In this episode, Danny sits down with Don Costa from the Flip Talk podcast to discuss how building a house flipping team has helped his company grow to flipping over 200 properties per year. We will walk through the ups and downs and lessons learned along the way to building the right team, the training that goes into making that team successful, and ultimately how to trust them to make their own decisions and go their own way in their positions.
Don Costa is a married father of three incredible kids and has the popular podcast Flip Talk. He has been in the real estate business since 2003. He started by knocking on doors and wholesaling properties, and then quickly moved into flipping houses. Fast forward to 2018, and Don has built a successful flipping business that will flip over 200 properties this year. Today, we go in depth on how Don built his house flipping team effectively and what lessons he learned along the way.
Don talks about starting out as an investor and trying to grow the business and realizing that he was the bottle neck. Trying to do too many things himself and not necessarily trusting the employees he had around him. It didn’t take long to realize this model wasn’t going to work.
Don talks about rebuilding his business in 2012, he still had a lot of the tendencies to control everything but this time around he had learned the lesson to release some control.
Danny and Don talk about how as entrepreneurs it’s easy to be a “control freak” and to think your way is the only way. They talk about how they still catch themselves in old habits of not wanting to give up control even though they know better. It’s something you have to work on daily.
Danny asks, “At what point did you decide to start building a team?”
Don’s answer? Right out of the gate on the second go around, he used the mantra “hire for where you want to be.” A good friend asked how he could be involved and Don knew he needed a property manager so he was his first hire.
After the first hire, he reached out to a “broker” and asked him to come join their endeavor and he decided to come on board.
Don remembers how it was just the three of them for about a year and half or two years and how they sat on the floor in the office they still have today to put the furniture together.
Building a house flipping team definitely didn’t happen overnight, and it wasn’t perfect, Don remembers.
Don talks about having his a-ha moment on an afternoon when he was spread too thin. He was supposed to be at school to pick up his son and was also supposed to be at a property to pick out paint color and so he thought “it’s time to get out of the way and let them make mistakes, it’s okay they’ll learn from it – I make mistakes every day.”
Letting your team make mistakes is one of the hardest things that Don has had to do.
Danny asks if there’s a good way to transition your knowledge into new team members. Don mentions that a lot of times hiring managers and business owners make the mistake of not spending enough time with their new hires. According to Don, this is on the key components of building a successful house flipping team.
He says, when you’re hiring someone you can’t just dump the entire job on them or they’ll be overwhelmed and potentially not stay on with your organization. Don recommends to give new employees a piece of the puzzle, educate them on how the process works and advise them to come back when they have time available. This ensures they learn the process and are able to execute to the right standards and build their knowledge and skill set strategically.
Don mentions how when hiring you want “plug and play” someone to just step into the role and start running but really that’s one of the worst things you can do for your organization because you won’t have stability. Taking time to train is key.
Want teachable and coachable employees, to put this into action Don is looking to hire an Admin Assistant to develop into a TC, give me a blank slate and let me build upon it. All of our best employees have been the “blank slate” who are teachable and coachable and who have good attitudes.
Danny asks if Don has any specific interview questions to help him find the right people. Don mentions specifically asking what motivates them and to really get to know them.
Danny talks about a new strategy at FreedomDriven LLC where they are doing group interviews of three people. They talk through the strategy and experience and how it’s been a really great strategy for the company.
Don talks through his vision of the company and then strategically planning how to get there. He knew he wanted to be a 100+ flip company and that kind of set the tone for hiring and what that meant to the bottom line. Being able to paint the picture of the vision is what helped him hire when the company was young.
Don mentions looking outside the books and finding strategic ways to get what you need, from hiring part-time employees to looking at people with skill-sets that fit a job rather than looking for someone with specific experience for a job.
Danny mentions if there’s not a mission or a goal for what you’re doing how can anyone, including your employees be excited about it? He recommends to include language around your mission and vision on job descriptions so people can connect with the bigger picture and who are truly passionate for the vision and not just the work.
Danny and Don talk about what it really means to “trust your gut” and how that plays into the team. Don reflects on how the instincts come from making mistakes and learning and if you want your house flipping team to have that instinct as well they will have to learn from mistakes and making their own judgement calls. It’s not something you’re born with.
Danny asks, “How do you monitor the progress of your team and the success of your team?”
Don offers several examples of how this works in his organization and how to use mistakes as teachable moments so the employees grow and learn how to more forward successfully.
Don talks about how they fine tune their internal systems to be more successful. He mentions 40% of the contracts they’ve received this year has come from follow ups so this is an extremely important part of the business model. He monitors stats and looks at the big picture to focus on the right areas to grow the business efficiently.
Danny and Don talk about how sometimes focusing on getting new leads is the easy narrative and something all businesses get caught up in. Don speaks more to the fact that 40% of their deals this year have been through follow ups. Don mentions that 50% of their appointments now are from follow up contact with leads and that this is currently the best converting audience he has.
Danny talks to Don about the automated follow up functionality in the upcoming software launch of FlipPilot, Don will be beta testing the software starting next week.
Don talks about changing his business model over the last year to really focus on the follow up. He speaks to the fact that his business has close to doubled because of their effort on follow ups. They talk about the right technology to support your house flipping team and your operations.
Don concludes with how important communication is and how important leading the house flipping team towards a vision as the owner is extremely important. Don meets with him team informally each week to make sure they are all on the same page.
Joint Venturing to Fund Your Flips with Don Costa
20 Deals a Year From Networking with Don Costa
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