The Not So Sexy Side of Real Estate - Part 1

Welcome back to the Business Freedom Podcast. This is going to be another epic three part series here. We've done a handful, probably not a handful of these, maybe three or four of these over the last couple, three months where I've allowed you to come into our world. The content that we put out in these multi part series, they were sessions given at our intensive workshops. So intensive workshops are where members only, so real estate B school members get together and we just work on our businesses, you know, to make more money, have more freedom and have the ability to impact more in our teams, in our families, in our community. And the thing I love about this three part series is that when I met Dave Friedman, he was the year before I met him, he did like 35 sales. The year I met him, I think he did 64. And I met him in August that year we started working together. He did 375 transactions. Five years in, 3.75 million. I think he was running at about 10,000 a commission check. He's been out of production for two, two and a half years. He's like 10x his personal income and he's cut his hours in half. And just an amazing, amazing growth story. And not just professionally or financially, but also personally hit his marriage. He just wasn't giving enough time to Hayley, his beautiful bride. And he was just at a crossroads really when we first connected. And so this is the not so sexy side of business. This is real business. When you hear Dave's talk, we're going to break it up into three parts. When you hear him talk, this is the real business comes in the backstage and some of what he covered, tracking accountability foundationally, what your business needs to look like. And no matter where you are in your business journey, there's something here for you. So the only thing I ask, because this is like inner circle private material, is that you share it somewhere. Share the podcast or if you're watching the video, share the video and leave us a five star review on the podcast. Wherever you listen to podcasts, just make sure you subscribe, of course, but also just leave us a five star review. That's really helpful in getting the podcast out to more folks. So enjoy the three part series. This is part one and we'll talk to you soon.

So this next session, I think I came up with the title and I just said, Dave, you have to talk about all the stuff that makes your business run really smoothly and profitably and serve your team members, but it's the least glamorous stuff you could possibly talk About. So good luck with that. And I call it the not so sexy side of Real estate. And the thing I love about David, really open, transparent guy. So I encourage you guys to think of questions as he's speaking here, but he's built a business in a way it doesn't revolve around him. It really serves his team members at a high level. He built it so that he can have a successful marriage, you know, because I don't think it started out that way in. In his business. And, I mean, he has just 10x'd the size of his real estate business in four years and working less, serving team members at a way higher level. You know, it's not the Dave show anymore. It's the team. So you guys are in for a treat. Give Dave a big round of applause.

All right, so talking about the not so sexy side of real estate, and I have to start with the fact that I'm, like, terrified at being up here after Dave Hook, because what he just did in. The message that he just shared is absolutely incredible. And I've been part of. I've coached with a lot of people at the same time that I've coached with B school and. And I've never stuck with any of those other coaches because of the way that people like Dave Hook and Lars look at real estate businesses and how it's supposed to serve a bigger purpose than us. And as long as you're part of this community for a long time, you'll eventually figure that out. And if you're not looking at it right now that way, then eventually you will. But you have to be aligned with the right people. So, Dave, I mean, you just crushed it. So, yeah, the not so sexy side of real estate. Lars. I started coaching with Lars because I needed systems and processes. I was really good at sales, and I knew the train would come off the tracks if I didn't have some help with that. So I got with B school, and he just gave me, like, everything that I needed. And he constantly comments back that we'll usually take what he's started and then we'll go 10 times deeper with it and then try to share with other people to help them, but a little bit about myself. Born just outside of Detroit, Michigan, and I was always a hustler. And it's my mom's fault. She just kind of instilled that in me at a young age. I asked her, how old was I when we were in Tijuana, when you gave me $2 at a, like, outdoor market. And she Said, you know, you can go buy whatever you want as long as it's two bucks or less. And I came back and told her I wanted this, like, giant box of Chiclets, and it was $6. And she's like, that's fine, you can have that. You just have to go get it for two. So sure enough, I went back and I negotiated at 6 years old, this, like, box of chicklets for $2. And I look back on those experiences in my life and, like, how it's made me who I am today. And she was a flight attendant, so I traveled a lot with her while she was going to work. She would take me with her. And I remember some other times we went to New York City and we went to Chinatown, and I bought all these fake watches and brought them back to middle school with me and ended up selling them in middle school. So just these funny experiences that have helped me become who I am today. But she was also in real estate. She was a builder and a developer. So she encouraged me to get my license when I was 18, before I went to college. And so while I was in college, I ended up starting a company where I painted homes, and I also power washed homes, and I had my real estate license. So I would also door knock on for sale by owners and things like that. And it's kind of ridiculous that people would list a home with me when I was 18, 19 years old. And I think they did it because they felt bad more than anything. And so time went on. I ended up buying in college. I ended up buying seven homes. Four of them I had as rentals, three of them I flipped. And at the time, they would give anybody with a heartbeat a loan, right? So it was incredible. I had no income. I was in college. And then the market shifted in Michigan in 2005, and the bottom completely fell out. So some of the homes that I had as rentals that I bought for 250,000 were worth 125 within nine months. And the ones that rented for 2,500amonth were now renting for 1250amonth. So literally 6 million people left the state in a short amount of time. Which, to put that in perspective, there's 6 million people in the state of South Carolina. And so the entire bottom fell out. And I ended up getting a job with Suntex Homes right after graduating. And they taught me the value of systems and processes and culture. And so it was a very valuable experience for me. And I was making really good money. And they taught me a formal type of sales training, which was great. And I remember during that time, with the collapse of the economy, which happened in Michigan far before the national economy, Centex decided to close down our division there and completely pull out, which left me without a job. But they helped me relocate to Charleston, South Carolina, which is the best thing that ever happened to me because that's where I met my wife, Hailey. But during that time I went down to about a $30,000 income. I had about $150,000 in savings. And about eight months later I burned through all of it because I was trying to keep these rentals afloat. I had to sell these homes and use all this cash that I had to make up the difference between what they were worth and what I could sell them for. And so I think it made me a much smarter businessman and a lot more risk averse, which is great. So I look at all that as a great learning experience and feel really grateful that I went through that at such a young age. You know, I've seen a lot. I see a lot of people that were in real estate in Michigan that just have never recovered from that because, you know, they're in their 60s and 70s and they had their retirements invested and they didn't do it properly. So that also helped me learn how to create standards for myself personally and also professionally. If I'm going to get into something, whether it's into business with somebody hiring somebody, investing in a rental property, I mean, also develop standards on what I would be willing to do at that time. So after I came down here to Charleston with Sentex, I decided that I didn't like the culture and I realized how important that was to me. So I decided to leave. And I went to leave and went to work at a brokerage here locally and ended up doing really well there. And I was making some hires. I had a full time isa. I went on and went to go hire an assistant. And at the time the brokerage had a coach and the coach said, you know, it seems like Dave is trying to build a team within a team. And that doesn't really feel like it's. It's something that's good for the business. And so that immediately put a limitation on my income and my potential because you need people as leverage to continue to grow when you just can't personally do any more yourself. So I decided to leave because I had hit my ceiling on what I was capable of doing and started to build a team. And so that also had a big impact on me. And I decided at that point that I would make sure that I never put any kind of limitation on anybody that wanted to join our organization. And it was really important for me to understand where they wanted to go, to make sure that I could always try to stay ahead of them and try to create those opportunities for them. If I wasn't able to, then shame on me. Right. And I would never be upset about somebody leaving based on that. So the big goal for me too is just to try to create a massive world that's big enough to. To be able to have people within it that they could also have a really big world, because we have the same vision in getting into different businesses. So that was about 2013, when I was back to a single agent and sold about 32 deals that year. The next year, in 2015, went on and hired a buyer's agent. And I think you all heard my really embarrassing vox that Lars played yesterday morning about hiring Jackie, who's incredible. And so she and I got to 60 deals together in 2015 and 2016. We ended up hiring four more buyer's agents and a listing agent and grew to 200 deals. And then in 2017, we did 262. And in 2018, we're on track to do about 400. So that's just a little bit about our story and where we are today and some of the hires that we had to make to get there. We currently have a full time recruiter on our team. We have a full time director of lead gen who handles our ISA department. We have director of sales who helps all of our outside salespeople. We also have a director of operations, Ellie, who takes care of everything back of the house. And the only way that we were able to sustain the kind of growth that we had without having any kind of like major disasters happen are the right kind of systems and processes, which I learned to appreciate at Sentex. And in a large part of where I got a lot of that without having to recreate it was from being school, which is very instrumental. And so the not so sexy part of real estate is knowing how to manage and lead all those departments and having, you know, down to the very, very smallest level measurements in place to know whether they're succeeding or not succeeding. And as Dave mentioned, not managing through emotions, but managing through the data. Right. So when you show up to a meeting, you know how to address that person because the data is going to show what they did or didn't do. Does that make sense? Perfect. All right, so today's plan, we're Going to learn about how to create a predictable and consistent growth through new business development, which is prospecting. Also how to track and systemize your business to create consistent results and increase your ROI and optimize scalability. The third thing is change the way that you perceive accountability, and hopefully people on your team perceive it, and that way you can impact more lives. So there's really no hype in any of this. It's definitely not the coolest thing to talk about. It's probably the last thing that people want to go to a real estate conference and hear about, because it's not this, like, new lever that's going to generate a lot of extra deals. Unless you focus on it, then it will. So who in the room feels very confident with your you or your team's prospecting new business daily, tracking the results and supporting it with a high level of accountability? Do people in here feel like they really have that on track? So there's just a couple people that's raised their hand in the room and who feels comfortable with that whole idea, even if you're not doing it, who feels comfortable with it? So not many people feel very comfortable with it. And so something to ask yourself is, is my team equipped with the knowledge, attitude, skills, and habits to create new business on a daily basis, to serve themselves and their families, to get to a life by design? And that's the most important thing to focus on in showing up to the business and in creating new business. So new business development. You know, keeping your pipeline full with fanatical prospecting is very important. So we'll dig into that. The weekly cadence of champions. You know, I consider people on our team champions. And so we're gonna go over what that weekly cadence looks like. And then also the way that we look at no and the reason that we go for no. So it'll change your perspective on getting rejection on the phone. So here's a great book that if you haven't read, you should definitely dig into, and I'll dig into some of the best points of it, but Fanatical prospecting. So the whole idea is to fill your pipeline with appointments and nurtures. Those are the two things we focus on. Nurtures are people that will do business with you, but not. Not right now. So they have motivation and a defined time frame. So as long as they have those two things that we consider them and nurture on our team, and it's going to be business for us in the future. The two of the big metrics that we measure along with set met signed are nurtures. So the two biggest things important to us are the amount of nurtures we're getting and the amount of clients that we're signing. And in real estate, what you do today is going to impact, impact you in 90 days from now. So there's a long lag in, in what our efforts do today and what you get out of it in the future. So if you skip one day today and you're like, I just don't feel like hitting the phones. I don't feel like you're generating some new business, you're going to feel the burn in 90 days from now. And if you do that for an entire week and you neglect getting agency agreements, in 90 days from now, you're going to feel it. So the idea behind this is to show up every single day with the attitude that you're going to generate that new business and have a very consistent business. So who knows what today is? It's December 11th in real estate. It's scary to think about it, but the year is almost over. So what you're starting to do now is impacting your next year, your first quarter, end of, end of fourth quarter this year, and beginning of first quarter in 2019. So if you want to crush it in 2019, you have to start getting serious and intentional with your business today and what your daily habits look like. You know, the next part is the scarcity versus abundance mindset. While you're prospecting, consider the times when you were in survival, survival mode and you just had a couple buyers and sellers that you were working with. With a heightened probability of failure looming ahead. Your desperation seeped through with these people that you were talking to. And people can smell that on you. They will sense it in a heartbeat. So during times like this, you know, you will act with emotion, illogical and make poor decisions based on that. So it's really important to manage your attitude and your abundance versus scarcity mindset because it will show up when you're talking to people on the phone or in person. You know, the other thing that we talk about is the law of replacement. So on our team, if you sell two listings, you have to go get three more agencies list like seller agencies to even stay afloat. And also if you sell a home to one buyer, you have to go immediately go get two more buyer agencies just to stay afloat. So if you want to sell four homes a month to buyers, every time you go sell a home, I think the typical realtor, you know, they go celebrate, they take a break, they forget about, you know, the importance of keeping up with new business. Then they get really involved in the transaction and the details of it and they get sucked in to forgetting about how they need to generate new business. That's the value of being on a team and creating a team and trying to build an environment for your team where you avoid what some people on my team call the yo yo Realtor, where they have ups and downs and people on a team should have a very consistent income. So the challenge with that is keeping people focused on, on what that law of replacement looks like. And you should know what that is based on the metrics in your business. So for us, again, you know, we, for every buyer agents, for every two buyer agencies, we get, we'll sell one buyer home. So we know that if, you know, a team member goes out and sells a buyer a home, they have to go get two more just to stay consistent. Right. That doesn't include any kind of growth. We're really good at setting expectations with people when they come on our team. And we feel like we have figured out what it takes to be successful in real estate. So when somebody joins our organization, I think a lot of team leaders get disappointed and feel like the victim when somebody doesn't really follow through. And I think when somebody joins our organization, we look at it differently and we think about it like how do we need to follow through for them to make sure that they're successful? A lot of it's expectation setting. So if you reach out to me, I can send you what our 30, 60, 90 looks like for all the positions in our team. But when somebody joins our organization, we let them know that we're going to get into business together for 30 days at a time. And as long as you're able to hit these requirements, then what we'll do is we'll extend that for another 30 days. We have a whole new set of requirements for 30 days and then for the third set of 30 days, it's a whole new set of requirements. And so we go through them and we just get really clear with people that when they show up that they have to get through these things to be able to get a permanent seat on our team. And until then, for the first 90 days, it's just a probationary period. So what we're trying to do in that 90 day period is, is set a good example of what it looks like to be a really productive realtor in the industry. And so some of these examples here is for the first 90 day period that people join our team, they become an ISA. So we're looking for them to prospect for 25 plus hours a week for 13 weeks straight. And for them to graduate from that, they have to have six med appointments three weeks in a row. And the reason we feel like that's very important is because as a realtor, if you can't produce new business for yourself, then how are you going to be successful? And so the last thing that we want to do is to bring somebody into real estate and then let them loose when they've never learned the most important component of the business, which is generating new business. So that's why we have everybody start as an isa and for them to hit that requirement because we know they've then learned the toughest part of the business and they've solidified the skills and the habits and the attitude about how to face this kind of thing. And then after people graduate, everybody on our team still prospects. And so for all agents, it's 12 hours a week. And depending on where you are in your career, that might change not the amount of hours, but the way that you do prospect. So for agents on our team, until they have 100 deals past them, you know, they're prospecting in our office every morning from 8 to 10, and then again on Thursday from 4 to 6. Once they get to a certain point in their career where they're starting to get past clients coming back to them, you know, their friends and family realize that they actually made it. You know, they're like one of the 10% of people in the business that got their license and actually made a name for themselves. They start to use them. And so at that point, it's not as important for them to generate new business in the office and prospect all the time. Now they can shift their focus and start to generate business other ways. Right? So as people move through our career track, we change those requirements. And so some people only prospect in our office four hours a week, and then they spend the other eight hours generating business in a different way. But, but nobody can enter real estate and, and be successful right off the bat.

Thanks for listening to the Business Freedom Podcast. If you're getting value from the podcast, would you please leave us a five star review and share it with others who might benefit from the content I'm sharing? And if you're ready to scale your real estate business sustainably and profitably, there are a couple options for you. If you're doing under 500,000 in annual GCI, our business foundations program is for you head over to get businessfoundations.com that's getbusinessfoundations.com and learn how you can make the shift from overwhelmed real estate agent to true business owner if you're doing more than 500,000 in annual Team GCI. There's our graduate program designed for top top producers and team leaders who want to grow their team and scale their business. If that's you, go to realestatebschool.com and apply for a free Business Growth Strategy session. No matter where you are in your business growth journey, we have the tools, system, strategies, training and coaching to get you where you want to be. Remember, only you can create your future, so take action now.