This is episode #413, and my guests today are Luciano Aires and Moon Kim.

Today we talk about the differences of truly turning your real estate investing business into an actual BUSINESS. See, most real estate investors end up trapped essentially in the “Self Employed” stage of their business, where they’re responsible for doing every task that needs to be done.

None of us started in real estate investing to be a slave to our own business, where our business suffers if we take a vacation, spend more time with family, or God forbid, get sick. In fact, I’d argue that every real estate investor wants the exact opposite.

That said, it doesn’t end up that way for most.

If you’re just getting started, or already doing deals, but stuck in the self-employed stage of your business, you’re really going to get a lot out of this show.

Luciano has been a real estate investor for 6 years, but was simply self employed. After joining my Investor Fuel mastermind and getting around some others in the group with incredible talents, he made the shift to truly become a business owner. The results…in the first quarter of this year, he bought as many houses has he’s purchased in any full year in the past. Aside from at least quadrupling his business, he now has a team to do all the things he’s not good at or doesn’t like to do.

Let’s jump into today’s show. Please help me welcome Luciano Aires and Moon Kim to the show.

Highlights of this show

  • Meet Luciano Aires and Moon Kim, Houston area real estate investors.
  • Learn the importance of defining a vision for your business to make sure you don’t get trapped.
  • Join our conversation on how to become a business owner, vs. simply a self-employed person that ‘owns’ a job.

Resources and Links from this show:

Listen to the Audio Version of this Episode

FlipNerd Show Transcript:

Mike: This is the FlipNerd.com Expert Real Estate Investing Show, the show for real estate investors whether you’re a veteran or brand new. I’m your host, Mike Hambright. And each week I bring you a new expert guest that will share their knowledge and lessons with you. If you’re excited about real estate investing, believe in personal responsibility and taking control of your life and financial destiny, you’re in the right place. This is episode number 413. My guests today are Luciano Aires and Moon Kim. They operate out of Houston, Texas. Today, we talk about the differences of truly turning your real estate investing business into an actual business.
See, most real estate investors end up trapped essentially in the self-employed stage of their business where they’re responsible for doing every task that needs to be done. Now, none of us started in real estate investing to be a slave to our own business where our business suffers, if we take vacation, if we spend more time with family or, God forbid, if we get sick. In fact, I’d argue that every single real estate investor wants the exact opposite. That said, it doesn’t end up that way for most. If you’re just getting started or already doing deals, but stuck in the self-employed stage of your business, you’re really going to get a lot out of today’s show.
Luciano has been a real estate investor for six years, but was simply self-employed. He was doing everything himself. And there are some things that he wasn’t even good at or didn’t like to do, but he simply had to. After joining Investor Fuel, my mastermind, and getting around some others in the group that have incredible talents that were able to help him out, he made the shift to truly become a business owner.
The results, well, in the first quarter of this year, he bought as many houses as he’s purchased in any full year in the past. Aside from at least quadrupling his business, he now has a team to do all of the things that he’s not good at or many of the things that he’s not good at or doesn’t even like to do. He’s truly a business owner now and has had some great success. Let’s go ahead and jump into today’s show. Please help me welcome Luciano Aires and Moon Kim. Hey, guys, welcome to the show.
Moon: Hey, how you doing?
Luciano: How are you doing, Mike?
Mike: I’m excited to talk about . . . I know we’re a little stealing our thunder a little bit here talking about taking your business from really kind of being an employee and just flailing, trying to make real estate investing work or maybe you’re self-employed at best into a business. It’s something that I . . . It’s definitely I appreciate. I practice it. This is what we talk about all the time. So it’s going to be a good show because it’s very much line with kind of how I believe and how I teach other people and when we coach and mentor people what we talk about. Of course, you guys are members of Investor Fuel, as well. And we talk a lot about that, like how to take your business to a whole another level, right, but, before we kind of dive into those topics, why don’t you go ahead and introduce yourself.
Luciano:My name is Luciano Aires. I’m from Brazil, background in . . . I’m an engineer. I was in corporate for 13 years, but didn’t hate every day, but that was definitely not my path. And then I started doing real estate. I did that for about six years. When I say like that because I did almost like an engineer a self-employed. So if I would be sick for a week, I would not have my business running. And now the past seven months, we’ve truly started a real estate business.
Mike: So six years. So you were trying to get going, but just doing everything yourself pretty much.
Luciano: Everything in your head, in your computer, yeah.
Mike: A lot of real estate investors are that way. And I think we’re going to resonate with a lot of people hearing this today because a lot of real estate investors get stuck there. That’s not maybe what they intend to do, but they get stuck there. So good, good. Okay. How about you, Moon? Go ahead.
Moon: Yeah. My name is Moon Kim. I mean, I grew up in the Baytown area part of Houston. I’ve been in real estate for about 10 years. So I’m part of a local investment group, an active agent. Then I started doing wholesaling and flipping. And like Luciano was saying, running more, doing more deals. And then as of recent, partnered up with Luciano. And now, we actually have a business that we can call a business and proud of.
Mike: Yeah. Awesome. Awesome. So let’s talk a little bit about maybe your journey, Luciano, or both of you guys can share on this, on like how you transitioned from . . . You said you were working for somebody else. Then you were trying to get started in real estate investing, but just ended up really doing everything yourself. And then at some point, something happened where you said, “This isn’t my vision. Like this isn’t what I’m trying to accomplish.” So maybe just talk about your transformation and kind of how that happened and specifically like how you got to a point to where you realized that, “My vision is bigger than this.”
Luciano: Yeah, I always thought about being a business owner, entrepreneur, and that to the point, back in 2008, I used to work for [inaudible 00:05:02]. And I would do a local MBA because I could not get out of Houston at that time. So went to Rice University, got a MBA to fill out some of my gaps, but those gap . . . It’s an amazing program, especially if you want to become a better and better employee. You advance in your career, that out here is completely different, but I went there to become a business owner, not to advance on my career as an employee. Got out of there. I was itching to do my thing. And it was beautiful because I was brave enough to go to the other side and become I thought a business owner. And I started as a realtor, just because I was getting tired of not having the response that I would like with realtors. So it was so easy to buy houses in 2011. I don’t know if you remember.
Mike: Yeah. No, I remember it.
Luciano: Too easy. Too easy. I was too picky and bought houses. And then 2012, everything changed completely. So at a point of 2012, we had more investors than deals in Houston. So I decided to implement the marketing campaign. Actually, I bought a marketing campaign and been running that business for six years like I was saying. Like it got busier. No life. Get a little . . . I had to close the business more or less November, December, for me to have vacation.
Mike: Yeah. I know even in my experience, when I first started, I wanted it so bad to be successful in real estate that I just did whatever I had to do, right? You just work, work 60, 80 hours, whatever it takes, right? Go drive across town to do like a $10 an hour job or check on something that if I only had an errand to run or they could just do this, but you’ve just got to do it, right? You’ve got to do what you’ve got to do. And then at some point, at least for me, I think you were probably like this too, your business . . . Like financially, you’re okay and you’re doing fine, but you’re just like, “I don’t want to work this hard for the rest of my life. Like why am I doing all these things, right?”
Luciano: It start not being enjoyable anymore. To compliment here, the journey of living as an engineer employed, like I said, I didn’t hate my life at that point. I just like that was not for me. And then become self-employed. And then last year the business started going really, really bad around August. And I decided to make a big change on the business. I started getting really deep and learning. Coincidentally, I started watching all of your podcasts at that time, so that is how I got interested in joining Investor Fuel. But I saw. I was broken, I hit the ceiling, didn’t have enough capacity, didn’t have enough capital. I didn’t have an org chart. I didn’t have a plan. So it was a big change and for better, yeah.
Mike: Yeah. If you’re an active real estate investor already doing deals and looking to double or triple your business, you should consider joining the Investor Fuel Real Estate Investor Mastermind. We’re a small group of investors that share our best practices, tips, and tricks with one another in an effort to all win. We limit our membership to only one to two members per market so everyone shares their knowledge, trips, and tricks openly and honestly.
Our members include some buying one to two houses a month up to some of the most respected investors and leaders in the real estate investing industry, some of which have personally done over 1,000 deals. If you’d like to be considered for our invitation-only world-class mastermind, please visit investorfuel.com to request your personal invitation. Our next meeting is coming up quickly. Go to investorfuel.com now to learn more.
Luciano: I started watching all your podcasts at that time. So that is how I got interested in joining Investor Fuel, but I saw that I was broken. I hit the ceiling. I didn’t have enough capacity, didn’t have enough capital. I didn’t have an org chart. I didn’t have a plan. So it was a big change and for better, yeah.
Mike: Yeah. Moon, maybe you can share . . . You know, I think it probably resonates with you too. There’s a lot of people that just get stuck doing this themselves. And at some point, it could be either your business isn’t doing well or you’ve got a health issue or your wife has a baby or something happens in your life that just forces you to say, “I can’t do things the way I’ve been doing them in the past anymore. I need to do it differently and truly treat it like a business,” right?
Moon: Yeah. I mean, I come from a background, my family are immigrants. And they had several businesses, but after listening to “The E-Myth,” the book, it just kind of shows like my father was always doing every role in the job, but after “The E-Myth” and then speaking with Luciano, just fooling yourself. Instead of working in the business, working on the business and this. And you can’t do everything by yourself so allowing systems to be in place and be more organized. And doing that thing allowed you to do different things and focused on more areas that are important and that you are good at.
Mike: Yeah. Yeah. And then maybe you guys talk a little bit about . . . Because you guys were working separately. And then you kind of united here. So talk about sometimes people that get into business for themselves, they want to be in business for themselves. Like they left working with other people or having to answer to people or whatever to do their own thing, but then you realize, “I can’t do it all. I may not be good at a bunch of things.” Sometimes it’s better to just truly have a partnership or a relationship like that. Now, I’ve been partners with my wife for 10 years in business. There’s things that I want her to do that she doesn’t want to do. And there’s things that she wants me to do that I don’t want to do, but we just have to, right, but we’ve just kind of found that we have very different skill sets that complement each other. And just maybe talk about the relationship of kind of a partnership model.
Luciano: Yeah, you touch on a great point about complimentary skills. We’ve been friends I would say for about six years. I met him in Lifestyles. He funded probably about six of my deals before. So let’s say he was one of private lenders. And I want badly to be out of this acquisition side of it, not . . . I really want it. I would not mind be in this position for a little while, but I want to be out of acquisition and this position. I mean, I would like to team up with somebody with almost the same level of skills. I’m not putting myself out there, but I’m very detail-oriented. So I would like somebody to . . . I mean, your core values to align with your core values.
And immediately, immediately, from the day one, he fired me from acquisition and disposition, immediately. And he doesn’t want to do it all, the marketing side of it, not because he’s not good. It’s because he doesn’t want to be dealing with it, the lead generation. And I’m in on that. I don’t mind. I like it actually. So the complementary skills is adding other people that . . . We’re a team of five at this point with a VA office manager, that it’s been awesome. One thing that Jamie she said in the meeting that I caught that, really I love what she said. “If you want to hire somebody, start doing that two months before you need it.” I’m telling you. We hired this lady about a month and about five weeks ago. Extensive training. And it’s been up already. We would not be able to go through a week that we had this week without her help.
Mike: Yeah. That’s awesome. Yeah. A bunch of us . . . Well, if you have employees, you’ve probably fallen into this trap, but especially early on, if not maybe for many years because you don’t learn from it is sometimes we hire from a position of weakness, right? We need somebody like right now. So you end up hiring somebody that might not be the right fit just because you want to fill that seat so badly. So that’s a good tip. If you can anticipate what you’re going to need and start looking for that person in advance, then you have the time to say no to people that aren’t a perfect fit and make sure you find that right person, right?
Luciano: Yeah, very, but one thing is so hard. You see that to . . . You’re used to being every seat. And you’re not the perfect person to be in those seats, but to let it go is so tough, but luckily, I mean, I can let it go with no concerns. I mean, it was a good complement there.
Mike: Yeah. For you, Luciano, why don’t you share the importance of vision? So I know that you’ve recently gone through the EOS implementation. And for those that are listening right now, we’ve talked about EOS a few times from the book “Traction,” which is the entrepreneur’s operating system. And it’s not a system like a CRM where it’s basically just a system of your business like a series of meetings and sequences and how you grade yourself and track your performance. And it’s really just an overall business operations kind of system developing your culture and things like that. So I know that you recently went through a EOS implementation with the same person that I did, Gary Harper, a good friend of ours. Awesome, awesome guy.
Gary’s been on the show. I’ll add a link for Gary’s show, as well, in the show notes here, but just talk about the importance of, because I know a big part of that up front is setting your vision, like what it is you’re trying to accomplish. And for me, we have lots of businesses. Things have evolved dramatically with FlipNerd and all sorts of things over the years. And I won’t say that I really had a vision. Like I was just trying to do big things or cool things, but not like a vision like that I could go execute upon, other than just trying to keep taking it up a notch, whatever that meant, but talk about the importance of vision as a real estate investor to know what that is so you know what it is you’re trying to accomplish.
Luciano: Like you said, we were going more like, “I want to do this. I want to get bigger and bigger,” but the purpose is not really there. So much that I don’t know how you did, but normally with, “Traction,” we didn’t do a 10-year plan. We did seven. We wanted sooner. You know what I’m saying?
Mike: I did five. I was like, “Ten’s too far.”
Luciano: So we didn’t have that vision. I mean, if you want to try to build an organization, you don’t know where you’re doing. Like I was telling you, if you don’t know your plan, how do you know your path? And I had an idea what I would like, but not . . . And then the team together, we came up with a vision that I think it is in line with everybody’s goals, as well once that aligned with the vision came the core value that we didn’t . . . I mean, everything in your head but we didn’t have that core value. When you put that in paper and you discuss that seriously with your organization, you see people that you would never work with that you worked before. And it really helps you to align or build your organization. Without the core values is tough for you to really understand what you are expecting from who you’re getting to, in your team.
Mike: Yeah. One of the things that was interesting for me when we went through the process is determining . . . It’s not that I had no vision. I mean, I kind of knew the general direction where I was going. And it’s not that I didn’t have values. I mean, we’ve got values. When we defined our core values and when I debated it with my team, we put it on a whiteboard. And we’re like, “Let’s list out like what our core values are. And let’s talk about it.” And some of them were like, “Well, those, that’s really two ways to say the same thing.” And we kind of got it down to just like four or five of our real core values. And I think honestly for me, the process of going through that with my team. Truthfully, up until that point, I would say I’ve had people that would work on my team for years, right, but sitting down and actually talking about the vision, you could just see light bulbs going off in their mind.
And they were part of contributing to mapping that, as well, because I’m at a point now where I don’t have to work that hard anymore. So some of what I’m doing is just the challenge of business. It’s like a puzzle, right? It’s like a game. I’m trying to play the game the best I can. And so there were literally times where we had massive opportunities that I said to my team, “If you guys don’t want to work this hard. That’s okay. We don’t have to do this, but if you want to, we can.” And they were kind of like, “Game on. Let’s do it” but I really kind of took debating, “Should we do this as a company?” because clearly, I need them to get behind it. I don’t want to do everything myself. I can’t, but I think it was just such a great process to go through.
Luciano: And the exercise creates accountability. In December, unfortunately, Moon and Selina, they were not part of the team yet. And I think like for the next quarter review that we’re going to have in June, well, actually the 12th, June 12th, I may bring a little . . . I will probably working out the core values with them just to make sure we are . . . Because we did just Derrick, Susan and I and Lauren. So we were in the [inaudible 00:19:22] phases of our business at that point.
Mike: Right. Right. Yeah. Well, let’s talk a little bit about the steps of how to get . . . Maybe you guys can give a little guidance there on back to the vision part of, of course, we could recommend you go get the book “Traction.” And I’ll add a link here in the notes here for getting the “Traction” to read. So to some people, it might seem like they didn’t like reading it. It felt textbooky, right? It’s just like it’s not an exciting read. It was exciting to me as a business owner because I could see the framework, right? I’m excited for what it will do for me as a tool, but for those of you that haven’t read it, you should check it out, but maybe just talk a little bit about how you get started in determining your vision. It’s not just some pie-in-the-sky goal. It’s like, “I want to get here. And here’s why,” but maybe you can give some guidance to people on how they can start defining what their vision is.
Luciano: Right. And I see the real estate, I mean, the same way the engineer school for me. It is our vehicle for me to get to where I want to, you know. I come from humble means from Brazil. I was lucky because I moved from the largest city of Brazil, which has a 22 million people, Sao Paulo, to a very small town, which was like 10 miles from one of the best engineering schools of Brazil. So that was my vehicle to move out of that little place. And then the real estate is a vehicle to . . . The goal that we have is to give back. And the way that we’re going to give back with our vision will be through education. We want to empower young kids, especially under eight years old, with education. So that’s the goal. Get to the point we’re freed up, but we start already doing something there locally with the Houston HISD, but the goal is really . . . I mean, our vision to use this real estate to give back.
Mike: Yeah. That’s awesome.
Luciano: You know, it’s like, “I want more money, more money, more money.” That’s not really what . . . That’s a cool thing that doesn’t drive him and I. I mean, it is not really that the material, the bigger house, the bigger car. I mean, I admire and I’m okay with people what make them feel happy, but that’s not what really we’re after here.
Mike: It’s funny. I just had this conversation last night. I was doing an event and talking about at some point when people have started in real estate investing, they want the money because they need the security of knowing that I can work for myself. I don’t have to work for somebody else, but once you get past that point, it’s a matter . . . And everybody’s different. Everybody has different goals, but it starts to turn to something different. It’s more like impact, right? It’s like, “What can I do with this now? I don’t have to worry about eating anymore or paying the bills or I’m going to be fine there. I don’t need a bigger house or fancier cars. I’m comfortable with what I’ve got, you know.” And not that there’s anything wrong if you have the biggest house or the fanciest car, but even beyond that, at some point you don’t care about things anymore. You care about experiences and impact, right? So Moon, why don’t you share your thoughts on that?
Moon: On the vision of the business you were saying or . . .
Mike: Yeah, just like the importance of determining your vision because at some point it’s not about the money, like you guys said. It’s about what the money can enable you to do or allow you to have an impact. Maybe share your thoughts.
Moon: Yeah. Like Luciano said, just helping out people or helping out the less fortunate, the community, just sharing our experience or even our knowledge that we gained to help other people become better and do better because, I mean, I come from . . . You know, when my family came from Korea, I remember being very, very poor. I mean, just for the less fortunate. If we can do something for the people then that’s what our goal is, to give back.
Mike: Yeah. That’s great. That’s awesome. Well, Luciano, let’s talk a little bit about like steps to give to a business owner. So when we started off here, we were talking about how you were an employee. You worked for somebody else. This is like I’ve got to believe that 90% of real estate investors end up stuck on this path. They are working for somebody else. They’re an employee. Then they want to own a business, but the business ends up owning them. They’re self-employed. They do everything. They never grow big enough to be able to justify the expense of adding somebody to their team like, “Well, I can hire an administrative assistant. That’s $50,000 a year. I’ll just do the work,” but the problem is your time is your time is all soaked up doing administrative work.
And then you can’t grow, right? So you get trapped kind of where you are and never really being a business owner. And what we just talked about here is you kind of cracked through that. First, I want you to share the steps of how people can get there, but maybe start of by saying the impact that you having that realization that, “I’m self-employed. I’m not a business owner,” just over the past six months, the things you’ve done and how it’s impacted your business from where you are today and the trajectory you’re on and to where you were just even six or eight months ago.
Luciano: Right. I think I started wrong. When I say I started wrong when I decided to go from my career as an engineer and in corporate going up the ladder, whatever it is, to become a business owner, that was my mentality. I didn’t have the clarity. I think you have to have that clarify. Are you going to start and be small or are you going to start small with a go to big, big, because it is okay if you’re going to be always small. You run that business but if you go just to scale up, you can’t do that as a self-employed. So I think you have to have very well-defined what do you want to achieve. And within your business, you have to have very well-defined what entails your business because like you say within six years that I was like a self-employed, you start just building more knowledge, knowledge, your own little tools.
So you build this thing that you can run [inaudible 00:25:29] your business, but in reality, there is no structure. You know, there is no systems. There is no organization. One thing that was very important to build . . . You need to understand what you like. I mean, you give the elevate and delegate. You need to see things that you like, things that you’re good at or things that you want to be doing and put all those boxes together. As we evolve, you need to see what you need to delegate to other people. I didn’t know how to delegate. You know, it’s more like [how do you call that 00:26:06] let it go on the by.
Moon: You’ve got to let it go to let it grow, right?
Luciano: I think you have to start from day one with that mentality. I don’t think I did and not I want to grow big. You know, I want to grow to a point. We do have an organization, which like Moon mentioned at the beginning, that we can step and be on the business, but that initial is key. I didn’t define that in the beginning. In the beginning, it’s just I thought I would be running that self-employed game forever. It didn’t work.
Mike: Yeah. Sometimes I think we settle for that because we’re like, “Well, I’m making a lot more money than I used to,” right, but then you then start to look at, “What can I . . . ” I know you like to travel, Luciano. My family likes to travel. I mean, we just booked a month-long trip through the Rockies this summer. And we can do stuff like that. Literally, I’m going to be in the mountains for a month with a cell phone and a laptop, if we have reception. I don’t know. And I know that nothing will stop for my business, you know.
Truthfully, my business tends to do better when I’m not here because I’m not here causing friction for people to like . . . You know, I’m an idea guy. So I’m like, “Hey, I’ve got a new idea, guys.” It’s a distraction, right? That should tell you something about your business, but maybe talk a little bit about once you coming to this realization, taking the steps that you’ve done. Obviously, you joined the Investor Fuel Mastermind, started to meet some other people that made a significant impact on your business like Gary Harper, going through the EOS process, and really kind of mapping out your business like a business and starting to surround yourself with a team that can help you take it to another level. From an engineer part of you, tell us what that means for your business now going forward versus how it’s been over the past six years.
Luciano: I changed completely the game, completely. I was in a box [inaudible 00:28:04]. You know, this network, this platform offers you something that it would take me too long to accomplish by myself. Here in Houston, I studying, going to events. I mean, the knowledge sharing of a mastermind, it is too important, too important. And your group, it’s an amazing group. I mean, I got there, for instance . . . You remember that. I got there I was like, “I have nothing.” I mean, I was doing 30 deals a year. Very profitable, actually, but no business. So from the day I left the first time, I was booked with Gary on that December. And when I came back, my . . . And one thing that happened to us. I mean, I’m going off track here, but as a business owner and entrepreneur, what is our accountability? To who, you know? So it seems like within this team, we hold each other accountable. You know, within the U.S. as well, you hold yourself accountable. You have a [inaudible 00:29:24].
Mike: That’s right, yeah.
Luciano: So you don’t want to be [inaudible 00:29:28]. I joke with Lauren all the time “I’m going to put you on the issues list” but definitely the accountability part and seeing people . . . This is the thing. Seeing people succeed and humble, it’s empowering, as well.
Mike: Sure. Sure. So to clarify, but did you say you’re . . . And the number of houses doesn’t tell the whole story for any real estate investor, right, but I guess your kind of best year in the last several years prior to being self-employed and doing this all yourself, tell us what that looks like versus going forward?
Luciano: So not in specifically numbers, but I think was the . . . I actually text Stinson about it. The thing was March 11, we did the same number of houses for eight, I mean, that I used to do yearly. No, I’m sorry, so April, April 11. So three months and 11 days, we purchased the same amount of houses that I used to do average yearly.
Mike: So the first quarter basically, you did your normal annual goals. That’s incredible, man. And I know just from talking to you, by the way, that your life is better too, right? Like you don’t have this pressure on you that you have to go do everything. There’s people that you’ve surrounded yourself with, systems and processes, that allow you to live a better lifestyle than what it would have taken to do that in the past, right?
Luciano: Yeah. It allows you, as well, to keep growing, to build new systems and to keep developing. And as we build the new system, we find who will be the right person to be in that seat. I mean, it’s like you start the process. And that process get on you in a positive way.
Mike: Yeah. Yeah. I mean, the truth is you have to scale to turn this into a business, right? I mean, that’s why a lot of real estate investors get stuck is I’m not bashing somebody that’s doing even just a deal a month, but let’s just kind of make some assumptions here. Obviously, this is different in Boston and California and whatever, but let’s say that you’re doing a deal a month. And you net even $15,000 or $20,000, right? And let’s just say a quarter of that goes to your marketing. And you have an office. And the next thing you know, you’re marking $8,000 or $10,000. Like okay, that might be a decent salary, if you had a job, right, but as a business owner, you’re the chief bottle washer too. Like stuff happens, right? In order to scale, you can’t say, “Okay. Well, I’m netting,” let’s just say, “$10,000 a month. Let me go ahead and add $5,000 of overhead for an admin.” Like you just can’t justify it, right?
You’re never going to get beyond that, but if you say, “Hey, in order for me to get to two to three deals a month, I need an admin. And then I need to bring in a sales person or an acquisitions manager. And in order for me to . . . You know, now I’ve got an acquisitions manager. He’s doing really well, but if he decides to leave, then I’m in trouble, right?” So maybe you need to do four to five deals a month and have two acquisitions managers so you have an insurance policy there, right? And truthfully, whenever you have two sales guys, they usually both perform better because they’re competing with another. And stuff just starts to happen. As your life gets easier, you can afford to run it like a business. You can afford to have systems and processes and people that are doing the things that you don’t like to do or that you’re not good at because now you have enough revenue to justify that. Is that right?
Luciano: Yeah. Oh, yeah. One thing going back in six years, I have a phone that I use to call Money Phone. That was not a money phone. That was a stress.
Mike: Yeah, bittersweet, right?
Luciano: Huh?
Mike: It’s bittersweet though. The money phone rings, which is a lead, and that you have to have that for your business, but you’re like, “Damn it. I’m stuck doing this other thing right now. I don’t have time for that.” It’s crazy.
Luciano: But once we put the CRM perfectly running and we have Moon and I aligned with the right test to find Selina, which is our first manager with the test defined, it’s getting so much easier, so much easier, for everybody. I have to praise Gary. I mean, it was a great decision to unify with them. I mean, it helped a lot.
Mike: Yeah. And Moon, you’ve been doing less talking here, but maybe share your thoughts about you obviously have a lot of success in real estate yourself. What made sense for you to work with Luciano? I mean, you didn’t have to do that. You hadn’t done it before, but what made sense from that perspective?
Moon: I think we were both in the same position, you know. We had just come out of a lead generating program. And then we were kind of in this situation where, “How can we grow together?” And we’ve known each other for a long time. And we’ve always done deals intermittently, meaning like he would send some deals. And I would help him move them, but as we decided, we sat down. We spoke more. We said, “Well, I think we could do something very well together.” So like he says, we really complement each other very well.
Mike: Maybe talk to people a little bit on that note because there’s a lot of real estate investors that are out there right now, every market across the country. Then there are lone wolves, right? And half of the job that they do they hate doing. And they’re not good at it, at least half of it, right? And so there is another person out there. So sometimes the answer is hire somebody, right, but for new real estate investors that we just discussed, they can’t justify that cost maybe early on, but sometimes if you find a partner, well, you may not have to pay them, right? They have sweat equity. There’s equity in the partnership. And you either both make money or you both don’t’ make money or lose money even.
Maybe talk about kind of . . . Because either one of you could have hired somebody to fill that need that you had, but you chose to actually work together more in a partnership format. So just talk about the benefits to real estate investors that are out there that know other investors or people like them that they could potentially work with instead of hire, if that makes sense.
Moon: Yeah. I think because we have experience of what it costs to take a lead or a cost of acquisitions, I mean, we’re spending $5,000, $10,000 a month just to get some leads generated and closing costs, right, to get to that point. So if you hire an employee, at times they don’t understand the money it takes in order to get a deal, so that disconnect. Sometimes they’re not working as hard so that sometimes you’re overseeing them and yelling at them. And also, again, from my background, I’m used to dealing with a lot of employees because my family at the car wash, we have like 30, 40 employees.
So employees are sometimes not the best fit for what you need to do. I think a partner when you’re almost seeing eye to eye, it’s a better opportunity versus having to hire and fire and do that whole cycle over and over. And then sometimes, you create or an employee has a great skill set. I mean, they may take that and use it against you. They still do all sorts of stuff that may make you question them. And then there comes this tension. So I think partnerships are a better way to grow versus having a bunch of employees that have turnaround and stuff like that.
Mike: Yeah. Yeah, that’s awesome. That’s awesome. Awesome, guys. Well, hey, thanks for sharing your story with us today. And thanks for sharing your experiences on how to go from a self-employed person to a business owner because let’s be honest. Probably 95 out of 100 real estate investors are stuck in self-employment.
Luciano: I have a lot of friends from engineering school. And actually I have an event to go tomorrow. All of them dream about being a business owner, but what they’re trying to do really is to be self-employed. I think they’re giving me some ideas. They need a program.
Mike: Yeah. No, that’s great. Well, let’s be honest though. I mean, so you have an MBA. I have an MBA from a top program. Like the formal education system is not teaching you to be a business owner. It’s teaching you to work for somebody else, right?
Luciano: A hundred percent.
Mike: Yeah, I mean, it’s industrial era stuff that has not changed in 100 years. Once you realize that, it’s like you start to think differently like, “Okay. Even at grad school, they’re not teaching me how to go do anything myself. They’re teaching me how to improve my skills so that I’m more marketable so that we can say that Coca-Cola or somebody else has a recruiter at our school,” right?
Luciano: Yeah. We get overly-capable to really use minimum of our skills. That was one of my frustrations, as well. And as a business owner, I mean, you really get to explore everything. The formal education, it’s amazing. I mean, people say, “Oh, you just start a business.” Don’t forget about that form of education. It’s huge. It helps a lot.
Mike: Oh, yeah. I’m not discounting it too much, but I would just say a lot of times, people don’t realize that when you’re self-employed, you’re taking out the trash. You’re changing light bulbs. You’re talking to customers. You’re raising money. You’re the marketing guy, the finance guy, the operations guy. You do it all, right, or if you don’t do it well enough, then you’re out of business.
Luciano: Yes. The simple [inaudible 00:39:08] of finance accounting, for instance. On an MBA, we go. We learn. And we apply it in corporate. We’ve done that as a manager, director, whatever it is, but most of the . . . You know, when you get into your business, you need to know those lines line by line. You need to. It’s different. You know, you may have people that . . . I mean, it’s . . . The day-by-day is very different, very, very different.
Mike: Yeah. Yeah. Awesome, guys. Well, hey thanks again for sharing your knowledge with us. Hey, if folks wanted to reach out to you or wanted to learn more about you, is there anywhere? I know that you guys are . . . I’m not sure if you have a website or a place for them to go check out.
Luciano: We do have a website, but both of the website is more for lead generation. So I can provide my email address to you. And if somebody has any question or something they would like us to share with, I will definitely respond to it.
Mike: Okay. Sure.
Luciano: Yeah. And we sincerely appreciate the invitation. You know, we look up to you guys. And it’s a great program. We’re very pleased to have joined the Investor Fuel. It changed the game.
Mike: Yeah. Yeah. Awesome. Awesome.
Luciano:Being surrounded by very talented and great people willing to share, it really changed the game.
Mike: Yeah. Awesome. Awesome. Well, we’ll see you guys here in a couple week.
Luciano: Yeah, definitely.
Moon: Thanks, Mike.
Mike:All right everybody. Hey, everybody this is episode number 413. There’s some great lessons in here. If you are just getting started in the real estate investing, it’s kind of a different way to think about how to hit your goals. And if you’re stuck in what we call the self-employment kind of box where you might have a business that’s doing well, but you’re doing everything and really not getting the freedoms that you got into this business for in the first place. Hopefully, you got a lot out of today’s show.
So I appreciate you, guys. If you haven’t yet, please subscribe to us on iTunes, Stitcher Radio, Google Play, even on YouTube. Of course, you can watch and listen to all of our shows on flipnerd.com where we . . . Literally, this is episode number 413 of this show, but we have a few other shows running, as well. So we have over 1,500 video shows on real estate investing on flipnerd.com. I appreciate you guys. See you soon on another episode. Bye-bye.
If you’re an active real estate investor already doing deals and looking to double or triple your business, you should consider joining the Investor Fuel Real Estate Investor Mastermind. We’re a small group of investors that share our best practices, tips, and tricks with one another in an effort to all win. Real estate investing can be a lonely business for successful real estate investors, but it doesn’t have to be. Investor Fuel members meet four times a year, but we talk to each other 365 days a year. And we focus on improving the profitability of our businesses, improving the quality of our lives. That’s why we do this, right, and making an impact on those around us so we can truly leave a legacy.
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