Joe: All right. Hey, guys. Joe McCall, your Real Estate Investing Mastery podcast. I've been doing a lot of podcasts lately and this one is going to be one of the most important ones I've done maybe ever. But certainly in a long, long time, I've got my good man, my good friend Jason Medley on the line. Jason has been on a lot of podcasts lately, too. A lot of people are talking about, hey, what's going on? This Corona virus thing. And people are panicking and freaking out. But Jason has been seen as one of the experts in the industry because he's been teaching the highest, most elite mastermind in real estate. And he's been talking about this for years. It's coming. Got to get your financial house in order. And guess what? It's happening. Right. And a lot of people are now coming to Jason because he's kind of been seen as the leader in these. Well, he is the leader of this mastermind called collective genius. We've got him here on this podcast to talk to us at Real Estate Investing Mastery Nation. That's what you call us. That's my new title for us. Here to talk about, kind of, I just don't want another prediction of what's going to happen. Everybody's been talking about that. Everyone's been pontificating on their own platforms and doing this stuff, which is good. Right. But like, who knows what's going to happen? No, but I wanted to get Medley on here because and I've asked him to maybe smack us around a little bit, maybe rattle our cage a little bit, because I think we need to start taking this seriously. I know a lot of us already have, but we need to like get our head out of the sand and do what we can now if it's not too late to prepare. But also, let's think about the next 10 years when this happens again. How are we going to avoid the same mistakes we're making now? But first, let me say this. This podcast is brought to you by my book right here. And this is an important book for right now. Why? Because this is the book when the recession happened in '08. These are the deals that I did, quit my job in 2009, flipping lease options. They're not sexy deals, but I was doing three or four of them a month in 2009 flipping lease options. And you can get this book for free at WLOBook.com, WLOBook.com. It's called wholesaling lease options. Go check it out. And it's about flipping lease options and it's when everybody is running to the hills in '09, I quit my job and drove right into the real estate market. And I had started I'd been investing for three or four years already. I made a lot of mistakes. I lost a lot of houses. But when I learned how to do creative deals, how to do creative deals, I was able to weather the storm and come out ahead. And I love lease options. So it's really important. I want you to check out this book WLOBook.com It's free. All right. So, Jason, glad you're here. Thank you, man, for being here. Glad to be here. Let's rock and roll. We got a lot of people watching right now live on YouTube and Facebook. We're going to be releasing this later as an audio podcast. So I want to encourage you guys that are listening and watching right now. If you've got questions for Jason, now's the time to type in your questions. If you have comments and feedback, just say hello in your YouTube comment feed or in your Facebook feed. Right now, just say hello.

Jason: Let's have some fun. Let's make this interactive on. What's up, Orin? You know, Orin? I know an Orin and I don't know if I know or Orin Sofrin, but I'm just saying. Hi.

Joe: Hey, man. So we'll get more people in here giving comments and feedback and stuff later. Sure. And so we're glad you guys are here. What's up, Sean. All right. So, Jason, man, you've been kind of on the circuit lately. The last week on a lot of different podcast, people are asking you your opinion bias. I'm tired, too. This is probably my sixth podcast in the last two or three days. But I think a lot of people are hungry right now. They're panicking. You know, every day something new happens, man. You know, something new is out there in the news. I'm starting to think see things where before I was more optimistic. Maybe today I'm a little more pessimistic. Right. But what's going on? First of all, Jason, in your world, how are you doing? How's your family. How's your wife?

Jason: Well, maybe this is the part where we start about sharing. I want to answer that question. And at the same time, share part of the message that I've been trying to spread, mentioning my family, my wife, my little girl, my mom, my mama, they are all healthy and happy. Good. Right, right. Right now, everything is good. And the reason that I say that is because one of the things that we need to talk about the most, you guys probably don't even know me. I usually lay pretty low, quite honestly, prior to all of this nonsense. I'm not a big Facebook social media person, however, I've kind of cranked up over the last couple of weeks. But the reason that you don't know me, you probably don't care a lot about my family or anything like that. But let's talk about family. Right. I think what's critically important right now is that you appreciate yours. And times like these are always meant to bring us back to center, always meant to bring us back to center and to remind us of what really matters. And you know, Joe, talk about a lot of people are in fear and panic in the thing that I would suggest how to regulate that is you gotta you gotta start first thing in the morning. And so, I mean, that looks like instead of hitting my feet, I hit my knees. And you know, I don't run off like you believe, whatever you want to believe in. Worry about ourselves, not worried about you. You know what? What you believe in. But for me, regardless of what you believe in. Hit your knees before you hit your feet. Right. And I literally start with the basics. The basics of being able to. I can feel the hardwood floors on my knees. I can feel my elbows on the bed. I can see my wife laying over there sleeping. I can hear my little girls sound machine. I can smell the coffee brewing. All the things that are free and being grateful for those things are what helped me get centered each day.

Jason:So I don't spend so much time worrying about all the things that weren't for free. Houses and cars and all that kind of stuff. Don't get me wrong. Nobody wants to lose your stuff. I don't lose my stuff. But my point is, is that you ask me how my family is. I would say I am super grateful right now for my family. That don't mean we got it all figured out yesterday near my wife or fussing at each other. That's just life. That's just marriage. People get a little bit anxiety sticking in the house. Yes. But I encourage you just to be thankful for. If I were to say, hey, you're worried about money right now, if I was gonna give it 10 million bucks, could you give me your odds? I was gonna give it 10 million bucks. Give me eight years. No. How about your arms? Let no when you are already rich, right. You've got to frame it up the right way.

Joe: That reminds me of Sam Walton. The guy who started Wal-Mart. You know, his last words on his deathbed was, I blew it. I blew it. Yeah, you'd look at him thinking successful, one of the richest men in the world. Biggest business in the world. Sure. And he blew it. That's what he said. I mean, who knows? Maybe he was overmedicated. Maybe he was senile or something like that. But nobody is sitting on their deathbed wishing they'd spent more time work. Wishing they spent more time worrying about the economy and the market. Everybody sits back and things. Man, I wish I would've spent more time with my kids. I wish I would have told them I loved them more. I wish I would have been there to protect them more. I was just saying this earlier on somebody else's podcast. I grew up super poor. I mean, I was white trash growing up. I didn't know this. My dad was a janitor. We lived in a little trailer in a trailer park. And for fun, I'd go dumpster diving. I'd go look for toys in dumpsters. Right. And I didn't know I was poor until I was in my 20s looking at my pictures and thinking, oh, my gosh. But my dad is the hardest working man I've known, ever known. My mom, even though they split up. They always took care of me, always knew I was loved. And I didn't know we were poor, man. I didn't know. But I'm so thankful for my family. And I want to be like that to my kids. Right. I want to be like that to them, knowing that I'm here for them. And that's what's most important. I think this is really good. It's centering us, isn't it? Right now, this crisis thing that's going on, on what is really most important in our lives. Well, you gotta be.

Jason: You just gotta listen to the story that you're telling yourself. Like I'm up. I gotta get up every day at 5:30. I'm banging the drum. And I got up this morning. I'm pour a cup of coffee. My little girl woke up earlier than normal and she came out. She got in the kitchen chair with me and she curled up in there. And the peace, the peace I felt. And I had those thoughts in my mind. I got you. And I gotta get going. Let me take you back in there between about your mama. OK. Yeah. My outcome. My outcome. How whatever is going on impact me is not going to change materially if I sit here for 20 minutes and just hug my child. And to be quite honest with you. That's like a pain reliever. Like when I went to my little girl's in my arms, it just literally is almost like endorphins, like, oh, it's nothing. It's all just crap. There's always so much crap.

Joe: Here's the thing, man. You could lose everything. You could lose your house. You could lose your business. You could lose the mastermind. Collect your genius. But you'll always have your wife and your daughter there. That's all that matters.

Jason: And it's all the matters that I know that everybody came to talk about how to make sure that doesn't happen. I know that's why we're here.

Joe: I want to say this. We had an RV. We didn't have a house was all we had. Everything was in storage and we had an RV. You were traveling around the northwestern corner of the US for three months. You know how liberating it was to think that, you know what, if I did lose everything, I would have my family. We have this little RV. It was tight. We were in that RV, the six of us. And we could be anywhere in the United States. And we only needed to spend, you know, like 10 bucks a day for the camping fee. Right. And then a few bucks for gas and food. But like, it was something cool about the family. A simplicity. Simplicity. Yeah, the simplicity. All right, people. This is the real estate investing REI.  Let's go. Not the Family Mastery podcast. Although families, because without family, what's the point? And I appreciate you saying that what you did about God. Just getting on our knees, praying, thanking God for how he has blessed us. Asking him for wisdom. Jason, I know this beyond a shadow of a doubt that when you ask God for wisdom, he will give it to you, right, like there's never been a time when I have asked him for wisdom that he did not give it to me. Never. Yeah.

Jason: Sometimes you got to be patient. Like I'm praying for it daily. And I've got all these ideas and all these things. I'm going to go do this. I'm going to go do that. And it's just I keep hearing this. Wait to simmer. Simmer down. Good.

Joe: All right. All right. So we're getting some good comments in the YouTubes and Facebook. I appreciate that, guys. Jason, what are you what you're you're in a high level master. You lead this high level mastermind, collective genius. I was a part of it for years. The only reason I dropped out was because I just got tired of traveling. I think about you guys all the time. I miss you all. I really do. And I've seen a lot of other masterminds come and go. There's some of them out there that are still existing, but none of them even compares comes close to what you've got going on. A collective genius. Congratulations to you, man, for what you've done there.

Jason: Thank you, sir. I appreciate that. Most of them were also born from us.

Joe: Exactly. So what if, you know, you've had a lot of people come to you and ask for help or advice? What do you what are you seeing out there and what are you telling them?

Jason: You said the word wisdom a minute ago. And a lot of what we're gonna talk about on this call is wisdom. And we'll start with this. I don't. Everybody wants answers. I don't have 'em. You know, I tell you what, I have guidance, and I have direction. Because we're at a stage in this to where it's happening so quickly, so fast that it's not like had an accident in the car and now you're standing outside the car, up at the front, kind of checking it out and see looking at what the damage was. Right. We've hit the brakes and the car is skidding. And we've got to kind of have impact. And so, yeah, it is very difficult at this point to have answers. Those answers are serializing daily and they are kind of singular in nature because there are different answers. If you're a wholesaler, if you're rehab or you're a turnkey provider, if you're a landlord, a lot of my clients or all of those things in one. And so they're addressing things, all facets. But my point is, is that the first thing you got to realize is there are no answers. You got to chill out and look for guidance and direction. And the thing that I've kind of looked at breaking this down into four categories in much of this is not for me. It Is because I run such a high caliber group.

Jason: Much of this is stuff that they put together that, you know, me being at the head of that table has the ability to look at. But we kind of broke it down into a couple of different categories in which to assess what to do or how to react during this time. And right now, you've got to get you've got to manage your costs and expenses. You've got to manage cash and liquidity. All right. You've got to communicate at a level that you have not communicated in the past, like communication is all hands-on deck. And then finally, once you add those three things are really around stabilization. Manage cash was the first one. Second. Yeah, right. Cash and liquidity management cost and expense management communication. And then those three things are by and large to stabilize the ship. Right. We're plugging holes right now. Right. We've got a finger over here and a finger where we're plugging leaks. And then finally, you've got to be planning, right. You got to have one plan to stabilize. You got to have one plan to excel is the best way that I would kind of describe it. Here's the thing that before we jump into the details of this, the takeaways here are what are to be learned. I told Joe something before we started the podcast today. And he said, wait a minute. Say that again when we get on there on the on the podcast. Right. And I said that the virus is not the problem. The virus is only revealing problems that have been neglected prior to it showing.

Joe: Did you guys hear that? The virus is not the problem. The virus is only revealing the problems that have been hiding in our business. Guy, I could go on, but I want you to say it. This is good. Yeah.

Jason:So the biggest thing that you want to do before we start to start getting into the practical tactical measures of what you should be doing right now is you need to embrace that conceptually. Like the virus, man, I'm sitting up in my house right now. I'm protected. Nobody in my house got the coronavirus, at least not at least not that I'm aware of. Like for all intents and purposes, I don't really have a problem. But at the same time, just like you, I am looking and assessing my business right now, trying to protect it. And so it's not just the virus is spreading, the viruses is showing me where was I weak? Where were there holds? Where was I neglectful? All right. And then that rolls downhill into your personal situation, which is typically the results of how well you've done in your business. We're going to actually debate that point minute. You might have done really well in your business and really bad personally from a financial perspective because you made bad decisions. But the only reason that I'm here with. Don't get me wrong, I have concern. I have some worries, but I am not freaking out because I have I'm able to take good care of my family for years and years and years with no income.

Jason: Because of what I did before the virus showed up. Right. Being proactive right now, we're in a reactive state. OK. And so the biggest thing that before we dove into all of the things that can and cannot be done, what you can and cannot control is you've got to. What is the virus showing me? What problems are the virus dealing? Right. There's only one reason that I feel very secure financially right now is because I've been through this before and discovered the problems. I got a bloody mouth, a punch in the mouth. Black eyes. Yes. And so I had a decision at that point to learn the dance or ignore it and be in the same situation today. That's what you have. You have a decision to make. If you're struggling or concerned you have a, decision to make around am I going to learn from this, or am just hoping everything goes back to normal so I can keep neglecting some things that might have me in a tough situation. So that's kind of the wisdom part. Right. If you want to dive into what some of those things look like. I guess a bulleted perspective. I can show I can read these out, Joe, or I got some slides. You tell me whatever is easy.

Joe:So I did a really good slide there, that house. Would you mind sharing that? Sure. And I'll describe if you're listening to this on the audio. I'll describe what we're seeing here is we as we see it. But Jason is going to be sharing his screen here and he's got some slides that he is showing that these are slides that you've used for the last couple of years. These are these are two plus years old. We're going to tell me what you describe, what you're showing here right now in this slide.

Jason: OK. This is a picture from a hurricane that obviously hit the coast of Florida. And the reason that I use this picture is I was describing to my organization, my members of the collective genius that there is there's a reason that that house is standing with minimal damage and all the other houses around it are wiped out. They're over there, obliterated. They don't even like. I mean, by and large, they don't exist. You know, there's no it is a complete and absolute starting over from ground zero. When you look around this thing. But that house that house is standing and has it's got damage, but it's minimal. It's minimal. It's an insurance claim.

Joe: It's replacing a few windows and a few shingles.

Jason: Yeah. And some. But everything else around is destroyed. And there's a reason why that house is standing is because during good times, when there were no storms, the proper measures were taken to ensure it was built at a level that allowed it to withstand the storm. And most business owners, we don't do that because all we remember is like, hey man, I've got a house on the beach in the sunshine and the waves of crashing and things are good. Right, right now. Again, the only reason that I operate my business this way to be in the same position that the House is, is because I have been through this before and I decided to pay better start operating as if storms are to come because they do. Right. We've got this. They've got two thousand eight financial decimation of our financial system because of all the crazy loans in it.

Jason: And they're just irresponsible debt that was being given out. And we had, you know, 9/11. Nobody expected any of those three things. We don't expect these things. They just happen. They're black swan type of events. And so if you know they're going to happen on a routine basis, do you just build your house to meet minimum codes or do you build it to withstand storm? And so the reason that I have this slide is because that's the way I would try to communicate my message to my members, like, hey, we're doing great. Everybody, we've been on a good run. We've had a great ride. We're at the top of the economic cycle. And at any time something might pop up. And I want everybody in my organization to look like that house right there on the screen versus everything else around it. And so that is why I show you that picture. But again, the lesson was learned, the efforts were taken, the measures were put in place prior to the storm. Right. I want to show you one other thing here. Right now, I don't know if ifif you wrote a 10 speed or twelve speed, then the older I got, I think they had like 16 speeds. But I used to, also used to share this, right. Because when the chain if when you change gears on the bikes, that chain goes from one year to the next. And when is going from one year to the next, it makes that grinding, gritty sound when you're driving that bike creates uncertainty for you. Right. You do not switch gears a ton of times. But that crunchy gritty. Is it going to catch you? Right.

Joe: Is that chain going to catch just for people listening to the podcast and not seeing this? It's a picture of the gears on a ten speed bicycle as you get smaller and they get bigger. That's good. All right.

Jason: Yeah. So that's where we're at right now. Right. The chain is moving across the gears. And we got a lot of uncertainty because we don't know when it's going to catch or how long it's going to take to catch. Right. And so my job, you know, it all goes back to our mission statement is that a collective genius should not. We just don't. It's not just our responsibility to help people prosper, it's also to help them protect their businesses and their families. And I take that very seriously. I've been banging this drum for a couple of years. Here we are. You know, I'm not Nostradamus. I don't have it all figured out. I just happen to stay a little bit of a historian that says, hey, it's about that time.

Joe: You know, one of the things that you've talked about before in the past, too, is the gap. You've got to be able to withstand the gap. You gotta be able to withstand the trap. Can you talk about that? Are you done with the slides?

Jason: We can come back to those in a minute. All right. So the gap is it's almost that time between when you shift to get gear shifts and it actually catches on the next. All right. So as we look to do. Yes. So we talk about being able to everyone says, you know, it's it's really large and by and large, the immature, to be honest with you, that's I can't wait til the real estate market crashes again because there's going to be plenty of opportunity. How are you feeling about that right now?

Joe: I talked to a guy this morning. You had 20 deals in escrow, 15 of them. The buyers pulled out, right? Were they rehabbing wholesale deals? These were owner finance deals. The buyers who had 10 to 20 grand to put down. Yes. Yeah. I should've been clear on that.

Jason:So here's the thing. We're going to go through a period, right? We're in the Gap right now. Nobody knows what to do. Right. You've got you've got money flows through a hose. It comes in one and it goes out the other. You don't get to clamp it off on the on the end where it goes out and thinks that the other end is going to stay open. All right if it doesn't work like that. So what happens is everybody's kind of hole that way. I'm going to wait. Well if everybody's waiting. Nothing's gonna happened. All right. And what's going to happen is you're going to get sellers are either unrealistic or un accepting of what may have happened to the value of their property. And if they are unaccepting of what's happened, even though, you know, market values are different, then there's a time where they don't they won't sell. And you can't buy. And so there's kind of this stalemate that takes a while to unwind. It takes a while to unwind. Right. And during that timeframe, then a whole lot going on.

Joe: Yeah. And we're in that right now. Yeah. We're there. Not on like people we're quarantined. We're stuck in our house.

Jason: Yeah. And we used to always talk about that. We might have even started talking. I would assume you know that Joe. Because you were with me I think for five years. I guess you heard me talking about that, right. You got to be able to. You've got to be able to sustain the gaps. And that gap is in whatever frame timeframe and shift is between when things were going. Now they're not. And they crank back up then. Really? That is going to be, I'm going to share with everybody today. Simple system that I've been for lack of a better term, cramming down my members throats for the last couple of years. Long enough to where Joe's been gone a couple of years and Joe remembers me talking about, you know, it's about the gap. Right. Yes. And the way that the way that you survived to get in the business in a personal perspective is I've been sharing this formula. First of all, I got to trade a cash cow. You got to create a business that is firing on all cylinders right now. That doesn't mean you get it up. You flipping a few houses and things are good and then I'm gonna go do this. I'd love you to do that. I'm going to guess. No. It takes a ruthless, relentless pursuit of excellence to have a business that becomes a cash cow that is functioning and profiting consistently, predictably and repeatedly. C P R . Consistently, predictably, and repeatedly. All right. Your business. You get a cash cow. Once you get a cash cow, right, you've got to everybody. We have a term on other term we use in CG and you're going to be, you hear like alcohol commercials drink responsibly. We talk about scaling responsibly because if you just take all your profitability and I'm going into a new market and then I'm making money, then I'll take that money and go into a new market. Before you know it, you're in 10 markets and you've scaled using all your profitability. And although you've got a big business, you don't got any money. right now because you have so much overhead. So let me. Yeah, let me rephrase that. You might have some money, but you don't have any liquidity. And it's really important that you understand that a business needs both. Right. What does that mean? Let's say you're rehab and you've got twenty-five projects going and you've got 20 grand in each of them and the market's going up. Well, all right. You got some money. You got half a million bucks or so in those projects. Pretty safe. Market's going up. That's money. Liquidity is physical dollars. Greenbacks. Moolah, dinero in the banks. OK. So there's a difference between having money and liquidity in a sound business. Stable business that can make it in times like this needs folks. OK. A lot of people neglect that. Scale responsibly. There's a lot to be learned from those two parts. Right. That's.

Jason: Let me give you an analogy. OK. I want you to think about somebody who's doing 200 deals a year and they're just scaling, building their team and turn into a monster and someone who's doing 100 deals a year. Just gradually and methodically plodding along, systematically moving forward and along the way, instead of going as fast as they can and spinning all their profitability. They're doing half what this other guy or gal is doing, but they're taking their profits a pinch of their profits. Instead of scaling data and making money, they like to take this process off the table. Let me take this profit off the table. We take this process, too. When the music stops or really, really slows down like it is right now, the person who is just scaling to infinity and doing on the outside looking in you like I did 200 deals. He's twice the size of that guy. That guy who's doing 200 deals. Who is using all this profitability and grow into a person who on the other side, you like me? He's only half the size of that guy over there. Right. So I don't know. But he was peeling that profitable off. He's got retained earnings. He's got money to make it through the bumps. But his business, he's got money to take care of his family. Her family. Right. He will get to continue climbing and stay in the game.

Joe: Yeah. You're talking about profit first 101. That's what we're talking about today. Profits are what you're talking about is a way to guarantee that your business will always be profitable. Always know what I think it is.

Jason: I've said this. If I've said this once, I've said it 20 times over the last week on all these podcasts. Right. Profit is not something that merely shows up in the bottom right hand corner of your PNL. It is something that must be physically taken, extracted from your business four times. Likens what is left after that extraction. That is what you are allowed to pay cap ex, with expenses, inves,t put into marketing. That's what you are. That's what you're left with what you have to scale the business. The other stuff is not to be is not to be touched right. Or touched with. It's got in touch with a level of intelligence.

Joe: Those you don't know. You should go get that book profit first. You should have read it five years ago. But if you're just now, it's all right. It's not too late. Pick it up and read it anyway, because what it is, is basically saying you take your revenue. It's not revenue minus expenses equals profit. It's revenue minus profit equals expenses. Revenue. Take out your profit and I'll show your screens here in just a sec. OK. You take out a profit, you take out your taxes. And Jason, you told me six, seven years ago. You saw me. I was starting to make some money, starting to have some success. Joe, you need to start thinking about your taxes there, Joe. I know you're having a huge year. It's what you keep. Joe. Come on. I did bad, bad imitation. And sure enough, I'm not going to go into the details. We can talk about it off line. Things are good now. But like, man, it was like God was speaking through you and you did get my attention. But I didn't realize still until a year or two later, I got hit hard with some big, big tax bills. So anyway, let's talk about another time. But you will avoid you avoid those problems when you're practicing this profit first methodology. Revenue minus profit equals expenses. So let's share your screen. Sure. Come on. We're doing that, too, by the way.

Jason: I do remember. I remember seeing you having like this breakout crazy year. And I've seen, I have been I don't like to use necessarily use the word coaching, but I've been running a mastermind with some of the top shelf highest. I mean, our organization, I would estimate probably flips twenty plus thousand homes a year, owns a bazillion rentals. Like I got a talented crew of folks that are part of my organization, I've been part of it just like Joe. And you start to see patterns, right. And you hear people and I got a surprise tax. It ain't a surprise, you just weren't paying attention. Right. Oh, man. That was me, brother. Yeah. The only ones you're not dealing with. And as here.

Joe: Warren Buffett, when the tide goes out is when you learn who has been swimming naked.

Jason: Yes, that's well. And that's what we're about to see. A lot of naked folks right now. Like, buck naked.

Joe: And your here's your slides. Can you. OK. Right. Yeah, I'm in here.

Jason: Yeah. Joe, Joe is talking about a system that I can tell you changed my life. I've been practicing it for many years. And it is truly if I were to point a finger at anything that gives me again, I don't want to come off as, I'm not Warren Buffet or Bill Gates or anything like that. But I'm in a great position right now because of this system. Right. I like actually get the Medley family could hole up in here for years. We're going to be all right. And it's because of what I'm showing you on the screen. And this is, there are two words that most entrepreneurs do not embrace, understand or really like to hear. It goes back to this story Joe just told you. He made some mistakes and I mean, the reason I'm doing it now and got it right is because I've got it wrong in the past is I've made some mistakes from what is called cash management. OK. Back up. Just just one second. OK. When you when you're an investor, things can get complicated. Right. And I'm trying to speak to a general crowd. You know, something for all sellers rehab or something to do both.

Jason:So everything I'm saying here is applicable across the board to different investors. It may not necessarily everything need to look applicable to you, but things can get complicated. And if you're not paying attention, you don't know you like you got money coming in, you're raising capital, you know private money. You got funds going out and other private investors, you got tons of projects going on. At the same time, everything's got different projects with a different scope of work and different budgets. You're hiring people on your team. And you know, there's that person six grand a month and it's going to be six months before they probably reach a point where they can cover their salary. There's thirty-six grand down the drain, like when you're running a business. If you're not paying attention or if you don't have a cash management plan in place, it can get super dicey.

Jason: And one of the things that I want to share to a lot of business owners is cash management is not logging into your online banks job every now and then and looking at what pixels tell you on screen. That ain't cash management. OK. You have got to have a profit and loss statements that you actually look at every month. It gives you data, it gives you intel, it gives you input, tells you what's going right, what's gone wrong and really helps you understand in your business what is yours and what isn't. That's really more your balance sheet. But that's another story. But  my point is you got to get a PNL, you've got to have a PNL and you got to actually look at it and pay attention to it. It helps you forecast what is going on in your business.

Joe: And it put a step further because is something I just did about four or five months ago. I looked at my PNL and I'm not just whole company wide, but by different things that I was doing. So I had a PNL for this aspect of my business. This aspect of my business in this aspect. You could even take this down to the houses that you had. You should have a PNL on this house. In this house, in this house. A lot of us entrepreneurs, small business owners, we have multiple different businesses that we're doing. And I looked at this. It's a whole 80/20 thing. And I saw this one aspect of my business that I thought was making me the most money. I was actually some months losing money and many months only making five grand a month on that. But that was where I was spending 80 percent of my time. But it was only 20 percent like 5 percent of my profits. Right. And so over here's where I was making most of my profits and I was spending very little of my time here. But I was also hating this, loving this. So anyway, it wasn't until I looked at my cash management stuff here, you're on a kind of like I want to call it a vertical basis, you know, like this thing, this thing, this thing, having a different PNL for each of those that I saw. Oh, my gosh. I gotta get rid of that thing. And I did. I cut it out, and I did it took me not once, but I got rid of it. And things are looking at this now. If it if I wouldn't have gone through that six months ago, I would be a much worse position right now.

Jason: Right. That's important. You're PNL gives you optics. You have a PNL and then you have KPIs. It's we, whether or not we get into that. But my key performance indicators. But my point is, is that you, Joe, you got a lot of people in here that I think flip houses. Do you want to flip houses? Or do you want to run a business? Run a business? Well, you can't run a business without a PNL. And you're not going to be a visionary leader that can guide and direct and be the captain of the ship without knowing your numbers. And a lot of those important numbers on your PNL. And you know, and they give you insights, just like you said, Joe. It gives you insights and gives you the ability to shake and bake and change and move different directions. Right. So the bottom line is we don't have a PNL, if you don't have a balance sheet running, your business can get super hairy because you don't know what is mine and what is not. You're like, good today. I got like nine hundred Gs in the bank and then you're like, oh crap. We've got to pay in private lenders 600 grand. I've actually only got three. Like you've, as your business grows, as your business scales, as it gets more complex, you should be meeting regularly. A lot of you get to a certain point. Maybe you have a CFO or a fractional CFO, but it's not just your CPA to get you get with you. I was on the phone with mine last night at 6 o'clock. Right. We were running through my PNL. I can give you guys an exercise joke at times. Of what? If you run an awful PNL, what to do right now to kind of get a grip on your business and figure out if things get too choppy, how to force rank expenses and where to cut and stuff? Well, doesn't we definitely were doing that.

Joe: We do have time.

Jason: OK. All right. Yeah. OK. So at the end of the day, if you don't have a cash manager system in place, things can get hairy. Right. You don't know what's yours. Don't know what's yours. This is this is a way you don't know what what's mine and what's not. You don't know. This is one way to. OK. And again, I'm not going to take credit for this. This is the profit first book we had Michael, the author, as a keynote speaker inside of my organization, we bring rock stars into teach this kind of stuff. But here's what I want to share with everybody. This is not, like everybody talks about just which is taking something hyper complicated, systematize, putting order to it, simplifying. This is I don't even know if I would call this a system as much as it is a discipline. OK. This is a super simple discipline and it consists of basically having… I don't follow this system to the T. There's some variances here that I do differently. But there are really five key accounts that you should have that enable you what you're looking at on the screen. Right. I don't want to dismiss the simplicity of this, but I also want you to understand that one of the reasons that don't get me wrong, I'm adjusting on the fly with my business right now as well. But I've got to 12+ months of retained earnings. My family is in good shape. And this what I'm showing you right here, right now. This is why, you know, before we get into each of these accounts, what I want to share with you is that along the way, during this 10, 11 year bull run, we've had, this cost me operate following this system, cost me opportunity. I get deals coming across my desk. I've got the money, but I'm not going to touch them. I'm not going to touch it because that's not what I set out to do. That's not the purpose of those accounts. So cost me opportunity. However, right now, if I had jumped on some of that opportunity, I probably wouldn't have the liquidity that I have now or the stability that I have. So account number one, cash flow, you need to understand what kind of cash the business needs to run for three or four months. Right. That's your cash flow account.

Jason: All of my revenue goes into the cash flow account and I take percentages out. Everybody's gonna have, it's going to be different for everyone's business, but I take certain percentages of that revenue or I should say that profit. You can structure it either way. Write the book. I'll tell you how to structure. Either way, I take certain percentages and I put it into my C.G. investing slash retained earnings. OK. That's the account bottom left hand corner. And then I take money and I put it into my tax in short term investments. OK. Because I got Uncle Sam's always come in as your business partner. He ain't going away. Not going to happen, right. Unless you move to Puerto Rico. So you got to take a certain percentage. You can do this from profit, monthly profit. You can do this on a per deal basis. You can do this like there's a bunch different ways to skin this cat on either way, whether it's at the end of the month of your PNL or it's on a per deal base. Hey, my average wholesale fees, twelve thousand dollars. So I'm going to take two grand off every deal and I got to put it into my tax account. I'm going to take three grand and put it into my retained earnings three 3k and put it into my life. It's a super simple account. Account one is for cash flow. Account two is retained earnings to be able to help your business through times like this. Account 3, which is your tax on short term investments. It's so you don't get into a jam like have these killer years? And then April 15th shows up and you're like oh my tax bills are up and then you're looking at your account like I got all this money. And then in an instant, you know, in an instant it vaporizes because you know, because it's going to Uncle Sam. That's your third account. A fourth account. Obviously, you got to have personal checking accounts, pay your bills in your fifth account, which is in the bottom right corner is liquid cash. Hands off debt is in all caps. When you put in all caps, you are trying to make a point. And so that is an all caps. Because that liquidity is not to be touched. Liquid as if that's a liquid. That means that is money in the bank.

Jason: Now it's this system as you develop, it gets it can get more advanced. Like I no longer put profits. I don't peel profit out of the business and put it into my liquid hands, cash off account. We have you get to a point where you say, OK, listen. If the corona virus comes or two thousand eight shows up again or 9/11 happens again, like we're covered for several years, it gets to a point where adding more money to that could almost be irresponsible. So you take the money you were putting in that account and then you start investing it into cash and cash flowing assets or whatever your choices. Right. For me, it's cash selling assets, multi-family syndications, then that's all. So when you get to a point, you're investing account or you're retained earnings account, if your business is growing, that counts. That account's going to continue to grow. If you reach a point where like I'm good here, I'm not going to necessarily continue to scale my business. Then you can stop putting money in that same from liquid hands. Cash off that your family rainy day fund. OK. If you get to a point, you're like, I've got several years of expenses in the bank to take care of my family. You stop putting money into those accounts and then you start investing in cash, selling assets. Right. Because a diversified if you're diversified, you've got your business over here kicking off income. You've got retained earnings to help the business. You're making sure your tax bills paid. You've got liquid hands. You liquid rainy day fund for your family. Then you're putting money in cash flowing assets you've got like, for example. This is why liquidity so important. I have a significant amount of investments with a bunch of a bunch of my members in the thousands and thousands of units of apartment complexes. And actually. So again, I'm in syndications with a bunch of my members. Tim Bratzs of the World, the Randy Laurence's of the World been investing in partnerships last year. I fully anticipate, like everybody thinks I got rent coming in. Good. Don't worry about it. You got rent coming in, you'd better anticipate some cuts right now because a lot of people losing their jobs. And so the reason I have cash is because I can always count the rents right now. I would I would be would not be surprised if the amount of money that I have coming in from rent right now. Gets cut in half for the next several months.

Jason: All right. So you got to have it takes years too. Right, like this didn't, the scenarios I'm describing didn't take place overnight. It takes years of methodical discipline, of staying focused to, you know, have it kind of diversified.

Joe: You know, this is really good because a lot of people maybe aren't there yet. Jason, maybe they've not prepared like that or they're not ready for this right now and they're freaking out. I've had countless discussions with other people that were really crushed during the last recession. It took yeah, I was one of them who took it took him years to recover. And they all say the same thing. I wish I would have Splat faster. Like, you know, you're gonna hit the ground sooner or later. Right. Hopefully I'm making my point here. But the sooner you get that Splat over, the better. Right. The sooner you face the truth of what's happened, the better. The sooner you get your head out of the sand, the better that you look at this and assess where you are right now, the better. So what other advice would you give to somebody who maybe hasn't prepared like that right now? And as you know, first of the month is coming April 1st. I think we're gonna get a lot of stress. Come April 1st. Yeah. And tenants are gonna be like, sorry, you know, like, what do you tell people who have prepared like this?

Jason: Right. Yes. So set such a broad question depending up on everyone's personal situation. I'm going to do my best to answer that, I think from a core business perspective. If you haven't gone to the I know this is going to sound harsh right now. It's going to sound harsh. I know it's going to sound ugly. Joe will tell you, you're being a member of my organization for many years. I've got a hearts about. You can't see my arms in here. It's about this big. I'm going to say some things that I can assure you would never, ever, ever in a million years want to happen to anybody. But it is what it is. It is what it is. And so if you are running at a level where you have a PNL, you need to get out your PNL and you need to go down to your expense line and you need to cut and paste like imagine you got a single tab stretched spreadsheet with your PNL. Cut and paste the final items in the final line items in 2019 right along with the line item in the final costs for everything. Cut and paste it onto a new tab. Sought it highest to lowest. Okay force rank highest lowest. And then you got to go to each of those line items and begin to assess where you can cut or shift for optimization. All right. We'll touch on both of those. So you might look at saying, you know, I got this marketing channel I'm spending three grand a month on. And quite honestly, it ain't going that well. It's got to go. Or if you're trying to optimize I've got this marketing generally here that's on fire. I'm going to take that three grand probably. Again, depends on how much liquidity you have it or how much run rates you got. So but you need to go through and shred your PNL. You need to look at right now who on your team is not an all hands on deck mentality type of individual. And if they're not, they got to go right. Somebody asked me to be on a webinar Saturday night. I called Jessica on my team. I was like, listen, I need a slide deck put together.

Jason: And she said, let's grind. Let's grind. If you have people who don't have anything right now on your team, they've got to go. That's just that's the bottom line. You may even have people on your team that do have that attitude that you might have to make some really hard decisions about. Because if you hang onto people too long and you end up with no business, if you don't have a business, nobody on your team has a job. Now, there are other options there. You can tell everybody. Listen. I love all of you that has built this thing together. No idea this is going to happen. I'm going to take a hit as an owner. Do. Are we gonna team up together and do this the same? Are you gonna do it right? We will pull through this. But maybe everybody's got to operate on a 70, 70 percent of the salary that you're working on right now. Right. You got to think through different ways to either certain people got to go. You've got to have percentages of potential salaries, cut or furlough. Like there's you've got to think through. You've got to you got to get real. This is real shit. Excuse my French. I don't envision we're gonna wake up. To each and this is going to be like, OK. So you've got to adapt as quickly as possible. And, you know, that's. On last Friday, I had a call with our members and I have a Zoom account that holds 100 people. We don't ever max it out. Not even close. Right. When we do these kind of calls, monthly trainings yada, yada. People were like, I can't get on. Everybody wants to know what are what are what are you doing right now? Right. And that's what we were doing. One of my leaders, Frank Caval, pulled up his is profit loss statement and he showed how he went through and dissect it. It's cut it up, split it up. He showed how he forced ranked employees and had to make hard decisions based upon the value that they're bringing to the organization.

Jason: And attitudes like this is don't bleed it dry if you know that you've got people with a bad attitude or wrong attitude or just aren't essential employees. OK. I would look at looking at your business from the perspective of like, if next month's I would put it in buckets right. If next month, I don't make X amount of dollars in revenue. This has to happen. That has to get cut. This person might have to go. If in May, I don't make this much revenue.. This service has got to go. This person might have to go. This guy is going to have to think it through. That's what I was doing last night at 6:00. I'm in great shape financially. I'm still doing that. I'm still doing that. OK.

Joe: What do you think? Sometimes I'm thinking, dang it. Do like. Do I have to do that? You know, Should I wait a little bit to see if this really gets any worse or do I need to make those cuts right now?

Jason: Again, it goes back to everyone's individual. Like Joe, if I know you, you've got a bunch of the VAs that are inexpensive doing stuff for you. Everybody's situation is different. Here's what I would tell you. Maybe you don't have to take the action right now, but I would encourage you to do the activity. OK. That makes sense. Yeah. Let's go. Go through the exercise. You don't want to go. Right now, you're still calm figuring this out. It's unfolding. We don't know that it's time to have to do all that stuff. I agree with you completely. But if you get to that point, you will probably be mentally strained, stressed. And then a lot of times we get to that point, we just stick our head in the sand, right. So do the exercise, do the activity. Only you will know in your personal situation if you actually need to go through with the action. OK. But I would be. You know, you don't want to look for the fire extinguisher or realize you don't have one. Yeah. When the fire is out of control. So just make sure you got… I'm not going to use a fire extinguisher, but I sure like to know. I see. I see it right over there on the wall. All right. That's the best analogy that I have that I can get to everybody. If you don't run off PNL, get your bank statements out. Open up the credit card app on your phone. Capital One, Visa, whatever it is. Start flicking, start chopping. And again, it's all relative to your, if you have less than 90 days worth of cash in the bank to sustain your business. You need to do all of that. You need to go through the exercise, the activity and you need to take action if you have less than 90 days. And most businesses do, unfortunately. So that's what you need to be doing right now. You need to stabilize. You need to watch the show the other night. And remember what show was Nat King or something? This world-class mountain bike, it fell off his bike and handlebars went through his leg. They weren't worried about taking him to the plastic surgeon and get it sewed up properly to stop the bleeding. Stop the bleeding.

Jason: OK. The other thing that I encourage everyone to do right now is to get with your team, not just your current team, but all of the power players in your network. You need to figure out where are your buyers at, your landlord, your rehabbers, where are they at? It's called 10 of them. And eight of them are like, I got my hands in my pockets. The two of them are like, I've been waiting for this. I got 20 million on the sidelines. Let's rock and roll. At least you know who's doing what and what they want. And you can go and move forward based upon that. Right. You can't, like no point in buying 10 houses if you've got two buyers and only one. Hey, I'm good. I'm still good buying two houses a month. Like get out and communicate. OK, let's start a start. A local Zoom mastermind. If you stuck up in the house and get all of your core people in your organization together once a week. What's going on? What's happening? What are you doing? How are you bringing in money? What? What can I do for you? What can you do for me? Let's use that concept. That's the foundation of the collective genius in your marketplace.

Joe: You know, that's been huge. It's easier than you think to start a local mastermind with your competitors. I've done that several times. It's been really, really good. All right. Jason, we've got to end this. You've been really gracious with your time. I wanted to say one thing here. Some of a lot of you guys listen to this. And I'm not just saying this because I got Jason Medley here say this because this is really, really important. A lot of you guys are in masterminds. You're in group coaching programs. This I would encourage you guys. This is the worst time. To stop your mastermind memberships or your coaching memberships, right? This is the worst time to.. This should be one of the last expenses that you cut. Because being part of a mastermind is what's going to get you through this crisis. I'm telling you, I've seen it over and over again. I've been part of a mastermind, at least one or two masterminds for the last 10 years and being connected with other investors that are seeing things that you aren't seeing that are looking after you. Watching your back. They're seeing what's coming behind you that you don't see. You need to have those connections. And one of the biggest mistakes you're gonna make is is dropping out of masterminds and coaching programs that you're…. Hopefully you're in a good mastermind. Right. But like I'm saying, this is the worst time to disconnect and unplug from masterminds like Collective Genius or the others, others that are out there. So I want to encourage you guys to think. In fact, I'm looking at a couple right now to plug back in. Invest in. Because I know these are the guys that they're going to do well. They're gonna succeed and they're gonna find the opportunities.

Jason: And I want encourage everybody to question your leadership. Don't just make, whether it's mine or it's another mastermind. Don't just make a rash decision. Look at, find out who the leaders of those organizations are. Did they prepare their organization for this? Did they prepare their organization for this? And what are they doing right now that's different. We've called, we have a call every Friday with our entire membership right now. All hands on deck. Right. We've broken down an agenda where we're tackling what's going to market, what's going on in dispositions, what's going on from a lender perspective. How are you doing this? Everybody sharing their documents. Right. Like landlords right now. We just had this happen today on its CG. And this is the power of a mastermind, whether it's mine or somebody else's. Don't get in line. But like, we have the highest level people who are if you're in property management, for example, you got to write a letter to your tenants. Here's our stance, right? You got to have if people are going to delay, you've got to get accounting principles in place to track delayed revenue from certain tenants. If they're going to delay, they've got to fill out certain like all those forms are being created on the fly because this has never happened before. And you get a member that just drops them in our Facebook group and says, hey, guys, I just did all this. It's yours, right? Billy, Arvarro. I think you know Billy, Joe. He just sent me a text earlier today. He's like those docs that Mark Delatour put together, say me 10 hours of my life. Right. So you don't have to focus on that stuff. So you focus on how to make money.  Very good. I keep coming to the door. So, anyway, it was an honor.

Joe: How can people get a hold of you and look up the collective genius. How can they get more information about that?

Jason: Yeah, go to just go to LearnMoreAboutCG.com. Go to LearnMoreAboutCG. Just the initials CG and go to learn more. You'll like me. I like those all caps on each front of each word. Learn more aboutCGdot com. Check us out. We're super laid back. We're not here to pressure anybody if we're a good fit, cool. If we're not. It's OK to get on the phone. We'll talk about your business and if we can help. Great. If not, no sweat.

Joe: LearnmoreaboutCG.com. Thank you, Jason, very much. Thank you, sir. Appreciate it. And we will see you all later. Go give your wife and kids or your spouse a hug and your kids could give him a hug. Tell them you love them. Exactly. All right. Appreciate that. Well, bye.