Are You a Hustler, Operator, or Architect?

Cole Ruud-Johnson (00:00): Question for you. Where are you right now? Not physically, but where are you in the real estate game and do you feel stuck there? I want you to understand exactly where you fit in. So today I'm breaking down the three levels to this game. So as we start this journey together, ask yourself these three questions. Which stage are you in? What's keeping you there? And most importantly, how do you level up? Let's go. (00:25): People don't fail at real estate because they suck. They fail because there's too many ways to succeed. That's why I suggest you focus on the most important skill in all of real estate, which is finding deals. I'm Cole Johnson and in this podcast I share the exact steps I've used sourced 400 deals by age 24. This will allow you to do three things, control your deal flow, make unlimited income, and build your empire as an off-market operator. (00:53): All right guys, let's get into the three phases, the three tiers of being a real estate investor and a business owner. I call that the HOA. The first thing I want to talk about is the hustler stage. This is the stage that we all are born into when become entrepreneurs. We're listening to podcasts. We're in Facebook groups, we're going to meetups, we're texting our friends, telling 'em about this new cool business, this new cool real estate thing. We're starting, we're gonna flip. We're gonna wholesale, we're gonna build a portfolio, we're gonna do bur whatever the hot trending keyword is out there. We get excited about it. We do our research and we start hustling to get our foot in the door to get that first revenue in the door for our new business. If you guys are doing buying holds, this could mean that you're going and you're talking to lenders. (01:34): If you guys are doing wholesaling, this could mean you're going and, and you're cold calling sellers, flipping, you're talking to private money lenders and you're talking to wholesalers, whatever that is, you guys, this is the hustler stage. This is where there's no organization, there's no method to the madness. There's pure chaos, which is fine, but it's you trying to get that check in the door. Most people will live in this hustler stage for six to 18 months, depending on the community and the environment they're in and what kind of feedback they get from peers and people. They start networking and connecting with. An example of the hustler stage guys is when I first got into this, I was 18, 19 and I heard about this thing called wholesome real estate. I remember being on my buddy's boat that summer telling them about all this money I was gonna make in wholesome real estate. (02:15): I was excited. It was a new shiny thing. And then from there you go into what I call the value of despair, you guys. So you go into a period where you're reali realizing how hard it is, you're doing the research, you're making the phone calls, but nothing is happening. That'll happen for maybe 30 days for you, 68, 8 90 days. And then you get that first check and you have no idea how you got got that first check. So for me, eventually 90 days after cold calling, we got our first wholesale check. But it's still to this day, if you ask me the process that we had to get that check, I had no, I, I had no plan, no process, nothing. I was just showing up and making phone calls. There's no x amount of phone calls equals X amount of dollars. It was me sitting there calling every single day. (02:53): And that is the hustler stage. You guys, most people will stay there for years. But you guys listening to this show right now, if you're at the stage and you are feeling stuck, stay tuned. Cause I'm about to move in to what I call the operator stage, which is where I'm gonna share my story again about the operator stage. So after you guys get a few deals in the door, even hustling for six months, 18 months, eventually it comes to a point where two things happen. One, you burn out, or two, you don't wanna be in the business any longer and you realize you just have another high paying job. So many people that I know that get into wholesome and they get into fix flip real estate in six to 18 months in, are they making good money? Yes, but they've doubled their daily working hours. (03:28): They do not have a business. They have a, something that's draining their life force day after day and they have no idea what to do next. So either a, eventually they lose momentum and the business comes to a halt or be they just decide to stop or quit or they don't make enough money. You guys might as well stay in your job if you're gonna be stuck in the hustler stage for years and year after year after year after year. So the operator stage, you guys, this is the stage where you start to have a little bit of method to the madness. You're still very involved in the business, but you start to develop a system and a process or, you know, may maybe some automation, maybe some tools you might make your first hire. It's probably not gonna be a good hire cuz you don't know how to hire, train, and manage yet. (04:07): But you're gonna make your first hire, you're gonna start falling on your face a lot. But you're gonna start, you know, crafting a thesis around your company and understanding what it means to start running a business instead of a hustle. So for this, for me, what that was, I went to an event in Arizona about four or five deals in where they told me, you, you don't know what you're doing on systems. You don't know what you're doing on marketing. You have no process. You don't know what your day looks like. And you start to get asked these questions. And usually people will move in the operator stage super quickly if they start networking. You know real estate meetups, if they start listening to podcasts, if they're, they're on Instagram following people, sharing their experience in business and they'll go, Hmm, maybe me putting out bandit science or maybe me making cold callers or maybe me sending out text messages every single day all day isn't the highest and best use long term of this thing for me to really create a company I enjoy and that thrives rather than just a hustle where I work two where I work two times the hours I worked for my other job. (04:59): So for me, when I went to this event in Arizona, my eyes were opened to what the, not only the possibilities were, but how I was, you know, bottlenecking my company at every single part of this business. So this is the time where most likely you're paying for coaching, you're paying for consulting, you're buying a crm. You know, if you're, if you're in fix and flip, you're buying a program for you know, how to under how to make sure you're rehabs where it needs to be. You're going to events, you're going to meetups and you become like I would say like a baby business owner. So you've gone from a hustler to a baby business owner over operator, where you have a business, you have an employee or two, you have systems, you have automation, and you have more predictable revenue. And most people stay here forever. (05:35): You guys, 90% of real estate investors that I know, especially in real estate, other businesses that percentage a little lower. But in real estate, 90% of the real estate investors that I talk to and connect with across social media, in person, whatever that is, are stuck at the operator stage forever where it's one bad hire after the nest next. Cause they don't invest in learning how to hire, train, and manage. It's one marketing stream after the next. Cause they don't sit down and really learn and master one marketing channel. It's one shiny object to the next. If Burr doesn't work, then they're gonna go to the wholesaling and they're gonna keep running around in that operator stage and not really sitting down and building one vertical to the point where they, where they can become what they talk about in phase three of this, which is the architect. (06:18): But before I get there, I'm gonna give you guys one more analogy of kind of the, the, the growth from hustler to operator. So an example of this would be I have a buddy of mine who got into the business as a hustler. Okay? So he was hustling for deals day after day after day. What what ended up happening is making one tweak by buying a CRM and putting drip sequences and follow up automation. He doubled his deal flow essentially in those first two months. So that's what it means when go to hustler operator, you start putting in systems and processes so you can predict revenue and it starts helping you solve bottlenecks in your company. But you're still, still very much in the company on the day-to-day doing a lot of what we call delegation tests task. I just read it, finish up a book called Buy Back Your Time. (07:00): And there's four quadrants. There's delegation, there's replacement, there's production, and there's investment. If you're in the operator stage, you guys, you're most likely operating out of still, still mostly delegation replacement. What that could look like is you're still doing admin tasks, you're still pulling the data, you're still doing the cold calls to a certain extent. That is the hustler stage, the operator stage. You've delegated most of those lower level delegation tasks, right? Like admin work, like list work maybe even accounting at that point, but you're still in the replacement where you're still doing a lot of things that might make the company money but aren't the highest and best use of your time. So you're spending your, your wheels in a circle a little bit. You don't know what the next step to take. So that make, that takes us to the production quadrant. (07:39): The production is things that light you up that you love to do. You guys, if you're a, if you're a natural born sales killer and you're doing marketing and you're doing cold calling, you're not spending what you, your, your time on what the highest and best use for you and your business is. So moving into the production quadrant would look like you're starting to hire things in the replacement contract in the replacement quadrant. That could be a marketing manager. That could be, you know, someone that's raising private money for you. That could be someone that's doing, you know, that's running your projects, the actual construction. If you're doing flips and you're spending the time on what you, what is the highest leverage activity for you that you actually enjoy, which is sales. And you wanna spend as much time in that production quadrant as you can. (08:19): And that's what eventually moves you from operator to architect. You guys. So architect, an architect is the beautiful, you know, it's, it's the owner's box, right? This is where you want to sit in your business, where you understand the ends and outs of the businesses. You can predict revenue, you understand every nuance. Everything's tracked. You have direct reports that were responsible for each department of your company and it becomes a real thing. You're spending all of your time in the production quadrant or you've hired yourself out of the business if that's what you've wanted to do. So for me, what the architect looks like is you have a team lead in each department of the company. So if, for example, my wholesale company, we have a head of dispositions, we have a head of sales, we have a head of marketing, we have a head of operations. (08:56): Our head of operations is doing transaction coordination helping us on our flips. If we flip a property, doing everything on that end. Payroll management, SOPs, playbook, they're, they're managing our operations. Our head of sales is hiring, training and managing a sales team. Our head of dispositions is hiring, training and managing a disposition team as well as vetting and working our buyer pipeline. And the head of marketing is making sure marketing's going out, marketing's tracked and that we're forecasting the right amount of leads to forecast the right, the right amount of revenue we want to hit. So the architect, you guys, this is where business gets truly fun and it is hard to get here, but at 10% of people that get to the architect stage, that's when you start building an empire. And this is why I talk about a lot that I think most people don't have multiple streams of income. (09:39): They have multiple streams of poverty. Because if you start adding on other streams of income before you get to the architect stage, you're gonna implode your business. An example for me, I did this when I was in my operator stage. The, the newest and shiniest thing is always awesome because in our brain's, newer is better than just better is better, right? Alex Ramzi talks about that. And, and newer is not better than, better is better. So for me, an example is when I was in my operator stage, I was still in the business, we were making great money, but I was looking at all these shiny objects going, oh that thing's gonna be easier, that thing's gonna be easier. I'll be able to scale that easier. But you're gonna run into the same problem in every single golden object extra bridge that you add to your, I guess, book of businesses that you're trying to start when you're going through this golden object syndrome phase. (10:21): Every entrepreneur I know goes through this phase when they're in the operator stage cuz stuff gets hard, they're kind of in that value at despair. They're having trouble, trouble hiring, trouble managing, trouble scaling, and they start looking over, peeking over the fence, peeking through the belongings and looking at that next best opportunity. But what ends up happening is that they lose the one thing that's already making the money. So instead of, you know, going X, y, z, if you're focusing on wholesaling wholesale, if you're focusing on flipping, flipping, if you want to big build the biggest self storage portfolio in the world, focus on that thing. Whatever's already bringing you revenue in the operator stage. And you gotta get to that architect stage and fully build that bridge before you start adding on other revenue streams. So the architect stage, you guys, you're sitting in the owner po owner's box, maybe you still are in the company if you love doing one thing and you don't wanna give it up. (11:04): And that's what gives you joy every day, waking up and doing that thing. But you have the ability, like an example is where you can get on a plane tomorrow and you can be gone two to four weeks and your company's not only gonna be okay with you gone, but it's gonna grow with you gone. And this is the place you guys want to get as real estate investors. Cause then you can start branching off into other either businesses or you know, facets of real estate investing. If you get to the architect stage of a wholeselling company like we're at, you can start building a portfolio. If you get to the architect stage of your self storage company or multi multi-family company, you can get into the next thing. So you guys, my goal of this podcast, if you're listening to this, is to get you guys through these three phases in your real estate company, whatever you're focusing on, I have the experience. I've sourced assets in most asset classes, and you guys can get here no matter what you focus on. You have to focus on each stage and work yourself up the ladder. (11:54): Thanks for spending the last 15 minutes with me as I went over my concept of the HOAs and how that applies to real estate investors and business owners. You guys could do me one favor. Tap the follow button on Apple Podcast for Spotify so you don't miss the next episode, which drops in just a few days. An Apple podcast is just a little plus sign on the upper right corner on Spotify. Just tap follow. And if you prefer to watch, we publish all of these on YouTube, just search my name and subscribe to my channel. Until next time you guys, you're one deal away.