How to Grow & Scale Your Real Estate Business | A Plan for Predictable Success

Hey everyone, this is Lars Hedenborg, founder of Real Estate B school and co founder of High Performance Real Estate Advisors out of Charlotte, North Carolina. I've been in the real estate business. Started as a solo agent in 2007, hired my first administrator in 2008. My first agent in 2009. Late in that year in the Great Recession, I went from about 58 sides. Well not about. I went from 58 sides to 118 sides to 178 sides to 248 sides. So three short years I did a 4x plus increase in my business, went on to 3, 10, 400 plus sides from there. Almost 4,000 families served at this point in about 12 years in the real estate business. And I say all of that to let you know I've come up with a sort of micro training here to let you know how I did it and the motivation behind doing it and how you can look at your business so you can do the same thing. We're in unique times and that's an understatement. The trigger for the shift almost didn't matter. Doesn't mean it wasn't a serious deal with the global pandemic. At this point we're just dealing with how do we scale our business and take advantage, quote unquote of what's going on. Agents are running scared, rosters for local MLs are declining and well, if they haven't started already, they will in your market. So what is your plan for predictable success and how are you going to protect what you have, pivot the business and then ultimately profit from what is going on? So we're going to talk about growing your real estate business faster and getting predictable results. I'm going to talk about, and I want you to consider this question as I go through the information here on this micro training. So the question is, do I have a clear roadmap in place to build a profitable systems driven business so that I can experience true time and money, freedom and, and live a life without regrets. When I got into real estate, this was November 2007. I was six, seven months in at this point. I ended up selling, what was it, 27 homes in my first 10 months in real estate. The market had already shifted in Charlotte. I didn't really realize what I was getting into. We hadn't had the big hit from late 2008 yet. I just remember thinking to myself, I got married in October 2006 and I had a lot on the line. I had this new baby I was taking care of and didn't know what I was doing there. And I just thought to myself that this had to work. The reality of it was, you'll notice that my son Anders is a little bigger there and I am incessantly just on my cell phone working deals. So this is in probably 2008, I sold 44 homes as a solo agent, hustling eight days a week, as many hours as it took. Here's the thing though. I realized at this moment that something had to change. Didn't change immediately. I had a mindset shift that, hey, what if I set this thing up like a business where these clients could get served, but I didn't have to be the one to serve them necessarily doesn't mean you need to get out of production by building a business that would allow you to get out of production. It just means you have to think about your business that way. And this is after my daughter Kendall was born. And again thinking to myself, this is go time. This thing is do or die trying. So this is probably May, June 2010, I guess. Yeah. So she was born in April 2010 and this is the site that I would leave to go work on my business after I spent every day, all day long working in the business. So I was a real estate agent by day and I was a business builder, systems implementer, making things easy and duplicatable. At night, I would go up at 10pm, come down at 2 or 3am and and just get after it. So I can't say that it was perfect by any means. My journey was super intentional. And so the growth journey, the growth in transactions, the growth in income came with me working less hours. I'll talk more about the time, money, connection and how we can work that in your favor. So Real Estate B school started in 2013. It was born out of the fact that I failed miserably. It was trial and error. I had a lot of coaches along the way, most of them outside the real estate industry. And it just wasn't easy. And I didn't want others that wanted to go this route behind me to experience the same pain and suffering that I did. So this is April 2014, spring, I think is our first official intensive workshop. And yeah, Real Estate B School was born in 2013 out of that painful experience. The mission Real Estate B School, and even for our time here today, is to help you scale your real estate business through the use of sustainable systems and empower people so you can make more money, enjoy more time off and experience less stress in your life. You're going to hear me talk a lot about time, money and stress. So all that's well and good. My story for why I did what I did and the motivations behind it. The question I have for you and this may be a spot to pause. If you're driving, you probably shouldn't be distracted. Anyway, just pause here for a moment and ask yourself the question what are the top three reasons you you want to build a sustainable real estate business? And when I say the word sustainable I mean that it can have a life without you. It doesn't mean that you don't have a key position in the business. It doesn't mean you don't show up every day. It doesn't mean you can't work with buyers and sellers. The business though is operating as a legitimate business and it has a life of its own. So think about that top three reasons for me it was I wanted to show up as a great dad. I didn't have a great dad. I had a really jacked up childhood alcoholic father. Drank until I was 15. Just wasn't present so I wasn't going to be that guy. And he was a failed business owner as well. Learned a lot from him of how I didn't want to show up in the world. That was number one. I wanted to be an awesome husband as well. And my parents divorced when I was 4 years old so he wasn't able to do that. And I just wanted to have a business that had a life outside of me and those are my top three motivations. And the wealth part was probably a big part of it in terms of generating a massive wealth that I can do good in the world. And so what are the three reasons for you so this is the game that we're playing. This is the game we will always be playing. Maybe how we generate opportunity to have conversations with folks may change. And we have one of the lowest marketing spends, lead gen spends of any real estate team of our size. We run about 3 million GCI. We're under 6% or so spend on lead generation. So we do a really good job with our database. Really good job serving clients. It's all about this five step process. Are you looking at your business in this way? Are you fixing your business with the weakest link that's the farthest to the left? Are you generating enough opportunities? Are you having those meaningful conversations? Are you setting appointments consistently? Are you meeting those appointments? Are they saying yes to become a client of yours? Are you getting them to the closing table where they're not totally pissed at you and then ultimately are they going to just sing your praises forever and always and when they do that, you use what they say back in the front end to generate more opportunity to work with folks. So is this the game you're actually playing? If it's not, you've got to recalibrate how you look at your business. And so ask yourself the question, how scalable is your real estate business right now? If you're a one person operation, the answer is it's not scalable at all. If you have an administrator and a couple buyer agents, it is scalable. You know, you could take that business, you can work the listing side, they can work the buyer side, you can get to 100 to 150 transactions with a four person team. Scaling your real estate business doesn't mean you need to have 20 people on your team. We do about 3 million GCI in a market where the average price point is 275 to 300,000. We have 11 team members currently and so lean and mean operation and everyone knows what they're doing and it's super profitable. So how scalable is your real estate business right now? So here's a blueprint I want to take you through. We call this the Business freedom blueprint. And this is how I want you to forever and always look at your real estate business. So we know the goal. I talked about it in our mission. It's more money, more, more time off, not more time in the business and less stress. So more money, more time to spend doing the things you want to do and then less stress and the focus. We talk a lot about sustainable systems and empower people. So even if your vision is one administrator and a couple buyer agents, you want to get to a million or so GCI that's possible. You want to build a bigger business. It's probably going to take more people than that. Bottom line, if you don't want to work seven days a week and evenings and be the one doing all of it, and you want to actually have a business, it's all about systems and people. So there's four drivers that we'll talk about forever and always. Attracting high quality buyers and sellers, not paying Zillow for leads, not paying for pay per click, not paying someone else to be a better marketer than you. This is attracting business, converting that business to a face to face consultation or a virtual consultation. We've shifted to virtual consultations. Done really well with both in person and virtual consultations. Given the changing craziness in the world that we experienced and then how do you deliver on those promises you make in the sales process? Except you don't have to be every part of it. And that goes for the way your administrators are trained. Listing client care, buyer client care. You're showing agents. When you get to the point where you have more business than you can manage, you can hire someone to show homes for you that will do it better than you do because they actually love doing it. And so think about how you can deliver on the promises without doing every part of it. And then we can talk about scaling the business. And I'll go through each of these have. So those are the four drivers. Each of them have three accelerators associated with them. So when I talk about attracting, it's all about database marketing, listing marketing and buyer marketing. And I'm not talking about paying someone else to generate leads. That is the fallacy that's in our industry. That is a complete joke. You know, paying someone for instant offer leads or paying Zillow a 35% referral fee to generate a lead for you. That's not the game that we're talking about playing. It's all about how can you maximize every opportunity, drive your lead generation costs down through attracting versus buying. With convert, we talk about lead management, appointment setting and the consultation process. There are systems, processes, tools, tactics behind all of this to make sure you're managing your leads, you're following up. You have text sequences, email sequences, all of that. A lead management policy. If you have a team and other agents, appointment setting is how do you go about setting appointments, how do you qualify those appointments, how do you make sure they show up? The consultation process is either virtually or in person. How do you sit down with somebody and explain the benefits of using you as their agent in a way where they're willing and just excited to have a real estate agent? We don't get a lot of people that are excited to work with us. Sellers think we're overpaid. Buyers think they can do it on their own. It's this weird thing that exist in our industry. So how do you position yourself and doing all of that without you being the one that has to do it all? Building systems to deliver that sales process and then deliver is about buyer and seller, client servicing, transaction coordination, and the critical technology tools you'll need to scale your business. And when we talk about scaling your business, it is creating your future. Beginning with the end in mind. I have created a three year vision, one year plan and worked in 90 days since 2008. 2008, 2009 is the first time I built a plan that had a three year vision, a one year plan, and then we backed it into 90 days or a quarter at a time. Then, knowing your numbers, what's the easiest way to track in your business? What are the key performance indicators that you need to pay attention to? To be able to push down on the pedal or pull levers in your business, to be able to scale profitably and then growing your team with people that you want to be around, that you want to serve, that you want to feed into, and the process, the ads that you run, how do you contemplate core values and all that good stuff? So that is what we do at real estate B school and that's how I want you to look at your business. This is worth grabbing a screenshot of if you're watching this. The four drivers and the 12 accelerators that you'll need if you want to scale your real estate business. So the question is, how do we get there? It's all well and good that I was able to do it. Still, I guess, the last 2008, trying to think of how long I've been working one day a week. I have my last closing in January 2012. I've been involved every. I'm actively involved, even though I only go there one day a week. So I've been working one day a week for about six or seven years now in this business. So it's a conversation about time and money. So most agents, the only way for them to make more money is to put more hours into the business. I want to go through a concept that I developed called the Business Freedom Index. This is a calculation I went through back in 2007 when I committed to stopping the insanity of doing the 12 different jobs that a real estate agent does to scale their business or to service their business or just to be a real estate agent. And Most of them, 10 of the 12, pay less than 20 to 25 bucks an hour. So I was making less than $20 an hour in 2007 and 8. And then I made this commitment where I'm going to make $250 an hour. I want to make $500,000 working 2,000 hours, which is 40 hours a week. So that's the calculations. The question is, when you look at this calculation, think about where you are now. How much money did you make last year? What was your adjusted gross income on your tax return last year divided by the hours you work? I still do this calculation today. I've been able to move from under $20 an hour to over 500 hour. And I'm coming up on $1,000 an hour. And so there is a way that you could delink time and money and we focus on that a lot. In real estate B school. I'm not going to dive too deep into the different phases of growth. We call this the business growth Navigator. Just know that there are six phases of growth. It starts at survival mode. That's where the industry lives. We work with folks that have already gotten out of survival mode. You have the ability to scale the business and grow beyond yourself. Despite what is taught in our industry. Our industry teaches you that you have to do all the jobs of the real estate agent and be a real estate practitioner and not a business owner. And so we're helping real estate agents make that shift from agent practitioner to a manager, a leader, and then ultimately a business owner. So when you look at those phases of growth, the six phases of growth, and you consider the Business Freedom Index, which was that calculation of dollars per hour, essentially there's something that we've found here for each of the different phases. So I'm going to back up here a second. So in phase one, the start phase, it's typically where the industry lives. Most agents make less than $25 an hour. If you're working 3,000 hours a year, which is 60 hours a week, maybe you're making $75,000 an agent, that's a top producing agent right there. That's top, at least 10%, maybe top 5% in most markets. As you grow the business and you scale, you have the ability to go from this overwork, underpaid, you don't know what you don't know to starting to make a little bit of money. But you're still working way too much. And you can make up to $50 an hour at scale. Money's decent, but time is not your own. And systems are the key to breaking through that hundred, that 50 to 100, then you can get to $250 an hour. When you're leading more in your team, you're likely still in production, but you're leading in the team. So leverage has kicked in a bit and things are going well. And it's really good money. If you want to push through that and potentially exit production. That's where you raise up a couple leaders in the business. One for operations, one for sales. And they start to kind of take over the day to day the business. And then you have the opportunity, if you want to make a shift from Leading in the business. So being the CEO to, you know, probably more the sales leader to being the CEO as you exit production and then ultimately becoming a business owner and working less in that business. If you have aspirations to build something outside of your real estate team, which I did with real estate B school. So that's how we look at how we link the phases of growth into the opportunity financially that you can make. And this shift that we talk about, from agent doing it all to having a few people come around you and hey, let's do this together. To a business owner more CEO, it's this concept of I do it, we do it, they do it. So there are trainings like you should have figured out already before you come to real estate B Schools world, how to get busy in real estate. It doesn't mean we're not going to teach you a bunch of of tactics, tools and systems around building your business and growing it and scaling it. Generally though, you've got that part down. The thing that we are really good at and the thing that you need to focus on is how do you surround yourself with a solid administrator and other salespeople so you can take that next step to we do it and go from 40, 50 sides to 100, 125, 150 sides and then ultimately make the shift. They do it. Someone's going to step up in your world and be able to take over your production at some point. And if you build it on the right economic model, with the right recruiting, with the right people, you can do that in a way where it's super profitable and you can serve your clients at a higher level than you even did when you were in production. So the only thing I have to offer someone who's at the point where they're already like top producer status or you're running a small team. We call it a business growth strategy session. So I love this quote. It says if you want something you've never had, you must be willing to do something you've never done. So the mission of a business growth strategy session, it's just a conversation about where you are, where you want to go and what's holding you back. So it's to help you scale your real estate business through the use of sustainable systems and empower people to, you can get that time money, that time money stress equation. Right. And the business growth strategy session is to arm you with with a clear plan to profitably and predictably scale your business. This is not a sales call. There's no gimmicks or hype around it. If it makes sense to work with us, we will have that conversation. So for most folks, they've got to figure out how to sort of get busy as a salesperson before they can sort of make this commitment to really build a business. And like I said, we're going to talk about three things. Where are you now? Where do you want to be two to three short years from now? And then what's holding you back? And so take the first step and fill out a brief application if that's you. If you're struggling. I know the market is interesting and fascinating right now. If that is, you go to realestatebschool.com there's lots of resources over there. There's orange buttons that say apply now. If that's your next step, you can listen to the podcast over there. You can grab a just all of the resources that we have over there. Just take a look at those. And that's all I've got for you. So keep your chin up, keep slugging. Well, chin up, head down. I want to say keep your head down. Do the things that are going to make you successful. The same things that I did back in the Great Recession of 2008, nine through 11 or so, same activities you got to do today. So I feel jacked up for what's coming with this market, and hopefully you do as well. You be good. We'll talk soon.