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Episode 15 - “Profit First for Real Estate Investing”

"Profit First for Real Estate Investing" by David Richter is a guide that applies the principles of the "Profit First" system to real estate investing. The book offers a step-by-step approach to managing finances in real estate businesses, emphasizing the importance of prioritizing profit from the outset. Richter introduces the Profit First method, which involves allocating income into different accounts for profit, taxes, operating expenses, and more, ensuring that profit is a non-negotiable part of the financial strategy. The book provides practical advice on implementing this system, including setting up bank accounts, determining allocation percentages, and monitoring financial progress. This approach allows real estate investors to build sustainable and profitable businesses while minimizing financial stress and uncertainty.

 

Key Concepts:

  • Sales – Profit = Expenses 
    • This formula is transformational because it shifts you from thinking about your expenses first and puts you and the health of your company first.

 

PFREI Implementation Steps: 

  1. Owners write down their “Need” and “Want” numbers
  2. How many deals do you need to do and at what profit point do you need to do them to pay yourself what you Need?
  3. Run an INSTANT Assessment on Your Business
  4. Calculate Your CAPs & TAPs
  5. Set Up the Foundational Bank Accounts
  6. Set Up 5 Additional Recommended Accounts
  7. 3 More Advanced Accounts to Consider
  8. Prioritize & Cut Expenses
  9. Run a PFREI Assessment of the Business
  10. Get the Maximum Return on Your Marketing Dollars
  11. Create a Deal Dashboard

 

Key Takeaways and Action Steps 

  • Run the Instant Assessment
    • Find out where your business stands regarding profitability
  • Implement Profit First
    • Download my checklist and start implementing this in your business


Overall Book Rating: 8 / 10

  • Transformational for your business
  • Simple, easy to read and understand
  • Actionable

 

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