Erik Hatch with Hatch Realty in Fargo in North Dakota describes how he went into real estate business to fund his gambling addiction. Erik also discusses his personal and professional struggles that brought him to the success he is experiencing right now. Erik breaks down why he thinks every new agent should join a team. He also provides a blueprint of how to make hires and how to start and build a successful team. Last, Erik talks about his coaching business.
Please check the services Hatch Coaching offers by clicking here.
If you’d prefer to watch this interview, click here to view on YouTube!
Erik Hatch can be reached at 701-369-4839 and erik@hatchrealty.com.
Transcript
D.J. Paris 0:00
On this episode of Keeping it real is brought to you by Joel Schaub at guaranteed rate. As a realtor it’s important to partner with only the most trusted name in mortgage lending. Joel has 1000s of satisfied clients and gives $1,500 of his commission. Back to your buyers on every closing. He is known for his ability to close even complex deals start to finish in only 14 days to learn what 1000s of others already know. Make a note to call Joel at 773-654-2049 or email joel@rate.com Guaranteed Rate is an equal housing lender licensed in all 50 States Consumer Access Number 2611 And now on with the show.
Hello, and welcome to another episode of Keeping it real the largest podcast made by real estate agents. And for real estate agents. My name is DJ Paris, I am your guide and host through the show and in just a moment we’re going to be speaking with top producer Eric hatch from Fargo, North Dakota. And what’s really amazing about Eric among lots of other accolades as he and his team have about 10% of the local market in Fargo and the surrounding areas. So we want to learn how we did that and how you can develop more market share yourself. But before we get to Eric, just a couple of quick reminders please please please tell a friend think of one other real estate agent that could benefit from hearing from top producers like Eric send them a link to our website. Also follow us on Facebook we are@facebook.com forward slash keeping it real pod and every single day we find an article online specifically designed to help you grow your business and we post it there so again facebook.com forward slash keeping it real pod and last, please review our podcast whatever podcast app you might be using. Please let us put a review and let us know what you think of the show that helps us get more visibility and also helps us know what we need to do to keep our show improving to better meet your needs. So leave us a review or shoot us an email let us know what you think of the show. As always, we say thank you for continuing to support us but now enough from me. Let’s talk to Eric hatch.
Right today on the show we have Eric catch from catch Realty in Fargo, North Dakota. Let me tell you about Eric Eric Hatch has sold nearly 6000 homes in little old Fargo, North Dakota within the last decade. He is one of the industry’s top coaches. He’s helped rainmakers and teams across the country via hatch coaching. Now the hatch team has mastered the ISA model, the showing partner model and a crazy amount of agents success and retention, which we are going to be talking about in just a moment. This fall. Eric and his team just joined real to continue to make an impact in the real estate industry. Learn more about Eric at hatch coaching. That’s H A tch coaching.com. Eric, welcome to the show.
Erik Hatch 3:17
Oh my gosh, it’s good to be here. A beautiful day in paradise. And I’m also in Fargo and it’s okay today. Yeah.
D.J. Paris 3:25
Well, that’s the best you can hope for in I would think at this time of year is it not being miserable. I know. And we’re here in Chicago and for some reason unseasonably warm, I’m guessing due to the storms that are happening. And so we’re thankfully I don’t think we’ve we’re getting any of the any of the major issues that other parts of the Midwest are getting, but we are we are participating in the warmth. So I don’t know, who knows, maybe it all come crashing down tomorrow here. But yes, it’s a nice day. For both of us. It sounds like well, I am really excited to chat with you. Because we I’m always I always really want to talk to coaches. But so few coaches out there either run brokerages or even practice anymore. And that becomes you know, their full time business and that’s perfectly fine. But I always love talking to coaches who are still also actively producing or, or managing teams that actively produce because really keeps I think they’re just sort of understanding of what’s going on out there in the trenches, you know, sort of active and, and I’m excited to chat with you. But I would love to go all the way back to the beginning of your real estate career. So could you tell us a little bit about why real estate how you got started and what that looked like.
Erik Hatch 4:35
I’m betting I’m it’s funny that he used that phrase, I’m betting I’m the only person who has a background quite like this. I was in ministry before I got in into real estate. And I was also a professional gambler. So oh my gosh. So when I said I’m betting on the other one I’m like yeah, I still got it
D.J. Paris 4:54
and integrate pong with the betting so
Erik Hatch 4:58
So I work attach my home congregation my church, I was doing youth ministry and worship leading and love. But it was in a way to pay all the bills when I was 21. My mom who’s my only parents passed away from a cancer battle. And so it was orphan. I paid off all my student loans with life insurance that I had bought all my sisters portion of the little town house that my mom owned. And then I had, like 20 grand leftover. And so I tucked away like 15,000 of it. And then I spent five just frivolously including starting to play a lot of cards. And I took some of that cash and all of a sudden, I got really good at cards. And I turned myself into a professional poker player. So I graduated college, I’m full time in the ministry, but I have this hidden career of gambling. All right, I doubt that maybe there are other people who walk this weird life. But in 2006, my, my gambling started to switch I went from playing slow and steady and winning constantly. So I was playing the rush and I was playing higher stakes. And I was playing much faster poker was my game. And I just started to lose a bunch of money
D.J. Paris 6:04
is that normal for poker players to transition from playing more conservatively and slower to as their skill starts to build? Or maybe there’s a rush that they’re looking for, or just, you know, trying to hit that big win, you know, what’s sort of the mentality of because I don’t get the chance to talk to too many former professional gamblers. So I’m, it’s very fascinating to me,
Erik Hatch 6:26
I’m still a professional gambler, I just don’t do it at the poker table anymore, right? Like, is a professional gambler. And here are a few characteristics. You go, stubbornness, arrogance, lack of taking advice from other people, right? Like these are, these are a recipe for a lot of us. And for me, I just started playing faster and turned out that I had a gambling addiction. So I’ve been cleaning up since 2008. And thank you, my, my wife was kind enough not to divorce me, and and everything else. And so I got into real estate because I was trying to fund my addictions. That’s really wow. Yeah, so I make sense. And I was so full time ministry, I was selling real estate all the time. And then I started to get pretty good at it. Next thing I knew it was 2009 2009 and 2010. I probably made and netted 40 and $80,000 each of those years. And my full time profession I was I was eight years of professional in the ministry, I was making 35 or 40,000 bucks a year. So my part time job was paying me a lot more. And I used it to rid myself of debt I had I had racked up over $70,000 in credit card debt. And that’s all out like a 22% interest rate. So and So real estate was this vehicle to rid myself of debt, but I never wanted to be in real estate. It was just a vehicle for me to channel my gambling and for me to try to play high stakes and one other way. And then my wife and I were trying to get pregnant, which was really fun to do. But then thank you for catching that little subtle, yeah, joke. But then we couldn’t get pregnant. And so we went with a sec schedule. And that is way less fun than you think it would be right? If 21 year old Eric heard this guy complaining about a sec schedule right now. But that didn’t work. And so then we went with IUI it’s like giving all these shots to your spouse and use all our medical insurance at this time. And we still are pregnant. And so I had to make a choice. It was a continuing the ministry which I love and sell real estate on the side and just try to scramble or I need to go and full into real estate to fund being a debt. I was with Keller Williams Realty at the time, so much love and respect for that company. And I I went full time in 2011 and found some great successful 52 houses in my first year on my sphere and what Whoa,
D.J. Paris 8:55
let’s just let’s just pause and let that sink in. You sold 52 houses in your first
Erik Hatch 9:00
year. Full time first year. Yep.
D.J. Paris 9:04
Yeah, I can Okay, I don’t I don’t want to stop your momentum because because it’s but I just wanted to pause and let everybody collectively gasp and feel jealous. So okay, so please continue.
Erik Hatch 9:15
Here’s the trick people will say how did i How did I do that? Because I have spent my entire life capturing mindshare to be front of mind for people. mindshare will lead to market share and I don’t I don’t ever like any aggressive sales tactics. I don’t ever I never lead gender traditional day in my life, almost 6000 sales under my belt in my team’s belt. And I’ve never lead gender traditional day in my life. It’s always been about relationships. How do I remember my background is in the ministry so I developed for eight years a reputation and hopefully taking care of people and and meeting them where they were at and I’ve continued to do that. I just use vehicles like social media and my involvement of the community and now try to scale my coaching clients and my team to do the same. So I was As a product of this community, people say, Well, how can you sell that many homes in Fargo? And I’ll say, Well, how can you sell that many homes in Chicago? Because I hear I have a nine or 10% market share for my teams. Right? So it’s incredible. So the average Joe on the streets probably recognizes the name hatch in one way, shape, or form, they maybe don’t know who I am, but they at least know my brand. In Chicago, I’d be one of 50,000 agents, right. And it’s pretty easy to get lost in that shuffle. So I’m at an advantage there, but then I also have just a limited amount of homes that I can actually sell. So I’m at a disadvantage. So no matter what it was, I was just going to make the best of the situation I had. And so in 2011, I went full time. I’ll fast forward through the details. My my wife and I continued to try to get pregnant three miscarriages and ectopic pregnancy. Some of the most painful stuff in our life. I built a team, it all came crashing down, I got kicked out of Keller Williams at the same time, I was dealing with all of these miscarriages. All of this pain I was I was the idiot I was the one who messed up. My whole team except for two people quit and left me. And I started over completely at a rebound girlfriend brokerage that I went to for nine months while I worked on opening up my own brand and getting my broker’s license, I made a bad business move with that broker that cost me 120,000 bucks. By the time that was all done in January of 2014, I opened up hatch Realty, I had restarted my team, I was selling at that point about 250 homes a year but I was 150 of the 250 Well, I guess my wife got pregnant, we now have two kids ages seven and five. I am I’ve never lived a better life than the life I get to live today. And it was real messy before it got real smooth. And it’s not without its bumps now. But we’ve been through the wringer. So from a gambling addiction to massive infertility to getting kicked out almost filing bankruptcy. I’ve been there and I’ve done that.
D.J. Paris 11:57
Wow. Well, you know, I think desperation. And I mean that in I don’t mean that in a pejorative way, I just mean in, you know, times when when things are difficult, really, really can be the greatest opportunities for growth. And really, it’s maybe the only time you can make these massive shifts in growth, when you have some sort of limitation that’s really present and urgent. And you certainly I was gonna make a joke and say, well, at least you haven’t had struggle. But But, but of course, of course you have and the fact that that has brought you to where you are, I suspect I know the answer to this question. But if you were to go back and change, you know, you know, some of those, you know, tough moments, you, I would assume you’d say no, I’m glad we went through it. Obviously, you know, nobody wants to experience pain for themselves or their loved ones. But, but here’s where it brought you and what you might not be where you are today, you know, you might still be caught up in the gambling slash real estate sort of lifestyle, because you’re good at you’re good at being a you know, a poker player. And you might be able to continue funding that for a while, but you might lose things along the way too, especially with addiction. So I have tremendous respect for for for number one for the honesty of that. And also just the fact that he kept persevering and, and congratulations on all that success that is really quite quite a story.
Erik Hatch 13:22
Well, it’s been a tumultuous ride. But I feel like and you even lead with this, as you know, there are those who are coaching and influencing. But maybe they haven’t gone down the path of running a team running a brokerage, and they certainly have insight. You’re not like Bill Belichick wasn’t this amazing NFL player and looking at the greatest coach in the history of the game. And so you don’t have to have that experience. But man, I have a pretty unique perspective having been in the fire where a lot of folks are going I still I still lead hatch Realty as CEO, I spend about a day and a half a week there. But then I spend the rest of my time coaching and it’s been really good for both organizations for me to be able to help rise the tide on either sides.
D.J. Paris 14:03
Yeah, well, let’s let’s talk about I know, Eric has a very specific point of view around team building. And of course, the trying to think if I look, if I think back to our, our listeners on the show, who sent us a tremendous amount of feedback, I’d say out of the top three topics they asked us to discuss, especially for this upcoming year, teams are on everyone’s mind. So the it seems like at least here in Chicago, and also with a lot of the guests we have that teams are really prominent and there’s a lot of logic to why that makes sense. Certainly to a buyer or seller, you can present this, you know, this this united front of you’re getting all these people and all these skills and you know, we’re charging you know, maybe 1% More than the single person down the street might charge or maybe they’re charging even the same. But I would love to get your perspective on team building because I know a lot of our listeners are thinking should I join a team and 2022 Should I start a team? Should I keep my team if I already have one, and I would love to get your perspective of somebody who runs a brokerage. Also coaches, a lot of individuals and teams just love to get your thoughts.
Erik Hatch 15:11
I have a lot of thoughts on this. My team currently we are in five markets total, Fargo be in our main hub and I’m in for expansion markets from Minneapolis to Grand Forks, North Dakota, to Bismarck, North Dakota to Detroit Lakes, Minnesota. So we’re spread out in total about 450 miles from end to end. Chicago, you can I gotta go where the people are in North Dakota, there’s a total of 750,000 people in the state of North Dakota. And yeah, that’s, that’s it. So I gotta, I gotta spread out quite a bit. In order to find similar opportunity. I’ll say that if you are a solo agent, or somebody starting out, the greatest chance at your success would be to join a team. A team should provide three things. And we can speak of a brokerage in the same accord but a team and or a brokerage should provide three things depending on the split that you’re getting. We have leads, leadership and leverage. Okay, the leads portion, we have isas inside sales agents, and so are our agents don’t ever touch a lead, they don’t have to convert a pay per click lead or a zillo lead or a sign call. Those all go to a skilled set of people. And I will tell you that if you aren’t willing to grow a large team getting expertise is so important not just to have a bunch of generalists, but to have specialists. But the first is to say,
D.J. Paris 16:35
let’s, let’s talk I’m sorry, let me I’m gonna pause you just to make sure that people understand our listeners understand isa Eric defined it, it’s inside sales agent, let’s just get for anyone who’s unfamiliar with that term, Eric, just let’s talk let’s define that for the audience real
Erik Hatch 16:49
quick. You bet. And Isa is going to be the person who takes any company purchase lead, and converts it and hands it off to an agent for the appointments. And so in its purest form, they are a database manager. Here’s, here’s some true numbers for our team. If we take like a zillo lead, that’s going to convert on average from the time in which they’re in appointments until a close transaction that’s between 120 and 180 days. We have some that’ll take years to convert, but others will convert on the first day. So an average is 120 to 180 days, four to six months, right? No Pay Per Click lead, which is the fraction of the price of a zillo lead or realtor.com lead that’s going to convert on average from the time in which it hits our inbox until it closes 630 days on average.
D.J. Paris 17:44
No kidding. Wow, I would not have guessed that. So of all of
Erik Hatch 17:48
all, your pay per click leads, they should convert 1% should convert the first year. Two additional percent should convert the second year and years three and beyond the final 1%. Most people get a one to 2% conversion on Pay Per Click leads we get almost a 4% because we nurture and isas set up these people on campaigns. And they stay in constant touch and contact with them because an agent should be client facing, not always database facing. So we separate those. That’s that’s what we’re doing with our isas.
D.J. Paris 18:20
I love that and isas, you know, for for anyone who still isn’t quite understanding an ISA is basically taking the lead, doing the intake and staying on top of that lead pounding the phones, trying to get them on the phone, trying to qualify them, you know, making them feel comfortable trying to schedule an appointment or, or passing them off. So the agent does not receive that lead directly from the consumer, it’s going through an another party whose sole job is to convert that lead into an appointment.
Erik Hatch 18:49
Yeah, and there’s a couple of factors that matter an awful lot speed to lead, how quickly you can actually jump on that lead. And then your speed to respond. Most of the communication effective or 70% of communication with leads now is text. Yeah, and if you’re not jumping on that and responding on a quick, there’s some AI that can help you with that. In fact, we built an entire campaign of things within a seer interactive and follow up Boston shine that people can have all of our messaging and all of our tags, and everything else so that you’ll have an assisted department for you. You can check that out and hatch christian.com was a handsome little plug. But nonetheless, if you’re going to be joining a team and I recommend any new agent doing so the first thing they’re going to do is they’re going to get you leads and or appointments as the first. The second thing that they’re going to get you as leadership, training, development, accountability, somebody to walk alongside you, if you were to ask me, Eric, how many people work for you? I’d say I don’t know anybody that works for me. But I go to work for 70 people every day. Companies right. And that’s my job as the leader is to show up and to help them achieve their goals. You Zig Ziglar says you can have everything in life you want. But if you help enough others, you’ll get exactly what you want. And that’s what I’m, that’s what I’m striving to do. And that’s what I think a great team should do. And the third piece is leverage, you should be able to get assistance with transaction coordinating, listing, coordinating, marketing, runner responsibilities, all these things. And so if you’re starting out in real estate, I think a team is the best way unless you have this huge, massive database. And you’ve done it part time for a number of years and can actually jump in. Here’s, here’s the asinine thing of this. Here’s who can jump into real estate full time, and be full commission. And let’s say on day one, you get a buyer, it’s not going to happen. But let’s say on day one, you get a buyer, the average buyer looks for 10 to 12 weeks, and then that’s going to sit in escrow for four to six weeks. So you have to go for months without a paycheck. So here’s who qualifies for that. Number one is somebody with a sugar daddy or sugar mama. Number two, is somebody with a trust fund. Number three is somebody with a part time job. Number four, is somebody with with terrible financial habits, and they’re just loading themselves in debt. Or number five is somebody who saved up six months worth of livable income so they can actually get in real estate. And that my gang is the biggest flaw in our industry right now is we’re letting people come in without great motivation, or with a broken system, and we expect them to be successful. It’s why 87% of people fail after the first five years. It’s just, it’s just such a bad move. Real estate is a broken system of how it’s set up. And I think that those that have a team or those that are thinking about having a team, I can give you the exact blueprint effective writing a book right now called the perfect real estate agent blueprints. And what I have is a step by step. Here’s who you hire, here’s when you hire them. Here’s why you hire them. And we’re going to turn this upside down. So I’m about to go on a rabbit hole we ready to go digging, let’s do it. Alright, so hire number one, when you have been yourself doing 24 to 36 transactions in a year two to three deals a month, you should look to make your first hire. And that first hire is not an agent, it’s an admin. The first admin that you hire is on a salary in Fargo, North Dakota 35 to 40,000 bucks, maybe a little bit more. In Chicago, Illinois, my guess is 50 to 60,000. Give or take. But this is somebody who is going to take everything off your plate. They’re going to help you to breathe. In my mind. I remember 2011 halfway through my year when I sold 52 houses in my first year, I made my first hire. Her name was Mariah, in fact, her name still is Mariah.
She was one of my former youth group kids who I saw at a graduation open house and over taco in a bag. We were talking and I’m like man, Ryan, I’m really looking for somebody this summer. I’m home from Iowa State I don’t have a job right now. You’re Hired stupidest idea ever memorize a great gal. But I did not vet her. I did not set her up for success. But I was scared to death of how am I going to pay for $11 An hour and 20 hours a week, that’s $220 a week, that’s $880 a month. What if I don’t sell any houses. So before you ever make the decision to make a hire, you have to have at least four months of that person’s salary saved up. And you have to have four months of your living expenses saved up because we’re going to think of ourselves as business people and not realtors who are running around. So let’s make sure we cover those metrics 24 to 36 deals a year is what you’re doing. You got to have four months of cash in the bank to cover somebody’s salary. And then you have to be committed to giving them work instead of just expecting them to find it. You have to show up as a leader, it’s so important. And so when you make that first hire, do not hire part time, hire full time only. And they should be your transaction coordinator. They should be your listing coordinator. They should be taking all of the minutia, killing drowning things off of your plates, from running to the dry cleaners, to picking up some groceries to getting your oil changed in your vehicle. They are not just a professional assistant, they are a personal assistant as well. Yeah, so long as you frame this in the beginning, their job is to let you breathe, because if you’re doing 36 transactions a year, you’re probably working 60 or 70 hours a week. Let’s help you to breathe. Let’s help you to take a breath. And my guess is they’re going to free you up of time and then use that for income producing activities such as lead generation and actual sales.
D.J. Paris 24:36
I just yeah, thank you for that breakdown that is so incredibly helpful and insightful. I was thinking, too, I recently hired somebody I don’t practice real estate myself. I sit at a desk all day and I don’t have the stress that our our agents have with respect to building their business. But I’ve always stressed and I have we have about 800 agents here at our firm. So There’s always a lot to do to help them. However, I hired somebody to help me. And at first, I thought, well, I’m going to have them work on my work tasks, however, and I imagine, this would be an interesting question I’d like to ask you, but you know, clients are still texting the realtor directly, right. So in a lot of communication, now, of course, is over SMS, as you were saying, with the leads that come in via the isas. So knowing that you as the agent, even if you have a virtual or personal assistant, Virtual Assistant, you’re still having to do that client facing interaction, which might come at 11 o’clock at night, and, and you know, depending on on, you know, what sort of communications strategies you’ve created, or, or boundaries you’ve created, you’re going to be still doing that. But it frees up the time for the, for the, or for the personal system can do some of those home based activities that go into the dry cleaner, the groceries, I actually have a virtual assistant, she does things like tells me what’s going on in Chicago, on the weekends, helps me plan my date nights with my girlfriend, she helps me with, with my budgeting for my personal finances, a lot of things that that I wouldn’t, you know, I unfortunately, she doesn’t live here and can’t do my grocery shopping for me. But she would be doing that if she lived here. So So when you’re thinking about hiring somebody, those are the tasks you can have them do. And for sure
Erik Hatch 26:22
that from the very beginning, you’re doing what I call framing, you’re setting it up, my personal assistant has gone and picked up dog poop at my house to bring it to the vet because my dog was sick. But before we ever started, like, you’re going to do some weird stuff, there’s going to be some odd jobs you’re going to have to do and you’re going to be an extension of my personal and my professional life. And so I joke about it all the time. She’s like, I knew what I was getting myself into. And make sure that you don’t just like promise this great landscape, and then ask them to go pick up dog poop, you got to instead frame it to say, there’s going to be weird times where you’re going to have to run errands and maybe pick up dog poop. And if they never pick up dog poop dog poop, there’ll be delightfully surprised.
D.J. Paris 27:02
So now you’ve made your first hire, they are a personal assistant, you’re doing 24 to 36 transactions a year you are, you’re you’re maybe you’re getting 10 to 15 hours back a week. I actually I’m just guessing at that. But hiring a personal assistant gives you some breathing room. And what next, what do we do at that point.
Erik Hatch 27:23
So people are so anxious to hire an agent. They want to they want to start giving business, they want to start buying business, I think you’re mostly earning business. So at this point, you may be buying some leads, but the second hire is another admin. And in fact, this this is the same first couple of steps is what Gary Keller advises a Millionaire Real Estate Agent book, your first hires and admin, your second iris and admin. And I agree completely, the first person was to help you breathe, the second person is to help to help you to grow. And so you’re not giving this person your honey that you’re not giving the first person your honey do list of all the tasks you wanted to get to but didn’t have the time to your second person is helping you to grow your database, and they’re helping you to market they’re helping you to do your social media, on a better level they’re getting in front of all your past clients making sure that they feel nurtured and cared for because that is a gaping hole in most people’s businesses is they tend to drop off and not care for any past clients. This person is your growth person, they become a two headed monster and people right now are saying, oh my gosh, $80,000 in salaries, why would I ever consider doing that? Well, let’s say the average commission in Chicago What 10 or 12 grand?
D.J. Paris 28:34
Yeah, let’s say 350,000, average price point two and a half percent, I can’t do that.
Erik Hatch 28:42
That’s 10 grand 10 grand for simple math. Great. If that first admin helps me to get back 15 or 20 hours a week, I think I can go on, I can sell 10 more houses. And if I sell 10 If I sell 10 more houses and make $100,000 and I pay them 40. So I just bought back time I took all that crap off my plate I didn’t like to do. And now I’m cash ahead 60,000 bucks while my clients get a better service while my my admin gets better service and I have a better life. And you’re not you’re not burnt out. That’s the important part. Right? The mistakes so many people make is they want to go and buy all their business now. They’re gonna go buy really expensive lead sources. And as they go to try to buy those really expensive lead sources. They all of a sudden, like Oh, I’m still making good money, but you’re, you’re paying your agent split into your into your main pots, and you’re funding way too much of all these lead sources. And so the best thing you can do is to try to grow your sphere and your reach of people that are already in your database and the second hires that person to do so. This is not an ISA. This is an admin who is working on projects and is working on client connection and it gives you the runway so at this point when you’re that three person team, I see you doing anywhere from 50 to 75 transactions.
D.J. Paris 30:01
And it’s still just you practicing with these two assistants,
Erik Hatch 30:05
while you’re your client facing for sales, but they’re also touching that all the time and doing the servicing. And you’ll be amazed at how far you can go.
D.J. Paris 30:14
And and that’s a heck of a lot cheaper. I mean, there’s obviously exceptions, then hiring an agent to get to that same level. Really it is,
Erik Hatch 30:22
let’s get there right now, because I’ve seen far too many people make their first through 10th Hire as agents, because here’s what we hear. And that $10,000 Commission sounds really sweet. Yeah, but if I can get somebody in here, I can set them up with five quality appointments, or five quality leads, and they’re going to close all five of them. And I’m gonna make 25 grand, and they’re gonna make 25 grand. Sure. That is basic idiot realtor math. And I did that for a lot of years, not because people are dumb, but because they’re just naive to what’s actually there. Sure. The third hire should be a showing partner, a licensed salaried agent, they are the nurse to your doctor. And this is where most people shouldn’t grow big teams. I have a friend His name is Hank Hank, a bank. It’s a hard name to say but a fun guy to hang out with. Hank is a coach and he’s done great things with his career. He used to be my gold coach back in 2012. And Hank, has really, he said, most people shouldn’t have big teams, because it’s a leadership game. It’s not a sales game. Those are two very different skills. And the margin that happens, the teams that I coach, any team that’s doing 300 Plus transactions outside of a couple of oddities, they’re profiting 15%. Maybe it’s give or take there, they have a bigger pie, but it’s a very small slice of that bigger pie. And they’re having to do so much work. And they’re risking so much. And I live in that right now. The mistake I made I didn’t discover until last year. And the mistake was I grew a big team when I should have grown a small micro team allow me to articulate this small micro team is a micro team for the lead producer for the lead agent for the Rainmaker for the team owner. Before you ever hand off those five appointments to a random agents on your team, you keep those but you bring alongside a nurse, you grow a micro team of a salaried agent, and to salaried admin. Let’s say that’s $100,000 in total for salaries. But I can take those five out of five at bats, and instead of giving them to a new agent, and let’s be honest, that new agents not going to close five out of five, or they know they’re going to close three out of five, maybe but probably two out of five. So I could have made 25 grand than that. But I made 10 Because they’re making 10. And I’m making 10. And that’s my gross, that’s not my net. Right now the flip it on its head, I should be the one as the lead agents. And this is where everybody should go with their teams, I swear to you, of all the people I coach, people are making money out of their ears, and they’re giving everybody a better life, because they’re no longer trying to grow big, massive teams are growing these micro teams, I’m gonna hang on to those five at bats. I’m gonna pay this showing partner 2500 to $3,000 a month. And let’s say it takes two months to close these. I now am a net of $44,000. While I paid that showing partner 6000 bucks, right three grand a month, I paid him three grand a month, I’m a net positive of 44,000 bucks. But that person probably was a barista, or a server or a bartender or working in retail or working an office job that they hated. And they couldn’t get into real estate because they didn’t have the savings account. Right didn’t have the sugar daddy or sugar mama, they didn’t have the trust fund. They didn’t want to have the massive financial bad habits and they hadn’t saved up enough. And so this is their only ticket to get into real estate and you have a simple philosophy of everything is earned and nothing is given. Yeah, let me let me talk for a moment of those people that have big teams. Here’s what happens is we have all of our people sitting at the table all of our agents and they expect a certain piece of the pie and they expect a certain amount of the attention from the leaders. The minute you bring on other agents and you seat them at the same table you’ve created infighting these agents that have stuck around become flight risks because dad just had another kid he doesn’t last much there’s not enough food to go around anymore. And and our season people who are our best converters and our best predictable income these people become flight risk because we just hired competition for them.
D.J. Paris 34:46
Yeah. And and they may think either justified or unjustified. Hey, I’m not. I haven’t gotten to leave in a while or where does it wonder where those leads are really going and it just becomes problematic. Yeah.
Erik Hatch 34:59
And then We as the leaders, we give all of our attention to the new kids, don’t we? Right? There’s a book called The Pumpkin Plan by Mike McCalla. It’s he’s best known for writing profit first. But he writes all these awesome entrepreneurial books and the Pumpkin Plan is my favorite of his. And he talks about seven steps to grow these County Fair Blue Ribbon winning pumpkins and everybody wants to take their picture with ya. And he uses his as a book in which to get more clients and to retain your top your top folks but I read it as a leadership book. And step number six of the Pumpkin Plan says Give all your attention to your big pumpkins. And so for me, what I do at hatch Realty, 12 hours a week is I’m giving all my time to my top agents that turn people because what I’ve done is when I’ve hired I have all my top agents right here. I’ve hired people underneath them. I’ve hired showing partners I’ve I’ve scaled leadership, right? Jesus had 12, and none of us are Jesus. So we shouldn’t have, like the sales managers are destined to fail in most organizations, because they have so many people they’re caring for. And we have leadership issues. We have connection issues, we have proximity issues, people feel invisible on teams and brokerages, and it is eroding our profit, It’s eroding our team satisfaction. And this micro team model solves all of it. You’ll profit more that person now who’s your showing partner gets their MBA in real estate? Yeah, direct extension of you. Here here this step because this is shocking. My first year agents who don’t start off as a showing partner, convert 16% of the company appointments to closings 60%. Wow. My first year agents that first started as a showing partner they spent one or two years as a showing partner now graduated up are converting 32% of those st out that’s
D.J. Paris 36:42
twice as much. So although this success, because they went through a slower process to learn and master the business, they got a paycheck along the way. It wasn’t a huge paycheck, but it was their MBA, as you said, and now they’re going to be able to double the conversion rate and make you know, a lot better money.
Erik Hatch 37:03
So let’s break this down. If I have a showing partner, and two administrators, I think I’m going to be doing 80 deals a year. That’s $800,000 of his 10k per that’s $800,000. I’m going to spend 100 grand on salaries. I’m going to spend maybe another 100 grand on leads and some office and paying my brokerage. Am I really making $600,000 with AD transactions? Yeah, incredible. I mean, if I run a team, my profit margin that I’m writing a book on my design, profit margin for teams is 25%. So if that’s the case, and you don’t grow this micro team, you have 80 transactions that are done by your team, you’re maybe making money as a producer as well, you should make an a salary for what you do. But your actual team profit shouldn’t be $200,000. But if you do the girl micro team, if you change the way this industry is done, you give somebody a better chance you get better leverage and admin support. Because you actually have money in the bank and you’re functioning as a business, you’re gonna make $600,000
D.J. Paris 38:14
Which, by the way, which by the way, it’s so much money and for anyone, it’s so much money, and it might actually just be enough, right? So sometimes agents go, you know, I don’t, I don’t need to earn seven figures a year. But boy, I would think most for most people 600,000 would be an incredible year, certainly for a lot of our listeners. And you know, you don’t have to, you don’t have to keep growing you what you have to do is build a lifestyle based around running this practice as an actual business because oh, by the way, you are a business owner. So so that that’s, that’s I’m so glad we’re going over these numbers. Yeah, I don’t want to stop your flow, keep going.
Erik Hatch 38:55
So we saw this offline. But if you do have a big team, you don’t have to blow it up to grow it up. Okay, you don’t have to go all the way back down to just four of you to figure this out. The purpose of all this is you as the Rainmaker, you as the lead agent, you should be doing this to grow your own micro team. Now, socially, your top agents, that’s the thing is, I used to be in a mastermind used to be coached by somebody who have a lot of love and respect for, but I heard them say, every chance they got once an agent hits about 24 transactions on a team, they’re gonna leave you. And I’m like, Ah, I don’t want that like I want I want these people to be with me for a long period of time and I’m investing my heart soul into that, and I don’t want them to like just use me and then leave our jobs. And our way to retain unbelievable people are two key elements. It’s proximity. That’s the time you spend with your big pumpkins with your top people. Have proximity with your people, and then customization that you build for them a business that continues to have a glass ceiling that doesn’t exist. Right? So in 2010, I was on a real estate team was part time. But I was on a real estate team. I was out selling all the full time agents, and I was doing about 75% of the business from my own sphere. And so I went to the owners, I’m like, Hey, you’re like, hey, hey, can I get a bigger split? Or can I start working listings like I’m doing really well. But yeah, that’s not how we’re built. I left a month later, because of course, I hit my glass ceilings. And so many teams out there right now, I think glass ceilings, and agents are just leaving because they run out of runway. And our job is to provide massive revenue in these micro teams. These showing partners allow businesses within businesses, teams within teams to be creative. So you don’t have to blow it up to grow it up. It’s creating these micro teams and watch retention go through the roof of my 58 people and all my teams I’ve lost to this year. That’s incredible. In the last three years, I’ve lost three producers.
Unknown Speaker 41:04
It’s amazing. And so
Erik Hatch 41:07
you’re either going into chaos or coming out of cast. So I know there’s some hell ahead. And I get that because it’s never rainbows and butterflies. But I’ve had some really tough years. And the longer we put this energy into growing these big pumpkins and, and letting everybody earn their spot, instead of being given their spot. We don’t have the infighting like other places do. My top agent this year, is going to sell 140 houses. And seven of them are from his spirit. That’s not his team. That’s his own personal production. And he’s doing that with a showing partner. And then we have an admin that he hires full time as well. But 140 transactions, his team and total is going to do 300 All under my tutelage, we’re going to do over 1000 transactions this year as a team. And I got these little micro teams and and so I’m not trying to manage everybody, I’m just leaving a few people. And so I know I’m starting to ramble here, I want to make sure that this hits home is that your greatest success for profitability for longevity. And to change the way this game is done is to think small. If you want to go big start thinking small, a micro team of a couple of admin, and then a showing partner or two or three, I have a coaching client in Seattle, he has three soon to be four showing partners on his micro team. Just as micro team, he will net over a million dollars. He doesn’t leave the office, he has an ISA that sets his appointments for him, he just does consults in the office all day long and negotiates from his house and then meets with his needs of the showing partners, a micro team. Now the huge team of micro team is making them seven figures. And our Chicago example, you should be netting five to $600,000 by doing 80 transactions. I don’t know anybody else is doing 80 transactions making that kind of cash without trying to go wide. So the main point I’m trying to iterate here is go deep, don’t go wide. Get a micro team, you can go wide too. But when you find your talents go deep with them as well.
D.J. Paris 43:00
Yeah, I heard Barbara Corcoran say one time on Shark Tank, because of course, she’s on there. I think she’s still on there. And she was talking. Yeah. And she was talking about the you know, there was somebody pitching a whatever company had nothing to do with real estate. And the the person who was the owner of the company seemed like kind of a troublemaker, somebody that was combative and difficult. And bar and he could tell it was sort of turning the rest of the panel off about wanting to fund her business. And Barbara said, you know, I have a different opinion. People who who are difficult, oftentimes become the best producers. And she’s like, my job is to give those people all the attention and that they need because they end up being and of course she runs, you know, or ran Corcoran real estate for a long, long time. And one of the biggest real estate companies in the country, independent firms. You know, she said, I love those people that because I have to spend my time with them. They make me the most money so that that spend your time with the largest pumpkin pumpkins is makes it and same thing with referrals too, right? Like whoever your biggest referral sources are to your clients. Those are the people that you really need to be spending a lot of time with, even if it’s just thank you, thank you, thank you constant thank yous, because those are the people that will continue to of course, refer additional business. So the same principle applies to your team.
Erik Hatch 44:18
Yeah, it really does. It really does. And we are emphatic as a coaching company on trying to redefine how this industry treats people, not only clients but also team members. And we think that we’re onto something here because we’re seeing people have happier careers. They’re not having to deal with the headaches that they usually do. They’re making more money. People stick around for longer. I feel like we’ve we’ve cracked the code here.
D.J. Paris 44:42
It’s really exciting. I would love to talk about your coaching business as well. Which by the way, another plug, please everyone must you’re driving wait a few moments or pull over but if you’re not driving head over to hatch coaching.com to learn all about the different coaching options that Eric and his team have. They do in person and events they do online events, there’s courses tell us all about hopscotching.
Erik Hatch 45:05
You bet house coaching has been around now for almost six years. And we have two major elements, we have a service based on the product base. So our product base is we’re helping people to convert leads at a really, really high level, as well as train people up. And so we have a whole bunch of courses and we have things that add on and bolt on to why Lobo chime follow up boss and see are interactive, some different CRMs that are out there. And we’re continuing to add to that. And so we’re, we’re essentially an extension of your isa or lead conversion department. And it’s just, it’s making people some huge money hand over fist, or those are monthly subscription based products, where we jump in. And we really help to manage your database and do great things with that. The other side of what we have is we do we do coaching, so there’s live coaching with a few of us, there’s events that we do. And we’ve really gotten a great bit of momentum with our virtual events that we’ve been doing lately. And so if you’re at house coaching.com, you can see the right hand corner, there’s a little drop down menu, there’s something called boot camps, we’re just finishing up a boot camp right now. And that is all about lead conversion and spin awesome, you can still sign up for that and catch the last couple and we’ll send you the recordings of the first ones. Otherwise, in early 2022, we’re doing a boot camp about how to grow a team how to kind of grow and scale a team really well. And so everything we talked about today would be maybe a bit of a teaser for where we’re going, and you want to sign up for that. So go to hash coaching.com get on our mailing list and sign up for that boot camp, it’s gonna be pretty great.
D.J. Paris 46:34
Yeah, and boy, you have proven yourself as as a coach here on our show with some really practical advice. And I would love to ask you, let’s say you are so for our audience who is just an individual practitioner, who now has heard, okay, I get it. Once I get to a certain level, I can start to build my own team. But maybe somebody isn’t, you know, quite their their full time. They’re squeaking by maybe they’re doing a few million dollars a year in production, not really earning much of a living, but they’re getting through what what would you how would you coach them? What would you tell them to do? And obviously I know there’s there’s no right real specifically right answer. But I know there’s a lot of people in that in that space sort of feeling like, gosh, I don’t really know how to get to that next level where I can afford an assistant, I don’t really want to join a team, or just feels like I’d be starting over curious on what your thoughts might be.
Erik Hatch 47:29
So I had a friend once say that there would be no need for coaches if people actually honored what was on their schedule. And I thought, huh, dang it, you’re right. You need to know what should be on your schedule. And then once you know what’s on your schedule, actually honoring it. So we talk about the perfect and ideal schedule, it looks like this. Your day starts at 8am in the office. Now there’s a lot of personal care things you should be doing. Hal Elrod has some great things called the Miracle Morning. Awesome Things to do to start off your day. So I’m talking when you actually get to the office, you should get to the office by age with all intensive your day starting with intention and intensity at 830. Your first 30 minutes is prep time. You’re getting caught up on some things and you’re teeing up that golf ball for you to make a great hits. From 830 to 11. You are a slave to your business. And that sounds aggressive. I’ve heard people talk you know, you should lead gen for three or four hours a day. But man, most people, good luck. Most people aren’t in Marathon shape, you know, run for three or four hours a day. Hell no. I’m gonna do it one time. In fact, there’s an episode of How I Met Your Mother, where Barney Stinson goes and runs a marathon because he dared himself to do it runs the actual New York City Marathon but then gets on the subway to go home. And when it comes to his stop, he can’t get off the train because his body is physically shut down. And that’s what people do when they try to lead generate for three or four hours a day. It’s just it’s not effective. So I’d rather you be intentional and intense with your time. No more than 90 minutes of lead gen but it doesn’t start with lead gen it actually starts with role playing and training. So 830 till 915 You should be role playing and practicing. You should be working on honing your craft and getting better 915 till 1045 You should be lead generating this is not lead follow up lead follow up is for business that you’ve already earned or have already started massaging. Lead Generation is business for future business. This is for business that has not yet bore any fruit. And so you need to work on future business before you work on current business. And that’s where most people mess up. It’s why everybody rides the roller coaster of real estate right big sales and then drives big sales and then droughts. So 939 15 till 1045 90 minutes of intentional lead generation, then 1045 to 11. It’s a daily huddle. It’s celebrating your wins. It’s reporting your numbers. It’s your accountability time. And then at 1101 Your day starts for showings. For lead, follow up and for everything else, that’s a busy work of a realtor, if you honor that schedule, and actually, don’t spend your 90 minutes of lead generation time farting around on your phone and perusing through social media, and you actually call, email, text, sent handwritten letters, visit people, and you do that repeatedly, you’re going to find yourself with a ton of business. It’s just going to be time over task over time.
D.J. Paris 50:26
Yeah, leads are really never the issue. Right? It’s all about effort. Yeah. And by the way, if you didn’t hear Eric, he just said never as soon as I said, leads are never the issue. Never ever, ever, if leads, if leads are your issue. Let’s I’m just going to have you answer this question. If right now you’re saying if I just had more if our listeners and we and again, everyone’s everyone’s been there. We all think if I just had more leads, I would do more production. Tell us what’s wrong with with with that mentality.
Erik Hatch 50:55
So I remember as a Keller Williams agent hearing Ben Kenny, say that an agent begged him for a list of people to call and so he finally gave no less than the guy set three appointments in a day. And he’s like, Ben, how do I get more of this? Like I just pulled the name from the phonebook. Right? So I think there was a farcical answer, but I’m gonna, I’m gonna let people in on one of my favorite insider tricks. And that is that your greatest CRM is Facebook. Of course, these are people who are already in some sort of connected relationship with you. And you don’t need to buy any leads, you just need to know what to do with the people who are already in front of you. And your goal should be to make them feel heard, seen, valued and cared for, you need not be the most entertaining person, you need to instead be the most engaged person in other people’s lives. I’ll give you an example is my birthday is March 1, I expect everybody to send me lots of gifts on March 1, but nonetheless, my 5000, Facebook, Facebook, err, quote, friends, all message me on my wall, I get 510% or so of Happy Birthday generic things, I can’t tell you the name of a single person that did that. Then I’ll get like 30 direct messages and 30 text messages. But I count. I got two handwritten notes. Wow. And I got three phone calls. I can tell you who it was for, for those five as well. Because that is remarkable to me. Think of the roots of remarkable right? That you live a life that people will remark about you. Yeah, and if you want to be remarkable to your CRM, which is Facebook, or whatever social media channel you use, you need to go above and beyond and not just wish somebody, Hey, my thoughts and prayers are with you. But instead show up with a damn hot dish or a casserole. When times are tough. Go visit them, go spend time with them, celebrate their life get on the phone, the purpose of social media is not to interact online, but it’s to take things offline and to connect. And when you can do that. It is never about the leads, it’s always about the effort you put in.
D.J. Paris 52:55
And it gives you every possible reason to reach out so so a lot of times we think, you know, I don’t really want to bother my spear. I don’t know when they’re moving and when they need me and I don’t want to be that pushy sales guy going, Hey, thinking about making a move anytime soon. With social media. Now you don’t ever have to talk about that unless it comes up and you want to talk about it. Because now you can say you can pick up that phone someone’s birthday or just go Hey, I saw you were just on vacation in wherever Mexico like that looked awesome. I just called to say that was really cool. I hope you guys had a great time. Talk to you later. Even that alone, nobody else is making that call except maybe their friends, their close friends and family, you can demonstrate that you’re paying attention and that you you care.
Erik Hatch 53:37
Now while I while I never did a single lick of regular lead generation where it would be oh man, who am I going to call today from my my CRM. My social media was my CRM and i i every day for about two hours I would like you’re either networking or not working on on social, I love that I made sure to be networking.
D.J. Paris 54:00
Yeah, it’s such a great way and I also want to make it quick I say this all the time and I just want to think repetition is the mother of skill. So I’m just going to make this point LinkedIn does a really cool thing that that really no other social media platforms do and I encourage you to connect with all of your sphere in LinkedIn for even just for this one reason it will tell you if they have their information updated when something interesting happens to them maybe they get a promotion they update their their position at their company maybe they change companies maybe they have a work anniversary course their birthdays as well. Those are things that even their closest friends might not know and that’s another reason like hey man just saw you got a promotion like that’s amazing so proud of you keep up the great work or just saw something cool happened at your company. LinkedIn is great for that stuff. It’s it’s not necessarily the hey check out my vacation I just went on but it allows you to celebrate the personal or the private or sorry the professional successes of those those fears. So don’t neglect LinkedIn. I know we all want to do Facebook and LinkedIn and Instagram because it’s more fun but LinkedIn has some cool stuff, some cool reasons and you can actually just go to your feed your Newt your forgot that notification feed. And it literally just has every one of these reasons to pick up the phone or text somebody or shoot them a, you know, some sort of handwritten note. I mean, I know if somebody got a promotion, the first thing I would do is write a handwritten note or maybe even a little congratulatory gift. And you’re going to be the only person who’s doing that and their entire life outside of maybe their parents and their spouse.
Erik Hatch 55:26
Yeah, and no matter the social media platform, it’s about taking it offline. Yeah, it gives you all the information online, your job is to take it offline.
D.J. Paris 55:34
Yeah, don’t just write Happy Birthday on their wall when it’s their birthday. Because like Eric said, you get about 100 or more of those, in his case, 500. You don’t even notice them, that all bleeds together. It’s not special. It’s like sending a holiday card. It’s there’s nothing wrong with it. It’s a nice gesture, it’s better than doing nothing. But you’re one of 20 other cards that are also getting sent by other professional service people. And you know, maybe it’s not as unique. But even if you just hand wrote your holiday card, you’d probably be the only handwritten one they got. So that that would be advice. But yeah, social media. Think of it guys. I know. So many of our listeners are like, what do I promote? How To what do I what do I post what content? Think of it more? Yes, you should be posting content. But we haven’t even talked about that. We’re talking about just participating in other people’s lives. And then, as Eric said, so elegantly and so perfectly, taking what’s online, and then pulling it offline, because we know that social media actually makes us feel more disconnected. It does not, the research does not shows very clearly that it does not really bring people closer together. But it is a great research and development tool so that you can take it offline and actually build that relationship, one, you know, belly to belly face to face or text to text or voice to voice. So thank you, Mark, that is such a, if you get nothing else from this, this this episode, which of course you will, and you have that is you will never suffer a lack of leads. But you have to earn them just like Eric was saying, his team members have to earn their place on the team, you have to earn your place and in your clients team, as well. So your client has a team of people that they employ accountants, you know, maybe an attorney, financial advisor, etc. To earn that spot as a real estate agent you got to do you got to just care more, and you got to be more proactive in their life. Absolutely. Well, Eric, this has been awesome. And I definitely want to continue to have you come on the show from time to time going forward. Because this is so actionable. I know our audience is going to love this as much as I did. And so I want everybody again to go visit hatch coaching.com. Check out the courses, they have virtual events. And just lots of lots of great and by the way, most of the information on there is free. So check it out hatch coaching.com. Also, if you happen to be a realtor in the Fargo area, actually, Minneapolis, you mentioned what were the other areas that your team
Erik Hatch 57:58
Detroit Lakes, Minnesota Grand Forks, North Dakota in Bismarck, North Dakota, as well as Minneapolis.
D.J. Paris 58:03
I know if I was an agent in that area, I would like to work for a team that captures one out of every 1010 deals in that in that area. And certainly check out hatch real its hatch real estate, and the website there if you want it to hatch Realty rather, you can go to hatch realty.com. And you can reach out to Eric and his team. Boy, that’s a team I would join him in a heartbeat. And you get to you get to experience as you get you get not only an MBA and how to grow a business, you get to bypass all of the mistakes that Eric already made to get to where he is. And oh my god, you’re saving yourself years, literally years. And so I couldn’t agree more. Eric obviously is amazing. He’s he’s written a book, you can. He’s got coaching products. And he’s got this incredible team, which captures a huge percentage of the real estate market in his area. So please, everyone, go visit hatch coaching.com. And Eric, if there is anyone that wants to reach out to you directly, you know, who wants coaching specifically, or maybe wants to join the team who might be in the area? How should they reach out to you?
Erik Hatch 59:08
Yeah, just got to have scotian.com Easiest spot, and you’ll get to see this handsome.
D.J. Paris 59:13
Awesome. Well, everyone, thank you for continuing to listen and support our show. On behalf of Eric and myself. We want to say thank you to the audience and the best way that you can help us grow and help Eric continue to grow of course, visit hatch coaching.com. And then for our podcast, tell a friend think of one other real estate agent that needs to hear what Eric just talked about today, which was so there was no fat it was all meat right? This is an amazing episode, send them a link. Easiest way to do that. If they’re not a podcast person, just have them visit our website keeping it real pod.com or search for keeping it real podcasts will pop up. Or if they are a podcast person, or you’re a podcast person. Then just grab your podcast app on your mobile device. Do a search for keeping it real hit that subscribe button that helps us continue and also please Just leave us a review, especially if you’re an Apple user. But for any any service, you might be listening to us through Spotify, Pandora, Google Play, whatever, please leave us a review. It lets us know what you think of the show and helps us continue to improve. So on behalf of the audience and myself, we thank Eric for his time. And on behalf of Eric and myself, we say thank you to everyone listening and watching and we will see you on the next episode. Thank you. Err, hey, thank you.
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