JF2440: Building A Real Estate Business That Serves Your Life Goals With Lars Hedenborg
Lars left a cushy corporate job to do real estate. One of the requirements of the job was having to travel a lot, and he couldn’t be a good husband and a dad doing that. In 2007, Lars got his real estate license, but he quickly realized that real estate wasn’t what he thought it was. He was hoping for flexibility and more free time with his family. Instead, he was facing the 70-hour workweeks again.
Since marketing and lead generation was his favorite part of the job, he started looking for ways to restructure his business to fit his interests and life goals.
Lars Hedenborg Real Estate Background:
- Founder of Real Estate B-School; providing training and coaching to top producing agents and team leaders.
- He went from working 70 hrs a week to one day a week through his trial-and-error development of a system driven-business
- 13.5 years of real estate experience
- Lars has helped facilitate 4,000+ home purchases since 2007
- Based in Charlotte, NC
- Say hi to him at: www.realestatebschool.com
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Best Ever Tweet:
“Just cause you could hand-write an envelope and stick a stamp on something, doesn’t mean that it’s the best use of your time” – Lars Hedenborg.
Theo Hicks: Hello, Best Ever listeners, and welcome to the Best Real Estate Investing Advice Ever Show. I’m Theo Hicks and today we’ll be speaking with Lars Hedenborg.
Lars, how are you doing today?
Lars Hedenborg: I’m doing awesome, Theo. Thanks for having me.
Theo Hicks: Thank you for joining us today. Looking forward to our conversation. Before we dive too deep into that, let’s go over Lars’s background. So he’s the founder of Real Estate B-School, which provides training and coaching to top producing agents and team leaders. He went from working 70-hours a week to one day a week through his trial-and-error development of a systems-driven business, so you better believe we’ll be discussing that. He has 13 and a half years of real estate experience, and has helped facilitate over 4,000 home purchases since 2007. He is based in Charlotte, North Carolina, and his website is https://www.realestatebschool.com/.
So Lars, do you mind telling us some more about your background and what you’re focused on today?
Lars Hedenborg: Yes, for sure. So I got into real estate as an investor. So I had hooked up with a local agent and I had just moved to Charlotte, North Carolina. And the numbers on investment properties here worked a whole lot better than where I came from, New Jersey. So that’s kind of how I got into real estate. I left a pretty cozy corporate job. I was doing acquisitions and strategy for an aerospace company. Really cool job, and I was traveling—one year I did 250,000 miles in an airplane. So I think that year I hit 28 countries, or something like that. So I got to see the world and just a unique experience, but it didn’t lend itself at all to any kind of cozy home life; I couldn’t be a good dad, couldn’t be a good husband… And traveling takes a toll on your physical body as well.
So fast forward to 2007—I actually got my license in 2006/2007. March that year I left my corporate job, and quickly realized that—and this is like anything you do; I quickly realized that real estate was not what I thought it was. What you learn in school is not what you actually practice on a day-to-day. So I had to learn how to generate leads, I had to learn how to pick up the phone and talk to people, and what to say to compel them to take action.
I got really good at the marketing and lead generation part of it, and I realized quickly that I worked up real fast to 70 hours a week and most of the 70 hours were spent doing things that I didn’t like doing them, and I could build a system to have somebody else do them. And that’s basically what I set out to do, is just build a business, versus a typical successful real estate agent who’s working 70 hours a week, and they’re selling a lot of homes, and they’re miserable. And it’s not a great life.
So that’s kind of the short version—the 4,000 families served, I did about 5% of those deals personally as the real estate agent. So I quickly built a business that could do the job of real estate agent, so I wouldn’t have to.
Theo Hicks: That’s great. So I’d love to dive deeper into that journey. Before we get into the specifics, maybe just high level… So you said you got your license around 2007, and that eventually, you were working 70 hours a week, and now you’re working one day a week. So from a time perspective, how long was it from when you started to when you sort of were working 70 hours a week? How long were you working 70 hours a week? And then how long did it take you to go from 70 hours a week to one day a week?
Lars Hedenborg: It took me about six years total, from 2007, to me doing my last deal in 2012. So my last personal deal; my business did 248 deals in 2012, and I did one of them. Then we did 312 the next year, and then over 400 in 2014. In 2014 I worked 42 days. So if you look at 2007 and 2014, in 2007/2008/2009, that’s when I ramped up quickly and I got super-busy… Because I figured out lead gen, and I used a simple script and some Craigslist ads and the market was collapsing, so I was advertising distressed sales… So I figured out how to generate a ton of leads, and then I just surrounded myself with people that were willing to do the same thing that I was doing, other agents that couldn’t generate leads or say the right things or have any discipline or cadence and structure in their day. So it probably was a three-year period where I was working quite a bit of hours, and then ratcheted down from 2010 to 2014 from seven, six, five days, three days, two days one day, pretty rapidly.
And that’s when I started Real Estate B-School 2013. The B stands for business. So it’s essentially all the same stuff that we teach to top agents and team leaders across the country… It’s just leverage and systems and not doing every job; just because you can move paper around in a file, or if you’re doing mailers, like as an investor, let’s say you’re mailing defaults or something – just because you could hand-write an envelope and stick a stamp on something, it doesn’t mean it’s the highest and best use of your time.
Theo Hicks: Sure.
Lars Hedenborg: I just got really diligent and super ruthless about getting out of the things that were lower dollar productive tasks. I just did that for four or five years in a row, and I ended up to the point where there’s not a whole lot left for me to do.
Theo Hicks: So let’s kind of take it step-by-step. So you kind of talked high level how it’s accomplished, but I’m just curious to see how exactly you did it. So 2008/2009, you were working 70 hours a week and then you make a decision to want to reduce that time investment. What’s the first thing you did?
Lars Hedenborg: That’s a good question. So I slowed down a lot. So on the one hand, I was running and gunning. On the other hand, whether once a quarter or once a month or once a week, I would just step back from what I was doing and just look at, “Where am I spending my time where it’s out of bounds?”
Let’s say I would be willing to work Monday through Friday, 9-5; I was willing to work 40 hours. Where am I completely out of bounds on just time? And if we’re showing homes – so buyers want to look at homes in the evenings and they want to go out on weekends… So I would maintain the business relationship with the buyer, but I would have another agent show them homes.
I can pay an agent 20 bucks an hour to show homes and I can get those people to do that all day long. The average real estate agent, I think, makes 40 grand total a year. So that’s 20 bucks an hour, maybe even less than 20 bucks an hour. So I know for 20 bucks an hour, plus a little bonus if they write a contract, I can get out of all of that work. So that’s the first thing I did. But it came from me looking at my calendar. I would keep an electronic calendar, so I’d just go back three or four weeks and just look at what are all the things that are out of bounds. So that was the first thing that I got out of.
And then the second thing was the same thing with listings – I found myself going on listing appointments, a couple evenings a week and Saturdays [9:00], [11:00] and 1:00 pm. For a couple years, I would do three listing appointments every Saturday morning. And again, for me to get out of listing appointments, I just wrote down all the things that I did; how did I prepare for the appointment? What did I send in the mail beforehand? What did I say when I got to the front door? What presentation did I use? How was my paperwork set up?
So literally, just documenting our eight-step listing system, writing it down and then teaching somebody else to do it.
Theo Hicks: I’m just going to go back to those first two. You told us what you did; you learned the process, hired someone. Where did you find these people? And how did it work? Was it just they’d do it and you’d slip them a $20? Or were they people that actually worked for you full-time? Or were the other agents in the brokerage you were working for at the time? Who were these people?
Lars Hedenborg: We’ve done it both ways. When I first started, I started attracting agents, because I instantly got busy; I was a top producer, I had too many leads. So I brought — that year, 2010, that’s kind of when I launched my team and I had four agents that came into my team. So they wouldn’t get the whole commission check. I would take on the burden of spending money on leads and providing office space and all of that. I’m trying to remember your question. Your question was—
Theo Hicks: Who were these people? Where did they come from?
Lars Hedenborg: Yes, those agents would work on their own book of business, their own buyers, where they would earn a split on the commission check, but they’d also double as my showing agents. So I would just say, “Hey, listen, I’ve got a client that wants to go out Saturday to look at homes for two hours. Who can take it?” And typically, the agent that volunteered, they would just stay with that client for the whole time.
But then we’ve also done it where we’ve just had agents in our office or any agent with a license can provide a showing service for us, knowing that we maintain the relationship, and if they want to keep working with us that they can’t overstep their bounds on trying to own that relationship. Because money is money. And we would do it after the transaction; they would just account for their time, and a pretty basic system. It’s not all that complicated.
Theo Hicks: So these are the other agents that were in the same office as you? That kind of saw you being very successful and had all these extra leads, and you said, “Hey, do you want to do the showing, and I’ll give you 20 bucks plus a little bonus if you get the contract?”
Lars Hedenborg: Yes, most of it was they were really close to us. They were either on my team or they showed homes for me exclusively.
Theo Hicks: Okay. So these are the first two things you did. So you’re no longer doing the showings and you’re no longer are doing the listing appointments. What were the next thing that you contracted out to other people?
Lars Hedenborg: It’s the same process. So getting out of the client-facing stuff. So once I was out of working with clients, naturally, there was just less drama, less weird phone calls on a Friday night when I should be relaxing with the family… So that brought it down to five days a week. And then I just made decisions, “So what am I doing? If I could only work three days a week, what would I have to shed from my calendar to work three days a week?” And it probably was managing our marketing. So I could hire a marketing coordinator for 20 bucks an hour and manage our Clients for Life Program, all of our social media; that was probably one day, maybe even more than one day a week. And then I probably wasn’t even working five days a week, I was just physically there five days a week. So I just challenged myself to go to three, then go to two and then go to one. And it was harder to go from seven to five than it was from five to one.
Theo Hicks: Huh… Okay. So now what do you do with your spare time?
Lars Hedenborg: I did the same thing in the coaching business, too. I went from 30 hours a week in the coaching business, down to three hours here just recently with the same philosophy. I was like, “Well, do I really need to do that?” We do a pretty high-quality video a day to YouTube, but I just record for 12 hours every two months. And then I have a team that slices up everything. So again, it’s just looking at my time. So that’s the real estate team, then the coaching company I’m down just to one-to-many stuff like this, or I have a training session with our high-level group after this… There’s a real estate company, a cloud-based real estate company called the eXp that I’m working with, that’s been phenomenally fun and really disrupting the real estate industry. So that’s the thing I’m working on most of my time now.
Theo Hicks: Okay. So kind of going back to the beginning, you decided, “Okay, I’m working seven days a week. And I look at my calendar, and I’m spending the most time out of bounds on showings and listing appointments. So I’m going to hire someone to do those for me.”
Now, how do I know when I’m ready to do that? Is it I’m listening to this, I can do it right now? Do I need to make a certain amount of money? Is there some sort of calculation you did and get to understand what your dollar per hour was worth? And then what types of things did you contract out? How should I be thinking about this? How do I know that I’m not jumping the gun in hiring an employee before I can even handle it?
Lars Hedenborg: Yes, it’s a really good question. So we have six stages of growth that we teach on Real Estate B-School. And if you go to https://www.realestatebusinessgrowth.com/, you could pick up a copy of The Real Estate Business Growth Navigator. It’s like a 16-page report that I put together, that takes you through all of the stages of growth. And it really just describes — most of the industry lives in start mode. It’s less than 100,000 of gross commission income. Most of the people come into our world 100,000 to 500,000 of gross commission income, and to move past that you need to shed everything that’s administrative. So it’s hiring a really good administrator that will get you to a million, then you’re probably hiring a showing agent or a buyer agent or two or three, which is the next phase of growth that’ll get you.
So there’s each step of the process, but it also is $1 per hour. I made $18 an hour, my first couple years in real estate, and the year I worked 42 days, I made $2,300 an hour. So it’s a combination — there’s only so many things in any business that’s really only I’m the one that can do this; like, nobody else can do this except me. So that’s a good resource. If there’s somebody literally that’s wanting to scale their real estate business that’s listening to this, I would definitely go and just grab that. You’ve got to give us your email address and we’re definitely going to not spam you, but we’re going to send you some more value once you opt in. But it’s a really good resource that would help anyone that really wants to — and really for anyone that’s growing a business, all the concepts are—
Theo Hicks: Exactly. That’s what I was going to say, it sounds like explanations as to why these other phases and when to move on to each is definitely going to be applicable to anything; you just need to be a little bit creative to apply it to something else. Thank you so much for offering that resource. We’ll make sure that we put that in the show notes.
So Lars, traditionally, we say, what’s your best real estate investing advice ever. But since we’re talking about scaling businesses, as it relates to scaling businesses, what would be your best ever advice?
Lars Hedenborg: This is going to be painful advice, but I’ll say it anyway… Our most powerful tool that we use with our members is to do a time study. It’s a two-week time study where you’re just figuring out where you spend your time, and then you’re being honest with yourself about are you really spending your time in the highest and best use areas in your business? And typically, it’s 80/20 in the wrong direction. Typically, it’s 20% of your time is spent doing your magic sort of superpower thing, and 80% is wasted or administrative in nature.
We work to flip that, so 80% of your time is in your sweet spot and 20% is doing anything administrative. So that’s one of our foundational tools that we have members do from the start. And then every 90 days we look at “What does a perfect week look like? And what can you delegate from that list of things you’re doing so that you can elevate?”
And that’s the best advice I could give somebody. If you’re not making the kind of money that you want today and you’re not working the hours that you want, and you’re responsible for where you spend your time, you’re just not spending your time in the $1,000 an hour work. And most entrepreneurial ventures investing for sure, I don’t know what it is, but there’s two or three things an investor can do that is probably $1,000 an hour work. And if you were honest with yourself over a month period, how many hours are you spending doing that? Yes, you may go top-heavy so that you can get enough cash saved up to hire the administrator as an investor, but when you look at it as a business, if I were going to build a $10 million real estate investing company, I would have to really be honest about what my superpowers are, what really drives this business and how can I do more of it. So that’s my best advice.
Theo Hicks: I love that advice. I was actually just the other day looking through an old notebook… Because I used to do that, where I would track my time for the week and I’m like, “Okay, well, I need to make some changes here.” Whereas if you don’t do it, you just don’t really know, you don’t think about it; you’re kind of getting that routine and the habit of doing the same thing every week, and you just seem to be using your time usefully, but when you actually review that for two weeks and say, “I just spent three hours doing something completely useless,” it definitely puts things in perspective. Thank you so much for sharing that, Lars.
So are you ready for the Best Ever lightning round?
Lars Hedenborg: Yes, let’s do it.
Theo Hicks: Alright, let’s jump right into it.
Theo Hicks: Okay, Lars, what is the best ever book you’ve recently read?
Lars Hedenborg: Oh, man, you threw “recently” in there. The best ever book to wrap your head around and leverage is E-Myth Revisited by Michael Gerber. But then the “recently” part of it – I can’t lightning round it. It’s so much pressure.
Theo Hicks: Don’t worry, E-book Revisited is totally fine. We’ll stick with that one.
Lars Hedenborg: Awesome.
Theo Hicks: If you think of it before the end, you can just blurt it out at random.
Lars Hedenborg: Yes.
Theo Hicks: And if your business were to collapse today, what would you do next?
Lars Hedenborg: If my business collapsed—I really enjoy helping business owners scale. I probably would do really high-end consulting. So I’d probably get five business owners to give me five grand a month to really help them scale their businesses. I think I could find 10 business owners that would allow me to come in and really get them massive leverage.
Theo Hicks: Okay. So usually, we ask about the best and the worst deals, but maybe I’ll change it a little bit… We’re talking about saving time… What’s one thing that you did that reduced your time spent working the most?
Lars Hedenborg: I think every quarter I go through a delegate and elevate. I look at a four quadrant, like “What makes me a lot of money and what makes me not a lot of money?” And then there’s a passion scale. So what are my high passion, high pay; low passion, high pay; high passion, low pay; and then low passion, low pay? All the low pay stuff, if you want to make a lot of money, I don’t care if you’re passionate about it… If you’re passionate about building websites and you spend 20 hours a week working on your website, I promise you’re not making a lot of money in your business. So that’s probably the tool that I would use consistently. And that’s all I’ve done every quarter, is kind of looked at my passion versus pay.
Theo Hicks: So you can answer this question one of two ways. The first one is what’s one thing that you delegated, that you immediately realized that you probably shouldn’t have delegated it and started doing it again yourself? Or if you don’t have an answer that one, what’s the one thing that you see real estate professionals or real estate agents doing that’s the biggest waste of time? The biggest low pay item.
Lars Hedenborg: I’ll answer both real quick.
Theo Hicks: Okay.
Lars Hedenborg: So the first one, when I first got out of listings – listings are the holy grail of real estate. Like, a top agent – that is the super bowl. So you would never give away listings. But I wanted to give away listings, because I didn’t want to work with people. So I gave them away and I completely abdicated out of it, and I let this guy go on 105 listing appointments before I looked in and looked at his conversion rates, and they were abysmal; they were half as strong as mine. So that was just a monumental fail. I learned a ton from it. We reconnected and I went back on 20 more appointments with him and we fixed the issues and we’ve moved forward.
One thing I see agents wasting time on – and this is every solopreneur who thinks they’re a business owner, but they’re really not – they’re spending way too much time on administrative. 80% of their day, they could pay someone less than $25 an hour to do. And if you want to make $250 an hour, which is 2,000 hours a year times 250 is $500,000… Most people would love to see a $500,000 income. 250 minus 25 – every time you’re working on a $25 thing for an hour, you’re losing $225. And most people don’t really look at their day that way. And when you start looking at your day that way, you’re like, “Huh, no wonder I’m stuck at 75 grand. It’s because I’m doing all these things that are only getting me paid 75 grand.”
Theo Hicks: Thanks for answering both those questions. You kind of already answered this, but I’ll ask it anyways – what’s the best ever way you like to give it back?
Lars Hedenborg: To give back – we’re super blessed financially, so as a family, we really challenge ourselves to place money, some of it anonymously with people that are just struggling, and we give to the church, we give to a bunch of different organizations… I don’t give up my time. So I kind of really carry a little bit of a burden around, like — I don’t know, if God is challenging me there yet. I feel like He’s blessed me to make a whole lot of money, and I just need to be a blessing to others… So I hold on very loosely to the money as it flows through me. So that’s the biggest way that I give back.
Theo Hicks: And then last question, what’s the best ever place to reach you?
Lars Hedenborg: I would think for your audience, it probably would be, as a resource, the http://businessfreedompodcast.com/, just like good business advice, the https://www.scaleordiebook.com/, I’m giving away the book for free, so there’s no trick there. But I think those are probably the best two.
Theo Hicks: Alright, Lars. Well, thank you so much. There’s a lot of advice you’ve given in this episode, very powerful. I think it’s really worth relistening to this again. Lars is a real estate agent, or I guess, he’s a real estate agent one day a week, and a lot of his concepts definitely apply to any sort of real estate, whether you’re a passive investor or an active investor; you can even apply these things to your full-time job, and the idea is focusing on how to reduce the amount of time you spend on those low dollar per hour activities, and outsourcing those and spending more of your time on those high dollar hour activities, to the point where you can drastically reduce the amount of hours you’re working every single week.
So that was basically the main focus of the episode. Lots of examples, lots of specifics, lots of step by step of how it worked for you, how it worked for others… But then also you gave away the free book, you said https://www.scaleordiebook.com/, your free 16 stages. The Navigator at https://www.realestatebusinessgrowth.com/. So make sure you check out both of those resources. What was the podcast again?
Lars Hedenborg: http://thebusinessfreedompodcast.com/.
Theo Hicks: http://thebusinessfreedompodcast.com. Lots of resources.
Lars Hedenborg: Theo, can I send you a PDF that you can share? I want to send you the time study exercise. It’s literally just a PDF for anyone that’s willing to take the challenge. I promise you if you print this document out and do what it says, and then shed off the administrative stuff and just do it once a quarter, your life will be changed forever.
Theo Hicks: I will definitely make sure we add that in the show notes. Thank you for sharing all this free stuff. We love free stuff here. So Lars, thank you again so much for joining us.
Best Ever listeners, as always, thank you for listening, have a best ever day and we’ll talk to you tomorrow.
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