Last week I had the opportunity to interview Kevin Kauffman, co-founder of Group 46:10, a real estate team based in Phoenix, Arizona. Kevin and his business partner Fred, have put together an impressive team over the last 6 years! For 3 years in a row Group 46:10 has been named one of the Wall Street Journal and Real Trends Top 1,000 Real Estate Agents in the United States. Each year they have made this list because their team placed in the Top 250 Real Estate Teams in the country based on number of homes sold! With 150-200+ annual homes sales, Kevin Kauffman and Fred Weaver rank in the top 1% of all real estate agents in the United States.
From a personal perspective, Kevin was inspiring to talk to. His passion for real estate was clearly shown throughout this interview and even more than that is his passion for people, both his clients and his team members. Kevin knows real estate, he knows education and he knows teams. He knows his stuff and is an expert in the industry.
My 3 big takeaways from this interview are:
1. Kevin was on a mission to succeed and he was going to succeed no matter what.
2. Kevin knew that education was critical to his success.
3. Kevin believes you have to do the basics in real estate to be successful.
I hope that you enjoy this interview as much as I loved conducting it. I really think there are some key points that Kevin makes that can help you in your real estate business!
If you want to hear the audio version, please download it here: Kevin Kauffman Interview
“I was on a mission and was going to make it work no matter what.”
Jen: You got into real estate when the market was actually headed south in 2007. Why did you jump in then?
Kevin: I got my real estate license in 2007 right when everyone started to panic, but the decision to get licensed started before the market started to go downhill. I had gone back to college and one of my professors was a real estate investor. He had built his real estate investing business based on the Rich Dad, Poor Dad model and was teaching to give back. One day he walked into class and said “Today we aren’t talking about what’s on the syllabus. We are talking about money and real estate investing.”
After that class I was intrigued and I got him to sit down and have coffee with me. This professor explained that he was a real estate investor and business owner. I also discovered he was teaching more classes based on Rich Dad, Poor Dad at a local community college so I took all of those and that’s where my love of real estate began.
Then I realized that I couldn’t become a real estate investor overnight, so if I had to keep working, why not be around the thing that I love and get licensed and sell real estate? That was the whole purpose of getting my real estate license. I didn’t consider the market for a second, I just knew I wanted to sell real estate!
Jen: Did you get licensed with the goal of becoming a real estate investor or to actively help people buy and sell homes?
Kevin: I just wanted to work as a Realtor and make money. I didn’t understand that real estate could be a business onto itself.
Jen: What was your experience like when you first started selling real estate? It can be a grind at first especially when you are 100% commission.
Kevin: Yea, I burnt through my savings pretty quick. It didn’t matter though, I was on a mission and was going to make it work no matter what. I didn’t know how but I just knew I was going to make it work.
I knew I needed to learn a lot right away. I was learning a lot of new things every single day. I was the guy literally in the Keller Williams classroom 5 days a week for 2-3 hours a day. I talked to people as much as I could. Once I realized what I didn’t know was a lot, it was overwhelming, but I kept going because I wasn’t accepting any other option. In the first few months I sold 6 or 7 houses and made enough to survive, enough to pay the bills, but I was more interested in learning what I had to do to learn to make more money and sell more homes.
The Turning Point
“Fred and I were willing to do short sales and many Agents at that time weren’t willing to do short sales.”
Jen: What would you say was your turning point and how you got from there to here in selling more houses?
Kevin: I think the defining moment was when Fred, who wasn’t my business partner at the time, when he and I sat down with a friend who had a real estate license. The friend had business that he wanted to refer to a real estate team and we said why don’t you just send it to us?
At that time Fred and I were doing a lot of short sales and using his brother to help with some of the work. We decided to share an office and share expense of Fred’s brother. We would help each other with our short sale files and share cost of office and Fred’s brother, but the income would not be shared. That way it wouldn’t feel like one person was doing all the work and the other was getting paid regardless. Both of us had been burned by Agent partnerships like that in the past where we were doing a disproportionate part of the work and not seeing the return that we earned. We both entered partnership carefully, split the expenses 50/50 but initially not income.
On the first Monday in February 2008, our team was started. Fred was working on a desk he borrowed from his sister and I was working off a $50 desk I bought at Ikea.
The Short Sale Niche
Kevin: Fred and I were willing to do short sales and many Agents at that time weren’t willing to do short sales. No one wanted to touch them. We thought it would be better to do short sales for two reasons, number one, both of us had worked for banks in the past and neither of us wanted to go there again. Been there done that. Number two, we just wanted to help people that were in short sale situations. Help the real life people that this was happening to. We knew that by providing this value these people would also send us their referrals and eventually their repeat business.
At that time people, Real Estate Agents, were scared of short sales. Right out of the gate we were getting 9 out of 10 closed and that was the focus of our business for the next 4 years. I decided I was not going to accept status quo that short sales were hard and that bank employees are annoying and tough to deal with, which they were. Other Agents decided that short sales weren’t worth their time and that’s simply not true. Most Agents didn’t want to work hard enough to make them work. I knew how to make sure shorts sales work. I knew that if I could convince the right person at the bank not to foreclose on the property, that the bank would agree to the short sale. It’s a simple math equation. We would fight through it and do the work when most people wouldn’t.
The Team’s Concept & Mission
“I asked Fred if he wanted to put his name on the sign because I didn’t and Fred said not a chance.”
Jen: How did you develop the concept and mission statement for Group 46:10?
Kevin: Fred and I started teaching short sale classes around town (Phoenix) and Realtors started referring us short sale business. Early on we realized we were building something when we went from 11 listings between us to nearly 50 overnight. We knew we had to make a formal agreement. I asked Fred if he wanted to put his name on the sign because I didn’t and Fred said not a chance. That night I emailed Fred 5 options and Group 46:10 stood out to us and our friend Mark. Comes from Isaiah 46:10, “I (God) make known the end from the beginning, from ancient times, what is still to come.” The idea came from our friend Mark, who is a Spanish Pastor, and took the 7 Habits of Highly Effective People and found the Scripture tied to each of the 7 Habits. That is where Stephen Covey got it from and that’s where it came from for us. Fred, Mark and myself all connected with it and Group 46:10 was born.
About a year later when we had really built a team with Buyers Agents and administrative staff, one of our mentors, Steve Chader, challenged us to come up with a mission statement or a MVVBP (Mission, Values, Vision, Beliefs, Purpose) as taught by Keller Williams. We spent a couple hours one day focusing on coming up with one that meant something to us. It resonated with Fred and I and we put a lot of sweat equity into it in the early days.
Jen: What’s the response been like to the concept?
Kevin: Ultra Christians like it way too much which kinda freaks me out, most people like it and some people don’t like it. One prospect called last month and literally said I am looking for a business transaction not a prayer group.
The Details of the Team
“Fred and I decided that we wanted a different business.”
Jen: How many people are on the team now? What’s it look like?
Kevin: Right now there’s Fred and I who are in charge of listings, the business side of the business and the Strategic Planning.
The administrative team consists of a full time Listing Manager, Transaction Coordinator and a newly promoted Lead Administrative Manager.
We currently have a Sales staff of 6 people and are looking to grow it to 10 in the next few months.
Jen: How do you decide it’s time to grow?
Kevin: We had a shift in our model and a shift in our vision. In 2012 we weren’t as invovled in the day-to-day business and things started to fall apart at the end of 2012. People left the team because they thought they could do better elsewhere and knew more than we did. We did have our faults which we own up to our part of it too. In 2012 the market shifted, we had no sales people and sales had gone from mostly distressed properties to traditional sales. We went into survival mode in 2013 and got used to selling traditional transactions.
We were plugging along and had two Buyer’s Agents that were paid a salary. Fred and I decided that we wanted a different business. We decided to hire more sales people to work the leads. Now every morning at 8:30 we have scripts practice and at 9:00 am everyone hits the phones. Now Fred and I are doing more training, coaching and mentoring.
Jen: What kind of test do you put out there to hire people?
Kevin: We base our hiring process off of Recruit Select, a two day Keller Williams class. We know that hiring is a process, not an event.
Jen: You and I have talked on Twitter about going with your gut when it comes to hiring and you say not to. But are there times you do just go with your gut when someone looks great on paper but bad in the interview?
Kevin: I go with Gary Keller’s quote on this one. “I’d rather miss a good one, than hire a bad one.”
The Expansion Team
“We never thought about doing this so we are still learning.”
Jen: You mentioned that you have just started an expansion team in Denver. Why Denver and what does that look like?
Kevin: Aaron Lebovic approached us and said if we ever thought about coming to Denver he would love to work with us. We had never thought about doing that. After talking about it for a couple months, going Recruit Select through Keller Williams and taking the Keller Williams Expansion class we decided to move forward! On September 1, 2014 we opened our first expansion team in Denver and started the Denver Metro Group. Aaron is the salesperson on the floor there and he handles all the listings and buyers and all the administrative tasks happen in Phoenix.
Jen: So Aaron’s group is the Denver Metro Group and not Group 46:10?
Kevin: We went with a different name because it wasn’t something we wanted to expand with because it (Group 46:10) has to do more with Fred and I and it has our thumbprint on it.
Jen: Will you be adding more cities and expansion teams?
Kevin: Eventually I think we will be in 15 different places in the next 3 years or so. We never thought about doing this so we are still learning. We are going to expand in Phoenix, there is enough space here to have at least 3 teams.
What Works, What Doesn’t
“The way you get there is to lead generate.”
Jen: Switching gears a bit what marketing are you doing that’s working and what have you gotten rid of? What is it that has helped you sell 150+ homes a year?
Kevin: The way you get there is to lead generate. You lead generate for people that want to buy and you lead generate for talented people to join the team.
The difference is to hire people and if you can generate business for 5 million in sales you can generate for more. Its not that hard, its not a secret. Call expireds, call cancelleds, call FSBO’s, do open houses, call people you know, send them notes.
You have to hire people and let them do their job. Agents are either afraid of the responsibility or they don’t get out of the way and they micromanage.
Jen: When you were first starting out what were you actively doing to get new business?
Kevin: We were teaching a lot of agents about short sales and getting referrals. We held a class twice a month around town teaching Agents how to do short sales. We received a lot of referrals for 2 years doing that. It opened a lot of doors for us and we met a lot of people that are still friends and mentors today.
We also did a lot of video blogging daily. There are thousands of videos of us on YouTube. We taught a course all around the country to other Real Estate Agents. These agents would think of us when they had referrals and still do until this day. We also stay in front of these Agents a lot to stay top of mind.
Thoughts on Social Media
“By being authentic with people that is when the good stuff happens.”
Jen: What role does social media play in your business?
Kevin: We bring in a lot of business from social media. I have been the anti social media for Realtor for the last few years because there are a lot of people out there that have taught a lot of crap about social media for Realtors. In my opinion, Gary Vaynerchuk’s book “Crush It,” from 2009 it still the most relevant book on the topic. All these people that teach about having these separate profiles but the reality of it is just be you.
One year we closed 20 deals from Facebook alone, but I’m not out there on Facebook selling real estate. I am just being me and not talking about real estate all of the time. By being authentic with people that is when the good stuff happens. Many Agents do this, “Hey look at me I’m a Realtor” and then vomit every post about real estate. That is the wrong way to do it.
Kevin’s Advice to New & Seasoned Agents
“These are tried and true and they work until this day.”
Jen: What 3 things do brand new Agents starting out need to do to get started:
1. They need to get a database and communicate to it regularly.
People put off getting a database until the end. They think they are never going to need it and you have got to have one.
2. Got to find a way to drive more business.
You’ve got to find a way to meet more people that you don’t currently know and get businesses from them. That could look like calling FSBO’s, expireds, cancelleds, door knocking, open houses. These are tried and true and they work until this day.
3. Work hard and be willing to learn
You’ve got to put yourself in an environment that supports learning. So many Real Estate Agents try to go out and do it on their own. So many Agents, and no offense to those reading this interview, so many Agents want to work from home or from a shared office like a Starbucks and that’s just not an environment for business. Especially when you are trying to learn to grow something. Sitting at home or at a Starbucks doing your work there is not going to serve you. You have to be in an office that believes those things, teaches those things and develops those things in you. I learn so much just by being in the office. It’s nice to work from home, it’s your bunker and you can get
things done. It’s nice every once and awhile, but I can’t say enough about the environment or the energy that you get by being in the office and around even just 5 or 10 people that are practicing the same scripts, making the same calls, supporting the same things you are doing and going to the same classes.
And people think they can do it on their own and they just can’t. That’s why real estate has a 30% attrition rate. After 3 years 9 out of 10 are out of the business and back working at Dillards. They wouldn’t do the things that are uncomfortable for them and most Agents just want to stay comfortable.
Jen: What 3 things would you tell seasoned Agents that they need to do if they want to move to next level?
1. Get a coach.
If you don’t have a coach and aren’t writing a check to a coach every month, you don’t want it bad enough. Not having a coach is the single worst thing you could do in this business. Some people say they don’t want to write a $1,000 check every month but the reality is $1,000 is nothing if you want to have a big business.
2. Not doing the basics like lead generating through phone calls, door knocking, etc.
3. Not be wiling to hire great people and let them do their job.These are the 3 most commons mistakes. Accountability groups are important too but you have to have a coach.
“My one worst nightmare is to be the number agent.”
Jen: Did you ever think this is where you would be today when you first started out?
Kevin: No, because I didn’t think you could have this sales business, this business, in real estate. I thought real estate agents go from transaction to transaction every year. I didn’t know you could literally have a business entity, a structure and having great people work for you
Jen: Are you still having fun?
Kevin: Probably more now than ever. I like watching other people succeed. I like watching people grow. I like the strategic planning of the business.
Jen: Is there anything you would like to add or that I haven’t asked?
Kevin: I would like to harp on education and environment. I see so many agents that want to go at it alone, at home or at a virtual office and they are not truly plugging into real education. They will go to the social media classes for example, but won’t go to the classes that teach them how to make cold calls and get over the fear of that. Or how to knock on a door or do an open house properly.
My one worst nightmare is to be the number Agent. I was one and hated it. I like to be around other people that are doing more than me that I can learn from and benefit from and give them a benefit back. I want a target, I need something to shoot at.
Facebook and Twitter are for enhancement to a relationship. They aren’t actually for getting business, they are to enhance the relationships. At the end of the day the relationships happen face-to-face and belly-to-belly. Gary Keller always says anything you do outside of knocking on someone’s door is just to avoid knocking on someone’s door. You have got to make phone calls. The Internet, Facebook, Twitter, Paid-Per-Click advertising, yes, but the reality is, it is being done to avoid knocking on someone’s door. We as a real estate community make up all this crap to avoid doing what it is that we should be doing.
Thank you Kevin for taking nearly an hour out of your day to answer my questions and to share your knowledge and expertise with Real Estate Agents around the country. Your turn my friends, what were your takeaways from this interview? Is there anything you would add to Kevin’s points? Please let me know in the comments below!