Mike Minute Mastermind 08/01/2022

Good morning Guest Nation. Hope you're all doing fantastic. Let's go ahead. I said fantastic because Lonnie was giving me flack over saying super well. So I hope you're all doing fantastic, not super well. Happy Monday. Hope you're all doing had a great weekend. Let's go ahead and get started. Last Friday, for those of you using Zooper, you probably got an email. If you didn't, it's probably your spam from Lonnie with a link to this coming Wednesday afternoon webinar just for Zooper users to be able to go over some of the basics, some of the things that they see consistently being user error, operator error. So definitely recommend checking that out. It will be recorded. But if you have any questions, anything like that, definitely a good place to hop on there. It's not really a place to like add features, anything like that. I know there's lots of ideas going around, but next year we will definitely be on that train. Right now we are. We really have Zooper on a very strict schedule of what we need done before January. So we still are pumping those out. But this is really going to be for just Lonnie going over a lot of the places that she sees people making mistakes in Zooper and how to fix those. So cool. Let's go ahead and jump into some questions. I think a couple came in here. I saw.

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There it is. Cool. Max. In Zooper, would there be a way to gather the email addresses of potential employees and send them one click Hiring emails once a month definitely can be done. I would use a tagging system honestly, and then just make them clients. I have not specifically tried to do that besides using that method inside Zooper, but.

There'S probably a reason why most softwares don't actually allow you to email bulk email your your client base, I'm sorry, your employees, because they haven't opted into anything. And so typically that is a security breach and something that's not allowed to when it comes to mass marketing or emailing somebody like that. However, like mass, mass emails, obviously you can email your your employees, but most softwares don't allow mass emailing of employees. So if you're going to do that, usually you're just going to use tagging for the customer side of things. But you could do that in service auto part right now, honestly.

All right, this didn't come from anybody. I find myself struggling with the feeling that I am not doing anything of meaning. I feel like all I am doing is working the status of making More money, which I don't think is bad, but I feel like this is all I am working towards. Make sure I can actually see this. Okay, there you go. While I have goals, I feel kind of empty. I usually have a really high high this time of month when I invoice, but by the end of the month, I feel depressed or unsatisfied. Can you maybe give some advice or pointers maybe on how to feel less empty about what we do? We all do as business owners. I typically feel this way the most I typically feel this way the most this time of year when it is very hot and work hits kind of a lull. But for whatever reason, this year, it feels like it hasn't gone away. Cool. So let me be honest and say it's not going to go away.

Whenever you have a mission or a goal, the tools and techniques and the route you choose to get to that goal is always going to be in question. There is no roadmap, there's no GPS to reaching your goals, and there's a hundred ways to be successful. And so it'd be like if you were like, hey, you know, you're in Mexico and you're like, hey, get to Canada. Like, there's several ways you can go, and there's many different routes that you can take. And so what happens because success is that way is we choose a path. And I start a lawn care business. I'm gonna join Augusta, and I stop my other job, whatever it might be. I'm gonna hire employees, I'm gonna grow my business. And because there's so many routes to success, we always start to. We always start to question and wonder what would have happened if we would have chosen another path? What would have happened if we didn't chase the money, could have been successful and achieved work, life balance, or where I went with my family or personal relationships or health without having to do this business thing. And so what is important is defining what success looks like for you and then realizing that you're just on one of many paths to that location. There are many ways to be successful, many ways to make money. And if money isn't a real massive motivator for you, the goal, the dream, the ambition needs to be much greater than that. And then you just realize that money is the fuel to get to the goal. If you're going from Mexico to Canada, you're going to need fuel. Money is that you got to have it. You can't run out of it, and you've got to have a lot of it. And so just realize that if making money is not going to be enough of a motivator for you to get up when you don't want to and, and to do things that you don't, that are not comfortable, you're going to have to keep the North Star of Canada or whatever you're moving towards that success in your mind and then not judge yourself based on the path you've taken, because there's a hundred ways to get there. And that's why most people will quit, quit their business usually in the second and third year, because it's been a year, two years, three years, like, man, I'm not making money anymore. I'm not making enough money. Like, I'm running out of cash. And it's hard. It's difficult. They get disillusioned by the fact that the five to 10 years that they is required to get to Canada to get to their successful position. It's very disillusioned. It's very hard when you're halfway through that goal and you're running out of fuel, cash. And that's why you feel better when you've done invoicing, is because you just tapped up on fuel. You just got more cash in the bank. Let's go, we can get to this. This is going to become successful. They got fuel. That's what you'll feel better when you invoice at the end of the month. You have the cash, you have the fuel, and now your goals seem more attainable. Then what happens is you get disillusioned by two things. One, other routes of getting to that success. And then secondarily, the definition of success and the destination that you're traveling to is not clearly defined. And so just getting more money, that is getting more gas in the tank, is not enough for you to wake up every single day and do hard things. It's not. Because it'd be like me saying, well, I'm traveling and I'm just getting more and more fuel. I'm fueling up. I'm getting a bigger and bigger gas tank. Great. Why? Like, if you want to make more money, you've got to figure out, why are you making more money? What's the goal? Where are you trying to travel to? If I'm getting from Mexico to Canada. Fuel, very important. If you're trying to, you know, give back to your church, become financially independent, provide for your kids and your family so they can go to college, whatever it is, whatever that North Star is.

That probably requires fuel, but fuel in and of itself can never be the goal because otherwise you just keep driving all over the place. Drive, drive, drive, drive. There's no reason for fuel other than getting you to the destination. You got to figure out what the destination is. You got to figure what the destination is and then not be disillusioned by the other thousand ways, other routes to get to that same goal, that same place. If your goal is to become financially independent, own five real estate properties and be able to cash flow $3,000 a month passively and have $500,000 in stocks and whatever it is, whatever that goal that you're. There's a thousand ways to get there. You could start a laundromat, you could start a restaurant, you could start a roofing company, you could start a pressure washing company. There's a hundred ways to get there. And so people get disillusioned cause they start questioning their route. And then secondarily they do not have a very clear definition and destination of what success looks like for them. And that might mean taking a pad of paper and for two hours locking yourself in a room or going out and sitting next to a nice view. For me, I like views of the ocean. I like seeing far away. Helps me a lot in terms of just clarity of thought and thinking in the future is like, I like to see far away, right? You guys notice that the run that I do on Saturdays, I can literally see hundreds of miles in the away. Somehow this is like unlock something in my brain to be like thinking of the future and think about what's going to happen and my goals and my dreams. Because it's far. I have to look far away. My I will never spend millions of dollars in house, but if I did, I have a little tiny, very modern house, but overlooking a vast 180 degrees of mountains and ocean. And I would just be able to see forever. Like I just be able to see a long, long ways away. And so get in a spot like that and just start to define those two things. Number one, where am I going? What's the destination? Very clear. Why am I getting all this fuel? Why do I need to make money? And secondarily be very committed to the path that you're on. Because every single time you reset your path, you're going back to zero. If you're trying to go from Mexico to Canada every single time, like, oh, I'm going to switch businesses, okay, you're starting back at zero. You're starting back at the beginning of the roadmap. Just stick to one for five, ten years. You will get there and there's gonna be times where you're. You have lots of fuel, you have plenty of cash. That's why you feel better. You feel like it's more attainable to get to the goal. There'll be other times. You're running out of gas, you're running down with a jerry can. You're going down to the. The gas can, the gas. They should try to get some more fuel. That's going to happen. That's that that scenario is like getting a little loan that is, you know, running up some money on your credit card. Like Andy Burleson was talking to Facebook group, literally running your. Your credit card inside a credit card processing so that you can get the cash out for payroll. That happens. So cool question. Let's jump back into. I think there's one more that just came in right now.

I haven't seen this one. Let's see here, Ken. How far is too far to get a piece of equipment or truck? For instance, would it be better pay more for something that's closer? Really just comes down to how much you're saving, right? So like back in the day prior to Covid, we would go up to Canada for all of our trucks, but I would be saving four to six thousand dollars every single time. So it was worth the half day for me to go up there, go into the do A import documents and stuff like that. It was worth half a day for four to six grand. If you're saving 500 and it's going to take you half a day to drive there and all the rest of it, probably not worth it. It just simply comes down to how much are you saving?

All right, last question coming in here. How did you have $90,000 cash to buy your first real estate deal at 18 and 19 years old? It seems you've used real estate to build your businesses even faster. How far along? Let me just stop here and say this. Real estate is literally like a reserve for fuel. If we just took what we just talked about that whole conversation, Fuel being the money that you need to get to the goals you have. Having real estate is literally like having a 500 gallon tank or you can, you know, get it smaller or bigger however you want. Like I started like, okay, if you get one, if you have like one property, one rental property, it's like having a jerry can in the back of your car. If you run out of gas, you got something to fall back on. As you grow your real estate portfolio, it's literally like having a 500 gallon tank of fuel on the back of your truck. When you get low, you have something to tap into. When the cat. When the business runs out of cash, you have something to fall back on. Right? Like worse comes worse, you know, push comes the shove with this whole headquarters thing. I could sell my real estate. I don't want to do that. It'd be a massive taxable event. I have a whole bunch of equity in it, but I could sell my real estate if I wanted to and pay for the whole headquarters. So having that to fall back on is always like break glass. Worst case scenario, you never want to sell real estate in my opinion.

But.

It is that tank, that fuel tank on the back of your engine, as it were. How far along a business should you wait to get into real estate? Is it a good idea to get into real estate game sooner with an FHA or wait a few years until there's a lot of excess cash that can't be invested in the business? I really believe that an FHA loan with, you know, three and a half percent down.

And then house hacking it so it can become profitable and generate cash flow. For example, if I have to put three and a half percent down, let's assume that you actually go get your real estate license. You spend the next few months, really educate yourself, listen to podcasts, all the rest of it, you go sit your real estate exam and you're gonna become an agent. You get two and a half percent back on every single deal that you self represent on. Okay, you're not talking about 1% down. Let's assume those 3 to 3 and a half percent down on the FHA loan. So if you're going to buy a $500,000 property, we're looking at $15,000, you need to get into the property.

And so that $15,000, if I can generate somehow $1500 a month in rental income by taking Airbnb on one of the rooms, by building an adu, buying a property that has a.

A living suite like a mother in law and renting that on Airbnb, literally making a couple grand a month immediately paying off the mortgage, buying a duplex where you rent out one side and the other side you live in, your mortgage is paid off. So it's all about getting creative in my mind. I'm not a huge fan of getting into a bunch of debt, especially the FHA. You're paying PMI property mortgage insurance, because if you're not putting down 20% or more on a mortgage, you're going to have to get Mortgage insurance. So you're paying more for that mortgage insurance for getting that FHA loan. And usually the first few years, that's what you're doing, or you wait until your appreciation goes up on that property to where 20% of the you can refinance it for the traditional mortgage and not pay pmi. But all of that to say I believe most people should get in sooner than they do because they start to realize the impact that it has on their business. I'm a huge proponent of getting the fha, for example, getting started. Get house hack it, get an Airbnb, rent out another one of the rooms, throw up a wall so that you can, you know, if you have two bedrooms, throw up a wall, make two units out of the thing. See, that's not really conventional. No, it's not. You're going to rent out the one side and make an extra two grand a month on Airbnb or rent out the other side for fifteen hundred dollars a month on rental income. Whatever it is, that's how you just house hack it. Right? So for me, the first property I literally had, like I threw all my money into this deal. The reason I did, I put 80, $90,000 in, knowing that I was gonna go get a construction loan for 350,000 and I was gonna immediately get back 20 or 30 grand because I only had to put 25 down, 25% of the prop, the construction value I had to put down on the property. I bought the property 90 grand knowing that it was a fixer upper and only cash deal. No one would finance it. I, as soon as I got that construction loan, I got back 20 or 30 grand to keep the business afloat and then built the house with the construction loan. Part of that construction loan was building an adu, an accessory dwelling unit. Why? So I could live up there upstairs, like 200 square feet, lived up there and then rented out the house, covered the mortgage and made a thousand dollars extra per month. Okay. So I believe people should get in it sooner than they think if they can get a creative deal just buying a house and paying a big mortgage on it. Not a huge fan of doing that when you have a business that you should be focused on. But if you can house hack it, if you can get it to the point where it's actually profitable, why not? You gotta live somewhere anyways and then just compounds. You build equity in that one property. You can take a home equity line of credit that goes, get your second deal. Okay. You only have to live in a property for one year for it to qualify as your primary residence. And in fact you only have to have the intent to live there for one year to get a home. To get a primary residence mortgage 30 year fixed, otherwise you're going to have to get a usually 10 year ARM adjustable rate mortgage for commercial property. Okay? So if you're like I'm going to buy a rental property, here's a little hint. Just tell the bank that you plan to live there, okay? You just have to sign something that says you plan to live there for a year. And guess what? If plans change, that's fine. Use a plan to live there for one year, okay? That allow you for the 30 year fixed versus a much higher interest rate adjustable rate mortgage. So cool. I think that was all of that question in terms of if you have 3, 4, $5,000, should be all in your business. I wouldn't even be thinking about even an FHA until you had 20,000. That'd be like the bare minimum in my opinion. Once you start getting about 50,000 to 100,000, that's when you start thinking about a conventional just regular loan. But again I, I want that cash back as soon as possible. So either I, but I gotta believe I'm gonna appreciate force appreciation by fixing up the property, getting the appreciation higher and I'm getting the cash back out. I do not want 25 in that bit that for a very long time because I want the property back up and then you pull the money back out. I don't want 25% of the value of that house being locked up in equity. Locked up equity is just like sitting cash. Why would I not take that out and go get another deal? As long as I can assume that I can get more money from it, why would I not move start another Augusta lawn care location? This location I'm sitting in right now was started on a heloc. Okay. I bought this location out for my brother. As most of you know, using a HELOC from a property. Why would I have $150,000 sitting in in equity in a house when I can pull it out and put it into an asset that's going to generate more cash flow, right? So it's just a building process. I started with that smaller property deal that was a tear down. I probably should have torn that down the thing for 80, 90 grand. And you know, now I'm not going to look at any Property less than $2 million down the road because it's not worth my time of just closing the deal. It takes the same amount of clothes, a 30 unit apartment complex compared to a duplex. So the return on time becomes more and more appealing. But you can get multiple.

Conventional loans and just say you're moving from one to the next. I would honestly the best way to get into real estate, if you have 40, $50,000 and you're not really ready to start a second location because you're still growing your others or you don't want to start a second location, you're starting to think about real estate is buy a piece of property, maybe fha if you're your first one or just a regular conventional loan and live there for a year and then move on to the next one. Get your next property, take the equity from your first one, roll it into the second one for the down payment. Appreciate it. Somehow I'm not going to buy just a random piece of land or a random piece of house and be like, I'm just going to buy a single family house and rent it out. You will barely make any cash flow. You actually usually lose money. Like the property that we just bought for here, local shop.

The mortgage is $3,000, the rent is like 3,200. By the time I take out some of the utilities and property management, I would be losing like two or three hundred dollars a month if I was just getting the house. But because I'm doing an Airbnb, because I'm putting the shop on that space, all of a sudden now the value of that property at 7 to $8,000 a month to me, that's what you've got to be focused on if you're looking at your first deal. How do I creatively make this property worth way more? Add an accessory dwelling unit, put up a wall so you can have a suite and rent it out on Airbnb.

Can you rent out one room to some person going to college? Whatever it is, this is the type of things that you can get into real estate and make it more affordable. But I'm simply looking at from a cash flow perspective and secondarily, how do I get my cash out of the deal once the down payment has been paid and the deal has been consummated. Awesome. Have a great Monday everyone. Have a great week. We'll time see you next.