How to scale a wholesaling business or rental portfolio
The single biggest component of my success lies in the make-up of my organizations. You can’t have a business that gives you freedom of time, location, and finances without hiring (and keeping) A-players.
A-players are people that are uniquely talented in a particular skill set and believe in your vision enough to get behind it.
I Suck at hiring:
I used to make the mistake of hiring someone if they simply had a decent resume and wanted the job.
The results of my dislike for hiring were brutal. You can check out one fun example here.
If you don’t feel like watching the above video… Short story: I made my worst hire ever who brought more drama into my life and cost me more $$$ than I could have imagined in 60 days. Lesson: Don’t hire just because they have a heartbeat and NEVER hire out of desperation.
Noah is my number two, best friend, and partner in crime. He is my integrator and CEO in my rental portfolio as well as a co-owner of my wholesaling business. I’m a big fan of hiring for character/likeability and training for the job. Noah hadn’t done sales before he worked for me. He worked for a non-profit that helped enhance the quality of life of adults with disabilities. He managed a team of 30+ people and made about that a year. The nature of a non-profit is that they promote with titles, not cash.
Noah and I met at a church we both volunteered at and hit it off pretty quick. It was a few months later that I had an opening and asked him if he was interested.
I want to point out that this hire was a leap of faith for both of us. Every single hire that has gotten me to the next level has been a massive financial stretch. Coming to work from me normally starts with me asking “What’s the bare amount of monthly income you need to pay your bills?” . For some reason, people tell me and agree to start at that number. It’s got to just be my dashing good lucks. 🙄
Comically I hired Justin to run Call Porter with the same sexy pitch.
Noah’s job entails managing our Gc’s on open construction, setting up/signing for closings, managing the people under him, and ensuring the profitability of my rental portfolio and our wholesaling business. He effectively manages the day to day enabling me to live with my wife 2,000 miles away.
*Note: I have a “Noah” type in every company I own. This removes me from the day to day and frees me up to focus on the big picture. The best way to describe this role is an integrator. If you haven’t I would suggest reading the book Rocket Fuel.
**Note: Sorry I can’t clone him. Yes, there is a bit of bromance here. No, he’s not for sale. Yes… I’ve been asked.
Teia works for me and oversees things like rent collection, accounting, posting notices, evictions, and bill pay. She is the ROCK of our rental portfolio. Noah makes sure the properties are ready to rent and she takes it from there. Not only is she one of the funniest people I’ve ever met she is also an animal at her job. Prior to working for us she managed a large section 8 complex and before that worked at a RentACenter. If you want a property manager who won’t take any crap get someone who’s repossessed bunk beds.
She is an incredible fit for our company culture and core values. She fit in like a piece of the puzzle from day one. She is an A+ player and
I’ll do everything I can do keep her with us forever.
She came from a Ziprecruiter job ad if I recall correctly.
Hilarious memory I have of Teia:
We have an employee in our wholesale business who is (in case he reads this) slightly below average height. When we hired Teia he was trying to “feel out” the situation and walked in strutting a bit. Teia called him out and said he was “just a little snack”. They’ve been like brother and sister ever since.
Alex is the newest addition to our team and was hired when Teia couldn’t keep up with her admin tasks and leasing. This is pretty common for us. Someone starts out in multiple rows and grows into their “home” within our organization. Noah, for instance, started out as an acquisitions manager. Now he owns part of the thing!
I can’t blame Teia at all for not being able to manage 143+ residents, bill pay, admin, and leasing. There are a LOT of moving parts to a buy and hold portfolio.
Alex hopping in and stepped up to take over filling our vacant units. She has fit right in and is doing a great job. She’s only been with us for a few months now. She also assists Teia with posting eviction notices and some odds/ends.
We do our own maintenance in house and have a full-time service tech who is also HVAC certified. I’ll chat more about it in an upcoming blog but I believe that you make your money when you buy and keep your money through quality property management. He is a HUGE piece of that puzzle.
Hiring maintenance staff is pretty tough. It’s difficult to find someone reasonably priced, who is self-sufficient, and who can do all of the tasks required of them.
As I previously mentioned we utilize GC’s so we do not have a TON of staff on payroll and they handle the bulk of our construction and turns. We will occasionally, do turns inhouse.
The Wholesaling Business:
Noah is the head here managing the staff on the day to day. I hold him and the staff accountable. I do things like Podio audits, decide new marketing directions, test new marketing, run our scorecard, and work with various vendors.
Call Porter’s 20+ employees make up the frontend of our entire business. They take all of our inbound traffic and convert it into appointments, follow-ups, and take me off the lists. I know this is my company and you’ll take what I say with a grain of salt, but I physically couldn’t do what I do without them. They free up our staff to work on what matters (closing deals). I wrote a blog post for them awhile back and argued that “A closers highest and best use is not in talking to unqualified prospects.”. If you want you acquisitions staff to burn out make them talk to tire kickers and telephone tough guys all day. 😉 You can read that article here.
They also do some cold calling for me as an additional source of leads and revenue.
Boston is a licensed real estate broker and oversees our acquisitions of new properties. To be frank, he’s damn good at it too. He is an ANIMAL at getting ARV correctly and making sure that we don’t under or overpay for a project. On several deals, he has made us a lot of money by telling us to push the ARV. Retail agents have a pizazz for knowing that X = and extra $10,000 that us investors tend to miss out on.
One unique thing with Boston is that he’s also an investor himself. He owns a few rentals and does a deal or two a quarter. A lot of investors wouldn’t hire someone like this as they’d assume that they were training their competition. He is a BEAST and I hope he’s with us forever.
Milton is our inside sales agent and oversees dispositions. His role as an ISA is taking every lead Call Porter sends over and getting it to an appointment. Milton is a great example of the right person in the wrong seat. We started him out as an AM and that didn’t work so we moved him over to this new role. He is a great culture fit. Dispositions is the role of selling our wholesale inventory to our buyers. For now, he is able to do both ISA and Dispo. As we continue to grow he will fall solely into one of those roles.
As we continue to grow our wholesale business we will need to hire a transaction coordinator. This person’s job will be to set up closings, line up our private lenders, schedule closings, get insurance, set up utilities, and attend closings. I imagine we will be hiring for this role by end of Q4 2019.
We will need a second acquisitions manager sooner than later. This is also pretty difficult to hire. I will do another blog post at a later date on hiring AM’s as it’s an art form in and of itself.
A breakdown in any of these roles costs us hundreds of thousands of dollars which is why hiring A-players, firing fast, and running a scorecard to audit performance is critical. You have got to know closing percentages, the average cost per deal, profit per deal, etc or your business WILL get away from you.
We run a pretty lean team. I have friends with 6-figure monthly machines they have to feed. I always plan on running lean/mean.
TLDR (Too long didn’t read)
Rental Portfolio: CEO/Integrator – Property manager/admin – Leasing Agent – Maintenance Staff – General Contractors
Wholesaling Business: Ceo/Integrator – Call Porter – AM – ISA/Dispo
I still have to manage and oversee both businesses but they are almost 4-hour workweek for me.
This set up enabled me to wholesale a few hundred deals and manage/run a 9MM rental portfolio.