Best Real Estate Careers Are Built in Bad Markets

I want to fact check myself and tell like a great, so I tell like a great Dennis Chernoff story without Dennis present, you know, and I think that I haven't bent the recollection very much. Sometimes what is a very small thing to someone else, you know, can be a big thing in your life and that's one of the things, that's one of the experiences that I had with Dennis. And I was interested in buying this house in an area that Dennis, I knew Dennis, number one, knows like the back of his hand as a realtor. But more importantly, or just as importantly, knows really as like a developer because this was going to be a project. So is it worth it? That sort of thing. I asked some of my very good friends who are not just great realtors, but also great investors. David Bailey is a phenomenal investor, business partner of mine. He's a great realtor. I would hire him to find a house for me, no problem. And he took one walk. He walked into that house. He's like, dude, run. I called Dennis. And Dennis and I would talk just once in a while, even though we were at the same firm. And I would just talk once in a while. hey, Dennis, you know, and he would always be very responsive. You know, I get no response. And then finally, I call Henrik, the manager. You know, I'm like, Henrik, Dennis won't answer me. Like, I got to talk to him, you know. Like, I don't understand because, you know, like, call me right back usually. Maybe he's mad at me. He's like, I don't think he's mad at you. He was just in Hawaii with his wife and kids. He's back. Like, you know, that explains like the last week. He's been back like one day. and I'm like okay well you know I really I just I need to talk to him for like you know five minutes and he's like okay well I'll tell him I'm like no no go to the I'll go outside his office and is he there yeah he's there go outside his office and wait for him you know jump him right I didn't know all that but yeah right I'm sorry now now he's going it but no it's you're so great the The other thing is Dennis is so gracious. Oh, that's what I was going to say. Absolutely. And very, funny enough, very responsive. Very responsive and so gracious in terms of level of production and graciousness. It's like you are at the, literally maybe number one to be candid with you. Because typically there's a correlation between level of production and level of gratitude and graciousness. As you get more productive, I hate to say it, a lot of agents just become that much more egocentric and not particularly gracious. So I have the office manager jump Dennis at the – and he's like, just tell Paul. I'll call him in like 10 minutes from the car. I'm like, Henrik, just put him on the phone. I swear, five minutes. And Dennis is like, okay, what is it? And I told him the address of the house. I'm thinking about buying this. I need the information now. He goes, okay, what's the address? And I told him the address. And he goes, I know the house. I've stood in the house before. I know exactly what it is. What's the question? How can I help you? I'm like, it has a beautiful view. Dennis is like, I told you I've been in the house. I'm like, okay, great. And the bottom line was I had taken my contractors through the house. and um and dennis was like okay so i said there's a lot of stuff wrong with it and he's like well how much is it going to cost for you to get it to where it needs to be i'm like like get it to where i want it or to like where you know a normal you know for saleable he goes nah you know saleable like to get it right and i'm like okay well 200 grand and then and then he's like okay well how much are you are you getting into it for and i said four six fifty and he was just like you know he's like there's first of all there's absolutely nothing on the market right now with a view like that period at the moment and if there if it were it would be twelve hundred dollars a square foot all day long which roughly works out to on a five thousand square foot house of course you know roughly works out to uh or a little less works out to a million dollars uh uh ahead of the game um but you know that it took dentists like but that is the information that i needed because when i went into the house even with my really smart uh realtor and investor friend you know one of the things like we just turned on the lights and and they had like nine zillion of the cheapest cans ever in the world none of them on dimmers we went in the evening it's like you turn on the lights and it's just like you're in a surgical theater you know and he's like dude And then there were a lot of things that we found that were hidden as well. We knew that was going to be the case, but I just knew getting into it what's sort of the outside number. Another funny thing that, you know, a little interaction there with Dennis was, Dennis was like, okay, well, you know, that's next to the fire station. And I said, well, yeah, I know that. And I did some due diligence already because David and I actually sold a house to David's friend like two doors down. and even though the broker was saying you never hear the fire engine which you i was nervous that's not true we actually verified that was true and that's what i told dennis and dennis is like okay i know that and like i said it's next to the fire station and i'm like okay well what do you mean by that because if they're quiet what difference does it make he's like well it's going to chase away some buyers because you know that it's quiet there but there are buyers that will just look on the map and go, you know what, we're not going to buy the house directly next to the fire station. And so these are the things that are just like, you know, it didn't matter that I was in the business 25 years. Did I butcher that? Now Dennis gets to say that conversation never happened. No, that conversation did happen. I didn't remember the part that you were chasing me, so I apologize. But I'm happy it did happen. I'm happy you bought the house. gosh every time I went hiking I drove by that house so know it very well I'm happy to you you've got it yeah and it's interesting also the just by being who you are you're going to help your clients in ways that I believe the clients don't even understand and six minutes of your time helps someone in a way that just sort of plays forward, forward, forward in a way that you probably didn't know. And I wrote an article about it, and I'm going to send it to you. And if I didn't mention you in it, we're mentioning it right now. Thank you. I think even if you're not representing somebody, you have to give advice the right way, right? Because there's always a but. When you buy something, what is the but in that purchase? And as long as you're okay with that but, that purchase will be okay. So whether it's a friend, whether it's a colleague, whether it's a client, as long as they know A, B, C, and there's a but. But if you're okay with the but, there'll never be a negative feeling towards that person that gave you the advice. So advices are expensive, right? And if you give them, you give them both positive and negative. It's cost-benefit analysis. Very few things. Very simple. Nothing's perfect. Right? So every time I give one, I go, hey, you're a friend. I believe this would work. But just know this could affect you, this could affect you, and this could affect you, and it will never come back to you, even if you're not representing somebody else. Cut that into the episode for sure. All right, so let's start out. Dennis Chernoff, welcome to Forward One Podcast. Thank you for having me, guys. Super grateful to have you here. As we've mentioned already, unbelievably gracious. You do an extraordinary level of business, and you're always coming from contribution and service, and you can feel it instantly. Thank you very much. Thank you for having me. I'm excited. Why don't you start us off because you're a young guy, but you have a lot of years' experience. So start us off with how did you get into the business and then take us into even order of magnitude, your best year. How many transactions do you do? So I'm a rare breed. I'll put it to you guys this way. I don't, I rarely look at what I do every year, honestly. So I could probably from a hip throw a number, but probably won't be right. So don't fact check me here. Started in the mortgage business as a telemarker. Gosh, I think I was in 10th or 11th grade. Had a great time doing it. Loved the phone. Loved getting people excited about something. By senior year in high school, got a chance to actually sell real estate, excuse me, sell loans, which underwriting, getting people to refinance, getting people to purchase homes. By my first year of community college or Valley College, got a great opportunity to actually co-run a mortgage company right next to the design center. I arrived at from Beverly, an old medical building with one of the partners who ran the mortgage company before. From there, we upgraded to an office in Sherman Oaks. From there, we got a bigger office. So we ended up in an 8,000-square-foot office on Magnolia and Sepulveda. Had a great time doing loans. Was obviously successful at a very young age. and then we hit the beautiful time of the recession, 2006, 2007, 2008, did everything possible to keep the business going, to keep the company open, fought, and I told this story to my kids actually this morning, fought my butt off to keep the doors open and we went from a large office to a medium-sized office to 2009 and 2008 to an office with only three people. Pretty much two offices and a little conference room on Kester and Ventura. Business kicked our ass. Lost a lot of money. Lost a lot of years of life probably by keeping it. But I fought, and I'm proud to say that I fought until the last second. And somehow, someway, picked up a phone. We used to have leads called trigger leads. Trigger leads, if somebody runs a mortgage credit with a lender, we as loan officers would buy these leads and we would call and say, listen, are you looking to refinance? Are you looking to get a loan? So I called this person. His name is, he's probably going to listen to it, Michael Pearson, a dear client. And I said, Mike, do you want to buy a house? Excuse me, why did you run your credit? Are you looking to buy a house? Are you looking to refinance? He said, no, no, no. I have my loan situated. I'm all good. I'll be paying cash. but I am looking to buy some fixtures. I said, oh, that's great. Do you have somebody who's looking for you? He goes, I'm open to anybody to help me look for a property. I said, so do you mind if I send you some properties? And Mike says, yeah, why not? Send me some properties. I have no idea what I'm doing. My co-partner or my business partner at the time, his name is Robert. I said, Rob, do you know how to get into the MLS to send properties? He said, yeah, I think so. So we get on MLS together, two men that have no income coming in. We click on some things, go to fixers. And at that point, because there were so many bank-owned properties, there was just a short sales, bank-owned, REO. You could click on the MLS and we'd just come up with hundreds of foreclosed properties. And Michael said to me that he wants to be in Studio City, Sherman Oaks, Tarzana. So I sent him a hold list. And then I think about it. I did my job. So next morning I called Mike. I said, Mike, what's up? Did you get the list? I said, yeah, there's three, four I want to see. I said, oh, my God, what does that even look like? Okay. So when do you want to go look at them? He goes, tomorrow. I said, okay. I remember it was, I think this was in October or September, either October or November of 2008. So set up a time, arranged these four showings, figured out how to call agents, and we showed him a couple of homes and one of the listings was Susan and Ben's blouse listing on Sunshine Terrace. I showed this listing to him. It's on Sunshine Terrace. It's a mess. Fire damage. House is falling over. Complete disaster. And I showed him the house. He walks out. He goes, I want to buy it. I think the price was $4.99 or $5.25 for a fixer in Studio City. I said, great. I said, are you ready to submit an offer? He said, yes. I said, okay, great. I'll call you later. So I call my business partner. I said, Rob, he wants to submit an offer. How do we do it? He goes, no problem. Come into the office. We'll figure it out. So we get on the wind forms. I think at that time we were still writing them on paper, right? Right. 2009 was still on paper. I think so. I think so. Yeah. So we wrote this offer. I drove to his house where he lived in Woodland Hills. He signed the offer. So excited. Took the offer. I think I delivered it to Susan to the Studio City office that you guys, that you manage or owned. Dropped off the offer with Susan. She calls me, and you know Susan. Dennis, your offer is low. I said, okay, Susan, so what do we do? I had no idea what I was doing. I was completely winging the whole process. We got the offer accepted. That week, Susan goes into a hospital. She gets really sick. We're negotiating, and I can't get a hold of anybody. but my first transaction and the real estate agent is not picking up the phone. Ben, her husband, calls me and we try to figure something out. He goes, look, Susan is the one who is in charge. She's talking to the owner. She'll be out of the hospital in a couple of days. We'll figure this out. Long story short, we'll figure out the transaction. We do the deal. I make my check. I call Michael. The next day after we close, Mike, thank you very much for the business. It was amazing. I'll deliver the keys to wherever you want me to. He goes, I want to buy another property. Okay, great. He goes, but I think I want something with a bigger lot. So we sold him a house in Chatsworth. And I remember receiving that second check. I felt like, why have I spent all these years behind a desk chasing a mortgage rate and selling a quarter percent less or a quarter percent more or selling a loan that didn't make sense for the client because we wanted to get their payments lower. Instead, this business allowed me to be out of the office. It allowed me to be in my car. It allowed me to have freedom at any point. Obviously, now I understand that it's not usually freedom. But I was out. I was out. I had a nice car. I was dressed nicely. It was an incredible environment. I got my second check for that property. And then I decided to shut the doors at my company. The company was called Pro Mortgage. shut the doors at a mortgage company. And the two deals that I did within the first two weeks or three weeks of working with this gentleman, I realized that it's time for me to move on. So I called Susan and I said, Susan, it seems like you have a pretty good company here. Can you connect me to who the manager is? And I think at the time Susan and Ben were partners, right, or co-partners. I don't know what it was. So she said, oh, honey, of course, come in. We'll treat you great. So I go and I met with, oh, my God, what was his name? Gary. Gary, yes. Gary Revis? Amazing care. Yes. Gary Revis. I had the meeting. I was, what, this is 2009. I graduated high school in 2002, 2003, so I'm 24, 23, 24 years old. And Gary, obviously, Gary was, or is, I haven't seen him in a very long time. A lot of energy, a lot of intuities. Yeah, we're gonna make you the most successful real estate agent in the world. I love you, I love everything about you. So he sold me, sold me, I signed the contract, I joined Keller Williams in 2000, beginning of 2009. Wow. And that's it. I think Gary was right Yep Yeah Gary was right And I got on the phones There was nobody working In 2008 2009 most real estate agents stopped working It was a crisis. Nobody was doing deals. I think Craig Strong was the number one agent in that office. Wow. Craig's at a different firm. Yeah. And Craig and I are very good friends. Yeah. And we talked, you know, the last thing we talked to Craig was like three days ago. Yeah, yeah, yeah. Yeah. Craig and I have a transaction right now together. Right. So I met Craig. I met everybody. And that first year, I'm in the office, the same attitude that I had in the mortgage business. I'm in the office at eight. I call, call, I dial, whatever I had to do. But nobody was working. And that year, I think I was top ten in the office my first year, not to brag, but to just say that I didn't have the knowledge to sell real estate. It was just all you have to do is just show up. And it was pretty cool. We always talk about, I do, and Paul too, attitude and gratitude. And then I'll layer in another piece just the willingness to take action. And what I also love about what you said is just not overthinking it. Like put yourself in the position and you'll figure it out if you're willing and resourceful, right? And that's what you did to start your business and I'm sure what you continue to do. So it's harder because even now in a business, we get used to the environment in the market. So when the environment changes and then you see young agents succeed in that environment, because they didn't know the environment before. They're falling into the current environment and they don't know it was different before. So we have to change now. So we as old agents, we have to constantly change our business because the way that we did business two years ago, three years ago, is very different than the people that are doing business now. So constantly have to evolve if you're planning to be in the business. And this world, as we all know, just to your point, adapts. I mean, it changes faster than ever. So if you're not willing to adapt and evolve and iterate and pivot, you're going to get left behind. It's just that simple. Absolutely. So I freaking love it. Yeah. So that's my little real estate story. Just give us a guesstimate in terms of your best year. What was the best year? I think on average, I think we're doing close to half a billion almost every year for the last, I don't know. $500 million. As a team. And we could do a lot more. It's just a matter of pushing to do more. But I think we're averaging the last 10 years $400 to $500 yearly. Amazing. As a team in the Valley. Yeah. So, I mean, that's absolutely extraordinary by any standard. Yeah. And one of the things that Dennis glossed over, because we teach mindset every Monday and Friday, and we're talking about, touched on it today, Dennis talked about being in high school, and he was just doing telemarketing for mortgage. He's like, oh, and I loved it. A number of people that say, okay, so look it, you don't have to love cold calling. You can succeed. I know great realtors that have succeeded and they've never done a cold call. But they've done some other version of very hard work. You know, mutual friend of all of ours, you know, started, knew nobody and was door knocking in Bel Air two hours a day. Never picked up, you know, anything in the two hours a day of door knocking. But he did it and he became part of the community. Just give us a little bit about some mindset of what are you doing as a young man, very young man, and then even now still that allows you to have that work ethic. That was a good question. Why did a partner of an old company ask me to be his partner? And I'm going to guess. I'm going to guess. It's because it made financial sense for him to do that. Of course. So now we need to know what did you do to make financial sense? I understood what I was doing. I understood what I was doing. I was not working like I was working for somebody. I was working like I was helping the company grow. So my energy, my work ethic went into growing him. by growing him he realized that i was actually helping him and me put something good together so when he relied on me when he approached me said dennis you know a b c and d you know how to run this business with you will you run this company with me this is what i look from you and this is what i would do you're going to do the production you're going to do the training you're going to teach them how to call call you're going to teach them how to close I had at my young age, I quickly learned what was important for the company to succeed. It wasn't opening the office or having the light on. That's the job that he took. It was more of production, which is the most important in any sales. Hire somebody or be with somebody who's actually going to be able to produce a lead. And that's what I was good at. Yeah, and it's also, it's like create so much value that you become indispensable, right? I mean, as we're talking about this, I can't help myself. It's a little bit somewhat the story of my relationship with Paul. Oh, absolutely. Who hired me originally. And I had to earn my opportunity because I started with Paul because I saw that he had a huge world and he had abundant opportunity and not enough of the right people to realize that opportunity. And my goal was to show him that I could be of value that will elevate he and I. Right. I mean, and without me, he's not going to be nearly as strong. Otherwise, you know, and that's how you earn opportunity. I also believe when you're young, you don't think they're taking advantage of me. They don't you don't maybe young people today. But when I was young, I didn't I didn't look at me overworking or working 12 hour days or 14 hour days of he's making money on me and I'm losing. I looked at it as I'm working to succeed. I'm working to create something special for myself. and I was looking, I took advantage of the opportunity I was given to the fullest. I didn't hold back. And at some point in time, you're going to outwork, you're outworking your partner, you're producing all this income for the company and really benefiting him in an asymmetric way would be my guess, at least in the beginning. and it also takes a certain type of person to realize that and say, you know, I'm actually better. Like this guy's, you know, I have 20 years more experience, but this guy's making us both better, so I'm willing to do a partnership. It takes both of those. But I will say this. Even though you say that you had this attitude of sort of give, work hard, give, give, give, at some point in time you're going to say, you know what, make me a partner or I got to find something else to do. He made me a partner before that happened. And I made him a lot of money and it made us a good amount of money through the time. And that evolved into me doing a lot for the business and probably doing a lot more for the business that he was doing. But I never got a chance to step back from that because the business took that chance away. Yeah. So when we got to our peak and the peak was great and then you start kind of feeling, hey, we are at a peak and you're not pulling, if I understand your question correctly, you're not pulling your own weight up from this partnership, it became too late to go anywhere else because the market changed. And this is advice to people who are young and trying to make their way up through a particular system. And there's many different systems. I was at a law firm, you know, and is the law firm going to make you a partner or not? And, you know, all that sort of thing. And I think Josh always says, work hard without expectation or what's the – Yeah, give with no expectation. And over time, if you're in the right environment and you're assertive, then you'll get a far greater return on that giving than you could have ever given. I mean you'll get – but so many people, I would argue, overnegotiate that prematurely. Oh, there's no doubt. They don't do the work first and then they're looking for the opportunity. I mean, that happens, you know, 10 times more would be an underestimation. And all I'm saying to the people that are actually willing to outwork everyone else in the particular firm that they're in or on the team that they're on, and then that team leader or that company owner is not willing to give them a fair shake, you know, that's going to be, I think, I think in the real world, that's going to be 50% of the time or more. And then that's a point in time where you go, okay, well, I've earned the right to be a partner in the law firm. But they've said, you know, no, thank you. You have to wait or whatever. And then that's where you go, okay, well, let me talk to the next law firm. But you do the work. You create the production first. You don't ask for the opportunity, yet you earn it. And then at some point in time, I have never waited for the opportunity to come knock on my door. I just maybe it would have come if I would have waited. It's never happened to me because I've always, you know, reverse. Here's where I want to go. So let me do all this stuff and then go over there and knock on the door and say, hey, you know, let's do this thing. I haven't waited. Again, it gets back to like create so much value that you become indispensable. And then, you know, and then it's only in their best interest to give you that opportunity. If not, they're foolish. And oftentimes they're foolish. That's the reality. And I'm going to go to another related point. You were talking about the market when you first got in it and how there was no one else in the office. And we talk about it all the time. Your actions, your mindset have far more significance on your success than the state of the market. There's tremendous opportunity in any and every market. It's your willingness coming back to pivot, to adapt, to find that opportunity, and then to take the action to seize the opportunity. And that's what you've done throughout your career. Yes, sir. And that market dynamic changes all the time, and it gets back to, like, make the most with what you have. That mindset, no matter what you have, because none of us have it all, and life is not fair. But if you make the most with what you have and you're committed to being successful, you will make it happen. When the market was hot, you know, when the market was super hot, then anybody could get into real estate. And then I would talk to, you know, folks like Dennis and be like, you know, I've got a great buyer or maybe somebody on my team has a great buyer. They're all cash. They're ready to go. You know, we've tried six times and haven't got them a house. You know, so that's that's when the market's hot. You know, now it's the it's it's the opposite. So there's always there's always a reason to succeed. There's always a reason not to succeed in every market. And the proof is that we see realtors, we see a few realtors succeed in a down market. And there's a certain advantage to that because no one else is working or the people that are, you know, the deals are no longer easy. So therefore, the deals only go to the people that work hard. And we've also seen, you know, great markets where realtors fail all the time. Because they don't move too quick. Yeah, it is the – and what I always say too, which is very similar, is just there's nothing outside. And it's not true of other industries. So, for example, Dennis and I open a restaurant. We could have the best management. We could have the best chef. We could have the best everything, have it all wired. And if the market shifts and people are going out to eat dinner 25% less, we could go BK on that operation. What else are we going to do? When that market shifts 25% in real estate, it's a lot harder to get those deals. But you look and there's still a lot of deals getting done. And so real estate is the one business where absolutely, maybe there are other businesses, but for sure, real estate is a business where what you do inside of your business is more important than whatever the interest rates are. Sure, it's harder when interest rates are high. It's a lot harder when buyers and sellers are out of alignment in terms of expectations in the market. It's a nightmare. You've got the sellers that want way more than it's worth. The buyers want to pay way less. The market's frozen. You still make deals in those markets. And when you started, that became your frame of reference. So that is your sort of expectation, that kind of challenge. So when the market, quote unquote, in circumstances become more favorable, it just puts you in that much more advantageous a position to seize those opportunities. I agree. So take us – so we know the level of business that you currently do. But give us a little sense of the evolution from 2009 to current. Like what are the major sort of steps that you took, I guess? And with that said, when do you feel like you became, I don't know, this is unique to everyone, successful? Yeah. I'm trying to teach my kids how I feel, and I still don't know. I still haven't figured it out. I still don't believe I'm successful. It's very strange. It's a blessing, and it's not a blessing, right? Because I'm always living in a sense of urgency, and I don't know why. Maybe you should see a therapist for that. The sense of urgency is the driver. So coming out of a mortgage business, our mortgage business was an actual business. Real estate agent is not, it's a sole business, one person. And when I started real estate, I realized that a real estate agent has to wear a lot of different hats. A marketing hat, negotiating hat, sales hat, sales approach, and obviously calling. It was just too many things to handle. So I realized really quickly that for me to be successful in this, I have to actually run it. The same way I ran my mortgage company, a telemarketing department, a mortgage department, a processing department, a marketing department, a manager. Piece by piece, I started adding those pieces. added marketing, added processor, added TC, added inside sales. And really quickly, I think we were one of the first small teams in LA, I believe, in the beginning of 2011 and 2012 that actually started calling themselves the Chernoff team. And then from that point on, there's a lot more teams, small teams, large teams, kind of spread around the city. But I got to a point where I realized this is a business. I cannot do marketing while I'm sitting with a seller and negotiating a contract. I cannot do disclosures when I'm showing properties to a buyer. Realized really simple that it has to become an actual business. So started hiring, started putting a lot of money into the business. And from that point, started hiring agents. And we grew organically. My whole company, and to this date, we don't really look to hire agents. We don't look to hire employees. We're not out there hunting for talent, which is probably also good and bad. But our business grew organically to what it was probably to COVID or right before COVID. And we got to a good number, I think, 15 or 16 real estate agents. And we were always heavy with employees. I still have 9 to 12 employees, I think 10 employees now, that could service and provide an actual service of a business to a client. And I think at that point, I realized that, wow, this is an actual, this is great. When I saw other teams use the same systems and the same models of having people around. But some teams got really big and failed quickly because it's too difficult to run. And some teams ran small, I think there's still a tremendous amount of small teams. But I would say sometime between 2019 and 2020 where it became a real like wow this is pretty cool We have a friend who launched a fabulous company called Place Have you heard of Place Okay interesting Yeah a friend of mine who was an office owner in Bellingham Washington he owned less offices than I had. He had about half the footprint that I had. The difference was he started out and he had his own team. And he became the number one agent in Bellingham. By the way, he would butt heads with Glenn Sanford, who was an agent in Bellingham who launched EXP, who's the owner-founder of EXP. They're selling against each other, these two guys. Such a small world because they've both accomplished so much. And Ben created this company called Place. And what it does is it would take somebody that does a business, they would pitch it to you for sure. They would say it's brand agnostic. You could be at any brand. It doesn't matter because it's not a brokerage back end. It's the front end. It's everything that Yana does and your whole team does. Marketing, tech, recruiting, P&L management. Right. They charge a big number for that. And it really works for some people. And yet you're able to figure this all out on your own. I'm still figuring it out. It's tough. It's hard. Because it is a small business. Even though it's a big volume business, it's a small business. And we only have right now eight agents total. where we could be 100 agents if we chose to be in six months. I do think that would be an error, by the way. That's why you're at eight. Was there anyone that helped inform the evolution of the structure of your business? Were you just figuring out largely on your own? Was there anything? I failed on my own with a lot of different things. With my wife and I, this doesn't work. We have to change this. This checklist doesn't work. We've got to change this here. And honestly, guys, if this was a box-making business, make a box and you cut a box and you put a tag on it, because of the change of the business constantly, we're constantly trying to change ways. Sometimes we had a TC in-house, and that was incredible. Then we pivoted and hired a TC outside of the office because we were doing so many transactions that it became very difficult to do it in-house, but realized that was very difficult. So we're evolving every month. We're trying to figure out what's better. What's your, like, can I ask you? And then also maybe this plays into it because you do quite a bit. I know you work with and do your own development, so I'm curious to talk about that. But, like, my question to you is, like, what's your North Star with respect to, like, your team? Like, what's the number one KPI, key performance indicator that you're looking at to decide how you're going to pivot and evolve? I mean, is it volume? Is it profit? Is it units? Is it or something else? Like what is it that? So I'm an interesting machine because personally, not team wise, personally, look at my investments and my real estate go hand in hand. One feeds the other, right? If it's a development transaction, the listing is mine. That sign is mine. That's there for a year. That's a year's worth of leads for the team, right? So if I multiply that times seven to 10 deals a year, that's 10 listings that will feed my team for a year and a half time. Just think about that so that that's leverage. Again, I always I love the podcast because it just amazes me. Like the number of years I've been in this and then I interview smart people. I'm like, I never thought of that. You know, it could be to the point where Dennis could have a certainly not what he's looking for. But Dennis could have a break-even development deal, which I would say, wow, this is such a pain in the rear end. We should have never done this. But in addition to what Dennis is getting from a development deal, he's also getting that sign that's going to get him seven or eight more deals. When I analyzed businesses, one of the things I was talking to a young group of people, and honestly, I was sort of flying off the cuff without doing big research on it. But Amazon bought Whole Foods, right? And so Whole Foods has a value. And who's going to look at Whole Foods? And the answer is, well, grocery chains are going to look at Whole Foods. And when a grocery chain looks at Whole Foods, they've got to look at, well, what's the cost of the rent and what's the inventory and what's the this, that, and the other thing? And then it's got to pencil out as a grocery store, right? And when Amazon looks at Whole Foods, they go, well, we want it to pencil out as a grocery store, but we're also buying for our internet company a physical location in all of the best places. So, you know, I could just see it. Again, I've kind of made this up in my mind, but I do know that it was a strategic buy. And I think to myself like, oh, you know, Bezos walks down the hall to his, you know, whoever would be in charge of expansion or business development. He's like, you know, we need brick and mortar. You know, how much is it going to cost for us to have like, you know, a thousand locations in the best areas? And they'd be like, run the spreadsheet on that. A bloody fortune. And how's it going to, how are we going to figure out how to open them? It's going to be a nightmare. We have to deploy an army to do this. You know, oh, well, okay. Instead, we're going to look at a grocery store chain that actually has to make sense. Maybe they can buy it as a little bit of a loss leader, but they can pay something. And that's what that reminds me of. That's 100%. I couldn't agree more. It's like looking at value through a different compass. We invest in very few things that are not our own deals or not our own thing. And anytime I look at an investment, I don't care how great the technology is, the next Snapchat or whatever it is. I'm like, never mind. The only way I'll consider it is if it's a realist, if it's real estate tech, then I'm like, okay, well, you know, let me look at this now. Because number one, I understand it at a deeper level. And number two, there, there, there can be a different synergy. I can add more value. Yes. You know, I could say, hey, I want to see it on the board. I want, you know, because, and that's the way we have, we have invested in, we have invested in some, some great real estate tech and some so, so real estate tech. But to think, again, coming straight back to this as a development deal, not just on what the economics of the deal itself do, but what indirect consequences does it have with respect to my brokerage business and how many deals am I going to get from that? So I think that's brilliant, and I don't think very few people probably think in that context. When you run a team, the right way to run a team, you have to make sure that your people around you eat. And the only way we eat is by having leads. And the only way we have leads is we have listings, right? Gary Kelly would always say, listings is your machine to everything else. It's a phrase that he used, but listings is the key. So by us having listings, we have the leads. By us having leads, we have the sales. And so Dennis is creating a listing. In addition, of course, he's not going to look at a development deal and go, this is a lousy development deal, but I'll get a listing magnet out of it. He's looking at, like, I'm going to do a good investment deal, which is like Amazon. Like, we want to do a good grocery store purchase, wink, wink. but we're getting this other thing to it. And it also allows you to perhaps pay a premium relative to someone else because you get a lot more value out of it than they would. You become the best-use buyer, so therefore you can afford to pay a little bit more than the grocery chains, for sure. So when you asked Dennis what the North Star was, and I have a guess on the North Star, on how you would do it. And please call BS. My guess on the North Star, given that he didn't say, hey, I'm going to do this number of transactions. So how do you figure out how to run your team year to year? And my guess on the North Star is friction. So that when he has all of his deals, why do you bring the TC in-house? He brought the TC in-house because it's going to create less friction because now my TC is right here. And, you know, oh, this is great. And then it's like, when does he decide not to have the TC? It's like, oh, now we're doing so many deals. The TC has lost their mind. And, you know, it's just easier for us to go to that TC and that TC outside. And we don't have to worry about the TC here. So my question is maybe the North Star, it's not a bad North Star, right? It's just saying, you know, how do you decide to move from the firm that you were at to a new firm? It's like I heard you say friction, you know. So is that – Again, I think that's right. I would ask both of you because you guys are both from the business. How many real estate agents do you guys know that have a consistent business for the last 15 years? Consistent. Very few. Very few. Why? Because they don't have the systems and the models and a process that allows them to be predictable and consistent. Right. They're winging it. there's not enough structure and consistency in the things that they're doing that allow for more certainty. Even with a great realtor, one of the things we'll see is when they get very busy, then they start taking care of their clients. They take their foot off the lead gen pedal, and then all of a sudden, the phone quits ringing. I'm like, oh my God, what are we going to do? Then they start regenerating. It's like, and they've been doing this- I call it the great valley road. Now you're going up, you're great for two years, then you have two years down. You have a great two years, you have two years down. It's a very challenging market business to stay consistent. So in my business, we focus on staying consistent, whether we have a business that drops 10% less or a business that goes up by 20%. That's consistent business. But I've never had a year where I went from closing 480 million to having 100 million. clean. And that's my key. My key is I think we run a very successful business. I believe we run a profitable business. I think my employees make good amount of money every year and they're happy, hopefully. And I think the agents around me make a good living and I want them to do more. But my goal is to keep the company healthy and positive. I will say, Carter, cut you off because it goes hand in hand. You talked about urgency earlier. That's a word that I live by. Play the long game with urgency. That's it. That's how I live my life. And obviously – It's the same in my business. And I believe, Paul, what you went through before about younger agents or younger business people or younger employees believe they need to make a quicker jump to something else without really showing that they can play the field correctly. And I've had agents on my team. They had one great year. That's it. I'm a success. I'm leaving the company. I'm going to go work on my own. And it takes them five to six years to get back to that success because they were so full of themselves that they were a success. So if you're going to leave the company or leave the team or leave a law firm, have two, three, four years of success. Prove to yourself that you're actually – you are the shit. Then leave if you don't get what you want. And so one of the things that I'm going to do is I'm going to call bullshit on myself because Dennis was too polite to. So I think maybe some decisions are made, some internal decisions might be made on friction. But I think then the North Star, Dennis's real North Star is like we want to create the machine that's going to create a very consistent business over time. and probably, you know, are you looking to do a little better every year? Of course. I mean, you always, my number is always, our goal is always to do more, right? But sustainably. Sustainably, right? And you guys could both tell me, every year for the last, seems like seven years has been different. It's been a challenge, different challenge every single year. Rates, wars, you know, COVID. Every year we have some kind of like, oh shit, this is going to affect us in some way or another. Oh, wow. The rates are much higher than they were two years ago or a year ago. So we're constantly playing a game of fixing and cleaning and adapting. So when you look for an agent on your team, how do you discern who you're going to bring on? So we haven't – we literally have not made a hire until this year for almost a year. I think two years ago, we were at 16 or 17 total agents on the team, and we crashed and burned with too many personalities, too many disc levels of either high Ds or low Is. It was not a cohesive environment. And we've learned really quickly that to keep our business, we either keep it really small, which we went down to. And we did the same amount of number last year with eight agents than we did with 18 agents a year and a half or a year before that. Same numbers that we have to get better at bringing the right agents. And that's what I've been focused on this year is who do we want to bring in? What kind of personality do we want to have? What type of, you know, kind of, I'm learning a lot about the disc. And now after 20 years of working within the KW system that I should have learned before, I'm trying to bring the right folks to the team. And hopefully we'll do that this year. What, just give me the criteria. What are you, and maybe there's different things because maybe you have somebody that's, you know, that's a hunter, hunter, hunter, that would be great. Or maybe there's somebody that's, you know, not a hunter, but they're going to, you know, A plus service to the business that you have. What sorts of people are you looking for? The biggest thing I'd say is somebody honest, somebody hardworking, and somebody coachable. A lot of agents that join the team want to be part of a system, but they don't want to learn in the system. So we bring them in. We tell them, obviously, how to act, how to do things, how to speak on some occasions. But not a lot of them want to actually do – they don't want to learn. So somebody who learns, somebody who's open to learning, and somebody who will treat the business the way that I would want to treat the business. as it's their business. So I always say that you are the mirror of me. When I look at you, you're supposed to be me and vice versa. When you're out there at an open house, when they meet me, they need to get the same feeling that you gave. They're a reflection of you. They're a reflection. So if Barrington or Steve, anybody who's holding an open house and they don't get up for a person, they don't look a person in the eyes, they don't, you know, simple things that we teach our kids. You look them in the eyes, you shake their hand, and you make them feel like you're the man in the house, right? Most agents sit back and, hey, come sign up. Cookies are in the kitchen. So we're laughing because we cannot tell you how many times we comment on that. We are blown away by how little engagement there are in open houses. We're talking like $5, $10, $20, $30 million homes, and they're barely willing to get up and say hello. There is an ego in our business, right, which I don't understand. You sell a house. You're not performing a surgery. You're not looking at somebody's lungs after you open their chest. You're selling a home. You have to make the person who walks into your house feel like they're in their home. If you give up bad vibes, you're spoiling the experience already. So that's the thing. You might not be performing a surgery, but one of the things we talked about before was that six minutes of your advice to me turns into enough to flip my decision-making toward what I was leaning toward, but I had all my friends telling me no. Dennis says, yes, I'm able to then with confidence make a purchase. It's a big deal. It's not the biggest financial decision many people make, so it is a big deal. But that happens secondary, right? So meaning that my advice to you came because you were hoping to get it. If you didn know me or you didn care to know me you would not want to get it So my job is to make sure to earn what you want to hear from me I earned my credibility You called me because you knew that I knew that area and you said hey Dennis what's up with this? And I was able to give you my six minutes. But those six minutes only come after you earn those six minutes. So if you're an agent and you're not selling yourself first, you're never going to get those six minutes. And that's where most agents go, well, I'm not succeeding. Well, cause you, you forget about those, those first few minutes that you got to get one chance to make a first impression. Right. Yeah. So let me ask you this. Um, your wife, Yana, I know is a significant element of your business. Tell us a little bit about your, your respective roles and how you work with one another. Oh my God. Um, I have to say this correctly because she's going to listen to this. I would say she's our legs on everything outside of sales. So she deals with hiring. She deals with, unfortunately, firing. She deals with the back end of accounting. She deals in the back end of marketing. She kicks ass every morning if somebody is not at the office. We have checks. We have our bookkeeper looking at 901, who's not at their desk, why they're not at their desk. She looks, she checks. I mean, she runs the business the way that I would never be able to run the business. Accountability. Accountability, right? Accountability. And she deals with personalities, which I don't want to deal with. Because I deal with enough personalities every single day with sales. and she deals with our company. And to your point, you run it like a business and she's the backbone of the business, right? She is the business that will kick your ass if something is not her way. She's a rock star. She's a rock star. I've had, yeah, some even financial conversations with her and she's right. She will find a dollar. It's crazy. Somebody with not a big college education like her and I, she will find a missing scent and email you and go, where's my scent and a half? I want it back. So she's incredible. And I have to say that I can't help myself. You just said two people that don't have a college education. And both he and I were extremely well-educated. And I always say this about real estate. It's the ultimate equalizer. It's the ultimate meritocracy. It doesn't matter where you went to school. It rewards performance. It refords value creation. And I love that about it. And this comes from, again, two people that love what we do. And we're both extremely well-educated. And I'm grateful for that. And not everyone has that opportunity. But everyone has an opportunity to become a real estate agent. Maybe if you went to an Ivy League law school, you think that you don't have to cold call or something. In which case, it could be a detriment. Yep, that's where the ego comes in. For sure. And that's where the ego comes in. It's also where, you know, one of the reasons why, you know, I came from, you know, meager means and, you know, in our family, like you have to get an education. Education is my dad never went to college. And that was the, you know, that was the route that they saw for us to get out. And so I always had the safety net of having a law degree. And when you don't have – you were talking about this. I never really feel successful. There's always this sense of urgency. That's what my dad had. My dad was like, there's no safety net. And I can tell you right now, for me, there's no safety net. And me too. Yeah, right. So you have to build the safety net. And it's like interesting how like to some degree like, you know, sales is like frowned upon. Well, it's like I want to be a doctor or a lawyer or like and it's like the people that quite frankly make the most money and I would, you know, I don't, you know, are in sales and what in any and every business. It's all about, as we always talk about, lead generation and prospecting and being a rainmaker. I don't care what business you're in. That is the foundation of the business. And if you take the money that Dennis makes and just the pure economics of it, Dennis is getting paid exactly what he's worth. And so back to sorry, back to the six minutes. He gives me a million dollars worth of advice in six minutes. And yes, one of the things you said is you have to get yourself out there so that people know you. But one of the reasons why I asked you and not one of the other 2000 realtors is that I knew that you had spent a lot of time and energy and effort in this area so that you had mastered this area so that you're the six minutes that I'm coming to you for. I'm busy, too. Why don't I ask a million people? I want that six minutes from somebody who has really done the work in order to get that. That's the Ph.D. Yeah. Dennis has the Ph.D. Yeah. I mean, just the number of transactions. I mean, look, that level of business, for those that don't do the math, that's like $10 million plus of gross commission annually. You know, I mean, that's somewhat conservative, right? I mean, and the number of transactions, the number of conversations, the number of things you've had to do to earn that level of business. I mean, that's an incredible amount of data and knowledge and experience. And that's what gives you the confidence to be that decisive when you're on a six-minute call with Dennis to get the advice. That's a product for what we talked about of Picasso, if you want to get right, you know, of it's that six minutes is a culmination of years. I could simply and easily say I've saved a lot of money to a lot of people. And a lot of times clients did not listen and they still do proceed with purchasing a property and they end up losing a lot of money. And I earn and after they've lost the money, I've earned their business even more because they should have listened. What do you do for leads? So that's, I mean, we all know that that's what drives the business, which we've been talking about all the time. So we have friends in the business that have a massive business. In addition to that business, they're also using, you know, Zillow leads. And, you know, people are, there's 9 million people trying to sell you leads. What do you do? What's your lead gen machine look like? I would say past clients. It's a big part of my business. I stay in touch with my clients. I do right by my clients always, always. I work on a transaction where I don't look at my paycheck. I look at the transaction close. When I sell a property, I always tell my clients, I'm selling you a property that I'm going to have to sell one day. And what I told you, here's a positive, here's a positive, here's a positive. Here's the negative that will affect you when I get to sell your house. You know this, right? And every conversation, when it comes back to me in a listing, The seller goes, Dennis, I won $5 million for this. I'm like, but do you remember that time I told you that this little thing will kick you in the butt a little bit? Oh, yeah, I do remember. So what do we take off for this? So I run a really – I believe I run an honest business where I don't believe my commission is important, where I earn the business from a point of being right, forefront, and honest, and my social media. I get a lot of business from online. I get a lot of business from people saying that we do more than most people, which I believe that with all my heart. You know, we went over. I have three marketing people in our company. I have a full-time social media person that only deals with social media. I have a full-time media person that only deals with websites and paper ads and everything else. And then I have a full-time videographer that films everything that we do. And that's on top of we hire other photographers and videographers to shoot our properties. And then I have my boss, Lady Yana, who spanks everybody with marketing too. So we provide a lot of content. We do a lot of organic way of just servicing our sellers. And I love what you said about when you're representing a buyer, you're already thinking about them as eventually a seller. and putting yourself, that is really about playing the long game, which is all about how you build sustainable relationships. Every single transaction I've ever sold to a buyer, I've gone over the pros and cons every time, even though, I'll give you a simple, I'm representing a small lease right now, great clients. They called me, house is in a neighborhood, we took it, he wants to lease it, I'm like, hey, your square footage is off, what's going on? There's a 600 square foot difference between tax assessor and his house. He goes, well, I don't know. I said, well, I'm reading the MLS description at the bottom for private remarks. It says that house is this size, guest house is this size, and that's this size. He goes, oh, I was never told this. So his buyer, his agent, who he had before, never read the agent remarks. They did not include it on the transfer disclosures statement. They didn't include it on. And he's like, well, what do I do now? So I don't know what you do. That's your business with an attorney or whatever it is. but you should have known that your house is really 2,200 square feet, not 2,800 square feet. It's like, whoa. Right? So, and that home is $1,300 a foot. So, just do the math. Big. Big hit. So, that would say the best way I could answer your question is social media and past clients. What do you do to stay in touch with your clients? So, there's a million CRMs out there. we always think we're shopping for the best one or whatever and it's never the best one. It's the one that's more user friendly. What's it actually going to do for us? We do 15 to 20 tasks a day in Top Producer. I still use Top Producer 8i. The only one I think in the world that still uses that company. Wow. I haven't heard that name in so long. It was very prolific like 10 years ago. And I honestly haven't heard it probably in the last six years. Yeah. So top producer is very simple. Tells you who to call. Tells you who to email. Tells the task to do. My job is to call. My assistant's job is to email. So if the follow-up says, email John Smith, she'll put together an email for my email and say, Mr. John Smith, how are you? What's good? And she texts me, hey, I emailed John for you so you know you said hello to him. And we're constantly, every day, staying in front of everybody else. So let me ask you this. You say past clients because you've done so many transactions. I guess two-part question that you're related. How did that start? Because you didn't start with those clients. So how did you lead generate to get those clients? And then coincidental that, what are you teaching your team agents to do with respect to prospecting, especially if they don't have past clients? Past clients, open houses, door knocking, and call calling. Those three things. And there's fear. But how I started, when I got into real estate, the only thing I knew was real estate loans and hard money loans. The first transaction I did was selling to a developer, right? So he bought those two properties in the valley. After that, it became very simple to me that I want to find people that have money, that want to find good opportunities to buy. So that's that. And then now it's more of who we meet, right? I service Toluca Lake to, let's say, Woodland Hills. and we market to that area every month. They get our flyers every month. They get our newsletters every month. We have a beautiful four-piece brochure that goes out on a monthly basis that provides comps for each neighborhood. So they're getting value from us every month. And so we do a lot. So when you say we do $500 million, our overhead is through the roof. But that's what you need to have, right? You have to spend money to make money. You got to spend money judiciously to make money. Absolutely. And when you don't have the money to spend, then you have to use the sweat. Yeah. Use the sweat to make it happen. Absolutely. Look, I can't physically touch. In our business, we call it touch, right? You guys are the touching people. I can't touch 30 to 50 people personally every day. But I could touch 5 to 10 people personally every day. That's my phone. That's my text message. but I could touch a lot of people via social media. A lot of people, right? I could touch 7,000, 8,000, 9,000 people on a daily basis. And at this point in time, are you still doing, are you still texting and calling 5 to 10 people a day? Yes, sir. It works. Why stop? But I actually do it because I want to do it, right? I don't ask for business. I think it's also a key in my business. I don't say, hey, you want to sell your house? No, I reach out and say, what's up? What's going on? How's life? I'll sell you when I drive by a client's house. Oh, wow. What you guys did is kind of cool. Nice. Hope all is well. I always get the responses back. I never push business to get business. I always just organically try to maintain past client base. It's working, man. It's working real well. So I call that brilliant. But I also could say, it's like, you know, in our company, we talk about this. every morning is the same. We get to the office at 8.30. We do our files between 8.30 and 9.30. We do our follow-ups. So most of our days are really consistent. It's like an army or a gym or anything else. You do something consistently long enough, it'll hopefully feed you. Yeah. Keep knocking on wood. Let me ask you this. Per that, it just makes me think. Your two sons, 12 and 13 years old, what are the couple things that you're super purposeful about instilling in them? consistently see me. They see me go to the gym every morning. It's 5.30. I come back and I go, what the hell did you guys do yet? It's 6.30 or 7 a.m. Did you work out? Did you do it? Oh, I had that. I'm getting up. I'm getting up. So within that time, within the next, hopefully four or five years, I'd be like, shit, this guy's been working out since we were babies every morning, every single day. I drop him off at school every morning. The soon as I'm literally pulling up, I go, I love you guys. And there's a phone call from my office, Brianna. Hey, Dennis, okay let's go what are we doing it's 8 30 in the morning if we lay 10 minutes to school i'm already on the phone with brianna going through what we're doing that day so they're learning consistency of a work ethic that's the best thing that i could teach my kids that stay consistent and yeah i'm chuckling because it's like the story of my life and my slogan to my son is discipline and consistent unstoppable together every day you know that's how we yeah yeah so that and leading as you do every day leading by example there's no better form of of of just leadership and than than that yeah your your actions i love it fire let's go to fire around what's the fire around ah we asked the same you know we ask uh fire around questions and i know this is going to go fire around with you because we'll ask you answer we won't comment we'll move on um what's your idea of perfect happiness? Freedom. What's the attribute you most admire in others? Carelessness. What's the quality you most like in a person? Genuine. What's your greatest achievement? Kids. What's your greatest fear? Homelessness. What's your most treasured possession? Kids. sorry my wife yana what's what's the the one thing that you'd like to focus on more in terms of personal development i think myself especially me what's a talent that you'd like to have that you don't have now i speak spanish i should have learned that a long time ago drives me crazy that i can't understand what they're saying your greatest childhood memory messing around with my father who passed away all the time watching movies with him hanging out with him so i would say my dad especially out where we live there there are great hikes and you go uh you walk up you do you do a great hike get up to the steep climb and you look down and you see your wife and kids and team and clients and your whole community and you shout one thing what do you shout oh my God, let's fucking go. I love it. I love it. Thank you. You are a rock star. Oh my God.