Mentorship With Commercial Real Estate Broker Joe Killinger

 00:06
Mario Dattilo
Hey, welcome to the Mario Dattilo show. I'm your host, Mario Dattilo. I've been investing in mobile home parks and other commercial real estate for years. On this show, we interview some really interesting and successful real estate investors and business owners. We go behind the scenes on how they do what they do. I know you're going to get a ton of value out of this. So stick around until the end. Hey guys, welcome back to the show. I'm really excited because we've got a very prominent guest in the real estate industry here today with me, Joe Killinger on a California, actually Los Angeles market runs a large brokerage firm and he handles the operations. He's also a real estate investor. He has a lot of experience over 30 years in the industry. I'm very excited to have him out. We're going to talk about the market. 

 00:56
Mario Dattilo
We're going to talk about his experience, what he's seen over those years and a lot of really good nuggets. So, Hey Joe, thanks again for being on. Really appreciate you taking time out of your day. I know the listeners are going to get a lot out of this today. 

 01:08
Joe Killinger
Thank you for having me on Mara. You make me sound old 30 years when you actually hear it. You're like Christ almighty. 

 01:15
Mario Dattilo
I know when I say I've been in business for 16 years, I'm going, wow. How old am I. 

 01:22
Joe Killinger
Got a beach in Bora, but I guess. 

 01:25
Mario Dattilo
I know no kidding. Let's talk about kind of how you got into real estate and what you're doing now, just to kind of set the platform and then let's dive into it. 

 01:35
Joe Killinger
Yeah, well, I'm going to start with it. Start from work ethic because I grew up on a working farm in Nebraska. So, you're getting up, you're doing your chores, you're going to school. That was instilled in me at a very young age. I won't go through everything, but I ended up going to school for cotton university, Nebraska for about a semester and a half ran out of money. Headed to California, had $1,200 to my name, got to Flagstaff. My car broke down. They got me for $600, which I now know was a naive kid from Nebraska. I shouldn't have trusted everybody. I said 600 bucks to get started living in California. It was a pretty touching go there in the beginning, but I just always knew that I wanted to get real estate, but obviously having no money, I just started, I ended up getting my license. 

 02:26
Joe Killinger
I was selling shoes at stride, Rite shoe store in the Laguna Hills mall for a lot of years. I was doing telemarketing at night, which by the way, worst telemarketer in the world here, I actually, I was so bad and they moved me into working with some of the computers and I'm actually worse at that. I guess they just liked my personal, I don't know why they kept me on board. I would've fired me, but so I did that. I saved some money and got my real estate license. I started mentoring whenever I could with real estate agents, because that's really the path that I wanted to go quickly to realize that residential probably wasn't for me, I was more commercial numbers oriented and just started finding people that would let mentor is pretty hard. When I got started. You got to remember that when I got started, the internet was in its infancy stages. 

 03:17
Joe Killinger
It was kind of a, it was a lot harder then. And so started. I moved up to Los Angeles. I ended up working on a couple of movie sets, doing construction, saved a little money, end up partnering with some people in buying some homes and flipping them, got out of that just in time because of the economy went down and then early nineties and really realized it real estates, what I want to do. I just have to figure out how I can become an investor. I looked for, I just asked questions all the time. I would reach out. I would talk to people and when I would talk to them, I'd try, well, how can I help you? I don't have a lot of experience, but I'm willing to dig ditch. I'm willing to, I'll do whatever you need me to do if I can just kind of tag along on my weekends. 

 04:07
Joe Killinger
I started learning how to invest and then how to broker. Eventually I ended up doing some brokerage in some real estate auctions and ended up with my business partner. We started commercial brokers international here in Los Angeles. We're a full service brokerage and we do deals not just around Los Angeles. I guess we've done deals in 36 states, a trip, mostly triple-net deals out of state, but our focus is full service in Los Angeles. And, and we do investing to the focus on triple net deals right now. 

 04:39
Mario Dattilo
Awesome. You hit on a couple of points that I definitely want to dive deeper into as we go here, but so 36 states is no joke. I mean, it's a lot of different markets to work and what's nice is I guess if you guys are focused a lot on the triple net opportunities that does simplify things compared to, something that's more operationally heavy, but that's really interesting. Just curious, cause I've always wondered this, I own a brokerage as well, just a small boutique brokerage for mobile home parks and storage, but how do you typically handle the out of state transactions? Are you typically partnering with, or I should say Cobra brokering with another broker in another state, or do you guys get licenses there? How do you do that? 

 05:25
Joe Killinger
We call broker. What's, commercial real estate is it's your network is your net worth. George has been doing this for some time and these brokers all know each other and they pass deals back and forth. They see them before they actually come on the market. If George has got a listing, come on the market, send out to all of his friends around the country, putting this on the market in two days, we have anybody let me know. That's how they're getting a lot of the details down. If not, it goes on the open market and they sell, but then they just partner back and forth. 

 05:58
Mario Dattilo
Yeah. I think what's really interesting that people don't know about the commercial real estate brokerage world is that it's really the wild west still. And I love that about it. It's not, residential and I'm not picking on real residential real estate, but it's a different world. It's a totally different bit. I mean, commercial real estate is a much more just deal by deal transaction by transaction. You're structuring things based on whatever that deal needs. Even on the brokerage side, it's very unique, we're on the residential world, you've got the MLS, you've got, NAR that's really babysitting everything and they've got all these rules and these boards and all that. I mean, I've, I own a brokerage and I'm not even a member of the board of realtors or anything like that. So it's yeah. It really is a fascinating world when you get into the re the commercial brokerage side of things. 

 06:52
Mario Dattilo
So pretty cool. 

 06:53
Joe Killinger
The commercial, it's crazy when you bring, we'll get residential agents, actually, we've had a few of them lately have reached out. They want to get into commercial, residential slowing down. You want to get into commercial and you come in and sit. I said, well, your first thing on a phone call is a property available. There a fee, are you going to be a fee paid? They can't believe that there might not be a fee. 

 07:16
Mario Dattilo
Yeah. Because it's okay to do. It's okay to do pocket listings in commercial real estate, residential. That's a big no-no, you're getting fined and everything for doing that. Where on the commercial side, most brokers. I'd be interested in hearing about your firm, most just try and sell things in house before they ever put it out tow cooperating brokers. That, what percentage do you think of the transactions you guys are doing are done in house buyer and seller? 

 07:42
Joe Killinger
Most of our deals are done probably less than 20% are done in. 

 07:48
Mario Dattilo
House. 

 07:49
Joe Killinger
On some are pretty small for a murder of 15 agents right now. We're going to go up to about, we just moved. We actually, we've been across the street for 16 years. We moved about 30 yards and, but we expanded our office. It just coming out of pandemic. We wanted something new and fresh and, and then added some square feet. We're adding a few brokers too, but we don't have a ton of brokers. There really isn't the opportunity, like a big institutional firm that has all these brokers to do it in-house, but we really I'm a firm believer that, if you've got something, a property here in LA, get it on the market, find the best buyer. Yeah. You got to remember that you've got liability. If you double in something and there's a liability on a brokerage standpoint. When don't you see the economy slowing down that becomes very prevalent. 

 08:37
Joe Killinger
People start watching that. The next thing, lawyers will start knocking on your door. 

 08:42
Mario Dattilo
Anyway, any way to recoup some cash from bad decisions. Right. Well, it's interesting because there are some brokerages and there's different strategies. There are some brokerages that focus on getting eyes on the property to get the best offer best buyer, which is exactly what it sounds like you're talking about. It's a great strategy. You're typically going to get the best price in terms for your client that way. There's also the strategy of you're trying to sell it in house. You're, there's a lot of sellers don't want to market their properties broadly. I would say, I like to buy from folks who are brokering internally. I like to sell with people who yeah, I buy very differently than I sell. There's a lot of brokers that are great people, but I could just never buy anything from, but I would sell with them in a heartbeat including yourself. 

 09:34
Mario Dattilo
So, so are you focused focus primarily on triple net? Or what other property types have you guys done? 

 09:40
Joe Killinger
We're well, we are full service, probably our biggest weakness is industrial and that's just the mark. There's just nothing available here. If it is it's old and tired and it's, I wish we had more of that, but we don't. We have, we have a couple of things that we're working on with it, but office and retail, leasing is a big part of it. Investment sales, we've got some multifamily deals going, we've got a couple retail acquisitions happening, a couple office deals, but yeah, it's, we're all across the board, very diversified for ourselves, 

 10:15
Mario Dattilo
A market like Los Angeles. That's a competitive market. That's that's New York level. That's Miami level. That's, that's Chicago level. That's very competitive. What is LA the second largest city in the country, something like that. It's up there. That's a very competitive marketplace to be doing, high dollar transactions with a global buyer pool. I'm sure you've probably got tenants and buyers that are coming in from all over the world to do transactions there. So, I mean, how do you guys compete being a smaller firm? I mean, it's not a small firm, but it's on the smaller end of things. How do you guys compete with some of the Marcus and Millichap and the larger guys that are coming in with much larger teams? Just curious. 

 11:03
Joe Killinger
Yeah. Well, we have always, we brought in Warren and Jane from Australia F 45 corporate fitness corporate from New Zealand, ergo lighting from Germany. It was all fine and good when they want to be here in Los Angeles. Right. This is a few years ago and, but they sit down, okay, we want to go to these other states and we're like, oh man, we have to give them up. I had to give them to the CBRS CLLs in the world. In the middle of the pandemic, I'm an, a type personality. That's Leo. So I got to keep myself busy. Right. Otherwise it's just, something's gonna go wrong. And so I started affiliate networks. We've got all these affiliates around the country now, and ours is different in that if you belong to, do you belong to an affiliate network? 

 11:49
Mario Dattilo
I don't, but I need to check out yours. I think. 

 11:52
Joe Killinger
It's so we have, they are there's fees with them, right? They want to these annual fees and, and then per transaction fee. I thought that's just absolutely crazy to me. When I started looking because the numbers are pretty big. We launched, it's called the affiliate network and you can see it on our web, the website here, but it's called the affiliate network. It's a group of independent, full service, commercial brokerage companies around the country. If I refer something to somebody in New York or Dallas or any of these major cities, it's a 20% referral, minimum, 20% referral fee comes back to me. Now, if I want to handle it and do 50 that's between the brokers. Me as the owner of the company, I don't really make any money right now because I just set it all up. It's on a closed transaction, a referral fee. 

 12:39
Joe Killinger
So we're, I've been working all morning. There's a, one of our New Jersey agents has been, they want to give them this client spread around the country. I'm connecting them with everybody, making sure everybody's on the right on point and has been working very well. That's how we chose to compete is by building that affiliate network. We also are launching next week, it's going to be icon capital advisor. We're going to have our own mortgage brokerage company that'll launch next week. So we can control that as well. 

 13:11
Mario Dattilo
Love it. Yeah. If you can, if you can build a great network, you're going to have, especially with clients that you have, where they're buying nationally, they're not just buying in Los Angeles. You can, you can really benefit from their growth and help them grow with all your connections in each state. So that's really cool. I was going to ask you from a lending standpoint, I know you're kind of moving into that space as well. What's what are you seeing in the lending markets? That's changed in the last call? It six months, five months since interest rates have started ticking up. 

 13:44
Joe Killinger
I don't really the agents deal on the transactional side. I don't really get into that, but we have seen, people are more cautious about it that I know, but I think w where we're going, you're going to see, we just started quantitative tightening last week, right. Almost a week ago. And yeah. There's, there's a lot of stuff happening. 

 14:12
Mario Dattilo
Right, right. Yeah. 

 14:14
Joe Killinger
Yeah. I've been through, I've been in this business, like we said earlier a long time, this is going to be my third or fourth. If it goes into a downturn, we're, I'm lucky to be in Los Angeles in that, we're always the last ones into a recession. First ones out. We didn't go down very much alive in less than 10%, the last downturn, but our phones are now our company, commercial brokers that are in Nashville does a lot of marketing. Our phones ring, we've got a couple of leads to this morning that are fairly decent, but yeah, these, the lending, the money costing more is going to get people to be, you're seeing more, multi-family coming the market out here, which you weren't seeing before. People are more conscious, they're really, as were talking earlier, I think where you're going to see is people are going to have to go back to their fundamentals, right. 

 15:03
Joe Killinger
The last 10 years or so. There's been a lot of, there's investing in speculate and there's not going to be less speculating, more investing. You're going to get into the fundamentals. You're going to actually look at the numbers. You're not going to, what's appreciation really going to be, , 

 15:23
Mario Dattilo
I have to consider cashflow in. Now. 

 15:26
Joe Killinger
You might want to, and the tenant you're putting in there and cause you're not going to be able to just replace them right away. This morning, I don't know if you saw that target their inventories up like 41 or 43% year over year. That says a lot. 

 15:43
Mario Dattilo
Does. 

 15:44
Joe Killinger
You know? 

 15:45
Mario Dattilo
That's interesting. So, yeah, I mean, from a lending standpoint, it's, it will have an effect on things. People, like you said are being more cautious. They're also taking into consideration. Hopefully by now they're looking at the new cost of capital it's went up noticeably and that does affect the bottom line. The very, very low cap rates, especially combined with, having to really pay attention to cashflow again, is going to affect people . It's going to affect the sellers who kind of held out for that top dollar and waited. They may be, they may be regretting that for the first time in our industry. I'm seeing price reductions. I shouldn't say first time, but first time in several years, I'm starting to see some distressed sellers put two deals under contract last week that were both very motivated sellers and it's, and I don't know if it necessarily has to do with, interest rates in the market or it's just, just luck, but in the last few years, 

 16:46
Joe Killinger
You have to refi, it's, they refined a few years or financing a couple of years ago. Now they're going to refi, they're have to refi the numbers are gonna look significantly different. You know? So you've gotta be smart about that. You've gotta be looking at head, and in the last several years, he might've been doing that as much. 

 17:05
Mario Dattilo
They've been thinking everything's going to stay status quo. They think, and I've actually seen a lot of investors, compressing cap rates further beyond what they paid because they figured their quality was going to go up based on their value, add strategies and things like that. In some cases that might've happened if they bought it at a very high cap rate, excuse me. For the most part, you're probably not going down too much. You're probably taken up here a fair amount over the next few years. We've talked about it on this show, before that people with two-year bridge loans, interest only figuring they were going to do a turnaround and then get out all their cash, or at least be able to refinance at a lower cap rate are probably going to be in a tight position coming up here. That's, and what's great is that, being in the brokerage business, like you're in you benefit one way or another. 

 17:58
Mario Dattilo
I'm not saying it's great that people make made poor decisions in LA lose money, but at least in the brokerage world, you're going to be able to help them, whether they're doing well or not doing well and there's opportunity and all that, you're in the middle, helping people get in and out of transaction. I think that's a great position to be in. I'm looking forward to buying opportunities like crazy here. So, no, that's really good. One, one thing I was going to ask you is from a market standpoint, where do you think we're going? I mean, you've, we've kind of, we talked briefly before we got on the recording here, but where do you think things go over the next 12 to 24 months? 

 18:40
Joe Killinger
I think you're going to find that, like we're saying, you're going have to get back your fundamentals. They make, there's gonna be a lot of opportunity for people out there. I don't think, well, now I'm speaking about LA. I know that in historically you've seen stuff in Texas, Florida, Midwest just take a nose dive. I don't know that's going to happen. I honestly don't know those markets well enough to speak on it, but in LA we've we haven't, I don't see us taking a huge hit here. We have now, when I say, I'm talking about LA proper, I'm not talking about inland empire and that's a big, that's a whole different world, but in Los Angeles we have such a large population and such a actually it's a pretty small area for that amount of population. We don't ever see too much of a dip, but I think nationwide, there's going to be opportunity for everybody. 

 19:30
Joe Killinger
I think people that have been smart in our acquisitions are probably going to be fine. I think if we do go into a recession, hopefully it'll be fairly short, but I'm kind of actually with this quantitative tightening, it's going to do events. If they do dump, jump a full point here in the next month and a half, you're seeing people that were putting, testing the market with their properties until about 30 days ago, they were like, wait a second, let's see if we're going to sell this. We better get it on the market, onto market rate. Yeah. Talking to some of the VCs, they are, they're really shortening their, with the new tech companies they're looking at. They're like, listen, we're going to sit. And that's where, Silicon beach here in LA, it's all Santa Monica Venice area that can take a bit of a hit because if they're not going to have growth, if they're not going to get more funding, they're really looking at companies for, to go out and raise that money right now you better be pretty close to making money or making money. 

 20:31
Joe Killinger
Yeah. We're not going to take a lot of risk. Right. 

 20:34
Mario Dattilo
One of the only industries that you don't really have to make money yet to raise a lot of money, 

 20:39
Joe Killinger
The damnedest thing, I just am like, I take some of those meetings to these people. Yeah. Well, in about year five, we'll start making money. I'm like, 

 20:48
Mario Dattilo
Yeah, your five is insane. 

 20:51
Joe Killinger
Dart in the dark, they don't really know. They're sitting here wanting to do an office lease of 5,000 square feet at $7 a foot. You start doing that math like, oh f**k, 

 21:06
Mario Dattilo
Yeah, you got a pretty high burn rate, buddy. 

 21:09
Joe Killinger
That'd be a tough one. I think, overall the country is, we've always been pretty resilient, but I do think there's going to be opportunities for smart investors going down the road. 

 21:21
Mario Dattilo
What's the, what's the average size of the transaction. It purchased transaction or sale transaction that you're doing right now, just in LA. 

 21:28
Joe Killinger
Ooh. Purchase probably two and a half to three and a half somewhere in there. 

 21:39
Mario Dattilo
So, so there are, so there's things you can buy some things in the two to $3 million range in LA proper. 

 21:47
Joe Killinger
Yeah. Well, you're going to be in some of the more industrial areas, but yeah. 

 21:53
Mario Dattilo
Yeah. Interesting. I would've thought much higher price point just with, like you said, it's a very small geographic, local area, very high density. And so very cool. 

 22:05
Joe Killinger
A lot of that. I mean, you don't see a ton coming on the market as a thing. Yeah. I mean the number of transactions and last that picks up, there's just, haven't been a ton of transactions investment sales. 

 22:15
Mario Dattilo
What's it like transacting in a very controlling government environment. I mean, I would say California and I'm not picking on California, but I'm kind of picking on it. I would never buy anything in California, Illinois, New York, just purely because of the government regulation and the fact that they pretty much hate landlords. How does that work from a brokerage side, doing business in an environment like that every day? How do you navigate that. 

 22:43
Joe Killinger
It's information. You've got to make sure that every one of your sellers and your buyers completely understand what's coming down the pipeline, this is what could happen. You. 

 22:53
Mario Dattilo
Might, yeah. 

 22:54
Joe Killinger
You might have to do this retrofit. When I explain that to people, they're like really, they're going to, yeah. Take a look at that. They're trying to get rid of, if they get rid of exchanges, you need to understand that could go. If you want out of this, it's education, it's education. Let them make their decision. Deals, a lot of people just want, they live here and they want to invest with her. We do deals with people from around the country and other countries, but a lot of them are Californians and just want to own where they live in. Our appreciation is usually it stays pretty strong. So that's really what they're focused on. I mean, I look at some of the numbers, not some days I just shake my head like, we're still looking at a retail client right now that wants to be on Melrose and they're willing to pay $9 a foot, $10, three, 4,000 square feet. 

 23:50
Joe Killinger
You start doing that math. You're like, okay, well, if you're making that kind of money then great. And they are there. They're very well funded and there's selling companies. So yeah. The traffic count is super strong right there. So. 

 24:02
Mario Dattilo
That's great. Sometimes they're make money elsewhere and they just need a footprint in a certain location so that they can say Los Angeles, on their list of different, big cities that they're based in. They take a hit here and they make it there and work. 

 24:16
Joe Killinger
Yeah. Rodale Boulevard is the king of that. People want to have Rodale Boulevard on their website. Right. A lot of those stores don't make money. 

 24:24
Mario Dattilo
Now the little boutique shop that sells the hats and the t-shirts and everything, how do you stay open? So. 

 24:31
Joe Killinger
I'm not making money between labor costs here and your lease rates and insurance. Our insurance is high as well. 

 24:38
Mario Dattilo
Can you, can you just clarify something for the listeners? Because I know there are a lot of commercial real estate investors on here. There's also a lot of residential investors looking to get into commercial. There's a lot of just general entrepreneurs that are learning from this as well. You talk about a dollar per square foot, you talking monthly annually. How, how has that, 

 24:57
Joe Killinger
It depends on where you're at. Right? Right. So in California, it's monthly. It's like if it's $8, $8 a foot months, and then if you go to Texas where they do it, then there's annual it's. 

 25:08
Mario Dattilo
Dollars a year. Yeah, 

 25:11
Joe Killinger
Yeah. It would be all right. You can afford, I could afford it, but yeah, no, yeah. Eight, you get the 12, eight times 12. So yeah. Be your annual costs. 

 25:20
Mario Dattilo
Got it. There, how are the values or how are those rent rates determined, in the commercial space, when you're talking dollar per square foot, especially for office retail, industrial too, but how, how are they determined generally? 

 25:37
Joe Killinger
Just like any just market re. 

 25:41
Mario Dattilo
Yep. You're running comparables, seeing what everybody else is leasing for and you're. 

 25:46
Joe Killinger
Looking at all of it. 

 25:48
Mario Dattilo
Yep. Those listening, I mean, you're, it's similar to what you do on the MLS. You'd look up, what everybody's selling for or leasing for, and you're pretty much competing with them. Got it. I know one of the main things that you do in your business, and you've kind of hinted at this a couple of times, indirectly that you have a team of people and your main focus in your company is operations, right? So you're managing a team of people. I think this could be really valuable for listeners who maybe aren't in the commercial brokerage space or aren't in commercial real estate, but they will run a, some company. I mean, what is it, what is, what does your day look like as an operations manager for a commercial real estate brokerage? What are you doing most of the time? 

 26:31
Joe Killinger
Mostly it's just, how can I bring value to our agents and our company? I get up in the morning and get my morning coffee. This is my favorite part of the day morning coffee. I'm reading, globe streets, QSR magazine business now playing Veneto shell, of course, CNBC and watch my stock market go down. If the stock market go down or up with coffee, it's, it's a real good really wakes you up quickly and or the real deal. I read all those. I can really want I'm having conversations during the day and with our agents or with any of their clients or anybody that I'm talking to. We can be informed about what's going on in the country, In the office. We have training three days a week. Mondays, Tuesdays and Thursdays at eight 30, we do training for the newer agents, the agents that have been in it for a while, even like sit in once in a while. 

 27:22
Joe Killinger
It's mostly, working on our network, the affiliate network, how can we help that? How can we find more business for our affiliates? How can we focus on finding more business with our commercial brokerage? We do a lot of marketing. I sit down almost every day with our marketing person. What do we got going out today, take a look at it. Let's try, sometimes we'll try something new and really just discussing how we can bring more value to our clients and our agents. And, you know, 

 27:57
Mario Dattilo
It sounds, there's a couple of things that really stood out to me. Cause I think it's super valuable to be in tune with what's going on in the markets, not only your own market, but global markets and also different asset classes. You said you're watching, the financial channels, which I do that too. Nine times out of 10, they're not talking about mobile home parks or selves, but it is important to understand what's going on. Sometimes it's, bad news you don't really want to hear, but it helps you to make good decisions and advise in your case, advise clients on what's going on in the general economy, what's going on in the news and net new cause that affects everything. I love the fact that you start out your day, educating yourself, staying in tune with what's happening and keeps you very relevant in your world. 

 28:45
Mario Dattilo
And, and I think that's crucial that a lot of people could take and run with in their own life. Also it sounds like you're doing a lot of mentoring. I know we talked about mentoring before we get on here but it sounds like you're both mentoring internally and externally from the internal standpoint, are you guys, do you guys operate on any kind of pre-structured business system like EOS or anything like that or have you kind of put together your own systems? 

 29:13
Joe Killinger
Yeah, we have. We just create our own and it just kind of, over the years when it gets just to be natural, after you do it so long, it's just like, okay, this is what I have to do next. It's just in you. But it took time. It took Trey. I used to have a schedule up. This is what I'm going to do at this point during the day. I'm going to be returning calls here, doing cold calls here. I'm returning emails here. And so yeah, 

 29:37
Mario Dattilo
You have to be very organized in that business. Go ahead. 

 29:41
Joe Killinger
You have to be, when you get bit, this is what I tell our agents that are new and starting out. I'm like, right now start your structure. Cause when you get busy and you have to go back and create that structure, it's a lot more work. So start it now. When you get busy, it's just going to be plug and play. 

 29:56
Mario Dattilo
This is what every business. 

 29:58
Joe Killinger
Yeah. 

 29:59
Mario Dattilo
Yeah. I love it. Yeah. So get structured, be organized. Don't just wing it and chase the shiny object or put out the fires constantly all day. It's a matter of being organized and planning out your day. I know that in the brokerage world, the most successful brokers are very organized with the time they block off their time for calls for follow-ups for, responses, offers all that kind of stuff. There's you have to because it's, it's a very competitive business, but there's a lot of moving parts. Because you're in a lot of aspects of a transaction, it's very easy to just be pulled back and forth and not be very productive. Especially with clients calling, you. 

 30:39
Joe Killinger
Can get in the way. 

 30:40
Mario Dattilo
It can. 

 30:41
Joe Killinger
That's what you gotta be careful with is that busy work can just take your whole day. Right? So the structure really helps with that. 

 30:47
Mario Dattilo
Any tips that you would give to folks who are looking, who either currently manage a group of people or are kind of growing a business or an investment group where they're going to be managing more and more people over time, any tips for them? 

 31:02
Joe Killinger
What I find, and this took years of experience is, listening, we all have, I've been in business long time and I just, I don't want to come out and say, I know everything because obviously I don't, but I've learned a lot from our younger people in ways that things can be done more efficiently and really put a focus on, if this person finding the right, no, trying to put a round person in a square hole, it's not going to work. Just find something that makes it fit for them. If they're not analytics, don't force that down their throat, find that, find their strengths and weaknesses and then try and to enhance the experience for them. And you're going to find that everybody we're all so different. I mean, I'm terrible with math. If you want to give me anxiety, give me a math project freak out. 

 31:54
Joe Killinger
When it comes to learning about, when I started marketing, I could sit and watch marketing videos all day and learn about it. And that's, that was really my path. That's how I brought value to our companies. I found, okay, this is where I need to be. Fortunately, I got a business partner and that math is his strong point. So, it's kind of the ying and yang thing, but find their strengths and then, and hence that, and then, find different people and something that we do every once in a while is we'll switch it up, say, okay, Shamie, you're in marketing, Travis, you're in sales. Like I want you guys to switch for the day. I want you guys, you go, and man, now they appreciate each other's job. They never make it a full day, usually a half day. 

 32:40
Mario Dattilo
Then, and they work together a lot better after that because they know what to do to go from one to the next. So they received. 

 32:46
Joe Killinger
An understanding. 

 32:47
Mario Dattilo
Yeah, 

 32:48
Joe Killinger
They understand what is going through because you get a marketing person. That's sitting there doing their marketing and they're working and they're busy and they see a salesperson that's on an autodialer and they're not really talking. So he's not working today. He's just sitting there. I'm like, well, okay, so let's switch this out and you sit there and she goes, that's so hard. 

 33:11
Mario Dattilo
It's. 

 33:11
Joe Killinger
Just a different mindset. And they weren't better because of it. They really understand what each other's doing and they look for a way to make each other's experience. This comes from the top down because I explained, this is what I'm trying to do. I don't know what you don't know. You need to tell me if I'm doing something that you're not understanding and just stop and let's walk through it and try and figure that out. 

 33:34
Mario Dattilo
Yeah. Listening and having good communication with people's crucial. I was going to ask you too. Do you guys use any personality assessments when you're bringing on team members? 

 33:46
Joe Killinger
We don't. We don't, but that is the core of our company is, real estate, as we all know is trainable. So, you can learn it, you can go in, but I can't train a work ethic and I can't train a positive attitude. And so I'm interviewing people. That's what I'm looking for. I will ask them questions just about, their past experiences, and a lot of why's it was asked, why did that happen? Or why do you think that happened? I listened to their response from there, but now I've never done those personality tests, mostly because I think I'm afraid if I did one, when I might come back. 

 34:23
Mario Dattilo
Filler, 

 34:25
Joe Killinger
I don't know. 

 34:25
Mario Dattilo
We've, we've actually utilized for about a year and a half now predictive index, which there's a bunch of them disc. There's several others, but predictive index is surprisingly usable and very accurate and very simple to do. It's. I mean, it's scary. How accurate and how quickly it's like a 32nd to one minute assessment and it comes out very accurate. Also we've learned that the way to place people into positions is to figure out what their personality is. Like you said, you can train people for things, but if their personality is going to, they're going to be pre-positioned to not enjoy something, they can force their way through it. They can learn it. They've got the skills it's just in their head, they're going to burn out and they're going to find distractions. Eventually their performance is going to drop because it's not something they like to do. 

 35:18
Mario Dattilo
Personality assessment for us, doesn't tell us if somebody is qualified, it tells us if they're going to enjoy it and continue to want to grow in it. And it's really changed our company dramatically. We, we don't hire anybody without a personality assessment before we even interview them. So it's really helped us. I was going to ask you this. 

 35:38
Joe Killinger
So hard in this industry. I mean our turnover rate in our brokerage, it's huge. There's one company. I won't say the name, but 92% turnover within 24 months, new agents, 92%. 

 35:53
Mario Dattilo
I, you read my mind because my next question was going to be, how do you recruit in such a competitive, complex, difficult industry to manage it? I mean, I know just being a small brokerage and I owned a residential brokerage up in Minnesota. It was very challenging for that. Even on, with my brokerage, it's hard to find people who can go nine to 12 months without a really big bump and a there's a learning curve there. You've got to build up your book of business. It is, these are slow complex transactions. Often the due diligence brings up issues and delays and yeah, zoning things, you got permit all this stuff. How do you guys recruit both to be competitive with the big guys to bring in good talent, but also, how do you, how do you retain and recruit folks? Because it is a very difficult business. 

 36:45
Joe Killinger
Oh, very hard. They're very hard finding good talent. I mean, it's you, our agents are there. They sit outside here sometime they hear me talking about to potential recruits that we're talking to. I'm just very sternness list of 18 to 24 months. You're in this office eight 30 to five 30. You'll probably make money before six, eight months. Chances are, and it's, I said, it's a lot. I said, you're going to be cold call. I break down the day for him. I said, this is, and I can guarantee 18 to 24 months. So, most of them, I don't even get, they just, they don't really want to do it. Once I do are willing to come in and actually talk after that, we find some good people, but it's, we've run ads on indeed. Most of it's word of mouth. Like our agents will talk, say, Hey, this person was really good. 

 37:38
Joe Killinger
Somebody that we should be talking to, 

 37:40
Mario Dattilo
Do you recruit mostly existing or new agents? 

 37:44
Joe Killinger
What a pretty good mix actually, I've been getting reached out loud. Our company has been doing, I think we've been doing SEO work for 15 years. If you Google a commercial broker in Los Angeles, commercial brokers international, come up, number one, under the paid ads, we don't pay for the ads, but we're right under that. If you're just searching, so we get a good amount of leads and I'd say 80% of those leads are no good, but I've get 20% that are, we've pulled in some really good clients. So, and we'll give that to the newer people. We'll say, listen, I'm going to give you this lead, but you got to work with this experienced agents on it. You're going to do all the leg work and you can listen to them. Yeah, it really is a good way to get them started. So, it's just, and our agents that have been in the business a while or so willing to train, because they've been there, they know what it's like. 

 38:39
Joe Killinger
It is, it's a very competitive market out here. If you don't have the support of your seniors, then so they'll do one or two deals probably with a senior. They usually they're on their own by then. 

 38:53
Mario Dattilo
We started out junior move to senior, they got kind of a mentorship relationship. I assume there's some splitting commissions with the senior helping out and everything. It's motivation for them to obviously leverage their time and coach somebody new. And so it's a win-win. 

 39:08
Joe Killinger
Yeah, we don't get in between that. We'd let the bro the, to the new agent and the senior agent, decide how much work they're going to do. If a senior agent goes, listen, you're going to do all the work. I'm just going to overlook the contract. They've done them as low as 10%. So just you do everything. You do the showings, you talk to the client, I'm just going to go over the contract and then we'll get the deal done. And that's worked pretty well. Nobody's, and those aren't typically bigger deals for lift the newer people involved, right? They're usually smaller retailer office that they can really kind of cut their teeth in, or if it's a smaller investment deal. I mean, we've had a couple of agents that came in at a $45 million first deal. You're like, 

 39:51
Mario Dattilo
Good hire. Never. 

 39:52
Joe Killinger
Happened to me. Let me tell ya. But yeah. It just, but it's, for me, it's about our team. It's, right now our marketing person is out and her phone is ringing. She does. The way we even do with our marketing person, it looks like she's a receptionist in our office, but she's not. So we compensate her. Every time she there's a lead that comes in and goes to the front line and she answers it and she knows it's a lead. She jots it down. She gets bonused on every, if it closes a deal that closes, she gets bonused on. It. 

 40:27
Mario Dattilo
Really. 

 40:27
Joe Killinger
Pushes her to really want to do the marketing. So, so she's gone until I think she's back on Thursday and and she's still working. She's still, I'm still getting emails from her when she's on vacation, but everybody here is just answering the phone. They only want to make sure she enjoys her vacation. Cause she's one of those that she has her company phone forwarded to her cell phone and she'll answer it while she's on vacation. So. 

 40:51
Mario Dattilo
She's a team player. That's a really good example too, of making sure that the team wins together. Even though she may have, she's incentivized to make those ads in the marketing do really well. She takes that first call. So she's got some control. She pushes it off to the person. Who's going to take it down. It's all everybody's being compensated in, benefiting for doing a good job. And it pushes everybody up. I love that. I made a note here. You, you said that you just put the two together and you say, Hey, mentor, mentee, you guys work out the split and you guys work out the responsibilities. I like that because we tend to get too much in the mix of that and say, well, this is how it should be. What we found is that one agrees one doesn't and it just let them figure it out there with commercial brokers too. 

 41:45
Mario Dattilo
Typically they're very entrepreneurial and that's probably one of the biggest challenges of finding good commercial brokers is you need somebody that's entrepreneurial that wants to work within a team and, and wants to play as a team member versus just go out and do their own thing. I love what you're talking about, what you've done. I think the mentorship program is it, the mentoring is showing up more and more in your world. Can you talk about what you do on the external mentoring side of that? 

 42:18
Joe Killinger
I'll get people reach out from the YouTube channel or from this website and say, Hey, I've got, can we talk? I'd like to have you mentor me. I'm like, okay, well there's no charge. I don't charge for it. It's just, I just am a firm believer that in our industry to get good people in it, that you're gonna need to help them. The more good people, again, all boats rise, right. So it really helps. They'll just reach out and I'll do like 15 minute calls every week and just do a quick, so I probably spend about an hour and a half, two hour, an hour and a half each week just talking to people around the globe. I've learned more about real estate in South Africa, India than I ever thought I would know, But, and it's a lot of, it's just giving them the support and they start doing everything and really pushing it. 

 43:04
Joe Killinger
I'm probably going to lose one next week. He just can't get his arms around it to mark. I don't really know in South Africa. So, we're trying to help him along, but yeah, it just takes, the zoom calls are, they're very short and they have their numbers. So I want it. I don't want to take a lot of time to do your numbers. Tell me exactly what you've been doing, how many calls you've been making, how many emails went out. I mean, networking events have you gone to, and so, yeah, 

 43:32
Mario Dattilo
But what's so interesting. You're doing mentoring for free, which I think is obviously a very giving thing. Obviously it comes back to you through other channels or direct channels. What what's just out of curiosity for your agents, what's kind of the call volume, especially newer agents. They, that you set that bar for them. Do you set the bar? Do they set the bar on what's. 

 43:55
Joe Killinger
I let them set it? I just said lesson. I want to see you guys doing, at least, I'd like to see you doing it a presentation, at least every two to three weeks, get a listing presentation right now. You don't want to in LA having a multi-family buyer is very difficult because every broker that gets a listing has 10 buyers. 

 44:18
Mario Dattilo
Right. 

 44:18
Joe Killinger
So better to get a list of. 

 44:20
Mario Dattilo
I'm making notes over here, if you can't tell. So, so what kind of call volume are your top agents doing a week? 

 44:31
Joe Killinger
75 and a hundred. Some are doing more, some are doing more, they have a robo dialer. They're sitting there taking the calls or doing a couple of hundred and they're getting more connections. Yeah, it's usually minimum is going to be like 75. 

 44:46
Mario Dattilo
Nice. Yeah, that's good. This that's 75 contacts with owners of some type. Yeah, that's good. That's good volume. I think we've got some speed dialers going in. They're making anywhere from 200 to 350 calls a week, but of course that's not connects. They're probably connecting with some around that 75 ish range of owners. That's, between the other work, you only have so many hours in a day to talk to, 

 45:16
Joe Killinger
It needs to be everything. I mean, if you're a broker starting out, obviously cold calls, but I push warm calls to, your sphere of influence everybody, your high school, alumni, college, alumni, churches, synagogues, wherever, ask for the business there. I ran into an agent that ended up quitting our company because he got promised the world from another company. He's actually wanting to come back to our company now. I couldn't get him to ask friends and family and the alumni, all those connections for the business. And now it's 72% of his business. He goes, man, I wish I listened to you a couple of years ago. You want to work on that too everyday. Cold calls, warm calls, a good email program. If you're retail, you need to do a block program, get out there and getting on the streets and get to know everybody, but you got to do the work. 

 46:09
Mario Dattilo
That's really good. Yeah. That goes for all sales roles, any company that has salespeople in them, you've got to make sure your team is out there pounding the pavement, not just waiting for things to come in and knowing the difference between an outside salesperson and inside sales person. The type of business that we're talking about is really a lot of outside sales. They're going out and drumming up the business. They're not just, I mean, they get leads. It sounds like from marketing as well, but they're building those relationships. They're going out there and doing it. They're not getting served up on a silver platter. Getting the right people and building their expectations. I love how you said too, that when you're interviewing them, you actually tell them, look, you're not going to make money probably for six to eight months, at least. And I do the same. 

 46:53
Mario Dattilo
I mean, in the brokerage world, it's going to take awhile. The tr getting something under contract can often take 90 to 180 days depending on the type of deal. How long is it going to take you to get your first contract? And it's a, it's a tough gig, but they can make a ton of money and do very well with it. It's really rewarding business to. 

 47:13
Joe Killinger
Know we've got a young lady sitting, so hopefully she can't hear me, but she sitting maybe 15, she's been in the business for five months, actually seven months. She only came in two days a week while she was training. She's got four is out, she's already closed the deal. She's got two contracts out. I mean, she's going to a hundred, some thousand dollars in her first year. Done she's in the office at eight 30. We, her out of here at five 30. Yeah. It's it can be done. There's, I just, the social side of this is as far as the networking, the social networks are key to, it really allows you to, it allows somebody that's new to go in and take over a market because if what you're doing for your marketing and you're doing everything in that community, you're bringing value and everything you're doing. 

 48:09
Joe Killinger
It's just, if you're a cold calling, say, Hey, you think about selling your house or your property. No. Okay. Next call. Right. You know, you gotta bring value, right. That's what we preach is bring value on every phone call, really have a conversation. Don't think you're going to close them on selling their property the first day, build a relationship that bringing the value. It really well now I forgot where I was going with this. Cause he got on the value thing, 

 48:34
Mario Dattilo
Grinding it out, grinding and out and adding value. 

 48:38
Joe Killinger
Yeah. Adding value is so key and you've got to do it, but on the social marketing is less talking about. If you're on your LinkedIn and your Facebook and your Twitter, even tic talk is starting to, I'm seeing some Eddie Gonzales and Kyle and Sarah are just killing it on Tik. Talk of all places. They have the creativity. I can never have I'm on it, but I'm not very creative. 

 49:01
Mario Dattilo
Right. 

 49:02
Joe Killinger
But, but it's a great tool for them. You can go in and take over a market. If you're putting market updates out and you do more documenting your day out doing showings in an area and people are gonna see that. It's going to be easier for them to pick up the phone to call you. It lowers those barriers, right. It's not going to be so intimidated to talk to you because now you're bringing value to them. You're you're doing something in their market. 

 49:27
Mario Dattilo
They feel like they already know you too. Yeah. 

 49:30
Joe Killinger
Yeah, 

 49:31
Mario Dattilo
Man. I hope, I hope people listen to the end, towards the end of this. Cause you've had, you've put out so many good nuggets here at the end. I mean, I think too, you got, you talked about how you've got an agent who got started. She worked hard. She put in the effort and she's getting the results. I think sometimes people are too patient, like I, I think it's, it's important to have realistic expectations. At the same time you've got to go all in and just be super committed and be know that you're going to grind it out for a couple of years to get that pipeline going. And this is with any business really? But yeah, really good. Hey, we are running out of time here, but what I want to make sure Joe, is that everybody knows how to get ahold of you. 

 50:12
Mario Dattilo
You had mentioned your website before, but can you just shout that out loud for all the listeners who aren't seeing the visuals? 

 50:18
Joe Killinger
You bet we got right there. It's backward. That's the website or you can call me directly. It's three one oh nine four three eight five four two. One other thing is know what your competition is doing and do it better. That's something that we focus on as well. 

 50:40
Mario Dattilo
I forgot is very good. Very good point. And it's Joe Killinger dot co CEO. Got it. Joe, I N G E r.com. Check him out. He's a, he's got a great YouTube channel as well. Looking forward to doing some deals with you Joe's has been a real pleasure. I know a lot of people got a lot of good nuggets out of this. Like I said, I've been taking notes this whole time in our discussion. Thanks again for being on and looking forward to doing some deals with you. 

 51:10
Joe Killinger
Thank you, Mario. 

 51:11
Mario Dattilo
All right guys Hey catch you on the next one. Thanks for listening. I hope you got out of this as much as I did. I'd really appreciate if you could leave a five-star review so we can reach more people jump over to Mario, to tillo.net and find out what else I got going on. Be sure to connect with me on all the socials and I'll see you on next week. Show.