Aug. 11, 2022

Real Estate Investing Habits With David Richter


 David Richter is an active real estate investor who helps others close deals. He has been essential in closing over 850 deals over the last 7 years, including wholesale, turnkey, brrrr, owner finance, rentals and lease options. While growing his business from 5 deals a month to over 25 deals a month, he realized that as much money was coming in as it was going out the door. With the unique opportunity of being in every seat as a real estate investor, David found his calling in the company’s finance seat to help businesses see where their money really went. He has helped real estate companies completely turn around from going out of business to building cash reserves by using Profit First Financial’s cash flow system. His goal is to completely transform the Real Estate Investing industry when it comes to how real estate investors view their finances. Today David teaches us some useful habits regarding real estate investing

Transcript


 Josh
 Good day, fellow dealmakers. Welcome to the deal scout man. The purpose and mission of the show is to put deals and deal makers together. I created a show called the deal scout to go out and find cool people. Cool deal makers, and then cool deals. On today's show, we're going to have a conversation with David. Who's going to talk to us about making more money, especially in real estate and keep it more money, David, welcome to the show. 


 David
 Thank you so much Josh. It's an honor to be here. Yeah, 


 Josh
 Dudes. All right. I kind of gave a Let the cat out of the bag just but why don't you tell us about who you are and what you do? 


 David
 Sure. My background is real estate investing been in that for 10 years, been a part of already 851 deals between turnkey fix and flip wholesale whole tale. If you don't know what those are, it's just different exit strategies in the real estate world, other than just your typical buying and selling of houses. I've seen a lot of deals like that held rentals before now I own a fractional CFO company because I was in that world for so long, so many saws. Many of my friends struggling with money and their cash as entrepreneurs because they all hate that side of the business and they're making a ton of money, but everyone's broke. I wanted to create a company that would actually help people, not just be the entrepreneur who was making money and feeling broke, but is actually someone who was making and keeping more money as well too. 


 David
 That's what I'm doing now with simple CFO. I'm also, if you've heard of the book profit first by Mike Macau, it's I wrote the book profit first for real estate investing it's behind me. I actually getting out there and helping real estate investors and we help other entrepreneurs too, but really focused on the real estate investing world. That's me in a nutshell, in a minute nutshell, 


 Josh
 That's been a nutshell. Also, so as you're doing this, man, you wrote a book now did Mike and you guys co-write it together. Did you know, go through this whole? 


 David
 Oh no, no. I, yeah. Everyone asked that I'm like, no, I wrote a hundred percent of this book because he wrote his book and he said, you could take 10% of this if you want to and stick it in your book. Like, no, that was out the window. I, I wrote mine from cover to cover and I, what I did with him was I made a deal with them. I actually bought the intellectual property from him that now I own profit first for real estate investing. So there's a deal and paid. And that's because of my background. I saw the need for the re in the real estate investing world. It's very different than what his book talks to the entrepreneurial audience in general. It's very, service-based where real estate is asset based. You buy a lot of assets, you have them under management or you're, you're fixing and flipping them. 


 David
 I had to get that book out there, but no, I wrote a hundred percent of the book, read it on audible, and all that stuff too. It was, it's a totally different world. Like if you're in the world of making deals and then you go write a book, it's a totally different animal. 


 Josh
 So let me ask you this question. You wrote a book that's brutal in itself, right? The process of writing books, not easy. 


 David
 No, no, it is not going through it now. It was a, it I'm glad that I had someone like Mike, who I could go to and say, how have you done it? He gave me access to the people in his life that helped him get there. I went through a whole book writing like 14 week intense, like it wasn't a webinar, it was more of a masterclass going down deep with a person that helps him write his books. She's available for anyone who wants to write a book. She just released a book to her name is Aja Harper. She wrote a book of like, if you want to write a best-selling book, this is how you do it. I w that was a great experience, but if I wouldn't have had that, it would have been 10,000 times harder to write the book, because she basically broke it down from the beginning of like, what the outline to all the way, the end in the marketing, like once it's already completed. 


 David
 That was just, that was a God saying of having that whole process. 


 Josh
 Yeah, super cool. Now, I, I worked with a few coaches to kind of help me with my first book. I actually had a few coaches turned me down because we run an impact show called unsensitive advice for men. Some of the stuff was actually too explicit. They're like, okay, this is cool, but not for us. 


 David
 That's great. 


 Josh
 In the process of writing the book, you wrote it, and then you read it, which was harder. 


 David
 I would say writing it for me was the easy part. I scheduled an hour in the morning and an hour at night, and tried to get at least 1500, 2000 words a day. Just pouring out all the words on the page was easy, but it was the editing and reading it from there. Like the editing, writing, it took me three months editing took me six months, and then it was like another six months to market it and get it out the door before launch. That whole process, the writing process for me only took three months, but it was the whole backend of reading. It rereading it 50,000 times. That was definitely the harder part for me. 


 Josh
 Yeah. There's no way I can do that. Absolutely. Yeah. 


 David
 It was nuts. Yeah. It's a different world. Like I said, it's a totally different animal. 


 Josh
 It's a different world. In the process, writing the book, get anything out there specifically for real estate. Now, Mike did a great job at kind of entrepreneur in general, right. In talking about his plan U S strategically real estate investors, right? Yep. What if you're looking through his book and then your book, what, was there any clashes, right from generalist real or entrepreneur to specific real estate investor, where there any clashes of the Titans? 


 David
 What couple of the biggest clashes was number one, he says to like open up a bank, like in a different place to make your money harder touch. It's like, cause profit first, the whole system is making sure that you're keeping the money and it's using the entrepreneurial habits that you already have. You don't have to become this financial advisor to keep more money. You just have to know what to do with it when it comes in, because you're going to manage cash as an entrepreneur, even if you're a solopreneur. He taught, like set it up at a different bank in the real estate world. There's enough already working against you. That I'm like, if you don't set it up at a different bank, have someone there that's holding you accountable. You're not transferring the money all the time, back and forth and just playing the shell game. 


 David
 That was one of them, another one where we kind of butt heads just is the real estate investing world. The rhythms like Mike talks about doing your finances two days a month, the 10th and 25th. Like in the real estate investor world, like you could be closing a deal a week, a deal a day. It's like, you need to make sure that you're managing the money as it's coming in. So, okay. If a deal is closing this week, like let's do it once a week or maybe once every other day, depending on what the, the deal flow that you have, or maybe once a month or once a quarter, if you're just doing this on the side, or you're just, you have a couple rentals here and there it's like, you don't have to follow that specific model. You just have to make sure you're doing it consistently on your timetable. 


 David
 That was another one as well, too. 


 Josh
 Super cool. Yeah. Cause in real estate transactions, you can't really plan for when the deal comes, the deal comes and you got to say yes. Right, exactly. 


 David
 You don't know when it's always going to close to. Cause I don't know if you've ever had a real estate deal or done real estate and it's like, oh, it's supposed to close on the 28th. It's like three months later and it still hasn't closed. It's like, you have to be careful about that too. 


 Josh
 Yeah. You come from the background, why don't you give us your background? Right. Let's let's walk through, not, let, let's fast forward to two parents fell in love. Then they had, 


 David
 I was like, how bad, how far back do you want to go? But I was actually college. I was given the book, rich dad, poor dad in college by a good friend. That was it, you know, game over. I'm never going to think the same way again, of go to school, get a job, work for 40 years. So that's what unlocked my mindset. I actually started on the side during nights and weekends working with a real estate investor in the local area that I was cause I wanted to jump into real estate after that and did my first deal on the side to where I fixed it up, rented it out, like I, it was an amazing deal. Put a super tenant in there that cash me out six months later with a loan, it was just, it was a great deal. I started working with this other investor, worked with them for five years and saw that company grow to like from five deals a month to about 30 deals a month. 


 David
 Were doing like 300 deals a year at our highest point. I got a lot of experience there. That's what, that was my background in real estate investing from there. One of the last seats I sat in was the finance seat. I saw that was where I got to know more about like how a business really should run and how we should run from the numbers and how a real business owner knows those numbers. Once I knew those numbers, it was pretty sad. Like were doing 25 deals a month, but were bleeding money every month. It's like, it would be cool to go out to an event, ? Like were one of the big dogs there. We were it's like, were one of the ones at a real estate mastermind who was doing like 300 deals a year that puts you in the top 5% of the room. 


 David
 At the same time, I'm like, we're not like we're not clearing anything. We're basically spending as much as we're making. And it was just, it was ridiculous. That's where during that time I got the taste of like, I think this might be happening more because in those places you hear what has happening behind the scenes rather than what's just up on stage. I knew it was an epidemic that so many entrepreneurs investors make the money, but they don't know how to keep it. They're just, they feel broke all the time. That's what kind of launched me. That was the first catalyst of like, I think this could be an opportunity to help people. There were several things that happened from there, but I'm not sure how far down do you want me to tell the whole story of like what got me to where I am today and why actually helping the entrepreneurs, Josh. 


 Josh
 Yeah. Cause I think that's important, right? When you, when you, when we do business, right, you might do a deal here and there for someone. When you're like me, I like to focus on a relationship. If I'm going to invest in a relationship, I want to do, a hundred deals with that person over our lifetime. I want our kids to grow up. I want, I want to do a lot of deals rather than the turn and burn of a new deal and a new deal maker. Right. I want the lifetime value of my relationship to be long. With that, people do business with people they know like and trust. I'd like to hear that opportunity of hearing your story and then for my audience as well. So go for it, man. Time is yours. 


 David
 I was going to say, cause I could keep going. Cause then from there after five years working with them, like something had to change. There wasn't, there wasn't enough coming in for the business. At that time I had done deals on the side and like the company was really good to me. They let me buy deals from them. Like I was able to either wholesale them or rent, put rentals up. I had my own little rental portfolio as well, too, which was awesome. I sold everything and moved across the country after five years up there. Cause I wanted to, like we had some financial freedom, like what real estate is actually supposed to provide you. We moved across the country, lived closer to family, but then I started working with another investor. After that experience with that company, with the finances, the first thing I asked this new investor was, let me look at your numbers. 


 David
 Like now I want to look at this. Like at a true investor would look at like acquiring a business almost. I said, let me look at your numbers. I dove in there an absolute mess. It's an absolute nightmare, just like most people's finances. I said, we got to clean this up. Like you can't be running the business without knowing the numbers. It's going to give you a lot of clarity insight. We did for the next three months, like went in there, cleaned up everything with the team. After that, it turns out he had a little portfolio of properties. He was able to refinance the properties because he was like super under leveraged on them. He was only into the properties about 30% meaning he had 70% of equity stored in these properties that he had not tapped into. And that's where all his money was. 


 David
 He kept asking me during this time, where's all my money. Like I don't know where my money as well. Once he had clarity there, he saw exactly where his money was. It had, was dumped into all these properties. He refinanced out, got several hundred thousand dollars worth back in his pocket to do whatever he wanted with it. That's where he said, like this has been life changing, transformative. Like I just knowing these numbers, knowing what I have to spend every month, knowing where my money was sitting, like just having that power to be able to do these and make these decisions was business changing for him. We also made sure he was paying himself because before that he wasn't even paying himself as the owner. He's like, why am I doing all of this? Where's my money going? And I'm not getting any benefit. After all of that changed, that was the second light bulb moment for me was this can be life-changing for entrepreneurs. 


 David
 That was the spark that started what I now run today as simple CFO, which is a fractional CFO company. I started with, at that time too, I had a mentor. I've had mentors my whole life. At that point I told someone like, Hey, this is what I did with him. I'd love to do this with other investors. What do you think of that as a business? My mentor said, that sounds great, but you need to read the book profit first. And I said, okay. I read that took 10 pages of notes, read it in one evening, the audio book and said, this is great. This is it. This is the framework that I want to use. As part of what I set up. This'll be the cashflow system of what we roll out with people. After I started the business, I use profit first as a cashflow system, we had our other things that we did as well, too with investors. 


 David
 That's where about a year of that, of seeing it work over and over and over again with real estate investors and the entrepreneurs were working with. That's when I went to Mike and said, Hey, I've been implementing profit first. It's been going great. Like people are actually paying themselves now getting out of debt, like not stressed out all the time, like able to actually enjoy vacations. Like this is awesome, but there's a big difference with some of these things, between what you wrote in the real estate investing world. Could I write the book? And that's where we struck that deal. I bought that intellectual property from him, wrote the book and now that's what we're at. That's why I get on these podcasts because I don't like people living deal to deal in the real estate world or in their rat race. If they're an entrepreneur, like there's no reason to be there. 


 David
 It's just a set of habits that we've had up to this point that put us in that position. It's like, there's a better set of habits that wealthy people have that we can incorporate into our lives and into our businesses and set up these systems. That's why I wanted to get that out there. That's why there we go fast forward today. Now I'm on this podcast telling every the world about like, please don't live there anymore. You don't have do that. So there you go. There's there's the overview of where I've come from to where I am now, 


 Josh
 David, I might've screwed up. I didn't hit record. You might have to do that. I'm just kidding with you. 


 David
 I can do it all over again. That's fine. I'll get fired up again. 


 Josh
 Yeah, dude. Awesome. Man. Two books changed your life with a mentor on top, right? 


 David
 Yes. 


 Josh
 Rich dad, poor dad. Awesome book changes. I mean, I think if you asked 90, a hundred entrepreneurs, they would say one of the books, if they're, living today and right now they would say rich dad, poor dad, right? Oh yeah. The quadrants, the rat race, all this other stuff. Profit first I would say is definitely one of the top entrepreneurial books because I might be making a lot of money, but the law of the Parkinson's what's it called? 


 David
 The Parkinson's law. 


 Josh
 Yeah. The more money you make, the more money I spent for some. 


 David
 Exactly right. 


 Josh
 More money, more problems. Right. You took these two books kind of bundled together and created a it's. It sounds now don't take offense to this simple CFO, right? It kind of sounds like an oxymoron, right? Like CFO, man. It is a complex thing. There's complicated laws. Each state has their own thing. I'm running deal by deal. Each deal is different. There's like, so what do we need to do more deals, right? That's how we survive. 


 David
 Exactly. 


 Josh
 Talk to us about what are three things that entrepreneurs in the, or real estate investors are doing wrong that you're like bro, or lady, you got to change these things right now in your business. What are three things? 


 David
 One is having one big bank account, wherever all money goes in, all money goes out and it's just a cash out all the time that you're tossing. You have no idea. You just, like he said, more money comes in, the more money goes out and the bigger you get, the more you spend. You're like, why am I doing this? That would be one thing, because that doesn't give you clarity in your finances and you feel stressed out because you're like, can I even take money out for myself? Or like there's an IRS bill. Do I have no idea where that money's coming from? Don't have just one big bank account. That was one big mistake. Second thing would be like, don't steal from yourself. Like if you do set up a system, don't make sure that you're not stealing from one entity to the other. 


 David
 Or like, if you have a system set up for profitability, don't be always stealing from yourself and please separate personal and business. Like don't be stealing and dipping back and forth because then if you go to court, that'll be a huge mess that you'll have on your hands because it'll look like there's no business setup and no structure there. That's there to protect you. Make sure you're not mixing personal and business. Another thing that I would say a lot of people do is they abdicate the numbers. They say, I don't like the numbers, the finances, please, Mr. Or miss bookkeeper, take it from me or CPA or financial person. I don't want to think about this for another year until it's tax time. Just please take this away from me while I don't want you to be the bookkeeper or the financial person. You need to know your, those numbers in order to put the back into your hands. 


 David
 That's where if you want to, our favorite shows as entrepreneurs, right? Shark tank, the profit, things like that. What do they always ask about? They don't care about your emotional project or how you do or what it is they care about how many sales you have. They care about your numbers. They care about your click cost per click. They care about the marketing numbers. They care about that stuff. That's how it is in your business. Because if you just think, oh, I'll just think about this next year. You're just running a side hustle. You're just running from deal to deal. You're not becoming that true business owner. Those would be three big mistakes I would stay away from if you are an entrepreneur in general or a real estate investor. 


 Josh
 Super cool. So, all right, me, you Marcus. Limonus from the prophet sitting down at a coffee table and he preaches people product process, right? Like that's his jam. I had a mentor, give me a homework assignment. He said, you must watch all of Marcus. Limonus this stuff. So I did. Right. We're sitting down having a cup of coffee and he asked, and we're looking at a business together. In, he's talked about people, product, process. When should an entrepreneur, if an entrepreneur comes up to the table, when should they lean on you? For which of those or all of those? Like how best to lean on a simple CFO, like, , 


 David
 I would say the money touches all three aspects of that. If you're hiring a new person, like a, does it fit? Do you have the money and how good of a person can we get? Cause I liked the aspect of how much can we afford to pay versus how little can we pay for this position? It's like for the people you need to know, what can we pay them and what is going to be their return? You know? Like what is the actual return on what their seed is going to be? For people hiring process, like making sure that you're hiring at the right times as well too, it's like, are we trying to grow too fast? Or do we need an influx of cash to hire the right people, to serve all of these things that just came in all these deals in the door, all these closings or whatever it might be. 


 David
 As far as product, like that's the same thing to do, those numbers around your product? Like the marketing channels, like how many dollars do I have to spend in order to get a lead that comes in that turns into a sale eventually. If I have different products, do I know the margin on all those products? Meaning, do I know how much profit and then I'm making on each individual product. If you're a real estate investor, do which of your exit strategies or your revenue sources like flipping or wholesaling are the best? You're like, do which one is actually performing the most? The other thing there too, especially if you're a real estate investor, like what's the best return on your time to cook, just because you're making a flip. Does that mean that it's better than wholesale? Because wholesale can be done in a month where a flip is done in six months, it could be a whole, much more headache. 


 David
 Then you said process too. It's like, how efficient are your processes? The more efficient your processes, the less you're spending, the more of that goes right into your bottom line and into your pocket. 


 Josh
 So, so it sounds like Marcus Limonus and you are, would be a good team. Like have you ever re ran a deal with him? 


 David
 I've never ran a deal with Marcus, but he's very much an inspiration for what we do. Because like, what we do is a lot of what he did on the show, like to make sure that we're not the bookkeepers and we're not the CPAs, we're like that financial leader to say, where are you right now? How do we get you to a better position? 


 Josh
 Yeah. This, you guys are like, how do I you're like the, the doctor that everybody knows that they should go get the checkup. Every entrepreneur, every real estate investor, everyone knows they need to have their books in line. Everyone knows primarily everybody, most everybody knows they should have multiple bank accounts, keep, personal and business separate. Yeah. Everyone knows these things, but yet we don't do it. Why the hell don't we do it? 


 David
 Number one, those people aren't the numbers. People we're not built like that as entrepreneurs, we don't have the, that's why, when people have me on podcasts, I'm like the pocket associates taken a risk. You know why? Because I'm a finance person. Like I run a finance business and I'm come on. It's not sexy. It's not the sexy part of business. It's not the sales and marketing part. It's the finance portion. And that's how most entrepreneurs see it. They just say, get this away from me. I don't want to think about it on honestly, too, if we want to get really deep here, a lot of people have emotional hangups with money. They have these money scripts from their past, from their childhood money. Doesn't grow on trees. Like all the cliched statements that you hear that does not go away. Once you become an entrepreneur that you don't just magically became all on. 


 David
 Now I know everything about money and I'm not going to have any of the hang ups that I had as a child or as a teenager or as a young adult at a W2 job. It's like, you don't just magically not become that anymore. It takes skill. It takes that. It takes someone there who knows what to say and what to ask and what to do in order to help you get to where you need to be. It's a lot of those hang ups from our past as well, too, and a lot of bad habits. We get into a room like a mastermind room of other people. If they don't have the habits of the wealthy, then it's like, then it's just the blind leading the blind. And you're like, you know what? I'm spending this much. I'm spending it. It's like, okay, we're focused on the wrong thing here. 


 David
 Like, Hey, I made seven figures this year. Great. How much of that did you keep? It's like now we're asking the real question. That's why I feel like a lot of people are stuck. Cause they're not the numbers people. They've got hang ups from their past. 


 Josh
 Money scripts. We have these things like they, I have a record player behind me. Right. There's these records going on in our head, right? Tony Robbins would say, it's neuro-linguistic programming. We've got these things that run it through our head. Here are a few money doesn't grow on trees. I like that one money is evil. PDT would say more money, more problems, 


 David
 Right. 


 Josh
 Takes money to make money. Right. What other, what other money scripts that you see being in the industry that you find harmful? 


 David
 Well, there's, what, I think I even have some of them because they're so prevalent. There's one of the CFOs on our team gave this talk there's money avoidance like let's and this is money. Avoidance could be like, you have a windfall, or you've never made this much money before in your life. You're just avoiding success at all costs. Like I don't, I come into money. Has we see this in the real estate investing world all the time. It's almost like their ceiling has never been broken of how much they've made. It's like, they go to that ceiling and I've made this much and now I'm making more. They like shut down to where they're comfortable. They avoid money and they avoid the conversations. They're like, I go back to where I'm comfortable. There's money, focus in worship that script of like, that's the, where I'm going to make more. 


 David
 I'm going to spend more in my lifestyle, in the business. It's like, it's all about the money. Like I have to get the money, which could be also a past script of like, I never had money before. I have to overcome that and overcompensate and say, it's all about money now. There's money status. Which, I mean, we're all subject to that. Keeping up with the Joneses, they earn more than they, like they spend more than they actually make, because they have to feel like they are part of the club, the good old boys club or the good girls club, like I got to get in that club of people that are awesome and wealthy and rich, they are the ones that say revenue over profit. Like, I don't care how much I'm making. I just, or how much I'm keeping. I just care about how much I could tell other people they're showing and flashy. 


 David
 This might be like the people you see with the, Lamborghini's nothing against those people, but they have to show it off. It's like, if it's like Instagram, if you don't Instagram, it didn't happen. Right. It's like, that's the money status type thing. And then there is money vigilance. There's like people anxious about money because maybe in the past they never thought about money before, or like their parents never did. They're, or they never had money or maybe they have it's come from not even middle-class, but from a poor background. They're like, I, if I get money, I have to hoard it. Like I have to just, I have to hold onto it and I can't let it get through my fingers. They're almost neurotic to the point of like, I can't part with this. Maybe sometimes they don't want to spend the money at all. 


 David
 Like they should invest in marketing, but they're not going to because they don't want to spend any more money. They've accumulated in a camp par with it. Those are a couple of the money scripts that we see come through our doors and people. I have to give credit to one of our CFOs too, that helped us with that a long time ago. I really, those are some of the money scripts that people have. 


 Josh
 Yeah, dude, super cool. I like this. This could be like a fun game to play because out of that list, 99% of those hit me. Right. I grew up with a super unhealthy relationship with money and it wasn't until going bankrupt and get in my asphalt by trying to keep up with the Joneses and figuring out this stuff and trying to go for grand slams. And I didn't know my numbers, man. I lost it. All right. Some of that here's let me add another one, keep it in the family, right? Like, Hey, I'll just learn how to do this myself. And I'll figure it out. Right. I'll I'll run my bookkeeping. I'll do my numbers. Right. Taxes. I'll figure it out myself. Not wired for financing details, but still reading books and trying to figure out how to study and read P and L. 


 David
 All right. Dan taking the accounting course, trying to do all of that, where all the hats it's like, okay, where's this going to really take you? 


 Josh
 Yeah. The last time I really had formal education in accounting was 2001. Would they professor who spent more time showing cat PowerPoints than he did actual numbers, emails. I still don't know what PMs look like, but I know what cat slideshows looked like. There you go. As you're doing this super cool, man, I'm so glad we're chatting because I have unhealthy relationship with money that I am unwinding now into my forties. And I'm better off for it. And I'm thankful for it. And we're doing really well now. Man, I had to learn this in my forties. I'm trying to teach this to my kids. I see on your LinkedIn, before I do that, before we talk about kids, I see, I just did a search right now when it comes to keeping up with the Joneses, I just typed in Jones's bankruptcy and I saw a whole list. 


 Josh
 Keeping up with the Joneses, I see a lot of Jones is going bankrupt now. You might not want to do that. All right. Back to your LinkedIn man, you're crushing it on LinkedIn. You guys do some really cool stuff over there. I see passionate husband and father, and I see a little emoji, right? It comes to kids, that was a long segue into getting into this question. When it comes to kids, man, like what are you doing differently than maybe you received, from your parents now, to your kids when it comes to money? 


 David
 No, that's great. I, I asked this question on my podcast a lot. It's fun to be asked this question. Now I've got a five-year-old daughter. That's where the frame of reference is coming from. Up until this point, like we've just been learning what money is and like what the different denominations are. We did set up the envelope system for her. Profit first on a mini scale with actual physical envelopes. She's got one for giving and for saving, for investing and for spending. She's got the little envelopes already set up. We're giving her some good habits to start off. Well, this summer too, we live in Florida and in our town here, they do like a downtown market. In the summer they're doing it for children like for children, like from five years up to 19, like the teenage to young kids and we're going to build a lemonade stand. 


 David
 We're going to do a lemonade stand. We're going to do that with her. She's going to get to keep the money. We're going to say like, Hey mommy and daddy are the investors. We're going to help you buy the materials and stuff. We're going to show her, the breakdown. That way she can get that information at a young age. Like I want her to at least be exposed to it. Even if she doesn't, grow into an entrepreneur. I want her to at least know that if you have, $20 here, that's not just magically coming from mommy and daddy, just because they're magical people. That money just grows from that. Outside of it was because we did something like this. We created value in the world. We were able to take lemons into lemonade. And now we created value. That's going to be a cold drink in a hot day for someone to be able to enjoy and consume. 


 David
 We, I want to teach her about the different aspects like that. And that's just, that's on totally different. I've got like all the, have got like the cashflow for kids for when she's older, like I've already bought all that stuff to as soon as she's ready to be able to take on some of this, just get that mindset as soon as possible. 


 Josh
 What a great investment. I absolutely love this for, with my kids, my daughters, I have a 9, 5, 2. My daughter wrote a book. She goes, dad, I want to make money. I go, okay, what do you need to do? I could call her. I was like, cool. She was like six at the time she called it a book. I sold it on LinkedIn for 20 bucks. 


 David
 Nice. 


 Josh
 So she's a published author. 


 David
 That's awesome. 


 Josh
 Right? Now everyday my kids nine and five come up to me and go, daddy, how can we make money? Can I help mow the lawn? Can I help pick up sticks? So they're on the money side. They want to, they're like their daddy. They like to make money. Let me do this for you and your daughter, I'll buy the first batch right of, I want to be an investor in her business. I want to arc are a group that deals scout wants to invest into the company and, and do that. Either we can connect afterwards, you give me your PayPal, I'll send you some money. If she wants, you could explore this. If she wants, she could sponsor this episode, we'll give her a sponsorship too. It, this episode could be sponsored by your daughters, entrepreneur, enterprises, whatever that looks like. All right. That's going to be from the deal scout. 


 Josh
 We love investing in the future entrepreneurs in one day, she'll probably be my boss anyways. I might as well be kinder in that. All right. So, so as you're doing this right, and you're teaching your kids, what are, what's like the one before I ask that, dang it, man. My, my brain sometimes runs too fast. You, you have an envelope forgiving, right? I've I've read the Dave. Ramsey's, I've read generous given books. I've read this stuff, but like, is it BS, man, this whole thing about like teaching kids to give and this whole envelope of giving and like, man, I'm making money. I already have to pay freaking uncle Sam. Why should I dedicate some money for giving? 


 David
 I make no apologies for being a Christian. I've been a Christian my whole life. I come from a background of faith. I had, it's been core and fundamental to who I am and even going on my self discovery in my early twenties, to this day, I still that's the first 10% I give to God. I give back in different ways right now, simple CFOs supports I think, seven different missionaries on mission fields and mission teams. For me, it is all about I get this money and it's not all mine. I want to give it away to the causes that I feel like I want to be able to invest in. That will last for me eternity. Like, I want to be able to do that for people and for others. And I've seen it. I've seen it happen in different ways, just because you give away money does not always mean that you're going to get more back in money. 


 David
 Sometimes it's a better relationship. Sometimes you grow as a person. Sometimes you read the rich dad, poor dad's and they come along at the right time and you're open because you're, you have that spirit of being open to giving. It's incredible. When the things come along, like you are that student, the teacher comes along and you're ready and you're open for that. Your hands are open and not closed. If you have them open all the time, you're going to be ready for whatever the world wants to give you or whatever is coming along for your path. I believe in it a hundred percent, I'm never going to stop doing it. I've got crazy big goals for the future too. Like I want to give away a million a year, like that's one of the things that I want to be doing like this. I, so you probably asked the wrong person, cause I'm like on the way, far extreme side of like, I want to give as much as a human can in this lifetime, before I pass on, 


 Josh
 What's a financial goal that you want to give away in your lifetime. 


 David
 Well, a million dollars a year is that first one. I want to give away a million dollars in one calendar year, but then I want to do it consistently. Like as soon as I reached that goal, which I planned to do it by 2025. Once I'm at that goal, I don't want to stop giving a million dollars a year from then on. As far as that goes, that's the first big one. As soon as I get there, I'll let you know how the goal updates from there. 


 Josh
 Alright. I gotta ask you this transparently, right? CFO crushing it and real estate running a company, focus on money, money, right? Everything around every day, all day long, your brains thinking about nun numbers and such like that, you probably have an Abacus somewhere, right? You probably know how much changes in your couch cushions, right? What bad habits do you have financially that you are learning to overcome? 


 David
 Well, do you okay if you want to be real transparent, I am not a CFO. I am not a CPA. I am not a bookkeeper. I am not an accountant. I am none of those things. I am, I am dangerous enough to know what the power of those numbers are. And I've hired. We've got 30 CFOs on the team who are much smarter than me when it comes to finances and helping people and getting them where they want to be. What I know is how horrible it feels as an entrepreneur and a human being to be making money and not have anything to show for it. So that's where I come into play. As far as bad habits for me, oh my gosh. Like I was totally the money. What was the one there, like near the end that I was saying that the money vigilance, like if I got money in, I did not want to spend it. 


 David
 Like at all, I was more the saver, like in the Dave Ramsey world, I was definitely on the saver versus it's spender type. I carried that through with a, it was scarcity mindset. That's all it was. I always thought that if I didn't have enough, I'm not going to be able to provide for my family or I'm going to, like I don't want to have to go backwards or anything like that. I had that money scarcity mindset for a long time. Only until the last few years, like if you're an entrepreneur, it's incredible. If you just keep breaking through ceilings, it's incredible how you grow personally, just as a person. It's like, that's why I encourage entrepreneurship because it makes you break out of everything that you're comfortable with. For me, a big one was money like that. I love that I started this business because it helped me as well too, from the very beginning breakthrough, some of my ceilings. 


 David
 Now I have a CFO on our team that looks at our finances and make sure that they're keeping me on track as well, too, because I don't want to be a stuck in those bad past habits that I had, like around all of that. So there you go. There's full transparency on this episode. 


 Josh
 Yeah. Whoa. Well, we're talking about accountability. You have a CFO who takes a look at your numbers, right? At times that could be embarrassing, right? Like big. 


 David
 Time, look. 


 Josh
 How messy I am. Right. I have receipts just like piled up on, on the back cabinet. Right? Like having a CFO man. That's a whole new level of accountability, isn't it? 


 David
 It really is. We understand that so many people have been talked down to or talked over when it comes to a financial person, whether it's a bookkeeper CPA who thinks they're God's gift to, earth and people, it's like, that's where in our company and our culture, we want, we know that it can be very intimidating to talk about numbers, very emotional to talk about money. So we are always there. Yes. We want to hold accountable, but it's ultimately for what you want. You want that financial freedom at the end of the day and the end of the year. And like before your life. It's like, if we frame that in our conversations, it's a lot easier to talk about the money. We talk about like, oh my gosh, we've got some clients where it's like, husband and wife are on the team. Husband thinks this way, mother, mom and the wife thinks the other way. 


 David
 It's like, they're not going, it's like, sometimes it's almost just refereeing between those two and the different scripts. They're both braining through the conversation. It's like, just making sure that we help them walk through that. Yeah, I, we get that all the time, but we try and just help people wherever they are. 


 Josh
 Yeah. While you guys are coming on board, you're not a CFO. How did you get the idea that you gotta, you got this bug up your ass one day. You're like, I'm going to start a CFO company. Right. That seems so far out of left field because high visionary, I assume, right? 


 David
 Yes. You seem. 


 Josh
 Extroverted. He seemed like a dreamer. You seem like that. You're, you're good at deals and you're good at sales, probably a marketing massive side of weakness you said is the finance side scared you why to dive into that fear and go might as well start off by it's company. Right? 


 David
 I've always liked the rich dad, poor dad books and the Dave Ramsey books. I've always clung to that of like, people need this. I'm glad I had that inside of me to be able to like, get a good foundation for myself where even though I had some bad scripts running, it was still scripts enough that I wasn't like freaking out all the time. I felt like, okay, I helped this first investor, like with that money and being able to pull from his properties and like him saying, this has been a life-changing experience that was really of like, okay, this is almost a mission now of like, I want other people to realize what the finances unlocked. He was the one that suggested you should call it simple CFO. Like you should call it that you said you're more like a financial leader. People know what CFO is and it's different than bookkeeper and CPA. 


 David
 It's like, it has that air of I'm going to come in and help you with the numbers and with the finances. From, more of the GPS side than the rear view mirror, like the bookkeepers and accountants and CPA. So I was like, I like that. That makes sense. That's why I started it and why the name and from the very beginning, because I wanted to also redefine CFO as well too. I don't want it to just be this person in an ivory tower somewhere that only rich entrepreneurs get to work with. That's why we created a fractional company to like, from people doing just a couple of deals a year. We have like one client, who's doing five deals a year, but he has literally done enough deals this year. With his system that he could take off the rest of this year, the rest of six months. 


 David
 He would be totally okay, like he's, half's enough for himself or his business and everything after working with it's just like, that's the type of stuff. Now that excites me. That's now why I kept it going as well too. Why we just keep growing because we see these types of results for people. It is, it's almost like having Marcus Limonus on your team to say, this is what you should stop doing and stop spending money on. Like, this is what we should start focusing on in order to increase what you want to be putting in your pocket. 


 Josh
 Alright. Awesome. Are you any good at monopoly, but the game? 


 David
 Yeah, I would say yes. Just no one ever plays with me was like, Hey, you can't imagine why. Right. It takes a long time and I'm a deal shark in that game. It's hard to get my wife or anyone else in my family to play. So. 


 Josh
 Yeah. Yeah. I play with my kids and my wife and I wind up going, oh, you don't want to do that deal. 


 David
 We are the same. We are the same. I can't wait until Ellie's just older. My daughter, that way she can, I can get her in there without her knowing like, okay, this is it. So, this is one of dad's game, so yeah, 


 Josh
 Yeah. Yeah. All right. Let's put deals aside for a second. Okay. Let's talk about like future goals for, personal, like what are some personal accomplishments do you want to accomplish? You mentioned a, a million bucks a year by 2025. That's , deals and such like that, but like what other like personal goals that that's the giveaway. What about for you like Lamborghini? You want to go fly to the moon and put your name on the moon or something like, what's a big aspiration for you, 


 David
 Man. People ask me this and I'm like, I honestly, for me, the big goal is the giving goal. Like I don't care where I live. Like I could live the minute. I love the show on Netflix, minimalism, like, and I love the book like that. I like, I love that whole lifestyle because I don't need a bunch of stuff, like to feel validated. That's the other thing as you grow and you break through some of these barriers, you don't have to have that validation from the outside world. Like honestly, this stuff behind me, if you can see this on YouTube or whatever, it's like a very nice bookshelf, very put together. If my wife would not have put this up, there would be absolutely nothing behind me, but a wall, it's like, I'm just, I don't care as much anymore what people think or what they think I should be doing. 


 David
 That took a lot of work that took a lot of head work to get that out of there. I would say, like, what do I want to do? I love to travel with my family. Like taking months off at a time, just to be away from everything and going in deep with them and really helping and, being a part of that, of the unit, I love being a dad. It's like, Hey, I went, swimming with my daughter a couple of days this week in a row. Cause she absolutely loves that. You know? As a five-year-old, she's just like a fish in there. It's like, those are the types of things that I love doing. My big aspirational goal is to be a great husband, be a great father to look back on my life and have no regrets, like in the movie, whatever that is, where it's like with a misspelled letter, I've got no regrets, like with the AI on it, I forgot what it is. 


 David
 Like we're the Millers or something. Like the guy has a tattoo on his chest and it says regrets and it has an a in the middle he's like, and then the other guy's like, do you have any regrets? Not even one letter, it's like, I don't want anything at the end of my life to be, like, oh, that regret. I that's, what I'm looking for is like, how can I make today successful? I've got the big goals for giving and such. That's like, that's what drives me every morning and every day and every week. When it gets hard in the business or when it gets hard with my family and all that stuff, cause I go through normal things. It's like, that's what brings me back to center. So there you go. 


 Josh
 I appreciate you sharing that. Hypothetically, if we did get a tattoo together, what tattoo would you get? We crushed us. Huge deal. You and I, we freed a million people from dead and took a million, 


 David
 Hey, Josh Wilson, right across by chest. There you go. Yeah. That's what I would put on there. 


 Josh
 We did. 


 David
 That. 


 Josh
 Super cool. All right. You have a podcast show, give a shout out to your podcast show and tell people about it. 


 David
 Profit first for real estate investing is the name of the show for the profit first REI show. It's real easy. If you look it up on the PA wherever you can find podcasts, because that's where it is. And we talk about, guess what? Profit first in the real estate investing world, we have a lot of other guests come on to talk about their journey. Like from people's low points to their high points, how they've struggled with money, I'm trying to get them talk. The conversation around money started, like, let's get it started, let's start talking about it so we can actually know that other people struggle with it, just like we do, but then they also overcome it too with some good habits. So that's the show profit first REI. 


 Josh
 Let's sweep. What we could do is we could put all those links in the show notes. You fellow dealmakers out there and you're like, especially with your real estate guys and gals who are like, I got to get that next commission got to chase that commission what they call it, commission breath, right? When you're constantly pushing for that next deal, because you got to keep your lights on. This might be a good show for you to listen into. David, as you're building growing, we're doing this interview, you've shared some amazing golden nuggets and also some, personal stories. What question should I have asked you that I completely screwed up that I did not ask you other than where can people find you? 


 David
 Other than that, there's really, you've asked a lot of the great ones during this one. Like how could people mess up? I would just say that maybe one thing that I can impart to people that maybe that wasn't even asked, but a part of the profit first system is creating a habit of profitability, making profit a habit in your business. That's really what the profit first system is all about. One thing you can do is if you don't have separate accounts go out right now, as you're listening to this, pause it, go to the bank, set up an extra account, call it profit and transfer 1% of everything that you make into that account. Start the habit of profitability of every single deal that comes in. I'm going to at least put 1% in there. You re you read my book or Mike's book. It's going to teach you the whole system. 


 David
 It's going to teach you the percentages. It's going to teach you all the accounts. My purpose is just to get you to start the wealth habit, the habit of wealthy people. Set up one account, call it profit transfer 1%. 


 Josh
 Wow, super cool. Where can people find you do deal with you? 


 David
 Sure. So simple CFO solutions.com. That's a one-stop shop as our link to our podcast, to the book. It has to schedule a call with us. If you think that we would be a good fit, even if we're not a good fit, we're connected to a lot of good people in the financial world. If you're like, I just need help. I just need a bookkeeper or something like you could come to us as well too. We'll point you in the right direction to make sure that you get where you need to go. So simple, CFO solutions.com, 


 Josh
 Awesome fellow deal-makers in the audience has always reached out to our guests. I thanks for being on the show. All their contact information will be in the little show notes below. You can connect with them directly, let them know that you heard them on the deal scout and that you appreciate them investing their time into you guys. Now, if you and the are looking at a deal or working on a deal, want to come talk about it here on the deal scout, head on over to the deal. Scout.com. Fill out a quick form. Maybe get you on the show next till then talk to you all on the next episode, David, you hang in there. I've got some money to send your, to your family, entrepreneur enterprise, something like that. There you go. Awesome. Thank you Josh. Bye guys. 

David Richter Profile Photo

David Richter

Author / CEO / Father

David Richter is an active real estate investor who has been essential in closing over 850 deals over the last 7
years which include wholesale, turnkey, brrrr, owner finance, rentals, lease options, and any other exit strategy
you can think of. While growing and building a real estate business from 5 deals a month to over 25 deals a
month, he realized that as much money was coming in, it was going right out the door.
With the unique opportunity of being in every seat as a real estate investor, he found a calling in the company’s
finance seat to help businesses see where their money really went. David has helped real estate companies
completely turn around from going out of business to building cash reserves by using the Profit First cash flow
system.
He wrote Profit First for Real Estate Investors. This book is a derivative of the original Profit First by Mike
Michalowicz that is tailored specifically for Real Estate Investors.
His goal is to completely transform the Real Estate Investing industry when it comes to how real estate
investors view their finances. He wants to bring investors true financial clarity and freedom, and help every
investor stop living deal to deal.