Episode 130: How Profit First Changed His Money Mindset and the Hardest Lessons he has Learned in Real Estate Investing with Greg Helbeck
The Profit First REI Podcast
November 1, 2022
David Richter
Summary:
Money management is a powerful thing for entrepreneurs—very often, it can mean the difference between living paycheck to paycheck and seeing profits. Real estate investors often operate without knowing there is a better way to manage their earnings by adopting a solid money management structure.
For our guest, finding success early in his life led to the need for stable finances. Greg Helbeck’s continued upward trajectory made him realize that he had to treat money with respect—and that’s where Profit First came in.
On this episode of Profit First for REI, Greg and I talk about his journey in money management and being a leader. Listen in!
Key Takeaways:
[00:43] Introducing Greg Helbeck
[01:53] On Knowledge He’s Gleaned From Reading
[04:28] On How His Money Mindset Changed After Profit First
[08:50] The Hardest Lesson He Has Learned in Real Estate Investing
[11:04] On Managing a Team
[21:16] Greg’s Advice for Real Estate Investors
[23:50] Connect with Greg
Quotes:
[06:11] “If you are not prepared to have ups and downs from your cash flow, no matter how much marketing you do, if you don’t save that money, and you don’t have reserves, you’re going to really get mentally stressed out.”
[13:29] “ If you’re going to be a one-man show forever, that can work—you can make great money. But you’re never gonna get to a level where you’re making net seven figures [or eight].”
[21:55] “If you master lead generation and you master communication, you will earn income.”
Connect with Greg:
Podcast: https://podcasts.apple.com/us/podcast/pave-the-way-podcast-with-greg-helbeck/id1459746507
Instagram:
https://www.instagram.com/grego_37
Website:
https://www.velocityhousebuyers.com/
Email:
Tired of living deal to deal?
If you are a real estate investor or business owner who is tired of living deal to deal, and want to double your profits, head over here to book your no-obligation discovery call with me. Either myself or someone from my team will hop on a short call with you to get clear on your business goals, remove any obstacles holding you back, and map out a game plan to help you finally start keeping more of the money you work so hard to make. – David
Transcription:
Greg Helbeck:
This is a great business. You can make a fortune. But if you are not prepared to have ups and downs from your cash flow, no matter how much marketing you do, if you don’t save that money and you don’t have reserves, you’re gonna really get mentally stressed out.
Outro:
If you’re a real estate investor who’s sick and tired of living deal to deal, then welcome home. Hear from everyday real estate investors just like you, and discover how they’ve completely transformed their business by taking a profit First approach. This is the Profit First for REI podcast where we believe revenue is vanity, profit is sanity. It’s time to start making profit a habit in your business. So here’s your host, David Richter.
David Richter:
Hey everyone, this is David Richter again with the Profit First REI podcast. Have another amazing guest, Greg Helbeck. He’s got a lot of things going on. He’s in the real estate investing game. He does a lot of cool things too. He’s got the Pave The Way podcast, make sure to check that out. And he’s a real estate investor, voracious reader too. If you need some good books and you need to go to his Facebook page, he’s always posted on there the latest book he’s read and an overview of it. And he did that with Profit First for real estate investing, which I’m very grateful for Greg. So thank you for doing that. But just wanted to highlight that as well too. He’s someone that I go to for motivation and just, he’s always positive and upbeat. So Greg, thanks for being on the show today.
Greg Helbeck:
My pleasure, David, happy to have you here and big fan of your work and what you’re doing in the real estate business with Profit First because like I said, I think I told you this before and I read Profit First, the original book before you came out with the real Estate investing one and just implementing those habits in my real estate journey. Once I began, it changed my life financially, man. I mean just from allocating money and all that stuff, it’s serious stuff and a lot of people, they need to hear the message cuz it’s that important.
David Richter:
Well I appreciate that. So can you gimme some of those lessons you learned from the original and then I know you’re one of the early readers of Profit First for real estate and investing that has actually read the book now. So can you just give some of the lessons you might have gotten from the different books and how they relate?
Greg Helbeck:
Yeah, so the biggest takeaway I have is always allocating money when you receive it and not just taking income. Cuz in our business if you do marketing and you make a lot of offers, you make a lot of income. And even with rentals too, same thing. You pick up properties, you have some solid cashflow allocating that money and not just taking all the money you make and sticking it in your checking account and then letting it just dry up. It’s like literally on hundreds of deals, every single deal gets divided up, whether it’s a six-figure deal, whether it’s five grand on assignment fee. So every single dollar gets divided up into the tax bucket, into the savings account bucket. That’s really my profit account. The marketing bucket I have, the operations bucket, the give bucket, the fun bucket, the bills bucket. I have all these buckets and I have all these different accounts.
It was a pain in the ass to set them up and it still is a pain in the ass to set them up, but it’s just so great to be able to shuffle that money around. And then when tax comes or tax time comes around, having the money in your tax account when you have your profit account, when you’re doing a lot of deals that adds up and next thing you know look back and you say, wow, this is great. And it’s those small differences that really matter because how you manage your money, once you start making it, it will make all the difference for you whether you can go out and achieve wealth and have freedom or if you have to just keep doing deals because you’re burning through all your cash and you’re not allocating it correctly. The Real Estate Investing book, I really liked how you actually used a lot of case studies in our niche of a niche business because Profit First is more of a general business book and I think your ability to take that and communicate it to our niche of a niche business was phenomenal. I think the case studies in there were amazing and it’s a very well-communicated book. I’ve read obviously probably thousand books at this point and I can tell between people who are really good at writing and people who kind of write and they’re confusing. You did a phenomenal job articulating the great concept and using it in the real estate investing space. So I’m real proud of you
David Richter:
Brother. No, I appreciate that for sure. And that’s what we wanna convey. I love what you said about the allocations, just making sure, getting into, like you said, it’s those small habits that are gonna add up over time and not having to worry about the taxes and actually having a profit, a cash profit at the end of the day, not some number that someone tells you. So I absolutely love that. So then I guess before you had read Profit First and then comparing that to after you’ve read it, what is your mindset around money and managing it? How did it change it or where did you go from to where you are now? Yeah,
Greg Helbeck:
So financially speaking, I’ve made more money every year since. So I started in 2015 when I was 20 years old every single year. Knock on what I’ve made more money the next year than the year before that. But with what do they say with great power comes great responsibility. Yes they can. So once I started netting multiple, multiple six figures a year, number one, you got a lot of tax liability. Number two, you gotta start buying assets and number three, if you money your money like an MBA store, when you start making high income, you are going down the drain. So I have always, always been a big fan of just because you’re making a lot of money just cuz your net worth is jumping up, you gotta treat the money, you gotta have to respect money. You can’t just take the money and blow it around and listen.
I wouldn’t say I’m frugal, but I definitely don’t waste money and I spend money that I know I can afford to lose. And usually if I do something really silly, it’s from the fun account that I already have from Profit First. It’s not like I’m going out and paying cash for something insane from just one of my operating accounts. So it’s being able to understand that making income is one thing, that’s one skill set. And then managing and keeping money is a completely different skill and you have to have that, especially in a transactional based real estate business cuz most gurus will not say this, this is a great business, you can make a fortune, but if you are not prepared to have ups and downs from your cash flow, no matter how much marketing you do, if you don’t save that money and you don’t have reserves, you’re gonna really get mentally stressed out because you’re sometimes this business, you get a couple bad bounces, a couple deals have title issues, your marketing is still going out.
You might have a month where you don’t make any money and you gotta be able to weather that storm. And if you’re always on the fringe, I mean it’s a real tough way to live life and it’s saving that money and being able to properly allocate it and also know what you’re spending money on too. I look at my overhead every month and I’m like, is this critical? Is this essential? What happens if I cancel that? And if the answer is, oh, if you cancel that you’re gonna be in trouble. It’s not gonna get canceled. But if the answer is nothing, well guess what’s getting unsubscribe. Yeah.
David Richter:
Oh that’s great. I love that. I love what you said too about the fun account because a lot of people, I think I mentioned this in the book, where people think the envelopes or the bank accounts or whatever might be restrictive and it’s like, well now you can have an account for fun and not feel bad about going out there and doing the fun things, knowing that you have that money there. So I think that was a great point of having that account and just, I think the freedom that gives people when they, it’s
Greg Helbeck:
Great. And I’ll give you an example on what I do with that. So every year I live out here in California, so there’s a lot of nice places in Southern Cal. So every year I take money usually from my phone account and I go out to really nice hotel for the night and I just sit, relax and think about life, think about growth, think about where I’ve gone, where I’m going, what’s on the horizon, what lessons have I learned and I’m able to put myself in a really nice hotel for the night in a crazy environment that makes me think bigger. And I don’t feel bad that it was 500 bucks for the night because I already had that money saved up from the fun account. I’m not just using my regular bills to pay for that. Cuz that’s kind of ridiculous, right? No matter how much money you’re making, that’s expensive to stay there for the night, but when you use your fun account it it’s like it gets you to think bigger than you’re gonna make more money so you can go do it again. So it’s like this upward cycle.
David Richter:
Yeah, no man, I love that because it is, it’s all about making sure you have the right things in place and you’re actually able to take advantage of them and why you got into business was to do stuff like that to be able, and I love what you said there about sitting and thinking how many entrepreneurs would use their fund money just to go and sit and think. And that’s a great example of thinking bigger, putting yourself in that environment, making sure you could actually sit there and think and putting yourself to, I need to think bigger, I’m gonna put myself there. So there’s a lot of a little lesson jam packed into what that story you just told. So that was pretty awesome. So speaking of stories and lessons, what’s the hardest lesson you’ve learned, learned in real estate investing? Could be financially or could be just anything that you’ve gone through.
Greg Helbeck:
Yeah, that’s a good question. I think in terms of lesson, I think that not my personality, a lot of real estate investor personalities are ready, fire aim people where they’re just like, let’s go, let’s figure it out. That’s my natural tendency. So I think being able to actually, I’ve made a lot of mistakes on real estate transactions I’ve bought. So for example, I just lost some money on a commercial building that I bought and was intending to keep as a rental, but ended up having that flop on the floor and I sold it technically at a loss even though on paper it was a gain, but with the rehab it was a loss. So I think just not doing my homework before I buy properties, before I get involved in deals and having that come back to bite me in the butt, did the same thing on a property in California, lost some money on that one.
So just basically not doing my due diligence and not thinking through why this transaction makes sense and just doing a deal because I want to do a deal or because I can do a deal. So let me give you an example. Number one is the California property. I did that deal because the seller would do seller financing. That’s the only reason I did the deal. Didn’t make any sense for the most part, I had no idea what I was doing, but because the guy did seller financing with no interest, I’m like I’ll do the deal, why not? Right? Stupid. That’s an emotional decision. And I lost money. Same thing with the property in New York. Commercial building. I wanted to do a commercial deal. That was my definition of success. And I had a commercial deal fall on my lap, made no sense. All these red flags, big building, vacant building, I thought I was some tycoon, no idea I was getting into, ended up getting kicked around. So just being not as diligent as I needed to be has cost me some cashish in my career so far. I’m getting better now. Getting much better.
David Richter:
<laugh> one, you keep bringing up the word think, hey I go there to sit and think or if I would’ve thought through this before the beginning. So would you say, what’s your highest return on investment right now in your business? Is it the acquisitions or is it being the CEO or is it putting the team together? In your opinion, what would you say is your highest and best use in your real estate investing business right
Greg Helbeck:
Now? Yeah, it’s definitely leading my team because they do most of the negotiating and all that stuff. So it’s being able to really help my team move the ball forward on our transactions that we’re doing. Whether they’re rental properties or whether they’re flips or wholesale, whatever. It’s being able to really sit down, for example with my acquisitions guy Brett, who’s an awesome team member and being able to help him move the ball down the goal line and giving him specific steps on what he needs to do that that are in his control to move the sale forward. And then sometimes I’ll jump in and help him. I’m not one of these guys who’s gonna be like, oh, go figure it out. No, it’s like, it’s our business, we’re a team. I’m helping you together and we’re rowing the boat in the same direction. So it’s being able to help him move the ball down the goal line on the deals we’re working on and also being able to help him disqualify opportunities that are gonna be a waste of his time. It’s like, hey man, they’re not motivated. There’s no way they’re selling a discount. Let’s move on from this one and go find a real motivated seller. So being able to be a leader from that perspective has been a high return on my time and return on my money as I started hiring a team.
David Richter:
It’s both those things we wanna make sure it’s a return on investment but also your return on your time. And that’s why I think even when you said setting up those bank accounts, it’s a pain in the butt to do that. But then also it’s pain the butt training people too. Same concept.
Greg Helbeck:
There’s no guarantee that it’ll work out, right?
David Richter:
Exactly. On the one hand with the money, as long as you’ve got money coming in, at least you’ve got a system on the other side. It’s like you’ve got the training and whatnot and hopefully you’ll see them be able to take stuff off your plate and get that return on your time back. So I think there’s a lot of similarities there being that leader and with the profit first and then also with building that team and getting that return on time back. Cause I think that’s what we all really want. That is that return on time. What if I didn’t have to work 40 hours in my business or 80 or 10 and had a team like that? So totally it’s
Greg Helbeck:
A different skill. And that’s the thing I’ve noticed in this business with new investors, why they struggle is they’re used to fighting on their own. And I’ve been there, done that, everyone’s been there, done that. But it’s at the end of the day, what’s the alternative? If you’re gonna be a one man show forever, that can work. You can make great money, but you’re never gonna get to a level where you’re making net seven figures got eight figure net. And I’m not saying money’s the most important thing cuz there’s other things in life that are important. But still, if you want to grow your financial scenario, if you have one, if you don’t have any employees, there’s a low chance you’re gonna be netting seven, eight figures a year. That’s just not gonna happen most likely cuz it’s just the mechanics don’t make any sense.
The system really allow, unless you’re flipping skyscrapers or something. But not a lot of people are doing that. So I had this objection for a while. Oh I don’t wanna hire someone, it’s a lot of time. What if they don’t work out? But it’s like where if they do work out and how do I become a leader to where I can train somebody to where I maximize my upside and minimize my downside? So making recordings of videos and sending those recordings that are basically training them without me having to physically get on a zoom call and train somebody and just letting them kind of fail on their own and helping them. So there’s ways you can minimize your time in the beginning so you don’t spend 70 hours training somebody and then having them just flake out on you. But yeah, it’s an art and science.
David Richter:
It really is. And like you said, it’s a different set of skills. It’s going from real estate investor to business owner. It’s like the e-myth every Yeah,
Greg Helbeck:
Yeah, yeah. Literally it’s like manager. Exactly. But here’s another myth I will say that people talk about that and that Keith Cunningham talks about this in his book, the Road Less Stupid. Oh yeah. It really resonated with me. It’s people have this dream of never having to step in their business again and that’s usually a hunk of horse crap because they, number one, even if they wanted to do that, they would go mentally insane. I would go mentally insane if I wasn’t working. I would be like, listen, if I could sit on the beach all day, I would do that for two weeks. That’s great, but I’m gonna wanna get back and do something that’s gonna stimulate my senses and it’s gonna want to make challenge me. So a lot of people can get their businesses to where they don’t need them on the day to day, but usually they’re gonna start coaching at that point. They’re gonna start something else, they’re gonna start lending money, they’re gonna do apartment syndications or something like that. They’re not just gonna do nothing. Yeah.
David Richter:
Oh man, that’s so good cuz it is. It’s where, you know, have that skill now if you have that team so that way you can go start something else. Yeah, exactly. Coaching or whatnot and it’s like, okay, do I wanna build a team around this or do I just doing this? And Exactly. But it is, it’s that progression. If you wanna do that too quickly and you don’t have the team and the skills and the right people in place, then it’s like then you keep getting sucked in. You keep getting sucked backed in. So no, that’s great. This is awesome stuff here. So with your current business and with you where you are now, what would you say with your employees and not that some challenges that you’ve gone through recently as far as growth or is it growth money, is it the systems, the processes? What would you say are some of the things that you’ve been working on?
Greg Helbeck:
That’s a great question. I think in terms of the growth, it is me kind of knowing when to let them figure it out and when to jump in. I think sometimes I get a tendency to where I want to jump right in and start putting on the gloves and fighting. But I know my team is capable of fighting on my behalf and then coming to me for advice. So that’s something as we’ve started to amp up our marketing, we’re getting more deals than we ever have and we’re really making a lot of progress. I am definitely, I come into this scenario a lot where I wanna just jump in and help and it could be the right thing to do now, but if I train them then that’s what I’m gonna do. Then they’re always gonna be relying on me jumping in when there’s a problem.
So learning how to properly responsibly, not get as involved as normal. Cuz I still do a lot of the stuff in my, I don’t do a lot of the selling and the admin stuff, but I’m still raising money. I’m still putting a lot of the deals together when they get crazy, I’m selling the deals, I’m selling them on the wholesale side, which doesn’t take a lot of time. I’ve been saying in this market a good wholesale deal will sell itself. I mean you don’t really try that hard to sell a wholesale deal 2022 with the way things are. But yeah, that’s been a challenge for sure. And I’m always looking for a way where when there’s a problem I always look at it like, okay, this might be a problem today, but once this problem gets solved I’m gonna have a gym to put into my puzzle. So now that problem can always get solved in perpetuity and then I’ll find another problem that I’ll solve and then the more problems I solve in my business, the more we’ll all grow together.
David Richter:
Yeah, no that’s really good. I think a lot of business owners struggle with that and once they’re growing a team, cause there’s a couple different reasons. Did you ever have a W2 job or were you an entrepreneur all the way? Basically.
Greg Helbeck:
I mean I was a lifeguard when I was in high school and I put floors in grocery stores when I was 19. I had never had a corporate job out of college. I did this since I was a young kid.
David Richter:
So work, we all know this, reading all the books we do and getting into real estate and whatnot that were conditioned from school to high school to college to those W two jobs. Then you start as the business owner, that entrepreneur that’s first starting out. It is, it’s all on your back. You’ve got a specific duty, you’re the one that has to jump in, then you have to unlearn all of that. You
Greg Helbeck:
Have to learn that. Yeah, it’s hard.
David Richter:
I have to go through that process. So what you’re talking about is great. I’ve seen it in myself. This is something you can take care of. I’m hiring you now to think and not to just do a job. So I’m hiring you for your brain, not just for your hands anymore. Once I heard that on a podcast for me I was like boom, that’s exactly who I need to be going with. The leadership team should be hiring thinkers, not the doers. So that’s always definitely revolutionary for me cuz I do, I have the tendency too, jump in, I could do this,
Greg Helbeck:
I can help.
David Richter:
It’s easy. Yeah, it’s easy. I could get it done. And I love what you said there. It’s the piece of the puzzle. Well now it’s in there. If they know that they’re empowered to do this and they won’t bring me as many of those questions or they’ll bring me solutions instead of questions now, which is definitely fun to see when they start doing that and they’re like, no, here’s what we’re doing and here’s how we’re doing. And it’s like, this is amazing. So I’m not
Greg Helbeck:
Little man. Totally. And another thing I’ve noticed too with hiring people and you gotta just figure out what they really wanna achieve, where they at. How can your business actually serve them? I was reluctant to hire people for a while cause I didn’t know if I had the system to fulfill their dreams and desires and you know, gotta get to know them, you gotta get close with them. So it’s like what do you want to achieve? What you’re looking to do? How can do I work for them and have them not work for me? I’ve always called ’em team members. I don’t say employees, I don’t say it’s our business. I’m big on language and how I communicate with people, especially people close with me. And that’s a big deal too because I wanna make sure that I have an opportunity for them to achieve what they want.
And I don’t want them to feel like they’re just capped out with me and I’m in some dead end scenario. It’s like I want to be able to wear when the company does really well, we all do well. I get more pumped giving them money on deals than I do myself sometimes because listen, I’ve been there, done that. I can wheel and deal. I’ve learned that skill set. But empowering others and when other people, I’ve noticed this, when you can get other people to make a lot of money within your organization, that’s when you’re grown as a business owner. Because if someone’s making six figures working with you mean then you. You know what I mean? So it’s, that’s where, that’s the level I’m trying to get to where I can have my team members making serious, serious money and helping.
David Richter:
Man. That is so good. There’s been so many good nuggets on this one. It’s just, it’s about yes, managing your cash, managing the people, leveling yourself up and learning a lot of the things you’ve learned, really becoming that leader, being excited about your team members, really good stuff. So I just have a couple final questions. Sure. Last minute advice here would you give to the real estate investors listening to here now that they’ve heard your lessons and all those things, what other advice that you want to impart?
Greg Helbeck:
I would say that depending on where they are in their journey, if they’re new, so I’ll give you if you’re new and then if you’re not new. So if you’re brand new, I would say number one thing if you want consistent income is you need to master the skills that actually matter in this business. The fundamentals, like the most basic skills, which is lead gen and communication. You need to master lead gen and communication. I’m not saying sales cuz sales, it’s just kind of BS communication, right? And you communicate well if you master lead gen and you master communication, you will earn income so you don’t have to have your job period. That’s what I would do. So figure out what lead gen you think is the gonna be the easiest for you to achieve and execute. And then just learn the basics of communication.
How to have a conversation with someone, how to qualify somebody, how to negotiate. There’s a lot of books on that. I do podcasts on that. And then if you’re not new and you’re doing deals, you gotta figure out number one, what do you want to hit? What do you wanna achieve? What is the target? Is it a net worth thing? Is it an income thing? Is it a deal volume thing? I don’t like the deal volume thing at all. I think the income thing is way better just from experience. What is the target? And then who do you need to bring on and who do you need to become as a person to get to that target? So let’s say the target’s a million net worth or something like that. Okay, who do you need to become as a person from financial spending standpoint to be worth a million bucks?
And then who do you need to bring on your team so you can earn the type of money so you can save the type of money to hit that net worth goal. And that’s kind of the advice I’d give someone who’s not beginning, who just they want to grow and get to the next level. No, and then also you gotta be consistent. One more thing, this is, if I forgot to, this is the most being consistent, one of my favorite books of all time, the Compound Effect by Darren Hardy. He literally lives down the street here in California. I drive by his house once in a while. Don’t tell anyone I know where he lives. <laugh> between you and me and anyone listening here, you gotta be consistent. And the consistency and the momentum are really what’s gonna move the ball down the goal line because you can do cold calling one day, but you’re not gonna be making the type of money you wanna make unless you’re cold calling every day. And it becomes part of your daily habits. 30 calls a day, that’s 60 calls in two days, that’s 90 calls in three days. You see where I’m going. And you do that for 90 days. I mean, it would be impossible to not do a deal if you, you know what I mean? If you consistently did the right things every day.
David Richter:
Yeah, no, that’s great. This is great stuff. So you’ve provided a ton of value here. How, this is the last question. How can the listeners provide value back, I know you’ve got Paved the Way podcast, I dunno if you’re looking for anything in your business right now, people, processes, systems, whatever, or just wanna connect with people, how can they provide value back?
Greg Helbeck:
Yeah, I appreciate it, man. It’s always cool being a guest on podcasts. I always tell the hosts, I’m like, I like being a guest more than being the host because I can just sit back and talk, right? I don’t have to be nervous about what to ask or whatever. But yeah, if they want to connect with me, they can follow me on Instagram, @Grego_37. That’s a pretty active there. Sometimes I will delete that app and I’ll be off the grid for a while, but for the most part I’m relatively engaging there. The podcast is called Pave the Way podcast. I have great guests like David on bring one episode a week out. And then if you wanna do business with me, if you want to maybe sell me a property like I’m a cash buyer, I’m not a fake cash buyer. So if you’re in San Diego or you’re in the Hudson Valley region of New York or in the eastern Pennsylvania market, if you wanna sell me a house, greg@velocityhousebuyers.com, I’ll buy it if it’s a good deal or if you want a JV on it, I have great lists there. So I’d love to work with some of your listeners. They wanna do some real estate transactions together, so Awesome. That’s the best way to get in touch with me. There
David Richter:
You go. There’s how you can get in touch with Gray. Great stuff here today, man. Thank you so much for being on and appreciate you getting the message out there too of profit first.
Greg Helbeck:
My pleasure, David. Thanks for having me on
Outro:
This episode of The Profit First for REI podcast is over, but there are plenty more where that came from. Are you ready to learn how David and his team can help implement the Profit First system in your business? Schedule a discovery call at simplecfo.com right now. We’ll see you next time on The Profit First for REI podcast with David Richter.
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