JF1979: How to grow your business by firing yourself with Brandon Barnes #SkillSetSunday

If there’s one thing that Brandon Barnes has learned through his investment experience, it’s that, in order to grow, sometimes you have to hand over the reins. Bringing on someone can be scary, but Brandon shares how having someone dedicated to analyzing and closing deals instead of relying on yourself, can take your real estate investment business to the next level. 

Brandon Barnes Real Estate Background:

 

Best Ever Tweet:

“I knew it wasn’t working with me being the sole person doing all of the following up and making offers so once I made that leap of faith that, even if they’re 80% of me, they’d probably be 3 to 5 times more productive than me.” – Brandon Barnes

 

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TRANSCRIPTION

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

Brandon Barnes: Hey, I’m well. How are you doing?

Joe Fairless: I am doing well, and I’m glad to be catching up with you again. Brandon was on the show, and Best Ever listeners, you know this because you’re loyal and you’ve been listening for a while. In fact, three years ago, on episode 798, titled “How Most of His Revenue Comes From PROBATE Leads,” Brandon was on the show. So if you want to learn more about his best ever advice and what he was focused on then, feel free to listen to episode 798.

Brandon is a wholesaler and he hosts a real estate meetup. His team now grosses north of $1 million annually and is continuing to grow. Today we’re going to be talking about firing yourself to grow a business. So today is a Skillset Sunday episode, and we’re gonna be talking about firing yourself to grow a business. But first, Brandon, how about you just catch us up to speed on what you’ve been up to for the last three years, and then let’s roll right to firing yourself to grow a business.

Brandon Barnes: Yes. Thanks again, Joe. I’m super-excited to be back on. I think that first interview we did, I didn’t even think I was worthy of being on your show, and look at how things have transpired over the years. So that first year, I was by myself. I was doing everything, I was a one-man-band. Again, I mentioned previously I was a Tom Crowell student and he told me very early on the first hire can be a solid virtual assistant. Best decision I ever made, even when I didn’t have the money to pay her; I found a way through the years, especially early on. She was my first core hire, that really allowed me to establish my business, keep my marketing consistent, keep track of my KPIs. She knows more about the systems in our business than anybody else in it. She’s now a very well paid administrative assistant, if you will. So, that year–

Joe Fairless: Where is she based?

Brandon Barnes: She was based in the Philippines. She was the youngest of five siblings that had all moved out of the Philippines into the US, but some elsewhere. It was her dream to move, and we were able to help her do that, increased her rate from $5 an hour to $20 an hour to support her transition to Toronto. Now she is getting her citizenship in Toronto and we were able to help her do that.

Joe Fairless: Very cool. All around, very cool.

Brandon Barnes: Yeah, for sure. So later in that year I remember probates saved me because I was sending a lot of direct mail postcards, and then I found through a podcast– which is always great to expand your horizons and listen to other information… As I would drive for dollars, I found that podcast that talked about the probate process. I put that in place, I was rocking and rolling with that. Then in the Tom Crowell group, Brent Daniels, who’s now — I’m about to call him Mr. TTP, but Mr. Talk to People, Brent Daniels, was very early on talking about his game-changing strategy where he’s just straight up cold-calling, not sending any direct mail. Because he was such a go-giver early on, I reached out to him and he gave me everything. He gave me scripts, the KPIs, the systems. I put that in place starting at the end of 2016. So we interviewed in September that year. By the end of that year, I started transitioning to cold-calling. So by early ’17 I was already off to the races. Cold calling before TTP was even a thing, before he even came out with the course, before everybody started using that cold-calling script, I started at that time.

I was still doing a lot of stuff myself. I was the acquisition manager, the marketing manager, of course with Nicole, my assistant… But that year, 2017, of changing my channel to mainly cold calling – we were still sending some probate letters – I got to about 200K in revenue that year in 2017. End of that year, I realized that I needed to get out of my own way and fire myself. Because at most, it was a good week if I sent ten offers to people that I had spoken to.

At the end of that year, that November, right around Thanksgiving, I went on to hire an acquisition manager to replace myself. So they only focused on making offers and following up. That next year, 2018, we did just shy of a million dollars in revenue. So in that business, I did just shy of a million, but I’d done a few other deals, so I grossed for the year a million, and we’re already tracking at 850k, 900k for the year… So we’ll definitely blast through that this year and continue to grow.

Joe Fairless: Congratulations on that. What are the things that changed once you stepped aside?

Brandon Barnes: Yeah, I’ll go back to the beginning. One of those first books was the E-myth. It was, “Stop working so much in your business and work on your business.” So by having somebody that was dedicated to making offers and following up, everybody gets an offer that I didn’t have to worry about doing all the follow-up, because I was horrible at it. I was going to closings, I was going to showings, I was going to meetups and networking. It was scary because you’re taking on an individual that their success is tied to your productivity and your business, and you have to pay them. and they’re a little bit more expensive than $5 an hour in the Philippines…

So once I made that jump, I was like, “Hey, I know that this isn’t working with me being the sole person doing all the following up and making offers”, once I just made that leap of faith that somebody else would be, even if they’re 80% of me, they’d probably be two to three to five times more productive than me. Once I just made that switch in my head, hired that person, jumped out there, it’s exactly what happened.

The great thing is, the first hire that I had – they’re not with us no more, but even that person, she was maybe 40% to 50% as effective as me in closing deals and analyzing deals, but she still was producing more than me because she was solely focused on making offers and following up.

Joe Fairless: Right, completely dedicated to it. So it certainly can be a scary thing to bring on someone, and now you are paying them, and there’s always uncertainty on “Am I going to get more deals? Am I just going to be paying a lot of money and then not getting any return?” So how did you structure the compensation and how much were they paid that first hire? We talked about the VA, but this other hire.

Brandon Barnes: For sure. So I started off $20 an hour, basically the same as the cold callers, and with the expectation that they work 30 hours a week. There was a point where we did a flat fee commission. Actually, there was a point where we did a percentage commission of deals. We got to the point– when I say ‘we’, I brought on a business partner when I started doing the cold calling early on. Once we started to see that our costs were always fluctuating each and every month, we actually made the decision to put them on salary at that point, and just pay a flat amount per month. I want to say it was $2,500 a month for the cold callers and $3,500 a month for the acquisition manager, and then we may pay them a spot bonus here and there… But we’re able to then understand exactly what our costs were each and every month and not be so up and down depending on how many deals got closed.

Honestly, there are certain people that want that percentage commission for deals closed, but there’s other people– and honestly, the majority of our folks like that stability and security, that “Each month I know that I’m making x amount of dollars to support my family.” So it’s actually a win-win for both of us to go to a flat fee based rate salary for each month, for each team member.

Joe Fairless: During the transition period of when you hired this first person who was focused on closing deals and analyzing deals, what were you doing during that period?

Brandon Barnes: Yeah, it was a fuzzy period. Honestly, it was so new… I think for most of that time, I was just making sure that everything around the deals got closed. So we had a sales manager at a point that was just talking to buyers. But there’s still an operation involved, because my acquisition manager was just getting deals under contract over the phone. The crazy thing is– crazier, is that my acquisition manager, who’s an absolute stud, lives in Mexico. He’s a former Marine US citizen expat living in Mexico, dialing in and following up and making offers here in Atlanta. And there’s still that process of needing to go to the properties, check out the property, get pictures, do a showing, make sure everything’s situated, going to closing with the closing attorney… Just making sure that the rest of the after going under contract happened and got closed. That was probably my primary focus at that time. Since then, I’ve had an opportunity to start to help others that are interested in real estate. I started a local meetup group, so now I’m really focused on building that and giving back to other people here in Atlanta with my monthly meetup group.

Joe Fairless: How do you determine what areas you should focus on now, that generate the best return on your time?

Brandon Barnes: The monthly meetup and everything that I’m doing with the coaching is still somewhat new. So for me, that’s my primary focus. But I’m only able to do that because I spent so much time upfront. Let me also add this in here… Early on, I spent a lot of time working with my acquisition manager, looking at the deals, helping him see the numbers as I saw them, helping him understand the areas, because of course, he’s not able to see it – he’s been here and visited a few times – but making sure that I’m pouring into him and empowering him to understand the bigger picture in the business… Even to the point where, today, for instance, we actually just brought on a new sales manager, and my acquisition manager is leading our team meetings. He’s making sure everything is getting lined up to go to closing; all those things that I was doing in that 2018 period, last year stuff… Working with him, helping him see it. Now he can do it in my absence and lead the team, make sure everything is going well, call out anything that I need to focus attention on.

So for me now, by having that meetup and networking with others, I’m actually understanding what’s working well in certain areas. I’m getting tips and tricks from peers and colleagues. We’ve had some great speakers to come out. Brian Daniels, of course, has come out; Jamil Damji is coming. Working with them, speaking to them and understanding how we can continue to be agile in our marketplace has actually brought a lot of value back to my core business, so that I’m making sure that we’re on the right track, we’re not getting stagnant, we’re not just using the same acquisition channels and outreach, and going after the same list, or the same automations. I’m spending time cultivating that community here, but it’s also helping me build my network and find out some other things that are working in other markets and how we can apply them in our business so we can continue to sustain and be ahead of the curve as things change in this ever-changing market.

Joe Fairless: When would be the best time to make that first hire? Not talking about the administrative assistant, but the acquisitions person? Because I imagine when you started out it wasn’t the right time to make the hire, because you were starting out of the company. But somewhere along the way, it did make sense. What is that point?

Brandon Barnes: That’s going to be tough to answer. On the whole, it’s somewhat going to depend on the person, what resources you have. But generally, I’d say if you’re at the point where you’re doing one to two deals each month or even every other month, you’ve kind of got the hang of it, and you can budget out three months… Here’s another piece – even if you’re not doing that many deals, but you could budget out paying how to teach them or you have a mentor that you can help train that new hire, and you can budget out three months to six months of pay for that person, that’s probably a good time.

Honestly, the soon as you could possibly do it — I wish I had done it at an earlier point in time. As soon as you could do it, I think it’s ideal. But even with that pay, I say that it’s tricky because if somebody really has a certain amount of resources, like I have all the knowledge and the skillset, but I don’t have the money, and I go out and network with somebody that potentially wants to work for some sweat equity and commission-only, maybe you can find that person even sooner without having the ability to pay them.

So it’s what resources you have, what type of talent you can find… But ideally, you will want to find an employee mindset person, not another entrepreneur; somebody that’s going to stay with you. And you’re going to want to try to budget out, I’d say, at least three to six months. Three on the low end if you have it really dialed in, because that person should start to produce enough to support their pay within that second, third or fourth month.

Joe Fairless: Will you elaborate on the employee mindset mentality versus entrepreneurial mindset mentality, and if that comes from personal experience with hires that did or didn’t work out?

Brandon Barnes: Oh, yeah. For sure. Everybody — not everybody, but once you get into that mode of hiring different people, you’ll start to see a trend. Honestly, one of those first acquisition managers that we brought on, one of the ladies was a personal trainer, and sold insurance on the side; a real hustler and real sharp, great communication skills. Managers knew that she was going to be great and was gonna be a rock star, and hungry… But she was so wrapped up in her vision and wanting to do her own thing that she was splitting time and attention and didn’t really get ingrained, and dialed into being an active member of our team, and it showed in the performance.

I’ve had an agent come on board as well. They were trying to look at different exit strategies, and wanted to wholesale everything. “I can list this, and I can do that, because I have so much experience.” So the people that have been with us the longest– I have a cold caller woman named Sharon from Louisville, Kentucky. She’s been with us for two and a half years. Cold-calling is gruesome work. You’re getting negativity thrown at you, hurled at you, day in, day out. But Sharon is old cool; she’s used to putting in her time, she loves consistency, she shows up to work every day. She’s the hardest-working woman that I know, and she just wants a steady paycheck, she wants stability. That’s the employee mindset that you’ve gotta go after, that will stay with you. So you get that great return on your investment, which is your time. The time that I poured into training her, it’s paid off in spades.

Joe Fairless: It’s something that a lot of people don’t talk about when they talk about looking for team members. I’m glad you did. I’m in the process of hiring for a couple of positions, and it’s something that I was waffling back and forth on, because there are a couple of candidates that were more entrepreneurial. I’m not going to go that direction, because they were a little too entrepreneurial, and it’s for the exact reasons why you mentioned it. Because I want people who will stick around for the long-term, versus learn something and then bounce in a short period of time.

Brandon Barnes: Right. Like you talked about, it’s that time. The time you put into training them – you can’t get that back. So you want that to last and pay you back for at least a year or two. At least, at a minimum.

Joe Fairless: How can the Best Ever listeners learn more about what you’re doing and get in touch with you?

Brandon Barnes: Yeah, for sure. So I love to connect with people and interact with people via social, @IamBBarnes on Instagram. You can also search that on Facebook, and that’ll go to my business page… As well as my website is iambbarnes.com. I’d love to connect with anybody, especially if you’re in Atlanta, to come out to REI Live Atlanta monthly meetup.

Joe Fairless: Awesome, Brandon. Well, thanks a lot for being on the show, talking about how to step aside and allow others to grow your business and overseeing that process, putting people in position to be successful, having the right people in that place; making sure the two things you want to have before hiring – making sure you have the resources to do so and making sure that you can find the talent and find the right type of talent. So thanks for being on the show. I hope you have a best every day, and we’ll talk to you again soon.

Brandon Barnes: Awesome. Thanks, Joe.

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