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Hey everybody, excited to have Steve Richards on the show today! Today, we are going to talk about something that we are both very passionate about and that is how to run and own a business, not a JOB. Some of the real estate investors end up in that J-O-B and they get stuck there and it’s not a good place to be.
We’re not afraid to go all in and take educated risks to build stronger businesses and help our families live better lives. This is the FlipNerd professional real estate investor show. And I’m your host Mike Hambright each week. I host a new episode live and bring you America’s top real estate investors as guests.
Let’s start today’s show. Everybody excited to be here with you today. Uh, today I am talking to Steve Richards and we’re talking about something that we’re both very passionate about, which is how to run and own a business, not a job. So many real estate investors end up in that job and they get stuck there.
And it’s not a good place to be. That’s what we’re going to talk about today. Steve, welcome to
Steve: [00:00:43] the show. Thanks, man. Thanks for having me. Yeah. Happy to see it. It’s
Mike: [00:00:47] funny. We were talking a head of time here. In fact, we, we can talk about like a half hour, so that’s honestly, I do all these podcasts. We’ve done over 1500 podcasts over this last, like almost seven years coming up on seven years.
For me, it’s just, it’s the ability to [00:01:00] just kind of hang out with you and network. And, you
Steve: [00:01:02] know, we usually talk for a
Mike: [00:01:03] half hour ahead of time. We’re talking afterwards and all this stuff. So it’s, it’s always fun, but you said some things and I even told you. What you just said could have just as easily come out of my mouth.
Right. Which is we, you know, we, we, we think the same in regards to actually running a business. And it took a long time for me to get there because I was just in the weeds so far and making more money than ever. So it was kind of like, well, I’m working harder than I want to, but I’m making a lot of money.
And then at some point you’re just like,
Steve: [00:01:29] ah, I just
Mike: [00:01:30] like, I don’t want to make less money, but I’m okay. I gotta get out of my own way. So I know you’ve felt the same way, right?
Steve: [00:01:36] Yeah, absolutely. It’s a trap. It’s like the curse of successful businesses. Now you’re now you find out that it actually does suck.
Mike: [00:01:46] Yeah. And the truth is isn’t, it, it hasn’t happened to me. I’m a knock on some wood here, but it happens to a lot of people when something bad happens. Right. They get sick. Family member gets sick, something happens
Steve: [00:01:58] where their
Mike: [00:01:59] time [00:02:00] has to go somewhere else. It has to is not an option. And then the business suffers and then they’re like, This, isn’t a business.
This is a job right now. So, uh, so I think what we want to talk about today is to tell folks
Steve: [00:02:12] that
Mike: [00:02:13] let’s be proactive about it. Let’s let’s get to that point. So before it becomes an issue for you and we all, nobody got in this business of real estate investing, you work 80 hours a week
Steve: [00:02:26] and be
Mike: [00:02:26] trapped where they are.
Right. So, uh, they did it to own a job to not to own a job, to own a business, but. That’s not how it usually works out. So, Hey, before we kinda jump into this, tell us your background. You’ve got a, a lot of great success, a lot of war wounds. I can see some scars on your knuckles there and stuff. So tell us a little bit about that.
Steve: [00:02:47] Yeah. So yeah, so much of the stuff, it’s funny, how it all it, to your point, a lot of the experience and you just learn and will tell people if you guys are watching this today and you’re newer to the business or [00:03:00] newer to business in general. A bunch of you guys are gonna be like, yeah, you’re, you’re probably 25 and making more money twice, as much as your parents ever made or three times as much together.
And it doesn’t really matter that you’re working all the time kind of, and you’re probably not going to listen to some of this. And then when your old guys like us, like I can, now you’re going to be like, Oh man, those guys were right. But, um, you know, I I’ve got, I know my kids are older, mine are teenagers now.
So I just have this different perspective on things, but, um, No. My quick story is I came out of business school in mid nineties, and then I
Mike: [00:03:36] started consulting
Steve: [00:03:37] in the tech world. And so my first clients were.com clients. And I was like, Oh, I just thought you had to like sneak it. So to a napkin with a business plan, and someone gives you five bucks.
I have to make a product to make a prototype, to go to a dog and pony to try to raise a hundred million dollars. And then everybody lies and just says how it’s going to be a a hundred million dollar company. And. In five years or whatever. And
Mike: [00:03:59] so
[00:04:00] Steve: [00:03:59] it was just really, it was an interesting time to come out.
There was also a lot of, uh, I worked for a big company called EDS. It was actually Ross Burroughs and being in Texas, you know,
Mike: [00:04:07] not, not too far from, uh, where I live actually. Yeah, five miles. I lived
Steve: [00:04:12] in Plano for three months when I started there, the pod, the, uh, Plano headquarters, you know, getting out was interesting during that time, because we had, we had clients that were crazy.com clients.
And then we had the defense department was one of our clients. Like literally, you know, the $10 million toilet seats that are probably paying for in other countries and stuff, there was all this like super, extra secret comply, uh, secret, uh, like trying to get compliance and everything to be in the building.
It was, it was kinda interesting, but, um, it was a cool time because I learned so much, but I had this business degree that I didn’t pay a lot of attention. You know, I was more into my fraternity and intermural sports and things like that. But. I had this business law classes, accounting and strategy classes, and I didn’t really pay a lot attention.
And that’s now all I really care about. Um, [00:05:00] and I had the foundation of business and then I went out and I was consulting for companies who really didn’t care. Like the government didn’t listen to anything. We said like, literally as a consultant for them, they just, it was so bureaucratic. It was crazy.
And then the startups would listen to everything we said, no matter how stupid it was, there was no oversight. It was like two totally weird. And I’m 25 and no, no one should have been listening to me anyway. But, um, but that was my entree into the business world. So it was interesting. And I had a front row seat in 98, 99, 2000 for the.com bust.
And, um, you know, everybody found out you can’t make money on the internet. At least that’s what they thought until you know, now Zuckerberg and everybody’s come around Amazon, you know, Bezos. Luckily they figured the internet out, but. Yeah, that was crazy. And then on the back end of that, there was a lot of Y2K projects in that tech business where they thought all the computers were going to shut down when it turned, you know, 2000 and January 1st, whatever.
And, um, you know, I, I went through all that. I didn’t even [00:06:00] realize it was a recession. Then I had no idea. And I just was getting kind of promoted up through the ranks and growing and doing different things. Um, you know, nine 11 kind of extended that recession a little longer. But when he came out of the back end of that, I continued to grow in my.
In the business world, but I had gotten bitten by the entrepreneurial bug, like pretty early. Um, and so I would say by 2003, two or three, I was getting out a startup that I got involved with and I really wanted to do something. Um, so for about a year, I was just kinda like try thinking of all these different ideas.
So I started reading a lot of different things that led me into stuff like. Think and grow rich and rich dad, poor dad. And I don’t have this story where rich dad, poor dad turned me on to real estate or whatever. Actually, I was just a guy that I played pickup basketball with at the gym was like my dad.
And I just got done. You might know some of these guys, Chris Kershner if you remember that guy. I know that name. Yeah. He was a sell houses on lightening. He was all subject to and, um, Ron Legrand and [00:07:00] then. We actually the first, anyway I met, so I met this guy and he’s telling me, I’m like, Hey man, I’ve got to start a business.
I’m sick of being in the corporate world. He’s like, well, my dad and I just dropped 30 grand going to all his real estate courses and we’re dropping mail, but now my dad was going to retire and do this and he’s not doing it. So now I’ve got 30 grand invested in bootcamps. We have three ring binders with CDs, by the way, back at that time.
And, um, he
Mike: [00:07:26] didn’t say eight tracks.
Steve: [00:07:28] No. I know. I’m sure that, you know, that was pretty bad.
Mike: [00:07:30] I definitely remember in my family, we had, uh, the, uh, cause it was like cassette tapes and it opened up this big, like plastic binder and I like six or eight cassette tapes.
Steve: [00:07:40] I had some of those too back in the day, but, um,
Mike: [00:07:43] Carlton sheets.
Steve: [00:07:44] Yup, absolutely. So anyway, kind of condensed that down, you know, he was sending out postcards then you know what to do. And I’m like, I don’t know. I mean, I. Worst cases, we’ll buy some rentals. He’s like we can get really good deals. I’m like, all right, I didn’t even want to flip a house. I was like, I’ll own some rentals.
That’s cool, but I’m going to start a [00:08:00] business. So my head was all around
Mike: [00:08:02] a business
Steve: [00:08:03] and what’s funny is I shifted. And then I saw real estate. I’m like, Oh, well, at the time, this was 2004. When I got in, um, when I started and within that first year, I quit my corporate gig, which was pretty good. And I went full time in it because you could just fog a mirror.
Like I didn’t made 15 grand every time I bought a house. Yeah, it would appraise for a hundred. I’d buy it for 80, you know, get a 90% loan on it. And I take, put 10 grand my pocket and it’d be on a three, one arm with Washington mutual. And my pain, you know, my payment would be like all in, it was like 400 bucks a month or something crazy stupid, but it was on an adjustable rate mortgage, but, and I was like, man, we could just, if I just to buy one house a month, I can make six figures and then I’ll flip a little on the side.
And so I kinda got into this and it just. Literally to what we were talking about a minute ago to kind of preface that as all I want to do is start their business. And I ended up like literally jumping into a hustle. And then when I got in, I literally committed to the hustle because I’m like, Oh, I can just hustle around and like [00:09:00] trade my time for, you know, dollars.
And I’ll just flip it up and chase money. And anyway, so, you know, I D I, we ramped up to doing up to five rehabs a month that after that first year, when I was full time and. Owning several rentals. Within a couple of years, we had 35 40 rentals. And, um, that was about the time when we saw things slow down with the market.
And so. I shifted to do rent to owns instead of flipping to from bank owns to selling to homeowners that were going to live in the property, a traditional flip, you shifted to doing rent to owns. And then within a year that subprime blew up and then it was rent rent. There was no, it wasn’t part of the deal anymore.
And so we had to too high basis and all these houses compared to the reds, you know, we had nice houses with fake 30 grand equity that we were going to get as a 30 grand pop on the back on all of them. But when we shifted her into, um, Oh, and we didn’t really care about cashflow. We just cared about the equity and I learned that rentals are a little different.
So, [00:10:00] um, during that time we started focusing differently. And once I learned that I started doing bus tours with some out-of-state RIAs and they started bringing people in and they’re like, well, find deals for me. Like you find them. And so we got into, I guess, kind of wholesale, but now I didn’t know what wholesaling was.
Mike: [00:10:16] Um,
Steve: [00:10:16] but I was just finding deals for them and they would buy them off me. And deals. I didn’t, I kinda would rather make quick money on. And then they’re like, well, if it was rehab, it’d be a lot nicer, you know, if I didn’t have to rehab it and when you’re already managing your rentals, can you manage mine?
And so like many turnkey operators, probably some people that are watching
Mike: [00:10:33] this,
Steve: [00:10:34] somehow it turned into, Oh, I can make money on the rehab. I can make money on a
Mike: [00:10:38] sale. I’ll
Steve: [00:10:39] make 10% arrests. It seems like all these revenue streams is what people talk themselves into, but it’s such a slippery slope. And I literally have watched over the last, you know, 16 years I’ve watched so many good people get destroyed on once, either as a client or the actual person in the turnkey business.
I’m sure you have too. Yeah, it is a tough, [00:11:00] tough business. Yeah. And, um, I got heavy into that. I did three, four, 500 of those, like. We do about 500 deals in a three or four year timeframe. Not all of them are turnkey, um, but they were all part of that. Um, but we really cut our teeth and we got a couple of clients out of it.
And then somehow I came up for air in 2013 and I’m like, man, we’re managing 350 houses. We’re doing 20 rehabs at a time. We’re not really wholesaling as much as we used to. Um, one reclaim, we made 600 offers for it. In that year and we got 110 houses, maybe on all those that all I’m a less offers. We had a whole team of agents.
Oh, wow. I mean, we had an office full of people, like 30 subs that worked for me in the construction. I had two different project managers that made like 50 grand a year salaries on top of like, it, it was the most silly thing. And Mike, I’m a super deep visionary. If anybody watching this as a, you know, us kind of person, I’m not an integrator.
[00:12:00] And now I can pretend to be one in spurts because I understand what it means to my bottom line and my sanity. But
Mike: [00:12:06] you have to have that. Yeah.
Steve: [00:12:07] Yeah. I just, um, it’s crazy. I looked up one day, we had a construction company, a brokerage property management company and the investment company. I was running a Rhea.
You know, it was the first year we did seven figures of business. It was literally like the most miserable year of my life. And. EOS traction. I got introduced to that actually at, um, I was at an Infusionsoft, um, conference in 2013 and some girl there who was her and her mom owned a bunch of, um, Keller Williams franchises.
And she turned me onto the book and I started reading it and I couldn’t get back to the core values. I read the book like three times, and then I made every one of my management team read it. And then we kept sitting down and trying to do the first chapter of core values. And every time they’re like, no, we don’t like what you came up with.
Here’s what we think our clients would like. And I’m like, I hate all that stuff. And then one day at lunch, I was like, the only way I can see [00:13:00] this is going to work is if we quit doing construction, quit managing houses. It’s like the core tenant of what we did. And I set it out of frustration and they all looked at me like, Oh yeah, right.
And then I’m like, wait a minute. It’s like, like the light bulb went off, you know? And I’m like, maybe we need to quit doing all that. And. I had gone from being a strategic visionary guy that everybody wanted to come get information from. And they want to know about my strategy and what I think about the market and who I like and network with me and get to know me and all this stuff.
And it turned into the only time I talked to clients anymore was, Hey, why are the reports late this month? Or my maintenance I’m getting screwed on maintenance or this tenant left too early, or your leasing is taking too long. It’s like, Oh, this horrible toilets, tenants, contractor.
Mike: [00:13:44] Yup.
Steve: [00:13:44] It was junk and, um, it was really hard.
And so I hit a reset button in 2014 and that started, um, at the end of 2014, I started a whole like 2015 was a big transition. Your form is really hard. Um, in fact, in 20, the second half [00:14:00] of 2015 to the middle of 2016, during that year, I am positive. I spent more money than most people make on therapists, coaches, counseling, uh, psychological tests.
Like I had a trainer at the gym. I had a, uh, um, a nurse practitioner. I was taking guitar lessons with my kids golf lessons. I was like, I’m going to go do all this stuff. And I’m going to like re-engage. And I, it was just interesting. Um, and I really kind of just reinvented. I didn’t even reinvent. I finally came back out of who I thought I wanted to be, and I really got to really know myself.
And, um, you’re coming out of that. We got heavy into wholesaling. And we kind of screwed around with it. Um, this will resonate with some of you guys that are watching probably, but we paid Joe McCall and one of his buddies, Peter,
Mike: [00:14:50] um,
Steve: [00:14:51] it was some stupid, like 15 grand to just set up our Podio. I mean, it was literally remember my, my, the guy that I met that that’s now my [00:15:00] business partner, Brian who’s literally like my sole business mate integrator.
I remember trying to convince him why we were going to wire them 15 grand. He’s like for what? He’s like Podio it’s free. And I’m like, Yeah, but they said they set up your carrot website and he’s like, but that’s 99 bucks a month. Like why? It was just funny, but you know, that commitment we made to spending money with somebody like that much, like why we use you as a disclaimer, I’m a client of Mike’s everybody with investor machine is
Mike: [00:15:30] literally
Steve: [00:15:31] in spite of our own issues.
We paid Joe’s office a thousand bucks a month, uh, to, to just throw mail out for us. Plus plus the spend or whatever it was. And I think it was only like 750 postcards every, every two weeks. So it’s 1500 postcards a month that was always sent. And so literally after 10 months of that, we would forget we weren’t using Colorado back then.
We used a number of years. We used number. Remember I
[00:16:00] Mike: [00:15:59] haven’t used it, but I’m familiar with it. Yeah. Like
Steve: [00:16:01] every couple of weeks we’d be like, Hey, we better go look at that and we’d go look into leads and we’d be just like, no, no, hang up, hang up. Oh, here’s a voicemail. And that really motivated, hang up, hang up voicemail, not very motivated.
We get like 20 calls in and be like, Oh, here’s one where they said they got sell tomorrow. Let’s call him back.
Mike: [00:16:17] And so some of you
Steve: [00:16:18] guys are probably laughing watching this, but like, I know you do that in your business. And if you don’t, your lead manager does and your acquisition guy does, but you’re just totally seeing we were sandbagging.
But in, in that, in that year, um, actually it was 2016 was when we did this. We spent 10 grand on marketing that, that year basically, and we did 229,000 revenue, like screwing around, like I was selling off houses still. And then my business partner was flipping some houses and we were just kind of like loosely partnering on this wholesale thing.
And we were like, gosh, I mean, what if we did that full time? You know? And of course we thought that it would all just magnificently, like. Quadruple and all that kind of stuff. But, [00:17:00] um, that was the beginning of it, man, at that point. But I was bound to build things differently and also know who I am and then have the right people around me.
But, you know, we went on from there to, um, build a team, the neck. So we went into build it. Right. But then the next big learning lesson for me was that we built a team really, really poorly that next year. And we had to dismantle all that at the end of 2017. And. Um, well, middle of 2017, it start to rebuild using cognitive testing and personality testing.
And you know, we’ve talked about this. One of the businesses I own is it helps people do that kind of stuff, but, but, but literally hiring the right people makes all the difference in the world. No. We started using vendors in 2016. I got my head straight about what I really wanted in life, which is probably the number one thing.
Most people have wrong. We started using vendors to do the things we needed to support our business. Then we started hiring the right internal people and then like in 2017, it kind of, it’s not all been roses, but it started to click. And [00:18:00] so, um, we’ve been able to run this business now and we have, we flips and wholesales and Indianapolis market.
I spent a couple hours a week in it. Probably sometimes not even that much. I mean, one of the, our dispositions guy is the direct report of mine. And we do a weekly call at noon on Wednesdays. And like, sometimes that’s the only time it’s like an open live coaching call for people. Sometimes that’s the only time he gets to talk to me.
So he’ll be asking me, Hey, can you, uh, look at your email or something on that call in front of everybody else? Cause he, like, he just can’t even, I don’t even put time into it. So. Um, anyway, I got super long winded there, but I, but I wanted to take that chance, Mike, to start to talk about some of the pivot points too.
So it’s been a weird road for the last 20 years for me, but, um, but there’s some component I started just gonna say, there’s some components we’ve learned that aren’t even about real estate. It’s literally about business. And so my current heart is, is just helping people understand how to run a business instead of on a job, which is what you started out by saying.
Mike: [00:18:57] Yeah. Yeah. Let’s talk about that for a moment. [00:19:00] So now, like, you know, it’s, it’s easy. To look back over 10 years, 15 years, a long time and say, well,
Steve: [00:19:08] now with what I know, I could have
Mike: [00:19:10] figured that out in like six months. Right. But that’s hindsight. Right? So, but the key is, is what I hope people, some people that are listening probably have gone through this as
Steve: [00:19:19] well.
You get to a point where you,
Mike: [00:19:21] you either, you know,
Steve: [00:19:23] di like proverbially, like from,
Mike: [00:19:25] well, hopefully not literally, but
Steve: [00:19:27] proverbially from like.
Mike: [00:19:28] I, this isn’t for me, I just need to go get a job or work for somebody else or whatever, if your goal is to be an entrepreneur and, um, and have your own business, like, hopefully
Steve: [00:19:37] you get to a point where you learn
Mike: [00:19:38] how to do it better, just like you did.
I’ve I have a lot of experiences like that too. But for those that are
Steve: [00:19:46] earlier in their career, not kind of where you want to be at, and you feel like
Mike: [00:19:49] you’re at a job, like maybe it will take a couple minutes to talk about like how to jump that learning curve because. You can do that by surrounding yourself with people that have been through that before.
And basically [00:20:00] just it’s a quantum leap forward, right? It’s like, I don’t have to go through all those things. I don’t have to touch the hot stove to learn. I shouldn’t touch a hot stove. It’s like, no, let me just tell you don’t touch a hot stove. Right. And so, uh, But some people, some people are, and they just have to learn.
Like, my son is 13 and my wife talks about it all the time. He’s, you know, he like stuck his finger awhile back in, uh, you know, it was just it’s, they’re not like cigarette lighters in your car anymore. It was just like a power Jack, but apparently you can still get burned from sticking your finger in there.
Cause that’s when I saw it, it’s just like that he has to learn. He has to smell his own burning flesh before he. I told him not to do it and he did it anyway. And it’s like, that’s just how he is. He just has to experience it, to learn what not to be wished. Some people are like that. I’m probably like that in summer yards, but you know, if you surround yourself with the right people, if you listen to people that have been through this before, um, you can jump in.
Let’s talk about that a bit. How can folks, what are some of the kind of key lessons that you’ve learned about treating, do like a business, um, and not getting stuck in a [00:21:00] job cause so many, most. Get stuck in a job at best might be if they do well, maybe they’re a high paid, they have a high paid job, but it’s still a job, right?
Steve: [00:21:09] Yeah, for sure. Um, so I could talk on this for years, so I’ll try to keep it concise, but I do have to start with something funny that I have twin boys and they’re a 14, so about the same age as your son, but, um, I remember. Getting kind of annoyed at my wife being so diligent about one, all those plug covers in the plate.
You know what I mean? When a child proof things. Yeah. I remember telling her one time, like those are so stupid once the kids get a little older, but like when they’re toddlers and run around, I’m like, you ha you would have to have some small little metal object that could shove inside of it. At least like half an inch to actually get shocked.
I’m like, it’s so dumb. And then one day, somehow one of my boys found some metal thing and had to shut up, short it out. Uh, I mean, that’s incredible. I was like, it will never happen. But anyway, you have teenage boys, like when they’re young, anything will happen
Mike: [00:21:58] by the way.
Steve: [00:21:59] You know, [00:22:00] I think Mike, to answer your question.
Um, so yeah, there’s four, there’s four pieces. And so one of the businesses you are talking about, you know, one of the places where I spend. Um, the business I spend the most time in, which is maybe five to 10 hours a week is the CEO nation. And then we have a, this four pillar model in there. And so I’ll kind of answer it that way to keep myself on track or else I’ll talk for an hour again.
But, um, I’m going to go in reverse order because we teach them in a certain order because I think they’re easier to implement, but you’re going to go in order of importance, starting with the most important. Is the alignment in the business is personal alignment. Like having the business set up to give you what you want.
And here’s the problem. I don’t think setting the business up to give you what you want is the hard part. I think most people fail at it. Um, but it’s actually pretty easy. It’s not so it’s, I’m sorry. It’s pretty simple, but it’s not very easy, but actually the hard part of that is the other side of the equation of setting the business up to know what you want to give [00:23:00] you what you want.
It’s actually knowing what you want. I w if we do this thing, um, if you’re keeping score at home, you guys can do this exercise. We won’t have time to do it on here, but in our, when we do mastermind events or different live events, there’s a couple of things we do that are really cool. So one of them is the four questions and it’s more powerful if I took time, but I’ll just run through it.
So it’s, what do you want, what are you doing to get it? How’s that working for you and what are you going to do next? And when you ask them slowly and meticulously and be like, pick one area of your life, what do you want? Most people have don’t even know what they want. A lot of what they want is. And I’ll just share this with you guys, especially, um, if, if you’re young, it’s hard to have a lot of perspective.
I’m not slamming anybody. Who’s not married with kids yet, but you get a lot of world’s perspective. Once you have kids and you get married and then other people’s lives, like I’ve got two dogs, a cat, three teenage kids, and a wife. And literally they will all die. If I don’t do my part to take care of them, I guess I could probably [00:24:00] die.
They wouldn’t die, but you know what I mean?
Mike: [00:24:02] They might thrive, you know, somebody
Steve: [00:24:05] like to
Mike: [00:24:05] believe that they would, uh,
Steve: [00:24:07] they might be like, pretty sure couldn’t get out, but, uh, but when they’re babies, right? Like you gotta take care of it. It’s so funny. You just get this different perspective. But my point is you get a lot, you get a lot of what, what.
You when you’re forced with these decisions about marriage and kids and life and owning the business for years and taxes and all, all of a sudden you start to really hear differently about life. And you’re like, Oh, I have an opinion on things I didn’t think I used to care about. So it’s hard when you’re young.
It’s also hard when you get stuck in a rut, which a lot of us have, which is like, go to school, get a job, put, pay your dues work, you know, Work hard, get promoted, you know, whatever, um, jumped jobs, but only do it every year and a half. Cause it doesn’t look as bad or whatever it is, but you get stuck in this rut and then it’s like, this is the best way I can explain it.
When you go to a [00:25:00] superhero movie, you don’t sit there the whole time and get pissed because well Superman’s flying and people can’t fly. So I don’t want to watch this movie cause that’s not real. Like you suspend reality when you’re watching a movie, but. We don’t do that when we dream anymore. When we get old, especially when you have kids and a family and a corporate job, you start thinking about what moves you could like.
Well mean, I make 150 grand a year salary plus benefits. So you start thinking how much I got to hit that exact number, right? Like if you just, or my wife, because of this, or my husband, like, I need to be here for this, or I couldn’t work weekends or whatever it is, but you, you get caught in like the expectations of the people around you.
Right. And what you think you’re good at what you don’t think you’re good at. And so you don’t dream openly anymore with being detached from reality. So
Mike: [00:25:51] one,
Steve: [00:25:52] one big segment of people in business that are younger, don’t have a lot of life perspective to really know what matters to them yet, because they just don’t know.
I mean, and it’s fine. [00:26:00] I don’t know what’s possible. Yeah. And they don’t know what they care about or they haven’t got to know themselves. Um, And another set of people that get older that find entrepreneurship later in life are kind of already stuck in it. Right. And so they, they start formulating they’re there, they have blinds, massive blind spots like, or got our blinders on.
Right. And, um, those two things suck for helping you dream to create a business that will give you what you want. And what it really sucks for is deciding what you want. And so that was the biggest epiphany for me and the other ones all fall into place. After that, I mean, Once you really know what you want.
When you’re honest with yourself about what you want, then you just have to know how much money and time do I need you do that stuff. And it’s not like I want to make a million bucks. If I want to make a million bucks, I’m going to use it for where my kids are going to go to school. Where do I vacation?
How many homes do I? What kind of car do I drive? How much do I give to my church? How much time do I work out? What do I eat? Like getting really clear about what you want out of [00:27:00] life is the number one thing. And then after that you said some key lessons and they fall into place where it’s like, okay, well, what business model can give me that?
And then after that there’s businesses business, like, like you said, I just pay cash. I mean, I don’t have to figure anything out anymore. I can pay somebody. I can pay a coach or I can hire an operator or I can pay for a training. Whatever, like the tech part of it is what so many people I’m sure in coaching, because you’re so much, you’ve done so much more coaching than me.
I can’t imagine how many times you’ve been asked all these technical questions. Like people think that they need to learn how to wrap a subject to deal and do a double closing and they want to know all that stuff and that’s not really their problem. Right. And so I just think that’s the big setup is knowing what you want.
And then after that, going out and finding a business model that can give that to you. I mean, those are the two big pieces. Then everybody misses. Cause they get inserted right in behind the business model and they just start doing deals. Right. [00:28:00] You really pick the model, you know, and they didn’t pick the model cause they knew what they wanted.
They just got inserted and they started making money, like you said, and they’re just like throwing money off and now they’re like stuck in the middle of something. Yeah.
Mike: [00:28:10] There’s a couple of things. I think people, especially if you left corporate America,
Steve: [00:28:14] you’re,
Mike: [00:28:14] you’re used to being this employee mindset.
Like I, I
Steve: [00:28:18] work right. And
Mike: [00:28:19] I don’t, so I don’t know how to not work. Cause I just that’s that’s I like to work. I’m a hard worker, you know, work ethic from my family that, um, has carried me a long way, but it’s hard for me to do nothing, but which I don’t ever do. Cause I can’t do it. Can’t do it. Um, but uh, I think when you have that employee mindset, like sometimes people are like, well, I can hire somebody to do my first off.
We either think, well, nobody else could do my job, which is. Not true for anybody, like literally not
Steve: [00:28:50] in real estate. Um,
Mike: [00:28:52] cause you’re not as good as you think you are. Uh, and by the way, you don’t want, you don’t want that to be the case. Like you want to be able [00:29:00] to hire somebody to replace you and take you out.
Right. And so, or people say, well, when I, when I’m, when my business starts to do better, I can afford it. Right. And it’s like, well, what if you can’t afford not to do it? Right. So one of the things that’s interesting about, um, Ben David Richter is in our investor people group and been spending some time with him talking about the profit first model.
Cause he’s, he’s actually kind of licensed profit first
Steve: [00:29:23] for,
Mike: [00:29:26] and you know, it’s just this idea of, well, how much are you worth? Like what should you pay yourself? And start to think about what that seed is worth, not you, what is the seat worth? What’s the role worth? Because once you develop that role, it’s like, okay, well that’s that job pays 60,000 a year or whatever.
It’s like, okay, But then you’re going to find out that you’re sitting in a seat half the time. That’s like a $10 an hour job. It’s like, okay, I need to replace myself there because I’m worth more than that. And even the $60,000 job or 80 that whatever, whatever it is, like find a way to do enough business to offset that because that’s, that’s what you do as a business owner.
You’re [00:30:00] not, that’s how you get out of the employee kind of rut, right. Start to think of. I kind of advise people there. Here start to think about every job in your company, every seat, whether it’s an admin or acquisitions manager, disposition manager, lead generator, whatever it is, lead manager, like what, what does that job pay and what job, what seats are you sitting in and how do you get yourself out of those seats?
Cause you know, you should believe in your mind that you’re way too expensive for any of those seats. No,
Steve: [00:30:27] absolutely. Yeah. Working on your business versus ENA is no joke. I mean, there’s a reason to work in it. Hustling grind is not a business model or a strategy, but if it’s done correctly, it’s, it’s part of mastering your business and innovating and creating best practices.
And then you do that to study it and master it and be able to hand it off and know how long it takes and knowing what to do. The leading activity metrics are. And you understand as you, but you don’t do it just to get done and make money, but you do it so that you’re making money while you’re learning as they can train somebody.
Right. There’s a means [00:31:00] to an end there. Yeah. Right?
Mike: [00:31:01] Yup. Well, let’s talk real fast about, um, you know, sometimes we build a team to do stuff. Sometimes we
Steve: [00:31:06] bring
Mike: [00:31:07] in vendors or we outsource stuff to somebody that’s virtual assistants on it’s call centers, lead generation stuff. There’s a number of ways that you can.
You know, if it’s, this is how I kind of, how I think about it. If it’s not a full time job for somebody in your business, or even if it is like, I know for a lot of people that I hire, I’m
Steve: [00:31:24] like, we could figure
Mike: [00:31:25] that out, but we’re going to be playing catch up with somebody that does that professionally forever.
Like if that’s all they do, we’re never going to be as good as them. So why not just hire them? And so, but just talk about, you know, how you think about what parts to outsource versus what parts to kind of build internally.
Steve: [00:31:40] Yeah, absolutely. Um, I put some notes here too. I want to. I’ll answer your question, but I want to start, cause I know we don’t have a ton of time.
I want to circle back to something on, on employees I think will tie in really well. Um, but here’s the key like, think of it this way. I like to think of an analogy is I think this will help people. So when we w w well, this, this is what [00:32:00] predicates it. So when we did the turnkey business, all the time, guys would be like, well, I just want to buy the house off you, and then I’m going to manage it.
And I’d be like, okay, why do you want to manage it? I already know it’s cause they think they’re going to save 10%. Right? Think they’re going to say money. And they were like, Oh, it’s cause I want to learn. I want to kind of get my feet well that I want to understand. And I’m like, all right, if that’s really your philosophy, like literally the only reason you would ever do that because you want to become a property management company.
Like that’s literally like going to back to school for five years to get an accounting degree and then sitting for the CPA exam and passing it. Just so that you know, what the account is going to do when he did it as your taxes like that is no. Nobody could do that. Your point. I mean, one of the reasons we hire several vendors in, I mean, just like for instance, you guys were the investor machine.
I, I can buy list source stuff, dirt cheap. I can skip trace probably in a very similar way, dirt cheap. We have spent years accumulating all this access to do things, and it is a fricking nightmare to deal with it. And then one of the things I said about John [00:33:00] McCall, when they were doing our mail and what, what, what did I love about you guys now?
All these years later, we look at it as a, um, we plugged you guys into a need. When I did it with Joe, all those years later, I didn’t know what I was doing. But like, we would get busy with our lives and no matter what, all of a sudden we’d be like thinking team, Oh, nail hit. Because like all of a sudden we’re getting all these notifications.
So in spite of our busy schedule, it was like, we still had leads. And that’s a big key you guys with, with these vendor relationships and things, whether it’s like building a website or, or like with investor machine with you guys, that’s the way we use you guys for that. Or. Um, just, we do several things with title and there’s other pieces of components where just to do all that, just like that property management example, people think I’m saving 10%, but there’s two real costs.
One of them is a physical cost of spending your time doing stuff.
Mike: [00:33:56] Yeah. And secondly,
Steve: [00:33:58] there’s a huge opportunity cost, [00:34:00] not only of spending your time, not doing something else, but there’s an opportunity cost of sucking management. That’s right here to property manager and your vacancies are twice as long.
And your maintenance projects go out of hand and you don’t know how to proactively look around the corners cause you haven’t done it. Right. And you don’t get economies of scale. Like with printing with PR with, with mailers or whether it’s your property manager, that’s doing mow and yards. Cause there they’re more than 400 of them.
It’s, you know, it’s just crazy that people are constantly tripping over dollars to pick up pennies in the business. And we’re kind of wired that way as real estate investors. We think we’re getting a deal, but just because something the cheapest or we’re in control of it, it absolutely doesn’t. It’s not part of owning a business.
If you’re a street hustler and you want to get the best deal. Cool. But my dad used to like drive halfway across the city to fill his gas tank up because it was like 3 cents cheaper. And I’m like, right. Yeah. I’m like quite positive. That’s not worth your spot. [00:35:00] Yeah. But
Mike: [00:35:00] you know, what’s funny is, uh, and I’m still, you know, when you’re a real estate, you’re always kind of frugal, right.
I I’ve always been a cheap ass, so, but, uh, I’m getting better. What I’ll say now is I appreciate like services and stuff. That’s like gonna save my time. I used to, like for many, many years, I w if I was going to buy something online, I always like sort, and. Usually it’s sorted by like price lowest to highest or whatever.
And so now there’s a whole bunch of stuff that I, the first thing I do is filter. What’s the highest price thing. It’s weird, but it’s like, I’m trying to buy my time back. Like I
Steve: [00:35:31] don’t, if it’s time-related or I don’t,
Mike: [00:35:34] I don’t really buy a lot of like junk. I mean, I buy some junk. My wife says every day is Christmas for me.
Cause I get an Amazon package when it’s usually like mosquito spray. I’m just like buying stuff on it. It’s not like I’m like. Buying myself gifts every day. I’m buying stuff that we think we need and I saved my time going to the store, but I often look at like, what’s the highest price thing. It’s not that I always buy that, but I’m
Steve: [00:35:54] like,
Mike: [00:35:54] I want, what’s the best.
I don’t want it to break. If it’s a service, like tell me what the best is [00:36:00] because I’m trying to buy my time back,
Steve: [00:36:01] you know?
Mike: [00:36:01] So not everybody’s in that position and I’m not saying that to brag because I’m not talking about, you know, I’m not looking at like the most expensive cars, like necessarily, right.
But.
Steve: [00:36:12] I just value
Mike: [00:36:13] quality, like the product and time, uh, over anything else right now,
Steve: [00:36:19] you know, young that way too. I mean, I just, I overlap the user ratings or consumer ratings out high price. So I do the highest price funds and the consumer ratings. I look for the highest rated. Highest price one. I like the balances there, you know, but it’s funny.
I don’t, I don’t have fences. She watches like now I’m sure I have a more, I don’t want to watch him
Mike: [00:36:44] 15 years. I mean, I don’t, I don’t it’s it’s right here on my phone. Like, why do I
Steve: [00:36:48] need that? Exactly. But I’m the same way as you, like, if I go anywhere VIP or upgrade or like, I mean, when I go the airport, I just, I always valet park [00:37:00] because.
It’s an extra hundred bucks. If I’m gone for three or four days to like literally have my car dropped off at the door that I walk in and it’s running for me, either warm or cool, what I need to do it. But like, you know, that’s convenience is a big deal and that’s, but, but, but getting back to something that we were talking about to drive this point home, I think is that when you really understand what you want and you and I have decided that.
Having crap that breaks that’s cheap. Like I’m going to exactly the same way you are. Like, I get pissed when my wife will buy stuff and it’s always like, she’s like I was trying to save money and I’m like, but now we don’t have whatever it is. Cause it broke or it wore out or I would’ve much rather got something that was nicer.
But, um, Hey, I want to say, I know I’m probably breaking a flow a little bit. We’re probably short on time, but I think this would be super helpful for your people. If I can, can I throw three things in really quick?
Mike: [00:37:46] Let’s
Steve: [00:37:46] do it. Okay. So we recovered something that I wrote notes down. Like while you were talking, I was like feverishly.
Cause you really reminded me of something important when people are hiring somebody, there should be a return on investment that’s with a [00:38:00] vendor or a person. And so when you’re bringing a vendor on, you would look at, don’t look at it as an expense. This is, I wrote it down when we were talking. I appreciate it too.
Right. But I want you guys to think about this. Um, Because it goes for vendors or employees. And I think this is there’s three reasons that what we found with the CEO nation, you know, the research and stuff we’ve done is what people get limited, why they don’t outsource stuff and why they don’t hire people.
Um, number one is they don’t, they think it’s an expense, but it’s really an investment. And the typically you’re going to get a three to five X return on a good employee or a good vendor. Hmm. I don’t have time to break that down to. I know we’re trying to stay on time. Just realize. The money you put in should have a three to five X bottom line effect into your business over the coming months, or it could take a year.
Sometimes it just depends on what it is. Um, but, but even if you hire a $30,000 a year admin, I mean, That person should be freeing up. Somebody who frees up somebody who frees up your sales guy [00:39:00] that goes out and does a hundred grand more business. You know, it should, that three X is legit and we’ve seen it time and end time out is what you should be looking for.
Um, another thing is just think about it this way. If you don’t think someone’s as good as you, like, you can, you can do your magic. They’ll do better than anyone in the world or whatever. You have a screws, first of all, but, um, or you can do acquisitions better than anybody. So even if you’re 120% good, like you’re a hundred percent is great.
You’re 120% of that activity, but you’re doing five things at any given time, right?
Mike: [00:39:30] Let’s call it six things
Steve: [00:39:31] for easy math. You’re 120% good, but you only do it 20% of your time. That’s effectively. If I make up my Steve math, that’s 24% effectiveness cause I did. It’s 20% of time, 120%. Good. But if I found someone who an employer and a vendor is even only 80% good, but they do it a hundred percent of their time.
I mean, I’ve literally got like a triple that’s that three times X, like literally they’re 80% effective. Cause their 80% is good, but they’re 100% of their time. Right. And so [00:40:00] that’s how that comes into play. So they don’t have to be as good as you. Right. And the second and the third thing, um, people don’t think they can afford somebody else.
But if you bring someone on, especially like an employee, like hiring a 2000 or $36,000 a year, employee, girl, or gal to work in your office is three grand a month. It’s not $36,000 check. Right. And just like, when you hire a vendor, if you’re going to pay five, 10 grand, or 20 grand a month for a vendor, some of our marketing vendors are expensive.
Um, our VA’s are people. We look at like that, right. But they have an immediate return on the bottom line. And so all we have to do is affordable. We call it runway. So like when you hire someone, you just have to know when the break, even point of that person, that circus usually going to take about a month to find out about a month, you get them in trained in about a month or ramp up.
So about nine 90 days, they should be paying for themselves by effect on your bottom line. Same with the vendor. It’s not overnight. So you can’t bring someone on for a month and quit or hire someone to fire them two months later. But I know I want to, I [00:41:00] know we’re running on time and I wanted to, I say those Mike, because I just think if, if we wanted to leave people with really important stuff on how to own a business, instead of a job.
I think thinking that things are expenses thinking nobody’s as good as me and thinking I can’t afford things are literally three of the worst, like cancerous thoughts that you can have in your head. And it’s, they’re so normal for people to have, especially when you’re entrepreneurial and you’re smart.
Yeah, I know. And nobody works as hard as me and they’re just all lies that we tell themselves and not even lies. It’s just, we don’t have the right perspective. So anyway, go box.
Mike: [00:41:34] No, you’re good. You’re good. Hey buddy. Yeah, I know. You’re, you’ve got to run here shortly and we’ve been going at this for a while, so we could probably talk all day about this stuff, but I’m real fast that folks wanted to connect with you.
You’ve got a number of things going on. You’ve got your own podcast now, where do they go to kind of connect? I want to be able to share some links. Yeah,
Steve: [00:41:49] appreciate that. Um, so just. Steve Richards on Facebook. That’s a great way to go. DMA if you want to chat, but I’m the CEO nation. So our podcast is iTunes or [00:42:00] Stitcher.
Wherever you listen. The CEO nation, we have a Facebook group, thus CDO nation. And I’m the CEO nation.com. It’s okay. Anywhere around there is where I’m my heart. Is there the team architect? Yeah, we have that helps people, teams kind of filter through their real estate business. We do some coaching. We do all kinds of different things, but everything.
For me filters through trying to create impact for entrepreneurs. And it all starts with the CEO nation. So you have me on it’s been
Mike: [00:42:27] cool. Absolutely. And I was on your show here for the reason. I think he just publish that one. So, uh, um,
Steve: [00:42:33] you and your twin. Yeah.
Mike: [00:42:36] Does it Dave?
Steve: [00:42:37] Yeah.
Mike: [00:42:42] yeah.
Steve: [00:42:43] Yeah. So I’ve
Mike: [00:42:44] been called, I always say I’ve been called worse.
Steve: [00:42:47] Yeah.
Mike: [00:42:48] Cool, man. Well, Hey, appreciate you spending some time with us. We’ll have links for a bunch of these things down below in the show notes here. For those of you, uh, by the way, were,
Steve: [00:42:55] I could say we were
Mike: [00:42:56] recording the show live. Of course we record every show live.
We’re actually broadcasting [00:43:00] live when we recorded this and, uh, our Facebook group, which is called the professional real estate investor network long name. But if you go to flipnerd.com/professional, we’ll redirect you there. So we’re shooting about one show a week, the professional real estate investor show on average about one show a week, live in the group.
And if you joined the group, we’ll notify you when the shows are coming up and. You can join live. We can do a little Q and a when we have time. So go to flipper.com/professional to join our group and, uh, and learn more. And it’s, it’s, it’s not a huge group. It’s whenever going to be a group of tens of thousands of people, because, uh, again, professional as the name sounds is not a new beast.
We love newbies. If you’re new, that’s great. We were all new ones too, but there’s a lot of other groups that service you guys, and not a lot that really focus on professional folks that are doing a lot of volume and have a lot of questions. So, um, Steve, thanks again for joining us today. Great to see you, my friend.
Steve: [00:43:49] Yeah, I just want to enclose it and say it, the reason why I’m here for any show you do or asked you to be on my podcast or connect with, you know, this Facebook group, I’m excited for it to grow [00:44:00] because everything you do is top notch, brother. I appreciate everything you do. And anyone
Mike: [00:44:03] less than 10
Steve: [00:44:04] words should be check out anything Mike’s dealing because, um, I think very highly of you and what you’ve done.
So I appreciate it. I appreciate that, man. I appreciate
Mike: [00:44:11] that. It means a lot. Sometimes you wonder, what were you doing? Podcasts? I’d be like, is anybody listening? Right. Well, that’s a,
Steve: [00:44:17] anyway, I appreciate those kinds of words. And everybody
Mike: [00:44:19] we’ve been at this for a long time. This jazzes me up just to get, to spend time with friends and bring you folks that can share some, some great insights and knowledge and wisdom.
And some it says for sure. So you can check out all of our podcasts on flipnerd.com and again, go to dot com slash professional to join our professional real estate investor group. So everybody have a great day. We’ll see you on the next show. Thanks for joining me on today’s episode, there are three ways I help successful real estate investors take their businesses and their lives to the next level.
First, if you’re in search of a community of successful real estate investors that help one another, take their businesses to the next level and a life changing [00:45:00] community of lifelong friends. Please learn more about my investor fuel real estate mastermind. By visiting investor fuel.
Steve: [00:45:11] If
Mike: [00:45:12] you’d like a cutting edge solution for the very best done for youth lead generation on the planet
Steve: [00:45:18] where we’re handling the lead generation
Mike: [00:45:20] for many of America’s top real estate investors, please learn [email protected]
And lastly, if you’re interested in them, Free online community of professional real estate investors that isn’t full of spam solicitations and newbie questions. Please
Steve: [00:45:39] join my free
Mike: [00:45:41] professional real estate investor Facebook group by visiting flipnerd.com/professional. [00:46:00]
Source: flipnerd.com
There are so many benefits to getting outside of your comfort zone and learning about another culture, and what better time to do it than in college? On this episode of the Zing Podcast, we get all the tips and tricks to make the most out of your study abroad experience.
Source: soundcloud.com
For this podcast about financial planning I sat down with Scott Trent of Skylight Financial. During the podcast we discussed financial planning in general, qualifications to be a financial planner and how a financial planner can benefit homeowners and real estate investors. This podcast is helpful for those who may not be certain what a financial planner does and can learn how they can benefit from working with one.
I hope you enjoy the podcast and find it informative. Please consider sharing with those who also may benefit. Listen via YouTube: You can connect with Scott Trent on LinkedIn.
You can connect with me on Facebook, Pinterest, Twitter, LinkedIn, YouTube and Instagram.
About the author: The above article “Podcast #11: Financial Planning and Real Estate” was provided by Luxury Real Estate Specialist Paul Sian. Paul can be reached at [email protected] or by phone at 513-560-8002. If you’re thinking of selling or buying your investment or commercial business property I would love to share my marketing knowledge and expertise to help you. Contact me today!
I work in the following Greater Cincinnati, OH and Northern KY areas: Alexandria, Amberly, Amelia, Anderson Township, Cincinnati, Batavia, Blue Ash, Covington, Edgewood, Florence, Fort Mitchell, Fort Thomas, Hebron, Hyde Park, Indian Hill, Kenwood, Madeira, Mariemont, Milford, Montgomery, Mt. Washington, Newport, Newtown, Norwood, Taylor Mill, Terrace Park, Union Township, and Villa Hills.
Transcript
Paul Sian: Hello everybody. This is Paul Sian Realtor with United Real Estate Connections licensed in the state of Ohio and Kentucky. Today I have with me Scott Trent Financial Planner with Skylight Financial. We’re going to talk about financial planning and add a little bit of real estate information on that. Scott, how are you doing today?
Scott Trent: Do an excellent, how are you Paul?
Paul Sian: Good. Glad to have you on. So let’s get started, tell us a little bit about your background. What do you do and how long have you been doing it?
Scott Trent: Sure. Well, it started in 1999. That’s just wrapping up college and started working for a local retail bank back in the day that was bank one, which of course became chase bank. And uh, for about three or four years with the banking industry, had a couple of different roles started off essentially kind of right on the teller line, cashing checks and making deposits. And then within about a year I was tapped for personal banker role and was able to acquire my insurance and investment license and to be able to expand the services I provided my client. And you fast forward to working primarily in that space and the investments in the insurance space. A couple of different companies such as nationwide in western southern and was right about 2007 then I had an opportunity to expand my role into leadership and management and so from about 2007 to 2017 I’ve trained and developed and recruited and was in a leadership position in the financial services industry. And right about 2017 I just decided to lean back towards my personal practice and spend more time with my clients, which really is my first love is just spending the time with those clients, helping them achieve their goals and seeing their eyes light up when you give them hope that they can actually accomplish the things that they set out to accomplish when they first signed on with that first job right out of college.
Paul Sian: Very nice. You did mention something about licenses and they in your statement there, so like I guess we can go on with that. What kind of licenses are you required to have and what kind of licenses are helpful to have in your line work?
Scott Trent: That’s an excellent question. So at a minimum you want to work with a financial planner that has an insurance license and at least one securities license. And the reason for that is because any financial plan is going to ideally holistically look at the different moving pieces of someone’s life. We’re going to look at cash flow and protection, risk management, wealth accumulation, tax reduction, retirement and ultimately a state of planning. And it’s with those different areas, there’s going to be some, some expertise needed as it relates to saving money, investing money as well as protecting your income and your assets. And so again, at a minimum bar you’re going to work with someone who has an insurance and investment license. On top of that, there are other designations of the industry provides such a CFP or cou chfc is going to emit apple bet soup out there of different designations that you can achieve. But I tend to tell people you want to work with someone. Again, that is looking at from a big picture, looking at both the protection and the wealth accumulation side. And I would say just as important as licenses or designation. Do you want to work with someone that has a rather quit experience?
Paul Sian: Okay, great. What kind of licenses do you have?
Scott Trent: So I have an insurance license in Ohio where where I reside and also uh, about a dozen other states that I conduct business said on a regular basis as well as uh, a series six license, the series 26 license, a series 63 license. And I’m also approved for financial planning through my broker dealer.
Paul Sian: Okay. So it looks, sounds like some of the licenses to our state restricted just like real estate or are all of them state restricted or though some of their general that you have licensed you can work anywhere?
Scott Trent: That’s a great question. So typically what happens is any insurance side of the house, once you are licensed in the state that you reside, you can fairly easily become what they call non-resident license in other states that you wish to do business and which is essentially filling out a background report, paying a fee and they kind of stamp stamp off and approve it. And so then in that way you’re able to conduct the insurance transactions in those states that you have clients that are, you know, for example, I have clients in the west coast and east coast ever where in between and I, I need to be licensed in the state that they reside as well as my own. On the security side or the investment side, you have one set of licenses that determines what type of business that you can conduct for your clients. And then the series 63 that you might’ve heard me mentioned that says that I can service the clients that reside outside of Ohio or I do, but you also need to be registered and approved and those surrounding states as well. So there’s a bit of administration that needs to take place, but at the end of the day, as long as you have filled out the proper forms and you’re mindful of your continuing education, just like you are as a real estate professional, you should have no problem servicing clients anywhere in the country.
Paul Sian: Okay. And we did a, you did kind of talk about, you know, one financial planner does coming, explained it in the light detail and through your intro, can you boil it down to us, boil it down to somebody who’s never met a financial planning before. We never talked to a potential central planner. What, you know, what exactly you do and how can you help somebody?
Scott Trent: That’s a great question. So you’re, from a bullet point standpoint, I would say it’s really about the why, how, and why and the what speaks to goal clarity. What I find working with our clients, Paul, is that mom and dad or partner’s, they’re getting up every day. They’re going to work and they’re doing their job. Then they’re coming home and will oftentimes doing mom things and bad things and catching their breath and then we get the little ones off the bed and next thing you know, we’re waking back up doing it all over again. And you know, kind of big picture. Intuitively we’re working to provide for our family and we’re working to have a great lifestyle. But you’d be surprised that most often people aren’t actually having a good conversation about what they’re really trying to accomplish and setting benchmarks for things like we want to have x amount of debt paid off in three years, or we want to save up for a great family vacation.
We’ve always wanted to go overseas. But yeah, we ended up just going to Florida every year because we don’t take the time to plan it through. And next thing you know it’s summertime. And so it’s about that clarity that the conversation that needs to happen between the partners in a hole, the spouses often let’s say, hey, where are we really getting up and working for a day to day basis? And so goal clarity, what do we want life to look like? If we wake up 20 years from now looking at a rear view mirror, what things would we have wanted to accomplish, make, make it feel like we’ve made some progress. So that’s a lot of it. The houses, the strategy or the roadmap. So once we identify what a client wants and help provide, help them have that conversation of clarity among all interested parties, then it’s how do we get there? And that’s where our expertise comes in and that’s looks like cash flow design that looks like different vehicles or products sometimes. Sometimes it’s as it’s a matter of saving, saving the right amount and the right kinds of buckets. And so again, that’s that more technical roadmap piece of it and it ultimately the why of it is this, the accountability, it’s, it’s part of my job is to keep the, why are we doing this in front of them? It’s what, what do we want to feel, what do we want to experience? And so if we, we’ve looking to the future and we can see our future selves waking up with the confidence of knowing that, that all of our financial lives are in order, that all the moving pieces are fitting together like a, like a perfect puzzle. There’s total efficiency there. It’s, it’s making sure that we keep that in front of our coins to say, Hey, this is why we’re saving this much. On a monthly basis. This is why we have that insurance in place. This is why we are investing in these types of instruments and vehicles. It’s all about, it’s about the experience that we want to create for ourselves and for the people that we love the most. So I guess that’s a little bit more than bullet points fall, but in a bullet point, it’s the why, how, and why. Otherwise it’s the goal, clarity of strategy and accountability that we provide.
Paul Sian: Actually that’s, yeah, that’s very well said. So it’s not just long term planning, it’s not just you know about retirement. It’s also about your short term. If you want to go, like you mentioned the vacation plan or even then you know, my case, I deal with a lot of real estate investors. So somebody who wants to set up a plan for investing in real estate, you can help out with that too. Correct?
Scott Trent: Oh absolutely. And so, you know, the time frame, it has a lot to do with what their client has going on in their life and this season that we meet them in. So, you know, for example, and we hear a lot about, I’ve really liked to get in to real estate investing. And then we say, well, when do you see yourself doing that? And sometimes they’ll say, well, you know, in the next two to five years. And sometimes they say, well, like right now I can’t. And so we’ll take a step back again, kind of coordinate all the moving pieces of their financial world and letting math and math have a seat at the table and not just intuition and not just kind of what we want and, and you know, let things that, you know, sometimes we see something on the internet or hear a friend talk, we’re like, Ooh, I want that. And so then we just go do it. And so again, that’s a big part of it. But also its let’s, let’s have the emotions have a seat, but also led logic and math and rationale habits. Have a seat, the tables.
Paul Sian: Well, yeah. And you mentioned long term plan, also short term plans, looking at things. So, I mean just uh, and we can go a little situations or specific, basically you have to look at everybody’s individual situations and how they’re, you know, what they’re doing and what their goals are. Let’s say we have somebody who’s a, you know, there were w two income earner, they make x amount of money per week, per month, what have you, and so they’re interested in, in a real estate investing. What kind of general advice would you give to that person and you know, maybe they don’t have a full down payment saved up yet and they need 20-25% for whatever they’re trying to buy. What kind of suggestions would you have for them.
Scott Trent: Paul What I would say with someone who’s looking to take their first step into the financial independence or looking at that opportunity to, to start a real estate investment portfolio, it is always looking at it through the filter of what we call our four pillars of financial security or the value system, that value system that we use when it relates to financial planning. And those things are going to be making sure that you’re protected against major financial risks, that you are becoming a world class saver, saving upwards of 15 to 20% of your income on a monthly basis, making sure that you have a life events fund. We have says that I have upwards of a year’s worth of my income in places that I can access outside of my qualified plans such as his Iras so that I’m able to deal with not just rainy days in emergencies, but I’m also able to take advantage of great opportunities like I ain’t a great property for a great price and also taking a look at the debt that I have on my balance sheet that already exist and so we would do with a client is to say, Hey, let’s take a, let’s take a holistic look or three 60 look about how a purchase of a real estate property, what impact these other creek cake, key critical areas of financial planning and your overall wealth strategy.
Paul Sian: Okay, great answer. You had mentioned a debt in there. Let’s go talk about that a little bit of an most people are buying real estate using that, you know, your mortgages, commercial mortgages, residential mortgages. What are your thoughts on debt? I mean a good, bad avoiding to some that’s good, bad. What do you think?
Scott Trent: That’s a great question too. I think that it is difficult especially you’re right up in the Midwest to ever say Ted is good. However, when it comes to that, when I, when I’m, what’s an easier answer to give is the what, what is the fat kind of debt and so bad debt is higher interest rate, unfavorable terms, excessive fees, consumer base that such as credit cards or retail store cards, things that we, that that we acquire just for lifestyle. Because a lot of times what that represents on someone’s balance sheet is that they have let their once supersede their actual needs.
And so what lending institutions are happy to do is to say, hey, if you want an extra money to be able to keep up with the Jones’ is it will give us a call or come see us on credit card.com and so I always caution against that kind of debt because it speaks usually to a bigger problem on the other side of things. Acquiring that for the purpose of acquiring assets like real estate, like vehicles, that can be very wise decision because it helps you leverage your own cash flow and leverage your own opportunity to earn income and your own savings and oftentimes, particularly as it relates to real estate for home purchases for example, there are, there’s some tax favor ability to be found with those kinds of debt. And so what I’ve, what I’ve loved the, the good debt, Paul, the best debt is low interest rate, tax deductible kind of debt.
That’s good debt. But again, this kind of summarize, I would say the bad debt is usually represented by death that we were required to just improve our lifestyle, close trinkets in the house, furniture, things like that. That’s usually about ego, about lifestyle as well as just as much to do with our neighbors and our neighborhoods. What does ourselves or the people that we care about the most.
Paul Sian: You had mentioned the taxes in there too. I do. I guess Texas do come into play as a financial planner when working with your clients.
Scott Trent: Yeah, absolutely. And so one of the things that we’ve helped the client with recently is to help weed through the confusion of the current tax situation because of the tax cuts that will were implemented in 2018 and so as an example, all you brought up about, it’s not just long term planning, it’s not just retirement plane that we help our clients with.
It’s also short term goals. And so taxes is a great example of that because what we do know that unless there’s some overall legislation that gets passed, what we can expect is that in December 31st, 2025 the current tax cuts are going to that. So another way to think of that is come January 1st, 2026 everyone’s taxes are going to go up if they’re earning the same income of the art today. And with that creates opportunity. It’s one of the things I’m working with a family right now on is this idea of exploring, does it make sense to take advantage of after tax investing rather than what most people focus on kind of cause they told to just what they see their neighbors and their friends and family doing, which is maximizing their pretax dollars is what could happen without getting too far into the weeds fall is because of the current tax environment.
We might be deferring taxes at 20 or 24% all the way to wake up and later in life and find that we’re now paying taxes on those same dollars at a higher rate, 30% 32% 36% and higher. So we just have to be careful about that. And so taxation is a area of emphasis that is necessary working with any financial planner. And I would just caution folks that if their financial planner is not having a meaningful conversation about long term impact of taxation, then they might want to seek out a higher authority on the matter or maybe it might be time to start interviewing other financial planners. I think the asterisk that I would add there fall is that that’s also why we partner with local professional CPAs so that they can have the kind of final say so in these matters as it relates to wealth building in financial planning in the in the area and Ronald Taxation, we are very familiar with that have very powerful tools that speak to taxes.
However, what we are not as certified public accountants and so as you can imagine, we want to make sure that we always work with someone who, who is that when it comes to crossing those ts and dotting those I’s. Also, I think with the financial planner, bigger picture is working with a successful financial planner also should give you access, favorable preferable access to the financial professionals that they network with. Such as personal make herself a professional real estate agent as well as an attorney as well as a property casualty specialist to CPA, a benefits consultant if it’s a business owner on and on. And so it’s really working with the right team, but ultimately working with someone who is going to be that can symphony conductor or that quarterback of their team, who’s going to take the responsibility to make sure that all the orders are running in the right direction.
Paul Sian: Great answer. Actually that wasn’t, that answers my, uh, it wasn’t going to answer my next question, which is a financial planner is not a solo person. They work with, uh, with a team as you mentioned, you know, working with the accountants, the attorneys, CPAS, what have you. So that’s a great answer. We had discussed earlier you had discussed about building up an emergency savings fund. Then you mentioned a year, which is great. And that’s the idea was the year, you know, we’ve heard online from anywhere from three months up to six months. I mean, what’s, how do you suggest people go about building that savings funds? I mean, especially for somebody who thinks they’re living paycheck to paycheck, I mean, where do they find that, that room, that gap to start, start that savings fund?
Scott Trent: SoI guess it would clarify first the difference in an emergency savings fund in a life event. It’s fun. So for an emergency savings fund that’s best suited typically at the local bank, and that’s going to be in the form of a savings account on or maybe even a and no fee checking account. And that’s going to be where you want to have about three months, maybe six at the most. A lot of it has to do with the comfort level, the individual client. But typically three months is more than fine to have on hand at the local bank. That’s money that I’m an ATM card or a debit card swipe away or uh, a dash over to the local branch away from getting access to my funds. Outside of that, the next six to nine months that we talked about from a life events that doesn’t necessarily have to be in cash at the bank, but it just needs to be somewhere outside of a qualified plan.
Because as you probably know, and your listeners know, Paul, money that’s inside of a qualified plan is largely inaccessible until I’m 59 and a half. And last I want to jump through hoops, pay interest rates to access my money or God forbid pay taxes as well as IRS penalties. And so when we talk about life events, fun big picture, we’re talking about braces for the kids. We’re talking about a $2,000 car repair emergency that jumps out the bushes on us. We’re talking about, um, the vacations that we want to go on. So it’s the experiences that we want to have in life for the people that we care about most, but it’s also the things that life is inevitably going to do, which is getting, throw those curve balls. Dot Us good and bad. So as far as how do we get there, take baby steps, it’s just sometimes it’s as simple as going to your HR coordinator, your payroll director and saying, Hey, can I split my direct deposit between two counts right now?
This is kind of hitting the checking account. And then from there it’s, it’s um, you know, all bets are off and it’s a feeding frenzy. And ultimately, uh, fortunately for the bills and the lifestyle expenses and gas money and everything else, uh, the best way to say fall, no matter how you do it or what vehicles you use is systematically and consistently. So it’s those things that you don’t have to pull ever go online, go to the local branch and things that just happened. That’s why good and bad, most of Americans well is in their qualified plans are the 401k because it comes out before it ever hits our bank account. It’s out of sight, out of mind. It just piles up. You know, the, the, the tough part about that is, again, that’s a qualified account. So there’s some heavy restrictions that keep us from being able to access our funds when we might need them most.
So just like the 401k if for example, I talked to a college student this afternoon and it was as simple as go to the HR director happens, split your direct deposit into two separate accounts and just start taking out $25 a pay check and having that diverted to a secondary account just so that it starts to pile up and the idea that the money’s there but really need it, but it’s just that extra layer that helps reinforce the discipline to say, okay, I’m not supposed to touch that. That’s for future purposes. That’s for rainy days, real emergencies and not frivolous spending. And so start with baby steps. And next thing I would look at is working with an advisor who has tools to help you analyze your spending. Your cash flows ideally will help bring awareness to where those dollars are going. What I find fall is that what most of our clients, there might be 10 to 15% of their monthly income.
That just seems to just disappear. It’s not accounted for it. And so using the tools such as, uh, we use a tool, Claudine money for example, and we’re personal financial view that will really electronically analyze someone’s spending habits so they can say, oh, I wonder how much money we’re spending out spending on a monthly basis eating out. Well, click, click, click. This is exactly how much that is. And we can set short term goals on what we think that should be and we can keep, we can track our progress through these financial tools. The other thing that we look at in a financial planning process is we want to analyze the cost of the services that you’re currently receiving. So for example, when we work with our lending and credit specialist or real estate professionals or CPAS or attorneys or property and casualty specialist, we’re making sure that our clients are getting value, not always looking for cheap.
In fact, the chief is not a word that I tend to use or any of the professionals and network with. We’re making sure that we’re getting the best value since we have a finite amount of dollars coming in. We want to make sure that those are being used, maximized and leveraged the most appropriate way. So it is taking the baby to start somewhere. It is working with an advisor to find the awareness of where the money’s actually going as well as taking a look at the cost of service for the services that we’re currently enjoying as well as I. Lastly, I would say looking for ways to minimize the impact of interest rates wherever possible, whether that be through right refinancing or creating a debt payoff strategy so that we are avoiding those excessive interest rates in feet.
Paul Sian: Yeah, it takes a, an overall, you like you’re, you’re saying you have to look at the budget, get to look at the incoming money, outgoing money as well, and kind of build that plan. So I mean that’s, that seems you to be your specialty. Very much. So. Moving on, let’s go back to the topic of real estate. And I go over one of the controversial statements made by Gary Vee, Gary Vaynerchuk. I mean he had, he had say stated, uh, rather than buying a house, it’s better to go, you know, go rent and I don’t know that upset a lot of real estate agents too. I mean that’s kind of our bread and butter. We’re, we’re buying and selling real estate. I’m of the opinion though. I mean I, I help a lot of buyers and sellers with the investment real estate too. So it’s not that, you know, I have to own a house personally, but I can own an investment property and I’m helping somebody else, you know, live in a place. What are your thoughts on the ownership of a house or renting, renting the place to live.
Scott Trent: Interesting and not, I read an article last week that talked about the difference in buying and renting or leasing in different pockets of the country. And as I said, it’d be four people. I work with clients all across the country and in some markets it’s really hard to justify a home purchase as it, as it compares to renting a home. You know, for example, a lot of clients on the west coast where housing market is very tight and there’s certainly a premium for home homes costs there in that part of the country. And so what we find is that the monthly cost of leasing a home can oftentimes when you consider the fact that with home ownership, I also am now responsible for property taxes, homeowner’s insurance, as well as the upkeep of the property that that can sometimes more than double the living expenses as it relates to housing. Whereas compared to here in the Midwest where sometimes it can actually be much more cost effective to own a home rather than rent a home from a monthly cash flow outlay. Even when you add in insurance and taxes and the kind of monthly maintenance, if nothing else, it’s oftentimes a break even when you consider all factors. So I think that would go back to as you say, Paul, you know, or Scott does it. Does it make sense to own or rent when you think about Gary V’s advice way I would look at that is again, just like any other decision that our clients would come to us and ask our feedback on. We would take a, at the basics we’d say, okay, before pillars of financial planning or financial security or these value system that we use to build our clients’ financial plans on the perfect protection, the become a world class save or having the life events fund to be debt free or have a, have a plan to get us there.
If a, if home ownership or home purchase would get in the way of us living out those values or achieving those financial objectives then and renting would, then we’re going to say it. We should think about writing for another year or two. However, if, if our clients can own a home and be protected well and be a great saver and be building their life events fun and have a handle on the that that’s already existing on their financial balance sheet, then by all means we’ve been encouraged folks to take, take ownership of a home so that they have acquired an asset. They’re building a liquidity in the form of equity and they’re also able to take advantage of the things we talked about earlier, which is having the tax deductibility from interest payments on the mortgage and so on and so forth. And so the other astronauts that I would have there is the sense that if someone comes to us and says, yeah, you know, my job, we’re an up and coming or a rising star and you know, are two of the five year goals are too.
And we want to, we want to be really nimble because we’re very likely to be transferred across the country, maybe Chicago or San Diego here in the next two to five years. Again, why would attend to encourage those folks is and can be consistent with say, nimble homeownership home purchase, maybe a terrible idea. This is because it’s, it’s easy to, it’s much easier to give a landlord a 60 day notice that you’re moving out than it is to be able to sell a home in 30 to 60 days regardless of the market. Also the fact of course you gotta be careful that we’re not holding an asset that we’re going to look to sell or relinquish in the next 12 to 24 months or even three to five years. Knowing that it’s not often, but every so often the housing market can regress such as 2007 and eight and we have to be careful that we didn’t make a 30 year decision based on 24 to 48 months factors, if that makes sense.
Paul Sian: Yeah, definitely makes sense. And it’s a a great point. I mean just like real estate, you know, when you brought up earlier the cost differences, you know, living in California versus living in Cincinnati, Ohio, it’s location, location, location is agency. So, I mean when you get over here for you know, $250,000 you know, in California you can easily do the, be able to get 1.2 million depending on the location you’re at. So same, same thing for the individual person. I mean it’s the, it’s the individual that matters. What’s your life goal? What’s their life plans? And you know, somebody who’s going to be here in Cincinnati for two years, it doesn’t make sense. It might not make sense. The, you know, there are high transaction costs, you know, where they’re from, your, your real estate closings, closing costs, your, your mortgage closing costs. So I mean that that kind of adds in and you might not get that pay off in two years. Especially if value state stay flat or decrease.
Scott Trent: That’s an excellent point perspective. If I could leave your listeners with one nugget of wisdom for what it’s worth, I would say the sooner that you can let go, other people have expectations of you and let go of what other people might think of you and the perception others have of you, the better off you’ll be. We find so often that the pressure to keep up with the Joneses that use that expression again or to to everybody else is doing it just kind of like kids in grade school. That same peer pressure exists with hardworking families, grownups, parents here in adulthood and the idea that we’ve got a finite amount of time and a finite amount of resources and at the end of the day being able to look in the mirror and have satisfaction about the progress you’re making it for yourself with people that you love, making sure that you have a plan that works and offer seen circumstances, good days, bad days, sunshine or rain.
Knowing that you’ve prepared a path for yourself and for your family. That is a general one that reaps benefits for generations and that we’re teaching the generation coming behind us about financial responsibility. I think if we can find joy and peace in those principles and those ideas and the visions of that kind of a future rather than making sure that, you know, we look good when we pull up to the company picnic or the family or a union or making sure that we form to the right neighborhood with the right car and the right toys in our garage. No, I think we’d be much better off as Americans because sadly enough, the statistics say that the average American to saving 5% or less of their income or an overwhelming majority of folks are not even prepared to deal with a thousand dollar emergency if it were topics that out of the bushes.
And so I think that what I’d like to leave your listeners with this idea of we can do better and one of the best ways to start doing better is to think a lot less about the perception and approval of others and really start thinking about the idea that the stakes are high and when, when we consider the magnitude of the impact of our financial decisions, not just for our lives but the lives of the generations that follow, I think we can make the best well informed decisions and whether that includes home purchase or renting or if it includes real estate and investing or for or not. I think that working with myself and my team, we really work very hard to make sure that we keep the main thing, the main things and minimize the distraction of other things I’ve mentioned.
Paul Sian: We’ve talked today, plan for now and plan for the future. All very great and solid advice. Thanks Scott. Appreciate you. Haven’t you on the show here and I will chat with you soon.
Scott Trent: Thanks Paul.
Source: cincinkyrealestate.com
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Current list of government and private relief programs to help homeowners and renters economically affected by COVID-19.
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While 30-year fixed mortgage rates tend to steal all the headlines, 15-year fixed mortgage rates quietly reached record lows this week as well, per Freddie Macâs weekly survey. This morning, Freddie announced that the 30-year fixed fell to a new record low 2.65%, down from 2.67% last week. That was the first record low of [&hellip
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Similar to the increased waiting times to get a COVID-19 test these days, itâs taking an extended amount of time to get a mortgage to the finish line. The reason is simply unprecedented demand, just like those COVID-19 tests. The more people that need one, the longer the wait, period. This is the downside to [&hellip
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