On this episode of The Mobile Home Park Lawyer, Ferd interviews Rod Santomassimo. Ferd and Rod discuss expert business and sales strategies that will transform your MHP business. Enjoy!
“There are so many things that you don’t need to be doing when you operate a mobile home park, or anything for that matter, because there’s other people that are more talented than you, at less cost than you.”
HIGHLIGHTS:
0:00 – Intro
1:37 – Rod tells us about his background with entrepreneurship
3:26 – Ferd asks Rod to share some business coaching knowledge and for any tips and advice he has for MHP owners
6:24 – Rod speaks about his book Knowing Isn’t Doing and the theory behind it
8:10 – Ferd asks Rod to explain some of the acronyms from his book
12:35 – Rod gives us some strategies we should be using and emphasizes the importance of delegating work
16:42 – “Business owners get rich, business operators get tired,” if you can’t not go to work for a month and still have a successful business you’re a business operator
20:34 – Rod speaks about the five divisions of every business; sales, marketing, operations, finance and human resources
FIND | ROD SANTOMASSIMO:
Website: massimo.coach
Resources: knowingisntdoing.com
FULL TRANSCRIPTION:
Ferd Niemann: Welcome back mobile home park nation, here today is another episode of The Mobile Home Park Lawyer Podcast. Got a great guest for you today. This guy, he’s an inventor, he’s an author, he had one of the number one best-selling books for commercial real estate. He’s a commercial real estate business coach, he owns The Massimo Group. Please help me welcome Rod Santomassimo. Rod, Thanks for coming on.
Rod Santomassimo: My pleasure. Thanks for having me, buddy.
Ferd Niemann: You got it, you got it. I know a little bit about you I read your book Knowing Isn’t Doing. And I know I’m not the only person that read it, because you’ve made a ton of sales on it. But tell us a little bit more about your background. And then we’ll dive into what you do and how it can relate to MHP business.
Rod Santomassimo: Yeah, I’m a serial entrepreneur and then did corporate jobs and got a job and then went back to China to try inventing stuff in starting businesses. And then those would fail and went back and got a corporate job. And then I finally got laid off in 2008 from my job at that time, I was an executive vice president for some big real estate conglomerate working in California, although I live in North Carolina now with my family. And I said you know what? That’s the last job I’m ever going to have. I just, I can’t do anymore. Because you work your butt off, I’m going to work. I’m a worker. And just to be kept was killing me. So with the great recession and no jobs to be found, but I looked at my wife and I said, you know what? I am going to coach people on how to get out of this recession and make some money. That’s how it actually all started. I did call it The Massimo Group when it was just me. Now it’s 30 something coaches and 1000s of clients and so it’s been a blast.
Ferd Niemann: That’s awesome. Yeah, I mean, the entrepreneurial spirit, I’ve got it myself, too. I have the same thing. And I was telling somebody yesterday, like, I don’t want to have a boss again, in some degree, all my clients are my boss, but if I got a bad client, I can fire them. If I’ve got a board of directors or I’ve got an investor or if I’ve got, you know, a supervisor, you know, that’s a boss. I like the autonomy. I heard something this morning actually, I think it was a job is the, what was the saying? Basically, that you know, a job is something that gives you, but takes away your dreams, but you think is good for you. You know, it’s like this, the golden handcuffs kind of thing. And so I like being an entrepreneur, you’ve done a lot. Tell us more about the, I’ve read your book. And again, like I said, the business coaching, tell us how that works, you know, from kind of maybe start to finish, how you got, and you talked about you got into that, but how you can share some of those tips and tactics for our audience.
Rod Santomassimo: Yeah, you know, was really understanding well, the key was any business is true. Any business, I read a Harvard study before I started the company, on what it would take to be a successful coaching company. And we realize this is true, with all companies, the three-legged stool here. So you need talented people surrounding you with talented people. And if it was a mobile home park, it could be the maintenance guy, it could be a security guy, it could be you know, anyone down to people, right? Proximity the talented. Number two is you need a platform, how are you going to operate? How are you going to facilitate? What’s it going to be? Some folks it’s a CRM database, other folks they can use something as simple as slack or Trello. These are online tools, but everyone needs a platform. And last but not least, what are your processes, we go deep in the book, look there is a sales process, there is a marketing process, there is an onboarding process, there is a new resident process, there is a resident retention process, there is a resident outgoing process and all these processes you need to understand and document and just understand that great standards of what you expect to happen. So people process and platform is how I started to build The Massimo Group by surrounding myself with talented people, writing processes, and putting forth some platforms. And that allowed us to scale, that allows any business to scale and get the results you want.
Ferd Niemann: I agree completely. I think back to the old book Rich Dad Poor Dad that most real estate investors have read, and I think half the real estate investor that’s what got them started that book does a great job in firing your belly. But it really talks about that, you know, if you’re on the one side of the equation, you’re employed or self-employed, I’m just, all I do is just practice law by myself, I take a month vacation, I don’t get paid, right? So if I’m going to scale my law business, I need other lawyers, right? I need paralegals. In my real estate business I need, if I’m going to scale, I need good people, you know, you’ve met property managers, asset managers, you know, bookkeepers and investors for financial capacity. But then the systems and processes systems I think are just absolutely vital and just keeping track of when does the rent increase happens, when is the permit fee due? When is the taxes due? When can we you know, when do we need to check this and then we do things like the due diligence list and all the legal components, all the financial components, all the site visit components, so absolutely agree, necessary to scale there’s lots of tools out there. But I think getting that mindset and your plan together is crucial right out the gate. And people don’t do it, right? You know more than me. I’m sure people don’t do it all the time. And they are 2,3,4,10 years in the business, and they’re like, we should stop and work on our business instead of working in our business, and I put time in every week work on my business, I’m sure you do, too.
Rod Santomassimo: Yeah. You just said people don’t do it. And that’s why when I wrote the book, and this is the first book of the three I’ve written, the first two became bestsellers in the commercial real estate space. But this last one to him the best seller in the country of all sales books. And the team I put together said, whatever you do, you can’t use that title Knowing Isn’t Doing, it’s just too damn negative. I said, you know what? But that’s the point. That point is knowing isn’t doing and even my sales team was like, you can’t give everything away Rod because why would anyone hire us, because they won’t do it. They need help. And that’s the point of the whole thing. Ferd, when you understand you just said it, you got to do the work, it just is. Now, how you go ahead and do the work, create the processes, have the people looking at your pipeline, getting the right residence, looking at the right elements of your, in this case, mobile home enterprise. That’s a whole different story. So really, what it is, cause I relate a playbook follow up, if you want to own a business and in business as you or you in some other capacity, you’re an attorney, you’re an architect, you are a mobile home operator wherever might be, this is the playbook to building that business.
Ferd Niemann: That’s great. And setting aside the time I tell my team to guard your time, and plan your time because you’re right and knowing isn’t doing. I think I’ve heard something similar from Tony Robbins in one of his events. Knowledge is not power. Knowledge is potential power because execution beats the knowledge any other week. And in order to get that power or just get to doing you know, you got to actually go through it, you got to go through the machinations, you got to get the process going. And I think it’s crucial. So I liked your book. I know lots of people do, tell us, give us some more of the secret sauce in there. I know you’ve got more acronyms, I think than they had on the wall street in the book. But like I get it, you know, I’ve tried to think of what they are, I paid, Mom, you know, there’s a whole bunch of them, you know, again, you run through some of those.
Rod Santomassimo: Let’s stick with the I paid, this is the problem a lot of our business owners, right, they’re doing activities, and they can’t connect the activity to the compensation, right? Whatever you’re doing in relationship to the revenue, you can’t figure it out. Our initial clients was all commercial real estate brokers, they may make a phone call one day and they may eventually get the listing and they may eventually get the closing, they may eventually get the commission that might take six months to a year. And they connected through dots because what happens is most people, when they get the commission or the fee they go celebrating, we want to celebrate revenue by the way. Celebrating, it’s a relief almost like oh, yeah, great. Thank God I got the money and that’s not what we should do. So the idea was, okay, let’s let people get paid every day. I could let everyone get paid every day. Now of course as a mobile homeowner, you’re getting paid every month you know and then you’re thinking okay, I got the residuals and the late and all that coming in you’re getting paid. And you get paid every day that you know your effort equates to well result, so we came up with an acronym called I paid, and the question was, was I paid today and then we followed it by saying Okay, so the I paid acronym is this. Every day identify what you need to do, very simple, simple process right? Then p, prioritize no more than 10 things by the way but prioritize then allocate what you can allocate you allocate money, time, people that’s what you can allocate, it is what it is and of course the second I in I paid is implement, that is for doing part that’s the hard part and five, the D in I paid is either delegate or delete, never defer. If you kept deferring things that become demotivating after a while, right? I’m going to write that new marketing piece for this mobile home park, I’m going to write the new covenants for this, and you are just never going to do it and it makes like I don’t want to do it, right? So delegate it and there’s plenty of talented people, but it can help you with certain situations in your mobile home, just where it is. So delegate it, just what it is. So that I paid acronym Ferd is all about being as productive as possible every single day.
Ferd Niemann: I love it. I mean, the thing that I liked the most about that I think is the hardest for new mobile home park owners. A lot of my clients are first-time guys, first-time gals first project. You might not have the money to hire people. So you’re doing a lot, what is amazing is that once you get that first hire, you’re ready for the second hire, and the third hire because you’re like, wow, I can delegate this and this and you start to look at what’s your effective hourly rate. And, you know, not that you’re too good for something. But if your effective hourly rate is $50, well, you should not be doing $10 tasks, you should be outsourcing all $10 tests all $49 tasks, and then you’ll free up all this time to do $50 work. And pretty soon you realize you can maybe do $51 work and $52 and so on, and that allows you to, you know, allow this thing to start to snowball, and then it just gets better from there, that allows you to hire better people, you can hire people that know how to do $ 49-hour work, $ 50-hour work and so on. And, and this sort of planning, reading, strategizing, I feel like that’s, you know, my thinking time stuff, I sit in my chair, and it’s like, that might be $1,000 work, that might be $2,000 work. And it’s like, is it practical for me to do $2,000 work the whole day? Maybe not. But that’s more than my hourly rate, well, I got to look at what are the things I can train other lawyers to do to even outsource high skilled, high-paid, you know, legal staff. And it works in every aspect of the business I feel like and part of that is the process and writing things down and have a system. I’m at the point I’m like, I don’t do anything twice. I got a template of every document I ever created and ever used and somebody else can do work from the template and that’s part of this delegation. And part of this, you know, this system. So you implement strategies like that. It’s great, what other strategies you can respond to that if you like, what other strategies do you want to share?
Rod Santomassimo: Well, let’s respond to that first. I can tell by the vernacular you’re using, you are an extensive comprehensive reader, right? It’s obvious. So the E myth working on your business is what we need to do. Jack Dailey wrote in his book hyper sales growth, if you don’t have an admin, you are one. And I quote that in the book, and there are 11 words that changed the trajectory of The Massimo Group. I realized I was doing admin work at one in the morning, two in the morning, instead of sleeping and getting energy to do what I need to do, you know, $500 an hour work. That’s just what it was. And so I got an assistant. Now today, this morning, for example, actually it was last night, last night at 8.30 Eastern, I was on a phone with the Philippines, and it was 9:30 am the following day there. But we were talking about doing some work together, and they’re going to charge me $5 an hour. Now, I’m thinking, wait a minute, I could hire here in the United States for at least the same job $25, $30 an hour, I could, you know, I could do it $5 an hour. Now I’m not promoting outsourcing and getting capital away from the US. That’s not the point here. The point is, we all live in a global economy now. So we got to be careful how we spend our dollars because here’s the practice. Just because I write this in the book, just because you can do something better, or faster than someone else, it ain’t going to make you wealthier. So for example, you think you should manage your mobile home park? Okay. Because you say I know the way it’s going to be, it’s going my way, my way is a good way. And this way, it’s got to be. Looking at the time and the effort and the energy, the emotional energy of managing that park. And then you can do instead, you playing golf or going sailing or doing something more productive. Maybe you’re collecting rents, why? Other people can do that for you. There are so many things that you don’t need to be doing when you operate a mobile home park or anything for that matter. Because there are other people that are more talented than you, in fact at less cost than you. It is just the margin maker, that’s the key, can you make the margin?
Ferd Niemann: I mean, that’s definitely wisdom there. I’m curious if you have pushback on that. I feel like for the entrepreneurs, business owners, it’s hard at times for people to let go of that thing. No, I’m the best at this and I agree with you 100% but I just know I’ve run into people and I’ve got some even some personnel that are like no, I can do this, like I know you can, but I want to let you down source it, so that you can do something higher and grow and it’s a conversation I’ve had to have before. Did you have pushback on that?
Rod Santomassimo: Oh, absolutely. But I love what you’re sharing though. Ferd you said look number one, I want you to grow and that’s a huge thing for a counterpart, a colleague, peer, employee, and independent contractor. I know you could do this but do this instead. Look, my background is I am really wicked good at Excel pivot tables. There’s an integrated comprehensive range use Excel. I found a guy in Mexico that could do it for eight bucks an hour, but I really like Excel. I do. I love playing with Excel pivot tables. It sounds kind of crazy when I say that out loud. But I could be doing so much more of my time. So I get pushback all the time, especially when you’re starting out, I get it, you’re just starting out, you don’t have any money, you are doing yourself. But here’s the problem. Those individuals that never get off that mindset, we call that transaction treadmill. That transaction treadmill, you’re working hard, you’re busy, you are doing everything you think you’re growing, the treadmill doesn’t go anywhere, it just, it is a busy experience, that’s your status, you’re busy. You’re not growing your business, you’re not, you’re not growing yourself, and you give yourself a heart attack. So ease up, ease up and let other people do what you don’t need to be doing.
Ferd Niemann: I agree, the transaction treadmill reminds me of a conference I was at and they said, there was I don’t know, 2000 or 3000 people in the room, mostly entrepreneurs. Those people that go to conferences, those people who had the flexibility to leave work that day, it was four or five days. And he said, how many people in the room are business owners? Everybody raise your hand just about everybody. He goes, how many people if you don’t go back to your desk for the next month, starting right now have a successful business, keep your hand up? And nearly everybody dropped their hand. He goes, the rest of you guys are business operators. He said business owners get rich, business operators get tired. When your treadmill example reminded me of that. Yeah, he’s like, you know what? And I was one of those guys. I’m like, oh, man, okay, so then it made me start doing things like write stuff down, come up with systems and processes, hire, you know, six-figure personnel instead of $40,000 personnel and it’s more expensive. But like most things in life, you pay for quality, you get quality. And some people don’t, lot of people got to start at the bottom. And so that’s where you grow, training. Richard Branson’s got a great one. And he says, train people well enough so they can leave, but treat them well enough so they don’t. And I try to do that to my staff, I want you to make double, triple. It’s not going to happen this year. But it might happen in five, it might happen in two or three. And I’m here to help you get there. And you know, I feel like it’s all part of the culture you want to create as well.
Rod Santomassimo: I love that, I love the business owners get rich, business operators get tired. I never heard that one, that was awesome.
Ferd Niemann: I’ve been a business operator, right now it’s like I’m both, I am a business owner tired and a business operator tired.
Rod Santomassimo: Hey look, I’m sure you would share this. And please do and I’ll share with your audience. Look, the first three years of Massimo Group, I was working the first two years 16 hours a day easily if not 18. Getting no sleep, never seen my kids, never really seen my wife. And it was tough. I mean, it was a grind the first two, three years. We’re coming out of recession, still in it basically that time, and clients weren’t flourishing. So I’m not suggesting anyone starting out. Yeah, just go out and spend all your money on other people and just don’t do anything sit lay back. That’s not the point here. The more you grind, the more you know, and the more you know, the more you can set and share and train, you just said Ferd, train other people. So I’m sure when you started out Ferd you weren’t just hanging out in the beach and delegating the whole day were you?
Ferd Niemann: No, not at all. I was one of those people who is hard to get to do it, you know. And when you’re starting off in the grind, too, it’s like, financially it is even impractical. Like you can’t just take all over it and you I don’t want ever, like even I’m just hiring several people recently. I don’t want to have somebody leave a job, you know, revenue was down, I estimated it wrong or business wasn’t good as I thought. Sorry, you’re fired, you know, six months in because I can’t afford you anymore. I feel like it’s not fair to the person, right? So I want to really make sure that there’s a very strong chance that you’re going to stay here and it’s going to grow, and I’ve got reserve, we’ve got a business projection that you’re going to more than pay for yourself. And then that’s what employees you know are forced to do some degree right is, you know, provide value that covers their cost. And then some, whether the revenue generators like salespeople, or overhead people, like accounting that you need accounting, and they, you know, allow your other people to grow. So, it is the constant analysis of, you know, how’s my business path looking? And what am I doing to stay on course or modify my course?
Rod Santomassimo: I couldn’t agree more. I got you said it’s from business owners. And we talked about this in the book look, every business, I don’t care if you’re Amazon, or you are Bob’s new garage that started out every business has five divisions. And if you don’t understand that, and work it, you’re just going to be, you’re going to be stuck. You’re going to plateau. And so we talk about it in the book and why they’re also important. So the obvious number one is all businesses have a sales division, right and when you’re starting out, by the way, you’re all five of these. You’re the head of sales. That’s number one. You are prospecting, you’re going out, you’re trying to fill your spaces, whatever you’re doing. And there’s marketing, where you’re actually promoting, marketing is promotion. That’s what it is. It’s awareness. It’s presence. You need that even when you’re creating a community, right, and retention from your mobile homeowners and residents, you want retention, that is why marketing is really important. It just is. Then that’s two. And then the third is operations. How do we do things here? What’s our retention process? All those things we talk about, the operation division, you have to ask yourself, how am I doing operationally? How am I doing sales-wise? How am I doing marketing-wise? Then the Fourth Division is finance and finance is kind of the obvious one for a lot of folks. They don’t go deep enough. It’s not just for commercial real estate brokers think, it’s just my pipeline. No, it’s not. Do you have a P&L statement? Yeah, if you’re dependent contractor folks, you need to have your own P&L statement, your own balance sheets, budgets, you have a budget, you’re operating a mobile home park, you’d have the budget, if you don’t have the budget, you’re winging it. That’s problematic. Do you have a tax strategy, or yourself and for the asset and for the operation? I know we’ll share this in a little bit. We do have free packs strategy, bonus materials for you all to digest. Because I tell you for the first thing I learned when I started realizing, it’s not about building wealth and building margin. That’s the goal for a lot of people. I was making money as the company grew, but I wasn’t becoming wealthy. I knew that. I was making money. You talked about operator owner, right, rich, tired. So I was making money, but I wasn’t making wealth until I retained, hired, outsourced a tax strategist. And he started sharing with me, okay, this is how you can start creating things and doing things. I was like cheese and crackers, you know, is this legal. And I checked it out by three other accountants. And they said, that is legal. Then guess what? The wealth started, then I started creating and accumulating wealth. And I did and to me wealth means that I could take off a month. So that’s what it means now, you got your sales, your marketing, your operations, your finance. And last but not least, and we just talked about Ferd and I most of the day, you got to have a human resource department. And yes, that means maybe recruiting, hiring, training, motivating, retaining your manager, your leasing agent, but more importantly, it means yourself. How are you growing? How are you getting better? What books are you reading? How are you getting coached? How are you getting trained? How are you getting smarter in what you do? Do you know the latest trends in mobile home parks, using the Ferd’s podcast every week, no matter who it’s on, so you’re learning more and more about what to do correctly, things like that. So if I leave you with anything today, it is going to be look, you’re the CEO of a major business, that business just happens to be a single mobile home park you own or the enterprise you have, that’s just what it is, you are the CEO, you just are. And you have five divisions you have to manage and direct. And once you start doing those, good news is you start seeing the cash rolling, and then you start seeing the wealth be created.
Ferd Niemann: Great stuff Rod. That’s great stuff. I love your little sidebar there on the tech strategy. Because it’s funny that you know, you had to ask, Is it legal? That’s how you know it’s powerful stuff. Like, is this allowed you are like, that’s when I first heard about cost segregation, I got an episode on real estate cost segregation and bonus depreciation, accelerated depreciation and like, wait a second, you mean I can own this for one day. And I can write off a million dollars? Yeah. But it hasn’t made any money yet, yeah, doesn’t matter, I can write off my law firm and like what? He’s like, man, tax strategies like that, I swear the best use of my time is reading tax stuff, it is more valuable than prospecting…
Rod Santomassimo: The best use of my time is having my tax strategist read his stuff. I am not going to read that.
Ferd Niemann: I like my accountant plenty, but nobody watches your money as close as you do. So I try to understand every aspect of my businesses because, you know, a lot of accountants have, you know, a mile wide of knowledge and about a foot deep. I don’t need about what I don’t care about manufacturing tax credits for coming up a new design. I care about maybe a foot wide in real estate, real estate professional real estate law. And I want to go as deep as possible. And then my accountants, you know, I’ve gone through three or four accountants in 10 years, because I’ll say, you have to look at case law. This is what it says, that’s illegal. I’m like, No, it’s not. Here’s a case in US Tax Court. This is a winning strategy. Oh, we don’t do that. Well, then you’re a bookkeeper. You’re not a CPA. You’re not a CFO.
Rod Santomassimo: And that’s why you notice I didn’t say, accountant. And we have those, I said tax strategist. You and I are saying the same things, well different verbiage, but yeah, same thing. Yep.
Ferd Niemann: No, I think it’s key Sutherland, Keith Cunningham the original Rich Dad, supposedly, you know, I saw him at a conference, and he said, If CPAs were that smart, they’d all be rich. Instead, they do your books. CFOs understand your business works, understands the difference between cash flow and profit. And there’s a lot of, I wish I get him on here, but a lot of great stuff and understanding the financial and tax implications of your business operations and such. But that’s another topic for another day. But Rod is there anything else you want to share before we go. But other than let us know where we can find you of course, as well.
Rod Santomassimo: Yeah, you can always find us at www.massimo.coach. That’s our easiest website of all the websites we have. But if you want some free resources on the book, Knowing Isn’t Doing, go to www.knowingisntdoing.com, that’s www.knowingisntdoing.com, download the free resource book and definitely download the tax strategy book. Now those tax strategies will obviously Ferd based on 2020 policies. They haven’t changed yet, but we know they’re going to change. So just be aware of that as you read the material.
Ferd Niemann: Alright, Rod, I appreciate it. Thanks again, really appreciate it.
Rod Santomassimo: Ferd great show. Great time. Thanks, man. Really appreciate you having me on. Take care.
Ferd Niemann: Bye now.
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