We were honored to have Brandon Turner on the Real Estate Investor Podcast to discuss building a team. For those that don’t know Brandon, he is the founder and managing member of Open Door Capital, bestselling author with over one million copies sold and the past host of BiggerPockets Podcast with over 100 million downloads. Open Door Capital currently has over 650 million assets under management.
Brandon shared how he built his company from the ground up and adds “This is interesting thing about real estate, right? Like, your ability to grow is really only limited by your ambition and your ability to raise capital. Like, everything else is fairly a dial that you can just dial up like make more offers, hire more employees. Everything is fairly dial up and down. I mean, it takes work and effort but raising capital, like, that’s kind of the governor on how big somebody can grow, that’s the thing that slows you down or seeds you up.”
Brandon emphasizes the importance of building a solid team for success. Brandon currently has approximately 97 employees in the company, most of them are on the management side but it didn’t happen overnight. In the beginning, he gave equity to a lot of people, but it’s definitely an expensive way to go. He gave away over half of his company’s equity to his team members, but doesn’t think he could have grown to where he is without that and doesn’t see that as a cost but an investment. His perspective on this method is “If I gave away 50% equity, can I do twice as much? I think, by giving away 50% of my equity, I’ve done 10 times as much than I probably would have done without because everyone’s very well-aligned and incentivized to grow. So that’s been a been a big piece of it.”
His second method of building his team was using interns. He’d bring people in to do unpaid internships where they were paid on performance. His theory is “there are people that will hustle and try and you know, 90% of them don’t work out but the one out of 10, like that’s my core and so like my COO came from our world of being an intern. My VP of investor relations was an intern. My director of marketing was an intern and so they all started that way. You get to see who talent is and move into a spot that they can prosper and thrive.”
There are certain attributes he looks for in team members when he is hiring and even on a lower level or an internship level. He posts the position on Instagram and gets hundreds to thousands of applicants and then asks “Hey, send us a one-page PDF that explains what you would do if a tenant didn’t pay their rent. I don’t even care what they write. They just got to do it. Like, literally 500 of the thousand will not complete test number one. So you know they say, 80% is just showing up, it’s so true. 80%, like we do another test with the other 500 that are left and half of them won’t fill up the second test. It’s like, all of a sudden, we’re at 75% of people, already falling away because they didn’t do two documents. Like, I don’t even look at the documents, whatever they submit, maybe I’ll quickly glance them but it doesn’t matter. Did they do it? So, a huge piece of it is just the continual showing up. It is one thing I look for over and over is I want to look for people who just show up in all areas of their life who have like, what you can call integrity. Like, they do what they say they’re going to do. If they say they’re going to go to the gym, do they actually go to the gym? If they say they’re going to, you know, whatever, save money, are they actually saving money? So I look for that in other areas of their life because I know that translates to business because winners win. Tom Brady shows up and just works every time like, then I pay him an extra for it, he’s just doing the work.”
Brandon seeks an employee who strives for continual improvement, or what he calls relentless improvement. He wants and employee that is listening to education podcasts, taking courses, reading books. “I can almost guarantee you, if you don’t read non-fiction, you probably aren’t working for Open Door Capital and I probably won’t hire you. If you are not consuming education at some level however it is you consume, it tells me that you don’t value continual improvement or relentless improvement. Therefore, you don’t fit our core values.”
When it comes to the operations of the business, he use a system called EOS. The entrepreneurial operating system comes from the book, Traction. Part of the process is having a ten-year vision and then “work backwards to a three-year picture, a one year goal, quarterly goals and then everyone in the organization from the bottom to the top, the resident manager of one of our mobile home parks all the way to me, everybody has these goals every quarter that line up to the company goal for the quarter that line up to the annual goal of the quarter that lines up to the three year picture that lines up to the ten-year vision. So everything lines up together and everyone knows their role like their part in the game and what we’re doing and so that’s kind of how we looked at goal setting.”
So what is Brandon Turner’s number one piece of advice for someone out there that wants to go from a 100 million assets under management to one billion from a team perspective?
“Two things that have worked out really well for us. One is me getting out of the way. People are always like, “Oh, I don’t like hiring people because they can’t do it as good as me” let’s go do second hiring or like it’s like the hiring for 15 years. If you can’t find somebody to do it better than you, you’re not doing the right job hiring because there are people who could do it way better than you.
You’re not the end all be all. I am not talking about you but you know, people listening, you are not the end all be all in anything. There is absolutely nothing that I am the best in the world at, it just does not exist, right? There is always somebody better. Now, there are things that I do really, really well and so I am going to keep my focus there like I am really good at the social media game. I like it, it’s fun for me, it doesn’t feel like work. So that’s what I should be doing a lot of time. I am good at kind of the high level leadership stuff. I love EOS, I love having those big broad meetings where we’re talking about ten-year or ten-billion-dollar visions. Those are fun but I don’t get involved in a lot of other stuff.
So number one, to really scale, it was finding people who are ridiculously good and putting them in that one role and then managing them within some system and leading them in some system. Not even managing, I don’t even manage, I lead, which is different, right? Like I don’t do performance reviews. I don’t do a lot of like that management stuff. I don’t keep people on task. I don’t even know what my team does most of the time but because also I have amazing people that are properly incentivized. Again, like I said at the beginning of the interview is I am not afraid to give away equity because I know that it lines everybody together and we’re going to do way more than we would do separately or that I would do alone.”
Brandon Turner can be found at http://www.odcfund.com, on social media everywhere @BeardyBrandon and www.beardybrandon.com.
Full interview: www.breakofdaycapital.com/podcasts
Watch on YouTube: https://youtu.be/fmqqPuJJ4eE