Mar 29, 2022
When it comes to scaling the business, delegation becomes key. Lars pointed out that in this process, your mindset is number one. How do you implement systems with efficiency so you won’t have too much stress?
Lars Hedenborg helps real estate agents scale their businesses without losing their lives. He has served over 5,000 families and his real estate career as the creator of the Real Estate Team Builders podcast and author of Scale or Die!: Achieve True Freedom in Your Real Estate Business & Live Your Life Without Regrets.
[00:01 - 05:29] Opening Segment
- Lars on starting with divorce, alcoholism, and no money
- Picking up the business mentality and building the springboard to success
- Why you should delegate to give way to passion
[05:30 - 12:53] Establishing Accountability through Delegation
- The mindset game in hiring and accountability
- Positioning yourself of value in your niche
- Implementing systems and crafting efficient protocols
[12:54 - 17:58] The Realities of Scaling and How to Overcome Them
- Scaling and growing teams in the organization
- Running calculations for estimating hours spent and income generated
[17:59 - 18:58] Closing Segment
- Reach out to Lars
-
- See links below
- Final words
Tweetable Quotes
“It really was just a mindset around like, hey, all the things I do all day long, are like, are they really the most dollar productive things I can be doing? And how could I delegate certain activities or certain outcomes or certain positions in my business?” - Lars Hedenborg
“When you break it [the business] down… What's the one or two or three things you could do that will yield the biggest results? And how can you, you know, over time, just work your way into only doing those things?” - Lars Hedenborg
“Choose your heart… What are you going to cut out so that you can live a bigger life?” - Lars Hedenborg
-----------------------------------------------------------------------------
Connect with Lars Hedenborg on Linkedin. Visit his podcast and email him at lars@realestatebschool.com
Connect with me:
I love helping others place money outside of traditional investments that both diversify a strategy and provide solid predictable returns.
Like, subscribe, and leave us a review on Apple Podcasts, Spotify, Google Podcasts, or whatever platform you listen on. Thank you for tuning in!
Email me → sam@brickeninvestmentgroup.com
Want to read the full show notes of the episode? Check it out below:
Lars Hedenborg 00:00
Choose your hard, like, there is no easy way to live a big life. You know, like, nobody's listening to your podcast if they want to live a small life, you know? So it's choose your heart. It's like, what are you going to cut out so that you can live a bigger life? You know, and it could mean sports, it could mean Netflix, it could mean alcohol or crappy food or just the things that aren't serving like this big vision like we can say, we want to achieve at a high level but are you actually doing the things you know a route called C 12. Were the guiding principle the group are its priorities are what we do. Everything else is just talk.
Intro 00:38
Welcome to the How to Scale Commercial Real Estate Show. Whether you are an active or passive investor, we will teach you how to scale your real estate investing business into something big.
Sam Wilson 00:50
Lars Hedenborg helps real estate agents scale their business without losing their lives. He has served over 5000 families and his real estate career as the creator of the real estate team builders podcast and author of scale or die. book.com. Lars, welcome to the show. But before you even say anything, tell us what just happened here. Just a few seconds ago.
Lars Hedenborg 01:11
Yeah, 222. Probably now 22 seconds on to 2222. It's a rare event. I don't know how often this has happened. So we took a moment of silence to honor the even numbers of 222. But man, it's awesome to be on. Let me know how it can serve your audience.
Sam Wilson 01:28
Hey, man, there's three questions I asked every guest who comes on the show in 90 seconds or less. Can you tell me where did you start? Where are you now? And how did you get there?
Lars Hedenborg 01:35
Yeah, started from like, divorce, alcoholism, no money lower, and like just lower class. But I saw my mom hustle and work hard as a business owner. I adopted that mentality into corporate America achieved a pretty high level in corporate America shifted into residential real estate, and figured out that I could do the kind of the work of 10 men or I could teach 10 men work. And I figured out leverage and systems and, you know, 5000 families served on the residential real estate side, I started a coaching company in 2013, and serving hundreds of team builders in that world. And now I'm building out something with even more leverage in a cloud-based brokerage environment. And I'm a husband and a dad and I fail and succeed in those roles every day. So I think that's roughly 97.
Sam Wilson 02:21
Man, that's absolutely fantastic. I love that. I mean, obviously don't love the part of the you know, your story, we are coming from a challenging background. But one the ability to use that as a springboard into doing great things. I think so often we are told or constrained by the history behind us, right? We will say, well, that's your history is that's what you become the future. And you've chosen to do something very different, which is always a compelling story. Talk to us, then you know about what your journey was inside of that. Because most of us aren't born with this unique ability to go out and build great systems and build great teams. It's something we learn over time. Can you tell us that process for you?
Lars Hedenborg 02:28
Yeah, so I think it was mostly the mindset around it, like I was newly married in 2006, coming off that corporate job early 2007, got into real estate, just after that left a multiple six-figure, like super cozy, I was leading acquisitions and strategy for an aerospace company. But then you get into real estate and you're like, instantly, like you're your own admin, you're like, you're running around town and doing like all this stuff that doesn't pay anything, right? When you compare it to like, hey, at my corporate job, there was somebody that came in after we left, and they emptied the garbage cans, and they, you know, somebody would book my travel and make photocopies for me. And so just the principles of leverage at the basic level did not exist in real estate when I got into real estate. And so the game I played was from an early on, like when I got in the industry is like, how can I make a seven-figure income working 1000 hours a year. And so a 40-hour workweek is roughly 2000 hours in a year with two weeks off, and I wanted to work 20 hours a week, but I wanted to make a seven-figure income. And it hasn't always been that but the the mindset game is that I didn't want to make the most amount of money and work, you know, Elon Musk sort of hours, you know, the 120 130 hours a week and sort of, you know, never leave the office kind of thing. I didn't want to change the world. I just wanted to change my world, my family's trajectory, because my wife came from, you know, similar sort of meager, meager start with her family background. And so it really was just a mindset around like, hey, all the things I do all day long, are like, are they really the most dollar productive things I can be doing? And how could I delegate certain activities or certain outcomes or certain positions in my business, you know, so that I can focus more time doing things that brought in more income and just every 90 days for like, still, I'm doing it still I'm looking at like my passion, the things I'm passionate about and the things that pay really well. You could spend a whole lot of your time doing things you're passionate about, but they just Don't pay well, like, if you're a real estate agent and you love designing brochures for your listings, you can be like super passionate about it. But that's not highly paid. Like there's no upside in that new business development is one thing that you could not be passionate about. But it pays really, really well. So you don't get to give up all the activities, just the things that are low pay, and you just cycle through that every 90 days, and just you get 90 days to get the things off of your plate that are low pay high Passion, low pay low passion.
Sam Wilson 05:30
That's a really great way to do that. And one of the challenges I think that anybody faces, whether it's commercial real estate, whether you're a real estate agent, a commercial broker, whatever you are, is that maybe starting out of the gate, you don't have the pocketbook to necessarily pay someone else to take on those tasks like, well, I can't afford really to bring somebody else on to do my brochures, because I'm not generating enough revenue yet, or I'm not making money as it is. So what do you say to that?
Lars Hedenborg 05:56
Yeah, I mean, I think when folks consider making that first hire, I mean, I think that's the biggest mindset actually just did a podcast with one of my members who you know, started as a solo agent. Last year, she sold 648 homes for 6 million top-line, super profitable business. And when she contemplated she was six years as solo agent, she contemplated her first hire, and she only hired the administrator, she was like, 24/7, for eight hours a week, she couldn't even mentally wrap her head around like a full-on, like, clearly, she could have instantly used probably two full-time administrators. I think it's just the mindset in our space. And it's probably similar in every space where your income is technically Unlimited, but you limit yourself because you fill your hours with the tasks that, you know, really anyone can do if you sort of layout exactly how to do it. So I think it's just a mental game. In terms of deciding, like, I remember, my first year in real estate, I netted 37 grand on like, 250 Gross. So I spend a whole had a bad relationship with my broker, the splits were awful. And then I wasted a bunch of money, but I worked like 2000 hours in 10 months. So my hourly wage was $18.50. And I'm like, that's awful. I left $100 An hour corporate job to get into 1850, working evenings and weekends. And I committed to making 500,000 At that point, working 2000 hours. So that was my first commitment. And that's $250 an hour. But I was literally making $18.50 an hour. And I said if I'm going to bridge the gap, like I have to have three months saved to hire somebody at $20 an hour, right. So we think that we have to commit to somebody for, you know, 2000 hours a year, or $20, an hour is a $40,000 higher, but you only need to have like eight to 10,000 saved. And then you need to replace quickly train that person up to take over all the administrative tasks that you're doing, and put you in a position and even hold you accountable. To do the highest dollar productive activities for your business, whatever your business is, to do those first in the day, new business development lead follow up in any business where you have to go out and you know, you get to eat what you kill. It's those two activities, you've got to do that new business development and leave follow up at least four hours a day, at least eight to 11, and then maybe a little bit of a break. And then 1130 to 1230 is lead follow-up. And that's in any sales organization.
Sam Wilson 08:28
Absolutely. That holds true in commercial real estate, if you're an active investor as well, product may change, but the activities are the same. That's absolutely intriguing. So what did you do? So you brought on your first and I like that three months idea? You know, because you're right, most of the time we sit back we go, you know, at 40, that's 60 grand a year to bring somebody on. And really what you're saying is no, you need to free up three months of time. And in that three months of time, go out and do the highest and best use of your skills and talents and the things that bring you the most money and then you'll more than pay for that person.
Lars Hedenborg 08:58
Yeah. And then so the next thing is I looked at like, what were the things that I didn't love doing that took me out of balance with my life priorities. I had a new kid at the time. And we had a second kid in the early years and I was newly married. And so I wanted to succeed as a husband and a dad yet I was working with buyers. So on the residential side in every business, there's something that you're probably not passionate about, and buyers want to go out at like on Saturday afternoons and Sunday afternoons in the evenings when they get off work and, and so I was like, I could not do this. So I had to hire someone to do that for me. And you know, I would have to pay him 25 bucks an hour so a little bit more than my assistant but I could make you know, I could pay them 500 bucks to earn a $9,000 commission check and they were happy earning the hourly and a little bit of bonus we put them under contract. So whatever that looks like for you know, folks in your space, there are just things that you think are the core business, that really when you break it down or not the core business, like what's the one or two or three things you could do that will yield the biggest results and how can you, you know, over time just work your way into only doing those things. And those are the guys making the most amount of money is the folks that have positioned themselves. Like you liken it to the surgeon, you know, the most highly paid surgeon comes in after all of these meetings with other doctors and scrub techs and anesthesia people and doctors making like a half a million a year, are opening up the chest of the one doctor that comes in after somebody else washes his hands. And he's making like one critical incision. And then he's done. Right and sort of a Mic drop. And then people come in, and suture and backup and you want to position yourself as that guy that gets paid multiple millions dollars per year, because he's become so lethal. At the one thing he's best in class at the one thing that's the most valuable in your niche.
Sam Wilson 10:50
Right, man, that's absolutely great. What are some ways are what are some things system-wise? So bringing in people is one thing, but people without systems is chaos? So what have you done in order to you know, really develop and hone your systems? What do you tell people?
Lars Hedenborg 11:06
Yes, so I think it's more of a mindset. So a system is anything that happens in your business or in your home, that happens repeatedly. And like so let's take an example that, yeah, so getting your lawn to go short every time it grows long. So the system for that is you need to go by a lawnmower, you need to like get the gasoline and the certain kind of oil and make sure the blade is sharp, and you know, started up on Saturdays and then mow it. And then you need to get the edger. And then fertilizer and like so there's a whole system that is required to have like carpet-like lawn, that's my desired result of lawn. And I could for sure implement that entire system. But there are people that really enjoy doing it, it's a blessing to allow them to do it. And I don't have to think about it. And I can just do other things I can enjoy my family or I can have some downtime or so a system is anything that happens, like let's say, you need to call on new business. So what's the most valuable part of that activity is like the actual conversation. But the system might include, like, you need to get a list of people to call, you need to get some technology, a single line dialer, you need to maximize your talk time, you need to be really good at your scripts. And so you know, I would figure out that the system where I would just operate in the one thing that mattered and where other people are coming in at eight o'clock in the morning, they don't have their call list ready, that didn't hire a VA in another country that could stay up all night and do the work to get me ready to be in the position to do the surgical cut, you know, at eight o'clock in the morning, right? So that's another example of a system or like, whatever a sales presentation, you don't have a sales presentation that anyone can run, then like, you'll always be the one doing it. So what's your system for selling as well?
Sam Wilson 12:54
Right, man. That's absolutely great. And then inside of that system, we've talked a little bit about leveraging other people, we've talked about systems. And then once you get a few people and some systems in place, then those have to go to teams, right?
Lars Hedenborg 13:07
Yeah, and that's usually the scariest part for folks. It's one thing to hire like a VA or local assistant, but then it's another thing to sort of teach others like, at some point, if you get good enough, and you delegate enough of the admin side of it, you're gonna be working like 10 men. And it's, it's making the decision to teach 10 men how to work. And so you know, the year we did our most sales, I worked the least amount of days, we sold 412 homes, and I worked 42 days, you know, so it literally was like I wasn't afraid of I combined my time back with, you know, some of it with marketing dollars, like you can buy business or become a really good marketer, but you can have other people making calls other people showing the houses. So whatever the three to five things are that you do in the business, you know, coaching and leading and managing people is probably the highest paid skill set that there is in business. And so you know, you could do the every bit of it. Or you could be the guy cutting lawns, or you can be the guy that owns 10 crews that are cutting, you know, 300 lawns a week, I'd rather be the guy that figured out like I started out cutting lawns, but now I'm running a whole bunch of crews, and it's all diversified. And it's all optimized. They know which way to go from house to house, because all the turns are optimized. And I mean, there's a whole system around every business. So I just love that part of business.
Sam Wilson 14:26
Man, that's fantastic. And then I guess, you know, the last thing that I'd love to talk about just detaching your income from the amount of time that you put in, and I think all of these build up to that, is that right?
Lars Hedenborg 14:37
Yeah. And so that's where like, I think you need to pre-determine you need to run to calculations and this is a good time. But any time of year is a good time of year to do it. But I essentially I just take my adjusted gross income, you know from my tax return and I literally go back on my calendar, I get a pretty good estimate of the hours that I've worked. So you have an actual number of where you're at. Let's We're at 75 bucks an hour, let's say you made 150 grand, and you worked a 40 hour work week, that's 150 grand divided by 2000 hours, 75 bucks an hour. And your goal is to go to $150 an hour. So you want to keep the 2000 hours, but you want to go from 150 to 300, it literally starts there. So if you're making 75 bucks an hour, that means you're doing some tasks that are $25 an hour on some tasks, they're $125 per hour, and just stop doing the $25 an hour tasks and hire someone to do those tasks, it's going to free up your time, some of that time you can get back to your family or to yourself, but most of us are hard-chargers, if we're in business for ourselves, we're probably going to give them back to the business. And you just got to commit to giving the back to the things that are 250 500 1000 5000 an hour in your business, there's probably bigger checks than in the residential side. You know, like if you can eliminate all of the stuff that all of the menial tasks in your business, we have a $10,000 commission check, but you may have, I don't know, like 100,000 or 500,000, or a million or whatever, like so. I mean, this is like times 100. You know, in your world.
Sam Wilson 16:08
It really is. And it's just intriguing, because the principles are the same. And regardless of who you are, I haven't talked to many people who have gotten it right the first time, right? It's like, this is a constant process of going back through and going okay, what are my time stocks? What are my financial sucks? And then what are the things that both I love doing and produce a revenue that's meaningful to me and the people in my life? So what does that look like? And that's true, I think for any a whether in residential, whether you're in commercial, it doesn't matter. So I think the principles here have been absolutely fantastic. Thank you for taking the time to break those down. Is there any other pieces of advice? When it comes to mind as you think about this, you said, Man, this is super important. And I feel like people need to hear this.
Lars Hedenborg 16:52
No, I mean, I think that kind of comes off of the last podcast had just recorded, but it's a concept that's not new, but it's choose your heart. Like there is no easy way to live a big life, you know, like, nobody's listening to your podcast, if they want to live a small life, you know, so it's choose your heart, it's like, what are you going to cut out so that you can live a bigger life, you know, and it could mean sports, it could mean Netflix, it could mean alcohol or crappy food, or just the things that aren't serving, like this big vision, like we can say, we want to achieve at a high level, but are you actually doing the things, you know, a group called C 12, where the guiding principle the group or its priorities are what we do. Everything else is just talk. Mm hmm. And if you really think about that, like you can go around saying like, yeah, I want to be an awesome husband and awesome dad, I want to be great in business. I want to be like connected to my Creator. And then it's like, you watch like six hours of like Netflix a day. Like it's not you're lying, like stop it. Like just watch the Netflix and stop saying you want to achieve right. I think that's it. I think it's choose your heart.
Sam Wilson 17:59
Man, I love that. Lars, thank you for coming on today and taking the time to share with us certainly appreciate it. Love what you've done, what you've built. If our listeners want to get in touch with you and learn more about you what is the best way to do that?
Lars Hedenborg 18:10
Yeah, I would say the best way these days you can connect with me all my social media links there. It's partner with lars.com. So partner with large.com That's what I'm up to most recently. In les. You can connect with me on Facebook or my YouTube channel or connect the podcast my most recent episodes. The podcast is on there as well.
Sam Wilson 18:29
Awesome. Lars, thank you again for your time today. I do appreciate it.
Lars Hedenborg 18:32
Yeah, our brother.
Sam Wilson 18:33
Hey, thanks for listening to the How to Scale Commercial Real EstatePodcast if you can do me a favor and subscribe and leave us a review on Apple podcasts, Spotify, Google podcasts, whatever platform it is you use to listen If you can do that for us that would be a fantastic help to the show it helps us both attract new listeners as well as rank higher on those directories so appreciate you listening thanks so much and hope to catch you on the next episode.