sand like get
a simple system and make sure that you
implement it like a profit first or
something like that to at least get a
hold of your cash then the first one of
the first hires for a real estate
investor should be admin slash
bookkeeper so that way they don't have
to do that because like we all know most
of us are not that person we're not the
numbers person so we need to get that
off our plate so we don't have to you
know worry about that and
kick the can down the road until it
becomes just a gigantic mess because now
you're doing 10 deals a month and like i
have nothing in place so those are
coming some of the big mistakes i see
right out of the gate with a lot of
people so
is your book more of a
diy type of deal where you instruct them
how to
come up with the right the right plan to
make sure they manage it themselves
right so profit first the original book
gives a great framework for
for managing the cash this book is more
for the real estate investor that the
original book by mike mccow it's profit
first was more for any type of business
service anything you know like brick and
mortar where my book profit first for
real estate investing takes that same
framework but applies it to real estate
and all i know is real estate language
so it's full of stories people that i
you know we've worked with before in the
past and just
very directly towards real estate and it
gives them yes not only the mindset and
all that but like here's practical steps
because the two big things a prophet
first that i feel like separates it even
from a rich dad poor dad or from uh you
know richest man in babylon is it not
just tells you like pay yourself first
and like take your profit first and like
teaches you that mindset it also says
here's some practical steps here's a
system for you to be able to implement
and be able to know where your cash is
going so yes i detail it out in there so
that's why i wanted to say
even if you're new and can't work with
us you know or like are at that level of
where you're just starting out at least
get the book and at least read the book
and implement it because you can start
it from the very beginning i was on a
podcast well my i've got the profit
first rei podcast and i had a guest on
there and he said if i would have just
started this system just from the bare
bones at the very beginning i'd have
five million dollars more in my account
right now today and i was like picking
myself off before and that's like where
i said you got it that's why i need to
get this message out no matter where you
are in your journey because this book
and this mindset is about being
profitable from your first deal or your
next deal if you're already doing deals
so that's really what the core message
is is you don't have to do more deals or
buy more rentals to be more profitable
you just need to take your profit first
wow that's awesome i think i i that's
why that's why i like i like i like your
store and like the product because it
really
my my goal is to help people make more
money your goal is to help people keep
more money right exactly and not from
just the aspect of like you hear a lot
of financial people say that usually
they're talking about okay how do we
pare down your expenses or how do we you
know like save money on your taxes or
whatnot which is all great that is all
great but you also want to actually keep
more money for you like you want an
account that is just specifically for
you so you could take more home and make
bring home the bacon for you and your
family so that's what the book is about
this isn't a bunch of tax tips or
whatnot it's about how to keep more cash
inside your pockets instead of always
paying everyone else first and feeling
like why the heck did i even start this
business
that's really interesting and one of the
things you touched on earlier which i
think most investors can relate to uh
especially in the beginning is kind of
the boom and bust nature of
month-to-month uh deal flow where you
said you know one month you might make
100 grand and the next month you might
make 10 grand or you know you might go
from 20 grand to 3 grand whatever the
swings may be what are some things you
can kind of do to put in place on those
months where deal flow is light maybe
things just aren't lining up or closing
the way they should and maybe you string
together a couple of rough months uh you
know is there anything you could do kind
of
within the book or or things you you
work on with your clients to kind of
help shelter those times when things
aren't going great
so yeah i definitely talk about that in
the book in the book i call it the real
estate rat race i mean you were
literally a living deal to deal and just
spending your you know spinning in
circles so i also write an entire
chapter on this it's chapter six where
reserves help grow your company where
you need to set up a specific account
for reserves not touch it because you
are as a real estate investor you're
going to have the months where you're
just killing it absolutely six seven
figures i mean just crazy months then
you're gonna have the zero dollar months
you know where it's like okay we're
doing 20 deals a month what happened
like how did we just close two you know
so that's where if you say what do we
want for our business and is that three
months is that six months because
obviously the the general wisdom is
three months you know at least to be
able to have a quarter so that way you
could say how do no deals in a quarter
and still be okay and that's where i
devote a whole chapter of like reserves
help grow the business because i know i
know as a real estate investor myself
lazy money to us is just like a cardinal
sin you know like i can't have money in
an account or it's just burning a hole
in my pocket so but that would be one
big way to get off that roller coaster
that up and down knowing that it gets
there's just so many benefits for that
peace of mind that helps you get private
lenders or lenders to make sure that
they can fund you because they like
seeing cash and accounts like there's a
lot of different ways that it helps you
versus just having money sit there it's
for a lot of different reasons but that
would be one big way to to get off that
roller coaster
that's awesome so um
that's your like main business are you
still doing real estate real estate
investing all that good stuff on the
side or this is like your main focus now
i was gonna say i sold everything to
start this and now that i'm here and
settling down in florida i'm gonna start
ramping it back up again but yeah i've
still got the real estate bug for sure
but no i've still at this time i've sold
everything that that i had
no i think it's interesting because i
think it's smart of you to kind of like
let's stop i know i can start it up
again i already have the information and
knowledge to do it again yeah that's not
the problem let me let me stop and
refocus and get this up and running that
we can focus on your power exactly
that's been a big point for me is focus
and that's it that and so many things
i've learned over the years from
watching other people of just like what
to do what not to do and like focus is
the one thing that everyone always talks
about and it is once you have your own
business it is hard because it's not
only focused for
your business and like all the shiny
objects that come there but it's like if
i've done something else too i still
like that stuff still want to do it but
i have to it has to be intentional and
it has to fit in line with the overall
vision so if i found the perfect partner
and they were doing it and i could just
apply the money okay like sign me up
i'll partner with you let's get it done
but like besides that it's like at this
point i have to be very selective of how
i
use my time as well too
because that's something too you know
and you probably
i don't know if you struggle with this
too daniel but coming from a background
of like working
your truck driving i come from like the
railroad industry slash working in a
business you know like working helping
with the investors sometimes it's like i
like doing the urgent and like doing
that type of stuff and it's like i need
to focus on what's good for the overall
business what really is that highest and
best use of my time so that's another
thing that has been really
really key for you know staying on track
of like and growing as a business owner
like okay no there's sometimes i'm not
going to get to that thing even though
it's urgent it's just not important
right now i need to do these other
things that are very important in the
overarching goals so yeah it's like
right now for me real estate would come
up if found the perfect partner and if i
could just apply the you know the the
the money or what not to because that's
about what i'd be good for at this point
because i'm not gonna i'm not gonna be
on the phone i'm not gonna be talking to
sellers i'm not gonna be doing that type
of stuff anytime soon much rather
partner with someone you're retired
right i'm like yeah i'll supply the deal
i'll supply the dm for the money for the
deals here but like i don't want to be
out there running deals at this point
that's awesome um so how how once you
start this when do you kind of stop and
pivot into this into this thing
so it's been about two and a half years
now and we've seen
we've been working with a lot of
investors right now we're at about 50 on
a monthly basis that we're working with
um you know on a fractional cfo basis
and you know that's been a passion of
mine just seeing people go from broke or
spinning in their rat race to now having
money in these different accounts having
true cash profit and being able to do
what they want so yeah it's been about
two and a half years now of helping
those people get out of the rat race
so i have a question
bring it up what what's the difference
between
real estate wholesale versus um
recurring income
so
other than like real estate wholesale i
feel like is just an atm machine
you know like that you go out there and
it's a one-hit wonder you have to have
amazing people and processes for that to
even be
recurring but it's never going to truly
be recurring uh the recurring is amazing
you know like that
whether that's rentals multi-family
software
services whatever that might be
subscriptions you know like that's where
you you're building that base because we
have clients like that we have clients
who have wholesale deals and we have
clients who have wholesale deals and
rentals and we have clients with rentals
and the people that have rentals they're
trying to build it to a base of like
just to take care of my needs we have
one client who achieved that like their
rentals could take care of their needs
so any flips or wholesale deals icing on
the cake you know because they now had
their recurring like in rich dad board
had you know they and the cash flow 101
they got out of the rat race you know
like with their recurring you know
subscription or whatever now it's just
rentals that are replacing that
but then that other stuff is icing on
the cake but a lot of people use a
wholesale or whatnot to then get into
the rentals and buy the long-term or buy
the multi-family or the commercial
buildings or whatnot so that's where
yeah i'm definitely a huge fan of the
recurring and the rentals and the cash
flow subscriptions and that type of
stuff because there's a lot of security
in that
way more especially if you like you guys
like if you're providing a service that
is literally helping people make money
and literally getting them out of their
rat race there is no feeling like that
of being able to have a successful
business that's helping others and also
is recurring as well too because now
month after month we're going to keep
helping these people so
yeah i could go on and on about that all
day long but yeah there's definitely a
big difference to me between the
wholesale business and the recurring
is there any sweet spots with uh kind of
cool or niche businesses you've seen
clients uh own that
is part of the recurring revenue or
subscription model maybe something you
haven't thought of
prior
hmm i'd have to think about that we're
working with a lot of people in the real
estate investing space one person has a
speedboat rentals but i guess that you
know that could be recurring if they
have enough you know income coming in or
enough
recurring people coming back but no i
guess i haven't seen that except for
people are in software or have coaching
packages or whatnot or have these
different types of things where you know
like programs and whatnot so we work
with a lot of real estate investors and
a lot of real estate influencers as well
too so the ones that are out there doing
the work but also teaching a lot of
people so that's a lot of the recurring
that we type we typically see is there a
good success story i'm sure you have
many with the clients that you work with
but
maybe somebody you worked with early
that was struggling uh whether it be
with cash flow and some of the systems
you implemented with them and maybe
where they've taken off to kind of
things to your guidance so
talk about him a little in the book but
there's a guy that came to us at right
when i started so like 2019
and he said like i just lost seventy
thousand dollars i have a flipping
business and i lost seventy thousand
dollars in my flipping business my
rental business is okay but not that big
so that was a big hit for us and you
know i started we started talking to him
and then you know i told him yeah i'd
love to help you here's the here's the
pricing and he went home to his wife and
said i don't know if you know we really
need this don't know if we can afford it
and she even said i don't know if we
can't afford you know can't afford not
to do this so
came on board with us and right away he
just took it like a duck to water what
we were saying like there's a lot of
people that still struggle even though
they pay for the service and they come
on board they still struggle in terms of
like should i really do this with my
cash and like do i really want to focus
on this but he took it and ran with it
so he started implementing what we were
saying we started teaching him you know
like as a business owner what the
different financial statements meant and
how he could actually utilize those to
make decisions then we started
implementing profit first getting cash
in good order and so that after a year
of doing that
great story here he called me
because he had just got off the phone
with his cpa the year before when he
lost 70 000 when his cpa told him she
that cpa said you know like in your foot
you're with your flicks and flip
business if i ever thought about doing
that i never do that in a million years
you know kind of like saying yeah no
thanks so then the next year she calls
him and says whoa what turned around
like this is amazing so and
because she called and said yeah you did
really well you had you know multiple
six figures on your bottom line so
here's what your tax liability is and
first the client said like this is
amazing you know and it told me like
this is the first time i paid taxes in
like years because i'm actually
profitable you know so profitable on my
flipping side like more profitable than
even the offsetting rentals you know
like to get me down on my tax liability
so she said you know here's what you owe
and he tells her okay that's how much i
owe let me look at my bank account so he
like literally pulls up his bank
accounts and says oh i've got this tax
account here uh profit and you know uh
income tax account and he said how much
was it told him again and he's like you
know what i have it down to the penny
almost like i'm a hundred dollars off
i'll send it to you right now she said
what like put like right now because
this was like january of the of the
following year and she said he said yeah
let me just send it to you now and take
this off my plate i don't want to worry
about it again so she did that you know
he sent it off she took the money and
then there you go like he was done for
the year he said that was the best thing
ever well then he calls me this last
year so he calls me again at the end of
2021 and said i just had the same call
with my my cpa because we're still
working with them and she told me again
like great job this year had a great
bottom line here's how much you owe this
year and so he said okay let me pull up
my accounts again and pulls up his
accounts he's got like 20 000 extra in
his account he's like i'm giving myself
a tax refund this year so like he did he
was able to take all that money out
didn't affect his operations didn't
affect his liability didn't affect
anything and he was able to take that
money out and pay himself a refund so
that's one of my favorite stories this
guy's like a poster child though because
he set up a profit account too and like
able to buy an rv from that and like
take a two-week vacation with his family
he's got young kids
puts pours a lot of time and effort into
them as well too and like really wants
to invest in them so he's used a lot of
that money for family and vacations set
up on a giving account too like to give
to start a a charity and like a camp for
children of his organization and like
his um church or whatnot and like
gave a
significant five-figure sum to them at
the end of 2021 so it was just that was
one of the best success stories that we
have working with someone um that really
took it and ran with it that's fantastic
was there any other specific kind of
business advice you gave it sounds like
you got the books in order kind of gave
them the framework about how to
um you know structure their their
different accounts so you know you have
a tax account you have your other
accounts um it sounds like this guy also
made a ton of money too in the car right
there's also was there any kind of
specific business advice you might have
given to kind of get him over the
threshold there so he works with the cfo
on a weekly basis with us and one of the
big things in that first year was he was
trying to do a lot of deals and with his
staff and with him just running ragged
and he hated flipping at that time and
so we sat down with him and said what do
you really need and what do you really
want because that's one of our first
steps is like what do you need to
survive and where do you want to end up
where do you want to be and then they
figured it out he only had to flip like
one property a quarter and he had you
know like 20 or 30 rentals and like with
that income he was able to sustain
himself anything above that was icing on
the cake so that's what he did he slowed
down and actually did less deals but
made way more profit than he had ever
done in the history of his life before
for the last two years because he said
this is the amount of deals i need to do
for what i need and then being able to
say this is how many deals i need to do
to not only sustain me to sustain the
business and to have the profit that i
want so being able to
utilize the numbers to say you don't
have to do more deals you just have to
do you know you could do less deals but
be more profitable and so other people
too we go in there and look at their
books they're like you want to do more
deals so then here's what we need to do
and here's where we need to get your
profitability so you can invest in the
business and grow and hire more people
or whatnot but for him it was slowing
down because that was that's i think
that's a question that everyone asked
themselves at one point in business is
like do i want to keep scaling and
growing and grinding and going and you
know like sell this off one day or in
some of us have to search internally do
we want to
slow down do west deals and just be very
very profitable and so for him he had
that choice now now that he saw his
numbers had a handle on his cash flow he
was even able to make that decision now
and like have that conversation of like
which way do i want to go so for him
he's like my kids are young i'd rather
go slower right now i'd rather not build
it as fast and as much as i thought i
wanted to and what every mastermind was
telling me so i was like let me do west
deals but be more profitable so that was
kind of like a big decision he had to
make that we kind of guided him through
that's interesting and you know daniel
think about that like
you get kind of in the rat race a go go
go deal deal deal
and you know to step back a little bit
and think about hey you know what if i
did a few less deals trying to do bigger
deals
more money involved
but not have to feel like you're on the
hamster wheel of all time at all times
that uh you know to be able to put that
in place and see the the profits and the
revenue kind of soar by doing a little
bit less i think is appealing to any
investor so
uh that's an incredible story
yeah and that's what i that's the point
of the book like even if you want to
grow a team you should be doing less
than like the less you do the more money
you make
you're
you are going to get to the point i had
someone else on the podcast and they
said something that has stuck with me
very much they said at this point
they're hiring thinkers not doers i'm
hiring people for their brains now not
their hands you know so like when you
first start out you need an admin you
need someone to take these tasks off
your plate but as you start growing
you're going to need to hire people for
their brain if you want to grow big that
people that are smarter than you people
that might intimidate you but people
that will actually get you where you
want to go because what got you here
won't get you there wherever you are but
that same thing if you want to stay
small as an operator then you also need
to see that the less you do the more
you're able to just think or connect the
dots or like have your few team members
work the more money you can actually
make from staying small because now
you're just focused on squeezing the
profitability from everything without
having this huge overhead or without you
know the scaling and growth that
everyone thinks that they want when they
really want is the financial freedom
they got into business for and the time
freedom they got into business for why
sacrifice that now when you think i'm
going to have this big payoff in the
future if you could do some of that
today so yeah it's a it's a big thing
for sure with us
that's amazing man i i i'm i'm i'm
definitely the finance guy but i'm never
like
yay finances right i know that's why
that's why
i love the profit first aspect because
it makes something that's very unsexy a
little bit sexier than you know than it
is because accounting no one like if i
say the word accounting cpa finances
quickbooks like all that just everyone
tunes out but this is where that's why i
got lit on fire with profit first
because it's more this is your cash
you're going to have to deal with your
cash whether you touch your books or not
like you're going to have to deal with
the money that comes in and out of your
business and you're going to really have
to dig into that to make sure you know
where you are so yes finances i get it
are not going to excite a lot of
entrepreneurs but what they return
is the biggest thing that we're all
looking for because the first part is
sales you have to have sales but if you
have sales you have to have that finance
piece so that way you're not just
spinning your wheels because if you just
keep dumping in and dumping in and
dumping in without a net to catch the
money then why are you doing this you
know like why are you on this rat race
if you don't have something to actually
catch it and like someone there on your
team saying this is what profitability
looks like like stop stop doing this
stop doing that like why is this still
what you wanted to do you know then we
have to stay on focus for you know
making sure you're getting to where you
actually want to be as a business owner
that's amazing
so
what what what's the time frame does it
take is it like three months six months
like what is it what does it really take
to get a handle on your numbers like you
do by the quarter well i would say it
depends on where you are in your
business because if you are that person
who's like started the business and
you're three years down the road and
have nothing in place it's going to take
a little bit longer
what we do for people is we do a 60-day
upfront process called laying the
financial foundation it's a 60-day
program of implementing profit first
getting your numbers in order too as
long as they're not just a total raving
mess of years and years and years so
that's usually where we try and say 60
days let's get you to at least square
one i know my numbers i could have a
dashboard built you know of my financial
kpis and my projections i could have a
profit first dashboard as well too
where's my money going where's it's been
and where is it right now and how do i
need to transfer it so that's kind of
the time frame that we try and with a
lot of people that come to us that
needing the help in the implementation
wow
so what is what is and i'm gonna jump
back to business yeah i think i think uh
you've said some some really key
insights i really want to focus on so i
like that you're at the point where like
i don't want to redo business from
scratch
i want to partner with people
so how how important is people
and finding the right people in your
business
there's a great book ceo only does three
things by trey taylor and those three
things are culture people and numbers if
you're in that ceo box you are
responsible for the culture of the
people that are already there and
creating that intentionally you are
responsible for getting the right people
in the right seat because that is
paramount as the ceo and then the
numbers making sure your numbers are on
track and everyone's being held
accountable across the board so i would
say it's pretty dang important to have
the right people there on your team
because that is you you think about it
to enable for you the business owner to
be elevated out of all these seats that
everyone sits in and just scrambling you
have to hire the amazing people that's
why you can't always just have a virtual
assistant i'm a huge proponent of
virtual assistants i love virtual
assistants i still work with one from
like day one of the real estate world so
like for the last eight to ten years
i've been working with the same guy so
no knock on virtual assistants but you
have to elevate yourself to say i need
people who are smarter than me and be
very humble to say
i've got this vision because what draws
them to you even though they're smarter
than you is that you took the risk you
have the vision and you have a culture
of winning and letting them win and
getting them to where they want to be as
long as you're focused on i want to make
sure they're making so much money why
would they ever go anywhere else you
know like and i'm providing this culture
of why would they go anywhere else
because i'm taking care of them and they
know that i care about them too so i
would say having the right people and
then taking care of them are those
one-two punch of like that is how you
really elevate yourself as an
entrepreneur and business owner and
leader
so you said you love va's but
you're saying you need a more
a step up from that when you hit a
certain level right i was going to say
yeah if you want someone who's on your
team that's a that integrator that's
going to be your partner then that's
where kind of that guy was saying i hire
people for their brains not their hands
i feel like with virtual assistants most
of them are going to be the hardest
worker on your team they're going to be
the ones that are there show up do those
things if they're the right person then
they're going to be just working what
can i do i'm going to get it done for
you because that's how my guy is and
that's how a lot of people are that have
virtual assistants but i don't need a
bunch of those people i who what do i
really need i need a bunch of people as
well too that can think and say here's
the problem here's the solution and i
didn't even have to go to david you know
because i know how he thinks and i know
that what's best for the business to be
able to get across this goal line and
i'm going to make those decisions and
help my department do its best so yes i
think at some point you have to think
about that's why i preach profit first
too you have to have money for this
stuff like if you want the best people
you're going to have to have money you
know like you're going to have to pay
them so that's where i'm just saying
that's where i've seen a lot of the most
successful real estate investors flip
the switch from how can i get the
cheapest of everything to how can i get
the most expensive of everything how can
i get the person who is worth two
hundred fifty thousand dollars to be my
ceo and right hand person and pay them
that money because they're going to be
bringing in five six ten times that in
the year because of the systems the
people the processes that they put in
place
[Music]
wow
never heard that one before there you go
that basically comes down that you get
what you pay for right you know exactly
exactly you get what you pay for for the
most part yeah
david can you touch on uh for people who
maybe don't want to take on a 50 50
partner and maybe they're more
interested in hiring employees va's yeah
and uh you know being the the
at the top of the company themselves you
know what does that process look like in
your eyes in terms of you know some
people want to partner and be 50 50.
that's fantastic some people don't um
what what is the line where's that kind
of line in the sand for you in terms of
what you would need to do kind of
working with a partner to build the
culture versus like just being
being the ceo yourself and hiring
everyone below you
so that's what this business is for me i
know i like partnerships but i built the
the simple cfo from the ground up and
i'm 100 owner so i could speak to that
of they have to be very intentional of
at each stage hiring the right people
for the stage when i first started it
was one the one virtual assistant with
me as my admin that i had worked with
for forever because i needed someone
there to help me with the tasks but then
you start hiring other people
if you really know where you're going to
because that's another moving target
when you're first getting started is
what do i want to do what value do i
provide the market once you figure that
out and you can clarify that that's when
you can get very intentional of like
these are the people the key people i
will need on my team this is how i'm
going to take care of them but then it
is it's just being intentional with them
setting the culture having i do weekly
meetings with the whole entire team like
on wednesday tomorrow morning i'm going
to wake up and i'm going to run a
culture meeting of like here's what
here's the wins for the week celebrate
them with the team here's some training
or some things yeah i want to hear from
them too story good stories from them
you know it's like building those into
the culture of the company as you grow
and you know like running on an
operating system that encourages that
building of the culture along the way
too you just have to be very intentional
and you have to build a certain set of
skills so if you're going to do it all
alone and you aren't going to have a
partnership which is totally fine like a
lot of people do they have 100 ownership
then you are going to have to learn how
to be that leader as you grow as you
scale and say okay this time this month
i need to learn on how to how to build a
better culture this month i need to
learn on how to hire the right people
and where am i going to find them so
that's where you as the individual are
going to have to have your personal
growth that's why i love business too i
feel like if i would have started this
there's no way i'd be reading and
reading all these books and like doing
all these things like you know it feels
like if you put yourself in that
position you're going to you're going to
rise to where you want to be so like for
me it was very self-motivating like
especially as you bring more team
members on i have to be i have to grow
in order to
provide them what they need in order for
us to get to the next level so i would
say it's just a lot of personal growth
mentorship masterminds good people like
this podcast it's like getting that
foundation then finding more of your
your culture your your fit your values
and then finding those mentors and
people around you that can help you get
to the next levels
one of the things you mentioned earlier
was um for people's first hire you'd
recommend a admin slash bookkeeper
past that is there kind of a
set of hires you see
and uh people you work with and
you know okay so admin bookkeeper first
what comes after that in the real estate
world let's say you're wholesaling
you're trying to build rental portfolios
you're in lead generation you're
bringing in leads to try to convert uh
what do you what would be the next
couple of logical hires in your mind so
if the owner really loves sales it might
be a transaction coordinator to stop
him from doing the actual getting it
across the goal line if he's like i
don't like if he or she doesn't like the
sales then it's usually an acquisitions
person like how can i stop running
appointments you know like how do i stop
going to this a lot of people keep
dispositions with the owner for a while
you know and selling the properties you
know that's usually a higher that
doesn't get hired out till later on
because usually if you're doing
wholesale deals a lot of them can sell
themselves um because they're so you
know like because there's meat on the
bone if you're a good wholesaler so
that's where i see probably those two
positions either sales in the
acquisitions or transaction coordinator
if the owner really loves going on the
appointments until they want to get out
of that seat
i got a question
okay so are you 100 virtual or you have
an office that you people show up to
my
my company is 100 virtual as fractional
cfos we don't provide full-time people
on people's staff so one cfo could be
working with three or four companies
because we're not you know a typical cfo
easily 150 250 000 you're looking in
that range and most small businesses
small entrepreneurs and even medium size
don't need a full-time cfo on their
staff so we have fractional cfos to help
with the business strategy the
implementations like everything we've
talked about but we're all virtual so
that way we can handle several of those
types of clients across wherever we are
so we've got people on the west coast
east coast everywhere in between your
office is virtual too like all your
people work
okay so i have a reason why i went down
this way because how do you build
culture because i feel it's a lot harder
building culture when you're virtual 100
virtual than versus an office because in
office you can always put the core
values on the wall you know there's
something you can physically look at
like how how do you build culture
virtually with your people the same way
as you do in office intentionally
because even if you have the core values
on the wall who cares well are you
talking about them are you living them
are you are you recognizing people for
that same thing virtually do you talk
about it do you hold people accountable
to those do you talk do you have
meetings where you call out people
specifically of how they embody the core
you know a core value of yours so it's
like that's where i'm very intentional
on our meetings of
being honestly the ceo is the
cheerleader let the operations and let
the other people be the accountability
and the bad guy
let the owner be the cheerleader to say
we're here here's the vision here's the
culture i believe in you guys let's go
you know and like that's what
that's even on virtual teams it's
letting them know that also we've got
slack a lot of virtual teams use slack
or some communication channel like that
so it's like sending messages out to the
entire team you know like here you know
like here's a win we have culture we
have a good news and win channel where
if cfos have a win with their clients
they're putting it in there and all of
everyone gets to celebrate the win for
that person so it's like being
intentional with those types of things
we send people books we send people
gifts you know it's like just
like i said you could do this in office
or you could do this virtually it's just
being intentional and thinking what can
i do with the people that are virtual
and how can i make them feel special
i'm going to do that i need a wind
channel that's good that was a good one
right there
i like that
man i think
the word i've been hearing a lot lately
is intentional it's been like the key
i've been hearing it come up so many
times in different conversations on like
being intentional having a purpose to
what you're doing to make sure you get
the outcome you want yeah
it is key it is the key i think you'd be
for anything i mean you're not going to
just wake up and become rich you're not
going to wake up and your culture is
going to be good either
but you are building a culture whether
you do it or not if you're not building
a culture you are building a culture
you're building a culture where people
know you don't care you know so it's
like that's where you're building one or
the other so that's where you have to be
intentional with these things especially
as the owner the owner it does rise and
fall on you it does i mean and that's a
lot of responsibility but that's where
we put ourselves you know so if it's
like if we're going to do that we have
to be intentional and then think about
like we have like dan you and i have
young kids you know so it's like you got
to be intentional all around like
where's the time for that family where's
the time for the business how do i build
a culture here how do i make sure that
my daughter loves me you know like how
do i make sure that i have time with my
wife on the weekends and at night you
know it's like making sure that we're
building that in as well too so
it's it goes a lot farther than just
business it's like how are you being
intentional with all the different
relationships in your life because like
like a lot of people say when you get i
think of this a lot i know it's cliche
but when you get to the end of your life
what are you really gonna say that i'm
glad i worked those extra hours you know
i'm glad i did those things i'm glad i
you know what not or like that my kid
actually likes me you know so it's like
being intentional with the right things
too and i think that is conveyed in my
messages as well too because like
some a lot of people they can't reach me
after a certain time or you know like
they can't in the mornings like i don't
schedule things in the early morning
because that's when i play with my
daughter you know so my team knows i'm
there for them i will go to bat for them
i have fired clients for them you know
because they've been belligerent so they
know i'm there to for their back but
they also know too that i've got a set
of core values where
i'm not going to sacrifice my morning
time with my girl you know and playing
with her in the morning so it's like
also being intentional in those other
areas too that help the business as well
too of showing like hey
this person is actually like trying to
be you know doing good things in other
areas of his life too so just to go back
to your building culture virtually
setting some of those parameters in
place help the overall culture as well
too because it shows who you really are
and what you're trying to do so
yeah tensionality is a big part of it
okay so i know you're i know you're a
bookworm
what else can you tell i'm not so i know
you are
so what's your top favorite five books
because i'm not i'm not gonna ask one
cause i'm sure you have like five i know
you can you can name a good five you're
so i can name a really good five so
right now because i'm going to say right
now because it always changes and i'm
sure i could think of 10 other ones that
i didn't mention to you one of them
would be obviously be profit first
especially for real estate investing one
of them this ultimate blueprint for a
highly six for an insanely successful
business by keith cunningham
incredible so i would put that on the
top of my list another one up here
expert secrets by russell brunson i'm a
big russell brunson fan um so his expert
secrets book is incredible if you want
to become an expert in your area and
really provide value and drive raving
fans to you
um also let's see because i've got a ton
that i'm going through
let me give you another one that's a
little different um think again by adam
grant i've read that a couple times
that's just that probably unlocked my
mind to a lot of the stuff where i grew
up thinking i had to think a certain way
it's like questioning everything so
that's one where if you want a good one
to stretch your mind of how you think um
that book think again is another good
one i'm reading a bunch of parenting
books too so you know like i i'm reading
all over the place but
emotional intelligence by daniel goldman
that's a really good one as well too
because emotional intelligence goes a
lot with what you were talking about
culture intentionality like being able
to emotionally handle other people's
problems as well as your own is a very
specific set of skills as well too so
that would probably be another one that
i would throw out there as a really
people don't look good the ceo has to be
the counselor the underpaid counselor
right yeah exactly they're the therapist
uh for sure okay bonus here's a bonus
two other books for raising children one
is raising lions by joe newman so if you
have a little
five-year-old girl like me or boy that
just loves to
display their omnipotence at every turn
that's a really good one for the
non-traditional way of like getting
disciplined inside the home and
even working with the school and whatnot
it's a really good book raising lions
then another one is the family board
meeting by jim shields and tells you
about how to spend quality time at least
once a quarter with your kids and with
your significant other and like gives a
framework for that which is super short
book that one's only like 50 or 60 pages
so like even if you're not a bookworm
you could flip through that in an hour
or less maybe and like that's a really
really short book of like giving a
framework for how to spend intentional
time with with the people in your life
that really matter so those are two
bonus books that i've read recently that
are really good
gotcha oh what is a quote that is yours
or somebody else's that you resonate
with
ah profit is a habit not an event
so make profit a habit inside of your
business inside your personal life don't
think it's something that's way out
there at the end of your life or the end
of your year
wow
okay that was good there's been so many
good gems here this has just been uh
this has been really really cool and
i've really enjoyed this conversation
awesome well i try to provide value
that's why i wrote this book like
people need to stop living in the rat
race like there's a way out and there's
a simple way out but like you said
daniel a lot of people don't like that
side of the business but usually the
biggest gold nuggets are those places
you don't want to touch
a lot of people don't want to touch the
finances but that's usually how to get
yourself out of the rat race so yeah i
appreciate you guys having me on i love
i love spreading this message so really
appreciate being here today david is
there anywhere specifically uh people
should go to find your book or is it
just kind of where wherever else you
would normally buy your books so
simplecfosolutions.com
leads you down the rabbit hole of david
richter of like the book the podcast
working with us my facebook linkedin
like it's a one-stop shop if you want to
start following more about here in
profit first for real estate investing
or what we do so
simplecfosolutions.com also my book's
available on amazon so that's where
several thousand real estate investors
have purchased the book already and want
to just get that message out more so
would love to be a part of your real
estate investing journey
awesome awesome so um any final thoughts
final word final drop of
knowledge
if anything if you could take one
message away because i didn't go into
like the specifics of profit first so
pick up the book but besides that open
one new bank account remember how i said
one of the biggest mistakes is everyone
has their you know like the big one big
bank account where everything goes in
and out at least open one other bank
account call it profit and transfer one
percent of all your future income to get
into the habit of being profitable so
just do that if you can do that one step
get into that habit start seeing that
profit build i promise you come back a
year from now as you start growing that
percentage too as you can see that okay
i can do more than this that you will
have way more money than you've ever had
inside your business because you listen
to that one piece of advice
there you go we appreciate your time
thanks for coming on the show thank you
uh david thank you matt for coming on
 
 
 
 
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Matt Rogers

Real Estate Investor

Real Estate Investor, specializing in infill lots, and rural vacant land. Over 150 deals completed since 2018.