Using Rental Properties to Build Wealth (Part 1)

Steve Trang: He doesn't know this, but I actually have a secret business crush on him. He flew in from Richmond, Virginia to talk about how he's done thousands of transactions, including on track to do 450 this year. If this is your first time tuning in, I am Steve Trang, sales trainer for some of the top wholesalers in the country, and I'm on a mission to create 100 millionaires. One question I get all the time is how to become the 100 one of the 100 millionaires. The information on this podcast alone is enough to help you become one in the next five to seven years.

If you will take consistent action, you will become one. If you wanna get there faster, send me a DM on Instagram. We'll see if we can help you. If you get value out of the show, please tag your friend below or share this episode right now. That way we can all grow together.

And this is a live show, so please ask your questions for Frank to answer. You ready? Yes, sir. Alright. So first question, as a softball, is what got you into real estate?

Frank: So, I graduated from the University of Florida with a degree in construction management, but I actually Highly relevant. Yeah. So I got into construction because my dad and my granddad were my heroes, and they were both in construction. And also because I'm, like, smart enough to be a doctor. When I went to University of Florida, I thought I'd go be a pediatrician, and I was like, I'm not gonna I am not cut out for this.

So I became a construction guy. I ended up working for a publicly traded home builder for just under twelve years. I moved from Florida to the DC Metro market. I started off one rung above the guy that cleans the toilets. Within five years, I was a vice president.

Twelve years in, I was Five

Steve: years to assistant toilet cleaner.

Frank: Yeah. From there to VP. Got it. And then the last, five, six years, I was a vice president, running profit centers, but it was, you you know, the the the deepest part of the recession, and it was just miserable. So I'm like, screw this.

If I can figure out how to quit in January 2009, I can figure out how to make money in real estate, and I did. So I started buying houses off the MLS. I just started flipping them, I used some of my own cash, and then as the MLS started to dry up over time, I started finding other ways to do it, direct to seller marketing and advertising, and that's now led me to a team of just shy of 50 people where we're gonna do 400 plus deals this year.

Steve: So you get your degree

Frank: Yep.

Steve: In construction management. You get a job that suits it. Yes. Right? So twelve years.

So this is, like, '97.

Frank: '98.

Steve: Yep. '98. So you get a job, '98. You're moving your way up. And if I remember correctly, during the recession, they just made life more and more miserable in new builds construction.

Frank: Uh-huh.

Steve: Is that kinda what your experience was through as the recession progressed?

Frank: Yeah. So I had a team of, like, 75 that dwindled down to, like, 23. And when I found that I was doing is I had no support staff anymore, and they would have me in all these meetings, and everything was just miserable. Yeah. And it used to be able to do, like, a couple $100.

It wasn't a big deal on a mortgage. It became really, really just every cent started to matter.

Steve: Mhmm.

Frank: And it just wasn't fun. Like, you and I just left a incredible event today. We had a billionaire. Right? We're gonna probably talk about it.

And what he talked about is just making an impactful life. And I wasn't as strong mentally then as I am now, but I just knew this was not the definition of happiness and the life I wanted to lead. And I always knew deep down I was an entrepreneur. And, how did you know that? So every sales contest I've entered since this that was six, I've won.

And There

Steve: you go.

Frank: I just loved it. Like, that's the stuff that lit me up.

Steve: The selling part or the the the strategy and gaming part?

Frank: All of it. And winning. So like seventh grade, we went to an integrated school, and I won, and this kid chased after me, because I was in a money, what they called the money machine, and I won $212. So it was like, I was like, Oh! Like someone was coming after me, after me, like, They didn't give me the money, it's at the office, but I wanted to win, I wanted to be the person that everybody knew was the best, and I don't know what it is about those sales contests when you're a little kid, but you're kind of like afraid to be who you are, that's kind of the angst of being a kid, but you're kind of a nerd if you win that, and I'm not a nerdy kind of kid, but I was like, I don't care, I wanna win, I want people to know I'm the best, and I wanna just go out and show up and do it, And, that part was fun.

The strategy back then, it was just basically just hustle. Mhmm. That wasn't really a term in the eighties, but it was that's what I did. And, but that started to be a success and make me feel confident.

Steve: Alright. So then you work in construction. Again, it's it's kinda crazy to go from assistant toilet cleaner to VP to managing certified people. Did you do your first real estate transaction before you quit, or did you quit, burn the bridges, and then go for it? Alright.

So

Frank: one of the reasons I moved from Florida to Virginia, like, one of the few people who leave Florida if you grow up there, is the company that I found was an incredible fit for me. So I knew that I was not a pediatrician when I got the organic chemistry. Like I can't figure this crap out. I got to go do something else. But what I so a couple years later when I was graduating from college, I was like, okay, there's a home builder that's gonna teach me construction.

And if I do a good job in construction, they're gonna teach me estimating. And if I do a good job in estimating, they're gonna teach me sales. And if I do a good job in those three jobs, then I'm going to do, they're going to teach me management. So I had the ability to learn these skills. The other thing they had was an incentive.

They would give you 10% off a lumber package if you built your own house. So I moved there when I graduated college. I think I was just at 23 years old. By 25, I bought a lumber package. I bought a lot.

I built a house. I couldn't afford it. I moved people like into every single room. I had like an intern living in an unfinished basement because the mortgage was more than I took home. And by doing that, I built my first real estate deal, I got promoted a couple of times, went from making $44 to $100 in two and a half years, I kicked out all my roommates.

Steve: So you were house hacking?

Frank: Yeah, and then that was my first deal, and I was 23, 24. Wow. Yep. And then I did that three times, and that's how I became a millionaire for the

Steve: first time. Just from house hacking Yep. So I while you were working for somebody else. Yes. So that's huge.

Yeah. Because most people are like, how can I quit? Right? Like, I'm relying on this income. There's this, you know, do do I have enough savings?

You were already there just because you were intentional with it.

Frank: There's an IRR. So so Steve knows me well enough to know that I know my way around tax law, and I know how to utilize systems to my advantage. And I'm not that smart, but I'm really smart at this. And what I learned is that the IRS will give you up to $250,000 in free income if you sell a house, make that much profit. But it's your primary residence there's a bunch of rules so if you're listening to this please go look at the rules don't take them from me

Steve: we're not accountants

Frank: yeah follow the rules but if you follow the rules I made two fifty sold that one built another one made more than two fifty sold that one. I actually invested in an investment property while that happened. And while all that was happening, I had some other stuff, some money in, like, the markets. It all went up, and boom. I was a multimillionaire

Steve: or I

Frank: was a millionaire.

Steve: Okay. Were you still a millionaire when you quit?

Frank: Yeah. Multi.

Steve: Multi millionaire when you quit?

Frank: Yep.

Steve: Alright. So what At two.

Frank: It wasn't more than that. It was just it was like like like a hair above two.

Steve: So what was the desire, though, to get into real estate? I mean, was it because real estate was a vehicle, or is real estate something you're passionate about? I knew it.

Frank: And, I did love it. Working for HomeBuilder, I didn't love it as much as I love it now. I knew it. I knew I had an advantage. I knew I had been trained in an incredibly good company.

So because of those things, when I quit, it was never like I'm gonna go look for a job or I'm gonna go get into a different segment of business. Every conceivable advantage I had was in home building and I knew that and it's really hard to start a business so I was like why not take advantage of every conceivable advantage that I have so that's what I did and it was 2009 It was really easy to find things that were undervalued, and you can see it was undervalued because of the fact that it you know, there was tons of inventory just sitting there.

Steve: Right. So your first deal after all this was from MLS? Yeah. And at that time, MLS was not entirely competitive. No.

It wasn't. And then so was that first deal a walk in the park? Was there any lessons there?

Frank: So I did some short sales. I did a first deal off the MLS, but I'm a tell you the best lesson. Okay? Like, I don't remember my first deal or my first short sale, but I do remember my first wholesale.

Steve: Okay.

Frank: So I was learning it, and I didn't really get it right. And I was every fiber in my being is telling me, like, I'm going to jail. So I had literally done at this point $750,000,000 worth of transactions, maybe 1,000,000,000 working at the builder, and I knew my way around real estate, I'd done my own stuff. My assignment fee I think was $3,700, which is pathetic.

Steve: That felt illegal.

Frank: And it felt, and I felt like I was going around people, and I didn't have the right legal team, I did it with no training, I just tried to figure it out, like Googling what is wholesale, and every time there was a siren, I was certain they were coming after me, like that's how I felt, and I remember that deal closed, some time passed, and I'm like, I mean I worried about what people thought of me for doing this, but I literally remember, Steve, like I was scared to death and was sure I was going to prison.

Steve: So let's talk about how you found that first wholesale deal. Yep.

Frank: I think I found it I don't remember. All I remember is I I was going to jail. I'm pretty sure I found it through MLS or something, and I navigated my way around it.

Steve: And so you assigned it Yeah. Without any training? Because, I mean, at this point, what did you have as a resource?

Frank: I didn't have anything. I mean,

Steve: was it was bigger pockets around at this? No. Okay. So I knew

Frank: it was a barren wasteland. Like, he basically had the short sale kit all over YouTube with, like, his polka dotted hair. That would those are your best options. We're

Steve: talking about Corey here?

Frank: That wasn't no. Corey's worst. No. I'm kidding, Corey. But, this was, Nathan Jurewitz.

Like, they were doing short sales, and him and Chris McLaughlin. I actually went

Steve: to one

Frank: of their events in Vegas the last time.

Steve: I just met Chris? He's a goodest week. Yeah.

Frank: Yeah. Chris played t ball, one of my best friends, so I knew him, like, but the point is there wasn't a lot of great training. There wasn't masterminds. Jason hadn't started Collective Genius yet. So it was kinda figured out yourself.

So then you're just like

Steve: looking up on, like, Bing, like, contract law on his on wholesaling?

Frank: Yeah. And I I I there was a double assignment that you could do with short sale, so I kinda just tried to do something along those lines A

Steve: to B, B to C thing? Yeah That one's scary

Frank: Yeah, so it's really hard to start this if you don't have a plan Now, my plan worked incredibly well coming out of college and following the rules and kind of understanding how to take advantage of a cool system but when I got into wholesale I was a disaster

Steve: yeah so were there any failures or struggles when you when you first started wholesaling

Frank: So Jason Medley, who is the founder of Collective Genius where I work, he says this all the time, he's like, Frank Hava stood up in front of a group of people and said, Postcards, those things don't work. He loves talking about it. So the first handful times I sent out postcards I mean they were terrible so I'll tell you this you'll find this interesting I'm a big dude right I'm a fairly intimidating human I'm you know over six foot tall well over two twenty five pounds

Steve: I play basketball against you I've experienced this.

Frank: I'm a big dude. Yes. Right? So I don't get intimidated by many human beings that aside from maybe like, you know, linebackers in the NFL or offensive linemen. So my first hire when I quit my job and started my business was a part time bookkeeper.

My second hire was a, an acquisitions, like, manager was what we call it, but it Mhmm. Loosely stated. Do you wanna know what the motivation what do you think my motivation was in in having this person answer the

Steve: phones? So that you wouldn't have to do it anymore?

Frank: So I had to people yell at me, I didn't wanna get yelled at, I couldn't stand it, like when people would send you the postcard back with the writing or go to hell or things along those lines, I was always very, very scared that, you know, I I just I felt bad. Mhmm. Like, oh, I'm really annoying this person or something like that, so I stopped.

Steve: Which is a very natural fear a lot of people have. I mean, I still have these conversations to this day with newer wholesalers.

Frank: Right.

Steve: How did you overcome that reluctance or that fear?

Frank: I hired someone and let them deal with it. That's how I dealt with it.

Steve: Yeah. But today, you wouldn't have that fear.

Frank: No. I mean, I don't wanna get on the phone and talk to people, but I don't have the fear. So one of my big regrets in business, any guess is what it is?

Steve: Not starting earlier, it's usually what I hear a lot of.

Frank: Yeah, mine is not that, mine is because I started at '23 essentially, '24, mine is throwing out this booklet that came in the mail. It was an animated booklet of how you can go to hell. So someone that I mailed postcards to literally sent me back a booklet of how I could go to hell. It was hysterical.

Steve: That's pretty cool.

Frank: Somehow I pitched it. Yeah, but nowadays, we don't really worry about that because we know we flip the script. I've gotten to be a professional at this. You train my staff. My staff tunes in once or twice a week to work with you because I think you're great.

Great. Thank you. And what we do is we drill on we're helping, we're not hurting. If if we're reaching out to you, we're doing it for a reason because we have data that is telling me that there's probably a chance you need to sell. Mhmm.

But if you tell me, please go away, take me off your list, we will. That's fine. If we're not the right company for you, that's fine. But what I flip from is I'm chasing you for money to I'm offering you a service to help solve a problem. Right.

And that feels very different, but I didn't have that fundamentally twelve years ago, but I haven't. I have it today.

Steve: Yeah. Well, how could you have it twelve years ago? Right. Alright. So what first one kinda hazing on your first wholesale deal, but when did you by what year did you start growing your wholesale business?

Frank: 2012, 2013 is what I

Steve: mean. Grow it because I mean, you obviously had a background in construction. Were you do were were you doing it because you didn't have enough funds? What was the reason for wholesaling versus flipping, which was your bread and butter?

Frank: So I was a fix and flipper. In 2012, 2012, I joined Collective Genius. I met a bunch of people who were better at wholesaling than me. So I copied what they did in my market. I got better at it.

My goal when I started was not to just do one thing. I was an executive with a publicly traded company. I had stock options. Like, I had a vision even from day one of I want to grow something. I wanted flips.

I wanted income that paid the bills every month. You know, the big elephants that you can kill that you can eat off of. And I wanted the stuff that kept the electricity on that were kind of smaller fees. And then I wanted to build a portfolio of rentals. And I've been saying this for a decade and a half because I own a bunch of rentals I was a hedge against inflation I've actually stopped saying that because there hadn't been inflation in so long but now we've seen it and prices have gone up tremendously with homes which has been incredible boon for me.

But it was a desire to build a full suite business and not waste marketing dollars is the reason why I ultimately added wholesale. Now you you you

Steve: mentioned a few buckets there, fix and flipping, wholesaling. Actually, before we jump into that, what were some of the early or major struggles you had in wholesaling besides the not wanting to be yelled at?

Frank: Do you know what the difference between a professional and a hobbyist is? Profitability? I would argue that it's consistently generating leads.

Steve: Mhmm.

Frank: So I was a hobbyist until I could consistently generate leads. Once I could consistently generate leads, that is when it changed.

Steve: Right.

Frank: Then you have to determine what's a good lead, what's a bad lead, where do you spend your time, where do you not? But those are the things that we really had to figure out is who's a lead, who isn't, who do we spend time with, what do we do with it, and then what's the best disposition strategy? Like in the beginning you're guessing like right now you know me as someone who's incredibly precise I can see the future of what I'm looking at because I can see multiple avenues multiple exits I've been doing this six days a week sixty seventy hours a week for a decade plus Yeah. So it makes me someone who's a tactician where I wasn't at first.

Steve: You weren't. But you're a strategist, right, on the PI?

Frank: I think I may yeah. I'm a strategist.

Steve: Yeah. It's interesting something you brought up here because it's something that came up yesterday in a different conversation was, how do we train people to tell if it's a lead or not a lead in the first, you know, thirty seconds to a minute? You and I can tell Uh-huh. Instantly. Yeah.

But a brand new salesperson that you bring into your team, they can't tell the difference.

Frank: That's right. So one of the things that we teach in our office, so one of the things that we teach I I do coaching as well. One of the things we teach through my coaching platform is Champ Qualifying, and c h a m p. Mhmm. And it basically is, is there a challenge?

Is there something you can overcome and help? Are you talking to a decision maker? And is there some kind of urgency? So those are the things that if you drive at those pretty quickly, and I went through that really fast. But if you can drive at those things pretty quickly, you can determine this person is really willing to be able to sell.

There's some reason that we're getting on the phone together or not.

Steve: Yeah. And then I don't I wasn't there. So Max Amed is my business partner. He mentioned that he saw you speak at Flip to Freedom?

Frank: Yeah. A long time ago.

Steve: Yeah. So it didn't seem like it was that long from when you were already fixing flipping, joining Collective Genius, started wholesaling, and then you were speaking. Yeah. What was that situation?

Frank: Really cool story. So I was at, an event in 2010 or '11 with, Jurowitz and, McLaughlin, and it was in Vegas. And I got an uncle that lives out here. He was hanging out with us yesterday. And, I was like, hey.

I'm going to Vegas. Do you have any interest in joining me? I got a hotel you can just rack up with me. He's like, sure. So we were there, and I was like, in five years, I had no business saying this.

In five years, I'll be up on one of those stages. And I'd gone to Collective Genius in 2000 2016, and I did a presentation on market cycles. And what it was was my opinion of how you can analyze what happens in a real estate cycle and, like, what you need to pay attention to. When I did that presentation, it helped me get clarity on what, what you do with a lead because the cycle matters.

Steve: Mhmm.

Frank: If everybody's selling, it's very different than if everybody's buying. And you need to know how to utilize an asset to your advantage that way. Well, that presentation in building it kinda gave me the the ability to process it myself. But I put it out there. Sean Terry saw it, and he's like, I need you to come speak in my event.

That was incredible. Yeah. So I talked a lot about how that whole thing went together, and I did it at Sean's event, and that was a blast.

Steve: So, again, you're in a unique situation here, but you have multiple buckets of income or disposition. How however you wanna handle the the property. Yeah. Property comes in today. Yep.

What are all different exits for you?

Frank: So, I think we have to first start with what properties do we what properties do we touch? Sure. We touch single family homes. Anything that's a home, we touch. We have apartments, we touch those.

We touch office. We touch land, a very little bit of retail. So that's what we touch. So basically, any type of real estate, we will play in. Leads come in one of a couple of different ways through paid advertising is the majority what is paid advertising TV radio SEO PPC postcards SMS I mean, we do it all.

We do everything. I've got a staff of, like, almost 30 on the sales side. So, we do all of that. We also get a ton of deals from referrals. I had a handful of realtor relations for ten plus years now who bring me deals.

I have people on my staff who work realtors and then, I bought a 40,000 square foot office building Had a major title issue required tremendous patience from us to finally get it to close and we were cool during the process and that agent has now brought us three buildings because he liked working with us. Nice. We performed. We did what we said we were gonna do. We weren't a pain in the ass, and because of all those things, it's led.

So, like, these things all start to snowball over time.

Steve: Right. And so, again, just for emphasis, 2009 Yeah. Is when you started this. Correct. And so twelve years to get here.

And the reason why I want I'm asking all these different exit strategies because I wanna dive deep into each and every single one of these.

Frank: Sure.

Steve: Sure. So let's start off with you start off with rentals. Yep. So what does your rental portfolio look like today?

Frank: I own right around 300. 100.

Steve: Yep. So with your rental portfolio, how what are some of the deciding factors into what you keep as a rental?

Frank: Debt service coverage ratio is big. Neighborhood Elaborate on what debt service Alright. Yep. So, in its simplest form, what debt service coverage ratio is is this. If you are gonna take in enough money and net enough money to pay your mortgage, most banks are gonna want 1.2.

So let me make this English. Let's just say that everything that you spend money on, including the mortgage, is a thousand dollars a month. They want you to rent it for at least 1,200. So that's a 1.2 debt service coverage ratio. This is very simple simplified.

Sure. But that's what it looks like. So I wanna make sure it's gonna cover. I wanna make sure it's in a neighborhood that's in the path of progress. So there are a handful of areas in Richmond where I won't buy.

Years ago, I came to Phoenix. I I met a guy, I don't know if you know him or not, his name's John Burley, but he talked about areas in Phoenix that were red areas, and it's a way bigger metro than Richmond, so there's a lot of red areas, like we don't buy there. There's a couple of red areas in Richmond where we don't buy, but mostly the areas are yellow, orange, or green, so we'll buy those. I know who I am. I am not a luxury buyer of real estate, on the rental side.

I provide housing, shelter. Shelter is a human need. When I got into this business in 2009, there was tons of people who couldn't afford were losing their houses and needed shelter. So what I looked at is from a recessionary viewpoint, there's always gonna be people who need to rent no matter the market. We just learned this during COVID.

Steve: Mhmm.

Frank: Someone can pay, but they need places to go. So, what we do is we kinda focus on that, workforce housing type of product in the path of progress. It has to have the finances in line in order to properly work, but those are the things that we look for. So path

Steve: of progress and then at least 1.2 debt service cove debt service coverage ratio. And that is important because if you're doing a refinance later on, it needs to be financeable where you can refinance at a lower rate or whatever.

Frank: So there's a woman who we both know that came up to me yesterday. She doesn't own any rentals. She's 25 or 26, and she's like, how do I do this? I don't I how do I do it without cash? So when I started doing this, the BRRR method was not like, the the cute acronym wasn't out there yet, but, that's something that I figured out pretty early.

Like, I'm gonna run out of money if I don't figure out how to get my money back. So you need to buy deep enough or enough of a discount where in its simplest form, let's say you buy a house that's worth a $100 at the end. These numbers are gonna be skewed and it's hard to find anything that's worth a $100, only a $100 nowadays in any market, but let's just use it. You buy the house for 50, you need to be in and out of it with soft costs like closing costs and everything for under 30. So that way, if you get 80% on the back end, you can pay everything off, get all your money back out.

Steve: Alright.

Frank: Now if you do it really well, instead of buying the house at 50, you buy it sub 50, 42, 45, 40 because that will give you somewhere between 10 and 5 and $10,000 of cash that you can then stockpile and build more. And that's

Steve: what we did. Exactly. So then one of the key ingredients then is being able to do the BRRRR, and and and and we're trying to figure out whether you wanna keep it or not.

Frank: That's right. So I own a bunch of companies at this point, and I have a 100% ownership in all of them, with the exception of one where I have 99.99% because I sold that small percentage out to get a historical tax credit. Got it. So, like, I own all of it, so you're gonna run out of money if you don't figure this out pretty early.

Steve: Got it. And then the other thing you do is, do you do more flipping or do you do more wholesaling? What would you

Frank: think right now? Well, right now flipping. Wholesale. Wholesale for sure. I mean, there's so many people in the wholesale market Mhmm.

And they're buying it for incredible numbers. And I showed a stat yesterday when I was speaking from stage. We've been able to drive our, average spread on a wholesale deal up by over 30% in the last two years. Now some of it's we've gotten better but most of it is the market is hotter house flipping is really popular it wasn't terribly popular in 2008, 02/2010 but now it is so, we're taking advantage of that euphoria What we'll ultimately do is we might mark a property up to a certain number. And if we can't get our profit, say, okay, we're gonna unlock this through flip.

So, but we, like, you know, if we think there's a $35,000 wholesale fee and I won't take a penny less, cause it makes sense to flip it, we're gonna do that and we bring it to market. We'd rather take it down than, you know, make less than we can.

Steve: So so then is there a number or is it per property? Like, can we say, like, if I can make 35,000 wholesale, we're wholesaling it if I can't then flipping it or what

Frank: is So it's about 5050%. So if I think it's worth, I wanna flip flip the thinking. So if I have a house where I can make a 35,000 a wholesale fee, I need to make at least 70 if I'm gonna flip it. So that the half is that 35 number, and the point of that is, it's better to get something than nothing, and you have one in hand is better than two in the bush. So there's so many things that can go wrong with the flip.

Now, the only time we break that exception, if it's the house is newer, it's in an incredible location, it's on a street or an area that we know very well, we've done it a couple times, we've got bought a house for a second or a third time, like we have a couple houses that we bought three times, Like, no shit. So, like, we bought it. We renovated it. Someone brought it back to us. We bought, like like, crazy stuff.

So, like, unless we have a history with it or we know that, like, this is a no brainer, we won't break that formula.

Steve: Got it. So then how much are you doing a month right now wholesaling? How much are

Frank: you doing a month flipping? It varies. But this year I had the statistic yesterday. It's roughly if you take the properties that we're just disposing of, not other stuff that we're bringing to market with lots and things along those lines, I'm gonna decipher it this way. We generate a lead, I would say about 65% to 75% of those leads turn into wholesale deals right now, 25 to 35% turn into either rentals or flips.

Got it. Most of it is wholesale.

Steve: Now, I wanna take a step back here. We were talking about, rentals just a moment ago, and there was something you said yesterday, unbreakable.

Frank: Yeah.

Steve: And that was something that I'd never I cursed before,

Frank: but yeah.

Steve: You did. I don't curse.

Frank: Oh, that's fine.

Steve: So I do. Right beforehand or we were talking about that, and, you know, we were playing basketball this morning, right, in Scottsdale, and it's, like, steel backboard concrete post and triple or quadruple rim, whatever. And we kinda made the joke this morning before he showed up. It was like, this is what Frank's talking about. Like, this thing's impossible to break.

Yeah. Right? No one will ever have to replace this.

Frank: Right.

Steve: Can you talk about how the importance of the unbreakable concept has been or how much impact it's been to your rental?

Frank: Oh, yeah. Yeah. So I said two things yesterday. I thought you were actually referring to when I said indestructible, which is what I want my business to be during a recession. But what you're talking about specifically is rentals.

And what I call my rentals is I call it excuse me, this dry Arizona air. What I look at with every single one of my rentals is that it's a battleship, and I'm sending that sucker out to battle. So what we do is we value engineer or think ahead or be proactive. I'm a I'm a get a little granular, Steve.

Steve: Please.

Frank: Alright. So do you know what CapEx is?

Steve: Capital expenditures. Alright. So what is that? The cost for keeping a property. Keeping and maintaining rental property.

Frank: Okay. So specifically, CapEx is usually the stuff that you do. There's maintenance fees or maintenance work. There's stuff that you do after you do your major renovation. So what we do is we do our capital expenditures.

A capital expenditure is something you can write off essentially. It's a big ticket item. Mhmm. It's windows. It's roof.

It's HVAC. It's electric. So we try and do that stuff first. So, we have a checklist on every house. If the roof doesn't have at least ten years left on it, we rip it out.

If the windows are more than fifteen years old, we rip them out. Now sometimes we have to buy it at a number where it does you just can't afford to, but what we prefer to do is do this. So we go through and look at the home upfront and say okay we want to eliminate service tickets and we want to do that upfront so what we do is go through and analyze the property and then do all the capex before we move somebody in the other things we do it's more of a deletion model, and it's intentional. Ceiling fans, microwaves, disposals, all of these things. What do you think of when you hear those?

Steve: These are calls you get at 02:00 in the morning about breaking.

Frank: Things that can break. Yeah. Alex, things that can break for 200. So these are all things that can break. So what we look at is we're providing shelter.

These are people who are in the section eight program, many of which have been there for years. We give them a really nice house. It's fresh, it's clean, it's got all new stuff, but they're not living in the house that you and I lived in or live in. I've got, you know, two ranges. They're not used to that.

They're used to electric. They just want a house that the electric bill is not $300 So, the standard is very different. So, what we do is we give them a great house. We take some of these things out, they can break upfront, and they don't expect them. They don't need me to provide a microwave, they can provide themselves.

And the difference is if they break that microwave someone knocks it off the countertops they have to fix it it's not a service ticket for us so we're proactive on what we do before they move in and then we what we really try and focus on is what things do we don't that don't need to be in the house that still make them rentable that we can, you know, maximize our rents and minimize our service tickets.

Steve: Yeah. I was actually thinking about your talk on the drive home. And I was just thinking, what happens if they don't have a disposal? Just goes into this I mean, does that not make this, the replacing the mainline more expensive down the road or no? We haven't ran into it yet.

Frank: So I'm sure we had people flush everything down there. I remember all my apartments in college, and I lived in nice apartments. None of them had disposals.

Steve: Interesting.

Frank: You just figure it out. You buy one of those strainers that cost, like, $2 Yeah. And then you you you'll probably get sick of your sink clogging and you know, or call the maintenance department. Or we we hell. I don't even know.

My service department might even give them a a strainer, and we put it on the drain for them.

Steve: But, I

Frank: mean, that that's how you solve that problem.

Steve: So how did you and this might go into your indestructible, conversation. So I remember when I first signed up for CG, and this is actually coming up in a year and a half now. So when I first signed up and I went to the portal, the membership portal. Okay. And I'm going through all these different processes and procedures.

Frank: K.

Steve: And, like, half of them are under Frank Cava. How did you come up with all these different processes and procedures? Because you were saying that, you know, you're not smart enough for for chemistry or a pediatrician. Yeah. How did you come with all these different things to think about, like, I'm not gonna have a disposal.

Frank: Yeah. I'm smart enough for construction. I learned it from other people who did it. I modeled after others. I always would find people who are five to ten years ahead of me.

When I had 25 rentals, I found people that had a two or 300. When I had a 100, I found people who had 700. When I had 10 employees, I found people with 50. And I just asked them questions, and I was always I've got a good personality. I've been blessed with that, people like having me around, I'm typically I buy dinner, so it's I'm easy to get along with from that perspective, so people will invite me and I usually make fun of them, which successful people freaking love.

They do. Nobody makes fun of successful people, like, they they they love being like normal. So that's my gift is I can make people like that feel normal and Tom go screw yourself or something like that. So they invite me to their office and I meet their wives and their kids, and then they show me their secrets. And someone ultimately taught them, and they love someone who's taking notes, and listening, and following up.

Steve: And Very true.

Frank: Yeah.

Steve: I can say for sure whenever someone asks me for help, and I start thinking, don't you need to write this down? Right. Part of me gets like, what's the point of talking to this person?

Frank: There's something else that's really critical too. You're not gonna get there on your own, so you're better off finding people who are better than you. Steve and I are both huge proponents of the collective genius. There are tons of people who are doing it and doing it in a very high level. If someone is nice enough and kind enough to take you in, write them a thank you card, like, by hand, like like, do it in the airport before you leave.

Mhmm. You would not imagine how many people comment on that. I've gotten out of the habit a little bit, which I'm kind of not proud to say, but I carry thank you cards with me and stamps wherever I go, and I typically just jot something down real quick. It doesn't have to be terribly formal, but that's the kind of stuff that gets you invited back for a second trip

Steve: Mhmm.

Frank: Which is a big deal because there's people who know more than you do, and they're usually willing to share it.

Steve: But there's still an element of you that's extremely tactical. Right? I mean, the again, going to building your business to be indestructible. Yeah. I mean, I don't know anyone that's taking to that extreme.

And it's I think maybe we should talk about that a little bit so they can kinda get your your your mindset.

Frank: Yep. So we have been in business now for over twelve years, and we just opened up our second market. Now I've dabbled a little bit in Virginia Beach. We dabble a little bit in Charlottesville, but, like, full on, we're actually in Virginia Beach. We're on TV.

We're selling postcards. We're doing stuff in the market. But I waited twelve years to get there because I was pretty sure that I wasn't good enough and I wasn't strong enough to do it in a second market. People argue with me that, you know, we should have done it sooner. It's really, you usually don't drown by not taking, you drown by taking on too much water, not the opposite.

You can't, you might not make as much, but you're not gonna drown if you don't get in the water.

Steve: You can't make any stupid mistakes.

Frank: That's it. So, what we have done, and initially it was just me, but now I have a whole team of people, is we look at things over and over again. And I had someone ask me a question about, like, you know, houses I refuse to buy. If a house was built before World War two and it's built of a wood frame, I won't buy it, with rare exception. Mhmm.

Do you know why?

Steve: Because the cost can get pretty high pretty quick.

Frank: Yeah. Yeah. And the other reason is because I bought a bunch of them, and they all went wrong. So they all were terrible. Like, they all had termites or all these other things, but I didn't learn them.

Again, I'm not that smart. I didn't learn enough to the first one. I learned it after, like, the thirteenth. Right. Why the hell do we always have these houses that have termites?

What is it? So what we did was we go back and analyze and pull the hud and say 1932, 1928, 1937. Holy crap. These things are all old. They're all pre World War two.

I stopped buying wood frame pre World War two. So that's something you learn. Now, memories fade, so we write stuff down and we come up with process, and I'm really good at process. Now, I suck at doing it, but I'm really good at making others do it, and I'm really good at following up to make sure they did it. Now, I have a whole staff of people.

I don't have to follow-up with them. They just do it or they hold people accountable, and it's all part of it. But that's how it started was with little tells that we could kind of learn, and we started to write those down. Then I tried to look at things from an efficiency standpoint. Like, okay.

No pre World War two houses of wood. Got it. What are some things that aren't defensive, but are offensive that we can put in line and we can put things together on? What are some of those? Now again, I came from a publicly traded builder.

They're really, really organized. Like, we had cost codes and all this stuff. So I took a bunch of that stuff with me anyways. But then we started to build systems on top of it. When I did that presentation about market cycles that ultimately got me on stage with Sean Terry and then ultimately got me the job with Jason with the Collective Genius, what I started to realize is I started to put pieces together.

And then so I had some of these little things kinda hanging out there written down, but then I started to think with strategy and with, like, kind of precision of how I could attack. And what you see today is that. Like, you know, there's technology in this space that we take for granted that wasn't here before. But if I want to target a certain neighborhood, we can target a certain neighborhood. We can target a certain street.

It's very easy. We just make a phone call or send an email and poof, it's done. Or I send the email, so one of my staff just does it. It goes. But those are things that we didn't used to have.

But if you just kind of think about what's your ultimate goal? My ultimate goal is to own assets. My ultimate goal is not to pay a ton of taxes. My ultimate goal is to have a hedge against inflation. My ultimate goal is if I get older and decide I wanna stop working, I can afford to.

Right? Because I have these assets that put off income. So if you know what you're trying to do, which is build that, it really kinda helps you. And then I'm good at thinking about, okay, strategically, where do we go? What I talked about yesterday was kind of a hub and spoke model.

Mhmm. Our hub is our direct to seller marketing and advertising. Our spokes are things like fix and flip, wholesale, retail, lots, development, those kind of things. But, a hub and a spoke isn't very effective. It doesn't have a wheel.

The things that we have like on the outer edge of that wheel are headhunting, property management. I don't remember the other stuff I wrote down, but those are some of the things that we do as well.

Steve: Just consulting was on there.

Frank: Consulting's on there. Coaching is on there. I think there was one other one. But those are the things that kinda support the business. So what we did is we needed staff, so we built a department for it.

And then once we got good at it, we now bring that to the market, and we are very selective in who we work with, but we'll provide headhunting services for certain business owners, and we're gonna do probably somewhere between thirty and fifty placements this year. It's profitable, but it also supports a business that I need internally. Right. So that's my way of not just building there's a service. That service is wholesale or, short sales or, like, I don't know.

What's some of the other stuff that people do that that

Steve: What is retail flipping, short wholesale? Like, there's these strategies that people use where it's like Novation.

Frank: Okay. Novation. But what are some of the other ones, like, that were super popular? What did Toback used to do? I've seen him in this office.

He used to talk about how he used to do something.

Steve: Remember? I can't.

Frank: Some kind of deed or something. I remember. The point is, like, to me those are just that isn't a business. Mhmm. That is a service.

Steve: It's it's a specialty

Frank: it's a specialty it's something that gets added to but it isn't the business right for me what we have is we have a hub spokes and all kinds of ancillary stuff that brings the business together We're getting better every single day by doing it, but we also get paid if we do it for others. And that to me is a business that is sustainable.

Steve: You said something interesting, and I actually wrote down as an action item from day one because I was in your room for the hot seat,

Frank: which

Steve: I always enjoy being in your room because you run a tight ship. I put down, not for 2021, but sometime in the near future, starting a property management company. Yep. And it's something I've resisted for a very long time, but you made some pretty compelling arguments. Right.

So So can you share those arguments?

Frank: Sure. So here's the first thing. So you know this answer because we just talked about this week, but most people think that the point where you wanna add in property management is around a 100 doors. And I argue that the break even point is somewhere between twenty and thirty doors depending on the rents. If your average rents between like a thousand and $1,500, it's in my opinion, it's about 27 houses.

I've done the math. If you're in a market where it's more expensive, it's probably lower than that. And if you're doing Airbnbs and other stuff, the numbers are lower. Yeah. And this is why.

You can hire who you like, who you think will do a great job, you can incentivize them, and they are if you are smart about it, you can incentivize them based upon their performance with the org portfolio. It's their focus. They're not working on other people's stuff. They're just working on your holdings. So that you have a captive audience, which is a really big deal.

Steve: Versus a private manager who's got like thirty, fifty clients.

Frank: Right. Or someone who like you're just one of Like there's a person in my market, nice enough guy, I don't know how many he owns or how many he manages, it's in the thousands, but none of them are his. And it would take six to eight weeks to turn a house, like we could do a house in six to eight hours. So, what you really start to realize is the number is way lower than people tell you, and one, it gets affordable because it's your money and you can prioritize That's a big thing. So, with internal property management, I also have another tentacle to market where I can weigh what's happening in the market.

When COVID happened last year, my property manager and I got together and she goes, Nobody's renting. Like, nobody's doing anything. She's like, rents have been going up. It stopped. I'm like, okay.

Lower everything by a couple $100. Do what you think you need to do. If it gets aggressive, really aggressive, call me and let's talk about it. But I know because she's out there. She's on the phone.

She's telling me what people can afford. You know

Steve: what the rent to market's doing way before everybody else?

Frank: Yes. And she works for me. So we're talking about it, and she wants to do her job because she's incentivized to do so, but it gives me another data point that I know is truthful.

Steve: Mhmm.

Frank: The other thing is, is you can start to kind of sense not only what's happening with the market, but what kind of specs do you need? Where do you wanna be? What do you wanna look at? People are talking to this person and that person then shares it with you. Residents will give feedback about what they do and don't like.

These are all things that make you stronger. The goal of the rental portfolio is to get a yield. That's what you're doing. You're protecting yourself with tax and inflation risk, but you're also giving yourself a yield. And if you do it right, you can retire off of it.

So properly managing it, it gives you a huge advantage. Having someone who physically does it on staff, I think is a game changer. So let's just talk about you. All right. We start in the middle.

You're managing your stuff, 30 to a 100, whatever. In my case, over 300, a 100,000 feet of retail, some commercial buildings, you know, blah, blah. We've sold a handful of properties turnkey, and we sold a ton of properties wholesale. Most people who own wholesale houses or turn or rental houses have other jobs. They're not professionals like us.

They work as an accountant, and they don't have access to what we have access to and what we take for granted. So in a lot of instances, we treat them really well. They like us, and they're like, Would you manage this for us? I'm like, Yeah, sure. We'll do it.

That's how it started. One at a time, two at a time. Now, we're up to well over 125 individual owners, the numbers of properties is more, and we're going to grow that segment of business. Now we've actually got enough staff and we got people who manage it from top to bottom, where I go to a meeting for ninety minutes a week, I talk about property management, and I don't think about it again until that meeting comes up a week later. So, we're doing all of these things.

The goal is not to need money. It gives you an ability to live a different type of a life. For me, rentals is an annuity. If you're doing rentals and collecting rents, that's part of the annuity. But if you're managing rentals for other people, that's another part of your annuity.

An annuity is something that just pays you over time. So, you might make, on average, we make roughly $250 per door per month. On rents our property management. I think we make two and a half We make a third of that somewhere between a third and 2.5 divided I don't know how to do that math We make between a 100 and like a 100 and $25 per month on every property that we manage

Steve: And how many are you managing right now?

Frank: A couple 100 So But it's getting to a couple like I think we'll get it over 500 in the next twelve months I think in the next twenty four months will be over 1,000 But the point is is you start to look at this like, okay, I can go out and buy a thousand rentals. I can have a huge staff with a huge overhead, and I basically can run a cash neutral business just off of that. Right. Or you can have 600 that you own, and you manage another 800 and you get there that way too or some combination of both of those things. So what you start to realize is I need the service anyways.

I'm really good at it. We can control it. I'm smarter because I have it in house. Oh, and it also pays me. So these are the little things that if you put together, and then if you get to the point where you want to, you can sell a property management business at a very nice multiple.

Right. It becomes it becomes a whole exit strategy.

Steve: You know, one thing was interesting. So Eric Brewer and I, yesterday, we talked about, social media. Mhmm. Right? And how how important it is to add that to your business.

Right. And a lot of people, it's it's just I remember when I went from being just a regular w two employee to running my business. Personally, I already knew about pay yourself first. You wanna build a savings, pay yourself first. Right.

Right? But when I got into business, for whatever reason, I stopped doing that. Right? It's grind, grind, grind, put everything back into the business. And then you re profit first.

Like, oh, I can do that for my business too.

Frank: Right.

Steve: It's interesting to see the evolution because in in we all know how to build business. You've got multiple entities. Yeah. Right? So we're saying, like, how do I grow my social media component?

And the answer is really simple. Hire somebody Yes. To run that. But we all, as business owners, know how to hire people.

Frank: We know

Steve: how to run different departments. Right. But that is, for whatever reason, is a gap. Sure. And but you've already done that.

You already got a person or persons and processes Right. In place.

Frank: Right. So I was a really terrible property manager three and a half years ago because I didn't know what the hell I was doing. So I went and found someone who was a great property manager. And the property management business is a business of people who are very much overlooked and not celebrated. It's just kind of a necessary evil.

And because of that They yelled at. Right. They get yelled. It's a it's a thing. To put it bluntly, it's a thankless job.

Steve: Mhmm.

Frank: So I've got a mentality of just treat people incredibly well, pay them well, incentivize them, and give them a balanced life, like have them have opportunity to do things. And our our property manager, the first one I ever hired, she, she helps us pick our community outreach program. She's really involved in all of these things. So she feels enriched by some of the things we let her do, but at the same time, now we've built support and these types of things around her. So her job is it's never easy, but it's it's it's easier than it used to be.

Yeah. So we

Steve: got the the hub and spoke. So let's talk about how we feed it. Yep. Right? So what does Kava companies look like today as far as people?

Frank: A ton. So you asked how you feed it. You feed a business like these with leads. That's the most the middle is generate real estate leads. Without leads, it all stops.

So where they come from will change depending on market cycle and tech and all this other stuff. So I'm gonna answer this question probably a little bit different than you were thinking, but this is how I'm gonna answer it. So this is what my week looks like. I've got two kids. I usually I get up every day.

I work out. I usually spend some time with my kids and my wife, and I'll be doing emails and such early. And then, you know, between, like, 07:30 and 08:30, I'm kinda with family. 08:48AM, we do a team call. And then on Monday, we spend all of our Monday on sales.

Sales and acquisition. Sales, acquisition, making sure deals are gonna close, problem solving leads, lead gen, prospects, everything. Now, in the old days, I used to sit through this meeting for hours myself. Like, during COVID, it was going till six, seven, 08:00 at night. Now I have some people who run it, and then they give me condensed notes.

That happens on Monday. Let me get into the sales team. I have someone who is an integrations manager who basically hand sorry, guys. Someone who handles lead gen all the way through just ideas and putting things into systems like Salesforce and all that. And then I have someone who is a general manager in the company who is a vice president as well, and, he is this essentially the sales manager.

I've got a bunch of admins that report to him. I think we have seven full time acquisitions managers. I think we have eight lead gen people. We have two direct follow-up people. So we've got a whole team of people that are on that sales side of the business.

That call is greater than twenty, twenty five people when we have it on Monday. And we kind of talk about everything. We have back office, we have settlement settlement coordination. We've got our bookkeeping department. That's on there.

We have our construction department that attends as well. One of their proxies kinda comes. So everybody on Monday, it's all about sales and setting up the week. Tuesday morning is our property management meeting after our team call, then Tuesday is about construction. So the end of the day, Tuesday, I know and I have reports on everything that has to do with sales and everything that has to do with construction.

Wednesday and Thursday are a little bit more free form from my perspective. Now our lead gen team gets together. Our sales team trains with you. We've got other stuff going on. And then on Friday I get reports for every department.

So as I go into the weekend, I kind of know where I stand. What What do I need to talk about on Monday? What am I thinking about? I have updates on all my houses that are under construction. Where are our rents?

Everything. So, we've got department heads that run construction, sales, property management, and the office. So everybody has a department head there. We got leaders up there, and then I have people who are kind of mid level managers below them, and I'm kind of at the top of all of that.

Steve: So for property management, it's one person?

Frank: It's actually two ladies, then a service department of six people.

Steve: And then the construction team. Yep. Because everything's in house. Yep. How many people are on the construction?

Frank: So when I say everything's in house from a construction standpoint, all the management, we don't actually self perform any work, but we manage it. The general manager is at the top. I have a construction manager that runs it. I have an inside office manager who runs the construction department. She has an assistant and an estimator and an estimating assistant.

On the project management side, I have three senior project managers and two lower level project managers that are learning.

Steve: A lot of people. A lot. And then what a lot of people are really concerned about marketing costs, but I'm I'm guessing possibly in your in

Frank: your shoes even close.

Steve: Your labor

Frank: My my overhead's three times my marketing cost.

Steve: Yeah. So what is your labor cost every month

Frank: or your total overhead? I mean, it's almost 2,000,000 a year. Just for just for payroll.

Steve: 2,000,000 a year for payroll? Payroll. Wow. So then how about your marketing?

Frank: Somewhere between $507.50 annually. Okay.

Steve: So 50 k plus a month. Yeah.

Frank: And I'm trying to spend more. Like, I'm trying to spend more because I know, like, if I spend a dollar on TV, I get 5 back. Yeah. So we're working with our TV company. Like, alright.

Can we double our budget? Because if I can double my budget, I can get five extra returns.

Steve: See, I was gonna ask a different question. K. Does any of this keep you up at night?

Frank: It doesn't. The balance sheet does. Like, what has cash? Like, where is cash at? When you're a kid, you have this kind of belief that cash like, if you if you have cash, you're rich.

And if you don't have cash, you're broke. Mhmm. And what I realized as a business owner, cash is just another thing to solve. Staff keeps me up at night from time to time, especially if, you know, I'm about to lose a good person or a good person isn't performing or there's problems. And then the other thing that keeps me up at night is just cash.

Like, I wanna buy a ton, but, you know, sometimes I overbuy and it doesn't close. So there's just things you gotta balance.

Steve: And you're talking about as far as allocating the the the cash? Or

Frank: Yeah. Allocating the cash, making sure you have enough, making sure

Steve: you have reserves. When you're committing something that you have the funds available.

Frank: Right. Got it. Yeah. When I commit to it, I know we have the funds available, but then does you know, do you have 30 closings that are gonna push? Mhmm.

They don't all close when they're supposed to close. Like, these things are not easy to get closed. They're a pain in the ass. Yeah. And there's, you know, someone comes out of the woodwork, someone dies, like, not to be insensitive, but these things happen.

Then there's title problems and something comes up that you didn't expect. It's it's like it's a flipping mess. Mhmm. So, you know, you you're looking at it and you're like, alright, I have $600,000 in wholesale fees this month, and you look up at the end of the month and it's like $2.50. That's a big difference.

Yeah. So those are things that you have to be mindful of. But with the schedule that we've built that I talked to you about a second ago, I see these things coming. And now I have a bookkeeper who looks at this and is like, okay. We gotta talk about cash.

Like, where do we do it? And now we're at a point where we have enough money where it's like, alright. Do we move it from over here to over here to balance it? Like, we we we have reserves and things in place. Now these are things I didn't have for a while, but we have now.

Right.

Steve: So as far as profitability, because, you know, you've seen this. We we we talked about this outside of this is everyone talks about revenue, and revenue is great and all. Yeah. But at the end of the day, it's what you keep, not what you bring in. Correct.

What kind of profitability running that kind of overhead are you bringing in?

Frank: Sure. So what you make and what you keep are two different things.

Steve: Mhmm.

Frank: I have there's a couple of ways to answer that question. We'll do 5.5 in revenue Mhmm. This year on the real estate side. I mean, it's a significant amount of money. But I also have a head of tax or excuse me, a CFO who used to be the head of tax at Dominion Power.

Who provides power out here?

Steve: Out here? Yeah. City of Phoenix.

Frank: Okay. Does it that's literally who does it? Yeah. Like in most major markets, it's like Florida Florida Power and Light is all Florida, for their utilities. Right?

Like there's, like, the Southern Company does it in Georgia. So where I grew where I live, Dominion Power, from basically Pennsylvania to South Carolina, it's all Dominion Power.

Steve: Oh, wow. It's a monopoly.

Frank: It's a huge company. Dominion Power's former head of tax is my CFO. Mhmm. So my tax bill is really low. Yeah.

And we put strategies in place that take time. Now we follow the rules, and we do everything the way you're supposed to, but we have a really good strategy to not pay as much as humanly possible. So, what we do in a lot of instances, we utilize depreciation. And owning as much stuff as we do, you basically get a credit from the government if you own those. So, I have to make $650,000 every year before I pay 1p in tax because of depreciation.

There's something called bonus depreciation, which happening right now. We did what was called an accounting methods change, which forced a loss. So the goal here is to make as much, keep as much as humanly possible and do so legally, and that's what we try and do.

Steve: Got it.

Frank: I can say it to you this way. I have a very successful business. We make a very healthy margin, and then we have every possible strategy in place from a cash management and tax strategy standpoint.

Steve: Yep. So let's pretend you decide today. You know what? I've had it. I'm done.

Mhmm. I've got 300 properties. I'm ready to turn everything off. Could you today?

Frank: Turn everything off what? Like, walk away?

Steve: As far as I walk away from wholesaling, flipping, all this other stuff with everything I got going on right now.

Frank: Could I? Sure. So I'm gonna answer this question. I'm gonna start at a different point. It's not what you asked me.

If I feel like I wake up today and I have to do this, the first thing I do is I don't make that decision today. I weigh that decision carefully. Yeah. Over time, I seek counsel. I talk to people before I eradicate something that's taken me a decade and a half to build.

There is certainly a way that I could cut overhead,

Steve: certainly with staff, and we could be profitable. Well, I'm asking this question because you're going hard. Yeah. You are not taking it easy. You're not taking your foot off the gas.

No. But you could. Yeah. How does Frank stay motivated?

Frank: Kinda like Frank did in sixth grade. I wanna win Yeah. And I wanna do. And I did a presentation about things that are impactful to me, and those things are giving back and doing things that are beyond me. Mhmm.

I'm 46 years old. I got married, you know, four and a half years ago. I've got two young children, so I have more to deal with than just me. But the other thing that many people don't talk about is I love building a team. Like, I really do.

I don't talk about it publicly very often. My favorite thing is building a team. My favorite thing is achieving through others. I don't do anything anymore. I manage.

I follow-up. I check-in. That's the stuff that I do. I love when Angelo does something cool and he shares it with me, or he figures out something, or he feels proud of an accomplishment, or he's trained someone who's done great. I love it when Eddie does it or Carlos does or Cindy does it.

Like, that's the stuff that charges me up. So, I mean, I could have quit twenty years ago when I had a couple million bucks. Like I, like, when I quit my corporate job, I could have stopped. Right. But, like, what the hell am I gonna do?

It would have been very boring. Like, this is sharpening the it's sharpening the axe. It's getting involved. It's building. It's creative.

It requires thought, competition. Love that stuff.