Episode 23: [Foundation] When To Set Up A Company For Flipping w/Marco Romero

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Show Notes

Marco has been interested in real estate since reading Rich Dad Poor Dad at an early age. After laying out a success strategy, he began to acquire the skills he would need in order to build a career as an investor. He gained valuable people skills by working in sales and the restaurant field. The experience he gained by working with a wide spectrum of individuals was critical to his success with investment properties.

Since obtaining his real estate license over seven years ago, he has worked for several investment companies in San Antonio and now successfully runs his own business independently.

He has spent time in all realms of residential real estate, from standard single family homes to small multi-family properties. Taking what he has learned in other fields, Marco has followed the philosophy that a transaction is never about the property, but the people.

In this episode Marco walks us through his start in real estate investing. He walks us through his reasons and how he setup his companies for asset and liability protection.

So many new investors use the question of which entity to set up to stay in their comfort zone and not take action. Marco advises against that and recommends you take action and then setup your company.

Obviously, if you have a lot of assets to protect you might want to set up the entity first. Otherwise, you should just get out there and make it happen and worry about it later.

Recommended Books

Rich Dad Poor Dad: What The Rich Teach Their Kids About Money That the Poor and Middle Class Do Not!

The Virgin Way: If It’s Not Fun, It’s Not Worth Doing

The 4-Hour Workweek: Escape 9-5, Live Anywhere, and Join the New Rich

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Episode Transcription

Welcome to The Flipping Junkie Podcast. My name is Danny Johnson, former software developer turned house flipper flipping hundreds of houses. Each week, we bring you interview, strategies, stories and motivation to help you get started flipping houses and on your way to becoming your own boss and achieving financial freedom. Thanks for spending time with me today. Now let’s get to it.

Danny Johnson: Alright. Hey, welcome back to The Flipping Junkie Podcast. This week I’ve got a friend of mine from San Antonio where we invest and live and everything, Marco Romero. Marco has been interested in real estate since reading “Rich Dad Poor Dad” at an early age and after laying out a success strategy, which is very smart, he began to acquire the skills he would need in order to build a career as an investor. He gained valuable people skills by working in sales and the restaurant field and the experience he gained with all those things and working with a wide spectrum of individuals was critical to his success with investment properties. Since obtaining his real estate license over seven years ago, he’s worked for several investment companies in San Antonio and now successfully runs his business independently. He spent time in all realms of residential real estate, from standard single family homes to small multifamily properties. Taking what he’s learned in other fields, Marco has brought a philosophy that a transaction is never about the property, but rather it’s about the people, and that’s a very important thing for everybody to realize and take note of because it’s true. Today, I’ve got Marco on the show to talk about when to set up a company for your house flipping business. A lot of people stress about whether they should even do anything before they set up a company and we’re going to talk about the ins and outs of that and what approach we feel you should take with regards to that. It will be a great episode and be sure to subscribe on iTunes and rate and review the show. I’d really appreciate it. It really helps us out to get more people on the show and to keep it going. Thank you very much for listening to The Flipping Junkie Podcast. Be sure to check out our real estate investor websites at LeadPropeller.com, a really cool feature of that is when a motivated seller submits their information about a house they want to sell to your website, you get a text message immediately with their information and you can contact them directly while they’re probably still on your site. That is how we kind of limit some of our competition because we’re able to contact them, talk with them, set an appointment, see the house and they are a lot less likely to go back to the search results and contact any other real estate investors. That really helps limit competition. You should check out those very cool real estate investor websites that leadpropeller.com Thanks again for listening and let’s get started.
Hello Marco. Are you there?

Marco Romero: Yeah. Hey Danny.

Danny Johnson: Hey, thanks for being on the show taking the time to do this.

Marco Romero: I’m excited to be on this show. I’m definitely looking forward to it.

Danny Johnson: Great. For the audience, all the flipping junkie listeners out there, do you want to share how you get started, what got you interested in real estate investing and how you got your start?

Marco Romero: Definitely. Actually, the way I really got started was I read the book “Rich Dad Poor Dad” back in high school. When I read that book, it really shifted my mentality on finances, investing, business and really got my mind going in that regard. Since that book, I always was looking to learn, always reading, joining in a bunch of different seminars, being involved in whatever ways I could do at the time. Eventually, what really got me started though was I went to another seminar with a company here in San Antonio and this seminar it was actually with a company called “Lifestyles Unlimited.” When I was there, the items that they were saying and different topics really made a lot of sense and it was a lot of the tangible items that you usually don’t always get, so I got really excited. At the time I was working at Pappadeaux which is a pretty popular restaurant here. I was a bartender and manager. I decided “Alright. I’m going to do real estate investing full time.” I went in and gave them a month’s notice and said, “Alright, I’m going to be quitting.” And I became a member over there at Lifestyles. While I was there, I was very active. I was going all to all their meeting, I was sending emails to all their agents all the time trying to find deals because I didn’t really know how to do the deals like, the specifics of it, but I knew I wanted to be involved.
Because I was so involved they asked me to become a real estate agent and to service their investor clients that were constantly looking for deals and I thought would be a great opportunity for me. Number one, I would get access to MLS, but the opportunity to leverage all the deals that these other investors would be doing and kind of pretending as if they were my own deals, learning how to deal with setbacks, how these investors were looking at deals was a great way for me to really learn at exponential rate. I really took advantage of that. I became an agent with them and worked with them for quite a while. I did that and eventually there were two gentlemen that started another company called Equity Academy where they were an education and mentor group and I joined them, helped them build that business. I did a bunch of real state training videos and things of that degree.
Eventually, I moved on to become an independent wholesaler, which I did for several years and sold a lot of properties, did a lot of deals, and actually one of the companies I sold a lot of properties to was a ATW Investments. The buy the most residential investment properties in central Texas and they asked me to run their acquisition team. I ran their acquisition team, finding the properties, helping their team members there to negotiate and work the deals properly and did that for about a year and a half.
Now I recently got married and has a baby on the way. My wife and I have decided to invest full time with each other building our own investment portfolio and that’s what I’m doing now.

Danny Johnson: Great. Well, congrats on the family. That’s awesome.

Marco Romero: Yeah it’s exciting. I’m going to have a little zoo here with all the other animals too.

Danny Johnson: What other animals do you have? I didn’t know that you had many animals.

Marco Romero: We have a dog and two cats and the baby on the way is going to be a little girl, so we’re used to have a full house.

Danny Johnson: Excellent. Yeah. I remember we sat down at a Starbucks several years ago whenever I was planning out REIMobile, the CRM software, because you were doing your independent wholesaler and you had your system set up with spreadsheets and things like that because you did a lot of work with other investors and so I wanted to talk with you whenever I was researching how to best set that software up and so I just remembered you know sharing a lot with me back then and I really appreciate it.

Marco Romero: Yeah, I remember that too. That was a good conversation.

Danny Johnson: That software is now out and we’ve got that in beta testing and adding a whole bunch of cool stuff in there too. Today on the show, following along with a whole series of foundation, mindset and goal setting that we’ve been doing on The Flipping Junkie Podcast, I wanted to bring you want to talk about what a lot of people have questions about and I think what people use as an excuse to stay in their comfort zone and not ever really take action to try to buy any houses or buy any investment properties. And that’s just that they feel like they need a company or something to set up first and they’re not sure what entity to set up, how to go about it, how much it costs and then they use that as an excuse as not having a company as saying, “Well, I don’t want to make a mistake and do it in my personal name and get sued or something…” – and all those kind of things. Maybe we can start the conversation about that with how when you were getting started, did you first set up a company before you ever did any investing.

Marco Romero: No. I didn’t start a company just because I didn’t have enough knowledge of it on how do it and the process. I knew it was important, but I really wanted to get started and that was kind of low on the priority list for me and when I originally was starting.

Danny Johnson: Yeah, that’s how it sort of was for me as well. And so you were just buying in your in your name? What were you doing when you got started?

Marco Romero: Yeah. I was buying properties and writing contracts in my personal name. I didn’t really take – getting an entity set up seriously probably until about three years ago or so. At that point, that’s when I sat down and really took the time to create my LLC is figure out how I want to structure my business because at that point money was starting to come in and as you’re making more and more money, you need to be more and more responsible. That’s something that I had delayed for too long. But I went for quite a while just doing it in my personal name.

Danny Johnson: What kind of investing were you doing? What was your typical exit strategy for the houses that you were buying? What was the strategy you were using back then when you were buying in your own name?

Marco Romero: Well, mainly when I was doing it, I was just wholesaling. That’s kind of the biggest reason probably why I didn’t get the LLC was because when I actually had a deal on a wholesale transaction, you’re in and you’re out, you don’t really hold onto anything. Liability is a lot less compared to holding a home or sell on a property that flip-wise, but that’s probably why I just was wholesaling during that timeframe.

Danny Johnson: Okay. And so what do you what do you recommend for people that are just getting started that are sort of on the fence saying, “What should I do? What kind of entity should I set up? Should I even set one up?” What’s your view? What’s your take on that?

Marco Romero: Definitely. My take on it if you’re fresh and really getting started, I wouldn’t be concerned about setting up an entity right away because there’s a lot for you to be learning and it can be one thing to kind of deter you from actually taking action and going down that route and doing things because especially when you’re dealing with legal entities, you want to make sure you’re doing it right, what’s the right name, who’s going to be the managers on it and how do I file it – all these things from deterrent from you to actually taking action of doing the first deal. I give a priority to taking action and doing your first deal first over creating your entity. But shortly after that, once you start bringing in some money, that’s something definitely to be looking at. There’s a lot of information on the Internet where you can look up and say, “How can formulate? What are the steps 1-2-3 to do that?” But if you’re in the business, you can ask around other investors to get some guidance. Maybe they can tell you how they do it, maybe you’ll get someone lucky enough to walk you through it or maybe they can even refer you to a real estate lawyer. There’s plenty of real state attorneys out there that will freely and kindly guide you through it. Those type of things. But at first, if you’re just getting started, the goal is to take action to start moving forward in a real estate investing career. I would put that as a priority.

Danny Johnson: Right, so don’t use it as an excuse to not doing anything. I wonder what the stats are. It would be very interesting to see what the stats are for the number of entities that have been started that have never done anything, never done any business and we’re just shut down. Do you know what I mean or were they just maybe –spent some money and did some deductions, had a loss and then just closed down because they never really bought any houses because the stats for people wanting to get started in flipping, in real estate investing, but not ever doing a deal is pretty crazy. Do you have a rough idea of what those stats are? I think people a lot of times just make it up, something about 90%.

Marco Romero: It’s got to be a massive number. I mean, honestly when I very very first started I did create an LLC now that I’m thinking about it with my parents because I was really excited to get started in real estate with them. But I know there were several years that went by without me actually doing – I worked as an agent for a while and then I became a wholesaler and several years went by where I never really used it. And then when I started doing transactions on my own, at that point my parents were doing a whole different thing. I never even used that LLC. I have an example of not using an LLC right there.

Danny Johnson: There are other things that you can use if you don’t want to use your name for marketing and things like that, if you want to use a company name. What we did when we got started was, I think the first several we just did in my own name but it was pretty soon that I went and actually did a DBA which is “doing business as” and that’s very cheap and it’s not really even an entity. It’s just that you can use that as sort of a marketing or a name to buy properties and stuff like that, so it doesn’t really offer you any protection. It’s just a thing to not have your name out there.

Marco Romero: Yeah. Doing the DBA is actually pretty easy. A lot of people might think that it’s kind of difficult. But really all you do is go down there, fill up the form, turn in the money and then you have a DBA that you can use an official branding name with your business and marketing.

Danny Johnson: Right. If you have that name, you can maybe do that and then once you start doing deals and then turn that into an LLC and it’s just to make sure that you do that corporate name check though for any similar names, so that you can make sure that you get it whenever it comes time to want to use that name.

Marco Romero: Right.

Danny Johnson: I think we have one of our companies we had to get approval from a company in Dallas that was completely separate. I think it was like in-home care or something like that

Marco Romero: Really?

Danny Johnson: But the name was real close, so I had to send them a letter and they had to accept allowing us to use the name because it was similar, but a different business.

Marco Romero: How interesting. I guess maybe my name must have been so off-the-wall I haven’t had to do that yet.

Danny Johnson: I get emails sometimes too from – this is for a different name, but I get emails sometimes for people wanting to give me their pets because I guess they’re some kind of a no kill shelter or something with a name like that. I get emails all the time about wanting to bring lucky and things like that. I feel bad about it because I don’t know who to send it to, so I just delete them.

Marco Romero: You just delete them? Man…

Danny Johnson: They’re not even in San Antonio. I don’t know where to send them. I have to delete that out.

Marco Romero: I’m joking. For me actually now that we’re talking about LLC stuff, at first I didn’t really give it as much importance. But now when I’m looking at now that I’m doing my business with my wife, I’m kind of on the other side of the extreme, a little bit more aggressive and kind of more over the top with my legal entities and my LLC just because I want to make sure I have as much liability protection as possible.

Danny Johnson: Right. That touches on a little bit of what you have talked about before you said speak with other experienced investors in town or real estate attorneys and I think that’s excellent advice because who better to talk to than somebody else has probably likely gone and done a bunch of research. Where would you find those types of investors and how would you approach them about that?

Marco Romero: Well, if you’re just starting out, the very first thing you can do is join all the local groups of course. Look at real estate investors groups on Meetup. I’m sure in Google you find so and just not only are talking to the people that are in the room sitting in the chairs like you are but keep an eye out for not only the vendors who are usually the companies that are there. They’re usually a little bit more knowledgeable, but even more so, the people that go up and talk a lot or seem to know a lot of people, they might be a little bit more involved. That might hint to them being more knowledgeable in the business and then you can just go up to them and ask them. But as you’re getting more and more involved in real estate, you’re going to find out who the active players in your market are and just seek those people out. What you’ll find in most cases are those really active people are more than willing to give time and advice because they started where you started. It’s got a real sense of people’s business, so if you can help each other out you never know how you can help them in the future too.

Danny Johnson: Yeah. That’s great advice and that’s something no matter what you’re trying to do, just knowing who is the real deal in your area to over time don’t expect to just walk up and immediately become fast friends and expect them to give you all of their secrets and knowledge, but give before you try to receive. Another important thing regarding that though, wouldn’t you say, would be depending on what your strategy is, if you’re going to be a landlord, you might want to have a different entity than if you’re going into do fix and flips versus owner financing and things like that because of all the different tax and ramifications, right? So maybe keep an eye out for the people that talk about the area that you’re wanting to be in.

Marco Romero: Yeah the way I have it, my structure now is I have an LLC specifically for flips, LLC specific for my wholesale transactions and then all my holds, I put each of the properties in an individual LLC. Each property is in its own LLC, so they all have their own view of production basically, which is a little bit more aggressive than what most people do. But you know, it’s something that I want to make sure that I have as much protection as possible in that regard.

Danny Johnson: Yeah. So what was the thinking behind that? So if something were to happen at one of the rental property could you walk us through maybe the thinking behind setting it up that way.

Marco Romero: I’m sorry say that again.

Danny Johnson: Could you walk us through the thinking behind setting your entities like that for rental properties.

Marco Romero: Well basically when I was talking to my lawyers and my CPA and my wife it was something that we kind of came to. We wanted to segregate each property into its own LLC, so that if one LLC was ever sued, they could only go after the assets in that LLC. If we got sued for one property, let’s say Property A, then they would only have access to Property A in that lawsuit. They couldn’t access my property B, C or D because all of those are individual. They all have their own LLCs in that regard.

Danny Johnson: Right. Great. Some people say, “Well, that can get expensive and time consuming.” But really, what’s more expensive, right? Having something that attaches to all the properties in the lawsuit versus having that level of security around it, right?

Marco Romero: That’s exactly the way we thought about it. Yes, it is a little bit more cost consuming, definitely, especially on a time level too but it’s very pre-emptive and when we’re dealing with houses that are worth tens of thousands or hundreds of thousands of dollars, it’s definitely worth the extra minimal cost to prepare properly because I definitely have heard stories of people being sued and even though they were being sued for illegitimate reasons or it wasn’t like a true reason to be sued about maybe they decided to settle outside of court or maybe ended up losing in the transaction or in the lawsuit, it’s just not worth having multiple assets at risk when that’s a possibility.

Danny Johnson: Yeah. I guess that could be seen as sort of a way to reduce the risk of even being sued, right? Because a lot of times, and this is my assumption of course, but they’ll look and see what kind of assets you have before they decide whether to take it on, right?

Marco Romero: Right.

Danny Johnson: You know like, if you have a way to pay them.

Marco Romero: The whole goal is if you do make it harder for the opposing person’s lawyer to track you down or to file that suit, if you make it harder and more time for that lawyer, then that means that’s more cost for the person that’s deciding to sue you. The harder you can make it, the less likely you’re going to be pursued completely. That’s another reason you use the land trust with the anonymity. Combined with the LLC, it can be a great way to deter potential lawsuits.

Danny Johnson: Right. And for people that don’t know about land trust, would you be able to speak more in detail about those.

Marco Romero: Basically I’m not an official on the topic, but basically a land trust is an entity that you can hold property in and there you have a trustee and beneficiary. The beneficiary of the land trust is anonymous. The only information that’s public is information about the trustee and the trustee is the one that kind of does the day-to-day business for that land trust as operating of the man’s rent or things like that, but they’re not necessarily the beneficiary. And when someone suits you, they need to sue the land trust and then they need to find out who the beneficiary is and the trustee can basically decide not to give that information out and then the judge needs to give an order to give the information of the beneficiary out to a lawyer that is doing the lawsuit, so it just adds a level of anonymity like I mentioned which makes it that much harder for someone to impose an action against you.

Danny Johnson: Right. If they don’t know who the beneficiary s, they can’t go into county record and do a search for that entity because it’s nowhere to be found because it’s the beneficiary and it’s recorded anywhere. The land trust isn’t recorded, just the name of the trust.

Marco Romero: Right.

Danny Johnson: Yeah. That’s a very good point. And another point that you made or you actually discussed just a little bit ago is talking about how you had made decisions based on your discussions with your CPA and real estate attorney. I can’t stress enough that people need to find attorneys that specialize in real estate. Don’t just go to a general counsel attorney and hope to get the right information about which kind of entities or that kind of stuff to use and it’s better to find one. Even better is to find one that other investors are using in your area or even anywhere in the country, well, mostly in your area because it could be different around the country, but to find them because they’ve already sort of done a lot of the research and are experts in what best to use. Everybody’s situation is a little bit different based on what your assets and what you’re trying to protect and what you’re trying to do. How did you find your attorney that you used?

Marco Romero: Well, the attorney that I use and I actually have a context with a few attorneys but the one that I use the most the way I got in contact with her, she’s great is by the way, is one of my real estate investors. In my houses too as a wholesaler, I was doing a lot of deals with him and I noticed that she was getting involved in a lot of our transactions and she was like just a general point of contact, so then I just started talking to her and kind of picked her brain and get her advice and then I just started using her when I had the opportunity to for my own transactions. That’s really just kind of grew organically just by seeing how involved she was with one of my real estate investors. I mean really, like I said earlier, it’s a people business. If you just keep in contact with active people and you ask them who do they recommend, most times they’re going to guide you in the right direction.

Danny Johnson: Yeah. Great. I can’t stress that enough. It’s that important and it saves you a whole lot of time and hassle too. So many of us want to go out and figure everything out ourselves thinking that we’ll figure out a twist that someone else hasn’t thought of and it’s just reinventing the wheel all the time and I still find myself doing it and it’s a curse.

Marco Romero: Right. Since we’re talking about all the LLCs and everything, something I haven’t incorporated yet, but as I get more and more properties, I’ll plan to do in the future is incorporating LLCs from a different state. I don’t know a ton about the subject, but I know that like in Texas, which is where I’m at, if you create an LLC here people can do a search and it’s public information who the managers of that LLC are. Like we were talking about earlier, to make it difficult for someone to pose litigation against you, that lawyer all they need to do is look up the LLC and find that you’re the manager and then that they obviously serve you. But something I’m doing a little bit of research to plan and do it in the future is create an LLC out of a different state like Nevada or Delaware where the managers aren’t public information. And that having that LLC on the LLC that I have in place here in Texas, I will add another layer of protection and then when they look up that LLC, the owners and the managers of that LLC is not for public information, so it will make that even harder again.

Danny Johnson: Yeah. So definitely something to look into, it’s pretty interesting. I guess getting back full circle into the beginning of the discussion and I think this goes for more of people that are sort of still trying to venture out of their comfort zone and get started. Don’t use all of this talk in everything as a reason to not get started. Really you should just go out there and start doing things, taking action, meeting with other investors and making sure that you’re going to be one of the 5 or 10% that actually end up doing a deal in the business before you put forth the effort to set up your entities. Of course this all also goes back to how much assets you have and things like that that you don’t want to put out there. If you have a lot of assets that you need to protect, it’s probably better to go ahead and set something up. But if you don’t have a lot of assets to protect, then just maybe taking action and getting started getting going with it. But the number one thing I think that’s important to say is, the best thing that anybody can do to avoid litigation and problems is to just do everything on the up and up.

Marco Romero: Definitely.

Danny Johnson: Integrity and everything and just always being the person that makes sure that you do the right thing all the time. The reason why we still have to set up entities and try to protect ourselves is because of the frivolous lawsuits.

Marco Romero: Yeah and those exist out there.

Danny Johnson: Right. That’s more of the reason, but really the best way to stay out of trouble is to always do things on the up and up.

Marco Romero: That’s something that I always made an extreme effort in how I operated from a business standpoint. I was being honest with people, always doing full disclosures, never try and pull wool over people’s eyes and you know what I found by doing that is usually most people are very receptive to that I appreciate that. If you explain it the proper way how things are operating, they’re more than willing to go along with you in that process and help you out. I’ve had plenty of situations where like, in a wholesale deal, I just explained to them what’s going on and things might not have lined up or maybe my buyer all of a sudden needed a few extra days, the fact that I was honest with people and I built that rapport with them, that connection, they really respect you and they’re more than willing to help you out and say, “Hey, it’s no problem” or even a reduction in price or things like that. I’ve had plenty of situations people helping out and that’s because of the way I operating. If you operate with a higher level of honesty and integrity, then it will reflect in how all your transactions happen and that in itself is going to be the first to turn into any problems.

Danny Johnson: Right. That’s super powerful. I mean, even just with working with motivated sellers whenever you operate from that perspective and you were just that way genuinely it’s obvious to people and people are more willing to sell their house to you and you can’t really fake that very well. A lot of times people say it’s not so much even about price that they’re selling for a lot of times it’s more that they just feel better about you that’s why they went with you to sell their house to you.

Marco Romero: Yup.

Danny Johnson: It’s just the best thing for everybody. If you’re ever in a situation where you have an issue or you have a problem, you need to always think about being in the other side of the transaction and their shoes and how you would want to be treated and that’s where like you said is having the full disclosure and letting them just know the truth of the matter and what the problem is, it’s just the best way to handle it.

Marco Romero: Exactly.

Danny Johnson: I think we had a lot of great info in this episode. I wanted to ask you about, are in any books right now that you would recommend?

Marco Romero: Definitely. I’m always trying to be reading, I’m always trying to keep learning. The book I’m currently reading is “The Virgin Way” by Richard Branson. He’s the one with the Virgin Group, Virgin Mobile, Virgin Airlines. He’s kind of the billionaire playboy I suppose in the sense that he’s is always having fun. There is a story about him buying an entire island for 100,000 dollars. Imagine that negotiation. I think I’m good, but not that good. But yeah, it’s actually a pretty good book. It’s very laid back and the way he kind of describes it, it’s kind of like a fun grandpa were talking to you. The concepts are very powerful. As an example would be like, it would be listen more than talking which a lot of people know, but he breaks it down and he kind of translates that into the success he has in this business. It’s just like if you were talking to somebody it’s not like a very intense read, not very technical, it’s one that’s very easy to digest and has great concepts in there. It’s pretty good. I really like it.

Danny Johnson: Yeah. I have to check that out. What are you doing right now in your business or personal development that’s helping you the most?

Marco Romero: What’s helping me the most is reflection. Honestly, I hadn’t really incorporated that as much up until recently. Just taking time to really organize my ideas, plan appropriately, I’d be a much better job now of planning my days and planning my weeks ahead of time. It’s very easy in the business to get caught up in what needs to happen next day to day, you’re like, “Oh, I need to call this seller” or “I need to call this buyer” or “I need to work on this item” or whatever. You’re just kind of getting emotions, but really taking the time to sit down, reflect on what worked, what did it work increating plans really has been helping with efficiency and just clarity on what all my actions are. That’s something that has really been impactful for me recently – reflecting and planning.

Danny Johnson: Excellent and that’s huge. I’ve been focusing on the same thing and it is very powerful and helpful for clarity. Nothing is worse than going through the whole day running around putting out fires and at the end of the day saying, “Man, did I even do. The day is already over and where did it go.” You don’t even feel like you’ve made any progress. You were just kind of taken care of everything.

Marco Romero: Yeah. A big shift for me happened when – it’s very common to have a to-do list. I imagine most people have a to-do list. It’s just this long list that sometimes seems to have an infinite length and you just put all these things that you need to and you just kind of work down your list and check them off as you go. Which that in itself is powerful and can help in getting things accomplished if you compare it to not having a to-do list, but a really big transition for me happened when instead of just having a to-do list, I was planning on the particular items that needed to be done in my calendar. Basically each to-do list had a meeting. If I needed to do this, this was occurring from 10:30 to 10:45, something along those lines. By doing that, I gave every to-do item a focused time and when I started doing that, I noticed that I was getting things done a lot faster. I had a specific order in which I was doing things or a focus on when I was just focusing on a particular item and getting the most out of that time. The reflection, the planning and evolution from that basically like, once a week I set a time in which it’s like a meeting with myself where I just focus on it what are the things that worked well, what didn’t work well, and then I plan my next week in advance with all that to-do items with particular “meeting times” during each day throughout the upcoming week. I recommend that.

Danny Johnson: That’s a good idea. Have you read The Miracle Morning” by Hal Elrod?

Marco Romero: No I haven’t. I know you you’ve been talking about. I haven’t read it yet, but I have heard a lot about it and from what it sounds like, I kind of have my own like little version of it, but I definitely need to read it and incorporate it a lot more because it sounds a lot more precise than what I’m doing.

Danny Johnson: What he did was looked at what the really successful people have done like their morning routines and basically found that usually people do one or two of these six things and he said why not do all of them every morning and it’s just a powerful thing. It’s a great idea and it’s a great story and he actually had died in a car accident for six minutes and went from being told that he might not ever walk again to actually running an ultra marathon which is twice the length of marathon. It’s 50-something miles or something. It’s just excellent an interview with him, so one week after this episode will be his interview on The Flipping Junkie Podcast.

Marco Romero: Really? That’s awesome.

Danny Johnson: Yeah. Check it out next week. I’ll have him on and we’ll talk through the book and everything it’s pretty cool.

Marco Romero: Yeah. Mornings are powerful. I purposefully try and schedule meetings and whatnot in the mornings and get them going in the morning because what found is if you have a good morning it just kind of affects the rest of your day in a positive way.

Danny Johnson: Oh yeah absolutely. I was talking with Melissa, my wife the other morning. Shows always knows when I exercise in the morning because I get up before everybody else does and usually I’m done exercising before she gets up. She knows the mornings that I’m exercising because I’m asking all these questions and like go at it like a million miles an hour with all these ideas and she’s like, “I just woke up.” But on the days I don’t, I don’t. It’s just a completed 180.

Marco Romero: She isn’t ready for you when get your mind going.

Danny Johnson: Right. I asked you what you’re doing right now that’s helping you the most in your personal development or business and you had a really good answer for that. Is there is there a challenge that you have right now which is challenging you the most in your business?

Marco Romero: Yeah. I think my biggest challenge is just becoming more automated. I’ve been reading a lot of books like one I recently read is “The Four Hour Work Week” which is like an excellent read. It’s very very popular. I’m sure most of your audience has heard about it, but if you haven’t read that, I do suggest it. But a lot of the big concepts in that book are leveraging your time and he talks a lot about using virtual assistants and focusing all your time on your most productive time and all of the actions that are not as productive like, let’s say, if you take a lot of time cooking meals every single day, you cook three times a day, well instead of spending you know maybe three hours each day cooking hire somebody else to do that and the cost of that will actually be offset by the three hours you could put into more productive time and it could be a net positive. As far as automations and delegating my time more to my productive time, I’ve been trying to improve upon. That’s probably my biggest weakness right now.

Danny Johnson: That’s a good thing to work on. I can see that benefit and improving. I don’t know if I had read that book before I got rid of my lawnmower, but ___ because I haven’t owned a lawnmower in probably 10 years and I will never own one again.

Marco Romero: It’s true because the natural inclination is just go do these things yourself because you can save money, but you don’t really think about well, if it costs me an hour and two to mow the lawn, well, if I just paid somebody $50 for that hour, I can make $120in an hour, that’s a $70 positive. If you do that across the board with all of your –if you analyze your life, time you’re doing laundry, cooking, mowing the lawn – and in your business too. Instead of you being the one writing the contracts, have somebody else write contracts or something like that. It’s something to always be looking at and try on improving. I can definitely do better on it.

Danny Johnson: Yeah. That’s a good point. I just heard Andy McFarland on Justin Williams’ House Flipping HQ Podcast was just talking about taking the number of how much money you want to make in your business profit-wise for the next year and dividing that by 2,000 which is roughly the man hours that you would work in a year to determine pretty much what you would be worth per hour and I think a million hours is something like $500 bucks. Basically if you’re doing stuff that you could pay somebody less than $500 dollars for and obviously that’s got to be something that’s built up towards. You can’t immediately start doing that, but just thinking in those terms though, I think helps people sort of see where maybe doing certain tasks isn’t the wisest thing in the world.

Marco Romero: Yeah. It’s the mindset. It’s a mindset. An example for me is, “Hey, I’m a real estate agent and I can be searching MLS for my own deals and writing my own contracts and stuff, but it’s much more time efficient for me and I can make more money if I just hired an agent to do that for me. That’s a great example. If you can just reflect on what are the things you’re doing because it’s very easy to get caught up in your own habits and just the way things are. And that’s why the planning and reflecting is so important because then if you take the time to sit back and really analyze it, things will come to light that usually don’t shine.

Danny Johnson: Yes. Stopping and think through what you’re doing and how you’re acting. That’s huge. It’s something to be worked on all the time because you could fall out of it. It’s just like working out or dieting or something where you make it a habit you know and not just expect to do it for a week or something and have benefits from it for a long time. It doesn’t work that way.

Marco Romero: Yeah, exactly.

Danny Johnson: Well hey Marco, I really appreciate you being on the show. I really enjoyed this episode in talking with you.

Marco Romero: Well I think this is your best episode yet.

Danny Johnson: Oh no, it is.

Marco Romero: Well, I don’t know. Your next one with The Miracle Morning is going to be a good one. I have to tune in for that.

Danny Johnson: Definitely do check it out. We’ll have you on again on the podcast as we move through this series. We’ll be going into how to find deals, analyze deals, get money to buy houses all that kind of stuff are going to cover the whole spectrum of things. I’m sure I’ll have plenty of opportunities to bring you back on and talk about some of the other areas of expertise that you have.

Marco Romero: Alright. Definitely, I look forward to it. It’s definitely been my pleasure. It’s always great talking to you. Our conversations are always the impactful ones. We went over some technical things, but real estate is an exciting and a fun business and truly can award the many dreams that you’ve always had for your life. I’m excited to be a part of it and meeting some great people such as yourself Danny. Thank you for having me on the show.

Danny Johnson: Yeah. I appreciate that. How can the guests find you? If people want to reach out to you and talk to you, is there a way that people can find you?

Marco Romero: Probably the easiest way to contact me is just Facebook. You can look me up, marcoaromero. Marco, M-A-R-C-O and then my middle initial A and last name is Romero, R-O-M-E-R-O and just search for me on Facebook. My profile photo is actually a piece of art that’s orange and white and just friend me on there. We can keep in contact with each other and maybe help each other out in some way.

Danny Johnson: Well, great. Thanks a lot Marco and definitely will be in touch and hang out and go meet up at Starbucks again. It’s been a little while.

Marco Romero: I look forward to it. Thank you Danny. You take care.

Danny Johnson: Alright Danny, bye.

Alright. Another great episode. Marco really shared some great information and I think getting into the discussion at the end I really enjoyed because I’m getting to be more and more about you know self-development and improvement and using that to grow yourself, to grow your business and to grow in your life so that you can live the life that you want right now and get everything that you want out of life. It’s great to always talk with somebody like Marco and talk more about that. He talked about wanting to get into some of the automation and things like that and that also fits into what we’re doing with REI Mobile which is our CRM software system. We’re working really hard at a lot of automation to save time and effort for real estate investors as they are keeping track of their leads for follow up and all that kind of stuff. If you haven’t checked out reimobile.com, check it out. It’s REI which is “real estate investor” – reimobile.com.
Thanks again for listening to The Flipping Junkie Podcast. I really do appreciate you listening in and being a fan. Have a great week and be sure to tune in next week because we’ve got Hal Elrod, the author of “The Miracle Morning” which I tell everybody about – awesome book and it will really truly change your life. Check that out next week. Next Monday we’ll have that episode with Hal Elrod and we’ll see you then.

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