Building a billion dollar business with Joe Williams, cofound of Keller Williams

Embark on a journey with Joe Williams, the visionary co-founder of Keller Williams Realty, as he shares the gripping tale of his ascent from personal tragedy to real estate stardom. His candid revelations highlight the profound realization that the wealth of relationships often surpasses the pursuit of riches, especially as we mature. Through his narrative, we uncover the profound life lessons that have not only paved the way for his business triumphs but also shaped the very essence of his personal growth and entrepreneurial spirit.

This episode peels back the curtain on the transformative strategies that catapulted Keller Williams to the pinnacle of the industry, with Joe himself detailing the 'stable table theory' and the pivotal shift towards empowering agents. My own unexpected entrance into real estate, spurred by a serendipitous Texas law, sets the stage for a discussion on the innovations that revolutionized the business model, from commission capping to profit sharing. Together, we dissect the blueprint for creating a dynamic culture of mutual recognition and support that drives a company to soar to new heights.

As we draw our conversation to a close, Joe imparts the four key pillars that form the bedrock of a successful company culture, and we traverse the intricate dance of regional market expansions, gleaning lessons from his national business adventures. We conclude with reflections inspired by centenarians, contemplating the enduring impact of our legacies, the significance of the lives we touch, and ponder the economic trajectories that lie ahead. Join us for an episode that's a goldmine of entrepreneurial wisdom, personal fulfillment, and the resilient spirit that triumphs over adversity.

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Transcript

Speaker 1: 0:00

Life is so much more interesting when you can hang with interesting people. As you get older, like me, you get to a point where you start to understand that the relationships that you have are far more interesting than a lot of the wealth you're building. And all of that because you're not going to take it with you. Like they say, you don't see a hearse driving up, a big truck driving up beside the hearse. I mean, it's money is great, but what are you going to do with it?

Speaker 2: 0:30

The goal of this show is to help healthcare organizations scale by leveraging real estate strategies and interviewing high level healthcare executives in order to pull out lessons learned along the way. If you'd like a free site selection analysis from our team, or you'd like to learn more about how we're acquiring real estate through our fund on the blockchain, visit us at wwwreuniversityorg and drop us a line. That's re as in realestateuniversityorg. Hello everybody, welcome to another exciting episode of Helping Healthcare Scale. I'm your host, austin Hare. Our guest today is a very special individual. His name is Joe Williams and he's the co-founder of Keller Williams. And if you're thinking Keller Williams like the real estate agency, yes, that's correct. They started in 1983. And today Keller Williams is the largest privately owned real estate franchise in the world. They have 200,000 active agents and are in 64 countries. In 2022 alone, they did close to $400 billion in sales volume, and so, joe, I just want to thank you for coming on the show today.

Speaker 1: 1:25

Awesome, happy to be here. I don't think I ever was able to speak as fast as you.

Speaker 2: 1:31

Yeah, I should apologize. Yeah, I am. I listen to all my podcasts at 2x speed, and so I think it has a subconscious effect of making me talk faster. Great. So, yeah, this is exciting. There's a lot of stuff to talk about today, but I would like to just get your story for the audience. How did you, like, was your family, into real estate as a child growing up? Did you do anything entrepreneurial? Were you? Did you know you were going to be doing this? What was your early life like?

Speaker 1: 1:54

That's a great story, as they all are Anytime, and you're in a position to talk to a lot of entrepreneurs, so you see how varied these stories can be. The truth is, my journey was interrupted pretty early. When I was 10 years old, my father died massive heart attack at home Wow, and so all you've got at that point is mom and the three kids and I was the oldest son. My sister was like two years old, I was 10. She was 12. And my little brother was two.

Speaker 1: 2:30

Over time, everybody went to work really early. Back in those days, most married men Austin didn't have more than like a $10,000 life insurance policy. All these guys had fought in World War II, and it was very common if they had life insurance at all. It was not a common thing, and so the good news is my dad had worked at Fort Sam Houston. He ran property disposal, which back in 1964 was still a huge department. The Army was trying to unload all of this stuff that they had used in World War II. So, anyhow, I grew up in San Antonio.

Speaker 1: 3:10

My junior year of high school, I remember that when you became a senior, what they did was they put you in a three-hour study hall. There were no AP what you know as an AP class advanced placement. They didn't have any of that back then, and so I dreaded the idea that I was going to be sitting in a study hall for three hours Can you imagine that? And so there was a program called distributive education. What they allowed you to do is they allowed you to go to work, and you could work in retail or you could work in office. Office was called the vocational office education.

Speaker 1: 3:50

Anyhow, what that allowed me to do allowed me to work three hours in the afternoon. You went to school for three hours in the morning and they gave you credit. And when I was doing that, I was working in a toy store for a jewish family, mel and becky always great people. I got to know their son really well and, if you can believe this, it was a toy store. It was a great job. We got to play with everything, and the boss encouraged that he was go learn this stuff you can't sell to what you have.

Speaker 1: 4:23

But but the bottom line is the University Interscholastic League, which is still around today. In high schools they organized a lot of these competitions for high school kids and one of the competitions was called sales demonstration and what you had was five minutes to set up whatever product you wanted to use and then one of the instructors would come and they would play a custom and then you had 10 minutes to sell them. So I did really well. In fact I almost won state for the state of Texas, but I came in second Kid that beat me sold tires. He was good, he deserved it.

Speaker 1: 5:00

But my mom used to manage beauty shops. Now today you call that a hairstylist. Okay, but back then, when you think about it, I gave her the trophy and she put it up on the counter and I'm sure she was always so proud of her son who has to get their hair done every week in their job. It was the real estate ladies. And so they told my mom they said, bertie, you need to get that boy in real job. It was the real estate ladies. And so they told my mom. I said, bertie, you need to get that boy in real estate and that, austin, is how I ended up getting in the real estate business.

Speaker 1: 5:34

My mom comes over and says yeah, honey, you need to think about real estate. I didn't even know what the word meant. What is that? So, buildings, land, they call it real estate. I didn't even know what the word meant. What is that? He said buildings, land, they call it real estate.

Speaker 1: 5:46

Oh okay, turns out one of our best customers was one of the big real estate brokers there in San Antonio. So one day I caught Tony and I said Tony, tell me about the real estate business. And he said Joe, why don't you come down to the office? Of course I've been selling him stuff for three years. We had a huge hobby counter Back then. Toy stores sold everything electric trains, rockets, gas power plants we had it all. He had two boys. I've been selling him hobbies for three years.

Speaker 1: 6:21

I go down to his office this is a great story and he tells me all about real estate. I said Tony, that's for me. And as he's filling out the application, he says well, what's your age? I said here's my birthday. He goes oh no, I'm like. What do you mean? Oh no, he says in Texas you gotta be 21 to sell real estate. I was only 19 at the time. So I said there's got to be a way around this. He says that's a good question, let me check. So he dials up his fraternity brother who's a local attorney there in town. They were business partners on other things and I hear Tony going yeah, that might work. And when he hangs up the phone I ask him what's going to work and he goes turns out in Texas, if you're the son, the oldest son of a widower has the ability to have contractual majority at the age of 19. And that, austin, is how I became probably one of the youngest real estate agents in the state of Texas in 1973.

Speaker 2: 7:24

Man, that's so cool and it's such a benefit. Like the earlier you can get started in something right. I think about so many people I know today. It's go to school, you go to college, maybe you go to trade school, you try something, maybe you're in construction and then, like you're in your late 20s by the time you said, oh, maybe I'll be in real estate.

Speaker 1: 7:48

If you're lucky, so many people are in their 30s and 40s by the time they get into it. Yeah, well, and one of the biggest benefits I had was so I was putting myself through school, okay, and I was in junior college in San Antonio there. So I took a semester off to get started, to get my career, learn the business, all the things you need to know. In fact, I remember my mom crying when I came home. I'm going to take a semester off, you're going. And she starts crying. I said, mom, what's the problem? She said I know you. You're going to make so much money You're not going to go back to college. And I said, mom, that is not the case, believe me. In fact, when I hit 60 hours, when you're in a junior college, it's just 60 hours is all you can take.

Speaker 1: 8:25

And so I called Austin, talked to the Texas Association of Realtors. I said, hey, who's got a degree program in real estate? And the guy, tony Meeks, great guy. He said Joe. He said SMU in Dallas or the University of Texas in Austin. There was no way I could afford it.

Speaker 1: 8:46

It's a great college but it's way beyond my pay grade. But back in those days, austin, if you had to pay for a car and you had a roommate and you could still work 40 hours a week, you could put yourself through state school a semester hour. Are you ready for this? A semester hour at the University of Texas in 1974 was $15.

Speaker 2: 9:11

Oh my gosh.

Speaker 1: 9:12

So for 500 bucks roughly, that was your tuition and books per semester. Wow, and so I got my degree in real estate from UT, and that would have been 1976. My degree in real estate from UT, and that would have been 1976. Now I tell people all the time, that degree in a cafe mocha, all you're going to get with that degree is a cafe mocha at Starbucks, because real estate is a street business. You learn it by doing it Okay.

Speaker 2: 9:39

Yeah, no, that's so true. So that was 1976. And I see that you started Keller Williams in 1983, which, honestly, that's not that much time like seven years. Yeah, we went, I went to work.

Speaker 1: 9:49

I went to work for a broker here in Austin Great guy and in fact we were all San Antonio boys and basically went to work for him, managed for him, really got good varied experience in the eight years I was with him. And that's where Gary and I met each other. Gary has a degree in real estate from Baylor and in fact what's funny was I wrote an article about recruiting on campus and it was a lead article in the trade magazine for the state here and so we were out recruiting on campuses and that's where I met Gary. He was at Baylor interviewing. He came to work for the company. We got to know each other and then in 83 is when we broke off and then started the company.

Speaker 2: 10:39

Okay, yeah, I guess the million dollar question is what did you guys do that led to so much success? Did you have maybe it's a two part question, number one being like did you have something that was like very unique in your idea and your approach? And then the second part is, of course, so then, how did you implement it? If you did?

Speaker 1: 10:55

Yeah, basically for us, we started out just doing the Pepsi challenge. Okay, how can we build a brokerage company and make it better? In other words, let's look at the five or six or seven things that are parts of a real estate company and how do we make each part better? Now I can tell you that by 96, we had an incredibly bad real estate recession hit Texas, oklahoma, louisiana, colorado, and it was primarily driven because of the oil collapse. We had oil that all of a sudden, a barrel of oil dropped down to $7. It was catastrophic, and that industry drove so many other industries in Texas, and so all of a sudden, we had inventory everywhere, see-through buildings. People talk about 07, 08, 09. That was a cakewalk compared to 86 to 90.

Speaker 2: 12:05

for 90. Oh yeah, texas, I heard about that. Yeah, texas had their own back when real estate was like a lot more regional and then it is. I feel like now so many more things are national and macro, but yeah, I heard about back then. Because of the oil, the real estate just got absolutely crushed during that timeframe.

Speaker 1: 12:16

Oh, got crushed. And that was the same time as the S&L crisis. See, in the old days if you had a savings loan, you could run a shadow organization that did nothing but partnerships with developers, and the way they did it. I would go to the savings loan and go hey look, I've got a thousand acres and I'm going to develop it and I need 10 million bucks to get it done. They would put up the 10 million. Then they would become 50-50 partners with you and that's what drug them all down.

Speaker 1: 12:53

When the crash came in prices, it killed all the SNLs Because all of a sudden now the FDIC stepped in and said hey, man, you don't even have enough assets here to back up your deposits. And so they shut them all down. In 07, 08, and 09, they didn't shut the banks down. What they did, they just kicked the can down the road. But back in 86, they shut them down. We lost every single bank that we had in Austin, texas, except for one bank, and we used to always laugh because that guy never made any real estate loans anyway.

Speaker 2: 13:31

And so it's the only reason he outlasted everybody.

Speaker 1: 13:34

It was pretty funny. But when that happened, gary and I looked at each other and said, oh, we got to do something because, yes, we may survive this, but our agents are gonna have a hell of a time getting through this. And so that's when the modern day Keller Williams got put together, because it forced us to look at what we were doing and come back and change the whole playbook. In fact, that Austin is where I came up with what I call the stable table theory, and that is that any great idea, any great concept, typically is made up of, most of the time, four moving parts. Okay, and so you'll love this.

Speaker 1: 14:27

I was in St Paul, Minnesota, I guess, about a year ago, and the way I always introduce this is I look at the group and I go, hey, what's it take to run a good restaurant? And typically I have a whiteboard behind me and people will start saying things from the audience. But it basically comes down to good food, decent service, reasonable price for what you're buying and a decent location. How far will I drive for a pancake? And so I look at them. I turn to the audience like, okay, I get it. These four things drive a good restaurant.

Speaker 1: 15:04

So let me ask you all a question here in St Paul. Okay, I get it, these four things drive a good restaurant. So let me ask you all a question here in St Paul, minnesota how many family-owned restaurants have been in business for more than 20 years successfully? And it's really funny, austin, other than a major town, new York, miami, chicago if you're in your average town, st Paul, getting to the first five is easy. Everybody knows the first five, but then they get to the second hand and it's funny, they'll get to seven, eight, and we tell them this is not a franchise. In other words, I don't want any Chick-fil-A or McDonald's.

Speaker 1: 15:43

I want family-owned operations and on the average in a town the size of St Paul they'll get to maybe eight.

Speaker 1: 15:53

And so then I turn around. I go okay, so what's the population of St Paul? And in St Paul's case it was a million people. So then I look at them and I go, okay, so in a town of a million people, you have on this board here eight who have figured out this formula. Why is that? And of course, the answer is it's harder than it looks.

Speaker 1: 16:15

And Texas, I don't use restaurants, I use football. Football is a religion here, and of course everybody knows, with high school football you have offense defense, special teams and coaching. So give me any three and we'll win seven games, maybe eight games, but you're not going to win a championship. That is, we got to get our vision straight. Why are we in business? Exactly what is it we're trying to do? I would tell you, with every company, that is the linchpin, that is the understanding that they need, Because if they really get that right, everybody that works for them will totally get it too, and then everybody's in line. Hey, here's what we do as a group of people. This is the one thing we do, and for us, for KW, it was a very interesting thing, and that was we went to the agents and said you know what we think you guys are the brand. We don't think it's the company. We think you're the brand.

Speaker 1: 17:30

Now, the reality is we knew that from years and years of selling real estate. If you're playing golf with four of your friends and you're getting transferred to Seattle, you turn to those friends and you go hey, who's got a good real estate agent? Anybody, you guys have used that you like. It's like when you have your first child and you're wondering where do I find a pediatrician? Most people turn to their friends hey, who's your pediatrician, Do you like him?

Speaker 1: 17:59

And so we went back to the agents and said look, we think the total emphasis for the company needs to be on you guys, not on the company. So, for example, we're not going to spend any more money advertising. We're not doing it because we're advertising the company. How about, instead of doing that, we increase your commission split and if you want to go advertise, you can do it. You've got the money. But hey, when you advertise, I want you to advertise Austin Hare, not Keller Williams, because we think that's where the emphasis needs to be. And you've got to realize, Austin, 40 years ago, brokers didn't think like that. Let's not lie.

Speaker 1: 18:41

Your average broker thought oh, my name's out there, I'm on the sign. Blah, blah, blah, blah, blah. And we said, nah, we don't think that's how it works. A good friend of mine he was an ER doc I'll never forget what he said, and this is great. He said, joe. He said hospitals don't have patients, doctors do. Doctors can't function without a well-designed surgery center. And so Gary and I looked at each other and said you know what we need to become the hospital and our agents? They're the doctors and their customers and clients, that's their patients. And so once we got that through our head, okay, from now on, everything we do is going to be geared to building y'all's business, y'all being the agents. And let me tell you something this is such a critical path to understand. If you go back and I talked to all the old IBM guys who I've known for years there was a time there for 15 years, austin where IBM totally forgot who they were. They didn't know what their mission was. And it hurt them.

Speaker 1: 19:55

It really hurt them. And lots of companies get into this scenario where they lose track of why they're there, what they're doing. And it's like I was reading a story the other day about Rollin King Great story. People don't know this. He was the co-founder of Southwest Airlines. Okay, most people don't know there were two guys involved with Southwest Airlines, rollin King and Herb Keller. Of course, they both passed away, but if you go back and you study his story, southwest Airlines was very successful because in those early days they knew exactly what they were doing. Their vision was to fly an inexpensive airline, great service and a great flying experience and I would say to this day they've managed to keep that.

Speaker 1: 20:48

It's one of the only airlines you get on where the air guys are telling jokes, singing songs. I walked in southwest airlines the other day and I laughed. The the air flight attendant comes on and says for those of you that would like first class seats, look for the blue ones. Of course they're all blue. It puts everybody in a great frame of mind. Everybody on the airplane laughed, they all got the joke and the table one to your table leg one has to be what's our vision? What exactly is it we do, and we do really well, and don't worry about the rest of it. The rest of it is just interference. Don't get there. The beauty of knowing why you're in business is when somebody comes to you and says hey, I got a new idea, we're gonna sell you this product. Blah, blah, blah. The first question I always ask myself is okay, if I buy your product, does it help my agents build their brand? Because if it doesn't, I'm not interested.

Speaker 2: 21:53

So that's table one for you guys is creating a platform for your agents to build their brand. How do you guys phrase it?

Speaker 1: 22:01

Yeah, yeah, yeah. For us, that was it. In other words, the reason the company exists is to help our agents build their careers and build their brands. That's it. That's what we do. And if they go build their brand, they happen to build our brand too, but that's secondary to us, because, again, what I'm going to do is the second table leg. For us was to come up with better economics for those agents and for the company, which is to say that we had to figure out, from a financial standpoint, how to develop a better system with the agents. Okay, or they could make money and we could make money and do it in a low-risk fashion, for example. Let me just give you one example For most brokers.

Speaker 1: 22:48

What they do is they have a commission split that's more in line with the 50-50, 60-40, 70-30. As you do more volume, I'll give you more money, and we go straight up and say that we're going to start you on a 70-30. And once you've sold eight houses, you keep the remainder of the money. That's called capping commissions. They'd never heard of that before Keller Williams. Now it's like an industry standard, but nobody had ever done that. And the trade-off is I can cap your commissions, provided I'm running bigger offices. Instead of an office where you might have 40 real estate agents, I'm going to run an office where we have 120 real estate agents. But if I've got 120 of them there, then Austin and you're one of my successful agents I can stop collecting commission dollars from you after you've sold the eighth house. Does that make sense?

Speaker 2: 23:50

Yeah, so after eight. So it doesn't matter the size of the house. After they sold eight, they collected 100%.

Speaker 1: 23:56

And let me explain it's not based on the number of houses, it's actually based on the total volume. Okay, once you've done X in volume, you keep the remainder of the money for the remainder of your accounting year. Okay, in other words, every year you reset.

Speaker 2: 24:12

Yeah, so they have a really high motivation to hit that as soon as possible.

Speaker 1: 24:16

Oh, absolutely. They're like oh my gosh, I want a cap, because then I keep all the money. So yeah, they've got huge motivation to get there, plus the other Because then I keep all the money.

Speaker 1: 24:25

So, yeah, they've got huge motivation to get there, yeah, plus, the other thing is and this is interesting it gives them motivation to go find more agents for the office, because they know we got to run more agents. Now, by the way, we have other programs that we use with them for that to keep them motivated to go get agents. And, frankly, I'll tell you what it is, and this is almost hilarious. But when I was in college okay, when I got out of college it was very common to get a call from one of your friends who says, hey, I've got a great opportunity for you and we're gonna present it at a event Thursday evening. And you go there and guess what it was? It was to come to work for Amway. Now, here's the deal. Understand, and this is one thing I've always said Highly talented people that you run into in life will always have two traits.

Speaker 1: 25:21

Trait number one they'll push you. They'll push you. Talent pushes you. Okay, they're going to call to get an appointment and they're going to stay on top of it. Talented people push you. Second thing is talented people stay into curiosity. They're curious, they want to know how things work. They want to know how you did it. They want to know what you're doing now. They're curious.

Speaker 1: 25:45

I remember going to the Amway meeting. The guy makes his pitch and I stayed there after the meeting. I didn't necessarily want to go sell soap Back in those days. The main product Amway had was this incredible soap that they had and it actually works pretty good. When they drew the circles on the board, I wanted to know about those circles because I thought those circles were brilliant.

Speaker 1: 26:06

If you have a product that people talk to other people about and lots of products go by word of mouth, right, and you can help them increase their sales group by referring people, well, austin, when you think about it, that's the real estate business in a nutshell. It works exactly like that. Gary and I and Gary primarily he really studied it and he came back to me and he said you know what we could use? A multi-level profit share the agents. Because the problem with the real estate business is you get paid by commission, so you're only as good as your last deal and if it doesn't close, if you don't, as I say, I have the greatest admiration for people in commission sales because if you don't kill things, you don't eat. Yeah, you got big time motivation.

Speaker 1: 26:59

So we went to the agents and said, hey, we got this idea that if you recruit an agent out there and they come to work for us, we can take some of the money that the company collects. In other words, off the company's 30%, the agent still makes their 70% of the commission. We'll take it off the company and we'll give you some of that money. And that made obvious sense. But then we show them how the multi-level works. Oh, by the way, if that agent brings in an agent and they bring in an agent and you know enough about it, austin, to know how it works the key with multi-level is you got to have three things. Number one you got to have a product that people want to buy. The dog eat the dog food, right With houses, that's logical. Second thing is you got to figure out how many levels down you're going to allow the downline to go.

Speaker 2: 27:49

Yeah, because at some point you run out of money if you don't.

Speaker 1: 27:51

And the idea is to, if you're going to go seven levels, then all seven levels eat up all the money and then the other thing you have to determine is what you pay at what level. Okay, and so when we put ours together, we to study everybody and it really was an education process going out there and studying people who had done it before, and well, I know the biggest issue with multi-level is most of the products that get attached to multi-level are terrible. They're not good products and people are using multilevel to get it out there and, hey, we're going to become rich, and Gary and I were not. That was not our motivation. Our motivation for using it was to help to build the company and provide a growth vehicle to do that. Because, again, if you look at the actual results inside Keller Williams, only 46% of our people collect profit share checks from a downline. That tells you right. There we have tons of people who have come to work for us. They're not concerned about the downline at all, but that's not why they came with us and, by the way, it shouldn't be why they came with us.

Speaker 1: 29:03

To me, profit share is just a lanyard. That's Louisiana for the sugar all the time and that's all it is. No one's going to get stinking rich off a downline. Now I say that we do have some people from the early days who are making pretty darn good money from their dads and we get some incredible stories. We have one of our agents good guy, great guy. He had a downline income and I don't know how much it was, but let's just peg it at maybe a couple of thousand dollars a month. Pretty good little downline. And when he died he had no heirs. He heared it to his next door neighbor who was a single mom with three kids. So now she's able to collect his profit share and he's dead and gone. Wow.

Speaker 2: 29:54

So because they Only transfers if they die, you're not going to transfer it if they quit, right, yeah.

Speaker 1: 29:59

What we've done is we've modified our system. Now, if you leave me and go to work for another real estate office, your downline stops Now. By the way, we didn't do that for 40 years and the crazy thing. So we had people who left us, who formed other companies and we're still paying them monthly and finally our agents. In fact, it was two years ago. Agents came to us and said you know what? We don't think that's a very smart idea. We think we'd like to keep that money in the profit, and they were correct. So we made the decision.

Speaker 1: 30:32

But the point is, table leg number one for us was the clarity of why we're in business. Table leg number two was figuring out much better economics for the company, for the agents, how we paid them. Table leg number three, which is this is a critical table leg for everybody, and that is go get the best people, go get the best leadership, because if you can figure out how to do that, your company is going to be much better off than your competitors. And the truth is and this is a really good story we hired a guy. He passed away during the pandemic. God bless you, man, great guy. We had, I think at the time 60 offices in just Texas, oklahoma, louisiana, colorado. That's where we were and these are franchise offices, and so he came in and he interviewed them all and he studied our system, and he came back and he said okay, here's the deal.

Speaker 1: 31:34

I love the ideas you guys have hatched, okay, about how to interact with other agents and your agents, but you guys don't know anything about franchising.

Speaker 1: 31:48

Okay, and franchising is all about models and systems, and so what I'm going to do is spend the next year teaching you guys how to master the models and the systems that you need inside a franchise, and one of the first systems that we're going to use is the 10-step process to go find talented people. Now, he was talking about our leadership group, not just finding agents or constantly recruiting agents. He was talking about how good your operating partner needs to be, the woman or the man that you're going to go sell the Tulsa office to. How good do they need to be? They need to be damn good. So here's a 10-step process as to what you have to do when you go try to hire people. And Austin, let me tell you, it's excruciating learning that process. But because he taught us that process, when the crash came at 07, 08, 09, across the country, we were the only real estate company that grew by 4%. Everybody else went backward by 15, 18, 20%. I would tell you it's because we had better people.

Speaker 2: 33:17

That was. It Is a big part of that. Like, when you say leadership, is it the actual training, like in-house leadership programs that you guys have, or how would you? Yeah, the training's important no doubt about it.

Speaker 1: 33:30

But here's the deal, and you know this inside your own organization. It's amazing, when you're able to hire the best and the brightest, how they attack problems or anything that pops up, whether you trained them or not you with me. So, as important as training is, don't get me wrong If you start with a really high quality candidate, quite often they figure it out. They just do. They're smart. His whole deal is if you're going to hire an operating partner and let them open an office in Raleigh, north Carolina, you want the best candidate, and so the process was here's the 10 steps that you have to take them through to get past your we're going to hire them stage and actually, by the way, by step seven, if you're going to hire them. Step seven, eight, nine and 10 are just to build a relationship about how you work together. Okay, let me give you one. Let me just throw out one example. So step three for him was verifying your references. Okay, so let's say you're going to come to work for me. You're going to fill out an application me. You're going to fill out a, an application that I'm going to give you and, by the way, it was a very thorough application and you and I both know that, the references, the five references you put on that thing.

Speaker 1: 34:58

When I call him and say, tell me about austin here, what are they going to say? Oh, he's awesome, he's great, he's great, he's incredible. They're all going to say that. Right, you know that, I know that. But when I call him, I'm going to say listen, I got a question, hank. Is there anybody else who happens to know Austin? Oh yeah, joe Williams, you can call Joe, he's still in town. We all work together back in Nortown. Okay, so now he calls me, he says hey, joe, listen, I'm calling about Austin hair. And I go how'd you get my number? Oh, I got your number from Charlie. Oh yeah, how's Charlie doing? Yeah, great, yeah, what do you want to know about Austin? So now I'm going to ask all the same questions that I asked the other guy, but now I'm one step removed from being on your list. And now what's going to happen is he's going to finish up with me the same way. Hey, joe, is there anybody else who knows Austin? Oh, yeah, that'd be Charlotte. She's over at Spectrum. Now they call Charlotte over at Spectrum. Now, I'm two people removed from you. Charlotte doesn't have a dog in this hunt, so she's going to give a very honest opinion about you. And it's amazing, austin, what we hear when we go second and third level down.

Speaker 1: 36:15

I've literally had a guy one time I call. I said yeah, I'm calling about Austin Hare. His response was is he out yet? And I'm like out. Oh yeah, he embezzled $10 million when he was over at Nortel. They had to lock him up. Now, by the way, I've had it go the other way as well, where they're listening to the questions and he goes tell me what are you trying to hire him for? He has requested to become one of our operating partners. What are?

Speaker 1: 36:42

your operating partners do, and then I tell him and he goes.

Speaker 1: 36:45

He'd be perfect for that. Why do you say that? Here's why, when he worked at Nortel, he was like our manager Everybody went to him, even though he wasn't the manager. But the guy knew his stuff. And so that's one of 10 steps, austin, you with me. By the time, we thoroughly get through this process. On the back side of the process, I'm now learning things about how you like to interact with people. One of those things is what we call a future self-exercise, and that's where you get the candidate in the room and you go, austin.

Speaker 1: 37:22

If we were sitting in a restaurant a year from now and you said to me hey, joe, coming to work for Keller Williams was one of the greatest things I could have ever done, I'd like to know from you today what you think needs to occur for you to feel that way, and now now I get it from your perspective what you're hoping this job can do for you both business-wise, personal, family. When people say to me I want to make a lot of money, it doesn't tell me anything. You need to start asking how do you define that, austin? What's a lot of money? And it's not the money, austin, it's what you're going to do with it. So the more important thing is finding out what motivates you to make that kind of money, because the more I can understand about you and what's motivating you, the more I can build a job for you that's really going to be cool for you to be at, and so, look, it's a future self-exercise could be used on a couple.

Speaker 1: 38:25

I use this example a lot with Family Office Club I'm speaking to. I go, imagine getting your wife and on January the 3rd you're sitting at your favorite restaurant and you look at your wife and you go honey, if we were sitting in this restaurant a year from now and you turned to me and said, joe, this has been the most incredible year of our lives, I want to know, from your perspective, what would I need to do this year for you to feel that way? Now you think she's going to come up with a list, I guarantee. And the funny thing about it and husbands, we laugh all the time. Most of the time it's very simple things and you put the toilet lid down yeah, that's a big one in our house.

Speaker 1: 39:13

Can you pick up your dirty underwear, can you shut the door? And the bottom line is I take this vest off. It's warmer here in Austin today than it normally is. The bottom line simply is that it's a way for me, with my spouse, to interconnect such that we have a great year. It's the same thing with an employer and an employee and table leg number one vision that everybody gets.

Speaker 1: 39:42

Table leg number two is different for different companies. For us it was better economics, how to run the company better. By the way, for Southwest Airlines, their table leg number two looked exactly the same hey, we're not going to charge for bags. We're not going to charge when you change your ticket. We're going to fly the same plane everywhere. I was in Newark six months ago flying American Airlines. They had a part that broke down on the plane. Guess what? Nobody at the facility in Newburgh had the part. They had to fly it up from DFW why? Because American Airlines flies 30 different planes. Southwest flies the same plane. That's why. Because they can keep parts everywhere and so economically they fly point to point. They don't do a lot of hub and spoke and they have better economics. That's table leg number two for them. Table leg number three is the same for them that it is for me. Go get the best people. Everybody that works for Southwest Airlines is happy. They're there and you can tell and they're good.

Speaker 1: 40:51

The fourth table leg for us is one that most companies, if they're smart, they would use this as a fourth table leg, and that is how do you create an environment? And that is how do you create an environment? You call it culture. Nobody wants to leave. Imagine creating a company that has such a cool culture to it that nobody ever goes anywhere. They could still stay inside the company and work their way up and hit their goals. Now, by the way, some companies are set up. That could never happen. If I'm running a Chick-fil-A in Des Moines, iowa, I'm constantly going to recycle through high school kids running my front counter right. They're not likely to stay there for more than a year, two years, but while I've got them, can I create a culture in my organization, in my restaurant right there? That's just really cool and the answer is yeah, you can do it, but you work on it. It doesn't just happen by osmosis, it's a combination of a lot of things, but our whole idea and frankly, austin, that was the idea for the profit share okay.

Speaker 1: 42:00

It wasn't necessarily that we were trying to make them more money. It was that we wanted them to think like owners. Okay, and we have an Asian Leadership Council that meets every month. If you don't have a culture inside your company and someone says, hey, we're having all kinds of problems with the copy machines, it's just not working. If people don't take ownership of your organization, they start saying things like let's go get a new one, let's just replace it. But if people think like owners, they're like can we fix it Before we go spend $10,000 buying a new Ricoh, can we fix it? And so the whole concept was how do we create a culture where people are really happy to come to work every day? And I can tell you, whatever company you have, if you could create that kind of a culture.

Speaker 1: 42:52

Look, it's just Texas, the University of Texas. I'm a Texas grad. They just played for the national championship. Now, they didn't get to the national championship game. They got beat by Washington, a great little quarterback. He just he had the game of his life. I was in New Orleans when they played.

Speaker 1: 43:10

But it's very evident to all of us as Longhorn fans, that Coach Sarkeesian has come in here and he's created a culture now, where all of these football guys think like family. It's a completely different culture from four years ago and it shows on the field. It shows on the field and he just got through in the portal recruiting some incredible kids that were leaving other football factories and coming to work, and the reason they're coming a lot of it is the culture that he's created, and certainly with football teams. That's important. Everybody understands that and gets that. It's important in a family, it's important in an organization, and so the concept of the stable table is this If you can identify what are the four things that really impact whatever it is you're doing and get those four things rolling in synergy at the same time, you're going to stand a much, much better chance of being very successful. And it allows you to focus on those things, get the right people in place in each of those areas and you're going to do better.

Speaker 1: 44:26

Because it's so easy today to get pulled 15,000 different directions. It's just email. We laugh about email because it has become such a double-edged sword. Okay, we were talking about earlier. Yeah, give me a hundred emails and really there's only 10 of them that you need to be reading, yeah, and reacting to, because we all get so much information now and I don't want to get philosophical here, austin, but it's okay to you. No, let me just say this If this life is what you have, okay, all of us, I think, hope that when we die, we're going to go to some place. That's really incredible.

Speaker 1: 45:14

I was raised that way. I'm in church every Sunday with my little Catholic wife. We love our church group. They're great. Catholic wife, we love our church group. They're great.

Speaker 1: 45:21

But the reality is none of us really know. Okay, If this is what we have, then you really need to take advantage of it and think about what those centenarians, or however they're pronounced I'll figure it out later. Yeah, I think that's right. I look at the message that they sent. I really take that message to heart. Yeah, I'm plugged into the internet, but nowhere near is what people think. I've got grandkids now. They're a blast. I spoke when I go speak to real estate agents as you can imagine, that's as often as I want and I'll look at them and I'll say, hey, what's the goal of all real estate people? What's the number one goal? And they'll shout out a bunch of things, right. And then I look at them and I go, hey what my number one goal is. And they're like, yeah, why don't I go leave your time? I want to go play with grandkids I got three little grandsons.

Speaker 1: 46:17

They're hitting that age where they love hanging with big techs I'm called big techs and and with grandchildren. You only have a certain timeframe. You, with me, You're going to be able to do that because at some point they're going to discover girls and cars. Nobody discovered cars before. That was my generation, but you understand what I'm saying and so I think you got to look at every year and say, okay, if we're going to travel, by God we better start traveling. Okay, Because, again, I had a good friend. We were in a deal in Asheville In fact I'm still involved in the deal building some townhomes and single family homes in Asheville, North Carolina, beautiful town. If you've never been there, you need to go there.

Speaker 2: 46:56

Yeah, I have been. Yeah, it is beautiful.

Speaker 1: 46:58

Just gorgeous, and this guy is good friend. He was seven at the time. I think I was. Let me see, I'm 70 now. So this is yeah, I was 67. We're the same age. And he was out playing golf on Kiowa Island and the next thing they were driving back to the house. He fell off the golf cart. He was unconscious before he hit the ground. Aneurysm Wow, had an aneurysm. Wow at an aneurysm, my great guy. A week later they harvested his body. That was very good. You just he's on the list. I do the same thing, my. They can take whatever they need from me, yeah, and my point is he's there one day and next day he's not. And hit my stage. You start thinking about those things. Every year you got more and more friends that are going to the great tomorrow, wherever that is, whatever it is. What else can I tell you?

Speaker 2: 47:46

Back to your fourth table leg, real quick, talking about culture. What was your culture? And then, on top of that, how did you guys go about implementing that For?

Speaker 1: 47:55

us. Just the fact we had the profit sharing place. That was huge because nobody else did that. You got to understand 40 years ago, brokers just didn't do that and, as funny as it sounds, it was a tremendous thing for us. Because here's a perfect example.

Speaker 1: 48:12

I remember when we moved up in the Northwest area of the country Oregon, seattle, all that area which we hadn't been up there and there were a number of very fine real estate companies up there been in business for many years and what's funny is we would move into town and we basically do it by recruiting one of their top agents. Okay, in other words, we weren't exactly organically growing, we were going in and talking with their top people and going hey, I know, here's how you do business, here's how we do business, what do you think about this? Most of them would go. That's an interesting way to do things. And then they talk with our guys and of course, who's out there making the contact? It was our guys because we had the private chair program. They're picking up the phone and calling them, they're seeing them at events.

Speaker 1: 48:59

But here's the interesting thing about the Profiteer program. Let's say I'm running that big competitor up there in Seattle and the interesting thing that we found is that they would rarely come to our event to find out how we did it. They would send one of their lieutenants, they would show up, okay, and we know who they are, we know they're in the audience. We would talk about our program and then we draw the circles, and then they would go back to their big boss and go hey, here's why they're growing so fast. Look what they do. And of course, their big boss would go oh, that's a multi-level deal. Oh, don't worry about that. They never go anywhere. And so what they would do is they basically would just dismiss us. It's interesting.

Speaker 2: 49:46

Would their lieutenants ever come to you? Was a part of your message like catered towards those guys that you knew were going to be in the audience as an recruitment?

Speaker 1: 49:53

If we got a lieutenant who was willing to listen you with me. I guess the thing I want to say again, those two things I said early on Talent pushes you and talent stays under curiosity. And it's interesting because let me tell you something, I'm all over the United States. I can tell you Austin, there are definitely areas of the country that tend to think in lockstep. Now, when you're out there in California, there's more harebrained ideas than they often would joke. It's the land of fruits and nuts, whatever. But they adopt things so quickly and then they let them go and then they're on to the next thing. It's just like when I went to Raleigh, I opened our office in Raleigh, north Carolina. So I was there.

Speaker 1: 50:39

I spent a lot of time in North Carolina for about three or four years, loved the state, know it top to bottom, and there what was funny is they're like from the old South, which I never thought of it as the South, but that's how they think there. And we would present the KW idea and they would go. We've always done it this way. What does that have to do with us bringing you into our idea? And they were so stuck in? We've always done it this way and we found that throughout that area and they're just not into curiosity, and so that allowed us to infiltrate and get a lot of their agents before they woke up to the fact that, oh my gosh, maybe what this guy's doing actually works. Well, yeah, and so I'm saying you get a lot of the look.

Speaker 1: 51:25

It's just like the Northeast had a good friend of mine, joe Hudgens. He went to work for a commercial broker up in the Northeast and we're going back 40 years, right. So I called him up after about a year. I said hey, how are you doing? He said it's fairly tough. He said Joe up here, when you call the CEO, you almost cannot get in to see him unless somebody you with me you need a contact to get to him. In Texas, where Joe had lived for years, he said I can get a meeting with the CEO. I may only get five minutes with him, but I can get to him even though I don't know him. You with me. And part of that is just the entrepreneurial nature of Texans. The curiosity yeah, show me what you're doing. Can I copy this Like the Chinese, right? Yeah, show us what you're doing. We can totally copy your business. But that's just a thing I grew up in Texas. I'm a native Texan. They're very entrepreneurial around here and they're open to new ideas. Hey, if you got a better way of doing it, we'll look at it for sure. And so as we traveled around the country, you could just see some of these regional norms come into place, and for us, one of the last areas we semi-conquered was up in the Northeast.

Speaker 1: 52:38

Now I say that we've got pockets where we did extremely well. One of our guys opened an office up there in Maine Portland Maine, I believe and oh my gosh, he just hit a worldwide company. When we go to these countries, every country has their own story and it just varies. On South Africa, we managed to find some guys that used to run the C21 franchise down there. Good guys, they know what they're doing, sharp as a tack and on a very short period of time we had something like 30 offices down there in South Africa. Every circumstance can be very different, but the mindset helps a lot and I think when you ask the culture question, our agents could totally understand that we were geared to make them successful. So that's the mantra of the company and there are a lot of companies out there that they really strive to do a good job, understand why they're in business, gear all of their procedures and policies to keep that very clean.

Speaker 1: 53:57

That's like I said about the IBM thing. They lost their vision for about 15 years. I think they have it back Now. I don't know that for a fact, but it's just like Michael Dell. We're here in Austin, so it's the home of Dell computers, which I'm talking on a Dell computer right now. His whole mantra was I can build a computer incredibly inexpensively that does everything you need to do and I don't need to go build stores to sell it. I'm gonna sell it over the internet. When he did this Austin no one had ever heard of that. There was no place you could physically go to look at a Dell computer. You go website and today, of course, everybody does that. But he's the guy that started that and it allowed him to market his computers for half the price of what you had to buy the other computers for, and that idea launched the company.

Speaker 2: 54:51

That's good. Yeah, I'm curious to know. You've got these four legs and you're thinking, evolved over time as you got into them, over time as you got into them, but what was like either most unexpected thing or the biggest challenge that you faced during this time? And then how did you overcome that? What was the thing that, if you could, either you could go back, you could do it differently, or B even just like it stood out to you as oh wow, I had no. This was like so different from what I was anticipating. And then, as a result, you probably learn something incredible from that.

Speaker 1: 55:21

I would. The thing I would tell you is, when you grow as fast as we did, that in and of itself is difficult to keep up with the rocket ships flying and there are pieces that are just coming off the rocket so fast. I would like to say there was something in there that we derived a great idea or something from. Fortunately for us, we haven't hit a major stumbling block. I will tell you that as you mature okay, that a lot of your competitors now copy what you do, all right, and there's only so much reinvention that you can do in this business anyway. So the landscape we have now is more difficult for us to maneuver in, because everybody has looked at us and said we need to adopt that idea, and good for them. The ideas were great. We're not massively the only game in town you with me but it's just something that we have to deal with because there's no major way to reinvent ourselves every seven years and in a way, we've become the training operation where a lot of people will tell you straight up.

Speaker 1: 56:34

In fact, I have a good friend of mine who works for a competitor and what he tells the agents is if you want to get started in real estate. You need to go to work for Keller Williams Training far and away is the best in the business and then stay there for two years and then come to work. For me, listen, when I got out of college, prudential Insurance was a major hire. They were hiring college guys all day long. They would pay you $2,000 a month for six months to learn the insurance business. It was very common that somebody from New York Life would tell you you need to go to work for Mother Prue and stay there a year and then we'll come back and look at you to bring you into New York Life or Northwestern Mutual or whatever.

Speaker 1: 57:22

And KW has fallen into that a little bit, where I get this a lot. Yeah, oh man, yeah, we sent everybody down to Keller Williams so you guys could join them. So our job now is to be able to retain them, and that's where we're focused is be able to give them an opportunity, and so part of that was teaching agents how to run team okay, where they themselves are now their own. It's like they're a sub-broker underneath the KW umbrella. Does that make sense? And we started doing that, geez, 20 years ago easily 20 years ago and it's paid off 20 years ago and it's paid off. We have a lot of highly successful teams and hopefully they get to a point where they're so intertwined with the company that they don't decide to go off and form their own company.

Speaker 2: 58:12

That's gotten a lot more difficult. Back to your example, real quick, about flying the rocket ship as it's coming apart. So what did you tactically do? Obviously, anytime you're growing an organization really fast, that's going to come with challenges. Heck, keeping the doors open comes with its own challenges, right. But in that particular example you gave what did you? If I had to guess and you can correct me, but I would think it would be you need to hire somebody that's well competent or you need to delegate specific things from a very competent person to those tasks. What was it in your case? That? Because, if the things are coming off, you clearly kept the ship going. How did you keep the ship going before it totally disintegrated?

Speaker 1: 58:49

I guess that's my question. One thing you got to remember with us is we're a franchise, so running a franchise is totally different from running a big company like IBM, because our franchise owners, they independently own those offices. So the key for us is working specifically with the owners and we're set up. Look, we look just like McDonald's. We have 37 regions.

Speaker 2: 59:13

Okay.

Speaker 1: 59:14

Look at the map of the United States. Well, canada is its own region, but basically you've got your regional managers. They then go find the operating partners. Okay, so let's take Texas. You have North Texas region and the South Texas region. So we have two regional managers for Texas. In California, I think we have five regional managers in California. In Florida we have two. So again, what you're doing is you're working primarily with your regional guy, saying, guys, here's how the systems models work, if you thoroughly understand it and get it, and you're going to convey that to your operating partner.

Speaker 1: 59:56

Let's take North Florida North Florida, georgia outputs are. There's a regional gal there. She's probably got 30 offices below her that she has personally coordinated who those operating partners are. So she's now working with and, by the way, she's running a staff of four or five people just in the regional office alone. So they then convey to the operating part. Again it gets back to does everybody understand how the models and the systems work? And that's what I'm saying. When pieces are flying off, it's because somebody's not paying attention to one of those models or systems, and so it's a constant education process to go okay, guys, here's how this works. And the biggest problem. One problem we go through all the time and, by the way, I think all sales organizations do is the turnover Our team leaders, which are the managers of those offices. We get a lot of turnover in the team leader area. It's a constant battle trying to make sure we've got the best people in place.

Speaker 2: 1:01:05

So it's a tough job, yeah, okay. So my takeaway is you do have you develop systems and procedures early on, and then it's when it starts to grow so fast that people don't pay attention to those, and then it's like the reigning end of hey, we have these systems and procedures for a reason. Here they are. Make sure that you're doing them, reining in. Hey, we have these systems and procedures for a reason.

Speaker 1: 1:01:23

Here they are.

Speaker 2: 1:01:23

Make sure that you're doing them yeah In other words.

Speaker 1: 1:01:25

It's a constant battle. Make sure everybody's doing what they're supposed to be doing. You know what I mean.

Speaker 2: 1:01:30

Yeah, no, that makes sense. Okay, Lynn. Yeah, let's pivot a little bit with the time we have left. I know we're getting close to the end here, but we were talking off camera about lessons learned from centenarians, right? And so I think one of the things you mentioned a moment ago was the goal of real estate is leisure. So there's a lot more than just working. It's like why are we working? And so, yeah, I'd love to just hear what you have to say about the lessons. It's like ties it all into, like why are we doing it and what are? What do people say when they get to the end of their life that we can have a takeaway from?

Speaker 1: 1:02:00

Yeah, again, it's just big picture you with me, and it changes with age, austin, you with me. In other words, you don't think about your mortality much when you're in your 30s and 40s because you're building your business, you're building your family, you're pulled. To me, that's some of the most difficult years is your 30s, your 40s, early 50s. For most of us, it's not until we hit our 50s and 60s that we build our wealth.

Speaker 1: 1:02:28

Hopefully you're in an industry where now you really get it and you're able to really plug in and build the wealth that you hope you can build. If that's what you want to do, you with me. For a lot of people, money is not the big motivating factor, it's other things. What you're trying to do is just, every year, get a handle on. Okay, what can I really control this year as I work my way to the ultimate goals? And, by the way, what are those ultimate goals?

Speaker 1: 1:02:56

It's the old thing I used to draw, the old bell curve of life. I would go up to the front of the room and I would draw a bell curve and I would tell them look, here is the world's population. Okay, on the left side of this bell curve, there's a half percent of the population and these people are pretty darn interesting people. If you're lucky, you might meet eight or nine of them in your lifetime. Okay people, if you're lucky, you might meet eight or nine of them in your lifetime. Now, at the other end of that bell curve, there's another half percent, at the very far right end.

Speaker 1: 1:03:29

Let me tell you something. These guys are terrible. They're horrible. They're Hezbollah. They ain't no moral. They're going to kill you, rape your daughter, steal your wife. This is just how they operate. Now go back to the left side of the bell curve. Next to this half percent of incredible people, there's another 19 and a half percent and they're some of the greatest people in the world. They're just not incredibly fantastic, but they're positive. They get up every day in the glasses half full and they're the people that you want your children to know and hang with. And then you go back to the right side of that bell curve and you got 19.5% and they're just not happy.

Speaker 2: 1:04:15

They're just not happy.

Speaker 1: 1:04:17

The glass is half empty every day. Who's trying to get me? I used to laugh with the real estate guys. These are the guys that run the age. These are the guys that work at the development department in the city of Austin. They're just not happy. And so then in the middle of that bell curve, 60% of the population and they're just there and they can shade left, they can shade right. Well, that's the way the world's population works. We had a guy one time. He came in he said the guys on the left, that's the oh yeah, and the guys on the right, that's the oh no, and the guys in the middle, that's the okay.

Speaker 1: 1:05:01

And the way I look at, life's too short to be hanging with anybody. But those people on the left side you really want to look at who you relate with, who you hang with. Life is so much more interesting when you can hang with interesting people. As you get older, like me, you get to a point where you start to understand that the relationships that you have are far more interesting than a lot of the wealth you're building. And all of that because you're not going to take it with you. Like they say, you don't see a hearse driving up a big truck driving up beside the hearse. I mean, it's money is great, but what are you going to do with it? Key. But even if you don't have a lot of money, building relationships with really fun and interesting people is just as cool. While you're here, you really want to look at each day of your life and say how do I live these days better? How do I make the environment for other people, like they say, I wish I'd left something behind.

Speaker 1: 1:06:04

For most of us, it's just the memories. It's not going to be a building, it's not going to be a statue, it's just the memories. But people. That's a way of creating a legacy here on planet Earth and for most people, that is their legacy.

Speaker 1: 1:06:20

I remember my mom when she was dying of cancer, looking at me and saying the most important thing I'm leaving behind is you kids. For her that was it and I understood how much that meant to her. So for many people, that's going to be what they're leaving behind and their legacy. So make the most of it. It's a great world. The best thing you can do for your kids when they get older is to send them overseas for a trip, because they come back totally understanding how incredible the United States of America is, but they really can't appreciate that until they go make that first trip somewhere. Once they've done that, it's the best thing you can do for them Obviously, send them to a safe place, but you want them to be able to get the exposure that they can get, and I just think that makes all the difference.

Speaker 2: 1:07:12

Yeah, I know we're almost done so rapid fire. One last question Hard landing or soft landing on the economy? Where do you see the end? If so, and either way, what do you see happening to the real estate market?

Speaker 1: 1:07:22

I would say it's a soft landing If you ever read the book one of the best books. You can't read it because it's too slow. But Nathan Taleb, when he wrote the Black Swan, the one thing I got out of that book Austin was he said people are terrible at short term. He said almost everybody gets it wrong. He said the amazing thing for the economists. He said they get it wrong all the time and nobody ever seems to go back to them and say you're an idiot. Nobody ever does that. The only thing you can really do is long term prognostication. I think long term we're all going to be just fine, but the reality is they've been calling for a recession now for 20 months and guess what? They don't have it. And they don't have it because they constantly underestimate the power of the American consumer. They do this all. They constantly do it, and we are a consumer driven economy. So if the American consumer is okay and they're spending money, the economy's probably going to be okay too, and that's exactly what's happened now.

Speaker 1: 1:08:20

Part of that was they had all economy. So if the American consumer is okay and they're spending money, the economy is probably going to be okay too, and that's exactly what's happened now. Part of that was they had all that money to spend and they're now down to the back end of it. But I think rates are not going to modulate a lot, really, don't? I don't think you're going to go back to the rates of 3% or not.

Speaker 1: 1:08:39

That was cheap money as long as they did quantitative easing. I mean, when you throw millions of dollars into the economy, you're going to hold those rates artificially low, and that's what they did. It's not rocket science. And then, when they stopped that, and then the pandemic gave us an automatic no supply chain and all this money, yeah, inflation's going to rear its ugly head, and it did. And, by the way the government measures inflation is a sham. Yeah, they adjust things to make it seem like oh yeah, we're back down to 2%. By the way, who came up with 2%? He's a great economist. He just laughs. He knows the story of how they drummed up two percent as their goal. It's got nothing to do with round, nothing to do what was it?

Speaker 1: 1:09:27

it was a deal that came out of argentina casey's. He gave me the whole story as to how they came up with this. He said it has no basis in reality. None whatsoever but, again.

Speaker 1: 1:09:40

like I said when I first started in, real estate rates were 7%. By the way, if you go back over 30 years, the average rate is like 7.28%. So people are just going to have to get used to the fact the rates are likely to be higher, and they're likely to. They may modulate. This year it's an election year. One party is trying to drive the rates down, the other party is trying to drive them up and politics is about as scoop all as it gets right now.

Speaker 2: 1:10:08

Yeah, okay, look, yeah, I know we're at the end of our time. Lastly, did you just want to? I know you guys are working on a land fund Did you want to share, like a link or anything where people can go read more about what you're working on there?

Speaker 1: 1:10:24

there. Yeah, we're doing a land fund Because I've got agents parked. They feed us some of the most incredible deals you have ever seen, and so what we're doing is structuring a land fund. Anybody that wants to go? The website for that is joewilliamsland, so just plug that in and you can go have a look. We're happy to talk to you anytime.

Speaker 2: 1:10:43

Awesome. Yeah, I know we're running a little bit over here, so, look, I really appreciate it. I loved hearing your story and thanks so much for coming on the show.

Speaker 1: 1:10:50

Austin, it was a pleasure being here. Have a great day. Have a great year, my man.

Speaker 3: 1:11:03

If you need help finding the perfect location for your practice or you're ready to invest in commercial real estate, email us podcast at leadersreecom R-E, as in real estatecom, or go to leadersreecom and fill out our form. See you next time.