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

Transcript

[Mattias]
Welcome to the REI Agent, a holistic approach to life through real estate. I’m Mattias, an agent and investor.

[Erica]
And I’m Erica, a licensed therapist.

[Mattias]
Join us as we interview guests that also strive to live bold and fulfilled lives through business and real estate investing.

[Erica]
Tune in every week for interviews with real estate agents and investors.

[Mattias]
Ready to level up?

[Erica]
Let’s do it.

[Mattias]
Welcome back to the REI Agent. This is Mattias here. I am drinking from a fire hose.

I am incredibly busy. Spring has sprung. The time of recording is the end of March and I am writing offers.

I’m getting listings together. A lot of different activity, which is great. I know that there are markets that are not doing as well.

So I’m thankful that things are still doing well here. I don’t really know if there’s signs of our market slowing. It’s, you know, seems to still be a strong buyer’s market.

We might not have seen, sorry, seller’s market. We may not have seen a big swing in housing prices as others did or quite to the extent. And we definitely did see a big swing up through the pandemic, but maybe not as extreme as it was in other markets.

So we’ll see, we’ll keep getting while the getting’s good. But I’m gonna keep this one short so that I can get back to it. Erica is still in recovery.

We have from her meniscus surgery at the time of this recording. It’ll be two weeks tomorrow. And she is also with our daughter who is on spring break.

So we are still trying to work out how we can get her into this podcast somehow, if we can have her record a different space or if we can maybe move our setup back to the dining room table as it once was. We can do some back in the day for nostalgia purposes. But you know, things are frustrating when you are limited in your abilities.

From her end, she feels very limited. I can only, you know, do so much. Everything you wanna do, you have to kind of push a cart around with crutches.

And we have three demanding kids and a household that, you know, doesn’t, yeah, it just doesn’t run itself. And I, again, have been very busy. So it’s just been kind of a hectic time.

But we’re in a much better place than we were a week ago. And so we’re thankful. We had a really incredible community show up for us.

And, you know, we are so grateful for that. Like I said, we’re gonna keep this one short and sweet so that I can handle a bunch of things. But we have a great guest today.

We have Sarah Bratcher. Sarah is a bookkeeper. She is licensed CPA, but really does bookkeeping.

And she’s a real estate investor. And her mission is to help people understand this world a little bit better. We get into a bunch of different things.

We get a little into the weeds with some tax strategy. Again, all this information you need to run by your actual professionals because they understand your situation. They understand the tax law much better.

But there might be some ideas of how you can get a little bit fancier in the future if you’re not there already. So without further ado, here’s Sarah. Welcome back to the REI Agent.

I’m here with Sarah Bratcher, CPA. Thanks for joining us, Sarah.

[Sarah Bratcher]
Thanks, Mattias. Thanks for having me.

[Mattias]
Hey, Sarah. You told me a little bit about your story off air, how you kind of got into real estate. But break that down for us.

What kind of got you to start investing and what you’re doing now with your businesses?

[Sarah Bratcher]
So I started out in a public accounting firm doing taxes and realized that that did not spark joy for me or just really burn me for longevity. I was like, yeah, I can’t do this forever. And so I ended up working for a real estate developer slash investor.

And when he was really small, he had about 20 personal investments and he built maybe 20, 30 houses a year. And I got into his office and as kind of a controller, he was still doing most of the CFO stuff. I was the controller and helping him figure it out and how to grow his business and everything.

And yeah, in those eight years, we put in SOPs and we got everything in place to really grow his business. And I don’t wanna say his financial status, but he had over 1,000 personal investment properties at the end of that eight years. And he was building about 500 homes a year at the end of that.

And I had kind of grown myself into a manager position, basically. I was the CFO, I did cashflow projections. It was always, in the real estate world, we’re always juggling that cash and doing all that.

And I was kind of doing the higher level stuff like that. And I just, I started to kind of feel burnout in, I wasn’t passionate about that anymore. I wasn’t doing hardly any accounting.

I had trained the accounting department to do their jobs. And it was all a higher level management stuff, putting out fires, managing people, stuff like that. And so my husband and I looked at our own personal situation and we were just like, we were so extended on credit cards and personal loans.

And we were like, how did we get here? Because we did really well for ourselves. And so we spent two years paying off all of our debt.

It was 154,000, we did Dave Ramsey’s program. It was $154,000 just paying it off so we could change the trajectory of our lives. And we knew we wanted to invest in real estate and do that piece of it and just kind of everything else.

We were just listening to all the podcasts and trying to figure out a new direction for life and everything. And I kind of did things backwards. I ended up quitting my job and before we had our first rental property and before I had started my new business.

And just kind of, but I had to leave to be able to spread my wings some more and have the capacity to do that. So I had the passion to help get back into accounting and the financial statements. And I love helping agents, brokers or investors just use their financial statements to help grow their businesses and make big financial decisions from their past and seeing what projects do great and what areas they could put more money into.

And then, yeah, my husband and I started buying rentals and yeah, we’ve kind of grown it and it’s working out. So we’re just keeping on with the moment.

[Mattias]
That’s awesome. I laughed there for a second because you said only 20 personal properties and only building like 20 or whatever houses a year, 20 to 50, which makes sense. Then when you went into what he was doing then by the end.

But to anybody listening, wanting to start that sounds probably like an amazing place to be. And, but yeah, I mean, it’s amazing what you can scale when you start delegating and sounds like you really just wanted to take that knowledge and that ability to apply it to your own, your own portfolio instead of somebody else’s.

[Sarah Bratcher]
Yes, and to be able to take that knowledge and help other clients out, like, hey, we’ve already tried it. We’ve already seen what works and what doesn’t and how we can look at the financials to make those decisions. Because when you’re running a business that big and scaling that fast, you have to quickly learn how to manage it without being boots on the ground and on every single project and everything.

And you gotta trust your managers and the people you’re hiring to make those decisions. And yeah, we would come together for an accounting meeting every month and everybody would dread it. But everybody also knew it was the most important meeting of the month because that’s where the main decisions were made and hashed out and all the phone calls and the five minute meetings throughout the weeks and everything.

Those just kind of bog people down. But when we sat down and looked at the financials and saw the big picture of the whole company, that’s where the magic happened. And I wanted to help other people do that and kind of give them a quick start that they didn’t have to do all the stuff that I had helped fail at to get to that success.

[Mattias]
Yeah, that makes a lot of sense. I wanted to also go back to the Dave Ramsey thing. I wanted to, we also did the Dave Ramsey plan to get out of debt when we first got married.

We were, man, what were we at? 120, maybe 120 back in 2013, 2014. And that took us a while.

We weren’t making very much money. But I just wanted to more, I wanted to say, I think oftentimes when you get into real estate investing spaces and a lot of maybe business and finance, personal finance stuff, I think Dave Ramsey gets crapped on a little bit. I think people, and I mean, I think that there is a place, and if you are in a situation where you have a lot of debt and you wanna get that behind you, I think it’s a really good option for a lot of people just to get super focused.

And it’s not, it’s more behavioral, psychological than it is financial. Actually, financial or mathematically sound, right? Like you’re not going after the highest interest rate first.

You’re going off this over the smallest loan, taking that out so you get some momentum, so you start feeling like you’re making progress. And I think just if anybody’s listening to this that is in that kind of situation, I would say it’s not a bad starting point. And you may find that you can live that way and live the Dave Ramsey method forever, but I think then you can kind of also graduate and maybe start looking at things a little bit differently.

Like maybe you don’t have to always get a 15-year mortgage, especially with the interest rates where they’re at now. For example, I mean, how do you feel about that, that Dave Ramsey in general, and just kind of, are you still kind of following that methodology or where are you all at with that?

[Sarah Bratcher]
I know, so I had started a debt-free Instagram account when it was happening. And it was the hashtag debt-free community. And there was a bunch of people and I documented our debt payoff.

And it was like, I didn’t have anybody personal on there because we were putting actual numbers and it’s all archived now. But it was always a huge discussion about Dave Ramsey and his politics and his opinions. He’s forceful on it and everything.

[Mattias]
Very strong opinion.

[Sarah Bratcher]
I think, yeah. But I think you have to be that way when it comes to those financials. You need kind of that harsh black and white.

And I remember it always being a huge discussion about maybe step one being only $1,000. And it’s like, dude, we were $154,000 in debt and we were making double six figures a year and we couldn’t afford groceries because our credit card payments were so high. We had just, everything kept going up and the credit card debt kept going up faster because we thought we deserved it and all the fun stuff that happens in life.

And yeah, it took us six months to save up that $1,000. Could that $1,000 save us from a literal catastrophe? Absolutely not.

But the baby step one is just, like you said, the mindset to get you there and to get you over that hump so you can save $1,000 and then go from there. But once, it took us six months to save $1,000 to get us out of that hole. But once we had that, less than two years later, we paid off $154,000.

It’s just the momentum. It’s just that mindset shift to get you out of a consumer habit to a content habit and abundance. And we’re always looking for abundance and joy and all that and it’s there.

And by no means, like this was six years ago. By no means is life easy in my financial world because I did all that. It is still hard.

I still have to make a decision daily. Do I want to be content or do I want to be back in credit card debt? I would love to be able to do all the fancy vacations and everything that I think I can afford.

But as business owners now, we have to have higher reserves on the other side because things come up always. So we have to be careful about it. And as far as do we follow Dave Ramsey’s baby steps?

No, not really. We leverage our rentals and some parts of our business and everything that have an asset backed to it. But yeah, we’ve kind of found our own way in the world.

I absolutely think his baby steps one and two are good. And I also agree with him that you should put on your oxygen mask first before you start saving for your kids’ colleges and all that other stuff. But besides from that, will we ever be fully, truly debt-free?

We kind of have that goal, but it’s not the gazelle intensity that we had paying off the consumer debt. Like we said, everything’s leveraged. There’s assets backing it.

There’s income paying that debt off. And we feel we’re in a good balance now. It took us a while.

And yeah, we still have to budget every month because my husband and I are both spenders. We love, and we like to spend on other people, not necessarily even ourselves. It’s more like we want to treat people.

We want to show our love by spending money on them. And we give so much to charities. And sometimes I’m like, oh, we got to back up.

We still have to pay bills here and things like that. So yeah, we still have to budget. We still have to watch our money habits and everything.

But we’re in a better position mindset-wise and financial-wise than we were many years ago. So yeah.

[Mattias]
Yeah, we did about, it was I think less than three years, around three years and around 120-ish. We started off making around like 60 or 70,000 when we started that process. And it jump-started my career for sure in real estate.

And so there’s a lot to be thankful for. And I think we’re in the same boat. We’re trying to definitely not have that consumer debt.

But on the same token, when I refinanced our primary residency, we got like a 2.6 or something like percent interest rate. And I was still in my head, I don’t know, I want to make that just, I just want a bare minimum. I just want to borrow the bare minimum.

And like the lender’s like, you want to borrow more? Like we could see if we can get you a little bit more based on the appraisal. I was like, no, no, no, I just want to, and now I’m like, dang it.

What would I do for that, for capital at 2.6? That’s amazing.

[Sarah Bratcher]
Yes, I totally agree.

[Mattias]
Well, let’s get into the accounting a little bit and to the bookkeeping. So we, my wife, and we can talk about this too. You said you have children as well, right?

[Sarah Bratcher]
Yeah.

[Mattias]
So we have multiple caps, we have multiple businesses and Erica was kind of always the money person, wanting to do the budget, wanting to do the accounting. And she kind of always helped on that side with the businesses. And it just got to a point where it was like, we can’t, we have multiple partnerships for flipping houses, we have multiple rentals, we have all these different bank accounts for different LLCs and all this stuff, and it just gets so complicated.

And we finally, we got a bookkeeper on top of our accountant and it has just been incredible, it’s so much nicer. And I have a friend that does more than me and he has not yet gotten a bookkeeper and he is a complete mess every year getting ready for taxes. I’m like, dude, stop having this folder of receipts and all these things for each property you flipped or whatever, and just start handing that off to somebody.

Come on, you make enough money. Yes.

[Sarah Bratcher]
Yeah, I think when people start a new business or buy their first rental property, it’s just like five transactions a month. And it’s like, okay. And then things kind of slowly grow and grow and grow until it is very overwhelming.

And then people kind of get, they don’t want to talk about it because they’re behind and they’re embarrassed and all that other stuff. And yeah.

[Mattias]
It’s like the frog.

[Sarah Bratcher]
It gets kind of.

[Mattias]
It’s like the frog in the pot of water that starts slowly boiling. They don’t learn to jump out.

[Sarah Bratcher]
That is such a good analogy. I’m gonna have to repeat that one. That’s exactly how it is.

And someone recently on Instagram was kind of making fun of me because I talk about DIY bookkeeping. Real estate investors like to DIY their rehabs and I want to help them learn how to DIY their books. Everybody should outsource their bookkeeping.

And I am a huge proponent. I love Dan Martell’s Buy Back Your Time. And all the podcasts tell you, outsource, outsource, outsource.

And I am 100% on that myself. We outsource as much as we can. But when you have one property, it’s not.

I mean, even if you find a good $197 a month bookkeeper, it’s still a lot of cash flow you’re eating up. And I also think that as a business owner, you need to know kind of the basics of the bookkeeping because when you do get 20, 30 rentals and you’re quickly looking at those financials every month or maybe even once a year, we don’t always look at them as deeply as we can, you still kind of need to know some basics of what your bookkeeper’s doing. Not because they’re not meaning to be corrupt, but typos happen, errors happen, things happen, and they aren’t in your business.

So they don’t know exactly 100% of what’s going on. You may have forgot to relay one small piece of information and all this other stuff. So I feel like when you have one property or less than five properties, it’s a good time to really kind of dig in and see the basics of it and learn it yourself before you have the cash flow to outflow it.

And if you’re a real estate agent and you’re getting those 1099s and you’re spending your marketing money and all that other stuff, it’s a good thing to do it yourself for a little bit to understand how it is before you outsize. A good balance of, I think life is a good balance of both there.

[Mattias]
No, I’d agree. That makes a lot of sense. And certainly a rental is a different kind of animal than like a flip, especially if you’re running into multiple partnerships and that kind of stuff.

There’s different levels of intensity with either one. But I agree, I think you do need to have a good grasp. I think Erica is still pretty involved with the bookkeeper going back and forth and figuring things out.

And she does have a pretty good grasp on it, but it just makes it so much easier for her. She’s just so much more relaxed. And to that point, we have three little kids and it’s just chaos all the time.

And we find ourselves just wanting to outsource more. We’ve tried to make our lives better and simpler or have the ability to maybe retire early or whatever with this stuff by investing. And now our life is so complicated and confusing.

So we gotta get those people in place that kind of help make it feel less chaotic. And that bookkeeper is a great example of one thing that’s greatly improved our life.

[Sarah Bratcher]
Yeah, I think, yeah, the podcasts are full of ways to outsource and even like housekeepers and other pieces of it and everything. But at the end of the day, it’s still your life, it’s still your business. And you still have to, well, like a property manager, like you hire a property manager and if they happen to get a bad tenant in there, you still have to make that monthly mortgage payment and you’ve still gotta find those resources and everything.

And so outsourcing to bookkeeping is, you still have to make those high-level accounting. You are still the head accountant of the company and you still have to help make those high-level decisions of are we gonna do a cost segregation? And you talk to your tax strategist about it and if you wanna manage all that together.

So it still ultimately comes down. On the IRS, if they were to audit someone, it goes to your name, not the bookkeeper’s name. So you still need to have a grasp of what’s going on in your bookkeeping and doing all that other stuff.

So, and my mission this year is kind of to help educate people on just small terms and why things are the way they are. And I think there’s a lack of education out there. So I’ve been trying to put out some more podcasts of my own and YouTube channel just to try to get people more familiar with accounting and accounting terms so it’s not just like, oh, and piled up, ready to explode during tax season.

[Mattias]
It’s a good point. I mean, like you’re really, you’re kind of becoming a manager when you would hire somebody like that, when you outsource. You have to have a good understanding what they’re supposed to do and make sure that things are going smoothly with it.

So yeah, that’s a great service you’re offering people for sure. What would be some, I mean, you mentioned cost segregations. I think that’s something that is not well understood amongst a lot of agents.

And I think the power of those are huge, especially for a real estate professional. You wanna talk about that a little bit?

[Sarah Bratcher]
Yeah, so, you know, a cost segregation is, it’s a hot topic in real estate investments right now, especially with the potential of 100% bonus depreciation coming back and everything. And while I am a CPA, I don’t actually physically do taxes. I don’t, there’s so much more in intricate details that go into actually having to that.

So absolutely talk to your tax strategist or your tax preparer about, you know, what’s best for your circumstances. But, you know, a cost segregation just helps you ride off those expenses quicker, especially if you have a W-2 income still coming in and you need to offset some other income somewhere. And that there’s so many, you have to be maybe a real estate professional or you can utilize the short-term loophole.

But it basically just speeds up the losses you can take for the, you know, actual property that you’re buying. It segregates the cost, like per item, like paint. Instead of amortizing like the whole building and improvements over 27 and a half years of life, it breaks it down into smaller increments, like, you know, paint may only be a five-year asset.

So you can depreciate over five years or, you know, get the 100% bonus depreciation from it, whether, whatever the tax rules end up being this year. I don’t know that anything’s gonna come out in the next couple weeks before that, but they’re still hopeful that it might change it quickly. But yeah, but before you get to the cost segregation, I wanna make a point here also.

I feel, I mean, I am a little biased because I’m a bookkeeper, but I feel that bookkeeping is your number one tax strategy because you need to know what financial position you’re in before you can really start, before you know, you may already be operating at a loss and you may not need that cost segregation this year because you already have those losses for some, you know, unforeseen reason, you know, whatever it may be. If you’ve had a flip go bad and you have, you know, $20,000 in losses already, and, you know, you may be able to, and that’d be more active income, but getting in the weeds here, but really the bookkeeping piece itself tells you whether or not you need, what you need to utilize a tax strategy. I mean, you could be in a position that, you know, you don’t need to spend thousands of dollars to get extra, you know, tax strategies in there when you’re already kind of operating where you need to be before that.

So that’s kind of my big thing is, you know, bookkeeping is the number one tax strategy because especially if you’ve already hired a tax strategist, get your bookkeeping up to date before you go into that meeting because they’re gonna need to see, you know, kind of your big picture of where you need to, where you are and where you need to be, so.

[Mattias]
So something that people would definitely need to talk to their accountant about before exploring, but something that I’ve heard that I thought was really interesting that could be, you know, talk to what you’re talking about is if you have like a year where you’re really, you are operating at a loss, if you do have a negative or very low taxable income for a year, you might, you know, have that from, you know, big expenses, being able to depreciate, things like this, the bonus depreciation that we’re talking about could all contribute to this, right? I’ve heard about people actually changing their IRA into a Roth IRA at that kind of time because I think you have to usually pay a tax on converting it. And I think that at a loss would then allow you to do so.

So, I mean, again, check with your CPAs. And the whole point of that is, is then you could, in theory, I mean, you could use your Roth IRA in many different ways, but you could also, you know, invest in real estate with it, with a self-directed IRA, and then that would be tax-free going forward. And so that’s why it’s important to know where you’re at and then have a tax strategist actually, you know, advise you as to what the best moves are.

[Sarah Bratcher]
Yeah, no, absolutely. And there are some amazing people out there educating on the self-directed IRA. I always refer to Karen Hall with U Direct Services for the self-direct.

She just, I think, produced a book with bigger pockets, but she has some amazing information in there because I’m in the depth of it. We’re trying to roll over an old 401k into a self-directed IRA, and it is a lot of information to soak in and to figure out all that. Yeah, we’re trying to do that to do some, you know, make some bigger moves in our real estate portfolio as well.

My husband’s about to be done with his W-2 job, so we’re looking at doing some bigger things with that, and he’s gonna kind of do, go all in on that, and I’ll still be doing my bookkeeping, and then he’ll manage all of that. But yeah, we are knee-deep in all the self-directed IRA stuff right now because there are so many good ways.

[Mattias]
You can do so much.

[Sarah Bratcher]
Yeah.

[Mattias]
You can really do so much. I haven’t really gone into that as far as me actually doing it. And there’s a couple reasons there because I think, for one, I think there’s a, you know, I’d like to have a little bit of balance with stocks and stuff like that.

And two, I can’t use that money. Like, if I flip a house normally, I could use that money. I can decide where it goes.

If I get a rental, if I get cash flow, all that kind of stuff, I can use that money, and you know, I know that eventually that will be great, but I also kind of love that freedom that comes along with real estate investing as opposed to, like, stocks. And a SEP IRA is what, you know, things that I get pushed to do or have done in the past since I’m running an S Corp for my real estate sales. The SEP IRA is definitely something that can make a lot of sense for a lot of people, and it’s a great, I’m not saying it’s a bad vehicle, but again, I’ve kind of decided, well, I’d rather, you know, buy a property than maybe do a cost seg on it and kind of get better tax benefits, maybe, in theory, than I would if I, you know, just did the SEP IRA.

So, yeah, it’s a complicated world out there. That’s why we hire professionals.

[Sarah Bratcher]
Yes, and that’s why there can be so many podcast episodes about it, because you can go down one rabbit hole for 30 minutes and still not touch a whole space over here of how someone else has used it, and it’s just, it’s amazing how creative people get for it. And, you know, I have a CPA, and I am helping my clients on the daily, and I’m still, like, untapped into so many. By the end of this year, I’m going to be a self-directed IRA guru, hopefully, because we have another tax situation coming on, and we are trying to utilize that to purchase so we can do the cost seg and decrease some other income from another place and trying to balance it all out.

So, yeah, we are learning by fire this year in all of our investments and everything, so, yeah.

[Mattias]
Yeah, it’s a wild world. If you’re an agent and you’re starting out, this is stuff that you probably don’t have to worry about too much, but at some point, you’re going to want to look into getting, probably, your business into the LLC, what I just said, S Corp, because that’s going to have some tax benefits for you. Again, double-check with your accountants about that.

But then, when you’re rolling a little bit and you’re wanting to invest your money, you can start thinking about the stuff that we’re talking about as well, and using, buying real estate and accelerate that depreciation so that you can, if you have a really good year, you can help balance that out. I’ve given this example a few times, but I invested in a mobile home park syndication. I invested $50,000 in the first year.

I was able to write off $66,000 because of accelerated depreciation. So that’s the power of it, and you can’t do that. I mean, that was probably an extreme example, and it’s not going to be the same every year, but I also got like 11% return on that $50,000, and just, so I mean, it was a great investment, and if I wasn’t a real estate professional, if I wasn’t an agent, an investor, all that kind of stuff, I wouldn’t have been able to take all that $66,000.

And so there’s a huge advantage to agents, to real estate investors. So if you haven’t heard about this, it’s definitely something worth exploring, and like you mentioned, it was kind of going away, but I think Trump was the one that put it into place to begin with, and so that’s why there’s possibilities of it coming back now.

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

[Mattias]
Yeah, absolutely right, and again, the whole analogy of that frog, like, sitting in the water, and it’s starting to boil, and they’re not jumping out. Same thing with attorneys. Like, I mean, like, if you haven’t found your attorney yet, it’s definitely a great thing.

I mean, I know that they specialize in different things, but like, if you just need a general counsel kind of attorney it’s good to look out for those kind of people, because they will be, as the water heats up, right, it’s gonna be more important to have your team together, and I know it’s pretty shallow time to really find your team, but it, you know, once you really, once it clicks, once you get busy enough, once you have enough things going on, it just really makes the world of difference when you have that team in place.

[Sarah Bratcher]
Yeah, no, absolutely, and I think the price of lawyers kind of shocks people at times, but, you know, once you get a good lawyer, and you get, you know, a couple of deals under your belt, like, they know your situation, and it’s quicker for them to answer those questions and stuff, so yeah, once you get your team built up, and all that, in the long run, the price, you know, kind of evens out over it, because they learn your situation, and they know exactly where your needs are, and they know where you are there.

[Mattias]
Well, hopefully, yeah, and hopefully, you’ll eventually be becoming, like, a repeat business, like, a customer for them, and they’ll kind of treat you that way, like, I think that’s the advantages of, you know, getting a contractor that you give a ton of business to, that they might, you know, respond more quickly to you, they might, you know, come out in a pinch, and help you quicker, because you are, you know, at volume, and so hopefully, as your world gets more complicated, that might happen in the professional world as well.

[Sarah Bratcher]
Yes, absolutely, the whole thing you’re talking about, contractors and everything, we have five units, and we have renovated all five of those units, and getting the contractor team piece of it has been, like, our first one, we were, like, scratching our eyeballs, we were trying to do it all ourselves, and trying to, because, you know, people wouldn’t show up, and things would happen, and everything, and like we were talking about earlier, we have two kids, and we’re trying to balance all of this, and it’s just, it’s like throwing glass balls up in the air, and just trying to catch everything.

But once we got in the groove of it over a couple of years, and on our fifth one, we, like, completely outsourced it to someone else, like, we didn’t even have to hardly step in on it, and even the cleaning and everything, and it got so much smoother, and it’s that way, when you get a bookkeeper and a lawyer on, you know, on your team and everything, the more you go into it and do it, the more everyone knows about each other, and it just gets smoother and smoother, but everything starts out kind of rough, but you just kind of do it, and that’s…

[Mattias]
Yeah, and it sounds like, I mean, if you have that mentality, you were gifted with working for a company that, you know, was huge, was going nuts, and you saw that growth, and so you saw the power of SOPs, you saw the power of all that stuff. I think it’s harder for a lot of people to think through that and think, okay, I’ll just get this done, I’m not gonna worry about systemizing, I’m not gonna worry about that, but if you kind of have the mindset of being, you know, I think 10X is greater than 2X is an example of a book that would talk about it, where if you really think about how you’re gonna be, you’re gonna be doing those, you have 1,000 rentals, you’re gonna have, you know, 500 or whatever it was, the house is being built a year, so obviously you’re gonna create the system now in this one, even though it seems like more work at the beginning, but, you know, if you think that way, you’ll create those systems and be able to scale bigger, faster.

[Sarah Bratcher]
Absolutely, and I’m guilty of it, too. Even though I had the knowledge and I knew, like, when we were starting out, I was like, it’s easier for me to just do it, I’m not gonna sit down and write it out, it’s easier for, it’s faster for me to just do it, but two years from now, it’s not going to be, and it’s gonna be faster if you had done it, written everything out that very first time, and I always, I would always think when I was going through a process, I’m like, well, I don’t have this perfect yet, so I’m not gonna write it down, and that’s a mistake, too. I should’ve just written down what I had and you could always go in and tweak it and everything when you’re doing the SOPs and getting your systems down, absolutely, I can talk about that all day long, too.

It’s so important to start.

[Mattias]
We have more tools now, too, available to us. If you use Loom, for example, if you record what you’re doing, it will create an SOP for you automatically. I’m sure you could just talk to ChatGPT or do a voice recorder and talk through what you’re doing so that it could get a SOP created through ChatGPT then.

So there’s just so many more tools now available that can make it easier, and it, I’m not saying I’m perfect at it, either. Like, I definitely, just like today, I’m drinking from a fire hose, I’m just gonna get stuff done. Like, it’s no other option.

But, you know, just kind of keeping that in mind and continuing to move with the end in mind, right? With the 10X instead of the 2X in mind that you wanna get to that point and you wanna make it easier. And maybe one day you wanna just not do it.

You wanna be just kind of overseeing things from a further out standpoint.

[Sarah Bratcher]
Yeah, well, you know, when I first read that book, I was dragging through the first of it because I’m an accountant, I’m numbers. I’m like, we got a 10X, we got a 10X. And, you know, the first part of it, he’s talking about sculpting Michelangelo.

And I’m like, how’s this guy 10X-ing? I mean, is he making profit off of this? Like, I’m waiting for the numbers to come.

And, you know, honestly, it wasn’t until, like, towards the end of the book, I was like, oh, this is all about mindset. This is all about thinking differently, not actually bringing in, you know, the income and all that other stuff. It’s freeing up your time, the amount of money that saves you, and just honing your processes and thinking farther out there and everything.

And it’s hard to get in that mindset. And it took me forever. And, you know, I read that book and then about six months later, I was like, you know what?

I think I’m gonna read that again. And that’s when it really started all forming for me. And I was like, yes, this is perfect.

But yeah, it’s hard to get in that mindset and stay in that mindset because we always want to go back to, I think most real estate investors are hustlers and worker bees, and they just want to stay busy and work, work, work, work, work. And so we often get back into that entrapment of like, we just gotta do, we just gotta do things. And so it kind of shoots us in the foot sometimes.

But if we can stay in that mindset of, you know, the 10X-ing and going bigger and doing that. And, you know, real estate investors, I mean, real estate agents, brokers, anybody in the real estate world, it works for all of them. You know, the more systemized you can get, the faster and the farther your reach is.

[Mattias]
Yeah, yeah, I mean, agents are notorious for thinking they have to do everything themselves. They have to become marketers. They have to become, you know, all this stuff.

And so, you know, outsourcing, thinking about, okay, if I was, you know, right now I’m gonna do a million in volume this year or something, you know, why would I outsource marketing? But, you know, thinking about if you’re doing 10 or 20 or 30 or 50 million, like, of course, you’re gonna figure out these steps and you’re gonna be outsourcing because you’re not gonna have any other option. So it’s definitely applicable for all of those.

I mean, for business in general, for sure. I was curious, how do you try to maintain balance? I’m gonna say that because I know that I can’t honestly say I do maintain balance.

[Sarah Bratcher]
You know, it comes down to, it was funny because last year I struggled big time. My son has a rare bone disease and he was four years old and had a major hip surgery and he was at home with me. He was right here beside me and he couldn’t walk.

He was, you know, he was just watching TV and I was trying to hustle and keep on it. And I got into a very hard mental space last year because of that and I kept thinking. And I did a bunch of reflections.

And you know that, to refer back to that, that six months it took us to save up that $1,000 for the, like, I was so proud of myself for that $1,000 and I felt that’s where the abundance was and that’s where the mindset was. And I was like, you know what? You know, I was juggling everything.

Our cash flow, you know, we were always juggling around. The joke is the three things that you are certain in life are death, taxes, and real estate investors running out of cash. Real estate investors running out of cash.

And you know, we were juggling that and I was like, I gotta keep going. We gotta keep, you know, because we gotta keep the machine going and the money coming in and everything. And I looked back to where, you know, we could barely afford groceries and I felt, I was like, that was where I was most abundant because I had done all the steps to get there.

And I was like, it’s not the cash that brings the abundance. It’s, you know, it’s life. It’s right now, it’s the mindset, going back to that and the joy and everything.

And I’ve been on a health kick since I’ve had, my daughter’s almost two. And I was like, I’ve got to show her that I need to take care of my body too. So it’s been a combination of working out, walking, taking walks with them, and communicating and just, you know, focusing on the kids when it’s their time.

It’s their time, one-on-one. Like, I can’t be a good mom if I’m always thinking about work when I’m with them. And so when it’s them, it’s just them and get back to that abundance.

I am, I’m very spiritual and faithful. I, you know, and I started getting back into reading my Bible and doing all that and just getting back in the mindset for the abundance and not letting the actual, you know, the cashflow and the chaos was making it worse. And it’s like, okay, it doesn’t come from my bank account.

It comes from, you know, my heart and my mind. So that’s where I try to stay on the crazy days. I just like, at the end of the day, these people are all that matter.

And that’s where I try to get into a headspace. Again, not perfect at it. I spiral often in this crazy, chaotic life.

I drink from fire hoses often, but I try to.

[Mattias]
Yeah, I was just gonna say, it’s all about trying to keep, continue to try, being intentional and continuing to try to have that balance to try to do all that was important to you instead of just you taking care of everything that screams.

[Sarah Bratcher]
Yeah, being consistent is much greater than being perfect. So we just try to show up every day as best we can and, you know, and do what we can.

[Mattias]
Yeah, I gotta ask, do you have any golden nuggets you wanna share to the community here?

[Sarah Bratcher]
So I guess the biggest thing is, you know, I was gonna pull up a quote, hold on. You do not rise to the level of your goals, you fall to the level of your systems. And it just, and I think of it every day cause like I focus on my goals and everything like that.

But what I do in this second is going to matter. And it’s like the day to day, it’s being consistent. And, you know, you can have the big lofty goals, but showing up every single day and doing 1% more than you have in the past is what’s gonna get you there.

You know, I can look back on the past six years and, you know, I was in a bad mental health space, like drowning in life. And, you know, I just, I did it one day at a time, one step at a time. And I started implementing the systems and they start out small, you know.

James Clear talks about doing, you know, just two minutes a day and, you know, growing from there. And, you know, I have a five-year-old and a two-year-old. My morning routine often takes me 12 hours, but I still have it on a list and I check it off as I get it done.

And I just keep going the next day. It’s progress, not perfection.

[Mattias]
Yeah, absolutely. We’ve mentioned a ton of books already. Yeah.

I’m gonna ask, do you have one that’s fundamental you think everybody should read or just one that you’re really enjoying right now?

[Sarah Bratcher]
I wanna go back to Atomic Habits. I read it at least once a year. I have, I think, a little workbook thing that I work through occasionally.

And it just, it really changed my life when things get so big and, you know, you can’t think it, you know, think it through. It’s just start back small. Your systems are, you know, gonna be what gets your goals done.

[Mattias]
Yeah. It’s so awesome to think that, you know, just 1% better is enough. And I think it really, I forget if he talks about this or not, but I think I’ve heard this a number of times that you’re kind of either growing or you’re dying.

And I think that is true for habits. That’s true for so much in life. And if you don’t think like, yes, I gotta get this whole big goal done.

And that seems overwhelming. Like if you wanna get to that point and you’re just like, that’s so hard, but all I have to do today is actually just do a little better than before. I gotta build, I gotta grow instead of die.

And I think that if you start looking at life that way, you know, hitting the snooze button is feeding the wrong habit. You know, those kinds of things that will help you get to where you wanna go. And it’s not, yeah, Rome wasn’t built in a day.

It’s all small progress. Yeah, it’s a really good book.

[Sarah Bratcher]
Yeah, and that’s what I’ve been on that lately is the, it’s not necessarily the snooze button, but you know, my kids wake up early and I’m like, oh, I can’t start off that early. And then I’m like, yes, just do it. Stop thinking, don’t put any emotion, don’t tie any emotions to it.

Just get up and do it. Okay, I can’t do a whole hour workout at 6 a.m. But you know what? I can get up and I can start the smaller things that are there.

And so that’s what’s been changing the most the past six months is being able to just do the smaller things when I can and doing all that.

[Mattias]
Sure, yeah, and snooze button’s a bad one because honestly, there’s a lot, it’s really important to get sleep. And so that’s also something you should be very concerned, because like often you will be more productive if you just have slept enough. And so getting up at 4 a.m. every morning is not necessarily better, but I digress. I have to ask if people also are interested in learning more, like you’re putting out this content to help teach people, where can they find you?

[Sarah Bratcher]
I’m on Instagram, @rei.solutions.with.sara. I’m on YouTube. I think it’s @REIAccountingsolutions is my YouTube channel. I have a podcast called REI Accounting Talk.

Yeah, and my mission this year is just to help educate real estate investors, real estate agents on becoming more familiar with the bookkeeping world so it’s less stress for them. I think if they were to be more familiar with the terms, with the processes and everything, they’d be a lot more confident and tax season wouldn’t be as stressful.

[Mattias]
No, that makes a lot of sense. Thanks for doing that for people. It’s been an honor, it’s been a lot of fun.

Thanks so much for being on the podcast, Sara.

[Sarah Bratcher]
Yes, thank you so much, appreciate it.

[Erica]
Thanks for listening to the REI Agent.

[Mattias]
If you enjoyed this episode, hit subscribe to catch new shows every week.

[Erica]
Visit reiagent.com for more content.

[Mattias]
Until next time, keep building the life you want.

[Erica]
All content in the show is not investment advice or mental health therapy. It is intended for entertainment purposes only.