Real Estate Investing School Podcast
Episode 123: Mastering Personal Finance in Real Estate with Todd Schwartzman
Date: January 15, 2024
Host: Joe Jensen
Guest: Todd Schwartzman
Episode Overview
In this engaging episode, Joe Jensen sits down with Todd Schwartzman, a musician-turned-tech-salesman-turned-real-estate-investor. The conversation explores Todd’s unique life journey, how critical mentorship shaped his entry and growth in real estate investing, and—most notably—his meticulous approach to personal finance. Todd shares practical strategies for intentional investing, building wealth through discipline, and offers actionable advice relevant to beginner and advanced investors alike.
Key Discussion Points & Insights
Todd’s Background: From Musician to Real Estate Investor
[00:35–04:00]
- Todd shares his life progression from a classically trained musician and songwriter to transitioning into tech sales for increased financial security.
- Entry into real estate began with exposure to colleagues in tech sales who were already investing.
Quote:
B: "So you, like, you say composing, that makes me think of like Mozart and stuff..."
A: "Yeah...I grew up training classically in music...later focused on songwriting and producing. As a musician you tend to have your hands in all kinds of different pots." [01:36]
The Power of Mentorship in Real Estate
[04:05–06:54]
- Todd’s first property purchase (in 2017, right after marriage) was guided by a mentor, setting the foundation for his investment-minded approach.
- The mentor helped him view home-buying strategically—focusing on investment fundamentals over emotion.
Quote:
A: "I had the right coach on my side. We bought [our first home] for the purpose of an investment right off the bat...Having the right person on my side...was a difference maker for me." [04:22]
Practical Strategies for Buying Investment Properties
[05:33–08:15]
- Todd sought properties with ideal floor plans, potential for renovations, maximum bedroom count, and rental capability (e.g., basement apartments, location in a college town).
- Lived in and renovated the property, then rented to students for strong cash flow.
Quote:
A: "We looked for the correct floor plan and arrangement for a future rental...Bought a house that needed a kitchen renovation, gutted and lived in it while we worked on it." [05:33]
Scaling Up and Diversifying: Out-of-State and Larger Properties
[09:13–16:07]
- After the initial “house hack,” Todd invested out-of-state through a turnkey provider—focusing on hands-off, fully managed properties.
- Structure: Upfront fee at closing; Todd retained 100% ownership. Turnkey group handled sourcing, management, and lending relationships.
- Next, he scaled into an 8-unit apartment building (with a partner), making the jump from residential to commercial financing and operations.
Quote:
A: "My motivation was I wanted to take a bigger bite of real estate...these larger size deals are just about the same amount of work as a single family home." [14:13]
- Todd and Joe discuss that mid-size and large deals take similar effort as small ones, but with magnified results.
Quote:
B: "That's one of my rules: the little deals can take up just as much headache and bandwidth as bigger deals." [15:18]
The Value of Alignment and Building the Right Team
[17:57–21:23]
- Emphasizes aligning with mentors, agents, and partners who understand and share your long-term buy-and-hold goals.
- Clarity of purpose is vital for assembling a supporting team and filtering advice.
Quote:
A: "I've learned to make sure to align myself with people who have the know-how...I've been very careful...these are people I don't take lightly to be working with." [19:14]
Mastering Personal Finance: Todd’s Key Philosophy
[21:49–30:07]
- Todd’s true passion is personal finance—tracking every dollar incoming and outgoing, likening it to tracking calories for weight loss.
- Core idea: The gap between income and expenses is your “personal cash flow” and bedrock of wealth building and investing capacity.
- He uses Tiller, a spreadsheet-based financial software, integrated with all accounts for real-time expense tracking.
Quote:
A: "I track every dollar that comes in and every dollar that goes out...the goal is to have a gap between your spending...and your income. That gap is what allows you to build wealth."[21:49]
[Software Mention]
A: "The program is called Tiller...it links all your credit cards, bank accounts, pulls everything into one spreadsheet...customize the categories and track it all." [24:43]
- Tracking is not about being frugal, but intentional: investing wisely in high-impact experiences or items, not low-impact waste.
“High Impact” vs. “Low Impact” Spending
[31:27–34:00]
- Todd and his wife categorize expenditures as “high impact” (memorable, quality-of-life improvements, like travel before their first child) versus “low impact” (clothes, fleeting purchases).
- Advocates intentional splurging on what matters, while ruthlessly cutting what doesn’t.
Quote:
A: "Is this high impact or low impact? How I would define that is, is this experience/item going to significantly move the needle of my quality of life?" [31:27]
The Psychology of Money & Lifestyle Design
[35:15–39:03]
- The wealthiest benefit most from tracking—minor habit changes can yield large sums for investments.
- Spending mindfully doesn’t mean deprivation; it means having options and flexibility.
Quote:
A: "The real flex is having such a large cash flow of excess income that you have choices, you have options. That's the flex to me, that's the ultimate flex." [37:46]
Actionable Steps: How to Start Tracking
[39:24–42:22]
- Try Tiller or similar software—track, but don’t pressure yourself to change immediately. Awareness is the key first step.
- Understand your “sacred number:” the exact amount your lifestyle costs monthly.
- This clarity drives investment goals—once passive income meets your number, you achieve true freedom.
Quote:
A: "Once you start tracking...the number you'll really want to pay attention to is your total monthly spend...That’s the sacred number on my spreadsheet." [44:12]
Notable Quotes & Memorable Moments
- "You don't need to know how, but if you know what you're trying to do, the right people will come around to show you how." —Joe Jensen [21:05]
- "Why are we so concerned about adding an extra $500 a month to our income, when in reality, we really don't care about $500 a month? If you cared, you wouldn’t be frivolously spending it..." —Todd Schwartzman [27:02]
- "We place such an emphasis on, in the real estate world, passive cash flow. But then, in our personal finance, how often are we frivolously spending $500 a month?" —Todd Schwartzman [27:02]
- "This is not about saving money. This is not about being frugal. This is about investing money wisely." —Todd Schwartzman [31:27]
- "People are sacrificing so much freedom for things they don't even actually care about." —Joe Jensen [43:25]
- "If your expenses are going up at the equal rate of your income, your investing life doesn't change very much...what progress are you really making?" —Todd Schwartzman [35:15]
Timestamps for Essential Segments
- 00:35–04:00 – Todd’s life journey from musician to real estate
- 04:05–06:54 – Importance of mentorship on first home purchase as investment
- 07:04–08:15 – Maximizing house for rental/hack potential
- 09:13–12:26 – Out-of-state investing through turnkey providers
- 13:00–16:07 – Scaling up: 8-plex, the logic of medium/larger deals
- 17:57–21:23 – Aligning with mentors and team for long-term goals
- 21:49–30:07 – Deep dive into Todd’s personal finance system
- 31:27–34:00 – Defining “high impact” vs. “low impact” spending
- 35:15–39:03 – How the wealthy benefit most from intentional tracking
- 39:24–42:22 – Getting started: actionable tracking steps and “sacred number”
Final Questions: Todd’s Personal Insights
- Dream Deal: Vacation home in a dream location; investments fund personal dream assets. [48:25]
- Book Recommendation: Atomic Habits by James Clear—small habits create big outcomes. [49:06]
- Biggest Mistake: Lost earnest money by backing out after due diligence deadlines; a lesson in thoroughness and knowing when to cut losses. [49:48–51:23]
- Purpose of Life:
“Achieve the maximum amount of personal capability that you can offer to the earth...discover and fulfill your unique strengths to their fullest within your lifetime.” [51:35]
Closing Thought
Joe Jensen closes the episode reminding listeners to “be aware and act intentionally”—a fitting summary of Todd’s approach to both finance and real estate investing.
To connect with Todd:
- Instagram: @ToddSchwartzman
- Email: toddschwartzman@mail.com
Summary prepared for easy reference and maximum value for listeners and non-listeners alike.