The Profit First system was revolutionary when introduced by Mike Michalowicz. In simple terms, Profit First allowed small business owners to take home bigger paychecks, reinvest in their business, and scale with ease, oftentimes while doing even less. The age-old adage of “do more work, make more money” was turned on its head by simple accounting practices. In reality, the business owners who were doing the most work were making the least, while business owners who truly knew their numbers worked less, made more, and had more money to invest.
After reading Profit First, David Richter knew that this same system could be applied to real estate investing. David grew a rental portfolio himself by learning from a local mentor. This mentor had a growing team, a scaling business, but was making less and less with every deal done. As David investigated more real estate investors’ businesses, he found that this wasn’t an isolated case. Most investors were making low wages, working far more than at the jobs they had quit, and had inflated businesses, to say the least.
With some simple accounting practices, which David describes in this episode, real estate investors can turn their business into Profit First powerhouses using very simple steps. If you’ve been feeling burnout from a barrage of deals, but aren’t seeing the profit you’ve worked so hard for, you’ll want to pick up David’s new book, Profit First for Real Estate Investing!
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This is the BiggerPockets Podcast show 608.
If I have money, I don’t have to go after that next deal. I don’t have to say I’m not living deal to deal. So meaning if you jump from the W2 into real estate and you start feeling like I have to have that next deal, you start making decisions out of fear and not from your purpose. You can start saying, ooh, that’s a swim deal, but I think I could still make it work. I know that I can make this happen because I need that next deal.
What’s going on everyone? This is David Greene, your host of the BiggerPockets Real Estate Podcast. If you want to find financial freedom through real estate, you, my friend are in the right place. At BiggerPockets, we are passionate about helping people build wealth, improve their lives and find financial freedom through real estate.
We do that in a number of ways. We’ve got a website with over two million members, a forum where you can ask any question you could possibly think of and someone will answer it or read questions other people have answered, an amazing blog, a host of books at biggerpockets.com/store, where you can go and check out different books on different titles that are meant to help you through your real estate investing.
As well as this podcast, where we interview different real estate investors or different professionals in the real estate industry that bring their expertise, knowledge, and overall good vibes to help you learn how to be a better real estate investor.
Today, we have who is author of Profit First for Real Estate Investing, David is passionate about helping make sure that real estate investors actually make money and don’t spin their wheels doing a lot of stuff, but not turning a profit. I will be joined by my amazing co-host Rob Abasolo today, as we ask insightful thought-provoking and fun questions of our guest. Rob, how are you today?
I’m doing good, man. I am still recovering from last week. We flew out to Scottsdale. We furnished a 6,000 square foot Spanish mansion. We made some TikToks and some reels got some good content out there and I’m still catching up on sleep if I’m being honest.
Yeah, you work very hard. You brought your whole team out there. I got to meet all of them. And then we met with a designer. I mean, it was a fun time. We ate some pizza. We stayed up for about four hours longer than we should have listening to you and your crew’s opinion on movies.
Side note to everybody listening, they are very serious about their cinematography and their filmology with very deep insight. All of them. I mean, even the ones that I wouldn’t think have anything to do with making movies were super knowledgeable about that. Rob, are you surprised? Do you feel like I kept up with you guys or was it clearly this is the fat guy at the gym that can’t keep up with our workout?
No, I definitely thought that you liked… I think there’s a clear love for cinema there though, but I think my real only disappointment that I’ve had since meeting you is that you haven’t watched Interstellar yet.
I know where you’re going here. Interstellar, yeah.
You haven’t watched Interstellar, which is the greatest movie ever, but we’re going to get to you.
Yeah, when I said I hadn’t seen it, it kind of… I think you took it like I said I don’t like your kid. That was how serious it ended up getting.
I tried to name my first child Stella, short for Interstellar and my wife, she saw… She would’ve liked the name, but the moment she was like oh, I know what you’re doing. She’s like, that’s not happening. So we had to settle on Aila. It’s kind of close.
There’s certain things that everybody has. You love the movie Interstellar. Brandon, there’s a book called Life on Air that he just talks about to everybody. And if I ever said I didn’t like that book, he just couldn’t handle being my friend anymore. It would really burn him. But this is a fantastic property. It’s probably the nicest property I’ve ever seen.
Not just that I’ve bought, that I’ve ever seen in my career. If you want to invest with us, check out investwithdavidgreene.com. You can learn how you can do that. And if you want to book it, you can message us as well, because this would be a really fun place. We plan on having some masterminds out there where we’re going to teach other investors how they can invest in luxury real estate or how to run short-term rentals in general.
And it’s freaking huge. I mean, it’ll sleep 20 people pretty comfortably. You could probably sneak some more in there if you wanted. It’s on five acres, it’s got a sport cork that we were kind of playing around ideas with what we’re going to do to get the most out of that. And then we recorded a lot of footage. So also keep an eye on our YouTube channels to see how that goes. What was your favorite part of that property, Rob?
I think it’s just a very… You feel so… It’s just a special property. There’s so much to the landscaping that you have the whole view of all the mountains behind you. At that time, there was a full moon. So at night we were all just hanging out on the roof, watching that. And it’s just the architecture’s very special.
We had to do a lot of work to the actual interior design of the property, but the actual design of the home itself, I really haven’t been in a house that ever. So we’ll definitely be learning a lot as we go and obviously implementing the profit first strategy I hope.
We hope, right? I mean, I was literally thinking of this house several times as we went there, because this is when we’re going to have to watch very closely because of this size has more than just your mortgage to be considering. You’ve got extensive utilities, landscaping bills, all the little knickknacks, the electronics that are going to be throughout the house.
This is one where our expenses can get out of hand if we don’t watch it really closely and you have to make sure that it’s staying booked. So yeah, way to tie it all together there.
Yeah, a little segue as they call it in the industry
Segue. So speaking of segues, what were your favorite parts of today’s episode?
Yeah, so we talk to David Richter today and he’s the author, as you mentioned of Profit First for Real Estate Investing. He just talks about a lot of good things when it comes to investing in real estate just like his book says such as cashflow management.
Sometimes if you don’t have a good grasp on how much money is coming in and out of your business when you’re starting out, you’re going to be so lost once you actually grow to a one, two, three, four, $5 million business. So it kind of gave us a few strategies the golden trio, watch out for that, that kind of helps you sort of delegate your funds in a way that pays you and keeps you motivated and helps you make building wealth a habit from the get go.
That’s a great point. Yeah, and make sure you stay all the way to the end because we talk about what questions you could ask your specific bookkeeper when it comes to how to find the right one, what they should be looking for as well as what fundamentals you should be putting in place to make sure that you are building the right habits when you are starting so that you have them there like Rob said, near the end.
Today’s quick tip. Before we get into the show, tickets are on sale now for BP Con. Go to biggerpockets.com/events and pick some up. This is a great time. It is action packed. I’ve literally never seen a sad face at BiggerPockets Con ever. I mean, it’s like everyone is having a really good time all the time.
If you’re sort of introverted and you’re nervous about being around new people, there’s something about BiggerPockets community where it’s just very welcoming. There’s hardly any butt heads running around at, at BiggerPockets, right? It’s just one of those things that draws in cool people that are really friendly and engaging and want to talk about stuff.
And then if you like people, of course, you’re going to love this. So it’s not just about what you learn. It’s about who you meet and it’s about the way you’re going to feel. So get some of those tickets and check out Rob and I. We will definitely be there hanging out and you might even get to see some of his amazing dance moves in person
Hey, no promises, but I am excited to see all the David t-shirts, all the David Greene t-shirts that are going to be there.
All right, without any further ado, let’s get into today’s show with David Richter. David Richter, welcome to the Bigger Pockets Podcast.
Thank you for having me. It’s an honor to be here.
So I hear you wrote a book that is pretty popular, people like it. And you’ve got a little bit of experience with real estate yourself. So why don’t we start with we’ll ask you about the book and then we’ll find out a little more about your experience in real estate? Tell me about this book and why you wrote it.
Oh man, they’re kind of intertwined there between why I wrote it and my real estate journey. So I have been a real estate investor since 2012. That’s when I first started real estate investing. Read Rich Dad Poor Dad and rest is history like a lot of real estate investors.
But I wrote this book mainly because during my real estate journey, I worked with several different investing companies where we were doing five, 10 deals a month. We scaled it up 25, 30 deals a month. And I sat in a lot of different seats in that specific company, and one of them was the finance seat. I sat in acquisitions, dispositions, property management, project management.
But the last seat I sat in was finance, and that’s where I saw it click. I saw where the money actually flows from the beginning to the end and that it tells a story. It told the story of the business and it sounds pretty cool to be doing 25, 30 deals a month, but it’s not cool to be losing money every month.
So that’s where I was like, you go to all these events, you are able to go to a mastermind or a meetup group or a RIA, or something like that and say, you’re doing these deals. But for me that was very eye opening to see that we weren’t even making a lot of money at the end of the day. So that was one of the things that sparked it.
And then another one was I started working with another investor and this investor had a small rental portfolio, was doing some flips, but just had no idea where his money was going. Had no idea where his money was, if it was tied up in properties, if he just had a crazy amount of expenses and I’m like, I bet you there’s a lot of investors this who love doing deals, but who don’t the money side, the finance side because it’s boring education that we get.
If we get education, it’s like stock talking. It’s like a totally different language or it’s very logical or very similar that. And that’s where I said, I think I could help the real estate investing community with the financial side, help them actually move forward here. So that’s where I started reading Profit First because a mentor told me you should read the book Profit First.
That’s what kind of got it kicked off for me. And I said, bam, this system is built for the entrepreneur, for the real estate investor, and not just for these accountants, bookkeepers. It spoke clear, simple language. And I said, I know that I could take this for the real estate investing community since I’ve been in it the last eight, 10 years, done crazy amount of deals and show the world, the real estate world that it’s possible for you to do this as well too.
So that’s where I went to Mike Michalowicz who wrote the original Profit First and said, “Hey, I’d love to write this book for the real estate investing world because we need it.” We need this system so people aren’t living in the real estate rat race. So that’s where I went to him and the rest is history.
He said, “Yes, green light let’s do it.” And then was able to publish that book over to the next long 18 months and get it out the door. But that was kind of why I wrote the book and kind of ties in a little bit with my real estate story.
So you mentioned that there are real estate investors you’ve seen that are doing a lot of deals, but they’re not making money. Do you mind giving some examples? Obviously, don’t share the names of the people, but what you saw with how their business looked and how their profit looked that caused you to realize this was something the industry needed to hear.
Oh man, this is good stuff. So with the people I worked with specifically at the start of my career, that’s where it really was the eye opener for me. We were doing 25, 30 deals a month having six figures, seven figure months sometimes with all the deals coming in. And that much or more was going out, six or seven figure months.
And it’s like, that was the big eye opener. Then I’d start going to these events where people would say hey, we’re doing all these deals. But then at the dinner table, they’re like I’m bleeding money. Then once I started my business, I’ve had over 230 calls with investors from people doing one deal a year to people doing 200, 300 deals a year.
And I’ve literally been on phone calls where there’s investors doing two, $3 million a year and they can’t pay themselves what they need. They’re paying themselves $30,000 a year in random draws. And they’re almost to the point of tears on the phone call where they’re like, I’m making this in my business two to three million, but I have no idea where it’s going.
And it’s just so stressful all the time. So I’ve seen those examples. Other people they’re like, I don’t even have a bookkeeper or a system or anything. I had a call just recently, two weeks ago with a guy who’s doing two million, same thing. So that’s where I’m like, if you’re starting out, please don’t let it get to where you’re making two or $3 million and you have nothing.
And if you are there, there is hope. There’s a system that can help you get out of that. But I could story after story without naming the names of people that are in that position.
Well, are you describing someone who’s not keeping books well, so they don’t know what they’re making or are you describing someone who’s not managing profit margins so well so they’re not making money?
I think it’s both. So I have certain people where they have no idea what’s going on and they want to know. Some people, they have no idea what’s going on and they don’t want to know because they already know what’s bad. So you’ve almost got that investor who’s like I don’t want to look at this. I don’t want to focus on it at all.
Kind of put their head in the sand and just say, get it away from me. And then there’s other people who don’t look at those profit margins, who might have someone in place who are doing… Who think they’re doing well. But if they ever took a deep dive, they would see that their margins are slim or wholesale versus fix and flip.
They don’t know are my margins better on my wholesale deals or my fix and flips? Because fix and flips, I can make more, but it usually takes more time and more investment and private money. And it’s like, have you ever sat down and done that? So yeah, we’ve had multiple people where just looking at that to say, what’s more profitable to me, wholesaling versus fix and flipping where people didn’t know?
And then it’s like, fix and flip is not doing too well for me. Or even some people, it was the other side. It was wholesale wasn’t doing well for them. So they wanted to shut down one of those sides because they were like, we need to pour into what we’re good at, because that’s going to light the fire and get us true profitability here.
So yeah, it’s both. People who don’t even want to look and then people who do look or have someone on the team, but aren’t managing it at all from any perspective.
So has, this your methodology and your philosophy here, has it really shifted how you invest in terms of what types of properties you’re acquiring or has it really just impacted more so the cash management of your business?
It’s more the cash management at first, but once you start seeing and managing the cash, the profit margins, which it’s what it helps do as well, we’ve had people literally stop one of their exit strategies or stop one of their revenue sources because it wasn’t profitable or they were losing money.
So that’s where I believe it’s both. It starts as a way to manage the cash as it flows through, but then it helps you decide because it’s also, I feel very personal. What does the investor like to do? What are they good at? Or what is the team that they’ve built good at and what could they replicate and duplicate?
Because I think everyone in business wants sustainability. They want to be a sustainable business owner. And I hear in real estate all the time the buzzword consistent. They want consistent leads. They want consistent money coming into the bank account.
And this is where having a system like this helps you realize, where am I losing money? Where am I making money? And how do I keep more of it? So that’s where. And then it goes into, you can go deeper, what’s actually making me profit and what’s not?
So I guess what would you imagine or kind of what would you say is the first big mistake that newbie investors who are really starting to scale up? Because I imagine that the hard part is scaling up, right? If you do one deal, you can keep track of your contractor, your vendors, everything like that.
But if you move up to five deals at once, it seems like you’re really starting to spread yourself thin in terms of bank accounts and credit cards and invoices and everything like that.
So the whole point of the profit first system is to make profit a habit, not an event. So I don’t care if people are looking to do their first deal or have done a thousand deals. The point is to create a wealth habit inside of their personal systems or their business systems. You could use this for the personal side even if you haven’t jumped into real estate yet.
You could still set this up to start getting into the habit of being profitable. So that’s where I feel like at the beginning it’s more about making sure that you’re creating a good habit, which you said, what’s the biggest mistake? One of the biggest mistakes I see is when someone first starts a business, they have one bank account.
They have that one business bank account where all money goes in, all money comes out and they’re tossing a cash salad just all the time. They have no idea what money’s coming in, what money’s going out, because if they go from that one deal to five deals and they’re managing different properties or whatnot, it’s okay, what money came in here?
And where did it go out to? And I don’t remember the subscription, or I don’t remember paying for this marketing or whatever it might be. So I see people with that one big bank account and it gets very confusing, especially as you scale and grow, if you just have that one big account where all money gets mixed up.
Especially down the road if you start taking other people’s money like private money or hard money, or institutional financing or whatnot, you put it in with the rest of your money, it gets very easy to get very cocky to say, I’ve got a bunch of money in my account. I could go out and spend it because you don’t know what’s yours versus what’s theirs.
So having that one bank account, I would say is one of the biggest mistakes people make upfront because all of us want control. All of us want control in our lives and especially control of our money and our finances. So having that one account is that lack of control, that lack of control for knowing where that money is.
So I’d say that’s one of the biggest mistakes upfront that people make when they first start. I do want to say too, what you said about scaling. I love Keith Cunningham and his books, The Road Less Stupid and other things. And he says, if you try and scale cancer, the tumor grows. So we don’t want to get into bad habits that will scale with our business.
We want to create as many good habits upfront while we’re still smaller, while we’re still getting into it. So that way we’re not the two to $3 million business that comes to me and says where the heck is all my money going and I’ve got deals and things and money going all over the place? So there you go, the one big bank account.
Yeah, okay. So actually, I want to get into the bank accounts here in a second.
Yeah, for sure.
But I’m not really sure that we’ve really covered. I mean, I understand from a conceptual level the profit first mentality, you’re saying it’s a habit of building wealth, but for the people that haven’t, that aren’t familiar with Profit First or your book, Profit First for Real Estate Investors, or real estate investing, can you just walk us through tactically what is the profit first methodology? And then I want to start kind of unpacking the tactics behind executing it.
So the first, there’s two main parts. There’s the mindset and then the practical steps. So I’ll go over the mindset. First. It’s real simple. We’re fed that bad formula that creates a bad habit in our life first. We’re fed from a lot at different places, other investors who are down the road that have these bad habits or accountants bookkeepers who have no business being the entrepreneur or whatnot.
They tell us a formula because we’re real estate investors, right? We love our formulas. So they say sales minus expenses equals profit. Meaning I make a sale, I pay everyone else and their mother. And then what I have left over is the profit. Hopefully at the end of the day or the end of the year, or maybe when I sell all the properties in the future or my business in the future, I’ll have a profit.
And so we’re always thinking that profit’s at someday off in the future event. The profit first formula and mindset is it’s sales minus profit equal as expenses. Meaning I make a sale, I take my profit first off the table, make sure I’m being paid and that business is healthy. And then what I have left over is the expenses for the business to grow the business and to make sure that everything’s getting paid.
That’s the mindset. The problem with that though is even with the profit first mindset is I believe we’ve heard that from so many different places, from podcasts, from books like Rich Dad Poor Dad, where he says pay yourself first. How many times throughout all of Robert Kiyosaki’s books does he say, pay yourself first and gives 100 examples of that?
And the richest man in Babylon, a portion of all I have is mine to keep. We’ve heard that philosophy before. Profit first did not come up with that mindset. That is what we’ve been taught and fed, especially if you’re a book reader. So that’s where we get that.
That’s why I like profit first as well too, because it’s got the practical side of how do I make profit a habit inside of my business or inside of my life? How do I do that? And it gives the practical steps inside the system, which I can go through that now.
If you want to get into that, that’s a little bit longer portion of what to set up like the accounts or whatnot. So Rob, just let me know if you want me to keep going into the tactical portion of how to set up the system.
Yeah, for sure. I do want to get into that. This is really interesting though, because really for me in my network, a lot of our mindset has always been don’t pay ourselves. We always just continually reinvest it into the business.
And to this day, I guess borrowing a few little things, I wouldn’t really say that I’ve ever really taken a dime out of my real estate earnings. So why do you feel that that… I mean, kind of what’s the dissonance there between the profit first mindset and that? Is it because if you are able to have profit first it keeps you paid and motivated or is it a deeper philosophy than that?
Several things here. You just opened the can of worms. So here we go. So profit first like I said, is all about building that habit because when you’re small, it’s easier to start the habit, when you just get started in real estate, you just get started with your business or whatnot, to build those habits.
That’s what we’re trying to do, because if you’re starting to do five deals a year, then 10 deals and 20 deals and 30, 40, 50, you want to have a good habit in place. So that way you are paying yourself and you are making sure the business is profitable. Because if I had a dime for every time someone said I want to just reinvest everything back into my business, I’d probably have about $150.
Nothing to make me rich, but I’ve heard it a lot. That’s where I hear it all the time that people want to reinvest. I have nothing against reinvesting into the business. What I am against is that owners not getting into the habit of paying themselves. And especially from the beginning, making sure that they are… Even if it’s small.
Let’s say you have a W2 job and it’s providing a bulk of your income while you passively invest in real estate, or you start building a real estate portfolio. Well, if you’re doing that and you want to quit your W2 job and go full time in real estate, it will be way easier if you’ve started the habit from every deal, maybe one, two, 3% goes into a profit bucket, profit account.
And you’re getting into that habit. And I could go on and on because there’s so many people we’ve held where we’ve seen that I dedicate a whole chapter of this in the real estate investing book it’s called reserve help your company grow because I knew so many people would ask this question. Because what do reserves really help you as an owner do?
They help you get more private money. Because if they see that you are fiscally responsible and that you actually can keep cash on hand, then they’re willing to lend more to you, whether that’s institutional or private money or whatnot if you’re showing them what you’re doing. It also is a great psychological impact of if I have money, I don’t have to go after that next deal.
I don’t have to say I’m not living deal to deal. So meaning if you jump from the W2 into real estate and you start feeling like I have to have that next deal, you start making decisions out of fear and not from your purpose. You start saying, ooh, that’s a slim deal, but I think I could still make it work. I know that I can make this happen because I need that next deal.
So reserves help you stay away from that mindset. They also help you in the ups and downs of real estate to capitalize during the down times and not even in the market. Let’s just say you break your ankle or you break your… You’re out of commission and can’t go on appointments. Or you get hit by a car, and you’re in the hospital for two months and can’t pick up the phone.
If you knew that you had several months worth of reserves in place to be able to handle even the horrible situations, it gives you that peace of mind. That’s a huge other thing as well too. So it’s getting into that habit even when you don’t need it.
If you do have the W2 job while you’re building the portfolio and you’re like I don’t need to, so I’m just going to reinvest. You’re trying to get into those good habits. If your end goal is to get out of the W2 cycle and to jump into real estate, you’ll be building those habits along the way.
Excellent, got it. That makes a lot of sense to me.
David I’m curious, the information that you gather. Well, let me take a step back. I’ve noticed with myself, oftentimes when I write a book or when I talk about something, it’s because I went and did it and I was very frustrated with how hard it was to do and saw all the mistakes I made.
And then there’s a part of you that’s like, I don’t want other people to have to do that. So that’s what motivates you to write a book or host a podcast or make content on social media, unless you’re just doing it to try to make money, which there’s plenty of people doing that too.
But I want to ask you, what was your own investing experience like? How did you get started? What type of assets were you buying that caused you to learn some of these lessons that you’re sharing with us now?
So my first deal after I read Rich Dad Poor Dad, I’m an action taker. So I’m like I’ve got to find a property. So this was 2012 where deals were everywhere. I went to a real estate agent, and they found me a HUD deal off the MLS. So this is when I was 20 years old, bought that first deal, fixed it up and that was where I did several things with that property.
I rented it out for a few months, got some passive income, lived in the property then for about two years, then leased optioned the property after that. So I had a lease option property where had super tenant who paid early on time for six months and then cashed me out with his option agreement, his option to buy the property.
So I really like options, and a lease options so that I built a small portfolio of lease option properties. I also did some wholesale fix it flip on this side while I was working with that company, that real estate investing company. That was huge too.
I want to say that was a huge part of my journey was when I first read Rich Dad Poor Dad, I said, who is where I want to be? And I want to find them. So I found the circles I was in. It was actually a guy in my church. A guy in my church where he was in real estate investing and I asked a bunch of people, who’s a real estate investor in here?
Pointed me to that person. And then I said, “Could I meet with you?” So I met with him and then he said, I’d love to teach you and train you. And so what I said was, I’ve got a full-time job now, can I come nights weekends and learn and help you and maybe do something for you? So for the next eight months that’s what I did for free with no pay.
Was like I was learning the business and helping him on night’s weekends. And then that’s when I left that job completely, was eight months later was when I had started doing some of my own deals. And he offered me to come on board as a part of the leadership team of that company. So that’s where I got started doing more and more deals, and I saw that company go from five deals to 25 deals a month.
But that’s also too where I sat in all those different seats in the company. So I got to see a small business, the evolution from small business to a larger real estate investing company. That’s where when I sat in the finance seat, it unlocked several doors for me, because up to that point, I had my own properties and it was easier to manage when you, like you said, when you just had a few that you were managing yourself.
But then on a bigger scale, managing 100 doors, was one of the responsibilities I had was managing 100 of our own units in-house and then also running the finance department and being the CFO of that department. And that was when I saw that this person, this man who had lost everything in 2008 and nine, it looked like once I knew the numbers was going to lose everything again if something didn’t change.
We’re losing too much every month and my heart bled for him because he took a chance on me at the beginning, he showed me the ropes. He let me buy a couple of other properties from the company and use some of the contractors there sometimes later on down the road. So this was a guy who I was very much appreciative of.
I’ve had lots of good people in my life, my whole life. So I’ve been very blessed. I’ve been blessed with good parents and good mentors and teachers. He was one of them. So that’s where when I saw we’re bleeding money, it was like we’ve got to put something in place here. And that’s where I went to.
Let me ask you this, what kind of deals were they? Are these single family homes?
Okay, single family homes. So we were doing single family and we were doing all types of properties like wholesale, hotel, retail, police options, rentals, turnkey, subject-
So was this company finding off market opportunities and then putting them in contract and then just kind of figuring how to disposition each individual asset?
Exactly. So we had a lot of different exit strategies. At the beginning, it was strictly wholesale, off market deals. Then as we grew the company, we grew our exit strategies as well too.
And I’m guessing what happened is with all of these different strategies, it reminds me of a restaurant that I used to work at where our menu was huge. We had 11 different kinds of fish alone. And I feel like what would happen is at the end of the week, we’d throw away a lot of fish because you couldn’t sell that much of it.
And you’d have all of these different menu items. And so the kitchen was huge and it was really hard for the chefs to learn how to cook it all. And then I went to work at a different place. It was a steakhouse. We had seven kinds of steak, one fish of the day, a handful of salads. So the inventory didn’t spoil and you didn’t need as many people to cook it.
And I’m kind of getting that vibe from this company because they had a Jack of all trade approach. Did they then have to hire too many employees to manage all of those different dispositions which is where all of their profit kind of ended up getting sunk?
That is exactly what ended up happen. So when I was able to dive into the numbers, we went from five deals a month to 25 deals a month, but we went from five employees to 25 employees.
… Doing all of that. And that’s where it’s like, ah I want to make sure we want to help.
You actually looked at the profit and you realized we’re not, even though we’re doing all these deals, we’re not making any money. The only people making money are the employees that were paying, but the company’s not making money. And they didn’t see that because they didn’t track the actual money from when it came into what was left at the end.
Exactly. It wasn’t something that was brought up on a regular basis. And then it was like, when it was too late, it was too late.
You know what? I’ve had that happen to my companies a handful of times. And every time is when my bookkeeper fell behind or right now, I’m switching from one bookkeeper to another. And so it’s this three month process for the new person to get it all figured out and I don’t know how much money’s being made. And it’s you’re flying blind.
You don’t have your instrument panel. You can’t see what’s happening. I get this anxiety now because I’m realizing how important this is, but I never got it before. Because you just see, oh we’re selling a lot of houses or we’re doing a lot of stuff. We must be making money.
Right? As long as the money keeps coming in we’re okay. That’s the mantra of the entrepreneur is just it’ll be okay. So I totally get where you’re coming from because I hear that all the time as well too. Just the anxiety of not knowing because clarity breeds confidence. It does. Where your stuff is going.
That’s why profit first is the first step because it gets the cash. You don’t have to know the bookkeeping numbers or the QuickBooks numbers or whatnot if you at least know where your money’s go, the cash. Because that’s what I say to a lot of people is a lot of investors when they first get started or even some people at the million dollar mark have that shoebox full of receipts.
It’s like that typical picture of them just handing into their CPA and saying here, do this and take it. They’re going to do that no matter what. They’re still going to do deals though. But if they had a handle on where their cash is going, they’re still going to have to manage the cash during that time.
Where it’s going and where they’re spending it, what they’re spending on marketing and where it’s all going. So that’s why I like that as a first point.
This is a really big problem for the smaller entrepreneur because they’re doing everything. Rob, this is kind of how I see you a year ago, two years ago where you were responsible for sourcing the deal, analyzing the deal, executing the deal. And then you go to the property and you’re trying to figure out how’s it going to be decorated?
How’s it going to be rehabbed? How are we going to fix it up? Then you’re responsible for getting the listings up, getting the pictures taken. Then you’re responsible for checking to make sure that it was even booked and that’s just one deal, one house. And then you do this with several houses and it gets to be… One of the things I’ve noticed is human beings we’re emotional creatures and we tend to make decisions based on emotions.
So if you’re seeing I did a great job getting the listing pictures taken, it’s I’m seeing a lot of bookings that are popping up. I did a great job with whatever. My emotions feel really good and so I think I’m doing a good job and you never get outside of those emotions and look at the number on the spreadsheet that tells you, did I make money or did I lose money, right?
So you can just be going along fat, dumb and happy thinking everything’s fine because you don’t think you should even be checking it. And I notice this happens especially when somebody is very, very busy, when they’re doing it all on their own. Public service announcement.
When you think that you’re saving money because you’re doing everything on your own, you might not be, because you’re not looking at running the business. And when you think that you have delegated all your work away and you think you won that way, you might not be because the employees might be the ones taking up all of the money, right?
You have to make sure everyone’s productive. Do you have any advice, Rob, on your own story with how you can kind of relate to what some of what David’s saying here?
Oh yeah, man. I mean, I think I’m kind of on the end of not staffing up just because I now have about nine… So before about three months ago it was just my business partner and my assistant and very easy to keep track of profits and everything like that.
Now I have about nine employees and they’re all part-time and they all do different things, but payroll hurts. It’s kind of one of those things where before I could rest on my laurels a bit, many, many months ago, but when you’re running a payroll for nine people that can be 20 to $60,000 sometimes.
And for me now I have to really dive in and I will get into the bank account stuff now, but now that I have so many different streams of income, I’ve got probably eight or nine at this point, I’ve got a bunch of different businesses. I’ve got different employees.
I’m now at the point where I’ve sort of recognized that if I don’t spot that iceberg in front of the Titanic, things are going to be pretty bad in a couple of months. So I’ve been very diligent about working with my bookkeeper, opening up different bank accounts and really just trying to get ahead of it.
I haven’t really fully figured it out because I think that’s always part of the growing pains of running a business, but it’s one of those things for the last year up until recently, one month you’re like, oh my gosh, I’m making a lot of money.
And then the next month you’re like, what? Did I actually make… I don’t think I actually made any money last month. Oh wait, this month I actually did make money. And it’s just kind of not really having systems or disciplines in place for me was really something that was tough to fix. It’s a lot tougher to fix all of the bad habits now today that I started years ago. But it takes times, it takes several months to really get into the nuts and bolts of it.
I’d also say what you said there about emotions, David, was so great, because especially when you’re starting out and you’re doing all the things, wearing the hats, then you look at your bank account, that one bank account and say, hmm, do I have money to do this?
And you’re making that emotional decision on what’s in the bank account today? And can I spend my money on this, on this marketing or whatever, or hiring this person? And it’s like you’re not giving yourself enough chance to know, can I really spend this? Is this really what will be the best for my business?
Because like you said, it’s just one other thing on the laundry list of things that you have to do. So of course, I don’t want to dive down that rabbit hole of being a bookkeeper or being the finance person at all. We’re the deal makers. We’re the ones that going out there and hunting for the deal. The last thing we want to do is be the bookkeeper or the accountant or numbers person.
That is the farthest thing. We’d rather shoot ourself in the foot than do that. It’s like, please just get that away from me. So it’s very emotional when we see the money in the account and say, I just want to spend it. Let’s do it, let’s roll with it. As long as money keeps coming in, we’re okay. So I like that point you touched on there with the emotional side.
Well, I’ll give you a testimonial. What happened with me not too long ago, it was kind of late last year was the bookkeeper fell way behind. We ended up having… I had to replace that bookkeeper and get a new one, which is why I’m back to flying blind again.
And while they were behind, I wasn’t seeing the profit that was coming in, but I could still see that the number of houses we sold had dipped a little bit, but not that much. When the numbers came in, I was shocked at how bad the profit was. And so what it led to was me sort of investigating. I have to now dive in.
I had this analogy, it’s kind of like there’s loggers that are upstream that are putting trees they cut down in the river and they make their way down. And whatever logs hit the end of the river is what you can go sell. Well, logs weren’t making it to me or the ones that were, were very small and they weren’t worth much money.
So as I dug in, my eyes were open to a lot of different things. The first was that the people who were selling houses for me at the highest profit margin for me, their production had dropped tremendously. The houses that were selling were self generated from the agents on the team where they had a more favorable split.
So the type of deals I was doing were less profitable. And then I saw that my labor costs had skyrocketed because I had put other people in charge of hiring and they had hired a lot of humans, but nobody was managing those people. So when I dug in to see, what are these four employees or five employees doing?
They were sitting in the office all day doing nothing while their leader was doing all the work of everybody. So what happened is because that person didn’t want to train and delegate, they were burned out and they were ready to quit. I had five people on payroll that were bored and were doing nothing, right?
So obviously I had to go in there and put people on performance reviews and by then they were like, well, we’re used to doing nothing. You’re making me work for money. I don’t like that. So we ended up parting ways with those people. And we had to talk to the leader and restructure everything, which was good for the business.
I got logs coming down the river again, but what started the whole thing was looking at the numbers, looking at the profit and then kind of going into detective mode to figure out why is this here? And if I wasn’t doing that, I would still be in that position right now that I was late last year.
Yeah, that is what it uncovers. Those numbers uncover those areas in the business. It’s like, measure results, measure the outcomes and then fix what is actually happening in the business. So I totally get where you’re coming from. It triggers that.
So what’s your advice for the person who is sort of business is just starting to pick up for them. They’re a real estate agent. They’re selling more homes, they’re a flipper, they’re getting some deals in their contract.
They’re making some progress or maybe they got into short term rentals. They’re like man, my place is booking all the time. I’m at 80% occupancy, but they don’t really know what money they’re making or not. Where do they start?
So here we go. Here’s the tactical side of profit first, which this is really, even if you haven’t done, if you’re listening and haven’t done your first deal but are thinking about it, we’re going to help you create the habit.
And if you are doing the deals right now or if you are down the road and you’ve done a thousand deals, this will help you keep more of the money in your pocket right now and know where the money’s going. So what the tactical steps of profit first is what… If you’ve heard of the envelope system, Dave Ramsey’s made that popular or other people or your grandma might have done it, or you might do it with your personal finances of putting cash in different envelopes.
Well, we want to modernize that envelope system for the business. So that way we know where our money’s going, because a whole lot of people, when you first get started or even down the road, probably look at their bank balances more than they look at their QuickBook software or their finance stuff. So they’re looking at their bank accounts a whole lot more.
So we want to leverage what people are already in the habit of doing, and we want to create a good habit. So that’s where when I said that first big mistake that people make is that one big bank account where they just have all the money flowing into, we need to split up those accounts so we know what money is actually ours versus what we can spend on the business.
So that’s where I would say the golden trio of bank accounts, because I’m a come on, I’m a pretty typical human being. If you were able to see me in person, you would get why I the finances numbers and big movie epic sagas like Star Wars, Harry Potter got the glasses here.
But that’s where I love those big movie epic sagas, where they have the three main heroes like [inaudible 00:42:16] always pushing the story forward for good, making sure good wins in the end. Well, as you create your business, that’s your epic saga.
That is your big movie that you’re going to create and either pass on to the next generation or to your employees or to the other people or sell one day, all your properties or sell or pass those properties on. That’s where you need three main heroes in your business, this golden trio. So what is that golden trio of bank accounts?
Number one, a profit bank account. Number two, an owner’s compensation bank account. And number three, the owner’s tax account. And I always get, what are the difference between those accounts? Profit is for the reward of starting your business, trading in the 40 hours working for someone else, working 80 hours for yourself and kind of what you had mentioned, Rob, that feeling of, hey, at least I’m making profit.
At least if I’m going to put in all this work, there’s money there for me to spend. That’s that profit. It’s for you to take out on a quarterly basis up to 50% of what’s in that bank account and spend it on whatever you want, unless you have bad debt like debt that’s keeping you up at night. Use that account to start wiping out bad debt.
So that’s the first one, the profit account. The number two, owner’s comp. Owner’s comp is kind of a big one here. This is kind of the linchpin bank account because the owner’s comp is if you are in a W2 job right now and you want to get into real estate, it’s how fast and how consistent can I start filling up my owner’s compensation bank account to get out of my rat race? Either my W2 rat race or if I’ve jumped into real estate.
What is that number that I need consistently to pay myself to make sure all my expenses are covered personally. So that owner’s compensation is for me to take on a weekly, biweekly or monthly basis for the work I do in the business. That’s why it’s different than profit. Profit’s the reward, owner’s compensation is to get you out of your rat race.
Then the owner’s tax account is to make sure as you make… Especially if you’re in the active real estate world, the end goal is to sell the property and not to hold it, you are going to need to hold onto some money to pay the tax man at the end of the year. So that’s what that account is for. And I call it the golden trio because all those are to make sure the owner is healthy.
Because if the owner is healthy, you can make good decisions, which puts more money in your pocket, which you can buy the properties you want and you can also go out there and find the good people on your team if you want to grow and scale. And you’re going to have profitability while you do that. So those are some main ways, the three main accounts that I to set up at the very beginning.
And I always tell people if you’re like three bank accounts or four or five or however many, that sounds too much. The whole point, like I said, is to make profit a habit. So if you go away from this podcast and just do this one thing, I promise it will make you more money this next year or help you keep more money. Set up one account.
If you aren’t in real estate yet, set it up at your personal bank. If you are in real estate, set it up with a business account, call it profit and transfer 1% of all income that you get. Just get into the habit. Everyone can start at 1% and everyone can start with one bank account. So if you’re on the personal side and you’re like, I want to start this habit.
Once I jump into real estate, I’ll already have that. I’ll take a portion of all my W2 income and put it in this account when I first start. And maybe that could be your… Maybe that profit account becomes where you could buy your first property from that account. Or if you’re already down the road and you want to see if this system works, start that.
I’ve literally had a person where I was on I think it was a podcast with him two years ago when I was on there with him and set to do this. He set up that one account and then he called me a year later and said, I totally forgot about that account. My wife set it up for me. And we have over five figures in there right now and I completely forgot about it.
So I would love that story to be yours as well too, that you forget about that account and you’re just building that wealth automatically, but it’s just about building that habit. So I want you to be able to build it too. So there you go. There’s a simple action step for anyone no matter what level they are to start seeing the system work for them.
Okay. So let me clarify a little bit because the golden triangle or the golden trio makes sense to me. You got your profit, your owner’s compensation, owner’s tax. Is there not a fourth bank account for expenses?
That one you already have. You already have the bad guy in your business. That’s that one bank account where everything’s going in and out of. That’s what we call the OPEX account where that one pays for the actual expenses of the business. You already have that one set up inside of your real estate company, or even in your personal finances.
That’s where everything flows out from. And there’s more bank accounts too. I just don’t want to overwhelm people. I just want people to get the one. If they can just do the one, the one account or the golden trio, that’s a great place to start.
The operational expenses of the OPEX account like we call it in the profit first system is already there and you already have the villain that’s already eating all the expenses and all the cash.
So do you kind of… When you’re talking about these three different, the tax, the competition, the profit, does some of that kind of takes a lot of working through with your bookkeeper to explain the concept of those bank accounts? Or is it kind of like outside of the bookkeeping of your business?
So in the bookkeeping aspect, it’s real simple. You just tell them I’m setting up three accounts and all you’re going to see in there is transfers. I’m not going to be paying expenses from these accounts. I’m not going to be moving money in there every day or whatnot. It’s going to be here, money comes into the business, I move it into those accounts.
And then I either pay myself on a consistent basis, and that’s where payroll comes out of owner’s comp. I’ll take it once a quarter out of profit and I’ll pay the tax man either once a quarter or once a year, depending on how you’re set up with your taxes. But you just tell them it’s transfers. That’s all you have to do.
I’m setting up these bank accounts and on your side, it’s real easy. So if you have a bookkeeper or CPA that pushes back, that’s where we usually say, are they really working for you? Are they working to make sure that you are being profitable and that you’re putting good habits into your system? But it’s not more work on their end.
What’s something you can ask a bookkeeper to determine if they’re actually caring about your profit or if they’re just reporting to you what you’re already doing?
What can you ask? And that’s a great question. A great question would be-
Do you care about my profit?
Right? Exactly. Do you care about it, but are you… Do you know the profitability? Or what don’t I see in my business right now that you can tell me about the money and how it’s flowing? Because a lot of the times people don’t know the questions to ask their bookkeeper.
As the deal maker, the entrepreneur, the real estate investing leader, the leader of the company, we don’t know the questions to ask usually. And it is questions like that, what don’t I see? Tell me the profit margins. Can you project my cashflow for the next three months to make sure I’m still in play? Things like that too to see if they’re really savvy and on board of where you’re going and where you’re headed.
Right on. Well, this has been really, really good. I feel like the idea of bookkeeping, looking at profit, looking at the numbers of your business is just like broccoli.
Nobody wants to eat their broccoli, but you need it, right? So I appreciate you coming in here and actually making this a somewhat fun and engaging topic, as opposed to the-
… The dry way it usually gets communicated.
That’s one of the, you asked me what lights of fire, that was one of the fires under me. I had a CPA talk to me talking over my head like he knew more than me. And I’m like this is crap. If that’s how he’s talking to me, just think about how he’s talking to other owners or other real estate investors or that.
And it’s like number one, they’re making it dry and boring. And number two, the owner then understand what this really unlocks. This profit to me unlocks your purpose. It unlocks what you’re able to do. I’ve got lots of stories of people who have started to implement this and they’ve changed the exit strategy that they’re doing because they saw the profitability and where the cash is coming from.
And they went from going out of business to now doing less deals, but making more profit and being less stressed inside their business. And it’s like that’s where for me, it’s that mission of, I have to make this simple. I have to make it enjoyable because the business usually depends on this side. So the broccoli side needs to go down with a spoonful of sugar.
Very good point. All right, David, I really appreciate what we’ve done so far. We’re going to move on to the next segment of the show. It is the deal deep dive. In this segment of the show, we ask investors about a specific deal they’ve done. We’ll fire questions at you back and forth, and you can fire them right back at us. Do you have a deal in mind that we can dive into?
Let’s do my first deal. I want to do the very first deal I did.
All right, what kind of deal was it?
It was, I bought it off the MLS. It was a HUD foreclosure deal. So it was right from the MLS with a real estate agent that-
Single family home?
Single family home, yap. Three bed, two bath house, 1200 square. I still remember the square footage, like 1235.
And how much was it?
I bought it for $50,000 in 2012.
How did you negotiate that price?
How did I negotiate? I told my agent, I ran the numbers because I had listened to, at that point to the Rich Dad Poor Dad and BiggerPockets and other things and how to formula. So I plugged in what I thought the ARV was. And then what the ARV minus repairs minus the percentage, 60% at that time.
And I said, please offer $50,000. And the bank took it, off the first thing, because this was back when there was multiple houses on the market like that.
How did you fund it?
How did I fund it? That’s where I actually went to a mortgage broker at that time and said, do you have… I had already read up on this too. I had said, there’s a specific type of funding I want to try and secure. And I think they might still have it, but it was FHA 203K.
Meaning they would give you the purchase price plus repairs in order to get it done, but they were just very like, they put their thumb down on every step of the process and the project. So it was not private money where someone just gave me that money. It was, I actually went to a mortgage broker. They hooked me up with a FHA 203K loan, which was purchase plus repairs.
All right, what was the outcome?
So the outcome. Spent, had a budget of 25,000 in repairs, spent 30,000. Go figure. And on that first deal with the contractors and from there rented it first and cash flowed about 300 a month for about six months and was able to cash that. And that was while I was in college. So I’m like, this is awesome.
I’m working my job and also being able to cash the money. Then I was in that house. I moved into that house when I first got married and lived there for two years, because I had also read is if you lived in a house two out of five years, when you go to sell it, you don’t pay any capital gains. So it was very intentional that we moved in there.
I lived there for two years, bought several other houses on the side, then moved another house at that time. And then rented that one to the lease option tenant where I put a lease with an option to purchase. That person was super tenant, paid early, actively worked to get a loan, and six months later bought me out of that house.
And I believe at that time I cleared $15,000 on the sale and it was completely tax free because of the capital gain, that specific law at that time. So that’s how the deal shook out.
It’s pretty good. And what lessons did you learn from this deal?
Oh, lots of lessons. Number one, get around good people who have been where you are and where you… Or where you want to be, I should say. Not where you are, but where you want to be. Because that’s where I started going to the real estate investors and the people that I knew in the local area and said, do you have someone now that I’ve rented it out, now that I’ve fixed it up, do you have someone that can help me get a lease option in place?
And so I did. I hired someone to help me get a tenant in place because I knew that I wouldn’t be the best person for that. But I had seen that. I had seen that from the other deals I had done and from working with the companies that I had. So that was another big thing was if I’m not the expert in an area, I need to make sure that I hire the best people for those specific areas of the deal.
Very sound advice there. I’m curious, I know that you sold off your portfolio. What motivated you to want to get out of owning property right now?
So I sold it for two major reasons. One, financial freedom and we moved across the country. I moved to Florida and I’m happy down here because I lived outside Chicago and it is horrible in the winter time. So I wanted to move across the country. The second thing is this mission that I’m on now.
Once I saw I wanted to… I literally took a big portion of what I sold of those properties and poured it into this to be able to help the real estate investing community and just business owners in general not live in their rat race, to get out of this, to know that this is out there, to what you already said, that it’s about making it the pill that’s easier to swallow, the broccoli with a spoon full of sugar.
Going out there and getting a system that’s easy for them to implement that could save their business, number one, or could make them profitable at any time. So those were the two main factors of why I sold it. But I’m in Florida now, and I’m like I’m looking at deals down here. I’m looking at other things. So I love real estate. This is something that’s in my blood, that’s for sure.
Wonderful. All right, we’re going to move on to the last segment of today’s show, famous four. In this segment of the show, we ask every guest the same four questions every episode, and I’d love to see what your answers are going to be. Question number one, what is your favorite real estate book?
Okay, I will not just say my own Profit First for Real Estate investing. I will not.
Profit First, that’s what I was going to say.
Right? Oh man, my favorite real estate book, one of the biggest ones, and this is going to sound crazy besides Rich Dad Poor Dad too. I don’t want to just be typical there. I would say Brandon’s book on rental real estate investing.
I literally took that book, outlined it, and we were able to get 99% collections rate from breaking down Brandon’s real estate managing rental properties. That’s probably one of the clearest books where I took it and put it into a system and actually saw real results from following step by step what someone had put inside a book.
And I say that other places, not just on the BiggerPockets Podcast. So that would definitely be one of my favorites.
What about your favorite business book?
Oh, The Road Less Stupid by Keith Cunningham. It’s all about thinking time, the process of thinking, and then every single chapter from there is literally questions, deep questions to ask yourself if you’re having an issue in your business or life or whatnot. It’s a great book.
I always get frustrated when I look for answers and I get told to ask more questions, but that always ends up being what the answer…
The answer is, right?
… What the answer is, yeah. There’s a part of human nature that wants the quick fix all the time and life just doesn’t work that way.
So outside of writing deeply impactful and amazing books, what are some of your hobbies?
I love to golf. I also like going to mastermind events and hanging out with cool people. That’s probably the biggest two. And I have a five year old daughter, so playing hide and seek or hot and cold are some of these things are one of my favorite hobbies and pastimes right now. And definitely am loving this stage of life with her.
Rob and I were just talking about that, how we can try to bring family and friends into some of the real estate investing that we’re doing and bring those two worlds together. Because real estate works best when it’s not, this is my job, this is my family. It’s a relationship business. You kind of have to figure out how to make it all work together.
Yeah, that is so good. On Sunday night, I call it the profit first life. I put all the things in that I want to do first for the week, spend time with my kids, spend time with my wife, the things that really matter for me and right now in this stage of life. So yeah, I love that, trying to incorporate everything, every aspect of your life together.
All right. In your opinion, what sets apart success investors from those who give up, fail or never get started?
That’s it, not taking action. That’s the biggest thing. I’ve seen so many people make so many mistakes and they still run a million dollar business. They’re no smarter than any of us and they’re out there doing something though. They’re actually taking what they learn and putting it into. So that’s what I would say is the biggest thing. Also implementing profit first of course.
Of course. And then lastly here, can you tell us where people can find out more about you on the internet?
Yes, so here we go. I want to make sure that you can get actionable steps from here. So I asked about this beforehand where I want to give you tools for profit first to be able to start it right away. Meaning, where do I put the money? What are the accounts? What are the goals I should be shooting for in these accounts?
So if you go to simplecfosolutions.com/biggerpockets, that’s where you’ll get your gifts of the tools and everything to start implementing right away. I also give on the audio book, because I recorded the audio as well too, because I am a real estate investor and I know most real estate investors will listen to books, especially if you’re listening to this podcast right now.
So I wanted to make sure I recorded it. And so I give that an exclusive chapter of the book as well too. What’s off at first friendly bank? What does that mean? And are they in your local area? So you could start setting this up as soon as possible. I don’t want to give you any excuse not to start this. So that’s what you do.
And then that’s also for us, because you said, where can they find us? If you go there, we also have the service too for real estate investors, a fractional CFO business to help them get started with profit first or get that clarity around their numbers like you were saying, David, making sure that people know actually where they stand to get that confidence and get that anxiety out of their life. So that’s a part of that website as well too. If you just go to simplecfosolutions.com/biggerpockets.
What about you, David? Where can people find you on the internet?
They can’t find me on the internet. I’m hiding from everyone, taking the Tupac road. No, I’m at David Greene 24. Very boring name. There was 23 David Greenes before me and I am the 24th. Sort of makes me sound like a king, right?
As if you were patient enough to check every single one though.
That’s how it is. You’ve got to pay attention to that. And you can also… There’s a new TikTok that I think is Official David Greene. I’m going to be posting stuff on there, but I’ve been warned by my good buddy, Brandon Turner, not to actually consume TikTok. He’s told me it’s wildly addictive.
Rob, don’t laugh at me like I’m an old man. I know what you’re doing.
It’s a thing. I believe it’s called an algorithm. It’s supposed to be so flirting or something.
So yeah, somebody stole the name David Greene on TikTok already. Those jerks. So I’m Official David Greene there. How about you Rob?
People can find me at Robuilt, R-O-B-U-I-L-T on YouTube, youtube.com/robuilt. It’s not the most visited website on the internet, but maybe after this podcast it will be. You can also find me on Instagram at Robuilt. And if you want to catch me dancing on the TikTok, you can also follow me at Robuilto, throw a little O at the end of that.
You can also see him dancing on his Instagram. Check him out there, story from a couple days ago. Incredibly impressive dance moves. And if you want to see Rob and I together, follow me on YouTube at David Greene Real Estate, follow him at Robuilt. And there is a video coming soon of us in Scottsdale, Arizona checking out the house we have before we made it even more dope.
It’s going to be good. It’s going to be real good.
David, thank you very much for sharing what you shared today. Any last words before we get out of here?
Make profit a habit, set up that one account. Call it profit, transfer 1%. That’s all you do. I promise it will help you keep more money over the next year than you thought possible. Start building that habit as soon as you can.
All right, thank you very much. I’ll get us out of here. This is David Greene for Rob Bojangles Abasolo, signing off.
Watch the Episode Here
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In This Episode We Cover:
Buying for appreciation vs. cash flow in today’s fiercely competitive housing market
How to invest in real estate even if you’re well into retirement
The three main reasons that a property will sit on the MLS for months
When to quit your job and go full-time into real estate investing (and how to set yourself up for a successful departure)
The 1031 exchange and how it works to defer taxes for rental property investors
Using built-up equity to invest in more cash flow and higher appreciation
And So Much More!
Links from the Show
Books Mentioned in the Show:
Profit First for Real Estate Investing by David Richter
Lifeonaire by Steve Cook
Rich Dad Poor Dad by Robert Kiyosaki
Profit First by Mike Michalowicz
The Road Less Stupid by Keith J. Cunningham
The Book on Rental Property Investing by Brandon Turner
The Book on Managing Rental Properties by Brandon Turner
Connect with David:
Connect with Rob:
Connect with David Richter:
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