Grow Your Business in Any Market | Lars Hedenborg

FULL AUDIO TRANSCRIPTION:

Justin Stoddart 0:01
So the big question is this. How do we those of us in the real estate industry with crazy amounts of ambition? How do we think bigger than the building of our own empires? How do we simultaneously see success and significance, income and impact? My name is Justin Stoddart, and this is the Think bigger real estate show.

Justin Stoddart 0:25
Alright, welcome back to the Think bigger real estate Show. I’m your host, Justin Stoddart. Today’s topic, grow your business in any market that’s right in any market. So we’re gonna be talking about that I have an absolute expert, the founder of Real Estate B School, Lars hadden Borg coming back at you here in just a minute.

Justin Stoddart 0:51
Alright, again, welcome back to the Think bigger real estate show. Today’s guests, we are going deep on how to grow your real estate business in the market, not how to survive, not how to be sure and get through this, grit your teeth and get through it. We’re gonna talk about how to grow and that today’s guest, that’s all he does. He helps people to grow spiritually. He is a Jesus follower. He’s a family man. He’s a best selling author. In addition to that, again, he is the founder of the real estate school. Mr. Lars Hedenborg. Thanks for coming on the show today, my friend. Yeah, man, this is gonna be good. These I feel like in some ways, you know, I was sort of made for for times like this. And maybe I feel a little bit more competent about it, having been through the crap show that was you know, 2000 789 1011 didn’t clear up till 2012 in my market. So, yes, it’s gonna be a good one. Good. Yeah, no, I think everybody’s kind of on pins and needles a little bit like what’s around the corner. But I think we can kind of get off those pins and needles, I’m gonna say like, it doesn’t really matter what’s around the corner, I can grow in any market. And that’s the confidence we want you to leave this after listening to this episode, is it okay? outside circumstances will be outside circumstances. But I’m going to be who I need to be to be sure that I continue to grow. Right. And I think that’s the beauty when you gain the confidence to do the right things. To know what those things are you able to double down and focus on them, then you can really step into the marketplace with that and be looking for the opportunities because in every down market, there always are. Lars. Let’s let’s talk a little bit about your background. How did you get into creating the real estate B school into really writing your book into being a leader in the marketplace? Like you are today? Yeah, and I think I could answer that question. Almost while getting into the topic, meaning, you know, I left a corporate job in 2007, you know, three months before inventory shot straight through the roof in, in my market, you know, it’s easy to look back and see that, you know, it was sort of falling apart on the west coast in 2005, and six, and it just took time to get to Charlotte, North Carolina. But I went from, you know, knowing nothing about real estate sales or marketing or systems or team building, you know, to 2007 Sold 27 homes 44 In my first full year in the business 2008 And then 58 118 178 248. And the thing, and the way that I’ll answer the question, I started real estate basical in early 2013, because the journey to doing what I did was really, really hard. And I paid a lot of money to a lot of different sort of gurus and experts. And some of them gave me the next step on the path. And then some of it was, you know, not necessarily moving me forward to my vision of you know, having a full blown multimillion dollar business. But without grinding out transactions and working evenings and weekends. And so I started real estate B school to help others build a sustainable business, but do it the right way and the right economic model. And the thing that I see now in the market is it’s what Miss makes me most excited for agents that are willing to not freak out. You know, there’s so much fear, uncertainty and doubt so FUD, fear, uncertainty and doubt massive amounts of just I think agent population is going to go, you know, and this is back in 2008 to 2010 11. In my market. It went from 15,000 agents in Charlotte, to 5000 licensed agents, most agents are so focused on all the news. They’re spending their days worrying about the future rather than just doing the core activities of and being relevant in a shifting market. And so I remember telling myself back in those days, most every day, I would tell myself like and it’s a double negative but this is the way that I said it. I said nobody tell me I can’t sell a home today so nobody can tell me so I had supreme confidence every day. I was gonna go out and sell at least one home and obviously I didn’t sell 365 home

Lars Hedenborg 5:00
Holmes, you know, it took me five, six years to figure that part out. But I was telling myself that every day and just the mindset of not giving up. And so I’ve got a lot more than I could cover. But that was kind of my journey and the mindset of just doing the core activities of a salesperson versus getting involved in the Fed. I love that florist. Because again, you think about just simply the time even it could be driving to and from the office could be driving to and from an appointment, that time that spent worrying, right, I’ve heard it said that we don’t live our dreams, because we’re too busy living our fears. I want everybody here that’s listening to this to audit how much time you’re spending about being concerned about what’s around the corner, as opposed to what Lars just taught us about focusing on doing the activities that we know will create a good, you know, a great outcome. And I think, at the foundational level, it has to be that we have to have some certainty. Even when there’s uncertainty, we have to create the certainty that if I do enough of these activities, there will be an outcome that I’m going to like right at the other side of it, it just simply replacing the time, let alone the emotional toll that worrying about the future has upon us isn’t good for our energy and our confidence in the way we show up in those appointments. So I love it, man. So good. Let’s let’s move on kind of to once people get the right mindset, they’re really committed to auditing their own self talk auditing the inputs that are coming in, what is it that real estate agents that you’re seeing in this market right now that you would advise again, having lived through and even thrived through a massive real estate and economic downturn? What are the activities that you see agents doing, and that you believe they need to do to be sure that they do continue to grow in any market that we see. I mean, I wish it was something simpler than what I’m about to get into. And it really doesn’t matter what you’re, you know, if if you’re like all referral business and having conversations with people, you know, if that’s sort of your your unique gifting, and that’s what your business is based on, or, you know, if it’s generating home search leads, and you know, you need to sort of dial in those follow up systems and make two to three times more more contacts. But for me, the most successful agents and this was me back in those days, I had time blocked, and I stuck to my time blocks 12 to 15 hours a week of new business development. And new business development is having a conversation with someone that you have not had a conversation with yet. So I was real good at generating, you know, maybe two or three different lead sources. And just putting the lead management systems in place, the text sequences or the email sequences, or even some direct mail to certain seller leads to make sure that I was top of mind because only 5% Were ready to transact. So all of my focus was on lead generating activities, lead nurture, you know, which is lead follow up and then ultimately setting consultations, but only consultations with qualified buyers and sellers. So I think the litmus test is to be honest with yourself, how much of your day is spent in new business development activities? And I could say that, you know, what I did back then is not what I’m doing now. So I’m, I’m not in active real estate sales right now. And right before we hit record, or you came on, I was watching a YouTube video on like potential diesel oil shortages and like, so I was in a YouTube rabbit hole doing exact opposite of what I’m telling y’all to do. If you’re going to be relevant and successful in real estate sales, you cannot watch hardly any news, you know. So that was something I was really sort of militant about. I did not let anything get into my brain. Outside of you know, I listened to mrea a double, probably a dozen times on the little discs that I carried around. I had a bunch of Tony Robbins stuff. I was big on Tony Robbins and Jim Rohn. I had a whole big binder of CDs that I would just play in my car as I was going from appointment to appointment, like you said so. But then just doing the core activities and actually tracking your activities. And knowing how many meaningful conversations it takes to get a buyer consultations. It’s very simple, but it’s not always easy. I think there’s there’s all kinds of golden nuggets you’ve shared with us there. Lars right. One that stands out to me is this concept of being very clear that the business of the media and the job of the media are two separate things. Those that I coached notice I do listen to him readily, which is the job of the media is to inform us of what’s happening. The business of the media is to keep our attention so they can sell us ads. human psychology has proven the fact that sensational news creates more attention than that than the normal stuff. And so, the business of the media is much bigger than the job of the media, right? They focus on that more, so they’re always looking for the worst possible

Justin Stoddart 10:00
couple scenarios, all the things that Lars just told you, right? That to be aware of that is how the media keeps your attention. And so we need to be very clear that there is a very, very limited amount, if any, that goes towards sensationalized media, right, which is most of the news that we see out there is sensationalized, there’s some stuff that you can grab, that will inform you. But be very, very careful about the rest of that, you know, and I think you also put up a very valid point, Lars is that you either need to talk to more people, or you need to talk to better people. And I say better people, people that are more qualified, if at the end of the day, you need to be in conversation with people that are going to transact. And you can either go through the numbers, or you can use models and methodologies that get you to a better, more qualified clientele. And I think having that honest conversation in places is absolutely brilliant. Talk to us about the changes between 2021 and 2022. Right, I don’t know exactly what people are gonna be listening to this. But are there certain things that if if you were to get back in production right now, Lars, what do you feel like are the opportunities because that’s the other end of the spectrum is it could be the sky is falling or no? Like now the clouds are parting now there’s opportunity now is when the herd of people that are not qualified or not willing to become skill based, are exiting, there’s an opportunity, what what do you see as the big opportunity in this market? Yeah, I mean, I did really well. And we continue to do really well. And just to expire, expireds and direct mail to expire. So I was always really good at never really like picking up the phone to call expireds I thought that was a bit of a grind. I think one guy was kind of mean to me in the early days. And so I wasn’t a you know, a pounding the phones kind of guy. But just clever direct mail sequences to expires, I think they’re going to come back with a vengeance over the next 123 years or so I think sellers are gonna, that missed the mark on pricing, and they don’t have strong agents, which he didn’t really have to be in these last, you know, 1224 months, anything that was listed had multiple offers. And I think those days are gone. So I would be focused on putting expired systems into place and having it’s about 80 to 90% of its administrative once you get the system set up. But I would have expireds calling me I got up to 92 listings, this is just me, i They weren’t all selling, but I remember I had 92 listings before I hired my second administrator had a closing coordinator who acted as my listing manager, and I got up to 92 listings, and it was on expires and I think they’re gonna, they’re gonna come back really strong and just build systems around the direct mail component and you know, when you meet with them, and they’re not quite ready, or you’re not strong enough to, to convince them that the market has shifted, you know, you may be the next agent, you know, that they that they transact with I remember my last the last transaction that I was the agent on grids. And you know, we’ve sold a lot of homes as a team, but it was January 2012 When I was the seventh the seventh agent that he hired he started at 2.5 million and it was a his wife had passed away and so there was some emotion around it but finally at agent number seven and I was able to those are the highest price of my of my career was my last transaction that I was the named agent on so but yeah, I think I think there’s gonna be a lot of business if you focus on folks that are not, you know, not in reality around pricing. I think that’s that’s a huge opportunity right that you’ve exposed is that the right sellers have been kind of writing their own their own check for a while and they’ve been able to get away with it and many of them are unable to let go of the fact that I’m not going to get that much for my house yet they still want to sell they still need to sell and as you identified many agents are not skill based enough to be able to have those conversations give people a taste of what’s happening now in the market. And I do believe that whether they expire or whether people just decide to choose a different agent wallets so I think there’s there’s tons of opportunity there and I love that you said that talk to us a little bit about what other opportunities you see obviously the foreclosure market we may very well see come back as well. Are there other things you’ve got your eye on? It’s like you know the people that you know that you do you interact with three they’re having success with this or you feel confident that they will very, very soon. I mean it’s it’s because you mentioned I’ll bring it up I remember when when distressed sales were ramping up like crazy in my market and right or wrong. I made the decision not to pursue that avenue so I think we got up to like 30% of the transactions in my market went were either short sale or or bank foreclosures and I remember after the fact being really happy that I never went down that path but what I did do was I advertised those those properties. So I was able to come up with these clever ads around you know bank owned properties builder close outs distressed

Lars Hedenborg 15:00
hills. And so I was able to use marketing around other people have thing, you know, working with banks, it doesn’t pay that great and and I don’t know I’ve never done it, but I got really good at taking advantage and exploiting those those properties

Lars Hedenborg 15:16
and generating, you know, good buyers from those properties. But in terms of other opportunities in this market, I’m just trying to think of, I still think using distressed sale properties to generate buyer leads, that’s what I would, I would focus on expireds will database for sure.

Lars Hedenborg 15:37
And there are some guys in like in real estate school that focus on, you know, like, kind of like you teach on the referral side, but the one to many on the, you know, working with attorneys and estate attorneys and all that stuff, and they crush that in their markets. And then just your core database,

Lars Hedenborg 15:57
and then distress. So matching the marketing to the market searching for buyers, I would personally avoid bank owned and short sales, again, if I were producing in this market, and then just focusing on getting listings from the difference between this market and the market of 2007 2008 is the there’s massive equity positions and homes. So if somebody loses their job and they’re selling their home, chances are they’re not necessarily going to be in a distressed sale situation, they have the ability to sell even if it’s not for their price. So, but I will keep it simple. I’ll give one example, a guy that had coached went from like 65, transactions to 105 to 175 to 225, and a four year period. And to get from 65 to 105 to 175. I made him go from four paid lead sources to only one. So it was subtracting and going deeper on a given paid lead source and figuring out the nuts and bolts and increasing conversion. And then to get from 175 to 225 and 275. We only added back one. And it happened to be because everyone asked the question, what was the lead source was realtor.com was a still a lead source that he gets 13 times return on which is like, unbelievably, you know, which is awesome when you compare it to like a Zillow flex, where you’ve got to pay 35% which is by definition, a three to one return. But I would keep it simple, you know, keep it really simple expireds database, home search, distressed sale, buyers, and then maybe one paid lead source if you needed to support a team, you know, with like realtor.com leads or whatnot. I think it really interesting this concept of pruning the tree, right? Oftentimes, we think we’re gonna get further by having more lions in the water, when the one line that we do have in the water is ill equipped, there’s no bait, it’s a lousy half dead worm, right? Like, there’s so much more that we can do, I think when we choose the right ones that fit our personality that we’re willing to get up and do work on every day, and really gain deep proficiency in that thing, right? For me, I work very closely with many times people who have come out of kind of corporate professional careers, they’re very strong when it comes to a business strategy, strong business networks. And it’s just natural for them to have business level conversations with other business owners. And so the upstream model where you’re dealing with, as you described, right attorneys, CPAs, lenders, financial advisors, etc, is very natural for them. And they’re able to tap in and create a warm referral flow, that’s a great fit for them, whereas others who come out of a different environment, that’s their that’s not their thing, right? And they don’t they don’t love it. And I believe you know, what you said is very valid is that get really good at less not try and be okay at lots. And that’s that that kind of quest for mediocrity isn’t isn’t what actually pays you, right? And other people, like, actually aspire to that. But that’s what ends up happening because they think, Well, this one isn’t developing. So I’m gonna go put another one and I’m gonna go put another one in. So that just get really, really good at the ones that that light you up and actually produce the kind of customers that you want to work with. In fact, I love the fact that you said I didn’t. I didn’t do bank on stuff, right? didn’t love it, right? You didn’t love the conversation of the whole process that you had to implement to make those things work. So I think they’re now I would add one thing kind of picking up on something that you said, you know, I had a mindset and i don’t know i don’t think i was coached to this but I remember thinking like I’m not going to start a lead source if I didn’t see a clear path to 50 transactions on that particular lead source. So like your database but but then also get like most of the way there before you launch your second lead source. So you know, I generated home search leads, I forget what the lead source was it probably it was Craigslist back in the day. So I have my database in Craigslist. And that got me probably to the year we did about 58 transactions. Then when I went to 118 transactions, I think I added it

Justin Stoddart 19:59
spires like I went really hard at expires direct mail. And that that probably was another 30 or 40 transactions. So I kind of had like pillars moving sort of toward these 50 transactions. So the year when we did 240 deals, we only had four or five lead sources. So it wasn’t, you know, I’ll go into a business that does 500 deals, and they’ll have like 50 lead sources, and it’s like, combing through where they’re spending their money is like, but that’s only $300 a month, you know, for that lead source or, but it’s like, cut everything out, that doesn’t give you five deals, and, you know, just go harder and go deeper on the ones that you know, have a direct path to fit the transaction. So I still think it’s a good mindset, even if you don’t want to scale. I mean, there’s lots of agents out there that don’t want to sell, you know, 100 150 200 homes, they can’t wrap their mind around it. But I would still just get good at one or two things. So you can just really sort of dial in what your expertise is. And then not have to sort of mess around with all these things that you’re marginally good at. You know, there’s nothing better than being really good at something. It’s really fun. Where it gets really fun when you know, you’ve really gained mastery over something you just can’t do that by trying so many things are trying until you get a little bit of flow and then you jump to the next one. I think Grant Cardone has been on the show had mentioned that you get one lead source pumping like absolutely going just like you said, Lars, get it to that point and then go to the next one. Right but this kind of like well, I’ll I’ll start all these lines in the water. Just I agree with you wholeheartedly. Lars want to talk about your book scale or die. In fact, if anybody’s here listening, interested in the great book, scale or die book.com from a guy who knows how to scale, tell us just quick synopsis of the book Lars yet I’ll kind of give it give the subtitle achieve true freedom in your real estate business and live your life without regrets. So, you know, the motivation for the book was I just see so many real estate agents giving away so much of the good stuff to and sacrificing so much for the for their business. And it’s this mindset that we don’t have to, you know, I hate to liken it to a McDonald’s franchise. But one of the books I was exposed to like in like maybe my first month in real estate was E Myth Revisited by Michael Gerber and just the mindset of like, how would you think about your business differently if you had to replicate it 10,000 times? And having that question, sort of just embedded into me at such an early point in my business growth journey. It’s like holy cow as a real estate agent, if, if I had to have 10,000 locations, like you literally couldn’t do anything. So how would I have to be showing homes in 10,000 different markets going on listing appointments in 10,000, I definitely couldn’t put signs up, I couldn’t put lockboxes out I couldn’t, you know the 85 90% of the real estate agents jobs that’s essentially administrative in nature. And so there’s a way to do it. There’s this cycle, attract, convert deliver that an agent, you know, they attract a lead, they convert it, they serve deliver on the promise, they show homes, but they don’t have anything running in the system. So it’s this sort of vicious cycle where nothing is attracting or converting while they’re delivering, you know, but if you put systems around around all of those, you have a shot of actually getting this thing to take on a life of its own and, and so that’s what the book covers. And if you want to go past like the attract, convert, deliver and embedding systems in your business can get you 2 million GCI. If you want to scale your business, there’s sort of three other drivers that we talked about in the book that can get you to 234 million and beyond, but it’s really coming into it with the mindset that I want to be a business owner, maybe if you’re like me, you’re not in love with the game of like helping a buyer or helping a seller that just wasn’t, you know, I think God just wired me differently in some ways. And so that was the nature of the book is just to show the path step by step, how to grow and scale a business that really serves your life instead of some of these businesses that you know, are there mirage. I’ve coached into, you know, five, 6 million GCI top line businesses where, you know, the owners essentially losing money when you take their personal production out of it. And that’s not the kind of business that you want. That’s the kind of business that leads to a very stressful life, and lack of fulfillment. I love that. And it was interesting us talking about the good things of life. I was sitting in a hammock with my son last night and we’re looking at pictures from his youth and smiling and laughing I thought you know what? A business that can produce opportunities like this, right? Regardless if you’re in some fancy hotel or not. Sometimes it’s the simple things in life and just having the freedom to be able to be present with those you love the most are the good things of life. So be sure build a business that does that. Lars got one more question for you as we as we wrap

Lars Hedenborg 25:00
But you’ve answered that you’ve answered this before, I don’t want to ask you again, which is you are a big thinker. That’s why you’re here, I would love to hear what you are doing now to continue to be a big thinker to continue to expand your own personal possibilities. Wow, that’s a loaded question. I’m going to take like a split second to see which direction I want to go, I am gonna go the direction, that’s probably a little bit controversial, but I’ll go there anyway. So without having fear around it.

Justin Stoddart 25:30
And having a deep sense of faith and calm.

Lars Hedenborg 25:34
I just think there’s some, some not so great stuff that’s coming, coming down. And in terms of, you know, just economic stuff and markets correcting and, and it’s hard to do it with the politics of sides sort of thing. But the reason I’ll bring it up in terms of thinking bigger, you need to, the only thing we can protect is our mindset and the daily actions that we that we take. So So on the one hand, it’s it’s some level of preparedness around what is happening and what might happen. But also with this sort of optimism around, like, I think we’re going to be in a better place, when we get to the other side of of some of the just economic stuff that we’ve been kicking down the road, make sure you’re in a good mindset, on a continuous basis, whatever that is, I mean, I am constantly listening to a book on Audible, you know, a podcast that sort of nourishes me, I’m in, I do the abide meditation app every day, you know, so make sure you’re feeding yourself the right way. This is not the time where you want to sort of neglect your physical body, you’re not going to be able to perform at a high level in any sort of chaotic times, if you’re neglecting if you’re using the chaos as an excuse to maybe drink or eat in a way that’s not not serving you. And so that could lead to some tough decisions. To prepare your body for probably more output, like I think we’re gonna have to work two to three times harder to get through some of this chaos that’s coming our way. And I don’t say any of that out of a fear based sentiment more just to make sure you’re preparing yourself, you’re preparing your family, for for anything that might happen. And I think it’s I think it’s healthy. I think, the reality going back to what we said before, if you find a way to do this business that you love,

Justin Stoddart 27:40
I’ll own a phone a friend, one of the thing around that is it, there’s nothing that makes you feel better and happier than serving other people who need you. Right? I think that’s at the core of who we are. The spiritual DNA of how we were made, is that we are designed to serve and lift other people. And the reality is people are going to need leadership right now they’re going to need to be served. And so if you love the way you do this business, and you love serving people, regardless of what happens here, economically, number one you can grow. Number two, you can be deeply satisfied. So please take what Lars said, and realize that it’s an opportunity for you to actually grow in all kinds of ways, right in all kinds of ways. Not just not just in your business, also in your business, but in all kinds of ways you should we should all be excited about whatever changes are coming because if you’re prepared, you don’t need to fear right, you do not need the fear. Now, Lars wanna thank you so much for your time for being a great human. And being a great leader and being willing to pour into not just this community, but many, many more appreciate your friendship. Yeah, Brother, keep doing what you do. Appreciate it. And for everybody listening here today. My final request is this. Go think bigger. Lars, thanks for helping us do that today. My friend appreciate.

Justin Stoddart 28:54
If you enjoy this episode that I have a very special invitation for you. I have created a private Facebook community called successful real estate agents, where the focus is going beyond success having both a successful business and a significant life. If you’re not yet a member. Go sign up now.