David Richter of Simple CFO tackles a question that trips up nearly every real estate investor in this solo episode: how much should you reinvest into the business versus take out for yourself? His blunt take is that "I want to reinvest back into my business" is often just code for not knowing where your money is going.

Using the Profit First framework he wrote about in Profit First for Real Estate Investing, David lays out a percentage-based roadmap that works even if you're currently upside down. He walks through knowing what you make, spend, and keep, and how to shift those percentages a little healthier every quarter. If you make money but still feel broke, this one gives you a place to start.

Timeline Summary

[0:25] – The opening warning: if everything goes back into the business, you'll never have personal freedom

[0:48] – Why "I want to reinvest" is often code for spending every dollar and hoping for profit

[1:06] – The goal of a clear roadmap for what to reinvest and what to pay yourself

[1:27] – The core Profit First tenet of running your business by percentages

[1:46] – The first question: do you actually know how much you made last year?

[2:09] – The harder questions of what you spent and what you actually kept

[2:27] – Starting where you can, whether that's a 50/50 or 70/30 split

[2:54] – Why it's so easy in real estate to spend private lender money on the business instead of the project

[3:15] – What to do if you're upside down with no profit at all

[3:43] – The simplest starting move: cut from 110% spending to 99% and send 1% to yourself

[4:22] – Building the habits of a wealthy business owner over chasing more revenue

[4:43] – Improving quarter over quarter from 99/1 to 95/5 to 90/10

[5:17] – Mapping the journey from 110% down to a healthy 70/30 or 60/40 split

[5:38] – Why the hardest part is honestly knowing where you are right now

[5:58] – Using expense analysis and intentional deals to keep more of what you make

5 Key Takeaways

1. Reinvesting Everything Isn't A Strategy — Pouring every dollar back into the business usually means you don't know your numbers. Without a plan to pay yourself, you'll make money and still feel broke.
2. Run Your Business By Percentages — Know exactly what you make, what you spend, and what you keep as percentages. That clarity is the foundation of the entire Profit First system.
3. Start Where You Are — If you're spending 110% and upside down, cut to 99% and pay yourself 1%. The exact number matters less than building the habit of paying yourself first.
4. Improve A Little Every Quarter — Move from 99/1 to 95/5 to 90/10 and keep going. Small, steady shifts get you to a healthy 70/30 or 60/40 split without a painful overhaul.
5. The Hardest Part Is Knowing Where You Are — Most owners avoid an honest look at their numbers. Facing what you truly make, spend, and keep is the first real step toward keeping more.

Links & Resources

• Simple CFO — https://simplecfo.com
• Profit First for Real Estate Investing by David Richter — https://profitfirstrei.com

Enjoyed This Episode?

If David's roadmap gave you a place to start even though your percentages feel upside down, that first 1% to yourself is the move that changes everything. Share this episode with an investor who reinvests every dollar and wonders where it all went, and follow the show and leave a rating and review so more real estate investors can start keeping more of what they make.