Paul David Thompson – WinCore Invest

Episode Transcription

00:00:00 – Glenn Harper

Hello, everybody. This is the Harper Plus podcast, I’m making entrepreneurs great, Glenn Harper.

00:00:06 – Julie Smith

This is Julie Smith,

00:00:07 – Glenn Harper

And our guest today is Paul Thompson, a real estate investor. A fellow entrepreneur. Another podcast host. And just an all around good guy. Our paths crossed, and we thought he’d be a fantastic guest. So welcome, Paul. How are you?

00:00:21 – Paul Thompson

I’m amazing. I’m really excited to figure out what we’re talking about today.

00:00:25 – Glenn Harper

Well, I can tell you this the first thing we have to get out of the way, we got this elephant in the room and and looking at your bio, the rumor has it you used to be an engineer or do you still have those tendencies? I got to get that out. No.

00:00:38 – Paul Thompson

No. I needed a job at a college that paid money. So and I happened to be good at math and science when I was in high school. So I found myself an engineering school and ended up working as an engineer for 15 years, 17 years, I guess in the corporate world. Before I realized that that wasn’t my calling,

00:00:57 – Glenn Harper

That had to be horrible.

00:01:00 – Paul Thompson

It had good spots and bad spots. Corporate America can just they just ring ring you out and just leave you out to dry whenever they decide it’s not. You’re not worth it anymore.

00:01:13 – Glenn Harper

Is that, you know, as you start in the corporate America, is that kind of when, you know, usually an engineer is the, you know, the smartest person in the room and then but at some point you recognize you’ve got to kind of get other relationships and teammates and that kind of thing. Did you have that consensus consensus when you were in corporate America and realize that? Or is that when you went on in your own that you decided that that’s how it has to work?

00:01:39 – Paul Thompson

Well, it’s interesting, I when I was in the corporate world, I was an engineer for several several years, an actual, you know, individual contributor that would refer to it as. But then I realized I wanted to be in the rooms where they’re making decisions. So I went into management and I kind of kept climbing the ladder. And I liked being in the rooms where they kept making decisions. But I realized the more doors that I went into there was always another door that I wasn’t in. So until you’re the CEO of the company, then you’re not going to always be in the decision, the ultimate decision maker. I finally realized, you know, let’s just go do my own thing where I’m always, I’m the one who decides where the room is in the first place.

00:02:18 – Glenn Harper

So that was that aha moment was because you wanted to be the guy making the decisions or you wanted to do something great on your own.

00:02:27 – Paul Thompson

Good question. I wanted to do things that were interesting and learn what it takes to make those interesting decisions. So part of that maybe is the engineer background is I want to build things. I want to make things that are interesting. And I found that that growing and building businesses is really interesting and really complicated, and there is no one right answer. And so that really is the drive to for me is to to grow as a person is what would it take to where I could control my lifestyle? It was more of a lifestyle design than it was like. I had to be a maker of some amazing invention. I don’t have any new ideas about being an engineer. I’m more of a, I would say, a visionary, but I want to come up with an idea and I want to hire people around me to go make this stuff because I’m not actually the engineer.

00:03:20 – Glenn Harper

So that is so, such an interesting track because, you know, I would say the majority of clients and colleagues that I come across, they are they’re trade in corporate America. Whatever it is, they do this thing like you being an engineer and like, OK, I’m going to I can be a better engineer somewhere else. I don’t want to deal with all this BS. I want to go do it on my own and they go, Do that job. As an engineer, self-employed, you bypass that and you went. Instead of just doing business, you decided you were going to build a business. And it’s a talk about balls of steel to be able to just go out there and just say, I’m going to pick real estate like something random that you never did before. How did you settle on that? I mean, that’s a that’s a big ask. I mean, that’s a very complicated industry. How do you just go? That’s the one I’m going to do.

00:04:08 – Paul Thompson

It’s funny. I think I chose it because it was the least complicated and specifically by real estate. It can mean some different things. I specifically started buying rental property just very simple single family residential rental property. And as the conflict, the level of complexity goes, that’s actually quite simple. And as as an employee, I could go and buy one rental property and just see if it worked because I really wanted the impetus for all of this is really I wanted to control my lifestyle. I wanted to change the script where I was not having to ask permission from my boss to spend time with my family. Instead, I wanted to spend time with my family, so I would then ask them permission. Could I go and spend this weekend a conference learning about something? Did that make sense with our life values at the time? So I really changed the order of operations and when I looked at the things and so I was like, How what can I do? Or that is that order of operation works and doing something on my own was one of them, and I wanted to do something where I wasn’t buying myself another job. I looked into doing insurance. I looked into starting a franchise. All those things felt like I was just buying a job. So what could I do that just created passive residual income, but I could do some work on the front end. I thought, Well, real estate seems like something that fits that category. I started buying a few properties, and I don’t know what. 18 months later I had a I had purchased 18 properties and I realized this was my thing, and that’s when I realized I didn’t need the corporate job anymore.

00:05:36 – Glenn Harper

So you were able to keep your real job and do the entrepreneur thing on the side for 18 months. You know, one would say that that’s pretty. That’s a bold strategy. Cotton like how do you how do you keep a real job? Do your family and take that leap of faith and say, I’m going to do this and you didn’t just buy one like you said, you bought 18 of them. I mean, you’ve got to get your head examined, Mike, who does that? So, so so that’s the I think the impetus for me on this or the takeaway is that any entrepreneur out there listening to this is that you just have to go do it. You can’t think about failing. You can’t think about those things. Did that even come into your mind that it wasn’t going to work? Or do you just said, I’m just going full speed? This is what I’m doing.

00:06:22 – Paul Thompson

So a really good question. I think this really gets to the nugget of the entrepreneurial spirit. It’s I sit on the sidelines for 15 years of my corporate life, kind of wishing and hoping and dreaming that I would go and do something else, but I stuck with a security. Are the the appearance of security that you have with a corporate job and the consistency of the paycheck, right? And I realized that I had to get out on the field. That’s the analogy that I often use is I want I had the vision of playing on the field and but but I wouldn’t do it right. I was afraid of failing, and our culture kind of changed that into us. Our educational system, for sure, trains into us that you’re not supposed to be ever be wrong. And that’s not how business works. You have to go out and do experiments. Now you’re not silly and foolish about it, right? I didn’t just throw caution to the wind. I took a very careful and measured approach. Let me go buy a property. And when I bought a property, I was able to refi and oh, this doesn’t work. Let me go, buy some more. And then I did the next one. I did the next one, and I happened to be doing that in 2015, when it was easier to buy properties and it is now. But it still wasn’t 2012. I mean, it was harder than it was just three or four years prior to that. But I realized that was the opportunity that you could find deals at discounts. And I really got into the game of finding that gem of a property that I was buying at 30 percent below what the market value of the property was and at cash flow. And I could get really low interest rates at the time. There real interest rates now because higher interest rates. But still six percent or less. And that, I feel like, was a very measured and careful approach and not at all throwing caution to the wind. But I was not afraid to make mistakes. My mistake was not trying for 15 years.

00:08:11 – Glenn Harper

You know, it’s funny, though timing is everything. If you’d have started this in 2005, six seven eight when everything blew up. Who knows what could have happened? You could have still had the same great strategy and weathered the storm, and you’d have even greater opportunities. But everything happens for a reason, right? But would you would you when you made the jump out on your own? Did you have like a mentor or somebody that was coaching you through this? Or did you just say, Well, I got to figure this out on my own?

00:08:42 – Paul Thompson

Good question. So I very early learned or heard the advice. Find a mentor fundamentally. And you know, like finding a mentor is actually not as easy as people make it out to be because the people who are offering their services to you, usually it’s a paid transaction or it’s a paid experience, and you just don’t know if they know what they’re talking about or not. But I was very lucky, and I went and found I did some sort of Google search and I found somebody that was in a market about an hour from me, so probably not considered competition. And I emailed them and said, This is what I’m doing and I’m interested in mentorship. I’m willing to exchange my time, my energy, anything to help you in your business as an exchange for me learning the business. And he is a very interesting story. So two or three weeks later, he called me up and said, Hey, I got your email, I like to talk to you. And he was kind of a mercurial, interesting kind of odd cat. He said, I’ll mentor you, but here’s what you got to do first. You have to go by the book The Richest Man in Babylon. I want you to get a physical copy.

00:09:47 – Paul Thompson

I want you to read it, highlight it and write a three page handwritten essay. And then I want you to mail it to my P.O. box. And after you do that, I’ll talk to you. So it was his way of testing people if they’re serious and if they’re coachable and teachable. So I did it, and over the next two years, I probably wrote like six seven eight handwritten, three page essays on different books that he sent me. And then what he did, probably better than anything else, is he sent me to, he said. Here’s a conference coming up from Pete Fortunato. Here’s a conference coming up from Spotify. Go to these are like the grand old men of real estate. They’ve been doing it forever. They’re not into it for like this mentorship $50000 service in the back of the room kind of thing. They’re just these guys have been doing it for 30 plus years. They have these courses on the weekend, and that’s it. There’s no more upsell. And I went to those I went to over about three year period. I probably went to like, I don’t know, 20 plus of those, and I got a master’s level degree in real estate in a couple of years.

00:10:47 – Glenn Harper

I am just absolutely intrigued that. You. When you ask for somebody to mentor you and they give you back a test, not many people would have said, Screw this, I’m not doing that. That is what there had to be something. And again, you you probably you don’t know it consciously, but subconsciously there had to be something that in you. That said, I just have to do this because that is opposite of everything else you were trying to do. So what was that? What was that calling? How did you know

00:11:20 – Paul Thompson

It felt like a Mr Miyagi moment? It’s like, Oh man, this is some like real live wax on wax off shit and like, like, like, I’ve got to like this. I’m not sure if he actually knows what he’s talking about or not, but I checked him out. He seemed like he was legitimate, like, Let’s, let’s do it. What was it? What was the cost to that? Really, it was reading a book that I probably would have been happy to read anyway, setting up a good practice of highlighting and taking notes of a book you should be doing anyway, and then writing a three page essay, which I did not enjoy the handwritten part of the essays. That was horrible, but that was a test for him. That was like, I’ve been further, further into it. I kept asking him like, OK, well, you know, I’ve done these handwritten ones. Are you ready for me to just send you a report? You know, I want them all handwritten

00:12:04 – Glenn Harper

In cursive or print it?

00:12:06 – Paul Thompson

He didn’t. That was not part of the specification.

00:12:09 – Glenn Harper

I was like, if his cursive would be over,

00:12:13 – Julie Smith

No one could read. Glenn’s handwriting is why. So he would have had this three page essay and no one would have had any idea what was even on that.

00:12:19 – Paul Thompson

And these hieroglyphics? What are you doing?

00:12:21 – Glenn Harper

I’m using me Egyptian hieroglyphics because I can understand pictures. So when you you know the ability, you know what we see sometimes in entrepreneurs, you know, they have this idea. They want to go do a thing. But the point when it becomes real is either when, in your case, the realness is you had a desire, you already had bought a property, perhaps before you talk to this guy. But then when you had to write that dissertation back to him, you were literally kind of made your manifesto, if you will, right? And why you want to do that pretty much turned it from a dream to a goal, right? Is that was that the kind of the thing that made it happen for you?

00:13:01 – Paul Thompson

Then that is and I actually came out of one of those essays. It was something to do with I forget exactly the book, but it was a book by Jim Roan that he had me read. And as I was writing it, I realized there was some ego in what I was writing. I was for some reason was had this as I was writing it, like I had typed it all out and as I was handwriting it, I just kind of realized, Damn, I’m I think I’m something else. Like, I’m I’m putting myself out there as this successful corporate middle manager and I’ve done all these things. That’s all. That’s irrelevant. Those are good lessons. There are principles I took from it, but I was I had to let go of my ego and be vulnerable and be willing to not know what I’m talking about in this new world. And part of that exercise helped me consciously come to that realization,

00:14:05 – Glenn Harper

Literally as an engineer. That was your aha moment, literally when you realize that you didn’t have to know it all and you could, you have to put yourself with a team around you and hire your experts. How after that with this guy started mentoring you? Did you did you like, you know, the trifecta of a business owner is, you know, or an entrepreneur, you want your CPA, you want your attorney, you want your banker, you want your appraiser. You know, in your case, you probably want some kind of motivation or or, you know, counselor of some sort. When did you start putting that team together?

00:14:41 – Paul Thompson

Hmm, that’s a good question, especially on the the attorney and CPA front. So that that’s I know you probably resonate with this. That’s a kind. It can be a very difficult thing to figure out when you need it and at what level you need those services. So I found the banker and I found the letter. See, which would you say? I found the appraiser appraisals and I found the realtors, but I didn’t deal with the attorneys or the CPAs too much earlier, because when you first getting started, you don’t actually need those services that much because you’re not making money. It’s not until you start making money that you realize, OK, now I’ve actually done some things. I’ve actually had some expenses but actually bought some properties. Now I need to file taxes. That’s when the CPA comes in and with with the attorney. Unless you’re doing, you’re messing something up. I mean, like a lot of the state contracts, we’re just using state contracts anyway, right? So it’s not even that that complicated from a real estate perspective. It’s when you start having multiple entities, that’s when you pull in your accountants and attorneys. And it’s very interesting dynamic. As a business owner, I have a difficult time talking to attorneys and accountants because you can’t get your attorney an accountant in the same room together, and so they tell you opposite things by looking at your situation through a different lens.

00:16:06 – Paul Thompson

And it’s really hard to find a a business oriented accountant or attorney that can kind of see the bigger picture and kind of nudge you along the right ways. And that’s really not their function. They’re not there to be a business coach. So you have to kind of take aspects of the legal entity structures you get to aspects of tax, you know, legal tax avoidance, right? Our tax optimization strategies and you take the like, what do you want to accomplish as a business and kind of gather these, these these three things together. And I found the first couple of years that was the most difficult part of the business, not the real estate part. Doing real estate turned out to be kind of easy. It was being the the business owner and knowing what kind of lever to pull at the right time was what was. I had the hardest time understanding because there’s very little that’s taught about that.

00:16:56 – Glenn Harper

Well, I think that just, you know, really, really pisses me off. And the reason why it does is because the perception on everybody’s industry and I was I was busting a little bit on being an engineer. But you know, the same thing goes through as being an attorney, being a CPA. People think this is what you do. And a lot of times that is what you do, but it’s not really what you do and you are. Your experience with the CPAs or accountants were transactional and just regurgitating data and putting out a form. You never had an advisor, a business advisor as a CPA to kind of coach you through that because, you know, in the old days, it was all about, Hey, we’ll we can ask for forgiveness and fix this and go back and undo this and make it right. But now you kind of got us for permission with the new code, right? So that architecture of setting that up and working on it, that is what you know we’re trying to do in the industry is to help clients and other entrepreneurs recognize that you need to have those deep, high level conversations right away because that’s going to start putting the entrepreneur in a position to kind of understand their space what they should or shouldn’t be doing, how they got to monetize it, how they got to account for it, you know, how do they make money in that before they go and fall on their face and figure it out later? And you’re just picking, you’re just doing transactions. So it’s unfortunate that you didn’t get that at the beginning because it would have been a life changing. We say that that’s the shortcut that saves somebody, you know, five, seven, 10 years of anarchy.

00:18:32 – Paul Thompson

I so agree with that. If anybody is listening to this, you need that business strategist and it’s really handy when they’re a an accountant and or an attorney as well, so they can give you advice on those aspects of any business that you’re in as well, because you have to solve for both of those. And if you try and just talk to an attorney about legal matters and just talk to an accountant about tax matters and then try and like take the information because an attorney will tell you to never do anything because it’s it’s risky, right? An accountant will say, Well, it just depends what you want to do. Just tell me, just tell me, and I’ll file it for you. Well, what should I be doing? Well, that’s what the business as a business owner is, which you need to figure out, and you need that business strategy on the front end that and then have a legal and tax strategy that aligns with that.

00:19:20 – Glenn Harper

Yeah, we see that, you know, the order that we like to see it. And when we talk to the most, you know, I don’t want to say the most successful because it’s not about the money, right? It’s about the process. It’s about having fun. It’s the journey. It’s all those things. But it it ends up being that you kind of build what you’re trying to do and kind of map that out. And then you go to the attorney and say, How do I protect myself legally? People want to do it backwards, so go to the attorney, but they don’t even know what they’re trying to build yet. And the attorney just doesn’t know what that means then. So it

00:19:48 – Paul Thompson

Depends. It depends. I’ve always been

00:19:50 – Glenn Harper

An attorney is like, Oh, you can’t do this? And it’s like, Wait a second, no, let’s define what it is we want to do and what that makes sense financially tax wise. And all those things then execute that with the attorney. Then the entrepreneur can go, Oh, well, we can turn them loose. The the entrepreneur like for you, you know, in real estate or anything that you might be in, it’s trying to find that price point, the margin, the return on your investment, all those things. When did you determine as an entrepreneur that was at a return on investment on on your rent roll? Was it on flipping a property? What what were your matrix is that you were trying to determine to decide if that property was worth it? How did you come up and figure out those calculations?

00:20:34 – Paul Thompson

Ok, so when you’re looking just like you said, when you’re looking at running a business like you want to figure out what your angle is like, like where are you adding value and where is the margin? Where is the profit opportunity right? And so I wanted to replace my income first, like a building. Wealth was nice, but I wanted to be able to. I my freedom back by my time back so that I had the freedom to go, figure and do the things that it took to build wealth. So for me, it was cash flow. I wanted to buy properties that had a certain amount of cash flow. I want to have a little cash in those properties as I could, so I could turn my money. So I would buy a property and then I would want to get a do do the BR method or buy and refi. And I wanted to get the refinance and get most, if not all, of my money back. And so I was into it for zero dollars, which you know is a great believer. Yeah, right? Infinite cash return. But I wanted it to cash flow when I did that, so I didn’t want to borrow so much that I was just breaking even was the point in that. So I wanted to have, you know, $200 of true net net net cash flow per day or per unit that I that I purchased so that every time I was buying something, I was adding a cash cow into my portfolio of at least two hundred dollars per month.

00:21:50 – Glenn Harper

Yeah. How long did it take you to build the model so you could scale this thing? I mean, you obviously had to figure that out within the first, probably three or four deals before you got to 18. But how many did you have to go? Oh, son of a gun, I missed that one up. And how many times you have to fall forward?

00:22:09 – Paul Thompson

Yeah, I definitely made some mistakes. Surprisingly, when you buy properties that you know are are 30 percent below the value of what? Again, this is you’re buying a property that there is some sort of underlying motivation from the seller that they need to sell, and time and ease is more important for them maximizing the seller return. That’s the fundamental aspect of my business, so I’m trying to buy things at a discount. And when you do that, it’s really hard to mess up because you’re buying things at such a discount so you can have some rounding errors have makes them a erroneous assumptions. Have some prices come come up and still not be hurt that badly provided that you are truly buying the property at, at, at a big enough, a discount that gives you a margin for error. That’s the fundamental part of that. Now, as I got further along, I got more aggressive because I had the financial means to be more aggressive because I would then buy properties that are more valuable, that had less cash flow. But they had the potential for higher appreciation. And I made some mistakes. I mean, I’ve bought properties that I intended to flip. Did the rehab spent $50000 in rehab? Did the flip? The rehab cost more than I thought, and then I’m stuck with, Oh, I did all. I did all of that, and I lost $2000. Why? What lesson did I learn there? And usually I’m buying an odd property, and I’m not sticking to the fundamentals of buying a property that you know, that is very marketable to to the marketplace.

00:23:45 – Glenn Harper

Is that probably a fair statement to say that as an entrepreneur, whether you start out or you’ve been in business for five years, 10 years, 20 years, you have to be willing to pivot and change. You’ve got to adapt right. And some people fear that and they get all nervous. And oh my god, I can’t believe that happened. And they go in the doldrums and other people go, Aha, I’ll just do it different this time. It sounds like you were. That are I’ll do it this way the next time, right? Yes. When? How long did it take you to? Did you ever feel like, Oh my god, what have I done? Or was it always, Oh, I got this? No problem?

00:24:20 – Paul Thompson

Yeah, so far I haven’t felt like, what have I done? You know, time will tell if that ever happens. But I knew very early on from being in business for other people that the reality of the world is is in the business world, is is adapt or die. You have to adjust. You will not be in, especially in real estate. You will not be in one aspect of the real estate business for your entire career and just not worry about anything, the environment not changing on you. What worked 10 years ago doesn’t work as well now, right? So you’re going to have to always adapt to the current circumstances. I mean, in now, things are changing faster than they ever have. Like who would have predicted COVID and who would have predicted how COVID affected the housing market? It ended up being a net boom for us during the time, and it still happening right now. What’s to happen in the next three years? I mean, who really knows? Like, we have a lot of prognosticators, but my crystal ball is just opaque and I have no idea what’s going to happen. So I’m keeping my options very open and I’m being very careful about not overextending myself over the next couple of years because of that. I recently read it, read a fact that, like a couple of days ago, the last BlackBerry, the BlackBerry service, it was shut down. In 2012, there were 80 million BlackBerry users. That’s correct. So in nine years, what was an institution now is a relic, and that is happening every. So as an entrepreneur, you have to kind of keep your your finger on the pulse of what’s happening and what’s working and be willing to adjust to something that is that is working, that wasn’t working a few years ago.

00:26:06 – Julie Smith

Now, Paul, we’ve talked about, you know, just a pivot here a little bit. You’ve talked about your driving passion, being your family and having the ability to make those decisions with those relationships and what that means to you. And you talked about this close mentor throughout your career. Are there any other relationships that have really been imperative to your success throughout your, you know, your journey?

00:26:31 – Paul Thompson

That is a great question, and I think that ends up being the question. I did not go into real estate or entrepreneurship for relationships, but I realized that, oh, that’s why you go into business in the first place. It’s about relationships, it’s about service, about creating value to other people. And you’re going to need other people in the industry or any other other professionals that you’re working with. And the greatest reward, after buying my time back and being with my family is the new relationships that are forged through being parts of masterminds and going to conferences. So I now am in a new business entirely, so I’m in a business that I call dirt to curb. I’m brand new and I am like way over my head and like, I’m the absolute greenhorn. So we’re buying basically raw land and we’re converting it to residential development. So that is not a business that I know very much about. I joined a mastermind a year ago and a little over a year ago, and I went to a conference, an event that’s hosted by the mastermind and met one of the people part of the mastermind there. And while I was there, there was someone talking about this business and I thought, Oh, that’s interesting.

00:27:47 – Paul Thompson

So I actually purchased a course that was had to do with land development and took the course. And me and this buddy that I met there, we kind of sunk up and started a new business. And last November, like three months ago, we purchased a new tract of land in the DFW area, which is not was not in my plan for 2021 at all was to be in the land business or to buy land whatsoever. But I feel like it’s a blue ocean strategy and I’m currently in in a very transaction heavy red ocean strategy where I’m trying to find a discount. And it’s so hard to find discounts now, and it’s so hard to deal with single family situations, and it’s so much more difficult. This raw land scenario is just a completely different level of conversation, and I would never have been able to even be aware of that business or have access to the kind of professionals that I needed to work with. Had I not been a part of that mastermind to begin with?

00:28:46 – Glenn Harper

You know, it’s funny about that, as somebody who is not an entrepreneur is probably breaking out in a sweat right now. Let’s talk because they just could not comprehend that you would do something on top of what you’re doing something totally new and not only doing it, but excited. It’s fun, and it’s just it’s looked at as an opportunity, not as a stressful situation. That mindset is so hard for people to tap into for themselves, like. And it sounds like you probably always already had that in your your program that way, way back in the day, it just took a while for it to come out because your obligations and your responsibilities and the right timing. Is that a fair statement?

00:29:29 – Paul Thompson

Yeah. But I would not characterize myself as the classic entrepreneur that had that sold candy when I was, you know, in fifth grade or something, you know, I was extremely shy. I was it took me a while to kind of come in, come out of my shell, and I never had like a business drive or a potential acumen for or interest in business. My initial motivations was I was broke and I didn’t have a lot of money and I needed. I wanted a path towards a means of getting a respectable working wage that allowed me to have a basically upgrade my socioeconomic status from where I grew up. And it wasn’t until I got into that that job that I realized that I had some, some some talents and skills, some things that I could go do in the world. And I kind of took me a while to develop. But no, I would say I. I am not the kind of person who would jump in and do what you just described as far as, you know, getting into a land business that I wasn’t familiar with until recently until I realized that I had to build that mindset that if you want to realize your dreams, you’re going to have to go into it. And if you are making decisions based on fear, you’re always going to find yourself lacking at. Right, so finding a way to overcome those inherent fears that we have that just your your primitive mind trying to protect you is something that I have I’ve had to overcome because I would characterize myself as a risk averse person when I was in the corporate world and realized that was just like another phrase for I was afraid to fail.

00:31:15 – Glenn Harper

But I think a fair statement would be is that, you know, taking a chance, getting a success, failing forward. It builds and you you develop this shell or this, I don’t know a safety net or something in you that just says it’s going to be OK, no matter what happens. I mean, because if not, you would. You wouldn’t have bought the second one you had. There has to be that trigger. And again, this is a for all the people listening. I’m not saying you can go. You either have it or you don’t, but you’ve got to. You’ve got to feed it, you’ve got to nurture it and you’ve got to work through that and you can’t give up at the first sign of adversity. You have to keep grinding through. And I and I think this attributes to that because at no time in this conversation, you wanted to have a comfortable lifestyle. But at no time if you mentioned that you want to make a gazillion dollars and you’re going to end it. Right, right. You have no end game. That’s the trick with entrepreneurism. There is no endgame. It’s the journey. It’s the fun. It’s the new things. It’s it’s it’s acquiring knowledge, meeting people, doing the deal. I’m excited for your land deal because one of my favorite questions to ask entrepreneurs is, you know, what is your dream deal? I don’t know if this land deal is a dream deal per say, but it certainly is something that’s going to probably after you do this one and you’re successful at it. What do you think is the next deal? Is it going to be assuming that this will be successful because it will be? Is it going to be a bigger development? Is it going to be a commercial development? Is it the special property in downtown Manhattan? Is it a south beach property? What what is your dream deal that if you could just do that, you’d be like, Wow, I just hit the peak.

00:32:53 – Paul Thompson

So great question. So I’m going to answer this in two ways. So one is that my my dream deal is developing a property that kind of creates community and allows me to host events there. And it has. Sufficient space to have recreation and have people come and stay. Kind of like an event center kind of thing, but but I live there that’s like my inn in state place that I want to be in five 10 years. In order to get there, I need to learn to develop and develop myself personally, but learn how to also develop land and develop and get into this land game. That’s just it just adds zeros to what I’m used to doing. It’s like the the principles are all the same. There’s some new aspects to learn. But right now, like my near-term goals are taking this one deal that I’m working on now and. Using that as a proof of concept to become a land developer and make the significantly more income and wealth building so that I’m in the position to basically give it all away.

00:34:08 – Glenn Harper

That’s fantastic. Do you have? Is your family involved in the business with you or do you keep that separate and or do you have like extended family or is it buddies or is it everybody is strictly, you know, a separate type of deal?

00:34:22 – Paul Thompson

Good, good. Good question. So I like to do joint ventures and I like to have business partners because I think doing business with people you really enjoy is fun. My wife is somewhat involved in the business. She has little aspects of it, but she she is not the the grand big thinker she likes to like. We’re doing this thing where we’re working on mid-term rentals, where we’re taking our existing rental portfolio and renting them out to traveling nurses. And so she’s really enjoying working on those properties, getting them furnished and decorating them and having them a nice place for a traveling professional to come and stay at one of our properties for a three month to six month work cycle. That’s something that she’s interested in. But she does not want to be in like the details of the land deals and raising money. She has no part of us, no part of that. But I have business partners on these others other activities, and I really enjoy the kind of like the iOS system of looking at a business, creating the business in the meeting structure and the business structure and the entity structure so that we have a single clear focus goal. And working on that and doing that with a with a team and a team member that has equity in the business, it’s something I really enjoy. So that’s typically how I structure things.

00:35:42 – Glenn Harper

How long ago did you implement like that iOS and what the strategic partnerships was that something you did on the 10th deal, the 20th deal, the 50th deal? What did you say? Oh my gosh, this is definitely way easier that my partners are bringing me value versus giving me money. When did that happen?

00:36:01 – Paul Thompson

So probably about three or four years into it, I started implementing the like a small company’s version of iOS. That operating system where you have this, you know, the the daily huddles and you’re like, you have a focused purpose for every meeting and meetings are actually fun to attend versus these like long, drawn out things that don’t make sense. And then using a profit first like system for the accounting is was very helpful so that as an entrepreneur, I was I. I fight the the if I see cash in a bank account, I want to go, I want to go invest it, and I got to realize that that’s a good portion of that money. A good portion, a good portion of that money is is not investable right now, right? So be careful because you get yourself in a cash cash crunch too quickly or very easily and then very quickly. You can find yourself in bankruptcy if you’re not careful.

00:36:59 – Glenn Harper

Do you do you not just sometimes just sit back and wish you had have back in corporate America and have a meeting to determine if we’re going to have a meeting and then have another meeting to determine what that meeting is going to be about? And we’re going to another meeting and then you go to the meeting and never have the meeting. And then I mean, don’t you miss those days a little bit?

00:37:20 – Paul Thompson

Hmm. I don’t miss that aspect of the business at all, and that is I mean, anybody who’s lived in the corporate world resonates with that. So, so clearly I do miss the camaraderie of the people in the larger teams. My teams are very small and we’re super tactical and we live in a COVID world now and we don’t. Everything’s on Zoom, right? So which has its benefits. But I miss having those intimate like business structures where where you have this common goal, you’re going to work on it. And so to help solve for that, I actually host events now. I did my first one last fall where I host events. People who are in my mastermind and people in my community can come and we actually work on our business strategies. We go through the iOS system, we go through our our nine day goals and we plan out our five year vision and kind of work our way back into it. I find that very rewarding. That’s a part of the business environment that I liked was being that strategic thinker and putting together a plan. So I just helped build the people do that now in their businesses, and I get that that feeds that part of the business of the world that I that I miss from the corporate life

00:38:31 – Glenn Harper

Is that is that more of a a fee for service? Is that more you mentoring people?

00:38:36 – Paul Thompson

I guess I am serving as a mentor in that sense, but it’s really just the mastermind people who are part of the mastermind. It’s a monthly membership, but the event is open to anybody who wants to come, and there’s a lot of people from the mastermind there. And so you see this very close group of people who are kind of going through business together in our individual ways. But we all know each other’s businesses and we help each other. And so just going to the event is just the price of the event.

00:39:06 – Glenn Harper

You know, it’s so hard to find like minded people and not have the paranoid schizophrenia that somebody is going to steal your idea, right? You know, you have a unique superpower that makes you who you are, and helping others is kind of a cool thing to do because you wouldn’t have got where you got without somebody helping you. That ability to want to pay it forward and help out. And you know, we’ve found, you know, I found out in my world that, you know, it is actually kind of I know it doesn’t sound fun, but talking to other CPA firms is is kind of fun because you just kind of see how other people are doing it. You’re not going to take their clients, you’re not going to steal their ideas, but you’re everybody’s kind of leaning on each other and helping them and and commiserating with the pros and the cons and the ups and the downs. And I think that’s probably what you’re trying to do as well. It’s the the network in your community that you work with being able to share that knowledge and help somebody. You just you’re not doing it because you want something in return. You just doing because it’s fun. Is that? Is that something that you find very rewarding? I’m almost as much as doing in the next deal, right?

00:40:12 – Paul Thompson

Yes. To me, it feels like the next deal because I very much am a deal junkie and I like to chase like some sort of land deal or deep discount somewhere. But no, I I do the events because it it feeds something in me that I that I need to do. It’s my mindset the way I contribute. And it also has a unintended consequence of. Creating something new that I would never have planned for. So sometimes it has nothing to do with me. I just see other people come to the event they meet and they become really good friends or they start a business deal together or they do some sort of transaction together, right? Sometimes I’m involved in that transaction. Sometimes I’m not. It just doesn’t matter to me. But building that those relationships and those that kind of web of connections just creates really interesting things that you would can’t you cannot truly predict. But I just like to create that environment to see what happens.

00:41:10 – Glenn Harper

I think that’s that’s one of my favorite words is the unintended consequence because we intend to do something. And when something else comes out, that’s so much more good or for lack of a better term, it’s it’s the best because but that could never happen. If you’re scared to say yes, if you’re scared to do the deal, you’re scared to meet somebody. You always say yes and figure it out later. And I think that’s your mindset that you’ve had, and that’s probably what’s giving you the success. Do you can you do you have like a a plug or a website or something that we can put to our listeners that they, you know, may want to reach out and contact you for any of those things that you want to do?

00:41:45 – Paul Thompson

Sure. So the best way to find me is on my website at Paul David Thompson and all those names are spelled about the way you would expect. I have the pleasure or the curse of having a common name. So it’s Paul David Thompson.

00:42:00 – Glenn Harper

Excellent. Well, I appreciate you taking some time with us today and wish you continued success and I know it that you’ll be just fine. And the Landale. I’d love to check back in with you in a few months and see how that’s going, because that just makes me grin when somebody takes a really, really big chance and gets out of their comfort zone because that gets the juices flowing. That’s where the action is. That’s the fun.

00:42:23 – Paul Thompson

Yeah. Also, I will do is I’ll let you know if I if I drowned or if I kind of found my pace and kept my, I kept my head above water.

00:42:31 – Glenn Harper

Just put your aqualung on. You won’t drown. You’ll be fine. Well, there you go. Thanks again for coming and spend some time with us again. Paul Thompson. Thank you very much. This is Glen Harper signing off.

00:42:42 – Julie Smith

This is Julie Smith.

Episode Show Notes

Our guest hasn’t always been the CEO of multiple companies with students from all over the world and properties in various states. Back in 2015, Paul was working a corporate job… the long hours, the commute… and was tired of it. He wanted out. And real estate investing became his escape plan. And in just over a year’s time, he quit that corporate job and hasn’t looked back since!

I wanted to do things that were interesting and learn what it takes to make those interesting decisions. I wanted to make things that are interesting. And I found that growing and building businesses are really interesting and really complicated.

Why real estate?

I could get really low-interest rates at the time. Six percent or less. And that, I feel like, was a very measured and careful approach and not at all throwing caution to the wind. But I was not afraid to make mistakes. My mistake was not trying for 15 years.

Paul talks about his unique experience finding and working with his mentor.

…here’s what you got to do first. You have to go by the book The Richest Man in Babylon. I want you to get a physical copy. I want you to read it, highlight it and write a three-page handwritten essay. And then I want you to mail it to my P.O. box. And after you do that, I’ll talk to you. So it was his way of testing people if they’re serious and if they’re coachable and teachable. So I did it, and over the next two years, I probably wrote like six seven eight handwritten, three-page essays on different books that he sent me.

What advantages has Paul seen in working with a CPA that also offers business strategy?

You need that business strategist. It’s really handy when they’re an accountant and or an attorney as well, so they can give you advice on those aspects of any business that you’re in because you have to solve for both of those.

How does Paul see businesses being able to survive over the years?

I knew very early on from being in business for other people that the reality of the world in the business world, is adapt or die. You have to adjust.

Are there any other relationships that have really been imperative to your success throughout your journey?

I did not go into real estate or entrepreneurship for relationships. But I realized that, oh, that’s why you go into business in the first place. It’s about relationships, it’s about service, about creating value to other people. And you’re going to need other people in the industry or any other other professionals that you’re working with.

Paul helps busy professionals design a real estate investment strategy that fits their needs. Whether that’s taking control of investments, reducing taxes, accelerating debt paydown, or leveling up in their investing game.
He’s guided numerous beginners through the process of doing their first real estate deal. He works with investors from California to New Zealand. The best part of his life is helping others build extra sources of income so they can lead a life of their design. As a full-time real estate investor, he no longer depends on a day job. He shows busy professionals how they can follow a simple plan to build wealth with real estate.
If you’re looking to get started with real estate investing or an investor who is looking for support, feel free to join his free Facebook group.

Paul’s Facebook group

Paul’s Website

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Copyright 2022 Glenn Harper

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