Mike Minutes Mastermind 01/01/2025

Happy New Year, Augusta Nation. Let's get this party started with the very first Mike minutes mastermind of 2025. Hope everyone had a fantastic New Year's Eve and ready to Crush it in 2025. Let's go ahead and kick it off. I think we got five questions already for today. Starting it off strong. Foreign. Let's go. First one up is from Mr. Anonymous. What is your favorite junk food?

Mercy. Like, if I had to, I'd probably have ice cream, but I don't have ice cream on Carnivore, baby. Let's go. Let me make sure my microphone's on. One second.

We're good. All right, next question is from Mr. Anonymous. Hey, Mike, in regards to your post on Home Service Millionaire about having a holding company and LLC for each rental property, what is the best state to do this in and how is it done? Do you need a mailing address in that city state? Is there tax advantages to doing this as well? Is there only. Is this only done for your real estate or for your lawn care and lawn land, lawn care and other businesses as well? What would be the best person to get advice from this topic? How would you use to set up your accountant, attorney? Yeah. So as a seven figure club meeting that we're going to do later this year, which. One second, let me make a note. I had an idea about that. Michael, don't drop that. Goodness. One second.

One second, one second. Had an idea about that. Okay, cool. At that meeting in the summer, we will be going over some of these things because I think it's only really relevant at that size. Once you start getting into stage seven, when you start investing outside of your business, whether it be through acquisitions, real estate, etc. So out of state stuff does seem to be pretty good. More for the real estate side. When it comes to your business, you usually need to be. You need to be incorporated in the, in the state that you're doing business. But usually with real estate, you can hide behind a random LLC name out in the middle of nowhere.

So I hide my name, hide under like random, random names for each property. Usually Wyoming's pretty good. Some people did Delaware, but yeah, Wyoming is one I use. And I'll talk more about this at the seven figure club thing. There's not really a whole lot of tax advantages. This is mostly a security and liability issue. If someone slips and falls and then they realize that you're, you know, have a business, business owner with a bunch of different entities, they will put every entity on a lawsuit and you have to Protect yourself and that'll cost you money. So if you can make it harder to find you because your name isn't on it, it's in a different state. In a state like Wyoming, that's very, very pro to the entity and the business, instead of the person randomly trying to sue you, then you are, you know, going to prevent that sort of lawsuit from happening. Now this is a one off issue. I don't think most people should do this. I would only do this if you had at least three or four different properties, each with multifamily and tenants inside of it.

Otherwise the cost of setting it up and everything is more expensive than if you have to defend yourself from a lawsuit once a year. I do get put on a ton of lawsuits because usually if an attorney sees that you're part of the franchise and you're on one, I will get put on it or all of my entities and I have to guard myself against every single one. And so yeah, trying to do that is helpful. But then like the franchise and like the my main LLCs, I employ people and have to be in my state. So there's only so much you can do. It's not really a tax advantage thing. Like yes, you can have an entity and pay yourself rent and you know, protect some of your income that way.

But from a tax perspective it's less advantageous. This is more of a asset protection liability type situation. Why do you have an LLC for each property and what is the advantage of this? Same thing. You're trying to create a corporate veil between each of them and have different LLCs that are completely different states with different names. Harder for them to find out that you own other properties. If they want to sue you, they'll just sue you and your property. So you always have property insurance or insurance for things like slipping and falling or someone just trying to be litigious and sue you because they tripped over their pot, they tripped over their stairs, and all of a sudden they're suing you for not having a handrail, for example.

So if I can protect the LLCs. Now again, you have to not pierce the corporate veil. So having different bank accounts for every single property is not fun. Having a different LLC for every single entity, not fun. It doesn't save you a lot of money. It's, it's asset protection. And so I don't Recommend this For 95, 99% of people probably until you have multiple properties, you have a lot of different moving parts in the businesses and you're willing to spend several thousand Dollars a year to just have the peace of mind knowing that if someone sues you at one entity, they can't sue other ones. Then you do this.

Like, I don't want my business affected because my tenant slipped and fall or backed into someone at the property. So Mr. Anonymous, would it make any sense to hire someone to knock on commercial properties to try and get our foot in the door to sell services? I don't believe so. Mostly because a lot of times the commercial properties that we're servicing are going to be handled by a property manager or a very small town landlord. They're not going to be where you walk in and you talk to the owner of the businesses. But most businesses do not own their real estate. If you're going to a chain like a commercial strip mall or an apartment complex, like the person on site doesn't make the decisions depending on the size of the apartment complex. Sometimes if they have an on staff, like on.

The property property manager, sometimes they could be a decision maker. So that could be useful maybe. But a lot of times even them, they'll have property managers or someone that's in charge of doing all the contracts, et cetera, outside of the leasing agent or the person that might be on site showing people properties and doing inspections and walkthroughs. So typically doing the door to door in this, you're just gonna get a bunch of people agitated. Cause business owners like if someone walks in here trying to sell us stuff like they do all the time at the office, it's super annoying. And I can't like I'm not gonna help you with the lawn care out here like or this anything. Like I'm a business owner, I lease here. So it'd be like talking to the tenants of.

You know, an office building. Like it's just, you're just not gonna usually get through, I think going to property managers. And because if you get one good property manager, you might get 10, 15 properties. That'd probably be the thing I would do and invest more in those relationships because you might only have 10, 15 contacts that you really could go in depth with. And that's with business to business or B2B. The advantage there is that you can spend more time and energy on each relationship because you have less of them. So you might only have 10, 20 of those type of property managers in your area. You develop a really good relationship with them. You walk into their offices, you make a big thing of cookies for their entire office, that sort of thing. You connect with them on LinkedIn. That is probably going to yield you more results.

Number two, would it make any sense to hire a commission only salesperson to help drum up business alongside running ads, door hangers, et cetera?

Yeah, like I would probably do door hangers if I was doing commission only for a salesperson.

I would be careful with making them control the actual pricing, like the actual selling of the job and more like a lead gen because it's lower, lower lift in terms of training. If they're actually going out and talking to the customer and creating pricing, that person's gonna be very much more skilled typically and knowledgeable. They need to have industry experience. Whereas if you have someone that just generating leads, like for example doing door hangers for simple services, much easier to get that person up and running. More likely that they're gonna be okay with a commission only job. That's actually the challenging part if you're having them do sales and actually go sell the job. Getting someone that has five years of experience can go and talk to customers, have a sales conversation, but also know the work itself. You're usually not going to get convinced them and doing a Commission only job.

Mr. Anonymous hypothetical question, but I'm looking to hear how you would approach this. What would, what would you do if this was you in this scenario and you had to make this work? No matter what, you are starting a longer business. However, you are physically incapable of doing the labor due to a medical issue. You have 5 to $15,000 cash to deploy on any strategy as well as you have a truck and equipment to perform the work already. Excuse me. Due to outside circumstances, you are only allowed to start a lawn care business, but are starting from zero. What would your steps to grow the business? In the beginning, how would you set up your crew to where you can manage your crew while still taking a paycheck from the business? In this scenario, you'd be okay to break even as long as you, your employees and your business bills are paid. Is there a way you could set up a business where it runs somewhat hands off to where you could still make money from it but not do any of the labor?

Okay, so you have the truck and equipment so you don't need physical assets. What I'd be trying to do here, you have very little cash to do this, so the chances of you pulling us are extremely low. It will hinge 100% on your ability to sell. And what I would probably do is I'd do cash collected up front so that way you do not have the cash to even do monthly billing. I would Be collecting cash for the upcoming month of mowing, for example, when I sell the job, it's the only way to make this work. Because otherwise you're going to burn more than $5,000 just in wages of an employee and their gas. And so an insurance, you can't have any negative cash flow. You need cash on hand for from day one. And then you don't also have money to spend on marketing. So the only way for, I would say that this could work is you do door hangers literally every day, eight hours a day, driving in four or five new leads a day, selling two or three new jobs a day. And every single one of those, when you're selling them, you're collecting the next month of revenue on site. That's the way I would do this. Now, if you have the kahunas to knock on doors for eight hours a day, collect money for services have not been offered yet or not been rendered yet, and you can pull that off, then you can make this happen. Most people cannot do that. Like, honestly, that is very difficult. If you're willing to be able to do that though, yes, this could work because.

You need a system in this regard that the more customers you sell, the more cash you have. And the only way to do that is to collect the money up front and then be able to use that money to pay for the upcoming wages and cost of doing business.

So I think that's the only way that this would work. And if you did this for like three months and every day, you could sell two or three jobs, you'd fill up a rep out, you'd have a couple crews and you'd be in a good spot. You could probably start taking a paycheck, but the likelihood of people doing this is far less than you think. Having that low of cash requires cash being collected up front. It requires you doing all of the lead gen and not having any customer acquisition cost because you basically have your cost of goods sold you need to cover. If you're just. If you're covering all of the marketing, you're generating all the leads yourself by just pounding on pavement. So that's what I would be doing in that scenario.

All right, everyone, I hope you have a fantastic New Year's Day. Lee and I recorded the. The pod, the C suite unfiltered today, so I don't know if that's coming out today or tomorrow, but that'll be cool. MBA for entrepreneurs went out free. So if you're looking for some content around finance, marketing, banking, some of this real estate and tax stuff we've been talking about. Go check that out if it's a little slower. Time to get that sort of information in. I know people are starting to take down Christmas lights. Very cool. Thank you to everyone that's posted on the Facebook post about kind of talking about winter services and Christmas lights for this past season. Super helpful. I'm gonna use some of those screen grabs for training and for the upcoming conference. So all of that to say I love you all. Hope you have a fantastic New Year's Day and we will see you tomorrow. Take.