Alecia St. Germain (00:00.2)
If you are a real estate investor, you are someone who is building wealth through real estate or you are interested in building wealth through real estate, you are going to want to listen to today's episode. I'm Alicia St. Germain. I'm your host and founder of The Conscious Edge and I have with me today, Jenn Boss. You may have heard her on previous episodes. We have been diving in a lot into your numbers and the financial piece and I asked you Jenn if we should do a special episode for related to real estate and you said real estate is its own beast. I feel like we should.

Yes.

So for anybody who doesn't know you, would you please, they may not have listened to previous episodes, please let them know who you are.

Of course so. My name's Jenn Baas and my company is Peak to Peak Solutions and I provide outsourced CFO and accounting services to small businesses and entrepreneurs.

Alecia St. Germain (01:07.586)
And if that has piqued your interest, or you've been listening to her for the last several sessions, you may know that she has a wait list. So, sorry folks.

She's so sorry.

of availability. However, we have created an opportunity for you to be able to get some access to her knowledge, get some guidance through a workshop that we are actually going to be running on May 20th. So all the information for that will be linked here in the show notes. But in the meantime, Jenn, I'm so excited to talk to you about this because I do work with a lot of real estate investors in my coaching practice where I help women entrepreneurs

break through the things they do to self-sabotage themselves, the mindset and the things that cause them to play small. And you and I linked up and I, we went to, I had a retreat and you came to our retreat.

Which was amazing. Yes.

Alecia St. Germain (02:13.122)
Go ahead, shameless plug.

Yes, it was incredible and I wish that we were still there like three weeks later. I love the retreat bubble, but no it was truly transformative. Like it really was exactly what I needed at the time I needed and so many, I think two pages of takeaways that I wrote down on the plane on the way home. So everybody who's listening has to go on the next one because it's just the best thing you will ever do.

Except we only have six to eight spots, so...

except for that. So hustle and get on the list because you're going to want to be on it. I promise. It was funny. Shannon.

Shannon told her group, she said, if Alicia invites you to a retreat, say yes. That it. Just say yes. And that's what's really cool about this is a lot of the work that you and I are now kind of talking about behind the scenes is part of that flow from that retreat. And so one of the things that I was talking to you about,

Jenn Baas (02:57.208)
Just say yes.

Alecia St. Germain (03:15.414)
was how many women, especially in the real estate field, they have these mindset blocks around money. And in fact, at the retreat, we dug into money mindset as well. But you bring this different aspect of it. I feel like you and I do the same thing in different ways.

Yeah. It's really symbiotic. So fascinating.

to me. So, alright, so let's get into this whole real estate is its own based thing. So when it comes to finances, bookkeeping, accounting within the real estate industry, what are you seeing? What is like the big pain points that are coming up for people?

Yeah, and I will say first that I'm gonna speak in some generalizations. Like it's definitely not always true, so there's definitely people who will not be this way. But in general, what I find with real estate is that the people are these incredible, big thinkers, flexible, like they just, wanna go and be risky and make money and do lots of cool, funky things. The funkier the better.

Typically, the creative mindset around, here's a deal and here's the way to get it done. It knows no limits, no bounds, anything is possible. Which is amazing and incredible and I kind of envy people who are like that because I'm not naturally like that.

Jenn Baas (04:55.842)
However, on the accounting side, typically what that translates to, and not always, and typically, is that they're not really dialed into the numbers. So they kind of let everything just shake itself out. They figure the deal, make money, if money hits the bank, everything's good to go, and then they just keep rolling to the next deal. And typically that works well, at least for a while, but there comes a point...

There comes typically two points where they're looking for more. They're either trying to grow and all of sudden what they were able to do on a smaller scale doesn't work anymore without having their numbers in line. Or the market has shifted and it's changed and what was working isn't working and they don't know why because they didn't understand why it was working to begin with.

So typically that's the two things that I see that makes it really challenging and why I think it's really, really needed. And for me, real estate is super exciting because everything is different and it's really crazy. And so I love the organizational aspect of it because it's really, really hard and challenging, but sometimes convincing real estate investors that they need that is almost the hardest point just because they're

they're flying in such a different stratosphere and they just know it's all going to work out and be fine. And so helping them understand that the numbers actually give them a lot of power and a lot of insight. For example, if we can understand why a certain deal type is working in this market, we can understand when that market shifts, if it's not going to work anymore, and if we need to pivot and how we need to pivot. So it's again kind of being proactive, having things in

understanding which asset classes are working well, which aren't, that can inform best times to sell, best times to reinvest, all of those things, if we can put some focus and some intention behind it, can really magnify your impact in wealth building in real estate.

Alecia St. Germain (07:07.83)
think you said so many key things there. so we got a, you said a lot and now we need to like back up in there. Okay, number one, people get into real estate and I know they're analyzing the deal. And so then they start doing deal after deal after deal. And the fact that they're either not tracking it at all, which happens all the time.

Yeah.

And it's like, okay, if I sell it for more than I bought it for and I kind of know what my expenses were, I think I made money. But then there's all these other things that maybe they didn't realize or didn't account for or and they string a bunch of deals together.

Mm-hmm.

But they don't know how to make a through line to say, is actually the business. These are the financials. This is, I, and I hear a lot of them working really, really hard spending big for their big lives, right? Like living big lives and then losing it all when the market shifts. because they didn't know, but also there's the flip side of.

Alecia St. Germain (08:25.836)
They don't feel like they're making any money or they don't know where all the money's going. Even though they're, they're half properties or they have done so many deals, but they don't feel like they're living at the life, the life that they want. And then the third scenario, they have a full time job.

Absolutely.

Jenn Baas (08:47.848)
Mm-hmm. So common.

I think there's three different things to address here. Let's start with the first one where they're doing so many deals. And let's start there with that group of individuals.

So one of the unique challenges with real estate is because you're typically doing lots of deals in that scenario in lots of really creative ways. You're typically doing like this one's owned with this person and this one's funded this way and this one's doing that over here. And then because the lawyers want us to be smart on the liability side, we have a lot of entities that's super common with real estate where we're not just talking about one company and one set of books, but it's very all over the map with

what's going on.

It can be really challenging to centralize that into one picture. This is a summary of everything that I'm doing, and this is what's working, and this is what maybe isn't working, or this is how all the pieces play together. A lot of them have a good gut feel for like it's working or it's not, but again, they don't know really the specifics or which is working and which is actually not working, so it's kind of sucking resources away from the ones that are successful. So in my mind that it becomes

Jenn Baas (10:09.648)
super important to make sure that you have numbers dialed in on each of your deals in some way. Again, that doesn't always have to take the shape of a QuickBooks, right? I've learned to be flexible with my expectations in the real world. I have had to be, let me tell you, incredibly creative. And I will add, it can be hard to find accounting providers that can step into this space effectively because it's

creative.

Jenn Baas (10:39.568)
It's very competing mindsets. Like if you think about a traditional accountant...

They want things to work a certain way and look a certain way and be very organized and we want your receipts and we want our t's crossed and ids dotted, all the things. And that might be the polar opposite of, again, a typical real estate investor. so finding an accounting solution that can be flexible in the right ways of figuring out creative accounting solutions to keep things organized while also keeping the real estate investor on track in the way and saying, no, this is important. We do need to track this.

or we do need to do this in this way, like this is actually important, that relationship and the flexibility on both sides is actually really important. So, but finding...

What do you tell your investors is a good way to track some of these things that they need to track that get lost in the shuffle? What's the most common things that get lost in the shuffle?

say the ones that tend to be the most difficult are like the single properties like investment properties like they own with a buddy. That's the stuff where they a lot of times they don't want to invest in a QuickBooks file. They don't want to pay for that or maybe it's you know it's just a complicated ownership structure so figuring out the best vehicle for maintaining those records. Honestly I get a lot of resistance to just keeping the numbers right like they kind of know them.

Jenn Baas (12:12.364)
their head or they give the shoebox to the accountant at the end of the year, but seeing the value in having solid numbers on your different investments and organized in a way that makes sense, having them prioritize that is actually sometimes a bit of a challenge as well. Again, I think we can be creative. I love a QuickBooks file folks like that. Truly makes everything easy for everyone in so many ways and when you're going to the bank for a line of credit, that's what

want to see so it really checks a lot of boxes so that would be my preference when that makes sense but we can organize things on spreadsheets and things as well if we need to be more creative.

And so what if you could enroll them who are listening? Like what's the benefits? What's gonna make their life easier when they know these things on a at least quarterly basis?

Mm-hmm.

Jenn Baas (13:09.707)
Yeah.

And quarterly can be a great, especially for holdings, a great rhythm. So again, from a pure banking standpoint, anytime you're gonna go to maybe refi or do a cash out refi or put a line of credit against your equity, whatever that case may be, that bank is gonna wanna understand the financials, not just of that property, but of your portfolio, of your finances as a whole. And typically it's kinda like tax time, the stress that that induces

Trying to find and organize and like what about that property or what about this can be really difficult? And so just from a strict process management The exercise of keeping that stuff organized along the way saves you so much time and stress when it comes to do things like taxes or You know getting mortgages or refi sir, you know lines, whatever the case may be. So there's there's a huge advantage to that The other advantage is just knowing the real numbers of your properties or

of your investments. I've had a lot of conversations where I give them a P &L or a number, this is what this property is making and they're like, that's not right. And I'm like...

It is. Let's talk about it. Like I hate to be the bearer of bad news and we have to sit there and walk through and they'll fight against me. I'm like, but there was also this and they're like, oh yeah, shoot, I forgot about that. And then they're and there was this, like, no, that was last year. like, it might feel like last year, but that was actually this year. And like, so when, when you actually do put those numbers together.

Jenn Baas (14:45.78)
in one place and are organized, you have black and white. This is what that investment is doing for better and for worse. So you can really understand it. That empowers you to make decisions about your investments and understand what's working, what's not working. And there's a lot of lenses with which to view what's working, but you can't really evaluate it if you don't have some concrete information. So I honestly think it's marrying the two together.

of making the practical stuff easier because it is so painful with all the crazy stuff in real estate, make that easier for yourself by investing in some systems and processes to keep it organized along the way and then let that information help guide your decisions and impact your growth.

Don't you think some of the technology that is now available makes that easier too? Like just having the infrastructure and the systems and processes. A lot of it is built for you. You just have to be willing to invest in it. mean, there's that piece. So it's interesting because I'm listening to you and I oftentimes am told when I give coaching,

I have such a loving way of delivering hard truths. I say, this is your loving hard truth. It sounds to me like you also give loving hard truths.

I have learned how to be delicate and yet also honest.

Alecia St. Germain (16:17.994)
Yeah. So everybody, especially in real estate, and I even think, gosh, you know, lot of people are raising capital and working with bringing other people's money into deals. And it is so important that you have really clean, transparent books.

Mm.

for those purposes as well. It makes life a lot easier when things are up.

That's a great point. you know, there's so much in real estate where you are in a lot of situations managing people's money, right? Like whether you're a property management company, I'm dealing with a client right now who had a property management company mismanage his funds and they're actually in a lawsuit situation. We're digging through this whole mess of how that that property management company, you know, managed funds in the wrong way. Or if you're dealing with investors, whether it's a private investor in a private loan who all of a sudden

Yeah, that's a lot of trust that they place in real estate investors and that's oftentimes relationship based. To me, there's an extra burden there of making sure we do really great job with our record keeping so everybody in that relationship feels safe. And then certainly in more of a group capital situation, we want to be able to be very clear and on the up and up with all of that. Yeah.

Alecia St. Germain (17:44.736)
Yeah, and you said something really great, like in the example that you gave, and we talked about this a little bit in the last podcast episode that you and I recorded together, you have to go through and check your books. So yeah, you need your books and...

You have to go through but verify.

Yeah So had you know had because it's not the first time that I've heard people have problems with property managers mismanaging funds And so if you're not looking You're not doing your job as the person who's overseeing the the company and again, that's not to shame you or say you're bad, but it's like

calling your attention to this piece that's really important. It's really part of being the CEO, being the person that's in charge. So now talk to me a little bit about market shifts because you actually came from working for a company. have a real estate.

Absolutely.

Alecia St. Germain (18:51.47)
accounting background. Like you have been very involved in accounting and real estate. And so talk to me a little bit about when markets shift and what that looks like and how this helps people stay on top of that. Because I think a lot of people look at it from a market perspective, but they don't look at it from a book perspective.

to

Jenn Baas (19:14.004)
Mm-hmm, absolutely. think tying those two pieces together is really critical And so what I love to do and what the books can help us understand in more black and white terms is What's working in the given market environment? So one of the real estate companies that I worked with and grew exponentially while I was with them But when I was initially with them, they were focused mainly just on doing rehabs. This was probably

years ago or so.

And for a while, probably a good year or two, they just made bank time after time on these rehabs. They would blow the budget every time, right? So I would always laugh. They would give me a budget and I'd be like, yeah, right, we'll just double that. But the market always bailed them out. So materials were less expensive, subs were less expensive. Buyers were a lot more aggressive. And so they were getting way more on the sales side than they had planned for.

just always bailed them out, they always made bank on it. And then the market started to shift. And the stuff that had been kind of bailing it out and making it work stopped doing that. And so all of a sudden it was like, wait a second, this was working. Why, why isn't it working? And if you have the insight of understanding why things are working, and then the market starts to shift, you can be ahead of that and say, okay, now we need to tweak this. The market was buying us out.

or helping us out, it's not anymore so we have to stay on budget. We can only invest in properties that we know if our budget is X, we can stick to that because we know it's not gonna help us out on the backside. And then also just being aware of when the market shifts enough that that investment tool isn't working for you anymore. Maybe you need to pivot to something entirely different. In that case, they actually ended up in the wholesale market and did a whole lot of wholesaling and kept their rehabs and their hotels to a much smaller kind of

Jenn Baas (21:15.856)
of just cherry picking the ones that would make sense. So being able to be in tune with what's working and how it's dialing in, how profitable are the properties, how profitable are your rehabs, what's your target with that, when does it not make sense, when is that risk factor high enough that it actually makes sense for those funds to go to some sort of other real estate investment that's maybe more secure. That can all play into being really strategic with it so that when the market shifts,

because we know it's going to. It's like its own living beast, right? If it changes and ebbs and flows, you can adapt with it and kind of see it coming and make adjustments on the front end instead of being stuck kind of holding the bag at the end going, wait, it was working and now it's not. And you're kind of late to the game in understanding, you know, why and how to adjust.

Okay, so now this other piece I want to talk a little bit about because I think this is really cool. So there are people who have been investing in real estate and they still have nine to fives and the goal is to not have that nine to five anymore or need that.

Some of the things that I hear is that fear of being able to still have enough money, being able to make sure they afford insurance, those things that make a job feel safe and secure, even though it's not, because you're the freedom. So how do you, how should someone approach

maybe feeling a little bit more safe about making that transition.

Jenn Baas (22:59.726)
you

That's a great question. I do and it's actually kind of similar to some of the budgeting and planning we've talked about before, just a little more on the personal side. So if had somebody in that position, what I would say is we need to develop a plan around this. So what are all of your costs that you need to live? What does all of that look like? And being able to put that down on paper so that we can start planning on how to replace the income that you need in order to generate that.

So instead of I find a lot of them there they kind of wait for it to happen and feel comfortable And generally it takes a while and generally it actually never feels comfortable I would say it's always kind of a leap of faith, but if we can create some structure around it

and a plan around it. And then, like we've talked about with some of the other things in Action List of like, okay, here's our gap. What can we do? What other sort of investment or what other sort of piece do you need to add to this puzzle in order for you to generate enough income for you to feel more comfortable making that leap that can just provide some structure and some peace when making that shift.

And now as you're talking, I'm thinking about, I hear this so often from people in real estate related industries. So there's real estate investors and a lot of the real estate investors have real estate related earned income strategies, other earned income strategies. Like they might be a realtor or they might do loans or they might have insurance. They do something related.

Alecia St. Germain (24:42.714)
specifically I think of like the realtors, people who are doing rehab and retail, wholesalers, they talk about their income as being feast or famine. Like they might have a ton of closings and then they think, I made money. And then they have months where they didn't make anything and weren't doing anything. They were looking for the next deal or they were looking for the next listing.

I don't see them approaching that as a business. And I think if they did, they would be so much happier and so much, more. Do you work, like have you worked with people like that or what advice would you give around that?

I would say that that...

I think people are feeling that now, at least I'm in Colorado, so our market has definitely shifted a bit. It's still a pretty decent, pretty hot market, but for a while there, everything was selling. Everything was selling way over ask. It was pretty easy for the realtors to just really make good money. And then now it's not quite that way. And so I think having a level of planning and acceptance of the volatility of the market is really smart.

So what I would advise for people like that, for people that are in real estate in that way, is to plan for the ups and downs. And so when you make, when you have a great month or a great year, having some awareness around the next month or the next year may not be that way. And so what can we do? What's some smart strategies of creating some safety? especially if you have a family and you've got people you have to support. Where it can be really difficult, it's like you have an amazing month or an

Jenn Baas (26:32.88)
amazing year and then you level up your lifestyle and some of that's super fun and maybe totally warranted but doing it in really thoughtful way so that the downside of that upside is you're going to hedge a little bit and not feel it in a really painful way on the personal side.

seen what the work that you've done with me and I'll link the previous episodes where we talk a little bit about what you've done what you walked me through I think that that process of vision like having a vision what do want your life to look like what do you want what do need to pay yourself it's kind of similar to the nine to five like transition what do you want to be able to pay yourself every month and then I'm the kind of person that like

Well, what do you mean you don't have another deal or you don't have another listing? Do more marketing. Like get out there and like figure it out. But having the budget and the plan and knowing ahead of time, things are slowing down or I'm not hitting my goal, my revenue goal to be able to pay myself comfortably for this year. I'm lacking. We need to make some decisions mid year.

to try a new marketing strategy, know that a certain marketing strategy we do is working really well, we just need to put more money into it or do it. So having that ahead of time, I'd imagine, would be really helpful. And I don't see anybody practicing that way. Like, is there somebody out there teaching these poor people to do this so that they are comfortable?

Mm-hmm.

Jenn Baas (28:14.382)
Well, I think that kind of goes to...

back I think my initial comment about who the real estate investor typically is. Not always, but typically they want the freedom and they want just that thing about being a real estate investor that kind of flies in the face of having the planning, having all of those pieces in place.

I wish that they could understand the gift they give themselves if they can add in a little bit of discipline and treating it a little bit more like a business because it takes some of those swings and some of those swings can really cut you off at the knees. I've seen it and it can be really, really difficult. I think the other thing that's really common, there is this eternal optimism with the real estate investor. I've never met such an optimistic group of people. I probably need a little

dose of that and that can be some of the push and pull between a role like mine and trying to work with a real estate investor is the deal is always going to work and when it doesn't the next deal will and that's just kind of how they think which is I think why they keep staying in the market because you know you guys they go through some really tough stuff and they just like keep getting up and keep swinging which is amazing.

The you see do, but I have seen my fair share of people who ride those waves and because of poor planning they go back to regular jobs. I think it happens more often than you probably see because they don't ever come see you. It's the ones that want to stay in the market that are hiring people like you.

Jenn Baas (29:55.278)
That makes sense.

Jenn Baas (30:00.172)
Exactly.

Jenn Baas (30:06.124)
Yeah, that makes total sense.

And it hurts my heart. And in the same respect, yes, they are optimistic individuals. And I would say you have to be really careful. This is more to our listeners. have to be so careful because sometimes this unrealistic optimism, it has an Achilles heel.

It does.

And I tell people, especially my free-spirited people, I tell them, structure is freedom. Structure is freedom because when you are chaos and you are shooting from the hip and you are just figuring it out as you go, that's amazing for creating momentum. It is not amazing for sustaining momentum.

Yep.

Jenn Baas (31:00.278)
I think we are like the same person because I'm pretty sure I've said variations of that to my real estate people. So yes. word for word.

Yeah.

Alecia St. Germain (31:16.942)
So it's adjusting, you know, and this is some of the things Jenn and you and I have talked about behind the scenes is how synergistic what you do is with what I do because there's a mindset adjustment, you know, in their mind it's like, well, if I slow down and I look at the numbers or if I'm not constantly looking for the next deal or I'm not doing something, doing something.

Then my business will fall apart. But the truth is if you don't slow down and do this stuff, your business will fall apart. So you don't have time not to. So it's like adjusting that mindset around them. So more to come on those collaborations. But in the meantime, Jenn, is there anything else that you want to...

I guess.

Jenn Baas (32:03.818)
Yes.

Alecia St. Germain (32:11.826)
say to the real estate investors, those creating wealth through real estate, those in the real estate related industries, anything that you have left unsaid.

I don't know, think I would just underscore that like your, if you're successful now, you will multiply that or stack the odds in your favor if you do invest in some structure and some time and understanding your numbers. It really does empower you to make different decisions or just understand as a real estate investor, if you're diversified in a lot of areas, what that full picture looks like. So it's, I've seen it work really, really well when people do that.

I've seen the effects when they don't.

Of course, I'm trying to wrap up and that made me think of the fact that there are so many things you can do in real estate and I think people get educated often times in some kind of alternative education and so they kind of go through and sample different ways of investing and then they end up with this smorgasbord of stuff that is taking all of their energy.

Yes.

Alecia St. Germain (33:25.87)
And so I think when you understand what is the best, what are you good at, what fits into your lifestyle, and this is some of what I help clients do from the mindset piece in organizing their life. You help them do this from the financial piece, like what actually lends to what you want in your life? What lends to your vision? making the decision to get rid of some things.

some asset classes, some structures that don't actually lend to what you're good at. Just because you can buy it or just because you did buy it doesn't mean you have to keep it or should.

And just because the deal works at the time doesn't mean it keeps working. That's another piece too. Or that it's the right vehicle for what you want to accomplish.

Yeah. You know, I was talking to someone earlier and they were talking about how they do, they, they are successful as an investor and they've created this life, this big life where they've now become a slave to what they've created because if they, have to keep up the income. so this kind of work could

Yep.

Alecia St. Germain (34:40.846)
help them see where they could make a longer term investment in order to slow down a little bit and preserve what's important about their life.

Mm-hmm. I make sure their goals are aligned. Yeah Yeah, what type of life do they want to have kind of that vision piece and then is what they're doing and Whatever they're invested in is it carrying them towards that or away from that?

I love that. I love that. I'm so excited for what you're going to teach on May 20th. And it's funny because I was like, should it be basic? And you're like, yes, because you don't understand how many people really are afraid of their numbers and don't look and don't know if they're putting it together right and don't know what it means. I'm so excited for the value you're going to bring.

details are in the show notes so make sure you check those out and Jenn thank you so much for being here.

Thank you so much for having me. I really appreciate it.

Alecia St. Germain (35:49.258)
I am 100 % your biggest fan. just want to figure out how do we multiply you so we can get more people support. I think you just need to train people to do what you like. You need to train people how to think like Jenn. Little Jenn's.

you

So thank you so much and if today's episode was helpful for you, please share this with someone who you care about. We need to get this out to more real estate investors so that you can keep your wealth.

I want to see you for the long haul create generational wealth, hand that down to your kids and this is something you have to have in order to do that. with all of that being said, I'm sending you so much love and if Jonathan were here he would say be well.