Brian Ellwood, a real estate entrepreneur and author of Fire Yourself, virtually flips 70 Tennessee properties per year from Colorado and owns and manages dozens of rentals. On today’s episode of Thought Leader Thursday, Brian shares tips on how to hire your own acquisition manager, how to manage and compensate them, how to avoid hiring mistakes, and much, much more!
What You Will Learn About Brian Ellwood – Fire Yourself:
- Why Brian wrote Fire Yourself
- Brian’s secret weapon for getting lots of deals (and free time)
- Why Brian initially decided to hire an acquisition manager
- A trick to look cool if you don’t have an office
- What Brian was looking for in an acquisition manager
- How to narrow down the candidates for a job position
- How to stop your acquisition manager from doing deals behind your back
- What type of person makes a good acquisition manager
- How to compensate your acquisition manager (hint: it’s creative)
- How to hold an acquisition manager accountable
- The mistake that caused Brian’s one bad hire
Whenever you’re ready, here a few ways we can help:
Work with me One-on-One
If you’d like to work directly with me on your business… go to REIAce.com, share a little about your business and what you’d like to work on, and I’ll get you all the details!
- Would you like to meet in person? Our next live event is right around the corner! Go to EpicIntensive.com for the details.
- Become an Epic community member at The Epic Real Estate Investing Show
One of my favorite things to do is share with investors the latest and greatest tactics and strategic friends I make. I do it every week and you can listen in by subscribing to The Epic Real Estate Investing Show podcast on iTunes – Click Here.
- Grab my book, Epic Freedom ($1)
I frequently hear from people looking into investing in real estate for the first time, “How long is it going to take?” So much so, I wrote a short book about the 2 easiest and fastest strategies to a paycheck in real estate. You can grab a copy for $1 and I’ll pay the shipping – Click Here.
- Join our Badass Investor Program and be a Case Study
I’m putting together a new Badass Investor case study group at Epic Real Estate this month… stay tuned for details. If you’d like to work with me on your real estate investing, go to FreeRealEstateInvestingCourse.com to get started.
- Also, check these out:
Thank you so much for joining us on this episode of The Epic Real Estate Investing Show! Please subscribe to the podcast so that you will get instant access to our new episodes.
If you found this podcast helpful, please take a few minutes to leave us a positive review in iTunes. Your reviews help to improve our search rankings so that we can spread the love. Thank you!
Speaker 1: This is Theriault Media.
Brian Ellwood: You hear so many people that just want to systemize and automate everything, but they’ve never done any of the things that they want to systemize and automate [crosstalk 00:00:13]
But when they plug someone to that role, they have no idea what doing a good job looks like.
Matt Theriault: Hello, I’m Matt Theriault of the Epic Real Estate Investing Show and this is Thought Leader Thursday.
So today I’m joined by a real estate entrepreneur born in South Carolina, raised in Tennessee. After a short stint in the corporate world, he started his own business, flipping houses and buying rentals. And after systemizing the business to run without his physical presence, he tested it through by moving to Colorado, where he currently lives, and his Tennessee business continues to thrive today doing over 60, excuse me, 70 fits and flips per year, and owning and managing dozens of rentals.
All from afar, doing this all virtually. So, please help me welcome to the Epic Real Estate Investment Show, Mr. Brian Ellwood. Brian, welcome to the show.
Brian: Thanks for having me Matt, I’m excited to be here man.
Matt: Yeah, I’m excited to have you here as well, again. You’ve been here before, and, we don’t really need to go through the backstory again. I specifically invited you for a specific reason. That is the idea of investing virtually. It’s thrilling to people, and they find it so exciting.
And specifically when it comes down to investing virtually, and doing it successfully, one needs a team. One can’t do it all by themselves. And at the very least, one of those key team members is your acquisition manager.
I have a few of them around the country but I’ve acquired all three of them, four of them, in very different ways, so I don’t have a system that’s I’ve had to go about it, and you do. You actually wrote a book about it, right? Fire Yourself, got it right here.
It’s; Fire Yourself: How to Overcome Your Competition, Reclaim Your Freedom, and Triple Your Revenue in the Next 12 Months By Hiring a Rockstar Acquisition Manager. That pretty much says it all.
So a very niche book though, that is a very small audience. Why did you write this book, Brian?
Brian: I wrote this book because I felt like it’s the biggest need in a lot of real estates investing businesses. A lot of people want to get into real estate, but they don’t want to answer the phone all day, talk to sellers, sit around analyzing leads, drive to appointments and sit kitchen tables negotiating.
Me personally, I was never too thrilled about doing any of that stuff, as a real estate investor, I honestly just wanted to get to the passive income as fast as possible. And, I did it on my own for years, and never really learn to enjoy it.
Once we hired our first acquisition manager, not only did our revenue triple, but we got back tons of our free time. And all the other investors were like, wow, how are guys finding so many deals, how you getting so many contracts.
I saw that to be our little secret weapon, was the fact that we just had a guy who was grinding all day, making offers all week. Because I know like you as an educator, you teach your students, make more offers, make more offers, it’s like the key to everything right. Well about hiring a guy whose only job is to make offers, you know what I mean?
So, I saw it as a way to explore real estate businesses. Everyone talks about marketing all the time, and it’s really important. But, what you do with the leads, is just as important, otherwise, you’re wasting your money.
So, no one had really … I learned this you know, what’s in this book from you and John Terry and Joe McCall and lots of other guys. I just sort of decided to put it all into a step by step format so that people could follow and really see what the power of it is.
Matt: Super. So I’m glad you did, because I’ve been debating on how I was going to put this part into my academy for so long and then, you just came and did it and I said, okay, great, I’m just going to have you on the show and share with people how to do it.
You’ve kind of already said it. What was life like before the acquisition manager, you know, a big part of the business that you didn’t enjoy doing, and after hiring that acquisition manager, kind of everything changed for you?
I guess, tell me, that what was the process of finding that particular person, and how was it different of how you’d go about it today?
Brian: So, we first did it, I had to give credit to Joe McCall, because he was our coach at the time, like a one on one coach. And he was looking at what we were doing, he’s like “Guys, you know, you’re running around like crazy, you can’t make any more money, you have no more time. Why don’t you hire an acquisition manager? You guys are going to dinner with your girlfriends and your phone’s ringing 40 times because the direct mail just hit.” You know it was ridiculous.
So, we took his advice, people were paying him good money and, even though we didn’t want to, we ran ads on Craigslist to hire an acquisition manager. We had never hired anyone before. We hadn’t even hired an office manager. Actually, we had a VA, but that’s a low risk $5 an hour hire, this was serious … We were going to give somebody control of the most important part of our business.
And so, we got a bunch of applicants in on Craigslist, we went to the nicest … We didn’t have an office, so went to the nicest hotel in Nashville, and bombed their lobby basically. That’s a little trick right there, if you don’t have an office but you want to look cool, just go to the nicest hotel in your city and do the interviews in the lobby on some nice leather couches in the corner. People think you’re pretty cool and you’re not even staying at the hotel.
So that’s what we did, and we lined up the candidates. I was more nervous than they were because I had never even interviewed anybody before. And we picked a guy who just seemed to share our values. Right out of college, really hungry, no sales experience, no real estate experience, and we just kind of threw him to the wolves.
So even without a formalized process, it still worked. Just replacing ourselves and, even though he was not as good as we were at sales, he outperformed us three to one just based upon the sheer amount of volume of activity that he was generating. Because we were just waiting on like the laydown deals you know, the easy ones, we’d go on the appointments. He was going on every appointment.
So he performed us three to one, and that’s why we tripled our business because he was just simply making three times as many offers, three times as many contracts et cetera.
Matt: There was more the volume than the skill upfront at first.
Brian: Yeah, absolutely. I think volume is an easy way to explain … You can dial in the skill of negotiation tactics later. But in the beginning, it’s really just about increasing the volume of offers and appointments.
Matt: Right. [crosstalk 00:07:26] [inaudible 00:07:25]. So you place this ad on Craigslist, give me the gist of what that ad said, who were you looking for?
Brian: In the book, I have a better version of the ad that you guys can use, just put your own business in there. But it just said something like, seeking rockstar outside sales rep. Local real estate investment company seeks … And then it might have said, 40K a year plus, plus, plus you know, signifying that they could make lots if they really blow up our business.
And then in the description, the job duties and some of the values and things that they would need to share.
Matt: So how many applicants did you get for that? A lot was this just like the one guy?
Brian: We got probably 70 to 100 applicants.
Matt: Just from Craigslist?
Brian: You know, we might have put it on Monster or Indeed, I can’t remember exactly where we put it. I think we might have boosted it, and we got a bunch of applicants. We used the hiring technique that kind of Shawn Terry kind of came out and, I think he was the one who kind of taught everyone where you tell them, send your resume, fill out the survey on Survey Monkey, and send us a YouTube video. [crosstalk 00:08:51] okay, we still use it for everything.
So we only had to look at five to ten videos out of those 70 to 100 resumes and that-
Matt: Isn’t it amazing how that narrows them down so quickly?
Brian: It’s the best thing ever, and you narrow people down, even more, when you watch the videos, because you say, no, not working with that guy.
Matt: Yes, yes. It’s like you take 80 that are all looking for a job, and then only 10 of them are willing to burn any calories whatsoever to get the job, and then, they go ahead and they just kind of self-select them right out of it with their video, but go ahead, it’s a [crosstalk 00:09:29]
Brian: I tell people all the time that are looking for jobs in the normal workplace. I’m like, make a video, why are you just sending in your resume everywhere. You would totally stand out from the pack.
Matt: You know we just placed an ad for the person that will be editing this video for us, we hired a video guy, and that we got in a week through indeed.com, we got over 400 applications for this position, and we put the little 10 steps in there with a little … We had them go take the disk test and then record the video of what they felt about the disk test and then they had to send us their video. And I think out of 400, we narrowed it down to like 15. Just like that. It was amazing.
Sorry if I’m interrupting-
Brian: No, no, that’s great, that’s a good segue to the next thing I was going to say is that, in this book, I’ve really formalized this process where I go through all the steps. Because really you shouldn’t just hire the guy that feels right, there’s a lot of different interview questions you need to ask and see how they handle pressure.
Like for example, no matter how much you like your favorite candidate, at the very end, you have to tell them, you know what, I just don’t think you’re a good fit for this job. You have to say that at the interview and see … If they hang their heads and say, alright well. That’s what they would do with the customer when they tell them no in the negotiation.
Now, you have to do things like that. And then we do a Colby test, a disk test. Looking for a high DI, looking for a high quick start, things like that. Guys who are going to be good at sales.
And then we do a really cool thing where, you see you narrow down to your top two candidates, give them a week and give them each 100 of your old leads that are kind of dead, and see they drum up. Hey call these people, set some appointments, make some offers. Just like boom.
You can even pay them a couple hundred bucks for that week or whatever, so they are not working for free. So that’s a little contest we had to the very end of this process that really … Like we just hired a Facebook ads manager actually, we did a six-week contest between the two top candidates. Gave them each a thousand bucks and said, bring us some leads.
We saw what kind of ads they ran, we saw how they communicated with us through emails, we the actual KPI’s that they ended up with, ’cause you know Facebook shows us everything. You’ve got to create a little contest to anyone you hire to see how they work before you hire them [crosstalk 00:12:03], it’s true what they say.
So really this book is just like what I would do if I did it all over again kind of book in the process we use now.
Matt: Sweet. So once you’ve got your winner, how should you, or how do you compensate, that’s a big question. What’s the agreement arrangement, what’s the paperwork look like and then how’s the compensation look?
Brian: Okay. I want to say one thing because I get this question a lot ever since I wrote this book, is people want to hire, they read the book, they’re like, oh, I want to hire an acquisition manager, sounds awesome. I wouldn’t have to do any of that stuff anymore.
But Brian, I don’t have enough leads yet. My business isn’t big enough to hire an acquisition manager. So as far as compensation, the first thing I’ll say is that you can be creative. You could hire a part-time acquisition manager who has another part-time job while your business is still small. You could hire an acquisition manager who also functions as your, I don’t know, office manager, or project manager. It’s not ideal, but if that’s what you have to do to be able to afford this position, you can do it. You can get as creative as you want, you’d be surprised what other people will agree to if you propose it.
So, to answer your question more generally though, it’s like eight to fifteen percent of the gross profit on a deal, that’s … And people ask questions like, well what if the deal is small or what if I’m going to keep it as a rental for a rehab. If we’re going to do a … Just keep a house as a rental, I usually just give the acquisition guy 500 bucks, and they’re happy with that. Because a lot of times, maybe a house you were going to keep is a rental, you wouldn’t have otherwise put on a contract in the first place. It only works long-term cash flow, it’s not like an [inaudible 00:13:50], so that’s 500 bucks they wouldn’t have gotten.
You can go the flat fee route like five hundred or a thousand or fifteen hundred depending on the deal size, or you can go percentage. I would say don’t let that part of it hang you up, just create a pay structure that you feel good about as a business owner and put it out there.
Matt: Okay. That’s pretty much the answer I give as well. [inaudible 00:14:18] you get what you negotiate right?
Brian: Yeah, exactly.
Matt: Cool. The idea of this is so you don’t have to work so much right? Like you can delegate a lot of this time-intensive sweat equity type work. So how … What is your management of that person look like, and specifically why I’m going with this is because it’s the frequent question that we get over here is, how do you protect yourself from your acquisition manager doing deals behind your back, or, just slacking on the job. How do you monitor and manage them?
Brian: That’s a good question. I haven’t gotten that one before but, I do in the book talk about how you should have your acquisition manager sign a non compete. It says once they quit working for you, for the next two years, they can’t do similar [inaudible 00:15:13] activities in your immediate market. That discourages them from secretly learning all of your systems and going and doing it.
Another thing I would say is that, if you follow the hiring process and you hire the right type of person, they’re really going to be like a sales type person, not more of a visionary entrepreneur type person. There is a difference between the two. Not everybody has the [inaudible 00:15:35] to go out and start a business. They just want to be riding and [inaudible 00:15:43] like a certain, they want to be pigeonholed like in a certain position. That’s a bad word but you know what I mean so that they can just focus and drive it to the top.
You need to manage this person, one of the other part of the question you asked. You need a sales manager, doesn’t have to be you as the owner. If you can afford someone else. But you don’t just hire the acquisition manager and just kick back. Like every person in any company, they need a regular once a week call for at least an hour, look at their KPI’s, they’re held accountable, how many appointments did you go, how many offers did you make, what kind of things are you struggling with, do we need to do some sales training or whatever?
You need at a minimum that … Maybe you can listen to recordings of their appointments, you can have them wear a little USB flash drive thing around their neck and records the whole time they’re with the seller, and you can listen to those, and that puts them on the spot.
Because it’s like, hey you didn’t follow the sales process, you jumped right to price, you were supposed to ask them about their pain. So, yeah, you have to do that. You become the sales manager when you leave behind the acquisition manager role.
Matt: So you’ve been doing this for a long time. How many acquisition managers have you hired do you think?
Brian: Probably only about four.
Matt: Oh, okay. Any big mistake that you’ve made that you make sure I’ll never do that again?
Brian: You know we did hire one guy who didn’t last very long at all. But, I can’t honestly tell you why we screwed up. I think it was … You know what, we didn’t follow the process, that’s what it was. We didn’t give him any a personality test, we didn’t make him do the little contests I just described.
It was more of like a knee-jerk decision, or it was just like, oh crap, we need a new acquisition manager, his guys are going to be out of town for a month. What about that guy, let’s hire him. It was very sudden, but it wasn’t intentional.
Matt: Got it. So stick to the process, stick to your standards, and then hope for the best.
Brian: Yeah, absolutely. You have to be disciplined when you hire. Everyone wants to hire quick. Because usually when someone’s in the hiring mode, they’re in some kind of pain they’re trying to relieve themselves of. So they just, oh let’s just do it, this guy he’ll be better than nothing.
That’s bad. You need to budget 30 to 60 days to make a good hire. Really if you want to go through a full process. If you bring someone into your company and is not a good fit for your company, it disrupts everyone else in the company. It pisses everyone else off because they don’t work well with the culture that you’ve already built. It’s disruptive, so you really have to be careful when you make hires.
Matt: You know, one thing I’ve noticed recently, and I know you educate people and train people as well, that there’s always a big … And the reason you are on this show is because everyone wants to do this virtually. And what we found, we found two really interesting things, and this is probably in the last six months, ’cause we start dealing in some intense interviews and trying to really create solutions and create good fits for people, so they could work virtually.
And most of the time, everyone says they don’t want or they want to work virtually because they don’t think they live in a good market, is really what the big inspiration is most of the time. And then, after talking to them and getting down to the actual point, it really came down more to kind of how we started this conversation is, that, they really don’t want to do the work. They don’t want to get on the ground and sit across the dinner table and negotiate contracts and stuff like that.
So with that said, knowing that that’s kind of the consensus I have found in … Not over just one or two people, it was several, how important is it that they actually get out there and knock a few of these down themselves first before hiring the acquisition manager?
Brian: That’s a good question.
Matt: Or can you just go in with no experience, hire an acquisition manager and make it work?
Brian: I think you can. I think it’s probably better to experience the job at least for a short period of time. You hear so many people that just want to systemize and automate everything, but they’ve never done any of the things that they want to systemize and automate.
But when they plug someone in that role, they have no idea what doing a good job looks like. So I have found as an entrepreneur, as the owner of businesses, that it’s healthy for me to like be in the weeds for a short period of time, I get a glimpse of the day in the life of a blank, acquisition manager whatever, and then, I can relate to them a lot better when I manage them and stuff like that.
I think you can do it without it, but you are going to be missing some depth of understanding of the role.
Matt: Yeah, I think missing as far as training and helping them succeed, unless you find someone that’s already been successful doing it. And then in that scenario, you kind of lose out on your leverage as well in your own business, right.
Brian: That’s true.
Matt: It doesn’t take long to talk to somebody to know who the real people are. And, if you’re hiring the person that’s good at what they do, they’ll be able to tell whether you know what you’re doing or not right away. So I think leverage is also key there.
Brian: That’s true [crosstalk 00:21:09]
Matt: It’s kind of playing devil’s advocate a little bit, I like to discourage a little bit, I’d like to see people get the actual skill under their belt before they start training and delegating. It’s just going to make for a better outcome long term.
But, Love that you wrote this dude. If someone were to get in contact with you, what would be the best way for them to do that?
Brian: So, if they want the book, I give it away for just the cost of shipping at fireyourself.net. I have a podcast called the virtual real estate investing podcasts. My website is just my name dot net, brianellwood.net-
Matt: Two L’s.
Brian: Two L’s, yeah. So yeah, you can find me any of those places.
Matt: Super. Alright, cool. So, you can go to fireyourself.net to grab a copy of Brian’s book. He’s just asking you to pick up the shipping, and I’ll send that to you.
And then what I’ve done actually Brian is, I bought 10 of your books, and I wanted to give them away to the audience, and this is how you win. I want you to go to Instagram, I want you to tag brianellwood and tag epicrealestate, and I want you to create a post stating what you liked best about today’s interview. The first 10 people to do that, [inaudible 00:22:33] send you your free copy of Brian’s book, Fire Yourself, and that’s how you win.
Or, you just go and do it the easy way and go to fireyourself.net and pay for the shipping. [inaudible 00:22:43] is 100% okay with me, I’m sure it’s 100% okay with Brian.
Brian, it’s been a pleasure, let’s stay in touch.
Brian: Thank you very much, Matt, appreciate you having me on and giving those books away and let’s do it again.
Matt: You bet, and I actually bought those dudes, so I was like money that went into your pocket, just so you know.
Brian: Crap dude. Dinner’s on me. That’s good.
Matt: I got a book coming out at the end of the year, you can buy 10 of those.
Brian: I will.
Matt: I alrighty. I’m Matt Theriault, God bless to your success, I’ll see you next week on another episode of Thought Leader Thursday. Take care.