The efficiency of a Chipotle’s is amazing. You order, and your burrito is passed off from one employee to another, each one standing in their station ready to plop on some extra guac or hold the beans.
If you want to build a real estate team that can do over 700 properties a year, like Aaron Chapman from Security National Mortgage Company did last year, you need to channel a little Chipotle in your life. You need to build a team with highly specialized positions where everyone knows exactly what they need to do, and they stay in their lane to do it.
Can you imagine if you went in to order your lunch and the manager was wandering all over, helping bus the tables, yelling back to the kitchen people, trying to run the cash register, and also upselling on the drinks?
You’d get your burrito and just when you go to take your first bite, it would fall apart on you. Because the manager got out of his lane and threw off his team’s focus.
Creating specialized positions not only streamlines the process, but also creates less layers between the decision makers. When your underwriter just has to consult one person and walk across the hallway to do it, you cut down on the wait time as everyone’s waiting for the big kahuna to come back to the office and make a decision.
But how do you find the right people? When Aaron started looking for a new secretary, he thought about his daughter’s high school plays. Someone is always in the back of the theater cueing actors, organizing props, and keeping track of extras. If the stage manager could keep track of 40 high schoolers, Aaron knew she could keep him on schedule.
That’s how he found his current secretary. And because he knows she’s good at her job, he stays out of her lane and lets her do her work. He turned his schedule over to her and basically lets a 20 year old boss him around. She tells him where to go and who to see, and she runs his entire day.
Sometimes it’s tempting as an entrepreneur to want to keep your hands in every part of your business. Remember that you’ve gotta keep that Chipotle line moving. Aaron realized that pitching his services is the one job that only he can do, so he focused on that work and delegated everything else.
Supporting a Team
With over 700 loans originating with him this year alone, Aaron is an expert at mortgage financing. He’s not handing off his deals to junior agents, so that lets him keep a close eye on what the market’s doing. When he partners with new real estate investors, he sees it as his job to educate and support them.
The quickest way to fail spectacularly is to think you already know everything you need to know about real estate. You’ve got that fixed mindset and you close yourself off to new ideas or new people.
A lot of new real estate investors come in with that consumer mindset. They think, “I’ve got to get pay off this mortgage as soon as I can”. They want a 15 year mortgage so that they can throw every dollar at it and get out from under the loan.
And they totally miss the huge tax advantages that being a landlord offers them! They totally miss the fact that this is a cash-flowing business they’re investing in, and not a home they’re purchasing to live in.
Investing in real estate can be some serious high stakes. If you fail, you fail big time. So Aaron takes on the quasi-title of CFO for these investors. He’s bringing his experience to the table, showing them data and talking through the scenarios they might encounter. As their licensed loan originator, he takes it personally when they fail.
When you’re building a real estate team, you want everyone on that team to be pulling for your success. Nobody at the top got there by themselves. When you’re putting together a team, find people who are as invested in your success as you are.
Listening to Experienced Teammates
I always feel really honored that you take the time to listen to my podcasts, review me on social media, and read my material. Aaron and I both have a lot of experience in mortgage finance, so we touched on a few points that always seem like a great idea to new investors.
Right now it feels like everyone is hot for refinancing. I get so many letters to refinance my oldest properties because they’re hanging on to a 6.5% interest rate. And the rule is: refinance if the interest rate drops more than 1%, right?
I would be stupid to refinance right now. I’ve already paid 15 or 20 years into my mortgage and have already paid off most of the interest. Remember that curve on the amortization schedule. If I refinanced now, I’d be resetting the clock on that interest, and man, I don’t want to do that.
Aaron absolutely thinks that the 15 year mortgage is a terrible idea. It is honestly some of the cheapest money you can get your hands on, and over time because of inflation, it becomes even cheaper.
The only time he’d advise a refinance is if you were cashing out to buy another property. Then that’s taking your money out and really making it work for you. Remember that you want to leverage high and leverage long. You cannot approach this business thinking like a consumer.
When you’re putting together a real estate team, you want to build a team where each person can focus on doing their best work. Give them their job description and get out of their way. And when you come up against something you don’t understand, go find an expert to add to your team who will teach you so that you can succeed.