Prashant is one of the co-founders of Doors Advisors. Doors Advisors is a real estate group and they’re one of the top teams in the Bay area. Danny is his business partner, and he is an active real estate agent. They are starting to dabble in the investment side as well. In this episode, Prashant and Danny tell us how they partnered up for Doors Advisors, and the mindset they have that allowed them to close deals even in a difficult market.
Prashant and Danny had different trajectories and met four years ago as they were growing their own teams and businesses. Fifteen months ago, Prashant shared his vision with Danny and offered him a partnership. That’s when they started Doors Advisors together.
Doors has a team culture of being high-energy and growth-oriented, and they challenge each other all the time. The team does lead generation together. Every Monday, Tuesday, and Wednesday, they script-practice as a team and make calls for 2 hours.
Making calls is what drives their business. On the retail side, they make great open houses to accumulate more and more business. It has a compounding effect as sellers who see their open houses later want to list their houses with them.
Their team is motivated to do all the cold calling because they understand the purpose of their calling. They know why they’re doing what they’re doing. They know that it’s beyond making money, and they know what’s important to them and where they see themselves in the future.
At Door Advisors, they hire based on behavior and believe they can teach the skill set. Potential members get to hang out with the team for 2 weeks then they decide whether they’re a fit or not.
They don’t like people who make outlandish claims but never back it up. Having high integrity, being hard-working, and wanting to be part of something big are traits they look for.
The standard lead time for getting traction from cold calling in the country is 60-90 days. In the Bay Area, it takes 90-180 days.
It takes some time to get the relationship and build some rapport, so it might take until the 6th or 7th call before an agent can set an appointment.
You need to go through the process by allowing yourself to receive the rejection when cold calling then gets used to it. Being consistent and practicing the craft is important.
Following up with people you’ve met with at open houses work better than calling people from lists.
Sixty percent of Door Advisors’ business in 2019 came from referrals. But they don’t become complacent and rely on old clients. So they continue to build their baseline of deals and referrals.
Calling, open houses, networking, and door knocking all come into play depending on the style of each agent.
When it comes to building lists, they use various sources such as Vulcan 7, Cole Realty Resource, and IDI Real Estate. None of the data is perfect, so some digging is needed.
Doors Advisors are now starting to get into the development business by looking for properties they can add value to as every square foot added can create an additional $2,000 in value.
They’ve been approaching builders and partnering with them to help find them the deals they’re looking for. For now, they’re targeting areas from San Mateo to San Jose.
For projects where their margins don’t work with investors and developers, they’ll partner with builders who do deals with real cash.
Since they don’t have much experience, they might bring in a general partner with development experience.
Doors Advisors underwrite all their deals and do all the due diligence. They’re also conservative on their after repair value (ARV) estimate. Investors know that they’ll make money on the investment
Everyone’s goals are aligned. They’re a unit-based team, so they look at the number of listings and the number of sales.
Last year, they did 63 units for $76M. They didn’t hit their goal, but since it was their first year, they’re still in their growth phase.
Be realistic with the sellers. Every seller thinks their house is worth more than it actually is. Most realtors tell the seller what the seller wants to hear.
But it’s better to tell them what the property value is and what they should do to get the best return on investment (ROI) on a sale because you don’t want to jeopardize the asset.
Some agents are not disciplined about learning and mastering the craft. Once they close a good deal, they sit comfortably for the rest of the year.
Both of them plan to find more great people to surround themselves with and grow with. They want to someday hand out the retail sale side of their job to other young, hungry people.
They want to keep growing their vision large enough, so everyone in our world can fulfill their vision. Part of that involves building a $100M development company.
The market in 2019 was going down, and there were 7 houses they took on in the last two quarters. But they were relentless in how they market a house, how they pursue offers, and how they negotiate.
Every house has a story to tell. They believe it’s their job to identify that and find out which subset of a buyer is perfect for a home.
When going after investors, they ask them what they’re looking for and help them get it.
Some houses don’t sell in two weeks. It’s important to follow up with interested parties on listings. Track everyone who comes through the open house and reach out to them each week. Push the buyers down the pipeline until one of them breaks.
The constant follow-ups also makes sure the agent is doing their job.
A challenging listing they took on was located on an intersection of five roads coming together. It had 5 agents who had already listed it for a year.
Since the property had a lot of foot traffic, they threw a giant ice cream party to get people to come by. Ironically, the beautiful house was bought by a neighbor who lived a couple of blocks away. They had already asked about the property before, so Danny just had to rope them back in and battled some of the objections they had on valuation. They managed to get a decent price and didn’t have to take a loss.
The market is white-hot. Interest rates are at an all-time low. Prashant’s client was able to get a 30-year fixed loan for 2.625%. Stocks have been going up, so people have more money for making the down payment.
Disclaimer: This podcast was recorded in the last week of February 2020. The market has recently taken a dip due to fears perpetuated by the COVID-19 virus spreading globally.
Watch a few deals go by, remove your emotion, and follow someone great. Be on the lookout for the deal that you know you can hit right out of the park and protect you from unforeseen events.
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