From Franchisee to Real Estate Mogul: Michael Kramer's Path to Financial Freedom
Building the Ultimate Team on a Treasure Hunt
Imagine you're the captain of a treasure-hunting team searching for hidden treasure chests scattered across a vast island. Each treasure chest represents a lucrative investment opportunity, such as a piece of real estate or a small business.
The Treasure Map (Long-Term Planning and Vision)
First, you need a treasure map—your long-term plan. This map doesn't just show the location of one treasure; it lays out routes for several years of adventures (your 100-year plan). By knowing the terrain and potential pitfalls, you can avoid dead ends and quicksand, focusing on paths that lead to future treasures.
Your Crew (Vertical Integration and Seven Key Functions)
Next, you assemble a crack team to tackle different critical tasks. You've got experts in navigation (your leadership), folks to decode cryptic symbols on the map (innovation), and others who can scout ahead for obstacles (customer service). This team operates like vertical integration in real estate—covering all aspects to ensure everyone's interests align.
Building the Base Camp (Operational Framework)
Instead of just setting up random tents, you construct a sturdy base camp, represented by the seven parts of the business framework: leadership, marketing, sales, fulfillment, back office and accounting, innovation, and customer service. This base acts as your foundation, ensuring each adventure is well-supported.
Treasure Extraction (Wholesaling and Infinite Returns)
Each time you approach a treasure chest, you don't dig it out yourself. Instead, you negotiate for a share of the treasure map from those who found it first (wholesaling). When done right, you unlock "infinite returns" by leveraging the value of the discovered treasure without breaking your back.
Safety Gear and Adaptability (PPE and New Learning)
Imagine one day, during an excavation, a rockslide occurs, and you lose an eye (the pivotal accident). This incident forces you to adapt by relying on new tools and strategies, much like how Michael Kramer switched his focus to real estate investments. By always wearing your PPE—both literally and metaphorically—you safeguard against such accidents in the future.
Tactical Empathy (Negotiation and Leadership Skills)
Every negotiation with locals or other treasure hunters requires tactical empathy. Employing techniques like mirroring and labeling their feelings helps build trust, ensuring successful deals. Respectful communication promotes collaboration, making it easier to gain access to hidden treasures.
The Daily Hour of Reflection (Hour of Power)
Before each day's hunt, you spend an "hour of power" planning the day's route, ensuring the entire team's well-being. This thoughtful start maximizes efficiency and keeps everyone motivated and aligned with the ultimate goal.
Natural Cycles and Rhythms (Kairos vs. Kronos)
Instead of rigidly sticking to a clock (Kronos time), you follow the island’s natural cycles (Kairos time), attacking tasks when your crew is most energetic and creative. This flexibility enhances productivity and keeps morale high.
Connecting with Mentors (Book Recommendations and Learning from Experience)
Finally, you consult seasoned adventurers' guides, like Zig Ziglar's "Automobile University" and Chris Voss's negotiation tactics. These resources offer invaluable wisdom, helping your team navigate even the trickiest of terrains.
In this treasure hunt analogy, the concepts of long-term planning, vertical integration, wholesaling, tactical empathy, adaptive strategies, and aligning with natural cycles come together to create a successful and enjoyable expedition.
Enjoy the episode!
YouTube: youtu.be/mNtPLGrjSLk
Show Notes: thesocialchameleon.show/michael-kramer
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Key Highlights:
🏘️ Real Estate Insights:
Michael debunks the myth of real estate as a purely passive investment, shedding light on the seven key operational functions vital for managing rental properties. For those overwhelmed by active management, Michael shares the benefits of real estate syndication and expert-managed funds.
🔨 Vertical Integration for Success:
Learn how Michael's vertically integrated operations in construction and property management align interests for better financial outcomes. Discover the cost advantages with their 5% construction management fee, significantly lower than the industry standard.
📈 Infinite Returns Explained:
Michael illustrates the powerful concept of "infinite returns" through smart property management and refinancing strategies. Hear the compelling story of an 88-unit property creating significant equity and cash flow.
🌟 Personal Transformation and Resilience:
From a tragic accident to becoming the CEO of Free by Real Estate, Michael's journey is one of resilience and purpose. His story of recovering from a nail gun accident and shifting from hands-on work to building a $40 million real estate portfolio is truly inspirational.
📚 Empathetic Leadership:
Michael emphasizes the importance of tactical empathy in leadership and negotiations. He shares insights from his co-authored book "Empathetic Leadership," promoting compassion and strategy to foster trust and drive results.
🏡 Generational Wealth Planning:
Discover Michael’s long-term vision with his "100-year plan" focused on generational wealth and family harmony. He discusses the significance of trusts, family constitutions, and intentional legacy planning.
📘 Resource Recommendations:
Michael mentions invaluable books like "7 Generations Legacy" by Rachel Marshall and "The Intentional Legacy" by David McElvaney. He also recommends utilizing apps like Libby and Overdrive for accessing free library resources.
💡 Entrepreneurship Advice:
Get inspired by practical advice on entrepreneurship, including the benefits of buying existing businesses and the potential in less glamorous but lucrative industries. Michael’s personal narratives offer valuable lessons on turning challenges into opportunities.
⚙️ Business Framework Success:
Michael shares a seven-part business framework applicable to any industry, emphasizing the crucial role of marketing and the importance of focusing on one business goal at a time.
✨ Long-Term Planning Perspective:
Learn how having a long-term perspective can filter decision-making, enabling you to prioritize future goals over immediate gratifications.
💬 Communication and Negotiation Techniques:
Dive into the art of tactical empathy with negotiation strategies like no-oriented questions, mirroring, and labeling to build trust and achieve mutually beneficial outcomes.
This episode is a treasure trove of insights and actionable advice for anyone looking to build generational wealth, lead with empathy, or succeed in real estate and business. Don't miss out on this empowering conversation!
Meet Michael Kramer
Meet Michael Kramer, a genuinely inspiring real estate investor and business leader. Driven by a deeply personal tragedy, Michael made a heartfelt promise to change his family's cycle of financial uncertainty. He kicked off his impressive career by becoming the top franchisee. He later ventured into real estate, where he now oversees an amazing $40 million portfolio and leads ten businesses focused on this field.
Michael’s journey is a testament to resilience. After a life-changing accident in 2016, he adapted his strategy and successfully built a portfolio of over 400 residential rentals and 1,000 units. Now, as the CEO and Founder of Freed By Real Estate, he passionately helps others achieve financial freedom. Michael is also an Amazon Best-Selling Author, having co-authored Empathetic Leadership with the renowned negotiator Chris Voss. His insights on 'tactical empathy' showcase an excellent combination of compassion and strategic thinking in both life and leadership.
Empathetic Leadership: How To Build Trust And Drive Results
Empathetic Leadership comes with a requirement to invest time and/or effort to get to know the party you are dealing with. It is not a conduit of assent. Getting to know and learning more of your competitor/prospect/mentee will invariably dictate how strong and long-lasting a relationship you are able to create. This is of paramount importance in developing negotiation skills.
Negotiation requires two to tango and can be used to settle any difference of opinion. In business or public life, whether it is a sales proposal being delivered, a hostage crisis, a training session or other faceoff, the establishment of a bond or trust between two entities involved is essential for achieving a viable solution for both parties.
The establishment of an empathetic relationship does not imply agreement. A zero-sum proposal is not used in an empathetic leader's tool chest. Chris Voss, the acclaimed former FBI negotiator, states that: "In business, Tactical Empathy is the world's great hack for influence and for results." Perhaps you may like to learn more.
Get The Book
Freed By Real Estate
Freed By Real Estate (FBRE) are private equity fund managers headed by a team of experienced real estate owners and operators who primarily operate in the Midwest.
We use a proven investment model which opens a consistent stream to passive income, wealth creation, and a range of tax benefits for our investors. Headed by successful real estate entrepreneur and Amazon Best Selling Author, Michael Kramer, we're dedicated to creating generational wealth through real estate for our investors.
Our team includes real estate professionals with a broad range of expertise, spanning from acquisition and deal structuring, to remodeling and rehabilitation, to property and tenant management.
We negotiate directly with property owners to get better pricing, better terms, and sidestep the competition, often leading to discounts of 20-40% on acquisitions. We self-perform rehab and property management which leads to greater efficiency and owner-level care, helping us to avoid costly overruns, project delays, and third-party management headaches. Our 'Evergreen Money Tree' strategy (EGMT) - which employs a broker-incentive program - means that brokers send us potential deals first. As such, we see more deal flow and can cherry-pick the best deals before they hit the market. This vertically integrated approach enables us to achieve equity multiples that few investments can match, often providing (what we call) an ‘infinite return’ on your investment.
✨ Weekly Challenge ✨
The weekly challenge is to prioritize yourself daily by shifting from rigid scheduling (referred to as Kronos time) to more intuitive, need-based scheduling (Kairos time). He recommends listeners dedicate an "hour of power" each morning specifically for self-care. This practice is intended to help listeners better serve others throughout the day and cultivate a more balanced, fulfilling approach to time management and productivity.
SELECTED LINKS FROM THE EPISODE
"Rich Dad Poor Dad" by Robert T. Kiyosaki
- Context:Michael Kramer emphasizes the importance of generating income through owning income-producing assets before investing in real estate, referencing principles from "Rich Dad Poor Dad."
"Empathetic Leadership: How to Build Trust and Drive Results" by Michael Kramer and Chris Voss
- Context:Michael Kramer discusses co-authoring this book with FBI negotiator Chris Voss, highlighting the approachability and authenticity of Chris Voss and the honor of being part of the project. The book is also referred to in relation to tactical empathy and its applications in negotiation.
"7 Generations Legacy" by Rachel Marshall
- Context:Michael Kramer recommends this book as a resource for those interested in legacy planning and creating a family constitution. He also mentions that the book includes guided questions to help families delineate their core values and principles.
"The Intentional Legacy" by David McElvaney
- Context:Kramer suggests this book to listeners who are interested in the concept of intentional planning to preserve wealth across generations.
The Intentional Legacy Study Guide
The Intentional Legacy Journal
"Never Split the Difference" by Chris Voss
- Context:Michael Kramer frequently mentions techniques from this book, including negotiating tactics such as mirroring, labeling, and asking "no-oriented questions." He also shares personal growth experiences and recommends the book for practical negotiation tools.
"Crucial Conversations" by Joseph Grenny
- Context:Michael Kramer credits this book with improving his communication skills during high-stakes situations, which played a significant role in both his personal growth and business success.
- Context:Michael Kramer emphasizes the value of free resources available through library cards and mentions using the Libby app to access books on phone devices. Tyson Gaylord acknowledges his wife's preference for this app.
- Context:Another app mentioned for accessing free books. Michael Kramer shares his experience of using Overdrive prior to receiving an Audible subscription.
Audible (Audible Subscription)
- Context:Tyson mentions favoring Audible for listening to audiobooks, noting that it offers exclusive content not always available on other platforms. Michael Kramer also mentions using Audible after his wife gifted him a subscription.
Zig Ziglar's "Automobile University" Concept
- Context:Michael Kramer refers to Zig Ziglar's idea of utilizing commute time for educational audiobooks and learning.
www.ziglar.com
Born to Win: Find Your Success by Zig Ziglar
Main Street Millionaire: How to Make Extraordinary Wealth Buying Ordinary Businesses
- Context: Tyson referenced Codie Sanchez when he talked about buying small, boring businesses. This is her recently released book explaining her progress.
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