Real Estate Investing School Podcast - Episode 231: How to Maximize Every Dollar in Real Estate

Release Date: January 27, 2025
Host: Joe Jensen
Guest: Todd Schwartzman

Introduction

In Episode 231 of the Real Estate Investing School Podcast, host Joe Jensen welcomes Todd Schwartzman, a multifaceted individual who has journeyed from being a musician to a tech salesperson, and finally, to a successful real estate investor. The conversation delves deep into Todd's unique approach to maximizing every dollar in real estate, emphasizing the importance of personal finance management and strategic investment.

Todd’s Journey: From Musician to Real Estate Investor

Todd begins by sharing his diverse background in music. He describes himself as a "musician turned tech sales turned real estate," highlighting the various phases of his life dedicated to different passions.

Todd Schwartzman [00:15]: "Yep, that's right, I own the house..."

He elaborates on his musical endeavors, detailing his classical training in piano, his foray into jazz, and his extensive experience in songwriting and performing within various bands.

Transitioning from music to tech sales, Todd explains how this shift introduced him to a new professional environment where he began to explore real estate investing.

Todd Schwartzman [02:51]: "I started to become just exposed to it through the people I started to hang around in the sales world."

Entering Real Estate: The First Investment

Joe inquires about Todd’s initial foray into real estate, to which Todd credits a trusted mentor for guiding him through his first property purchase.

Todd Schwartzman [04:05]: "There was, and that was because of an awesome trusted mentor I had on my side helping me buy this house with an investment mindset."

In 2017, Todd and his wife purchased their first home not just as a personal residence but with a strategic investment perspective. They focused on features that would enhance future rental potential, such as an optimal floor plan and location.

Todd Schwartzman [05:33]: "We looked for the correct floor plan and arrangement for a future rental..."

This intentional approach allowed them to renovate the kitchen while living in the house, ensuring it was ready for tenants once they moved out.

Expanding the Portfolio: Subsequent Investments

Following their first successful investment, Todd diversified by purchasing out-of-state properties in Tennessee and Florida. This decision was facilitated by a reliable group that managed the properties on the ground, making out-of-state investments more hands-off and efficient.

Todd Schwartzman [09:13]: "The next investments were out of state investments."

For these deals, Todd paid a one-time upfront fee included in the closing costs, ensuring he remained the 100% owner without entering into partnership agreements.

Todd Schwartzman [11:56]: "I'm, I'm 100% owner, so it's not a partnership deal."

Subsequently, Todd escalated his investments by acquiring an eight-plex in Utah with a partner, marking his entry into larger-scale residential investments. He highlights the benefits of aligning with professionals who share his investment mindset, especially in the commercial sector.

Todd Schwartzman [14:13]: "I wanted to take a bigger bite of real estate... it's more of a science with the commercial side."

Maximizing Every Dollar: The Importance of Personal Finance

A significant portion of the podcast focuses on Todd's meticulous approach to personal finance, which he considers the foundation of his real estate success.

Todd Schwartzman [21:49]: "I track every dollar that comes in and every dollar that goes out."

Using the software Tiller (24:43), Todd links all his financial accounts into a customizable spreadsheet, categorizing every expense to maintain a clear picture of his financial health.

He draws an analogy to fitness tracking, comparing financial tracking to monitoring calorie intake and expenditure to achieve a "calorie deficit" equivalent to building wealth.

Todd Schwartzman [23:30]: "The goal is to be in like a calorie deficit... What do you really need to do to change."

Todd emphasizes the importance of understanding the "gap" between income and expenses, advocating for intentional spending on high-impact items that significantly enhance quality of life while minimizing frivolous expenditures.

Todd Schwartzman [28:40]: "It's about the fact that you're practicing the habit of knowing where your money is going..."

He introduces the concept of High Impact vs. Low Impact spending, where high-impact purchases are those that significantly improve life quality, while low-impact ones are deprioritized or eliminated.

Todd Schwartzman [31:24]: "We say, is this experience item, thing going to significantly move the needle of my quality of life?"

Aligning with the Right Team

Todd discusses the critical importance of surrounding oneself with knowledgeable mentors and professionals who share the same investment philosophy.

Todd Schwartzman [20:21]: "Align myself with people who have the know-how... These are people that I don't take lightly to be working with."

He stresses that a clear purpose and goal attract the right team members who can facilitate achieving those objectives.

Todd Schwartzman [21:05]: "Just make sure to get the right people on your team that know your goals..."

Final Questions: Insights and Personal Reflections

Towards the end of the episode, Todd answers several personal questions, providing listeners with deeper insights into his philosophy and future aspirations.

1. Dream Deal

   Todd Schwartzman [48:25]: "I would love to eventually own... a vacation home in just a dream type spot."

2. Pivotal Book

   Todd Schwartzman [49:06]: "Atomic Habits. If you pick one book in all of, you know, personal motivation, I feel like that would be it."

3. Most Expensive Mistake

   Todd Schwartzman [49:48]: "I lost some earnest money on a house deal because I didn't do enough due diligence and had to back out."

4. Purpose of Life

   Todd Schwartzman [51:35]: "The purpose of life is to achieve the maximum amount of personal capability that you can offer to the earth."

Key Takeaways

• Meticulous Financial Tracking: Understanding every dollar spent and earned is crucial for building wealth and making informed real estate investments.
• Strategic Investments: Starting with intentional purchases that serve both personal and investment purposes can lead to sustainable cash flow.
• Align with the Right Professionals: Building a team that shares your investment philosophy accelerates success and mitigates risks.
• High Impact Spending: Prioritizing expenditures that significantly enhance quality of life while eliminating unnecessary expenses is vital for financial freedom.
• Continuous Learning and Adaptation: Emphasizing the importance of mentorship and adapting strategies based on experiences ensures long-term success.

Notable Quotes

• Todd Schwartzman [00:15]: "I track every dollar that comes in and every dollar that goes out."
• Todd Schwartzman [04:05]: "It definitely was not a mindless purchase. Like, we bought it for the purpose of an investment right off the bat."
• Todd Schwartzman [21:49]: "The root of this is personal finance. It's where I've put money into investing."
• Todd Schwartzman [31:24]: "Is this experience item, thing going to significantly move the needle of my quality of life?"
• Todd Schwartzman [51:35]: "The purpose of life is to achieve the maximum amount of personal capability that you can offer to the earth."

Conclusion

Todd Schwartzman's approach to real estate investing underscores the symbiotic relationship between personal finance management and strategic property investment. By meticulously tracking expenses, aligning with the right professionals, and focusing on high-impact spending, Todd has successfully maximized every dollar in his real estate ventures. His insights offer valuable lessons for both novice and seasoned investors aiming to achieve financial freedom and build a robust real estate portfolio.

Connect with Todd Schwartzman:
Instagram: @ToddSchwartzman
Email: toddschwartzman@mail.com