Jens Nielsen - How to Scale Your Real Estate Business Without Burning Out | Real Estate Educators Podcast with Kevin Amolsch

Description

Buying your first rental property is exciting—but building a real estate business that actually scales is a completely different challenge.

In this return appearance on the Real Estate Educators Podcast, Kevin Amolsch welcomes back Jens Nielsen to discuss what happens after you've bought your first few properties.

Jens explains why investors need to stop thinking like owner-operators and start thinking like business owners. They dive into building the right team, outsourcing effectively, finding mentors, knowing when to hire employees, and creating systems that allow your business to grow without consuming your life.

They also discuss today's real estate market, why many investors are struggling to make deals work, and how successful entrepreneurs stay focused despite economic uncertainty.

Whether you're trying to buy your first investment property or scale to hundreds of units, this episode is full of practical advice for building a business that lasts.

00:00 - Meet returning guest Jens Nielsen
06:10 - Thinking like an investor instead of an operator
09:00 - Why your team determines your ability to scale
18:05 - When should you outsource vs. hire employees?
26:00 - The difference between core competencies and outsourced work
29:12 - Lessons from The Science of Scaling by Benjamin Hardy
32:18 - Knowing when it's time to walk away from a deal
35:15 - Jens' coaching philosophy and helping entrepreneurs grow

Connect with Jens Nielsen:
Website: JensNielsen.us

Learn more about business coaching, real estate investing, leadership, and building systems that allow you to scale without sacrificing your time.

Learn more about Pine Financial Group:
pinefinancialgroup.com

Hosted on Ausha. See ausha.co/privacy-policy for more information.

Transcription

Speaker #0
A lot of people get stuck in that owner-operator mode where they buy, you know, a single-family house or a small multifamily, but they want to do all the work themselves, and they immediately run out of time and energy, and real estate investing sucks because they're just too busy. Reading the books and listening to the podcast, it doesn't give you the experience of it. It's just information. Without action, it's just entertainment, right? So I think there's opportunities in every. market cycle. You just got to really figure out what works, what's your niche, and really dial into that.
Speaker #1
We're in negotiations. We're investing in real estate. They're winning. They're making money.
Speaker #2
What's up, everyone? Welcome to the Real Estate Educators Podcast, where we provide the education you can build on. I am your host, Kevin Amos. We are back. Another awesome episode. We're loving doing this podcast. We're helping real estate investors and real estate educators. Are you out there building a portfolio? Are you? fixing and flipping houses, or are you out there providing content to real estate investors? This is the podcast for you. I'm so excited to have a returning guest, Mr. Jens Nelson. Now, we had a great time on our last episode. So I'm excited to get caught up on what you're working on now. And there were some questions I wasn't able to ask you last time that I want to dig into this time. So I guess for the listener that did not listen to that, about 10 years experience, several hundred different units that you've managed. You're also a you a business coach. So you do a lot of coaching and real estate investing. I'll let you do a little bit more of an intro than that. Take us back, but welcome back to the show.
Speaker #0
Yeah. Thanks, Kevin. I'm excited to be here. Yeah. Not to bore anybody, but maybe if people didn't hear me in the last recording. So came to the United States 30 years ago, started out in Maryland, got my education, undergrad, graduate degree in IT. I worked in telecommunications and IT my whole career, from small, from startups to large corporations, to local governments, to Native American tribes, and also moved west. So 20 years ago, we moved to Albuquerque, New Mexico, and have lived here in New Mexico and southwestern Colorado for the last 20 years. The last, now we're in Santa Fe, New Mexico, which is, you know. The high desert of New Mexico, beautiful here, and quit my job six, seven years ago to pursue real estate investing, coaching, consulting, kind of full time.
Speaker #2
You're still mountain biking?
Speaker #0
I am, yes. I actually did a race last Saturday. Oh,
Speaker #2
did you really?
Speaker #0
Crashed in the first lap and my leg is all scratched up, so that's the fun part of hitting the ground on hard gravel or rocks that we have out here. It's pretty abrasive, but hey, I'm still here.
Speaker #2
Darn, Jens. I thought you were going to tell me that you won the thing.
Speaker #0
We ended up it was a six-hour race, and we ended up second, me and my partner.
Speaker #2
It was fun. That's still pretty good. It's still pretty good. You are in shape. Okay, so last episode we talked about your three purchases in your first year, and I was pretty amazed by that because so many people struggle with just getting their very first deal done? I get asked all the time. It's like, what is your best deal you've ever done? Well, the answer is the first one, because after that, it gets a little bit easier. You had no trouble with that. We spent a lot of time going into detail on the fear and all of that with those first three projects. But I would love a real quick recap. How are you able to go from zero to three properties? And I don't even remember how many units that is, but it's several. So tell me, how do you do that in the very first year?
Speaker #0
Yeah, so it was 10 years ago. So 2016, three properties, there was two fourplexes and 11 units. So that's 19, if my math is correct, 19 units in the first year. But how were we able to do it? I was just so convinced that real estate investing was the path forward. I, you know, we'd saved up a little bit of money. And we felt like this made sense, right? We're just like, I was so fired up and I wanted, I had this plan in place. I was like, there's nothing that's going to stop me. Right. And luckily I had the funds and, you know, back then 10 years ago, properties were a fraction of what they are now. Right. So it was not, I needed millions of dollars to buy these, you know, I think we were out a hundred, $150,000 total on their first three properties from the down payments. Right. So it was not unmanageable in that sense. Right.
Speaker #2
Okay. We were talking about how you... did that or why you did that. And that was because you wanted to scale. You didn't want just one little property. You knew that if you're going to make money, you have to go bigger. So you came out with the mindset of scaling. Now I started reading this book from Ben Hardy. It's called The Science of Scaling. Have you heard of this or read this book?
Speaker #0
I have not. That sounds interesting, but I've not read it.
Speaker #2
So Ben Hardy, for the listener, he teamed up with Dan Sullivan to write some books. And 10x is easier than 2x. That's probably the most popular one. One of my favorite books, by the way. But he wrote this other one, The Science of Scaling. And he talks about a couple of different things in that book. And we could definitely go into some detail on that. But one of the things he says is to scale, you have to limit your floor or raise your floor, basically. And there's several different things that that can mean. But I just wanted to ask you, like, when you're scaling, what is the most important thing for you to do to be able to scale a real estate investment company? And then we'll come back to the book and I'll tell you what he was saying about that.
Speaker #0
You know, initially, initially it was the mindset around I'm an investor. I'm not an owner operator. Right. So a lot of people get stuck in that owner operator mode where they buy, you know, a single family house or a small. multi-family, but they want to do all the work themselves. And they immediately run out of time and energy and real estate investing sucks because they're just too busy, right? So that was kind of the, I did not discover that until I couldn't find anything local. And thank God I didn't find anything local. I had to move out of town, you know, or I had to buy stuff, you know, three or four hours away. I couldn't self-manage. So that naturally led me into that. It's like, oh, let me trust the team, right? So then... That became a key part of that scaling piece is the team, you know, your partners, your property managers, your lenders, your attorneys. Everything is part of that, right? And I think the people that try to just, oh, I can figure it out. I want to do it all myself. They never really scale. So there are certain things I'm really good at and there are certain things I really suck at. So make sure I play in my lane and leverage other people to play in their lanes, right? And that's something I really preach that, you know. Yeah, you can buy one property by yourself, but if you want to scale, you got to build that team.
Speaker #2
Okay, good. So he didn't talk about team in this book, at least not yet. I'm about halfway through it, but I agree with you. It's super important to have a team. You can't do it without a team. And you went through your property manager, your lender, your attorney. So you're talking mostly outsourced team members. So give me some advice. How do we build that team? And when do we know when to bring some of that in-house?
Speaker #0
Yeah. So there's an inside team. There's an indoor, what do you call it, in-house team too. Those are the partners on the deals, right? So my fourth property, I already started building a team because I took on a partner. And, you know, again, this was not really thought out initially, but he brought something to me that I didn't have. I was like, oh, cool, Joe and me, we can do this deal. I can do the stuff I'm good at. He can do the other stuff. And together we can, you know, move forward. And that has been my, I've not done a deal by myself since then, right? That's 2018, that's eight years. So that's one piece, right? We can talk later about how do you vet your team members, your internal team members, but external team members, right? Well, it's, I operate from referrals. I operate from the fact that, hey, asking people like, who do you know I should know, right? Who would you recommend in your network to do? this task or this property manager or being property manager, lender, whatever that is, right? Because it's so hard to find good, reliable people. We just start searching randomly in place. So you got to get, you got to really talk to people to find your right team members and so on.
Speaker #2
That's interesting. Right. I have a, oh gosh, I got two properties, Jens, that just flooded. So I'm dealing with two floods at the same time. It seems like This is kind of how it goes in this business. Like it goes great for a while. And then when, when something happens and it's multiple, it just seems like that. I don't know if that's always true, but I got to tell you, I don't have a, like a, someone who can go in and dry out a basement and waterproof a basement. I used to have that. So I'm right where you're talking about. I'm like going to my network and asking people like, who should I be hiring? And, and so I'm going through that process right now.
Speaker #0
Yeah. Yeah. And it's not easy, right? Because you, you want this done quickly. because having Water in the basement, that's not good, right? But also not hiring the guys that's going to screw you over, right? Yeah,
Speaker #2
exactly. Okay, so outsource. You say outsourcing and you're going to go through asking for referrals. I had in my notes here, Jens, from our last conversation that you said your advisors are one of the most important things to you. And I was going to ask you how you find those. It sounds like we already touched on that by starting with referrals. Is there anything else you want to share about how do we find the right advisor since that is maybe the number one indicator of success?
Speaker #0
Yeah, I mean, you know. So initially, again, when I started, I was like, oh, I can figure this out by myself. I'm smart enough. I can read all the books and stuff. But reading the books and listening to the podcast, it doesn't give you the experience of it. It's just information without action. It's just entertainment, right? So I, after, you know, kind of started overcoming that mindset, I started saying, okay, well, who out there has done what I want to do, right? So I found some local people. And people, you know, love to share, right? Buy them a dinner or lunch and they are happy to share, right? And then luckily I got introduced to a broker in Albuquerque that has been doing this for so many years. And he actually became my mentor unofficially or whatever. I always ask him if I had questions. He would always give good advice and so on. And later partnering with me because he saw somebody that would I was actually asking the right questions and so on, right? So. So you can do it in different ways. You can have these informal mentors that you just find people that are experienced in whatever you want to do, ask them and buy them a lunch or dinner and so on. Now, at some point, you're not going to call them every single day and ask questions. They may get a little upset with that. So we can take that to the next level and say, okay, am I willing to invest in a coach or a consultant or a mentor myself, somebody who has been there before has gone through these different things, right? And I, you know, I invested money, you know, 10 years ago, eight, nine years ago in coaching programs, and so on, right? How do you find the right one? That's a little harder, right? Because, again, you see the advertising, but I interviewed a few different programs, found one that I really liked, and started going to these events. And that really opened up my horizon for different people, new ways of thinking, thinking bigger and bigger And I was living in a small town, right? Suddenly I was flying to Atlanta and Phoenix to really meet with people. And that was really a huge step. So if you're a little bit introverted like I am, if you're a little bit uncertain, make yourself uncomfortable and get out there in the world and start meeting people.
Speaker #2
Okay, before I get too far away from... So I want to get into your coaching. That's sort of where we were going with that. I do want to get into that. But before we get into that... The outsourcing versus in-house, we went over that very fast. And you're a business coach, so you work with businesses. So what I'm trying to understand is at what point do I stop outsourcing, like let's think my bookkeeping, for example, and do I bring an internal assistant or bookkeeper or whatever that first hire is? How do you know when is the right time to do that?
Speaker #0
Yeah, I think so discreet. Discrete tasks are almost like standard tasks. So bookkeeping is very standard. There's millions of companies that does bookkeeping, and it's fairly standardized, a payroll and stuff like that. Absolutely don't waste time on that. And you can find I'm a solo for my coaching consulting. That's just me, but I still outsource my bookkeeping because I don't want to do it myself and so on. So you can Things like that where you can find part-time support, absolutely do that. Now, let's say you want to take property management in-house, right? That's a much different decision because at that point, do you have enough units that you can hire a leasing person, a property manager? Do you have enough units that you can hire the maintenance people, right? And there's definitely a critical point here or a critical mass that allows you to do that, right? And that's... I think the only way this makes sense is if you are in one market and you're going to grow in that market and you can sustain those employees. And if that's a few hundred units, you've got to do the math. But two or three hundred units, that may be the right point to start hiring on your own. It's certainly not a job I want to do, so that's why I continue to outsource property management locally. Now, we did some deals. But we did work with a partner who had a property management company because he was local. So that has also worked out for us.
Speaker #2
Yeah, there's so many spots we could take this conversation because this is something I've been doing this for many, many years. Pine Financial is 18 years old and I was doing this prior to that. And this is something I struggle with. And so I don't know when a certain task should be outsourced to a company. I mean, there's the benefits, right? I mean... You don't have to pay their 401k and their health insurance. And if someone's sick, well, there's somebody else backing them up. So you have better coverage. But it's also more expensive per hour, right? So it's a constant struggle. And I'm asking, like, honestly, for me here. Is there any indicators to know when you outsource a task or when you bring it in-house? And I would like to know what you think our first hire should be as a real estate investor.
Speaker #0
So how many, do you have employees right now, Kevin?
Speaker #2
I have 19.
Speaker #0
19 employees. Okay. And are there certain tasks that you feel you struggle with? Should they be internal or external?
Speaker #2
Let me give you an example to help with this. So we have a marketing team. And so a whole marketing department, right? And part of that team was like an associate, so more of an entry-level position. And they would do a lot of the social media stuff, and they would maybe proofread articles and that sort of thing. But they're not making decisions. And they're in the meeting, so there's some creativity value there. But there's not, I guess the big one is there's not a decision maker, right? Well, we lost that person, and it was pretty... big blow to the company. So now what we've done, this is an experiment, we're outsourcing marketing to a marketing firm. So we don't have that, you know, that downtime or that loss if someone leaves the company. And I don't know if this is the right decision or not.
Speaker #0
Yeah. Yeah. I mean, you know, you look at your core expertise, right? Marketing is an interesting thing, right? Because again, a lot of, there's so many agencies out there that offers that so is that a core competency of your company that you really want to put money and time into developing or is it like well i can pretty i can explain what another to another firm what they should do and i don't have all the overhead of payroll and all this stuff i can outsource it now that may be a little bit more expensive but you can also let them go if they're not doing a good job and hire somebody else right and then all these different things So what's the core? I look at what's the core party of business that absolutely has to be internal and what can be outsourced to other places, right? Effectively. And I think marketing is one of these things. I mean, it's just so hard to keep up with these days, right? Yeah,
Speaker #2
I like that. A lot of people outsource their like HR, for example. Yeah,
Speaker #0
sure, right?
Speaker #2
Yeah. So that's good. So it sounds to me like pretty much. outsource as much as possible unless it's in your core competency or you want it to be in your core competency and then you'd bring that in-house.
Speaker #0
Yeah, I think if it's discrete task, right? Discrete in the sense that, hey, marketing is one thing, right? And you can develop a plan with them and they can push it out and you don't have to worry about it, right? I think that's huge, right? Maybe even payroll, HR, that type of stuff. But anything that drives the bottom line and you want to have more control over, I definitely would keep in-house, you know?
Speaker #2
So if it drives the bottom line, keep in house, I would definitely put marketing in that category.
Speaker #0
That's true. But marketing, so there's marketing and then there's sales, right?
Speaker #2
Yeah.
Speaker #0
Now, you know, if the marketing leads to sales and appointments, make sure you manage that piece of it, right? We have to split that up a little bit. If their goal is to put ads all across the internet. and you know what they should say and all that stuff. They can do that. But as soon as there's an incoming call, you have your team take that call and book whatever that is they need to do, right? This is residential real estate, right?
Speaker #2
We're a private lender. So we have two sides. We raise capital and then we lend capital.
Speaker #0
Gotcha. Okay.
Speaker #2
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Speaker #0
Raising the floor. So raising the floor is... I meant that I heard that as to the minimum you'll accept in your business. Right. You know, maybe you as raising money, the minimum used to be 10 grand. Now it's 50 grand. Right. Is that what he's talking about?
Speaker #2
It's very interesting. Right. Because when I read the it's basically the chapter, you know, title of the chapter, whatever, raising your floor, section two or whatever it is. I thought he was going to go where you went on our last call, which was limit your downside on an investment. If you could limit your downside as your investment, you can eliminate the fear and that will push you forward. That was the argument you had made. He's not saying that though. What he's saying is your floor will lower if you're lying to yourself and you're saying your trajectory is better than it actually is, for example. If you're not honest and say, no, I have holes here I need to plug, then you're going to not be able to scale. I don't know if I'm explaining that well.
Speaker #0
Yeah, yeah. No, I think... So maybe the way I would look at that, Kevin, is maybe it's building that solid foundation to build upon. Maybe that's what I'm hearing, right? You know, if you are you want to scale but you don't have, you know, very good property management and you start to keep buying more properties and they just get poorly managed, right? You know, so it's almost like making sure your foundation is solid before you start scaling. That's almost what I'm hearing here without having read the book, you know, and so on.
Speaker #2
Yeah, I think you're right. He didn't say that, but that makes sense to me.
Speaker #0
Yeah.
Speaker #2
I think, you know what? I think this is a really great book. I don't know if it's his term, Raising the Floor, makes as much sense as the point he's trying to make. But I think it's a good book for scaling a business or even if it's a real estate investment business. But it might be one worth reading.
Speaker #0
Yeah. It was interesting. So I was at an event yesterday and I randomly sat next to this guy who has a janitorial company. So why am I saying this? Well. I was like, oh, you know, what do you do? I said, oh, and I said, I have a friend who's looking to clean his auto shop. It's like, no, no, we only do 50,000 square feet and above. I was like, so his floor is, you know, so this is what I almost imagined. Like he would not touch anything that's less than 50,000 square feet to clean, right? Because it's not worth his mobilization and so on. So it's almost a little bit like what is the minimum kind of. deal size or customer size or anything like that you want to accept too right and at some point as we grow in business we have to let go and i've done it in coaching too right you know if i look back on five six seven years ago what i would charge this month right now it's double or triple of that well i can't go back to the same clients because they can't pay that so by by definition i have to find the next level of client that i can serve at a higher level that is able to afford the fees and so on.
Speaker #2
That's such a good point that he, that Ben makes in the first section of this book, which is goal setting. And then how do you, how do you actually hit those goals? What do you need to trim to hit a goal of scale? And he likes to use time. Like how long are you going to give yourself to accomplish this massive goal that you're trying to accomplish? And if you cut that time in half, how was that change your thinking to get to the, to the goal? So what you're saying is you got to, I can't do under 50,000 square feet because it's not going to get me to the goal of whatever it is. So I cut all of those out. So he does make that point very clear as well. It's interesting. All right. So you're a business coach, you have business clients, and we're in kind of a unique situation with the economy and what's going on with business. I know in real estate specifically, a lot of people are struggling right now because of the slower. the velocity of house sales and home sales, and because of the sticky inflation and sticky interest rates. So I'm curious for you, like, what are you seeing with your clients? I don't know if they're students, I guess there'd be a client, right? What are your clients seeing? And what are some of the struggles that are maybe common amongst businesses right now that you're seeing.
Speaker #0
So on the real estate side, right? Yeah, it is tough to make a deal work. I mean, underwriting a deal, right? Especially if there's a deep disconnect between the seller's expectations and the buyer's number, right? That's still a huge problem, right? So it's a tough time. And it's really interesting because I've been on bigger pockets and all these different things for years. And the chatter has really reduced because a lot of people are probably stepping away from it, right? So going in there and buying residential or investment real estate now is harder for the beginner just because the deal is in pencil. Now, there's all kinds of opportunities and distressed assets, but that's not for the beginner, right? That's a whole different conversation there. When it comes to other businesses, the thing is... I believe that the companies that still don't look too hard at the external circumstances, still focus on internal operations, will still be good, right? Because if you have a service that's still needed, right? So, you know, I have this customer who is an auto shop. Well, especially when people don't buy new autos, they're going to have their old cars repaired again and again and again, right? So they can still drive a lot of value by servicing. these vehicles that people want to keep on the road, right? So I think there's opportunities in every market cycle. You just got to really figure out what works, what's your niche, and really dial into that. So I still see companies that are thriving out there, right? Now, of course, the ones that are really struggling probably doesn't hire a coach because they're just trying to keep alive, stay alive, right?
Speaker #2
Yes, what I'm seeing, and I don't have the same view as you, your view into this as much. bigger than mine. But we hear about the K-shaped economy and how there's a separation of wealth happening right now, which is expected, by the way, because when you have high inflation, that benefits wealthy and it hurts the lower and middle class, right? So it's normal to see a K-shaped economy like we're seeing right now. But my point here I'm making, Jens, is I'm starting to see some of that in business too. Some businesses, to your point, are doing really well while some are starting to fall. down. And if we can help our listener, but in any way, like how do you prevent yourself from going to that lower part of the K that's what I'm looking for.
Speaker #0
Yeah. Well, what business are you seeing that are struggling the most? I mean, I'm just curious what your experience is.
Speaker #2
Yeah. I'm seeing real estate businesses struggle the most and specifically developments and like developers are struggling right now because the horizon is so long. So you buy a lot or piece of land and you might be. two or three years before you see the money come back, right? Because you got to plan it, you got to go get your permits, and you got to build it, then you got to sell it. So businesses that have longer horizons, and they're trapped in the market is where I'm seeing some struggle.
Speaker #0
Yeah, yeah. No, and I see it too in deals that were bought at the height of the market in 20, I mean, multifamily deals in 2020, 21, 22, especially in low to no rent growth area. And we have some that are really struggling too, right? Because we bought them with certain expectation of rent growth and stuff like that. Rent has stayed pretty flat. Expenses has accelerated. Well, then you have a problem, right? So what do we do about that? I was thinking about the other day. This is this wealth transfer people are talking about. I mean, there's some of these deals we unfortunately have to sell for less than, I mean, lose some equity on it. to get out of them, right? You know, so, I mean, unless you can, unless you can raise additional capital from your investors and stay in the game long enough for the market to turn, but who knows, right? And at some point, you know, you gotta, you gotta let, let trim the things that doesn't work. And, you know, there's, there's been a few deals that were like, well, didn't work out and we gotta just move on, right?
Speaker #2
That's a whole nother conversation,
Speaker #0
isn't it? I come back for a third time.
Speaker #2
Yeah, exactly. How do you know? Like, what's the thought process to know when to cut bait or when to go in?
Speaker #0
Yeah.
Speaker #2
And I don't know that answer either.
Speaker #0
It's the old, I mean, if you keep throwing good money after bad, right, then that's definitely a point where if there isn't a reasonable path for improvement in. the near horizon you can't see something that's gonna oh here's something that's really gonna change it and you're not kidding yourself you're not just what do you call it living in an illusion at that point you just you gotta go right we had a conversation yesterday there's a deal we've owned for five years and we've been on asset management calls every single week for five years i don't even know the math here and we're like it is not getting better i mean we had our best income years in like 2022 and rents have just flattened or just all kinds of inexpensive guys like it doesn't make sense anymore guys we've done this for five years and it's not getting any better who thinks it's gonna I'm not going to sit on this for another five years, not making a dime. And, you know, so that's one of these things where, like, we may have to let this go at a price that's, you know, less than we hoped for, you know.
Speaker #1
Yeah, that sucks. And so I'm seeing that across the board that a lot of people are. And then there's businesses that are doing really well because they were prepared for this. And it's so hard to be prepared because you don't see it coming. If you were liquid right now, there's a lot of opportunities, right?
Speaker #0
Oh, yeah.
Speaker #1
Yeah. So you're seeing that too. Okay. So tell us about the coaching program. Any updates from the last episode? Give us an overview and then any updates on what you're working on or what you're doing.
Speaker #0
Yeah. You know, I tend to focus on the, there's two focuses here, right? One is that individual who is, feels a little bit stuck, feels like. Their job or their business is not really serving them, but they don't know what's next. They know they don't like where they're at. They just don't know where they need to go. So I had a call today with, she's actually a real estate agent. It's like, hey, I'm 59 years old. I'm doing great on income and all that stuff, but I don't really know if I want to do this for the rest of my life. So a person like that helping her to get clarity and energy and move towards something that's going to serve her for the next 10, 20 years. That's the key thing, right? Maybe you want to start your own business. Maybe you want to get a new job. Maybe you want to improve your relationship, your health, whatever. That's kind of that holistic, what we call high-performance coaching. That can be anybody. It could be somebody like you who's a business owner. It could be a W-2 employee. It doesn't really matter as long as there is a desire to create a better life in some way. That's one thing. I love that because if you're coachable, I can help you there, right?
Speaker #1
That's the hardest part is that vision, right? That's got to be the first step. It's the hardest one.
Speaker #0
Yeah. We got to create the vision first. And the funny thing is, I think people will spend more time planning their vacation than they'll plan to spend time planning their overall life, right?
Speaker #1
Yeah. I'm raising my hand. I have done that.
Speaker #0
So we just got to get in there and figure out. Because once people have clarity on where they want to go and they feel connected to it, they feel excited about it, people start taking action. That's what happened to me 10 years ago when I was like, I don't like my job. I want to, well, I didn't hate my job. I didn't love this where I was from a lack of freedom, lack of time and all these things. So I was spinning my wheels for a long time until it's like, oh, real estate is the thing, right? And then it took off. That's why we bought three properties in one year, right? So that's one that I focus on. And, you know, a lot of them has been real estate investors or aspiring real estate investors because of, you know, having done. 35 acquisitions in my career, you know, multifamily and stuff. I have some experience there. But then I realized that, you know, from the 25 plus years of IT, systems and processes and management is also something I'm really good. I'm really good at seeing, you know, patterns of how do you move? What's keeping you stuck and so on. So I work with quote unquote small businesses. You know, you said you have 19 employees, you know. Five to 50 employees who especially have a strong owner who can't get out of the way, who doesn't trust handing over stuff, who keeps like holding on too tightly and being frustrated about that they don't have any time and they're working too hard. So building true leadership teams, putting the right people in the right seats, creating the right processes, the right goals and all this stuff. Like really stepping back and actually do business planning and implementation of that. So that's the other area. And that could be I work with gyms and bakeries and law firms and an auto shop and property management companies. So it doesn't really matter what it is as long as there's some sort of systems we can start putting into place.
Speaker #1
Okay. And is it still just you? You don't have a team of coaches or anything. You're the one that's doing the handling. I don't.
Speaker #0
There are, you know, I have some potential people that if we find. If we find a client that needs more than one person, I can draw on them. I have not, I don't want to, I don't really want to build a business where I have to be responsible for finding enough clients to employ other people, right? Because then it takes away some of that freedom I want. Because, you know, if I want to take two months off this summer, I just tell my clients, hey, have a nice summer. I'll see you in the fall. If I had to, you know, have me payroll and all that stuff, the demand would just be too hard. That's just a flexibility I choose to have. I get it. It's earned income. It's time for money and so on, right? But I do enjoy it, and it's very valuable to me to do it.
Speaker #1
Well, I think it could be a positive thing. I was looking at it more as a positive. There's so many coaching programs out there. You get just sucked up in the program. And then you have these coaching calls with who knows who. Or you have one-on-one, which is great. But it's not the person that sold you the program. So to talk to the person that actually owns the program, I think, is great.
Speaker #0
Yeah. And then it also allows me to be very adaptable, right? I can create custom solutions for my clients. And I love that. And I'm actually, maybe we should have an off-camera discussion. I'm actually doing some potential consulting for somebody that's starting a small debt fund for their own development and flips, fix and flip. And since you're in that business, maybe we should talk about that.
Speaker #1
I could probably give you some pointers there. All right. Well, here is the wrap up. You know this one, Jens, because you've done this before, but I love to go through the notes of what I've learned on the episode. Apparently, what we did not learn was what raising your floor means. But outside of that, I think we do, we did learn something. So I'm going to go through my notes, shed some color, shed some light, tell me what I'm missing. And then if you remember, I love it if you share one final piece of advice for real estate investors out there. And then obviously, let's get your contact information. So we started off with, well, we've got your background and we went through all of that as we did before. And then you mentioned to me, we talked about scaling and how did you do that right out of the gate? And you said it was your mindset. You want to think of yourself as an investor, not an operator. That's great. Team is huge. So something that Ben Hardy is not talking about, maybe he is later in the book, but I don't know how you scale without a team. Whether you're outsourcing it or bringing it in-house, I mean, you just need good people around you. How do you find those people? You ask for referrals. Reading without action is just entertainment. You want to go after and talk to people who have done what you wanted to do or who's been where you want to go. That's where you want to be spending some time. Coffees, lunch, that's what you said. Core competency, I wrote down that. I was just writing that down. If you want to bring something in-house, it's got to be something that you want a core competency of the business. Otherwise try to outsource as much as possible. It's safer, it's easier. And unless it's way more expensive, it potentially is better for the business. Obviously I, there's some nuances there, but you also said if it drives the bottom line, you might want to consider bringing it in house. I assume you said that because you get to have a little bit more control over it. Discount, I wrote discount between seller and buyer. That's the one thing that you're seeing the most. struggles with real estate investors right now. And I am too. It's starting to change though, Jens. We're starting to see sellers come to reality, but I know there's parts of the country that aren't quite there yet. You want to focus on internal circumstances and you gave the car service department as your example there. So really focus on what you are controlling, what's internal. And then what did I put here? Know when to cut bait. So that's a question we don't necessarily know how to answer, but. After five years, it's probably time to cut bait. So that's what I have for my notes for this episode. What'd I miss?
Speaker #0
No, I think that's good. I mean, I love that idea of, you know, get clear on your goals, stay focused on that, and keep moving towards that, right? There's always going to be noise from the outside. And if you let that distract you too much, you just get paralyzed, right? Focus on what you have control over and move in that direction.
Speaker #1
Yes. And what you didn't say, but we talked about last time also is accountability. So part of your coaching is, yeah, let's create the plan or whatever the plan, the vision, the plan, let's move you forward with your systems, your processes, but you got to actually do the work. So having someone there that will hold you accountable is absolutely massive. So I think that's important as well. All right. I don't know if that was your last piece of advice or if there's last piece of advice you'd like to share with us.
Speaker #0
No, I think that's my last piece of advice today, right? Because there's so much noise out there. Focus on what you have control over, right? And take action in the face of that fear.
Speaker #1
Yep. Lots of money can be made even in this economy. Well, Jens, how do we get a hold of you?
Speaker #0
Best place is just my personal website. My first name, J-E-N-S. Last name, Nielsen, N-I-E-L-S-E-N.us. JensNielsen.us. My phone number is on there. email. And there's also a link to schedule a quick consultation for anybody who wants to talk real estate or coaching or whatever. So I'd love to speak to people.
Speaker #1
Nice. And it's not quite yet the summer. So you haven't pushed pause on your clients. You haven't told them you'll be back in the fall. So you're still pretty busy right now. I understand that. Now, when this drops, it's going to be the middle of summer. So you might be gone. But as of right now, you're super busy. And I recognize that. And I really appreciate your time jumping on here with me.
Speaker #0
It was fun, Kevin. Thanks.
Speaker #1
And for the listener, you have lots of podcasts you could be listening to right now. You chose the Real Estate Educators podcast. And for that, I am so grateful. Thank you so much. And with that, I hope you make this day a great one. I really hope you enjoyed this episode as much as I did. If you did, please be sure to follow and leave a five-star review. Oh, yeah. And tell a friend.

Description

Buying your first rental property is exciting—but building a real estate business that actually scales is a completely different challenge.

In this return appearance on the Real Estate Educators Podcast, Kevin Amolsch welcomes back Jens Nielsen to discuss what happens after you've bought your first few properties.

They also discuss today's real estate market, why many investors are struggling to make deals work, and how successful entrepreneurs stay focused despite economic uncertainty.

Whether you're trying to buy your first investment property or scale to hundreds of units, this episode is full of practical advice for building a business that lasts.

Connect with Jens Nielsen:
Website: JensNielsen.us

Learn more about business coaching, real estate investing, leadership, and building systems that allow you to scale without sacrificing your time.

Learn more about Pine Financial Group:
pinefinancialgroup.com

Hosted on Ausha. See ausha.co/privacy-policy for more information.

Transcription

Speaker #0
A lot of people get stuck in that owner-operator mode where they buy, you know, a single-family house or a small multifamily, but they want to do all the work themselves, and they immediately run out of time and energy, and real estate investing sucks because they're just too busy. Reading the books and listening to the podcast, it doesn't give you the experience of it. It's just information. Without action, it's just entertainment, right? So I think there's opportunities in every. market cycle. You just got to really figure out what works, what's your niche, and really dial into that.
Speaker #1
We're in negotiations. We're investing in real estate. They're winning. They're making money.
Speaker #2
What's up, everyone? Welcome to the Real Estate Educators Podcast, where we provide the education you can build on. I am your host, Kevin Amos. We are back. Another awesome episode. We're loving doing this podcast. We're helping real estate investors and real estate educators. Are you out there building a portfolio? Are you? fixing and flipping houses, or are you out there providing content to real estate investors? This is the podcast for you. I'm so excited to have a returning guest, Mr. Jens Nelson. Now, we had a great time on our last episode. So I'm excited to get caught up on what you're working on now. And there were some questions I wasn't able to ask you last time that I want to dig into this time. So I guess for the listener that did not listen to that, about 10 years experience, several hundred different units that you've managed. You're also a you a business coach. So you do a lot of coaching and real estate investing. I'll let you do a little bit more of an intro than that. Take us back, but welcome back to the show.
Speaker #0
Yeah. Thanks, Kevin. I'm excited to be here. Yeah. Not to bore anybody, but maybe if people didn't hear me in the last recording. So came to the United States 30 years ago, started out in Maryland, got my education, undergrad, graduate degree in IT. I worked in telecommunications and IT my whole career, from small, from startups to large corporations, to local governments, to Native American tribes, and also moved west. So 20 years ago, we moved to Albuquerque, New Mexico, and have lived here in New Mexico and southwestern Colorado for the last 20 years. The last, now we're in Santa Fe, New Mexico, which is, you know. The high desert of New Mexico, beautiful here, and quit my job six, seven years ago to pursue real estate investing, coaching, consulting, kind of full time.
Speaker #2
You're still mountain biking?
Speaker #0
I am, yes. I actually did a race last Saturday. Oh,
Speaker #2
did you really?
Speaker #0
Crashed in the first lap and my leg is all scratched up, so that's the fun part of hitting the ground on hard gravel or rocks that we have out here. It's pretty abrasive, but hey, I'm still here.
Speaker #2
Darn, Jens. I thought you were going to tell me that you won the thing.
Speaker #0
We ended up it was a six-hour race, and we ended up second, me and my partner.
Speaker #2
It was fun. That's still pretty good. It's still pretty good. You are in shape. Okay, so last episode we talked about your three purchases in your first year, and I was pretty amazed by that because so many people struggle with just getting their very first deal done? I get asked all the time. It's like, what is your best deal you've ever done? Well, the answer is the first one, because after that, it gets a little bit easier. You had no trouble with that. We spent a lot of time going into detail on the fear and all of that with those first three projects. But I would love a real quick recap. How are you able to go from zero to three properties? And I don't even remember how many units that is, but it's several. So tell me, how do you do that in the very first year?
Speaker #0
Yeah, so it was 10 years ago. So 2016, three properties, there was two fourplexes and 11 units. So that's 19, if my math is correct, 19 units in the first year. But how were we able to do it? I was just so convinced that real estate investing was the path forward. I, you know, we'd saved up a little bit of money. And we felt like this made sense, right? We're just like, I was so fired up and I wanted, I had this plan in place. I was like, there's nothing that's going to stop me. Right. And luckily I had the funds and, you know, back then 10 years ago, properties were a fraction of what they are now. Right. So it was not, I needed millions of dollars to buy these, you know, I think we were out a hundred, $150,000 total on their first three properties from the down payments. Right. So it was not unmanageable in that sense. Right.
Speaker #2
Okay. We were talking about how you... did that or why you did that. And that was because you wanted to scale. You didn't want just one little property. You knew that if you're going to make money, you have to go bigger. So you came out with the mindset of scaling. Now I started reading this book from Ben Hardy. It's called The Science of Scaling. Have you heard of this or read this book?
Speaker #0
I have not. That sounds interesting, but I've not read it.
Speaker #2
So Ben Hardy, for the listener, he teamed up with Dan Sullivan to write some books. And 10x is easier than 2x. That's probably the most popular one. One of my favorite books, by the way. But he wrote this other one, The Science of Scaling. And he talks about a couple of different things in that book. And we could definitely go into some detail on that. But one of the things he says is to scale, you have to limit your floor or raise your floor, basically. And there's several different things that that can mean. But I just wanted to ask you, like, when you're scaling, what is the most important thing for you to do to be able to scale a real estate investment company? And then we'll come back to the book and I'll tell you what he was saying about that.
Speaker #0
You know, initially, initially it was the mindset around I'm an investor. I'm not an owner operator. Right. So a lot of people get stuck in that owner operator mode where they buy, you know, a single family house or a small. multi-family, but they want to do all the work themselves. And they immediately run out of time and energy and real estate investing sucks because they're just too busy, right? So that was kind of the, I did not discover that until I couldn't find anything local. And thank God I didn't find anything local. I had to move out of town, you know, or I had to buy stuff, you know, three or four hours away. I couldn't self-manage. So that naturally led me into that. It's like, oh, let me trust the team, right? So then... That became a key part of that scaling piece is the team, you know, your partners, your property managers, your lenders, your attorneys. Everything is part of that, right? And I think the people that try to just, oh, I can figure it out. I want to do it all myself. They never really scale. So there are certain things I'm really good at and there are certain things I really suck at. So make sure I play in my lane and leverage other people to play in their lanes, right? And that's something I really preach that, you know. Yeah, you can buy one property by yourself, but if you want to scale, you got to build that team.
Speaker #2
Okay, good. So he didn't talk about team in this book, at least not yet. I'm about halfway through it, but I agree with you. It's super important to have a team. You can't do it without a team. And you went through your property manager, your lender, your attorney. So you're talking mostly outsourced team members. So give me some advice. How do we build that team? And when do we know when to bring some of that in-house?
Speaker #0
Yeah. So there's an inside team. There's an indoor, what do you call it, in-house team too. Those are the partners on the deals, right? So my fourth property, I already started building a team because I took on a partner. And, you know, again, this was not really thought out initially, but he brought something to me that I didn't have. I was like, oh, cool, Joe and me, we can do this deal. I can do the stuff I'm good at. He can do the other stuff. And together we can, you know, move forward. And that has been my, I've not done a deal by myself since then, right? That's 2018, that's eight years. So that's one piece, right? We can talk later about how do you vet your team members, your internal team members, but external team members, right? Well, it's, I operate from referrals. I operate from the fact that, hey, asking people like, who do you know I should know, right? Who would you recommend in your network to do? this task or this property manager or being property manager, lender, whatever that is, right? Because it's so hard to find good, reliable people. We just start searching randomly in place. So you got to get, you got to really talk to people to find your right team members and so on.
Speaker #2
That's interesting. Right. I have a, oh gosh, I got two properties, Jens, that just flooded. So I'm dealing with two floods at the same time. It seems like This is kind of how it goes in this business. Like it goes great for a while. And then when, when something happens and it's multiple, it just seems like that. I don't know if that's always true, but I got to tell you, I don't have a, like a, someone who can go in and dry out a basement and waterproof a basement. I used to have that. So I'm right where you're talking about. I'm like going to my network and asking people like, who should I be hiring? And, and so I'm going through that process right now.
Speaker #0
Yeah. Yeah. And it's not easy, right? Because you, you want this done quickly. because having Water in the basement, that's not good, right? But also not hiring the guys that's going to screw you over, right? Yeah,
Speaker #2
exactly. Okay, so outsource. You say outsourcing and you're going to go through asking for referrals. I had in my notes here, Jens, from our last conversation that you said your advisors are one of the most important things to you. And I was going to ask you how you find those. It sounds like we already touched on that by starting with referrals. Is there anything else you want to share about how do we find the right advisor since that is maybe the number one indicator of success?
Speaker #0
Yeah, I mean, you know. So initially, again, when I started, I was like, oh, I can figure this out by myself. I'm smart enough. I can read all the books and stuff. But reading the books and listening to the podcast, it doesn't give you the experience of it. It's just information without action. It's just entertainment, right? So I, after, you know, kind of started overcoming that mindset, I started saying, okay, well, who out there has done what I want to do, right? So I found some local people. And people, you know, love to share, right? Buy them a dinner or lunch and they are happy to share, right? And then luckily I got introduced to a broker in Albuquerque that has been doing this for so many years. And he actually became my mentor unofficially or whatever. I always ask him if I had questions. He would always give good advice and so on. And later partnering with me because he saw somebody that would I was actually asking the right questions and so on, right? So. So you can do it in different ways. You can have these informal mentors that you just find people that are experienced in whatever you want to do, ask them and buy them a lunch or dinner and so on. Now, at some point, you're not going to call them every single day and ask questions. They may get a little upset with that. So we can take that to the next level and say, okay, am I willing to invest in a coach or a consultant or a mentor myself, somebody who has been there before has gone through these different things, right? And I, you know, I invested money, you know, 10 years ago, eight, nine years ago in coaching programs, and so on, right? How do you find the right one? That's a little harder, right? Because, again, you see the advertising, but I interviewed a few different programs, found one that I really liked, and started going to these events. And that really opened up my horizon for different people, new ways of thinking, thinking bigger and bigger And I was living in a small town, right? Suddenly I was flying to Atlanta and Phoenix to really meet with people. And that was really a huge step. So if you're a little bit introverted like I am, if you're a little bit uncertain, make yourself uncomfortable and get out there in the world and start meeting people.
Speaker #2
Okay, before I get too far away from... So I want to get into your coaching. That's sort of where we were going with that. I do want to get into that. But before we get into that... The outsourcing versus in-house, we went over that very fast. And you're a business coach, so you work with businesses. So what I'm trying to understand is at what point do I stop outsourcing, like let's think my bookkeeping, for example, and do I bring an internal assistant or bookkeeper or whatever that first hire is? How do you know when is the right time to do that?
Speaker #0
Yeah, I think so discreet. Discrete tasks are almost like standard tasks. So bookkeeping is very standard. There's millions of companies that does bookkeeping, and it's fairly standardized, a payroll and stuff like that. Absolutely don't waste time on that. And you can find I'm a solo for my coaching consulting. That's just me, but I still outsource my bookkeeping because I don't want to do it myself and so on. So you can Things like that where you can find part-time support, absolutely do that. Now, let's say you want to take property management in-house, right? That's a much different decision because at that point, do you have enough units that you can hire a leasing person, a property manager? Do you have enough units that you can hire the maintenance people, right? And there's definitely a critical point here or a critical mass that allows you to do that, right? And that's... I think the only way this makes sense is if you are in one market and you're going to grow in that market and you can sustain those employees. And if that's a few hundred units, you've got to do the math. But two or three hundred units, that may be the right point to start hiring on your own. It's certainly not a job I want to do, so that's why I continue to outsource property management locally. Now, we did some deals. But we did work with a partner who had a property management company because he was local. So that has also worked out for us.
Speaker #2
Yeah, there's so many spots we could take this conversation because this is something I've been doing this for many, many years. Pine Financial is 18 years old and I was doing this prior to that. And this is something I struggle with. And so I don't know when a certain task should be outsourced to a company. I mean, there's the benefits, right? I mean... You don't have to pay their 401k and their health insurance. And if someone's sick, well, there's somebody else backing them up. So you have better coverage. But it's also more expensive per hour, right? So it's a constant struggle. And I'm asking, like, honestly, for me here. Is there any indicators to know when you outsource a task or when you bring it in-house? And I would like to know what you think our first hire should be as a real estate investor.
Speaker #0
So how many, do you have employees right now, Kevin?
Speaker #2
I have 19.
Speaker #0
19 employees. Okay. And are there certain tasks that you feel you struggle with? Should they be internal or external?
Speaker #2
Let me give you an example to help with this. So we have a marketing team. And so a whole marketing department, right? And part of that team was like an associate, so more of an entry-level position. And they would do a lot of the social media stuff, and they would maybe proofread articles and that sort of thing. But they're not making decisions. And they're in the meeting, so there's some creativity value there. But there's not, I guess the big one is there's not a decision maker, right? Well, we lost that person, and it was pretty... big blow to the company. So now what we've done, this is an experiment, we're outsourcing marketing to a marketing firm. So we don't have that, you know, that downtime or that loss if someone leaves the company. And I don't know if this is the right decision or not.
Speaker #0
Yeah. Yeah. I mean, you know, you look at your core expertise, right? Marketing is an interesting thing, right? Because again, a lot of, there's so many agencies out there that offers that so is that a core competency of your company that you really want to put money and time into developing or is it like well i can pretty i can explain what another to another firm what they should do and i don't have all the overhead of payroll and all this stuff i can outsource it now that may be a little bit more expensive but you can also let them go if they're not doing a good job and hire somebody else right and then all these different things So what's the core? I look at what's the core party of business that absolutely has to be internal and what can be outsourced to other places, right? Effectively. And I think marketing is one of these things. I mean, it's just so hard to keep up with these days, right? Yeah,
Speaker #2
I like that. A lot of people outsource their like HR, for example. Yeah,
Speaker #0
sure, right?
Speaker #2
Yeah. So that's good. So it sounds to me like pretty much. outsource as much as possible unless it's in your core competency or you want it to be in your core competency and then you'd bring that in-house.
Speaker #0
Yeah, I think if it's discrete task, right? Discrete in the sense that, hey, marketing is one thing, right? And you can develop a plan with them and they can push it out and you don't have to worry about it, right? I think that's huge, right? Maybe even payroll, HR, that type of stuff. But anything that drives the bottom line and you want to have more control over, I definitely would keep in-house, you know?
Speaker #2
So if it drives the bottom line, keep in house, I would definitely put marketing in that category.
Speaker #0
That's true. But marketing, so there's marketing and then there's sales, right?
Speaker #2
Yeah.
Speaker #0
Now, you know, if the marketing leads to sales and appointments, make sure you manage that piece of it, right? We have to split that up a little bit. If their goal is to put ads all across the internet. and you know what they should say and all that stuff. They can do that. But as soon as there's an incoming call, you have your team take that call and book whatever that is they need to do, right? This is residential real estate, right?
Speaker #2
We're a private lender. So we have two sides. We raise capital and then we lend capital.
Speaker #0
Gotcha. Okay.
Speaker #2
Two targets there. This episode is brought to you by Pine Financial Group. Pine Financial is a private lender specializing in short-term rehab lending to real estate investors. Got a property that needs some love? We can help. We are able to offer funding solutions because we raise private money from individual investors. With more than 15 years of experience, Pine offers passive investors an alternative that provides stability, consistency, and security to your portfolio. If you like real estate but want to avoid the ups and downs in effort, a Pine Mortgage Fund could be a perfect fit for you. Accredited investors will experience an 8% preferred return and profit sharing. diversify your portfolio. out of Wall Street and into Main Street with a Pine Financial Group fund. To get more information at pinefinancialgroup.com, that's pinefinancialgroup.com. All right, so I want to get back to this book, The Science of Scaling, because what I'm reading right now is rather interesting and I'm just curious your opinion on it. So he talks about raising your floor as a business owner or as an investor and how do you use that term, I guess, to scale a business and make it bigger and better. And what he's talking about here is you will create a floor in your life and in your business if you're not honest with yourself. So if you're not taking accountability, you're taking responsibility. If you're taking on more than you could handle and missing on other things, those are the things that will lower a floor. And his argument is you can't scale if you're taking on stuff that you can't actually perform on or if you're lying to yourself. What are your thoughts on Ben Hardy's opinion on his term raising the floor?
Speaker #0
Raising the floor. So raising the floor is... I meant that I heard that as to the minimum you'll accept in your business. Right. You know, maybe you as raising money, the minimum used to be 10 grand. Now it's 50 grand. Right. Is that what he's talking about?
Speaker #2
It's very interesting. Right. Because when I read the it's basically the chapter, you know, title of the chapter, whatever, raising your floor, section two or whatever it is. I thought he was going to go where you went on our last call, which was limit your downside on an investment. If you could limit your downside as your investment, you can eliminate the fear and that will push you forward. That was the argument you had made. He's not saying that though. What he's saying is your floor will lower if you're lying to yourself and you're saying your trajectory is better than it actually is, for example. If you're not honest and say, no, I have holes here I need to plug, then you're going to not be able to scale. I don't know if I'm explaining that well.
Speaker #0
Yeah, yeah. No, I think... So maybe the way I would look at that, Kevin, is maybe it's building that solid foundation to build upon. Maybe that's what I'm hearing, right? You know, if you are you want to scale but you don't have, you know, very good property management and you start to keep buying more properties and they just get poorly managed, right? You know, so it's almost like making sure your foundation is solid before you start scaling. That's almost what I'm hearing here without having read the book, you know, and so on.
Speaker #2
Yeah, I think you're right. He didn't say that, but that makes sense to me.
Speaker #0
Yeah.
Speaker #2
I think, you know what? I think this is a really great book. I don't know if it's his term, Raising the Floor, makes as much sense as the point he's trying to make. But I think it's a good book for scaling a business or even if it's a real estate investment business. But it might be one worth reading.
Speaker #0
Yeah. It was interesting. So I was at an event yesterday and I randomly sat next to this guy who has a janitorial company. So why am I saying this? Well. I was like, oh, you know, what do you do? I said, oh, and I said, I have a friend who's looking to clean his auto shop. It's like, no, no, we only do 50,000 square feet and above. I was like, so his floor is, you know, so this is what I almost imagined. Like he would not touch anything that's less than 50,000 square feet to clean, right? Because it's not worth his mobilization and so on. So it's almost a little bit like what is the minimum kind of. deal size or customer size or anything like that you want to accept too right and at some point as we grow in business we have to let go and i've done it in coaching too right you know if i look back on five six seven years ago what i would charge this month right now it's double or triple of that well i can't go back to the same clients because they can't pay that so by by definition i have to find the next level of client that i can serve at a higher level that is able to afford the fees and so on.
Speaker #2
That's such a good point that he, that Ben makes in the first section of this book, which is goal setting. And then how do you, how do you actually hit those goals? What do you need to trim to hit a goal of scale? And he likes to use time. Like how long are you going to give yourself to accomplish this massive goal that you're trying to accomplish? And if you cut that time in half, how was that change your thinking to get to the, to the goal? So what you're saying is you got to, I can't do under 50,000 square feet because it's not going to get me to the goal of whatever it is. So I cut all of those out. So he does make that point very clear as well. It's interesting. All right. So you're a business coach, you have business clients, and we're in kind of a unique situation with the economy and what's going on with business. I know in real estate specifically, a lot of people are struggling right now because of the slower. the velocity of house sales and home sales, and because of the sticky inflation and sticky interest rates. So I'm curious for you, like, what are you seeing with your clients? I don't know if they're students, I guess there'd be a client, right? What are your clients seeing? And what are some of the struggles that are maybe common amongst businesses right now that you're seeing.
Speaker #0
So on the real estate side, right? Yeah, it is tough to make a deal work. I mean, underwriting a deal, right? Especially if there's a deep disconnect between the seller's expectations and the buyer's number, right? That's still a huge problem, right? So it's a tough time. And it's really interesting because I've been on bigger pockets and all these different things for years. And the chatter has really reduced because a lot of people are probably stepping away from it, right? So going in there and buying residential or investment real estate now is harder for the beginner just because the deal is in pencil. Now, there's all kinds of opportunities and distressed assets, but that's not for the beginner, right? That's a whole different conversation there. When it comes to other businesses, the thing is... I believe that the companies that still don't look too hard at the external circumstances, still focus on internal operations, will still be good, right? Because if you have a service that's still needed, right? So, you know, I have this customer who is an auto shop. Well, especially when people don't buy new autos, they're going to have their old cars repaired again and again and again, right? So they can still drive a lot of value by servicing. these vehicles that people want to keep on the road, right? So I think there's opportunities in every market cycle. You just got to really figure out what works, what's your niche, and really dial into that. So I still see companies that are thriving out there, right? Now, of course, the ones that are really struggling probably doesn't hire a coach because they're just trying to keep alive, stay alive, right?
Speaker #2
Yes, what I'm seeing, and I don't have the same view as you, your view into this as much. bigger than mine. But we hear about the K-shaped economy and how there's a separation of wealth happening right now, which is expected, by the way, because when you have high inflation, that benefits wealthy and it hurts the lower and middle class, right? So it's normal to see a K-shaped economy like we're seeing right now. But my point here I'm making, Jens, is I'm starting to see some of that in business too. Some businesses, to your point, are doing really well while some are starting to fall. down. And if we can help our listener, but in any way, like how do you prevent yourself from going to that lower part of the K that's what I'm looking for.
Speaker #0
Yeah. Well, what business are you seeing that are struggling the most? I mean, I'm just curious what your experience is.
Speaker #2
Yeah. I'm seeing real estate businesses struggle the most and specifically developments and like developers are struggling right now because the horizon is so long. So you buy a lot or piece of land and you might be. two or three years before you see the money come back, right? Because you got to plan it, you got to go get your permits, and you got to build it, then you got to sell it. So businesses that have longer horizons, and they're trapped in the market is where I'm seeing some struggle.
Speaker #0
Yeah, yeah. No, and I see it too in deals that were bought at the height of the market in 20, I mean, multifamily deals in 2020, 21, 22, especially in low to no rent growth area. And we have some that are really struggling too, right? Because we bought them with certain expectation of rent growth and stuff like that. Rent has stayed pretty flat. Expenses has accelerated. Well, then you have a problem, right? So what do we do about that? I was thinking about the other day. This is this wealth transfer people are talking about. I mean, there's some of these deals we unfortunately have to sell for less than, I mean, lose some equity on it. to get out of them, right? You know, so, I mean, unless you can, unless you can raise additional capital from your investors and stay in the game long enough for the market to turn, but who knows, right? And at some point, you know, you gotta, you gotta let, let trim the things that doesn't work. And, you know, there's, there's been a few deals that were like, well, didn't work out and we gotta just move on, right?
Speaker #2
That's a whole nother conversation,
Speaker #0
isn't it? I come back for a third time.
Speaker #2
Yeah, exactly. How do you know? Like, what's the thought process to know when to cut bait or when to go in?
Speaker #0
Yeah.
Speaker #2
And I don't know that answer either.
Speaker #0
It's the old, I mean, if you keep throwing good money after bad, right, then that's definitely a point where if there isn't a reasonable path for improvement in. the near horizon you can't see something that's gonna oh here's something that's really gonna change it and you're not kidding yourself you're not just what do you call it living in an illusion at that point you just you gotta go right we had a conversation yesterday there's a deal we've owned for five years and we've been on asset management calls every single week for five years i don't even know the math here and we're like it is not getting better i mean we had our best income years in like 2022 and rents have just flattened or just all kinds of inexpensive guys like it doesn't make sense anymore guys we've done this for five years and it's not getting any better who thinks it's gonna I'm not going to sit on this for another five years, not making a dime. And, you know, so that's one of these things where, like, we may have to let this go at a price that's, you know, less than we hoped for, you know.
Speaker #1
Yeah, that sucks. And so I'm seeing that across the board that a lot of people are. And then there's businesses that are doing really well because they were prepared for this. And it's so hard to be prepared because you don't see it coming. If you were liquid right now, there's a lot of opportunities, right?
Speaker #0
Oh, yeah.
Speaker #1
Yeah. So you're seeing that too. Okay. So tell us about the coaching program. Any updates from the last episode? Give us an overview and then any updates on what you're working on or what you're doing.
Speaker #0
Yeah. You know, I tend to focus on the, there's two focuses here, right? One is that individual who is, feels a little bit stuck, feels like. Their job or their business is not really serving them, but they don't know what's next. They know they don't like where they're at. They just don't know where they need to go. So I had a call today with, she's actually a real estate agent. It's like, hey, I'm 59 years old. I'm doing great on income and all that stuff, but I don't really know if I want to do this for the rest of my life. So a person like that helping her to get clarity and energy and move towards something that's going to serve her for the next 10, 20 years. That's the key thing, right? Maybe you want to start your own business. Maybe you want to get a new job. Maybe you want to improve your relationship, your health, whatever. That's kind of that holistic, what we call high-performance coaching. That can be anybody. It could be somebody like you who's a business owner. It could be a W-2 employee. It doesn't really matter as long as there is a desire to create a better life in some way. That's one thing. I love that because if you're coachable, I can help you there, right?
Speaker #1
That's the hardest part is that vision, right? That's got to be the first step. It's the hardest one.
Speaker #0
Yeah. We got to create the vision first. And the funny thing is, I think people will spend more time planning their vacation than they'll plan to spend time planning their overall life, right?
Speaker #1
Yeah. I'm raising my hand. I have done that.
Speaker #0
So we just got to get in there and figure out. Because once people have clarity on where they want to go and they feel connected to it, they feel excited about it, people start taking action. That's what happened to me 10 years ago when I was like, I don't like my job. I want to, well, I didn't hate my job. I didn't love this where I was from a lack of freedom, lack of time and all these things. So I was spinning my wheels for a long time until it's like, oh, real estate is the thing, right? And then it took off. That's why we bought three properties in one year, right? So that's one that I focus on. And, you know, a lot of them has been real estate investors or aspiring real estate investors because of, you know, having done. 35 acquisitions in my career, you know, multifamily and stuff. I have some experience there. But then I realized that, you know, from the 25 plus years of IT, systems and processes and management is also something I'm really good. I'm really good at seeing, you know, patterns of how do you move? What's keeping you stuck and so on. So I work with quote unquote small businesses. You know, you said you have 19 employees, you know. Five to 50 employees who especially have a strong owner who can't get out of the way, who doesn't trust handing over stuff, who keeps like holding on too tightly and being frustrated about that they don't have any time and they're working too hard. So building true leadership teams, putting the right people in the right seats, creating the right processes, the right goals and all this stuff. Like really stepping back and actually do business planning and implementation of that. So that's the other area. And that could be I work with gyms and bakeries and law firms and an auto shop and property management companies. So it doesn't really matter what it is as long as there's some sort of systems we can start putting into place.
Speaker #1
Okay. And is it still just you? You don't have a team of coaches or anything. You're the one that's doing the handling. I don't.
Speaker #0
There are, you know, I have some potential people that if we find. If we find a client that needs more than one person, I can draw on them. I have not, I don't want to, I don't really want to build a business where I have to be responsible for finding enough clients to employ other people, right? Because then it takes away some of that freedom I want. Because, you know, if I want to take two months off this summer, I just tell my clients, hey, have a nice summer. I'll see you in the fall. If I had to, you know, have me payroll and all that stuff, the demand would just be too hard. That's just a flexibility I choose to have. I get it. It's earned income. It's time for money and so on, right? But I do enjoy it, and it's very valuable to me to do it.
Speaker #1
Well, I think it could be a positive thing. I was looking at it more as a positive. There's so many coaching programs out there. You get just sucked up in the program. And then you have these coaching calls with who knows who. Or you have one-on-one, which is great. But it's not the person that sold you the program. So to talk to the person that actually owns the program, I think, is great.
Speaker #0
Yeah. And then it also allows me to be very adaptable, right? I can create custom solutions for my clients. And I love that. And I'm actually, maybe we should have an off-camera discussion. I'm actually doing some potential consulting for somebody that's starting a small debt fund for their own development and flips, fix and flip. And since you're in that business, maybe we should talk about that.
Speaker #1
I could probably give you some pointers there. All right. Well, here is the wrap up. You know this one, Jens, because you've done this before, but I love to go through the notes of what I've learned on the episode. Apparently, what we did not learn was what raising your floor means. But outside of that, I think we do, we did learn something. So I'm going to go through my notes, shed some color, shed some light, tell me what I'm missing. And then if you remember, I love it if you share one final piece of advice for real estate investors out there. And then obviously, let's get your contact information. So we started off with, well, we've got your background and we went through all of that as we did before. And then you mentioned to me, we talked about scaling and how did you do that right out of the gate? And you said it was your mindset. You want to think of yourself as an investor, not an operator. That's great. Team is huge. So something that Ben Hardy is not talking about, maybe he is later in the book, but I don't know how you scale without a team. Whether you're outsourcing it or bringing it in-house, I mean, you just need good people around you. How do you find those people? You ask for referrals. Reading without action is just entertainment. You want to go after and talk to people who have done what you wanted to do or who's been where you want to go. That's where you want to be spending some time. Coffees, lunch, that's what you said. Core competency, I wrote down that. I was just writing that down. If you want to bring something in-house, it's got to be something that you want a core competency of the business. Otherwise try to outsource as much as possible. It's safer, it's easier. And unless it's way more expensive, it potentially is better for the business. Obviously I, there's some nuances there, but you also said if it drives the bottom line, you might want to consider bringing it in house. I assume you said that because you get to have a little bit more control over it. Discount, I wrote discount between seller and buyer. That's the one thing that you're seeing the most. struggles with real estate investors right now. And I am too. It's starting to change though, Jens. We're starting to see sellers come to reality, but I know there's parts of the country that aren't quite there yet. You want to focus on internal circumstances and you gave the car service department as your example there. So really focus on what you are controlling, what's internal. And then what did I put here? Know when to cut bait. So that's a question we don't necessarily know how to answer, but. After five years, it's probably time to cut bait. So that's what I have for my notes for this episode. What'd I miss?
Speaker #0
No, I think that's good. I mean, I love that idea of, you know, get clear on your goals, stay focused on that, and keep moving towards that, right? There's always going to be noise from the outside. And if you let that distract you too much, you just get paralyzed, right? Focus on what you have control over and move in that direction.
Speaker #1
Yes. And what you didn't say, but we talked about last time also is accountability. So part of your coaching is, yeah, let's create the plan or whatever the plan, the vision, the plan, let's move you forward with your systems, your processes, but you got to actually do the work. So having someone there that will hold you accountable is absolutely massive. So I think that's important as well. All right. I don't know if that was your last piece of advice or if there's last piece of advice you'd like to share with us.
Speaker #0
No, I think that's my last piece of advice today, right? Because there's so much noise out there. Focus on what you have control over, right? And take action in the face of that fear.
Speaker #1
Yep. Lots of money can be made even in this economy. Well, Jens, how do we get a hold of you?
Speaker #0
Best place is just my personal website. My first name, J-E-N-S. Last name, Nielsen, N-I-E-L-S-E-N.us. JensNielsen.us. My phone number is on there. email. And there's also a link to schedule a quick consultation for anybody who wants to talk real estate or coaching or whatever. So I'd love to speak to people.
Speaker #1
Nice. And it's not quite yet the summer. So you haven't pushed pause on your clients. You haven't told them you'll be back in the fall. So you're still pretty busy right now. I understand that. Now, when this drops, it's going to be the middle of summer. So you might be gone. But as of right now, you're super busy. And I recognize that. And I really appreciate your time jumping on here with me.
Speaker #0
It was fun, Kevin. Thanks.
Speaker #1
And for the listener, you have lots of podcasts you could be listening to right now. You chose the Real Estate Educators podcast. And for that, I am so grateful. Thank you so much. And with that, I hope you make this day a great one. I really hope you enjoyed this episode as much as I did. If you did, please be sure to follow and leave a five-star review. Oh, yeah. And tell a friend.

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