Episode 127 – Scaling 7-Figure Businesses With Mike Simmons

Whether you’re 20, 30, 40, or 50, the biggest mistake you can possibly make is not starting today. Whether it’s your 9-5 job or fear of failure, no excuse is worth delaying the one thing that could drastically transform the way you earn and work. In this week’s episode, our guest shares how he overcame his analysis paralysis and built a multi-million business from scratch!

From being a success story junkie to becoming a success story himself, Mike Simmons is here with us today to share how he’s been making 7 figures a year and working just two hours a week! After quitting his toxic day job, Mike shares how he got his start in flipping houses (in the middle of a recession!), made his first million, and built wildly successful businesses in wholesale and lending hard money.

Tune in as Craig and Mike dish out simple but effective points to maximizing your marketing efforts, building multiple businesses from scratch, and automating your entire money-making machine!

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Scaling 7-Figure Businesses With Mike Simmons

One thing I really like about Mike Simmons is he kind of started off in analysis paralysis, like a lot of us do, and then he just exploded. And so if you think you’re in that analysis paralysis stage, know that there’s better days ahead and also know that it’s one of those things that you just got to kind of keep doing. And so Mike is extremely articulate. He dropped some really good bombs at the end so make sure you’re listening all the way through into The Final Four. And, yeah, it’s just a really, really interesting episode. He just talks about how he went from house flipping to wholesaling to now he only works two hours a week, literally two hours a week is what he’s working. He’s still making over seven figures every year. And, yeah, it’s just such an amazing story. So, I’ll let him tell the rest of his story though. Mike, get on the show.

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Mike Simmons, welcome to the show, my friend. How you doing today, dude?

What’s up, Craig? Appreciate it. I appreciate being here. I’m having a great day and I’m happy to be here.

Yeah, man. Well, we’re happy to have you on. I see that Cowboys helmet in the background, man. Are you disappointed with this season or…?

Yeah. I mean, listen, 12 wins and they won a playoff game but I’m disappointed. I feel like they consistently don’t do what they need to do to get to the next level, but, listen, you can’t help who you’re a fan of, right? Like I live in Michigan so I’m not a Detroit fan so it could be worse. There’s a lower level of hell and that is being a Detroit fan so I’ve been a Cowboys fan my whole life since I was a little kid and it just never — so you can’t really help who you root for but, yes, I was disappointed. I’m sick of losing in the playoffs or not even getting there.

Yeah, it’s tough but, yeah, at least you’re not a Lions fan, that’s pretty much the low of the low. So, anyway, we could sit here and talk football all day but why don’t we start talking about real estate and tell us how you first heard about financial independence and kind of where were you at that time?

Yeah, it’s funny, I kind of have like a two-stage process that I went through to get into the world of being an entrepreneur. But back in around 2000, early 2000s, 2002, 2003, I was in my early 30s and it occurred to me that I didn’t love my industry that I was in. I went down a path that didn’t ultimately make me happy. I was really not happy in my career, and so I started thinking how can I invest so that I can retire early, like my thought was retire early originally, and, back then, in the early 2000s, day trading was a big thing. It was all the rage, right? And so I started getting online and trying to figure out day trading and stocks and how to trade in the stock market and what I’ve learned in subsequent years is I have a low, low, low tolerance for details and so as I started looking into this, it was incredibly boring and difficult for me to stay on topic. And so I would find myself on ESPN trying to figure out what the Cowboys were doing next and I just sort of could never stay on point until I found real estate. And if you Google investing, investing for retirement, and kind of go down that rabbit hole, eventually you’ll find real estate, and when I did and I started reading success stories and I was sort of a success story junkie for a while and I know a lot of people probably can relate to that, but I didn’t get tired of it, I didn’t get tired of learning and reading and consuming. Next thing you know, I’m buying books and videos and things like that. But then the worst thing happened to me that can happen to most people and I think this is what keeps most people out of real estate honestly, or out of anything that they want to do or start, is I started consuming knowledge as an excuse for not actually doing anything, right? My excuse was, well, I feel like I don’t know enough, I need to learn more, I’d buy another book, I’d listen to another podcast, I’d go to another seminar, then pretty soon, all I was doing was buying books, listening to people, and going to seminars and there’s a lot of people like that. If you go to any REIA, it’s a roomful of people who most of which aren’t really doing real estate.

They want to and they’re thinking about it but they don’t have the nerve to get it going. Share on X

Yeah, I think that’s super powerful and I think that’s something that everyone listening to this right now, just kind of like take a step back and think about how many podcasts have you listened to. You thought there was a lot of information back in the early 2000s. There’s probably a hundred times more information out there today and it’s probably more engaging and it’s probably a lot better. And so like the hole that you fell into, analysis paralysis, just trying to learn, learn, learn, learn, learn and not do, I think it’s very easy to fall into today. So I want everyone listening to this, it is like think about where you’re at right now and how long have you been wanting to invest in real estate and if it’s more than six months and you haven’t taken action yet, I think there’s a massive problem there and I think you just got to — the only way you’re going to learn now is just by doing.

Yep, 100 percent.

So what was your next step? Mike, what actually got you that — what finally gave you the confidence to actually start making moves instead of just learning more?

Yeah. So I started in 2003 learning. I bought my first property in 2008. So five years of paralysis analysis, making excuses, whatever. So I was raised by a Marine. My dad was a Marine in Vietnam, infantry, frontline, very hard-nosed guy, kind of a Harley guy once he got out, worked at Ford, he was a tool and die guy, just hands on, greasy hands all day just working with his body and he was a tough guy. And so, excuses, fear, procrastination, none of those things were really tolerated when I was growing up and once I realized, and it took me five years to really hit rock bottom with myself and come to the realization and admit to myself that I was not taking action because I was afraid. I was afraid of — and the crazy thing was I wasn’t worried about losing money. That wasn’t my fear.

My fear was losing reputation, looking stupid, being made fun of, calling my shot and then missing it and having to deal with that. Share on X

A lot of people in life are like this analogy of, I don’t know if you ever heard of it, like this bucket of crabs. When one crab starts climbing out, the rest pull him back down. And I think a lot of people are like that and I had friends that I think were kind of like that and they weren’t trying to be mean or do anything to hurt me, it was just like they were in a miserable position and so they were quick to goof on any idea that somebody had to get them out of that situation. It was sort of like commiseration and misery loves company. And so it took me five years. But when I finally did it, I can tell you about the deal if you’re interested in hearing the details of that, but it was 2008. And — go ahead, yeah, yeah.

Well, yeah, yeah. Well, real quick, I want to kind of know like how did you sever those relationships with your friends or maybe you didn’t sever them? How did you kind of get over that? Because I think it’s true, like you’ve got these victim mindset people and they’re going to be in a victim mindset and they’re negative and woe is me and yada, yada but you’re not getting anywhere with that. And so, yeah, and I think this is probably a lot of people’s problem is just getting around the right people.

Yeah. I’m still friends with some of the people that I was closest to back then. I still meet up with them for lunch. It wasn’t their fault. What I had to do was get over myself, but the way I did it was I didn’t tell anybody. I started buying houses and flipping them and I didn’t tell anybody. And I’ll tell you kind of how that turned out, that’s sort of interesting story but that first deal, it was 2008 and prices were just plummeting, right? They were going down like crazy. And in early 2008, I got a property under contract. The contract price was $80,000, okay, this is Michigan so it’s a little cheaper housing here. $80,000 and we got our offer accepted. We started going through a loan process with a real local small bank and in the middle of the process of getting the loan done, they went out of business, which wasn’t super uncommon back then for small independent banks to sort of kind of flop upside down and go out of business and they did. We ended up losing our earnest money because we couldn’t perform and we lost $1,000. It was devastating. $1,000 was a lot of money, it’s still a lot of money but it hurt more back than than it would now. And so it took us another six months to find another deal and we did and we found a deal one street over from the original deal that we had under contract for 80, we got this one under contract for 40 and it was the same footprint, same house, exact same house just one street back. And so we might have gotten our butt handed to us a little bit had we bought the first one so it was kind of like a blessing in disguise to lose that, but we got that deal for 40, hired a contractor, put an ad in Craigslist and I made one big rookie mistake that I’ll never make again is I put an ad on Craigslist and I had eight contractors respond back that they wanted to bid on the house, they wanted an opportunity to bid, and so I created an appointment for each of them one hour apart so for eight hours, I was stuck at this house. Guess how many of the eight showed up?

Two.

Two, you’re right. The one that was scheduled for 9 a.m. and the one that was scheduled for 3 p.m. and I didn’t know if the other ones were going to show up so I just sat in this house all day long. I’ll never do that again. But found someone, he ultimately did a good job but, at the end of the job, I got a call, once he was done and fully paid, I got a letter in the mail that there was a mechanic’s lien that was placed against my house so I called and I’m like, “Hey, what’s going on? I see that you’ve had this lien. I paid you guys, like I paid the electrician. Why are you putting this lien?” And they said, “We never got paid,” and I said, “But, no, I paid the general contractor,” and they said, “We believe you. He didn’t pay us.” That’s what didn’t happen. And so this was the first time I realized that you need to have the subcontractors sign off that they were all paid before you pay your guy for the final payment. And so I learned how to, early, I learned how to negotiate with a subcontractor to reduce the lien that they were putting on. They had a little mercy on me, they didn’t have to give me any breaks but they cut the bill in half, but even still, after all of that, the house, we bought it for 40, we put 15,000 into it and after all the holding costs and everything and paying the electrician twice and all that, at the end of the day, we made $15,000 on the property.

Wow.

And that was like $15,000, I’ve never seen that kind of money in my life at one time. My wife who grew up really poor really had never seen that kind of money and she was like, “All right, let’s do this, man.” And so for the next few years, real quickly, the next few years, we started flipping houses as a team.

Yeah. I think that’s amazing, man. I think — that first deal too, like it must have been scary in 2008 when everyone’s telling you it’s a bad time to buy real estate and it’s a horrible market and all that and so I guess how did you kind of assuage those fears? Right now, I’m thinking of you like your mister analysis paralysis at this point and so you just jump in in kind of like the most shaky time in probably last 100 years. What got you going? You’re just like, “It’s time to…”

So I wanted to do it. I’m someone who just doesn’t watch the news so I wasn’t really being inundated with all of the things that people were saying about real estate. I wasn’t ignorant to it but I wasn’t getting beat over the head with it every night either because I don’t watch the news. But what really helped me was my wife and I joined a weekend, they called it a fly on the wall blueprint, it was a local real estate investor who put this clinic on on a Friday, Saturday, Sunday, and me and my wife went to it, it was incredibly expensive for the money that we had at the time, it was $2,900 for both of us. And it wasn’t even that good. It was like the content was weak. But what it did was it gave us belief and we believed that we could do it. We had some of the basic questions answered for us during that workshop, even though it wasn’t incredibly comprehensive, it was very basic, but all we needed to know was what does this thing look like? What does it look like to flip a house? How do you start, what’s the middle and what the end? And how does that look? And we were in the room with other people who had done some level of flipping houses and so we got belief. And I think, not to get overly dramatic, but throughout history, one thing that’s kept a lot of cultures and religions and races able to go on the next day is belief.

Belief is really powerful. And I think belief is what will get you there sometimes and belief will definitely keep you from getting there. If you don’t believe you can do something, you absolutely cannot. Share on X

And then you can only do it if you believe that you can. It gave me belief and that’s how we got started. We didn’t really pay attention to the news. It wasn’t a big deal. We were watching like all the flipping shows on HGTV, that was giving us some confidence that we could do this thing and we went out there and did it.

Love that, man. I love it. And so I wanted to circle back real quick because, again, you’re a new investor at this point and you’re having some contractor issues. You had to pay this electrician twice to get this lien off your house.

Yep.

Again, great lesson learned, right? Honestly, I’ve never heard that bit of advice before is to pay the subcontractors directly or confirm that they’ve been paid before you do your final payment to your general contractor. Were you able to go after that general contractor at all or was he just ghost?

He ghosted me. I mean, off the face of the earth. Just gone. Couldn’t get a hold of him, wouldn’t respond. I guess I could have tried to pursue him legally but I didn’t. I just moved on. Like I flipped a hundred houses after that and he got none of it because he was just short sighted on stealing $4,000 from me, it’s stupid, but…

Yeah.

I’m waiting — by the way, I think this is a life lesson too. I’m way more about, “Cut the loss, move on, learn from it, don’t look back, don’t dwell on it.” I’m way more that than I am, “Let’s dig in. Let’s sue. Let’s sue his family. Let’s try to take his business.” Like I’m not that guy. Karma will get that guy, I’m just going to move on.

Yeah, I think there’s something to that too. Not letting that add a lot more stress and I’m sure you saw as $4,000, you’re like whatever. Maybe if it was $40,00 or $400,000, then it’d be a different story but like, yeah, you got to kind of weight out those pros and cons. And so, all right, man, so first property was a success. That usually means there’s going to be more after that and so what happens with your second, third, and fourth and how did you scale up to a hundred that you mentioned?

Yeah, there was more after that and, honestly, I told you I kept a secret. and that was how I mitigated my fear of just flopping and falling on my face and being embarrassed. And so we didn’t tell anybody but we did start a Facebook page without our faces on it and it was sort of like my business name so there was no way to know it was me casually. And we started building that page and I got a call from the local, like southeast Michigan’s largest newspaper from a reporter and she’s like, “We wanna do a story on you. Are you willing to do that?” and I said, “Sure, let’s do it.” No big deal. I figure this thing is going to be buried on page 17G, like nobody’s going to see it. So they came out, did a little story, kind of waiting for the little blurb to come out, I’m at my parents’ house on a Sunday and they get a call, it happened to be from my uncle, apparently, as it turned out, and I can just hear my mom saying, “Wait, what? They’re in the newspaper? What do you mean? They’re flipping houses?” and I’m like, “Oh, we never told my parents or anybody.” Next thing you know, we’re front page, full-page color photo of me and my wife standing in front of a house and a big write-up about our business. Man, my family, my friends were all like calling us, like, “What is happening? How do we not know this?” And so some people were like amused by it, some people were hurt. They were like kind of hurt that we didn’t tell them. One of the big things that happened was at my company that I was working for, there were layoffs going on during this time, it was rough economic time. And people were really mad because people were getting laid off, I didn’t get laid off, but while people are getting laid off, this story comes out, next thing you know, there’s this rumor that I should get fired. People are advocating for me to lose my job because I’ve had this other income, I don’t need a job according to them, “He doesn’t need the job, why not fire him?” and it kind of became this lynch mob so I got called into the head of HR, this was a big international company, this isn’t a small company, this is a multibillion dollar company. I get called into the North American HR director and she sits me down, she’s like, “I saw the article. Sure you’ve heard what’s being said,” and I’m like, “Oh, here comes. I’m gonna get fired,” and she said, “I just wanna let you know I think it’s awesome.” She’s like —

That’s amazing.

— I wanna know how you’re doing it. I would love it if you would spend a little time and kinda tell me how you did it, what you’re doing. I’m really interested and I think it’s awesome. You have nothing to worry about. You’re not losing a job.” So I was like that’s awesome. So kind of skated there. And then I sort of did flipping and I’ll get to the hundred how I got there but I was flipping houses and sort of doing one here, one there, wasn’t super — wasn’t scaling it but I did have that full-time job that paid pretty well and I always tell people my business was conceived —

Sorry, what were you doing, Mike? What were you doing as a job? Just curious.

Yeah, I’m in Michigan so it’s automotive. I was working for an automotive supplier and my specific job was I was a program manager and I was in charge of building prototype seat structures, like the metal structure, prototype, we build a hundred of them, we’ll crash them, we’ll burn them, we’ll stress test them, do all the things we have to do, reengineer, go through the same process until everything passes. So I was working on future model seats basically. And so I tell people my business was conceived in 2008. That’s what it was conceived, but it really wasn’t born until I think it was 2012. It was a Friday night, I’m at work, it’s late, it’s eight o’clock at night, we’d been working late all week to try to get one of our clients back on track with their program, we were behind and they were in the building, the client was in the building that day, and the guy who was running the program — it was Ford, I hate when people are real vague, like, “It was Ford and they were awful,” but I do drive a Ford now so there you go. But he was in the building, the guy who ran the program for Ford and he asked me why we were late. He’s like, “It’s Friday night. It’s eight o’clock. What is going on with this program? Why are you guys so far behind?” And I told him the truth. It was a little shared blame, like Ford was in charge of the basic engineering and so we were taking their specs and building it for the most part but we had supply chain issues and things so some shared stuff. and I told him just very honestly the design had issues and some of it wasn’t manufacturable and so we had to get some deviations and all this stuff. I got to the end of my explanation, very honest explanation, and he took a step closer to me, face right in front of mine and said, “You’re a liar.” I was like, wow, it’s eight o’clock at night, my team has been here, they haven’t seen their wife and kids all week, I haven’t seen my wife and kids all week and now I’m being called a liar. So I just excuse myself from the conversation politely, went to my boss who was there and I said, “Keith, it’s eight o’clock on a Friday. This isn’t productive. Everybody needs to go home. The client’s calling us liars. Can we just end this tonight? It’s just late and everyone’s tired, no one’s being productive anymore. It’s just devolving.” And he’s like, “You need to get your priorities straight.” And I was like, wow, punch in the gut and I really liked Keith. But I said, “You’re right,” and I walked out and that was the moment I decided I’m going to start focusing harder on the side hustle and that’s going to be my escape plan to get out of this career.

Yeah, man. What a powerful story, right? And it almost feels like it should be in a story book or something like that. That’s such a good lesson. Maybe it isn’t and that’s what you’re going to pitch to us at the end here but I think that whole interaction with your boss, who you like who said you needed to get your priorities straight, what a gut punch, right? But I just want to emphasize the importance of a side hustle or real estate because if you didn’t have that side hustle, that wasn’t even passive income at that point, you had two jobs, and so the fact that you had a side hustle gave you that FU money or at least that confidence to be like, “You know what, what am I doing here? My wife and my kids are my priority. I need to get out of here. Any job that’s taking away from them, I gotta get out.” So, dude, kudos to you. I wish I could like be a fly on the wall during that whole interaction.

Yeah, it was that epic.

So I’m thinking that was the last time you walked through those doors.

I actually cleaned it up. The client called me an effing liar, I just cleaned it up for the broadcast, but he was in my face, man. It was bad.

Wow. Was it the last time you walk through those doors? Did you quit right on the spot there or…?

I did not. You know, I have a wife and kids. My wife is very conservative and so what I decided was I needed to pack away a year’s worth of salary in the bank sitting there so that I had a little bit of a runway to grow my own thing. So, it took me a year to do that but I quit a year later and a year after that my business gross profits, not gross revenue, gross profits, million dollars. I made more the year that I quit my business than I had made in the previous 20 years working for a company. And then it took off from there. And, honestly, at that point, when I went from quitting my job to getting to a hundred houses, I changed my strategy. I stopped flipping houses and I started to become more of a wholesaler and my business exploded. And I’ve done seven figures in profit ever since every single year.

Wow, that’s amazing. And so wholesaling was not really — today, it’s certainly more popular than it was must have been back in 2012, ’13. Hell, even like five years ago. And so I guess was there anyone that you followed for that strategy or how did you continue that?

I actually joined a mastermind called Seven-Figure Flipping. It was new in 2015 and it really taught me a lot because I ended up quitting at the end of 2014 and then spent 2015 building my wholesaling business and I had done seven figures by the end of that year. It’s called Seven-Figure Flipping. It was an expensive mastermind. It was one of those year masterminds where it’s $25,000 and I was like — I knew the guy running it though. I knew the guy who was in charge. I had met him, had become friendly with him over the last few years, and I knew he was doing a hundred deals a year in Southern California. And he wasn’t working in his job, like he just wasn’t busy. He was following his wife around driving her crazy all day and so he started the mastermind for something to do. And so I knew that guy was legit and joined and literally scaled up to a hundred deals that first year and a million dollars in profit.

Wow. So was it worth the 25 grand?

More than worth the 25 grand. It cost me 25 to make a million that I wasn’t making before.

Isn’t that funny? What’s really funny is that people will pay $50,000 a year to go to college, probably $200,000 total, just to get an education so they can come out and make 100 grand, probably 70 after taxes and all that stuff, and like you said, you’re not really building wealth that way, but if you just invest $25,000 in an extremely concentrated thing that you want to do, a mastermind group, something, that’s your tuition and you’re able to like 40X —

Yeah.

— your income in year one. And so I would have to say, like — and I’m sure it’s more than just the stuff you’ve learned in that mastermind. The people, I’m sure, right?

Yeah, 100%. I’ve got lifelong friendships from that mastermind. I’m still part of it. I actually am an owner now so it meant everything to me. It made all the difference in the world. Some of my best friends in the world, I found there. But, to your point, I always pay for coaching on anything, not just real estate. If I want to learn or do anything at a high level, if it’s important to me to be good at it, I immediately look for someone who I can pay to help me get there because the fact of the matter is, I’m not 21 years old anymore.

Time matters to me a lot. My time is valuable. I would really rather pay someone to accelerate my learning and pay for speed than to try to figure things out on my own Share on X

because there’s a lot of information out there. You can Google anything but there’s way more bad or misleading or sort of half-hearted information than there is really good, solid information. And sometimes it’s a needle in the haystack. You want to learn how to flip houses, yeah, it’s all out there, but I want it curated. I want someone to just give me the good stuff, tell me what I need to know, what really works, what’s been proven and let me go. So, when I started learning, I had a mentor when I joined that group. I mean, he told me something. I didn’t question it because there’s people out there that I call yeah but-ers, right? They’ll say, “Hey, I want to be in real estate, I want to flip houses, I want wholesale, I want to buy buy-and-holds, whatever, short-term rentals. What do I do? How do I start?” And I go, “Well, listen, let’s hear more about it and tell me your situation. Okay, great. This is what I would do.” And the minute you start telling them what they want to know, they go, “Yeah, but in my market, you can’t really do that,” and I’m like, “Well, okay, what about this?” “Yeah, but that doesn’t work. I tried it.” It’s like, “All right, man, you’re a yeah but-er, it’s just no matter what I tell you, you’re going to have a yeah but and that’s why you’re not gonna succeed because you’re more interested in why something won’t work than in how it will work.” And I’m just a big fan of thinking about how it will work. I just spoke to someone before we hopped on this call and I said one of the greatest things that you can experience in your life is ignorance of all the things that can go wrong or being a little naive to what you should be worried about. My daughter started flipping houses four years ago. She wanted to start flipping. She only saw my success. She grew up seeing me flipping houses and wholesaling and all this stuff. She bought three houses in three weeks, flipped them and made $60,000. She should have been terrified of a hundred things along the way but she didn’t know to be scared. She only saw confidence from me and she never really thought — she didn’t even know people were nervous to do it. To her, it was like who wouldn’t do it? This seems like a no-brainer. And so, sometimes, not having all that fear of people telling you what could go wrong. Like I said, I didn’t know in ’08 that the market was so bad. I don’t listen to the news so I wasn’t 100 percent dialed into how bad it was. Maybe that would have scared me away, I don’t know. Doubt it.

Yeah, I think that’s a huge thing. I mean, it probably would have, right? That’s the thing, is like if you’ll look for an excuse, you’ll find one, and it’s much easier to find an excuse than it is to find a way.

Yeah.

And I think you need to — if you want something bad enough, you know, and maybe flipping isn’t the right business for you if you’re listening, maybe it’s something else but to go all in on it, 100 percent. And also, I mean, I had that kind of scarcity mindset when I was first starting out but I didn’t want to pay for coaching, that I could just get everything free online and all that and I’d watch YouTube videos and I’d spend hours and hours listening to conflicting advice and all this stuff, this guy says this, this guy says that, it’s like, damn, why isn’t there just like a way? I’m like, you, dude, like I am not good with details, I’m not really great at like — I’m okay with analysis and stuff but like the little stuff I just don’t think about. And so what people make literally — my wife makes fun of me for this. She’s our health person in the relationship. She tells me to eat something, I eat it, I don’t question it, because I know that she does all the research on nutrition so I’m going to just do that. And so you need to find somebody ahead of you who will just tell you what to do and you just got to execute on it.

Yep. Find someone who’s where you want to be or knows what you want to know and just do what they say, like be a good rule follower in that case so that you can get to where you want to go. Someone, like I said, my mentor, he told me to do something and I did it. I didn’t ask him why or say, “Oh, I don’t know about that.” I just did it. And guess what? You start following a blueprint that’s been proven to work and you get success. It’s very simple.

You don’t have to be creative to be successful, you just have to be diligent and disciplined enough to take the advice that you’re seeking. Share on X

Yeah, I would say discipline and being okay with boring. I think it’s really easy to get excited about something for a couple of months and then you let it go but when you’re trying to source deals for your wholesaling business, like tell me a little bit about that, I guess, like how did you source those deals? I’m sure you had to stay consistent with it, you didn’t just send that one round of mailers and get ten deals.

Yep. So, it’s true. Marketing is something that — there’s this weird sort of, I can’t explain the phenomenon but I only know it’s real.

There is momentum in marketing. Share on X

If you start a marketing campaign, I don’t care what it is and we can talk about mine — actually, I created five videos, like a video series of how I do direct mail because I was so sick of answering the question over and over, it’s completely free and I can give your audience that URL, but you have to be consistent with direct mail. I don’t know why but I’ve done this where I start doing direct mail and maybe I have a little success, I start getting a lot of deals, and then, and this is long time ago, but I would stop my marketing and I would sort of handle these deals. Mostly when I was flipping, I did this. I would start handling those deals, kind of get them going towards, and then I would start marketing again and it would take me two or three or four months to get back that flywheel, to get that thing moving again to get more deals and I don’t know why but it is. And so the biggest thing I tell people is if they start any marketing campaign, I don’t care what it is, from scratch, give it at least six months. You have to give it six months. If you don’t, you know, I’ve had a lot of people tell me direct mail doesn’t work for them and I think direct mail is fantastic in real estate and they said it doesn’t work for them and I’ll go, “Okay, cool. Tell me what you did.” “Well, I created some cards and I sent them out, I pulled a list, I sent them out.” I said, “Great. What did you do month two?” “Well, nothing because it didn’t work.” I’m like, “Okay, well, I could tell you why it didn’t work because you didn’t give it long enough. You didn’t really give it a chance.” So it’s like going out on one date with somebody and saying, “Oh, it’s not gonna work out.” Like, dude, you went on one date, you know, whatever. It’s just there is momentum behind it and the way that I got those hundred deals, I think you asked me that, short answer is the vast majority of my deals over the last seven years, I’ve gotten from direct mail. Pay per click, like Google AdWords is a second place and that one is my best performing marketing source right now. Direct mail not as much. In Michigan when COVID hit, we were doing a ton of direct mail and literally overnight, the calls stopped coming in because when COVID hit and the world had the bejesus scared out of them, people stopped touching mail in Michigan, literally stopped getting their mail. They wouldn’t touch it. They were afraid of getting COVID. And so my calls stopped and we just cut off the mail. But when we did that, coincidentally, people were being freaked out that they’re going to lose their job and lose their house and so they started — what do you think they start putting into Google? “How do I sell my house fast,” right? And so I was already in PPC and I kind of had dominated that market in my market and we started getting tons of calls. And so kind of like direct mail went away but PPC surged and so between direct mail and PPC, far and away, hands down, that’s 90 percent of our deals that we’ve done in the last seven years had been direct mail and PPC.

Super interesting. Yeah. It’s funny that you use PPC as a wholesaler too. As a team of real estate agents, that’s one thing that we’re really getting on to this year too is the PPC stuff. And the conversion, at least for us, has been okay. It hasn’t been great, honestly, compared to some of our other lead sources but I just love it because it’s one of those things that it’s so scalable, both direct mail and PPC. You figure out the formula that makes it work and then you just throw more money at it and then you get immediate ROI. And so I think that is — you know, when you are building a business and you’re building a brand, you need to kind of figure out where is that scalability if you do want to scale. And so I mean, that’s the answer right there. You built a machine and you built an engine, well, keeping the cars, you poured a lot of gas in that engine and it just went. And so why don’t you tell us a little bit about kind of like where you are today? You’re a clearly successful flipper in Michigan. Did you ever keep any of those rental properties? Have you built a portfolio yourself?

Yeah, I did, actually. From 2015 to 2017, I bought 25 rentals. I mean, we could have a whole show about how I did it, what I did, what I did wrong, but the end of the story, the last chapter is I sold them all in 2021 for a variety of reasons. Number one, I didn’t buy them all in the best areas and so I was experiencing a lot of turnover and a lot of stuff that I shouldn’t have had to experience if I would have bought in slightly nicer neighborhoods. That’s number one. Number two, I rarely bulletproof them when I bought them, meaning I didn’t just replace mechanicals and roofs and things that were at the end of their life but still kind of working. I just said, “Ugh, the roof’s 20 years old, it’s a 25-year roof, leave it. The mechanicals are 18, 20 years old, kind of at the end of their life, ugh, leave it,” and so you build up 25 of these houses that have major issues pending, at some point, the check is going to come, the bill is going to come for those and it started coming and in a very short period of time, I was eating all my cash flow with major expenses, roofs, HVAC, AC, electric, all kinds of stuff. And, coincidentally, we were sort of at the top of the market. House prices were surging and I just looked at the situation and I had started another business that I wanted to put my cash into, honestly, so I looked at it and said, “What are these houses is going to be worth more, keeping in mind they’re not the greatest neighborhoods, when are they going to be worth more than they are now?” and I didn’t think it was going to happen in a decade, like I would be surprised. And so I just started cashing out and selling them all and put that money into a different vehicle.

Okay, very cool, man. Honestly, I feel like you’ve got like this crystal ball as you get in like the bottom in ’08, you come out at the top in 2021.

I know. I know. Dumb luck or, I don’t know, man. I’ll say I’m smart. I’ll leave it there but I don’t know if that’s true.

Yeah, fair enough. And so, all right, well, I’m kind of curious now, you must have had a pretty decent tax bill.

Yeah.

And then you go ahead and invest into a business, like what is this business that you’re doing? This is probably where you’re at today, yeah?

No, I’ve got a couple different businesses. So that business is sort of — is a little different. I have a lending company. I started a hard money lending company, because when I started investing in ’08 and then fast forward to 2003, one thing has remained constant, people desperately need money for their deals. And most people, investors, most of them, don’t have the wherewithal, the discipline, whatever you want to call it, to go out and raise private money, which is the right thing to do, in my opinion. Most of them still go to hard money and things that are a little bit more like easy or automatic. Hard money is a light switch, I need a hard money, here’s the house, you show it to them, they say, “Yes, we’ll fund it,” and, boom, it’s gone. But they’re going to charge you a lot for that and it’s a little bit more difficult to deal with the hurdles they put in front of you, as opposed to finding a high net worth individual, creating a relationship, showing them what you’re doing, getting him to know, love, and trust you or her, and then now I need $150,000 to buy a house and flip it, they just wire me $150,000. And we have paperwork, obviously. We have a promissory note and all that and mortgage but, ultimately, it’s like, “Hey, I need 150,” they’re like, “Great, I’ll send over the docs,” I sign them, 150 gets wired to the title company, easy. Way easier than hard money. But I started a hard money company because I know there’s a need and I’ve used hard money, I know the pain points and I just tried to create a better mousetrap, a much smoother experience, way less friction, just make it a pleasant experience and people will come to you. So that’s where I wanted to put my money as far as investing goes. My wholesaling company, like I said, in 2015, we did a hundred deals, seven figures, we have consistently done between 80 and 100 deals depending on the year and COVID and stuff but we’ve consistently also made seven figures in profits every year. And we built a team, like you said, I built an engine. It wasn’t just the marketing but I’ve got people that take incoming calls, I have people that go on appointments and get contracts, I have people that take those contracts and find an end buyer, whether it’s a house flipper or a landlord who wants that house, and someone who handles all the title work. And so, right now, as we’re talking, I’m buying and selling houses that I don’t know about, I don’t know the address, my team is handling it. I spend — you know, they talk about the four-hour workweek. I’ve got a two-hour workweek. I work about two hours in my main real estate business on a big week, like on a busy week, it’s two hours. I have a half-hour meeting with the team, I have a half an hour meeting with the leadership staff, and the other hour is just miscellaneous, checking comps for my guys, maybe if there’s one that’s a little tough or just answering a problem that came up, HR issues, like that. Two hours and I’m in and out. And so it’s a transactional business, wholesaling, but it can be automated, systemized, put people in place, build that engine, and I can step out of it.

Right. That’s amazing too. And so are you, if you’re doing 80 to 100 deals a year, are you looking to scale out even more or are you just kind of happy with where that’s at and you’re just like, “Okay, let’s go on to the next thing”?

We were looking to scale back in like ’19 and then COVID hit and it caused us to take a step back, we had to let some people go on our team and we sort of got real lean and what happened actually during COVID, I don’t really talk about this a lot but it’s interesting since you’re kind of bringing up the scaling, the first year of COVID, our revenue went down 25 percent and our net profit went up 25 percent. So we did less and made more. And that was for the first time in our business, me and my partner, that we were like, “Holy crap, we didn’t work that hard this year and we made more. Let’s look at that.” And so we were kind of content to be in that mode. Now, fast forward to the end of 2022, we just hired an operations manager, a COO, to come in and help us kind of ramp things up a little bit and so what happened was me and my partner were kind of unwilling to work our butts off like we were in 2019 when we weren’t even making as much but we want to scale and so we brought this person in to help us scale, take on some of the day-to-day operations stuff that we really don’t love because I’m not a detail guy so I don’t like holding people to processes and, yes, we do have higher goals this year.

Yeah. So tell me about, I want to talk about how did that happen during COVID? Did you just — was it because you fired people and they weren’t giving you an ROI basically?

Well, the way it happened was you mentioned PPC that you’re doing that in your business and I can’t remember, I feel like you maybe implied that it’s a lot of money going out and whatever. What we found in our business is, at the end of 2019, we were sending 60,000 mail pieces out every month and so when you send out that much mail, you have to staff up your phone people and so we were managing more people. When COVID hit, we stopped the direct mail and we didn’t need all those people to answer the phones. So, direct mail is a solicitation. You’re soliciting people to call you if they’re in a certain situation. PPC, you are the one being solicited. People are looking for you and so when you get on a call from a direct-mail piece and when you get on a call from someone who filled out a form because your PPC ad, way different conversation. In the first one with the direct mail, you’re sort of trying to talk them off the ledge, let them know that you’re not some scam person trying to steal their house, like you’re trying to build rapport and get them to trust you. When someone calls you because they were looking for you at midnight because they’re freaking out they’re going to lose their house and they get on the phone with you, they’re instantly ready to talk. They’re ready to give you information.

So, what we find is the leads that we get through PPC are infinitely better and more profitable than direct mail can be because we’re soliciting them. We’re trying to convince someone to sell us their house at a discount. Share on X

The people that are looking for us, it’s just better. So our ROI, like cost of acquisition in PPC has always been better. We just got way more deals from direct mail because we were doing more volume.

I see.

So when we got rid of the direct mail, it saved all the direct mail money and it saved the money of the people that we had working for us and so we could just scale down with less deals, we just scaled down. And because they were all PPC deals, they were all fatter. So just better deals, less volume.

Yeah. I know a lot of wholesalers today and a lot of them are still pretty high on direct mail and they still do that and I haven’t heard much about PPC so that’s funny. That’s funny that…

I still do direct mail. We got back into it because I think direct mail — like I did this exercise once. I speak on stage a couple times a year but at one of the events that I speak at every year, it’s usually around 800 to 1,000 people and there’s about 25 real estate investors that are speakers and there’s tons of people there that are high high level. And so I did an informal poll a couple of years ago and just said, “Hey, between you and me,” like this isn’t on stage, just me talking to people behind stage or whatever, and just said, “Hey, where do you get the most deals? What’s your best lead source traditionally? Not right now, this month, or last year but like, traditionally, where do you get most of your deals?” Every single one of them said direct mail. It doesn’t matter if they were talking about PPC on stage or cold calling or whatever, they said, “Between you and me, in the last decade, direct mail. I’ve gotten most of my deals from direct mail.” It is still a very, very, very solid way to find deals and I think it’s the most scalable, because PPC is scalable to an extent. It’s like a bidding process though. You put your money on the table and you can use that money to bid on keywords, but when that money is gone, you stop, your marketing stops. And so if you put your limit of your budget at like, say, $5,000 and on the 15th of the month, you’ve already spent $5,000, your ads stop right then and there, you do not show up anymore on Google. It’s scalable in a sense, but in a sense, you’re just sort of trying to have a big enough pot that you never run out of money. So, for me, in my market, we have a $14,000 pot every month and we usually spend about $12,000 of it, $12,000, $13,000. But if I ever get to the point where we spend all $14,000 and my marketing stopped on the 27th of the month, I know I’ve got to bump up that pot. I need to do more. But what I can’t do is say, “All right, I wanna spend $50,000 this month.” It just doesn’t work that way. If you’re number one by spending $12,000, you’re top, you’re the number one ranked ad by spending $10,000 or $15,000. spending another $10,000 doesn’t make you more than one, you can only be one, right?

Right, there’s a finite amount.

And so it’s not infinitely scalable. It’s only scalable to a point. Direct mail, on the other hand, if I send out a thousand cards and get one deal, I can send out 10,000 cards and, theoretically, over time, should get ten deals and then so forth and so on. And then if you say, “I wanna send out a million cards,” you can scale it that way. There’s probably a point of diminishing returns, right? There’s probably a point where it’s like, all right, I can send more cards but I’m in a market of 500,000 people, sending a million cards isn’t going to help me.

Right, right. Very cool, man. Very interesting. Yeah, I think it’s intriguing. I love how different people run their businesses different ways. And so I guess, let’s fast forward a bit, let’s just — I’m going to do a quick recap real quick so you started off as analysis paralysis back in ’03, then ’08 comes and you take action, flipping houses, flipping houses, you kind of flip over a hundred houses, get into wholesaling, 2015, joined that mastermind which changed your life, and now you’re here today and you’ve got a wholesaling business that is pretty much very little involvement from you, you sold your rental properties to then invest in this business that I’m hoping you tell me about right now. And then, yeah, what else you got going on today?

So aside from the wholesaling business, like I said, I started a hard money lending company called Blitzar Capital. We’re currently raising money for that and bringing in accredited investors, giving them great preferred returns, and that business is growing, I love it. I also have a podcast called Just Start Real Estate so everyone listening is podcast listeners, I assume. I’ve had my podcast since 2013 and it’s been going great. I have 636 episodes, which I just did 636th today so I spent a lot of time there. And I started a short-term rental business with my daughter just recently, the one that flipped the three houses. She’s got a full-time job that she loves, she doesn’t want to leave it, she doesn’t want to be a real estate investor full time but she wants some other income and so I started that business with her as just sort of like a daddy-daughter thing to do, something fun.

Very nice. That must be pretty gratifying to see your daughter kind of following in her footsteps a little bit.

Yeah, it’s awesome. She’s ten times better than I am. If I would have started when she did, I would have been so much better off. She’s going to just crush. By the time she’s my age, she won’t have to work, for sure. She’ll be crushing. She’s smart.

That’s amazing. Love that. Love it. All right, Mike, well, we’re about to head into the final part of the show, which is The Final Four, but before we do, any other parting words of wisdom for the audience?

I’ll probably be giving it here in a minute when you start asking me questions but, I mean, listen, I’ll tell you this. This is something I’m hearing a lot lately and it really frustrates me and so I’ll try not to get on a soapbox or be overly aggressive with the audience. But the market that we’re in right now is not a bad market for real estate investors. The market we just left also wasn’t bad. There’s no such thing as a bad market. There’s buyer’s markets and seller’s markets. So if you’re a seller and it’s a buyers’ market, you may think it’s a bad market, right? As real estate investors, we’re on both sides.

We buy houses, we sell houses. So some part of the business is always good for us and so if you’re thinking about getting into real estate in any capacity, in my opinion, don’t wait for the market to get “better” Share on X

I’m doing air quotes, sarcastic air quotes, don’t wait for it to get better. It’s fine. You just have to know the market you’re in and play the game that that market is conducive to. So don’t sit on the sidelines because like we talked about earlier, there’s always a reason to not do something. The reason people are using now is, “House prices are going down, interests going up, I’m gonna stay out.” There’s always going to be something, guys, always going to be something. There’s going to be a war in Ukraine, there’s going to be interest rates, there’s going to be China’s invading Taiwan, whatever it is, go out there and get started because the best time to start your business was 10 years ago or 14 years ago when I started. The next best time is today, like today. Start today. Listen to this podcast. Wait ’til we’re done because we’re going to drop gold bombs on you still but when you’re done listening to this, go start your business. Take one step.

I love that. Totally love that. I 100 percent agree. And that goes for buying your first house hack, that goes for starting your business, that goes for anything. It’s always — I’ve never heard a single person regret, saying they wish they started later.

No, never.

It’s always, “I wish I started earlier.”

100 percent.

I know a lot of people who have a lot of businesses. So that’s very sound advice. So, we’re going to get into…

The Final Four.

It’s way better when Z is here doing that with me but my first question is what are you reading right now?

I just started reading a book called Swagger by Jimmy Johnson, head coach of these guys, Cowboys, back in the early 90s, late 80s. Love him. I’m interested because it’s the Cowboys but also I’m very interested in him. He’s a leader and I just love his stuff and just incredibly. I don’t always read business, real estate. Sometimes I read for enjoyment, but this is sort of twofold. I’m going to enjoy it because this is my team but also I do think that Jimmy Johnson has a lot of leadership strategies and lessons learned so I’m looking forward to it.

The Cowboys were the dynasty of the 90s.

Yeah, they were.

Yeah. All right, man, second question, what is the best piece of advice you’ve ever received?

It’s funny, I named my podcast after the best advice I’ve ever received, just start. I would listen to podcasts and things of people that I admired, in all industries, all levels, and it seemed like at the end, back then, at least for sure and even now, the host would inevitably say, “What do you wanna leave the audience with? What’s one piece of advice you wanna leave them with?” and they would always say just start.

Just get started. Don’t wait, just get started. That’s the best advice I ever use. Share on X

And, honestly, I take that a little bit farther than most people. It’s not just start your business, sometimes, it’s like just start your day. Stop moping around, stop making it — like get started. If you want to take your business to the next level, you want to go from working, doing it as a part-time hustle like I did and do it as a full-time thing, let’s go. Let’s get started. I’m so impatient and I’m so intolerant of people who have a million excuses why they’re not starting. I’m real tough love in those situations. Real tough love. So, yeah, man, just get started, best advice.

Love that, man. What is your why?

This is probably cliché, but, sorry, it’s just what it is, my family. It just is. Right now, I’m in a home office. My daughter is upstairs, she’s staying with us. My wife’s up there. She’s retired. And as soon as I’m done here, I’m going to walk away, go up there and hang out with them for a while. That’s why I do what I do. I missed a lot when my kids were growing up because I was working and then I missed even more when I started real estate investing because I was doing it as a side hustle and side hustles sort of implies you’re doing it at night, you’re doing it on the weekends, and so I was gone even more, and I hated it and I did want to get my priorities straight but I knew I had to suffer for a short amount of time so that I could be happy the rest of my life. And so my why are my kids. I just want to be around them. I just love being a dad, I love being a husband, and that’s where I want to spend my time. That’s why I work two hours a week in my business. I built that machine because I don’t want it to be a job. I don’t want to be doing it 40 hours a week and stressing out about it when I’m not doing it. I want to be able to spend time with my family, that’s most important to me.

Yeah, I love that. And I think it’s commendable because I’m sure you could go into that wholesaling business and you could scale it to 2 million, 3 million, 5 million, 10 million, right?

Yeah.

But, you know, when is enough enough? I think you’ve decided that enough is enough and you got your COO, like you still want to grow and scale but you’re no longer trading your time to scale. You’ll pay someone else to scale.

Totally. Yep. 100 percent. I definitely will pay to get my time back, there’s no doubt about it.

All right, man. So, last kind of sort of question, tell me about your first crush.

My first crush? Yeah. So my first crush was a girl that I met in, what grade was I in? Sixth grade. I was new to the school. The kid that I made best friends with, it was his ex-girlfriend. He had dated her the year before. He was still madly in love with her, as much as you can be in fifth grade. So we go into sixth grade, I’m new to the school, I don’t know the history. I meet this girl. She likes me, I like her, we start dating. Tons of problems with my friend. Like he was clearly not okay with it. He said he was but he wasn’t. And so it was interesting and I dated her for a year and I was probably way too much of a putz for her, she was way better, had way more on the horizon than I did at that point and she broke up with me halfway through the year and my friend who was mad at me magically was not mad at me anymore after she broke up with me. So it was an interesting, tumultuous sixth grade year.

Wow. Isn’t that funny? I love that.

Yeah.

Cool man. All right, Mike, where can people find out more about you, the things that you offer, and maybe if they want to know more about your first crush or whatever it is?

Well, a couple of things. So I mentioned my podcast, Just Start Real Estate. If you email me at mike@mikesimmons.com, sort of like so vain to say that, it feels, I hate saying it, but mike@mikesimmons.com, you can get a hold of me there. I also created a landing page for your listeners specifically and so I am going to call it, I’m thinking right now — okay, so if you go to mikesimmons.com/invest2fi, you will get a free digital download of my book which is called Level Jumping, which if you’re watching on camera, this is it. This is the formula that I used to go from a couple of deals a month to 10 to 12 deals a month. This is how I scaled to a million dollars is in that book. And so go and check that out. And then, lastly, if it’s cool with you, I’m going to give out the information for the direct mail video series that I created. It’s called Winning Direct Mail so if you go to winningdirectmail.com, you can get access to that. It’s totally free, no obligation, nothing, it’s just free for you to use for your direct mail efforts.

Love that, man. Well, thanks so much for coming on, for being so generous with everything that you’ve been giving. I’m going to go download the book myself here and I’m looking forward to giving it a read. So, Mike, so good to talk to you, man. And, yeah, we’ll be in touch soon, I’m sure.

All right, thanks for having me. Appreciate it.

—

And that was Mike Simmons. Man, what a story Mike has. Man, from starting out just being a scared little 30-year-old all the way to having a multimillion-dollar wholesale business, he’s got a mastermind, he’s got hard money, he’s doing stuff with his little girls — not his little girls, his girls seem actually quite old, but, to him, I’m sure they’re still little girls, the short-term rental stuff, and he’s also just dropped so many free gifts to us at the end. So go download his book, go download the stuff that he’s offering. This stuff is free. We talked for an hour but you can really dive in and really get to understand how Mike scales his businesses by doing this and, honestly, I’m going to download his book because I’m always looking for different angles and different perspectives as to how people scale. And so if you guys liked this episode and you like this type of episode, please let us know by leaving a rating and review on iTunes. Hit me up on Instagram, I’m at @thefiguy on Instagram, would love to get to know you. Shoot me a message. I try to respond to all my messages. And, yeah, we’ll hopefully be in touch and talk soon. We’ll see you guys all next week.

Tagged analysis paralysis, cashflow, Financial Freedom, financial independence, hard money, Short-Term Rentals, wholesaling

Episode 127 – Scaling 7-Figure Businesses With Mike Simmons

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Scaling 7-Figure Businesses With Mike Simmons

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