The Profit First system was revolutionary when introduced by Mike Michalowicz. In simple terms, Profit First allowed small business owners to take home bigger paychecks, reinvest in their business, and scale with ease, oftentimes while doing even less. The age-old adage of “do more work, make more money” was turned on its head by simple accounting practices. In reality, the business owners who were doing the most work were making the least, while business owners who truly knew their numbers worked less, made more, and had more money to invest.
After reading Profit First, David Richter knew that this same system could be applied to real estate investing. David grew a rental portfolio himself by learning from a local mentor. This mentor had a growing team, a scaling business, but was making less and less with every deal done. As David investigated more real estate investors’ businesses, he found that this wasn’t an isolated case. Most investors were making low wages, working far more than at the jobs they had quit, and had inflated businesses, to say the least.
With some simple accounting practices, which David describes in this episode, real estate investors can turn their business into Profit First powerhouses using very simple steps. If you’ve been feeling burnout from a barrage of deals, but aren’t seeing the profit you’ve worked so hard for, you’ll want to pick up David’s new book, Profit First for Real Estate Investing!
David Greene:
This is the BiggerPockets Podcast show 608.
David Richter:
If I have money, I don’t have to go after that next deal. I don’t have to say I’m not living deal to deal. So meaning if you jump from the W2 into real estate and you start feeling like I have to have that next deal, you start making decisions out of fear and not from your purpose. You can start saying, ooh, that’s a swim deal, but I think I could still make it work. I know that I can make this happen because I need that next deal.
David…