Systems guru Leo Pareja talks about niche focus, his “market segmentation,” and becoming the fifth most successful real estate team in America.
Leo is no stranger to change. He was born in Latin America and lived in over a half a dozen countries before turning 12. While in middle school, he immigrated with his family to the Washington, D.C. area, a new school, a new culture, and new rules of engagement. Fortunately, Leo comes from a family that believes in the value of higher education, and he thrived. Entering college in the midst of the dot-com craze, Leo watched the career opportunities in his chosen Graphics Arts major sour, along with all the technology companies going bust. Devastated but not deterred, Leo jumped into real estate. After obtaining his real estate license, he went to work for an investor who had just purchased a Keller Williams franchise. His first sale netted him more than he had earned his entire previous year as a waiter, and from that very first transaction he knew what his career path would be.
The real estate boom of 2002-2006 was very good for Leo, and he began ranking as a top producer in his market. During that time, he tried his hand at being a principal broker, rehabbing real estate, and even developing a minor subdivision along with his sales practice. In 2006, he was recruited to grow the real estate division of a large holding company that owned accounting, mortgage, and title services. Inside of six months, Leo grew the one-person division into 4 offices and 100+ agents, servicing D.C., Maryland, Virginia, and West Virginia. During the real estate meltdown of 2007, Leo returned to Keller Williams and sales, focusing on short sale and REO listings. Leo quickly learned the ins and outs of the default world and is now currently one of the largest volume brokers in his market.
Now a 10-year veteran with over 1,600 successfully completed transactions, Leo is recognized nationally as a real estate industry expert and is routinely a featured speaker at The Five Star Default Servicing Conference and Expo and Keller Williams national conferences. In addition to his sales business, Leo is a National Instructor for VRM University, delivering sound and creative strategies for disposing of bank-owned properties and providing “REO Specialist” certification for real estate professionals who complete the training.
Placester’s Seth Price caught up with Leo recently to chat about his definition of success, niche segmentation, and the power of systems.
Riding this market for the last decade has put a lot into perspective. What you “have” can disappear overnight, and the “stuff” of life is temporary. I am inspired by helping as many people as I can. When I’m gone, I want to have left my own little dent in the universe.
Placester: What are you working on right now?
Leo Pareja: I’m constantly making sure our systems are optimized to create the best output for clients. If we are putting out the same fire twice, then we should have a solution for it and we should put a system into place. For 2012, my goal is to stay ahead of changes in the industry as they come up, as well as start focusing on different business lines that fit our existing structure. In my opinion, the key to the business is to be ahead of the trends and shift quickly.
P: What does your typical day look like?
LP: That really varies, since I do wear several hats. I spend a lot of time public speaking, and often find myself traveling to teach extensive seminars about REO strategies. When I’m in town, I focus on the DC Chapter of the National Association of Hispanic Real Estate Professionals (NAHREP), where I’m president, or my private equity fund clients, who buy large amounts of real estate for either short- or long-term investment. I try to spend my time where I can create the most impactful results.
P: What is the worst job you ever had and what did you learn from it?
LP: Working at the GAP for one holiday season in high school. To this day, I still get goose bumps whenever I walk in the malls and hear the repetitive Holiday music blaring over the speakers. I guess what I learned was that I would never work for anyone ever again. That was my last W-2 position. Since then, I have owned or been a partner in every business that I have worked.
P: Three real estate trends that excite you?
LP: 1. This market has brought the true professionals out into the spotlight. The days of inputting the listing in MLS and sticking the sign in the ground and getting a contract are long gone.
2. The transparency of the internet. If you wrong somebody, people are going to find out, thus raising the bar.
3. Seeing more businesspeople and younger folks enter the real estate Industry, again raising the bar.
P: How do you differentiate yourself from the competition?
LP: One of the reasons I love our industry is that you can really play to your strengths, especially if you go into the niche segment of the industry. I specialize in multi-transactional sellers like financial institutions, private equity funds, developers and investors. My team is built for high volume, with a focus on analytics. With that said, I am very different than the average Realtor. A seller can call me with fifty listings across three states, and I can have appraisal style valuations within 48 hours with a recommendation on the best disposition strategy per asset.
P: How do you bring ideas to life?
LP: I notice that I tend to get tunnel vision. What I mean by that is as an idea starts to form in my mind, I tend to focus on it exclusively. I write it down, play with it, try it, tweak it, bounce it off my peers and then scrap it or implement it once I have real world data. This part of being an entrepreneur is probably my favorite. It’s that creative process that gets me really excited and out of bed in the morning. Not knowing what I will be focusing on in six months is what makes this journey so fun.
P: What inspires you?
LP: I was raised by two amazing individuals who have spent their entire lives helping others. I have always been driven to succeed, with the plan to give away as much as possible. Riding this market for the last decade has put a lot into perspective. What you “have” can disappear overnight, and the “stuff” of life is temporary. I am inspired by helping as many people as I can. When I’m gone, I want to have left my own little dent in the universe.
P: What is one mistake you’ve made, and what did you learn from it?
LP: That’s an easy one. In my early twenties, I thought my natural talent was the reason I was so successful. So when the “once in a lifetime time market” that made heroes out of anyone with a heartbeat and a license exploded, I learned that I needed to be a student of the market, to capitalize on trends and shifting market data. Now, I’m just a humble student with a lot more respect, and I’ve learned to be grateful for every moment.
P: How did you know to focus on the REO market? Was it just an adaptation to the market crumbling?
LP: Being at the right place at the right time is a product of being everywhere and having everyone know who you are. I focus on creating relationships and providing value. The driver of that value can change with the market, but the relationship is consistent and most important. As the market was shifting in 2007, I had some existing relationships that found themselves needing insight handling blocks of REO properties. When they asked for my help, I was able to deliver value. That value grew, as did my expertise. Those relationships are the foundation of my business.
P: How do you measure success?
LP: That seems to change with each stage of the journey. In the past it has been rankings, dollars and awards. What I’ve learned is once you get to that place, it may not necessarily feel like what you hoped it would. My definition of success today is more focused on how much time I get to spend with my passions: teaching, traveling, and spending time with family and friends.
P: You have earned and lost fortunes. How do you get over that kind of hit?
LP: Truth be told, I think I started in the fetal position, unable to move. It’s amazingly painful to have your business implode. I found it very difficult not to take it personally. My decision to get back in the business is due in part to who I am (a survivor), but also to the support I had around me. I feel very fortunate to have another opportunity, and I’ve worked hard not to forget that.
P: What advice would you give to someone starting out in real estate today?
LP: First, decide if this really what you want to do. The attrition rate is a lot higher than the industry likes to admit. This is a lifestyle, not just a job. You can’t compare it to the jobs most folks leave behind before entering real estate. If the answer is yes, figure out how you are wired and how you are motivated, then go find someone achieving success with a compatible business model and similar personalities, and go emulate them. I don’t believe in re-inventing the wheel. Find what works and study. Oh yeah, hire a coach.
Your niche most likely will be in step with your passion. Get involved in the communities that you love. learn from them, find out their needs. You don’t have to become niche expert right out of the box, but you do have to grow into one.
P: You talk about segmentation and niche focus. With so much competition, how can a new agent find their niche?
LP: Real estate is such a fantastic market, with opportunities for businesses of all sizes. At the top 1% of the residential market, those agents and teams are doing north of 300-500 transactions a year. The intense focus on lead generation is a must. Advertising, radio, mail, and email marketing all play a part. On the other end of the spectrum, you can have a very respectable business with 20-50 transactions a year, which is a great living. Lasting success goes hand in hand with passion. Your niche most likely will be in step with your passion. Get involved in the communities that you love. learn from them, find out their needs. You don’t have to become niche expert right out of the box, but you do have to grow into one.
P: How do find and train talent?
LP: I think that most leaders hire too late. It’s important to hire earlier than you think. Hire part-time. Act like an attorney and track everything you do. If 80 percent of your time is spent doing $8/hour work, hire an $8/hour assistant. I believe in hiring slow and firing fast. Build in systems that will help your new hires succeed. One of the greatest team building lessons I learned was to hire people that have the strengths that I lack. Your natural inclination is to hire someone like you, but the reality is that you don’t need another you. You need a team, and not everyone needs to pitch.
P: How do you see technology shaping the business of real estate in the future?
LP: The consumer is only going to get more sophisticated and educated. I think the practitioner of the future is going to have to become more of an expert in their niche to stay relevant.
P: What is one business idea that you’re willing to give away to our readers?
LP: I have no secret. Just be systematic and disciplined. Have systems so that you do not get in the way of your own success. Get those systems from the people you want to emulate. Don’t be scared to borrow from other industries and innovate if needed.
P: What do you read every day, and why?
LP: I read something every day, and I listen more than actual reading. Again, be aware of how you are wired. I learn faster and better audibly, so I listen to anywhere from 3-6 books per month on my iPhone. I listen for a couple of hours every day, while I am getting ready in the morning and while in the car or on a plane. You have no idea how much time you actually have. I am constantly absorbing as many different ideas as I can. If I like what I hear, I typically read or listen to everything the author has ever published.
P: What is the one book that you recommend our community should read, and why?
LP: I just finished Dave Ramsey’s Entreleadership. It has some very good, basic, sound business principles that every business owner could benefit from, small and large alike.
P: What is your favorite gadget, app or piece of software that helps you every day?
LP: iPhone and iPad. I need nothing else.
P: Three people we should follow on Twitter, and why?
LP: I guess this is almost sacrilegious, but I’m not on Twitter nor Facebook. I guess I should put it on my do list for 2012.
P: What real estate expert would you love to see us interview?
LP: Someone at the Fed who wants to explain what the plan really is.
P: When is the last time you laughed out loud? What caused it?
LP: My 18-month-old nephew. The simplest things cause the best reactions in him, from seeing my cat for the first time and chasing him under the bed to his reaction to seeing his own reflection in the mirror. Children are amazing.
P: How can people connect with you?
LP: Leo Pareja Team
P: Where are you located?
LP: Arlington, Virginia.