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What You Need To Know Before Investing In Real Estate With Joe McCall

Episode 173: What You Need To Know Before Investing In Real Estate With Joe McCall

 

The Profit First REI Podcast

April 17,  2023

David Richter 

 

For today’s episode of Profit First for REI, Joe McCall joined us to share his journey to financial freedom. 

 

Joe is a down-to-earth Real Estate Guru that cares for people by helping them to make sure that everyone can make money in real estate investing. He is also helping people to improve their lives and reach ultimate financial freedom!

 

Listen as we share Joe’s story, from financial dependence to financial freedom, and how Profit First helped him get out of that!

 

Key Takeaways:

 

[0:55] Introducing Joe McCall

[2:33] More of Joe Before Getting Into Real Estate Investing!

[8:32] Struggles When He Is Starting His Investing Journey

[17:27] How He Used His First Paycheck From a Deal

[21:00] Trying Different Lease Options

[23:25] Reading The Books, “Pumpkin Plan” and “Profit First”

[34:52] Joe’s Advice to Real Estate Investors

[37:03] Connect with Joe McCall

 

Quotes:

 

[11:45] “When you get into real estate, it’s different because you deal with people.”

[20:15] “It’s important to understand to keep your expenses low to take on as little debt as possible.”

[22:19] “I guess I’m the case study of how to do things wrong, but not quit, not give up and learn the right ways to do it.”



Connect with Joe:

 

Website: https://joemccall.com/ 

 

Tired of living deal to deal? 

If you are a real estate investor or business owner 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 I 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



Transcription:

 

Joe McCall:

<affirmative>, when you get into real estate, it’s different man, cuz you’re now, you’re dealing with people. There is no deal is ever the same, right? No seller is ever the same. There’s always gonna be things that come up. You can’t dot all your I and cross all your T’s like you could in college or looking in engineering, right? You can’t have answers to all of your what ifs.

Outro:

If you’re a real estate investor who’s sick and tired of living, deal to deal, then welcome home. Hear from everyday real estate investors just like you, and discover how they’ve completely transformed their business by taking a profit First approach. This is the profit first for REI podcast, where we believe revenue is vanity. Profit is sanity. It’s time to start making profit a habit in your business. So here’s your host, David Richter.

David Richter:

We have Joe McCall on this episode. We talked to him about a hundred episodes ago about how he had a huge tax burden and how Profit First helped get it out. We only talk about that a little bit at the end, but we talk about his story going from a lack of freedom, feeling the cash crunch with his first few properties, almost going bankrupt and losing everything to being able to get out of that. And with the few things that helped him turn it completely around and how he’s helping today, just make sure that you know that you can make the money in real estate investing no matter what. He is a marketing genius as well too. Just follow him, follow him around. But I know you’re going to get a lot of value from this episode on the Profit First side and just as a business owner. Thank you so much again for listening. Hey, this is David Richter with the Prophet first REI podcast with the Joe McCall here. Really excited to have him back on. He was on an episode in the early days, but if you haven’t, if you’ve been listening for any length of time, it might be like a hundred episodes before, but Joe’s done a lot in real estate. I mean, if you haven’t heard of Joe McCall, you might be living under a rock. I feel like at this point, <laugh>, if you’re in the real estate investing world. But if you are one of those people who will make sure you know him and what he does, he helps a ton of people, has done a ton of deals himself. But Joe, thanks for being on the show.

Joe McCall:

Well, thank you David. Glad to be here, man.

David Richter:

Well, another reason he’s back too is if you’ve read Profit First for real estate investing, his story’s in there, just a little snippet of it, of the tax sides of which he talks about in the first podcast recording. So we might even go down that road again. But I want to get just a little bit in case people don’t know what you’re doing, what you’re about, can you give them just a couple minute overview of like, who is Joe McCall?

Joe McCall:

Yeah, so I have been investing in real estate full-time since 2009. I was a civil engineer by training, kind of working for a big electrical contractor, building a lot of power plants and traveling a lot. Didn’t like, I mean, I liked my job, but I didn’t like the lack of freedom. I, you know, I was kind of at their control doing whatever they wanted me to do. And I was always, I felt like I was stuck on a treadmill. So I started getting interested in real estate, started buying a lot of courses. I joke around, I was a professional student for three years buying course after course after course, and overanalyzing everything. Um, so I started, my back was against the wall. We were hemorrhaging cash. I had a bunch of properties and the market was crashing and I needed to figure out a way to make money. I thought I had equity, but you know, you can’t eat equities,

David Richter:

Right?

Joe McCall:

As they say, equity doesn’t pay the bills. So I was just in a really serious cash flow crunch. I knew I had to learn wholesaling and I always kind of, back then in 2008, seven and eight, I looked down on wholesalers. I looked down on wholesalers, okay. Because they’re kind of the bottom of the ladder. You know, they’re not real serious investors. So I didn’t wanna be a wholesaler. I wanted to be a more sophisticated investor. I knew I needed to figure something out. And, um, so I said, all right, I’m gonna do this. And then I started wholesaling. So I bought one more course and I bought tons and tons of courses. And I said, but I’m just not gonna change anything. I’m gonna do exactly what the guy says to do. I’m not gonna change anything. And then I started, even though I didn’t like it, the guy, I kind of liked him, but I didn’t like, I thought his postcard was too ugly. I thought he’s sending it to a list that everybody is already sending to. I didn’t like his script. I didn’t like his contract. I didn’t like the way he did. Cause I thought, this is Sue too easy. He’s charging way too much for this course. But I kept having to go back and say, all right, I’m just gonna do what he says. I’m not gonna change anything. And well then guess what? Sure enough, I did a deal and uh, my first deal, I made about 12 grand on it. Yes, it was a property about 30 minutes outside of the city in St. Louis at the time. So it was way out there in the sticks and it worked. And I couldn’t believe it. Like for the first time I had actually implemented something that I bought from a course and it actually worked. I couldn’t believe it. And so then I was, I was hooked. I started doing a lot of wholesaling at that time. And then a few years later, um, was able to quit my job.

David Richter:

Awesome. And you’re into, you’ve done a lot of stuff in the real estate world. We’ll go down that road. I wanna focus on one thing. You said you got into a cash crunch, you know, like with your rentals and stuff, was that now you were a professional student too, so like you <laugh> three years as a professional student. So did you start buying, well then,

Joe McCall:

Yeah

David Richter:

You know, stuff while you were studying and like, how many, did you have a portfolio of like 10 properties, 20? Like how much did you have at that point?

Joe McCall:

Well, okay, that’s a good question cuz I was a professional student, but I was buying houses with traditional bank mortgage. I was going out and getting a mortgage and then putting a tenant buyer in the house. So I had very little equity

David Richter:

Yeah.

Joe McCall:

In the deal, very little cash flow. I thought a hundred, $200 a month was enough, right? That would pay, get a hundred, $200 a month. The cash flow, let’s see, I only need 200 of those to be able to quit my job. But that’s what I thought you had to do.

David Richter:

Yeah.

Joe McCall:

And I wasn’t setting aside any of that money for future vacancies, maintenance repairs. And so all of a sudden when the market crashed, we had a bunch of vacancies. I had, um, serious cash flow crunch and I had also bought a lot of properties at the time. Um, I had, uh, maybe five or six subject twos I was taking over existing mortgages.

David Richter:

Okay.

Joe McCall:

And then, um, again, I didn’t have much equity in those and I was, I borrowed some of my profits early from private lenders in those deals. Now, the property that I owed total from the original mortgage and my private investors, I owed more than the house was worth. And my payments to cover that mortgage when it was vacant was really hard to do. And you know, remember when you’re taking over somebody’s mortgage, you’re promising to make their mortgage payment.

David Richter:

Yeah.

Joe McCall:

And if you don’t make their mortgage payment, they’re gonna get a 30 day late on their credit, which is go is really bad. And so I had, I don’t know, six or seven subject twos at the time. I never did miss one mortgage payment of a sellers, but it got really close.

David Richter:

Okay.

Joe McCall:

And these sellers were getting calls from the bank saying, Hey, it’s day 15. You’ve not made any payments yet. What’s going on? And so then the sellers would call me and don’t worry about it. I got it. I’ll, and then I’ll pay the late fees or whatever. And so all of a sudden I got to the point where I had to either make my own mortgage payment or make these sellers mortgage payments. So I started making their payments and I started working harder to try to make up. And then my house got in into a foreclosure in a short sale situation. So this is where I was in a serious cash crunch. You know, I,

David Richter:

Yeah.

Joe McCall:

Any equity that I had was disappearing. The houses were falling. I didn’t buy any of these properties the smart way. I was counting on appreciation, I was counting on nothing to go wrong. I had only one exit strategy. And, um, I realized later that you make your profit when you buy, not when you sell. So anyway, I had a ton of courses. I knew I needed to learn wholesaling. Finally, it was Chris Chico, I think you know Chris Chico?

David Richter:

Yeah, yeah, I know Chris.

Joe McCall:

He had a course at the time called Absentee Owner Profits. And I bought it and, um, started doing what he said to do and did a deal. And then I started doing more and more deals.

David Richter:

So then, okay, you’re a professional student. At that point, was it that the people you were learning from just weren’t teaching you? Were they just teaching you how to get that house? Like the way that you were doing it? Or like, you know, or where do you think that the connection failed of, okay, I’m gonna buy this house, I’m gonna get the cash flow, or was it just that I bought these at the wrong time because we had the worst, you know, the worst real estate market in the history of

Joe McCall:

Yeah.

David Richter:

You know, the US market or whatever? Well,

Joe McCall:

It was a kind of combination of all the above.

David Richter:

Okay.

Joe McCall:

What I mean is, like, I spent, and this was maybe before I started buying houses, I bought a coaching program for like 13 grand and I put it on about three different credit cards

David Richter:

Wow.

Joe McCall:

With my wife and I made the decision together.

David Richter:

Yeah.

Joe McCall:

I remember going through the course and just thinking, this is so stupid. Like, and here I am, like I know better, but this is so dumb. I don’t like what they’re telling me to do. They’re making me put, they’re pushing me outta my comfort zone.

David Richter:

Mm.

Joe McCall:

Um, they’re trying to get me to, you know, call realtors to make low ball offers to sellers. Um, there’s gotta be a better way to do this. And so I never did anything with that program. And looking back at the time, I was actually kind of blaming them for giving me a program. And I thought it was outdated information. It was too simple. You could get this for free from a book. And this is funny because people are still saying that today you could get it for free from a YouTube video. You can get it free from a podcast. This is too simple. So, and then I, you know, what would, I’d just go buy another course, buy another book, buy another program, go to another bootcamp. And so, and then all of a sudden I had a ton of courses and I was never doing what any one of them was saying to do. Like, I would take a little bit of this guy and a little bit of this gal and I would try, you know, I would mix and match their stuff. And then I just was never sticking to one thing. I was chasing short sales for a little while, then I was chasing fix and flip by, you know, re uh, fix and flip rehabs, then lease options, and then wholesaling a little bit. And I was all over the place. And really the houses I were buying, I was buying them all wrong. Bought maybe 12 of them.

David Richter:

Yeah.

Joe McCall:

And so I guess you could say I was taking some action, but I was always in this search for the next secret, the next magic pill.

David Richter:

Yeah.

Joe McCall:

The next, uh, little shiny object and not just sticking to one thing and mastering that.

David Richter:

No, that makes sense. So was that a product of like, the habits from the past? Did you have that a lot? Or was that, did that show up when you started to buy houses and like becoming an entrepreneur or, you know, I’m thinking of you as like the engineer, you know, and analysis paralysis. Like you had, you went out there and actually took action too. So there’s like a lot of different things where it’s like, where did, yeah. Where did that go?

Joe McCall:

Yeah, Well, here’s the problem that I think I had, and maybe a lot of people can relate because I have engineering back background. And so like, I like to, we were building large power plants and, and a lot of different projects. And you get a big stack of plans, blueprints, and you get a big, um, spec manual. And like you can see from beginning to end how everything’s gonna work. You see the underground utilities, you see the foundations, you see the steel structure. You see how, um, all of the exterior elements come in where the windows go. And then, you know, once inside you see all of the, uh, the m e p like the mechanical, electrical, plumbing and where all that goes. And, uh, you see how the interior finishes work and where the equipment. And so like you can see from beginning to end where it all is going to be. And like when you’re taking math in college and calculus, you know, there’s one problem and one solution and one way to get to that problem. There’s always this simple formula. It’s always black or white.

David Richter:

Yeah.

Joe McCall:

This is, these are the steps to get there. Now, when you get into real estate or any small business for that matter, it’s different man. Cuz you’re, now you’re dealing with people, there is no deal is ever the same,

David Richter:

Right

Joe McCall:

No seller is ever the same. There’s always gonna be things that come up. You can’t dot all your I and cross all your t’s like you could in college or looking in in engineering. Right. You can’t have answers to all of your what ifs. So that’s where I struggled. I was like, well, I can’t take action on this because what if this happens? What if that happens? And I had all these Yeah. Buts and these doubts and, um, it just got really frustrating for me, um, because I was stuck in a paralysis of analysis. I wanted to understand how step seven and eight worked before doing steps one and two.

David Richter:

Yeah.

Joe McCall:

Does that make sense?

David Richter:

Yeah, It makes a ton of sense. I think a lot of people get stuck there as well too, of just like, okay, I wanna know the whole process. Like just do the work. You know, like go.

Joe McCall:

So yeah. It wasn’t until I said, all right, I’m gonna trust the system. I’m gonna trust what Chris Chico says to do.

David Richter:

Yeah.

Joe McCall:

And I just did it. And I sent out his postcards to his lists. I made his offers. I used his one page contract. And sure enough, dang it worked. And I just, I was shocked. I remember so clearly how nervous I was like, oh my gosh, this actually worked. Now what do I do?, And so I started like, uh, I couldn’t just trust the system even then.

David Richter:

Yeah.

Joe McCall:

Just do what Chris said to do

David Richter:

<laugh>.

Joe McCall:

I had, I bought, I opened up about five or six other courses that I had, and I looked at all of their, uh, contracts and I pulled together like 20 different contingencies from all these other courses and put them all onto this one contract. Um, you know, I had so many contingencies in there, I must have canceled them out. And finally though, I spent hours pouring over this simple, simple contract. Um, I gave the seller earnest money in cash when she signed the contract, gave it to her in cash. You never do that. You gave it to the title company. Right. And, uh, I was so nervous. Um, and I was, she was elderly. So I made sure that she had her son with her when we signed the contract. Cause I didn’t wanna be accused of taking advantage of an old lady. And, um, she had been begging me to make an offer on her home. I pulled a number out of my butt and she said, yeah, fine. And now I’m freaking out. The son says, dude, yeah, it’s fine with me. No big deal, man. And then she signs the contract without even reading it. And I was nervous trying to, thinking that I had to explain to her every single sentence in that contract. And what did I, and I had to have an answer for everything. She just signed it. Now I’m freaking out. Like, what am I gonna do? Um, I thought whole wholesaling must be illegal. It can’t be this easy. So, um, I stuck a sign in the yard, had tons of people calling me. I bumped the price up 15 grand and it was a three family. And, uh, I had a ton of people start calling me from the sign. And then the first one that I talked to was a realtor. And I thought, oh no, it’s a realtor. He’s gonna, he’s gonna mess up this whole deal. And, uh, I said to the realtor, listen, I gotta be honest with you, um, I don’t own this house yet. I just have it under contract. I think it was for like 50 and I was trying to sell it for 65.

David Richter:

Yeah.

Joe McCall:

I have it under contract for 50 and I don’t know what I’m doing, but like, I don’t own it yet. I hope it’s okay. And the guy’s like, yeah, no big deal. Don’t worry about it. My client wants to buy it. I said, well, I can’t. How do the realtor commissions work? How do you get paid? And, well, I don’t own it yet. How does this work? He said, don’t worry about it. We’ll just do it as a cash transaction. He said, well, I don’t have a title company. How am I? He said, oh, well just use mine. So I said, okay. So he gave me the name and number to his title company in that little small town. And you know, I, so I called that title company up and I said, Hey, um, I just wanted you to know right up front, I don’t want any surprises. I don’t own this property. I’m a wholesaler. I have it under contract for 50. I wanna sell it for 65. I hope that’s okay. And they’re like, relax dude, this is fine.

David Richter:

<laugh>,

Joe McCall:

It’s a cash transaction. No, it’s not a big deal. And so at the end of the day, I got a check for like 12 and a half thousand dollars, 12,500 and something. And changed.

David Richter:

Yeah.

Joe McCall:

And I never went to go look at that property. I didn’t even put a sign in the yard. I had a friend do it. Um, I met the lady, the seller at a Y M C A, a local Y M C A where I knew she knew where it was. And um, yeah, I couldn’t believe it. I sold it, made 12,000 something in change. And, um, I became a believer in this business at that point that even though I had done deals before, they were like, they weren’t good deals. They were bad deal. And I didn’t listen to my coaches and the people who wrote the books and bought the courses from, I didn’t do exactly what they said to do

David Richter:

<laugh>. It still worked out. I love that. And that you’re able, everyone starts somewhere. So there, there was Joe, I could just picture you like, ah, is this, is this, uh, with the title company? Uh, is this okay? You know, like

Joe McCall:

Yeah.

David Richter:

Yeah. That’s great. I absolutely love that image cuz like now I know Joe years later and like the hundreds of people who’s helped, maybe even thousands at this point in like all the different deals that he’s done. And then we all start somewhere. So if you’re listening to this, you could start somewhere. Let me ask you, since the pro first REI podcast, what did you do with that 12,500? Do you remember?

Joe McCall:

Well, at the time I spent it all. I’m sure I didn’t. Yeah.

David Richter:

Yeah.

Joe McCall:

That was back in 2008.

David Richter:

And that was, did that cover some of the mortgages at that point? Cuz you had said like, Hey, we’re, did that cover your mortgage? Like,

Joe McCall:

That’s a good question.

David Richter:

Do you remember what that first check went to?

Joe McCall:

That’s a good question. I don’t remember, to be honest. You know, probably went back into some marketing, um,

David Richter:

marketing yeah

Joe McCall:

And, probably I, you know, at any, there was a period of two or three years where I owed so many people, so much money and I was behind on everything.

David Richter:

Oh, okay.

Joe McCall:

That any money I did make, I’d go to pay off some debts, some bills, student loan payments. Uh,

David Richter:

Was that all during this time? So you make that 12 five and you’re just trying to dig yourself out for the next few years it sounds like.

Joe McCall:

Yeah. The, my period of trial and tribulation was, uh, 2007 and eight when the market started.

David Richter:

Yeah.

Joe McCall:

Crashing, um, to 2011.

David Richter:

Okay.

Joe McCall:

Right during that window. Um, yeah, I had to, I never did miss a mortgage payment on my subject twos.

David Richter:

Yeah.

Joe McCall:

So I’m proud of that. And I paid all my private lenders back, every single penny. Really proud of that because I had borrowed, I mean, at the t knowing some knowing what some people these days borrow, I, um, I was, I had only borrowed maybe 75, 80 grand from private investors

David Richter:

Okay.

Joe McCall:

Over, um, five or six deals. Okay. But I paid them all back. And at the time that, that could have been $800,000, it was a lot of money.

David Richter:

Right.

Joe McCall:

And, uh, I didn’t have, there was no more equity in these houses. They were all upside down.

David Richter:

Yeah.

Joe McCall:

Um, I was getting threatening letters from attorneys and, you know, sellers and from attorneys of sellers and investors and tenant buyers that were threatening to sue me. Um, but I was able to, like some of the houses, I just deeded them back to the owners.

David Richter:

Yeah.

Joe McCall:

Um, but I gave them a tenant that was paying rent. So I just told the owners, listen, I can’t make next month’s mortgage payment, so I’m gonna deed the house back to you with a quick claim deed. I’m sorry, here’s the tenant. And the tenant is just gonna send you the rent to you next month. Um, and they’re like, okay. They weren’t mad. I thought they were gonna be really mad at me, but my private investors, I kept on, I had to have those uncomfortable conversations so many times. It was really hard.

David Richter:

Yeah.

Joe McCall:

Sorry, I can’t pay you, but I will. Um, I remember one time my, uh, dispositions manager <laugh>, this is such a disaster. Um, I won’t go into all the details, but like, I had to come up with only like 12 or $15,000. And again, that time, that could have been $150,000.

David Richter:

Yeah.

Joe McCall:

I had to come up with $15,000 to pay back this private investor, or the private investor was gonna sue me, and the seller was gonna sue me. And, um, I was so my dispositions manager who, um, I dunno at the time wasn’t making that much money. She lent me like that money and I was able to get out of that and then pay her back. So anyway, at the end of the day, um, I learned the importance of cash flow.

David Richter:

Yeah.

Joe McCall:

Like, uh, it’s important to understand and to keep your expenses low, to take on as little debt as possible. And, uh, this is why, um, at the time I remember saying, I don’t want to own another deed ever again. I never want to be responsible for a mortgage payment.

David Richter:

Yeah.

Joe McCall:

On my investment properties. Um, no, I have had some mortgage payments since then, but what I started doing was wholesaling and then I started wholesaling lease options. I started getting, you know, lease options where you control a property without owning it. And I got really interested in that. Like, how can I, how can I get the same benefits of owning a rental property without owning it?

David Richter:

Yeah.

Joe McCall:

Just controlling it. So I started doing a lot of lease options at that point. Um, and this, so then when I started flipping lease options, like what I call wholesaling lease options, I was able to quit my job in the spring of 2009.

David Richter:

Okay. So that helped you, I’m assuming that helped you during those dark times. Cuz you said up to 2011

Joe McCall:

yeah

David Richter:

was just basically <laugh>.

Joe McCall:

So I still had another two years of digging me

David Richter:

Yeah.

Joe McCall:

Digging out of a hole. But now I had more time to do it. Okay. Because now I didn’t have a full-time job, you know, I was working 50, 60 hours a week back.

David Richter:

Yeah.

Joe McCall:

But I was wholesaling, um, these lease options and making more money doing that part-time than I was in my full-time job. So

David Richter:

Then you were like, see ya. Like, I’m gonna do

Joe McCall:

Yeah.

David Richter:

Full-time.

Joe McCall:

But then, you know, also, I made so many mistakes. I mean, God’s been really helpful and good to me. Um, like I didn’t even think about insurance. So my insurance home ins, uh, health insurance costs, you know, doubled.

David Richter:

Oh, wow.

Joe McCall:

And then it was also hard to get. So there were a lot of these little things. And then I, you don’t realize this, but um, and we’ve talked about this in the last one, taxes. Like when I was working for an employer, um, you, uh, they take your taxes out every, every two weeks and usually you get a refund at the end of the year.

David Richter:

Yeah.

Joe McCall:

Um, and so when you’re now working for yourself, you have to set aside that money. So eventually that cut up with me too. But, um, yeah, I, you know, I’m, I guess I’m the case study of how to do things wrong. <laugh> but not quit, not give up and learn the right ways to do it.

David Richter:

Yeah.

Joe McCall:

And so now maybe I’ve, I can help other people.

David Richter:

Right, exactly. You actually took that and did probably the best thing possible you could do is number one, stick with it. And then number two, help people avoid that and be, you know, and really help them in their life and their journey. Let me ask this, so you’re on that 2009 to 2011, kinda like just a, not the greatest period of time. When did it click or when did you read um, pumpkin plan? Because I remember from the

Joe McCall:

Yeah

David Richter:

First one that was the one that kind of changed the mindset. Was that the first book that kind of helped you with the business aspect of real estate? Or like what was the, what made it go from I’m doing these deals and I’m get, and I’m paying all this off to where now I can actually focus on making my business better?

Joe McCall:

I think pumpkin plan, I read that in 2012. So

David Richter:

Okay.

Joe McCall:

I quit my job for after a couple, three years.

David Richter:

Yeah.

Joe McCall:

And, um, I needed, I felt like I was still trying to be a jack of all trades and a master of none I was doing, I was doing well.

David Richter:

Yeah.

Joe McCall:

But I really felt like I needed to focus. I remember the one thing came out about that time.

David Richter:

Okay.

Joe McCall:

The book, the one thing from Gary, Gary Keller. And yeah. And I started reading that and I had a hard time finishing it for some reason. Not that it’s a bad book. I just had a hard time finishing it. And then the pumpkin plan, somebody said, Hey, this is like the one thing, but it’s better. So I read it and I, I’ve really liked it because he talked about, um, and I haven’t looked at it in a while, but there’s three consent, there’s three circles, you know, so if you wanna find your, um, your best business, like the one thing you should be focusing on, it’s a combination of these three things. I think it’s your best customer. So knowing who your best customer is. Second thing is, do you have something that can be automated and repeated like a system?

David Richter:

Yeah.

Joe McCall:

Do you have a repeatable system? And then the third thing I think was, um, is a high profit, you know, does, so if you have the combination of your best customer, you, and it’s something that you, somebody that you like working with, it’s repeatable and it’s high profit. Or maybe the third thing is it’s something you really love to do, you’re passionate about, I forget. But, uh, when it’s a combination of those three things. And so I looked at the different businesses that I was doing and, um, at the time in 20 12, 20 13, the market started rebounding a little bit and um, a lot of money was coming back into the market.

David Richter:

Okay.

Joe McCall:

A lot of investors were starting to buy houses. And, um, so I saw all this cash coming into the market and um, so I thought, and I got kind of tired of doing lease options at the time. I wanted to do something different. So I started doing a lot more cash wholesaling again. At that point, I wish I would’ve started buying houses and holding onto them. But, um, I was still afraid of taking on any deeds I wanted a quick nickel rather than a slow dime. So, um, I changed kind of my strategy and started focusing on finding the buyers first cuz they were my best customers. I realized from reading the pumpkin plan, my best customer is the guy with the money or the gal, the lady, the company with the money. They’re my customers. Not the sellers that I was trying to go after. The buyers with the money were my customers. And then, uh, so we started, stopped all of our marketing for sellers and started marketing for buyers, cash buyers. And they were easy to find. We, they were already buying properties outside of St. Louis and other markets. And then, um, we started then getting other people to bring us their deals. Other wholesalers would, we became known in the area as the best the buyers with the money. Um, so we started just networking with every realtor, property manager wholesaler in the market and saying, Hey, give us your deals. We’ve got money, we’re looking for deals right now. So people started bringing us their deals and then we would then turn around and flip them to our buyers and, um, became a lot easier because, um, it was just so much easier. We’ve got the buyers with money, other people have the deals, they bring ’em to us and we’re in the middle and we wholesale ’em. Um, so that book helped me because I was doing like, again, I said three or four different things, different strategies.

David Richter:

Yeah.

Joe McCall:

And it helped me really focus on my giant pumpkin. And at the time my giant pumpkin was wholesaling deals to cash buyers. Um, and when I started focusing on that, we went from doing couple deals, three, four deals a month to doing three or four deals a week.

David Richter:

Yeah, that’s great. Cuz then it sounds like starting to become a real business. You know, that’s repeat

Joe McCall:

Right

David Richter:

About that and you’re focusing on that. Is that, and then that’s probably what got you into Profit first too. Correct. Like, you had already been a fan of Mike Macau, it’s cuz he wrote Pumpkin Plan, but then read Profit.

Joe McCall:

Yeah. You know, so what’s funny is I read, uh, profit First shortly after that, but I didn’t finish it.

David Richter:

Mm-hmm. <affirmative>,

Joe McCall:

I don’t remember why. Not that it was bad. I just, maybe I have a bad habit of not finishing books.

David Richter:

<laugh>

Joe McCall:

And I, well, I thought, I get it. I know it. I’ll do that. That’s a good idea.

David Richter:

Yeah.

Joe McCall:

But I didn’t do anything with it. And then until it was, you know, a few years probably after that um, when I, all of a sudden now I’m making a lot of money and I’m not paying my taxes and I’m filing my taxes late. And we talked about this in the last episode

David Richter:

mm-hmm. <affirmative>

Joe McCall:

That I did with you. And, uh, all of a sudden I got this huge tax bill. I’m like, oh crap. And after I’d filed two extensions, so I, here I am in late summer, right,

David Richter:

right.

Joe McCall:

And, uh, I owe 60 grand to the irs. Like, oh shoot, so what do I do now? Well, I start paying off those old taxes, but I’m not setting aside any money for my new taxes. So then the next tax bill comes around and I file a couple, three extensions,

David Richter:

<laugh>,

Joe McCall:

You know, and, uh, that’s just a mess, you know. And then I’d give my shoebox of receipts to my accountant at the end of the year, figure this out. Um, and dang it, I owe another a hundred thousand dollars in new taxes. And so it just, I kept on, I was making a lot of money, but I wasn’t taking, I wasn’t writing enough off. I didn’t because I wasn’t buying houses either at the time. I was just wholesaling them.

David Richter:

Yep.

Joe McCall:

So I didn’t have any write-offs. I ran out of all the write-offs that I had from my losses before, from before. We’ve adopted four kids. So we ran out of, we had, there’s adoption tax credits we ran out of those. So yeah, now I gotta start paying taxes. Um, and that kept on snowballing until, um, I forget the year. But, um, you know, I got a, I’d been kind of working with the I R S I was getting a bunch of letters. Um, I was on these plans, these payment plans, um, and I was keeping up with them for the most part. I might miss a month here or there. Um, but then I wasn’t setting aside any money for new taxes that were gonna be coming next year. And I kept on getting into a bigger and bigger hole. And then the penalties, the interest, I just kept on compounding a bigger, I owe the IRS about 520 grand.

David Richter:

Whoa.

Joe McCall:

And I had liens on my, on everything. And, um, it really had affected my credit. Now, um, I, you know, I wanted to buy a house and I couldn’t cuz of these federal tax and stuff like that. Um, so finally I got serious about it and I picked up the book again, prophet first I picked it up again. And this time I said, all right, I’m just gonna do what the guy says to do. I guess I have this problem,

David Richter:

<laugh>,

Joe McCall:

this is,

David Richter:

it’s recurring. Yeah.

Joe McCall:

I’m just gonna do what he says to do. I’m gonna stop questioning it, I’m gonna do it. And then I, um, I hired, uh, an assistant who was gonna also be my bookkeeper. And I just told her, your number one job is to implement profit first.

David Richter:

Yeah.

Joe McCall:

For me. And, um, I said, I don’t know how it works if I try to get into the weeds and try because it’s not my strength, it’s not my

David Richter:

Right.

Joe McCall:

I became smart enough I think, to figure out, I need to find somebody else who’s good at this. Let them do it for me. And, uh, I can focus on how to make money cuz I’m good at that. I can make money. I’m not good at saving the money, paying taxes and all of that stuff.

David Richter:

Right.

Joe McCall:

So she took it and, um, did really well. She, and then the irs, I had a good come to Jesus meeting with them and, uh, they scared the living JIS outta me. And, uh, basically said, you know, we could send you to jail. We could take your house, put your everything, sell it, put your family on the street. Um, you need to start taking this seriously. And I said, yes sir. <laugh>, yes sir. Um, and uh, they said, listen, stop, don’t worry about your previous taxes. Get current on your current taxes. And so I did within a few months, maybe four months, maybe more, four to six months, I got current on my current taxes, started filing them quarterly and, um, put myself on payroll. So I’m starting to get a paycheck every two weeks. And, um, they were taken, I set up the payroll where they were taking the taxes every two weeks.

David Richter:

Okay.

Joe McCall:

Out of my check.

David Richter:

Yeah.

Joe McCall:

In the past I’d just been doing owner draws.

David Richter:

Yeah.

Joe McCall:

Um, so now they’re taking the taxes out and then I’m setting aside a little bit every, every two weeks as well for my quarterly taxes.

David Richter:

Yeah.

Joe McCall:

So that’s taken care of. And then I, then they put me on an installment plan to pay off my old taxes. And it would’ve taken me about 10 years on this plan that they had. And I was like, this too depressing. I can’t do this for 10 years. So I just started paying triple four times what I was supposed minimum

David Richter:

O sure

Joe McCall:

And when I’d have, you know, a, when I make a lot of money or something, did a big deal, I would pour more money into that to pay it off. And, um, yeah, it was a couple years it took me to pay all of that off. It the plan that I was on was like, I don’t remember 10 years, but man, what a relief. Right. And once that was paid off, I was able to get a mortgage and buy a really nice house. And, uh, dang. <laugh>.

David Richter:

Yeah. <laugh>.

Joe McCall:

I would, I’ve never met Mike Mcz, but I’d love to meet him someday. And, uh, his those two books were some of the biggest influences in my business. Um, uh, understanding the power of focus, focusing on your giant pumpkin, cuz we all have one. And, uh, there’s what do I always say there, um, focus will make you rich.

David Richter:

Mm-hmm.

Joe McCall:

Right. Focus will make you rich. So when you focus on that one thing, your giant pumpkin, you will start having success.

David Richter:

Yeah.

Joe McCall:

You will start doing, you will start making my money. But then when you start making money, what do you do with it?

David Richter:

<laugh>,

Joe McCall:

Right?

David Richter:

<laugh> right.

Joe McCall:

You’ve got to know your numbers, you need to manage your numbers, you need to, um, get somebody else to do it because, you know, some of us think that, well, I can do it or I can learn how to do it. I don’t wanna spend the money on a bookkeeper or an accountant. I can do it myself. Man. That’s the recipe for disaster,

David Richter:

Right

Joe McCall:

Like when you can’t do everything, you’ve got to get somebody who can, who’s better at it than you are, who is not involved in the emotions of everything that’s going on, could look at it from an outside perspective and have a better view of it and just give them the authority to do it. Tell them, all right here, read this book, go implement it. Or there’s companies you can hire like yours that can do it for them. Right. So

David Richter:

Yep.

Joe McCall:

Just stop asking how do I do it? And just ask who, who can I get to do it? And that’s finally when things started turning around for me.

David Richter:

Yeah. So it sounds like what a journey there of going

Joe McCall:

Yeah

David Richter:

Through lots of different learning points from, you know, the cash crunch at the beginning to then focusing on, you know, the wholesaling lease option. But you’re still focused on several things but then finding the pumpkin plan and like focusing on what you’re really good at. And then I like how you said like your best customers were your buyers at that point. Just fulfilling their orders, really honing in and then making sure if I’m gonna make all this money I need to make sure that the tax people don’t come knocking on my door anymore. So like getting that outta the way. So yeah, that’s a incredible journey. I’m really glad you were able to share your story here. One, just one, two last questions. One, the before I ended and you know, where do people go for you, but is there any, if someone was going to implement profit first or do that, what would be your biggest advice for them? You know, like, I know you said use someone else, but like is there anything else that you wanna get out there? If someone was going to actually implement it?

Joe McCall:

Uh, well you gotta read the book, that’s number one. But then read it all the way through to and then, uh, just implement it. Stop asking what if, start asking what next? And for me something like that’s really important. I’m too busy to worry about it. I am not good at saving money. I’m good at making money.

David Richter:

Yeah.

Joe McCall:

Um, I’m not good at managing my expenses. I’m not good at counting calories for my diet. Like there’s certain things I’m just not good at, but I am good at making money so I can hire people to do that stuff for me. Right.

David Richter:

Yeah.

Joe McCall:

And um, I think, you know, one of the first one or two or three people that you hire in your business better be some kind of bookkeeper, an accountant or somebody that can manage your books for you because you’re probably not good at it. You’re probably not like, and you gotta be honest with yourself and swallow your pride and just say, this is, I need help with this.

David Richter:

Yeah.

Joe McCall:

I this is that important that you can’t just put it off to the end of the year and worry about it later. Um, you can’t just once a month try to do all the books yourself.

David Richter:

Right.

Joe McCall:

Uh, when you get the time to do it, um, I would say don’t even get your spouse. Maybe your spouse can help you do it, but like you need somebody outside third party who can do it for you, who can look at your stuff and say, um, yeah this goes here, this goes there. And uh, these are the three buckets. And so every dollar that comes in, certain percent goes here, certain percent goes there and uh, just get it done.

David Richter:

Yeah. No, that’s good stuff. So then Joe, lots of value here. I think just hearing your story, your journey, your personal journey and then how overcoming some of those things, what uh, how can people reach out to you now if they want to get involved with you? Cuz like I said, Joe can teach you how to make the money. He’s very, very good.

Joe McCall:

<laugh>

David Richter:

On the make the money side, he’s a marketing expert. There’s a lot that stuff to learn from Joe. So how can they find you?

Joe McCall:

Yeah, thanks man. I guess, uh, I’m on YouTube. I’m on um, podcast. I have a podcast, the Real Estate Investing Mastery. I guess you can see my logo, but it’s backwards on the video. It’s flipped my image. But anyway, I have a podcast called the Real Estate Investing Mastery Show. Um, I have a YouTube channel just search for Joe McCall on YouTube. Um, I have just a lot of things you can go to joemccall.com. I have, my main thing I’m doing now is flipping vacant land. There you go. Uh, that for me is my giant pumpkin right now. Flipping vacant land. And it’s okay if your pumpkin changes.

David Richter:

Yeah,

Joe McCall:

You can have, you know, one year you can have this giant pumpkin, you know, maybe you shouldn’t switch pumpkins every single year, but right now my giant pumpkin is vacant land. I love vacant land. I used to do a lot of houses, now I’m doing land. They’re just easier to do. Um, and you can great, you can make great money. Uh, you can make great cash flow with just a few thousand bucks buying a vacant land and selling it on owner financing. Um, so I’ve been doing that and a lot of people, I’ve been teaching people how to do vacant land flips as well. And if you’re interested, I’ve got a book, Uh, Sorry I had a book. I swear I did it. I’ll tell you it looks like this, but this isn’t it. Um, and you can get the book for free if you go to simplelandclass.com, simplelandclass.com and that’s the webinar that I do. And then at the end of that webinar is, uh, I give you the option to get the book a PDF for free simplelandclass com.

David Richter:

So that’s what his big pumpkin right now and how it can help you if you’re looking to, if you’re already in real estate and looking to add another stream or another exit strategy, or if you’re like, Hey, real estate sounds great, go to Simple Land. What was it again? Simple Land Class, simplelandclass.com. We’ll make sure we put that in the show notes. Then if you’re also listening to this and you resonated with Joe and you’re like, I do not wanna go down that path and I do not wanna be accosted by the IRS and almost taken away, please go to simplecfo.com if we can be your who, uh, at least for getting on the phone and seeing if we’re the right fit or if we’ve got someone for you, you know, like in our network. So that way you don’t have to be struggling on the financial side of your business. Know where every dollar is going. Be very intentional with it, making sure that you’re keeping more of it. So please go to simplecfo.com if we can help, but we just wanna make sure that we’re helping you make profit a habit in your business. Joe, thank you so much again for coming on the Profit First REI podcast.

Joe McCall:

Yeah, thank you David.

Outro:

This episode of the Profit First for REI podcast is over, but there are plenty more where that came from. Are you ready to learn how David and his team can help implement the Profit First system in your business? Schedule a discovery call at simplecfo.com right now. We’ll see you next time on the Profit First for REI podcast with David Richter.

 

 

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implementing Profit First...

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Title: “Realize Your REI Potential with Jennifer Steward: Authenticity, Profitability, and Consistency”



Episode: 240

In this episode of Profit First for REI podcast, we are sitting down with Jennifer Steward of REI Data Source, to unveil the secret weapon you’ve been missing: authenticity. 


Jen will crack the code on how to project a winning image that seals the deal…But wait, there’s more! Learn the top revenue activities every entrepreneur should master and discover the power of consistent strategies to solve your REI problems.


This episode is your blueprint to a thriving virtual business. Don’t miss out!


Key Takeaways:


[0:50] Introducing Jennifer Steward

[6:07] Project an image of success from

time to time

[9:16] Some best revenue activities that every entrepreneur should know

[11:00] Leveraging every avenue that you can, get consistency, and make sure you’re solving current problems

[17:43] The golden ratio in social media marketing is: 90% business and 10% personal

[25:02] The benefits of running a virtual business


Quotes:

[4:20] “Authenticity is like a business repellant.”

[10:09]  “In a market where you can’t dind deals but there’s plenty of money, you have to be the person who knows how to find the deals.” 

Connect with Jennifer:

REI Data Source Website: https://www.reidatasource.net 

Jen’s Email: jen@reidatasource.net 

Phone Number: (469) 952-8011



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:

Speaker 1 (00:00):

You need to just be able to solve the seller’s problem and just start with one exit strategy that you’re really confident in. And then once you master that, expand from there. And like you and I talked about, it’s who not how you don’t have time. Most likely to master all of those. So have a referral partner that you can build a relationship with and trust.

Speaker 2 (00:23):

If you’re a real estate investor who’s sick and tired of living deal to deal, then welcome home. Hear from everyday real estate investors just like you, and discover how they’ve completely transformed their business by taking a profit First approach. This is the profit first for REI podcast, where we believe revenue is vanity. Profit is sanity. It’s time to start making profit a habit in your business. So here’s your host, David Richter.

Speaker 3 (00:50):

Today we have Jennifer Stewart on which she is a go-getter. She’s out there, she’s doing lots of things. She’s in the cold calling space. She’s also a real estate investor. But then she’s also someone who I think has gone through a lot in her life and has come out on the other side stronger. And you can tell just from what she talks about and what she sees as the most successful real estate investors, what they do on a daily basis, on a monthly basis, it’s just good bottom line stuff to help you if you want to become someone who’s consistent in business, no matter what the market is doing. So I think this is going to be a really good episode. She gets into the nitty gritty and also just helping you get to where you want to be and making more money as a entrepreneur. Jennifer, welcome to the Profit First REI podcast. I’m so excited you’re here today.

Speaker 1 (01:37):

David, thank you so much for having me. I’ve been looking forward to this all weekend. What a great way to spend a Tuesday at noon and thank you. Thank you so much for having me today.

Speaker 3 (01:47):

Yeah, well I’m excited because we dance around in these different groups and we’re going to these events and you’re speaking a lot, you’re helping a lot of people out there, and I see you as someone who’s just very much, I hope this comes across, but just a very mature human being that has gone through a lot, but you haven’t just been a victim. You’ve been someone who said, I’m going to grow from what I’ve gone through, and that’s what I’ve just observed. And then honestly, there’s lots of my friends that respect you a lot too. I’ve gotten to know you well, so I’m excited about this one. So many things that I feel like we could go down, lots of roads here. So again, thank you for being on the show.

Speaker 1 (02:25):

I appreciate that. That’s very generous and kind observation. I think mature is a very polite word and I am just kind of overwhelmed with that kind assessment.

Speaker 3 (02:37):

Yeah, well, I don’t want to use any rude words for you here today, so we’re going to dive into it. No, but seriously I do. I see as someone who takes a lot of those lessons and applies them right away. I would also say too that you are not scared about sharing what you’ve learned and what you’ve gone through. Where do you get that deep sense of truth to share exactly what’s going on? And I don’t know if you’re a fan of the office or if you’ve ever seen that show. I like the Office, if you like the office. Where is it? I think it’s Kelly’s, Dayton, Daryl, and she says, he said, who says exactly what they’re thinking? What kind of game is that? And I’m like, that is Jennifer to a t. And I’m just wondering how did you get that as part of you? Because I think it’s so genuine, authentic, and it brings more people to you and they resonate. You’re saying what they’re scared to say.

Speaker 1 (03:30):

My business advisors have told me to do the opposite. They said

Speaker 3 (03:36):

Genuine, sorry. That’s great. Basically the

Speaker 1 (03:38):

More money you’re going to make, you have to play the game. And so what I’ll do, David being totally transparent, is I’ll turn that on and off depending on my revenue. So I know that sounds hilarious probably, but if my revenue gets lower, I will turn off the authenticity to a certain extent and go back into my polite game, the system mode. But whenever income is plentiful, I’ll go back to being more my authentic sharing self because number one, sometimes I get more business than I can possibly ever take down, and that’s overwhelming. And so I find that authenticity is like a business repellent, but it’s so much, it’s so stressful for me to be fake. It’s so stressful for me to be something I’m not. And that’s me being a little bit funny, but also kind of realistic as a business woman. And then there’s me as a person who has a soul and that person wants to connect. That person realizes that I’m not just here to make money, I am here to help people who are suffering. And I know that sounds cheesy and cliche, but it’s true. And lemme tell you, I don’t want to be one of those people who are suffering. So I will switch into a mode that is more polished, if that makes sense.

Speaker 3 (05:09):

That makes sense.

Speaker 1 (05:10):

Because I don’t want to starve. And so I do kind of go back and forth between, okay, I need to dial it back. And I think that people notice that if I was just all the time talking about what a person can overcome or the deep parts of our why and our feelings, then I think that would really drive away a lot of business. I’ve seen people who got up on stage and talked about aligning the chakras and they were never invited back. So you have to find a balance between being a compelling human who helps people overcome these internal struggles that we likely all face, especially as entrepreneurs, depression, anxiety, slow times debt overhead, really painful things that will keep up at night and destroy your health and destroy your relationships. And then we also need to focus on, unfortunately we have to project an image of success from time to time because I’ll tell you, I always get the most business whenever I’m on vacation, I can actively ask people to leave me alone while I’m on vacation.

(06:16):

And that’s whenever I get all the messages for, Hey, I want to do business with you. Because they see the success, they see that it works. When really that’s I’m spending the money, that’s whenever I’m the least successful because I’m not putting time into my business and the dollars are just flying out the window like someone who has an open wound. And so it’s funny because it’s whenever you’re doing the best that it doesn’t show, and whenever I’m making the most money, it’s usually whenever I look the worst, I haven’t had time to groom myself. I’m probably still wearing pajamas that day. And so it’s almost always the opposite as to who has money and who doesn’t. So the person you see with the super nice house and the super nice car, those people have confided in me, Hey, I have so much pressure, I feel like I’m going to lose it.

(07:03):

But those are the people that look up to and respect. And so that being said, David, if I was financially independent, 100% I would be genuine and deep and all the time, if that makes sense. It would be like, Hey, when you woke up today, did you thank God for just waking up? And what are some ways that you can lower your overhead? What are some ways you can increase revenue? Are you wasting time on non-revenue generating activities? Are you doing too much stuff for free? Those of us who are in real estate, I think we do too many things for free. And like you and I talked about, it’s not just your expenditures that are on your books, it’s also the expenditures that are on your time. And so I talked to my attorney last week about dropping non-revenue generating businesses that just aren’t converting because there’s hope in one hand and there’s numbers in the other.

(08:02):

And after a certain amount of time, you need to realize which businesses are covering for the businesses that are taking a loss. And so my lawyer kind of sat me down and I know you do this, and we had to look at which businesses are just not generating and which are carrying the ones that aren’t. And he said, just focus on the ones that are. And so that being said, whenever we wake up every day, if we are our real selves all day, it usually doesn’t translate into revenue. But when I have the luxury of being myself, David, I always want to reduce the suffering of others because that’s kind of all I’ve done my whole life is I’ve had to overcome and overcome and overcome and overcome to a degree that just feels, it could feel really unlucky if I let myself go there. But instead of feeling unlucky, I have to see the opposite side of it. So for all the extremely low probability things that happened to me, there’s also extreme low probability things that happened for me. And you have to see both.

Speaker 3 (09:11):

Right. That’s really good. That is really good. So since we’ve gone down this road, and especially for the real estate investors listening, what would you say are some of the best revenue producing activities they could be doing or that you see in your own life that you do that translates into that

Speaker 1 (09:29):

You have to fill a niche that nobody else is filling? You have to see a problem that everyone is facing a hitch in the giddy up that’s keeping everyone from making money. What I’m noticing right now, for example, people don’t have the money for down payments on their loans. So like we mentioned before the call, I’m offering a program where you can do a hundred percent financing as long as you’re one of my cold calling clients. And it blew up because people don’t have the money for a down payment right now, and my cold callers really aren’t that expensive. And so it solves that problem for them. And in the past, the biggest problem was finding deals. And in a market where you can’t find deals, but there’s plenty of money, then you have to be the person who knows how to find the deals.

(10:16):

And so you have to find what’s keeping people from making money today in the current market and then really, really leverage your social media and go speak, like you and I talked about before, go speak on those topics, mention it on social media, put it in your stories, tell people what you do, and then be really consistent with your message because people are watching, they want to see consistency. And it’s like my lawyer taught me, who’s Jeff Watson? If they see you being erratic and all over the place and not consistent in your message, then people don’t trust that they can go to you to solve these problems. And so that’s the big key is leveraging your social media and being really consistent in your message and making sure that you’re solving the problems of today. So those three things, consistency, solving the current problems and just making sure that you’re leveraging pretty much every avenue that you can.

(11:16):

And of course, always want to be competent and run an ethical business because you can spend 10 years building a reputation. And if you hire one bad employee or someone who makes you look bad or doesn’t deliver for a client, unfortunately bad news spreads like wildfire and just whatever you’re buying on Amazon, you’re going to pay more attention to the bad review than the good reviews because we’re looking for to avoid pain for good reasons. I mean, some things could take us out and set us back a decade if we make the wrong investment. And so it’s really, really important in a capital intensive business what we’re in to be someone who’s trustworthy, competent with very high integrity. Like you and I talked last week and I told you, I was like, Hey, I can’t be consulting on a topic that I don’t know about. Thank you for the inquiry. But that would be horribly unethical. And you have to do that. You have to turn down the fast money for the long-term play of having high integrity.

Speaker 3 (12:18):

Yeah, no, a hundred percent. That’s really good. I think that’s consistency, solving the problem for today and then getting the message out. So those are three steps there. And I think that’s where it’s like, it’s so simple, but it’s like that number one, you got to do it consistently and you got to move to where the market is. So I think that’s really good stuff because I can’t agree more because I think, do you think that a lot of real estate investors build themselves into a box and then when that solving the problem of what they used to do doesn’t solve it anymore, that they have a hard time pivoting to something that will and bring the revenue? Yeah,

Speaker 1 (12:57):

I mean you have your fast movers, your highly networked people who are poised to move, but for anyone who doesn’t want to hustle 24 7, it’s hard to pivot like that. I mean, at some point, I think human beings, we all want consistency, predictability. And one thing that’s really tough about this business, and I’m sure everyone notices, is how fast paced it really is. Now, if we were in the paper business, for example, David, how much do you think things change? Speaking of office space or not office space, the

Speaker 3 (13:35):

Office office,

Speaker 1 (13:36):

Yeah, yeah. I mean if we’re a paper company, how often do you think the industry changes? Right.

Speaker 3 (13:42):

It doesn’t really change. I don’t know.

Speaker 1 (13:44):

I mean maybe a paper guy comes and messages us and said, oh, you wouldn’t believe.

(13:51):

But it seems like from the outside looking in that real estate, every day there’s some new gimmicky stuff and you’re just like, I can’t handle this. I need to step away because I can’t handle one more gimmick. I can’t handle one more big change. It’s difficult. And so I think knowing the fundamentals, because I know people who make big money just using a yellow pad for their CRMs still, and some of these people are big names, and I don’t think he’d mind me saying, Adam Johnson, Leon Johnson’s son, he does a lot of deals just using a yellow pad. Courtney Frickey, she has her paper leads that she keeps in a file and only goes through them if she needs to. So a lot of these gimmicks just really aren’t the real deal. The real deal is not necessarily what software you’re using, it’s where are we in the market, are there more deals than money or is there more money than deals?

(14:47):

Those are really the main two shifts that if you pay attention to those in the market, you’re good. And people was like, oh, I do this with AI and I do that with ai. I haven’t seen AI do anything really amazing except for Google search type stuff. I mean, I’ve listened to the AI calls and they’re still not that great yet. And I keep hearing people say, oh, AI is going to be doing our acquisition management soon. Well, yes, true, but when I haven’t seen it yet and still, which problem is it solving the low money problem or the low inventory problem? And right now I think it’s market to market. It’s kind of like mushrooms and in certain markets we still have an inventory problem and other markets are more of a buyer’s market and we have more of a money problem. So you have to take it market by market, city by city and see which problem are you solving. Those are really the main two problems in real estate. And what I’ve seen is everything else is a marketing gimmick. As someone who does marketing myself, we try to repackage it to get people’s attention, but it’s kind of all the same stuff.

Speaker 3 (15:59):

Yeah, no, that makes sense. So would you say then the people like Adam and the people like Courtney, are those three things that you mentioned before consistent solve the problem for today and then the media and the messaging is that their key to success and as long as they’re consistent doing, what’s really is that or is there something that makes them different just because they go out there, and I love how you said with their CRM is a yellow legal pad, it’s none of the fancy stuff and all that where a lot of people get trapped in that rabbit hole. So that’s where my I’m wondering, yeah,

Speaker 1 (16:31):

Courtney’s really consistent on Instagram and she gets a lot of referrals. And Adam’s been in his market for 20 years, so he gets a lot of referrals. So you talk about consistency, it’s decades of consistency in Adam’s case, and Courtney has been doing it I think for 10 years, and she really gets out there in terms of, she speaks in front of realtors groups, she speaks at rhe, she holds her radio show, and she’s very consistent in her branding. She doesn’t just show herself boating on the weekend or shopping or whatever. And if you look back through her Instagram, you can see that in the past she did have more of showing her personal life. And Connor Steinbrook taught me, don’t show your personal life, just make your entire page about business. But there is one caveat to that. You don’t want to look like one of those VA generated pages where there’s no real person behind it.

Speaker 3 (17:23):

It

Speaker 1 (17:24):

Looks like a VA just runs my page and it’s just my VA who does everything. So I do post pictures of my family and going to the gym, and if I do go on vacation, I do post that. But too much of it makes people think you’re not available for business. So I would say the golden ratio that I’ve discovered is about 90% business and 10% personal, just to add that speckle of reality that you are a real person and not a va. And I think Courtney does that very well on her Instagram for example, and she doesn’t even have to spend money on marketing. She told me she doesn’t do that anymore. She’s a hundred percent referral based now and it’s taken being consistent

Speaker 3 (18:04):

And she does a lot of creative deals or that’s all she does is the creative type deals. She

Speaker 1 (18:10):

Does kind of everything. I know her to do flips, I know her to do. She’s mostly a buy and hold investor and she will do creative when she needs to. But I think I’ve had a lot of clients come to me over the years and try to curate a marketing plan where all we do is creative for them. And that is really tough. You’re going to have a low ratio of being able to do that. Typically creative should be something that comes organically from time to time. If you make that your only goal, and this was a guy with a lot of money, by the way, the one I’m thinking of. He had so much money, yet he was super focused on just doing creative. And I understand if someone has no money and they’re just focused on doing creative, but they get it in their head that this is the way to do it and there is no the way to do it.

(18:55):

You have to just solve the problem of the current seller who wants to sell, whether it’s a listing, whether it’s innovation, whether it’s a flip, whether it’s a wholesale, whether it’s long-term buying hold subject to seller finance, and anything else I’m missing in there. It shouldn’t just be, oh, I’m going to pull this list and I’m just going to do ovations or I’m going to do this campaign. I’m just going to do subject two. You need to just be able to solve the seller’s problem and just start with one, this is something I’ve taught for years. Just start with one exit strategy that you’re really competent in. And then once you master that, expand from there, and like you and I talked about, it’s who not how you don’t have time most likely to master all of those. So have a referral partner that you can build a relationship with and trust for innovations for subject to maybe even for seller financing or maybe master two, but mastering all of the above would be insanity. Even if you had been doing this for 50 years like Leon Johnson, that would be insanity. So be ready to leverage joint venture partners that you can trust with the right paperwork behind it. Of course.

Speaker 3 (20:02):

Would you say that if you go down that road, can you build a business like that? Meaning where a business is systems and other people where eventually you have a business that runs itself or runs it with the people in the processes you’ve put in place. It seems like with real estate, like you’re saying, I have to solve the seller’s problem right then and there. So it almost sounds like you need at those higher level people, you can’t just get the McDonald’s line worker that’s there or the robot or AI or something like that. That’s

Speaker 1 (20:33):

The challenge that I’ve run into. And I feel like conceptually it can be done, but then in psychology we have something called channel factors, these little things that get in the way of what sounds good on paper. And that’s usually where the human element comes in because I have staff of 180 people in my agency and I’ve learned little tricks to managing them. For example, this is going to sound weird, I don’t do company meetings because I just meet with them as I need to. I do spend a lot of time with them upfront, maybe a few hours, and then I never talk to them again except to tell them when a job has come in. And if they need more than that, they’re probably not a good fit. And I don’t do group meetings because I’ve had them all group up against me in the past to raise wages, basically wanting to unionize whenever my clients can’t afford that.

(21:27):

And I said, I’ll let the whole company burn down before I let you extort me in this way. And I did. And I did it privately. I didn’t tell anyone. I didn’t go public about it, but I just stopped the company for six months and just traveled. And it’s like I have plenty of money. And then they were suffering. And then once I was done traveling, they were like, Jen, please, please, I’ll come back. So who would think that there’s a human variable of needing to stop people from organizing against you, or it’s like Adam Johnson says, you have to make sure that you’re always in the way of a deal in order to get it done. So that’s why you can’t fully replace yourself for the most part unless you sell the company, is because at some point somewhere you need to add value. And yes, you can have an integrator, and yes, you can have a CEO, and yes, you can have a CFO, et cetera, but if you notice even in a C class corporation, you still have shareholders.

(22:24):

The shareholders are still in the way in some way because they own a part of the company. So no matter what, you have to make sure that you’re in the way of other people just taking over completely what you do and just pushing you out. And so that is the challenge. That’s where replacing, that’s what no one talks about. Everyone wants to sell these sexy business models where you’re just on the beach or whatever, but at some point you have to put yourself between yourself and someone else to make sure you’re still adding value or you’re just going to get pushed out. So another example is, I mean, you can just live like my older gentleman, friends who just own a bunch of mutual funds and they don’t manage anything. They just collect checks from the dividends, but you have to have millions in order to achieve that.

(23:17):

Lemme tell you, those are the people who have the most passive income that I’ve seen, and I know this is an REI podcast, but what’s great about real estate is you can start with a relatively small amount of money and then with appreciation, leverage that into millions, and then you can become the mutual fund, the note owner or your kids can get your portfolio, but it’s not as passive as just having your mutual fund dividends come in and as know the stock market goes up and down where rents typically, there’s not as much fluctuation in rents as there is in the stock market. And so all that being said, going back to what you asked, whenever you’re managing staff, there’s just going to be all these psychological factors that are not going to present themselves on paper with your staff is always the biggest challenge in running a company.

(24:11):

And so that’s why I don’t do company meetings because that’s whenever people get together, and pardon my language, I think it’s a poignant word. They start bitching and then that causes morale issues. All it takes is one person to start griping and then morale goes way down. And I don’t care how well you run your company, I don’t care if you are like you have in the background, I don’t care if you’re Mr. Rogers, as soon as someone starts griping and it takes hold, it’s game over. This doesn’t work if you run a brick and mortar business. But I have doctor friends, for example. They run brick and mortar businesses, and one of my doctor’s friends two weeks ago, his entire staff just walked out. They’ve been with them for 20 years and they couldn’t have organized like that if you keep them separate. If you’re running a virtual business, that’s one of the benefits is you can manage your staff. And I tell you, that has made my income extremely passive.

(25:09):

So if you take nothing else away from this by keeping my staff separated, I have generated true passive income for myself because all I do is bring the jobs, bring the clients, they work the clients, and then they do a good job and then I’m out. The only thing I have to do is keep bringing in new clients because there is always going to be some small amount of attrition no matter how good of a job you do for various reasons. So yeah, if you have a virtual business, keep your staff separate and that way they’re not coming together. And it’s amazing how peaceful things are. I have no drama. I have no complaints. I’ve known go well. so-and-so did this, and so-and-so said this, and so-and-so gets paid this and I want to get paid this. It’s like I have literally zero drama in my agency with my staff now, and that has just been amazing.

Speaker 3 (26:03):

Yeah, that’s the first time I’ve heard it put like that of keeping separate in that you don’t run meetings and you don’t get them together, which is very anti, a lot of the books out there and a lot of those systems and stuff that have the organizational meetings and that type of stuff, level 10 meetings or the level 10 meetings and all that, that goes along with it. So I love hearing a contrarian viewpoint, especially for someone who runs a virtual business like that and who’s gone through almost like you said, the utilization of that type of stuff. Yeah, I’ve been this for

Speaker 1 (26:37):

Six years, and so that’s enough time to where you’ve passed some task, kissed a lot of frogs and had every problem under the sun.

Speaker 3 (26:44):

Yeah, yeah, no kidding. So that’s very interesting. Well, this has been a lot of fun. I love the answers that you’ve given. I think there’s some really good value there too with being consistent, solving today’s problem and getting it out there, being consistent of getting out your message as well too. I also like that what you just went over that was so contrary to what other people say. That was really an interesting take. I want to, and I

Speaker 1 (27:10):

Would bet you my headaches are much smaller than theirs,

Speaker 3 (27:14):

Probably. Probably. I mean, well, most people have the headaches in business, and if you just have less than them that it probably wouldn’t take much if you just had just that many less. So that’s great. I love hearing that. What I wanted to talk

Speaker 1 (27:29):

Authentic draws better clients too. I did want to share that because I know I went on a bit of a rant and a ramble about that, but let me be pointing on one point is that by being my real self, David against my business advisor’s advice, the clients I have now, I have no drama with and I don’t know why I’m not smart enough, I guess to know why. But the ones who come to me whenever I’m going through times of being very authentic and just really sharing whatever it is, whatever business problems or personal problems that I may be facing and how I’m overcoming them, I get so many people, like you said, who may not do business immediately and it scares off a lot of people. But the clients who do come to me, we have no problems, no drama. They don’t blame me for a lack of success.

(28:13):

They just come in, show up, close their deals, and they stay long-term customers. So that is one benefit is I get fewer clients, but the ones that I do get, I have zero drama with, and we’re so simpatico that I work hard to make sure they’re successful and they don’t. Whenever I was being inauthentic and getting a lot more clients, we don’t have meetings about Jennifer, why am I spending this money and not getting any deals and then this, and they’re just being very nitpicky, but clients where I’m my authentic self, they come in and they just close deals, David, we don’t have to have awkward meetings that make me feel like crap about myself, feeling like I’m not really actually helping anyone and I’m just charging money and nothing’s happening for them. They come in and they’re like, Hey, Jen, I did this deal. I did this deal. Your staff is great. And so that was a crazy change to me. I thought, this is self-destructive behavior being this authentic, but I just felt compelled to actually help people. And then these clients are the most low maintenance clients I’ve ever had. So I would be curious what your take is on that in terms of why is it being authentic? First off, it’s interesting. It draws in less clients, but the ones that does draw in, I have zero drama, zero problems with, and they stay with me forever,

Speaker 3 (29:36):

Which is funny because what you’re describing now is in those books that tell you to have the meetings, it’s like it’s your core values. It’s the values that are shining through that. It’s people that resonate with you as a human being. So usually they’re going to be the ones, especially if you’re being authentic and being open and honest and sharing values that are just as a society, we look at and say, it’s mature what you’re doing. You draw those mature people in, so it’s like they’re going to be the ones that sit back, they do the deals, they get it done, and then they come to you and they be like, yeah, let’s keep moving forward. And that’s the low drama because projecting that out there as well too, just from what I can observe right there. But I really like that because very much of if you’re going to be yourself, you might bring in less, but you might bring more of the people that you want to work with. That’s what I took away from makes income

Speaker 1 (30:26):

More passive because that is always my goal. Low drama staff, low drama clients where we’re just doing deals. I’m providing excellent staff who are going to make sure that you’re getting in front of as many people as possible for as little money as possible, talking to those motivated sellers, getting good prices on data, getting good prices on your loans to close your deals, and just keep it simple. There shouldn’t be any insanity. There shouldn’t be a lot of complaints and craziness. And that’s not to say there’s never problems, but when there are, it’s like, Hey, Jen, we need to have a meeting because this caller’s gotten a little too lax and they’re just becoming too rote and they’re going through the motions too much. I had to have that call three months ago, but guess what? He didn’t leave. He didn’t blame. He said, Hey, let’s just fix, let’s just fix their script.

(31:12):

And so I told her, I said, Hey, you’re one of my best, and maybe you’re working too long hours. Maybe you need to take more breaks. Maybe we need to load you up with fewer clients because instead of listening to the seller, you are kind of just pushing through the script. I said, someone who started out cold calling myself, I noticed I would do that towards the end of my shift. And I said, so let’s just be aware that that’s what’s going on. But I didn’t blame or shame her. I just said, Hey, because I was sitting in that seat myself for so many years, David is a cold caller. I know what problems they face, and it makes me a better manager for them. And just say, Hey, it just sounds like you’re getting a little tired. And so take a 30 minute nap, take an hour nap and come back and you’ll see how all of a sudden, instead of just pushing through a script, you’re really an active listener.

(32:02):

But that’s the only problem client meeting I had to have in the last six months where before God, David, it seemed like it was every day. People were just pinging me with this is a problem and that’s a problem. This is a problem. And I think that’s what led to my heart attack last year at 38 years old, was just having all these clients with all these complaints and it was just driving me crazy. And now I don’t have any of that. And so just sharing my experience, whether it’s true or false or somewhere in between. It’s just my anecdotal experience.

Speaker 3 (32:36):

Well, no, that’s really good. I wish we more time, but I’m going to land the plane here. We’ll have to do another episode too about how you got through that and coming out on the other side. But if people want to get ahold of you for your cold calling and what you’re doing there and how would they get ahold of you if they want to start to work with

Speaker 1 (32:54):

You? Yeah, whether it’s the cold calling or like I said, the loans where we’re offering a hundred percent financing on both the rehab and purchase price. If they’re my cold calling client, they can just email me at jen, JEN at rre I data source.net. I’m also a really brave person who gives out my cell phone because as a cold caller, I’m not afraid to call you. You

Speaker 3 (33:18):

Can call me,

Speaker 1 (33:19):

I may think you’re a spam call and answer a little bit briskly, but my cell phone is (469) 952-8011. Feel free to call me there or Jen at REI data source.net.

Speaker 3 (33:32):

Cool. So that’s how you could get ahold of Jen, and that’s the email. And she gave your phone number as well too, so you could call her in and say, Hey, hey, just wanted to see if you answer the phone. I’m sure you will. Like you said, who does that? Right? Who? Their cell phone. Cell phone. And then who does that? And then actually answers too. I feel like today’s age, please go to voicemail. So that was good stuff. Lots of valuable information here, stuff that you could take and I think implement right away to become these type of people out there that are consistently successful. And that’s one of their keys to success is being consistent in solving today’s problem, building the message around that as well too. I really liked your insight of the type of client you draw in when you are your authentic self versus where you might get more, but it might be more headaches if you are not. So it’s like just lots of good practical things today. So that was a lot of good stuff. Thank you for sharing, Jen. I really appreciate all that you did here today.

Speaker 1 (34:26):

I appreciate it. David, thank you so much for having, thanks for asking great questions.

Speaker 3 (34:30):

And I wanted to say too, if you’re listening to this and you’re like, oh my gosh, I’m not making enough or whatever, first of all, call Jen, you can literally call her. She gave you her number. She can help you make more money if you need to keep the money too. If you’re like, I have no idea where my money’s going, don’t know what my overhead is, don’t know how much I’m making, how much I’m keeping, or I want to keep more, you can reach out to us@simplecfo.com. We want to help you get at least that stuff in place because if you don’t have any idea, you’re not running a business. So that’s where I want to help you at least be consistent in knowing where your money’s going too. That’s another consistency factor as well too there. But Jen, again, thank you so much for coming on and sharing, and if there’s anything that you need from Jen, you know how to get ahold of her. She gave you the email address and her phone number. Again, thank you so much for coming on today.

Speaker 2 (35:17):

This episode of The Profit First for REI podcast is over, but there are plenty more where that came from. Are you ready to learn how David and his team can help implement the Profit First system in your business? Schedule a discovery call@simplecfo.com right now. We’ll see you next time on The Profit First for REI podcast with David Richter.