KGCI: Real Estate on Air - Advanced Scaling Secrets in Real Estate

Episode Date: June 21, 2024

The challenge is that we give no breathing room to the manager or the entrepreneur because we're grinding out transactions and we're doing all the minutia in our business. And we're just on the transaction treadmill and we're not taking any time, you know, out of the dirt to sit a little bit in the clouds where we can look at our business and just analyze what we're building and where we want to be in the future. The real estate industry has failed to create a clear path to time and money freedom. Having helped over 5,000 families in my real estate career and coached thousands of agents to scale their businesses, I know what works and what doesn't. And my goal on this podcast is to share it all with you, the good, bad, and ugly of building a highly lucrative lifestyle business so you can focus on what truly matters in life.

You won't find any hype or fluff on this show, just real world tactics and strategies that get results. You just got to do the work. What is up, real estate business builders? Today we're going to get into advanced scaling secrets. And this is probably more for, well, let me say it this way. It's for any agent or team leader that's not where they want to be. And you have a mindset that is wired for growth. So I'm not going to discount those that maybe are newer in the business or those that

maybe aren't at the production levels that you want to be. So this is for any agent or team leader that wants to get their next 500,000 GCI a year. And I'm going to go through three leverage points specifically. And I was thinking about this training as I was preparing for today. And just kind of I was sitting outside with a cup of coffee. My dog was with me. And I was thinking about, you know, the journey. And here it is in a nutshell.

And here's what I want you guys to understand. And I'm going to get into the three things specifically, the three critical leverage points. I've taken notes. I'm well prepared. Trust me, I want to lay the backdrop for this conversation. So essentially, in a very challenging, and it was different than the market we're going through today, but in my market from my first full year to two to three years later, our real estate roster, so the number of agents in my market went down by 67%. So it went from 15,000 agents to 5,000 agents. It was the great recession in years.

It was really, really bad. A different environment, because oddly enough, there were like too many listings. So we're having the exact opposite going, but there weren't any buyers. Everyone was freaked out. It was the end of the financial world as we knew it. So there was just less income available for the agents that were hanging in there and trying to sell houses, right? And so the same thing is happening now, but a different dynamic.

There's just less income available for the agents that are retaining their licenses. It's estimated about 10,000 agents every month have left the industry. And if that holds true for the whole year, there's roughly about 2.4 million agents or so, maybe about 2 million agents if 100,000 leave the industry this year, even if 200,000 leave the industry this year, that's only a 10% decrease. So I was in a market where I think like nationwide, 30, 40% of agents got out of the industry. So when I was sipping my coffee this morning, kind of thinking of this conversation and adding as much value as I possibly could to anyone that wants to scale their sales,

I came up with three things. And I'm going to give some stories and real world experiences that will allow you to take these three leverage points and apply them. in your business today and over the coming months and over the coming years. So you can really achieve at any level that you want to. So the first thing that I realized and my first coach in the business, there was some things I didn't love about that coaching program, but he turned me on to a book called E-Mith revisited by Michael Gerber.

And I've actually recommitted to reading it again. Essentially, E-Myth stands for entrepreneurial myth. We decide that we want to go into business ourselves. And then we think we're a business owner, but we're like the worst boss ever, right? We don't work the way we should have the time. The business doesn't get done what it should get done all the time because it's us having to do all the work ourselves. And it's just this myth of like you don't really own a business because you can't ever step away from it. So in the book, though, they talk about three personalities that we have inside of us.

And this will resonate with you if you're sort of a real estate agent or team leader, but you're an entrepreneur and you just so happen that you're choosing the real estate industry to build your empire. This will really resonate. Inside of each of us, there's a technician, a master, manager and an entrepreneur. A technician is the agent that does all the stuff. You're putting listings in MLS, you're running signs around town, you're designing brochures, you're, attending closings, and 25, 30, 40, 50 other things that you could do. You're doing all your social

media. That's all the technical work. The manager builds systems and is the is the the bridge between where things are today and where the entrepreneur inside of each of us envisions the business to be. So hang with me. I know this is 30,000. I know we're in the clouds. I'll land this thing in the dirt here in a minute. So the technician does the daily grind of real estate.

The manager in us, if it even exists, is the part of you that knows. And this is the first critical leverage point is that a business is a system of systems, right? So that's, if you're taking notes, write that down, a business, a true business is a system of systems. And so there's the technician, the manager, builds the systems and bridges the gap between the daily work and the vision of growing a multi-million dollar real estate business. The entrepreneur is the one that is casting a vision and living in the future. So if you look at your calendar for the last 90 days, have you spent, spend any any time, you know, visioning and writing down your three-year vision, like, where could this

business be in the future? Have you spent any time building systems out? And I'm going to go through what some of the core systems are so you can get an idea of what they actually are here in a second. Or have you spent all of your time just doing the technical work? And the traditional way of doing real estate is that there isn't any conversation about entrepreneur, the entrepreneur inside of us. There isn't any conversation about the manager inside of us. It's just like, just do the work of a real estate agent. All of the MLSs thrive on a bunch of agents doing a low level of production. It doesn't cost you any more for your MLS dues if you sell 50, 75 or 100 homes or if you sell 5, 7 or 10 homes. The MLS still gets paid the same amount. So it does not

help any traditional method or organization that serves our industry, it doesn't help them to teach you how to sell more homes and to view your business as a system of systems. So a real world example for me was when I was working with buyers, my business was buyer heavy those first two and a half years or so. I figured out a very simple lead search. It was home search leads. We still get them to work at a 10x plus ROI as one of the lead gen leverage in B-School today. Back then, I don't even know what my returns were, but I was just generating simple home search leads.

So buyers that wanted to look at properties, and I would just time block and have conversations with these folks. And so it was really buyer-heavy. And as a result of it being buyer-heavy, I was working all these crazy hours. While I was doing it, though, I had this mindset of growth, and I'll talk about mindset as one of the critical leverage points here. I had this mindset for growth and I knew that if I was going to get out of, you know, being the one that had to have all the conversations with these buyers or being the one that had to, you know, show homes, you know, to all these buyers.

That was the first thing that I exited, you know, when I, you know, focused on building system is like, I don't need to be the one to see all the homes that my buyers are not going to buy. Right. So I got one of my junior agents to show my client's homes. and I built a system around exactly how I wanted homes to be shown. You just build a system for how you want homes to be shown, and then magically you're out of most evenings and weekends. And on average, I paid less than 10%. Back then, I only made about a $7,500 average commission check or prices were a lot lower.

And so I paid about $500 to $750 all in for someone else to do about 90% of the activities required to get that, that buyer under contract. I maintain the relationship. So I still called them after they saw a bunch of homes. I still previewed the home that they were going to buy. Sometimes I wrote up the contract. I did the difficult part of the transaction, but I didn't have a lot of time in the transaction

because most of the time is showing. So that's an example of how you could build a system that can provide leverage for you to scale, almost to the point where if all you had to do was give a buyer consultation, generate a lead, set an appointment for a buyer consultation, do it virtually or in person, sign them up to be loyal to working with you, and you sent them out with showing agents, you could work 40 hours a week and sell 50, 75, 100 buyers in a single year, right? But agents traditionally don't think in terms of systems. Okay, so that's an example,

a system of systems. One other example I'll give you, actually two more, is that I was never much of a coal caller. I was more an attraction marketing approach, content marketing, that sort of thing. And I guess I would say like marketing based prospecting enhanced. So I still would make the calls and I would track my numbers and all of that stuff. But I wasn't cold calling. I wasn't like mojo dialer. I wasn't hardcore. And we still roll for the most part, we roll that way in Real Estate B school. It's, you know, how can we put, you know, these oil rigs in place, these systems, these marketing systems where the systems can generate, you know, high quality, low cost, high quality buyer and seller prospects, right? So marketing and all the little lead gen levers that we put in place, those are all examples of systems that will allow you to scale at a very high level in your real estate business. So, again, the first critical leverage point is that a business is a system of systems and you have to really figure out where you're spending your time, right?

Are you all technician and you're only focused on doing the job of a traditional real estate agent? Or are you carving out a few time blocks a week to sit and think about the future? That's the entrepreneur inside of you. Are you building out systems so you don't have to do all of the work all the time, right? even as simple as hiring a virtual assistant, right? We have high quality virtual assistance in Brazil, Colombia, Philippines that are running critical parts of our business, but they're not getting paid what they would if they were, if they had that skill set and they lived in New York City or Miami or Charlotte or wherever, right? they just so happened that I can pay them $5 an hour and that's getting paid more than double what they were getting paid when they worked 50 hours a week in a hotel and they weren't happy

at all with it. Right. So again, thinking about your business as a system of systems, you spend time as the manager, you build the system and you hand it off to a virtual assistant or an assistant or a local runner, right? I won't even get into that, how much time we spend just running around town doing basically business errands and thinking that we're going to get paid a lot of money for it. All right. So that's number one. Number two, critical leverage point. And guys, I've not seen any agent scale their production to three, four, five, eight, ten, fifteen, twenty transactions per month without knowing your numbers.

So massive leverage point. I debated if I was even going to cover it. I just had to be honest, though. Your ability to say, scale your business starts with your ability to know your numbers. And I'm going to go through the numbers that you need to know. And inside Real Estate B-School, we have very, very simple, easy-to-use trackers for every aspect of the business. But I just want to kind of lay the groundwork here for the core numbers that you'll need to know. On a very practical, and this is in the dirt as a salesperson, like very detailed, tactical, you need to know your numbers on a daily basis. Meaning, very simple. How many meaningful conversations are you having every day?

How many appointments are you setting? How many did you meet? How many new clients did you sign? And how many closings did you have? Very, very easy. The leadingest indicator to your success. well really two because you have to judge how many people say yes but how many conversations are you having every day with would be buyers and sellers and then we have marketing scorecards we have

operations scorecards we have financial scorecards but just based on the core activity of the traditional real estate agent you have to get your point you yourself to the point where you're tracking your numbers and you're focused on that pipeline because most of what I talk about can really really kind of comes down to this slide here, the game that we're playing. So when it comes to knowing your numbers, these are the critical touch points. Yeah, we need to know on the left-hand side. You know, that's where most coaching programs or everyone's sort of a coach these days, they're teaching lead gen tactics.

Very, very tactical. It does not give you the ability ultimately to scale in the long run and gain any freedom whatsoever. And those aren't even one of the touch points, right? One of the five important numbers that you need to track. We do have more marketing scorecards. So it's important that you know, if you're paying for leads or if you're doing putting time into social or you have a YouTube channel or you're doing direct mail or you've got yard sign and Craigslist still even works or you're doing email marketing or mass media referral marketing or you're doing telemarketing, right? There's all these things you could do on the left-hand side, the game really doesn't start until you hit

those meaningful conversations. Are you setting appointments? Are they showing up pre-sold? Are they signing on to work with you as buyers and seller clients? And are you getting them to the closing line or the finish line, the closing table where they're just super happy to be, you know, to have entered your world and you delivered an experience that they never thought they would have experienced. And as a result, they are singing your praises. And that starts its, a virtuous cycle of more business comes back to you when you handle that entire process the right way, especially contract to closing. Well, new client to under contract to closing. We have a lead gen lever called client care as a lead gen lever because you can turn one client

into two to three closings if you handle that process correctly. And you just knock their socks off with the service you provide. And that's where business gets fun. So know your numbers. track them daily. There's other numbers you need to know. We track financials. We track, you know, how much listing inventory. We've got sort of a consolidated weekly tracker as well. I'm just going to start at the basic, you know, sales daily, weekly tracker because it could get a little bit. I could lose you guys real quick if I spent too much time on numbers. But even if you're not good at numbers, it's not really hard to do once you learn how to do it the right way. So that's number two, know your numbers.

So a business is a system of systems and thinking about your business as such. Your business is predicated, the growth is predicated on you knowing your numbers and anyone you bring in your world. It's easy to scale. Number three, I would say I covered it a little bit. It's this mindset of a business owner. So when I just sat down with a blank piece of paper, And I was thinking of the critical leverage points, the three most critical leverage points.

This one I probably could have put at the top and 80% of your success in terms of being able to scale your business. So you can build a business that's worth owning so you could live a life worth living. So you could have an extra $20,000, $40,000, free cash flow coming in every single month. it comes down to your mindsets. And let me break this down specifically. And there's a few things that I want to unpack here. If you come into your business with a traditional mindset, okay, I'm a traditional agent,

you know, of course I'm going to do all the things. Of course I'm going to run a yard sign out. I'm going to put a lockbox on. I'm going to, you know, deliver the brochures. I'm going to hold the open house. I'm going to show homes to buyers. I'm going to enter listings. to MLS. I'm going to take my own photos. I'm going to, you know, do all the things.

When you really start to like look at all of those things from like not the 30,000 foot view, but the thousand foot view. And you look at like, okay, to be a successful real estate agent, you know, all the things that you need to do, how much of them actually pay really well? Right. How much of the things you do pay you. pay you enough money where if you could replace all the low dollar activities with all of the high dollar activities over a series of quarters and years, you wouldn't recognize the business you had. And that's how you had in the future. And that's how a business owner thinks. The business owner, the guy or girl that owns a McDonald's, they're not worried about, you know, did,

like, is the burger temperature, you know, right? You know, is the restaurant clean, you know, is whatever, right? Is the parking lot clean? Is, are the fries soggy? You know, there's a manager in place that, you know, everyone has their position. There's standard operating procedures and specific ways that that business runs so that you so that the owner of that franchise can you know their role is just to pick up the cash and so I'm not saying that that's your ultimate goal there is a scene though I will say in the movie the founder with Michael Keaton it's based on it's the story of Ray Kroc and and the McDonald's story and I've shared this there's a video on YouTube totally worth

watching. I think if you go, the founder, Speedy System, so S-P-E-D-E-E-E system, it's the McDonald's brothers on a tennis court, and they're on like this ladder, and they're basically, they drew out, you know, the restaurant, the inside of the restaurant from order to place to order, you know, delivered, which is the same as the game we're playing, same as the slide that I just pulled up. And I know we're doing something different than flipping burgers. So just hang with me on the story. But orchestrating like where does this person have to be, you know, so that everything is

timed the right way. And they redrew everything and they erased that the, they started over. And, you know, at the end, you know, one of the McDonald's brothers was like, it was like a symphony. And he was like waving his wand. And, you know, so the mindset you have to have toward your business, if you want to make a ridiculous amount of money and have like weeks and weeks of vacation and not work evenings and weekends and take way more money than you're taking out of your business. And it doesn't mean

you build a three or four or five million dollar business. But even the path to a million dollar business is not complicated. But it starts with mindset. The mindset of identifying those activities that don't pay you a lot of money and then going through a process where you're going to identify the things that don't get paid you, that don't get you paid a lot of money and delegating out of those activities or automating or deleting them all together so that you can elevate. Inside Real Estate Bs, we have a 90-day cycle, a quarterly cycle where every quarter, I do a business planning workshop every quarter with all of our members. And we do this exercise every quarter. And it's on a grid, a two-by-two grid.

Essentially, everything up top are your high dollar productive activities. And the line in between them, whether they're a low passion or high passion. Below the line are all the things you do on a regular basis that don't pay you a lot of money, even if you are passionate about them. So showing homes, I can argue this till I'm blue in the face. You may love showing homes, but you can hire a world-class best in the business showing agent in your market that will honor the fact that you have the relationship with your clients. I'm in a major metro market and I can get them for $25 to $30 an hour. And they'll put it in a lot of hours, but all they do is show homes. So you probably can't employ them full time.

but the mindset, again, we're talking about the third critical leverage point is mindset. The mindset that you can't do everything in your business if you want to double, triple, quadruple, 10x your income. I'm talking about putting you guys in a position where you can like exponentially grow your income, not like linear growth, not if you took home 200 last year, how can we get to 240? I'm talking about going from 200, or let's say you took home 100. I'm talking about going from 100 to 200 to 400 to 800, right? That's exponential growth.

It's doubling every year, right? That's the kind of growth that is possible if you employ these three critical leverage points. So I'm going to go back and summarize them if you're sort of late to the party here. The first critical leverage point is that your business is a system of systems. And all of these kind of work together, all three of them. And I gave the example of Emyth Revisited. We're inside each of us.

We each have the technician, the manager, and the entrepreneur. The challenge is that we give no breathing room to the manager or the entrepreneur because we're grinding out transactions and we're doing all the minutia in our business. And we're just on the transaction treadmill and we're not taking any time, you know, out of the dirt to sit a little bit in the clouds where we can look at our business and just analyze what we're building and where we want to be. in the future. Systems are in, you know, building these oil rigs in our business around marketing systems, lead nurture systems, our buyer consultation framework and presentation,

buyer packets, our pre-list packets, our listing packets, our listing consultation frameworks, virtual versions of each of them for folks that may not be in a position where they want to meet with you, but you want to warm them up to use you as their agent. All of those are systems that you need to build out in your business if you're going to be able to, to, again, exponentially grow your income in your business. That's number one. Your business is a system of systems. Number two is knowing your numbers.

I have not met anyone that has scaled their income dramatically. I'm talking about exponential growth. I'm talking about going from 100 to 200 to 400 to 800 that hasn't known their numbers. Now, in every function of your business, there are numbers to know. So there's a marketing scorecard that we employ. Very simple. you know, has all your social metrics, your email marketing, your, all of this stuff, right? Then you have your sales scorecards.

So there are numbers to know in sales. These are the numbers I talked about. Most of you are probably at the point in your journey where you just need to double down on how many meaningful conversations a day, how many folks agreed to meet with me, how many actually met with me, how many signed to work with me as their client, and how many deals did I close? And there's other things. And then we have an operations or client care scorecard.

How many reviews did we get? How many referrals did we get? And we had like five or six other metrics that we track in just operations. So every part of the business. And then if you're building a team, we have a recruiting scorecard. The point is that if you're not tracking any, then we have a financial scorecard, weekly cash flow, weekly inflows, outflows, all of that good stuff. And then we do monthly and quarterly and year-to-year comparison and margins and gross margins.

And that's a little bit more advanced. but again, essentially becoming the CFO of your business. A good CFO has data that they're looking at in the business where they can make good decisions about the strength or weaknesses in the business and then act accordingly in the business. So that's number two is knowing your numbers, becoming the CFO or your business. Number three was more about mindset.

You know, this thinking and acting like a business owner, even if it's just you and your business today, decide today that you're going to start acting. and thinking like a business owner. And even if you're stuck, showing homes an hour and 15, an hour and a half from your house like I did in the early days in real estate, you're doing it because you know you're building the foundation, the systems to not have to do it in the future, right, to get some leverage in that part of your business.

And so that, you know, the mindset of becoming a business owner fits into the other two, right? You're building a system as a system of business, a business is a system of systems. and then knowing your numbers are two critical parts. But the underlying, I think the 80% of it is just making this decision to become a business owner. And the whole process of delegating so that you can elevate in the business. And then the backdrop to all of it is that you have this very clear three-year vision about where you want to be, your business, where you want it to be, what you want to be doing in the business,

and what technology, what systems, what automations, virtual assistance, showing agents that you'll need to be able to get there. So, man, I think I talk non-s. I don't think I've breathed here for 28 minutes, going on 29 minutes talking at you guys. So the plan is every week to come in for about a half hour. Some will be a little bit higher level, a little bit more in the clouds like today's.

Some will get really tactical. And I'll talk about like these are the four listing legion levers. probably do a more tactical one next week. I will let you guys know exactly what it is. If you're at the point in your journey where you know you want to have a conversation with me and my team about what it could look like to get on this exponential growth trajectory and get a clear roadmap in place to do it, I don't have anything to offer you except a conversation about where you are in your business. And if you go to REBSGrow Assessment.com, there's a page there where you can literally just give us your information.

There's a short video you can watch, but just give us your information, book in a time to speak with us. And we're not going to hardcore close you into real estate B school. It's not for everyone. But if you're stuck at a point in your business where you know you want to grow, you want to take home an additional $20,000, $30,000 free cash flow each and every month, then we can have a conversation about it. And then we can talk about where are you today?

where do you want to be in the future? What have you tried or what are the obstacles or what's what's kind of getting in your way? And then we can get to work on like if it's a good fit, we'll talk about it. If it's not a good fit, we'll send you somewhere where you might be able to be served a little differently. We specifically cater to folks that want to grow and scale their business in a very considerable manner. Not the traditional agent that wants to go from six homes to 12 homes. It's okay if you're at six homes, but you're, you need to want to go from 6 to 12 to 24 to 48 to 96. That's the kind of agent we want to work.

I'm even banging my hands on the table. That's the kind of folks that we want to work at Real Estate B. School. So if that's you, go to R EBSG Growth Assessment.com. I do have the benefit of working with hundreds of agents all across the country. I run a very large, high-level organization. Did like $4 billion or so this year in my entire organization. and 73% of it is listings are our listings.

So most of our, we do a weekly production mastermind in real estate B school as well. And most of those masterminds, once you're on the inside of real estate B school, are listing focus right now. And like how can we, what can we do to get out there and get more listings? So I've been learning a lot from all agents

at all points in their journey that are absolutely crushing it right now. Like crushing it, multiple closings a week, mostly listings because they're employing, the things that we're teaching. So stay tuned for next week. It'll be a fun one. And I'll go a little bit more tactical. And if you're at the point where you want to have a conversation with us, don't hesitate, take action, put the application in for a call, rebsgrothassessment.com. Much love, much respect. We'll talk to you guys soon. Be good. Bye-bye.