← School of Hard Knocks Podcast
School of Hard Knocks Podcast
Chris Watters | CEO of Watters International Realty - Going From $0 to $10M+/Yr & Doing 9 Figures in Revenue in Real Estate
01:08:20
Chris Watters is the Founder and CEO of Watters International Realty, a real estate company that does over 9 figures a year in revenue. Chris first got into entrepreneurship at a young age where he started out mowing lawns during college, after this pe...
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- [00:00]
James
What's going on, everybody? And welcome back to the Hard Knocks Podcast. I'm James, I'm here with Josh, and we have a very special guest today. We are here with Texas real estate legend Chris Waters. He's the founder and CEO of Waters International Realty, one of the biggest real estate companies in the country. You sold hundreds of millions of dollars in real estate throughout your career.
- [00:20]
Chris Waters
No, last year alone.
- [00:21]
James
Last year.
- [00:22]
Chris Waters
Come on now. I love it. I love it. But, but, you know, I'd love more credit than that. I love that.
- [00:28]
James
I love that. I'd love for you to just kind of let the audience know a little bit more about yourself of how you got to where you are now. If you could just give them a little background on you.
- [00:35]
Chris Waters
Yeah, so, I mean, you guys interviewed me last time and, you know, I guess, man, my face has been on the grindstone for so long. Like, I just think I'm a normal guy. And then that video we did got millions of hits and all these people were like, Chris, I didn't, I didn't realize you made so much money. And, you know, and so I just thought I was, you know, doing what you're supposed to be doing. I don't want to say work hard because as you said, that's what everybody says, but, you know, I, I graduated college. You know, probably like a lot of people in the early, early 20s was trying to find my way and I had this lawn mowing business through college. And actually he was one of my most pain in the ass customers. You know, when I, when I was taking care of his house, he was always like, very particular about things and he was in real estate. He convinced me when I, he and his wife had this little team at Keller Williams and they convinced me to join and get in the industry. And it was an amazing decision. To be honest, when I was 21, graduating high school, when I went to go work for him, I lacked the humility, I think, that you need as a young person to be open minded, to be coachable. And so when I went to go work for him after a couple months, I saw all these proverbial ceilings and, and I was not coachable. I wasn't humble. He was giving me advice and he's a great. I actually talked to him recently. He's a great guy, great salesperson, and he's telling me what to do and I'm just kind of like dismissing all of it. So I had to eat some humble pie to get to a place where I was going to be open minded to Learn and grow. And so after I went to that company for, like, three, four months out of college and quit, like, I just. I quit. I was like, this is. This is stupid. I'm. I don't see how I'm going to get rich doing this. And so then I kind of got. I went through this long detour for, like, two or three years, you know, and, you know, I kind of got. I got like. I don't want to say it was like a job. I was what's called an oil and gas landman. And as a landman, your job is to, like, go find people that own mineral rights in Texas. And the job was absolutely miserable. And it's kind of like what you would expect of like, an 8 to 5 job, you know, like, I worked 8 to 5, basically, and then I kept my real estate license active, and I was, like, doing some deals on the side on weekends and evenings and stuff. And I was super cheap with my money, and I invested it all into a bar and restaurant in the summer of 2000. Excuse me, in December of 2009. And for anybody watching this podcast, if you remember that time period, like, if you look at, you turn on CNBC right now, that the Dow Jones is at, like, you know, what, 37,000. Well, in the summer of 2009, the Dow Jones was at like, 5,000. Like, that's pretty. You know, like, let that sink in for a second. Right?
- [03:42]
Josh
Yeah.
- [03:43]
Chris Waters
So we're at 37,000 right now. It was at 5,000. Like, the market was in a lot of turmoil. And I had. And I put all my money that I had saved for years and years and years, you know, those first few years out of college open. I put it into a bar and restaurant, and here in Austin, and it was located off 6th Street. And I had read something that said, you know, when. When the market goes south, that alcohol sales go up. And, like, I'm not, You know, I mean, sure, when I was in college, I definitely had my phone, but, like, you know, I'm not one of those. What you would expect of, like, a bar and restaurant type owner. I had never been a bartender. None of that. And I'm like, well, I'll figure this shit out. And so I invest in this bar and restaurant, and about nine months later, I show up, and there's chains around the door, and there's a sticker from the Texas Alcohol Beverage Commission, and my landlord is saying, you guys are being evicted. And, man, I was so broke. Like, I mean, I'm not even kidding. I don't even think I had $10 in my account. It might have gone negative at some point that fall. And so, man, I was, I was like feeling on top of the world when I graduated college. And then like three, four years later, I'm like, broke as a joke. And that was a huge turning point. Getting, you know, having to, you know, basically be like, all right, I, you know, maybe there's, maybe there's something out there that I need to learn so that I don't do this again. And so I. The only thing I knew at that point after that bar and restaurant shut down was real estate. And so it's like 2010 and I just start becoming like a cold calling machine. Like, I didn't have money for leads. I didn't have money to go buy some fancy software. I just was hammering the phones, trying to book appointments and, you know, to be. I wish I could tell you I was good. I was absolutely terrible. For anybody that knows my wife, like those first six months where I was just hammering the phones, like, I'd be on the phone Prospecting from like 7:45 to like 8:45, 9:45 in the morning, hit it again around lunchtime for an hour, and then again the evening from like 5:45 to like 7. And. And I was doing that seven days a week. And like, I'd be lucky to book maybe one face to face appointment with somebody about buying or selling a house. Like sometimes two a week maybe if I was lucky. And you know, I mean, you know, that's. I don't know, I put like 30, 40 hours in doing that seven days a week, right? And you know, my wife would make fun, who was my girlfriend at the time, but my wife would make fun of me, telling me how terrible I was on the phone. She's like, you gotta stand up, sound more excited, you know, she's like, she always tells a story about this lady and this woman on the phone had just lost her husband and she's telling me, you know, she needs to get the house sold. And like, in my head I'm just like, oh man, this is somebody that needs to just. They're in a must sell situation. This is a great lead. And like, I'm not even, you know, there's like no empathy in my voice. And I'm just like, okay, great. You know, I literally say, okay, great, Let me help you get this place sold. When can I meet with you? Do mornings or afternoons work better? And my wife is just like, God, you sound like such an asshole on the Phone, like, how. Why would anybody ever want to meet you? And so anyways, I, you know, it was, you know, about six months in, I wasn't, I was still super broke. I mean, I owed so many people, so many, so much money. And I was like, man, I gotta figure out how to make money faster. And so I got a sales coach to help me with prospecting and just like, knowing what to say on the phone, like, what to say on the phone, how to say it, like, you know, like, so anybody that's watching this, all you inside sales hustlers out there, you guys all know about like, you know, your cadence and your tonality and all these things. And so I started getting coaching and like, literally everything started changing. Like my results, results on a weekly basis grew like 300%, 400%. I started booking instead of one appointment a week, I started booking four or five appointments a week. And it got to a point where I was so busy servicing the customer, I couldn't actually be disciplined enough to allocate enough time to continue prospecting. So I hired the very first person to take over that role of inside sales and prospecting and booking appointments for me. And man, that took things to the next level because then my productivity grew another 300 to 400, 100%. And so, you know, I, I think, you know, for everybody that a lot of people that are watching this podcast and listening to you guys, you know, I think the, the key thing, like most of, most of us as entrepreneurs, like, I wish somebody would have gone back in time and told me is like, you know, a lot of people talk shit about the corporate ladder, but there kind of is a ladder in entrepreneurship and it's, and it is just like the corporate ladder, it's very skills based. So like, for example, you know, I always say, like to our, the guys on our sales team that are younger, there's like three basic dominoes you gotta knock down and it's all skills based. It's all based off like experience and just doing it. It doesn't matter if you suck at sales. Like, you can figure this shit out, but you gotta, you gotta put in the work and just do it over and over and over. Be coachable, open minded, take what you learn and put into practice. And so that first domino is inside sales and something, I mean, something crazy about inside sales. Like if you, I heard if you go on LinkedIn and you look up how many people have in their job title inside sales, there's more people with the job title that they're an inside sales associate at a company than there are real estate agents. And so, like, that, you know, like, people literally have, like, inside sales as a career their whole life. And so if you're an entrepreneur, you're trying to build a business, like, you got to know how to have influence on the phone, like, and book an appointment to get face to face with people. And that is a skill. And literally, people spend their entire career just focus on that one skill. And so that's kind of like the first domino you got to learn is. Is phone sales. Like, what to say on the phone. Like, how to, you know, prevent the marbles from coming in your mouth because you don't know how to overcome some objection. You know, you know how to, you know when to sound excitable and then when to sound, like, empathetic. Like, the story I was telling you earlier about this lady who lost her husband and, like, you know, had no empathy in my voice. Like, I wasn't listening to, like, what was going on with her. I was only thinking about the result I was seeking versus, like, being a little bit more, you know, present in the moment. Listen to what she was going through and trying to build some rapport with her over the phone. So inside sales, first key domino you got to knock down as an entrepreneur, and then the. The second key domino is outside sales. Like I've always said, the bridge to riches in real estate is learning how to convert complete strangers into clients. Like, there are these people in real estate. They've been doing it for, like, 20, 30 years. And if you're a young person, like, you don't want to wait 20 to 30 years to be rich. Like, I would rather be the reverse. Like, I'd rather just be poor in a nursing home and then be rich when I'm young, you know? Yep. So out, like in outside sales, man, if you can learn how to meet a complete stranger and build rapport with them, you know, whatever it is you're selling or whatever it is you're doing, come from a place where you can educate them and establish yourself as an expert expert. And then third, differentiate yourself, like, whatever the value it is you're doing and, like, how that can help them. Like, you knock that down. Like, then you can go to the home plate and close the deal. So that's like, that's outside sales. And then I'd say the third, you know, the third domino. And this may sound, you know, like it's not in the correct order, but it's actually, I think, contrarian to what most people might Think. But the third domino is subject matter expertise. And so what's crazy is like, you know, you think, you know, you've got a, the first base. You think like, oh man, I got to be a subject matter expert before I go try to book an appointment or before I go try to meet somebody face to face. And it's the complete opposite. Like, you're not going to develop subject matter expertise. You're not going to do enough deals until you've learned how to get in front of people and you actually start doing transactions. And I think that holds true for any business. And it's so counterintuitive that, you know, I mean, if you, I mean, think about like our, our school system, like you go to school to be a doctor or an attorney or whatever, and like you're just studying textbooks for years and years and years before you go start working out, you know, in the field with customers. But for business owners, it's like you need to do the complete opposite. Like, you need to understand what is it, what is it that people want, you know, and then like once you understand where the demand is in the market, what it is people want, then you can, you know, as you do transactions, you can start like incrementally adding more value to the transaction to like help differentiate yourself. And then, and then, you know, inadvertently as doing more deals, you become a subject matter expert as time goes on.
- [12:17]
James
He just gave you all the millionaire blueprint right in the intro right there.
- [12:20]
Josh
That was.
- [12:23]
James
On a long tangent.
- [12:23]
Josh
No, that was great.
- [12:24]
James
That was great. I got to ask you though, I want to go back to 2009 real quick. You know, you put all your money into a bar restaurant, right?
- [12:31]
Chris Waters
Disaster.
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James
It goes to zero. Eviction notice on the door.
- [12:34]
Chris Waters
Yeah. Chains on the freaking door, dude.
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James
You hit rock bottom. You hit rock bottom.
- [12:37]
Chris Waters
I give you the names of the people in Austin.
- [12:39]
James
Fast.
- [12:40]
Chris Waters
Put the chains on the door.
- [12:41]
James
Fast forward to now. You built this multi nine figure business. You've generated hundreds and hundreds of millions of dollars throughout your career. Do you think it was necessary for you, looking back to hit rock bottom? And even for entrepreneurs now, is it almost necessary that they kind of have to at some point go through a season of that, you know, immense adversity and failure to kind of shape them into really finding that success?
- [13:03]
Chris Waters
Yeah. So, man, I. It's funny you mentioned this. So the first year I paid taxes on a million bucks in net income. I think like six months later I went out and bought an Audi R8. So this is like five years after Ironman came out, right? And I was so obsessed with this car. Like, I saw Iron Man. I think it was, like, 2009. And, like, I used to. I would look at the car online all the time, and I was like, man, this car's so awesome. I'm gonna get this car one day. And. And so I buy this car in 2014, and, like, I felt like I started losing my edge. Like, I don't know. It's. It's this. It's this weird headspace where, you know, you're like, you know, you feel like you've kind of made it. You know, for anybody that's a Tony Robbins fan, you know, he talks a lot about how, like, you know, once you set a goal and hit it, you need to really quickly go figure out what you're going to do next, because, like, you can go into this very negative, you know, headspace.
- [14:05]
James
Comfortable.
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Chris Waters
Yeah, you get comfortable. I think I also heard Tony Robbins say, you know, people derive happiness a lot through forward progress. So, like, for example, you know, if you're in your marriage, relationship, your family, like, your career, your physical fitness, like, you know, if you're going, you know, backwards, like, you're going to get depressed, you know, you start gaining weight and getting fat, like, you're going to start feeling pretty shitty about yourself, you know, but you start working out, you're going to start feeling good about yourself. So it's like through forward progress, we find happiness. And so in 2014, like, I was like, you know, I was like, man, I did it. And, like, I started getting really comfortable. And. And. And so in that year, you know, here goes my ego again, like, rearing its head. Like, when I graduated college and I started investing in all these different ventures, and I got spread way too thin. Like, I wasn't focused, I wasn't disciplined, and, you know, it ultimately, you know, if I could have gone back in time, I could have grown a lot more in those years if I had been more focused and more disciplined. But my ego got in the way. And so I think one of the biggest, you know, things is you. You almost got to be, like, sadistic about it, where you're like, I want to struggle. Like, I want to find a way to make myself struggle.
- [15:22]
Josh
It's interesting because I feel like even. Even us, as we're going right now through our career, is the journey is you got to be grateful for the journey, because, you know, it's like that. You look at the lottery winners, right? You give a lottery winner all these, all a lot of the times they blow it all and they lose it, it's because they're not the person that they need to be to be able to actually hold and distribute that money and be actually, you know, make something of it.
- [15:44]
Chris Waters
Yeah.
- [15:45]
Josh
But I want to go back to the beginning of your journey, the early 2000s. You're starting the lawn mowing company. And first of all, what inspired you to actually do that? And at what point was it like, hey, I think I actually want to pursue entrepreneurship in the future?
- [15:58]
Chris Waters
Yeah. So kind of an interesting story about me, and I got to give mad props to my mom for this. When I was, like, 12 old, I was into all these activities, and it was just my mom and my brother and I. And my mom was like, she worked in the emergency room as a nurse. She couldn't pay for me to be in all these crazy activities. And she's like, chris, you need to go make some money to pay for some of this stuff. And so I'm literally 12 years old. I'm in the fifth grade. And so my mom went to a print shop, and she got a bunch of door hangers, and her and my brother started passing out door hangers for. It was called CJ's Lawn Service because I recruited one of the kids in my neighborhood to help me mow lawn months. And so, like, it was really fascinating to me that she passed out door hangers and people called, and, like, there was just something about the marketing side of that that was kind of fascinating. You put a door hanger out there and, like, boom, your phone rings, and all of a sudden you get a sale. Granted, my sale was 25 bucks after mowing the yard, but I found that really interesting. And I liked working for myself and, you know, setting my own, you know, schedule, rules, whatever. And, you know, I. I went and got a regular, you know, job in high school working at Circu City. And probably a lot of people listening to this podcast or show, you know, they don't really remember Circuit City, but when I went to go work for Circuit City, you know, one of the benefits of working at Circuit City was you got 50, 60, 70% off car audio equipment. And so this is. I'm in high school. This is like, 1998, 1999. Well, in the late 90s is when eBay.com launched. And so, you know, I. At the time, I didn't realize I was doing anything wrong, but I would buy car audio equipment from Circuit City, and then at the 60, 70% off, and I put on ebay and sell it just flipping. And so like, you know, I just thought that was a perk of working there. And then one day I got called into the office with the store manager and, you know, like, it was the most. They tried to make it this like, incredibly intimidating type of environment. Like they were trying to figure out where I was getting the money to buy all this stuff. Like there was some like, interrogator on the phone, and, you know, the guy's sitting across from me, the interrogator from their corporate office is on the phone, and they like, pull up a screen of all my employee purchases and it's like page after page after page of car audio equipment. And so I was like, yeah, I'm just, you know, I wanted to take advantage of my employee discount and I'm buying some stuff to, you know, resell. And they're like, you know, that's a, a violation of our policy and procedures manual. And I was like, well, it doesn't say anything in there that, about, like, ebay. I don't see anything on there that says, I can't sell this on ebay. And so anyways, they created a new policy after they fired me in that moment, and they sent out this, like, company wide, you know, whatever memo saying, you know, tell your employees they can't do this. And so, you know, that, that happened. And then the lawn mowing business thing happened. And then when I, when I went, when I went into college, my freshman year of college, I moved to upstate New York and my uncle bought this franchise. And like, when I was graduating high school, you know, I was like thinking to myself, I'm like, man, I need to learn as much about business as possible. I was really interested in what happened with my little lawn mowing business. And I kind of liked how I was able to buy stuff from Circus City and resell it, you know. And so I went to upstate New York, kind of learned like the, like how, you know, what they tell a franchisee to do with their playbook to build the business. So I learned a tremendous amount through that. And when I was in upstate New York, I froze my ass off. So, like in Texas, right, It's like our winters are pretty mild. They got like 120 inches of snow the year I was in New York. And I was completely miserable. And I was like, I want to go home. But the problem was, like, I couldn't go home unless I was going to go take out a loan for college, you know, for school. And I needed to figure out a way to pay for school and so I was like, man, I'm gonna. I'm gonna go put out door hangers. Like, when I was 12 years old, when my mom put out all these door hangers. So I'd saved some money that freshman year helping my uncle, and when I came back to Texas, I just started passing out door hangers like crazy and started building the lawn mowing business that way. So that's kind of. I mean, it all. You know, I think it probably. It is probably just my personality type that I think. I mean, for anybody watching y' all show, like, you know, I think entrepreneurship, like, either, like, it's a. It's, like, in your DNA or it's not. Like, I. You know, over the last 10 years, like, a lot of people want to be an entrepreneur, but I actually think a very small percentage of people actually are. I think more people are, like, intrapreneurs. But, like, you almost got to be sadistic to be, you know, in a headspace where you're willing to bet it all and eat shit and grind until you find a way to be successful.
- [20:50]
James
It's like, I always talk about, like, the most successful people. Like, they lost their mind a little bit to whatever that they were working on. When, you know, Bill Gates was building Microsoft or Mark Zuckerberg was putting. Was building Facebook in general, they kind of had to lose their minds a little bit. I wanted to ask you, though, about the importance of focus and becoming an expert on this one particular industry in real estate. Because you brought up. You got to a point you were making some good money, and you started to diversify and throw your money to different places.
- [21:15]
Chris Waters
Yeah.
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James
How important was it, though, to really become an expert and solely focus on real estate and that leading to you building this massive company?
- [21:22]
Chris Waters
So I was listening to, I think, a Tim Ferriss podcast or some kind of video thing he did where he's, like, touring his house, and he was showing off his bookshelf at his house in San Francisco, and he pulled out this book, and it's called the Magic of Thinking Big. And so I think the problem, like, we all have as entrepreneurs is we kind of hit what we think in our head is the proverbial ceiling, and we stopped thinking creatively about how to push the business to the next level. So I think when. When. When that happens, when you have, as an entrepreneur, feel like you push this to the edge, that's when you go and get distracted, because, like, if you actually stayed focused on your core business and kept thinking creatively about how to keep pushing it to the next level. You would, you would continue to grow by leaps and bounds versus getting distracted and started starting a bunch of other little ventures. Yeah.
- [22:18]
Josh
Something that we talked about in a previous conversation is the importance of coaches. And you actually even mentioned it. You got, you got a sales coach. She's like, look, it's clearly just I'm not getting the results that I want. And as someone who sold, you know, hundreds of millions of dollars in real estate last year alone, do you still have coaches today? And what, what is, what would you recommend to people who are maybe struggling along their journey in that thought process of getting coaches?
- [22:43]
Chris Waters
Man. So that year I was telling you about, when I got the Audi R8, I didn't have a coach that year and I got so distracted, I didn't have some accountability partner, somebody to kind of review all my decisions with. And basically 18 months after buying that Audi R8, I got another coach because I got spread way too thin. The wheels started falling off on all the ventures. And so today, 2024, I mean, literally 10 years since I bought that car. It's crazy to think. Ten years. Holy shit. Damn, man. It feels like I was in Yalls shoes just yesterday. Yeah. So today I have more. I have more than one coach. I have multiple. So I have, I have a. I have like a CEO advisor, I have a financial advisor, financial coach. Somebody that really helps me understand the implications of my decisions. So as your business grows, it costs money and you need to be able to forecast what are those initiatives going to cost and when are you going to start to see the return of it and how deep are you going to have to go. One of the things that's a mental mind, I'm not gonna swear and say that. I'll keep it pg. One of those things that's just like really messes with your head is when you don't expect, for example, your savings account to just crash and burn. And so when you launch some new initiative, when you get, for example, somebody that's on the CFO side, they kind of help you see how the next six to 12 months are going to play out from a very specific decision you're going to make. And so, you know, going adv, you know, going in advance, when you make that decision that, you know, your balance sheet, you know, your cash reserves are going to go down. And like, you just, you have to know, like, okay, this is the plan. This is meant to happen. And so for, you know, a lot of high driver personalities, including myself, like the balance sheet, you know, your the cash in the bank, like it's your scorecard, you know, and so when you see your, you know, your scorecard going down, you're like, oh, shit. You know, and so then you start making dumb decisions. So I think the, like my financial coach slash kind of CFO advisor, that guy's incredible. You know, he's, you know, like most financial people are more conservative. Like they expect things not to go as well as you do as an entrepreneur. Like, if you're an entrepreneur, you're probably very optimistic. And so you kind of need somebody to be your devil's advocate all the time, like challenging what you, what you think is going to work out, you know. And so that's one of mine. So CEO advisor, somebody on the CFO advisor side. I have a marketing advisor and I don't have a, I don't have a physical coach right now helping me on the fitness side, but I need to get one. Man.
- [25:45]
James
I got you.
- [25:45]
Chris Waters
Yeah.
- [25:46]
James
So I gotta ask you this. First of all, I just wanted to. I love how you brought up kind of having that person who plays a little bit of like devil's advocate because we're big on not having yes man. You can't have yes man.
- [25:54]
Chris Waters
Yeah.
- [25:55]
James
I wanted to go back to again, that last interview that we did, that did multiple millions of views on all platforms. You brought up how one time you were watching Shark Tank and you heard Daymond John say this quote, pioneers get slaughtered, but settlers prosper. And the reason why I think that that resonates with me and I think so many people and why it's important is because if you go out to even like Lake Travis, right, where there's people that own 25, 30 million dollar houses, even more. You go and talk to a lot of the people on those lakes and it's actually they built an H Vac company or a plumbing business and unsexy businesses, whereas people have this thought that they have to build the next Google or the next big tech company. But what would you say really is the kind of, if you could break that qu down, like, kind of how you did and what exactly it means as far as not necessarily trying to reinvent the wheel in business?
- [26:45]
Chris Waters
I mean, I think the thing, like if there's a theme of something I feel like I keep repeating myself on is how important it is to stay humble. And so I think when you're a high driver personality, you know, you have like really high expectations of yourself. Your standards are high. You want a lot, you want a lot out of life. You want to suck all the juice life can give you. You know, like experience everything. You know, the challenge is, you know, like, it's a double edged sword. You want all those things because you have a little bit of an ego. But if you're going to get all those things, like, you need to be humble because you need to learn from other people. And so, you know, it's like when every time I, every time I struggled was when, you know, I wasn't going to somebody else that had already figured it out. And so like, you know, the real estate industry has been around forever. The national association of Realtors was formed in 1908. And so, you know, in, in my, like in my 20s when I got into real estate, like I was like, oh man, I'm gonna go compete with Zillow and I'm gonna go beat all these big national companies. And I'm like a kid on this red IKEA couch. And so I'm like doing all these things, I'm working really hard, but I'm not getting anywhere. And it's because I'm like, like trying to think how am I going to outdo one of these big national companies that's publicly traded. And you know, for me, in real estate, like, it's an industry that's been around for a long time. National association of Realtors, 1908. And think about it, there's probably been, if I were to ask you guys, do you think there's been some people that have found success in this industry before me? You'd probably say yes. And so it's like, you know, again, I'm coming back to Tony Robbins a lot. Not intention. I do love Tony Robbins. But to, you know, something, you know, Tony Robbins talks a lot about is like, go build your. Go build a. Go model somebody else's business that's like in your industry and like get your foundation solid and get revenue coming in and then use your discretionary income to reinvest into the business and try to implement some of those creative ideas. Another I think something else I've learned as it relates to pioneers get slaughtered and settlers prosper is as a pioneer, most entrepreneurs, you go all in on some idea and you go all in big. Like that bar and restaurant I told you guys about in 2009. I put every dollar to my name into that business. And so you can test ideas on a much more smaller scale without going bro. So, you know, like, you know, I can't really think on the spot about the bar and restaurant business, but you know, you know, like for example, if you want to open up a restaurant, like, instead of going and spending a couple hundred grand to build out a restaurant, go start a food truck, right? Or go start selling food, like to the convenience store and they. The convenience store resells it for you. Like, go make sure there's demand out there for whatever it is you're trying to sell. So, man, humility goes so far and it is so hard for an entrepreneur to stay humble.
- [29:58]
Josh
I mean, I feel like we had a similar experience within ourselves is we, you know, we're a content company at the heart. But, you know, a year and a half ago, we wanted to try to become an E commerce company, but it didn't end up working, right? It didn't end up working how we wanted it to. And there was a lot of lessons in that. And one, it was focus and really just continue to double down on what you're good at. But also it's the up. The lesson of you can't be emotional. You can't make emotional decisions. And I feel like right now, you know, within your career, you know, if you're, you're playing with, with lots of money, right? So you win big, but you can also lose really big as well. So if you have a scenario or a story of last year of just adversity and how you kind of overcome that, if you could share that, I'd be. I'd love that.
- [30:44]
Chris Waters
Yeah. So, I mean, like, for, for anybody that's listening to this, as of January 2024, right, like, the data just came out for 2023, and home sales this, this past year were lower than they were in 2008. Let that digest for a minute. Like Bear Stearns, all these companies crashing and burning. The mortgage crisis. The mortgage that the movie they made about mortgages, The Big Short, right? The Dow Jones down to 5,000. Right. Last year, home sales across the US on a transactional basis were less than they were in 2008. So in my world, on the real estate brokerage side, we have been getting our ass kicked for the last 18 months. And the last 18 months have been us eating a lot of humble pie, for sure. So the reminder I'm getting over the past 18 months is, number one, stay focused, stay disciplined. And three, test on a really small scale. Like, you know, we would, you know, when we, we would test some various things and, you know, drop half a million bucks or a million bucks, and I could have done something on a much smaller scale and test and spent maybe like 50 grand. So it's kind of interesting. Like, you know, even, you know, you guys interviewed Mark Cuban, Grant Cardone. Like, even if you have billions of dollars, you shouldn't go out and drop, you know, $10 million or $100 million on testing an idea. In the, in the, in the software technology world, they have something called, you know, we need to develop an mvp, a minimal viable product. And it's like the bare bones thing to try to get it off the ground and share with people and see if it actually creates value and if it's actually going to, you know, if there's going to be demand for it in the, in the marketplace. And so, you know, I think the, I think one of the biggest challenges I had when I was young and I think a lot of people have when they're young is like, you don't think you have the resources to be able to pull off what you want to do, but actually if, if you're in that headspace, it's not that you don't have the resources, it's that you're not being resourceful enough because you really don't need that much money to go test some idea. And then as you increase your revenue again, like I said, you can incrementally put it back in the business and grow. Right. And if you continue to validate and grow revenue, then you have more confidence to continue to invest more and more into it and shoot. If you have consistent success, finding money will not be difficult. Shit. Go ahead up, go hit up Grant Cardone or one of these VC groups. They'll throw money at you if you're showing a proven track record to be able to grow your revenue.
- [33:42]
James
We don't lack resources, we lack resourcefulness.
- [33:44]
Chris Waters
Yeah.
- [33:44]
James
So let me ask you this then, because obviously a massive component of the real estate business is sales. Right. And you talked about the inner out of sales component of those being two of the most important skills to kind of master as an entrepreneur. But I wanted to ask you though, personally, like, how important was it for you to not just learn how to, to sell real estate exceptionally well, but being able to sell yourself? Because you brought up Mark Cuban, Grant Cardone guys who have been able to raise hundreds, you know, billions, hundreds of millions, billions of dollars. Right. But they are extremely good at being able to sell themselves. How important has that skill been for you to master when it comes to being able to raise money, close massive deals? And just in general in business.
- [34:23]
Chris Waters
I, you know, it's interesting. I don't really feel like I'm selling myself when I'm Going to do a deal. I think what happens is, like, as your skills get better, you know, your confidence grows. And like, you know, people are just. People are buying into your. Your confidence, and that confidence comes from doing it over and over and over again. I mean, the other thing that. That obviously happens as you do things more and more and more, like, you learn, you know, how to do something better. So your question is. Your question was about how do I sell?
- [35:06]
James
Yeah, like, just the importance of, like, being able to sell yourself when building a network or closing deals in general.
- [35:13]
Chris Waters
Man, I don't know. I think selling yourself is. Is fairly easy, you know, like, if you're. If you're a hungry, driven, excited person, like, people pick up on that, you know, like, that's easy to sell. Like, be, you know, be one of those people that's got energy when they're talking about something. Man, you may not even know what the hell you're talking about, but if you're excited about something, like, other successful people pick up on that. You know, when I think about, like, the. The first, like, you know, I don't know, couple dozen appointments I went on to meet people about selling their home. Like, half the time they hired me was because they said they were like, man, you're the most. No one else came in this house as excited as you to sell my home, and that's why I hired you. So I. I mean, like, I think that the energy and excitement and that hunger, especially early in your career, can go so far. Like, you may not know what the hell you're doing. Like, shit, you may screw up, you may price that house way too high. But, like, you know, you walk into there and you're excited, you know, people want to. People want to be around that, you know, like, they. They want to be around people that are excitable and are results driven. And so, man, I don't know, I feel like that's like the foundation of selling yourself, you know? And so I guess the root of selling yourself is like, whatever it is you're selling, you better be passionate about it.
- [36:42]
James
So it seems like, like you said, you know, you got to be competent, but you also kind of have to be obsessed a little bit.
- [36:46]
Chris Waters
It.
- [36:46]
James
It's kind of like what you're saying, like, you were just about real estate.
- [36:48]
Chris Waters
Yeah, man, I. Yeah, you do. You gotta, you know, you gotta be obsessed. God, I feel like, you know, who is it that J. Who was it there was like this. This. This show series. Who was it? Like, this rapper put on and he's like taking people, trying to help them, like have successful careers. I wasn't. I don't think it was Jay Z. Maybe it was P. Diddy or something. Does he have a new name nowadays?
- [37:14]
Josh
I'm not sure.
- [37:15]
Chris Waters
I'm so behind on pop culture anyways. I remember seeing a little clip for some reason and it just caught my attention. And P. Diddy's like, if you want to attain these really high levels of success and you want to follow in the footsteps of these giants, if you think you're going to become a giant in this industry by working 8 to 5, you're fucking. You don't know what the hell. You might as well go get an 8 to 5 job because you're not going to find success. So are y' all gonna edit this? I don't wanna drop F bombs and get in trouble.
- [37:47]
Josh
You can be. You can say whatever you want.
- [37:49]
Chris Waters
Yeah.
- [37:50]
Josh
So in 2009, I don't want my.
- [37:52]
Chris Waters
Mom to hear this, and my mom's.
- [37:54]
Josh
Like, in 2009, you're broke.
- [37:57]
Chris Waters
Yeah.
- [37:58]
Josh
2010, you start your own venture within real estate.
- [38:01]
Chris Waters
Yep.
- [38:02]
Josh
By 2015, you're expanding to other cities across Texas.
- [38:06]
Chris Waters
Yep.
- [38:07]
Josh
And earlier we were talking about how just like there's a corporate ladder, there's also an entrepreneurial ladder where you gotta learn a variety of different skills as well as just self develop as a person and become that person that can actually is possible of achieving those things. So what would you say allowed you from 2010 to 2015 to actually not only grow your company, but what skills did you also learn along the way?
- [38:29]
Chris Waters
Yeah, so great question. So there's the inside sales piece, the outside sales piece, subject matter expertise. That's kind of like the basics. Then there's like, how do you actually grow and scale a business? And. And dude, that is hard. You know, like, that's super hard. Like you, you know, kind of the elementary level, if you will, is like learning how to lead your customer to success, but then like to scale the business. It's like you gotta be a leader of leaders, and that's hard. Like, how do you help other people follow in your footsteps and not, you know, take these detours like I did, you know, like, how do I keep other leaders from going and like getting distracted by all these other ventures? And so that's, man, that's. That's the key thing that I started picking up on in 2014 and 2015. I think as you, as you grow your business, you know, you think you're going to go out there and find A lot of other people like yourself and anybody that's watching this that's like, you know, works their face off and is out there hustling and grinding and being resourceful and persevering and all those things. Like, you know, once you start finding success, you think anybody can do it, but you know, I'm going to toot a lot of people's egos out there real quick. But like, you're, you're a unicorn. There's not a lot of people that, that can do that. And so, you know, you, I think you also have to learn that like a lot of people that are going to join your organization are, are not going to be unicorns and your organization is going to be made up of utility players. And so you just need to find enough unicorns to lead the army of utility players. And then it's just, you know, it's about, you know, having like a clear strategy and breaking down like your quarterly tactical operating priorities quarter by quarter, and then holding your people accountable to that. Making sure that, you know, your key leaders are just like we've talked about, coachable, resourceful, you know, they execute and, you know, making sure they're following that plan to get where you want to go.
- [40:39]
James
I wanted to ask you because I saw a statistic the other day that was talking about how it's like the top 5 or 10% of real estate agents make like 90 something percent of the money that's made in real estate. What is it that separates people that are in the top 5 or 10%? As far as real estate agents, I'm sure that you've overseen, you worked with some of the best agents. I mean, you've obviously sold hundreds of millions of dollars. What is it that separates people and keeps them in that top 5 or 10%?
- [41:04]
Chris Waters
Man, I'll give you all a staggering statistic. Somebody told me based off last year's data, actually the last couple years of data, is a homeowner, when they're thinking about selling their house, there's a 98% chance that the realtor that walks in that door is not a market expert. And so like, I would define a market expert as somebody that's closing at least a deal and a half, two deals a month, like, that's pretty, you know, low bar. But if you're doing one and a half to two deals a month, like, you know, you're showing properties, you kind of understand what's out there for sale. You understand, you know, granular level, the mortgage process and working with title companies and all the paperwork. And so 98% of real estate agents out there close less than 1.5 homes per month. And so think about it. You're a homeowner, right? And you got to sell your biggest asset. And 98% of the workforce is not a market expert. That's pretty mind boggling. So I try to think like, you know, what is it that is causing so many people to have such a hard time, you know, hitting this like minimal baseline Number of sales, 1.5 to two homes a month, which is like 18 to 24 deals a year, which is like not a lot. I mean, it's, I guess for, for the industry at this level, it. People consider it to be a lot. But what's like, what's so hard? And so when I kind of reflect back on like the last couple years, I've sent out lots of surveys to our team, like the agents within our company. And I ask them, what's the one thing you hate the most in the survey? And I always get the same response. Like, literally 99% of the agents in our company say the same thing. They all say they hate prospecting on the phone. It's the one daunting task that they absolutely hate. Like if somebody calls them, they'll talk their ear off. Right. But like they don't want to pick up the phone and call a stranger. Also, they don't, you know, want to go on and you know, they don't want to go on an appointment with somebody that doesn't know them unless it's a pre vetted appointment and it's somebody that like actually wants to meet them because they're scared. Interesting. But the number one reason is they don't want to pick up the phone and call someone that doesn't know who they are. Wow. It's the number one most. And that's like in my company. And I think if there's agents watching this right now, they should should, you know, comment. Right. Like, would you agree with that? Because every time I interview agents and ask them, what's the one thing you hate? That's it.
- [43:48]
Josh
What do you think that stems from? You know, I find that interesting because that's also how you got your start. You know, you literally, you couldn't afford a software or anything like that. You had to pick up the phone.
- [43:57]
Chris Waters
I had no choice. Yeah.
- [43:58]
Josh
So what do you like, what do you think that kind of stems from now where, you know, the agents are probably doing, you know, decent for themselves. You know, they probably can't afford some of those softwares to where they just like, they just don't want to pick up the phone.
- [44:11]
Chris Waters
Yeah. So I think a lot of people get into real estate because the idea of like meeting face people face to face sounds fun. Showing houses sounds fun. There's this idea that, you know, your schedule can be flexible. And so there's a lot of misconceptions about the business. And the agents that are really successful early in their career, they do not expect to have a flexible schedule. They don't expect that they're going to spend all of their time showing houses. The people that come in the industry that are really successful expect to spend their time on the phone booking prospective appointments and building their pipeline of prospective appointments to meet face to face. I think that's ultimately one of the biggest reasons why the, the statistics are what they are, because there are so many misconceptions about how you find success in this industry. Now there are different business models out there. And so, for example, in our company, we took that information when we surveyed all of our agents and they said they hate calling. We took all that information and we're like, all right, we're going to completely eliminate that from your job description. And our agents don't have to prospect at all. They literally don't have to pick up the phone and call someone they don't know. So we have an inside sales team member. I said on LinkedIn, you can look on LinkedIn, there's more people with the job title as an inside sales associate than Realtors. Well, we started building an inside sales team. They book all of the appointments for agents. So our agents get to spend all their time meeting people face to face, spend all their time showing houses, and then they don't have to worry about, about picking up the phone, that's great. And so that's ultimately what's helped drive a lot of the success is okay, if the real estate industry is set up in this way where people get into it because they see the million dollar real estate agent or whatever that show is in New York or whatever, and they think it's all about, you know, showing properties and they don't see the behind the scenes, behind the scenes stuff. And they come in with misconceptions. If that's the deal, like, you know, that's something I can't change. Like, you know, like I can't change that. You know, I can't change. You know, there's what, 300 million people in America, like, if the, if the general consensus is that's what you do as an agent is show properties and meet people face to face. And it's not that you put all this effort and time into like building your pipeline from an inside sales perspective. If I can't change that, well, then based off the workforce and what they want to do, I need to come to them, if that makes sense. Yeah. And so kind of my value to recruiting agents is I'm going to spend the money on marketing to generate the prospects, and then our team is going to book the appointments. So all you have to focus on is mastering outside sales. And so my agents aren't like the, the, the, my agents in my company, they're not entrepreneurs. And like I tell people, if you want to be an entrepreneur and start your own business, like, you probably shouldn't come work for me. Like, if you want to be a salesperson and like specifically an outside salesperson, which, by the way, that's a whole nother job title. Right. Like you look at Fortune 500 companies, you looked on LinkedIn like, there's a clear division between inside sales and outside sales. And so when I hire a salesperson, that's what they're. I'm gonna have them focus on is mastering outside sales. And then I'll have, I'll have inside salespeople that book the appointments for them. And this is where the difference lies between agents and entrepreneurs. As an entrepreneur, you gotta learn all this shit. Like you gotta learn how to be the inside salesperson, you gotta learn outside sales, you gotta learn subject matter expertise, and then you gotta teach other people to follow in your footsteps.
- [47:50]
Josh
What I'm starting to realize here is exactly what you were talking about earlier. How you have, have, you know, the utility players and you got the unicorns, is you just have subsets of people in different roles to pretty much allow them to just be really great at what they're doing. So that way you don't have to learn three different skills. It's like, hey, just learn this and be the best at it. You can be. And at what point did that kind of, kind of hit you? Of like, look, like we, if we, if we want to become the best and the biggest brokerage we can be, we need to have people just focus on really one role at a time.
- [48:23]
Chris Waters
So, you know, I read this book, my mom bought me this book when I graduated college, and it was written by Gary Keller. It was called the Millionaire Real Estate Agent. And so this concept of specialists was something they talked a lot about in the book, but something I've actually learned, you know, as We've obviously we've gone way beyond a business doing seven figures a year. Something I've learned is like the thing that every Inc 500 company has in common is the whole company is made up of an army of specialists. An Inc 500 companies does not develop because you have one person doing 10 different job titles. A company becomes an Inc. 500 because you got an army of people that specialize in something very specific. So I think this again is like another challenge for anybody that's an entrepreneur is like you have to learn enough of these specific skills to build your business. And then you got to learn when you need to go hire somebody and delegate those things to somebody else that's going to spend eight hours of their day just on that one specific thing. And then you got to be willing to give up the control. You know, like, they may fail, they may succeed. Like, you got to take the risk. Like, you know, and then, man, another man, another huge aha. I've had is I think a lot of us as entrepreneurs, the thing, the biggest mistake we make is we don't come from a mindset of abundance when it comes to recruiting people to join our teams and our organizations. So I read this book somebody turned me on to, written by a guy named George Anders called the Rare Find. And this guy, this author goes into all these organizations to try to understand what makes them so successful. He went into this like elite level investment banking company. He went and sat in the jungle in a tree, like overseeing special forces. He went into an organization called Teach for America, which is ranked by Forbes as one of the hardest companies to get a job at. And it's a non profit where you don't get paid diddly. So the one thing like, like all these companies have in common is if you think about their recruiting efforts, it's kind of like a funnel. Like, think like everybody's probably watched on the Discovery Channel, you know, the Navy seals and they have thousands of people apply, but then only a hundred guys show up for BUDS training, right? And then out of those a hundred guys, like maybe 20 of them make it. So like, you know, when you start out with a funnel that big at the top, at the bottom, yeah, you're going to end up with a cream of the crop. And so I think, I think another huge aha I had back in 2012 and 2013 was I needed to come from a mindset of abundance when I was selecting the people to join my team. Because like when you're, you know, when you're, when you're spread super thin as an entrepreneur and you're wearing like 10 different hats and it's painful and you're working 18, 19 hours a day. Like you just need somebody to like, you know, jump in and be a lifeline. And so like, you don't, you don't really spend enough time making sure you're finding the right person. And so you just get some Joe Schmo off the street to help you and then they don't actually help you take the business to the next level. So I, you know, there's this, there's this acronym I picked up in the real estate industry. And it kind of like ultimately like boils the job of a, you know, business leader into a couple letters. It's rstlm. It stands for Recruit, Select, Train, Lead and Motivate. And so, I mean we all know like high driver, kick ass people, like they don't need to be managed, right? They're going to be successful. And I'm sure you guys have heard of that Paretos principle, right? Like there's 20% of your actions that yield 80% of your results. And so it's like when you think about that acronym rstlm, which one of those things is what's going to drive your results? What would you guess? It's the same thing. All these like, organizations like the Navy seals, Teach for America.
- [52:29]
James
Could you give me the acronym one more time?
- [52:33]
Chris Waters
Rstlm.
- [52:34]
James
What does it stand for?
- [52:35]
Chris Waters
Select, Train, Lead and Motivate.
- [52:36]
Josh
Motivate.
- [52:37]
Chris Waters
Which one do you think is the most important?
- [52:39]
Josh
Motivate.
- [52:41]
James
No, I'll say Recruit.
- [52:45]
Chris Waters
The two letters would be R and S. If you really had to boil it down to one, it'd be the selection process. And so think about the Navy seals. Think about Teach for America. Think about companies like Goldman Sachs, like they have this massive barrier to entry to join the organization, right?
- [53:03]
Josh
Yes.
- [53:03]
Chris Waters
I mean, not only do you have to have this amazing pedigree, but then you have to go through all kinds of crazy shit for like three to six months. Yeah. There's a movie Will Smith, you know, was in. God, what was it called? Delivering Happiness.
- [53:20]
James
Pursuit of Happiness.
- [53:21]
Chris Waters
Pursuit of Happiness. Great movie.
- [53:23]
Josh
That's a top 10 movie, right, dude?
- [53:24]
Chris Waters
So in Pursuit of Happiness, think about it like on the first day he walks in for that class, right? They say, we are going to bring on board the person that has the number one number of sales and the number one Test score out of the 30 people in this class. If you build an army of people that have come from being Number one in their class. Like, you're gonna have a badass company. And so every single elite organization has these crazy barriers to entry. And so the thing that I learned from that book, the rare find is you gotta have some crazy barriers to entry. And the interview process. When you interview somebody to like, come work for you, the interview process is bullshit. Like, you know, everybody can fake it for an hour. And so what, like, come to learn that in the Navy and like the Navy SEALs, right? Like, yeah, they have some. I mean, I don't know, I'm not a Navy seal. I mean, there's lots of these guys talking on podcasts and stuff. But I'm sure there's some kind of like, interview process at the beginning. But the real interview process is when.
- [54:28]
James
You'Re like six month.
- [54:29]
Chris Waters
Yeah, you're like eating shit, you know, haven't eaten food for 24 hours, haven't slept. Like, that's the interview process. And so the more you can inject practical application into the job interview where you can actually observe them taking action, doing what it is they're going to do when they come to work for you, then you have a higher probability of finding someone that's going to be successful because you've already seen a little bit of how they're going to perform. So, for example, when we hire a sales personnel on the inside sales team, part of the interview process is they have to call and prospect with us. Like, we literally role play with them as part of the interview. And so the thing we learned about, like inside sales is when somebody calls to apply to work for us, we kind of like tee up this scenario. And like, the scenario we typically use is like, okay, here's a deal. You're calling a homeowner, their house has failed to sell. They hate realtors, hate them. They literally just spent the last six months on the market leaving their home every single weekend, letting people come into their house, picking up all their kids toys and all their shit all over the floor, right? Preparing for the showing. And they haven't sold their house. And they literally despise real estate agents. And you're going to call them and try to book an appointment to earn their business. And so that's the setup for the role play. And so what we found is we go through this whole thing with them and we don't give them a lot of training. We just like, want to see how they do, like, what do they do to book the appointment. And what we kind of figured out is like, we get basically like three responses from People, when we do this, we get one person that'll get, like, diarrhea the mouth, just talking about how great they are and why they needed to come meet with them. And then we get another person that gets defensive. Like, I remember the first time I did this after reading that book 10 years ago, 11 years ago, I remember this Galaxy applied to join our team and she graduated from Pepperdine University. And she, you know, I mean, you guys probably know Pepperdine, man, That's like, you know, it's an amazing campus. Like, I think it's 100 grand a year to go to school there or something more.
- [56:40]
Josh
California. Yeah.
- [56:42]
Chris Waters
Well, so at. The way the role play works is, like, towards the end of it, we just completely shut the candidate down. Like, no matter how good they do, dude, they could have done a great job, but we just shut them down and we're like, you know what? I appreciate you, Colin, but I don't have any interest meeting with you. And I don't think you have what it takes to get our house sold. And that's how we finish everyone. And we just sit in silence waiting for a response. And so again, you might get somebody that gets diarrhea of the mouth and just starts talking about how great they are. And then you get somebody like this candidate that applied from Pepperdine and like, she got mad. She's like, do you know how hard it is to get into Pepperdine? Do you know what a mistake it is to not bring me on board, knowing what I had to go through to go to school there? Like, they just get pissed and defensive.
- [57:33]
Josh
I love that. I love it. Because you get to see a lot about a person when they fail. And it's almost like. It's like you don't really know someone until you travel with them.
- [57:42]
Chris Waters
Yeah.
- [57:43]
Josh
You know, and you don't really know someone until you see them blatantly just fail. And I'll tell you what, these are all things that we're going to be incorporating into our own hiring process going forward.
- [57:53]
Chris Waters
Yeah, well, so the third one, man, and this is like the. This is the money shot. This is the answer. This is like the one you want. This is the rare. Fine. You shut them down and they come back and they're like, okay, well, if you don't mind me asking, what is it you are looking for in the person you're going to hire? And they just come back with a question. Right. They don't hang up the phone, they don't shut down. They don't get diarrhea of the mouth. They don't get pissed off. Like, they just come back and ask that question. And so when you hire an inside salesperson, they're going to constantly face adversity every single day on the phone. And if you're giving that inside salesperson leads, like, well, if they shut down on the phone during the interview process, what do you think's gonna happen when you give them leads? What's gonna be their natural instinct? So, I mean, the more you can inject this practical application into the interview process, the higher the likelihood is you're going to find the right person. And it's the same thing all these elite level organizations do. And it's really, you know, it's really simplistic for us as entrepreneurs to put into place. And it doesn't have to be as crazy as Navy seals. And, you know, you don't have to spend six months testing them out. It could be something much simpler and it could be much faster. Wow.
- [59:03]
James
I wanted to kind of transition now a little bit more to, you know, the residential real estate game right now. And you, throughout your career, you've also bought and invested in a lot of real estate throughout your career. You know, how can someone, from your perspective on the residential real estate market right now over the next five years, like, what is that sector, whether it's a city, a facet of real estate that's going to make a lot of people successful, someone in their career right now they're starting to put a lot of money to the side. They're looking to start making some big plays in real estate. What, what advice would you give to them to really start creating wealth in residential real estate in today's world?
- [59:34]
Chris Waters
So I think the biggest opportunity is doing what are called subject to deals. So basically what's going on right now you have people with these really low interest rates on their, on their home loans, right? They like their interest rates like two and a half, 3%. And so, you know, if I had zero dollars to my name, what I would do is I would go and find people that need to sell their house, but they put a really small down payment down when they bought the house. They have a really low interest rate, but they don't have a lot of equity. And I would go to them and I'd tell them, look, I'm willing to take over the burden of the mortgage and take over those payments. I mean, they're not going to be able to sell the house because they don't have enough equity to cover the closing costs. And so I'll Take over the burden of the payments. And then you get a contract saying you have a deed to the property. You keep the mortgage in the homeowner's name, but you have the deed transferred to your name, and then you make the payments. And some of the things you can do in advance, like, because people watching this might be like, oh, shit, how am I going to cover the mortgage payment? You can actually start advertising the property for lease. You get permission from the seller, get written permission from the seller to advertise the property for lease to find a tenant, and then time the closing for the seller so that when they move out of the house and vacate it, have that timing sync up with when the tenant moves in. Wow.
- [61:02]
Josh
And so that way there's no loss of vacancy that you don't have to. You're not. You're not having to pay rent for free for a month or anything. It's just going right into it.
- [61:09]
Chris Waters
Yep. There's. And you have no cash in the deal. Right. And you're alleviating somebody else that couldn't sell their house otherwise because they don't have any equity, but they have a really low down payment. The other little variable, I wouldn't call this little. It's pretty important, is you need to make sure when you calculate what the monthly payment is on that house, like the taxes, the insurance, the mortgage, you gotta look at that cost relative to what the market rate is for a home in that area. So, for example, if the. They call it PITI, principal, interest, taxes, insurance, if the PITI is $1,200 a month, you need to make sure that you can rent that house out for 1,400 bucks a month. So there's some positive cash flow, because you also got to think about incidental expenses that could come up, up. So those are some of the things you can do to get into the real estate game. On the investment side, if you literally have no money, I mean, that's one of the best ways. The other popular way, this is what you learn at all these Get Rich Quick seminars is what's called wholesaling. So your job is to go look for distressed properties. You drive through neighborhoods, you look for houses that look like they're dilapidated, and you knock on the door and you ask them, like, you know, are you guys interested in selling? And you try to get the house under contract at a discount and then sell it to somebody else. And so there's some arbitrage on there. You're basically getting paid for the value of, like, finding the Deal. Yeah. So like, for example, in most counties across the United States, they have a sale at the courthouse. And what's kind of crazy is like, I've gone down to the courthouse when they're like auctioning off properties and a lot of them don't get auctioned off. Like an alarming number of them get pulled from the sale. People figure out one way or another to try to buy themselves, like another month or two. But the thing that ends up happening is a lot of them will end up back at the courthouse steps and will eventually get foreclosed on. And so that's a public list. Like you can go get that list for free. It's listed of public record. And you can go door knock those houses and say, hey, I'm curious if you guys would be open minded to selling me your property and I'll take over the burden of the payments. So there's a lot of creative ways in real estate to buy homes. There's a lot of creative ways to make immediate cash flow, like wholesaling a deal, for example. And it really doesn't cost a lot of money.
- [63:37]
Josh
I feel like that's why they always say, look, if you don't need a lot of money, you just need to find a deal. Yeah, you just need to find a deal.
- [63:45]
Chris Waters
So on the, on the real estate side, like as y' all maybe are, are picking up on this, like, imagine knocking on somebody's door and they have no idea who you are. Like, your ability to get somebody to con, like your ability to convince somebody to sign the deed over to you and to like that for that person to trust you enough that you're going to pay their mortgage and like actually accomplish what you say you're going to be doing. Like, I mean, think about that. You're a complete stranger. Like, what's the process you got to go through from an outside, you know, I call it outside sales. That skill, like, what's that process you gotta go through, you know, to be able to build rapport, establish yourself as an expert so they don't second guess your ability to pull this off and then your ability to differentiate yourself as to why this is the best option for them and why they should go with you and then ultimately close the deal and get the, the contract signs. Like, there's, there's this, there's this process. So real estate man, like inside sales and outside sales are the two most important skills defining success in real estate. And I think in large parts to any entrepreneurship journey. Like you guys, you know, sending people A cold dm. Right. And then you, you, I asked you how'd you reach out to Grant Cardone? You said you sent a, a cold email to the now. See, but then she called you up on the phone. Right. And you, like, you had to convince her to get you in front of Grant Cardone.
- [65:06]
James
Absolutely.
- [65:07]
Chris Waters
And so that's inside sales right there.
- [65:08]
James
Right.
- [65:09]
Josh
It's like you said, it's a skill because, you know, there's, there's, there's ways you gotta go about it. We were just talking about this, I think last night is, is we get, you know, hundreds of DMs on a consistent basis and people will be like, hey, or question for you. But like, I feel like if you, if you want to go out and actually seek something, you know, a meeting with someone, you have to be, it has to be strategic to be planned.
- [65:32]
Chris Waters
Yeah.
- [65:33]
Josh
And you can't, like, because at the end of the day, like, people, you know, especially, you know, the more successful they are, the less willing people are willing to, you know, give up their time because the more valuable it is. And something I think is really interesting, especially about, you know, outside sales, indoor sales, is how much of a character builder it is. Before hard knocks, I did, I did door to door sales. I did canvassing for like a, a home remodeling company company. And I'll never forget this is. I'm, I'm going through because we're selling like decks and patios and I'm pulling up on this neighborhood and all the houses don't have any decks. I'm like, I just hit the jackpot and I knock at this guy's house and he opens the door with a sniper rifle.
- [66:14]
Chris Waters
Oh. Oh, my God.
- [66:17]
Josh
I was like, oh, my God. Like, I didn't say that. Like a deer in headlights.
- [66:24]
Chris Waters
Yeah.
- [66:24]
Josh
Because you know, you don't know what.
- [66:26]
Chris Waters
You'Re going to get.
- [66:27]
Josh
You know, when you, when you. Door knocking but ended up, obviously, I'm still here. Nothing, nothing, nothing ended up happening.
- [66:34]
Chris Waters
So why didn't anybody have decks in that neighborhood?
- [66:36]
Josh
So, you know, it was, it was owned by. The whole neighborhood was owned by one person. So they're all renters.
- [66:44]
Chris Waters
Okay.
- [66:44]
Josh
So I mean, and then when, you know, when you're canvassing for a home remodeling company, you can't sell it to the renter. So it ended up being like. So it was actually a blessing in disguise. But I was terrified at the time.
- [66:55]
Chris Waters
Yeah.
- [66:55]
Josh
So. But it was, It's a character building, man.
- [66:58]
Chris Waters
Props to you for sure.
- [66:59]
Josh
You know, so yeah, well, yeah.
- [67:03]
James
30, so.
- [67:04]
Josh
Yes, sir.
- [67:04]
James
All right, well, guys, that's a wrap. On today's episode, Chris came and dropped a million dollars worth of game. He brought out the heat today, man. Thank you so much for, for coming on the show, man, and pulling up on us and awesome. Austin.
- [67:16]
Chris Waters
I love it. I love it, man. It was great. It's fun.
- [67:18]
James
Awesome, man. Cool.
- [67:20]
Josh
Where could everyone find you at.
- [67:23]
Chris Waters
Man? You know, I guess if anybody's watching this and they're interested in getting in the real estate game, you know, they can go to my website, ChristopherWaters.com that's waters with two T's, and just fill out a form on the website saying you're interested in joining. We have a scholarship program for people we'll literally pay for for them to go through real estate school. I can guarantee you. I, I. Well, I think I just dropped a couple of the hints of what's in the interview process. Yeah, but I can guarantee you it's not easy, but we'll pay for all your schooling and help you get going through our scholarship program. And, you know, I guess, you know, people interested in doing, like, investment stuff. You know, I do a lot of investment stuff, Venture, you know, angel investing and all kinds of stuff like that. You guys can send me a DM on Instagram. Yeah.
- [68:15]
James
Hey, guys, be sure to like and subscribe. We've got amazing content on the way. We'll see you in the next video.