From Burnout to Business Freedom: How This Couple Built a Real Estate Accounting Empire

Melissa Broughton (00:00)
I

made the mistake. I’ll just say this. I made the mistake of reaching out to the office, checking my voicemail and the, you know, the proverbial poop had hit the fan and like it was everything.

It was the person who was supposed to fill in for me never showed up.

My boss, the owner of the company, had ⁓ taken money out of our payroll tax account and used it to buy some equipment. And when they went to pull payroll taxes, the the payroll tax payments didn’t go through. So he was getting, you know, the angry calls on things.

And it w you know, it was the ⁓ just getting screamed at on voicemail.

And at the same time, I’m looking at my husband who’s just sitting at the bar, not a care in the world, you know, drinking a pina colada, enjoying everything. And I’m starting to feel more and more resentful of this person on the phone who isn’t even appreciative that I took the time out of my vacation to call to check in on.

his business, not my business, his business. And so it took about 30 seconds and I quit. I mean I just quit my job on the spot.

Issa Hanna (02:50)
Welcome back, everybody, to another episode of the Real Estate Pro Show. I’m your host, Issa Hanna, and today we have some busy bees. People have made their mark in the advising and accounting industry and also created a buzz in the rental industry. Ladies and gentlemen, I’d like to introduce Eric and Melissa Broughton. Eric and Melissa, welcome.

Melissa Broughton (03:11)
Thanks, Issa

Eric Broughton (03:12)
Thank you, thank you.

Issa Hanna (03:14)
Glad to have you guys. I’m so glad. ⁓ so for people watching at home, ⁓ give us a brief rundown on on what kind of business you guys are into. I know you guys have had rentals in the past and now you guys are more focused on advising and accounting for real estate investors.

Melissa Broughton (03:31)
Yeah, so so you know, had had rentals in the past learned a lot. I mean, nothing like being up to your neck in rental properties and tenants and learning ⁓ what works and what doesn’t. So we we definitely learned from the I’ll say the school of hard knocks. That’s what my that’s what my dad would have said, right? ⁓ but what we what we really started to notice was that our

learning curve was no different than a lot of others. And so when we were ⁓ when we were in the learning phase, ⁓ we, you know, we started to travel to there’s lots of educational seminars that are out there. And we traveled to quite a few. I mean we’ve gone as far as we’re in Sacramento, we’ve gone as far as to Atlanta. ⁓ we’ve

Done a few in Colorado. I mean, we it’s it’s given us opportunity to travel a bit. But what we noticed was that there was, there was a lot of like, I’ll say, you know, rah-rah. There was a lot of excitement. And you’d leave the weekend or whatever, you know, the day, and you’d go, What did we really learn? I mean, we met some vendors that were interesting and we got really fired up.

And we had, you know, maybe fun in a hotel room or something like that. But what in truth, what did we really learn that was useful that could be taken away? Like and and then we started to poke holes in it because we’re educating ourselves.

And we’re going, wait, why didn’t they talk about this? Why didn’t they talk about that? I mean, to me, the 750-hour rule should be like that. You could take up a whole weekend in that. And it’s never talked about. And it’s never even mentioned. And, you know, I mean, the other thing from the bookkeeping side of things, why isn’t it mentioned that ⁓ that, you know, if you have multiple properties, that you should keep separate accounts for each of those properties? That makes me crazy.

And I’m sure from a tax preparer’s perspective, Eric, that makes you a little bit crazy too when people are kind of moving money all over the place. It makes it a little bit tough for you to do your job. But we started to see, ⁓ we started to see holes in the training. And so we looked at what we had learned from our own kind of self-educating and our, you know, accounting backgrounds and started to fill in the holes and started to offer that.

you know, that advice or those suggestions to our current clients. And then those clients began to refer other, you know, other clients. And so we’ve being in the business and being in the industry for 10 years, right? We’re celebrating our 10 10 year anniversary ⁓ three days ago was officially 10 years. So we’ve seen a lot of changes in the market as well. We’ve seen the market be at a low where there were some great deals to be found out there.

We’ve seen the market go incredibly high where it looked like ⁓ there were no deals to be found. And then, you know, we’ve seen it when things have kind of ⁓ kind of stabilized, I would say. And it’s ⁓ it’s it’s certainly been an exciting journey, I’ll say that.

Issa Hanna (06:48)
You know, I wanted to back up just a little bit for those of the people ⁓ watching at home that don’t know ⁓ the seven hundred and fifty hour rule, break it down a little bit so that, you know, somebody can understand it.

Melissa Broughton (07:47)
Sure.

Eric Broughton (07:49)
So the 7750 hour rule is that is is the IRS’s designation of whether or not they consider you a real estate professional without licensing. So if you can show through use of calendar, ⁓ email correspondence, things of that nature, phone call logs, whatever you may have, that you have put in 750 hours, which comes out to be about 14.5 hours a week.

To in in in management, scheduling, conflict resolution for your rental properties, then the IRS can consider you to be a real estate professional that immediately moves you out of the non passive or passive into non passive. So that means it goes from being a loss. If you have a loss that you then have to carry to the next year, well, now it becomes a loss that you can immediately use.

And and a lot of people take advantage of this with like Airbnbs and using short-term rental. But you can also have long-term rentals and qualify for it. Because it’s the entirety of your pro of your portfolio that requires the 750 hours of management, not just one property. It’s the entirety of your properties. Because when we jumped right into it, we went from having zero doors to having eight. And so

That was a small transition for us. We went from having zero to eight. And that in 45 days. So there was a lot of learning to be had. There was a lot of complaints that were already be are already on the table that we then had to reach out and say, okay, well, we’re the new guys. Let us take care of you. And they’re like, new guys. Well, we also need this, this, and this done. And new guys, we were like,

Issa Hanna (09:18)
Quite the job.

Eric Broughton (09:40)
⁓ sure, not a problem. Next thing you know, we start seeing our reserves starting to disappear. Why? Because we’re eating it up in all these small bites, resolving these small issues. Some of them were inflicted upon the property by the tenant, and some of them were just, you know, as time goes on, things need to be fixed. So a lot of learning to happen there. But on the 750 rule, to be specific, it is an IRS designation.

Of whether or not they consider you to be a real estate professional without a license. Because if you’re licensed in your state, then you automatically qualify for real estate professional. Yeah. You’ll you’ll well, you have the licensing and then you also have the requirements of being in that, but you also then have the continuing education for your licensing and stuff like that. So that’s kind of how they qualify it. And it’ll let you ⁓ jump the shark, so to speak, especially with your long-term properties. I mean, I mean.

Issa Hanna (10:19)
Right. You’ve got the hours.

Eric Broughton (10:37)
I gotta say, going from zero to eight doors, we hit that seven, we hit that fourteen point five hour mark a week real fast.

Issa Hanna (10:47)
Definitely. And you guys learned. And you guys learned. Yeah, you guys learned the hard way. ⁓ so you learned a good lesson. so ⁓ give us a little bit about the origin story of the Busy Bee advisors. How did you guys start? How did ten years ago we’re we’re on the ten year anniversary? How did it all start?

Melissa Broughton (11:07)
So I, you know, I I actually started the company. ⁓ I was working as a controller for a manufacturing firm. You know, the the joke is that as you ⁓ as you work in corporate America and earn more money, there is not more free time, there is not more work-life balance, there’s actually more demands. So as we are raising a family together,

and living life on the, you know, on the on the personal side of things and and and just getting through the day to day, my demands at work just kept getting more and more and more.

And I was really starting to get frustrated, starting to feel fed up. I mean, it never felt like there was enough time for anything. I felt like I was being pulled when I was at work to put more time in. I felt like when I was at home, I just I missed my kids all the time. I felt just sick about having to, you know, grovel and ask for permission to get time off to go to all of their things, right? And as the parents of two boys, we’ve learned.

That the way to successfully raise two boys is to keep them busy, but that meant that we were pretty busy as well. And so ⁓ you know, I’m not sure what came first. I think that my wonderful husband was starting to notice that I was ⁓ that I was ⁓ you know approaching burnout pretty quickly.

And so for one of those, I’ll say milestone birthdays. I’m not going to say which one, right? Because I don’t want anybody to do age math. I’ve hit that point where nobody gets to do age math anymore. ⁓ so he surprised me and you know, and took me on a cruise for this milestone birthday. And while we were on the cruise, you know, it was 10 day cruise. Obviously, I had let my job know I was going to be gone for 10 days. we were, you know.

To sea for three days. We get to port in Mexico. It was just so beautiful. We stop at a bar at a hotel that I had gone to ⁓ growing up. So there were lots of memories coming up. And I was so excited to show ⁓ show my husband where I had gotten to go to as you know as a kid and a teenager. And

I

made the mistake. I’ll just say this. I made the mistake of reaching out to the office, checking my voicemail and the, you know, the proverbial poop had hit the fan and like it was everything. It was the person who was supposed to fill in for me never showed up.

My boss, the owner of the company, had ⁓ taken money out of our payroll tax account and used it to buy some equipment. And when they went to pull payroll taxes, the the payroll tax payments didn’t go through. So he was getting, you know, the angry calls on things. And it w you know, it was the ⁓ just getting screamed at on voicemail. And so I I reached out to my boss, who was the owner of the company directly, thinking

At the time that I could kind of, you know, settle his nerves and it would be fine. I mean, I guess that was my thought process. And at the same time, I’m looking at my husband who’s just sitting at the bar, not a care in the world, you know, drinking a pina colada, enjoying everything. And I’m starting to feel more and more resentful of this person on the phone who isn’t even appreciative that I took the time out of my vacation to call to check in on.

his business, not my business, his business. And so it took about 30 seconds and I quit. I mean I just quit my job on the spot.

And so I, you know, I I on the spot walk away from a six-figure salary and I look at my husband and you know he goes, That’s that’s cool. We can we can we can get through this. I think actually his exact and I can finally say this without

Crying, hopefully. ⁓ his exact words were, I, you know, I can do poor, kind of a thing. Of it was like this quick phrase of we can get through this together. And so we ⁓ we got home. I I had all of my stuff from my job that had been shipped back. there was no love lost between my previous employer and myself. And ⁓ I had

This beautiful summer that was ahead of me to enjoy spending time with our boys. Like I had it was time, it was wonderful. And so enjoyed the the two months that were remaining of the summer. And you know, at that point, like you prepare for things. We prepare for things, but I don’t know many households that are set up, even with a healthy savings plan, that are set up for one person to not work for months, right? So

Two months go by and we’re hitting this, like we’re okay, but you really need to, you know, he’s in his wonderful way saying, Hey, you really need to go and figure out what your next plan is. You know, you’ve got to get your resume out there, find a job, kind of a thing. So I ⁓ I say to myself, you know, I remember thinking, okay, I’m gonna drop the boys off at school, first day back at school, and I’m gonna go for a run and I’m going to clear my head.

And figure out what’s next for me. Because what I felt like was if I went and just put a resume out there, I wasn’t worried about finding a job. ⁓ that has never really been with my qualifications. It’s never really been a challenge. But what I felt would happen was that it would just be like the same movie with different characters. It would be the same frustration, the same challenges, the same, you know.

Who am I going to get along with? How is it going to be to interact with the boss? What secrets does this company have? Kind of a thing. And ⁓ so I go for a run. I’m about three, four miles, I would say, from our house, and leaves had started to fall. ⁓ well, with those leaves, there was ⁓ a little bit of an uneven section of the sidewalk that I didn’t see. And so at full sprint, my foot planted into the curb and

You know, there’s this reaction people are supposed to have where you put your hands out. Well, apparently I don’t have that. So I face planted at full sprint and I broke my jaw. I shattered, except for my top and bottom four right in front. I shattered every other tooth in my mouth and ended up. I mean, thank God for neighbors, ended up having a neighbor pick me up because she said I looked

Like, I don’t even remember the walk home. She said I looked like I was a zombie. I mean, I was just my face was covered in blood, my shirt was covered in blood. I’m holding something in my hand. I’m holding literally my teeth that I’m spitting out in my hand. So she calls him, he comes home. ⁓ we, you know, now have a a dentist who is our best friend because we’ve at this point ⁓ ended up with what we

I’m sure we purchased at least a boat for him, maybe paid off his second.

Eric Broughton (19:53)
Summer home. A summer home, deposit on a summer home.

Issa Hanna (19:58)
Yeah, they they can definitely get expensive.

Melissa Broughton (20:01)
$90,000 in dental bills. So not only was it that, but it was the eight weeks of recovery time before there was even any ⁓ any hope of me going out and finding a job. So by that point, we’re at the like the emergency bells are financially kind of going off for us. And I will say there’s this interesting thing that happened.

Issa Hanna (20:04)
Goodness.

Melissa Broughton (20:30)
When we’re forced as adults to be fully just to be still, there was nothing else I could do. There was, I had to rest. That was my job. I had to rest. And so I rested, I recovered. And during the recovery, I spent a lot of time thinking about living a life of intention and what I wanted. And what I wanted was.

You know, I I remember coming to him and saying, I and gosh, I remember the exact moment we had just had breakfast, the kids weren’t with us. And I said, Okay, here’s what I want to do. And I I tell him, I want to start a bookkeeping business and ⁓ I don’t want to go and work for another, you know, for another company. And he says to me, he says, All I need you to do is bring in $2,000 a month. And at that point, we had, I had like,

I had two weeks. I gave myself two weeks to make this thing a go or to give up and just find another job. And so on day what 11, I landed my first client and we really took off from there. and started it as a bookkeeping business. ⁓ hired my first employee ⁓ two weeks later, and then that was in 2016, and then in 2018.

I am having dinner with my husband. And I look at him and I say, okay, so I think you should quit your job. I think you should go back to school. And I think you should come and work with me and let’s see what we can do and how we can build this thing together. And he ⁓ he surprised me and he said, Yes. ⁓ the timing, if anybody’s thinking about what happened right after that, 2019, we went into the pandemic.

where the whole world was ⁓ totally confused as to what was going on, but the timing was kind of perfect and we’ve we’ve created just this amazing company together since then. So that’s our that’s our backstory. It’s a pretty good one.

Issa Hanna (22:38)
It’s a it’s definitely a great story and Eric, what a supportive, caring husband ⁓ you were. And ⁓ it’s definitely like a come up story, you know. You guys had a nightmare with with your with your employer, you decided to have the courage, a little bit of it was liquid. but you know, you you decided to go into business for yourself and and here you are ten years later, ⁓ as a power couple. So

Super, super ⁓ excited for you guys. Now, with that, what does the future hold for Busy Bee and the Broughton family?

Eric Broughton (23:18)
I think the future that we have going forward is that in part we still have two halves. We have the proverbial Chinese wall in the middle of our business, where we have tax and tax advisory services, and then we have bookkeeping, and then we have audits that Melissa likes to do still. you know, tax you know, bookkeeping projects and stuff like that. We’ve we’re 100% remote. The benefit of that is that Melissa has started this thing where she helps.

other people kind of start their their own home-based bookkeeping business. But then we keep them on as a potential bookkeeper to help us with our workload. And so now we’re starting to create this network of not only financially becoming financially independent, ⁓

Contractors, but then those contractors are developing their business model based upon what Melissa built. So not only do we understand what they’re doing, but we understand their business model, we understand their education, and we’re starting to grow our bookkeeping network across the United States. So then when we get a client that says, Well, I kind of want someone local, like, well, where do you live? Well, he says, Well, I live in South Dakota. We have someone in South Dakota. Well, I I wanna I wanna work with someone that’s in Australia or with in Alaska.

We have someone that’s in Alaska. And so we have bookkeepers that are saying, and now those bookkeepers are starting to get more and more interest ⁓ at the at their local level. And then that’s starting to bring potentially, and some of them have already started to bring tax clients to talk to us. And so now we got tax clients that are being brought to us while we’re bringing in bookkeeping clients and we’re we’re pushing out work to our network. Our network now is starting to bring tax clients.

to us to have conversations with ⁓ in regards to strategy and and you know the filing of taxes and stuff like that. And that’s expanded our business ⁓ outside of just paying Google ads, right? Now we’re getting word of mouth from our network that that Melissa was responsible for developing in the first place because she wanted to take what she did at our kitchen table, making just $2,000 a month to the house, bring home $2,000 a month to the house, and we’ll make it work.

She’s now bringing that option to other moms and dads that are at home.

Issa Hanna (25:41)
Wow, how how innovative you guys are. And perfect segue to my next question. ⁓ Eric, you could go first and then Melissa, you could chime in as well. ⁓ for people just starting off ⁓ in in the investment field or or maybe just in the professional business as well, what’s your advice on growing your relationships and and your sphere of influence or or your you know your network? ⁓ if you can share a little bit with our viewers.

Melissa Broughton (26:11)
Go first on this because I love that question. I think your question actually answered your question. So, your the key I think with anyone who is looking at starting a business or even more importantly, becoming a real estate investor, one of the things that we learned very quickly was having that that toolbox of contacts.

was the most valuable thing we could have had. I mean, it was truly more valuable than the, you know, the pre-qualification letter for a mortgage for the next property we wanted to buy. Having that awesome, you know, handyman or general contractor, having that mortgage broker, having that real estate agent who are paying attention to the trends of what’s going on in your, you know, the community of where you own properties, deciding on if you

Want to utilize a property manager and having a good, ⁓ you know, trustworthy property manager. I mean, a good contractor, I’ll say this: a good contractor is worth their weight in absolute gold. Because let me tell you, we’ve had some bad ones. I’ll I’ll I’ll segue to this. Probably the worst thing, you know. So we have eight doors. Eric’s very handy. I would not say I am. I mean, I can hang a picture, but that’s probably the limitations of it. I can paint really well though.

So we hired a handyman to change some locks on the doors, right? And we get out there to look. He had installed all of the deadbolts backwards.

Issa Hanna (27:49)
My goodness.

Melissa Broughton (27:49)
So you walk up and there’s the lock to the deadbolt that you can turn and then go into the house. So having that that that toolbox of professionals, I think, is key. And and I will say just to ⁓ you know, I I don’t know, not necessarily to pat us on the backs, but having a tax professional that has conversations with you as the events are happening.

Is so huge because when you can get to the point where you have that trust and you can get, I love it when we get questions from our clients of I want to do this, tell me how to accomplish that, and not you know, get absolutely hosed on taxes. There’s a not not a lot we can do after the event has happened, but if we’re able to have that conversation with somebody before.

Or as they’re thinking about doing something, or as they’re making a decision if they want to, you know, use one property to be able to leverage it to buy another or three properties, we can have that conversation with them of what that looks like tax-wise. Because if you look at the full financial picture, taxes are a huge piece of that. And

being able to have that conversation with somebody is ⁓ is is quite a big deal. So that would be my answer to the question.

Issa Hanna (29:15)
Eric? Anything? ⁓

Melissa Broughton (29:19)
I

think I stole all of his answers.

Eric Broughton (29:21)
I think that I think I think one of the things that people that just to kind of expand upon the last part that Melissa said is that there are so many re investment programs that are out there that talk about a lot of the do’s and don’ts. And I think it’s a to a degree it’s somewhat of a disservice to not also educate them about tax liability in regards to now being a property owner, to being a landlord, whether it be, whether it be ⁓

A residential property or commercial property, right? what are the reasons for? And finding someone that you can communicate with and not just during tax season, please talk to your tax person outside of tax season. And here’s the reason why I’m a tax person. And when you ask me, hey, how do I reduce my taxes? I have an email that I save as a draft that I cut and paste and send to anybody that asks me that question. Why? I’m in tax season.

I’m making 60% of my income right now in the next 90 days. Leave me alone.

Issa Hanna (30:25)
Definitely.

Eric Broughton (30:26)
If you want to reach out to me in June, I’ll have a two-hour conversation with you and I’ll only charge you an hour of my time. Why? Because I’m not trying to make 60% of my yearly revenue in this small window. I’ve I my office hours during that time frame might be from 11 to 2. So

Issa Hanna (30:49)
Well, perfect segue actually. ⁓ if people did want to speak to you guys year round, how could they get a hold of the Busy Bee advisors?

Eric Broughton (31:01)
Visit

busybeeadvisors.com

Melissa Broughton (31:03)
Yep. They can schedule a call directly on our ⁓ on our website. Makes it super easy. There’s no ⁓ there’s no obligation. If you just have some questions and wanna, you know, wanna pick our brains, happy, happy to have the conversation with you. So

Eric Broughton (31:22)
And on our website, we’ve got tons of information. Not only that connects you to a service that you may be looking for, or maybe you don’t have a real good idea of what you’re needing, but you know that you’re spending too much time working on your books and you need to get that time back because your time is either how you make money or how you live your life. You want to spend it with your family, or do you want to make some sales? Well then free up your time, have someone else do your books. We explain that there.

If taxes are an issue, you’re like, I I I’m I’m in this and I I I’m doing great. And then all of a sudden I get a tax bill and I’m like looking at a $25,000 hole. And it’s like, okay, well, what could you have done in advance? Were or can we take a look back and see what you did do to see if there was some some things that you may have missed? Right. And these are all things that we kind of explain. And we also have links to our podcasts that we do.

That kind of go over some of this information about ⁓ S Corp ownerships and sole proprietor versus S Corp. Which one is better for you? Kind of a thing. So having us, you you go to busybeeadvisors.com is an opportunity for you to answer some of your questions that may have be that scratches the surface for some other much better questions that immediately have benefits for you.

Issa Hanna (32:50)
Perfect. So busybeeservices.com ⁓ I’m sorry. I’m my my bad. busybeeadvisors.com Make sure guys check them out. Melissa, Eric, I really enjoyed our conversation. And if our viewers enjoyed this conversation and want to see more conversations just like this, make sure to hit subscribe and like.

Melissa Broughton (32:53)
busybeeadvisors.com