Legacy Capital Co-Founders, Doug Fath and Jeff Greco, discuss the 4 stages of a real estate business owner. Click the video below to watch now.
| Jeff Greco: | Hello, Jeff Greco from Legacy Capital. Doug Fath from Legacy Capital.
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| Doug Fath: | Also from Legacy Capital.
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| Jeff Greco: | Exactly, the same team. And in this video we’re going to be talking about the four stages of a business owner. And so a lot of times when we’re talking to clients, we talk about specific deals and really, we like to look at the holistic business. So, it’s one thing when people have been successful doing a rehab or two or dozens and what we’re committed to is making sure that our clients are actually building strong business’s in the process.
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| So, what we consider are the four stages of a real estate business owner is number one, typically, you’re moving away from something. So, you want to leave your job. You want to replace your income. There’s something in your life that you want to change, so we call step one, moving away from something that you don’t like or you don’t want to do anymore.
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| Doug Fath: | Yeah. And step two is you now moved away from that something or whatever the case may be. You got that business going. That business is actually making money for you. It may not be profitable yet but it’s at least making enough money where you’re paying yourself a salary or you’re taking draws from the business. So that, that second stage level two, you now, really replace your income with whatever it was that you were leaving with your real estate business.
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| Jeff Greco: | Yeah and then stage three would be, if you successfully moved away from what you no longer want to do. Number two is, you have the business, you’re starting to make traction. Number three is really, how do you shape and have the business fulfill on your goals. Whether it’s income goals or it’s serving your community or serving your family. And so, really moving into the next level would be, structuring the business and hitting financial goals and building out the team to make sure you’re continuing to have the success that you want.
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| Doug Fath: | Right. And at that level, look, your profitable right? So, aside from paying yourself and the team and making sure everyone’s provided for there’s additional income above and beyond that. And that’s where cashflow management and investment allocations and things really come in at that level.
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| Jeff Greco: | Yeah, and look, each stage, there’s different challenges that come with it and there’s really big steps from leaving your job or making sure that you’re doing this full time or reaching your goals. And then having the company that supports you or supports your family that you can live on. And then really, as you move up, to not be stressed but maybe even making more than you were making before. And then, the fourth stage would be, actually having a company that runs by itself or what we would call a self managing company. So, that doesn’t mean that you can go to Tahiti for two years and not check your phone or email. But, really what it looks like is having people on your team who know their roles. Are clear about their responsibilities. Are great at what they do. And they allow you as the business owner to focus on what you do best, to actually bring the most value to the company.
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| Doug Fath: | And each of those stages has different problems and different areas that are going to be important for growth. And so, one of the reasons it’s really important to be able to identify where you are in those four stages is exactly because of that. So that you can know, “Okay, here’s what you can locate yourself and see what stage you’re at.” And associate and identify with the problems that you’re gonna need to overcome to get to that next level.
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| Jeff Greco: | Yeah. And also realizing that although there are four stages it’s most helpful and it can sometimes be overwhelming if you think about all the different stages at once. Right? So thinking about what it’s gonna take and what specific plan to get to the next level. And then, what does that look like? And then once you’re there and things are settled, you can start to think about if and when it makes sense to continue to move up to the next levels.
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| Doug Fath: | Right, and typically if you look at the typical client of Legacy Capital. Typically, we’re not dealing with that first level. In other words, the investor that’s moving away from something. Maybe it’s their first rehab or two. Usually the client that we’re working with is more that level two, level three investor aspiring to continue to grow up that ladder. But typically they’re in the business. They’ve got a track record and they’re not looking to ascend up those stages.
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| Jeff Greco: | Right. And they’re also sure that they really want to be in this business. They like the business. They’re good at the business. They’ve maybe fallen down a few times but at the end of the day, they’re committed that, not matter what, sure the money’s great but also there’s a passion and commitment to be successful in this business. And that’s what they’re committed to doing. And it’s inside of that commitment and energy and we can help grow into the different levels.
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| Doug Fath: | Levels are also too some of the things that both Jeff and I enjoy personally. In terms of having … look, it’s certainly important to have conversations about flipping properties and getting them rented out because that’s what produces income. But I think some of the things that we enjoy the most are the higher level business conversations where again, you are profitable. You’ve got a surplus of cash. What’s gonna be the best use for you? In terms of how to invest that cash. Put a cashflow management plan together so that in addition to your time and energy, your money’s able to grow for you as well.
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| Jeff Greco: | Yeah. And so, you do somethings to get the business started. You build a strong business and then it lasts for however long you wish it to. So, those are the four stages of being a real estate business owner and I hope you learned a thing or two.
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Great video….. Jeff & Doug kicking knowledge as always.
We appreciate the coaching and rapid growth you guys add to our real estate business.