00;00;09;21 - 00;00;31;25

Unknown

Welcome to the Profit First for Real Estate Investing podcast. Every week we bring you top investors and experts sharing how they create clarity, cash flow and consistent profit. This episode is brought to you by simple CFO. Profit first. Profit always lets go. This is an episode you don't want to miss. This is Ben Locker. He is someone that I respect in this space.

00;00;31;25 - 00;00;52;00

Unknown

He is a true business owner. He is going to teach you on this call how to get ramped up from wherever you are. If you're at deal one or at deal 100, he will help you make more money from this call because he tells how he's scaled into $250,000 a month in ad spend in getting deals in the door and helping people in the real estate space.

00;00;52;00 - 00;01;20;27

Unknown

This is someone, though, who did not start like that, who started off very humbly and getting up and going to work and getting it in the door of making sure he knew what is marketing was, but then how important the numbers were to him tracking the right things and having net profit. He also implemented profit first, and he tells in his business how he's been able to build it profitably and has seen, even in his own business, how things haven't been working out, but catching them quickly enough to pivot and not lose his shirt.

00;01;20;27 - 00;01;45;03

Unknown

So this is a great episode. If you want a very well rounded episode of How Do I Make Money? How do I make it quickly in real estate? But then how do I sustain it long term and then keep a lot of that money as well? To this is the episode you don't want to miss. Have a great listen to this one, and there will be times I'm telling you that you're going to want to go back and listen to certain parts, because it will help you tangibly in your real estate investing business.

00;01;45;04 - 00;02;05;05

Unknown

Enjoy the episode. Welcome back to the Profit First podcast. I am David Richter. I have one of my personal friends here, Benmont Locker. Thanks for being on the podcast today, Benmont. Thanks for having me, bro. And I reciprocate, friend. I absolutely don't use that loosely and highly respect and love everything you've done for us in the industry. Well, likewise.

00;02;05;05 - 00;02;21;29

Unknown

And I have been someone that's been in a lot of these mastermind groups and a part of them for a long time. And I've noticed that after being in the real estate industry for 13 years, there's a lot of stock to be put in if you can stay in these groups and if you can be a part of those for a long time, because that means you're doing things right.

00;02;21;29 - 00;02;38;17

Unknown

And even if things go awry, you're still there. You show up, you do the things and you do right by people. So which is awesome. That's why I'm excited to get to interview you today, because even with some of the stuff you sent in beforehand, I was like, okay, this is going to be very interesting. So I'm just going to let's dive right into it.

00;02;38;17 - 00;02;54;20

Unknown

If you're good with that, Benmont, let's go. Man. Nothing's off limits. So whatever is like I said, it's good for the crew and us to share some of our tribal knowledge. Would love to. Cool. Okay. And if you are just listening to this podcast, Benmont has a ramp hat on which he has some of the coolest hats in the real estate investing industry.

00;02;54;20 - 00;03;15;08

Unknown

So I just have to say that for the people on the podcast, go to our YouTube channel, check out his hat. But then also this question will make more sense because it says ramp. So you've ramped up to spending about, what, 200,000 a month? Now on marketing. I'm wondering, how did you get confident enough as a real estate investor, as a coach, as a trainer?

00;03;15;09 - 00;03;42;16

Unknown

Like, how did you get to that place? Because obviously you weren't just born spending $200,000 a month of marketing. Yeah, it definitely comes from a place of confidence is a great word I often talk about, like having the data or the discernment to be able to do that. I think that most people don't see using the cash or having the cash, it's actually just the confidence in it.

00;03;42;18 - 00;04;16;02

Unknown

Hey, some of it comes with time, so like it doesn't happen overnight. Unfortunately for anybody. Everybody just logged off. Now they're like, dang it. The the secret to spending 250 K a month. It's using data and digging in beyond that is like it's two components for me. The data tells the story. And then having trust in your sales team so transparently right, like how do you get there is fearfully struggling for a couple years of trying to figure it out, but I got to the point where marketing's responsibility is to get us not just gross leads.

00;04;16;02 - 00;04;38;29

Unknown

It is easy to spend money and get a response. Marketing in our organizations took 100% ownership. To get to qualified leads is what we call them. Some people call them net leads. I love qualified leads because it has the word of what it needs to be inside of there. If marketing takes responsibility to qualified leads, and then you really trust your sales team to take those things and run with them, you actually shorten the feedback loop.

00;04;38;29 - 00;05;02;08

Unknown

And you don't have to like, wait around until you get to a contract or get to revenue or close a deal to say, hey, that worked. Now let me go try to recreate that again. So the shorter we were able to make the marketing feedback loop with confidence, the more we could continue to reinvest money into that, because all we had to do was get to qualified leads that our inside sales team said were good, and then we really trusted the process.

00;05;02;08 - 00;05;20;06

Unknown

So again, probably a little bit different of an answer. But like the best sales team possible gives you more confidence to go spend money in marketing because you're not getting that feedback like, oh, the lead suck, right? All of those things. Yeah, they suck most of the time. But like as long as we convert right X amount, we're good and we'll take that feedback with them.

00;05;20;06 - 00;05;42;12

Unknown

So I think the principle is that's how we landed there okay. Very cool. Because you have a background of scaling startups and getting them to, you know, like off the ground and scaling them into where they are sustainable through marketing. I also wanted to ask, did you always have a penchant for the numbers and digging into the actual data and the feedback, like, were you born with that as an entrepreneur?

00;05;42;14 - 00;06;01;02

Unknown

Or like, did that come through the trial and error? Or because some people have that personality and some people are like, no, I, I, they had to learn it. Yeah. So I think naturally I do like the numbers and not quite so much numbers. Guys you that I went into the right services and finance side. But growing up like it was funny.

00;06;01;02 - 00;06;28;01

Unknown

My dad and I started a business. I never knew what anything formally was. Old, reckless sales guy could create revenue and left a mess behind. Okay, cool. I'll clean up this mess and try to figure out what's working and what's not. Hence like right sales and operations of starting to find where our niche was. That was I literally was late teens or early 20s and was just like walking around behind him trying to implement a CRM and track data and figure out all of this stuff.

00;06;28;01 - 00;06;56;15

Unknown

So that was like flashing back 20 years ago. Now that was like the entrance into my desire and obviously like skill set and passion for that role. And then over time I kept refining that, like as proactively as possible. Kind of like didn't matter what the widget was. I came through supplements, alcohol, we were an organic alcohol, spine implants, all kinds of different commodities before I stumbled into real estate.

00;06;56;15 - 00;07;21;07

Unknown

And they all kind of became the same, right? It was like, track the data. Good. Share that feedback with sales team ownership, leadership teams and then make decisions based upon that, which got us much quicker traction rather than like intuition and reckless small business owners. Was like my pet peeve. Yeah, now when I had to catch traction of that, to actually do something with it was when I started to having to hold people accountable to their outcomes.

00;07;21;07 - 00;07;50;25

Unknown

I think. I think that is a natural skill set. I think like a dominant maverick, captain style personality can have an authoritative bone in their body without any data. That was not me at all. So like, I could not hold people accountable and have tough conversations without using the data. So that was a transformation in my career. When I got out of kind of just doing the things to leading people and leading teams, where I had to have data to be able to sit down and have hard conversations with people for my personality.

00;07;50;25 - 00;08;11;27

Unknown

So that was like the big switch for me to have to adapt to. Okay, I love that answer because I think that reveals a lot of things for the entrepreneur, who is a little bit more reticent to get in someone's face or to be able to hold them accountable, or to have some type of standard there. If you don't have a standard, it's hard to hold people accountable to their.

00;08;12;00 - 00;08;32;23

Unknown

And it's. Yeah, and especially if you don't have the penchant for having difficult conversations, it's very hard to have a difficult conversation if you have nothing to stand on. So I really like that. That was that was really good gold nugget here for the podcast. So then as far as this journey goes, you've become you've now you're pumping a ton of marketing dollars into the different businesses that you're doing.

00;08;32;23 - 00;09;05;29

Unknown

I do have to ask, was there ever a time where you chased deals more than profit? Always. We have an unwritten rule where like profit is always in first position, revenue and first position for us. So, you know, working alongside Eric Brewer, coming into the real estate space guy, great at driving revenue. There was dynamic that had to be created where we needed to systematize things to be able to scale them, but it was never a conversation where we said, hey, we're not going to make money.

00;09;05;29 - 00;09;20;10

Unknown

And right, we're only going to be organized and pretty. I always referenced the Titanic when we have this conversation, like with our team, and I'm like, right, that is over process without revenue. And that thing is at the bottom of the ocean. So it's like, right, you can plan as much as you want, you can be organized as possible.

00;09;20;10 - 00;09;37;16

Unknown

But like they forgot one thing to keep the ship afloat. And our rule in business always is that. And then we have tough conversations where we're like, guys like, I get it. We do want to get better. We do need to clean this up. We do need to implement this. We do need to track this. But like that comes right after the need to have which is generating revenue.

00;09;37;17 - 00;09;53;00

Unknown

And to this day, that's always our golden rule in business. Like get better over time. That's constant improvement, which is a core value of ours, but it is never in lieu of taking hits because and that's not for us. And like our bottom line and egos, that's for like preservation of doing what we say we're going to do for customers.

00;09;53;01 - 00;10;11;02

Unknown

Right. Providing stability and security for our team. Right. Cash reserves to be able to reinvest into the company. When you don't have profitability, you can't do any of that. And right, that actually is inversely a dangerous place for us to lead a business to for everybody involved. So there you go. He just gave you the answer if you're making money but feel broke.

00;10;11;03 - 00;10;28;07

Unknown

This is why you need to focus is that exact place where the profit provides all those other things. It's not just a profit of the business. It's also the the psychological effect of the owner of the team, everyone involved, and it helps you build the business you really want to. So that was and morale comes from profit also.

00;10;28;08 - 00;10;48;12

Unknown

So like right culture isn't pizza parties and you can't buy it. So like you if you want the team to feel good, like no one's going to feel great about an empty CRM and no pending deals, everyone's going to feel great about selling a deal. So that also kind of in a non placebo way. But that creates great momentum inside of organizations, which I think is critical velocity.

00;10;48;17 - 00;11;05;18

Unknown

Yeah, exactly. So as long as you're getting the deals in the door and you're converting them and you have revenue and you're protecting the profit, the net profit of the business, then you're going to you're saying that's a combination for great morale because they'll be making money. They'll see you being healthy as a business owner, and then you can keep growing together.

00;11;05;18 - 00;11;23;16

Unknown

It sounds like it's very cohesive there. Yeah, I love that morale comes from profit. I wrote that one down. Like that was good. I'm like, let's put that that's a that's going on a bumper sticker somewhere. So perfect. We speak in bumper sticker language. It's got to be simple. We do, we do we. We're also fans of the book The Road Less Stupid by Keith Cunningham.

00;11;23;16 - 00;11;42;18

Unknown

And he puts everything on a bumper sticker. So if you can put it on a bumper sticker, you're doing good. So I did want one more question around marketing, and then we'll go into like financial management and like the team over there. Do you have a simple test in your business, whether it's the real estate or helping people in the real estate world for the good ROI on the marketing dollar?

00;11;42;19 - 00;12;07;28

Unknown

Because obviously ROI is tied to the margin that you're building in your business and the margin around marketing. So I'm just wondering, how do you measure that, the ROI on your marketing and that you spend? Cool. So yeah, I think disclaimers this is like my perspective solely, which you asked for. So I'm going to isolated to that. I believe that our like rule of thumb is 0 to 90 days.

00;12;08;01 - 00;12;27;05

Unknown

The goal is to get to break even okay. So right we want what does that mean. We need three months of cash for the budget. We commit three months of allocation of that cash. And in three months we want to get to break even. So there's often a flaw I see with investors of like what Dunn looks like.

00;12;27;05 - 00;12;46;29

Unknown

So we continuously always have these conversations about like what does Dunn look like? Right. And Dunn means get break even which requires revenue. So. Right. Pay attention folks. I'm not saying get leads in 90 days. That is that is not necessarily a great outcome. We want to get to break even in 90 days. Then you're building all of that follow up, all of that pipeline, all of that funnel.

00;12;47;00 - 00;13;14;02

Unknown

So let's say we have a $5,000 a month budget. We want to essentially do one deal in 90 days. It gets us capital allocation back. Right? We built that pipeline. Proof of concept. Okay, cool. We're good. Then months 4 or 5 and six we want to get you that 3 to 1 return. And why a 3 to 1 return and not beyond is because a if it's a low budget with a high return like cold calling can skew that because, oh, I spent two grand and I made 20.

00;13;14;03 - 00;13;34;11

Unknown

It's a 10 to 1, right? That cumulatively is not a great model for scale. So like if you can get some deal flow, which is probably like more than 2 to 3, right, but not a ton, and get to a 3 to 1 return, I think it's a very viable proof of concept. Then from there we can push and we can increase and we can start to optimize and do all of those things.

00;13;34;11 - 00;13;52;23

Unknown

So that's our general framework. Now, the large disclaimer asterisks at the end of this is and any vendor out there is probably going to yell at me. There is absolutely no place in this industry to wait 90 days to see if you get leads. I have never seen a lead source that takes 90 days to create a response.

00;13;52;24 - 00;14;14;25

Unknown

Most response from marketing happens within minutes to maybe 24 hours of that minutes, meaning a TV commercial is going to be instantaneous. A PPC lead is instantaneous. Postcard might hang on the fridge for a day before they call you. Think about it, talk to their husband wife with a letter or something. Even that though within 24 hours you're going to have a large percentage of that response.

00;14;14;25 - 00;14;32;15

Unknown

So there's this weird dynamic between like, do not sit around and wait for something to happen. Hope is a terrible investor drug. We absolutely need gross leads and to talk to people to know we have a chance at making money in revenue in that 90 day period that gets us to break even. Does that kind of make sense from that perspective?

00;14;32;15 - 00;14;53;23

Unknown

I love that perspective. Quick pause from the episode. I have exciting news that's expanding the world of profit first for real estate investors. You may know that years ago I wrote the book Profit First for Real Estate Investing, endorsed by Mike McCormick, that has been read now by thousands of real estate investors. And now we're launching three workbooks, one for wholesalers, one for fixing flippers, and one for rentals.

00;14;53;24 - 00;15;30;16

Unknown

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00;15;30;16 - 00;15;55;12

Unknown

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00;15;55;12 - 00;16;11;18

Unknown

They have to be making money in order to manage it. So it's like let's get the money in the door and focus on that versus just getting the leads or contracts or whatever it might be. I really like that perspective, especially for if anyone's listening here, this is how to ramp up the right way. And I keep using that word.

00;16;11;20 - 00;16;27;04

Unknown

And I want to make sure that if you're listening to this, Benmont been in this space for a long time and is very good at getting people the results that they want, and you just have to listen. You have to listen to the formulas. You have to listen to what he's saying. You have to actually put in the work, and ultimately you want to be able to scale.

00;16;27;04 - 00;16;43;17

Unknown

So that was really good. I like that where I even like how you separate out cold calling. You might get a bigger ROI, but it's not as scalable as something that might have a smaller ROI. But you can do more deals and you can build out a team, and you can have the sales team, like you said, that you can be confident in spending those marketing dollars because they're closing the deals for you.

00;16;43;17 - 00;16;58;09

Unknown

So really good stuff and hoping is a bad drug for the real estate investor. There's your bumper sticker from that little thing. We're going to leave with a bunch of bumper sticker gold today. They're going to be like, no, do we need right? We got to create revenue. We can't be doped up on hoping, right? We need to.

00;16;58;11 - 00;17;19;27

Unknown

And that's what essentially that's what data is. It's validation to all of the good and bad emotions. So we don't create those pendulum swings inside the business. Because at the end of the day, nobody wants to be panicking. And I think that's what that gives you the ability to do. You started with asking how we spend a quarter million bucks a month in marketing or more, and it's like it comes from confidence, which is using the data and and no one's perfect at all.

00;17;19;27 - 00;17;38;09

Unknown

So it's like we spend money and bad things happen. But the data says don't do that again, right? Right. Which is okay. So whether it's a learning lesson or a result that you like, looking at that data and having good attribution and measuring that gives you the confidence to make the same decision or a different decision and oversimplifying it.

00;17;38;09 - 00;17;56;20

Unknown

That's it man. Yeah. Making those pivots or if it's having to have a difficult conversation or if it's saying, hey, this is working, how can we do more of this? So I like having like your perspective there. Which leads me into the next question here, data management. When did you know it was the right time to get someone like a CFO on your team?

00;17;56;22 - 00;18;19;11

Unknown

When when your ego gets out of the way is typically the right time? I mean, I'll speak in averages of our, sphere and ecosystem. I think most people's weak points in this business, they're great at sales, and I'm not stereotyping, but great salespeople often are not the best with with financial management in that language. I'll say, right, not not that we don't care.

00;18;19;13 - 00;18;44;24

Unknown

They're actually great at making money. So I look at it in three components. There's like the sales component of an organization, the marketing component of an organization, which you and I are kind of talking about. That's where I love. And then there's the piece that's left, which is the financial management aspect of it. And I think, frankly, if you said what's a real estate business made up of it is kind of that it's probably operations, marketing, sales and then finance management.

00;18;44;26 - 00;19;11;08

Unknown

So as we continue to grow and very transparently, we're not great at it. I came to you guys only 90 days into a new entity last time, and I was like, Richter, help! We're only 90 days in the mess. Isn't too bad yet. But we are getting better and better and better at that because it gives you again, all that that is, is data that you're in the right place, that you're you're throwing good money at good money and not chasing debt and when to.

00;19;11;09 - 00;19;30;11

Unknown

No. And how much you know to need. So that relationship for us always becomes sooner and sooner and sooner when starting up an entity. However, you'll find them very consistent with my rules. As much as I love you, I'm always get profit first, right? So like, let me get some revenue, let me get some deals going. So I have the money and the ability to do that.

00;19;30;12 - 00;19;56;19

Unknown

Again, I'm not going to change anybody sales pitch or perception out here, but it's like super squeaky clean books and a QuickBooks file. Sitting around waiting with no leads is also probably not a longevity place for an investor to be. So we traditionally try to just mass launch, get some momentum, and then parallel start implementing the critical things like financial management, QuickBooks, bookkeeping, CFO, write all of those things inside an organization pretty quickly.

00;19;56;19 - 00;20;23;13

Unknown

That usually happens at that 90 day mark for us. Well, I like how you do that because a lot of people don't do the revenue first and then they come to us. It's like, well, you're not making revenue, so there's nothing to manage. Like, what are you like, why are we on this call? So I really like your perspective of just getting those leads in the door, closing the leads, actually getting revenue in your bank account so you have something to be able to go and scale from, from there, whether it's getting the right things in place on the operations financial side or if it's pouring more into the lead.

00;20;23;13 - 00;20;40;18

Unknown

So really like that, I you did say this to me, at least at one point in the last three months or whenever we saw each other last, that you said your CFO meeting was one of their favorite meetings of the week. So number one, like, is that still the case? And number two, if it is like, why do you like those meetings with the CFO?

00;20;40;24 - 00;21;09;04

Unknown

Yeah, that's a great question. I still do love them. So don't panic. We won't have to abruptly end this deal. Walk off here I, I really enjoy that because actually, as you get better at understanding things that I'll speak for myself, like I maybe shied away from due to a lack of knowledge and experience. Okay. The conversations that we have with the CFO team, SCO so far beyond a Pal and a balance sheet again, and it's like my perception always was just like, I don't understand it.

00;21;09;04 - 00;21;25;21

Unknown

It's like weird and uncomfortable. I'll share. Yesterday, the team proposed to me that we had too much liquidity in an account. And. Right, like, humbly speaking, that it's not bajillion of dollars, but he was like, hey, this isn't best used in here. Why don't you go do something with it and propose that we take cash distributions by Friday?

00;21;25;21 - 00;21;51;17

Unknown

And I was like, that's crazy. Like I'm cool. Like a payday came from that. Conversations exist and guidance can come by somebody else having that expertise inside of there. We also routinely on our CFO calls, talk about vendor and strategic relationships of where and how people could help. We have stumbled into payroll changes and better right providers for doing things that reduce costs and increase efficiency.

00;21;51;17 - 00;22;09;22

Unknown

So my perception was wildly inaccurate for a long period of time that it was like checks balances. We're going to tell you either don't have money or you have a little bit of money. And frankly, it is like the most conversational thing where it's just like, hey, cool, where are needs at? How can I help? Hey, here's what you guys have.

00;22;09;22 - 00;22;28;28

Unknown

What can you do? We've been able to start private lending and building out some profit first accounts that are lending based, which help us help the community, help everybody. So it's just been transformational. And it's exciting because it's new growth of business for us. By just knowing more about our current business from a different departmental perspective, which I don't know for me has just been really enjoyable.

00;22;28;29 - 00;22;43;01

Unknown

Awesome. Well, I love hearing that because it sounds like you're really using that person in the way that they're meant to be used of. How can I get the most out of my business? But then how can I reinvest in the right ways? And when is it time to pay myself? And like, when is it time to do these other things in the business?

00;22;43;05 - 00;23;01;06

Unknown

So I obviously really like that. You also talked about reserves too. So how important are reserves to you? Obviously rerun the profit first system. You're a big on getting revenue in the door but also having that profit. So like where do reserves on your I just I'm very curious because I asked this over a lot of our guests here like where do you fall on the reserves.

00;23;01;06 - 00;23;16;01

Unknown

Do you not love having reserves and you want everything out on the street? Do you like having some reserves in place? Like what's your tolerance with? That's got to be a loaded question. Hey, it's like a sales pitch. Hey, are you the kind of guy that loves having no reserves and everything out on the street? Oh, you're already in here.

00;23;16;01 - 00;23;37;16

Unknown

So this is just me being curious about what you like. Hey, I have been that guy, and occasionally I still am, where it's like, okay, cool. Like, we write, we get spread thin. So I think that's just natural. So give grace to that. But, yeah, from a reserves perspective, I think depending upon the phase of growth of business, we have one year old businesses, we have three year old businesses, we have 15 year old businesses, right, that are inside of this ecosystem.

00;23;37;17 - 00;24;04;01

Unknown

And I think the maturity level depends on that. I think there's a lot of room for not focusing necessarily on reserves, but reinvesting that capital back into the company quicker when you're in, like the nuance infancy stage of just trying to get walking. But I think that at that year Mark is when we unintentionally were trying to save some money, we were like, oh, we'll just set some money aside.

00;24;04;01 - 00;24;31;16

Unknown

And what your team actually has been really cool and able to do is implementing profit, not only profit first, but switching over to like relay fee and having like the accounts build out. We've gotten depths to reserves now which I've enjoyed and meaning like our company has reserves like opex reserves, we have reserves by product line, and then we have built reserves for the owners and those have been independent to whatever we want.

00;24;31;17 - 00;24;48;00

Unknown

So I have been trying to save more over there than maybe one of the other partners is, and that's okay. But like we agreed upon the company reserves and then we just set thresholds in for the product line reserves of having opex for each product line that we have to manage. So again, that was like silly old me, right?

00;24;48;01 - 00;25;09;17

Unknown

I'm good at getting leads, not necessarily bookkeeping was learning that tax strategy is always like a fear of mine. And so I put a large emphasis on that personally inside of reserves. And then X is always the one that's like stability, like just how much money is in this business for the team if the lights got shut off and how long is our cash flow burn?

00;25;09;18 - 00;25;25;26

Unknown

We typically try to get to three months as quick as possible. Chris has been yelling at me now we hit three months and we're trying to build to six months of reserves there. So as that maturity comes, I think like all of those timelines, horizons and depth of reserves start to enhance and increase. Awesome. I also love there.

00;25;25;26 - 00;25;45;20

Unknown

It sounded like if you were paying attention and you're a profit first fan on this podcast, that he also has a nuanced profit first system set up. It's he's got partners, it's complication, he's got product lines like that, but he's simplified it for his business survival. Where are we putting the reserves? Where are we putting these things versus, you know, like where some people are just very scared about, okay.

00;25;45;22 - 00;26;00;27

Unknown

Am I doing this right, and do I put reserves there or not? For Benmont, I love how he's doing it, where it's like you've got optics reserves, he's got reserves in the tax account, he's got reserves, you know, like for different product lines for himself. It has to work for what you want to see and what you can make a decision on.

00;26;00;27 - 00;26;20;06

Unknown

So that was really cool hearing about that. And I like hearing your thoughts on the reserves as well. Yeah. And I'll quickly share something that hopefully isn't confusing for people, but like I think still sometimes like you can have a dependent upon the topic, the conversation. We like doing certain things. Our team likes traveling and going to businesses and spending time.

00;26;20;06 - 00;26;41;07

Unknown

There it is. We charge hopefully a fair value for the impact, but we incur a lot of expense. And actually by doing this, we have found that that is a low margin product line by having reserves inside of there. At the end of the day, if we say, hey, look at how much we make and how much we spend to do this, it isn't the most profitable thing in the world.

00;26;41;07 - 00;27;02;14

Unknown

And now that doesn't mean that it's bad. But like subjectively, if you don't have that data, everyone's like, oh, like, just go do more of them. And all of a sudden we're traveling around the country, right? Net profits can shrink. You know, gross revenue becomes this vanity metric that you're growing top line of. And again, transparently just keeping it 100 with everybody's we grew like 50% top line revenue at one point.

00;27;02;14 - 00;27;19;20

Unknown

And our net profit was like 10% growth. And like that doesn't feel great in proportion. And now I don't know if there's ever like, right or wrong, but what we gained was immediate awareness about that. And then if you say, hey, this product line is a lost leader because it creates other opportunity and we enjoy it and everybody likes it, I'm here for it.

00;27;19;20 - 00;27;37;07

Unknown

But like, you can't go back and say, hey, we're going to make X amount of net revenue just because we did this thing. And we learned through having profit first by product line, the ability to do that. It's almost like saying I'm great at fixing flipping, but like one's great and one's terrible. Like you need to look at them independently.

00;27;37;07 - 00;27;55;16

Unknown

So that has been a really transformational piece for us on both the deal flow side and kind of the education side of things as well. Man, I absolutely love that. If you're out there, that's a great one to go back and listen to again and again. That little snippet right there, because so many people get wrapped up in the, well, I'm making more revenue.

00;27;55;16 - 00;28;11;04

Unknown

But yes. How much does your bottom line grow? Did it grow in, in, you know, parallel with that or is it really skewed like that. Yeah, 50% top line, but only 10% bottom line. It's like, wait a second. Like you said, that's why a lot of people feel burnt out. It doesn't feel well, you don't have cash and you've got write a bunch of money in and out.

00;28;11;04 - 00;28;27;12

Unknown

And those are vulnerabilities, right? That's a this is a two year old business. So it's like I give grace to figuring it out. But I've learned over time like, yeah, it feels cool to say 50%. But like, unless I'm bragging to somebody with no context, like I would more humbly get on a CFO call and say, Chris, what's wrong?

00;28;27;12 - 00;28;43;20

Unknown

Why are we at 10% and pointing to the problem? And then that comes back to our opening line of this is how do you have confidence in doing something is use the data, go fix the problem and move on. So that's like our whole principle of running business. All well, right. We're just kind of generating revenue to keep moving on that side.

00;28;43;23 - 00;29;02;01

Unknown

Well you're running it like real business owners. You're taking a look at the numbers as they come in to say, is this really what we want to do? And will this get us to where we want to go? You're making decisions. It sounds like is this a loss leader or is this something that we shouldn't do anymore? Or we need to scale this down because it really doesn't make sense.

00;29;02;01 - 00;29;16;27

Unknown

And I like those types of decisions rather than like what you had said before. We just need to go out and do a bunch of these. And like if we just scale this up, it's like, okay, is that scaling you out though? So I love that love that you brought it back to originally, the confidence in spending that much is knowing the numbers.

00;29;16;28 - 00;29;35;10

Unknown

Also, what you said at the beginning, the sales team and really having confidence in the people that you have on that front as well too, and then making sure that you have a bottom line profit, that you're watching that constantly. One other question around the numbers, then I'm going to ask you a couple just last questions about just some advice to the real estate investing audience here.

00;29;35;11 - 00;29;55;10

Unknown

What about bookkeeping, like just knowing numbers on it like profit and loss balance sheet. How has that gone for you, like over the years that you've been in business? Has it been a sore spot? Has it been somewhere? It's like it's come around. I just want your opinion on just bookkeeping in general. Yeah, always I think I think finance is like this sacred cow thing.

00;29;55;10 - 00;30;15;15

Unknown

And I think right, like reiterating what I probably already said, transformational phases in our business. I'm going to point out and hopefully that answers the question. One is we started leading and informing the team of of our current revenue in all of our businesses, always like I'm talking in office TVs with revenue goals on them. People will respond differently, right?

00;30;15;16 - 00;30;33;12

Unknown

You read 40 X and it's like if you're playing a game and there's no scoreboard, people act differently. How do you know if you're winning or losing? Finance is the same. Maybe the most important one, because if winning and losing are the same thing, meaning like if we work on leads and all these things, but like our revenue is losing, but this says we're winning, that doesn't make sense.

00;30;33;12 - 00;31;00;02

Unknown

So I think to create fairness inside of an organization, revenue is part of it. So phase one was us bringing revenue. And sometimes that's just like gross revenue or whatever it is to show that we're on pace or off pace. That was transformational for us for one two, then was implementing meeting cadences that didn't exist around finance. Like it is probably not an appropriate place to sit in a level ten weekly meeting and talk about a balance sheet, or necessarily in depth on a no.

00;31;00;02 - 00;31;20;04

Unknown

So what does that require? Either you avoid it and then there's never dedicated time to do it, which isn't good. Or we started creating those. We do a biweekly owners meeting where all we talk about is the financial write strength of the organization. Should we be doing distributions? Do we need to do cash injections? Right? Like should we be tax preparing for these things?

00;31;20;05 - 00;31;34;26

Unknown

Should we be allocating towards retirement whatever those things are. So we created that cadence. Now they have a home which is cool. And sometimes it's five minutes of talking about life and saying, hey, we're going to do what we did last year and everything's good. Move on. Other times it's like, hey, what the heck is going on here?

00;31;35;02 - 00;31;58;23

Unknown

We just had a conversation. We're self-funding a bunch of deals and seemingly also pay attention to anybody out there. It seems like money has gotten cheaper and easier to get. As crazy as that sounds. In this market, there's a lot of people doing great hard money deals on fixing flips, and by taking down properties where like for one point and low interest, we didn't have to have million dollars worth of cash swings inside the business.

00;31;58;23 - 00;32;17;25

Unknown

So you asked about reserves earlier. That meeting said to me, we had a $600,000 swing in one week, and I was like, what the heck happened to our cash position? And it was like, well, we bought these properties. And I was like, man, for 6000 bucks, we could have $800,000 in the bank. Like, we probably should consider doing that.

00;32;17;26 - 00;32;38;19

Unknown

If these aren't same day by cells and things of that nature. So again, that financial meeting structure with the financial data allowed us to make an informed decision. That said, we may in latter part of 2026 want to change this funding strategy. So those are all the kind of things that have come from implementing both the awareness, the visibility and the meeting cadence around money.

00;32;38;23 - 00;33;00;28

Unknown

Awesome. I love that being able to have that visibility so you can really make the decisions of like, okay, for just a few thousand, do I want this much back in? And it's really that risk tolerance that people have because some people are just lying in the sand. I don't want to spend any of the interest. Well, then you're going to cap yourself on how many deals you do unless you have unlimited money, you know, like from yourself or from a source that can just fun for you all the time, like friends or family.

00;33;00;28 - 00;33;15;05

Unknown

But if not, then you can just trade that. Okay? Do I want to spend the money and get some of the cheaper money? If I'm able to go out there and partner with Ben, monitor someone like that to say, okay, how are you getting this and being a part of that, that whole world. So I absolutely love that perspective.

00;33;15;05 - 00;33;34;04

Unknown

I always like having cash in the bank versus like, yeah, I might have to spend a little bit on interest, but I'd rather have my cash. So and I think for anybody that that's like complicated for what I when I was saying sharing the numbers, if no one owns in a daily meeting like a daily huddle, even where we are on revenue or profit for the month, I think that's a fall.

00;33;34;06 - 00;33;54;24

Unknown

So I don't care if you're a team of one. If you're not waking up in the morning and spending five minutes saying in August, I am going to close X amount of revenue, you absolutely behave differently. What happens is everybody ignores it, and all of a sudden we're in. Claude and ChatGPT working on future plans for the business with zero revenue for the month.

00;33;55;01 - 00;34;18;08

Unknown

So like that is a pet peeve of mine, where those are all great, they're nice to haves, and those are the improvements to the business. But if you're not reporting with you, your spouse, yourself, your partner, your team on a routine basis, no one acts differently. And I'll tell you what to to have any remorse at the end of a month when you didn't hit revenue goal, if you didn't talk about it every day like, I'm sorry, but that's your own fault.

00;34;18;11 - 00;34;42;12

Unknown

Like you saw that coming 30 times over and didn't do anything about it. Yeah, no, that's really good. So then I guess the last question here before we go into one other thing, what would you give his advice to someone, whether it was early in their career or like whatever that you think is the most relevant right now in this marketplace for real estate investor?

00;34;42;15 - 00;35;04;22

Unknown

The best piece of advice would be, I mean, it's like one of the core principles, man. It's it's like, what are you doing today that is going to generate revenue, whether that's looking at your calendar, your activities, like if you're not doing something that creates revenue, and I'm talking direct revenue, not like the if I do the validate, if this happens, then this might happen, then I might get to revenue.

00;35;04;23 - 00;35;29;07

Unknown

Like and that's probably from my newer guys maybe where gals where that's like the most impactful is like, there is no problem in these businesses of real estate investing until you have a lead problem, because then you you have no chance at revenue at all. So like that, as simple as that. Sounds as like your day should be filled with revenue producing activities, and I don't know what else you're working on if it's not that.

00;35;29;07 - 00;35;48;05

Unknown

So anybody that isn't hitting revenue goals, I would say look at your calendar, look at the amount of activity you're putting towards creating revenue. Not right, improving a business and strategizing and doing all those other things. Yeah, it doesn't matter if you don't have money in the door. You gotta you gotta make spending, keep money, but you can't spend or keep money if you're not making it.

00;35;48;05 - 00;36;06;27

Unknown

So start got to start with the the very core of the business there, which was obviously great advice and been a whole conversation around get them money in the door and then once it's in the door, what are you doing with it to make sure you have a real business? So this has been a lot of fun. Ben, I really appreciate all that you've shared today.

00;36;06;27 - 00;36;33;03

Unknown

I have also been dropping hints at your company name throughout this podcast. So can you tell about what you do and how people can find you? And I'll throw the the banner up there too. Awesome. Yeah, well, if I either I'm upside down or my hat is. But okay, we'll go marketing real quick. Great creative lead magnet. And for anybody listening to this, if you want a free hat, Levi, on our team, we ran an ad campaign where I said, hey, DM Levi and you get a free hat, I'll keep my word on it.

00;36;33;03 - 00;37;05;04

Unknown

And he got to learn a lot about the investing space. And we use this as a great tactic and marketing tool. So don't fall into complacent marketing tactics as the tip here and anybody who may take advantage of it. I may regret this, but you can find Levi on the website and page. And if you DM, you can get a free hat ramp stemmed from us scaling our organizations, finding the best sales operations strategy to improve and do more in real estate investing.

00;37;05;04 - 00;37;24;19

Unknown

So we were able to to scale some businesses into the eight figure range to then copy and paste that into multi markets and scale those businesses to a point where props to our entire team of, you know, combined 50 people where they've done such a good job that a lot of people saw to like, hey, how did that work?

00;37;24;19 - 00;37;44;15

Unknown

Hey, you guys must have gone through this phase of business that we're in. And ramp was born to be a literally a community that helps from the building a performing sales team perspective. So. Right. You can go find somebody to help you do an org chart and process maps and all that stuff. That's not us. We are very focused on the funnel of what we talked about today.

00;37;44;15 - 00;38;00;20

Unknown

So you heard me talk a lot about get leads, focus on revenue, measure the data and like let's make money from it. Then your team comes into play. Right. Then you can find any other vendors that help with other pieces. We solely focus in either group training one on one training, any capacity to fit somebody's budget of like.

00;38;00;22 - 00;38;18;02

Unknown

What are your current challenges in generating revenue, running a good sales process so the data is accurate, enhancing skill and getting more for your money. That is like our niche. We only do it in real estate. We only focus on people. I don't care if you're trying to do one deal a month or a bajillion deals a month.

00;38;18;02 - 00;38;35;12

Unknown

We want to find where current revenue is leaking out of your sales funnel, help you improve process or skill, bring that to fruition, and then enhance it from there. And like I said, we have an amazing community. We've got almost, I want to say bunch of countries. I would take a guess. I won't guess because data is everything to me.

00;38;35;12 - 00;38;54;03

Unknown

But we've got people across the world. In our community, there's over 600 active people inside of there that are all doing the same thing. And I'm super proud of that because whether you're a VA, whether you're domestic, whether you're Latin American, like there's a community and a place where you can get answers, get support, find help of people doing the same thing as you on any skill level.

00;38;54;06 - 00;39;13;21

Unknown

So that's kind of what we do. We're very narrow in that, but also very wide. And who we work with and who we welcome into the community is anybody who's active and wants to get better. Awesome. And where can they find you? What is that? So ramp is the best place to go. I'm very accessible and super nerdy.

00;39;13;21 - 00;39;29;29

Unknown

If anybody wants to talk about things and my name is probably somewhere on here, Benmont, there's not many of them. You guys find me on Facebook, you know, shoot me a follow and just me. Like, if you have a question. I always encourage people because our community and our complete belief system is around just helping people get further ahead.

00;39;29;29 - 00;39;45;24

Unknown

So if you want to shoot me a question where I don't have to charge you for anything and I can answer it like I totally welcome those connections and getting you guys further ahead, because there will be a place when you may need us in the future from there. So check us out on our website or come shoot me a follow on social media somewhere.

00;39;45;26 - 00;40;02;29

Unknown

And I would love to connect with anybody that speaks this language or is looking to get further into this business. Cool. So if you are on YouTube, you can see it there ramp or you can go there after you're done listening to this, type that in and you can see that I 100% indoors what they're doing. You have to make money in order to keep it.

00;40;02;29 - 00;40;20;09

Unknown

If you're also sitting out there and you're like, you know what, I'm making money, but where's it all going? You could go to simple CFO. Com and we can have a conversation and take care of all the financial back end, making sure you know where your money is going and help you set up the systems. Like Ben was talking about profit first and paying yourself, making sure you know where every dollar is going.

00;40;20;10 - 00;40;37;21

Unknown

So if you need that help, you can go over to simple. Benmont, this was awesome. Thank you so much for sharing with this community and just being who you are and helping people get ramped up in the real estate business and getting them to that 0 to 90 very quickly to actually getting revenue in the door. So thank you again for being on.

00;40;37;27 - 00;40;51;22

Unknown

It's been a pleasure man. Thanks so much. That's it for today's show. Be sure to subscribe, review and share this episode. If you're serious about financial systems and keeping more of your profit, visit simplecfo.com to take your free discovery call today.