Road to $20 Million

by Shane Torres

  The level of exposure was huge because it put me at the head table. It put me on the Partnership Executive Board which is year after year named the most influential board in Central Iowa. I used to joke that it was 19 important people and me.

  When I went to the D.C. trip that year, I had to speak in front of those 200 people I was with as chamber president the 2 years before. Now, I’m a small town Iowa kid and I was sitting at dinner with the head general of Iowa military and congressmen and senators and CEOs — all for $165 bucks a year.

  To this day it has been the best investment in my business, by far.

  The entire time, I was also farming in specific markets. Most people think about farming as just applying to mailers, but it’s not. It’s being seen in any form or fashion you can. I was still doing the mailers, but I was starting to dabble a little bit in other areas as well. I started sponsoring some baseball teams and getting a little bit more involved in sponsoring the booster club and the high school.

  After about 18 months, whether it was on the listing side or the buying side, our group was (and still is) involved in over 90% of the transactions in this smaller town.

  In early 2013 I started to think, “You know, this is not that hard.” I don’t understand why other people aren’t getting involved, why they’re not farming their own community.

  To this day, I preach these things and people still don’t do it. Most people sign up for the chamber as an example and they think, “Oh, I didn’t get anything on my return.”

  So I ask:

  “Well, how many events did you go to?”

  “Well, none.”

  “How many committees are you on?”

  “Well, none.”

  “Well, what did you expect to get?”

  One gentleman, who owned a local bar, got frustrated once and said, “I don’t wanna do it anymore. I spend money doing this and doing that and over at that school —do you think they come over here? Do you think they come into my establishment after those games?” and I said, “When was the last time you went to a basketball game?”

  “What do you mean?”

  “When was the last time you went to any event?”

  “Well, I haven’t.”

  “Well, they don’t know you. Why do you expect them to come into your establishment?”

  Just because you give money to something doesn’t mean they’re gonna show up. They don’t know you.

  Hiring employees again

  The scariest thing I ever did after losing what I did in 2009, was bringing on that first full-time employee in 2012. That person who’s getting paid whether you’re making money or not. Their family now depends on you. When I added her to the team, our production doubled. Her salary at the time was $28-$30,000 and we were making an additional $70,000. That absolutely makes sense from a business perspective.

  And before we knew it, we were all at capacity so we brought on another full time employee and we doubled our production again. Again we hit capacity, so we brought on another person, and we doubled again. Once you hit a certain point, you stop doubling. You still grow but not double. For the first few years however, we doubled year over year.

  As a result of that growth, in 2013, I decided to transform the team office into a full office. It felt like we had achieved a level of success that others may not see in a lifetime — all in a few short years.

  In the past, I had been very secretive of the things I had been doing that led to our success. Now though, I thought, instead of keeping this a secret, why don’t I help the others around me in our company be successful? Not one person can do it all, so why not make others successful? Around that time, I was also given the opportunity to buy the RE/MAX Concepts office in Ankeny, Iowa which would allow me to share my knowledge and help other agents with their success. In 2015, I opened another office in Ames. I also partner-owned three offices in what I consider the northern Des Moines metro territory. My motivation was that I wanted to help people be better versions of themselves.

  When I started buying the additional offices, I decided to scale back on working with buyers. I had the Team agents do day to day things and I just managed the company, I worked with a very select few buyers and I focused primarily on listings, managing systems and people, and helping mentor.

  By 2014, I had also let go of listings. I went on very few listing appointments. If I did have meetings to do with listings, they were select listings and they were also developer-builder type meetings. My focus was (and still is) more around managing systems day to day.

  Our market share and our production was growing. In 2013 and 2014 we stayed about the same in production which was around $24 million. Then in 2015 it jumped to $32 million. In 2016, it was over $40 million. I wasn’t even a full-fledged owner in Real Estate Concepts at that point, just a partner in a few offices. Honestly, from a business perspective, I didn’t really care what the production was, I was making decisions based on where I wanted to spend my time.

  I know people in this business who make a million-plus a year. They make a lot of money. But they’re in their fifties and sixties and they have no family. They have no kids. They have nothing but money. They’re literally miserable and that’s no way to live.

  The agents who thrive in this business have certain characteristics that make them great at what they do. They’re organized. They put their family first. Nothing gets in the way of that. They’re involved. And by involved, I mean they’re in other groups, other organizations. It could be a church or it could be anything else where they are part of a community.

  But their biggest asset is that they’re just calm. If a deal falls apart, it happens. They don’t get worked up. It’s just part of business. It’s a common trait in almost all of them.

  Getting into flips and home building

  We had up to 15 investors doing flips or rentals that we worked with regularly.

  One of my biggest investors asked me at one point, “Hey, would you have an interest in this?” And my first reaction was, “No.” After a period of saying no, I started thinking, “Well, why not?” So, if there was a deal that they didn’t want, I’d maybe look at it and if it made sense, I would do it. I didn’t want to do it at large scale because I didn’t want to compete with my clients.

  I did two in one year and I skipped a year without doing any. Around the beginning of 2016, I had a situation where the builder that I was working with took a big hit during the housing crisis and they were a bit reserved, which I respect. We had some clients who wanted to build a house and so I went to a developer I knew and asked, “Hey, can I buy this lot?” and he said, “Well, no, but I have eight left. I’ll sell you eight.”

  “I don’t want eight. I only want one. How about I buy two?” and he came back with,

  “How about eight?”

  This went on for a few months and finally I bought all eight lots. Then the client that I originally bought them for backed out of the deal which left me stuck with eight lots, so now what do I do?

  I told the developer what had just happened and he said something to me that really resonated. I said, “Now I’m stuck with eight lots. I never wanted to be back into this and now here I am.” He said, “Yeah, but if you control the land, you control the building.”

  So my solution was to put up listings with proposed constructions. I started to generate custom home orders from the listings. The builder would then buy my lot from me and build the custom home orders. This went well for a while, so I decided to do a little bit more. I started financing the deals myself, meaning I would do the construction loans, the builder would build it and we’d split the profit. In addition, we’d make our real estate fee.

  That went on for about a year and because some of those projects weren’t as profitable as they could have been, I decided to take an on another initiative to control the expenses. I had a full staff, a marketing team, an in-house accountant — I had everything I needed to take the next step.

  So, I starte
d my own building company. I went to both of those other people and said, “Hey, this is what I’m gonna do. Do you guys wanna be a part of it?” One guy said “Yeah” – who is now the project manager. He runs both construction companies. So, I started a home building company and now it runs on its own. I have to answer questions every now and then, but the same guy that I worked for listing his homes for years runs my company.

  Again, it was just opportunity. I was trying to figure out a way to get deals done.

  We always carried a high listing inventory but we also helped create my own listing inventory. It’s pretty cool when my team sells the buy-side and list-side of one of our construction properties.

  Buying RE/MAX concepts

  In March 2016, I was attending a RE/MAX Conference in Arizona, with my current partners and the owner of our company at the time. We were standing around at a networking event when the owner, completely out of the blue, said “I want you four to buy me out.” His initial proposal was for him to retain the servicing company, while we purchased the existing offices.

  After months of research and negotiation, the four of us purchased both the existing offices and servicing company for RE/MAX Real Estate Concepts on November 1st, 2016.

  Currently, RE/MAX Concepts agents are the #2 ranked real estate company in the state of Iowa and the largest RE/MAX in Nebraska and Iowa. Our focus, from the time we purchased the offices and servicing company, has been to help every agent grow and succeed to the best of their ability. I am very honored and proud to be a part of all they have accomplished.

  It’s strange how things come full circle...

  Back in 2010, when I was doing odd construction jobs to make ends meet, the last job that I did for my friend who had the construction company, was putting the deck around a historic mansion in Des Moines on Grand Avenue. At the time, the people were getting ready to use it as a law firm.

  In early 2017, one of my partners called and said, “Hey, we should try to buy this place.” We were trying to move one of our offices downtown. As I looked it up, I realized the place he wanted to buy was the mansion I had worked on — the last deck project that I had done for my friend. It’s probably one of the neatest things in regards to my story. Within essentially seven years, I went from bankruptcy to owning the mansion that I had worked on to make ends meet.

  So much can happen in real estate in a short time IF you’re committed to your own success!

  PART THREE:

  THE ROADMAP

  While the road I took to get to $20M and beyond may look slightly different than yours, there are some fundamental directions I can provide you to help you achieve the level of success you’re looking for. Part Three is The Roadmap and it consists of several steps for you to take to achieve the same, each of which you’ll read about in the coming chapters.

  The Roadmap that I lay out in this section isn’t for everyone, because not everyone will share the exact same values, personalities, or work ethic. Perhaps selling $20M or more in real estate isn’t a goal for you, but building a business that works FOR you, not BECAUSE of you is. You’ll get an immense amount of value from the following pages.

  Chapter Seven:

  Determine Your Destination

  Twenty million in real estate is not what I had set out to do.

  I was going to do my best with these two things in mind — my family would come first in building this business, and I had nothing to lose (because I’d basically lost it already!).

  For your own personal journey on the road to $20M, the first step is getting crystal clear on the vision for your business.

  Create your vision

  Creating your vision is taking the dreams that you have for your life, and for your career, and planning each detail out to be so crystal clear, it becomes the blueprint you leverage to determine your goals and build your reality.

  Get specific on how you’ll spend your time, what kind of clients you’ll work with, where the business will come from, how you’ll grow and learn through the process, and ultimately, what the numbers are that you’re looking to hit from a sales and income perspective.

  Put these numbers around you everywhere so you see them throughout the day. Get your family, friends, and co-workers on the same page as you so they become your accountability partners.

  I cannot state firmly enough how important a dialed in vision of your business is. The more clear the vision, the more likely it will happen.

  Know your why

  I encourage you to know your “why.” Why do you want a business like this? What does it/will it give you? Why are you in real estate in the first place? Why do you get up every morning excited to do more of this work?

  For those that know their why, the days become that much easier when prospects aren’t returning calls, agents aren’t answering emails, or deals bomb at the last minute because of the lender.

  What are your values?

  In addition to your vision and your why, determine what your values are. Especially those that you’ll forever be committed to in your business.

  I’m often asked how I achieved balance between work and family and the answer is simple. Family is one of my highest values. Take a look at my calendar and you’ll see the times marked off for family take a higher priority than any last minute client request.

  The goals that you’re setting need to be aligned with your values. In fact, they should support them. So if exercise or health is a high priority for you, you’ll have to align your priorities to achieve the goal of being healthy. Particularly in a business like this that can occupy ALL of your time if you let it.

  You can build a business in real estate that serves your life if you remember the following elements of the first Roadmap:

  1. Know your why. This business can be both challenging and rewarding. By knowing why you are in real estate, you’ll be able to weather all of the emotional, financial and time challenges along the way without second guessing your decision to get in this business in the first place.

  2. Define your core values. What 4 or 5 values will you commit to living your life and business with? Once you know what these are, your business decisions become far easier. As an example, if security is one of your core values, you may not take the risks that I took in my business and instead opt for more “sure thing” investments.

  3. Establish your vision for success. Your vision will change over time. When I started in real estate, my focus was to save my family’s home and get out of the mess I was in. I hit $20 Million in production in less than four years.We’ve since blown past that number as a team and the vision has grown with my growing team and businesses. Yours will too, and to get there you must establish a crystal clear vision for what success looks like NOW. Post it everywhere as a reminder of what you’re working for.

  Chapter Eight:

  Plan For Passengers

  This chapter is probably one of the most important of all in the Road To $20 Million.

  This is simply because while you may be the only one in your family that’s in real estate, your entire family is actually in real estate with you. This business has a tendency to take over family schedules, change the dynamic between husbands and wives, and can become like a needy child if you don’t set it up right.

  The next roadmap is to Plan For Passengers.

  The “passengers” I refer to could be spouses, family, partners in business, mentors and others in your network. Whether you’re new to the business or you’ve been selling homes for awhile, this roadmap is an essential piece of getting to $20M.

  The main objective is to consider the people you’re surrounding yourself with on your journey and talking about (and setting) expectations ahead of time.

  Your support structure in real estate begins at home.

  Your spouse or significant other has as much a role to play in your success as anyone on your real estate team. One of the most important things my wife and I did was set the expectations about when I’d work and when I woul
dn’t.

  Again, knowing that family is one of my core values, if I’m committed to making all of my kids’ events, I can easily tell clients “I have an appointment” and stay true to that value.

  What I see more than anything in real estate is sacrificing family or spouses for the business. It’s a surefire way to have a significant other that begins to resent what you do for a living. After all, it may start to feel like you’re trading one for the other.

  Inside The Road To $20 Million Course we go into detail about how to create The Spouse Agreement which includes the critical questions you both must ask each other. The Spouse Agreement will help you align your priorities to maintain a positive balance at home and at work, as well as a support structure on the road ahead.

  To get started though, simply having the conversation with your spouse is a great place to start. Define when you’ll work and when you won’t and communicate this to your spouse.

  It’s just as critical to have on-going expectation conversations with your partners, team members, lenders, inspectors, and support staff. Ultimately, real estate is a team sport. Nothing closes without first being touched by a number of people. So, clarifying expectations up front with the people you work with helps make sure you won’t be blindsided by issues later.

  As an example, I encourage real estate agents to communicate expectations to lenders that if anything appears to be holding up a transaction to keep them (the real estate agent) updated. Every agent has been burned at one point or another with a deal bombing at the last minute for reasons that could’ve been addressed up front.

  In Part Two I wrote about how I leveraged relationships and my network to build the business.