Apr 14, 2022
In today's world, it's harder than ever to build a successful business. In this episode, we talk with Shane Torres on how to start a successful business without adding to your administrative burden. By approaching someone with experience in the industry, you can find a great manager who will help run your business while you focus on other things. If things go well, you could even make some money along the way!
Shane obtained his real estate license in 2009 and decided on RE/MAX Concepts, under the RE/MAX balloon. He accepted the offer to become a Broker/Owner with RE/MAX Concepts in 2013, and he became a principal owner of RE/MAX Concepts in September 2016. Shane currently resides in Polk City with his wife and 3 kids.
[00:01 - 05:18] Have Your Employees Buy In by Giving Them Profit Share
- How Shane started as a builder and went into investing in real estate
- From surviving to thriving – How Shane made the most of opportunities that presentented themselves
- Crucial conversions you need to have when starting a business
- The cost to operate the business
- What you’re giving up in terms of control
- Profit potential
- The benefits of offering profit share to your employees
- More buy in and accountability
[05:19 - 09:36] Quality Starts form the Top Level People You Hire
- What Shane is working on in the commercial side of real estate
- Align yourself with with people who have achieved your goals and are willing to give advice
- The key to quality control is having a top level person who oversees everyone else and ensures quality is maintained
[09:37 - 14:23] How Shane is Helping Educate Real Estate Agents
- From losing everything in 2009 to self funding his properties
- How Shane discovered his city’s willingness to invest
- Pitch the value and benefits that a property would be for the city
- Real estate agents have little to no knowledge about investing in real estate, and this is a major barrier to becoming a successful real estate agent
- How to connect with Shane
Tweetable Quotes
“Quality control starts with that first key person you put in place to oversee everybody else.” - Shane Torres
“If I can do these things and be successful, but help other people become successful beyond anything they were going to accomplish on their own, then that's a win-win to me.” - Shane Torres
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Connect with Shane on LinkedIn https://www.linkedin.com/in/shane-torres-40399013
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I love helping others place money outside of traditional investments that both diversify a strategy and provide solid predictable returns.
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Email me → sam@brickeninvestmentgroup.com
Want to read the full show notes of the episode? Check it out below:
Shane Torres 00:00
If I can do these things and be successful, but help other people become successful beyond anything they were going to accomplish on their own, then that's a win win to me. So in this scenario, with this, what we're getting ready to do, is going to more than double this person would have ever made by being part of the profit share. And it's like, it's their baby, they'll treat it like their own in that regard. So, and I explained that right up front, you know, if there's room to grow in the future, usually, it's such a life changing thing right off the bat, even at 10 to 15%. It's never been an issue.
Intro 00:34
Welcome to the How to Scale Commercial Real Estate Show. Whether you are an active or passive investor, we'll teach you how to scale your real estate investing business into something big.
Sam Wilson 00:45
Shane Torres became an agent in 2009, and joined the REMAX Concepts family. As his business began to flourish. He opened an office in Polk City and began adding office staff 2013, he saw an opportunity to become a mentor and became a broker and an owner and also owns several other businesses as well, Shane, welcome to the show.
Shane Torres 01:04
Thanks for having me on.
Sam Wilson 01:05
Hey, man, the pleasure is mine. There's three questions I ask every guest who comes on the show in 90 seconds or less? Can you tell me where do you start? Where are you now? And how did you get there?
Shane Torres 01:13
Started as a builder. Currently, today I am on multiple brokerages and other businesses affiliated with that in investing as well. And what was the third one?
Sam Wilson 01:23
Where do you start? Where are you now? And how did you get there?
Shane Torres 01:25
Oh, how did I get there? I just thought worked everybody.
Sam Wilson 01:29
I love that. That's a very succinct answer. Well, tell me so outside of the REMAX, you know, residential side of things? What are the other businesses you have that kind of help augment that business?
Shane Torres 01:40
Yeah, so we have an insurance company, a settlement company, a property management company, obviously, we have a commercial division, I now do commercial development, in financially backs and builders. So I have you know, that helps create inventory, and it's sidebar to investing tool. They're all somewhat affiliated, but they all stand on their own.
Sam Wilson 02:03
Right now, that's really intriguing. And I think that's everyone's goal, I think, is to have multiple businesses and multiple sources of income was that your initial goal setting out was saying, Alright, I'm just gonna build all these, they all continue to produce revenue for me,
Shane Torres 02:17
you know, honestly, my goal set now was just to survive, but as things that opportunities have presented themselves, and I've just looked at him and said, does it make sense? And can it someday stand on its own? And if so then we do it, knowing that they all kind of work together. So now, yes, that is my goal. And how I move forward is how does it fit into our current structure?
Sam Wilson 02:38
What did opportunity look like when it presented itself to grow?
Shane Torres 02:43
You know, someone mentioned, it could be a casual conversation of acquiring an office or another business or starting another business. And I look at it, you know, can have a good revenue, what's it going to cost to operate it? Any business that I have? Someone else runs it, we pay him a very nice salary plus some incentive, make sure that we don't have headaches? And after all that said and done, is there a good return there? And if so, they will do it?
Sam Wilson 03:09
Yeah, that's really intriguing. I mean, one of the things that, you know, as you grow, especially a new business is that you may not have your process maps done, you may not have all of that stuff dialed in, because it's a new line of business. How do you start a new line of business without adding to your personal administrative burden?
Shane Torres 03:27
You know, prime example, I'm getting ready to build a daycare. So we'll own and operate a daycare. I don't know anything about operating a daycare. So what I did in that scenario that I started, I know someone who's got a background in that. And so I approached them and asked them if they'd want to run it. If so, when it comes time, you know, obviously, I put up an initial investment to get the business going. But the company at that point will pay them a good salary, but you had a piece of the profit to treat it like their own. So it's worked out really well. I mean, that process started two years ago as a joke. When jokingly said you should build a daycare, and here we are,
Sam Wilson 04:03
that's really intriguing. When you're having those conversations, obviously, you've done an initial that on the person themselves. So maybe you already know them. But how do you make sure you structure it? I know, you said you give them a really nice salary plus a profit incentive. But how do you structure it such that you aren't giving away too much of the deal too early or too fast or such that it keeps people motivated?
Shane Torres 04:25
It's never that much of a it could be anywhere from 2% to 10%, meaning I can still control 90% of it. I've never given up more than 60 to 70% or I mean 30 to 40%. I retain 60 to 70%. Yeah, and in a lot of cases. So my goal has been you know, if I can do these things and be successful, but help other people become successful beyond anything they were going to accomplish on their own, then that's a win win to me. So in this scenario, with this what we're getting ready to do, is going to more than double this person's revenue. Right, by being part of the profit share, and it's like, it's their baby, they'll treat it like their own in that regard. So, and I explained that right up front, you know, if there's room to grow in the future, usually, it's such a life changing thing right off the bat, even at 10 to 15%. It's never been
Sam Wilson 05:19
an issue, right? That's really intriguing. Tell me about your commercial lines of business. I know, daycare probably falls in the commercial line of things. But tell me about your commercial. What you guys are building developing what you see in the future and why.
Shane Torres 05:32
Yep, so right now my focus has been like retail, a lot of it started with just places I wanted to put real estate offices, there was nothing there. So we would build and develop our own building. But while doing so why not just make it bigger, and lease it out to other people as well. So I get my biggest one, obviously, couple of years ago, started in 2019, went through 2020, which it still worked out really great. And my office filled half of that building. But I decided to once I got that completely fall, I would list it at a crazy price. And I did and I sold it. So then I was able to parlay that into other things. So currently looking at acquiring a 29,000 square foot building that we currently lease, and completely rehabbing that for our main office. I'm looking at a strip center right behind the building here that I'm sitting in. For that one will house the anchors will be a restaurant and a coffee shop, which I will also be a part of the ownership of those two entities, the daycare, and then the biggest one I'm working on is on a property that south of here that it will be a 15,000 square foot new build, that is going to be a restaurant bar Event Center real estate office on one, I got the idea from office in Scottsdale, that's done something similar. But what I decided is because we're also doing coffee shops slash real estate office, anything we do office wise, going forward will be dual purpose, meaning not necessarily specifically real estate. So the first example would be the coffee shop and real estate office that hadn't been done before, they will be open to the public, they will be able to have a membership to it. And then the same thing with this new one. It's more than dual purpose because it's an event center, restaurant and real estate office all in one that will be separated with glass walls, and those doors will open up. And basically you have seating for a bigger event or for the restaurant or whatever it may be. And that's in a development. I don't know if you've heard of them or not. They're called Agra hoods. So basically, there's only a couple of them in the country. It's basically a residential development in the middle of a working farm. So it's the only one in the Midwest. The other ones I think are out in Colorado and stuff like that very unique concept. It's like a 20 year project. We've got that land that we're working on designs and performance and things like that right now. So that will be the big one coming up. And then just constantly looking at what other projects are out there at 44 acres tied up to do some commercial and residential development ran into some bad soil. So I changed my mind trying to think of missing anything. Oh, revitalizing the church here in town. That's from my wife's business. That'll be a youth center game lounge, Community Room, but not like your normal Community Room be like inside of a house. So I think that's all for this year.
Sam Wilson 08:35
I think you got your hands full. That's a lot of moving pieces if someone wanted to emulate what you do. And I know we touched on this a little bit. Yeah. What are some tips or what are some things you would say to them? You said, Hey, you want to go out and have your hands and a dozen different things without I guess you and I are both bald. So I can't You can't sit without going bald. Brett, you know, without the proverbial going bald, what would you say to it?
Shane Torres 08:57
I just align myself with people who have done it before and willing to give advice. And along the way I don't try to reinvent the wheel. Anything I've done. I've got a good team of people around me. And I just rely on them to make sure that I'm making smart decisions.
Sam Wilson 09:12
How do you enforce or how do you manage quality control?
Shane Torres 09:16
I think it starts with that first key person you put in place to oversee everybody else. We've been fortunate and blessed in all of our entities that we've got a really good top level person that is all about quality control, just as we are and they're able to, you know, reflect that down to the others that they oversee.
Sam Wilson 09:36
Talk to me about funding is this something where you are at the point where everything is self funded,
Shane Torres 09:41
some of it to be completely honest. In 2009 I lost everything and had to start over so I don't like to completely sell fun. Some of them are self funded. If I know I'm gonna get it back quickly. But I have partnerships with a couple people when I first got started, did my first project ever I could have done it on my own. I didn't want to That one had four or five partners in it. I got to the point now I just I don't want any more than one, like there's some Class B shares, and we'll sell those for return, you know, investors. And that's about point I did. It's been brought up a few times. So I think we're going to start a syndication group for our brokerage and let our agents start to invest in that in that way, you know, they might not have the risk tolerance, but they might be willing to start building that generational wealth. And we can help them with that. So I do a combination of investors, myself and banks,
Sam Wilson 10:32
right. Yeah, that's interesting when it comes to
Shane Torres 10:36
income annuities, communities, cities, I mean, I don't know what it's like there. But around here, like the daycare, the city gave me a very nice tax rebate for up to 15 years. That's the equivalent of about $1.5 million. I know of another development that just got announced the city's kicking in $3 million to get that deal done. So that's what I'm referring to about cities and municipalities.
Sam Wilson 11:03
How do you discover City's willingness to participate?
Shane Torres 11:08
It's usually the level of need of the project going into the community. Not so my daycare, for example, there are no daycares in that community. There's been like 400 houses built in the last few years, there's another 200 coming. It's a dire need over there. Right. So it started as a joke, I jokingly said, they're like, come talk to us, you know, tell us what it would take, I told them and a year later, it came to fruition, they have to look at what it's going to do for them as well. And as long as you can show the value to that community, more often than not, they'll do it.
Sam Wilson 11:40
Hmm. Very cool. I love that. And I guess when it comes to want to explore this idea of setting up a fund, or your agents to invest in because one of the things that I have seen, and I'm sure anybody listening to the show can understand is that most real estate agents have no idea how to invest in real estate, how are you overcoming that with the people inside of your organization? I know, this is one of the methods, but what's that kind of full picture look like?
Shane Torres 12:06
It's actually one of the things we talk about train on regularly. So that's been one of the other things, we have our own real estate school as well. One of the classes that we have is how to create that what we call mailbox money or you know, wake up money or whatever. And a lot of them, you know, they know how to dabble in the residential side of stuff, you know, they can buy a rental hear there, but they don't know the scope of this type of stuff in these larger deals. So as these questions have come up, more and more, I decided to put it out there and be like, hey, who would be interested in something like this, you know, of our 310 agents, over about 115 said yes, they want more info. So that's a lot that could happen. You start looking at that kind of people, you go buy, you know, multi unit apartment building or apartment complexes. And I mean, the sky's the limit. And I'm actually I think, here at the end of the month, I have a class, not a class, just a presentation, I'm gonna go through and show them and explain how it all works, and educate them on you know, the risks and the rewards of what it would take to get into it and minimums things like that.
Sam Wilson 13:11
That is absolutely awesome. Good. I mean, you know, I got my license here in Tennessee, I don't do anything, really with it on the residential side used two years ago, but certainly that was a need that I saw in that space was like, it's amazing how little education exist around how to invest in real estate on the residential side and on the commercial side of the right side is just a complete mystery to most real estate agents. So that's absolutely fantastic. I love what you're doing there for the people on your team. Love what you're doing there in an Iowa so keep up the good work. Thank you for coming on today. For listeners want to get in touch with you or learn more about you what is the best way to do that?
Shane Torres 13:46
They can just contact me or you know, I'm on social media or email Shane Torres at REMAX. dotnet
Sam Wilson 13:53
perfect, Jane, thank you for your time. I do appreciate it. Well, thank you.
Sam Wilson 13:57
Hey, thanks for listening to the How to Scale Commercial Real Estate Podcast. If you can do me a favor and subscribe and leave us a review on Apple Podcasts, Spotify, Google Podcasts, whatever platform it is you use to listen, if you can do that for us, that would be a fantastic help to the show. It helps us both attract new listeners as well as rank higher on those directories so appreciate you listening. Thanks so much and hope to catch you on the next episode.