Episode 106: Action + Action: Mike Fitzgeralds Simple Formula for Massive Results
The Profit First REI Podcast
August 22, 2022
David Richter
Summary:
One dream can change everything. And our guest Mike Fitzgerald couldn’t agree more with that statement. He started with a dream of owning nine rental properties, and now he’s been able to live up to that. Mike is a champion in the REI world. He’s been in the business for quite some time , has purchased over 250 properties, and even gotten an award as “the business person of the year.”
He’s living proof that if you drive towards your purpose and you drive towards excellence, you’ll be able to achieve success. He’s here today to help us create great habits that make us proud of who we are and what we’ve become and step towards our vision and dreams.
Key Takeaways:
[1:35] How did he get into the real estate investing world?
[6:04] What was it like to grow a team for his business?
[8:33] What is the state of his business after years of implementing the Profit First system?
[10:42] Mike talks about the evolution of his money mindset throughout the years
[12:00] What key things and tactics are essential to his success?
[14:22] The importance of having the right people around you
[17:52] Make sure to take massive action to get to where you are.
Quotes:
11:17 “As you evolve, as you move forward, it becomes easier and easier.”
12:23 “If you dream it, you can do it.”
18:48 “Stick with your dreams. If you want to do real estate, it’s going to become your reality,”
Resources:
Mike’s Instagram-https://instagram.com/mike2thefitz?igshid=YmMyMTA2M2Y=
Profit First Real Estate Investors FB Group-https://m.facebook.com/groups/ProfitFirstREI/
Simple CFO-https://simplecfo.com
Tired of living deal to deal?
If you are a real estate investor or business owner who is tired of living deal to deal, and want to double your profits, head over here to book your no-obligation discovery call with me. Either myself or someone from my team will hop on a short call with you to get clear on your business goals, remove any obstacles holding you back, and map out a game plan to help you finally start keeping more of the money you work so hard to make. – David
Transcript:
Mike Fitzgerald:
When you raise money and you’re showing someone a deal and that they see that there’s value there, but there’s equity there. And that their loan is backed by a piece of real estate, a tangible asset. It, it becomes easier to borrow money. If you just walk in a bank and say, Hey, I wanna borrow money on this property. It becomes a lot harder.
Intro:
Welcome to the Profit First REI podcast, where real estate investors, master financial management, eradicate entrepreneurial poverty, and learn to be profitable from day one. Now for your host, David Richter,
David Richter:
Everyone. Welcome back to the Profit First REI podcast. I’m your host. David Richter here, I have another special guest, very special guest – Mike Fitzgerald, who is he is the king of Hagerstown, Maryland. I mean, this guy owns a lot of real estate, done a lot of deals there. And he is someone that if you don’t know, you need to get to know you need to get on his socials. He’s providing a ton of value all the time out there. I get to see him at a lot of different events too. And this is just someone that in the real estate world that is making a huge, huge impact. So, Mike, thank you so much for being on this show today.
Mike Fitzgerald:
Thank you. I David, you’re an awesome guy and it’s a pleasure to be on your podcast. I haven’t done too many throughout the years. I’ve been inviting on some, but like to do more.
David Richter:
Yeah. Well, I appreciate you coming on and well, let’s go into that cuz you are, you’re a busy guy. You’ve been doing a lot of good things and let’s start right at the beginning. So what got you interested in real estate and why did you get into the real estate investing world?
Mike Fitzgerald:
So I thought I was gonna be a big importer. So I negotiated deal with the company in China with $500 credit cards to buy minibikes. And I didn’t negoti shit a deal for, I think it was a few thousand of ’em and it said I wanted a sample order of 30 used $500 credit cards had a friend loaned me $2,000. And you know, I had probably about 15,000 in the bank and I called her rent the own, a newspaper and the fellow, another line said, Mike, you sound like you make a better investor in running down my house and told me I could buy real estate, no money down. I said, you can buy real estate, no money down. I said, how do I learn? He told me to go to the local real estate associations. I went, I started asking questions and had my first deal three months later, my second deal a couple months after that. And just kept moving forward. And here I am today you know close to a few thousand transactions later over 400 units locally and over 450 in partnerships. You know, it started with a dream though nine units one day because a guy in town I grew up in had nine units. Like, I don’t know, you know, it, things lead to another, if you stick with anything, it’s gonna blossom like a flower.
David Richter:
Awesome. Yeah. That’s, that’s incredible. So tell about all the work that you’ve done in Hagerstown. I mean, they, they you’re like a celebrity in that city, so you you’ve done a lot of real estate specifically in that city, correct?
Mike Fitzgerald:
Yeah. So I started a one bedroom apartment in Hagerstown and when the market had collapsed, you know, Hagerstown took a super hard hit, but I got my first loan. I had ever got a state income loan. It was about two and a half years in real estate. And I paid, it was from a farm deal. I did creatively where I did a lot of equity. I was able to pull 500,000 out. I paid about 470,000 of it in my losses. A mentor told me to cut everything out like a cancer it’s it’s good. I did because it would’ve dropped even more started at the new market with about 20 something thousand in the bank about 600,000 in debt. And just kept moving forward. About four years later, I had over a hundred rental units after banks started working with me two years later. By the time I was I started when I was 20, by the time I was 27, I had 200 rental units.
David Richter:
Wow. That’s awesome. So that’s you’ve done a lot of good work there, a lot of good work in that town and I know they respect you very much. So you’ve also got a T yeah,
Mike Fitzgerald:
Go ahead. A lot of that is this building we’re in the day, the grand piano building, you know, I didn’t used to be my tenant here, but when I bought it, it had 196 weeks down to the first floor of light flicking on and off. I had never done anything bigger than a 5,000 square foot, single family home. And I bought a 50,000 square foot building and people told me, Mike, even if you can get it done. And I, and I was the one top of the contractors, myself managed it myself, got it done in a record number. And the city even contributed 150,000. Oh, wow. I, I was told Mike, it’ll take you 10 years to fill and you’re only gonna take other downtown tennis to fill it. So there’s another city Frederick, Maryland, about 18 miles away. That’s very, very vibrant, you know, in Hagerstown, it’s just getting very, very vibrant. Now it’s a much different story, but so I went door to door to businesses like Tommy boy and asked people if you ever thought of opening a second location, filled the building in three months, the governor gave me a an award with him and the state thanking me for helping with the revitalization of, and you know, never looks back, just kept moving forward.
David Richter:
That’s, that’s incredible. That’s changing lives locally and, and across the world here too. So talk about that trophy that you have on your, your desk. You was that the businessman of the year or something that you had mentioned? I,
Mike Fitzgerald:
I don’t nominate myself. I’ve never asked for any of my awards and any of my newspaper articles. You know, I I get recognized. It’s always humbling and an honor. And so in the last 10 years I’ve been nominated for the county’s business person of the year, business of the year. And about two years ago, it was 2019. I was Washington county business, young professional of the year.
David Richter:
Awesome. Very cool. And you’ve built quite a good team around you too, cuz like you said, you don’t get on a lot of podcasts or whatnot, but now you kind of have some more freedom to be able to do, do this type of stuff and whatnot. And you mentioned having a good team behind you. So how has that been? How has that been growing a team? You know, getting them behind you in the, you know, in the businesses that you do and what can you speak to that a little bit?
Mike Fitzgerald:
What’s exactly right. You know, I had a, I was a HUPO business model for the first 11 years or so in real estate and it was great, but I was a hub. Everybody was a spoke and I was working, working, working, doing a hundred hour weeks. And you know, I said, I want, I want to change this. I want it to be like an actual business. And it took, it took five years to get the right people. You know, you learn a lot of lessons, you keep the wrong people too long. You got a few bad apples along the way. We even start their own companies and you know but now, you know, I, I, I’ve learned a lot. You gotta hire, when you hear in these books, you want to hire the best people around you. You wanna pay higher salaries to get the best.
Mike Fitzgerald:
Trust me, that’s absolutely correct. Not only do you look the best people around you, you want them to perform the best for you. That’s the key right now. I got small stars. You know, I got all star P I got, I, I consider my whole company all stars, but I got five of the best managers I can ever ask for. You know, a lot of people are doing everything around me. The business is vibrant and I love it. So I do have some more time now and I’m looking at, you know, I’ve, I’ve only ever coached a couple people in real estate calling with wholesale of millions, one of ’em, but I like changing people’s lives. So maybe I’ll do a bimonthly thing. Maybe I’ll start helping people. I haven’t decided, you know, what I’m gonna do with my new fail time, but it’s all about having the right people. And I definitely have a lot of good people around,
David Richter:
Well, I appreciate you coming on this podcast. And then also I think that’s so true. We hear that just on this podcast, the last few episodes here, it’s just come up with people who are extremely successful are surrounding themselves with those people that are also SU extremely successful, you know, and making sure that they have the right people on the team and how important it is. Cuz like he, like you just said, Mike, if you’re listening to this podcast right now, that is the key. That is the key to getting to where you want to be in the businesses, those good people around you. So thanks for speaking on that. So, okay. So your real estate investing journey has been quite, you know, quite prolific here. What about cuz this is the Profit First I podcast on the money side of things. You
Mike Fitzgerald:
Honor to be on here by the
David Richter:
Way. Oh, well thank you. And I, like I said, honored to have you on here, but for the money side, cuz you’ve done a lot of loans in the past. You’ve paid off a lot of loans. Can you speak to like just the money side of your business and like how that’s gone over the years with the different projects that you’ve done and managing all of that and paying stuff back. And I know you’ve done quite a few over the years.
Mike Fitzgerald:
It’s all about sticking with it. I I have, and I’ve always, I’ve always overcome. I’ve always knew whether I’ve won or lost. I I’ve paid my loans on time. I’ve never defaulted. I’ve never not paid a debt, you know, no matter what I have to do, I do it down to, you know, if I’m I to take a loss, I’ll sell a property. And it’s important that with banks and with lenders, you do what you, you do what you say and that’s you’re on point no matter what. So that means you have to be willing to sell something. And that means you have to be willing to always move forward. What I find is every time I have a hurdle, I do more deals and it just irons itself out. But with lenders and banks, you know, you have to present yourself, right?
Mike Fitzgerald:
So the best way to present yourself is give ’em who, who your, who your team is. I mean, if you have a small team, if it’s a lawyer, if it’s an accountant, if it’s it’s a virtual assistant, you know, write up who your team is, put it in the packet and write the deal down. You know, when you, when you raise money and you’re showing someone a deal and that they see that there’s value there, but there’s equity there and that their loan is backed by a piece of real estate, a tangible asset. It, it becomes easier to borrow money. If you just walk in a bank and say, Hey, I wanna borrow money on this property. It becomes a lot harder. The other thing is I never just walk in and ask for the commercial lender. I, I usually go straight to the president because once a commercial lender makes a decision, that decision isn’t gonna be changed by the president. But if you have a meeting with the president and you present yourself, right, it’s more of likely the commercial lender will make a, a decision of what favors you.
David Richter:
Hmm. That’s really good. That’s really good advice. So that’s, if you’re going into the bank and you’re talking with them, go to the president first, don’t go to the commercial lender and trying, you know, and the other key thing there is presenting yourself. Well, so that’s awesome. Great advice. Love that. So then let me ask you some general questions just about money in general, cuz being on this podcast, the Profit First podcast, I wanna ask, like what lessons or what, how has your thought process around money evolved over the years? Like, did you think money was scarce before and now it’s like abundant or like what kind of concepts did you think about money in the past? And like how has that evolved over, you know, the past, you know, in real estate?
Mike Fitzgerald:
So I used to always dream about how I could do it. Okay. How I’m gonna make this
David Richter:
Happen. Awesome.
Mike Fitzgerald:
And it’s, as you go on, you know, my first year in real estate, I did two or three deals like next year, six or seven, my next year, 12 or 15. And as you evolve and as you move forward, it becomes easier and easier. And it’s, it’s, it’s hard to say why, other than it’s like an athlete, perfecting their skills. And when you look at it overall, if you don’t really think about how hard it is and you look at it in a much different light, it becomes easier and easier. And there’s a lot of money out there, especially right now that wants to be placed in safe places. And I don’t think there’s a safer sector in real estate, you know, inflation can be unfortunate, but it definitely helps a real estate sector.
David Richter:
Yeah, no, that’s really good. And what would you say, you know, so far up to this point has contributed the most to your success in business and real estate. And one of the things that you would say, you know, these are the, the key things that help me along the way.
Mike Fitzgerald:
Well, I could say my mom praying for me every day. Oh,
David Richter:
That’s
Mike Fitzgerald:
Good voicemail every day. Sweet, sweet, sweet parents. But I would stay sticking with it. You know, I, I always envision everything and I always dream it and I always believe it, you know, while Disney said, if you dream it, you can do it. And I think as I move forward, you know, the bigger my dreams get, they, they come to fruition because I believe in ’em I know I can make ’em happen and they tend to fall into place.
David Richter:
Awesome. So stick with it, get don’t give up on those dreams, make sure you keep moving forward. And what would you say have been some of the biggest pitfalls on your real estate investing journey or some of the things that you wish you would’ve known back then that you know, now, you know, in order to, you know, sidestep some of these landmines?
Mike Fitzgerald:
Well I wish that I wish I knew all kinds of things, you know, I wish I knew what would happen with the market. I would’ve made about five different buys. It would’ve made millions of dollars, but you know, in a bad market, there’s so many good deals, but it’s always like hindsight’s 2020, right? Oh yeah. So how, how do you make your foresight 2020, right? You make your foresight 20, 20 by the positivity of of thought moving forward and seeing it, you know, real estate is most certainly in many, many cases, most likely, always gonna go off. If you buy right today and you buy a property, you say at a 20% discount, 25, 30% discount and on 20 year mortgage, well, 10 years later with appreciation depreciation and and the income that goes with it, you know, you probably owe 30, 40 cents on a dollar. So if I, if I could tell if I could say what I know today, I wouldn’t have made any other mistakes. I made sold any of the real estate I sold for those mistakes.
David Richter:
Right.
Mike Fitzgerald:
That is what everybody would say, right? Yeah,
David Richter:
Exactly. So there you go. That’s Hey, like you said, hindsight’s 2020, but I like what you said there, how can we make our foresight 2020? And it is that those thought processes and, you know, wording what you’ve done and then moving forward. And then I think another thing, like you said before is having those right people around you, like having the people that can advise you and help and make sure that you are on the right track too, you know, getting those really good people around you. But now that was that’s incredible. So in the real estate investing world, like what is, can you tell me about one of the best deals that you’ve ever done
Mike Fitzgerald:
Best deal I’ve ever done? Well, you know, it’s hard to say if I didn’t do the farmhouse, when I, once I got, I got a call, you know, it was technically my third deal in real estate, even though it didn’t close until like my 16th deal, I get a deal from a farmer and he says Mike, I wanna I, I wanna stop my farm for a million dollars. I’m in a one bedroom apartment I have about 40,000 saved up from real estate deal. He wants a million dollars for his farm. I can’t get a bank on yet. What would most people do, David? They shy away from it. Exactly. Let’s make a deal. I mean, to deal with them where I could subdivide it sell or all of a subdivision towards my purchase price, the rest would be an owner finance mortgage, which eventually would be my state of income refinance that refinance allowed me to pay off a mass amount of losses and do the right thing and move forward in real estate. Could that be my number one deal? Well, it’s hard to say, you know, I picked up long metal apartment complex for 2 million, put a million in it today. It’s worth two plus that. So it’s hard to say what my best deal is, but I’d say every deal can be your best deal. If you’re not blind into the deal,
David Richter:
That’s really good. People
Mike Fitzgerald:
Look at one factor or one focus in real estate and they forget that real, estate’s all numbers. If you’re at the real estate game, you know, maybe you don’t wanna be in new construction, but other than that, if you’re buying at the right numbers, how are you losing your focus? So when the right numbers come before me, no matter where they are, like when I had done a deal over 5,000 square feet and I got a call to buy a 50,000 square foot office building I looked at and I looked at it, numbers based.
David Richter:
Awesome. No, I love that. And that is, I like what you said there, every deal can be your best deal. And, you know, making sure that you are, you know, getting something out of it, cuz like that one that you did might not have been like your best profit deal or whatever, but it allowed you to pay off that, you know, that debt or whatnot or get outta some of those holes to be able to bank people. Right. And it’s like that to me is a great deal. You know, cuz that way I was able to do what I needed to do in order to move forward. Like you said, keep moving forward, stick to it and keep doing the right thing. So now that was incredible. So just have a couple last questions here on the podcast. I wanna say number one is there any just general advice, recommendations, whatnot for the real estate investors listening on this podcast that you would wanna give to them
Mike Fitzgerald:
Guys, you all have the same opportunity in life. Me, I barely passed high school and I got quite the real estate portfolio, three commercial buildings, apartment complexes. And, and I did it not because I’m the smartest guy in the room. I did it because I took action. If you take action and you take massive action, you’re gonna get a lot of results. You know, I used to tell everybody action plus action equals massive reaction and you’re guaranteed results.
David Richter:
That’s really good. So that’s what we, there’s that constant theme again around the top people in real estate or just business is that action. I like what she said there. That action plus, you know, plus action, you know, making sure that you are taking that massive action in order to get where you want to be, because you could be have the greatest mentors in the world. You could be listening to this podcast, living, listening to Mike. But if you just go away from this podcast, not doing anything, then what was the point? You know, like what are you doing with what you, where you want to go? So that’s just great advice. Love that. So Mike, if people wanted to connect with you or you know, I always ask, you know, how can our listeners provide value back to you? Because you’ve provided a ton of value here of like your journey, this, you know, mindsets behind that. And I’m just wondering, you know, how do they connect with you? Or is there anything that you need as far as connections or anything? And you know, our listener base can, can help you out too.
Mike Fitzgerald:
You know, a lot of people have told me to put more stuff out there on social media, you know, it helps people. So I’ve been doing a lot more of it. Awesome. My Instagram is Mike, the number two, the fits that’s M I K E the number two T H E F I T Z, Mike to the fit. And you know, everybody stick with your dreams. You know, if you want to do real estate, it’s gonna become your reality right now there’s a lot of 30 year money out there stated income loans and a lot of chance to buy opportunities in rentals in real estate. You know, I, I, haven’t seen a time even in oh seven where you can get a 30 year rental loan for 3.7, 5% with, with no tax returns. And there’s a lot to be said for that. The average interest rate over the last a hundred years is just over 8%. You know, it’s a huge opportunistic time in real estate. I don’t think it’s going anywhere. There was a lot of home building stopped in 2007 and there’s a shortage year in the us, you know, stick with your dreams. Believe in yourself. The universe believes in you.
David Richter:
Awesome. There you go. You’ve got it right from Mike Fitzgerald here. He’s helping you. That is really the way to move forward is making sure that you are, that you’re working on yourself too, working on that Headspace, making sure you’re in the right mental attitude, the right mental space. And then there, that’s how you connect with him, Mike, to the number two, the fits Mike to the fits and that’s his Instagram handle. So you could go there, follow him, make sure you do. He’s got great content. And this is someone who is a mover in shaker. He is literally probably gonna go from this, you know, podcast and go make more deals like today. So this is a guy who’s gonna be out there. He’s gonna, you’re going to watch him, watch what he does, watch what massively successful people do. So this is someone that you should follow. See what he’s doing and just see the action that he takes. And Mike, thank you for sharing today on this podcast, but thank you for sharing more on social and whatnot because you do, you bring a ton of value everywhere. I saw that you were just speaking again last night, somewhere, it looked like too or out at another event. So it’s like all he’s always out there providing that value, helping other people. And so Mike, thank you so much for being on the podcast today. Really enjoyed having you as a guest.
Mike Fitzgerald:
Thank you. And I’d like to say David is one of the smartest people I know in real estate book Profit First makes a lot of sense. You know, you want to keep your Profit First. If you keep money on the sidelines, you’re always gonna be able to pay the road bumps along the way. Yep. Stick with your dreams, create your own reality. You can do it. You’re listening to a smart guy. Keep listening to this podcast. It’s one of my favorites.
David Richter:
Thank you so much for listening to today’s show. If you found this episode valuable, could you do me a quick favor? Could you give us an honest rating within iTunes and be honest, you could say whether you liked it or not. And obviously with iTunes, the more reviews and ratings we have, the better it is for other people that are searching for a Profit First and a podcast. So we’d love to be ranked on there and that’s thanks to your help. So we would really appreciate that if you would like to go give us a rating. Also, if you’re looking to connect with us further, I would highly recommend checking out our Facebook group Profit First for real estate investors. And that’s literally what it’s called. So you can type in Profit First for real estate investors and you’ll be able to find <laugh>, you’ll be able to find our Facebook group right there.
David Richter:
So come join active real estate investors who are supporting each other and growing their businesses and profits together. That’s what that group is all about. The link should be in the description below. And if you’re interested in working with us and implementing Profit First in your real estate business, we offer coaching and guidance. So if you wanna work with someone who’s actually Profit First certified and who works right now currently with real estate businesses, you can actually go start your application process by going to simpleCFO.com/apply, or just go right to simpleCFO.com. And there’s an apply button right on there. If you wanna actually start your Profit First journey with someone who can actually walk you through those step by step and help, you know, and grow your cash flow. Thanks again for joining us for another episode of the Profit First REI podcast. See you next episode of.
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