Turning Debt Into Opportunity to Build True Financial Freedom with Sarah Bratcher

[0:00] Welcome to the REI Agent, a holistic approach to life through real estate. I’m Matthias, an agent and investor. And I’m Erica, a licensed therapist. Join us as we interview guests that also strive to live bold and fulfilled lives through business and real estate investing. Tune in every week for interviews with real estate agents and investors. Ready to level up? Let’s do it.

[0:24] Welcome back to the REI Agent. This is Matthias here. I am drinking from a fire hose. I am incredibly busy. Spring has sprung. The time of recording is the end of March and I am writing offers. I’m getting listings together. A lot of different activity, which is great. I know that there are markets that are not doing as well. So I’m thankful that things are still doing well here. I don’t really know if there’s signs of our market slowing. It seems to still be a strong buyer’s market. We might not have seen. Sorry, seller’s market. We may not have seen a big swing in housing prices as others did or quite to the extent. And we definitely did see a big swing up through the pandemic, but maybe not as extreme as it was in other markets.

[1:12] So we’ll see. We’ll keep getting while the getting’s good. But I’m going to keep this one short so that I can get back to it. Erica is still in recovery. We have from her meniscus surgery at the time of this recording. It’ll be two weeks tomorrow. And she is also with our daughter who is on spring break. So we are still trying to work out how we can get her into this podcast somehow. If we can have her record a different space or if we can maybe move our setup back to the dining room table as it once was. We can do some back in the day for nostalgia purposes. But, you know, things are frustrating when you are limited in your abilities from her end. She feels very limited. You can only, you know, do so much.

[2:00] Everything you want to do, you have to kind of push a cart around with crutches. And we have three demanding kids and a household that, you know, doesn’t, yeah, it just doesn’t run itself. And I, again, have been very busy. So it’s just been kind of a hectic time. But we’re in a much better place than we were a week ago. And so we’re thankful. We had a really incredible community show up for us. And, you know, we are so grateful for that. And like I said, we’re going to keep this one short and sweet so that I can handle a bunch of things. But we have a great guest today. We have Sarah Bratcher. Sarah is a bookkeeper. She is licensed CPA, but really does bookkeeping. And she’s a real estate investor.

[2:44] And her mission is to help people understand this world a little bit better. We get into a bunch of different things. We get a little into the weeds with some tax strategy. Again, all this information you need to run by your actual professionals because they understand your situation. They understand the tax law much better. But there might be some ideas of how you can get a little bit fancier in the future if you’re not there already. So without further ado, here’s Sarah.

[3:16] Welcome back to the REI agent. I’m here with Sarah Bratcher, CPA. Thanks for joining us, Sarah. Thanks, Madias. Thanks for having me. Hey, Sarah. You told me a little bit about your story off air, how you kind of got into real estate. But break that down for us. What kind of got you to start investing and what you’re doing now with your businesses? So I started out in a public accounting firm doing taxes. And realized that that did not spark joy for me or just like really, you know, burn me for like longevity. I was like, yeah, I can’t I can’t do this forever. And so I ended up working for a real estate developer slash investor. And when he was when he was really small, he had about 20 personal investments.

[4:08] And he built, you know, maybe 20, 30 houses a year. And, you know, I got into his office and as kind of a controller, he was still doing most of the CFO stuff. I was the controller and helping him figure it out and how to grow his business and everything. And, yeah, in those eight years, we put in, you know, SOPs and we got everything in place to like really grow his business. And I don’t want to say his financial status, but he had over a thousand personal investment properties at the end of that eight years. And he was building about 500 homes a year at the end of that. And I had kind of grown myself into, you know, a manager position. And basically, I was I was the CFO. I did cash flow projections.

[4:57] It was always in the real estate world. We’re always juggling that cash and, you know, doing all that. And I was kind of doing the higher level stuff like that. And I just I started to kind of feel burnout in what I wasn’t passionate about that anymore. I wasn’t doing hardly any accounting. I had trained the accounting department to do their jobs. And it was all a higher level management stuff, putting out fires, managing people, stuff like that. And so my husband and I looked at our own personal situation and we were just like we were so extended on credit cards and personal loans. And we were like, how did we get here? Because we did we did really well for ourselves. And so we spent two years paying off all of our debt.

[5:44] It was one hundred fifty four thousand. We did Dave Ramsey’s program. It is one hundred fifty four thousand dollars just paying it off so we could change the trajectory of our lives. And we knew we wanted to invest in real estate and do that piece of it and just kind of everything else. We were just, you know, listening to all the podcast and trying to figure out a new direction for life and everything. And I kind of did things backwards. I ended up quitting my job and before we had our first real rental property and before I had started my new business and just kind of. But I had I had to leave to be able to to spread my wings some more and have had the capacity to do that. So I just I had the passion to help do the get back into accounting and the financial statements.

[6:38] And I love helping agents, brokers or investors just use their financial statements to help grow their businesses and make big financial decisions from from, you know, their past and seeing what projects do great and what areas they could they could put more money into. And then, you know, my husband and I started buying rentals and yeah, we just we’ve kind of kind of grown it and it’s working out. So we’re just we’re just keeping on with the moment. That’s awesome. I laughed there for a second because you said only 20 personal properties and only building like 20 or whatever houses a year, 20 to 50, which makes sense. Then when you went into what he was doing then by the end. But, you know, to anybody listening, wanting to start, that sounds probably like an amazing place to be.

[7:27] And but but yeah, I mean, it’s amazing what you can scale when you then when you start delegating. And sounds like you really just wanted to take that knowledge and that ability to apply it to your own your own portfolio instead of somebody else’s. Yes. And to be able to take that knowledge and help other clients out like, hey, we’ve already tried it. We’ve already seen what works and what doesn’t and how we can, you know, look at the financials to make those decisions. Because when you’re running a business that big and scaling that fast, you have to quickly learn how to manage it without being boots on the ground and on every single project and everything. And you got to you got to trust your your managers and the people you’re hiring to make those decisions.

[8:14] And yeah, we would come together for an accounting meeting every month and everybody would dread it. But everybody also knew it was the most important meeting of the month because that’s where the main decisions were made and hashed out. And all the phone calls and the five minute meetings throughout the weeks and everything. Those just kind of bogged people down. But we sat down and looked at the financials and saw the big picture of the whole company. That’s that’s where the magic happened. And I wanted to help other people do that and kind of give them a, you know, a quick start that they didn’t have to do all the stuff that I had failed help, you know, help fail at to get to that. Yeah, that makes a lot of sense.

[8:56] I wanted to also go back to the Dave Ramsey thing. I wanted to we also did the Dave Ramsey plan to get out of debt when we first got married. We were a man. What were we at? 120, maybe 120 back in 2013, 2014. And that that took us a while. We weren’t making very much money. But I just wanted to more. I wanted to say, like, I think I think oftentimes when you get into real estate investing spaces and a lot of, you know, maybe business and finance, personal finance stuff. I think Dave Ramsey gets crapped on a little bit. And I mean, I think I think that there is a place and if you are in a situation where you have a lot of debt and you want to get that behind you, I think it’s a really good option for a lot of people just to just to get super focused.

[9:48] And and and it’s not it’s more behavioral, psychological than it is financial, like, like, actually, like, you know, financial or mathematically sound right. Like you’re not going after the highest interest rate first. You’re going off this over the smallest of the smallest loan, taking that out. So you get some momentum. So you start feeling like you’re making progress. And I think I think just if anybody’s listening to this that is in a kind of situation, I would say, you know, it’s not a bad starting point. And you may find that you can live that way and live the Dave Ramsey method forever. You know, but I think then you can kind of also graduate and maybe start looking at things a little bit differently.

[10:32] Like maybe you don’t have to always get a 15 year mortgage, especially with the interest rates where they’re at now, for example. I mean, how do you feel about that, that Dave Ramsey in general and just kind of are you still kind of following that methodology or where are you all at with that? I know. So I had started a debt free Instagram account when it was happening. It was the debt is hashtag debt free community. And there was a bunch of people and I documented our our debt payoff. And it was like I didn’t have anybody personal on there because we were putting next actual numbers and it’s all archived now. But it was always a huge discussion about Dave Ramsey and his politics and his, you know, his opinions.

[11:12] He’s, you know, forceful on it and everything. And I think, yeah, but I think you have to be that way when it comes to those financials. You need kind of that that harsh black and white. And I remember it always being a huge discussion about maybe step one being only a thousand dollars. And it’s like, dude, we were one hundred and fifty four thousand dollars in debt and we were making double six figures a year and we couldn’t afford groceries because we were our credit card payments were so high. We had just we had just, you know, everything kept going up and the credit, the credit card debt kept going up faster because we thought we deserved it. And, you know, all the all the fun stuff that happens in life.

[11:55] And, yeah, it was hard. It took us six months to save up that thousand dollars. Could that thousand dollars save us from a literal catastrophe? Absolutely not. But the baby step one is just like you said, the mindset to get you there and to get you over that hump so you could save a thousand dollars and then go from there. But once it took us six months to save a thousand dollars to get us out of that hole. Wow. But once we had that, at less than two years, less than two years later, we paid off one hundred fifty four thousand dollars. It’s just the momentum. It’s just that that mindset shift to get you out of a consumer habit to a content habit and abundance. And we’re always looking for abundance and joy and all that.

[12:43] And it’s there. And by no means like this was six years ago, by no means is life easy in my financial world because I did all that. It is still hard. I still have to make a decision daily. Do I want to be content or do I want to be back in credit card debt? Like I would love to be able to do all the fancy vacations and everything that I think I can afford. But as business owners now, we have to have higher reserves on the other side because things come up always. So we have to be careful about it. And as far as do we follow Dave Ramsey’s baby steps? No, not really. We leverage. We leverage our rentals and some parts of our business and everything that have an asset backed to it. But yeah, we’ve kind of found our own way in the world.

[13:37] I absolutely think his baby steps one and two are good. And I also agree with him that you should put on your oxygen mask first before you start saving for your kids’ colleges and all that other stuff. But besides from that, will we ever be fully, truly debt-free? We kind of have that goal, but it’s not the gazelle intensity that we had paying off the consumer debt. Like we said, everything is leveraged. There’s assets backing it. There’s income paying that debt off. And we feel we’re in a good balance now. It took us a while. But yeah, we still have to budget every month because my husband and I are both spenders. We love and we like to spend on other people, not necessarily even ourselves.

[14:25] It’s more like we want to treat people. We want to show our love by spending money on them. And we give so much to charities. And sometimes I’m like, oh, we got to back up. We still have to pay bills here and things like that. So yeah, we still have to budget. We still have to watch our money habits and everything. But we’re in a better position mindset-wise and financial-wise than we were many years ago. So yeah. Yeah. We did about, I think, less than three years, around three years and around 120-ish. We started off making around like $60,000 or $70,000 when we started that process. And it jump-started my career for sure in real estate. And so there’s a lot to be thankful for. And I think we’re in the same boat where we’re trying to definitely not have that consumer debt.

[15:17] But on the same token, when I refinanced our primary residency, we got like a 2.6% or something like percent interest rate. And I was still in my head, I want to make that just, I just want to, you know, bare minimum. I just want to borrow the bare minimum. And like the lender’s like, you want to borrow more? Like, we could see if we can get you a little bit more based on the appraisals. Like, no, no, no. I just want to, you know. And I’m like, dang it. What would I do for that, for capital at 2.6? That’s amazing. Yes. No, I totally agree. Well, let’s get into the accounting a little bit and to the bookkeeping. So, we, my wife, and we can talk about this too, you said you have children as well, right?

[16:00] Yeah. So, we have multiple caps. We have multiple businesses. And Erica was kind of always the money person, the wanting to do the budget, wanting to do the accounting. And she kind of always helped on that side with the businesses. And it just got to a point where it was like, we can’t. We have multiple partnerships. We’re flipping houses. We have multiple rentals. We have all these different bank accounts for different LLCs and all this stuff. And it just gets so complicated. And we finally, we got a bookkeeper on top of our accountant. And it has just been incredible. Like, it’s so much nicer. And I have a friend that does more than me. And he has not yet gotten a bookkeeper. And he is a complete mess every year getting ready for taxes.

[16:48] I’m like, dude, like, stop having this, like, folder of, like, receipts and all these things for each property you flipped or whatever. And just start handing that off to somebody. Come on. Like, you make enough money. Yeah. I think when people start a new business or buy their first rental property, it’s just, like, five transactions a month. And it’s like, okay. And then things kind of slowly grow and grow and grow until it is very overwhelming. And then people kind of get, they don’t want to talk about it because they’re behind and they’re embarrassed and all that other stuff. And, yeah. Like the frog. It gets kind of. It’s like the frog in the pot of water that starts slowly boiling. They don’t learn to jump out.

[17:34] That is such a good analogy. I’m going to have to remember that one. Yeah. That’s exactly how it is. And, you know, someone recently on Instagram was kind of making fun of me because I talk about DIY bookkeeping. Real estate investors like to DIY their rehabs. And, you know, I want to help them learn how to DIY their books. And they’re like, everybody should outsource their bookkeeping. And I am a huge proponent. And I love, you know, Dan Martell’s Buy Back Your Time. And, you know, all the podcasts tell you outsource, outsource, outsource. And I am 100% on that myself. We outsource as much as we can. But when you have one property, it’s not. I mean, even if you find a good $197 a month bookkeeper, it’s still a lot of cash flow you’re eating up.

[18:21] And I also think that as a business owner, you need to know kind of the basics of the bookkeeping. Because when you do get 20, 30 rentals and you’re quickly looking at those financials every month or maybe even once a year. Hey, we don’t always look at them as deeply as we can. You still kind of need to know some basics of what your bookkeeper is doing. Not because they may, you know, they’re not meaning to be corrupt. But typos happen, errors happen, things happen. And they aren’t in your business. So they don’t know exactly 100% of what’s going on. You may have forgot to relay one small piece of information and all this other stuff. So I feel like, you know, when you have one property or, you know, less than five properties, it’s a good time to really kind of dig in and see the basics of it.

[19:12] And, you know, learn it yourself before you can, you know, before you have the cash flow to outflow it. And if you’re a real estate agent and you’re getting those 1099s and you’re spending your marketing money and all that other stuff, it’s, you know, it’s a good thing to do it yourself for a little bit to understand how it is before you outsize. A good balance of, I think life is a good balance of both there. No, I’d agree. That makes a lot of sense. And certainly a rental is a different kind of animal than like a flip, especially if you’re running into multiple partnerships and that kind of stuff. There’s different levels of, yeah, intensity with either one. But I agree. Like, I think you do need to have a good grasp.

[19:56] I think Erica is still pretty involved with, you know, with the bookkeeper going back and forth and figuring things out. And she does have a pretty good grasp on it, but it’s just, it just makes it so much easier for her. She’s just so much more relaxed. And to that point, it’s like we have three little kids and it’s like, you know, it’s just chaos like all the time. And we find ourselves just, yeah, like wanting to outsource more. We’ve tried to make our lives like better and simpler or have the ability to maybe retire early or whatever with this stuff by investing. And now, you know, our life is so complicated and confusing. So we got to get those people in place that kind of help make it feel less chaotic.

[20:43] And that bookkeeper is a great example of one thing that’s greatly improved our life. Yeah, I think, yeah, there, I mean, the podcasts are full of ways to outsource and even like housekeepers and, you know, other pieces of it and everything. But at the end of the day, it’s still your life. It’s still your business. And you still have to, you know, well, like a property manager, like you hire a property manager. And if they happen to get a bad tenant in there, you still have to make that monthly mortgage payment. And you’ve still got to find those resources and everything. And so, you know, outsourcing to bookkeeping is, you know, you still have to make those high level accounting. You are still the head accountant of the company.

[21:29] And you still have to help make those high level decisions of, you know, are we going to do a cost segregation? And, you know, you talk to your tax strategist about it. And if you want to, you know, manage all that together. So it still ultimately comes down. The IRS, you know, if they were to audit someone, it goes to your name, not the bookkeeper’s name. So you still need to have a grasp of what’s going on in your bookkeeping and doing all that other stuff. So, and my mission this year is kind of to help educate people on, you know, just small terms and why things are the way they are. And I think there’s a lack of education out there. So I’ve been trying to put out some more podcasts of my own and YouTube channel just to try to get people more familiar with accounting and accounting terms.

[22:16] So it’s not just like, oh, and piled up, you know, ready to explode during tax season. It’s a good point. I mean, like you’re really, you’re kind of becoming a manager when you would hire somebody like that, when you outsource. You have to have a good understanding of what they’re supposed to do and make sure that things are going smoothly with it. So, yeah, that’s a great service you’re offering people for sure. What would be some, I mean, you mentioned cost segregations. I think that’s something that is not well understood amongst a lot of agents. And I think the power of those are huge, especially for a real estate professional. Do you want to talk about that a little bit? Yeah, so, you know, cost segregation is, it’s a hot topic in, you know, real estate investing right now, especially with the potential of 100% bonus depreciation coming back and everything.

[23:18] And while I am a CPA, I don’t actually physically do taxes. I don’t, there’s so much more in intricate details that go into actually having to that. So, absolutely talk to your tax strategist or your tax preparer about, you know, what’s best for your circumstances. But, you know, a cost segregation just helps you ride off those expenses quicker, especially if you have W-2 income still coming in and you need to offset some other income somewhere. But there’s so many, you have to be maybe a real estate professional or you can utilize the short-term loophole. But it basically just speeds up the losses you can take for the, you know, actual property that you’re buying. It segregates the cost, like per item, like paint.

[24:09] Instead of amortizing, like the whole building and improvements over 27 and a half years of life, it breaks it down into smaller increments, like, you know, paint may only be a five-year asset. So, you can depreciate over five years or, you know, get the 100% bonus depreciation from it. Whether, whatever the tax rules end up being this year. I don’t know that anything’s going to come out in the next couple weeks before that. But they’re still hopeful that it might change it quickly. Sure. But, yeah. But before you get to the cost segregation, I want to make a point here also. I feel, I mean, I am a little biased because I’m a bookkeeper. But I feel that bookkeeping is your number one tax strategy.

[25:00] Because you need to know what financial position you’re in before you can really start, before you know, you may already be operating at a loss. And you may not need that cost segregation this year because you already have those losses. For some, you know, unforeseen reason, you know, whatever it may be. If you’ve had a flip go bad and you have, you know, $20,000 in losses already, and, you know, you may be able to, and that would be more active income, but you’re getting in the weeds here. But really, the bookkeeping piece itself tells you whether or not you need, what you need to utilize a tax strategy. I mean, you could be in a position that, you know, you don’t need to spend thousands of dollars to get extra, you know, tax strategies in there when you’re already kind of operating where you need to be before that.

[25:54] So that’s kind of my big thing is, you know, bookkeeping is the number one tax strategy. Because especially if you’ve already hired a tax strategist, get your bookkeeping up to date before you go into that meeting because they’re going to need to see, you know, kind of your big picture of where you need to, where you are and where you need to be. Something that people would definitely need to talk to their accountant about before exploring. But something that I’ve heard that I thought was really interesting that could be, you know, talk to what you’re talking about is if you have like a year where you’re really, you are operating at a loss. If you do have a negative or very low taxable income for a year, you might, you know, have that from, you know, big expenses, being able to depreciate things like this.

[26:43] The bonus depreciation that we’re talking about could all contribute to this, right? But I’ve heard about people actually changing their IRA into a Roth IRA at that kind of time, because I think you have to usually pay a tax on converting it. And I think that at a loss would then allow you to do so. So, I mean, again, check with your CPAs. And the whole point of that is, is then you could, in theory, I mean, you could use your Roth IRA in many different ways, but you could also, you know, invest in real estate with it, with a self-directed IRA, and then that would be tax-free going forward. And so that’s why it’s important where you’re at and then have a tax strategist actually, you know, advise you as to what the best moves are.

[27:29] Yeah, no, absolutely. And there are some amazing people out there educating on the self-directed IRA. I always refer to Karin Hall with UDirect Services for the self-direct. She would just, I think, produced a book with bigger pockets, but she has some amazing information in there because I am in the depth of it. We’re trying to roll over an old 401k into a self-directed IRA, and it is a lot of information to soak in and to figure out all that. Yeah, we’re trying to do that to do some, you know, make some bigger moves in our real estate portfolio as well. My husband’s about to be done with his W-2 job, so we’re looking at doing some bigger things with that, and he’s going to kind of go all in on that.

[28:27] And I’ll still be doing my bookkeeping, and then he’ll manage all of that. But yeah, we are knee-deep in all the self-directed IRA stuff right now because there are so many good ways. You can do so much. Yeah. You can really do so much. I haven’t really gone into that as far as me actually doing it. And there’s a couple reasons there because I think, for one, I think there’s a, you know, I’d like to have a little bit of balance with stocks and stuff like that. And two, I can’t use that money. Like if I flip a house normally, I could use that money. I can decide where it goes. If I get a rental, if I get cash flow, all that kind of stuff, I can use that money. And, you know, I know that eventually that will be great, but I also kind of love that freedom that comes along with real estate investing as opposed to like stocks.

[29:16] And SEP IRA is what, you know, things that I get pushed to do or have done in the past since I’m running an S Corp for my real estate sales. The SEP IRA is definitely something that can make a lot of sense for a lot of people. And it’s great. I’m not saying it’s a bad vehicle, but again, I’ve kind of decided, well, I’d rather, you know, buy a property than maybe do a cost seg on it and kind of get better tax benefits maybe in theory than I would if I, you know, just did the SEP IRA. So, yeah, it’s a complicated world out there. That’s why we hire professionals. Yes. And that’s why there can be so many podcast episodes about it because you can go down one rabbit hole for 30 minutes and still not touch a whole space over here of how someone else has used it.

[30:03] And it’s just, it’s amazing how creative people get for it. And, you know, I’m a CPA and I am helping my clients on the daily and I’m still like untapped into so many. By the end of this year, I’m going to be a self-directed IRA guru. I’m hopefully because we have another tax situation coming on and we are trying to utilize that to purchase so we can do the cost seg and decrease some other income from another place and trying to balance it all out. So, yeah, we are learning by fire this year in all of our investments and everything. So, yeah. Yeah. It’s a wild world. If you’re an agent and you’re starting out, this is stuff that you probably don’t have to worry about too much. But at some point, you’re going to want to look into getting probably your business into the LLC.

[31:00] I just said S-Corp. Because that’s going to have some tax benefits for you. Again, double check with your accountants about that. But then, you know, when you’re rolling a little bit and you’re wanting to invest your money, you can start thinking about the stuff that we’re talking about as well. And, you know, using buying real estate and, you know, accelerating that depreciation so that you can, if you have a really good year, you can help balance that out. So, I’ve given this example a few times, but I invested in a mobile home park syndication. I invested $50,000. And the first year, I was able to write off $66,000 because of accelerated depreciation. So, that’s the power of it. And you can’t do that.

[31:40] I mean, that was probably an extreme example. And it’s not going to be the same every year. But I also got like 11% return on that $50,000. And just, so, I mean, it was a great investment. And if I wasn’t a real estate professional, if I wasn’t, you know, an agent, an investor, all that kind of stuff, I wouldn’t have been able to take all that $66,000. And so, there’s a huge advantage to agents, to real estate investors. So, if you haven’t heard about this, it’s definitely something worth exploring. And like you mentioned, it was kind of going away. But I think Trump was the one that put it into place to begin with. And so, that’s why there’s possibilities of it coming back now. But, yeah, it’s going crazy there.

[32:22] Who knows what’s going to – who knows what’s important to this administration right now. But, yeah, it could turn at any moment. And, you know, we’re hopeful it is. Back to the, you know, whether it’s an LLC or S Corp. I want to touch on that for a little bit. Because I don’t think – I think a lot of people will consult maybe their CPA but not their lawyer or their lawyer but not their CPA. And I think it’s important to note that you need to start an email thread with the lawyer and the CPA to make sure you have a good balance. Because some are better on the liability and risk side. And some are better on the tax side. So, just get a good idea from both sides of people that know your exact situation.

[33:07] Just a plug in there because it does affect both sides. And you want to make sure you have a good balance for both of that. You’re absolutely right. And, again, the whole analogy of that frog like sitting in the water and it’s starting to boil and they’re not jumping out. Same thing with attorneys. Like, I mean, like if you haven’t found your attorney yet, it’s definitely a great thing. And I know that they specialize in different things. But, like, if you just need a general counsel kind of attorney, it’s good to look out for those kind of people. Because they will be – as the water heats up, right, it’s going to be more important to have your team together. And I know it’s preached all the time to really find your team.

[33:47] But, you know, once you really – once it clicks, once you get busy enough, once you have enough things going on, it just really makes the world of difference when you have that team in place. Yeah. No, absolutely. And I think the price of lawyers kind of shocks people at times. But, you know, once you get a good lawyer and you get, you know, a couple of deals under your belt, like, they know your situation. And it’s quicker for them to answer those questions and stuff. So, yeah, once you get your team built up and all that, in the long run, the price, you know, kind of evens out over it. Because they learn your situation and they know exactly where your needs are there. Well, hopefully – yeah, and hopefully you’ll eventually be becoming, like, a repeat business, like, a customer for them.

[34:33] And they’ll kind of treat you that way. Like, I think that’s the advantages of, you know, getting a contractor that you give a ton of business to. They might, you know, respond more quickly to you. They might, you know, come out in a pinch and help you quicker because you are, you know, at volume. And so, hopefully, as your world gets more complicated, that might happen in the professional world as well. Yes, absolutely. But the whole thing you talk about, contractors and everything, we have five units. And we have renovated all five of those units. And getting the contractor team piece of it has been – like, our first one, we were, like, scratching our eyeballs. We were trying to do it all ourselves and trying to – because, you know, people wouldn’t show up.

[35:22] And things would happen and everything. And like we were talking about earlier, we have two kids and we’re trying to balance all of this. And it’s just – it’s, like, throwing glass balls up in the air and just trying to catch everything. But once we got in the groove of it over a couple of years and on our fifth one, we, like, completely outsourced it to someone else. Like, we didn’t even have to hardly step in on it and even the cleaning and everything. And it got so much smoother. And it’s that way when you get a bookkeeper and a lawyer on, you know, out on your team and everything. The more you go into it and do it, the more everyone knows about each other. And it just gets smoother and smoother.

[36:02] But everything starts out kind of rough. But you just kind of do it. And that’s – Yeah. And it sounds like, I mean, if you have that mentality, you were gifted with working for a company that, you know, was huge. It was going nuts. And you saw that growth. And so you saw the power of SOPs. You saw the power of all that stuff. I think it’s harder for a lot of people to think through that and think, okay, I’ll just get this done. I’m not going to worry about systemizing. I’m not going to worry about that. But if you kind of have the mindset of being – I think 10X is greater than 2X is an example of a book that would talk about it where if you really think about how you’re going to be doing those – you have 1,000 rentals.

[36:42] You’re going to have 500 or whatever it was. The house is being built a year. So obviously, you’re going to create the system now on this one, even though it seems like more work at the beginning. But, you know, if you think that way, you’ll create those systems and be able to scale bigger faster. Absolutely. And I’m guilty of it too. Even though I had the knowledge and I knew, like when we were starting out, I was like, it’s easier for me to just do it. I’m not going to sit down and write it out. It’s easier for – it’s faster for me to just do it. But two years from now, it’s not going to be. And it’s going to be faster if you had done it, written everything out that very first time. And I would always think when I was going through a process, I’m like, well, I don’t have this perfect yet, so I’m not going to write it down.

[37:31] And that’s a mistake too. I should have just written down what I had and you can always go in and tweak it and everything when you’re doing the SOPs and getting your systems down. Absolutely. I can talk about that all day long too. It’s so important to be smart. We have more tools now too available to us. I mean, if you use Loom, for example, if you record what you’re doing, it will create an SOP for you automatically. I’m sure you could just talk to ChatGPT or do a voice recorder and talk through what you’re doing so that it could get an SOP created through ChatGPT then. So there’s just so many more tools now available that can make it easier. And I’m not saying I’m perfect at it either. I definitely – just like today, I’m drinking from a fire hose.

[38:13] I’m just going to get stuff done. So it’s no other option. But just kind of keeping that in mind and continuing to move with the end in mind, right? With the 10X instead of the 2X in mind that you want to get to that point and you want to make it easier. And maybe one day you want to just not do it. You want to be just kind of overseeing things from a further out standpoint. Yeah. Well, you know, when I first read that book, I was dragging through the first of it. And because I’m an accountant, I’m numbers. I’m like, we got a 10X. We got a 10X. And, you know, the first part of it, he’s talking about, you know, sculpting Michelangelo. And I’m like, how’s this guy 10X? And, you know what I mean?

[38:56] Like, is he making profit off of this? Like, I’m waiting for the numbers to come. And, you know, honestly, it wasn’t until, like, towards the end of the book, I was like, oh, this is all about mindset. This is all about, you know, thinking differently. Not actually bringing in, you know, the income and all that other stuff. It’s freeing up your time, the amount of money that saves you and just honing your processes and thinking farther out there and everything. And it’s hard to get in that mindset. And it took me forever. And, you know, I read that book. And then about six months later, I was like, you know what? I think I’m going to read that again. And that’s when it really started all forming for me.

[39:37] And I was like, yes, this is perfect. But, yeah, it’s hard to get in that mindset and stay in that mindset because we always want to go back to, I think most real estate investors are hustlers and worker bees. And they just want to stay busy and work, work, work, work, work. And so we often get back into that entrapment of, like, we just got to do. We just got to do things. And so it kind of shoots us in the foot sometimes. But if we can stay in that mindset of, you know, the 10X thing and going bigger and doing that. And, you know, real estate investors, I mean, real estate agents, brokers, anybody in the real estate world, it works for all of them. You know, the more systemized you can get, the faster and the farther your reach is.

[40:26] Yeah. Yeah. I mean, agents are notorious for thinking they have to do everything themselves. They have to become marketers. They have to become, you know, all this stuff. And so, you know, outsourcing, thinking about, like, hey, if I was, you know, right now, I’m going to do a million in volume this year or something. I, you know, why would I outsource marketing? But, you know, thinking about if you’re doing 10 or 20 or 30 or 50 million, like, of course, you’re going to figure out these steps and you’re going to be outsourcing because you’re not going to have any other option. So, it’s definitely applicable for all of those. I mean, for business in general, for sure. I was curious, how do you try to maintain balance?

[41:04] I’m going to say that because I know that I can’t honestly say I do maintain balance. You know, it comes down to, it was funny because last year I struggled big time. My son has a rare bone disease and he was four years old and had a major hip surgery. And he was at home with me. He was right here beside me. And he couldn’t walk. He was, you know, he was just watching TV. And I was trying to hustle and keep on it. And I got into a very hard mental space last year because of that. And I kept thinking. And I did a bunch of reflections. And you know that, to refer back to that, that six months it took us to save up that $1,000 for the, like, I was so proud of myself for that $1,000. And I felt that’s where the abundance was.

[41:59] And that’s where the mindset was. And I was like, you know what? You know, I was juggling everything. Our cash flow, you know, we were always, you know, juggling around. The joke is the three things that you are certain in life are death, taxes, and a real estate investor is running out of cash. Real estate investor running out of cash. And, you know, we were juggling that. And I was like, I got to keep going. We got to keep, you know, because we got to keep the machine going and the money coming in and everything. And I looked back to where, you know, we could barely afford groceries. And I felt, I was like, that was where I was most abundant because I had done all the steps to get there. And I was like, it’s not the cash that brings the abundance.

[42:46] It’s, you know, it’s life. It’s right now. It’s the mindset going back to that and the joy and everything. And I’ve been on a health kick since I’ve had, my daughter’s almost two. And I was like, I’ve got to show her that I need to take care of my body too. So it’s been a combination of working out, walking, taking walks with them and communicating and just, you know, focusing on the kids when it’s their time. It’s their time one-on-one. Like I can’t, I can’t be a good mom if I’m always thinking about work when I’m with them. And so when it’s them, it’s just them and get back to that abundance. I am, I’m very spiritual and faithful. I, you know, and I started getting back into reading my Bible and doing all that and just getting back in the mindset for the abundance and not letting the actual, you know, the cash flow and the chaos was making it worse.

[43:47] And it’s like, okay, it doesn’t come from my bank account. It comes from, you know, my heart and my, and my mind. So that’s where I try to stay on, on the crazy days. I just like, at the end of the day, these people are all that matter. And, and that’s, that’s where I try to get in the defense space. Again, not perfect at it. I spiral often in this crazy chaotic life. I drink from fire hoses often. I try to. Yeah. I was just going to say, it’s all about trying to keep, continue to try being intentional. And continuing to try to have that balance to try to try to do all that was important to you instead of just you taking care of everything that screams. Yeah. Being consistent is much greater than being perfect.

[44:29] So we just, we just try to show up every day as best we can and, you know, and do what we can. Yeah. I got to ask, do you have any golden nuggets you want to share to the community here? Yeah. Um, so I guess, I guess the biggest thing is, um, you know, I was going to pull up a quote. Hold on. You do not rise to the level of your goals. You fall to the level of your systems. Mm-hmm. And it just, and I think of it every day because, like, I focus on my goals and everything like that. But what I do in this second is, is going to matter. And it’s, it’s like the day-to-day. It’s being consistent. And, you know, you can have the big lofty goals, but showing up every single day and doing 1% more than you have, um, in the past is what’s going to get you there.

[45:26] You know, I can look back on the past six years and, you know, I was in a, in a bad mental health space, like drowning in life. Um, and, you know, I just, I, I did it one day at a time, one step at a time. And I, I started implementing the systems and they’re, they start out small, you know, uh, James Clear talks about doing, you know, just two minutes a day and, you know, growing from there. And, you know, I have a five-year-old and a two-year-old. My morning routine often takes me 12 hours, but I still have it. I still have it on a list and I check it off as I get it done. And just, I just keep going the next day. It’s, it’s progress, not perfection. Yeah, absolutely. Uh, we, we’ve mentioned a ton of books already.

[46:13] Yeah. I want to ask, do you have one that’s fundamental you think everybody should read or just one that you’re really enjoying right now? Um, I want to go back to, to Atomic Habits. I read it at least once a year. Um, I have, I think a little workbook thing that I work through occasionally and it just, it, it really changes my life when, when things get so big and, you know, you can’t think it, you know, think it through and just start back small. Your systems are, you know, going to be what gets you, get your goals done. Yeah. It’s so awesome to think that, you know, just 1% better, um, is, is enough. And I think it really, I forget if he talks about this or not, but I think I’ve heard this a number of times that you’re kind of either growing or you’re dying.

[46:58] And I think that is true for habits. That’s true for so much in life. And, and, and if you, if you don’t think like, yes, I got to get this whole big goal done. Uh, and, and that seems overwhelming that like, if you, if you want to get to that point and you’re just like, that’s so hard, but all I have to do today is actually just do a little better. Before I got to build, I got to grow instead of die. And I think that if you start looking at life that way, um, you know, hitting the snooze button is feeding the wrong habit, you know, that those kinds of things, um, that will help you get to where you want to go. And it’s not, yeah, Rome wasn’t built in a day. It’s all small progress. Yeah. It’s a really good book.

[47:37] Yeah. And that’s what I’m, uh, I’ve been on that, uh, lately is the, it’s not necessarily the snooze button, but you know, my kids wake up early and I’m like, oh, I can’t start. Start off that early. And then I’m like, yes, just do it. Stop thinking. Don’t put any emotion. Don’t tie any emotions to it. Just get up and do it. Okay. I can’t do a whole hour workout at, you know, 6am. Um, but you know what? I can get up and I can start the smaller things that are there. And so that’s, that’s, what’s been changing the most the past, the past six months is being able to, to just do the smaller things when I can and, and all that. Sure. Yeah. And I, Stu’s button is a bad one because honestly, there’s a lot, it’s really important to get sleep.

[48:22] And, and so that’s also something you should, you should be very concerned because like you, often you will be more productive if you just have slept enough. And so getting up at 4am every morning is not necessarily better, but I digress. Um, I have to ask if people also, um, are interested in, in learning more, uh, like you, you’re putting out this content to help teach people. Where can they find you? I’m on Instagram, rei.solutions.with.sarah. Um, I’m on YouTube. Um, I think it’s at REI accounting solutions is my YouTube channel. Um, I have a podcast called REI accounting talk. Um, yeah, my, and my mission this year is just to, uh, help educate real estate investors, real estate agents on, uh, becoming more familiar with the bookkeeping world.

[49:11] So it’s, it’s less stress for them. I think if they were to be more familiar with the terms, with the processes and everything, they’d be a lot more confident and tax season wouldn’t be as stressful. No, that makes a lot of sense. Thanks for, for doing that for people. Um, it’s been an honor. It’s been a lot of fun. Thanks so much for being on the podcast, Sarah. Yes. Thank you so much. Appreciate it. Thanks for listening to the REI agent. If you enjoyed this episode, hit subscribe to catch new shows every week. Visit REI agent.com for more content until next time. Keep building the life you want. All content in the show is not investment advice or mental health therapy. It is intended for entertainment purposes only.