Do you have a job or do you have a real estate business? The key to unlocking freedom for you and your family...(and your sanity as well!)
When I got back from vacation, I was diving in all over the place feeling a little bit discombobulated and there were all kinds of things that popped up, like the importance of having systems. This has been hitting me square in the face for a week now, and then you were talking about it. Then I see an article two days ago about this new brokerage that's worth a billion dollars now and it just raised another $150 million. On their website, it said transforming agents into businesses. It just clicked on the people that have the most amount of freedom, the people that have set things up and have the most amount of sanity, they're not freaking out about where their next deal is coming from, they're worried about how to go from 100 to 200. 10 in a month is a foregone conclusion, 8 in a month is a foregone conclusion for the work and the system that they have in place. The difference of having a business or having a job, I get that front and center just listening to conversations and having conversations with agents all day every day.
We started this because we're like what are some of the core beliefs that we share with us and our customers and how can we … almost like a core value for the business as far as customers are concerned. I push that marketing is the key to success in real estate. Mostly, they just don't realize the business that they're in. I'm still on the fence and you're like, "Well, the fact that they need to be a business in general, I think, eludes them," and that's the starting point.
I could probably be swayed either way but both are paramount. You have to understand if you don't know whether or not you have a real estate business, then you don't. If you're a one-person show, then you don't. If you're on a team, that's a different story. You have joined a collective, a symbiotic relationship that is allowing you to have resources and the other members of the team to have resources that you wouldn't otherwise if you didn't join that collective.
I would just say on my team, if you were trying to hunt an elephant, I don't know why elephant, that's just what I picked, some big creature, would you rather have one spear and just YOU trying to get it or would you rather have 10 people with 10 spears trying to take this beast down? I don't hunt, by the way, so don't come after me, PETA.
My point is, a team is a little bit different scenario. If you're a single agent out there and even if you have maybe a partner, if you don't have a clear vision on how your business can be less people-dependent and more process-dependent, then you're not going to be able to scale, and that's what I'm realizing. There's some holes in my organization as far as the sales team is concerned due to systems and processes that aren't necessarily placed. Maybe they have been at a time, but attrition occurs. That's just what happens in business. That's why an operations manager is one of the first awesome hires that keep those trains running on time.
The vision of a business is where it begins.
Everything begins with an idea. I remember when I didn't have a business, but I had this realization like, "Dang, it would sure be nice to be able to leverage myself and my time." The analogy that I had was a dentist. Dentists or even doctors, they didn't, at one time, have the setup that they have now. They would be a one-person show.
Now, you go to the dentist and the secretary checks you in, the oral hygienist might clean your teeth or check you out, and then the dentist comes and his time is highly leveraged. He might spend 10, 15 minutes with you when you were there for an hour getting all the other services that you need. What did he do? He took the highest and best use of his time and the difference as he was able to scale or grow or perhaps even started out like that. I don't know the progression of dentists, but he was able to push off the dollar-productive activities that were less productive to other staff members to specialize in those.
That was the beginning of the "aha," that I had, like, "Oh, yeah, maybe I shouldn't be out here hanging signs when I could hire that out," back in the day, I could get someone to do that for 10 bucks an hour. Maybe today it's $15 an hour, I don't know, but probably not the best use of my time. Now, the danger in that is if you don't use that extra time that you create to-do dollar-productive activity.
That's the leverage that you got to set up. For dentists, their key performance indicator that I've read in a book was hands and mouths, like how many mouths can you put your hands in a day. It was like that was the metric that they were trying to … because that's their most dollar-productive thing. Anything else that they're doing isn't what they went to school for years upon years upon years for. There's a company called Heartland Dental that actually teams up with dentists to do exactly that.
It's just crazy to think of it when you're setting out to have a business.
If you were going to launch a franchise, you got to put so much money and so much capital and you've got to have everything in place, but you know you're going into business.
If you could have the option, I feel like some people are shortchanged in their vision because of the people that they surround themselves with. Pretty much everybody I've met has either been … that got into the point where they created this team and went on vacations and were able to have things still run smoothly when they were gone for small periods of time. They could do those things and they had some more freedom, and financially had more freedom because their vision was just a lot bigger.
It was either in two categories. One, they were surrounded by people that they saw that was possible and knew there wasn't a difference between them and Shaquille O'Neal playing basketball. It wasn't the difference in talent or whatever, smarts, or they were just young or naïve enough to be like, "I can do whatever I want, It doesn't matter." "I know some people are doing it, I just got to figure out what they're doing," and then they surrounded themselves with those people and then you expand your thinking.
Darren Hardy was talking one time, I don't know if it was a book or conference or whatever, but he said his biggest epiphany of being leveraged in business versus being a solo entrepreneur that didn't really have any leverage whatsoever and having a job, he said he went to this mastermind that he probably shouldn't have been a part of at the time and he was getting on a ski lift with some dude that was a multimillionaire.
He said, "Darren, do you know the difference between me and you," right before they were getting on the ski lift and he was like, "There's quite a few." He was like, "The biggest difference, I'll tell you when we get to the top of the ski lift." They small talked, then they get to the top, and Darren says, "Okay, so what was it?" He was like, "Difference is you, from when we got on and I asked you that question till now, I made money and you didn't make anything." He was like, "That's how you multiply and scale," and all that fun stuff.
That realization for real estate agents, I feel like a lot of times, just going around the country with Kinder one time, I remember he used to ask people questions like, "Do you think this is possible?" People didn't even know it was possible. I thought I had to make all the phone calls, I thought I had to do this, I thought I had to do that because they've never seen it or they've never been around someone that has done it so they don't even know that it's possible.
I don't know about you or anybody else out there, but thinking like that can be overwhelming.
I was having a discussion with a friend about a big picture thing last night, and I was like, "Man, when it's that big, paralysis by analysis, you don't tend to jump because you don't know where to start." I think that, really, I got some good advice early on from a guy named John Tillman. He was like, "Hey, what you need to do is get a glass of wine and just have a vision of what you would want your business to look like." I was like, "Look like? What does that mean?" I had to hear it from different people over and over and over again before it finally clicked.
I think the advice that I would give, is if you were to start writing down basically just an organization chart, like who would be in your organization, what would they do, what would be your first hire, and as you continue to scale, what else would you enterprise and segment off. My dad made fun of me for a long time because I hate mowing and I don't mow my own grass. He's like, "Oh, I knew guys like you, don't mow their own grass," and I'm like, "Well, dad, if I stopped to do that, that means it would cost me over here."
I always remembered Bill Gates saying, "If I stopped to pick up a hundred bucks, it would actually cost me money." That was mind-blowing to me, like how is that even possible? The point that he was making is staying focused on the highest dollar-productive activities that you can are paramount because even just losing focus to go walk over and pick up that "hundy" would be worse than trying to get back to where you were. For him, it would certainly be the duration of time, a few seconds, would cost him more.
What I always told people is this is a real estate business and if it's just you, you're responsible for all of those things, which is why you feel even if you're doing 12 deals, if you're doing 20 deals, if you're doing 8 deals, you can feel maybe more overwhelmed than agents that do hundreds of deals. Because they're responsible for all of them in a leadership role, but they aren't doing all of them.
It is such a mind shift when you can think of them like actual positions that you are fulfilling right now because you have a business. As long as there's not money coming out of your check for taxes because you're a 1099 employee or a contractor, you put it in your business. You're doing all of these things. You might have something brokerage-wise that helps you with some of it, but you're responsible for all those things, which you wear all of those hats which is why it's so hard for you to switch sometimes, and that's just hard.
But it doesn't have to be this way. You eat an elephant … Again, I don't know why I'm so down on elephants. One bite at a time. What are you going to start with? I personally, I loved … I think it was in the book "The Power of Focus", but he talks about anything that doesn't really bring you joy. He's like, "If you don't like doing laundry, don't do laundry." He's like, "It's that simple. If your dog can sleep in the middle of the day, you can, too." It's like whatever you want.
The truth is there are things that don't bring me joy that causes me anxiety, for example, mowing the dang lawn. If the lawn starts to get disheveled and I know I got to mow it but I got a bunch of other things on my plate. It's going to cause me anxiety. If you don't like the closing coordination side, that might be something that you start with by hiring an assistant first. If you don't have an assistant, I remember an old saying, "Understand you really do, it's you." Like, "You're the assistant."
The key is who you are is not who you will need to become in order to get to be where you want to be.
In that journey, in that process, you learn how to create business systems, you learn how to manage people, you learn how to hire, you learn how to train. It's just a wonderful journey of an entrepreneur. I guess that's really the key, like do you want to be an entrepreneur or do you want to have more of a steady gig in the real estate space? If you want something more steady, I would highly recommend going and joining a team.
If you have the entrepreneurial gene and you want to go test your mettle, that's pretty much the first place I'd start, is an org chart and then hiring an assistant. The danger with an assistant, the first thing that came to mind is if it takes you as long to tell them what to do as it is for you to just do it, maybe you shouldn't be delegating that unless you're going to teach them how to do it so you never have to do it again.
I want to make a big distinction because it felt like when I went to the 9-box, I felt like, "Okay, hey, we're preaching to the team." In order to have a real estate business, you have to have a real estate team, and that's not exactly true because, for me, always start with the numbers. As a business person, business owner, you should always want to know the numbers first because men lie, women lie, numbers don't. For you to be able to make educated business decisions, you have to have real data to be able to make the right decisions. Always start with the numbers.
I feel like that's probably the biggest shift, and it was funny because I saw a live with Kinder and Kitchens the other day. I was just scrolling through Facebook and I just caught a part where it was like, "You got to know your numbers and you got to know what you do," and, "I was talking to a lady that's doing 40 and she wants to get to 100 or something like that, or 100 and trying to go to 200. She's making a ton of money but she starts with reverse engineering, exactly what you do, having the systems in place, blah, blah, blah, blah, blah."
Then I was listening to a webinar yesterday, from a completely different industry, and they're talking about consulting and that kind of stuff. He was like, "Well, you know, and as business surgeon marketers, we always start with the numbers," and I was like, "Ha-ha." That's the biggest difference, is knowing your numbers but being able to really use them the right way to make decisions. But it's esoteric. How do you tactically pull that down to somebody who's like, "Yeah, maybe I should have more of a real estate business"?
Start with a goal and then it's reverse engineering it from there.
If you start with a goal, let's say you want to just close up 100 or 50 or 20. We'll start with 20 just for easy math. If I say, "Okay, I did 10 transactions last year. It's my second year in real estate, I want to do 20 this year." You got to know where those 10 came from. People that have been around for a while, I feel like you can get within probably 10%, knowing how many people are going to get referred to you, without having to invest crazy into ice cream socials, whatever people do, I'm not even sure. But not spending a whole lot of time trying to fluctuate that.
The key then shifts to lead generation. We've gone through this just in a lot of research of all of these companies and real estate companies and looking at their P&Ls and all of their numbers, like financials. It is uncanny how many companies, no matter how many hundreds of millions or billions of dollars, are right around that 25% to 35% that go into sales and marketing numbers to continue on. They would never be able to reach the status that they're at, billion-dollar companies, without investing heavily into lead generation and marketing and sales.
The big mistake that I see a lot of times is an agent will go and they'll partner with somebody to form a team and then they split their commissions 50/50. One person who's going to be the more seasoned, tenured of the two most likely and going to be doing most of the work and now, you've just literally cut your income in half with somebody who's going to bring back less than half to the table and that is usually a failing proposition. You have to have value if you're going to hire another agent and, generally, that's always going to be around being able to deliver them business.
If you're an independent or if you're a team, or in the brokerage game, of course, there's different value props for that. But even that, in general, most agents are always going to gravitate to where there's going to be a system in place that is a success system that allows them to have success and doesn't fail unless they fail to follow the system. That's really a lot of times what agents crave. There's one or two, you're either one or the other. You're either the person who's going to provide that or you're the person who's desiring that, and both are achievable.
But being in the middle sucks. Being in the middle where you don't know which one and you don't have the business and you don't have consistency, especially right now, if you're not just killing it in this market, you need to make some changes fast because this is the most incredible market that I've ever seen in the history of my 20 years being licensed. It's unbelievable. I just don't even know how it's happening still and continuing. I don't even know what the cause for it necessarily other than the lack of supply because the interest rates have been low for a while, long time. It is completely crazy, if you would have said worldwide pandemic hits, real estate craze would not have followed anybody's projections.
This is probably the most passionate I get, is when we talk about numbers and stuff because, for me, it's just my lifeblood. Once we talk about numbers, it's so much easier to manage numbers than people. Managing people is hard, bringing in emotion makes you make bad decisions business-wise, and it's a lot easier to hold people accountable to numbers, which is why I always say start with numbers and it always has to start with a goal.
Going back to the 20 goal, if I say I can count on five of those, no matter what, to come from my sphere or referrals or whatever, then I've got a plan for 15. If I want to ensure I hit my goal, if I have a 1% to 3% closing percentage off of leads that I can generate online, I would be conservative and go with the 1%, not the 3%, and say that's how many leads I need, and then you can break it down more minute of how many people you actually met with face to face, which is the next prime metric that I would get to. Then I would just have a plan there that broke down monthly of how many leads I needed to have, how many people I needed to meet with, and I was either on-pace or off-pace. If I was off-pace, I would fix it.
The important part of that is once you do that, now you have a formula, now you have a system, now you have value to bring to the marketplace to recruit somebody else and show them the path. I think that as an entrepreneur, we have that craving, that desire to add value to the world, and you're building a step, or a series of steps for the next person to be able to hop on and have success as well. The cool thing about it also is it's in your market, so it's like, "Yeah, this definitely works." Like, "This is how I did this, this is how I'm doing this, I will show you as well."
It's just such a great feeling when you crack a funnel, when you got something that's just like, "Okay, I can predictably say, "It's winning!"
Oh, my God, it feels so great, you have no idea. The anxiety I get just talking to people that I'm like, "Okay, so what's your goal," and they're like, "Man, you know, I'd like to double." I'm like, "Okay, why is that important," and I'm taking them down this exercise that they really should be doing themselves. Once I get to it, it's like, "Okay, so what's the plan?" It's like, "Eh, there is no plan."
Failing to plan is planning to fail and you will fail to hit your goal and you'll stay in this, "I'm not doing bad enough to get out of real estate, but I'm not doing good enough to do all the things that I've always wanted to do with my life." You start to fail and you start to tell stories and your ego is protecting you from itself of telling you all the reasons why this person blew up that you were in a class with, that now he's got a team and he's doing 100 deals and blah, blah, blah, blah, blah. I would want to shake everybody and be like, "Hey."
You see these things and it's just your ego doing it and you've got to train yourself. We could go back and be like, "It all starts with mindset." Everybody that came in that was a fresh new agent that came in to an office that you were working in or onto your team had a natural advantage over most all real estate agents because of what they could see what's possible and see what's working. When I first started into this great industry of real estate, I didn't know the difference between a real estate agent and a realtor at the time or how I pronounced it at the time, realtor.
I was having this weird realization of all this stuff that was happening but I was learning from Jay and Mike who Jay's best year, he was selling 500 and whatever and Mike's best year, he sold a few hundred. I was like, "Okay, so it's probably pretty normal to sell 50 to 100 houses." When I started talking to people and they were doing like 20, I was like, "Man, are you brand new? What's your story? Part-time?" I was offending people and I was like, "Oh shoot," and then I was like … Part of the presentation was 8 to 12 was the average agent transaction-wise across the country and I was like, "Oh, no way. Wow, I've been really rude to people."
The best thing would be to start with essentially a lead gen and the numbers for yourself to build the system so that you can master the system, delegate it to another agent, and now you've got your first, essentially, employee. Where people mess up all the time that I see is they skip that step of proving out the system and go straight to trying to have an agent that they give it to and you're just teeing yourself up to lose a lot of money and lose opportunity and actual money out of your bank account.
My first hire in the real estate business was I guess I hired her as an assistant, secretarial role, and she ended up becoming basically my operations manager. She was just an awesome, dynamic person, much more talented than I realized at the time. But I would hover over her. I remember I was paying her $7 an hour and that was a lot of money to me that I was like, "I'm going to make sure my $7 an hour worth." I would stick around and see what she's doing. Then once I got on trust level, I was able to bounce.
After I hired my second agent in the business, what had happened was he started using her as his personal assistant. She's like, "Hey, Mike, he's calling me and asking me to do this." It was like one of those things that I just said, he could have done it himself faster than calling her and asking her to do it. It was like a clout thing for him. He wanted to have … This was my money he was spending. He was using this resource that I was paying for so I had to call him and nip it right away.
I'm like, "Listen, dude, this isn't your personal assistant. Here's her roles and responsibilities." Luckily, I had those dialed in, and I told her the same thing. I was like, "Hey, don't do that. That's not your job. If he asked you to do anything outside of the roles and responsibilities that we had put together, then come back to me so I can reel him in as well." She's like, "Oh, thank you." Obviously, I'm not dealing with somebody who's just trying to figure this out, you've put some thought into this, which is also attractive to people that you want to attract and hire.
I had her systemize every single thing that she did. I'm about to do this with our customer service role. I'm going to sit out there next week with them for an entire week, capture every single thing that they do, and then I'm going to systemize everything that we can basically use technology for without losing quality. If they're sending an email on a regular basis and it's not a formal email, that they just hit a button, boom. Little, teeny increments. Maybe it saves a few minutes here, a few minutes here but those compound tremendously.
I sat with her because I was having her create this system. I was like, "Okay, now watch me do this. Now, here's how you input a listing. You go over here, you click this. Write that down. Then you go over here and you do this, now write that down. Now, you go over here and do this." Then after, I would have her do it from the notes that she made, so now I'm watching her do it. Then after that, I would say, "Okay, now, take all those notes, clean them up, and we're going to make them into an operations manual," and that was that position. I just did that over and over and over with every position.
I still use those skills to this day in everything that we do. When somebody buys Market Maker, it used to be you push a button, now when the credit card goes through, the button is automatically pushed, everybody gets their different jobs and different tasks because it takes five or six people to touch an account to get one pushed out live from the developers, customer service people, pay-per-click, the whole nine yards. What has occurred is attrition in some of those systems so I got to go back in and tinker, get it all dialed in, then throw it back to Pat and say, "Okay, here's the new way that we're going to keep the trains running and make sure they stay."
Your likelihood of failure is significantly decreased.
In real estate, we can net a hundred grand in year two or three with much, much less capital outlay but it takes thinking like a business owner, it takes creating a franchise prototype and it takes you doing it first. You have to be the pioneer there. You don't have to reinvent the wheel, you just have to find the first system. I think the first system, is always going to be sales and marketing for any business.
You just have to surround yourselves with the right people. It's cool being able to jump on here. If I was a real estate agent right now and I was trying to become more of a business owner, my little booty would be on here asking questions to you because you've done it. If you had access to somebody that has done what you're trying to do, it's a good idea to utilize that resource.
When I was in Northern California, I had to drive through Facebook and Google's headquarters because I just had to see what was possible. I just had to visualize and see what that kind of a business was able to grow and look like and just drive through the parking lot, look at the building.
I think curiosity is a huge component of an entrepreneur and just wondering what's possible, wondering what you're able to do, and you'll find. You might be able to do a lot, lot more than you ever had dreamed. You might find that you're not able to do what you thought you were able to do, but it's okay.
You shoot for the stars, catch the moon on the way down or on the way.
If you can take anything away, get a good goal, rethink what's actually possible for you, what actually would make you excited to get up and work towards every single day, not just a rat race, not just like why you suffered through having to put in 18 offers right now for your buyers and stuff that are just getting whupped right now. It makes it all better when you have a good goal in mind and what that means for you personally and then just start with the numbers, reverse engineer it, get into having a system that you can predictably say, "If I generated at least a thousand leads over here, I'm going to get at least 10 deals over here, potentially 30 if I can really tweak my skillset." It's there. Plenty of people have done it, plenty people continue to do it. It's there, just go get you some.
Oftentimes, we look within our market and I think that that's a mistake. Look outside of your market. People outside your market are not going to be fearful to talk to you about how they run their business because you're not competition, you're not a threat. Anyway, like we said, you want to start with marketing. If you want some help with that, that's what we do a Market Maker. Go to https://marketmakercall.com, check it out, see if your area is available and if it is, we'll help you.