Brick x Brick Podcast

David Richter is a former real estate investor who now runs a fractional CFO business for real estate investors. He started his CFO business because he saw a need for real estate investors to have a better understanding of their finances.

Richter believes that it is important for real estate investors to know where their money is coming in from, where it is going out to, and how much they are keeping. He says that this information is essential for making good business decisions.

Richter also believes that it is important for real estate investors to have a system in place for managing their finances. He recommends the Profit First system, which is a way to allocate money to different areas of your business, such as taxes, profit, and operating expenses.

Richter says that the Profit First system has helped him and his clients to become more profitable and to have more control over their finances.

• Richter says that many real estate investors are struggling with their finances because they are not taking the time to understand their numbers. He says that it is important for real estate investors to know where their money is coming in from, where it is going out to, and how much they are keeping.
• Richter also says that it is important for real estate investors to have a system in place for managing their finances. He recommends the Profit First system, which is a way to allocate money to different areas of your business, such as taxes, profit, and operating expenses.
• Richter says that the Profit First system has helped him and his clients to become more profitable and to have more control over their finances.

Ryan Goldfarb (00:05.322) Welcome back to the Brick by Brick podcast. I am John Errico here as always with Ryan Goldfarb today We are extremely excited to have a special guest David Richter David is a many was many hats but

is also a podcast host as we are for the profit first for our podcast right i have appeared on david's podcast i don't know when that will be released relative to when this is being released but please check us out on that podcast and check out the podcast in general uh... is great information but david uh... first of all welcome thank you for being on our podcast yeah thanks for having me and always it's always a pleasure to get on and spread the message as much as possible so they want to start uh... if you could give us sort of the high level of

review of what you currently do and that I would love to kind of drill down into your career, how and why you are doing what you're doing and then branch off from there. So currently

I'm the author of Profit First for Real Estate Investing, a book out there for the real estate investing community. But I also run a fractional CFO business, so part-time chief financial officers, because everyone has a sucky bookkeeper in CPA usually, and they don't have anyone to be the glue there to actually say what's actually going on the financial side. So where are they making it, spending it, and are they keeping any of it? So that's what we really focus on to make sure people are keeping more of the money that they're making.

That's what I'm into right now and trying to spread the message of profit first as well too. Just making sure people make profit a habit inside their business.

Ryan Goldfarb (01:41.174) That's awesome. So I would love to hear how that I, you know, I believe if I'm not mistaken that your path to that involved real estate, right? Owning real estate, closing deals, wholesaling, et cetera, et cetera. I would love to hear a little bit about that, that journey. First of all, do you have a background in finance? Is that how the CFO fractional CFO business kind of generated? If you can see me, I don't know if people are just listening to this or can see me. I know I look like I should have a background in finance and then I have a

I'm a fractional CFO company, but I have zero background in finance. I wasn't a bookkeeper, wasn't a CPA, didn't get my accounting degree or anything, but I run a fractional CFO firm. But the reason I did, I started that because my background is as a real estate investor. And so I started about 10 years ago, bought my first house on 12, and have never looked back. I read Rich Dad, Poor Dad, someone gave me that in college. That's what changed everything for me and my mindset. So it was a very typical story there.

Ryan Goldfarb (02:41.408) The deal flow from about five deals a month, about 25 deals a month, doing wholesale, fix and flips, turnkey, rental, short term, long term, everything in between, lease options, subject to deals. I got to learn a lot in the five years I was there. And then one of the things I did learn, I did get to sit in a finance seat there even without a financial background because they must have looked at me too and said, you should fit in this seat. But then I sat there and I was like, okay, now that I understand because I literally sat down with our CPA for like six months and said, tell me everything.

Like I want to understand how the money flows through here and what does all these mean on the profit and loss, the balance sheet, everything. Once I had that, that power in my hands, I could like tell the full story because I had worked in sales and acquisitions and selling the properties and property management and a lot of different seats up to that point. And now I understood how the money flowed through and if we were profitable or not. So I'm like, this is good stuff. But then at the same time, we were doing 25 deals a month, but spending 26 worth out the door.

This is not working. So that's where it was like, okay, this sucks. So that was my first eye-opening experience to where it didn't matter that we did more deals that we had grown that much. If we weren't gonna keep more of it on the way up too, then I would go to these other events and hear on like different places, like whether it was a mastermind or a meetup or whatever, that people were like, oh yeah, we just did our most deals ever. We did a million dollars last year, whatever it might be. And then they're crying at the bar later.

because they're like, yeah, but I don't know where any of the money is. You know, like, all the money goes in, money goes out. Have no idea what's going on. I just kept hearing that story over and over again. Then I moved across the country after five years of working there. I moved to Virginia, started with another guy, and since I had the power of seeing the numbers on the back end, I immediately asked him like...

I don't care anything that you tell me how many deals you're doing, what's coming in, I want to see your books. Like I want to see your numbers. The numbers will tell your story." And he didn't have books. Like I mean he had books and a bookkeeper, but they weren't real estate investing bookkeepers. So it was like it was a mess. Like the story that I got was just a jumbled mess where I couldn't read it at all. So I'm like, we have to clean this up. We have to get it to where you know and are very confident. What are you making, spending, keeping?

Ryan Goldfarb (04:55.642) on a monthly basis, like I need to get that. So got that within three months. And then from there, I wanted to make sure that he had a good system to like, you know, know where all the numbers were. So then we went through and was like, here's where all your cash is, it's in your rentals. Like it's over here because he had bought a bunch of rental properties and all of his equity was tied up there. He only had like 30% loan to value. So it was like, that's where all his money was. So that's where now I was able to just help him understand where the money was. So to me,

He said to me at that time, just knowing what I make, spend, and keep, then from here also knowing where the money was going inside of my business has been life changing because now I can make better decisions around my money. So that's where to me I felt called to do the company that I have today, to start Simple CFO because I'm like I have a real estate background but so many people I know are struggling with they think income.

solves all problems and it's like we're not taking the root cause and really knowing what's going on. So that's where I'm like. Yeah. So there's a lot there. Yeah, a lot. So thank you for that. Yeah, there's a ton of unpackers. So my initial impressions, first of all, I hear that. That strikes a very chord with me about money coming in, money coming out. One of the things I was shocked before I went into business for my own at all, right, is I worked a normal job.

probably like most people have at some point in their life. And when I went into business, I sort of had this naive assumption that every business that I had interacted with before as a W2 earner or would start, knew exactly how much money they were making. They had everything buttoned up. It was just this kind of magic thing that every business had. And I was shocked to realize that even something like.

For example, as we talked about in this podcast, Ryan and I have operated and currently operate a construction business, right? But even determining something as, shall we say trivial, sounding trivial, sounding as saying like, did I make money on this construction project, right? Period, like as a general contractor, right? Did I pull in more money than what I made? That itself is not.

Ryan Goldfarb (07:09.346) One, that's not a trivial question, and two, if you ask general contractors, no one knows the answer to that. That's like, I don't know, maybe. And if so, how much? Did I make a lot? Did I make a little? Is that good? Is that bad? I don't know. We encounter that a lot. With our affiliated businesses, for a construction company, it doesn't really matter how much we make, because

BREAKING NEWS: John and Ryan talk about something other than real estate!

This week, John and Ryan plan a hypothetical 72-hour trip to Atlantic City.

Where will they eat? Where will they drink? How will they pass the time? 

Tune in as the hosts discuss each of their preferred itineraries, including a visit to a newly reopened restaurant, indoor activities, outdoor activities, and more. 

What would your ideal 72-hour trip to Atlantic City look like?

[00:00:02] 72-Hour Non-Real Estate Itinerary for Atlantic City [00:03:24] Exploring Limited Dining Options in Atlantic City [00:06:23] Planning a Day in Atlantic City [00:09:29] Recommended itinerary for a trip to Atlantic City [00:12:35] Ideal itinerary for a day in Atlantic City [00:15:56] Day and Night Plans in Atlantic City [00:19:05] Exploring Atlantic City and New York City [00:22:00] My Ideal Summer Day in Atlantic City [00:25:25] Weekend Plans in Atlantic City [00:28:37] Ideal Activities for a Day in Atlantic City [00:31:40] Dining options in Atlantic City [00:34:26] Redefining Atlantic City Beyond the Casinos [00:37:23] Exploring Food and Culture in the City [00:40:24] Things to do in Atlantic City [00:43:14] Summer Activities in Atlantic City and Beyond [00:46:21] Things to do and eat in Atlantic City [00:49:09] Lack of diverse dining and family activities in Atlantic City [00:52:04] The Need for More Amenities in Atlantic City [00:54:58] Creating a Vibrant Commercial Corridor [00:58:00] The Future of Atlantic City's Amenities [01:00:55] Updates on 'Brick by Brick' Podcast

This week, John and Ryan introduce their largest project to date -- a 48-unit condo building in Atlantic City called La Renaissance. The duo details the challenges they face in every phase of the project, from pre-closing obstacles to mechanical systems and everything in between.

[00:00:02] Renovations of Atlantic City Condo Building [00:03:49] The Deterioration of a Timeshare Building in Atlantic City [00:07:34] The Complexities of Buying Big Buildings [00:11:20] Acquiring Title for a Challenged Building [00:14:22] Purchasing Property Without Inspection: Renovation Challenges [00:18:18] Challenges of Renovating a Tall Building [00:21:44] Renovating a commercial building with complex systems [00:25:18] Navigating Complex Building Systems [00:28:50] The Cost and Condition of Elevators [00:31:52] Renovation Progress Updates [00:35:18] Renovating a Large Building for Short Term Rentals [00:38:28] Designing a Unique Hotel Experience [00:41:42] Challenges of Renovating Large Building [00:45:19] Determining Cost Basis for Building Renovation [00:48:45] Leveraging contractor bidding for better pricing [00:52:11] Considerations for Occupying a Building [00:55:34] Challenges in Construction Project [00:59:00] Water Penetration Issues in Atlantic City Building [01:02:00] Handling Stress and Excitement in a Project [01:05:04] Year in Review and Building Updates

Hosts Ryan Goldfarb and John Errico are back to discuss the benefits of creating their own direct booking website for their short-term rental properties in Atlantic City. Tired of relying solely on third-party platforms like Airbnb, they aim to increase their control over their business and provide a better guest experience. Through their discussions, they cover topics such as RevPAR, pricing strategies, marketing initiatives, the importance of a domain name, and collecting email addresses.

[00:00:02] Direct booking website for Atlantic City rentals [00:04:06] Improving RevPAR through Direct Booking Platform [00:07:17] The Power of Direct Bookings [00:10:31] Benefits of Focusing on One Geographic Area [00:14:01] Measuring Vacation Rental Marketing Success [00:17:08] Benefits of Dual Property Management/Ownership Model [00:20:25] Pricing Strategies in Vacation Rental Industry [00:23:51] Pricing and value issues on Airbnb [00:27:13] Maintaining Quality for Airbnb Rentals [00:31:14] Benefits of Using Guesty Channel Manager [00:34:39] Benefits of a Suitable Domain Name for SEO [00:38:03] Marketing approach for vacation rental properties [00:41:30] Email Collection Strategies and StayFi System [00:44:39] Maximizing Existing Resources for Atlantic City Rentals [00:47:36] Importance of Quick Decision Making [00:50:39] Special Offer and Call for Guest Suggestions [00:53:44] Podcast hosts encourage social media engagement

[00:03:49] By taking control of the distribution, we have an opportunity to do things like increase ultimately increase our RevPAR, which is the primary metric by which we gauge the revenue or monitor revenue of argument properties

[00:05:41] This is an opportunity for us to really showcase our properties, the quality of them, showcase the experience and attention to detail and focus on hospitality that we've been building out over the last few years

Having additional levers to pull from a promotional standpoint, including videos and more information, is hugely valuable and something that Airbnb doesn't like to show

[00:13:11] An advantage for us is that we can offer a discount to our Airbnb pricing and still ultimately make more money

What could we do if we couldn't buy any more real estate?

In our long awaited return to the airwaves, we debate a life-altering hypothetical.

Would we even want to live in such a world?

[00:06:37] Maximizing Distribution and Advertising for Direct Bookings (AtlanticCityVacationRentals.com) [00:10:21] Optimize Space [00:13:39] Stimulate Off-Peak Demand [00:17:25] Planning Unique Experiences for Workers and Special Events [00:28:02] Budgeting and Cost Controls [00:31:19] Grow PM Company [00:38:14] Maximizing Side Businesses [00:47:57] Using Occupancy and Pricing to Maximize Profit

[00:50:55] Debt and Debt Management

In this episode, John and Ryan discuss the hidden gem that is Atlantic City with former Mayor of Belmar and CRDA Executive Director, Matt Doherty. They dive in the impact of casinos in AC, real estate opportunities, and why it is high time to invest in Atlantic City today.

00:00 Intro

05:35 Role of Government in Private Investment

07:43 The Hard Truth of Redevelopment

12:51 Flip Side of Rooming Houses

14:00 Real Estate Opportunities in Atlantic City

18:37 Why Did it Take Long for AC to Flourish?

23:58 Why Invest in AC Now?

32:14 Matt's Time in CRDA

33:58 The Domino Effect of Improvement

36:21 Are Casinos PRO Atlantic City?

39:37 Transportation Issues To & From AC

44:46 Diversifying Neighbourhood Amenities

47:40 How Involved Are Casinos in City Development?

49:51 What's Next for Matt Doherty?

Podcast Channels:

🎧 Spotify https://tinyurl.com/56z3tk78

🎧 Apple Podcasts https://tinyurl.com/bdhwrxj7

🎧 Google Podcasts https://tinyurl.com/yabdwv38

Connect with us!

📩 [email protected]

📩 [email protected]

▶︎ www.facebook.com/brickxbrickpodcast

▶︎ www.libertyhudsonsolutions.com/podcast

▶︎ www.facebook.com/LibertyHudsonCapital

▶︎ www.instagram.com/libertyhudsoncapital

John and Ryan re-visit the existential challenge: balancing working "IN" their business vs. "ON" their business. While they have a long way to go, they've made substantial progress in the 28 months since they last discussed this.

Catch up and listen to Part I from 2019 here: https://tinyurl.com/bdexzcmm

00:00 Intro

01:46 The Genesis of Our Partnership

04:32 Working Evolution

05:34 2019 vs. 2022 Business Scale

13:53 Personnel = Business Growth

36:39 Advantages of Hiring Virtual Assistants

42:21 Tech Upgrade = Business Growth

46:14 People Management

51:40 The Small Business Paradox

54:18 Leadership Aspect in Business

57:50 Outro

Podcast Channels: 🎧 Spotify https://tinyurl.com/56z3tk78 🎧 Apple Podcasts https://tinyurl.com/bdhwrxj7 🎧 Google Podcasts https://tinyurl.com/yabdwv38

Connect with us! 📩 [email protected] 📩 [email protected] ▶︎ www.facebook.com/brickxbrickpodcast ▶︎ www.libertyhudsonsolutions.com/podcast ▶︎ www.facebook.com/LibertyHudsonCapital ▶︎ www.instagram.com/libertyhudsoncapital

John and Ryan discuss the short-term rental market drivers and discuss their approaching to evaluating new markets for investing in short-term rentals.

00:00 Intro

01:57 Asset and Location Based Demands

09:09 STR Regulations, Logistics, & Qualitative Factors

16:11 Understanding Demand Drivers

23:54 Consumer Tastes 26:05 Seasonal Market

31:33 Macroeconomical Concerns

35:15 Our Portfolio’s Baseline Demand

38:09 Analyzing Asset Price

42:48 4 Variables to Consider for Investors

46:24 STR Secret Sauce: Personnel

49:27 Operating Concerns

53:14 Our Approach to Entering a New Market

57:10 Outro

Podcast Channels:

🎧 Spotify https://tinyurl.com/56z3tk78

🎧 Apple Podcasts https://tinyurl.com/bdhwrxj7

🎧 Google Podcasts https://tinyurl.com/yabdwv38

Connect with us!

📩 [email protected]

📩 [email protected]

▶︎ www.facebook.com/brickxbrickpodcast

▶︎ www.libertyhudsonsolutions.com/podcast

▶︎ www.facebook.com/LibertyHudsonCapital

▶︎ www.instagram.com/libertyhudsoncapital

Welcome back to the Brick x Brick podcast. Today we have a special guest, Stefan Tsvetkov. Stefan is the founder of RealtyQuant, a firm that focuses on approaching real estate investments with a data-driven strategy to minimize the inefficiencies in the U.S. multifamily market.

Stefan started his career as a financial engineer and after a successful career in finance, Stephan ventured on his own path of innovation t start RealtyQuant. Throughout the episode, Stefan shares his wisdom on utilizing the power of data to improve the returns of real estate investments.

Connect with Stefan:

Website: realtyquant.com LinkedIn: linkedin.com/in/stefantsvetkov

A year after Airbnb’s IPO, it’s fair to say STRs as an asset class are here to stay. 

But, where are we in the life cycle of this emerging asset class? And what does the future hold?

Tune in as we dive into the trends we expect to shape the future of hospitality.