How to Make It Big in the Real Estate Industry - Interview with Rick Cunningham
How and when did you get started in Real Estate?
I got started in real estate about 20 years ago, and I got right into real estate after I finished business school. I realized I had a passion for helping people and I originally was looking to get into commercial real estate but decided I can help more people by getting into the residential side first.
When was the moment you knew that real estate was the thing you wanted to do?
In business school, I realized I had a good act for business and I thought that this industry needed people in a higher level and it was a great opportunity for me to come in and make a change. I saw this as an opportunity to really grow, develop and make good money while I could also help people.
How did you grow your business when you became a real estate agent?
I had great mentors. First thing I would say for a new person is that they should get a great mentor. Mentorship is critical. I got the best training and really focused on generating leads. We’re in the real estate business but it’s really about lead generation. Lead follow ups get you the business. You can do all the real estate in the world, but if you don’t have a client, you’re not gonna make money. That’s my motto.
How did you transition from being a real estate agent to owning several real estate brokerages in Keller Williams?
When I first got approached to being the first agent in Los Angeles for Keller Williams, I saw it as an opportunity to have a business model that really supports my real estate sales career. And then I saw the bigger opportunity, which is why I went to business school and own my brokerage. I always had that vision and this became the right platform for me to exercise that vision and I now own 20 Keller Williams offices in California and Hawaii.
So was the transition simple?
It’s not simple, but I am very determined. The way I ran my real estate business is the same way I run my real estate companies. It’s all about how I help the agent, consumers and how I provide the best level of support so that my agents thrive and be successful as well.
What do you look for when you’re interviewing an agent that want to work for your brokerage?
They have to have passion and drive. You can’t motivate people, they have to love the business. The skills can be learned, but you have to have passion. Passion can’t be learned.
What do you attribute your success to?
I learned early on that it’s all about who you’re in business with that matters. Whether that’s a client, people that support you or who you help support. I’ve learned how to develop people. I believe in investing in people and those people invest back in me and because of that we’ve grown an incredible business. There’s no way I can run these many businesses without the help and support of others.
Is there anybody in particular that influenced you?
Yes of course, there’s Gary Keller who built Keller Williams- one of the people I look up to for inspiration. He’s an incredible leader and not just in real estate, he’s written all these books, and he really looked at this business in a different way, and because of that I respect what he’s done.
And there are a lot of people, like John Maxwell, Tony Robbins and others that influenced me as well. I learned to create habits when I want to get better at certain things, whether it’s personal or business.
How do you discipline yourself to keep that habit?
I put sticky notes on my mirror. And I do it for 30-40 days. It’s the first thing I see in the morning and the last thing I see at night. It’s a constant reminder. I don’t put more than three things at once and I succeed at more than 90% of it. I believe a habit is developed over 26-27 days. Creating those habits becomes a pattern.
If you want to make money in the real estate business you need to be disciplined in the most important areas. That’s lead generation, lead follow up and really being focused in certain areas.
How important do you think it is to have a well balanced life?
Constant balance is important. I work really hard and I make sure I’m playing really hard too. I work at the extremes, but my family is important and at certain times my phone gets turned off and everything else has to wait. You got to be present at work and you got to be present at home.
If you’re really effective the first four hours of the business day you can accomplish a lot and become one of the top agents in the entire city. It’s about laser-focus for at least part of the day.
How do you define success?
I define success by less monetary and more about when people recommend me to others. It makes me feel like I’m accomplishing something. I’m making a difference in people’s lives, I’m making a difference in my own life, and the money is the bi-product.
Let’s talk about the market. Where do you think it’s headed?
We’re due for more interest rate hikes because the economy is actually doing well and I feel like we’re going to have a pretty good period right now, but I think that’s a short window because we’re due for a downturn in the market. We will stay strong because of the lack of inventory right now, but that’s the only thing really that’s propelling us through what should’ve been and already is a downturn market.
Are you expecting a downturn anytime soon?
I believe we saw part of it last Fall and even into January. I think we’re having a robust Spring because the fundamentals in the difference of government is causing part of that, and the fact that we have a 4.8% unemployment rate really helps so people can buy. The problem is when interest rates start going up, the affordability changes and causes a problem.
There is another big issue too, which is the affordability in the new construction development to meet the demands of first time home buyers. There’s so much demand and not enough supply and mainly because the cost of land, the cost of development and entitlement is so expensive that why build a lower income project when you can build much more expensive homes.
The affordability index is very low in the Los Angeles area and San Francisco area. How do we fix the problem that they rather rent then buy?
If you look at the cap rate of apartment buildings, it’s unprecedented numbers. It’s probably because of the lack of supply. Until they allow for more building to go on or create some sort of government sponsored thing in order to create more supply necessary for our economy to support that growth, we’re gonna have a really tight and difficult market.
What’s your motto when it comes to real estate?
Be in it for the passion or don’t be in it (at all).
Robert interviews Rick Cunningham - a Real Estate mogul, owning and investing in multiple Keller Williams offices in California and Hawaii.