Time is greater than money - Real Estate Rule #24

Hello YouTube, it's Christian. I'm here with Cody again and we are in San Diego for BPCon this week. So we'll be shooting everything from various locations through San Diego. I know we're heading up to Disneyland later in the week because time is greater than money and sometimes you have to take a little break and enjoy your time.

Yeah, this is our rule number 24 and most people seem to forget this, especially in the beginning. And this became apparent for me when I was driving over to Quincy every single week for little plumbing issues. Stuff would go wrong. I got a 1954 12-plex. That was my very first building, and before I really got that on lockdown, there's a lot of stuff that wasn't quite going super well. And my old mentor at the time was like, Cody, you're not a plumber, you're a real estate guy. So hire it out and go earn some new money. And that is where this really came from, even before I met Christian. But everyone in the beginning, there's a point where it flip-flops and you're more focused on just saving your money instead of saving your time. And you can actually buy your time back when you start producing income and you start doing only things that produce income.

Now, if you're one of the people who are trying to get into real estate to make money— and I hear this a lot— you're like, what is your goal? Well, I just, I love money, I want to make more money. Not helpful. The money has to be for something. Uh, there's a lot of different goals that you can have. A lot of people who have solid goals, have family goals. Cody wanted to retire his mother. I wanted to retire my wife. I have people who want to provide for family members, parents, kids. But the goal is always to buy back time. Now, when you're starting, it does actually take some money for real estate. It doesn't have to be your money, but if you're raising private capital, you do actually have to make sure that you make money and focus on the money.

Things cost money.

Yes, you will get to a point, and for us it didn't take all that long, um, a year of partnership, Cody's been investing for 3 years, I've been investing for 2. You start investing, you get in the game, the cash flow gets enough to cover your immediate expenses, you hit your first goal, and now the focus is how do you actually buy back your time? And that looks like hiring the plumber, that looks like getting great property management, that looks like getting more teams for your various projects. Great example Talk about practical application. Robin Hood Village Resort, we signed for that on Friday. There's a lot of people that help run that. If we just came in and cleaned every single cabin ourselves on a—

we'd be busy. Yeah, we'd be saving money, but our time would just be out the window. And instead of trying to do that, we want to have the right teams in place so that we can keep scaling, get into that next level, and keep our time in our life. 'Cause we don't wanna give up everything for money. That's a very bad trade. And most people end up doing that.

That's actually something that the previous owner of the Robinhood, or I guess current owner, transfers next week, but there's something that he taught us, a method that he has for that campus. They call it the 95/12, where they actually put a schedule in place specifically to protect their time and all their staff's time. Cody, you run that program now. Talk to us a little bit about what that 95/12 looked like and how that saved time on that project.

Yeah, well, the goal is when you map this thing out— and I did this on a previous episode for Robinhood Recaps— however, you want to get 95% of your critical tasks done in 12 hours a week or less. And so the way that it got quantified at the resort was everyone's phones are down, you don't check your phone, and you just have 4 hours, 3 days a week Multiply that out, that's 12 hours. So you have 12 hours to get everything done. So they get cabin turns done, they get the improvements done, because it's one thing to just get the cabins redone. You have to make the repairs and then you have to rebuild bigger and better than it was before. And so they've mapped out the system to where you can get all of that done in just 12 hours a week. And the reason is projects will fill the time allotted. And if you just give it a whole bunch of time, they'll fill that amount of time. And if you just set it at 12 hours, now you have the rest of your week back. So if you do that with the business thing, you can get a whole bunch more done and just let your projects fill the time you've allotted for it. You finish early, move on to the next thing, and then the other days you take it off.

Something that I get asked a lot is like, how do you guys manage your schedule? Because we just appeared out of nowhere. We're just all of a sudden, we're all over the internet and we run a property management company.

Or we're trying to be anyway.

Yeah, well, your, uh, your BiggerPockets episode, I think you're about, what, 900? A little more, yeah. Thousand views. Not bad. Yeah, either way, we're shooting videos 5 days a week. We're trying to teach as much as we can. We run our education, uh, program, which is our online course, the Multifamily Strategy, below. As well as our mentorship groups. We have our property management company, all the real estate. We're buying the resort. Did I miss anything major in there?

No, you're a husband, but yeah, I'm—

oh yeah, then we actually have like a general life outside of, uh, outside real estate. So how do we actually manage that? It's very similar to that 95/12. You just need to allocate the time that you have on each project. You don't violate that. You put everything in silos of, hey, right now we're working on this.

And it's super easy to overlook that and just focus on the money. But the time piece is really what matters. There's some people online right now saying that they're never going to put money into a real estate deal. They're just going to do it if it's zero down. Well, that's what money's for. You invest the money and use the dividends to gain your time back and be able to make charitable donations. Like, cash flow is what makes or breaks an org. So if you're just sitting on cash and it's not flowing, well, Well, you're not gonna do as well as those who actually reinvest. You gotta keep some reserves, but you should be redeploying that capital so that you can get your time back. And if it's not just for your time, you can donate those buildings into charities and then that'll give time back to other people.

And that's how I started. I actually had a W-2 job, so I actually had some money. You didn't have any money. So if you're following this channel and you're like, oh, you can invest without money, you absolutely can. You use the pieces you have. Money by itself doesn't do a whole lot. Should you have some capital reserves? Absolutely. However, that's not a requirement to get started. We're actually going to share a little bit more about this tomorrow with Brandon and I. We just filmed a video on this with Capital Reserves. But if you are trying to save your way into a piece of real estate, awesome, great thing to do.

We have some friends that have done that.

Do it. If you don't have money, don't let that stop you though. Go buy real estate, take that cash flow, set it aside, and then go buy more real estate. Right now in real time, we built a lot of equity in our 38-plex. We bought a property for $2 million that needed a lot of love, and we gave it the lot of love that it needs. We're now pulling money out of that project to redeploy again. That is specifically what we want to do, is this is how we expand. That's our money. That's equity that we are pulling out of a property and putting into new deals. I don't need new partners when we get to write a check ourselves. And so you should be doing both.

Yeah, but in the beginning, you know, you got to spend a little bit of time Go build the relationships, because the relationship is worth more than the real estate, always will be. The story behind the relationship, the story behind the other person, the story behind you, the story behind the deal, it's all worth more than the real estate. And if you put your legwork in up front, especially— and I'm talking to those of you that don't have money right now— if you go do that, then you'll get more opportunities than those who are just trying to write a check. Because once you write the check, the money's gone. The value's gone. So if you know how to actually go out and build those relationships, that's with you till the day you die. And so you can use those and work with the people that you're connecting with to scale up and regain your time, because time is worth more than money.

Simple, applicable stuff. And this is how actually how we started our course, is you actually need to write out your goal. You need to know before you get started what is the money going to be for. For me, for me it was getting my time back with my wife, and now I have the freedom to do what I want, which just happens to be mostly business. I love real estate and I love business, but we get to do what we want more or less when we want because we set this goal. And that control of the time is what all the work and the money and the cash flow were for. Put it into a few different pieces. What is my actual target? What is important to me? Know why it's significant. You're going to write that out.

Yeah, what, what changes when you actually get there?

Because some people go, I want to have a Lamborghini, and it's like, cool, what changes when you get there? I have a Lamborghini. Probably not the goal that's going to get you through stuff when it gets hard in real estate. But you set a goal, you set a defined timeline on it, you hit that goal, you'll set new goals. But remember, once you own your time, don't get rid of all that because your time is limited. You can make as much money as possible while you're alive, but you don't get to live forever, so spend your time well. Time is more important than money.

Cool. Well, that's it for today's YouTube video. We're gonna be having fun at BPCon in San Diego. However, stay tuned for the next video and make sure to like, comment, and subscribe if you want to see more. Thanks.