The Bank Account Setup That Will Change Your Real Estate Business | David Richter

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If you're running a for-profit business, you need to be thinking about profitability. You should be making money because without it, you won't be able to grow, scale or have people on the team or give or travel or whatever you want to do with your business.
And so he's just like, here, here's a system. That's what I loved about Profit First.
It went a step further than all those other books and said, here's a system to actually do that. And that's what Justin was alluding to with the bank account set up a couple minutes ago.
It literally revolves around you being intentional with every dollar. What is up, everybody? What is up, my science of flipping fam? This is going to be a good one because if you are in real estate, if you're doing deals, if you're making money, but you still feel broke and we've all been there, including myself, then my guest, David Richter, is here to help you.
He is the author of Profit First for Real Estate Investors. He thinks like a CEO.
He helps us think like CEOs and CFOs. So David Richter, what has happened, brother? What's up, Justin? It's good to be on here.
Yeah, I'm excited to have you. I had you come speak to one of my smaller group, and people loved it.
And I said, it's about time you can come and join the podcast and make sure everyone in my world knows who you are, knows your book, reads your book, but starts acting like treating it like a real business and not just a hobby. Right.
Yeah. Big time.
So tell us a little bit about your story. Where did this come from? Like, how did you develop, you know, this idea concept of making sure you're running a business with Profiting First? Because obviously it seems pretty like a no-duh statement.
And as you know, and I know, it is anything but a no-duh statement. True.
It definitely came from pain. I was a part of a real estate company in my early 20s where I jumped right from college into real estate investing.
And with this company, they were doing about five wholesale deals a month when I first started there. So they were doing a pretty good amount of business outside of Chicago.
But then we grew it over the next four or five years to about 25 deals a month between wholesaling, flipping, turnkeys. We were doing rent options, like all, all this stuff.
And we were doing 25 deals a month, but spending 26 worth out the door. So it's like, who cares? Like they were doing 300 deals.
I remember we did a hundred deals in a hundred days once, like over a quarter, we wanted to do something cool like that, which was like, oh yeah, it's so cool to say. But then it's like our bank account is like, you know, cobwebs.
And it like, what the heck is going on here? So that's what opened my eyes because I was young. I was in my early to mid twenties at that time, but I was learning from that business.
I was like in a bunch of different seats. So I got like a crash course in just small business and the different roles and everything, which was awesome.
But then from there, I sat in what the finance seat was one of the last seats I sat in, which gave me some of the knowledge just to know what I'm looking at. How do I read a profit and loss? I remember asking, people are wondering, oh, I'm a business owner and I don't know this.
I remember asking, what's the N stand for in PNL? And the CPA is like, that's an and. I was like, oh, he's like, it's profit and loss.
I was like, oh, dang it. So yeah, that's how I started.
So yeah, I didn't have, I wasn't the sharpest tool in the shed when it came to money, um, in that business until I learned and sat down and figured out, how do you read the profit and loss, the balance sheet, everything that helped me tell the business story. So I hadn't known really the story up to that point.
And then I saw like, we're doing 25 deals a month, spending 26 worth. Like this story can't end well, like not the way that it's going.
Unfortunately, I wish I had a great ending to that story. I wish I did, but I don't.
That company kind of blew apart. People went their separate ways, did different things.
That forced me into other areas. I was going to other masterminds at that time.
And like everyone else was saying the same thing. So like, this was not just us.
It was an epidemic. And I wish I would have had a great, I wish I would have had profit first back then.
I think that story would have ended a little bit differently. I can go from there, but like, that's what got me kicked off even of knowing like, okay, it doesn't matter how many deals you do.
If you're not keeping any of the money at the end of the day. Well, like anyone, you had enough pain that you had to do something differently.

Yeah, big time.

And so from the pain came this amazing opportunity and amazing business that you now run.

But really, just like so many of us, the pain is what created the need to do a deep dive,

go down a rabbit hole, get understanding of finances and how to run a business,

manage a business by the numbers, be a real CFO, which by the way, you and I both know all these people out here, there's always the presidents. There's always the CEOs.
There's always the founders. No one necessarily, and I don't want to say nobody, but for the most part, many of the real estate investors that I'm aware of, they don't have a true CFO, right? And they don't know how to be a CFO.
And that is where the rubber meets the road, ladies and gentlemen, is when you make money and what you do with the money. So you're not just making money and feeling broke.
I'll tell you my story because the reason we resonate is when I was introduced to you years and years ago, I had a very similar example. We had a very high performing year, multiple seven figures.
And my personal paycheck was like a single digit percentage of that. And that's insane.
Right. And to be able to make that much money, build that team, do that much volume, lose a whole lot of hair doing it.
Right. And to be able to look and be like, dude dude i could have worked at pretty much any corporation

who made this kind of money without this much stress is a very real thing that us you know

professional uh you know full-time real estate investors go through and so let's talk a little bit about the nuts and bolts because i think first of all everyone needs to go get his book where do you want to send everybody to you know learn more about book, take a look at it? I know it's called Profit First for Real Estate Investors, but I know you put together a website. Yeah, I did.
So you can actually download the e-book or audio version at simplecfo.com forward slash JC, like Justin Colby here. So that's where you can go and download the book.
It also has like a little profit first cheat sheet. So if you like listen to this whole episode and you're like, what do I do first? I just point you there too.
So that way you can at least get started. So that's where simplecfo.com forward slash JC.
Simplecfo.com forward slash JC. So if you're hearing this and maybe you've done a couple of deals or maybe you're doing a couple of deals a month and you're like, I'm making some money here, but where the hell's my money? Then this is a very real episode, right? This is one you really want to make sure you're tuned into dialed into share with friends.
If you know, they're going through it. Right.
Um, so let's talk about the fundamentals here. Uh, because I think, you know, the people want to know, right.
What are the things that they should be doing? What are the roles that should be having, you know, what bank accounts should they be setting up? All those good things that you and I are both. Auto insurance can all seem the same until it comes time to use it.
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Plus, get delivery in as fast as 30 minutes. So let's dive in.
So I want to touch on what you said, too. If you're going to make money as an entrepreneur, you need to actually keep it as well.
They're two different skill sets. And it's like that's where I don't need you to become a like financial wizard or like a bookkeeper or CPA yourself or a CFO yourself.
But I will say knowing some of those fundamentals, like you were saying, Justin, like right here, I want to give you some of the fundamentals that you can know as a business owner without being this financial guru, wizard, you know, even bookkeeper, QBO, QuickBooks Online expert, or whatever. We're dealing with cash because everyone that's listening to this, you are dealing with cash on a daily basis, whether your personal life, your business, whatever it might be.
Money flows through your fingers. It's like, what do I do with those dollars? It comes in, it goes right out.
I'm making money. Where's it all going? You know, especially if you're flipping, you know, I hear that lots from flippers, like, man, I've got 14 deals on the docket.
And it's like, it's eating me alive. You know, it's like, I've heard all the stories.
So I want to help you with the just fundamentals of profit first, but good money management. Like it's just good business habits to have when money comes in, what do I do with it? And a lot of people just aren't teaching that.
So fundamentally, honestly, if you're listening to this and you've never heard of Profit First, you probably have in some form or version or other book. Have you read Rich Dad, Poor Dad? He says a million times, pay yourself first.
We're out, hit that book and the rest of his series. Then there's a bunch of other books that say the same concept, like the richest man in Babylon, a portion of all you have is yours to keep the seven habits of highly effective people says, put first things first.
Same thing. It's the same concept in profit first.
If you're running a for-profit business, you need to be thinking about profitability. You should be making money because without it, you won't be able to grow, scale, or have people on the team or give or travel or whatever you want to do with your business.
And so he's just like, here, here's a system. That's what I loved about Profit First that went a step further than all those other books and said, here's a system to actually do that.
And that's what Justin was alluding to with the bank account set up a couple minutes ago. It literally revolves around you being intentional with every dollar.

Whether you love Dave Ramsey or hate him, he's made the envelope system very popular in the

personal finance space of being intentional with every dollar. And literally, he's telling you,

take your dollars out of the bank and put them in envelopes and earmark them for certain things. But in business, you're not going to do that.
You're going to set up bank accounts. And because a lot of people, here's the wrong thing.
Here's what I see. A lot of people that, and just where we were and just where lots of people that I've worked with are, they have one big bank account, and that's the big black hole bank account we call it now.
It's like money goes in, money gets sucked out to the swirling vortex of doom, never to be seen again. And that's when you're asking yourself, where did my money go? And it's like, you have no clarity.
And that's where separating out the money into different bank accounts to know where your money is gives you clarity, which gives you control versus the chaos that's just ensuing in that bank account. And the specific bank accounts, if you're listening to this now, this might be a time to take out your paper and pen and write these down, because this is an actual action step you can take from this episode.
You can set up the fundamental accounts from Profit First. The first three are the golden trio of bank accounts.
I call them the golden trio because I'm a huge nerd. I love Harry Potter, Star Wars, all the big epic sagas.
They've got three main heroes, right? Luke Han, Leia, Harry, Ron, Hermione, making sure good wins along the way. And it's a fun story.
And then when you get to the end, good ultimately conquers over evil, right? Your business though is so much more important than those. And it can take a lesson from it too.
We need three main heroes in our business and and that's the golden trio. They help you keep

more of the money. I'm literally going to give you three bank accounts that will help you focus on the profitability of the business.
The first one is profit. The second one, yeah, shocker, right? Second one is the owner's comp, which I love just as much.
We'll talk about that in a second. Then the owner's tax account.
I love these three bank accounts because they all focus on you, the owner. The difference between all of them.
Profit is more of like, why did I start my business? And it's like the big want. Like, what do I really want from it? Do I want to take crazy trips? Do I want to give a lot of money away? Do I want to go and be a part of a mastermind that I've never been part of before? Like, do I want to jump in with Justin and get mentoring from him? It's like, these are the things of where you get to go out and do the fun things you want from life.
And I would do that on a quarterly basis, taking the money out of there. Owner's cop, here we go.
This is how we could have solved the 25 deals a month issue. This is how Justin and his business could have solved the 1% or whatever, like the single digit percentage, like making all those seven figures.

I see this over and over.

Having an account dedicated to the owner

to pay themselves consistently

by a percentage that you decide,

that the owner decides.

At first, if you're already in the trenches,

you might be like, well, I'm not paying myself

and I'm not profitable.

I would warn you right now, this is the exact time you need to start implementing something like this because you're not profitable. So let me just put that as a side.
The other bank account would be the owner's tax. If you, okay, when we're recording this, it's right in the thick of tax season and it's like, good God, do you have your taxes? Do you know them? Are they up to date? Are you going to pay an arm and a leg because you're only an active real estate investor? Well, if you are, this is where an owner's tax account is like a peace of mind account.
These are to save from the business. Like every deal you do, you slice a little bit off, put it into the tax bank account.
And then when tax time comes, you don't have to be like hair on fire. Oh, shoot, I got to do four flips right now just to cover this tax bill or like my first my first six-figure tax bill, what do I do? I actually talk about one of our friends from the groups who are a part of Jesse in the book where he got his first six-figure tax bill.
And he's like, it took him years to pay that off before he found profit first. And then it took him a year to get it out the door.
And it's like, that's a peace of mind account. So those are the first three, profit, owner's comp, owner's tax.
The other two, well, you already have one of them. You already have OPEX, the operational expenses.
That was your black hole bank account where all your money flows out. Well, now instead of it being chaos, it's only the outflow.
I do separate out income. That's the fifth one is income would be, you get your wires in and now you can see where's my money and how much did I bring in over the last month? That's more of like what you made.
So the income. Just for some clarity for people, right? The last one you spoke about, the fifth one, income.
This is all wires from title companies, wires from closing lawyers, true gross revenue for the company. That is the only thing that goes in that account.
And from there, you can start to disperse into the other four. Is that correct? Into the other ones.
There's a lot of people that I think when they hear OpEx, they think that's going to be your main bank account. Right.
It shouldn't be. There should just be your main bank account that is collecting all revenue.
Exactly. From there, you delineate or distribute, I guess, to the other four.
Yeah. And in the book too, if you ever get money in from a private lender or something, that's where I'd give another system for that.
If you're a real estate investor, I will say though, here's a bonus account. If you are a real estate investor, especially in the active flipping space or active side, if you're getting money from private lenders, we call it OPM, other people's money.
So if you take money from other people, I would highly recommend an account dedicated to their funds. And this is where people ask me, well, what if I have a bunch of lenders or what if I have like five projects going on at a time? It's literally just a holding bucket for all the rehab money for all your rehabs going on to see, do I have enough to finish all of them? Or do I need to tap into and like go dive into my system to see how much do I have left for each project? But it's more of just a holding bucket there to make sure you know, this is what I have in OPM to finish my projects.
The rest of the system is to make sure the business is healthy. And if you're like, good God, David, that was like five or six banky caps in that you just said.
Like, what do I do? Like, I can't do all of this. You know, I'm barely struggling to stay aflo afloat I would do one I would pick either profit or owner's cop pick one of those to start with start to keep more of the money because that's honestly if there was a magic secret sauce that's it and it's not a even though it's magic secret sauce it's doing that for a long time over a long period of time and it's like it's not sexy or exciting once you have it there for four years, but you know what's sexy and exciting, taking money out and doing something sexy and exciting, you know, like going out on that cruise or going to wherever you wanted to travel to or whatever you wanted to do.
That's where I would start with that. And if you're, if you are like, good God, my hair is on fire.
I can't even do this. I would start with 1%.
Start with 1% to one of those accounts, like one of those keep accounts, profit, owner's cap, and put the rest of it into OpEx and run the business. But every quarter, can we do a little bit better instead of 1%? How about two? Can you go to two? From two to three, three to five, five to 10.
We just want to build the money. If you were going to the gym, you're not going to go from lifting no weights to double your weight and bench press.
You're not going to do something crazy. You're going to start with where you are.
And that's where a good system like this is almost like a personal trainer coming in and saying, this is what you need to do in the system. And that's where just starting it.
Starting it is the habit. So there you go, Justin.
There's the the overview of profit first. I know we take a long.
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So death is a progression, right? So if you're not where I'm sitting and having six bank accounts or maybe even more, because I do have a lot of private lenders, then I get that. And David does too, right? And so then you have to decide, do I need all five? Well, you may not, right? You may not have any revenue coming in.
You may not have any flips or wholesales going now. You may be in the middle of trying to get them to go.
So again, the progression of where your business is at is always going to go. The thing that I think most people aren't aware of that I think you can help them with and just the understanding of the owner's tax bank account.
Yeah. I think a lot of people think just because they have an LLC and just because they might have an S corp that owns said LLC somewhere, somehow that money doesn't trickle down into their hands.
Um, and they use their corporate credit card for everything. They pay off the, they pay off the credit card with the money that hits the LLC.
And I think their mindset there is something I really want to touch on because many people I think do this and I know do this. And I was a victim of this in my younger entrepreneur life where I was like, oh, I made a hundred grand and I spent a hundred grand all through the LLC.
So Justin Colby doesn't get taxed. Well, ladies and gentlemen, that is not the case.
That is all going to trickle down into actual income into me, even though for me, owning it with an S corp does give me some tax savings because I own the waterfall owned by me. I will be taxed on all of that revenue.
Okay. That is the importance of having this bank account that is owner's tax account.
Now speak a little bit to that because some people might have different formats of how they own the company. They might have an LLC owned by a C corp or an S corp, or maybe they own it themselves.
Probably not very likely, but talk a lot about that one because I think there's a lot of people out there that just feel as if, oh dude, I don't pay my car payment. My company does.
Brother, you're going to pay tax on the income that pays your car payment. And I don't want you to forget that.
Yep, exactly. So yeah, even though I'm not personally a CPA or tax expert, so I just, there's that disclaimer.
And this is not financial advice. And this is not financial advice for you.
But this is where a lot of people have that mentality of like, okay, I'm just going to put everything on the card or I'm just gonna run everything through the business. And while there's a certain degree of like, yes, you should run as much as you can, it's also at the same time, like you want the LLC to protect you like an LLC is supposed to protect you or like a corporation is supposed to protect you where if you are just like commingling everything, that's like a separate issue, even maybe from what we're talking about.
It's like, don't commingle everything because then you pierce the corporate veil of yourself. Like that very famous, infamous statement, you know, in American, you know, our society here, it's like, I don't want you doing that.
Another thing is, that's why I like the profit first system, because usually we do percentage based transfers, meaning if you get $100,000 in, there's going to be a percentage that goes to profit, to owner's comp, to the owner's tax, and to the OPEX account. In the system, think of it like that.
If you have $100,000, and let's just say you had legitimate business expenses of $50,000, then you're only going to be taxed on the $50,000 that's left over. That's actual profit to the business.
But then you're actually taking the cash and putting it in the owner's tax account at 15% or whatever. And now you've got cash there sitting for the income that you'll be taxed on.
And if you think you're going to get around it, it usually will catch up to you. I just don't want it to catch up to you in the worst way possible, like someone doing an audit on you and then you've got to go back and pay penalties over the last few years or whatever it might be.
You want to be

ahead of this stuff versus behind. This is a horrible thing to catch up on for multiple reasons.

One, if you're playing catch up and clean up, that's usually way more expensive from bookkeepers,

CPAs, accountants, to get things caught up and where it, that's usually way more expensive from bookkeepers, CPAs, accountants, like to get things caught up and all, you know, where it is. But another thing is too, is like, if you're playing clean up, catch up, like if you haven't paid the actual taxes you're supposed to, they could come after you again for that, you know, down the road with the fees and everything.
So that's why it's super important to be like, even though you might feel like, yes, I've got my LLC, it's all set up, I'm running everything through it. If you don't have a C, also, if you don't have a CPA who knows what they're doing, like you could be in major trouble if you are just putting that all through from not just an orange jumpsuit perspective, but like I'm going to have to pay again through the nose, maybe even what I already paid, you know, just in, you know, and then that'll be all the fees and stuff.
So you just, that's why Justin, I don't expect them to become a financial guru or wizard, but I do expect them to number one, I want them to know and be able to, and be empowered to be good stewards of their money and be good money managers of like a dollar comes in and they feel like I know what to do with it. And I at least now know where it went.
Even if it's not stacked up, I know where it went. And like I can at least pinpoint it and now make different decisions.
The other thing is too, I want them to know there are people out here like me. Like even if you don't use simple CFO and myself, there's other people that have this mentality, this mindset.
They're not just your typical what you think of, maybe an elderly CPA sitting like Ebenezer Scrooge sitting at his like counting house, like in a dark corner, like just being there and not actually caring about you, you know, and the entrepreneur and then giving you good steps to follow of like, here's what you actually do. So yes, the owner's tax account, like I mentioned before, is like a peace of mind account.
It is there to make sure you have the money to pay the taxes, which you will, because even if you don't pay them today, because you're doing some squirrely things behind the scenes, it will catch up to you when you get the right people in place that are ultimately there to protect you and help you. I don't think the IRS is there to protect you and help you, but we have to follow.
We have to follow what their guidelines are. And that's where I also say too, then get into rentals, get into long-term eventually, like get into the passive side.
So that way you can legally literally get your taxes either to zero or I have multiple clients that like, they have so much depreciation and carry, they carry over losses for years because of what they're buying or the syndications or the big deals or even if they buy a portfolio for themselves. So if you want to legally do it, you're in the best industry and you already have the skill of acquiring properties.
If you're listening to Justin, you're learning that skill. You're pumping that muscle every time you listen to him.
So it's like that's where go out there and flex that a little bit because that's where the real tax savings can come into play. Yeah.
And there's no doubt. I was definitely in a head there because I believe real estate is the only vertical.
And that is my belief that you can make a whole lot of money. You can build a whole lot of wealth.
You'll never be able to pay taxes again or have to pay tax again if you do it right. And you're protecting your downside.
So what do I mean by that? I believe, and I know this to be true because I've had to do it. When times get tough, you have equity in these assets.
You can lean on that equity to protect your downside. And I've had to do the very same thing.
And so there's no other vertical I'm aware of. Now you can make a whole lot of money in crypto.
You can make a whole lot of money in stock and Forex training. I get that.
But where's all the other categories like not paying taxes? You're going to pay a lot of taxes with crypto. You're going to pay a lot of taxes with Forex and stock trading.
Like you're going to pay taxes. Where's the opportunity to accumulate wealth? Well, you're probably making all the money in those categories and then putting it into real estate, okay? And then where can you protect your downside? Where can you say, hey, either I need a $500,000 right now, by the way, tax-free, another benefit.
Right, huge. Because I need to do whatever it may be, potentially even pay your tax bill, potentially even pay your tax bill.
So what if you had 20 rentals, right? And I'll just say, Hey, you have a hundred thousand dollar tax bill and you lean those 20 rentals. You get a, you know, a HELOC and you borrow that money tax free to pay your tax bill and you pay it back over time.
There's no other, there's no other assets, right? So this is why I lean into everyone needs to be in real estate. Even if they're not a full-time real estate investor, even though they're not acquiring a rental a month and all these who gives a shit statistics of how successful you are, they have to be in real estate.
And if you're going to be in real estate, then you're going to want to read the book. You're going to want to treat it like a business, even if you're doing it part-time.
Let's lean in a little bit more to the book. Beyond just the bank accounts in and of themselves, what are some other...
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Excludes restaurants. The golden nuggets that you can leave here with this audience about the book.
Yeah. So another one is how to mess up profit first for real estate investing.
Sure. And the number one thing I say is just don't do anything from here.
Like just listen to it and be like, okay, that was good. I either read this or like, that was a good podcast, inspiring, but I don't do anything with, that's the worst way to mess it up.
The second one is you set up the bank accounts and then you don't do anything with them. That's where I give in the book and specific to my book, I give what's called target allocation percentages.
That's not the specific part, but the specific part is I give it for if you're selling the property or if you're buying it and holding it. For those bank accounts, depending on the size of your business, how much money should go where into those bank accounts from every, like we were saying before, it comes into income.
How much should I physically transfer to those other accounts? So it gives you a little roadmap in there. That's another big one, especially if you're in the real estate space, because a lot of people buy and hold, not just sell real estate.
So that's another big one to mess it up. The other way to mess it up is making it too complicated.
You go out there and you set up 15 bank accounts. It's like, wait a second, what are you going to do consistently? If it's one, I'd rather you do one and get it set up and start to get good habits and then have that progression where Justin is now down the road and has multiple bank accounts.
We have had people set it up and then I've had people set set it up where they set it all the system up. And then they come back to me in some other event like, oh, how's it going? Like, oh, I set up the accounts.
Did you do anything? No, like, I didn't really. And I'm like, oh, man, I don't do that to yourself.
Don't overcomplicate it. The other thing I would say is that really like derails people.
And this might not be well, this could be how to mess up profit first, but you get the wrong financial people around you that don't really have your best interest at heart. Whether it's a bookkeeper, like if you have a bookkeeper and you're in real estate and they don't know real estate investing, you could probably be looking at anywhere from $1,000 to $10,000 to $15,000 of cleanup down the road because they probably don't know how to enter everything in the real estate space.
I just had this happen to me, by the way. Oh, that sucks.
Incorrect bookkeeping. I've had my bookkeeper for years and he got me right.
My account was like, wait, what just happened? Like, did he, and they've worked together for years. So like, even when you have someone good, there's, there's still mistakes that happen.
Now reality. And I forget what it was.

I think it was four tax returns that they had to re go back.

Yeah.

I want to say cost me $2,500 per tax return. Okay.
I said $10,000 mistake. I guess who's not going to pay the bookkeeper.
Right. Exactly.
That's where it's like, you got to have those right people in place that are supporting the profit first mentality. I would say, too, of like they support that you want to set all this up and do it.
But then they also need to know real estate. Like that's the other big one.
If you have a CPA who doesn't know real estate and you're buying real estate, especially to hold it like good luck, like getting the actual tax benefits from the IRS, you know, because you have that CPA that's in place. And we don't you know, I'm more on the CFO side, which is more business and money management.
I even see this all the time where people have the bookkeeper CPA, which you need those people in your life, but if they're not real estate investing specific and that's the industry you're in, then that could end up costing you, like Justin said there. I could tell you story after story now of just people where they thought it was right or they didn't even know.
And honestly, a lot of times people don't care. Honestly, the real estate investor is just like, let me make money, let me do the deal, and I'll get to the books when I get to the books.
And then it bites them in the butt big time. And they come back and they're like, oh, shoot.
Maybe I should have been paying attention to this the whole time. Because it's not just a bill they get slapped with.
It's like, oh, I could have done a better business. I could have built something that actually served me versus the mess and chaos that I'm in right now.
So it's like hitting it from multiple angles. The thing that I would tell everyone is, first of all, go follow David, even the simplicity of just following him all over his social medias.
Simple CFOs, his company, profit first for real estate investors, but don't be someone who's listening to this or watching this and doesn't do anything. You can be that person, but then be aware that like you're having, you're going to have no results.
If you're even just getting started in real estate investing, this is likely one of the first books I would tell you to buy. Not because it's going to teach you how to get the deal.
It's going to teach you how to set it up as a business from the beginning, even if it's a part-time business, right? And that way, the financial mistakes that I definitely made in my first probably five years of business and basically just running all money in, all money out, I don't care, like do're gonna avoid that trap right like even the highlight i try to point out about the taxes personally you're not aware unless someone like myself or davis mentions to you like hey the money gross money that's coming into your llc trickles down to you at some point yeah and if you aren't set up the right way and you're not pulling out owner's taxes on every deal, on every dollar, even if you're pulling out 20%, which you're going to be taxed more than that. But even if you pull out 20% of those dollars, you're going to have a good headstart to make sure that the tax man is actually going to get paid.
Right. And again, David, you've worked with thousands of investors.
You've seen it all the time. They're built on sand.
Yes, indeed. And we see that a lot of people don't, like you said, they don't have that good foundation, which is why I'm so adamant.
And I love that you brought that up, that even if you're just doing your first deal, like you're in the middle of your first deal or you're about to set up your LLC, the EIN and all

the banks, you know, bank stuff. It's like set up this system.
Like be have good habits from deal

one versus, OK, I was eight hundred fifty deals into my real estate career before profit first

even entered my, you know, headspace. And I'm like, good grief.
If we would have had this from

deal one, that could have been eight hundred fifty deals where we had more profit and a system for it. And I'm like, please, for the love of God, if you are doing this now and getting into it, set it up from deal one.
If you're a thousand deals into it, don't let your next thousand deals be not as profitable as they could be because you didn't do something from this podcast. Let me tell you what he's saying without saying this.
Don't just make money to pay yourself 100% of it so you can go buy the car you want or the watch you want or take the vacation. Ideally, you will have that kind of money to do those.
That is our perfect world, right, David? But he's not saying this, but it is underlying on everything he is saying, is it takes time and you need runway, right? If you're doing a deal a month, you're going to be able to buy cars. You're going to be able to buy watches, take vacations because you're setting it up the right way.
You're counting for the dollars. But if you do one or two or three deals and maybe you make like 30, 40, 50 grand or more, and you're like, yeah, fuck it.
I'm going to go buy my car or I'm going to go, you know, to Vegas or I'm going to go whatever. Then you're just going to get in trouble later on down the road.
That's all we're saying, right? We're basically saying we are big brother. We are seniors in high school.
You are a freshman. There's a way to play this game.
So you are, you know, senior prom king at the end of this game, or you're the guy scared to go to prom your senior

year, right? You get to play the game however you want, but David and Justin are going to help you become prom king and be the best of the best, right? And I just, I want people to understand where we're coming from here is I've made these mistakes. David's made these mistakes.
This is why he wrote the book, Profit First for Real Estate Investors. What was that website again, David? SimpleCFO.com forward slash JC.

SimpleCFO.com forward slash JC.

He gives, I mean, there's a bunch of free giveaways

on the website, right?

Yeah, it's literally my book

and the Profit First Cheat Sheet.

So if you're like, here,

let me distill this down into one page

because I know I'm an entrepreneur.

Like, just give it to me.

The bottom line, what is it?

There you go.

You can go there and get that one page cheat sheet

and the book.

Done deal.

Well, brother, I appreciate you.

I'll see'm an entrepreneur. Like just give it to me at the bottom line.
What is it? There you go. You can go there and get that one page cheat sheet and the book.
Done deal. Well, brother, I appreciate you.
I know I'm going to have you featured in a lot more of my intensives and masterminds. If you're a part of my world, you're going to see a lot more, David, because this is a, this is a, um, it's like an epidemic, right? I mean, it really is just, I see it all the time.
People make money and they have no money. And so if you're sitting out there like, dude, this relates.
I relate. I don't like, what the hell did I do? I didn't buy the car, but I still don't have any money.
Like I didn't do it wrong, Justin. You're telling me don't go buy a car.
I didn't buy a car, but I still can't find the money. I get it.
David gets it. There's a way to handle this.
So make sure you follow David. Go to simplecfo.com forward slash JC.
Bro, I appreciate it. Let's keep spreading the word.
Let's keep getting you out there. Cause you're going to change a lot of lives.
Yeah. I appreciate that.
I appreciate you. Let me spread the word and thanks for having me.
All right, man. So you guys, if, by the way, if this was helpful and you think you might know one or two people who could be a better business owner, make sure you share it with those two people.
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