In this instructional video, the speaker addresses a common pain point among real‑estate wholesalers: closing deals but constantly scrambling for cash. He argues that profitability hinges not on how much revenue is generated but on how much is retained. The core solution presented is the Profit First cash‑allocation system, adapted for wholesale businesses. He outlines a multi‑account structure—profit, owner’s pay, taxes, operating expenses, and a rehab account for flippers—paired with recommended percentage ranges (profit 5‑20%, owner’s pay 20‑40%, taxes 15‑20%, expenses 30‑40%). Concrete examples illustrate how a $20,000 deal or an annual revenue of $250‑$500K can be split across these accounts, showing the impact on cash reserves. The speaker then explains how to reverse‑engineer marketing budgets using goal‑based calculations (e.g., desired monthly net, average deal size, conversion rates) to determine required lead spend. He emphasizes a mindset shift: paying yourself first, separating personal and business funds, and treating the business like a profit‑driven entity rather than a hustle. Actionable steps include opening 3‑4 dedicated bank accounts (he recommends Relay), setting allocation percentages, splitting every incoming payment, and reviewing allocations monthly/quarterly. He also addresses typical pushbacks—reluctance to open multiple accounts, mental tracking, or fearing no cash for self‑pay—and counters them with discipline arguments. The video concludes with a call to action to book a coaching call or watch a follow‑up video on KPIs, reinforcing that disciplined cash management transforms large checks into lasting wealth.
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One of the main issues that I hear over and over again when talking to other wholesalers and investors is that they're doing the right things, they're closing deals, they're making money, but they're always scrambling for cash. And trust me, I've been there. You know, you close multiple figures and then a couple months later you're asking yourself, hey, where is my money? So one of the main things that doesn't get talked about enough is that it's not about how much money you make, it's about how much money you keep. And in this video, I'll be breaking down exactly how I pay myself first before any deal and how we account for taxes, expenses, and to make sure that we have the savings to keep on investing in the business so that we keep on growing at a profitable rate. So with that being said, let's get started with the video. All right guys, let's get started. I know this is not as sexy as closing deals and marketing and getting leads and all this, but it's very important because in the end, the boring stuff is what makes you money. And you had— you gotta have— you have to have a plan on how much money you want to make and how much money you want to keep. So how to actually keep more cash in your wholesale business using the Profit First method. What are some of the things that we deal with, right? So you get paid and then the money disappears as fast as it comes in. You're usually always scrambling for taxes and expenses and write-offs, or you're spending money on random stuff because the money is there and available and you get, you know, in a tough position. When you have to pay for mentorship, investment, marketing, things like that. And you're usually living deal to deal and you're never stable. And trust me, I've been here. Real estate is up and down. And this is why now I know what to do just from the mistakes that I have made. So what are some of the things that I often see or things that I used to do when I would close a deal or something? So you have no system, which equals chaos. You pay yourself last. So as a business owner, you need to be paying yourself because if the money's there, you're going to spend it. And remember, we got into this business to make money. So we got to start thinking like a business owner and not just hustling for deals, right? So a lot of the things I see is you mix business expenses with personal money. You got to be able to separate those. And usually you forget about taxes until it's too late. Or like, if you're raising capital for flips, you don't separate the accounts properly to budget for those rehabs and to account for it. This is when people start getting into trouble. So what is the Profit First solution? It's basically breaking down your monthly, uh, revenue into different accounts, right? You gotta have a profit account, you gotta have an owner's pay account, you gotta have a taxes account, and you have to have an operating expenses, um, account, which is gonna be kind of like your biggest, cuz that's where all your expenses are at. And then if you're flipping, flipping houses, you need to have a rehab account on here, right? But you know, it's pretty simple. The profit account, you're gonna set a percentage, which I'm gonna go over shortly. Set a percentage that you want to take depending on the revenue of your business, uh, for each of these, right? So profit anywhere from 5 to 15-20%, owner's pay 20-35-40%, taxes 15-20%, and expenses will probably be around 30-40% depending on your revenue level. So let's see some examples. Let's say you close a $20K deal, you spend $15K on random stuff, you're not tracking stuff, and then you're scrambling later on in the year for taxes, and then you have no savings. But what does it look like for someone who's actually using this property? Let's say you make $20K, you save 20% in your profit account. So that would be like $4,000, 30% into your owner's pay because you want to pay yourself like a salary and distribution. Like I said, this is not financial advice. Consult, consult with your lawyer, but you got to have a salary with your business and you got to take money out of play because remember, we're trying to build a business that serves us, not the other way around. but with the same example, let's say if you save like another 30% for expenses and then the rest for tax on here, you know exactly where each dollar is going to. And I see this so often where people want to work with us, but they say like they don't have the money or they don't have the cash. Um, besides tracking numbers and tracking your KPIs for your team, you gotta be able to do this with your own money. Cause the better that you are at this, the more money that you'll be able to keep and build a business that actually serves you. So remember, that's very important. And I can't stress it enough because often people just blind, just fly blindly, just trying to make money, but without a goal in mind, right? So what are some recommendations? So let's say you're making $250,000 to $500,000 a year. A healthy profit would be anywhere from 5% to 10%. For the company. And remember, for owner's pay, that's what you're gonna take out in distributions as your salary. So the less revenue that you're making, you know, we wanna make at least like half of that plus, you know, the profit can be anywhere from 5 to 10%. And that's why I always recommend, okay, break down the business that you wanna build, how much money you wanna make and how much money you wanna actually keep, right? So, Let's say on the $250K example, 5% profit, 50% owner's pay, 15% tax, and 30% operating expenses. Once you get to grow a little bit bigger, uh, you can take a little bit more profit and then cut the owner's pay a little bit. So if you're making $20K to $30K per month, that'll be equal to around $2,000 to $4,000 in profit. And then the the 30% would probably, 35% would be 5 to 6 grand that you're paying yourself. And then you're kind of saving the rest for expenses, taxes, kind of like all those things. And then the more that you grow, you can increase the profit for the company and less owners pay 'cause it's gonna like equal out and balance out. But for the tax, you know, I think 15% is pretty stable. Then operating expenses, you need to account for those, the grow, the bigger that you grow. And then past a million, um, you can do something along these lines. Usually going to have higher expenses, but it's all based on your actual business. So what you need to do is first, I've done a video on this. First, to account for your marketing spend is first you need to hit the goal. Okay. Set the goal on how much money you want to make and then use the reverse, reverse engineering calculator in order to know what your budget is going to be. So let's say you want to make $50K per month, and then let's say your average deal size is $17,500, and you have a success rate of 75%, meaning that if you lock up 10 deals, 75% are going to close and the rest are going to fall out due to title issues, whatever. Um, and then let's say, you know, your leads to a deal, right? So with Facebook, we are at 25 leads to a deal and we make $17,500. Uh, that would mean that I would need to save in marketing 4 grand in order, you know, each month so that I keep on hitting my goal of $50K, right? And then you can make all the math depending on the budget that you're trying to hit and the goal that you're trying to hit. But the other thing you need to do is, okay, this is for the marketing, but then you need to add up all of your business expenses, right? Things like software, databases, commissions, you know, all those things. You need to be able to work them into your own business. And it depends of, like where you're at right now and where you want to get to, right? So that's super important. So for us, my overhead is around $30,000 per month, and that accounts for like marketing. We get 8 to 10 deals, and I basically try to keep at least like half in like reserves, and then I pay myself like 20% off of that, and then I have like the savings on that, and then the rest just basically goes to operating expenses and taxes. But I set the goal of what I want to net and how much I want to keep. And this is my own individual, um, for my own business. So you got to do it for yours. So one of the main things you have to do is you have to have a man— mind shift— mindset shift. So one of the things that I see is if the money is there, you're going to spend it. So that's why you got to take money out of play, because that's when we get into the nitty-gritty and you start getting into losses and scrambling for the cash. So the profit first forces discipline, and you can actually get to your goal much quicker this way because you now, you know what you're trying to fight for. Um, usually your expenses will shrink to fit your system, so you just gotta account for those in order to run a more lean and profitable business. And you're gonna be like, you're gonna be, you're not gonna be guessing or stressing because you know you have 3, 4, 5 months of reserves. In order to keep the business moving forward. Because the more deals that you get, the more money you're going to be able to make, right? And you get paid out of every deal. So it's super important that you have this mindset shift and consider this because like I said, I see it over and over again. People want to work with us and they just don't have the cash available or they're getting into like bad positions. So learn from my mistakes and start applying this. So what are like some common pushbacks? Oh, I don't want to have 5 accounts. Well, you need to sacrifice and do something. The whole point is that if you only have one account, that's why you're broke. So you gotta be able to separate it, right? Or if you said that you wanna track it mentally, you won't. Cash is one pot away from always just getting spent. So that's why you gotta separate it. Or if you say you can't afford to pay yourself first, then you gotta look into your conversions, your KPIs, and what you're doing with your business because this is what you must do or you will always be last in line. And remember, we got in here to make money, so let's make some money. And this is what's required in order to do that. So what are some actionable steps and how to start today? Open 3 to 4 separate bank accounts. I recommend Relay, makes it pretty easy. You can have multiple accounts and then you gotta decide, okay, what's the revenue that I'm trying to shoot for? And then you need to decide on the, percentage allocations for profit, your pay, your taxes, and your expenses. And then every deal from now on that you get paid, you need to split it, um, amongst the different accounts and start building on profit. And then you can start reviewing monthly and quarterly, and you can adjust the percentage as your business grows. So the key takeaways is you need to stop living deal to deal. And start thinking like a business owner. You need to pay yourself first. You need to separate your accounts because you're going to have better peace of mind. And the profit first turns big checks into lasting wealth because now you're able to invest. You, you have your expenses, your personal expenses dialed in, the business expenses dialed in, and you're at a much better position in order to keep moving forward. Now, this doesn't work unless you put in the effort and do this. So like I said, I see wholesalers that are struggling doing all these things. So, you know, you know that we help wholesalers implement systems into their business with their marketing, their sales, the KPIs, in order to make more money. So if you need help implementing this into your business so that you start growing on profit and not revenue, and you can implement our stuff that I have spent over $200,000 and coaches, masterminds, and gotten the best stuff from everyone and put it concise in a business that it's just, it's just for making profit. Book a call with us here in the link down below and let's see if we can work together. And if not, watch this next video where I go over our KPIs and how to reverse engineer your business. And with that being said, I'll catch you on the next video. Thank you.
