942 (Part 2): The W-2 Mindset Is Holding New Agents Back with David Greene

Aaron: Real estate Rockstars. Welcome back. As promised hopefully, you guys listened to our last podcast. It was the first half of what I’m about to finish. David Green and I had an awesome conversation. We spoke for about an hour and a half about all sorts of stuff. There was so much good info in there. We couldn’t stop recording but I also didn’t want to send you guys home with an hour and a half long podcast. Here’s the second half of the podcast interview with David Green. Here we go.

Really cool to see what you’ve been doing and what you’ve been building. I always love giving the plug of that as you started as an agent, you were listening to so much of the podcast and you heard fun tips on the podcast that you ended up using. I love it. When I first met you, you were still working full-time as an officer and real estate was like, you were already a more successful real estate investor and it’s more scuffled real estate agent than a lot of real estate investors and agents I had known but it was like your side job. You were doing it at night and on the weekends while you were a police officer and now just to think about what you guys have done.

We mentioned to one of the co-hosts of my second favorite podcast in the whole world for real estate agents, you and Brandon Turner hosts the BiggerPockets podcast. Just through that, getting to see how many lives that you’ve continued to change with that. I guess now, you’ve taken so much of this stuff that you’ve learned. You’ve redone the system and it took you a few years to get that system. Now that you’re one of the first people I’ve heard talk about that idea of working the agents through, by the time they’re ready, they’re really ready. They’re off to the races. Now you have a book coming out in January. That’s going to be published with BiggerPockets as well. You’ve been working on that for a while. You’re going to do a few books?

David: Yes.

Aaron: As part of that real estate agent release.

David: I basically wanted to write a book that taught people how to be a real estate agent because there’s not many of them. Like I said, there’s a big mentor gap.

Aaron: You’re a mentor now.

David: Not everybody in the world can come work on my team. I took everything that I was teaching the agents on my team and I put it in book format and said, “Hey, this is why people need to know about real estate. By the time I was done, it was about four books long. It was like the Bible. BiggerPockets publishing had me break it into three different parts. Now we’ve taken this book which is basically new agents or inexperienced. They’re not doing a lot of deals. It’s called sold. Every real estate in this guide to building a profitable business. These is all the things that nobody tells you when you get started but you still need to know.

We’re talking about things like what to do in your first 30 days? What car you should drive or not drive? How to write up an offer? What the escrow process actually is? It’s amazing to me how many people have been agents for two years but they sell two houses a year and they don’t know what goes on in the escrow process. It totally shows up in your confidence. You’re not going to pitch yourself to the person you’re buying a car from. If you know in the back of your head, I don’t even know what happens in the escrow process. Typically they’re waiting for someone else to come teach them and that person never shows up.

This book is like the granular details. When your client says X, you say Y, here’s a script. Say it just like this because there’s a really big difference between, “Hey, bad news. We got an offer and it’s really low, sorry.” Versus, “Hey, great news. We got an offer on your property and we have some areas where we can counter it. Would you like to go over it?” Like no one told me that I made that mistake many, many times. This first book is designed for, “Hey, you want to get to the next level, keep listening to these podcasts, read this book, do this stuff. That’s in it.”

The second book will be, this is how you become a top producer. This is what the top agents in every market do that you’re not doing. This is how they do it. This is the knowledge they have that you didn’t have. Don’t wait till you sell 100 houses before you learn this, get it in the book. The third book will be how to be at what I call a rock star which is basically what I’m doing right now, which is putting a team of people around me. I’m working all these deals but I’m doing 1% of the work while the rest of the team does 99. As they do 99% of the work, they get 100% experience that they didn’t have now, as they grow, I can lead them into regenerating and building their business that way.

Aaron: How to be a Rockstar book, if I don’t get to help be your publisher on that one for real estate right now is you’ve got quite the publisher that you get to work with already. I love the whole spirit at the beginning. If someone can come work for you. Listeners, if you guys can go join the David Green team out in Northern California, then you don’t need to buy the book. If you’re somewhere else in the world and you can not join the team and get to learn, he’s saying what he is doing that he has now built his team is going to be in the new book.

If you guys go follow it, we’ll have some links in the show notes for this, the book isn’t quite out yet as this comes out. It’s just going to be out in a few weeks but go follow David on social media. I see how interactive he is out there. I’m sure that the day that launches it’s to be on the Bigger Pockets page. It’s going to be [crosstalk].

David: Well you can pre-order it now.

Aaron: Oh, you can?

David: Yes. Biggerpockets.com/new books.

Aaron: All right, I [crosstalk] my mouth. I almost killed all your chances of a sale today thinking that– You can do it now?

David: Yes. I would say if you know or love a real estate agent that is not doing as good as they want to be doing but even if you are doing good, get them the book. For the people that are not rock stars, there’s a lot of shame in our industry because we’re expected to do good. We’re supposed to be wealthy and doing well. We’re supposed to know everything. There’s very little training. I feel like had I had a book like this when I got started I’d have avoided beating myself up quite a bit, which a lot of people do.

Aaron: You’re totally right. I went to the BiggerPockets site, Sold: Every Real Estate Agent’s Guide to Building a Profitable Business by David Green. It does say currently available for pre-order. You can buy it as a late early Christmas present for somebody. You can tell them that it’s coming. I like the idea. It is interesting in the industry. People that are successful love teaching people that aren’t. They love teaching people that are new but new people really struggle with saying, “I knew.” They really struggle with saying, “I need help.” What else would you tell people like that? That still get nervous. I know that’s a sidetrack but what do you think about that?

David: Well, the answer is you have to humble yourself enough to go find a person that you work underneath and do all their work that they don’t want to do and don’t expect anything in return other than knowledge. One of the things that I talk about a lot is it’s sad that we lost the Apprenticeship Program or the apprenticeship mindset that we used to have, where you work directly underneath someone and they guided and they molded you. They really helped you build a skill set that was strong. Then you went out into the world and you succeeded. It takes delayed gratification to work that way. We don’t have a lot of that.

Part of what I believe is a problem for new agents in the industry. If you’re a new agent, just hear me out here is we have the W-2 mindset. In a W-2 position you are for almost every single role I know of in any company, you’re cleaning a fish that somebody else caught in some capacity. If your first job was at a McDonald’s, you’re standing at the register punching in the order of a guest that came into you. McDonald’s did all the work of getting that person in the door, running a marketing campaign, like the person who’s working in the restaurant, they think that the whole aspect of McDonald’s is either making the fry, making the burger, working the register.

That’s like 5% of that company, the other 95% they never see. That’s the people who are deciding, what are we going to charge for this? How are we going to partner with certain people? Where are we going to get our supplies from? How are we going to make a training manual? What kind of marketing are we going to do? Where are we going to air? There’s a ton of business that you don’t see when you just work in the W-2 position. The problem is because you only see the tip of the iceberg, that little 5% you think that’s all there is. You start to develop really bad habits where you think showing up at work is all you’re supposed to do. I’m here. I deserve to get paid.

When you get out of a W-2 world and you get into the 1099 world or the entrepreneur world, whatever you want to call it, I know Aaron, you know where I’m going with this.

It kills you if you have that attitude that someone else is supposed to bring you the business. No one comes to you and says, “I got a great deal on a house. Do you want to flip it in the real world.” You got to go look for that. You’ve got to go fight for that. You got to go compete with the other person that is trying to flip a house. You got to be better at what you’re doing.

When you become a real estate agent, that’s the world you’re walking into. You’re not a waiter at a restaurant that waits for a hostess to literally bring a table to your section and sit them right in front of you. You got to go out there into the world, find that person, convince them to eat at your restaurant and then do all the job of serving them. New agents that are struggling, that are afraid to ask for help. That’s a big reason why. They’re still expecting their phone to ring, their email to come. Where do you go to find the leads? They haven’t embraced it. This is like the Wild Wild West and you got to go get them. What I think the best thing anyone can do is go find an experienced agent and say, “What do you hate the most?” Everyone has their own thing. I hate paperwork. I hate organization. I hate follow-up. I hate putting information into the MLS when I have a listing, I hate putting out my open house signs.

There’s something that they don’t like. Say, “I’ll do it for you for free. All I ask you to do is teach me.” Do as good of a job as you possibly can for that person and your goal is to make them say, “I never could have done it without Bobby. I never could have done– Jenny is so useful. I wouldn’t and go back to ever not having her.” When you get there you say, “What else do you hate to do?” “I really hate having to schedule my own showings.” “Boom. I’ll do it. Now that I’ve scheduled it, what’s your email. Let me put it in your calendar for you.

What information do you need put in there? Let me do that for you.” Just do that for them. Now they’re like, “I couldn’t live without this person.” “Hey, do you think I could go with you on a showing? Can I see how you do it? Can I see what you say? Show me your process.” Now you’re getting free training from that person. Eventually, it’s going to be, “Hey, I’m busy. I can’t go show it. I double-booked myself. Can you just go do it on your own?” Now you’ve worked yourself into being a buyer’s agent. There are so many opportunities available for the newer agents who are struggling to make themselves valuable to somebody else and learn the business from them.

They don’t think that way because you never have to do that in a W-2 job. In a W-2 job, your goal is to avoid doing work. I’m here, I’m getting paid. How do I figure out a way to make somebody else do the work? It doesn’t translate at all when you get into this kind of an industry.

Aaron: The W-2 lifestyle is different. I’ve never heard someone say having a W-2 job is like cleaning a fish someone else caught, but that is. A lot of our listeners are new agents that were coming from W-2. Others who’ve been agents for a long time, but they know, but they’ve experienced this with their new hires and the new people joining their team. That’s a great mindset shift to be able to, because they don’t realize that. Because as people are cleaning the fish, someone else caught a lot of times they’re like, “Man, I’m doing all the work.”

David:That’s exactly what they say.

Aaron: I’m the only one cleaning fish. I should be making all the money. I’m the only one cleaning fish. He’s doing nothing.

David: That’s the same thing. That’s why I give the example of, you’ve only seen 5% of what the work is. It feels like you’re doing all the work when you’re doing 5%, and I hear that all the time. “Why would I give up half my commission if I’m doing all the work?” The answer is you’re not, you didn’t do the work to get that lead. You didn’t do the work to build the brand. You didn’t create the systems that you’re using. You didn’t train yourself how to do this. It’s a very small percentage of the work that happens once that fish is in the boat. Getting the fish in the boat is the hardest part.

I feel like that mindset is toxic to being successful. That’s one of the things I talk about in the book is that your biggest enemy is showing up at work and thinking, sitting at your cubicle, and opening your email counts as work. Because it doesn’t, you’re actually losing money every day you go to work as an agent, you’re paying licensing fees, MLS fees, office fees, national association, your state association, your local association, your MLS key. You’re paying money every day and if you didn’t get a client, you lost money that day. There has to be a sense of urgency of how do I get a fish in the boat.

If you don’t know how to fish, the best thing you can do is get in the boat with someone that does know how to fish and say, “Can I bait your hook? Can I help? Can I learn with what you’re doing? Well, you got a fish on the line. Can I try to reel it in? Can I help you?” The fish are all caught, I’m going to clean them all. I’m going to gas up the boat. I’m going to clean it for you. If you took that attitude, the people that are catching a lot of fish would love to partner with you. I really think that if someone honestly wanted to make it in this business, there’s nothing that would stop them if they took that approach.

Aaron: I remember it was my third year in college, I had moved from Oregon down to California. I was an out-of-state resident. I was paying a crazy amount of money for my tuition. I was old enough that my parents weren’t paying for me, but not so old that it was paid for by myself. I think it came down to every time I went into a class, it was costing me $200 bucks. When I would go in, I would tell myself, and I went back when I was a little older. I was older than your average student. I was like 23, 24. It helped me have that mindset because the money meant something.

I knew whenever I went into class I was paying a couple of hundred bucks for that hour. What was I going to learn that day that was going to be worth it? I remember being on the hunt. As I was listening and paying attention and taking notes and I was studying construction management and real estate development. I knew I was very focused on this was my career. The things I learn today are going to help me in my career. Not every single class, but most of the time before the end of the class, I’d say, “Okay, that’s the thing. That’s the thing I just paid $200 to learn.”

Now only it took him one minute to tell me that but it was 59 minutes of the other stuff that we didn’t necessarily need to know and then knowing it forever. If we’re honest, too, even the systems that you’ve come up with in your office, there are hundreds of people have impacted that. When people are like, it’s not only the guy cleaning the fish didn’t come up with the system. You came up with a system after studying dozens of people. They came up with it after studying dozens of people and it’s getting better every year.

Every couple of years the industry is continuing to get better and better. There’s no industry like real estate. I can’t think of another one where people can go get a license without a college degree and they could go learn from somebody else for free and a year or two later be getting a ton of deals.

David: It’s really sickening.

David: It is sickening. There’s an example I use in the book where I’m comparing it to being a doctor and our buddy Daniel Del Rio was the first person who really brought this up. He said, “David, how long do you think it takes a doctor before they’re ready to start working?” I believe it was eight years of education, maybe 10 plus another two years of residency. You’re at like 10 to 12 years. Aaron, what would you guess the average doctor’s student loans are after medical school in

Aaron: Oh, man, you’re talking 10 years. If I was just going to do simple math, it’d be like two or $300,000 bucks, right?

David: You owe $300,000 and you had to give up 10 to 12 years of your life before you started making any money. Then you have non-stop stress of, did I kill somebody today? Did I make a mistake? You’re working 12 hours in a hospital. You’re getting held over longer. You’re dealing with insurance headaches. It’s a tough life being a doctor and that’s a job that is considered extremely prestigious in our country. If someone said, “Hey, you want to go to medical school and be a doctor?” Almost everyone would say, “Yep, I’ll do that. They make great money. I want to go do it.” Let’s say what do you think a doctor makes in a year? The average doctor.

Aaron: I don’t know. I have to imagine they make a couple of hundred thousand a year, at least maybe a few hundred thousand a year.

David: It was around $212,000, but in certain markets, it’s going to be higher, obviously like in California. Let’s say

Aaron: Certain specialties or whatever.

David: There you go, $300,000, but if you have their student loan debt to what they had to take on what they’re paying that back, that’s significantly less than 300,000. If you add onto the fact, they didn’t get to make that for 10 years of their life. That ends up your first year that you made 30,000 divide that by 10 that’s like $30,000 a year. That’s not that good of money. You have to be a doctor for a very long time before you actually start to see an increase. Now, compare this to being an agent. Zero debt, you just study and get a license and you could be working in four to six months.

If you got to go a couple years apprenticing under somebody else, but you approach it as if this was a medical school with that much vigor and I’m going to take my job that serious. I’m going to study the heck out of everything that I’m doing, and I’m going to treat this like this person could die if I didn’t do a good job,. Do you know how quickly you could get to where you’re making $300,000 [crosstalk] by how sickening it is. For what we do compared to other things it’s almost limitless. It’s just the wrong attitude and the wrong mindset that people have getting into it.

Aaron: Yes, if you can work hard and stay the course and learn it. One of the episodes that got published right before this one with David was a guy talking about making phone calls 10 to 12 hours a day, every single day and six months into it, he got his first deal. His first deal was a short sale too, it wasn’t even an easy deal. It was back like, “Okay, you are upside down, but you’re my first listing lead. Let’s see if we can short sale your house.” I know my parents would have been much more proud to be able to say their son was a doctor instead of a house flipper, but there is nothing quite real estate for the opportunities that it can provide.

Also how quick people can learn, that’s one of the favorite parts about this podcast and what we get to teach people– Well, I know you and I can always talk forever. Before we jump off, I want to talk a little bit about some real estate news that’s out there. See, we had an election, most of the news places will say, “The election’s over, and then in a month, we’re going to have a new president in. Looks like the Senate is going to stay around the same.” There’s been a lot of news of, will taxes change not? Will real estate change not? Have you even studied up on much there?

David: I’m not the biggest politic guy and I know that a lot of this depends on how the House and the Senate shape up. I’m not up-to-date with how that’s looking. I know it’s still-

Aaron: That’s true. That is still up in the air for sure.

David: –Until we know what happens there, it’s hard to tell how much, because it’s pretty safe to say that President Biden, isn’t going to be lowering taxes. They’re probably going to be going up or [crosstalk] best-case scenario staying the same. He’s also mentioned things like, he wants to get rid of the 1031 like-kind exchange. If that’s the case, there’s probably several other tax loopholes for lack of a better phrase, that he’s going to want to eliminate.

I’ve spent the last couple of weeks talking to different CPAs, trying to get an idea on all the different possible avenues of where this could go. If they do, how to prepare for it. I also live in California, which is a rough state to live in, if you don’t want to be paying taxes.

Aaron: If you don’t like paying taxes, you live in the wrong state brother.

David: That’s exactly right.

Aaron: This was a really interesting article that was published yesterday. It says, “Alabama and Georgia realtors sued the Trump administration over the unconstitutional eviction ban.” You and I, last time we talked, we talked about the CDC eviction ban. I said, we had, had some residents that had filled out the form that said, if I get evicted, I’ll be homeless. I have a better chance of catching COVID. It’s all there to put on the CDC form and all evictions, even though, I haven’t paid rent in four months get postponed to January.

It says, the trade groups alleged the CDC moratorium unilaterally shifted billions of dollars in economic burdens from one group of Americans to others landlords. The Georgia Associates Realtors have filed a federal lawsuit, to have the court vacate a nationwide eviction ban. That would be a big deal if that goes through. The ban is supposed to expire December 31st. I think the reason they’re still doing the lawsuit right now, because you would almost say like, “Hey, it’s almost over,” but they’re trying to– One of the talks of the new stimulus was, they were going to extend it another year. If they were going to get a stimulus assigned, that was what was proposed in it.

Trump was against extending it a year at the time. Now, who knows what that’ll happen? What do you think about, it’s interesting to see realtors sue– That someone submitting a lawsuit to try to push back on some of the new stuff. I think it’s really interesting. It’s as it pushes unilaterally shifted billions of dollars from one group of Americans to another, very pro-renter, very anti-landlord, but landlords are people too. Most landlords only own one house, like BiggerPockets is the landlord investor podcast. Do you have any thoughts about that? Is it shifting burden from one group to another?

David: It is, yes, there’s no arguing that, but I would say it’s probably going to continue to shift in that direction. I wouldn’t think that with the current way that it looks like with president Biden winning, you should probably expect to see more of that type of thing. Some of the ways that have benefited agents in particular have a lot to do with real estate investing and we don’t always realize that. Let’s take the 1031, like-kind exchange, for example, that is a provision in the IRS code, Section 1031, that allows you to sell an investment property and replace it with another investment property. That’s like in nature and with certain rules in place, avoid paying the capital gains tax when you sold it, that made money.

When you sell stocks, let’s say you made $20,000 in a year, overstocks, you sold, you would get taxed at the short-term capital gains rate on that gain. Real estate is a easy way that they could go after people and say, “Hey, you got to pay us because you sold the property,” but smart politicians understood, if you tax people, they’re not going to sell it. If you let them sell it and then roll it into another property, you’re not actually avoiding the taxes, you’re deferring them. We’re going to let that snowball grow big so that when we do actually get taxes on it, it’s a way bigger amount than every time that snowball turns, we take a bunch of chunk of snow out of it. It never really grows big.

If that’s taken away, it’s not going to lead to a lot of people paying taxes that they normally wouldn’t have paid. The guys you and I know Aaron, they’re not going to sell their property. If they’re going to get taxed at 30%, 40%, 45% of whatever it was, they’re going to hold it and they’re going to refinance it. If you’re an agent, there’s a lot of deals that you’re selling, because it was in the person’s best interest to go sell it and buy another one. That’s four different agents that all got paid when somebody sells a house and buys another house.

There’s also two loan officers, they got paid in most cases, when that happens. There’s also all the employees that work for the agents and work for the loan officers. There’s also two different title companies that were paid. There’s two different home warranty companies that made money. There’s a possible contractors on each of those deals that went in there, handymen that made money. There’s home inspectors, there’s appraisers. There’s a ton of people that work in our business that only get paid when properties change hands.

That’s what I’m trying to point out here. When people sell less, it doesn’t just affect that human being, right off the bat who owned the property as in they have to pay higher taxes. It’s all those other people that I just mentioned that now make less income because the property didn’t change hands. That’s something that I wanted to point out if things like that happen, it’s going to affect our industry pretty significantly.

Aaron: It’s such a good point that every law that happens, that’s anti transaction, that postpones transaction that just decreases demand a little bit. It’s like when interest rates go up a little bit, demand decreases a little bit, a few less transactions will happen, but when a few less transactions happen, it affects a lot of people. I’d be curious to see how many people did 1031 exchanges last year. You get to see how many people that can affect along the way, but it’s a big deal. It is.

You’ve seen that meme that said that it was a resident, a tenant reading their rent increase and said, “Wait, I voted for increased taxes on my landlord, but not to increase my rent,” but realizing that everything flows downhill. If you get rid of 1031 exchanges, so that means people have to pay more tax. They just won’t do the transactions and everybody else doesn’t get paid from that. The home inspector that was making $400 on that, now he makes 5,000 less this year because there’s no 1031 exchanges.

David: We lose income tax on all that money that people used to make. It’s not just, “Oh, we’re going to gain 1031.”

Aaron: That’s the ultimate analysis, to go, “Hey, by eliminating 1031, we’re going to bring back this many billion in tax money,” but in reality, maybe they aren’t, because-

David: They may be bringing less money

Aaron: -they’re going to bring in less money as a net.

David: We need to be ready for that as agents to understand that a lot of the things that have fueled a really good market for us could be going away. Interest rates have just gone down and down and down. Tons of people have been refinancing, tons of people have been buying as interest rates go down. The value of houses go up, people are more likely to have a transaction that changes hands.

Hey, if I can sell my house, it’s now worth more because rates went down, for more money and I get to buy my new house at a lower interest rate. That makes sense, I’m going to do it. A lot of these transactions happen. All it takes is one little switch where, “Hey, I have a 3.5% rate and rates went up to 5% or 6%.” Now my house is worth less because it’s more expensive to own it and I got to I lose my 3.5 to go get a 6, I’m not going to do that, but it can really lock up a market hard.

There’s a few things that I’m looking at assuming that that could happen. Save your money, you need to be showtime mindset when there’s an opportunity to make money. You can’t assume it’s always going to be there. You need to be a more balanced for real estate person. I’m an agent, but I’m also an investor. I don’t worry about the market turning around, I just know at some point it’s going to happen.

I’ll just change my strategy. I’m just going to go buy rental property. I’m going to go buy properties because I can buy them with less money down. I’ll benefit from real estate in a different way. That’s another area of agents are hearing this and they’re getting scared. You’re only scared because you don’t have a plan for option B. Start putting a plan in place for option B and you could see opportunity there,

Aaron: Right. That could be just encouraging your seller. Your seller that was going to sell a 1031 to say, “Hey, you need a refinance right now with that low rate, and now go buy another property.” Now, instead of selling it and getting it, because of the new low rates, by cashing out your equity, you can essentially sell it to yourself without having it by refinancing it. That’s going to be one of those changes. There’s going to be every time a new law comes out, finding that loophole. You’re talking about just one little shift. I just pulled up that chart for interest rates over time.

I remember back in looks like the end of 2004 beginning of 2005 when interest rates first started tick up. I was working for a home builder in Southern California. We were like living the best life ever. We were golfing a couple of days a week. The houses were building themselves as soon as we built it prices are going up all the time. I remember the first time when my boss Nikki came in and said, “Hey, the FED just increased rates.” It was the first time in years they had increased rates and that was the beginning of the end. They just increase the rate a quarter of a point, but that’s what started that whole downfall.

That was the first time where all of a sudden it took like 12 months for prices to peak but that was the moment where the momentum changed directions and it was just from that shift of a quarter-point. You get to see that chart and interest rates went up up up. They started coming down again in 2008 and 2009 was the beginning of the recovery as it goes. Could be one little decision that article talked about non-institutional investors owning 72%of rental properties.

A lot of times when people think that they are sticking it to the man. The CDC thing or the 1031 thing, you agents know this. Your clients your people out there they don’t own 50 houses 100 houses most of the known a couple. As these laws fix them people are out there start figuring out that back-up plan on how you can replace a business and replace an income stream. There’s always other acquisitions going on right now with CoStar, and there’s different things in the news and maybe that’ll have to be next week’s state of the market. We go into some of those acquisitions are happening.

I saw an article that said iBuyers are in the third quarter their deals went down 80 or 90%. iBuyers were second quarter of the year there were so many iBuyers transacting but now third quarter 2020 that iBuyer transactions were way way down. Now, I would guess that that’s because the market is so hot that people have realized that well, I can actually hire an agent. It’s almost like people used to go to iBuyers because they were worried they’d have to fix up their house to sell it but now the market is so hot. You can list a house on the market on MLS that’s in crappy condition and get an offer.

There may be more people who were like, “You know what my agent told me that I can list it like this. I will just leave and even listed with pictures. Will do a virtual walkthrough with the phone.” Any other thoughts on– It’s not that surprising to me. Was it surprising to you to see the iBuyers are losing so much market share?

David: No, I think when you and Dave were on our podcast, we talked a little bit about the iBuyer thing and my expectation for that niche is that there’s a lot of models that work when the tide is rising. I remember when I was a lot younger in ’02, ’03, maybe more like ’04, ’05, there was this company Help You Sell companies like that. That would say we’re a flat-fee brokerage will just charge $3,000, which may be by today’s money is like $6,000 $7,000 to sell your house no commission-based, and the market was so red hot. It didn’t matter who your agent was people were going to go by your house.

I remember just seeing these Help You Sell signs all over the place and then ’09, 2010 came and I never saw one again. That company went bankrupt or just became nothing because it became hard to sell a house. The tide wasn’t going up making you think that you were doing better. I’m not going to name any names but there are a lot of brokerages and real estate models that are doing well right now because houses are selling themselves. There’s very low inventory. There’s very low rates everybody wants a house because they don’t want to live in a townhouse or condo or an apartment when COVID is making them shelter in place.

There’s a lot of things that are fueling it makes sense to go buy real estate. The iBuyer program is one of those things that benefits when everything looks great. They can go right an aggressive offer as long as prices keep going up. They’re going to be fine. What happens to those iBuyer programs the minute prices either stagnate or start to go down? What happens to a lot of these companies that are selling agents some service that they no longer need when it’s hard to sell real estate? Or the Help You Sells of the world that say, “We are the cheapest so go with us.”

It’s great when it’s easy to sell houses. The second it becomes hard and you actually need training. You need someone to hold you accountable you need an office to meet with people face-to-face a lot of these trendy things that are working right now won’t be working. I expect a lot of those companies to go under. Part of being in the 1099 mindset, is never assuming it’s always going to be fine. Someone’s always going to walk through that door. I’m always going to get that paycheck that’s a W-2 thing. When your 1099 you’re always expecting it’s going to change how I’m I going to be prepared for that to happen?

Aaron: Yes, and we did talk a lot about that. When the market’s easy everybody’s a good investor everybody’s a good agent every system is out there. I recently bought a house out of foreclosure auction and just listed on the market as is like blue tape still on it. It was still winterized it broke all of my rules because I was trying to see just how crazy the market was. My rule used to be no signs of foreclosure. One of our checklists was you have to use the sticker on the front door of all the foreclosures in the windows saying like, “Hey, this has been winterized.”

We just left all that stuff to say like, “Hey, what will happen with this market will we get offers?” We still got offers right away. That is something that can only happen now. It was like not bringing my A-game. It was like bringing my C-minus D-game just as an experiment to see just how crazy the market has been. Right now market’s hot so a lot of the stuff does sell themselves, but as a buyer’s agent, you got to work a lot harder to get the deal done. We also made a full-price cash offer on a house today the moment it got listed and got an email an hour later that said sorry we did not accept your offer.

I said, “What? Man, I’m not used to that.” I’m not the blind bid guy so really interesting time but we did. There was a couple of times I was on the BiggerPockets podcast. If you guys want to learn more about me, we’ve actually heard that on some of the reviews of who’s Aaron. How did he get here? Why is Aaron hosting the show now?

David: He doesn’t sound like Pat.

Aaron: Why did Pat hand the reins over to Aaron? Who is this guy? He’s not as handsome his voice is not as good. You can go learn more about me if you go to listen to BiggerPockets podcasts 396 that was the second one I was on. I think the first time I was on was a year ago with you and Brandon, let me see if I can figure out when that one was.

David: While you’re looking, I’ll just tell everyone here if you don’t know who Aaron is he is as close to the Dos Equis man as you’re going to find outside of the commercial.

[laughter]

Aaron: I think when we were on this is the most interesting man in the world. Well, now when I search my name on BiggerPockets, I see my book on there on the author page and I can’t find my old ones. I know it’s on there somewhere but the most recent one is 396. There’s also another one I did a year ago too good. The other one was 325 so BiggerPockets 325 BiggerPockets 396 you learn a little bit about me to the side if you should be listening to me as a host or not. I know you should be listening to David Green super successful real estate agent.

I’m always so happy when I get to have you on here as soon as we finish. I’m always like go book another one. Let’s get another show on the books so we can come back and be talking to the beginning of the year especially when your book is out. Beginning of the year, we have a whole bunch of news to talk about in the world a whole bunch of topics as administration starts changing. You’re a great guy to be thinking about what is the pivot going to be. I think as laws change I want to have you on here just so we should be talking about possible pivots.

When they take away 1031 outs refined find something else when they take whatever is getting taken away next. If the CDC does get extended a year and the eviction ban happens for a year and those in the real estate agents lose that lawsuit how will we treat that? That’s what we talked about last time it was what to do if your tenants have sent you that CDC from how to actually do that. David always a pleasure to talk to you and I could always talk forever. For you, listeners that have listened thank you for listening to David and I talk today.

Go find him on Instagram you go listen to him on the BiggerPockets podcast. You can go get his book. I am going to get his book for a lot of people as a gift. I love the idea of going and getting that book as a gift to a new agent. It’s almost like a congratulations. Somebody goes, “Hey, I just got my license. I’m starting this.” All right cool. Here’s a book from a guy that I respect. He can teach you a lot about being an agent, especially in your first year. David, any final thoughts anything else you want to tell people?

David: Thank you for that, Aaron. I would say we don’t know what the pivots going to be but we do know there’s a very high chance we’re going to have to pivot. If you don’t know the actual tactics, you’re going to use start warming up so that when it’s time to stretch you’re ready to go. Just mentally accept the business is going to change the industry is going to change what worked yesterday might not work the same tomorrow. I’m okay with that. I’m a 1099. I move with the market. I like to use a lot of sports analogy when it comes to business because they’re very similar.

If you’re a team that’s doing really good a football team throwing the ball and the opponent start to figure that out and put a lot of players back to stop you or maybe a lot of fast guys on their defense to keep your receivers from getting open you got to be ready to run the ball. Those skinny guys that are fast don’t tackle as well. As long as you take that approach that I always have to make adjustments you’ll fall in love with our business. It’s when you’re in that W-2 mindset that says, I just want to do the same thing all the time and I get angry when there’s change that you start to not like the business, and then it gets tougher to talk to clients overall, you’re just not as happy of a person. This is an awesome podcast to listen to, to stay aware of what’s going on. You can always work on your mindset, even if you don’t know what’s going on so that when the change comes, you’re ready to rock.

Aaron: There is nothing I’m going to be able to add to that such a great point though. The only thing that is certain is stuff will change and when stuff does change, there’s a lot of grief in that. There was a lot of grief when I realized I wasn’t going to be able to take my daughter to New York for her birthday. For the birthday, she had planned to go to Broadway forever and this year, it was not. There’s grief in change and having to accept change but if we can start accepting now, that our world is changing faster than it ever has. Who knows what’s going to happen in January, February?

But if we mentally prep ourselves that hey, it’s not going to be like that our life is going to be different in January, it’s going to be different in March, better or worse, whatever, if we prep ourselves, that change is coming, then maybe we will be able to adapt faster. David Greene, thanks again for coming on the show. Real Estate Rockstars thank you for listening. As I always say, if you love the show, go give us a review, if you hated the show, go give us a review I’ll shed a little tear but I need to know what you guys want to hear and how to do it.

If there was something that we said that changed your life, or you think would change someone else’s, please go share it. Tell your friends about it, tell them to come download the podcast, listen to the podcast, and we will see you again, listen to you again in a few days. Thanks.