Marco and Hillary Romero
Hillary and Marco got married and became pregnant in 2015. In an effort to build the future they both wanted their family, they both quit their jobs that same year. Since then, they have built their real estate portfolio and build a wholesaling company that closes numerous transactions each month. With a team of six people in Hilco Homes, they look to grow strong in the new year of 2018!
Marco and Hillary got their start like most investors do. They were looking for a way to generate an income for their growing family and needed something that worked. Having already known the business, they decided to go for it and start their real estate investing journey. Hillary started studying up on everything she could. She read all of the books she could find on real estate investing and dove in. Marco helped her with some concepts, and together their wholesaling team was born. Now the two are unstoppable!
“I’m learning the best that I can,” Hillary says, “But Marco has 10 years on me.”
They had two major focuses.
1 – Marco and Hillary wanted to generate cash flow, or a passive income. This consisted of getting houses to rent. Marco points out that, even though the rent is paying for the house, that’s not a huge passive income for a family to live off of.
2 – Marco and Hillary needed an active income. This came to them through wholesaling houses. While they were building up their rental properties business, the two focused on finding wholesale deals to keep their lifestyle afloat.
Their wholesaling houses team started when a gentleman named Juan contacted Marco and asked for guidance in the real estate investing market. He was let go of a previous position and was looking for a job in the real estate market. Marco taught him how to bring in wholesaling deals with the profits being split between the two 50/50. The rest is history! Juan became a part of their team, and everything grew from there.
“We refined all of our systems and processes,” Hillary says, “It’s all about finding the people who work best with us.”
Their wholesaling houses team is up to 7, including their virtual assistant, and is still looking to grow. “We’re bringing on an eighth next week,” Marco says, “It’s a constantly evolving thing. Some people work out, and some people don’t.”
What are some of the lessons learned from hiring and letting people go?
Marco and Hillary have the idea of not hiring good people, but hiring great people. “We don’t just want to hire to fill a seat,” says Hillary.
Hiring high quality team members will only strengthen your wholesaling houses team over the long run. In the past, they required that applicants submit a resume, but have recently changed that policy. Seeing the pen and paper resume as an “out-dated system”, Hillary has decided to do video resumes instead. Marco and Hillary ask that applicants answer 3 questions in their 2 – 3 minute video submissions.
“I feel we’re a pretty good judge of character,” she replies.
If an applicant makes it past the pre-screening questions and video application, then they move on to a full interview with Juan. At that point, if Juan thinks this person is qualified and a good fit for the company, then they get moved on to Hillary for the final interview. This process has taken Marco and Hillary a few years to work out, but they’ve found it’s the most successful for finding people to add to their wholesaling houses team.
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Danny Johnson: This is Flipping Junkie podcast episode 104. [music] Welcome to the Flipping Junkie podcast. The podcast for flip pilots everywhere. Flip pilots are the house flippers that work more on our business instead of in our business by keeping a 30,000-flip view. You’re now part of the small group of house flippers that considers themselves flip pilots that strive to build the life of financial freedom and time freedom so that we can spend more time doing what we love with who we love. In this podcast, I give you a glimpse of the daily life of a flip pilot so let’s gets started.
Hey, everybody. Welcome back to the Flipping Junkie podcast. I’ve got a good friend, Marco Romero, and his wife, Hillary, on the show today. It’s going to be a great episode. We’re going to be talking about building a team and the hiring process so that you’re not looking at a thousand resumes and making your head spin. You’ve got like a define process to be able to weed out people automatically and hire the people that fit your culture and organization and who you want to work with so you guys have a great time working together. It’s going to be a great episode. Thank you for tuning in.
Before we get started, it’s amazing to me still. After doing a podcast for so long, this is episode 104 now. There are still a lot people listening out there that don’t know that we also run LeadPropeller – Real Estate Investor Websites and that LeadPropeller provides websites but also services, and it just blows me away. I guess I don’t talk about it enough because I don’t want it to be like I’m just advertising all the time, but we also run managed PPCs so AdWords campaigns, Facebook marketing campaigns, and managed SCO to get your website to rank at the top of the search results. We have all of that in house, running dozens of accounts for the top investors across the country. If you want to find out more about that, I urge you to go to leadpropeller.com and then click on the Services navigation button at the top. And you’ll find out more about exactly what we offer and how we do it and whether it’s available where you are if you want to get started with that. So check that out. Go to leadpropeller.com and then click on the Services tab at the top on the navigation menu. All right. Thank you for joining me. Let’s get into it.
All right. Today, I’ve got my friend, Marco, and his wife, Hillary, with me today. Marco Romero and Hillary Romero. Hillary and Marco got married and became pregnant in 2015. Marco, it’s amazing that you became pregnant. I don’t know how you did it. In an effort to build the future, they both wanted their family and they both quit their jobs that same year. This is kind of worded weird. I didn’t read it first.
Hillary Romero: We had a lot of changes happening all at once, but it was exciting. It was a little scary but very exciting at the same time.
Marco Romero: I’d say that the pregnancy was 50/50, but—
Hillary Romero: He loves to say that and it’s just annoying me because there was nothing 50/50 about any of it.
Marco Romero: And it annoys everyone I tell, but it makes me feel better like I did something.
Danny Johnson: I think that’s funny. Yeah. That’s awesome. Since then, they have built a real portfolio and built a wholesaling company that closes numerous transaction every single month. With a team of six people and their company, Hilco Homes, they look grow strong in the new year of 2018. So thanks so much you guys for joining me today on the Flipping Junkie podcast.
Hillary Romero: Thank you so much for having us.
Marco Romero: It’s our pleasure and on our goals. Number one podcast to get on was Flipping Junkie, so we’ve probably accomplished our goals too.
Danny Johnson: Did you write that after you are already going to be on it?
Marco Romero: Actually before.
Danny Johnson: Cool. I didn’t know that. All right. So, I wanted to talk with you guys about how you built your team up for wholesaling. And I get your emails. I’m on your list, so I see the deals that you guys are putting out there. They’re great deals, and there’s quite a few of them that come through. So I know you guys are doing a lot of business because you’re in San Antonio as well, for everybody listening out there. Marco and I have known each other for a long time, probably what? Eight years maybe.
Marco Romero: Yeah, something like that. It’s been a while.
Danny Johnson: Yeah. And so, you guys have built up this company and this team that allows you to be able to spend time with your family and then also pursue other interests. So I wanted to talk with you guys and have you share sort of how you got started in flipping houses and then how you progressed to build the team and how that whole process worked out.
Marco Romero: Do you want to go on to our initial story?
Hillary Romero: Well, just a quick summary of our story is when I met Marco, I didn’t really know anything about real estate other than… I love watching HGTV, but I didn’t really know much about it. And when I met Marco, he was wholesaling by himself, just doing it on his own. I did not know what wholesaling was or if it was legal or anything about it. I was just like, “You’re doing what? You’re just lying in bed and you’re just texting a lot. I don’t understand.” So I didn’t understand that.
Marco Romero: I wasn’t lying in bed that much.
Hillary Romero: He was doing whatever he wanted while I had to go to work. So I was like, “What is this he’s doing so much?” And so then, he ended up taking a job with a local investment firm here doing real restate investing, and I had just a regular job doing project management and then that was 2015. He proposed on my birthday which is July 1st and then we knew we were going to have a very quick engagement. We scheduled our wedding at the end of September. On our wedding night, we got pregnant so everything happened like really fast. But backing up a little bit, I already gave him like a three-month notice to quit that job. After the wedding was the honeymoon, and I had already quit my job so I didn’t have anything to go back to.
Marco Romero: The plan was for her to quit and then we would go onto honeymoon, so it was like officially meant to break everything.
Danny Johnson: Nice.
Hillary Romero: Yeah. And I can just enjoy doing that and not having to worry about going back to work.
Marco Romero: She mentioned that I have been wholesaling independently for a while, but I was wholesaling so much like I was swelling a lot of my properties through a local company here in town so much so that they asked me to run their acquisition team. I was running a team of up to nine guys at one point, so I had like an actual position there. So at that time, we had determined that: (a) “Babe, go ahead and quit. I have this job. I’ll focus on that. I’ll support us,” and then we went on our honeymoon.
Hillary Romero: On our honeymoon, we were lying by the pool. We went to the Bahamas, and we were lying by the pool and Marco was reading Tim Ferriss’ The 4-Hour Workweek. I’ll probably always remember this moment when he bended the book down, looked at me, and just said, “I think I want to quit too, and I think we should do this investing full time.” And this was like in October because we took our honeymoon a month later. So we got married at the end of September. We took our honeymoon in late October. I was very excited but scared. I had already found out I was pregnant. That was probably really new for me; five days before we took the honeymoon.
Marco Romero: And this was an all-inclusive honeymoon.
Hillary Romero: Yeah, it was. All alcohol included and I could just drink any of it. So I was just like—
Danny Johnson: I guess Marco got to drink a lot on that one.
Hillary Romero: Actually, he’s not much of a drinker. So he drank a little, but he didn’t like rub it on my face or anything. But yeah, so there was just all these changes like I quit my job, we just found that we were pregnant, and then Marco wanted to quit his job but I was really excited. So after that honeymoon, he had one month left of work. He gave his notice. He left around Thanksgiving and then we had December with holidays and family time, just kind of starting to put all the pieces together for the whole 2016 year and we just kind of took off running. That was just a quick backstory. Everything happened very quickly.
Marco Romero: Yeah. For me, I have been in real estate for quite some time at this point. I personally have been a part of over 350 transactions. When I was working at that company, we did over 125 deals in one year. So I had been a part of a lot of the transactions, a lot of deals, but I had never really focused on my own investments. So I have done some here and there, partnered with some people, but that was never the priority even though I was around that all the time.
So when I was reading that book, I kind of reflected on the fact that I was putting myself back in the position of working for someone else rather than building my own portfolio, becoming the investor. And now that our whole life was changing, I was married and we had a baby on the way, I wanted to focus on building something together that would be furthering our own future where we can eventually control our own time and build our own funds and money as well. So then that’s what we did.
Hillary Romero: It kind of just felt like now or never especially with the child on the way. It’s like everyone gets stuck in the security of having a real job with a paycheck and just consistent stability, but it really was just now or never and it was exciting for us to just do it together.
Danny Johnson: Yeah. That’s what I was going to say something about. You got married, found out you were going to have a baby. You just quit your job; Marco was telling about quitting his. I think at the time where you would most want stability and then all of this sort of like… But like you said, you knew about the business. It wasn’t like it was something that you didn’t know what was involved.
Hillary Romero: Honestly, I had put a lot of blind faith in Marco. I know he’s one of the smartest people I’ve ever met. I know I’m in good hands.
Marco Romero: You’re the smartest I know.
Hillary Romero: I know I’m in good hands, but I didn’t know anything about it so I had to really focus on learning. I had to do a lot of book reading. Some of the books that Marco has been telling me… He started with Rich Dad Poor Dad. I really dived in first and just learn as much as I can so I don’t completely go crazy learning about how we’re going to make money and—
Marco Romero: Now, she knows more than most investors.
Danny Johnson: So how was that though? Whenever I got into it, I couldn’t talk about it enough, right? That’s all I wanted to talk about. That’s all I wanted to read and learn about. Did you feel that way, too? Or did you feel like it was more of an obligation to understand everything? Or was there a real passion there to know as much as you could?
Hillary Romero: When Marco and I have conversations at the beginning, he tell me all the ways that this would work. It’s hard for me. I have to actually see it drawn out like visually see it. So there are a lot of times where we would have to step down and he’d have to show me how cash flow can work, how when you put in X amount of money. All the different numbers that go into a deal with ARV and equity and cash flow and the loan payment; all these things. It really didn’t make sense for a while. He had to keep telling me over and over again. I kind of honestly just had to like take a step back and not be so worried about it, but then when we got our first one or two deals and that worked out and then we did the second and third. So it was like gradual. As time progressed, things made more and more sense especially with my understanding just in general with being fully immersed in this world. Things just started to slowly make sense to me. And now, we’re like starting our third year now. Time has flown by so quickly. We really have come a long way with all of the deals with done, so I definitely have complete faith now that we’re on the right track. We’re just kind of working hard as much as we can.
Danny Johnson: Congrats. It’s amazing. I hear what you’re saying where there’s a lot to know and to understand how all of that works together. It takes going through those deals, right? And actually seeing it and then saying, “Okay. Well, that makes sense now, now that I’m at that position where I’m actually dealing with that kind of thing.”
Hillary Romero: When you actually start seeing the money come in, that’s helpful. Because before you have deals, it’s like this idea of, “Well, we should be getting money.” But until you actually start seeing the money come in and now the cash flow is getting more and more, each month you’re raising your cashflow because you have more properties, that just makes more sense. I have complete faith in what we’re doing now. It definitely took a lot of conversation between us to get me there but granted he has like 10 years on me. I’m learning the best that I can, but yeah.
Danny Johnson: That’s cool you guys are working together. So, do you guys ever get sick of talking about real estate?
Marco Romero: She definitely does.
Hillary Romero: Well, because right now we’re not really in a position where… Yeah, we have flexibility but we still have to work a lot. We work all the time. I typically will stop working on a certain point but Marco will be lying in bed working until we go to bed on the weekends.
Danny Johnson: Lying in bed again.
Marco Romero: There’s a lot of lame in this conversation. I do walk around from time to time. I’m not lying in bed all the time.
Hillary Romero: Well, I would say like out of the day, Marco is working 95% of the day, maybe more. There are definitely times where I will go crazy. I’m like, “I cannot do this anymore. We need to go spend time with the family,” but yeah, we deal mostly with real estate in our house.
Marco Romero: That’s our partnership. She brings balance. She brings the other side of the life. I’m very robotic and I have focus.
Hillary Romero: He focuses 100%, and I’m like, “Well, we have a child so we need to do things together as a family.”
Marco Romero: She rounds me out and then vice versa. I help and do the focusing on our goals and do our planning and what we need to be working on in this life.
Danny Johnson: Yeah. It’s important to have that. I agree. So, you were reading that book. You guys were on a honeymoon. You came back. What was the plan? You were transitioning out of working for the other investment company. What was your plan? Did you lay it out with who you wanted to hire in sort of when and what order? Or was it more just, “Let’s focus on getting the deals ourselves first.”?
Marco Romero: So, what had occurred was the honeymoon was what? September or October?
Hillary Romero: The honeymoon was like in the middle of October. He doesn’t even remember.
Marco Romero: October. And then I said I would quit in November. So our plan was just to focus on the holidays, just spend time with family, and then kind of hit the ground running in January 2016. Line up with the New Year, those type of things. We had some savings at that point that we were planning to live on to kind of get us through this transition. We basically had two focuses. One is that we wanted to cash flow. Cash flow is our number one focus and that’s what we plan on retiring ourselves on. So we wanted to get properties that we could either rent or owner finance out. But even if you get a house that you can rent and you’re cash flowing $200 a month, that isn’t going to pay you the bills.
So the second focus was generating active income that we can live on and that was through wholesaling. So the combination of kind of to acquire properties that we could cash flow whenever those opportunities came around, but in the meantime, be wholesaling whatever we can wholesale to be able to maintain our livelihood.
So we started Bella Buyers. That’s the name of our company for the rental properties, the cash flow, and then we started Hilco Homes as our wholesaling company. Initially, it was just Hillary and I. I had been a wholesaler before, but I had been removed from wholesaling for roughly a year and a half or so at this point. I had no pipeline. I didn’t have any leads, so I basically had to start over.
The first deal that we did from a wholesale standpoint came from MLS. I went back to my old school ways and looked for areas of leverage, where can I get leads quickly. The first one came from MLS and we just started wholesaling ourselves. The way that we ended up building a team came when a gentleman by the name of Ron had reached out to me probably around June or something at this point, right?
Hillary Romero: Yeah.
Marco Romero: Around June of that year, 2016, because he had worked at my old job or the old company I was at. They had let him go, and he just kind of reached out to me for just guidance. He was in the real estate realm because of the position he was in. Some say, “Let him go.” He really like or will stay and still wanted to delve into that. And so, that relationship cultivated and he started doing. I was like, “Okay. I’ll show you how to do deals. You can help us do deals. We’ll figure out how to split.” It just started out with a 50/50 split where he did most of the work and I did most of the guidance, support, and teaching. That’s how we got the first person involved.
Danny Johnson: Nice.
Hillary Romero: And then, we brought in like a systems guy who manages our CRM and reporting and all the leads but we dropped out mailers. We’ve just slowly been growing. We can hire a bunch of people, but our focus is on finding the quality people that really will fit with us long term. We’ve refined all of our systems and processes. So with recruiting, we really kind of figure out if this person is going to work out or not.
Marco Romero: We’re actually up to seven people now with the virtual assistant, and we have an eighth person that we’re bringing on next week. To get to this point—take last year as an example, 2017—we probably had six people that we tried to bring on our team but it didn’t work out. It’s a constantly evolving thing. Some people are going to stick, other people won’t. We’ve refined our hiring process. So now, the people that we’re bringing in are much better fits than what we’ve had initially.
Danny Johnson: What are some of the lessons learned from that having to hire and let people go? Because I know that’s pretty painful to do. What are some lessons learned? And what have you guys done to your process to try to eliminate those problems?
Hillary Romero: One of our big things is we’ve just recently, as a team, decided not to hire good people. We want to hire great people. We also don’t want to hire just to fill seats. We really just want to hire the quality people. In the past, we required people to submit a resume, but I realized that’s kind of an outdated system. People will walk the resume up to make it look better and whatever, and I don’t really care about that. So we kind of eliminated that from our process. Instead, we do a video resume. We have three questions. Give us a video from two to five minutes because I feel like we’re pretty good judge of characters even in something super quick like that.
Marco Romero: Well, Hillary runs our hiring department. Hillary is great at judging individuals. If they can make it through Hillary, then—
Hillary Romero: So what happens is they submit a video and like a pre-screening form with questions filled out. If Juan and I look at those because we do it together… If we look at the video, look at the questions they’ve answered and then decide that, that person might go to the next spot, then Juan conducts an interview with them first. If Juan at that point feels they’re worth pushing through to me, then I have the final interview. But at any point, I can be to one’s decision. I can basically say, “No. Don’t even waste your time. We’re not going to move forward with that.” So it’s been a process of evolving the whole process in general.
Marco Romero: Some of the learning lessons that we’ve had through this process was (1) that we needed to build a system around hiring, that we wanted to not only scale but create repeatability in the sense of repeatedly hiring quality individuals and we needed to have a system in place. The way we started was I would talk to somebody and be like, “Okay. Great. Let’s join.” But now, I remove myself completely from the equation and the other team members are involved in making that decision in which empowers them but also creates a system to where there’s communication and there’s multiple checkpoints that need to be reached for somebody to get through.
We’ve also learned a few other lessons such as: be slow to hire and quick to hire. By doing that, then we can basically make sure we’re not hiring people that are going to waste our time or we put a lot of energy in documentation, training, setting them up, bringing in the system they’re not going to work out anyway.
And then the other thing too specifically… And this might not work for other businesses. But in the realm of wholesaling, the people we’re mainly hiring are individuals that are talking to sellers, talking to buyers, constantly negotiating. In this world, there’s tons of objection, there’s tons of rejection, and you have to be able to have thick skin and be able to push through those objections. So we’ve designed our hiring process that through each step and each interview we actually kind of challenge them and tell them, “You know what? Because of this reason, dude, you might be too young. We’re not sure you’re a good fit,” or “You might be too old. We don’t think you’re a good fit.” Really, we can make up a reason.
Hillary Romero: “I just don’t think you have what it takes—
Danny Johnson: It’s like the fight club thing. You make them wait on your porch and maybe get the broom or stuff like that.
Marco Romero: Because we want to see are they going to respond or are they going to deal with the objection because this is mild compared to what they’ll see on the other side. So we’ve designed it to where there’s a lot of challenges to make it through our process. But if they can make it through our process, then there’s a high likelihood that they’re going to make it in this business and this is going to be a good fit for them but also a good fit for us by integrating them into our team.
Danny Johnson: Great. Now, that’s smart. I like that. Do you guys ever do personality tests? Do you do DISC or anything like that?
Hillary Romero: It’s so funny that you just asked that because one of our end-of-year goals was to have everyone in our team do personality test. After everyone did it, we had a deadline where everyone had to complete it and we kind of just spent one of our meetings talking about each person’s personality, the weaknesses, and the strengths. Four of us on the team that are all the same were consuls who are very organized.
Marco Romero: What site did we use?
Hillary Romero: I don’t remember. I think it’s 16personalities.com or something. Four of us are the same. Four us are very organized, more emotional, whatever and then the rest are all kind of different. So we kind of bring different strengths and weaknesses to the table.
Marco Romero: My personality is I’m stubborn, and that’s got to be a lie.
Hillary Romero: No, it’s true because at the beginning when we first started dating, he was like, “I don’t do all these certain things.” But I’m like, “You’re going to. You’re going to have to learn and change that because I won’t take that.”
Marco Romero: Like I said, she rounds me up.
Danny Johnson: Yeah, that’s great. Tony Robbins has a free DISC profile that you can fill, and I really that one too because it talks about how to work with the people too based on those personality traits and that’s a real fun thing to do. It’s like what you said, just go around with the whole team and talk about each other’s strengths and weaknesses and just how they interact. It’s pretty eye opening too when you read them and then you say, “Do you feel like that’s you?” And sometimes people will say, “What? I don’t think so.” And everybody in the room is going, “No, that’s exactly you.” Some people don’t even see when they actually act like that. And then to read and don’t believe when everybody else does, now that is spot on. How do you fill that funnel for the hiring? Are you using Indeed? Or are you using Craigslist? What are you finding success with?
Hillary Romero: I experimented with different recruiting places. We paid for LinkedIn. Like I said, we had a lot of response on LinkedIn but a lot of the LinkedIn people are more professional and they don’t really want to go from a seller-paying job to commission. So while we got a really good response rate on LinkedIn, we didn’t find any real serious candidates because we’re just in a different spectrum, I guess. We are strictly commission based. A lot of people just can’t do that or they’re counting on that paycheck. So we kind of switched our experiments.
Right now, we found the most success on Facebook Job Posting. Facebook Job Posting is free, so that’s kind of where we’re stuck with right now. We’re just on Facebook. We have done Craigslist in the past. We got one from Craigslist. They did back when he was working with Mark like the other company. And then, we have considered ZipRecruiter which we haven’t done either. They have a bigger budget or it’s more costly per month, so we were kind of just trying to do other experimental places and options before we went that route.
Marco Romero: Yeah, Facebook worked really well. We also just focus on our Facebook business page and providing a lot of content there in the realm of wholesaling. Just giving out free information. We actually host a show every Friday that’s called Ask Wholesale. People can ask questions about wholesaling. My team and sometimes guests will answer those question. We just try to put a lot of content out there. We found that in combination with the job postings has brought a lot of attention to us. People see our activity and see that we’re in real estate, we’re wholesaling and that’s something that they want to do. They kind of like our personalities, and that’s also helped in people reaching out to us to join our team.
Danny Johnson: Yeah. I like that idea a lot because they’re looking at more at what you guys are doing and being excited about it and wanting to work. They’re interested with you guys, with your personalities, and you attract them. I could see that being a lot better than just somebody submitting blindly to a bunch of places and seeing who responds. They don’t really even know what you do or how you do it. They just want a job. You get somebody that’s like, “Man, I really want to work with them.”
Hillary Romero: Yeah, luckily.
Danny Johnson: When you do a job posting like that and you have people do a video interview, obviously that probably cuts down on a lot of people. They’re like, “I’m willing to do that.” How many interviews do you end up with? How many videos do you guys end up with typically?
Hillary Romero: We just implemented this like a month or maybe two ago, and I’ve already had at least five video resumes submitted. Some of them we just haven’t even proceeded with an interview. He said I can judge character fairly easily with somebody. There was one that was I like, “Oh no. This person is not going to go with us at all.” And then, there were a couple where we—
Marco Romero: She keeps it real.
Danny Johnson: Were they picking their nose or something?
Hillary Romero: No. They just seemed like I guess the stereotypical millennial where they just think that they’re amazing. And I’m like, “You don’t really have anything to show for it. You just didn’t come down to Earth a little bit and not act like you’re everything and like we’re grateful that you’re interviewing.” I just want like a genuine person who’s hardworking, committed, loyal, completely wanting to understand this business, completely involved with wholesaling really.
Marco Romero: Like she said, we’ve received about five video resumes but we’ve had a lot more people that respond in general or reach out to us way more than the five. I don’t know how much, but I know there’s been a good amount. But again like I mentioned, we’ve designed our system to have a lot of filters. So the fact that they have to submit us a video resume knocks out a lot of people because they have to set up the time, put their phone or their camera wherever or their laptop, actually take the time to answer the questions we’ve pre-established, save it, upload it, send it to us—that kind of thing. So if they’re willing to do that, then okay. Great. They’re committed to it. So if there’s a lot of people that will respond, then that’s a good test. They’re willing to do the work.
Hillary Romero: And I like that. I don’t want a million interviews every month because (1) we don’t have the capacity to bring on so many people, but (2) again we’re not looking for good people but we’re looking for great people. I’m don’t want to just fill seats just to say, “We have this huge company now.” That’s not what I want to do. I want to fill the seats slowly and make sure we’re putting the right people in there. So I’m okay with the smaller number of people who actually take the time to submit a video resume. And then from there, like he said, if they don’t meet qualifications on that or there’s another form that they fill out. Just some basic questions: Have you ever done commission work? Do you have other jobs you’re doing right now? That sort of thing. If there’s any red flags within that questionnaire, then we might not even give them the interview with Juan.
Marco Romero: Actually, we just did that today.
Hillary Romero: We just did that today. This guy seemed great, his video. He seems like a likeable guy. He could fit in nicely with us, but currently he has a full-time job and one of the questions on the questionnaire said, “Are you willing to work 40 plus hours a week for Hilco? And if not, what would be holding you back?” He said, “Why a full-time job? That would hold me back.” And I’m like, “Well, until you’re ready to make Hilco your priority, I don’t think this is going to work out. I don’t want to even mess with our interview if it’s just going to be a waste of time.” So we have that meeting earlier today and—
Marco Romero: So we have a lot of filters to get quality people and it works on our side too so we don’t waste their time.
Danny Johnson: Yeah. That’s great. I’ve been hiring a lot lately too. Man, the days of looking at resume after resume after resume. And after a while, you just kind of scan and hope you catch certain things. It’s really hard to spend the time to really analyze those things. If you have people just screen themselves out through the process, that eliminates that. So when you do get a good one, you can really look at the resume and understand their experience, but it doesn’t sound like you guys. Do you look at the resume? You don’t start with that. But after they submit one, do you eventually look at the resume or you don’t ever look?
Hillary Romero: We don’t ever look at the traditional resume anymore. We used to collect them, and I just don’t care. A lot of it has some filler, whatever they can put on it. Our resume is a video resume now. It’s really just a video intro of who you are and why you want to be in real estate.
Marco Romero: Right. Keep in mind, what is the position that we are hiring for? Mainly, it’s people that are communicating with sellers, communicating with buyers, getting contracts. And these are typically people that have like an entrepreneurial string to them or are trying to become investors in the long term themselves. The traditional criteria of: Do you have your bachelor’s? Do you have your master’s? What kind of schooling did you have? All the typical things you see. Your expertise is in Microsoft Word. All that kind of stuff doesn’t matter to us. What matters to us is: Do you fit in our culture? Will you bring value to our team? And conversely, can we bring value to you? Can we help you accomplish your goals? And are you willing to put in the work, put in the hustle, and do what it takes to help yourself get ahead but also help us get ahead? If there’s a mutual beneficial relationship here and you’re going to be an additive to our team and can fit well with the other team members and we can all play nice together, it doesn’t matter if you quit in third grade. It doesn’t matter.
Danny Johnson: I agree in that. That’s good that you brought up that point because it is more of a fit and a personality thing than it is experience before. Because you try to determine cultural fit, what are some of your favorite questions to determine that or ways to determine cultural fit other than just gut feeling?
Marco Romero: Well, in each interview like we mentioned, Juan does the first interview. He’s like our manager now and then Hillary has the final interview. Each interview has its own set of questions that we make sure to cover. But additionally, the interview itself is going to natural evolve based on the way the conversations grows.
Some of the key factors that we want to fit is kind of like what I mentioned previously. They need to have either sales experience or real estate experience. We really don’t want to start with somebody that has neither. If you have one, then we can help you with the other. It makes our training process simpler and easier.
(2) They need to be somebody that is willing to work hard, have an element of hustle. There’s a lot of people that think they work hard when they do their nine-to-five-, 40-hour work week, but half of the time they’re drinking coffee and checking out Facebook and those type of things. We need hustlers in a sense. How do they respond to us? How quickly do they get the video to us? Are they punctual in the interview? All these are telltale signs. How do they envision themselves now like their self-image? But also, how do they see themselves into the future? Do they have goals established for themselves? Typically, the people that we’ll ask, “What are your goals?” and they said they don’t have any or they haven’t thought about it usually are good fits. They haven’t taken the time to reflect on themselves and the future they want to create for themselves. Those type of things. And then just a good personality. Can they laugh at jokes? Do they have a casual element there? Not in the sense that they won’t get work done but, we can have a joke with each other and have a good conversation and there’s depth to the personality. Those type of things.
Hillary Romero: We work hard, but we do try and have fun too as a team. We try.
Marco Romero: We just went bowling.
Hillary Romero: We would do bowling. We’ve done Topgolf. We have quarterly lunches. We always have something going on in the future to kind of just motivate and inspire our team members to continue to work hard. We want to have a fun culture and atmosphere in our company.
Marco Romero: Yeah. We saw who were the good bowlers and who were the terrible ones.
Hillary Romero: Funny enough, I’m the only female so far in this company and I actually wasn’t the worst bowler.
Marco Romero: That’s right.
Hillary Romero: I did better than some people, so I’m pretty proud of myself.
Marco Romero: That’s right.
Danny Johnson: Yeah. I think we went bowling for the Christmas party for the Flipping team. I don’t know. I think maybe one person broke a hundred maybe, but we were there having dinner and some drinks and stuff.
Hillary Romero: That’s fun.
Marco Romero: Doing trick shots between the legs and stuff.
Danny Johnson: Yeah, and trying to launch it halfway down the lane before it hits the… It was an interesting place though because the… I guess it’s one of those of things where you can get these lanes set up in different places for a little bit cheaper. The way the pin setting is handled is that the pins are actually attached to ropes. It’s really weird. When you hit them, they fall over and then it all kind of picks them up and drops them back down but one of them, well, never really landed in the spot it was supposed to be. It would just be kind of off a little bit. There’s a place in New Braunfels that’s was kind of cool, but yeah, that one weird pin wasn’t cool.
Did you guys start with culture a lot of times? You start with the vision for the company and then the mission and core values and kind of make that a part of the hiring process. Do you guys do the same thing? Have you done that yet?
Marco Romero: When we first started, no. Even though that’s fundamental and all the books talk about that. I think we took that more seriously as we try to take growing more seriously. And we also saw that our hiring process was infective.
Hillary Romero: Yeah. It was like networking.
Marco Romero: Yeah. We were trying to bring on a lot of people that didn’t work out for one reason or another. And so that kind of highlighted to us that if we wanted to grow, we need to take that seriously. We’re going to take hiring seriously and really think it through. And if we’re taking hiring seriously, that goes to an even more fundamental question: Who do we want to bring in to this team and this company? And if we want them to fit, well, what is the company? What’s the culture here? So from a practicality standpoint, we kind of worked it backwards.
Now at this point, we’ve really thought about it. We’ve had meetings about it. That’s why we did the personality traits. We’ve actually tried to emulate Netflix. Do you want to go ahead with Netflix?
Hillary Romero: There’s a Netflix culture. It’s probably on their website. Just talking about how they like their company culture to be, and that’s kind of where we got some of our ideas. They give really good severance packages to their good employees because again they don’t want to hire good. They don’t want to save those spots for good employees. They want to open those spots for great employees.
So it just kind of goes back to just figuring out how we want our company to operate and really just being careful with who we select to be part of our team. We used to call our team our family. But again, going back to the Netflix, they made it a good point that in a family you kind of have to just deal with people’s unconditional love, but we have to see this as like a growing company. And so, we need to change that mindset from family that we love all these people that work with us. Yes, we love and care about each other, but we want to have a great team. And so, if people don’t work out, we just have to kind of, like Marco said, fire quickly and realize maybe they aren’t the best fit for us.
Marco Romero: Well, the analogy is: Rather than a family, we’re like a sports team. So in a family, people could suck and okay.
Hillary Romero: You kind of just have to love them anyway.
Marco Romero: Yeah. They still come to Thanksgiving and all of those stuff and we’re still accepting. Whereas in a sports team, if you’re trying to be high-caliber teams—somebody is shooting for the championship—everybody has to pull their weight. Everybody has to put in effort. There’s no slackers. If you’re a slacker, you’re cut from the team and your spot is replaced. So we went from the family mentality to a team mentality to kind of put some perspective what each person’s role is and what they should be doing. That was just one of the aspects that we got from Netflix.
Hillary Romero: It’s just about keeping everyone accountable. I hope that if I slack in this company even though I’m the owner, I hope that somebody calls me up and says, “You didn’t do your job right.” I want people to be very transparent in this company. I don’t want people to be scared of dialogue or uncomfortable situations. We all just need to be very open in how we communicate with each other just because we want to have a very effective team. So we had everyone read that document and talk about it. It kind of just changed my mentality altogether with this company. We want to go in the right direction and so we have to really think about those things that we’ve been discussing and reading.
Danny Johnson: Have you guys read the book Five Dysfunctions of a Team?
Hillary Romero: No.
Danny Johnson: Is it Patrick Lencioni? It’s an excellent book. It talks just about that, and it’s actually a… Was it a fable, I guess? And so, it’s a story about a team and then how they have… You got to build trust and then have conflict and then make a decision. It’s an excellent book. It’s a quick easy read. I just actually bought it for our leadership team here to all read and go through to make sure that the meeting is a little bit more productive. It’s a great thing. I highly recommend it.
Hillary Romero: We’ll look into it. Thank you.
Marco Romero: I have to look on your show notes.
Danny Johnson: Yeah, that’ll be on the show notes. That’s 104, flippingjunkie.com/104. There are also going to be links to guys’ stuff to your website and anything else that you want to put on there. But to continue with this really quickly—we only have a little bit longer to go—we focused on the hiring part of it and I like that a lot because I think a lot of people struggle with that. And I think the biggest question if I were listening to this that I would have would be: You pay people based on commission, so there’s no base salary. How does that work out? How do you guys structure that? Would you mind sharing?
Marco Romero: So for commissions, the way we basically have it structured is, first, we pay all outside people. If there’s an agent on the deal, another wholesaler, if there’s any sort of fees associated with the transaction, all of that gets paid out first then we’re left with our remaining assignment fee. We pretty much do exclusively assignments. With the assignment fee that’s left over, we have a set percentage that goes to the marketing side which is how we pay our marketing systems director, the person that handles our VA, our CRMs, the marketing—all those aspects.
Danny Johnson: Is that a full-time job?
Marco Romero: Well, no. He has another full-time job but he is like—
Hillary Romero: He’s on top of it. He’s actually the only person in our company that has a full-time job, and we’re allowing that because he’s very quick to respond and we don’t have any issues with him having another job.
Marco Romero: If we want to measure based on results, he definitely is all over his results. And we’re trying to make to where we’re so consistent that he can quit his full-time job. That’s the goal with him. So a portion of that goes to him. That’s a smaller percentage. And then the remainder, we split 50/50 with what we call our acquisition partner and then Hilco takes the other 50%. So it’s just very simplistic. The acquisition partner focuses on getting the contract themselves. They do all the work. They also are the ones that sell the contract to the buyer that ultimately buys the property. Again, they do all the work.
Where Hilco comes in is we build the infrastructure to support them so that they can focus on getting the contracts and focus on finding the buyers. We handle everything else. We pay for the office space. We pay for leads even though we encourage only to get the real leads.
Hillary Romero: We pay for the VA.
Marco Romero: We pay for the virtual assistant. We pay for the CRM. We pay for everything. And not only that, we give them the full support. Constantly, they’re talking to us and me and saying, “What’s the next step? How come we’re working here?” We’re always there giving them the next point of action to take.
Hillary Romero: I’m also the closing coordinator. So once they find a seller and they get the property contract and all the other documents that we require to build out, I take over all the documentation. I check to make sure everything is correct on it so we don’t have any issues. And then from there, we’ll open title with our title company and basically follow up. I send them the earnest money. I get all the documentation and then that gives them time to go find the buyer if they don’t have one already. So I kind of take that off their plate.
If the title is not clear for whatever reason, then I’ll communicate whatever the title company needs to acquisition partner to then get that information from the seller or the buyer or whatever. Whatever is needed, I’m kind of like the middle person just so they don’t have to do that. Because we’ve found that a lot of times the acquisition partners are so focused on getting their deals and working their leads. I’m just a very organized person. I kind of just prefer to do it my way because it’ll get done quicker and it’ll get done efficiently and correctly.
Marco Romero: You should’ve seen her personality test.
Hillary Romero: I can’t stand when things are done incorrectly or harshly filled out. I basically told our team members today. I said, “This is how it’s going to be. If I get documentation that’s incorrect, I’m not opening title. So I highly recommend you do it right the first time so we don’t upset the sellers or buyers having to do multiple signatures, signings, and corrections.
Marco Romero: Like I said, she keeps it real.
Hillary Romero: So yeah. I kind of take that off their plate too because at first I wasn’t acting as closing coordinator. And so, the acquisition partner had to negotiate the lead, get the contract, do all the title work, and find a buyer. It’s just a lot. I would rather they focus on continuing to get contracts and keep it going than worry about all of this other stuff.
Danny Johnson: That’s probably what they want to do as typical types of sales people.
Hillary Romero: And I want to do the closing because I know I’m going to do it right.
Marco Romero: A quick comment that I want to make that’s kind of like taking a step back and looking at it from a company and a business standpoint is: I looked at it. It has phases, and we constantly are transitioning from phase to phase to phase. And even now, we’re transitioning. We didn’t initially have the closing coordinating position that Hillary now runs that department, but initially it was the acquisition partner. He was the one that handled the title and worked those type of things. As we grew, we noticed that that was something that we needed to segregate and allow the acquisition partner to focus on what they do well but really honestly what generates income for them. And so we slowly have been taking more and more responsibilities away from them to make them more and more efficient, to make the system overall more efficient.
As an example, right now we have an acquisition partner doing everything, finding the contracts with the seller but also finding the contracts with the buyer. Our next phase that we’re going to shift into is having a dedicated sales team, so we’ll be hiring sales people. So we’ll have a team that just focuses on getting the contract with the seller and eventually we have a team that focuses just on the buying and sales side. But you have to constantly be reflecting on what’s working now and project into the future—a month from now, three months from now, six months from now—what is the next necessary item that you need to get building towards and then build a plan to be able to create what’s needed for the company.
Danny Johnson: That’s smart. With the leads coming in and you got multiple people doing acquisitions, how are you dividing sort of a round robin where this leads goes to this guy, the next one goes to this guy, the next one is this one and then start over again? Or how are you divvying up who gets what?
Marco Romero: When he hire somebody, we have them in the training process. All this attention we’ve dedicated to hiring. We’ve also spent a lot of time on training, building a system for training. And we keep our people in training until they’ve successfully closed six deals. Once they’ve closed six deals, at that point, they’ve essentially graduated. Now, they operate with a lot of autonomy, but we are still very involved in keeping them on track on those type of things.
When it comes to our paid leads—leads that we’ve actually spent money on—those only go to the people that have graduated, that have proven that they can close deals. They know how to handle leads appropriately so that we’re not wasting money. The way that works is first come first serve. The reality is when it comes to leads, when people are calling in or reaching out to us, there’s a short window to capture that lead and their attention.
What I had done in the past was round robin, but that’s focusing on the fairness of the people when rather you need to be focusing on what’s best for the lead itself. Doing round robin isn’t necessarily the best for the lead because a person might be unavailable for six hours that day and that means it’s not being worked properly. So it’s first come, first serve. We do have it to where if an individual has got three leads in a row, then the next one will go to the other person so that one person isn’t dominating. However, the focus is on what is the best way to work the lead and we build the system around that.
Hillary Romero: Plus, I think that it makes our acquisition people like hungry. It’s like, “Oh no. I don’t want to miss out on all the leads, so I want to be like really focused on getting them, too.” So it’s kind of like a way of first come, first serve. It really incentivizes our people to work hard.
Marco Romero: Friendly competition.
Hillary Romero: Yeah, friendly competition.
Danny Johnson: Yeah. It’s good. Have you had a problem with anybody coming on and being a little bit slow to make the commissions, to make it make sense for them financially?
Hillary Romero: Yes.
Marco Romero: Definitely. That’s another thing in the hiring process that we try and make clear to them that they know what kind of world that they are jumping into; that in the reality of wholesaling, you’re not going to get a contract right away. You’re probably going to get a contract in 30 or 45 days. And then even when you get that, there’s the time to sell it and then there’s the time to close it.
Hillary Romero: And that’s assuming everything goes perfectly smooth in the file. Assuming there’s no issue with the title or whatever.
Marco Romero: So that’s why it’s so critical to find people that are willing to do whatever it takes, that really have those goals of wanting to be in real estate, wanting to become an investor. Because when times get rough and financially they are challenged, in multiple ways challenged, that they’re still going to think creatively to try and make it work. That they’re not going to give up or throw the title. For instance, one of our hires just went through a string of crazy bad luck. One of his closings, the house caught on fire two days before closing.
Hillary Romero: He was new and he had probably like six or seven. I don’t know. He was brand new, and every single deal fell through. He was so down. Then right before Christmas, he got a deal. It closed. He started to see the light. And I said, “But look. You’re starting off in like the dump right now. When you start getting your momentum and you start getting more and more and more, this is just the story you’re going to write in 10 years when you started, right? So in 10 years, you’re going to look back and be like, “I had to go through all this crap to get to where I am now.” That’s just like a great story. But yeah, that was hard to motivate him to get going because it wasn’t anything he was doing wrong. It was literally just bad luck, circumstance.
Marco Romero: As another example, he contracted a house with a person that he had skipped trace who have the exact same name as the seller even to the middle initial but wasn’t the seller.
Hillary Romero: We contracted it with like a person who didn’t even own the house.
Marco Romero: Right. It was like a ton of bad luck. I think that’s a major bad luck. But what really helped was… Again, like I mentioned, we have that vision. He had what he wanted to accomplish, but there was an open dialogue. Very frank with one another. He was very open with his situation, and we were also very understanding.
When we bring people on from a training standpoint, they don’t start off at that 50/50 split I mentioned. It’s a build-up progression. So for us knowing his situation, we accelerated him to the 50/50 split. We also did everything in our power to help him to make it through his—
Hillary Romero: We gave him a personal loan just to get him by. That doesn’t mean we’re going to do that for everybody, but I’m not a bank.
Danny Johnson: He was already showing that he was—
Hillary Romero: He was already very dedicated. He’s already worked hard. He’s proven he can get contract. These were just unfortunate circumstances on everyone else’s part.
Marco Romero: And we were investing in him because we knew that there was a long-term potential and it’s something we have to evaluate. Is this situation because of his inadequacies or his lack of effort? And the answer was no. So what can we do to help him get through this trial.
Hillary Romero: The rough patch.
Marco Romero: Yeah, the rough patch so that he can see the light at the end of the tunnel and become successful that everybody wants.
Hillary Romero: He’s kind of past that point now. So now we’re on the upswing.
Marco Romero: Now, he’s dangerous because he’s built these habits of just doing—
Hillary Romero: Persistent.
Marco Romero: Yeah. So now that he’s getting good luck, he’s really tearing that.
Danny Johnson: It’s amazing.
Hillary Romero: It’s hard at first, but we try to help as much as we can but we’re not a bank.
Danny Johnson: Well, this has been great. Thank you so much Hillary and Marco Romero for being on the show. I like the topic. I think it turned into a really good episode with new stuff that I don’t think we’ve shared before on the podcast, so thank you so much.
Marco Romero: Yeah. It’s our pleasure. Thank you for having us. We’re excited to take part of it. Thank you very much.
Danny Johnson: And if people listening out there want to get a hold of you guys or going to contact with you, what’s the best way to do that?
Marco Romero: Number one way is Facebook. So if you just go to the Facebook search bar, type in Hilco Homes, H-I-L-C-O Homes. That’ll take you directly to our business page. We put out a ton of content, a lot of free content. We’re constantly trying to give value and help people that are wanting to get into the real estate realm and specifically around wholesaling because we’re a wholesaling company. And so, we really try and give out a lot of value to share our experiences, our learning lessons, so that others can grow from that themselves.
Hillary Romero: You can message us on Facebook, and we’ll respond.
Marco Romero: Yeah, we will.
Danny Johnson: All right. Well, thank you so much. I do recommend everybody to go check that out. And then you said you do the live. Is it Facebook Live? Or is it just prerecorded?
Marco Romero: We do have that.
Hillary Romero: We do both.
Marco Romero: Yeah, we do both. The Ask Wholesale show.
Danny Johnson: Ask Wholesale?
Marco Romero: Yup, Ask Wholesale. That’s every Friday we release it. That’s prerecorded because we edited it to make it a little fancier, but we also do a lot of Facebook Live stuff for sure. And now, we actually take questions from online, Facebook, our audience and answer them directly. So if you have questions, you can submit them on there and we’ll cover them for sure.
Danny Johnson: Melissa and I, I think, are going to be on that, right?
Marco Romero: Yeah.
Danny Johnson: I think we already have that scheduled. All right. So great.
Marco Romero: Yeah, two or three times that you don’t even know about.
Danny Johnson: That’s how it works. Thank you guys so much. Have a great day, and we’ll see you soon.
Hillary Romero: Thank you.
Marco Romero: Thank you very much.
Hillary Romero: You have a great one, too.
Danny Johnson: [music] Like I mentioned before, if you haven’t checked out LeadPropeller services and what we offer to our investors that want a hands-off approach to lead generation online to supplement their leads that they’re already getting from more deals or to start getting more consistent leads and deals for your flipping business, go to leadpropeller.com and click on the services button in the navigation bar. You can also give us a call directly to Josh who is the director of services here at LeadPropeller at (210) 999-5187. You guys have a great week, and we’ll talk to you next time.