I'm Capped. How Do I Go From 60 to 100? — Transcript

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1. 0:004 years, 2 months, and about 6 days, you
2. 0:03told me to stop running my real estate
3. 0:07lead generation agency
4. 0:09cuz I sucked at it.
5. 0:12I took your advice. I listened.
6. 0:14>> I was feeling sassy.
7. 0:16>> It was It was good advice because since
8. 0:18that time I've sold about 125
9. 0:20million in real estate.
10. 0:23Now
11. 0:24>> Yeah.
12. 0:26>> You You told me to come back and then
13. 0:28figure out the small
14. 0:29Yeah. You know, media agency again. Have
15. 0:32no interest in doing that. I actually
16. 0:34found that I'm a lot better at selling
17. 0:36real estate than running the agency.
18. 0:38>> Yeah.
19. 0:38>> [laughter]
20. 0:39>> So now what I've done, I've kind of
21. 0:41found a niche cuz it's a another piece
22. 0:44of advice that you told me to figure
23. 0:45out. And then the third thing is you
24. 0:47told me to go find rich people, figure
25. 0:50out their problems, and solve them cuz
26. 0:51they pay a whole lot better.
27. 0:52>> Yeah.
28. 0:53>> So I started specializing in figuring
29. 0:55out how I can leverage the tax code
30. 0:57while helping them acquire real estate.
31. 0:59>> Mhm.
32. 1:00>> Just figuring all the different
33. 1:01loopholes by leveraging real estate to
34. 1:03offset their taxes. So I specialize with
35. 1:05high income W- do uh
36. 1:07workers or you know, business owners.
37. 1:10Get them real estate. Now the business
38. 1:13has kind of evolved and has been
39. 1:15doubling every year. We're on pace to do
40. 1:17about 55, almost 60 million this year.
41. 1:19Kind of crazy. To put things into
42. 1:22perspective, 2 and 1/2 3% that's what
43. 1:24the revenue would be. So division one is
44. 1:26the acquisition. It's about a million, 2
45. 1:29million 3.
46. 1:31Then we have a set up business where we
47. 1:32set up the the investment properties for
48. 1:34them, Airbnbs.
49. 1:37Either I got to raise prices or do
50. 1:39something else cuz I have like 90,
51. 1:40almost 95% closing rate. Um so we are
52. 1:43doing about another 2 300K there.
53. 1:46And then we have the full done for you
54. 1:47management on the back end and that's
55. 1:49packaged on as an offer.
56. 1:52After speaking with Ed and a few other
57. 1:54things, I'm trying to figure out if I'm
58. 1:56killing off the baby here and keeping
59. 1:58the main thing the main thing like you
60. 2:00told me back 4 years ago or trying to
61. 2:01figure out how to pivot because the
62. 2:03continuation I know some of my really
63. 2:06high income earners the people that have
64. 2:08the million 2 million dollars in taxes
65. 2:09to offload.
66. 2:10>> Yeah.
67. 2:11>> They don't want to set up the properties
68. 2:12they don't want to manage them they
69. 2:13don't want to do anything so they
70. 2:14definitely do buy because of that
71. 2:16turnkey method.
72. 2:17>> Uh-huh.
73. 2:19>> So I'm at this crossroads of do we
74. 2:21double down or
75. 2:23I'm capped like how do I go from 60 to
76. 2:26100 when I have other people in my
77. 2:27office working with Serhant doing 300
78. 2:30400 million just selling a higher ticket
79. 2:32item right 5 10 million dollar
80. 2:34properties as opposed to million 2 3 4
81. 2:36million dollar properties like I am
82. 2:38right now
83. 2:39to try and figure out where to go next.
84. 2:41>> So just to give context on this when
85. 2:43Alan was our our software company we
86. 2:45served white label for you know social
87. 2:48media marketing agencies so Peter was
88. 2:50helping realtors get leads to sell
89. 2:53houses and for like 6 months he would
90. 2:55hop on I'd do like a call every week or
91. 2:57whatever and he would hop on and he'd be
92. 2:59like God these realtors suck they don't
93. 3:01work their leads you know all of all of
94. 3:03this stuff and 6 months he was basically
95. 3:05flat with revenue
96. 3:07and I was like have you ever worked your
97. 3:08own leads?
98. 3:10And like actually seen cuz you're not a
99. 3:11realtor so I was like have you ever
100. 3:12worked your own leads and seen if
101. 3:13they're actually any good at all
102. 3:17and he ended up having a partner there
103. 3:18that you know fell off who was the
104. 3:19realtor who was going to be like the
105. 3:20expert in the space and he was just
106. 3:21going to run the ads and then it was
107. 3:23just him.
108. 3:24And so we had a little bit of a
109. 3:25heart-to-heart moment where I was like
110. 3:27Listen man it's been 6 months like
111. 3:29nothing has changed because something
112. 3:30has to change and so why don't you just
113. 3:32like actually get good at real estate
114. 3:34and then if you want to visit this back
115. 3:36once you go crush it in real estate this
116. 3:37door will always be open cuz you you
117. 3:39still have the skills right you can
118. 3:40always come back and so that is the the
119. 3:43full of the other side of
120. 3:46I'm almost getting emotional about it
121. 3:46but like very cool man very cool.
122. 3:48Um
123. 3:49Okay so let's let's scale this thing.
124. 3:52So, um big picture we have
125. 3:55you have this Airbnb thing, right? So,
126. 3:57is that like how many of the people that
127. 3:59you're selling right now need this
128. 4:00Airbnb as the as the way as the reason
129. 4:02that they're they're buying from you?
130. 4:04>> So, out of the 70 some deals that we'll
131. 4:07do cuz
132. 4:08nothing is set in stone cuz I'm still
133. 4:10closing deals literally as sitting at
134. 4:11this event.
135. 4:12>> Okay.
136. 4:13>> Um I would say probably about 90% are
137. 4:15buying it for tax purposes. So, out of
138. 4:17the 55 million, probably like 35 almost
139. 4:2040 is quarter four numbers.
140. 4:22>> Yeah.
141. 4:22>> So, like my business is so heavily
142. 4:24stacked in the back end of the year it's
143. 4:25kind of crazy.
144. 4:26>> Yeah.
145. 4:26>> So, if I can do that volume in one
146. 4:28quarter, like what can I do in four?
147. 4:31>> Yeah. So, but so you have this Okay, so
148. 4:35a couple considerations is like
149. 4:37I'm seeing path one is you could say I
150. 4:39want to build a compounding vehicle
151. 4:41around this Airbnb thing.
152. 4:43You could just straight raise money and
153. 4:45do it. That is that is a path. Be like,
154. 4:47I'm going to raise a fund, we're going
155. 4:47to do Airbnbs, and this is the arbitrage
156. 4:49we're playing with. That's an option.
157. 4:52Another option would be um
158. 4:54for these people like you could
159. 4:56obviously raise the prices cuz if you're
160. 4:57closing 95% then like the off like the
161. 4:59offer's great. So, like we need to go
162. 5:01like way up. And the price would
163. 5:03probably just be the percentage of, you
164. 5:04know, the the management fees and
165. 5:05whatnot.
166. 5:06>> Yeah, the the done for you is 10 grand,
167. 5:08but it we should be really like 20.
168. 5:09Where I really make the money is the
169. 5:11commission on the actual deal.
170. 5:13>> Yeah.
171. 5:14>> And then the management is at 15%, which
172. 5:16is about 5 to 10% below where we should
173. 5:18be.
174. 5:18>> Yeah.
175. 5:18>> But they make more money, which then
176. 5:20gets them to transact with us again. And
177. 5:22I have people that bought three, four,
178. 5:23five, six properties. Like I just got a
179. 5:24guy who bought four back to back.
180. 5:26>> Yeah.
181. 5:26But is the is the limitation of the
182. 5:27business that you can't handle more ops
183. 5:29on the Airbnb?
184. 5:31>> So, I'm I'm getting to this point where
185. 5:33we have about 60 that are up and live,
186. 5:36and I keep expanding the team.
187. 5:38>> Yeah.
188. 5:38>> I hate that business. Like if somebody
189. 5:41were still willing
190. 5:41>> reason you can't just like work with
191. 5:43somebody who does this and just
192. 5:45put give it to them?
193. 5:46>> that's what initially happened last year
194. 5:48around November. The property manager
195. 5:49quit, said, "I'm done. I'm out. Here's
196. 5:5120 properties. Do whatever you want with
197. 5:53them." So, then I went and I actually
198. 5:55got one of my clients who bought an
199. 5:56Airbnb with me, who was doing Airbnb
200. 5:58arbitrage.
201. 5:59>> Yeah.
202. 5:59>> Kind of brought them in.
203. 6:01I made a deal and I'm They They
204. 6:04take 2/3 of the revenue and I take a
205. 6:06third. So, like for me to make 100 grand
206. 6:08>> Yeah.
207. 6:09>> on years worth of work when I can
208. 6:10literally close two deals, like it just
209. 6:12makes no sense.
210. 6:13>> So, I was thinking about figuring out if
211. 6:15I can point it off and partner. A lot of
212. 6:17my clients, what I'm noticing
213. 6:20the management is always the the wild
214. 6:22card, the weakest link. Cuz if the
215. 6:23management doesn't do well, they don't
216. 6:25come by again.
217. 6:27But if everything turns,
218. 6:30we see uptick on obviously the sales.
219. 6:33So,
220. 6:35I'm looking at trying to see if I can
221. 6:37partner up without letting go of the
222. 6:38control, but on the management side of
223. 6:40the business, there's also
224. 6:42we by accident built a cleaning company.
225. 6:45>> Really? Like
226. 6:45>> Not directly, but we have cleaners who
227. 6:48went from like 10 properties to and
228. 6:49scaled with us and obviously I helped
229. 6:51them build out. So, it's Now it's all
230. 6:53the side and it's
231. 6:55I'm
232. 6:55>> Yeah.
233. 6:56>> going into way too many directions. I'm
234. 6:57trying to keep the main thing, which is
235. 6:59what you told me, sell more real estate
236. 7:00or sell high-priced real estate.
237. 7:02>> would so, um
238. 7:05just because you don't have legal
239. 7:07control doesn't mean you don't have
240. 7:09leverage.
241. 7:10>> Oh, yeah. I know.
242. 7:11>> Right. And so,
243. 7:14I I do think that what you're probably
244. 7:16looking for is a partner, not like
245. 7:19in your business, but basically somebody
246. 7:21who can just manage this full time. And
247. 7:23then just say like, "I'll give you
248. 7:24100%." You know what I mean? Like your
249. 7:2630% or whatever, like yeah, I see that
250. 7:27as not a deal provided you don't
251. 7:29have to do anything.
252. 7:31So, I'm all for getting paid for not
253. 7:33working. I don't want to get paid a
254. 7:35small amount if I am working.
255. 7:36>> Basically, it's the CEO. Like everything
256. 7:38has to run through me. Even though he
257. 7:40does like 80% of the work, I'm still
258. 7:42>> work.
259. 7:43>> The clients call me when goes
260. 7:44wrong.
261. 7:45>> Right.
262. 7:47Um right, you're the one who who passed
263. 7:49who passed on the relationship. Um I
264. 7:51think that if you just position it as
265. 7:52like well, would they buy they would
266. 7:54still buy from you presumably, right? If
267. 7:56they if the management goes well and it
268. 7:58was a third party.
269. 7:59>> I tried the here's my partner Ken,
270. 8:01here's my partner whoever Todd, you
271. 8:03know.
272. 8:04>> Yeah, yeah.
273. 8:05>> And I
274. 8:06but they're like oh, well, is this all
275. 8:07under you? So, it's kind of it's
276. 8:09definitely an easier sell when I say
277. 8:10it's where it's all interconnected it's
278. 8:12under the same roof.
279. 8:13>> Yeah, yeah, yeah.
280. 8:18>> So, then I'm trying to figure out is how
281. 8:20much of my front-end sale
282. 8:22>> Yeah.
283. 8:23>> is actually
284. 8:25attributed to us being able to set up
285. 8:27the property
286. 8:28>> Yeah.
287. 8:28>> and then managing. Like our property
288. 8:30skill we don't have that.
289. 8:31>> just like sell properties without it and
290. 8:33see what happens.
291. 8:34>> So, I So, I did the first year we did
292. 8:36about 10 12 million, then went to 24,
293. 8:39then 36, now we're at 55. So, last year
294. 8:41>> but you included the Airbnb in the
295. 8:42beginning or just recently?
296. 8:44>> No, so last year basically last November
297. 8:47I had people asking me can you just help
298. 8:48us set it up and they would just waste
299. 8:49my time. Well,
300. 8:50>> Oh, so this is recent. So, you did 24
301. 8:52million before like per annum before
302. 8:55adding this in.
303. 8:56>> Yeah.
304. 8:57>> Yeah, I think you should probably just
305. 8:58go sell more houses.
306. 9:00Being real.
307. 9:02No, for real. I think you should just
308. 9:03sell more houses and then just have an
309. 9:04intro. Like it's like I can make some
310. 9:06introductions to management companies,
311. 9:08but the core thing is they need to buy
312. 9:09the real estate to get the depreciation
313. 9:10or whatever, right? Whatever you know,
314. 9:11thing you you you figured out.
315. 9:13Um
316. 9:14so, that's the like the core thing is
317. 9:15they want to get the money off the
318. 9:16books, which is why Q4 is such a big,
319. 9:18you know, thing they want, right?
320. 9:19Right, and so having the management to
321. 9:21me feels like it's gravy rather than
322. 9:24like the core thing is like I have to
323. 9:26spend this money or I will pay taxes on
324. 9:27it and I will own an asset that
325. 9:31I cuz I'd be like I've got a suite of
326. 9:32five different guys that are management
327. 9:33companies. Like they can do this. I'm
328. 9:35the one who gets you good properties.
329. 9:37And I will find you a good deal on the
330. 9:38property cuz if you buy right, it makes
331. 9:40it gives you a lot more padding on the
332. 9:41back.
333. 9:42>> Yeah, so like when we had the
334. 9:43partnerships, the issue that I ran into
335. 9:45>> Yeah.
336. 9:46>> is that the guys would do a job and
337. 9:47then I would get the phone call "Can you
338. 9:49manage this?"
339. 9:49>> think but again it's like I think all of
340. 9:51that comes down to expectation setting.
341. 9:53So, if you're having the conversation
342. 9:55with them and you're like, "Listen, if
343. 9:57we buy right, you're going to save like
344. 9:58you will you get an instant 58% increase
345. 10:00on the money that you don't pay taxes
346. 10:02on.
347. 10:02>> Yeah.
348. 10:03>> Right? So, like no matter what, we get a
349. 10:0458% increase on free money.
350. 10:06>> Yeah.
351. 10:07>> That's what I can deliver. I can
352. 10:09introduce you to some people.
353. 10:10Everything's hit or miss and like the
354. 10:12management's up to them. Now, that's
355. 10:13part of the like that's part of what
356. 10:14you're getting to but if you're good to
357. 10:15lock in the 58, let me go get you a
358. 10:17house and I'll make sure I buy it below
359. 10:18market, blah blah blah blah blah. I
360. 10:19think you could still do the pitch. I
361. 10:20think it's all about just how you set
362. 10:22the
363. 10:23the expectation up front.
364. 10:24>> So, a lot of the leads that are coming
365. 10:26in is through my strategic partners.
366. 10:28Like I go, I speak around the country, I
367. 10:30get on stages, right? And room full of
368. 10:32people, typically CPAs, accountants,
369. 10:34doctors, lawyers.
370. 10:36>> I've been thinking about going direct to
371. 10:39consumers. So, instead of finding the
372. 10:41CPAs and speaking, going directly to
373. 10:43"Hey, are you a high income earner, W-2,
374. 10:46whatever?"
375. 10:47>> Yeah. Is that the wrong tree to bark at?
376. 10:50Because I don't want to be dependent on
377. 10:51the strategic partners. Like we we I
378. 10:53definitely identify
379. 10:54>> have?
380. 10:55>> I have like three or four.
381. 10:56>> Okay, that is a little dependent. Well,
382. 10:58I mean I think I think it was the right
383. 10:59strategy. I think you just need to do
384. 11:00what
385. 11:01a little more.
386. 11:03I think it's more like how do I get like
387. 11:0430 or 40? And so, I think part of the
388. 11:06reason that you've been bending over
389. 11:07backwards is because you need the deals
390. 11:10that they give you
391. 11:11rather than like if you had 30 or 40 of
392. 11:13these CPAs, they'll send you customers
393. 11:15and you'll be like, "Listen, this guy
394. 11:17wants
395. 11:18a shitload of stuff. I can I will get
396. 11:20these guys the houses they need and
397. 11:21we'll you know, to to to get the the the
398. 11:24the tax treatment that they are looking
399. 11:25for."
400. 11:26And you'll be able to turn down some
401. 11:28business that doesn't require this
402. 11:30back-end thing in order to close the
403. 11:31deal. So, it's like maybe you lose 25%
404. 11:33of your business Uh
405. 11:35by not having to deal with all this
406. 11:36headache and just saying like I can make
407. 11:38intros, but like I'm not associated, but
408. 11:40I can do the core economic arbitrage,
409. 11:42which is the first sale.
410. 11:44>> Which inadvertently will help us make
411. 11:45more money cuz I can go sell more.
412. 11:47>> Yeah, you can focus. And I think that if
413. 11:48you if you had all the time back from
414. 11:50all this management and then
415. 11:52just said, "I'm going to go from having
416. 11:54four CPAs to 40 by the end of the year
417. 11:56and we're going to run the same way."
418. 11:58Like you'll have 10x the lead flow and
419. 12:00assuming you close three out of four
420. 12:02instead of 100% because instead of a a
421. 12:04grand slam offer, it's a home run offer.
422. 12:06Right? Um
423. 12:08then you'll still have tripled the
424. 12:10business.
425. 12:12>> And then would you change all the
426. 12:13marketing and all the
427. 12:15>> Sorry, 8x the business. Excuse me. 7 and
428. 12:161/2.
429. 12:17>> outbound to just target the CPAs or
430. 12:20would you still have some for the
431. 12:21direct-to-consumer?
432. 12:22>> Well, what percentage right now is
433. 12:24coming from the CPAs?
434. 12:26>> I would say probably like 60-70%.
435. 12:28>> And the other third is from what?
436. 12:31>> Either word of mouth coming, you know,
437. 12:33recurring or literally people finding me
438. 12:34on Instagram after I haven't posted in a
439. 12:36month, right?
440. 12:36>> Yeah, I think um
441. 12:38I think the CPA is the is the primary
442. 12:40channel. Like you've gotten 60% of your
443. 12:42revenue from four people.
444. 12:43I just think, "Great, how do we have 40
445. 12:45or 400?" To me, that's the entire game.
446. 12:47>> Yeah, and then the the the customers
447. 12:49that are coming back
448. 12:51>> They'll come back.
449. 12:52>> They're they're they're they're coming
450. 12:53back or they're referring us now at this
451. 12:54point cuz they know
452. 12:56>> But the like I see that as the repeat
453. 12:57business, which we'll just carve out for
454. 12:58sake of like where does new business
455. 13:00come from? 100% of new business comes
456. 13:02from the CPAs almost besides the one or
457. 13:04two that come from Instagram.
458. 13:06So, if that's the case, the big point of
459. 13:08leverage in this thing is that
460. 13:10each CPA firm, let's say is roughly
461. 13:13worth 500 to 700,000 a year in
462. 13:15commissions to you.
463. 13:17So, that's a lot of money per CPA firm,
464. 13:18which means you can get really
465. 13:19aggressive in attracting them
466. 13:21um to send you business.
467. 13:24>> And my margins on that business are like
468. 13:2590%.
469. 13:26>> Right. Technically 88 cuz I got to pay
470. 13:28my broker.
471. 13:28>> Right.
472. 13:29But I think that's the I think that's
473. 13:30the that's that's the way that I would I
474. 13:32would do it. Like if I would have
475. 13:33attacked the business today, I'd lop
476. 13:34this part off. If I confident, which I
477. 13:36am, that you can sell houses without
478. 13:38saying I also do the management. I think
479. 13:40you've got the sales chops to do that.
480. 13:41Um
481. 13:42you'll sell way more houses cuz you'll
482. 13:44get half your time back or more.
483. 13:46And you can take that time to go get
484. 13:48from four CPAs to 40 CPAs. That to me is
485. 13:51the game plan.
486. 13:52>> Awesome. Thank you. As always.
487. 13:54>> Appreciate you, man. Congrats.
488. 13:55>> 4 years ago you changed my life.
489. 13:57>> You changed your life.
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