David Diaz has tremendous knowledge of the things institutional investors look for in real estate partners. As an industry pioneer, he has helped to structure, build, market and grow some of the largest institutional investors in the single family homes industry.
During our interview you will learn the importance of three things.
1. Relationship matters
2. Team matters
3. Knowing who you are matters
Read the interview...
1. How did you get started in real estate?
In college I started out as a physical therapy major. Through a rather fortunate turn of events, I ended up in an econ class and saw my first guns vs. butter chart and I was hooked.
Math seemed so much more interesting when there was a dollar sign in front of it. After switching my major to finance, I realized that as a poor kid with no equity, I had to focus on something with it's own intrinsic value, like real estate, where I could get leverage (financing).
I started in service businesses (Lending, Brokerage, Property Management) and still keep those businesses even though I now own real property myself and have done investment for institutional buyers for the past six years.
2. What roadblocks did you first have in obtaining clients?
Early on, it was a youth issue. I was in high end finance and was always the youngest guy in the room. Everyone wants Dougy Howser to work for them, but no one wants to give him money first or let him control anything.
I partnered with older deal hounds and handled the back office/ops parts of the businesses while letting them maintain the relationships with the old money clients. These early roles served two purposes... they brought me credibility when I had none, and allowed me to learn from established players while helping them evolve with more modern tech and ops strategies.
3. What was the technique you initially used to find clients?
Our clients were unique... we shot elephant, not deer, so there was a very small pool of customers that were well known institutions or private family offices. It became a relationship building issue to stay front of mind and demonstrate market leadership.
These people only call one group in each market, and it's the one they feel is "the best" in the mind of their decision maker. You have to supplant someone or bring the customer a great deal unsolicited, to get to the speed dial position you want.
Early, you might provide unique data or advisory services for free until you can score that first meeting or engagement. Selling is 99% nurturing relationships and 1% closing when the time is right. You have to nurture to be in a position to close when the opportunity arises.
4. Was there a specific tool or resource you utilized when you first got started?
It helps to be the smartest person in the room... make sure to do your homework or have the good sense to shut up in a meeting if you don't know exactly what you're talking about.
My first boss had a saying "there are no stupid questions, except in front of a client." I would take notes and ask questions the whole ride home, but always deflected back to the senior party on our side of the table if I wasn't 100% sure of the answer.
My early mentors were my tool for growth. I offered them the tools I knew better than they did, like how to automate processes, improve our brand image, modernize our office infrastructure and they got me into rooms and meetings I was way to young to attend.
5. Is there a prospecting technique that you currently utilize that helps generate your leads?
Once you identify your target audience, you have to build the funnel. This may mean months of contacts before leads start to close. Farming takes time but pays long term dividends.
In past lives, I've been fortunate to use institutional capital to buy captive business. In my new startup, we are direct to consumer with real estate services. There are many prospecting methodologies out there, and I don't have enough data yet to endorse one vs. another. The one thing I am certain of, is that people that actively call and start relationships do more deals...
I'm reading stories about offices starting and landing in the top 3 in a market in 12-24 months because of proactive customer outreach and (most importantly) nurturing the contacts that are not ready to buy or sell when they pick up the phone. We are building our model around the nurture aspect of marketing... make contact and stay in touch until the time comes for the contact to become a customer.
6. What was your greatest struggle when you first got started?
Beyond the credibility issue of being 24 and looking like I was 16, I think I had a bad tendency to try to do too much rather than focus in on doing one thing really well. Learning to say no is very hard when you are an entrepreneur at heart and love business for the sake of business. But, when you look at breakout successes, you see a common trend of single minded focus toward a very big goal.
Beyond the credibility issue of being 24 and looking like I was 16, I think I had a bad tendency to try to do too much rather than focus in on doing one thing really well. Learning to say no is very hard when you are an entrepreneur at heart and love business for the sake of business. But, when you look at breakout successes, you see a common trend of single minded focus toward a very big goal.
I would challenge those starting out to find their weakness and if there is a way to compensate with another team member or outsourcing, then cover the base that way. Don't train your weakness unless it's a critical path issue. I suck at accounting, so I have an amazing controller that tells me when I need to refocus. Having a team that knows you, and your tendencies is a must if you want to achieve your big goals.
7. What did you do to overcome it?
I hired around my weaknesses. I was my own best admin, until I got a great assistant and went 3x my income in one year. Then I finally paid up for a solid accounting team member, that changed everything.
I didn't like disciplining staff, so I got an enforcer to play bad cop with me when needed, that upped productivity tremendously. Subsidizing my weak points didn't make me weaker, it made me stronger.
I learn from people that are organically strong where I'm weak. They benefit from my vision, direction and other areas of expertise. Where these might not be their strong areas, they are mine. Creating a business or network is really just optimizing for mutual benefit of all involved. When we view it that way, vs. a zero sum game, the method of building and direction changes dramatically.
8. What are you most excited about as you move forward with your business?
Learning the consumer marketing side will be a great experience in our new venture. Having the advantage of buying our own business with investor funds made for great scale learning, but we never had to develop the element of broad sales and marketing expertise. Also, getting to build a team from the ground up knowing what I know now from the past decade is truly exciting. How often do we get to start over without having gone bust in the process?
9. If there was one thing you could say to someone considering giving up on their real estate career what advice would give them?
Define a very specific niche and do everything you can to position yourself as the leader of that segment. If you are the beach front person for these 10 blocks, then own it... get the domains, use local imagery on your site, go to the council meetings, etc. We spend too much time trying to be all things to all people when we should be focusing on what sets us apart.
The more your market and work your areas of specific advantage the easier you will find growing your personal brand and business.
10. What motivates you to get up everyday and work hard?
I have the pleasure of truly loving what I do. I watch house flipping shows on TV when not doing the same thing at work... as they say "do what you love and you'll never work another day."
I also believe we all have a basic need for something more in our lives. I would challenge everyone reading this to identify an organization that produces good and find a way to attach your person and business goals toward supporting that organization. That could be building a church, sponsoring children or other causes.
In each of my last three companies, we have had a specific giving target as a percentage of fee revenue and have chosen organizations to work with and through to administer that giving. It's fun to grow a company, but it's even more fun to know that if you hit x number of units that equates to y number of sponsor children that will have vastly different lives because of your team's commitment to them.
Dave Diaz: https://www.greatjones.co/team/
This isn’t Dave’s first rodeo. Having cut his teeth buying, renovating, leasing and managing over 10,000 homes for Waypoint Homes and other large firms + individual owners, Dave knows a thing or two about creating profitable, delightful experiences for all involved. A rental investor himself, Dave consciously builds for owners the service and performance he expects for his own homes.