Episode 151: Zero to a Million – How a Strong Mentor, Great Partner & Profit First Got Him There with Michael McDonald
The Profit First REI Podcast
January 30, 2023
David Richter
Summary:
Having a good life partner is also one of the keys to real investing success.
We have Michael McDonald, a well-respected real estate investor, who shares his journey from having a debt of 45,000 and how in 2022, he was able to buy his dream car through his success in real estate investing.
Listen as Michael shares how having a good life partner, trusted mentor, and Profit First helped him achieve a million deals from having zero deals.
Key Takeaways:
[01:32] Introducing Michael McDonald
[02:06] Michael Shares His Journey in Real Estate and What He Do
[04:20] The Moment He Knew Her Wife is Pregnant
[05:46] Michael’s Experiences in His First Real Estate Deal
[15:02] Michael Discovered Profit First
[18:28] How Profit First Impacts Michael’s Real Estate Investing Journey
[24:43] Michael Shares His Plan for 2023
[28:20] Things He Has Done Differently When He First Started in Business
[29:21] Connect with Michael McDonald
Quotes:
[15:47] “Books are a disaster if you don’t make it a priority.”
[21:11] “Treat yourself, take a trip, go on a vacation. You earned it.”
[25:51] “To have a team, the business can move on without your full attention.”
Connect with Michael:
Website: https://www.thevirtualmillionaires.com/home
Socials: https://www.instagram.com/michaelmcdonaldrei
Tired of living deal to deal?
If you are a real estate investor or business owner 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 I 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:
Michael McDonald:
The first thing I did was I just followed the book. I set up all the accounts, and as soon as we got the accounts set up, we had fumbled through the allocations for quite some time. It was very inconsistent. And then I realized that if this is gonna work, we have to take it serious. And so we finally, you know, we had a spreadsheet set up, we, at the end of the month, we, uh, distribute all from the income account. We do, we follow the thing. And that’s when it started to get fun.
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:
This episode is going to bring you a ton of value. If you have done a million deals or zero deals, you will get something from this because Michael tells his story from the lowest of Lowe’s where he was 45, $50,000 in debt. His wife just told me he was pregnant. And how in 2022 he was able to buy his dream car and how his journey in real estate, but also Profit First has helped him immensely. I believe this episode will give you a ton of hope and a lot of people will resonate with his story because a lot of people have been there and I hope that this resonates with you. Thank you so much for listening. Hey, hey, welcome to the prophet first REI podcast. We have Michael McDonald here. Super excited about this one. He and I are in at least one mastermind together, if not more, but that’s where we get to see a lot of that stuff behind the scenes. And I know he’s very well respected in the real estate investing circles. Michael, thank you so much for being here today.
Michael McDonald:
Dave, good to be here, man. Excited to jump on the show.
David Richter:
Yeah, excited to have you be here and then tell your profit first story. But before we get into that, tell a little bit about what you do with Rocket Home Buyers. You’re getting into the education space too. Just tell a little bit about your journey and real estate and high level overview.
Michael McDonald:
Yeah, so I think, uh, I have to take people back to how I got into real estate and uh, maybe you’ll get into that too, but I think it’s important for people to understand, um, that, because the rest will makes some sense then. So it all started when I found about, found out about education or real estate investing four years ago.
David Richter:
Yeah.
Michael McDonald:
And I ended up at a real estate seminar with, um, no idea that I was going to be jumping into real estate. And what they sh uh, showed me there was that you can make money in real estate with little to no money down. And
David Richter:
Nice.
Michael McDonald:
I was talked into, go into the three day, I think we spent 2000 bucks to split it with a buddy. And what they said at that was like, Hey, you can cash 20, 30, $40,000 checks without even owning the property. I’m like, is this real
David Richter:
<laugh>?
Michael McDonald:
Like, seems too good to be true for me. But they pitched it and at the time, David, I was completely broke. Um, I had no money to my name. In fact, I put the 2000 on credit to even be at that next event.
David Richter:
Nice.
Michael McDonald:
And at that next event, they said, Hey, um, if you’re gonna be successful in this business, you’re going to need some help. And um, here’s an offer we can show you how to get the money to pay for it. So, um, long story short, to help me raise, I think it was like 40 or 50,000 bucks on credit cards because I had decent credit at that time, um, into my credit tank. Naturally, once I got that money and I bought the education and put it all on there. So that was my entry to real estate. And when I got home from that, uh, event, David, my wife told me that we’re expecting, so now I have $40,000 on credit. Um, had no clue how to wholesale a property or even do real estate at all. And that was my entry into real estate game
David Richter:
Alright. That is a, I think that’s gonna resonate with a lot of people cuz I think a lot of people start at some point there, at least with education or something on that side of things. But, uh, which is, I think it’s hilarious to see you’re going to this thing to buy real estate with a little to no money down. And now what you’re into this for 45, 40 $6,000 or something at, at this point. So, you know, you haven’t bought a property, bought a lot of education, but, and then you were expecting to, okay. How was that moment walking in the door, you know, and her telling you you were pregnant? Like what was going through your head at that point?
Michael McDonald:
Dude? Uh, ab my heart just dropped. I mean it was
David Richter:
okay.
Michael McDonald:
It, I was a wreck because there was all of these emotions of excitement, um, fear, um,
David Richter:
Yeah,
Michael McDonald:
The uncertainty of not knowing what it’s like to be a new dad. And so, um, it was a whirlwind man. Um, and it made me realize that okay, if I wasn’t motivated before I found out that news, I’m definitely motivated to take action and figure this thing out now.
David Richter:
Yeah, that makes sense. So let me ask you this, did you have any financial education before this not real estate? Cuz this sounds like it was more real estate, but just any financial education before this, uh, either on your own or in school or from your parents or anything?
Michael McDonald:
That’s a great question. No, I came from a lower middle class family. Um, I went to college for nutrition. I did graduate, uh, with my degree in nutrition. But I’m sure you can imagine how much education they taught about finance in a nutrition degree.
David Richter:
<laugh><affirmative> Um,
Michael McDonald:
Yep. It was none. And so I, I had no experience about running a business, real estate, any of that before that investment was made. Obviously it was an emotional investment looking back.
David Richter:
Yeah. Okay. So then let’s talk about that a little bit. So you made the investment, your wife has now laid the bomb on you that the glorious bomb that
Michael McDonald:
yes<affirmative>
David Richter:
She’s pregnant. And then what happened from there? You said you were motivated, so did you get your first deal or like what happened from there to get you to the next level?
Michael McDonald:
Yep. So this is where the transition to rocket begins.
David Richter:
Okay.
Michael McDonald:
Um, the first year I was following their instruction, I was making offers on the MIS I was failing forward as they say.
David Richter:
Yeah.
Michael McDonald:
And after six months my wife looked at me and she says, this is not working. Um, the minimum interest payments were crushing us, uh, barely making ends meet. And I figured out that I needed to do something different. And so I found a local mentor, somebody who was actually boots on the ground who had experience. He actually had mentored Rob. He had mentored through Rich Dad Port Dadd, which is Robert Kiyosaki’s
David Richter:
okay
Michael McDonald:
Company.
David Richter:
Yeah.
Michael McDonald:
And so he’s like 2,500 bucks, I’ll take you into properties, we’ll show you how to negotiate, we’ll show you how to find them. All this stuff. Cause the $45,000 that I spent just wasn’t cutting it for some reason. I don’t know
David Richter:
yeah
Michael McDonald:
What he clicked it just was old school. It wasn’t well it wasn’t working. So long story short, I partnered with him on my next six deals. As soon as we got into some properties, he helped me negotiate. We got my first deal and it fell through.
David Richter:
hmm
Michael McDonald:
And that was about seven months in. Then finally after that, I got a deal. It cash a $20,000 check on a wholesale deal. It was a fourplex and it completely changed my belief and it showed me that this is possible. And that was the whole time I was working a full-time job in this transition.
David Richter:
Okay. So let me ask though, that property that you actually made, the 20,000 on what month in, was that? So seven months you got your first deal, but it fell through. What was the month mark for that first deal where it actually closed?
Michael McDonald:
It would’ve been month eight, cause it took about 40 days to close, give or take. And what it was nothing, but it was not smooth whatsoever.
David Richter:
Yeah. So that was eight months into this journey. Does that mean you’re a month away from having a baby or had, you know, like or did this overlap a little bit or like what, where was the timeline of the little one coming?
Michael McDonald:
Yeah, so the timeline was, it was August that I got the deal and the check.
David Richter:
Yeah.
Michael McDonald:
It was October when my daughter was born.
David Richter:
Okay. Okay. So
Michael McDonald:
Eight months. The credit cards were stacking up, man.
David Richter:
So that $20,000 had to be a huge relief for your guys.
Michael McDonald:
It was a huge relief. Um, I did split that with the guy cuz I, the agreement was we’d do deals together.
David Richter:
Was it 50 50 split?
Michael McDonald:
Yep, 50 50.
David Richter:
Okay. So you got 10 Ks. 10 K’s still not bad for your first deal.
Michael McDonald:
Yeah, I mean it was about half as much as I was making at my full-time job at the time. Yep.
David Richter:
You mean like for the year you were making 20 k
Michael McDonald:
I was making like 30,000 as a Nutrition. It was a dietetic technician at a hospital. Yep.
David Richter:
Oh wow. Yeah. You were barely making ends meet.
Michael McDonald:
Dude, I was scraped to buy, me and my wife and I had a house payment. Uh, we just bought probably
David Richter:
yeah
Michael McDonald:
A year before that. And, you know, graduating college.
David Richter:
Yeah.
Michael McDonald:
Your first job into after college, they don’t pay you a lot of money. And I was talking to the dieticians cause I was considering getting my master’s degree and they’re like, yeah, we’re making like 45,000. I’m like, I can’t provide for a family doing this.
David Richter:
Right.
Michael McDonald:
Which is what prompted me to jump into, real estate in the first place. But what ended up happening, David is I had wholesaled the same guy about five deals.
David Richter:
Okay.
Michael McDonald:
And that guy ended up becoming my business partner in Rocket Home Buyers. And at the very end of that year, I had wholesaled about seven or eight deals. Um, so from weeks August,
David Richter:
August to December, then
Michael McDonald:
December.
David Richter:
Okay.
Michael McDonald:
I started catching some momentum. I started figuring this thing out cuz I started having some money to be able to put back into marketing.
David Richter:
Yeah, that makes sense.
Michael McDonald:
And so
David Richter:
How much did you make on those seven to eight deals? Do you mind me asking? Like, between the split
Michael McDonald:
With him, I had probably made 50,000. We’re probably meet a hundred thousand together and then Okay.
David Richter:
Together then. See that’s so awesome. I love that. You know, like
Michael McDonald:
yeah,
David Richter:
Six months can change your life if you put that work in, but okay, I sorry to interrupt you. That was just very curious of like what you were able to do in that last six months of the year.
Michael McDonald:
Yeah, so what it, what it was is after that, that money was made, my wife actually came to me and she says, so I can tell that you’re starting to get this figured out. However, it doesn’t, it seems like you’re getting burnout. Like, she looked at me in the eyes one day after work, I’d work from eight to five. I came home, I would eat dinner and I’d go cold call and I would get back to work on my business. And she’s like, there’s, there’s no way that you’re gonna do this forever.
David Richter:
yeah
Michael McDonald:
She’s like, you will literally kill yourself. Because I was just drained. I was waking up before work until nine. It was just ridiculous. And so long story short, she says, you gotta quit your job. And I’m like, well what do you mean that sounds terrifying? And she’s like, well you made more money this year doing this part-time than you did at your job. She’s like, you’ve gotta quit your job. I’m like, okay, well how are we gonna do that? I’m like, we still have credit cards to pay back
David Richter:
<laugh>.
Michael McDonald:
And so, uh, long story short, uh, we decided it’s time to, well let me rewind real quick. I had partnered with my business partner. He quit his job in January. So he went full-time and I’m like, I need to get a little bit more money. I needed some more cushion to be able to do that. And she’s like, well we can sell a house. I’m like, you wanna sell a house? Okay, I didn’t think that you would wanna sell a house, but if that’s what you want to do, then we’ll consider it. So David, this happened so fast. Uh, it was March and my wife came to me with that idea and we listed her house a week later. We sold it two days on the market. We cashed out, I think $30,000 of equity paid off the rest of the credit cards. The day that that money hit my bank account, I put in my two week notice, not my job.
David Richter:
Nice. That’s awesome.
Michael McDonald:
And then the rest is history man. Uh, this is obviously a lot that goes into the next part.
David Richter:
Sounds like you have a great life partner by your side.
Michael McDonald:
Dude, I can’t even begin to tell you how thankful I am for her. And then it’s not like that for everyone. Right?
David Richter:
Yeah.
Michael McDonald:
Like for sure the support system, the encouragement, the belief. It was more than I think I had in myself at that time.
David Richter:
<laugh>. That’s awesome. I mean, not for you not believing in yourself, but for her being there
Michael McDonald:
By yourself. Well I’ve changed a lot since then. Well, that’s, how was that a little
David Richter:
<laugh>? Yeah, for sure. Oh man, that’s good stuff. I let what’s her name, just so she gets mentioned on here. You gotta
Michael McDonald:
Yeah. Shout out to my wife. Regina.
David Richter:
Regina. There we go. Yeah, Regina, this is why we’re even on this podcast probably. So thank you to you and I’m pretty sure she might be able to hear us cuz he’s in his home office. I heard the kids beforehand too. So how many kids do you have now? Do you have multiple kids?
Michael McDonald:
I have two year old, a four-year old boy,
David Richter:
Two-year old and four year old. So it’s, yeah. Wow. And uh, that’s awesome. I love that journey. That sounds like where a lot of people could have gotten tripped up by that, the $45,000 in debt, you know, getting that first deal and then having it fall through. I can’t imagine that call cuz like if you’re doing the deals you expect that call on deals that happen, but like your first deal, it’s actually happening. So I’m sure there was a lot of emotion there. And then actually doing those deals sounds like you, so those seven to eight deals at the end of the year, I do have one question there.
Michael McDonald:
Mm-hmm. <affirmative>,
David Richter:
Was it you negotiating at that point or was it your partner negotiating those deals still?
Michael McDonald:
I was negotiating
David Richter:
By that, but
Michael McDonald:
Point, 80 to 90% of the deals I would call him for advice on
David Richter:
yeah
Michael McDonald:
Specific situations. But I would find the deals, I would negotiate the deals and then, um, he was benefiting from the, just the fact that he showed me
David Richter:
yeah
Michael McDonald:
How to get those deals in the first place. But I honored my six with him and we split
David Richter:
yeah
Michael McDonald:
Him 50 50 and yeah, he made about 50 grand that year from just hanging out and
David Richter:
yeah.
Michael McDonald:
Showing
David Richter:
Me the way, being able to teach you. No, that’s awesome. That’s where I think a lot of value can be for if you’re listening to this as well. He invested in himself a lot. Michael did, then he went to a mentor and had to dish out some more money upfront plus some of the deal profit. Michael, do you regret any of that in that first year?
Michael McDonald:
Absolutely not. I learned so many valuable skillsets. I mean, my belief system changed the way that I spoke to sellers changed. Um, it changed everything like by having somebody who had 25, 30 years of experience in the real estate business, literally as a phone call away.
David Richter:
That’s awesome.
Michael McDonald:
Yeah.
David Richter:
I love that. So I’m not promoting mentorship on here, like Yeah. You know, like I’ll eventually mentor people but like, um, that’s not what we’re promoting on this show. But I do want to say that if there is a local person that you can sync up with that is just so good. And then yeah. All that journey, I think there’s just so much that, uh, people can resonate with there of like, Hey, I spent money on this education didn’t really get anywhere. But then, you know, stick it out if that’s what it’s meant for you. So I thought that was really good. So let’s talk, it’s the profit first for real estate investing show. So let’s talk about post year one and then selling your house, getting into it. When did Profit First, either Mike Mcow it’s book or my book, cross Your Path and you started to get that mentality?
Michael McDonald:
It was the end of the first year in business with Rocket. Um, I have to mention this cuz I think this is important.
David Richter:
Yeah sure, go ahead.
Michael McDonald:
Because after we got our first couple deals in as Rocket my business partnership,
David Richter:
yeah
Michael McDonald:
I asked him if I could move to Las Vegas from Nebraska, which is where I was living. And so not only did I quit my job, but I moved across the country simultaneously.
David Richter:
Okay, Yeah,
Michael McDonald:
Great idea. Right?
David Richter:
Right.
Michael McDonald:
But um, what it forced us to do though David, is it really taught us to, we’re gonna have to delegate, we’re gonna have to get people in place. And the biggest thing that I learned, uh, through one year in business and a lot of deals later, cuz we were just like going, cuz we both had to make this work is books are a disaster if you don’t make it a priority. And we were making some decent money.
David Richter:
Yeah.
Michael McDonald:
Um, but we didn’t know we were making decent money.
David Richter:
Okay.
Michael McDonald:
We always felt broke and poor. And after the first year we’re like, okay, well we did about 30 some deals,
David Richter:
yeah
Michael McDonald:
35 deals, and it just doesn’t seem like we have any money. We’re putting all of our money back into marketing. We’re have all of this, this money out on, on these flips. Um, where did it all go? I’m sure I see so many people where where’s all the money?
David Richter:
Yep.
Michael McDonald:
And that’s what it felt like. And it was really scary because we knew we were making money, but we just didn’t know where it was. And I was putting together spreadsheets of like, okay, we have all these properties. They got this much ment on this property with all these renovations and it was just like super unorganized. There was no thought process behind it. And then it was 2020, I think I had heard you had an event or a podcast or something and then I bought your book and it just clicked. I’m like, well of course. Why wouldn’t you pay yourself first? Why wouldn’t you pay yourself 10%? You work hard, you take a lot of risk in this business. Gosh, I’ve taken a lot of risk.
David Richter:
Yeah.
Michael McDonald:
Uh, over the last four years I’ve, we’ve done hundreds of deals. We deserve to get 10% of the profits.
David Richter:
<laugh>. Right.
Michael McDonald:
<laugh>.
David Richter:
Oh man. And I, if anything I’ll just, if I could jump in right here, being able to hear your story and that journey that you went on, I think everyone listening would agree that if anything you deserved to be able to make money from your business because you were able to go out for like a bunch of money in debt. You know, having your child that first year when now this was going on to getting those deals under contract to then the next year doing the 30 deals and actually not just now it’s proof of concept. Not only could you do the seven to eight deals, you could actually run a business and do 30 deals in a year and get that out there. That which now it’s like at the end of that year, why aren’t we making ’em out? Like where is it all going? So I think your story will resonate with a lot of people because it’s like, hey, well look at all the stuff that we had to go through. Like, why in the world is this not making me feel better than when I was working my nine to five or my eight to five? So that, I think that’s really key. So thank you for saying that cuz you do, you do deserve that. And if you’re listening to this too, you’re putting that hard work into it, you deserve it as well. Now I appreciate you bringing that up. I wanna give people hope. So, okay, so keep telling the story. Okay. You read it, what, did anything change immediately or was it like, hey we’ll get to it? Or was it like, Hey lights, the lights are on. Go from there.
Michael McDonald:
Yeah, I wish, I had a different answer for you on this part.
David Richter:
Okay. <laugh>
Michael McDonald:
It didn’t change immediately. So we probably kept doing what we were doing for another at least six months. And I was telling my business partner about it. I’m like, dude, like we shouldn’t be feeling like this. We shouldn’t be wondering where all of the monies that we’re flipping a bunch of property, um, we’re making them decent money. I think, that the next year we had made a million bucks, like
David Richter:
okay
Michael McDonald:
On our tax return after our accountant figured out how to clean all the books up
David Richter:
<laugh>.Right,
Michael McDonald:
And um, I was like, where’s it all at? You know, and at the end of the year I’m like, here’s profit, there’s this profit first model. I think I’d sent him your book. I’m like, read this book. We need to implement this and I don’t care what it takes to do it, but we’re gonna implement it. So the first thing I did was I just followed the book. I set up all the accounts and as soon as we got the accounts set up, we had fumbled through the allocations for quite some time. It was very inconsistent. And then I realized that if this is gonna work, we have to take it serious. And so we finally, you know, we had a spreadsheet set up, we, at the end of the month, we uh, distribute all from the income account. We do the, we follow the thing. And that’s when it started to get fun because we started seeing, okay, we are making money. I can see that from the top line to here. I can allocate this much money to the profit account. And we decided to do a quarterly distribution and one of the first quarterly distributions that we made, David was probably earlier this year.
David Richter:
Okay.
Michael McDonald:
And this last, well sorry, last year.
David Richter:
Yeah.
Michael McDonald:
- It’s 2023. So it was last year. And I just remember the quarterly distribution. I was so excited at the end of the corks I’m like, oh my gosh, like this is awesome. Like this distribution’s gonna, this is awesome. I don’t even know. Like I can buy pretty much whatever I want with this. Like, and I treated myself and we can get to that, but I bought myself a a pretty sweet, it was like a dream car of mine.
David Richter:
Nice.
Michael McDonald:
Um, this last year. And it made sense cuz it was also a tax deduction from the section 1 79 6,000 pound car for are you?,
David Richter:
Yeah, you don’t have to convince me that it a good idea. This is from your profit account. Spend it on whatever the heck you
Michael McDonald:
Want. I know, but I didn’t even spend it
David Richter:
<laugh>
Michael McDonald:
All because, um, I financed it cause it was
David Richter:
Nice. Oh, even better. Yeah.
Michael McDonald:
Yeah.
David Richter:
I love it.
Michael McDonald:
But I could have bought it in cash with the profits from the last year. So it was all of that to say it was an absolute game changer because it showed me that we did make money and you preached this to not try to invest that money. Cause I wanna invest it, I wanna keep reinvesting it, but it’s like, no, treat yourself with that. Take a trip, go on a vacation. You earned it. And so yeah.
David Richter:
That’s awesome. Well, I love to hear that. So let me, let me ask this then, since your wife has kind of gone on this journey with us here, and especially with you specifically, but Regina, on that first year when you did the 30 deals, how was she feeling at the end of that year? Was she thinking like, Hey, you did a lot of deals, but where’s the money? Like were those types of talks happening at home or not really?
Michael McDonald:
Not really. We’re pretty open with each other about how things are going. That’s good. I definitely don’t let her feel like if things are feeling tight, I do my best to not let her feel that. But I’m also open about it too. And so I feel like she thought we were doing pretty good.
David Richter:
Yeah.
Michael McDonald:
Um, because we were,
David Richter:
yeah, for sure.
Michael McDonald:
But we just didn’t know where all money was. We were tying up our own cash for the down payments
David Richter:
<laugh>.
Michael McDonald:
We were tying up our own cash for the renovations. And when all of those flipped sold, I told my business partner, I said, we’re never doing that again. We gotta use other people’s money.
David Richter:
There you
Michael McDonald:
Go. So we know where our money’s at.
David Richter:
Oh man, there’s so many points here. Like this it feels like the perfect case study just for like 180 degrees, like all the way around turning around because you went from all investing, you invested in yourself, which was great, but then you invested in the right person and then got you to the first deals. And then it was like, okay, the first year in where the heck’s the money and then getting the cash in order. Okay. So it wasn’t really an issue at home that first year, but how about this last year when you were able to actually enjoy the money 2022. Was she able to see that this year was a little bit more fun for you and for the business?
Michael McDonald:
Absolutely.
David Richter:
Okay.
Michael McDonald:
And that was, I try to, I shouldn’t say I try, I set an intention every year and
David Richter:
yeah,
Michael McDonald:
Last year my goal for the year was to have four have more fun Okay. And make more money. And I did just that. I traveled the most. We’ve traveled, we’ve went on a bunch of vacations and we made the most money we’ve ever made in our real estate business.
David Richter:
Oh yes.
Michael McDonald:
And so my wife gotta enjoy the fruits of the labor. Um, we gotta take ourself out to eat to really nice restaurants and really just indulge and really enjoy the fruits of the labor of the business. Which was amazing.
David Richter:
That is amazing because you see a lot of this stuff on Facebook. Okay. Or like Instagram or TikTok, wherever, and you see people taking those trips and you’re just, and you automatically think wealth and that they are wealthy. That’s where I love when Michael, like when you come on or other people come on and you say, Hey, we’re having fun and we’re doing this because you actually have the money <laugh>, you know, and you’re not ruining your business, you’re not ruining your life, you’re not going into a ton of debt. It’s like, yes, this is true wealth. So I just wanted to point that out too, that it is fine to post stuff on Facebook to buy that dream card, to do the things that you want to do. So, and Michael’s just a, a shining example of this. This is, has been a lot of fun. So, okay, so then 2023, what are your plans for this year? You’ve got now some education pieces as well too. I’d love to know what the Virtual Millionaire show is about. Like if you can’t, if you’re just listening to the podcast, he’s got a big bright neon sign behind him, which looks really good. So look at us up on YouTube for that. But talk about that, like where you headed this year, you know, real estate and you know, the education piece as well.
Michael McDonald:
Absolutely. So I am, first and foremost is I’m not getting into the education space because I need to make money to provide for my family. I feel like a lot of the educators out there, um, may just do education and that’s great if that’s what you wanna do. But for me, I’m running a business. I have 10 full-time employees.
David Richter:
Wow.
Michael McDonald:
Real estate. I eat, sleep and breathe it and I do it. So that’s my baby. That’s what bought me my dream car. That’s what I absolutely love. I’m passionate about real estate investing. And so our goal is to double our business from last year. So in our real estate business, rocket home buyers, we wanna do 4 million in revenue and we wanna do 200 deals. We did 93 deals last year and surpassed 2 million in revenue. So the goal is to double that.
David Richter:
That’s awesome.
Michael McDonald:
So that’s what I’m really laser focused on. Um, and then on top of that, I’m extremely excited about the Virtual Millionaire. It’s a brand that I’ve created where we show, um, real estate investors how to start and scale a business. Okay. So if you are in your business, um, we basically show you the departments that you need, how to remove yourself from the day-to-day to have a team that can go out and buy houses and the business can move on without your full attention. So for example, right now I have five acquisitions who are in my system, making calls, talking to sellers, buying houses as we speak. And the goal with the virtual Millionaire Man is just to impact as many people as I possibly can. Um, I know what it felt like to be at the low, to struggle to get through it. And all of the things that I’ve invested in in the last several years has taught me a lot of lessons. I’ve learned a lot of things that I would not do and I want to help other people avoid some of those pain points and uh, challenges. And so, um, my goal is to impact as many people as I possibly can.
David Richter:
Sounds like one of the things you need to tell them is get a Good Life partner. <laugh>, that was, that seemed like that was very key in that first year. Cuz you know, if you, if you didn’t have the right support right at, on the home front, it could have had a very different story. We would not be talking here. This is probably the bottom line. So
Michael McDonald:
sure man
David Richter:
I, that’s a huge one, number one. But then I, some of the things I’ve pulled out from here is the mentorship. Like you found a local mentor that was able to like, sounds like you went on appointments with him and hel saw him negotiate and do that type of stuff, which is awesome. So that was a huge tip. I think <laugh> going into the business, even after that first deal falls apart, like I feel like that was a low emotional point. Probably seven months into it, wife is very pregnant, you know, like here we go, like this deal’s falling apart, what the heck? So then you did seven to eight deals after that, which is awesome. Then the next year getting into that and actually expanding, but then realizing, hey, something’s missing. Why I don’t I not have cash? Then going through that, and actually I love what you said, you started to implement Profit First like a lot of people do when they self implement, but they are inconsistent, they’re focused on the deals. And I get it, you’re the business owner, but then you said, if we’re gonna actually make this work, we have to take it serious and be disciplined. So I thought that was great too because that discipline, it sounds like this last year has cashed in immensely with the new car, the most you’ve ever made, the most you’ve ever kept, the most you’ve been able to do with your family, which is amazing. So I think there’s been a ton of value here. I just have two final questions. Number one, is there anything you would do different at that first year when you first started your business? Officially
Michael McDonald:
I would’ve found a, uh, I would’ve found somebody to provide value to, even if it was splitting the deals right away.
David Richter:
Okay.
Michael McDonald:
I had heard that I should be connecting and going to local meetups and looking for people who are players who are actually doing deals, I would’ve found that person immediately and I would’ve done everything that they said to do and I would’ve brought them all the deals until I figured out how to do it myself.
David Richter:
There you go.
Michael McDonald:
So I wouldn’t been wasted seven months
David Richter:
<laugh>. Right. That sounds like a great first step for a lot of people. And I would just say too, if you had profit first from the beginning, it’d probably be a different story as well that first year. So that’s another thing. But, uh, okay, you’ve provided a ton of value here. So then how do we get in touch with you? How do people get in touch with you? Like how do they provide value back? Because I wanna know about the virtual millionaire, how to connect there and then if they just wanna follow your journey or wherever, you know, like, cuz I love seeing your stuff. I saw that exotic car, I’m like, this is awesome. Like, I know that he’s following this stuff and that, you know, this was his reward. So how can they follow you at the different places or the virtual millionaire?
Michael McDonald:
Well, I gotta thank you, David, because
David Richter:
yeah, for sure.
Michael McDonald:
I honestly, I think it’s so crazy and silly to me that people need permission to take the profits and go treat themselves, but growing up in a different environment
David Richter:
Yeah,
Michael McDonald:
You just don’t feel like you deserve it sometimes.
David Richter:
Yeah.
Michael McDonald:
And when I saw that 10% distribution from our best quarter ever, I was like, I could buy my dream car. This is awesome. I’m gonna do it. And I did it and I did. I, it was, you know, anyway, long story short, thank you because I think a lot of people would probably not be doing this stuff if you didn’t teach this. And so, um, working people learn more about Me. The Virtual Millionaire Show is a great place to listen to of the podcast. Um, you can follow me on Instagram at Michael McDonald,REI and if you wanna follow my content on Facebook, it’s The virtualmillionaire.com And, um, excited to share and help more people, um, by some of the lessons I’ve learned.
David Richter:
So Michael’s the real deal, so follow him. He’s doing the deals and he is also gonna show you these things. I mean, if you got value from this podcast I did, I loved hearing his story, but then all the twists and turns of like where he is today. So follow him the virtualmillionaire.com. Also the different Instagram handles and the Facebook, we’ll make sure we put that in the show notes. And if you are like Michael and you’ve had any of those types of experiences growing up, I don’t deserve the money. I’m poor, I don’t, you know, like money doesn’t grow on trees. If these were some of the things that were fed to you, like is fed to a lot of us in the poor middle class mindset, we need to get out of that. I want you to enjoy your business. So if you needed the Profit First System implemented what you can head over to simplecfo.com. We would love to be able to help you and be able to put someone on your team to implement Profit First. And even if we don’t have that person, we’d left to pin it to the right person. We just wanna provide value, even if it’s just listening to this podcast and you got one nugget out of here and you took it and then you ran with it. I mean, Michael went out there and he implemented it and got serious about it and has reaped the rewards this last year. So that simplecfo.com remember to make profit a habit in your business. And Michael, thank you so much for being on the show.
Michael McDonald:
Thanks again for having me, David. Appreciate it, man.
Outro:
This episode of The Prophet 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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