How to Avoid Marketing Yourself Out of Business in Real Estate with David Richter

Ever feel like you’re making money in real estate but still feel broke? In this episode, I sit down with my longtime friend David Richter from Simple CFO Solutions to tackle one of the most overlooked yet crucial aspects of running a real estate business: financial management. David shares insights from his book, Profit First for Real Estate Investors, and breaks down how to implement systems that help you stay profitable while scaling your business. From budgeting for marketing to hiring the right team, we cover strategies to avoid common pitfalls like over-marketing or spending yourself out of business. If you want to understand where your money’s going and how to keep more of it, this episode is packed with actionable advice you don’t want to miss!

Timeline Summary:

[0:00] - Introduction

[1:22] - How David and I got started in real estate and our background with wholesaling.

[3:00] - The inspiration behind Profit First for Real Estate Investors and why financial clarity matters.

[5:38] - Common mistakes in budgeting for marketing and tips to allocate effectively without overextending.

[10:52] - How to tweak marketing budgets when scaling and the importance of ROI benchmarks.

[15:10] - Advertising vs. organic marketing: How long to test new strategies before cutting them off.

[19:20] - The role of Profit First in helping real estate investors create sustainable financial systems.

[22:10] - Allocating resources for staffing and avoiding the trap of unsustainable payroll expenses.

[28:15] - Fundamentals of tracking financials and improving conversion rates in your sales process.

Key Takeaways:

1. Track Every Dollar: Many real estate investors struggle because they don’t know where their money is going. Using systems like Profit First can give you clarity and control over your finances.

2. Budget for Marketing Wisely: Allocate no more than 30-40% of your revenue to marketing, and ensure you’re seeing at least a 3–5x return on your investment before scaling.

3. Don’t Overspend on Payroll: Keep payroll expenses under 35% of your total revenue to avoid overextending your business, even when hiring staff like lead managers or sales assistants.

4. Test Marketing Channels for 90 Days: When trying new advertising strategies, give them at least 90 days to evaluate effectiveness, but be prepared to pivot if the results aren’t there.

5. Focus on Conversion Rates: It’s not always about generating more leads—it’s about converting the leads you already have. Regularly track and improve your conversion metrics to maximize ROI.

Links & Resources:

• David Richter’s Book: https://simplecfosolutions.com/bulk/

• Simple CFO Solutions Website: https://simplecfosolutions.com/

Closing Remarks:

Thanks for tuning in! If you found value in this episode, don’t forget to subscribe, rate, and leave a review. Share it with friends in the real estate space who could use a little extra help mastering their financials. Connect with David Richter using the links above, and take control of your business’s profitability today. See you next time!