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Action Academy | Millionaire Mentorship For Your Life & Business
The Step-By-Step Playbook To Knowing What Role YOU Play In A Real Estate / Small Business Partnership
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Yo, yo, what's up? Today's podcast episode is the episode that you need. Whether you know it or you don't. It is the reason that you're not submitting the offers that you know you should be submitting. It's the reason that you aren't making progress. It's the reason that you're in analysis paralysis. It's the reason that you're looking at businesses, you're looking at real estate. You're not making offers, you're not making progress. It's been a year and you're wondering what the hell is wrong with you. That's today's episode. And the question that we're answering in today's show, ladies and gentlemen, is how do I find a partner? That's the surface level question. This was asked in the Action Academy by a person that is analyzing small businesses. And he goes, I need an operator to run this business for me. What do I look for in an operator? What do I look for in a partner? And I said, whoa, whoa, whoa, let's slow down, let's back up. What are you bringing to the table? So more importantly, more importantly, ladies and gentlemen, is what role do you play in partnership in a real estate transaction, in a small business transaction? Because I went on a tangent in this. In the Action Academy community, our back end community where we teach people how to buy real estate, small businesses, this guy asked this question, which was a wonderful question, and I went off on a tangent and I said, what a wonderful podcast episode to post for 3000s of you guys to get the answers that you need. Because what we realize is the reason that he's not submitting the offers that he knows that he should be. This is not a dig on him. This is a wonderful question. The reason that he's not submitting the offers is because he is actually unclear of what value he brings as an investor or as a business owner. He doesn't understand what value creation he brings to the table for the business, for the real estate. Okay, and this is one of the biggest reasons that you guys actually aren't taking action. It's a hidden obstacle that nobody talks about, and that's what we're getting into in today's podcast episode. Guys, I've never heard a podcast episode done on this. I listen to a lot of podcasts and I'm about to go really in depth here. I'm going to start with the real estate because it's a little bit more simple about how you figure out what role you play in the partnership. And Then we're going to go into small business, which is a bit more complex and it's got a lot more nuance. So whether. Whether you guys are on each or other side of the fence, there's going to be a lot of value. So if you love this podcast episode, if this genuinely helps you, if this is the thing that gets you over the roadblock to submitting Lois, to submitting offers, please, please, I beg of you, share this with one person, just one person, two people that you think would find value from this. This could be the thing that changes their lives. So if you're driving to work, you're driving back from work, and you listen to this, you go, oh, my God, this is it. Send it to a friend, send it to a coworker, send it to a fellow investor. So without any further ado, let's get into the podcast. As I said, we are going to start with real estate investing, and then we are going to go into small business. Now, with real estate investing, what I will do is the opposite of the normal format of the show. I will start with the core concept, I will start with the idea, and then I will provide relevant personal stories from within our community, from within my personal life, from within people that I know, or where we execute this strategy. Okay, so real estate first, then small business. And I will preface this episode with this quote. How can I find a great partner? How do I find a rock star partner? Is the wrong question to ask. Okay, the right question to ask is, how do I become a rock star partner? How do I become the rock star? Because when you become the rock star, you attract the rock star. Because here's the real. A lot of you guys aren't rock stars, comma, yet. And you're asking the question, how do you attract a rock star? But the thing is, if you have a rock star that just comes to you and it's just handed to you by a magical godly platter right in front of you, they're not going to recognize you as a fellow rock star. So they're not going to work with you. They don't want to work with you. So that's what we're going to talk about. In real estate, there are three roles that you can play in partnership, okay? So you need to be the knowledge. Need to be the money, or you need to be the hustle. The knowledge, the money, or the hustle. This was the deal triangle coined by my buddy Brandon Turner back in his bigger pockets days. Rip bigger pockets. By the way, guys, if you David Green's out, Rob's out, and they got bought out by private equity. So I've been holding off on my bigger pocket shit talk, but dear God, guys, I'm gonna have David on this show and we're gonna kind of get into it, but what a ride. And on that note, Dworkin, who founded Bigger Pockets, completely out of Bigger Pockets. Brandon is completely out of Bigger Pockets and he got bought out. David's completely out of Bigger pockets, he's getting bought out. So it's about to be a journey, guys, so stay tuned for that. Anyways, Brandon had a wonderful deal triangle where it's the money, knowledge and hustle. One of these skill sets is required to enter the game. It's the ticket and price of admission. Two are required to master the game and become an expert at it. So, for instance, if you are listening to this today and you have hundreds of thousands of dollars of capital, whether it's in your IRA or in liquid cash or in stocks that you can liquidate, then you have capital. Cool. Now what you need to do is you need to go and acquire the knowledge, right? That's what you need to do. You don't need to be the hustle ever. On the flip side, the other majority probably of this podcast listening ship maybe has a little bit of knowledge, but they don't have the capital. A lot of you guys that I listen to have a couple of properties under your belt. You work really hard in your job, you make good money, you save money, you invest it into property over and over again, especially single family real estate and short term rentals and stuff like that. And the irony of this is that your biggest bottleneck is that you both don't understand how to scale with other people's money and you're also terrified to scale with other people's money. So what you're lacking is the capital. So if you have capital and you want to invest in real estate, your number one primary focus is in finding your who's, your who's, not the hows, the who's. Because by your partnership of people that are seasoned operators, that is where you learn and you gain the knowledge through partnership and as an LP with them. Start off as an LP a few times and then you can eventually become a GP later down the road if you want to. But that is where you more so introduce the the hustle. You should be spending a disproportionate amount of your income into communities, into masterminds, into private events, into country clubs, different real estate areas where you are just building up your Rolodex of real estate investors for you to join a community. You're not joining a community to learn the tactical stuff. You're joining a community to meet the people that have put in their 10,000 hours in their 10 years and you're, you're hitching your wagon to their horse. In the flip context, for the person that doesn't have the capital, your job, your primary focus only is to become a deal. Finding machine like this is the only value that you bring to the table. Nobody that has capital is going to bring you on if you don't find the deal like so. Say you have person A, person B, person C. Person A has the capital, person B brings the deal to the person A with capital and your person C and you're like, oh, well, I'll operate it. I don't know what I'm doing and I don't know what I'm talking about, but I'll learn from you. Person A to do it, person B is going to take your spot. So if you just shift and narrow your focus on each side of the playing field. If you don't have capital, you need to put all of your time, energy, effort and capital into growing the skillset of deal finding. If you do have capital, put all your time, energy, effort and capital into finding your people. Tldr if you have no capital, if you're starting from zero today, hustle is all you have. You better be ready, willing and able to work your effing ass off. And if you don't, you will be beat by the other person that's hungrier than you. This is the rocky cut scene where you have to put in your thousands of hours of cold calling, of mailers, of texting, of networking, of relationships, of door knocking, of driving for dollars, of doing whatever it takes to get these deals under contract. Because that's a skill that compounds and you're going to keep that skill for the rest of your life. Okay? I remember back into my cintos days when I was working my corporate B2B sales shop. I was door knocking and cold calling constantly for four and a half years to all these different business owners. And that's where why I'm able to have that skill set today so you don't lose it. It compounds to land the plan on real estate investing. My friend Hayden is a wonderful example of this. He had no capital and so what he did was he hitched his wagon to people that did have capital. He's like, what's your buy Box. What are you looking for? He'd go and find the self storage facilities. He'd go find the house, houses that they want to flip. He'd go find the people that needed private money and then he would bring it to the person as a private money lender and then he gets equity, he gets a cut. He got like a 200 pad self storage facility. He got like 1020 equity for doing nothing. Because he brought the deal and he's operating the deal. He was person B in that situation. Okay, that's Hayden F. Personal friend I know in Action Academy community. Now let's shift over into small business. This is a lot more nuanced and you guys are going to want to take notes and you are going to want to listen to this probably two or three times because this is very, very, very important. Small business has much more nuance. It's got way more levers. That's why you only need one small business to replace your job. So whereas you are going to be buying, you know, maybe $5 million of self storage, $10 million multifamily on leverage, and doing all these creative finance strategies to buy the commercial real estate that you need for a small business. It's the same amount of effort and time for you to buy a 2 million or $3 million business that has enough seller discretionary earnings, SD, aka take home pay for you as the business owner to get you out of your job as it would take for you to do a 200,000 or $300,000 business. Same process and doing the other one is going to get you out of your job immediately with one purchase, one acquisition. And then that's what Carly and Alex did in our community. They bought two businesses on the fricking same day, got them out of their jobs, both of them. So in small business acquisition, there's actually a perverted thing that people talk about all the time that is not as easy as it sounds, which is, oh, I'm just gonna buy a business and hire an operator. Right? That's what, that's what everyone talks about. All the business buying accounts. They're like, oh yeah, you just, just buy a business and hire operators for the businesses. And they act like that's the simplest thing ever. That is the most complicated part of business ownership. Not even buying the business, but finding the operator. So this brings us full circle to the question that was asked to this guy in the group is trying to buy his first business and he goes, how do I find an operator? All right. First question that I asked him was, have you hired people before? You know, benefit of the doubt. Maybe you have management experience. Maybe you're in your corporate job. You manage people, you hire people, you fire people, you inspire people. People. But he said, no, I do not have any management leadership or hiring experience. I've never hired a person in my life. Cool. Got it. 99% of you guys listening to this podcast, probably that if you're trying to buy your first small business, you haven't hired somebody. Maybe you're a rock star IC individual contributor in your business or the company that you're working in today, but you haven't directly hired people before. Why do you think it'd be a good idea for you to combine two new things at the same time? Never combine two new things at the same time. I learned that from Jay Scott. He goes, if I'm investing in a new market, I'm gonna not do a new market and a new strategy. I'm gonna do a strategy that I already know just one new thing at a time. So if he's gonna buy multifamily, yes, he'll buy multifamily in a new market, but he's not gonna buy self storage in a new market. Two things. Two new things at the same time. Terrible idea. So you're already doing the new thing of buying a small business, basically private equity. M and A. Right. So that's new thing number one. Why would you. New thing number two, which is hiring a key partner that is going to have equity and profit share in your business as your first hire ever. You haven't even hired a virtual assistant. You haven't even hired an executive assistant before. This is the number one thing that people talk about that I think you will be doomed for failure if you tried to do this, if you attempt to do this. All right, now, I'm not going to be doom and gloom here. I'm just giving you guys the real answers, like the real reality of the situation. And then we'll share how to a better way to do this here moving forward. So he says that he wants to hire an operator. Then he says, I haven't had experience hiring an operator before or hiring anyone before. And I say, okay, cool. What are you bringing to the deal? Okay, this is a question that every single person that's buying a business needs to ask themselves. All right? And this isn't me poo pooing on anyone. This isn't me shitting on anyone. This is me just saying you need to look in the mirror and ask yourself the question or where Am I lethal? And if you cannot answer this question, you are not yet ready to buy a business, my friend. Okay? You need to become better. That's the honest truth. You need to become better. There are three roles, three positions that you can play in a business acquisition that is going to be, you are the top line CEO, you are the bottom line CEO or you are the capital partner, all right? You are the passive investor. Those are the three roles that you can play in a business. And I would say passive investor is air quotes because I'll talk about a deal that I'm attempting to do. I may do it, but it'll show an example of what I'm talking about. So top line CEO means that you have sales and marketing experience. You are lethal when it comes to getting eyeballs on an offer, on a business, on a service. You're like, man, I can come in here, I can look at this Google account and maybe you don't know the technical stuff, but you know the direction it's supposed to go. You're like, I'm going to polish up the website, I'm going to polish up this cta, I'm going to polish up the landing page. I'm going to get us lead magnets, I'm going to get us a better triple B rating and domain authority on Google. We're going to run Google Ads. I'm going to go get more Google reviews and have an incentive program and an affiliate program and a referral program. I'm going to build this sales team out and we're going to drive traffic to this thing to the cows come home. All right, that is top line CEO work. So that is me. I'll start there. I am lethal in sales and marketing. So would I buy a small business that is already crushing in sales and marketing? No. Okay, Brian, why? Because there's no value add there. Just like in real estate. You buy the ugly house and you fix it up in the nice neighborhood. Same thing when it comes to business. You buy a business that's not broken, but you buy a business that's succeeding in spite of itself. All right? Succeeding in spite of itself. So you see a business that's doing a million dollars top line or 2 million top line and they have a crappy website and almost no marketing. It's all word of mouth referrals and organic growth. You know, maybe that's not going to help their enterprise value that much, but what a cool value add opportunity for you as the top line CEO to come in and save the day, Right? Okay. Maybe not save the day, you don't want to save a business that's declining, but you can really pour gasoline on the fire. You can be the rocket fuel that takes it and really multiplies the enterprise value. Now the inverse is going to be your bottom line CEO. So this is going to be the person that comes in where you are a spreadsheet and data junkie. You know, your number is like the back of your hands and you look at people that don't know their details and their data and their metrics and you're like, what are you doing? Long story short, tldr, you can do Excel without a mouse. Okay? Like this is a lethal skill, people, oh, I'm not good at talking to people. I can't buy a business. No. If you are heavy analytical engineer brain, a medical brain, and you're like, dude, I live in the data, like that is a lethal skill that is operational. You are a bottom line CEO, so you are the person that needs to buy a business that has strong sales and marketing, strong top line demand, but they are fricking going crazy in the back end operations. They're succeeding once again in spite of themselves because they're so good at sales and marketing and product, but they're awful organization. And you're like, dude, I can tie all of this back end up, I can clean this data up, I can do automations and integrations and email marketing and all this stuff in the back end that will double the enterprise value of the business. All right? And the last person that is the most rare is the person that just has hundreds of thousands of dollars laying around and then they can go buy the business and be able to place an hungry operator in there. Candidly, yes, in my position right now, where I'm at, I could technically do that. So I can say somebody brings a deal to me and they're like, hey, I want to run this deal. If the deal looks good enough, I can be the capital partner for the deal for a large minority equity position and then that person can run the deal for me. Okay? So what happens is a lot of people are trying to find this operator, right? But they don't have the capital. So here's the kicker. If you do not have the capital, if you don't have hundreds of thousands of dollars of dispos net free income post tax that you can invest into a business, you are the operator, okay? Get that out of your head that you just hire an operator. You're the operator. You've never bought a business or ran A business before. So for your first business, be the operator. Make sure there's enough SDE seller discretionary income coming in for you to not build yourself another job. Make sure there's enough margin for you to hire others beneath you. But you get in there and at minimum, six months you are committing six months to run this fricking thing. Don't buy a business while you're working your job and be like, I'm going to run this business on the side. Awful idea. Doomed for failure. You're not going to learn what it takes to be a business owner in scale because it becomes easier and easier and easier with reps and reps and reps and reps. Okay, so back to the original question, right? How do I find an operator for a business that I'm trying to buy? He does have capital. All right, so he's like, I do have capital, but I know I've never hired somebody before. Got it? Here is what you do. Here is the answer to your questions. Okay? You find the partner first. You go and you network your ass off, and you decide first and foremost, what are you on a disc profile in an enneagram test. It's E, N, N E A G, R A M. I think. I'm not a speller. But enneagram and disc profiles, you should know both of those for yourself. Not the free test. Go do like the paid Tony Robbins test. You should know what you are in a disc. Are you a high id, which means you're a people person, or are you an sc, which you're a systems and compliance and operations person. You need to know that, you know, if you're going to be a top line or a bottom line CEO, you know what you bring to the table. And now you go find that person and that partner that is complimentary to your skill sets. I will say this again, and please, please take my advice, because you will save yourselves millions of dollars if you are a people person partnering with another people person that you like in your business, you will be doomed for failure. If you have two people, one of you is not needed. I'll repeat. If you have two people, one of you is not needed. You do not partner with the person that you love the most. And you're like, oh, my God, we're boys, we're best friends. Oh, my God, we can hang out all the time. No, you partner with somebody with complementary skill sets. Okay, so you're saying, I want to buy a business. Here's what I bring to the table. I'm great at Sales and marketing. I need somebody that's an operational wizard that does excel without freaking mouses, that can look at systems and processes and they get really excited about building out SOPs and structures and building out internal core team stuff like that. Like that is the person that you partner with. Now what you do before you submit, Lois, before you're looking at businesses, you go find that person. All of your time, energy and effort is spent into finding that partner. Because now you are clear of what you bring to the table as you are clear how you are a rock star, which will allow you to attract the other rock star into you. Okay? So once you do that, then together you guys decide where are you going in the next five years, Are your goals or your values, are your core missions aligned together? Okay? Now at this point, that's when you go together and you guys start looking for businesses and what a wonderful pitch and presentation that looks like to brokers, to sellers, to all of these different people that are involved in the deal finding process. Because now you have a complete package. You have the peanut butter, you have the chocolate together you're a mother effing Reese's cup. Okay to apart, they're okay together. They're legendary. And now you go take down the business and you have the complete package to where you guys can do it together. Okay? Now do you guys need to be partnered on every single business moving forward? Maybe not, that's maybe not the case, but at least you'll understand and learn the process. So you're doing it through partnership and equity. You're not hiring the person as promised. Here's two examples of this. Carly and Alex. In our community, Carly is the sales and marketing. She found the deal, she brought the deal, she negotiated the deal with the seller. Alex had five years of staffing and training and hiring experience. So he was more so the back end operator of the business. So Carly was the top line, Alex was the bottom line. Now there's some overlap, as there always is. It's, it's good to have a little bit of balance of both, but you just need to know what seat you sit in, what role you play. So they bought two businesses together on the same day coincidentally. And both of them became financially free with one transaction and both of them replaced over a hundred thousand dollar salaries. Okay, I will link their show episode in the description. That's why I talk about our community so much, because this is what the hell we do. Numbers don't lie. Another partnership in Action Academy Community is Vets and Valor with Calvin Blankenship. And Jordan Griffey. So Jordan was also on this podcast he talked about when he bought a business and his operator quit the first day. So that goes to show how difficult hiring and absorbing current operators are. But they have complementary skill sets. Calvin's going to be the front end face of the company, sales and marketing. Jordan's going to be the operator of the company and they're going to go buy hundreds of millions of dollars of businesses together and bring in vets to be the operators. So that's another thing that Jordan thrives at that I'll do another podcast episode with him on where he goes and he finds operators and trains operators to hire, not necessarily partner with, but that's his skill set. That's what he brings to the table. So I will probably also partner with Jordan to buy a business in the future at the end of the day. In closing real estate, yes, you could be kind of passive with your investments, but don't expect to have that 10 to 20 to $30,000 a month that you're looking for within the two year time window. The only way you do that is through active effort. All right? So that's why we say we help you replace 10 to 20 thousand dollars in cash flow. It may be net free cash flow, but it's not passive income. Passive income comes with time and time and time and profits and people. All right, Reps in the game. I am significantly more passive in Action Academy this year than I was last year because we go by one more day of way. Like, how do you hire really smart, capable and confident people to take over different roles and responsibilities? I pay $400,000 in payroll, okay, for me to have a little bit of passivity. So, you know, take that with a grain of salt, right? Don't be seeking passivity. Seek freedom. Because buying that business will get you your freedom. And then you will learn the skills to be able to elevate, delegate and automate. Those are million dollar, multimillion dollar skills individually that will actually yield your passivity when it comes to small business. And it will do it fast. Now, you can do this all slowly through buying real estate slowly over time or doing whatever like buying businesses slowly over time if you want to. But my hypothesis, because you guys are listening to the show, is you want to do this within a year or two. So if you're still listening to me 25 minutes deep and you're loving these episodes, that is what we do in our company. Like our business is literally all the stuff we talked about today that is the Action Academy community. If you are the person that has the capital and you're looking for vetted operators, come on in, the water is fine. We have your operators. If you're the person that doesn't have as much capital, but you're hungry and you're ready to rock and you're looking for the mentors, you're looking for the people to find the deals for, come on in, the water's fine. We have both. We have capital partners and we have operators within the company. That's why we're able to print out all of these success stories that we just talked about. We help you buy small businesses and large commercial real estate deals. If you're interested in that, go in the show description, click the link, book a call. It's directly through our website. It takes you directly to the community Director Caitlin. She is the president of the company. She will walk you through what membership looks like. In closing, the TLDR of this episode is in the very beginning in real estate Money Knowledge Hustle. Pick one, enter the game. Pick two to master the game and become an expert multimillionaire in the game. Okay, when it comes to small business acquisition, are you the top line CEO or are you the bottom line CEO? Do you have experience in hiring? If not, then you need to partner first with the person that's complimentary to your skill sets and then you pursue the acquisition. Okay, you don't hire the operator. You pursue acquisition with the partner that complements your skill sets. This is a multi million dollar podcast today, guys. I hope that this helps. If so, I will be speaking with you guys shortly within our community. Baby, let's rock and roll. That's where the rubber meets the road. Talk to you to.