Hey Moguls,
Are you building up your team for your business? Or are you still trying to wear all the hats to make things happen? If it’s the latter, then you’ve created a J.O.B. for yourself – I don’t think that’s why you got into the real estate investing business. Right?
Let me tell you right here that REI is a team sport, investor friends…
This is Patrick Riddle coming to you in this lesson to talk about the importance of hiring the right team members for your REI biz. I’m a huge proponent of building a team because this is a team sport.
You may be thinking that you lack the skills to be a boss who does all the hiring, firing and training… and if that’s the case, let me shed some light on this subject.
Let’s say you have a small rental portfolio, and at this time you’re still doing everything. You’re keeping the books, you’re looking for the deals, making phone calls, talking to sellers, handling the details of the closings and all the details of property management.
Looking over this list, one of the first hires you might want to consider would be a property manager. That person would take all the back-end tasks and responsibilities once you acquire a property. Or perhaps you might consider hiring a bookkeeper. If taking care of the books is something you hate, and something you procrastinate doing, that would be an easy hire to bring on board.
My First Hire
In my case, my first hire for my business was an administrative assistant. I needed someone who could take a lot of details off my plate so I could spend more of my time on profit-producing actions.
If you’re thinking about taking this step, you will first need to clarify this position. Line out exactly what you want this person to do for you.
Seeking Referrals
Next, I suggest you seek out referrals. Typically, referrals turn out to be the best sources for finding team members. Once I’ve made my decision that I’m going to hire, I begin to mention this in my daily conversations. As I’m chatting with people, I bring it up: “Oh yeah, and by the way I’m looking to hire someone for my investment business…”
Just by tossing out that tidbit of information over a few weeks’ time, I end up getting a few referrals. When I was looking for my assistant, by taking this track, I ended up with three referrals - they were from friends and associates.
One of the referrals was Penelope (Penny). This came from a friend of mine, and Penny, at one time, had been his employee in a similar real estate business. This meant she was already familiar with the business.
Craigslist
If I’m unable to find someone through a referral, I turn to Craigslist. No really, it’s true.
In order to refine your search, ask those who respond to your ad to follow a few specific steps. You might start by having them send their resume to a specific email address, with a specific subject heading and have them include answers to three questions in their response. Not hard-hitting questions, but random, fun things like this: What’s your birthstone? What’s one really interesting thing about you? What’s something on your bucket list?
What you’ll find is that most people will not follow simple steps that you’ve laid out. Therefore, they immediately disqualify themselves. You may find that only 20%-30% will actually follow directions. Once your list has been whittled down, request that they fill out a long questionnaire about their work experience, education, REI experience, if any, etc. Do this before you talk to anyone on the phone. This process will save you hours of time.
Phone Interview
Once I have interested (and qualified) prospects, I then set up a “get-to-know-you” call. On the phone, I can get a good idea of whether or not they may be a good fit. I make it an informal chat where I ask about their interests, their goals, their family – not just about business.
Also on this call, I describe our business model and the requirements for the position that I’m looking to fill.
In-Person Interview
Next is a face-to-face meeting.
In this meeting, I drill down to the nuts and bolts of the work in greater detail. If they pass this interview, then I make an offer.
Trial Period
I always start out with a trial period which might be 60 to 90 days. For Penny, I set up a 60-day trial, and I made it clear that this was for the benefit of both of us. It would give us both time to figure out if this was a good fit. Having this trial time tends to make everything more comfortable for all concerned.
At the end of that time, you can discuss together whether the relationship should or should not continue.
How to Set Up Compensation
Now you have a new employee – how will you pay him or her? Compensation could be by the hour or it could be a flat fee. If the position deals with properties, it might be on commission. It could be that you will split a percentage of profits. A lot will depend on what that team member will be doing.
During the interview, you can find out what their pay expectations are. What have they been making and what do they want to make? It will have to work for both of you.
Let’s use Penny again as a good example here…
When I hired Penny, I explained that the position was designed to expand over time, and eventually the role would cover 3 different areas:
1. Lead Harvesting and List Segmenting
2. Handle All Steps from Contact to Appointment
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Answering all incoming calls from sellers
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Qualifying sellers
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Preliminary due diligence
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Setting appointments
3. Organize All Steps from Contract to Close
During the trial period, I focused on getting Penny trained in one area, which was #2 on that list. The pay during this time was set up on a base amount ($250/week), plus a percentage commission on the properties that closed.
No Need to Wear All the Hats
If you sincerely want your business to grow, I strongly suggest that you stop wearing all the hats. The more jobs you outsource, the more time you’ll have to spend on profit-producing tasks.
Don’t worry if this takes you out of your comfort zone. After a few months, you’ll look back and wonder why you waited so long.
Just do it!
Holla at Me
Got any questions or comments about hiring team members? Talk to me in the comments section below.
1. Make a list of tasks that you do that are not your forte and that you do not enjoy.
2. Narrow the list to one task that’s easiest and most beneficial to outsource to an outside entity.
3. Talk to business contacts and ask for referrals.
4. Create hoops for the candidates to go through – test their motivation and attention to detail.
5. Filter candidates through phone interviews – then set up in-person interviews.
6. Set up a trial period – give both parties a back door in case things don’t work out.