Systems, The Not-So-Sexy Side of Real Estate: How to Get Your Models Dialed In w/Dave Friedman

This is real estate Team Builders and I'm your host, Lars Hedinborg, the founder of Real Estate B School. The real estate team building world is driven by big egos who boast about how many homes they've sold or how much GCI they've earned. We don't hear much about their low profit margins, the long hours they put in each week, or the unbearable stress they endure. In fact, I discovered that most real estate teams are losing money when you consider the amount of personal production their owners must do to make ends meet. I believe that if you want to profitably scale your real estate team without working crazy hours, enduring unhealthy levels of stress, or coming up short at home, then thinking like a business owner, building sustainable systems and empowering your team are absolute musts. You won't find any smoke and mirrors or hype here on my podcast, just the real world tools, systems and strategies that work. So if you struggle to balance growing your real estate business with focusing on the areas of life that truly matter, then this show is for you.

All right, so today's guest on the podcast is a guy that I've known for. Feels like a lot of years since like 2000, I don't know, 14 or so. So about six, seven years. I've known Dave Friedman out of Charleston, South Carolina. When I met Dave, he, I think he sold about 60 or so homes.

In the year I met him.

And he was just running a gun and totally sales focused, working too many hours admittedly. And he had a part time assistant. And Dave, how many homes do you sell this year?

You think we're gonna probably finish around 350, 400.

So to what, 6x his business? 6, 7 times his business, but almost 10x's net income. So I know his net income. So this show is not all about the ego driven real estate team where it's all about the top line and you know nothing about the actual business, business operations. Dave is fully leveraged in his business. He's a true business owner. He runs a culturally sound business with the right economic model and he built it on systems. And I think the biggest challenge that a lot of real estate team builders have, and this is why I'm excited to talk to Dave today, is how do you like, what do you consider a system? How do you spend time in your calendar focusing on building systems? Like let's actually deconstruct your journey with an eye toward helping others that are struggling to have a systems focus in their business. And I've said this so often about You. I don't know if you're going to get a complex at some point, but this is the not so sexy side of real estate. So I'll say it again. So, Dave, take us back maybe a couple minutes just on what it was like in those early days in the business and not having systems and being the guy, you know, that was doing everything in the business. And then we'll unpack your journey and how you view systems, how you build systems, all of that.

Yeah, I mean, hey, I think, you know, we all start super busy in real estate and just try to sell as many homes as we possibly can. And I think you had turned me on to a book called the E. Myth, and it just made it really clear that if you want to own a business, you can't perform, you know, all the roles within the business forever. You have to have this, you know, consistent process of identifying a new role and delegating it to somebody else and giving them the freedom to run with it. And so, you know, that also helped us focus on building systems and the importance of it, because we've always been a fan of, you know, especially in the sales world, figuring out what worked really well. And when I was really ready to delegate, you know, buyers to a buyer agent and listings to a listing agent, I wanted to make sure that they could have the same performance and the same metrics that I did. So I knew that I had to have them model exactly what I did. So early on, it was me documenting it, making sales presentations, recognizing what I said that worked, working that into the presentation. So that way, no matter who went on that presentation, they said the same thing in the same order with the same presentation and follow the same cadence and produce the same results. So with that, it built a lot of confidence in the fact that when I had a couple, for example, listing agents working, their conversions were the same exact as mine. Their listing appointments would last exactly two hours, just like mine, and everything just kind of felt the same, and the same results were produced. So we became very model focused. And the reason we found it important to build the system is because we wanted to produce really predictable results over and over again and not lose sight of when things were working well, why they were working well, and how do we replicate that? And so we became really systems focused simply because we wanted to model, like, really good behaviors that produce very consistent and great results.

Yeah. Awesome. So let's break it down. So let's break down how you think about a system. How would you even define a system? Back in the early days, like, how would you define a system? Like, give us a few examples of basic systems that had to be sort of packaged and handed off in the early days when you were going from 60 to 100 plus deals. Let's define a system and give a few examples.

Yeah, I mean, one of the ones I remember was preparing for listings. I knew what I needed to do on that listing appointment and how I needed to present. However, there is all this busy work to prepare for that. And I knew that I could teach somebody how to get all that stuff together for me, but if they didn't do it correctly, I wouldn't be, you know, effective on that meeting. So that was a system that we put into place about, you know, listing a plate in preparation, which included, you know, teaching somebody how to find comparable homes, teaching them how to put it into an equity evaluation, building a cma, and the different kind of reports that are involved, and down to the point where I didn't have to do it or think about it any longer. And when I came into the office, I would come in and grab four or five different folders for the four or five different listing appointments I was going on for that day. I'd walk in, grab them, leave, and I would literally review the information in the driveway before the appointment. And because everything was in the same order with all the same data and all the same information, exactly what I expected, it was very easy for me to within 5 minutes consume it all and know exactly what kind of conversation I needed to have with the person. And it allowed me to get out of that busy work and just go meet with more people.

Yeah, so let's even break it down a little bit further. So how do you have to show up for this person that's your administrator I've always struggled with. And a lot of our folks struggle with slowing down enough to like, it's this mentality like I can do it better or faster or which you can, but then you're stuck in that role all the time. So what was your mindset around the task and how did you train somebody?

What I like to do is there's the I do it, we do it, you do it. That's one thing. And then also I'm really big on screen recording what I'm doing. You know, maybe I'm doing a CMA in the evening and the person's not available, so I'm just going to record it, you know, and recording talk through exactly what I'm doing, why I'm doing it. And there's so much like nuance in how you figure out some of the technical aspects of that. One example that, you know, I would just kind of talk through what I was doing, my mindset on it, you know, how I was solving problems. So that way people can think like I do. And then I would have them either shadow me doing that or send them videos and I'd have them document what I was doing in a process document. And so we have all these process documents that have been created as a result of that. And I would review it, I would go back and look at it and say, okay, it looks like they did a good job. And as I'm looking at it, I think there's a few holes that I see in this where I could put a couple bits of information and over time those documents would grow, they would grow into checklists, they would grow into, you know, FAQs, you know, and things like that. So that way if somebody had to jump into that position that had never had it before, they have all these process manuals on how to do the role effectively.

Yeah.

So.

And you mentioned E Myth and it was like the first book I ever read when I got into business. Are you naturally. So for those of us who maybe. And if you haven't read the book, there's the technician, the manager and the entrepreneur. And a lot of us are the entrepreneur, yet we're caught in all the technical work. So you had to do all the technical work because it was only you and a part time administrator. And maybe you were naturally inclined to do some manager work. Yet I know you truly as an entrepreneur, was all of that mindset. Did you have a vision like you were going to build this business so you were, you would do whatever it took. Like you didn't feel like pressing record at 10pm while you were prepping, like, but you knew that if you didn't do it then you'd be stuck doing that at 10:00pm every time you had, you know, four listing appointments the next day. So what was the mindset around you slowing down to do the manager type work, the people in systems work? What was the mindset around it? What kept you doing that work when most people just skip it and in top agent status?

I mean, I know I had to. I was like very clear on the fact that I needed to get back more time to become more like singular focused in the business and having to delegate all of these different things. And so I was really committed to it. And so it was this process of like identifying the stuff that I do that Delivers the least amount of value to the business that somebody else could be doing. And usually it comes down to like the revenue that it produces and stuff I don't like doing. You know, I knew that if I could get rid of that stuff, I could pick up other things that provided more value and focus on stuff that makes me happier. And so I was pretty good at like setting deadlines in the calendar of, you know, I will have delegated, you know, this position or fired somebody to take over a position for me or think about the organization and who we have and if we need to move people around to take on different roles and responsibilities. So, you know, it would allow them to elevate into a new role, take on new responsibilities and learn new things and for me to elevate into the same thing, like a new role and you know, focus on less and have more impact.

So let's talk a little bit about that outsourcing or delegation process. I know when you first got started down this business building path, it was you and a part time administrator. What was the cadence, what did the cadence of communication look like between you and your admin at the time where you were able to focus on the front stage activities, yet you knew that the business and the systems were moving forward because they were being worked on. What did that relationship look like and the communication look like?

Yeah, I was hyper focused on like making sure that I could delegate sales related things at a high level where we produce really good results and not very focused on the backstage items. And so, you know, I hired Katie who did so much for us. You know, she was I think part time at a pizza place as a hostess and, and I think we worked together for probably three and a half years. And that's right at the time that we got into B school. And I recognize there are so many great tools and systems that would help us operate and get clarity into our business and be able to measure key performance indicators. So we would meet, I would review the opportunities of things that we could implement from B school and I'd pick one or two for her to work on and I'd say, hey, I just need you to get these things worked into the business. And so she and I would meet sometimes a couple times a week, mostly one time a week. And she would implement one thing at a time or two things at a time. And that would give me more visibility into what was actually going on so I could actually have the data to be able to manage and lead and make informed decisions on how to increase business, increase Efficiencies, that kind of thing. And so she did that for, you know, to build out all of closing coordination, all of listing coordination, all of our tracking data, reporting different roles on the, you know, not. Not just the. The checklist, but developing the roles for a listing coordinator, closing coordinator, that kind of thing, hiring the people, training them on how to do it. So, no, she was. And she was responsible for doing that for about three and a half years, and we ended up getting somebody else to run operations for us too. And she's basically been committed to doing the same thing ever since I hired her. So she's still currently improving her operations and focusing on that kind of stuff. So she'll take the vision of what we want done. I'll kind of feed her like, 5% of it, and we'll go back and forth until she's got it to about 95% of it. And I'll put some finishing touches on. She'll wrap it up, I guess wrap it up to like 90%. I'll put the last 5% of finishing touches on it, and then it's done.

Yeah, that's awesome. We talk about a 10, 80, 10, but you've one upped it to the 595. You do the first 5% vision, someone fills in that middle, middle gap with a little bit of support, and then you finish it off. Talk to me, and I want to talk about what you've built out a little bit later in terms of how you've expanded this philosophy of, like, agents just suck at the backstage and they're helpless in a lot of ways. What I've seen a lot of times is team leaders get a system in place and they move on to another system. Yet it's almost like a two steps forward, one step back. So they build out two systems, one falls apart, and so they have to take a step back. They build out two. One or two. Like they're not really implementing the systems at a deep enough level. How have you figured out a way? I mean, because you have just consistently knocked down system after system after system. And this is not. This is over years, like, you've just tightened it up and grown in scale, and you've exited more and more out of the business. What advice or what have you seen in your business that allows you to not take those steps back as much as we've seen others do?

I mean, we, you know, we're. Our team is a lot of, like, Iddis in our leadership team. And so we're missing, like, that. That finisher like that DC personality type that, like, really passes things across the finish line. So we're guilty of, like, starting stuff, getting it, you know, running as a system, but not necessarily always getting results out of it because we'll move on to the next thing. Right. And so we're aware of that. Something that we look out for, you know, are we putting. Are we taking on too much and not yet reaping the rewards and really following through to reap the rewards from some of the stuff that we put together? So we're conscious of that. I think it's one of our faults. And so we're not finishing, we're not getting the results out of everything all the time, you know, but, you know, I think we're ultra focused on making sure that happens as much as we possibly can, you know, and so I would say that's probably, you know, most realtors are, you know, not necessarily like great implementers, you know, to all the way through to get the results out of things that you've created. So I would say just like, pay special attention to finishing the project and, you know, keep going back to it until you're getting the results that you're actually looking for. And you can move a lot faster that way, you know, otherwise, like Lars mentioned, you start something, you think you have it finished, you know, it's probably like 80%. It's not really that effective, and you kind of disappear from it. You'll focus on the next thing, next shiny object.

Yeah. It's funny when you got to a point in your business, you know, because we're in close enough markets and similar enough at one point, similar enough size businesses where you had built all of the systems out to like a plus one or two, like, it was just past where I had even gone. And it's. And it's awesome. I mean, I just, I love it. Even if I gave you the seed, you grew the tree and then you grew other trees, and then all of a sudden you have this team of VAs running all your systems. And I remember, I forget how it came up. If it was my idea, I think it was my idea. I'm like, can you do that for us? And I think that's where ERS was born, where I said, you just do it for us, you know, because it takes all of the core systems. Like there's just core systems that you need in your business. If you're a top agent looking to scale into more of a leverage environment, or if you're a typical team leader where you're Doing half of the units because you set the thing up the wrong way. There is no tracking, there is no accountability. So talk a little bit about. A little bit about ERs, but more, what even gave you the idea to just go into a foreign country and just have someone. Even the systems you bought to the systems for a real estate team just blows my mind. So talk a little bit about ERs, what you built with Ellie and the mindset and the drive behind it.

Yeah, we have, the backbone of our operations team is our team in India, you know, so we have a lot of virtual assistants that work for us. And they do, they do sales functions, they do a lot of prospecting to give really warm and hot leads to our ISA team to convert and our agents to convert. And they do a lot of back office operational stuff like closing coordination, listing coordination, tracking, reporting. They do a lot of implementation and creating different reports and systems that we'd like to have. And we've just, we found a couple really talented people out there that were great to work with within our team. And as you mentioned, large, you said this is really good stuff. It's valuable for other real estate teams. You should think about providing these systems and these services to other people because you have a lot of people that might do this in your office. Or if you thought about hiring people to do this in your office, it would cost a lot of money where you could simply outsource it to ers to have done for you not have to think about the hiring, the creation, the management, the turnover and all that stuff. That's where ERS was born. And so we really started to support your team with virtual assistants. Now we have around 50 clients. We have an office building in a tech park in India where all of our employees go into the office. Now they're all provided the technology and the computers and infrastructure management that they need to execute all these things for real estate teams at a high level. From marketing to sales support to prospecting to closing coordination, listing coordination. It's grown into something really special with this group out there and have created a lot of opportunity for them out there, which is, which has been awesome. And so it's been, it's been a fun journey and it was 100% your idea.

Yeah. And I remember and even as that business was growing and realizing that, I remember Ellie and Vishnu would come to us and say, like, what else can we take, like, look in your business and just decide what. What is not core to your. It's almost like what is not core to your business? And if you can have your backstage locally, you know, worry more about the client experience than the button clicking and the moving of stuff and all of that. I think, I think that's the power of it. You know, you could just give a better experience to your clients.

Yeah, that's it. Like our closing coordinators on our team in the States, they just do a high level of communication to love on our clients and making sure they have a great experience while their assistants in India are the ones that are scheduling inspections, uploading documents for audits and all the backend stuff that's kind of tedious and not that fun to do and which allows our closing coordinators to really focus on client experience and we just have all the busy work delegated to the team in India.

Yeah. And I think VAs sometimes, I think they're often misunderstood because sometimes people don't treat VAs as a true team member. Where you're, your team is given authority to email agents directly on teams and say, hey, listen, you didn't fill out your tracker yesterday and you're off leads. And it's like as a team leader, you're like, I don't know what to tell you. It's real clear, you know, Vishnu said that you didn't follow the system and.

She shut you off.

It wasn't me, you know, so having the system, the thing that drives the business I think is the powerful takeaway.

There, building the model for somebody else to run it for you. And that example, it's really hard for them to get upset with you. It's like, I'm sorry, like, you know the model, I know the model and you know the door shut, you know, you know how to open it back up again if you, if you like to. So yeah, either make your call.

It's a strange dynamic, but it's, it's super powerful when you have a systems driven business. So let me, let me end with this question.

You know, looking at where you are.

Today and all the effort and work you've put into systems and still just simplifying. We just talked before we hit record. You know, you're going to be down to two pieces of technology here in about a month and one's a phone system. And then your whole, I'm not going to mention what it is because everyone's going to run to it. It's going to be a cluster.

Yeah.

So I won't do that. But now that you have the business you have today, how has it impacted just your mental clarity, your thoughts, your personal life, like how are you able to show up today versus the way life was like when you were just running and gunning 60 to 100 sales 80 hours a week. What's different about today versus back then?

Yeah, I love sales. You know, I'm super passionate about it. It's like the thing that I've excelled at most of my life, but at the same time, I really enjoyed the fact that I get to think about the future vision, you know, the people on the team, the culture, you know, what we want to accomplish over the next 10 years. And, you know, just thinking at the business from a higher level instead of, you know, the day to day, tactical on the ground stuff. So that brings me, I think everybody's very different in like, what brings them the energy that they want to have throughout the day. And for me, you know, it's. It's working within all those things that really excites me. And, you know, some people wouldn't enjoy like modeling what they want their business to look like in 10 years in spreadsheet, you know, like, I can totally nerd out on that and get into it and reverse engineer that into like, all right, what do we do this quarter to make sure we get there right? But for me, that's fun and working on that kind of vision and tactically, how we're gonna get there is, yeah, it's exciting. It's super energizing for me.

And how about your personal life, you know, back then versus now, vacation, all that stuff?

Yeah, it's totally different. I mean, you know, I think that I create a lot of work for myself, you know, which is unnecessary, but at the same time, I like growth. And so, you know, I try to go out and create growth for the team, which creates chaos, which creates, you know, problems to solve. And I enjoy thinking about these big problems that we get into and how to solve them and working through them. So, you know, there's also times where I can say, okay, hey, next, you know, quarter, I'm looking forward to a big vacation, you know, and we're going to take off three or four weeks or something like, like that. And I can plan for that and make sure that I can exit the business and everything runs well and we're not in the middle of something that may need my attention. So I can plan personal time and freedom very easily. And I can also plan to work more if I want to. So the freedom's there if I want it, and that's what's important.

Yeah. Awesome. You took 30 days recently. Totally, totally unplugged how was that?

Awesome. You know, it's great. I feel like I'm the kind of guy that, you know, I like to run really hard for, you know, a certain duration and then just take a break and get into the things that I enjoy for a long period of time and really unwind. And I feel like that's where the mental dynamite takes place too. And you get really recharged and fired up to come back and, you know, take over the world and. And so, yeah, it's good. It's a healthy thing for me. There's absolutely no doubt about it.

Yeah. I remember when you shared your, I think you call it the Disney map, where it's like all these lines and businesses that are all interconnected and ERs and the real estate team and the inside sales and like, and then there's this box that's connected to nothing. What was it? DFT Charters or something like that. So really, if you're friends with Dave on Facebook, you'll know exactly what I'm talking about. Really, all he wants to do is fish when it just comes down to it, which is awesome. So Dave, what's the easiest way for people to get in touch with you to ask more about ERS?

Yeah, check out our website, expert realtorservices.com you can contact ellie2e l l I e at Dave Friedmanteam or at expert realtorservices dot com and we'd love to help you out. You know, there's a lot of information on the site, but certainly get in touch with, get in touch with us through that because we have so much more to offer than what's actually on that website. So if you're looking to, you know, delegate things from your office for, you know, a lower per dollar rate than you could hire somebody here to do. What it's going to do is it's really going to help your current staff elevate into higher level thinking and adding more value to the company than what they're currently doing. Because I promise you, you probably have somebody in your office that's doing this like administrative work that anybody can do. You can train anybody to do it and we can have somebody take care of that for you and take your administrator that's currently doing that and elevate them into more of a more important, more impactful role for the team where they can get more done for you, give you back more time and freedom.

Yeah, and I would say it's, I mean, I think it's critical for survival for a local business to figure that out. It's like you have to get the administrative off the plates of all of your client facing people so that they can deliver an experience that you know, client care can actually be a lead gen lever. You know where in a real estate team, I mean that's where you lose referrals is that your admins, they're pushing paper and they're not really sort of caring for clients. So that's why I love what you do there. Dave, this was awesome man. I appreciate you and just your journey and sharing with folks and yeah, so if you're at a point in your journey where obviously if you need some help with your backstage or if you just want to have a conversation about what leverage looks like, how you can sort of spend more time as an entrepreneur and less time in the technical and and systems type work, you can go to real estate B school or go to expert realtorservices.com and Ellie's wonderful if you have a chance to talk to her as well. Much love Dave. Appreciate you.

Awesome.

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