Turning Houses into Homes and Profits: Working as Spouses in Real Estate
Nate Trunfio: And here we are again about ready to get started on another great episode of the Real Estate of Things. I'm Nate Trunfio, your host with Lima One Capital, but we have a power duo and couple in the house, powerful in what they do and who they are. And so I'm excited. Welcome Tiffany and Josh to the Real Estate of Things podcast.
Tiffany: Thanks for having us.
Nate Trunfio: All right, well let's get cranking something that I know both of you have done well, you've seen, but I want to talk about scaling. So specifically in regards of fix and flipping, what do you see as the most important parts of scaling of flipping operation?
Tiffany: Yeah, so I think our industry is really known for using this word scale really loosely. And so we're really big believers that you have to build, then stabilize, and then scale. And I think a lot of people forget that you have to build and stabilize before you can throw a fuel on the fire. And so I think that's all stemming from gurus putting out these sexy clickbait titles saying scale, scale, scale. But ultimately the first thing we have to do is build the foundation. So we've got to build the foundational CRMs, the SOPs, the workflows, making sure our phone systems are going to make sure that we're the most productive that we can be, that we're diversifying outside of one to two marketing channels. And I know that stuff doesn't happen overnight, but ultimately we can't scale anything without that stuff in place. And then from there, once we build the foundation, then it's about stabilizing a team. Because at the end of the day, you can't scale crap if you have no team to leverage. And I think that too often we were all one man shows, we all get started as a one man show, but too often we hear our one man show students say, " I want to scale." And it's like, Okay, well in order to scale, we have to have the people in order to scale an operation. So let's focus next on stabilizing out a team, which means we have to recruit, we have to onboard properly train, put in the infrastructure, the policies, etcetera. And then once we stabilize out a team, then that's when we go throw what I call fuel in the fire and at the snap of a finger, Josh and I can launch a new city tomorrow. All of our systems, our team, our leaders are duplicatable. So now that's true scalability, can I go launch a new market, launch a new channel, do whatever, and within 48 hours have it live. And so I think we have to focus on building, stabilizing, then scaling. And that's just my personal take on it whenever people ask me about scaling.
Josh: Well, you touched on something very important there, and it's the people component. And unfortunately a lot of people in our space, they get stuck in a one or two man show because they don't understand the onboarding, the recruiting and finding the right person, putting them in the right seat, and then truly equipping them and putting them in a position to be successful. And because of that, you see people, they'll go and they'll hire three to five people, but it's short- lived. They'll be on the staff for maybe four to six months and it'll all come crashing back down. And now they're again stuck in this one to two man show and fearful, unfortunately fearful of hiring someone else because of that bad experience. But it's a matter of making sure that we're building the right way, we know what components we need like Tiff said, and then once we stabilize, then we can pour fuel on the fire.
Nate Trunfio: Nah, I mean great points. And Tiffany, I couldn't agree more. I mean it is such a buzzword in our real estate investor community rightfully so, but still I think it gets a lot of bad rap. And I'm very interested in this question too. So there's a lot of HGTV specialists, a lot of people that just like and look at all the vanity numbers and things that are out there. And so from a metrics perspective, what are maybe the KPIs that aren't quite the vanity of how many doors do you have? How many deals did you close and transact on? So as you're going through this build, stabilize, and then scale mentality, what should you be focusing on maybe in the earlier stages of growing a company?
Tiffany: Yeah, so I think one thing that would really help folks really grow over the course of time is to focus on the return and not the cost. And too often I start every training of, " Hey guys, if I told you you can make a 4x to 5x return on something, how much money would you spend?" What do you think the answers are that I get?
Nate Trunfio: Gazillion dollars?
Tiffany: Yeah, well no, a lot of times it's like 20 grand, 30 grand. It's like, why aren't you saying infinity? If someone said you were going to get a 3x, 4x, 5x return, the answer should be, I'm willing to spend whatever I can get my hands on to make this return on investment. And there's a lot of KPIs that go into that, but I think first is the mindset around return versus cost. Once we can really get honed in and let go of our fears of not getting that return, then it changes the game for how we approach marketing channels and cost and all that. So from there, once we focus on return and not the cost, then it's like, " Okay, what's the cash conversion cycle per marketing channel?" And what that means is from when I spend a dollar today, when should I expect a return on investment? And too often in our industry specifically, and I'm not sure where it comes from, is we think that if we spend a dollar today, we're going to make money on that dollar this month. And that's far from the truth. So we do over 19 marketing channels in my office, and my average cash conversion cycle as a whole company is five and a half months, but it's nine plus months for cold calling. It's I think around 90 days for say PPC, which is the spread here, your hottest channels versus your outbound channels. And even direct mails, direct mail is our number one performing marketing channel for almost two years now, and it has a six- month cash conversion cycle for us, which means that if I made the decision today to drop the next round of mails, which I just did by the way, paid a bill today for, I don't know, 50, 000 pieces of mail on average times 45 cents, whatever that was. And so when we do that, the first round of that mail doesn't even start going out to doorsteps for another week. So a whole week got by where I spent the money, didn't get anything for it. Then I do eight hits in a month, which means I send it out Monday and Friday over four weeks for this specific mailer. So then the last mailer is not even going to hit the doorstep for probably six to seven more weeks, and then it takes 29 days from the time a direct mail lead calls in to, but before we even put it in contract, let alone 30 days to wholesale at 90 days to rehab it. And so the point I'm making here is there's a million KPIs to focus on, but as we're starting to scale and grow, one thing that we have to really hone in on is our cash conversion cycle by marketing channel. Because really right now what we're seeing is a lot of people are throwing money at a marketing channel praying that it sticks. And then you say, " Hey, what is your goal right now?" " I want to make a hundred grand a month." " Okay, great. What are we spending? Why did we spend that and when were you expecting the ROI?" And too often it's like, " I don't know, I just threw money at a channel." Okay, so let's break it down. And so from once we have our end goal in mind, we can reverse engineer every single marketing channel there is in real estate, we can use industry standard stats. So for example, what I mean by that is in mail 1 of 42 call- ins is a deal on average across the industry. Now ours is 1 of 22, but we're really experienced. So if I were starting mail for my first time ever, I would use 1 in 42 call- ins is going to be a deal that includes the nos, the yeses, et cetera, and then a half a percent response rate on your mail. Those two things can at least get you started. So if you woke up today and you're like, " Hey, I need four to five more deals a month, then you could say 40,000 mailers times 0. 005 is 200 call- ins, 200 divided by 42 is four to five deals. And then after you get started and you start tracking your own metrics, then you really get honed into what actually works for your company. And I know that was a loaded question and I'm answering it in a bunch of ways, but ultimately I think that really on when should we expect a return on investment is the first thing that we need to hone in on because too often we spend money not knowing what the hell, why we're spending it, where we're spending it and when to expect a return on it.
Josh: Yeah, and another component to this is Tiff talked about the stabilization period. A big part of the stabilization is optimizing. So understanding what are the metrics that we're looking at, our leads per contract. We also want to know what's our cost per contract? Well, I know my cost per contract and I know my average profit per deal. Now I know how much I truly can go spend based on my desired ROI. Is it 3x, 4x, 5x that I'm looking for in order for me to truly say, " Hey, I'm okay with getting a cost per contract of$8, 000 if I'm making 24 or 32, 000 on the back end." So once we understand those things, and then that also transitions into the sales team as well. It's one thing to just track metrics, but it's another thing to know the story being told and identifying bottlenecks and truly optimizing the conversions on that side of things. Every marketing channel is going to generate opportunity. There's no such thing as truly a golden list or anything like that. You will get leads in people who want to sell, but it's up to you and your team's ability to convert on those leads and maximizing all of the time, energy, and resources that are going into the marketing efforts.
Nate Trunfio: Man, I'm just choosing over here just because the sales leader in me, I mean, you all talk about so many good principles that are so found and as you say them quickly, it's like, " Oh, that all makes sense." It's a lot to do. In all those phases, I think it's funny that we're in the people business from a number of realms, and that's one of the reasons I think why cash conversion cycle that just takes time where all people are... End users are people. But then you're also like, Tiff you talked about shiny object syndrome and definitely we all know that the reason why people want money tomorrow is just for instant gratification in our whole world is driving people towards that. But it's a lot involved in all of that. I think what I'm really curious on, how do you weed out some of the noise in all these shiny objects and the instant gratification desires? How do you stay focused on the right path and plan throughout all of this?
Tiffany: A couple of things. One, I would say get a mentor that doesn't focus on the shiny objects, because I think a lot of this is driven by the person who's holding you accountable. So if you are in a community where you're being driven by someone who's having you chase all these things, just be careful because they're likely doing it to sell you more and more and more where a good mentor will hold you accountable to staying on track to exactly what you have to hit and ignoring the noise. After that, I would say shut off all of your own social media stuff. And I'm saying that... And I hate to say that because ultimately I have my own education company and people find me through social media, but one of the big things that I did this year was I unfollowed the people who shove it in your face of what the result is getting you, because it always makes you feel like, " Oh my God, I'm behind, or am I doing what I should be doing? Why are they here? Why are they there? And I'm here." And when I really cut the people off that put that stuff out there, it allowed me to just stay focused on what the end result is. So for example, if you followed me, you probably would never even guess that we're doing millions of dollars and stuff. You don't see me pumping out Ferraris and fancy cars and all this stuff. I'm putting out what is working, what's not working, what's driving results, what do deals look like? Hopefully we're motivating to some degree, but I think that a couple of things are just like removing what's forcing you to chase things. And there's always going to be the next thing to chase online. Now it's like, out of nowhere, the last 6 to 12 months is it's sexy to wholesale and buy all these companies now instead of just wholesaling houses. Instead of really, if you're in real estate and you're a wholesaler listening to this, or maybe you only buy rentals or whatever, I challenge that your next shiny object should just be diversifying your exit strategies. So if you're spending$ 50,000 on marketing or whatever it is, $ 10,000, it doesn't matter, and you aren't flipping houses and you're only wholesaling, well then your next goal should be flipping houses. Because 50% of my deals are not a deal unless I flip them, which means that I'm maximizing my marketing dollars versus somebody else in my market who's not flipping their only wholesaling. If you're not taking down rentals or flipping a house, then you're walking away from seven figures hands down. It is a guarantee that you're walking away from at least multiple six figures in revenue because you're not maximizing your exit strategies. So I always tell my students that are especially wholesaling first, when we say chase the next thing, it should be chasing the next exit strategy. How do we continue to hold more rentals, flip more houses, and build that active income so that we can continue to hold more assets as rentals and stay focused on the end game, because too often people chase commercial or they go down this other route and they lose track of the stuff that was actually creating the wealth and the revenue for them and their future.
Josh: Yeah, that's well said. I think one thing that's really important is just doing a lot of the same things repeated over and over and over again is really boring, especially in today's day and age. But one thing that's helped us is we're both ex- athletes, we both played collegiate sports and one thing about that experience is, we as entrepreneurs, we're no different than your most elite athletes. What does LeBron James do every single day? Well, he shows up, he watches game film, right? Nothing sexy about that. He shows up, he does free throws, he does dribbling drills, he does all of these fundamentals, which are not like anything sexy whatsoever, but he does the same things over and over again. If I were to walk into the gym first time ever in the gym and I had an expectation of bench pressing 400 pounds, I would fail miserably and I could probably kill myself ultimately if I tried to put that on my chest. But the reality is we've got to show up every day. We've got to be disciplined, we've got to be focused and getting the reps in, and over time we'll build that strength, we'll build that muscle and eventually reach that end goal. And it's no different in entrepreneurship. There's a process to it. It's a science. If we do A, B and C, we're always going to end up getting D. And unfortunately we get bored by those processes and because we're bored of it, we go chase the next thing thinking that that's going to be the solve for us just not being fulfilled with that instant gratification. But it's this continuous cycle that we get stuck in until we actually make the decision to stay dedicated, stay focused, and do the boring things that are then going to lead us to the end result that we want.
Nate Trunfio: You're showing why you guys have the training business call results driven. I think it's just clear that you can see this mentality. It reminds me a lot of Angela Duckworth's book, Grit and doing the small things over and over again to get to the big results. So it's awesome just not only to hear you, but I do follow you Tiff on social media. So I haven't seen the Ferrari's or anything like that, but just the real life, this is what we do, this is who we are, and the passion that you portray it's just compelling and it's attractive. That's why people come to you all for advice. So I'd love to take a little step back, zoom out. Josh, you talked about collegiate careers in sports, which is pretty cool, I didn't know that, but you both come from corporate background as well. So can you talk a little bit about high level that journey and then transitioning into being entrepreneurs?
Josh: Yeah, so I'll let Tiff talk a little bit about her journey. I'll talk a little bit about mine here. So I got my degree in civil engineering, and when you hear engineering and sales in the same sentence, you never hear that in the same sentence, let's be honest. But one thing that really helped with is identifying processes, identifying bottlenecks problems, and then coming up and ultimately groomed me as a problem solver. Again, as entrepreneurs, that's really what we are is we are problem solvers, whether it's to our clients or even internally with processes, what's broken, how do we fix it? So when I graduated from school, I went into construction management and when we first started our flipping business, I thought, " Oh, I'm in construction. I can manage the crews thinking that this was a rehab business or construction business." No, not at all. This is a sales and marketing business. Luckily Tiff is naturally a marketing genius. I just had to go figure out the sales side of things. And what I fell in love with was the psychology behind it. Being a science major in engineering, I loved science. So I fell in love with psychology and then really started diving into that. Learned a lot about sales psychology, and essentially some persuasion techniques and stuff like that. And it really moved the needle for us. Again, once we identified that any and all marketing channels are going to generate opportunity, it's on our ability to convert those. That's when I really geeked out and put processes behind that, that allowed us to get the onboarding that we have in place today that allowed us to build a high performing team that is very lean and very mean and has allowed us to magnify our results. What about you Tiff? Tiff comes from a little bit of a different corporate background, but it's a great one to say the least.
Tiffany: So I spent at least 10 or 12 years in corporate space. I moved all over the country. I was the head of North American oil training at one company and then I moved over to Owens Corning Global and oversaw all of our asphalt plants that sold asphalt intel of our competitor shingles, like GAF and CertainTeed and all that. And one thing that really hurt me the first two years actually when I came into here was I was in a couple masterminds and I just listened to whatever I'm told. So I was told to scale a team up. I hired all these salespeople, throw them a script. I had no onboarding, no management infrastructure, no HR policies, like everything you could imagine me failing on building the company out the first time I did. And a lot of people ask us, why did you start education in general? Because our real estate side is a decent sized company. Why do I even need the education side? And what happened was when I came back, I ended up crashing. I built it up for two years. I walked into my office one day and literally built something that I hated. I had all these salespeople, no one was following a process, it was people own me. I didn't own the business. Long story short, I don't want to get into it because I'll get emotional. But I ended up having to let go of three- fourths of my staff in one day and rebuild the company from the ground up. And at that time, when I say build it from the ground up, I said, screw everything that I was taught. I brought in a mentor who built five or six multi- million dollar phone sales companies and not in real estate. And they really took us back to our corporate infrastructure that we're used to, we're used to HR policies and onboardings and one- on- ones and PIPs and call audits and team outings and all this stuff that ultimately building culture, comradery, energy. And I think that that's really lacking on our industry. So when we started education, we said, man, we've got to turn all of these flyby night operations into a sustainable organization. Someone needs to bring corporate training to our industry. And that's really how it came about. And if I wouldn't have had my corporate background, I would never be where we're at today, I don't think. Because at the end of the day our industry for the most part is pretty young and you just don't know what you don't know. If you've never managed people or built sales teams or anything, how are you going to know without getting the right mentorship? And so I'm just a big believer that one, if you didn't come from a past corporate career where you were used to having all that infrastructure, the reality is you won't make it very long if you don't get figure out how to get that level of infrastructure into your organization.
Josh: Well, I think another thing that leads to this is everybody out there will teach you how to do the deal. They'll teach you how to be the transaction coordinator, the dispo- person, but nobody is teaching people how to go and find, recruit, hire, train and manage people to be just as good if not better than they are. And that's really going to hold people back when it comes to truly magnifying their results through building a team.
Nate Trunfio: I couldn't agree with you more and leads me to another question that I'm sure both of you have some good perspective on. So in that there's this difference between managing and leading, what is the difference from your opinion?
Josh: Yeah, this is a great question. It's a topic that I talk a lot about too. So managers are focused on the duplicable repeatable results like managing KPIs, optimizing conversions. Yeah, that's what we were talking about earlier in the stabilization phase. So if I know that it takes me 1 of 5 offers to land a deal, how can we make it 3? That's what managers are focused on, the KPI side of things. But then leaders are focused on growing people. They create environments that are conducive for growth through building culture. They are focused on pushing people past their limits that they thought that they would never even be able to break. So for example, we have a guy on our team who's been getting 14 deals a month. One of our acquisition reps, if you would ask him a year ago, " Could you ever see yourself getting 14 deals a month consistently?" In his mind he might have told you, " I don't know. I just never have and I haven't really seen that before." So it's almost the same concept of running the four- minute mile where nobody could break it, but then all of a sudden once the first person broke it, all of a sudden everyone had that belief internally that they could do it too. And then now all of a sudden everyone's doing it. Well, not everyone, but there's a lot of people doing it. And so anyways, my point here is we were able to take that individual, even though he may have thought he was capped out at 9 or 10 deals consistently a month, and we continuously push him into this, we've created a vacuum, a void essentially that allows him to grow into. And that's essentially what leaders do is we push people past their limits. We continue to focus on growing them and their skill sets so that we can groom them into other positions and groom them with their career or their personal goals, stuff like that over time.
Tiffany: I think the big thing, especially when we're talking about growing and scaling and all this is that in order to get here somewhere you've never been, you have to become the leader that it takes to get it. And I think that people forget that they can just wake up and have this dream outcome without becoming the person that it takes to even get that outcome. And John C. Maxwell talks about the law of the lid. And so out of the level 10 leader, let's just say you're a level 4 leader right now, your organization will never get past level 4 because you're its highest cat. So in order to get a level 8 or level 10 organization, you have to become a level 8 or level 10 leader. And ultimately our industry specific, well I should say more in the wholesaling space more than anything is it is what it is. It's a really young space and a lot of people have just never led people before. So to come into the space and think that you can grow an entire organization that's consistently performing without getting trained on your leadership capabilities is likely not going to happen. I don't know if you've been in any leadership trainings, but I didn't wake up either in corporate and just get one training and become a leader. I can go to a workshop, I can go to trainings, but it takes work. It takes constant training, constant practice. We're going to fail forward as a leader. We all make people mistakes. But I will tell you that owning a company is your number one expensive mistakes you're going to have are in HR. So if you don't handle people, performance, management, leadership, culture building and all that right, you'll either have high turnover, expensive mistakes, lose good people, drive the right people out. And so I think that ultimately our industry doesn't talk enough about how HR is probably one of the most critical pieces of running this operation.
Nate Trunfio: You hit it right there. Like I said earlier, not to be too repetitive, but we are in the people business and they say the cost of a bad hire is worth what, one to two times their salary. And then, but it goes way beyond that. And so it's interesting you talk about the 10 levels of leadership, I always just say I'm a continued student of leadership and I think we all are because Tiff, that's such a good point. You can't just read an article, read a book, watch a video, go through seminars and say that you're a profound leader. And a lot of times you get stuck in that management trap, Josh, as you said as well. So it's really cool to hear your perspective not only from what you advise on, but your experience learning through fire and failure. It's a given. It's something we have to experience. So what are some other falsities or falsehoods that somebody who's growing and wanting to get to the level that you two are at, what are some of the other false expectations that you typically see people having, I mean I'm sure you see a lot of it in your coaching business too.
Tiffany: Yeah, I think a lot of it's driven, again from head headlines in our industry, but a lot of people think that you can wake up and be a multimillion dollar organization within a year. And I get it, we went from literally joining real estate, maxing out a credit card years ago to doing 40 deals my first year to doing 165 deals my second and 300 plus by year three and on. And what did that take though? I don't think people think about the sacrifice that was made in that those years because for three years, although we were doing millions of dollars in revenue, everything that I was pretty much making was being invested back into the company. And I barely paid myself for years. Actually, I don't even know if I paid myself the first two years. I literally lived on my mother- in- law's couch.
Nate Trunfio: Not to mention the time and...
Tiffany: Just the 16-hour days, seven days a week that it took to even get to where we're at. And if people think that it's not going to take that they're crazy. The only way that it's not going to take that in my personal opinion is if you came into the business with a ton of cash saved where you know and understand that hiring from the top down versus the bottom up is way easier to do obviously. Bringing in your leadership first, but not everyone can do that and 99% of people can't do that in the beginning. So it's not realistic. And so I think ultimately it's about understanding that this is a process, it's a journey and you either love the process and the journey or you don't. And I just believe that ultimately I'm a big believer in stability. You'll never see me putting lines out there like quit your job, all this other stuff, I think it's all bull crap. I think that you can build wealth and work somewhere that you love. I think that they can be combined and I think ultimately we just need to focus on the process. So I guess in a short, my answer to that is focus on the process and the journey. And not that it's going to happen fast because it's not, and whoever's selling you on it is wrong and it's not going to happen.
Josh: I think one thing that you were getting to was that it's not for everyone and it's not meant to be for everyone. And if it's not for you, that's okay. There's plenty of positions like Tiff said, where you can go and build wealth with real estate while having a career, but it truly takes sacrifice. For three years, like Tiff said, we were working seven days a week and we didn't go to bachelor bachelorette parties. We skipped out on family events because we had to focus on the business because we were growing this thing. And I think a lot of people underestimate what that looks like. In fact, people come in, they're like, " Yeah, I'll work nine to five and become a millionaire." It's not the way it works, not the way it works at all.
Nate Trunfio: No, it's very true. Can you both elaborate a little bit more again, just because I'm so intrigued. You see a lot of people through your coaching business, so what are some of the other common mistakes that operators are running into or want to be operators?
Tiffany: I don't know if it's a mistake rather than a fear, like the fear of failing, the fear of the unknown. The fear of will this channel perform if I drop$20,000 a month on it, will this person leave me if I've never been a leader before, do I even know how to make someone a W2 versus a 1099 because I don't know the process. Am I willing to pay a base for a salesperson because I'm scared that they'll fail me, so I'm just going to throw them on commission only, which drives commission breath. There's a lot of what I call fears rather than mistakes. And in the beginning it's about teaching them the process so that they can let go of the fear. I think a lot of fears stem from just not knowing what you don't know. And once you get trained and understand the process of recruiting, the process of onboarding, the process of the paperwork that someone should sign on day one, the process of day 1, 2, 3, 4, and 5 on onboarding, what happens every hour? How do you manage it? How do you plug in these scorecards? How do you do all that? Then it's like, "Oh, okay, now it all comes together and makes holistic sense." But if you are just trying to figure this out on your own, a lot of times people are driven by the fear of the unknown and so they're just hustling and grinding to get the next deal versus investing into themselves and the infrastructure on building a sustainable organization. So I don't know if it's necessarily mistakes, any mistake is just typically being driven from a fear of getting trained the right way, a fear of investing into yourself essentially.
Nate Trunfio: I like it. Good there. And Josh, you, let's go a little deeper into, we've been talking about building teams, but it's so important first impressions and bringing people on for when onboarding. So talk to us about how you run onboarding and some of the infrastructure that you need in order to support that.
Josh: Yeah, no, great question. So one thing that's really important to recognize and one of the limiting beliefs, we call them limiting beliefs that we see a lot of people have in our industry is thinking that salespeople are naturally born or they're not. Meaning when you walk in the door, you were either born a salesperson or you were not born a salesperson. That we 100% disagree with. And it all stems from just not recognizing that sales is a skillset. Going back to that fitness comparison that I brought up earlier, if I walked into the gym and wanted to bench press 400 pounds on day one, it probably wouldn't happen. It's no different in sales. In fact, I'm an engineer, my degree is in civil engineering and I shouldn't have never been in sales. But because I geeked out on sales tactics, sales fundamentals, psychology, I was able to create a process that I can then go and teach to other people and equip them with the skill sets required in order to create high performing team members. So some of the things that we focus on in onboarding is first and foremost what we look for. Let's talk about before they even come in for onboarding, what does the ideal team player even look like? Going back to what I just said, you don't have to have any sales experience whatsoever. I can teach you everything you need to learn about sales in order to be a top performer, but you have to be an ideal team player. And we look for three things. First and foremost, are you a core value fit? Secondly, are you coachable because I can teach you everything, but if you're not able to go and actually implement what I'm teaching you, what's it even matter? And then third, you have to be growth oriented, meaning that you are striving to be the best version of yourself every single day. If you have those three characteristics, then you are our ideal team player. And then that's when we'll bring you on the team. And now we'll go through onboarding. In onboarding some of the things that we'll talk about will be like our ideal customer profile. What are the types of people, what are the types of situations that we as cash buyers buying off market at a steep discount, what can we actually help with? What value do we bring to the table? And let's identify what those situations are. Now, once we know those situations, we've built that into a qualification process. So then we teach the qualification process in identifying, is this person worth our time or are they not? There was someone, I forget who it was told me, we're not in the business of turning water into gold. And if you think of the gold rush of 1849 when everyone rushed out west, even to this day, nobody's found out how to take water from those rivers and turn it into gold. Instead, what they did is they would take shovels, they'd take sifters and they would take some sand, put it in the sifter, and they would look for the gold nuggets. Well, that's what we have to do as salespeople as well. We can't go and take an unqualified opportunity and force it into a sale. That's just not how it works. But we have to have a qualification process that allows us to sift through all the non opportunities to find the gold nuggets and spend our time with those gold nuggets. Now, once we understand our qualification process, now let's go and teach the sales psychology. What is our prospect thinking on the other end of the phone in our conversation? Why is it that they give us these objections? How can we objection block versus objection handling. All of these things are built into our psychology. Now, once we understand psychology, when we go and teach the scripts, now I can teach the why behind everything that we're saying. And that's how you're going to get your team to buy into the specific behaviors that it's going to take to be successful. Because if I were to just hand you a script and say, " Hey, Nate, go read this because I said so." Well, chances are you're not going to buy into that process just because I said so, right? But if I'm able to teach you, " Hey, here's all of the psychology behind it, and this is how it ties into our qualification process, and that's how it ties into our deal customer profile." Now all of a sudden the light bulb goes off and you're like, " Okay, I get it. Now I know why we're doing this and I actually want to go do it." So that's really the fundamentals of the sales component. Now, one thing that we do that I don't know if anyone else does, is we actually teach on components of a house. And there's this bad stigma in the industry where these wholesalers send out a deal, it's falling over or burnt to a crisp, and they say, it only needs$10, 000 in repairs. This house is going to sell quick. And unfortunately, too many people are unrealistic with their repair estimates in the front and underwriting process and this leads to a number of things. This leads to wholesalers pricing properties that prices way too high. It leads to deals dying. And ultimately this leads to a lot of frustration in the acquisitions team, a lot of frustration to the business owner, a lot of frustration to the dispo- department, and it's a recipe for disaster. So what we've done with our rehabbing background is we've been able to create a training for everyone that comes into our organization to teach them all the major components of a house, what a roof is, what the life cycles of a roof is, what a furnace is or an air conditioning unit, the life cycles of those, and at what points are we going to account for replacement? And then on top of that, how do we go put together an accurate line item repair estimate based on the information that we got on the phone? And that's allowed us to really maintain a 70% success rate or higher while we do wholesales and fix and flips. It's a pretty high success rate across the country with the people that we've worked with and the things that we see in our coaching business. And it all boils down to knowing and understanding those components of a house. So when you couple all of that together, you're truly equipping them to be an expert in their field, sharp as a tech and enthusiastic as hell.
Nate Trunfio: No, it's great feedback. And it's a lot. It's a lot. What you just went through is a lot, and I'm sure it's evolved over time. You bring both of you some of your corporate backgrounds and a lot of this is iterative. We're very lucky in our sales team to have two dedicated trainers to help get people spun up. I think that's also just one of the reasons why people get so attracted to just real estate, there's so much to learn, so therefore there's so much to teach, which means there's a lot that you could learn in the wrong way, format and fashion. And it's just interesting how you make sure, just like building the house, you're starting from the foundation up and getting people to see the why and what the end product looks like. So really cool and really unique there. I think the last topic I want to touch on with you, you talked both about sacrifices and getting to where you're at, being married, but not working with my spouse. I want to just ask this question. So what are some of the difficulties and sacrifices that you deal with running a great business, but assuming also running a great household as well?
Tiffany: Yeah, I mean that's evolved over time of what our sacrifice is. And so what was our sacrifice five years ago is very different than today. So today I have a child. I didn't have a child when I started the company, and so it's changed obviously my perspective on life and my time and all that. If I didn't have a child, I'd probably still be grinding it out 20 hours a day because that's who I am. But I've made a point that after five o'clock to eight o'clock, that is my time with Saylor. And we've just made an agreement between us because it is what it is. If people think that this is like we're working four hours a day, you're wrong. So Josh, we have an agreement that he will when needed work extra hours because I'm going to be home and present with Saylor in the evenings, and we just have our time blocks with our child, which obviously there's so many hours in a week where we have to time block our company, our own selves, our child. And so, one thing that we've done this year that's really helped us is we hired a life coach/ therapist, whatever you want to call her, and she's been a life- changing experience for me. So what we do is I work with her separately. Josh will work with her separately sometimes, and then we'll have some things together. And it's just about being proactive versus being reactive because the business, I mean, this isn't our only company. We have more companies and some launching, and so it's easy to get caught up in going to dinner and talking about business versus each other, but the reality is, it's our passion. So people are like, " Is that all you talk about?" We're like, " Yeah, because we love it. Why wouldn't we talk about it? We love what we do." But I will say one thing that she's really helped us with is she gives me these exercises to ask certain questions on dates and do things to spur us separating work from our personal life, and it gets us laughing, crying, telling stories, all that kind of stuff. So we're definitely not perfect. I don't really believe in a work- life balance. And honestly, we've learned how to collide them. And for example, at every event that I go speak at, say if someone asks me to speak at an event, you either have to fly Saylor with me or I'm not speaking at your event. So it's just things like that I've learned over time what means something and what doesn't. And I've learned how to say no to a lot of things. And at the end of the day, nothing is more fulfilling to me than working with Josh. I come to work every day and get to work with the person I love the most in my life. Now, do we butt heads? Yes, we do. And we have a whole process to that too. So we have what we call the level 10.
Nate Trunfio: There you go.
Tiffany: And which we haven't had one in a while, we should probably have one. But we have-
Josh: Don't say a while, you're talking like it's two weeks. It's not a while, but...
Tiffany: So essentially what we do is we'll have a level 10 with just me and him. It's where we give each other permission to hold each other accountable to goals, metrics, numbers, which a lot of couples, I think would straight argue, which don't get me wrong, we definitely get very heated in those conversations, but it's a handshake agreement that when we walk out of the door, it's left at the door. And I think that that kind of stuff between being proactive about how to stay on top of our marriage, making time for our child and having these effective level tens and all that, we use these tools and resources to manage our ability to have conflict and it be healthy conflict.
Josh: Yeah, I think where a lot of people get hung up as far as working and being an entrepreneur with a significant other who's also a partner in the business is if they try to pull that person in. So let's just say I started the business and then Tiff's doing her own thing. She's got her corporate career, and then I say, " Hey, Tiff, you need to join the team. You need to join the team." And I pull her in as a partner. A lot of times what I see is people convince there's significant other to join the team because it's in the best interest of the family or the household or even the business. But unfortunately, most of the times, Tiff in that scenario may not be as passionate about it as I am. And if she's not as passionate about it as I am, then we're just setting ourselves up for failure. Now the key component with both of us is we both are extremely passionate about what we do and we love what we do, and we wouldn't trade it for the world so it works really well. But another component to this as well is... Shoot, I lost my train of thought, but hold on.
Tiffany: I think the big thing is just trying not to change the person you're with, right?
Tiffany: Like Josh, I am kind of crazy, not going to lie. I am a genius when it comes to marketing. My brain's all over the place. I'm like a hundred miles an hour. Anyone that comes to any of my trainings, I talk a hundred miles an hour. And over the however many years I've owned a company, I have crazy big ideas all the time. I am your true definition of an extreme visionary. And Josh has never tried to change me. He's never tried to slow me down, hold me back, turn down my ideas. He never shuts me down. And if anything, he's very encouraging of things that he knows that I'm likely going to fail at. And because of that, I always know that he's going to have my back no matter if I fail at some crazy idea or not. And I think that that's what's important. I think that no matter if you're business partners or not, just don't change the person, let them be who they are.
Josh: So I remember what I was going to say now, and it's very important. I don't know how I lost it, but anyways, one thing that's really helped us too is knowing and understanding where our significant others coming from. In those level 10s. If Tiff's getting on me because I didn't live up to a commitment that I made, I have to first recognize and understand that she's doing this because she wants what's best from me. She wants what's best for the organization. And it's not like she's putting me down and saying, " I can't do this or anything like that." She's trying to build me up and make me stronger. And same goes for me to her. If I get on her because she didn't live up to a commitment that she made because I want what's best for her. It's because I want what's best for the organization. So we are collectively working together to make each other bigger, faster, and stronger. And when we know and understand that going into any and all conversations, whether it's an argument or not, knowing that we want what's best for each other and what's best for the entire team is what truly allows us to have those open and honest conversations that may not be as easy.
Nate Trunfio: Wow. It's impressive to hear how you talk about managing not only the work side, but the personal side. Big believer in level 10s hadn't heard of it, bringing it home to the household. But that's an interesting one to add on my list. And I think Tiff, the work life balance topic is a tough one. I'm a big believer in sort of everybody creates their own definitions of what's work versus life, because I can very much relate to me, they melt together. A lot of my life is work, a lot of my work is life, and I'm fine with that, but we each own that. And then I think Josh just sort of respecting who each other are and allowing for one another to be themselves and also all that driven with this mutual respect and desire for success and personal and work realms. I think it's pretty cool to hear some of the reasons how you're running a great successful household and certainly the business or businesses. And that's where I want to actually very much end, before we say bye- bye, you referenced multiple businesses, so let's make sure we get those out in the wild here and in any way that our listeners can reach you.
Tiffany: Yeah, so we have obviously our real estate side. We have a rental portfolio, be wholesale and flip houses. We have an education company where we work with experienced investors to build out their teams. We don't work with newbies today. And then we have a couple other companies where we're more silent funding partners in. And then we are in the midst of starting another pretty big company, what we think will be probably one of our biggest ones yet, I can't say anything yet. We're under confidentiality, but it'll definitely compliment the real estate industry. But it'll be for all industries. And I'm pretty excited about it. I think it's everyone needs, it's not just real estate focused, but ultimately man, I wish I could tell you it sounds sexy that we own companies and that we're launching, but that's really not what matters the most. At the end of the day, everyone listening to this podcast, I'm sure you're listening to it on how to gain more knowledge around real estate, build more freedom, build more wealth. And for me, the definition of building wealth and financial freedom is very different today than what it was five years ago. And what freedom means to me doesn't necessarily mean financial anymore. Freedom to me is really just being present with my child. And I think I've realized as I've grown as an entrepreneur that sometimes they don't always go hand in hand. It's not always more money equals more time. Now, we can definitely get there. We can build C- suite executives and all this, but I just encourage everyone to really focus on what really is the vision. Because a lot of times we get students that come in and they're like, I go, " What's your goal?" " I want to make a hundred grand a month." " Well, why?" " What's a hundred grand a month going to do for you?" And we always do this exercise where we have everyone write down and they never can get to 300, but this is what my mentor did for me. And he said, write down 300 things you dream about your daily lifestyle. For example, one of mine was I was very poor growing up, so we didn't have Christmas trees. So I said, I have always wanted to have every room have its own themed Christmas tree someday. And that was expensive. So I did that three years ago and I have a stager come in and do my whole house. And it's things like that that we lose sight of, what is the money for? What's the point of the money if we're not using it to be present with our families and give and build wealth long term? And so that's really changed my focus over time is being focused on the right things and not just more money, but things that truly bring me my time back. And so our mission of our education company, especially after going through that crash and almost losing my life, was I want to give people the tools and resources and infrastructure that it takes to actually get your time back. Because if you think that you're going to continue to hire people, wear more hats, do all the marketing, do the books, do this, do that, do this, you'll never actually get your time back. And so the only way we gain it back is by building other people, by building leaders in your organization, by building people that can go build the processes for you, things like that. And so, I don't know, I've changed my philosophy on where we're at in our life. And so I don't want to be on here being like, " Oh, I have all these companies." Because that's really not what's sexy to me. What's sexy is the fact I just took the last five days and didn't do a thing, and we had the biggest month in our company history. That part is really what investing into your team infrastructure will do for you long term.
Nate Trunfio: That's awesome. Well, you covered on from where we started, just how to scale and grow, but not only professionally, but personally and appreciate you sharing and both of you being vulnerable throughout this. And look, we excited to hear about the new business. I'm sure it's going to crush just as much as your existing ones have, and we just appreciate all the value you've given here and continue to give to real estate investors across the country. So thank you, Josh. Thank you, Tiffany. That's a wrap for the real estate of things.
Josh: Yeah, thanks for having us.
Tiffany: Thanks for having us.
In this episode of the Real Estate of Things podcast, Tiffany and Josh High, CEOs of Results Driven REI, share their expertise on building a successful real estate investment business by delving into the key factors that contribute to their success in the industry.
They emphasize the significance of building great teams and offer practical strategies for stabilizing the infrastructure before scaling. They will discuss how, by shifting the focus from cost to return on investment, they maximize profitability.
Understanding the timeline for expecting a return on investment is another crucial aspect on which they share their insights.. Leveraging their corporate training background, they explore how to best bring effective training programs to the real estate investment industry.
As a power couple working together, Tiffany and Josh provide valuable advice on working with your spouse. They share tips for maintaining a healthy balance between business and personal discussions, drawing from their own experiences.
Join as we discuss:
- Stabilizing your infrastructure before scaling
- Better understanding your timeline and expectations of return on investment
- Why the real estate industry needs more HR and corporate training modules
- Managing and leading; how they differ
- Understanding the challenges of working with loved ones