Level Jumping: How I grew My Business To Over $1 Million In Profits In 12 Months With Author, Speaker, Trainer & CEO Of Just Start Real Estate Mike Simmons on Episode #0218

Mike Simmons [0:00]
This is Mike Simmons from Just Our Real Estate and you’re listening to EA Interviews.

Intro [0:04]
EA Interviews, Episode 218, inspiration, transformation success stories and the imperfect action round seven days a week. Join Mario Fachini for today’s Expert Authority Effect Interview.

Mario Fachini [0:17]
Have you ever thought about investing? Maybe making 100,000 500,000? How about a million dollars in 12 months? I think that’s pretty interesting. And that’s why I’m excited to have Mike Simmons on today’s episode. He’s an author, a speaker, and CEO. And he’s going to be sharing this with us right after we thank our sponsor.

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Mario Fachini [0:54]
Here he is, ladies and gentlemen, Mr. Mike Simmons. Mike, How’re you feeling today?

Mike Simmons [0:59]
I’m doing great, man. I’m doing great. Thanks for having me.

Mario Fachini [1:01]
Oh, it’s my pleasure. I’m excited to just dive right in because there’s few people who can say they broke the million dollar barrier. And you did it in 12 months with investing? How did you pull that off?

Mike Simmons [1:14]
Great question. It was a what you call a six year overnight success. I started real estate made a lot of mistakes, I was having trouble scaling my business until I made some key changes in my in my company that allowed me to go over that million dollar mark. And I did I didn’t let actually little less than 12 months. And I learned a lot in that time. And the way I did it was really just learning some key stuff. Right, I started surrounding myself with the right people that was huge. I got a mentor, which was actually so transformative in my business, it’s hard to even describe. And I started doing things like tracking numbers, right? People don’t track numbers very well in their business, and I wasn’t tracking numbers. And if you’re not tracking numbers, not only do you not know, if you’re doing well, you don’t know if you’re doing poorly, I knew money was coming in and going out. I just didn’t always know where and how much. And finally, I learned how to hire and that I needed to hire. There’s only so what you can do as an individual, right, you have a ceiling on what you can accomplish. And, and that’s not to say that people aren’t able to do amazing things and more than they think and a lot of times it’s true. But no matter how optimized you are, no matter how efficient you are, the fact of the matter is you have a certain amount of time in the day, if you really want to grow beyond what one person can physically do. No matter how great that person is. You have to hire, you have to build a team. And that’s some of the things that I learned that will allow me to get over that hump.

Mario Fachini [2:31]
Well, I appreciate you for talking about that because I’ve told people that myself, and I’m very thankful for my team, there’s no way I could pull this off without them. But some people seem like they’re averse to it just because it’s like, well, no one can do it as good as me and whatever trash they’re telling themselves because I mean, you’re not going to do it on your own. So I want to ask you, when it comes to the team, is there a secret size that the team should be? Or is it the right people? Or is it? You know, tell us a little bit about that side?

Mike Simmons [3:02]
Yeah, there’s no secret size. I mean, obviously, if you’re a very, very, very small business, the bottom line is the size of the company can’t be more than what your cash flow can handle, obviously, right? So and that sounds like a joke. But it’s, you know what I know people that have hired themselves right out of a business because they over hire, they overextended, they’re overhead and their personnel cost them way too much. And they weren’t able to spend money in other key areas. And they they failed, right? But as far as like, who do you hire ultra important like the, there’s something called opportunity cost. And when you hire the wrong people, and you aren’t able to seize the opportunities in front of your company, that’s the opportunity cost. And for me and my company, as a real estate investor, I found it, it was most applicable to my sales team. If I hired the wrong sales people, then I was not closing or getting enough opportunities. And in my business, we’re talking every transaction is 10s of 1000s, or hundreds of 1000s. So you leave a couple of those on the table a month. And next thing you know, year later, you’ve missed millions of dollars worth of opportunity. So opportunity cost is huge. We we take hiring very seriously. It’s very important to us, we try to do it slowly, and we try to fire fast, because you’re not helping you think people think they’re helping by not letting someone go as early as maybe they want you to hold on to them, but you’re really hurting them, you’re not gonna keep them they’re not able to get to a place where they actually have a better fit. And your company opportunity cost is huge. And the other people that work for you are being they’re suffering, productivity, a company is suffering and that’s hurting everybody. So hiring slow firing fast is certainly something we try to do.

Mario Fachini [4:34]
Why do you think people so let’s say they get past the point where they go, I do want a team they build it up and I’ve dealt with this before where it’s like, you know, on a personal level, you don’t want to let someone go because you know, you don’t want to hurt them but from a company standpoint, it’s I believe that too, you know, hire slow fire fast because then it just drags it out and you know, it’s hurting the team. It’s hurting you you know they’re not doing a great job. And you’re just prolonging it. Yeah. Why do you think that is with some people?

Mike Simmons [5:07]
They feel bad people just, you know, you try. And listen, most people are genuinely pretty good. And firing someone feels bad. It sucks. And you know, it’s hard to do, it doesn’t feel good to do it. And it’s sort of why do people, why are people bad parents, a lot of times, it’s because they don’t have the stomach to do what they need to do. They don’t, they can’t hold their kids accountable because their kids cry. And then they feel bad that the kids are crying, their kids are sad. So they, they they don’t make them follow through on the punishment, whatever it is. And then you have these kids that are just running around crazy, employs it the same way, if you don’t do what you need to do, it’s usually because it hurts you, it feels bad to you. If you’ve ever had to fire somebody, you know what I’m talking about. It’s not a fun unless that person was just awful. And it was just like a relief. But even when they’re awful and it’s a relief. You don’t wake up that morning and bounce out of bed and go, yeah, I get to fire somebody today. You feel bad about it. So, you know, people just do it, because they don’t do it fast enough. Because it just feels bad. You know, really, but but if you reframe your thinking a little bit, and so yes, it feels bad, but you’re actually doing your company, your other employees and the person you’re gonna let go, you’re ultimately doing them a favor. It’s like a bad relationship. How long should you let any bad personal relationship go? People need to be able to move on and be with someone they really, really like and who likes them. And your employees deserve that too. So if it’s not a good fit, and you know, it’s not a good fit, you’re actually hurting them by not letting them go sooner.

Mario Fachini [6:36]
I’m glad you’re saying that. Because it’s something that’s not talked about enough. And I know too many people that have been hurt by it. I’ll even throw myself in there. Because you’re right. It’s not fun. Unless you’re like a cold hearted, mean person. You’re not like, oh, wow, this is gonna be so fun. It sucks. But, you know, it sucks worse, just dragging it out six or 12 months?

Mike Simmons [6:56]
Totally. Yep, absolutely. It just makes everything harder, right? Everybody gets deeper, and trench. There’s more things, though, to try to untangle. It’s like a relationship. It’s just, you’re better off to do it sooner.

Mario Fachini [7:05]
So let’s talk about the good side of the secrets you’re sharing with us? And how, what are the benefits of having the good team in place is that, you know, one of the reasons you were able to pull it off in 12 months,

Mike Simmons [7:19]
I’ll be perfectly honest with you, I would love to say yes, I had the perfect team. And we were very, you know, cohesive. And we all love each other. Not the case, when I built my company up from really, I was on a pace to do about $200,000 in gross profits. And within 12 months, I got over a million in gross profits. Now I did that, unfortunately, with not the best team in the world. And it and they weren’t, it wasn’t so much they weren’t the best team, as it was, I was a bad leader. So when I started hiring, I had this I’ll be honest, I had a goal to get to a million dollars in revenue or gross profit. That was my goal. And so I was going to get there call them hell or high water. And I started bringing people in and I was just cramming information down their throat, I was just, you know, like beating a horse to the finish line like we got there. But we got there with a team that felt a little bit abused, probably exhausted, underappreciated. And we spent the next year after that, we still made over a million. But we spent the next year trying to repair the foundation that we built. That wasn’t great. And it was all because I was a bad leader. I was hiring the wrong people. I was incentivizing them poorly. I was mean, frankly fairly abusive, not not verbally, but in the amount of work and what I expected from them. It was unreasonable. And I had people quit, I had to fire people. And at the end of the day, once we hit our goal, and once we are in the repair, repairing and rebuilding mold, I realized it was me I spent the whole first year going, it’s them, it’s them, it’s that they don’t have drive, they don’t want it. They don’t care. They’re not hard workers. And at the end of the day, what I had to really come to grips with was I was my expectations were unrealistic. I expected people to work like I did and know what I know, after five or six years of building to that point. And the fact of the matter is they’re not owners. They’re incentivized differently than I am, they’re never going to care like I do, and they’re not going to work like I do necessarily. So doesn’t mean they’re not great doesn’t mean they’re not hard workers. But I was being very unrealistic with what I was expecting from them. So we do it differently. Now we hire for, we really hire for values more than we hire for experience and knowledge. I want a good value fit and someone that really fits with our culture. And if I can find that person, and they have any amount of experience or knowledge in that area, I can train them up and make them.

Mario Fachini [9:35]
I love that you’re saying that. So now I have two questions for you. One of them is how do you decide what’s reasonable and unreasonable in the workload in relation to the compensation.

Mike Simmons [9:46]
We usually start with the workload being less than I know they can probably handle and then we also we keep people in lanes. I’m real big in my company for I hire someone to do a specific job and that’s what I expect them to do. When I first started hiring, I tried to hire a few people and just give them everything I was doing. Like the whole, they were running the whole company. And it was they were wearing all these different hats in these different departments. And it was completely ridiculous. Now, if I hire a salesperson, their job is to wake up in the morning, do their cold calls, or do their lead gen stuff, right? Look at their calendar, go on their appointments, get contracts, when they get back to the office, they give the contract to the next person who processes it, and they go back and rinse and repeat. They’re all about talking to homeowners, and signing contracts. That’s all they do. Because their sales, they should not be doing other things. And then I have someone when they hand that off, I have somebody, my company called a dispositions manager, that person is hid their job is to figure out how we’re going to best monetize this property. And that’s what they do all day, they don’t go out and sign contracts, they figure out how to take that contract and monetize it for our company in the best possible way. So everyone has a lane that they’re in. And they have a very, very, very clear set of instructions on what success means to that position. And that’s how I keep people with realistic export expectations. And a lot of it is just, it’s trial and error. And it’s the past, it’s its data. So I use data to tell me what I should expect from my people going forward.

Mario Fachini [11:13]
Excellent. Now the values that you brought up, what are the values you look for? Because I know this is increasingly important because I mean, let’s be honest, anyone can do certain types of work, especially if they’re trained in it. But not everyone has the same values.

Mike Simmons [11:30]
Yep. 100% in value sometimes are difficult to figure out in an interview. So my interviews are a lot different than a lot of people’s interviews. I’m not hyper focused necessarily on their credentials. I’m focused more on how they view things, how they talk about their past employers, how they talk about their past co workers. So what kind of values we look for one of them that’s huge to me. And this is something I added in the last few years. And it’s called Extreme Ownership. There’s a book by the same name by Jocko Willink, fantastic book, I had a chance to meet Jocko and actually get trained a little bit by his team. So the Extreme Ownership part of the hiring process is important to me. When I asked somebody at your last position, what did you think of your last two bosses, and they go, oh, idiots, they didn’t know what they were talking about. They constantly made my job hard and screwed me up. It’s like, okay, you don’t take ownership. Obviously, you’re blaming somebody else for your problem. So Extreme Ownership is huge for me. Continuous education, I want people who are voracious learners, I want people who read, I want people who are trying to better themselves all the time. Integrity is huge. Integrity is one of those cliche ones that sound like it’s just thrown in there to look good. But it means something in my company. And in my industry, for that matter. There’s a lot of opportunities to be perfectly frank, to screw people over to be unethical. And to take advantage of people, there’s plenty of opportunities to do that. And what I tell my team is, there’s no profit margin, there’s no amount of money, there’s no deal, that’s important enough for me to sell my soul or to have the person that I look at when I see when I wake up the morning, look in the mirror, I don’t want to look back at a bad person. I don’t want that person looking back in the mirror to be a bad person. And I’ve told myself because the sales team has the best opportunity if they really wanted to take advantage of people. And I’ve had sales people call me on the road, say, hey, listen, we got this house. We’re talking to the owner. It’s a little lady. She has no family. She has no idea that this house is worth and she told me whatever, I think it’s fair, that that’s what she’ll sell it for. I could literally tell this woman anything, we could destroy this and make the I mean, we could have a huge, huge, huge day on this house. And I just tell them, listen, what if that was your grandmother, if that was your mom, but what would you want the person across in them to say to them, would you want to take advantage of them? Do you want to be that guy? And I’d go now we had a number going in. We knew what a fair number was going in what we were willing to pay, pay that. That’s what you pay. That’s what you do. Right? So integrity, work ethic, Extreme Ownership, continuous education. Those are the kinds of things that I look for employee.

Mario Fachini [14:04]
Well, I’m glad you do because I know there’s plenty of people out there that aren’t as scrupulous. They’re unscrupulous. They’re not as good as you

Mike Simmons [14:15]
Unscrupulous. Yeah, exactly. There are there’s lots of them in every industry, honestly. But yeah, they’re there. They’re out there.

Mario Fachini [14:22]
So how did you get into real estate because I noticed you said for six years, what were you doing prior to that?

Mike Simmons [14:29]
So prior to that, I worked in the automotive industry, no big surprise. I’m in I’m in Michigan. I worked in the automotive industry got my degree later in life. I didn’t get my college degree right out of high school. I got a full time job at a great company. I was making good money and I thought this is it. I’m here forever. Did not end up staying there forever. Got into the automotive industry. Ended up going back and getting my four year degree as an adult with kids and the whole nine working full time. And I was working my way up the corporate ladder. I was in a an automotive company our our company made seat structures for cars. And I was in the prototype department. So I was a project manager in the prototype department, we would build seats and then the test team would crash them or burn them or freeze them and do all these things. And we would look at the results and go, okay, so there was failure modes, here, here, here, let’s change the design. Let’s rebuild them. And let’s crush them again. And that was the industry that I was in. And it was actually pretty fun and interesting. And it changed a lot because it was prototypes. We are constantly just crashing and blowing things up and seeing what happened. So pretty cool. But honestly, in that life, I knew the jobs that I was kind of like looking at as far as what did I want to do in this company over the next 10 to 20 years and the jobs that I really wanted to get, eventually, the people who held them were unhappy. They were not people that enjoy their life. They hated their husbands, they hated their wives, they hated their kids, they never had free time. They were miserable. And I thought, this cannot possibly be my goal to be where these people are. Because they’re telling me it’s horrible. And just started looking at the Internet, how do I invest? What do I do with my money, so I can retire early. And I came across real estate and it really piqued my interest. I loved it. I love learning about it. I love going to seminars, and Rios. And I dove into that world and started flipping houses with my wife. And that’s kind of how it all started.

Mario Fachini [16:15]
Well, I’m glad you did find it. And I felt the same way early on where it was just like, Whatever we do, we’re gonna choose to do for the rest of our life, or at the very least a large chunk slash portion of it. It’s like, if you don’t enjoy it, why are you doing it, you can make a there’s 1,000,001 things to do to make money. And I know very few that are better than entrepreneur, you know, being a business owner entrepreneur.

Mike Simmons [16:43]
Yep. 100% 100%. Right. And that’s I didn’t know that growing up, I there was no entrepreneurs in my life. Nobody was telling me to be an entrepreneur. So I did it later in life. I mean, I really didn’t start my business until I was 38. And I had been in the automotive industry and or like in a real job for, you know, at that point, now 18 years or something 17 years. So I spent a good amount of time in corporate America, and it was soul sucking, I hated it. I didn’t like any part of it. And I didn’t even know that owning a business was really an option for me. But once I started down this path, it was like I tell people, it was like, I was underwater for years and came up and finally got a breath of like, clean, fresh air. And that’s kind of how it felt. And so I I never want to go back when it was awful. I didn’t like that at all.

Mario Fachini [17:29]
I’m glad you got to that point. So let’s talk about the future because obviously you’re in a good place now. Where do you see the business going over the next two to five years?

Mike Simmons [17:40]
Boy,that’s a great question. So I use a there’s a book called Traction that I use. That’s how I run my business right off of that book. So we do quarterly meetings. And we just finished our last quarterly meeting to talk about the rest of this year. So we have a big one coming up at the beginning of the year, like end of the year, end of this year, beginning of next year, it’ll be kind of a planning for the year. And I’m right now in the process of kind of coming up with my most revised two to five year plans. The interesting thing about being an entrepreneur, especially if you’re a typical entrepreneur, is you have Entrepreneurial ADD where you do get a little distracted. And I fight that every day. There’s like you said, there’s so many ways you can make money and so many things you can do that it The hardest thing you can do as an entrepreneur is to say no to an opportunity that looks awesome, because you have a plan. So that’s something I’ve struggled with. But to answer your question directly. My real estate investing company is going great. I’ve got a team that runs it, I don’t have to be involved day to day. So that’s that’s kind of running on its own. I’ve recently started a lending company. So now I lend money to house flippers and, and landlords and other folks that are doing things inside of real estate. That’s the latest company that I started, I’m excited about that I have a podcast, like you obviously do. And that’s important to me, I’ve spent a lot of time with a podcast giving and giving content, just just providing content and value like crazy. And I I haven’t really focused a ton on monetizing it because I was just about I don’t even care about money. Like, I don’t care about money. I don’t care about making money, the podcast, I just want to give value. But I you know, I’m getting older, I just realized at some point, if I’m going to spend a lot of time doing something that’s not my family, and not with my family, it simply has to pay for itself and more, or I can’t continue to do it indefinitely. And that may sound crass, and it may sound greedy. But the fact of the matter is like time matters time is the one asset and the one commodity that we cannot get back. So if I’m going to do something, like I said, that takes me away from my family for any amount of time. It has to be productive from a monetary standpoint. So I’m doing that now too. I just wrote a book. I’m in the process of kind of talking about that and going on shows I’m excited about it. It’s the journey I took from going from not really making much money to over a million dollars in profits and the book kind of outlines exactly how I did that. So that’s kind of what I’m up to right now. And probably for the next few years.

Mario Fachini [20:06]
Well, I appreciate you for sharing that with us. And there’s nothing crass about it. Because the reality is, I know what microphone you have there, you told me about the mixer, I know you got lights, just like I do. And I can assure you, for anyone listening, this stuff is not cheap. So and it’s sure as heck not free. So it’s definitely worth the investment. But it takes money to produce a show a quality show, I should say, I mean, I’m not going to go off a tangent on that one. But there’s nothing crass about it, you should be focused on revenue and profits and knowing the margins and all of that and there’s some people who think it is a bad thing, but it’s not. And they’re generally the ones not looking at it and that’s why it feels bad. You can still have the same heart and say, I want to have the XYZ margin, and it’s allowing me to help this many more people versus I struggle, they struggle and now nothing gets accomplished.

Mike Simmons [21:01]
Yeah, absolutely. Absolutely. I’ve never looked at my podcast as being something I need to survive, obviously. But yeah, it’s the fact of the matter is, I’ve got so much time in my day, and my month and whatever. So yeah, I have to make decisions about where I’m going to spend it.

Mario Fachini [21:16]
Yeah, in that time with your family. I mean, it takes, you know, for me, 30 to 60 minutes, every single one and you do hundreds and hundreds and 1000s of those. It’s like, those are years of your life. I absolutely love it. But the reality is, you can’t be in two places at once. And as far as the opportunities the other pretty much every day. But what the bad thing is when you get 100 a day, and you only get through the first 10% of each one. Yeah, you never get any you never get the traction that you need to have that breakthrough. It’s like yeah, it’s a great opportunity bolt, you know, why don’t you do it? It’s great opportunity. I’m like, I already have a dozen great opportunities. I’m focusing on one and it’s my business.

Mike Simmons [21:58]
Yep, totally 100%.

Mario Fachini [22:01]
So for anyone that’s thinking about getting into real estate, what would you say some of the things they should look for are?

Mike Simmons [22:10]
I say, figure out what it is that you enjoy. What do you like, if you want to get into real estate, ask yourself why? What is it about it that excites you? Here’s what I’ve seen. And there’s a lot of ways you can get into real estate, don’t get me wrong. But two of the more popular let’s just say three of the most popular like the three pillars would be landlord, meaning like buying whole properties, flipping properties, otherwise called fix and flip and what’s called wholesaling, which is essentially getting purchase agreements and selling those purchase agreements to a landlord or house flipper who wants to take that property all the way to fruition. So those are the three major ways that most people get into real estate investing. You have to talk you have to think about what it is about real estate that excites you and which one of those three, for example, is most interesting to you. And what I hear people tell me a lot is this. This happens all the time. wholesaling is kind of been a buzzword over the last few years, maybe handful of years. A lot of people talk about wholesaling, wholesaling. So I’ll talk to folks that are new, and they’ll say, Well, I flipped four or five houses. I loved it. It was a great experience. I’m so excited. I see the new owners and the other excited about the new house. And I just love it. I love flipping houses. But I’m going to start wholesaling now, and it’s like, wait, why? Why are you doing that? Well, I just heard someone talking about it. It sounds great. It’s like, does that sound exciting to you? Do you want to wholesale? Well, I just think it’s probably the thing to do. Everyone else is doing it. I’m telling these are like verbatim like conversations. And I’ll go no, you should be flipping houses because that excites you, that makes you want to get up in the morning because it’s gonna get hard. And when it does, if you don’t love what you’re doing, you’re gonna have a hard time sticking to it. So I say for people who are getting started, figure out what it is you want to do. Figure out what you can do, where your strengths are and where your passion is and go in that direction. Don’t do what you see someone on a seminar or even a podcast or you know, whatever on a web website what they’re doing, because, you know, listen, a lot of people exaggerate their success anyway but second of all, that’s what they’re excited about. You need to figure out what you’re excited about and then follow that because like I said, it’s gonna get tough and when it does you better be happy about what you’re doing. I used to flip houses by the way i said i started flipping houses, I don’t flip houses that much anymore. I do some but that process didn’t get me out of bed in the morning after a while so I switched my model a little bit I started doing buy and hold and wholesaling. Now I do do a lot of wholesale deals I last year I did over 100 like I do a lot of wholesale deals ‘cuz I like wholesaling I like the model a lot better than I did flipping does that mean wholesaling is better no means the wholesaling is better for me, but not necessarily for you. So you got to figure out your line.

Mario Fachini [24:41]
I love that honesty because even with what you’re saying, oh I love giving them the keys and they get to do this and you know they really appreciate you’re probably not doing a lot of that in wholesaling.

Mike Simmons [24:51]
No, no, I never get to see the finished product. There’s no like ugly duckling journey to the beautiful swan for the house. Like I don’t see that to me. Me, my business, honestly, I wholesale real estate but but really what my business is, its sales and marketing, it’s all it is I market for opportunities, I get the contract, I sell that contract to someone who wants to take it the rest of the way. And then I go on to the next one. Now, it’s houses. But quite frankly, my business model could be applied to anything, it doesn’t matter. It just happens to be houses because I’m good at that I understand that world. And that’s where I’m gonna be the make the biggest splash and have them the most value. But it could be anything, I don’t see him I don’t see the finished products usually. And I honestly, I don’t care because for me, one thing I learned about myself is I’m impatient. I’m super impatient. So be wholesaling, the thing about wholesaling that attracts me is that the contract in the deal lifespan is two to four weeks maximum, right? Whereas a flip is like two to four months, maybe six months, maybe a year, depending on the actual deal. I’m like two to four weeks, and it’s gone. So there’s a lot of velocity with wholesaling. It all moves fast. And I like that it moves fast. And I feel like it insulates me a little bit from recessions and economy because if I only have a contract for two weeks, how bad can the real estate market get in two weeks, right? It’s not gonna happen. So I can get in and out of things fast. But I feel like I’m not exposed, like people were back in 2008, frankly, and had to really take a big bath on some of the stuff you’re holding.

Mario Fachini [26:22]
Yeah, and that’s a great, like you said, I love when you said, it’s the best fit for me. Because there’s other people who you know, it’s basically the creatives versus spreadsheet. And I can do both of them. I prefer the creative, but there’s other times I’m like, I don’t care, I just want to focus in you know, like with profits and margins and stuff like that, you’re not going to be doing that and cram. But, you know, the people who like process a, that’s a better fit for them for you know, us, it’s, I’d probably say this, probably, obviously it is for you. And then you said there was a third one buy and hold.

Mike Simmons [26:58]
Yeah, buy and hold landlords, people who want to buy for long term. You know, property like passive, it’s very yeah,

Mario Fachini [27:04]
I was just gonna say that’s more of the passive where you’re getting the renters, you own the asset. And,

Mike Simmons [27:08]
Yeah, it’s a drip, you know, I mean, it’s not, it’s not an avalanche of money every month, unless you have a ton of rentals. But I mean, when you’re starting off, one, or two, or three, or four or five rentals, you know, we’re talking hundreds of dollars a month, it’s not insanely like gonna change your life overnight. But if you do a good job, and you buy right and you hold on to him for a long term, it builds momentum, you know, you keep adding houses, you pay him off. Next thing you know, that house that was giving you $200 of passive income is now giving you $800 a passive income because you paid it off, you own it free and clear. And you start doing that over and over again. And then you have appreciation over time. Like it’s a strong strategy, but it’s not if you need money right now, like by the end of the year, you need to make $20,000 rentals is not how you’re going to do it. You’re gonna probably need to flip a house or debt.

Mario Fachini [27:52]
That’s a five to 10 year plan, at least.

Mike Simmons [27:55]
Yeah, at least, at least.

Mario Fachini [27:57]
There was someone I knew in college. And he had been doing, he was just so casual. We were like a homework thing. And he was he was an older gentleman at the time. And he was just like, you know, just just bought another an apartment complex. And I thought he meant he got an apartment. He meant he got the whole complex, and I’m like, come to find out he had been doing real estate for 30 years at that point, maybe 40. And he owned around 15 million in assets. And he had rentals in every single one. And I was just like, you know, I knew of the concept. I wasn’t doing it in college, but I was like, that’s a lot of, that’s a lot of passive. But again, it wasn’t, you know, three 612 months, it was he probably started with a couple houses then went to 10 then went to 20, then 100. And, you know, then started buying buildings. I mean, that’s cool to people.

Mike Simmons [28:55]
Exactly how it works.

Mario Fachini [28:57]
So when you’re saying sales and marketing, how vital has it been to your success in real estate? Because I know you’re saying you can apply it to anything.

Mike Simmons [29:07]
Totally apply to anything. Um, it works great in real estate. The funny thing about real estate when not sales so much. But when it comes to marketing, real estate is so antiquated. Real Estate Investing, I should say, is so antiquated. Like I’m in I’m in a mastermind where there’s hundreds of investors from around the country. I know, I know guys that are just mungus real estate investors just massive. And if and I know them all personally so I know what where their deals are coming from. I know what marketing channels are working best for them. And almost to a person, the marketing channel that brings them the most amount of leads and makes them the most amount of money over the last five to 10 years is direct mail. Believe it or not sending out these little postcards or or letters. And nowadays, by the way, most people are sending postcards, right so they’re sending a postcard That says, hey, my name is Mike. So I got this property at this address, I’m interested in buying it, I can pay all cash don’t have to do repairs, call me if you want to sell your house like, that’s how people are buying houses at like a large scale. And that’s how they’re doing most of the deals. Now, there’s a lot of online stuff people do now like Google AdWords, or it’s called PPC, text blasts, ringless, voicemail and some of these other a little bit more tech heavy stuff. But honestly, of all the investors that I’ve met in the last 10 years, like 95% of them are getting most of the deals from direct mail. Like it’s insane post, like you go out to your mailbox and you get this car that says, owner buy your house like that some people are selling the house. Now, why is that? Most people are on the internet, most people search on the internet, you would think Google AdWords would outperform direct mail every single day. And some people in some markets it does. But for most part, it doesn’t. Because my clients are older, frankly. I mean, we’re buying houses more often from folks who have life events. And they’re in the stage of life where they need to start selling their property and they have equity. And there’s a million reasons why people sell their property to an investor as opposed to selling it through the MLS. But that’s just the demographic of people that I can most often help our people who are a little bit older, so they’re still checking the mail, they’re still looking at their mail, right? I’ve talked to younger folks who said, If you send me a postcard like that, I would burn it, like I would never even read it. And it’s it’s true, because they’re gonna they want to find it on Google or whatever. Like they’re gonna do a search and do stuff on Facebook ads or whatever. Like, that’s how you’re going to reach a younger demographic. But my parents, my grandparents, you can still reach them through the mail, they’re still opening it up and looking at it. And until that demographic changes, and now we’re buying from folks that are currently on the younger side, probably direct mail will continue to work.

Mario Fachini [31:44]
And it’s I’ve told my marketing clients before, we’ve incorporated direct mailing campaigns because you can also put the website like if you want to do lead gen, you put the website on the postcard but it’s so great because it went from direct mail, then everyone’s like, oh, email, everything and digital this and then everyone started doing it. Because it was so inexpensive. But now there’s hardly anyone doing the direct mail. So the sheer nature of doing it. Yeah, you can clean up with it. I think it’s great. I did want to ask you, though, are you doing? Do you know if they’re doing custom postcards? Or are you talking like E D D with Every Door Direct for anyone who does?

Mike Simmons [32:25]
Not Every Door Direct? No way. That’s to me, that’s a that’s a huge in my industry. That’s, I think it’s a waste of time and money. Now I know they’re very, very cheap, I get that. But for me, it’s like it’s almost like the billboard

Mario Fachini [32:38]
For you’re pulling up the addresses and you know, who you’re targeting directly before you target them?

Mike Simmons [32:43]
Yes, I am, I have criteria that you have to meet to get a postcard from me, I don’t want to send you a postcard. I’m not saying you specifically. But I don’t want to send a person a postcard who’s upside down on their mortgage, they only lived there for a year like they are never going to sell like that person, it’s a waste of a postcard. They’re not unless they’re in some distress, they’re not going to sell it to me, I want to sell to people who have some sort of a distress but also some equity, it’s a lot easier to help people with equity than without equity. There’s things we can do without equity, don’t get me wrong, there’s creative financing, solutions, things like that. But in general, I don’t I also don’t use billboards because I don’t want 10,000 people to see necessarily my ad, it’s just a waste. I want to be able to track to like, I want to know why people are why people are responding to my card. And I want to know which demographics are responding. So I do a lot of split testing. And I have 100 different phone numbers that I use for different things. Like, I want to know why everything’s working. If I go Every Door Direct, I don’t necessarily know why sure, I can ask them, I get that. But I want to be able to test and turn on and off marketing channels that are working or not working. I’m super data driven with my marketing, super data driven.

Mario Fachini [33:55]
I think that’s something that’s overlooked too. And like I was saying, as much as I’m a creative, I love going into spreadsheets and looking at profit margins and especially in marketing campaigns, because the data doesn’t lie here. And almost always you think this is gonna work and then it doesn’t and then the thing you think doesn’t work does but you know, you can’t eat. When you have empirical facts like that. It’s you just do more of what’s working. And it’s simple if you can remove the emotion from it. And I think it’s great, you’re bringing this up because the direct mail is huge. But again, if you have that spray and pray mentality versus I mean, who wants 10,000 leads, if 9992 of them are all junk, right? Yeah, there’s a call Just give me the 10 that are gonna be that are ready to go right now and they’re a perfect fit.

Mike Simmons [34:42]
Yep, I’ve told my team, so we get a lot of phone calls. We try to drive people to a phone call as often as we can. I’ve told my team, my goal as in the marketing department, my goal is not to get more calls. My goal is to get more calls from people who have houses that they have the ability to sell them the desire to sell ,right, there’s a big difference between the two. So just making the phone ring means someone has to pick it up and I have to pay them. Like you said, I would rather than not pick up 9950 calls that are junk. I would rather just pick up the phone for 50 calls where there’s a motivated seller that wants to sell their house.

Mario Fachini [35:16]
Yeah, it’s it’s a better return on investment. You’re not annoying people. And people don’t realize that when you’re doing marketing, it’s not just generating interest. It’s also getting the people repelling the people who are a bad fit. Everyone thinks like, just because you’re doing a campaign it’s like, oh, I want everyone it’s like, no, you want the five, ten percent of the right people.

Mike Simmons [35:39]
I joke around real quick this oh, go ahead. I’m sorry.

Mario Fachini [35:43]
I was saying, when I’m speaking in front of audiences, I always go who would love 10,000 leads and everyone raises their hand I go. Now if I could deliver that by tomorrow, how many of your businesses could honestly support it right now and everyone goes. . . Because the fact of the matter is, is if you don’t have the systems and processes in place, your subconscious is telling you this is not this does not add up. And that’s why it doesn’t work.

Mike Simmons [36:11]
Totally, yeah. And you know, the number one question that we used to get when we send out our direct mail, the number one question was, how did you get my information. And that’s all they wanted to know, they didn’t want to sell their house, they just want to give me information. So on my card, I started printing, we obtained your information from public record which is available to the general public that, that phrase on there cut my calls down by more than half. But we didn’t lose any any volume. Like, because we just cut up like you said we repelled, we answered the question that most people had, who were never going to sell to us. And when they don’t call us, that’s perfect. I love that our call volume went down our deal flow didn’t get hurt at all. So that’s that’s exactly what you want.

Mario Fachini [36:53]
Yeah, when you when you can figure out those hot buttons and answer them ahead of time. That’s when marketing gets fun. Yeah. because like you said, you’re you’re talking about transformational amounts. It’s not just, oh, we got a few less calls, I mean, over half of a 10,000 spread.That’s a lot.

Mike Simmons [37:08]
Yeah,

Mario Fachini [37:09]
that’s a that’s a big a lot. Alright, so we’re gonna do the, I mean this whole thing’s been fun. But we have the Wheel of Whatever. Right before we thank the sponsor. And my question for you is, who is a real estate entrepreneur you’d love to have dinner with?

Mike Simmons [37:35]
And a real estate entrepreneur, real estate entrepreneur, I’d like to have dinner with maybe it’s a good question,

Mario Fachini [37:41]
I can open it up to any entrepreneur if you will.

Mike Simmons [37:45]
Oh, any entrepreneur, okay, that changes it for me, I would probably most like to have dinner with Gary, Gary Vaynerchuk. If I could talk to you, if I could deal with any. That’d be it.

Mario Fachini [37:55]
And why Gary?

Mike Simmons [37:59]
Um, I’ve been a follower of his for a long time, I actually had the huge honor of speaking at one of his events. Now speaking of one of his events doesn’t make you his bestie. And you get to hang out with him at home and drive back to the hotel with him. It means you speak at one of his events and you don’t necessarily get a ton of time. So I’ve been a big follower of his and I’m just I admire his approach. It’s pretty straightforward. I like that he, he really talks about hustle and not some magic bullet or some some secret formula to success. That is BS. He doesn’t, you know, he’s just he’s got a gritty approach to success. And I just appreciate that I’m, you know, midwest kid here born or raised automotive, you know, capital of the world. And I just like when people are honest, and they sell you hard work is what makes you win. Like, you have to be smart. And there’s certainly some some other stuff going on. But you can’t just you know, these people who just show pictures of them standing next to a Mercedes with a handful of money in the real estate industry is the worst for this really cliche, just sort of really bad imagery where it implies that it’s all like champagne and money, and everyone succeeds. And it’s super easy. It’s all BS, it takes work. And there’s a little luck in there too. So somebody like Gary, who’s just sort of got that mentality, I just enjoy and I’d love to get his advice on I would like to get his advice on my company in my industry, because he doesn’t talk specifically about real estate very often. And I would love to hear what he thinks.

Mario Fachini [39:21]
What a great answer. Thank you for sharing that I can tell you, it wasn’t just an answer to answer.

Mike Simmons [39:31]
No, not at all.

Mario Fachini [39:32]
He is he is definitely a good one. And I think it’d be interesting to I mean, such a wealth of wisdom. So thank you for that. We’re going to thank our sponsor and come back for the Imperfect Action Round.

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Mario Fachini [41:17]
And we are back with the Imperfect Action Round. Mike, are you ready to take imperfect action?

Mike Simmons [41:21]
I am so ready let’s do this.

Mario Fachini [41:24]
All right, this is a rapid fire answers 60 seconds or less. The first question is what is the fastest path to the profits?

Mike Simmons [41:34]
Fastest path the profits 100 100% it’s execution. It’s not education, it’s not thinking and deliberating. It’s not shiny object. It’s action and the people who see that take action are always the more successful people.

Mario Fachini [41:47]
Excellent number two, what is the biggest problem you see your prospects making and the fastest way for them to fix it?

Mike Simmons [41:54]
If you mean prospects by the people that I buy houses from the biggest mistake they’re making is waiting too long word that we’re at the tipping point in the real estate industry we’re at the top of the market values are as high as they’ve ever been. Everyone thinks they’re gonna cash in on their house. The fact of the matter is, I’m telling you this you’re not a seller. So I have no ulterior motives here. It The longer you hold on to your house over the next six months, the less you’re gonna make on it, house prices are gonna go down they just are if you want to sell your house, do it now. That’s the best time

Mario Fachini [42:20]
Number three, what is the best way to maximize customer lifetime value?

Mike Simmons [42:27]
To be honest with them, to do what you say you’re going to do and and to be there for them and to over deliver. You know, I just listened to a talk this weekend of a guy named Kevin Brown. And he talked about the kind of the Disney effect right over deliver do more than people expect and do more than you tell them you’re going to do and you’ll get a customer for life.

Mario Fachini [42:48]
Excellent. What is a book or two that you’d recommend expert authority world?

Mike Simmons [42:57]
I think I mentioned Extreme Ownership. Jocko Willink love that book. Everyone should read it. It’s not all it’s a little bit holding up a mirror. And it’s a little bit of like you just better be honest with yourself. It’s a little uncomfortable sometimes. But I think everyone should read it. And I think I also mentioned Traction. Those are my two favorite books lately. Traction if you are running a business small to medium sized business and you’re struggling with meetings and how to structure things and I think you should retraction because it changed my business and I think it’s an absolutely fantastic way to run a business very easy to understand and very actionable.

Mario Fachini [43:27]
Gino Wickman. Right.

Mike Simmons [43:29]
You know, Wickman? Yep, exactly.

Mario Fachini [43:31]
Excellent. Well, I’ve enjoyed this. Thank you for sharing. Where would you like people to learn more?

Mike Simmons [43:38]
You can go to Mike Simmons.com. You can check out my podcast and just our real estate and I did write a book so it’s called Level Jumping. You can check that out as well.

Mario Fachini [43:48]
Excellent. Well, thank you so much, Mike. It’s been a pleasure.

Mike Simmons [43:52]
Thank you.

Mario Fachini [43:53]
All right, Expert Authority World. We have another great episode here today. I’ll see you tomorrow. Have a great day.

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www.EAInterviews.com [44:34]
Hey, thanks for listening to today’s episode. I hope you got a lot out of it. I know I sure did. If you haven’t done so already, I invite you to subscribe to the show. And also be sure to check out ea interviews.com for complete shownotes the full interview video experience links to the resources we mentioned in more. Have a blessed day and I’ll see you tomorrow.