Posted on: September 22, 2020
WI 520 | Real Estate Business

 

Imagine this: you’ve finally closed your first ever deal and it’s a very lucrative one. What should you do with the huge amount of money once it’s wired in? Understandably, it would be very tempting to splurge, spend the money, and buy the things you’ve always wanted. After all, you worked hard for it, right? Wrong!

In this special episode, Mr. TTP himself, Brent Daniels shared the untold secret of building a million dollar real estate business. And it’s not as complex as you think! However, it would involve planning accordingly and knowing where your money should go and how you should manage it accordingly.

Regardless if you’re new to the business or a seasoned one, today’s episode can provide massive value and can spell the difference between staying stuck or taking your business to the next level!

Episode 520: The Untold Secret to Building a Million Dollar Real Estate Business

Episode Transcription

You are closing deals. You went out there, generated a lead, converted it to a signed contract and sold that contract. The title company or closing attorney is going to wire you money and the funds that you made on this deal. It is so exciting but what do you do with it? It’s confusing. This is the first time or maybe this is the first few times that you’ve ever received this kind of money. Before, you’re used to getting a W-2 paycheck, doing contract labor or whatever it is. This is different. What do you do? For most people, what they do is it goes straight into their accounts. What is the problem with this? There’s an obvious and glaring problem with this.

This is going to you personally. You are responsible for this income. It goes into your account. What happens when they go into a personal account? We start spending because it’s in our account. Maybe we’re paying off debts and buying things that we never thought we could have before. Finally, it’s like, “I deserve it. I deserve these shoes, this watch, pen, flight, trip and vacation. My family does. I love them so much. I’m going to reward them for supporting me.” The problem is, where’s your tax liability here?

Do not run out there and start spending and spending because you want to look good on Instagram or YouTube or whatever it is. It doesn’t matter. You’re impressing people that don’t care about you.

I’m not a CPA, tax attorney or business attorney. I say this with all confidence. When you make money, you owe taxes. We owe income taxes. That is the rent that we pay to live in this country. It’s the absolute fact. They’re going to get it one way or another, so we have to prepare for that. This is what 80% of people do. After they get their first deal, it goes into their account and then they have to scramble back again to save enough for their tax liability. I don’t want you to do that. Not only that, but once it goes into your account, how much are you keeping to grow your business and get more deals?

I know that you’re being proactive, keeping your costs down and not spending thousands and thousands of dollars on marketing that goes out, creates anxiety and stress in your life. I understand that you’re going out there talking to people every single day. You’re having quality conversations with distressed property owners every single day, building your business so let’s set this up like a real business professional.

My CPA sets up everything for me like every LLC and corporation that I have. My accountant sets that up for specific reasons. Go to a CPA and say, “I want to set up a real estate wholesaling business.” What they do is they will set up and you will get a tax ID. Once you have that tax ID, you can open up a business account at your bank.

WI 520 | Real Estate Business

Real Estate Business: When you make money, you owe taxes. That is the rent that we pay to live in this country.

 

The beautiful thing about this is once the money comes in and you’re taking it seriously, you’re the 19% that understands that you can change your financial future by rinsing and repeating, getting deal after deal, creating a system and a business around this but you have your business account. Once it goes into your business account, you need to put 33% into your tax account. Put it away.

“Brent, I only made $5,000. Are you saying that I have to put over $1,500 in this tax account?” Yes, you do. You can understand why I push everybody to be proactive and profitable and why I say, “Don’t spend all your money on marketing and hiring people until you’ve got everything set up.” It’s not all your money. You owe 33% to your tax man. I’m not a tax person. I don’t know what you’re going to pay, but to be safe, you put it away. If you pay less, you’ll get that in the end. Put away at least 33% for expenses.

The only reason why we have a wholesaling business is to make money so that we can buy assets so that we can have long term wealth.

You need to run your business, get more opportunities and deals. You’ve got to third your taxes. You’ve got a third saved in there for your expenses and the last third goes to your personal. The beautiful thing about this is with that 33%, you’re setting a personal budget for yourself. If you have 100% to spend like 80% of people do and they get behind the eight ball with taxes and get stressed out, their business isn’t growing. They’re not reinvesting it or keeping at least enough expenses in there to get all the fresh lists, the fresh phone numbers, and the resources they use. Whether that’s DealMachine or TTP Data, whatever it is, that’s where your expenses are. If you’re not setting aside money for that, then it goes away. You need to be able to set aside money for that.

You’ve got your account. This keeps you disciplined and hungry. This stops you from hiring four people that you shouldn’t be hiring after your first deal. This stops you from making silly choices, getting a big office space or buying a bunch of equipment, computers, websites and all these other things that you don’t need as you’re building your business. At some point, it is reasonable as long as it’s in your expenses budget. Remember, you need to be putting money into your personal. You need to put 33% into here and be living off of that.

WI 520 | Real Estate Business

Real Estate Business: Don’t spend all your money on marketing and hiring people until you’ve got everything set up because it’s not all your money. You owe 33% to your tax.

 

Once that gets high enough to where it’s replacing your income, that’s when you can go to this business full-time and decide. You’re not just quitting your job hoping that you’re going to be able to make this work. You’re using the facts of your business and the results that you have to be able to make smart business decisions. This is what 19% of the business owners do and are successful at it. Let me show you what the 1% do.

A lot more checks and wires are coming in because they were disciplined and invested in their business. They kept their expenses at a reasonable level that they were able to build a system and process to be able to get more and more income that goes into your business account. You always put it aside for taxes. You’ve got an investment account.

You only have two options when you make money, to invest it or to spend it. The 1% know that we need to invest it for the future, and you can invest it if you are keeping your budget low. This is what is so critical. Do not run out there and start spending and spending because you want to look good on Gram, YouTube or whatever it is. It doesn’t matter. You impress people that don’t care about you. Go for the people that do care about you, your family.

As you start closing deals, it is more important to understand that you need to take this money for yourself so you can invest and build that net worth and legacy wealth.

This is what I’m talking about. This is how you create legacy wealth and build an unbelievable real estate portfolio. Once you get it from here, you put it into your investment account and then it goes to your personal, but at least 10% of your account goes into your rainy day fund. This is if the sky falls and you need cash. You’ve got the cash. That’s your rainy day 10% and you’ve got your real estate fund. This is what we’re doing.

The only reason we have a wholesaling business is to make money to buy assets and have long-term wealth. That’s what we want and that’s what is going to keep us diligent with our business expenses. This is the problem with 99% of people. Ninety-nine percent don’t pay themselves enough because they want to put it all into their business expenses. They want to have a big office and a big team. They want to be the guy and the person on the white horse leading the charge. They need that for their ego, but that ego is going to tear you apart. You need to put it into your account and scrape the top. You’re building it. You’ve got a big team. You look good and strong, but what are you netting in this business?

WI 520 | Real Estate Business

Real Estate Business: You need to put 33% into your personal account and live off of that. Once that gets high enough to where it’s replacing your income, that’s when you can go to the business full time.

 

As you start closing deals, it is more important to understand that you need to take this money for yourself so you can invest, do something special, build that legacy wealth and build the net worth. You will destroy this if you’re putting it all into your business expenses with marketing, hiring people, and office space. It is going to take way longer to build this up. If you go seven strong years of scraping 80% of what is left over after you set aside taxes for yourself, your financial future will be set. It’s going to be phenomenal and that’s what I want to push you to.

I want you to be in that 1%. This is what kills most businesses and people’s financials because they’ll have million-dollar and multimillion-dollar businesses, but they’ll only be netting 10% or 5%. That’s not what I want for you. I want you to take home 80% of after-tax revenue. That’s the difference between 80%, 19% and 1%. I want you in that 1%. Remember, 1,700 millionaires were made every single day. On the calendar, where do you look? Is it 5, 7 or 3 years? Where in that calendar is your day that you’re one of those 1,700 people that became a millionaire?

This is the path, the way and how you do it. You’ve got to keep your money. Put away for taxes. Watch your business expenses. Invest your money. Don’t spend your money and you will win. You are the absolute best. If you’re interested in joining the most proactive group in real estate investing, it is the TTP family. Go to WholesalingInc.com/TTP, scroll down and check it out. If it feels good in your gut, sign up for a call. I’d love to work with you. Until next time. I love you.

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About Brent Daniels

Brent Daniels is a multi-million dollar wholesaler in Phoenix, Arizona… and the creator of “Talk To People” — a simple, low cost, and incredibly effective telephone marketing program…

Also known as “TTP”… it helps wholesalers do more, bigger, and more profitable deals by replacing traditional paid advertising (postcards, yellow letters, bandit signs, and PPC) with being proactive and taking action every single day!

Brent has personally coached over 1,000 wholesalers enrolled in his “Cold Calling Mastery” training, and helped 10,000’s of others who listen to him host the Wholesaling Inc. podcast, watch his YouTube channel, and attend his live events…

A natural leader, Brent combines his passion for helping others with his high energy, “don’t-wait-around-for-business” attitude to help you CRUSH your wholesaling goals as quickly and easily as possible!

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