Behind the Beard | March 2, 2022

Behind the Beard Q&A Edition

Today’s BTB is a lil different. Last week on my Instagram story, I asked for some questions to answer and I’ll be sharing a handful of those today. There were A LOT of questions so I won’t be able to answer them all this week - so maybe I’ll do another one of these :) Reply to my text if ya like this format and want me to do more like it!

Question: “I have $2mil in capital and want to start a real estate company. Where would you start?” -@guyidann

I would start by not touching that money. A lot people with large sums of money try to buy their way into an investment versus finding a good deal. You can put down a large sum of money and make anything cash flow. So I would first slow down and take a breather.

Second, I would say its vital that you understand exactly what you want to buy and what strategy you want to use. What niche fires you up? Is it flipping single family homes? Is it buying multifamily? What’s your strategy? BRRRR? Value add? Short term rentals?

Once you nail that down, I’d recommend starting small. For example, if your niche is large multifamily, maybe start with a $1mil property that you can put 20-25% down on so you can afford to make some mistakes and learn. It wouldn’t be wise to out all $2mil into a $10mil deal which could go sideways (unless you have past experience).

The next thing to consider is $2mil is a large chunk of money and could be used to hire employees. Instead of trying to figure it out all yourself, you could probably find a really experienced investor that you pay a couple hundred thousand a year and maybe some equity who could run the business for you.

The final option is maybe your time is better spent on the business/job that made you the $2mil. If thats the case, you can passively invest in several syndications (like Open Door Capital) while still capitalizing on all the benefits of an active real estate investment. No option is right or wrong - it just depends on your situation, goals, and what excites you.

Question: “How do you stay present with kids and a spouse when being pulled in 1,000 directions professionally?” -@meeshymh

I admit that I’m not amazing at this. However, it helps to keep in mind that family is the number one priority. It’s the large rock that all the little rocks have to fit around. So I establish those large rock on my calendar and track them in my intention journal - like date night with my wife, time with my kids, my kids’ events etc. If I can anchor in those big rocks then I can fit everything else around them in 1,000 directions. It really is a matter of priority and establishing what is the priority.

In the book The One Thing by Gary Keller and Jay Papasan, they say there’s no such thing as a work-life balance - it’s work-life balancing. It’s a verb. It goes back and forth. Sometimes I push too much on the business side and am gone for a week. So when I come back, I push back on the other side and try to take a week off and spend more time with the family. It’s active balancing.

Question: “What advice would you give to a 16 year old to prepare them for the future?” -@nico.kennedy

First off, at 16 is definitely possible to start your real estate journey. In fact, you’ll be so far ahead of everyone else, you’ll be retired while everyone else is still trying to figure out a 401(k). That said, you’re probably not going to get a mortgage in your own name when your 16 so the best thing you can do in your teenage years is learn and network.

The best thing a young person has going for them is their ability to get older people to take them under their wing. Older investors love to mentor young investors. They can see themselves in the kid and wanna help them out. By acting interested, asking questions, and going to meet ups, you’ll naturally find people that are killing it and wanna take you under your wing. Lean into that heavily.

If/when you go to college, pick a major that will help you with real estate. Not saying there’s a need to go to college but if you do, that’s helpful.

Also, try to start helping people with maintenance. Swing a hammer. Change some door locks. Provide value to people and learn. You can eventually start finding deals for people and maybe wholesaling which can provide some great income for a young hustler.

Lastly, don’t let your motivation wane. Focus on building habits at a young age that you can carry with you the rest of your life. This will have a massive compound effect on your life.

Question: “When are you writing another book?” -@kepcity_0482

Not this year :) But someday for sure.

Question: “What book has had the biggest impact on your business?” -@mattbvck

Early on, there was a book called The Unofficial Guide to Real Estate Investing by Spencer Strauss and Martin Stone . That book had a huge impact on me because it showed me what real estate can do over a long period of time. I tried to even do the same model in the Multifamily Millionaire and in the Book on Rental Property Investing because it made such an impact on me. It wasn’t just showing you how to buy a rental and rent it out but how to build a portfolio of multiple properties and grow over time to become wealthy. Reading this booked helped me understand that.

The second book that had a huge impact on me was Traction by Gino Wickman because it introduced a concept called EOS (Entrepreneurial Operating System) that helps manage a team, get everyone rolling in the same direction, and inspire team members. Having amazing people and managing them through a system like EOS has been the key to scaling from $0 to $300 million in the last four years.

Question: “How has your definition of success changed or evolved as you’ve grown your business and investments?”

In the beginning, success was just quitting my job. Financial freedom level 1 - paying my bills with money coming in passively. I achieved this around the age of 27. Then it moved to having a net worth of around $1mil and I hit that around 30. After that, there were a few years where I didn’t really know what I wanted.

Today, there’s a lot of definitions I may be able to give for success but a big piece of it is in the growth of my team. Sure - it would be great to grow wealthier or become a billionaire. But I love growing a team of people who are personally learning and growing. The best part about this is there’s no ceiling to it. With other goals, there’s a number you hit it and then ask “Okay, now what?” and you keep moving the target. But this goal is a constant pursuit.

There’s a great book called The Gap and the Gain by Dan Sullivan and Benjamin Hardy. In this book, they talk about how entrepreneurs typically focus on the gap between where they are now and where they are trying to be. Instead, they should focus on the gain which is the difference from where they started to where they are now. If you want happiness, focus on the gain and where you’ve come from. This is a really good practice and I’d encourage you to sit down and write out something like “Ten years ago I was [blank]”. Fill in that blank with everything you can brainstorm. Where were you living? What kind of house did you live in? What were you driving? What books were you reading? What were you thinking? What was your net worth and income? Then do that for three years ago and even one year ago. When you look back, it’s crazy to see how far you’ve come and that will make you feel successful.

Question: “How do you handle stress that comes with scaling your business?”

Anytime I’m stressed, that means I don’t have a good enough system. When we have good systems, we’re not stressed. You’re not stressed about your car breaking down when it’s running fine. You’re only stressed when your broken down on the side of the road because your system broke. Stress is actually a good sign of a system that could needs to be built, improved, or changed. I see it as a challenge.

Secondly, I try to make everyone else stressed out and not me. And I don’t mean that in a bad way. I mean I hire people and it’s their job to handle the details for me. For example, this very Behind the Beard, I’m actually sending as a voice memo to Matt Buck to transcribe and send out. So Matt may get stressed about sending it in time but I’m not stressed about it because I have a system that handles it. Then Matt can also develop systems and if he feels stress, he can build/improve them to handle his responsibilities!

Your Friend,

P.S. Have a question you want answered by me? Reply to this text with your question - I pick one to answer each week in Behind the Beard and do my best to reply to others directly via text.