KGCI: Real Estate on Air - Power Half Hour with Brett Cleveland

Episode Date: July 9, 2024

Well, welcome everyone to the power half hour. Today we have a very special guest, whom I met back at the Build 2022 back in Dallas. And we just hit it off right off the bat here in Dallas. And he's from Minnesota, Mr. Brett Cleveland. Welcome to the call. Thank you for being here. Absolutely, sir. So, you know, every single week we interview a top agent.

And you've been in now in real estate for the last seven. years and obviously seen some ups and down in your own career. So tell us how you started first and foremost. Well, I got into real estate. I've got three young kids at home. I had two at the time when I got into real estate and I bartended for the last 12 years prior to this. Loved it. Worked three, four days a week and made 50 to 60K and I was like, this is awesome. I love my job. you know, money's good, I always got cash. And then, yeah, you know, my wife said, you know, what are you going to do when the kids are all in school

and you're leaving before they get home from work, or you're leaving for work before they get home from school. And then you're only seeing them basically in the morning before they leave on the bus. And I'm like, I never really thought of that. So, yeah, I started searching around and tried a few, odd-em jobs and

did some shadowing and things like that for insurance and for cell phone stuff and things like that and I went to a career seminar thing for for real estate with KW and it just

I don't know, just clicked I was like yeah this is definitely something that I want to do and so yeah I got my license in June of 2015 and then for the rest of the year in 2015 I did one deal so in that's six months and I almost got out of real estate because right before I had that one deal I'm just I was just getting ready to get married and no money's coming in and I'm you know and I'm working 60 hours a week you know trying to get this real estate business going and then four or three days out of the

weekend bartending until 2 a.m. and then I'm going right from you know two open houses to go change my clothes in the car and go in and go bartend for the next you know eight hours and I'm like this is just not sustainable I can't do this and you know I talked to a couple different agents that just said hey you know it's one of those things keep your head down keep pushing through there's going to be a moment where it just clicks and you're going to be surprised at it and it's going to change your life and you're going to be on track. I'm like, you better be right because I can't take this much longer. And then, yeah, so I got that one under contract that first year and then the next year, my first full year in real estate, I think I did 23 units my first

year and then going from there. So yeah. Yeah, okay. So I want to back up a bit because Because, you know, friends were telling you, you know what, just put the blind folders on. Just keep going because it's going to click. There's a moment that it will just click. And we have a very similar story. My first half year, I joined July 2006. And for the first six months there, I did two transactions. And I was on a team.

I made $2,500, my first six months. And I was like, oh, this is real estate, right? But, yeah, so 23 transactions in the first full year. Who were you talking to and how did you get that business? You know, I remember my first year I ended up taking bold, which I'm sure you're probably familiar. Okay. It was a real estate cost. It's like seven weeks and their big thing was, you know, do the bold 100.

Call 100 people in a day and I'll ask them, who do you know that is looking to buy, seller, invest in real estate that you can put me into contact with. I'd love to help them. Okay, so I tried to scrounge up every possible person I could think of. I mean, I took my mom and dad's phone book. I called neighbors that I've never met. I called great aunts and uncles that I haven't seen in 20 years. Hey, it's Brett Cleveland. Do you know me?

They're like, well, yeah, how are you? Is something wrong? And I'm like, no, I'm just calling to tell you I'm in real estate. You know, anybody looking to buy or sell that I could put in touch with? and I absolutely despise that. I hated it. I hate just, when I call somebody, I want to call from contribution and I want to say,

I'm calling you to invite you to something. I'm calling you to give you some information that could be helpful. Or I'm calling to give you a referral. You know, I feel like that's the better route now in my business. But when I first started, it was call every single person I possibly could find, do as many open houses as I possibly could do to get in front of the most amount of people. I remember when I was getting my real estate license, one of the professors or teachers was saying, you know, the more people you know, the more real estate yourself.

And I'm like, that's been a, just a staple in the back of my head that any chance I have to meet somebody new and have a good conversation, that's what I want to do. but I think I kind of answered but you have to do the uncomfortable work you have to talk to people that you knew or barely knew you and you have to straight up ask for business and I don't think there's any way around that

right to start off in your career right right because you know by second year third year more people know you and then you can then the conversation becomes a little bit better here hey I'm just giving you a call to give you a quick market update right and if you know anybody that has any real estate questions that can certainly help them right but

from the very get-go you have to ask who you know that's thinking about buying or selling that i can help and it has to be as straight as that but you put in the time you got to go for the work so how did you get over that you know you said i said thank you so much for being honest because you said you said you despise that but you did it anyways why i did well because i you know we were you know we were to hold ourselves as accountable as possible. And then two, I mean, I needed a deal. I didn't have any money coming in. My credit card bills are just adding, adding up. You know, my mortgage is getting harder and harder to pay for because I don't have any deals coming in. And, you know, at that time, it was like, well, it's feast or famine. I mean, it's do the hard work and eat the frog

and do the stuff that I can't stand. Or I have to go back home and show my, face to my wife and my kids and you're like, sorry, I'm not cutting it. So, I mean, it's one of those things. So I think especially, I always talk about this. Yeah, I think, uh, you know, you need to have the Y power. And for you, the Y power, and for you, the Y was not hard because you had two young kids, right? How old were they when they first started? Um, my daughter was one and a half and my son was, well, three and a half. Three and a half and one and a half, guys. And that is major accountability, right?

It's right there in front of you. Your kids are counting on you. Right. Right. And your wife's looking at you like, are you going to do a deal or are you going to go back to full-time bartending, which you will never be able to see your kids? So, you know, Brett had motivation. motive to take action.

Right. How would you advise younger agents these days if they don't have such, if they don't have kids, if they don't have, you know, something at stake, how can they motivate themselves? Yeah, that's a good point. You know, I think a lot of it comes down to kind of, I think the biggest part it comes down to is where your financial thermostat's at. And I don't know if, you know, a lot of people are aware what that is, but I look at a financial thermostat as, all right, how much, you know, how many, regardless of how many deals you want to do this year,

whatever, before you're breaking down your goals, how much money do you want to end up making at the end of the year? You know, do you want to end up making $30,000? Are you fine with that? Because then that's where your financial thermostat's going to be. You're not going to have a lot of drive to go past that. Now, if your financial thermostat is, hey, I am going to make $200,000 this year. I'm not going to, you know, take $150, and be happy. I'm going to make a hundred and $200,000. I'm going to make a make this much money. Then that's where your financial thermostat is. And I think that basing your goals off of that, you know, then if you do end up doing 175, it was really that bad? No. But I think if you set that financial thermostat a little bit higher, it pushes you more.

I mean, my first deal, or my first year in real estate, my first full year when I did 23 deals, I said, I was like, I want to make 80 grand. Like I think that would be so awesome if I, quit my job making 50 to 60 and I made 80 my first year that'd be so cool and I think I ended up making 79,000 like 700 and something like almost hit 80 wow it's so crazy that that that's my financial thermostat that was what it was that year and so I said I want to make this many deals and this is what I'm going to you know push myself to do that's so it's amazing you know guys when you write your goals down, this is just something happens in your mind that once you put that down, it's like you decided that that's what you want to make and eventually it will happen.

I don't think Brett was very upset that he hits $79,000, almost $80,000, but because he wrote it down and he put in the work, right, and it becomes real. How important is goal setting for real estate agents do you think, Brett? Oh, it's the biggest thing. I mean, I think it's, if you don't have anything set and you don't have anything to look at and strive for, you're just going to get complacent. You're going to be like, yeah, yeah, I'll make my five calls today. And if my phone rings back this week, cool. You know, I think if you don't set those goals, you're not going to, I think there's a, I don't have the staff.

But I know there's like a, there was like a Harvard study of how many Harvard graduates would write down their their goals for, 20 years after graduating college. And like out of those 20 people, or, you know, whatever, they did, like, 95% of them hit all their goals because they wrote them down. And then the other 20 people that didn't write down goals, only, you know, four were out of debt and, you know, whatever. It was, I don't remember the exact stats. But I've heard that analogy before, and I think that, yeah,

having that visual board or, you know, whether people do a vision board or they do you know, set their goals, whatever those goals may be. I mean, I set mine up where, you know, this is the amount of, you know, volume I want to do for the year, this is the number of transactions, the number of units, number of GCI. And then on top of that, too, then I'll, then I'll write another column of my other goals where it's like, I want to read, you know, at least 12 books this year. So one a month, I want to, you know, pay off my wife's vehicle. I want to invest. I want to, I want to get a buying Airbnb and a long-term rental this year, you know, or whatever. And I write that whole list up, and there's nothing more gratifying than to be able to

just cross something off that list. You'd be like, you know, because even if, even if my goals are, you know, my GCI goals is, you know, it's $50 million. Well, if I look back on my goals for the end of the year and I do $40 million, if that's still an upgrade from the year before, I mean, that's progress. It's something that's pushed you. Maybe the goal is too high, but at least push you to get close to that peak. You don't climb Mount Everest in a day.

You have to do it in increments, and you have to train your body and train yourself to, you know, get those goals bigger and bigger. That's so great. So great. You know, we set goals to have a destination. And, you know, if you don't have a destination, just like, you know, you get into a car. And then you're like, okay, where are we going? Well, I'll just drive. Right.

It's kind of like that for goals. You have to write something down. You have to put something in the GPS or else. How do you know where you're going? So put something down and it will happen as long as if you put something down and you drive, you'll get there. Just like real estate, it's you put the goals down and you keep working. You will get there. But I think another thing is what I what I read today.

from the book traction is that we have to enjoy the road to the destination. There's this place in Maui called, well, they call it the road to Hana. Oh yeah, yeah. And Hana seems like this magical place. Yeah. So the road to Hana is absolutely beautiful because you all have this scenery, the roads are beautiful, right? Beaches, whatnot. And when you get there, it's this little town of nothing.

and it's got one gas station. And they're like, hey, what the hell? We drove five hours to get to HANA, which is a POS kind of place. But you missed the point. And I think in real estate as well, we need to enjoy the journey instead of getting to the destination. Or else, you know, if you're not enjoying this, you know, you're not going to be happy when you get here. It doesn't matter. So how important is it for you to enjoy the journey in real estate, do you think?

Yeah, I think that's. That's why we're all in this business. You know, like, we want to, we want to have that flexibility in our schedule. We want to have time to, you know, travel and have time to golf and have time to, you know, enjoy our family and things like that. So, I mean, I look at real estate now, I think, a little bit different than when I first started is, you know, when I first started, it was always like, how am I going to double my goals? How am I going to get, you know, do more and more and more and more. Well, I've done, you know, I've done years where it was. over and beyond what I was anticipating, you know, making.

But then also I look at that year and I'm like, I was working a lot. I mean, I was working three, sometimes four weekends a month and all day during the day and, you know, putting all those hours in, yeah, I made more, but also at the same sense too, like, last year I made a little bit less. I worked one weekend every, probably two months. I did a little bit less than deals. I just cut back on my business and I'm

very lean. I run my business very lean. So I don't spend a bunch of frivolous money on advertising and, you know, billboards and anything crazy like that. I go old school and go back to the basics and I talk to people I know, people that know me and love me and trust me. and I run it lean and if I want to, you know, if I get a call from my wife in the middle of the day and it says, you know, me and my, me and our daughter want to come have lunch with you. Sweet. I'll call up my next appointment, move at an hour, and go sit and have lunch with them. You know, I'd rather have that freedom and that, in that family life too because that's the most important to me

than doing more and more and more and more and more every year, you know. But I mean, everybody's different. Yeah. And, you know, we all get caught into this like more, more, more, more, more. And we forget that what's really important is family. What's important is, what's really important is health. And we don't live to work. We work to live our lives.

And real estate, again, it's just a platform for us to achieve our goals, which at the end of the day, which is spending more time with family. you know having freedom options and choices right so i i really like that the way you think so how did you go from being super unbalanced then to being super balanced like okay and and how did you how are you then okay with less income because a lot of agents like endless it's i just want to i just want more more more more right right uh you know i think i think uh it really got to a point when, you know, me and my wife had to have a serious sit down because it was like, hey, you're not home. Like, I didn't, I didn't sign up for, you know, to have a husband that's

never home. I don't care if you make a million dollars a year. Oh. Oh. I want to see you and the kids do too. Wow. You know, I mean, and it's, and it's true. And it's like, well, yeah, maybe I had my priorities wrong. Like, that's, that's a really good point. Like, like, obviously, I don't want that to go, you know, I don't want that to go. You know, I want you guys to be happy. This is why I'm working so much just because I want you to be happy. And I think the biggest thing was then prioritizing and then setting those expectations with my clients too. So, you know, when I meet, when I have a buyer rep conversation with a new buyer and I say, all right, I've got a very flexible schedule except for Sundays is my family day

and I'm not negotiable about that. And I said if you want to see a property in its last minute, I'm going to do my best to try to do it, but if I can't, I'm going to schedule it the next possible day. I have a big database of people and other agents that I work with as well, too. So there may be a time where maybe they show you a property. But I'm going to do my best to get you in there to provide that good service to you. But I said also, you know, I do have a family and other, you know, responsibilities with my kids and things like that. So I just set that expectation up front. And then after that conversation I had with my wife, I basically said,

said, all right, I'm going to cut this down and I'm only going to work one weekend a month or two weekends a month. I don't remember when we first talked about. I think it was, and then I always make sure that I'm at least home for dinner two nights a week. And usually that's like four. I'm home. Because I just, I just scheduled it around. It's awesome. You know, if I'm talking to the client and they're like, well, we can do this listing appointment, but we want to do it at seven o'clock at night on a Wednesday or a Friday. I'm going to say, okay, well, I can do it Thursday at 5 or Friday at 4.30. And they're like, well, I've got to work. Well, if you have a dentist appointment, you take off a little bit early for work to go to that dentist appointment, right? We're going to

be selling your home that's worth hundreds of thousands of dollars. Can you meet me at 430? You know what I mean? And in a lot of times, they're like, yeah, good point. Yeah. Yeah, we'll do that. Yeah. Good for you. Good for you. You really, you know, family is first, but it did not come until your wife had to have that, you know, come to Jesus' conversation, right? It wasn't fun. Yeah, Fred, I still remember this, that's plain. It wasn't fun. Like, I remember this plainest day.

I don't know if you remember what I shared on a bill, but I came home one day and it was 2011, one year into our marriage. And there my wife was, and she's listening. And, you know, she was in front of her computer. And I would ask her, what's wrong? What's wrong? It was like 11 o'clock at night. I had been out since 7 o'clock in the morning. And then she would say,

when am I going to be happy again? Right? And that's like, ouch. Right? So you never, guys, if you are married right now,

you never want to have that conversation with your spouse. And, you know, communication is key. Right. And I think if you take care of things at home, then business will blow up anyways. Right.

And I think it's just that simple. If you take care of this, if you take care of your health and you take care of your family, everything else just comes together so nicely, right? And I think I learned my lesson the hard way. But yeah, thank you for sharing that, Brett. Oh my God. Oh, yeah, I was, I was over the terrible about that. It's fine. Yeah. Yeah, what? Yeah, you said ship gears? Yeah, ship gears. I want to talk a little bit about the market. I know the market right now for, this is the topic right now, is that it's changed. changing and it's changed and it keeps changing and the interest rates are going to go keep going up

How are you seeing the market as we go along and what are you doing differently? Sure. I think I think you know with you know on the list side I primarily work with listings so when I'm meeting with them and they say well you know my cousin sold his house in May and You know he had 14 offers. We got 40,000 over and like that's great and that's awesome for your cousin for timing that really well, but that's not the market that we're in right now. And so we need to be a little preemptive, price it aggressively on the front end. And then that way, then we're not having this conversation in 30 days about how big of a price reduction do we mind yet because we're way over price. We're not getting to showings. So that's price point. And this is what it's like this,

you know, right now because interest rates are higher. but you're not paying 50,000 over and you are probably a home warranty and you're, you know, all of these things that are, that are buyer and send make the numbers work for you. Because at the end of the day, it's wherever your comfort level is, you know, with your mortgage payment versus, you know, what the actual house for home price is. Yeah, so on the selling side, you are setting up the expectation that, hey, you got a price ahead of the market or else you're going to keep chasing the market downwards, and we're going to keep reducing, right?

And we're never going to catch the bottom. If you price it ahead of the market, you can catch the market, if it cash the price before it falls even more. And on the buyer's side, it seems to be trickier because there's so many more things to kind of deal with because the interest rates are going up and your payments and your approvals. It's all different. What are you saying to buyers who tell you, the market is too uncertain. And I want to wait it out, Fred.

what do you say to that? Sure. And a lot of times they're going to say, well, I don't know, maybe next year. Okay, great. Well, say we're at a 6.75 interest rate right now, right? And they go up again in the rest of this year. What do you think is going to happen? How many people are in that boat right now that are saying,

I'm going to wait until the spring until it drops. And then the interest rate will be great. Okay. also competing with all of those other thousands of buyers in this spring that are also thinking that same being right now. So you're not only, you're not only, you know, you're getting a lower interest rate maybe, but you're also competing with seven other buyers. And you're probably not getting an inspection. Yeah. And you're probably not getting a home warranty.

And you've got to probably see the house the day it hits the market or you're going to lose it. where right now, buyers have the power. I mean, in my market, that's what the buyers have the power right now. I just had a listing go active, a week and a half ago, I think, a week ago. So we ended up getting multiple offers

and getting to, you know, get in there and negotiate a little bit better and then getting, you know, over asking price. Versus, you know, waiting, I think waiting to the spring is just going to be tough. thing with sellers you know sellers right now it's kind of a damn if you do and damn if you don't kind of thing too with you know if you wait right now or if you list right now you're obviously going to be you know probably not getting top top dollar for your home versus in the spring if we do see a drop in the price in the spring now it's like a beauty contest on your street you know if you're

if your house is one of one of six going on the market you better be the prettiest one at the prettiest price or you're probably not going to do very well now if you're the the only one in the beauty contest we've got pretty good odds of winning yeah it's always a price for in a beauty contest for sellers right and especially in the market condition like this but what i'm hearing you say is that if you're on the listing side you you price it ahead of the market you're sometimes you still get multiple offers and bid the price up it's possible right so setting a expectations with sellers and really having those in-depth conversations with the buyers as well, you know, letting them know that you're getting at a, getting the home at a lower price right now,

however, at a higher interest rate. But when the rates come down, you know, you win because you got it at a lower price. Instead of buying next year when the prices may go up again when the interest rates come down. But competing again with like five to 10 other offers. Right. Oh, yeah. Because then we're going to get right back into the whole thing. time this is what you look at exactly exactly yeah so how long do you think this will last this

this little uh shift right now how long do you think it would last crystal ball question yeah right uh gosh i you know i hope it uh you know i don't i don't know what's the prices can come down a little bit so especially on the investment side it's not so crazy and then and then also the interest rates you know I think if we stay around a five to six mark, I think that's going to be just fine. It's just, I think, when we start getting into seven rates and higher, then it just really scares you. And it does really affect your bind power so much. Right. So next year, guys, fall.

And I'm hearing that a lot, mid to late next year, the market will start to balance out a little bit. So real estate agents keep working, put the blinders on and just keep going. especially for any newer agents winter's coming so this is what I would say and this would be my recommendation especially for anybody that's been in the business for just a you know a couple years um stockpile your reserves right now and not being financially prepared that'd be my my biggest thing put some money away don't don't you know going oh I had I had three closings in November kids we're all going to Disneyland and you get a hot wheels car and you get a You know, you get a new snowmobile, like just pump the break a little bit.

I would say, you know, that's maybe just the conservative side of me. But I like to just focus through the winter, you know, and at the end of the, you know, spring comes and I've got my stockpiled amount is still sitting there, the same amount. Well, then perfect. Sage advice, Brett. Thank you so much. And, guys, stockpile your money right now. Don't go crazy. It's really, really good advice, okay? And guess what? Look forward to it.

Keep working. Keep put the blinders on and make it a great finish. All right, Brad. Thank you so much, sir, for sharing all your insights. Have a great day.