In this REI Uncovered podcast episode, David will share…
- How David Got Into Real Estate
- David’s First Steps
- Explaining “Profit First” Mindset
- Growing Your Business
How David Got Into Real Estate
David got into the business, working for a real estate investing company. He learned how to do wholesale deals like turnkey operations or fix-and-flip rentals which gave him valuable experience in many aspects of this industry. After 5 years and has occupied various positions within the company, they were averaging 25 – 30 deals per month. But as much of it coming in there was also going out which meant things weren’t getting efficient.
“Just because you look successful doesn’t mean you’re bringing home the net, the bottom-line profit.”
Then, he started working with another investor, he was looking to get a good understanding of what the investor’s finances were like and so, he asked for the books. He dove right into checking them which helped him gain an accurate portrayal in his mind about where they stood financially- at least until this point in time. The first thing he did, was to get the finances in order after seeing where all of the money went. He learned that if people know their numbers and have a good understanding of what’s going on with them financially it will empower them so much more when making decisions about other aspects of life too.
After 6 – 8 months of helping investors and owners with their financial side, he realized that his strategy was working. He wanted to help more people so the idea for writing this book came about. After 14 months, David finally released his book “Profit First for Real Estate Investing”. It’s coming out on December 7th and will provide some great insight into how to be successful with investing in real estate.
Today, David has been part of 851 deals.
David’s First Steps
He went to college and got a bachelor’s in Secondary Education; teaching is his passion. He started the CFO business because being an entrepreneur came naturally- it felt like something that was meant for him all along
He saw that many people in the real estate industry were not being able to achieve financial freedom, and he wanted there to be an easier way for them.
A CFO who had experience with finance, as well as business management, decided it was time his skills could help these owners understand where their money went at each stage; whether they knew what those numbers meant or not–he wants all of them on board.
Explaining “Profit First” Mindset
There are two components: mindset and practical application. The mindset is you make a sale, and the first thing to do once that’s done? Pay yourself. You take your profit before anything else: what’s leftover goes into running the business day-to-day so it can keep functioning as efficiently for everyone involved.
The practical application for this system is to set up different bank accounts and control the money coming in when it’s needed. The benefits of implementing an enveloping strategy include having a separate account just for bills and another one just for income, as well as opening three other accounts.
The golden trio of accounts are the only ones you need to make sure you’re winning. A profit account, an owner’s comp account for yourself, and finally an income tax account so that all taxes get paid on time every year. Opening those accounts gives you the power to focus. Once you get into that habit, you start living: sales – profit = expenses. That’s when you build profitability.
“The most power you can have in your business and to get true financial freedom is by gaining back the control on your finances.“
Growing Your Business
Re-investing is an important financial decision. In order for you to make the most of your investment, it’s essential that reinvestment has a clear intention behind it and not just be something people say when they don’t know what else to do with all their money or if there are too many expenses on hand already. You must put reserves into action–reserves capitalize on opportunities when they come up.