Scaling Intelligently to Get Better, Not Bigger
Nate Trunfio: Welcome to another great episode of The Real Estate of Things podcast. I'm your host Nate Trunfio with Limo One Capital and we're in for a special treat today. This is a man that has been all around real estate. I'm going to name you the Investor Whisperer. I don't know if you've ever been called that.
Jason Medley: No.
Nate Trunfio: And somebody that I'm also going to use a word that I've taken and learned from you. You are a true go- giver in many a ways. Mr. Jason Medley with the Collective Genius. Jason, welcome to the Real Estate of Things podcast, man.
Jason Medley: Thanks, Nate. I appreciate you having me on today, brother. I'm looking forward to hanging out with you for the next 30 to 45 minutes and hopefully we can bring some information to the table that's valuable to everybody.
Nate Trunfio: I know that, and for those of you that don't know Jason or the Collective Genius, I'm just fortunate to have been in what I like to consider family in a mastermind for the last four or five years. And I know you'll provide a lot of value because that's what you do for a living is provide value and content and insights, whether it's firsthand or through others. And you have a phenomenal team and a great consortium, and again, family. How many members are in Collective Genius now?
Jason Medley: So right now, as far as members go, there's probably north of 500, but as memberships, so in other words, if it's you and a business partner, that's one membership. Membership- wise, there's about 322, I believe, 322.
Nate Trunfio: Awesome. So let's actually get there real quick. So there is now two different groups. What are the high level parameters, qualifications, if you will, to get into those? That that'll set the stage on who you surround yourself with and who you provide value to on a daily basis.
Jason Medley: We run two different communities. We have what we call CG Premier, which is our upper level community. To put a demographic on it, it's typically guys like me that are 35 to 55, they've been in the business for a while, they're established. They're probably running a multi- million dollar business anywhere to$ 30M to$40M business, some even bigger, some up to close to$ 200M. So it's a high level room. These ladies and gentlemen are typically on the house flipping side, flipping north of 100 homes, a lot of times have sizable rental portfolios or if it's on the multifamily side, they're typically buying a couple of thousand doors a year or so. So that's our upper tier. And then we have CG Select, which is demographic- wise, it's a little younger audience, they haven't been in the game as long, that's typically probably more like 25 to 35- ish. Again, they've probably been in the business for three to five years, not quite as established, still working on really creating a business that has systems and processes and getting their team firing on all cylinders and getting to a point where they're operating off of KPIs and just trying to pull it all together. And so those are the two levels that we have right now.
Nate Trunfio: So pretty impressive groups and very impressive content and value provided. Again, just being firsthand a member has been really where I've learned probably the most about what it takes to be an operator. And I think just to touch on a comment you hit, I think no matter where people are at in the life cycle of being an investor, I think everybody's still trying to figure it out. And that's to me what makes it so interesting, but we may circle back to that. So you see a lot of high caliber operators of all shapes and sizes all throughout the country, all in different investment strategies. These last six to 12 months have been a doozy. Talk about the people side of it. What have you seen from the membership and family base that you connect with as far as their thoughts, their actions over the last 6 to 12 months?
Jason Medley: Yeah, gosh, where to start there, everything has changed. That's really the best way I would describe it. I mean if you go back to when this first all started, which was... I feel confident that we called it and saw it coming. That doesn't mean everybody listens. I think it hit homes, the drum banged last summer. Again, we spoke of this well before. We're of the philosophy that you should always prepare for the future rather than trying to predict the future. And so we're always trying to prepare our audience for these things. But regardless of that, the gavel fell probably end of last summer. Q3 and Q4 were really tough. And the actions that people took, it was swift, it was drastic. People were cutting expenses, they were cutting people, their staff that have been with them for extended periods of time. They started really looking at marketing and saying, " Okay, I've got to cut this and increase that." Underwriting. Underwriting was loose because there was just this phenomenal spirit in the market in which if you found a house, somebody was going to buy it. And if you were off$ 5K on the value, let it sit for two weeks and be worth another$ 5K. And if I underestimated my rehab cost and went over$ 10K and it took me three months longer than I thought it. Instead of that being a sin, that was a blessing. You made more money because you messed up more because the inaudible were appreciating. So underwriting will ensure that you're actually buying a deal, not just a house. Those underwriting parameters and buy boxes tightened up dramatically. And the skills used in actually creating those buy numbers have had to be increased. A lot of people who were on a high and carrying too much debt, more importantly, not just a lot of debt, but short- term adjustable debt, had to really spring into action and try and eradicate that debt and replace that debt. And I've seen a lot of people too really realize how inefficient they are, number one, as CEOs and owners of the business and how they operate and how inefficient their teams and processes were. So my answer would be that everything has changed. There's also been a big shift, especially at the wholesaling level where it was all about sellers, " I got to find a house, I got to find a house, we've got a market for sellers and others." Big shift over into" I need to put as much love in finding buyers as I do sellers," because buyers were everywhere and then they tucked up and went away. And so you only had one side of the spigot that was running. We're in what I call the gap. We're in that spot between where sellers are still holding onto the pricing of yesterday, but an investor is unwilling to pay that price and until that gap closes and they meet again, it's just difficult to conduct business in a velocity of which is predictable and reliable. I think everything has changed the system. Even the systems and processes that people built to function in the market that was two years ago or three years ago, those systems and processes no longer work in today's market. So it wasn't just a slowing of volume. It was my volume had slowed, my lead sources have slowed. The people I had in acquisitions, I now need in dispositions and I don't have a structure for that. It just all kind of went haywire.
Nate Trunfio: Everything's changed. And you just covered a lot of bases there. But as you listen to this, you said it early on, and I can just tout this because I was there listening to it, it's collective genius, CG. You guys did call a lot of this. Not to say that you're predicting the future, but what I always take is just the sound principles and disciplines that are fundamental to run a business. And as there's all this tailwind and momentum as investors of all strategies saw over the last number of years, you can become complacent and then it sneaks up on you and then reality punches you in the face. And it's good to have a community around you to help support you and give you the ideas and solutions that you need to work through the issues. There's a lot of themes and I think we could take the whole podcast and then some to talk about some of the Collector Genius themes that you and your leadership crew have continuously pushed and kept present and top of mind. But can you just talk about a few of the top main themes over the last few years that you've been talking about to the Collective Genius family?
Jason Medley: Yeah, I think there are a couple over the last few years. When you see a market and it's frenzy, I'm 51, I've been through a few cycles, I've seen this before. The only reason I could speak to it from an educational perspective is because I, myself, had to learn the hard way. I'm a fast learner, I only got to hear it once or be the victim once, that's it. But yeah, there were a couple of themes and as the market was just getting so crazy and you could just make money with not really being operation tight, we were really pushing scaling to get better versus simply scaling to get bigger. There's a big difference, scaling to get better versus scaling to get bigger. And then we also have effectively the energy put into making it requires an equal amount of energy towards keeping it on the money side. So there are a couple of themes that we've really, really, really been pushing on. And the other side of that, I mentioned one earlier, our job is not to predict the future. Our job is to only prepare you for it. These things happen. It's not rocket science, whether it's COVID, whether it's interest rates rising at a faster pace than they ever have ever risen before, whether it's 2008, whether it's 9/ 11, I mean, I could go on and on. Those things don't go away. And so you have to conduct business where you're driving the line between safety and aggression, gas and brake, sometimes at the same time rather than just all gas.
Nate Trunfio: Good ones, man. You hit a lot of the themes too, that a lot of investors that maybe want to get into the game or that are really attracted to the game fall too much in love with and it diminishes their real ability to understand and then to invest and grow and scale. And it's really great that you as a consortium in Collective Genius continue to keep these principles in front of people. I think it's really important to dive into something because again, everybody wants to be bigger and better, but bigger, not just better. But you talked about too, the making money versus keeping money. And I think that's just a really important one to dissect, especially in today's day and age where it's harder to make money and it's always harder to keep money, especially in the way that you always talk about it. So help educate me there.
Jason Medley: Sure. One of the things that I would do is, I'm a deep thinker and you say a word that when you're saying it triggers me and to ask people, " I want to get bigger," " Well, bigger what? Bigger employee count, bigger deal flow count, bigger what, or bigger bank account? What did you start the business for?" I don't mean that from a sterile perspective, you got to do it all. You got to grow your team, but at the cost of what? There are a lot of people who are doing a lot of business who right now don't have any money because they were focused on getting bigger in deal flow. " I flipped 150 houses instead of 120, or I went from 10 employees to 30 employee." Well, if you were operating in environment or vacuum, which left you at a point when the market changed, where all that evaporated and money evaporated with it, did you get bigger? Because there's somebody who only flipped 70 houses, they ran an efficient business with far fewer employees and systems and processes in place and financial discipline, probably more importantly. And they're laughing to live another day and you went home and they're still playing. So I think you really have to think, first of all, "I want to get bigger." Well, take a minute to slow down and actually define that. Or" I want to scale." " Well scale what?" So just ask yourself those questions. What does that really truly mean to you? " Well, I want to scale. I want to go from 100 to 200 deals." But if you go broke in the process, does that matter? Or if you don't make any money, does that matter? I'd rather flip 70 deals and make $1M than 200 and make none. I think you got to always be asking yourself when you create goals, the words you use are important and what they mean to you are important. But to get deeper on your actual question, Nate, there are disciplines in place. We were talking before we fired this up, and it's something that I am incredibly passionate about, is that I think too many investors try to move into the wealth bucket before they get the income bucket right. Before we get into this, because I have a feeling we're probably going to spend a bunch of time on it, this is a discussion that's going to have a lot of generalizations in it. Everybody's different. Everybody's in different phases, different stages of their business. Everybody's got a different set of circumstances. So we're speaking in some general generalizations, but a lot of the books, Rich Dad, Poor Dad, at a lot of the things that we're taught is, well if you're a real estate investor, then you need to start buying those rental properties. And the reality of it is our audience that we target, Nate, which is typically your flipper, high volume flipper, I think that is actually the last thing that they should do initially. And the first house that they buy to keep should not really be for the$ 200 a month that's going to throw off from an income perspective, but more so the reason they bought their first house is because their active income has become so large that they need the depreciation to offset it, not the$200 a month or the costs, say of a portfolio. My thoughts are this, if you start, okay, I got into the business, I'm making a couple hundred grand flipping houses and now I went and I put$ 30K into buying a rental, and what do you end up with at the end of that, you got one property and$ 200 a month after all the bills are paid and a new headache and you just sucked oxygen out of your core business, your active income, you sucked oxygen out of it to go over here and buy a$ 200 a month income producing asset in exchange for$ 30K. That's half a salary for the next person on your team. And so my thoughts are, if you look at money in silos, you have your active income silo and I think your active income as a wholesaler, a rehabber or someone who wholesales and rehabs or what have you, that active income silo should be distant, predictable before you start stripping money away from that source to buy assets. Because here's the reality of it, in most cases when you first start building wealth, there's active income and there's wealth. Wealth is your long term strategy. How many houses do you got to have spitting off$200 or $ 300 a month before you look up and go, " Wow, I've got quite a few bucks coming in just from my portfolio." It takes a long time. The more beneficial gain is actually in the beginning come from offsetting that through either cost savings or depreciation offsetting your income. So why don't we focus on the fact that the fastest way to a large passive income right down here in the wealth side of things is to create a massive active income. Because what happens is instead of stripping money off initially to try to start creating wealth, if you go from making$ 200K to$ 500K to $750K to $1M to $2M to $3M, you create an environment where now instead of stripping monies off to go say buy a house, instead of buying houses, you're buying people. You're buying rock stars for your team so you can look up a few years down the road and go, " Wow, I'm making a $1. 5M, I got a rockstar team. I'm only spending$300K or $ 400K to live. Because quite honestly, it's hard to spend more than that. You can have the good life, the houses, the cars, the kids in private schools, take nice vacations and you reach a point where everything over and above that is more money than you're going to spend. And now that wealth bucket starts to become relevant because you're like, " I've got all this excess. I actually need to offset my active income and go buy some property, some assets to counter that from a tax perspective." And then that becomes so easy because if you're going to spend$ 30K to buy a house and you're making$ 400 or you're spending$ 400 but making$1. 5M, every month you're buying a house when you get to that point. Every month, month in and month out. Maybe two houses, but more importantly, you're not stripping the oxygen, the cash from your business to do it. Granted, there are other strategies. There are burrs, there's other ways. But at the end of the day, if you start in" investing" or getting into that wealth bucket too early, you're stripping not only monies but focus away and your core focus should be that active income bucket that you are just relentlessly focused on building and increasing. Now, here's the concept that I think is between active income and the wealth building bucket. There's several buckets in between because a lot of times what happens is if you start taking a lot of your active income to buy real estate, et cetera, when something happens like the situation we're in right now with massive increases in rates, you start to think. Think about Q3 of last year. What did everybody want in Q3 of last year, there's only one word.
Nate Trunfio: Money.
Jason Medley: Money, cash, money. Equity's money, but you can't eat equity, you can't eat net worth. Everybody wanted cash because cash was getting sucked out at every... And so my thoughts are, " Okay, I've got a bunch of assets, I have equity in those assets. My net worth is growing inside of those assets. But as far as from a cash perspective, they're not spitting off a ton of liquid cash." You say, " Oh, well I'll just go recap them." Recapping right now is pretty hard. So create a dynamic where your active income is, you've put so much focus on it's so large and it's growing so quickly that you say, " Between my active income bucket and my wealth bucket, I'm going to actually create a retained earnings bucket for my family, a retained earnings bucket for my business and a retained earnings bucket for my taxes. And then I'm going to set thresholds for each of those three buckets." And everybody's got to have to think through their own thresholds, but if you say to yourself, " You know what? It costs me$ 20K a month to live, and so I'd like to have peace of mind knowing that if things came to a screeching halt, I could take care of my family for a year. So I would like to get to where I have$ 250K in that family bucket." It's no touch money. It's there for massive emergencies. And then, " With the business I'm running right now, I'd like to have$ 250K into that as well for emergencies, when things slow down, I don't have to fire all my people, I could keep them and not have to rebuild. So let me start on a monthly basis. I'm going to put$ 25K a month for 10 months into my family bucket," and then whoa, I hit that threshold, I'm done. " I'm going to put$ 25K a month for 10 months into my business bucket." I hit that threshold, I'm done. And now you say, " I've been responsible," but now if I were to put any more cash away, I'm almost irresponsible. And so I'm going to start taking that$ 25K a month, $ 30K a month, whatever the number is, and since I've hit those thresholds, I don't need to continue putting monies into them right now because I've created a layer of safety for myself. That way now that my active income silo is on fire, my family's taken care of in emergencies, my business is taken care of in emergencies. Now when I come out over here to the end and start focusing on the wealth bucket and take the$ 25K I was putting in my personal account or the$ 25K I was putting my business account, I hit my thresholds. Now I'm coming over here and every month I'm taking$ 25K to buy a house. Now if the market turns super, super fast, even though I might have a bunch of equity in those houses, I don't have to worry about trying to get it out because I've already created my buffers.
Nate Trunfio: You said you were a deep thinker, man, and that was some deep insights right there.
Jason Medley: Here's what I would have you think about. Let's take it a layer deeper.
Nate Trunfio: Yeah, please.
Jason Medley: The active income silo, that's driven by education, by skillset, by drive, by tenacity, by grit, grind, all those things, they are things that you have to control if you will. I've got to improve my skillsets, I've got to work hard. All those things are things you have to control, things you have to continue to manage. The backside of that, everything on the backside of the active income box, taking the account for your family, the account for your business, then moving into the wealth box, those are systematic disciplined rhythms. They're just commitments, they're just disciplines, they are not reliant. Again, there's some generalization here, okay, yes, if you start buying assets, you will have to have some level of intelligence to manage those assets, but just bear with me at a high level. Most of those things are just discipline. If I do them and I do them consistently, predictably, and reliably, you are almost all but guaranteed to become wealthy above and beyond just a big active income. It's a matter of discipline. Every month I'm going to put the$ 25K there, then once that's, every month, I'm going to go buy a house. And if you do those things, it's all but systematic because it's driven in discipline, not so much as the active income, which is around skillset and intelligence, education, et cetera.
Nate Trunfio: These disciplines and many, many more is what you and your leadership group at Collective Genius are very often talking about. And I think one of the challenges, even with people that are in Collective Genius, another D word, distractions. So as you see a lot of different operators and a lot of them at very high levels, what are some of the main, you talked about distractions, but what are some of the main reasons or distractions that you think take people away from focusing on disciplines?
Jason Medley: I think the major distraction is that people struggle to work efficiently, and I'm sure you're like, " Okay, well what does that mean?" Gosh, you're about to get inside of here and see how warped this thing is.
Nate Trunfio: It's a beautiful mind. Let's go.
Jason Medley: Okay, here's what I mean when I say work efficiently. I spoke to a gentleman yesterday and I said, " How many emails do you delete a day, let alone respond to? We haven't even got there yet, let alone respond to, how many emails do you delete a day?" He said, " Probably a 100." I said, " So I'm going to say between pushing the delete button that many times, two seconds a pop, 200 seconds, 200 seconds divided by 60 seconds, it's 3. 3 minutes a day times five days a week, you go on vacation at least twice a year, so times 50 weeks a year, that's 833 minutes divided by 60. Sir, you are spending 13. 8 hours of your life every year deleting emails. Do you really want me to start talking to you about high level tasks?" Learning to think from an efficiency perspective of how you actually handle your work is to me, one of the biggest barriers for a lot of entrepreneurs in that there are things like... The biggest thing that I would tell people is if you don't have a high level personal assistant where you do all the talking and they do all the typing, you are playing at a super subpar level as a CEO or owner of your business. Let me give you one more example. Let's say last year I had 17 K- 1s. Each one of those comes into my email as a link to a portal to go get the K- 1. That email has to be seen, read, processed. Link has to be clicked, go out, click the link, open the PDF of the K- 1, download it to hard drive, download it up into Google Drive or Tax Caddy for my CPA. Each one, minimum five minute process times 17. You've got to get to the point where all of the processing of things at an administrative level can be done by someone else, and you have to get to the point where you talk it and don't type it. So how do you do those things? One of the biggest tools that I use and even getting to a point where now, not just for me as a CEO of Collective Genius, but to the point where we're splitting virtual assistance between our top level people. You go get a$ 22,000 virtual assistant, $ 11K for each two executives to help them process this kind of stuff that I'm talking about. But Voxer is an amazing tool because each morning, if you start out... My morning starts out first thing with a 30- minute meeting between me and my EA. I don't look at email, I don't process it. She goes at 9: 30AM, looks through, takes only the items that require my response, stars them, moves them to a spot where it sorts by star. Everything else that she can handle, she handles. She goes and gets the K- 1, she downloads it, she puts it in Tax Caddy, whereas only the ones that are starred... And then when we go over the starred, she might be saying, " Hey, Eric Brewer asked to schedule a call with you, Brian and Leon to talk about this potential partnership." That is trying to coordinate four very busy individual's schedules. Here's the masterful piece of this. When you get really good at thinking about this stuff, you don't even get involved because she doesn't need my involvement for that, all she needs for me to say, " Hey, do you want me to handle that call, setting that up?" All I have to say is" Yes." I don't have to type the response. I don't got to put that email together with those other three individuals, go back and forth seven times for four people to find a call and then put it on the schedule, attach a ZOOM invite and get it. That to me, people who are not valuing their productivity and their dollar per hour is what's keeping the majority of them from being focused. When you're doing all that stuff... Here's a key difference. There's a difference. Do you have a to- do list, Nate? Okay. I would challenge you to look at that to- do list, write one column of to-dos and then one column of projects. I promise you, you've got projects on your to- do list, not to-dos, not things you can just check off, they're projects. What happens is we don't separate those items. The only reason I can speak to this, because I did it for years. For years, I put all that stuff in one to- do. They're not to- do, some are to- do summer projects. What keeps us from ending up at the end of the day, every day we're like, " I didn't get to what matters, I didn't get to my projects, I didn't get to the ROCs on my one- page plan." And that infuriates you and you just like, "I got a lot done today, but I didn't get anything done that mattered and I'm frustrated and I feel like a failure and I'm pissed off. Excuse my French. The only way that you do that is to begin to understand there's a difference between to-dos and projects and the to-dos have to be mastered between you and someone else. All those to- dos takes hours and hours, but if you really have a high level daily meeting between you and an assistant who can handle that stuff, because what happens is you don't ever get to your projects because you're the one doing all the to- dos, scheduling appointments, responding to emails, when you could just hit the Voxer button and say, " Hey, the email that Nate Trunfio sent me about getting on this podcast, go ahead and get that scheduled up." There was not a single email that you got from me, Nate, that was me. It was my voice. I dictated it, but I didn't type it or create it. As far as scheduling goes, you think to yourself that you got to find that scheduling point with you and your assistant. " Well, okay, you want me to set that up? Well, what day?" No, you come in, you designate time blocks. Mine are Tuesday, Wednesday, and Thursday between 1:00 PM and 4: 00 PM. I will take calls, podcasts, all that kind of stuff in those blocks and when those are blocked there and when the to-dos are being handled at the high level executive meeting daily, you start to free up time in your schedule to go, " Whoa, I could stick a project in there for three hours. I could actually get a project done. I could actually go home and not feel defeated today." Because all this stuff that's sucking your life and creative energy away, that's what you're spending the majority of your day doing. You might say, " Oh, well my business isn't big enough to require a full- time assistant." Well get a EA for four hours a day, $ 11,000 or get one for two hours or whatever. Don't put constraints on yourself based upon the size of your business. You might have a business big enough, you need a couple, I don't know, but don't pigeonhole yourself in a spot where... A perfect example, Nate. We have two people in CG right now that are struggling with some health issues and I wanted to do something nice for them and so we got them autographed boxing gloves by Mike Tyson, sent them a note and said, " Hey, whatever you do, just keep punching." I had the idea for the boxing glove, but I didn't find it. I didn't buy it. They were shipped here. The stationary was printed out, put on my desk, I wrote the letter. All I did was write the letter and give it back. It was ordered, it was shipped to them, everything. And so if you don't become a savage around productivity and efficiency, it is very hard to progress at the speed that you want to progress at. Our biggest frustration is entrepreneurs is closing the gap between our reality of today and our vision for tomorrow. That's what frustrates you every day is that speed in which you are closing that gap. And usually what's ensuring that you go slow is not thinking about how you can optimize the way you work.
Nate Trunfio: Man, first off, I feel like you're talking personally to me on all this because I can really, really relate splitting to- dos versus projects. And that's why to- do lists get to be way too long to ever overcome and then that, " Oh crap, I'm super pissed at myself. I didn't get anything done." Look, I think we always say in any realm, in any organization, one of the hardest things to do is figure out prioritization of time and then certainly tasks and then that ties into execution, your ability to scale as an individual, as a team, as a leader, as a company, and so on and so forth. Everything that you just talked through, you the listener can apply whether you're actually in real estate investing or just trying to be a better person, even bring it to the family side, which I know is always close to your heart, being a better father, being a better friend and prioritizing what you're doing and making sure that you're not brought down by mundane tasks that can be done elsewhere and with some more strategic thinking. And I just appreciate you sharing that. And to me, it certainly touches me personally because I know I can personally relate, I know you listening as well. If we get back to the investing game because we got there from how do you stay disciplined? And again, managing your time and working on what gives you a good ROI on that time is really important. There's a lot more going on in the market and in the game right now. And one thing that I know I've heard you talk about that I'd love for you to share, is it too hard out there? Is there too much risk or just should investors be investors in 2023? And how should you look at being a real estate investor? If you can tie some of that together for me.
Jason Medley: That's a broad question. Given that everybody's in a different phase or stage of their business. I'm personally somebody that thinks if you're a killer, it's always a time to move forward. If you're thinking about getting in the space, but you're like, " Oh gosh, it's gotten harder." It has gotten harder, in reality, it's just returned to normal and it was so not normal for an extended period of time that it wasn't normal anymore. And so there's still going to be 4 million to 4.5 million houses bought and sold this year. It's not 6. 6, maybe like it was during the last 24 months be before interest rates really started rising. But still 4. 3 to 4. 5 million houses are going to be traded this year in one form or fashion. You don't need to do that many to make a great living. I'm not suggesting it's easy in any shape or form, but if you've got what it takes, I think there's no time like the present to either one, get started, or number two, if you've been in the business for a long time, I think these are the periods where you separate yourself from the competition. There's other people, they got to go home, they got to go home. And so you might think, " Oh, well the transaction volume's been cut dramatically." Yeah, but there's fewer people sitting at the dinner table. And so I think there's massive opportunity. And with all due respect, I think you absolutely have to proceed forward with a lot of caution right now. I'm not trying to come across as hammer down. I definitely think we're in an environment where you have to truly, truly be cautious with risk. If you're, say for example rehabbing properties or anything that involves debt, I think you should have a debt to cash reserve ratio, which most people don't. Most people don't even probably, " What does that mean?" Every dollar in debt you take on or debt service debt, every dollar in debt service should equate to a reserve of cash. So I think you got to proceed with caution. But I think if you're a driven individual who is continuously and relentlessly pursuing excellence, that right now is an amazing time to do that. It's a great time to pick up talent while other people are letting talent go. And if you've had the financial disciplines in place, you've got the reserves to be able to do that right now. It's a great time to pick up talent. It's a great time to improve your systems and processes. It's truly a great time to be out fostering relationships. Maybe the person that knew that agent that you've been after who was referring deals to Joe over there, now Joe's out of business, now's your time. So I think it's a great time to be an investor, but I do think that you have to operate with a level of caution. And if you're in the game or just getting into the game and maybe not doing a whole lot, if you can get it figured out on the bottom side, what happens on the upsides? You're going to crush it. So if you can cut your teeth right now, I think when the market stabilizes and gets heated up again, I think there's a lot of opportunity. So I'm someone that says, yes, press forward, but press forward with caution. I think there's a balance of safety and aggression that needs to be respected right now. I agree, I think that needs to be all the time. I'm a little bit of gas and a little bit of brake guy. I'm never all gas, but those are my two cents, if you will.
Nate Trunfio: I knew that you would take a glass is half full approach, but with discipline, which we've talked a lot about here. I think that's probably a great place to leave the audience with now, but you're definitely going to have to be coming back. So before that, I will actually ask one more question.
Jason Medley: Sure.
Nate Trunfio: I know there's all these different kinds of shapes and abilities to use a crystal ball, but in the Jason Medley crystal ball, what do you expect real estate investors to go through over the next, just the rest of this year, let's call it, through the end of 2023? What would you say that we should expect in your crystal ball?
Jason Medley: Sure. First of all, I would say the ball is foggy. It may be a crystal ball, but it's not crystal clear. If I had to give my 2 cents worth on that. I think the Fed after this last raise is probably done. Maybe there's another 25 basis points in there, but I think they're done or they raise another 25 basis points. Not that the fed rates are tied directly to mortgage rates. I'm not insinuating that, but I think in general, the market in the last two months relative to Q3 and Q4 of last year seems to have stabilized, but I still think that there's some pain to be had. That's not meant to be negative. If I'm standing on my dock and I throw a rock 20 feet away, I can see the impact and I know it happened, but the ripple doesn't come back to me at the dock for quite some time. And I don't think we felt the brunt of the... The hit has been taken, but the bruise has not shown up as far as what the Fed has done. So I think we've taken the hit. I think we're seeing a little green, a little, but the bruise has not showed up. So I think there's still some pain to come. I think you have to be incredibly diligent. I think you have to pay incredible attention to your underwriting. I just think you have to be incredibly diligent right now. And I think you still have to be the rest of the year. I would not get too Lucy Goosey, I just don't think we're done yet. I would still continue to move to cash if possible. I would accumulate as much cash as you can. If you've already got cash, I think there's going to be more opportunity, but I don't think we've seen it yet. I don't think we've seen it yet.
Nate Trunfio: My crystal ball is if yours is cloudy, I definitely don't have one, but I do tend to agree with you and some really insightful wisdom that you dropped throughout this entire show here, Jason. Lastly, a lot of people should be attracted to wanting to hear more, not only from you, but you've tremendous leadership group with you.
Jason Medley: Yes.
Nate Trunfio: I know you'll always praise because they are truly that. They're truly phenomenal. How can somebody find the Collective Genius or find you?
Jason Medley: Sure, if you're looking to find us, you can go to dominatethedownturn. Again, dominatethedownturn. There's a video there that gives you insight or behind the scenes, if you will, of the events that we put on and the caliber investors that are at those events and how those events function and what you could expect to gain if you were to attend the one. So it's again, kind of a behind the scenes showing of what Nate experiences when he comes out to the Collective Genius. And if you want to learn more, you can go check out dominatethedownturn, or you can go to learnmoreaboutCG. LearnmoreaboutCG has a ton of very explicit examples of the benefits that our members have experienced from being inside of our organization. The partnerships they create, the joint ventures they do together, the syndications, lending, borrowing money. As Nate would tell you, buying and selling houses with each other, you name it. So you can check out either one of those domains and once you get there, if you want to learn more, we'll be telling you what to do.
Nate Trunfio: That's so awesome. Well, thank you again, Jason. And please go check out dominatethedownturn or learnmoreaboutCG if you feel compelled to, and if you feel like you fit in that box, some phenomenal people. And again, thank you so much for what you've dropped on us today, some big knowledge bombs, man.
Jason Medley: Thank you, sir.
Nate Trunfio: Appreciate you for always giving.
Jason Medley: I appreciate the opportunity to be here. Thank you.
Nate Trunfio: And that's a wrap. Thank you, Jason Medley, CEO of the Collective Genius. We covered a lot of ground here and it was another great episode. Please make sure to subscribe on your favorite platform. Check us out every Tuesday for our new phenomenal episode to drop with more power guests like Jason. And you can always find all things about us on our website, realestateofthings. co. We will catch you next time.
Keeping a laser focus on your major projects and visions can be quickly derailed by those pesky secondary tasks!
This week, we sit down with Jason Medley, CEO and Founder of The Collective Genius, to discuss the importance of discipline in real estate investing. Jason shares his insights on the benefits of focusing on major projects and delegating tasks to achieve better results rather than just getting bigger. He explains the difference between active and passive income streams and the role they play in scaling intelligently. Tune in to learn how to develop systemic disciplines for effective real estate investing and take your investment game to the next level.
Tune in for:
- The challenge of making and keeping money efficiently as you scale
- Active income factors vs. passive income factors
- Bringing maximum efficiency to your responsibilities with discipline and delegation
- How do rising interest rates impact 2023 going forward, and could the Fed keep doing it?