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Zero to a Million – How a Strong Mentor, Great Partner & Profit First Got Him There with Michael McDonald

Episode 151: Zero to a Million – How a Strong Mentor, Great Partner & Profit First Got Him There with Michael McDonald

 

The Profit First REI Podcast

January 30, 2023

David Richter 

Summary:

 

Having a good life partner is also one of the keys to real investing success. 

 

We have Michael McDonald, a well-respected real estate investor, who shares his journey from having a debt of 45,000 and how in 2022, he was able to buy his dream car through his success in real estate investing.

 

Listen as Michael shares how having a good life partner, trusted mentor, and Profit First helped him achieve a million deals from having zero deals.

 

Key Takeaways:

 

[01:32] Introducing Michael McDonald

[02:06] Michael Shares His Journey in Real Estate and What He Do

[04:20] The Moment He Knew Her Wife is Pregnant

[05:46] Michael’s Experiences in His First Real Estate Deal

[15:02] Michael Discovered Profit First

[18:28] How Profit First Impacts Michael’s Real Estate Investing Journey

[24:43] Michael Shares His Plan for 2023

[28:20] Things He Has Done Differently When He First Started in Business

[29:21] Connect with Michael McDonald

 

Quotes:

 

[15:47] “Books are a disaster if you don’t make it a priority.”

 

[21:11] “Treat yourself, take a trip, go on a vacation. You earned it.”

 

[25:51] “To have a team, the business can move on without your full attention.”

 

Connect with Michael:

 

Website: https://www.thevirtualmillionaires.com/home

 

Socials: https://www.instagram.com/michaelmcdonaldrei



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:



Michael McDonald:

The first thing I did was I just followed the book. I set up all the accounts, and as soon as we got the accounts set up, we had fumbled through the allocations for quite some time. It was very inconsistent. And then I realized that if this is gonna work, we have to take it serious. And so we finally, you know, we had a spreadsheet set up, we, at the end of the month, we, uh, distribute all from the income account. We do, we follow the thing. And that’s when it started to get fun.

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:

This episode is going to bring you a ton of value. If you have done a million deals or zero deals, you will get something from this because Michael tells his story from the lowest of Lowe’s where he was 45, $50,000 in debt. His wife just told me he was pregnant. And how in 2022 he was able to buy his dream car and how his journey in real estate, but also Profit First has helped him immensely. I believe this episode will give you a ton of hope and a lot of people will resonate with his story because a lot of people have been there and I hope that this resonates with you. Thank you so much for listening. Hey, hey, welcome to the prophet first REI podcast. We have Michael McDonald here. Super excited about this one. He and I are in at least one mastermind together, if not more, but that’s where we get to see a lot of that stuff behind the scenes. And I know he’s very well respected in the real estate investing circles. Michael, thank you so much for being here today.

Michael McDonald:

Dave, good to be here, man. Excited to jump on the show.

David Richter:

Yeah, excited to have you be here and then tell your profit first story. But before we get into that, tell a little bit about what you do with Rocket Home Buyers. You’re getting into the education space too. Just tell a little bit about your journey and real estate and high level overview.

Michael McDonald:

Yeah, so I think, uh, I have to take people back to how I got into real estate and uh, maybe you’ll get into that too, but I think it’s important for people to understand, um, that, because the rest will makes some sense then. So it all started when I found about, found out about education or real estate investing four years ago.

David Richter:

Yeah.

Michael McDonald:

And I ended up at a real estate seminar with, um, no idea that I was going to be jumping into real estate. And what they sh uh, showed me there was that you can make money in real estate with little to no money down. And

David Richter:

Nice.

Michael McDonald:

I was talked into, go into the three day, I think we spent 2000 bucks to split it with a buddy. And what they said at that was like, Hey, you can cash 20, 30, $40,000 checks without even owning the property. I’m like, is this real

David Richter:

<laugh>?

Michael McDonald:

Like, seems too good to be true for me. But they pitched it and at the time, David, I was completely broke. Um, I had no money to my name. In fact, I put the 2000 on credit to even be at that next event.

David Richter:

Nice.

Michael McDonald:

And at that next event, they said, Hey, um, if you’re gonna be successful in this business, you’re going to need some help. And um, here’s an offer we can show you how to get the money to pay for it. So, um, long story short, to help me raise, I think it was like 40 or 50,000 bucks on credit cards because I had decent credit at that time, um, into my credit tank. Naturally, once I got that money and I bought the education and put it all on there. So that was my entry to real estate. And when I got home from that, uh, event, David, my wife told me that we’re expecting, so now I have $40,000 on credit. Um, had no clue how to wholesale a property or even do real estate at all. And that was my entry into real estate game

David Richter:

Alright. That is a, I think that’s gonna resonate with a lot of people cuz I think a lot of people start at some point there, at least with education or something on that side of things. But, uh, which is, I think it’s hilarious to see you’re going to this thing to buy real estate with a little to no money down. And now what you’re into this for 45, 40 $6,000 or something at, at this point. So, you know, you haven’t bought a property, bought a lot of education, but, and then you were expecting to, okay. How was that moment walking in the door, you know, and her telling you you were pregnant? Like what was going through your head at that point?

Michael McDonald:

Dude? Uh, ab my heart just dropped. I mean it was

David Richter:

okay.

Michael McDonald:

It, I was a wreck because there was all of these emotions of excitement, um, fear, um,

David Richter:

Yeah,

Michael McDonald:

The uncertainty of not knowing what it’s like to be a new dad. And so, um, it was a whirlwind man. Um, and it made me realize that okay, if I wasn’t motivated before I found out that news, I’m definitely motivated to take action and figure this thing out now.

David Richter:

Yeah, that makes sense. So let me ask you this, did you have any financial education before this not real estate? Cuz this sounds like it was more real estate, but just any financial education before this, uh, either on your own or in school or from your parents or anything?

Michael McDonald:

That’s a great question. No, I came from a lower middle class family. Um, I went to college for nutrition. I did graduate, uh, with my degree in nutrition. But I’m sure you can imagine how much education they taught about finance in a nutrition degree.

David Richter:

<laugh><affirmative> Um,

Michael McDonald:

Yep. It was none. And so I, I had no experience about running a business, real estate, any of that before that investment was made. Obviously it was an emotional investment looking back.

David Richter:

Yeah. Okay. So then let’s talk about that a little bit. So you made the investment, your wife has now laid the bomb on you that the glorious bomb that

Michael McDonald:

yes<affirmative>

David Richter:

She’s pregnant. And then what happened from there? You said you were motivated, so did you get your first deal or like what happened from there to get you to the next level?

Michael McDonald:

Yep. So this is where the transition to rocket begins.

David Richter:

Okay.

Michael McDonald:

Um, the first year I was following their instruction, I was making offers on the MIS I was failing forward as they say.

David Richter:

Yeah.

Michael McDonald:

And after six months my wife looked at me and she says, this is not working. Um, the minimum interest payments were crushing us, uh, barely making ends meet. And I figured out that I needed to do something different. And so I found a local mentor, somebody who was actually boots on the ground who had experience. He actually had mentored Rob. He had mentored through Rich Dad Port Dadd, which is Robert Kiyosaki’s

David Richter:

okay

Michael McDonald:

Company.

David Richter:

Yeah.

Michael McDonald:

And so he’s like 2,500 bucks, I’ll take you into properties, we’ll show you how to negotiate, we’ll show you how to find them. All this stuff. Cause the $45,000 that I spent just wasn’t cutting it for some reason. I don’t know

David Richter:

yeah

Michael McDonald:

What he clicked it just was old school. It wasn’t well it wasn’t working. So long story short, I partnered with him on my next six deals. As soon as we got into some properties, he helped me negotiate. We got my first deal and it fell through.

David Richter:

hmm

Michael McDonald:

And that was about seven months in. Then finally after that, I got a deal. It cash a $20,000 check on a wholesale deal. It was a fourplex and it completely changed my belief and it showed me that this is possible. And that was the whole time I was working a full-time job in this transition.

David Richter:

Okay. So let me ask though, that property that you actually made, the 20,000 on what month in, was that? So seven months you got your first deal, but it fell through. What was the month mark for that first deal where it actually closed?

Michael McDonald:

It would’ve been month eight, cause it took about 40 days to close, give or take. And what it was nothing, but it was not smooth whatsoever.

David Richter:

Yeah. So that was eight months into this journey. Does that mean you’re a month away from having a baby or had, you know, like or did this overlap a little bit or like what, where was the timeline of the little one coming?

Michael McDonald:

Yeah, so the timeline was, it was August that I got the deal and the check.

David Richter:

Yeah.

Michael McDonald:

It was October when my daughter was born.

David Richter:

Okay. Okay. So

Michael McDonald:

Eight months. The credit cards were stacking up, man.

David Richter:

So that $20,000 had to be a huge relief for your guys.

Michael McDonald:

It was a huge relief. Um, I did split that with the guy cuz I, the agreement was we’d do deals together.

David Richter:

Was it 50 50 split?

Michael McDonald:

Yep, 50 50.

David Richter:

Okay. So you got 10 Ks. 10 K’s still not bad for your first deal.

Michael McDonald:

Yeah, I mean it was about half as much as I was making at my full-time job at the time. Yep.

David Richter:

You mean like for the year you were making 20 k

Michael McDonald:

I was making like 30,000 as a Nutrition. It was a dietetic technician at a hospital. Yep.

David Richter:

Oh wow. Yeah. You were barely making ends meet.

Michael McDonald:

Dude, I was scraped to buy, me and my wife and I had a house payment. Uh, we just bought probably

David Richter:

yeah

Michael McDonald:

A year before that. And, you know, graduating college.

David Richter:

Yeah.

Michael McDonald:

Your first job into after college, they don’t pay you a lot of money. And I was talking to the dieticians cause I was considering getting my master’s degree and they’re like, yeah, we’re making like 45,000. I’m like, I can’t provide for a family doing this.

David Richter:

Right.

Michael McDonald:

Which is what prompted me to jump into, real estate in the first place. But what ended up happening, David is I had wholesaled the same guy about five deals.

David Richter:

Okay.

Michael McDonald:

And that guy ended up becoming my business partner in Rocket Home Buyers. And at the very end of that year, I had wholesaled about seven or eight deals. Um, so from weeks August,

David Richter:

August to December, then

Michael McDonald:

December.

David Richter:

Okay.

Michael McDonald:

I started catching some momentum. I started figuring this thing out cuz I started having some money to be able to put back into marketing.

David Richter:

Yeah, that makes sense.

Michael McDonald:

And so

David Richter:

How much did you make on those seven to eight deals? Do you mind me asking? Like, between the split

Michael McDonald:

With him, I had probably made 50,000. We’re probably meet a hundred thousand together and then Okay.

David Richter:

Together then. See that’s so awesome. I love that. You know, like

Michael McDonald:

yeah,

David Richter:

Six months can change your life if you put that work in, but okay, I sorry to interrupt you. That was just very curious of like what you were able to do in that last six months of the year.

Michael McDonald:

Yeah, so what it, what it was is after that, that money was made, my wife actually came to me and she says, so I can tell that you’re starting to get this figured out. However, it doesn’t, it seems like you’re getting burnout. Like, she looked at me in the eyes one day after work, I’d work from eight to five. I came home, I would eat dinner and I’d go cold call and I would get back to work on my business. And she’s like, there’s, there’s no way that you’re gonna do this forever.

David Richter:

yeah

Michael McDonald:

She’s like, you will literally kill yourself. Because I was just drained. I was waking up before work until nine. It was just ridiculous. And so long story short, she says, you gotta quit your job. And I’m like, well what do you mean that sounds terrifying? And she’s like, well you made more money this year doing this part-time than you did at your job. She’s like, you’ve gotta quit your job. I’m like, okay, well how are we gonna do that? I’m like, we still have credit cards to pay back

David Richter:

<laugh>.

Michael McDonald:

And so, uh, long story short, uh, we decided it’s time to, well let me rewind real quick. I had partnered with my business partner. He quit his job in January. So he went full-time and I’m like, I need to get a little bit more money. I needed some more cushion to be able to do that. And she’s like, well we can sell a house. I’m like, you wanna sell a house? Okay, I didn’t think that you would wanna sell a house, but if that’s what you want to do, then we’ll consider it. So David, this happened so fast. Uh, it was March and my wife came to me with that idea and we listed her house a week later. We sold it two days on the market. We cashed out, I think $30,000 of equity paid off the rest of the credit cards. The day that that money hit my bank account, I put in my two week notice, not my job.

David Richter:

Nice. That’s awesome.

Michael McDonald:

And then the rest is history man. Uh, this is obviously a lot that goes into the next part.

David Richter:

Sounds like you have a great life partner by your side.

Michael McDonald:

Dude, I can’t even begin to tell you how thankful I am for her. And then it’s not like that for everyone. Right?

David Richter:

Yeah.

Michael McDonald:

Like for sure the support system, the encouragement, the belief. It was more than I think I had in myself at that time.

David Richter:

<laugh>. That’s awesome. I mean, not for you not believing in yourself, but for her being there

Michael McDonald:

By yourself. Well I’ve changed a lot since then. Well, that’s, how was that a little

David Richter:

<laugh>? Yeah, for sure. Oh man, that’s good stuff. I let what’s her name, just so she gets mentioned on here. You gotta

Michael McDonald:

Yeah. Shout out to my wife. Regina.

David Richter:

Regina. There we go. Yeah, Regina, this is why we’re even on this podcast probably. So thank you to you and I’m pretty sure she might be able to hear us cuz he’s in his home office. I heard the kids beforehand too. So how many kids do you have now? Do you have multiple kids?

Michael McDonald:

I have two year old, a four-year old boy,

David Richter:

Two-year old and four year old. So it’s, yeah. Wow. And uh, that’s awesome. I love that journey. That sounds like where a lot of people could have gotten tripped up by that, the $45,000 in debt, you know, getting that first deal and then having it fall through. I can’t imagine that call cuz like if you’re doing the deals you expect that call on deals that happen, but like your first deal, it’s actually happening. So I’m sure there was a lot of emotion there. And then actually doing those deals sounds like you, so those seven to eight deals at the end of the year, I do have one question there.

Michael McDonald:

Mm-hmm. <affirmative>,

David Richter:

Was it you negotiating at that point or was it your partner negotiating those deals still?

Michael McDonald:

I was negotiating

David Richter:

By that, but

Michael McDonald:

Point, 80 to 90% of the deals I would call him for advice on

David Richter:

yeah

Michael McDonald:

Specific situations. But I would find the deals, I would negotiate the deals and then, um, he was benefiting from the, just the fact that he showed me

David Richter:

yeah

Michael McDonald:

How to get those deals in the first place. But I honored my six with him and we split

David Richter:

yeah

Michael McDonald:

Him 50 50 and yeah, he made about 50 grand that year from just hanging out and

David Richter:

yeah.

Michael McDonald:

Showing

David Richter:

Me the way, being able to teach you. No, that’s awesome. That’s where I think a lot of value can be for if you’re listening to this as well. He invested in himself a lot. Michael did, then he went to a mentor and had to dish out some more money upfront plus some of the deal profit. Michael, do you regret any of that in that first year?

Michael McDonald:

Absolutely not. I learned so many valuable skillsets. I mean, my belief system changed the way that I spoke to sellers changed. Um, it changed everything like by having somebody who had 25, 30 years of experience in the real estate business, literally as a phone call away.

David Richter:

That’s awesome.

Michael McDonald:

Yeah.

David Richter:

I love that. So I’m not promoting mentorship on here, like Yeah. You know, like I’ll eventually mentor people but like, um, that’s not what we’re promoting on this show. But I do want to say that if there is a local person that you can sync up with that is just so good. And then yeah. All that journey, I think there’s just so much that, uh, people can resonate with there of like, Hey, I spent money on this education didn’t really get anywhere. But then, you know, stick it out if that’s what it’s meant for you. So I thought that was really good. So let’s talk, it’s the profit first for real estate investing show. So let’s talk about post year one and then selling your house, getting into it. When did Profit First, either Mike Mcow it’s book or my book, cross Your Path and you started to get that mentality?

Michael McDonald:

It was the end of the first year in business with Rocket. Um, I have to mention this cuz I think this is important.

David Richter:

Yeah sure, go ahead.

Michael McDonald:

Because after we got our first couple deals in as Rocket my business partnership,

David Richter:

yeah

Michael McDonald:

I asked him if I could move to Las Vegas from Nebraska, which is where I was living. And so not only did I quit my job, but I moved across the country simultaneously.

David Richter:

Okay, Yeah,

Michael McDonald:

Great idea. Right?

David Richter:

Right.

Michael McDonald:

But um, what it forced us to do though David, is it really taught us to, we’re gonna have to delegate, we’re gonna have to get people in place. And the biggest thing that I learned, uh, through one year in business and a lot of deals later, cuz we were just like going, cuz we both had to make this work is books are a disaster if you don’t make it a priority. And we were making some decent money.

David Richter:

Yeah.

Michael McDonald:

Um, but we didn’t know we were making decent money.

David Richter:

Okay.

Michael McDonald:

We always felt broke and poor. And after the first year we’re like, okay, well we did about 30 some deals,

David Richter:

yeah

Michael McDonald:

35 deals, and it just doesn’t seem like we have any money. We’re putting all of our money back into marketing. We’re have all of this, this money out on, on these flips. Um, where did it all go? I’m sure I see so many people where where’s all the money?

David Richter:

Yep.

Michael McDonald:

And that’s what it felt like. And it was really scary because we knew we were making money, but we just didn’t know where it was. And I was putting together spreadsheets of like, okay, we have all these properties. They got this much ment on this property with all these renovations and it was just like super unorganized. There was no thought process behind it. And then it was 2020, I think I had heard you had an event or a podcast or something and then I bought your book and it just clicked. I’m like, well of course. Why wouldn’t you pay yourself first? Why wouldn’t you pay yourself 10%? You work hard, you take a lot of risk in this business. Gosh, I’ve taken a lot of risk.

David Richter:

Yeah.

Michael McDonald:

Uh, over the last four years I’ve, we’ve done hundreds of deals. We deserve to get 10% of the profits.

David Richter:

<laugh>. Right.

Michael McDonald:

<laugh>.

David Richter:

Oh man. And I, if anything I’ll just, if I could jump in right here, being able to hear your story and that journey that you went on, I think everyone listening would agree that if anything you deserved to be able to make money from your business because you were able to go out for like a bunch of money in debt. You know, having your child that first year when now this was going on to getting those deals under contract to then the next year doing the 30 deals and actually not just now it’s proof of concept. Not only could you do the seven to eight deals, you could actually run a business and do 30 deals in a year and get that out there. That which now it’s like at the end of that year, why aren’t we making ’em out? Like where is it all going? So I think your story will resonate with a lot of people because it’s like, hey, well look at all the stuff that we had to go through. Like, why in the world is this not making me feel better than when I was working my nine to five or my eight to five? So that, I think that’s really key. So thank you for saying that cuz you do, you do deserve that. And if you’re listening to this too, you’re putting that hard work into it, you deserve it as well. Now I appreciate you bringing that up. I wanna give people hope. So, okay, so keep telling the story. Okay. You read it, what, did anything change immediately or was it like, hey we’ll get to it? Or was it like, Hey lights, the lights are on. Go from there.

Michael McDonald:

Yeah, I wish, I had a different answer for you on this part.

David Richter:

Okay. <laugh>

Michael McDonald:

It didn’t change immediately. So we probably kept doing what we were doing for another at least six months. And I was telling my business partner about it. I’m like, dude, like we shouldn’t be feeling like this. We shouldn’t be wondering where all of the monies that we’re flipping a bunch of property, um, we’re making them decent money. I think, that the next year we had made a million bucks, like

David Richter:

okay

Michael McDonald:

On our tax return after our accountant figured out how to clean all the books up

David Richter:

<laugh>.Right,

Michael McDonald:

And um, I was like, where’s it all at? You know, and at the end of the year I’m like, here’s profit, there’s this profit first model. I think I’d sent him your book. I’m like, read this book. We need to implement this and I don’t care what it takes to do it, but we’re gonna implement it. So the first thing I did was I just followed the book. I set up all the accounts and as soon as we got the accounts set up, we had fumbled through the allocations for quite some time. It was very inconsistent. And then I realized that if this is gonna work, we have to take it serious. And so we finally, you know, we had a spreadsheet set up, we, at the end of the month, we uh, distribute all from the income account. We do the, we follow the thing. And that’s when it started to get fun because we started seeing, okay, we are making money. I can see that from the top line to here. I can allocate this much money to the profit account. And we decided to do a quarterly distribution and one of the first quarterly distributions that we made, David was probably earlier this year.

David Richter:

Okay.

Michael McDonald:

And this last, well sorry, last year.

David Richter:

Yeah.

Michael McDonald:

  1. It’s 2023. So it was last year. And I just remember the quarterly distribution. I was so excited at the end of the corks I’m like, oh my gosh, like this is awesome. Like this distribution’s gonna, this is awesome. I don’t even know. Like I can buy pretty much whatever I want with this. Like, and I treated myself and we can get to that, but I bought myself a a pretty sweet, it was like a dream car of mine.

David Richter:

Nice.

Michael McDonald:

Um, this last year. And it made sense cuz it was also a tax deduction from the section 1 79 6,000 pound car for are you?,

David Richter:

Yeah, you don’t have to convince me that it a good idea. This is from your profit account. Spend it on whatever the heck you

Michael McDonald:

Want. I know, but I didn’t even spend it

David Richter:

<laugh>

Michael McDonald:

All because, um, I financed it cause it was

David Richter:

Nice. Oh, even better. Yeah.

Michael McDonald:

Yeah.

David Richter:

I love it.

Michael McDonald:

But I could have bought it in cash with the profits from the last year. So it was all of that to say it was an absolute game changer because it showed me that we did make money and you preached this to not try to invest that money. Cause I wanna invest it, I wanna keep reinvesting it, but it’s like, no, treat yourself with that. Take a trip, go on a vacation. You earned it. And so yeah.

David Richter:

That’s awesome. Well, I love to hear that. So let me, let me ask this then, since your wife has kind of gone on this journey with us here, and especially with you specifically, but Regina, on that first year when you did the 30 deals, how was she feeling at the end of that year? Was she thinking like, Hey, you did a lot of deals, but where’s the money? Like were those types of talks happening at home or not really?

Michael McDonald:

Not really. We’re pretty open with each other about how things are going. That’s good. I definitely don’t let her feel like if things are feeling tight, I do my best to not let her feel that. But I’m also open about it too. And so I feel like she thought we were doing pretty good.

David Richter:

Yeah.

Michael McDonald:

Um, because we were,

David Richter:

yeah, for sure.

Michael McDonald:

But we just didn’t know where all money was. We were tying up our own cash for the down payments

David Richter:

<laugh>.

Michael McDonald:

We were tying up our own cash for the renovations. And when all of those flipped sold, I told my business partner, I said, we’re never doing that again. We gotta use other people’s money.

David Richter:

There you

Michael McDonald:

Go. So we know where our money’s at.

David Richter:

Oh man, there’s so many points here. Like this it feels like the perfect case study just for like 180 degrees, like all the way around turning around because you went from all investing, you invested in yourself, which was great, but then you invested in the right person and then got you to the first deals. And then it was like, okay, the first year in where the heck’s the money and then getting the cash in order. Okay. So it wasn’t really an issue at home that first year, but how about this last year when you were able to actually enjoy the money 2022. Was she able to see that this year was a little bit more fun for you and for the business?

Michael McDonald:

Absolutely.

David Richter:

Okay.

Michael McDonald:

And that was, I try to, I shouldn’t say I try, I set an intention every year and

David Richter:

yeah,

Michael McDonald:

Last year my goal for the year was to have four have more fun Okay. And make more money. And I did just that. I traveled the most. We’ve traveled, we’ve went on a bunch of vacations and we made the most money we’ve ever made in our real estate business.

David Richter:

Oh yes.

Michael McDonald:

And so my wife gotta enjoy the fruits of the labor. Um, we gotta take ourself out to eat to really nice restaurants and really just indulge and really enjoy the fruits of the labor of the business. Which was amazing.

David Richter:

That is amazing because you see a lot of this stuff on Facebook. Okay. Or like Instagram or TikTok, wherever, and you see people taking those trips and you’re just, and you automatically think wealth and that they are wealthy. That’s where I love when Michael, like when you come on or other people come on and you say, Hey, we’re having fun and we’re doing this because you actually have the money <laugh>, you know, and you’re not ruining your business, you’re not ruining your life, you’re not going into a ton of debt. It’s like, yes, this is true wealth. So I just wanted to point that out too, that it is fine to post stuff on Facebook to buy that dream card, to do the things that you want to do. So, and Michael’s just a, a shining example of this. This is, has been a lot of fun. So, okay, so then 2023, what are your plans for this year? You’ve got now some education pieces as well too. I’d love to know what the Virtual Millionaire show is about. Like if you can’t, if you’re just listening to the podcast, he’s got a big bright neon sign behind him, which looks really good. So look at us up on YouTube for that. But talk about that, like where you headed this year, you know, real estate and you know, the education piece as well.

Michael McDonald:

Absolutely. So I am, first and foremost is I’m not getting into the education space because I need to make money to provide for my family. I feel like a lot of the educators out there, um, may just do education and that’s great if that’s what you wanna do. But for me, I’m running a business. I have 10 full-time employees.

David Richter:

Wow.

Michael McDonald:

Real estate. I eat, sleep and breathe it and I do it. So that’s my baby. That’s what bought me my dream car. That’s what I absolutely love. I’m passionate about real estate investing. And so our goal is to double our business from last year. So in our real estate business, rocket home buyers, we wanna do 4 million in revenue and we wanna do 200 deals. We did 93 deals last year and surpassed 2 million in revenue. So the goal is to double that.

David Richter:

That’s awesome.

Michael McDonald:

So that’s what I’m really laser focused on. Um, and then on top of that, I’m extremely excited about the Virtual Millionaire. It’s a brand that I’ve created where we show, um, real estate investors how to start and scale a business. Okay. So if you are in your business, um, we basically show you the departments that you need, how to remove yourself from the day-to-day to have a team that can go out and buy houses and the business can move on without your full attention. So for example, right now I have five acquisitions who are in my system, making calls, talking to sellers, buying houses as we speak. And the goal with the virtual Millionaire Man is just to impact as many people as I possibly can. Um, I know what it felt like to be at the low, to struggle to get through it. And all of the things that I’ve invested in in the last several years has taught me a lot of lessons. I’ve learned a lot of things that I would not do and I want to help other people avoid some of those pain points and uh, challenges. And so, um, my goal is to impact as many people as I possibly can.

David Richter:

Sounds like one of the things you need to tell them is get a Good Life partner. <laugh>, that was, that seemed like that was very key in that first year. Cuz you know, if you, if you didn’t have the right support right at, on the home front, it could have had a very different story. We would not be talking here. This is probably the bottom line. So

Michael McDonald:

sure man

David Richter:

I, that’s a huge one, number one. But then I, some of the things I’ve pulled out from here is the mentorship. Like you found a local mentor that was able to like, sounds like you went on appointments with him and hel saw him negotiate and do that type of stuff, which is awesome. So that was a huge tip. I think <laugh> going into the business, even after that first deal falls apart, like I feel like that was a low emotional point. Probably seven months into it, wife is very pregnant, you know, like here we go, like this deal’s falling apart, what the heck? So then you did seven to eight deals after that, which is awesome. Then the next year getting into that and actually expanding, but then realizing, hey, something’s missing. Why I don’t I not have cash? Then going through that, and actually I love what you said, you started to implement Profit First like a lot of people do when they self implement, but they are inconsistent, they’re focused on the deals. And I get it, you’re the business owner, but then you said, if we’re gonna actually make this work, we have to take it serious and be disciplined. So I thought that was great too because that discipline, it sounds like this last year has cashed in immensely with the new car, the most you’ve ever made, the most you’ve ever kept, the most you’ve been able to do with your family, which is amazing. So I think there’s been a ton of value here. I just have two final questions. Number one, is there anything you would do different at that first year when you first started your business? Officially

Michael McDonald:

I would’ve found a, uh, I would’ve found somebody to provide value to, even if it was splitting the deals right away.

David Richter:

Okay.

Michael McDonald:

I had heard that I should be connecting and going to local meetups and looking for people who are players who are actually doing deals, I would’ve found that person immediately and I would’ve done everything that they said to do and I would’ve brought them all the deals until I figured out how to do it myself.

David Richter:

There you go.

Michael McDonald:

So I wouldn’t been wasted seven months

David Richter:

<laugh>. Right. That sounds like a great first step for a lot of people. And I would just say too, if you had profit first from the beginning, it’d probably be a different story as well that first year. So that’s another thing. But, uh, okay, you’ve provided a ton of value here. So then how do we get in touch with you? How do people get in touch with you? Like how do they provide value back? Because I wanna know about the virtual millionaire, how to connect there and then if they just wanna follow your journey or wherever, you know, like, cuz I love seeing your stuff. I saw that exotic car, I’m like, this is awesome. Like, I know that he’s following this stuff and that, you know, this was his reward. So how can they follow you at the different places or the virtual millionaire?

Michael McDonald:

Well, I gotta thank you, David, because

David Richter:

yeah, for sure.

Michael McDonald:

I honestly, I think it’s so crazy and silly to me that people need permission to take the profits and go treat themselves, but growing up in a different environment

David Richter:

Yeah,

Michael McDonald:

You just don’t feel like you deserve it sometimes.

David Richter:

Yeah.

Michael McDonald:

And when I saw that 10% distribution from our best quarter ever, I was like, I could buy my dream car. This is awesome. I’m gonna do it. And I did it and I did. I, it was, you know, anyway, long story short, thank you because I think a lot of people would probably not be doing this stuff if you didn’t teach this. And so, um, working people learn more about Me. The Virtual Millionaire Show is a great place to listen to of the podcast. Um, you can follow me on Instagram at Michael McDonald,REI and if you wanna follow my content on Facebook, it’s The virtualmillionaire.com And, um, excited to share and help more people, um, by some of the lessons I’ve learned.

David Richter:

So Michael’s the real deal, so follow him. He’s doing the deals and he is also gonna show you these things. I mean, if you got value from this podcast I did, I loved hearing his story, but then all the twists and turns of like where he is today. So follow him the virtualmillionaire.com. Also the different Instagram handles and the Facebook, we’ll make sure we put that in the show notes. And if you are like Michael and you’ve had any of those types of experiences growing up, I don’t deserve the money. I’m poor, I don’t, you know, like money doesn’t grow on trees. If these were some of the things that were fed to you, like is fed to a lot of us in the poor middle class mindset, we need to get out of that. I want you to enjoy your business. So if you needed the Profit First System implemented what you can head over to simplecfo.com. We would love to be able to help you and be able to put someone on your team to implement Profit First. And even if we don’t have that person, we’d left to pin it to the right person. We just wanna provide value, even if it’s just listening to this podcast and you got one nugget out of here and you took it and then you ran with it. I mean, Michael went out there and he implemented it and got serious about it and has reaped the rewards this last year. So that simplecfo.com remember to make profit a habit in your business. And Michael, thank you so much for being on the show.

Michael McDonald:

Thanks again for having me, David. Appreciate it, man.

Outro:

This episode of The Prophet 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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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.