BiggerPockets Business Podcast 89: How David Greene Plans to Sell $150 Million of Real Estate in 2021

BiggerPockets Business Podcast 89: How David Greene Plans to Sell $150 Million of Real Estate in 2021

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For the first episode of 2021 we have David Greene from the BiggerPockets Real Estate Podcast! We’ve heard from David before on a couple of past episodes, but today he goes over something a bit different: how he successfully scaled his real estate business from being a sole agent to a team doing $90,000,000+ in transactions a year!

This didn’t happen overnight. It took David years of trial and error to find out what really works in real estate, why most agents fizzle out in the first 5 years, and how to bounce his team members off of each other to generate more sales and higher commissions.

David has strategies and advice not only for real estate agents, but also for business owners that want to build a business that has the ability to scale. In 2019 David’s team did $26,000,000 in transactions, in 2020 they did $90,000,000 and in 2021 they’re planning to hit $150,000,000. We’re sure David will fly past that milestone as well!

You’ll hear why David became an agent in the first place, why marketing is key to real estate (and almost every other business), how to gauge motivation from clients and prioritize accordingly, and some lead generation strategies David’s team uses.

Real estate agent or not, this is some great information that big and small businesses can take to heart and put into practice right away!

Click here to listen on Apple Podcast.

Listen to the Podcast Here

Read the Transcript Here

J:
Welcome to the BiggerPockets Business Podcast show number 89.

David:
The team structure helps you learn faster, gets you going quicker and can get you profitable much quicker. Once you’re good because you worked in a team, you know how to build a team yourself, you know how to get the people doing for you, what you were once doing for me. So that’s why almost quadrupled my sales from the year before.

J:
Welcome to a real world MBA from the school of hard knocks, where entrepreneurs reveal what it really takes to make it, whether you’re already in business or you’re on your way there, this show is for you. This is BiggerPockets Business. How’s it going everybody. I am J Scott. I’m your co-host for the BiggerPockets Business Podcast. And I am here in this beautiful new year. Happy New Year everybody. I’m here in this beautiful new year with my lovely wife, Carol Scott. How’s it going today Carol?

Carol:
Oh, happy, happy, happy new year, everybody. How awesome is it, that we can finally flip that old adage on his head. So here’s the deal. 2020 is hindsight. There you go. It’s not hindsight, it’s 2020, 2020 is hindsight. It’s behind us. And although it was an amazing year for a lot of people, I know that 2021 has even more incredible things in store. So we’re so looking forward to everything we can do together as a community in 2021 and beyond.

J:
Yes. 2021 is going to be an amazing year and we’re starting it off right with an amazing guest. If you listen to us last week, we had David Greene on the show. He is the co-host of the BiggerPockets Real Estate Podcast. And last week he was on with Brandon Turner to talk all about a recap of 2020 and what we should be doing in 2021. This week he’s back with us, David is back with us, but on his own. And he’s back with us to talk about all kinds of good stuff. Number one, he’s here to talk about his new book. So he has a book out called Sold Every Real Estate Agents Guide to Building a Profitable Business. It’s up for pre-order on biggerpockets.com/new books, I think, check out the show notes and we’ll have the link in there, but it’s coming out in about two weeks.
So today we’re talking about his new book Sold, and we’re also talking about his real estate business, specifically his real estate sales business. Now we often talk about adjacent businesses on this podcast. When I say adjacent businesses, I mean those businesses that compliment our core business. So for example, a lot of the people in our community are real estate investors. As real estate investors there are a lot of businesses out there that have tremendous synergy with our real estate investing, for example, contracting businesses or inspector businesses, appraisal businesses. Well, David has started an adjacent business to his real estate investing business and here’s all about real estate sales.
Basically David runs a real estate sales team, a real estate agent sales team. And last year in 2020, they did nearly $100 million in sales. That’s what his new book is about how to grow a real estate sales team. And on this episode, whether you’re considering getting your real estate license, becoming an active real estate agent or growing your own lucrative sales agent team, in this episode David tells you how to do that. We have some amazing discussions. We talk about real estate negotiation and how David and his team approach learning and improving negotiations with buyers and sellers.
We talk about whether real estate investors should get their license in the first place and what personality traits really help ensure that somebody becomes a tremendous agent. We talk about whether starting a real estate brokerage team is the right business for you. And if you do decide to become an agent, should you be focusing on serving investor buyers and sellers or retail buyers and sellers. And the answer there may surprise you a little bit. David even tells us about how he and his team find clients and how they find deals. And this is something that a lot of agents don’t want to talk about because I don’t know in this business, it’s kind of a closely guarded secret, how to find deals and leads and clients.
David’s not scared to share that information with us, how his team does it. If you want to learn more about David, more about his team, more about his new book that’s coming out. Check out our show notes at biggerpockets.com/bizshow89. That’s biggerpockets.com/bizshow89. Without any further ado, let’s welcome David Greene to the show.

Carol:
David got to tell you, it is so absolutely awesome to have you back. I know we had you on recently and that was only the tip of the iceberg of what you have in store for 2021. So we could not be more delighted to have you with us again today. Thanks for being here.

David:
Thank you very much, Carol. I was telling you guys earlier, I get excited every time I’m going to do your podcast. I feel like you guys have the hidden gem of BiggerPockets. This is like probably some of the most serious value that the entire company or website offers because business create so much opportunity to do all the other things that people come to BiggerPockets for.

J:
Well. Well. We really appreciate that-

Carol:
That is so awesome. Thank you.

J:
I’ve said it before. And I said to people, even other than you, David, that you are literally one of the best guests we’ve ever had on the show. You were here on episode 20. So anybody that didn’t check out David Greene on episode 20, which was back in September of 2019. So almost a year and a half ago, please go back and check out that episode was absolutely fantastic. We talked about hiring. We talked about the business, we’re going to talk about today, but it was a little bit less mature than it is today. And we talked about a whole bunch of great things. So welcome back. Thank you for being back and thrilled you’re here. Let’s start with you have a new book out. It is called Sold Every Real Estate Agents Guide to Building a Profitable Business. Sounds like it might be part one of a three-part series of books. Can you tell us a little bit about the book and who it’s geared towards?

David:
Yeah. So I set out to write a book for BiggerPockets and we decided I’d write one for real estate agents because to be frank, you’ve got millionaire real estate agent and then really nothing after that, that new agents would benefit from reading like a good book. So there’s a huge gap in the industry for mentors. Every new agent has a ton of questions. And one of the problems that is not being solved in real estate is that brokers can’t answer every question an agent has that isn’t selling houses. They’d go out of business talking and never getting something sold, but agents don’t really have the confidence to go talk to people and find clients and put them in contract until they get their questions answered. So you kind of have this catch 22. So I want to write a book that would at least get off the ground.
At least get enough knowledge and confidence that you could tell your family with confidence. I’m an agent, I want to sell you a house. And really shorten that learning curve because I got my butt kicked trying to figure out this business without the mentorship myself. Well, that turned into a ridiculously long book and BiggerPockets split it into three books. And we basically set up to where the first book is going to be written for brand new agents, to building a profitable business, just how to make some money in this business. The next will be how to get you to being a top producer. So you’re one of the top of your marketplace.
And the third will be where I am right now, which is building a team so that you can take a profitable business, make it more profitable and either scale it to really big heights or have it run passively similar to real estate investing.

J:
Got it. So this first book is for basically anybody that is or wants to be a real estate agent. Doesn’t have to be somebody that already has a big team or that is ready to grow a big team. Basically just somebody that wants to be great at selling houses or wants to be better than they are at selling houses.

David:
That is exactly right. If you already have a big team this would be a good book to give to the agents that are on it. The new people we’re going to make everybody that joins my team read the book before they can even apply to work here. And then I’ll be quizzing them on, well, what about this or what about that, to find out if they actually read it. But yes, it’s what I feel like is lacking in the industry. So Millionaire Real Estate Agent is a book written by Gary Keller and Jay Papasan. And it’s an excellent book, but it’s sort of like a roadmap or just a map. Here is the whole industry. Here are the models you need to understand. Here’s how the whole thing works, but it’s sort of like saying, “Well, here’s where the stream with the water is. Here’s the mountains. Here’s the quick sand you want to avoid that.” It’s a map. And it functions as a map. This book is more of a field manual. Here’s how you tie your shoes. Here’s how you avoid food poison ivy. If you’re going to drink from the river, do it this way. Not that way with some more granular information.

Carol:
Love it. And I love the… Like you said, the granularity of it and the fact that it just boils down into those nitty-gritty specifics that… Like you said, it’s great to have those more high level books but without those fundamentals you can’t achieve everything that you possibly could otherwise. So-

J:
So here’s the thing-

Carol:
[crosstalk 00:08:48]

J:
Yeah, here’s the thing I love about this book. And this episode in general is, so many people think is even in the real estate industry, which is crazy to me, but so many people think being a real estate agent is an easy thing. Basically, you go out and you snap some pictures of you, have somebody else snap some pictures, you put stuff on the MLS, you get offers, you pick one of the offers, you get to closing. I mean, it really… The mechanics aren’t that difficult. I mean, if you look at it from a 10,000 foot level, it’s actually a pretty easy business. But what people don’t realize is the difference between an average real estate agent and a great real estate agent is tremendous.
And as somebody that does real estate deals, Carol and I have done, what have we done? $70 million in real estate deals, literally an agent that can get us five or 10% more on every side of the transaction that constitutes literally millions of dollars in our pockets over years. And so for the people that think, yeah, anybody can be an agent, anybody can do the job. It’s really short-sighted because great agents for no extra money, add a tremendous amount of value. They make deals easier. They make deals faster and they put more money in your pocket.

Carol:
Totally. Yes.

David:
87% of agents are out of the business within five years. So for those that are thinking it’s easy, then why are only 13% succeeding? And one of the things I talk about in the book is that it’s about 80% of the business goes through the top 20% of the agents, which means that the other 80% of agents are fighting over the scraps 20% of the business. So what I tell people is when they say, should I get my license? I say, yeah, if you’re willing to get to that 20%, if you’ll just go all out, lay out, give it everything you got. It is a great place to be. When you’ve been in the business for a decent period of time and your phone’s ringing and people remember you and your reputation gets around and they’re coming to you. It’s an awesome job.
When you’re part of the 80% of agents fight over the 20% of the scraps. It’s not an awesome job. It’s very, very difficult. So it’s kind of something where if you’re going to do it, you have to be purposeful about it. You don’t just, ah, let me just stick my toe in the water and see what I think. So that’s why I think a book like this will really help because it’s going to give you that direction. That when you say, “Hey, I’m committed to this, I’m going to make it happen.” You know where to go.

J:
Let me-

Carol:
Awesome.

J:
Let me throw something. One of the things out there and I know I’m belaboring this, but it’s really important. So Carol and I have been doing this for a long time. There’s a lot of agents that we’ve sold houses to where we’ve sold multiple houses through the same agent to different buyers. And honestly, we are willing to give up profit to work with a great agent on the buyer side. If we have an agent that we’ve worked with in the past, they know what they’re doing. They push to get the lender moving. They pushed to get the total company or the closing attorney moving. They make sure everything’s in place. We close on time. There aren’t too many agents like that.
And if we have an agent like that and we have to choose between that agent’s client and offer and a little bit higher offer from another agent, who’s an unknown quantity. We’re going to give up a little bit of money to work with the great agent, because the great agent we know is going to get the deal done and is not going to be high stress. It’s not going to be like questions every day. So, I mean, there’s benefits to being a great agent even in the fact that your reputation will help you get better deals for your clients.

David:
That’s very true. There’s also the fact that you and Carol are pretty experienced investors. So if you value the agent that much, imagine the person who doesn’t know what they’re doing, that needs advice, that needs guidance, that needs someone to interpret what is even happening here. It’s even more important for that person. And that’s most buyers that are trying to get into the real estate investing game or they just want to buy a house. There’s so many moving pieces. I believe the average person moves somewhere between six to nine years. So a lot of these people haven’t bought a house in that period of time. It’s different. They don’t remember what happened.
That agent is your filter that you are viewing everything through. And if it’s a dirty filter that you’re looking at real estate through, you’re going to hate it. You’re not going to like investing. You’re going to lose a lot of money when you’ve got a good agent that makes it a good experience for you and explains what’s happening and kind of lays out your options in a way that’s clear and easy for you to understand what you should do. It’s easy to fall in love with real estate. So I feel like if we want to get more people building wealth through real estate, improving the experience they have with agents is a pretty important part of that process.

Carol:
And another thing I like about this is building a really successful real estate sales business, brokerage business really goes hand in hand, like you’re talking about with a real estate investing business. Often on this show, we talk about the value in creating these adjacent businesses to create these different streams of income that all play into each other, benefit ourselves, benefit our teams benefit the community in general. So I really like the fact that they very much play into each other and you have been very purposeful, very intentional to get to the absolute top of your market in what you’ve done.
So I’d love to set the stage even more David in letting our community know, where does your brokerage stand as of right now, beginning of 2021, in terms of what your team’s like today, your number of team members, transactions, sales volume, any other type of metrics that you’d like to share with us?

David:
That’s a really good question. All right. So I’ll start in last year. In 2019, we did $26 million of real estate. And I believe that was about 46 homes. I set the goal to sell 50 million this year. I had almost hit that by July. So we bumped it up to 75 million. Then I blew past that. And we’re going to be at about 90 million for 2020, and that’s 140 houses or so. Now that was with a bunch of new people. I was saying like, we got babies on the team. My admin had been on for three months, four months. Most of my agents, my most experienced one has been full-time for eight months. The rest of them are… They’re kind of in that drinking from a fire hose phase. So I know as they get more confident as they get more skilled, as they get more efficient, those numbers are going to grow even more.
So we have a three, what I call sales leaders. So those are agents that are the most competent. They can explain things. They have the highest range of knowledge. So if you come to us and you’re like, wll, how much would that rehab cost to do the deal? Not every agent on my team can actually confidently give you that number eyeballing. It they’d have to get a contractor. Well, two or three of them can or they’ve written a lot of offers. They’ve done a lot of deals. They’ve written up a lot of contracts. So I feel most comfortable with them explaining things to clients.
And then my goal as a CEO is to get all this stuff off their plate that isn’t directly related to earning revenue, putting people in contract, finding new clients primarily. So they each have two to three agents that are working underneath them, showing houses, doing administrative duties, scheduling stuff, going and taking pictures, putting on lockboxes all the little time sucks that take away your productivity when you’re an agent.
So I probably have about six or seven licensed people on the team right now, plus me. So that would make about seven or eight. I’ve got three full-time admin. And then we have three more agents that are in the process of getting licensed that will be starting in 2021. And the goal for 2021 is to sell $150 million worth of real estate, which means we basically have to put someone under contract every day of the week, Monday through Friday. So every day we have to average who did we put into contract today, and we have 31 houses in escrow right now going into January.
So that’s right about where we need to be. If we want to start off closing around 25 to 30 deals a month, we had a really good December. And I can tell you like what we finally got right that led to this little run was about 11 of those escrows have been put in contracts in the last 10 days.

Carol:
Fascinating. I love this. I want to go into those details about what the things were that you finally got right and so on. But I also, before we get there, I want to set the stage even more for our community members who’ve maybe been toying with the idea of getting the real estate license. A lot of people think it’s just a natural spinoff of being a real estate investor. I would like to know for you specifically, David, did your real estate brokerage business start first or was it your real estate investing business that started first or vice versa or were they hand in hand kind of talked to us about how the evolution of Genesis of those two things separately or together.

David:
It’s funny you ask it because everyone I know was an agent and said, “I’m tired of the grind. How do I buy investment properties so I can get out of the business?” This is a common thing through GoBundance and BiggerPockets. And pretty much everywhere I’m in agents are like, I want to be the one buying it. I see how much my investors are making. Well, I was the weirdo that went the other way. I was working as a police officer buying rental properties. I had enough passive income that I could have retired at 30 years old and just said, “Okay, I’m just going to ride it out.” And I could’ve replaced my W-2 income. It wasn’t going to give me the life I wanted. And I wasn’t going to be able to impact as many people as I wanted. What I love about buying property is that I learned things and I have more I can share with other people.
So I didn’t want to stop buying. And it would take way too long to keep buying at the level that I was at for my passive income. So I’ve just noticed the common thread in every time I get into new business is that something about that business was frustrating me. There was a problem that needed to be solved. So with real estate sales, I just got tired of knowing more than the agents did. I was educating them all the time on how to do their job or how to do it better or how to talk to people. And I got tired of referring my friends to agents and having them for my friend to come say, “Hey, the agent did this, is that right?” And I’d have to call the agent and tell them how to do it differently. And I just thought, I’m just going to get my license and I’m going to do this to avoid that.
So I stepped into the world kind of backwards. And of course, like everyone else, it’s really hard when you get started, it’s very hard to get any kind of momentum going. There’s a bipolarism that goes on between. I can do this and I am suck at this so bad. I shouldn’t be doing it at all. But eventually I started to find the patterns and what worked. And then I just started to kind of double down on those patterns. So I, to answer your question was an investor first then became an agent. But I think that was the best thing I could’ve done because I understood real estate from the perspective of the person who’s owning it. I wasn’t just a pure salesperson who’s trying to close you on a deal and it doesn’t know what to do after.

J:
Yeah. And that makes a lot of sense. And I think what you were saying about there are people that like get into the business and then they it’s… If I build it, they will come. They expect business to just start. We hear that a lot on the show, we talked to business owners in all walks of life, all different types of businesses and a common theme is it’s easy to think, especially for the non marketers among us. And I know I’m not a marketing guy. It’s easy to think. If I build a great business, I build a great product. People are going to be banging down my doors to buy it, but that’s not the case. Even the best in business have to market their products.
People aren’t just going to come out and buy. Maybe your friends, maybe your family will, but if you want to grow a market, if you want to grow a customer base, you have to spend a lot of time, a lot of energy, maybe even a lot of money marketing. And that’s one of those things that I hear probably more in the real estate agent and the broker business than I hear in most industries. It’s something like, I don’t remember the numbers, but it’s something like expect to be on the phone six hours a day per month before you get that first deal. And so it’s important. It’s just like real estate investing. Everybody thinks that it’s easy. And at some point it does get a lot easier, but you have to put in the work upfront. I assume that was your experience as well.

David:
A hundred percent. I have a great analogy that I use to describe what it feels like when you’re doing this. And it’s in the book. My back should be in the second book, but imagine pushing a boulder up a hill, every single step is agony. Your shoulders are killing you. It’s so heavy. You’re pouring sweat and you’re going inches at a time. It is massive work for small progress and you’re pushing and you’re pushing and you’re pushing. And what you don’t realize when you’re pushing is how much stronger you’re getting, how you’re learning to control that boulder while you’re having to push and how much every inch starts to really matter to you. When the inches come easy, then their feet you’re just bounding along. You don’t value it. But when you got to really hard just to get an inch forward, you really understand how important it is.
That’s the beginning of real estate sales. When you are lead generating, you are on the phone constantly. You are planting seeds, you’re learning your craft. You’re giving value. You’re not getting anything back. You’re learning. Who should I report into? Who should I have not report into? It’s incredibly inefficient. And it’s very difficult. At a certain point and it’s different for everyone because there’s variables like how big your sphere is, how much people trust you? If you’re 19 years old is probably going to take you longer to get there than if you’re 45 years old your RV had an established corporate career and people trust you. The market you’re in itself, how much money you can make per dealer, how much competition you have, all those things factor in. But at a certain point for everyone, you crest the hill and now you’re not pushing up against gravity anymore.
You are just pushing the boulder and it’s rolling, but it’s much less effort to get further. This is where someone walks into your open house and you’re going to nail them. That’s now your client. You’ve got a system in place. I have what I call the sales funnel that I talked about in this book, where you start with a person and you move them into a closing through a very systemized series of steps. Those are coming easy for you. Now you’re closing pretty good deals. You’re what I would call a top producer. You’re doing really good work. You’re probably in that 30 to 50 houses a year range. At a certain point, you get to the other side of that plateau and you start going downhill. And now that boulder is rolling so fast, you can’t keep up with it.
You’re sprinting as hard as you can but your phone’s ringing so much everybody wants to work with you. They want you to list their house. You’re having trouble keeping up with CMAs, making appointments. People are asking you for questions about a house, but you’re on the road doing something else. You can’t get back to them. That’s when you need a team or you at least need some assistance to be helping you, which is a form of a team. That’s the best way I can describe what real estate sales that whole process looks like. Which is why I tell people if you’re not planning to get to the top of the hill, just don’t start because it’s going to be really rough on you in the beginning. The only reason you go through that is to get to the other side.

Carol:
Very cool. So let’s say that some of our real estate investor listeners out there, they decide that they are going to push that boulder all the way to the top of the hill. They are putting in that commitment. They’re putting in the time, they’re following the systems, they’re following the processes. What is it that really makes that business grow in terms of clients? Think about, you talked about, for example, you were buying all of your properties when you were still a police officer before you came a realtor before you came a real estate agent. Well, in this instance where a lot of the people we’re talking to right now who are listening to this are real estate investors first.
So they have a lot of contacts in the real estate investing world, other real estate investors. Would you recommend, does it make the most sense as they’re pushing that boulder up that hill to really focus on lead generation to other investors or to retail clients. And so does it make more sense to go one route or the other. And along with that and maybe you can work that into the conversation. Are there some differences or similarities or advantages and disadvantages of those two different types of clients?

David:
Yes. There’s very big differences. They each have their own pros and cons. I would say in general, working with retail clients is going to be better for your business. And it’s funny because as an investor, which is where I started, we all can’t stay in real estate agents. They suck, they don’t answer their phone. They’re not giving me what I need. There’s all these complaints. Then you become an agent and you hear the same thing said about investors. They just asked me a million questions. They never want to buy anything. They write unrealistic offers. I’m doing all this work and I’m never going to get paid. So what you have to do is have the wisdom to understand who’s the right agent for you if you’re investing, and who’s the right investor client, if you’re an agent. It’s not as simple as you walked in the door at Chick-fil-A, we treat every customer the same.
It’s a partnership. When you choose to take on someone as a client, I don’t like the phrase, I’m hiring this person. I hired this agent. They’re working for me because you’re not paying them. You’re in a partnership. They only win if a house closes and you should be looking at that the same way as an investor. I only win, if I close on a house that you don’t want to buy a bad deal, but you’re not doing anything if you’re just gratifying your curiosity at the agent’s expense. You’re wasting your own time too. So if you’ve got a good investor, that’s the golden goose. I mean, if you had a good investor that was consistently buying properties, that’s reason enough just to hire and train an assistant to help you keep up with that one client.
The problem is not everybody that says they’re an investor, is. A lot of them are curious about real estate. They like, it’s fun looking at houses. It’s cool analyzing them. They’re not ready to actually move forward and you can easily get sucked into spending your whole day helping this person, hoping that they buy a house. What I tell new agents is you have to get anytime you recognize, I have this feeling that I hope this works out. I hope this is a good deal. I analyze this duplex. It looks good. Are you going to buy it? Yeah, I hope it goes well. You don’t just bet the brakes when you hear hope. You shouldn’t be hoping something goes good.
You should have a really good understanding of what your outcome is likely to be. And a decent understanding of the different variables of what can go wrong with the comfort level of, “Hey, each of these things can go wrong. And I know how to respond.” You’ve got to look at your clients because those are your investments. The same way that an investor looks at the property. You shouldn’t be hoping that they buy a house. If they don’t want to buy a house, you need to help them come to that realization before you put them in your car and you get out there and you start looking at properties. So one of the big mistakes that new agents make is they don’t understand how to gauge motivation or how to prioritize tasks.
And the book talks about this a lot. At a W-2 job, your job is to sit at the front desk and when somebody wants to buy something that your company is selling, you run it on the register. Everyone’s motivated if they walked into that store to buy a spark plug or whatever they were going to do, this is much different. This is like working at a restaurant where, or a place on the beach, where can just come sit at a table and they want to, because it’s hot outside. They want to be in the shade, but you got to figure out which of these people wants to order food or convince them why they would want to order food. It’s a very different skill set. And I see a lot of people that get their license are not prepared for that. And that’s one of the reasons they struggle.

J:
I love that. And it’s true. And I tell people this all the time and I appreciate the fact that you being in the business agree, working with investors is a pain in the butt. And I’m an investor. Carol and I bought a lot of properties. I don’t wish that on any agent to work with us on the buy side because it’s difficult and we’re not going to buy a lot of deals from agents because most of their deals are coming off the MLS. But even if they’re working off market, we’re not going to buy a lot of deals that way. If you want to work with investor clients and I assume you agree with this, work with them on the sell side, because like you said, at that point, they’ve now committed.
They have a product, they are going to be making a sale. They’re going to be selling that house. There’s no if ands or buts about it.So at that point, when you have a committed seller, again, whether it’s retail or investor, that’s when you want to jump in and work with them.

David:
I would agree with that especially when you’re working. I like listing houses more than working with buyers because I know I bring more. I can’t make you more money selling your house than I can save you buying. Especially in a hot market, there’s limited control that I have when I’m working with the buyer, the seller has to agree to our price. If they owe more on the house and what you’re writing, it doesn’t matter. We’re not going to get that deal to close. If there’s nine other people that want to buy that same house, my negotiating skills don’t matter. I’m not negotiating with the seller. I’m negotiating with those nine other people that are trying to buy this property. I’m sort of restricted as a buyer, which is why buyers agents tend to focus more on the emotional side of real estate. That’s where they bring more of their value.
When you’re selling a house, your skills, your ability to read people, your marketing knowledge can really turn into big bucks especially if you’re in a market like mine. If you’re going to work with an investor on the buy-side and you know they’re going to be difficult. My best advice is to have invest your time upfront. Front-load this process and say, here is what I can do for you. Here’s what I will not do for you. And here’s what I will do when we get to this point. Will that work for you. Have that difficult conversation very directly. Like people say all the time, “Hey David, I here’s this spreadsheet with 25 properties. Can you analyze all these and tell me which ones we should ride on?” And I have to say, no, I’m not going to do that. I will tell you the ones. I think we have the best chance to get when it’s under contract and you’ve ordered inspections, we will look at analyzing this and really getting into the numbers.
I’m not doing that on every single house for you. A lot of agents are comfortable saying that, but I know like J, if I was working with you, that’d be my number one priority is let me make sure I know what he’s expecting so that I’m not letting him down and make sure he knows what I’m expecting so that he doesn’t think, well, David’s not taking me serious because we’re just friends. He doesn’t treat his other clients like that. That’s another skill you have to get comfortable as an entrepreneur is having difficult conversations about expectations with everybody.

J:
I love that. And you made a point a few minutes ago that I want to repeat. You said when you’re a broker and you’re working with an agent or you’re a team lead and you’re working with your agents, these aren’t your employees. You’re not hiring them. You’re not paying them. It’s the customers they bring in, who are paying them. They’re basically a partner, I guess that leads me to my next question. You also said earlier that you had a number of people on your team that were pretty much brand new to selling real estate over the last few months.
And you have three more team members who are going to be getting their license in the next few months, which leads me to believe that when you’re hiring these partners, these team members, you’re looking for people who are relatively new to the business, if not brand new to the business, as opposed to going out and finding people that have been doing this for 10 or 50 years. Is there a reason why you prefer people who are brand new to the business to be joining your team versus going out and hiring experienced agents who done this and know the business.

David:
I would prefer to hire an experienced agent that does it and knows the business. I’m having a really hard time getting those people that have done it longer than me, frankly, to work my system. Like they already know how to sell houses. They can get it closed. That is not the same as being excellent at what you do. And that’s an area of contention that we find where there’s someone who’s done this for longer than me. And they sell 20 houses a year, which is really good where we are but they’re never going to get past 25 to 30 with the way they do it. And there’ll be miserable. And I want them to break down their system, leverage off the stuff. Like I said earlier, that doesn’t make money, take a leap of faith in, hey, you’re going to let this person do your scheduling.
You’re going to let this person speak to your clients about certain things. You’re going to trust your time to your assistant. And they’re going to be telling you what to do. I’ve had a very difficult time getting people to do that. And then there’s also, I think a bit of an ego thing where they don’t want to work for someone else or they don’t want to split their commissions. They want me to just hand them a lead. And the problem with that is if you come to me and say, “David, I want to buy a house.” And I hand you to another agent that knows how to close you, but they didn’t listen to what you wanted. They didn’t find the deal the way you were looking for. They didn’t have that difficult conversation. It makes me look bad. So that’s part of what makes that business very tricky is my name’s on everything.
If a person on my team does something less than how I would want it, it’s making me look bad not just them. So the new people tend to be the ones that are easier to mold and more willing to trust me. They have nothing to lose. It’s just an easier barrier to entry to overcome. I hired my first agent about a month ago, who is a top producer and I love it. She and I have been number one and two in my office for the last three years. So getting to bring her in has been awesome. And it’s been great for the new people to get to see what she does. She outworks them constantly. And I love seeing the people on the team with the most experience they’re doing the most deals are outworking who are supposed to be the young and hungry ones.
So I would prefer to have them the benefit is that the way we have this whole experience set up is that when you’re new and you come in, you get attached to a senior agent who kind of teaches you the ropes and you get to do all the jobs that that person doesn’t want to do. But it’s so beneficial for you as a new person to do because that’s how you learn the business. Most of the time, you’re in business for five years, you sell a couple houses a year. It takes you five years to work with 15 people. You’re going to work with 15 people in one month when you come here. Your learning curve is so incredibly accelerated. It’s like a supercharged apprenticeship program where you get paid to why you do it.
So what I’m hoping is I create this little ecosystem where you come in, you learn the business in six months instead of six years, you start like, you hit the top of the mountain where you’re just pushing a boulder. You’re not just pushing it up hill. And then we get you to the other side where it’s going downhill faster. And then you have the new people come in and they’re going to support you.

Carol:
Love this. So with all of these new agents that have come into the game, if you will in 2020, because that happens in a hot market. A lot of people are like, yeah, give me a piece of that. Give me a piece. You have clearly established, like we talked about systems, processes to accelerate the learning, to accelerate the growth and efficiencies and so on. So are you willing to share some of those things that really set your team apart that have made you successful and pushed you with that momentum that you’re known for at this point?

David:
Absolutely. This is BiggerPockets where we share everything in this company. So where would you like to start? I’ll talk about any of it.

Carol:
Well, let’s start about the lead generation piece of it. You’re talking about, you know, there are so many people in those five years, I think you said earlier 87% are out of the game within those five years, because there may be doing 15 deals during that five-year span. And if you have a great system, then you have something going on in terms of lead generation. So what are some of the lead generation strategies that you train your team to do?

David:
So this is an awesome question. And I’m glad we get to talk about it because this is usually the elephant in the room that no one discusses. When you get your license, remember I told you that there’s that problem that brokers don’t want to put all their time into you until you’re doing deals, but you can’t do deals until you kind of know what you’re doing. That’s the situation you walk into. So the broker will say, go call every single person in your phone, tell him you’re an agent and find someone that wants to buy a house. And when you do that, then you go to the broker. Now they’ll work with you. There’s several problems with this. The first is you’ve never done sales. You’re not used to sales, getting thrown into that chaos. Not everybody can handle that unless they came from a background where they did it before.
The second is, you’ve got no one to call. So you’re calling your own family, but you feel guilty saying, let me buy you a house because you know in your own heart, I don’t know what I’m doing. And I’m going to screw this up. So you’re naturally hesitant in every conversation. It’s like pulling teeth with yourself to get you to sell yourself because you don’t know what you’re doing. The third is that you have no confidence. You haven’t closed deals before. So you’re forcing yourself to walk up this hill, just to pick up the phone and call somebody because it’s not till you’ve closed a couple of deals that you have, the confidence that you were even willing to talk about real estate.
So your insecurity is glaringly obvious to everyone. And if there’s agents listening to this, they’re shaking their heads saying, that’s me. I don’t want to go knock on doors because even if I was to do it, I don’t know what to say. I don’t sound very confident. You know, Mary, the top person in my office, she knows what to say. I don’t know what to say. That’s one of the biggest is that we say, until you can lead gen, we’re not going to teach you the business. The second part of that is once you get the client, you’re going to fumble the ball because you don’t know how the contract works.
You don’t know how to fill things out. You’ve never done a presentation. You’re learning at the expense of the people you’re trying to help. So you’re going to do all this work. You’re going to get somebody in like step one of the sales funnel and then you’re going to screw it up and step two and start all the way over. You ended up doing a massive amount of work and not getting any sort of momentum going until you’ve done it for a very long time. I had this little epiphany when I don’t remember who I was listening to, but I was listening to a UFC fighter or a Jiu-Jitsu practitioner that was telling me what they do differently when they train is they start with the submission and they teach their students how to lock in a submission and get the person to tap every single time.
Once you got that limb you’re or that choke, it’s done, you’re not letting them out. And you get the taste for what it feels like to do well. You just practice. You’ve got the submission. You make sure that they’re tapping. What everyone else in Jiu-Jitsu does is they say, “Go here, have a miserable experience, get your butt kicked by everybody.” And if you can make it through that gauntlet, you might get to step two where you take a position of advantage, but you’re still not submitting anybody. After months and months of that, you’ll get to the next step. They make it very hard to want to do it. What this person was saying is my students know how good it feels to tap somebody out.
And it motivates them to now want to do the hard work of getting their butt kicked every day. And something clicked where I realized that’s the way it is for agents too. I want you making these phone calls and lead generating and talking to people, but you’re never going to get through that unless you’re just a mutant, a freak of nature that can just push themselves through. I need to get you to see what it feels like to get someone in contract, to do a closing, to give them the keys for the first time. You need to experience how freaking excited they are, that you made their dream come true. That motivation is important. So I sort of worked out this system where you come to me and you’re going to agree to do certain lead-generation techniques. That’s like showing up at the Jiu-Jitsu practice and getting your butt kicked.
But I’m also going to use you for parts of my own transaction, where you start at the very end by giving people keys, taking pictures, getting testimonials. You move a little bit further. Once you’ve got that down to helping me put them in contract and you move a little bit further to helping show houses to those people. You move a little bit further to being with me. When I give the buyer’s presentation and seeing how that goes, then you get to do that yourself. Then you go a little bit further to where you’re doing some of my lead generation. I work you from the front backwards and from the back frontwards. And if it works well, you meet in the middle. Now, what I found is once they see what the whole process looks like, and they have confidence that lead generation becomes so much easier.
There’s a confidence and a swagger to what they’re saying, because they know that they know their stuff. And I think that’s, what’s usually missing when you got to figure this out on your own. It’s really just like doggy dog, trying to figure it out. And so I feel like the team structure helps you learn faster, gets you going quicker and can get you profitable much quicker. And then the other side of that is once you’re good now, because you worked in a team, you know how to build a team yourself, you know how to get the people doing for you, what you were once doing for me.
So that has taken a couple of years to try to tweak, and we’re still tweaking it. But this was the first year that a lot of those pieces came in place. And that’s why almost quadrupled my sales from the year before.

Carol:
That is so phenomenal on so many levels. First of all, I have to point out what an outstanding abundance mentality that is.How many brokerages do we hear about out there? How many team leaders do we hear about out there? Who want to do exactly what you’re talking about? Just go out there, just hit the phones, the good deals that come in, I’m going to keep them really close to my chest. I want this income for myself. Instead, you are approaching it from the opposite direction. So that, like you said, people are realizing what that prize is like, what it feels like, getting them very emotionally engaged from day one.
So that they’re really motivated to do more and more deals. So like you said, it’s not only a motivating. It has quantifiable tangible results as well in that is what pushed you over the edge in the end of 2020 to expand your sales, the way that you did. Were there other things in particular that you were able to develop with your team members throughout this process that really set you apart, just like that abundance mentality, that mindset that you approach your overall operation with. Are there other things within the way you’ve approached building your business out that are setting you apart from those other agents, from those other teams?

David:
Yeah, I think a big one is that most teams, if I was to draw out what their structure looks like, it looks like a person on the top and a lot of agents that are all horizontal. So it’s easier to grow it that way. Could you grab a bunch of people and you put them underneath you and you just see who does well. What we’re trying to do is more of a vertical alignment. So I have one person who’s good. I support them with admin. Then I add a buyer’s agent. I add a bunch of assistants to that buyer’s agent, and I sort of scaled downward. Now it’s riskier to do this. It’s harder because one person in that chain, if there’s five people that you need involved to make the deal close, if one of them makes a mistake, everyone loses the deal.
It is much harder. That’s why most brokers don’t do it. They just hire a bunch of people, make it a body shop. They will wait and see who rises to the top. And that becomes their top producer. What I’m trying to do is, do this whole thing with way less people. So if there’s five people involved, 20% is all we need to get screwed up. And then the deal is not going to close. So what I’ve had to do in order to overcome that is find out what are your skills and what are your weaknesses and how do I put a team within my team together to compensate for that? So you’ve got guys, I was a big basketball player. You’ve got guys that are great at shooting three pointers. They’re just lights out. They knock it down every time they’re typically not as fast.
They don’t dribble the ball as well. There’s somewhat of a liability. They can’t get themselves open. They rely on another teammate to get them open to shoot. So you could have an amazing three point shooter. That would be for us like a closer, that person gets a client that wants to buy a house. They’re incredible at finding the right deal and getting it under contract and closing. But they’re horribly unorganized. They cannot keep up with the level of chaos that’s going on around their phones ringing, emails are coming in. Questions are being asked. They have meetings they have to go to. So what happens is they do all the work to get a deal closed, but they leave the last 10% undone.
So they’re working like crazy, but in real estate, if you don’t get a hundred percent of it done, you get nothing. It’s not like if you do 90% of the work, you get 90% of the paycheck, it’s got to be everything. So that was what I realized was happening in 2019. I had some talented people, but I was not… I had all these great three point shooters, but no one could get them the ball that we were just turning it over all the time. So another thing that I did is I stopped looking at real estate sales as a job. And I started looking at it as a business.
And I said, in this business, you are very good at this, but you are not good at that. How do I find someone who has maybe opposite skill sets? So my top two agents are crushing it right now. They each have 10 to 12 escrow each because I found people that were very organized, but not very sales many that had their license. And I paired them and said, “This is my system. Here’s the parts of it, you’re doing for them.” What I want to hear is this guy is crushing it for me. I’m so glad I have them. If I didn’t have that person, I couldn’t be doing this.
And on the other side, I went to the closers and said, they’re putting their livelihood in your hands. If you don’t close these deals, they’re not getting paid. They’re taking a big leap of faith. So you’ve got to really focus on getting these people in contract and making sure it closes. And I went to the other people and said, you got to tee this person up. You put the ball on the tee. They’re just going to hit it. If you put that on wrong and they can’t hit that ball, you’re not going to get paid. And that little figuring out like what you should be doing versus what you should be doing has had exponential results as well.

Carol:
So, David, it very much sounds like by running your real estate business through the lens of not real estate sales, but running it through the lens of building out a business with very distinct systems, processes, and incredibly efficient teams. Rather than just let’s sell, sell, sell instead of really working on a system and process that is repeatable and just works. I’m seeing another similarity here to what we talk about a lot in the world of real estate investing where if you do it correctly, you can take that business. You can take that system. You can take that process and launch it into other markets where you are not physically present. Am I interpreting that correctly?

David:
Yes. So that would be the next phase of what I want to do. And I’m so glad you asked that because we’re going to talk about a couple of different businesses that I’ll have running within this same ecosystem and my plans for how to grow them in 2021. The ultimate goal for the real estate team is to get my teeth kicked in the bay area where we’re putting these systems together. I’m learning who to hire, how to hire, how to pair people, all these things that I’m talking about, that you’ve got to kind of tweak to figure it out, then take that model and plant it in different markets around the country.
So what I would love is for all the BiggerPockets listeners in Southern California, in Dallas and Miami and Tampa who say, I want to buy a house, but I can’t find a good agent to know. There’s a David Greene team in those markets that they can trust that they’re going to get a good experience with. And I find the right partners. And I say, okay, here’s our system. I’m going to incorporate you into it. And you can get some form of a similar experience for people no matter where they are and then scale it.

Carol:
Absolutely love, love, love that because of course, here on the BiggerPockets Business Podcast, we really like to differentiate our show by talking about how real estate people can be parts of these other businesses that provide consistent experiences that can generate passive income perhaps, in just overall that you are really approaching this in a manner that enables you to launch, not even necessarily just in the US even potentially worldwide. So you are clearly approaching it from the right angle. I love that. Very, very cool. I would like to shift gears just a little bit.
I’ve heard a little birdie told me that another big part of what sets your team apart is outstanding negotiation skills. And as we all know, that is something near and dear to my heart. So we’ve got to talk about that at least a little bit. I would love to hear from a very successful real estate agent in team leader side, rather than just from the investing side, which is usually how I like to talk about it. I would love to hear the type of training that you offer, not necessarily the training, but the tips and tricks and those negotiation strategies that have worked really successfully for you. That you have taught your team members to use in their negotiations with other investors, with other retail buyers and sellers, just your overall negotiation strategies that really set the David Greene team apart.

David:
It’s so cool. You asked that because I’ve actually systemized those to a degree to the techniques we use. So would you guys mind giving me the ability to share my screen here?

J:
Absolutely. And keep in mind that not all of our listeners have video, so we should probably talk through anything we-

David:
I know. Yeah. All right. So this is what I call the sales funnel. And it’s a big piece of the book, as well as our team. The gist is that when you’re an agent, you’re getting hit with a million things in the day and you have to know how to prioritize what you have. And then I want a very simple way of understanding once I’ve classified, what this is, what is the next step that I do with it? So if I was to bring you guys a deal to flip a house, let’s say you have done this enough times that you know, and you get an email saying, “Hey, I think I got a house to flip.” You’ve got a series of questions. You’re going to say, what do they own the property? What’s their motivation to sell? What’s the ARV? What’s the expected rehab cost? You don’t have to try to think, what am I asking?
You could even have a canned email that immediately goes back out to me and says, “What are these questions?” I answer them. You make the decision, what would be next? We’re going to analyze it. You’re very efficient because you know, what are the steps I’m taking and what comes next? Agents don’t understand that very well. So what I did was I put the system together where you’re classifying first, who everyone is. So at the top of this, you have people that’s anyone in the world, the way you take people and turn them into leads is through lead generation. That’s the tool that you use.
I give the agents on my team, specific instructions, scripts to use, things to say, marketing material to put out, to do lead generation. Then when someone becomes a lead, that’s the person who knows who you are and wants to buy or sell a house. So someone emails me and says, “Hey, can I buy this house?” Or, “Hey, I think I’m on a summer house.” The first thing I’m doing is setting an appointment. That’s the goal of the phone call? Can I set an appointment to give you a presentation, to show the value that we would bring to be why we should have the right to represent you?
We practice that you don’t just show up and hey, I’m supposed to do this. I have them go through this over and over and over to get good at doing it. Once that person signs a buyer rep agreement or a listing agreement, they become a client. These people have earned the right to ask you a lot more questions and get a lot more of your time. The tool we used to take clients and put them into contract is psychology. And that is negotiation skills. You are negotiating with the other agent. You’re also negotiating with their client. You’re also negotiating with the vendor who you need to get something done.
Everything is a negotiation when you’re trying to get something done for your client, once they go into contract, that’s where knowledge actually becomes an important thing to get a deal to close, knowledge of how title companies work, how the lending industry closed. Once it’s in contract, that’s when all the things go wrong. That’s where knowledge really will help you. So what I wanted to talk about when you ask them negotiating tools is they’re pretty much psychology when we’re dealing, particularly with buyers. Psychology is so important because it’s such an emotional process when you’re buying a house and you’re trying to understand how do I filter the information that’s coming through to me and how do I understand it?
So one of the things we use is what I like to call like a baseline adjustment. So that has to do with, if you feel like you’re getting a good deal or getting a bad deal, the majority of uneducated buyers, which is most people in the industry, believe if I pay less than asking price. I got a good deal. If I pay more than asking price, I got screwed. That means they have a baseline set on asking price. That’s what they think it constitutes a good deal. But those of us that are experienced, no, that’s a terrible indicator of value. When I was going through what you guys would analyze a deal with. If I brought it to you, the listing price didn’t even come up. What’s the ARV. And what’s my all-in costs. That’s what you want to know.
And then maybe things like how long would it take to sale? What are my holding costs? So one of the easiest ways that an agent can help a client feel good about a deal is to move that baseline. So if you guys want to buy a house, that’s listed for 600,000 but it has nine offers in my market. It’s probably going to go for 700. If you think that, that’s getting ripped off, you’re not going to write the offer. So rather than trying to work very difficult to convince a seller, to take my offer for 600, when there’s nine other people that are willing to pay 700 I want to move my client’s baseline. And we do that by showing them comps in the same neighborhood that sold for much more.
So if I say, “Hey, you got to pay 700.” And you think it’s worth 600. You hate me. If I say, “Hey, you got to pay 700, but here’s a couple of comps that are worth 800.” All we have to do, is do some paint and change out the countertops. And you’re going to be worth that house. I just made you close to a hundred grand. That little tiny adjustment can make your job so much easier. And your clients need you to show them that because they don’t understand how this thing works.
So that’s one of the tools that we use. Another one is what I call the triangle theory. So let’s say that J wants to sell his house and he thinks that he can get 500,000 for it. I’m looking at the CMA. And I can tell that thing is 450 the best it could ever get. If I tell J, your house is only worth 450, I’m insulting him. He and I are in conflict. It hurts our relationship rather than go directly at the person and say, here’s what I think we create a third entity, which in this case would be the CMA itself or the market.
And I say, hey, take a look at this. What are you seeing in the past sales everything’s sold between 400 and 450. Do you notice that those houses are quite a bit bigger than yours? Yeah, they are. Do you notice that they have bigger lots? Yeah, they do. So what the market’s telling us is that buyers are willing to pay this much money for these houses. Now let’s talk about your house. What are the houses on this thing that looked like yours look like? I’m letting the market be the bad guy. I’m not in direct conflict with J more. Now we are together aligned against this dang market, that’s so troublesome. And I’m like, yeah, this really sucks, man. Like the market just is hurting us right now, which is a very nice way of saying, adjust your expectations on what you think your house is worth.
That’s another tool that we would teach our agents. There’s a concept called frame control from the book Pitch Anything by Oren Klaff that I love, which is a way of getting other people to see things from your perspective, which is pretty dang important when you’re the real estate agent and you’re supposed to be the expert. So we set it up to own the frame in that relationship from the minute you walk in to meet with us, like I have a whole system of you coming to my office. You’re sitting outside, you’re waiting for me to come get you.
When I come get you, I walk you through a labyrinth that is very confusing. And you’re like, I wouldn’t know how to get out of here, if he wasn’t with me. So they feel uncomfortable. And by the time they get to my office, they’re not in their element. They’re very uncomfortable. They’re looking at me like I’m in the alpha position. They’re relying on me so that when I give them this presentation about how I’m going to help them, any ego they had that thinks I don’t need an agent. I can do this on my own, has already been taken down and they’re open to listening to me explaining all the things they didn’t know.
Did you know property taxes are different in this part of town versus that? Did you know that PMI is something that you can get waived even if you don’t have 20% down? Did you know whatever? Now, when they’re hearing this, they’re like, Oh my God, I’m so glad I found this person. I had no idea that this is the way that that real estate worked and for the rest of the transaction, as long as I don’t let them get too far away they will stay with me. That’s another really powerful negotiating technique. So what I did was I just screwed up with all these clients that I had.
And I was like, why is it so hard to get this person to listen to me? I own a bunch of houses. They own none. And it wasn’t until I really understood the psychological application of these things that it started to get easier. And this is the stuff we teach our agents.

Carol:
Love it. These are, it’s fascinating that when you think about it on a base level, each of those same things separately, when you sit and you take a minute and you think about it, it’s so obvious that said, I have been in this business for what a dozen years. And it never have those particular points even crossed my mind in the terms in which you not only describe it, but systematize it and teach it. So it’s fascinating how you’ve just completely turned the whole situation on its head. Love, love, love it. Very cool.

David:
Thank you Carol.That’s very sweet of you.

J:
So for those of us that might be interested in building a team and we want to kind of bring in new people that we want to train. What did it come, some of those core personality or pro-characteristics that we should be looking for in people who we want to bring onto our team?

David:
The first thing, and this will go for any business that you own. It’s just easier to apply when it comes to real estate sales because we’re all real estate investors. We kind of understand that industry. If they’re not motivated, there’s nothing you can do. So I’ve learned this one the hard way. I’ve tried to take a person that doesn’t want to drive very fast and turn them into a race car driver. And you ended up pushing the car the entire time. And it’s exhausting. That’s what it’s like trying to work with someone who’s not motivated. You can not motivate people. You can maybe motivate them if they’re motivated, but there’s something like some insecurity they have or some limiting belief. You can remove it and boom, they’re going fast, but you can’t make them want to go fast. So the first thing I’m looking for is are you someone who wants to go fast?
And I got to teach you how to control the car and keep it on the tracks so you don’t go off the rails. Or are you someone that wants to go six miles an hour and I’m going to be pushing you the entire time. That’s exhausting. It hurts my own business. It hurts everyone else on the team. We can’t fix that. If you’re motivated, I’m now looking, what’s your superpower? What’s the thing that this person does really well? I think part of what has made real estate sales really tricky is you had to be good at everything. So you had to be a sales person, charismatic lead generate, organized, a bit of a lawyer that knows the contract really well, bit of a counselor and a psychologist. It’s very hard to be good at everything, which is why a small percentage dominate and everybody else gets left behind.
So in my team I’m like, okay, you’re not going to a great lead generator. You probably just don’t have that in you. That’s why you’re struggling. But you are so smart when it comes to solving problems. You’re so creative. You see angles that other people miss, the 10 people, you’re closing a year, love what you’re doing. What if I pair you with a Tasmanian devil that’s out there just generating a million leads and has no idea what to do with them. We know those people there. They make a lot of money. They get terrible reviews. That’s what I’m looking for. If I pair that person with the organized person, the two of them can have a really good team. So that’s another thing that I’ll look for is there’s not a right answer that I’m looking for when I interview you of what you’re supposed to say, do you know your weaknesses?
Can you walk in here and be like, David, I’m amazing on the phone, but I’m incredibly own organized and I miss stuff all the time or the opposite, something like, David, I’m amazing with buyers. I give them a great experience, but I’m too shy to go market myself and get more people. Well, hey, I got a bunch of buyers that need a great experience. You could be a good fit or the opposite. I’m not great talking to people, but man, I can like just bang on the phones all day long. Can you set appointments for somebody else on the team who can go lock it up and then you can get paid a percentage.
So those are the things I’m looking for when I interview. And I really think in the future, the people that do well are the ones who put themselves in the right environment, whether it’s the brokerage or a team or just another agent in the office that kind of makes up for your weaknesses. Having a license is not a guarantee that you’re going to do well in the business, but you probably have something or a couple of things that you do really good. Can you get in an environment where your weaknesses are sort of limited?

J:
Yeah. I love it. And you’re going back to what you were saying before about people need to be position players and the best organizations are those that don’t try and have somebody that can be a Jack of all trades, but instead develops an organization around the strengths of each of the people within the organization. I mean, use the basketball team analogy. I like the baseball team analogy. So the nobody wants to play right field. But that doesn’t mean right field’s not an important position and having a great right fielder is required to have a successful team. Everybody wants to be the pitcher, but there’s really only one pitcher on the team.
And so, yeah, thinking about that is really important. On a separate note we know you’ve mentioned, I don’t know if you mentioned on this, but I know we’ve talked about, you run a team for Keller Williams.

David:
Mm-hmm (affirmative).

J:
Now there’s a couple of different ways that you can be a real estate broker running a real estate team. So you’ve chosen to go down the path of affiliating with Keller Williams, a huge real estate brokerage with a great brand, a great name and starting a team within Keller Williams. So you’re a Keller Williams real estate broker. You have a bunch of agents who are Keller Williams agents under you. And you’re branded as I assume that David Greene team.

David:
Keller Williams here you go.

J:
David Greene team of Keller Williams. Another way to go is you could have gotten your broker’s license in California. You could have started your own brokerage David Greene Realty or whatever it is, and hired a bunch of agents that are now David Greene Realty agents. What are the pros and cons of going one versus the other and moving… Have you ever considered going the other direction as opposed to being under Keller Williams? If we’re going to go this rather than building a team, how should we be evaluating which direction to go?

David:
I have considered it several times. The reason that I never ended up doing it, it’s really similar to when people say, well, why would I want to join a team and pay money to be on it while I’m doing that with Keller Williams. So their model is set up in a way that I give them, let’s say 30% of my commission on every deal until I’ve paid $28,000 for the year. And then I keep all of it. So my split doesn’t matter because they’re only getting $28,000 out of me. So for me to leave Keller Williams and go do this on my own, I’d save $28,000 a year. Now what I’d have to do is go find a building to put everybody in, go find the replicate, The training resources at Keller Williams has put together that I can give other agents to work on outside of what I’m doing.
I don’t have the support of the other people in the office to go to when I have questions or to have my team go to when they have questions. I’d have to be responsible for keeping all the files, reviewing all the files, all the legal compliance stuff that doesn’t make you money. It’s not actually going and putting something in contract. It’s just preventing you from losing money. Keller Williams is handling all that for me. It’s so much easier to say, I’m just going to Jack in to all the resources they’ve got and pay him $28,000 a year for it than to start my own brokerage. And I just think it’s important that you brought this up because it’s so easy to focus on what you’re losing when you partner with somebody else. I don’t want to partner with that guy just to analyze my deals.
I’m not giving a 50% of the deal to him. He’s just looking at everything on a spreadsheet. And then you do like one deal a year because that’s all you can handle. Whereas you have did 30 with a person who’s a whiz on a spreadsheet cranking them out. And I had that same issue as everyone else. I had a scarcity mindset when I got started. Now that I’m in this deep man, I’m starting to looking at everything like, okay, what am I giving up to get that person in here because we’re going to do more volume.

J:
That makes perfect sense. And just to put that $28,000 that you pay Keller Williams every year into perspective, you’ve done $90 million in transactions this year. And so I’m not going to do the math, but I’m sure anybody can whip out a calculator and figure out that $28,000 is a drop in the bucket compared to the total commissions your team has done. And so not only are you saving all the time and effort, but you mentioned liability. The fact that Keller Williams is now on the hook to audit your transactions and make sure you’re staying in compliance.
So just from a liability and a legal standpoint, it really… That makes perfect sense. And it’s funny, I was expecting a much more balanced answer, like, yeah, maybe this, maybe that, but, the way you explained it really, it does seem pretty obvious. We talked about Keller Williams, Keller Williams is a huge brand in the industry. And I assume that helps tremendously people trust Keller Williams, they know the logo. It probably helps you get some business, but at the same time you run a team within Keller Williams. And so I assume branding is important to you from a team standpoint. How do you think about brand? How do you promote your brand? Do you promote more Keller Williams or do you promote David Greene team of Keller Williams? Where do you line up on your branding for your team versus the brokerage?

David:
I’m probably a little different than what you’d expect. I’m of the opinion that the client you’re working with doesn’t give a rats behind what broker’s name is on that card. I think 20, 30 years ago, that was very important because it was a broker centered industry. I trust Coldwell Banker. If Coldwell Banker gives to me, Tom, then I’m good with it. We’re at the point now that I don’t think anyone cares, I think they trust the person that they’re going to be doing business with. So the brand of Keller Williams isn’t necessarily what’s going to help me or the other agents on my team.
The resources they provide are because it’s an agent centric business now. People make decisions based on that agent. So when you’re working on your brand, what you’re actually really working on is your reputation. When you speak to someone, do you give them the feeling that you know how to handle and you can get them the result they want or do you leave them with a feeling that I need to take the wheel and do this by myself. This I don’t feel confident with this person.
Really you got to kind of rethink the way you understand brand. You may have a house flipping company, Acme house flips, and you hear a lot of people get on podcasts and say, Oh, my company’s known in the industry is we always closing we do a great job. There’s probably like four people that actually do enough business to know who actually flipping is. The majority of the people they’re talking to are a mom and pop who wants to get rid of their house. And they will never have heard of you because they don’t know about home flipping, but they care about is how you made them feel when you met with them. Did you give them confidence that you’re going to close on their house and you’re going to do with it what you said that you were going to do?
So everybody that’s focusing on branding. I tend to try to advise them to move away from that and get more into your own reputation and how you personally impact people. If your Instagram is way more important than the name of the broker using. If they go on your Instagram to look you up and you look slimy or you’re doing unethical things or you’re a total egomaniac, they’re not going to use you. And it doesn’t matter if it says one of the Geffen Sotheby’s Realty or something like that. I think that that’s much more important. So your social media tells almost everyone. I mean, you guys know how that is.
Like if you meet somebody and you think about dating them, well, maybe you guys are married, so you don’t know this as much, but you’ll hear other people say the first thing they do is they go on your Facebook or they go on your Instagram and they’re like, is this person married? Do they have kids? What are they up to? Your clients are doing the exact same thing. Part of why I love BP is that you can see what someone’s reputation is based on their engagement on the website. So I can see the type of questions that they answered in the forums.
I can see what their page says about what they’ve done. I can see what kind of deals they’re into. I can ask someone else that’s a colleague of theirs. Hey, did you do a deal with so-and-so? What was it like? You have that like their brand through BiggerPockets we’ll tell you a lot about them. So ,that’s where I think agents really need to focus their time is on how they’re living their life. It makes a very big difference because in real estate there’s no punching it out the clock. People say all the time, are you working today?
I’m like, well, I’m always working. But at the same time, I’m kind of never working. I’m going to Hawaii to hang out. But while I’m in Hawaii, I posted stuff on social media. I met with some people. I generated three listings while I was there. That was work. But what was I doing the whole time? I was going out to dinner with people, you’re like walking on the beach. That’s kind of the cool part about being a real estate agent is your work life and your personal life blend. You have to kind of embrace that concept of social media is where everyone’s going to go to see you.

J:
Love, love, love everything about all these tips. They’re awesome. So David, we’re going to skip the four part of the four more go directly to the more, but before we do that, what other awesome, amazing pro tips would you love to share with our community out of your books are just that are your absolute favorites that people can implement right away, or that are really just going to change their whole perspective outlook, et cetera. And then we’re going to go to the more, what have you got for us?

David:
Would this be specific to real estate sales industries?

Carol:
I’m just thinking anything specifically out of your books that are just a couple gems that you just are so looking forward to people hearing about.

David:
Oh, that’s really good. The first is that your mindset makes all the difference in the world. The big reason I think people don’t make it in real estate sales. The number one reason is they brought a W-2 mindset into a 1099 world. And you don’t understand when you’re in a W-2 job, how much work is being done before you ever got involved. When you’re just standing at the cash register of Craig and auto parts waiting for someone to come bring the spark plug for you to ring it up. It’s very easy to get into this attitude where you’re like, Oh, I have to service a client and I got to go stock. Why am I doing everything? I got to fill out the order form to I do everything around here. Why am I only getting paid this much? And it makes sense.
You’d see that because you’re seeing the tip of the iceberg. You’re not seeing all the work that someone did to get that person to come into the store to decide what products should be sold, to work on the marketing they were going to put up, to get people to want to buy, who decided how they were going to price it, who negotiated with the wholesaler that was providing the parts I could go on forever about everything that they’re doing on their end. So the problem when you become an agent is you have this W-2 mindset. You step into it and you’re expecting that someone else has done all the marketing, all the stuff to get the phone to ring. And all you got to do is go show the homes because that’s all you’ve ever done in business.
And this is a rude awakening. If you don’t adapt to the fact that you’re doing all of it. You thought you had a job when you waited tables at a restaurant, you did 4% of the work of that restaurant. There was a whole lot that someone did, literally a hostess that walked them and sat them in front of you and said, here are hungry people, give them a menu and ask them what they want. Someone else made the menu. Somebody else is running the kitchen. There’s so much in business. When you want to be an entrepreneur, a full-time real estate investor, a real estate sales person, a loan officer any other form of business you are saying I will do everything. I’m running my own books. I’m doing my own marketing. I’m generating my own leads. I’m closing those leads. I’m working on client reviews and you have to put your big boy or big girl pants on and step in knowing that’s what you’re doing.
I would say, that’s the number one thing people get wrong. They don’t like the idea of a boss telling them what to do. They don’t like the idea of having a ceiling that stops them. That’s great. I didn’t like that either. Also understand someone was bringing you tuna and you were a house cat that just had to eat it. Now you’re going out there to be a lion you’re to hunt your own food. And you have to have an edge when you step into that world to be able to do this right. You can’t have all the benefits of the 1099 world and all the privileges of the W-2 world. You have to accept. I’m either going to be one or the other.

Carol:
Very cool.

J:
Love it. Love it, love it. Okay. As Carol mentioned, we are going to skip the four part of the four more because you were with us on episode 20, and you gave us the answers to your four questions. I hope everybody will go back and listen to that, but I definitely want to give you the opportunity to address the more part of the four more. And that’s tell our listeners and our community where they can get in contact with you, where they can buy your new book or pre-order your new book Sold Every Real Estate Agents Guide to Building a Profitable Business. And for anybody that may want to start a David Greene team elsewhere in the country, where they can reach out to you to get more information.

David:
Thank you, J. So you can buy the book at www.biggerpockets.com/new books. So it’s slated to be released January 21st about a 24, 25 days from now. It’s the very first book on the top of there. To get ahold of me, you can either message me on BiggerPockets. I don’t get to that as often. You can also send me a direct message on either Facebook, messenger or Instagram. You probably got a better chance of getting a faster response through there, but if you message beyond BiggerPockets, you have a hundred percent chance I’m going to see it at least it just won’t be as quickly. So you can also reach out on LinkedIn, if you’re interested in working for me or with me or partnering in some way, make that clear in your message. So I know what we’re talking about. If you just have a question that you wanted to run by me that’s fine too, but those are probably the best ways to get ahold of me. I like to try to channel everything through BiggerPockets, as much as I can because I love that community.

J:
Awesome. David, this has been absolutely fantastic. Thank you for being our first guest of 2021 Happy New Year to you. And we look forward to having you back in the new year next year, to talk about the progress you’ve made over the last 12 months, because the progress you’ve made over the previous 12 months has been amazing. And-

Carol:
He’s just getting started baby-

J:
We love having you around.

Carol:
I can just tell he’s about to fly even higher than he has before. David, thank you so much for sharing everything you’ve shared. It’s always an absolute pleasure to chat with you.

David:
Thank you guys. As usual, you made this a blast, so thanks for making podcasting fun.

J:
Thanks Dave.

 

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In This Episode We Cover:

  • Why you should read David’s new book, Sold!
  • The difference between an average agent and a great agent
  • Why 87% of agents are out of the business within 5 years
  • How to market your products and services
  • Top lead generation strategies for real estate agents
  • Understanding your skills/weaknesses so you can build a team to compensate for them
  • The importance of “baseline adjustments” when talking to clients
  • Why a W2 mindset doesn’t work in a 1099 career
  • And So Much More!

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Books Mentioned in this Show:

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