This is the fifth episode of the flipping houses training series we are doing on the podcast.
We’re still in the foundation stage where we help you work on your mindset and improve yourself so that you are prepared to get out of your comfort zone and make things happen.
The podcast is being released every Monday now. This way you can listen in while headed to or from that job that you are working on leaving behind. 🙂
Mark J. Podolsky (AKA The Land Geek) is widely considered the Country’s most trusted and foremost authority on buying and selling raw, undeveloped land within the United States.
He has been actively investing in Real Estate and Raw Land since 2001, and has completed over 5,000 unique transactions. Mark’s company, Frontier Equity Properties, LLC, is an A+ rated BBB real estate company.
Mark has achieved this level of success largely due to his core business philosophy – “Happy Customers Guaranteed.”
Mark is the host of one of the top rated podcast in the Investing Category on iTunes, aptly titled: The Best Passive Income Model. He is also the host of the Land Geek Podcast: Work Smart. Earn More. Learn How.
In this episode, Mark shares with us his views on when you should quit your day job and start flipping houses.
We know that everybody is at a different place when it comes to how much money they make, what responsibilities they have, families to care for, etc. so we decided to talk about 3 different scenarios for where you might be when making the decision to go full time or get started in this business.
I think this boils down to each persons situation, so let’s try to cover several common scenarios:
1. First Scenario: In college, but realizing the corporate world isn’t what you really want. You have the opportunity to live in your parents’ house. Single, so you don’t have to support a family. Don’t really have much money at all because either not working or working an entry level job. What do you recommend in this situation?
2. Second scenario: Working an entry level job making just above minimum wage and have a family to support. You don’t really have any money available at the end of each month, creating a shoestring budget for finding deals. What do you recommend for the person that really wants to stop trading dollars for hours and provide much more for their family?
3. Third Scenario:Working at a corporate job making a decent salary that is sufficient for yourself and your family. You’ve got a little extra money each month and can afford to take a little time off. What do you recommend for this person that wants to exit the rat race and choose their own hours and be their own boss?
The answers to these three questions are in the interview. Listen and enjoy. Thanks!
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Danny Johnson: This is Flipping Junkie podcast episode 21. [music] 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 interviews, 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.
Hey, guys. Hope you had a good week. If this is the first time listening to the Flipping Junkie podcast, welcome and thank you for listening. We’re in the middle of a series that we’re doing. Pretty much it’s going to cover the entire year. And what we’ve decided to do is just basically go from week to week and the progress starting with the foundation mindset, setting up your business, all that kind of stuff, and then building up into analyzing deals, marketing, getting leads, and basically trying to do everything in order. So that from week to week, the topic builds on the topic from the previous week instead of jumping all over the place from beginner stuff to expert stuff. I want to take sort of an ordered approach to it so that when you go back, you can actually look in iTunes and basically start from the beginning or wherever you want to be and listen to each one in order so that you’re actually learning what you need to learn, and what I feel is a good order to learn it so that you can really make it as a house flipper and real estate investing.
So basically, we’re on the fifth episode right now in this flipping houses training series we’re doing with the podcast. And we’re still in the foundation stage where we help you to work on your mindset and improve yourself so that you’re prepared to get out of your comfort zone and make things happen. So a lot of people, they have the idea and they hear about or see on TV shows more likely where people are flipping houses. It’s so much fun, remodeling houses and making a ton of money. And what you don’t see is where people had to grow and get out of their comfort zone and do a bunch of things to get to that point. Buying a house can be a big deal for a lot of people especially when it’s an investment and you’ve got a lot to learn and a lot to deal with getting outside of your comfort zone. So that’s what we’re focusing on right now, is the foundation stage.
We’ve done a couple of episodes now with setting goals and pillars of success and different things like that. It’s really, really important. Don’t brush the foundation part and mindset part off because you really have to have your mind right to be able to make these changes in your life and to be able to do these things. It’s definitely not something you just decide to do one day and do it well. You’ll find a lot of different things come up that you’re going to learn how to cope with and deal with, and we’re setting you up to be able to do that with these first episodes.
In addition to that, I used to release the podcast on Tuesdays. And now, we’re releasing them every Monday. And the reason why I want to do this is while you’re driving to your job that you’re trying to leave behind, you can basically listen to the podcast and learn all the things that we’re teaching from all the awesome people that we’re interviewing that have been through it all just like we have and get the input on them from the specific topics as you head to that job or leave from your job. I always listen to the podcast while I’m driving to look at houses or driving all over town. I actually would really look forward to it. So I find it’s a good time to do it. So I wanted to release them on Mondays so that… Monday morning, getting in the car on the way to work. You wouldn’t pop in the cassette, but on iTunes you play the podcast and listen to the episodes.
So I love to get your feedback on the podcast. You can do that at our Facebook group or Facebook page at facebook.com/flippingjunkie, and junkie is J-U-N-K-I-E. And also. if you wouldn’t mind, leave a rating and review and also subscribe on iTunes so that you can get each new episode as we release them. Let 2016 be the year that you bust free and design a life on your terms. And hopefully, this podcast will help you get to that.
Now today, I’ve got a really special guest on the show. His name is Mark Podolsky, and he flips land. He’s also known as the “land geek.” And he’s widely considered the country’s most trusted and foremost authority on buying and selling raw undeveloped land within the United States. And if you’re thinking, “Well, I don’t intend to do that. I intend to flip houses,” you really want to listen because it’s pretty similar. But basically, we’re really just going to be focused on when is the right time to quit your job. A lot of people when they’re getting started struggle with when to quit their day job. It’s really tempting to jump in the deep end as soon as you get started flipping houses and quit that life-ruining job, but that’s usually a very bad idea. So today, Mark and I are going to talk about—depending on the situation… So we’re going to cover several different situations that you might find yourself in regarding what kind of income and what kind of job you currently have and what we feel is the best choice and when to quit that job to go full time into real estate investing.
More about Mark. He’s been actively investing in real estate and raw land since 2001. He’s completed over 5,000 unique transactions. Mark’s company, Frontier Equity Properties, LLC, is an A+ rated Better Business Bureau real estate company. Mark has achieved this level of success largely due to his core business philosophy which is “Happy Customers Guaranteed.” Mark is a standup guy. I was on his podcast a couple of weeks ago and really enjoyed talking with him. That podcast that he has is the Land Geek Podcast, and the tagline there is “Work Smart, Earn More, and Learn How.” Mark is a great guy. I’m really glad to have him on the show, and I hope you enjoy it.
All right. So hey, Mark. Thanks for being on the show.
Mark Podolsky: Danny, I’ve been so excited to talk to you about everything because I had you on my podcast, and it was such a great interview. And I love your podcast, Flipping Junkie. It’s great.
Danny Johnson: I really appreciate that. And everybody should check out yours as well. I had a lot of fun recording that with you and found out some new things. I just think that your model is awesome, which is basically sort of the question that you asked on your podcast. It’s how other investors feel about what you do and I think… What is it? Like 99.9% of investors feel that you have one of the best passive income model.
Mark Podolsky: Yeah, the best passive income model. No tenants. No toilets. No termites. No trash.
Danny Johnson: All right. Those are all the fun things though. Come on.
Mark Podolsky: No, I know. Yeah.
Danny Johnson: All right. Well, so let’s just get started and let people sort of know a little bit about you and why and how you got started in real estate investing.
Mark Podolsky: Yeah. I kind of fell into it. It was kind of one of those weird things. I had a horrible corporate job. I was an investment banker. I worked with private equity groups doing mergers and acquisitions for mid-market companies. And so, I’m looking at companies all day long. A great company has 15% EBIT margins or higher, free cash flow. Your average company is at 10%. And I’m looking at a lot of companies that are below average. And I’m just miserable. I’m being micromanaged. I hate the culture. Very competitive. Long hours. Forty-five minute commute to work and back. I wouldn’t even get the Sunday blues, Danny. I’d get the Friday blues anticipating the weekend going by fast and Monday coming.
Danny Johnson: Well, that’s not a good place.
Mark Podolsky: It was not a good place. So we hired this guy and we started talking. He’s telling me that on the side, he’s going to these tax deed auctions, and he’s buying up land for like nothing, like pennies on the dollar. And he’s flipping them online, and he’s making 300% return on investment. So Danny, I’m looking at these companies all day long. The great companies have 15%. So I’m from St. Louis. I’m from the show-me state. I don’t believe them. So he’s like, “Okay. Let’s go to one together.” So I’ve got like $3000 saved up for car repairs, and I know nothing. Only piece of real estate I ever bought was my house at that point.
And I go to this auction. We drive around this little rural area in New Mexico. And sure enough, there’s half-acre parcels going for nothing. I bought 10 parcels that day for 300 bucks a lot. After the auction, we get the plat maps. We talked to the Chamber of Commerce. We get all the information. And sure enough, I’d get all that information. I put them up online, and they all sell within 30 days at an average price of 1200 bucks each, 300%. He was right. So I took all that money and I went to another auction in Arizona. There was no one in the room. I’m buying properties for $3, $5, $10. Nothing. Nobody wants these lots. Flipped them online and I made over $90,000 in six months on that second auction. And that’s when I said to my wife. I’m like, “Honey, I think I’m on to something here. I want to quit my job.” Guess what she said to me?
Danny Johnson: What did she say?
Mark Podolsky: “Absolutely not.” So I said, “Look. It’s going to be okay. The worst case scenario is we own land.” Because her big fear was if we spend all this money and buy this land, what if we can’t sell it? I’m like, “That’s the worst case, we own land. I’ll go get another job.” So she’s like, “Look…” At that time, she was pregnant. So she’s like, “Let’s just wait for the baby.” So I really toiled for 18 months part-time in raw land until the land income exceeded the investment banking income and that’s when I quit. And I’ve been doing it ever since, since 2001. That’s when I quit.
Danny Johnson: Nice. Yeah. So that’s what, fifteen years now.
Mark Podolsky: Fifteen years.
Danny Johnson: Yeah. And that ties in very nicely with the topic for today which is: When should people quit their day job? And I think you sort of summed it up right there with my take on it, and I think that’s probably going to be once you talk about with your take on when people should. And it’s funny that you mentioned your wife. Even after making that money, like you made and showing her that it was absolutely feasible, still you cling to the security of the job and the paycheck. And I did the same thing. I think it took me two and a half to three years part-time before I went full-time. And I was, myself, even sort of clinging to the security and just getting that steady paycheck even though it was smaller than all the other paychecks that you get from flipping houses.
Mark Podolsky: Right. It’s one to say as an outsider, “Hey, fight through the fear. Life is short.” All this kind of nice platitudes. But to actually do it and live through it, and know that, “Oh my gosh! I’ve got dependents on me.” Your wife and your children. They’re affected by these decisions. You don’t just make them that quickly. You kind of dip your toe in the water. You wrestle with that fear for a long time until you get to the other side of it. Don’t you think?
Danny Johnson: No. Absolutely. I think the question is sort of… Like Melissa, my wife. My father-in-law, her dad. Whenever we were getting into the business and everything, his question was, “Don’t you think that it could change? Don’t you worry that things could go south?” The concern that us being in business for ourselves, we would be exposed to that risk. Well, it’s kind of funny when you think about it because working for another company, depending on the company you work for, they have the same risk as well. So what you think is so secure might not be as secure as you think. But he was just watching out for us, and luckily everything went great and went better than great, but there is that concern.
Mark Podolsky: You what’s so funny about that? I’m going to play this little video for you if you don’t mind.
Danny Johnson: Go for it.
Mark Podolsky: Because when I heard it for the first time, I thought, “Oh my gosh! That is the perfect response to the in-laws, the parents saying to you.” You should do this nice kind of steady safe thing and don’t really go for it. This is Jim Carrey. I want to play this for you.
“You can spend your whole life imagining ghosts, worrying about the pathway to the future, but all there will ever be is what’s happening here and the decisions we make in this moment, which are based in either love or fear. So many of us choose our path out of fear disguised as practicality. What we really want seems impossibly out of reach and ridiculous to expect, so we never dare to ask the universe for it. I’m saying, I’m the proof that you can ask the universe for it.
My father could have been a great comedian, but he didn’t believe that that was possible for him. And so, he made a conservative choice. Instead, he got a safe job as an accountant. And when I was 12 years old, he was let go from that safe job and our family had to do whatever we could to survive. I learned many great lessons from my father, not the least of which was that you can fail at what you don’t want, so you might as well take a chance on doing what you love.”
What do you think of that?
Danny Johnson: Nice. Yeah.
Mark Podolsky: You can fail at what you don’t love. And I wish I had a mentor at that time when I was doing the investment banking thing. You can fail at this and you’re miserable.
Danny Johnson: Yeah, absolutely. No. I think that’s incredible. That was a great… What is that from? Did he give some sort of a…
Mark Podolsky: Yeah. That’s a commencement speech from some Maharishi University. He’s very into like Zen Buddhism or mindfulness meditation, that kind of thing.
Danny Johnson: Yeah, so that’s cool. I’m actually getting into more of for self-improvement and things working on myself as a big part of my 2016 goals, but yeah. So that’s incredible. Whenever you hear messages like that like there’s… Some people may have heard things like that before and didn’t let it resonate with them because they weren’t maybe at that level maturity-wise, like mature in their personal development.
Mark Podolsky: Yeah. Exactly. Look. It’s hard to kind of break through that mold. And honestly, your parents are the last person you should listen to. I’ve got three kids. And what do I say to them all the time, Danny? What do you say to your kids all the time?
Danny Johnson: Don’t do that.
Mark Podolsky: Yeah. “Don’t do that. Be careful. Be careful.” And what do they learn in school? Don’t make a mistake. You get punished for making mistakes in our school system, and it’s kind of backwards. Because in business, you got to go for it. You got to fail fast. Right? Those are the people that are moving, they’re failing, they’re adjusting, and they’re embracing the suck. When you are kind of comfortable being uncomfortable, they’re the ones that make the difference.
Danny Johnson: Because they’re growing by making those mistakes.
Mark Podolsky: Yeah, you got to grow.
Danny Johnson: And learning from them, right?
Mark Podolsky: Exactly. Nobody wakes up a seasoned investor.
Danny Johnson: Oh yeah, absolutely. It’s really easy to see when somebody is successful and to think that they got lucky, that it happened very fast for them, it happened in a matter of a couple months. With the hard work and the frustrations and the problems that arose, and the failures, you don’t typically hear about all of those.
So, let’s get into the different scenarios. What I was thinking about when I was thinking about doing this episode was basically: one size doesn’t fit all because everybody’s in a different place in their life. So I thought of three different scenarios that I want to ask you about where people might find themselves right now listening to this; wanting to get into flipping houses, real estate investment, even flipping land.
The first one being: So let’s say somebody’s, say, in college, realizing that the corporate world maybe isn’t what they really want. They’ve got an opportunity to live with their parents, save money that way, and they’re single so they don’t have to support a family. They don’t really have much money though because they’re not really working maybe or at just an entry-level job. For somebody that finds himself in that situation, what would you recommend be their sort of path to getting to where they can either quit their job or change the path that they’re taking by going to college?
Mark Podolsky: Yeah. I think that stage of life is the point where you go for it. If you look at times in history, the great geniuses—Steve Jobs, Bill Gates, Einstein—they kind of made these amazing things happen in their 20s, like mid-20s. It’s like you’re never any smarter than you are and more energetic than you are from like 24 to 28. If you talk to like Kleiner Perkins and these big VC companies, these young founders of these tech companies are typically in their mid-20s. And they’ve just got that drive and ambition and they haven’t been beaten up by life yet, right?
Danny Johnson: Yeah.
Mark Podolsky: I think that’s when you go for it. I don’t think you need money, Danny. I think you need ambition. You need drive. You need to be fearless and you just go for it. You go for your dreams. You go big and you fail big because it’s not so bad at that point. I think the reason like I didn’t do it or maybe if you didn’t do it in our 20s was: Number one, we didn’t want to disappoint our parents. Or it wasn’t even in our consciousness. We didn’t have anyone kind of guiding us. So we didn’t have a mentor in a place to say, “Hey, you know what? You should be going for it.” “I won’t be getting a corporate right out of college.” “Go for your dreams whatever they are.” “Well, I don’t know what my dream is.” “What do you like to do as a kid? What was your kind of passion there?” We’re just getting really, really good at something that you think you’d like at that point. I know that 20s, most people are trying to figure out work in that kind of time period. But I think if you’re going to really make a dent in the universe, there’s no better time in life because you can live on ramen noodles, you can have fun with your friends. You don’t need a lot of money, right?
Danny Johnson: Right. Absolutely.
Mark Podolsky: Yeah. And usually, the two things that stop people are fear and disappointing the family. You don’t want to disappoint your parents. They spent all this money or, “I’ve got debt from college. Boy, I better get going and be an adult now.”
Danny Johnson: I started when I was… I think I was about 25. But in college, I remember I knew a couple of guys that were creating a business and it was more of a software business. And I remember thinking back then, “I wonder how they’re able to do that.” I didn’t feel like that was possible for me even in college, even though I saw other people that were doing it. I just felt like they had the connections or they had something else, and it just wasn’t something else possible for me. I just had the blinders on and my path was basically to get out and get the job, and I think that really limited myself. And I’m glad after college I quickly realized that that wasn’t true, that I could’ve done… Had I just spent more time with them and talked with them and ask them how they did it, I would’ve found that that wasn’t true. All those preconceived, all those notions that I had weren’t really true.
Mark Podolsky: Yeah. It’s so true. It’s like this weird how-to barrier. It’s like you can’t do anything until you know how to do every step of it. Just do the first step. Right? You figure the next one. But if you’re young and it’s like you don’t know what you don’t know, and it kills you. So you don’t even take that first step because you keep thinking, “Well, I’m going to fail then because I don’t know how to do it.” No one knows.
Danny Johnson: All right. But it’s possible and the key there is finding the people. And by listening to this podcast, listening to your podcast, they’re sort of getting access to those people that are already doing it.
Mark Podolsky: Yeah.
Danny Johnson: You know what I mean? You’re getting all this information and realizing what is possible and it is possible for you no matter where you’re starting out.
Mark Podolsky: Yeah. Remember, Danny, we had to read books. Now, you listen to audiobooks in your car and you can listen to podcasts of people who are like amazing.
Danny Johnson: Well, I had the CDs. I had CDs that we drove our kids nuts with, that we’re driving around neighborhoods and listening to these CDs talking about how to invest in real estate.
Mark Podolsky: I think you’re a lot younger than me. I had like the cassette tape.
Danny Johnson: Oh. Well, I did have a dusty old VHS tape. I think it was Carleton Sheets or somebody.
Mark Podolsky: Yeah. Carleton Sheets was huge.
Danny Johnson: All right. So if they’re starting in college and maybe they don’t have a lot of money, what are some tips for those first initial actions? Like you were talking about, you’re saying, “Just take some of those initial actions. You might fail, but go ahead and fail. You don’t have a whole lot writing on it,” right?
Mark Podolsky: Yeah. I think that first initial action has to be find a Danny Johnson and find someone who’s doing what you want to do. And if you got to carry that briefcase around for a year, carry that briefcase around for a year and do it that way.
Danny Johnson: Where’s a good place for them to find that in their area?
Mark Podolsky: Yeah. Go to a rehab meeting, if we’re first talking about real estate. Go to your local rehab meeting and start meeting people. Start talking about your dreams and what you want to do. People want to help other people. I find that all the time. People are unbelievably generous when you ask. If you don’t ask, people don’t know. So I think if you’re in that situation where you don’t have any money but you got tons of passion and you want to start being a professional real estate investor, find the best real estate investor you know locally and—
Danny Johnson: Right. Ask other people who’s the top investor in town, right?
Mark Podolsky: Yeah, who’s the top guy in town or gal in town. How can I meet them? And how can I talk to them about my vision or my dreams? Maybe they can stir me in the right direction. Maybe I can hold their briefcase for a year and just learn from them.
Danny Johnson: Just as long as you don’t walk up to them and just grab their briefcase.
Mark Podolsky: Yeah, just don’t grab their briefcase but at least try to add some value to them too like don’t—
Danny Johnson: Yeah, and that’s what I was getting at.
Mark Podolsky: Yeah. You got to be like, “Look. I’ll make your life better being in it, and I’ll add value, in exchange through osmosis I’ll learn a lot from you.” I have a feeling that’s a real nice ego boost for those people, too, right?
Danny Johnson: Absolutely.
Mark Podolsky: They see themselves in you, and they’re like, “Boy, wouldn’t that have been great if I had someone like that too in my life?” And maybe they did and they want to pay it forward. I think this is gold, Danny, what we’re giving out.
Danny Johnson: Because some people say, “Oh, add value. Well, how can I add value? I don’t know what to do and what that exactly means.”
Mark Podolsky: Ask: “How can I add value?”
Danny Johnson: Yeah. And even other things as simple as combing Craigslist in your town for anything that shows like somebody is selling a property that has motivation, calling all those and then coming to the rehab meeting or meeting with that person and say, “I got all these leads that I found.” Or having something showing that you’re out there hustling and you’re hitting the streets. You’re talking to people. You’ve got a list of contractors that you found while driving around looking for vacant houses. Show that you’re willing to do the work before they tell you what to do.
Mark Podolsky: Yeah. Exactly. Or find out what’s their biggest pain point and then go out there and solve it for them.
Danny Johnson: I like that one.
Mark Podolsky: I did that. “Like, yeah. Look what I can do for you.”
Danny Johnson: “What’s a big time drain for you?” and then offering. Maybe they’re spending a lot of time going to Home Depot or something.
Mark Podolsky: Yeah. “I’ll be your Home Depot person.”
Danny Johnson: Right. So yeah. Awesome idea. So, let’s get on to the second scenario. Because in that first one, we’re kind of saying that there basically isn’t a whole lot of… There’s not really a job that they’re leaving, quitting their day job. So it’s sort of just jumping in and doing it. But in the second scenario, there’s probably a large proportion of people in this scenario and that’s working sort of at a lower paying job that might just be above minimum wage or just enough to support your family and your lifestyle and don’t really have much money available at the end of each month, so they might be on a shoestring budget for finding deals. What do you recommend for that person who really wants to stop trading dollars for hours and provide a lot more for their family?
Mark Podolsky: Yeah. I think that’s where the side hustle is so important. You got to manufacture hours for yourself in you’re in that situation. You’ve got to get up an hour earlier, you got to go to bed an hour later, and you’ve got to get educated almost in two spots. Number one, you got to create a more valuable skill. If you’re in an entry-level job and you’re providing for a family and you’re barely scraping by, you got to get out of that entry-level job and move up. And there are so many inexpensive ways now to create value on the side. You could do Fiverr gigs. You could do Uber. The connection economy, it’s endless. You could do an Amazon FBA associate.
I’ve got a friend. On the weekends, him and his wife, they go out with their iPhones and they scan books at garage sales for like a penny to 10 cents and they sell them online on Amazon for $5 to $500. I think they’re making extra $3000 a month. That can move the needle if you’re in an entry-level position, but that’s what you need to do.
You really got to make more money because it’s not about you anymore like that first scenario. Now, you’ve got a responsibility to your family. You have an ethical duty, you have an ethical obligation to be successful as possible for those people, and you’ve got to do whatever you can do. At that point, once you’ve got… If you’ve ever looked into a baby’s eyes, man, throw the excuses out. It’s all on you, right?
Danny Johnson: Right. Let that motivate you, right?
Mark Podolsky: Let that motivate you. You should not be in an entry-level job anymore. And if you are, get out of it and figure out how to get out of it. You got to get more education. You got to get more skills. You got to be able to create more value, and there’s millions of ways to do that. I just gave you a bunch of different scenarios. Once you’re doing that, then you go into your other side which would be more real estate education. And then, you’re going to find somebody who has more money than they have time, and they’re going to JV with you on these deals.
Danny Johnson: And JV stands for?
Mark Podolsky: Joint venture with you on a deal. So they’re going to bring in the money and you’re going to bring in the expertise, and you guys can split that and do it that way. And then eventually, as you start building up your confidence and you become more seasoned—hopefully you’re out of your entry-level situation by that point—then you can start really hopefully kind of go into where I was where the investment income is predictable enough, where you can finally say to yourself, “Okay. I can quit my job now and then do this actually in a bigger way and scale it,” so that you’re not creating another job for yourself. Now, you’re creating a business. But I think you need to have those things in place first; otherwise, I think you’re really being irresponsible.
Danny Johnson: Right. And I think basically the way I’m hearing what you’re saying—and I think it was really well said—is basically that you have to improve yourself first. You have to get to the point where you are more valuable and that you have more confidence and are willing to do and think about where you’re at and where you’re going and letting your responsibility sort of motivate you so that you always have that reason why to get out of that comfort zone, stop watching the TV all the time. It’s real easy to get home after work exhausted and you just want to veg it out. You just want to lay there, sit on the couch, and watch TV and just let your mind go, right?
Mark Podolsky: Yeah. And you know what the cure for that is? I call it the “Powerball cure.” Remember the recent Powerball, Danny?
Danny Johnson: Yeah.
Mark Podolsky: It was a billion dollars.
Danny Johnson: Oh, was it a billion? See. I just had heard it from somebody else. It was really crazy, but yeah. Wow!
Mark Podolsky: It was a billion dollars and people were lining up for the Powerball, and they’re all excited about it. Now, their odds of winning were very low, but they’re manufacturing energy by imagining. Like have a vision board. Create a vision board of you being a billionaire or whatever it is and write down goals not once a year, write them every day. “I will have a net worth of 100 million dollars.” It’s a different feeling of “I’ll get a 2% raise this year.” One doesn’t really excite you, the other one does. If you’re going to say to yourself, “I will have 100 million dollars in net worth,” you probably have more energy than the other guy or gal, right?
Danny Johnson: Yeah. Absolutely. And I love the whole “write them down daily” because what you’re doing is basically what Jim Carrey said in that clip that you played. You’re basically asking the universe and asking God if that’s your preference. It’s basically if you don’t ask for it, how do you ever expect to get it?
Mark Podolsky: Yeah. Absolutely. And do these things to give yourself more energy. Energy is limitless. It’s limitless. And here’s a great example, Danny. Remember when we met our gals and you stayed up all night talking? Where did that energy come from? Or you’re exhausted from a long day. You worked a 12-hour day and you say goodnight. Your head has a pillow, and you’re so tired. All of a sudden, half hour later, you haven’t hit REM sleep yet and the doorbell rings and it’s your best friend from school. You’re not saying, “Oh, hey, I’m so exhausted. I’m going to bed.” You’re going out! You’re hitting the bars. You’re reminiscing. You stay up all night. You’re partying all of a sudden. Where did that energy come from, right?
Danny Johnson: Yeah, you manufacture. You manufacture yourself. You get pumped and motivated to do all these things. It’s exciting. And yeah, that’s exactly what happened to me in my earlier 20s, and you can do that later in life I’m sure. And I still have to force myself sometimes to get the energy, but you choose to have it. You choose to not sit there and watch TV. You choose instead to work on your fortune, to work on your future, right?
Mark Podolsky: Yeah. Exactly. That’s why you have to have this big why, this big purpose to do that because money doesn’t make anybody happy. There’s been study after study. After like $75,000, your happiness threshold is very incremental. If I give you a billion dollars tomorrow, Danny, you probably won’t move the needle that much in your life. You get the big car. You get the big house. You’d probably go on a couple nights’ vacation and you get a jet. And then what? Right?
Danny Johnson: Right.
Mark Podolsky: So this actually happened to my mentor. He sold his company for 360 million dollars. I met him for coffee and he was miserable. And he’s like, “Mark, I’m miserable.” And I said, “I’m so excited for you.” He’s like, “I’m absolutely miserable.” “And why do you think you’re so miserable?”
Danny Johnson: Because he didn’t have anything to work towards, right?
Mark Podolsky: Yeah. He climbed the mountain. He made it.
Danny Johnson: So that’s like they say for astronauts. After going to the moon and then coming back, they had sort of reached the pinnacle and then they were depressed.
Mark Podolsky: Yeah. So he started another company. And now, he’s happy again. He needs another mountain to climb. It’s like when we’re kids. We don’t stop playing with Legos after we complete the Lego. Like, “Okay. Look, mom and dad. Look what I made.” Then they don’t go out and buy themselves a candy bar and hang around for two weeks or whatever it is. Let’s go do the next project.
Danny Johnson: Yeah. And this all boils down to mindset. So getting your reason why and determining where do you want to be exactly, very clearly, not just “I want to make a ton of money.” You got to get down to the very specific why and usually it’s for the family. And to have the time, the freedom to be your own boss, to go on vacation for as long whenever you want. All those things, and write them down. Look at them daily. Let that motivate you to at least cut down a lot on watching TV and spending that time maybe driving around neighborhoods, looking for vacant houses that are rundown to get that start.
And then, trying to stay on task a little bit more about when to quit the job. So let’s talk a little bit more about for the person that isn’t making much more over what they spend every month, trying to support their family, have obligations. Now, making that transition. So let’s say they’ve done a little bit and, say, they maybe flipped a couple houses and they’re tempted. They made the big paychecks, but they’re not real consistent with their marketing. They’re not real consistent with anything else. Where do you feel is the right opportune time for them to walk away from that job? How can they decide on that?
Mark Podolsky: That’s a really good question. I think that person has to have systems and processes in place and a team in place where they’ve got something predictable. If it’s one-offs, that’s not a business. So a business has some predictable generating revenue and a business should be able to operate without you. Otherwise, you should create another job for yourself. So I think as you scale and as you’re getting more deals under your belt, you start looking back, “Well, how do I do this? And how can I do it so it’s not me doing it.” And having that discipline. So again, that becomes your focus, is doing more deals. If you’re a deal a month, “Well, how do I get to four deals a month? And what does that look like? And where does that come in to play? And how do I do that? And then, once you spreadsheet that out and see, “Okay. After three months, I did 12 deals.” And it becomes more predictable and more like a machine, well then you save all that money and you start really creating a plan. So you’ve got to have that plan at that point. It just depends on your finances and your overhead and what you want to do.
Gosh. I remember listening to the editor of Wired, Kevin Kelly, interviewed. And he said, “Most people, they really don’t need a lot of money as they think they do.” And he said, “The happiest I was in life was when I was backpacking through Asia, and I was living on like rice and beans.” And he was living on like three bucks a day. And he said to himself, “If it all went to hell, I was pretty happy backpacking through Asia on three bucks a day.” And he’s like, “And if I had kids…” And he was saying over his kids. “You know the toys they like to play with? They like playing with the pots and pans in a box. They didn’t need toys. They can make their own toys.” So he didn’t think that the kids needed that much. And his spouse, if they were seeing eye to eye on that, I don’t know. I think he was on to something. I almost think that there’s an inverse proportion to the size of your house and how happy you are.
Danny Johnson: Wow. That’s a good one.
Mark Podolsky: If you ever saw that documentary about the Queen of Versailles, and time-share guys are building the biggest house in Florida. Did you see that?
Danny Johnson: I didn’t see that. No.
Mark Podolsky: I don’t know, but he’s miserable. And it’s like 2000… His wife hates him and the kids hate him. He’s screaming at them, “Don’t turn the electricity on.” So I think that at that point, keep your overhead low and figure out, “Okay. What really makes me happy?” Because again, I don’t think the stuff is really going to make you happy. I think that’s all ego, right?
Danny Johnson: Right.
Mark Podolsky: I know some people who are so poor, all they have is money. Do you know some people like that?
Danny Johnson: Oh yeah. I think that goes in really nicely with the next scenario which is the third scenario of the three. And that is somebody working a corporate job making a decent salary sufficient for themselves and their family. They’ve got some extra money. They can afford to take a little bit of time off. What do you recommend for them? Because for them, it’s maybe a little bit more tempting to exit the rat race and just go out there and make a go of this because they have a little bit of money saved up. I think that ties into that nicely because of the whole… Even having more by deciding that you don’t need as much as you have. But go ahead, and what do you say to that?
Mark Podolsky: Yeah. If you’re sitting in a cubicle right now at Procter & Gamble making $85,000 a year and you’re miserable, quit today or at least have a plan for it because guess what? Worst case scenario, you dust off the resume and you get another Procter & Gamble job in another cubicle. It’s just a different headquarters. If you’re valuable enough to be in a big corporate cog in that wheel, you can do that again. So it goes back to that Jim Carrey thing. “You can fail at something you hate.” But if you’ve gotten to that point where you’ve got a big enough skill set where a big company or a small company is paying you a nice salary, I say go for it. Life is short. Why be unhappy?
Danny Johnson: Right. So you wouldn’t even recommend some part-time education and maybe doing some deals first?
Mark Podolsky: No, I would but I would really be aggressive with it. My fear at that point would kind of be real, real tamped down compared to… So my fear would be really tamped for scenario one and scenario three. Scenario two, I’m scared for them because they have so much to do. One and three, I think they should fight it and they should go for it. And if they’re going to fail, fail big. That’s what they should do. I wouldn’t fail small from either one of those scenarios.
Danny Johnson: Right. So with a little bit of money, what’s a quick way maybe to getting those first deals under their belt so that they can feel more comfortable and know what they’re getting into? Because without having done some deals, there’s still a lot that probably needs to be learned through actual action. So maybe what are some of the quick steps to putting some deals under your belt as quick as possible if you’ve got some money?
Mark Podolsky: If you’ve got some money, then you got to figure out the business fast. Find a Danny Johnson. And again, have a benchmark and start going to rehab meetings. You got to get educated, don’t you? You got to kind of know what you’re doing and then start doing deals and just start taking… I would just start taking massive action on the weekends in the morning, at night, and have this plan. And I would give myself a deadline. I would say “In the next 90 days, I’m going to this many deals and do it.” Does that make sense? Do you like that?
Danny Johnson: No, it does and yeah –
Mark Podolsky: Do you think it’s too aggressive, Danny? Am I giving irresponsible advice? Do you think it’s irresponsible?
Danny Johnson: No, it’s not. It’s nice because it’s not the “be timid”, “take a little step here”, “take a little step there.” As long as you set the goal and know that it’s very well possible to do it within several months and definitely less than a year to start getting calls for leads, doing some marketing, getting some stuff, working with somebody, maybe partnering with somebody that’s got more experience that can mentor you. And then, just like going all out, finding what works and then scaling up.
Mark Podolsky: Yeah. Exactly. I agree. I don’t know, man. I think that it’s tough to kind of… Everyone’s situation is different, but I do think that in general if you’re comfortable, you should be uncomfortable. I’ve done over 5000 land flips and I’m still anxious all the time that I’m not doing more, I’m not learning more. I’m always trying to learn more and get better at what I’m doing. And I think for the people in scenario three, they should really watch this documentary, Jiro Dreams of Sushi. Did you ever see that?
Danny Johnson: No, I haven’t seen that.
Mark Podolsky: Oh my gosh! This guy is 88 years old. He’s got a little sushi place in a subway in Tokyo, and he is the only three-star Michelin winner in Japan. He’s renowned as the best sushi chef in the world. There’s a very simple thing, Danny. He’s taking and slicing a little bit of raw fish and he’s putting on a little thing on the rice, a little wasabi. And yet when you watch him do it, he’s constantly trying to get better every single day and he loves it. He wakes up early. He’s 88 years old. His poor sons, he won’t let them take over the business. He’d have to have a heart attack before he’d let his son go to the fish market. He’s like 70. He loves it, and he’s never satisfied. He’s got that fire in his belly. He doesn’t know where the pinnacle is, so he just keeps working at it day in and day out.
Now, if we apply that to real estate, then that means that you’re constantly trying to grow and improve. You’re never comfortable. You never just sit back and like, “Oh my gosh! I just closed a deal and I made $3,000 on that house flip.” Then, you should be like, “Hey, well, how can I make $90,000 next month?” and the next three house flips.
Danny Johnson: And that’s a good way to gauge things because people that are maybe stuck in analysis paralysis where they’re learning, learning, learning but not taking action. If they do that simple test with themselves that you said. If you’re not uncomfortable, you’re not doing enough. You’re not doing the right things maybe.
Mark Podolsky: Yeah. Exactly. And it’s okay to make mistakes. You’re going to. I make mistakes all the time, but you got to learn from them, but that’s the thing. I think if you’ve got analysis paralysis, it’s tough. That’s a tough one to do in business because it’s never going to be perfect.
Danny Johnson: Yeah. You got to let go. You got to take some risks, right?
Mark Podolsky: Yeah. And it kind of goes back to the beginning of the conversation like we’re kind of all brainwashed from school like, “Don’t make a mistake, you’re going to get A.”
Danny Johnson: It’s funny that you said too where you still have anxiety because I still have anxiety. We’ve done hundreds of deals, and I think that’s true for most people. It’s sort of a risk. It’s just a very well-managed risk and we keep learning but that keeps us fired up and keeps us going, right?
Mark Podolsky: Yeah. Gosh! We’re in a market. The market goes up. The market goes down. There’s lots of variables in business that we don’t control. So it’s scary out there. I always talk to my friends who have a job. I’m like, “What’s it like? What’s it like when that money magically goes into your account?” And they’re like, “I’m actually using my time to get that money.” I’m like, “Yeah, but it magically comes in.” You didn’t have to do anything. I mean, obviously they had to do something. But in my head, it’s like they’ve got this safety net that we don’t as entrepreneurs. We only eat what we kill in a way which is scary, but I love it.
Danny Johnson: Yeah. That’s a lot more adventurous. So I think that we can end here in the discussion. I think it helps with people to determine when to quit that day job. And I think the consensus basically is, if you’re in a scenario where you don’t have a lot of responsibilities already and you’ve got some money and some education or something like that or a way to get back into having a well-paying job, then go all out. Get educated. Do some deals first. I never ever recommend people quit any kind of job that’s providing money to live on if they hadn’t even done a deal yet because you don’t necessarily know exactly what all could take place or how it actually works or whether you even enjoy it. You might like the idea of it. But when you get into actually doing it, it might just not be for you.
And if you’re in maybe the second scenario where you don’t have a high-paying job and you’re just barely getting by for you and your family and you do have a family to support, then like Mark said, you’ve really got to become more valuable for yourself to up your income and work at it from that angle so you do have something to fall back on a little bit. Would you say that’s correct, Mark?
Mark Podolsky: Yeah. Absolutely. And at that point, you got to get real serious about life. Louis C.K. struggled as a comedian his whole life until he had children. And he was like, “Holy cow! I’d better get it together.” And he did.
Danny Johnson: And the rest is history.
Mark Podolsky: The rest is history. And now, he’s Louis C.K. When I say the name, everybody knows him, right?
Danny Johnson: Right.
Mark Podolsky: But until then, you didn’t know who Louis C.K. was.
Danny Johnson: Right. Well, I really appreciate you being on the show, Mark. I think the audience got a lot out of it. Where can people find you? If people want to contact you, get in touch with you, where can they find you?
Mark Podolsky: So I think the best place to go is thelandgeek.com. And they can always listen to our podcast together. On my podcast, the best passive income out of podcast on iTunes as well.
Danny Johnson: All right. Definitely check it out. And I will have links to those things on the show notes page which is at flippingjunkie.com/21. You’ll find show notes and then links to Mark’s website and everything. So thanks again for being on the show, Mark.
Mark Podolsky: Oh gosh, Danny. Thank you. I’m just thrilled and honored to be able to talk you again, so thanks so much.
Danny Johnson: Awesome. Well, have a great day and we’ll definitely keep in touch.
Mark Podolsky: All right. Sounds good. Thanks, Danny.
Danny Johnson: Yup.
[music] All right. Thanks for joining us this week in listening to the Flipping Junkie podcast. I really, really appreciate it and if you would subscribe on iTunes so that you can listen in next week and every coming week. On Monday, we’ll be releasing a new episode and we’re moving right now through the foundation part of the series on flipping houses. So make sure that you subscribe.
In this podcast and my being able to have the time to do it is made possible by our own flipping business but also by our real estate investor websites at leadpropeller.com. If you’re looking to market for motivated sellers and you want to be online and have a web presence, we make it very easy to do so with our real estate investor websites. We have this nice feature that allows you to get a text message as soon as somebody submits a form on your website. And what that allows you to do is to be able to contact them right away because you know immediately as soon as they click the button to submit the information to you. And then, you can call them. And basically, what that does is allow you to avoid a lot of the competition because you can set an appointment with them, talk with them, and help them to feel like they’ve accomplished what they set out to so they’ll be much less likely to contact other people in your market. And you will be much more likely to be the only one going over there to look at the house and make an offer.
And then also, be sure to check out our CRM software system for real investors that leads from your leadpropeller website. You can go directly into and you can find that at reimobile.com. R-E-I for real estate investor and then mobile dot com. And that’s currently in beta. Check it out. We’ve got a lot of cool things coming with that. And with LeadPropeller, we’re constantly making improvements and changes. So be sure to check those out. Thanks again for listening and have a great week.