Thursday, June 1, 2017

Lesson's Learned and Shared

As your Broker, it’s always my goal to advocate for my agents whether they are having a challenge in an agency situation or as an investor buyer or seller. Sometimes my agents are in the right and I can help them navigate a tough situation for a positive outcome.  However, sometimes these issues turn into hard, but important, lessons learned. Elliot Grochel, Agent-Investor in San Antonio, recently had to suffer through one of those hard lessons.

Elliot (who gave me permission to tell you his name and his story) called me a few weeks ago with a frustrating situation. He had a contract on a listed home that he was trying desperately to close on.

All was moving along smoothly until the appraisal came in low. The seller refused to budge on the sales price so Elliot started looking for alternatives. He could get a different loan product but that was going to take some time and he would miss his closing date. The seller offered to  take a 2nd lien for the difference and spent several days negotiating back and forth with the seller until an agreement, via email, was made.

Because Elliot thought the seller was working with him in good faith to find a solution he did not terminate the contract and kept moving forward.

Then… the seller changed gears. He no longer wanted to provide the second lien. Elliot scrambled to get a new loan that would allow him to purchase the property but at this point he has gone past his financing option (although he did give notice via email within the he allotted time period that the financing was not approved) and he did not close on the scheduled closing date. The seller declined to extend the closing date and went under contact with another buyer.

Elliot, feeling like he had been played by the seller who acted as if he was going to go forward with the contract only to run out the clock, went looking for help. Despite the advice he got from me, Dan Burke and Kelly Toney, a StepStone Associate Broker, the deal died and Elliot is still trying to recoup his earnest money.

There were a few ways this deal went sideways and Elliot was generous enough to let us share his story so you can avoid the same issues.

From the broker perspective, what left Elliot at a disadvantage, was not getting the proper paperwork executed which would have protected his position. While he did send over contract amendments the seller refused to sign any.  At the time his financing fell through, an amendment to the contract either changing the financing type and/or the financing timeline, the closing date or a notice of termination of contract would have put Elliot in a better position. However, Elliot, being a good guy, expected that because the negotiations continued that the seller would move forward in good faith.

Once Elliot was unable to close on the scheduled closing date, without an amendment, he had failed to perform and the seller was free to contract with someone else.

I asked Elliot for his take away’s to share with you. This is what he added:

  • Be prepared for appraisal to come in lower than sales price. If you still think the deal is good, you will have to cover the additional amount out of pocket.
  • If seller then offers to finance the additional amount over appraisal on a 2nd lien note, be prepared to have them back out (keep going through with traditional financing if you still intend to purchase as a backup plan, so you don't lose time on closing)
  • When you send an amendment to extend the closing date, note in "other modifications" that your third party financing date changes with the new closing date, to give you additional protection. If not, you may extend closing but your third party financing is not specifically connected to the closing date; only to the original executed contract date.
  • Make sure before you send any contracts/amendments, that your lender can close within the timeframe provided. If the seller gets cold feet, they can essentially stall you while you run out of time to close. They may not work with you to give the lender additional time for underwriting!

We’ve all heard the adage “Buyers are Liars and Sellers are Worse”. No matter how nice, friendly or accommodating a party in the transaction seems to be ALWAYS be proactive with your contract documents to make sure you and your position are protected.


Thanks to Elliot for sharing his grief with us so we can be more alert to protecting ourselves!

Monday, May 1, 2017

Own a Piece of StepStone!

It's not secret that StepStone has been enjoying tremendous growth over the past two and a half years.  As of this morning, we have gone from 4 to 136 agents and now are in the top 4% of brokerages in the state of Texas!  Thank you to all who have entrusted your license with us... it's been humbling and yet exciting!

It's time we take this brokerage to the next level for all of us!  We know that making it in this business requires help.  Now that we've grown into a large brokerage, it's time we start giving our agents the tools and training necessary to take YOUR business to the next level.

Luckily, our size means that we have a very predictable income stream.  We know what our revenue will be based on our number of agents, and therefore, what it will be in the future as we continue to grow.

We could continue to slowly grow and wait until our revenue supports the investments that we want to make in your.  Or we can ask our agents to invest in StepStone, enjoy residuals and massive future equity and invest back into their business immediately!

We have chosen the latter and are NOW offering to allow agents to invest in StepStone so we can invest back in YOU!

What will funds be used for?

We really see StepStone agents has having four crucial needs to be more successful in Real Estate -- Infrastructure, Leads, Funds and Training.  Our focus in 2017 is creating all four of these avenues and having all fully launched by 2018.

Infrastructure:  This is the bulk of the investment.  MojoVest needs to be re-developed for ease of use, features that you really need (like instantly populating data about property) and for better and easier management of your licensed activity.  Furthermore, to make sure you get top-quality service from the StepStone team, we need to hire one more full-time employee and move Broker-Assistant from a part-time to a full-time position.  Unfortunately, this creates another need -- office space!  We cannot hire another person until we can provide them space and office equipment!

Leads:  The second largest investment is in leads.  We have already created StepStone Leads, LLC and are beginning pilot programs to generate distressed seller leads that you will be given access to.  This will allow us to "pool" resources and stop cross-marketing the same people so that we can compete with We Buy Ugly Houses.  This will mean more deals for all of us!  In addition to that, we need to revamp all of our internal marketing including our public site.  Our agents need a site that gives them credibility and allows them to create personal agent sites with IDX ability (ability for the public to search listings).

Funds:  We also recognize that sometimes deals get lost due to a lack of funds, especially when the need doesn't meet the products available (like hard-money loans).  Therefore StepStone will be working to create more avenues for funding sources such as second liens on Sub2 property and long-term hold funds.  More on this forthcoming, but we are excited about where this is headed.

Training:  Through our infrastructure changes and new-hires, we have already started new and better training programs moving from monthly webinars to live workshops, MCE credit and more video tutorials.  We also are working to develop the Captain program so that everyone has the resources they need to make every lead successful!

How do your invest?

We are not asking for funds without giving back.  We are doing that by what we are investing in, but more importantly, by giving you an equity-stake in StepStone.  Unfortunately, I can't go into detail in this blog, but all the details of your potential and likely returns are found on the crowdfunding site.

Crowdfunding will allow us to track, maintain and pay dividends on your investment and gives everyone the opportunity to invest!

Some of you have already invested and those funds will be showing up on the site soon!  To check out the offering, you need to visit MassVenture.com and sign-up.  There are several steps (bureaucratic hurtles to overcome) but once signed up, you can check out our offering, our financials, the expected returns and ask questions.

Start here:  https://www.massventure.com/

If you need any help, please reach out to me and I will make sure you find the right tools you need to make your investment into StepStone.

Please hurry!  We want StepStone to be wholly owned by only StepStone agents, but unfortunately, we can't stop or control outside investors.  The only way to do that is to reach our funding goals quickly before word gets out.  We are being extremely generous in the sale so we want to be sure it benifits StepStone agents before all others!

Thank you for being a part of StepStone!  Please join us in our effort to make everyone more successful!

Thursday, March 23, 2017

Join our Captain Program

Phase I of the Captain Program was a pilot program that met with a lot of success (and some learning/tweaks).  But we are excited to move into Phase II!

What is the Captain Program?  The Captain Program is first and foremost a way for those more experienced with StepStone to introduce new Agents to StepStone.

Captains also help those who are newly licensed learn the mechanics of licensed deals.  And they are there to help those who want or need it, to navigate investment deals.  

Benefits to being a captain include:

·         Education:  Nothing will teach you advance skills faster than having to teach someone else.  We don’t always have the best answer, but by working with you, we will learn and we hope the same is true for you by working with us.
·         Payment:  For the Team Member’s that are required to use you for licensed activity, you will be paid.  They will be required to pay you (we will collect and disburse quarterly) $500 for up to three of their first closings. 

·         Partnering and consulting opportunities:  We offer deal consulting (25% of profit) and deal partnering (50% of profit) and deal shadowing (75% of profit).  Angie and Dan are your partners in this activity.  Your Team Member will most often use you to take advantage of this resource and in turn, you can lean on us to help, answer questions, guide you, etc.  For consulting opportunities, you keep 15% and StepStone gets 10%.  For partnering, you get 35% and StepStone gets 15%.  For shadowing, you get 55% and StepStone gets 20%.  This will allow us to expand and push this program and make sure everyone’s deals are getting the best results possible.

Phase II is to allow everyone to apply to be a Captain!

Join today!

All Agents applying for Captain shall have the following qualifications:

  • 1 Year Licensed with StepStone Realty (2 years total with license)
  • Minimum 5 Agent Transactions
  • Investor related skills or experience
  • Proven Participant in StepStone Activities
  • Two References from other StepStone Agents 


The application and more information is in the Captain Application Process folder in MojoDocs.  Join today and start building a team to help you make more money!









Wednesday, March 1, 2017

Guidelines to Recruiting New Agents

Recruiting new agents to StepStone is a great way to build residuals!  Last quarter, we sent out a check to one agent who has recruited several other agents that was more than $2,000.00!

So how do you recruit and make sure YOU get credit?  Below are the guidelines we recently posted in MojoDocs.  In the MojoDocs recruitment folder, you will find a lot of resources including sample emails and all of our marketing material.

Read these guidelines and ensure you get paid for people you help bring into StepStone!

Recruiting Guidelines for Agents

Who we are seeking:
Highly-motivated entrepreneurs 
Self-reliant Go-Getters
Those with a high level of integrity and honesty
Investors looking to get a license
Licensed Agents interested in the Creative side of real estate
Agents and Brokers who are already doing both!

What it is we do:
A sample introduction to what we do to get someone interested:
“We’re a real estate brokerage but we’re a bit different than other brokerages you’ve probably heard of in that we specialize in sponsoring investors who have their real estate license.  While most brokers shut down creative real estate investing among their agents, since we were built from the ground up for the real estate investor, so we not only allow for creative real estate, we encourage it.”

Our Three Promises:
A good quick run-down of what we are about is to give the potential recruit our three promises:

1. Freedom – With StepStone, you won’t be required to show buyers around or do desk duty.  We don’t want to change the way anyone does business, but just add to it.  We are just another tool in your tool chest for helping sellers.
2. Support – Unlike discount brokers, we do offer support for our agents, both in their licensed activity and in their investment activities.  We do this through our Captain Program, our online library of videos/webinars and our live workshops
3. Community – StepStone is a community of investor/agents that work with a high-level of honesty and integrity.  When you are StepStone, you should feel you can do a deal with any other StepStone agent on a handshake.  This allows us to help each other and do more deals together.  You’ll see this also in our monthly mastermind meetings and in our private FaceBook Group

Get Credit for your Recruit
To get recruitment credit, be sure enter the prospect into MovjoVest.com and then CHOOSE ONE of the following:

1. Invite the prospect to our monthly mastermind meeting.  They can come as your guest one time which is a great opportunity to check us out, meet some of our agents and really get a sense of what we are all about.  After the meeting, usually at around 10:30, we sit with guests and tell them about StepStone and everything we have to offer.  That’s a great time to answer any questions about us they may have.
2. Invite the prospect to a personal meeting with you and our recruiter.  Set-up a meeting with our recruiter for your area.  If you don’t know your recruiter, you can email Recruitment@StepStoneTexas.com.  Set-up a meeting where the recruiter will close your “sale” for you!  You must attend the meeting (unless otherwise agreed) to get credit.
3. Get a signed Statement of Intent
     a. Step 1:  Have the prospect sign the letter of intent
     b. Step 2:  Upload into the prospect’s file in MojoVest.com
     c. Step 3:  Click the Button “Convert Lead into Agent for Brokerage Team StepStone” in MojoVest

Get Paid!
Payments are sent every quarter!

Tuesday, January 31, 2017

Tough Lessons

Sometimes, we don't always get it right.  But you will easily correct mistakes with one simple rule.  Stay true to your core values!

Last month, Angie wrote a blog about our our core values.  Angie, Cameron and I spent over a month debating, changing, refining and making sure that they were the core values that really epitomized what StepStone was all about -- not just to the staff, but to our agents and our clients as well.

Every business needs to spend time developing and sharing their core values.  Some recommended reading on the subject are Good To Great by Jim Collins and Traction by Gino Wickman.  Put these on your MUST READ list!

Companies that are able to grow and sustain growth revolve around good people.  But what defines someone as a good person to be on your team isn't always the numbers or results.  

Jim Collins equates this to the people you work with (or in your company) are people on a bus.  Good companies know where they are going and try to fit people who help it get there onto the bus.  But Great companies fill a bus with like-minded people and then let the people decide where the bus goes.

Well, we put the wrong person on our bus.  And that led to a tough decision, but one that was clear.  We hired someone who didn't meet our core values.  While the numbers looked good, we made the decision to let him go because we are not trying to be a good company, but a great one.

When someone is not meeting your core values, it brings the mood, direction and overall productivity of your company down, even if that person is performing at a high level.  

Before reading Good to Great or Traction, I believe we would have held onto our sales person and allowed him to bring overall productivity down because we would have believed in the numbers.  But by having our core values well-defined, thought-out and debated before the hiring process even began, the tough decision became easy.

Whenever someone on your team doesn't meet your core values, you must let them go.  It's not even really a choice.  And since we did, the mood and productivity of our office is again accelerating.  We will hire a new salesperson, then more staff, then more salespeople and even more staff as we continue to grow and grow.  But those that stay with us will always meet our core values.

We will not sacrifice our values for numbers.  But will load up the bus with great like-minded people and enjoy the ride!  Because that is how companies become great!

I encourage each and every one of you to not only real Good to Great and Traction, (and other books I could recommend), but spend some time defining what your core values are and how you want to grow a company around them.  You'll be glad you spent so much time on it.  It will be the basis of future decisions and will allow you to ride the bus to success!



Photo credit: abraham.williams via Foter.com / CC BY-SA

Tuesday, January 3, 2017

StepStone Realty Core Values

DrivePeopleIntegrityCommunityIndependence


Over the last two and a half years, Dan and I, with help and support of Cameron, numerous friends, collegues and the agents who joined us early in, have worked on building StepStone Realty to what it is today… a thriving brokerage of over 120 agents and counting dedicated to the support of Investor Agents.  We spend a ton of the time working on building and improving systems, recruiting agent and building resources for existing agents. Just recently we decided to take a minute to step back and take a good look at where we are and where we are going.  Going through that process has reinvigorated our excitement for what we are doing and given us a new clarity on our direction.

A big part of that process was to determine the core values for StepStone Realty. We believe that by striving to uphold these values our success, and yours, will follow. I want to share them here with you and hope that you can get behind them. If so, I feel confident we can reach our goals together.

Drive
When Dan and I first started investing 12 years ago, we didn’t do it the easy way. We learned by trial and error and we kept ourselves afloat by spending our Saturdays buying things at garage sales that we could resale on eBay.  At the time, it didn’t feel like it was working but we never stopped trying and 12 years later I’m grateful for the hard-lump lessons we learned along the way.  Steve Jobs once said “I’m convinced that about half of what separates the successful entrepreneurs from non-successful ones is pure perseverance”, and I believe Dan and I are evidence of this. I see Drive in my agents everyday… the trips across town in rush hour to get a contract signed, the constant effort to learn more and more, the big ideas and the creative solutions. Stepstone Agents don’t rely on someone to tell them to do something… they just do it!

People
Agents. Fellow Investors. Employees. Clients. Customers. Sellers. Buyers. Vendors.
We believe that people are not just a means to an end or a tool to further our own goals. We believe that the roll everyone plays is valuable and that all people deserve to be treated with respect and honesty. We value developing relationships and uplifting people.

Integrity
This is a biggie for me. When we first started talking about opening the brokerage up to Investor/Agents my first concern was how the investor community would perceive us. There were a few “brokerages” who’s mere mention would cause noses to wrinkle and eyes to roll. I have made it my mission that StepStone Realty and it’s agents be known for their high level of integrity. It’s important to me that every agent on the team embrace this value.

Community
Several months ago, the coolest thing happened … an agent in San Antonio got stranded and within minutes of asking for help on our private Facebook page she had several other agents responding to her request for help. To me, that felt like validation that this community we are building is real. As investors, there is not a lot that binds us together. Being a part of StepStone; however, is being part of a community that supports and cheers for each other.

Independence
While I’ve put Independence last on this list is certainly is one of the most important values for most our agents. Another thing that makes StepStone Realty distinctive from other brokerages is that we allow our agents, our independent contractors, be just that… Independent. Many brokerages want to dictate how you work, when you work, and ensure that you are constantly working for their benefit. Entrepreneur’s cannot be successful without the freedom and independence to break new ground, try new ideas and let their drive carry them to their goals.


While we are just now sharing them with you they are the values that have driven StepStone Realty to be among the fastest growing brokerages in Texas. Thank you to all our agents, employees, and partners for embracing them with us. We look forward to growing with you all in 2017! Happy New Year!