Posted on: July 06, 2021

There’s a simple but significant formula to build a successful real estate business or just to gain more cash flow. In this quick episode, Tom Krol introduces the 4 Ts, revealing how the wealthy stay on top of their game.

Keep your ears peeled because he practically spits bars about what he has learned after thousands of hours coaching other people on real estate.

Key Takeaways

  • Tax, Tithe, Table, and Take
  • On consumer debt
  • The most inspired and the most desperate make things happen
  • Tom’s strategy for buying property and growing your real estate portfolio
  • Wholesaling is the art of finding discounted properties

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Episode Transcription

Tom Krol:
One of the ways of really simple methodology, when you get an assignment check, here’s the way it works, right? First of all, pay your taxes. You’re not a W2 employee anymore. You’re an owner. Every single person, you and I, and your audience, know famous, people that we would describe as Uber successful, who are dead broke because they didn’t pay their taxes.

Brent Daniels:
Mm-hmm (affirmative).

Tom Krol:
People that are household names that we, you and I, know personally, right? So, number one, you get an assignment check, boom. I don’t care what any CPA or bookkeeper tells you. You pay the IRS what you owe them immediately. Don’t play games, I could invest the money and save and then later on, I’d make a 2% extra, don’t do that. Your game is not tax evasion. Your game is real estate investing. So, that’s the first rule. Second rule is tithe. Says it right in the Bible, right?
You want to be a go giver. It says, Malachi chapter three, verse eight, “You don’t give God his 10%, you’re a thief.” It says, “How do I steal from God? It’s because I’m not tithing.” Check it out. Last chapter, Old Testament. So, first, tax. Second, tithe your 10%, it’s not your money, if you take it, you’re stealing it. And number three is table it. Table some money. All wealthy people, they only do a handful of habits. They’re all over the map. I don’t care what skin color, gender, sexual orientation, age, industry, it doesn’t matter. Here’s what all wealthy people do. Number one, they all read. All of them, 100% of the time, they’re all readers, right? Audible’s great. Reading is going to build the most important muscle in your body.

Brent Daniels:
Mm-hmm (affirmative).

Tom Krol:
Number two, is that they all save a portion of their income. When you talk to poor people, what do they say? I’m in debt, so I’m putting all of it towards my debt. No. You’ve got to pay yourself first. I don’t care how much debt you’re in. You’ve got to save some of your money and invest it because compound interest works with time. So, when you pay debt before you pay yourself, you’re losing the most important factor, which is time. So, tax, tithe, table, save 10 to 15% of your money, like all wealthy people do, and then live on the rest. And that’s it. So, it’s… And that’s your… Yeah, you take…

Brent Daniels:
I love it. So, Tom, to open up this show, I talked about, the first step is finding discounted properties, right?

Tom Krol:
Yes.

Brent Daniels:
Finding the opportunities as a real estate entrepreneur.

Tom Krol:
Right.

Brent Daniels:
Replacing your current job, right?

Tom Krol:
Absolutely.

Brent Daniels:
The third one is paying off consumer debts. Right?

Tom Krol:
Yes.

Brent Daniels:
Talk to me about that. Talk to me about the weight around your neck of consumer debts and what your thoughts are there.

Tom Krol:
So, yeah. If you’re in this business, you’re an owner. If you’re an owner, you’re playing, and you want to punch the guests and you’ve got lift, you got thrust, you got drag, and you got weight. And any consumer debt, there is none an intelligent investor, or a person, or wealthy person who’s using the bonus points on a Marriott credit card, just don’t go into it. So, avoid debt at all costs. Debt is dark. Debt makes the wrong things important. Debt makes money important. Money is a symptom, it is not a condition. Conditions produce money, right? What a wealthy people do? Wealthy people produce conditions that will produce the symptoms. They seek the conditions. Poor people are constantly chasing the symptoms. They want to keep up with the Joneses. They’re defining who they are by their financial life.
They want to buy a new car to impress people. They care too much what people think about that. They’re constantly chasing cash. But the secret is, what wealthy people know is, you’ve got to seek the conditions that produce the symptoms, don’t chase the symptoms. And as far as your job, I mean, a lot of people are super conservative on this that you have to save a certain amount of months, no way. I’m going to tell you my advice. I would not be here today if I didn’t get fired. I’m going to say [inaudible 00:04:35]. Now, I know that Brent Daniels can’t say this, because you don’t want to go out there with that message. I’m going to go out there with this message, which is, the sooner it… I hope you get fired today. It will be the best thing that happened to you. Quit prematurely, because I’m going to tell you… But you know who I want as a student?
I want the people who are the most inspired and the most desperate, because after coaching 5,000 people, I know who’s going to make the most money. It’s going to be the guys who are the most desperate and the people who were the most inspiring. Because when you’re in love, you’re going to, you’re going to make it happen. You’re going to realize you’re strong. You’re powerful. You’re made in the image of God, all of your time, your attention, your focus, all of your resources, your money, your networking, your creativity, when it’s all focused on a single point, instead of being diluted through selling your time for money to somebody else’s dream, I know how powerful you are and that you can make anything happen. So, secretly, I hope every student gets fired and loses their job immediately.

Brent Daniels:
Come on, Tom. Same time.

Tom Krol:
I love it. So… Yeah. And avoid debt, guys. Just remember the simple formula, it’s tax, tithe, table, and take. Live off of what is left. If it’s not there, increase your number. You cannot become rich as a pauper, you… Living like a pauper. You cannot become rich just with frugality. Becoming wealthy means detaching yourself from money, not storing it up. Because that’s where money actually becomes the most important thing. Store your treasure somewhere else. So, the whole idea about money is you’ve got to just produce the conditions that allow those symptoms to produce automatically. And I’ll say this too, you guys are… After coaching all these students, Brent, I can tell you, the students who are the wealthiest, are the ones who buy property. You’ve got to start buying property just as a discipline. If you want to do an assignment agreement and your lawyer says it’s okay, great.
But I’m going to tell you from… This is not philosophy, an idea and take this with a grain of salt. This is from thousands and thousands of hours, coaching people. I am telling you firsthand. This is straight from the horses mouth that the wholesalers who are no longer on a treadmill with a job and they actually own a business, and they’re actually wealthy and they have a net worth over a million dollars. Those are the people who close. So, start closing now. If you have a limited belief that you don’t have enough cash to close or whatever it is, figure that out. Go to Brent, ask him, “Hey, I want to start closing, but I don’t know how.” Start closing on deals because that’s going to build the muscles in your belly to start seeing what your future could really look like when you get beyond the treadmill of an assignment.

Brent Daniels:
I love it and wrapping this up because I think, if I let you loose for too much longer, everybody’s minds are going to explode and nobody will watch the show anymore. They’ll just all… The rides will be gone. But with your strategy for buying property, what does that look like? Are you looking for?… I described it earlier that somebody said, “What is your filter for knowing which properties to take off the table and keep?” I said, Michael Jake, who you and I both know, said, “Listen, if it’s in the best school districts buy them.” What do you look at when you’re considering an investment property?

Tom Krol:
Well, first of all, the first thing is I don’t really necessarily, and I know this is going to go against the grain, but I don’t really necessarily care about cash flow because what I have really come to understand is that what I’m more interested in is equity.

Brent Daniels:
Yeah.

Tom Krol:
So, as long as the property will pay for itself, I’m okay with it. I don’t really care about making an extra $200 a month because I understand that if I make $200 a month, all it takes is one tenant turnover or a bad roof, and I’m opposite again. So, I don’t really care about two or $300 a month cash flow, however, I don’t want to go negative. So, one thing that I learned from [inaudible 00:08:30], and by the way, Michael Jake, I loved him, and he’s given us both some great advice in the past. One thing I’ve learned from… Michael Jake said once, he sent us to [inaudible 00:08:38], which was, “Even if I would have paid retail and just held for a long time, I would have made money on these deals.”

Brent Daniels:
Oh, yeah. Yep.

Tom Krol:
Yeah. So, the whole idea is, what I want is, whatever the property manager tells me that the property is going to rent for, I minus 40%. So, if they tell you that it’s going to be a thousand bucks minus 40% and count on 600. That’s what you’re going to be able to count on. So, as long as you can cover that, and it’s going to break even, it’s good. And then, it becomes market specific. For me, in Florida, you want to buy a CBS home, a concrete home, as opposed to a frame home. People in Florida. So, there’s little things like that. School district, I will tell you, location, location, location, is the oldest and truest, and most, most wisdom when it comes to real estate. And the other thing too is… And this is something that I learned from Robert Kiyosaki, and Julie and I have implemented it.
And this is key, which is this, your real estate portfolio is a garden. So, as we speak, right now, as we speak… I just got off the phone with two agents, which I could… Well, I’ll just… I don’t want to show too much information, but these are some of the… I’m on the phone, right now, with two agents, we’re doing two, 10 31 exchanges. So, what you have to remember… And this is… Guys, don’t worry about what a 10 31 exchange means because I… I got a nine 90 on my SAT. I don’t even really know what it means, but here’s the deal, is that, if you buy a small little home and you rent it out for a year, you can then sell that home, keep all the money without paying taxes, and reinvest it into a more expensive home. So, right now we just sold a home.
We kept $316,000 for it. And we’re buying a home on the water, in this area, that’s about 700,000. But we’re using the three 16 down, so we don’t have to put down much more money. So, I just want to encourage everybody that you can grow these portfolios by buying single homes. You don’t have to just keep acquiring and adding to the number of doors, but it has those options. Wholesaling is the art of consistently finding discounted properties. If you can get good at that, and then realize how to leverage those properties, you are financially free right now.

Brent Daniels:
Yeah.

Tom Krol:
Bam. I don’t care what your strategy is, but that’s the key.

Brent Daniels:
I love it. Tom, you’re the best. I love you. You’re the best. All right?

Tom Krol:
You’re the best, brother. I love you too. [crosstalk 00:10:55].

Brent Daniels:
All right. See you, Tom. Thanks for popping on.

Tom Krol:
You too.

Brent Daniels:
And for everybody out there that is interested in joining the most proactive group in real estate investing, it is the TTP family, the TTP program, go to Wholesaling Inc dot com forward slash TTP. That’s wholesaling Inc dot com forward slash TTP, scroll down, check out what it’s all about. Check out all the testimonials. If it feels good in your gut, sign up for a strategy call today. I look forward to working with you personally. Everybody out there, I love you, and I encourage you, as always, to go out there and talk to people. Till next time. Love you guys. See you.

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