Webinars

Chris Watters, Watters International - First Three Key Hires To Hitting $1M In Annual GCI

Brian Charlesworth
October 8, 2020

[00:00:00] All right, everyone, we're back. Hey, Chris, how's it going?

[00:00:03] Hey, good. Sorry, guys. Little I'm working from home, my my four year old game, I feel like with a sledgehammer trying to beat my daughter.

[00:00:14] Chris has been in handcuffs, but by his four year old. But anyway, great. It's it's been a while. Chris, I used to feel like I used to talk to you, like, almost every day and and it's been too long, so it's great to see your face.

[00:00:27] Yeah, likewise. Glad to connect again.

[00:00:30] Yeah. So I know, Chris, I don't know that a lot of people know that you're the founders of Water Internet Waters International Realty.

[00:00:39] Maybe tell us a little bit about that to get started today, because I just think it's something that most people are not aware of. So, yeah.

[00:00:49] So basically, almost a decade ago I yeah, I had just gone through a massive business failure. I invested in a bar and restaurant in 2009 and it was meant to be just kind of a passive investment kind of deal. And it went totally bust. And, you know, I had always been super attracted to real estate because of how you get to learn a lot of different things like marketing, working with clients. You get to where a lot of different hats and it's exciting and fun and you don't have any limitations on your growth. And so in 2010, I got started full time in real estate and I did, like most people, open houses expired with trons and I started doing really well as an agent. I started selling a lot of homes and making really good money. And then one of the reasons I got into real estate was because, you know, there was this idea of like flexibility, of flexibility and like the freedom, this component of freedom. And like my first year and I'm like, holy cow, you know, I'm like on the phone till one o'clock in the morning. I'm waking up at 6:00, like I'm running on my hair on fire. And I'm like, there's got to be a better way of how to do this.

[00:02:03] And so I started going down this path of building a brokerage in the summer of 2011. And I recruited 20 agents in the summer of 2011. And after a year, the following the following summer in 2012, I was looking at our total number of closings and what we had done and profitability and stuff. And like, honestly, I was so busy and so in the weeds, like I wasn't paying attention to financials and like, I was just going, going, going, going. And I realized I made less money in year two than year one from a profitability perspective. And I worked even harder. And I'm like, this is this is not why I got into this business. And so I literally burned the thing down to the ground and I started implementing the Miria model. With that, they talk about Gary Keller, the book, and I started implementing that model. And I grew super fast. We I burned the team down. We grew to buy the the end of 2013. We did three hundred and twenty five transactions and that was with this very new team and that and when I looked between 20, 10 and twenty thirteen, we netted a million bucks and the business was radically changed.

[00:03:21] And we started having a book by all by reading Gary Keller's millionaire real estate agent book. You're going to buy it now.

[00:03:31] I said that that all started just by reading that book and changing, changing, shifting the way you were doing business.

[00:03:38] Yeah, I mean, there's there's the agent count brokerage. Like your your business is predicated on recruiting tons of agents and your profit margins are really small or there's the agent productivity business where you have less agents, but productivity is really high. And so like in the team centric business model, you spend a lot of time and money investing into your agents to help them have success.

[00:04:04] And so I made the decision in 2011. I didn't want to have a bunch of mediocre agents. And then and that's when I made the decision to start going down that this team centric model and I always have these grandiose plans of what I wanted to do just from a business perspective, and called the company Waters International Realty. And I was running the business on my girlfriend's red IKEA couch when I had that business fail. I couldn't afford my rent. I was literally living with my girlfriend on her couch and it was a very humbling, humbling time.

[00:04:39] Ok, so so what does international realty now, you guys, I mean, I guess that's part of what I wanted to share. You guys have a national franchise. How many locations do you have across the US now?

[00:04:52] So we have 14 locations in the US and one in Canada, and then we're launching one in South Africa, Greece and Guam over the next couple of months.

[00:05:03] And it's really super unique model where you guys are actually training people how to how to get their team to or small brokerage to do a million dollars of net, is that correct?

[00:05:17] Yeah. I mean, our goal is to is predicated on agent productivity and it's like the bootstrap. It's like the bootstrapped roadmap for building a team centric brokerage.

[00:05:30] Yes.

[00:05:31] Ok, it's like a business in a box solution. And it's all the things we you know, like I started I implemented a book and I started finding a lot of flaws and challenges and obstacles as I implement it. I mean, I learned a tremendous amount and I'm not discrediting the book by any means, but like, you end up breaking the model.

[00:05:52] And the other thing I discovered is like the organizational chart is a little bit too small in order to get to where you're a true CEO or a true owner, where you're just collecting monthly distributions and you have people running the business, your revenue has to be substantially higher than two and a half million dollars, which is what the book says. You have to have substantially more than two point five million in gross commission in order to afford leadership to help you run the business.

[00:06:19] Mm hmm. Yeah, I think that's the thing is people look at, OK, I'm bringing in three hundred thousand dollars a month or I'm bringing in two hundred thousand dollars a month. That's two hundred thousand dollars a month. That's to two and a half million like you're talking about. But if you're paying for a. You know, a great leadership team and you have people on salary, that money can go pretty quickly. So anyway, thanks for sharing that, Chris. Let's let's dove into your your topic today on the first three key hires to make sure you're hitting a million dollars annual.

[00:06:57] Yeah. So I think, first off, the really important thing for people to reflect on is, is to have a little bit of emotional intelligence and self-awareness around their own skills as a salesperson. I think a lot of people get into real estate and they become very relationship driven referral based on all that stuff. And I'm not saying that stuff isn't good, but like this, we're called real estate salespeople for a reason because we're salespeople and there's a skill you have to develop to become a great salesperson. And the bridge, the bridge to wealth and real estate is doing is is learning how to convert people that have no idea who you are. That is like the one skill that if you can master that that is the bridge to wealth in real estate is how to convert people that have no idea who you are, because that's ultimately how you have a really scalable business. That's how you start using Sisu and dialing into the conversion metrics and learning like where can you improve your skills? Like, for example, is it? Do I need to improve my skills on the inside sales front booking appointments? Like am I calling a bunch of people but not setting appointments or am I going on lots of appointments, but I'm not converting them into agency agreements? Or maybe I get a bunch of people under agency agreements, but then they don't turn into closings. So we all at the very beginning of becoming ran as rainmaker's or solo producers.

[00:08:21] You want to ask yourself, have I personally developed the sales skills to convert people that have no idea who I am? And the reason that's important is because if you're going to build a big business and you're going to help other people be successful, you have to you have to. You have to teach them that skill. So specific to the first three key hires is once like us, once you have really honed in your skills and math, your skills to convert people that have no idea who you are and you feel confident your ability to teach others. One of your first key hires from a leverage perspective is is an assistant getting an executive assistant. Now, I know the idea of an executive assistant can sound daunting because an executive assistant, you may have to have forty five, fifty fifty five, sixty thousand depending on where you are. And there's there's a way to scale in to an executive assistant. First you can you can outsource a career as a photographer. You can leverage a virtual assistant for a fraction of the cost. We use a we use a job posting portal that's actually in the Philippines called online jobs. So there's there's a lot of companies that will help you find VCs and then they mark up the hourly rate and they're great. By the way, I'm a customer of my out desk dotcom, the great, great service. But if you feel confident in your ability to hire VCs and interview somebody and hold him accountable through Google chat or using Zoom or whatever, you can go post a job posting on online job and recruiter visa.

[00:09:56] And so you scale in these key people like Photographer, Courier, VA, and that's how you can work your way up to affording an executive assistant. But that is your first key hire is an executive assistant so that you as a solo producer can increase your gross revenue and then you're going to get to a certain point where you just don't have enough time in the day because you're busy, you're causing a lot of deals and you just can't take on any more clients. Like there's there's literally a lot of diminishing returns and there is a ceiling on your income. People go into real estate saying there's a ceiling, there's no ceiling on your income. I'm here to tell you because I've lived and breathed that there is a ceiling. I mean, I was drinking so much caffeine like I was I started having panic attacks because I was consuming so much caffeine because I was closing 70, 80 transactions in the summer of twenty thirteen. That's when I went on my last listing appointment. And in those first six months of twenty thirteen, I went on two hundred and sixty seven listing appointments. And I remember to this day because I was sitting in this house doing a listening appointment and I literally started having a panic attack in this appointment because like my mind is just was so overwhelmed.

[00:11:10] I mean, I put my clients would call me in like I would have to talk to him for five minutes before I could even remember who they were. So there is a law of diminishing return from an income perspective where you have to create some leverage for yourself. And so the second key hire is, is hiring a buyer specialist that takes on your buyside clients work, sign calls, helps you with open houses. If you have, like bycel deals, for example, like give those Bycel transactions to that agent, if I think one of the biggest mistakes people make is especially people aspiring to be team builders, is like they get into a mindset of scarcity and fear and they don't want to hire a buyer's agent. Or if they do hire a buyer's agent, they only want to give them certain leads, know they don't want to give him the sign calls, which, by the way, those are the fastest converting leads of the calls and they want these aspiring team leads. Want to cherry pick and you can't do that. You got to set your bioregion up for success. And just remember that if you give them, like a charity, if you will, they're also going to reciprocate and close the deal on top of that to make up for the revenue that you're giving them in your commission split. So that's the second key.

[00:12:29] Chris, can you still hear me? Yeah, yeah, one of the things I wanted to ask you to not back up a little bit, but you talked about there is a law of diminishing, diminishing returns. I don't think I've met anybody other than you that has studied this quite as in depth and experience, not just studied, but firsthand. Like, what is the max that you can expect from a listing agent? Because I know you have buyer's agents, you have listing agents, you don't have a team that everyone just does everything. So in that in that role where these listing agents are just going on appointments, they're not even setting their own appointments. What is like what is there, Max? What can you what can you get away with having them actually do? Because you talked about yourself going stir crazy. Two hundred and something listing appointments. It's just to. So what is what is that fine line?

[00:13:25] Yeah, I mean, I've I've like I've push the limits, like, literally physically, mentally push the limits. And then it took me years and years and years to figure out, like, what's the sweet spot where you create balance for your listing agent, for example, where you're not running them ragged, they have financial success and you're optimizing conversion. So what I've what I've discovered is, is there's basically there's there's there's different levels of listing agents based off their skill. So a highly skilled listing agent that is working on a team that has the infrastructure in place, like you've got a courier, photographer, transaction coordinator, the listing agents just focused on three things, listing agent Focus's number one on converting listings, going on the appointment and winning the listing. Second thing they focus on is weekly success calls, following up with a client with weekly success calls. And the third thing the listing agent focuses on is anything that requires influence. These are the only three overarching things that a listing agent should focus on once your team gets more established and you have more infrastructure. When I say influence, what I mean is they focus on contract negotiations, things that may come up during the inspection period, anything, or potentially maybe price reductions like anything that requires leading the consumer in the direction to get the desired outcome. That is what I mean by leading with with influence. So those are the three overarching things. So once you get the infrastructure of your team, put in place a listing agent, a mediocre listing agent, maybe a little bit newer listing agent, worst case.

[00:15:01] Worst case should be able to sell 80 listings a year. Now, if you have an amazing, highly talented listing agent, that's very efficient, they've mastered the skills of the presentation market, expertize, building rapport, all the basics of being a great salesperson. The upper echelon of limit I've seen over the last ten years is one hundred and thirty listings taken per year. So I've had I've had multiple I have a I have a listing team in Austin, for example. I think we have six listing agents and the worst performing one sells in the low eighties per year and the best performing one sells between one hundred and twenty five and one hundred and thirty listings.

[00:15:41] So and again, I think it's important for people to know you run your business. As a true business, you're your listings. You're listing agents are focused on those three things. They are not setting appointments.

[00:15:55] Yeah, so OK, so I didn't mean to take you off topic, but I think that's just super valuable information that I wanted to make sure we got out there, Chris.

[00:16:07] All these numbers I'm sharing or what I would call predicated on like a version 3.0 team that's more advanced, you know, like the topic today is about the first three key hires. And so I wrote this I wrote a book that I basically documented my journey of building a real estate team. And what I and as I started helping other people around the country do this, what I realized is it's about doing the right things in the right order. And so, like what works and what I would call the early clim is radically different than what you should be doing and what I call the awkward teenager stage. So I kind of look at these phases of the growth curve like this. So like zero to one hundred and fifty closings roughly is what I would call the early climb from one hundred and fifty to three hundred.

[00:16:56] Closing is what I call the awkward teenager stage. And then from three hundred to five hundred is explosive growth. I know that doesn't sound like explosive growth going from just three hundred to five hundred, but the reason it's explosive growth is because in that phase you're developing your leadership team that is going to help you run the business so you can actually plan. And this is the final stage when you get north of five hundred transactions or roughly four to five million and GCI. The next stage is what I call the Great Escape. And this is when you when you exit the business and your primary role becomes like chairman of the board, like you have a weekly you might have like a weekly check in with your leadership team and you might be involved in quarterly strategic planning sessions. But it's truly when you're able to give people autonomy to run the business without you. So those are the three unique phases of the growth curve. So, again, back to the topic today. We're talking about kind of version 1.0 if people really climb in the first three or so, first is the executive assistant.

[00:17:53] Talk about how to scale them up. The second key hire is a buyer's agent. And I think it's impactful, like really set them up for success. Don't just personally cherry pick deals, like set them up for financial success. And then and then you're your third key hire is an inside sales person. So an inside sales person is somebody that helps book appointments for you. I recommend that the inside salesperson only focus on setting listing appointments and not buying appointments. The thing we've had the most success with on the buy side is having like a lead police, somebody that basically is like ensuring that best practices for lead follow up are facilitated with each individual agent. And so, like, for example, our lead police, you they log on to Sisu and they're looking at their pipeline like, for example, how many appointments did they set? How many of those did those turn into wins when they met him face to face?

[00:18:49] How many of those turns into closings when you like, when you do your job as ultimately your job as a team leader, coach, business owner? You know, our job is to create a clear and unambiguous career trajectory path for real estate agents to find financial success. And so our job is to help them knock down these dominoes from a skills perspective. So first first skill they have to master is inside sales, setting the appointments. They can log on to Sisu and see that second skill they have to master is outside sales. That's like when you actually get face to face with someone, the process of getting them committed to working with you. And then a third pillar they have to master is market expertize. So understanding the market, setting good expectations and walking them through the process of closing on a deal. So those are the big three overarching skills you're trying to develop in an agent. And then if you're trying to really scale your business, the final thing you're trying to help develop in people for the ones that want to do it and are showing signs of leadership is is leadership. You know, once they've mastered those sales skills, like you want to position them to become leaders within your organization.

[00:19:57] Ok, I'm just making some notes here, Chris, I think this is great. So you're you're saying starting a team, you're going to hire your executive assistant, then your buyer agent, you're going to make sure they're successful. Third thing you're going to do is you're going to get Niassa.

[00:20:13] That's going to make sure that you as the business owner are out on all of the listings at that point.

[00:20:21] Ok, those are the first three cars. And one little small nuance that we have learned is I think for a lot of people probably watching this, a lot of people watching this are in a position where they're very they're very high performing salespeople and they're having a lot of success. Most people watching this are in that in that in that position. And so for a lot of us, I think the thing we've we start thinking is like anybody can do this, you know, like we kind of like are blown away, that there are so many agents out there only selling four or five hops. And so I think you have to take a moment and realize, like, you actually are kind of like a Navy SEAL in the real estate industry for most people watching this. Right. And so when you think about some of the most successful organizations on planet Earth, the one thing that they have mastered is the recruiting and selection, most importantly, the selection process. So speaking of Navy SEALs, for example, if you've ever seen on the Discovery Channel, they talk to you about like how we can like all this stuff Navy SEALs have to go through. So if you're building a team centric model predicated on agent productivity, you're tracking all the metrics, appointments, wins, deals close. If you're if that's the business model you're you're trying to grow, you need to you need to build a recruiting and selection machine. Like you have to have a flywheel to find people because you're looking for an exceptional individual. And so one of the biggest mistakes I see a lot of people make when it comes to hiring your first agent is they only hire one.

[00:21:56] They hire one person and then they train. They spend all their time training them up. And it's one of the greatest mistakes you can make, because the probability of finding someone that's going to be like a Navy SEAL, if you will, is if you have a 30 percent success rate. And so I've had I've had hundreds, maybe thousands of people come through my door now, like, actually come and work for us. And we on average, we average of 30 percent success rate. So the thing I the thing I always say is that the interview process for any sales related position is both. Like the interview process for any sales related position is both like I've taken every single recruiting class training class, I've given out tests galore, I've done group and I've done it all. And like the if you go and study what these amazing organizations do, Navy SEALs, there's a nonprofit organization that's incredible called Teach for America in the finance world. They've got like Goldman Sachs, if you've seen the movie with Will Smith called The Pursuit for Happiness, you hear about him going through the six month program, not getting paid anything. And they and they and they tell this room of thirty students, whoever sells the most and whoever gets the highest test score becomes a broker within the organization. So I think about the quality of talent that company is bringing in it. And so the biggest mistake every team builder makes is they hire one person and they put all their eggs in that one basket and they spend months and months training them and giving them technology and giving them leads.

[00:23:36] And they fumble and they're incredibly frustrated. And so to flip the the the probability of you finding a successful buyer's agent, you actually need to hire five at a time. And that may seem overwhelming for a lot of people, but the thing we have discovered is, is over the course of 90 days, you're going to identify who is your solid keeper, who's the one solid person that's going to be your ride or die and help you take the business to the next level. And so you have to hire several people to increase your probability of finding the right one. And there's there's basically three key things you're looking for in those in that 90 day window. So in the first month, a lot of people that are building teams think you're looking for somebody that's a great convertor, like they're booking appointments and all that kind of stuff in the first month. And that's I mean, that's what I'll just be honest, that's what I did. I used to think that's what I needed to I need to do observe in the first month was like how how well they did that conversion. But the truth is, like, if all of us on this on this Sisu call really reflect back on our journey of becoming great salespeople, like we fumbled a lot in the first six, 12, 18, 20, four months of our career.

[00:24:51] You know, like I think back to when I was a real estate agent at the beginning, like showing my first house, like I was like panicking over using this super EKI because like when the sun was shining a certain way, the infrared light could be blocked and it wouldn't open the lockbox. Like, I'm like the things I was worried about at that stage were so like they're so trivial at this point, but they seem like such a big deal for me at that point. It really was a hindrance to my growth in my mind. My point is, is it takes a long time to develop the skills of a sales person, like it doesn't happen overnight. So the thing you're looking for when you recruit a new agent in the very first month is are they a culture fit? So one of the books I highly recommend people read is called Culture Code. Amazing book that came out last year. And the author, what he says is when he studied all these highly productive groups, the number one and the first indicator, the very first indicator of success was how people felt about one another, which is a very intangible thing. And so in our first 30 days of helping an agent be successful, yes, we like go through classes and role playing and all that kind of stuff. But like, that's the first thing we're trying to observe. And I'm sure for people watching this, you've had people in a position where, for example, they come and join your team and like first or second week they got their arms back.

[00:26:13] And they're very contrarian questioning your advice. And they're not there. They just it creates this bad energy. And so, like your job as a team leader in those first 30 days is really to pay attention to behavioral cues from a distance. So, for example, I think everybody on Sisu that's in sales would say 80 percent of your success is predicated on your mindset. And so, for example, when it comes to culture and like helping have an impact on our sales people, our job is to create a conducive environment, to set people up for success. And to do that, we have to help control mindset. And so that's predicated on hiring people that have similar core values and create a certain feeling when they come in the office. So like everybody's probably seen, Wolf, of Wall Street with Leonardo DiCaprio. I'm not I'm not I'm not like saying go do all the illegal stuff. But if you're a salesperson, like, think about the environment, like you'd be excited. It's high, high energy results driven. Right. But like, imagine having a few people in that environment that are like very negative nancies contrary. And they you know, it's like all these external things they bring into the workplace. Right. Like it's going to become like a cancer. And so like your job as a leader in those first 30 days of hiring somebody is like and this seems so intangible, but it's like, listen to your gut. How do they make you feel in those first 30 days?

[00:27:39] This is awesome advice. We're actually out of time. I want to what is the name of your book? I'm going to make sure everyone's aware of that.

[00:27:46] Yeah, it's called the the Million Dollar Real Estate Team. And for anybody that's watching this via Sisu, I'll give you guys a copy for free. Just do me a favor and pay for the shipping. I've got I think I've got a special link with a promo code because you can go buy this on Amazon, but I think it's like twenty bucks or something. Let me see if I've got a special link that I'll give it to people for free after you drop off.

[00:28:12] Chris, can you just stay in and drop that into the comment section?

[00:28:16] Yeah, I just put it in there in the private chat.

[00:28:23] I'll drop it in there. That's great. OK, we've got Todd Crockett standing by, so I'm going to let you go, Chris, but thank you for joining us today. It's always a pleasure getting your nuggets and wish wish we had more time, but we'll catch you next time.

[00:28:39] Yeah. Thanks for having me on. All right. Thank you.

About the Author

Brian Charlesworth
Chairman and CEO

Entrepreneur and business builder. Built and sold software and telecommunications companies. Passionate about making a significant impact on lives by driving technology forward.