Episode 169: How Noah Has Developed Security, Control, and Avoiding Ego Investing
The Profit First REI Podcast
April 3, 2023
David Richter
Summary:
Today’s guest is Noah Evans, a realtor and the investment director of Tree City Home Buyers. He also hosts the Chasing Freedom Podcast where he interviews top sellers in the industry, explores knowledge on home buying, renovation, house flipping, and more, and passes on valuable tips to his listeners.
Noah’s journey is a true testament to the power of Profit First and how it can help you achieve financial freedom, clarity, and control in your business, no matter where you are in your journey.
He shares his inspiring story of how implementing Profit First saved him from bankruptcy within the last year and talks about how hopeful he is for his current and future ventures.
This is a great episode for investors who’ve gone through similar struggles! Join us as Noah shares his Profit First journey, his real estate journey, and his insights on achieving financial freedom.
Key Takeaways:
[00:40] Introducing Noah Evans and His Background
[06:21] On Implementing Profit First
[11:57] What Attracted Noah to Profit First
[16:05] How Profit First Saved Noah From Bankruptcy
[19:37] How Noah Has Developed Security, Control, and Avoiding Ego Investing
[26:38] Advice for People Who Want to Implement Profit First
[29:52] Connect With Noah
Quotes:
[11:05] “In a time of chaos, you fall back to your systems, you fall back to your level of training… I started training myself to be more methodical in the placement of funds on separation of accounts, on treating it like a business and not like a hobby. These are all the things you talk about in the [Profit First] book.”
[19:45] “[By implementing Profit First,] not only do I have more peace, I [also] have more control…If we really boiled down entrepreneurship, I would say a lot of people get into it in real estate…because they want control—of [their] time [and] finances.”
[32:19] “Accountability at the start is really important…Willpower comes and goes, right? Like, this morning, I woke up late and my willpower to go to the gym was low because I just wanted to get to my day. But I have accountability, [so I show up anyway.]”
Connect with Noah:
Instagram: https://www.instagram.com/noahevans_realestate
Podcast: https://www.youtube.com/channel/UC745tjFMvtRV3oo8F8DPrIw
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:
Noah Evans:
But I started training myself to be more methodical on the placement of funds, on the separation of accounts, on treating it like a business and not like a hobby. These are all the things you talk about, you know, in your, in the book. And so,
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:
Welcome to the Profit First REI podcast. Have Noah Evans on today, literally telling you how Profit First saved him from bankruptcy within the last year and what he’s doing now, making more money and more profit on, I think a third of the less deals than he did in 2022, and what he’s projected to do for 2023 and within the last six months. So thank you so much for listening. I hope this show is an incredible, a blessing and a hope for you as well too, that no matter what, no matter where you are on your journey, you can implement Profit First and you can get the financial freedom and that clarity and that control that you want from your company. Please enjoy Noah Evans. Man, I’m excited about this one because <laugh>, he was already telling me a little bit about his journey and a little bit about his story, but he was only giving me it a little taste even before this episode. So I get to listen to the whole thing and his prophet first journey, his real estate journey, just, and he has the Chasing Freedom Podcast, make sure you check that out too. I’ll make sure at the end that you can drop the links and everything. No, but thank you for being on here today,
Noah Evans:
Dude. Thank you for, uh, giving me the opportunity to come on, spend some time with you. Uh, I’ve admired your journey and everything you’ve built in real estate. So it’s just fun. It’s fun to also from the host perspective, appreciate how well you run your podcast. And I don’t think most people see that. So
David Richter:
yeah,
Noah Evans:
<laugh>,
David Richter:
Well, thank you. It’s been, oh my gosh, it’s been a long road. So that’s like, there’s no overnight success, right? It’s like,
Noah Evans:
Doesn’t happen.
David Richter:
Grind it out and getting the mistakes all out there, but, and I still make them. But Noah, tell people just a little bit about your background. We’ll dive into the fun stuff, but I want people to know if they don’t know you from Adam, like make sure that they can get a good overview.
Noah Evans:
Yeah, absolutely. So, um, you know, life can change pretty quick. For those of you that are just getting started, I mean, you’re, what I’ve seen time and time again from different entrepreneurs is that if you can commit to something for like 24 to 36 months, your entire life can change. But you have to be fully committed. So, like, really my real estate journey didn’t start all but maybe four and a half years ago. And that’s when I decided I was going to do a real estate deal. I didn’t know how, I didn’t know what I just, somebody from my college was doing real estate. And so it felt real to me. I’m like, dude, if he could do it, then I could do it. Cuz we came from the same college, so,
David Richter:
Awesome.
Noah Evans:
Obviously maybe there’s some s i honestly believed at the time that there was success tied to the college, and it was just a random school in southern Utah.
David Richter:
Okay.
Noah Evans:
But I was like, okay, this college is breeding that could go out and do real estate, so I could do it. Right.
David Richter:
That’s cool.
Noah Evans:
So fast forward nine months later, I, of me fully committing to doing real estate and I hadn’t done a deal. I was about ready to quit. I’d blown my budget on marketing. It was all direct, uh, mailers. So I’d done driving for dollars and mailed that, uh, list. Nothing came of it. Um, mostly because I didn’t know how to close the deals.
David Richter:
Mm-hmm.
Noah Evans:
So the marketing actually worked, but once I got in front of the sellers, I really wasn’t educated well enough and I didn’t have the sales skillset to close and bridge that gap.
David Richter:
Yeah.
Noah Evans:
So nothing happened nine months. And then I’m like, all right, I got two good leads. I’m gonna follow up with these people until they’re so sick and tired of me. They freaking put a restraining order out on me. Luckily none of that happened. One of the guys turned out to be a con, like a, he was like a con artist. He told me he only owned this one property and he had to get all this money for it because it was how he was gonna pay for his granddaughter’s surgery. Turns out he owned like a hundred properties and none of that story was true. So we never close the deal with him. The other one was a sweet little old lady who had a disgusting home. I didn’t mean that in a rude way, but like, I couldn’t actually step inside the home because it smelled so badly of cat urine, but she couldn’t take care of her cats anymore. So, uh, this is kind of a cool one. So I’ll just share like 10 seconds of uh, how we actually helped her. Because I think that’s something that when you’re getting into real estate, you have to focus on how you actually help somebody. It’s not just about making money, it’s about giving value. We rehomed all of her cats.
David Richter:
Wow.
Noah Evans:
Cause she wasn’t gonna be able to take care of ’em, all of ’em. But two, she was only allowed to take two to the new place she was moving to. So we actually like, worked with the animal shelter there. We rehomed all of her animals. We got her property cleaned up a little bit and then I sold it to an investor. I knew so little of what I was doing that I erased my name on the purchase and sales agreement and put the investor’s name. So he could have totally just not paid me. Luckily
David Richter:
Yeah
Noah Evans:
He was an ethical person. He cut me a $10,000 check.That was three times that I was making it a month at my job. And I
David Richter:
Wow.
Noah Evans:
Was paid decently well. So, um, that was the start of it, man. Fast forward, uh, to now current, uh, last year I flipped like 35 houses.
David Richter:
Okay.
Noah Evans:
And, uh, crazy journey <laugh>, I learned a lot this last year, man, I took over the role of uh, actually managing the rehabs. I used to have a partner who managed the rehabs and I just did acquisitions. Now I do all of it. Um, and we’re probably gonna pivot again. I mean, that’s the thing. Like, you know, that model almost doesn’t work for me anymore just because of the roles shifting. So now I’m moving more into rentals and holding and Airbnbs and, uh, we actually locked up our first boutique motel about a month and a half ago, and I think we’re gonna lock up our second one at some point this week.
David Richter:
Okay.
Noah Evans:
So it changes quick man, but like, just, I’m just committed to real estate. That’s where I am. So,
David Richter:
So you started on this journey with, because you thought that this college was magical and like just anyone could do real estate if you came from this guy. That’s awesome. I love that belief system. It’s just like, Hey, I, he could do it, I can do it.
Noah Evans:
Yup
David Richter:
So that’s pretty cool. But then from there, you know, growing a real estate company and being able to do that amount of deals and you know, that journey is pretty awesome. And that, I love what you said too, it’s about bringing value to people. Like who cares if you make a ton of money if you’re not actually in it for the long haul and to actually help people. And so that was really cool about rehoming the cats and getting them a place, but then also helping her too. Helping her outta that situation. So I’m sure she’s in a lot better place now than living in that cat urine infested house. But, uh, but that’s awesome. So that’s your journey just at a high level, at the real estate of the last four and a half years. Talk about the profit first journey. Like when did that enter your mind? Like, were you always, did you always have an affinity for numbers? Are you more like the entrepreneur who was like, I don’t ever wanna look at the numbers, just give me deals.
Noah Evans:
So that, dude, that’s such a phenomenal question. Um, and I’m super excited about this sort of the journey. I’m gonna give a little teaser.
David Richter:
Okay.
Noah Evans:
Pro the profit first model stopped me from going bankrupt over the last 12 months.
David Richter:
Wow. Okay.
Noah Evans:
So now we’re gonna rewind and we’re gonna go back and answer your question and then we’re gonna explain that story. So there was a point in my business when I think we had 17 or 18 active rehabs.
David Richter:
Wow.
Noah Evans:
And on all of those rehabs, it’s hard money and private money sore a hundred percent leveraged. Therefore we have monthly payments on every single one of those properties.
David Richter:
Oh wow.
Noah Evans:
Back to the hard money lending companies, it reached a point where the total was about $45,000 a month. Now the average flip profit at that given time for me was $57,000.
David Richter:
Wow.
Noah Evans:
So for every flip I’m, I closed and made money on one whole entire flip profit just went back to paying for the holding cost on the number of properties we had.
David Richter:
Yeah.
Noah Evans:
So timing became super important. But not only timing, the management of money became super important, right. Because
David Richter:
Yeah,
Noah Evans:
Managing cash flow is super difficult if you’re not watching it at every single moment. And we didn’t have sophisticated enough systems. We didn’t have an accountant giving us a cash flow statement. You know, giving us the, here’s your starting cash balance this month and here’s your ending cash balance. We didn’t have profit and lo uh, profit and loss statements, none of that. And to be honest, I still run a super simple business where I don’t have that. But I made one simple change. We isolated out the bank accounts for every single flip property. We isolated out the bank accounts for profit and paying ourselves first. Um, we put in a different account for paying employees. And as I set all of this up and taxes every, I mean, it’s all broken down. There’s like 30 accounts right now. And I run a way simpler business now. I don’t have all the employees, we don’t do all the flips. I got, we don’t, I don’t even have a partner anymore. So it’s just, it’s a super simple business. But yet I still implement those systems that were needed in my bigger business. So here’s what happened. Uh, as the money got tighter and tighter cuz it was too late, we implemented the system too late. We were already burning future flip profits. We were borrowing, um, one of our hard money lenders allows us to take profit in advance. And that’s how we survived for a number of months, is we would draw profit and we’d close the flip. But by the time we closed the flip, there was no profit. Cause we’d already drawn it. But that’s how we survived and just kept kicking the bucket down the road. Right. And at some point, our partner, my partner and I decided we were gonna go separate ways. So this is super cool for the listeners. This is why it doesn’t matter how many books you read in a year, it matters how well you implement the knowledge that you’re gaining.
David Richter:
Yeah.
Noah Evans:
How to not implemented this knowledge. I literally would, would be bankrupt. I mean, I’d be talking to you on a borrowed computer, right. <laugh> and probably, and in, uh, a rental instead of a beautiful home that I own. So as we split up, you know, money was going, you know, we were splitting the profits then and everything was leaving the Truity Home Company and everything was going to my partner’s company and my company separately. And I started to fill it in, into the correct accounts. And I labeled everything out and I knew how much I had in a savings account and you know, how much I had for taxes. I knew how much I had to pay my employees. I still had to pay. I just barely, uh, I still have a couple employees, but I just, I barely just let go, uh, of a couple more of the expensive ones on the sales side. And so, you know, as I was able to see exactly where all of my funds were, I was able to make smarter decisions. Right. At, some point I realized I couldn’t keep paying for marketing. Okay. So we shut off marketing. But had I not had this system, I would’ve been like, no, this is what we do. We pay for marketing. Like we pay for the texting and the cold calling. Okay, well not if you’re not gonna be able to make all your mortgage payments,
David Richter:
Right.
Noah Evans:
There’s an order of priority. Right. But you can’t see it unless it’s labeled out in front of you unless you’re reviewing it, unless it’s separated out. So kind of crazy. I mean, if you, if you look at it like, I don’t know that there’s a better comparison set of data between me and my old partner because we made the exact same amount of money in that period of time. I didn’t make any more, I didn’t make anymore. Right. We ran the exact, we used to run our company together. Now we run the exact same type of company separately. And yet at the end, we’re a whole year away from that now. I mean the split was almost a year ago. And I’m still here. I’m still flipping houses. I still can’t afford to pay my employees. I never missed a mortgage payment. I didn’t miss my car payments. And yet in that given period of time, we had, I had personal losses just for me, meaning 50%. So, you know, you’d double it for the old company. I had personal losses of over $120,000.
David Richter:
Oh wow.
Noah Evans:
Yeah. So kind of crazy to be able to sustain yourself through that, right?
David Richter:
Mm-hmm. <affirmative>,
Noah Evans:
And this is where it’s like in the time of chaos, you fall back to your systems, you fall back to your level of training. And I had already trained myself, I had started training myself, unfortunately too late for the last company. But I had started training myself to be more methodical on the placement of funds, on the separation of accounts, on treating it like a business and not like a hobby. These are all the things you talk about, you know, in your, in the book. And so, um, yeah, I mean, thank goodness that I had implemented that system when I did, you know, the losses taught me something.
David Richter:
Yeah.
Noah Evans:
I call, uh, I have another, uh, friend of mine who calls his losses seminars. So I had a good seminar that I paid for. Um, but I, you know, I’m just grateful to still be able to play the game of investing. My credit is perfect. My credit never took a hit. All my investors are willing to work with me on my losses and we have a way to pay ’em back because we have a sustained method of tracking the income coming in and the money going out. And we adjusted on a monthly basis.
David Richter:
Okay. So then what got you even interested in that system then? I know you said you implemented maybe a little too late for the last business, but like, was it just the desperation of oh my gosh the money is just running out. There has to be something better than what we’re doing right now. Was it that type of grasping at straws and then you found profit first? Or like how did that get even introduced to you?
Noah Evans:
Yeah, I mean it’s pretty much exactly that. I mean, if we go back to when we had $45,000 a month of holding payments going out, it just was so impossible to see what was going on. I’m like, dude, I don’t, we had one operating account. I mean we had like a very basic, it just wasn’t enough, right? It was not doing enough. We had a very basic, uh, breakdown of kind of like following profit first. We had an operations account, um, and we had a job costing account and we had an interest account and that was it.
David Richter:
Yeah.
Noah Evans:
But those three accounts are not enough to run a business of that scale. Even a smaller business, you can’t run, uh, a small business off of those three accounts.
David Richter:
Right.
Noah Evans:
Because inside of operating, how much was I paid employees, how much was I spending on marketing? How much did we spend on other miscellaneous items that don’t matter? And how do you know to cut back if you’re not, if you don’t know exactly what’s being spent in this category, how do you even know your returns on marketing if you don’t know how much is actually spent? It’s all just coming out of the operation account.
David Richter:
Yeah.
Noah Evans:
And then job costing was even worse. Um, the job costing account, it’s like, dude, it’s 17 active projects. I mean, yes, we had QuickBooks to go back to and, and review the project, but on any given month, say we spent $150,000, 150,000 on what, which projects were progressed, which ones were not, which ones are gonna be short, which ones did we spend too much on? We don’t know.
David Richter:
Right. Yeah.
Noah Evans:
So yeah, I mean if I look back to like, if I think about a couple saves once I split and was following the model to a t and was not skipping any of the details, I mean I just absolutely following the model. Um, I had a flip that uh, I tried to delegate to my old operations manager. I wanted to see if she could run it on her own. But we had a very specific account for this one flip where all of the funds for flipping it were already there. So there was no reason to draw from any other funds. And then every single month we would go back to the, uh, we would take a chunk of the hours spent on that project by that employee and we would funnel that amount back into the employee account. So it’s just the whole cycle’s now flowing. Right. It’s just an actual business. Well we ran outta money in that rehab account, so
David Richter:
Okay,
Noah Evans:
What has to happen? And then we gotta adjust the budget, we gotta adjust the project. But at least I know
David Richter:
Right
Noah Evans:
Now I’m aware of what’s going on. So I can adjust for that. So I made it a, uh, an owner distribution to that project. I had to put in, I think it was like $8,500 to finish that thing out. But now I can track that. Right? So then I go over to my owner distribution account, I take out $8,500, we put it over into that project, the whole thing is tracked. And then when we go to close that project, I have to pay that account back first. And now we have our actual profit, which is now lower than what I had expected because I had to put more in.
David Richter:
Yeah.
Noah Evans:
But it’s better to know the enemy that you know, is way better than the enemy. You don’t.
David Richter:
Yeah. That’s very true. So I’m, so now going through that story, were you ever the numbers person or are you more than the entrepreneur?
Noah Evans:
I’m a numbers person on like acquisitions. Like that’s where I kind of get into my flow.
David Richter:
Yeah,
Noah Evans:
Yeah. I can underwrite deals all day. But the issue is, I’m not a backend like person
David Richter:
RIght, yeah.
Noah Evans:
To go back and review my cashflow statements and like look at the numbers every single day. Like that’s not me. Um, I struggle there for sure, you know?
David Richter:
Yeah.
Noah Evans:
If we think about like traction, I’m way on the, uh, the visionary side more than the integrator side.
David Richter:
Sure.Okay.
Noah Evans:
And that, and this system requires a lot of integrating, you know,
David Richter:
It does the operations side, the actual practical tactical stuff to implement.
Noah Evans:
Yeah.
David Richter:
So, no, I get it. Well, I’m glad you at least you had the for knowledge to implement it and that maybe it didn’t help the last biz, but then now it sounds like you’re running and gunning, at least you got the first things first cuz you have it in your current business. Correct. And like
Noah Evans:
Yeah.
David Richter:
And it’s, you said it saved you from bankruptcy. Was that because you, even though with $120,000 loss, you still had money in some accounts or like you were able to like just squeak by and until you sold some other properties? Like how did it actually save you from bankruptcy?
Noah Evans:
Well, I just look at the trajectory of how much I was spending on just certain things in my company and wasn’t aware.
David Richter:
Yeah.
Noah Evans:
Right. And so by being able to see that, oh my gosh, we don’t have any more money in the marketing account, I now know that I can’t go buy another list, right? Because the percentages that come in are set. We have to stick to ’em. And also too, it’s just like, okay, I had a $19,000 tax bill last year after all of my depreciation, after all the stuff I had to turn on and hold that I didn’t think I was gonna have to hold. I mean, I’m living in a flip that I wasn’t supposed to live in. Right. So,
David Richter:
Yeah.
Noah Evans:
Um, after all that I still owed 19 grand. Where would that have come from? Because the previous version of me, the old way I ran my company, we would’ve blown that. I would’ve blown that on employees not cutting back hours because I wasn’t aware I needed to, um, I would’ve blown that on going over on budget and not even knowing we went over on budget. Prime example is that property I just talked about $8,500.
David Richter:
Yeah
Noah Evans:
I wouldn’t have known that I spent that extra $8,500 and then I would’ve looked at the end and said, oh dude, we made 60 grand. No we didn’t. We made 60 grand minus to 8,500 we spent extra.
David Richter:
Right, yeah.
Noah Evans:
Right. So it’s, and then also too, like being able to track the employee hours. Well the employee spent an extra 120 hours on that project that also deduction profit. But you don’t know that so many of us, especially in the flipping world, we get our check at the end and we go, oh, $60,000 check we made 60 grand. Well, no, you made 60 grand minus what else? What else did you pour into the profit or into the, uh, project?
David Richter:
Yeah dude
Noah Evans:
So like, yeah, I would’ve gotten to the end of the year for sure and not been able to pay that tax bill. Cause I wouldn’t have had that money set aside. There’s no way. Um, and I would even say that the last couple projects, no way I would’ve been able to finish them because they, uh, most of ’em went over on budget. And, uh, without having paid myself first and put that money away, I wouldn’t have had it.
David Richter:
Yeah.
Noah Evans:
You know?
David Richter:
Wow. That’s awesome.
Noah Evans:
And there was a lot of cutbacks too. Like we basically cut marketing down to zero. I mean, dude, when times get tough, you gotta lean your business out.
David Richter:
Yeah.
Noah Evans:
You know, employee hours were cut and all hard things. Nobody wants to talk about that because it’s uncomfortable and it feels really bad as an entrepreneur and owner to tell your employees like, Hey, we’re gonna go from, you’re gonna go from a 40 hour week job to a 20. If it doesn’t work for you, no problem. Like, I’m here to help and you can work here as long as you need to. But that’s
David Richter:
Yeah
Noah Evans:
That is where we are, you know?
David Richter:
Yeah. And sometimes it has to get to that point, you know, like you said, it’s a seminar <laugh> or like your friend says
Noah Evans:
Yeah
David Richter:
Seminar business. Cause it’s like, sometimes it’s your first rodeo and you don’t know what you don’t know until you get to that position. Then you hear your eyes are open up. It’s like, oh shoot, this doesn’t work.
Noah Evans:
Yup
David Richter:
So I thought it was great too, taking a little bit of the potshot at the people posting checks, which I’m fine if you’re posting your check cuz you’re happy you’ve never done that big of a deal or whatever. That’s great. But a lot of people who post the checks and it’s like, do you know the real story behind that check? Like yeah, they say it’s like 60,000 there, but minus whatever they overspent or other people they have to pay out or like the things they’re not even thinking about. Then they go and take that money and blow it on whatever, you know, like the next marketing campaign then it’s completely gone. Which sounds like that’s the old version of Noah. You take that profit
Noah Evans:
Okay
David Richter:
Totally just okay, 45,000 out the door. Like we just gotta keep this going just to pay that crazy insane interest bill every single month. That’s, you know, that’s due. So then talk about, sounds like the way that you felt back then was pretty stressed out living month to month and just barely squeaking by until you weren’t. How does it feel now having a system in place? Like what is the, is there a is do you have more peace I guess at this point in your business?
Noah Evans:
Definitely. Not only do I have more peace, I have more control, um, pie. And I would say like if we really boil down entrepreneurship, I would say a lot of people get into it in real estate too because they want control.
David Richter:
Yeah.
Noah Evans:
You want control of your time. You want control of your finances, you wanna be able to control how much money you make and all of those. There’s nothing wrong with a job, but if you’re built differently and you don’t wanna be controlled, which is me, I have a really hard, uh, really hard time with people wanting to control me. Right?
David Richter:
Yeah.
Noah Evans:
So I like my schedule. I like being able to decide what I’m gonna do and with who. Like, dude, this is awesome. Me and you are sitting here having a super fun conversation on a Wednesday at 11:00 AM
David Richter:
Yeah.
Noah Evans:
Not a lot of people get that. And like, I have to humble myself and remind myself of, you know, I’ve worked hard for this freedom to not get so uh, down on myself just because this last year’s been rough. Right. Um,
David Richter:
Right.
Noah Evans:
But also too, something that can’t be, uh, undervalued or that I don’t wanna skip over is I’m running probably a more profitable company now flipping maybe five to six houses a year than I was flipping 17 houses a year. Right. That was ego investing. Right. Like it felt good to go to the real estate meetings and say I have seven employees and I have this cool office space and we’re doing 30 flips a year. Yeah. But to what a avail man. Like just for, just for vanity. That doesn’t, that’s not, that doesn’t do me any good. I was stressed out, I was running around like a chicken with my head cut off and I was relying on hope to get through month by month.
David Richter:
Yeah.
Noah Evans:
Now I rely on systems. I run this entire business with two employees and myself. And I wanna say like, I mean I work 40 hours a week still, I would say, but like maybe 20 of it is doing things that I don’t enjoy. And the other 20 is doing things that are like, whatever the heck I wanna do. Like this.
David Richter:
Right.
Noah Evans:
Like a podcast or, I mean, like I said earlier, I love underwriting deals, I’ll underwrite deals all day, you know?
David Richter:
Yeah. No, That’s awesome.
Noah Evans:
This is totally different. That
David Richter:
Was great. I love that eagle investing cuz you see that a lot too. And it’s, I think, do you think with our culture maybe just America culture or the real estate investing culture, it’s easy to get sucked into the ego investing power trip and going down that road?
Noah Evans:
Yeah. I think so. And I think social media unfortunately plays a big role in that. Right.
David Richter:
Okay.
Noah Evans:
Um, cuz we want to keep up, we wanna do what these other people are doing and to do what they do, we try to em, uh, emulate, copy them. I can’t
David Richter:
Yeah.
Noah Evans:
Figure out the fancy word for it. Um, emulate, there we go. And uh, so it definitely makes it hard, man. I mean, I find myself still doing it too. Like, I have friends and then, you know, I watch them go acquire a hundred unit apartment complex or a boutique motel and I’m like, okay, I gotta go do that. And it’s like, well wait a minute, hold on, slow down. Why do I need to go do that?
David Richter:
Yeah.
Noah Evans:
For what reason? Like, and there may be a good reason, right? But we have to figure that out first. You know, um, I’ll share a good example of that I think would be cool for the guests. So I love living in what I call, uh, a neutral position. Meaning my cashflow covers all of my monthly expenses. In essence, that’s probably like level one financial freedom, right? Like
David Richter:
Yep.
Noah Evans:
We don’t have to have money come in every single month to survive. And I live that way for a long time until I moved into this house and I got a Tesla again. This was like back when the business was crazy and there was all this money coming in and I just thought that I was really wealthy, right? And so I got ahead of myself and now I’m probably about $3,000 a month out of pocket to live, which is really just, you know, great, that’s fine. I’ve gotta go make $3,000 a month to live cashflow covers the rest. But that’s, to me, that’s a negative ca that’s a negative monthly position.
David Richter:
Sure.
Noah Evans:
Meaning my hours have to justify, you know, earning $3,000 a month back into my family’s pocket just to go burn it and it goes right back out the door. Meaning we are not adding the savings or anything at that point. So for me now, my goal this year is, okay, let’s go back to not only a neutral position, let’s go forward into like a positive position on cash flow and let’s have all of our expenses covered plus an extra thousand dollars a month because things change. You know,
David Richter:
Yeah
Noah Evans:
I mean maybe we have a kid or we get another dog and expenses go up. So how do I go get $4,000 a month this year? What am I gonna do to go get $4,000 a month? And it sounds kind of crazy cuz I know there’s probably people listening or who are hoping to just go grab 500. But when you rephrase the question, I’m not worried about like, can I do it? Because that’s always a question, right? No matter what level you’re at. Like, well, can I, and if you question yourself long enough, you’re probably gonna talk yourself out of it.
David Richter:
Right.
Noah Evans:
So I’m not worried about can I do it, I’m just worried about how, like who do I need to know? What type of people do I need to be around to make this happen? And ultimately it just, it ends up happening to be a bigger deal. I’m probably not gonna get to $4,000 a month buying a bunch of single family homes. That’s gonna be, that might be a little difficult. Right. Maybe with midterm rentals or corporate rentals. Maybe I could figure that out.
David Richter:
Sure.
Noah Evans:
But probably the easiest way, um, the least amount of time, my time invested to do that is probably to go for a larger apartment deal. Um, or I would say, you know, like these boutique motels that you and I had talked briefly off camera about that, uh, I’ve been putting under contract. Um, and here’s another cool thing. You guys heard me say that I’ve, I lost money this last year
David Richter:
mm-hmm. <affirmative>,
Noah Evans:
Meaning I don’t really have the cash to go invest into these properties. So for most people that stop and they’re like, dude, I, that’s cool. No one wants to go do $4,000 a month in cash flow this year. I can’t cause I don’t have the cash. Guess what guys? I don’t have the cash either, but I have the relationships, right? And I have the knowledge of what a good deal looks like. So I have, I have two of the legs of the three legs it it takes to go do a deal.
David Richter:
Yeah.
Noah Evans:
So I’m just gonna bring someone else’s money in. They’re gonna get a chunk of the asset, I’m gonna go manage it because that’s what I do. Well I’m gonna buy it well because that’s what I do well, but I don’t need the cash to go do that. And then in essence, so what do I need to find now a building that does $8,000 a month
David Richter:
Right.
Noah Evans:
In that cash flow and I’ll get four.
David Richter:
That’s good stuff. That’s where, and then two, you have a good system on the back end to catch the dollars. It’s like, you don’t wanna just go generate that and then you’re, now the negative position again, like you’re saying again.
Noah Evans:
Okay, yeah.
David Richter:
Just because now it’s the expense creep, you know, it keeps creeping up on you and you’re like, oh my gosh. Then you get back into ego investing or ego living, you know, just at home and then it’s like, oh shoot, uh, that wasn’t enough. Then what is enough? So that’s uh, no I love it. I love that what you said too, that you’re doing more with five or 60 as, you know, being more profitable, more intentional with your dollars this year than last year even doing, you know, triple you know, what you’re doing. So that’s, uh, no, I like that a lot too. I like that you said you were relying on hope before. Now you rely on systems. You know, those are the things that are really getting you out the door. Cuz even what you said there, like you have systems to be able to go out and find the deal, find, you know, that you can do the relationship part of it. Like you’ve got those, the two legs of the stool. It’s like, okay, we can find the third leg to go out there and do it. And I have the system to make sure that we’re actually keeping, keeping a lot of it too. So I think that’s really good. A lot of great value here. Just a few last questions. What it would be if, for someone looking to implement Profit First, do you have any advice for them as a real estate?
Noah Evans:
Yeah, absolutely. I think accountability at the start is really important. Um, and I kind of think willpower’s BS man, like willpower comes and goes, right? Like this morning I woke up late and my willpower to go to the gym was low because I just wanted to get to my day. But I have accountability. I have people that are at the gym that know that I should be there. And guess what? It’s pretty fun man. It’s like this in, it’s like the super organic thing. But like, if I don’t see my friends at the gym, I text them, dude, where are you? What’s going on? You’re not gonna show up to the gym today. And you know, we send each other funny memes like little chicken legs, like SpongeBobs, little chicken legs, memes and be like, all right dude, you’re gonna look like this this summer since you don’t wanna show up
David Richter:
<laugh>.
Noah Evans:
And so, you know relating that back to implementing this model into your business, I think having accountability is super important. Um, the accountability that I looked for when I started this was I told my CPA what I wanted to achieve and I don’t have, I mean like, you know, my CPA’s not the most integrated into my business. I talked to ’em maybe two or three times a year. Um, I, you know, I always get envious when I hear these other people on these other podcasts and they’re like, I have a strategy meeting with my CPA daily and we go over our cash, we go over our income statements and we project into the FU and I’m like, dude, I’m not that complicated. I don’t run a simple business.
David Richter:
Sure.
Noah Evans:
And so, um, you know, but I did have conversation with my cpa. I said, look, this is how I wanna do things. How does it look for you at the end of the year for you to go grab the information you need and how can we work together on this? And we kind of came up with a little game plan, but at the end of the day, like, dude, he’s expensive per hour and I didn’t wanna waste his time because it’s ultimately just wasting my money.
David Richter:
Yeah.
Noah Evans:
So I followed through because I knew that at the end of the year, you know, we talked about, by the way, like it saves me tons of hours on my taxes every year.
David Richter:
Yeah.
Noah Evans:
Because now I download my bank statements and my bank statements are specific to properties. They’re specific to segments of my company. So we take the total, my bank actually gives me totals. Like, okay, you spent this much each month, this much cash came in, this much cash went out. And it does it all for us. I give it all to my c p A, he puts it together and does my taxes. And probably I would, I mean this is a guess, but I would guess a fourth of the time compared to what he was spending before, if not even more maybe a fifth of the time.
David Richter:
Yeah.
Noah Evans:
Um, but the accountability part is huge, man. Like, you gotta, whether it be a partner, maybe it’s your spouse, maybe it’s a good friend and you’re like, dude, if I don’t have this done, you know, I need you to follow up with me and I’m gonna give you a hundred dollars if I don’t have it done. Money, money is always painful to me, right. So if I have to tie a negative like, dude, you didn’t do this, you owe somebody money, now I’ll gonna get it done.
David Richter:
<laugh>. That’s great. Well that’s good. I love that accountability. I definitely ascribe to that cuz I would not do half the stuff that I did if I didn’t have people holding me accountable to certain things sell. That’s absolutely, uh, spot on. Especially in Profit First. Cuz a lot of people are, like you said, they like the acquisition side, they like the deal structure, but the back end like, just shoot me now. So it’s like giving an accountability for that side of it as well too. So, lots of good stuff here. I love what you said, you know, going from, you know, the ego investing and relying on hope to the systems, getting that peace and control, helping you save from bankruptcy, going through that whole story, then accountability as well too. Lots of good stuff. How do people get ahold of you? I know you’ve got the Chasing Freedom podcast, so definitely plugging that here, but what else do you know? Like, what else are you working on or how can people find you?
Noah Evans:
Yeah, absolutely man. So, um, first off, thank you so much for having me on the show. This feels like a blessing to me. Uh, super fun and and you’re a phenomenal host, so it makes it fun to be in the guest seat. Um, and for people to get ahold of me, I’m super active on Instagram. My handle is just Noah Evans underscore real estate. Um, I wanted to make it cooler, but a lot of the names with Noah Overtaken, so it’s just Noah Evans underscore Real Estate
David Richter:
<laugh>.
Noah Evans:
And then, uh, on the Chasing Freedom Show, uh, you could catch, um, a lot of awesome guests. A lot of my friends come on there. And it’s a super, super organic show. I mean, it’s really just sounds like two friends talking about real estate deals, which is cool.
David Richter:
Cool.
Noah Evans:
Um, and I just started implementing, I call ’em the Freedom Hotline. So for anyone looking to take the next step to Financial Freedom, I’m doing four free calls a week with, uh, investors, people wanting to leave their jobs. Whatever your story is, if you’re wanting financial freedom, that’s the call for you to be on. Uh, do four of those a week. Now the links are in my bio and on the podcast descriptions for my podcast show. Um, and I guess to leave it on a cool note, uh, Dave David’s gonna actually come on my show now as a guest after this, so you guys will able to catch another episode of, uh, US chatting.
David Richter:
Awesome. So if you can’t get enough of me here, go to the Chasing Freedom podcast as well too.
Noah Evans:
Yeah.
David Richter:
So if you haven’t heard,
Noah Evans:
<laugh>
David Richter:
Nice story, uh, but thank you so much Noah. This was great. And if you are listing as a guest here, I just wanna say thank you for listening. But if you’re also feeling like, oh man, I’ve definitely built my business on the hope and pray plan, or like I’ve got some ego investing or I have no idea where my dollars are going, I might be going bankrupt. Reach out to us simplecfo.com, the accountability he was talking about. Get a part-time cfo to be there to help you, to guide you to get the profit First stuff implemented and make sure you know where every dollar’s going. So that’s simplecfo.com remember to make profit a habit in your business. Noah, thank you again for dropping a lot of knowledge here and for giving people hope.
Noah Evans:
Thanks man. Appreciate you. Super fun episode.
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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