How Cashflow and KPIs Determine Your Growth Potential With Glenn Stromberg

Episode 97: How Cashflow and KPIs Determine Your Growth Potential With Glenn Stromberg

The Profit First REI Podcast

July 21, 2022

David Richter

 

Summary:

Don’t get tricked by naysayers and those who have failed to implement the Profit First system correctly. Because today, we’ve invited the “king” of real estate, and he’s going to set things straight.Glenn Stromberg is here to bless us with his field expertise so we can also rise to the top as quickly as we can. Let’s hear some essential tips from this business tycoon.

Key Takeaways:

[1:55] How did he start in real estate and what was the big kickoff from there?

[6:16] What early lessons did he have about money, and how is it compared to what he thinks about money today?

[8:50] What lessons about money does he want to pass down?

[10:51] How does Glenn track his numbers and what are his key indicators?

[13:54] Glenn’s financial advice to the real estate community

Quotes

[6:43] “Money is the bi-product of serving people.”

[13:48] “Get in mastermind groups. That is the game changer.”

[14:34] “ Not everybody should scale. You need to find out first where you want to go and where you want to be.”

Links:

The Go Giver by Bob Burg and John David Mann-https://thegogiver.com/

Stromberg Investment Group-stromberginvestmentgroup.com

Email Glenn at-glenn@stromberginvestmentgroup.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:

Glenn Stromberg:

Money gives you options. Money’s nice to have, you can help people with money. There’s all kinds of things that you can do with it. You know, for me, obviously God had it, right. You know, you tie 10%, it’s more blessed to give than to receive. And when you do that, you can’t, you can’t keep the blessings off ya. That’s that’s been my experience.

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:

Hey everyone. It is David Richter again with the Profit First REI podcast have a special guest today who is a personal friend of mine that I’ve known for several years now. And from the real estate investing world and going to different masterminds together and doing several different things over the years together, this is Glen Stromberg. He owns Stromberg investment group and several other things. He is the king of real estate. He does mobile homes in amazing places. And does that, and has been doing that for a long time. Make sure he talks about that today, but I’ll never forget when I saw that up on his screen real estate. I thought that was amazing. So he’s the king of real estate, but he is also a good dear friend of mine. So Glen, thanks for being on the podcast today, David,

Glenn Stromberg:

Thanks for having me man. It’s a pleasure to be here really is

David Richter:

Awesome. And Glen also, just before we get into this, he’s one of probably the most solid people I know, and just grounded in his faith, grounded in sharing that with other people grounded in knowing that he’s helping and providing value. So whatever he says today will be gold and will be someone that truly cares about who you are on the other end of this, listening to this right now. So Glen, let’s dive right into it. How did you get started in real estate? What was the big kickoff? And then we’ll go into your journey from there.

Glenn Stromberg:

Well, you, you know, what, what happened for me was, and I forget, I, I, I, I heard it. My dad was an entrepreneur and I heard it, I read it in a book or heard it, I forget where I got it from, but it said that, you know, most millionaires either they own their own business or they get it in real estate. So I said, you know what, I’m gonna do both. I said, I wanna, I wanna put the odds in my favor. And so I wanted to have a real estate business and it always made sense to me to make money while I’m sleeping. That was my, you know, and I, I read a bunch of books and I just thought, wow, that’s something that yeah, that made sense to me. And, and that’s, that’s what I wanted to do so

David Richter:

Well, let’s fast forward. So you got started in real estate. What did you start with and then kind of tell from when you started to where you are now and all the amazing services that you provide today?

Glenn Stromberg:

Well, yeah, you know, the first house was with my dad. My dad provided the money. I found the house and we, we kind of joined ventured together and we did, we did well on it. Then there was another house that I did on my own. I didn’t do well on that. I learned a good lesson on that. Cause you know, as far as inspections and so forth. So, you know, you, you do have trials as you go, right. It’s experience. And so I don’t forget, I I’ll tell your listeners, this people always ask me if I had to rewind, what would I do differently? I would absolutely get a mentor, someone who’s where I wanna be. And I would go, man, I’d go work for them. And I’d say, just teach me what you, what you have and I’ll do whatever you want me to do for nothing.

Glenn Stromberg:

And, and you you’ll cut your growth curve down by many, many years, if you do it that way. And then currently now we buy manufactured homes. They’re usually double wides, 1500 to 2000 square feet on a half an acre to an acre track of land. They have a Dean of trust or mortgage on. These are not mobile home parks. That’s where people get it, get it confused, nothing to do with mobile home parks. There, they can be great investments, but that’s not what we do. Our homes have deed of trust, mortgages on. ’em Just like a single family home. And what we love about our space is, is that, you know, and I’ve never seen like this in my career to where there’s such an affordability crisis in America. Now we fill that niche. And and it’s crazy. We’re selling some of our properties now for 150, $200,000, right? Why? Because the single family homes are going for three and a quarter, three 50 in, in the same area. So, so we, we provide, we provide a really good service for, for, for affordable housing. So

David Richter:

Awesome. Yeah. And, and I love that the turnkey operation, the real estate, you’ve got everything, you know, there that you not only, I believe provide good jobs for the people that work with you and a good income and all that, but you’re also providing that for investors and giving them, you know, the financial freedom through the turnkey operation and yeah,

Glenn Stromberg:

Yeah. We have over 150 investors now and yeah, we have, we have two different models. One is a lending model for private investors. The other one is a term key model. And we do a lot of, you know, we do all our business with private lenders. We don’t use banks. We, we, we love, you know, private investors creating, win, wins and, and making money together. And it’s a lot of fun. It’s a lot of fun and is rewarding. So

David Richter:

That is awesome. I love that. And especially the win-win, you’re working with that person on the other end and you’re providing that value back and forth. And there’s nothing that beats that. And especially you can lay your head on the pillow and not only say, you know, like this was a good day, but I helped someone else as well too. And I think that’s just, you know, that’s the icing on the cake being able to help and provide that value back and forth. And then I love what you said too. It is so great that you said if I had to rewind go back and get a mentor, because literally the podcast episode before this with cap, he started in real estate, just two and a half years ago and had a mentor at the beginning and basically worked for free for eight or nine months.

David Richter:

And now two and a half years later, he’s done 85 transactions. He’s in these different development deals and all this. And it’s like, he got that growth curve. And that’s like, that’s awesome that you brought that up because we had someone who put that into practice. And I think he’s 20 years old, I think he started at like 18, 17 or 18. So it’s just incredible. And so there’s a huge nugget there that keeps coming up. If you’re listening to this grab onto that, especially if you’re, if you’ve been kicking the tires, you know, for a while in the real estate game, find someone who’s doing it, provide value to them and see how you can learn the business from there. So thought that was awesome. So then let’s go into the money part of it, since this is pro first REI, let’s talk a little bit about some early lessons. What early lessons did you learn about money? And then how does that compare to what you think about money today?

Glenn Stromberg:

Well, you know, it, it’s funny when, when I was younger, you know, this was in my pre-Christian days, you know, I thought money was gonna make me happy. And boy, I found out very fortunate and very blessed that I made. I made, I made a lot of money when I was young. And, and I found out that wasn’t true money. Doesn’t buy happiness at all. It’s not, not even close. You know, the old saying, I’d rather have it than not, man. I subscribe to that. That’s a great, because you can do a lot of great things with it, but you know, money is the byproduct of serving people of, of, of serving people and, and, and helping, you know, I tell our team all the time, if we exceed expectations for tenants and investors, we don’t, we don’t have to worry about us. We’re gonna be fine. You know, we’re gonna be fine. The money’s gonna take care of itself. And it does, right. So money gives you options. Money’s nice to have, you can help people with money. There’s all kinds of things that you can do with it. You know, for me, obviously God had it, right. You know, you tie 10%, it’s more blessed to give than to receive. And when you do that, you can’t, you can’t keep the blessings off you. That’s, that’s been my experience.

David Richter:

Awesome. And I love that. I mean, that’s, that is not only just true Christianity, but that’s also a path I believe too wealth of, because God wants to give it to you and then you give it back to other people. And then it’s this, the constant loop. If you’ve never read the book, the go giver, I would highly recommend that book by Bob Burt, where you have to be able to give and receive it ha it is a cycle of giving and receiving. So I love that. Love that mindset. Now you talked about the first deal you did was with your dad. And so talk about that. Did your parents talk to you about money growing up? Like, was that in the household or like, was that first deal? Or

Glenn Stromberg:

My dad was an entrepreneur. He was, he was a Mason contractor, you know? So he was a Mason contractor. He built some, he did some general contracting a little bit. He kind of gave me the entrepreneurial bug. And then, like I said, I wanted to do real estate and I found a really good deal on a, on a property in Dallas. And I had no money. I had no credit at the time. I had no nothing. I said, dad, I think this is really good deal. If I remember right. We were able to buy it for $24,000. And I, I think, I think we fixed it up, rented it out for a while. And then we ended up selling it for like 60,000. It was, it was a, it turned out to be a great deal. And if I remember right, we split the profits and just, you know, everything was good. And then shortly after that, I got into the manufactured housing industry. I’ve had mobile home dealerships, I’ve done subdivisions. I’ve been, I’ve been in every facet of it through the years. And and so it’s housing, it’s real estate. And it’s, it’s, it’s like I said, it’s a, it’s affordable housing, which is really, really critical at this time. It always is critical, but it’s really critical at this time. So.

David Richter:

Awesome. So then what lessons about money? Are you wanting to pass down either through your business, to other people through the generations? Like what legacy are you looking to? We buy,

Glenn Stromberg:

Well, I tell, I tell everybody, you know, well, what do you do? Like people ask me, what do you do? Right. And, and it’s real simple for me. You tie 10%, you save 10%, you live off 80%. You’ll have money your whole life. It just, it’s not, it’s not rocket science. It’s not, you know, I think the average American lives off of a hundred, 5% of what they make and something crazy like that with credit cards. And it’s just, yeah, if you, you know, if you, if you tie first tie 10%, save 10% live off 80%, you’ll have money your whole life. It’s it’s, it’s, it’s simple.

David Richter:

Awesome. No, I love that. And if you just take that simple fact right there, you can become where you need to be and just take that and not have to worry, not have to stress, just set, set up a simple system. That’s where Profit First. I love that for the business as well, too, because it’s like here set up these percentages and live off of those, you know, like making sure you are doing that. And then do that personally too. There is,

Glenn Stromberg:

You know, Profit First is a great, you know, I’ve read the book twice and, and it, it totally makes sense or you and I have talked about it and so forth, and it’s very similar, right. Just, you know, make, take your Profit First and, and, you know, and, and then live off the other stuff. And, and so many people, cuz especially in real estate, right. Deal flow and money to the bottom line are two totally different things. Right. You know, there now I’ll give you an example. There was a time where my P and L said, I made $200,000 one month and I had no money in the bank.

David Richter:

Right. Yeah. And,

Glenn Stromberg:

And what happened was, was that it was all in rehab, in the houses. It was all, it was all out there on the P and L it showed, it was a, I was making the money, but it was sitting in the houses. Right. So you know, you’ve gotta be careful, you know, that’s, that’s another lesson that you learn in real estate. You, you better, you better be adequately funded and, and the cash and watching the cash flow of course is critical.

David Richter:

So well, let’s shift gears just a little bit. So in your business now with doing the different things that you do, what are some of the high level numbers as you’re tracking, maybe from the financial perspective or just overall to make sure like, yeah, we know we’re on track and that we’re not just spending, you know, we’re not making the 200,000, it’s not just, you know, going out everywhere.

Glenn Stromberg:

First of all. Yeah. We, we don’t do it that way anymore. Like I say, we, we get everything funded on the front end, so the cash flow, we don’t have those problems anymore, but really my key indicators are really, really simple. Okay. We know our break, even we, we know what our expenses are. Okay. And we’re tracking number of units and gross profit every month. And we know if we hit that the money, you know, the money goes, comes to the bottom line and we’re good. So it’s not, it’s not rocket science. You gotta know your numbers, you gotta know your, you gotta know your overhead. You’ve got to know all that good stuff, but it’s just making sure you’ve got the revenue stream coming in. And, and that’s how I monitor. I’ve got a good dashboard that I look at all the time. I’ve got a good dashboard of how we’re doing, you know, different Google sheets and different things that we use. And so, you know, I, I kind of look at that once a day and kind of go through it. And, but I will say this to me, the key indicator is always, the banks is what’s in the bank. That that’s more important than the profit than the P and L that’s more important to all the other stuff, how much is in the bank. That’s how I always know how we’re

David Richter:

Doing. That’s incredible. Cuz that’s where, you know, it doesn’t matter at what level that’s still the big factor, you know, especially for the entrepreneur, knowing that, okay, we’re taking care of the, our investors are taking care of, we’ve got the money in the bank and all these dashboards are great, but it just matters. Do I have the money there to do what we need to do?

Glenn Stromberg:

Yeah. And I tell people, I tell people that, you know, like some people just get, you know, they, they get bogged down in the P and L and, and which, you know, PNLs are great. Don’t get me wrong. You gotta ha gotta have ’em. But really the, the money in the bank and the cash flow. That’s your, that’s your key indicator in my opinion. Right?

David Richter:

People don’t, people don’t go out of business because of their P and L they go out of business cuz they ran outta cash. So

Glenn Stromberg:

Ran outta really what’s you and I are in a lot, you know, in several of the same masterminds and you, you hear this stuff over and over again with high level real estate guys, most guys go bankrupt in our biggest year, their biggest revenue year.

David Richter:

Yeah. Yes. And,

Glenn Stromberg:

And it happens, right. You, you get too big, you get too big, you get too much stuff going on. You don’t, you don’t, you don’t track your cash flow. And, and you could, you, if you’re, you could take, you could take a fall on your

David Richter:

Oh yeah. Yes you can. And that’s exactly what we’re trying to save people from is that making sure you at least can manage that cash flow cuz you know, cash could be keen and cash flow can be keen, but I think cash flow management, making sure you know where it’s going, how much you have and what is going on. So yeah. That’s I love that. You said that cuz yes, we hear that all the time. Like a lot of people do, they go out of business with their biggest year and you’re thinking what the heck they were just up there talking about like all the deals that they’re doing. And then it’s like on the back end, it’s exactly the situation. You were saying $200,000 on their profit and loss, but zero in the bank account. So, you know, it’s all going back and they don’t have that, that handle. So that’s, this has been awesome. Really good stuff. So just like last few questions here. Is there, what other advice and just in general could be around finances or not just in general, would you give the real estate investing community with your experience?

Glenn Stromberg:

You know, that’s easy too, you know, get in mastermind groups, you know that, that is the game changer, right? I mean there is nobody, you know, think and grow rich had it right. Many, many years ago you can sit in your office for, for the next 20 years and you’ll never think of stuff you’ll get in mastermind groups. And you know, I hear guys that, that they complain about 20 or $30,000 to be in a mastermind group. It’s not an expense at all. It’s a total investment and I’m not exaggerating. I’ve gotten million dollar ideas in those rooms. Okay. And so, so I believe totally, you know, you, you have to invest in yourself and I’ll say one more thing too, depending what you wanna do, not everybody should scale. Okay. That’s not, you know, you gotta find what you, where you wanna go and where you wanna be.

Glenn Stromberg:

But if you do wanna scale, you do need to get an entrepreneurial operating system, get the right people in place and so forth. Which if we didn’t do that, we could have never grown and been in four states. Like we are now, the mastermind groups have been key. They have been key for our growth and our success. And, and I, I, I, I mean, I couldn’t have done it without ’em, you know, and it’s funny, like I’ll talk to younger guys and they go, man, you’re really smart. I go, no, I’m not. I’ve just copied everything from guys, from guys smarter than me. I’m not, I didn’t come up with this stuff. You know, it’s like, I’m just copying what works. So

David Richter:

I love that. I absolutely love that advice because when you first get into real estate, like you was saying, if wherever you might be on your journey, it is finding that mentor. That’s been down that road. Who’s probably going to masterminds and getting those ideas and you’re learning from them. Then once you have your business or that set up, then you’re going to these masterminds and gaining those ideas. And he is not kidding. Glen is not kidding about the million dollar ideas, especially when you put it in the context of how much brain power there is in that room and how much people are making some people making 10, 20, 30 million a year, you know, like high dollar amount. And it’s like this one tweak could be a million dollar idea just because of you’re in these rooms with people making much more than a million dollars in a year. So it’s just, it is incredible that it was amazing advice. Now my last question here, because of all the value that you’ve brought here, Glen is how can our listeners provide value back to you? What are you working on? What are you doing right now? Is there any way that any connection to a

Glenn Stromberg:

Need? You know, we are growing, okay. We are growing throughout the state of Texas. And obviously Texas is a very big state and North Carolina, South Carolina, Georgia, we’re actually getting ready to expand Alabama. And yeah, I mean, if there’s people that, that are looking for opportunities in those areas, you know, we’ve, we’ve got acquisition, people making six figures and six figures plus. And so, you know, that, that that’s, that’s, that’s something that, that, you know, if they’re interested, they can call us. And then plus we use all private investors. If anybody’s looking to invest, I’ll say this just to give our company a plug. I just have an awesome team. And, and throughout COVID and our business model is we buy the homes. We fix ’em up like new that’s the key, new car, new carpet, new air conditioning, new appliances, new, everything needs, new roof, septic tank, whatever.

Glenn Stromberg:

Okay. And then we put a tenant in and we property manage it. And throughout COVID when they had forbearances on evictions, we were 97% plus for collection. And here’s why, because like when COVID hit, right, what did people want? Bigger houses with more room? Guess what we got our, our demand was three X, right? Plus when things are hard people downside, it was incredible. The, the, the, you know, like I said, I used to always say, I’ve always said this and always believed it, that our model works, works great in good times, but even better in bad times. So I think we’re, my, my attorney says never use recession proof, but we’re in a recession resistant business. So <laugh>, I think it’s a good place for investors to put some money into. So that’s the other area.

David Richter:

So if someone wanted to join the team or just whatnot, how would they get in touch with you as an email? A website?

Glenn Stromberg:

Absolutely go to our, our, our, our company website is Stromberg investment group.com. Okay. S T R om, B E G. Investment group.com. You know, there’s a place on there where they can inquire, or like I say, they, they can call me my phone. You know, my phone number is (817) 966-1258. And then of course my email is Glen two NS, G L E N N, Stromberg investment group.com. They can contact me any in any of those

David Richter:

Ways. Well, there you go. There’s how to contact him. And if you could provide him value, I know that would be incredible if you’re looking for also, you know, like for working with someone that’s in truly incredible investor for, and has seen different markets, different cycles. And it’s, I do, I do love this model and I believe in Glen a whole lot. So thank you so much today, Glen. I think this was an incredible episode. Thanks for providing the value to the listeners today.

Glenn Stromberg:

David, thanks for having me. Great job. Yeah. Great. You, you did great. You did great, great questions too, by the way. So I appreciate it.

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 simple CFO solutions.com/apply, or just go right to simple CFO solutions.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 first REI podcast. See you next episode.

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