The Real “Cheat Code” for Financial Freedom (Not Rentals?)

20:18Ashley Kehr:And I think one of the key points you made there is like looking for a business that maybe already has a manager in place where maybe it's somebody who's semi-retired that is selling the property and or selling the business. And you can just kind of come in and, you know, not have to actually run the day to day. And that gives you more leeway to actually learn the business if there already is that key manager in place, or there's enough revenue coming in and enough profit that you can easily pay to hire a manager to come and step in that has experience in that and you're still making money behind the scenes.

20:59Tony J. Robinson:Exactly. I interviewed another guy recently who he was my banker for years. He was a branch manager and then he was a business banker and he went and bought a company that makes road expanders, which are giant pieces of heavy truck equipment that adds extra asphalt onto the side of the road as it drives and packs it down so they make highways bigger. I don't think he had much everyday experience in making roads wider or the equipment that was used to make those. I know for me, I had never even heard of those machines.

21:37Ashley Kehr:I think there's a lot of construction out of the basement window or something that's watched every year.

21:43Tony J. Robinson:Yeah. But he took over as the president, CEO of that company and started running it from day one and did a great job. He's grown it and he continues to grow it. So it's sometimes, you know, I think sometimes almost having too much knowledge can hold you back a little bit. But the guy with the tool rental company was telling me that he's been approached by staff with ideas that were previously just shot down by the old owners because it wasn't their way. And he's like, why not? Let's give it a shot. He doesn't know what he doesn't know. It's worth a shot. So I wouldn't hold the lack of knowledge back from looking into it as long as you're open to learning.

22:30Tim, not everyone's sitting on 50K for a down payment for a piece of real estate either, which I think is part of what makes buying a business maybe also more attractive because the options for seller financing are there. But if someone does want to buy real estate and you did it creatively on your first deal, how can someone think, I guess, more maybe creatively about income, about credit, or about the skills they already have to get into real estate investing? Yeah, I think, I mean, you mentioned the word credit.

22:56Tony J. Robinson:I think that's the number one place that anybody should start is making sure your credit score is, your credit history is up to snuff. It needs to be good. That's when you're, whether you're dealing with a bank or dealing with private lenders or hard money lenders, that's one of the first questions that anybody's going to ask you is, you know, what does your credit look like? And they're going to pull it and they're going to look at it. So making sure that that is all clean and in good standing is definitely the best place to start. And in particular, if you don't have your own cash to put into the deal, you're going to need even better credit to show that you can perform on the debt.

23:41Tony J. Robinson:The next thing is to save as much as you can. And I know, you know, depending on your income source and your lifestyle, it can be tough for people. But that's kind of the next most important piece is to save whatever you can as soon as you can to have something to show. Like I said, I mean, there are ways to buy businesses with no money down. There are ways to buy real estate with no money down. And, you know, we'll all talk about them. But it is important that you have some cash set aside at some point, even if it's not to close the deal. It's to address something when it goes wrong, because something will always go wrong, as we all know.

24:21Ashley Kehr:So, Tim, you talked about, you know, different ways that you've been able to purchase real estate with your lines of credit and using your business income to buy the properties. What's one piece of advice you would give a rookie investor about building relationships with banks or with people in your network to actually make this come about that you can actually find these creative different types of lending?

24:49Tony J. Robinson:I would say to get out to as many real estate meetups as you can in your area. And I'm not the best at doing that myself. I'm not a great networker in those types of settings, but the more you get in rooms with people that might be potential lenders or partners or resources for you, the better off you're going to be. I met my private lender because of the first business that I actually looked into buying. Somebody connected us and said, this guy might be willing to lend you money to buy a business. He wasn't, but we kept in touch. And so I guess that's the point is part of it is getting out there and meeting people, which I know can be tough for people because it's tough for me.

25:39Tony J. Robinson:But once you meet somebody, making sure that you're staying in touch with them on a regular basis, following up with them, sending them questions, sending them good questions about different things that you're looking at and just maintaining those relationships. Uh, another piece of advice that I've always gotten was when you're talking to somebody new, uh, and having a conversation, ask them for one to three other people that you should be talking to about this issue or about some, you know, something related to hopefully build your network in that way. Um, with bankers, they, you know, some bankers are great though.

26:18Tony J. Robinson:They like to spend time with, with new people. Some are just way too busy. So figuring that out, not every banker is going to want to talk to you, but walking into different banks, sitting down with a specific deal that you're looking at and going through it with them can help show them that you're serious and help you understand their thought process for the future.

26:39Ashley Kehr:Tim, I think there's one thing that you're not telling everyone that you do at networking events or meetups or something is you bring something with you that brings people to you. I do.

26:53Tony J. Robinson:And that's my little, my little hack, which I guess can work for other people is when I show up at certain events, I will always bring a very nice bottle of bourbon so that people want to come and talk to me. That's my selfish way of, of getting people like me is just to bring, bring good bourbon.

27:12Ashley Kehr:Yeah. I've seen it firsthand work. You're sitting there, you just set it on the table and people come over all interested and you offer them a drink and then you're, you're talking with them. Like, I think that's such a great idea.

27:23Tony J. Robinson:Yeah. And it, it doesn't have to be bourbon. It can be, you know, something else, I guess, you know, finding that unique thing that you can be the attraction. There's a, there's a book called how to talk to anyone. Uh, it's by this author name, uh, Leo Lounds, I think is how you say her last name. Um, but how to talk to anyone. And in that book, it just talks about like, Hey, how do you, how do you kind of break the ice? How do you get a room full of people that maybe you don't know and still carry yourself confidently. And one of the things that she talks about in that book is exactly what you do, Tim, where you have something that's like a conversation starter.

27:55And for her, she said that she would wear like this large, like beautiful pin. And I can't remember what the pin was, but people would always come to her and like, oh, like, what is your pin about? You know, for you, Tim, it's bourbon. So for all the rookies that are listening, you know, like, what is the thing that you can bring into like BP con where people kind of look at you and say, Oh, well, what is that? Or tell me more about that. But the other piece to Tim, that I wanted to highlight, you talked about like asking the person you're talking to, if there's anyone else that you should know, I saw this, this, this TikTok video, where someone threw a party.

28:31And the whole premise of the party was that I'm going to invite Tim, Tim can invite one additional person. The person that Tim has invited can invite one additional person. And you can do that up to six people. And that's the only way that you get invited is that, you know, it like plays out the idea of six degrees of separation, but like in real life in a party. So for all our rookies that are listening, if you really want to like a cool way to supercharge your networking, try and throw one of those parties where you, you invite someone and tell them they can each invite one additional person.

29:04and you'd be surprised who might end up in the room with you.

29:07Ashley Kehr:That'd be a really cool thing to do at BPCon. It's like you meet someone the first day and you say, okay, they ask someone and you do that. And then you have a dinner the last night or something like that with those people.

29:20Tony J. Robinson:That's a great idea. And to the wearing something in particular as well, I have done that as well as Ashley's probably seen. 90 % of my days, I am wearing a black polo shirt. I am very nondescript. I don't like standing out. But when I show up to certain events, I will wear a very bright Hawaiian shirt with Bill's helmets and logos embedded into it. So it not only draws attention because it's big and bold, but for people that have a connection to football or the Bills in particular, they're drawn to it and it can open the conversation. Well, Tim, I think most rookies, getting back to the real estate investing side, I think most rookies imagine being a landlord always just means passive income.

30:02But we all know that's not necessarily the case. How did you learn to delegate and build systems so you could actually step back and enjoy the life you've built?

30:12Tony J. Robinson:I mean, it started in business for me. Even when I bought the wine and liquor store, I knew from day one that I was going to be working a lot the first few years. But I knew that I didn't want to be working in the store 40, 50, 60 hours a week for the rest of my life. So I always approach new things with what do I need to do? What should I do? What can I hand off to somebody as quickly as possible and not lose sleep over that item? Um, um, I don't expect everything to be done perfectly right from the start, uh, when I hand something off, but I'm not going to be upset that it's not done perfectly.

30:56Tony J. Robinson:That's the kind of the mindset that you, I think you need to have when you're delegating is, you know what, it's not going to be perfect. It's not going to be done the way that I want to do it. And I am a pretty big control freak, but it's okay to let somebody else make mistakes to as long as it's not something that I have to do anymore. So, you know, creating systems and processes, one of the tricks that I do is when I hand something off to somebody, I show them how to do it. I explain my system. I ask them to document it themselves, how they're doing it, how I'm asking them to do it. So they'll create the Word document, you know, the Google Doc, so it's shared and we can share it with each other and we can share it with the next person that has to take over.

31:41And I tell them, all right, here's how it's done.

31:45Tony J. Robinson:You document it step by step, and then you continue, you take ownership of that document and you continue to evolve it as systems change. You know, especially when you're using different software, little things change in the software over time, or you just, you know, the new person finds a better way to do something. And it's like, okay, I did it your way. Here's the system and process that we did. But I figured out that I can cut the time down if I do X, Y, and Z instead of ABC. Then they'll update. I'll have them update the document. And that's in place for the next person that's going to take that role on when they're done with it.

32:24Tony J. Robinson:But, you know, I think just the big thing is mindset. Being willing to let things go that you shouldn't be doing anymore. Tim, what are like some of the lessons you have learned or like the biggest mistakes you see maybe other people make when it comes to actually delegating or even just the leadership role of, okay, you've hired this person.

32:45Ashley Kehr:What are some mistakes that are made for you as the leader and the one delegating?

32:50Tony J. Robinson:I just made a massive mistake a couple weeks ago with delegating and hiring. I brought on a new hire VA from the Philippines to help me. I recently launched a podcast and I wanted to improve my social media around that. I hired the guy, but I had travel planned already. I had a million other things going on in preparation for that travel. and I did not give him the attention and the time that was needed to get him up to speed on what I needed him to do. Complete failure on my part on the timeline of making that decision and bringing him on board. So it was a frustrating couple weeks for him and for me because from my perspective, he's not delivering on what I needed to be done.

33:44Tony J. Robinson:On his perspective, he wants to be doing a good job. He wants to, you know, he's happy. He's, you know, excited to start this and he's got no direction and little oversight to start out with. So, uh, when you're making those decisions to delegate and, and, or to hire, making sure that you've blocked off your calendar and that you're mentally and physically prepared to spend the time and energy to invest in that person, because it's not, it never goes as quickly as you'd like it to. But in the long run, you'll be happy once you've invested in it. Tim, I'm kind of like chuckling and nodding my head because I definitely experienced that same pain when we onboarded our first virtual assistant as well.

34:30And we actually hired three at one time. And it was just a complete, you know, an utter chaos and to no one's fault but my own. and your point of making sure that you have the right amount of time to pour into them. Because sometimes you hire someone, you get frustrated that they're not doing a good job, but in reality, you just didn't set them up the right way. And you as the people leader have to understand that they are not actually the problem, but it's you. So I'm super glad that you highlighted that. And I can definitely feel your pain when it comes to that.

35:01Tony J. Robinson:Yeah, 100%. It's that extreme ownership mentality, Jocko Willnick, that I've heard talked about and heard him talk about on podcasts. I'm not perfect at it, but I try to take responsibility for everything. And especially when you're onboarding somebody, it's all your fault until they've really gotten the education and still can't deliver. I think every entrepreneur that's tried with VAs has gone through that at some point. It's, you know, there's no perfect solution. And other than just making sure you put in the time when you first do it. So far, Tim shared how he's built systems in his business to actually enjoy the freedom he was looking for.

35:44But what if you're already a landlord? So coming up, we'll dive into how owning a business can complement or maybe even accelerate your real estate investing. Plus, there's one decision Tim says made the biggest difference in his journey. So don't go anywhere.

35:57Ashley Kehr:Nobody has a perfect plan when they start a business. I sure didn't. I just had an idea and a lot of nerves. And between t-ball games, weddings, and whatever chaos summer throws at you, there's genuinely never a good time to sit down and figure it all out. That's honestly the best thing about Shopify. You don't need a free weekend and a computer science degree to get something live. My go-live day is still one of my favorite memories. I picked a template, dropped in some photos, and Shopify's AI tools basically built the bones of my site for me. It looked like something I actually paid a designer for.

36:29Ashley Kehr:And when a customer is ready to buy, Shopify checkout keeps it simple. Their info is saved. They checked out in one click and you get to hear that little cha-ching before you've even finished your coffee. If you're on the fence, here's my advice. Stop waiting for the perfect moment. It doesn't exist. So just start. All you need is the idea. Shopify handles the rest. If you're serious about hearing your first cha-ching, start your free trial at shopify.com slash rookie today. You heard that right. Start your free trial today at Shopify.com slash rookie. That's Shopify.com slash rookie.

37:07Tony J. Robinson:Most investors only think about insurance when something goes wrong. A tenant injury, storm damage, loss of rent. Then suddenly, the cheapest policy doesn't feel like the best one anymore. That's why a lot of BiggerPockets investors use steadily for landlord insurance designed specifically for rental properties. Whether you own one property or a growing portfolio, Leo, they make it simple to get covered properly. And BiggerPockets Pro members get an extra 5 % off their landlord insurance premiums. Visit biggerpockets.com slash landlord insurance to get a quote today. If you think property management is expensive, try mismanaging a vacancy or an eviction or a maintenance issue that turns into a five-figure problem because no one caught it early.

37:52Tony J. Robinson:That's expensive. A good property manager isn't overhead. They're protection against small mistakes turning into big losses. And that matters more than ever in this economy. That's why I like Mind. Unlike other property managers, Mind manages your property like an investment. They obsessively measure the things that matter for your bottom line. Things like occupancy, delinquency, and net promoter score. And they have the results to prove it. Go to mind.co slash show me to see how Mind performs and get your first month free, which is much cheaper than learning the hard way. You know that thing where you discover a feature you wish your software had, and it turns out it already exists just on a different platform.

38:34Tony J. Robinson:Like, oh, you want rent payments processed in two days. RentReady does it. Oh, you want to block tenants from making partial payments mid-eviction. RentReady does that too. Oh, you want full accounting and tax ready reports without paying for a second tier rent ready does it and oh you want tenant screening that doesn't overcharge your applicants rent ready also does this basically if you've ever complained out loud about your property management software rent ready probably already built the fix it's twelve dollars a month you're welcome sign up right now for fifty dollars off your first year of rent ready with promo code bp cash bigger pockets pro members get it completely free sign in through your pro account at rentready.com slash biggerpockets.

39:19Tony J. Robinson:That's rent, R-E-D-I.com slash biggerpockets. Tax season reminder for all the real estate investors listening. If you own rental properties, short-term rentals, commercial buildings, basically anything that's not your primary residence, you need to know about cost segregation. It's an IRS compliant strategy that lets you accelerate depreciation on your properties, which means you're paying less in taxes this year and keeping more cash in your pocket for your next deal. Cost Segregation Guys is the go-to firm, having done over 12 ,000 of these studies with$500 million in total depreciation identified.

39:57Tony J. Robinson:Head to costsegregationguys.com slash BP to get a free proposal and see your potential tax savings. All right, and we're back here with Tim. So Tim, for someone who's already a landlord or an investor, how can owning a small business complement or even accelerate what they're building in real estate? So I think one of the key things for me is that having this business that is mine, that is generating cash flow for me, it puts me in a different position than somebody that's just starting out in real estate that is kind of very eager to get that cash flow from the real estate that we all hear about when we're first getting into real estate.

40:42Tony J. Robinson:You hear about this cash flow. You hear how it's going to change your life and how great it's going to be. Having already owning a business that's generating my cash flow, that's building equity for me over time, I wasn't in a desperate, for lack of a better word, position of needing to get as much cash flow out of real estate from the very beginning. So it allowed me to make decisions of buying certain burr properties that may not kick off a massive amount of cash flow early on, but they're building equity over time. And so I'm not trying to suck out every penny every day. I'm allowing that equity to build.

41:30Tony J. Robinson:I'm making repair and CapEx decisions that will only improve the properties over time. The other big way that it has helped is access to lines of credit. So it's having the business established, paying down my initial loans to buy the business, allowed me to open up business lines of credit with various banks that I can use that cash to lend to my flipping entities or to my real estate entities that can reduce the amount of interest that I have to pay to a private lender. Or just in a very simple, you know, when making offers on properties, sometimes if that cash is available in the line of credit, I can use those statements as proof of funds.

42:17Tony J. Robinson:So I don't have to go to a bank or go to my private lender and ask them for letters showing that I have the funds available to close because we make quote unquote cash offers, which essentially just means that we're not going to rely on a bank to close the deal. So the sellers want to see that we have those funds available. So by showing them my business lines of credit, it lends credibility to the fact that I am a serious investor and I have cash available.

42:44Ashley Kehr:Tim, before we wrap up here, the last question I have for you is what's one decision that you made early on that you think genuinely had the biggest impact on getting where you are today?

42:56Tony J. Robinson:Buying my wine and liquor store. That's the way it has changed my cash flow perspective, the way it has changed my net worth, my equity, and my lifestyle, most importantly, giving me the freedom to invest in other things, other businesses, real estate, has really just opened so many doors for me that I would do it again in a heartbeat or any other kind of similar small business that I would have gotten my hands on at that time period.

43:32Ashley Kehr:Tim, I guess real quick to just kind of like follow up on that, like, is it achievable for someone else to buy a wine and liquor store? Like if they're like, you know what, that sounds great. I want to do the same start. Like how much money did you need to have to do that?

43:47Tony J. Robinson:Yeah, I think it's attainable for everybody. I mean, the purchase price of that wine and liquor store was less than the median home income or the median home price in the United States right now. It was, it was, uh, we originally went on a contract for$200 ,000 for the business plus inventory, which inventory was supposed to be 150 ,000. So we'll call it 350 purchase price, but it was only a hundred thousand when we at closing. So for$300 ,000, uh, I bought a business that generated enough cashflow for me to live on day one, plus started building equity. the bank gave me about 80 percent I think it actually was closer to 85 percent of the purchase price by the time because the inventory was lower than we thought the sellers gave me a close to 10 percent of the purchase price and I had prepared to go into it with about 10 percent of the purchase price.

44:49Tony J. Robinson:So it's definitely doable. Again, that$35 ,000 to$50 ,000 of cash saved up is not, I know it's not a small amount for a lot of people in today's day and age. It takes some work to get there, but I worked, I just kept saving and saving in my early career so that I had cash available to make a move like that.

45:15Ashley Kehr:Well, after that, we're going to have to bring back the BiggerPockets business podcast now that Tim's turned everyone on buying a business instead. Yeah, Tim, thank you so much for sharing the numbers on that too. I think it really shows like, okay, if this is something you're serious about, what it could look like for you. So Tim, where can people reach out to you? You mentioned a new podcast. Where can they find that?

45:39Tony J. Robinson:The new podcast is called Business Buying for Financial Independence. It's on all the podcast players. I hang out on Instagram and threads more recently, a lot more at Tim T Delaney. And I have a website at powerofbiz.com.

45:57Ashley Kehr:Well, Tim, thank you so much for joining us today. We really appreciated you taking the time to share your journey and give some advice to our rookie listeners. I'm Ashley. He's Tony. And we'll see you guys on the next episode.