Banks May Not Always Be The Best Option
Banks May Not Always Be The Best Option
How can business owners create a culture of employee trust and dedication?
Contrary to what everyone told us, we finally embraced hiring employees. We used to think employees would only cause problems—they’d lie, steal, or cheat. Can that happen? Sure, but I believe it depends on the culture you build in your company. Our employees care about our companies, sometimes even more than my partner Jeff and I.
Some of our team members work late into the evening or on weekends, whether they’re salaried or hourly. Even the hourly workers often put in extra time without charging us. It took us a while to realize our weaknesses in management. My partner and I come from different backgrounds—he’s an IT professional, and I come from construction. But we align on our morals and ethics, especially when it comes to putting people first, including our employees.
As a control freak, like many entrepreneurs, I wanted to have my hand in everything, even after delegating tasks to employees. Letting go of that control was tough, but now, I trust my team completely. This summer, my wife, kids, and I took a five-week RV trip, and I worked no more than three hours a day. Some days, I didn’t even work that much, and the staff handled everything well. It’s all about giving them the support and encouragement they need.
How can business owners take vacations without disrupting their business?
I was challenged to take that vacation by a peer. I was jealous because he did it in 2020 during COVID—he took a month-long RV trip. I told him, "I could never do that," and he said, "That’s nonsense. If it’s in your vision and something you truly want, make it happen."
So, for 2021, my wife and I blocked off the month of July. We had no idea how we’d pull it off, but on June 26th, we left our driveway with our fifth-wheel RV, three kids, and a general direction—west. We live in Wisconsin, so we just headed west with no solid plans. We had friends along the way, but we were set to return on August 1st because I coach my son’s Peewee football team, and practice starts then.
The first week, I was a nervous wreck. By the second week, I started to relax, and by the third week, I wanted to change how I run the business. I enjoyed the freedom so much—the ability to wake up with my family and decide to do anything we wanted. It didn’t cost as much as I thought, and my staff handled everything fine in my absence. There were areas with no cell reception or Wi-Fi, and my staff couldn’t reach me, but they managed perfectly.
Now, taking the trip again this year was simple, and it’s something we plan to do every year.
What are safer alternatives to using personal assets for business loans?
The worst decision I ever made, which I had no way of knowing at the time, was using my personal property as leverage on a home equity line of credit and risking the roof over my family's head. It drives me crazy to see people on forums like BiggerPockets talking about how it's the best option because it’s cheap money. Yes, getting a line of credit at 2 or 3% sounds appealing, and having instant cash is tempting, but many don’t read the fine print. Most of those loans can be called at any time.
Back in 2007, my other lines of credit were cut off for no reason, even though I was solvent, and everything was fine. If I could start over, knowing what I know now, banks would be my last option, not my first. Nothing against banks—they have their place, especially if you can get long-term, fixed-rate financing. But risking personal assets, like your house, isn't worth it.
There are much better ways to buy property creatively, using options, leases, and buying subject to the existing financing. These methods require more effort, which is why many people default to banks, thinking it’s easier. But as business owners, we know dealing with banks is not easy, especially when you're self-employed. I remember when I told my local bank I was about to leave my job, they said, “Don’t do that.” They didn’t want to give me loans if I wasn’t employed. That’s just the way the industry is.
What strategies help business owners prioritize work and family?
Back then, I was focused on the financial side of building a big empire. Today, my personal vision is centered around time—time with my family, my wife, and my kids. We pass up opportunities that could add more zeros to the bank account regularly because they don’t align with our vision for life.
A few years ago, I had a wake-up call at a mastermind. My wife was sitting next to me in tears because I was constantly answering the phone at night, on weekends, and during family time. I would tell my kids to be quiet because I was on a business call, thinking I couldn’t afford to miss out on deals. My peers in the mastermind pointed out how foolish I was being, and it was a tough but necessary realization.
As men, we often feel the need to be providers, believing that working late and taking every call is for our family’s benefit. But in reality, we end up hurting the very people we claim to be doing it for. Seeing what it was doing to my family—and my wife’s reaction—changed me. Now, everything is driven by our vision. If an opportunity doesn’t align with that vision, it’s easy to pass it up. Our vision may change over time, but keeping it focused has opened up new opportunities we wouldn’t have considered before.
How do you ensure your children develop a strong sense of identity and vision for their future?
Most of my decisions now are based on longevity and preparing my children for the future. Whether they enter the real estate business or not is irrelevant. My goal is to shift their mindset away from what’s typically taught in schools and give them opportunities. We’re not handing them anything, and they know this. I have a 16-year-old, an 11-year-old, and a 5-year-old, and they all understand they are part of a chain. They’ll inherit some assets, but everything is in a trust with clear responsibilities tied to those assets.
Growing up, I felt my parents hid things from me, especially when it came to money problems. They talked about it behind closed doors. My wife and I decided to be open with our kids. Part of this comes from our journey—we faced infertility and ultimately adopted two of our three children. That experience made us appreciate our kids even more. Our family looks different; we have a biological Caucasian daughter, a Chinese son, and an African American son. Walking around Central Wisconsin, we get looks, but we’ve raised our kids to know there’s nothing wrong with being different—whether in appearance or finances.
We want them to understand they don’t need to follow the crowd. When you take your kids on a five-week trip, their friends notice, and sometimes they face backlash for it. We’ve always tried to stay ahead of that, which is why we make the decisions we do. It’s about personal vision and leaving a legacy without letting them squander it.
What are the benefits of joining a mastermind group for business owners?
In the first half of my career, when everything went south, my wife and I had no one to turn to. We were on an island because we never allowed anyone into our circle. We were closet investors, barely telling anyone what we were doing.
In 2012, after meeting my business partner, Jeff, we realized we needed to build a network. It started locally but grew nationally. By the time COVID hit, we were hosting three masterminds of our own and were part of another that we had been involved with for years.
When COVID hit, everyone in our masterminds—spread across the country—was calling each other, asking, “What are you seeing in Atlanta? In Idaho? In Florida?” And for almost everyone in these groups, 2020 ended up being their best year in business. We didn’t panic. We looked for opportunities and found them.
Our biggest investor came through a referral from someone in my original mastermind group. He got me a meeting with a contact of his—wanting nothing in return—and that investor has provided millions of dollars in funding for our lending company. We would never have had that opportunity if we hadn’t been vulnerable in our mastermind group and admitted we needed help raising capital.
As business owners, we’re expected to always have it together. But when you find the right mastermind group, you can be vulnerable in a safe space. Our group, called Circle of Trust, is just that—a place where what happens there stays there.
Our focus isn’t on net worth, or the number of deals closed. We measure success by whether you're living the vision you want for your life. If Tracy and I had embraced building a network and joining a mastermind group in 2004, we likely could have avoided the heartache, bankruptcy, and foreclosures we went through. Still, those challenges became a blessing, allowing us to teach and educate others through our experiences.
*This interview has been edited and condensed for clarity.*
