Mike Minutes Mastermind 10/03/2022

Hello, Augusta Nation. Good morning. Happy Monday. I'm actually pre recording this on Sunday just because Monday morning was gonna be crazy and I didn't want to skip the mastermind, so I just wanted to pre record it. So let me go ahead and go through. So there might be less questions today, but I did have a couple things I wanted to go over in terms of announcements and education. So announcement is basically that if you're gonna do complementary estimates, I highly recommend they do change the verbiage of the email. There's something I haven't really talked about before because we don't do a ton of complimentary estimates. We maybe do.

50 of them a year at the local shop and it'll be more select like hand selected for our recurring customers.

And so the reason I say that is because if you do a complimentary estimate and the person just gets an email that's very much promotional and has a lot of fluff and pictures and all the rest of it, they're not as likely to open it or even follow the link to the estimate simply due to the fact they don't think it's for them. They think you actually sent it to them incorrectly. And if. And it also comes more across more promotional. What I would recommend is changing that email to be much more a matter of like, hey, we noticed your property neat. Potentially could need bush trimming. Here's a go. We went ahead and put a quote for you together for bush trimming, especially if you mow at their property. Just being like, hey, we were at your property recently and thought maybe this would be a value to you and that you could potentially need some bush trimming done. So I went ahead and attached an estimate for you. What I'm thinking of doing this next weekend is putting up inside of Service, Autopilot and Zooper, a separate estimate email that you would be able to use for complementary estimates. And then that way too, if you wanted Command center to use that one specifically, you just have to tell them that. So I will work on that next weekend because as we go into winter I know people will start doing more of those. But your click through ratios, people who actually see the estimate, it'll be way less if it's very promotional and a banner and has all the regular verbiage in there. You know, here's the estimate you requested. Well, they're not even going to click on it because they didn't request the estimate. Right. But if it's very much very stripped down and more a matter of like, this is a personal email to you, to the, to them because you have intel on their property and you've been on their property as a recurring customer. That has a lot of value to it. Right. So let me work on that this coming weekend. This came as a result of one of our locations getting quite a bit of people responding back saying like, I didn't ask for this. You know, please take me off your email list. Like that's going to happen occasionally. We every single time we send out a couple people asking people to take off their email list for one click estimate emails. But it should not be where when you send out complimentary estimate, people like think it's a really bad thing. It should be more a matter of like, no, thanks, I appreciate it. Thanks for thinking of me. So you're going to need to change the verbiage in the email. So in order to just eliminate that from happening again, I will create a separate estimate template. It's separate than a regular email document. It has to be a separate completely estimated document altogether.

So I will work on that and give you all an update on that because I know this especially fall, winter season, fall cleanups, property cleanups and like that, that complimentary estimate can be used that to say if you're trying to send them out like the next week, just make sure you take the email and you strip it down of all the fluff and the pictures and you know, here's the quote that you requested. Like they didn't request the quote. You got to take that verbiage out. So.

I would simply just say while in your property in the past couple weeks, we realized that you potentially might need put the service, whatever service you're pitching in there and here's a link to it. Let us know if you have any questions. I'd do it more like that.

All right, let's do questions. And I did a little bit of education I want to share about today.

Share screen.

Okay, there's four that came in here. I keep getting emails that I assume are spam stating 50 of all searches come from Siri and Alexa. That's not true and I need to register my business on these platforms. Don't they use simple search where we already at the top? Or is this just really something we need to register on? Okay, I would bet my life on the fact that this stat is false to. First of all, it is 100 a spam. I get things like this every single day for everything from SEO to web design to our phone system to the type of email provider that I use, security VPN like all of your emails are now exposed. Like, this happens all the time. Fear is a great sales tactic. Fear and scarcity. Fear of missing out. Let's go, let's go ahead and search this. Actually, let's see here. What percent of. Here, I'll share my screen.

No, I can't yet because I don't have anything in the tab. What percent of web searches come from voice?

Do try that. It might not do that.

What percentage of done by voice?

It doesn't need that. It says that 41% of people have used it, but out of the actual number of searches, it's going to be way less.

Yeah, like here, only 25% of people use it at least once a month. Let's see here though.

I want a number of searches.

It says that 32%, 25% of people have used Google Assistant, Alexa, whatever. But it's the frequency. I would imagine someone uses it one time, like very infrequently.

What percentage of which come from. Let's just do a trial exit and then see if it changes.

Yeah, I'm just gonna guess. Okay, here we go. Google says that 20% of mobile inquiries are voice searches. So 20% of mobile. So I would assume that.

10 to 15% of all searches come from voice. So first of all, they lied. It's a good indicator that they're probably a spam trying to make you fear, be afraid. Whenever someone brings in fear or scarcity, you immediately should have all red flags going off that they're trying to sell you something. Not to say that they are lying to you. It should simply be that you are being sold to. It's not a bad thing to be sold to, but you should always know when you're being sold to and have eyes wide open as to when you're being sold on things. And so whenever someone brings in fear or scarcity, those are the first two signs that regardless if you're talking about like, you know, a kid throwing a temper tantrum and, and threatening to like do something stupid while you're in public, that that is a form of them trying to sell you on not doing something to them or reprimanding them or not correcting them because you're afraid they're going to act out. So fear is a great negotiation tactic. Scarcity, great negotiation tactic. It's okay to be sold. It's okay to have someone use this on you. It's not say that they're trying to sell. They're trying to be wrong or bad to you. It's just Simply they're selling you on something. So it is 100% spam.

And you do not need to register your name for these platforms. These platforms like Siri and Alexa are using Google to search and scrub the web. They are not using some other type of web browser or anything like that. So yeah.

Is there anything. Let's make sure. Yeah. Cool. Is there anything you would recommend on us doing on the weekends downtime to give us an edge in business or life? I would say do whatever you need to do to make sure that when Monday comes you're looking forward to work. And so for some people that means unplugging, like and not doing any work. For some people it means unplugging by like not looking at their phone a lot. For some people that means going on the lake. For some people it means going to church. For some people that means going with their family. For some people that means running a mountain. For some people, like, they're just, they're just so many different things and you got to find out whatever that is for you. And for other people it's like listening to audiobooks or watching videos about business. Like it just find out what it is for you and doesn't matter what I think or anyone else does, it's not going to necessarily work for you. 99% of the things that other people do to help them unplug and gain an edge is not going to be the thing that works for you. So don't listen to someone you admire like, oh, if it works for them, it'll work great for me. That's not how it works. Everyone's different. Just got to be self aware enough to realize what, what helps you. And ultimately you want to come back to Monday like ready for, ready for, to get some, get your hands dirty, ready for some blood. You know, like fighting.

Primal instincts inside of especially men. But anyone that's providing and as a leader to like go hunt, go bring in the, go bring home the bacon is not just an expression. It's a matter of like, that's a primal instinct in time, especially men, but providers of any sort and leaders of any sort to like go hunt and go kill. And so when you lose that desire on a Monday morning after a weekend away from the hunt, that is a scary thought. And that's going to happen to you some of the times sometimes, by the way, that's going to happen periodically where you do not want to get up. And mostly it's because you're afraid of the hunt, right? You're afraid of Especially when you're financially strapped, this will happen a lot to you. So don't be like, oh, I don't wake up Mondays excited for the hunt. Okay, that's fine. Because not every single day. That's just rewind. Since I'm on this track of primal day. Like, not every single day did someone want to get out of bed and go hunt deer or hunt elk or hunt bear. They didn't. They didn't want to do that. It was not fun. It's not fun to do that. But ultimately, what pulled them out of bed was the responsibility for their family and was the responsibility to that if they did not go hunt, that they were going to their family and they would die. The problem today and the reason that so many people find a lack of motivation is because now if you don't. If you. If you went bankrupt, you would have so many social programs, you would not go hungry. Like, you would be okay. And that. That is wonderful and fine and good and everyone does virtue signaling, because that makes us feel good by knowing that we have those programs. The bad side, the downside is now when you have nothing to get out of bed, when you don't want to, you don't. And because you don't need to, right? No longer do you need to go hunt and kill you, because if you don't, your family dies. Now if you don't, you'll just go on food stamps or you'll get some sort of government handout or someone else will help you. And I'm not saying those programs are bad or helping other people is bad or anything like that, but the desire and need to kill, hunt, and provide for family is an instinctual, primal thing that if you can sharpen to where on a Monday morning you're excited to jump out and go hunt, you like you crush it. And so whether it be.

You know, any aspect of your life where you have a need that you need to fulfill on a weekend to get back in the hunt is all on the table. Get it out of your system, recharge, reconnect with whatever you got to do. Your dark side, you know, physically, if you got to, like, go lift something very heavy, if you've got around, be around certain people. If you have to have a spiritual connection, do whatever you need to do. So that Monday, when you come back to the game, you're really. You're ready to hunt. And when you start losing that week after week after week after week, which will happen occasionally in your. In your career, it happens to me frequently. Like at least.

Once or twice a year, at least. I will not want to, obviously. Man, this is brutal. And most of the time, by the way, asterisks, most of the time is when financially you're tapped out or you just feel very, very much under the gun financially. Okay. It's like trying to have to go hunt, but you don't have any ammunition, you don't have any bow and arrow, you don't have anything. Like it's not really exciting to go hunting when you, you can't kill anything. And that can be how it feels sometimes financially.

But in terms of weekend. Yeah, do whatever you got to do and make sure you figure that out. And for some people, again, the game of business is what they love. And so they getting going away from that during the weekend. They can actually be very depressing. When you took the 300k out of the Bellingham shop last year, how did that affect the GM's profit sharing? I assume that the 300k was taken right out of the bottom line. I'm just thinking about next year. I will probably be taking a chunk of money out of the more location to put into the second location. What? What? Just wondering how that affects the gm. Yeah, so it doesn't affect the GM at all. Doesn't affect the profit and loss at all. Because remember, owner's distributions are considered a balance sheet activity. They are not considered a profit and loss activity. Right. So.

When you, when you take the money out, I don't know if command center doing your, your QuickBooks or not, but when, when you take the money out, whether you're telling command center or doing it yourself, just make sure you say owner's distributions or owner's equity, same thing. Because that's going to be on your balance sheet. It's going to be your profit and loss statement. So ultimately what happens is you have revenue, you have expenses, you have profit and you're inside. The expenses should be your salary, even if it's small because you're, you're not there a whole lot. So like the Bellingham shop, I think my salary, I want to say is $25,000 a year. I think 816, it could be less. 1600 times 12. What's that? Yeah, 24,000. Let's go. Is it 10? No, it's less than that. It's like 22. I don't know. It's like 20 to 25,000. I put that in the salary part because I have to from a tax perspective. Just be. To be. Keep that all clear. That's an expenses, then you have profit. That's why I give a percentage of to the employees, the manager, etc. Everything left over in the bank account is yours and you can take that as owner's distributions. But it will not change the profit and loss statement. It'll change the balance sheet.

Back to my question about the 300k you took out the Bellingham shop. Did you discuss taking that money out with your GMs or was it more of a I'm going to do this regardless of what you think mindset? I want to respect my GM's wishes, but at the same time is my business to take out money as I need. I know I will be. I will need to take money out of the business next year. So I'm just curious your thought process, the do's and don'ts. Yeah, it doesn't affect the GM at all if I take money out because they've already got their cut of the profits. Right.

So yeah, I don't think you even need to tell your tell your GM because you're going to show a profit loss statement which has no indication of owner distributions. It doesn't even show it. So I wouldn't mind telling my GMs. Obvious I tell everybody. So I wouldn't mind telling my GMs and they can see it in the bank account coming out. And ultimately if they have a problem with me making more money, I would just tell them, go start your own location. Like here's the roadmap, here's a 3F program, go for it. That's what I'd probably tell them if they had a real problem with me taking my other business. But there's nothing I need to consult with them. Like the only reason they potentially could have an issue with it is if I was taxing the business bank account too low.

So like if they didn't have two payrolls worth of revenue or two payrolls worth of like money in their account, they could definitely, probably come knock on my door and be like, hey, you're taking too much money out of the company. But I don't usually take money out of the company until it's substantially above that. So yeah, you really don't even have to talk about your GM if that's a big concern to you because they will never see it on the profit and loss and that's what you're showing them all the time. If they see the bank account, which my GMs do, then they'll see the money's leading and they'll see on the balance sheet. But again, they're getting a piece of the profits, not a piece of owner's equity. I can dive deeper into that if you want, but it just really comes down to the fact that it's not in the profit and loss statement. Owners distributions.

Okay, Education.

Was gonna talk about. Yeah. So sold first property last week. Let's go. Put on the market on Thursday, sold it on Friday night. Good stuff. 5% or $41,000 above asking price. Let's go. So after they're all sold, I will do a full breakdown and just kind of give you guys what I learned. Again, these education pieces are not so much about lawn care all the time, is more or less about my thoughts on the market and investing. And for most of you, for 95% of you, you shouldn't even really act on any of this stuff that I talk about. But I truly believe that because, like, what I'm taking advantage of now is the fact that for five and 10 years, I was listening to podcasts, educating myself, listening to books, bigger pockets, all this stuff about real estate. And over the past two years, if everything goes the way that I. I think I will, for the rest of the properties, we will pay for the headquarters with cash because of the real estate. And those deals all came about of me using my personal money, using the stock market, taking that money out the right time, putting it into the real estate market, letting that grow to the right point, and then selling. And it's literally going to be a $3.5 million operation that we will pay for in cash if we sell all the ones that we're going to be putting on the market. Right. So if we don't put one of them on the market, which is the bigger one, I will still probably get 1 1/2 million or 1.2 maybe of a loan for the headquarters. But this is like, I got to make this is. There's a comment the other day is so funny on my YouTube channel. You start to laugh at him eventually because, like, he was basically saying, like.

You'Re having to sell your assets shows how bad of a business owner you are that you have to sell all your assets in order to build this headquarters. And shows that the bank won't loan to you because they would just give. They would otherwise be giving you money. Like, you have no idea. So, like, the fact that we can't get an SBA loan is simply due to the fact that they want 80 occupancy. And I have four entities that have already disclosed them that are Going to be occupying the building. So trying to convince them that now all of a sudden after they told me that new rule, I'm going to switch it to 80 being the franchise is wrong, they would never let that fly. And the franchise can't sustain it by itself like 80%. If the occupancy was 80% it would need to burden, have 80% of the burden of the financial and it wouldn't be able to sustain a three, three and a half million dollar loan. So anyways, all of that to say selling the assets, like yeah, it kills me because they're all really good cash flowing properties. But ultimately, here's the numbers on the first deal. All right. We owned it for less than two years. I bought it for 617. Okay, $617,000. How I bought it was also very cool. Same thing was happening. I had to bid. I got bid way up an escalation clause in there. Got the deal by waiving my inspection. A whole bunch of stuff was wrapped up in that. I'll go into that really a lot deeper down the road.

Anyways, I bought it for 617 is a duplex. Big property, lots of square footage, something around 1800 square feet of living space plus a two car garage for duplexes is a lot. It's like three three and a half bedrooms and two and a half bath. Like it's their big, big ones.

Spent 50,000 on renovation and I'm not going to take into account the fact that I rented it for two years and made cash flow on it. Let's just take that to the side for a second. That's off the table. Okay.

Because that does pay your principal down. So my principal did shrink. So on the 617, I had to borrow 450. I believe it was 450. I got a loan for, you know, got 25% down. And so I'm selling it now.

For 841,000. That was the offer that was accepted. Inspection isn't here in a couple days, but after that it's basically cemented. Inspection is basically just for them to be able to get, you know, look at everything and make sure it's what they want. Here's the deal. Here's how it went down though. So someone came in the very. So we put it on the market on Thursday. By that afternoon we had a full, full price offer.799.

With a 5 day inspection and no other contingencies.

Great. But there's a whole bunch of other people interested. Friday comes along, get another offer. It's 825, but it has a contingency that the person needs to list and sell another property. No, no, no, no, bueno. Don't want that. You do not want that in this market because it could be just trailing you off for a month or two, and then now the property is worth 10% less. And then they try to renegotiate, but you have to kind of take it because the market's changed. So 825. So what we did is we went back to that first offer and said, hey, Somosis came in with another offer. Now you cannot disclose 825, that first offer, because if you do, you also have to disclose that it's based upon a contingency of another property listing. You have to. It's the law. If they ask. If they ask, I should say so. We could have risked it by saying, hey, someone else came with 825. What do you got? Give us your best shot. We could have said that to the first person because the second person came with 825. Instead, what we did, because we knew if they would have said, okay, great, it's 825. Is there any other contingencies if they would have said that? We would have had to say yes, based upon them listing and selling another property that immediately brings the value of that second offer way down. And the first offer would know that and stick to their guns. So what we did is that, hey, look, we got a second offer and we got another one coming in. We would recommend that you give your best and final offer because at 9:00 clock tonight, we're making a decision. And so third offer, I don't even know if the third coffer came in. We never even talked about it because it was irrelevant at this point because the first offer came back and said, oh, sorry, sorry, sorry, sorry, sorry. The second. Yeah, the third offer didn't matter. Give me a second. So the first offer comes back and says, okay, great, we will go ahead and do.

$830,000 with an escalation up to.

866,000. So what? An escalation clause is basically that if, if you can prove that there's another offer that has a higher amount than them, that they're, they're, they're asking price, their purchase price goes up by a certain amount. So their escalation was up to 866. Pending that, we have another offer and it went up in increments of 11,000. So you want that amount to be meaningful. No one's going to like, are going to think you're a novice in real estate if you do an escalation like a thousand dollars. Because basically what you're saying is like, hey, I'll just like, I just want to barely top whatever other offer you get. And so what you do is you make that pretty meaty, right? Because it needs to be. It needs to be. It kind of shows if you are an amateur in real estate, if you do a 500 or a thousand dollars escalation clause because they just, they, no one wants to play that game. They just want hard offers. That's the way you play the game. And so they came in, said, okay, we will do 830 with an escalation of $11,000 up to 866. So the third offer came in at 8:30 which means the person that, that had already given the offer has to do 11,000 more. 841. So you know, obviously it's not over till it's over. But you know, outside of the house caving in because of a leak in the roof or something in the inspection, I think it'll go through and it's, and it's cool when you have multiple offer like that. It also puts this kind of pressure on them. Like, hey, a lot of people want this deal. Which means even if there is something in the inspection or something they find or some sort of issue, they will make the deal happen because they know, okay, it's like this bias of like, okay, there's other people competing with me. And especially because they know that they were bid up by 40,000. They know that they, that okay, there's other people that are willing to buy this property. So if anything comes up, usually you'll close a lot more often. Just simply do the fact that, that there was more pressure on the sales process. So that was really interesting. See if it goes through. Three of our other properties went on the market on Friday. They already have people that are, have looked at them. And what we're doing for those ones is on Tuesday we're going to review all, all offers. And the reason we're doing that is because the first property that we sold last Thursday or last week, that one that we sold had a vacant unit. So it's really easy to have viewings because you put a lockbox, people come and look at it and you're good to go.

When you have tenants in all the properties like we do in these other three, it's hard to show them and it's hard to get offers as Quickly as we did that on that first property simply due to the fact that you have to set up showing times. So what we're going to do is allow people to see it over the next couple days and then on Tuesday review all offers. And so we'll see how that works. We put that one again at 700,000 and sorry, 725,000 for those duplexes. All three of those like 725. 725. 725. I expect those to go a little bit above asking price as well. We'll see how much movement we get on them. But that's kind of the. Let's see what we're thinking. So.

Those will go probably sometimes next week we'll close on those and then the big one, the 10 unit apartment complex will go on end of next week as well. And that's the one where if we sell it, we would just do cash on the rest of the headquarters. So yeah, that's, that's the exciting, exciting stuff. I can dive into that stuff more about escalation clauses or some of the negotiation stuff that we did. The big thing that's really funny is the. What we realized and the reason we kind of use that tactic between the first and second offer is the fact that we knew that the first offer, their agent did not like the person the second offers agent. So that person who was representing on the second offer, they were, did not get along with the first agent. And we knew that. So what we did is we kind of pinned them against each other by. Instead of, instead of using the 825 and trying to leverage that, we leveraged the name of the other agent and we knew that they'd be competitive against each other. And that's why that first offer came all the way back with 866 escalation and 11,000 like escalation up to 866. That's when someone has basically said I'm getting this deal. I do not care what happens when you go 66,000 above asking price. Oh, so funny. So the fact that you got 841, I was thrilled. Basically extra 40,000 above asking will pay for all my fees, all their agent fees, selling and listing agent, all my title stuff. So it'll be great. I paid 86617 put 50 into it. So just call it 680. And if we sell it for 840 minus all the fees and things that go into closing a deal, let's say it's 800, I should walk with 100 to $120,000 easily in profit from that deal. And again, plus the 25 down in terms of locked up equity that I had in the down payment. So let's just look at the actual appreciation though of 100. Let's just call it 100,000. Just to be conservative. $100,000 in, in profit. That would have taken me at least six to eight years to get that much profit in cash flow from a duplex because there's only two units. Right. So I'm just trying to. I'm basically accelerating all that money forward and then all these profits I can 1031 exchange into the headquarters, so I don't have to pay any taxes on it. So that's, that's a big benefit. So I think it's all I got. If that's helpful, let me know. I know for most of you this is not super helpful. The education side, in terms of now in your business, you should 100 be focusing on your business until you're. You literally have so much cash you can't stay up with it. And this happened in 2020. That's why I went so much into real estate. So much in the stock market, took the stocks, rolled it into the real estate and now it's like, okay, all of this was built for the businesses. I'm only passionate about the businesses. It's what I care about. And now I'm able to kind of execute against what we talked about. The reason we got into real estate, the reason I had to figure it out, and Liz helped me so much on all of this, on the property management side of things, is so that we could put the business in a good spot. And I didn't want to put the business under massive debt obligations in order to finance the headquarters. So that's all I got. Thanks everyone. Have a fantastic week and we'll see you tomorrow.