Posted on: December 08, 2021
WI 836 | Family Business

 

Working with family members can be advantageous. They’re people you can lean on to have the company’s best interests in mind, and when you reach your business goals, you can share your laurels with them, the people you value most. It adds a practical value, too — if one family member is in a pitfall, someone else can help pick up the slack.

Immerse yourselves as Chris Arnold, Tony Javier, and John Blackburn talk about running a real estate business with your family. John also gives us a glimpse of how he successfully created a business empire with his family for 7-8 years now. He also tapped on setting up boundaries, directing crucial conversations and balancing the fine line between empathy and professionalism to your strategy. Not only that, but they also walk us through the perks of using TV as your prominent marketing channel.

More exciting wholesaling ventures are waiting for you in this jam-packed episode!

Boundaries – 3 Ways to Help Navigate Working with Family Members in Your Business

Episode Transcription

As always excited that you are joining us. I have an interesting show. We are going to knock out a couple of things. I talked to a lot of people that are working with their families, and when you start running a team and bringing family members onboard, how do you make that work? I know a lot of people have thought about that, have the opportunity to do that or have tried it.

Maybe it’s successful. Maybe it’s failed but wanted to talk with our person coming on with Tony Javier, John Blackburn. We are also going to talk about TV. One of the big things, I will get ahead of it is the fact that without question we are sitting here doing some math. TV has 10X his business and we are going to talk a little bit about his journey with TV and this is a guy, John, welcome to the show. You have been doing real estate for years. You have been in the game a long time.

It’s a long time and I still have all my hair. I’m impressed by that.

Tony as always, glad to have you here as a co-host with me. How was Thanksgiving?

It was great. Thanks for having me on. I appreciate it and looking forward to hearing from John again.

John, where are you located? Where are you from for those popping in? Who’s this John? Give us a quick snapshot.

Born and raised in Central Pennsylvania but I now live in Sunny San Diego. That’s where I reside but I’m based in New Haven, Connecticut is where our offices but we invest all over the State of Connecticut.

You are doing deals in Connecticut but you are enjoying life in San Diego. Great weather out there. I have a couple of buddies that live out there, been a few times. Nice place. Working with family. This is interesting. First of all, who you have hired that’s in your family that you are working with, or this mom, dad, in-laws, what does that look like?

The business started was me, my wife, and my father-in-law. As things had grown, we brought in my mother-in-law as well to manage the office. My father-in-law is my boots on the ground, does project management, meets with the seller, and says anything that needs to occur in Connecticut. Those are the three family members, then we have 2 or 3 additional team members outside of our family.

What made you that decision? Some people might be thinking that route and go, “I don’t think I should make business and family.” What made you comfortable moving forward with that decision? It’s a big decision. People you’ve got to do Thanksgiving and Christmas with. It’s there forever. They don’t go away like an employee.

Some days you are like, “We’ve got to make it through this week.” I originally started my real estate career in Pennsylvania. I was doing everything from afar on my own in San Diego, and then I met who’s now my wife. Her father was a contractor. He had a lot of experience in the rehabbing industry, the construction industry. He was interested in getting into rehab.

He didn’t know all the other bits and pieces to it. I said, “Why don’t I just partner with him? He’s my boots on the ground since now I live in San Diego.” That’s how it started. I had always a close relationship with my father-in-law, even when my wife and I had just started dating. He’s a great person. I wanted to be around him number one.

Even when you disagree with your family, you are still empathetic and loving. You’re meeting them halfway because of your employee-employer relationship.

Number two, if you know we could make business work well together, and also another big factor to it was he was in construction. He was getting older and he was not in a position where he was going to be able to do that for a whole lot longer, meaning swinging a hammer, doing all of the manual labor that’s involved with it. He didn’t have a lot of retirements available to him either. It made sense to get him out of that role. Put them in a place where maybe he could buy some more rentals to help supplement his retirement account and give his body a break.

Would that mean that if I’m doing the math, you have been working together as a family for the entire many years?

I have been doing real estate investing for many years. This group of family members is about 7 or 8 years.

That’s still a long time though to keep that together. I was asking you as we were prepping for the show, for somebody reading, “What might be the 2 to 3 things that you would share his wisdom to pass down on how to make the family dynamic work in the business?” The first one that you shared was this idea of screening because you are working with family doesn’t mean you should work with everyone in your family. Talk a little bit about that because you’ve got a good example of how this has played out.

You are alluding to the fact that my wife and I no longer work together inside of our business and we figured that out after the first maybe three years working together. We realized two cooks in the kitchen, two alphas didn’t bode well. My father-in-law would be the referee in a lot of scenarios. It turned out that she wanted to go do something else, we felt that it would be best if she went and did something else, and it wasn’t a good fit. We were fine with that but it’s recognizing that it is the difficult part and having that conversation of like, “This isn’t working. Let’s figure out how to part ways amicably and still sleep the same bed, and live on the same roof.”

That’s a huge lesson right there. You have the ability to come to the conclusion that these particular dynamics are not going to work but the dynamic with your in-laws is working. That was great leadership and beginning to discern that, and that’s a tough decision to make. Those were not easy conversations to come to. The second thing you told me was, “You can’t treat family differently.” What do you mean by that? What does that mean?

Number one is the conversations you have with them from the standpoint of you talking to your family normally a lot differently in everyday life than you would talk to an employee. You hold your employees to a different standard and a lot of cases than your family members. Your family members forget something, “That’s okay. You know I love you anyway.” That leads to a lot of frustration long-term.

One thing I learned over the years is as the main driver of this ship, that is our business when I’m talking to my family members, I’m going to learn their communication style. I’m going to learn how to best communicate with them that works well for them. I’m going to ultimately care, be empathetic, and loving but also from an employer-employee vantage point if you will because when you treat them the same as you do at Thanksgiving dinner in the office, things get misconstrued. That helps you separate Thanksgiving dinner in the office and allows you to create boundaries. You are still being empathetic and loving but you are meeting them where they are at, giving them what they need from an employee-employer relationship and that’s what seemed to work best.

You have to do that, particularly when you have other employees if they feel like family is being treated differently, giving additional benefits or whatever that look like that’s a hard dynamic if you are not in the family. You’ve got to be part of the business. What I hear you saying is, it’s one game. I’m not playing a game with my family, and then a separate business game with my employees.

We are all in here playing the same game. We are all going to treat each other in the same way. That’s a huge reason why you have been able to make this work for several years. The last thing you talked about, and I love this, there’s a great book around it called Crucial Conversations. As you said, you’ve got to be willing to come in and talk about the hard things. What does that look like for you working with your family to keep this together as long as you have?

There are two levels of these when some family members or some family dynamics when I have seen them working together, they are either going over the top when something goes wrong. A massive level of disrespect or they are letting it slide because they are family members if something goes wrong. You’ve got to find that medium. When something goes wrong, we can’t get to the point where we are disrespecting each other. We are yelling, screaming or swearing. You would never treat an employee that way at least once.

WI 836 | Family Business

Number two is we are never going to talk about it because I’m going to have to sit across from this person at Thanksgiving dinner and I don’t want them to think that I’m always mad at them, I’m not a nice person or a good boss. There’s that fine line like, “I respect you. I love you. I know you want this business to succeed like mine but we need to have a hard conversation now because here’s a problem that I’m seeing.” It goes back to treating them as an employee with empathy, love, respect, and at the same time, being willing to have a difficult conversation with a family member that has to do with business. Not letting that slide under the rug because then that resentment builds the business stifles and so on.

Let me recap those because it’s a great thing to headway before we transition into TV. What I hear you saying to recap that is number one, have the wisdom and clarity to understand which family members you shouldn’t and should work with. Number two, you’ve got to treat everybody the same, everybody is playing the same game.

Number three, you can’t be afraid to have Crucial Conversations and when you do, you can’t be on one side of the spectrum of the other. That means you can’t be on the yelling, which is not normal but might happen in a family dynamic. You can’t just sweep it under the rug. You’ve got to be able to have healthy dialogue.

It’s a valuable conversation because I’m amazed at how many people I come across that are in some way working with a brother, cousin, whatever that looks like a family member but I don’t hear a lot of people that have pulled it off as long as you had. I want to add a little bit of value around that topic because I don’t think it’s addressed a lot even though it’s something that happens quite a bit within the real estate industry.

Let’s transition. Let’s talk about TV because this is where it starts to get interesting for you and your business. You have been doing real estate up to this point, everyone wants to know what you were doing for lead gen because when you and I were talking, you were like me. You are one of those guys that’s probably out there, “I have probably done it. I have tried.”

If a real estate investor does it to get the phones to ring by everything from direct mail to probates, to ringless voicemail, to SMS, to cold calling. I was hugely addicted to Hubzu and Auction.com back in the day when they had great properties on there. I did it all, going out, creating relationships with real estate agents, pocket listings, and all that stuff.

It’s a grind between list stalking, managing your cold callers, making sure your numbers aren’t getting blocked. There are a lot of managing pieces, and at the end of the day, the response is usually low. Number one and number two, we get a lot of aggravated people, “Why are you calling me? How did you get my information? All this stuff.” After a certain time, fifteen years you are like, “I wish someone would call me.”

It’s tough. You used the right word, marketing a lot of times can feel like a grind. Being in business as long as you have, you start to ask the question, “There’s got to be maybe a simpler way. A more efficient way. Away in which I’m waking up every day walking into the office, and not feeling overwhelmed by how I’m generating these leads.” You are right.

You came to that conclusion and came across TV, and as you have been doing it now, there have been a few things that have stuck out to you. Number one is it makes the phone ring the bottom line. Compare that with some of the stuff that you were doing previously. How does TV feel when all you are doing is making the phone ring versus all the list stacking and everything you had before to generate those leads?

Everything from having the initial phone call with Tony, to getting the commercial shot, to getting it live on the air, to make the phone ring, it has been seamless. I own several businesses, and it’s the least amount of work I have had to do on marketing ever and it’s fantastic because not only has it been easy but people who call me are like, “I saw your TV commercial. Can you buy my house?” Which you are like, “What? You mean, you want me to buy your house?” It’s nice to get that response.

Tony, let me bring you in on that. How does that make you feel when John says, “Seamless and the least amount of work I have had to do on a marketing channel?” How’s that sound to you?

It’s amazing and that’s one of the reasons people come to us for TV is that they are sick of cold calling. They are sick of texting. They are sick of pulling lists. Like John said people are calling you saying, “I want to sell my house as opposed to a mixture of that, take me off your list and quit soliciting me, and all that stuff.” I’m all about automation.

As John said, there are a lot of things in our business that can take a lot of time and effort. For me, TV, years ago when I started it, I have spent little time on it. Being able to get this in the hands of other people like John and having them not only get great leads but also get them their time back and a good return on investment. It’s unbelievable.

We are going to get to these numbers because that’s going to be the highlight, John, as we talk. How’s your return so far? I was blown away. Let’s go to number two before we hit that. You have loved the fact that this has created instant credibility for you. What is it done for you, your business, your brand, by being on television versus what you were seeing before utilizing other marketing channels? What’s the difference?

Using other marketing channels it’s like, “Who are you? How did you get my number? How do I know you are legit? Let me go check your Better Business Bureau stuff.” When people see us on TV, number one they are like, “This Company has enough money to market on TV.”

When something goes wrong, you can’t get to the point where you are disrespecting each other.

They don’t even ask those questions that you threw out there, do they? Like, “I passed those questions. That is credibility. I don’t need to ask questions. I already believe you.”

They get it out of the way before they call us. We have an eight-plus better business rating, they can go and look at our website, and then when by the time they call us, it’s a done deal in the sense of credibility. They know it and they are there to have a real conversation about selling their house.

When you are on the phone where is your acquisition manager taking those calls, maybe you have taken a few of those in the beginning. How do those calls feel different? how do you tell that you have instant credibility? What are they saying to you that makes you feel like, “I’ve got this in the bag already even before the conversation started?”

Everyone is open. That wall has been removed. “What’s going on with the house? Can you tell me some issues with it? How much do you owe? Do you know if there are any liens?” All of these may be what someone would consider more of an invasive question if it was a cold call, text message or something like that. It’s like, “When I call this person to ask them if they will buy my house, I’m probably going to need to be open to sharing this information with them.” They are and you can get all of that information out on the first call like that, no problem.

I love that description. The fact that they are coming in, the walls have already dropped and they are open, ready to have a discussion and answer questions. It’s not like you’ve got to spend a lot of time trying to prove yourself or build rapport. The proof in the rapport is already here. Tony, how have you seen this play out and your business is, you have been doing TV, this instant credibility? Do you find on your side, they come in and ready to be vulnerable, open up, talk, and answer maybe some of the tougher questions about their house like condition, equity, and stuff like that?

You have already taken down the barrier of entry people saying when you get a text message like, “I get text messages all the time.” If I did want to sell my house, I would ask them questions, “How long have you been in business? Are you able to close? Do you have cash?” There would be some things that I would ask to make sure this company is credible.

I do that with any company that I do business with but when it comes to TV that goes out the window. Rarely do they ask, “How long you have been in business?” There are not those questions. They already know that you are willing to put your face on TV, you have the money to spend on TV, which isn’t as expensive as you would think but people think it’s tens of thousand dollars a month which is not. It makes the conversation so much easier.

Now, they are sometimes convincing you to buy their house as opposed to you convincing them, and not only that but if they call you off the TV, there’s a pretty decent chance that they are only calling you and John can tell me if he has seen this or not. With a lot of other marketing methods, some people are on dozens of people’s lists, and they are getting solicited, marketed to whereas TV, they may not be on anybody’s list, or maybe on a few people’s lists. They call you and only you, and you are having that conversation with them. That allows you to get a better deal on the property that you don’t have to compete as hard. There are a lot of things that make it a lot easier when you are on TV.

A good way to sum that up is when they call off of these other marketing channels and we are on the receiving end, we are automatically in the hot seat but off of television, rather than us being in the hot seat, they come in and understand in this sense like, “I’m in the hot seat.” You guys are professionals. You are the experts. You are the ones on TV. I’m going to reach out to you, I’m going to put myself in the hot seat, and let you start asking me questions right away about my house. I love the fact that you are bypassing that whole concept of having to be in the hot seat at all. Those questions aren’t even being asked. That’s a huge piece.

Let’s go to this last one. We were talking and started kicking around some numbers and, John, you lit up when I said, “What do you feel like it has been the biggest change in your business?” Your whole voice went up, eyes lit up, you are like, “It’s 10X my business.” Talk a little bit. This is not something that has been a small marketing channel. This comes in and up the game for you guys.

I probably wouldn’t recommend this to anyone else but I have pretty much stopped all other marketing channels outside of television because of how successful it is. My goal is not to do $150,000, $200,000 deals a year. My goal is to be as profitable as humanly possible with a small number of deals. I have been in the business for years, the first month we did television, and he broke every system I had because of the lead flow that came in.

I was calling him, I was like, “I can’t handle this but it truly has a 10X my business.” Probably more based on doing some math in my head over the numbers that we talked about but that has been the biggest game-changer is the ability to have an ad spent, spend it and get high-quality leads on order. To be honest with you, I only probably spent 50% of what I could in my market before I would oversaturate. The plan is to up that marketing spends at the beginning of the year, and we will be on point to do over a million dollars in revenue from TV alone and marketing.

Tony, that shows a lot of confidence that John trusts these marketing channels so much that he’s putting pretty much all of his eggs in that basket.

WI 836 | Family Business

Family Business: You have to be willing to have a difficult conversation with family members you are doing business with. You must not let disagreement and resentment build around the workplace.

 

Thanks for all the pressure, John. That’s a big statement.

That’s trust, though.

I wish I knew results vary depending on the marketplace.

It’s not just one month of the results. He has been doing this for several months now and it has been pretty consistent. The numbers that he’s getting are pretty unbelievable. I could see why he turned off other channels. If he’s spending the amount of money that he is, which isn’t a lot honestly for his market and he’s getting such high returns, why would you do anything else other than knowing that potentially down the road it could decrease some? It has been consistent for many months now. I could see this continuing for a long time for sure.

Let’s get down to the numbers. Now, what is your budget? I know a lot of people won’t look at the TV because they automatically assume I’ve got to start probably maybe around $20,000 a month or something like that. What is your monthly budget now?

It averages about $6,000 a month.

A reasonable budget for TV and you have been advertising now within that range. We sat here, you pulled out your board on what you have closed, what you’ve got pending meaning it’s resold already. What’s the total amount of revenue that you’ve got now between closed and pending?

Over $330,000.

What’s the return on that right there, Tony?

Let me do the math.

Let me know when you are ready for that. When we were saying $10, that wasn’t a joke but on top of that while Tony adds that up, he’s like, “That’s not even the end.” You also picked up another five deals that you are doing short sale probate on. That’s not included in the $330,000.

None of those are not assigned yet.

This is just a pipeline. It’s coming down and you picked up an Airbnb property.

Marketing can sometimes feel like a grind. You have to ask questions and look for a more efficient way. Generating leads must not be overwhelming.

In Vermont near a ski resort.

The best way to determine that value of that deal is going to be equity. How much equity do you feel you are getting out of that deal?

Probably about $100,000 at least, we will be sitting in that power. The cheapest property on the street sold for $345,000. We bought it for $65,000 and it needs some renovation.

Tony, what’s that dollar-for-dollar return? Would you come up with it?

Without the five deals that are pending and the Airbnb?

Take all that off the table. Let’s go to the typical, traditional close culture.

Take out the Airbnb that is fourteen times return on investment.

That means for every dollar, John, you are spending now, you are getting $14 back. How do you feel about that?

To give some context because a lot of people were like, “What is $14 mean?” I also do marketing for my real estate education business that I do, and in that marketing arena, Facebook, Instagram, YouTube, we are on the moon if we are to 4X on the marketing budget. 4X on the moon versus what I’m getting in real estate marketing through 10X TV, 14X is mind-blowing.

It is mind-blowing because I would say the same thing. If I have a marketing channel that is not television or radio, and I’m seeing a 1 to 4 return, I’m the same. I feel great about that. If it’s 1 to 3, I feel good about that, too. We are going to keep that. 1 to 3 and 1 to 4, that’s something to celebrate. 1 to 14 is crazy numbers as we are talking about it as well. I absolutely love the returns on that. What do you think at this point, you are spending six and have the ability to go up to twelve? What do you think you want to do? Do you want to continue to expand your budget over time? What’s coming down the pipeline?

We are increasing the budget as of January 1. They will go up from $6,000 to $9,000 a month in Connecticut margin, and then I want to buy some more rentals and some multi-units. That’s what I have been doing for my profession for the last years is focusing on a lot of buys and holds around the country. I picked up and secured another market with Tony in Tennessee. I will be opening up another market starting January 3, 2022, specifically for doing a little bit of wholesaling but getting as many rentals and multi-units as possible.

You snowball this thing by increasing your budget, you are going into other markets, and you are a huge believer in this. If you are sitting, reading, and looking at 2022, figuring out what I want to do for marketing. Tony and I are huge believers in mass media. We both deeply believe in the value of radio and the value of television and love a guy like John, come on and talk about his experience and what he has seen so far. Tony if somebody is reading and like, “I keep hearing about this TV thing. I feel like I want to maybe test it out a little bit. Call, asked some questions. Where do they go to begin the conversation?

Go to RealEstateMastersTv.com/chris. That’s a special link for Wholesaling Inc readers if you go there. We do some semi-market exclusivity. You can go there and apply, and make sure you are a good fit for the program first of all, and second, make sure your market is not taken. We would love to see if TV would be a great fit for you.

WI 836 | Family Business

Family Business: If the walls between you and the customers are dropped, you don’t have to spend a lot of time proving yourself or building rapport.

 

Tony, I have a final question for you because I feel like you have been doing this long enough and I know I’ve got to this place as well. You have helped so many people in many cities set this up. You have seen all the data come back in, are you at a point now where you sit back and go, “I know that TV is fundamentally going to work about anywhere.” Not because I believe but because I have seen it again and again, and there’s a confidence that builds with that when you have helped enough people set up a marketing channel.

People buy into franchises because it’s a proven system and they can follow it A, B, C, D, all the way to Z. With TV, we have set up a franchise system, and the fact that we are using the same scripts, we are buying the same stations and shows in every market. We are pretty much everything, looks pretty similar in every single market we do. We do the full implementation. We are not giving this to our clients, we are fully implemented for them. That’s why John said earlier that this is the easiest marketing channel that he’s had to do is because we do 95% of it.

When we launch it in a new market, I have no doubt in my mind that it’s going to work. Rarely do we ever have a client after 30 to 60 days, come back to us and say, “We are not getting the results that we want.” Does it happen? Absolutely. We are not perfect but 100% when I launched this program, I wasn’t sure exactly how it would produce another market because I knew it worked for me well right off the bat. Luckily, when we did our launch it started working for a lot of clients quickly and I mean look at John’s numbers within four months. Most people would be happy with that number in a year, let alone getting that number in four months.

Can I add one thing, is that number probably if I’m being honest, should be bigger but because of the response I’ve got initially, I didn’t have the ability to follow up at the level that I wanted? There’s money left on the table.

Probably few of those leads, slipped through the cracks.

More than a few probably.

John, thanks so much for coming on. First of all, the wisdom you shared around a family that’s a great topic and something that should be addressed, and congratulations on making that work for years. That is a big feat. For people reading, it doesn’t always go that way. When I hear someone that has a track record like John does for work in his family, I want to start asking questions. I was sitting here learning as well as I was asking. Congrats and hats off to you on the success that you have seen working with Tony on your TV. Those are incredible numbers I don’t know anyone reading now is not psyched about that and I’m psyched for you. You’ve got to be feeling good now.

I’m happy to come and do this. I was pretty stoked when Tony offered for me to come on here. Thank you for having me. At the end of the day, if I’m going to have success, I’m going to scream it from mountaintops because there’s no reason to not help other investors get there. We are all in the same grind. Usually, different parts of the country, and any help that I can provide, I’m happy to do.

John, if anybody wants to check you out, whether that’s an Instagram, Facebook, or a website.

You can hit me up on Instagram, @JBlackburnIV or RentalPropPro.com.

Sounds great. Thank you, guys, so much for coming on, and to the rest of you, as always, we appreciate you joining us. We will talk to you soon when we add more value. Talk to you later.

 

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About Chris Arnold

WI 836 | Family BusinessChris Arnold is a 15 year Real Estate veteran who has closed over 2500 single family real estate transactions in the DFW metroplex. Chris is the founder of multiple companies that are managed by a US virtual team, which allows Chris to run his organizations while living in Tulum, Mexico full time. His passion for leaders has led to the creation of Multipliers brotherhood which serves the top 5% of real estate entrepreneurs out of the US. Most recently Chris has launched his REI Radio coaching program. This program is designed to teach real estate investors the marketing stream that everyone knows about but NO ONE is doing!

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