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Episode 12 Transcript
Welcome to the get rich, slow podcast. This is the stuff we and our expert guests Wish we knew a decade ago to get the most out of our financial life will provide you with insight into wealth building activities and practices that can expand your net worth exponentially. get insight from top professionals who will reveal how to build wealth the long way, work smarter, not harder, and identify your financial blind spots. With over 25 plus years of experience as licensed real estate professionals and a long track record of winning for their clients. Robin Adrian will teach you what it takes to be an everyday real estate millionaire.
Welcome back future millionaires to the get rich, slow podcast. I’m your host, Adrian Schermer here with my co-host, Robert Delevan. Good morning, Rob. Good morning. Good morning. Good morning. And today we’re going to touch on pretty interesting subjects. Rob, why don’t I pass the baton to you?
Okay, so basically, the concept for today is working with the best people. And the reason why I want to explore this with you, Adrian, and just fair warning to our audience, we’re probably going to rabbit hole a little bit here, I have a few things that that I that have been bugging me. Or just things to share. And we’re in a position where Adrian and I, we were pretty good at what we do. The goal of this is not to be braggadocious or bring attention to ourselves. But it’s this concept I want to share with the audience of you should be working with the best people. Because in every industry no matter what it is, and mine happens to be you know, real estate brokerage. Adrian happens to be in lending, brokerage mortgage brokerage, and we work with all these other professionals, bookkeepers, CPAs, and financial planners, I think that’s what gives her maybe you more than me even the expertise to talk about this because you work with so many vendors that you know, firsthand what it means to be burned by someone who doesn’t know what they’re doing, and also what it means to work with someone who truly understands their craft on a deeper level. And I couldn’t do this job without you know, especially having this little tagline which, you know, people that are watching live can see it but it’s making everyday real estate millionaires every day is kind of my personal goal, mission tagline, that sort of thing.
And, frankly, my piece of that is minimal in the growth of people’s wealth, because, frankly, I’m following the directions of like the financial planner and the CPA. And that all gets fed by data book, you know, bookkeeping and insurance and, and mortgage and, and so on. So more than anything else in my industry, you have to rely on all these specialists, right? So I would say don’t even get me started on all the contractors that we work on when we’re doing these real estate transactions, right?
There are just dozens of them. Yeah. And we’re consistently looking for the next great relationship to add to the stability of all the relationships we already have. So getting back to, you know, trying to get to keep to the point here is, I’m in a unique position to know, just based on the volume of transactions that I do to know what is a top-of-the-line mortgage professional. So now I’m, I’m, you know, tooting your horn here, Adrian. Yep. But like, there’s a reason we missed each other for this. Exactly. It’s not accidental, because there is just some Excuse My French, some just shitty professionals out there that, frankly, give the term professional, you know, a terrible name.
Yeah. And, I wanted to tell you just a little story to set this up. Okay. And it’s a real estate transaction that we’ve been able to get into recently, my team working hard. It’s the client, a mutual client of ours and a friend of ours in our sphere, her parents, and they’re moving into the area. We’re for our audience. We’re in the Portland metro area, they’re moving into the area, and we were able to get them into contract recently in the last few weeks. And it was nice because it was an all-cash transaction. So it’s one of the few that I didn’t work with you on Adrian because cash people Yep. Which is great are fun, too. I wish I could have, oh, they’re a blast, right? And they want to have a house in the area so that they can live close to their grandkids, which is so much fun to be part of.
Yeah. So we’re out shopping for homes with them. And it wasn’t me it was Rachel, one of my two, you know, right-hand people and she’s out with them and she shows them the house, they loved it. And we got into contract in, like 620 range. And we’ve got and we valued the house at the very low end, like in the high fives, and as much as the mid sixes. And that was based on square footage. Well, square footage doesn’t tell you bedrooms, bathrooms, all these other details. So this brings me to my point, this listing agent, had it listed as a two-bedroom. And in this hot market, things don’t sit on the market. And this house was priced at 630, which was well within the range where it should have sold and popped off the market in days. Right. And it depends on the market for more than two weeks.
Nobody was going to see this house because it’s only a two-bedroom. And we’re in an environment right where people that’s it. That’s the data, you’re not going to right-call up and go Hey, are you sure that this house the square footage doesn’t quite match? Nope. Right? 2700 square feet. Nice mistake, but only two bedrooms. The house is a three bedroom. These clients happen to be retired. And they didn’t care if it was a two-bedroom. They’re moving up from Arizona and the market in Arizona is often like two, two on suites. And, you know, one for the guests and one for the owners. And that’s what it is. Exactly. So they were looking for a two-bedroom they didn’t care about three bedrooms, four bedrooms, so be it but they wanted 2500 to 3000 square feet.
So they looked at it they saw this is great. It was the best property they saw for that price point by far. And jumped in and we got into a contract like immediately. No competition. Awesome. Very, very odd. It’s a three bedroom. There is no way this real estate broker has been to the house. Oh man, much like there’s just no way in hell this guy made that mistake with it unless he was just told by a homeowner that didn’t realize the third bedroom they use as their office. But it was a legitimate bedroom. How can you be serving your client legally per the state of Oregon? My responsible I am fiduciary responsible for my client. Yes. So how am I being fiduciary responsible for my client? If I am making a mistake that is probably costing them between 25 and $50,000. Yeah, that’s what it translates to. Yeah.
So my point is when at any stage, the exactly tiered process of verification that’s supposed to, but doesn’t necessarily have to take place. And this is kind of that thing where we see a lot of professionals can coast. I think the analogy of the airline pilots, one of my favorites, planes practically fly themselves. The reason pilots make you know, six figures a year is because they know what to do when all of the one in 1000 chance shit goes wrong situations happen. And that’s, again, the mark of a professional. And that’s the mark of experience in a field. You know, I don’t want to necessarily put down I know, there’s a lot of people getting into something new. And I don’t want to tell our audience never to try something with someone new.
But there is something to be said about, you know, someone who just jumps into a field and does it like a lot of real estate agents is a great example. They just jump in, you know, and they are immediately real estate agents, the brilliant ones work as part of a team, they build themselves up to that level, and they lean on the expertise of someone like you, who’s got 20 plus years of experience, and has probably been around the block a few times. only 15. But I’m sorry. Yes. And, of course, is magnified in an industry like real estate young, two ways. Number one, the barrier to entry is 150 for our online course. Right? Yeah, I mean, and then you got to go take a test. And I think the number is either 70 or 70 title that Yep. Yeah. Like, it’s, it’s stupid, how low the barrier is. And I won’t go down that rabbit hole about how much I how I share there should be you know, 10 times the amount of barrier to get into this field, but a different axe to grind.
But the second thing is there’s the low barrier to entry and it’s incredibly high stakes. You make a mistake like this. This is a 510 20 $50,000 mistake. Very, very simple. Okay, in my scene much worse. in my industry, I’ve seen lives ruined crazy. Absolutely. It’s a handful of times, but it happens. But it’s such high stakes. And there’s such a low barrier to entry. You’re almost setting yourself up to fail in my industry. Yeah, but Think about, you know, if you make a mistake as I don’t know, like a gas station attendant, right, and you put diesel in an unleaded gas tank.
Yeah. Okay, that’s suck. Yeah, we’ve heard the oil plug. It’s it 100 to $1,000 staying? Yeah, this is what would work alongside. Exactly, you know, horrible for that near a gas pump again. versus our like in our industry, it’s crazy. And we make a mistake like that. Well and yours is even worse, frankly. Because Yeah, if you make a mistake we get of the deal all queued up, let’s say we get this deal. We’re 25 $30,000 below market where we think we would have if we would have been competing. Yeah. So our buyers getting a great deal.
The seller, you know, they’re still doing well, they bought it several years ago, and it’s appreciated probably double in the last day might not even know that this mistake? No, they probably don’t. It was swept under the rug. Exactly. And they don’t do didn’t do their due diligence on who they hired and all that sort of thing, which we’ll get to here in this conversation. If we ever get to the point. You know, in your industry, it’s, it’s okay, we, we queued this up, they’re getting a good deal. They’re moving because their life is built around this piece of real estate. Yeah, you get to the end. And this has happened many times with other mortgage brokers, and they didn’t do their homework. And you get right to the end. And they’re like, oh, sorry, you guys are so well. You have all of these issues. And the question always is asked, How the hell did we get to an end of a transaction?
When all this information should have been found out up front? And no, it means you do your homework. But I mean, there’s a reason why you’ve been like consistently the top performer in your branch and in, you know, in your region and that sort of thing within your company. Because you do the homework. And sometimes you do the homework and deals go through its due diligence is what it is, right? It’s doing the work upfront. And there are, unfortunately, a lot of people in my industry, younger, myself included, who were operating on the principle of let’s throw shit at the wall and see what sticks.
But we learned pretty early is that you burn bridges, you burn relationships, and some people I’ve run into 20 plus years into the industry who are still just operating on that principle because their tongue is sharp enough to get them you know, another person to send them for at least a few months until they burn that bridge out. And hopefully, that brings us full circle here, which is ultimate, you know, so what’s the solution? Rob? And I think, you know, so be on the same page on this one. So I’ll speak to my industry and then I want to speak to like the financial planning industry, right? Yeah.
So in my industry in my sample sizes, Portland and feel the free audience, please check my numbers. I’m getting information from a lot of different sources, but this one, in particular, is from a gal named Tiffany Larsen, who will have as a podcast guest here, she runs a magazine, and it’s called Portland real producers. And it’s geared towards real estate brokers. And frankly, there’s over 10,000 of us in the Portland Metropolitan Association, realtors, and then there’s close to 20,000, I believe is the number now in all of Oregon, but she focuses on Portland, and she has a magazine and it’s the top 500 producing agents by volume in Portland. And she threw a number at me a couple of weeks ago, and it was the top 500 agents in the Portland market. closed by volume 91% of all sales.
Yeah. Okay. For reference, we had 910 1000 agents. Yeah, I mean out of this isn’t what 500 out of 600 You know, this is like the top 500 this is that give or take the top 5% of brokers the in the region. There’s basically that nine 9% market share that is being fought over by the other 95% Yeah, and the top 500 producers according to Tiffany again with the top producer’s magazine, are controlling 91% of the market share. Now this cannot accident and we’ve talked about this off-air many times is yes out of those top 500 there’s a bunch of arrogant assholes, right? And there’s some ego but they’re doing it from a standpoint at least have they have a ton of education training experience. To get to that point, right? Yep.
It’s an excellent arrogance. I’m still not a fan of it. But of course, you know, it’s an attitude that comes sometimes from experience. Sure. And there are ones that are frankly callous, and maybe don’t do their job super well, just because it’s not a big deal to them anymore. But I would say that’s very much the minority.
The vast majority of the producers are there because they work their asses off. Yeah, I see those items rolling out at a time, right over and over again on contracts. Right? You know it, you see Oh, man. Good. Day, it’s, it’s them. Great. I know, we’re not going to have amateur hour over here with a missing bedroom. Exactly. And it’s just, it’s that concept. So what I’m asking or encouraging the audience to do is do your homework, do your due diligence, talk to and that’s a Google search, although that is great. Reviews are can be okay.
But they can be very skewed especially in certain industries, right? Or just right with negative reviews, because only the complainers get on and do reviews, our industries, all right, we got, you know, a pretty good review basis. But a lot of the times it’s it, there’s a bias, it’s hard to tell if someone’s great, just from one transaction, and what I encourage people to do, and again, I can only speak to my industry, but literally, you can apply this to every other industry, right? Or just about every other service industry, and, or personal, you know, financial wellness, like those sorts of things.
But a lot of others, I mean, contracting anything else. But look at the numbers. Most people are part of an organization, I have the Association of Realtors you know, the Portland, the state, and the national level. I’m Adrian, you have a similar. We’ve got the nmls. My public record is out there. Right? We are by nature of our industry and what the CFPB and what other organizations in the government have done, we have to be transparent.
That’s good because it’s, it’s good for the consumer, right? And you wouldn’t necessarily think of this as a consumer. But if you ask around, you probably could get this very quickly reach out to a title company, and figure out how many trends I’ve done in the last year, versus like versus what I tell you, right, yeah. And show like, look at the statistics, ask the person for statistics. What have you done this last year? What was your favorite client story? What were your sheer numbers? How many people do you have on your team? What’s your focus, like, you can ask these questions. And if people are not being straight up with you, or are fronting or trying to puff themselves up, you can figure it out, if there are pauses in their responses, and it just doesn’t flow.
You’re I mean, to a degree, you are playing a little bit of poker, and, like, know that, and have that conversation. And if you feel like there’s like dig into that, don’t be afraid to you’re hiring this person, you are absent, even if you’re the buyer side, you’re not paying for this person. You are though because you rep or you are you hold the carrot, which is the transaction. So Exactly. Some people find a realtor, I’m gonna use your job as an example. And then some people interview realtors, right, when you find a good one, you keep using them over and over again. And the thing is where I would, I’m not gonna disagree with you, because I think this does work in all fields. But you know, you got a restaurant, I’m gonna go to that restaurant seven, eight times, I might have one bad experience 10 good ones, I’m gonna, you know, aggregate that into a review.
On Yelp, there are 40,000 reviews, by the time restaurants are out for a year, certain industries lend themselves to that kind of data just being super available. But especially when we get into the financial ends of things, you know, on average, a person needs their real estate team once every seven years, six or seven years, right? These are therefore industries where you can have this positive feedback loop, you have clients who had a great experience because it was another one of these just coasting transactions, it could be that house that had the right data on the public record, and the agent didn’t check it. But they didn’t get burned that time, right?
This agent who’s lazier will eventually keep running into those issues where they’re just not doing their due diligence, that two-bedroom difference is a huge chunk of change. And it might not even be taught by the consumer. So I think you know, each one of these indicators, but this is a huge one. And I think you’re right. Success does not mean that someone is good at their job, but it is an indicator because you’ve got to it the full circle.
Why are they doing so many transactions? Are they just really great at marketing? Or are they like us where we, you know, you and I have built our entire businesses on referrals, I’ve got no purchase leads that got me the awards that sit behind me. It’s based on being very good at what I do. And then people like you, with experience trusting me because you happen to have that litmus test, you have a taste for who’s good or who’s bad. And so that’s the other end of this, I think for me, it’s the referral once you do find someone who is exceptional, who shows and demonstrates knowledge and value to you, which is another mega indicator, right?
The ability to just talk, you know, like you’re discussing the weather or anything that we’re so used to every day, it comes to them like a natural thing. And then taking that person’s knowledge and saying, Who do you? Who do you trust to do jobs A, B, and C, if I need someone to work on a roof? I don’t go to the phonebook. I call up Rob Rob, who’s doing the rooms well right now? Right. And so, to wrap up, I’ll tell one last little story. And then we’ll end this episode.
My financial planner, who I refer to all the time, I won’t mention a name, because I’m going to talk a little bit about statistics here. Okay. And financial planners are regulated heavily. And they can’t necessarily talk about the statistics, but I can because I can, you know, I don’t have those same requirements within his industry, right? So same person I used to Yeah, exactly. You know, you know, we all know in our close circle knows exactly who we’re talking to, or about. But he, and I was in a conversation. And he knew this person well, and it was a financial service back in person. And he asked them, hey, what was your average rate of return this last year for your clients? And the market was roughly for 2020. And he was talking about 2020. And it was roughly like 16 17%, which is by all, you know, General historical market year. That’s fantastic. Absolutely. Right.
It’s a bit confounding if we think about all the things that went into that year, but Yep, that’s and there was really, there was a little back and forth. And a little bit of competition there. But his he any he chuckles and you know, they’re talking back and forth. And of course, I’ll show you, my person. Show me. Exactly. Okay. Okay. What was yours? And he was almost 40%. Yeah.
So he, slightly more, I don’t know or right, play that down to, which is a no, absolutely like you, but but but let me explain why. You know, like, he’ll defend it. He won’t go. Yep. That’s a typical year, which is also, you know, humility is a factor here. Sure. But he’d But literally, he doubled What a great market did, yeah. Okay. And he did that for basically all of his clients. And that’s the person that you want. You want that professional that doesn’t do the industry standard, which in my industry, is standard is pretty horrible. Right? Yeah. And frankly, to a certain degree, you’re exactly Well, they don’t that’s the problem. They don’t even show up.
Yeah. And the standard is to write down someone’s information and send it to underwriting Hope it worked. Right. Exactly. And if it works, great, I get paid. And if it doesn’t, it doesn’t, you know, and it’s the same thing, you know, if there’s just that, that callousness of great, I mean, you know, it worked, I made some money. But that’s, frankly, the standard in his industry, like, if the average is 17%. That means the, you know, some people did less and there are people did more he doubled the average. But what about the bottom 50% that you work with?
People are working with those people, those people are making living, they’re not making a great living typically, but they are making a living. So if I can close up with this message, is to do your due diligence. I mean, you guys have our comp, our contact information, you know, if you’re not from the area we can talk you through whatever our biases are, you and I because we do a great job, of course, but other people can do that. But work with that person. That double Yeah, we’re especially at this level. Yeah, especially at this level. You’re not going to your friend’s new food cart. You know, this isn’t just something for pure joy. We did. There’s joy in wealth. We’ve discussed this but you know, this is again, it this guy could have been someone’s Uncle, you know, and they went, Oh, yeah, go Bob does realty just go with him.
Then Bob’s, they’re just coasting because he just gets that, you know, once every couple months, that’s enough money, you can make good money with just a circle of friends and family and this especially in the financial world, like we know, you know, our clients are worth a lot to Ross individually and it’s worth it worth this is one of those times where you can kind of pump the brakes a little bit and go, I’m gonna make a choice not I’m just gonna find someone who does this right. Right now. We’re taking industry. And that’s it. So do your due diligence we know, we can help with that talk if you’re in the real estate industry talk to a closing attorney or a title company love the title that’s an unbiased third party, it’s insane.
No, they see every transaction. And if you call them up and say, Hey, let me float a name by you do you know? Can you pull some data? Can you pull some statistics, I use the data I’ve asked for that exact get that for every one of my agents that I work with close, right, I see the growth and I see people performing. And I make my decisions off on that. Right? Who I work with who I want to refer to the same concept that I apply. Exactly. So just do your homework. And that’s basically what I’m saying. But try to find those top people and then refer the hell out of them. Right? Because what happens is, is everybody complains, it’s always like a, there’s always a negative connotation to this is Oh man, the rich get richer, right?
Well, to a certain degree when it comes to your home sale or purchase. Let’s make sure that the rich get richer concept applies to you. Because your house should be listed as a three-bedroom, not a two-bedroom, and should be competitive, not Hey, we got one offer in two weeks. Yeah, that’s a conversation that’s out in the world right now.
That’s you know, about maybe the privilege that people have or their luck beginning luck. And that is accurate. There is, unfortunately, you know, there’s chaos out there in the world. But a big part of that is also that there are truly lots of situations where hard work and talent and knowledge and putting that extra effort in begets you more business, and there are lots of people organically growing that way. And that’s the people you want to work with the people who are growing and who are making money because they are very, very good at what they do. We’re fortunate enough to rub shoulders with quite a few of those people, which was one of the big spur moments, for this podcast, right? I mean, we’re with so many professionals that I’m just, you watch them grow and it, it’s it they make it seem effortless, but it’s very much a result of, of the things that you don’t see playing out, it’s all that groundwork laid in the background. So right, it’s a beautiful thing to see when you have the opportunity that Rob and I do where we work with so many different fields, so many different professionals who serve as our clients as well. And when we refer if it’s our name on the line, and you know, mistakes happen, you can get a referral and that person can drop the ball.
We have the opportunity, at least though to have more tests to go off of I’ve worked with Rob through, and we do dozens of transactions every year, that gives me an I can be very solid when I say Rob and his team are one of if not the best realty team in the Portland metro area. I don’t have to hesitate. It’s great, it’s fun. You can hear the honesty. You want to be in a position where you can trust a handful of people. And then you know, let the tendrils of their influence help you out. Right. Well, I appreciate that. And like you said at the beginning of this conversation, it’s no accident that we work together.
So yep, we don’t need to toot our horns anymore. That wasn’t the point of this. But thank you. It’s just about doing you know if we can close it with this is work with the best. Make sure you’re working with the best. ask the questions to do the end, do the due diligence to ensure that you’re not getting
28:56 in a high-stakes situation, frankly, screwed over. Yeah, so let’s leave it at that.
Adrian 29:03 Oh, and someone you can trust and then trust them. It’s less work, honestly, less work to do that work upfront than to then to feel like you’ve got to check someone’s work constantly. Once you get someone like that. You’re going to be able to just go into that meeting and say, that’s what I’m supposed to do. Okay, that’s what I’m going to do. Thank you. I’m done. Love it. All right. Thanks, Adrian. Thanks a lot, guys. We’ll catch you next week.
Outro 29:28 Thank you for listening to the get-rich, slow podcast. If you like what you learn, please subscribe, rate and review so we can grow wealth for even more families.