Episode #27 – Personal capital Gives You a Competitive Advantage Wholesaling Houses
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Welcome to another edition of EarlToms podcast.
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Today we’re gonna talk about the people that you work with in this business. Whether it be a VA, other wholesalers, attorneys, title companies, real estate agents. To begin, though, I want to start with just a very simple question and lead you into the other parts of it. And that question is, would you work for yourself? Would you work for you? If the answer to that question is no, then you’re going to be limited in your success with your business. There, you know, there are ways that you can answer that question is a yes. But in order to be able to do that, you’re gonna have to change some of the some of the things about you, whether it be a personality, your accountability, how you handle different situations, the responsibility that you take for your, for your business, and you as a person. And that’s one thing that a lot of people struggle with, is they decide, okay, well, I’ve, you know, I’ve wholesaled a couple of houses. So I’m going to go hire a VA, and I’m going to do this, and where’s a investor friendly attorney, and whatever city or state that you’re working in. But that’s not the the approach that you need to be taking. When you’re looking at your business as a whole. What you need to be doing is getting yourself grounded to the point of being able to answer the question, yes. Would you work for you? If you if you can never answer that question with a yes, then you need to be an individual that just does it on their own, takes the headaches takes the problems. Because you’re never going to be a successful employee, you’re, you’re you’re basically you have an employee mindset. And instead of a business owner, or a boss, mindset, and that’s what, that’s one aspect where a lot of people struggle in this because they see the deals out there, the potential money, things like that, and they go, let me go get some of that. And that’s not a bad goal to have you, you want to be successful. But a lot of times, you get ahead of yourself before, you should, I mean, I have one contractor, loving to death can count on him for anything. But we’ll sit there every so often. And he’ll get running behind on a job. And next thing, you know, he’s missed something. And he says, we didn’t talk about that. And then I have to go back and remind him of the conversation. And it winds up getting getting fixed. But you know, the contractor aspect of it, you know, you probably have to go through 20 contractors before you find the one that you can really depend on is going to do your job that doesn’t have to that you don’t have to stand over to make sure that they’re doing everything. There, there’s just different aspects of the business as a whole. So you really need to be able to answer yes to the question of would you work for you. One way of doing that is really getting yourself grounded, taking an internal look at you as a person and being dependable. If you don’t have confidence in you, who is going to have confidence in you. It’s it’s a way of getting the job done. But at the same time, if if you have people that rely on you, the same way that you rely on them, then it then it works as a team and everyone can can be successful in the business. But you have to make it to where it’s almost like when you were growing up as a kid. You didn’t want to disappoint, disappoint your parents. When you did you felt bad you felt guilty. You knew you shouldn’t have done it, things like that. But at the same time, there comes a point in time in everyone’s life where we have to grow up.
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Everyone is cut out to be a business owner, a CEO, an entrepreneur, whatever you want to call it. Got an attorney that I deal with on a business basis, she’s not my closing attorney. But it took me some years to build that trust between myself and her. So now anytime that I that I need something, I can simply just text her, I know what I’m gonna get in return. And she, she knows how I act, how I function, she knows certain times I get ahead of myself, certain times I want a result, you know, quick. But you can always get that when it comes to business and legal issues and things of that nature. But you, you have to, you have to take the approach, when you work, when people work for you, of who is going to be the best fit for not only you, but for the company, one way that I hire in the company. And a lot of people don’t like this, especially when they come in for the interview. But what I do is I take the people that that are the employees of the company, we go in the conference room, and then I’ll bring whoever the, you know, the applicant is whoever we’re thinking about hiring him, I’ll bring him in. And then the employees, whether it be the office manager, the acquisitions, anybody that’s in the office, they actually sit at this conference table, and just kind of have a how are we going to mesh, we’re not, we’re not going to get on a deep conversation or anything like that it’s more of a personality does it fit the company, the culture that’s in the company scenario. And then if that person makes it through, and they get the majority of the of the employees a recommendation, you know, you’re all you’re not always going to find people that match with every single person in the office. But if you get, say, three or five people that say, Hey, I think they’ll fit I like talking to him. They, they seem to know what they’re doing. They’re smart, they seem to have a good personality, easy to get along with those kind of things, then what winds up happening is, is they come in, and they talk to me. And when they talk to me, once all of the all of the interviews with me take place, then we go back as a company, and we sit down back at the conference table. And we go through every single person that came through that, that they interviewed and that I interviewed. And we have a discussion, we talk about what we liked, what we didn’t like, is something fixable, Are there going to be a problem are they going to be an asset to the company. So it’s it’s a kind of an intimidating interview process. But at the same time, the company as a whole has a loyalty to each other. Because everyone there everyone’s ability to make money is a direct result of somebody else in that company doing their job, and being able to have a an easygoing, friendly workplace, but everybody is still doing their job, and they’re all accountable to each other. So it almost turns into a family situation. So if I get the input for them, say they’re going to be the ones that interact with them more than I’m going to interact with them. So it turns it gives them a say in what the direction of the company is going to go in. But it also gives me the ability to take some of the burden off of myself. Because one thing that I am actually not good at is the interview process. I’m good at reading people. But I’ve learned over the years that people can be manipulative, they can fool you, you get in and and now all of a sudden, you’ve got all this drama in the office, things like that. So if I put more people in front of this person before they reach me, well, now I’ve got five different perspectives on how someone acts their personality, if they’re going to be a good fit. So, in essence, I’ve got multiple opinions that we can all go through and make a decision on. So at the same time, if that person gets hired, it’s not strictly just on me, it’s on the company and the employees as a whole. So it It helps in that aspect because my main goal is to protect my company, do what’s best for my company, but also understand that the people that work in the company are the ones that are keeping the doors open.
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Years ago, when I got in this business, I was told, outsource everything that you can, that you are not an expert on. And that takes too much time away from you actually making money. And it didn’t really make a lot of sense to me at the time. Because I thought, Hey, I can do everything, I learned how to do websites, ads, SEO, you name it, I learned how to do all of it, because I was on a limited budget getting started. So it, it’s not the easiest approach to take. Because when you’re getting started, you don’t have a lot of money. But at the same token, I’m glad that I learned how to do all of those things. Because now, when I get a phone call, or I have a conversation with, you know, the the company that does the SEO, now I understand what they’re telling me, so I can understand whether they’re doing it right, or if it’s gonna wind up hurting the company. It’s it’s a, it’s an approach that I recognize my weaknesses. But I also recognize my strengths, and I don’t try to be everything to everyone, because that’s not going to facilitate the company growing the way that it should. And it could also impact, you know, the employees that are there, because if I tried to do everything and micromanage everything, the now the company may falter, may slow down, you know, I told you before, go find new money. That’s how you do it, you let people do what they’re good at, including me. And then you stay away from things that you’re not good at, because it’s going to wind up costing you and the company money down the road. And even in the short term, a lot of times, because what winds up happening is, is when you start doing things that you’re not good at, then you’re slowing that company down, you’re not making the money. So you’re actually in a lot of ways creating a bad habit for you and your company. When you’re when you’re starting out. Or if you’ve been in business for a while, and you’re trying to expand, you’ve thought for a little while, hey, I want to hire some people to help me out, I’ve got too much time on my hands. The only time that that should take place when you’re starting out is when you get up in the morning. And you have your list. And you actually get to the habit of keeping that list checked everything that’s on that list keeping it checked off every single day. And when you get to the point of 2, 3, 4, 5, 6 months, to where you’re you’re put you’re having to push things into the new day, and you’re almost pushing the entire previous day into the new day. That’s when it’s time you have to sit there and understand what’s going on in your company and not be able to get your company behind. Because the further behind your company gets, the bigger the hole that you’re digging out of has to be. So it it almost when I made the decision to start outsourcing and hiring people as when I was getting till about half of my to do list page being pushed to the new day. Because I knew if I got to the point of that full day being pushed and constantly staying behind, that meant now I’m working six, seven days a week, and we all need a break because we’re all gonna burn out. There is not an entrepreneur on the face of the earth that had that does not have a burnout that goes on with their company, their life. Just all aspects around an entrepreneur. Because there’s so much risk, there’s so much liability, there’s so much stress on a on a business owner that people don’t see all the time. So you have to come to the conclusion of when is it a good idea to make the move and go ahead and hire because if if you’re too busy to actually train someone the right way, then it’s pointless for you to harm you’re gonna create you’re gonna give them bad habits because they’re gonna see your bad habits. You’re not able to spend the time with them. They are only getting partial information. So you’re you’re you’re just you’re making them kind of learn on the fly. And in this business learning on the fly. usually results in an expensive lesson. Usually cost a lot of money when that happens. So you have to you have to be careful with it now don’t use VA’s. I know there’s a lot of people out there that use VA’s. When you’re looking for a VA, you almost have to take the same approach because this VA is going to be the first time, money is potentially touched. So you’re looking for a lot of people say, I’m going to go overseas, I’m gonna hire this VA, I’m gonna do that I’m not gonna say that’s a bad idea that that’s worked for a lot of people. But you have to, in your own mind, think, is this the message that I want the money to receive? The very first time it’s touched. And in a you, you almost come out better to hire someone that sounds familiar. That to the person that they’re calling. They’re like I said, there’s a lot of people that are successful using the overseas VA, and it for them, it works. But it doesn’t work for everyone, you have to find the solution that is best for you. growth for your company, and will give you long term success until you can get to the point of hiring someone in house to do all of this, all of this cold calling and keeping things organized. For your company. The biggest mistake that I see a lot of people make when they when they go look for a VA is they don’t actually need one. They’re only looking for a VA out of pure laziness, because you’re working two hours a day, three hours a day, and you’re claiming that you’re just so busy. There is not a single entrepreneur out there, unless they hit the lottery, that didn’t work 10 to 12 hours a day, at minimum when they first got their company started. You have to pay your dues, so that you can actually appreciate it when the company actually become successful. Because the maintaining part of the company is actually the hardest thing to do. starting a company is super easy. You go down to the courthouse file an LLC, and you’re done. You open your doors, if you’ve got a low dollar, or you work from home, it’s super easy to start the company. Maintaining it is where a lot of people fail. That’s why they say most businesses fail within the first two years. Half of it is due to planning, and half of it is due to an owner being lazy. That’s the thing that that most people don’t understand. Unless your days are completely busy. And you’re moving new days, and you’re moving items into the new day, the next day. You don’t need a VA, you just need to get off your butt and go to work. Once you do that, then you’ll actually understand it. Because you think of it in terms of I barely have money, do I have the $100 $500 whatever the VA is gonna cost you every single month. A lot of people say, Well, I don’t have the money to actually go buy houses. If you’re spending $500 a month on a VA, that’s $6,000 a year. If you do $6,000 a year for five years, that’s $30,000. Could you have bought a house? Could you have gotten a down payment five down payments for a loan to flip a house? Well, what could you have done with that money. So your your your focus, you you want to rush, your success and success cannot be rushed. We’ve all seen the little Facebook and Twitter memes that say everyone thinks success looks like this. But this is what it really looks like with all the little circles and everything in the success. To be successful, you have to do the work. So if you’re out there, and you’re not even doing a deal a month, on a consistent basis, five deals a month on a consistent basis. You don’t need any help. You don’t need any help whatsoever. You need to work. That’s that’s what you really need to do. Because when you start looking at all the money you’re wasting, because you want other people to do your job and just make the money. You’re not gonna make any money because you don’t know how to train them. You’re not able to watch what they’re doing.
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And when you do, oh, I’ve got this. I’ve got this telephone script. Let me ask you a question. If it worked as good as a lot of these gurus say it does and they were making money hand over fist with it. Do you really think that they would share it with you so that you can make the money that they’ve been making off of it? The answer to that is absolutely not. That’s being naive thinking I’ve got a I’ve got a phone script. I can just give it to Somebody and I can call and ask and do this other stuff. It’s not how it works. You need to get your program your business, the habits, the phone script, the accounting, the SEO, the fundamentals of how you do business, you need to define those, you don’t need someone else to define how you do business. There are no two businesses in this world that are similar. They may be in a similar industry, but they are not similar. There’s something called the competitive advantage. And where the competitive advantage comes from is personal capital. People, the better the people that you work with, the better your competitive advantage. If you go out and you say, here’s a phone script, let’s VA, just start calling, I’m going to go and, you know, watch TV for the day. So let me know when you got a lead for me. You are personally bankrupt, you yourself have no personal capital, you’re lazy, you want somebody else to do the job you signed up to do. So when you hire someone, how are you going to actually expect them to do the job, you’re not even going to do, you just go out there and expect them to make you all the money, pat you on the back, say how great and wonderful you are, when they had to actually go out there and earn it themselves for you, you’re not going to get respect that way. And you’re not going to have a company with a solid culture. Because you see a lot of these. And this is a point that I can make that every single person out there has has seen. You see all these wholesalers out there saying, Hey, we’re hiring an acquisition manager, you’ll make this you’ll do this, you know, all these all these promises. And then you look up in two or three months, that same company is looking for another acquisition manager. Because what winds up happening is, is that acquisition manager that they hired, they realized real quick that the owner had no idea what they were doing, the owner was lazy, the owner had no personal responsibility for anything that happened in the in the company, they just wanted to blame everyone. But then what what the hidden advantage of all of that was his that acquisition manager actually learned the business because they had to learn it on themselves. So they said, You know what, I don’t need you, I know what you do, you, I’m gonna go out on my own, and I’m gonna do it. And then I’m gonna, I’m gonna be better than you are. Because I’m not afraid to work. That’s what happens. You, anybody that says, hey, I need an acquisition manager. And then next thing, you know, you see him in a couple of months. That is the exact reason that happens. It has nothing to do with this company was a great company to work for. If a company is a great company to work for. You don’t leave it. If you’re making enough money, you don’t leave it. But when you have people making these promises, and then once you get in there, it’s almost like that relationship that you get started. Everything’s great and wonderful in the very beginning. And then you start to really learn who that person is. And you figure out, do I really like this person? Or did I make a mistake and need to need to get out of this relationship. That’s how business works as well. So when you’re looking for people to hire, look inside you first. If you wouldn’t work for yourself, you don’t need to hire somebody, until you take personal responsibility for yourself. You, You can’t expect somebody else to do it for you. So build the personal capital within yourself. First, get your competitive advantage between you your accountability, your responsibility, your knowledge, your experience, get all of that so you can pass it along. And in that way you can be you can be a successful entrepreneur or business owner. And then that way, whenever you hire someone, they’re going to see just how hard you’re willing to work. And then they’re not going to want to disappoint you.
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So now, instead of you having a single personal capital, that’s you now you’ve just doubled the personal capital in your company. So now you have double the competitive advantage. Because real estate is that industry where it breeds laziness, you get a big check, you relax. I got it. I got it made another deal is just gonna find its way in. You look up at your bank account and 30 month, 30 days, two months, whatever it may be. And now your bank account is completely dry. There’s nothing in it and you wonder what happened. You Your personal capital is bankrupt, you’re lazy, you have no personal accountability. So you have no competitive advantage against other businesses out there trying to do the exact same thing that you’re doing. Make sure if you really intend to be successful, that you do the work first that you expect other people in that company to do, when it comes time to outsource it, you’ll know you’ll have a good feeling about it. Because it’s not going to be when you get burnt out the first time. That’s, that’s not when you need to go, outsource or hire or anything like that. That’s when you have to dig in and say I want to be successful and push through it. If you can’t do that, when you first get burned out, you’re setting yourself up for failure, because once a year, once every two years, you’re going to get burned out. So do you burn out for a week, a month, three months, how long do you burn out before you reengage. So every time you kind of walk away from what you’re doing in a company because you’re burnout, it hurts your company, until you can actually dig in and push through the being burned out. You’re gonna have these these episodes in your company, to where your revenue almost looks like it falls off a cliff. When you look at your charts. And the only real The only thing that the only person that’s going to be responsible for that is you. Because that’s the culture that you built in your business. That’s what everyone in the company is following. followers have just as much influence on leaders as leaders do with followers, because every leader at some point in time was a follower. So when you get these people in your company that are actually talented, and they can help your company grow and be a long term employee. But they come in and they see certain aspects of you, that makes them nervous. They don’t know how long they’re gonna be able to keep a job. Secretly, what that employee is doing is learning everything that they can, they’re like a sponge, they’re soaking it all up. And then when the when the opportunity comes. They’re out on their own, they’re starting their own, and they’re going to compete against you. And more than likely, they’re going to be more successful than you are because you taught them everything not to do. Those are the best lessons in the world. So a lot of these guys in this business are showing the the people that they bring in, actually what not to do. And that’s what makes them more successful. And then they look up and they go, well, you’re supposed to be splitting this with me. No, they’re not. They got tired of working with you. You have yourself to blame for that. That’s as simple as it can be. Make sure you build your own personal capital brand yourself. When someone thinks of you What do they think? Is he a hard worker? Is he friendly, fun to be around? All of this appearance stuff is irrelevant. Nobody cares if you’re pretty or handsome or, you know, tall or skinny or large. Nobody cares anything about that. The personal capital is what they care about. Are they friendly? Are they smart? Do they work hard? Can I trust them? If I have a problem, can I go to them with them, and them show me what I should have done or what to do? The next time that shows up. Those are the real leaders that followers are going to follow because the followers see the personal capital in the person that that they’re following. And the same time the leader sees the personal capital in the followers and wants to make the followers the best that they possibly can.
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When I hire people, they know you’re welcome to stay. But my goal when I hire you has two aspects behind it. Number one, if I get hit by a bus, I want you to be able to do this on your own. Number two, I want to teach you every single thing that I know because in real estate eventually, for you to be successful. You need to go out on your own. If you sit there and go work nine to five in real estate, you’re in the wrong business, you have no motivation. You have no go get it and that’s gonna hurt your ability to make money. So like I said, when I hire people, their personality test that I give them. I always look for coachable and whether or not They can ask for money. If they if they score high on those two things. And the and the rest of the employees think that they would be a good fit for the for the company, their heart, it’s just that simple because I can coach them, lead them the way that I need them to be. And then it’s a sad day. But at the same time, it’s a very happy day, when an employee comes to me and says, here’s my two week notice, it’s time for me to do it on my own. You don’t like hearing that. But it’s real. It’s reaffirming, you did your job. Because now that person doesn’t need you. That person just won’t cheat. So when they leave, they’re gonna call you and say, hey, I’ve got this deal. What do you think about it? Or, hey, I’ve got this deal. Do you want to buy it, and someone that that’s a good person that likes to see others succeed? If it winds up being to do, they’re gonna buy, because you know, on the person they’re buying it from? is their right brain. They show them every single thing that they know. So when that person shows up with a deal, you know, it’s a deal. That’s reaffirming, you did your job. So before you go, like I said, at the very, very beginning, before you go out and start hiring VA is looking for closing attorneys, title companies, real estate agents, would you work for you? If you can’t answer that with Yes. figure out a way to answer it with Yes, then move forward. work on yourself as you’re going, you’re gonna make mistakes we all do. But be able to own them. When you own, you don’t repeat them. When you pass the blame to someone else, you’re gonna make that same mistake, not too distant future.
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My goal with this podcast I know, on some episodes, it almost seems like I’m going on a rant. But my my goal with this podcast is to do the exact same thing that I do with my company. If in six months or a year, someone that listens to this podcast calls me and says, You know what, I still I didn’t know a single thing. Or I knew, I thought I knew everything. And I started listening to your podcast. And I put six figures in the bank, and a year, six months. I did my job. I educated you, I built a competitive advantage for you, I helped you do that. But at the end, you’re accountable to yourself, you’re accountable to no one else. When you build your business. When you get your business on a solid footing, that’s when you become accountable to everyone else. When you have the employees when you’re outsourcing things, that’s when you start being accountable to everyone else, because they’re depending on those doors staying open, so that their bills stay paid, and food is on the table for their children. You have to have personal accountability, you have to have the most personal capital of anybody in that organization for it to be successful. If you don’t, you don’t need to hire someone. Matter of fact, I’d almost say you need to get out of the business, because you’re just gonna ruin it for the rest of us, the ones that are willing to do the work, the ones that are willing to do it the right way.
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With that, I’m gonna bring this episode to a close. I hope you’ve enjoyed the rant by EarlToms today. I didn’t necessarily mean it as a rant. But at the same time, it almost needed to be a rant, because I’m personally invested into every one of these listeners. I want to see you successful. And the only way that I can do that is to give it to you straight without the sugarcoating that a lot of these gurus give it to you. Because that’s not going to help you. I want every single listener that’s out there to be successful to send me an email at some point in time and say, You know what? I thought you were bat crap crazy. And the next thing you know, I tried something that you said. And it led to a small little when I tried something else that you said it led to another small win, and today. I have five employees. We’re doing 10 deals a month. I’ve got $100,000 was coming into the company every single month because I listened to your to your podcast and I was willing to give it a try. Because you told it like it is instead of like how we thought we needed to hear. But again, hope you enjoyed this episode. We’ll be back in a couple of weeks with a with another one. Let’s get 2021 started with a bang.
