Ep 344 - Our Succession Plan

This topic came up because of what happened with Dani’s mom on Thanksgiving Day. Anytime something like that happens, you always think about how life is short. And that is not a statement that you get reminded of everyday. When this happened, one of our Investor Relations, Ben Katt, suggested we should share our succession plan to everyone.

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What we've done in our estate planning documents is we are passing the company down to the leaders. Right now, it's one leader in particular, because she's the one that's been with us for over a decade now. Her name is Tina Howard. She is our COO, she pretty much knows everything you can know about the companies as a whole. And we figured no matter where we were in the business because of her longevity, her dedication and commitment to this team is very similar to ours. So it’s somebody that we knew that was going to be with us always and so right now our estate planning documents everything goes to her and then she chooses what happens based on the team that is currently in place at the time of our passing. And eventually, once we have a solid C-Suite of employees, who are running the company and are there for life, not everybody's always there for life, we will continue to expand that estate planning document to add more people in there. And we've got attorneys that we work with. We just hired a team of attorneys and tax advisers this year, who are all looking at everything that we do. So happens to us today, everything's fine.

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Transcript

Hey everybody! Flip and Dani here, founders of the Freedom Real Estate Group Family of Companies, and welcome to another episode of our podcast, which is called Freedom Through Passive Income. That's right, and welcome to another episode. And this is, this episode is called "Our Succession Plan". That is right. 

So this came up because of my mom, having to go into the hospital on Thanksgiving Day. And this has happened now twice for me, where my mom has been rushed to the hospital, the first time this happened was much more scary. She was in the ICU for a very long time, there was a lot of talk about this being you know, the end. But this time, she had a seizure, went in the hospital, lots of different things about her knee surgeries. And ultimately, she's just not able to walk right now. And so that's why I flew out this time. So not necessarily a scare of death. 

But anytime something like that happens, you always think about, oh, you know, crap. You know, life is short, you don't, it's not part of your every day. Life is short, that statement is not a part of your every day, it is a part of your life very blatantly. And when something scary happens. And so when this happened, one of our Investor Relations guys, Ben Katt, to you guys who have seen on the podcast, we've had him here on this podcast, he had sent a message saying, hey, hope your mom's okay and everything. And he said, in light of that happening, I think it would be really important for your investors to hear about your succession plan. And maybe you've done this already. But if you haven't, you know, the things that you might want to cover are x, x, x, x, and I actually didn't even print those notes out. So Ben, I apologize in advance if I don't cover everything. And if I don't cover everything, you can tell me to do a part two for the succession plan. 

But I mentioned that we did, right? We did a recording where we brought all of our estate planning documents into the podcast room. And we talked about all the things that we've done, to set ourselves up for in case anything happens to us. So I let him know I said, Hey, this has already been done. But it's never a bad idea to do a refresher of it. Just to remind people that this is important to us, as well. And so I kind of want to talk about that. And I'll let you kind of share it Flip. Because a lot of this will be me talking through, you know, the estate planning and our vision and everything. But we've always said our vision, our passion is for the team, right? Which prioritizes things like this when it otherwise wouldn't. So if you want to share anything, you know, from your point of view of why we prioritize things like this, maybe sooner than anybody else would, as we built these companies. I think that you know, people would love to hear your point of view as well.

Yeah, well, I mean, it's pretty simple. I mean, we can make this one of the shortest podcasts ever. I mean, you know, if anything were to ever happen to you and I everything goes to our dog Bailey. Okay, just kidding. But no, this was important to us. And it was, it wasn't something that was on our radar. I mean, because it's just not something that, you know, as you're, as you're an entrepreneur and building up, you know, doing your thing. You know, no one stops you halfway going, Hey, I know what you're building. But do you have a succession plan? Uh, what for? It's still building, I'm not done. They're still building. Yeah. And so it was actually brought to our attention a few years ago. And so that's what really kept the ball rolling. And that's when we just only touched the tip of the iceberg for that, and we're like, we need to cover everything. Yeah. And, you know, yes, because we don't have kids, and we're not going to leave our stuff to our golden retriever. So if, you know, we wanted to make sure that everything was taken care of and then everything like "everything", personal and business. That way if anything did ever happen to both of us that everything still ran, everyone still had a job for everyone, you know that everything just kept moving on.

Yeah. So the bottom line for us has always been that not only our family is important to us, because we've always had life insurance and you know, a will. But as we build these companies, our team is important to us. It is not fair to them that we don't take the time to prepare a plan to go forward. If Flip and I are, you know, both unexpectedly die. It's not fair to them that, what happens to the business? What's the next steps? You know, they didn't take the time to prioritize, you know, the team and the future of the company. So we, early on, we prioritized, you know what we were going to do. And we didn't really have it on paper until we started bringing investors on. And as we brought investors on, the investors became just as important to us as the team. And it was one of our investors that brought it to light that how important it was we do it immediately. Right? I was on the phone with her. And she was one of our big investors, who is loaning us millions of dollars, helping build the business and do deals and things like that. And she said, Hey, Dani, what if you guys get hit by a bus? And we actually did a podcast about that, where we titled it, what if we got hit by a bus? Yeah, so AJ, if you want to, like, you know, throw that link in there, so that people can click on it and watch, listen to that one, you're going to hear more about what we're talking about today. 

And so I said, Yeah, you know, that's a very, very good point. This is what we have in place right now. But I probably should take a look at that and just continue to expand on it based on where we are today. And that's when we went ahead, and we actually got more life insurance policies at that point in time, that would at least cover all of the debt of the company as it was being built. And so that way, when the team took over, then the debt was paid, right? They were there on a fresh foot, right? Not having to pay down the building phase, which every company goes through a building phase, you can build one company at a time, and do it very, very slowly, and scale and make more than you spend, right? But that would take, you know, multiple, multiple, multiple years, we were building five, and we were doing it very fast. So we did have investors who said I love you guys, I believe in you guys, I would love to be a part of this, I would love to loan you money and get a great return. And it was a great win-win. So that was our first step, is just getting life insurance to be able to pay down any debt when we die. 

But ultimately, I think what Ben really wanted us to share was what happens to the companies, who's taking over? Do we have kids? Do we have nieces and nephews? You know, who's in line to take over the companies after we go. And so we don't have kids, as Flip has already said, we've got bulldogs and golden retrievers, and they are not savvy enough to run the company, unfortunately, so. And we do have an extended family. You know, we both have brothers and sisters, we both have nieces and nephews, but they're not in real estate. And they're not learning what we do. And so that's not something either that we're even considering passing anything of the business, or the assets that we own down to them, because they quite frankly, wouldn't know what to do with them. And we want to be very responsible about how we move forward, again, for our investors' protection and for our team's protection. 

So what we've done in our estate planning documents is we are passing the company down to the leaders. Right now, it's one leader in particular, because she's the one that's been with us for over a decade now. Her name is Tina Howard, you'll see her on our websites. And you've probably seen her on podcast episodes with our other five companies. She is our COO, she pretty much knows everything you can know about the companies as a whole. And we figured no matter where we were in the business because of her longevity, her dedication and commitment to this team is very similar to ours. She was the one person that wouldn't be a CEO that was here for maybe a year and then moved on and maybe we hired another CEO to take us to the next level. So it was somebody that we knew that was going to be with us always and so right now our estate planning documents everything goes to her and then she chooses what happens based on the team that is currently in place at the time of our passing. 

Now of course if Flip passes and I don't, then I'm still in charge, if I pass and Flip doesn't, Flip is in charge. Hahaha! Flip will probably ask for help as I do. We both do, we have the entire team really truly leads these companies at this point in time. There is nobody really that doesn't know what's going on, in a particular meaning, let me say this, not everybody knows what's going on for every single company, but every company has people in leadership that knows what's going on on that team. Right? So even FFC as we're building it out or FCI. That's what it's called right now. It's changing the FFC coming to 2023. The Freedom Capital Investments Company, Jody, who many of you know, she has access to everything. She has access to all of our documents, she handles our financial, legal, she has access to our attorneys, everything. Joe, our operations manager is now learning and has access to everything as we onboard him and continually train him up. And the leader of Bulldog Renovations, he knows everything about that company, the leader of IPM, he knows everything about that company. Tina essentially has access and knows and understands it all. So again, that's why we put her kind of at the top of this succession plan, so that it goes to her and then depending on who's in place is how it will stay in place. 

We still have life insurance that we evaluate every single year to determine if we need to increase it or decrease it. What's the debt of the company look like? And that's really essentially it, that goal is that we are training people, we are putting legal documentation in place so that if anything happens to us both at the same time, everything should be able to just continue, there should be no hiccups. Flip and I rarely have to get involved these days, we get involved for key decisions because we're alive, right? They want our input because we're here. But if we weren't here, they wouldn't need to ask us because they could make decisions. I literally sometimes sit in a room and just sit there purposely staying quiet, because I want to hear everybody brainstorm, I want to hear everybody come to a conclusion or decision. And I want to see hey, is that the decision I would have made probably within 30 seconds? Maybe it took them 30 minutes, but they still got there, right? 

And that is allowing and empowering your team to become and step up into that leadership role and gain confidence in what they're doing. Because they can go, Hey, we weren't coming up with the right decisions, Dani was sitting right there. And she says, yup, that's exactly what I have done. Good job. And if I continue to do that, and Flip continues to do that, we just, you know, strengthen the position of our company and the team that's there. So we've done everything in our power to have everything in place. Because that's how much we care about our team. That's how much we care about our investors. We care about you guys as much as we care about ourselves and our own family. So hopefully, that answers a lot of the questions. What do you think Flip, anything to add or anything you think got missed?

I don't think you missed a thing. You know, because it was important, because, you know, we always talk about it, because we don't have kids. This is our family, you know, and that was very important. Once our eyes were open to the whole factor of, oh, yeah, we need to do this now. That's right. That was very important to make sure that everyone's taken care of. That's right. And eventually, once we have a solid C-Suite of employees, who are running the company and are there for life, not everybody's always there for life, we will continue to expand that estate planning document to add more people in there. And we've got attorneys that we work with, we just actually hired a team of attorneys and tax advisers this year, that are all looking at everything that we do and say hey, we could make this a little bit better. Hey, we could make this a little bit better. So if we die today, everything's fine. Everything will continue. As we continue through life, our estate planning documents just get better and better. That's right. So I hope that this answered that question. And again, Ben, I'm sure you're listening to this episode. If there's anything that you missed that you think we should address, just let us know. And we'll do a part two.

Well, we hope you enjoyed this episode, make sure you head on over to our website, www.FreedomCapitalInvestments.com to join the investor club. Make sure you're talking to Ben and or CJ to find out all the stuff that we've got going on at the end of this year, and we already have stuff going on at the beginning of next year. So make sure you're joining that investor club. 

But we'd like to end all our episodes with Invest Smart, Live Happy. Bye everybody!

Nothing on this show should be considered specific, personal or professional advice. Please consult an appropriate tax, legal, real estate, financial or business professional for individualized advice. Opinions and information on this show are not guaranteed, all investment strategies have the potential for profit or loss.

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