WS684: Goal Setting for Success with Richard O’Neill

[INTRODUCTION]

[00:00:00] ANNOUNCER: Welcome to The Real Estate Syndication Show. Whether you are a seasoned investor or building a new real estate business, this is the show for you. Whitney Sewell talks to top experts in the business. Our goal is to help you master real estate syndication.

And now your host, Whitney Sewell.

[INTERVIEW]

[00:00:23] WS: This is your daily Real Estate Syndication Show. I’m your host, Whitney Sewell. Today, our guest is Richard O’Neill. Thanks for being on the show, Richard.

[00:00:32] RO: Happy to be here. Thanks, Whitney.

[00:00:33] WS: Richard is a real estate investor from Southeastern Pennsylvania, has built a 40-unit 3 million-dollar residential portfolio in under four years with only $25,000. He is now running a construction management business for investor clients, while continuing to build his portfolio and expand into larger projects. Richard, thank you again for being on the show and for your time and just sharing your expertise with us today.

Give us a little more about who you are, your business, what you’re doing in real estate right now and let’s jump into your superpower that’s going to help us?

[00:01:04] RO: Yeah, absolutely. I started buying single-family houses back in 2016. At the time, I had a good paying job. I was okay there. It was making me decent money, but didn’t love it. I decided to quit and start buying houses, burn the boats, so to speak. I bought my first property in Collingdale, Pennsylvania just outside of Philadelphia out of a bankruptcy sale. We put about $25,000 into it and rented it out. We did that all with cash. Then we refinanced it and have been doing it again ever since.

[00:01:40] WS: Nice. It’s interesting, you said you had a good job, 2016, but you learned about real estate. I mean, you took the plunge. You talked about burning the boats. What gave you the confidence to take that leap? I think a lot of people, a lot of listeners are all dreamed of that day, when we got to do that. I know a lot of people listening are as well.

What was it for you that gave you the confidence to say, “You know what? I’m doing this.” Was it something at work that just said, “I’ve had enough”? Or was it, “You know what? I’ve seen this model enough. I think I can do it.” Explain that a little bit.

[00:02:12] RO: Really, I have to give the credit to my wife.

[00:02:14] WS: Which we all should.

[00:02:15] RO: That’s right. We’re actually on our honeymoon talking about, “I got to go back to work,” and all these things, blah, blah, blah. I’ve been talking about getting into real estate and learning about it for years before doing this. She said, “Just do it. What are you waiting for?” I said, “You know what? You’re right. Let’s just do this thing. What better time than now?”

I went in, the day I got back from my honeymoon, I put my two weeks in and the rest is history. She really pushed me to do it. I’m also surrounded by a lot of entrepreneurship. My father-in-law is an entrepreneur. He’s on his third startup now. My dad ran a home building company when I was growing up. Then obviously, outside of their networks, they hang around with a lot of entrepreneurs as well. Seeing that it can happen, that it can work was really beneficial for me.

[00:03:01] WS: That’s interesting that you bring that up. I was not surrounded with entrepreneurs growing up. When I was thinking about okay, what’s my career going to be, or how am I going to make a living? Becoming an entrepreneur wasn’t even really a thought. I didn’t even realize that was a thing at that time. That’s so interesting. Why don’t you elaborate just a little bit on how that helped you, or gave you the confidence? What was it that you’ve seen that they could do? Was you’ve seen their lifestyle? Are you seeing the freedom that they had? What was it that said, “Okay. I’ve seen it and I want that”?

[00:03:32] RO: Yeah. I mean, it’s a huge blessing having that growing up. It was a huge advantage for me. You’re exactly right, I got to see – I’ve known my wife since I was three, so I’ve known my father-in-law since around the same time. His family would live in Florida for a couple months at a time and he could go back and forth and he could take a week off here, a week off there. He works really hard when he works, but he also had the flexibility to do what he wanted and spend a lot of time with his family.

Same thing with my dad. I mean, we grew up boating down on the Chesapeake Bay. Just the fact that every once in a while he could take off a random Friday and we could go for an extra day on the boat, that was just – it set for me that I never wanted to work for someone else for an extended period of time, because I value that so much. Now that I’ve got two little kids, I love being able to just take a couple of days off here, take a couple of days off there and go spend some quality time.

[00:04:33] WS: You don’t have to ask anybody else, right? Or look to see how many hours you have to take off.

[00:04:38] RO: I got to check with my boss, my wife.

[00:04:39] WS: That’s right. It’s nice you have those priorities in order. Tell us a little about – I know you’re big on goal setting. I think you could probably teach us all a lot in this and help us to maybe educate us a little bit. How did you learn these processes, and tell us a little bit about what you did, as far as goal setting to help you reach that goal, and where you’re at now?

[00:05:00] RO: Yeah. I had to really start with where I wanted to be, what I wanted to end up looking like, and set the vision. My company name, Fleming Properties, is derived from that. I said I grew up on boats. My wife did as well. Fleming is a type of a boat that we set the goal that this company is going to buy my wife a Fleming by the time she’s 39.

[00:05:23] WS: Why 39? Yeah, I just wanted to ask.

[00:05:25] RO: Well, I’ll be 40. Makes it pretty easy. I promised her 20 years when she was 19. 39 is the date. It started for me by setting that vision, and the fact that Fleming is now in front of me every single day, 50 times a day I have to sign checks and I have to really think about, is this the right place to be spending this money, or could it be going to pay for that Fleming someday? It’s just a constant reminder. Whenever you can do that, I think it’s really powerful.

One of the other entities I own, I have investors in, yeah, they’re a family member. All they want to do when they retire is go catch blue marlin. Guess what the name of the company is? Blue Marlin Properties. Just having that constant reminder there is really important.

Then I had to work backwards from there. I know what that boat costs. I know what it costs to run every year and I know roughly how much passive cash flow I need to make that happen. Then you break it down into okay, what do I need numbers-wise at that date? Then step back a little bit further, how many do I need to acquire over a certain amount of time? You just basically reverse engineer it into what do I need to do today? All the way down to, I need to be making five offers this week if I want to hit my goal for this month, which is going to tie in my goal this year, these five years, and so forth. That’s been really important for me.

Obviously, that’s a lot of tracking. I’ve set up some things where we talk about leading indicators, like I was saying with how many offers I need to make on properties to hit my goal this year. How many properties I need to go see before I make those offers, and so forth. I track all that in Google Sheets and do my best to keep on top of it.

[00:07:12] WS: Is that something that you track yourself, or do you have a team of assistants that’s helping you track certain things? What does that look like?

[00:07:19] RO: I mostly track it myself. I have a bookkeeper and administrative assistant. She does a little bit of both for the company. She does all the obviously, financial tracking and some of the other things, but most of it is me going in and looking back at the end of the week. I have a time period set on Fridays, where I say, “Okay. How did I do this week?” I go plug it into my dashboards.

[00:07:42] WS: Can you give us an example of maybe some previous goals that you set for yourself and maybe you have one that you missed, or maybe some that you hit or exceeded?

[00:07:52] RO: Yeah. Started out really, really loose when I was in middle school, I guess it was. I wanted to go play division one lacrosse. That was my goal. Not quite as easy of a metric tracking, and not that I probably had the ability to think that far ahead in middle school, but that was the goal. Most of what I did at that point was revolving around that goal. Should I go play for this travel team? Should I go to this tournament? Should I do whatever it is, they were all focused around that goal.

Eventually, I ended up hitting that goal. I only played a year, but I ended up having bigger, better goals. I decided, I’d done what I needed to after my first year. I mean, my goal right now, I started this company with the goal of doing 50 properties in five years. That’ll be in what? August of next year will be my fifth year and I’m at 40 so far. Was on a really good track to hit that. I had, I think 35 at the end of last year. In my market specifically, the lower-end single-family outside of Philadelphia, there’s a lot of money coming in from New York, California all these other places and just driving up prices. It’s been really tough for me to buy deals this year.

Will I hit that goal next year? I don’t know. Maybe not. I’ve come to grips with that, but that’s okay. Is shifting it a little bit to maybe get into some bigger projects, some new constructions. We’re now starting to offer construction management as a service to other investors. I’m hiring my brother who’s a project manager for a bigger company. He’s coming to work for me to help me start that business. We’re shifting that up a little bit.

A five-year goal is a pretty long-term goal. If you hit it, that’s phenomenal. If it’s not, things change within those five years, COVID especially. We bring up COVID, what better time to shift into something else that maybe is going to help you get to the goals in maybe a different way than you thought before? Let’s put it that way.

[00:09:56] WS: Yeah. You talked about having those 50 properties in five years. Even if you got to 42, I mean, I think it’s still a success, right? If you didn’t have that goal at all, you probably wouldn’t have got to 20. Reverse engineered that and thought that through, so no, congratulations to you already. I mean, I felt like you’re doing it. Even now, talk to us a little bit about now you’re having to change maybe that up a little bit. You’re saying, “Okay, because of what’s happened, we’ve got to change our plan a little bit. We can monetize this over here. We already have these skills. Why not?”

You’re having to leave that goal a little bit potentially, or maybe you won’t. Maybe you’ll still hit it, or exceed it. Either way, you’ve had to change your business plan a little bit. Talk us through that a little bit.

[00:10:40] RO: Yeah. That specific pivot there, I’ve wanted to hire a construction manager for a long time. At my peak, I was doing probably five or six properties at a time that I had purchased, that we were renovating. That was in 2018. That got to be just crazy. I was jumping from acquisitions, to construction management, to business management. I was just jumping all over the place and the construction management was taking a lot of time.

I wanted to hire someone to take that off my plate for a long time. Now they’re one of the organizations I’ve joined. I talked a lot about that concept with some other entrepreneurs. That idea came up to offer that as a service to other people, so that I could hire that person and be able to cover the overhead from him, or her, it doesn’t matter who. Then, I’ve got that skill set in place, so that now once, let’s say they’re predicting a foreclosure boom sometime next year, if that happens and prices come back down and it’s easier to find deals, I’ve got the team in place to go and strike.

[00:11:47] WS: Nice.

[00:11:48] RO: Yeah. That was a lot of the thought behind doing that. I struggled for a long time with it, because I knew that it really is starting a new business. It’s not just hiring a person for my existing business, especially if you’re going to hire it out to other people. Bringing on customers is a whole different game.

I had to really think long and hard about whether or not that was what I wanted to do. Ended up deciding to do it, because I was having a hard time finding deals. The timing seemed right, and I now have the time to dedicate to building that side of the business and then being ready for whatever comes next.

[00:12:24] WS: Have you read the book, Who Moved My Cheese?

[00:12:26] RO: I haven’t. I’ve heard that recommendation a bunch of times. I really need to.

[00:12:30] WS: It’s a really simple book, but just some amazing stories in there. I brought it up, and I know the listeners have heard this, and I just recommend people read that book. It should be an annual read, probably. It only takes 40 minutes, 45 minutes. You’re an example of that.

You’re not just staying in that one thing. You see an opportunity, you’re able to move and shift and change and take advantage of something else, somewhere else and you’re a good example of that. What do you see for your real estate business in the future? What are some other goals you’re setting for yourself?

[00:12:58] RO: Well, so as I started getting on a pretty good trajectory to that 50 goal, I said that I want to move it up to a 175 units within the next five years from last year. I think what that’ll ultimately end up being is I’ve learned a lot about the new construction to rent space. One of my mentors went from doing basically what I do. He’s now building developments, specifically of duplexes, triplexes, quads. It’s a really interesting model, because I’m dealing with 1920s to 1940s houses and doing a lot of work to them at the beginning, but you can never get everything in those old buildings. There’s always maintenance. There’s always something that needs to be done.

After talking to him about the new construction model, it’s a really interesting concept to go from a 50-year-old boiler that you know is going to go at some point to brand new everything. It’s all built, designed for tenants. You’re putting in the durable flooring, the granite countertops, all these things that it’s going to be difficult for tenants to break. That’s something that’s really piqued my interest lately. I’m definitely exploring that more.

The hiring of a construction manager really is going to be a key step in either going into that business, maybe building smaller apartment buildings, maybe 30-unit buildings, something like that, or going full bore into exactly what I’m doing now, once the opportunities present themselves. I see a lot of the same, but possibly a shift into some of the new construction and more of the construction management side of it.

[00:14:39] WS: Now that you’ve almost reached this five-year goal, and I would say you’ve reached it, whether you technically hit that 50 or not. What about the next five years? Will you say, “We’re going to do a 100,” or will you stay at 50, or will you – how will you charge? Will you say 40? How will you change that and now that you know what you know and moving forward?

[00:15:01] RO: Yes. I think I said a minute ago, maybe I didn’t. I moved it up to 175.

[00:15:05] WS: Oh, okay. Maybe I missed that. Sorry.

[00:15:07] RO: Yeah, a 175 units. A 175 units total. That’ll be an additional 125 over the next five years. Knowing what I know now, I know it can be done and I know roughly how to get there. It’s just going to take a lot of work.

[00:15:23] WS: No doubt about it. Some good systems and any – and just improving systems you probably already have. Yeah, Richard, what’s been the hardest part of this real estate journey for you and growing to where you’re at now?

[00:15:34] RO: I think it’s, I really like new and exciting things. Staying on that, staying focused on okay, I need to get to 50. I need to do these many deals. I need to do these many offers. Just staying focused on that has definitely been the hardest thing, especially when things start getting difficult. Like right now, deals are hard to come by. I find myself laying in bed at night and daydreaming about going to start a, who knows, random company.

Just trying to limit those thoughts, even though they’re fun to think about and all that, but trying to limit those and focus on what’s going on and keep trudging forward, even though stuff sucks sometimes. That’s definitely the hardest.

[00:16:14] WS: What’s a way you’ve recently improved your business that we could also apply to ours?

[00:16:19] RO: I think I mentioned, I’ve joined a couple of different groups. I think the most impactful being Entrepreneur’s Organization. They have an accelerator program, which is designed to get you from somewhere under a million dollars in revenue up to over a million. That’s been really, really great. I get in a room, now a virtual room with five other entrepreneurs once every month. Then 25 others once a quarter. They’re all in different businesses and have different perspectives and can bring in some ideas that I’m probably not thinking about. We meet for four hours once a month, then all day once a quarter.

That’s been really impactful to get outside perspectives from someone that they’re tied to your well-being for the sake of a little bit of friendship, but they’re really there to shine a mirror on what’s going on and say, here’s what I think is happening in your business. You probably don’t even see it. That’s been huge.

Then the other thing has been hiring help. I did it all by myself for a long time and it was really hard to start hiring that first person. Once I did, it was like, “Oh, my God. This is amazing. Who else can I hire?”

[00:17:35] WS: What did that person do for you?

[00:17:37] RO: They were my bookkeeper. My bookkeeper was the first one. I was doing my own books. That was like, I’m not an accountant. I’m not very well-trained in that. Hiring someone that knows what they’re doing, it was an added expense, but it saved me so much time and it gave me better results. I’m expecting the same thing with hiring a construction manager here shortly.

[00:18:00] WS: What’s the number one thing that’s contributed to your success?

[00:18:03] RO: Number one thing –

[00:18:04] WS: Other than your wife.

[00:18:06] RO: Other than my wife. Yeah, my wife’s great. She’s definitely a big impact. One of my core values is a passion for possibility. I stole that from probably 15 other different companies. I really approach problems with, how do I fix this? Not, I can’t do it. There have been plenty of deals that I ended up cobbling together, that a lot of people would have said, “Screw it. I’m out.” I’ve found a way to make them work. It’s done really well for me. I think if I didn’t do that, I wouldn’t be even close to where I am now.

[00:18:39] WS: Nice. A passion for possibilities. I like that. You got to have a mindset of how we’re going to figure it out, instead of thinking it’s too hard, right?

[00:18:46] RO: Right.

[00:18:47] WS: Richard, how do you like to give back?

[00:18:50] RO: I used to coach high school lacrosse, because I grew up playing it, loved it. Don’t have as much time anymore. I’ve got two under two, well oldest just turned two. It takes up a lot of time and this business is taking up a lot of time. I definitely hope to get back to that soon.

[00:19:04] WS: Tell the listeners how they can get in touch with you and learn more about you.

[00:19:07] RO: Yeah. Best way to get me is at my e-mail. It’s [email protected]. That’s my personal e-mail. I’ve got a couple of other ones related to the different businesses, but that’s direct to me. I’m on Bigger Pockets and I like to use Instagram every once in a while. My handle’s the same thing as my e-mail. Those are the best ways to get in touch.

[END OF INTERVIEW]

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[OUTRO]

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[END]