The Science of Flipping - Episode 137: Who do you hire and when? – Real Estate Investing

Episode Date: January 31, 2019

document.addEventListener("DOMContentLoaded", function () { podlovePlayer("#player-5eb5ab2fef97c", "https://thescienceofflipping.com/wp-json/podlove-web-player/shortcode/post/3020", "https://thescienceofflipping.com/wp-json/podlove-web-player/shortcode/config/default/theme/default"); }); document.addEventListener("DOMContentLoaded", function () { podlovePlayer("#player-5eb5ab2fef9f8", {"title":"Episode 137: Who do you hire and when? - Real Estate Investing","subtitle":null,"summary":null,"duration":"","poster":null,"chapters":"","transcripts":"","audio":[{"url":"https://audio.simplecast.com/c798b3d4.mp3","mimeType":"audio/mpeg","title":"AUDIO/MPEG","size":0}]}, "https://thescienceofflipping.com/wp-json/podlove-web-player/shortcode/config/default/theme/default"); }); If you want to know when the right time to hire and who you should be hiring, then this is your episode. Get a Free Coaching Call with TSOF team. CLICK HERE TO FILL THE FORM. JOIN MASTERMIND  — APPLY NOW!!

Welcome to the Science of Flipping Podcast. I'm your host, Justin Colby. What is up, everybody? What is up? Welcome back to the Science of Flipping podcast. I am your host, Justin Colby. And if you are watching this on YouTube or Instagram or Facebook or any of the platforms, I really encourage you to go over to the website. We have the Science of Flipping book that I'm absolutely giving away for free, thescienceofflipping.com forward slash free dash book, the scienceofflipping.com forward slash free dash book. I encourage you to get there, download the book for free. But this podcast is all about the systems and tools and structure I've used to now build a seven figure a year real estate business here in Phoenix. We have been flipping since 2007. We've done on the verge of 900 homes here. And so we're excited to be able to bring you the best strategies I possibly can. So today I'm actually going to be

reviewing something that I had a conversation with a private client of mine. And it brought up a subject that I think a lot of people are interested in, which is when to hire, who to hire, who's your right hire. Um, you know, when's the right time. So this is something that I have done a lot of research on. And by research, meaning I've done this often, uh, not only have we hired, you know, employee types that you pay hourly, but we've hired, you know, commission based only, commission only, I'm sorry, commission only employees or 1099s. And so how do you pay

them? How do you hire them? When to hire them? All of that is of great importance. But I will also say to you, I'm going to be more of the opinion you hire on a 1099, no structured salary hire. And the reason why I say that is throughout the years, your business is going to go up and down and you're going to have different challenges. And the more overhead that you have, the more overhead that you have to continue to pay, regardless of your business doing good or your business not doing good is only going to hurt you if you're only, um, you know, hiring in a manner where you're paying hourly. So to that point, um, I really encourage all people in this industry to hire on a commission structure. Okay. Now, who do you hire, where you

hire and all that, uh, we'll be talking about, but the first you got to figure out who you should hire, right? Who you should hire simply is based around who is, or what things are taking more of your time every day. Um, now the last person you should hire, let's start there. The last person you should hire is going to be your acquisition manager, person, specialist. And the reason why I say that is because your acquisitions are where all the money is made. And so what I would say is that is the last person you should hire out. What most of you guys want to do is make that the first hire. Oh, I want to get out of acquisitions or that's, you know,

whoever I want to hire first. When do I hire my acquisition person? That is your last hire you should be making, quite frankly. And so, you know, the reason being is all based around revenue. Who you should be hiring first, in my opinion, is someone who can be taking your workload off of your plate that is not connected to revenue. Your acquisition person is connected to revenue. So I would encourage you to hire them last. A personal assistant or an assistant of whatever type would be my first hire. And the reason being is they can take a lot of the things that are not revenue generating per se, such as creating your marketing schedule, such as creating your email templates to go out for your buyers, such as

simply handling your day-to-day things, your transactional coordinating potentially would be something that an assistant should hire or should be handling. But let's stop there because I forgot one important key factor here. You need to be making at least a quarter million dollars a year before you hire. And that's a baseline minimum. Because the reality is you should be making personally a quarter million dollars a year. And if you aren't, then you don't belong hiring. You don't belong hiring, simply put. And so that's your baseline.

So if you are not making a quarter million dollars a year, don't even think about hiring anybody, nobody at all, and get back to doing the work yourself, driving in your revenue, making the money because that's ultimately what is going to be super, super important. So that is going to be your baseline first. Now, who should you hire when you do have that money? I'm always going to be an advocate of hiring someone who's taking the minutiae off your plate. They're taking off the non-generating again, whether it's building your marketing campaign, whether it's sending out your emails, whether it's transactional coordinating, potentially grabbing lunch, paying your bills, just handling the stuff that is not going to generate you revenue so you shouldn't be doing

it. That would be my first hire, right? List scrubbing, list building, all of those things, they take time. They need to be done. Obviously, you guys have heard me over months and months now talk about marketing is everything. Marketing is your lifeblood. So to market, you need to do a lot of different things from gathering a list to scrubbing a list to uploading a list. All of those things can be done through an assistant. Now, could it be a virtual assistant? Absolutely. I personally have my own assistant. She is now graduated to marketing coordinator. So she does a lot for us though. She does a lot for me. She schedules everything, including my calendar. So if you happen to be lucky enough to schedule a call with me, that is all done through my assistant and regulated through my assistant as she manages my calendar. So for me, I'm actually

someone who needs a lot of assistance, but it allows me to focus on things I need to be focusing on, which is going to be generating revenue. So your first hire should be someone, some sort of assistant that can handle all of the day-to-day activities that you should not be doing because they're not driving in revenue for your business. Now, the main question everyone wants to know is whether you should be hiring an acquisition specialist or you should be hiring a disposition specialist first. My answer very clearly is you hire the acquisition specialist last. Acquisitions is your last hire, meaning your disposition specialist would be your first hire in terms of if you're looking at those two. Now, your disposition specialist should be spending all day in the field, opening up homes for your buyers. If you're wholesaling, that's the answer. Where do you find these people? Okay, so that goes to the next part. Where are you finding the

people that you are looking to hire? Well, I have always been a massive advocate of your sphere of influence is where you hire the best people. The people that are around me today in my office currently all came from either friends and or other colleagues that I've known that have made a recommendation that I've said, Hey, this person would be great that I've even asked, Hey, would you be interested in working with me and my company? And that's where I have found them. That's where I've been able to bring in people and keep them for four or five, six, seven, eight, nine, 10 years still with me. Because A, they're loyal to me. They're part of

my sphere of influence, but B, I give them a great opportunity to create a lifestyle and an income that they may not otherwise be able to do where they can work on the business as their business, not just being an employee. And so, giving someone the opportunity to work with you, to work with your company should be an opportunity that they value because you're creating value for them. You're not just giving them a job like they can go get at some big company, right? They're not looking for a job at, or they're not, the people that you hire should not be the employee mentality because the employee mentality will not do whatever it takes. They will not go out there and kill for you. I say that in terms of, you know, kill what you eat, right? So, they won't be,

you know, great salespeople. They won't be motivated to move the needle. They won't, when you say, hey, we're down this month, they won't be motivated to go try to get that because the entrepreneur spirit, the entrepreneur mentality is who you want to be hiring in your company, especially when it comes to acquisitions and dispositions. Other type of individuals in your company operationally can absolutely be employee mentality, but they also are handling some more of the operational side of business, which my business partner fortunately handles. So the next question is, when do I bring someone in to handle the tracking of the spreadsheets, the KPIs, the operational stuff? Well, I'll tell you, you don't need to hire someone necessarily for that if you don't want to, because what I'll say

is that assistant, whether it be virtual or my assistant Andrea is right next door through that wall. She's right there. She can probably hear everything I'm saying. She can handle that for me. I just have to give her a good guideline of what I'm looking for, what I expect of her, and she can handle that. That's why I always advocate your first hire should be an assistant. When I hired Andrea, quite frankly, we didn't even have a role for her. I just knew I didn't have time to do all this other stuff that didn't gain revenue,

that wasn't revenue generating. So I hired her to do that stuff for me. Quite frankly, she'd come in for two to four hours a day and we would have 15 minutes of work for her. We really wouldn't even be able to fill her time, but I kept her and I wanted her around and I paid for her even though I technically didn't even have work for her to do. Um, because I knew at some point I would get that busy. Um, so we had her cut checks, pay our bills, like just stuff to fill the time because we wanted to keep her here as she grows or as that assistant grows, as your business grows, you can put more responsibility on these individuals because they will be able to stretch. It's amazing how we only put so much on people

because we don't want them to be burnt out. But you would be shocked at how far people can stretch and hold on their plate of responsibility as long as you find the right person. So, acquisition is last. The only time I'm hiring an acquisition manager is if I'm running four plus marketing strategies, four plus I'm driving in, you know, anywhere from 400 to a thousand leads a month, 400 to a thousand leads, real leads, not call-ins, not FUs, 400 to a thousand real leads a month, then I'm looking at potentially hiring an acquisition manager. And the way I train them is by having them shadow me. They must shadow me. And that's how you train them. You still have to be in the field. You

still have to go do, you know, what you're leveraging yourself out of. They need to learn from you. You go see two, right? Then you allow them to, you know, you go do two with them. Now the third one, you allow them, you guys kind of do it together, the third and fourth one. And then the fifth and sixth one, in terms of meeting with sellers, you allow them to try to run themselves with you there.

Obviously you can interject as you need to. meeting with sellers, you allow them to try to run themselves with you there. Obviously, you can interject as you need to. But that's how you hire. That is who you hire. There's a lot more into this. But as you guys know that everyone has a short attention span. So I'm really just talking to people for roughly 15 minutes before they check out. Hire an assistant first. It could be virtual. It could be in-house. Have them do all of the non-revenue generating stuff. Then you want to be able to hire a disposition specialist. And then lastly, an acquisition specialist. That's how you hire. That's who you hire. That's the importance of hiring. So, there you have it. All right. So,

that's this episode. Again, if you want my book, the scienceflipping.com forward slash free dash book, download it for free. And if any of you are listening to this and you're entrepreneurs at heart, I am dropping a new podcast called the entrepreneur DNA with some incredible entrepreneurs, not just in the real estate space, but everyone from, you know, billionaires to a lot of names that you recognize, you know, authors that you've read. So I look forward to that. So make sure go over to the Entrepreneur DNA, leave a review, listen to it. It should be dropping here shortly. So with that said, I'm out of here. Peace.