The Power of Community and Mindset in Business with Jacob Davenport

Ultimately, in any business, but more specifically in real estate, you make money by solving problems. The house is in horrible shape, solve it, you get paid.

All right, we are back on the Owner Meeting Podcast. I'm Christian Osgood, your channel host, today joined by Jacob Davenport. Jacob is an awesome dude. I got to hang out with him a little bit last week, uh, on a phone call. I like this guy a lot. He has a ton of energy, great mindset for business, and I think that's the number one thing that you need if you're going to be taking action in anything, be it real estate, be business, you got to be able to just do the action steps, get motivated, and get around people. We're going to be talking about the power of community today. We're going to be talking about it, uh, and we're talking about a lot. But Jacob, welcome to the— welcome to the pod, man.

Thank you for having me, Christian. How you feeling, brother?

Dude, I am feeling good. We have power again, that's always nice. We got a cyclone in Seattle an hour after I landed, so I've been going one week with, uh, no phone, no internet, no nothing. So that's been wild.

Listen, let there be light. When you were telling me last week how you were going through the cyclone, it's different depending on where you live. Some people don't get exposed to those things. So when you told me on the phone, I was scared for me and for you, and I wasn't even there.

Dude, Seattle doesn't get exposed to those things. That's insane. Seattle doesn't get anything but the light rain all the time. It was unreal. Uh, that happened— we had a, we had a power outage for like a week when I was a kid. Um, so that would have been like 20, probably 20, 25 years ago. We had a power outage that lasted days. The next time was the one week I'm in town. You gotta be kidding me.

Look, when you're, when you're a kid, it might be fun because you're playing tents or whatever, but when you're an adult and you have kids, it's like, okay, listen, now I have to be a leader and I got to figure this out.

It's, it is wild. You know what's funny? We had, uh, so I, I, I brought in, uh, we never do a sub for Multifamily Strategy, my, my mentorship group. We never do substitute coaches. I am on every single meeting. I hired a sub to make sure that my, my, my guys were covered if I couldn't find internet, which I was unable to find internet. Turns out they got logged out and needed a code from me, but I had no power or internet. So we missed our first ever meeting ever in 4 years. Uh, huge bummer. But you know what? These things happen. If the worst thing that happens to us is a few days of no power in a storm, that is not a bad year.

Agreed, agreed, agreed. You're doing some big stuff, man. And I think that, again, just even how you lead and the things I continue to learn from you as I get to know you, I think of all your skill sets is, is you're in the game. And so to take it personal— for some people it's like one day, right? Clearly, look at the conviction. You take it personal because you're pouring into people. Right? And your standard— nobody could probably set a standard higher for you than you've already set for yourself.

Now, speaking of people in the game, today's pod's not about Christian Osgood or Seattle weather. It's about Jacob Davenport, the man, the myth, the legend. Jacob, for those who are unfamiliar with you, tell us, just give us the little background about what it is that you— what is it that you have done? What is it that you do? Uh, where are you at today? Give us a little, a little good backstory on Jacob.

Yeah, you know, Jacob Davenport. Uh, I do— I think one of the, the things that most people know me from is social media. I do a lot of content on social media, whether it be walkthroughs of my property, a ton of networking, making connections like a bridge, right? If somebody needs this, I, I introduce them to somebody else. Um, and authenticity. I do a lot of shopping at Lowe's because I do a lot of renovations, so I'm always giving quick tips like, hey, listen, if you need a washer and dryer, And money's tight, go to Lowe's, they have a discount aisle. And so that's really a day in the life. It's not acting. And I think that's where a lot of people I've been able to connect with, even outside of my city, in my neighborhood, in my circle, really on Facebook and Instagram and TikTok. I've been investing for about 7 years now. I'm in Northern California, so like the Sacramento and San Joaquin corridor, looking for off-market deals, distressed deals. If it has cockroaches or roaches or no roof at all, I'll take it. But that's been the basis of my, you know, my love and passion for real estate. And, you know, early on, and when I got into real estate and real estate investing, I had nobody give me guidance. So I find people like you, try to find ways to bring you value, and inadvertently I receive value, and I grew, and I understood more and more about real estate investing. And then, then it was, it was unlocked how sophisticated it can be, how you could really take this as far as you wanted to be. It's more than just 2x4s. So for the last 8 months, I've been running, running a community, utilizing the school platform to help individuals locally and some, some not so much local get their start in real estate. What are the fundamentals? How do you find a deal? What is a deal? How do you analyze a deal? You know, how do you understand cap rate? And so I've been taking those types of concepts that I've learned, employing them, putting them in my community. And the return on investment has been amazing because one, it challenges me to get to the next level, right? But also, I've been able to see some people lock up some deals and move some things that they couldn't do, probably if they didn't meet a person like yourself or somebody in the community that's like giving back. So in short, that's me. Great. So for me, I'm single family. I probably have about 7 doors in my portfolio right now, 2 multifamily deals, duplexes, and the rest single families. And then you just make some cool cash flow. And as I continue to grow, again, I'm doing a ton of flips on an annual basis myself as an individual, partnering with some people in my community and growing that portion. Because as you know, real estate costs money, right? And so I've been, I've been in a position where I've had multiple doors and then I've decreased it and kind of grown into realizing the quality of the doors. And again, I go back to sophistication because just because you have a whole lot of doors, you got a whole lot of headaches. And so, you know, even where I'm at, where I'm at today, as I flip property, acquire property, held property, now I'm moving my assets. I'd rather have a B-class neighborhood with a consistent tenant, no vacancies. And so that's where I'm at now. And loving it, loving it, loving it.

That's something that people don't, don't talk about enough. And you've said two things on here and this, this really resonates with me. Okay, if I got beat up property with cockroaches, no roof, yeah, I'll take it. Let's, let's do the project. The things that you're holding, you're upscaling, you're getting nicer stuff. The quality of asset does matter. The location matters. I've made a lot of money in Class F properties. I've taken some really rough properties and made them very, very nice. I also have found that the properties that I've held the longest and plan to hold forever are the newer, nicer, better-built properties. I, I'm a buy and hold guy. The properties I've sold, most of them were built in the '50s or earlier.

Right.

The roughest properties, you can still make a bunch of money on them. But I found the ones I hold and the ones that I enjoy running the most are the nicer properties in the nicer areas. And I think that's going to be a goal for everyone really should set is how do you continually upscale your portfolio to get the nicest, lowest maintenance properties that you can possibly hold? Um, if you're— if your goal is upscaling and, and having, you know, really holding on to those quality rentals, how many properties are you buying per year versus how many are you— how many flips are you doing in a year?

That's a good— that's a good question. Right now I'm probably doing about 15 to 20 flips a year.

Yep.

All right, so doing it pretty— doing a pretty good amount of flips per year, um, that, that I'm comfortable with, right? Um, and then As far as acquisition, that's a very good question because that's something I'm doing a business plan as we get to the end of 2024 right now. And so for me, it's not about so many doors, right? It's really not. It's what— where am I?

Unit count doesn't matter.

So yeah, it's, it's, am I, am I giving it a large downstroke, right? Is my— is there cash flow there, right? And the condition and the tenants. So I'm looking to acquire 2 a year at this point. 2 quality properties, large downstroke. California, as you know, is very, very different in which how the cost of property, right, it's very, very different. And so in short, to answer your question, I'm, I'm looking at about 2 a year, but I've also joined Gabe Bolling's community, who you know, Gabe.

And okay, very well, just, just on the podcast, gave a couple weeks ago.

Yeah, he's a great guy, man. That guy is awesome. That guy is awesome. That guy's awesome. So in short, I'm like, I'm transitioning into multifamily.

I, I think that's a wise move. And what you'll find is, and this is what I found for me, um, I only need to buy— because I, I'm not a flipper— I only need to buy 1 or 2 deals a year and I massively increase my income. I can be really picky with what I buy. I can take my time buying properties. I can take my time closing them. It only takes 2, 3 and the most deals I've ever done in a year is 6 deals. But you can add 100 units to your portfolio in 2 or 3 deals. And that has been— again, it's not unit count, but if you look at the size there, there is no way a single-family house can make more than my 44-unit building. It's just, it's not feasible. You get a good deal that's a larger deal, and all it means is that you, you know, add an extra zero to the end of the numbers there, which is, uh, on a positive deal, is quite positive.

You know, I'll add something important too for me. In my journey. Again, that's why it's all— for me, it's always masterminding, connecting with like-minded individuals. We all come from different backgrounds and perspectives and approaches, and you grow into real estate and you start spending time with people that you probably didn't know when you were a kid, and you have a lot more in common within your goals, right? And so for me, none of my family had ever owned real estate, but that's real— that's the story for a lot of people. The probably more challenging component is Before I got into real estate, my spring into real estate was, was kind of simple. But I had early on when I was 19, I got incarcerated for about 5 years. And during that 5 years, I was struggling with doubt about how I was going to overcome some of the challenges that I put myself in as a young man. So I start reading real estate books, but it seemed so far. Then after my incarceration and getting things together and committing myself to my community, That's where I start connecting with people that knew a lot about real estate. And the takeaway I always tell people is if you put in the work and if you learn and you network with the right individuals, there's no stop to the type of success, however you define your success in real estate. There's no lid to that. You can grow into it. And so I remind people all the time, for me, real estate saved my life.

Do you know what's crazy? I hear a lot of people, I mean like a heavy weighting of people who have come out of the prison system who then become very, very, very, very, very successful in real estate. It is, it is not an uncommon thing. And I have a theory about this. Most people do not have the time, don't ever take the time. They just don't think about where they want their life to be. They get in a rhythm. They go to school, they go home, they get their homework done, they go to sports, they fall into this pre-scripted system. And there's other people who've grown up differently who get caught up in other systems, and some of those systems are actually part of the reason that they end up in prison for whatever reason, right? Prison, you do have time to think. You are very specifically given time to think. And people come out of that who actually take the time to go, hey, you know, how did I get here? What do I want life to look like? They've been given the time to think. Some people come out of that system and become so unbelievably successful, and I think that is the key. Of course, you don't have to go to prison to have that time, but it feels like a lot of people do take that opportunity to reset, to plan, and to take the intentionality. How long was it you said you were incarcerated?

About 4 and a half years.

That's some time, right?

Yeah.

How pivotal, how pivotal in your journey was that time for you from where you were at before to where you've been after? How, what did you do in that time? Because a lot of people go into the prison system, come out, and then go right back in.

Recidivism.

What did you do in that time to go, I came out and now I'm seeing heightened levels of success times in multiple areas in business and community What did you do in that time that made a difference?

I got you. So you, you'll hear this cliché thing that I heard, that situations like that, of being a tough situation like that, can create this, uh, to teach you patience, right? And I didn't know what that, what that meant. But the biggest thing it did for me is when I, I, while I was there, I educated myself. I did some online learning, got a degree while I was in there. I just used to correspond 2 o'clock in the morning while the lights was off with a flashlight doing my homework, right?

Wow.

But when I go back to this term patience, which we all need, right? The patience for me was when I was released, I was willing to do whatever it took to get the long-term play. I didn't want the short thing and I didn't always have that discipline. So I said, when I get out, I'm going to figure out what it is I want to do, what I'm good at, and I will have that delayed gratification. And so upon my release, I was driving an hour and a half doing side work for a broker, fixing sprinklers, uh, turning keys, putting Metro Lock boxes on, and getting exposure. But I was not getting any money. But I— something told me, just hang in there, hang in there. And so I did. And so of all the things that worked in my favor, prison allowed me to take a mental discipline to say, be patient. And real estate is like that. A lot of times people will say that I want 100 doors, I want generational wealth. Well, it takes money to grow in real estate. It takes money, time, and other resources to build the right relationships, your credit, things of that nature. And so for me, my takeaway is being patient and having the mental strength to be able to hang in there. So that was my biggest takeaway.

And speaking of, real estate does not get rich quick. It does take patience, but it is amazing what you can do focused in 4 and a half years in real estate. I have a vast majority of my portfolio has been built in the last 3. It is amazing what a little bit of patience and a lot of focus can do in a relatively short period of time, specifically in real estate. What you can do in real estate is almost unlimited, which is absolutely amazing.

100%. 100%. You can, you can change not only your life. Look at you. All right. So look for you. And I know you're graceful. You don't like, you don't like to talk about you.. But even with your mentorship and your coaching and everything you're doing with people, whether there's a nominal fee or it's for free, that takes a lot of your time and a lot of your resources. And if you make $1, that's cool. But when you see people move their needle—

and when you—

when we connect and you reach out to me, we had a, a very good conversation, but it was very personal to me because what you did is you reminded me, you let me know, hey, you're important. Important, number one. But beyond being important, you can do it. I'm not doing it for you though, Jacob, but you can do it. And I won't be a gatekeeper. So if you want to do it, reach out to me. And so you can make a lot of money, you could buy a lot of homes, you could change your life, your family's life, and put your kids through private school. But you, you have the power, again, like yourself, to do things in real estate to change other people's lives completely.

And that's, that's some of the, the There's a certain amount, and I actually do think when you're starting your real estate adventure, I'm very, very, very, very, very big on giving back, both personally, religiously, and just in general, it feels good. But when you're starting, the first thing you really got to focus on, in my opinion, is grow to your, understand what you want your life to look like and build that amount of cash flow in your business or in your portfolio. It could be through long-term holds like I do. It could also be through active income like flipping or wholesaling. There, there, there's multiple ways to build the business to bring in the money relatively passive. And by passive, I mean you have a system that is repeatable, not that you put in no effort, but you can build that income stream. You should kind of like when a plane's crashing, you know, put on your mask before helping the person next to you.

Uh-huh.

Get your financial freedom, own your time. But then once you have some amount of time freedom, that's where you get to start giving back to other people and you get to really start building some of the community things, which is where Jacob, you, you really come in now, like, you, you've had success, you've done, you know, you've done many flips, you're building your portfolio, you've scaled your portfolio to have the assets that you want to have in it, you come up with a method where you're adding a few properties to the portfolio every year, you're in a great place. What is the significance of community after that? So you figured out what you want to do and you took the time to build your skills and your mindset Um, and you did in prison, which is super powerful. I mean, that's absolutely amazing, by the way.

Thank you.

You get out, you build the business that gives you the freedom, and some— you now you have some excess time to invest into others. What is, what is the power of doing that? What is, what does investing in others do for you? Actually, we ask that in two parts. What does it do for you personally, and what does it do for your business?

Is Yeah, you know, that's a really good question. I think a lot of times people dare— they'll challenge that you're doing it for other people. Uh, for me personally, you know, and really shout out to my mom, my mom was always big on community. She would help the neighbors, the neighbors would help us. So I thought everybody does that, right? For real, I thought everybody moved in that manner. So culturally, the way my mom raised me, it's always about trying to empower some people. If you get a Snickers bar, if I break it, Christian, you get to pick the the one you want. That's how it goes, right? 50/50. And so for me, it fulfills what I was taught as a kid, right? Um, but now, you know, on social media and, you know, speaking events and network with individuals, it can look like it's easy. It could look like I've attained some level of success. It could look like I've arrived to some people, right? Um, but far from it. A lot of times it doesn't tell the story before. And so like whether it was incarceration or anything of childhood and challenges that we all go through, nobody's exempt. For me, filling somebody's cup fills my cup. It does. And so I know in real estate, to go from no flip, no education, no information like I did, I had the mental discipline because of my experiences To go from nothing to something is very, very difficult. Most people, they, they never make it to the first flip. Yeah, but if you can go from nothing to one flip to two flips, that's where it gets fun. That's where your confidence comes in. That's where your fundamentals are there. That's where you go through the school of the hard knocks. And from there, it's just really, how far can I take this, right? And so I know that I've seen many people not make it to that first flip. Or understand how to analyze a deal. And so for me, it's very, very— it costs me nothing to pour into people and give them those fundamentals and take off.

So one thing, and I, I recently interviewed a wholesaler and asked the same questions for some of these active income things. I, I, and I've, I've flipped a condo, I've, I've left a duplex. It's not my main business, but it's just part of being in real estate. Sometimes you see an opportunity and you take it, and both have been, you know, 6 figures, one of them multi-6-figure flips where they did fantastic. It's not immensely hard, you know, to learn a market, to figure out what things sell for, to buy things, and to put together a budget. You're going to be wrong on your budget the first time you do it, but to find that first deal, it's not unbelievably difficult. However, A lot of people never do buy their first deal. The information's for free online. Like, you could find a ton of content. I mean, you can watch shows on flipping houses. They're all over, uh, HGTV. Granted, you don't want to renovate a house like that. 9 times out of 10, that's not a great way to make money. But I digress. There are— it's not an unbelievably high barrier to entry for people to get into, but many people never buy the first deal.

Why do you think that is? Confidence. 100% confidence. We fear the unknown, right? We fear the unknown. Um, I, I've yet to run into somebody that said they didn't want to have some type of real estate, right? Whether it's a large portfolio or primary house to leave their kid, they understand the power of it, right? But it's the confidence, because again, from going from zero education, no flips, no experience, to your first one, there is a curriculum that is very, very important. What is a deal? Where do you— do I need money? How much money do I need? How do I find a contractor? How do I know if the contractor is good? There's so many different components that are needed to be brought together and then produce this business structure, this plan to execute on a deal. And you tell yourself no. That mental intelligence, that mental strength we talked about that I kind of garnered over some time, uh, post-incarceration. Is that for me, even on my first flip, I was just a little too ignorant. I didn't think that I couldn't do it. I was like, oh sure, I'll buy it. I got a hammer, you know, I changed my brakes before when I was a kid. So I got into my first flip and, and I had some surprises. But here's the problem, because I didn't have the mentors or anything like that, but I had seen some people do it. The problem is my ignorance and my confidence and my mental intelligence of just being very, very persistent. I got into this deal and there was no turning back. Either you're going to fix this deal or you're not. Yeah, and you're going to make money or you're not. And then it worked, right? But when you go through it— and that's the thing about real estate scaling and flipping, honestly, I don't believe it ever gets easier. You get better at solving more problems. You get better at— look, if it blows up, you— before we hopped on today, I'm sure your phone blew up with some type of fire or headache.

Right?

But you get better at saying, oh listen, uh, 3 tenants moved out. Okay, what do we got to do? We have to find 3 more tenants.

Oh yeah, oh yeah. And the larger the business gets, the more, uh, CEO role is basically you are the one who puts out only the biggest fires. So basically you only deal with things that absolutely suck. Today was bookkeeping. Yeah, but there's, there's always something in the larger— the more you scale, the, the more problems you deal with. But yeah, that's a Very, very true. It's, you know, my phone rang with something because that's what happens when you're in business. It's, business is hard.

Yeah. And you, you know, you really get an appetite for these problems. And so I do see people scale multiple businesses and I say, well, he didn't know this. And, or Elon Musk, he does. How does he know this? How does he know this? How do you, well, you learn about, uh, you learn about delegating, you learn about talent, you learn about just a variety of things. You learn the power of education and networking. Elon Musk almost lost his business. He was able to call a few people and they funded it. Those are relationships. We talk about networking ultimately in any business, more, but more specifically in real estate, like buy and holds or flips or, or any creative type of strategy somebody will employ. You make money by solving problems. That's it. The house is in horrible shape, solve it, you'll get paid.

You said something that was really valuable. It's all about confidence. Yes. You take guys like, from what I perceive, your personality type, you seem like a generally, a generally confident person. Someone who— you have energy, you have intelligence, you have, you have self-drive, uh, and it's just part of your core DNA. You have guys like Elon Musk, insane risk tolerance, a ton of drive. There are a lot of people who don't have the same risk tolerance. The, the first thing, there are systems and process people. The, the number one thing, if you're like, oh, what if this goes wrong? Or what if you're that type of person, you want to get into real estate, you're trying to build your confidence, but you don't have that same inherent drive or motivation? What do you do as that personality type? Because it's not like you just can't succeed because you're like that, but it's a, it's a different hurdle to overcome. Like, just honestly, I, I'm hearing what you're saying and I'm like, man, that, that sounds like so many people, but I don't relate. There's been no point in my business career where I'm like, boy, the risk is really going to hold me back. And it has always been, there's something to do, other people are doing it, so of course it's possible, so of course I can do it. And that's about as much thought as I've ever given it. If you're not wired like that How would someone like that progress in the way that guys like you and me— I won't put Elon in the same camp as you and me, but guys of that personality type can.

Easy. It's, it's very, very, very easy because, you know, shout out to my mom again. All right, Miss Davenport, I, I'd have to say she taught me something that you do just naturally. See, real estate is very, very easy. Very scalable. You get past the first one or two, very easy. Finding deals is easy. People are very difficult, right? So I am difficult, you are difficult, we are difficult. Many, many times we have a problem being accountable. We have a problem saying, Christian, I'm sorry, right? Pride. What I'm saying is that me and you, um, if you were a janitor, you'd be a hell of a janitor. You'd have a janitorial company, Merry Maids or something like that. Because the way you build relationships with people, whenever you say you're going to do something, whenever you can't make it, you call people, say, I can't do it. So a large component of my— nothing I'm doing or know or, or will do is anything I made up. I saw Christian do it, I saw him do it, I saw her do it. And when I didn't know how to do it, either I embody what would Christian do if he did this, or I'll just call him. So having the relationship to be able to call Bring value, say thank you, stay connected. Don't let it just be one way. Christian, I need you, I need you, I need you. All you have to do is say, Christian, thank you, and then also say, hey Christian, can you help me with this? And if you don't, if you can't help me, Christian, do you know somebody that can? 100% sure there's an answer. So I see though, I can always tell, you know, network on social media, in person, I can always pretty much tell you when somebody that reached out to me saying they want to get involved in my community or grow in real estate, I can tell you if they're going to make it or not. And the ones that never make it are all about self, self, self, self, self, self, self. And it doesn't matter what you do for them, you, it's never going to be enough. It's what can you do for me today, Christian? So for me, I'm not calling myself a saint or any of those things. I'm saying that business is about people. And if you surround yourself with good people, if you bring value to people, they will fight you to help you win. Now, Christian Osgood, thank you. I don't need to— no, I want to help you. No, I don't need anything. Listen, let me help you. They will do that. And so I think that those— that confidence is a key component. But when you have 5 Christians behind you, I don't need confidence. Even when I'm not confident Christian, I need help.

I don't need confidence. No, you're absolutely right. And it's the ability to build teams and community and to, and to be able to inspire other people around your vision, uh, yeah, which by the way doesn't happen if you don't know where you're headed. People who are just kind of wandering, people need to rally behind a specific goal that is in some way significant when you arrive there.

So, agreed.

What I see a lot of people do is they build businesses and they go, okay, well, I'm going to hire these employees because they're going to work for money and they're going to, you know, if I pay them enough, they'll keep showing up to work. And what you get is you get a whole bunch of employees who show up for the money and then clock out. And that's their, that's their day. Leaders who have a vision for their company. Well, I mean, we'll take the extreme examples. We've already thrown Elon out there. Let's do it again. You know, we are going to figure out a way to launch rockets and then bring them back. And then we're going to figure out how to send them to Mars. Being a part of that is super freaking cool. We're going to revolutionize the car industry. That's super interesting. Oh, and it's really like the— I believe Tesla was originally designed to really focus more on the actual data aggregation than it was even the cars. Yeah, but the design of these companies it, it's exciting and you understand where you're headed. If you're just creating jobs and you're providing work, which I think is what a lot of people do ultimately in their small or mid-sized businesses, right? You get a bunch of people who want a paycheck who aren't on mission, where the— it does. But like you said, you get people in your corner, you get people who are supporting you going in the same direction towards a common goal, uh, you can do incredible things. The, the businesses that frustrate me the most are the solopreneur, where it's one person. And I, I know people who make over a million dollars a year, and they're just a— they're self-employed, they work really hard, they have a great business idea. If you want to scale past maybe the first million a year, it takes more people. It takes a larger team. It takes there, there's, there is a limit to what you can actually do, and you need to start adding people and systems and processes to be able to make it to the next level. And that's, that's really the power of community there. That's the power of getting— you're right, that solves the confidence problem. You're like, well, it's moving forward with or without me. There's an army of people pulling the same way.

You know, you made me think about, uh, Nick Saban. He was the coach over at Alabama. Oh yeah. And he said this, I'm gonna take it out of context, but he said you put high producers with high producers and low producers with low producers. No, fine, fine. If you mix high producers with low producers, right, you're gonna have a problem. The low producers are gonna say, man, they want too much out of me, they want to work too hard, they're crazy. And the high producer will call those people lazy, right? And so definitely this is for those that are, that are looking to just start real estate, really though, And they say, well, I don't know a ton of people. I don't know a lot of Christians. I don't know people that are doing big stuff, right? When you start with the people that you're exposed to, but you have clarity— there's a quote that says, um, clarity shows charity. So the clearer your vision, the more return you get on it, right? So if you start with the people wherever you live, you start with them, but you have a clear destination and you work hard on that, the people that aren't a fit, they they will fall off anyways because they're going to call you crazy.

You crazy.

You want to be successful? You crazy. You think you can have, uh, 100 doors? You're crazy. I don't want to be around you. They'll fall off. And when they fall off, that makes room for more people. And your crazy conversation will be the elevator pitch as you're meeting other people, where you're saying, yeah, I'm crazy. I'm looking at scaling 100 doors and I'm raising some capital right now. Oh, that's funny. I, I'm, I'm an angel investor. That's funny. I'm doing the same thing. And so have clarity, and if it's crazy, go for it. You will naturally scale and those people will fall off.

And when you're building a team, and I— there's occasionally get people who, who cling on, who, who aren't an A-player on a team. Yeah, I, I'll never forget this. I had an investor early on and we're going to a meeting, and this is with a broker who, who we were working with, and he wasn't that good at his job. He was really kind, but he wasn't very helpful. We're going in the meeting. I'm like, okay, this is kind of the B team. He's not, he's not the best broker at all time, but we really like him. And he immediately responded, I wouldn't know anything about that. I played select. I have all A players. And I was like, wow, well, while brutal, it does highlight a truth that you can't have a winning team. You can't, you cannot compete at an A level if you have a full team of, of well-intentioned B players. Yeah, and if you have C players on the team, you can run an okay business with, with, with people who are, who are decent people. But if you want to compete, if you're someone who wants to get competitive and really build your business, you do have to put some effort into surrounding yourself around the best people as often as possible. And that goal and that, that significance that you've shared with wherever your vision is your ability to attract those people— they're harder to attract. Everyone wants A-players on their team. So your ability, I think, as a, as a leader of company is to spend a majority of your time being as attractive as your company can be to the best people you can possibly bring onto your team. I've had, I've had so many— I go back to like high school science where you're in chemistry and they pair you in groups, and there's always that one jock that brings nothing to the group at all who tries to get partnered with all the nerds, and they don't do anything and they get the same A. I want those people off my team as aggressively as possible because they will hang around you as you start building teams. You're right, a lot of them will drop off, but you'll get a few cling-on people who you're like, what on earth do they add to the company? And having the discipline to actively remove them is the best thing for you. It's the best thing for your clients. And ultimately, it's the best thing for the person you removed because they might be able to thrive somewhere else or add something else to a team. But man, that has been one of the most brutal lessons in business for me is like when I realize this is never going to be an A player, they're great. I love this person, but they're never going to be an A.

Mm-hmm.

You got to get them off the team as fast as possible. And then it's not fun and it always sucks. And it has been one of the harder lessons I've learned in business where it's like, for the most part, you'll attract the people you need to attract, and then you have to come in and decisively edit through those people to make sure you have all the right people going towards the same mission. And for me, that, that's where companies went to, you know, like, hey, we're, we're approaching our first million, to, hey, we're, we're on our second, third, and fourth million this year. Is it was all done by editing. And when I talk to people who are in $10+ million a year businesses, $50+ million a year businesses, they're just better at those skills than I am. They've attracted more people and they've edited through those people to build a team that can actually compete at the level that they want to compete.

Yeah, you know, you had me not doubting, but really just looking at my business structure as a whole now. And so I guess my question to you is this then: This will help me. Do you, when making a business decision with talent, do you prefer to go with somebody that has a dog in them or somebody that's naturally talented?

I don't give a whole lot of value to natural talent. Natural talent doesn't make you an A-player. You can learn— a motivated person can learn virtually every skill. There's some people— no, I don't want to say there's no value in aptitude.

There is.

Um, I have great people who have no aptitudes at certain areas of the business, and so we've had to reposition them. But that actually highlights a great point. I would rather get the right people on the bus and shuffle the seats around to get that person in the right role than I would just have someone who's good in the seat that they're at, not useful anywhere else. If I'm going to put a team, I would take someone with the dog in them every day of the week, and I bet heavily on those people. And I've let go of people like that who just could not find their footing in my business. But I will continue to bet on people like that every time because that— you can't teach that. You can teach aptitude, you can teach skill, um, and you learn more about people as they go, but motivation is much harder to maintain. You can motivate an unmotivated person for a month or a few months, right? But to have a self-motivated person who can get and stay motivated and stay on vision, who's excited about where they're going and willing to put in the work, that's— to me, that's infinitely more valuable, and it's so much harder to find. I'll give an actual example. Um, my buddy Caleb Hommel, I mentioned him occasionally on this podcast. He's one of my earliest mentees. At 19 years old, he came in, joined my mentorship program, eventually bought his first, second, third, fourth, fifth, sixth deals. He has over 100 rentals today, or 100 units. Financially free. He built a couple companies that do insanely well. I have bet everything on him many, many times, and he has never disappointed me. We had a rough month in the company. I had never spent more in my— I've never spent more than $20,000 of ad spend. He had an idea. I emptied the coffers on his idea because he's like, I believe I can pull this off. I went from $20,000 to $82,000. That's been good. I absolutely believe that this guy is going to You believe this guy? I'm like, I will bet our entire company bank account at the time that he's going to pull it off. Not just because it was a good idea, because he was the one who was going to drive that idea. And I will say this, he made a lot more than $82,000 with his idea. And investing in him helped him later on. He grew his own company out of the ability to take people's ad spend and to really multiply it. He ended up becoming a titan of his own off that idea. I love investing in people like that. He had no sales experience at all. His first ever sales pitch for a property was— I said, hey, present off your relatability to owners. And so his first practice pitch was, hello, my name is Caleb. I am 18 and I would like to meet. So when I'm saying no sales skills, I mean, I didn't realize that zero was a level. I mean, he had no aptitude, no reason to believe he could do it, but he would just come to every single meeting with great questions. He would text me with any idea he had. He would push and push and push. And I'm like, I'm going to invest in that instead of someone who knows how to do what they're doing. And it's paid off massively for me. So for that reason, I'll invest in people like that all day. I know that's a long answer to a short question, but like, I'm more passionate about that than just about anything else you can ask.

Shout out to Caleb. Shout out. And that's that buy-in, the buy-in, the commitment, the commitment.

And just the— like, he had no reason to believe in himself other than he's like, other people have done this, and so of course I can do it, right? It— those type of people, I would, I would love to have an entire company of only that type of person. I realize I'm unlikely to find that in accounting or bookkeeping. Uh, you have a different personality type who tend to thrive there, but I try to stay around those types of people as aggressively as humanly possible.

You know, I notice in all the times I spoke with you, you, you, you never— it's not that you don't talk about money or finances, but in any of your decisions or your strategies, like even with the $80 grand that Caleb had an idea to spend, you guys agreed on, money was spent, but none of it really correlates to giving money a whole lot of value. So I believe you respect the dollar, right? But you're more focused on something else.

You live on— so, so the value that money has, you live on cash flow. It's the lifeblood of your business. Your business needs blood to live. I like my business, so we keep the business alive. That, that is one of the core objectives. To your point earlier, real estate isn't that hard. It's fairly simple. So the money piece can always be figured out. And, you know, cash crunches can be solved out of cash flow and cash flow can be solved out of, you know, there's a lot of different solutions to different money things. Money is not that interesting though. It's important. It's just not very interesting. People are interesting. And you mentioned this earlier. People are also hard. Probably why they're interesting. Money is simple and boring and it does what it does. People are super interesting, and it is so fun to see what you can create with other people.

I have—

yeah, being around high-energy, highly motivated people where you're pushing towards goals, it, it transcends the money thing really, like, really quickly. You do a little bit of math to make sure, hey, you know, again, do we have enough blood in the system to run this size business? Outside of that, it's just go do do cool things that are worth doing. That sounds so simple, but I think, man, that Elon is just kind of the star of this thing. He has great ideas and he does what it takes to get that. I don't ever get the— he's the richest person on Earth and I never got the vibe that money is the thing that is what is motivating to him. Doing interesting things that are important with people who are interesting to do them with, that is rewarding and that is fun. And there's a lot of ways to make money. If it's not fun, choose something else. I've just found being around that type of person— a buddy I just interviewed for the podcast, Brian Lubin, he runs a group called Action Academy. I had him at my house for a couple days. Being around guys like that where he's just huge vision for his company, very, very, very focused. Really, really interested in what is the next thing that we can roll out to provide just unbelievable value to our client base to help people take action. Those are the type of people I want to be around. Just people who understand how to get it done. And so yeah, I love those. That is what makes business fun.

That's your currency. You keep the main thing the main thing.

And if you run out of money, you could get together with those people who all know how to make things happen and then money, money, money can come back. Money— I, I've, I was homeless for a while. Um, I've had millions and millions of dollars. I've had $0. I've had multiple iterations of that even in my business career. The only thing that I know for sure about money is that we can make it back. It comes and it goes and you don't get to take it with you. So it's my only problem with money is it's not interesting. It's important. So no one, no one here that I'm flipping with money. I'm not. I'm, I'm very strategic with money. We put a lot of thought in how we use our dollars. But it, again, it's boring. Whenever anyone calls me, and you probably get this a lot, when you have someone who wants to learn from you, you reach out and you can hear it immediately. Well, what is your goal? Well, I don't— I would like to make more money. Why? Well, also I can be financially free. Okay, what are you going to do with that freedom? Well, you know, I just want to get there. It's like, if someone does that, I am almost 100% sure at that moment that they are not going to reach financial freedom because it's about money and it's boring. And when business gets hard, which it will, you're going to stop.

You're, you're on the money. You're on the money.

You're on the money. Money is a— they've done a ton of study. I've read tons and tons of studies on this, but Money is a horrible motivator. It's not that it's not motivating, but once you have it, you have it. And if you don't have a specific use for it, people just burn it again. It doesn't matter how much you pay someone. It doesn't matter how much they make. I think Mike Tyson, I think, blew through like $400 million. That's what I was just reading. Having money or making money doesn't actually do anything. What you do with it, the resources that you build and the relationships you build out of it, that is actually worth something. Guys like Jacob, or, you know, any of my companies, if we stopped doing this business or the money ran out or something happened economically outside of our control, we can build something else or we can build it back because we already have the connections and the people and the know-how to do that. Knowledge worth pursuing. Skills worth pursuing. People worth pursuing. Those all have value. Money is a— money is just a tool. That, that's all it is. Everyone else is actually, you know, again, the other things are interesting. The money is— yeah, it's— I'm no more interested in money than I am a hammer. I still need it to nail things, but it's not— that's what it is, is a tool to get things done.

Agreed, agreed, agreed. Do you mind if I ask you one other question, actually?

Go for it. But then it's my interview to you, so I'm gonna ask you the next question.

Okay. I haven't disagreed with anything you're saying, so I'm like, either he's reading my brain and just like—

I knew we're gonna have an easy pod because I've talked to you before and I already know we have a lot of alignment, so I knew this was gonna be easy. Totally agree.

Okay, what's your question? What, what, you know, when you think about running your businesses and, and, and leadership and, and, and, and achieving new things, moving the needle, Are there recurring things that, that can kind of keep you up at night regardless of how every business you go through or deals you close? So I guess let me be more specific. Personally, sometimes I deal with not understanding if how far we can take this and what is it going to take to take, take it there. So I'll grind, I'll achieve a short-term goal, and then once that goal is completed It's like I start empty again. That's why I know money, money's not the solution. I start empty again in the sense that, hey, I gotta create another goal to achieve. And I only find value when I'm getting my butt kicked through the growth. And so those are the things that keep me up at night. Is your, is your leadership process or organizing your businesses anything like that in that it keeps you up at night? Or what keeps you up at night at times?

What keeps me up at night? That's a good question. The things that keep me up at night is when we have a personnel issue. I mentioned earlier, it's like, man, sometimes you got to let someone go. It's— so I'll give you an example. I had someone in my, one of my businesses who had done very, very, very well for a long time in a lot of roles. And as the businesses evolved, they were like, they're really one of my core people. And as the business evolved, I noticed that they became less and less successful. And we hit a point where I was like, I knew I needed to let them go, but they were— I, I also knew they would take it very hard and that they were super instrumental in getting us to where we all were today. Um, so it was a weird, rare situation where the business just outgrew one of its members to a point where it's like, man, they went from being our biggest resource to one of our largest bottlenecks. That— those decisions keep me up because it actually comes at a cost to someone else. Like, that's— we have to have a discussion for the good of the larger group that is going to adversely affect one of the members, and there, there's not a solution and there's no value in delaying it. Those things keep me up. I, I have, I've fired a lot of people in my career, even as a sales manager. I've hired and fired a lot. To this day, I've still fired more people than I've hired. It keeps me up every time. I, I still hate doing it and I will never delegate it to anyone else in my company if I can avoid it. I've made people fire people who they've hired for their own good, but it's, I mean, that's more of a drill. Our core people, anyone in any leadership position, it is a call that I always make and I go through and I hate it every time and it keeps me up like crazy. I just cannot sleep the night before I have to let like a valued team member go, especially if they didn't do a bad job. It's like you're no longer the right person for— those are the most taxing things. When you said that, I immediately went to that. I remember the night staying up being like, I was supposed to let them go 2 days ago and I have not picked up the phone.

Yeah.

Success does feed. Oh man. And you know what? I can't sleep until it gets done. So it has to get done. When I know it's the right decision and it's a hard— it comes at a cost to someone else. Those are the hard— man, I hate those. I don't think I'll ever get over that. I hate that part of the business.

But it's ironic. It's ironic you said that because the question I asked was what keeps me up at night and pushing the needle. But then when you gave me the example, I completely— I'm so hypocritical with myself because when you said that, then I thought about that example I had, and that's far tougher than anything I've ever had to do. But I had to do it a few times and it's tough.

It's not fun. And different people have stuff. I know a lot of people— again, I'm grateful it's not money. A lot of people, that's the part that keeps them up. What if I invest this and it doesn't work? People get eaten up by the what-ifs. Yeah. Grateful to not be wired that way. I actually think that's been very helpful for business. Yeah. If you're someone who's like that, good news, you're like 99% of people. It does seem that most people really struggle with that piece. The nice thing with that, I always put those into a bucket. You have, I can control this, I can influence this, or I can do absolutely nothing about it. If I can't do anything about it, it immediately gets assigned to no stress because stress is unhelpful. And so just empirically, Not— it goes back into the not interesting bucket.

I stress, doesn't help.

Uh, if you can influence it, usually means, hey, I can make some calls, but I am waiting on someone else. I had this happen with, uh, with an accounting thing today. Um, reached out, paid family medical leave. I'm, you know, technically wrapping up paternity leave now, but to get things figured out, I need my payroll company to do something that I can't do. So I can influence it, But now that I've influenced it, I'm back in the bucket of I can't do anything about it. So stress is gone. You just do the thing. If it's something that's directly in your control, which is like most things— people stress about things that they can do something about— the answer is do the thing that you're stressing about, and now it's no longer stressful. And that is a much harder thing to do for most people.

Agree.

I think the, I think that the skill is identifying what bucket it goes into, because once you have the clarity I think a lot of people stress about something, but if you sit down and go, okay, it is stressful. What if I just do it? You tend to just rip off the Band-Aid and then it ends up being fine. And a friend— hasn't happened to me yet, but I had a friend who had a real estate deal that went sideways. It wasn't really his fault. It's just one of those things that happened. Deal went sideways. He took 3 months to call his investors to let them know that the ship was on fire. Absolutely wrong thing to do. And he took so long because he was scared and losing sleep over what would happen if they didn't react well. So he kept trying to fix a problem he knew he couldn't fix. It was outside of his control, outside of his influence, but he kept just trying to— he's like, maybe it will get better. And it didn't. When he reached out and called the investors and said, hey, this is what's been going on, all of them were fine and they figured out a solution, which was we all need to put in a little bit more money to finish the project and now we're done.

That was it.

Get over it. That was the whole thing. That's 99% of our problems. But that's where stress comes from, and it's usually things that you can either influence or control. If it's out of your control, that one's just like, once you, once you realize it's out of your control, like you, you accept stress does not help, you can usually get over your stress in a few hours. Like it dissipates and the adrenaline leaves your system and you're good to go.

Yeah, yeah.

I had a mentor who ended up being a terrible guy, but mentor told me that trick and I've applied it ever since. It's amazing.

I was just going to say, you can send me an invoice for this therapy session, man. I'm going to pay.

You know how I learned that? The only time I've ever in my life cried at work. I went to work and I was so stressed because we had a piece of software I was responsible for. I made the decision to bring on this very expensive piece of software. We launched it and nothing worked. And I did not have the skill to fix it. So I stayed up for 2 straight days, no sleep, trying to get the system to work. And I came in and had an absolute breakdown. And he was like, this is why we hire tech people. I'm like, but we've already blown so much money. And he's like, we can't do anything about that. We spent the money. I was like, okay. That is where I learned that the only time I've ever had a breakdown at work when it got too stressful for me, I had one guy who taught me how to do this and it has been, uh, It was therapy for me. And so if that is, if anyone needed to hear that thing, I learned that at 26 years old. And that is, that has carried me through a whole lot of business.

That's solid, man.

That's solid. It's magic. That is, that is one of the, there are no secrets to business, but if there was, that's one of the ones where it's like, if you internalize that little tidbit, it's gonna go really far. Okay, I have to teach my mentorship in 2 minutes, so we're gonna wrap. Real fast here. My question for you, what is the most— I love being able to learn from people's greatest things, also the mistakes they make. When we're new, we make mistakes. Uh, what's one thing people can avoid? What, what was the highest— we call it the stupid tax. What's the highest stupid tax that you paid while learning this business?

The stupid tax I paid was two. One was not connecting with the right people. Asking the right question.

Just ask.

That was one. And, and the second one is treating the business as a hustle instead of a business. And we have a lot of fun in this business. We do meet a lot of people, do a lot of really cool things, but this is not a game, and it should be respected from an educational standpoint, networking standpoint, growth standpoint, you name it. It's a serious business.. And if you take it serious and maturely, you'll go very far.

What cost did that create for you? What happened that caused you to really learn that lesson?

Treating it like a hustle had me in court. I got litigated in court improperly serving somebody with a 30-day notice and a few other things, right? But I was going to save some money instead of paying a company to do this. I'll pay the money and the tenant that cussed me out, I'm going to show him. Put that notice on the door. And even through all this, getting prepared for court, going back and forth, I sent him a screenshot of a bank account. I was like, man, shut up, man, I got $10 in my account, whatever their screenshot was. But it's not because I was trying to show that I had a dollar or two. I was trying to make him feel the way he made me feel. And when you take it serious and you take it as a business, we don't operate off feelings.

Now that's the, that's the lesson there. Don't operate out of emotion. That is, uh, there are some places in business where emotion has some value, but generally speaking, most, most decisions— this is why I always tell people to be kind, not nice. Nice, nice, nice kills you because it's usually from an emotional place where people can take advantage of you. Kindness is a— kindness is a commandment. And It really does grease the wheels of business. People do like to do business with people they like. They like kind people. But yeah, emotion, your personal emotions, you should have— if you're going to go into business, there's a lot of people who will take advantage of you. You need to have unbelievably high emotional intelligence to play that business game. If you can identify your thoughts and feelings and weigh and not let those control your actions, That is— you could, you can play the big league for that skill.

Golden. Totally agree. Totally agree. Hey Christian, I just want to tell you, man, much love to you. I appreciate you. I enjoy connecting every time. Yeah, I got you like a chiropractor. If there's anything I could ever do, give me a holler.

How do people find you online, by the way? We gotta— if someone wants to reach out to you after this pod, we got to get that in there. How do people connect with Jacob?

Yeah, I'm on IG, Facebook, TikTok, Real Estate Jake 100. I also have podcast myself, Jacob Davenport, called Growing in Real Estate. Send me a DM, uh, and let's get connected. I'm all about bringing value. Anything I can do to help you move forward within reason, I got your back.

There we go, the one and only Jacob Davenport. If you guys watched all the way through— this is a fun episode— and you guys watched all the way through and haven't liked and subscribed yet, do the thing. We're going to put the link to his IG here in the show notes, so click below if you want to message him, and we'll see you all on the next episode.