Profit First Radically Changed His Business: An Interview with Cody Barton
“The biggest thing about implementing Profit First is staying consistent with the process NO MATTER WHAT!”
Recently we had Pace Morby on the podcast, and Cody is the implementer of Pace’s business!
If you haven’t listened to Pace’s interview, I highly recommend going back and listening to that first, here is the link:
In this episode, Cody lets us take a sneak peek behind the scenes where the magic happens and gives a different perspective of Profit First which you’ll ABSOLUTELY love!
David: Hey, everyone is David Richter again with the Profit First REI podcast. Have another interesting episode today because we just had recently on the podcast Pace Morby and Toni Counts, and so I’m really excited about today’s episode too. Because now you really get to hear what happens behind the scenes because we have Cody Barton here today and I’m really excited because he’s the integrator. He’s the person that really makes everything run inside of Paces business, so I really am excited today because this is what really makes a count inside of any business is the one that actually can go out and do what the visionary has and if you were on the recording or if you listen to the podcast with Pace. You’ll see he is a visionary, but it takes someone like Cody to really implement that, and honestly, I have the highest respect for the people like Cody and especially at the volume that they’re doing the levels that they’re doing, there are many companies that are going on by because of my background in real estate and like where I was, I was doing deals on my own if you’ve heard my story and some of the beginning podcasts. I was doing deals in real estate myself but then hooked up with a company and was really their integrator and like was one of the people helping that run so I like I said anytime I meet the people behind people it’s very like I love this because this is what it takes to actually run the business and like what do you do on a day-to-day basis. So that’s kind of who Cody is. I’ll let him tell who he is and how he got started in real estate and then give a little bit of his background now. So Cody, do you want to talk, so I don’t keep rambling?
Cody: Well, yeah, I mean my- you know, long story short, you know I’ve always been an entrepreneur, you know from when I was in high school even I was back before like dropshipping in the e-commerce is a big thing. I was- I was buying stuff in China and then reselling it here in the US, you know, just when I was like 15-16 years old. So I was making, you know, decent money in high school, and then I got introduced to network marketing, and I was like, wow, this is awesome. So I got involved in you know the company build up four years, traveled around the world you know building things has been you know after about four years the company started you know dwindling away, and so it was time to make the change, and it was, do I do this? Or do something different? and my mom was a real estate agent, and she always made you know pretty good money, and I was like I’m good at- I’m just- I’m a hard worker, and I’m super efficient that you know whatever I do. So I became a real estate agent. I wanted to be an investor, but you know I didn’t know the path. I didn’t know anyone that was investing in real estate. Okay, like I became a real estate agent. That’s the path, so that’s what I did. And you know I did that for three and a half- four years and my intentions of being an investor- I’m over here working as a realtor I start building a real estate sales team, and I’m making money, but I’m like what I- at the end of you know 3-4 years of my- what am I doing? like why am I- why am I still working as an agent? Like my goal is to own rental properties to flip properties, and you know, so after a few years of that, I was like, you know what? I don’t want to do this anymore. I want to just invest in real estate like you know? So that- I was sick of dealing with buyers and sellers and like I don’t you know I’m a very- my personality type I’m not the most emotional person so like understanding someone’s emotional problems like I might let’s see the numbers, in the numbers like it’s either we’re moving forward or not moving forward type thing. So that’s my mentality, and that’s why I like investing because it’s you plug in the numbers they either work or they don’t work and if there’s no emotion or not. So that’s why it’s very easy for me.
David: And you don’t deal with buyers and sellers at all in investing. Do you know? You never have to talk a seller into taking a price that they would want, right so? just kidding.
Cody: Oh, I know.
David: Yeah, right, you don’t. Exactly- that’s the key now, right? Oh, man.
David: That’s awesome.
Cody: Yeah, so that transition was, you know, got out of being an agent, and literally like within a month, I was just like I’m done. I don’t want to do this anymore.
Cody: You know, like broke the lease on the build- you know on the building, I was ranting. I told all of my team like I’m not doing this anymore. I’m going in a different direction.
Cody: So you know just to- just to be happier honestly. Because like at the end of the day it’s like if you make money, but you’re unhappy it’s like what’s the point? So-
David: Yeah. That’s so true.
Cody: So that- that was the transition. I was like, I’m going to just do wholesales. So I did you know all the- all of the things people talk about. I’m like people say driving for dollars; I’m going to drive for dollars and take action, make the calls, knock the doors you know got my first deal. I started doing, you know, some deals consistently month after month, and I was super good at, you know, generating leads and you know, finding motivated sellers, and I wasn’t the best closer. I was getting you know I probably should have with the lead flow I was getting. I should have been closing probably four deals a month, but I’ve closed 1-2, and that’s where you know Pace and I linked up was. After about six-seven months of me doing that on my own, I- you know I watched the Steve training podcast I saw Pace on there. He was talking about, you know, being a really good closer. I’m like, that’s who I need to talk to. He’s closing deals really well, and I’m getting a lot of leads that I know can be closed. So literally just reached out to him with a value I’m like, okay, what can I do to bring value to you? I’m generating leads; I’m happy to bring these leads to you if you close them. I don’t even need to make any money. I just want to be the part of the process and learn what’s- you know we learn how to actually do this business better. So you know I was at the intention of, I’m doing this long-term, I’m not short-sighted, and you know, okay, you know what can I make from this deal? What can I make over the next 5,10-15,20 years? So that’s how you know me and Pace got linked out. I’m like, hey, I’ll just bring you leads, and you know we closed literally the first week and a half, I’ve got four contracts from my leads just bringing them to him and teaming them up and setting appointments and him closing them. So it was- it’s pretty cool.
David: That’s awesome.
Cody: Yeah, and so then we were just like man, we get along really well like our personalities like we’re- we’re so different, but we’re very similar like we have very similar beliefs and work ethics and morals. But you know what, as far as our actual talents and skills are very different. So after a few months of that, It was like we just kept doing more and more deals together. He was spending a lot of money for you know I’ve done a free marketing system I was spending- he was spending. I think like 15 or 18 grand a month. I was spending like four, and I was getting more leads than he was.
Cody: You know he was just paying some other company done for you system thing, and so he was able to cut that off and not even have to pay for that anymore because I was just bringing the leads, and then I was able to get more deals closed because he was good at closing. So after a few months, I remember that we’re sitting in his living room, and he is like, if I like, may this was probably February last year. He was like, If I may, we don’t hate each other. We should just partner on the wholesale business.
David: Nice. and old and behold – You don’t hate each other. Awesome, I love that story. That’s so great. And honestly, that was great for the listeners too. What you just said there the bringing value the way that you approached Pace and just bringing- wanting it from the value add perspective because there are so many people that probably reach out to you now you know successful, and it’s like oh you know like what can you do for me? Basically-
Cody: Oh my gosh! Every single day!
David: Exactly, and I love what you did because that’s how you really do it. It’s like how can I bring value to you? Because I know that in order to receive, I need to give, I need to be there, and I need to do and bring that value and if you do that, usually what you receive is ten times more valuable than what you’re even able to give in a lot of cases, and you don’t even know that. But it’s like saying that, and I love that. That was huge, huge. The other big thing I’m taking away from that too is how different you guys are. You guys have the same morals values, the things that really matter but then, like on the actual tasks, you guys are like the opposite end. So it’s like you’re the operator he says let’s go paint is barn purple, you know and you- and he’s like okay now let’s go paint this one red, you know? And you are just like, okay well, we’re going to have to put the team here and then pick out which color paint color-
Cody: What color are we doing?
Cody: How much do you need? Who is going to do that?
Cody: Who is going to do that on the base?
David: exactly, exactly, and he’s just like I just want it purple, so like just go do that. So you know it’s like I love it because every- every visionary needs that integrator person need that person who’s that operator and you guys- you guys look like you’re two peas in a pod there you know you really complement each other on your skills, and every single person needs a Cody in their life. Honestly, those are the ones that go to that next level because they’re able to take their visions and actually make them reality because it got a Cody to make him the reality. So that’s another just I could go on and on. I know this podcast is Profit First REI, but I love it when we get to go to the gold nuggets of Life What It Takes To run a successful business too. So really appreciate that, and I’m sure the listeners do too. So let’s move on to Profit First. Let’s talk about- let’s first ask you that before I get into some of the more fun questions. How did you hear about Profit First?
Cody: So I had a few other investor friends that told me about Profit First. I can’t remember the first person that told me about it, but I had a few people that told me to- just Mike’s books in general like you know Profit First and then you know-
David: Pumpkin Plan.
Cody: Yeah, Toilet Paper Entrepreneur. All the different books that he has now FIx This Next is the one that I’m reading.
Cody: Which is amazing, you know a few people told me to read it, and this was I remember this specifically I bought the audiobook, and I started listening through it this was last year, and I was- I was visiting my grandparents actually so I was staying at their house. I was listening to it before I was going to bed, and I remember I was lying in bed listening to it, and I started being overwhelmed with anxiety and stress. Because of what it was talking about and I’m like, oh my God, I’m running our business entirely wrong. All of our money management is horrible, like absolutely horrible it’s like we- we weren’t paying ourselves. We’re just reinvesting everything, and I’m like we’re making a lot of money but requiring more properties, we’re getting all these rentals but I haven’t paid myself in two months. Like that- that’s like, and I’m like I’m wondering why I feel like I’m poor? Like I’m not paying myself but we’re making money.
Cody: And so that you know that was the thing and you know just the not being on top of the expenses. And like oh, we actually need to be paying ourselves the salary and all these things, and honestly, I turned it off. I’m like I can’t handle this right now I’m like there’s too many things going on right now in the business to implement this I feel like I’m going to implode, so I- I literally put it away for like probably four months. And I was like- I’m like-
David: That is so great because- oh, man, that is just- that is real estate that- you are a real estate investor. That’s just you- you now have bonded with everyone listening to this audiobook- listening to this podcast. Because if they were listening to the audiobook- I remember listening to that too. I’m like the first time before I was like actively preaching it everywhere, and like years ago, you know I read that I kind of had the same thing like oh, shoot you know like why in the world I’m doing everything wrong? Man, what a great story. That is awesome. I’m sure every real estate investor, if they read that or what not they’re just like, okay, do I really have what it takes to do that?
David: So I love that, that was great, so when you didn’t pick that up for months later, what was that? Tell us about that what I guess what prompted you to pick it back up?
Cody: I was just so damn frustrated, honestly.
Cody: It’s like gosh, man, we’ve got to get this together, you know like we weren’t paying ourselves for two months, and it’s like all right we’re both you know takes 30 grand or 40 grand out of business and don’t pay themselves. It’s like up and down. I’m like, all right, I have money, and then I’m like I don’t have any money, you know? It was just constant, and it was hard because the thing is for me mentally, it would stress me out. Because Pace being the visionary he’s not like really- he doesn’t ever look at the bank account, doesn’t log into anything he just goes about his day and like creates amazing opportunities and you know provides massive value in the ways he does.
Cody: and I’m over here like looking at the bank accounts, and I’m like you know what are we doing? and you know it was just like this whole thing, and I’m like okay well in case if we can’t buy and sell those three rentals because then we’re going to drain our account and then you know then we’re not going to be able to pay ourselves, we’re just like we’re reinvesting for the future!
David: Code for I’ve no idea what’s happening; just make it happen, please.
Cody: Yeah, yeah, pretty much. So that- I was just honestly it was just stress levels were out of control and we were making money, but we wouldn’t see any of it.
Cody: So that was the- that was the challenge, and so it was just like you know what, I need to pick this book up. I’ve got the physical copy. I’m like no matter what, I’m going to get through it. I’m going to start having us make these changes. We’re going to figure it out, and it’s going to be bumpy for the first couple of months, and you know it’s going to be messy, and you know it’s confusing, but whatever. Whatever it’s going to take to get it implemented, we’re going to figure it out. And so that’s what we did, you know we just- that was earlier this year. It was like a February-March of this year. So I’m like, you know what? This is what we are doing, and Pace is like, what do you mean? He is like, then you know we’re not going to be taking you to know the chunks of some money, and I’m like boy yeah, but then we’re consistently getting paid every month, and then we get paid on the profit.
Cody: So just getting him on board originally was a little bit of you know some- some resistance, but he saw the value, so he’s like I’m not going to read the book he’s like I trust you, and you know it’s- it’s good stuff and so. I think he still listens to the audio-.
Cody: But at that time, he was like yeah, I am not going to read that.
David: He didn’t want to go through the same thing of like lying in bed and being stressed to the max. So that’s great. I love that. Just especially since we’ve had Pace on too and hearing his side of it then hearing your side of it, it’s like, oh man; this is great stuff because he had Toni on there too and how she helped implement it and whatnot. So let’s talk about that a little bit. Toni Counts, if you haven’t listened to Paces podcast episode yet. She was the- she is the bookkeeper basically behind it, and she loves Profit First. She is all about the Profit First methodology, and she’s the one helping on the book side of it. And so Pace, we had to see kind of Pace’s relationship with Toni, but you want to explain your relationship with Toni? and like he talks to her, he said he’s like never ever talks to Toni, and it was like it was great seeing you Toni on the podcast you know because we never- never talk. So tell about your relationship with Toni.
Cody: yeah, so I’m super involved with Toni. I mean, if we don’t text every single day besides maybe one or two days the of the weekend but even then on the weekend. A lot of the time, we’re talking every day, and so initially, when we’re starting, she was like, why do you want to do the percentages? I’m like, honestly, don’t really know like it’s confusing because I’m confused because we need to set aside money for these different things. I’m like, just tell me what accounts I need to make. I made the accounts, and I’m like, just tell us what to do with the money percentage-wise, and then let’s just start doing that, and then you know we’ll readjust as we go forward and just tell us based on what your recommendation is. I don’t even want to be making the decision on what we should do. It’s just you know, obviously like you have the percentages based on company revenue, so that’s why I was like hey this is where we’re at, this is what it looks like we need to be out, so let’s start there, and then you know and just based on you know maybe we need to make so other adjustments.
Cody: so that’s that’s how it started. We started that was our wholesaling business, and it was messy for a couple of months, and then it was like all crap our- you know our owner pays off like we need to be actually you know a little bit higher. I was like being a little bit too conservative.
Cody: We actually need to be paying us a little bit more. So we adjusted it so okay, so you know, so it was adjusting for a couple of months. She was so helpful, just extremely, extremely helpful, and you know it just like helping with the accountability too. Because she is just like you know, she’s like puts the money where I’m supposed to go. It’s like I don’t even- you know I just I look at the accounts every month, and you know I’m checking what’s going on and but it’s nice that see that she just- I get- I feel like I’m like an employee at all the companies instead of like this freaking mismanaged person that’s just doing everything. So it’s nice that the money- you know we’re paid on the 1st and 15th. Which we changed because I think it was like the 10th and 25th or something-
David: Yeah, in the original book.
Cody: Yeah, so we changed it to 1st and 15th because all of our employees and staff and everything are used to being paid on the 1st and 15th. I’m like make it easier first for everyone-
Cody: -including us.
David: Awesome. I love what you said there too. It gave you more clarity about like what your role is and like you know, feeling like you’re not the mismanaged going just crazy from place to place knowing what- what money is here what money is there. And actually looking at that deal from the high-level now that’s what you should be doing as an integrator. You shouldn’t have to dive into the weeds as much. You should have someone like her who’s kind of like in a fractional CFO position.
David: You know that’s like really taking care of your finances and really helping you so that way you can get what you really need because now you can look at the bank accounts and be like oh okay, that’s where we are right now as far as like what we need for the operations and Ike for paying ourselves. So that’s-that’s awesome, especially like I said since we got to hear Pace’s point of view and his reac- and his interaction and now that you told us that you’re talking to her basically 6 or 7 days a week and now it makes a lot more sense too. Like well, okay, he’s got someone on the team that’s like pushing to make sure that this happens and like it’s actually helping her too like be on top of it and with Profit First and I just- I want to compliment Pace too. Like for putting this team together and for like with Toni and you and you too like honestly both of you for what you guys have done in the real estate world and then also for taking charge of your business. So many people they do the four months thing like you; they take that four-month hiatus, and then they never go back to the book, and they’re just like going to stick their head in the sand with their finances and just keep sticking their head in the sand with their finances. So- that’s- it’s a breath of fresh air when someone who’s in the real estate world who actually goes back and then cares about their finances. I’ve only got a couple of last questions here. Let’s see
Cody: I want to say really quick on that.
Cody: Is I think the reason you know that really pushed me to do it is because of our people like we have a team that’s counting on us to be a successful company and the biggest pressure for me to actually move it forward was I’m being irresponsible as a business owner by not creating a certain see with our company’s revenue to be able to make sure all of our teams you know are taking care they’re getting paid their you know they’re not going to be in a position where we’re like crap we don’t have any money sorry guys, we are paying you late. Like more important than anything else, we’re making sure our staff and our team and you know whether they’re locally or out-of-state, we want to make sure people are paid like that was- that was one of my biggest fears. I never want to be in the spot of hey, we can’t pay you or hey, you know we’re going to be late on payments to you. Like that’s- it’s I just want to be able to take care of people the way that they should be.
David: Yeah, I love that too. Because that is- that’s taboo. That’s- that’s the first sign of really bad decline right there. Because your people are your most important, not just assets like that’s who you work with, I mean those are people’s lives. You just don’t mess with that, so I love that too. Coming from him like- yeah, and you know it maybe it was irresponsible, but then you took charge and did something about it. It’s like- that to me you know that’s when you see the business owners really take off they- because they’re taking responsibility for what really needs to happen, and I love that mindset too. About making sure that the people are not fully paid, but they know that- that you care. Like that is a huge thing. They know that you care because you implemented this system that wasn’t just for you guys to get paid. That is be consistent for them too.
David: It just gave your whole team that confidence, so I love that. So let me ask this question. Probably our final question on profit first. What’s the most important thing you’ve learned through implementing profit first? Would you- would have one that kind of stands out from all the rest?
Cody: I would say that it’s just staying consistent with it, just you know, putting the plan in place and staying consistent with it. You know we’ve made some of our- our little tweaks here and there with it you know I- I like it as a blueprint you know we- you know like the dates that we pay from it you know we’ve set up our case little bit differently, but you know just a couple of little tweaks here and there. But overall, you know I would say it’s just the consistency and doing it is the biggest thing and then you know one thing that just was like a whole paradigm shift was like our company’s paying our personal taxes like not even having that go to ourselves, and then we pay-
Cody: It’s just another company tax account for each company and that you know cruising the tax savings, so it’s just okay our taxes are paid, and you know having all team members on the system Profit First just as far as our bookkeeper understands profit first. We would not go with accountants that did not understand and support Profit First. If they had any apprehensions about it, you’re not our guy, on you go.
David: I agree.
Cody: So you know it’s just we only allow people that are in our financial world that understands Profit First. Even our banker- we have a banker at Chase that- that you know originally wouldn’t accept any- he wouldn’t let us open up as many accounts. I’m like, no we need- we need these accounts they have to be made, and he’s like, no, we can’t do that like you could just use this saving. I’m like, that won’t work for me. I’m going to a different bank, so I was just- you know that we found someone else that-
Cody: you know, would do it and so and then we have so many freaking bank accounts we have to change now-
Cody: But it’s great because you know just all the money has a place to go, it all has its own home of where it’s supposed to go and when it’s supposed to be taken out. So it’s just our bankers are onboard with Profit First, our bookkeepers onboard with Profit First, and our accountants are onboard with Profit First. So everyone’s an alignment, and me and Pace are on an alignment with it. Every new business we start immediately gets those accounts.
Cody: so they know they have all their accounts, and then it just starts from the beginning, and now our new businesses are a lot healthier. Like our wholesale business, it took months like where we’re finally at a point where it’s like very- it’s like cleaned up. But it- but it’s taken like five-six months or like our new businesses are healthy from the beginning because we implemented the right away.
David: Awesome, I love that. That is so great. That is such a great take away for if you’re on this too like it doesn’t matter where you’re starting if you’re first starting out or if you got 500 doors there or you’ve got 5000 deals under your belt. You need this system to help you, and I love what you said; everyone’s on board with it. That makes for a winning combination. I mean, like to know that the money is being managed correctly and that everyone understands and agrees with it too. that was- that was awesome. So that was kind of like my last question was going to be anything else you recommend or encourage investors to do with their finances or with like with Profit First, but that was basically the answer to that question. Unless you had anything else like that to say there?
Cody: I would say as far as when it comes like to your personal- your personal finances, like having a plan for that. Because Profit First is like for your business. so it’s like you have your business and I have a very detailed plan of like how my personal expenses run then you know kind of where I got- a lot of like the personal side of my expenses and you know management it was like T. Harv Eker if you had read Secrets of a Millionaire Mind.
David: Yes, yup.
Cody: So you know that’s where I got my personal management of my money from and so you know having a plan for that too. Because being a great steward of your business’s money is great, but then once it gets to your personal account, what are you doing with that? Are you saving anything? or are you spending everything? Or are you putting money away for, you know, future investments? For yourself, you know future purchases? So having a good plan with- with your business’s money and your personal money too. Don’t forget about the personal money.
David: Yeah. Awesome for sure. You definitely don’t want to forget that. So the last- very last question I have. Is there any way that our listeners can provide value to you? You’ve brought insane value here on the episode. So is there any way our listeners can provide value to you, Cody?
Cody: I mean, as far as- you know, some of the things that we’re working on like one of ours you know one of the things that we’re most excited about is we have a company called vahub.com. And we- you know we built that up, and then we just mastered virtual assistants like virtual assistance like virtual assistance run. Like I have over 20 virtual assistants that run like freaking so much of our stuff.
Cody: Within our different companies and so you know we’ve really got that down, so you know we- we help people source you know virtual assistants for Universal for cold calling or texting or admin management for their- their business. Whether they have a small business or it’s a real estate business or whatever that looks like and then you know, I think Pace talked about bookkeeping too. So you know we- we really kind of put that together for investors, and you know that’s just- it’s like another hack. It’s like Profit First is a hack and having a virtual assistant is a hack too. If you have the right one, you know it’s- it’s a game-changer and so in our case, the right 20-something.
David: Right? Exactly. No, that’s awesome. So that was vahub.com if they wanted to get a virtual assistant?
David: I can- yes, we have. I think right now I have like six plus like another team too, you know like that we’ve hired like as a third-party contractor who has their own team too. So I am definitely on a virtual assistant- you know on that train because you know they’re just like you and me. They are just another person, and if you find the right person-
David: -for that seat. You’d be able to run circles around the wrong people who might be local to you.
Cody: That’s exactly what I talked to a lot of people. They’re like, oh, they can’t do it as good. I’m like, you kidding me? You can’t even find people that can do it good here. At least my virtual assistants are consistent.
David: Oh, that’s great. Yes, if they’re going to be bad, at least they’re consistently bad. No.
David: I totally a hundred percent agree with that. I’ve had virtual assistants basically- honestly, the guy that I started working with like six years ago now inside of the real estate company where we were doing a bunch of deals is now like a part of the leadership team on- on SimpleCFO. Like I’ve been with him, and he’s been with me for six years. So like when people say, oh they can’t do this, they can’t do that. I’m like, well then no know that’s you, not them.
Cody: Some of them are better than me at doing different things.
Cody: I’m just like-
Cody: I’m just like that went great thank you so much.
David: Oh, yeah, exactly. I totally a hundred percent agree with that. So vahub.com, that’s where they’ve got virtual assistants, and that was a huge plug here too because I definitely love the virtual assistant world. I love the people that we work with that are virtual assistants, but they’re basically just like this they’re on zoom, and I mean they’re just- they’re just a screen away right now.
David: And then so I- vahub.com. Cody, thank you so much for being on; you’ve provided a mass value here. I’m sure our listeners are very appreciative too. So thank you so much for being on, man.
Cody: Yeah, definitely happy to be here; it’s a lot of fun, thank you.
David: Thanks, everyone!