JF1688: A Great Team Culture Can Take Your REI Business To New Levels with Danny Coleman

Today’s show features a guest whose main focus with his career is helping teams and businesses grow. Danny shares his best advice on the topic with us today, you may be surprised to learn that team culture is often the biggest area of concern for Danny as he starts working with teams. How do you build an excellent team? Tune in to find out. If you enjoyed today’s episode remember to subscribe in iTunes and leave us a review!

 

Best Ever Tweet:

“As a leader, you have to make the people feel like they are your priority” – Danny Coleman

 

Danny Coleman Real Estate Background:

 


How great would It be to buy a piece of institutional-quality, income-producing commercial buildings? Now you can… with BuildingBits. It’s NOT A REIT or a fund. BuildingBITS is a new platform for non-accredited investors, where virtually anyone, regardless of income, can select a building leased to a major corporation and earn money from it!

Start investing with as little as $500 at https://www.buybits.us/


TRANSCRIPTION

Joe Fairless: Best Ever listeners, how are you doing? Welcome to the best real estate investing advice ever show. I’m Joe Fairless, and this is the world’s longest-running daily real estate investing podcast. We only talk about the best advice ever, we don’t get into any of that fluffy stuff. With us today, Danny Coleman. How are you doing, Danny?

Danny Coleman: Hey, what’s up, man? I’m doing good.

Joe Fairless: I’m glad to hear it. A little bit about Danny – he’s been working for small teams and businesses since he was 14 years old. He’s got a passion for small businesses and helps business owners grow their businesses. In fact, he was a COO of a real estate development company for four years, and his focus is on management so we’re gonna talk about the lessons he learned from this experiences, and how it can be applied to real estate investors and what we’re doing. Based in Columbia, TN. With that being said, Danny, do you wanna give the Best Ever listeners a little bit more about your background and your current focus?

Danny Coleman: Sure, yeah. Thanks so much. I was home-schooled, and anyone out there who was ever home-schooled knows that we get to work early in life… So I’ve been working my whole life; it’s always been for small business. I had a few corporate stints; honestly, it just wasn’t for me. I think that when you’ve got the entrepreneurial bug in you, you’re not gonna last in a corporate environment… So ultimately, one thing led to another and I ended up falling into real estate kind of haphazardly, just because of the position I took with a real estate team. Then a couple years later, fast-forward, I’m working for a real estate development company.

I started off as office manager/project manager, then went into business development for the team, and the ultimately COO. That was the last time that I was a W-2 employee. When that business split up – there were two CEOs, and they both had a different vision for the business, so they went their separate ways, and I was like, maybe I can take whatever in being COO for a small team and try to bring that to other teams in real estate businesses… Because if it can work in one place, it can work in any place really, so long as you can teach the fundamentals.

Joe Fairless: And before we talk about what you learned, what did you all do at that real estate development company?

Danny Coleman: We started out wholesaling. We were wholesalers, we were doing pretty high volume, at least for us, within Nashville, TN. Nashville has been pretty hot… So we wholesaled for a while, and then we kind of dipped our toes into the flipping side of things as well. We’d basically get it under contract, and then we’d just determine what’s the best way to monetize this contract. Of course, it used to always be the answer “We just wholesale”, and then we started realizing all the money that we were leaving on the bone, essentially, so we started doing some flips as well. Then the owners also kind of used it as their machine to also build up their rental portfolio… And they gave us the opportunity to do the same, which I’ll probably touch on later.

Joe Fairless: So based on that experience, what did you learn that you’re now applying to small businesses, as well as real estate entrepreneurs who have their own businesses?

Danny Coleman: The biggest thing is helping managers; if you’re a small business owner, you’re managing somebody… Helping managers realize that the fundamentals in management, especially when you’re dealing with small teams and you have limited resources – you’ve got your people aspect and your process aspect. Getting those things right. Focusing on the people aspect really comes down to — the word is thrown around a lot, culture. If you can figure out how to have a good culture on your team, create and cultivate a good culture and realize that that’s an ongoing, never-ending process, you can create a team that becomes leaders, that give you 110%, and can honestly run your business for you, so that way you can do really what you want with your time.

Joe Fairless: How do you cultivate a good culture?

Danny Coleman: Everything for me starts with the hiring process. Whenever I go in to work with a business, I start with their hiring process, because everything stems from the people that you bring in to help you fulfill your vision, to create the thing that you wanna create. So there’s three phases to that. There’s recruiting, then there’s onboarding, then there’s retaining.

Culture really becomes the biggest player in the retaining phase, but honestly it permeates the whole way through them. I don’t know if that answers your question or not. I’ll get into it if you like, but basically culture in a sense is just the soul of your business, and that’s why people have such a difficult time with it. I don’t know if you’re spiritual or not, but the non-physical part of yourself – the soul, if you will – or your business, it’s the same thing; it’s this intangible aspect where all of the things you have, all the processes and systems you have going on around you create the culture. It’s gotta be intentional, but you also have to realize that you can’t control it like you can [unintelligible [00:05:52].08] process.

Joe Fairless: So there’s certainly a priority on having a phenomenal culture. Can you get into some specifics of how to create it? Because you mentioned it starts with the hiring process, so you’ve gotta recruit, you’ve gotta onboard people, you’ve gotta retain them… But can you get into some more specifics there?

Danny Coleman: Yeah. The first thing is what kind of people are you bringing into your team? A lot of small businesses, the owners have a propensity to put warm bodies in seats. “Hey, your sister needs a job?” “My brother needs a job” just whoever. You go online, if you’re working with virtual assistants — we work with lots of virtual assistants, I’ve worked with them over the years… And you tend to think “Okay, I just need a monkey in here doing this. Anyone can do this.” You can’t have that way of thinking. You have to realize you’ve gotta bring in quality people. Because if you want quality people, it’s gonna take intention. And quality people only stick around in the business if you continue to bring in quality people. If you have this mix of “Oh, well this is one of those positions where we need a quality person, but this is somebody where anyone can do that.” You have to throw out that way of thinking. So first of all, the people who you’re bringing into your business.

Secondly, structure. Rock stars love structure. They want honest feedback, they want opportunities in your business to grow, both personally and income-wise, and they wanna be in a place that supports them, and where they feel like they can be vulnerable. There’s a lot of stigma around the whole idea of safe space right now, but the point is your business should be a place where people can be vulnerable, in the sense of that’s how you’re gonna connect with the real person. If we’re all wearing masks, then you’re not interacting with the real person; you’re gonna have communication issues. But when people can be vulnerable, they can be themselves. When they’re themselves, you have the best communication that you can have as humans. If you have to boil all business problems down – it’s not even business, it’s really all problems in the world – it has to do with communication, how we communicate with each other as humans.

Joe Fairless: That’s something that I’ve not thought of… If there’s a position that you need to fill, you must continue to have a high standard, even if it’s a position that perhaps isn’t as much of a priority for you, because bringing in quality people keeps the other quality people around. Thanks for sharing that.

Danny Coleman: And it happens a lot, especially in real estate, because we tend to use virtual assistants for a lot of the parts of the work that basically could be automated, but you ultimately need a human to do it. So you’ll tend to really devalue that position, because you feel like it’s so robotic to do, you could just have the lowest-paying person in there and that’s gonna be the best thing for you… But ultimately, that’s the biggest mistake; if you bring in people who are sub-standard, then your people who are median or exceeding standards will begin to — honestly, they won’t feel great about your decisions; they won’t trust you like they should.

Joe Fairless: Where do you find the quality people?

Danny Coleman: You can get them, you can certainly find quality virtual assistants. UpWork is a huge place to go; it used to be oDesk. And you can find them on Craigslist. I got into the position I’m talking about, the COO position, via a Craigslist ad. So it really comes down to your process. Let’s just think about this for a second – if you’ve got 100 people who apply, how do you figure out who are the 1-3 people in that 100 that are good? So it’s not a matter of where do you go to find them, it’s just you’ve gotta make sure you’re casting your net wide enough.

Then the problem is “Oh, I’ve been casting my net so wide…”, so it’s a 40-hour/week job to screen these people, and interview and hire these people. So you’ve gotta have a good process, and that’s when it comes back to the hiring process we can talk about. A good process will work through all the masses of people that exist out there and who are trying to apply for your job. That’s essentially how you do it – you have to cast a wide net, but you’ve gotta have a process that keeps it from taking up all your time.

Joe Fairless: And what is that process?

Danny Coleman: Every business that I work with, we kind of tweak it a little bit. It starts with your job ad – how are you even putting your job ad together? It sounds so basic and technical, but it’s really important. When you’re writing a job ad, what you’re doing is you’re asking someone else to come contribute to your vision; you’re saying “Hey, I want you to come in and be a part of this thing that I’m building.”

The way that I have people write job ads (or I’ll write them for them) is you wanna tell a story. Why your business. Describe what your business is, four values of your business, what are the people in your business like, and then you wanna lead them on – “Does this sound like a good place? Is it interesting to you? Well, keep reading. Here’s what we need help with.” Get really clear on your position.

I always have people write up a position agreement, or I’m gonna help them write a position agreement. A position agreement is a mutual contract between you and the person who’s filling the position. More basically, it’s a job description. But then once you bring them on board, it’s kind of when it becomes this living, breathing document between you and them.

But to stay on point with the process – you start out with just your job description. You say “Here’s the reason that this position exists. Here’s the things that you’re gonna be responsible of doing on a daily/weekly/monthly basis. Sound like you? Sound like something you’re interested in? Cool, keep reading”, and then you describe them as a person. I think this is what’s missing from a lot of job descriptions – you kind of just say “Hey, here’s our company, here’s what we need. If you wanna do this, apply here.” But you wanna describe them as a person, because the people who get really excited – and people who are hiring managers know what I’m talking about; or if you’ve done interviews – about working for you and the people you want on your team, they’re reading that description of themselves essentially on your job ad, and they’re like giddy. They can’t wait to apply for it. “Wow, this is what I’ve been looking for!”

And just to give you a real-life example, this is how I got into that position, for the real estate business in Nashville. [unintelligible [00:11:30].11] that changed my life… And it was because of how well-written the job ad was; it wasn’t perfect, but it got me excited. In fact, one of the things that they had in the job ad was “Must enjoy organizing chaos”, which is [unintelligible [00:11:43].08] I have podcast named “Organizing Chaos.” So I read the recruiter’s job description describing me, and I was like “Oh my gosh, I can’t wait to do this.” So really that’s the big part. I’m kind of going into details on the hiring process, but it really is where it all starts. Putting that job ad together is the first step towards finding the right people… And again, you’ve gotta cast a wide net, but that process needs to sift through all of the people that are gonna apply; you’re gonna have the resume shotgunners, you don’t want them… You want the people who get excited.

Then I have really specific instructions on how to apply. “Your subject line must look like this, and you must include a cover letter”, and these other things… But yeah, I can get into as much detail as you’d like on that.

Joe Fairless: Yeah, that would be good. I imagine — one of the things you’ve mentioned is “Have something specific in the subject, as well as have a cover letter”. Those are the ways you filter people out, right?

Danny Coleman: Yeah. And it started honestly out as something I did for technical reasons… Because I was casting a wide net, but I didn’t wanna deal with all these e-mails in my inbox, so I set up a filter… And it needed to work with that filter. I’m sure you’re probably familiar with Podio. I would use Podio to manage the applications. So e-mails would come in from Craigslist, Indeed, or wherever else I placed a job ad – they would come in, and then they would use that filter to send that e-mail on to Podio, where I would then manage the applications in there.

But then I also had a qualifier – can you follow simple directions, such as your name, colon, position. A lot of people don’t do that. There’s also lots of apps out there that work with Craigslist, that help people shotgun their resume, and it doesn’t take those types of things into consideration… Just like go to apply with the job title, or something like that. So that’s the next part of the process.

Then the next thing I do is I shortlist those candidates. So I already have two pre-screens that essentially run through a really specific job ad, and then a specific way of applying. Then I do a video for it. I’ll send out a video of myself where I pretty much just say a few things about the position we’re looking for. I’ll pretty much just read the job ad, but I obviously give it some flavor and context, and I let them see me. Then I send that video out to everybody who I’ve shortlisted, and I request a video back from them.

We used to have a problem… For a while we would kind of hit and miss on whether or not people would be responding with their video, because a lot of people don’t wanna do that. But I’ve found out that it balanced the relationship a little bit by me sending the video first to all those people I shortlisted, and basically it gets them excited again. If they like the position, they’re gonna be excited to respond. So that’s another screen right there, because you’re gonna have maybe a 25% response rate with people doing videos back… And it also tests their ability to do something simple like upload a video to YouTube, make it unlisted and send it to you.

Joe Fairless: What do you ask them to do in the video?

Danny Coleman: I have them tell me what about the job ad stuck out to them and what interested them, and then why do they think their natural talents and/or their experience would be relevant to this position. And I really just use the idea of who they are as people. Before we have to sit down and schedule interviews, it gives me an idea of what their character is like, how are they coming across; what is it that excited them about the job ad. I wanna hear them say it, rather than formulate an e-mail response where they can write and rewrite it a million times. Of course, they can upload the video many times too, but they’re less likely to do that than they would with an e-mail.

So getting just those two questions answered is really all that I ask for. And again, it helps me with this whole process of being able to cast a wide net, but then use all these various filters to filter it down to make the best use of my time.

Joe Fairless: For people who do the video, the 25%, but you’re not a fan of the video – do you reply to them, or do you just not reply?

Danny Coleman: I do let them know that I’m moving forward to another candidate. Of course, typically at that stage they might have asked me a question, like “Hey…” — I’ll always let people know I got it, because you always wanna be respectful of the fact they’ve sent a stranger a video.

Joe Fairless: Yeah…

Danny Coleman: So I always respond. I have an auto-response that says “Hey, we’ve got your video. Thanks so much. We’ll be in touch within the next timeframe.” And I always try to let people know. But the people who send back a video, I try to let them know what the deadline is for when I’m trying to hire for this position; it’s respectful of their time… Because if they’ve given me this much respect at this point too – replied to the video, followed the instructions, sent me a video back – I wanna let them know 1) that I got it, and 2) what kind of timeframe they can expect. Because they might be looking for a job sooner, or they might need to move on with another application, or something. So I try to be respectful in that by letting them know.

But ultimately, when I’m done interviewing someone, or by the point I get to the point where I’m  scheduling in-person interviews, I let everybody else know we’re moving forward with other candidates right now, so thanks so much for your interest, or whatever.

Joe Fairless: And then what’s the next step in your process?

Danny Coleman: The next step is an in-person interview… And I’ll give this out, honestly, to anyone who’s interested in it – I have an interview template that I use. I’ve built it over time, there’s a lot of research behind it, there’s more experience behind it… I’ve got an interview template that — my interviews run about an hour long. That’s why this process has to shake people down to the point where maybe I’ve got five or six people who sent back videos, who I’m like “I wanna schedule an in-person interview with these people.” Without fail, out of those five or six I’m only gonna get three people who are going  to take the time to schedule an interview with me… But the truth is that probably any one of those people that I’m going to schedule an interview with, because of all the filters I’ve had set up beforehand, by the time we get to that point probably any one of those three people would actually work… And then the interview is just to see who I think it would work with the best; who has got the chemistry if they’re interacting with me where we’re gonna get along the best and we’re gonna be able to communicate and understand one another.

But that interview – as I said, it’s an hour long; a couple of the things that I ask people about is their future plans. I wanna know that a candidate that I’m talking to has been considering their future, at least 6 or 12 months in the future. Are they reading books? You know they read books, period; I don’t care — I like it to be personal development or business books, but if they’re reading fiction, that’s fine too. I think people who read books – it’s a telltale sign of someone who is just a little bit more than basic. That’s another favorite.

I always ask the classic question, “What’s a weakness? What’s something you could stand to improve on?” Because for me if you’re not self-aware enough to know something that you need to work on, then you’re not self-aware enough to be on my team… So I think that’s important, too.

I’m trying to think of some other things… I always like to ask people to say one word to describe what motivates them. Then I also ask “In one word describe what discourages you, or tears you down.” It helps me to get an idea of how this person uses words. Everyone has a different association with different words, different words mean different things to people. That’s why communication is hard. It gets them to stop and think in an interview, and that’s with a lot of my questions – they’re designed to get people to pause and give me thoughtful answers… Because as I’m doing the interview, I’m always engaging in Socratic questions; if you don’t know what that is – it’s basically asking a clarifying question after each question. It’s not every question; sometimes people give you good answers that I don’t need to ask for clarification on, but most of the time I’ll be like “Go further into that” or “Why would you use that word?” or “Give me an example of that”, or something like that… And you get them to get a layer deeper. That’s how you filter out people who might just be blowing smoke, or BS-ing you, or whatever. That’s what my interviews are really designed to do – how do I get down to the real person, how do I get down to the genuine human being that I’m gonna be interacting with on a daily basis.

One thing I forgot to mention is that I open it up by actually mentioning a few things about myself. I like to have a conversation, not an interrogation. If you go in there and you’re just like “Oh, well let me just immediately start asking you questions” – no, I like to say “Hey, my name is Danny Coleman and I live in Columbia, TN. I really like to be a part of my community. I’ve been working for this business for x years. I like to ride motorcycles, and I’m a Star Wars fan.” It lowers defenses, because defenses are there because they think that they have to present this perfect version of themselves.

Joe Fairless: Right.

Danny Coleman: That’s not the version of the person you’re gonna be working with on a daily basis. You’re gonna see people in terrible situations, which reminds me of one other favorite question of mine from the interview… Asking them about what frustrates them the most, and then following up with “How do you cope?” That’s another good one that I’ve really used. Because again, you’re not just asking questions that they pass or fail here; you’re asking questions that inform you if you hire them, you understand more about them and how to interact with them, sooner rather than later.

Joe Fairless: Incredibly insightful. Thank you for that. How can the Best Ever listeners get that template? Do they just e-mail you, or…?

Danny Coleman: Yeah, shoot me an e-mail at danny@dannycoleman.me. I have a bit.ly link, it might work with that. Can I send it to you?

Joe Fairless: Yeah, you can send it to Grant on my team and he’ll make sure it’s in the show notes page. Sorry, what was your e-mail?

Danny Coleman: Danny@dannycoleman.me.

Joe Fairless: Cool. Well, based on your experience as an entrepreneur, what is your best advice ever for real estate investors looking to scale their company?

Danny Coleman: It would be focus on your people. I remember there was a point in time at a business that I used to work for, that I was like “Wow, I feel like we care more about each other than we do about our customers.” And that sounds weird and odd, but I think it’s really important, because if your team doesn’t think that they’re a priority, that the money is more priority, then they’re not gonna follow you.

As a leader, you have to make your people feel like they’re the priority in your business, and in turn they’re gonna give you 100% and they’ll be loyal, and you’ll be able to give them more responsibility without necessarily increasing their pay, which I think is one of the biggest things that we run into as real estate entrepreneurs.

Joe Fairless: We’re gonna do a lightning round. Are you ready for the Best Ever Lightning Round?

Danny Coleman: Yeah, yeah. I’ve never done one.

Joe Fairless: Well, because I’ve never interviewed you on the show. This is the first time, and you’ll enjoy it. It’ll be a lot of fun. First though, a quick word from our Best Ever partners.

Break: [00:21:42].09] to [00:23:04].01]

Joe Fairless: Alright, speaking of being well-read – best ever book you’ve recently read?

Danny Coleman: David Goggins, Can’t Hurt Me. Fantastic book.

Joe Fairless: Best ever business deal you’ve done, whether real estate or otherwise?

Danny Coleman: Well, I would have to say it was a deal that we got $100,000 assignment on. That was pretty cool. We all got a percentage of that, so I didn’t get $100,000, but I did get a really nice paycheck.

Joe Fairless: What’s a mistake you’ve made in business?

Danny Coleman: I would have to say being overly trusting.

Joe Fairless: What happened?

Danny Coleman: Contractors specifically.

Joe Fairless: Oh, yeah…

Danny Coleman: I just got kind of manipulated by a contractor. I don’t think he was so maniacal, I just think it was one of those people that are like “Oh, we’ve got a good relationship, so I can get away with this, I can get away with that, I can get away with this…” There’s foundation issues now, we’ll leave it at that.

Joe Fairless: Best ever way you like to give back to the community?

Danny Coleman: My local community or the real estate–

Joe Fairless: Whoever.

Danny Coleman: Well, I’m a very big proponent of being involved in your local government. I think it’s very important that you’re attending commission meetings and/or your city council meetings, keeping in touch with the local representatives, because that’s where you can have an impact on the government. And if you wanna change the way that the world is, we need to get in touch with leaders, and/or be one yourself.

On that note, I ran for a county commission seat just recently. It was just a vacancy, so it wasn’t a traditional election. I didn’t win, but I am gonna run next year, so call me in 2020 for [unintelligible [00:24:25].29]

Joe Fairless: How can the Best Ever listeners learn more about what you’re doing?

Danny Coleman: Well, they can visit my website, www.dannycoleman.me. You can find my podcast… Everything about me is on there, but my podcast is Organizing Chaos. You can find that on Stitcher, iTunes, Spotify, or your favorite music listening apps. But yeah, if you go to dannycoleman.me, you’re gonna see all my social media profiles – LinkedIn, Instagram, all that jazz.

Joe Fairless: You laid out the plan for how to attract and screen qualified applicants so that you bring in the best people, which creates the best culture, and you got very detailed talking about things to put in the job description to attract people, as well as ways to filter out a bunch of people who wouldn’t be as qualified… And then questions asked during the interview process.

Any entrepreneur who is scaling their business – this is an interview to listen to, and I’m grateful that you spent some time with us. Thanks again for being on the show. I hope you have a wonderful day, and we’ll talk to you again soon.

Danny Coleman: Awesome. Thank you, Joe.

You may also like

Download the FREE Passive Investor Resource GuideSimply provide your information to download