(00:00) You know like the IRS sends you these en anytime you get a thick envelope from the IRS that’s not good there is no good envelope from the IRS no about the same time I got a I got a call from an IRS agent and his last name was Friend by the way and a nice guy super nice guy but he says Joe you need to come into my office like today and uh I I go there and you go through like tons of security get into this room and uh nice guy but he he you know I don’t want to say anything bad all right anyway um he says

(00:33) Joe do you realize and I’m in there shaking trying not to C it’s like do you realize how close you are to jail I could send you to jail I could take away your house kick your wife and kids out on the street make you homeless take everything you own you’ve got to get this taken care of and fixed and I was like okay I need help [Music] welcome to another episode of Beyond a million today we’re speaking with Joe McCall a successful marketer and investor in the real estate space Joe made some mistakes with taxes and the

(01:19) IRS which almost sent him to jail so he’s got some great advice for anyone dealing with IRS issues which let’s face it is a lot of us you’ll learn real estate investing tactics that apply to seasoned and successful R preneurs and also for people that are looking to get started but don’t know where to begin plus Joe reveals some of his highle marketing strategies that have allowed him to sell over $15 million worth of real estate education courses online if you sell anything online whether it’s

(01:44) physical products a service or courses this episode is for you let’s dive in sweet Joe Mcall hey thanks for hanging out man yeah man glad to be here Brad I am always looking for an excuse to not sit in the room at a conference um and we found one yeah this is awesome Yep it took uh manipulating some things to find a space for record but uh but we did it yeah um so I want to we are at the family Mastermind in Tampa yeah which we’ve both been a part of for a long time yeah uh it is the honestly I think it’s not only the biggest but the

(02:23) most curated group of real estate information Educators on the planet yeah um a lot of software guys a lot of service guys it’s a it’s a great group it’s a great group and the real estate segment obviously Easy Pay Direct is super heavy in the real estate education segment but uh the marketing in the group is astounding yeah um it’s a very aggressive marketing focused um group of entrepreneurs and I want to talk to you about that because I know that it’s something that you lean into very

(02:56) heavily and are very good at um but before we do why don’t you give me a little background on Joe Mall yeah yeah man uh I well we’re Easy Pay Direct customers love the business love what you guys do been doing you’ve been doing this IND you’ve been one of the industry leaders for a long long time so it’s an honor to be here uh so I I got started in real estate in 200 uh six full-time in 2009 I was working as a civil engineer building power plants and uh got tired of the corporate job working in my cubic hell

(03:32) and uh started learning leas well I started doing a bunch of different kinds of deals but I was I call myself a professional student for three years because I just overanalyzed everything I made a lot of bad mistakes um but at least I was taking some action um but it wasn’t until my back was really against the wall the market crashed and uh all of these properties that I bought with stupid debt um I I had a lot of foreclosures and short sales and and my back was against the wall I was hemorrhaging cash and it wasn’t the Market’s fault it was

(04:03) this guy’s fault I made a lot I just made a lot of bad mistakes but um I started doing lease options and I I started flipping lease options I called it wholesaling lease options or you can call them lease option assignments and I was doing enough of those I was making more money doing that part-time than I was in my full-time job I was making good money in 09 I was making 75 80 grand a year mhm and but I didn’t like what I was doing so I didn’t like the fact I felt like it was more risky to keep my job than to quit my job and to

(04:35) start my own business so I remember very early on listening to gurus and coaches and people teaching this real estate stuff and thinking I love what they’re doing I want to be able to help other people like they’re helping me now and uh but one of the guys said we are not in the real estate investing business we’re in the marketing business and I thought that just really resonated with me because I realized realized as I was doing more and more deals that I’m not in the real estate business the house

(05:05) business the lease options business the wholesaling business now vacant land business I’m in the marketing business and now that also applies to whatever business you’re doing and one of the other things he said is you should always try to get your marketing done for you in spite of you and so I would go through these Cycles up and down of like doing a bunch of marketing getting some deals and then stopping the marketing because I had so many leads coming in and then I would flip them and then sell them and make some money and

(05:34) then turn around 2 months later and my pipeline is empty I don’t have any leads and so I learned you’ve got to keep that marketing engine going all the time and if you can’t do it then you need to get somebody else to do it for you so get it done for you in spite of you marketing is the most important so then as I was thinking you know I started doing deals quit my job and I started getting invitations to speak um at different real estate clubs on different other boot camps and workshops and so I thought I want to teach people

(06:02) how to do this strategy called wholesaling lease options and um so I started studying other people that were doing something similar and I saw one thing in common with all of the successful Publishers and infom marketers is they were continually marketing and they were always creating really great valuable content and then marketing their products and services inside that content so I realized it just it’s the same thing in a different you know um vertical so I’ve just always been a real big fan of marketing whether you’re

(06:34) doing deals or whether you’re selling and Publishing information or coaching services or products um you could have a great product the best product in the world but if you don’t know how to Market it and how to get leads in um nobody’s going to know about it yeah yeah that’s the truth and I think you know the the idea of the pipeline drying up that is the most common sales problem that exists for great sales people oh yeah so the the worst salesperson you can have on your team is the one that is

(07:06) amazing and then celebrates after he wins or she wins and stops Sol listening right they stop the lead gen because they’re like ah Victory and then that’s it um and and I am very very very closely tied to many people like this yeah yeah they take in entrepreneur doist all the time right they take the victory they go do a Victory lap and just abandon the business in the meantime and obviously the same thing applies to marketing so okay so 09 um you I have to know because we’re sitting in a real estate education

(07:37) com conference with these it’s every Guru that exists in the real estate INF product space right everybody back from um Robert Allen is down downstairs to Ron LR Ron LR Ted Ted Williams is that um kosaki Lou Brown yep L Brown Dolph D Dolph D crazy Giants these guys are awesome yeah this and you know Pace Mor Jam the people that are dominating now but who did you when when you said in 0809 you were listening to the gurus who were you listening to then who caught your attention then and did you follow a specific path to get off the ground then

(08:15) well it’s funny cuz you talk about all the people the ogs that are there um or the goats and a lot of them aren’t around anymore mhm you know and I I get inspired by that because I don’t want to be that guy who’s not around in 20 years like I want to uh I want to be like the Ron lrs a little nicer but I want to I want to be the Ron lrs you know in my’ 70s here at these events MH and still doing because I I just love the education business I love mentoring and coaching and helping people and seeing

(08:45) them succeed I I I’m a real that’s a big passion of mine passion but uh one of the people that I looked at to back then uh uh her name was Wendy Patton and she taught lease options and this is interesting because we were you could have considered us competitors I was teaching kind of a niche within a niche of lease options and she was teaching the much broader top topic of lease options and uh one of our mutual friends Sean MOSI told me you know you have something you you can you need to share to the world but you can’t

(09:17) just approach these other people and say Hey can I have your stage can I sell to your audience so he told me something that I’ve done countless times ever since I approach other people with the audience that I want and I’ll I’ll ask them how can I add value to your list I want can I can I um do a podcast can I do a video for you guys can I teach them your list everything that I’m doing for free and I won’t sell anything so I I approached Wendy through mutual friends and I said you know I’d love to talk to

(09:52) your people about what we do cuz I think it’ll be really helpful for them and so she got me I remember so clearly I I just quit my job maybe six months ago and um I was doing a lot of these deals and I wanted to teach people so she asked me can we just do a 30-minute phone call and recording about what it is that you’re doing I said that’d be great and so I just started teaching and that 30-minute call turned into two hours and it was such a good recording she actually took the recording and added it into her next course as one of

(10:23) the modules in her no no it wasn’t even a module it was a brand new course so I taught my competition everything that is that I’m doing that I wanted to include in my own program but I just taught her how I’m doing it and so she then turned around and sold that course didn’t give me any money from that but that’s what my I told her I said I want you to take this stuff that I’m doing and just sell it to your list I don’t need anything from it and then I I just started delivering trying to overd deliver on

(10:53) the value to her audience then she invited me to her boot camp and then she did something that I find out later was was really difficult for her to do she let me sell my course at her boot camp and uh turns out her students loved me and they bought everything that well I didn’t have I had one course and they a lot of them bought my course and her students weren’t like buying less of her stuff because I was also there right and so she realized oh this is amazing because her students are you know and she realized this and I have come to

(11:27) realize this too they’re not not all just buying one person’s program they’re buying many people’s programs learning as many different aspects and we all have different angles and stuff so I kind of really tried to go into it with a go-giver mentality um and then I started approaching other people who had large audiences it’s similar to The Dream 100 concept if you hear people talk about that and I just tried to approach them with like how can I deliver some real value to your audience that I think will complement what you’re

(11:56) doing well and I’m not asking for anything in return so so okay so a couple things there one uh dream 100 100 is a chat homes concept which is um Chad is deceased Ted Miller was his partner in that who’s also been on the show um and then they partnered with Tony Robbins to create business Mastery yeah um for those that don’t know uh but the dream 100 concept is Target your dream 100 clients relentlessly right so forget about going broad look at the narrow 100 clients that have the Bigg impact and

(12:31) strategically approach them as many times as you need to strategically uh to get those clients without not with what’s in it for me but how can I help you grow your audience how how can I help you make more money so this is the differentiator and that that’s an interesting uh thing for a new person to focus on generally speaking new entrepreneurs do not approach things that way even if they want to even if they know that they should even if they’re being taught and guided to do it because of scarcity and because of the

(13:00) situation that they’re in um it’s hard to put aside monetization and your lifestyle potentially uh and what you perceive to be your well-being for free oh yeah it’s scary because you’re worried like well what they’re going to take this information and sell it on their own but it’s a whole law of reciprocity yeah and I’m not actually even doing it to hopefully them get me to them to promote me or whatever I’m really genuinely like I just want to deliver a ton of value to your audience where where did you get

(13:34) that concept from jump because I think that once you are established and once you have money it’s easier to approach things that way because there’s less scarcity mentality you know once like certainly once you’re in a place where you could functionally retire at any moment and you’re doing it for growth gain exposure to help other people Etc it’s easier to operate from that lens um but when you’re brand new what who planted the seed it was Sean MOSI um I at the time he was kind of with my coach

(14:06) and also a client yeah Shameless EP that’s right that’s right but um so it’s like I I just listened to him because I knew I I saw these people that I wanted to hang out with and I knew I had I only had a little bit to give to them but the little bit I did have I thought was really really valuable to Their audience and I wanted to give it away for free so it would make them look better I love that and and just naturally when you do that when you try to make other people look better you also are looking better

(14:38) in their eyes and then what they do is they’re like hey this guy Joe’s pretty cool and this happened like crazy um you know what I know who else would like you to have be on their stage yep and they started referring me to other people I started traveling to their stages their boot camps workshops started doing a lot of webinars and I just really honed in on my craft of of teaching and selling and uh started having good results and then after a webinar when I’d sell something I would ask them you

(15:07) know did it if you thought it went well would you know anybody else who might be interested in this and so that’s really how I kind of grew is uh Hey Joe’s a nice guy he’s a go-giver he gives a ton of really good valuable free information he’s not like these other shyers that are just trying to Hawk their stuff and he also sells really well so he’ll deliver a lot of value and he’ll bring in a lot of money to your event or whatever because you were uh so the model here in real estate education as you’re presenting it it

(15:38) sounds like is you were going to events speaking on stages and selling a product and splitting the revenue of the product yeah yeah but when I sell it it’s not like your typical sales pitch i c i teach a lot I give deliver a lot of value love it and then the call to action is hey do you want my help um I got this program program and we’ll do it with you do it for you we’ll coach you through the process um so I I feel like I overd deliver on the value in a lot of ways but I also leave I teach a lot of

(16:10) the there’s a whole science behind this but I teach a lot of the what when I’m teaching live but not the specific house so if they want the house I just don’t have time in an hour an hour and a half presentation to teach them all of that I might say something like hey you know what there’s five really good ways to do marketing and find sellers I only have a little bit of time here I’m going to teach you the best way right now and I go deep in that one best way but I’m so I’m delivering a lot of

(16:36) value but I’m also letting them know there’s some other things here that you need to learn this is really important but these other three or four things are just as important and you need to know all of them if you want to have success so then I move on to the next step and I’m always planting those seeds of like I’m giving you my best stuff right now but if you want all of it if you think this stuff is really good think how much better this program is going to be yeah that I that I sell and it’s more than

(17:02) just a course that I sell too it’s handholding it’s I’m going to help you implement this stuff you know I I’m always thinking about when I’m selling something is why would they say no what are their biggest objections and so that becomes my offer that becomes my offer is like well they’re going to say I can’t do what Joe’s doing because you know he’s such a good-look guy and so I’m they’re going to say I can’t do what Joe’s doing we’re we’re on video you

(17:27) can’t pull that off no know I can’t do what Joe does because I don’t have the money to buy those deals you know so one of the bonuses of my program is going to be I’ve got the private money to lend you money on your deals if you want to work with me maybe an objection is I’m not computer techsavvy I don’t know how to set up all that stuff so part of my offer is we’ll set it up for you mhm uh so there’s a lot of things I’m always thinking about like why would they say no and that becomes

(17:55) then part of my offer so I’m teaching delivering a lot of value on other people’s platforms borrowing other people’s audiences borrowing their influence right delivering a ton of value always uplifting and uh I don’t want to say magnifying but like you know shining the spotlight on the person who invited me there um it just it works well I like the uh I like the idea of using the objections to create the offer oh it’s huge one of the things that I think people failed to do that just in at large and I think they failed to do

(18:31) it from a marketing perspective as well as from a sales perspective so I I grew up in sales an aggressive sales and one of the things that I was left with after thousands and thousands of sales presentations is frequently if you are handling an objection you failed to handle the objection meaning that you need to seed oh yeah the objection before ever comes up you want to know the best way to do that please all right this is this is killer and I learned this I have to give credit to where credit is Du there’s a

(19:04) guy named Caleb odow you got to get him on this show love it he’s really really smart one of the smartest marketers I’ve ever seen he spent a lot of time one-on-one with Gary Halbert before he passed away okay um Gary Halbert would take in interns and live in his house with him what yeah and Caleb odad was like his intern for a couple years I didn’t know that dude that’s wild yeah I didn’t I had no idea he did that so Halbert is uh the like the you know grandfather of direct marketing for

(19:34) those that don’t know right um so wild I’m a constant student I’m always like I got to learn what the other people are doing so Caleb odow is one of those guys where I just want to see what he’s doing I watch what he’s doing I signed up for all of his programs and the guy’s really really smart one of the things he does on his webinars he deler he teaches everything how to do it step by step right and then he’s like if you think this is easy no no know this is how he kind of positions and this is how he

(20:01) transitions into his pitch um so you may say you know and I’ll I’ll use it from me my perspective you may say Hey Joe this sounds amazing is it really that easy and I’m going to say no it’s not actually it’s really hard because here are five roadblocks that you’re going to face if you go out and you try to do this right now on your own all right number one is um you’re how do you know you’re going to if you don’t pick the right markets you know for in my course I’m teaching land if

(20:33) you don’t pick the right counties then you’re going to be wasting a ton of time and energy and money you’re going to get really really frustrated so it’s really important you pick the right markets and then number two if you don’t have the money to buy the deals number three I can’t remember all five of them right now but my my roadblocks are the big objections that are already going on in their head right now so I’m thinking before when I I’m crafting my offer what are their big objections in their head

(20:58) I’m I don’t have the money um what if I pick the wrong Market what if I make a bad offer what if um I can’t find a buyer for my deal um what if I have questions and I feel stuck what am I going to do and so those are the roadblocks I’m telling them they’re going to have which so I’m kind of trying to enter into the conversation already going on in their head and um and so then I give them the roadblocks the obstacles that they’re going to face and guess what my offer is it obliterates every single one of those um

(21:30) objections that they have and I said remember I told you that you you you’re going to be worried about you have to make sure you pick the right markets okay well after you go through the program you can schedule a one-on-one call with me and I’ll review your markets with you uh the other objection is what if you get a bad make a bad offer well every week I do a call with my students where we review your deals and I’ll you can look I’ll look at your deals and I’ll show you what you should

(21:56) offer on those and so each of those roadblocks are part of my offer and then the bonuses that I offer are still if there’s any lingering like objections or or why would I not buy this those bonuses resolve each one of those things and so some everybody asks like when is they’re pitching something or something why would somebody want to buy this how can I convince somebody to buy this a better question is why would they say no to this and then framing your offer and your bonuses structuring them around why

(22:28) they say no it’s asking a little deeper questions about their pain and the psychology of what’s going on in their mind and just you’ve got to have a solution that helps them and solves their biggest problems so that’s why I sell really well on my webinars and when I speak that’s great uh I think about I say this often but I think about a life in terms of what’s the absolute worst case what’s the absolute best case and then plan for neither of them because neither are like to happen and then reel

(22:59) it in a little and say what’s the likely worst case and what’s the likely best that’s where I need a plan and you know there all sorts of Fringe objections that might come up those aren’t relevant the question is what are the common ones that are going to come up uh and I think that for me I apply that to all sorts of things in life business in general any new initiative but inside of sales and marketing it’s a great way to craft an offer um and you you you you got to talk to your audience you got to talk to them

(23:28) they don’t buy we survey them why didn’t you buy it usually it’s money and time or something like that all right so let’s let’s get to that so let’s back out 2009 you got into the investing side of things what was the Divergence between uh investing and deciding that you needed to educate where were you in terms of you know money or Revenue where what was life like and why did you make that choice okay so I when I quit my job in 09 I was making 75 grand a year in my corporate job I was making doing um

(24:00) deals on the side part time I was doing maybe 100 120 Grand a year so 10 grand a month eight or nine 10 grand a month on the deal side so I realize this is working I’m doing this part time how much more deals could I do if I was doing it full-time and so I had I had actually made sure my goal was to have you know six months of income in the bank but I I just couldn’t do that because I was working too much at my job and not enough time doing deals so I just said all right right if I can do deals consistently three months in a row

(24:32) that exceeds my monthly income at my job then I’m going to quit my job and I did that um so I started doing a lot of deals and uh I I kept on thinking like man I want to help other people do this because it’s awesome you know and this actually really really works and I started seeing other people teach and making a lot of money teaching and doing education so I I started doing it cuz I got invitations to speak and and um I started seeing the money that can be actually made from the education side of

(25:06) the business the publishing side of the business um I also saw I saw people doing podcasts which were kind of new in 2009 yeah and um I there was a podcast at the time called the internet marketing internet business Mastery podcast and I forget the two guys’ names that ran it I just loved what they talked about how you don’t have to cuz back then in those years to to sell you had to go speak at real estate investment clubs you had to go travel on a plane to places and here was these new internet marketing guys that

(25:36) were coming up the Jeff Walkers and then other guys in the real estate space that were selling through vsls and webinars and stuff like that so I saw that and I saw how much money they were making and I thought man I could do that why can’t I do that so I started I created a program in fact I remember some of the people that I really admired and respect Ed and looked up at look looked up to when I told them what I wanted to do they told me no don’t do it there’s there’s too many people right now in the educ education

(26:07) spaces it is and we don’t need another Guru teaching lease options which is what I wanted to teach um and it’s not as easy as you think it is and I remember just being devastated that they told me no I shouldn’t do it but I just like was doggedly persistent because I know I can do it and I know I can do it better than what a lot of these other people are doing so I was persistent with it well then I actually started making a lot of money selling education and doing coaching it was more fulfilling for me I’d always

(26:40) kind of had this wish dream maybe of being a college professor or teaching so I’ve got that itch in me of wanting to teach so I thought all right well um I’m going to I’m going to teach and I started making a lot more money doing the teaching education side than the actual deal side and and I so I still do deals to this day you know one or two deals a month it’s a very part-time thing for me and I have a team that kind of runs the operations for me we do big deals but I still only do one or two deals a month because I want to

(27:10) stay sharp and I want to know what’s working and what’s not I want to have that credibility that we’re still doing deals but here’s the bottom line the education business publishing Business Services software much easier to scale it’s much easier to get to your first million selling services and Consulting and education doing that than it is doing deals now not doesn’t mean everybody can do it it’s not for everybody but if you’re bent that way like I am yeah I can get to you know if it’s all right to

(27:46) say I’ve sold over $15 million in education and Consulting Services just my stuff and um I could have gotten there with just doing deals but I would have had to have a much bigger team I would have had to have a lot more infrastructure in place you can get to a million dollars a year easily with just one or two people in education in education yeah yeah well I think the the story is hilarious that everybody was like oh it’s too crowded there’s too much stuff going on back then they thought it was too crowded dude it’s way

(28:16) worse now the only truth that there was in that in that rant uh by them was that it’s hard and so there are challenges right like any business model you need to figure out business model you need to understand it but the notion of things being too crowded dude it’s uh what I’ve come to believe is that the only time um there’s any truth in that mentality is uh in the macro meaning that if your desire is to be Behemoth then you have to look at like let’s say I want to I I decided I want to be the largest internet retailer on

(29:00) the planet okay well I have Amazon to contend with but if that’s not my goal and I’m in my biggest company that I’m trying to make is 100 million 500 million a billion I’m still inside of one% of the ecosystem so if and that’s the micro so if you’re working in the micro it doesn’t matter how crowded it is you can outwork outmaneuver um recraft something to create your own space well and that’s so huge because my space was a niche within a niche the you know saying the riches are in the niches and I couldn’t agree

(29:33) with that more because I knew if I tried to create a lease options course there was five other people teaching that and uh some of them are down there in the room right now right but I knew I had to be I had to be diff I had to differentiate myself I had to have a unique hook a different I had to have a big idea you know like I I use this analogy a lot there’s weight loss right and everybody’s teaching how to lose weight you exercise more you eat less calories or whatever but somebody out there had this crazy idea to come up with a

(30:05) product on how to lose weight with drinking coffee with butter in it right and what that that just exploded into the scene well there’s always those little things it’s a unique selling proposition it’s your little unique hook somebody who wants to create just another me tooo Product I I I try to steer them away from that I said no no no there’s got to be one thing you’re doing that’s different a different different angle a different hook and so for me it was wholesaling lease options

(30:32) you’ve got the big thing of of you know houses and then you have lease options and then wholesaling lease options is a niche within a niche and I I decided to go deep into that I started to I decided I’m going to go an inch wide and a mile deep on one subject and then what that did is it opened up so many more doors because now I’ve got people who are teaching the lease options would invite me to come share to Their audience because it was different unique and I became known as not just another lease option guy I became known

(31:02) as a wholesaling lease options guy um and the same thing with now I’m I’m doing more land deals vacant land deals and there’s a lot of guys teaching vacant land but my unique thing was I wanted a business so simple that I can get my teenagers to do these deals with me and so I designed my I started doing deals with my teenagers and uh now when I sell the program it’s like I needed something that where you don’t have to talk to sellers you don’t have to I started casting stones at what everybody

(31:32) hates talking to Sellers and uh complicated systems or whatever and I developed something really simple that you could do with your kids and so that’s I’m still teaching land investing but it’s just a unique angle and a unique take on it where I can show these deals that my students are that I’m doing with my kids my students are doing with their kids and that made me kind of Stand Out above the crowd of everybody who’s already teaching land and another angle I’ve taken is like doing it

(32:02) virtually you know while traveling around Europe with my wife and four kids or doing deals while traveling for three months in our RV so setting up automated systems just makes it a little different that’s that’s my kind of coffee and butter flavor on weight loss but in the land investing space does that make sense yeah totally here’s here’s the other thing I like to say Focus will make you rich man so yesterday I had a shirt on that Focus yeah and that is the truth oh yeah the I think the single largest

(32:33) enemy for all entrepreneurs today is distraction Y and it happens in all sorts of different ways there are all sorts of quote unquote productive distractions that you can have look we all have a million things that we could would should need to do in our business but if you can narrow in and focus on the most important one and just keep doing it you get much further ahead yeah and it’s boring well people are afraid of narrowing their focus for sure because they’re afraid well the my audience is going to be much smaller and

(33:09) you say no to other opportunities when you do it and that’s the scary part specifically when you have scarcity specifically when you’re early and the you know the conversation happens a lot with the entrepreneurs of who’s your target market and anytime and you hear it all the time people are like oh it’s basically everybody no it’s terrible that’s a recipe for disaster it is a recipe for disaster so I agree with you on on a lot accounts I will say that um the I think you there are tons of examples of people that do

(33:41) just have me to products that destroy it and and that goes back to marketing being the core of it so there people that have shitty products that are me too products that are not as good as the current uh leading provider and somebody comes out and just crushes and it’s not as good of a product but they do a better job marketing yeah if you have the angle it makes the marketing more credible easier easier Etc um so I like trying to figure out the little one um so we’re using lots of you have used lots of different words to explain

(34:15) different types of real estate investing people that are not involved in real esta real estaing in real estate investing don’t know what the subject two is you know don’t know what lease options are don’t know any of this stuff right can you break down for the sake of definitions Etc and because I think it’s interesting break down your model yeah yeah okay so you’ve got this is the great thing about real estate is there’s so many different Avenues to make money you know you can do houses single family homes you can do

(34:46) commercial apartment buildings multifamilies you can do vacant land dirt in the middle of nowhere you can do a lot of different things and then inside of each of those asset classes there’s different strategies mhm um so with houses you can buy and hold a property that’s the traditional way of buying and holding a property and renting it for 50 years um getting a 30-year mortgage on it there’s also Fix and Flip where you can take a property that needs a lot of work fix it up buy it at a big discount fix it up and then

(35:19) resell it make a big profit like you see on the TV shows there are U there’s other strategies like wholesaling which means you get a property at a real cheap price and then you just flip the contract you sell the contract to another landlord or rehabber who’s going to fix it up so you get it real cheap you sell that paper for five grand to somebody else that still leaves a lot of room in them in that deal for them uh the strategy I focused on was called lease options and that’s where you can actually buy

(35:52) property a house a commercial property a vacant land you can buy buy a piece of property on a with a lease for 5 years with the option to buy it in that time frame that’s called a lease option there’s also go a little bit deeper on how that works so let’s say uh there’s um there’s a uh there’s a house that the family bought it 3 years ago and um they don’t have enough equity in it so they can’t just sell it with a realtor CU it hasn’t prices gone up and down but like there’s not much equity in

(36:30) the deal so let’s just say they bought it for $200,000 and um now today it’s worth maybe $215,000 they owe maybe $10 so if you follow the numbers there is about $225,000 maybe in equity there but if they list at the traditional route it’s going to take 6 months to sell maybe they’re going to have to pay all kinds of realtor commissions they’re going to have to give concessions and play closing costs at the end of the day they’re not not going to get anything mhm that that Equity they thought they

(37:00) had has disappeared and they and then they have to fix the house up and they have to um you know paint all the walls take all the it’s it’s just a hassle but they don’t want to be landlords either so they don’t want to just rent their property out so an investor like me comes and says hey what if I just start making your mortgage payments for you I’ll lease the property from you for whatever your mortgage payments are let’s say the mortgage payments are 1,500 a month and then I’ll have an option to buy the

(37:30) property sometime in the next 5 years for whatever it’s worth today $200,000 and uh or something like that so I’m going to lease it from you I’ll cover your mortgage payment and also had the option to buy it sometime in the next 5 years for predetermined price that’s that’s said great let’s do it and I also tell them I’ll I’ll be responsible for the day-to-day maintenance and repairs so you don’t we’re never going to call you to fix something up so off their plate entirely

(37:59) yeah and for clarity the purchase price is that at Market above Market below Market it’ll be a little bit below Market a little bit got it if I’m going to make them a cash offer I’m going to be way below Market M with a lease option I can I have more room because I have time I can offer them more so it’s a very attractive offer to that person cuz now a lot of them might have gone through a divorce a job loss job transfer and uh they can’t make another mortgage payment there’s some kind of

(38:30) motivation there’s some kind of situation where they’re like I just need to get out of this but I don’t want to be a landlord but I don’t know how I’m going to make next month’s mortgage payment I don’t want to Airbnb it I don’t want to rent it out Joe investor comes and says well I’ll just take care of all that for you so he’s like that’s great so then what I do then is I’m paying that mortgage payment as a lease payment to the seller of 1,500 a month but I know I can rent it for 1,00 a

(38:55) month so I turn around and I sell it to somebody else on a lease option and that’s the wholesale part sort of yeah but I’m going to stay in the middle normal traditional wholesaling is you’re in and out in a couple months right a a standard typical lease option I’m buying it on a lease option and I’m selling it on a lease option I’m staying in the middle it’s called a sandwich lease option right so I’m staying in the middle I control the property but I don’t own it that’s what a lease option

(39:23) is it’s a good definition you control without owning it mhm so I’m controlling this real estate I’m paying the seller you know 1,500 a month that’s going to their bank and I have an I have a contract to buy it an option to buy it for maybe $190,000 sometime in the next 5 years but I’m going to turn around and lease option it to somebody who’s going to live in it for $1,900 a month so my cash flow spreads about 400 a month there and I’m going to give them the option to buy it in three years for maybe

(39:51) 220 so I’m buying it for 190 and I’m selling it for 220 so there’s a $30,000 spread mhm and then I’m also getting $400 a month in cash flow for staying in the middle now I remember I said I hope I’m not going way to too deep into perfect man I think that most of the people that um subscribe to the show are people that you know we have a good chunk that are new and getting off the ground and learning business then we have a good chunk that are super successful in business and strategies to

(40:25) make money or what to do with your money Etc real estate is without question one of the strongest propositions to create wealth on the planet and uh picking a space to play in and understanding the nuances of how to do it are a gap right it’s like you know you have people that have money and they’re like I don’t great invest in real estate well what does that mean yeah so understanding the nuances of a specific strategy in real estate I think is highly applicable well and this isn’t even my favorite strategy

(40:53) well let’s get to your favorite it’s it’s an amazing strategy but what I hear so far is um it’s a paper game yeah so you need the marketing funnel to find the people on both sides find the deals and then find the investors to sell to to contract with but ultimately you’re Contracting the property to lease it with an option to buy it later and then you were finding somebody else that also wants that same proposition to lease the property with the ability to buy it later at a a little higher price at a

(41:19) little higher price probably and but it’s all on paper right you have a contract and then you create a new contract with them and create the spread yeah and uh my assumption here and correct me if I’m wrong but is that the motivation of the other party is that they potentially need a place to live yeah and uh can’t just get a traditional Mortgage in the moment credit is bad whatever don’t have a down payment self-employed self-employed yeah don’t have a down payment so they have tax leans let’s get there all right uh and

(41:51) they can uh they can then get into the property live there it’s a little bit of a premium on a monthly basis yeah but they have the opportunity to buy a house could otherwise buy it they get to lock in a good price it’s a fair price um gives them time to rebuild their credit I bought my own personal house that we’re in now through a lease option and I’ll talk about that there we go but this is why I I love creative financing because um there’s a lot of people out there that make a lot of money but they

(42:20) don’t have really good credit it doesn’t matter you know let’s say there’s a $500,000 house if you’re self-employed and you have some bankruptcy in the five years in the past um and you you know you’re you’re trying to reduce your income to pay less in taxes it doesn’t the banks it’s so ridiculous you could have the cash in the bank to pay for that house with cash but a bank still won’t lend you the money because there’s all these hoops you have to jump through so there’s a lot of people out there who

(42:47) are self-employed maybe had a they have good reasons for bad credit in a certain sense and they just can’t get a mortgage right now if they wanted to I call them Penalty Box by buyers and they just need a little bit of time and I was in that situation so you know they’re good people they’re they make a lot of money um they just don’t want to have to rent a property for a couple years fix their credit or do whatever they need to do get the thousands of reams of papers for the banks they need some time they don’t

(43:14) want to have to rent a property get and then move again in a year or two when they can finally get a good mortgage and buy a house or may be like I don’t know if I want to buy this property or not I just want the option to buy it and so then they can live there for a couple years and then decide you know what we don’t we don’t want this property we’re not going to exercise our option and then they can leave great so my favorite strategy before I talk about my woses uh is is flipping vacant land right now I

(43:44) just love doing that because again I wanted something that I could do with my boys and for I I found it difficult to train you know a 14-year-old kid on how to talk to sellers how to negotiate prices how to you know how to negotiate on the phone with the seller which is really important on for House deals how to um understand arvs after repair values how to estimate repairs there’s just a lot of complicated things in houses right Joe it is difficult to train a human on how to do those things much less a 14 14-year-old yes right so

(44:20) then I saw um I heard some students of mine that were doing house or vacant land deals with some other friends of mine who teach this stuff and I thought this is fascinating so vacant land you know with a seller who owns vacant land they they don’t have any emotional attachment to that property they bought it 10 15 years ago their husband bought it and they’ve never been out there maybe once or twice they just don’t care it’s much more transactional much less emotional right so I thought it’s an

(44:49) investment versus a residents yes yeah they didn’t put hundreds of thousands of dollars into that house they just they bought a piece of dirt for $5,000 $110,000 15 years ago and they’re tired of it they just want the money back and uh so we go in and we we do some Direct Mail marketing it’s very simple we make a 30 offers at at 35 cents on the dollar and we know our numbers we get one out of every 20 to 25 accepted it’s a numbers game and then we take those deals once we get it under contract and

(45:20) we hire Realtors to sell them for us interesting and it’s very simple so we do hardly do any talking on the phone to sellers we just make them a we just make we do a lot of direct meal make a lot of offers and we only talk to them after they get our offers got it okay so hold on that how the business models work is always where my brain goes right I I think I’ve conditioned myself for this over many years but so you direct mail presumably you’re doing this because the list that you’re getting to find land

(45:52) give you addresses and not necessarily contact info public records is amazing it’s only in the United States right so I can say I I can go and say all right in the State of Florida which county has had the most sales in the last 90 days of vacant Lots vacant land and I can see through public records and sites like Zillow and redin you know there’s these three or four counties Southern Florida that have sold like 15,000 vacant Lots in the last 90 days well that’s a good lot I should look at because there’s a

(46:23) lot of Demand right there right mhm and so I can say there’s service providers I can go in and say all right give me a list of everybody who owns vacant land in that county who lives outside of that County that’s owned it for over 10 years I get a list of 20,000 people right and then I send them this ugly postcard that cost 52 cents basically says hey if you want to sell your vacant lot text or call this 24-hour recorded voicemail the voicemail says and this happens all in my software the voicemail says hey

(46:53) thanks for calling there’s a little reference ID on that postcard just leave your name and number and that reference ID and we’ll send you an offer in a few days all right I got to get into details here again so and I think I know some of these but why the 24-hour recorded message versus just calling you it it gets more calls because they know nobody’s going to answer there’s no fear of actually confrontation they just get to get information and I don’t want them to go to a website because I want their

(47:17) phone number ah so if they call the number then you can see the inbound call and you’ve got the number now I yeah I got their numbers they half of them will send a text half of them will leave a voicemail they give me their reference ID and then we just pull it up and we can see okay we know the size of the property where it’s located the GPS coordinates the parcel ID or the APN numbers all these and we know who the owner is we know where the owner lives um usually you know if you’re down in Florida a lot of the owners live up

(47:46) in New York or New England or you know so we look at the property and then we look at comps well what are similar properties selling for that that same size we’ve not even called the person back yet MH and then we look at okay well if we’re going to sell this aggressively in one or two months if everything else is selling for 20 grand we’re going to list ours for 17 grand MH and then from that 17 grand I just subtract my costs I want to make 10,000 on the deal I’ll pay a realtor 10% commissions I’ll have a th000 in closing

(48:20) cost and I’ll pay 500 bucks to a photographer so I subtract all my numbers and there’s my offer I’ll make them an offer let’s say let’s say it’s worth 20 I’m going to sell it for 17 I’m going to offer maybe 5,000 bucks all right I send the owner an offer and I’ll send them back a letter with a cont onepage contract for 5,000 bucks and I know my numbers one out of every 20 to 25 and I can’t promise or guarantee anybody that it depends on the county it depends on a lot of things but some

(48:51) counties we’re one out of every five that we’re sending now usually that means we’re offering too much in some counties one out of every 40 offers get accepted but that one out of 40 is going to be a big 20 $30,000 Flip or whatever so like it all depends but we know our numbers in these counties and we know all right if we send 25 offers we’re going to get one of them accepted on average and when a seller is interested in our offer then we talk to them and uh and then we start our due diligence

(49:20) period um first thing we do is we’ll call Realtors who have sold vacant land in that area and we say hey we’ve got a good deal here we see that you sold a property here recently to somebody we have a property that’s similar but even better and we’ll pay you 10% commissions which is very generous in real estate huge commissions versus three yeah we’ll pay you 10% and these are also smaller properties right so we’re selling them for 15 to 20 grand so we’ll pay you if you can bring us a buyer we’ll pay you

(49:50) 10% commissions and will’ll give you a $1,000 bonus if you can close in 30 days and so now we’re getting Realtors to do the dispositions for us to sell the deals for us and we only pay the Realtors if they bring us a buyer so it’s a great I it’s I love it because it’s something my kids can do with me my my two older boys now are in college one’s just studying to be a chiropractor and the other one wants to be in gets a get a major business but pretty soon my daughters who are younger might be

(50:20) helping me in this if they’re if they’re interested but I’m telling you our Aver average profit on these land deals are about 10,800 bucks I just looked the last 12 months our average profit net profit is $10,800 we just did a deal where we netted $36,000 so that gets me excited but you know what gets me more excited is teaching other people on how to do that like my I’m not smart enough to figure out how to scale a real estate deal business and an info business at the same time like so it’s either one or or

(50:56) the other for me so I’m I’m spending maybe 5% of my time and energy on the land side of the business we’re still doing a couple deals a month but I’m spending you know 95% of my time on the education side of this business teaching people how to do that stuff and that’s what jazzes me gets me most excited is helping other people do that and then here’s the cool thing a lot of times they’ll bring me deals who my students that I’m teaching oh right they’ll bring me deals to partner on with them to lend

(51:29) money with them on so it’s like it’s it’s that’s the great benefit of teaching is I’m building a community and they’re doing deals with each other some of them are bringing me deals and uh everybody wins yeah well that’s if you want to keep doing deals right and so I think first of all that’s very humble to say you’re not smart enough to do both at the same time you have priorities that prevent you from doing both at the same time yeah and your and one of your priorities is time with family and so

(51:58) like as you’ve outlined right you you want you’re doing deals partially because you want to be able to do it with your kids which is awesome um there are there are people at the event now for example that have monster deal businesses and education businesses and what you just said for the people that want to put the time and energy in that are in hypergo mode all the time that are building huge things the info product thing is just a feeder yeah for deals and we have lots of examples in the real estate education

(52:31) space of people that have functionally cashed out retired built tremendous wealth on the back of the education business using it as a feeder to create a fund or just to do independent deals and just acquire acquire acquire acquire real estate well that’s why I love coming to events like this because I’m hearing I’m seeing other people that are at another level above me that are doing more of what I want to do and I’m you know trying to network with them and discover how are you doing that like we

(53:01) just heard Pace morby speak and that guy’s a beast but he’s using his education business what did he say he owns like 4,000 doors or something like that now something crazy but he he’s got people that are bringing him they’re not his students aren’t his community Don’t Call Him students y his community is um doing a ton of deals they’re bringing him deals and they’re also bringing him the money so he I forget there’s a you know there’s a schedule something C or whatever I forget what it’s called but

(53:31) like you can you can create um these funds that are sanctioned by the SEC and all that to raise money and you can put your students money your community’s money into these funds to borrow to to to to invest into deals so anyway I get inspired when I hear other guys talking about that because I’ve got so many many students I got a list of at least 30 people right now who are begging me to lend me money on my deals yeah because they want to do it themselves but it’s like man you know what it’s just easier I’ll I’ll give my

(54:06) money to Joe and have him invest in the deals um no question about it so then I’ve got other students that are bringing me deals and I’m trying to get to a point where I can say ah you know what uh let’s let’s work together on this and you got to make sure you do it the right way but yes everybody can win if you do it that way yeah well so we have had lots of people I have had lots of conversations like this with people that are big in the uh info product space in different spaces and you definitely have to be careful that you

(54:39) do it the right way um and that’s one of the reasons why I haven’t done it much yet at all really y if somebody brings me a deal I’ll just buy it with my own money yep sometimes I’ll use a private uh one of my students as a private investor but only on one deal I never co-mingle funds and I never never solicit money so yeah but it’s a it’s a landmine a field of um yeah certainly when you when you get to a certain size the federal government wants to get you oh yeah and and I don’t I don’t have a

(55:09) whole lot of respect for a lot of the federal agencies that go after this stuff for a lot of reasons that’s a conversation for another day I suppose but I think one of the big takeaways for non real estate education people which is you know the vast majority of our audience is is to think about how you can have a lead generation mechanism that is highly profitable independently while it’s feeding leads to your core business or to another business offer right and it’s in simplest terms it’s how do you create a self-liquidating

(55:45) offer in simplest terms right if you want to go up chain and look at the bigger business models it’s how do you create a huge self-liquidating offer that is wildly profitable but on the back end you’re crushing with the real offer yeah and the real estate education space I think is one of the most beautiful business models for doing it yeah because the path is actually pretty clear now right we’ve seen a lot of people go down the path and do it and it’s not easy it’s not simple um but the

(56:13) steps are there and there are people teaching it you got to be so careful to do it right that’s a whole another topic you know yes but FTC Etc FTC SEC FBI yeah like you all the acronyms and you know it’s unfortunate too you you just do a search on Google for Real Estate fraud and you’ll see tons of people that are just stupid doing stupid things you’ll see both people doing stupid things and you’ll also see people that are 100% totally legit that the federal government is pursuing thinking that

(56:46) maybe they’re doing fraud or that the person leading that three-letter agency is trying to make an example yeah and we we have had several clients that are huge name real estate Educators um that have had FTC suits are totally erroneously like it’s it’s absurd and unfortunately with federal government often you are um guilty until proven innocent oh and if you are proven innocent you still have to pay millions of dollars in legal fees to defend yourself yep yeah it’s uh it’s it makes me sick it makes me sick too it’s a it’s

(57:22) a horrific uh misappropriation of power okay so I could go down that rabbit hole for quite a while and I have lots of examples but for for the sake of uh education of other people here uh and interest and not just bitching let’s go back to your business model and then I want to talk about mistakes because I think that that’s always a good thing to hit on when when we have them and I know that we talked about having some uh but first and foremost let’s rewind and snap back real quick 2009 you had this

(57:51) Divergent path of I’m doing deals but I have a passion to educate and I can see that the scale on education is going to be faster easier more enjoyable for me fast forwarding from 2009 to today fundamentally what are the things that you do different today that you didn’t understand when you were getting off the ground or that you had proven to be not as effective and so you said I’ve got to do something different and this is how I’m doing it now man I’ve made so many mistakes I you know I love creating

(58:22) products and funnels and doing the marketing side of that I probably have had for every one success I’ve had I’ve had three or four failures right and so I’m constantly learning how to do things better and then one of the frustrating things about what we do the you know they say the definition of an entrepreneur is somebody that finds something that works and then stops doing it and do and does something else right so I’ve had that problem of like shiny object add always looking for you know some new t tactic

(58:55) and trick and stuff like that and I keep on having to go back and seeing okay what has worked for me in the past and okay I just I got to do that again so um but I’m also like always testing new things it’s kind of weird but like I I love the game because the market shifts you know and and products have a shelf life your ads have a shelf life there’s you know challenges may be really hot right now but that is a shelf life it doesn’t work now as well now as it used to webinars may not work well now as

(59:24) they used to but they also go and they come back so it’s important to be a student of the game I’m always looking at what are other people doing and how can I model success because success leaves Clues if you see you know somebody talking about the free plus shipping bookfunnel well um maybe I could do that for a little bit you know it seemed like 5 10 years ago everybody was doing it and then it stopped working and now nobody’s doing it but now I see a few people starting to do it again so you got to be a student of the game to

(59:55) succeed and you got to see if you can start watching the trends and and get ahead of them try to jump on the wave as it’s riding up ride it up for about a year or two and then jump off when everybody is going high ticket maybe you can go low ticket right um seems like everybody in their grandmother is doing a Facebook ad to a vsl to a coaching application strategy call right and uh it’s just getting really really hard to make that work to a high ticket sale to a high ticket sale 5 10,000 bucks right and by the way the

(1:00:28) reason that people are doing that largely is because it’s easier to make ads work so if your offer is $110,000 you can spend a lot in your ads to make that work if you’re trying to drive ads to sell a $50 product you better have your ads really dialed right and and so a lot of people are doing that because the ads do work until Facebook shuts you down right and then like oh I just talked to a guy you probably know him down there who’s facing that right now it’s for the last 90 days his Facebook ad account has been

(1:00:59) shut down and he’s crapping his pants because he doesn’t know what to do how am I going to he was averaging I don’t want to say any numbers but like significant numbers mhm and um now he’s not so like you can’t just be relying on one channel for leads you need to go organic and paid when you’re doing paid you know you need to be on Facebook and YouTube and you know Instagram and the other different channels uh Affiliates is really really important so anyway I think if if I’ve had any

(1:01:30) success in the one of the big reasons why I feel like I’m I’m still sticking around doing this for so long which has been now 13 years is I’m always studying other successful people and kind of what they’re doing when I see a new trend coming in I want to learn how and then is there a way I could not copy them right but is there a way I could model them so I’m always looking in other Industries too not just in real estate um is there a way I can model what they’re doing and fit it into my what

(1:02:02) I’m selling and so I I love doing that being a student of the game but then also you know when I’m making a lot of money not sitting on my Laurels and just thinking okay I’ve got this figured out because these things have a shelf life and you have to always be nimble and be able to adjust and change not not change what you’re selling but change the way that you are selling that makes sense okay I want to get this one out because we talked about it before we started recording let’s talk about a big

(1:02:35) what what’s a big mistake You’ made you mentioned just now that for every success there were probably three or four failures leading up to it um give me an example of a mistake you’ve made and and and I guess like what the Learning lesson was or if there was a positive outcome or just a mistake and where you went from there I made a lot of them my biggest one there there was a period of time when I was making a lot of money and I had a lot of losses from the 2008 crash right and I started making a lot of money and I ran

(1:03:06) out of my deductions from my losses and we also have adopt four kids so I had a lot of adoption tax credits how does that work what do you get for adoption tax credits I think it’s a 10 to 15 grand um per child okay so I guess I’m going to adopt 100 kids this year that’s a dollar for dooll credit so in other words if you owe $10,000 in taxes comes off your AGI yes yeah well it doesn’t it doesn’t come off your income comes off of the taxes that you owed oh you owe oh got it does that make sense

(1:03:37) yeah yeah so if your AGI was $100,000 and you were in a 30% tax bracket you would owe 30 so if you adopted three kids yeah at 10 grand per then it would wipe it away it’s a it’s a bargain I I hope that the way it works because I don’t know but that’s kind of what I was trying anyway so I started making a lot of money and I ran out of my deductions and all of a sudden you know I you do what everybody does you file some extensions you know I kept my receipts in a shoe box and I would give my bank statements to my accountant at

(1:04:12) the end of the year after ha where we’re going here after filing the two or three extensions and okay do my taxes and then what is this I owed $30,000 sure and I don’t have that money like crap all right so I got to sell a bunch of things right and I go into extra freakout mode trying to sell and I I pay off my old taxes well guess what’s due after I filed my second extension again presumably more more taxes and I owe more because I’ve been making more money sure to pay off those old taxes so

(1:04:43) now I got another tax bill of like 50 $60,000 and so you know it’s it’s embarrassing to talk about but like I kept on digging myself into a bigger and bigger hole sure and hiding my head in the sand thinking uh I’ll just make more money and knowing the real problem for me was I’m not good with managing my numbers I did and I heard somebody say one time if you don’t know your numbers you don’t have a real business and I didn’t know my numbers I I could give you a p&l statement at the end of the

(1:05:17) year when I did my taxes that I talk to my when I talk to my bookkeeper once a year but I couldn’t tell you where I was at to day and I was that I was I was your checkbook business owner where I would look to see how much was in my bank account and that’s what I knew I could spend and so I saw I saw 10 grand in there I thought oh great I can spend 10 grand on ads or whatever and I was always like reinvesting my money not spending it stupid I guess but I was but just reinvesting it into the business into more ads trying to make more money

(1:05:46) sure somebody recommended this book profit first oh that sounds interesting so who is that Mike mallwitz wrote the book right yeah somebody recommended it to me yes and uh so I read half of it that’s cool um put it on the shelf and then so that just kept on getting worse and worse Brad over like four or five years Y and this is also when I’m the guru like and I’m kind of becoming well known and I am humiliated and I’m getting these tax you know like the IRS sends you these en anytime you get a

(1:06:18) thick envelope from the IRS that’s not good there is no good envelope from the IRS and then I started getting letters from these tax collection companies like these these these companies that try to you know get you to pay them a bunch of money to get rid of your tax problems and you know I’m trying to protect my wife from this not not letting her know how bad the problem really is and that’s getting making it worse because my tax problem is getting worse and worse and my wife doesn’t know so anyway um all of a sudden I’m owing I

(1:06:51) owe like a couple hundred grand to the IRS and uh so I I start paying off my old taxes I get on an installment plan I start paying off my old taxes but I’m not keeping up with my current taxes so it just keeps on and then penalties interest fees and you know like it’s pretty it gets ugly fast right and I’m making more money trying to pay off my old taxes but you’re also paying more in taxes on that new money that you’re making and sure um so I had a uh uh they the okay we talked about lease options right

(1:07:27) yep my my wife and I and our four kids we went to Europe for three months and I was living the Instagram lifestyle like look at I’m doing deals while traveling around Europe and we were yep but my my numbers were a wreck like I was making money right but really my financial picture was not good because I wasn’t setting aside money for my taxes and so all of a sudden I’m starting to get little leans and judgments attached to my rental properties oh right and so I’m telling my wife okay we’re going to go

(1:07:57) when we get back to the States you know we’ll buy a nice house because we’ve been moving a lot and then all of a sudden we get back to the United States and um I can’t get a mortgage because I have these tax leans on my credit right and uh like oh crap this isn’t good and then I get this ballooned up to $520,000 was my what I owed the IRS and um it’s like I can’t get a mortgage and we don’t want to rent a property while I pay off the tax stuff then move again a year or two later so we we had a camper and we lived in

(1:08:39) this camper for like six months in from like July to December it was starting to get cold in St Louis and my wife our dog and our four kids in a camper um like maybe 52 2 ft long damn um trying to find a place to live so we were homeless right pretty much and I couldn’t get a mortgage to buy a house so I did what I teach I Tau I teach lease options so I I I I became that penalty box buyer right making a lot of money um so I I started contacting owners who had properties listed for rent and this is again I’m so

(1:09:22) humiliated and embarrassed cuz I’m the girl making all the money but I can’t even get a mortgage to buy a house and the more I tell this story too by the way there’s so many people that come to me people that you and I know they’re like I’m in the same boat it’s either like oh man you think that’s bad I owe $2 million to the IRS or I thought I was bad I only owe $300,000 the IRS and you owed 500 but you’ve given me hope that I can get this thing taken care of all right so yep we can’t get a mortgage and

(1:09:50) so I find this guy there’s this house it’s a long story but I I’ll keep it short um I text him I said hey can we rent your house for a few years and then buy it he’s like yeah go check it out it’s gorgeous house I won’t go into the numbers but we put down you know about 20% option deposit onto this house which means if you don’t buy the house in 3 years we had a three-year lease option agreement you forfeit that 20% you put down which was over $100,000 which is the incentive for the person that’s

(1:10:19) doing it yeah and so now okay I’m I got fire under my butt I’m going to figure this tax thing out I got 3 years to to pay this tax bill off so I can get a good mortgage well year two month 10 I can’t I I’m not there and I’m freaking out I call the owner of the property up and I say this is my situation can we convert this to owner financing so instead of me leasing it from him and he owned the house free and clear instead of leasing it from him can we do owner financing just for give me two more years and he said yeah sure no

(1:10:53) problem meaning that for those that don’t know that now the payments are going towards acquisition of the house yeah yeah okay so he’s now the bank instead of the landlord but during that entire five years I never called him once to fix anything we took all the responsibility to fix the stuff we poured a couple hundred thousand dollars into the house because I knew I was going to buy this thing I was determined we were not going to move so then the IRS finds out that now I put a deed I’m on the deed to this

(1:11:24) youell fining yes so guess what the IRS did something shitty well the IRS decided to attach a lean on that house oh so guess what the seller now has a lean judgment on his property that he’s he kind of still owns and if I decide I can’t buy it the IRS doesn’t have to vacate that lean that lean’s attached to that house until so whatever so like I knew the owner was not going to be happy about this it was a $520,000 lean on this property so I call the owner up and I I tell him listen I’m sorry this is what’s going on I knew

(1:12:07) from past mistakes that I had done the worst thing I could do right now is hide my head in the sand and ignore the problem and hope that he doesn’t find out right um I’ve done a lot of deals that have gone South but I’ve always paid my private investors back right any deal that I’ve borrowed private money I’ve always paid all my private investors back and it may have taken me a long time but I did so I understood that open communication honesty and integrity is like always do that and so

(1:12:33) he appreciated the fact that I told him what my issues were then shortly after that about the same time I got a I got a call from an IRS agent and his last name was Friend by the way and a nice guy super nice guy but he says Joe you need to come into my office like today and uh I I go go there and you go through like tons of security you get into this room and uh nice guy but he he you know I don’t want to say anything bad all right anyway um he says Joe do you realize and I’m in there shaking trying not to cry it’s like do

(1:13:11) you realize how close you are to jail I could send you to jail I could take away your house kick your wife and kids out on the street make you homeless take everything you own you’ve got to get this taken care of and fixed and I was like okay I need help how how do I do this cuz I I was trying to make payments so anyways he said first thing you need to do stop worrying about your old taxes and just get current on your current taxes after you’re current on your current taxes then we’ll put you up on

(1:13:44) an installment plan for your previous taxes now keep in mind too I can’t negotiate a settlement with the IRS I’m living in a million dooll house I’ve got some nice cars that are paid off free and clear and I’m I’m not like living on the streets in a little two-bedroom Shack like I I I can’t negotiate uh hardship the IRS is not sympathetic for you no yeah so I I I I remembered that book profit first and uh I I said I I need to start implementing this profit first so I hired uh an an executive

(1:14:18) assistant as a bookkeeper SL operations manager and I said your number one job is to implement profit first take the money away from me you you’re you just manage it all and get me current on my current taxes and then give me set me up on an aggressive pay plan to pay off my old taxes um so the IRS gave me five years I I paid off I got current on my current taxes within six months and I paid off all of my old taxes in about a year and a half or about a a year and a half or so and profit first it’s a phenomenal my

(1:14:57) favorite Business book because it’s like most of us look at Revenue minus expenses equals profit he reverses it and says Revenue minus profit equals expenses and if you do that your business will always be profitable so every dollar that came in my assistant took out 10% 15% for current taxes and then eventually 15% for old taxes and then my salary I didn’t have I can’t take any profit until I pay my taxes off and then whatever is left is expenses so I went from spending I don’t whatever 100 Grand

(1:15:30) a month on business op operating expenses to maybe 50,000 a month on Opex and I just got super aggressive with paying off getting current on my current taxes so when I finally got current on my current taxes state federal um I put myself on payroll um started being more disciplined and budgeted with this may sound like a no-brainer like some of you guys guys listening are like a duh of course like what are you an idiot yeah I was I was a big idiot and so I’m also against the clock now because I got to get my these leans

(1:16:05) off of my credit so I can get a mortgage before this time my time exp runs out with the seller I had so much put into the property I it’s our Dream forever house we don’t want to ever move but you took that time paid it all down yes get rid of things got the IRS to remove the leans and then got a traditional 30-year mortgage right before interest rates started going up amazing so I got a 3.

(1:16:34) 2% interest rate on this 30y year beautiful house it’s it’s incredible and uh finally finally could breathe yeah and uh I love it well look there are a bunch of lessons there I want to highlight a couple for people the first is be real with yourself and when you don’t know something recognize that yeah and every single one of us is even the most self-aware are totally susceptible to running a narrative internally that isn’t totally accurate and you’ve just been telling yourself some that you got to stop you you have to re-evaluate

(1:17:09) specifically the things that you think are true your core beliefs that you hold you have to re-evaluate and you have to ask your friends or mentors or somebody does this make sense uh that’s the only way that you can see some of those things the second is that that’s a really good point it’s just it’s just the the fact right I I was in a small little Mastermind group and I finally admitted to these guys I me these are guys in this group were my peers and when I told them the problems I was having that I thought nobody else could

(1:17:39) relate to nobody knew about it was like I was humiliated and embarrassed and they came around me and like put their arms around me and said Joe you’re not alone we’ve all faced things like this before we’re going to help you get through this yep and makes me want to cry like these guys came to my help yeah they didn’t give me any handouts yeah but they they helped me along this path well that was that was the second thing I was going to say is that we’ve all everybody goes through this and the

(1:18:07) number of people that are not I I don’t even know that there is a really well-run business in the world I think we all have this specifically as kids we have this illusion that businesses are run well and the fact of the matter is the deeper you get into business the more clear it is that if you look under the hood it is up and messy in there yeah with almost all businesses and uh taxes and numbers are a really easy thing for the Visionary entrepreneur to just omit and even even with us with Easy Pay Direct

(1:18:45) in in a financial space where we are a numbers company right and we’re managing other people’s numbers we have to be great at numbers uh there’s still areas where it’s a question of focus and where you put your effort and energy uh but the the the big takeaway I think for a lot of people is pay attention to taxes Al so like you got if you’re not good at the numbers get somebody who is right don’t think you can they say um don’t ask how ask who and uh Tom croll has this thing where you don’t try to

(1:19:17) fix your weaknesses you Outsource them and I I realize that I need to get it smarter people around me that are that can take care of those things and that way I can do what I’m doing best with my genius zone is marketing and making offers and teaching I love doing that I realize now the importance of the numbers and so like now it’s it’s all really really good y um and I’m the the stress that I don’t have anymore of worrying about if that stuff’s being taken care of I love this sounds really

(1:19:50) weird and obnoxious I love when my assistant tells me hey we just sent you know a $25,000 um payment to the IRS or whatever um we just paid your state taxes we uh all my employees are on payroll I don’t play the the W9 game I just put them all on payroll I don’t want to mess with um the government I don’t want to mess with them because they the the IRS is the world’s largest most aggressive debt collector they can take everything from you and they can send you to jail it doesn’t matter and when you you read these stories of

(1:20:25) celebrities y in the news that are convicted of tax fraud and evasion it is it’s they’re good at sports and and acting and movies they’re not good at but they didn’t have the people with them helping them well and I would be willing to bet that 95% or more of the people that are convicted of tax evasion were not doing it maliciously no and we just unaware no no and here’s the thing it’s getting worse because of AI the IRS is ramping up they’re auditing and and they’re going to be starting to implement um AI

(1:21:02) to go into people’s tax returns and their businesses and everything about them and they’re going to learn who are the best type of people to audit or go deeper into um and and you’re going to see there’s and especially with the rise of online income and and um e-commerce and bit Bitcoin and crypto and real estate like there there’s a lot more people starting their own agencies working from home businesses Ubers and all of this like this economy is changing there’s a lot of people out

(1:21:35) there that are not paying attention to this issue or thinking I’ll just make my way I’ll make more money to get myself out of it MH um you everybody who’s listening to this who’s not read that book profit first um needs to pick it up and just start implementing because it’s not that complicated and if you’re not good at those numbers doing that kind of stuff then hire somebody who is yeah well we’ll put that in the show notes and I think that the kind of piggybacking on that your the only way that make more money

(1:22:07) is the solution is if you are growing at a really aggressive pace and even when you’re there that’s still still a short-term solution but you have to be growing at an accelerated pace for make more money to solve a temporary tax problem meaning that you can outpace the tax problem uh but yep got to be aware of it I appreciate you sharing the story man yeah yeah I think that’s helpful for a lot of people I sure hope so because I don’t enjoy sharing it it’s Hing it helps somebody yeah it’s

(1:22:38) great uh awesome well I appreciate you carving out time man thank you Brad uh if people want to find out about you or about real estate investing where do you want to point them uh YouTube channel if you just go to YouTube do search for Joe mall I have a podcast I’ve been doing for 12 years now um called the real estate investing Mastery podcast I interview people there I also do a lot of my own self-reflection while I’m driving I’ll have my phone and I call it REI in your car nice I’ll do these

(1:23:05) episodes I just talk about things going on in real estate I love um doing YouTube videos and podcasts creating content I think that’s probably the best way for people to to find me dig it well hopefully I’ll be on that show sometime I sent you a link oh beautiful that be fun yeah we’ll talk about my own real estate woes yeah and successes we’ve had some really good ones in the last several years and I’ve had some catastrophic issues in the past man I tell you if we could summarize this too

(1:23:36) I would say never take business advice from somebody that hasn’t failed and rebounded up right because there’s so many people in the real estate world who got in after 2012 at the bottom of the market so for the last 11 years it’s been on a tear and everything they touch is turns to gold and there’s a lot of people out there that are teaching this stuff and they don’t know what they don’t know yep and you’ve got to be careful who you’re getting your advice from and it’s it’s important even in the

(1:24:06) marketing world you know it’s been like it’s it’s so easy to make money right now online in real estate people have forgotten what what can happen and what will happen again in the future and so it’s important I love talking about these mistakes because I know they’re going to help people they’re going to help somebody who’s listening and they’re going to say oh yeah I don’t know what that’s like but I don’t want to make the same mistakes that Joe and Brad have made in the past so if you’re

(1:24:35) getting advice from somebody make sure it’s from somebody that has that has that has failed and bounced back um and not just from somebody that’s always had success because everybody if you’ve been in the business long enough you’re going to experience failure and setback it happens to everybody and if it hasn’t happened yet it will does that make sense that’s my that’s so true absolutely yeah Joe appreciate the time yeah Brad thank you man love it I hope you enjoyed the episode as much as I enjoyed doing it I

(1:25:07) need your help there are three places you can find Beyond a million the podcast itself Beyond a million.com which has some cool free resources including a free course and we finally launched the Beyond a million YouTube channel I would love it if you would go there and subscribe and if you don’t want to you still would probably enjoy seeing the visual content check it out youtube.