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From Breaking The Law To Successful House Flipper
How Michael Green Turned Around His Life
On this episode, I’ve got Michael Green from The Flip Factor. Michael, thank you so much for being on the show. How are you?
I’m doing great. Thank you for inviting me on.
It is my pleasure. Michael, tell us how you got started in business altogether. Were you always an entrepreneur? Was that something that you were born with or was that a gradual process?
I would definitely say it was something I was born with. All the way down to getting kicked out of school in the 5th or 6th grade trying to sell illegal switchblades and stuff in school and getting suspended for it. I think I was definitely born to do that. I’ve got a few jobs in my life. They didn’t go well. It was definitely painful for me. My first job was I worked for my stepfather doing flooring in. Within a few years, I got into doing that full-time myself and becoming a subcontractor. That’s how I made a living until about 31 years old when I got into real estate full-time flipping houses which had always been my dream. I think someone who was born to be an entrepreneurial person, I was always attracted to house flipping and real estate investing in general. The late-night infomercials drove me crazy.
I got into it when I was doing flooring for a guy who was flipping a house. He invited me to a seminar and said, “I’ve got to check out this guy.” I’ve been thinking about it and I probably have been thinking about flipping houses for a few years, had read probably twenty books over a few years. I’m a way analytical guy, so I never took any action because I was going to read for the rest of my life. He finally introduced me to this person who’d been doing house flipping for many years, a local guy, not a big guru or anything. He ended up convincing me to pay him $15,000 to invest with them and get coached by him. I’m glad I did it because here I am several years later and I don’t know if I’d probably still be reading books if I hadn’t met him. He definitely pushed it and propelled me into taking action and getting out of my head and doing some cool stuff.Putting your heart to any kind of real estate investing is not going to change your life, it's going to change your family's lives. Click To Tweet
I want to get back to that being a perpetual student, a lifelong student because I know I’ve done it and I know some people that have done it. For me personally, I’ve gone from I wanted to do the HGTV-type of flipping and I wanted to do fix and flip, flipping, tax liens, tax deeds and landlording. I couldn’t make up my mind until 2017 when I finally pulled the trigger and bought my first property in Pittsburgh. I’m a New Yorker and I did the owner financing. That’s the niche I decided to do. When you work with that gentleman that had the many years’ experience, was it that you paid the money that made you say, “I put something into this that I got to see this through?” How did you get your mind to get into flipping? In other words, not to be still reading books.
Putting your money where your mouth is huge. Many years ago, I was a business coach and I coached people for free to get my hours in so I could get my certification. I never got any results with anyone that I coached for free. I realize it’s exactly that. Even if they just put a few hundred bucks in, a few hundred dollars will dictate whether you’re serious about doing this, taking money out of our pocket. When you have no money involved, everyone’s like, “I’ll do it.” When I put the $15,000, I did not have that $15,000. He showed me how to max out five credit cards and then gave me a payment plan for what I couldn’t pay for.
I definitely went all-in with this and glad and about a couple of months of working with them, I did a wholesale deal and made about $16,000. He got the $15,000 of it. I paid everything off and kept the cool $1,000 for myself. Money is definitely the key to it and getting serious about it because I feel like when we tried to do this on our own, we don’t have enough confidence to do. We can get pulled in so many different directions because so many things in real estate are moneymakers. There’s like five to ten different great ways to make money in real estate and it’s truly a matter of what you say, it’s like, “You’ve got to choose something and kill it.” That one thing, nail it until you’re making money and be the Michael Phelps of whatever you decide to do.
I agree. Especially when you go to these seminars, if it’s flipping then all of a sudden, somebody tells you tax liens are easier. You don’t have to do this and that. It’s so much information out there. Five to ten different ways to make money and you decided, “Flipping is it for me, any type of owner financing, lease purchase, that’s what I want to do.” For flipping, what are the most common house-flipping myths that you hear out there?
That it’s easy. Flipping’s not easy by any means. I’m close to about 1,100 flips and about 800 of those are fixed and flips, the rest are wholesale deals. Even now, I still everyday work on making my systems more efficient, analyzing my business. I’m doing some stuff that most people aren’t. I’m able to flip houses regularly, consistently, stay on budget, but I work hard at being good at it. I realize that a lot of people are driven to this business based on a get rich quick thing, like a biz-op, MLM feel like it’s going to be super easy, but it’s not. It’s like anything else, it’s not easy.
With that being said, I don’t know of a better business with a higher reward if you’re willing to put the work into it because I’ve put work into becoming a good poker player. I wanted to play pool for a while and I worked for a few years and I’m thinking about one of the biggest waste of times ever that no upside to them. When I put my heart to this, the upside is tremendous. Putting your heart to any kind of real estate investing is not going to change your life, it’s going to change your family’s lives. Your kids are going to have a different trajectory. It’s a very generational thing because it can be taught to so many others. Most of my family’s working with me now. I can inspire them to jump in also.
To backtrack a little bit, it was definitely the money that you put in but was it also something in your gut telling you, “I can do this. I’m working with someone that I paid.” You could pay someone and still not do anything. You know people like that. I know people like that. Was it something in your gut or your heart that said, “I know I can do this?”
I feel like it was in my gut, but I couldn’t take action on it for whatever reason. It was a little more information then I’ll do it or a little more information then I’ll do it. I grew up poor in the projects and even though Carleton Sheets made it seem easy, I still had this limiting belief in the back of my heart, “Where’s the money coming from?” I had a friend who I was playing poker with, a broke ass guy at the table somehow came into some money and he’s like, “I’m going to flip a house. Would you want to do it with me?” I’m like, “Not really. I’m waiting. I’ve got a couple more books to read apparently.” He just, “I’ll do it without you.”
I was like, “I’ve been studying for a few years. I know so much about this compared to him.” He literally decided an hour ago he was going to flip a house and he’s ready to jump in. That’s the type of guy he was. He ended up being. Eventually, I got a serious case of FOMO because I was watching him getting ready to flip a house and so I ended up doing it with him. He pushed me into doing it. It wasn’t just a coach, it was an opportunity being around what I call a crazy action-taker, someone who takes action with a zero plan. He and I were a perfect balance. He was an awful business partner but he was the perfect person to propel me into doing my first flip.
Once I did my first flip with the combination of him pushing my coach and me teaching me at the same time, it lined up exactly. To backtrack, the coach got me thinking about real estate and as I was talking to my friend at the poker table, he heard the confidence and the excitement in my voice and I think I got him thinking about it and then he pulled me into it. I don’t know if I would ever do anything if it wasn’t for him. We might call that the perfect storm. Who knows where I would be if it wasn’t for my crazy friend at the poker table, the coach I paid $15,000 and all that coming together. Once I did my first house, then I’d broken the seal. I realized I could do this. It was a lot of work but I can do it because I didn’t know if it was possible before for someone like me.When you are a beginner in real estate, you need the best information and the fastest route to a result. Click To Tweet
It’s always if you get that first deal, you break that seal and all of a sudden you’re like, “I can do this. It does work and I work.” With the property that I bought in Pittsburgh, and it was probably a couple of years before I pulled the trigger and I said, “I got to do it.” For me, as they say getting out of the box was when I went to Morocco. I always knock myself down by saying, “I only could do a three-hour flight. I prefer only do the United States, eastern seaboard, that’s it.” Sooner or later you got to take a leap of faith, you’ve got to be around certain people and I was with some of my friends that went to Morocco. They pushed me and I said, “I’m going to do it.” I’m glad I did. It was a great experience and something that I had to do. I think by people listening to you and your story, it will inspire more people to take that leap of faith. Sooner or later you got to. Whether you got to seek a new job or find that mate or whatever, you got to take that leap. What do you say about that, Michael?
It’s the ultimate balance of getting a little bit of knowledge and then taking action. I call it calculated action-taking. That’s where I’m at these days. Definitely one of the biggest reasons for my success is that I’m a calculated action-taker. That part that kept me from doing a deal for a few years is one of my biggest strengths now. The only thing I had to adjust with it was the fact that I would calculate forever and never take action. I learned what the absolute minimum amount of information I need to make a calculated decision is and then understand that I’ll have some risks because nothing’s riskless. There’ll be some risks, but I’m calculating the risks and I can handle whatever that risk is.
What is something, whether it’s your current business or before that you might’ve failed that and you learn from to say, “I learned from this, there won’t be a second mistake.”
My biggest thing that I was saying, this is from house flipping and house flipping I’ve had a lot of ups and downs. I’ve done a lot of coaching in my life. My first coach was not even my only coach. I’ve had many since and I still even now I’m always working with a coach because I believe in education, something that I believe in myself and practice and all part of my journey of growth. I want to get better. I want to stay on top. I don’t ever want to have to go back to doing hardwood floors for sure. I’m hoping that I’ll be a house slipper for life. I do that by trying to make sure I’m one of the top 1% and that I know what I’m doing and I’ve got that ability.
The mistakes that I’ve made over the years is that everyone talks about what we’ll call the foundational ways of flipping houses. All the gurus have the same thing. Send letters out, do this, say this and honestly following those without ever challenging them and they work. I was able to flip my first 600 houses using those. The problem was when I was flipping using those tactics, I was doing what everyone else was doing. When I did that, I had to work super hard to beat everyone. I’d always outperform everyone. You’re like Gary Vee, you work until 2:00 in the morning and out grind everyone. It’s pretty cool.
I get where he’s coming from with that, but I made a shift a few years ago when I hired a high-level E-Myth coach and he started to help me build systems in my business. I started creating what I call high-performance house flipping. It’s a system I’m using in my business so that I can cut my hours in half. I work about twenty hours a week and I’m able to flip about 50 to 70 houses a year with good profit margins on them. Essentially, I’m scaling my business down in order to profit up. I would say the biggest mistake I made is when I followed those things like, “Get the three estimates from my contractor.” All the things we all hear is like, “This is how you do business.” I’m not saying that any of those things are wrong. They’re just basic. They’re not going ever to give you a high-level competitive edge against your competitors. Even as a beginner, it makes a lot of sense to have the best information. I remember someone telling me like, “When someone’s a beginner, they just need beginner information.”
I disagree with that. I realized that people, when they’re a beginner, they need the best information. You need the fastest route to a result. What is the fastest way to make a check? Every month that you’re working on this, you become more likely not to follow through. It takes you a few months to do your first deal. There’s an even better chance that you’re not going to do it. If it takes you a couple of years, you’ve got to be a soldier to get a deal after that because most people don’t make it even a few months. I think the fastest way to go from work to money is the key. Using the best tactics, using the tactics that others aren’t using, taking things and changing them around a little bit to be more effective. That’s been the secret to what I’ve been doing well in the last few years. I’ve always slipped a lot of houses, people consider me to be successful but I just work hard at it.
Now, I have lifestyle and I never knew I wanted it that much until about 3.5 years ago when I had it. I did some traveling, I started going out of the country and I don’t think I had ever been past the Eastern Seaboard before that also. I’ve been to Europe and Costa Rica, a lot of different places and my business run fine while I’m gone. That’s my big thing. The big mistake was following what I call the caveman way of house flipping, still being taught by all the big gurus now. If you have no information, misinformation is way better than nothing or going in without any information. If you have the premium information, it literally skyrockets results for your business. It allows you to have some freedom.
With the premium education, would that be either through courses, a teacher/mentor or maybe following someone around? What would you consider a premium education?
There are great books. There are podcasts. There are so many ways to get a lot of foundational information. What we do and what I’ve done in my business is I took all my foundational information, which I would say if I told you all the things I used to do in my business, you’d be like, “I’ve heard a lot of that. It all makes sense. It sounds about normal stuff.” I start challenging it. Everything’s about taking your current system and then breaking it down and realizing is there any redundancies in it? Is there anything that you are doing that you don’t need to do? One of the tactics that I used to do is I follow my schedule and cut my work hours in half. This is a powerful thing to do. It almost seems impossible to say, “I’m going to cut my work hours in half. How would I do that without cutting my production down?”Premium information skyrockets result for your business and allows you to have some freedom. Click To Tweet
There’s a ton of studies that say that if we work 40 hours a week, we literally are doing about three hours a day worth of real work. The rest of the time we’re doing what we call the 80%, the 80/20 Rule, 80% which is pretty meaningless. It isn’t driving the needle and making us more money. If we get focused on the 20% which we have no choice if we were to cut our work hours in half, we have to focus on the income-producing activities that push the needle forward and call our business to get more productive. When I took my workday, which was about 60 hours a week and I took it down to twenty and said, “I’m working from 8:00 to 12:00 every day and anything that doesn’t get done gets pushed in the next day.” What I found out is that there was a ton of stuff, my 80%, that I thought needed to be done or I thought I need to hire someone to do. Most of it didn’t even need to be done. Most of it vanished, most of that stuff that I thought I need to do. It’s amazing in a business when you start to realize what you have to do versus what you don’t have to do.
Premium education doesn’t necessarily have to be one single person. It could be you teaching yourself, it could be a high-level performance coach, it could be anything you want. It’s hard because there are many people out there teaching many things. They’re not upfront with you. I think that coaching is all about the person you like. Somebody you want to coach. You might be the perfect fit for them so everybody has that perfect coach out there. Make sure that you yourself, no matter who your coach is, is challenging the concepts to make sure there’s no better way to do it. If there is a better way, it means working fewer hours and propelling your business forward. Having that competitive edge we desperately need now.
What are some helpful things to know when you’re starting out in the flipping business? What one to three things you could give us from your experience?
It’s been a long time since I started in the flipping business. I’m trying to remember. It’s been quite a while, but I’ve thought about it and I’ve seen others that are starting, friends and stuff I’ve helped out. One of the big things is to get your stuff together. Get realistic about what expectations you should set for the business. One of the biggest areas of discrepancies is how much work people think they need to do to get a result. People think like, “Let’s use the MLS.” I love MLS. I crushed it. I have a great system for it. It’s free. That’s one of the reasons I love it. I pay for marketing also, but anything free, I should always focus on that first.
A lot of times when I’ll say, “Do this MLS system, people,” but three or four hours’ work into it and they’ll be like, “It didn’t work.” I set the expectation that, “You’re new at it. You might want to consider to put 80 hours into it first.” It doesn’t mean you’ll do that for every deal. I put about four hours a deal to get each deal. However, you might be 80 hours on your first deal and then once you get a feel for how it works and what it’s working, it might go right down to twenty hours a deal, ten hours a deal and then five hours a deal. You have to put that time in a lot of times.
That would be the first thing is to create realistic expectations. I flipped a house in seven days one time, a $45,000 renovation. I would say that the same $45,000 renovation, I’d totally be okay if it took me two months to do it. You can make a good living doing that two months, but you wouldn’t want to do it in eight months. It wouldn’t make you a lot of profit. You’d probably lose your competitive edge with that. Make sure you understand the expectations of how much prospecting you have to do. How many leads do you have to generate? How many of those leads should you close and that ratio? What profits should you make on a lease option or owner finance or a flip or a wholesale deal? Understanding in your market what you’re doing. What should you make? We hear this stuff on Facebook, there’s always someone who made $80,000 on their rehab and made $50,000 on their wholesale deal. These happen, but I call these the grand slams in the baseball game. There’s a ton of funds and singles and walks that happen in order to get to that.
Some people see those false expectations. When you show that check for $50,000 or $80,000, it’s like a grand slam. How about the single where you make $3,000 to $5,000? It’s a start somewhere. How can someone that’s new into the business get started? Even though you’ll get the education or whatever, but is there a market they should concentrate on? Should they concentrate on their home market even though it could be New York City, Boston or LA? Do you consider maybe going outside of the area where the houses might be cheap? Let’s say in New York City where if you go Upstate you might find houses at $50,000 to $80,000. What’s your opinion on that?
My number one opinion on that is that if you live in an area that I call a surge area, that means that’s an optimal area to invest because there are a lot of transactions going on, a lot of first-time homebuyers, a lot of investors. If you get a deal you can rehab it, wholesale it, keep it as a rental. That’s a perfect surge area. Every area has that usually within an hour to two-hour drive. If you’re lucky enough to live in a surge area where all the investing’s going on, you should invest closest to home as possible. If you live in New York City, however, that’s definitely going to be one of those top five communities that’s hard to invest in. The barrier of entry is so high to invest in Boston or dead in the city of Boston, LA, New York, Toronto, these are all big hard-to-get-into cities.
I would recommend traveling to the closest area to you that’s going to be reasonably priced because when you get to these areas where there’s a lot of transactions going on, there’s a lot of movement happening. There are all these deals and opportunities, you’re going to be swimming definitely with the current instead of against the current. It’s going to be a lot easier as a newbie trying to get a deal versus trying to compete for a New York City million-dollar condo. You’re going to be up against some top-level sharks. It’s going to take a little bit of luck to get that happening there even with a coach or anyone else.
You go into a perfect neighborhood and as long as you’re prospecting, you’re doing a great job. There’s enough opportunity you could fall into something. Also, the money piece of this always is a big deal for everyone. It makes a lot more sense for your first investment to be $100,000 versus $1 million. It’s an easier barrier of entry. It’s easier to get mom or dad to put some equity up, a friend you know from school or use your IRA or get a hard money lender to believe in you, that’s going to lend to you. You bring your first deal to a hard money lender, it’s $1 million, it’s an uphill battle. I would definitely travel. I don’t believe in traveling just to travel. I’m not currently in a great neighborhood for beginner investing. Other than that, I live in Baltimore. I’m not too far from you. Everyone says, “Why don’t you go to another location?” I’m like, “Baltimore’s got everything I need. I’ve been up to do it. I’ve done up to 150 houses a year and I had room to grow from there.” I don’t believe in going to another market just for the fun of it if I’m in a great market currently, which I happen to be in a very good market for selling and flipping.In business, it is amazing when you start to realize what you have to do versus what you don't have to do. Click To Tweet
I heard about Baltimore a few years ago. I don’t know how true this is, Mike. You could probably elaborate more. I don’t know if it was the mayor’s office, but they would give an incentive to investors to come in there, fix and flip a house and then put it back on the market either to rent or resell because they were trying to fix certain neighborhoods. Do I have my information right on that? This was what I heard. It could be secondhand.People love people who are authentic. It's the greatest time ever not to be perfect in our lives. Click To Tweet
They’ve had what they call the Vacancy Value Program where they’ll sell you a house for a dollar and don’t get too excited about that. Sometimes they’ll sell your house for a dollar that needs $50,000 in work and it’s worth $30,000 when you’re done. You’ve got to be careful about that but there are some decent ones in there that maybe you could put $50,000 in and it’s worth $90,000 or $100,000 when you’re done. You have to do it within a year. With that being said, the bigger reason Baltimore’s amazing is because it’s old. A lot of things are over 100 years old. It’s transitional. There are plenty of people that are getting mortgages, can’t afford them and then they’ve got a decent amount of foreclosures. It’s probably seventh in the country. We’ve got a decent amount of that going on and we’ve got a lot of neighborhoods that are transitioning in the wrong direction.
My perfect area is where it’s 50% of people in the area love the area and it’s a great place to live because it’s better where I grew up, the neighborhood next to this. 50% of them went downhill from when I was here many years ago. I can’t stay any longer. I make all my money buying from the people who hate the neighborhood and then selling to the people who love it. There’s got to be that nice balance of about 50/50 where it’s plenty of people to buy from, plenty of people to sell to. When you get in New York City, you pretty much have a 100% balance of everyone wants to live there and virtually no one wants to sell because it’s such a great area. That makes inventory very low and a lot of people fighting over it.
When you talk to a seller and you find out that they’re motivated, what is then their number one goal? It’s to get rid of the house, but is there anything else that goes along with that? Wherein other words, I want to get rid of the house, but I might want this, this and this? What have you encountered when you talk to motivated sellers?
Everything. I think if you’re doing a great job, you’re not selling as much as you’re qualifying and you’re building rapport. You’re asking the right questions to figure out what their needs are. Honestly, as a real estate investor, if we can help people and we can give them something they need, that’s usually the reason they give us a discount. Everyone thinks that, “You guys are ripping people off. You’re taking advantage of people.” First of all, people are not stupid. If they sell their house at a discount, they’re doing it for a reason. It’s the same reason we buy peanut butter and jelly sandwiches from the grocery store that are $5 when you can make it for a fraction of the price, but instead we want to buy it with the ends cut off and we pay a premium. It’s for convenience.
The same reason you pay $50 to eat a steak when we could cook one at home for $10. They sell at a discount. It’s because they want the convenience of not dealing with the unknown or fixing the house up that’s in bad shape and paying commission to the realtor and then maybe it’s sitting on the market forever and making price reductions. They want a quick sale. They want the problem to go away. Our job is to say like, “What would make this offer better, more desirable to you other than price?”
We all know people want the most money, they want a fair price but what if we could let you stay for an extra two weeks so you’d have time to move your stuff? Maybe pay for the moving, anything we can do to help. We’re usually more than happy to do so. That’s one of our competitive edges because a lot of the people are just straight forward. We’ll buy, you got to get out. We’re like, “What’s important?” If I can accommodate it, then I’ll do it within reason. I can’t think of anything too crazy anyone’s ever asked for. It’s usually like assistance in moving, things like that. More importantly, they want to know how the transaction is going to go and they want to feel comfortable that they’re going to get their money and everything’s going to be good.
Building rapport with the seller is definitely important. When you’re at someone’s home and you’re looking to buy it at a discount, do you find common ground between you and the seller and say, “I used to go fishing.” “I love fishing.” I always hear different stories. How do you facilitate that?
I’ll tell you this. During my first few years in this business, I learned every sales tactic. I had Sandler Training. I learned all the sales stuff. John Martinez, all the big guys out there and cool people. My belief a few years ago when we got into this super competitive market was when things get competitive, you’ve got to stand out. I start realizing that I’m not naturally a salesperson. I don’ like to push people into doing things that they don’t want to do. I’ve always tried to do the techniques, but I found myself always falling off from those pushy car salesman’s tactics. I told this to my coach a few years ago and he’s like, “What’s the resistance?” We talked through it and he’s like, “You don’t have to sell people. It’s more about enrollment. It’s about you servicing them at a very high level.”We first have to become the person we want to hire. Click To Tweet
We start to put together what I call anti-selling because I believe sales are dead. I think most people are very educated and they could sense when you come in with this slick tactic. People know now. They might not have known several years ago back when people were selling siding and stuff like that, but now they’ve seen enough movies. It’s been stereotyped, the car sales guy. The second you sound like any of that, they then categorize you as that slick salesperson and all the trust has been lost once that happens.
For me, it’s super important I get in there and first I qualify them, which is super different from what everyone else. Everyone else is like, “Here are the reasons you should do business with me.” They’re qualifying themselves. I qualify them first. As I qualify them, this is a very different way. It builds a lot of trust just in doing that because they’re like, “Mike’s very different.” I commonly hear, “Mike, I feel like I can trust you.” They can because I use a sales tactic or we’ll call anti-selling. I’m super truthful and transparent and it’s the exact opposite of everything we’ve ever learned in sales. It’s like, “Don’t go and tell them the truth because what if you tell them the truth? They won’t want to do business with you.” What I found is when you’re truthful it builds that super high level of rapport. It’s way better than, “I see you have a fish. I fish also.”
I’m always looking for commonalities because building rapport is based on commonalities, but the best way to build rapport is that first you have to qualify someone. Once you’ve qualified them, now they’re set up and they’re open to building a rapport with you. You think about it like this, when you’re qualifying someone, you take it. It’s like a rubber band that you’re stretching out. When you have that tension on the rubber band, everyone wants that tension to go away. Once it goes away and you release the tension because now you’ve qualified that there were a few putting a lot of time into, like maybe they don’t have a high mortgage, they’re in the right place to sell you the house. You start building rapport, but the key is they’re in a place to be open to you building rapport with them.
If they call up and they’re like, “Make me an offer, Willy.” You’re like, “Do you fish?” That would be a weird time to build rapport. Get through qualifying them first and then we build rapport. Once we’ve done both of those, the last part of it is I reverse close them. I let them close their selves. This process for me, the reason I’ve loved it so much is that it is very true to who I am. When I figured it out a few years ago, my conversion rate was cut in half because I was using tactics for years that weren’t who I was even though I was following them already. I was learning the scripts and I was doing all the cool stuff that I had learned for years because I thought that’s what I had to do. It was so refreshing when I realized that I don’t have to do that.
I think there’s a big push for this. I’m seeing a lot of people starting to understand this concept. It’s not foreign anymore. When I talked about it a few years ago, people look at me like I have three heads. “What are you talking about? Sales? You’ve got to make some sales.” People love people who are authentic. It’s the greatest time ever not to be perfect in our lives. It’s a great time. People love it when you come in and you let them know. Even now, I used to wear a suit and tie when I went to appointments. Now, I wear a t-shirt and jeans and I fit in with most everyone and a normal guy.
That’s perfect especially when you’re meeting with sellers, you don’t want to show them that you have the Armani suit and everything. They’re going to think, “Who’s this guy?” As you said, it will be a used car salesman. Michael, backtrack a little bit. With all the house flipping that you do, you have the fix and flip. The contractors, that are always the biggest question that people probably ask you or you’ve heard. How do you vet a contractor? How do you get to finish everything on time and on a budget? If that doesn’t happen, what’s the process for you to like, “I got to get back on track or I got to find someone else.”
My old way was to tell them what I wanted them to do. If they didn’t do it, punch them in the face. It didn’t work all that well. I feel like I should punch them in the face. Somehow, I clearly couldn’t punch them in the face. Also, I’ve made a lot of changes in the last couple of years. I did a lot of deep reflection, took an emotional intelligence course, worked on being a better person. The thing that I found was is that for many years I’ve had contractors that work for me, but they work for me because I paid them a check. What changed a few years ago, which is probably my biggest and best advice is I start to change myself. I had these high expectations of the types of contractors I wanted to work for me. I want them to be on time and reliable and trustworthy and care about my company. I wanted all these things that we don’t commonly see with contractors.
What I realized was that in order to find a contractor of this high standard, we have first to become the person we want to hire. It’s hard to attract an amazing rock star contractor if you’re not currently rock star yourself. I started working on me and what quickly happened was I started realizing that I had a lot of contractors that were very low level and I allowed them to stay in my wheelhouse and in my inner circle because I was a little bit low level and I had some work to do. There were some things I needed to fix. It’s the reality of all of us, I would say I wasn’t the perfect leader. I need to work on my leadership skills. As I worked on those leadership skills and I started becoming a better person, the first thing that happened is I had a high enough standard that I didn’t allow these troublemakers to stay in my business. I started realizing I don’t need that. I had a higher standard. What happened is because you always spend 80% of your time with the few troublemakers and then you ignore all your rock stars that you should be spending the time with. I was able to get rid of the troublemakers, pour into my rock stars and build them up and make them into better contractors, bigger, better people.It's a hard thing to do as a leader to let someone fail. Click To Tweet
You support them in every way possible. What I found was, is that when I started doing that, I was able to have some great contractors. I was able to take okay contractors and build them into the rock stars and those rock stars start referring to the other rock stars. You got to start with you. That’s step number one. Step number two is then once you understand what it is, because a lot of the work and a lot of attracting the right people is about how you treat them. We want to treat contractors. First of all, we want to be consistent. We want to know our stuff. I literally have learned everything about contracting so that I could be a good leader. They say it takes this long to put a set of cabinets in. I want to know that, that way I know who I’m dealing with. I know if I’m dealing with a good person or not. We want to keep people accountable. Many of the things we need to be great at, the work with contractors are the same things as we need to be a good parent or good husband or a good boyfriend or just a good friend in general. If we ever take account of how good of a friend are we. I realized I wasn’t running at a ten-level with my friendships, my relationships, any of those things. It showed through my contractors. I know this is a crazy thing.
Everybody hears it and you’re like, “I’ve never thought of it that way.” Who do you need to become to attract the person you want working for you? Since that’s happened, and I’m still working on myself, that journey never ends. I realize now I have a lot fewer employees. I’m running the same business now with three employees, making the same profit as I was with sixteen employees. Rock stars can do three to four times the work of an average employee and without breaking a sweat. It’s hard to attract those types of people when you aren’t that person yourself. My point on that too is you either got to be a rock star or you got to be an inspiring rockstar. Some of us are on the journey and I might even say I’m an aspiring rock star still because I’m working on being a rock star every day.
That’s a great point. It’s always about what do you project. I’m the same way. I try to work on myself every day. Being a full-time entrepreneur in the flipping business, how is your day structured? Do you do most of your work in the mornings, then in the afternoon you spend time with family and friends? How does that work?
I have a new business that I’m starting and I get to work with some people and help out some friends and family. I usually do that in the afternoon, but I structure most of my mornings getting in my house, flipping stuff done. These days, I don’t have to work on it that much, but I go through every morning and I want to work out in the morning. I want to start a cup of coffee, a workout, go through and put my day together. I spend about a half-hour in the morning after I work out for about an hour, I’ll spend a half-hour putting together my productivity calendar where it’s going to start to figure out what are the most important things to get done. I always love to do a brain dump because I know there’s like 50 things in my head. However, there are only a couple of those things that are meaningful that need to get done. I want to start prioritizing things.
I feel like sometimes it’s so easy to let the low priority things that feel like they are very needed and they’re actually just not. They feel like fires but most of the time they’re just perceived fires. Sometimes we also like to gravitate towards the things we like to do versus the things we need to do. I’m always taking about a half-hour in the morning after I work out and I only work out three days a week. There are days that I don’t. I check emails, but I’m taking about a half-hour to figure my day out and the best way to use my day. I don’t give myself a lot of hours to work every day. I don’t want to work until 12:00 at night. I’ve started a new business outside of flipping that’s caused me to work a lot more. I work on that like crazy because it’s my passion, it’s my dream. That’s the belief of why I like to flip houses. I think whatever your passion is, use the house flipping to fund it. The guy that works for me, he wants to become an actor and also he works for me. Every dollar he makes from working with me and all that he uses to get a manager, to get acting lessons, all of this cool stuff.
A lot of times, we flip and we flip and this is what I was doing for years and it was like I was doing it only to make money, but there was no end result for it. I wasn’t living my dream. I love to travel. Anyway, I like giving back. I help a lot of people. I want to give back. I pour into that and I love helping that. My days, at the beginning of the day, it’s about working out, eating the right foods. I got to lose some weight. I went on a cruise and gained ten pounds because I ate everything. That’s some of my diet battles but working out in the morning and then half-hour a day planning my day out to make sure it’s going to be as productive as possible. Weeding out any of the time sucks, the things that are going to eat my time alive. From there, what I do in order to have a very productive morning is I schedule things and I don’t allow people to interrupt my schedule. If somebody’s going to go to Home Depot and I have a project manager for this too and I’ve taught him. They’re going to go to Home Depot, then I don’t let them just go any time of the day. I tell them it’s like 7:00 to 9:00 that the phone will get answered. You go any time after that. I’m not letting or I’ll let them fail.
It’s a hard thing to do as a leader to let someone fail, but if they fail today, tomorrow, they’ll listen. I’m not trying to be a jerk about it but if you allow people to dictate your schedule, you’ll get a call at 10:00 at night on Sunday with a fire that must need to be put out. I realized that if I let most things come back to the next day and this is what I’ve learned to do with my team and everyone is if I say, “Now, I’m a little bit busy but let’s talk tomorrow morning about it.” Most of the time when we get on the call tomorrow morning, 90% of the time the problem solved itself. It never even needed me.
I appreciate that. Michael, we’re almost out of time. If somebody wants to look for you, what’s the best way to find you?
Thank you so much for being on the show. I appreciate you taking time out of your busy schedule.
Thank you, Willy. It was great.
That was Michael Green from The Flip Factor. Michael, thank you so much for being on the show. You could find Michael at The Flip Factor Podcast on iTunes. You can find them on Facebook at The Flip Factor. Also, you could find them on Instagram, @TheFlipFactorPodcast. Before I go, there are a couple of more things. If you go to P2PRE.com, that’s our website. Check out our past show and our resource page. We try to update these as fast as possible. Also, if you go to iTunes and look for us in Peer 2 Peer Real Estate Podcast. Please subscribe, leave a review, give us a rating and tell us how we can make this show better.
Please, and I say this at every show and I know you’re probably tired of it, but you cannot give up on your dreams. Live it the way you want. You worked hard for it. Don’t let anyone try to talk you out of it. Protect your dream. I saw the movie the Pursuit of Happyness with Will Smith. There’s a little segment there where he says, “Don’t let anyone talk you out of your dream. If you have a dream, protect it.” Some people might not be able to do what you want to do so they’re going to try to talk you out of it. Thank you for reading.
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