The Titanium Vault hosted by RJ Bates III

David Richter: Profit First for Real Estate Investing

March 15, 2023 David Richter Episode 199
The Titanium Vault hosted by RJ Bates III
David Richter: Profit First for Real Estate Investing
Show Notes Transcript

David Richter is an active real estate investor who has been essential in closing over 850 deals over the last 10 years. He has experience with wholesale, turnkey, BRRRR, owner finance, rentals, lease options, and any other exit strategy you can think of.
While growing and building a real estate business from 5 to over 25 deals a month, he realized that as much money was coming in, it was all going right out the door. With the unique opportunity of being in every seat as a real estate investor, he found a calling in the company’s finance seat to help businesses see where their money really went. David has helped real estate companies completely turn around from going out of business to building cash reserves by using the Profit First cash flow system. He has been featured on Biggerpockets, Real Estate Disruptors with Steve Trang, and many other podcasts, shows, and stages.
To help even more people, he wrote Profit First for Real Estate Investing - a derivative of the original Profit First by Mike Michalowicz that is tailored specifically to Real Estate Investors. His goal is to completely transform the Real Estate Investing industry by helping real estate investors make and KEEP more money in their businesses. As the founder and owner of SimpleCFO Solutions, he wants to bring investors true financial clarity and freedom and help every investor stop living deal to deal.


Learn more about the systems I use to virtually wholesale nationwide using the links below!

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RJ Bates III (00:00:02) - Hey guys, welcome to the Titanium Vault. I'm your host RJ Bates iii. And yes, I know it's been way too long since I recorded a podcast, but when a man like David Richter follows up with you in your email 25 times to do a podcast swap, you say, I'm coming out of retirement, I'm gonna start doing the podcast again. So here we are. I'm super excited to have the author of Profit First for Real Estate Invested, Mr. David Richter. How you doing buddy?

David Richter (00:00:32) - I'm doing great rj, thanks. Thanks for having me.

RJ Bates III (00:00:35) - Yeah, well first and foremost, if you haven't checked out his podcast, uh, he is got great stuff, ton of a amazing guest. I checked out the guest list, I'm honored to be a part of it now. Um, but for those of you that don't know, I've got a short little bio here. This man has done over 850 deals in his career. He is done pretty much every exit strategy you could think of, flips, burr, seller finance, lease options, whatever you could think of. But more importantly, what he realized is, is along his journey as much money was coming in, that much money was going out and so he knew that there was an opportunity to come up with a better solution and that's what he is done with both his company and the book that he is read. I don't wanna take all all of your story away here, David, but I've read your book and it, it blew me away. I told you that before we started recording. Um, it's gonna be something that I implement in my business, but I, I have to ask you because your book is Profit First for Real Estate Investing. For those of you who don't know, there's a book by Mike Mcic that's called Profit First, which I read last year in 2022. Did you have to ask permission to write this book? How did you get in con connection with Mike to be able to write Profit First for real estate investing?

David Richter (00:01:56) - So I was working with an investor in Virginia and that's was one of the big catalysts for me, even going down this road to the financial side cuz if you can see me in person, I look like the numbers guy, but I'm definitely the entrepreneur and I love real estate investing and that's where I knew there was a big need of, hey, we're making money, but where in the world is it all going? Or like, why don't I feel like this was worth it , you know, like where's the money going? So I, I helped this guy in Virginia, his name was Rich Lennon, one of my mentors, one of the best people that have helped me along my journey. And so I sat down with him and said like, let's look at your numbers cuz like I need to know if we're gonna go into real estate together.

David Richter (00:02:35) - Like I'm gonna be a part of this team. Like I wanna know that we're healthy. And it was a mess. His books were a mess, numbers were a mess. Like I'm like your, your bookkeeper has no idea what they're doing when it comes to real estate. So like let's clean this up. Cleaned it up and got three simple numbers for him, what he's making, spending and keeping on a monthly basis. And he's like boom, the lights went on for him. He was able to like refinance a couple of his properties and like pull out hundreds of thousands of dollars that you know, like he had poured his own money into and was like where in the world is all my money going? And that's where it just gave him clarity in his business. And I'm like, he told me later on that that process changed his life.

David Richter (00:03:10) - And I'm like boom. Like I need to create a company that helps because I think a lot of other people have this because when we were doing 25 deals a month and the other company I was a part of, we were spending 26 worth out the door every month and they're like, this is not gonna work. So that's where I knew this was not just him. It was like an epidemic in the real estate space. Yeah. And it was just an entrepreneur space. So I called my mentor Gary Harper and a good friend of mine that we were doing a bunch of those deals together and he said, have you ever read the book Prophet First because I believe this company that you're creating is going to do very well cuz a lot of people need this but I think you should also read that book.

David Richter (00:03:44) - I'm like, I've never heard of that, what is that? So I read the book that night, took 10 pages of notes and said boom, I understand this as the entrepreneur, I know I could translate this to a real estate investor and help them. So that's what got me started down the road of even knowing about Profit First. So then a year into helping real estate investors set it up myself, I went to Mike because it was, it was kind of like a long-term play. I became a part of his Profit First Network. He's got like a profit first professional network. So that got me a little bit closer to him. And then one of the, my team members said like, you know real estate and you can speak the language cuz you're the entrepreneur and like you know the Profit First system so you know those two, you can marry those together, why don't you reach out to him?

David Richter (00:04:26) - So on the advice of someone that was on the team, I emailed Mike and just said, Hey, could I talk to you about potentially writing this book Profit First for real estate investing? And he emailed back and said Here's my calendar link, let's jump on a call. So I got on the call with Mike and I pitched it to him and he was like, that's I love it cuz I'm going to some real estate events. You've got the background, you've also got the track record of actually helping people as well too. So kind of played the long game there of like having some testimonials, having that type of stuff. And that's where he said, yeah, let's do the book. So then got the, I bought the intellectual property from him Profit First for real estate investing to be able to own that like name and to be able to own that space.

David Richter (00:05:04) - And so then from there it was 18 months later of three months I it took to write it, which was pretty fast but it took six months to edit it, which is like a long time for me because it was like, well that's a process. The book writing world is just a completely different world than real estate entrepreneurialism, everything. There's just so many. There's, you think there's moving parts in the things that we're doing, the book writing world a a whole different beast. So then got that out the door and that's where the prophet first was able to come out and for real estate investing was able to come out and be on shelves and, and Amazon and out into the world.

RJ Bates III (00:05:37) - I love that so much cuz if you've ever read any of Mike's books, he literally says it like almost every other chapter, shoot me an email, I'll respond to you. I don't know if it's gonna take a year or not, but I'll eventually respond to you. Yeah. Um, so I I love the fact that this whole thing started with you sending him an email. Um, that's that's amazing cuz I, I I was, I was curious the whole time. I'm like, he obviously does the forward to the book and I'm like, okay, how did this come about? Like obviously he had to get his permission and you know, I mean it's, it's the title and everything so yeah

David Richter (00:06:09) - Shoot your Shot. Like if you're listening to this like you have so much value that you can provide to someone else. Like we all struggle with our self-worth and I've been guilty of that for a long time in my past and there's been several times where I've surprised myself where I'm like, okay, I'm gonna shoot this shot. Is it gonna work? If it works, great If it doesn't, the worst I could get is a no. You know, and it's like when you put it in that framework, what can't you do from that? So that was definitely one of those points in my life and you know, I've still had to work through some of that stuff, you know, just to get to that. But like if you're listening to this, what are you thinking is holding you back and why don't you just go after it, shoot that email, do that dm, like whatever it might be of like, but you also have to think about what's in it for them. You can't just be like, here's what I could do. Because obviously for Mike that's getting his message out more, it's getting it to another section of the, but then it's also for me it's being able to spread this message and be able to say like here, like I can't work with everyone but like here's the system. Like here I just wanna give you step by step everything laid out in this book. So it's like shoot your shot but then also make sure you know what's in it for them as well too. Well

RJ Bates III (00:07:14) - I got two things to say on that and then we'll move on. Yeah. One, uh, I read Profit First and I didn't know how to implement it in my business for real estate investing. Yeah. So kudos to Mike for realizing that he needed a David Richter to spell out the specifics of his system for real estate investing. And I know he is doing it in other, other industries as well, but yeah, hey you really laid it out where it's like, hey, here's what you're gonna do to your rental income, here's how you're gonna split up like it made sense to a real estate investor. Second thing is, at every single one of my events, we give away the book Extreme Ownership cuz it's changing a,

David Richter (00:07:57) - It's behind you. So

RJ Bates III (00:07:59) - Now you've inspired me, I'm gonna send Jocko a DM and I'm gonna ask him if I could do extreme ownership for real estate investing. Nice.

David Richter (00:08:05) - There

RJ Bates III (00:08:06) - You go. Just

David Richter (00:08:06) - Shoot your shot. Like if you love something that much, go after it. That's

RJ Bates III (00:08:11) - What I'm saying. Hey, worked for you. Let's see if it'll work for me. , yeah, do

David Richter (00:08:15) - It did.

RJ Bates III (00:08:16) - He might,

David Richter (00:08:17) - He might get that

RJ Bates III (00:08:18) - Response. Right. Okay, so for those of tho the, the people that have never read a Prophet first or they don't know what we're talking about. Yeah, I mean listen, it sounds great Prophet first, but explain it to 'em on, on just a base level. What does it mean? What does this system,

David Richter (00:08:33) - So if you are listening to this podcast, you've probably read Rich Dad at Poor Dad or maybe Richest Man in Babylon, like some of these books that just get shared around in the real estate space and a lot of them teach this same concept. So like, I'm not even gonna teach you something new here, but there's something that Profit First has that a lot of those other books don't. So that's what I'm going, that's the added value here because in profit, in real, uh, rich Dad, poor Dad, he says over and over again pay yourself first. Like he just beats that and he says it about a billion times in like his 30 books. Then the Richest Man in Babylon says, A portion of all I have is Mind to Keep. There's other books too that go into kind of that process, that system of like, okay, you're gonna make it like make sure it's worth it.

David Richter (00:09:12) - So that's where in Profit First it gives the same outline, like you need to make sure your business is healthy. So it gives the formula that most entrepreneurs follow that's like a false formula that gets 'em stuck in their ra, their own rat race of like, hey, I went from a W2 job but now I'm in the real estate world, like living deal to deal. And and why is that? Because they g follow this formula Sales minus expenses equals profit, meaning I make a sale, I pay everyone else and hopefully at the end of the year I have some money. You know, like hopefully after all these deals close and all the dust settles, which like you say, it never does . Once the dust settles there's something there, but that day never comes. It's always a day we're looking for. And I could go, I could go much deeper.

David Richter (00:09:54) - That's like a success, you know as well too. That's something that we're always trying to achieve versus like where are we right now? But I, I digress, but for Profit first it flips it on its head and basically says the same thing as Rich Dad poured out about paying yourself. He says, it's this, it's the true formula you should learn is sales minus profit equals expenses. Meaning I make a sale, I take my profit off the table first, I get good habits around my money, I make sure I'm not spending everything that I'm making and then I still have the money that what's left over the expenses to grow the business. So making sure I'm healthy because you got into business for a reason, whether that was to make a ton of money to buy a nice car, buy a nice house, go on vacations, like give to causes, whatever it was that got you into real estate to get out of your W2 and just have more freedom, whatever that was with the, if you have that first formula, you're gonna be stuck.

David Richter (00:10:45) - You're gonna go from one rat race to another. But if you have the Profit First formula, then you're making sure that profit is a priority because the purpose of the business is to be profitable. If you're running a for-profit business. Now if you are running a nonprofit, that's a different story. You still wanna have the money there, but that's like where, you know, you wanna be giving it all away, but in the, you don't wanna be end ending up an accidental nonprofit  like a lot of people do. So you need to make sure that you keep first things first. Just like in the Seven Habits, highly Effective People. It's like the same concept of I make sure that the business is profitable because that profit flows to me and helps me accomplish why I started my business. So that's like the overarching mindset of like we're all stuck in this.

David Richter (00:11:29) - We think bigger is better, we think more income solves all the problems. We think more deals just equals that I can just get out of anything. And then we just, we go from six to seven figures, maybe even seven to eight. And our problems scale with this. I love how Keith Cunningham puts it in his books. He says, as you scale cancer, the tumor grows. So it's like if you go from six to seven to eight figures without cutting out the root issue and you just keep doing, doing more deals, more deals, more deals, more deals, you're never going to be able to not only make the money but keep it as well too. So that's like the crux of it. But that's why I say too, especially when I speak like we've heard that message just in different packages. Yeah. What turned me on to Profit First, especially as a real estate investor myself, was that there was actionable steps to put that habit and that formula into practice on a daily basis in the business.

David Richter (00:12:19) - So that way I didn't have to think about the money as much and be able to keep more of it like today on the next deal that I do and at the end of the year have money there and the end of the quarter and the end of the month and the end of the next deal. So it's not some just nebulous event that I'm waiting for in the future to be able to have this money. It's like now I'm building habits that are going to be from my daily, anytime money flows in, I give every single dollar a name and I'm controlling my money versus it controlling me. That's where it's built on the envelope system like Dave Ramsey teaches whether you love him or hate him. That financial concept of giving every dollar a name is good for the business world too, where you set up literally multiple bank accounts.

David Richter (00:13:00) - That's the system behind Profit First is to give the dollars a name and to name those bank accounts specific names. I could go into that, but that's what appealed to me was that I could actually set something up and it wasn't just like, oh, pay myself first. That sounds good. Does that mean just like getting a W2 like in my business and then making sure I get paid? It's like, well no, here's a system for every dollar that comes in and where you should put it because a business is a little bit more, can be more multifaceted, especially if you branch out and do bunch of different entities than your personal life, your personal life. Usually it flows in and you might do investing, you might do vacations and then like spending the money to live and like that type of stuff. But you're usually not doing like a billion things on that side. Usually it's the business side where you've got things just going scattered all over the place. So it's like how do we make sure we bring order to that chaos where it can get very quickly out of hand where all the money is flowing and going.

RJ Bates III (00:13:54) - Okay, so specifically to the people that are listening right now, who is this for? Is it only for the investors that are currently struggling with money issues or what about the guy right now that says, listen, I've got a couple hundred grand in the bank right now, I know I'm doing well. Should this be something that they look into as well?

David Richter (00:14:16) - Well I would just say you're going to fall to the level of your systems, right? Right. Versus rising to the level of your highest education that you've ever gotten. It's like we're, when bad times come, we need a system in place that overrides whatever we're thinking or going through at that time. So it's like, that's where I would say I like having this because if you've made that money, you probably have good habits. Like if you have that money in the bank already, you might already have some of those good habits will a assist them just enhance that and make you have more money and more opportunities to be able to direct it better. And if you're struggling

RJ Bates III (00:14:49) - Oh, oh, oh no. Yeah, you know, we've, we've both done this for way too long that we know that's not the case. This could be the month in which he just closed the deal for 150,000 profit and we're just catching him on the wrong time and he thinks he's, you know, king Kong of real estate invest.

David Richter (00:15:07) - Well if we're talking about that, like you have money just because it's this month and you just brought in private lender money and you just closed your biggest deal and all that and your bank account looks really big. If that's where we're coming from, then okay, that's a different story. Right? I was thinking you were talking about the person who might have some money in the bank and all of that and like has had some good habits. But if you, if you have, if you have struck gold because it's been either dumb luck because of the deals that you've closed or you just got private lending and you've never seen six figures in your account before and you're like, oh my gosh, this is the most money I've ever held, then yes, you definitely need the system because then it's really easy to spend all that money very fast and blame it on everything else other than our money, habit and decisions. But

RJ Bates III (00:15:49) - That's why I bring that up, man. Cause I mean listen, real estate investing is one of these things where you can grow from bro to rich with a deal. Yes. You know, one deal, but you could also go from rich to bro in one deal.

David Richter (00:16:05) - You know, I was at an event and probably the best analogy that I've heard about the real estate investors was said there, so I, I'll give credit to this person. She said it was Lisa Coleman. She said, it's like being a an athlete. And I'm like, that's such a good example. Like real estate investors are the athletes of entrepreneurs. You know why? Because in one deal you can make everything you made in the last 12 months from your last W2 job. Because think about that. Like there's not a lot of other industries where you could literally do one deal and like make as much for your sake like that you made. So it's like maybe you made 50 grand last year in your W2 and you're like, this is stupid. Like this is not enough money to live on. Then you go out there and flip your first property and guess what?

David Richter (00:16:45) - You get this $50,000 check and you're like the power that you held over 12 months and spread out. You now have the power in one single check and you're like, what do I do with this power? Like where do I put these dollars? And that's where it's the, the same thing if you have the same athlete's syndrome where they just go out and they've made millions of dollars now and then they go ending up broke and then like working at the pizza Hu , like when they're done, it's like, that's where I don't want you to have that because now that you have that power, now how do we harness it to make sure you can continue growing to where you want to be and not becoming broke? Because that was, I love what you said, you become poorer though than the athlete does. Like the athlete might have a seven year contract, you know, and then like they're out there and then after seven years they're like a bunch of bad habits and then go away. But you could be like the first deal, 50 K, then you invest all the 50 K into the next deal and to the like your operations and to marketing everything else, but to build a solid foundation for your business and then it could be gone on the next deal because you're like, oh shoot, I just lost $10,000 on this next deal or whatever.

RJ Bates III (00:17:47) - I, I've been open about some of our struggles from, you know, 20 19, 20 20 from the purchases that we made in 2018, right? Yeah. These are deals that lost money, lost private investors money that we had to pay back and, and some of these struggles. Okay? Now the funny thing about these struggles is, is when you go back and you look about the volume in which the bad deals was, was a very small percent mm-hmm.  in comparison to the deals that went right. Yes. And so this is an industry that with a couple of bad deals can really impact you, especially when you start playing with big, big high dollar deals. Right? Oh man, that is so true. And that's where I think Profit First could come in because one of the things that you talked about was is identifying the root to the problems before they become actual problems. Yeah. So talk about that a little bit because specifically to, to life flippers and landlords, this, I don't think this impacts wholesaling as much, but for the people that are taking ownership of a property, identifying the problems before they become life

David Richter (00:18:52) - Changing, man, I think it applies to anyone who handles any money through their business. Because I think that's where if you have bad money habits and or have never been taught, we've never been taught this stuff. Like where can you go where there's like a personal finance guys, okay, there's like the Dave Ramseys, the Suzy Ormans, like there's the big financial gurus out there where can you find that? Where like maybe Shark Tank, the profit, you know, like maybe some TV shows like that, but it's not like taught at anywhere. So I'm like, this is where you're going to have a lot of issues if you just don't get some type of system there. But that's where if you're a flipper or a wholesaler or like you have a rentals and you're doing like a ton of these deals and like you, you handle a lot of money coming in and out.

David Richter (00:19:31) - I wanna make sure that you have a simple system set up because what are the biggest mistakes? I see number one, because that's the question here. I believe that you were asking like number one, you don't have a plan for the money. Like you are building your business on the hope and prey plan. I hope I make enough and I pray there's some left over at the end of the year. That's literally what's running through people's minds because the, and if you're running on the hope and pray plan and you're like, well I've never said that. It's like, yeah, you've never thought about the money. Like what do you actually need from your business? Have you ever sat down and said, this is what I need, this is what I need to keep, this is my keep number. What does that need number that I need to bring in from my business on a monthly basis?

David Richter (00:20:09) - That's the very first thing where I think the biggest mistake is having no game plan of like what does the business actually provide? Because we even talked about when you were on mine, the shiny object syndrome or searching for unicorns. It's like that's when it's very easy to fall into the comparison trap of every single event that you go to. You listen to podcasts, you go on Facebook, you listen to all the people doing a bunch of deals and you're like, I should be doing what they're doing. And then you're comparing yourself to them and feel miserable about your business. The biggest way this hit me, I was literally on a call with a guy about a month ago, he's 25 years old, did 500 K in Topala in gross revenue last year and netted 300 hundred K and was feeling down on himself on this call with me because he is in a mastermind where other people are making 1,000,007 figures.

David Richter (00:20:54) - And I'm like, oh my gosh, like you are beating yourself up. But do you realize, I said, how much did you do the year before a hundred k? I was like, you went from a hundred to 500 and you netted that much and you're feeling bad. Like dude, we got some stuff we need to work through, right? Like how much do you need? Like who cares about anything else that they're doing? Do not compare yourself at all. Where are you on your journey? If you're like, you know what, I did 500 K and next year I could do seven figures and that's what you are supposed to do. Then you can go after that goal. But it's like, if that's just because someone else is doing it, then you live their business and then you're like, why? You know, like why don't I feel happy about this? And it's like, that's a miserable way to live. And then we wonder why we wake up hating our business every day. So

RJ Bates III (00:21:36) - There's the Well, but it goes deeper than that man. Yeah. Can you talk about it? I mean, why did you have a panic attack,

David Richter (00:21:42) - Right? Yeah. It was like I had panic attacks because I was thinking that  man, man you're taking me back here. Where I was thinking that other people had to control my time, that I needed to be what I needed. Like I had money issues and problems. Like I was letting the money control me. Mm-hmm. , that's why I was having these panic attacks of why I was like fighting with my wife about these issues and stuff. Like I talk about in the book because I needed to control it and I couldn't, I never had that grasp and I never, the money was flowing through my fingers and I was just living the life of comparison, letting everyone else dictate how I should live my life from either from people that I even respected and loved to the people that like my wife or you know, that I respected and loved as well too, but was closer than even my friends and other people.

David Richter (00:22:28) - Like all these people in my life where I was like, okay, I'm giving up my identity for them. That's where I know I talk about that in the book. Ah man, I, I need to write another version cuz there's a, another book Crucial Conversations which changed my life last year and in chapter 10 it's called Retaking Your Pen and your Pen represents yourself worth. Cuz when you're a kid, you are born with your pen in your hand, you're writing your story. It's a very, it's very easy to write it and scribble all over the place. You don't give a flip what anyone thinks you get to junior high high school, how do I fit in? What do I need to wear? How do I need to act? What do I need to listen to? What do I need to watch? Then they take your pen and they're writing your story.

David Richter (00:23:05) - But then if you're listening to this podcast, okay, at some point you probably took that back and said, I'm gonna start a business or I'm gonna do a real estate deal or I'm gonna get out of that cuz I can make an impact on people. Like I can do deals and I can make money. So you took your pen back, star Rhine, nip your story again. But then you go on Facebook, Instagram, you go on TikTok, you go on, you know, to these mastermind events or whatever and they say, this is how much we're doing. And then you become not satisfied anymore with what you're doing in the journey you've been on. And you say, okay, there you go. You gave up your pen again, they're writing your story. That's what happened to me. That's when back then I was like giving other people my pen all the time and that's why they were writing my story and I didn't like it.

David Richter (00:23:44) - I didn't feel, feel very good. You know, like when those other people were like, I would go to those events and they're doing those deals and they're like, yeah, we have to do those deals. We have to be, you know, this big and make this much money. And it's the same thing here where I see it all over the, you know, the place people are giving up their self worth to others, letting them write their story and then wondering like, this guy who is literally had, this was not even, he wasn't having huge issues. The issues was he didn't have clarity of where that money was going. That's why we were all on a call, but he was doing well financially, like 500 K gross and then 300 K net. Like that's pretty good for his second year in real estate. But it's like he was letting other people control his pen.

David Richter (00:24:22) - I've had some people come to us and they've been like negative 300,000 in the hole. They have a big team, they've been running and gunning it. They've had those crappy properties that they've had to sell and they, you know, turn them upside down where a couple deals can turn you up just very quickly from profitable to negative and like a nonprofit. And that's where I've also seen them where they were like, we were just running and gunning it all the time and they were giving up their pen and then they had to dig themselves out to be able to say, here's a system to get outta that. So that's why I beat this drum. So much of you need to find what you need for your business and not be held to what anyone else is telling you.

RJ Bates III (00:24:58) - Well, I want to, I want to touch base on the whole, uh, take your pin back. Yeah. Uh, analogy there because I listen, I I I repeat myself. I beat dead drums too. I think that's just part of being a podcast host. So Oh, it, it is what it is for sure. Uh, there's a reason why we do this and there's a reason why we beat drums. Okay. But what you just talked about may reminds me of my son. I mean my son's 10 years old, 10 and a half. Um, he

David Richter (00:25:25) - Just

RJ Bates III (00:25:26) - Ask him, yeah, he, he plays, he plays travel hockey. Okay. And to him, he is, he's gonna go to N H L. This is what he has decided he wants to do in his life. He's gonna go do it. And so I've told him I will support him as much as I can along the way. Well here in Texas we have one AAA program that's the highest level that you can play. So only 15 kids in the entire state of Texas can make that team. He's probably 17th or 18th in the state of Texas. Wow. So he didn't make it this past year. Yeah. Now if he lived anywhere else in the United States up north, he'd be on a triple 18. Now, unfortunately what's happened there is is already at 10 years old, someone has grabbed his pin ah, and labeled him as, you're not the best, you're not triple A, you're aa And it impacts him.

RJ Bates III (00:26:16) - Yeah. It's already impacted him. And I've told them, son, I didn't say it with these words, but essentially take your pin back. Yeah. Those people don't control what you're gonna do with your life. Those people don't control though right now they're making a decision for one aspect of your life when you're 10 years old, , that does not impact what's gonna happen to you when you're 17 or 18 years old. Yeah. And as adults it's even worse. Oh man. You come from every different direction that you could put friends, family, significant others, mom and dad, you know, I mean it comes from every social media,

David Richter (00:26:51) - Social

RJ Bates III (00:26:52) - Media. I mean, even honestly, some of the names that you've dropped, Dave Ramsey for

David Richter (00:26:57) - Price

RJ Bates III (00:26:58) - For some of the good stuff he says for real estate investors, he also says some really bad stuff.

David Richter (00:27:02) - Right, exactly. Oh,

RJ Bates III (00:27:04) - . So, you know, it's like, it's coming from all different directions. The thing that I love about this system that you have is that it is giving us that control to understand where our business is.

David Richter (00:27:17) - Right.

RJ Bates III (00:27:18) - And I you say it all the time in the book, and, and I said this to you earlier, bro, your book is hilarious. Okay? And I don't think you meant like as, as informative as it is, it's downright comedic at times because you deadpan deliver like the excuses that real estate investors give other people and themselves. And you give it in such a deadpan manner where then you just move on to, well here's the solution. And I'm like, this is hilarious because you're literally calling out the entire industry and I've, I've been in it for eight years. So I think I can say you're calling out the entire industry Okay. With some of the answers that you're giving there. I love the fact that you are sitting there and you're saying you don't know where your business is if you're not using this system or a similar type system. Yeah. And when you talk about the people that I, I know you name some names in the book, but yeah. At this point, how often have you seen someone implement your system and it changed their lives to the, the, the tone of six figures plus on an annual basis? How often does that happen?

David Richter (00:28:38) - How often? Well, how many people signed up this last week? , you know, it's like, um, that's where I feel like the business has grown that I have because, because of what you say, I say it, I, I am pretty sarcastic and dry. That's just my humor. Like that's my type, right? So in the book it's very, it comes across like, here you go, here's the issue. This is what you're doing, boom, let's solve it. But that's where I would say, now I get these stories all the time of like people just going absolutely chaotic because some of them come to us with like, uh, like the first guy that I ever even worked with Rich Lennon, where like he was going crazy with the bookkeepers and like didn't have the right numbers to then like just knowing where he was. So that type of hap ha that happens all the time because we wanna give people financial clarity, but then changing it to the tune of six figures, that happens probably, I don't know, we work with a hundred people, over a hundred people plus on a monthly basis right now.

David Richter (00:29:30) - And that stick with us and that like need that that help. And so I'm, you know, probably 10, 15 a month, you know, like where I get some type of like feedback now of like, here this is is what this is helping with their system or this is where they're getting this clarity or like now they understand to how to make this decision better because now they've gone through this system and this process, it's like now it's constant because now I've been in business long enough where I get to hear that and interview 'em on our podcast and like just be able to hear their stories of this is where they were, this is what they implemented and now this is them on the other side. And being able to hear those, those stories. Cuz now, now I share 'em on my podcast, I share 'em out when I speak.

David Richter (00:30:08) - There's just like, there's some turning points cuz once you know, once you have the account set up, the profit first system actually implemented and you know where the money's flowing, you get to now make decisions based on those numbers and that profitability. Because some people, I remember one guy who was like the negative 300,000, he also had a bunch of bad tax debt as well too. So it not only helped him get back to the black and out of that, that you know, that hole, but then he didn't worry about the taxes the next two years. So it's also about like, yes it can change it the monetary, but then it could also change the like what have you always stressed about before around money and like, can we put a system around that so the next time this thing comes up that you know is going to come up every single year or every single time that we could put something around that.

David Richter (00:30:53) - So then it's those stories too as well of like, okay, I know I'm gonna stress about this and I don't want to, or I was spending four or five hours a week just trying to get my numbers in place or I was spending, okay, this happens all the time. They come to us and it's like I spend a whole weekend or three weekends in a row before tax time trying to get everything in place for my C P A and then they come back to me with all this stuff, then I waste another seven or eight hours. It's like, what can we do to eliminate all of that? Plus have, I hear this a lot too from people. We've done less deals this year, but we have more money. Yeah. We're Ben, we're being more intentional. Like we're either doing bigger deals or like I'm not running around with chicken with my head cut off and now I can focus on the profitability. But that's where I see this transform all the time.

RJ Bates III (00:31:36) - And I'll just say this, if if like you don't understand what he just said there about doing the less deals, it's because you're going to diagnose where maybe you are spending money on a form of marketing that is generating deals but is not creating profit for you. Yeah. And, and if you don't understand that, then you're just not far along in your journey. Right. You will very soon understand what we mean by that .

David Richter (00:32:05) - Yeah. If

RJ Bates III (00:32:06) - You're an action taker, it'll happen. If you don't implement Profit first, if you implement Profit first, it'll, you'll catch it. Yeah. Um, so you have a goal similar to Steve Trag. Steve Trag has a, a goal of creating 100 millionaires. Yeah. What is your goal as far as with Profit First? I believe it's, you want to impact 1 million people. Is that Yeah,

David Richter (00:32:27) - Exactly. I wanna impact at least a million in the real estate space as I continue to grow. I think that number can't even grow as well too because I've learned that these principles are, are principles that work for every single business. That's why Mike wrote Profit First. That's why there's these niches out here. I think I could get, if, if I could just get out there and get the message out even more, I think I could impact if everyone would listen the entrepreneurs just in general. So I feel like a million is a good place to start. I could probably hit that in the next 10 years of like, just not even that of like how we're doing this and how we're rolling it with the podcast, with all the people we're touching there with the speaking engagements, all that stuff. Just be able to touch a million people with this message.

David Richter (00:33:10) - And that's where I wanna go from there. And like now that I feel like it's taken me years to get it more simple, especially when I go out and speak and have my presentation to get it very simple for everyone in the crowd to understand at their first deal or their thousandth deal what the system's really about. And I'm like, now that I have it that simple, I don't know if there is a number. I think it's just I have to make the connections like we were talking about like with Mike and just these key things to be able to go out there and like, okay, this could get me on a bigger stage or a bigger platform of like, how can we get the book out more? How can we make sure that we're actually getting the message out as much? So yes, that's my first goal is I wanna impact a million and, but I've got different business goals and other things like that too. But that's like the first big goal of like getting the message out.

RJ Bates III (00:33:55) - Okay. So if someone's listening right now and they say, Hey, I want to be a part of that million, I wanna be impacted by this. What is your ideal blueprint for them to be impacted? Is it just go out and they buy the book? Or what is their first step? What is their step-by-step process to be impacted? Sure.

David Richter (00:34:15) - My, for me it is just listening to this message and implementing one aspect of it. So if they go out and buy the book or they listen to this and they go out and implement another bank account and now they have a good money habit of like, all this money's coming in, but I don't spend this 1% and it goes to this other account like, can we just get into good financial habits? That would be how I wanna impact. Like, they go out and they actually get something and implement it inside of their either personal lives. Because even if you don't, if you're listening to R J's podcast now and you're like, I haven't even done my first deal. Set up a freedom account in your personal life and be like, okay, I'm going to work towards either the coaching, the mentorship or my first deal.

David Richter (00:34:54) - You know, it's like that's how I'm Noah that I'm gonna get out of my rat race or whatever. It's like, I don't care if you're not even in real estate or if you're not an entrepreneur and, but you're wanting to get there. There's something that you can do to start these habits where you are. Or if you're like, I'm already in the thick of it, I have 10 businesses, what the heck do I do? Same thing. Start with where you are. Like what is the biggest issue or what's the biggest, the biggest headache when it comes to your finances on, you know, the business side. So it's like, let's do something there. Let's implement something where you can right now, can you get your team involved? RJ said on his podcast, his bookkeeper on my podcast that his bookkeeper is out of town this week, but next week it's off to the races with like starting to implement this system.

David Richter (00:35:32) - So it's like what can you do after listening to the message, whether it's this podcast, our podcast, the hundreds that I've been on other people's or like reading the book and just getting those systems in place and start to say, where can I start? Is it the keep number? Can you sit down with your significant other and stop fighting about money for a second and say, what do I need to bring home? Or like, when can I quit my W2 job? Or when can my spouse quit their job because we're bringing X amount home and that's what we wanna base our business on versus me being ping ponged around by everything else that I'm hearing from all these external sources. That's what to me is an impact. Whether I impact you in that perspective or like you've set up the accounts now and you're actually seeing the money in place.

RJ Bates III (00:36:15) - You wanna know what I love about that conversation I had with my bookkeeper this morning? What I walked in the door. I had just gotten to the point. So I I listened to Audible on the way to the office. Yeah. I wait until we finish the chapter. Okay. Boom. Turn the car off. Have to open the door before the next chapter starts. I'm walking in, I have like 45 minutes left in the book. Yeah. So I know I have a meeting this morning. I'm gonna do the meeting and then I'm gonna sit down and I'm just gonna listen to the last 45 minutes of the book. She sits right outside my office door. So I'm walking past her and I said, Hey, I know today's her last day before she's gone on vacation for the rest of week. And I said, Hey, this book's called Profit First for Real Estate Investing.

RJ Bates III (00:37:00) - We're gonna implement this. I'm gonna want you to read this book. And essentially what it is, is we're gonna have different buckets and those are gonna be bank accounts for different expenses like taxes, profit, overhead, blah, blah, blah, blah, blah. And she goes, oh, I love this. This is amazing. I'm gonna read the book on the way to my vacation. I've got an eight hour drive. Nice. I'll always do on the way. That's what you talk about it in the book. If you have a bookkeeper that thinks that this is gonna cause them more work, you have the wrong bookkeeper. Right? So thank God. Cause I really like Kristen. I was glad she answered the way she did.  . She's like, that's great. This sounds amazing. Last thing I wanna talk about is you have this saying, which I am a, I'm a sucker for, for cool sayings. You say, let's make profit a habit. Yeah. Not an event. Where did you come up with that man? Because that is freaking gold.

David Richter (00:38:05) - I think it's from all the profit first stuff out there. Like I saw that either Mike said that once or he's, or there's some on the material and I'm like, that is so great. That is encapsulating of like, you don't want this to be something out in the future. You're always going forward. It's like, make it a what is happening today? What are you doing today? Like that also helps you negotiate deals like, are we gonna make enough in this profit from this deal to be able to fund, you know, like our lifestyle and the business and to make sure that we can keep going. So it's like it, it just changes how you view money and like, okay, you know what? We've done enough deals this year. Like one of the clients that we have called me last year in June and said it's June, I have filled up all of my accounts from now to the end of the year.

David Richter (00:38:49) - I don't have to do another deal. So that told me two things, that he's got the clarity to know how much he really needs. And then number two, that he actually followed the system and put the money where it needs to go. It's like those are the things where he was making it a habit and not like, okay, in December, hopefully I have enough money. Like do you know, and that we can take a some time off, take a vacation or a bonus or whatever. So it's like make profit a habit in your daily life and in from every deal that closes the next deal that you do, can you put some money away like the prophet first system teaches. So that's what making it a habit on these next deals versus an event that's just gonna happen sometime in the future.

RJ Bates III (00:39:29) - I love it. All right, so for everyone that's listening, give it out. Where can they find the book? Where can they connect more with you? How can they get started in this process?

David Richter (00:39:39) - So if you're okay with it, I actually created a specific link for titanium podcast You get the full book. If you go there, you get the full ebook profit First four Real Estate Investing and you get the keep number form that you can sit down with your spouse, significant other business partner and say this is what we need to keep from our business. So go to simple and then you can get that stuff for free. I'm not gonna, I'm not the best marketer in the world so I'm not gonna blow up your inbox and stuff. So like, you know, this is just to make sure you have these next steps so I can make an impact on you. So go to that website. It also gives like how to implement profit first for personal, some other things that are much requested, things that are very easy with the Profit First system.

David Richter (00:40:24) - And then if you wanna book a call with us, you can do that from there. Cuz we implement Profit first and put, you know, like if you, if that, if your bookkeeper would've come back and said like, oh my gosh, profit First, all this stuff. We guide bookkeepers and people on people's teams to like be like, okay, this is how it's not going to create havoc in your life as well too. And like help them, we implement a dashboard. You know, so that way the owner can see things clearly. But there you go. Simple that takes you to also my site, simple, which has like the podcast and other things if you want actual more content and wanna hear other people. I started that podcast to give people hope  around the money. Like just to make sure you hear other people's stories cuz that's where, where you were asking me RJ of like how is this impacting people or whatever. A lot of stories on there of how people have gone through that process and what it's done for them on the other side.

RJ Bates III (00:41:12) - Well first and foremost, I didn't even know you had that link. I didn't know you, you were giving the book away like that. That's freaking amazing guys. I'm just gonna be honest with you. Like I'm, I'm not saying this cuz David's on the podcast. Okay? Like I actually really love the concept of this. I was blown away with the book. It's repetitive. Okay? It's repetitive because humans are stupid including you and me. Okay? So he needs to repeat himself. Yes. But it's also to get the point across so you actually take action and you implement it. I appreciate the way that you outlayed the book. I also will say this, I'm a tough judge on books. I read 35 books in 2022. My average star rating was less than three. Okay. Oh and in 2021 it was, it was also less than three. I gave it five stars.

RJ Bates III (00:42:07) - Okay. So I'm not just saying this to be nice, I'm actually a pretty tough judge books, especially when it comes to anything real estate investing, right? You know, you, you can kind of get me on some other topics where I'm like, ooh yeah, this sounds good. Real estate investing. Normally I'm kind of like, this guy's kind of full of shit.  even knows this stuff. Alright. Right. I can tell by the way he talks, this dude is not joking when he says he is done over 850 deals. Cuz I could tell by the way he carries himself, he out. He outlines everything for you with the Profit First system with being a real estate investor. So I love that. I love meeting people that actually know what they're talking about and want to help other people. He obviously wants help cause he charges money for the book and other places.

RJ Bates III (00:42:52) - He's given it to you for free here. I love that. David, thank you so much for coming in. And also, I'm gonna, last thing, Kay, not to toot this guy's horn, but I can tell he is a damn good real estate investor because hiss follow up game was strong bro. I know it wasn't you, it was your team. But then you probably don't even know this. You guys send me so many damn emails and I leave all of my important emails on unread. Yeah. And y'all's podcast swap email where y'all, I mean it was like you literally pulled me out of retirement. Dude,

David Richter (00:43:24) -  again, I do not like wasting my time. So it's like I wanna make sure people get those notifications and if you don't get on it is your fault. Like we're gonna reschedule and I'm gonna go to other things. I'm super busy. So it's like

RJ Bates III (00:43:38) - No, no, no. I'm talking about just to make it happen. Oh,

David Richter (00:43:41) - To

RJ Bates III (00:43:41) - Make it happen your life. Do you wanna do a podcast swap? Do you wanna do a podcast swap? And I was like, yeah, I'm gonna get to you. Eventually.  retired.

RJ Bates III (00:43:49) - I got tired talking to other people like, lemme figure it out. You know? That's awesome. So that, hey, good side of a good real estate investor. So also just throwing that out there. If you wanna do over 850 deals, learn how to follow up with people, that's how you end up with that. So David, thank you so much for coming on here. Thank you for sharing that link. It'll be in the show notes. You can click right down there, download your copy. But I'm just gonna tell you right now, don't download the copy if you don't plan on implementing and taking action. Right. Because otherwise you're just wasting everyone's time. So, exactly. David, thank you so much for being on here, man.

David Richter (00:44:20) - Thank you rj. I appreciate you letting me spread the message.