My 5 Takeaways from BEC2021 Day 1
Four Steps to Build a Team That Lasts
Liz Faircloth, The Real Estate InvestHER
Step 1: Map out where you want to go: Determine your short-term (1 year) and long-term (3 and 5 year) goals. Define an overall vision.
Step 2: Take a personal inventory: Spend half a day figuring out everything you bring to the table from a credit (asset and liabilities), time, experience, skills, personality, and leadership perspective.
Step 3. Determine WHO you need to meet your goals and vision: Based on your business model, figure out the major roles you need to fill. Based on what you bring to the table, determine which roles you will fill and which roles you need a team member to fill
Step 4. Find people to gain alignment and diversity: The biggest mistake when building a team is lack of alignment (values, goals, expectations, entrepreneurial spirit) and lack of diversity (personality, risk, tolerance, skill set, experience). Leverage personality assessments to identify hires who complement your skills and gaps, and who are in complete alignment with your value.
Seven Lessons Learned With $2.8 Billion of Real Estate During COVID
Jillian Helman, RealtyMogul
Lesson #1. Play defense before an economic crisis, not during a crisis: Three things to do during economic expansion to prepare for economic recessions: underwrite well and don’t do deals that don’t met your underwriting criteria; have a strong property management team in place; have open conversations with your lenders to ensure they will pick up your call during a recession.
Lesson #2. The proforma is always wrong: When creating your proforma for a new opportunity, have a minimum contingency budget of at least 10%, scale back the number of units you expect to renovate and lease, assume an exit cap rate that is 1% greater than cap rate at purchase, and increase vacancy and bad debt to stress test.
Lesson #3. Take a breath and be deliberate: Jillian’s top priorities are the health and safety of residents and team, keeping occupancy up, and shoring up cash reserves. This involved taking a deep breathe and deliberating to determine how to best focus on these priorities. She decided to halt renovations, rent increases, and all nonessential repairs.
Lesson #4. Don’t be afraid to innovate: For example, Jillian began using virtual, self-guided tours.
Lesson #5. Do experiments and test the market: In the example above where Jillian experimented with virtual tours, the conversion rate was higher than in-person tours with a leasing agent. Since the experiment works, she doubled down.
Lesson #6. Be a stellar communicator: Provide detailed monthly updates to investors, communicate what you are proactively doing, and be available and receptive to investors.
Lesson #7. Take a position: During COVID, this started by overcoming fear. Then, Jillian took an offensive position, assumed the world wasn’t ending, that the world would recover, and that data supported that investing still made sense.
How to Bulletproof Your Mind for Extraordinary Real Estate Success in 2021
Trevor McGregor, Trevor McGregor International
Your mind is like a fertile garden. Whatever you plant, the soil will return, and your thoughts are the seeds. Plant positive powerful thoughts. To avoid too many weeks growing, you must stand guard at the door of your mind.
The two things that happen during the prime years of your life: The prime years of your life are between 25 to 65 years old. This is when you have the most opportunity as well as when the most regrets are formed.
TFEMAR: a thought turns into a feeling; feeling into an emotion; emotion into motivation; motivation to take an action; the action has a result. Therefore, your thoughts equals your results.
The 4S Success Formula: To be successful, you need to be in the right state, have the right story, the right strategy, and the right stands. Your state is your physiology, focus, and language. Your story is your identity – you are either a victim or a victor. Your strategy should be based on a character trait integration – what would so-and-so successful person do?
Why We Are Currently in an Upcycle
John Burns, Burns Real Estate Consulting
- Consumers made $1.03T more than usual last year due to government stimulus
- Consumers spend $535B less than usually last year, despite spending more on goods
- Consumers saved an additional $1.6T in 2020 compared to 2020
- Most homeowners and potential new home buyers are far better off financially today than a year ago
- Google search has risen 56% for new homes, 9% for new homes
- Millions of workers no longer need to commute
- Home listings are down over 40% YoY
- New supply has fallen – 10% fewer communities to sell from YoY
- Unsold new homes dropped 69% YoY
High demand + low supply = 2021 housing boom
Three Things it Takes to Make the Inc 5000
Defining your culture: Start with your why. why do you do what you do? Why do you go to work in the morning? Then, transcribe your why into a one or two sentence mission statement to inspire you and your team to show up.
Next is to know where you are going and what the end state looks like. This is your vision – what does success look like to you.
Third is to define your values. These are the behaviors you want to see in your organization.
Last is to avoid the say-do gap. Be care that you don’t say one thing and do another, because then your culture isn’t believable.
Developing your plan: Understand what you are going before you do it, but set a time limit. A good rule of thumb is to understand and education yourself for 90 days, develop a plan for 90 days, then go out and take action.
A good strategic plan includes three goals, three to five objectives, and multiple key results over a three year period.
Assemble your team: First, understand your strengths and weaknesses. This is best accomplished by asking your friends, and especially your spouse. Then, find people who fulfill your weaknesses.
When hiring people, focus on their character more than their competencies. You can teach competencies but you cannot teach character. Then, focus on experience but understand their track record to ensure they were successful because of skill and not luck.
Disclaimer: The views and opinions expressed in this blog post are provided for informational purposes only, and should not be construed as an offer to buy or sell any securities or to make or consider any investment or course of action.